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, 2005
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
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 1
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits as of December
31, 2005 and 2004 2
Statement of Changes in Net Assets Available for Benefits for
the Year Ended December 31, 2005 3
Notes to Financial Statements 4-6
SUPPLEMENTAL SCHEDULE: 7
Form 5500, Schedule H, Part IV, Line 4i--Schedule of Assets
(Held at End of Year) 8
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 9
EXHIBIT INDEX 10
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To Participants and Administrator of the
Credit Acceptance Corporation 401(k) Profit Sharing Plan and Trust
We have audited the accompanying statements of net assets available for benefits
of the Credit Acceptance Corporation 401(k) Profit Sharing Plan and Trust (the
"Plan") as of December 31, 2005 and 2004, and the related statement of changes
in net assets available for benefits for the year ended December 31, 2005. 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. The Plan is not required to have,
nor were we engaged to perform an audit of its internal control over financial
reporting. Our audit 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, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 2005 and 2004, and the changes in net assets available for benefits
for the year ended December 31, 2005 in conformity with accounting principles
generally accepted in the United States of America.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule, Schedule H,
Part IV, Line 4i-Schedule of Assets (Held at End of Year) is presented for the
purpose of additional analysis and is not a required part of the basic financial
statements but is 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. This supplemental schedule has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
/s/ GRANT THORNTON LLP
Southfield, Michigan
August 22, 2006
CREDIT ACCEPTANCE CORPORATION
401(K) PROFIT SHARING PLAN AND TRUST
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2005 AND 2004
2005 2004
---------- ----------
ASSETS:
Investments--at fair value:
Mutual funds $7,875,605 $6,234,614
Credit Acceptance Stock Fund 460,204 575,575
Participant loans 393,252 301,091
---------- ----------
Total investments 8,729,061 7,111,280
---------- ----------
Receivables:
Employer contributions 15,891 17,032
Participant contributions 134,903 133,319
Other -- 131
---------- ----------
Total receivables 150,794 150,482
---------- ----------
Total assets 8,879,855 7,261,762
---------- ----------
LIABILITIES:
Excess contributions 96,501 59,843
---------- ----------
Total liabilities 96,501 59,843
---------- ----------
NET ASSETS AVAILABLE FOR BENEFITS $8,783,354 $7,201,919
========== ==========
The accompanying notes are an integral part of the financial statements.
CREDIT ACCEPTANCE CORPORATION
401(K) PROFIT SHARING PLAN AND TRUST
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 2005
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Interest and dividends $ 83,235
Net appreciation in fair value of investments 143,004
----------
Total investment income 226,239
----------
Contributions:
Employer 342,992
Participant 1,589,837
----------
Total contributions 1,932,829
----------
Total additions 2,159,068
----------
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits paid to participants 560,447
Administrative expenses 17,186
----------
Total deductions 577,633
----------
Net increase 1,581,435
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 7,201,919
----------
End of year $8,783,354
==========
The accompanying notes are an integral part of the financial statements.
-3-
CREDIT ACCEPTANCE CORPORATION
401(K) PROFIT SHARING PLAN AND TRUST
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2005 AND 2004
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 percent of their annual
compensation, subject to current Internal Revenue Service ("IRS")
limitations of $14,000 and $13,000 in 2005 and 2004, 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. 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 percent 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 percent 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. Benefits requested before December 31, 2005 but paid
subsequent to year end totaled $31,984.
FORFEITED ACCOUNTS--At December 31, 2004 and 2005 forfeited non-vested
accounts totaled $38,150 and $61,694 respectively. These accounts will be
used to reduce future employer contributions.
EXPENSES--Plan expenses (other than investment management and loan fees)
are paid by the Company.
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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.
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.
3. CHANGE IN TRUSTEE
ABN Amro Trust Services Company served as trustee of the Plan until
November 14, 2005. Since that time Principal Trust Company has served as
the Plan's trustee.
4. INVESTMENTS
As of December 31, investments representing 5 percent or more of the Plan's
assets are as follows:
2005 2004
---------- --------
American Funds EuroPacific A $1,193,079 $865,249
ABN Amro S&P 500 Index Fund 1,113,590 900,548
Franklin Balance Sheet Inv A 1,103,336 796,307
ABN Amro Veredus Aggregate Growth N Fund 1,033,554 832,636
ABN Amro Income Plus D Fund 946,474 808,275
ABN Amro Growth N Fund 546,112 429,264
ABN Amro Mid Cap N Fund 530,506 429,182
ABN Amro Balanced N Fund 516,685 485,014
American Funds Washington Mutual A 512,158 365,207
Credit Acceptance Stock Fund 460,204 575,575
During the year ended December 31, 2005 total realized and unrealized
appreciation (depreciation) is as follows:
Mutual funds $ 393,251
Credit Acceptance Stock Fund (250,247)
---------
Net appreciation of investments $ 143,004
=========
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5. RELATED PARTY TRANSACTIONS
Certain Plan investments are shares of mutual funds managed by the trustee;
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. The Credit Acceptance Stock
Fund and participant loans also qualify as party-in-interest.
6. 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 percent vested in their accounts.
7. TAX STATUS
The Company has adopted a standardized prototype plan. The IRS has issued a
favorable opinion letter dated August 30, 2001, in regards to the 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. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for benefits per
the financial statements at December 31, 2004 to Form 5500:
Net assets available for benefits per the financial statements $7,201,919
Excess contributions 59,843
----------
Net assets available for benefits per the Form 5500 $7,261,762
==========
9. RISKS AND UNCERTAINTIES
The Plan invests in various securities including mutual funds and Company
stock. 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 Net Assets Available for
Benefits.
-6-
SUPPLEMENTAL SCHEDULE
-7-
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, 2005
(C) (E)
(B) DESCRIPTION CURRENT
(A) IDENTITY OF ISSUE OF INVESTMENT VALUE
--- ------------------------------- ------------------------------------------------ -----------
Capital Research and Mgmt. Co. American Funds EuroPacific A $ 1,193,079
* ABN Amro Trust Services Company ABN Amro S&P 500 Index Fund 1,113,590
Franklin Advisers, Inc. Franklin Balance Sheet Inv A 1,103,336
* ABN Amro Trust Services Company ABN Amro Veredus Aggregate Growth N Fund 1,033,554
* ABN Amro Trust Services Company ABN Amro Income Plus D Fund 946,474
* ABN Amro Trust Services Company ABN Amro Growth N Fund 546,112
* ABN Amro Trust Services Company ABN Amro Mid Cap N Fund 530,506
* ABN Amro Trust Services Company ABN Amro Balanced N Fund 516,685
Capital Research and Mgmt. Co. American Funds Washington Mutual A 512,158
* Credit Acceptance Corporation Credit Acceptance Stock Fund 460,204
* Participant Loans to participants, 6.00% to 11.50%, maturing
at various dates not exceeding five years 393,252
* ABN Amro Trust Services Company ABN Amro Bond N Fund 380,111
-----------
TOTAL INVESTMENTS $ 8,729,061
===========
* Party-in-interest
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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: August 23, 2006 By: /s/ Douglas W. Busk
------------------------------------
Douglas W. Busk
Treasurer
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EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
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23.1 Consent of Grant Thornton LLP
-10-