AmeriCredit Corp. (ACF) filed Quarterly Report for the period ended 2009-09-30.
AmeriCredit Corp. is a leading independent automobile finance company that provides financing solutions indirectly through auto dealers and directly to consumers in the United States and Canada. Americredit Corp. has a market cap of $2.47 billion; its shares were traded at around $18.54 with a P/E ratio of 309.1 and P/S ratio of 1.2. Americredit Corp. had an annual average earning growth of 13.2% over the past 10 years. GuruFocus rated Americredit Corp. the business predictability rank of 2.5-star.
Highlight of Business Operations:
The average new loan size decreased to $16,331 for the three months ended September 30, 2009, from $17,773 for the three months ended September 30, 2008. The average annual percentage rate for finance receivables purchased during the three months ended September 30, 2009, increased to 19.1% from 16.6% during the three months ended September 30, 2008.
Finance charge income decreased by 27.0% to $389.8 million for the three months ended September 30, 2009, from $534.0 million for the three months
Operating expenses decreased by 18.3% to $68.9 million for the three months ended September 30, 2009, from $84.3 million for the three months ended September 30, 2008, as a result of reduced loan origination levels and lower average finance receivables. Our operating expenses are predominately related to personnel costs that include base salary and wages, performance incentives and benefits as well as related employment taxes. Personnel costs represented 70.1% and 70.9% of total operating expenses for the three months ended September 30, 2009 and 2008, respectively.
Provisions for loan losses are charged to operations to bring our allowance for loan losses to a level which management considers adequate to absorb probable credit losses inherent in the portfolio of finance receivables. The provision for loan losses recorded for the three months ended September 30, 2009 and 2008, reflects inherent losses on receivables originated during those quarters and changes in the amount of inherent losses on receivables originated in prior periods. The provision for loan losses decreased to $158.0 million for the three months ended September 30, 2009, from $274.9 million for the three months ended September 30, 2008, as a result of reduced loan
Interest expense decreased to $130.1 million for the three months ended September 30, 2009, from $200.7 million for the three months ended September 30, 2008. Interest expense reflects the adoption of FSP APB 14-1 (ASC 470 20 65-1), which was applied retrospectively. We have separately accounted for the liability and equity components of our convertible senior notes retrospectively, which results in recognizing interest expense based on a borrowing rate at the time of issuance for similar unsecured senior debt without an equity conversion feature. Average debt outstanding was $9.2 billion and $13.5 billion for the three months ended September 30, 2009 and 2008, respectively. Our effective rate of interest on our debt decreased to 5.6% for the three months ended September 30, 2009, compared to 5.9% for the three months ended September 30, 2008, due to lower base borrowing rates associated with the advances under our credit facilities.
Canadian currency translation adjustment gains of $6.9 million and losses of $1.3 million for the three months ended September 30, 2009 and 2008, respectively, were included in other comprehensive income. The translation adjustment is due to the change in the value of our Canadian dollar denominated assets related to the change in the U.S. dollar to Canadian dollar conversion rates during the three months ended September 30, 2009 and 2008.
ACF is in the portfolios of Ian Cumming of Leucadia National, Bruce Berkowitz of Fairholme Capital Management, Donald Yacktman of Yacktman Asset Management Co., Chuck Akre of Akre Capital Management, LLC, Bill Miller of Legg Mason Value Trust.
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