10-K405 1 d10k405.txt FORM 10-K405 (Y.E. 6/30/2001 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark One) [X]ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended June 30, 2001 OR [_]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-10667 AmeriCredit Corp. (Exact name of registrant as specified in its charter) Texas 75-2291093 (State or other jurisdiction of (I.R.S. Employer Incorporation or organization) Identification No.) 801 Cherry Street, Suite 3900, Fort Worth, Texas 76102 (Address of principal executive offices, including Zip Code) (817) 302-7000 (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered Common Stock, $0.01 par value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: 9 1/4% Senior Notes due 2004/Guarantee of 9 1/4% Senior Notes due 2004 9.875% Senior Notes due 2006/Guarantee of 9.875% Senior Notes due 2006 (Title of each class) -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X] The aggregate market value of 76,437,746 shares of the Registrant's Common Stock held by non-affiliates based upon the closing price of the Registrant's Common Stock on the New York Stock Exchange on September 20, 2001, was approximately $2,202,935,840. For purposes of this computation, all executive officers, directors and 5 percent beneficial owners of the Registrant are deemed to be affiliates. Such determination should not be deemed an admission that such executive officers, directors and beneficial owners are, in fact, affiliates of the Registrant. There were 84,339,085 shares of Common Stock, $0.01 par value, outstanding as of September 20, 2001. DOCUMENTS INCORPORATED BY REFERENCE The Registrant's Annual Report to Shareholders for the year ended June 30, 2001 ("Annual Report"), furnished to the Commission pursuant to Rule 14a-3(b) and the definitive Proxy Statement pertaining to the 2001 Annual Meeting of Shareholders ("Proxy Statement") and filed pursuant to Regulation 14A are incorporated herein by reference into Parts II and IV, and Part III, respectively. 2 AMERICREDIT CORP. INDEX TO FORM 10-K
Item Page No. No. ---- ---- PART I 1. Business.......................................................... 4 2. Properties........................................................ 20 3. Legal Proceedings................................................. 20 4. Submission of Matters to a Vote of Security Holders............... 21 PART II 5. Market for Registrant's Common Equity and Related Stockholder 22 Matters........................................................... 6. Selected Financial Data........................................... 22 7. Management's Discussion and Analysis of Financial Condition and 22 Results of Operations............................................. 7A. Quantitative and Qualitative Disclosures About Market Risk........ 22 8. Financial Statements and Supplementary Data....................... 22 9. Changes in and Disagreements with Accountants on Accounting and 22 Financial Disclosure.............................................. PART III 10. Directors and Executive Officers of the Registrant................ 23 11. Executive Compensation............................................ 23 12. Security Ownership of Certain Beneficial Owners and Management.... 23 13. Certain Relationships and Related Transactions.................... 23 PART IV 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K... 24 SIGNATURES 34
3 PART I ITEM 1. BUSINESS General AmeriCredit Corp. was incorporated in Texas on May 18, 1988, and succeeded to the business, assets and liabilities of a predecessor corporation formed under the laws of Texas on August 1, 1986. The Company's predecessor began operations in March 1987, and the business has been operated continuously since that time. As used herein, the term "Company" refers to the Company, its wholly owned subsidiaries and its predecessor corporation. The Company's principal executive offices are located at 801 Cherry Street, Suite 3900, Fort Worth, Texas, 76102 and its telephone number is (817) 302-7000. The Company and its subsidiaries have been operating in the automobile finance business since September 1992. Through its branch network, the Company purchases auto finance contracts without recourse from franchised and select independent automobile dealerships and, to a lesser extent, makes loans directly to consumers buying late model used and new vehicles. The Company targets consumers who are typically unable to obtain financing from traditional sources. Funding for the Company's auto lending activities is obtained primarily through the sale of loans in securitization transactions. The Company services its automobile lending portfolio at regional centers using automated loan servicing and collection systems. In November 1996, the Company acquired Americredit Corporation of California, a California corporation ("AMS"), which originated mortgage loans. Such mortgage loans were generally packaged and sold for cash on a servicing released whole-loan basis. Deterioration in the wholesale loan markets caused the premiums received by AMS for the sale of mortgage loans to decrease subsequent to the Company's acquisition of AMS. As a result, during October 1999, Company management assessed various options with respect to the operations of AMS and decided to cease the operations of AMS. The AMS wholesale mortgage loan production and processing offices were closed, and the assets of AMS liquidated. Automobile Finance Operations Target Market. The Company's automobile lending programs are designed to serve customers who have limited access to traditional automobile financing. The Company's typical borrowers have experienced prior credit difficulties or have limited credit histories. Because the Company serves customers who are unable to meet the credit standards imposed by most traditional automobile financing sources, the Company generally charges interest at higher rates than those charged by traditional financing sources. As the Company provides financing in a relatively high risk market, the Company also expects to sustain a higher level of credit losses than traditional automobile financing sources. Marketing. Since the Company is primarily an indirect lender, the Company focuses its marketing activities on automobile dealerships. The Company is selective in choosing the dealers with whom it conducts business and primarily pursues manufacturer franchised dealerships with used car operations and select independent dealerships. The Company selects these dealers based on the type of vehicles sold. Specifically, the Company prefers to finance later model, low mileage used vehicles and moderately priced new vehicles. Of the contracts purchased by the Company during the fiscal year ended June 30, 2001, approximately 97% were originated by manufacturer franchised dealers and 3% by select independent dealers. The Company purchased contracts from 16,280 dealers during the fiscal year ended June 30, 2001. No dealer accounted for more than 1% of the total volume of contracts purchased by the Company for that same period. Prior to entering into a relationship with a dealer, the Company considers the dealer's operating history and reputation in the marketplace. The Company then maintains a non-exclusive relationship with the dealer. This relationship is actively monitored with the objective of maximizing the volume of applications received from the dealer that meet the Company's underwriting standards and profitability objectives. Due to the non-exclusive nature of the Company's relationships with dealerships, the dealerships retain discretion to determine whether to 4 obtain financing from the Company or from another source for a customer seeking to finance a vehicle purchase. Branch managers and other branch office personnel regularly telephone and visit dealers to solicit new business and to answer any questions dealers may have regarding the Company's financing programs and capabilities. These personnel explain the Company's underwriting philosophy, including the preference for non-prime quality contracts secured by later model, low mileage vehicles and the Company's practice of underwriting in the local branch office. To increase the effectiveness of these contacts, the branch managers and other branch office personnel have access to the Company's management information systems which detail current information regarding the number of applications submitted by a dealership, the Company's response and the reasons why a particular application was rejected. The Company has entered into strategic marketing alliances with certain banks which purchase prime quality auto finance contracts. The largest such relationship is with Chase Automotive Finance. Under these alliances, the Company's branch personnel and representatives from the banks jointly market to automobile dealers with the Company providing non-prime auto financing and the banks providing prime auto financing. The alliances allow the Company and the banks to better service automobile dealers by offering auto financing across a broad credit spectrum. The Company also benefits from being able to market its auto financing programs to automobile dealers who have relationships with the banks. Finance contracts are generally purchased by the Company without recourse to the dealer, and accordingly, the dealer usually has no liability to the Company if the consumer defaults on the contract. To mitigate the risk from potential credit losses, the Company may charge dealers a non-refundable acquisition fee when purchasing finance contracts. Such acquisition fees are assessed on a contract-by-contract basis. Although finance contracts are purchased without recourse to the dealer, the dealer typically makes certain representations as to the validity of the contract and compliance with certain laws, and indemnifies the Company against any claims, defenses and set-offs that may be asserted against the Company because of assignment of the contract. Recourse based upon such representations and indemnities would be limited in circumstances in which the dealer has insufficient financial resources to perform upon such representations and indemnities. The Company does not view recourse against the dealer on these representations and indemnities to be of material significance in its decision to purchase finance contracts from a dealer. To supplement its indirect lending activities, the Company has introduced certain other automobile finance programs. In its Valued Customer Program, the Company seeks to provide pre-approvals for qualifying existing customers for their next auto loan when they trade-in their vehicle or otherwise payoff their active AmeriCredit account. Additionally, through strategic alliances with certain online lending sources and through the Company's own Web site, the Company processes online credit applications in order to provide direct auto financing via the Internet. In 2001, the Company joined J.P. Morgan Chase & Co. and Wells Fargo in providing equity capital to launch a new company, DealerTrack.com. DealerTrack was established to automate the dealer-lender process, allowing dealers to submit consumer credit applications via the Internet to any participating lender. Real-time contract status information and historical data regarding applications and approvals are also available to dealers. The Company is one of the first three lenders to offer services through DealerTrack. Branch Office Network. The Company uses a branch office network to market its indirect financing programs to selected dealers, develop relationships with these dealers and underwrite contracts submitted by dealerships. Branch office personnel are responsible for the solicitation, enrollment and education of dealers regarding the Company's financing programs. The Company believes a local presence enables the Company to be more responsive to dealer concerns and local market conditions. The Company selects markets for branch office locations based upon numerous factors, including demographic trends and data, competitive conditions, the regulatory environment and the availability of qualified personnel. Branch offices are typically situated in suburban office buildings which are accessible to local dealers. 5 Each branch office solicits dealers for contracts and maintains the Company's relationship with the dealers in the geographic vicinity of that branch office. Branch office locations are typically staffed by a branch manager, an assistant manager and several dealer and customer service representatives. Larger branch offices may also have additional assistant managers and/or dealer marketing representatives. The Company believes that the personal relationships its branch managers and other branch personnel establish with the dealership staff are an important factor in creating and maintaining productive relationships with the Company's dealer customer base. Branch managers are compensated with base salaries and annual incentives based on overall branch performance including factors such as branch loan credit quality, loan pricing adequacy and loan volume objectives. The incentives are typically paid in cash and stock-based awards. The branch managers report to regional vice presidents. The Company's regional vice presidents monitor branch office compliance with the Company's underwriting guidelines and assist in local branch marketing activities. The Company's management information systems provide the regional vice presidents access to credit application information enabling them to consult with the branch managers on credit decisions and review exceptions to the Company's underwriting guidelines. The regional vice presidents also make periodic visits to the branch offices to conduct operating reviews. The following table sets forth information with respect to the number of branches, dollar volume of contracts purchased and number of producing dealerships for the periods set forth below.
Years Ended June 30, -------------------------------- 2001 2000 1999 ---------- ---------- ---------- (dollars in thousands) Number of branch offices................. 232 196 176 Dollar volume of contracts purchased..... $6,378,652 $4,427,945 $2,879,796 Number of producing dealerships (1)...... 16,280 14,076 12,590
-------- (1) A producing dealership refers to a dealership from which the Company had purchased contracts in the respective period. Underwriting and Purchasing of Contracts Proprietary Credit Scoring System and Risk-based Pricing. The Company utilizes a proprietary credit scoring system to support the credit approval process. The credit scoring system was developed through statistical analysis of the Company's consumer demographic and portfolio databases. Credit scoring is used to differentiate credit applicants and to rank order credit risk in terms of expected default rates, which enables the Company to evaluate credit applications for approval and tailor loan pricing and structure according to this statistical assessment of credit risk. For example, a consumer with a lower score would indicate a higher probability of default and, therefore, the Company would either decline the application, or, if approved, compensate for this higher default risk through the structuring and pricing of the transaction. While the Company employs a credit scoring system in the credit approval process, credit scoring does not eliminate credit risk. Adverse determinations in evaluating contracts for purchase could negatively affect the credit quality of the Company's receivables portfolio. The credit scoring system considers data contained in the customer's credit application and credit bureau report as well as the structure of the proposed loan and produces a statistical assessment of these attributes. This assessment is used to segregate applicant risk profiles and determine whether risk is acceptable and the price the Company should charge for that risk. The Company's credit scorecards are validated on a monthly basis through the comparison of actual versus projected performance by score. The Company endeavors to refine its proprietary scorecards based on new information and identified correlations relating to receivables performance. Through the use of the proprietary credit scoring system, Company personnel with credit authority are able to more efficiently review and prioritize loan applications. Applications which receive a high score can be processed rapidly and credit decisions can be quickly communicated to the dealer. Applications receiving low 6 scores can be quickly rejected without further processing and review by the Company. This ability to prioritize applications allows for a more effective allocation of resources to those applications requiring more review. Indirect Loan Approval Process. The Company purchases individual contracts through its branch offices using a credit approval process tailored to local market conditions. Each branch manager has a specific credit authority based upon their experience and historical loan portfolio results as well as established credit scoring parameters. Contracts may also be purchased through the Company's regional purchasing office for specific dealers requiring centralized service, in certain markets where a branch office is not present or, in some cases, outside of normal branch office working hours. Although the credit approval process is decentralized, the Company's application processing system includes controls designed to ensure that credit decisions comply with the Company's credit scoring strategies and underwriting policies and procedures. Loan application packages completed by prospective obligors are received via facsimile, electronically, and/or by telephone. Application data are entered into the Company's automated application processing system. A credit bureau report is automatically accessed and a credit score is computed. Company personnel with credit authority review the application package and determine whether to approve the application, approve the application subject to conditions that must be met or deny the application. These personnel consider many factors in arriving at a credit decision, relying primarily on the applicant's credit score, but also taking into account the applicant's capacity to pay, stability, credit history, the contract terms and collateral value. The Company estimates that approximately 60% of applicants are denied credit by the Company typically because of their credit histories or other factors. Dealers are contacted regarding credit decisions electronically, by facsimile and/or by telephone. Declined and conditioned applicants are also provided with appropriate notification of the decision. The Company's underwriting and collateral guidelines as well as credit scoring parameters form the basis for the credit decision; however, the qualitative judgment of the personnel with credit authority with respect to the credit quality of an applicant is a significant factor in the final credit decision. Exceptions to credit policies and authorities must be approved by a regional vice president or other designated credit officer. Such exceptions are also monitored by the Company's centralized risk management group. Completed loan packages are sent by the automobile dealers to the branch office. Once the loan package is received, a Company customer service representative verifies certain applicant employment and residency information when required by the Company's credit policies. Loan terms and insurance coverages are also generally reverified with the customer. Key loan documentation is scanned to create electronic images and electronically forwarded to the Company's centralized loan processing department. The original documents are subsequently sent to the loan processing department and are stored in a fire resistant vault. Upon electronic receipt of loan documentation from the branches, the loan processing department reviews the loan packages for proper documentation and regulatory compliance and completes the entry of information into the Company's loan accounting system. Once cleared for funding, the loan processing department electronically transfers funds to the dealer or issues a check. Upon funding of the contract, the Company acquires a perfected security interest in the automobile that was financed. Daily loan reports are generated for review by senior operations management. All of the Company's contracts are fully amortizing with substantially equal monthly installments. Direct Loan Approval Process. The Company offers its direct loan program to consumers in most states via strategic alliances with certain online lending sources and the Company's own Web site, AmeriCreditOnline. An online loan application is completed by prospective obligors via the Internet. The application is transmitted to the Company's automated application processing system, and within seconds, a credit bureau report is accessed and a credit score is computed. Based on this information, the Company's proprietary automated underwriting system approves or declines the applicant and the decision is electronically sent to the applicant. The Company's underwriting and collateral guidelines as well as proprietary credit scoring parameters 7 form the basis for the credit decision. All credit decisions made via the Company's automated application processing system are valid for a 45-day period. Declined applicants are provided with appropriate notification of the decision. A package of loan documents is sent to approved applicants explaining the terms and conditions of the loan. The package may be used at an automobile dealer of the applicant's choice to purchase and finance a vehicle. The applicant and dealer complete the loan package and submit the package to either the Company or its online lending partners for funding. Direct loan packages received directly by the Company are processed in a manner similar to indirect loans. In the case of loans originated through one of the Company's Internet partners, the dealer deposits a documentary draft that is presented to the partner for funding. Once cleared for funding, AmeriCredit electronically transfers funds to the partner and purchases the loan. Servicing and Collections Procedures General. The Company's servicing activities consist of collecting and processing customer payments, responding to customer inquiries, initiating contact with customers who are delinquent in payment of an installment, maintaining the security interest in the financed vehicle, monitoring physical damage insurance coverage of the financed vehicle and repossessing and liquidating collateral when necessary. The Company uses monthly billing statements to serve as a reminder to customers as well as an early warning mechanism in the event a customer has failed to notify the Company of an address change. Approximately 15 days before a customer's first payment due date and each month thereafter, the Company mails the customer a billing statement directing the customer to mail payments to a lockbox bank for deposit in a lockbox account. Payment receipt data is electronically transferred from the Company's lockbox bank to the Company for posting to the loan accounting system. Payments may also be received directly by the Company from customers. All payment processing and customer account maintenance is performed centrally at the Company's operations center in Arlington, Texas. The Company's collections activities are performed at regional centers located in Arlington, Texas, Tempe, Arizona, Charlotte, North Carolina, Jacksonville, Florida and Peterborough, Ontario. A predictive dialing system is utilized to make phone calls to customers whose payments are past due. The predictive dialer is a computer-controlled telephone dialing system which simultaneously dials phone numbers of multiple customers from a file of records extracted from the Company's database. Once a live voice responds to the automated dialer's call, the system automatically transfers the call to a collector and the relevant account information to the collector's computer screen. The system also tracks and notifies collections management of phone numbers that the system has been unable to reach within a specified number of days, thereby promptly identifying for management all customers who cannot be reached by telephone. By eliminating the time spent on attempting to reach customers, the system gives a single collector the ability to speak with a larger number of accounts daily. Once an account reaches a certain level of delinquency, the account moves to the Company's mid-range collection units. The objective of these collectors is to prevent the account from becoming further delinquent. After a scheduled payment on an account becomes approximately 90 days past due, the Company typically repossesses the financed vehicle. However, initiation of repossession may occur prior to an account becoming 90 days past due. The Company may repossess a financed vehicle without regard to the length of payment delinquency if an account is deemed uncollectible, the financed vehicle is deemed by collection personnel to be in danger of being damaged, destroyed or hidden, the customer deals in bad faith or the customer voluntarily surrenders the financed vehicle. Payment deferrals are at times offered to customers who have encountered temporary financial difficulty, hindering their ability to pay as contracted. A deferral allows the customer to move a delinquent payment to the end of the loan, usually by paying a fee (calculated in a manner specified by applicable law). The collector 8 reviews the customer's past payment history and statistically based behavioral score and assesses the customer's desire and capacity to make future payments. Before agreeing to a deferral, the collector also considers whether the deferment transaction complies with the Company's policies and guidelines. Exceptions to the Company's policies and guidelines for deferrals must be approved by a collections officer. While payment deferrals are initiated and approved in the collections department, a separate department in the Company processes authorized deferment transactions. As of June 30, 2001, approximately 15% of the Company's managed receivables had received a deferral. Repossessions. Repossessions are subject to prescribed legal procedures, which include peaceful repossession, one or more customer notifications, a prescribed waiting period prior to disposition of the repossessed automobile and return of personal items to the customer. Some jurisdictions provide the customer with reinstatement or redemption rights. Legal requirements, particularly in the event of bankruptcy, may restrict the Company's ability to dispose of the repossessed vehicle. Repossessions are handled by independent repossession firms engaged by the Company and must be approved by a collections officer. Upon repossession and after any prescribed waiting period, the repossessed automobile is sold at auction. The Company does not sell any vehicles on a retail basis. The proceeds from the sale of the automobile at auction, and any other recoveries, are credited against the balance of the contract. Auction proceeds from sale of the repossessed vehicle and other recoveries are usually not sufficient to cover the outstanding balance of the contract, and the resulting deficiency is charged-off. The Company may pursue collection of deficiencies when it deems such action to be appropriate. Charge-Off Policy. The Company's policy is to charge-off an account in the month in which the account becomes 120 days contractually delinquent if the Company has not repossessed the related vehicle. Otherwise, the Company charges-off the account when the vehicle securing the delinquent contract is repossessed and liquidated. The charge-off represents the difference between the actual net sales proceeds and the amount of the delinquent contract, including accrued interest. Accrual of finance charge income is suspended on accounts which are more than 60 days contractually delinquent. Risk Management Overview. The Company's risk management department is responsible for monitoring the loan approval process and supporting the supervisory role of senior operations management. This department tracks via databases key variables, such as loan applicant data, credit bureau and credit score information, loan structures and terms and payment histories. The risk management department also regularly reviews the performance of the Company's credit scoring system and is responsible for the development and enhancement of credit scorecards for the Company. The risk management department prepares regular credit indicator packages reviewing portfolio performance at various levels of detail including total Company, branch office and dealer. Various daily reports and analytical data are also generated by the Company's management information systems. This information is used to monitor credit quality as well as to refine the structure and mix of new loan originations. The Company reviews portfolio returns on a consolidated basis, as well as at the branch office, dealer and contract levels. Behavioral Scoring. Statistically-based behavioral assessment models are used to project the relative probability that an individual account will default and to validate the credit scoring system after the receivable has aged for a sufficient period of time, generally six to nine months. Default probabilities are calculated for each account independent of the credit score. Projected default rates from the behavioral assessment models and credit scoring systems are compared and analyzed to monitor the effectiveness of the Company's credit strategies. Collateral Value Management. The value of the collateral underlying the Company's receivables portfolio is updated monthly with a loan-by-loan link to national wholesale auction values. This data, along with the Company's own experience relative to mileage and vehicle condition, are used for evaluating collateral disposition activities as well as for reserve analysis models. 9 Compliance Audits. The Company's internal audit and quality control departments conduct regular reviews of branch office operations, loan operations, processing and servicing, collections and other functional areas. The primary objective of the reviews is to identify risks and associated controls and measure compliance with the Company's written policies and procedures as well as regulatory matters. Branch office reviews include a review of compliance with underwriting policies, completeness of loan documentation, collateral value assessment and applicant data investigation. Written reports are distributed to departmental managers and officers for response and follow-up. Results and responses are also reviewed by senior executive management. Securitization of Loans Since December 1994, the Company has pursued a strategy of securitizing its receivables to diversify its funding, improve liquidity and obtain a cost- effective source of funds for the purchase of additional automobile finance contracts. The Company applies the net proceeds from securitizations to pay down borrowings under its warehouse credit facilities, thereby increasing availability thereunder for further contract purchases. Through June 30, 2001, the Company had securitized approximately $14.9 billion of automobile receivables since 1994. In its securitizations, the Company, through a wholly-owned subsidiary, transfers automobile receivables to newly-formed securitization trusts, which issue one or more classes of asset-backed securities. The asset-backed securities are in turn sold to investors. When receivables are transferred to securitization trusts, the Company recognizes a gain on sale of receivables and continues to service such receivables. The gain on sale of receivables primarily represents the present value of estimated excess cash flows the Company expects to receive from the pool of receivables sold. The estimated excess cash flows are the difference between the finance charge income received from obligors on securitized receivables and the interest paid to investors in the asset-backed securities, net of credit losses, servicing fees and other expenses. Concurrently with recognizing such gain on sale of receivables, the Company records a corresponding asset, interest-only receivables from trusts, which includes the present value of estimated excess cash flows as described above. The calculation of interest-only receivables from trusts includes estimates of cumulative credit losses and prepayment rates for the remaining term of the receivables sold since these factors impact the amount and timing of future cash collected on the receivables sold. The carrying value of interest-only receivables is reviewed quarterly by the Company for each separate securitization transaction. If future losses or prepayment rates exceed the Company's original estimates, the asset will be adjusted through a charge to operations. Favorable credit loss and prepayment experience compared to the Company's original estimates would result in additional income when realized. The Company typically arranges for a financial guaranty insurance policy to achieve a high grade credit rating on the asset-backed securities issued by the securitization trusts. The financial guaranty insurance policies have been provided by Financial Security Assurance Inc. ("FSA"), a monoline insurer, which insures the payment of principal and interest due on the asset-backed securities. The Company has limited reimbursement obligations to FSA; however, credit enhancement requirements, including FSA's encumbrance of certain restricted cash accounts and subordinated interests in trusts, provide a source of funds to cover shortfalls in collections and to reimburse FSA for any claims which may be made under the policies issued with respect to the Company's securitizations. The credit enhancement requirements for the Company's securitizations include restricted cash accounts which are generally established with an initial deposit and subsequently funded through excess cash flows from securitized receivables. Funds would be withdrawn from the restricted cash accounts to cover any shortfalls in amounts payable on the asset-backed securities. Funds generated from securitization transactions insured by FSA are also available to be withdrawn in an event of default to reimburse FSA for draws on its financial guaranty insurance policy. In addition, the restricted cash account for each securitization trust insured by FSA is cross- 10 collateralized to the restricted cash accounts established in connection with the Company's other FSA insured securitization trusts, such that excess cash flow from a performing securitization trust insured by FSA may be used to support cash flow shortfalls from a non-performing securitization trust insured by FSA, thereby further restricting excess cash flow available to the Company. The Company is entitled to receive amounts from the restricted cash accounts to the extent the amounts deposited exceed predetermined required minimum levels. FSA has taken a pledge of the stock of AFS Funding Corp., the wholly-owned subsidiary of the Company that owns the restricted cash accounts, interest- only receivables and any subordinated interests in the trusts, such that, if the pledge is foreclosed upon in the event of a payment by FSA under one of its insurance policies or certain material adverse changes in the business of the Company, FSA would control all of the restricted cash accounts, interest- only receivables and subordinated interests in the trusts. The terms of each securitization also provide that, under certain tests relating to delinquencies, defaults and losses, cash may be retained in the restricted cash account and not released to the Company until increased minimum levels of credit enhancement requirements have been reached and maintained. During fiscal 2001, the Company completed two securitization transactions involving the sale of subordinate asset-backed securities in order to provide credit enhancement for the senior asset-backed securities and protect investors from losses. The Company also provided credit enhancement in these transactions in the form of a restricted cash account and overcollateralization, whereby more receivables are transferred to the trusts than the amount of asset-backed securities issued by the trusts. Excess cash flows will be used to increase the credit enhancement assets to required minimum levels, after which time excess cash flows will be distributed to the Company. Since these transactions did not involve the issuance of a financial guaranty insurance policy, the credit enhancement assets related to these trusts are not cross-collateralized to the credit enhancement assets established in connection with any of the Company's other securitization trusts. In addition, a wholly-owned subsidiary of the Company other than AFS Funding Corp. owns the credit enhancement assets, and, accordingly, such assets are not pledged to FSA. Trade Names The Company has obtained federal trademark protection for the "AmeriCredit" name and the logo that incorporates the "AmeriCredit" name. Certain other names, logos and phrases used by the Company in its business operations have also been trade marked. Regulation The Company's operations are subject to regulation, supervision and licensing under various federal, state and local statutes, ordinances and regulations. In most states in which the Company operates, a consumer credit regulatory agency regulates and enforces laws relating to consumer lenders and sales finance agencies such as the Company. Such rules and regulations generally provide for licensing of sales finance agencies, limitations on the amount, duration and charges, including interest rates, for various categories of loans, requirements as to the form and content of finance contracts and other documentation, and restrictions on collection practices and creditors' rights. In certain states, the Company is subject to periodic examination by state regulatory authorities. Some states in which the Company operates do not require special licensing or provide extensive regulation of the Company's business. The Company is also subject to extensive federal regulation, including the Truth in Lending Act, the Equal Credit Opportunity Act and the Fair Credit Reporting Act. These laws require the Company to provide certain disclosures to prospective borrowers and protect against discriminatory lending practices and unfair credit practices. The principal disclosures required under the Truth in Lending Act include the terms of repayment, the total finance charge and the annual percentage rate charged on each loan. The Equal Credit Opportunity Act prohibits creditors from discriminating against loan applicants on the basis of race, color, sex, age or marital status. Pursuant to Regulation B promulgated under the Equal Credit Opportunity Act, creditors are required to 11 make certain disclosures regarding consumer rights and advise consumers whose credit applications are not approved of the reasons for the rejection. In addition, the credit scoring system used by the Company must comply with the requirements for such a system as set forth in the Equal Credit Opportunity Act and Regulation B. The Fair Credit Reporting Act requires the Company to provide certain information to consumers whose credit applications are not approved on the basis of a report obtained from a consumer reporting agency. Additionally, the Company is subject to the Gramm-Leach-Bliley Act which requires the Company to maintain privacy with respect to certain consumer data in its possession and to periodically communicate with consumers on privacy matters. The dealers who originate automobile loans purchased by the Company also must comply with both state and federal credit and trade practice statutes and regulations. Failure of the dealers to comply with such statutes and regulations could result in consumers having rights of rescission and other remedies that could have an adverse effect on the Company. The Company believes that it maintains all material licenses and permits required for its current operations and is in substantial compliance with all applicable local, state and federal regulations. There can be no assurance, however, that the Company will be able to maintain all requisite licenses and permits, and the failure to satisfy those and other regulatory requirements could have a material adverse effect on its operations. Further, the adoption of additional, or the revision of existing, rules and regulations could have a material adverse effect on the Company's business. Competition Competition in the field of non-prime automobile finance is intense. The automobile finance market is highly fragmented and is served by a variety of financial entities including the captive finance affiliates of major automotive manufacturers, banks, thrifts, credit unions and independent finance companies. Many of these competitors have substantially greater financial resources and lower costs of funds than the Company. Many of these competitors also have long standing relationships with automobile dealerships and may offer dealerships or their customers other forms of financing, including dealer floor plan financing and leasing, which are not provided by the Company. Providers of automobile financing have traditionally competed on the basis of interest rates charged, the quality of credit accepted, the flexibility of loan terms offered and the quality of service provided to dealers and customers. In seeking to establish itself as one of the principal financing sources at the dealers it serves, the Company competes predominately on the basis of its high level of dealer service and strong dealer relationships and by offering flexible loan terms. There can be no assurance that the Company will be able to compete successfully in this market or against these competitors. Risk Factors Dependence on Warehouse Credit Facilities. The Company depends on warehouse credit facilities with financial institutions to finance its purchase of contracts pending securitization. At June 30, 2001, the Company has eight domestic warehouse credit facilities with various financial institutions providing for revolving credit borrowings of up to a total of approximately $3,625 million, subject to defined borrowing bases. The Company has $625 million and $250 million commercial paper facilities which mature in September 2001, a $500 million commercial paper facility which matures in March 2002, a $200 million commercial paper facility which matures in May 2002, and $500 million and $300 million commercial paper facilities which mature in June 2002. The Company has two medium term note facilities totaling $500 million and $750 million which mature in December 2003 and June 2004, respectively. The Company also has a $40 million Cdn. bank facility to fund Canadian auto receivables, which matures in May 2002. The Company cannot guarantee that any of these financing resources will continue to be available beyond the current maturity dates at reasonable terms or at all. The availability of these financing sources depends in part on factors outside of the Company's control, including regulatory capital treatment for unfunded bank lines of credit and the availability of bank liquidity in general. If the Company is unable to extend or replace any of these facilities and arrange new warehouse credit facilities, it will have to curtail contract purchasing activities, which would have a material adverse effect on the Company's financial position, liquidity and results of operations. 12 The Company's warehouse credit facilities contain extensive restrictions and covenants and require the Company to maintain specified financial ratios and satisfy specified financial tests, including maintenance of asset quality and portfolio performance tests. Failure to meet any of these convenants, financial ratios or financial tests 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 such agreements, and restrict the Company's ability to obtain additional borrowings under these agreements. The Company's ability to meet those financial ratios and tests can be affected by events beyond its control, and the Company cannot guarantee that it will meet those financial ratios and tests. Dependence on Securitization Program. Since December 1994, the Company has relied upon its ability to aggregate and sell receivables in the asset-backed securities market to generate cash proceeds for repayment of warehouse credit facilities and to purchase additional contracts from automobile dealers. Further, gains on sales generated by the Company's securitizations currently represent the single largest component of the Company's revenues. The Company endeavors to effect securitizations of its receivables on at least a quarterly basis. Accordingly, adverse changes in the Company's asset-backed securities program or in the asset-backed securities market for automobile receivables generally could materially adversely affect the Company's ability to purchase and securitize loans on a timely basis and upon terms reasonably favorable to the Company. Any delay in the sale of receivables beyond a quarter-end would eliminate the gain on sale that quarter and adversely affect the Company's reported earnings for that quarter. Any of these adverse changes or delays would have a material adverse effect on the Company's financial position, liquidity and results of operations. Dependence on Credit Enhancement. To date, all but two of the Company's securitizations have utilized credit enhancement in the form of financial guaranty insurance policies issued by FSA in order to achieve AAA/Aaa ratings which may reduce the costs of securitizations relative to alternative forms of financing available to the Company and enhance the marketability of such transactions to investors in asset-backed securities. FSA is not required to insure Company-sponsored securitizations, and there can be no assurance that it will continue to do so or that future Company-sponsored securitizations will be similarly rated. Likewise, the Company is not required to utilize financial guaranty insurance policies issued by FSA or any other form of credit enhancement in connection with its securitizations. The Company utilizes reinsurance and other credit enhancement alternatives to reduce the initial cash deposit related to its securitizations. A downgrading of FSA's credit rating or FSA's withdrawal of credit enhancement or the lack of availability of reinsurance or other alternative credit enhancements for the Company's securitization program could result in higher interest costs for future Company-sponsored securitizations and larger initial cash deposit requirements. The absence of a financial guaranty insurance policy may also impair the marketability of the Company's securitizations. These events could have a material adverse effect on the Company's financial position, liquidity and results of operations. Liquidity and Capital Needs. The Company's ability to make payments on and to refinance its indebtedness and to fund planned capital expenditures depends on its ability to generate cash in the future. This, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond the Company's control. The Company requires substantial amounts of cash to fund its contract purchase and securitization activities. Although the Company recognizes a gain on the sale of receivables upon the closing of a securitization, it typically receives the cash representing that gain over the actual life of the receivables securitized. The Company also incurs significant transaction costs in connection with a securitization. Accordingly, the Company's strategy of securitizing substantially all of its newly purchased receivables and increasing the number of contracts purchased will require substantial amounts of cash. The Company expects to continue to require substantial amounts of cash as the volume of the Company's contract purchases increases and its securitization program grows. The Company's primary cash requirements include the funding of: (i) contract purchases pending their securitization and sale; (ii) credit enhancement requirements in connection with the securitization and sale of the receivables; (iii) interest and principal 13 payments under warehouse credit facilities, the Company's senior notes and other indebtedness; (iv) fees and expenses incurred in connection with the securitization and servicing of receivables; (v) capital expenditures for technology and facilities; (vi) ongoing operating expenses; and (vii) income tax payments. The Company's primary sources of liquidity in the future are expected to be cash flows from operating activities, including excess cash flow received from securitization trusts, borrowings under its warehouse credit facilities, sales of automobile receivables through securitizations and further issuances of debt or equity securities, depending on capital market conditions. The type, timing and terms of additional debt or equity financings selected by the Company will be dependent upon the Company's cash needs, the availability of various financing sources and the prevailing conditions in the financial markets. There can be no assurance that any such sources will be available to the Company at any given time or as to whether the terms on which such sources may be available will be acceptable. Leverage. The Company currently has substantial outstanding indebtedness. The Company's ability to make payments of principal or interest on, or to refinance, its indebtedness will depend on its future operating performance and its ability to enter into additional securitizations and debt and/or equity financings, which to a certain extent is subject to economic, financial, competitive and other factors beyond its control. If the Company is unable to generate sufficient cash flow in the future to service its debt, it may be required to refinance all or a portion of its existing debt or to obtain additional financing. There can be no assurance that any such refinancing would be possible or that any additional financing could be obtained on acceptable terms. The inability to obtain additional financing could have a material adverse effect on the Company. The degree to which the Company is leveraged creates risks including: (i) the Company may be unable to satisfy its obligations under its outstanding senior notes; (ii) the Company may be more vulnerable to adverse general economic and industry conditions; (iii) the Company may find it more difficult to fund future working capital, capital expenditures, acquisitions, general corporate purposes or other purposes; and (iv) the Company will have to dedicate a substantial portion of its cash resources to the payment of principal and interest on indebtedness outstanding thereby reducing the funds available for operations and future business opportunities. The Company's warehouse credit facilities and its indentures restrict its ability to, among other things: (i) sell or transfer assets; (ii) incur additional debt; (iii) repay other debt; (iv) pay dividends; (v) make certain investments or acquisitions; (vi) repurchase or redeem capital stock; (vii) engage in mergers or consolidations; and (viii) engage in certain transactions with subsidiaries and affiliates. The warehouse credit facilities and the indentures also require the Company to comply with certain financial ratios, covenants and asset quality maintenance requirements. These restrictions may interfere with the Company's ability to obtain financing or to engage in other necessary or desirable business activities. If the Company cannot comply with the requirements in its warehouse credit facilities, then the lenders may require it to immediately repay all of the outstanding debt under its facilities. If its debt payments were accelerated, the Company's assets might not be sufficient to fully repay the debt. These lenders may also require the Company to use all of its available cash to repay its debt, foreclose upon their collateral or prevent the Company from making payments to other creditors on certain portions of the Company's outstanding debt. The Company may not be able to obtain a waiver of these provisions or refinance its debt, if needed. In such a case, the Company's business, results of operations and financial condition would suffer. Default and Prepayment Risks. The Company's results of operations, financial condition and liquidity depend, to a material extent, on the performance of contracts purchased and held by the Company prior to their sale in a securitization transaction as well as the subsequent performance of receivables sold to securitization trusts. Obligors under loans acquired by the Company may default or prepay during the period prior to their sale 14 in a securitization transaction or if they remain owned by the Company. The Company bears the full risk of losses resulting from payment defaults during such period. In the event of a payment default, the collateral value of the financed vehicle usually does not cover the outstanding loan balance and costs of recovery. The Company maintains an allowance for loan losses on loans held for sale by the Company, which reflects management's estimates of inherent losses for such loans. If the allowance is inadequate, then the Company would recognize as an expense the losses in excess of that allowance, and results of operations could be adversely affected. In addition, under the terms of the warehouse credit facilities, the Company is not able to borrow against defaulted loans and loans greater than 30 days delinquent held by the Company. The Company also retains a substantial portion of the default and prepayment risk associated with the receivables that it sells pursuant to Company-sponsored securitizations. A large component of the gain recognized on these sales and the corresponding assets recorded on the Company's balance sheet are credit enhancement assets which are based on the present value of estimated future excess cash flows from the securitized receivables expected to be received by the Company. Accordingly, credit enhancement assets are calculated on the basis of management's assumptions concerning, among other things, defaults and prepayments. Actual defaults and prepayments may vary from management's assumptions, possibly to a material degree. As of June 30, 2001, credit enhancement assets totaled $1,151 million. Depending on the Company's growth, credit enhancement assets may become a larger share of the Company's overall assets. The Company is required to deposit substantial amounts of the cash flows generated by its interests in Company-sponsored securitizations into additional credit enhancement. Credit enhancement assets related to the Company's securitizations that have involved the issuance of financial guaranty insurance policies are pledged to FSA as security for the Company's obligation to reimburse FSA for any amounts which may be paid out on financial guarantee insurance policies. Credit enhancement assets related to the Company's securitizations that have involved the sale of subordinate securities rather than the issuance of financial guaranty insurance policies also cannot be accessed by the Company since such assets are available only as security to protect investors in such securitizations against losses. The Company regularly measures its default, prepayment and other assumptions against the actual performance of securitized receivables. If the Company were to determine, as a result of such regular review or otherwise, that it underestimated defaults and/or prepayments, or that any other material assumptions were inaccurate, the Company would be required to adjust the carrying value of its credit enhancement assets, which consist of restricted cash, investments in Trust receivables and interest-only receivables from Trusts, by recording a charge to income and writing down the carrying value of these assets on its balance sheet. Future cash flows from securitization trusts may also be less than expected, and the Company's results of operations and liquidity would be adversely affected, possibly to a material degree. In addition, an increase in defaults or prepayments would reduce the size of the Company's servicing portfolio, which would reduce the Company's servicing fee income, further adversely affecting results of operations and cash flow. A material write-down of credit enhancement assets and the corresponding decreases in earnings and cash flow could limit the Company's ability to service debt and to enter into future securitizations and other financings. Although the Company believes that it has made reasonable assumptions as to the future cash flows of the various pools of receivables that have been sold in securitization transactions, actual rates of default or prepayment may differ from those assumed, and other assumptions may be required to be revised upon future events. Portfolio Performance; Negative Impact on Cash Flows; Right to Terminate Normal Servicing. Generally, the form of agreement the Company enters into with FSA in connection with securitization transactions involving the issuance of financial guaranty insurance policies contains specified limits on the delinquency, default and loss rates on the receivables included in each securitization trust. If, at any measurement date, the delinquency, default or loss rate with respect to any trust were to exceed the specified limits, provisions of the FSA agreements would automatically increase the level of credit enhancement requirements for that trust. During the period in which the specified delinquency, default and loss rates were exceeded, excess cash flow, if any, from the trust would be used to fund the increased credit enhancement levels instead of being distributed to the Company, which would have an adverse effect on the Company's cash flow. Further, the credit enhancement requirements 15 for each securitization trust insured by FSA are cross-collateralized to the credit enhancement requirements established in connection with each of the Company's other securitization trusts insured by FSA so that excess cash flow from a performing securitization trust insured by FSA may be used to support increased credit enhancement requirements for a non-performing securitization trust insured by FSA, which would further restrict excess cash flow available to the Company. The Company has on occasion exceeded these specified limits; however, FSA has either waived each of these occurrences or amended the agreements. The Company can give no assurance that FSA would waive any such future occurrence or amend the agreements. Any refusal of FSA to waive any such future occurrence or amend the agreements could have a material adverse effect on the Company's financial position, liquidity and results of operations. The FSA agreements contain additional specified limits on the delinquency, default and loss rates on the receivables included in each trust which are higher than the limits referred to in the preceding paragraph. If, at any measurement date, the delinquency, default or loss rate with respect to any trust insured by FSA were to exceed these additional specified limits applicable to that trust, provisions of the agreements permit FSA to terminate the Company's servicing rights to the receivables sold to that trust. In addition, the servicing agreements on FSA insured securitization trusts are cross-defaulted so that a default under one servicing agreement would allow FSA to terminate the Company's servicing rights under all servicing agreements on FSA insured securitization trusts. Although the Company has never exceeded such delinquency, default or loss rates, there can be no assurance that the Company's servicing rights with respect to the automobile receivables in such trusts or any other trust which exceeds the specified limits in future periods will not be terminated. FSA has other rights to terminate the Company as servicer for FSA insured securitization trusts if (i) the Company were to breach its obligations under the servicing agreements, (ii) FSA was required to make payments under its policies or (iii) certain bankruptcy or insolvency events were to occur. As of June 30, 2001, no such termination events have occurred with respect to any of the trusts formed by the Company. Reliance on Revenue Generated from the Sale of Loans to Trusts. The Company periodically sells auto receivables to certain special purpose financing trusts and these trusts in turn issue asset-backed securities to investors. The Company retains an interest in the receivables sold in the form of a residual or interest-only strip and may also retain other subordinated interests in the receivables sold to the trusts. The residual or interest-only strips represent the present value of future excess cash flows resulting from the difference between the finance charge income received from the obligors on the receivables and the interest paid to the investors in the asset-backed securities, net of credit losses, servicing fees and other expenses. Upon the transfer of receivables to the trusts, the Company removes the net book value of the receivables sold from its consolidated balance sheets and allocates the carrying value between the assets transferred and the interests retained, based upon their relative fair values at the settlement date. The difference between the sales proceeds, net of transaction costs, and the allocated basis of the assets transferred is recognized as a gain on sale of receivables. For the year ended June 30, 2001, the Company recognized gains on sale of auto receivables of $302 million or approximately 37% of revenue during that period. If the Company is unable to continue expansion of its loan purchase volume and sell such loans to the trusts, the Company could experience a significant change in the timing of revenue recognition and income reported under generally accepted accounting principles. Further, there can be no assurance that the Company will recognize gains on future sales of receivables to the trusts consistent with the gains on previous sales. Implementation of Business Strategy. The Company's financial position and results of operations depend on Company management's ability to execute its business strategy. Key factors involved in execution of such business strategy include continued expansion of automobile contract purchase volume, continued and successful use of proprietary scoring models for risk assessment and risk- based pricing, the use of sophisticated risk management techniques, continued investment in technology to support operating efficiency and growth, and funding and liquidity through securitizations. The failure or inability of the Company to execute any element of its business strategy could materially adversely affect its financial position, liquidity and results of operations. 16 The Company plans to expand its automobile finance business by adding additional branch offices, increasing dealer penetration in the Company's existing markets and establishing and developing new channels to provide auto financing directly to the consumer. The success of this strategy is dependent upon, among other factors, the Company's ability to hire and retain qualified branch managers and other personnel, to develop relationships with more dealers and to expand the Company's current relationships with existing dealer customers. The Company is faced with intense competition in attracting key personnel and establishing relationships with new dealers. Dealers often already have favorable non-prime financing sources, which may restrict the Company's ability to develop dealer relationships and delay the Company's growth. In addition, the competitive conditions in the Company's market may result in a reduction in the profitability of the contracts that the Company purchases or a decrease in contract acquisition volume, which would adversely affect the Company's results of operations. The growth of the Company's servicing portfolio has resulted in increased need for additional personnel and expansion of systems capacity. The Company's ability to support, manage and control growth is dependent upon, among other things, the Company's ability to hire, train, supervise and manage its growing workforce. There can be no assurance that the Company will have trained personnel and systems adequate to support the Company's growth strategy. Credit-Impaired Borrowers. The Company specializes in purchasing and servicing non-prime automobile receivables. Non-prime borrowers are associated with higher-than-average delinquency and default rates. While the Company believes that it effectively manages these risks with its proprietary credit scoring system, risk-based loan pricing and other underwriting policies and collection methods, no assurance can be given that these criteria or methods will be effective in the future. In the event that the Company underestimates the default risk or under-prices contracts that it purchases, the Company's financial position, liquidity and results of operations would be adversely affected, possibly to a material degree. Economic Conditions. Delinquencies, defaults, repossessions and losses generally increase during periods of economic recession. These periods also may be accompanied by decreased consumer demand for automobiles and declining values of automobiles securing outstanding loans, which weakens collateral coverage and increases the amount of a loss in the event of default. Significant increases in the inventory of used automobiles during periods of economic recession may also depress the prices at which repossessed automobiles may be sold or delay the timing of these sales. Because the Company focuses on non-prime borrowers, the actual rates of delinquencies, defaults, repossessions and losses on these loans are higher than those experienced in the general automobile finance industry and could be more dramatically affected by a general economic downturn. In addition, during an economic slow down or recession, the Company's servicing costs may increase without a corresponding increase in its servicing fee income. While the Company believes that the underwriting criteria and collection methods it employs enable it to manage the higher risk inherent in loans made to non- prime borrowers, no assurance can be given that such criteria or methods will afford adequate protection against such risks. Any sustained period of increased delinquencies, defaults, repossessions or losses or increased servicing costs could also adversely affect the Company's ability to enter into future securitizations and, correspondingly, its financial position, liquidity and results of operations. Interest Rates. The Company's profitability may be directly affected by the level of and fluctuations in interest rates, which affects the gross interest rate spread the Company earns on its receivables. As the level of interest rates increase, the Company's gross interest rate spread may decline since the rates charged on the contracts purchased from dealers are limited by statutory maximums, restricting the Company's opportunity to pass on increased interest costs. Furthermore, the Company's future gains recognized upon the securitization of automobile receivables will also be affected by interest rates. The Company recognizes a gain in connection with its securitizations based upon the estimated present value of projected future excess cash flows from the securitization trusts, which is largely dependent upon the gross interest rate spread. The Company believes that its profitability and liquidity could be adversely affected during any period of higher interest rates, possibly to a material degree. 17 Labor Market Conditions. Low unemployment rates and competition to hire personnel possessing the skills and experience required by the Company could contribute to an increase in the Company's employee turnover rate. High turnover or an inability to attract and retain qualified replacement personnel could have an adverse effect on the Company's delinquency, default and net loss rates and, ultimately, the Company's financial condition, results of operations and liquidity. Competition. Reference should be made to Item 1. "Business--Automobile Finance Operations--Competition" for a discussion of competitive risk factors. Regulation. Reference should be made to Item 1. "Business--Automobile Finance Operations--Regulation" for a discussion of regulatory risk factors. Employees At June 30, 2001, the Company employed 4,392 persons in 41 states and five Canadian provinces. None of the Company's employees are a part of a collective bargaining agreement, and the Company's relationships with employees are satisfactory. 18 Executive Officers The following sets forth certain data concerning the executive officers of the Company as of September 1, 2001.
Name Age Position ---- --- -------- Clifton H. Morris, Jr... 66 Executive Chairman of the Board Michael R. Barrington... 42 Vice Chairman of the Board, Chief Executive Officer and President Daniel E. Berce......... 47 Vice Chairman of the Board and Chief Financial Officer Steven P. Bowman........ 34 Executive Vice President, Chief Credit Officer Chris A. Choate......... 38 Executive Vice President, Chief Legal Officer and Secretary Edward H. Esstman....... 60 Vice Chairman of the Board S. Mark Floyd........... 48 President, Dealer Services Joseph E. McClure....... 54 Executive Vice President, Chief Information Officer Cheryl L. Miller........ 36 President, Consumer Services Michael T. Miller....... 40 Executive Vice President, Chief Operating Officer Preston A. Miller....... 37 Executive Vice President, Treasurer Karl J. Reeb............ 43 Executive Vice President, Chief Administration Officer
CLIFTON H. MORRIS, JR. has been Executive Chairman of the Board since July 2000 and served as Chairman of the Board and Chief Executive Officer from May 1988 to July 2000. He also served as President from May 1988 until April 1991 and from April 1992 to November 1996. MICHAEL R. BARRINGTON has been Vice Chairman, Chief Executive Officer and President since July 2000. He served as Vice Chairman, President and Chief Operating Officer from November 1996 to July 2000 and was Executive Vice President and Chief Operating Officer from November 1994 until November 1996. Mr. Barrington joined the Company in 1989. DANIEL E. BERCE has been Vice Chairman and Chief Financial Officer since November 1996. He served as Executive Vice President, Chief Financial Officer and Treasurer from November 1994 until November 1996. Mr. Berce joined the Company in 1990. STEVEN P. BOWMAN has been Executive Vice President, Chief Credit Officer since March 2000. He served as Senior Vice President, Risk Management from May 1998 until March 2000 and was Vice President, Risk Management from June 1997 until May 1998. From July 1996 until June 1997, Mr. Bowman was Assistant Vice President, Risk Management. CHRIS A. CHOATE has been Executive Vice President, Chief Legal Officer and Secretary since November 1999. He served as Senior Vice President, General Counsel and Secretary from November 1996 to November 1999. Mr. Choate was Vice President, General Counsel and Secretary from November 1994 until November 1996 and has been with the Company since 1991. EDWARD H. ESSTMAN has been Vice Chairman since August 2001. He served as Executive Vice President, Dealer Services and Co-Chief Operating Officer from October 2000 to August 2001, Executive Vice President, Dealer Services from October 1999 to October 2000, Executive Vice President, Auto Finance Division from November 1996 to October 1999 and Senior Vice President and Chief Credit Officer from November 1994 to November 1996. Mr. Esstman joined the Company in 1992. S. MARK FLOYD has been President, Dealer Services since August 2001. He served as Executive Vice President, Dealer Services from November 1999 to August 2001 and was Senior Vice President, Director Strategic Alliance from January 1998 to November 1999. Mr. Floyd was Senior Vice President, Strategic Alliance from September 1997 to January 1998. 19 JOSEPH E. McCLURE has been Executive Vice President, Chief Information Officer since April 1999. He served as Senior Vice President, Chief Information Officer from October 1998 until April 1999. Prior to that, Mr. McClure was Executive Vice President and Division Information Officer of Associates First Capital Corp., and was in that position for more than five years. CHERYL L. MILLER has been President, Consumer Services since May 2001. She served as Executive Vice President, Director of Collections and Customer Service from June 1998 to May 2001 and was Senior Vice President, Collections and Customer Service from October 1994 to June 1998. MICHAEL T. MILLER has been Executive Vice President, Chief Operating Officer since August 2001. He served as Executive Vice President, Co-Chief Operating Officer from October 2000 to August 2001, President, e-Services from March 2000 to October 2000, Executive Vice President, Chief Credit Officer from July 1998 until March 2000, and Senior Vice President, Chief Credit Officer from November 1996 until July 1998. Mr. Miller was Senior Vice President, Risk Management, Credit Policy and Planning and Chief of Staff from November 1994 until November 1996 and has been with the Company since 1991. PRESTON A. MILLER has been Executive Vice President, Treasurer since July 1998. He served as Senior Vice President, Treasurer from November 1996 until July 1998 and Vice President, Controller from November 1994 until November 1996. Mr. Miller joined the Company in 1989. KARL J. REEB has been Executive Vice President, Chief Administration Officer since November 1999. Prior to that, Mr. Reeb held various human resource executive positions with Verizon (formerly "Airtouch Communications") for approximately 10 years. ITEM 2. PROPERTIES The Company's executive offices are located at 801 Cherry Street, Suite 3900, Fort Worth, Texas, in a 238,303 square foot leased office space under a 12 year lease that commenced in July 1999. The Company also leases 67,000 square feet of office space in Tempe, Arizona, under a ten year agreement with renewal options, 76,000 square feet of office space in Charlotte, North Carolina, under a ten year agreement with renewal options and 250,000 square feet of office space in Arlington, Texas, under a five year agreement. In June 2001, the Company commenced a 25 year lease for 85,000 square feet of office space in Peterborough, Ontario and a 10 year lease for 85,000 square feet of office space in Jacksonville, Florida. Additionally, the Company is presently constructing a 250,000 square foot servicing facility in Arlington, Texas that will be completed in 2002. The Company's branch office facilities are generally leased under agreements with original terms of three to five years. Such facilities are typically located in a suburban office building and consist of between 1,000 and 2,000 square feet of space. ITEM 3. LEGAL PROCEEDINGS As a consumer finance company, the Company is subject to various consumer claims and litigation seeking damages and statutory penalties, based upon, among other things, usury, disclosure inaccuracies, wrongful repossession, fraud and discriminatory treatment of credit applicants, which could take the form of a plaintiffs' class action complaint. The Company, as the assignee of finance contracts originated by dealers, may also be named as a co-defendant in lawsuits filed by consumers principally against dealers. The damages and penalties claimed by consumers in these types of matters can be substantial. The relief requested by the plaintiffs varies but includes requests for compensatory, statutory and punitive damages. One proceeding in which the Company is a defendant has been brought in the form of a class action complaint. This lawsuit, pending in Superior Court in the State of California, claims that certain loan pricing structures used by the Company violate various California laws. This lawsuit previously included multiple other banks and finance companies as co-defendants; however, the claims against each bank and finance company have 20 now been severed into separate lawsuits. Discovery has not commenced in this litigation, and no ruling has been made or is pending regarding class certification. In the opinion of management, this lawsuit is without merit and the Company intends to defend vigorously. Management believes that the Company has taken prudent steps to address the litigation risks associated with the Company's business activities. However, there can be no assurance that the Company will be able to successfully defend against all such claims or that the determination of any such claim in a manner adverse to the Company would not have a material adverse effect on the Company's automobile finance business. In the opinion of management, the resolution of the proceedings described in this section will not have a material adverse effect on the Company's consolidated financial position, liquidity or results of operations. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS There were no matters submitted to a vote of the Company's security holders during the fourth quarter ended June 30, 2001. 21 PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS The Company has never paid cash dividends on its common stock. The Indentures pursuant to which the senior notes were issued contain certain restrictions on the payment of dividends. The Company presently intends to retain future earnings, if any, for use in the operation and expansion of the business and does not anticipate paying any cash dividends in the foreseeable future. Information contained under the caption "Common Stock Data" in the Annual Report is incorporated herein by reference in further response to this Item 5. ITEM 6. SELECTED FINANCIAL DATA Information contained under the caption "Summary Financial and Operating Information" in the Annual Report is incorporated herein by reference in response to this Item 6. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Information contained under the caption "Financial Review" in the Annual Report is incorporated herein by reference in response to this Item 7. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Information contained under the caption "Financial Review--Interest Rate Risk" in the Annual Report is incorporated herein by reference in response to this Item 7A. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The Consolidated Financial Statements of the Company included in the Annual Report and information contained under the caption "Quarterly Data" in the Annual Report are incorporated herein by reference in response to this Item 8. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE The Company had no disagreements on accounting or financial disclosure matters with its independent accountants to report under this Item 9. 22 PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT Information contained under the caption "Election of Directors" in the Proxy Statement is incorporated herein by reference in response to this Item 10. See Item 1. "Business--Executive Officers" for information concerning executive officers. ITEM 11. EXECUTIVE COMPENSATION Information contained under the captions "Executive Compensation" and "Election of Directors" in the Proxy Statement is incorporated herein by reference in response to this Item 11. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT Information contained under the caption "Principal Shareholders and Stock Ownership of Management" in the Proxy Statement is incorporated herein by reference in response to this Item 12. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Information contained under the caption "Related Party Transactions" in the Proxy Statement is incorporated herein by reference in response to this Item 13. 23 PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K (1) The following Consolidated Financial Statements of the Company and Report of Independent Accountants are contained in the Annual Report and are incorporated herein by reference. Consolidated Financial Statements: Consolidated Balance Sheets as of June 30, 2001 and 2000. Consolidated Statements of Income and Comprehensive Income for the years ended June 30, 2001, 2000 and 1999. Consolidated Statements of Shareholders' Equity for the years ended June 30, 2001, 2000 and 1999. Consolidated Statements of Cash Flows for the years ended June 30, 2001, 2000 and 1999. Notes to Consolidated Financial Statements Report of Independent Accountants (2) Consolidating financial information for AmeriCredit Corp. (on a parent only basis), the combined Subsidiary Guarantors and the combined Non- Guarantor Subsidiaries is included herein in the form of the financial statement schedules. The payment of principal, premium, if any, and interest on the Company's senior notes is guaranteed by certain of the Company's subsidiaries (the "Subsidiary Guarantors"). The separate financial statements of the Subsidiary Guarantors are not included herein because the Subsidiary Guarantors are wholly-owned consolidated subsidiaries of the Company and are jointly, severally and unconditionally liable for the obligations represented by the senior notes. The Company believes that the condensed consolidating financial information for the Company, the combined Subsidiary Guarantors and the combined Non-Guarantor Subsidiaries provide information that is more meaningful in understanding the financial position of the Subsidiary Guarantors than separate financial statements of the Subsidiary Guarantors. The consolidating financial statement schedules present consolidating financial data for (i) the Company (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 as of June 30, 2001 and 2000 and for each of the three years in the period ended June 30, 2001. Investments in subsidiaries are accounted for by the parent company using the equity method for purposes of the presentation set forth. Earnings of subsidiaries are therefore reflected in the parent company's investment accounts and earnings. The principal elimination entries eliminate investments in subsidiaries and intercompany balances and transactions. (3) All other schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are either not required under the related instructions, are inapplicable, or the required information is included elsewhere in the Consolidated Financial Statements and incorporated herein by reference. (4) The exhibits filed in response to Item 601 of Regulation S-K are listed in the Index to Exhibits. (5) The Company did not file any reports on Form 8-K during the quarterly period ended June 30, 2001. Certain subsidiaries and affiliates of the Company filed reports on Form 8-K during the period ended June 30, 2001, reporting monthly information related to securitization trusts. 24 AMERICREDIT CORP. FINANCIAL STATEMENT SCHEDULE CONSOLIDATING BALANCE SHEET June 30, 2001 (dollars in thousands)
AmeriCredit Non- Corp. Guarantors Guarantors Eliminations Consolidated ----------- ----------- ---------- ------------ ------------ ASSETS Cash and cash equivalents............ $ 58,954 $ 18,099 $ 77,053 Receivables held for sale, net.............. 390,264 1,531,201 1,921,465 Interest-only receivables from Trusts................. 13,686 374,209 387,895 Investments in Trust receivables............ 493,022 493,022 Restricted cash......... 270,358 270,358 Property and equipment, net.................... $ 349 67,479 67,828 Other assets............ 9,606 117,058 40,622 167,286 Due (to) from affiliates............. 867,418 (2,171,157) 1,303,739 Investment in affiliates............. 605,397 2,286,788 16,995 $(2,909,180) ---------- ----------- ---------- ----------- ---------- Total assets.......... $1,482,770 $ 763,072 $4,048,245 $(2,909,180) $3,384,907 ========== =========== ========== =========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Warehouse credit facilities............. $ 24,085 $1,478,794 $1,502,879 Credit enhancement facility............... 36,319 36,319 Senior notes............ $ 375,000 375,000 Other notes payable..... 23,077 23,077 Funding payable......... 60,018 442 60,460 Accrued taxes and expenses............... 15,316 90,271 8,454 114,041 Interest rate swap and cap agreements......... 82,796 82,796 Deferred income taxes... 9,181 (8,209) 129,167 130,139 ---------- ----------- ---------- ----------- ---------- Total liabilities..... 422,574 248,961 1,653,176 2,324,711 ---------- ----------- ---------- ----------- ---------- Shareholders' equity: Common stock............ 899 899 Additional paid-in capital................ 520,077 51,768 1,699,642 $(1,751,410) 520,077 Accumulated other comprehensive income... 73,689 (39,456) 113,145 (73,689) 73,689 Retained earnings....... 484,963 501,799 582,282 (1,084,081) 484,963 ---------- ----------- ---------- ----------- ---------- 1,079,628 514,111 2,395,069 (2,909,180) 1,079,628 Treasury stock.......... (19,432) (19,432) ---------- ----------- ---------- ----------- ---------- Total shareholders' equity............... 1,060,196 514,111 2,395,069 (2,909,180) 1,060,196 ---------- ----------- ---------- ----------- ---------- Total liabilities and shareholders' equity............... $1,482,770 $ 763,072 $4,048,245 $(2,909,180) $3,384,907 ========== =========== ========== =========== ==========
25 AMERICREDIT CORP. FINANCIAL STATEMENT SCHEDULE CONSOLIDATING BALANCE SHEET June 30, 2000 (dollars in thousands)
AmeriCredit Non- Corp. Guarantors Guarantors Eliminations Consolidated ----------- ---------- ---------- ------------ ------------ ASSETS Cash and cash equivalents............ $ 30,705 $ 12,211 $ 42,916 Receivables held for sale, net.............. 284,851 586,660 871,511 Interest-only receivables from Trusts................. 1,019 228,040 229,059 Investments in Trust receivables............ 341,707 341,707 Restricted cash......... 253,852 253,852 Property and equipment, net.................... $ 349 44,186 44,535 Other assets............ 11,529 40,781 26,379 78,689 Due (to) from affiliates............. 676,358 (702,492) 26,134 Investment in affiliates............. 318,749 632,534 2,641 $(953,924) ---------- --------- ---------- --------- ---------- Total assets.......... $1,006,985 $ 331,584 $1,477,624 $(953,924) $1,862,269 ========== ========= ========== ========= ========== LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Warehouse credit facilities............. $ 4,661 $ 483,039 $ 487,700 Credit enhancement facility............... 66,606 66,606 Senior notes............ $ 375,000 375,000 Other notes payable..... 19,691 19,691 Funding payable......... 61,519 145 61,664 Accrued taxes and expenses............... 14,058 49,837 6,732 70,627 Deferred income taxes... (90,343) (60,323) 243,068 92,402 ---------- --------- ---------- --------- ---------- Total liabilities..... 318,406 55,694 799,590 1,173,690 ---------- --------- ---------- --------- ---------- Shareholders' equity: Common stock............ 837 30 $ (30) 837 Additional paid-in capital................ 401,979 40,096 267,618 (307,714) 401,979 Accumulated other comprehensive income... 44,803 44,803 (44,803) 44,803 Retained earnings....... 262,111 235,764 365,613 (601,377) 262,111 ---------- --------- ---------- --------- ---------- 709,730 275,890 678,034 (953,924) 709,730 Treasury stock.......... (21,151) (21,151) ---------- --------- ---------- --------- ---------- Total shareholders' equity............... 688,579 275,890 678,034 (953,924) 688,579 ---------- --------- ---------- --------- ---------- Total liabilities and shareholders' equity............... $1,006,985 $ 331,584 $1,477,624 $(953,924) $1,862,269 ========== ========= ========== ========= ==========
26 AMERICREDIT CORP. FINANCIAL STATEMENT SCHEDULE CONSOLIDATING STATEMENT OF INCOME Year Ended June 30, 2001 (dollars in thousands)
AmeriCredit Non- Corp. Guarantors Guarantors Eliminations Consolidated ----------- ---------- ---------- ------------ ------------ Revenue Finance charge income............... $ 87,901 $ 137,309 $225,210 Gain on sale of receivables.......... $ (58) 46,542 255,284 301,768 Servicing fee income.. 195,545 85,694 281,239 Other income.......... 27,839 105,880 740,728 $ (864,440) 10,007 Equity in income of affiliates........... 251,580 257,989 (509,569) -------- -------- ---------- ----------- -------- 279,361 693,857 1,219,015 (1,374,009) 818,224 -------- -------- ---------- ----------- -------- Costs and expenses Operating expenses.... 34,989 217,556 55,908 308,453 Provision for loan losses............... 8,618 22,769 31,387 Interest expense...... 39,503 220,117 720,844 (864,440) 116,024 -------- -------- ---------- ----------- -------- 74,492 446,291 799,521 (864,440) 455,864 -------- -------- ---------- ----------- -------- Income before income taxes.................. 204,869 247,566 419,494 (509,569) 362,360 Income tax (benefit) provision.............. (17,983) (4,014) 161,505 139,508 -------- -------- ---------- ----------- -------- Net income.............. $222,852 $251,580 $ 257,989 $ (509,569) $222,852 ======== ======== ========== =========== ========
27 AMERICREDIT CORP. FINANCIAL STATEMENT SCHEDULE CONSOLIDATING STATEMENT OF INCOME Year Ended June 30, 2000 (dollars in thousands)
AmeriCredit Non- Corp. Guarantors Guarantors Eliminations Consolidated ----------- ---------- ---------- ------------ ------------ Revenue Finance charge income............... $ 74,467 $ 49,683 $124,150 Gain on sale of receivables.......... $ (284) 15,344 194,010 209,070 Servicing fee income.. 128,589 41,662 170,251 Other income.......... 45,064 306,556 540,627 $ (886,038) 6,209 Equity in income of affiliates........... 117,148 131,764 (248,912) -------- -------- -------- ----------- -------- 161,928 656,720 825,982 (1,134,950) 509,680 -------- -------- -------- ----------- -------- Costs and expenses Operating expenses.... 9,724 178,935 34,560 223,219 Provision for loan losses............... 8,072 8,287 16,359 Interest expense...... 39,360 347,103 568,885 (886,038) 69,310 Charge for closing mortgage operations.. 10,500 10,500 -------- -------- -------- ----------- -------- 49,084 544,610 611,732 (886,038) 319,388 -------- -------- -------- ----------- -------- Income before income taxes.................. 112,844 112,110 214,250 (248,912) 190,292 Income tax (benefit) provision.............. (1,657) (5,038) 82,486 75,791 -------- -------- -------- ----------- -------- Net income.............. $114,501 $117,148 $131,764 $ (248,912) $114,501 ======== ======== ======== =========== ========
28 AMERICREDIT CORP. FINANCIAL STATEMENT SCHEDULE CONSOLIDATING STATEMENT OF INCOME Year Ended June 30, 1999 (dollars in thousands)
AmeriCredit Non- Corp. Guarantors Guarantors Eliminations Consolidated ----------- ---------- ---------- ------------ ------------ Revenue Finance charge income............... $ 42,302 $ 32,986 $ 75,288 Gain on sale of receivables.......... $ (6,394) 2,400 173,886 169,892 Servicing fee income.. 77,427 8,539 85,966 Other income.......... 41,114 211,671 376,000 $(624,475) 4,310 Equity in income of affiliates........... 73,633 105,572 (179,205) -------- -------- -------- --------- -------- 108,353 439,372 591,411 (803,680) 335,456 -------- -------- -------- --------- -------- Costs and expenses Operating expenses.... 7,488 147,583 10,274 165,345 Provision for loan losses............... 3,979 5,650 9,629 Interest expense...... 23,924 239,144 400,199 (624,475) 38,792 -------- -------- -------- --------- -------- 31,412 390,706 416,123 (624,475) 213,766 -------- -------- -------- --------- -------- Income before income taxes.................. 76,941 48,666 175,288 (179,205) 121,690 Income tax provision (benefit).............. 2,101 (24,967) 69,716 46,850 -------- -------- -------- --------- -------- Net income.............. $ 74,840 $ 73,633 $105,572 $(179,205) $ 74,840 ======== ======== ======== ========= ========
29 AMERICREDIT CORP. FINANCIAL STATEMENT SCHEDULE CONSOLIDATING STATEMENT OF CASH FLOWS Year Ended June 30, 2001 (dollars in thousands)
AmeriCredit Non- Corp. Guarantors Guarantors Eliminations Consolidated ----------- ----------- ----------- ------------ ------------ Cash flows from operating activities: Net income............. $ 222,852 $ 251,580 $ 257,989 $ (509,569) $ 222,852 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization........ 19,740 19,740 Provision for loan losses.............. 8,618 22,769 31,387 Deferred income taxes............... 162,817 76,814 (156,684) 82,947 Accretion of present value discount and other............... (93,449) (93,449) Non-cash gain on sale of auto receivables......... (243,991) (243,991) Distributions from Trusts................ 214,629 214,629 Equity in income of affiliates............ (251,580) (257,989) 509,569 Changes in assets and liabilities: Other assets......... 1,923 (9,960) 2,660 (5,377) Accrued taxes and expenses............ 1,258 40,434 1,722 43,414 --------- ----------- ----------- ----------- ----------- Net cash provided by operating activities............ 137,270 129,237 5,645 272,152 --------- ----------- ----------- ----------- ----------- Cash flows from investing activities: Purchases of auto receivables........... (6,367,796) (6,260,175) 6,260,175 (6,367,796) Principal collections and recoveries on receivables........... (8,587) 119,399 110,812 Net proceeds from sale of auto receivables... 6,260,175 5,173,763 (6,260,175) 5,173,763 Net proceeds from sale of mortgage receivables........... 676 676 Initial deposits to credit enhancement assets................ (180,008) (180,008) Borrowings under credit enhancement facility.............. 57,000 57,000 Purchases of property and equipment......... (34,278) (34,278) Change in other assets................ (47,677) (16,903) (64,580) Net change in investment in affiliates............ (6,182) (1,381,810) (55,674) 1,443,666 --------- ----------- ----------- ----------- ----------- Net cash used by investing activities............ (6,182) (1,579,297) (1,162,598) 1,443,666 (1,304,411) --------- ----------- ----------- ----------- ----------- Cash flows from financing activities: Net change in warehouse credit facilities............ 19,424 995,755 1,015,179 Net change in notes payable............... (5,369) (5,369) Proceeds from issuance of common stock....... 56,586 11,642 1,432,024 (1,443,666) 56,586 Net change in due (to) from affiliates....... (182,305) 1,447,243 (1,264,938) --------- ----------- ----------- ----------- ----------- Net cash (used) provided by financing activities............ (131,088) 1,478,309 1,162,841 (1,443,666) 1,066,396 --------- ----------- ----------- ----------- ----------- Net increase in cash and cash equivalents....... 28,249 5,888 34,137 Cash and cash equivalents at beginning of year...... 30,705 12,211 42,916 --------- ----------- ----------- ----------- ----------- Cash and cash equivalents at end of year................... $ $ 58,954 $ 18,099 $ $ 77,053 ========= =========== =========== =========== ===========
30 AMERICREDIT CORP. FINANCIAL STATEMENT SCHEDULE CONSOLIDATING STATEMENT OF CASH FLOWS Year Ended June 30, 2000 (dollars in thousands)
AmeriCredit Non- Corp. Guarantors Guarantors Eliminations Consolidated ----------- ----------- ----------- ------------ ------------ Cash flows from operating activities: Net income............ $ 114,501 $ 117,148 $ 131,764 $ (248,912) $ 114,501 Adjustments to reconcile net income to net cash provided by operating activities: Non-cash charge for closing mortgage operations......... 6,566 6,566 Depreciation and amortization....... 19,357 19,357 Provision for loan losses............. 8,072 8,287 16,359 Deferred income taxes.............. (48,997) (18,307) 82,692 15,388 Accretion of present value discount and other.............. (44,083) (44,083) Non-cash gain on sale of auto receivables........ (186,176) (186,176) Distributions from Trusts............... 125,104 125,104 Equity in income of affiliates........... (117,148) (131,764) 248,912 Changes in assets and liabilities: Other assets........ (19) (15,756) (8,066) (23,841) Accrued taxes and expenses........... (2,004) 23,236 6,467 27,699 --------- ----------- ----------- ----------- ----------- Net cash (used) provided by operating activities........... (53,667) 8,552 115,989 70,874 --------- ----------- ----------- ----------- ----------- Cash flows from investing activities: Purchases of auto receivables.......... (4,425,836) (4,405,708) 4,405,708 (4,425,836) Originations of mortgage receivables.......... (109,688) (109,688) Principal collections and recoveries on receivables.......... (10,984) 54,740 43,756 Net proceeds from sale of auto receivables.. 4,405,708 3,955,404 (4,405,708) 3,955,404 Net proceeds from sale of mortgage receivables.......... 126,866 126,866 Initial deposits to credit enhancement assets............... (192,000) (192,000) Borrowings under credit enhancement facility............. 72,000 72,000 Purchases of property and equipment........ (9,751) (9,751) Change in other assets............... (1,521) (9,711) (11,232) Net change in investment in affiliates........... 20,131 (170,007) (1,486) 151,362 --------- ----------- ----------- ----------- ----------- Net cash provided (used) by investing activities........... 20,131 (195,213) (526,761) 151,362 (550,481) --------- ----------- ----------- ----------- ----------- Cash flows from financing activities: Net change in warehouse credit facilities........... (15,629) 388,670 373,041 Net change in notes payable.............. (11,079) (11,079) Proceeds from issuance of common stock...... 139,372 2,692 148,670 (151,362) 139,372 Net change in due (to) from affiliates...... (94,757) 210,057 (115,300) --------- ----------- ----------- ----------- ----------- Net cash provided by financing activities........... 33,536 197,120 422,040 (151,362) 501,334 --------- ----------- ----------- ----------- ----------- Net increase in cash and cash equivalents....... 10,459 11,268 21,727 Cash and cash equivalents at beginning of year...... 20,246 943 21,189 --------- ----------- ----------- ----------- ----------- Cash and cash equivalents at end of year................... $ $ 30,705 $ 12,211 $ $ 42,916 ========= =========== =========== =========== ===========
31 AMERICREDIT CORP. FINANCIAL STATEMENT SCHEDULE CONSOLIDATING STATEMENT OF CASH FLOWS Year Ended June 30, 1999 (dollars in thousands)
AmeriCredit Non- Corp. Guarantors Guarantors Eliminations Consolidated ----------- ----------- ----------- ------------ ------------ Cash flows from operating activities: Net income............ $ 74,840 $ 73,633 $ 105,572 $ (179,205) $ 74,840 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization....... 41 12,604 12,645 Provision for loan losses............. 3,979 5,650 9,629 Deferred income taxes.............. (1,375) (25,379) 70,118 43,364 Accretion of present value discount and other.............. (12,525) (12,525) Non-cash gain on sale of auto receivables........ (157,757) (157,757) Distributions from Trusts............... 44,531 44,531 Equity in income of affiliates........... (73,633) (105,572) 179,205 Changes in assets and liabilities: Other assets........ 3,304 (11,950) 2,469 (6,177) Accrued taxes and expenses........... 18,342 13,095 4,803 36,240 --------- ----------- ----------- ----------- ----------- Net cash provided (used) by operating activities........... 21,519 (39,590) 62,861 44,790 --------- ----------- ----------- ----------- ----------- Cash flows from investing activities: Purchases of auto receivables.......... (2,869,776) (2,783,160) 2,783,160 (2,869,776) Originations of mortgage receivables.......... (297,535) (297,535) Principal collections and recoveries on receivables.......... 6,381 15,143 21,524 Net proceeds from sale of auto receivables.. 2,783,160 2,727,763 (2,783,160) 2,727,763 Net proceeds from sale of mortgage receivables.......... 294,096 294,096 Initial deposits to credit enhancement assets............... (82,750) (82,750) Return of deposits from restricted cash................. 23,000 23,000 Purchases of property and equipment........ (215) (14,513) (14,728) Change in other assets............... (5,514) (4,948) (10,462) Net change in investment in affiliates........... 93 (104,103) (1,048) 105,058 --------- ----------- ----------- ----------- ----------- Net cash used by investing activities........... (122) (207,804) (106,000) 105,058 (208,868) --------- ----------- ----------- ----------- ----------- Cash flows from financing activities: Net change in warehouse credit facilities........... (4,610) (46,339) (50,949) Net proceeds from issuance of senior notes................ 194,097 194,097 Net change in notes payable.............. (3,890) (26) (3,916) Proceeds from issuance of common stock...... 12,948 139 104,919 (105,058) 12,948 Net change in due (to) from affiliates...... (224,552) 241,980 (17,428) --------- ----------- ----------- ----------- ----------- Net cash (used) provided by financing activities........... (21,397) 237,483 41,152 (105,058) 152,180 --------- ----------- ----------- ----------- ----------- Net decrease in cash and cash equivalents....... (9,911) (1,987) (11,898) Cash and cash equivalents at beginning of year...... 30,157 2,930 33,087 --------- ----------- ----------- ----------- ----------- Cash and cash equivalents at end of year................... $ $ 20,246 $ 943 $ $ 21,189 ========= =========== =========== =========== ===========
32 REPORT OF INDEPENDENT ACCOUNTANTS ON FINANCIAL STATEMENT SCHEDULES Board of Directors and Shareholders AmeriCredit Corp. Our audits of the consolidated financial statements referred to in our report dated August 7, 2001 appearing in the 2001 Annual Report to Shareholders of AmeriCredit Corp. (which report and consolidated financial statements are incorporated by reference in this Annual Report on Form 10-K) also included an audit of the financial statement schedules listed in Item 14(2) of this Form 10-K. In our opinion, these financial statement schedules present fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. PricewaterhouseCoopers LLP Fort Worth, Texas August 7, 2001 33 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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, on September 25, 2001. AmeriCredit Corp. /s/ Clifton H. Morris, Jr. By: _______________________________________ Clifton H. Morris, Jr. Executive Chairman of the Board
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Signature Title Date --------- ----- ---- /s/ Clifton H. Morris, Jr. Executive Chairman of the September 25, 2001 ___________________________________________ Board Clifton H. Morris, Jr. /s/ Michael R. Barrington Vice Chairman, Chief September 25, 2001 ___________________________________________ Executive Officer and Michael R. Barrington President /s/ Daniel E. Berce Vice Chairman and September 25, 2001 ___________________________________________ Chief Financial Officer Daniel E. Berce /s/ Edward H. Esstman Vice Chairman September 25, 2001 ___________________________________________ Edward H. Esstman /s/ A.R. Dike Director September 25, 2001 ___________________________________________ A.R. Dike /s/ James H. Greer Director September 25, 2001 ___________________________________________ James H. Greer /s/ Douglas K. Higgins Director September 25, 2001 ___________________________________________ Douglas K. Higgins /s/ Kenneth H. Jones, Jr. Director September 25, 2001 ___________________________________________ Kenneth H. Jones, Jr.
34 INDEX TO EXHIBITS The following documents are filed as a part of this report. Those exhibits previously filed and incorporated herein by reference are identified by the numbers in parenthesis under the Exhibit Number column. Documents filed with this report are identified by the symbol "@" under the Exhibit Number column.
Exhibit No. Description ----------- ----------- 3.1 (1) Articles of Incorporation of the Company, filed May 18, 1988, and Articles of Amendment to Articles of Incorporation, filed August 24, 1988 (Exhibit 3.1) 3.2 (1) Amendment to Articles of Incorporation, filed October 18, 1989 (Exhibit 3.2) 3.3 (4) Articles of Amendment to Articles of Incorporation of the Company, filed November 12, 1992 (Exhibit 3.3) 3.4 (7) Bylaws of the Company, as amended (Exhibit 3.4) 4.1 (3) Specimen stock certificate evidencing the Common Stock (Exhibit 4.1) 4.2 (9) Rights Agreement, dated August 28, 1997, between the Company and ChaseMellon Shareholder Services, L.L.C. (Exhibit 4.1) 4.2.1 (15) Amendment No. 1 to Rights Agreement, dated September 9, 1999, between the Company and ChaseMellon Shareholder Services, L.L.C. (Exhibit 4.1) 4.3 (14) Indenture, dated as of April 20, 1999, between AmeriCredit Corp. and subsidiaries and Bank One, Columbus, NA, with form of 9.875% Senior Notes due 2006 (Exhibit 4.3) 10.1 (2) 1990 Stock Option Plan for Non-Employee Directors of the Company (Exhibit 10.14) 10.2 (3) 1991 Key Employee Stock Option Plan of the Company (Exhibit 10.10) 10.3 (21) 2000 Limited Omnibus and Incentive Plan for AmeriCredit Corp. 10.4 (3) Executive Employment Agreement, dated January 30, 1991, between the Company and Clifton H. Morris, Jr. (Exhibit 10.18) 10.4.1 (7) Amendment No. 1 to Executive Employment Agreement, dated May 1, 1997, between the Company and Clifton H. Morris, Jr. (Exhibit 10.7.1) 10.4.2 (17) Amendment No. 2 to Executive Employment Agreement, dated June 15, 2000, between the Company and Clifton H. Morris, Jr. (Exhibit 10.6.2) 10.5 (3) Executive Employment Agreement, dated January 30, 1991, between the Company and Michael R. Barrington (Exhibit 10.19) 10.5.1 (7) Amendment No. 1 to Executive Employment Agreement, dated May 1, 1997, between the Company and Michael R. Barrington (Exhibit 10.8.1) 10.6 (3) Executive Employment Agreement, dated January 30, 1991 between the Company and Daniel E. Berce (Exhibit 10.20) 10.6.1 (7) Amendment No. 1 to Executive Employment Agreement, dated May 1, 1997, between the Company and Daniel E. Berce (Exhibit 10.9.1) 10.7 (7) Amended and Restated Employment Agreement, dated October 15, 1996, between the Company and Edward H. Esstman (Exhibit 10.10) 10.7.1 (7) Amendment No. 1 to Amended and Restated Employment Agreement, dated May 1, 1997, between the Company and Edward H. Esstman (Exhibit 10.10.1) 10.7.2 (@) Amendment No. 2 to Amended and Restated Employment Agreement, dated August 7, 2001, between the Company and Edward H. Esstman 10.8 (7) Amended and Restated Employment Agreement, dated July 1, 1997, between the Company and Michael T. Miller (Exhibit 10.11)
35
Exhibit No. Description ----------- ----------- 10.8.1 (12) Amendment No. 1 to Amended and Restated Employment Agreement, dated as of August 1, 1998, between the Company and Michael T. Miller (Exhibit 10.10.1) 10.8.2 (17) Amendment No. 2 to Amended and Restated Employment Agreement, dated as of October 1, 1999, between the Company and Michael T. Miller (Exhibit 10.10.2) 10.9 (16) Security Agreement, dated as of September 30, 1999, among Kitty Hawk Funding Corporation, AmeriCredit BOA Trust, AmeriCredit Financial Services, Inc., AmeriCredit Funding Corp. II and Bank of America, N.A. (Exhibit 10.1) 10.9.1 (16) Note Purchase Agreement, dated as of September 30, 1999, among AmeriCredit BOA Trust, Kitty Hawk Funding Corporation and Bank of America, N.A. (Exhibit 10.2) 10.10 (16) Amended and Restated Sale and Servicing Agreement, dated September 21, 1999, among CP Funding Corp., Americredit Financial Services, Inc. and The Chase Manhattan Bank (Exhibit 10.3) 10.10.1 (16) Amended and Restated Security Agreement, dated September 21, 1999, among CP Funding Corp., The Chase Manhattan Bank and the several secured parties and funding agents party thereto from time to time (Exhibit 10.4) 10.11 (16) Credit Agreement, dated as of October 14, 1999, among AFS Funding Corp., AmeriCredit Corp., AmeriCredit Financial Services, Inc., AmeriCredit Management Company, the Financial Institutions from time to time party thereto as lenders, Bankers Trust Company and Credit Suisse First Boston, New York Branch (Exhibit 10.5) 10.11.1 (16) Security and Collateral Agent Agreement, dated as of October 14, 1999, among Credit Suisse First Boston, New York Branch, Bankers Trust Company, AmeriCredit Financial Services, Inc. and AFS Funding Corp. (Exhibit 10.6) 10.11.2 (16) Replacement Cash Collateral Account Agreement, dated as of October 14, 1999, among AFS Funding Corp., Financial Security Assurance, Inc., Credit Suisse First Boston, New York Branch, and Bank One, N.A. (Exhibit 10.7) 10.11.3 (16) Subordination and Intercreditor Agreement, dated as of October 14, 1999, among AFS Funding Corp., AFS Funding Trust, the AmeriCredit securitization trusts party thereto as Issuers, AmeriCredit Financial Services, Inc., AmeriCredit Management Company, AmeriCredit Corp., Bankers Trust Company, Bankers Trust (Delaware), Credit Suisse First Boston, the Junior Lien Holders party thereto, Financial Security Assurance, Inc., Harris Trust and Savings Bank, LaSalle Bank National Association and Bank One, N.A. (Exhibit 10.8) 10.12 (10) Indenture, dated February 4, 1997, between AmeriCredit Corp. and subsidiaries and Bank One, Columbus, NA, with respect to Series A and Series B 9 1/4% Senior Notes due 2004 (Exhibit 10.2) 10.13 (5) 1995 Omnibus Stock and Incentive Plan for AmeriCredit Corp. 10.13.1 (8) Amendment No. 1 to 1995 Omnibus Stock and Incentive Plan for AmeriCredit Corp. 10.14 (6) 1996 Limited Stock Option Plan for AmeriCredit Corp. 10.14.1 (@) Amendment No. 1 to 1996 Limited Stock Option Plan for AmeriCredit Corp. 10.15 (11) Indenture, dated January 29, 1998, between AmeriCredit Corp. and subsidiaries and Bank One, N.A., with respect to Series C and Series D 9 1/4% Senior Notes due 2004 (Exhibit 10.24) 10.16 (13) 1998 Limited Stock Option Plan for AmeriCredit Corp. 10.16.1 (@) Amendment No. 1 to 1998 Limited Stock Option Plan for AmeriCredit Corp. 10.17 (14) Receivables Financing Agreement, dated as of March 31, 1999, among AmeriCredit Warehouse Trust, AmeriCredit Financial Services, Inc., AmeriCredit Funding Corp., Americredit Corporation of California, Credit Suisse First Boston, New York Branch, and Bank One, N.A. (Exhibit 10.24)
36
Exhibit No. Description ----------- ----------- 10.17.1 (14) Master Receivables Purchase Agreement, dated as of March 31, 1999, among AmeriCredit Financial Services, Inc., AmeriCredit Funding Corp., Americredit Corporation of California and Bank One, N.A. (Exhibit 10.25) 10.17.2 (14) Security and Collateral Agent Agreement, dated as of March 31, 1999, among Credit Suisse First Boston, New York Branch, Bank One, N.A., AmeriCredit Financial Services, Inc. and AmeriCredit Warehouse Trust (Exhibit 10.26) 10.17.3 (17) Commitment Extension Agreement, dated as of March 29, 2000, among AmeriCredit Warehouse Trust, AmeriCredit Financial Services, Inc. and Credit Suisse First Boston, New York Branch (Exhibit 10.19.3) 10.18 (17) Amended and Restated Servicing and Custodian Agreement, dated as of August 31, 2000, between AmeriCredit Financial Services, Inc., AmeriCredit Barclays Trust, Bank One, N.A., and Barclays Bank, PLC (Exhibit 10.22) 10.18.1 (17) Amended and Restated Security Agreement, dated as of August 31, 2000, between AmeriCredit Financial Services, Inc., AmeriCredit Funding Corp. III, AmeriCredit Barclays Trust, Sheffield Receivables Corporation, Barclays Bank, PLC, and Bank One, N.A. (Exhibit 10.22.1) 10.18.2 (17) Note Purchase Agreement, dated as of June 30, 2000, between the AmeriCredit Barclays Trust, AmeriCredit Financial Services, Inc., Sheffield Receivables Corporation, and Barclays Bank, PLC (Exhibit 10.22.2) 10.19 (17) Receivables Financing Agreement, dated as of June 30, 2000, among AmeriCredit DB Trust, AmeriCredit Financial Services, Inc., AmeriCredit Funding Corp. IV, the lenders party thereto from time to time, Deutsche Bank AG, New York Branch, and Bank One, N.A. (Exhibit 10.23) 10.19.1 (17) Security and Collateral Agent Agreement, dated as of June 30, 2000, among Deutsche Bank AG, New York Branch, Bank One, N.A., AmeriCredit Financial Services, Inc., and AmeriCredit DB Trust (Exhibit 10.23.1) 10.20 (18) Second Amendment to Security Agreement and Note Purchase Agreement, dated as of September 27, 2000, by and among AmeriCredit BOA Trust, AmeriCredit Financial Services, Inc., AmeriCredit Funding Corp. II, Kitty Hawk Funding Corporation, and Bank of America, N.A. (Exhibit 10.1) 10.21 (18) Third Amendment to Receivables Financing Agreement, dated as of October 5, 2000, among AmeriCredit Financial Services, Inc., AmeriCredit Warehouse Trust, AmeriCredit Funding Corp., AmeriCredit Corporation of California, Bank One, N.A., and Credit Suisse First Boston, New York Branch (Exhibit 10.2) 10.22 (18) Sale and Servicing Agreement, dated as of September 14, 2000, among AmeriCredit Manhattan Trust, AmeriCredit Financial Services, Inc., AmeriCredit Funding Corp. V, and The Chase Manhattan Bank (Exhibit 10.3) 10.23 (18) Security and Funding Agreement, dated as of September 14, 2000, by and among AmeriCredit Manhattan Trust, The Chase Manhattan Bank, and the several Secured Parties and Funding Agents party thereto (Exhibit 10.4) 10.24 (19) Servicing and Custodian Agreement, dated as of December 18, 2000, by and among AmeriCredit MTN Receivables Trust, AmeriCredit Financial Services, Inc., AmeriCredit MTN Corp., and The Chase Manhattan Bank (Exhibit 10.1) 10.25 (19) Security Agreement, dated as of December 18, 2000, by and among AmeriCredit MTN Receivables Trust, AmeriCredit Financial Services, Inc., AmeriCredit MTN Corp., and The Chase Manhattan Bank (Exhibit 10.2) 10.26 (19) Master Receivables Purchase Agreement, dated as of December 18, 2000, by and among AmeriCredit MTN Receivables Trust, AmeriCredit Financial Services, Inc., AmeriCredit MTN Corp., and The Chase Manhattan Bank (Exhibit 10.3)
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Exhibit No. Description ----------- ----------- 10.27 (20) Fourth Amendment to Receivables Financing Agreement and Third Amendment to CSFB Joinder, dated as of March 27, 2001, among AmeriCredit Warehouse Trust, AmeriCredit Financial Services, Inc., AmeriCredit Funding Corp., Americredit Corporation of California, Credit Suisse First Boston, New York Branch, and Bank One, NA (Exhibit 10.1) 10.28 (@) Amendment No. 1, dated as of March 30, 2001, to the Sale and Servicing Agreement, by and among AmeriCredit Manhattan Trust, AmeriCredit Financial Services, Inc., AmeriCredit Funding Corp. V, and The Chase Manhattan Bank 10.29 (@) Amended and Restated Security and Funding Agreement, dated as of March 30, 2001, by and among AmeriCredit Manhattan Trust, The Chase Manhattan Bank and the several secured parties and funding agents party thereto 10.30 (@) Amendment No. 2, dated as of April 27, 2001, to the Sale and Servicing Agreement, by and among AmeriCredit Manhattan Trust, AmeriCredit Financial Services, Inc., AmeriCredit Funding Corp. V and The Chase Manhattan Bank 10.31 (@) Second Amended and Restated Security and Funding Agreement, dated as of April 27, 2001, by and among AmeriCredit Manhattan Trust, The Chase Manhattan Bank and the several secured parties and funding agents party thereto 10.32 (@) Third Amendment to Security Agreement and Termination Agreement, dated as of May 15, 2001, by and among AmeriCredit BOA Trust, AmeriCredit Financial Services, Inc., AmeriCredit Funding Corp. II, Kitty Hawk Funding Corporation, and Bank of America, N.A. 10.33 (@) Sale and Servicing Agreement, dated as of May 31, 2001 among AmeriCredit One Trust, AmeriCredit Financial Services, Inc., AmeriCredit Funding Corp. VI, and Bank One, N.A. 10.34 (@) Security and Funding Agreement, dated as of May 31, 2001, by and among AmeriCredit One Trust, Bank One, N.A. and the several secured parties party thereto 10.35 (@) Fifth Amendment to Receivables Financing Agreement and Fourth Amendment to CSFB Joinder, dated as of June 15, 2001, among AmeriCredit Warehouse Trust, AmeriCredit Financial Services, Inc., AmeriCredit Funding Corp., Americredit Corporation of California, Credit Suisse First Boston, New York Branch, and Bank One, N.A. 10.36 (@) Master Receivables Purchase Agreement, dated as of June 12, 2001, among AmeriCredit MTN Receivables Trust II, The Chase Manhattan Bank, and AmeriCredit Financial Services, Inc. 10.37 (@) Servicing and Custodian Agreement, dated as of June 12, 2001, by and among AmeriCredit MTN Receivables Trust II, AmeriCredit Financial Services, Inc. and The Chase Manhattan Bank 10.38 (@) Security Agreement, dated as of June 12, 2001, by and among AmeriCredit MTN Receivables Trust II, AmeriCredit Financial Services, Inc., AmeriCredit MTN Corp. II, and The Chase Manhattan Bank 10.39 (@) First Amendment to Receivables Financing Agreement, dated as of June 29, 2001, among AmeriCredit DB Trust, AmeriCredit Financial Services, Inc., AmeriCredit Funding Corp. IV, Deutsche Bank AG, New York Branch, and Bank One, N.A. 10.40 (@) Amendment No. 1, dated as of June 27, 2001, to the Amended and Restated Security Agreement, by and among AmeriCredit Barclays Trust, AmeriCredit Financial Services, Inc., AmeriCredit Funding Corp. III, Sheffield Receivables Corporation, and Bank One, N.A. 10.41 (@) Construction Loan Agreement, dated as of June 29, 2001, between ACF Investment Corp. and Wells Fargo Bank, National Association 11.1 (@) Statement Re Computation of Per Share Earnings
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Exhibit No. Description ----------- ----------- 12.1 (@) Statement Re Computation of Ratios 13.1 (@) 2001 Annual Report to Shareholders of the Company 21.1 (@) Subsidiaries of the Registrant 23.1 (@) Consent of Independent Accountants
-------- (1) Incorporated by referenced to the exhibit shown in parenthesis included in Registration Statement No. 33-31220 on Form S-1 filed by the Company with the Securities and Exchange Commission. (2) Incorporated by reference to the exhibit shown in parenthesis included in the Company's Annual Report on Form 10-K for the year ended June 30, 1990, filed by the Company with the Securities and Exchange Commission. (3) Incorporated by reference to the exhibit shown in parenthesis included in the Company's Annual Report on Form 10-K for the year ended June 30, 1991, filed by the Company with the Securities and Exchange Commission. (4) Incorporated by reference to the exhibit shown in parenthesis included in the Company's Annual Report on Form 10-K for the year ended June 30, 1993, filed by the Company with the Securities and Exchange Commission. (5) Incorporated by reference from the Company's Proxy Statement for the year ended June 30, 1995, filed by the Company with the Securities and Exchange Commission. (6) Incorporated by reference from the Company's Proxy Statement for the year ended June 30, 1996, filed by the Company with the Securities and Exchange Commission. (7) Incorporated by reference to exhibit shown in parenthesis included in the Company's Annual Report on Form 10-K for the year ended June 30, 1997, filed by the Company with the Securities and Exchange Commission. (8) Incorporated by reference from the Company's Proxy Statement for the year ended June 30, 1997, filed by the Company with the Securities and Exchange Commission. (9) Incorporated by reference to the exhibit shown in parenthesis included in the Company's Report on Form 8-K, dated August 28, 1997, filed by the Company with the Securities and Exchange Commission. (10) Incorporated by reference to the exhibit shown in parenthesis included in the Company's Quarterly Report on Form 10-Q for the quarterly period ended December 31, 1996, filed by the Company with the Securities and Exchange Commission. (11) Incorporated by reference to the exhibit shown in parenthesis included in the Company's Registration Statement on Form S-4, dated March 26, 1998, filed by the Company with the Securities and Exchange Commission. (12) Incorporated by reference to the exhibit shown in parenthesis included in the Company's Annual Report on Form 10-K for the year ended June 30, 1998, filed by the Company with the Securities and Exchange Commission. (13) Incorporated by reference from the Company's Proxy Statement for the year ended June 30, 1998, filed by the Company with the Securities and Exchange Commission. (14) Incorporated by reference to the exhibit shown in parenthesis included in the Company's Registration Statement on Form S-4, dated June 15, 1999, filed by the Company with the Securities and Exchange Commission. (15) Incorporated by reference to the exhibit shown in parenthesis included in the Company's Report on Form 8-K, dated September 7, 1999, filed by the Company with the Securities and Exchange Commission. (16) Incorporated by reference to the exhibit shown in parenthesis included in the Company's Quarterly Report on Form 10-Q for the quarterly period ended December 31, 1999, filed by the Company with the Securities and Exchange Commission. (17) Incorporated by reference to the exhibit shown in parenthesis included in the Company's Annual Report on Form 10-K for the year ended June 30, 2000, filed by the Company with the Securities and Exchange Commission. 39 (18) Incorporated by reference to the exhibit shown in parenthesis included in the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2000, filed by the Company with the Securities and Exchange Commission. (19) Incorporated by reference to the exhibit shown in parenthesis included in the Company's Quarterly Report on Form 10-Q for the quarterly period ended December 31, 2000, filed by the Company with the Securities and Exchange Commission. (20) Incorporated by reference to the exhibit shown in parenthesis included in the Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2001, filed by the Company with the Securities and Exchange Commission. (21) Incorporated by reference from the Company's Proxy Statement for the year ended June 30, 2000, filed by the Company with the Securities and Exchange Commission. (@) Filed herewith 40