UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

For the quarterly period ended DecemberMarch 31, 20072008

OR

For the transition period from            to            

Commission file number 1-10667

AmeriCredit Corp.

(Exact name of registrant as specified in its charter)

801 Cherry Street, Suite 3900, Fort Worth, Texas 76102

(Address of principal executive offices, including Zip Code)

(817) 302-7000

(Registrant’sRegistrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  x    Accelerated filer  ¨    Non-accelerated filer  ¨    Smaller reporting company  ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes  ¨    No  x

There were 114,599,921115,209,818 shares of common stock, $0.01 par value outstanding as of January 31,April 30, 2008.

AMERICREDIT CORP.

INDEX TO FORM 10-Q

Part I. FINANCIAL INFORMATION

AMERICREDIT CORP.

Consolidated Balance Sheets

(Unaudited, Dollars in Thousands)

The accompanying notes are an integral part of these consolidated financial statements.

AMERICREDIT CORP.

Consolidated Statements of Income and Comprehensive Income

(Unaudited, Dollars in Thousands, Except Per Share Data)

The accompanying notes are an integral part of these consolidated financial statements.

AMERICREDIT CORP.

Consolidated Statements of Cash Flows

(Unaudited, in Thousands)

The accompanying notes are an integral part of these consolidated financial statements.

AMERICREDIT CORP.

Notes to Consolidated Financial Statements

(Unaudited)

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The consolidated financial statements include our accounts and the accounts of our wholly-owned subsidiaries, including certain special purpose financing trusts utilized in securitization transactions (“Trusts”) which are considered variable interest entities. All significant intercompany transactions and accounts have been eliminated in consolidation.

The consolidated financial statements as of DecemberMarch 31, 2007,2008, and for the three and sixnine months ended DecemberMarch 31, 20072008 and 2006,2007, are unaudited, and in management’s opinion include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for such interim periods. Certain prior year amounts have been reclassified to conform to current year presentation. The results for interim periods are not necessarily indicative of results for a full year.

The interim period consolidated financial statements, including the notes thereto, are condensed and do not include all disclosures required by generally accepted accounting principles in the United States of America. These interim period financial statements should be read in conjunction with our consolidated financial statements that are included in our Annual Report on Form 10-K for the year ended June 30, 2007.

Goodwill and Other Intangible Assets

Under the purchase method of accounting, the net assets of entities acquired by us are recorded at their estimated fair value at the date of acquisition. The excess cost of the acquisition over the fair value is recorded as goodwill. Other identifiable intangible assets are amortized either on an accelerated or straight-line basis over their estimated useful lives. Goodwill and other intangible assets are evaluated for impairment on an annual basis or whenever events or changes in circumstances occur. Due to the changes in the economic environment and the decline in our market value, we tested goodwill for impairment during the three months ended December 31, 2007. We determined that goodwill was not impaired at December 31, 2007.

Income Taxes

In July 2006, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation No. 48 (“FIN 48”), “Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement 109.”109”. FIN 48 prescribes a comprehensive model for recognizing, measuring, presenting and disclosing in the financial statements tax positions taken or expected to be taken on a tax return, including a decision whether to file or not to file in a particular

jurisdiction. The transition adjustment recognized on the date of adoption is recorded as an adjustment to retained earnings as of the beginning of the adoption period. We adopted FIN 48 on July 1, 2007. See Note 98 – “Income Taxes” for a discussion of the impact of implementing FIN 48.

Recent Market Developments

We anticipate that a number of factors will continue to adversely impact our liquidity in calendar 2008: higher credit enhancement levels in our securitization transactions driven by bond insurance requirements, reduction in excess spread due to higher cost of funds, and to a lesser extent, the credit deterioration we are experiencing in our portfolio; continued disruptions in the capital markets and weakened demand for securities

guaranteed by insurance policies, making the execution of securitization transactions more challenging and expensive; decreased cash distributions from our securitization Trusts due to weaker credit performance; and the breach of portfolio performance ratios in certain of our securitization Trusts supported by auto receivables originated through our Long Beach Acceptance Corporation (“LBAC”) platform, as well as an amendment to the 2007-2-M securitization transaction to increase the portfolio performance ratios, resulting in higher credit enhancement requirements for those Trusts and a delay in cash distributions to us while those higher credit enhancement levels are built.

As a result of these developments,Since January 2008, we have implemented a revised operating plan in January 2008 in an effort to preserve and strengthen our capital and liquidity position, and to maintain sufficient capacity on our warehouse lines to fund new loan originations until capital market conditions improve for securitization transactions. The plan includes a decrease in targeted origination volume to $5.0 billion to $6.0 billion for calendar 2008. Under this plan, we have increased the minimum credit score requirements for new loan originations, decreased our originations infrastructure by reducing salesclosing and underwriting headcounts as well asconsolidating branch underwriting locations, by approximately one third and selectively decreased the number of dealers from whom we purchase loans.loans and reduced operating and overhead headcounts. We anticipate that we will incurhave discontinued new originations in our direct lending and leasing platforms as well as certain partner relationships. Our target for annualized loan origination levels has been reduced to approximately $3.0 billion. We recognized a restructuring chargescharge of approximately $10$9.1 million overfor the remainder of fiscalthree months ended March 31, 2008, in connectionrelated to reductions which align our infrastructure with this plan.reduced origination targets.

We believe that we have sufficient liquidity and warehouse capacity to operate under our newthis plan through calendar 2008. However, if the asset-backed securities market or the credit markets, in general, continue to deteriorate, or if economic factors further deteriorate resulting in weaker credit performance, we will havemay need to further reduce our targeted origination volume below the range of $5.0$3.0 billion to $6.0 billionlevel to sustain adequate liquidity.

The asset-backed securities market, along with credit markets in general, has been experiencing unprecedented disruptions. Market conditions began deteriorating in mid-2007 and remain impaired in early 2008. While some securitizations backed by prime quality automobile finance receivables were executed by other issuers in January 2008, no securitizations backed by sub-prime quality receivables have been completed in calendar 2008. Further, the prime quality automobile securitizations that were executed in January 2008 utilized senior-subordinated structures, selling only the highest rated securities. Several of the financial guaranty insurers used by us in the past are facing financial stress and rating agency downgrades. As a result, demand for asset-backed securities backed by a financial guarantee insurance policy has weakened and there has been no public issuance of insured automobile asset-backed securities since November 2007. We have not accessed the securitization market with a transaction since October 2007.

Current conditions in the asset-backed securities market include reduced liquidity, increased risk premiums for issuers, reduced investor demand for asset-backed securities, particularly those securities backed by sub-prime collateral, financial stress and rating agency downgrades impacting the financial guaranty insurance providers, and a general tightening of availability of credit. These conditions, which may increase our cost of funding and reduce our access to the asset-backed securities market or other types of receivable financings, may continue or worsen in the future.

There have been some signs of improvement as several prime auto, equipment and credit card securitizations, as well as, one sub-prime auto securitization have been completed. Although the successful completion of these recent securitizations may evidence improving conditions in the asset-backed securities markets, there continues to be uncertainty about effective execution of larger scale sub-prime securitization transactions. We have not accessed the securitization market with a securitization transaction since October 2007.

In April 2008, we entered into a one year, $2 billion forward purchase commitment agreement with Deutsche Bank AG, Cayman Islands Branch (“Deutsche”). Under this agreement and subject to certain terms, Deutsche will purchase triple-A rated asset-backed securities in registered public offerings on our sub-prime AmeriCredit Automobile Receivables Trust (AMCAR) securitization platform. We anticipate using this commitment in connection with securitizations backed by a financial guaranty insurance policy pursuant to an arrangement we have with Financial Security Assurance, Inc. (“FSA”) for $4.5 billion of insurance capacity.

We will continue to require execution of securitization transactions or other types of receivable financingfinancings during fiscalcalendar 2008. There can be no assurance that funding will be available to us through the execution of these types of transactions or, if available, that the funding will be on acceptable terms. If

However, if we are unable to execute thesesecuritization transactions on a regular basis,in connection with the above plans, and are otherwise unable to issue any other debt or equity, we would not have sufficient funds to finance new loan originations and, in such event, we would be required to revise the scale of our business, including possible discontinuationfurther reduction of loan origination activities, which would have a material adverse effect on our ability to achieve our business and financial objectives. For a more complete description of the financing risks that we face, please review the RisksRisk Factors Part I, Item I in our Annual Report on Form 10-K for the year ended June 30, 2007.

Current Accounting Pronouncements

Statement of Financial Accounting Standards No. 141R

In December 2007, the FASB issued Statement of Financial Accounting Standards No. 141R, “Business Combinations” (“SFAS 141R”), which replaces Statement of Financial Accounting Standards No. 141, “Business Combinations.”Combinations”. SFAS 141R establishes principles and requirements for determining how an enterprise recognizes and measures the fair value of certain assets and liabilities acquired in a business combination, including noncontrolling interests, contingent consideration and certain acquired contingencies. SFAS 141R also requires acquisition-related transaction expenses and restructuring costs be expensed as incurred rather than capitalized as a component of the business combination. SFAS 141R will be applicable prospectively to business combinations beginning in our 2010 fiscal year.

Statement of Financial Accounting Standards No. 161

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities,” (“SFAS No. 161”). SFAS No. 161 amends and expands the disclosure requirements of SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities”. SFAS No. 161 requires

qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of gains and losses on derivative instruments and disclosures about credit-risk-related contingent features in derivative agreements. This statement is effective for financial statements issued for fiscal years beginning after November 15, 2008. The adoption of SFAS No. 161 will not affect our financial condition and results of operations, but may require additional disclosures for our derivative and hedging activities.

NOTE 2 – FINANCE RECEIVABLES

Finance receivables consist of the following (in thousands):

Finance receivables securitized represent receivables transferred to our special purpose finance subsidiaries in securitization transactions accounted for as secured financings. Finance receivables unsecuritized include $2,793.1$3,870.0 million and $2,797.4 million pledged under our credit facilities as of DecemberMarch 31, 2008 and June 30, 2007, respectively.

Finance receivables are collateralized by vehicle titles and we have the right to repossess the vehicle in the event the consumer defaults on the payment terms of the contract.

The accrual of finance charge income has been suspended on $781.7$621.0 million and $632.9 million of delinquent finance receivables as of DecemberMarch 31, 2008 and June 30, 2007, respectively.

Finance contracts are generally purchased by us from auto dealers without recourse, and accordingly, the dealer usually has no liability to us if the consumer defaults on the contract. Depending upon the contract structure and consumer credit attributes, we may pay dealers a participation fee or we may charge dealers a non-refundable acquisition fee when purchasing individual finance contracts. We record the amortization of participation fees and the accretion of acquisition fees on loans purchased subsequent to June 30, 2004, to finance charge income using the effective interest method. We recorded acquisition fees on loans purchased prior to July 1, 2004, as nonaccretable fees available to cover losses inherent in the loan portfolio. Additionally, we recordrecorded a discount on finance receivables repurchased upon the exercise of a clean-up call option from our gain on sale securitization transactions and account for such discounts as nonaccretable discounts.

A summary of the nonaccretable acquisition fees is as follows (in thousands):

A summary of the allowance for loan losses is as follows (in thousands):

NOTE 3 – SECURITIZATIONS

A summary of our securitization activity and cash flows from special purpose entities used for securitizations is as follows (in thousands):

As of DecemberMarch 31, 2008 and June 30, 2007, we were servicing $13,300.9$11,716.2 million and $12,899.7 million, respectively, of finance receivables that have been transferred or sold to securitization Trusts.

NOTE 4 – CREDIT FACILITIES

Amounts outstanding under our credit facilities are as follows (in thousands):

Further detail regarding terms and availability of the credit facilities as of DecemberMarch 31, 2007,2008, follows (in thousands):

Generally, our credit facilities are administered by agents on behalf of institutionally managed commercial paper or medium term note conduits. Under these funding agreements, we transfer finance receivables to our special purpose finance subsidiaries. These subsidiaries, in turn, issue notes to the agents, collateralized by such finance receivables and cash. The agents provide funding under the notes to the subsidiaries pursuant to an advance formula, and the subsidiaries forward the funds to us in consideration for the transfer of finance receivables. While these subsidiaries are included in our consolidated financial statements, these subsidiaries are separate legal entities and the finance receivables and other assets held by these subsidiaries are legally owned by these subsidiaries and are not available to

our creditors or our other subsidiaries. Advances under the funding agreements bear interest at commercial paper, LIBOR or prime rates plus specified fees depending upon the source of funds provided by the agents.

We are required to hold certain funds in restricted cash accounts to provide additional collateral for borrowings under the facilities. Additionally, certain funding agreements contain various covenants requiring minimum financial ratios, asset quality and portfolio performance ratios (portfolio net loss and delinquency ratios, and pool level cumulative net loss ratios) as well as limits on deferment levels. Failure to meet any of these covenants could result in an event of default under these agreements. If an event of default occurs under these agreements, the lenders could elect to declare all amounts outstanding under these agreements to be immediately due and payable, enforce their interests against collateral pledged under these agreements or restrict our ability to obtain additional borrowings under these agreements. As of DecemberMarch 31, 2007,2008, we were in compliance with all covenants in our credit facilities.

Subsequent to March 31, 2008, we amended our prime/near-prime facility to address a potential portfolio performance ratio violation in the facility related to credit losses in our Bay View and Long Beach portfolios. The amendment reduced the size of the facility to $1,120.0 million from $1,500.0 million.

Debt issuance costs are being amortized to interest expense over the expected term of the credit facilities. Unamortized costs of $5.8$5.2 million and $6.5 million as of DecemberMarch 31, 2008 and June 30, 2007, respectively, are included in other assets on the consolidated balance sheets.

NOTE 5 – SECURITIZATION NOTES PAYABLE

Securitization notes payable represents debt issued by us in securitization transactions accounted for as secured financings. Debt issuance costs are being amortized over the expected term of the securitizations; accordingly, unamortized costs of $24.8$20.4 million and $23.6 million as of DecemberMarch 31, 2008 and June 30, 2007, respectively, are included in other assets on the consolidated balance sheets.

Securitization notes payable as of DecemberMarch 31, 2007,2008, consists of the following (dollars in thousands):

At the time of securitization of finance receivables, we are required to pledge assets equal to a specified percentage of the securitization pool to support the securitization transaction. Typically, the assets pledged consist of cash deposited to a restricted account and additional receivables delivered to the Trust, which create overcollateralization. The securitization transactions require the percentage of assets pledged to support the transaction to increase until a specified level is attained. Excess cash flows generated by the Trusts are added to the restricted cash account or used to pay down outstanding debt in the Trusts, creating overcollateralization until the targeted percentage level of assets has been reached. Once the targeted percentage level of assets is reached and maintained, excess cash flows generated by the Trusts are released to us as distributions from Trusts. Additionally, as the balance of the securitization pool declines, the amount of pledged assets needed to maintain the required percentage level is reduced. Assets in excess of the required percentage are also released to us as distributions from Trusts.

Several of the financial guaranty insurers used by us in the past are facing financial stress and rating agency downgrades due to risk exposures on insurance policies that guarantee mortgage debt and related structured products. As a result, demand for securities guaranteed by insurance, particularly securities backed by sub-prime collateral, has generally weakened. One of the insurers we have used, Financial Security Assurance, Inc. (“FSA”),FSA, has been able to maintain its capital position and “AAA”triple-A rating. We have an offer of capacity from FSA for $4,500.0 million for our sub-prime securitizations throughout calendar year 2008. Under this arrangement, which is not a commitment, prior to issuing an insurance policy, FSA will evaluate each securitization we propose to execute on a transaction by transaction basis as to timing, collateral composition, size, market conditions and other factors. While we believe that FSA will issue insurance policies to guarantee the securities issued in these securitizations to investors and that such policies will be accepted by investors and enhance the execution of our securitization transactions, we can provide no assurance on any of these matters.

Credit enhancement requirements in our sub-prime securitization structures will increase in calendar 2008 driven by bond insurers’insurance requirements, a reduction in excess spread due to higher cost of funds, and to a lesser extent, the credit deterioration we are experiencing in our portfolio. Historically, the level of credit enhancement required by the bond insurers in our securitization transactions would support a “shadow rating” to the bond insurer, or attachment point, of “BBB.”triple-B. The insurance policy provided by the bond insurer then allows for the actual rating on the securitization notes to be “AAA.”triple-A. The attachment point also determines the amount of capital the bond insurer is charged. As part of the offer of capacity fromour arrangement with FSA, FSA will require us to increase the amount of credit enhancement we provide in a transaction to increase the attachment point to a rating of “A-.”single-A-minus. With these changes, we expect enhancement levels on our securitization transactions to increase to an initial and target credit enhancement level in the mid-teens percentage with a target enhancement levellevels in the low 20% range. This increase in enhancement levels will adversely impact our liquidity position.

With respect to our securitization transactions covered by a financial guaranty insurance policy, including transactions covered by FSA policies, agreements with the bond insurers provide that if portfolio performance ratios (delinquency, cumulative default or cumulative net loss) in a Trust’s pool of receivables exceed certain targets, the specified credit enhancement levels would be increased.

The securitization transactions insured by some of our financial guaranty insurance providers are cross-collateralized to a limited extent. In the event of a shortfall in the original target credit enhancement requirement for any of these securitization Trusts after a certain period of time, excess cash flows from other transactions insured by the same insurance provider would be used to satisfy the shortfall amount.

As of DecemberMarch 31, 2007,2008, three LBAC securitizations (LB 2006-A, LB 2006-B(LB2006-A, LB2006-B and LB 2007-A)LB2007-A) insured by FSA had delinquency ratios in excess of the targeted levels. As part of the arrangement with FSA described above, the excess cash flows from our other FSA-insuredFSA insured securitizations are being used to fund higher credit enhancement requirements in the LBAC Trusts which exceeded the portfolio performance ratios. As of March 31, 2008, cash otherwise distributable to us of $24 million has been used to build higher credit enhancement in these three LBAC Trusts. An additional $17 million of excess cash will be needed to fund the higher credit enhancement levels. We anticipate that we will reach these requirements in May 2008. Additionally, two other LBAC securitizations (LB2005-A and LB2005-B) insured by FSA had delinquency ratios in excess of targeted levels as of March 31, 2008. Excess cash flows from these LBAC securitizations are being used to build higher credit enhancement levels in the respective Trusts that breached the portfolio performance ratios, instead of being distributed to us.

During the March 2008 quarter, we entered into an agreement with MBIA, Inc. (“MBIA”) to increase the portfolio performance ratios in the 2007-2-M securitization insured by MBIA. In return for higher portfolio performance ratios, we agreed to use excess cash flow from other MBIA insured securitizations to fund the higher credit enhancement requirement for the 2007-2-M Trust. We anticipate that it will take four to sixapproximately three months to build the credit enhancement up to the new target requirement and $34 million otherwise distributable to us will likely delay $40be used to $50 million of cash distributions we had expected to receive during that time frame.fund the higher credit enhancement requirements in this securitization transaction.

Agreements with all of our financial guaranty insurance providers contain additional specified target portfolio performance ratios that are higher than the levels previously described. If, at any measurement date, the targeted portfolio performance ratios with respect to any insured Trust were to exceed these higher levels, provisions of the agreements permit our financial guaranty insurance providers to terminate our servicing rights to the receivables sold to that Trust.

NOTE 6 – DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES

As of DecemberMarch 31, 2008 and June 30, 2007, we had interest rate swap agreements with underlying notional amounts of $3,594.3$3,344.8 million and $2,355.1 million, respectively. The fair value of our interest rate swap agreements of $68.4$131.5 million as of DecemberMarch 31, 2007,2008, is included in other liabilities on the consolidated balance sheets. The fair value of our interest rate swap agreements of $14.9 million as of June 30, 2007, is included in other assets on

the consolidated balance sheets. Interest rate swap agreements designated as hedges had unrealized losses of $67.9$129.1 million and unrealized gains of $14.2 million included in accumulated other comprehensive income as of DecemberMarch 31, 2008 and June 30, 2007, respectively. The ineffectiveness related to the interest rate swap agreements designated as hedges was not material for the three and sixnine month periods ended DecemberMarch 31, 20072008 and 2006.2007. We estimate approximately $64.8$74.0 million of unrealized losses included in other comprehensive income will be reclassified into earnings within the next twelve months.

As of DecemberMarch 31, 2008 and June 30, 2007, we had interest rate cap agreements with underlying notional amounts of $4,963.7$3,088.7 million and $4,323.7 million, respectively. The fair value of our interest rate cap agreements purchased by our special purpose finance subsidiaries of $10.4$8.6 million and $13.4 million as of DecemberMarch 31, 2008 and June 30, 2007, respectively, are included in other assets on the consolidated balance sheets. The fair value of our interest rate cap agreements sold by us of $10.4$8.6 million and $13.4 million as of DecemberMarch 31, 2008 and June 30, 2007, respectively, are included in other liabilities on the consolidated balance sheets.

Under the terms of our derivative financial instruments, we are required to pledge certain funds to be held in restricted cash accounts as collateral for the outstanding derivative transactions. As of DecemberMarch 31, 2008 and June 30, 2007, these restricted cash accounts totaled $19.2$26.8 million and $10.2 million, respectively, and are included in other assets on the consolidated balance sheets.

NOTE 7 – COMMITMENTS AND CONTINGENCIES

Guarantees of Indebtedness

The payments of principal and interest on our senior notes and convertible senior notes are guaranteed by certain of our subsidiaries. The carrying value of the senior notes and convertible senior notes was $950.0 million as of DecemberMarch 31, 2008 and June 30, 2007. See guarantor consolidating financial statements in Note 13.

Legal Proceedings

As a consumer finance company, we are subject to various consumer claims and litigation seeking damages and statutory penalties, based upon, among other things, usury, disclosure inaccuracies, wrongful repossession, violations of bankruptcy stay provisions, certificate of title disputes, fraud, breach of contract and discriminatory treatment of credit applicants. Some litigation against us could take the form of class action complaints by consumers and/or shareholders. As the assignee of finance contracts originated by dealers, we may also be named as a co-defendant in lawsuits filed by consumers principally against dealers. The damages and penalties claimed by consumers in these types of matters can be substantial. The relief requested by the plaintiffs varies but can include requests for compensatory, statutory and punitive damages. We believe that we have taken prudent steps to address and mitigate

the litigation risks associated with our business activities. In the opinion of management, the ultimate aggregate liability, if any, arising out of any such pending or threatened litigation will not be material to our consolidated financial position or our results of operations.

NOTE 8 – COMMON STOCK AND WARRANTS

The following summarizes share repurchase activity:

As of January 31, 2008, we had repurchased $1,374.8 million of our common stock since April 2004 and we had remaining authorization to repurchase $172.0 million of our common stock. A covenant in our senior note indenture entered into in June 2007 limits our ability to repurchase stock. As of January 31, 2008, we have approximately $36 million available for share repurchases under the covenant limits although we have no current plans to continue repurchase activity.

In October 2007, 5.0 million treasury shares were cancelled and were restored to the status of authorized but unissued shares. Our outstanding common stock was not impacted by this action.

In September 2002, we issued five-year warrants to purchase 1,287,691 shares of our common stock at $9.00 per share. In April 2005, 39,695 warrants were exercised, which resulted in a net settlement of 24,431 shares of our common stock. In July 2006, we repurchased 17,687 shares of these warrants for approximately $334,000. In September 2007, 1,185,225 warrants were exercised, which resulted in a net settlement of 1,065,047 shares of our common stock for approximately $8.6 million. The remaining outstanding warrants expired unexercised.

NOTE 9 – INCOME TAXES

We adopted the provisions of FIN 48 on July 1, 2007. The adoption of FIN 48 resulted in a decrease to retained earnings of $0.5 million, an increase in deferred income taxes of $53.1 million and an increase to accrued taxes and expenses of $53.6 million.

Upon implementation of FIN 48 on July 1, 2007, unrecognized tax benefits were $42.3 million. The amount, if recognized, that would affect the effective tax rate was $17.7 million and includes the federal benefit of state taxes. As of DecemberMarch 31, 2007,2008, the amount of gross unrecognized tax benefits and the amount that would affect the effective income tax rate in future periods is $53.7$52.1 million and $20.6$20.2 million, respectively. It is reasonably possible that the amount of unrecognized tax benefits will change during the next twelve months. However, we do not expect any changes to have a material impact on our results of operations or our financial position.

We recognize accrued interest and penalties associated with uncertain tax positions as part of the income tax provision. As of July 1, 2007, accrued interest and penalties associated with uncertain tax positions were $5.6 million and $6.9 million, respectively. For the sixnine months ended DecemberMarch 31, 2007,2008, we had a reductionan increase of $0.1$0.6 million in accrued potential interest associated with uncertain tax positions. For the sixnine months ended DecemberMarch 31, 2007,2008, we had an increase of $0.4 million in accrued potential penalties associated with uncertain tax positions.

We file income tax returns in the U.S. federal jurisdiction, and various state, local, and foreign jurisdictions. Our U.S. federal income tax returns subsequent to fiscal year 2005 remain subject to examination by the Internal Revenue Service (“IRS”). The IRS completed its examination of our fiscal years 2004 and 2005 consolidated federal income tax returns in the second quarter of fiscal year 2007. The returns for those years will be subject to an appeals proceeding, which we anticipate will be concluded by the end of calendarfiscal year 2008.2009. We expect the outcome of the appeals proceeding will not result in a material change to our financial position or results of operations. Foreign and U.S. state jurisdictions have statutes of limitations that generally range from 3 to 5 years. Our tax returns are currently under examination in various U.S. state and foreign jurisdictions.

Our effective income tax rate was 34.3%37.6% and 36.7%19.9% for the three months ended DecemberMarch 31, 2008 and 2007, respectively. The rate for the three months ended March 31, 2007 and 2006, respectively. reflects a favorable resolution of prior contingent liabilities.

Our effective income tax rate was 25.4%31.7% and 36.8%31.3% for the sixnine months ended DecemberMarch 31, 2008 and 2007, and 2006, respectively. The decrease in the rate for the six months ended December 31, 2007, is primarily a result of revised estimates of our deferred tax assets and liabilities relating to state income tax rates and the exercise of warrants issued in September 2002.

NOTE 109 – RESTRUCTURING CHARGES

We recognized restructuring charges of $9.1 million during the three months ended March 31, 2008, which included $8.7 million in personnel related costs and $0.4 million of contract termination costs related to reorganizing our originations structure.

As of DecemberMarch 31, 2007,2008, total costs incurred to date related to our restructuring activities in prior years include $22.3$31.0 million in personnel-related costs and $69.4$69.8 million of contract termination and other associated costs.

A summary of the liabilities, which are included in accrued taxes and expenses on the consolidated balance sheets, for restructuring charges for the sixnine months ended DecemberMarch 31, 2007,2008, is as follows (in thousands):

NOTE 1110 – EARNINGS PER SHARE

A reconciliation of weighted average shares used to compute basic and diluted earnings per share is as follows (dollars in thousands, except per share data):

Basic (loss) earnings per share have been computed by dividing net income (loss) by weighted average shares outstanding.

Diluted loss per share has been computed by dividing net loss by the weighted average shares assuming no incremental shares. Diluted earnings per share have been computed by dividing net income, adjusted for interest expense (net of related tax effects) related to our convertible senior notes issued in November 2003, by the diluted weighted average shares and assumed incremental shares. The treasury stock method was used to compute the assumed incremental shares related to our outstanding stock-based compensation and warrants and will be used to compute the assumed incremental shares related to our convertible senior notes issued in September 2006 once the average market price of the common shares exceeds the conversion price. The average common stock market prices for the periods were used to determine the number of incremental shares. Options to purchase approximately 1.83.0 million and 2.8 million shares of common stock for the sixthree and nine months ended DecemberMarch 31, 2007,2008 respectively, and 0.7 million shares of common stock for the three and sixnine months ended DecemberMarch 31, 2006,2007, were not included in the computation of diluted earnings per share because the option exercise price was greater than the average market price of the common shares. Warrants to purchase approximately 30.0 million shares of common stock for the sixthree and nine months ended DecemberMarch 31, 20072008 and 2006,2007, were not included in the computation of diluted earnings per share because the exercise price was greater than the average market price of the common shares.

The if-converted method was used to calculate the impact of our convertible senior notes issued in November 2003 on assumed incremental shares.

NOTE 1211 – SUPPLEMENTAL CASH FLOW INFORMATION

Cash payments for interest costs and income taxes consist of the following (in thousands):

NOTE 12 – SUBSEQUENT EVENTS

We entered into a forward purchase agreement with Deutsche whereby they will purchase, at specified spread levels that we consider to generally represent primary issuance market pricing, up to $2 billion of triple-A rated AMCAR securitization notes that we issue over a twelve month period. In exchange for this commitment, we paid $20 million in upfront commitment fees and granted Deutsche a warrant to purchase 7.5 million shares of common stock with an exercise price of $12.01 per share.

NOTE 13 – GUARANTOR CONSOLIDATING FINANCIAL STATEMENTS

The payment of principal and interest on our senior notes and convertible senior notes are guaranteed by certain of our subsidiaries (the “Subsidiary Guarantors”). The separate financial statements of the Subsidiary Guarantors are not included herein because the Subsidiary Guarantors are our wholly-owned consolidated subsidiaries and are jointly, severally, fully and unconditionally liable for the obligations represented by the convertible senior notes. We believe that the consolidating financial information for AmeriCredit Corp., the combined Subsidiary Guarantors and the combined Non-Guarantor Subsidiaries provide information that is more meaningful in understanding the financial position of the Subsidiary Guarantors than separate financial statements of the Subsidiary Guarantors.

The consolidating financial statements present consolidating financial data for (i) AmeriCredit Corp. (on a parent only basis), (ii) the combined Subsidiary Guarantors, (iii) the combined Non-Guarantor Subsidiaries, (iv) an elimination column for adjustments to arrive at the information for the parent company and our subsidiaries on a consolidated basis and (v) the parent company and our subsidiaries on a consolidated basis.

Investments in subsidiaries are accounted for by the parent company using the equity method for purposes of this presentation. Results of operations of subsidiaries are therefore reflected in the parent company’s investment accounts and earnings. The principal elimination entries set forth below eliminate investments in subsidiaries and intercompany balances and transactions.

AmeriCredit Corp.

Consolidating Balance Sheet

DecemberMarch 31, 20072008

(Unaudited, in Thousands)