Credit Acceptance Corporation

Good day, everyone, and welcome to Credit Acceptance Corporation's second quarter 2022 earnings call. Today's call is being recorded. A webcast and transcript of today's earnings call will be made available on Credit Acceptance website. At this time, I would like to turn the call over to Credit Acceptance Chief Treasurer Officer Doug Busk.

Thank you. Good afternoon and welcome to the Credit Acceptance Corporation's second quarter 2022 earnings call. As you read our news release posted on the investor relations section of our website at ir.creditacceptance.com, and as you listen to this conference call, please recognize that both contain forward-looking statements within the meaning of federal securities law. These forward-looking statements are subject to a number of risks and uncertainties many of which are beyond our control, and which could cause actual results to differ materially from such statements. These risks and uncertainties include those spelled out in the cautionary statement regarding forward-looking information included in the news release. Consider all forward-looking statements in light of those and other risks and uncertainties. Additionally, I should mention that to comply with the SEC's Regulation G, please refer to the financial results section of our news release, which provides tables showing how non-GAAP majors reconcile to GAAP majors. Our GAAP and adjusted results for the quarter include unit and dollar volumes grew 5.1% and 22% respectively as compared to the second quarter of 2021. A decrease in forecasted collection rates for loans originated in 2020 through 2022, which decreased forecasted net cash flows from our loan portfolio by $43 million. Adjusted net income decreased 18% from the second quarter of 2021 to $188 million. Adjusted earnings per share increased 1.5% from the second quarter of 2021 to $13.92. Stack repurchases of approximately 404,000 shares, which represented 3% of the shares outstanding at the beginning of the quarter, and a $12 million expense related to an agreement in principle to settle a previously disclosed class action lawsuit and a $20 million increase in stock-based compensation expense, primarily due to the retirement of our former CEO in May 2021 and the timing of shareholder approval for 2020 and 2021 stock option grants. At this time, Ken Booth, our Chief Executive Officer, Jay Martin, our Senior Vice President, Finance and Accounting, and I will take your questions.

And thank you. As a reminder, to ask a question, you'll need to press star 11 on your telephone. Again, that is star 11 on your telephone. Please stand by while we compile the Q&A roster. And one moment for questions. And our first question comes from Mosey Orenbach from Credit Suisse. Your line is now open.