SECURITIES AND EXCHANGE COMMISSION
WASHINGTON DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) June 15, 2010
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CONSUMER PORTFOLIO SERVICES, INC.
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(Exact Name of Registrant as Specified in Charter)
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CALIFORNIA
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1-14116
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33-0459135
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(State or Other Jurisdiction
of Incorporation)
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(Commission
File Number)
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(IRS Employer
Identification No.)
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19500 Jamboree Road, Irvine, CA 92612
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(Address of Principal Executive Offices) (Zip Code)
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Registrant's telephone number, including area code (949) 753-6800
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Not Applicable
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(Former name or former address, if changed since last report)
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
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o
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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ITEM 7.01 REGULATION FD DISCLOSURE
We are today making available one presentation consisting of 23 slides. A copy is attached as an exhibit. Although the exhibit is an update of a similar presentation made available on May 8, 2008 (as an exhibit to a current report on Form 8-K), we are not undertaking to update further any of the information that is contained in the attached presentation.
The information furnished in this report shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
Neither financial statements nor pro forma financial information are filed with this report.
One exhibit is attached:
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Exhibit Number
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Description
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99.1
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Company Summary
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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CONSUMER PORTFOLIO SERVICES, INC.
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Dated: June 15, 2010
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By: /s/ Robert E. Riedl
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Robert E. Riedl
Senior Vice President
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EXHIBIT INDEX
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Exhibit Number
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Description
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99.1
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Company Summary.
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Exhibit 99.1
1
Investor Presentation
As of March 31, 2010
2
(1) According to CNW Marketing Research, Inc.
3
m Purchase contracts from dealers across the U.S.
m 10 employee marketing reps in the field and 10 in-house
m Primarily factory franchised dealers
(1) Under the CPS programs for contracts purchased in the first quarter of 2010.
4
m Since inception through March 2010 the Company has
originated $8.7 billion - recently have begun to ramp up after
credit crisis of 2008 and 2009
originated $8.7 billion - recently have begun to ramp up after
credit crisis of 2008 and 2009
5
6
(1) Under the CPS programs for contracts purchased in the first quarter of
2010.
2010.
m CPS’s risk-adjusted pricing results in program offerings
covering a wide band of the credit spectrum
covering a wide band of the credit spectrum
(1) Under the CPS programs for contracts purchased in the first quarter of 2010.
(2) Contract APR as adjusted for fees charged (or paid) to dealer.
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Program (1)
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Avg. Yield (2)
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Avg. Amount
Financed |
Avg. FICO
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% of
Purchases |
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Preferred
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17.2%
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$20,638
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615
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2%
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Super Alpha
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19.3%
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$17,927
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576
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12%
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Alpha Plus
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21.8%
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$16,416
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575
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15%
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Alpha
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25.6%
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$14,647
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561
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42%
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Standard
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29.6%
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$12,817
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559
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9%
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Mercury / Delta
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31.3%
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$11,820
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564
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10%
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First Time Buyer
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30.6%
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$11,509
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572
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10%
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7
8
(1) Under the CPS programs for contracts purchased in the first quarter of 2010.
Contract Originations
m Centralized contract originations at
Irvine HQ
Irvine HQ
§ Maximizes control and efficiencies
m Proprietary auto-decisioning system
§ Makes initial credit decision on over
98% of incoming applications
98% of incoming applications
§ Enhances dealer service by
shortening response time
shortening response time
m Pre-funding verification of
employment, income and residency
employment, income and residency
§ Protects against potential fraud
Servicing
m Geographically dispersed servicing
centers enhance coverage and staffing
flexibility and drive portfolio
performance
centers enhance coverage and staffing
flexibility and drive portfolio
performance
m Early contact on past due accounts;
commencing as early as first day after
due date
commencing as early as first day after
due date
m Early stage workload supplemented by
automated intelligent predictive dialer
automated intelligent predictive dialer
m Workloads allocated based on
specialization and behavioral scorecards,
which enhances efficiencies
specialization and behavioral scorecards,
which enhances efficiencies
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10
m Average LTV and Average PTI ratios have steadily decreased
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m CPS homeowners continue to outperform non-homeowners
m $100 million in funding capacity through two facilities
› Pursuing additional sources of liquidity
m Quarterly “AAA” rated asset-backed securities provided
historical long-term matched funding - $6.4 billion in 48 deals
from 1994 to 2008
historical long-term matched funding - $6.4 billion in 48 deals
from 1994 to 2008
› Last deal completed in April 2008
› Objective is to re-enter term securitization market late 2010 or early 2011
m $199 million whole loan sale (September 2008)
m $50 million residual financing maturity extended to May 2011
(extension closed in May 2010)
(extension closed in May 2010)
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13
m Recent decline is a result of reduced new contract
purchases in 2008 and 2009.
purchases in 2008 and 2009.
m Portfolio delinquencies (31+) look to have peaked
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(1) Three quarter rolling averages.
m Average of quarterly vintage cum. net losses as of March 31, 2010
m 2008 vintage in line with 2003 and 2004 vintages
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m Recovery Rates Correlate to Manheim Index
m Steady Improvement since December 2008
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($ in millions)
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March 31,
2010 |
December 31,
2009
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December 31,
2008
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December 31,
2007
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Assets
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Cash
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$ 22.8
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$ 12.4
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$ 22.1
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$ 20.9
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Restricted Cash
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126.9
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128.5
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153.5
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170.3
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Finance receivables, net of allowance
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738.8
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840.1
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1,339.3
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1,967.9
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Residual interest in securitizations
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4.6
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4.3
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3.6
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2.3
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Deferred tax assets, net
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33.5
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33.5
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52.7
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58.8
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Other Assets
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38.4
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49.5
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67.6
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62.6
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$ 965.0
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$ 1,068.3
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$ 1,638.8
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$ 2,282.8
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Liabilities
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Accounts payable and other liabilities
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$ 19.9
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$ 17.9
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$ 21.7
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$ 18.4
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Warehouse lines of credit
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17.6
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4.9
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9.9
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235.9
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Income taxes payable
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---
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---
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---
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17.7
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Residual interest financing
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52.9
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56.9
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67.3
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70.0
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Securitization trust debt
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796.5
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904.8
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1,404.2
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1,798.3
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Senior secured debt, related party
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26.4
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26.1
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20.1
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---
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Other debt
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22.5
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22.0
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25.7
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28.1
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935.7
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1,032.7
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1,549.0
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2,168.5
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Shareholders’ equity
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29.3
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35.6
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89.8
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114.4
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$ 965.0
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$ 1,638.8
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$ 1,638.8
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$ 2,282.8
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19
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Three Months Ended
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Years Ended
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($ in millions)
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March 31,
2010 |
March 31,
2009 |
December 31,
2009
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December 31,
2008
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December 31,
2007
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Revenues
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Interest income
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$ 39.0
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$ 61.2
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$ 208.2
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$ 351.6
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$ 370.3
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Servicing fees
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2.4
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1.0
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4.6
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2.1
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1.2
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Other income
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3.2
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3.8
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11.1
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14.8
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23.1
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44.6
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66.1
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223.9
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368.4
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394.6
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Expenses
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Employee costs
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8.8
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9.3
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37.3
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48.9
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46.7
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General and administrative
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7.6
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9.1
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32.2
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44.4
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47.4
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Interest
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22.3
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32.1
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111.8
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156.3
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139.2
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Provision for credit losses
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11.7
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16.1
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92.0
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148.4
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137.3
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Loss on sale of receivables
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0.0
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0.0
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0.0
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14.0
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0.0
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50.4
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66.6
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273.3
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411.9
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370.6
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Pretax income (loss)
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(5.8)
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(0.5)
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(49.4)
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(43.5)
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24.0
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Income tax expense (gain)
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---
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---
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---
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(17.4)
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10.1
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Net income (loss)
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$ (5.8)
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$ (0.5)
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$ (49.4)
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$ (26.1)
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$ 13.9
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EPS (loss) (fully diluted)
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$ (0.33)
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$ (0.03)
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$ (3.07)
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$ (1.36)
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$ 0.61
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(1) Interest income less interest expense and provision for credit losses.
(2) Total expenses less provision for credit losses less interest expense, impairment loss on residual asset, and loss on sale of
receivables.
receivables.
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($ in millions)
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Three Months Ended
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Years Ended
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March 31,
2010 |
March 31,
2009 |
December 31,
2009 |
December 31,
2008 |
December 31,
2007 |
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Auto contract purchases
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$17.4
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$1.1
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$296.8
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$296.8
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$1,282.3
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Total managed portfolio
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$1,044.1
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$1,488.4
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$1,664.1
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$1,664.1
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$2,126.2
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Risk-adjusted margin (1)
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$4.9
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$13.0
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$46.9
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$46.9
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$93.8
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Core operating expenses (2)
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$ amount
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$16.3
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$18.3
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$93.2
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$93.2
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$94.1
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% of average managed
portfolio |
6.0%
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4.7%
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4.8%
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4.8%
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4.9%
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Total delinquencies and
repo inventory (30+ days)
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(% of total owned
portfolio) |
5.9%
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6.7%
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8.6%
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8.6%
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6.3%
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Annualized net charge-offs
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(% of average owned
portfolio) |
12.2%
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11.6%
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7.7%
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7.7%
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5.3%
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20
m CPS has weathered two down
cycles to remain one of the few
independent public auto
finance companies
cycles to remain one of the few
independent public auto
finance companies
m Attractive industry
fundamentals as larger
competitors exit industry
fundamentals as larger
competitors exit industry
m Disciplined approach to credit
quality and servicing
quality and servicing
m Credit performance of 2008
and 2009 vintages in line with
2003 and 2004
and 2009 vintages in line with
2003 and 2004
m Operating leverage through
economies of scale
economies of scale
m Opportunistic, successful
acquisitions
acquisitions
m Stable senior management team
with significant equity
ownership
with significant equity
ownership
Ø Senior management,
including vice presidents,
average 15 years of service
with the Company
including vice presidents,
average 15 years of service
with the Company
21
m Any person considering an investment in securities issued by CPS is urged to
review the materials filed by CPS with the U.S. Securities and Exchange
Commission ("Commission"). Such materials may be found by inquiring of the
Commission‘s EDGAR search page
(http://www.sec.gov/edgar/searchedgar/companysearch.html) using CPS's ticker
symbol, which is "CPSS." Risk factors that should be considered are described in
Item 1A, “Risk Factors," of CPS's annual report on Form 10-K, which report is on
file with the Commission and available for review at the Commission's website.
Such description of risk factors is incorporated herein by reference.
review the materials filed by CPS with the U.S. Securities and Exchange
Commission ("Commission"). Such materials may be found by inquiring of the
Commission‘s EDGAR search page
(http://www.sec.gov/edgar/searchedgar/companysearch.html) using CPS's ticker
symbol, which is "CPSS." Risk factors that should be considered are described in
Item 1A, “Risk Factors," of CPS's annual report on Form 10-K, which report is on
file with the Commission and available for review at the Commission's website.
Such description of risk factors is incorporated herein by reference.
22
m Information included in the preceding slides is believed to be accurate, but is not
necessarily complete. Such information should be reviewed in its appropriate
context. The implication that historical trends will continue in the future, or that
past performance is indicative of future results, is disclaimed. To the extent that one
reading the preceding material nevertheless makes such an inference, such inference
would be a forward-looking statement, and would be subject to risks and
uncertainties that could cause actual results to vary. Such risks include variable
economic conditions, adverse portfolio performance (resulting, for example, from
increased defaults by the underlying obligors), volatile wholesale values of
collateral underlying CPS assets, reliance on warehouse financing and on the capital
markets, fluctuating interest rates, increased competition, regulatory changes, the
risk of obligor default inherent sub-prime financing, and exposure to litigation.
necessarily complete. Such information should be reviewed in its appropriate
context. The implication that historical trends will continue in the future, or that
past performance is indicative of future results, is disclaimed. To the extent that one
reading the preceding material nevertheless makes such an inference, such inference
would be a forward-looking statement, and would be subject to risks and
uncertainties that could cause actual results to vary. Such risks include variable
economic conditions, adverse portfolio performance (resulting, for example, from
increased defaults by the underlying obligors), volatile wholesale values of
collateral underlying CPS assets, reliance on warehouse financing and on the capital
markets, fluctuating interest rates, increased competition, regulatory changes, the
risk of obligor default inherent sub-prime financing, and exposure to litigation.
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