UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year end December 31, 2002
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
TABLE OF CONTENTS
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS:
Statements of Assets Available for Benefits as of December 31, 2002 and 2001 2
Statement of Changes in Assets Available for Benefits for the Year Ended 3
December 31, 2002
Notes to Financial Statements for the Years Ended December 31, 2002 and 2001 4-6
SUPPLEMENTAL SCHEDULES FOR THE YEAR ENDED DECEMBER 31, 2002:
Schedule H, Line 4i - Schedule of Assets (Held at Year End) 7
Schedule H, Line 4j - Schedule of Reportable Transactions 8
Schedule G, Part III - Schedule of Nonexempt Transactions 9
SIGNATURE 10
INDEPENDENT AUDITORS' REPORT
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, 2002 and 2001 and the related statement of changes in assets
available for benefits for the year ended December 31, 2002. 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 auditing standards generally accepted
in the United States of America. 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 assets available for benefits of the Plan as of December 31, 2002
and 2001 and the changes in assets available for benefits for the year ended
December 31, 2002 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 supplemental schedules of assets
(held at year end), reportable transactions, and nonexempt transactions 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.
Deloitte & Touche
September 23, 2003
CREDIT ACCEPTANCE CORPORATION
401(k) PROFIT SHARING PLAN AND TRUST
STATEMENTS OF ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2002 AND 2001
--------------------------------------------------------------------------------
2002 2001
ASSETS:
Investments, at fair value:
Investments $3,535,502 $3,381,176
Loan account 164,509 100,227
---------- ----------
Total investments 3,700,011 3,481,403
Receivables:
Employer contributions 6,105 4,903
Participants contributions 60,403 50,807
Other 273 664
---------- ----------
Total receivables 66,781 56,374
---------- ----------
ASSETS AVAILABLE FOR BENEFITS $3,766,792 $3,537,777
========== ==========
See notes to financial statements.
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CREDIT ACCEPTANCE CORPORATION
401(k) PROFIT SHARING PLAN AND TRUST
STATEMENT OF CHANGES IN ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 2002
--------------------------------------------------------------------------------
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Interest and dividends $ 40,972
Net depreciation of investments (641,467)
-----------
Net investment loss (600,495)
Contributions:
Employer 123,043
Participants 936,116
Rollovers 32,927
-----------
Total contributions 1,092,086
-----------
Total additions 491,591
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Loan fees paid by participants 3,675
Benefits paid to participants 252,218
Other fees 6,683
-----------
Net increase 229,015
ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 3,537,777
-----------
End of year $ 3,766,792
===========
See notes to financial statements.
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CREDIT ACCEPTANCE CORPORATION
401(k) PROFIT SHARING PLAN AND TRUST
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2002 AND 2001
--------------------------------------------------------------------------------
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. Prior to November 1, 2001, the Plan was
available to employees with one year of service. It is subject to the
provisions of the Employee Retirement Income Security Act of 1974
("ERISA").
CONTRIBUTIONS--Participants may contribute up to 15% of their annual
compensation, subject to current Internal Revenue Service ("IRS")
limitations of $11,000 and $10,500 in 2002 and 2001, 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 $0.25 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.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION--The accompanying financial statements have been
prepared on the accrual basis of accounting.
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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.
CURRENT ACCOUNTING PRONOUNCEMENT--On January 1, 2001, the Plan adopted
Statement of Financial Accounting Standards ("SFAS") Nos. 133 and 138,
Accounting for Derivative Instruments and Hedging Activities, and
Accounting for Derivative Instruments and Certain Hedging Activities--an
amendment of FASB Statement No. 133, respectively, which did not have a
material effect on the Plan's financial statements.
3. INVESTMENTS
Effective October 31, 2001, ABN Amro Trust Services Company ("ABN")
became the Plan trustee, and all of the Plan's investments were
transferred to ABN at that time. Prior to October 31, 2001, LaSalle
National Trust N.A. was the Plan trustee. As of December 31, investments
representing 5% or more of the Plan's assets are as follows:
2002 2001
Stated Principle Value Fund $ - $ 412,919
ABN Amro Income Plus Fund 666,990 -
Chicago Capital Bond Fund 235,902 177,083
Chicago Capital Balanced Fund 554,808 667,297
ABN Amro S&P 500 Index 635,457 708,821
Franklin Balanced Sheet 326,896 256,300
Chicago Capital Growth Fund 175,735 192,603
Veredus Aggregate Growth Fund 330,252 495,035
Euro-Pacific Growth Fund 440,894 457,637
Credit Acceptance Stock Fund 54,193 -
Other 114,375 13,481
---------- ----------
Total investments $3,535,502 $3,381,176
========== ==========
Effective in 2001, employees were provided with an option to invest in a
Company stock fund. The first employee contributions into this fund were
made in December 2001 and were submitted to the Plan in January 2002.
These contributions are included in Plan receivables as of December 31,
2001.
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4. 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.
5. TAX STATUS
The Company has adopted a standardized prototype plan sponsored by ABN.
The IRS has issued a favorable opinion letter 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.
******
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CREDIT ACCEPTANCE CORPORATION
401(k) PROFIT SHARING PLAN AND TRUST
SCHEDULE H, LINE 4i--SCHEDULE OF ASSETS (HELD AT YEAR END)
DECEMBER 31, 2002
--------------------------------------------------------------------------------
(C) (E)
(A) (B) DESCRIPTION CURRENT
IDENTITY OF ISSUE OF INVESTMENT VALUE
* ABN Amro Trust Service Company:
ABN Amro Income Plus Fund Mutual Fund $ 666,990
Chicago Capital Bond Fund Mutual Fund 235,902
Chicago Capital Balanced Fund Mutual Fund 554,808
ABN Amro S&P 500 Index Mutual Fund 635,457
Franklin Balanced Sheets Mutual Fund 326,896
Chicago Capital Growth Fund Mutual Fund 175,735
Veredus Aggregate Growth Fund Mutual Fund 330,252
Euro-Pacific Growth Fund Mutual Fund 440,894
Washington Mutual Mutual Fund 49,061
Chicago Capital Talon Fund Mutual Fund 65,294
Liquidity Fund Mutual Fund 20
Credit Acceptance Stock Trust Stock Trust 54,193
-------------
Total investments 3,535,502
* Loans to participants 7.45% - 11.50% maturing
at various dates not exceeding five years 164,509
-------------
TOTAL INVESTMENTS $ 3,700,011
=============
* Party-in-interest
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CREDIT ACCEPTANCE CORPORATION
401(k) PROFIT SHARING PLAN AND TRUST
SCHEDULE H, LINE 4j--SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 2002
--------------------------------------------------------------------------------
(H)
CURRENT
VALUE OF (I)
(A) (C) (D) (G) ASSET ON NET
IDENTITY OF PARTY (B) PURCHASE SELLING COST OF TRANSACTION (LOSS)
INVOLVED DESCRIPTION OF ASSET PRICE PRICE ASSET DATE GAIN
SINGLE TRANSACTIONS WHICH INDIVIDUALLY EXCEED 5% OF THE VALUE OF THE PLAN ASSETS
AT JANUARY 1, 2002:
ABN Amro ABN Amro Income Plus $ 654,396 $ 654,396 $ -
ABN Amro Safety of Principal Fund $ 654,396 $ 629,408 654,396 24,988
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CREDIT ACCEPTANCE CORPORATION
401(k) PROFIT SHARING PLAN AND TRUST
SCHEDULE G, PART III--SCHEDULE OF NONEXEMPT TRANSACTIONS
YEAR ENDED DECEMBER 31, 2002
--------------------------------------------------------------------------------
RELATIONSHIP TO PLAN,
IDENTITY OF EMPLOYER OR OTHER
PARTY INVOLVED PARTY-IN-INTEREST DESCRIPTION OF TRANSACTION
Credit Acceptance Corporation Plan Sponsor Participant contributions for employees
were not funded by the 15th business
day after the month withheld, as
required by D.O.L. Regulation
2510.3-102.
Various contributions totaling $73,279
from the December 2002 payroll were
deposited into the participant accounts
on January 28, 2003.
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SIGNATURE
The Plan. Pursuant to the requirements of the Securities Exchange Act
of 1934, the trustees (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
By: /s/ Douglas W. Busk
-----------------------
Douglas W. Busk
Chief Financial Officer and Treasurer
January 9, 2004
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