þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Michigan
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38-1999511
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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25505 W. Twelve Mile Road
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Southfield, Michigan
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48034-8339
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Name of each exchange on which registered
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Common Stock
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The Nasdaq Stock Market
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Large accelerated filer
þ
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
o
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Emerging growth company
o
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(Do not check if a smaller reporting company)
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Item
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Description
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Page
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PART I
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PART II
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PART III
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PART IV
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16.
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Form 10-K Summary
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For the Years Ended December 31,
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|||||||
Consumer Loan Assignment Volume
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2017
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2016
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2015
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Percentage of total unit volume with either FICO
®
scores below 650 or no FICO
®
scores
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95.6
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%
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95.8
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%
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96.1
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%
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Unit Volume
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Dollar Volume (1)
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||||||||
For the Years Ended December 31,
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Portfolio Program
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Purchase Program
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Portfolio Program
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Purchase Program
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||||
2015
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87.4
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%
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12.6
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%
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82.8
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%
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17.2
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%
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2016
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78.6
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%
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21.4
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%
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71.4
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%
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28.6
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%
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2017
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72.5
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%
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27.5
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%
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68.5
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%
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31.5
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%
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(1)
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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.
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•
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a down payment from the consumer;
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•
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a cash advance from us; and
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•
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after the advance 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”).
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•
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First, to reimburse us for certain collection costs;
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•
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Second, to pay us our servicing fee, which generally equals 20% of collections;
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•
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Third, to reduce the aggregate advance balance and to pay any other amounts due from the Dealer to us; and
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•
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Fourth, to the Dealer as payment of Dealer Holdback.
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•
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received first accelerated Dealer Holdback payment under the Portfolio Program;
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•
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franchise dealership; or
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•
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independent dealership that meets certain criteria upon enrollment.
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•
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Finance charges, which are comprised of: (1) servicing fees earned as a result of servicing Consumer Loans assigned to us by Dealers under the Portfolio Program; (2) finance charge income from Purchased Loans; (3) fees earned from our third party ancillary product offerings; (4) monthly program fees of $599, charged to Dealers under the Portfolio Program; and (5) fees associated with certain Loans;
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•
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Premiums earned on the reinsurance of vehicle service contracts; and
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•
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Other income, which primarily consists of: ancillary product profit sharing, GPS-SID fees, remarketing fees, Dealer support products and services, and Dealer enrollment fees. For additional information, see Note 2 to the consolidated financial statements contained in Item 8 to this Form 10-K, which is incorporated herein by reference.
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For the Years Ended December 31,
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|||||||
Percent of Total Revenue
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2017
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2016
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2015
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Finance charges
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91.1
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%
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90.2
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%
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88.5
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%
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Premiums earned
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3.7
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%
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4.4
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%
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5.8
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%
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Other income
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5.2
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%
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5.4
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%
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5.7
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%
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Total revenue
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100.0
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%
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100.0
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%
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100.0
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%
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For the Years Ended December 31,
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Dealer Enrollments
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Active Dealers (1)
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2015
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4,285
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9,064
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2016
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4,100
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10,536
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2017
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4,491
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11,551
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(1)
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Active Dealers are Dealers who have received funding for at least one Loan during the period.
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•
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the Dealer's refusal to allow us to audit its records relating to the Consumer Loans assigned to us;
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•
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the Dealer, without our consent, is dissolved; merges or consolidates with an entity not affiliated with the Dealer; or sells a material part of its assets outside the course of its business to an entity not affiliated with the Dealer; or
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•
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the appointment of a receiver for, or the bankruptcy or insolvency of, the Dealer.
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•
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any unreimbursed collection costs on Dealer Loans;
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•
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any unpaid advances and all amounts owed by the Dealer to us; and
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•
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a termination fee equal to 15% of the then outstanding amount of the Consumer Loans assigned to us.
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•
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the consumer and Dealer have signed a Consumer Loan contract; and
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•
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we have received the executed Consumer Loan contract and supporting documentation in either physical or electronic form.
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•
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the Consumer Loan has been legally assigned to us; and
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•
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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.
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•
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change pricing or charge the Dealer fees for future Consumer Loan assignments;
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•
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reassign the Consumer Loans back to the Dealer and require repayment of the related advances and/or purchase payments; or
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•
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terminate our relationship with the Dealer.
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•
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An individual Consumer Loan may be reassigned within 180 days of assignment. We require repayment of the related advance or purchase payment and, if requested more than 90 days after assignment, payment of a fee; and
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•
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All Consumer Loans assigned under the Portfolio Program may be reassigned through termination of the Dealer servicing agreement, as described under "Dealer Servicing Agreement," above.
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The collection system, which assigns Consumer Loans to collectors through a predictive dialer and records all collection activity, including:
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•
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details of past phone conversations with the consumer;
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•
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collection letters sent;
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•
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promises to pay;
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•
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broken promises;
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•
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repossession orders; and
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•
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collection attorney activity.
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The servicing system, which maintains a record of all transactions relating to Consumer Loan assignments and is a primary source of data utilized to:
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•
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determine the outstanding balance of the Consumer Loans;
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•
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forecast future collections;
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•
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establish the amount of revenue recognized by us;
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•
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calculate Dealer Holdback payments;
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•
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analyze the profitability of our program; and
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•
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evaluate our proprietary credit scoring system.
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For the Year Ended December 31, 2017
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(Dollars in millions)
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Consumer Loan Assignments
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Active Dealers (2)
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Dollar Volume (1)
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% of Total
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Number
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% of Total
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|||||
Michigan
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$
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285.7
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10.0
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%
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792
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6.9
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%
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Ohio
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209.8
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7.3
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%
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777
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6.7
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%
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Texas
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189.7
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6.6
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%
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847
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7.3
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%
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New York
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176.4
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6.1
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%
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690
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6.0
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%
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Maryland
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132.0
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4.6
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%
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291
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2.5
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%
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All other states
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1,879.5
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65.4
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%
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8,154
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70.6
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%
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Total
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$
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2,873.1
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100.0
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%
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11,551
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100.0
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%
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For the Year Ended December 31, 2016
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(Dollars in millions)
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Consumer Loan Assignments
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Active Dealers (2)
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|||||||||
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Dollar Volume (1)
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% of Total
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Number
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% of Total
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|||||
Michigan
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$
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255.1
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9.7
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%
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756
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7.2
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%
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Ohio
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179.0
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6.8
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%
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674
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6.4
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%
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Texas
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173.3
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6.6
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%
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755
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7.2
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%
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New York
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166.4
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6.3
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%
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657
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6.2
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%
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Maryland
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130.3
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4.9
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%
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242
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2.3
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%
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All other states
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1,731.4
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65.7
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%
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7,452
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70.7
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%
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Total
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$
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2,635.5
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100.0
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%
|
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10,536
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100.0
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%
|
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For the Year Ended December 31, 2015
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|||||||||||
(Dollars in millions)
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Consumer Loan Assignments
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Active Dealers (2)
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|||||||||
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Dollar Volume (1)
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% of Total
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Number
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% of Total
|
|||||
Michigan
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$
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232.3
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10.7
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%
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675
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7.5
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%
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New York
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173.2
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8.0
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%
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615
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6.8
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%
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Ohio
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144.3
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6.7
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%
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572
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6.3
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%
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Texas
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128.8
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5.9
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%
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|
610
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6.7
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%
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Maryland
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97.2
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4.5
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%
|
|
208
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2.3
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%
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All other states
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1,391.2
|
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64.2
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%
|
|
6,384
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70.4
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%
|
|
Total
|
$
|
2,167.0
|
|
|
100.0
|
%
|
|
9,064
|
|
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100.0
|
%
|
(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.
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(2)
|
Active Dealers are Dealers who have received funding for at least one Loan during the year.
|
|
|
Number of Team Members
As of December 31,
|
|||||||
Operating Function
|
|
2017
|
|
2016
|
|
2015
|
|||
Originations
|
|
517
|
|
|
453
|
|
|
409
|
|
Servicing
|
|
810
|
|
|
728
|
|
|
640
|
|
Support
|
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490
|
|
|
428
|
|
|
376
|
|
Total
|
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1,817
|
|
|
1,609
|
|
|
1,425
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•
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incur and guarantee debt;
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•
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pay dividends or make other distributions on or redeem or repurchase our stock;
|
•
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make investments or acquisitions;
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•
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create liens on our assets;
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•
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sell assets;
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•
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merge with or into other companies; and
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•
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enter into transactions with stockholders and other affiliates.
|
•
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our ability to obtain additional financing for Consumer Loan assignments, working capital, debt refinancing or other purposes could be impaired;
|
•
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a substantial portion of our cash flows from operations will be dedicated to paying principal and interest on our debt, reducing funds available for other purposes;
|
•
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we may be vulnerable to interest rate increases, as some of our borrowings, including those under our revolving credit facility, bear interest at variable rates;
|
•
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we could be more vulnerable to adverse developments in our industry or in general economic conditions;
|
•
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we may be restricted from taking advantage of business opportunities or making strategic acquisitions; and
|
•
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we may be limited in our flexibility in planning for, or reacting to, changes in our business and the industries in which we operate.
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ITEM 5.
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MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
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|
2017
|
|
2016
|
|
2015
|
||||||||||||||||||
Quarters Ended
|
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High
|
|
Low
|
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High
|
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Low
|
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High
|
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Low
|
||||||||||||
March 31
|
|
$
|
221.00
|
|
|
$
|
183.01
|
|
|
$
|
223.57
|
|
|
$
|
161.00
|
|
|
$
|
209.99
|
|
|
$
|
129.82
|
|
June 30
|
|
264.43
|
|
|
182.50
|
|
|
209.99
|
|
|
166.90
|
|
|
246.45
|
|
|
191.25
|
|
||||||
September 30
|
|
284.75
|
|
|
239.00
|
|
|
209.99
|
|
|
172.38
|
|
|
277.98
|
|
|
178.79
|
|
||||||
December 31
|
|
338.12
|
|
|
274.02
|
|
|
221.10
|
|
|
160.63
|
|
|
258.58
|
|
|
159.43
|
|
(Dollars in millions, except per share data)
|
|
Years Ended December 31,
|
||||||||||||||||||
|
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2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Income Statement Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Finance charges
|
|
$
|
1,011.5
|
|
|
$
|
874.3
|
|
|
$
|
730.5
|
|
|
$
|
630.4
|
|
|
$
|
590.4
|
|
Premiums earned
|
|
41.1
|
|
|
43.0
|
|
|
48.2
|
|
|
52.3
|
|
|
51.5
|
|
|||||
Other income
|
|
57.4
|
|
|
51.9
|
|
|
46.6
|
|
|
40.8
|
|
|
40.2
|
|
|||||
Total revenue
|
|
1,110.0
|
|
|
969.2
|
|
|
825.3
|
|
|
723.5
|
|
|
682.1
|
|
|||||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Salaries and wages
|
|
140.1
|
|
|
126.5
|
|
|
116.4
|
|
|
100.2
|
|
|
87.3
|
|
|||||
General and administrative
|
|
55.5
|
|
|
48.2
|
|
|
37.8
|
|
|
34.3
|
|
|
34.4
|
|
|||||
Sales and marketing
|
|
58.4
|
|
|
49.4
|
|
|
45.9
|
|
|
36.8
|
|
|
34.5
|
|
|||||
Provision for credit losses
|
|
129.3
|
|
|
90.2
|
|
|
41.5
|
|
|
12.8
|
|
|
21.9
|
|
|||||
Interest
|
|
120.2
|
|
|
97.7
|
|
|
76.0
|
|
|
56.7
|
|
|
65.0
|
|
|||||
Provision for claims
|
|
22.7
|
|
|
26.0
|
|
|
33.2
|
|
|
40.0
|
|
|
40.8
|
|
|||||
Loss on extinguishment of debt
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21.8
|
|
|
—
|
|
|||||
Total costs and expenses
|
|
526.2
|
|
|
438.0
|
|
|
350.8
|
|
|
302.6
|
|
|
283.9
|
|
|||||
Income before provision for income taxes
|
|
583.8
|
|
|
531.2
|
|
|
474.5
|
|
|
420.9
|
|
|
398.2
|
|
|||||
Provision for income taxes
|
|
113.6
|
|
|
198.4
|
|
|
174.8
|
|
|
154.7
|
|
|
145.1
|
|
|||||
Net income
|
|
$
|
470.2
|
|
|
$
|
332.8
|
|
|
$
|
299.7
|
|
|
$
|
266.2
|
|
|
$
|
253.1
|
|
Net income per share:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
$
|
24.12
|
|
|
$
|
16.37
|
|
|
$
|
14.35
|
|
|
$
|
11.96
|
|
|
$
|
10.61
|
|
Diluted
|
|
$
|
24.04
|
|
|
$
|
16.31
|
|
|
$
|
14.28
|
|
|
$
|
11.92
|
|
|
$
|
10.54
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
19,497,719
|
|
|
20,331,769
|
|
|
20,891,695
|
|
|
22,257,104
|
|
|
23,850,789
|
|
|||||
Diluted
|
|
19,558,936
|
|
|
20,410,116
|
|
|
20,980,753
|
|
|
22,331,401
|
|
|
24,009,593
|
|
|||||
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Loans receivable, net
|
|
$
|
4,619.6
|
|
|
$
|
3,886.6
|
|
|
$
|
3,101.5
|
|
|
$
|
2,512.9
|
|
|
$
|
2,212.8
|
|
All other assets
|
|
366.0
|
|
|
331.4
|
|
|
271.1
|
|
|
258.3
|
|
|
207.2
|
|
|||||
Total assets
|
|
$
|
4,985.6
|
|
|
$
|
4,218.0
|
|
|
$
|
3,372.6
|
|
|
$
|
2,771.2
|
|
|
$
|
2,420.0
|
|
Total debt
|
|
$
|
3,070.8
|
|
|
$
|
2,603.7
|
|
|
$
|
2,067.8
|
|
|
$
|
1,738.3
|
|
|
$
|
1,379.0
|
|
Other liabilities
|
|
379.0
|
|
|
440.6
|
|
|
376.7
|
|
|
330.7
|
|
|
290.9
|
|
|||||
Total liabilities
|
|
3,449.8
|
|
|
3,044.3
|
|
|
2,444.5
|
|
|
2,069.0
|
|
|
1,669.9
|
|
|||||
Shareholders' equity (1)
|
|
1,535.8
|
|
|
1,173.7
|
|
|
928.1
|
|
|
702.2
|
|
|
750.1
|
|
|||||
Total liabilities and shareholders' equity
|
|
$
|
4,985.6
|
|
|
$
|
4,218.0
|
|
|
$
|
3,372.6
|
|
|
$
|
2,771.2
|
|
|
$
|
2,420.0
|
|
(1)
|
No dividends were paid during the periods presented.
|
ITEM 7.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
|
Forecasted Collection Percentage as of (1)
|
|
Current Forecast Variance from
|
|||||||||||||||||
Consumer Loan Assignment Year
|
|
December 31, 2017
|
|
December 31, 2016
|
|
December 31, 2015
|
|
Initial
Forecast
|
|
December 31, 2016
|
|
December 31, 2015
|
|
Initial
Forecast
|
|||||||
2008
|
|
70.5
|
%
|
|
70.4
|
%
|
|
70.3
|
%
|
|
69.7
|
%
|
|
0.1
|
%
|
|
0.2
|
%
|
|
0.8
|
%
|
2009
|
|
79.5
|
%
|
|
79.4
|
%
|
|
79.4
|
%
|
|
71.9
|
%
|
|
0.1
|
%
|
|
0.1
|
%
|
|
7.6
|
%
|
2010
|
|
77.6
|
%
|
|
77.6
|
%
|
|
77.4
|
%
|
|
73.6
|
%
|
|
0.0
|
%
|
|
0.2
|
%
|
|
4.0
|
%
|
2011
|
|
74.7
|
%
|
|
74.7
|
%
|
|
74.2
|
%
|
|
72.5
|
%
|
|
0.0
|
%
|
|
0.5
|
%
|
|
2.2
|
%
|
2012
|
|
73.8
|
%
|
|
73.7
|
%
|
|
73.2
|
%
|
|
71.4
|
%
|
|
0.1
|
%
|
|
0.6
|
%
|
|
2.4
|
%
|
2013
|
|
73.5
|
%
|
|
73.4
|
%
|
|
73.4
|
%
|
|
72.0
|
%
|
|
0.1
|
%
|
|
0.1
|
%
|
|
1.5
|
%
|
2014
|
|
71.7
|
%
|
|
71.8
|
%
|
|
72.6
|
%
|
|
71.8
|
%
|
|
-0.1
|
%
|
|
-0.9
|
%
|
|
-0.1
|
%
|
2015
|
|
65.5
|
%
|
|
66.1
|
%
|
|
67.8
|
%
|
|
67.7
|
%
|
|
-0.6
|
%
|
|
-2.3
|
%
|
|
-2.2
|
%
|
2016
|
|
64.8
|
%
|
|
65.1
|
%
|
|
—
|
|
|
65.4
|
%
|
|
-0.3
|
%
|
|
—
|
|
|
-0.6
|
%
|
2017
|
|
65.6
|
%
|
|
—
|
|
|
—
|
|
|
64.0
|
%
|
|
—
|
|
|
—
|
|
|
1.6
|
%
|
(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.
|
|
|
Average
|
||||||||
Consumer Loan Assignment Year
|
|
Consumer Loan (1)
|
|
Advance (2)
|
|
Average Initial Term (in months)
|
||||
2008
|
|
$
|
14,518
|
|
|
$
|
6,479
|
|
|
42
|
2009
|
|
12,689
|
|
|
5,565
|
|
|
38
|
||
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
|
(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.
|
|
|
As of December 31, 2017
|
||||||||||
Consumer Loan Assignment Year
|
|
Forecasted
Collection %
|
|
Advance % (1)
|
|
Spread %
|
|
% of Forecast
Realized (2)
|
||||
2008
|
|
70.5
|
%
|
|
44.6
|
%
|
|
25.9
|
%
|
|
99.8
|
%
|
2009
|
|
79.5
|
%
|
|
43.9
|
%
|
|
35.6
|
%
|
|
99.8
|
%
|
2010
|
|
77.6
|
%
|
|
44.7
|
%
|
|
32.9
|
%
|
|
99.5
|
%
|
2011
|
|
74.7
|
%
|
|
45.5
|
%
|
|
29.2
|
%
|
|
98.9
|
%
|
2012
|
|
73.8
|
%
|
|
46.3
|
%
|
|
27.5
|
%
|
|
98.2
|
%
|
2013
|
|
73.5
|
%
|
|
47.6
|
%
|
|
25.9
|
%
|
|
96.0
|
%
|
2014
|
|
71.7
|
%
|
|
47.7
|
%
|
|
24.0
|
%
|
|
88.9
|
%
|
2015
|
|
65.5
|
%
|
|
44.5
|
%
|
|
21.0
|
%
|
|
72.7
|
%
|
2016
|
|
64.8
|
%
|
|
43.8
|
%
|
|
21.0
|
%
|
|
47.5
|
%
|
2017
|
|
65.6
|
%
|
|
43.2
|
%
|
|
22.4
|
%
|
|
15.3
|
%
|
(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 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.
|
|
|
Dealer Loans
|
|
Purchased Loans
|
||||||||||||||
|
|
Forecasted Collection Percentage as of (1)
|
|
|
|
Forecasted Collection Percentage as of (1)
|
|
|
||||||||||
Consumer Loan Assignment Year
|
|
December 31, 2017
|
|
Initial
Forecast |
|
Variance
|
|
December 31, 2017
|
|
Initial
Forecast |
|
Variance
|
||||||
2008
|
|
70.8
|
%
|
|
70.2
|
%
|
|
0.6
|
%
|
|
69.8
|
%
|
|
68.8
|
%
|
|
1.0
|
%
|
2009
|
|
79.2
|
%
|
|
72.1
|
%
|
|
7.1
|
%
|
|
80.8
|
%
|
|
70.5
|
%
|
|
10.3
|
%
|
2010
|
|
77.5
|
%
|
|
73.6
|
%
|
|
3.9
|
%
|
|
78.7
|
%
|
|
73.1
|
%
|
|
5.6
|
%
|
2011
|
|
74.6
|
%
|
|
72.4
|
%
|
|
2.2
|
%
|
|
76.3
|
%
|
|
72.7
|
%
|
|
3.6
|
%
|
2012
|
|
73.6
|
%
|
|
71.3
|
%
|
|
2.3
|
%
|
|
75.9
|
%
|
|
71.4
|
%
|
|
4.5
|
%
|
2013
|
|
73.4
|
%
|
|
72.1
|
%
|
|
1.3
|
%
|
|
74.3
|
%
|
|
71.6
|
%
|
|
2.7
|
%
|
2014
|
|
71.6
|
%
|
|
71.9
|
%
|
|
-0.3
|
%
|
|
72.7
|
%
|
|
70.9
|
%
|
|
1.8
|
%
|
2015
|
|
64.8
|
%
|
|
67.5
|
%
|
|
-2.7
|
%
|
|
69.8
|
%
|
|
68.5
|
%
|
|
1.3
|
%
|
2016
|
|
63.9
|
%
|
|
65.1
|
%
|
|
-1.2
|
%
|
|
67.5
|
%
|
|
66.5
|
%
|
|
1.0
|
%
|
2017
|
|
65.0
|
%
|
|
63.8
|
%
|
|
1.2
|
%
|
|
67.1
|
%
|
|
64.6
|
%
|
|
2.5
|
%
|
(1)
|
The forecasted collection rates presented for Dealer Loans and Purchased Loans reflect the Consumer Loan classification at the time of assignment. Under our Portfolio Program, certain events may result in Dealers forfeiting their rights to Dealer Holdback. We transfer the Dealer’s Consumer Loans from the Dealer Loan portfolio to the Purchased Loan portfolio in the period this forfeiture occurs. During 2017, we changed the presentation of current forecasted collection rates for each Consumer Loan assignment year to exclude the impact of transfers. Prior to 2017, the presentation of current forecasted collection rates for each Consumer Loan assignment year reflected the current Consumer Loan classification.
|
|
|
Dealer Loans
|
|
Purchased Loans
|
||||||||||||||
Consumer Loan Assignment Year
|
|
Forecasted Collection % (1)
|
|
Advance % (1)(2)
|
|
Spread %
|
|
Forecasted Collection % (1)
|
|
Advance % (1)(2)
|
|
Spread %
|
||||||
2008
|
|
70.8
|
%
|
|
43.3
|
%
|
|
27.5
|
%
|
|
69.8
|
%
|
|
47.1
|
%
|
|
22.7
|
%
|
2009
|
|
79.2
|
%
|
|
43.4
|
%
|
|
35.8
|
%
|
|
80.8
|
%
|
|
46.0
|
%
|
|
34.8
|
%
|
2010
|
|
77.5
|
%
|
|
44.4
|
%
|
|
33.1
|
%
|
|
78.7
|
%
|
|
47.3
|
%
|
|
31.4
|
%
|
2011
|
|
74.6
|
%
|
|
45.1
|
%
|
|
29.5
|
%
|
|
76.3
|
%
|
|
49.3
|
%
|
|
27.0
|
%
|
2012
|
|
73.6
|
%
|
|
46.0
|
%
|
|
27.6
|
%
|
|
75.9
|
%
|
|
50.0
|
%
|
|
25.9
|
%
|
2013
|
|
73.4
|
%
|
|
47.2
|
%
|
|
26.2
|
%
|
|
74.3
|
%
|
|
51.5
|
%
|
|
22.8
|
%
|
2014
|
|
71.6
|
%
|
|
47.2
|
%
|
|
24.4
|
%
|
|
72.7
|
%
|
|
51.8
|
%
|
|
20.9
|
%
|
2015
|
|
64.8
|
%
|
|
43.4
|
%
|
|
21.4
|
%
|
|
69.8
|
%
|
|
50.2
|
%
|
|
19.6
|
%
|
2016
|
|
63.9
|
%
|
|
42.1
|
%
|
|
21.8
|
%
|
|
67.5
|
%
|
|
48.6
|
%
|
|
18.9
|
%
|
2017
|
|
65.0
|
%
|
|
42.1
|
%
|
|
22.9
|
%
|
|
67.1
|
%
|
|
45.8
|
%
|
|
21.3
|
%
|
(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. Under our Portfolio Program, certain events may result in Dealers forfeiting their rights to Dealer Holdback. We transfer the Dealer’s Consumer Loans from the Dealer Loan portfolio to the Purchased Loan portfolio in the period this forfeiture occurs. During 2017, we changed the presentation of forecasted collection rates and advance rates for each Consumer Loan assignment year to exclude the impact of transfers. Prior to 2017, the presentation of forecasted collection rates and advance rates for each Consumer Loan assignment year reflected the current Consumer Loan classification.
|
(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
|
||||
For the Year Ended December 31,
|
|
Unit Volume
|
|
Dollar Volume (1)
|
||
2015
|
|
33.2
|
%
|
|
29.3
|
%
|
2016
|
|
10.9
|
%
|
|
21.6
|
%
|
2017
|
|
-0.7
|
%
|
|
9.0
|
%
|
(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 Years Ended December 31,
|
|
For the Years Ended December 31,
|
||||||||||||||
|
2017
|
|
2016
|
|
% Change
|
|
2016
|
|
2015
|
|
% Change
|
||||||
Consumer Loan unit volume
|
328,507
|
|
|
330,710
|
|
|
-0.7
|
%
|
|
330,710
|
|
|
298,288
|
|
|
10.9
|
%
|
Active Dealers (1)
|
11,551
|
|
|
10,536
|
|
|
9.6
|
%
|
|
10,536
|
|
|
9,064
|
|
|
16.2
|
%
|
Average volume per active Dealer
|
28.4
|
|
|
31.4
|
|
|
-9.6
|
%
|
|
31.4
|
|
|
32.9
|
|
|
-4.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Consumer Loan unit volume from Dealers active both periods
|
278,497
|
|
|
295,444
|
|
|
-5.7
|
%
|
|
282,129
|
|
|
273,839
|
|
|
3.0
|
%
|
Dealers active both periods
|
7,524
|
|
|
7,524
|
|
|
—
|
|
|
6,925
|
|
|
6,925
|
|
|
—
|
|
Average volume per Dealer active both periods
|
37.0
|
|
|
39.3
|
|
|
-5.7
|
%
|
|
40.7
|
|
|
39.5
|
|
|
3.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Consumer Loan unit volume from Dealers
not
active both periods
|
50,010
|
|
|
35,266
|
|
|
41.8
|
%
|
|
48,581
|
|
|
24,449
|
|
|
98.7
|
%
|
Dealers
not
active both periods
|
4,027
|
|
|
3,012
|
|
|
33.7
|
%
|
|
3,611
|
|
|
2,139
|
|
|
68.8
|
%
|
Average volume per Dealer
not
active both periods
|
12.4
|
|
|
11.7
|
|
|
6.0
|
%
|
|
13.5
|
|
|
11.4
|
|
|
18.4
|
%
|
(1)
|
Active Dealers are Dealers who have received funding for at least one Consumer Loan during the period.
|
|
For the Years Ended December 31,
|
|
For the Years Ended December 31,
|
||||||||||||||
|
2017
|
|
2016
|
|
% Change
|
|
2016
|
|
2015
|
|
% Change
|
||||||
Consumer Loan unit volume from new Dealers
|
46,985
|
|
|
46,232
|
|
|
1.6
|
%
|
|
46,232
|
|
|
52,577
|
|
|
-12.1
|
%
|
New active Dealers (1)
|
3,740
|
|
|
3,406
|
|
|
9.8
|
%
|
|
3,406
|
|
|
3,404
|
|
|
0.1
|
%
|
Average volume per new active Dealer
|
12.6
|
|
|
13.6
|
|
|
-7.4
|
%
|
|
13.6
|
|
|
15.4
|
|
|
-11.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Attrition (2)
|
-10.7
|
%
|
|
-8.2
|
%
|
|
|
|
-8.2
|
%
|
|
-6.9
|
%
|
|
|
(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)
|
||||||||
For the Years Ended December 31,
|
|
Portfolio Program
|
|
Purchase Program
|
|
Portfolio Program
|
|
Purchase Program
|
||||
2015
|
|
87.4
|
%
|
|
12.6
|
%
|
|
82.8
|
%
|
|
17.2
|
%
|
2016
|
|
78.6
|
%
|
|
21.4
|
%
|
|
71.4
|
%
|
|
28.6
|
%
|
2017
|
|
72.5
|
%
|
|
27.5
|
%
|
|
68.5
|
%
|
|
31.5
|
%
|
(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 Years Ended December 31,
|
|||||||||||||
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|||||||
Revenue:
|
|
|
|
|
|
|
|
|||||||
Finance charges
|
$
|
1,011.5
|
|
|
$
|
874.3
|
|
|
$
|
137.2
|
|
|
15.7
|
%
|
Premiums earned
|
41.1
|
|
|
43.0
|
|
|
(1.9
|
)
|
|
-4.4
|
%
|
|||
Other income
|
57.4
|
|
|
51.9
|
|
|
5.5
|
|
|
10.6
|
%
|
|||
Total revenue
|
1,110.0
|
|
|
969.2
|
|
|
140.8
|
|
|
14.5
|
%
|
|||
Costs and expenses:
|
|
|
|
|
|
|
|
|||||||
Salaries and wages (1)
|
140.1
|
|
|
126.5
|
|
|
13.6
|
|
|
10.8
|
%
|
|||
General and administrative (1)
|
55.5
|
|
|
48.2
|
|
|
7.3
|
|
|
15.1
|
%
|
|||
Sales and marketing (1)
|
58.4
|
|
|
49.4
|
|
|
9.0
|
|
|
18.2
|
%
|
|||
Provision for credit losses
|
129.3
|
|
|
90.2
|
|
|
39.1
|
|
|
43.3
|
%
|
|||
Interest
|
120.2
|
|
|
97.7
|
|
|
22.5
|
|
|
23.0
|
%
|
|||
Provision for claims
|
22.7
|
|
|
26.0
|
|
|
(3.3
|
)
|
|
-12.7
|
%
|
|||
Total costs and expenses
|
526.2
|
|
|
438.0
|
|
|
88.2
|
|
|
20.1
|
%
|
|||
Income before provision for income taxes
|
583.8
|
|
|
531.2
|
|
|
52.6
|
|
|
9.9
|
%
|
|||
Provision for income taxes
|
113.6
|
|
|
198.4
|
|
|
(84.8
|
)
|
|
-42.7
|
%
|
|||
Net income
|
$
|
470.2
|
|
|
$
|
332.8
|
|
|
$
|
137.4
|
|
|
41.3
|
%
|
Net income per share:
|
|
|
|
|
|
|
|
|||||||
Basic
|
$
|
24.12
|
|
|
$
|
16.37
|
|
|
$
|
7.75
|
|
|
47.3
|
%
|
Diluted
|
$
|
24.04
|
|
|
$
|
16.31
|
|
|
$
|
7.73
|
|
|
47.4
|
%
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|||||||
Basic
|
19,497,719
|
|
|
20,331,769
|
|
|
(834,050
|
)
|
|
-4.1
|
%
|
|||
Diluted
|
19,558,936
|
|
|
20,410,116
|
|
|
(851,180
|
)
|
|
-4.2
|
%
|
|||
|
|
|
|
|
|
|
|
|||||||
(1) Operating expenses
|
$
|
254.0
|
|
|
$
|
224.1
|
|
|
$
|
29.9
|
|
|
13.3
|
%
|
(Dollars in millions)
|
For the Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
Change
|
||||||
Average net Loans receivable balance
|
$
|
4,276.4
|
|
|
$
|
3,534.0
|
|
|
$
|
742.4
|
|
Average yield on our Loan portfolio
|
23.7
|
%
|
|
24.7
|
%
|
|
-1.0
|
%
|
(In millions)
Impact on finance charges:
|
For the Year Ended December 31, 2017
|
||
Due to an increase in the average net Loans receivable balance
|
$
|
183.7
|
|
Due to a decrease in the average yield
|
(46.5
|
)
|
|
Total increase in finance charges
|
$
|
137.2
|
|
•
|
An increase in salaries and wages expense of
$13.6 million
, or
10.8%
, comprised of the following:
|
•
|
An increase of $7.9 million in stock-based compensation expense primarily due to 2017 stock awards.
|
•
|
A decrease of $4.8 million in cash-based incentive compensation expense primarily due to a decline in Company performance measures.
|
•
|
Excluding the changes in stock-based and cash-based incentive compensation expenses, salaries and wages expense increased $10.5 million primarily related to an increase of $6.2 million for our servicing function and $3.9 million for our support function as a result of an increase in the number of team members.
|
•
|
An increase in sales and marketing expense of
$9.0 million
, or
18.2%
, primarily due to an increase in the size of our sales force.
|
•
|
An increase in general and administrative expense of
$7.3 million
, or
15.1%
, primarily as a result of an increase in legal fees.
|
(Dollars in millions)
|
For the Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
Change
|
||||||
Interest expense
|
$
|
120.2
|
|
|
$
|
97.7
|
|
|
$
|
22.5
|
|
Average outstanding debt principal balance (1)
|
2,944.8
|
|
|
2,459.5
|
|
|
485.3
|
|
|||
Average cost of debt
|
4.1
|
%
|
|
4.0
|
%
|
|
0.1
|
%
|
(Dollars in millions, except per share data)
|
For the Years Ended December 31,
|
|||||||||||||
|
2016
|
|
2015
|
|
$ Change
|
|
% Change
|
|||||||
Revenue:
|
|
|
|
|
|
|
|
|||||||
Finance charges
|
$
|
874.3
|
|
|
$
|
730.5
|
|
|
$
|
143.8
|
|
|
19.7
|
%
|
Premiums earned
|
43.0
|
|
|
48.2
|
|
|
(5.2
|
)
|
|
-10.8
|
%
|
|||
Other income
|
51.9
|
|
|
46.6
|
|
|
5.3
|
|
|
11.4
|
%
|
|||
Total revenue
|
969.2
|
|
|
825.3
|
|
|
143.9
|
|
|
17.4
|
%
|
|||
Costs and expenses:
|
|
|
|
|
|
|
|
|||||||
Salaries and wages (1)
|
126.5
|
|
|
116.4
|
|
|
10.1
|
|
|
8.7
|
%
|
|||
General and administrative (1)
|
48.2
|
|
|
37.8
|
|
|
10.4
|
|
|
27.5
|
%
|
|||
Sales and marketing (1)
|
49.4
|
|
|
45.9
|
|
|
3.5
|
|
|
7.6
|
%
|
|||
Provision for credit losses
|
90.2
|
|
|
41.5
|
|
|
48.7
|
|
|
117.3
|
%
|
|||
Interest
|
97.7
|
|
|
76.0
|
|
|
21.7
|
|
|
28.6
|
%
|
|||
Provision for claims
|
26.0
|
|
|
33.2
|
|
|
(7.2
|
)
|
|
-21.7
|
%
|
|||
Total costs and expenses
|
438.0
|
|
|
350.8
|
|
|
87.2
|
|
|
24.9
|
%
|
|||
Income before provision for income taxes
|
531.2
|
|
|
474.5
|
|
|
56.7
|
|
|
11.9
|
%
|
|||
Provision for income taxes
|
198.4
|
|
|
174.8
|
|
|
23.6
|
|
|
13.5
|
%
|
|||
Net income
|
$
|
332.8
|
|
|
$
|
299.7
|
|
|
$
|
33.1
|
|
|
11.0
|
%
|
Net income per share:
|
|
|
|
|
|
|
|
|||||||
Basic
|
$
|
16.37
|
|
|
$
|
14.35
|
|
|
$
|
2.02
|
|
|
14.1
|
%
|
Diluted
|
$
|
16.31
|
|
|
$
|
14.28
|
|
|
$
|
2.03
|
|
|
14.2
|
%
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|||||||
Basic
|
20,331,769
|
|
|
20,891,695
|
|
|
(559,926
|
)
|
|
-2.7
|
%
|
|||
Diluted
|
20,410,116
|
|
|
20,980,753
|
|
|
(570,637
|
)
|
|
-2.7
|
%
|
|||
|
|
|
|
|
|
|
|
|||||||
(1) Operating expenses
|
$
|
224.1
|
|
|
$
|
200.1
|
|
|
$
|
24.0
|
|
|
12.0
|
%
|
(Dollars in millions)
|
For the Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
Change
|
||||||
Average net Loans receivable balance
|
$
|
3,534.0
|
|
|
$
|
2,829.9
|
|
|
$
|
704.1
|
|
Average yield on our Loan portfolio
|
24.7
|
%
|
|
25.8
|
%
|
|
-1.1
|
%
|
(In millions)
Impact on finance charges:
|
For the Year Ended December 31, 2016
|
||
Due to an increase in the average net Loans receivable balance
|
$
|
181.8
|
|
Due to a decrease in the average yield
|
(38.0
|
)
|
|
Total increase in finance charges
|
$
|
143.8
|
|
•
|
An increase in general and administrative expense of $10.4 million, or 27.5%, primarily as a result of increases in legal fees and information technology expenses.
|
•
|
An increase in salaries and wages expense of $10.1 million, or 8.7%, comprised of the following:
|
•
|
An increase of $15.1 million in salaries and wages expense, excluding stock-based compensation expense, primarily related to an increase in the number of team members, including increases of $8.3 million for our support function, $4.6 million for our servicing function and $2.2 million for our originations function.
|
•
|
A decrease of $5.0 million in stock-based compensation expense primarily due to declining expense recognition related to long-term stock awards granted in prior years and amounts recorded in the prior year related to a change in the expected vesting period of performance-based stock awards.
|
(Dollars in millions)
|
For the Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
Change
|
||||||
Interest expense
|
$
|
97.7
|
|
|
$
|
76.0
|
|
|
$
|
21.7
|
|
Average outstanding debt principal balance (1)
|
2,459.5
|
|
|
1,964.4
|
|
|
495.1
|
|
|||
Average cost of debt
|
4.0
|
%
|
|
3.9
|
%
|
|
0.1
|
%
|
(In millions)
|
Payments Due by Period
|
||||||||||||||||||||||
|
Total
|
|
Less than
1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
More than
5 Years
|
|
Other
|
||||||||||||
Long-term debt, including current maturities (1)
|
$
|
3,093.0
|
|
|
$
|
800.1
|
|
|
$
|
1,719.5
|
|
|
$
|
323.4
|
|
|
$
|
250.0
|
|
|
$
|
—
|
|
Dealer Holdback (2)
|
805.1
|
|
|
136.2
|
|
|
246.4
|
|
|
254.7
|
|
|
167.8
|
|
|
—
|
|
||||||
Operating lease obligations
|
6.6
|
|
|
1.7
|
|
|
3.1
|
|
|
1.8
|
|
|
—
|
|
|
—
|
|
||||||
Purchase obligations (3)
|
4.2
|
|
|
1.2
|
|
|
2.4
|
|
|
0.6
|
|
|
—
|
|
|
—
|
|
||||||
Other future obligations (4)
|
31.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31.9
|
|
||||||
Total contractual obligations
|
$
|
3,940.8
|
|
|
$
|
939.2
|
|
|
$
|
1,971.4
|
|
|
$
|
580.5
|
|
|
$
|
417.8
|
|
|
$
|
31.9
|
|
(1)
|
Long-term debt obligations included in the above table consist solely of principal repayments. The amounts are presented on a principal basis to exclude deferred debt issuance costs of $20.9 million and the unamortized debt discount of $1.3 million. We are also obligated to make interest payments at the applicable interest rates, as discussed in Note 8 to the consolidated financial statements contained in Item 8 of this Form 10-K, which is incorporated herein by reference. Based on the actual amounts outstanding under our revolving secured line of credit, our Warehouse facilities, and our senior notes as of
December 31, 2017
, the forecasted amounts outstanding on all other debt and the actual interest rates in effect as of
December 31, 2017
, interest is expected to be approximately $99.5 million during
2018
; $74.0 million during
2019
; and $106.2 million during
2020
and thereafter.
|
(2)
|
We have contractual obligations to pay Dealer Holdback to our Dealers. Payments of Dealer Holdback are contingent upon the receipt of consumer payments and the repayment of advances. The amounts presented represent our forecast as of
December 31, 2017
.
|
(3)
|
Purchase obligations consist primarily of contractual obligations related to our information system and facility needs.
|
(4)
|
Other future obligations included in the above table consist solely of reserves for uncertain tax positions. Payments are contingent upon examination and would occur in the periods in which the uncertain tax positions are settled.
|
•
|
Restricted Cash
|
•
|
Measurement of Credit Losses on Financial Instruments
|
•
|
Leases
|
•
|
Revenue from Contracts with Customers
|
•
|
Improvements to Employee Share-Based Payment Accounting
|
|
Page
|
Report of Independent Registered Public Accounting Firm
|
|
Consolidated Balance Sheets as of December 31, 2017 and 2016
|
|
Consolidated Statements of Income for the years ended December 31, 2017, 2016 and 2015
|
|
Consolidated Statements of Comprehensive Income for the years ended December 31, 2017, 2016 and 2015
|
|
Consolidated Statements of Shareholders' Equity for the years ended December 31, 2017, 2016 and 2015
|
|
Consolidated Statements of Cash Flows for the years ended December 31, 2017, 2016 and 2015
|
|
Notes to Consolidated Financial Statements
|
(Dollars in millions, except per share data)
|
As of December 31,
|
||||||
|
2017
|
|
2016
|
||||
ASSETS:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
8.2
|
|
|
$
|
14.6
|
|
Restricted cash and cash equivalents
|
255.6
|
|
|
224.7
|
|
||
Restricted securities available for sale
|
46.1
|
|
|
45.3
|
|
||
Loans receivable (including $1.4 from affiliates as of December 31, 2016)
|
5,049.0
|
|
|
4,207.0
|
|
||
Allowance for credit losses
|
(429.4
|
)
|
|
(320.4
|
)
|
||
Loans receivable, net
|
4,619.6
|
|
|
3,886.6
|
|
||
Property and equipment, net
|
20.5
|
|
|
18.2
|
|
||
Income taxes receivable
|
2.2
|
|
|
2.3
|
|
||
Other assets
|
33.4
|
|
|
26.3
|
|
||
Total Assets
|
$
|
4,985.6
|
|
|
$
|
4,218.0
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY:
|
|
|
|
||||
Liabilities:
|
|
|
|
||||
Accounts payable and accrued liabilities
|
$
|
151.7
|
|
|
$
|
143.9
|
|
Revolving secured line of credit
|
13.9
|
|
|
—
|
|
||
Secured financing
|
2,514.1
|
|
|
2,062.4
|
|
||
Senior notes
|
542.8
|
|
|
541.3
|
|
||
Deferred income taxes, net
|
187.4
|
|
|
273.1
|
|
||
Income taxes payable
|
39.9
|
|
|
23.6
|
|
||
Total Liabilities
|
3,449.8
|
|
|
3,044.3
|
|
||
Commitments and Contingencies - See Note 16
|
|
|
|
||||
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, 19,310,049 and 19,877,381 shares issued and outstanding as of December 31, 2017 and December 31, 2016, respectively
|
0.2
|
|
|
0.2
|
|
||
Paid-in capital
|
145.5
|
|
|
131.7
|
|
||
Retained earnings
|
1,390.3
|
|
|
1,042.0
|
|
||
Accumulated other comprehensive loss
|
(0.2
|
)
|
|
(0.2
|
)
|
||
Total Shareholders' Equity
|
1,535.8
|
|
|
1,173.7
|
|
||
Total Liabilities and Shareholders' Equity
|
$
|
4,985.6
|
|
|
$
|
4,218.0
|
|
(Dollars in millions, except per share data)
|
For the Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Revenue:
|
|
|
|
||||||||
Finance charges
|
$
|
1,011.5
|
|
|
$
|
874.3
|
|
|
$
|
730.5
|
|
Premiums earned
|
41.1
|
|
|
43.0
|
|
|
48.2
|
|
|||
Other income
|
57.4
|
|
|
51.9
|
|
|
46.6
|
|
|||
Total revenue
|
1,110.0
|
|
|
969.2
|
|
|
825.3
|
|
|||
Costs and expenses:
|
|
|
|
|
|
||||||
Salaries and wages
|
140.1
|
|
|
126.5
|
|
|
116.4
|
|
|||
General and administrative
|
55.5
|
|
|
48.2
|
|
|
37.8
|
|
|||
Sales and marketing
|
58.4
|
|
|
49.4
|
|
|
45.9
|
|
|||
Provision for credit losses
|
129.3
|
|
|
90.2
|
|
|
41.5
|
|
|||
Interest
|
120.2
|
|
|
97.7
|
|
|
76.0
|
|
|||
Provision for claims
|
22.7
|
|
|
26.0
|
|
|
33.2
|
|
|||
Total costs and expenses
|
526.2
|
|
|
438.0
|
|
|
350.8
|
|
|||
Income before provision for income taxes
|
583.8
|
|
|
531.2
|
|
|
474.5
|
|
|||
Provision for income taxes
|
113.6
|
|
|
198.4
|
|
|
174.8
|
|
|||
Net income
|
$
|
470.2
|
|
|
$
|
332.8
|
|
|
$
|
299.7
|
|
Net income per share:
|
|
|
|
|
|
||||||
Basic
|
$
|
24.12
|
|
|
$
|
16.37
|
|
|
$
|
14.35
|
|
Diluted
|
$
|
24.04
|
|
|
$
|
16.31
|
|
|
$
|
14.28
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
||||||
Basic
|
19,497,719
|
|
|
20,331,769
|
|
|
20,891,695
|
|
|||
Diluted
|
19,558,936
|
|
|
20,410,116
|
|
|
20,980,753
|
|
(In millions)
|
For the Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Net income
|
$
|
470.2
|
|
|
$
|
332.8
|
|
|
$
|
299.7
|
|
Other comprehensive loss, net of tax:
|
|
|
|
|
|
||||||
Unrealized loss on securities, net of tax
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|||
Other comprehensive loss
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|||
Comprehensive income
|
$
|
470.2
|
|
|
$
|
332.7
|
|
|
$
|
299.7
|
|
(Dollars in millions)
|
Common Stock
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Number
|
|
Amount
|
|
Paid-In Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Total Shareholders' Equity
|
|||||||||||
Balance, January 1, 2015
|
20,597,671
|
|
|
$
|
0.2
|
|
|
$
|
88.7
|
|
|
$
|
613.4
|
|
|
$
|
(0.1
|
)
|
|
$
|
702.2
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
299.7
|
|
|
—
|
|
|
299.7
|
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
12.4
|
|
|
—
|
|
|
—
|
|
|
12.4
|
|
|||||
Restricted stock awards, net of forfeitures
|
4,024
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Repurchase of common stock
|
(470,071
|
)
|
|
—
|
|
|
(0.6
|
)
|
|
(85.9
|
)
|
|
—
|
|
|
(86.5
|
)
|
|||||
Restricted stock units converted to common stock
|
1,348
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Tax benefits from stock-based compensation plans
|
—
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|||||
Balance, December 31, 2015
|
20,132,972
|
|
|
0.2
|
|
|
100.8
|
|
|
827.2
|
|
|
(0.1
|
)
|
|
928.1
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
332.8
|
|
|
—
|
|
|
332.8
|
|
|||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
7.4
|
|
|
—
|
|
|
—
|
|
|
7.4
|
|
|||||
Restricted stock awards, net of forfeitures
|
6,643
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Repurchase of common stock
|
(666,330
|
)
|
|
—
|
|
|
(3.7
|
)
|
|
(118.0
|
)
|
|
—
|
|
|
(121.7
|
)
|
|||||
Restricted stock units converted to common stock
|
404,096
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Tax benefits from stock-based compensation plans
|
—
|
|
|
—
|
|
|
27.2
|
|
|
—
|
|
|
—
|
|
|
27.2
|
|
|||||
Balance, December 31, 2016
|
19,877,381
|
|
|
0.2
|
|
|
131.7
|
|
|
1,042.0
|
|
|
(0.2
|
)
|
|
1,173.7
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
470.2
|
|
|
—
|
|
|
470.2
|
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
15.4
|
|
|
—
|
|
|
—
|
|
|
15.4
|
|
|||||
Restricted stock awards, net of forfeitures
|
8,092
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Repurchase of common stock
|
(610,260
|
)
|
|
—
|
|
|
(1.6
|
)
|
|
(121.9
|
)
|
|
—
|
|
|
(123.5
|
)
|
|||||
Restricted stock units converted to common stock
|
34,836
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Balance, December 31, 2017
|
19,310,049
|
|
|
$
|
0.2
|
|
|
$
|
145.5
|
|
|
$
|
1,390.3
|
|
|
$
|
(0.2
|
)
|
|
$
|
1,535.8
|
|
(In millions)
|
For the Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Cash Flows From Operating Activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
470.2
|
|
|
$
|
332.8
|
|
|
$
|
299.7
|
|
Adjustments to reconcile cash provided by operating activities:
|
|
|
|
|
|
||||||
Provision for credit losses
|
129.3
|
|
|
90.2
|
|
|
41.5
|
|
|||
Depreciation
|
6.0
|
|
|
6.1
|
|
|
5.7
|
|
|||
Amortization
|
10.4
|
|
|
9.2
|
|
|
8.5
|
|
|||
Loss on retirement of property and equipment
|
0.1
|
|
|
0.1
|
|
|
0.3
|
|
|||
Provision (credit) for deferred income taxes
|
(85.6
|
)
|
|
24.2
|
|
|
35.6
|
|
|||
Stock-based compensation
|
15.4
|
|
|
7.4
|
|
|
12.4
|
|
|||
Change in operating assets and liabilities:
|
|
|
|
|
|
||||||
Increase in accounts payable and accrued liabilities
|
10.3
|
|
|
11.8
|
|
|
13.0
|
|
|||
Decrease (increase) in income taxes receivable
|
0.1
|
|
|
7.7
|
|
|
(8.6
|
)
|
|||
Increase (decrease) in income taxes payable
|
16.3
|
|
|
23.6
|
|
|
(2.9
|
)
|
|||
Increase in other assets
|
(6.5
|
)
|
|
(5.9
|
)
|
|
(1.0
|
)
|
|||
Net cash provided by operating activities
|
566.0
|
|
|
507.2
|
|
|
404.2
|
|
|||
Cash Flows From Investing Activities:
|
|
|
|
|
|
||||||
Increase in restricted cash and cash equivalents
|
(30.9
|
)
|
|
(57.3
|
)
|
|
(9.8
|
)
|
|||
Purchases of restricted securities available for sale
|
(34.5
|
)
|
|
(39.1
|
)
|
|
(34.1
|
)
|
|||
Proceeds from sale of restricted securities available for sale
|
27.8
|
|
|
35.9
|
|
|
34.4
|
|
|||
Maturities of restricted securities available for sale
|
5.6
|
|
|
5.8
|
|
|
4.1
|
|
|||
Principal collected on Loans receivable
|
2,189.5
|
|
|
1,955.8
|
|
|
1,739.6
|
|
|||
Advances to Dealers
|
(1,968.3
|
)
|
|
(1,881.3
|
)
|
|
(1,795.1
|
)
|
|||
Purchases of Consumer Loans
|
(904.8
|
)
|
|
(754.2
|
)
|
|
(371.9
|
)
|
|||
Accelerated payments of Dealer Holdback
|
(47.1
|
)
|
|
(53.6
|
)
|
|
(52.6
|
)
|
|||
Payments of Dealer Holdback
|
(131.6
|
)
|
|
(142.0
|
)
|
|
(150.1
|
)
|
|||
Purchases of property and equipment
|
(8.4
|
)
|
|
(5.5
|
)
|
|
(4.0
|
)
|
|||
Net cash used in investing activities
|
(902.7
|
)
|
|
(935.5
|
)
|
|
(639.5
|
)
|
|||
Cash Flows From Financing Activities:
|
|
|
|
|
|
||||||
Borrowings under revolving secured line of credit
|
3,527.1
|
|
|
1,615.4
|
|
|
1,657.0
|
|
|||
Repayments under revolving secured line of credit
|
(3,513.2
|
)
|
|
(1,673.1
|
)
|
|
(1,718.8
|
)
|
|||
Proceeds from secured financing
|
2,364.5
|
|
|
2,169.3
|
|
|
1,247.0
|
|
|||
Repayments of secured financing
|
(1,907.5
|
)
|
|
(1,575.8
|
)
|
|
(1,101.4
|
)
|
|||
Proceeds from issuance of senior notes
|
—
|
|
|
—
|
|
|
248.2
|
|
|||
Payments of debt issuance costs and debt extinguishment costs
|
(14.6
|
)
|
|
(9.0
|
)
|
|
(11.0
|
)
|
|||
Repurchase of common stock
|
(123.5
|
)
|
|
(121.7
|
)
|
|
(86.5
|
)
|
|||
Excess tax benefits from stock-based compensation plans
|
—
|
|
|
27.2
|
|
|
0.3
|
|
|||
Other financing activities
|
(2.5
|
)
|
|
4.3
|
|
|
0.4
|
|
|||
Net cash provided by financing activities
|
330.3
|
|
|
436.6
|
|
|
235.2
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
(6.4
|
)
|
|
8.3
|
|
|
(0.1
|
)
|
|||
Cash and cash equivalents, beginning of period
|
14.6
|
|
|
6.3
|
|
|
6.4
|
|
|||
Cash and cash equivalents, end of period
|
$
|
8.2
|
|
|
$
|
14.6
|
|
|
$
|
6.3
|
|
Supplemental Disclosure of Cash Flow Information:
|
|
|
|
|
|
||||||
Cash paid during the period for interest
|
$
|
108.8
|
|
|
$
|
88.0
|
|
|
$
|
61.8
|
|
Cash paid during the period for income taxes
|
$
|
175.0
|
|
|
$
|
111.2
|
|
|
$
|
146.9
|
|
|
|
For the Years Ended December 31,
|
|||||||
Consumer Loan Assignment Volume
|
|
2017
|
|
2016
|
|
2015
|
|||
Percentage of total unit volume with either FICO
®
scores below 650 or no FICO
®
scores
|
|
95.6
|
%
|
|
95.8
|
%
|
|
96.1
|
%
|
|
|
Unit Volume
|
|
Dollar Volume (1)
|
||||||||
For the Years Ended December 31,
|
|
Dealer Loans
|
|
Purchased Loans
|
|
Dealer Loans
|
|
Purchased Loans
|
||||
2015
|
|
87.4
|
%
|
|
12.6
|
%
|
|
82.8
|
%
|
|
17.2
|
%
|
2016
|
|
78.6
|
%
|
|
21.4
|
%
|
|
71.4
|
%
|
|
28.6
|
%
|
2017
|
|
72.5
|
%
|
|
27.5
|
%
|
|
68.5
|
%
|
|
31.5
|
%
|
(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 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.
|
•
|
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.
|
•
|
transfer the related Dealer Loan allowance for credit losses balance to Purchased Loans in the period this forfeiture occurs; and
|
•
|
aggregate these Purchased Loans by Dealer for purposes of recognizing revenue and evaluating impairment.
|
•
|
reversed the Dealer Loan allowance for credit losses balance through Dealer Loan provision for credit losses and established a new allowance for credit losses in Purchased Loans through Purchased Loan provision for credit losses; and
|
•
|
aggregated these Purchased Loans by month of purchase for purposes of recognizing revenue and evaluating impairment.
|
•
|
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 premium 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.
|
(In millions)
|
For the Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Ancillary product profit sharing
|
$
|
23.9
|
|
|
$
|
15.5
|
|
|
$
|
11.9
|
|
GPS-SID fees
|
11.1
|
|
|
13.5
|
|
|
16.4
|
|
|||
Remarketing fees
|
10.9
|
|
|
9.2
|
|
|
6.9
|
|
|||
Dealer support products and services
|
4.8
|
|
|
4.7
|
|
|
4.9
|
|
|||
Dealer enrollment fees
|
3.9
|
|
|
5.0
|
|
|
4.8
|
|
|||
Other
|
2.8
|
|
|
4.0
|
|
|
1.7
|
|
|||
Total
|
$
|
57.4
|
|
|
$
|
51.9
|
|
|
$
|
46.6
|
|
(In millions)
|
As of December 31,
|
||||||||||||||
|
2017
|
|
2016
|
||||||||||||
|
Carrying
Amount
|
|
Estimated
Fair Value
|
|
Carrying
Amount
|
|
Estimated
Fair Value
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
8.2
|
|
|
$
|
8.2
|
|
|
$
|
14.6
|
|
|
$
|
14.6
|
|
Restricted cash and cash equivalents
|
255.6
|
|
|
255.6
|
|
|
224.7
|
|
|
224.7
|
|
||||
Restricted securities available for sale
|
46.1
|
|
|
46.1
|
|
|
45.3
|
|
|
45.3
|
|
||||
Loans receivable, net
|
4,619.6
|
|
|
4,741.5
|
|
|
3,886.6
|
|
|
3,955.9
|
|
||||
Liabilities
|
|
|
|
|
|
|
|
||||||||
Revolving secured line of credit
|
$
|
13.9
|
|
|
$
|
13.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Secured financing
|
2,514.1
|
|
|
2,527.6
|
|
|
2,062.4
|
|
|
2,072.0
|
|
||||
Senior notes
|
542.8
|
|
|
569.4
|
|
|
541.3
|
|
|
560.5
|
|
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 December 31, 2017
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total Fair Value
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents (1)
|
$
|
8.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8.2
|
|
Restricted cash and cash equivalents (1)
|
255.6
|
|
|
—
|
|
|
—
|
|
|
255.6
|
|
||||
Restricted securities available for sale (2)
|
37.1
|
|
|
9.0
|
|
|
—
|
|
|
46.1
|
|
||||
Loans receivable, net (1)
|
—
|
|
|
—
|
|
|
4,741.5
|
|
|
4,741.5
|
|
||||
Liabilities
|
|
|
|
|
|
|
|
||||||||
Revolving secured line of credit (1)
|
$
|
13.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
13.9
|
|
Secured financing (1)
|
—
|
|
|
2,527.6
|
|
|
—
|
|
|
2,527.6
|
|
||||
Senior notes (1)
|
569.4
|
|
|
—
|
|
|
—
|
|
|
569.4
|
|
||||
|
|
|
|
|
|
|
|
||||||||
(In millions)
|
As of December 31, 2016
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total Fair Value
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash and cash equivalents (1)
|
$
|
14.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
14.6
|
|
Restricted cash and cash equivalents (1)
|
224.7
|
|
|
—
|
|
|
—
|
|
|
224.7
|
|
||||
Restricted securities available for sale (2)
|
37.1
|
|
|
8.2
|
|
|
—
|
|
|
45.3
|
|
||||
Loans receivable, net (1)
|
—
|
|
|
—
|
|
|
3,955.9
|
|
|
3,955.9
|
|
||||
Liabilities
|
|
|
|
|
|
|
|
||||||||
Revolving secured line of credit (1)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Secured financing (1)
|
—
|
|
|
2,072.0
|
|
|
—
|
|
|
2,072.0
|
|
||||
Senior notes (1)
|
560.5
|
|
|
—
|
|
|
—
|
|
|
560.5
|
|
(1)
|
Measured at amortized cost with fair value disclosed.
|
(2)
|
Measured at fair value on a recurring basis.
|
(In millions)
|
As of December 31, 2017
|
||||||||||||||
|
Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Estimated
Fair Value
|
||||||||
U.S. Government and agency securities
|
$
|
19.2
|
|
|
$
|
—
|
|
|
$
|
(0.2
|
)
|
|
$
|
19.0
|
|
Corporate bonds
|
18.2
|
|
|
—
|
|
|
(0.1
|
)
|
|
18.1
|
|
||||
Asset-backed securities
|
6.6
|
|
|
—
|
|
|
—
|
|
|
6.6
|
|
||||
Mortgage-backed securities
|
2.4
|
|
|
—
|
|
|
—
|
|
|
2.4
|
|
||||
Total restricted securities available for sale
|
$
|
46.4
|
|
|
$
|
—
|
|
|
$
|
(0.3
|
)
|
|
$
|
46.1
|
|
(In millions)
|
As of December 31, 2016
|
||||||||||||||
|
Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Estimated
Fair Value
|
||||||||
U.S. Government and agency securities
|
$
|
20.4
|
|
|
$
|
—
|
|
|
$
|
(0.1
|
)
|
|
$
|
20.3
|
|
Corporate bonds
|
16.9
|
|
|
0.1
|
|
|
(0.2
|
)
|
|
16.8
|
|
||||
Asset-backed securities
|
5.0
|
|
|
—
|
|
|
—
|
|
|
5.0
|
|
||||
Mortgage-backed securities
|
3.2
|
|
|
—
|
|
|
—
|
|
|
3.2
|
|
||||
Total restricted securities available for sale
|
$
|
45.5
|
|
|
$
|
0.1
|
|
|
$
|
(0.3
|
)
|
|
$
|
45.3
|
|
(In millions)
|
Securities Available for Sale with Gross Unrealized Losses as of December 31, 2017
|
||||||||||||||||||||||
|
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
|
||||||||||||
U.S. Government and agency securities
|
$
|
11.0
|
|
|
$
|
(0.1
|
)
|
|
$
|
7.9
|
|
|
$
|
(0.1
|
)
|
|
$
|
18.9
|
|
|
$
|
(0.2
|
)
|
Corporate bonds
|
11.1
|
|
|
(0.1
|
)
|
|
1.9
|
|
|
—
|
|
|
13.0
|
|
|
(0.1
|
)
|
||||||
Asset-backed securities
|
4.9
|
|
|
—
|
|
|
1.0
|
|
|
—
|
|
|
5.9
|
|
|
—
|
|
||||||
Mortgage-backed securities
|
1.2
|
|
|
—
|
|
|
1.2
|
|
|
—
|
|
|
2.4
|
|
|
—
|
|
||||||
Total restricted securities available for sale
|
$
|
28.2
|
|
|
$
|
(0.2
|
)
|
|
$
|
12.0
|
|
|
$
|
(0.1
|
)
|
|
$
|
40.2
|
|
|
$
|
(0.3
|
)
|
(In millions)
|
Securities Available for Sale with Gross Unrealized Losses as of December 31, 2016
|
||||||||||||||||||||||
|
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 |
||||||||||||
U.S. Government and agency securities
|
$
|
16.4
|
|
|
$
|
(0.1
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
16.4
|
|
|
$
|
(0.1
|
)
|
Corporate bonds
|
11.8
|
|
|
(0.2
|
)
|
|
—
|
|
|
—
|
|
|
11.8
|
|
|
(0.2
|
)
|
||||||
Asset-backed securities
|
2.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.8
|
|
|
—
|
|
||||||
Mortgage-backed securities
|
2.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.4
|
|
|
—
|
|
||||||
Total restricted securities available for sale
|
$
|
33.4
|
|
|
$
|
(0.3
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
33.4
|
|
|
$
|
(0.3
|
)
|
(In millions)
|
|
As of December 31,
|
||||||||||||||
|
|
2017
|
|
2016
|
||||||||||||
Contractual Maturity
|
|
Cost
|
|
Estimated Fair Value
|
|
Cost
|
|
Estimated Fair Value
|
||||||||
Within one year
|
|
$
|
2.5
|
|
|
$
|
2.5
|
|
|
$
|
1.6
|
|
|
$
|
1.6
|
|
Over one year to five years
|
|
40.5
|
|
|
40.2
|
|
|
39.3
|
|
|
39.1
|
|
||||
Over five years to ten years
|
|
1.0
|
|
|
1.0
|
|
|
2.2
|
|
|
2.2
|
|
||||
Over ten years
|
|
2.4
|
|
|
2.4
|
|
|
2.4
|
|
|
2.4
|
|
||||
Total restricted securities available for sale
|
|
$
|
46.4
|
|
|
$
|
46.1
|
|
|
$
|
45.5
|
|
|
$
|
45.3
|
|
(In millions)
|
As of December 31, 2017
|
||||||||||
|
Dealer Loans
|
|
Purchased Loans
|
|
Total
|
||||||
Loans receivable
|
$
|
3,518.1
|
|
|
$
|
1,530.9
|
|
|
$
|
5,049.0
|
|
Allowance for credit losses
|
(366.0
|
)
|
|
(63.4
|
)
|
|
(429.4
|
)
|
|||
Loans receivable, net
|
$
|
3,152.1
|
|
|
$
|
1,467.5
|
|
|
$
|
4,619.6
|
|
|
|
|
|
|
|
||||||
(In millions)
|
As of December 31, 2016
|
||||||||||
|
Dealer Loans
|
|
Purchased Loans
|
|
Total
|
||||||
Loans receivable
|
$
|
3,209.0
|
|
|
$
|
998.0
|
|
|
$
|
4,207.0
|
|
Allowance for credit losses
|
(309.3
|
)
|
|
(11.1
|
)
|
|
(320.4
|
)
|
|||
Loans receivable, net
|
$
|
2,899.7
|
|
|
$
|
986.9
|
|
|
$
|
3,886.6
|
|
(In millions)
|
For the Year Ended December 31, 2017
|
||||||||||
|
Dealer Loans
|
|
Purchased Loans
|
|
Total
|
||||||
Balance, beginning of period
|
$
|
3,209.0
|
|
|
$
|
998.0
|
|
|
$
|
4,207.0
|
|
New Consumer Loan assignments (1)
|
1,968.3
|
|
|
904.8
|
|
|
2,873.1
|
|
|||
Principal collected on Loans receivable
|
(1,729.9
|
)
|
|
(459.6
|
)
|
|
(2,189.5
|
)
|
|||
Accelerated Dealer Holdback payments
|
47.1
|
|
|
—
|
|
|
47.1
|
|
|||
Dealer Holdback payments
|
131.6
|
|
|
—
|
|
|
131.6
|
|
|||
Transfers (2)
|
(93.1
|
)
|
|
93.1
|
|
|
—
|
|
|||
Write-offs
|
(16.4
|
)
|
|
(5.7
|
)
|
|
(22.1
|
)
|
|||
Recoveries (3)
|
1.5
|
|
|
0.3
|
|
|
1.8
|
|
|||
Balance, end of period
|
$
|
3,518.1
|
|
|
$
|
1,530.9
|
|
|
$
|
5,049.0
|
|
|
|
|
|
|
|
||||||
(In millions)
|
For the Year Ended December 31, 2016
|
||||||||||
|
Dealer Loans
|
|
Purchased Loans
|
|
Total
|
||||||
Balance, beginning of period
|
$
|
2,823.4
|
|
|
$
|
521.7
|
|
|
$
|
3,345.1
|
|
New Consumer Loan assignments (1)
|
1,881.3
|
|
|
754.2
|
|
|
2,635.5
|
|
|||
Principal collected on Loans receivable
|
(1,668.1
|
)
|
|
(287.7
|
)
|
|
(1,955.8
|
)
|
|||
Accelerated Dealer Holdback payments
|
53.6
|
|
|
—
|
|
|
53.6
|
|
|||
Dealer Holdback payments
|
142.0
|
|
|
—
|
|
|
142.0
|
|
|||
Transfers (2)
|
(10.1
|
)
|
|
10.1
|
|
|
—
|
|
|||
Write-offs
|
(14.4
|
)
|
|
(0.4
|
)
|
|
(14.8
|
)
|
|||
Recoveries (3)
|
1.3
|
|
|
0.1
|
|
|
1.4
|
|
|||
Balance, end of period
|
$
|
3,209.0
|
|
|
$
|
998.0
|
|
|
$
|
4,207.0
|
|
|
|
|
|
|
|
||||||
(In millions)
|
For the Year Ended December 31, 2015
|
||||||||||
|
Dealer Loans
|
|
Purchased Loans
|
|
Total
|
||||||
Balance, beginning of period
|
$
|
2,389.8
|
|
|
$
|
330.0
|
|
|
$
|
2,719.8
|
|
New Consumer Loan assignments (1)
|
1,795.1
|
|
|
371.9
|
|
|
2,167.0
|
|
|||
Principal collected on Loans receivable
|
(1,548.8
|
)
|
|
(190.8
|
)
|
|
(1,739.6
|
)
|
|||
Accelerated Dealer Holdback payments
|
52.6
|
|
|
—
|
|
|
52.6
|
|
|||
Dealer Holdback payments
|
150.1
|
|
|
—
|
|
|
150.1
|
|
|||
Transfers (2)
|
(10.6
|
)
|
|
10.6
|
|
|
—
|
|
|||
Write-offs
|
(6.4
|
)
|
|
(0.2
|
)
|
|
(6.6
|
)
|
|||
Recoveries (3)
|
1.6
|
|
|
0.2
|
|
|
1.8
|
|
|||
Balance, end of period
|
$
|
2,823.4
|
|
|
$
|
521.7
|
|
|
$
|
3,345.1
|
|
(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 to Purchased Loans in the period this forfeiture occurs.
|
(3)
|
Represents collections received on previously written off Loans.
|
(In millions)
|
For the Year Ended December 31, 2017
|
||||||||||
|
Dealer Loans
|
|
Purchased Loans
|
|
Total
|
||||||
Balance, beginning of period
|
$
|
982.6
|
|
|
$
|
348.1
|
|
|
$
|
1,330.7
|
|
New Consumer Loan assignments (1)
|
803.0
|
|
|
377.9
|
|
|
1,180.9
|
|
|||
Accretion (2)
|
(766.6
|
)
|
|
(253.6
|
)
|
|
(1,020.2
|
)
|
|||
Provision for credit losses
|
103.4
|
|
|
25.9
|
|
|
129.3
|
|
|||
Forecast changes
|
(5.6
|
)
|
|
41.7
|
|
|
36.1
|
|
|||
Transfers (3)
|
(28.2
|
)
|
|
36.9
|
|
|
8.7
|
|
|||
Balance, end of period
|
$
|
1,088.6
|
|
|
$
|
576.9
|
|
|
$
|
1,665.5
|
|
|
|
|
|
|
|
||||||
(In millions)
|
For the Year Ended December 31, 2016
|
||||||||||
|
Dealer Loans
|
|
Purchased Loans
|
|
Total
|
||||||
Balance, beginning of period
|
$
|
874.2
|
|
|
$
|
198.6
|
|
|
$
|
1,072.8
|
|
New Consumer Loan assignments (1)
|
782.6
|
|
|
284.7
|
|
|
1,067.3
|
|
|||
Accretion (2)
|
(723.8
|
)
|
|
(159.5
|
)
|
|
(883.3
|
)
|
|||
Provision for credit losses
|
87.3
|
|
|
2.9
|
|
|
90.2
|
|
|||
Forecast changes
|
(35.4
|
)
|
|
15.3
|
|
|
(20.1
|
)
|
|||
Transfers (3)
|
(2.3
|
)
|
|
6.1
|
|
|
3.8
|
|
|||
Balance, end of period
|
$
|
982.6
|
|
|
$
|
348.1
|
|
|
$
|
1,330.7
|
|
|
|
|
|
|
|
||||||
(In millions)
|
For the Year Ended December 31, 2015
|
||||||||||
|
Dealer Loans
|
|
Purchased Loans
|
|
Total
|
||||||
Balance, beginning of period
|
$
|
725.2
|
|
|
$
|
136.5
|
|
|
$
|
861.7
|
|
New Consumer Loan assignments (1)
|
743.7
|
|
|
138.4
|
|
|
882.1
|
|
|||
Accretion (2)
|
(637.2
|
)
|
|
(102.7
|
)
|
|
(739.9
|
)
|
|||
Provision for credit losses
|
41.8
|
|
|
(0.3
|
)
|
|
41.5
|
|
|||
Forecast changes
|
3.6
|
|
|
20.3
|
|
|
23.9
|
|
|||
Transfers (3)
|
(2.9
|
)
|
|
6.4
|
|
|
3.5
|
|
|||
Balance, end of period
|
$
|
874.2
|
|
|
$
|
198.6
|
|
|
$
|
1,072.8
|
|
(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 and related expected future net cash flows to Purchased Loans in the period this forfeiture occurs.
|
(In millions)
|
For the Year Ended December 31, 2017
|
||||||||||
|
Dealer Loans
|
|
Purchased Loans
|
|
Total
|
||||||
Contractual net cash flows at the time of assignment (1)
|
$
|
3,131.6
|
|
|
$
|
1,973.7
|
|
|
$
|
5,105.3
|
|
Expected net cash flows at the time of assignment (2)
|
2,771.3
|
|
|
1,282.7
|
|
|
4,054.0
|
|
|||
Fair value at the time of assignment (3)
|
1,968.3
|
|
|
904.8
|
|
|
2,873.1
|
|
|||
|
|
|
|
|
|
||||||
(In millions)
|
For the Year Ended December 31, 2016
|
||||||||||
|
Dealer Loans
|
|
Purchased Loans
|
|
Total
|
||||||
Contractual net cash flows at the time of assignment (1)
|
$
|
2,997.0
|
|
|
$
|
1,553.2
|
|
|
$
|
4,550.2
|
|
Expected net cash flows at the time of assignment (2)
|
2,663.9
|
|
|
1,038.9
|
|
|
3,702.8
|
|
|||
Fair value at the time of assignment (3)
|
1,881.3
|
|
|
754.2
|
|
|
2,635.5
|
|
|||
|
|
|
|
|
|
||||||
(In millions)
|
For the Year Ended December 31, 2015
|
||||||||||
|
Dealer Loans
|
|
Purchased Loans
|
|
Total
|
||||||
Contractual net cash flows at the time of assignment (1)
|
$
|
2,821.4
|
|
|
$
|
741.1
|
|
|
$
|
3,562.5
|
|
Expected net cash flows at the time of assignment (2)
|
2,538.8
|
|
|
510.3
|
|
|
3,049.1
|
|
|||
Fair value at the time of assignment (3)
|
1,795.1
|
|
|
371.9
|
|
|
2,167.0
|
|
(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
|
|
December 31, 2017
|
|
December 31, 2016
|
|
December 31, 2015
|
|
Initial
Forecast
|
|
December 31, 2016
|
|
December 31, 2015
|
|
Initial
Forecast
|
|||||||
2008
|
|
70.5
|
%
|
|
70.4
|
%
|
|
70.3
|
%
|
|
69.7
|
%
|
|
0.1
|
%
|
|
0.2
|
%
|
|
0.8
|
%
|
2009
|
|
79.5
|
%
|
|
79.4
|
%
|
|
79.4
|
%
|
|
71.9
|
%
|
|
0.1
|
%
|
|
0.1
|
%
|
|
7.6
|
%
|
2010
|
|
77.6
|
%
|
|
77.6
|
%
|
|
77.4
|
%
|
|
73.6
|
%
|
|
0.0
|
%
|
|
0.2
|
%
|
|
4.0
|
%
|
2011
|
|
74.7
|
%
|
|
74.7
|
%
|
|
74.2
|
%
|
|
72.5
|
%
|
|
0.0
|
%
|
|
0.5
|
%
|
|
2.2
|
%
|
2012
|
|
73.8
|
%
|
|
73.7
|
%
|
|
73.2
|
%
|
|
71.4
|
%
|
|
0.1
|
%
|
|
0.6
|
%
|
|
2.4
|
%
|
2013
|
|
73.5
|
%
|
|
73.4
|
%
|
|
73.4
|
%
|
|
72.0
|
%
|
|
0.1
|
%
|
|
0.1
|
%
|
|
1.5
|
%
|
2014
|
|
71.7
|
%
|
|
71.8
|
%
|
|
72.6
|
%
|
|
71.8
|
%
|
|
-0.1
|
%
|
|
-0.9
|
%
|
|
-0.1
|
%
|
2015
|
|
65.5
|
%
|
|
66.1
|
%
|
|
67.8
|
%
|
|
67.7
|
%
|
|
-0.6
|
%
|
|
-2.3
|
%
|
|
-2.2
|
%
|
2016
|
|
64.8
|
%
|
|
65.1
|
%
|
|
—
|
|
|
65.4
|
%
|
|
-0.3
|
%
|
|
—
|
|
|
-0.6
|
%
|
2017
|
|
65.6
|
%
|
|
—
|
|
|
—
|
|
|
64.0
|
%
|
|
—
|
|
|
—
|
|
|
1.6
|
%
|
(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.
|
(In millions)
|
As of December 31, 2017
|
||||||||||||||||||||||
|
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
|
$
|
755.2
|
|
|
$
|
472.7
|
|
|
$
|
1,227.9
|
|
|
$
|
2,762.9
|
|
|
$
|
1,058.2
|
|
|
$
|
3,821.1
|
|
Allowance for credit losses
|
—
|
|
|
—
|
|
|
—
|
|
|
(366.0
|
)
|
|
(63.4
|
)
|
|
(429.4
|
)
|
||||||
Loans receivable, net
|
$
|
755.2
|
|
|
$
|
472.7
|
|
|
$
|
1,227.9
|
|
|
$
|
2,396.9
|
|
|
$
|
994.8
|
|
|
$
|
3,391.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
(In millions)
|
As of December 31, 2016
|
||||||||||||||||||||||
|
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
|
$
|
1,002.2
|
|
|
$
|
705.8
|
|
|
$
|
1,708.0
|
|
|
$
|
2,206.8
|
|
|
$
|
292.2
|
|
|
$
|
2,499.0
|
|
Allowance for credit losses
|
—
|
|
|
—
|
|
|
—
|
|
|
(309.3
|
)
|
|
(11.1
|
)
|
|
(320.4
|
)
|
||||||
Loans receivable, net
|
$
|
1,002.2
|
|
|
$
|
705.8
|
|
|
$
|
1,708.0
|
|
|
$
|
1,897.5
|
|
|
$
|
281.1
|
|
|
$
|
2,178.6
|
|
(In millions)
|
For the Year Ended December 31, 2017
|
||||||||||
|
Dealer Loans
|
|
Purchased Loans
|
|
Total
|
||||||
Balance, beginning of period
|
$
|
309.3
|
|
|
$
|
11.1
|
|
|
$
|
320.4
|
|
Provision for credit losses
|
103.4
|
|
|
25.9
|
|
|
129.3
|
|
|||
Transfers (1)
|
(31.8
|
)
|
|
31.8
|
|
|
—
|
|
|||
Write-offs
|
(16.4
|
)
|
|
(5.7
|
)
|
|
(22.1
|
)
|
|||
Recoveries (2)
|
1.5
|
|
|
0.3
|
|
|
1.8
|
|
|||
Balance, end of period
|
$
|
366.0
|
|
|
$
|
63.4
|
|
|
$
|
429.4
|
|
|
|
|
|
|
|
||||||
(In millions)
|
For the Year Ended December 31, 2016
|
||||||||||
|
Dealer Loans
|
|
Purchased Loans
|
|
Total
|
||||||
Balance, beginning of period
|
$
|
235.1
|
|
|
$
|
8.5
|
|
|
$
|
243.6
|
|
Provision for credit losses
|
87.3
|
|
|
2.9
|
|
|
90.2
|
|
|||
Write-offs
|
(14.4
|
)
|
|
(0.4
|
)
|
|
(14.8
|
)
|
|||
Recoveries (2)
|
1.3
|
|
|
0.1
|
|
|
1.4
|
|
|||
Balance, end of period
|
$
|
309.3
|
|
|
$
|
11.1
|
|
|
$
|
320.4
|
|
|
|
|
|
|
|
||||||
(In millions)
|
For the Year Ended December 31, 2015
|
||||||||||
|
Dealer Loans
|
|
Purchased Loans
|
|
Total
|
||||||
Balance, beginning of period
|
$
|
198.1
|
|
|
$
|
8.8
|
|
|
$
|
206.9
|
|
Provision for credit losses
|
41.8
|
|
|
(0.3
|
)
|
|
41.5
|
|
|||
Write-offs
|
(6.4
|
)
|
|
(0.2
|
)
|
|
(6.6
|
)
|
|||
Recoveries (2)
|
1.6
|
|
|
0.2
|
|
|
1.8
|
|
|||
Balance, end of period
|
$
|
235.1
|
|
|
$
|
8.5
|
|
|
$
|
243.6
|
|
(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 to Purchased Loans in the period this forfeiture occurs. Beginning in the fourth quarter of 2017, we also transfer 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)
|
As of December 31,
|
||||||
|
2017
|
|
2016
|
||||
Land and land improvements
|
$
|
2.5
|
|
|
$
|
2.5
|
|
Building and improvements
|
15.6
|
|
|
14.5
|
|
||
Data processing equipment and software
|
31.3
|
|
|
29.5
|
|
||
Office furniture and equipment
|
3.8
|
|
|
3.9
|
|
||
Leasehold improvements
|
2.2
|
|
|
2.0
|
|
||
Total property and equipment
|
55.4
|
|
|
52.4
|
|
||
Less: Accumulated depreciation on property and equipment
|
(34.9
|
)
|
|
(34.2
|
)
|
||
Total property and equipment, net
|
$
|
20.5
|
|
|
$
|
18.2
|
|
(In millions)
|
For the Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Net assumed written premiums
|
$
|
42.4
|
|
|
$
|
40.6
|
|
|
$
|
45.0
|
|
Net premiums earned
|
41.1
|
|
|
43.0
|
|
|
48.2
|
|
|||
Provision for claims
|
22.7
|
|
|
26.0
|
|
|
33.2
|
|
|||
Amortization of capitalized acquisition costs
|
1.0
|
|
|
1.1
|
|
|
1.2
|
|
(In millions)
|
|
|
|
As of December 31,
|
||||||
|
|
Balance Sheet location
|
|
2017
|
|
2016
|
||||
Trust assets
|
|
Restricted cash and cash equivalents
|
|
$
|
0.8
|
|
|
$
|
0.5
|
|
Trust assets
|
|
Restricted securities available for sale
|
|
46.1
|
|
|
45.3
|
|
||
Unearned premium
|
|
Accounts payable and accrued liabilities
|
|
34.1
|
|
|
32.8
|
|
||
Claims reserve (1)
|
|
Accounts payable and accrued liabilities
|
|
1.0
|
|
|
1.0
|
|
(1)
|
The claims reserve represents our liability for incurred-but-not-reported claims and is estimated based on historical claims experience.
|
(In millions)
|
|
Cumulative Paid Claims
|
||||||||||||||||||
|
|
As of December 31,
|
||||||||||||||||||
Incident Year
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
||||||||||
2013
|
|
$
|
38.9
|
|
|
$
|
40.8
|
|
|
$
|
40.8
|
|
|
$
|
40.8
|
|
|
$
|
40.8
|
|
2014
|
|
|
|
38.3
|
|
|
39.9
|
|
|
39.9
|
|
|
39.9
|
|
||||||
2015
|
|
|
|
|
|
31.9
|
|
|
33.4
|
|
|
33.4
|
|
|||||||
2016
|
|
|
|
|
|
|
|
24.7
|
|
|
26.0
|
|
||||||||
2017
|
|
|
|
|
|
|
|
|
|
21.3
|
|
|||||||||
Total
|
|
$
|
161.4
|
|
Average Annual Percentage Payout of Incurred Claims by Age
|
|||||||||||||||
Claim Age (Years)
|
|
1
|
|
2
|
|
3
|
|
4
|
|
5
|
|||||
Payout Percentage
|
|
95.5
|
%
|
|
4.5
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
(In millions)
|
|
As of December 31, 2017
|
||||||||||||||
|
|
Principal Outstanding
|
|
Unamortized Debt Issuance Costs
|
|
Unamortized Discount
|
|
Carrying
Amount
|
||||||||
Revolving secured line of credit (1)
|
|
$
|
13.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
13.9
|
|
Secured financing (2)
|
|
2,529.1
|
|
|
(15.0
|
)
|
|
—
|
|
|
2,514.1
|
|
||||
Senior notes
|
|
550.0
|
|
|
(5.9
|
)
|
|
(1.3
|
)
|
|
542.8
|
|
||||
Total debt
|
|
$
|
3,093.0
|
|
|
$
|
(20.9
|
)
|
|
$
|
(1.3
|
)
|
|
$
|
3,070.8
|
|
|
|
|
|
|
|
|
|
|
||||||||
(In millions)
|
|
As of December 31, 2016
|
||||||||||||||
|
|
Principal Outstanding
|
|
Unamortized Debt Issuance Costs
|
|
Unamortized Discount
|
|
Carrying
Amount
|
||||||||
Revolving secured line of credit (1)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Secured financing (2)
|
|
2,072.1
|
|
|
(9.7
|
)
|
|
—
|
|
|
2,062.4
|
|
||||
Senior notes
|
|
550.0
|
|
|
(7.1
|
)
|
|
(1.6
|
)
|
|
541.3
|
|
||||
Total debt
|
|
$
|
2,622.1
|
|
|
$
|
(16.8
|
)
|
|
$
|
(1.6
|
)
|
|
$
|
2,603.7
|
|
(1)
|
Excludes deferred debt issuance costs of
$2.8 million
and
$2.4 million
as of
December 31, 2017
and
December 31, 2016
, respectively, which are included in other assets.
|
(2)
|
Warehouse facilities and Term ABS financings.
|
(Dollars in millions)
|
|
|
|
|
|
|
|
|
|
||||
Financings
|
|
Wholly-owned Subsidiary
|
|
Maturity Date
|
|
Financing Amount
|
|
|
Interest Rate as of December 31, 2017
|
||||
Revolving Secured
Line of Credit |
|
n/a
|
|
06/22/20
|
|
|
|
$
|
350.0
|
|
(1)
|
|
At our option, either LIBOR plus 187.5 basis points or the prime rate plus 87.5 basis points
|
Warehouse Facility II (2)
|
|
CAC Warehouse Funding Corp. II
|
|
12/20/20
|
|
(3)
|
|
$
|
400.0
|
|
|
|
LIBOR plus 175 basis points (4)
|
Warehouse Facility IV (2)
|
|
CAC Warehouse Funding LLC IV
|
|
04/30/20
|
|
(3)
|
|
$
|
100.0
|
|
|
|
LIBOR plus 225 basis points (4)
|
Warehouse Facility V (2)
|
|
CAC Warehouse Funding LLC V
|
|
08/18/19
|
|
(5)
|
|
$
|
100.0
|
|
|
|
LIBOR plus 225 basis points (4)
|
Warehouse Facility VI (2)
|
|
CAC Warehouse Funding LLC VI
|
|
09/30/20
|
|
(3)
|
|
$
|
75.0
|
|
|
|
LIBOR plus 200 basis points
|
Warehouse Facility VII (2)
|
|
CAC Warehouse Funding LLC VII
|
|
12/01/19
|
|
(6)
|
|
$
|
150.0
|
|
|
|
Commercial paper rate plus 190 basis points for class A and plus 220 basis points for class B (4)
|
Term ABS 2015-1 (2)
|
|
Credit Acceptance Funding LLC 2015-1
|
|
01/16/17
|
|
(3)
|
|
$
|
300.6
|
|
|
|
Fixed rate
|
Term ABS 2015-2 (2)
|
|
Credit Acceptance Funding LLC 2015-2
|
|
08/15/17
|
|
(3)
|
|
$
|
300.2
|
|
|
|
Fixed rate
|
Term ABS 2016-1 (2)
|
|
Credit Acceptance Funding LLC 2016-1
|
|
02/15/18
|
|
(3)
|
|
$
|
385.0
|
|
|
|
LIBOR plus 195 basis points (4)
|
Term ABS 2016-2 (2)
|
|
Credit Acceptance Funding LLC 2016-2
|
|
05/15/18
|
|
(3)
|
|
$
|
350.2
|
|
|
|
Fixed rate
|
Term ABS 2016-3 (2)
|
|
Credit Acceptance Funding LLC 2016-3
|
|
10/15/18
|
|
(3)
|
|
$
|
350.0
|
|
|
|
Fixed rate
|
Term ABS 2017-1 (2)
|
|
Credit Acceptance Funding LLC 2017-1
|
|
02/15/19
|
|
(3)
|
|
$
|
350.0
|
|
|
|
Fixed rate
|
Term ABS 2017-2 (2)
|
|
Credit Acceptance Funding LLC 2017-2
|
|
06/17/19
|
|
(3)
|
|
$
|
450.0
|
|
|
|
Fixed rate
|
Term ABS 2017-3 (2)
|
|
Credit Acceptance Funding LLC 2017-3
|
|
10/15/19
|
|
(3)
|
|
$
|
350.0
|
|
|
|
Fixed rate
|
2021 Senior Notes
|
|
n/a
|
|
02/15/21
|
|
|
|
$
|
300.0
|
|
|
|
Fixed rate
|
2023 Senior Notes
|
|
n/a
|
|
03/15/23
|
|
|
|
$
|
250.0
|
|
|
|
Fixed rate
|
(1)
|
The amount of the facility will decrease to $315.0 million on June 22, 2019.
|
(2)
|
Financing made available only to a specified subsidiary of the Company.
|
(3)
|
Represents the revolving maturity date. The outstanding balance will amortize after the revolving maturity date based on the cash flows of the pledged assets.
|
(4)
|
Interest rate cap agreements are in place to limit the exposure to increasing interest rates.
|
(5)
|
Represents the revolving maturity date. The outstanding balance will amortize after the revolving maturity date and any amounts remaining on August 18, 2021 will be due on that date.
|
(6)
|
Represents the revolving maturity date. The outstanding balance will amortize after the revolving maturity date and any amounts remaining on November 30, 2021 will be due on that date.
|
(In millions)
|
For the Years Ended December 31,
|
||||||
|
2017
|
|
2016
|
||||
Revolving Secured Line of Credit
|
|
|
|
||||
Maximum outstanding principal balance
|
$
|
276.7
|
|
|
$
|
186.4
|
|
Average outstanding principal balance
|
80.3
|
|
|
30.8
|
|
||
Warehouse Facility II
|
|
|
|
||||
Maximum outstanding principal balance
|
$
|
275.0
|
|
|
$
|
200.1
|
|
Average outstanding principal balance
|
4.0
|
|
|
3.8
|
|
||
Warehouse Facility IV
|
|
|
|
||||
Maximum outstanding principal balance
|
$
|
12.0
|
|
|
$
|
12.0
|
|
Average outstanding principal balance
|
5.9
|
|
|
12.0
|
|
||
Warehouse Facility V
|
|
|
|
||||
Maximum outstanding principal balance
|
$
|
100.0
|
|
|
$
|
100.0
|
|
Average outstanding principal balance
|
7.8
|
|
|
1.6
|
|
||
Warehouse Facility VI
|
|
|
|
||||
Maximum outstanding principal balance
|
$
|
75.0
|
|
|
$
|
49.9
|
|
Average outstanding principal balance
|
7.8
|
|
|
3.3
|
|
||
Warehouse Facility VII
|
|
|
|
||||
Maximum outstanding principal balance
|
$
|
—
|
|
|
$
|
—
|
|
Average outstanding principal balance
|
—
|
|
|
—
|
|
(Dollars in millions)
|
As of December 31,
|
||||||
|
2017
|
|
2016
|
||||
Revolving Secured Line of Credit
|
|
|
|
||||
Principal balance outstanding
|
$
|
13.9
|
|
|
$
|
—
|
|
Amount available for borrowing (1)
|
336.1
|
|
|
310.0
|
|
||
Interest rate
|
3.44
|
%
|
|
—
|
%
|
||
Warehouse Facility II
|
|
|
|
||||
Principal balance outstanding
|
$
|
—
|
|
|
$
|
—
|
|
Amount available for borrowing (1)
|
400.0
|
|
|
400.0
|
|
||
Loans pledged as collateral
|
—
|
|
|
—
|
|
||
Restricted cash and cash equivalents pledged as collateral
|
1.0
|
|
|
1.5
|
|
||
Interest rate
|
—
|
%
|
|
—
|
%
|
||
Warehouse Facility IV
|
|
|
|
||||
Principal balance outstanding
|
$
|
—
|
|
|
$
|
12.0
|
|
Amount available for borrowing (1)
|
100.0
|
|
|
63.0
|
|
||
Loans pledged as collateral
|
—
|
|
|
23.0
|
|
||
Restricted cash and cash equivalents pledged as collateral
|
1.0
|
|
|
0.9
|
|
||
Interest rate
|
—
|
%
|
|
2.77
|
%
|
||
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
|
$
|
—
|
|
|
$
|
—
|
|
Amount available for borrowing (1)
|
150.0
|
|
|
—
|
|
||
Loans pledged as collateral
|
—
|
|
|
—
|
|
||
Restricted cash and cash equivalents pledged as collateral
|
1.0
|
|
|
—
|
|
||
Interest rate
|
—
|
%
|
|
—
|
%
|
||
Term ABS 2014-1
|
|
|
|
||||
Principal balance outstanding
|
$
|
—
|
|
|
$
|
106.5
|
|
Loans pledged as collateral
|
—
|
|
|
307.2
|
|
||
Restricted cash and cash equivalents pledged as collateral
|
—
|
|
|
28.3
|
|
||
Interest rate
|
—
|
%
|
|
2.02
|
%
|
||
Term ABS 2014-2
|
|
|
|
||||
Principal balance outstanding
|
$
|
—
|
|
|
$
|
267.6
|
|
Loans pledged as collateral
|
—
|
|
|
413.9
|
|
||
Restricted cash and cash equivalents pledged as collateral
|
—
|
|
|
34.9
|
|
||
Interest rate
|
—
|
%
|
|
2.10
|
%
|
Term ABS 2015-1
|
|
|
|
||||
Principal balance outstanding
|
$
|
78.0
|
|
|
$
|
300.6
|
|
Loans pledged as collateral
|
238.4
|
|
|
374.5
|
|
||
Restricted cash and cash equivalents pledged as collateral
|
23.3
|
|
|
29.6
|
|
||
Interest rate
|
2.88
|
%
|
|
2.26
|
%
|
||
Term ABS 2015-2
|
|
|
|
||||
Principal balance outstanding
|
$
|
215.9
|
|
|
$
|
300.2
|
|
Loans pledged as collateral
|
313.3
|
|
|
372.6
|
|
||
Restricted cash and cash equivalents pledged as collateral
|
26.4
|
|
|
28.1
|
|
||
Interest rate
|
2.72
|
%
|
|
2.63
|
%
|
||
Term ABS 2016-1
|
|
|
|
||||
Principal balance outstanding
|
$
|
385.0
|
|
|
$
|
385.0
|
|
Loans pledged as collateral
|
467.2
|
|
|
474.0
|
|
||
Restricted cash and cash equivalents pledged as collateral
|
36.6
|
|
|
34.8
|
|
||
Interest rate
|
3.18
|
%
|
|
2.65
|
%
|
||
Term ABS 2016-2
|
|
|
|
||||
Principal balance outstanding
|
$
|
350.2
|
|
|
$
|
350.2
|
|
Loans pledged as collateral
|
428.0
|
|
|
490.7
|
|
||
Restricted cash and cash equivalents pledged as collateral
|
33.2
|
|
|
34.4
|
|
||
Interest rate
|
2.83
|
%
|
|
2.83
|
%
|
||
Term ABS 2016-3
|
|
|
|
||||
Principal balance outstanding
|
$
|
350.0
|
|
|
$
|
350.0
|
|
Loans pledged as collateral
|
425.7
|
|
|
489.6
|
|
||
Restricted cash and cash equivalents pledged as collateral
|
31.1
|
|
|
30.6
|
|
||
Interest rate
|
2.53
|
%
|
|
2.53
|
%
|
||
Term ABS 2017-1
|
|
|
|
||||
Principal balance outstanding
|
$
|
350.0
|
|
|
$
|
—
|
|
Loans pledged as collateral
|
425.9
|
|
|
—
|
|
||
Restricted cash and cash equivalents pledged as collateral
|
30.8
|
|
|
—
|
|
||
Interest rate
|
2.78
|
%
|
|
—
|
%
|
||
Term ABS 2017-2
|
|
|
|
||||
Principal balance outstanding
|
$
|
450.0
|
|
|
$
|
—
|
|
Loans pledged as collateral
|
545.8
|
|
|
—
|
|
||
Restricted cash and cash equivalents pledged as collateral
|
39.8
|
|
|
—
|
|
||
Interest rate
|
2.72
|
%
|
|
—
|
%
|
||
Term ABS 2017-3
|
|
|
|
||||
Principal balance outstanding
|
$
|
350.0
|
|
|
$
|
—
|
|
Loans pledged as collateral
|
482.6
|
|
|
—
|
|
||
Restricted cash and cash equivalents pledged as collateral
|
29.6
|
|
|
—
|
|
||
Interest rate
|
2.88
|
%
|
|
—
|
%
|
||
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
|
%
|
(1)
|
Availability may be limited by the amount of assets pledged as collateral.
|
(Dollars in millions)
|
|
|
|
|
|
|
||
Term ABS Financings
|
|
Close Date
|
|
Net Book Value of Loans
Contributed at Closing
|
|
24 Month Revolving Period
|
||
Term ABS 2015-1
|
|
January 29, 2015
|
|
$
|
375.9
|
|
|
Through January 16, 2017
|
Term ABS 2015-2
|
|
August 20, 2015
|
|
375.5
|
|
|
Through August 15, 2017
|
|
Term ABS 2016-1
|
|
February 26, 2016
|
|
481.4
|
|
|
Through February 15, 2018
|
|
Term ABS 2016-2
|
|
May 12, 2016
|
|
437.8
|
|
|
Through May 15, 2018
|
|
Term ABS 2016-3
|
|
October 27, 2016
|
|
437.8
|
|
|
Through October 15, 2018
|
|
Term ABS 2017-1
|
|
February 23, 2017
|
|
437.8
|
|
|
Through February 15, 2019
|
|
Term ABS 2017-2
|
|
June 29, 2017
|
|
563.2
|
|
|
Through June 17, 2019
|
|
Term ABS 2017-3
|
|
October 26, 2017
|
|
437.6
|
|
|
Through October 15, 2019
|
(In millions)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Year
|
|
Revolving Secured Line of Credit Facility
|
|
Warehouse Facilities
|
|
Term ABS
Financings (1)
|
|
Senior Notes
|
|
Total
|
||||||||||
2018
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
800.1
|
|
|
$
|
—
|
|
|
$
|
800.1
|
|
2019
|
|
—
|
|
|
—
|
|
|
1,015.6
|
|
|
—
|
|
|
1,015.6
|
|
|||||
2020
|
|
13.9
|
|
|
—
|
|
|
690.0
|
|
|
—
|
|
|
703.9
|
|
|||||
2021
|
|
—
|
|
|
—
|
|
|
23.4
|
|
|
300.0
|
|
|
323.4
|
|
|||||
2022
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Thereafter
|
|
—
|
|
|
—
|
|
|
—
|
|
|
250.0
|
|
|
250.0
|
|
|||||
Total
|
|
$
|
13.9
|
|
|
$
|
—
|
|
|
$
|
2,529.1
|
|
|
$
|
550.0
|
|
|
$
|
3,093.0
|
|
(1)
|
The principal maturities of the Term ABS transactions are estimated based on forecasted collections.
|
(Dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|||||||
As of December 31, 2017
|
|||||||||||||||||
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
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
100.0
|
|
|
Warehouse Facility IV
|
|
Cap Floating Rate
|
|
04/2016
|
|
04/2019
|
|
75.0
|
|
|
5.50
|
%
|
||
|
|
|
|
Cap Floating Rate
|
|
05/2017
|
|
04/2021
|
|
25.0
|
|
|
6.50
|
%
|
|||
|
|
|
|
|
|
|
|
|
|
100.0
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
100.0
|
|
|
Warehouse Facility V
|
|
Cap Floating Rate
|
|
06/2015
|
|
07/2018
|
|
75.0
|
|
|
5.50
|
%
|
||
385.0
|
|
|
Term ABS 2016-1
|
|
Cap Floating Rate
|
|
04/2016
|
|
02/2019
|
|
385.0
|
|
|
5.00
|
%
|
||
150.0
|
|
|
Warehouse Facility VII
|
|
Cap Floating Rate
|
|
12/2017
|
|
11/2021
|
|
150.0
|
|
|
5.50
|
%
|
(Dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|||||||
As of December 31, 2016
|
|||||||||||||||||
Facility Amount
|
|
Facility Name
|
|
Purpose
|
|
Start
|
|
End
|
|
Notional
|
|
Cap Interest Rate (1)
|
|||||
$
|
400.0
|
|
|
Warehouse Facility II
|
|
Cap Floating Rate
|
|
06/2016
|
|
12/2017
|
|
$
|
325.0
|
|
|
5.50
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
75.0
|
|
|
Warehouse Facility IV
|
|
Cap Floating Rate
|
|
03/2014
|
|
03/2017
|
|
18.8
|
|
|
5.50
|
%
|
||
|
|
|
|
Cap Floating Rate
|
|
04/2016
|
|
04/2019
|
|
56.2
|
|
|
5.50
|
%
|
|||
|
|
|
|
|
|
|
|
|
|
75.0
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
100.0
|
|
|
Warehouse Facility V
|
|
Cap Floating Rate
|
|
06/2015
|
|
07/2018
|
|
75.0
|
|
|
5.50
|
%
|
||
385.0
|
|
|
Term ABS 2016-1
|
|
Cap Floating Rate
|
|
04/2016
|
|
02/2019
|
|
385.0
|
|
|
5.00
|
%
|
(1)
|
Rate excludes the spread over the LIBOR rate.
|
(Dollars in millions)
|
|
For the Years Ended December 31,
|
||||||||||||
|
|
2016
|
|
2015
|
||||||||||
|
|
Affiliated
Dealer
activity
|
|
% of
consolidated
|
|
Affiliated
Dealer
activity
|
|
% of
consolidated
|
||||||
Dealer Loan revenue
|
|
$
|
1.5
|
|
|
0.2
|
%
|
|
$
|
2.5
|
|
|
0.4
|
%
|
New Consumer Loan assignments (1)
|
|
8.9
|
|
|
0.3
|
%
|
|
5.9
|
|
|
0.3
|
%
|
||
Accelerated Dealer Holdback payments
|
|
0.2
|
|
|
0.4
|
%
|
|
0.2
|
|
|
0.4
|
%
|
||
Dealer Holdback payments
|
|
1.0
|
|
|
0.7
|
%
|
|
1.4
|
|
|
0.9
|
%
|
(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.
|
(In millions)
|
For the Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Income before provision for income taxes:
|
$
|
583.8
|
|
|
$
|
531.2
|
|
|
$
|
474.5
|
|
Current provision for income taxes:
|
|
|
|
|
|
||||||
Federal
|
184.6
|
|
|
157.2
|
|
|
127.9
|
|
|||
State
|
13.5
|
|
|
15.8
|
|
|
10.6
|
|
|||
|
198.1
|
|
|
173.0
|
|
|
138.5
|
|
|||
Deferred provision for income taxes:
|
|
|
|
|
|
||||||
Federal
|
(88.4
|
)
|
|
22.4
|
|
|
33.7
|
|
|||
State
|
2.7
|
|
|
1.8
|
|
|
1.9
|
|
|||
|
(85.7
|
)
|
|
24.2
|
|
|
35.6
|
|
|||
Interest and penalties expense:
|
|
|
|
|
|
||||||
Interest
|
1.2
|
|
|
1.2
|
|
|
0.7
|
|
|||
Penalties
|
—
|
|
|
—
|
|
|
—
|
|
|||
|
1.2
|
|
|
1.2
|
|
|
0.7
|
|
|||
Provision for income taxes
|
$
|
113.6
|
|
|
$
|
198.4
|
|
|
$
|
174.8
|
|
(In millions)
|
As of December 31,
|
||||||
|
2017
|
|
2016
|
||||
Deferred tax assets:
|
|
|
|
||||
Allowance for credit losses
|
$
|
100.4
|
|
|
$
|
118.2
|
|
Stock-based compensation
|
14.3
|
|
|
18.3
|
|
||
Deferred state net operating loss
|
8.1
|
|
|
6.5
|
|
||
Other, net
|
4.0
|
|
|
11.6
|
|
||
Deferred tax assets before valuation allowance
|
126.8
|
|
|
154.6
|
|
||
Less: valuation allowance
|
(5.5
|
)
|
|
—
|
|
||
Total deferred tax assets
|
121.3
|
|
|
154.6
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Valuation of Loans receivable
|
300.4
|
|
|
417.8
|
|
||
Deferred Loan origination costs
|
1.5
|
|
|
2.5
|
|
||
Other, net
|
6.8
|
|
|
7.4
|
|
||
Total deferred tax liabilities
|
308.7
|
|
|
427.7
|
|
||
Net deferred tax liability
|
$
|
187.4
|
|
|
$
|
273.1
|
|
|
For the Years Ended December 31,
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
U.S. federal statutory income tax rate
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
Effect of the 2017 Act
|
-17.1
|
%
|
|
—
|
%
|
|
—
|
%
|
State income taxes
|
1.7
|
%
|
|
2.0
|
%
|
|
1.6
|
%
|
Excess tax benefits from stock-based compensation plans
|
-0.4
|
%
|
|
—
|
%
|
|
—
|
%
|
Other
|
0.3
|
%
|
|
0.3
|
%
|
|
0.2
|
%
|
Effective income tax rate
|
19.5
|
%
|
|
37.3
|
%
|
|
36.8
|
%
|
(In millions)
|
For the Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Unrecognized tax benefits at January 1,
|
$
|
27.7
|
|
|
$
|
21.8
|
|
|
$
|
16.6
|
|
Additions for tax positions of the current year
|
6.7
|
|
|
8.2
|
|
|
7.4
|
|
|||
Additions for tax positions of prior years
|
0.3
|
|
|
—
|
|
|
—
|
|
|||
Reductions for tax positions of prior years
|
(0.4
|
)
|
|
—
|
|
|
—
|
|
|||
Reductions as a result of a lapse of the statute of limitations
|
(2.4
|
)
|
|
(2.3
|
)
|
|
(2.2
|
)
|
|||
Unrecognized tax benefits at December 31,
|
$
|
31.9
|
|
|
$
|
27.7
|
|
|
$
|
21.8
|
|
|
For the Years Ended December 31,
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
Weighted average shares outstanding:
|
|
|
|
|
|
|||
Common shares
|
19,245,188
|
|
|
20,065,423
|
|
|
20,364,435
|
|
Vested restricted stock units
|
252,531
|
|
|
266,346
|
|
|
527,260
|
|
Basic number of weighted average shares outstanding
|
19,497,719
|
|
|
20,331,769
|
|
|
20,891,695
|
|
Dilutive effect of restricted stock and restricted stock units
|
61,217
|
|
|
78,347
|
|
|
89,058
|
|
Dilutive number of weighted average shares outstanding
|
19,558,936
|
|
|
20,410,116
|
|
|
20,980,753
|
|
(Dollars in millions)
|
|
For the Years Ended December 31,
|
|||||||||||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||
Stock Repurchases
|
|
Number of Shares Repurchased
|
|
Cost
|
|
Number of Shares Repurchased
|
|
Cost
|
|
Number of Shares Repurchased
|
|
Cost
|
|||||||||
Open Market (1)
|
|
588,580
|
|
|
$
|
119.1
|
|
|
495,662
|
|
|
$
|
88.5
|
|
|
464,006
|
|
|
$
|
85.4
|
|
Other (2)
|
|
21,680
|
|
|
4.4
|
|
|
170,668
|
|
|
33.2
|
|
|
6,065
|
|
|
1.1
|
|
|||
Total
|
|
610,260
|
|
|
$
|
123.5
|
|
|
666,330
|
|
|
$
|
121.7
|
|
|
470,071
|
|
|
$
|
86.5
|
|
(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
December 31, 2017
, we had authorization to repurchase
776,208
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.
|
•
|
Over a period of
15 years
, based on continuous employment and a combination of the cumulative improvement in our annual adjusted economic profit, a non-GAAP financial measure, and the attainment of annual adjusted economic profit targets.
|
•
|
Over a period of
three years
, based on continuous employment.
|
Restricted Stock
|
|
Number of Shares
|
|
Weighted Average Grant-Date Fair Value Per Share
|
|||
Non-vested as of December 31, 2016
|
|
168,546
|
|
|
$
|
111.91
|
|
Granted
|
|
8,543
|
|
|
200.79
|
|
|
Vested
|
|
(17,338
|
)
|
|
127.83
|
|
|
Forfeited
|
|
(451
|
)
|
|
198.81
|
|
|
Non-vested as of December 31, 2017
|
|
159,300
|
|
|
$
|
114.70
|
|
•
|
Over a period of
ten years
, based on continuous employment and the cumulative improvement in our annual adjusted economic profit.
|
•
|
Over a period of
five years
, based upon the compounded annual growth rate in our adjusted economic profit.
|
•
|
Over a period of one to
four years
, based on continuous employment and the compounded annual growth rate in our adjusted EPS, a non-GAAP financial measure.
|
Restricted Stock Units
|
|
Number of Restricted
Stock Units |
|
Weighted Average Grant-Date Fair Value Per Share
|
|
Aggregate Intrinsic Value (2) (in millions)
|
|
Weighted Average Remaining Contractual Term (in years)
|
|||||
Outstanding as of December 31, 2016
|
|
455,823
|
|
|
$
|
101.75
|
|
|
|
|
|
||
Granted
|
|
108,100
|
|
|
206.45
|
|
|
|
|
|
|||
Converted
|
|
(34,836
|
)
|
|
40.12
|
|
|
|
|
|
|||
Forfeited
|
|
(6,260
|
)
|
|
178.07
|
|
|
|
|
|
|||
Outstanding as of December 31, 2017 (1)
|
|
522,827
|
|
|
$
|
126.59
|
|
|
$
|
169.1
|
|
|
5.2
|
Vested as of December 31, 2017
|
|
258,195
|
|
|
$
|
106.67
|
|
|
$
|
83.5
|
|
|
4.2
|
(1)
|
No RSUs outstanding at
December 31, 2017
were convertible to shares of common stock.
|
(2)
|
The intrinsic value of RSUs is measured by applying the closing stock price as of
December 31, 2017
to the applicable number of units.
|
(In millions)
|
For the Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Restricted stock
|
$
|
2.9
|
|
|
$
|
2.8
|
|
|
$
|
3.2
|
|
Restricted stock units
|
12.5
|
|
|
4.6
|
|
|
9.2
|
|
|||
Total
|
$
|
15.4
|
|
|
$
|
7.4
|
|
|
$
|
12.4
|
|
(In millions)
|
|
|
||
Year
|
|
Minimum Future
Lease Commitments |
||
2018
|
|
$
|
1.9
|
|
2019
|
|
1.6
|
|
|
2020
|
|
1.5
|
|
|
2021
|
|
1.1
|
|
|
2022
|
|
0.5
|
|
|
Total
|
|
$
|
6.6
|
|
(In millions, except per share data)
|
|
2017
|
||||||||||||||
|
|
Quarters Ended
|
||||||||||||||
Income Statement Data
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
Revenue
|
|
$
|
262.8
|
|
|
$
|
276.0
|
|
|
$
|
283.9
|
|
|
$
|
287.3
|
|
Income before provision for income taxes
|
|
144.2
|
|
|
157.1
|
|
|
160.1
|
|
|
122.4
|
|
||||
Net income
|
|
93.3
|
|
|
99.1
|
|
|
100.7
|
|
|
177.1
|
|
||||
Net income per share (1):
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
4.73
|
|
|
$
|
5.09
|
|
|
$
|
5.19
|
|
|
$
|
9.13
|
|
Diluted
|
|
$
|
4.72
|
|
|
$
|
5.09
|
|
|
$
|
5.19
|
|
|
$
|
9.10
|
|
|
|
|
|
|
|
|
|
|
||||||||
(In millions, except per share data)
|
|
2016
|
||||||||||||||
|
|
Quarters Ended
|
||||||||||||||
Income Statement Data
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
Revenue
|
|
$
|
227.9
|
|
|
$
|
238.5
|
|
|
$
|
246.6
|
|
|
$
|
256.2
|
|
Income before provision for income taxes
|
|
118.4
|
|
|
134.7
|
|
|
136.5
|
|
|
141.6
|
|
||||
Net income
|
|
74.4
|
|
|
84.9
|
|
|
85.9
|
|
|
87.6
|
|
||||
Net income per share (1):
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
3.64
|
|
|
$
|
4.17
|
|
|
$
|
4.22
|
|
|
$
|
4.35
|
|
Diluted
|
|
$
|
3.63
|
|
|
$
|
4.17
|
|
|
$
|
4.21
|
|
|
$
|
4.33
|
|
(1)
|
Basic and diluted net income per share are computed independently for each of the quarters presented. Therefore, the sum of quarterly basic and diluted per share information may not equal annual basic and diluted net income per share.
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
•
|
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
|
•
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
|
•
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our consolidated financial statements.
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
Plan Category
|
|
Number of shares to be issued upon exercise of outstanding options, warrants and rights
|
|
Weighted-average exercise price of outstanding options
|
|
Number of shares
remaining available for future issuance under equity compensation plans (a)
|
|||
Equity compensation plan approved by shareholders:
|
|
|
|
|
|
|
|||
Incentive Plan
|
|
522,827
|
|
|
—
|
|
|
125,731
|
|
(a)
|
For additional information regarding our equity compensation plans, see Note 14 to the consolidated financial statements contained in Item 8 of this Form 10-K, which is incorporated herein by reference.
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
(a)(1)
|
The following consolidated financial statements of the Company and the Report of Independent Registered Public Accounting Firm are contained in Item 8 — Financial Statements and Supplementary Data of this Form 10-K, which is incorporated herein by reference.
|
|
Report of Independent Registered Public Accounting Firm
|
|
Consolidated Financial Statements:
|
|
— Consolidated Balance Sheets as of December 31, 2017 and 2016
|
|
— Consolidated Statements of Income for the years ended December 31, 2017, 2016 and 2015
|
|
— Consolidated Statements of Comprehensive Income for the years ended December 31, 2017, 2016 and 2015
|
|
— Consolidated Statements of Shareholders' Equity for the years ended December 31, 2017, 2016 and 2015
|
|
— Consolidated Statements of Cash Flows for the years ended December 31, 2017, 2016 and 2015
|
|
Notes to Consolidated Financial Statements
|
(2)
|
Financial Statement Schedules have been omitted because they are not applicable or are not required or the information required to be set forth therein is included in the Consolidated Financial Statements or Notes thereto.
|
(3)
|
The exhibits filed in response to Item 601 of Regulation S-K are listed in the Exhibit Index below.
|
|
Amendment No. 1 to Amended and Restated Backup Servicing Agreement, dated as of July 18, 2014, among the Company, CAC Warehouse Funding Corporation II, Wells Fargo Securities, LLC, and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 4.126 to the Company’s Current Report on Form 8-K filed July 23, 2014).
|
|
|
Loan and Security Agreement, dated as of September 15, 2014, among the Company, CAC Warehouse Funding LLC V, Fifth Third Bank and Systems & Services Technologies, Inc. (incorporated by reference to Exhibit 4.127 to the Company’s Current Report on Form 8-K filed September 18, 2014).
|
|
|
Backup Servicing Agreement, dated as of September 15, 2014, among the Company, CAC Warehouse Funding LLC V, Fifth Third Bank and Systems & Services Technologies, Inc. (incorporated by reference to Exhibit 4.128 to the Company’s Current Report on Form 8-K filed September 18, 2014).
|
|
|
Contribution Agreement, dated as of September 15, 2014, between the Company and CAC Warehouse Funding LLC V (incorporated by reference to Exhibit 4.129 to the Company’s Current Report on Form 8-K filed September 18, 2014).
|
|
|
Indenture dated as of January 29, 2015, between Credit Acceptance Auto Loan Trust 2015-1 and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 4.58 to the Company’s Current Report on Form 8-K filed February 3, 2015).
|
|
|
Sale and Servicing Agreement, dated as of January 29, 2015, among the Company, Credit Acceptance Auto Loan Trust 2015-1, Credit Acceptance Funding LLC 2015-1, and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 4.59 to the Company’s Current Report on Form 8-K filed February 3, 2015).
|
|
|
Backup Servicing Agreement, dated as of January 29, 2015, among the Company, Credit Acceptance Funding LLC 2015-1, Credit Acceptance Auto Loan Trust 2015-1, and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 4.60 to the Company’s Current Report on Form 8-K filed February 3, 2015).
|
|
|
Amended and Restated Trust Agreement dated as of January 29, 2015 between Credit Acceptance Funding LLC 2015-1, each of the members of the Board of Trustees of the Trust and U.S. Bank Trust National Association (incorporated by reference to Exhibit 4.61 to the Company’s Current Report on Form 8-K filed February 3, 2015).
|
|
|
Sale and Contribution Agreement, dated as of January 29, 2015, between the Company and Credit Acceptance Funding LLC 2015-1 (incorporated by reference to Exhibit 4.62 to the Company’s Current Report on Form 8-K filed February 3, 2015).
|
|
|
Indenture dated as of March 30, 2015, among the Company, the Guarantors named therein and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed March 31, 2015).
|
|
|
Third Amendment to Loan and Security Agreement, dated as of May 13, 2015, 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 4.71 to the Company's Current Report on Form 8-K filed May 15, 2015).
|
|
|
First Amendment to Backup Servicing Agreement, dated as of May 13, 2015, 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 4.72 to the Company's Current Report on Form 8-K filed May 15, 2015).
|
|
|
First Amendment to the Sixth Amended and Restated Credit Agreement, dated as of June 11, 2015, among the Company, the Banks which are parties thereto from time to time, and Comerica Bank (incorporated by reference to Exhibit 4.74 to the Company’s Current Report on Form 8-K filed June 16, 2015).
|
|
|
First Amendment to Loan and Security Agreement, dated as of June 11, 2015, among the Company, CAC Warehouse Funding LLC V, Fifth Third Bank, and Systems & Services Technologies, Inc. (incorporated by reference to Exhibit 4.75 to the Company’s Current Report on Form 8-K filed June 16, 2015).
|
|
|
Indenture dated as of August 20, 2015, between Credit Acceptance Auto Loan Trust 2015-2 and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 4.76 to the Company’s Current Report on Form 8-K filed August 25, 2015).
|
|
|
Sale and Servicing Agreement, dated as of August 20, 2015, among the Company, Credit Acceptance Auto Loan Trust 2015-2, Credit Acceptance Funding LLC 2015-2, and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 4.77 to the Company’s Current Report on Form 8-K filed August 25, 2015).
|
|
|
Backup Servicing Agreement, dated as of August 20, 2015, among the Company, Credit Acceptance Funding LLC 2015-2, Credit Acceptance Auto Loan Trust 2015-2, and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 4.78 to the Company’s Current Report on Form 8-K filed August 25, 2015).
|
|
|
Amended and Restated Trust Agreement dated as of August 20, 2015 between Credit Acceptance Funding LLC 2015-2, each of the members of the Board of Trustees of the Trust and U.S. Bank Trust National Association (incorporated by reference to Exhibit 4.79 to the Company’s Current Report on Form 8-K filed August 25, 2015).
|
|
Sale and Contribution Agreement, dated as of August 20, 2015, between the Company and Credit Acceptance Funding LLC 2015-2 (incorporated by reference to Exhibit 4.80 to the Company’s Current Report on Form 8-K filed August 25, 2015).
|
|
|
Loan and Security Agreement dated as of September 30, 2015, among the Company, CAC Warehouse Funding LLC VI, and Flagstar Bank, FSB (incorporated by reference to Exhibit 4.82 to the Company’s Current Report on Form 8-K filed October 5, 2015).
|
|
|
Contribution Agreement, dated as of September 30, 2015, between the Company and CAC Warehouse Funding LLC VI (incorporated by reference to Exhibit 4.83 to the Company’s Current Report on Form 8-K filed October 5, 2015).
|
|
|
Loan and Security Agreement dated as of February 26, 2016, among the Company, Credit Acceptance Funding LLC 2016-1, Wells Fargo Bank, National Association and Bank of Montreal (incorporated by reference to Exhibit 4.66 to the Company’s Current Report on Form 8-K filed March 3, 2016).
|
|
|
Backup Servicing Agreement, dated as of February 26, 2016, among the Company, Credit Acceptance Funding LLC 2016-1, and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 4.67 to the Company’s Current Report on Form 8-K filed March 3, 2016).
|
|
|
Sale and Contribution Agreement, dated as of February 26, 2016, between the Company and Credit Acceptance Funding LLC 2016-1 (incorporated by reference to Exhibit 4.68 to the Company’s Current Report on Form 8-K filed March 3, 2016).
|
|
|
Indenture dated as of May 12, 2016, between Credit Acceptance Auto Loan Trust 2016-2 and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 4.70 to the Company’s Current Report on Form 8-K filed May 16, 2016).
|
|
|
Sale and Servicing Agreement, dated as of May 12, 2016, among the Company, Credit Acceptance Auto Loan Trust 2016-2, Credit Acceptance Funding LLC 2016-2, and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 4.71 to the Company’s Current Report on Form 8-K filed May 16, 2016).
|
|
|
Backup Servicing Agreement, dated as of May 12, 2016, among the Company, Credit Acceptance Funding LLC 2016-2, Credit Acceptance Auto Loan Trust 2016-2, and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 4.72 to the Company’s Current Report on Form 8-K filed May 16, 2016).
|
|
|
Amended and Restated Trust Agreement dated as of May 12, 2016 between Credit Acceptance Funding LLC 2016-2, each of the members of the Board of Trustees of the Trust and U.S. Bank Trust National Association (incorporated by reference to Exhibit 4.73 to the Company’s Current Report on Form 8-K filed May 16, 2016).
|
|
|
Sale and Contribution Agreement, dated as of May 12, 2016, between the Company and Credit Acceptance Funding LLC 2016-2 (incorporated by reference to Exhibit 4.74 to the Company’s Current Report on Form 8-K filed May 16, 2016).
|
|
|
Second Amendment to the Sixth Amended and Restated Credit Agreement, dated as of June 15, 2016, among the Company, the Banks signatory thereto and Comerica Bank, as agent for the Banks (incorporated by reference to Exhibit 4.76 to the Company’s Current Report on Form 8-K filed June 20, 2016).
|
|
|
Sixth Amended and Restated Loan and Security Agreement dated as of June 23, 2016, among the Company, CAC Warehouse Funding Corporation II and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 4.77 to the Company’s Current Report on Form 8-K filed June 28, 2016).
|
|
|
Fourth Amended and Restated Sale and Contribution Agreement, dated as of June 23, 2016, between the Company and CAC Warehouse Funding Corporation II (incorporated by reference to Exhibit 4.78 to the Company’s Current Report on Form 8-K filed June 28, 2016).
|
|
|
Second Amendment to Loan and Security Agreement, dated as of August 18, 2016, among the Company, CAC Warehouse Funding LLC V, Fifth Third Bank and Systems & Services Technologies, Inc. (incorporated by reference to Exhibit 4.79 to the Company’s Current Report on Form 8-K filed August 23, 2016).
|
|
|
First Amendment to Contribution Agreement, dated as of August 18, 2016, between the Company and CAC Warehouse Funding LLC V (incorporated by reference to Exhibit 4.80 to the Company’s Current Report on Form 8-K filed August 23, 2016).
|
|
|
Indenture dated as of October 27, 2016, between Credit Acceptance Auto Loan Trust 2016-3 and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 4.81 to the Company’s Current Report on Form 8-K filed October 31, 2016).
|
|
|
Sale and Servicing Agreement, dated as of October 27, 2016, among the Company, Credit Acceptance Auto Loan Trust 2016-3, Credit Acceptance Funding LLC 2016-3, and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 4.82 to the Company’s Current Report on Form 8-K filed October 31, 2016).
|
|
|
Backup Servicing Agreement, dated as of October 27, 2016, among the Company, Credit Acceptance Funding LLC 2016-3, Credit Acceptance Auto Loan Trust 2016-3, and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 4.83 to the Company’s Current Report on Form 8-K filed October 31, 2016).
|
|
Amended and Restated Trust Agreement, dated as of October 27, 2016, among Credit Acceptance Funding LLC 2016-3, each of the members of the Board of Trustees of the Trust and U.S. Bank Trust National Association (incorporated by reference to Exhibit 4.84 to the Company’s Current Report on Form 8-K filed October 31, 2016).
|
|
|
Sale and Contribution Agreement, dated as of October 27, 2016, between the Company and Credit Acceptance Funding LLC 2016-3 (incorporated by reference to Exhibit 4.85 to the Company’s Current Report on Form 8-K filed October 31, 2016).
|
|
|
Indenture dated as of February 23, 2017, between Credit Acceptance Auto Loan Trust 2017-1 and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 4.73 to the Company’s Current Report on Form 8-K filed March 1, 2017).
|
|
|
Sale and Servicing Agreement, dated as of February 23, 2017, among the Company, Credit Acceptance Auto Loan Trust 2017-1, Credit Acceptance Funding LLC 2017-1, and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 4.74 to the Company’s Current Report on Form 8-K filed March 1, 2017).
|
|
|
Backup Servicing Agreement, dated as of February 23, 2017, among the Company, Credit Acceptance Funding LLC 2017-1, Credit Acceptance Auto Loan Trust 2017-1, and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 4.75 to the Company’s Current Report on Form 8-K filed March 1, 2017).
|
|
|
Amended and Restated Trust Agreement, dated as of February 23, 2017, among Credit Acceptance Funding LLC 2017-1, each of the members of the Board of Trustees of the Trust and U.S. Bank Trust National Association (incorporated by reference to Exhibit 4.76 to the Company’s Current Report on Form 8-K filed March 1, 2017).
|
|
|
Sale and Contribution Agreement, dated as of February 23, 2017, between the Company and Credit Acceptance Funding LLC 2017-1(incorporated by reference to Exhibit 4.77 to the Company’s Current Report on Form 8-K filed March 1, 2017).
|
|
|
Fourth Amendment to Loan and Security Agreement, dated as of April 28, 2017, 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 4.79 to the Company’s Current Report on Form 8-K filed May 4, 2017).
|
|
|
Third Amendment to Sixth Amended and Restated Credit Agreement and Extension Agreement, dated as of June 28, 2017, among the Company, the Banks signatory thereto and Comerica Bank, as agent for the Banks (incorporated by reference to Exhibit 4.80 to the Company’s Current Report on Form 8-K filed June 30, 2017).
|
|
|
Indenture dated as of June 29, 2017, between Credit Acceptance Auto Loan Trust 2017-2 and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 4.81 to the Company’s Current Report on Form 8-K filed July 5, 2017).
|
|
|
Sale and Servicing Agreement, dated as of June 29, 2017, among the Company, Credit Acceptance Auto Loan Trust 2017-2, Credit Acceptance Funding LLC 2017-2, and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 4.82 to the Company’s Current Report on Form 8-K filed July 5, 2017).
|
|
|
Backup Servicing Agreement, dated as of June 29, 2017, among the Company, Credit Acceptance Funding LLC 2017-2, Credit Acceptance Auto Loan Trust 2017-2, and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 4.83 to the Company’s Current Report on Form 8-K filed July 5, 2017).
|
|
|
Amended and Restated Trust Agreement, dated as of June 29, 2017, among Credit Acceptance Funding LLC 2017-1, each of the members of the Board of Trustees of the Trust and U.S. Bank Trust National Association (incorporated by reference to Exhibit 4.84 to the Company’s Current Report on Form 8-K filed July 5, 2017).
|
|
|
Sale and Contribution Agreement, dated as of June 29, 2017, between the Company and Credit Acceptance Funding LLC 2017-2 (incorporated by reference to Exhibit 4.85 to the Company’s Current Report on Form 8-K filed July 5, 2017).
|
|
|
First Amendment to Loan and Security Agreement, dated as of July 18, 2017, among the Company, CAC Warehouse Funding LLC VI and Flagstar Bank, fsb (incorporated by reference to Exhibit 4.87 to the Company’s Current Report on Form 8-K filed July 21, 2017).
|
|
|
New Bank Addendum, dated October 19, 2017 to the Sixth Amended and Restated Credit Acceptance Corporation Credit Agreement dated as of October 19, 2017, among the Company, each of the financial institutions parties thereto and Comerica Bank, as agent (incorporated by reference to Exhibit 4.94 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2017).
|
|
|
Assignment Agreement, dated October 19, 2017, among the Company, the Banks signatory thereto and Comerica Bank, as agent, under the Sixth Amended and Restated Credit Acceptance Corporation Credit Agreement dated as of June 23, 2014 (incorporated by reference to Exhibit 4.95 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2017).
|
|
|
Indenture dated as of October 26, 2017, between Credit Acceptance Auto Loan Trust 2017-3 and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 4.88 to the Company’s Current Report on Form 8-K filed October 27, 2017).
|
|
|
Sale and Servicing Agreement, dated as of October 26, 2017, among the Company, Credit Acceptance Auto Loan Trust 2017-3, Credit Acceptance Funding LLC 2017-3, and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 4.89 to the Company’s Current Report on Form 8-K filed October 27, 2017).
|
|
Backup Servicing Agreement, dated as of October 26, 2017, among the Company, Credit Acceptance Funding LLC 2017-3, Credit Acceptance Auto Loan Trust 2017-3, and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 4.90 to the Company’s Current Report on Form 8-K filed October 27, 2017).
|
|
|
Amended and Restated Trust Agreement, dated as of October 26, 2017, among Credit Acceptance Funding LLC 2017-3, each of the members of the Board of Trustees of the Trust and U.S. Bank Trust National Association (incorporated by reference to Exhibit 4.91 to the Company’s Current Report on Form 8-K filed October 27, 2017).
|
|
|
Sale and Contribution Agreement, dated as of October 26, 2017, between the Company and Credit Acceptance Funding LLC 2017-3 (incorporated by reference to Exhibit 4.92 to the Company’s Current Report on Form 8-K filed October 27, 2017).
|
|
|
Loan and Security Agreement, dated as of December 1, 2017, among the Company, CAC Warehouse Funding LLC VII, Credit Suisse AG, New York Branch and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 4.96 to the Company’s Current Report on Form 8-K filed December 7, 2017).
|
|
|
Contribution Agreement, dated as of December 1, 2017, between the Company and CAC Warehouse Funding LLC VII (incorporated by reference to Exhibit 4.97 to the Company’s Current Report on Form 8-K filed December 7, 2017).
|
|
|
Backup Servicing Agreement, dated as of December 1, 2017, among the Company, CAC Warehouse Funding LLC VII, Credit Suisse AG, New York Branch and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 4.98 to the Company’s Current Report on Form 8-K filed December 7, 2017).
|
|
|
Amended and Restated Intercreditor Agreement, dated December 1, 2017, 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, 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 Funding LLC 2016-1, Credit Acceptance Funding LLC 2015-2, Credit Acceptance Funding LLC 2015-1, 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, Credit Acceptance Auto Loan Trust 2015-2, Credit Acceptance Auto Loan Trust 2015-1, Wells Fargo Bank, National Association, as agent, Fifth Third Bank, as agent, Bank of Montreal, as agent, Flagstar Bank, FSB, as agent and Comerica Bank, as agent (incorporated by reference to Exhibit 4.99 to the Company’s Current Report on Form 8-K filed December 7, 2017).
|
|
|
Amendment No. 1 to Sixth Amended and Restated Loan and Security Agreement, dated as of December 20, 2017, among the Company, CAC Warehouse Funding Corporation II and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 4.100 to the Company’s Current Report on Form 8-K filed December 21, 2017).
|
|
|
Form of Restricted Stock Grant Agreement (incorporated by reference to Exhibit 10(q)(4) to the Company’s Current Report on Form 8-K filed February 28, 2007).*
|
|
|
Credit Acceptance Corporation Amended and Restated Incentive Compensation Plan, as amended, April 6, 2009 (incorporated by reference to Annex A to the Company’s Definitive Proxy Statement on Schedule 14A filed April 10, 2009).*
|
|
|
Form of Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10(q)(11) to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2009).*
|
|
|
Form of Board of Directors Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10(q)(12) to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2009).*
|
|
|
Restricted Stock Unit Award Agreement, dated March 26, 2012, between the Company and Brett A. Roberts (incorporated by reference to Exhibit 10.16 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2012).*
|
|
|
Restricted Stock Award Agreement, dated March 26, 2012, between the Company and Brett A. Roberts (incorporated by reference to Exhibit 10.17 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2012).*
|
|
|
Credit Acceptance Corporation Amended and Restated Incentive Compensation Plan, as amended, March 26, 2012 (incorporated by reference to Annex A to the Company’s Definitive Proxy Statement on Schedule 14A filed April 5, 2012).*
|
|
|
Form of Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.19 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2013).*
|
|
|
Shareholder Agreement, dated as of January 3, 2017, between the Company and Donald A. Foss (incorporated by reference to Exhibit 10.18 to the Company’s Current Report on Form 8-K filed January 4, 2017).*
|
|
|
Form of Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.19 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2017).*
|
|
|
Amendment to Shareholder Agreement dated September 15, 2017, between the Company and Donald A. Foss (incorporated by reference to Exhibit 10.19 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2017).*
|
|
Amendment to Shareholder Agreement dated November 29, 2017, between the Company and Donald A. Foss.*
|
|
|
Ratio of Earnings to Fixed Charges.
|
|
|
Schedule of Credit Acceptance Corporation Subsidiaries.
|
|
|
Consent of Grant Thornton LLP.
|
|
|
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act.
|
|
|
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act.
|
|
|
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(INS)
|
|
XBRL Instance Document.
|
101(SCH)
|
|
XBRL Taxonomy Extension Schema Document.
|
101(CAL)
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
101(DEF)
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
101(LAB)
|
|
XBRL Taxonomy Label Linkbase Document.
|
101(PRE)
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
|
|
*
|
Management contract or compensatory plan or arrangement.
|
|
CREDIT ACCEPTANCE CORPORATION
|
|
|
|
|
|
|
|
By:
|
/s/ BRETT A. ROBERTS
|
|
|
|
Brett A. Roberts
|
|
|
|
Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
|
|
Date:
|
February 9, 2018
|
|
Signature
|
|
Title
|
|
|
|
/s/ BRETT A. ROBERTS
|
|
Chief Executive Officer and Director
|
Brett A. Roberts
|
|
(Principal Executive Officer)
|
|
|
|
/s/ KENNETH S. BOOTH
|
|
Chief Financial Officer
|
Kenneth S. Booth
|
|
(Principal Financial Officer and Principal Accounting Officer)
|
|
|
|
/s/ THOMAS N. TRYFOROS
|
|
Lead Director
|
Thomas N. Tryforos
|
|
|
|
|
|
/s/ GLENDA J. FLANAGAN
|
|
Director
|
Glenda J. Flanagan
|
|
|
|
|
|
/s/ SCOTT J. VASSALLUZZO
|
|
Director
|
Scott J. Vassalluzzo
|
|
|
Donald A. Foss
26155 Hawthorne
Franklin, MI 48025
|
|
(In millions, except ratios)
|
For the Years Ended December 31,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
|
|
||||||||||||||||||
Earnings Available for Fixed Charges
|
|
|
|
|
|
|
|
|
|
||||||||||
Income before provision for income taxes
|
$
|
583.8
|
|
|
$
|
531.2
|
|
|
$
|
474.5
|
|
|
$
|
420.9
|
|
|
$
|
398.2
|
|
Add fixed charges included in earnings:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
120.2
|
|
|
97.7
|
|
|
76.0
|
|
|
56.7
|
|
|
65.0
|
|
|||||
Interest element of rentals
|
0.6
|
|
|
0.5
|
|
|
0.5
|
|
|
0.5
|
|
|
0.4
|
|
|||||
Total fixed charges (1)
|
$
|
120.8
|
|
|
$
|
98.2
|
|
|
$
|
76.5
|
|
|
$
|
57.2
|
|
|
$
|
65.4
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total earnings available for fixed charges
|
$
|
704.6
|
|
|
$
|
629.4
|
|
|
$
|
551.0
|
|
|
$
|
478.1
|
|
|
$
|
463.6
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio of earnings to fixed charges
|
5.8
|
|
|
6.4
|
|
|
7.2
|
|
|
8.4
|
|
|
7.1
|
|
|||||
|
|
|
|
|
|
|
|
|
|
Buyers Vehicle Protection Plan, Inc
|
|
CAC International Holdings, LLC
|
|
CAC of Canada Company
|
|
CAC Reinsurance, Ltd.
|
|
CAC Scotland
|
|
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
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Credit Acceptance Auto Loan Trust 2015-1
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Credit Acceptance Auto Loan Trust 2015-2
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Credit Acceptance Auto Loan Trust 2016-2
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Credit Acceptance Auto Loan Trust 2016-3
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Credit Acceptance Auto Loan Trust 2017-1
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Credit Acceptance Auto Loan Trust 2017-2
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Credit Acceptance Auto Loan Trust 2017-3
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Credit Acceptance Auto Loan Trust 2018-1
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Credit Acceptance Corporation of South Dakota, Inc.
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Credit Acceptance Funding LLC 2014-1
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Credit Acceptance Funding LLC 2014-2
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Credit Acceptance Funding LLC 2015-1
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Credit Acceptance Funding LLC 2015-2
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Credit Acceptance Funding LLC 2016-1
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Credit Acceptance Funding LLC 2016-2
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Credit Acceptance Funding LLC 2016-3
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Credit Acceptance Funding LLC 2017-1
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Credit Acceptance Funding LLC 2017-2
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Credit Acceptance Funding LLC 2017-3
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Credit Acceptance Funding LLC 2018-1
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Credit Acceptance Wholesale Buyers Club, Inc.
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Vehicle Remarketing Services, Inc.
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VSC Re Company
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Date: February 9, 2018
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By:
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/s/ Brett A. Roberts
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Brett A. Roberts
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Chief Executive Officer
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(Principal Executive Officer)
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Date: February 9, 2018
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By:
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/s/ Kenneth S. Booth
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Kenneth S. Booth
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Chief Financial Officer
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(Principal Financial Officer)
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Date: February 9, 2018
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By:
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/s/ Brett A. Roberts
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|
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Brett A. Roberts
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|
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Chief Executive Officer
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|
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(Principal Executive Officer)
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Date: February 9, 2018
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By:
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/s/ Kenneth S. Booth
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Kenneth S. Booth
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Chief Financial Officer
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(Principal Financial Officer)
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|