##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-Q
 
 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2008
 Commission file number: 333-126538
 
 TRIAD FINANCIAL CORPORATION
 (Exact name of registrant as specified in its charter)
 
 California
    
    33-0356705(State of Incorporation)
    
    (IRS Employer Identification No)7711 Center Avenue, Suite 200Huntington Beach, California
    
    92647(Address of principal executive offices)
    
    (Zip Code)
 (714) 373-8300  (Registrants telephone number, including area code)
 
 Securities registered pursuant to Section 12(b) of the Act: None
 Securities registered pursuant to Section 12(g) of the Act: None
 o þ
 o þ
 þ o
 þ
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
(Do not check if a smaller reporting company)
    
    Smaller reporting company o
 o þ




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##### 



TRIAD FINANCIAL CORPORATION
INDEX TO FORM 10-Q
  
 PagePART I
    
    FINANCIAL INFORMATIONITEM 1.
    
    FINANCIAL STATEMENTSCONSOLIDATED BALANCE SHEETS
    
    
    2CONSOLIDATED STATEMENTS OF INCOME
    
    
    3CONSOLIDATED STATEMENTS OF CASH FLOWS
    
    
    4NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    
    
    5ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    
    
    21ITEM 3.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    35ITEM 4.
    
    CONTROLS AND PROCEDURES
    
    
    36PART II
    
    OTHER INFORMATIONITEM 1.
    
    LEGAL PROCEEDINGS
    
    
    37ITEM 1A.
    
    RISK FACTORS
    
    
    37ITEM 2.
    
    UNREGISTERED SALES OF EQUITY SECUITIES AND USE OF PROCEEDS
    
    
    37ITEM 3.
    
    DEFAULTS UPON SENIOR SECURITIES
    
    
    37ITEM 4.
    
    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    37ITEM 5.
    
    OTHER INFORMATION
    
    
    37ITEM 6.
    
    EXHIBITS
    
    
    38SIGNATURES
    
    
    40EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32
  ii




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Forward-Looking Statements
  
    
    our ability to make payments of principal and interest on, or refinance, our substantial
indebtedness;
    
    our reliance on our warehouse and residual facilities, securitization program and
credit enhancement arrangements;
    
    our ability to generate significant amounts of cash to service our debt and fund our
operations;
    
    loss of contractual servicing rights;
    
    general economic and business conditions, including wholesale auction values and interest
rates;
    
    our exposure to the risk of increases in defaults and prepayments of contracts
purchased and held by us prior to their securitization and the subsequent performance of
receivables held in securitization trusts;
    
    changes in the delinquency, default and loss rates on the receivables included in each
securitization trust;
    
    failure to implement our business strategy;
    
    the high degree of risk associated with non-prime borrowers;
    
    our ability to successfully compete in our industry; and
    
    our ability to maintain the material licenses and permits required for our operations.
  1




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Part I. FINANCIAL INFORMATION
 
 Item 1. FINANCIAL STATEMENTS
 TRIAD FINANCIAL CORPORATION
 
 Consolidated Balance Sheets
 March 31, 2008
    
    
    December 31, 2007(Dollars in thousands)(Unaudited)ASSETSCash and cash equivalents
    
    $
    58,045
    
    
    $
    52,505Cash  restricted
    
    
    314,653
    
    
    
    295,786Finance receivables held for investment, net
    
    
    3,357,112
    
    
    
    3,514,979Retained interest in securitized assets, net
    
    
    10,964
    
    
    
    10,916Accounts receivable, net
    
    
    41,252
    
    
    
    46,965Fixed assets, net of accumulated depreciation of $25,095 in 2008 and $23,235 in 2007
    
    
    14,533
    
    
    
    15,222Collateral held for resale, net
    
    
    23,637
    
    
    
    29,383Capitalized financing costs, net of accumulated amortization of $15,344 in 2008 and $13,369 in 2007
    
    
    10,316
    
    
    
    11,532Deferred tax asset, net
    
    
    81,893
    
    
    
    89,028Goodwill
    
    
    30,446
    
    
    
    30,446Taxes receivable
    
    
    16,075
    
    
    
    8,054Other assets
    
    
    3,193
    
    
    
    2,736Total assets
    
    $
    3,962,119
    
    
    $
    4,107,552LIABILITIES AND STOCKHOLDERS EQUITYLiabilitiesRevolving credit facilities
    
    $
    551,306
    
    
    $
    334,390Securitization notes payable
    
    
    2,821,315
    
    
    
    3,195,489Senior notes payable
    
    
    149,280
    
    
    
    149,256Other liabilities
    
    
    82,771
    
    
    
    71,826Total liabilities
    
    
    3,604,672
    
    
    
    3,750,961Commitments and contingencies (Note 12)Stockholders EquityCommon stock, no par value; authorized 9,069 shares; issued and outstanding 9,069 shares at March 31, 2008 and December 31, 2007
    
    
    
    
    
    
    Additional paid in capital
    
    
    345,000
    
    
    
    345,000Retained earnings
    
    
    10,619
    
    
    
    9,690Accumulated other comprehensive income
    
    
    1,828
    
    
    
    1,901Total stockholders equity
    
    
    357,447
    
    
    
    356,591Total liabilities and stockholders equity
    
    $
    3,962,119
    
    
    $
    4,107,552
  2




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TRIAD FINANCIAL CORPORATION
 
 Consolidated Statements of Income
 Three Months
    
    
    Three MonthsEnded
    
    
    EndedMarch 31, 2008
    
    
    March 31, 2007(Dollars in thousands)(Unaudited)Financing and other interest income
    
    $
    142,069
    
    
    $
    161,530Interest expense
    
    
    50,072
    
    
    
    54,863Net interest margin
    
    
    91,997
    
    
    
    106,667Provision for credit losses
    
    
    46,578
    
    
    
    62,630Net interest margin after provision for credit losses
    
    
    45,419
    
    
    
    44,037Servicing income
    
    
    702
    
    
    
    2,977Other income (expense)
    
    
    (10,361
    )
    
    
    2,659Total other revenues (expenses)
    
    
    (9,659
    )
    
    
    5,636Operating expenses:Compensation and employee benefits
    
    
    21,550
    
    
    
    20,752Occupancy and equipment
    
    
    3,665
    
    
    
    4,142Systems and data processing
    
    
    3,294
    
    
    
    3,337Professional services
    
    
    1,918
    
    
    
    1,534Telecommunications
    
    
    872
    
    
    
    946Advertising
    
    
    932
    
    
    
    779Other
    
    
    2,431
    
    
    
    3,480Total operating expenses
    
    
    34,662
    
    
    
    34,970Income before income taxes
    
    
    1,098
    
    
    
    14,703Provision for income taxes
    
    
    (169
    )
    
    
    (5,769
    )Net income
    
    $
    929
    
    
    $
    8,934
  3




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TRIAD FINANCIAL CORPORATION
 
 Consolidated Statements of Cash Flows
 Three Months Ended
    
    
    Three Months EndedMarch 31, 2008
    
    
    March 31, 2007(Dollars in thousands)(Unaudited)Cash flows from operating activitiesNet income
    
    $
    929
    
    
    $
    8,934Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization
    
    
    5,947
    
    
    
    7,675Provision for credit losses
    
    
    46,578
    
    
    
    62,630Deferred income tax expense (benefit)
    
    
    7,181
    
    
    
    (6,837
    )Accretion of present value discount
    
    
    (1,053
    )
    
    
    (6,212
    )Amortization of purchase premium
    
    
    4,827
    
    
    
    9,025Loss on repurchase of receivables from gain on sale trusts
    
    
    
    
    
    
    2,864Changes in operating assets and liabilitiesAccounts receivable
    
    
    5,713
    
    
    
    6,150Other assets
    
    
    (457
    )
    
    
    (194
    )Other liabilities
    
    
    10,945
    
    
    
    916Current tax receivable/payable
    
    
    (8,021
    )
    
    
    (677
    )Net cash provided by operating activities
    
    
    72,589
    
    
    
    84,274Cash flows from investing activitiesDistributions from gain on sale trusts
    
    
    2,228
    
    
    
    49,059Payments to Ford Motor Credit
    
    
    (1,341
    )
    
    
    Repurchases from gain on sale trusts
    
    
    
    
    
    
    (93,712
    )Purchases of finance receivables held for investment
    
    
    (251,592
    )
    
    
    (306,563
    )Collections on finance receivables held for investment
    
    
    361,497
    
    
    
    376,846Change in restricted cash
    
    
    (18,867
    )
    
    
    (26,550
    )Purchases of fixed assets
    
    
    (1,171
    )
    
    
    (155
    )Net cash provided by (used in) investing activities
    
    
    90,754
    
    
    
    (1,075
    )Cash flows from financing activitiesNet change in warehouse credit facilities
    
    
    205,916
    
    
    
    302,936Net change in residual credit facilities
    
    
    11,000
    
    
    
    (45,000
    )Payment on securitization notes
    
    
    (374,174
    )
    
    
    (343,679
    )Capitalized finance costs
    
    
    (545
    )
    
    
    (72
    )Net cash used in financing activities
    
    
    (157,803
    )
    
    
    (85,815
    )Net increase (decrease) in cash and cash equivalents
    
    
    5,540
    
    
    
    (2,616
    )Cash and cash equivalentsBeginning of period
    
    
    52,505
    
    
    
    60,367End of period
    
    $
    58,045
    
    
    $
    57,751Non-cash ActivityPreferred Stock dividend declared
    
    $
    
    
    
    $
    788Supplemental DisclosureInterest paid
    
    $
    51,694
    
    
    $
    54,642Income taxes paid
    
    $
    71
    
    
    $
    13,287
  4




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Triad Financial Corporation
 
 Notes to Consolidated Financial Statements
 1. Organization and Nature of Business
      2. Accounting Policies
 Basis of Presentation
    Cash Equivalents
  5




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##### Table of Contents



Restricted Cash
  Finance Receivables
    Sale of Receivables
    Allowance for Credit Losses
  6




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Charge-Off Policy
  Derivative Financial Instruments
 ,
 Fair Value Disclosures
    
 7




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##### Table of Contents




 
   Fair Value Measurement at March 31, 2008Level 1
    
    Level 2
    
    Level 3
    
    Total FairInputs
    
    Inputs
    
    Inputs
    
    Value(Dollars in thousands)Retained interest in securitized assets
    
    $
    
    
    
    $
    
    
    
    $
    10,964
    
    
    $
    10,964Derivative financial instruments
    
    
    
    
    
    
    (22,914
    )
    
    
    
    
    
    
    (22,914
    )
  Fair Value Measurement UsingSignificant Unobservable Inputs (Level 3)Retained Interestin Securitized Assets(Dollars inthousands)Balance at December 31, 2007
    
    $
    10,916Impact of adoption of SFAS No. 157
    
    
    Balance at January 1, 2008
    
    
    10,916Residual interest income included in earnings
    
    
    1,053Unrealized losses included in other comprehensive income
    
    
    (118
    )Settlements
    
    
    (887
    )Balance at March 31, 2008
    
    $
    10,964
  8




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##### Table of Contents



Fixed Assets
   Equipment
    
    3-5 yearsSoftware
    
    3-5 yearsFurniture and fixtures
    
    5 years
    Goodwill
  Income Taxes
   9




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##### Table of Contents



Stock-Based Compensation
  Use of Estimates
  3. Finance Receivables
  2008
    
    
    2007(Dollars in thousands)Finance receivables held for investment
    
    $
    3,048,962
    
    
    $
    3,124,036Premiums and discounts, net
    
    
    (3,668
    )
    
    
    (3,592
    )Deferred costs, net
    
    
    25,550
    
    
    
    25,767Finance receivables held for investment, gross
    
    
    3,070,844
    
    
    
    3,146,211Allowance for credit losses
    
    
    (206,705
    )
    
    
    (230,500
    )Finance receivables held for investment, net
    
    
    2,864,139
    
    
    
    2,915,711Predecessor finance receivables held for investment, net
    
    
    405,255
    
    
    
    475,296Finance receivables repurchased from gain on sale trusts, net
    
    
    87,718
    
    
    
    123,972Finance receivables, net
    
    $
    3,357,112
    
    
    $
    3,514,979
  10




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Contractual
    
    
    Nonaccretable
    
    
    Expected
    
    
    Accretable
    
    
    CarryingPayments
    
    
    Discount
    
    
    Payments
    
    
    Discount
    
    
    Value(Dollars in thousands)Balance, December 31, 2007
    
    $
    639,854
    
    
    $
    (105,391
    )
    
    $
    534,463
    
    
    $
    (59,167
    )
    
    $
    475,296Interest income
    
    
    (18,812
    )
    
    
    
    
    
    
    (18,812
    )
    
    
    14,577
    
    
    
    (4,235
    )Principal collections
    
    
    (65,806
    )
    
    
    
    
    
    
    (65,806
    )
    
    
    
    
    
    
    (65,806
    )Charge-offs, net of sales proceeds and recoveries
    
    
    (12,092
    )
    
    
    12,092
    
    
    
    
    
    
    
    
    
    
    
    Reclassifications
    
    
    
    
    
    
    90
    
    
    
    90
    
    
    
    (90
    )
    
    
    Change in cash flows
    
    
    (8,661
    )
    
    
    8,661
    
    
    
    
    
    
    
    
    
    
    
    Balance, March 31, 2008
    
    $
    534,483
    
    
    $
    (84,548
    )
    
    $
    449,935
    
    
    $
    (44,680
    )
    
    $
    405,255
 Contractual
    
    
    Nonaccretable
    
    
    Expected
    
    
    Accretable
    
    
    CarryingPayments
    
    
    Discount
    
    
    Payments
    
    
    Discount
    
    
    Value(Dollars in thousands)Balance, December 31, 2006
    
    $
    1,246,836
    
    
    $
    (253,238
    )
    
    $
    993,598
    
    
    $
    (144,352
    )
    
    $
    849,246Interest income
    
    
    (33,868
    )
    
    
    
    
    
    
    (33,868
    )
    
    
    25,686
    
    
    
    (8,182
    )Principal collections
    
    
    (102,267
    )
    
    
    
    
    
    
    (102,267
    )
    
    
    
    
    
    
    (102,267
    )Charge-offs, net of sales proceeds and recoveries
    
    
    (14,360
    )
    
    
    14,360
    
    
    
    
    
    
    
    
    
    
    
    Reclassifications
    
    
    
    
    
    
    1,512
    
    
    
    1,512
    
    
    
    (1,512
    )
    
    
    Change in cash flows
    
    
    (20,795
    )
    
    
    20,795
    
    
    
    
    
    
    
    
    
    
    
    Balance, March 31, 2007
    
    $
    1,075,546
    
    
    $
    (216,571
    )
    
    $
    858,975
    
    
    $
    (120,178
    )
    
    $
    738,797
  Contractual
    
    
    Nonaccretable
    
    
    Expected
    
    
    Accretable
    
    
    CarryingPayments
    
    
    Discount
    
    
    Payments
    
    
    Discount
    
    
    Value(Dollars in thousands)Balance, December 31, 2007
    
    $
    145,125
    
    
    $
    (12,852
    )
    
    $
    132,273
    
    
    $
    (8,301
    )
    
    $
    123,972Interest income
    
    
    (4,575
    )
    
    
    
    
    
    
    (4,575
    )
    
    
    3,984
    
    
    
    (591
    )Principal collections
    
    
    (35,663
    )
    
    
    
    
    
    
    (35,663
    )
    
    
    
    
    
    
    (35,663
    )Charge-offs, net of sales proceeds and recoveries
    
    
    (1,428
    )
    
    
    1,428
    
    
    
    
    
    
    
    
    
    
    
    Reclassifications
    
    
    
    
    
    
    1,225
    
    
    
    1,225
    
    
    
    (1,225
    )
    
    
    Change in cash flows
    
    
    (21
    )
    
    
    21
    
    
    
    
    
    
    
    
    
    
    
    Balance, March 31, 2008
    
    $
    103,438
    
    
    $
    (10,178
    )
    
    $
    93,260
    
    
    $
    (5,542
    )
    
    $
    87,718
 Contractual
    
    
    Nonaccretable
    
    
    Expected
    
    
    Accretable
    
    
    CarryingPayments
    
    
    Discount
    
    
    Payments
    
    
    Discount
    
    
    Value(Dollars in thousands)Balance, December 31, 2006
    
    $
    70,453
    
    
    $
    (4,137
    )
    
    $
    66,316
    
    
    $
    (3,657
    )
    
    $
    62,659Finance receivables repurchased
    
    
    103,295
    
    
    
    (8,011
    )
    
    
    95,284
    
    
    
    (5,795
    )
    
    
    89,489Interest income
    
    
    (4,783
    )
    
    
    
    
    
    
    (4,783
    )
    
    
    3,940
    
    
    
    (843
    )Principal collections
    
    
    (32,570
    )
    
    
    
    
    
    
    (32,570
    )
    
    
    
    
    
    
    (32,570
    )Charge-offs, net of sales proceeds and recoveries
    
    
    (1,209
    )
    
    
    1,209
    
    
    
    
    
    
    
    
    
    
    
    Reclassifications
    
    
    
    
    
    
    1,469
    
    
    
    1,469
    
    
    
    (1,469
    )
    
    
    Change in cash flows
    
    
    857
    
    
    
    (857
    )
    
    
    
    
    
    
    
    
    
    
    Balance, March 31, 2007
    
    $
    136,043
    
    
    $
    (10,327
    )
    
    $
    125,716
    
    
    $
    (6,981
    )
    
    $
    118,735
  11




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##### Table of Contents



4. Allowance For Credit Losses
  Three Months
    
    
    Three MonthsEnded
    
    
    EndedMarch 31,
    
    
    March 31,2008
    
    
    2007(Dollars in thousands)Balance, beginning of period
    
    $
    230,500
    
    
    $
    195,000Provision for credit losses
    
    
    46,578
    
    
    
    62,630Charge-offs
    
    
    (80,710
    )
    
    
    (54,828
    )Recoveries
    
    
    10,337
    
    
    
    5,275Balance, end of period
    
    $
    206,705
    
    
    $
    208,077
   5. Sales of Receivables
 Servicing Portfolio
  Three Months
    
    
    Three MonthsEnded
    
    
    EndedMarch 31,
    
    
    March 31,2008
    
    
    2007(Dollars in thousands)Balance, beginning of period
    
    $
    94,097
    
    
    $
    484,818Called receivables
    
    
    
    
    
    
    (93,712
    )Collections and charge-offs
    
    
    (18,459
    )
    
    
    (68,527
    )Balance, end of period
    
    $
    75,638
    
    
    $
    322,579
  12




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Retained Interest in Securitized Assets
  2008
    
    
    2007(Dollars in thousands)Restricted cash held for the benefit of securitizations
    
    $
    14,731
    
    
    $
    14,731Overcollaterization receivable
    
    
    9,833
    
    
    
    12,233Interest-only
    
    
    542
    
    
    
    (447
    )Retained interest in securitized assets, gross
    
    
    25,106
    
    
    
    26,517Payable to Ford Credit
    
    
    (14,142
    )
    
    
    (15,601
    )Retained interest in securitized assets, net
    
    $
    10,964
    
    
    $
    10,916
      Retained
    
    
    
    
    
    
    RetainedInterest in
    
    
    
    
    
    
    Interest inRestricted
    
    
    Over-
    
    
    Interest-
    
    
    Securitized
    
    
    Payable to Ford
    
    
    SecuritizedCash
    
    
    Collateralization
    
    
    Only
    
    
    Assets, Gross
    
    
    Credit
    
    
    Assets, Net(Dollars in thousands)Balance, December 31, 2007
    
    $
    14,731
    
    
    $
    12,233
    
    
    $
    (447
    )
    
    $
    26,517
    
    
    $
    (15,601
    )
    
    $
    10,916Distributions
    
    
    
    
    
    
    (2,400
    )
    
    
    172
    
    
    
    (2,228
    )
    
    
    
    
    
    
    (2,228
    )Residual interest income
    
    
    
    
    
    
    
    
    
    
    1,053
    
    
    
    1,053
    
    
    
    
    
    
    
    1,053Unrealized gains (losses)
    
    
    
    
    
    
    
    
    
    
    (236
    )
    
    
    (236
    )
    
    
    118
    
    
    
    (118
    )Payment to Ford Credit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,341
    
    
    
    1,341Balance, March 31, 2008
    
    $
    14,731
    
    
    $
    9,833
    
    
    $
    542
    
    
    $
    25,106
    
    
    $
    (14,142
    )
    
    $
    10,964Balance, December 31, 2006
    
    $
    57,751
    
    
    $
    63,026
    
    
    $
    2,257
    
    
    $
    123,034
    
    
    $
    (20,503
    )
    
    $
    102,531Distributions
    
    
    (22,526
    )
    
    
    (21,091
    )
    
    
    (5,442
    )
    
    
    (49,059
    )
    
    
    
    
    
    
    (49,059
    )Residual interest income
    
    
    
    
    
    
    
    
    
    
    6,795
    
    
    
    6,795
    
    
    
    (583
    )
    
    
    6,212Realized losses
    
    
    
    
    
    
    
    
    
    
    (311
    )
    
    
    (311
    )
    
    
    156
    
    
    
    (155
    )Unrealized gains (losses)
    
    
    
    
    
    
    
    
    
    
    (1,797
    )
    
    
    (1,797
    )
    
    
    (589
    )
    
    
    (2,386
    )Balance, March 31, 2007
    
    $
    35,225
    
    
    $
    41,935
    
    
    $
    1,502
    
    
    $
    78,662
    
    
    $
    (21,519
    )
    
    $
    57,143
 13




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##### Table of Contents



6. Revolving Credit Facilities
  2008
    
    
    2007(Dollars in thousands)Warehouse loan facilities
    
    $
    486,306
    
    
    $
    280,390Residual loan facility
    
    
    65,000
    
    
    
    54,000Total revolving credit facilities
    
    $
    551,306
    
    
    $
    334,390
  Facility
    
    
    Collateral
    
    
    AdvancesAmount
    
    
    Pledged
    
    
    Outstanding(Dollars in thousands)Warehouse loan facility, due April 2009
    
    $
    625,000
    
    
    $
    541,491
    
    
    $
    486,306Residual loan facility, due April 2009
    
    
    125,000
    
    
    
    375,096
    
    
    
    65,000Warehouse loan facility, due January 2009
    
    
    500,000
    
    
    
    
    
    
    
    $
    1,250,000
    
    
    $
    916,587
    
    
    $
    551,306
   14




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##### Table of Contents



7. Securitization Notes Payable
  OriginalWeighted
    
    
    Collateral
    
    
    NoteOriginal
    
    
    Average
    
    
    Pledged
    
    
    BalanceNote
    
    
    Interest
    
    
    at
    
    
    atTransaction
    
    Amount
    
    
    Rate
    
    
    March 31, 2008
    
    
    March 31, 2008(Dollars in thousands)2005-A, due June 12, 2012(a)
    
    $
    1,104,000
    
    
    
    4.09
    %
    
    $
    271,732
    
    
    $
    256,5352005-B, due April 12, 2013(a)
    
    
    905,303
    
    
    
    4.32
    %
    
    
    251,388
    
    
    
    237,3392006-A, due April 12, 2013(a)
    
    
    822,500
    
    
    
    4.88
    %
    
    
    330,227
    
    
    
    305,4002006-B, due November 12, 2012(a)
    
    
    915,500
    
    
    
    5.50
    %
    
    
    434,713
    
    
    
    403,3422006-C, due May 13, 2013(a)
    
    
    1,092,200
    
    
    
    5.37
    %
    
    
    619,465
    
    
    
    568,0462007-A, due February 12, 2014(a)
    
    
    775,110
    
    
    
    5.34
    %
    
    
    583,598
    
    
    
    527,4932007-B, due July 14, 2014(a)
    
    
    598,330
    
    
    
    5.70
    %
    
    
    589,670
    
    
    
    523,160$
    6,212,943
    
    
    
    
    
    
    $
    3,080,793
    
    
    $
    2,821,315
 
 (a)
    
    Maturity date represents final legal maturity of securitization notes payable. Securitization
notes payable are expected to be paid based on amortization of the finance receivables pledged
to the Trusts. 15




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##### Table of Contents



8. Senior Notes Payable
    9. Preferred Stock
  16




---



##### Table of Contents



10. Derivative Financial Instruments
  11. Income Taxes
    12. Commitments and Contingencies
    17




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##### Table of Contents



(Dollars in thousands)Year ending December 31,2008
    
    $
    2,3442009
    
    $
    3,3512010
    
    $
    3,4492011
    
    $
    2,5282012
    
    $
    2,148
 13. Comprehensive Income
  Three Months
    
    
    Three MonthsEnded
    
    
    EndedMarch 31,
    
    
    March 31,2008
    
    
    2007(Dollars in
thousands)Net income
    
    $
    929
    
    
    $
    8,934Other comprehensive income (loss), netUnrealized holding (loss) gains on available for sale securities (net of tax of
$45 and $233)
    
    
    (73
    )
    
    
    356Net unrealized holding gains reclassified into earnings (net of tax of $1,175)
    
    
    
    
    
    
    (1,798
    )Total other comprehensive loss, net
    
    
    (73
    )
    
    
    (1,442
    )Comprehensive income
    
    $
    856
    
    
    $
    7,492
  Three Months
    
    
    Three MonthsEnded
    
    
    EndedMarch 31,
    
    
    March 31,2008
    
    
    2007(Dollars in thousands)Balance, beginning of period
    
    $
    1,901
    
    
    $
    9,084Current period change
    
    
    (73
    )
    
    
    (1,442
    )Balance, end of period
    
    $
    1,828
    
    
    $
    7,642
 18




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##### Table of Contents



14. Stock-Based Compensation
     Weighted-AverageExerciseShares
    
    
    Price(Amounts in thousands exceptweighted-averageexercise price )Outstanding at December 31, 2007
    
    
    2,867
    
    
    $
    7.68Granted
    
    
    
    
    
    
    Canceled
    
    
    (8
    )
    
    
    7.73Forfeited
    
    
    (12
    )
    
    
    7.73Outstanding at March 31, 2008
    
    
    2,847
    
    
    $
    7.68Exercisable at March 31, 2008
    
    
    1,602
    
    
    $
    7.63Weighted-average remaining contractual life in years
    
    
    
    
    
    
    7.82Outstanding at December 31, 2006
    
    
    2,988
    
    
    $
    7.58Granted
    
    
    200
    
    
    
    8.30Canceled
    
    
    
    
    
    
    Forfeited
    
    
    (150
    )
    
    
    7.59Outstanding at March 31, 2007
    
    
    3,038
    
    
    $
    7.62
 19




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15. Subsequent Event
     20




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##### Table of Contents



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 From June 1999 through April 29, 2005, the Company was a wholly owned subsidiary of Fairlane
Credit, LLC, a wholly-owned subsidiary of Ford Motor Credit Company, or Ford Credit. On April 29,
2005, a newly formed entity, Triad Holdings Inc. and its wholly-owned subsidiary, Triad Acquisition
Corp., acquired all of the outstanding capital stock of the Company from Fairlane Credit, LLC, or
the Acquisition. As part of the Acquisition, Triad Acquisition Corp. was merged with and into
Triad Financial Corporation with the Company being the surviving corporation.
 In accordance with the guidelines for accounting for business combinations, the purchase price
paid by Triad Holdings Inc. plus related purchase accounting adjustments have been pushed-down and
recorded in our financial statements for the period subsequent to April 29, 2005. This has resulted
in a new basis of accounting reflecting the fair market value of our assets and liabilities for the
successor period beginning April 30, 2005.
 The statements in the discussion and analysis regarding our expectations regarding the
performance of our business, our liquidity and capital resources and other non-historical
statements are forward-looking statements. These forward-looking statements are subject to numerous
risks and uncertainties. Our actual results may differ materially from those contained in or
implied by any of these forward-looking statements.
 General
   21




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Critical Accounting Policies and Use of Estimates
  Components of Revenues and Expenses
   Results of Operations
 Three Months Ended March 31, 2008 as Compared to Three Months Ended March 31, 2007
  22




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##### Table of Contents



Net Interest Margin
  For the Three Months EndedMarch 31,2008
    
    
    2007(Dollars in thousands)Average owned finance receivables, carrying value
    
    $
    3,630,074
    
    
    $
    3,934,717
    For the Three Months EndedMarch 31,2008
    
    
    2007(Dollars in thousands)Financing income
    
    $
    138,197
    
    
    $
    152,196Other interest income
    
    
    3,872
    
    
    
    9,334Interest expense
    
    
    (50,072
    )
    
    
    (54,863
    )Net interest margin
    
    $
    91,997
    
    
    $
    106,667Annualized financing income as a percentage of average owned finance receivables
    
    
    15.2
    %
    
    
    15.5
    %
   23




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Provision for Credit Losses
  Servicing Income
  Other Income
  For the Three Months EndedMarch 31,2008
    
    
    2007(Dollars in thousands)Customer fees
    
    $
    4,303
    
    
    $
    5,983Losses on derivative financial instruments
    
    
    (14,968
    )
    
    
    (807
    )Other
    
    
    304
    
    
    
    (2,517
    )Other income
    
    $
    (10,361
    )
    
    $
    2,659
    24




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##### Table of Contents



Expenses
  Income Taxes
  Credit Quality
    At March 31,
    
    
    At December 31,2008
    
    
    2007(Dollars in thousands)Finance receivables held for investment
    
    $
    3,048,962
    
    
    $
    3,124,036Allowance for credit losses
    
    
    (206,705
    )
    
    
    (230,500
    )Finance receivables held for investment, net of allowance
    
    
    2,842,257
    
    
    
    2,893,536Allowance for credit losses as a percentage of receivables
    
    
    6.8
    %
    
    
    7.4
    %Predecessor finance receivables held for investment, net
    
    
    405,255
    
    
    
    475,296Finance receivables repurchased from gain on sale trusts, net
    
    
    87,718
    
    
    
    123,972Total owned finance receivables held for investment, net
    
    $
    3,335,230
    
    
    $
    3,492,804
  25




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##### Table of Contents



At March 31,
    
    
    At December 31,2008
    
    
    2007Amount
    
    
    Percent
    
    
    Amount
    
    
    Percent(Dollars in thousands)Delinquent contracts:31 to 60 days
    
    $
    256,915
    
    
    
    7.2
    %
    
    $
    377,862
    
    
    
    10.0
    %Greater than 60 days
    
    
    70,115
    
    
    
    1.9
    
    
    
    156,036
    
    
    
    4.1327,030
    
    
    
    9.1
    
    
    
    533,898
    
    
    
    14.1In repossession
    
    
    23,637
    
    
    
    0.7
    
    
    
    29,383
    
    
    
    0.8$
    350,667
    
    
    
    9.8
    %
    
    $
    563,281
    
    
    
    14.9
    %
     At March 31,
    
    At December 31,2008
    
    2007Percent
    
    PercentNever extended
    
    
    70.8
    %
    
    
    73.2
    %Extended:1-2 times
    
    
    28.4
    %
    
    
    26.1
    %3-4 times
    
    
    0.8
    %
    
    
    0.7
    %Total extended
    
    
    29.2
    %
    
    
    26.8
    %Total
    
    
    100.0
    %
    
    
    100.0
    %
  26




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##### Table of Contents



For the Three Months EndedMarch 31,2008
    
    
    2007(Dollars in thousands)Repossession charge-offs
    
    $
    119,071
    
    
    $
    91,019Less: Sales proceeds and recoveries
    
    
    (70,206
    )
    
    
    (59,328
    )Mandatory charge-offs(1)
    
    
    35,027
    
    
    
    33,432Net charge-offs(2)
    
    $
    83,892
    
    
    $
    65,123Annualized net charge-offs as a percentage of average total
owned receivables outstanding
    
    
    9.2
    %
    
    
    6.6
    %Sales proceeds and recoveries as a percentage of charge-offs
    
    
    45.6
    %
    
    
    47.7
    %
 
 (1)
    
    Mandatory charge-offs represent accounts charged-off in full with no recovery amounts
realized at time of charge-off.(2)
    
    Net charge-offs for our owned portfolio include charge-offs from our finance
receivables held for investment, our predecessor finance receivables held for investment
and our finance receivables repurchased from gain on sale trusts.  Total Managed Information
   27




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##### Table of Contents



For the Three Months EndedMarch 31,2008
    
    
    2007(Dollars in thousands)Average owned finance receivables, carrying value
    
    $
    3,630,074
    
    
    $
    3,934,717Average sold finance receivables
    
    
    84,401
    
    
    
    401,056Average total managed finance receivables
    
    $
    3,714,475
    
    
    $
    4,335,773
 Total Managed Net Interest Margin
  For the Three Months EndedMarch 31,2008
    
    
    2007(Dollars in thousands)Financing income and customer fees
    
    $
    150,912
    
    
    $
    183,539Interest expense
    
    
    (52,343
    )
    
    
    (58,358
    )Net interest margin
    
    $
    98,569
    
    
    $
    125,001
  For the Three Months EndedMarch 31,2008
    
    
    2007(Dollars in thousands)Net margin as reflected on the consolidated statements of income
    
    $
    91,997
    
    
    $
    106,667Other interest income
    
    
    (3,872
    )
    
    
    (9,334
    )Financing revenue on sold receivables
    
    
    3,585
    
    
    
    16,335Interest expense on sold receivables
    
    
    (516
    )
    
    
    (2,868
    )Losses on forward starting swaps agreements
    
    
    (1,755
    )
    
    
    (807
    )Premium amortization
    
    
    4,827
    
    
    
    9,025Customer fees
    
    
    4,303
    
    
    
    5,983Total managed net interest margin
    
    $
    98,569
    
    
    $
    125,001
 28




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##### Table of Contents



For the Three MonthsEndedMarch 31,2008
    
    2007Annualized finance income and customer fees
    
    
    16.2
    %
    
    
    16.9
    %Annualized interest expense
    
    
    (5.6
    )
    
    
    (5.4
    )Annualized net interest margin as a percentage of average total managed receivables
    
    
    10.6
    %
    
    
    11.5
    %
  Total Managed Credit Quality
   At March 31, 2008Owned
    
    
    Sold
    
    
    Total Managed(Dollars in thousands)Owned finance receivables, unpaid principal balance
    
    $
    3,584,419
    
    
    $
    
    
    
    $
    3,584,419Sold finance receivables
    
    
    
    
    
    
    75,638
    
    
    
    75,638Total managed finance receivables
    
    $
    3,584,419
    
    
    $
    75,638
    
    
    $
    3,660,057Number of outstanding contracts
    
    
    261,266
    
    
    
    10,582
    
    
    
    271,848Average principal amount of outstanding contracts
(in dollars)
    
    $
    13,719
    
    
    $
    7,148
    
    
    $
    13,464
 At December 31, 2007Owned
    
    
    Sold
    
    
    Total Managed(Dollars in thousands)Owned finance receivables, unpaid principal balance
    
    $
    3,774,481
    
    
    $
    
    
    
    $
    3,774,481Sold finance receivables
    
    
    
    
    
    
    94,097
    
    
    
    94,097Total managed finance receivables
    
    $
    3,774,481
    
    
    $
    94,097
    
    
    $
    3,868,578Number of outstanding contracts
    
    
    271,384
    
    
    
    11,886
    
    
    
    283,270Average principal amount of outstanding contracts
(in dollars)
    
    $
    13,908
    
    
    $
    7,917
    
    
    $
    13,657
 29




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##### Table of Contents



At March 31, 2008Owned
    
    
    Sold
    
    
    Total ManagedAmount
    
    
    Percent
    
    
    Amount
    
    
    Percent
    
    
    Amount
    
    
    PercentDelinquent contracts:
    
    (Dollars in thousands)31 to 60 days
    
    $
    256,915
    
    
    
    7.2
    %
    
    $
    7,257
    
    
    
    9.6
    %
    
    $
    264,172
    
    
    
    7.2
    %Greater than 60 days
    
    
    70,115
    
    
    
    1.9
    
    
    
    2,028
    
    
    
    2.7
    
    
    
    72,143
    
    
    
    2.0327,030
    
    
    
    9.1
    
    
    
    9,285
    
    
    
    12.3
    
    
    
    336,315
    
    
    
    9.2In repossession
    
    
    23,637
    
    
    
    0.7
    
    
    
    1,237
    
    
    
    1.6
    
    
    
    24,874
    
    
    
    0.7$
    350,667
    
    
    
    9.8
    %
    
    $
    10,522
    
    
    
    13.9
    %
    
    $
    361,189
    
    
    
    9.9
    %
 At December 31, 2007Owned
    
    
    Sold
    
    
    Total ManagedAmount
    
    
    Percent
    
    
    Amount
    
    
    Percent
    
    
    Amount
    
    
    PercentDelinquent contracts:
    
    (Dollars in thousands)31 to 60 days
    
    $
    377,862
    
    
    
    10.0
    %
    
    $
    12,599
    
    
    
    13.4
    %
    
    $
    390,461
    
    
    
    10.1
    %Greater than 60 days
    
    
    156,036
    
    
    
    4.1
    
    
    
    5,168
    
    
    
    5.5
    
    
    
    161,204
    
    
    
    4.2533,898
    
    
    
    14.1
    
    
    
    17,767
    
    
    
    18.9
    
    
    
    551,665
    
    
    
    14.3In repossession
    
    
    29,383
    
    
    
    0.8
    
    
    
    1,768
    
    
    
    1.9
    
    
    
    31,151
    
    
    
    0.8$
    563,281
    
    
    
    14.9
    %
    
    $
    19,535
    
    
    
    20.8
    %
    
    $
    582,816
    
    
    
    15.1
    %
    30




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##### Table of Contents



At March 31, 2008Owned
    
    Sold
    
    Total ManagedNever extended
    
    
    70.8
    %
    
    
    43.5
    %
    
    
    70.3
    %Extended:1-2 times
    
    
    28.4
    %
    
    
    47.6
    %
    
    
    28.7
    %3-4 times
    
    
    0.8
    %
    
    
    8.9
    %
    
    
    1.0
    %Total extended
    
    
    29.2
    %
    
    
    56.5
    %
    
    
    29.7
    %Total
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
 At December 31, 2007Owned
    
    Sold
    
    Total ManagedNever extended
    
    
    73.2
    %
    
    
    46.1
    %
    
    
    72.6
    %Extended:1-2 times
    
    
    26.1
    %
    
    
    47.3
    %
    
    
    26.6
    %3-4 times
    
    
    0.7
    %
    
    
    6.6
    %
    
    
    0.8
    %Total extended
    
    
    26.8
    %
    
    
    53.9
    %
    
    
    27.4
    %Total
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
   31




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For the Three Months EndedMarch 31,2008
    
    
    2007(Dollars in thousands)Owned:Repossession charge-offs
    
    $
    119,071
    
    
    $
    91,019Less: Sales proceeds and recoveries
    
    
    (70,206
    )
    
    
    (59,328
    )Mandatory charge-offs(1)
    
    
    35,027
    
    
    
    33,432Net charge-offs(2)
    
    $
    83,892
    
    
    $
    65,123Sold:Charge-offs
    
    $
    4,440
    
    
    $
    14,871Less: Sales proceeds and recoveries
    
    
    (2,063
    )
    
    
    (8,371
    )Mandatory charge-offs(1)
    
    
    
    
    
    
    Net charge-offs
    
    $
    2,377
    
    
    $
    6,500Total Managed:Repossession charge-offs
    
    $
    123,511
    
    
    $
    105,890Less: Sales proceeds and recoveries
    
    
    (72,269
    )
    
    
    (67,699
    )Mandatory charge-offs(1)
    
    
    35,027
    
    
    
    33,432Net charge-offs
    
    $
    86,269
    
    
    $
    71,623Annualized net charge-offs as a percentage of average total
managed receivables outstanding
    
    
    9.3
    %
    
    
    6.6
    %Sales proceeds and recoveries as a percentage of charge-offs
    
    
    45.6
    %
    
    
    48.6
    %
 
 (1)
    
    Mandatory charge-offs represent accounts charged-off in full with no recovery amounts
realized at time of charge-off.(2)
    
    Net charge-offs for our owned portfolio include charge-offs from our finance receivables
held for investment, our predecessor finance receivables held for investment and our finance
receivables repurchased from gain on sale trusts.  Liquidity and Capital Resources
 General
   32




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Contractual and Long-Term Debt Obligations
  33




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##### Table of Contents



Securitizations
        Off-Balance Sheet Arrangements
  34




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##### Table of Contents



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Interest Rate Risk
 General
  Warehouse and Residual Facilities
     35




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Securitizations
    Interest Rate Swap Agreements
  
 ITEM 4. CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
   36




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##### Table of Contents



Changes in Internal Control over Financial Reporting
  
 PART II. OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
   
 ITEM 1A. RISK FACTORS
  
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  
 ITEM 3. DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 ITEM 5. OTHER INFORMATION
  37




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##### Table of Contents



ITEM 6. EXHIBITS
 EXHIBIT INDEX
 ExhibitNo.
    
    Description2.1
    
    Stock Purchase Agreement, dated as of December 23, 2004, among Triad
Holdings Inc., Triad Acquisition Corp. and Fairlane Credit LLC
(incorporated herein by reference to Exhibit 2.1 to the Registration
Statement on Form S-4/A of Triad Financial Corporation, filed on
November 15, 2005 (File No. 333-126538)).3.1
    
    Third Amended and Restated Articles of Incorporation of Triad Financial
Corporation. (incorporated herein by reference to Exhibit 3.1 on
Form 10-Q of Triad Financial Corporation, filed on August 11, 2006 (File
No. 333-65107)).3.2
    
    Third Amended and Restated Bylaws of Triad Financial Corporation
(incorporated herein by reference to Exhibit 3.2 to the Registration
Statement on Form S-4 of Triad Financial Corporation, filed on July 12,
2005 (File No. 333-126538)).4.1
    
    Indenture, dated as of April 29, 2005, among Triad Acquisition Corp. and
JPMorgan Chase Bank, N.A., as Trustee (incorporated herein by reference
to Exhibit 4.1 to the Registration Statement on Form S-4 of Triad
Financial Corporation, filed on July 12, 2005 (File No. 333-126538)).4.2
    
    Supplemental Indenture, dated as of April 29, 2005, among Triad
Financial Corporation and JPMorgan Chase Bank, N.A., as Trustee
(incorporated herein by reference to Exhibit 4.2 to the Registration
Statement on Form S-4 of Triad Financial Corporation, filed on July 12,
2005 (File No. 333-126538)).4.3
    
    Exchange and Registration Rights Agreement, dated as of April 29, 2005,
among Triad Acquisition Corp. and Goldman, Sachs & Co., and Citigroup
Global Markets Inc., as representatives of the several Purchasers
(incorporated herein by reference to Exhibit 4.3 to the Registration
Statement on Form S-4 of Triad Financial Corporation, filed on July 12,
2005 (File No. 333-126538)).4.4
    
    Form of Senior Note (attached as exhibit to Exhibit 4.1).10.1
    
    Employment Agreement, dated as of April 29, 2005, between the Company
and James M. Landy (incorporated herein by reference to Exhibit 10.1 to
the Registration Statement on Form S-4 of Triad Financial Corporation,
filed on July 12, 2005 (File No. 333-126538)).*10.2
    
    Employment Agreement, dated as of November 11, 2005, between the Company
and Chris A. Goodman (incorporated herein by reference to Exhibit 10.2
on Form 10-K of Triad Financial Corporation, filed on March 31, 2006
(File No. 333-126538)) and Amended and Restated Employment Agreement,
dated as of August 1, 2007, between the Company and Chris A. Goodman
(incorporated herein by reference to Exhibit 10.2 on Form 10-K of Triad
Financial Corporation, filed on March 28, 2007 (File No. 333-126538)). *10.3
    
    Employment Agreement, dated as of February 15, 2007, between the Company
and David A. Satterfield. (incorporated herein by reference to
Exhibit 10.3 on Form 10-K of Triad Financial Corporation, filed on
March 28, 2007 (File No. 333-126538)). *10.4
    
    Consulting Agreement dated as of July 31, 2007, between the Company and
Carl B. Webb (incorporated herein by reference to Exhibit 10.15 on
Form 10-Q of Triad Financial Corporation, filed on November 9, 2007
(File No. 333-65107)) and the First Amendment to the Consulting
Agreement, dated as of February  12, 2008, between the Company and Carl
B. Webb (incorporated herein by reference to Exhibit 10.4 on Form 10-K
of Triad Financial Corporation, filed on March 28, 2007 (File
No. 333-126538)). *10.5
    
    Management Agreement, dated as of April 29, 2005, among the Company,
Triad Holdings, LLC, Triad Holdings Inc. and Hunters Glen/Ford Ltd
(incorporated herein by reference to Exhibit 10.2 to the Registration
Statement on Form S-4 of Triad Financial Corporation, filed on July 12,
2005 (File No. 333-126538)).10.6
    
    Warehouse Lending Agreement, dated as of April 29, 2005, among the
Company, Triad Financial Warehouse Special Purpose LLC, Triad Automobile
Receivables Warehouse Trust, JPMorgan Chase Bank, as Collection Account
Bank and Citigroup Global Markets Realty Corp., as lender (incorporated
herein by reference to Exhibit 10.3 to the Registration Statement on
Form S-4 of Triad Financial
 38




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##### Table of Contents



ExhibitNo.
    
    DescriptionCorporation, filed on July 12, 2005 (File
No. 333-126538)).10.7
    
    Warehouse Lending Agreement, dated as of April 29, 2005, among the
Company, Triad Financial Warehouse Special Purpose LLC, Triad Automobile
Receivables Warehouse Trust, JPMorgan Chase Bank, as Collection Account
Bank and Goldman Sachs Mortgage Company, as lender (incorporated herein
by reference to Exhibit 10.4 to the Registration Statement on Form S-4
of Triad Financial Corporation, filed on July 12, 2005 (File
No. 333-126538)).10.8
    
    Warehouse Lending Agreement, dated as of January 10, 2008, among the
Company, Triad Financial Warehouse Special Purpose LLC, Triad Automobile
Receivables Warehouse Trust, The Bank of New York, as Collection Account
Bank, Sheffield Receivables Corporation, as Class A Lender, and Barclays
Bank PLC, as Class B Lender and Agent (incorporated herein by reference
to Exhibit 10.8 on Form 10-K of Triad Financial Corporation, filed on
March 28, 2007 (File No. 333-126538)).10.9
    
    Master Residual Loan Agreement, dated as of April 29, 2005, among Triad
Financial Residual Special Purpose LLC, JPMorgan Chase Bank, N.A., as
Collection Account Bank and Citigroup Global Markets Realty Corp
(incorporated herein by reference to Exhibit 10.5 to the Registration
Statement on Form S-4 of Triad Financial Corporation, filed on July 12,
2005 (File No. 333-126538)).10.10
    
    Master Residual Loan Agreement, dated as of April 29, 2005, among Triad
Financial Residual Special Purpose LLC, JPMorgan Chase Bank, N.A., as
Collection Account Bank and Goldman Sachs Mortgage Company (incorporated
herein by reference to Exhibit 10.6 to the Registration Statement on
Form S-4 of Triad Financial Corporation, filed on July 12, 2005 (File
No. 333-126538)).10.11
    
    Registration Rights Agreement dated as of April 29, 2005 among Triad
Holdings Inc. and certain holders of common stock (incorporated herein
by reference to Exhibit 10.7 to the Registration Statement on Form S-4
of Triad Financial Corporation, filed on July 12, 2005 (File
No. 333-126538)).10.12
    
    Stockholders Agreement, dated as of April 29, 2005, among Triad Holdings
Inc., Triad Holdings, LLC and James M. Landy (incorporated herein by
reference to Exhibit 10.8 to the Registration Statement on Form S-4 of
Triad Financial Corporation, filed on July 12, 2005 (File
No. 333-126538)).10.13
    
    Limited Liability Company Agreement of Triad Holdings, LLC (incorporated
herein by reference to Exhibit 10.9 to the Registration Statement on
Form S-4 of Triad Financial Corporation, filed on July 12, 2005 (File
No. 333-126538)).10.14
    
    HFI Loan and Security Agreement, dated as of April 29, 2005, between the
Company and Ford Motor Credit Company (incorporated herein by reference
to Exhibit 10.10 to the Registration Statement on Form S-4 of Triad
Financial Corporation, filed on July 12, 2005 (File No. 333-126538)).10.15
    
    Carl B. Webb Compensation Arrangement (incorporated herein by reference
to Exhibit 10.11 to the Registration Statement on Form S-4 of Triad
Financial Corporation, filed on July 12, 2005 (File No. 333-126538)).*10.16
    
    Amendment No. 2, dated as of March 15, 2007, to the Warehouse Lending
Agreement, dated as of April 29, 2005, among the Company, Triad
Financial Warehouse Special Purpose LLC, Triad Automobile Receivables
Warehouse Trust, The Bank of New York (as successor-in-interest to
JPMorgan Chase Bank, N.A.), as Collection Account Bank, and Citigroup
Global Markets Realty Corp., as lender (incorporated herein by reference
to Exhibit 10.1 on Form 8-K of Triad Financial Corporation, filed on
March 20, 2007 (File No. 333-65107)).10.17
    
    Amendment No. 1, dated as of March 15, 2007, to the Master Residual Loan
Agreement, dated as of April 29, 2005, among Triad Financial Residual
Special Purpose LLC, The Bank of New York (as successor-in-interest to
JPMorgan Chase Bank, N.A.), as Collection Account Bank, and Citigroup
Global Markets Realty Corp (incorporated herein by reference to
Exhibit 10.2 on Form 8-K of Triad Financial Corporation, filed on
March 20, 2007 (File No. 333-65107)).21.1
    
    Subsidiaries of the Company (incorporated herein by reference to
Exhibit 21.1 to the Registration Statement on Form S-4 of Triad
Financial Corporation, filed on July 12, 2005 (File No. 333-126538)).31.1
    
    Certification of Chief Executive Officer (Section 302 Certification)+31.2
    
    Certification of Principal Financial Officer (Section 302 Certification)+32.
    
    Certification of Periodic Financial Report (Section 906 Certification)+
 
 *
    
    Management contract or compensatory plan or arrangement.+
    
    Filed herewith 39




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##### Table of Contents



SIGNATURES
  Date: May 14, 2008
    
    /s/ Daniel D. LeonardDaniel D. LeonardPresident & Chief Executive OfficerDate: May 14, 2008
    
    /s/ Mike L. WilhelmsMike L. WilhelmsSenior Vice President & Chief Financial Officer
 40




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##### Table of Contents



EXHIBIT INDEX
 ExhibitNo.
    
    Description2.1
    
    Stock Purchase Agreement, dated as of December 23, 2004, among Triad
Holdings Inc., Triad Acquisition Corp. and Fairlane Credit LLC
(incorporated herein by reference to Exhibit 2.1 to the Registration
Statement on Form S-4/A of Triad Financial Corporation, filed on
November 15, 2005 (File No. 333-126538)).3.1
    
    Third Amended and Restated Articles of Incorporation of Triad Financial
Corporation. (incorporated herein by reference to Exhibit 3.1 on
Form 10-Q of Triad Financial Corporation, filed on August 11, 2006 (File
No. 333-65107)).3.2
    
    Third Amended and Restated Bylaws of Triad Financial Corporation
(incorporated herein by reference to Exhibit 3.2 to the Registration
Statement on Form S-4 of Triad Financial Corporation, filed on July 12,
2005 (File No. 333-126538)).4.1
    
    Indenture, dated as of April 29, 2005, among Triad Acquisition Corp. and
JPMorgan Chase Bank, N.A., as Trustee (incorporated herein by reference
to Exhibit 4.1 to the Registration Statement on Form S-4 of Triad
Financial Corporation, filed on July 12, 2005 (File No. 333-126538)).4.2
    
    Supplemental Indenture, dated as of April 29, 2005, among Triad
Financial Corporation and JPMorgan Chase Bank, N.A., as Trustee
(incorporated herein by reference to Exhibit 4.2 to the Registration
Statement on Form S-4 of Triad Financial Corporation, filed on July 12,
2005 (File No. 333-126538)).4.3
    
    Exchange and Registration Rights Agreement, dated as of April 29, 2005,
among Triad Acquisition Corp. and Goldman, Sachs & Co., and Citigroup
Global Markets Inc., as representatives of the several Purchasers
(incorporated herein by reference to Exhibit 4.3 to the Registration
Statement on Form S-4 of Triad Financial Corporation, filed on July 12,
2005 (File No. 333-126538)).4.4
    
    Form of Senior Note (attached as exhibit to Exhibit 4.1).10.1
    
    Employment Agreement, dated as of April 29, 2005, between the Company
and James M. Landy (incorporated herein by reference to Exhibit 10.1 to
the Registration Statement on Form S-4 of Triad Financial Corporation,
filed on July 12, 2005 (File No. 333-126538)).*10.2
    
    Employment Agreement, dated as of November 11, 2005, between the Company
and Chris A. Goodman (incorporated herein by reference to Exhibit 10.2
on Form 10-K of Triad Financial Corporation, filed on March 31, 2006
(File No. 333-126538)) and Amended and Restated Employment Agreement,
dated as of August 1, 2007, between the Company and Chris A. Goodman
(incorporated herein by reference to Exhibit 10.2 on Form 10-K of Triad
Financial Corporation, filed on March 28, 2007 (File No. 333-126538)). *10.3
    
    Employment Agreement, dated as of February 15, 2007, between the Company
and David A. Satterfield. (incorporated herein by reference to
Exhibit 10.3 on Form 10-K of Triad Financial Corporation, filed on
March 28, 2007 (File No. 333-126538)). *10.4
    
    Consulting Agreement dated as of July 31, 2007, between the Company and
Carl B. Webb (incorporated herein by reference to Exhibit 10.15 on
Form 10-Q of Triad Financial Corporation, filed on November 9, 2007
(File No. 333-65107)) and the First Amendment to the Consulting
Agreement, dated as of February 12, 2008, between the Company and Carl
B. Webb (incorporated herein by reference to Exhibit 10.4 on Form 10-K
of Triad Financial Corporation, filed on March 28, 2007 (File
No. 
333-126538)). *10.5
    
    Management Agreement, dated as of April 29, 2005, among the Company,
Triad Holdings, LLC, Triad Holdings Inc. and Hunters Glen/Ford Ltd
(incorporated herein by reference to Exhibit 10.2 to the Registration
Statement on Form S-4 of Triad Financial Corporation, filed on July 12,
2005 (File No. 333-126538)).10.6
    
    Warehouse Lending Agreement, dated as of April 29, 2005, among the
Company, Triad Financial Warehouse Special Purpose LLC, Triad Automobile
Receivables Warehouse Trust, JPMorgan Chase Bank, as Collection Account
Bank and Citigroup Global Markets Realty Corp., as lender (incorporated
herein by reference to Exhibit 10.3 to the Registration Statement on
Form S-4 of Triad Financial




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##### Table of Contents



ExhibitNo.
    
    DescriptionCorporation, filed on July 12, 2005 (File
No. 333-126538)).10.7
    
    Warehouse Lending Agreement, dated as of April 29, 2005, among the
Company, Triad Financial Warehouse Special Purpose LLC, Triad Automobile
Receivables Warehouse Trust, JPMorgan Chase Bank, as Collection Account
Bank and Goldman Sachs Mortgage Company, as lender (incorporated herein
by reference to Exhibit 10.4 to the Registration Statement on Form S-4
of Triad Financial Corporation, filed on July 12, 2005 (File
No. 333-126538)).10.8
    
    Warehouse Lending Agreement, dated as of January 10, 2008, among the
Company, Triad Financial Warehouse Special Purpose LLC, Triad Automobile
Receivables Warehouse Trust, The Bank of New York, as Collection Account
Bank, Sheffield Receivables Corporation, as Class A Lender, and Barclays
Bank PLC, as Class B Lender and Agent (incorporated herein by reference
to Exhibit 10.8 on Form 10-K of Triad Financial Corporation, filed on
March 28, 2007 (File No. 333-126538)).10.9
    
    Master Residual Loan Agreement, dated as of April 29, 2005, among Triad
Financial Residual Special Purpose LLC, JPMorgan Chase Bank, N.A., as
Collection Account Bank and Citigroup Global Markets Realty Corp
(incorporated herein by reference to Exhibit 10.5 to the Registration
Statement on Form S-4 of Triad Financial Corporation, filed on July 12,
2005 (File No. 333-126538)).10.10
    
    Master Residual Loan Agreement, dated as of April 29, 2005, among Triad
Financial Residual Special Purpose LLC, JPMorgan Chase Bank, N.A., as
Collection Account Bank and Goldman Sachs Mortgage Company (incorporated
herein by reference to Exhibit 10.6 to the Registration Statement on
Form S-4 of Triad Financial Corporation, filed on July 12, 2005 (File
No. 333-126538)).10.11
    
    Registration Rights Agreement dated as of April 29, 2005 among Triad
Holdings Inc. and certain holders of common stock (incorporated herein
by reference to Exhibit 10.7 to the Registration Statement on Form S-4
of Triad Financial Corporation, filed on July 12, 2005 (File
No. 333-126538)).10.12
    
    Stockholders Agreement, dated as of April 29, 2005, among Triad Holdings
Inc., Triad Holdings, LLC and James M. Landy (incorporated herein by
reference to Exhibit 10.8 to the Registration Statement on Form S-4 of
Triad Financial Corporation, filed on July 12, 2005 (File
No. 333-126538)).10.13
    
    Limited Liability Company Agreement of Triad Holdings, LLC (incorporated
herein by reference to Exhibit 10.9 to the Registration Statement on
Form S-4 of Triad Financial Corporation, filed on July 12, 2005 (File
No. 333-126538)).10.14
    
    HFI Loan and Security Agreement, dated as of April 29, 2005, between the
Company and Ford Motor Credit Company (incorporated herein by reference
to Exhibit 10.10 to the Registration Statement on Form S-4 of Triad
Financial Corporation, filed on July 12, 2005 (File No. 333-126538)).10.15
    
    Carl B. Webb Compensation Arrangement (incorporated herein by reference
to Exhibit 10.11 to the Registration Statement on Form S-4 of Triad
Financial Corporation, filed on July 12, 2005 (File No. 333-126538)).*10.16
    
    Amendment No. 2, dated as of March 15, 2007, to the Warehouse Lending
Agreement, dated as of April 29, 2005, among the Company, Triad
Financial Warehouse Special Purpose LLC, Triad Automobile Receivables
Warehouse Trust, The Bank of New York (as successor-in-interest to
JPMorgan Chase Bank, N.A.), as Collection Account Bank, and Citigroup
Global Markets Realty Corp., as lender (incorporated herein by reference
to Exhibit 10.1 on Form 8-K of Triad Financial Corporation, filed on
March 20, 2007 (File No. 333-65107)).10.17
    
    Amendment No. 1, dated as of March 15, 2007, to the Master Residual Loan
Agreement, dated as of April 29, 2005, among Triad Financial Residual
Special Purpose LLC, The Bank of New York (as successor-in-interest to
JPMorgan Chase Bank, N.A.), as Collection Account Bank, and Citigroup
Global Markets Realty Corp (incorporated herein by reference to
Exhibit 10.2 on Form 8-K of Triad Financial Corporation, filed on
March 20, 2007 (File No. 333-65107)).21.1
    
    Subsidiaries of the Company (incorporated herein by reference to
Exhibit 21.1 to the Registration Statement on Form S-4 of Triad
Financial Corporation, filed on July 12, 2005 (File No. 333-126538)).31.1
    
    Certification of Chief Executive Officer (Section 302 Certification)+31.2
    
    Certification of Principal Financial Officer (Section 302 Certification)+32.
    
    Certification of Periodic Financial Report (Section 906 Certification)+
 
 *
    
    Management contract or compensatory plan or arrangement.+
    
    Filed herewith