AMERICREDIT CORP - 10-Q Quarterly Report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2005

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 1-10667

AmeriCredit Corp.

(Exact name of registrant as specified in its charter)

Texas

75-2291093

(State or other jurisdiction of

Incorporation or organization)

(I.R.S. Employer

Identification No.)

801 Cherry Street, Suite 3900, Fort Worth, Texas 76102

(Address of principal executive offices, including Zip Code)

(817) 302-7000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes x No ¨

There were 147,681,757 shares of common stock, $0.01 par value outstanding as of April 30, 2005.

AMERICREDIT CORP.

INDEX TO FORM 10-Q


			Page
Part I.	FINANCIAL INFORMATION

	Item 1.	FINANCIAL STATEMENTS	3

		Consolidated Balance Sheets – March 31, 2005 and June 30, 2004	3

		Consolidated Statements of Income and Comprehensive Income – Three and Nine Months Ended March 31, 2005 and 2004	4

		Consolidated Statements of Cash Flows – Nine Months Ended March 31, 2005 and 2004	5

		Notes to Consolidated Financial Statements	6

	Item 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	30

	Item 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	68

	Item 4.	CONTROLS AND PROCEDURES	68

Part II.	OTHER INFORMATION

	Item 1.	LEGAL PROCEEDINGS	68

	Item 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	70

	Item 3.	DEFAULTS UPON SENIOR SECURITIES	70

	Item 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	70

	Item 5.	OTHER INFORMATION	70

	Item 6.	EXHIBITS	71

SIGNATURE			72

Part I. FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

AMERICREDIT CORP.

Consolidated Balance Sheets

(Unaudited, Dollars in Thousands)


	March 31, 2005			June 30, 2004
ASSETS

Cash and cash equivalents	$	579,997		$	421,450
Finance receivables, net		7,636,691			6,363,869
Interest-only receivables from Trusts		63,035			110,952
Investments in Trust receivables		328,974			528,345
Restricted cash - gain on sale Trusts		352,040			423,025
Restricted cash - securitization notes payable		559,525			482,724
Restricted cash - warehouse credit facilities		66,168			209,875
Property and equipment, net		94,489			101,424
Deferred income taxes		4,886
Other assets		196,758			182,915

Total assets	$	9,882,563		$	8,824,579

LIABILITIES AND SHAREHOLDERS’ EQUITY

Liabilities:
Warehouse credit facilities	$	1,261,257		$	500,000
Securitization notes payable		5,874,077			5,598,732
Senior notes		166,670			166,414
Convertible senior notes		200,000			200,000
Other notes payable		10,004			21,442
Funding payable		39,130			37,273
Accrued taxes and expenses		127,173			159,798
Derivative financial instruments		12,645			12,348
Deferred income taxes					3,460

Total liabilities		7,690,956			6,699,467

Commitments and contingencies (Note 8)

Shareholders’ equity:
Preferred stock, $0.01 par value per share; 20,000,000 shares authorized, none issued
Common stock, $0.01 par value per share; 230,000,000 shares authorized; 165,131,418 and 162,777,598 shares issued		1,651			1,628
Additional paid-in capital		1,127,489			1,081,079
Accumulated other comprehensive income		41,653			36,823
Retained earnings		1,256,692			1,047,725

		2,427,485			2,167,255
Treasury stock, at cost (14,343,772 and 5,165,588 shares)		(235,878	)		(42,143	)

Total shareholders’ equity		2,191,607			2,125,112

Total liabilities and shareholders’ equity	$	9,882,563		$	8,824,579

The accompanying notes are an integral part of these consolidated financial statements.

AMERICREDIT CORP.

Consolidated Statements of Income and Comprehensive Income

(Unaudited, Dollars in Thousands, Except Per Share Data)


	Three Months Ended March 31,						Nine Months Ended March 31,
	2005			2004			2005			2004
Revenue
Finance charge income	$	311,869		$	235,473		$	873,472		$	672,259
Servicing income		44,830			69,428			144,559			186,379
Other income		15,225			8,444			38,616			24,436

		371,924			313,345			1,056,647			883,074

Costs and expenses
Operating expenses		80,810			88,566			234,812			257,890
Provision for loan losses		105,006			63,928			303,919			189,527
Interest expense		65,028			55,865			184,520			200,896
Restructuring charges, net		2,130			2,481			2,741			2,949

		252,974			210,840			725,992			651,262

Income before income taxes		118,950			102,505			330,655			231,812

Income tax provision		43,357			38,695			121,688			87,509

Net income		75,593			63,810			208,967			144,303

Other comprehensive income
Unrealized gains (losses) on credit enhancement assets		8,748			10,969			(17,708	)		18,113
Unrealized gains (losses) on cash flow hedges		7,996			(4,908	)		10,638			11,343
Foreign currency translation adjustment		(580	)		(965	)		8,937			3,000
Income tax (provision) benefit		(6,103	)		(2,288	)		2,963			(11,232	)

Other comprehensive income		10,061			2,808			4,830			21,224

Comprehensive income	$	85,654		$	66,618		$	213,797		$	165,527

Earnings per share
Basic	$	0.50		$	0.41		$	1.36		$	0.92

Diluted	$	0.46		$	0.38		$	1.25		$	0.88

Weighted average shares outstanding		152,071,432			157,153,633			153,944,984			156,739,014

Weighted average shares and assumed incremental shares		167,269,900			171,839,976			168,760,906			164,353,020

The accompanying notes are an integral part of these consolidated financial statements.

AMERICREDIT CORP.

Consolidated Statements of Cash Flows

(Unaudited, in Thousands)


	Nine Months Ended March 31,
	2005			2004
Cash flows from operating activities
Net income	$	208,967		$	144,303
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		28,345			66,052
Provision for loan losses		303,919			189,527
Deferred income taxes		7,192			(31,015	)
Accretion of present value discount		(63,373	)		(67,683	)
Impairment of credit enhancement assets		1,122			33,364
Other		(5,279	)		5,112
Distributions from gain on sale Trusts, net of swap payments		345,306			248,278
Changes in assets and liabilities:
Other assets		(3,866	)		(36,158	)
Accrued taxes and expenses		(30,910	)		(7,931	)

Net cash provided by operating activities		791,423			543,849

Cash flows from investing activities
Purchases of receivables		(3,863,935	)		(2,654,814	)
Principal collections and recoveries on receivables		2,306,315			1,567,268
Purchases of property and equipment		(6,507	)		(2,552	)
Change in restricted cash - securitization notes payable		(72,973	)		(199,510	)
Change in restricted cash - warehouse credit facilities		143,707			705,858
Change in other assets		26,751			56,994

Net cash used in investing activities		(1,466,642	)		(526,756	)

Cash flows from financing activities
Net change in warehouse credit facilities		761,257			(504,952	)
Repayment of whole loan purchase facility					(905,000	)
Issuance of securitization notes payable		2,450,000			2,865,000
Payments on securitization notes payable		(2,182,803	)		(1,387,469	)
Issuance of convertible senior notes					200,000
Retirement of senior notes					(41,502	)
Debt issuance costs		(14,646	)		(23,105	)
Net change in notes payable		(11,623	)		(10,140	)
Sale of warrants					34,441
Purchase of call options on common stock					(61,490	)
Repurchase of common stock		(200,894	)
Net proceeds from issuance of common stock		30,780			9,780

Net cash provided by financing activities		832,071			175,563

Net increase in cash and cash equivalents		156,852			192,656

Effect of Canadian exchange rate changes on cash and cash equivalents		1,695			113

Cash and cash equivalents at beginning of period		421,450			316,921

Cash and cash equivalents at end of period	$	579,997		$	509,690

The accompanying notes are an integral part of these consolidated financial statements.

AMERICREDIT CORP.

Notes to Consolidated Financial Statements

(Unaudited)

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The consolidated financial statements include the accounts of AmeriCredit Corp. and its wholly-owned subsidiaries (the “Company”). All significant intercompany transactions and accounts have been eliminated in consolidation.

The consolidated financial statements as of March 31, 2005, and for the three and nine months ended March 31, 2005 and 2004, are unaudited, and in management’s opinion include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for such interim periods. Diluted earnings per share for all periods beginning with the December 2003 quarter were revised to reflect the retroactive application of EITF Issue No. 04-8, “The Effect of Contingently Convertible Debt on Diluted Earnings Per Share” (“EITF 04-8”). The results for interim periods are not necessarily indicative of results for a full year.

The interim period consolidated financial statements, including the notes thereto, are condensed and do not include all disclosures required by generally accepted accounting principles in the United States of America (“GAAP”). These interim period financial statements should be read in conjunction with the Company’s consolidated financial statements that are included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2004.

Diluted Earnings Per Share

In September 2004, the Emerging Issues Task Force reached a final consensus on EITF 04-8 to change the effect of contingently convertible debt within the dilutive earnings per share calculation. This change, which became effective for the three months ended December 31, 2004, resulted in the Company’s convertible senior notes being treated as convertible securities and included in dilutive earnings per share calculations using the if-converted method. EITF 04-8 required retroactive application beginning with the three months ended December 31, 2003, which was the first quarter the Company’s convertible senior notes were outstanding. Under EITF 04-8, diluted earnings per share decreased from $0.40 to $0.38 per share and from $0.91 to $0.88 per share for the three and nine months ended March 31, 2004, respectively.

Accretion of Acquisition Fees

The Company adopted the Accounting Standards Executive Committee’s Statement of Position 03-3, “Accounting for Certain Loans or Debt Securities Acquired in a Transfer” (“SOP 03-3”), for loans acquired subsequent to June 30, 2004. Under SOP 03-3, dealer acquisition fees on loans purchased by the Company are no longer considered credit-related because there is no deterioration in credit

quality between the time the loan is originated and when it is acquired. Accordingly, dealer acquisition fees reduce the carrying value of finance receivables and are accreted into earnings as an adjustment to yield over the life of the loans using the effective interest method in accordance with Statement of Financial Accounting Standards No. 91, “Accounting for Nonrefundable Fees and Costs Associated with Originating or Acquiring Loans and Initial Direct Costs of Leases.” Unamortized acquisition fees on loans charged off reduce the amount charged off to the allowance for loan losses and unamortized acquisition fees on loans paid off are recognized as an adjustment to yield in the period they are paid off. The implementation of SOP 03-3 resulted in a reduction in the Company’s pre-tax income of $26.0 million and $68.8 million for the three and nine months ended March 31, 2005, respectively.

Stock-based Employee Compensation

On July 1, 2003, the Company adopted the fair value recognition provision of Statement of Financial Accounting Standards No. 123, “Accounting for Stock –Based Compensation” (“SFAS 123”), prospectively for all awards granted, modified or settled after June 30, 2003. The prospective method is one of the adoption methods provided for under Statement of Financial Accounting Standards No. 148, “Accounting for Stock-Based Compensation – Transition and Disclosure” issued in December 2002. SFAS 123 requires that compensation cost for all stock awards be calculated and recognized over the service period. This compensation cost is determined using option pricing models that are intended to estimate the fair value of awards at the grant date. The Company recognized compensation expense of $3.6 million ($2.3 million net of tax) and $6.4 million ($4.0 million net of tax) during the three and nine months ended March 31, 2005, respectively, and $1.3 million ($0.8 million net of tax) and $1.9 million ($1.2 million net of tax) during the three and nine months ended March 31, 2004, respectively, for options granted or modified subsequent to June 30, 2003.

The following table illustrates the effect on net income and earnings per share had compensation expense for all options granted under the Company’s plans been determined using the fair value-based method and amortized over the expected life of the options (in thousands, except per share data):


	Three Months Ended March 31,						Nine Months Ended March 31,
	2005			2004			2005			2004
Net income as reported	$	75,593		$	63,810		$	208,967		$	144,303
Add: Stock-based compensation expense included in reported net income, net of related tax effects		2,304			826			4,016			1,183
Deduct: Stock-based compensation expense determined under fair value-based method, net of related tax effects		(6,254	)		(5,621	)		(15,792	)		(15,387	)

Pro forma net income	$	71,643		$	59,015		$	197,191		$	130,099

Earnings per share:
Basic - as reported	$	0.50		$	0.41		$	1.36		$	0.92

Basic - pro forma	$	0.47		$	0.38		$	1.28		$	0.84

Diluted - as reported	$	0.46		$	0.38		$	1.25		$	0.88

Diluted - pro forma	$	0.43		$	0.35		$	1.18		$	0.80

The fair value of each option granted or modified during the three and nine months ended March 31, 2005 and 2004, was estimated using an option-pricing model with the following weighted average assumptions:


	Three Months Ended March 31,				Nine Months Ended March 31,
	2005		2004		2005		2004
Expected dividends	0		0		0		0
Expected volatility	62.4	%	102.4	%	55.6	%	104.2	%
Risk-free interest rate	3.5	%	1.2	%	3.1	%	1.7	%
Expected life	3.4 years		0.7 year		2.9 years		1.8 years

Current Accounting Pronouncements

Statement of Financial Accounting Standards No. 123 (revised 2004)

In December 2004, the Financial Accounting Standards Board issued SFAS 123R to revise FASB Statement No. 123, “Accounting for Stock-Based Compensation” (“SFAS 123R”). SFAS 123R, which is effective for the Company beginning on July 1, 2005, requires that the cost resulting from all share-based payment transactions be measured at fair-value and recognized in the financial statements. In March 2005, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 107 (“SAB 107”) to provide its view on the valuation of share-based payment arrangements for public companies. The Company anticipates that the adoption of SFAS 123R and SAB 107 will result in an estimated $4.7 million additional expense for the fiscal year ending June 30, 2006. The estimated additional expense is based on unamortized expense relating to outstanding options granted prior to the Company’s implementation of SFAS 123 on July 1, 2003, that are expected to vest subsequent to June 30, 2005.

NOTE 2 - FINANCE RECEIVABLES

Finance receivables consist of the following (in thousands):


	March 31, 2005			June 30, 2004
Finance receivables unsecuritized, net of fees	$	1,487,220		$	451,010
Finance receivables securitized, net of fees		6,637,816			6,331,270
Less nonaccretable acquisition fees and discounts		(175,880	)		(176,203	)
Less allowance for loan losses		(312,465	)		(242,208	)

	$	7,636,691		$	6,363,869

Finance receivables securitized represent receivables transferred to the Company’s special purpose finance subsidiaries in securitization transactions accounted for as secured financings. Finance receivables unsecuritized include $1,362.5 million and $337.9 million pledged under the Company’s warehouse credit facilities as of March 31, 2005 and June 30, 2004, respectively.

The accrual of finance charge income has been suspended on $295.3 million and $255.6 million of finance receivables as of March 31, 2005 and June 30, 2004, respectively.

Finance contracts are generally purchased by the Company from auto dealers without recourse, and accordingly, the dealer usually has no liability to the Company if the consumer defaults on the contract. Depending upon the contract structure and consumer credit attributes, the Company may charge dealers a non-refundable acquisition fee when purchasing individual finance contracts. The Company recorded acquisition fees on loans purchased prior to July 1, 2004, as nonaccretable fees available to cover losses inherent in the loan

portfolio. Additionally, the Company records a discount on finance receivables repurchased upon the exercise of a call option from its gain on sale securitization transactions and accounts for such discounts as nonaccretable discounts available to cover losses inherent in the repurchased finance receivables.

A summary of the nonaccretable acquisition fees and discounts is as follows (in thousands):


	Three Months Ended March 31,						Nine Months Ended March 31,
	2005			2004			2005			2004
Balance at beginning of period	$	177,819		$	139,964		$	176,203		$	102,719
Purchases of receivables		2,453			26,127			14,247			64,455
Net charge-offs		(4,392	)		(9,526	)		(14,570	)		(10,609	)

Balance at end of period	$	175,880		$	156,565		$	175,880		$	156,565

A summary of the allowance for loan losses is as follows (in thousands):


	Three Months Ended March 31,						Nine Months Ended March 31,
	2005			2004			2005			2004
Balance at beginning of period	$	282,364		$	213,834		$	242,208		$	226,979
Provision for loan losses		105,006			63,928			303,919			189,527
Net charge-offs		(74,905	)		(53,730	)		(233,662	)		(192,474	)

Balance at end of period	$	312,465		$	224,032		$	312,465		$	224,032

NOTE 3 - SECURITIZATIONS

A summary of the Company’s securitization activity and cash flows from special purpose entities used for securitizations (the “Trusts”) is as follows (in thousands):


	Three Months Ended March 31,				Nine Months Ended March 31,
	2005		2004		2005		2004
Receivables securitized	$	972,973	$	833,333	$	2,658,103	$	3,155,860
Net proceeds from securitization		900,000		750,000		2,450,000		2,865,000
Servicing fees:
Sold		23,127		45,051		82,308		152,060
Secured financing (a)		44,399		33,405		126,081		85,448
Distributions from Trusts, net of swap payments:
Sold		146,220		170,209		345,306		248,278
Secured financing		125,127		57,726		400,160		133,388

(a)

Servicing fees earned on securitizations accounted for as secured financings are included in finance charge income on the consolidated statements of income.

As of March 31, 2005 and June 30, 2004, the Company was servicing $9,503.5 million and $11,471.8 million, respectively, of finance receivables that have been sold or transferred to securitization Trusts.

NOTE 4 - CREDIT ENHANCEMENT ASSETS

Credit enhancement assets represent the present value of the Company’s retained interests in securitizations accounted for as sales. Credit enhancement assets consist of the following (in thousands):


	March 31, 2005		June 30, 2004
Interest-only receivables from Trusts	$	63,035	$	110,952
Investments in Trust receivables		328,974		528,345
Restricted cash - gain on sale Trusts		352,040		423,025

	$	744,049	$	1,062,322

A summary of activity in the credit enhancement assets is as follows (in thousands):


	Three Months Ended March 31,						Nine Months Ended March 31,
	2005			2004			2005			2004
Balance at beginning of period	$	863,289		$	1,268,806		$	1,062,322		$	1,360,618
Distributions from Trusts		(147,000	)		(176,184	)		(349,654	)		(273,298	)
Accretion of present value discount		17,731			18,786			39,319			42,748
Other-than-temporary impairment					(1,795	)		(1,122	)		(33,364	)
Change in unrealized gain		10,099			13,728			(7,653	)		26,216
Foreign currency translation adjustment		(70	)		(152	)		837			269

Balance at end of period	$	744,049		$	1,123,189		$	744,049		$	1,123,189

With respect to the Company’s securitization transactions covered by a financial guaranty insurance policy, agreements with the insurers provide that if portfolio performance ratios (delinquency, cumulative default or cumulative net loss triggers) in a Trust’s pool of receivables exceed certain targets, the specified minimum credit enhancement levels would be increased.

Prior to October 2002, the financial guaranty insurance policies for all of the Company’s insured securitization transactions were provided by Financial Security Assurance, Inc. (“FSA”) and are referred to herein as the “FSA Program.” The restricted cash account for each securitization Trust insured as part of the FSA Program is cross-collateralized to the restricted cash accounts established in connection with the Company’s other securitization Trusts in the FSA Program, such that excess cash flows from FSA Program securitizations that have already met their own credit enhancement requirements may be used to fund increased minimum credit enhancement levels with respect to FSA Program securitization Trusts in which specified portfolio performance ratios have been exceeded rather than being distributed to the Company.

The Company has exceeded its targeted cumulative net loss triggers in seven of the remaining eight FSA Program securitizations and waivers were not granted by FSA. Accordingly, as of March 31, 2005, cash of approximately $171.6 million generated by FSA Program securitizations otherwise distributable to the Company has been used to fund increased credit enhancement levels for the securitizations that breached their cumulative net loss triggers. The Company expects to exceed its targeted cumulative net loss trigger on the remaining FSA Program securitization during fiscal 2005, which will require an increased credit enhancement level for such securitization. The impact of delaying and reducing the amount of cash to be released to the Company during fiscal 2005 from the FSA Program securitizations is not expected to be material to the Company’s liquidity position.

Significant assumptions used in measuring the estimated fair value of credit enhancement assets related to the gain on sale Trusts at the balance sheet dates are as follows:


	March 31, 2005	June 30, 2004
Cumulative credit losses	12.5% - 15.1%	12.4% - 14.9%

Discount rate used to estimate present value:
Interest-only receivables from Trusts	14.0%	14.0%
Investments in Trust receivables	9.8%	9.8%
Restricted cash	9.8%	9.8%

NOTE 5 - WAREHOUSE CREDIT FACILITIES

Amounts outstanding under the Company’s warehouse credit facilities are as follows (in thousands):


	March 31, 2005		June 30, 2004
Commercial paper facility	$	442,507
Medium term note facility		650,000	$	500,000
Repurchase facility		168,750

	$	1,261,257	$	500,000

Further detail regarding terms and availability of the warehouse credit facilities as of March 31, 2005, follows (in thousands):


Maturity	Facility Amount		Advances Outstanding		Finance Receivables Pledged		Restricted Cash Pledged (d)
Commercial paper facility:
November 2007 (a) (b)	$	1,950,000	$	442,507	$	512,604	$	5,163
Medium term note facility:
October 2007 (a) (c)		650,000		650,000		684,701		20,322
Repurchase facility:
August 2005 (a)		400,000		168,750		165,226		3,692
Near prime facility:
January 2006 (a)		150,000

	$	3,150,000	$	1,261,257	$	1,362,531	$	29,177

(a)

At the maturity date, the outstanding debt balance can either be repaid in full or over time based on the amortization of receivables pledged.

(b)

$150.0 million of this facility matures in November 2005, and the remaining $1,800.0 million matures in November 2007.

(c)

This facility is a revolving facility through the date stated above. During the revolving period, the Company has the ability to substitute receivables for cash, or vice versa.

(d)

These amounts do not include cash collected on finance receivables pledged of $37.0 million which is also included in restricted cash – warehouse credit facilities on the consolidated balance sheet.

In August 2004, the Company entered into a $400.0 million special purpose financing facility under which the Company can finance the repurchase of finance receivables from securitization Trusts upon exercise of the clean-up call option.

In October 2004, the Company terminated a $500.0 million medium term note facility and entered into a $650.0 million medium term note facility.

In November 2004, the Company renewed its $1,950.0 million commercial paper facility, extending the $150.0 million one-year maturity to November 2005 and the $1,800.0 million three-year maturity to November 2007.

In January 2005, the Company entered into a $150.0 million warehouse facility to fund higher credit quality receivables.

The Company’s warehouse credit facilities are administered by agents on behalf of institutionally managed commercial paper or medium term note conduits. Under these funding agreements, the Company transfers finance receivables to special purpose finance subsidiaries of the Company. These subsidiaries, in turn, issue notes to the agents, collateralized by such finance receivables and cash. The agents provide funding under the notes to the subsidiaries pursuant to an advance formula, and the subsidiaries forward the funds to the Company in consideration for the transfer of finance receivables. While these subsidiaries are included in the Company’s consolidated financial statements, these subsidiaries are separate legal entities and the finance receivables and

other assets held by these subsidiaries are legally owned by these subsidiaries and are not available to creditors of AmeriCredit Corp. or its other subsidiaries. Advances under the funding agreements bear interest at commercial paper, LIBOR or prime rates plus specified fees depending upon the source of funds provided by the agents.

The Company is required to hold certain funds in restricted cash accounts to provide additional collateral for borrowings under the facilities. Additionally, certain funding agreements contain various covenants requiring minimum financial ratios, asset quality, and portfolio performance ratios (cumulative net loss, delinquency and repossession ratios) as well as limits on deferment levels. Failure to meet any of these covenants could result in an event of default under these agreements. If an event of default occurs under these agreements, the lenders could elect to declare all amounts outstanding under these agreements to be immediately due and payable, enforce their interests against collateral pledged under these agreements or restrict the Company’s ability to obtain additional borrowings under these agreements. As of March 31, 2005, the Company’s warehouse credit facilities were in compliance with all covenants.

Debt issuance costs are being amortized over the expected term of the warehouse credit facilities. Unamortized costs of $10.9 million and $8.3 million as of March 31, 2005 and June 30, 2004, respectively, are included in other assets on the consolidated balance sheets.

NOTE 6 - SECURITIZATION NOTES PAYABLE

Securitization notes payable represents debt issued by the Company in securitization transactions accounted for as secured financings. Debt issuance costs are being amortized over the expected term of the securitizations; accordingly, unamortized costs of $20.9 and $21.7 million as of March 31, 2005 and June 30, 2004, respectively, are included in other assets on the consolidated balance sheets.

Securitization notes payable consists of the following (dollars in thousands):


Transaction	Maturity Date (d)	Original Note Amount		Original Weighted Average Interest Rate		Receivables Pledged		Note Balance
2002-E-M	June 2009	$	1,700,000	3.2	%	$	620,933	$	578,119
C2002-1 Canada (a) (b)	December 2009		137,000	5.5	%		70,265		37,718
2003-A-M	November 2009		1,000,000	2.6	%		437,051		382,642
2003-B-X	January 2010		825,000	2.3	%		381,323		335,660
2003-C-F	May 2010		915,000	2.8	%		473,182		417,316
2003-D-M	August 2010		1,200,000	2.3	%		695,323		598,839
2004-A-F	February 2011		750,000	2.3	%		469,943		414,865
2004-B-M	March 2011		900,000	2.2	%		637,907		554,355
2004-1 (c)	July 2010		575,000	3.7	%		513,861		393,188
2004-C-A	May 2011		800,000	3.2	%		715,141		636,688
2004-D-F	July 2011		750,000	3.1	%		705,853		654,371
2005-A-X	October 2011		900,000	3.7	%		917,034		870,316

		$	10,452,000			$	6,637,816	$	5,874,077

(a)

Note balances do not include $24.7 million of asset-backed securities issued and retained by the Company.

(b)

The balances reflect fluctuations in foreign currency translation rates and principal paydowns.

(c)

Note balances do not include $40.8 million of asset-backed securities retained by the Company.

(d)

Maturity date represents final legal maturity of securitization notes payable. Securitization notes payable are expected to be paid based on amortization of the finance receivables pledged to the Trusts.

NOTE 7 - DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES

In January 2005, the Company entered into interest rate swap agreements to hedge the variability in interest payments on its medium term notes facility caused by fluctuations in the benchmark interest rate. These interest rate swap agreements are designated and qualify as cash flow hedges.

As of March 31, 2005 and June 30, 2004, the Company had interest rate swap agreements with underlying notional amounts of $1,499.5 million and $1,469.6 million, respectively. As of March 31, 2005, the fair value of the Company’s interest rate swap agreements of $12.7 million are included in other assets on the consolidated balance sheets. As of June 30, 2004, the fair value of the Company’s interest rate swap agreements of $6.8 million are included as a liability in derivative financial instruments on the consolidated balance sheets. Interest rate swap agreements designated as hedges had unrealized gains of $11.9 million and $1.3 million included in accumulated other comprehensive income as of March 31, 2005 and June 30, 2004, respectively. The ineffectiveness related to the interest rate swap agreements designated as hedges was $0.9 million and $1.2 million for the three and nine months ended March 31, 2005, respectively, and was not material for the three and nine months ended March 31, 2004. The Company estimates approximately $6.1 million of unrealized gains included in other comprehensive income will be reclassified into earnings within the next twelve months.

As of March 31, 2005 and June 30, 2004, the Company had interest rate cap agreements with underlying notional amounts of $2,548.7 million and $2,335.0 million, respectively. The fair value of the Company’s interest rate cap agreements purchased by its special purpose finance subsidiaries of $13.0 million and $5.9 million as of March 31, 2005 and June 30, 2004, respectively, are included in other assets on the consolidated balance sheets. The fair value of the Company’s interest rate cap agreements sold by the Company of $12.6 million and $5.6 million as of March 31, 2005 and June 30, 2004, respectively, are included as a liability in derivative financial instruments on the consolidated balance sheets.

Under the terms of its derivative financial instruments, the Company is required to pledge certain funds to be held in restricted cash accounts as collateral for the outstanding derivative transactions. As of March 31, 2005 and June 30, 2004, these restricted cash accounts totaled $9.4 million and $36.3 million, respectively, and are included in other assets on the consolidated balance sheets.

NOTE 8 - COMMITMENTS AND CONTINGENCIES

Guarantees of Indebtedness

The payments of principal and interest on the Company’s senior notes and convertible senior notes are guaranteed by certain of the Company’s subsidiaries. As of March 31, 2005, the carrying value of the senior notes and convertible senior notes were $166.7 million and $200.0 million, respectively. See guarantor consolidating financial statements in Note 13.

Legal Proceedings

As a consumer finance company, the Company is subject to various consumer claims and litigation seeking damages and statutory penalties, based upon, among other things, usury, disclosure inaccuracies, wrongful repossession, violations of bankruptcy stay provisions, certificate of title disputes, fraud, breach of contract and discriminatory treatment of credit applicants. Some litigation against the Company could take the form of class action complaints by consumers. As the assignee of finance contracts originated by dealers, the Company may also be named as a co-defendant in lawsuits filed by consumers principally against dealers. The damages and penalties claimed by consumers in these types of matters can be substantial. The relief requested by the plaintiffs varies but can include requests for compensatory, statutory and punitive damages. The Company believes that it has taken prudent steps to address and mitigate the litigation risks associated with its business activities.

States District Court for the Northern District of Texas, Fort Worth Division; the plaintiff in Pierce seeks class action status. In Pierce, the plaintiff claims, among other allegations, that deferments were improperly granted by the Company to avoid delinquency triggers in securitization transactions and enhance cash flows and to incorrectly report charge-offs and delinquency percentages, thereby causing the Company to misrepresent its financial performance throughout the alleged class period. The Company believes that its granting of deferments, which is a common practice within the auto finance industry, complied with the covenants contained in its securitization and warehouse financing documents, and that its deferment activities were properly disclosed to all constituents, including shareholders, asset-backed investors, creditors and credit enhancement providers.

Additionally, a class action complaint, styled Lewis v. AmeriCredit Corp., was filed during the year ended June 30, 2003, against the Company and certain of its officers and directors alleging violations of Sections 11 and 15 of the Securities Act of 1933 in connection with the Company’s secondary public offering of common stock on October 1, 2002. In Lewis, also pending in the United States District Court for the Northern District of Texas, Fort Worth Division, the plaintiff alleges that the Company’s registration statement and prospectus for the offering contained untrue statements of material facts and omitted to state material facts necessary to make other statements in the registration statement not misleading.

In April 2004, two rulings were issued by the United States District Court for the Northern District of Texas, Fort Worth Division, affecting the Pierce and Lewis lawsuits. On April 1, 2004, the Court, in response to motions to dismiss filed by the Company and the other defendants, ruled that the plaintiff’s complaint in the Pierce lawsuit was deficient and ordered the plaintiff to cure such deficiencies or the case would be dismissed. On April 27, 2004, the Court issued an order consolidating the Lewis case into the Pierce case. In connection with the order consolidating the Lewis and Pierce cases, the Court granted the plaintiffs permission to file an amended, consolidated complaint, which they have done. The Company and the other defendants have filed motions to dismiss the amended complaint, and such motions are presently pending.

The Company believes that the claims alleged in the Pierce lawsuit, including the claims consolidated into Pierce from Lewis, are without merit and the Company intends to assert vigorous defenses to the litigation. Neither the likelihood of an unfavorable outcome nor the amount of ultimate liability, if any, with respect to this litigation can be determined at this time.

Two shareholder derivative actions have also been served on the Company. On February 27, 2003, the Company was served with a shareholder’s derivative action filed in the United States District Court for the Northern District of Texas, Fort Worth Division, entitled Mildred Rosenthal, derivatively and on behalf of nominal defendant AmeriCredit Corp. v. Clifton H. Morris, Jr., et al. A second shareholder derivative action was filed in the District Court of Tarrant County, Texas 48^th Judicial District, on August 19, 2003, entitled

David Harris, derivatively and on behalf of nominal defendant AmeriCredit Corp. v. Clifton H. Morris, Jr., et al. Both of these shareholder derivative actions allege, among other complaints, that certain officers and directors of the Company breached their respective fiduciary duties by causing the Company to make improper deferments, violate federal and state securities laws and issue misleading financial statements. The substantive allegations in both of the derivative actions are essentially the same as those in the above-referenced consolidated class action. A special litigation committee of the Board of Directors has been created to investigate the claims in the derivative actions. As a nominal defendant, the Company does not believe that it has any ultimate liability with respect to these derivative actions.

NOTE 9 - COMMON STOCK

During the nine months ended March 31, 2005, the Company repurchased 9,671,879 shares of its common stock, at an average cost of $20.77 per share, under stock repurchase plans approved by the Board of Directors since April 2004. During April 2005, the Company repurchased an additional 3,118,000 shares of its common stock, at an average cost of $23.35 per share. As of April 30, 2005, the stock repurchase plan authorizes the Company to repurchase another $394.1 million of its common stock.

NOTE 10 - RESTRUCTURING CHARGES

The Company recognized restructuring charges of $2.1 million and $2.7 million during the three and nine months ended March 31, 2005, respectively, relating to a revision of assumed lease costs for office space and a servicing facility closed during the Company’s restructuring in fiscal 2003 and fiscal 2004. The Company recognized restructuring charges of $2.5 million and $2.9 million for the three and nine months ended March 31, 2004, respectively.

As of March 31, 2005, total costs incurred to date in connection with the closing of the Jacksonville collections center and the abandonment of excess capacity at the Company’s Chandler collections center and corporate headquarters in fiscal 2004 includes $2.2 million in personnel-related costs and $13.6 million of contract termination and other associated costs. Total costs incurred to date in connection with the Company’s revised operating plan adopted in February 2003 include $18.8 million in personnel-related costs, $26.2 million of contract termination costs and $28.3 million in other associated costs.

A summary of the liabilities, which are included in accrued taxes and expenses on the consolidated balance sheets, for the restructuring charges for the nine months ended March 31, 2005, is as follows (in thousands):


	Personnel- Related Costs			Contract Termination Costs			Other Associated Costs			Total
Balance at June 30, 2004	$	10		$	16,029		$	3,390		$	19,429
Cash settlements		(10	)		(3,880	)					(3,890	)
Non-cash settlements					(539	)		(283	)		(822	)
Adjustments					2,799			(58	)		2,741

Balance at March 31, 2005	$			$	14,409		$	3,049		$	17,458

NOTE 11 - EARNINGS PER SHARE

A reconciliation of weighted average shares used to compute basic and diluted earnings per share is as follows (dollars in thousands, except per share data):


	Three Months Ended March 31,				Nine Months Ended March 31,
	2005		2004		2005		2004
Net income	$	75,593	$	63,810	$	208,967	$	144,303
Interest expense related to convertible senior notes, net of related tax effects		724		704		2,157		1,052

Adjusted net income	$	76,317	$	64,514	$	211,124	$	145,355

Weighted average shares outstanding		152,071,432		157,153,633		153,944,984		156,739,014

Incremental shares resulting from assumed conversions:
Stock options		3,687,438		3,344,195		3,357,872		1,803,808
Warrants		805,825		636,943		752,845		360,275
Convertible senior notes		10,705,205		10,705,205		10,705,205		5,449,923

		15,198,468		14,686,343		14,815,922		7,614,006

Weighted average shares and assumed incremental shares		167,269,900		171,839,976		168,760,906		164,353,020

Earnings per share:
Basic	$	0.50	$	0.41	$	1.36	$	0.92

Diluted	$	0.46	$	0.38	$	1.25	$	0.88

Basic earnings per share have been computed by dividing net income by weighted average shares outstanding.

Diluted earnings per share have been computed by dividing net income, adjusted for interest expense (net of related tax effects) related to the Company’s convertible senior notes, by the weighted average shares and assumed incremental shares. The treasury stock method was used to compute the assumed incremental shares impact of the Company’s outstanding stock options and warrants. The average common stock market prices for the periods were used to determine the number of incremental shares. Options to purchase approximately 1.4 million and 1.5 million shares of common stock at March 31, 2005 and 2004, respectively, were not included in the computation of diluted earnings per share because the option exercise price was greater than the average market price of the common shares.

The if-converted method was used to calculate the impact of the Company’s convertible senior notes on assumed incremental shares. As required by EITF 04-8, assumed incremental shares for the three and nine months ended March 31, 2004, were retroactively adjusted for the impact of the convertible senior notes.

NOTE 12 - SUPPLEMENTAL CASH FLOW INFORMATION

Cash payments for interest costs and income taxes consist of the following (in thousands):


	Nine Months Ended March 31,
	2005		2004
Interest costs (none capitalized)	$	176,564	$	172,621
Income taxes		138,394		89,158

The Company received a tax refund of $70.0 million in July 2003.

NOTE 13 - GUARANTOR CONSOLIDATING FINANCIAL STATEMENTS

The payments of principal and interest on the Company’s senior notes and convertible senior notes are guaranteed by certain of the Company’s subsidiaries (the “Subsidiary Guarantors”). The separate financial statements of the Subsidiary Guarantors are not included herein because the Subsidiary Guarantors are wholly-owned consolidated subsidiaries of the Company and are jointly, severally and unconditionally liable for the obligations represented by the senior notes and convertible senior notes. The Company believes that the consolidating financial information for the Company, the combined Subsidiary Guarantors and the combined Non-Guarantor Subsidiaries provides information that is more meaningful in understanding the financial position of the Subsidiary Guarantors than separate financial statements of the Subsidiary Guarantors.

The following consolidating financial statement schedules present consolidating financial data for (i) AmeriCredit Corp. (on a parent only basis), (ii) the combined Subsidiary Guarantors, (iii) the combined Non-Guarantor Subsidiaries,

(iv) an elimination column for adjustments to arrive at the information for the Company and its subsidiaries on a consolidated basis and (v) the Company and its subsidiaries on a consolidated basis.

Investments in subsidiaries are accounted for by the parent company using the equity method for purposes of this presentation. Results of operations of subsidiaries are therefore reflected in the parent company’s investment accounts and earnings. The principal elimination entries set forth below eliminate investments in subsidiaries and intercompany balances and transactions.

AmeriCredit Corp.

Consolidating Balance Sheet

March 31, 2005

(Unaudited, in Thousands)


	AmeriCredit Corp.			Guarantors		Non- Guarantors			Eliminations			Consolidated
ASSETS
Cash and cash equivalents				$	577,630	$	2,367					$	579,997
Finance receivables, net					53,812		7,582,879						7,636,691
Interest-only receivables from Trusts					29		63,006						63,035
Investments in Trust receivables					2,541		326,433						328,974
Restricted cash - gain on sale Trusts					3,851		348,189						352,040
Restricted cash - securitization notes payable							559,525						559,525
Restricted cash - warehouse credit facilities							66,168						66,168
Property and equipment, net	$	6,935			87,553		1						94,489
Deferred income taxes		(26,217	)		65,093		(33,990	)					4,886
Other assets		6,668			146,984		53,576		$	(10,470	)		196,758
Due from affiliates		1,308,686					1,544,686			(2,853,372	)
Investment in affiliates		1,324,233			3,406,598		335,705			(5,066,536	)

Total assets	$	2,620,305		$	4,344,091	$	10,848,545		$	(7,930,378	)	$	9,882,563

Liabilities:
Warehouse credit facilities						$	1,261,257					$	1,261,257
Securitization notes payable							5,927,175		$	(53,098	)		5,874,077
Senior notes	$	166,670											166,670
Convertible senior notes		200,000											200,000
Other notes payable		8,482		$	1,522								10,004
Funding payable					38,581		549						39,130
Accrued taxes and expenses		53,546			38,772		45,325			(10,470	)		127,173
Derivative financial instruments					12,645								12,645
Due to affiliates					2,824,971					(2,824,971	)

Total liabilities		428,698			2,916,491		7,234,306			(2,888,539	)		7,690,956

Shareholders’ equity:
Common stock		1,651			75,355		30,627			(105,982	)		1,651
Additional paid-in capital		1,127,489			75,670		1,806,411			(1,882,081	)		1,127,489
Accumulated other comprehensive income		41,653			14,777		40,190			(54,967	)		41,653
Retained earnings		1,256,692			1,261,798		1,737,011			(2,998,809	)		1,256,692

		2,427,485			1,427,600		3,614,239			(5,041,839	)		2,427,485
Treasury stock		(235,878	)										(235,878	)

Total shareholders’ equity		2,191,607			1,427,600		3,614,239			(5,041,839	)		2,191,607

Total liabilities and shareholders’ equity	$	2,620,305		$	4,344,091	$	10,848,545		$	(7,930,378	)	$	9,882,563

AmeriCredit Corp.

Consolidating Balance Sheet

June 30, 2004

(in Thousands)


	AmeriCredit Corp.			Guarantors			Non- Guarantors		Eliminations			Consolidated
ASSETS
Cash and cash equivalents				$	421,450							$	421,450
Finance receivables, net					81,167		$	6,282,702					6,363,869
Interest-only receivables from Trusts					38			110,914					110,952
Investments in Trust receivables					6,683			521,662					528,345
Restricted cash - gain on sale Trusts					3,538			419,487					423,025
Restricted cash - securitization notes payable								482,724					482,724
Restricted cash - warehouse credit facilities								209,875					209,875
Property and equipment, net	$	349			101,073			2					101,424
Other assets		8,894			136,863			44,270	$	(7,112	)		182,915
Due from affiliates		1,406,204						2,143,179		(3,549,383	)
Investment in affiliates		1,141,763			4,061,116			204,281		(5,407,160	)

Total assets	$	2,557,210		$	4,811,928		$	10,419,096	$	(8,963,655	)	$	8,824,579

LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Warehouse credit facilities							$	500,000				$	500,000
Securitization notes payable								5,646,952	$	(48,220	)		5,598,732
Senior notes	$	166,414											166,414
Convertible senior notes		200,000											200,000
Other notes payable		19,385		$	2,057								21,442
Funding payable					36,438			835					37,273
Accrued taxes and expenses		17,938			110,947			38,025		(7,112	)		159,798
Derivative financial instruments					12,250			98					12,348
Due to affiliates					3,523,591					(3,523,591	)
Deferred income taxes		28,361			(28,892	)		3,991					3,460

Total liabilities		432,098			3,656,391			6,189,901		(3,578,923	)		6,699,467

Shareholders’ equity:
Common stock		1,628			37,719			92,166		(129,885	)		1,628
Additional paid-in capital		1,081,079			41,750			2,578,911		(2,620,661	)		1,081,079
Accumulated other comprehensive income		36,823			8,476			38,211		(46,687	)		36,823
Retained earnings		1,047,725			1,067,592			1,519,907		(2,587,499	)		1,047,725

		2,167,255			1,155,537			4,229,195		(5,384,732	)		2,167,255
Treasury stock		(42,143	)										(42,143	)

Total shareholders’ equity		2,125,112			1,155,537			4,229,195		(5,384,732	)		2,125,112

Total liabilities and shareholders’ equity	$	2,557,210		$	4,811,928		$	10,419,096	$	(8,963,655	)	$	8,824,579

AmeriCredit Corp.

Consolidating Statement of Income

Three Months Ended March 31, 2005

(Unaudited, in Thousands)


	AmeriCredit Corp.		Guarantors			Non- Guarantors		Eliminations			Consolidated
Revenue
Finance charge income			$	28,638		$	283,231				$	311,869
Servicing income				24,172			20,658					44,830
Other income	$	25,223		366,348			812,554	$	(1,188,900	)		15,225
Equity in income of affiliates		66,042		102,493					(168,535	)

		91,265		521,651			1,116,443		(1,357,435	)		371,924

Costs and expenses
Operating expenses		4,649		30,482			45,679					80,810
Provision for loan losses				28,879			76,127					105,006
Interest expense		5,545		415,025			833,358		(1,188,900	)		65,028
Restructuring charges				2,130								2,130

		10,194		476,516			955,164		(1,188,900	)		252,974

Income before income taxes		81,071		45,135			161,279		(168,535	)		118,950

Income tax provision (benefit)		5,478		(20,907	)		58,786					43,357

Net income	$	75,593	$	66,042		$	102,493	$	(168,535	)	$	75,593

AmeriCredit Corp.

Consolidating Statement of Income

Three Months Ended March 31, 2004

(Unaudited, in Thousands)


	AmeriCredit Corp.		Guarantors			Non- Guarantors		Eliminations			Consolidated
Revenue
Finance charge income			$	21,273		$	214,200				$	235,473
Servicing income				48,148			21,280					69,428
Other income	$	16,727		195,305			438,393	$	(641,981	)		8,444
Equity in income of affiliates		61,272		32,851					(94,123	)

		77,999		297,577			673,873		(736,104	)		313,345

Costs and expenses
Operating expenses		3,125		33,617			51,824					88,566
Provision for loan losses				(53,857	)		117,785					63,928
Interest expense		9,526		236,829			451,491		(641,981	)		55,865
Restructuring charges				2,481								2,481

		12,651		219,070			621,100		(641,981	)		210,840

Income before income taxes		65,348		78,507			52,773		(94,123	)		102,505

Income tax provision		1,538		17,235			19,922					38,695

Net income	$	63,810	$	61,272		$	32,851	$	(94,123	)	$	63,810

AmeriCredit Corp.

Consolidating Statement of Income

Nine Months Ended March 31, 2005

(Unaudited, in Thousands)


	AmeriCredit Corp.		Guarantors			Non- Guarantors		Eliminations			Consolidated
Revenue
Finance charge income			$	67,770		$	805,702				$	873,472
Servicing income				79,857			64,702					144,559
Other income	$	51,959		781,643			1,630,705	$	(2,425,691	)		38,616
Equity in income of affiliates		194,206		217,104					(411,310	)

		246,165		1,146,374			2,501,109		(2,837,001	)		1,056,647

Costs and expenses
Operating expenses		12,015		92,731			130,066					234,812
Provision for loan losses				28,640			275,279					303,919
Interest expense		16,645		841,003			1,752,563		(2,425,691	)		184,520
Restructuring charges				2,741								2,741

		28,660		965,115			2,157,908		(2,425,691	)		725,992

Income before income taxes		217,505		181,259			343,201		(411,310	)		330,655

Income tax provision (benefit)		8,538		(12,947	)		126,097					121,688

Net income	$	208,967	$	194,206		$	217,104	$	(411,310	)	$	208,967

AmeriCredit Corp.

Consolidating Statement of Income

Nine Months Ended March 31, 2004

(Unaudited, in Thousands)


	AmeriCredit Corp.		Guarantors			Non- Guarantors		Eliminations			Consolidated
Revenue
Finance charge income			$	52,655		$	619,604				$	672,259
Servicing income				156,567			29,812					186,379
Other income	$	43,372		502,580			1,237,967	$	(1,759,483	)		24,436
Equity in income of affiliates		139,977		163,354					(303,331	)

		183,349		875,156			1,887,383		(2,062,814	)		883,074

Costs and expenses
Operating expenses		7,886		151,847			98,157					257,890
Provision for loan losses				(7,323	)		196,850					189,527
Interest expense		28,537		601,882			1,329,960		(1,759,483	)		200,896
Restructuring charges				2,949								2,949

		36,423		749,355			1,624,967		(1,759,483	)		651,262

Income before income taxes		146,926		125,801			262,416		(303,331	)		231,812

Income tax provision (benefit)		2,623		(14,176	)		99,062					87,509

Net income	$	144,303	$	139,977		$	163,354	$	(303,331	)	$	144,303

AmeriCredit Corp.

Consolidating Statement of Cash Flows

Nine Months Ended March 31, 2005

(Unaudited, in Thousands)


	AmeriCredit Corp.			Guarantors			Non- Guarantors			Eliminations			Consolidated
Cash flows from operating activities:
Net income	$	208,967		$	194,206		$	217,104		$	(411,310	)	$	208,967
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization		1,832			14,090			12,423						28,345
Provision for loan losses					28,640			275,279						303,919
Deferred income taxes		269,195			24,019			(286,022	)					7,192
Accretion of present value discount					7,707			(71,080	)					(63,373	)
Impairment of credit enhancement assets								1,122						1,122
Other		6,143			(1,861	)		(9,561	)					(5,279	)
Distributions from gain on sale Trusts, net of swap payments					449			344,857						345,306
Equity in income of affiliates		(194,206	)		(217,104	)					411,310
Changes in assets and liabilities:
Other assets		963			(17,866	)		13,037						(3,866	)
Accrued taxes and expenses		40,545			(79,081	)		7,626						(30,910	)

Net cash provided by (used in) operating activities		333,439			(46,801	)		504,785						791,423

Cash flows from investing activities:
Purchases of receivables					(3,863,935	)		(3,828,653	)		3,828,653			(3,863,935	)
Principal collections and recoveries on receivables					40,528			2,265,787						2,306,315
Net proceeds from sale of receivables					3,828,653						(3,828,653	)
Purchases of property and equipment		(6,614	)		106			1						(6,507	)
Change in restricted cash - securitization notes payable								(72,973	)					(72,973	)
Change in restricted cash - warehouse credit facilities								143,707						143,707
Change in other assets					26,751									26,751
Net change in investment in affiliates		7,629			884,515			(131,712	)		(760,432	)

Net cash provided by (used in) investing activities		1,015			916,618			(1,623,843	)		(760,432	)		(1,466,642	)

Cash flows from financing activities:
Net change in warehouse credit facilities								761,257						761,257
Issuance of securitization notes								2,450,000						2,450,000
Payments on securitization notes								(2,182,803	)					(2,182,803	)
Debt issuance costs		(75	)		(767	)		(13,804	)					(14,646	)
Net change in notes payable		(10,903	)		(720	)								(11,623	)
Repurchase of common stock		(200,894	)											(200,894	)
Net proceeds from issuance of common stock		30,780			33,920			(772,500	)		738,580			30,780
Net change in due (to) from affiliates		(162,301	)		(747,154	)		879,266			30,189

Net cash (used in) provided by financing activities		(343,393	)		(714,721	)		1,121,416			768,769			832,071

Net (decrease) increase in cash and cash equivalents		(8,939	)		155,096			2,358			8,337			156,852
Effect of Canadian exchange rate changes on cash and cash equivalents		8,939			1,084			9			(8,337	)		1,695
Cash and cash equivalents at beginning of period					421,450									421,450

Cash and cash equivalents at end of period	$			$	577,630		$	2,367		$			$	579,997

AmeriCredit Corp.

Consolidating Statement of Cash Flows

Nine Months Ended March 31, 2004

(Unaudited, in Thousands)


	AmeriCredit Corp.			Guarantors			Non- Guarantors			Eliminations			Consolidated
Cash flows from operating activities:
Net income	$	144,303		$	139,977		$	163,354		$	(303,331	)	$	144,303
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization		2,517			21,155			42,380						66,052
Provision for loan losses					(7,323	)		196,850						189,527
Deferred income taxes		(112,667	)		(11,898	)		93,550						(31,015	)
Accretion of present value discount					9,623			(77,306	)					(67,683	)
Impairment of credit enhancement assets					1,551			31,813						33,364
Other		(1,050	)		4,724			1,438						5,112
Distributions from gain on sale Trusts, net of swap payments					(17,135	)		265,413						248,278
Equity in income of affiliates		(139,977	)		(163,354	)					303,331
Changes in assets and liabilities:
Other assets		78,610			(136,273	)		21,505						(36,158	)
Accrued taxes and expenses		5,972			(25,509	)		11,606						(7,931	)

Net cash (used in) provided by operating activities		(22,292	)		(184,462	)		750,603						543,849

Cash flows from investing activities:
Purchases of receivables					(2,654,814	)		(2,956,632	)		2,956,632			(2,654,814	)
Principal collections and recoveries on receivables					(224,027	)		1,791,295						1,567,268
Net proceeds from sale of receivables					2,956,632						(2,956,632	)
Dividends		136			(25,919	)					25,783
Purchases of property and equipment					(2,552	)								(2,552	)
Change in restricted cash - securitization notes payable								(199,510	)					(199,510	)
Change in restricted cash - warehouse credit facilities								705,858						705,858
Change in other assets					22,971			34,023						56,994
Net change in investment in affiliates		16,973			1,288,124			(1,313,247	)		8,150

Net cash provided by (used in) investing activities		17,109			1,360,415			(1,938,213	)		33,933			(526,756	)

Cash flows from financing activities:
Net change in warehouse credit facilities								(504,952	)					(504,952	)
Repayment of whole loan purchase facility								(905,000	)					(905,000	)
Issuance of securitization notes								2,865,000						2,865,000
Payments on securitization notes								(1,387,469	)					(1,387,469	)
Issuance of convertible senior notes		200,000												200,000
Retirement of senior notes		(41,502	)											(41,502	)
Debt issuance costs		(5,017	)					(18,088	)					(23,105	)
Net change in notes payable		(9,513	)		(627	)								(10,140	)
Sale of warrants		34,441												34,441
Purchase of call options on common stock		(61,490	)											(61,490	)
Net proceeds from issuance of common stock		9,780						42,066			(42,066	)		9,780
Net change in due (to) from affiliates		(124,516	)		(977,949	)		1,091,621			10,844

Net cash provided by (used in) financing activities		2,183			(978,576	)		1,183,178			(31,222	)		175,563

Net (decrease) increase in cash and cash equivalents		(3,000	)		197,377			(4,432	)		2,711			192,656
Effect of Canadian exchange rate changes on cash and cash equivalents		3,000			(184	)		8			(2,711	)		113
Cash and cash equivalents at beginning of period					312,497			4,424						316,921

Cash and cash equivalents at end of period	$			$	509,690		$			$			$	509,690

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

GENERAL

The Company is a consumer finance company specializing in purchasing retail automobile installment sales contracts originated by franchised and select independent dealers in connection with the sale of used and new automobiles. The Company generates revenue and cash flows primarily through the purchase, retention, subsequent securitization and servicing of finance receivables. As used herein, “loans” include auto finance receivables originated by dealers and purchased by the Company. To fund the acquisition of receivables prior to securitization, the Company uses borrowings under its warehouse credit facilities. The Company earns finance charge income on the finance receivables and pays interest expense on borrowings under its warehouse credit facilities.

The Company periodically transfers receivables to securitization Trusts (“Trusts”) that, in turn, sell asset-backed securities to investors. Prior to October 1, 2002, these securitization transactions were structured as sales of finance receivables. Receivables sold under this structure are referred to herein as “gain on sale receivables.” The Company retains an interest in the securitization transactions in the form of credit enhancement assets, representing the estimated future excess cash flows expected to be received by the Company over the life of the securitization. Excess cash flows result from the difference between the finance charges received from the obligors on the receivables and the interest paid to investors in the asset-backed securities, net of credit losses and expenses.

Excess cash flows from the Trusts are initially utilized to fund credit enhancement requirements in order to attain specific credit ratings for the asset-backed securities issued by the Trusts. Once predetermined credit enhancement requirements are reached and maintained, excess cash flows are distributed to the Company. Credit enhancement requirements will increase if targeted portfolio performance ratios are exceeded (see Liquidity and Capital Resources section). In addition to excess cash flows, the Company receives monthly base servicing income of 2.25% per annum on the outstanding principal balance of domestic receivables securitized and collects other fees, such as late charges, as servicer for securitization Trusts.

The Company changed the structure of its securitization transactions beginning with transactions closed subsequent to September 30, 2002, to no longer meet the accounting criteria for sales of finance receivables. Accordingly, following a securitization, the finance receivables and the related securitization notes payable remain on the consolidated balance sheets. The Company recognizes finance charge and other income on the receivables and interest expense on the securities issued in the securitization transaction, and records a provision for loan losses to cover probable loan losses on the receivables. This change has significantly impacted the Company’s reported results of operations compared to its historical results because there is no gain on sale of receivables subsequent to September 30, 2002. Accordingly, historical results may not be indicative of the Company’s future results.

CRITICAL ACCOUNTING ESTIMATES

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions which affect the reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities as of the date of the financial statements and the amount of revenue and costs and expenses during the reporting periods. Actual results could differ from those estimates and those differences may be material. The accounting estimates that the Company believes are the most critical to understanding and evaluating the Company’s reported financial results include the following:

Gain on sale of receivables

The Company periodically transfers receivables to Trusts that, in turn, sell asset-backed securities to investors. Prior to October 1, 2002, the Company recognized a gain on the sale of receivables to the Trusts, which represented the difference between the sale proceeds to the Company, net of transaction costs, and the Company’s net carrying value of the receivables, plus the present value of the estimated future excess cash flows to be received by the Company over the life of the securitization. The Company has made assumptions in order to determine the present value of the estimated future excess cash flows to be generated by the pool of receivables sold. The most significant assumptions made are the cumulative credit losses to be incurred on the pool of receivables sold, the timing of those losses and the rate at which the estimated future excess cash flows are discounted.

Credit Enhancement Assets

The Company’s credit enhancement assets, which represent retained interests in securitization Trusts accounted for as sales, are recorded at fair value. Because market prices are not readily available for the credit enhancement assets, fair value is determined using discounted cash flow models. The most significant assumptions made are the cumulative net credit losses to be incurred on the pool of receivables sold, the timing of those losses and the rate at which estimated future excess cash flows are discounted. The assumptions used represent the Company’s best estimates. The assumptions may change in future periods due to changes in the economy that may impact the performance of the Company’s finance receivables and the risk profiles of its credit enhancement assets. The use of different assumptions would result in different carrying values for the Company’s credit enhancement assets and may change the amount of accretion of present value discount and impairment of credit enhancement assets recognized through the consolidated statements of income. An immediate 10% and 20% adverse change in the assumptions used to measure the fair value of credit enhancement assets would decrease the credit enhancement assets as of March 31, 2005, as follows (in thousands):


Impact on fair value of	10% adverse change		20% adverse change
Expected cumulative net credit losses	$	11,340	$	22,352
Discount rate		4,528		9,009

The adverse changes to the key assumptions and estimates are hypothetical. The change in fair value based on the above variations in assumptions cannot be extrapolated because the relationship of the change in assumption to the change in fair value may not be linear. Also, in this table, the effect of a variation in a particular assumption on fair value is calculated independently from any change in another assumption. In reality, changes in one factor may contribute to changes in another, which might magnify or counteract the sensitivities. Furthermore, due to potential changes in current economic conditions, the estimated fair values as disclosed should not be considered indicative of the future performance of these assets. The sensitivities do not reflect actions management might take to offset the impact of any adverse change.

Allowance for loan losses

The allowance for loan losses is established systematically based on the determination of the amount of probable credit losses inherent in the finance receivables as of the reporting date. The Company reviews charge-off experience factors, delinquency reports, historical collection rates, estimates of the value of the underlying collateral, economic trends, such as unemployment rates, and other information in order to make the necessary judgments as to the probable credit losses. The Company also uses historical charge-off experience to determine a loss confirmation period, which is defined as the time between when an event, such as delinquency status, giving rise to a probable credit loss occurs with respect to a specific account and when such account is charged off. This loss confirmation period is applied to the forecasted probable credit losses to determine the amount of losses inherent in finance receivables at the reporting date. Assumptions regarding credit losses and loss confirmation periods are reviewed periodically and may be impacted by actual performance of finance receivables and changes in any of the factors discussed above. Should the credit loss assumption or loss confirmation period increase, there could be an increase in the amount of allowance for loan losses required, which could decrease the net carrying value of finance receivables and increase the amount of provision for loan losses recorded on the consolidated statements of income. A 10% and 20% increase in cumulative credit losses over the loss confirmation period would increase the allowance for loan losses as of March 31, 2005, as follows (in thousands):


	10% adverse change		20% adverse change
Impact on allowance for loan losses	$	48,835	$	97,669

The Company believes that the allowance for loan losses is adequate to cover probable losses inherent in its receivables; however, because the allowance for loan losses is based on estimates, there can be no assurance that the ultimate charge-off amount will not exceed such estimates.

Stock-based employee compensation

On July 1, 2003, the Company adopted the fair value recognition provisions of Statement of Financial Standards No. 123, “Accounting for Stock-Based Compensation” (“SFAS 123”), prospectively for all awards granted or modified subsequent to June 30, 2003. The fair value of each option granted or modified during the three and nine months ended March 31, 2005 and 2004, was estimated using an option-pricing model based on the following weighted average assumptions:


	Three Months Ended March 31,				Nine Months Ended March 31,
	2005		2004		2005		2004
Expected dividends	0		0		0		0
Expected volatility	62.4	%	102.4	%	55.6	%	104.2	%
Risk-free interest rate	3.5	%	1.2	%	3.1	%	1.7	%
Expected life	3.4 years		0.7 year		2.9 years		1.8 years

Assumptions are reviewed each time there is a new grant or modification of a previous grant and may be impacted by actual fluctuation in the Company’s stock price, movements in market interest rates and option terms. The use of different assumptions produces a different fair value for the options granted or modified and impacts the amount of compensation expense recognized on the consolidated statements of income. The impact of a 10% or 20% increase in the Company’s assumptions of volatility, risk-free interest rate and expected life on the amount of compensation expense recognized would not have been material for the three or nine months ended March 31, 2005 or 2004.

RESULTS OF OPERATIONS

Three Months Ended March 31, 2005 as compared to Three Months Ended March 31, 2004

Revenue:

A summary of changes in the Company’s finance receivables is as follows (in thousands):


	Three Months Ended March 31,
	2005			2004
Balance at beginning of period	$	7,622,551		$	5,972,437
Loans purchased		1,374,012			953,806
Loans repurchased from gain on sale Trusts		60,184			127,331
Liquidations and other		(931,711	)		(640,139	)

Balance at end of period	$	8,125,036		$	6,413,435

Average finance receivables	$	7,839,932		$	6,103,563

The Company has enhanced staffing in its branch office network in order to support new loan growth, resulting in an increase in loans purchased during the three months ended March 31, 2005, as compared to the three months ended March 31, 2004. The increase in liquidations and other resulted primarily from increased collections and charge-offs on finance receivables due to the increase in average finance receivables and average age, or seasoning, of the portfolio. As of March 31, 2005 and 2004, the Company operated 89 auto lending branch offices.

The average new loan size was $16,724 for the three months ended March 31, 2005, compared to $16,062 for the three months ended March 31, 2004. The average annual percentage rate for finance receivables purchased during the three months ended March 31, 2005, was 16.6%, compared to 16.4% during the three months ended March 31, 2004.

Finance charge income increased by 32% to $311.9 million for the three months ended March 31, 2005, from $235.5 million for the three months ended March 31, 2004, primarily due to the increase in average finance receivables. The Company’s effective yield on its finance receivables increased to 16.1% for the three months ended March 31, 2005, from 15.5% for the three months ended March 31, 2004. The effective yield represents finance charges and fees taken into earnings during the period as a percentage of average finance receivables and is lower than the contractual rates of the Company’s auto finance contracts due to finance receivables in nonaccrual status. The increase in the effective yield is primarily due to the accretion of acquisition fees on loans acquired subsequent to June 30, 2004.

Servicing income consists of the following (in thousands):


	Three Months Ended March 31,
	2005		2004
Servicing fees	$	23,127	$	45,051
Other-than-temporary impairment				(1,795	)
Accretion		21,703		26,172

	$	44,830	$	69,428

Average gain on sale receivables	$	3,184,145	$	6,543,472

Servicing fees are earned from servicing domestic finance receivables sold to gain on sale Trusts. Servicing fees decreased as a result of the decrease in average gain on sale receivables caused by the change in the Company’s securitization transaction structure from gain on sale to secured financing. Servicing fees were 2.9% and 2.8%, annualized, of average gain on sale receivables for the three months ended March 31, 2005 and 2004, respectively.

Other-than-temporary impairment of $1.8 million for the three months ended March 31, 2004, resulted from higher than forecasted default rates in certain gain on sale Trusts.

The present value discount related to the Company’s credit enhancement assets represents the risk-adjusted time value of money on estimated cash flows. The present value discount on credit enhancement assets is accreted into earnings over the life of the credit enhancement assets using the effective interest method. Additionally, unrealized gains on credit enhancement assets reflected in accumulated other comprehensive income are also accreted into earnings over the life of the credit enhancement assets using the effective interest method. The Company recognized accretion of $21.7 million, or 11.0%, on an annualized basis, of average credit enhancement assets, and $26.2 million, or 8.6%, on an annualized basis, of average credit enhancement assets, during the three months ended March 31, 2005 and 2004, respectively. The Company does not record accretion in a period when such accretion would cause an other-than-temporary impairment in a securitization pool. Accretion as an annualized percentage of average credit enhancements was higher during the three months ended March 31, 2005, as compared to the three months ended March 31, 2004, resulting from fewer securitization transactions incurring other-than-temporary impairments during the three months ended March 31, 2005.

Other income was $15.2 million for the three months ended March 31, 2005, compared to $8.4 million for the three months ended March 31, 2004. The increase in other income is primarily due to an increase in investment income and in late fees and other fees associated with higher average finance receivables.

Costs and Expenses:

Operating expenses decreased to $80.8 million for the three months ended March 31, 2005, from $88.6 million for the three months ended March 31, 2004. Operating expenses declined primarily as a result of lower costs to service a declining portfolio, partially offset by increased costs to support greater loan origination volume.

Provisions for loan losses are charged to income to bring the Company’s allowance for loan losses to a level which management considers adequate to absorb probable credit losses inherent in the portfolio of finance receivables. The provision for loan losses recorded for the three months ended March 31, 2005 and 2004, reflected inherent losses on receivables originated during those periods and changes in the amount of inherent losses on receivables originated in prior periods. The provision for loan losses increased to $105.0 million for the three months ended March 31, 2005, from $63.9 million for the three months ended March 31, 2004. As an annualized percentage of average finance receivables, the provision for loan losses was 5.4% and 4.2% for the three months ended March 31, 2005 and 2004, respectively. The provision for loan losses as a percentage of average finance receivables was higher for the three months ended March 31, 2005, as compared to the three months ended March 31, 2004, due to the Company’s adoption of Statement of Position 03-3, “Accounting for Certain Loans on Debt Securities Acquired in a Transfer” (“SOP 03-3”), for loans acquired subsequent to June 30, 2004. Under SOP 03-3, dealer acquisition fees on loans purchased by the Company are no longer considered credit related because there is no deterioration in credit quality between the time the loan is originated and when it is acquired. Accordingly, dealer acquisition fees reduce the carrying value of finance receivables and are accreted into earnings as an adjustment to yield over the life of the loans, instead of being used to cover losses inherent in the portfolio. This change resulted in a higher provision for loan losses in order to maintain an appropriate level of allowance for loan losses.

Interest expense increased to $65.0 million for the three months ended March 31, 2005, from $55.9 million for the three months ended March 31, 2004. Average debt outstanding was $7,041.7 million and $5,736.0 million for the three months ended March 31, 2005 and 2004, respectively. The Company’s effective rate of interest paid on its debt decreased to 3.7% from 3.9% resulting from a reduction in fees on the Company’s warehouse credit facilities during the three months ended March 31, 2005, as compared to the three months ended March 31, 2004.

The Company’s effective income tax rate was 36.4% and 37.8% for the three months ended March 31, 2005 and 2004, respectively. The decrease in the Company’s effective income tax rate resulted from a change in the mix of business due to organizational restructuring, other changes that reduced federal and state tax exposures and the cumulative impact of these changes in the estimated annual tax rate.

Other Comprehensive Income:

Other comprehensive income consisted of the following (in thousands):


	Three Months Ended March 31,
	2005			2004
Unrealized gains on credit enhancement assets	$	8,748		$	10,969
Unrealized gains (losses) on cash flow hedges		7,996			(4,908	)
Canadian currency translation adjustment		(580	)		(965	)
Income tax provision		(6,103	)		(2,288	)

	$	10,061		$	2,808

Credit Enhancement Assets

Unrealized gains on credit enhancement assets consisted of the following (in thousands):


	Three Months Ended March 31,
	2005			2004
Unrealized gains related to changes in credit loss assumptions	$	9,505		$	19,027
Unrealized gains (losses) related to changes in interest rates		594			(5,009	)
Reclassification of unrealized gains into earnings through accretion		(1,351	)		(3,049	)

	$	8,748		$	10,969

Changes in the fair value of credit enhancement assets as a result of modifications to the credit loss assumptions are reported as unrealized gains in other comprehensive income (loss) until realized. Unrealized losses are reported as a reduction in unrealized gains to the extent that there are unrealized gains. If there are no unrealized gains to offset the unrealized losses, the losses are considered to be other-than-temporary and are charged to operations. The cumulative credit loss assumptions used to estimate the fair value of credit enhancement assets are periodically reviewed by the Company and modified to reflect the actual credit performance for each securitization pool through the reporting date as well as estimates of future losses considering several factors including changes in the general economy. Differences between cumulative credit loss assumptions used in individual securitization pools can be attributed to the original credit attributes of a pool, actual credit performance through the reporting date and pool seasoning to the extent that changes in economic trends will have more of an impact on the expected future performance of less seasoned pools.

The Company changed the cumulative credit loss assumptions used in measuring the fair value of credit enhancement assets to a range of 12.5% to 15.1% as of March 31, 2005, from a range of 12.8% to 15.0% as of December 31, 2004. For the three months ended March 31, 2005, on a Trust by Trust basis, certain Trusts experienced better than expected credit performance and decreased cumulative credit loss assumptions, while other Trusts experienced worse than expected credit performance and increased cumulative credit loss assumptions, resulting in the recognition of net unrealized gains of $9.5 million. The Company changed the cumulative credit loss assumptions used in measuring the fair value of credit enhancement assets to a range of 13.1% to 15.0% as of March 31, 2004, from a range of 13.2% to 14.9% as of December 31, 2003. For the three months ended March 31, 2004, on a Trust by Trust basis, certain Trusts experienced better than expected credit performance and decreased cumulative credit loss assumptions that resulted in the recognition of unrealized gains of $19.0 million, while other Trusts experienced worse than expected credit performance and increased cumulative credit loss assumptions resulting in the recognition of other-than-temporary impairment of $1.8 million.

Unrealized gains related to changes in interest rates of $0.6 million for the three months ended March 31, 2005, resulted primarily from an increase in estimated future cash flows to be generated by investment income earned on the restricted cash and Trust collection accounts due to an increase in forward interest rate expectations. Unrealized losses related to changes in interest rates of $5.0 million for the three months ended March 31, 2004, resulted primarily from a decrease in estimated future cash flows to be generated by investment income earned on the restricted cash and Trust collection accounts due to a decrease in forward interest rate expectations.

Net unrealized gains of $1.4 million and $3.0 million were reclassified into earnings through accretion during the three months ended March 31, 2005 and 2004, respectively, and relate primarily to the recognition of actual excess cash collected over the Company’s prior estimate.

Cash Flow Hedges

Unrealized gains (losses) on cash flow hedges consisted of the following (in thousands):


	Three Months Ended March 31,
	2005		2004
Unrealized gains (losses) related to changes in fair value	$	7,934	$	(10,032	)
Reclassification of net unrealized losses into earnings		62		5,124

	$	7,996	$	(4,908	)

Unrealized gains (losses) related to changes in fair value for the three months ended March 31, 2005 and 2004, were primarily due to changes in the fair value of interest rate swap agreements, including the interest rate swap agreements executed in January 2005 related to the Company’s medium term note facility, that were designated as cash flow hedges for accounting purposes. The fair values of the interest rate swap agreements fluctuate based upon changes in forward interest rate expectations.

Unrealized gains or losses on cash flow hedges of the Company’s credit enhancement assets are reclassified into earnings when unrealized gains or losses related to interest rate fluctuations on the Company’s credit enhancement assets are reclassified. However, if the Company expects that the continued reporting of a loss in accumulated other comprehensive income would lead to recognizing a net loss on the combination of the interest rate swap agreements and the credit enhancement assets, the loss is reclassified to earnings for the amount that is not expected to be recovered. Unrealized gains or losses on cash flow hedges of the Company’s floating rate debt are reclassified into earnings when interest rate fluctuations on securitization notes payable or other hedged items affect earnings.

Canadian Currency Translation Adjustment

Canadian currency translation adjustment losses of $0.6 million and $1.0 million for the three months ended March 31, 2005 and 2004, respectively, were included in other comprehensive income. The translation adjustment is due to the change in the value of the Company’s Canadian dollar denominated assets related to the change in the U.S. dollar to Canadian dollar conversion rates during the three months ended March 31, 2005 and 2004. The Company does not anticipate the settlement of intercompany transactions with its Canadian subsidiaries in the foreseeable future.

Net Margin:

Net margin is the difference between finance charge and other income earned on the Company’s receivables and the cost to fund the receivables as well as the cost of debt incurred for general corporate purposes.

The Company’s net margin as reflected on the consolidated statements of income is as follows (in thousands):


	Three Months Ended March 31,
	2005			2004
Finance charge income	$	311,869		$	235,473
Other income		15,225			8,444
Interest expense		(65,028	)		(55,865	)

Net margin	$	262,066		$	188,052

Net margin as a percentage of average finance receivables is as follows:


	Three Months Ended March 31,
	2005		2004
Finance charge income	16.1	%	15.5	%
Other income	0.8		0.6
Interest expense	(3.3	)	(3.7	)

Net margin as a percentage of average finance receivables	13.6	%	12.4	%

The Company evaluates the profitability of its lending activities based partly upon the net margin related to its managed auto loan portfolio, including finance receivables and gain on sale receivables. The Company uses this information to analyze trends in the components of the profitability of its managed auto portfolio. Analysis of net margin on a managed basis allows the Company to determine which origination channels and loan products are most profitable, guides the Company in making pricing decisions for loan products and indicates if sufficient spread exists between the Company’s revenues and cost of funds to cover operating expenses and achieve corporate profitability objectives. Additionally, net margin on a managed basis facilitates comparisons of results between the Company and other finance companies (i) that do not securitize their receivables or (ii) due to the structure of their securitization transactions, are not required to account for the securitization of their receivables as a sale.

The Company routinely securitizes its receivables and prior to October 1, 2002, recorded a gain on the sale of such receivables. The net margin on a managed basis presented below assumes that all securitized receivables have not been sold and are still on the Company’s consolidated balance sheets. Accordingly, no servicing income would have been recognized. Instead, finance charges would be recognized over the life of the securitized receivables as earned, and interest and other costs related to the asset-backed securities would be recognized as incurred.

Average managed receivables consists of finance receivables held by the Company and finance receivables sold to the Company’s securitization Trusts in transactions accounted for as sales. The Company’s average managed receivables outstanding are as follows (in thousands):


	Three Months Ended March 31,
	2005		2004
Finance receivables	$	7,839,932	$	6,103,563
Gain on sale receivables		3,184,145		6,543,472

Average managed receivables	$	11,024,077	$	12,647,035

Average managed receivables outstanding decreased by 13% because collections and other liquidations of the Company’s finance receivables have exceeded new loan purchase volume.

Net margin for the Company’s managed finance receivables portfolio is as follows (in thousands):


	Three Months Ended March 31,
	2005			2004
Finance charge income	$	462,250		$	529,834
Other income		24,258			18,460
Interest expense		(103,896	)		(136,294	)

Net margin	$	382,612		$	412,000

Net margin as a percentage of average managed finance receivables is as follows:


	Three Months Ended March 31,
	2005		2004
Finance charge income	17.0	%	16.8	%
Other income	0.9		0.6
Interest expense	(3.8	)	(4.3	)

Net margin as a percentage of average managed finance receivables	14.1	%	13.1	%

Net margin as a percentage of average managed finance receivables increased for the three months ended March 31, 2005, compared to the three months ended March 31, 2004, primarily due to lower delinquencies which resulted in higher earning assets and due to lower cost of funds from lower balance sheet leverage during the period.

The following is a reconciliation of finance charge income as reflected on the Company’s consolidated statements of income to the Company’s managed basis finance charge income:


	Three Months Ended March 31,
	2005		2004
Finance charge income per consolidated statements of income	$	311,869	$	235,473
Adjustments to reflect finance charge income earned on receivables in gain on sale Trusts		150,381		294,361

Managed basis finance charge income	$	462,250	$	529,834

The following is a reconciliation of other income as reflected on the Company’s consolidated statements of income to the Company’s managed basis other income:


	Three Months Ended March 31,
	2005		2004
Other income per consolidated statements of income	$	15,225	$	8,444
Adjustments to reflect investment income earned on cash in gain on sale Trusts		3,900		1,979
Adjustments to reflect other fees earned on receivables in gain on sale Trusts		5,133		8,037

Managed basis other income	$	24,258	$	18,460

The following is a reconciliation of interest expense as reflected on the Company’s consolidated statements of income to the Company’s managed basis interest expense:


	Three Months Ended March 31,
	2005		2004
Interest expense per consolidated statements of income	$	65,028	$	55,865
Adjustments to reflect interest expense incurred by gain on sale Trusts		38,868		80,429

Managed basis interest expense	$	103,896	$	136,294

Nine Months Ended March 31, 2005 as compared to Nine Months Ended March 31, 2004

Revenue:

A summary of changes in the Company’s finance receivables is as follows (in thousands):


	Nine Months Ended March 31,
	2005			2004
Balance at beginning of period	$	6,782,280		$	5,326,314
Loans purchased		3,579,050			2,398,923
Loans repurchased from gain on sale Trusts		329,435			400,262
Liquidations and other		(2,565,729	)		(1,712,064	)

Balance at end of period	$	8,125,036		$	6,413,435

Average finance receivables	$	7,392,920		$	5,819,220

The Company has enhanced staffing in its branch office network in order to support new loan growth, resulting in an increase in loans purchased during the nine months ended March 31, 2005, as compared to the nine months ended March 31, 2004. The increase in liquidations and other resulted primarily from increased collections and charge-offs on finance receivables due to the increase in average finance receivables and average age, or seasoning, of the portfolio. As of March 31, 2005 and 2004, the Company operated 89 auto lending branch offices.

The average new loan size was $16,868 for the nine months ended March 31, 2005, compared to $16,528 for the nine months ended March 31, 2004. The average annual percentage rate for finance receivables purchased during the nine months ended March 31, 2005, was 16.4%, compared to 16.1% during the nine months ended March 31, 2004.

Finance charge income increased by 30% to $873.5 million for the nine months ended March 31, 2005, from $672.3 million for the nine months ended March 31, 2004, primarily due to the increase in average finance receivables. The Company’s effective yield on its finance receivables increased to 15.7% for the nine months ended March 31, 2005, from 15.4% for the nine months ended March 31, 2004. The effective yield represents finance charges and fees taken into earnings during the period as a percentage of average finance receivables and is lower than the contractual rates of the Company’s auto finance contracts due to finance receivables in nonaccrual status. The increase in the effective yield is primarily due to the accretion of acquisition fees on loans acquired subsequent to June 30, 2004.

Servicing income consists of the following (in thousands):


	Nine Months Ended March 31,
	2005			2004
Servicing fees	$	82,308		$	152,060
Other-than-temporary impairment		(1,122	)		(33,364	)
Accretion		63,373			67,683

	$	144,559		$	186,379

Average gain on sale receivables	$	3,935,123		$	7,708,668

Servicing fees are earned from servicing domestic finance receivables sold to gain on sale Trusts. Servicing fees decreased as a result of the decrease in average gain on sale receivables caused by the change in the Company’s securitization transaction structure from gain on sale to secured financing. Servicing fees were 2.8% and 2.6%, annualized, of average gain on sale receivables for the nine months ended March 31, 2005 and 2004, respectively.

Other-than-temporary impairment of $1.1 million and $33.4 million for the nine months ended March 31, 2005 and 2004, respectively, resulted from higher than forecasted default rates in certain gain on sale Trusts.

The present value discount related to the Company’s credit enhancement assets represents the risk-adjusted time value of money on estimated cash flows. The present value discount on credit enhancement assets is accreted into earnings over the life of the credit enhancement assets using the effective interest method. Additionally, unrealized gains on credit enhancement assets reflected in accumulated other comprehensive income are also accreted into earnings over the life of the credit enhancement assets using the effective interest method. The Company recognized accretion of $63.4 million, or 9.2%, on an annualized basis, of average credit enhancement assets, and $67.7 million, or 7.1%, on an annualized basis, of average credit enhancement assets, during the nine months ended March 31, 2005 and 2004, respectively. The Company does not record accretion in a period when such accretion would cause an other-than-temporary impairment in a securitization pool. Accretion as an annualized percentage of average credit enhancements was higher during the nine months ended March 31, 2005, as compared to the nine months ended March 31, 2004, as a result of fewer securitization transactions incurring other-than-temporary impairments during the nine months ended March 31, 2005.

Other income was $38.6 million for the nine months ended March 31, 2005, compared to $24.4 million for the nine months ended March 31, 2004. The increase in other income is primarily due to an increase in investment income and in late fees and other fees associated with higher average finance receivables.

Costs and Expenses:

Operating expenses decreased to $234.8 million for the nine months ended March 31, 2005, from $257.9 million for the nine months ended March 31, 2004. Operating expenses declined primarily as a result of lower costs to service a declining portfolio, partially offset by increased costs to support greater loan origination volume.

Provisions for loan losses are charged to income to bring the Company’s allowance for loan losses to a level which management considers adequate to absorb probable credit losses inherent in the portfolio of finance receivables. The provision for loan losses recorded for the nine months ended March 31, 2005 and 2004, reflected inherent losses on receivables originated during those periods and changes in the amount of inherent losses on receivables originated in prior periods. The provision for loan losses increased to $303.9 million for the nine months ended March 31, 2005, from $189.5 million for the nine months ended March 31, 2004. As an annualized percentage of average finance receivables, the provision for loan losses was 5.5% and 4.3% for the nine months ended March 31, 2005 and 2004, respectively. The provision for loan losses as a percentage of average finance receivables was higher for the nine months ended March 31, 2005, as compared to the nine months ended March 31, 2004, due to the Company’s adoption of Statement of Position 03-3, “Accounting for Certain Loans on Debt Securities Acquired in a Transfer” (“SOP 03-3”), for loans acquired subsequent to June 30, 2004. Under SOP 03-3, dealer acquisition fees on loans purchased by the Company are no longer considered credit related because there is no deterioration in credit quality between the time the loan is originated and when it is acquired. Accordingly, dealer acquisition fees reduce the carrying value of finance receivables and are accreted into earnings as an adjustment to yield over the life of the loans, instead of being used to cover losses inherent in the portfolio. This change resulted in a higher provision for loan losses in order to maintain an appropriate level of allowance for loan losses.

Interest expense decreased to $184.5 million for the nine months ended March 31, 2005, from $200.9 million for the nine months ended March 31, 2004. Average debt outstanding was $6,785.8 million and $5,784.7 million for the nine months ended March 31, 2005 and 2004, respectively. The Company’s effective rate of interest paid on its debt was 3.6% for the nine months ended March 31, 2005. The effective rate of interest paid on its debt for the nine months ended March 31, 2004, was 4.0%, excluding the recognition of $29.0 million of deferred debt issuance costs related to the whole loan purchase facility which was repaid in September 2003. The decrease in the effective rate, exclusive of the whole loan purchase facility related costs, resulted from a reduction in fees on the Company’s warehouse credit facilities and a greater use of less expensive funding options, such as securitizations, during the nine months ended March 31, 2005, as compared to the nine months ended March 31, 2004.

The Company’s effective income tax rate was 36.8% and 37.8% for the nine months ended March 31, 2005 and 2004, respectively. The decrease in the

Company’s effective income tax rate resulted from a change in the mix of business due to organizational restructuring and other changes that reduced federal and state tax exposures.

Other Comprehensive Income:

Other comprehensive income consisted of the following (in thousands):


	Nine Months Ended March 31,
	2005			2004
Unrealized (losses) gains on credit enhancement assets	$	(17,708	)	$	18,113
Unrealized gains on cash flow hedges		10,638			11,343
Canadian currency translation adjustment		8,937			3,000
Income tax benefit (provision)		2,963			(11,232	)

	$	4,830		$	21,224

Credit Enhancement Assets

Unrealized (losses) gains on credit enhancement assets consisted of the following (in thousands):


	Nine Months Ended March 31,
	2005			2004
Unrealized (losses) gains related to changes in credit loss assumptions	$	(8,141	)	$	26,437
Unrealized gains (losses) related to changes in interest rates		309			(1,684	)
Reclassification of unrealized gains into earnings through accretion		(9,876	)		(6,640	)

	$	(17,708	)	$	18,113

pool, actual credit performance through the reporting date and pool seasoning to the extent that changes in economic trends will have more of an impact on the expected future performance of less seasoned pools.

The Company changed the cumulative credit loss assumptions used in measuring the fair value of credit enhancement assets to a range of 12.5% to 15.1% as of March 31, 2005, from a range of 12.4% to 14.9% as of June 30, 2004. The Company increased the cumulative credit loss assumptions used in measuring the fair value of credit enhancement assets to a range of 13.1% to 15.0% as of March 31, 2004, from a range of 11.3% to 14.7% as of June 30, 2003. For the nine months ended March 31, 2005, on a Trust by Trust basis, certain Trusts experienced worse than expected credit performance and increased cumulative credit loss assumptions the net impact of which resulted in the recognition of unrealized losses of $8.1 million and, for certain trusts, other-than-temporary impairment of $1.1 million. For the nine months ended March 31, 2004, certain Trusts experienced better than expected credit performance and decreased cumulative credit loss assumptions resulting in the recognition of unrealized gains of $26.4 million for those securitization Trusts, while other Trusts experienced worse than expected credit performance and increased cumulative credit loss assumptions, resulting in the recognition of other-than-temporary impairment of $33.4 million.

Unrealized gains related to changes in interest rates of $0.3 million for the nine months ended March 31, 2005, resulted primarily from an increase in estimated future cash flows to be generated from investment income earned on the restricted cash and Trust collection accounts due to an increase in forward interest rate expectations. Unrealized losses related to changes in interest rates of $1.7 million for the nine months ended March 31, 2004, resulted primarily from a decline in estimated future cash flows to be generated from investment income earned on the restricted cash and Trust collection accounts due to a decrease in forward interest rate expectations.

Net unrealized gains of $9.9 million and $6.6 million were reclassified into earnings through accretion during the nine months ended March 31, 2005 and 2004, respectively, and relate primarily to the recognition of actual excess cash collected over the Company’s prior estimate.

Cash Flow Hedges

Unrealized gains on cash flow hedges consisted of the following (in thousands):


	Nine Months Ended March 31,
	2005		2004
Unrealized gains related to changes in fair value	$	6,490	$	646
Reclassification of unrealized losses into earnings		4,148		10,697

	$	10,638	$	11,343

Unrealized gains related to changes in fair value for the nine months ended March 31, 2005 and 2004, were primarily due to changes in the fair value of interest rate swap agreements, including the interest rate swap agreements executed in January 2005 related to the Company’s medium term note facility, that were designated as cash flow hedges for accounting purposes. The fair value of the interest rate swap agreements fluctuate based upon changes in forward interest rate expectations.

Canadian Currency Translation Adjustment

Canadian currency translation adjustment gains of $8.9 million and $3.0 million for the nine months ended March 31, 2005 and 2004, respectively, were included in other comprehensive income. The translation adjustment is due to the change in the value of the Company’s Canadian dollar denominated assets related to the change in the U.S. dollar to Canadian dollar conversion rates during the nine months ended March 31, 2005 and 2004. The Company does not anticipate the settlement of intercompany transactions with its Canadian subsidiaries in the foreseeable future.

Net Margin:

The Company’s net margin as reflected on the consolidated statements of income is as follows (in thousands):


	Nine Months Ended March 31,
	2005			2004
Finance charge income	$	873,472		$	672,259
Other income		38,616			24,436
Interest expense		(184,520	)		(200,896	)

Net margin	$	727,568		$	495,799

Net margin as a percentage of average finance receivables is as follows:


	Nine Months Ended March 31,
	2005		2004
Finance charge income	15.7	%	15.4	%
Other income	0.7		0.5
Interest expense	(3.3	)	(4.6	)

Net margin as a percentage of average finance receivables	13.1	%	11.3	%

The increase in net margin is due to an increase in earned acquisition fees on loans acquired subsequent to June 30, 2004, and a decline in cost of funds resulting from lower balance sheet leverage during the period. Interest expense for the nine months ended March 31, 2004, also includes the recognition of deferred debt issuance costs related to the whole loan purchase facility which was repaid in September 2003.

The Company routinely securitizes its receivables and prior to October 1, 2002, recorded a gain on the sale of such receivables. The net margin on a managed basis presented below assumes that all securitized receivables have not been sold and are still on the Company’s consolidated balance sheet. Accordingly, no servicing income would have been recognized. Instead, finance charges would be recognized over the life of the securitized receivables as earned, and interest and other costs related to the asset-backed securities would be recognized as incurred.


	Nine Months Ended March 31,
	2005		2004
Finance receivables	$	7,392,920	$	5,819,220
Gain on sale receivables		3,935,123		7,708,668

Average managed receivables	$	11,328,043	$	13,527,888

Average managed receivables outstanding decreased by 16% because collections and other liquidations of the Company’s finance receivables have exceeded new loan purchase volume.

Net margin for the Company’s managed finance receivables portfolio is as follows (in thousands):


	Nine Months Ended March 31,
	2005			2004
Finance charge income	$	1,422,067		$	1,683,940
Other income		63,036			52,427
Interest expense		(326,856	)		(484,625	)

Net margin	$	1,158,247		$	1,251,742

Net margin as a percentage of average managed finance receivables is as follows:


	Nine Months Ended March 31,
	2005		2004
Finance charge income	16.7	%	16.6	%
Other income	0.7		0.5
Interest expense	(3.8	)	(4.8	)

Net margin as a percentage of average managed finance receivables	13.6	%	12.3	%

Net margin as a percentage of average managed finance receivables increased for the nine months ended March 31, 2005, compared to the nine months ended March 31, 2004, primarily due to lower delinquencies which resulted in higher earning assets and due to lower cost of funds from lower balance sheet leverage during the period. Interest expense for the nine months ended March 31, 2004, also includes recognition of deferred debt issuance costs related to the whole loan purchase facility which was repaid in September 2003.

The following is a reconciliation of finance charge income as reflected on the Company’s consolidated statements of income to the Company’s managed basis finance charge income:


	Nine Months Ended March 31,
	2005		2004
Finance charge income per consolidated statements of income	$	873,472	$	672,259
Adjustments to reflect finance charge income earned on receivables in gain on sale Trusts		548,595		1,011,681

Managed basis finance charge income	$	1,422,067	$	1,683,940

The following is a reconciliation of other income as reflected on the Company’s consolidated statements of income to the Company’s managed basis other income:


	Nine Months Ended March 31,
	2005		2004
Other income per consolidated statements of income	$	38,616	$	24,436
Adjustments to reflect investment income earned on cash in gain on sale Trusts		9,050		5,883
Adjustments to reflect other fees earned on receivables in gain on sale Trusts		15,370		22,108

Managed basis other income	$	63,036	$	52,427

The following is a reconciliation of interest expense as reflected on the Company’s consolidated statements of income to the Company’s managed basis interest expense:


	Nine Months Ended March 31,
	2005		2004
Interest expense per consolidated statements of income	$	184,520	$	200,896
Adjustments to reflect interest expense incurred by gain on sale Trusts		142,336		283,729

Managed basis interest expense	$	326,856	$	484,625

CREDIT QUALITY

The Company provides financing in relatively high-risk markets, and, therefore, anticipates a corresponding high level of delinquencies and charge-offs.

Finance receivables on the Company’s balance sheets include receivables purchased but not yet securitized and receivables securitized by the Company after September 30, 2002. Provisions for loan losses are charged to operations in amounts sufficient to maintain the allowance for loan losses on the balance sheet at a level considered adequate to cover probable credit losses inherent in finance receivables. Historically, finance receivables were charged off to the allowance for loan losses when the Company repossessed and disposed of the automobile or the account was otherwise deemed uncollectable. During the three months ended December 31, 2003, the Company changed its charge-off policy to charge off repossessed accounts when the automobile has been repossessed and is legally available for disposition.

Prior to October 1, 2002, the Company periodically sold receivables to Trusts in securitization transactions accounted for as a sale of receivables and retained an interest in the receivables sold in the form of credit enhancement assets. Credit enhancement assets are reflected on the Company’s balance sheets at estimated fair value, calculated based upon the present value of estimated excess future cash flows from the Trusts using, among other assumptions, estimates of future credit losses on the receivables sold. Receivables sold to Trusts that are subsequently charged off decrease the amount of excess future cash flows from the Trusts. If such charge-offs are expected to exceed the Company’s estimates of cumulative credit losses or if the actual timing of these losses differs from expected timing, the fair value of credit enhancement assets is written down through an other-than-temporary impairment charge to earnings to the extent the write-down exceeds any previously recorded unrealized gain.

The following tables present certain data related to the receivables portfolio (dollars in thousands):


	March 31, 2005
	Finance Receivables			Gain on Sale		Total Managed
Principal amount of receivables, net of fees	$	8,125,036		$	2,865,723	$	10,990,759

Nonaccretable acquisition fees		(175,880	)
Allowance for loan losses		(312,465	)

Receivables, net	$	7,636,691

Number of outstanding contracts		627,502			319,762		947,264

Average carrying amount of outstanding contract (in dollars)	$	12,948		$	8,962	$	11,603

Allowance for loan losses and nonaccretable acquisition fees as a percentage of receivables		6.0	%


	June 30, 2004
	Finance Receivables			Gain on Sale		Total Managed
Principal amount of receivables, net of fees	$	6,782,280		$	5,140,522	$	11,922,802

Nonaccretable acquisition fees		(176,203	)
Allowance for loan losses		(242,208	)

Receivables, net	$	6,363,869

Number of outstanding contracts		508,517			503,154		1,011,671

Average carrying amount of outstanding contract (in dollars)	$	13,337		$	10,217	$	11,785

Allowance for loan losses and nonaccretable acquisition fees as a percentage of receivables		6.2	%

The allowance for loan losses and nonaccretable acquisition fees increased to $488.3 million, or 6.0% of finance receivables, at March 31, 2005, from $418.4 million, or 6.2% of finance receivables, at June 30, 2004. The increase in allowance for loan losses and nonaccretable acquisition fees resulted from increased finance receivables outstanding. The allowance for loan losses as a percentage of finance receivables decreased due to the expectation that favorable credit trends in the finance receivables portfolio will continue.

Delinquency

The following is a summary of managed finance receivables that are (i) more than 30 days delinquent, but not yet in repossession, and (ii) in repossession, but not yet charged off (dollars in thousands):


	March 31, 2005
	Finance Receivables				Gain on Sale				Total Managed
	Amount		Percent		Amount		Percent		Amount		Percent
Delinquent contracts:
31 to 60 days	$	304,810	3.8	%	$	234,389	8.2	%	$	539,199	4.9	%
Greater than 60 days		108,919	1.3			87,002	3.0			195,921	1.8

		413,729	5.1			321,391	11.2			735,120	6.7
In repossession		16,060	0.2			11,489	0.4			27,549	0.2

	$	429,789	5.3	%	$	332,880	11.6	%	$	762,669	6.9	%


	March 31, 2004
	Finance Receivables				Gain on Sale				Total Managed
	Amount		Percent		Amount		Percent		Amount		Percent
Delinquent contracts:
31 to 60 days	$	235,448	3.7	%	$	440,751	7.4	%	$	676,199	5.5	%
Greater than 60 days		87,720	1.3			160,897	2.7			248,617	2.0

		323,168	5.0			601,648	10.1			924,816	7.5
In repossession		17,680	0.3			31,584	0.6			49,264	0.4

	$	340,848	5.3	%	$	633,232	10.7	%	$	974,080	7.9	%

An account is considered delinquent if a substantial portion of a scheduled payment has not been received by the date such payment was contractually due. Delinquencies in the Company’s managed receivables portfolio may vary from period to period based upon the average age or seasoning of the portfolio, seasonality within the calendar year and economic factors. Due to the Company’s target customer base, a relatively high percentage of accounts become delinquent at some point in the life of a loan and there is a high rate of account movement between current and delinquent status in the portfolio.

At March 31, 2005, a greater percentage of finance receivables in the Company’s portfolio had been purchased since the implementation of a revised operating plan in February 2003 as compared to the percentage of the Company’s portfolio at March 31, 2004, that had been purchased after February 2003. The Company has experienced improved credit performance on loans originated since February 2003; accordingly, total managed finance receivables 31 to 60 days and greater-than-60 days delinquent were lower at March 31, 2005, as compared to March 31, 2004. Delinquencies in finance receivables are lower than delinquencies in gain on

sale receivables due to improved credit performance on loans originated since February 2003 as well as the relative lower overall seasoning of such finance receivables.

Deferrals

In accordance with its policies and guidelines, the Company, at times, offers payment deferrals to consumers, whereby the consumer is allowed to move up to two delinquent payments to the end of the loan generally by paying a fee (approximately the interest portion of the payment deferred). The Company’s policies and guidelines, as well as certain contractual restrictions in the Company’s warehouse credit facilities and securitization transactions, limit the number and frequency of deferments that may be granted. The Company’s policies and guidelines generally limit the granting of deferments on new accounts until a requisite number of payments have been received. Due to the nature of the Company’s customer base and policies and guidelines of the deferral program, it is estimated that approximately 50% of accounts currently comprising the managed portfolio will receive a deferral at some point in the life of the account.

An account for which all delinquent payments are deferred is classified as current at the time the deferment is granted and therefore is not included as a delinquent account. Thereafter, such account is aged based on the timely payment of future installments in the same manner as any other account.

Contracts receiving a payment deferral as an average quarterly percentage of average receivables outstanding were as follows:


	Three Months Ended March 31,				Nine Months Ended March 31,
	2005		2004		2005		2004
Finance receivables:
(As a percentage of average finance receivables)	4.8	%	4.2	%	4.9	%	4.5	%

Gain on sale receivables:
(As a percentage of average gain on sale receivables)	9.0	%	8.2	%	9.5	%	8.3	%

Total managed portfolio:
(As a percentage of average managed receivables)	6.0	%	6.3	%	6.5	%	6.6	%

The following is a summary of deferrals as a percentage of managed receivables outstanding:


	March 31, 2005
	Finance Receivables		Gain on Sale		Total Managed
Never deferred	83.0	%	43.7	%	72.8	%

Deferred:
1-2 times	14.9		40.9		21.6
3-4 times	1.9		15.2		5.4
Greater than 4 times	0.2		0.2		0.2

Total deferred	17.0		56.3		27.2

Total	100.0	%	100.0	%	100.0	%


	June 30, 2004
	Finance Receivables		Gain on Sale		Total Managed
Never deferred	85.0	%	51.0	%	70.3	%

Deferred:
1-2 times	13.7		41.4		25.7
3-4 times	1.1		7.4		3.8
Greater than 4 times	0.2		0.2		0.2

Total deferred	15.0		49.0		29.7

Total	100.0	%	100.0	%	100.0	%

The percentage of loans deferred is greater for the Company’s gain on sale receivables as compared to its finance receivables as a result of seasoning of the gain on sale receivables as well as overall improved credit performance on loans originated since the implementation of the Company’s revised operating plan in February 2003.

The Company evaluates the results of its deferment strategies based upon the amount of cash installments that are collected on accounts after they have been deferred versus the extent to which the collateral underlying the deferred accounts has depreciated over the same period of time. Based on this evaluation, the Company believes that payment deferrals granted according to its policies and guidelines are an effective portfolio management technique and result in higher ultimate cash collections from the portfolio.

Changes in deferment levels do not have a direct impact on the ultimate amount of finance receivables charged off by the Company. However, the timing of a charge-off may be affected if the previously deferred account ultimately results in a charge-off. To the extent that deferrals impact the ultimate timing of when an account is charged off, historical charge-off ratios and loss confirmation periods used in the determination of the adequacy of the Company’s allowance for loan losses are also impacted. Increased use of deferrals may result in a lengthening of the loss confirmation period, which would increase expectations of credit losses inherent in the loan portfolio and therefore

increase the allowance for loan losses and related provision for loan losses. Changes in these ratios and periods are considered in determining the appropriate level of allowance for loan losses and related provision for loan losses.

Charge-offs

The following table presents charge-off data with respect to the Company’s managed finance receivables portfolio (dollars in thousands):


	Three Months Ended March 31,						Nine Months Ended March 31,
	2005			2004			2005			2004
Finance receivables:
Repossession charge-offs	$	143,305		$	111,516		$	392,498		$	300,776
Less: Recoveries		(67,932	)		(52,387	)		(179,272	)		(139,520	)
Mandatory charge-offs (a)		3,924			4,127			35,006			41,827

Net charge-offs	$	79,297		$	63,256		$	248,232		$	203,083

Gain on sale:
Repossession charge-offs	$	117,113		$	236,243		$	432,018		$	807,051
Less: Recoveries		(48,867	)		(93,038	)		(165,577	)		(312,103	)
Mandatory charge-offs (a)		(1,097	)		785			15,603			95,349

Net charge-offs	$	67,149		$	143,990		$	282,044		$	590,297

Total managed:
Repossession charge-offs	$	260,418		$	347,759		$	824,516		$	1,107,827
Less: Recoveries		(116,799	)		(145,425	)		(344,849	)		(451,623	)
Mandatory charge-offs (a)		2,827			4,912			50,609			137,176

Net charge-offs	$	146,446		$	207,246		$	530,276		$	793,380

Net charge-offs as an annualized percentage of average receivables:
Finance receivables		4.1	%		4.2	%		4.5	%		4.6	%

Gain on sale receivables		8.6	%		8.9	%		9.5	%		10.2	%

Total managed portfolio		5.4	%		6.6	%		6.2	%		7.8	%

Net recoveries as a percentage of gross repossession charge-offs:
Finance receivables		47.4	%		47.0	%		45.7	%		46.4	%

Gain on sale receivables		41.7	%		39.4	%		38.3	%		38.7	%

Total managed portfolio		44.9	%		41.8	%		41.8	%		40.8	%

(a)

Mandatory charge-offs represent accounts 120 days delinquent that are charged-off in full with no recovery amounts realized at time of charge-off and the change during the period in the aggregate write-down of finance receivables in repossession to the net realizable value of the repossessed vehicle when the repossessed vehicle is legally available for sale.

Net charge-offs as an annualized percentage of average receivables outstanding may vary from period to period based upon the average age or seasoning of the

portfolio and economic factors. The decrease in net charge-offs for the nine months ended March 31, 2005, as compared to the nine months ended March 31, 2004, resulted primarily from improved credit performance on loans originated since the implementation of the Company’s revised operating plan in February 2003 combined with an overall improvement in recovery rates.

LIQUIDITY AND CAPITAL RESOURCES

General

The Company’s primary sources of cash are finance charge income, servicing fees, distributions from securitization Trusts, borrowings under warehouse credit facilities, transfers of finance receivables to Trusts in securitization transactions and collections and recoveries on finance receivables. The Company’s primary uses of cash are purchases of finance receivables, repayment of securitization notes payable, funding credit enhancement requirements for securitization transactions, operating expenses, income taxes and stock repurchases.

The Company used cash of $3,863.9 million and $2,654.8 million for the purchase of finance receivables during the nine months ended March 31, 2005 and 2004, respectively. These purchases were funded initially utilizing cash and warehouse credit facilities and subsequently through long-term financing in securitization transactions.

Warehouse Credit Facilities

In the normal course of business, in addition to using its available cash, the Company pledges receivables and borrows from its warehouse credit facilities to fund its operations and repays these borrowings as appropriate under its cash management strategy.

As of March 31, 2005, warehouse credit facilities consisted of the following (in millions):


Facility Type	Maturity	Facility Amount		Advances Outstanding
Commercial paper facility	November 2007 (a)(b)	$	1,950.0	$	442.5
Medium term note facility	October 2007 (a)(c)		650.0		650.0
Repurchase facility	August 2005 (a)		400.0		168.8
Near prime facility	January 2006 (a)		150.0

		$	3,150.0	$	1,261.3

(a)

At the maturity date, the outstanding debt balance can either be repaid in full or over time based on the amortization of receivables pledged.

(b)

$150.0 million of this facility matures in November 2005, and the remaining $1,800.0 million matures in November 2007.

(c)

This facility is a revolving facility through the date stated above. During the revolving period, the Company has the ability to substitute receivables for cash, or vice versa.

In October 2004, the Company terminated a $500.0 million medium term note facility and entered into a $650.0 million medium term note facility.

In January 2005, the Company entered into a $150.0 million warehouse facility to fund higher credit quality receivables.

The Company’s warehouse credit facilities contain various covenants requiring certain minimum financial ratios, asset quality, and portfolio performance ratios (cumulative net loss, delinquency and repossession ratios) as well as limits on deferment levels. Failure to meet any of these covenants could result in an event of default under these agreements. If an event of default occurs under these agreements, the lenders could elect to declare all amounts outstanding under these agreements to be immediately due and payable, enforce their interests against collateral pledged under these agreements or restrict the Company’s ability to obtain additional borrowings under these agreements. As of March 31, 2005, the Company’s warehouse credit facilities were in compliance with all covenants.

Securitizations

The Company has completed 47 securitization transactions through March 31, 2005. The proceeds from the transactions were primarily used to repay borrowings outstanding under the Company’s warehouse credit facilities.

A summary of the active transactions^(a) is as follows (in millions):


Transaction	Date	Original Amount		Balance at March 31, 2005
Gain on sale:
2001-A	February 2001	$	1,400.0	$	129.6
2001-1	April 2001		1,089.0		98.0
2001-B	July 2001		1,850.0		260.5
2001-C	September 2001		1,600.0		267.0
2001-D	October 2001		1,800.0		319.1
2002-A	February 2002		1,600.0		339.7
2002-1	April 2002		990.0		180.9
2002-A Canada (b)	May 2002		145.0		81.1
2002-B	June 2002		1,200.0		297.3
2002-C	August 2002		1,300.0		351.8
2002-D	September 2002		600.0		175.0

Total gain on sale transactions			13,574.0		2,500.0

Secured financing:
2002-E-M	October 2002		1,700.0		578.1
C2002-1 Canada (b)(c)	November 2002		137.0		37.7
2003-A-M	April 2003		1,000.0		382.6
2003-B-X	May 2003		825.0		335.7
2003-C-F	September 2003		915.0		417.3
2003-D-M	October 2003		1,200.0		598.8
2004-A-F	February 2004		750.0		414.9
2004-B-M	April 2004		900.0		554.4
2004-1 (d)	June 2004		575.0		393.2
2004-C-A	August 2004		800.0		636.7
2004-D-F	November 2004		750.0		654.4
2005-A-X	February 2005		900.0		870.3

Total secured financing transactions			10,452.0		5,874.1

Total active securitizations		$	24,026.0	$	8,374.1

(a)

Transactions originally totaling $12,440.5 million have been paid off as of March 31, 2005.

(b)

Balances at March 31, 2005, reflect fluctuations in foreign currency translation rates and principal paydowns.

(c)

Amounts do not include $24.7 million of asset-backed securities retained by the Company.

(d)

Amounts do not include $40.8 million of asset-backed securities retained by the Company.

Prior to October 1, 2002, the Company structured its securitization transactions to meet the accounting criteria for sales of finance receivables under generally accepted accounting principles in the United States of

America. The Company changed the structure of securitization transactions completed subsequent to September 30, 2002, to no longer meet the accounting criteria for sale of finance receivables. This change in securitization structure does not change the Company’s requirement to provide credit enhancement in order to attain specific credit ratings for the asset-backed securities issued by the Trusts. The Company typically makes an initial deposit to a restricted cash account and transfers finance receivables in excess of the amount of asset-backed securities issued to create initial overcollateralization. The Company subsequently uses excess cash flows generated by the Trusts to either increase the restricted cash account or repay the outstanding asset-backed securities on an accelerated basis, thereby creating additional credit enhancement through overcollateralization in the Trusts. When the credit enhancement levels reach specified percentages of the Trust’s pool of receivables, excess cash flows are distributed to the Company.

The Company employs two types of securitization structures to meet its credit enhancement requirements. The structure the Company has utilized most frequently involves the purchase of a financial guaranty policy issued by an insurer to cover the asset-backed securities as well as the use of reinsurance and other alternative credit enhancement products to reduce the required initial deposit to the restricted cash account and initial overcollateralization. However, the Company currently has no outstanding commitments to obtain reinsurance or other alternative credit enhancement products and will likely be required to provide initial credit enhancement deposits in future securitization transactions from its existing capital resources.

The Company’s second type of securitization structure involves the sale of subordinated asset-backed securities in order to provide credit enhancement for the senior asset-backed securities. The subordinated asset-backed securities replace a portion of the Company’s credit enhancement required in a securitization transaction in a manner similar to the utilization of insurance or other alternative credit enhancements described in the preceding paragraph.

The Company’s most recent securitization transactions covered by a financial guaranty insurance policy have required initial cash deposit and overcollateralization levels of 9.5% of the original receivable pool balance and target credit enhancement levels must reach 17.0% of the receivable pool balance before cash is distributed to the Company. Under this structure, the Company typically expects to begin to receive cash distributions approximately five to nine months after receivables are securitized. Securitization transactions covered by financial guaranty insurance policies completed in calendar year 2003 and much of calendar year 2004 required initial cash deposit and overcollateralization levels of 10.5% and contained target credit enhancement levels of 18.0% to 18.5%. Increases or decreases to the credit enhancement level on future securitization transactions will depend on the net interest margin and credit performance trends of the Company’s finance receivables and the Company’s financial condition.

Cash flows related to securitization transactions were as follows (in millions):


	Nine Months Ended March 31,
	2005		2004
Initial credit enhancement deposits:
Restricted cash	$	53.2	$	63.1
Overcollateralization		208.1		290.9
Distributions from Trusts, net of swap payments:
Gain on sale Trusts		345.3		248.3
Secured financing Trusts		400.2		133.4

Prior to October 2002, the financial guaranty insurance policies for all of the Company’s insured securitization transactions were provided by Financial Security Assurance, Inc. (“FSA”) and are referred to herein as the “FSA Program.” The restricted cash account for each securitization Trust insured as part of the FSA Program is cross-collateralized to the restricted cash accounts established in connection with the Company’s other securitization Trusts in the FSA Program, such that excess cash flows from FSA Program securitizations that have already met their own credit enhancement requirements may be used to fund increased minimum credit enhancement levels with respect to FSA Program securitizations in which specified portfolio performance ratios have been exceeded, rather than being distributed to the Company.

The Company’s securitization transactions insured by financial guaranty insurance providers, including FSA, since October 2002, are cross-collateralized to a more limited extent. In the event of a shortfall in the original target credit enhancement requirement for certain of these securitization Trusts after a specified period of time, excess cash flows from other transactions insured by the same insurance provider would be used to satisfy the shortfall amount. In one of the Company’s securitization transactions, if a secured party receives a notice of a rating agency review for downgrade or if there is a downgrade of any class of notes (without taking into consideration the presence of the financial guaranty insurance policy) excess cash flows from other securitization transactions insured by the same insurance provider would be utilized to satisfy any increased target enhancement requirements.

As of March 31, 2005, the Company had exceeded its targeted cumulative net loss triggers in seven of the eight remaining FSA Program securitizations and waivers were not granted by FSA. Accordingly, cash of approximately $171.6

million generated by FSA Program securitization otherwise distributable to the Company was used to fund increased credit enhancement levels for the securitizations that breached their cumulative net loss triggers. The Company expects to exceed its targeted cumulative net loss trigger on the remaining FSA Program securitization during fiscal 2005, which will require an increased credit enhancement level for such securitization. The impact of delaying and reducing the amount of cash to be released to the Company during fiscal 2005 is not expected to be material to the Company’s liquidity position.

The agreements that the Company enters into with its financial guaranty insurance providers in connection with securitization transactions contain additional specified targeted portfolio performance ratios (delinquency, cumulative default and cumulative net loss triggers) that are higher than the limits referred to above. If, at any measurement date, the targeted portfolio performance ratios with respect to any insured Trust were to exceed these additional levels, provisions of the agreements permit the financial guaranty insurance providers to terminate the Company’s servicing rights to the receivables sold to that Trust. In addition, the servicing agreements on certain insured securitization Trusts are cross-defaulted so that a default under one servicing agreement would allow the financial guaranty insurance provider to terminate the Company’s servicing rights under all servicing agreements for securitization Trusts in which they issued a financial guaranty insurance policy. Additionally, if these higher targeted portfolio performance levels were exceeded, the financial guaranty insurance providers may elect to retain all excess cash generated by other securitization transactions insured by them as additional credit enhancement. This, in turn, could result in defaults under the Company’s other securitizations and other material indebtedness. Although the Company has never exceeded these additional targeted portfolio performance ratios, and does not anticipate violating any event of default triggers for its securitizations, there can be no assurance that the Company’s servicing rights with respect to the automobile receivables in such Trusts or any other Trusts will not be terminated if (i) such targeted portfolio performance ratios are breached, (ii) the Company breaches its obligations under the servicing agreements, (iii) the financial guaranty insurance providers are required to make payments under a policy, or (iv) certain bankruptcy or insolvency events were to occur. As of March 31, 2005, no such termination events have occurred with respect to any of the Trusts formed by the Company.

Stock Repurchases

Operating Plan

The Company believes that it has sufficient liquidity to achieve its short-term growth strategies. As of March 31, 2005, the Company had unrestricted cash balances of $580.0 million. Assuming that loan purchase volume approximates $5.0 to $6.0 billion during the next twelve months and the initial credit enhancement requirement for the Company’s securitization transactions remains at 9.5%, the Company would require approximately $475.0 to $570.0 million in cash or liquidity to fund initial credit enhancement over that period. The Company expects that cash distributions from its existing securitization transactions will exceed the funding requirement for initial credit enhancement deposits during the next twelve months. The Company will continue to require the execution of additional securitization transactions during the next twelve months. There can be no assurance that funding will be available to the Company through the execution of securitization transactions or, if available, that the funding will be on acceptable terms. If the Company is unable to execute securitization transactions on a regular basis, and is otherwise unable to issue any other debt or equity, it would not have sufficient funds to finance new loan originations and, in such event, the Company would be required to revise the scale of its business, including possible discontinuation of loan origination activities, which would have a material adverse effect on the Company’s ability to achieve its business and financial objectives.

OFF-BALANCE SHEET ARRANGEMENTS

Prior to October 1, 2002, the Company structured its securitization transactions to meet the accounting criteria for sales of finance receivables. Under this structure, notes issued by the Company’s unconsolidated qualified special purpose finance subsidiaries are not recorded as liabilities on the Company’s consolidated balance sheets. See Liquidity and Capital Resources - Securitization for a detailed discussion of the Company’s securitization transactions.

INTEREST RATE RISK

Fluctuations in market interest rates impact the Company’s warehouse credit facilities and securitization transactions. The Company’s gross interest rate spread, which is the difference between interest earned on its finance receivables and interest paid, is affected by changes in interest rates as a result of the Company’s dependence upon the issuance of variable rate securities and the incurrence of variable rate debt to fund its purchases of finance receivables.

Warehouse Credit Facilities

Finance receivables purchased by the Company and pledged to secure borrowings under its warehouse credit facilities bear fixed interest rates. Amounts borrowed under the Company’s warehouse credit facilities bear interest at variable rates that are subject to frequent adjustments to reflect prevailing

market interest rates. To protect the interest rate spread within each warehouse credit facility, the Company’s special purpose finance subsidiaries are contractually required to purchase interest rate cap agreements in connection with borrowings under the Company’s warehouse credit facilities. The purchaser of the interest rate cap agreement pays a premium in return for the right to receive the difference in the interest cost at any time a specified index of market interest rates rises above the stipulated “cap” rate. However, for as long as rates remain below the stipulated “cap” rate, the purchaser of the interest rate cap agreement will not receive payments and the seller bears no obligation or liability. As part of the Company’s interest rate risk management strategy and when economically feasible, the Company may simultaneously sell a corresponding interest rate cap agreement in order to offset the premium paid by its special purpose finance subsidiary to purchase the interest rate cap agreement and thus retain the interest rate risk. The fair value of the interest rate cap agreement purchased by the special purpose finance subsidiary and the fair value of the interest rate cap agreement sold by the Company is included on the Company’s consolidated balance sheets.

Securitizations

The interest rate demanded by investors in the Company’s securitization transactions depends on prevailing market interest rates for comparable transactions and the general interest rate environment. The Company utilizes several strategies to minimize the impact of interest rate fluctuations on its gross interest rate margin, including the use of derivative financial instruments, the regular sale or pledging of auto receivables to securitization Trusts and pre-funding of securitization transactions.

In its securitization transactions, the Company transfers fixed rate finance receivables to Trusts that, in turn, sell either fixed rate or floating rate securities to investors. The fixed rates on securities issued by the Trusts are indexed to market interest rate swap spreads for transactions of similar duration or various London Interbank Offered Rates (“LIBOR”) and do not fluctuate during the term of the securitization. The floating rates on securities issued by the Trusts are indexed to LIBOR and fluctuate periodically based on movements in LIBOR. Derivative financial instruments, such as interest rate swap and cap agreements, are used to manage the gross interest rate spread on these transactions. The Company uses interest rate swap agreements to convert the variable rate exposures on floating rate securities issued by its securitization Trusts to a fixed rate, thereby (i) locking in the gross interest rate spread to be earned by the Company over the life of a securitization accounted for as a secured financing that would have been

affected by changes in interest rates or (ii) hedging the variability in future excess cash flows to be received by the Company from its credit enhancement assets over the life of a securitization accounted for as a sale that would have been attributable to interest rate risk. Interest rate swap agreements purchased by the Company do not impact the amount of cash flows to be received by holders of the asset-backed securities issued by the Trusts. The interest rate swap agreements serve to offset the impact of increased or decreased interest paid by the Trusts on floating rate asset-backed securities on the cash flows to be received by the Company from the Trusts. The Company utilizes such arrangements to modify its net interest sensitivity to levels deemed appropriate based on the Company’s risk tolerance. In circumstances where the interest rate risk is deemed to be tolerable, usually if the risk is less than one year in term at inception, the Company may choose not to hedge potential fluctuations in cash flows due to changes in interest rates. The Company’s special purpose finance subsidiaries are contractually required to provide additional credit enhancement on their floating rate securities even if the Company chooses not to hedge its future cash flows. To comply with this requirement, the special purpose finance subsidiary purchases an interest rate cap agreement. Although the interest rate cap agreements are purchased by the Trusts, cash outflows from the Trusts ultimately impact the Company’s retained interests in the securitization transactions as cash expended by the securitization Trusts will decrease the ultimate amount of cash to be received by the Company. Therefore, when economically feasible, the Company may simultaneously sell a corresponding interest rate cap agreement to offset the premium paid by the Trust to purchase the interest rate cap agreement. The intrinsic value of the interest rate cap agreements purchased by the non-consolidated special purpose finance subsidiaries is considered in the valuation of the credit enhancement assets. The fair value of the interest rate cap agreements purchased by the special purpose finance subsidiaries in connection with securitization transactions structured as secured financings and the fair value of the interest rate cap agreements sold by the Company are included on the Company’s consolidated balance sheets. Changes in the fair value of the interest rate cap agreements purchased by the special purpose finance subsidiaries in connection with securitization transactions structured as secured financings and the interest rate cap agreements sold by the Company are reflected in interest expense on the Company’s consolidated statements of income.

Pre-funding securitizations is the practice of issuing more asset-backed securities than needed to cover finance receivables initially sold or pledged to the Trust. The proceeds from the pre-funded portion are held in an escrow account until additional receivables are delivered to the Trust in amounts up to the pre-funded balance held in the escrow account. The use of pre-funded securitizations allows the Company to lock in borrowing costs with respect to the finance receivables subsequently delivered to the Trust. However, the Company incurs an expense in pre-funded securitizations during the period between the initial securitization and the subsequent delivery of finance receivables equal to the difference between the interest earned on the proceeds held in the escrow account and the interest rate paid on the asset-backed securities outstanding.

Management monitors the Company’s hedging activities to ensure that the value of derivative financial instruments, their correlation to the contracts being hedged and the amounts being hedged continue to provide effective protection against interest rate risk. However, there can be no assurance that the Company’s strategies will be effective in minimizing interest rate risk or that increases in interest rates will not have an adverse effect on the Company’s profitability. All transactions are entered into for purposes other than trading. There have been no material changes in the Company’s interest rate risk exposure since June 30, 2004.

CURRENT ACCOUNTING PRONOUNCEMENTS

Statement of Financial Accounting Standards No. 123 (revised 2004)

FORWARD LOOKING STATEMENTS

The preceding Management’s Discussion and Analysis of Financial Condition and Results of Operations section contains several “forward-looking statements.” Forward-looking statements are those that use words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “may,” “will,” “likely,” “should,” “estimate,” “continue,” “future” or other comparable expressions. These words indicate future events and trends. Forward-looking statements are the Company’s current views with respect to future events and financial performance. These forward-looking statements are subject to many assumptions, risks and uncertainties that could cause actual results to differ significantly from historical results or from those anticipated by the Company. The most significant risks are detailed from time to time in the Company’s filings and reports with the Securities and Exchange Commission including the Company’s Annual Report on Form 10-K for the year ended June 30, 2004. It is advisable not to place undue reliance on the Company’s forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Because the Company’s funding strategy is dependent upon the issuance of interest-bearing securities and the incurrence of debt, fluctuations in interest rates impact the Company’s profitability. Therefore, the Company employs various hedging strategies to minimize the risk of interest rate fluctuations. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Interest Rate Risk” for additional information regarding such market risks.

Item 4. CONTROLS AND PROCEDURES

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports it files under the Securities and Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Such controls include those designed to ensure that information for disclosure is communicated to management, including the Chairman of the Board and the Chief Executive Officer (the “CEO”), the President (the “President”) and the Chief Financial Officer (the “CFO”), as appropriate to allow timely decisions regarding required disclosure.

The CEO, President and CFO, with the participation of management, have evaluated the effectiveness of the Company’s disclosure controls and procedures as of March 31, 2005. Based on their evaluation, they have concluded, to the best of their knowledge and belief, that the disclosure controls and procedures are effective. No changes were made in the Company’s internal controls over financial reporting during the quarter ended March 31, 2005, that have materially affected, or is reasonably likely to materially affect, the Company’s internal controls over financial reporting.

Part II. OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

In fiscal 2003, several complaints were filed by shareholders against the Company and certain of the Company’s officers and directors alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. These complaints have been consolidated into one action, styled Pierce v. AmeriCredit Corp., et al., pending in the United States District Court for the Northern District of Texas, Fort Worth Division; the plaintiff in Pierce seeks class action status. In Pierce, the plaintiff claims, among other allegations, that deferments were improperly granted by the Company to avoid delinquency triggers in securitization transactions and enhance cash flows and to incorrectly report charge-offs and delinquency percentages, thereby causing the Company to misrepresent its financial performance throughout the alleged class period. The Company believes that its granting of deferments, which is a common practice within the auto finance industry, complied with the covenants contained in its securitization and warehouse financing documents, and that its deferment activities were properly disclosed to all constituents, including shareholders, asset-backed investors, creditors and credit enhancement providers.

Two shareholder derivative actions have also been served on the Company. On February 27, 2003, the Company was served with a shareholder’s derivative

action filed in the United States District Court for the Northern District of Texas, Fort Worth Division, entitled Mildred Rosenthal, derivatively and on behalf of nominal defendant AmeriCredit Corp. v. Clifton H. Morris, Jr., et al. A second shareholder derivative action was filed in the District Court of Tarrant County, Texas 48^th Judicial District, on August 19, 2003, entitled David Harris, derivatively and on behalf of nominal defendant AmeriCredit Corp. v. Clifton H. Morris, Jr., et al. Both of these shareholder derivative actions allege, among other complaints, that certain officers and directors of the Company breached their respective fiduciary duties by causing the Company to make improper deferments, violate federal and state securities laws and issue misleading financial statements. The substantive allegations in both of the derivative actions are essentially the same as those in the above-referenced consolidated class action. A special litigation committee of the Board of Directors has been created to investigate the claims in the derivative actions. As a nominal defendant, the Company does not believe that it has any ultimate liability with respect to these derivative actions.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

During the three months ended March 31, 2005, the Company repurchased shares as follows:


Date	Total Number of Shares Purchased		Average Price Paid per Share			Total Number of Shares Purchased as Part of Publicly Announced Plans or Program		Approximate Dollar of Shares That May Yet Be Purchased Under the Plans or Program
January 2005	967,451	(a)	$	23.69	(a)	967,451	(a)	$	500,761,850	(a)
February 2005	119,501	(a)	$	23.86	(a)	119,501	(a)	$	497,910,804	(a)
March 2005	1,298,050	(a)	$	23.86	(a)	1,298,050	(a)	$	466,937,130	(a)

(a)

On August 17, 2004, and January 25, 2005, the Company announced the approval of stock repurchase plans by its Board of Directors which authorized the Company to repurchase up to $100.0 million and $500.0 million, respectively, of its common stock in the open market or in privately negotiated transactions, based on market conditions.

All shares repurchased in January 2005, and 31,996 shares repurchased in February 2005, were repurchased under the August 2004 plan.

Item 3. DEFAULTS UPON SENIOR SECURITIES

Not Applicable

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not Applicable

Item 5. OTHER INFORMATION

Not Applicable

Item 6. EXHIBITS

10.1 (@) Revised Form of Stock Appreciation Rights Agreement

31.1 (@) Officers’ Certifications of Periodic Report pursuant to Section 302 of Sarbanes-Oxley Act of 2002

32.1 (@) Officers’ Certifications of Periodic Report pursuant to Section 906 of Sarbanes-Oxley Act of 2002

(1) (@) Filed Herewith.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	AmeriCredit Corp.
	(Registrant)

Date: May 10, 2005	By:	/s/ Chris A. Choate
		(Signature)
		Chris A. Choate
		Executive Vice President,
		Chief Financial Officer and Treasurer