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, 2004
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, 2004 and 2003 4
Statement of Changes in Assets Available for Benefits for the Year Ended December 31, 2004 5
Notes to Financial Statements 6-9
SUPPLEMENTAL SCHEDULES: 10
Form 5500, Schedule H, Part IV, Line 4i -- Schedule of Assets (Held at End of Year) as of
December 31, 2004 11
Form 5500, Schedule H, Question 4a -- Delinquent Participant Contributions for the
Year Ended December 31, 2004 12
NOTE: 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
To the Plan Administrator of
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, 2004 and 2003, and the related statement of changes in assets
available for benefits for the year ended December 31, 2004. 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 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. The Plan is not required to have,
nor were we engaged to perform, an audit of its internal control over financial
reporting. Our audits included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Plan's internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, 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 assets available for benefits of the Plan as of December 31, 2004
and 2003, and the changes in assets available for benefits for the year ended
December 31, 2004, 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 (1) assets (held at end of year) as of December 31, 2004, and (2) delinquent
participant contributions for the year ended December 31, 2004, 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 2004 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
July 12, 2005
3
CREDIT ACCEPTANCE CORPORATION
401(k) PROFIT SHARING PLAN AND TRUST
STATEMENTS OF ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2004 AND 2003
2004 2003
ASSETS:
Investments--at fair value:
Investments $ 6,810,189 $5,527,944
Participant loans 301,091 200,387
----------- ----------
Total investments 7,111,280 5,728,331
----------- ----------
Receivables:
Employer contributions 17,032 5,118
Participants contributions 133,319 84,202
Other 131 (265)
----------- ----------
Total receivables 150,482 89,055
----------- ----------
ASSETS AVAILABLE FOR BENEFITS $ 7,261,762 $5,817,386
=========== ==========
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, 2004
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Interest and dividends $ 115,620
Net appreciation of investments 803,572
-----------
Net investment income 919,192
-----------
Contributions:
Employer 299,537
Participants 1,427,616
Rollovers 29,774
-----------
Total contributions 1,756,927
-----------
Total additions 2,676,119
-----------
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Loan fees 6,450
Benefits paid to participants 1,216,478
Other fees 8,815
-----------
Total deductions 1,231,743
-----------
Net increase 1,444,376
ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 5,817,386
-----------
End of year $ 7,261,762
===========
See notes to financial statements.
5
CREDIT ACCEPTANCE CORPORATION
401(k) PROFIT SHARING PLAN AND TRUST
NOTES TO FINANCIAL STATEMENTS
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 $13,000 and $12,000 in 2004 and 2003, 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.
FORFEITURES -- In the event a participant's employment at the Company is
terminated and the participant is not vested in the Company's matching
contributions and resulting earnings, that portion is forfeited upon
distribution of the vested portion. Forfeited amounts are used to reduce
future employer contributions. Forfeitures amounted to $14,403 during the
year ended December 31, 2004.
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 -- Certain Plan expenses 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
available for benefits are as follows:
2004 2003
ABN AMRO S&P 500 Index $ 900,548 $ 951,783
Euro-Pacific Growth Fund 865,249 756,168
Veredus Aggregate Growth Fund 832,636 646,804
ABN AMRO Income Plus Fund 808,275 740,520
Franklin Balance Sheet 796,307 523,174
ABN AMRO Balanced Fund 485,014 685,361
Credit Acceptance Stock Trust 575,575 204,929
ABN AMRO Growth Fund 429,264 306,100
ABN AMRO Mid Cap Fund 429,182 234,177
Washington Mutual 365,207 202,953
ABN AMRO Bond Fund 322,739 275,881
Other 193 94
----------- -----------
Total investments $ 6,810,189 $ 5,527,944
=========== ===========
7
During the year ended December 31, 2004, 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 $ 86,502
Veredus Aggregate Growth Fund 138,006
Euro-Pacific Growth Fund 120,374
Franklin Balance Sheet 134,321
Credit Acceptance Stock Fund 217,654
ABN AMRO Balanced Fund (11,534)
ABN AMRO Growth Fund 23,017
ABN AMRO Mid Cap Fund 46,313
ABN AMRO Income Plus Fund 28,343
Washington Mutual 21,305
ABN AMRO Bond Fund (729)
---------
Net appreciation of investments $ 803,572
=========
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 form of 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 certain participant catch-up contributions from
multiple periods in 2004 totaling $7,363 to the trustee on March 11, 2005,
which was later than required by Department of Labor ("DOL") Regulation
2510.3-102.
The Company filed Form 5330 with the IRS and paid the required excise tax
on the transactions. In addition, participant accounts were credited with
the amount of investment income which would have been earned had the
participant contributions 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, 2004
(c) (e)
(a) (b) DESCRIPTION CURRENT
IDENTITY OF ISSUE OF INVESTMENT VALUE
* ABN AMRO Trust Services Company:
* ABN AMRO Income Plus Fund Mutual Fund $ 808,275
* ABN AMRO Bond Fund Mutual Fund 322,739
* ABN AMRO Balance Fund Mutual Fund 485,014
* ABN AMRO S&P 500 Index Mutual Fund 900,548
Franklin Balance Sheet Mutual Fund 796,307
* ABN AMRO Growth Fund Mutual Fund 429,264
Veredus Aggregate Growth Fund Mutual Fund 832,636
Euro-Pacific Growth Fund Mutual Fund 865,249
Washington Mutual Mutual Fund 365,207
* ABN AMRO Mid Cap Fund Mutual Fund 429,182
Liquidity Fund Mutual Fund 193
* Credit Acceptance Stock Trust Stock Trust 575,575
-------------
Total investments 6,810,189
* Loans to participants, 6.00% to 11.50% maturing
at various dates not exceeding five years 301,091
-------------
TOTAL INVESTMENTS $ 7,111,280
=============
* Party-in-interest
11
CREDIT ACCEPTANCE CORPORATION
401(k) PROFIT SHARING PLAN AND TRUST
FORM 5500, SCHEDULE H, QUESTION 4a --
DELINQUENT PARTICIPANT CONTRIBUTIONS
YEAR ENDED DECEMBER 31, 2004
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 TRANSACTION AMOUNT
Credit Acceptance Employer/Plan Sponsor Participant contributions for employees were not $7,363
Corporation funded within the time period prescribed by
DOL Regulation 2510.3-102. A small portion of
participant contributions from multiple periods
in 2004 were deposited on March 11, 2005.
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: July 14, 2005 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