General Motors Financial (ACF) 10-Q 2009 Q4 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended December 31, 2009

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 Incorporation or organization)	(I.R.S. Employer Identification No.)

801 Cherry Street, Suite 3500, Fort Worth, Texas 76102

(Address of principal executive offices, including Zip Code)

(817) 302-7000

(Registrant’s telephone number, including area code)

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 105 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ¨    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes  ¨    No  x

There were 133,874,468 shares of common stock, $0.01 par value outstanding as of January 31, 2010.

AMERICREDIT CORP.

INDEX TO FORM 10-Q

			Page
Part I. FINANCIAL INFORMATION
	Item 1.	CONDENSED FINANCIAL STATEMENTS (UNAUDITED)	3
		Consolidated Balance Sheets – December 31, 2009 and June 30, 2009	3
		Consolidated Statements of Operations and Comprehensive Operations – Three and Six Months Ended December 31, 2009 and 2008	4
		Consolidated Statements of Cash Flows – Six Months Ended December 31, 2009 and 2008	5
		Notes to Consolidated Financial Statements	6
	Item 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	34
	Item 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	55
	Item 4.	CONTROLS AND PROCEDURES	56
Part II. OTHER INFORMATION
	Item 1.	LEGAL PROCEEDINGS	56
	Item 1A.	RISK FACTORS	57
	Item 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	57
	Item 3.	DEFAULTS UPON SENIOR SECURITIES	57
	Item 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	57
	Item 5.	OTHER INFORMATION	57
	Item 6.	EXHIBITS	57
SIGNATURE			58

2

Part I.    FINANCIAL INFORMATION

Item 1. CONDENSED FINANCIAL STATEMENTS

AMERICREDIT CORP.

Consolidated Balance Sheets

(Unaudited, Dollars in Thousands)

	December 31, 2009			June 30, 2009 (a) (Revised)
Assets
Cash and cash equivalents	$	319,644		$	193,287
Finance receivables, net		8,587,917			10,037,329
Restricted cash – securitization notes payable		850,212			851,606
Restricted cash – credit facilities		128,199			195,079
Property and equipment, net		40,270			44,195
Leased vehicles, net		131,326			156,387
Deferred income taxes		19,186			75,782
Income tax receivable		31,580			197,579
Other assets		181,170			207,083
Total assets	$	10,289,504		$	11,958,327
Liabilities and Shareholders’ Equity
Liabilities:
Credit facilities	$	709,927		$	1,630,133
Securitization notes payable		6,590,644			7,426,687
Senior notes		91,620			91,620
Convertible senior notes		403,105			392,514
Accrued taxes and expenses		159,874			157,640
Interest rate swap agreements		98,513			131,885
Other liabilities		17,429			20,540
Total liabilities		8,071,112			9,851,019
Commitments and contingencies (Note 9)
Shareholders’ equity:
Preferred stock, $.01 par value per share, 20,000,000 shares authorized; none issued
Common stock, $.01 par value per share, 350,000,000 shares authorized; 135,664,434 and 134,977,812 shares issued		1,357			1,350
Additional paid-in capital		303,361			284,961
Accumulated other comprehensive loss		(210	)		(21,099	)
Retained earnings		1,950,249			1,878,459
		2,254,757			2,143,671
Treasury stock, at cost (1,806,706 and 1,806,446 shares)		(36,365	)		(36,363	)
Total shareholders’ equity		2,218,392			2,107,308
Total liabilities and shareholders’ equity	$	10,289,504		$	11,958,327

(a) Revised for the Financial Accounting Standards Board (“FASB”) issuance of FASB Staff Position (“FSP”) Accounting Principles Board (“APB”) 14-1, Accounting for Convertible Debt Instruments That May be Settled in Cash upon Conversion (Including Partial Cash Settlement) (“FSP APB 14-1”) (Accounting Standards Codification “ASC” 470 20 65-1). See Note 1 – “Summary of Significant Accounting Policies – Adoption of New Accounting Standards” and Note 6 – “Senior Notes and Convertible Senior Notes” for additional information.

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

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AMERICREDIT CORP.

Consolidated Statements of Operations and Comprehensive Operations

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

	Three Months Ended December 31,						Six Months Ended December 31,
	2009			2008(a) (Revised)			2009			2008(a) (Revised)
Revenue
Finance charge income	$	363,100		$	497,560		$	752,896		$	1,031,533
Other income		23,655			30,626			47,143			61,702
Gain on retirement of debt					30,411						31,405
		386,755			558,597			800,039			1,124,640
Costs and expenses
Operating expenses		76,410			84,344			145,272			168,599
Leased vehicles expenses		10,221			12,157			20,331			23,071
Provision for loan losses		106,198			288,022			264,149			562,887
Interest expense		121,760			224,775			251,908			425,429
Restructuring charges, net		(49	)		2,104			(86	)		2,655
		314,540			611,402			681,574			1,182,641
Income (loss) before income taxes		72,215			(52,805	)		118,465			(58,001	)
Income tax provision (benefit)		26,186			(17,803	)		46,675			(17,725	)
Net income (loss)		46,029			(35,002	)		71,790			(40,276	)
Other comprehensive income (loss)
Unrealized gains (losses) on cash flow hedges		17,087			(61,619	)		24,498			(51,694	)
Foreign currency translation adjustment		1,344			(4,635	)		8,268			(5,920	)
Income tax (provision) benefit		(6,701	)		25,169			(11,877	)		21,890
Other comprehensive income (loss)		11,730			(41,085	)		20,889			(35,724	)
Comprehensive income (loss)	$	57,759		$	(76,087	)	$	92,679		$	(76,000	)
Earnings (loss) per share
Basic	$	0.34		$	(0.29	)	$	0.54		$	(0.34	)
Diluted	$	0.33		$	(0.29	)	$	0.52		$	(0.34	)
Weighted average shares
Basic		133,492,069			120,106,666			133,361,014			118,189,273
Diluted		137,630,694			120,106,666			136,857,076			118,189,273

(a) Revised for FSP APB 14-1 (ASC 470 20 65-1),Accounting for Convertible Debt Instruments That May be Settled in Cash upon Conversion (Including Partial Cash Settlement). See Note 1 – “Summary of Significant Accounting Policies – Adoption of New Accounting Standards” and Note 6 – “Senior Notes and Convertible Senior Notes” for additional information.

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

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AMERICREDIT CORP.

Consolidated Statements of Cash Flows

(Unaudited, in Thousands)

	Six Months Ended December 31,
	2009			2008(a) (Revised)
Cash flows from operating activities
Net income (loss)	$	71,790		$	(40,276	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		43,646			57,794
Accretion and amortization of loan fees		4,012			12,024
Provision for loan losses		264,149			562,887
Deferred income taxes		44,577			37,922
Non-cash interest charges on convertible debt		10,591			11,617
Stock-based compensation expense		6,906			7,547
Amortization of warrant costs		1,968			40,934
Gain on retirement of debt					(32,160	)
Other		(8,292	)		6,547
Changes in assets and liabilities:
Income tax receivable		166,017			(50,087	)
Other assets		3,201			(10,218	)
Accrued taxes and expenses		(3,574	)		(8,049	)
Net cash provided by operating activities		604,991			596,482
Cash flows from investing activities:
Purchases of receivables		(585,658	)		(913,555	)
Principal collections and recoveries on receivables		1,780,616			2,237,921
Purchases of property and equipment		(671	)		(974	)
Investment in money market fund					(115,821	)
Proceeds from money market fund		2,263			91,422
Change in restricted cash – securitization notes payable		1,394			98,936
Change in restricted cash – credit facilities		66,880			94,216
Change in other assets		13,852			(6,643	)
Net cash provided by investing activities		1,278,676			1,485,502
Cash flows from financing activities:
Net change in credit facilities		(920,206	)		(967,429	)
Issuance of securitization notes payable		952,493			1,000,000
Payments on securitization notes payable		(1,790,628	)		(2,158,040	)
Retirement of convertible senior notes					(214,473	)
Debt issuance costs		(4,857	)		(9,282	)
Proceeds from issuance of common stock		6,779			1,267
Other net changes		(239	)		(3,094	)
Net cash used by financing activities		(1,756,658	)		(2,351,051	)
Net increase (decrease) in cash and cash equivalents		127,009			(269,067	)
Effect of Canadian exchange rate changes on cash and cash equivalents		(652	)		2,264
Cash and cash equivalents at beginning of period		193,287			433,493
Cash and cash equivalents at end of period	$	319,644		$	166,690

(a) Revised for FSP APB 14-1 (ASC 470 20 65-1),Accounting for Convertible Debt Instruments That May be Settled in Cash upon Conversion (Including Partial Cash Settlement). See Note 1 – “Summary of Significant Accounting Policies – Adoption of New Accounting Standards” and Note 6 – “Senior Notes and Convertible Senior Notes” for additional information.

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

5

AMERICREDIT CORP.

Notes to Consolidated Financial Statements

(Unaudited)

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The consolidated financial statements include our accounts and the accounts of our wholly-owned subsidiaries, including certain special purpose financing trusts utilized in securitization transactions (“Trusts”) which are considered variable interest entities. All significant intercompany transactions and accounts have been eliminated in consolidation.

The consolidated financial statements as of December 31, 2009, and for the three and six months ended December 31, 2009 and 2008, are unaudited, and in management’s opinion include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for such interim periods. Certain prior year amounts have been reclassified to conform to the current year presentation. The results for interim periods are not necessarily indicative of results for a full year.

The interim period consolidated financial statements, including the notes thereto, are condensed and do not include all disclosures required by generally accepted accounting principles (“GAAP”) in the United States of America. These interim period financial statements should be read in conjunction with our consolidated financial statements that are included in the Current Report on Form 8-K filed on November 16, 2009, which reflect the revision of prior-period annual financial information as discussed below for the adoption of FSP APB 14-1 (ASC 470 20 65-1),Accounting for Convertible Debt Instruments That May be Settled in Cash upon Conversion (Including Partial Cash Settlement).

Subsequent Events

On January 22, 2010, we entered into an agreement with Assured Guaranty Municipal Corp., formerly known as Financial Security Assurance, Inc. to increase the levels of additional specified targeted portfolio performance ratios in the AmeriCredit Automobile Receivables Trust (“AMCAR”) 2007-D-F, AMCAR 2008-A-F, Long Beach Acceptance Corporation (“LB”) 2006-B and LB2007-A securitizations. As part of this agreement, we deposited $38.0 million in the AMCAR 2007-D-F securitization restricted cash account and $57.0 million in the AMCAR 2008-A-F securitization restricted cash account. This cash is expected to be distributed to us over time as the securitization notes payable pay down.

On February 4, 2010, we priced a $600 million senior subordinated securitization transaction, AMCAR 2010-1, that has initial cash deposit and overcollateralization requirements of 15.0% and a weighted average all-in cost of 3.7%. The transaction is expected to close on February 12, 2010.

6

We evaluated subsequent events through the date the accompanying financial statements were issued, which was February 5, 2010.

Adoption of New Accounting Standards

As of July 1, 2009, we adopted FSP APB 14-1 (ASC 470 20 65-1),Accounting for Convertible Debt Instruments That May be Settled in Cash upon Conversion (Including Partial Cash Settlement). FSP APB 14-1 (ASC 470 20 65-1) specifies that when issuers of convertible debt instruments that may be settled in cash upon conversion recognize interest cost in subsequent periods, they should separately account for the liability and equity components of the instrument in a manner that will reflect the entity’s borrowing rate at the time of issuance for similar unsecured senior debt without an equity conversion feature. The transition provision requires that entities retrospectively apply FSP APB 14-1 (ASC 470 20 65-1) for all periods presented. Our convertible senior notes due in September 2011 and September 2013 are affected by the adoption of this FSP. See Note 6 – “Senior Notes and Convertible Senior Notes” for further discussion.

The following table presents consolidated statements of operations and comprehensive operations data for the three and six months ended December 31, 2009, excluding the impact of the adoption of FSP APB 14-1 (ASC 470 20 65-1) and as reported (dollars in thousands, except per share data):

	Three Months Ended December 31, 2009				Six Months Ended December 31, 2009
	Excluding impact of FSP APB 14-1		As Reported		Excluding impact of FSP APB 14-1		As Reported
Interest expense	$	116,291	$	121,760	$	241,317	$	251,908
Income before income taxes		77,684		72,215		129,056		118,465
Income tax provision		28,090		26,186		50,848		46,675
Net income		49,594		46,029		78,208		71,790
Earnings per share:
Basic	$	0.37	$	0.34	$	0.59	$	0.54
Diluted	$	0.36	$	0.33	$	0.57	$	0.52

The following table presents consolidated statements of operations and comprehensive operations data for the three and six months ended December 31, 2008, as reported and as revised for the retrospective adoption of FSP APB 14-1 (ASC 470 20 65-1) (dollars in thousands, except per share data):

	Three Months Ended December 31, 2008						Six Months Ended December 31, 2008
	As Reported			As Revised			As Reported			As Revised
Gain on retirement of debt	$	37,873		$	30,411		$	38,867		$	31,405
Interest expense		219,063			224,775			414,109			425,429
Loss before income taxes		(39,631	)		(52,805	)		(39,219	)		(58,001	)
Income tax benefit		(14,075	)		(17,803	)		(12,001	)		(17,725	)
Net loss		(25,556	)		(35,002	)		(27,218	)		(40,276	)
Loss per share:
Basic	$	(0.21	)	$	(0.29	)	$	(0.23	)	$	(0.34	)
Diluted	$	(0.21	)	$	(0.29	)	$	(0.23	)	$	(0.34	)

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Recent Accounting Pronouncements and Accounting Changes

On August 28, 2009, the FASB issued Accounting Standards Update (“ASU”) 2009-05 to provide guidance on measuring the fair value of liabilities. The fair value of a financial instrument is defined as the price that would be paid to transfer a liability in an orderly transaction between market participants. However, most liabilities have restrictions that do not allow them to be transferred and as such there is not a market for transferring the liabilities. This accounting update states that in the absence of a market for the liability a company can use (a) the quoted price of the identical liability when traded as an asset; (b) a quoted price for similar liabilities when traded as assets; (c) or another valuation technique that is consistently applied such as a present value technique. This ASU became effective during the three months ended December 31, 2009 and did not have a material impact on our consolidated financial position, results of operations or cash flows.

On January 21, 2010, the FASB issued ASU 2010-06 to add new requirements for fair value disclosures about transfers into and out of Levels 1 and 2 and separate disclosures about purchases, sales, issuances, and settlements relating to Level 3 measurements. This ASU is effective for the first operating period beginning after December 15, 2009. Management has evaluated the impact of the update and it is not expected to have a material impact on our consolidated financial position, results of operations or cash flows.

NOTE 2 – FINANCE RECEIVABLES

Finance receivables consist of the following (in thousands):

	December 31, 2009			June 30, 2009
Finance receivables unsecuritized, net of fees	$	1,588,900		$	2,534,158
Finance receivables securitized, net of fees		7,716,076			8,393,811
Less nonaccretable acquisition fees		(6,277	)		(12,100	)
Less allowance for loan losses		(710,782	)		(878,540	)
	$	8,587,917		$	10,037,329

Finance receivables securitized represent receivables transferred to our special purpose finance subsidiaries in securitization transactions accounted for as secured financings. Finance receivables unsecuritized include $776.5 million and $2,037.6 million pledged under our credit facilities as of December 31, 2009, and June 30, 2009, respectively.

Finance receivables are collateralized by vehicle titles and we have the right to repossess the vehicle in the event the consumer defaults on the payment terms of the contract.

8

The accrual of finance charge income has been suspended on $647.1 million and $667.3 million of delinquent finance receivables as of December 31, 2009, and June 30, 2009, respectively.

Finance contracts are generally purchased by us from auto dealers without recourse, and accordingly, the dealer usually has no liability to us if the consumer defaults on the contract. Depending upon the contract structure and consumer credit attributes, we may pay dealers a participation fee or we may charge dealers a non-refundable acquisition fee when purchasing individual finance contracts. We record the amortization of participation fees and the accretion of acquisition fees on loans purchased subsequent to June 30, 2004, to finance charge income using the effective interest method. We recorded acquisition fees on loans purchased prior to July 1, 2004, as nonaccretable fees available to cover losses inherent in the loan portfolio.

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

	Three Months Ended December 31,						Six Months Ended December 31,
	2009			2008			2009			2008
Balance at beginning of period	$	9,264		$	33,469		$	12,100		$	42,802
Net charge-offs		(2,987	)		(5,110	)		(5,823	)		(14,443	)
Balance at end of period	$	6,277		$	28,359		$	6,277		$	28,359

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

	Three Months Ended December 31,						Six Months Ended December 31,
	2009			2008			2009			2008
Balance at beginning of period	$	816,694		$	926,650		$	878,540		$	908,311
Provision for loan losses		106,198			288,022			264,149			562,887
Net charge-offs		(212,110	)		(320,055	)		(431,907	)		(576,581	)
Balance at end of period	$	710,782		$	894,617		$	710,782		$	894,617

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NOTE 3 – SECURITIZATIONS

A summary of our securitization activity and cash flows from special purpose entities used for securitizations is as follows (in thousands):

	Three Months Ended December 31,				Six Months Ended December 31,
	2009		2008		2009		2008
Receivables securitized	$	294,490	$	1,289,082	$	1,275,546	$	1,289,082
Net proceeds from securitization		227,493		1,000,000		952,493		1,000,000
Servicing fees(a)		49,024		61,737		102,131		124,785
Distributions		55,011		113,436		129,635		284,312

(a) Servicing fees earned on securitizations are included in finance charge income on the consolidated statements of operations.

As of December 31, 2009 and June 30, 2009, respectively, we were servicing $7.7 billion and $8.4 billion of finance receivables that have been transferred or sold to securitization Trusts.

NOTE 4 – CREDIT FACILITIES

Amounts outstanding under our credit facilities are as follows (in thousands):

	December 31, 2009		June 30, 2009
Medium term note facility	$	709,927	$	750,000
Master warehouse facility				569,756
Prime/Near prime facility				250,377
Lease warehouse facility				60,000
	$	709,927	$	1,630,133

Further detail regarding terms and availability of the credit facilities as of December 31, 2009, follows (in thousands):

Facility Type	Maturity	Facility Amount		Advances Outstanding		Finance Receivables Pledged		Restricted Cash Pledged(a)
Master warehouse facility(b)	March 2010	$	1,000,000					$	5,000
Medium term note facility (c)			750,000	$	709,927	$	776,450		96,930
		$	1,750,000	$	709,927	$	776,450	$	101,930

(a) These amounts do not include cash collected on finance receivables pledged of $26.3 million which is also included in restricted cash – credit facilities on the consolidated balance sheets.

(b) The revolving period under this facility ends in March 2010 and any outstanding balance will be repaid over time based on the amortization of the receivables pledged until April 2011 when any remaining amount outstanding will be due and payable.

(c) The revolving period under this facility ended in October 2009, and the outstanding debt balance will be repaid over time based on the amortization of the receivables pledged until October 2016 when any remaining amount outstanding will be due and payable.

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Generally, our credit facilities are administered by agents on behalf of institutionally managed commercial paper or medium term note conduits. Under these funding agreements, we transfer finance receivables to our special purpose finance subsidiaries. These subsidiaries, in turn, issue notes to the agents, collateralized by such finance receivables and cash. The agents provide funding under the notes to the subsidiaries pursuant to an advance formula, and the subsidiaries forward the funds to us in consideration for the transfer of finance receivables. While these subsidiaries are included in our consolidated financial statements, these subsidiaries are separate legal entities and the finance receivables and other assets held by these subsidiaries are legally owned by these subsidiaries and are not available to our creditors or our other subsidiaries. Advances under the funding agreements bear interest at commercial paper, London Interbank Offered Rates (“LIBOR”) or prime rates plus specified fees depending upon the source of funds provided by the agents.

We are required to hold certain funds in restricted cash accounts to provide additional collateral for borrowings under the facilities. Additionally, certain funding agreements contain various covenants requiring minimum financial ratios, asset quality and portfolio performance ratios (portfolio net loss and delinquency ratios, and pool level cumulative net loss ratios) as well as limits on deferment levels. Failure to meet any of these covenants could result in an event of default under these agreements. If an event of default occurs under these agreements, the lenders could elect to declare all amounts outstanding under these agreements to be immediately due and payable, enforce their interests against collateral pledged under these agreements, restrict our ability to obtain additional borrowings under these agreements, and/or remove us as servicer. As of December 31, 2009, we were in compliance with all covenants in our credit facilities.

The lease warehouse facility and the prime/near prime facility were repaid in full in October and November 2009, respectively.

Debt issuance costs are being amortized to interest expense over the expected term of the credit facilities. Unamortized costs of $4.8 million and $16.1 million as of December 31, 2009 and June 30, 2009, respectively, are included in other assets on the consolidated balance sheets.

NOTE 5 – SECURITIZATION NOTES PAYABLE

Securitization notes payable represents debt issued by us in securitization transactions. Debt issuance costs are being amortized over the expected term of the securitizations on an effective yield basis. Unamortized costs of $15.5 million and $13.9 million as of December 31, 2009 and June 30, 2009, respectively, are included in other assets on the consolidated balance sheets.

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Securitization notes payable as of December 31, 2009, consists of the following (dollars in thousands):

Transaction	Maturity Date (b)	Original Note Amount		Original Weighted Average Interest Rate		Receivables Pledged		Note Balance
2004-D-F	July 2011	$	750,000	3.1	%	$	28,682	$	26,579
2005-A-X	October 2011		900,000	3.7	%		47,133		43,248
2005-1	May 2011		750,000	4.5	%		49,062		36,115
2005-B-M	May 2012		1,350,000	4.1	%		120,429		106,773
2005-C-F	June 2012		1,100,000	4.5	%		124,582		111,890
2005-D-A	November 2012		1,400,000	4.9	%		197,462		177,713
2006-1	May 2013		945,000	5.3	%		155,906		120,746
2006-R-M	January 2014		1,200,000	5.4	%		387,470		348,183
2006-A-F	September 2013		1,350,000	5.6	%		317,439		286,204
2006-B-G	September 2013		1,200,000	5.2	%		333,677		303,360
2007-A-X	October 2013		1,200,000	5.2	%		393,180		358,845
2007-B-F	December 2013		1,500,000	5.2	%		577,188		526,429
2007-1 (APART)	March 2016		1,000,000	5.4	%		342,412		343,898
2007-C-M	April 2014		1,500,000	5.5	%		664,535		607,478
2007-D-F	June 2014		1,000,000	5.5	%		478,764		438,009
2007-2-M (APART)	March 2016		1,000,000	5.3	%		459,828		436,578
2008-A-F	October 2014		750,000	6.0	%		536,343		428,874
2008-1	January 2015		500,000	8.7	%		440,242		305,125
2008-2	April 2015		500,000	10.5	%		466,134		316,085
2009-1	January 2016		725,000	7.5	%		833,209		573,808
2009-1 (APART)	July 2017		227,493	2.7	%		281,978		215,929
BV2005-LJ-1 (a)	May 2012		232,100	5.1	%		17,450		18,357
BV2005-LJ-2 (a)(c)	February 2014		185,596	4.6	%		18,273		17,688
BV2005-3 (a)	June 2014		220,107	5.1	%		30,539		31,833
LB2004-C (a)	July 2011		350,000	3.5	%		14,344		12,548
LB2005-A (a)	April 2012		350,000	4.1	%		25,859		27,204
LB2005-B (a)	June 2012		350,000	4.4	%		38,367		36,234
LB2006-A (a)	May 2013		450,000	5.4	%		77,356		72,701
LB2006-B (a)	September 2013		500,000	5.2	%		110,288		115,847
LB2007-A	January 2014		486,000	5.0	%		147,945		146,363
		$	23,971,296			$	7,716,076	$	6,590,644

(a) Transactions relate to securitization Trusts acquired by us.

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

(c) Note balance does not include $1.4 million of asset-backed securities repurchased and retained by us as of December 31, 2009.

At the time of securitization of finance receivables, we are required to pledge assets equal to a specified percentage of the securitization pool to support the securitization transaction. Typically, the assets pledged consist of cash deposited to a restricted account and additional receivables delivered to the Trust, which create overcollateralization. The securitization transactions require the percentage of assets pledged to support the transaction to increase until a specified level is attained. Excess cash flows generated by the Trusts are added to the restricted cash account or used to pay down outstanding debt in the Trusts, creating additional overcollateralization until the targeted percentage level of assets has been reached. Once the targeted percentage level of assets is reached and maintained, excess cash flows generated by the Trusts are typically released to us as distributions from Trusts. Additionally, as the balance of the securitization pool declines, the amount of pledged assets needed to maintain the required percentage level is reduced. Assets in excess of the required percentage are also typically released to us as distributions from Trusts.

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

The securitization transactions insured by some of our financial guaranty insurance providers are cross-collateralized to a limited extent. In the event of a shortfall in the original target credit enhancement requirement for any of these securitization Trusts after a certain period of time, excess cash flows from other transactions insured by the same insurance provider would be used to satisfy the shortfall in the original target credit enhancement requirement.

As of December 31, 2009, we have exceeded certain portfolio performance ratios in several AMCAR and LB securitizations. Excess cash flows from these Trusts have been or are being used to build higher enhancement in each respective Trust instead of being distributed to us. We do not expect the trapping of excess cash flows from these Trusts to have a material adverse impact to our liquidity.

Agreements with our financial guaranty insurance providers contain additional specified targeted portfolio performance ratios that are higher than those previously described. If, at any measurement date, the targeted portfolio performance ratios with respect to any insured Trust were to exceed these higher levels, provisions of the agreements permit our financial guaranty insurance providers to terminate our servicing rights to the receivables transferred to that Trust.

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NOTE 6 – SENIOR NOTES AND CONVERTIBLE SENIOR NOTES

Senior notes and convertible senior notes consist of the following (in thousands):

	December 31, 2009			June 30, 2009 (Revised)
8.5% Senior Notes (due July 2015)	$	91,620		$	91,620
0.75% Convertible Senior Notes (due in September 2011)		247,000			247,000
Debt discount on 0.75% Convertible Senior Notes (due in September 2011)		(24,482	)		(31,088	)
2.125% Convertible Senior Notes (due in September 2013)		215,017			215,017
Debt discount on 2.125% Convertible Senior Notes (due in September 2013)		(34,430	)		(38,415	)
	$	403,105		$	392,514		��

As of July 1, 2009, we adopted FSP APB 14-1 (ASC 470 20 65-1). FSP APB 14-1 (ASC 470 20 65-1) specifies that when issuers of convertible debt instruments that may be settled in cash upon conversion recognize interest cost in subsequent periods, they should separately account for the liability and equity components of the instrument in a manner that will reflect the entity’s borrowing rate at the time of issuance for similar unsecured senior debt without an equity conversion feature. The transition provision requires that entities retrospectively apply FSP APB 14-1 (ASC 470 20 65-1) for all periods presented.

As a result of adopting FSP APB 14-1 (ASC 470 20 65-1) on July 1, 2009, as discussed in Note 1 – “Summary of Significant Accounting Policies – Adoption of New Accounting Standards” to the consolidated financial statements, we have separately accounted for the liability and equity components of our convertible senior notes due in September 2011 and 2013, retrospectively, based on our determination that our borrowing rate at the time of issuance for unsecured senior debt without an equity conversion feature was approximately 7%. At issuance, the liability and equity components were $404.3 million and $145.7 million, respectively. The debt discount is being amortized to interest expense over the expected term of the notes based on the effective interest method. Debt issuance costs of approximately $3.5 million directly related to the issuance of the convertible senior notes due in September 2011 and 2013 have been allocated to the equity component in proportion to the allocation of proceeds.

Interest expense related to the convertible senior notes consists of the following (in thousands):

	Three Months Ended December 31,				Six Months Ended December 31,
	2009		2008		2009		2008
Contractual interest	$	1,605	$	1,920	$	3,210	$	3,897
Discount amortization		5,342		6,009		10,591		11,617
Total interest expense related to convertible senior notes	$	6,947	$	7,929	$	13,801	$	15,514

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Debt issuance costs related to the senior notes and the convertible senior notes are being amortized to interest expense over the expected term of the notes; unamortized costs of $1.3 million and $1.4 million related to the senior notes and $3.5 million and $4.2 million related to the convertible senior notes are included in other assets on the consolidated balance sheets as of December 31, 2009 and June 30, 2009, respectively.

NOTE 7 – DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES

Interest rate caps, swaps and foreign currency contracts consist of the following (in thousands):

	December 31, 2009				June 30, 2009
	Notional		Fair Value		Notional		Fair Value
Assets
Interest rate swaps(a)	$	2,208,342	$	26,637	$	2,592,548	$	24,267
Interest rate caps(a)		847,457		10,796		1,914,886		15,858
Total assets	$	3,055,799	$	37,433	$	4,507,434	$	40,125
Liabilities
Interest rate swaps	$	2,208,342	$	98,513	$	2,592,548	$	131,885
Interest rate caps(b)		739,999		11,155		1,721,044		16,644
Foreign currency contracts(b)(c)		70,445		2,804
Total liabilities	$	3,018,786	$	112,472	$	4,313,592	$	148,529

(a) Included in other assets on the consolidated balance sheet.

(b) Included in other liabilities on the consolidated balance sheet.

(c) Notional has been translated from Canadian dollars to U.S. dollars at the quarter end rate.

Interest rate swap agreements designated as hedges had unrealized losses of approximately $46.9 million, net of tax, and $62.5 million, net of tax, included in accumulated other comprehensive loss as of December 31, 2009, and June 30, 2009, respectively. The ineffectiveness related to the interest rate swap agreements was immaterial for the three and six months ended December 31, 2009 and $1.7 million for the three and six month periods ended December 31, 2008. We estimate approximately $61.3 million of unrealized losses included in accumulated other comprehensive loss will be reclassified into earnings within the next twelve months.

Interest rate swap agreements not designated as hedges had a change in fair value which resulted in a $0.6 million and $6.0 million gain included in interest expense on the consolidated statements of operations for the three and six months ended December 31, 2009, respectively.

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Under the terms of our derivative financial instruments, we are required to pledge certain funds to be held in restricted cash accounts as collateral for the outstanding derivative transactions. As of December 31, 2009, and June 30, 2009, these restricted cash accounts totaled $36.4 million and $45.7 million, respectively, and are included in other assets on the consolidated balance sheets.

In July 2009, we entered into a series of foreign currency contracts in order to hedge our Canadian denominated cash flows as we convert them to U.S. dollars over time.

The following table presents information on the effect of derivative instruments on the consolidated statements of operations and comprehensive operations for the three and six month periods ended December 31, 2009 (in thousands):

	Income (Losses) Recognized In Income						(Losses) Recognized in Accumulated Other Comprehensive Loss						(Losses) Reclassified From Accumulated Other Comprehensive Loss into Income (c)
	Three months ended			Six months ended			Three months ended			Six months ended			Three months ended			Six months ended
	December 31, 2009						December 31, 2009						December 31, 2009
Non-Designated Hedges:
Interest rate contracts (a)	$	527		$	6,451
Foreign currency contracts (b)		(594	)		(2,804	)
Total	$	(67	)	$	3,647
Designated Hedges:
Interest rate contracts (a)	$	150		$	170		$	(4,303	)	$	(20,136	)	$	(21,390	)	$	(44,634	)
Total	$	150		$	170		$	(4,303	)	$	(20,136	)	$	(21,390	)	$	(44,634	)

(a) Income (losses) recognized in income are included in interest expense.

(b) (Losses) recognized in income are included in operating expenses.

(c) (Losses) reclassified from accumulated other comprehensive loss into income for effective and ineffective portions are included in interest expense.

NOTE 8 – FAIR VALUES OF ASSETS AND LIABILITIES

ASC 820 provides a framework for measuring fair value under GAAP. ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 requires that valuation techniques maximize the use of observable inputs and minimize the use of unobservable inputs. ASC 820 also establishes a fair value hierarchy which prioritizes the valuation inputs into three broad levels.

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There are three general valuation techniques that may be used to measure fair value, as described below:

A) Market approach – Uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. Prices may be indicated by pricing guides, sale transactions, market trades, or other sources;

B) Cost approach – Based on the amount that currently would be required to replace the service capacity of an asset (replacement cost); and

C) Income approach – Uses valuation techniques to convert future amounts to a single present amount based on current market expectations about the future amounts (includes present value techniques and option-pricing models). Net present value is an income approach where a stream of expected cash flows is discounted at an appropriate market interest rate.

Assets and liabilities itemized below were measured at fair value on a recurring basis:

	December 31, 2009 (in thousands)
	Fair Value Measurements Using
	Level 1 Quoted Prices In Active Markets Identical Assets	Level 2 Significant Other Observable Inputs		Level 3 Significant Unobservable Inputs		Assets/ Liabilities At Fair Value
Assets
Investment in money market fund (A)				$	5,764	$	5,764
Derivatives not designated as hedging instruments:
Interest rate caps (A)		$	10,796				10,796
Interest rate swaps (C)					26,637		26,637
Total assets	$	$	10,796	$	32,401	$	43,197
Liabilities
Derivatives designated as hedging instruments:
Interest rate swaps (C)				$	98,513	$	98,513
Derivatives not designated as hedging instruments:
Interest rate caps (A)		$	11,155				11,155
Foreign currency contracts (A)			2,804				2,804
Total liabilities	$	$	13,959	$	98,513	$	112,472

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	June 30, 2009 (in thousands)
	Fair Value Measurements Using
	Level 1 Quoted Prices In Active Markets Identical Assets	Level 2 Significant Other Observable Inputs		Level 3 Significant Unobservable Inputs		Assets/ Liabilities At Fair Value
Assets
Investment in money market fund (A)				$	8,027	$	8,027
Derivatives not designated as hedging instruments:
Interest rate caps (A)		$	15,858				15,858
Interest rate swaps (C)					24,267		24,267
Total assets	$	$	15,858	$	32,294	$	48,152
Liabilities
Derivatives designated as hedging instruments:
Interest rate swaps (C)				$	131,885	$	131,885
Derivatives not designated as hedging instruments:
Interest rate caps (A)		$	16,644				16,644
Total liabilities	$	$	16,644	$	131,885	$	148,529

Financial instruments are considered Level 1 when quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis.

Financial instruments are considered Level 2 when inputs other than quoted prices are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

Financial instruments are considered Level 3 when their values are determined using price models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. Level 3 financial instruments also include those for which the determination of fair value requires significant management judgment or estimation. A brief description of the valuation techniques used for our Level 3 assets and liabilities is provided below.

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The table below presents a reconciliation for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the six months ended December 31, 2009 (in thousands):

	Assets						Liabilities
	Interest Rate Swap Agreements			Investment in Money Market Fund			Interest Rate Swap Agreements
Balance at July 1, 2009	$	24,267		$	8,027		$	(131,885	)
Total realized and unrealized gains
Included in earnings		6,025						170
Included in other comprehensive income								(20,136	)
Purchases, issuances and settlements		(3,655	)		(2,263	)		53,338
Balance at December 31, 2009	$	26,637		$	5,764		$	(98,513	)

The table below presents a reconciliation for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the six months ended December 31, 2008 (in thousands):

	Assets						Liabilities
	Interest Rate Swap Agreements			Investment in Money Market Fund			Interest Rate Swap Agreements
Balance at July 1, 2008	$	3,572					$	(76,269	)
Transfers into Level 3				$	115,821
Total realized and unrealized gains
Included in earnings		22,271			(3,475	)		(35,832	)
Included in other comprehensive income								(85,497	)
Purchases, issuances and settlements		(401	)		(91,422	)		34,663
Balance at December 31, 2008	$	25,442		$	20,924		$	(162,935	)

Derivatives

The fair values of our interest rate caps and foreign currency contracts are valued based on quoted market prices received from bank counterparties and are classified as Level 2.

Our interest rate swaps are not exchange traded but instead traded in over-the-counter markets where quoted market prices are not readily available. The fair value of derivatives is derived using models that use primarily market observable inputs, such as interest rate yield curves and credit curves. Any derivative fair value measurements using significant assumptions that are unobservable are classified as Level 3, which include interest rate swaps whose remaining terms extend beyond market observable interest rate yield curves. The impacts of the derivative liabilities for our and the counterparties’ non-performance risk to the derivative trades is considered when measuring the fair value of derivative liabilities.

Investment in Money Market Fund

We have a $5.8 million investment in the Reserve Primary Money Market Fund (“the Reserve Fund”), a money market fund which has suspended redemptions and

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is in the process of liquidating its portfolio of investments. The asset is valued at the estimated net asset value of $0.97 per share as published by the Reserve Fund. Because redemptions of the fund have been suspended and are not readily convertible to cash, we reclassified this investment on our balance sheet from cash equivalents to other assets. Subsequent to December 31, 2009, we received a $7.8 million distribution from the Reserve Fund.

NOTE 9 – COMMITMENTS AND CONTINGENCIES

Guarantees of Indebtedness

The payments of principal and interest on our senior notes and convertible senior notes are guaranteed by certain of our subsidiaries. The par value of the senior notes and convertible senior notes was $553.6 million as of December 31, 2009, and June 30, 2009. See guarantor consolidating financial statements in Note 15.

Limited Corporate Guarantees of Indebtedness

We guaranteed the timely payment of interest and ultimate payment of principal on the Class B and Class C asset-backed securities issued in our AMCAR 2008-2 securitization transaction, up to a maximum of $50.0 million in the aggregate.

Legal Proceedings

As a consumer finance company, we are subject to various consumer claims and litigation seeking damages and statutory penalties, based upon, among other things, usury, disclosure inaccuracies, wrongful repossession, violations of bankruptcy stay provisions, certificate of title disputes, fraud, breach of contract and discriminatory treatment of credit applicants. Some litigation against us could take the form of class action complaints by consumers and/or shareholders. As the assignee of finance contracts originated by dealers, we may also be named as a co-defendant in lawsuits filed by consumers principally against dealers. The damages and penalties claimed by consumers in these types of matters can be substantial. The relief requested by the plaintiffs varies but can include requests for compensatory, statutory and punitive damages. We believe that we have taken prudent steps to address and mitigate the litigation risks associated with our business activities. In the opinion of management, the ultimate aggregate liability, if any, arising out of any such pending or threatened litigation will not be material to our consolidated financial position, our results of operations, or our statement of cash flows.

NOTE 10 – INCOME TAXES

We had unrecognized tax benefits of $33.0 million and $35.0 million at December 31, 2009 and June 30, 2009, respectively. The decrease is due primarily to the resolution of state income tax positions. The amount of unrecognized tax benefits, if recognized, that would affect the effective tax rate is $19.2 million and $18.0 million at December 31, 2009, and June 30, 2009, respectively, which includes the federal benefit of state taxes.

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At December 31, 2009, we believe that it is reasonably possible that the balance of the gross unrecognized tax benefits could decrease by $0.2 million to $7.1 million in the next twelve months due to ongoing activities with various taxing jurisdictions that we expect may give rise to settlements or the expiration of statutes of limitations.

We recognize accrued interest and penalties associated with uncertain tax positions as part of the income tax provision. As of July 1, 2009, accrued interest and penalties associated with uncertain tax positions were $10.3 million and $8.0 million, respectively. During the six months ended December 31, 2009, we accrued an additional $0.2 million in potential interest and released $0.5 million in potential penalties associated with uncertain tax positions.

We continually evaluate expiring statutes of limitations, audits, proposed settlements, changes in tax law and new authoritative rulings and recognize tax benefits and interest and penalties associated with uncertain tax positions as appropriate.

We file income tax returns in the U.S. and various state, local, and foreign jurisdictions. Our consolidated federal income tax returns for fiscal years 2007, 2008 and 2009 are under audit by the IRS. The IRS completed its examination of our fiscal years 2004 and 2005 consolidated federal income tax returns in the second quarter of fiscal year 2008. The returns for those years were subject to an appeals proceeding, which was concluded favorably to us in December 2009. The outcome of the appeals proceeding did not result in a material change to our financial position or results of operations. Our federal income tax returns prior to fiscal year 2004 are closed. Foreign and state jurisdictions have statutes of limitations that generally range from three to five years. Certain of our tax returns are currently under examination in various state tax jurisdictions.

Our effective income tax rate was 36.3% and 39.4% for the three and six months ended December 31, 2009 and 33.7% and 30.6% for the three and six months ended December 31, 2008. The effective tax rate for the three and six months ended December 2009 was higher than the same periods in 2008 primarily due to higher state income tax rates and adjustments to state deferred tax assets and liabilities.

Tax Accounting Change

During the year ended June 30, 2009, we filed an application for a change of accounting method for tax purposes under Internal Revenue Code (“IRC”) Section 475. We believe that, as a result of our business activities, certain assets must be marked-to-market for income tax purposes. As a result of this change of accounting method, we received an income tax refund of approximately $198 million.

On November 6, 2009, the Worker, Homeownership, and Business Assistance Act of 2009 was signed into law which provides an election to carryback a loss to the

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third, fourth or fifth year that precedes the year of loss. Because of this change in tax law, we elected to extend our US federal fiscal year 2009 net operating loss (“NOL”) carryback period which resulted in our filing for an income tax refund of approximately $81 million. We have fully utilized our federal NOL and anticipate making federal income tax payments beginning in fiscal year 2010.

NOTE 11 – RESTRUCTURING CHARGES

A summary of the liabilities, which are included in accrued taxes and expenses on the consolidated balance sheets, for restructuring charges for the six months ended December 31, 2009, is as follows (in thousands):

	Personnel- Related Costs			Contract Termination Costs			Total
Balance at July 1, 2009	$	863		$	4,771		$	5,634
Cash settlements		(762	)		(2,808	)		(3,570	)
Non-cash settlements					2			2
Additions and adjustments		(79	)		(7	)		(86	)
Balance at December 31, 2009	$	22		$	1,958		$	1,980

NOTE 12 – EARNINGS PER SHARE

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

	Three Months Ended December 31,					Six Months Ended December 31,
	2009		2008(a) (Revised)			2009		2008(a) (Revised)
Net income (loss)	$	46,029	$	(35,002	)	$	71,790	$	(40,276	)
Basic weighted average shares		133,492,069		120,106,666			133,361,014		118,189,273
Incremental shares resulting from assumed conversions: Stock-based compensation and warrants		4,138,625					3,496,062
Diluted weighted average shares		137,630,694		120,106,666			136,857,076		118,189,273
Earnings (loss) per share:
Basic	$	0.34	$	(0.29	)	$	0.54	$	(0.34	)
Diluted	$	0.33	$	(0.29	)	$	0.52	$	(0.34	)

(a) Revised for FSP APB 14-1 (ASC 470 20 65-1),Accounting for Convertible Debt Instruments That May be Settled in Cash upon Conversion (Including Partial Cash Settlement). See Note 1 – “Summary of Significant Accounting Policies – Adoption of New Accounting Standards” and Note 6 – “Senior Notes and Convertible Senior Notes” for additional information.

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

Diluted earnings per share, for the three and six months ended December 31, 2009, has been computed by dividing net income, by the weighted average shares and assumed incremental shares. The treasury stock method was used to compute the assumed incremental shares related to our outstanding stock-based compensation and warrants and will be used to compute the assumed incremental shares related to our convertible senior notes issued in September 2006 once the average market price of the common shares exceeds the conversion price. The average market prices for the periods were used to determine the number of incremental shares. Options to purchase approximately 1.2 million and 1.3 million shares of common stock for the three and six months ended December 31, 2009, respectively, were not included in the computation of diluted earnings per share because the option exercise price was greater than the average market price of the common shares. Warrants to purchase approximately 18.8 million shares of common stock for the three and six months ended December 31, 2009, respectively, were not included in the computation of diluted earnings per share because the exercise price was greater than the average market price of the common shares.

Diluted loss per share for the three and six months ended December 31, 2008, has been computed by dividing net loss by weighted average shares outstanding assuming no incremental shares because all potentially dilutive common stock equivalents are anti-dilutive.

NOTE 13 – SUPPLEMENTAL CASH FLOW INFORMATION

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

	Six Months Ended December 31,
	2009		2008
Interest costs (none capitalized)	$	237,168	$	348,504
Income taxes		29,423		534

NOTE 14 – FAIR VALUE OF FINANCIAL INSTRUMENTS

In April 2009, the FASB issued FSP Financial Accounting Standard (“FAS”) 107-1 and APB 28-1,Interim Disclosures about Fair Value of Financial Instruments, (“FSP FAS 107-1 APB 28-1”) (ASC 825 10 65-1), which requires interim disclosure of fair value information about financial instruments, whether recognized or not in our consolidated balance sheets. Fair values are based on estimates using present value or other valuation techniques in cases where quoted market prices are not available. Those techniques are significantly affected by the assumptions used, including the discount rate and the estimated timing and amount of future cash flows. Therefore, the estimates of

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fair value may differ substantially from amounts that ultimately may be realized or paid at settlement or maturity of the financial instruments and those differences may be material. FSP FAS 107-1 APB 28-1 (ASC 825 10 65-1) excludes certain financial instruments and all non-financial instruments from our disclosure requirements. Accordingly, the aggregate fair value amounts presented do not represent the underlying value of our Company.

Estimated fair values, carrying values and various methods and assumptions used in valuing our financial instruments are set forth below (in thousands):

			December 31, 2009				June 30, 2009
			Carrying Value		Estimated Fair Value		Carrying Value (f) (Revised)		Estimated Fair Value
Financial assets:
Cash and cash equivalents	(a	)	$	319,644	$	319,644	$	193,287	$	193,287
Finance receivables, net	(b	)		8,587,917		8,372,002		10,037,329		9,717,655
Restricted cash – securitization notes payable	(a	)		850,212		850,212		851,606		851,606
Restricted cash – credit facilities	(a	)		128,199		128,199		195,079		195,079
Restricted cash – other	(a	)		37,596		37,596		46,905		46,905
Interest rate swap agreements	(d	)		26,637		26,637		24,267		24,267
Interest rate cap agreements purchased	(d	)		10,796		10,796		15,858		15,858
Investment in money market fund	(d	)		5,764		5,764		8,027		8,027
Financial liabilities:
Credit facilities	(c	)		709,927		709,927		1,630,133		1,630,133
Securitization notes payable	(d	)		6,590,644		6,669,120		7,426,687		6,879,245
Senior notes	(d	)		91,620		86,581		91,620		85,207
Convertible senior notes	(d	)		403,105		418,132		392,514		328,396
Other notes payable	(e	)		361		361		600		600
Interest rate swap agreements	(d	)		98,513		98,513		131,885		131,885
Interest rate cap agreements sold	(d	)		11,155		11,155		16,644		16,644
Foreign currency hedge contracts	(d	)		2,804		2,804

(a) The carrying value of cash and cash equivalents, restricted cash – securitization notes payable, restricted cash – credit facilities and restricted cash – other is considered to be a reasonable estimate of fair value since these investments bear interest at market rates and have maturities of less than 90 days.

(b) The fair value of finance receivables is estimated by discounting future cash flows expected to be collected using current rates at which similar loans would be made to borrowers with similar credit ratings and the same remaining maturities.

(c) Credit facilities have variable rates of interest and maturities of three years or less. Therefore, carrying value is considered to be a reasonable estimate of fair value.

(d) The fair values of the interest rate cap and swap agreements, foreign currency contracts, investment in money market fund, securitization notes payable, senior notes and convertible senior notes are based on quoted market prices, when available. If quoted market prices are not available, the market value is estimated by discounting future net cash flows expected to be settled using a current risk-adjusted rate.

(e) The fair value of other notes payable is estimated based on rates currently available for debt with similar terms and remaining maturities.

(f) Revised for FSP APB 14-1 (ASC 470 20 65-1),Accounting for Convertible Debt Instruments That May be Settled in Cash upon Conversion (Including Partial Cash Settlement). See Note 1 – “Summary of Significant Accounting Policies – Adoption of New Accounting Standards” and Note 6 – “Senior Notes and Convertible Senior Notes” for additional information.

24

NOTE 15 – GUARANTOR CONSOLIDATING FINANCIAL STATEMENTS

The payment of principal and interest on our senior notes and convertible senior notes are guaranteed by certain of our subsidiaries (the “Subsidiary Guarantors”). The separate financial statements of the Subsidiary Guarantors are not included herein because the Subsidiary Guarantors are our wholly-owned consolidated subsidiaries and are jointly, severally, fully and unconditionally liable for the obligations represented by the senior notes and convertible senior notes. We believe that the consolidating financial information for AmeriCredit Corp., 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 statements present consolidating financial data for (i) AmeriCredit Corp. (on a parent only basis), (ii) the combined Subsidiary Guarantors, (iii) the combined Non-Guarantor Subsidiaries, (iv) an elimination column for adjustments to arrive at the information for the parent company and our subsidiaries on a consolidated basis and (v) the parent company and our subsidiaries on a consolidated basis.

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

25

AmeriCredit Corp.

Consolidating Balance Sheet

December 31, 2009

(Unaudited, in Thousands)

	AmeriCredit Corp.			Guarantors		Non- Guarantors			Eliminations			Consolidated
ASSETS
Cash and cash equivalents				$	313,673	$	5,971					$	319,644
Finance receivables, net					748,325		7,839,592						8,587,917
Restricted cash – securitization notes payable							850,212						850,212
Restricted cash – credit facilities							128,199						128,199
Property and equipment, net	$	5,360			34,910								40,270
Leased vehicles, net					4,437		126,889						131,326
Deferred income taxes		101,360			231,548		(313,722	)					19,186
Income tax receivable		(4,589	)		36,169								31,580
Other assets		4,863			120,009		56,298						181,170
Due from affiliates		581,306					2,848,599		$	(3,429,905	)
Investment in affiliates		2,084,785			4,342,171		657,670			(7,084,626	)
Total assets	$	2,773,085		$	5,831,242	$	12,199,708		$	(10,514,531	)	$	10,289,504
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Credit facilities						$	709,927					$	709,927
Securitization notes payable							6,590,644						6,590,644
Senior notes	$	91,620											91,620
Convertible senior notes		403,105											403,105
Accrued taxes and expenses		59,607		$	52,441		47,826						159,874
Interest rate swap agreements							98,513						98,513
Other liabilities		361			17,068								17,429
Due to affiliates					3,429,905				$	(3,429,905	)
Total liabilities		554,693			3,499,414		7,446,910			(3,429,905	)		8,071,112
Shareholders’ equity:
Common stock		1,357			147,567					(147,567	)		1,357
Additional paid-in capital		303,361			75,887		1,880,864			(1,956,751	)		303,361
Accumulated other comprehensive (loss) income		(210	)		45,050		(46,919	)		1,869			(210	)
Retained earnings		1,950,249			2,063,324		2,918,853			(4,982,177	)		1,950,249
		2,254,757			2,331,828		4,752,798			(7,084,626	)		2,254,757
Treasury stock		(36,365	)										(36,365	)
Total shareholders’ equity		2,218,392			2,331,828		4,752,798			(7,084,626	)		2,218,392
Total liabilities and shareholders’ equity	$	2,773,085		$	5,831,242	$	12,199,708		$	(10,514,531	)	$	10,289,504

26

AmeriCredit Corp.

Consolidating Balance Sheet

June 30, 2009

(in thousands)

(Revised)

	AmeriCredit Corp.(a)			Guarantors		Non- Guarantors			Eliminations			Consolidated(a)
ASSETS
Cash and cash equivalents				$	186,564	$	6,723					$	193,287
Finance receivables, net					580,420		9,456,909						10,037,329
Restricted cash – securitization notes payable							851,606						851,606
Restricted cash – credit facilities							195,079						195,079
Property and equipment, net	$	5,527			38,668								44,195
Leased vehicles, net					5,319		151,068						156,387
Deferred income taxes		97,657			243,803		(265,678	)					75,782
Income tax receivable		162,036			35,543								197,579
Other assets		5,682			132,485		68,916						207,083
Due from affiliates		404,943					4,059,841		$	(4,464,784	)
Investment in affiliates		1,976,793			5,558,924		603,680			(8,139,397	)
Total assets	$	2,652,638		$	6,781,726	$	15,128,144		$	(12,604,181	)	$	11,958,327
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Credit facilities						$	1,630,133					$	1,630,133
Securitization notes payable							7,426,687						7,426,687
Senior notes	$	91,620											91,620
Convertible senior notes		392,514											392,514
Accrued taxes and expenses		60,596		$	44,371		52,673						157,640
Interest rate swap agreements					525		131,360						131,885
Other liabilities		600			19,940								20,540
Due to affiliates					4,464,784				$	(4,464,784	)
Total liabilities		545,330			4,529,620		9,240,853			(4,464,784	)		9,851,019
Shareholders’ equity:
Common stock		1,350			172,368					(172,368	)		1,350
Additional paid-in capital		284,961			75,878		3,177,841			(3,253,719	)		284,961
Accumulated other comprehensive (loss) income		(21,099	)		26,009		(62,508	)		36,499			(21,099	)
Retained earnings		1,878,459			1,977,851		2,771,958			(4,749,809	)		1,878,459
		2,143,671			2,252,106		5,887,291			(8,139,397	)		2,143,671
Treasury stock		(36,363	)										(36,363	)
Total shareholders’ equity		2,107,308			2,252,106		5,887,291			(8,139,397	)		2,107,308
Total liabilities and shareholders’ equity	$	2,652,638		$	6,781,726	$	15,128,144		$	(12,604,181	)	$	11,958,327

(a) Revised for FSP APB 14-1 (ASC 470 20 65-1),Accounting for Convertible Debt Instruments That May be Settled in Cash upon Conversion (Including Partial Cash Settlement). See Note 1 – “Summary of Significant Accounting Policies – Adoption of New Accounting Standards” and Note 6 – “Senior Notes and Convertible Senior Notes” for additional information.

27

AmeriCredit Corp.

Consolidating Statement of Operations

Three Months Ended December 31, 2009

(Unaudited, in Thousands)

	AmeriCredit Corp.			Guarantors			Non- Guarantors		Eliminations			Consolidated
Revenue
Finance charge income				$	29,098		$	334,002				$	363,100
Other income	$	7,086			110,000			231,303	$	(324,734	)		23,655
Equity in income of affiliates		51,125			104,240					(155,365	)
		58,211			243,338			565,305		(480,099	)		386,755
Costs and expenses
Operating expenses		3,964			19,651			52,795					76,410
Leased vehicles expenses					528			9,693					10,221
Provision for loan losses					57,143			49,055					106,198
Interest expense		10,617			139,173			296,704		(324,734	)		121,760
Restructuring charges, net					(49	)							(49	)
		14,581			216,446			408,247		(324,734	)		314,540
Income before income taxes		43,630			26,892			157,058		(155,365	)		72,215
Income tax (benefit) provision		(2,399	)		(24,233	)		52,818					26,186
Net income	$	46,029		$	51,125		$	104,240	$	(155,365	)	$	46,029

28

AmeriCredit Corp.

Consolidating Statement of Operations

Three Months Ended December 31, 2008

(Unaudited, in Thousands)

(Revised)

	AmeriCredit Corp.(a) (Revised)			Guarantors			Non- Guarantors		Eliminations			Consolidated (a) (Revised)
Revenue
Finance charge income				$	17,282		$	480,278				$	497,560
Other income	$	12,576			376,065			766,376	$	(1,124,391	)		30,626
Gain on retirement of debt		30,411											30,411
Equity in (loss) income of affiliates		(24,614	)		31,785					(7,171	)
		18,373			425,132			1,246,654		(1,131,562	)		558,597
Costs and expenses
Operating expenses		13,420			5,707			65,217					84,344
Leased vehicles expenses					(758	)		12,915					12,157
Provision for loan losses					47,308			240,714					288,022
Interest expense		43,427			423,139			882,600		(1,124,391	)		224,775
Restructuring charges, net					2,104								2,104
		56,847			477,500			1,201,446		(1,124,391	)		611,402
(Loss) income before income taxes		(38,474	)		(52,368	)		45,208		(7,171	)		(52,805	)
Income tax (benefit) provision		(3,472	)		(27,754	)		13,423					(17,803	)
Net (loss) income	$	(35,002	)	$	(24,614	)	$	31,785	$	(7,171	)	$	(35,002	)

(a) Revised for FSP APB 14-1 (ASC 470 20 65-1),Accounting for Convertible Debt Instruments That May be Settled in Cash upon Conversion (Including Partial Cash Settlement). See Note 1 – “Summary of Significant Accounting Policies – Adoption of New Accounting Standards” and Note 6 – “Senior Notes and Convertible Senior Notes” for additional information.

29

AmeriCredit Corp.

Consolidating Statement of Operations

Six Months Ended December 31, 2009

(Unaudited, in Thousands)

	AmeriCredit Corp.			Guarantors			Non- Guarantors		Eliminations			Consolidated
Revenue
Finance charge income				$	48,422		$	704,474				$	752,896
Other income	$	12,044			197,417			394,255	$	(556,573	)		47,143
Equity in income of affiliates		85,473			146,895					(232,368	)
		97,517			392,734			1,098,729		(788,941	)		800,039
Costs and expenses
Operating expenses		7,370			33,678			104,224					145,272
Leased vehicles expenses					877			19,454					20,331
Provision for loan losses					70,641			193,508					264,149
Interest expense		23,907			229,433			555,141		(556,573	)		251,908
Restructuring charges, net					(86	)							(86	)
		31,277			334,543			872,327		(556,573	)		681,574
Income before income taxes		66,240			58,191			226,402		(232,368	)		118,465
Income tax (benefit) provision		(5,550	)		(27,282	)		79,507					46,675
Net income	$	71,790		$	85,473		$	146,895	$	(232,368	)	$	71,790

30

AmeriCredit Corp.

Consolidating Statement of Operations

Six Months Ended December 31, 2008

(Unaudited, in Thousands)

(Revised)

	AmeriCredit Corp.(a) (Revised)			Guarantors			Non- Guarantors		Eliminations			Consolidated (a) (Revised)
Revenue
Finance charge income				$	34,986		$	996,547				$	1,031,533
Other income	$	19,689			655,117			1,306,849	$	(1,919,953	)		61,702
Gain on retirement of debt		31,405											31,405
Equity in (loss) income of affiliates		(13,780	)		94,766					(80,986	)
		37,314			784,869			2,303,396		(2,000,939	)		1,124,640
Costs and expenses
Operating expenses		19,664			20,339			128,596					168,599
Leased vehicles expenses					4,341			18,730					23,071
Provision for loan losses					102,755			460,132					562,887
Interest expense		70,733			725,774			1,548,875		(1,919,953	)		425,429
Restructuring charges, net					2,655								2,655
		90,397			855,864			2,156,333		(1,919,953	)		1,182,641
(Loss) income before income taxes		(53,083	)		(70,995	)		147,063		(80,986	)		(58,001	)
Income tax (benefit) provision		(12,807	)		(57,215	)		52,297					(17,725	)
Net (loss) income	$	(40,276	)	$	(13,780	)	$	94,766	$	(80,986	)	$	(40,276	)

(a) Revised for FSP APB 14-1 (ASC 470 20 65-1),Accounting for Convertible Debt Instruments That May be Settled in Cash upon Conversion (Including Partial Cash Settlement). See Note 1 – “Summary of Significant Accounting Policies – Adoption of New Accounting Standards” and Note 6 – “Senior Notes and Convertible Senior Notes” for additional information.

31

AmeriCredit Corp.

Consolidating Statement of Cash Flows

Six Months Ended December 31, 2009

(Unaudited, in Thousands)

	AmeriCredit Corp.			Guarantors			Non- Guarantors			Eliminations			Consolidated
Cash flows from operating activities:
Net income	$	71,790		$	85,473		$	146,895		$	(232,368	)	$	71,790
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		999			5,485			37,162						43,646
Accretion and amortization of loan fees					(1,657	)		5,669						4,012
Provision for loan losses					70,641			193,508						264,149
Deferred income taxes		(7,148	)		12,590			39,135						44,577
Non-cash interest charges on convertible debt		10,591												10,591
Stock-based compensation expense		6,906												6,906
Amortization of warrant costs		1,968												1,968
Other					(73	)		(8,219	)					(8,292	)
Equity in income of affiliates		(85,473	)		(146,895	)					232,368
Changes in assets and liabilities:
Income tax receivable		166,624			(607	)								166,017
Other assets		1,700			(3,783	)		5,284						3,201
Accrued taxes and expenses		(992	)		1,401			(3,983	)					(3,574	)
Net cash provided by operating activities		166,965			22,575			415,451						604,991
Cash flows from investing activities:
Purchases of receivables					(585,658	)		(260,620	)		260,620			(585,658	)
Principal collections and recoveries on receivables					104,524			1,676,092						1,780,616
Net proceeds from sale of receivables					260,620						(260,620	)
Purchases of property and equipment					(671	)								(671	)
Proceeds from money market fund					2,263									2,263
Change in restricted cash — securitization notes payable								1,394						1,394
Change in restricted cash — credit facilities								66,880						66,880
Change in other assets					9,358			4,494						13,852
Net change in investment in affiliates		(6,928	)		1,374,516			(53,993	)		(1,313,595	)
Net cash (used) provided by investing activities		(6,928	)		1,164,952			1,434,247			(1,313,595	)		1,278,676
Cash flows from financing activities:
Net change in credit facilities								(920,206	)					(920,206	)
Issuance of securitization notes payable								952,493						952,493
Payments on securitization notes payable								(1,790,628	)					(1,790,628	)
Debt issuance costs		1,518						(6,375	)					(4,857	)
Proceeds from issuance of common stock		6,779			(24,792	)		(1,296,977	)		1,321,769			6,779
Other net changes		(239	)											(239	)
Net change in due (to) from affiliates		(176,362	)		(1,035,902	)		1,211,243			1,021
Net cash used by financing activities		(168,304	)		(1,060,694	)		(1,850,450	)		1,322,790			(1,756,658	)
Net (decrease) increase in cash and cash equivalents		(8,267	)		126,833			(752	)		9,195			127,009
Effect of Canadian exchange rate changes on cash and cash equivalents		8,267			276						(9,195	)		(652	)
Cash and cash equivalents at beginning of period					186,564			6,723						193,287
Cash and cash equivalents at end of period	$			$	313,673		$	5,971		$			$	319,644

32

AmeriCredit Corp.

Consolidating Statement of Cash Flows

Six Months Ended December 31, 2008

(Unaudited, in Thousands)

(Revised)

	AmeriCredit Corp.(a) (Revised)			Guarantors			Non- Guarantors			Eliminations			Consolidated(a) (Revised)
Cash flows from operating activities:
Net (loss) income	$	(40,276	)	$	(13,780	)	$	94,766		$	(80,986	)	$	(40,276	)
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization		1,599			26,757			29,438						57,794
Accretion and amortization of loan fees					(1,573	)		13,597						12,024
Provision for loan losses					102,755			460,132						562,887
Deferred income taxes		47,208			2,312			(11,598	)					37,922
Non-cash interest charges on convertible debt		11,617												11,617
Stock-based compensation expense		7,547												7,547
Amortization of warrant costs		40,934												40,934
Gain on retirement of debt		(32,160	)											(32,160	)
Other		(81	)		16,432			(9,804	)					6,547
Equity in (loss) income of affiliates		13,780			(94,766	)					80,986
Changes in assets and liabilities:
Income tax receivable		(53,398	)		3,311									(50,087	)
Other assets		744			(8,080	)		(2,882	)					(10,218	)
Accrued taxes and expenses		8,641			(8,972	)		(7,718	)					(8,049	)
Net cash provided by operating activities		6,155			24,396			565,931						596,482
Cash flows from investing activities:
Purchases of receivables					(913,555	)		(411,286	)		411,286			(913,555	)
Principal collections and recoveries on receivables					153,205			2,084,716						2,237,921
Net proceeds from sale of receivables					411,286						(411,286	)
Purchases of property and equipment					(974	)								(974	)
Investment in money market fund					(115,821	)								(115,821	)
Proceeds from money market fund					91,422									91,422
Change in restricted cash— securitization notes payable								98,936						98,936
Change in restricted cash— credit facilities								94,216						94,216
Change in other assets					80,530			(87,173	)					(6,643	)
Net change in investment in affiliates		5,920			601,866			(35,628	)		(572,158	)
Net cash provided by investing activities		5,920			307,959			1,743,781			(572,158	)		1,485,502
Cash flows from financing activities:
Net change in credit facilities								(967,429	)					(967,429	)
Issuance of securitization notes payable								1,000,000						1,000,000
Payments on securitization notes payable								(2,158,040	)					(2,158,040	)
Retirement of convertible senior notes		(214,473	)											(214,473	)
Debt issuance costs		(56	)		(2,158	)		(7,068	)					(9,282	)
Proceeds from issuance of common stock		1,267						(566,250	)		566,250			1,267
Other net changes		(3,094	)											(3,094	)
Net change in due (to) from affiliates		210,201			(642,557	)		435,762			(3,406	)
Net cash used by financing activities		(6,155	)		(644,715	)		(2,263,025	)		562,844			(2,351,051	)
Net increase (decrease) in cash and cash equivalents		5,920			(312,360	)		46,687			(9,314	)		(269,067	)
Effect of Canadian exchange rate changes on cash and cash equivalents		(5,920	)		(1,186	)		56			9,314			2,264
Cash and cash equivalents at beginning of period					361,352			72,141						433,493
Cash and cash equivalents at end of period	$			$	47,806		$	118,884		$			$	166,690

(a) Revised for FSP APB 14-1 (ASC 470 20 65-1), Accounting for Convertible Debt Instruments That May be Settled in Cash upon Conversion (Including Partial Cash Settlement). See Note 1 – “Summary of Significant Accounting Policies – Adoption of New Accounting Standards” and Note 6 – “Senior Notes and Convertible Senior Notes” for additional information.

33

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

GENERAL

We are a leading independent auto finance company specializing in purchasing retail automobile installment sales contracts originated by franchised and select independent dealers in connection with the sale of used and new automobiles. We generate revenue and cash flows primarily through the purchase, retention, subsequent securitization and servicing of finance receivables. As used herein, “loans” include auto finance receivables originated by dealers and purchased by us. To fund the acquisition of receivables prior to securitization, we use available cash and borrowings under our credit facility. We earn finance charge income on the finance receivables and pay interest expense on borrowings under our credit facilities and securitizations.

Through wholly-owned subsidiaries, we periodically transfer receivables to securitization trusts (“Trusts”) that issue asset-backed securities to investors. We retain an interest in these securitization transactions in the form of restricted cash accounts and overcollateralization, whereby more receivables are transferred to the Trusts than the amount of asset-backed securities issued by the Trusts, as well as the estimated future excess cash flows expected to be received by us over the life of the securitization. Excess cash flows result from the difference between the finance charges received from the obligors on the receivables and the interest paid to investors in the asset-backed securities, net of credit losses and expenses.

Excess cash flows from the Trusts are initially utilized to fund credit enhancement requirements in order to maintain specific credit ratings for the asset-backed securities issued by the Trusts. Once targeted credit enhancement requirements are reached and maintained, excess cash flows are typically distributed to us or, in a securitization utilizing a senior subordinated structure, may be used to accelerate the repayment of certain subordinated securities. In addition to excess cash flows, we receive monthly base servicing fees and we collect other fees, such as late charges, as servicer for securitization Trusts. For securitization transactions that involve the purchase of a financial guaranty insurance policy, credit enhancement requirements will increase if specified portfolio performance ratios are exceeded. Excess cash flows otherwise distributable to us from Trusts in which the portfolio performance ratios were exceeded and from other Trusts which may be subject to limited cross-collateralization provisions are accumulated in the Trusts until such higher levels of credit enhancement are reached and maintained. Our senior subordinated securitizations are not subject to portfolio performance ratios.

We structure our securitization transactions as secured financings. Accordingly, following a securitization, the finance receivables and the related securitization notes payable remain on the consolidated balance sheets. We recognize finance charge and fee income on the receivables and

34

interest expense on the securities issued in the securitization transaction and record a provision for loan losses to cover probable loan losses on the receivables.

RESULTS OF OPERATIONS

Three Months Ended December 31, 2009 as compared to

Three Months Ended December 31, 2008

Changes in Finance Receivables:

A summary of changes in our finance receivables is as follows (in thousands):

	Three Months Ended December 31,
	2009			2008
Balance at beginning of period	$	10,021,033		$	14,062,845
Loans purchased		378,595			320,830
Liquidations and other		(1,094,652	)		(1,384,543	)
Balance at end of period	$	9,304,976		$	12,999,132
Average finance receivables	$	9,641,769		$	13,547,116

The decrease in liquidations and other resulted primarily from reduced average finance receivables.

The average new loan size was $17,893 and $17,618 for the three months ended December 31, 2009 and 2008, respectively. The average annual percentage rate for finance receivables purchased during the three months ended December 31, 2009, increased to 17.9% from 17.1% during the three months ended December 31, 2008.

Net Margin:

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

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Our net margin as reflected on the consolidated statements of operations is as follows (in thousands):

	Three Months Ended December 31,
	2009			2008(a)
				(Revised)
Finance charge income	$	363,100		$	497,560
Other income		23,655			30,626
Interest expense		(121,760	)		(224,775	)
Net margin	$	264,995		$	303,411

(a) Revised for the Financial Accounting Standards Board (“FASB”) issuance of FASB Staff Position (“FSP”), Accounting Principles Board (“APB”) 14-1, Accounting for Convertible Debt Instruments That May be Settled in Cash upon Conversion (Including Partial Cash Settlement) (“FSP APB 14-1”) (Accounting Standards Codification “ASC” 470 20 65-1). See Note 1 – “Summary of Significant Accounting Policies – Adoption of New Accounting Standards” and Note 6 – “Senior Notes and Convertible Senior Notes” to the consolidated financial statements for additional information.

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

	Three Months Ended December 31,
	2009		2008(a)
			(Revised)
Finance charge income	14.9	%	14.6	%
Other income	1.0		0.9
Interest expense	(5.0	)	(6.6	)
Net margin as a percentage of average finance receivables	10.9	%	8.9	%

(a) Revised for FSP APB 14-1 (ASC 470 20 65-1),Accounting for Convertible Debt Instruments That May be Settled in Cash upon Conversion (Including Partial Cash Settlement). See Note 1 – “Summary of Significant Accounting Policies – Adoption of New Accounting Standards” and Note 6 – “Senior Notes and Convertible Senior Notes” to the consolidated financial statements for additional information.

The increase in net margin as a percentage of average finance receivables for the three months ended December 31, 2009, as compared to the three months ended December 31, 2008, was mainly a result of a decrease in interest expense due to a lower amount of average debt outstanding compared to average finance receivables, lower base borrowing rates associated with advances under our credit facilities and the acceleration of unamortized warrant costs of $14.3 million and unamortized commitment fees of $5.8 million related to the early termination of a forward purchase agreement in the three months ended December 31, 2008.

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Revenue:

Finance charge income decreased by 27.0% to $363.1 million for the three months ended December 31, 2009, from $497.6 million for the three months ended December 31, 2008, primarily due to the 28.8% decrease in average finance receivables. The effective yield on our finance receivables increased to 14.9% for the three months ended December 31, 2009, from 14.6% for the three months ended December 31, 2008. The effective yield represents finance charges and fees taken into earnings during the period as a percentage of average finance receivables and is lower than the contractual rates of our finance contracts due to finance receivables in nonaccrual status.

Other income consists of the following (in thousands):

	Three Months Ended December 31,
	2009		2008
Leasing income	$	11,313	$	11,803
Investment income		642		7,413
Late fees and other income		11,700		11,410
	$	23,655	$	30,626

Investment income decreased as a result of lower investment interest rates and lower invested restricted cash balances.

During the three months ended December 31, 2008, we repurchased on the open market, $38.9 million of convertible senior notes due in 2013 at an average price of 37.75%. We also issued 15,122,670 shares of our common stock to Fairholme Funds Inc. (“Fairholme”) in a non-cash transaction in exchange for $108.4 million of our Senior Notes due 2015 held by Fairholme at a price of $840 per $1,000 principal amount of the Notes. We recorded a gain of $30.4 million in connection with these repurchases.

Costs and Expenses:

Operating Expenses

Operating expenses decreased by 9.4% to $76.4 million for the three months ended December 31, 2009, from $84.3 million for the three months ended December 31, 2008, as a result of 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 72.9% and 71.8% of total operating expenses for the three months ended December 31, 2009 and 2008, respectively.

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Operating expenses as an annualized percentage of average finance receivables were 3.1% for the three months ended December 31, 2009 as compared to 2.5% for the three months ended December 31, 2008. The increase in operating expenses as a percentage of average finance receivables primarily resulted from higher incentive compensation accruals associated with improved operating performance, the addition of staff to support higher origination levels anticipated in the future, as well as the continued impact of a decreasing portfolio on our fixed cost base.

Provision for Loan losses

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 December 31, 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 $106.2 million for the three months ended December 31, 2009, from $288.0 million for the three months ended December 31, 2008, as a result of favorable credit performance of loans originated since early calendar year 2008 and stabilization of economic conditions. As an annualized percentage of average finance receivables, the provision for loan losses was 4.4% and 8.4% for the three months ended December 31, 2009 and 2008, respectively.

Interest Expense

Interest expense decreased to $121.8 million for the three months ended December 31, 2009, from $224.8 million for the three months ended December 31, 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 $8.2 billion and $12.5 billion for the three months ended December 31, 2009 and 2008, respectively. Our effective rate of interest on our debt decreased to 5.9% for the three months ended December 31, 2009, compared to 7.1% for the three months ended December 31, 2008, due to lower base borrowing rates associated with the advances under our credit facilities and the acceleration of unamortized warrant costs of $14.3 million and unamortized commitment fees of $5.8 million related to the early termination of a forward purchase agreement in the three months ended December 31, 2008.

Taxes

Our effective income tax rate was 36.3% and 33.7% for the three months ended December 31, 2009 and 2008, respectively. The effective tax rate for the three months ended December 2009 was higher than the rate for 2008 due primarily to higher state income tax rates and adjustments to state deferred tax assets and liabilities.

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Other Comprehensive Income (Loss):

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

	Three Months Ended December 31,
	2009			2008
Unrealized gains (losses) on cash flow hedges	$	17,087		$	(61,619	)
Canadian currency translation adjustment		1,344			(4,635	)
Income tax (provision) benefit		(6,701	)		25,169
	$	11,730		$	(41,085	)

Cash Flow Hedges

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

	Three Months Ended December��31,
	2009			2008
Unrealized losses related to changes in fair value	$	(4,303	)	$	(76,959	)
Reclassification of net unrealized losses into earnings		21,390			15,340
	$	17,087		$	(61,619	)

Unrealized gains or losses related to changes in fair value for the three months ended December 31, 2009 and 2008, were due to changes in the fair value of interest rate swap agreements that were designated as cash flow hedges for accounting purposes. The fair value of the interest rate swap agreements fluctuate based upon changes in forward interest rate expectations.

Unrealized gains or losses on cash flow hedges of our floating rate debt are reclassified into earnings when interest rate fluctuations on securitization notes payable or other hedged items affect earnings.

Canadian Currency Translation Adjustment

Canadian currency translation adjustment gains of $1.4 million and losses of $4.6 million for the three months ended December 31, 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 December 31, 2009 and 2008.

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Six Months Ended December 31, 2009 as compared to

Six Months Ended December 31, 2008

A summary of changes in our finance receivables is as follows (in thousands):

	Six Months Ended December 31,
	2009			2008
Balance at beginning of period	$	10,927,969		$	14,981,412
Loans purchased		607,668			900,120
Liquidations and other		(2,230,661	)		(2,882,400	)
Balance at end of period	$	9,304,976		$	12,999,132
Average finance receivables	$	10,062,216		$	14,045,482

The decrease in loans purchased during the six months ended December 31, 2009, as compared to the six months ended December 31, 2008, was primarily due to lowered loan production goals in order to preserve capital and liquidity.

The average new loan size was $17,820 and $17,718 for the six months ended December 31, 2009 and 2008, respectively. The average annual percentage rate for finance receivables purchased during the six months ended December 31, 2009, increased to 18.4% from 16.8% during the six months ended December 31, 2008, as a result of the need to pass through higher funding costs in the form of higher pricing.

Net Margin:

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

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Our net margin as reflected on the consolidated statements of operations is as follows (in thousands):

	Six Months Ended December 31,
	2009			2008(a)
				(Revised)
Finance charge income	$	752,896		$	1,031,533
Other income		47,143			61,702
Interest expense		(251,908	)		(425,429	)
Net margin	$	548,131		$	667,806

(a) Revised for FSP APB 14-1 (ASC 470 20 65-1),Accounting for Convertible Debt Instruments That May be Settled in Cash upon Conversion (Including Partial Cash Settlement). See Note 1 – “Summary of Significant Accounting Policies – Adoption of New Accounting Standards” and Note 6 – “Senior Notes and Convertible Senior Notes” to the consolidated financial statements for additional information.

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

	Six Months Ended December 31,
	2009		2008(a)
			(Revised)
Finance charge income	14.8	%	14.5	%
Other income	0.9		0.9
Interest expense	(4.9	)	(6.0	)
Net margin as a percentage of average finance receivables	10.8	%	9.4	%

(a) Revised for FSP APB 14-1 (ASC 470 20 65-1),Accounting for Convertible Debt Instruments That May be Settled in Cash upon Conversion (Including Partial Cash Settlement). See Note 1 – “Summary of Significant Accounting Policies – Adoption of New Accounting Standards” and Note 6 – “Senior Notes and Convertible Senior Notes” to the consolidated financial statements for additional information.

The increase in net margin as a percentage of average finance receivables for the six months ended December 31, 2009, as compared to the six months ended December 31, 2008, was mainly a result of a decrease in interest expense due to a lower amount of average debt outstanding compared to average finance receivables, lower base borrowing rates associated with advances under our credit facilities and the acceleration of unamortized warrant costs of $14.3 million and unamortized commitment fees of $5.8 million related to the early termination of a forward purchase agreement in the six months ended December 31, 2008.

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Revenue:

Finance charge income decreased by 27.0% to $752.9 million for the six months ended December 31, 2009, from $1,031.5 million for the six months ended December 31, 2008, primarily due to the 28.4% decrease in average finance receivables. The effective yield on our finance receivables increased to 14.8% for the six months ended December 31, 2009, from 14.5% for the six months ended December 31, 2008. The effective yield represents finance charges and fees taken into earnings during the period as a percentage of average finance receivables and may be lower than the contractual rates of our finance contracts due to finance receivables in nonaccrual status.

Other income consists of the following (in thousands):

	Six Months Ended December 31,
	2009		2008
Leasing income	$	22,771	$	23,748
Investment income		1,626		12,339
Late fees and other income		22,746		25,615
	$	47,143	$	61,702

Investment income decreased as a result of lower investment interest rates and lower invested restricted cash balances.

During the six months ended December 31, 2008, we repurchased on the open market, $38.9 million of convertible senior notes due in 2013 at an average price of 37.75% and $114.7 million of convertible senior notes due in 2023 at an average price of 98.90%. We also issued 15,122,670 shares of our common stock to Fairholme in a non-cash transaction in exchange for $108.4 million of our Senior Notes due 2015 held by Fairholme, at a price of $840 per $1,000 principal amount of the Notes. We recorded a gain of $31.4 million in connection with these repurchases.

Costs and Expenses:

Operating Expenses

Operating expenses decreased by 13.8% to $145.3 million for the six months ended December 31, 2009, from $168.6 million for the six months ended December 31, 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 71.6% and 71.4% of total operating expenses for the six months ended December 31, 2009 and 2008, respectively.

Operating expenses as an annualized percentage of average finance receivables were 2.9% for the six months ended December 31, 2009, as compared to 2.4% for

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the six months ended December 31, 2008. The increase in operating expenses as a percentage of average finance receivables primarily resulted from higher incentive compensation accruals associated with improved operating performance, the addition of staff to support higher origination levels anticipated in the future, as well as the continued impact of a decreasing portfolio on our fixed cost base.

Provision for Loan losses

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 six months ended December 31, 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 $264.1 million for the six months ended December 31, 2009, from $562.9 million for the six months ended December 31, 2008, as a result of favorable credit performance of loans originated since early calendar year 2008 and stabilization of economic conditions. As an annualized percentage of average finance receivables, the provision for loan losses was 5.2% and 7.9% for the six months ended December 31, 2009 and 2008, respectively.

Interest Expense

Interest expense decreased to $251.9 million for the six months ended December 31, 2009, from $425.4 million for the six months ended December 31, 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 $8.7 billion and $13.0 billion for the six months ended December 31, 2009 and 2008, respectively. Our effective rate of interest paid on our debt decreased to 5.8% for the six months ended December 31, 2009, compared to 6.5% for the six months ended December 31, 2008, due to lower base borrowing rates associated with the advances under our credit facilities and the acceleration of unamortized warrant costs of $14.3 million and unamortized commitment fees of $5.8 million related to the early termination of a forward purchase agreement in the six months ended December 31, 2008.

Taxes

Our effective income tax rate was 39.4% and 30.6% for the six months ended December 31, 2009 and 2008, respectively. The effective tax rate for the six months ended December 2009 was higher than the rate for 2008 due primarily to higher state income tax rates and adjustments to state deferred tax assets and liabilities.

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Other Comprehensive Income (Loss):

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

	Six Months Ended December 31,
	2009			2008
Unrealized gains (losses) on cash flow hedges	$	24,498		$	(51,694	)
Canadian currency translation adjustment		8,268			(5,920	)
Income tax (provision) benefit		(11,877	)		21,890
	$	20,889		$	(35,724	)

Cash Flow Hedges

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

	Six Months Ended December 31,
	2009			2008
Unrealized losses related to changes in fair value	$	(20,136	)	$	(87,184	)
Reclassification of net unrealized losses into earnings		44,634			35,490
	$	24,498		$	(51,694	)

Unrealized gains or losses related to changes in fair value for the six months ended December 31, 2009 and 2008, were due to changes in the fair value of interest rate swap agreements that were designated as cash flow hedges for accounting purposes. The fair value of the interest rate swap agreements fluctuates based upon changes in forward interest rate expectations.

Unrealized gains or losses on cash flow hedges of our floating rate debt are reclassified into earnings when interest rate fluctuations on securitization notes payable or other hedged items affect earnings.

Canadian Currency Translation Adjustment

Canadian currency translation adjustment gains of $8.3 million and losses of $5.9 million for the six months ended December 31, 2009 and 2008, respectively, were included in other comprehensive loss. 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 six months ended December 31, 2009 and 2008.

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CREDIT QUALITY

Generally, we provide financing in relatively high-risk markets, and, therefore, anticipate a corresponding high level of delinquencies and charge-offs.

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

	December 31, 2009			June 30, 2009
Principal amount of receivables, net of fees	$	9,304,976		$	10,927,969
Nonaccretable acquisition fees		(6,277	)		(12,100	)
Allowance for loan losses		(710,782	)		(878,540	)
Receivables, net	$	8,587,917		$	10,037,329
Number of outstanding contracts		812,530			895,708
Average carrying amount of outstanding contract (in dollars)	$	11,452		$	12,200
Allowance for loan losses and nonaccretable acquisition fees as a percentage of receivables		7.7	%		8.2	%

The allowance for loan losses and nonaccretable acquisition fees as a percentage of receivables decreased to 7.7% as of December 31, 2009, from 8.2% as of June 30, 2009, as a result of favorable credit performance of loans originated since early calendar year 2008 and stabilization of economic conditions.

Delinquency

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

	December 31, 2009				December 31, 2008
	Amount		Percent		Amount		Percent
Delinquent contracts:
31 to 60 days	$	718,237	7.7	%	$	1,017,246	7.8	%
Greater-than-60 days		344,406	3.7			541,566	4.2
		1,062,643	11.4			1,558,812	12.0
In repossession		54,598	0.6			44,727	0.3
	$	1,117,241	12.0	%	$	1,603,539	12.3	%

An account is considered delinquent if a substantial portion of a scheduled payment has not been received by the date such payment was contractually due.

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Delinquencies in our receivables portfolio may vary from period to period based upon the average age or seasoning of the portfolio, seasonality within the calendar year and economic factors. Due to our target customer base, a relatively high percentage of accounts become delinquent at some point in the life of a loan and there is a high rate of account movement between current and delinquent status in the portfolio.

Deferrals

In accordance with our policies and guidelines, we, at times, offer payment deferrals to consumers whereby the consumer is allowed to move up to two delinquent payments to the end of the loan generally by paying a fee (approximately the interest portion of the payment deferred, except where state law provides for a lesser amount). Our policies and guidelines limit the number and frequency of deferments that may be granted. Additionally, we generally limit the granting of deferments on new accounts until a requisite number of payments have been received. Due to the nature of our customer base and policies and guidelines of the deferral program, approximately 50% of accounts historically comprising the portfolio receive a deferral at some point in the life of the account.

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

Contracts receiving a payment deferral as an average quarterly percentage of average finance receivables outstanding were 8.2% and 7.7% for the six months ended December 31, 2009 and 2008, respectively. Contracts receiving a payment deferral increased as economic conditions resulted in more eligible consumers requesting and being granted deferments.

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

	December 31, 2009		June 30, 2009
Never deferred	64.9	%	66.9	%
Deferred:
1-2 times	25.9		26.0
3-4 times	9.1		7.0
Greater than 4 times	0.1		0.1
Total deferred	35.1		33.1
Total	100.0	%	100.0	%

We evaluate the results of our deferment strategies based upon the amount of cash installments that are collected on accounts after they have been deferred versus the extent to which the collateral underlying the deferred accounts has

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depreciated over the same period of time. Based on this evaluation, we believe that payment deferrals granted according to our policies and guidelines are an effective portfolio management technique and result in higher ultimate cash collections from the portfolio.

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

Charge-offs

The following table presents charge-off data with respect to our finance receivables portfolio (dollars in thousands):

	Three Months Ended December 31,						Six Months Ended December 31,
	2009			2008			2009			2008
Repossession charge-offs	$	336,287		$	401,873		$	703,633		$	765,402
Less: Recoveries		(141,918	)		(149,283	)		(298,847	)		(300,606	)
Mandatory charge-offs (a)		20,728			72,575			32,944			126,228
Net charge-offs	$	215,097		$	325,165		$	437,730		$	591,024
Net charge-offs as an annualized percentage of average receivables:		8.9	%		9.5	%		8.6	%		8.3	%
Recoveries as a percentage of gross repossession charge-offs:		42.2	%		37.1	%		42.5	%		39.3	%

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

Net charge-offs as an annualized percentage of average finance receivables outstanding may vary from period to period based upon the average age or seasoning of the portfolio and economic factors. The decrease in net charge-offs as an annualized percentage of average finance receivables for the three months ended December 31, 2009, as compared to the three months ended December 31, 2008, was a result of favorable credit performance of loans originated since early calendar year 2008, stabilization of economic conditions and an increase in recovery rates.

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LIQUIDITY AND CAPITAL RESOURCES

General

Our primary sources of cash are finance charge income, servicing fees, distributions from securitization Trusts, borrowings under credit facilities, transfers of finance receivables to Trusts in securitization transactions and collections and recoveries on finance receivables. Our primary uses of cash are purchases of finance receivables, repayment of credit facilities and securitization notes payable, funding credit enhancement requirements for securitization transactions and credit facilities, repayment of senior notes and convertible senior notes, operating expenses and income tax payments.

We used cash of $585.7 million and $913.6 million for the purchase of finance receivables during the six months ended December 31, 2009 and 2008, respectively. These purchases were funded initially utilizing cash and borrowings on our credit facilities and our strategy is to subsequently obtain long-term financing for finance receivables through securitization transactions.

Credit Facilities

In the normal course of business, in addition to using our available cash, we pledge receivables and borrow under our credit facilities to fund our operations and repay these borrowings as appropriate under our cash management strategy.

As of December 31, 2009, credit facilities consisted of the following (in millions):

Facility Type	Maturity	Facility Amount		Advances Outstanding
Master warehouse facility (a)	March 2010	$	1,000.0
Medium term note facility (b)			750.0	$	709.9
		$	1,750.0	$	709.9

(a) The revolving period under this facility ends in March 2010 and any outstanding balance will be repaid over time based on the amortization of the receivables pledged until April 2011 when any remaining amount outstanding will be due and payable.

(b) The revolving period under this facility ended in October 2009, and the outstanding debt balance will be repaid over time based on the amortization of the receivables pledged until October 2016 when any remaining amount outstanding will be due and payable.

We are required to hold certain funds in restricted cash accounts to provide additional collateral for borrowings under the facilities. Additionally, certain funding agreements contain various covenants requiring minimum financial ratios, asset quality and portfolio performance ratios (portfolio net loss and delinquency ratios, and pool level cumulative net loss ratios) as

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well as limits on deferment levels. Failure to meet any of these covenants could result in an event of default under these agreements. If an event of default occurs under these agreements, the lenders could elect to declare all amounts outstanding under these agreements to be immediately due and payable, enforce their interests against collateral pledged under these agreements, restrict our ability to obtain additional borrowings under these agreements and/or remove us as servicer. As of December 31, 2009, we were in compliance with all covenants in our credit facilities.

Our primary warehouse facility, the Master warehouse facility, matures in March 2010 and if not renewed, will not be available for future borrowings. We are in negotiations with our bank group to extend this facility and expect that this facility will be renewed at a larger size, lower cost and similar advance rate.

Securitizations

We have completed 67 securitization transactions through December 31, 2009, excluding securitization Trusts entered into by Bay View Acceptance Corporation (“BVAC”) and Long Beach Acceptance Corporation (“LB”) prior to their acquisition by us. The proceeds from the transactions were primarily used to repay borrowings outstanding under our credit facilities.

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

Transaction	Date	Original Amount		Balance at December 31, 2009
2004-D-F	November 2004	$	750.0	$	26.6
2005-A-X	February 2005		900.0		43.2
2005-1	April 2005		750.0		36.1
2005-B-M	June 2005		1,350.0		106.8
2005-C-F	August 2005		1,100.0		111.9
2005-D-A	November 2005		1,400.0		177.7
2006-1	March 2006		945.0		120.7
2006-R-M	May 2006		1,200.0		348.2
2006-A-F	July 2006		1,350.0		286.2
2006-B-G	September 2006		1,200.0		303.4
2007-A-X	January 2007		1,200.0		358.8
2007-B-F	April 2007		1,500.0		526.4
2007-1 (APART)	May 2007		1,000.0		343.9
2007-C-M	July 2007		1,500.0		607.5
2007-D-F	September 2007		1,000.0		438.0
2007-2-M (APART)	October 2007		1,000.0		436.6
2008-A-F	May 2008		750.0		428.9
2008-1	October 2008		500.0		305.1
2008-2	November 2008		500.0		316.1
2009-1	July 2009		725.0		573.8
2009-1 (APART)	October 2009		227.5		215.9
BV2005-LJ-1	February 2005		232.1		18.4
BV2005-LJ-2 (a)	July 2005		185.6		17.7
BV2005-3	December 2005		220.1		31.8
LB2004-C	December 2004		350.0		12.6
LB2005-A	June 2005		350.0		27.2
LB2005-B	October 2005		350.0		36.2
LB2006-A	May 2006		450.0		72.7
LB2006-B	September 2006		500.0		115.8
LB2007-A	March 2007		486.0		146.4
Total active securitizations		$	23,971.3	$	6,590.6

(a) Balance at December 31, 2009, does not include $1.4 million of asset-backed securities repurchased and retained by us.

We structure our securitization transactions as secured financings. Finance receivables are transferred to a securitization Trust, which is one of our special purpose finance subsidiaries, and the Trusts issue one or more series of asset-backed securities (securitization notes payable). While these Trusts are included in our consolidated financial statements, these Trusts are separate legal entities; thus the finance receivables and other assets held by these Trusts are legally owned by these Trusts, are available to satisfy the related securitization notes payable and are not available to our creditors or our other subsidiaries.

At the time of securitization of finance receivables, we are required to pledge assets equal to a specified percentage of the securitization pool to provide credit enhancement required for specific credit ratings for the asset-backed securities issued by the Trusts.

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Beginning in fiscal 2009, we began to primarily utilize senior subordinated securitization structures which involve the sale of subordinated asset-backed securities to provide credit enhancement for the senior, or higher rated, asset-backed securities. In July 2009, we closed a senior subordinated securitization, AmeriCredit Automobile Receivables Trust (“AMCAR”) 2009-1, which had initial cash deposit and overcollateraliziation requirements of 28.1%. The level of credit enhancement in future senior subordinated securitizations will depend, in part, on the net interest margin, collateral characteristics, and credit performance trends of the receivables transferred, as well as our financial condition, the economic environment and our ability to sell lower rated subordinated bonds at rates we consider acceptable.

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

	Six Months Ended December 31,
	2009		2008
Initial credit enhancement deposits:
Restricted cash	$	22.6	$	25.8
Overcollateralization		323.1		289.1
Distributions from Trusts		129.6		284.3

Prior to fiscal 2009, the securitization structure we primarily utilized involved the purchase of a financial guaranty insurance policy issued by an insurer. The agreements with the insurers of our securitization transactions covered by a financial guaranty insurance policy provide that if portfolio performance ratios (delinquency, cumulative default or cumulative net loss) in a Trust’s pool of receivables exceed certain targets, the specified credit enhancement levels would be increased.

The securitization transactions insured by some of our financial guaranty insurance providers are cross-collateralized to a limited extent. In the event of a shortfall in the original target credit enhancement requirement for any of these securitization Trusts after a certain period of time, excess cash flows from other transactions insured by the same insurance provider would be used to satisfy the shortfall in the original target credit enhancement requirement.

As of December 31, 2009, we have exceeded certain portfolio performance ratios in several AMCAR and LB securitizations. Excess cash flows from these Trusts have been or are being used to build higher enhancement in each respective Trust instead of being distributed to us. We do not expect the trapping of excess cash flows from these Trusts to have a material adverse impact to our liquidity.

The agreements that we have entered into with our financial guaranty insurance providers in connection with securitization transactions insured by them contain additional specified targeted portfolio performance ratios (delinquency, cumulative default and cumulative net loss) that are higher than

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the limits referred to above. If, at any measurement date, the targeted portfolio performance ratios with respect to any insured Trust were to exceed these additional levels, provisions of the agreements permit the financial guaranty insurance providers to declare the occurrence of an event of default and take steps to terminate our servicing rights to the receivables sold to that Trust. In addition, the servicing agreements on certain insured securitization Trusts are cross-defaulted so that a default declared under one servicing agreement would allow the financial guaranty insurance provider to terminate our servicing rights under all servicing agreements for securitization Trusts in which they issued a financial guaranty insurance policy. Additionally, if these higher targeted portfolio performance levels were exceeded and the financial guaranty insurance providers elect to declare an event of default, the insurance providers may retain all excess cash generated by other securitization transactions insured by them as additional credit enhancement. This, in turn, could result in defaults under our other securitizations and other material indebtedness, including under our senior note and convertible note indentures. Although we have never exceeded these additional targeted portfolio performance ratios, and we currently believe it is unlikely that an event of default would be declared and our servicing rights terminated if we were to exceed these higher targeted ratios, there can be no assurance that an event of default will not be declared and our servicing rights will not be terminated if (i) such targeted portfolio performance ratios are breached, (ii) we breach our obligations under the servicing agreements, (iii) the financial guaranty insurance providers are required to make payments under a policy, or (iv) certain bankruptcy or insolvency events were to occur. As of December 31, 2009, no such servicing right termination events have occurred with respect to any of the Trusts formed by us.

On January 22, 2010, we entered into an agreement with Assured Guaranty Municipal Corp., formerly known as Financial Security Assurance, Inc., to increase the levels of additional specified targeted portfolio performance ratios in the AMCAR 2007-D-F, AMCAR 2008-A-F, LB2006-B and LB2007-A securitizations. As part of this agreement, we deposited $38.0 million in the AMCAR 2007-D-F securitization restricted cash account and $57.0 million in the AMCAR 2008-A-F securitization restricted cash account. This cash is expected to be distributed to us over time as the securitization notes payable pay down.

Contractual Obligations

As of December 31, 2009, we had liabilities, included in accrued taxes and expenses on the consolidated balance sheets, associated with uncertain tax positions of $51.0 million. Due to uncertainty regarding the timing of future cash flows associated with those liabilities, a reasonable estimate of the period of cash settlement is not determinable.

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Recent Accounting Pronouncements and Accounting Changes

On August 28, 2009, the FASB issued Accounting Standards Update (“ASU”) 2009-05 to provide guidance on measuring the fair value of liabilities. The fair value of a financial instrument is defined as the price that would be paid to transfer a liability in an orderly transaction between market participants. However, most liabilities have restrictions that do not allow them to be transferred and as such there is not a market for transferring the liabilities. This accounting update states that in the absence of a market for the liability a company can use (a) the quoted price of the identical liability when traded as an asset; (b) a quoted price for similar liabilities when traded as assets; (c) or another valuation technique that is consistently applied such as a present value technique. This ASU became effective during the three months ended December 31, 2009 and did not have a material impact on our consolidated financial position, results of operations or cash flows.

On January 21, 2010, the FASB issued ASU 2010-06 to add new requirements for fair value disclosures about transfers into and out of Levels 1 and 2 and separate disclosures about purchases, sales, issuances, and settlements relating to Level 3 measurements. The ASU is effective for the first operating period beginning after December 15, 2009. Management has evaluated the impact of the update and it is not expected to have a material impact on our consolidated financial position, results of operations or cash flows.

INTEREST RATE RISK

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

Credit Facilities

Finance receivables purchased by us and pledged to secure borrowings under our credit facilities bear fixed interest rates. Amounts borrowed under our credit facilities bear interest at variable rates that are subject to frequent adjustments to reflect prevailing market interest rates. To protect the interest rate spread within each credit facility, our special purpose finance subsidiaries are contractually required to purchase interest rate cap agreements in connection with borrowings under our credit facilities. The purchaser of the interest rate cap agreement pays a premium in return for the right to receive the difference in the interest cost at any time a specified index of market interest rates rises above the stipulated “cap” rate. The purchaser of the interest rate cap agreement bears no obligation or liability if interest rates fall below the “cap” rate. As part of our interest rate risk management strategy and when economically feasible, we may simultaneously sell a corresponding interest rate cap agreement in order to offset the premium

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paid by our special purpose finance subsidiary to purchase the interest rate cap agreement and thus retain the interest rate risk. The fair value of the interest rate cap agreement purchased by the special purpose finance subsidiary is included in other assets and the fair value of the interest rate cap agreement sold by us is included in other liabilities on our consolidated balance sheets.

Securitizations

The interest rate demanded by investors in our securitization transactions depends on prevailing market interest rates for comparable transactions and the general interest rate environment. We utilize several strategies to minimize the impact of interest rate fluctuations on our gross interest rate margin, including the use of derivative financial instruments and the regular sale or pledging of receivables to securitization Trusts.

In our securitization transactions, we transfer fixed rate finance receivables to Trusts that, in turn, sell either fixed rate or floating rate securities to investors. The fixed rates on securities issued by the Trusts are indexed to market interest rate swap spreads for transactions of similar duration or various London Interbank Offered Rates (“LIBOR”) and do not fluctuate during the term of the securitization. The floating rates on securities issued by the Trusts are indexed to LIBOR and fluctuate periodically based on movements in LIBOR. Derivative financial instruments, such as interest rate swap and cap agreements, are used to manage the gross interest rate spread on these transactions. We use interest rate swap agreements to convert the variable rate exposures on securities issued by our securitization Trusts to a fixed rate, thereby locking in the gross interest rate spread to be earned by us over the life of a securitization. Interest rate swap agreements purchased by us do not impact the amount of cash flows to be received by holders of the asset-backed securities issued by the Trusts. The interest rate swap agreements serve to offset the impact of increased or decreased interest paid by the Trusts on floating rate asset-backed securities on the cash flows to be received by us from the Trusts. We utilize such arrangements to modify our net interest sensitivity to levels deemed appropriate based on our risk tolerance. In circumstances where the interest rate risk is deemed to be tolerable, usually if the risk is less than one year in term at inception, we may choose not to hedge potential fluctuations in cash flows due to changes in interest rates. Our special purpose finance subsidiaries are contractually required to purchase a financial instrument to protect the net spread in connection with the issuance of floating rate securities even if we choose not to hedge our future cash flows. Although the interest rate cap agreements are purchased by the Trusts, cash outflows from the Trusts ultimately impact our retained interests in the securitization transactions as cash expended by the securitization Trusts will decrease the ultimate amount of cash to be received by us. Therefore, when economically feasible, we may simultaneously sell a corresponding interest rate cap agreement to offset the premium paid by the Trust to purchase the interest rate cap agreement. The fair value of the interest rate cap agreements purchased by the special purpose finance subsidiaries in connection with securitization transactions are included in

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other assets and the fair value of the interest rate cap agreements sold by us are included in other liabilities on our consolidated balance sheets. Changes in the fair value of the interest rate cap agreements are reflected in interest expense on our consolidated statements of operations.

We have entered into interest rate swap agreements to hedge the variability in interest payments on nine of our active securitization transactions. Portions of these interest rate swap agreements are designated and qualify as cash flow hedges. The fair value of interest rate swap agreements designated as hedges is included in liabilities on the consolidated balance sheets. Interest rate swap agreements that are not designated as hedges are included in other assets on the consolidated balance sheets.

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

FORWARD LOOKING STATEMENTS

The preceding Management’s Discussion and Analysis of Financial Condition and Results of Operations section contains several “forward-looking statements.” Forward-looking statements are those that use words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “may,” “likely,” “should,” “estimate,” “continue,” “future” or other comparable expressions. These words indicate future events and trends. Forward-looking statements are our current views with respect to future events and financial performance. These forward-looking statements are subject to many assumptions, risks and uncertainties that could cause actual results to differ significantly from historical results or from those anticipated by us. The most significant risks are detailed from time to time in our filings and reports with the Securities and Exchange Commission (the “Commission”) including our Annual Report on Form 10-K for the year ended June 30, 2009. It is advisable not to place undue reliance on our forward-looking statements. We undertake no obligation to, and do not, publicly update or revise any forward-looking statements, except as required by federal securities laws, whether as a result of new information, future events or otherwise.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

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Item 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

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

The CEO and CFO, with the participation of management, have evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2009. Based on their evaluation, they have concluded that the disclosure controls and procedures are effective.

Internal Control Over Financial Reporting

There were no changes made in our internal control over financial reporting during the three months ended December 31, 2009, that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

Limitations Inherent in all Controls

Our management, including the CEO and CFO, recognize that the disclosure controls and internal controls (discussed above) cannot prevent all errors or all attempts at fraud. Any controls system, no matter how well crafted and operated, can only provide reasonable, and not absolute, assurance of achieving the desired control objectives, and management was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Because of the inherent limitations in any control system, no evaluation or implementation of a control system can provide complete assurance that all control issues and all possible instances of fraud have been or will be detected.

Part II.    OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

As a consumer finance company, we are subject to various consumer claims and litigation seeking damages and statutory penalties, based upon, among other things, usury, disclosure inaccuracies, wrongful repossession, violations of bankruptcy stay provisions, certificate of title disputes, fraud, breach of

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contract and discriminatory treatment of credit applicants. Some litigation against us could take the form of class action complaints by consumers and/or shareholders. As the assignee of finance contracts originated by dealers, we may also be named as a co-defendant in lawsuits filed by consumers principally against dealers. The damages and penalties claimed by consumers in these types of matters can be substantial. The relief requested by the plaintiffs varies but can include requests for compensatory, statutory and punitive damages. We believe that we have taken prudent steps to address and mitigate the litigation risks associated with our business activities. In the opinion of management, the ultimate aggregate liability, if any, arising out of any such pending or threatened litigation will not be material to our consolidated financial position, results of operations or cash flows.

Item 1A. RISK FACTORS

In addition to the other information set forth in this report, the factors discussed in Part I, Item 1, “Risk Factors” in our Annual Report on Form 10-K for the year ended June 30, 2009, should be carefully considered as these risk factors could materially affect our business, financial condition or future results. The risks described in our Annual Report on Form 10-K are not the only risks facing us.

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

Not Applicable

Item 3. DEFAULTS UPON SENIOR SECURITIES

Not Applicable

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

Not Applicable

Item 5. OTHER INFORMATION

Not Applicable

Item 6. EXHIBITS

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

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

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SIGNATURE

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

		AmeriCredit Corp.
		(Registrant)
Date: February 5, 2010	By:	/S/    CHRIS A. CHOATE
		(Signature)
		Chris A. Choate
		Executive Vice President,
		Chief Financial Officer and Treasurer

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