EXHIBIT 99.1
1. CAC HAS 23,900 MORE LOANS AT 6/30/05 VS. 6/30/04. AT $12,000 PER LOAN, THE
FACE AMOUNT WOULD BE ROUGHLY $286.8 MILLION. GIVEN AN ADVANCE RATE OF
APPROXIMATELY 49%, LOAN ASSETS HAVE GROWN BY ABOUT $140.5 MILLION. CAC'S NET
DEBT HAS INCREASED $30 MILLION OVER THE SAME 12 MONTH PERIOD. CAC ALSO BOUGHT
BACK $50 MILLION WORTH OF STOCK. WE ESTIMATE THAT CAC HAS GENERATED ABOUT $50
MILLION OF ECONOMIC EARNINGS IN THAT SAME 12 MONTHS. WHAT ACCOUNTS FOR THE
ADDITIONAL $110.4 MILLION OF CASH FLOWS INTO THE COMPANY THAT HAS FUNDED THE
INCREASED ASSET BASE?
Your calculation overstates the increase in loan assets. To calculate the
increase in loan assets, the percentage increase in the number of loans should
be applied to the average investment in loan assets, not the initial investment.
The information necessary to calculate the average investment in loan assets
will not be available until our restated financials are completed.
2. HOW MANY DEALERS PAID CAC A $599 MONTHLY FEE IN THE QTR ENDED 6/30/05 VS. HOW
MANY DEALERS PAID THE MONTHLY FEE IN THE QUARTER ENDED 6/30/04, REGARDLESS IF
THE DEALER ORIGINATED A LOAN DURING THE QUARTER?
THREE MONTHS ENDED
JUNE 30,
2005 2004
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Dealer-partners paying monthly CAPS fee (1), (2) 1,342 959
(1) Effective February 1, 2005 the monthly CAPS fee charged to
dealer-partners was increased from $499 to $599
(2) Includes unique dealer-partners who paid at least one
monthly CAPS fee during the quarter.
3. WHY DID YOU HIRE GRANT THORNTON AS YOUR AUDITOR VS. ONE OF THE REMAINING BIG
4 AUDITORS? DO YOU ANTICIPATE THAT GT WILL BE MORE RESPONSIVE TO THE NEEDS OF
CAC THAN A BIG 4 FIRM WOULD, AND HAS YOUR ESTIMATED TIME FRAME OF SIX MONTHS FOR
YOUR REQUIRED RESTATEMENTS CHANGED?
We sought competitive bids from several firms. Upon meeting the representatives
of the firms and reviewing their proposals, we felt that Grant Thornton was the
best fit for the Company at this time due to a variety of factors including
responsiveness and availability of national and local resources.
At this point, we have no new information that would change our original
statement related to the time frame to complete.
4. DOES THE SEC ACTION HAVE ANYTHING TO DO WITH THE 2002 CHANGE IN ACCOUNTING BY
AMERICREDIT?
No. Once it was apparent that Deloitte no longer agreed with the methodology the
Company had been using since becoming a public registrant in 1992, the Company
voluntarily sought guidance from the SEC.
5. WHY DOES THE SEC TAKE THE POSITION CACC IS A LENDER TO THE AUTO DEALERS?
The SEC, in responding to a request for guidance by the Company, took the
position that they saw no reason to disagree with Deloitte & Touche. After
agreeing that the Company was a consumer lender for six years, Deloitte abruptly
changed their position earlier this year and concluded we were really a lender
to the dealer. It is not clear that the SEC would have viewed the Company's
accounting as a consumer lender as inappropriate absent Deloitte's change of
position. In fact, the SEC reviewed the Company's prior accounting on two
different occasions without expressing such a view.
Without getting into more detail than is necessary, the Company believes the
facts support several different conclusions regarding the classification of our
business for accounting purposes. The most important fact supporting the
classification of the Company as a lender to the dealer is a clause within our
dealer agreement that allows the dealer-partner to repurchase the consumer
loans. This was viewed by both Deloitte and the SEC as evidence that the
consumer loan was really the property of the dealer-partner.
It is worth repeating the obvious conclusion that our classification for
accounting purposes does not ultimately impact the cash flows available to
shareholders or the value of our business.
CAUTIONARY STATEMENT REGARDING FORWARD LOOKING INFORMATION
Certain statements in this document that are not historical facts, such as those
using terms like "believes," "expects," "anticipates," "assumptions,"
"forecasts," "estimates" and those regarding the Company's future results, plans
and objectives, are "forward-looking statements" within the meaning of the
federal securities laws. These forward-looking statements represent the
Company's outlook only as of the date of this document. While the Company
believes that its forward-looking statements are reasonable, actual results
could differ materially since the statements are based on current expectations,
which are subject to risks and uncertainties. Factors that might cause such a
difference include the following:
- the Company's potential inability to accurately forecast and
estimate the amount and timing of future collections,
- the Company's pending restatement of prior years financial
statements,
- increased competition from traditional financing sources and from
non-traditional lenders,
- the unavailability of funding at competitive rates of interest,
- the Company's potential inability to continue to obtain third
party financing on favorable terms,
- the Company's potential inability to generate sufficient cash
flow to service its debt and fund its future operations,
- adverse changes in applicable laws and regulations,
- adverse changes in economic conditions,
- adverse changes in the automobile or finance industries or in the
non-prime consumer finance market,
- the Company's potential inability to maintain or increase the
volume of automobile loans,
- an increase in the amount or severity of litigation against the
Company,
- the loss of key management personnel or the inability to hire
qualified personnel,
- the effect of terrorist attacks and potential attacks, and
- various other factors discussed in the Company's reports filed
with the Securities and Exchange Commission.
Other factors not currently anticipated by management may also materially and
adversely affect the Company's results of operations. The Company does not
undertake, and expressly disclaims any obligation, to update or alter its
statements whether as a result of new information, future events or otherwise,
except as required by applicable law.