UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE STOCK
REPURCHASE SAVINGS AND SIMILAR PLANS
PURSUANT TO SECTION 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal year end December 31, 2003
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from __________ to __________
Commission File Number: 000-20202
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
CREDIT ACCEPTANCE CORPORATION 401(k) PROFIT SHARING PLAN AND TRUST
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
CREDIT ACCEPTANCE CORPORATION
25505 West Twelve Mile Road, Suite 3000
Southfield, Michigan 48034-8339
CREDIT ACCEPTANCE CORPORATION
401(K) PROFIT SHARING PLAN AND TRUST
TABLE OF CONTENTS
PAGE
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 3
FINANCIAL STATEMENTS:
Statements of Assets Available for Benefits as of December 31, 2003 and 2002 4
Statement of Changes in Assets Available for Benefits for the Year Ended December 31, 2003 5
Notes to Financial Statements 6
SUPPLEMENTAL SCHEDULES:
Form 5500, Schedule H, Part IV, Line 4i -- Schedule of Assets (Held at End of Year) as of December 31, 2003 11
Form 5500, Schedule G, Question 4a -- Delinquent Participant Contributions for the Year Ended December 31, 2003 12
All other schedules required by Section 2520.103-10 of the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of 1974 have been omitted
because they are not applicable.
SIGNATURES 13
EXHIBIT INDEX 14
2
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Plan Administrator
Credit Acceptance Corporation
401(k) Profit Sharing Plan and Trust
We have audited the accompanying statements of assets available for benefits of
Credit Acceptance Corporation 401(k) Profit Sharing Plan and Trust (the "Plan")
as of December 31, 2003 and 2002, and the related statement of changes in assets
available for benefits for the year ended December 31, 2003. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan as of December 31,
2003 and 2002, and the changes in net assets available for benefits for the year
ended December 31, 2003 in conformity with accounting principles generally
accepted in the United States of America.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedules
of assets held at year end as of December 31, 2003 and delinquent participant
contributions for the year ended December 31, 2003, are presented for the
purpose of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. The supplemental schedules
are the responsibility of the Plan's management. Such supplemental schedules
have been subjected to the auditing procedures applied in our audits of the
basic financial statements and, in our opinion, are fairly stated in all
material respects when considered in relation to the basic financial statements
taken as a whole.
/s/ Deloitte & Touche LLP
Detroit, Michigan
October 1, 2004
3
CREDIT ACCEPTANCE CORPORATION
401(K) PROFIT SHARING PLAN AND TRUST
STATEMENTS OF ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2003 AND 2002
2003 2002
----------- -----------
ASSETS:
Investments -- at fair value:
Investments $ 5,527,944 $ 3,535,502
Participant loans 200,387 164,509
----------- -----------
Total investments 5,728,331 3,700,011
Receivables:
Employer contributions 5,118 6,105
Participants contributions 84,202 60,403
Other (265) 273
----------- -----------
Total receivables 89,055 66,781
----------- -----------
ASSETS AVAILABLE FOR BENEFITS $ 5,817,386 $ 3,766,792
=========== ===========
See notes to financial statements.
4
CREDIT ACCEPTANCE CORPORATION
401(K) PROFIT SHARING PLAN AND TRUST
STATEMENT OF CHANGES IN ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 2003
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Interest and dividends $ 49,947
Net appreciation of investments 1,003,495
----------
Net investment income 1,053,442
Contributions:
Employer 131,700
Participants 1,053,820
Rollovers 101,873
----------
Total contributions 1,287,393
----------
Total additions 2,340,835
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Loan fees paid by participants 5,675
Benefits paid to participants 281,520
Other fees 3,046
----------
Total deductions 290,241
----------
Net increase 2,050,594
ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 3,766,792
----------
End of year $5,817,386
==========
See notes to financial statements.
5
CREDIT ACCEPTANCE CORPORATION
401(K) PROFIT SHARING PLAN AND TRUST
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2003 AND 2002
1. DESCRIPTION OF THE PLAN
The following brief description of the Credit Acceptance Corporation (the
"Company") 401(k) Profit Sharing Plan and Trust (the "Plan"), provides
only general information. Participants should refer to the Plan agreement
for a more complete description of the Plan's provisions.
GENERAL -- The Plan is a defined contribution plan available to all
salaried and hourly-rated employees of the Company who have 90 days of
service and are age 21 or older. It is subject to the provisions of the
Employee Retirement Income Security Act of 1974 ("ERISA").
CONTRIBUTIONS -- Participants may contribute up to 20% of their annual
compensation, subject to current Internal Revenue Service ("IRS")
limitations of $12,000 and $11,000 in 2003 and 2002, respectively, and
other limitations based upon the participants' compensation level.
Contributions withheld from an employee's pay on a pretax basis are not
taxable until withdrawn from the Plan by the participant. The Company
makes matching contributions equal to $0.50 for every $1.00 of elective
deferred contributions made by each active participant, not to exceed
$1,250 annually. Prior to January 1, 2004, the Company made matching
contributions equal to $0.25 for every $1.00 of elective deferred
contributions made by each active participant, not to exceed $625
annually. Other contributions made by the Company are at its discretion.
PARTICIPANT ACCOUNTS -- Each participant's account is credited with the
participant's contribution and an allocation of the Company's contribution
and Plan earnings. Allocations are based on participant earnings or
account balances, as defined by the Plan.
VESTING -- Participants are immediately vested in their voluntary
contributions plus actual earnings thereon. Vesting in the Company
contributions portion of their accounts plus earnings thereon is based on
years of continuous service. A participant is 100% vested after six years
of credited service.
LOANS -- Subject to predefined conditions and terms, a participant may
borrow from their fund accounts up to 50% of the participant's vested fund
balance, not to exceed $50,000.
PAYMENT OF BENEFITS -- On termination of service due to death, disability
or retirement, a participant may elect to receive the value of the
participant's vested fund balance in either a lump-sum amount or in
installment payments.
6
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION -- The accompanying financial statements have been
prepared on the accrual basis of accounting.
USE OF ESTIMATES -- The preparation of financial statements in conformity
with accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that affect
the reported amounts of assets available for benefits and the reported
amounts of additions and deductions from assets available for benefits
during the reported period. Actual results could differ from those
estimates. The Plan invests in various securities including U.S.
Government securities, corporate debt instruments and corporate stocks.
Investment securities, in general, are exposed to various risks, such as
interest rate, credit and overall market volatility. Due to the level of
risk associated with certain investment securities, it is reasonably
possible that changes in the values of investment securities will occur in
the near term and that such changes could materially affect the amounts
reported in the statements of assets available for plan benefits.
VALUATION OF INVESTMENTS AND INCOME RECOGNITION -- Investments are
recorded at fair value as determined by the trustee of the Plan using
quoted market prices. Purchases and sales of securities are recorded on a
trade-date basis. Interest income is recorded on the accrual basis.
Dividends are recorded on the ex-dividend date.
PAYMENTS OF BENEFITS -- Benefits are recorded when paid.
EXPENSES -- Plan expenses (other than loan fees) are paid by the Company.
3. INVESTMENTS
ABN Amro Trust Services Company ("ABN") is the Plan trustee. As of
December 31, investments representing 5% or more of the Plan's assets are
as follows:
2003 2002
---------- ----------
ABN Amro S&P 500 Index $ 951,783 $ 635,457
Euro-Pacific Growth Fund 756,168 440,894
ABN Amro Income Plus Fund 740,520 666,990
ABN Amro Balanced Fund 685,361 554,808
Veredus Aggregate Growth Fund 646,804 330,252
Franklin Balance Sheet 523,174 326,896
ABN Amro Growth Fund 306,100 175,735
ABN Amro Bond Fund 275,881 235,902
Other 642,153 168,568
---------- ----------
Total investments $5,527,944 $3,535,502
========== ==========
7
During the year ended December 31, 2003 the Plan's mutual fund investments
(including gains and losses on investments bought and sold, as well as held
during the year) appreciated (depreciated) in value as follows:
ABN Amro S&P 500 Index $ 203,512
Veredus Aggregate Growth Fund 177,069
Euro-Pacific Growth Fund 167,990
Franklin Balance Sheet 114,764
Credit Acceptance Stock Fund 97,103
ABN Amro Balanced Fund 85,243
ABN Amro Growth Fund 49,794
ABN Amro Mid Cap Fund 49,361
ABN Amro Income Plus Fund 31,231
Washington Mutual 29,317
ABN Amro Bond Fund (1,889)
-----------
Net appreciation of investments $ 1,003,495
===========
4. RELATED PARTY TRANSACTIONS
Certain Plan investments are shares of mutual funds managed by ABN Amro
Trust Services Company. ABN Amro Trust Services Company is the trustee as
defined by the Plan and, therefore, these transactions qualify as
party-in-interest transactions. Fees paid by the Plan for investment
management services were included as a reduction of the return earned on
each fund.
5. PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of
Plan termination, participants will become 100% vested in their accounts.
6. TAX STATUS
The Company has adopted a standardized prototype plan sponsored by ABN.
The IRS has issued a favorable opinion letter dated August 30, 2001, in
regards to the ABN prototype plan. The plan administrator believes that
the Plan is currently designed and being operated in compliance with the
applicable requirements of the Internal Revenue Code. As such, no
provision for income taxes has been included in the Plan's financial
statements.
8
7. NONEXEMPT PARTY-IN-INTEREST TRANSACTIONS
The Company remitted the March 2003 participant contributions of $105,223
to the trustee on April 22, 2003, which was later than required by
Department of Labor ("DOL") Regulation 2510.3-102.
The Company remitted the May 2003 participant contributions of $94,771 to
the trustee on July 1, 2003, which was later than required by DOL
Regulation 2510.3-102.
The Company will file Form 5330 with the Internal Revenue Service and pay
the required excise tax on the transactions. In addition, participant
accounts will be credited with the amount of investment income which would
have been earned had the participant contributions been remitted on a
timely basis.
The Company remitted the December 2002 participant contributions of
$73,279 to the trustee on January 28, 2003, which was later than required
by DOL Regulation 2510.3-102. The Company filed Form 5330 with the
Internal Revenue Service and paid the required excise tax on the
transaction. In addition, participant accounts were credited with the
amount of investment income which would have been earned had the
participant contribution been remitted on a timely basis.
******
9
SUPPLEMENTAL SCHEDULES
10
CREDIT ACCEPTANCE CORPORATION
401(K) PROFIT SHARING PLAN AND TRUST
FORM 5500, SCHEDULE H, PART IV, LINE 4i
SCHEDULE OF ASSETS (HELD AT END OF YEAR)
DECEMBER 31, 2003
(c) (e)
(a) (b) DESCRIPTION CURRENT
IDENTITY OF ISSUE OF INVESTMENT VALUE
* ABN Amro Trust Service Company:
* ABN Amro Income Plus Fund Mutual Fund $ 740,520
* ABN Amro Bond Fund Mutual Fund 275,881
* ABN Amro Balance Fund Mutual Fund 685,361
* ABN Amro S&P 500 Index Mutual Fund 951,783
Franklin Balance Sheet Mutual Fund 523,174
* ABN Amro Growth Fund Mutual Fund 306,100
Veredus Aggregate Growth Fund Mutual Fund 646,804
Euro-Pacific Growth Fund Mutual Fund 756,168
Washington Mutual Mutual Fund 202,953
* ABN Amro Mid Cap Fund Mutual Fund 234,177
Liquidity Fund Mutual Fund 94
* Credit Acceptance Stock Trust Stock Trust 204,929
------------
Total investments 5,527,944
* Loans to participants, 7.45% to 11.50% maturing
at various dates not exceeding five years 200,387
------------
TOTAL INVESTMENTS $ 5,728,331
============
* Party-in-interest
11
CREDIT ACCEPTANCE CORPORATION
401(k) PROFIT SHARING PLAN AND TRUST
FORM 5500, SCHEDULE G, QUESTION 4a --
DELINQUENT PARTICIPANT CONTRIBUTIONS
DECEMBER 31, 2003
QUESTION 4a, "DID THE EMPLOYER FAIL TO TRANSMIT TO THE PLAN ANY PARTICIPANT
CONTRIBUTIONS WITHIN THE TIME PERIOD DESCRIBED IN 29 CFR 2510.3-102," WAS
ANSWERED "YES."
RELATIONSHIP TO PLAN,
IDENTITY OF PARTY EMPLOYER OR OTHER
INVOLVED PARTY-IN-INTEREST DESCRIPTION OF TRANSACTIONS AMOUNT
Credit Acceptance Employer/Plan Sponsor Participant contributions for employees $ 73,279
Corporation were not funded within the time period
prescribed by D.O.L. Regulation 2510.3-102.
The December 2002 participant contribution
was deposited on January 28, 2003.
Participant contributions for employees 105,223
were not funded within the time period
prescribed by D.O.L. Regulation 2510.3-102.
The March 2003 participant contribution
was deposited on April 22, 2003.
Participant contributions for employees 94,771
were not funded within the time period
prescribed by D.O.L. Regulation 2510.3-102.
The May 2003 participant contribution
was deposited on July 1, 2003.
12
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees of the Credit Acceptance Corporation 401(k) Profit Sharing Plan and
Trust (or other persons who administer the employee benefit plan) have duly
caused this annual report to be signed on its behalf by the undersigned hereunto
duly authorized.
CREDIT ACCEPTANCE CORPORATION
401(k) PROFIT SHARING PLAN AND TRUST
Date: November 16, 2004 By: /s/ Douglas W. Busk
---------------------------------
Douglas W. Busk
Treasurer
13
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
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23.1 Consent of Deloitte & Touche LLP
14