##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 
 (Mark one)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2008
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission
file number: 333-65107
 
 TRIAD FINANCIAL CORPORATION
 (Exact name of registrant as specified in its charter)
 
 California(State of Incorporation)
    
    33-0356705(IRS Employer Identification No)7711 Center Avenue, Suite 200
Huntington Beach, California(Address of principal executive offices)
    
    92647(Zip Code)
 (714) 373-8300  (Registrants telephone number, including area code)
 
 þ o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 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 OPERATIONS
    
    
    3CONSOLIDATED STATEMENTS OF CASH FLOWS
    
    
    4NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    
    
    5ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
    
    
    24ITEM 3.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    41ITEM 4.
    
    CONTROLS AND PROCEDURES
    
    
    42PART II
    
    OTHER INFORMATIONITEM 1.
    
    LEGAL PROCEEDINGS
    
    
    42ITEM 1A.
    
    RISK FACTORS
    
    
    43ITEM 2.
    
    UNREGISTERED SALES OF EQUITY SECUITIES AND USE OF PROCEEDS
    
    
    43ITEM 3.
    
    DEFAULTS UPON SENIOR SECURITIES
    
    
    43ITEM 4.
    
    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    43ITEM 5.
    
    OTHER INFORMATION
    
    
    43ITEM 6.
    
    EXHIBITS
    
    
    44SIGNATURES
    
    
    47EX-31.1EX-31.2EX-32.1




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Forward-Looking Statements
  
    
    our ability to make payments of principal and interest on our indebtedness;
    
    our reliance on our residual borrowing facility 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;
    
    changes in the delinquency, default and loss rates on the receivables included in each
securitization trust;
    
    the high degree of risk associated with non-prime borrowers;
    
    our inability to successfully implement our plan to offer loan servicing options to
third parties who own portfolios of loans secured by motor vehicles or similar collateral;
    
    our ability to attract and retain qualified personnel to service our existing portfolio
and to oversee the operation of our business as we begin to transition into third-party
servicing; and
    
    our ability to obtain and 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
 September 30, 2008
    
    
    December 31, 2007(Unaudited)(Dollars in thousands)ASSETSCash and cash equivalents
    
    $
    93,198
    
    
    $
    52,505Cash  restricted
    
    
    259,785
    
    
    
    295,786Finance receivables held for investment, net
    
    
    2,237,370
    
    
    
    3,514,979Retained interest in securitized assets, net
    
    
    
    
    
    
    10,916Accounts receivable, net
    
    
    31,401
    
    
    
    46,965Fixed assets, net of accumulated depreciation of $27,352 in
2008 and $23,235 in 2007
    
    
    9,150
    
    
    
    15,222Collateral held for resale, net
    
    
    19,770
    
    
    
    29,383Capitalized financing costs, net of accumulated amortization
of $17,206 in 2008 and $13,369 in 2007
    
    
    7,460
    
    
    
    11,532Deferred tax asset, net
    
    
    39,563
    
    
    
    89,028Goodwill
    
    
    
    
    
    
    30,446Taxes receivable
    
    
    11,222
    
    
    
    8,054Other assets
    
    
    5,624
    
    
    
    2,736Total assets
    
    $
    2,714,543
    
    
    $
    4,107,552LIABILITIES AND STOCKHOLDERS EQUITYLiabilitiesRevolving credit facilities
    
    $
    
    
    
    $
    334,390Securitization notes payable
    
    
    2,246,053
    
    
    
    3,195,489Senior notes payable
    
    
    149,330
    
    
    
    149,256Other liabilities
    
    
    62,354
    
    
    
    71,826Total liabilities
    
    
    2,457,737
    
    
    
    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 September 30, 2008 and
December 31, 2007
    
    
    
    
    
    
    Additional paid in capital
    
    
    345,000
    
    
    
    345,000Retained (deficit) earnings
    
    
    (88,194
    )
    
    
    9,690Accumulated other comprehensive income
    
    
    
    
    
    
    1,901Total stockholders equity
    
    
    256,806
    
    
    
    356,591Total liabilities and stockholders equity
    
    $
    2,714,543
    
    
    $
    4,107,552
  2




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TRIAD FINANCIAL CORPORATION
 
 Consolidated Statements of Operations
 Three Months
    
    
    Three Months
    
    
    Nine Months
    
    
    Nine MonthsEnded
    
    
    Ended
    
    
    Ended
    
    
    EndedSeptember 30, 2008
    
    
    September 30, 2007
    
    
    September 30, 2008
    
    
    September 30, 2007(Dollars in thousands)(Unaudited)Financing and other interest income
    
    $
    102,196
    
    
    $
    155,264
    
    
    $
    371,436
    
    
    $
    474,968Interest expense
    
    
    36,913
    
    
    
    54,771
    
    
    
    136,380
    
    
    
    165,345Net interest margin
    
    
    65,283
    
    
    
    100,493
    
    
    
    235,056
    
    
    
    309,623Provision for credit losses
    
    
    87,361
    
    
    
    70,146
    
    
    
    175,443
    
    
    
    193,001Net interest margin after
provision for credit losses
    
    
    (22,078
    )
    
    
    30,347
    
    
    
    59,613
    
    
    
    116,622Servicing income
    
    
    1,179
    
    
    
    1,754
    
    
    
    3,192
    
    
    
    6,802Other income (expense)
    
    
    8,173
    
    
    
    (3,045
    )
    
    
    10,927
    
    
    
    6,507Total other revenues
    
    
    9,352
    
    
    
    (1,291
    )
    
    
    14,119
    
    
    
    13,309Operating expenses:Compensation and employee benefits
    
    
    16,905
    
    
    
    21,487
    
    
    
    63,028
    
    
    
    65,144Occupancy and equipment
    
    
    2,941
    
    
    
    4,081
    
    
    
    15,943
    
    
    
    12,130Systems and data processing
    
    
    2,533
    
    
    
    3,333
    
    
    
    8,714
    
    
    
    9,961Professional services
    
    
    1,356
    
    
    
    2,020
    
    
    
    7,534
    
    
    
    4,627Advertising
    
    
    1,111
    
    
    
    1,106
    
    
    
    3,721
    
    
    
    3,028Telecommunications
    
    
    628
    
    
    
    954
    
    
    
    2,364
    
    
    
    2,772Impairment charge on goodwill
    
    
    
    
    
    
    
    
    
    
    30,446
    
    
    
    Other
    
    
    2,402
    
    
    
    3,700
    
    
    
    8,720
    
    
    
    10,225Total operating expenses
    
    
    27,876
    
    
    
    36,681
    
    
    
    140,470
    
    
    
    107,887(Loss) income before income taxes
    
    
    (40,602
    )
    
    
    (7,625
    )
    
    
    (66,738
    )
    
    
    22,044Benefit (provision) for income taxes
    
    
    (9,612
    )
    
    
    2,952
    
    
    
    (31,146
    )
    
    
    (9,088
    )Net (loss) income
    
    $
    (50,214
    )
    
    $
    (4,673
    )
    
    $
    (97,884
    )
    
    $
    12,956
  3




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TRIAD FINANCIAL CORPORATION
 
 Consolidated Statements of Cash Flows
 Nine Months Ended
    
    
    Nine Months EndedSeptember 30, 2008
    
    
    September 30, 2007(Dollars in thousands)(Unaudited)Cash flows from operating activitiesNet (loss) income
    
    $
    (97,884
    )
    
    $
    12,956Adjustments to reconcile net (loss) income to
net cash provided by operating activities:Depreciation and amortization
    
    
    16,026
    
    
    
    21,171Provision for credit losses
    
    
    175,443
    
    
    
    193,001Deferred income tax expense (benefit)
    
    
    50,705
    
    
    
    (19,326
    )Impairment of goodwill
    
    
    30,446
    
    
    
    Accretion of present value discount
    
    
    (4,410
    )
    
    
    (15,270
    )Amortization of purchase premium
    
    
    11,907
    
    
    
    24,222Loss on repurchase of receivables from gain
on sale trusts
    
    
    3,040
    
    
    
    2,864Loss on write-down of fixed assets
    
    
    3,375
    
    
    
    Loss on sale of receivables
    
    
    762
    
    
    
    Changes in operating assets and liabilities
Accounts receivable
    
    
    10,304
    
    
    
    5,919Other assets
    
    
    (2,888
    )
    
    
    (653
    )Other liabilities
    
    
    (9,473
    )
    
    
    1,403Current tax receivable/payable
    
    
    (3,168
    )
    
    
    1,811Net cash provided by operating activities
    
    
    184,185
    
    
    
    228,098Cash flows from investing activitiesDistributions from gain on sale trusts
    
    
    28,032
    
    
    
    71,242Payments to Ford Motor Credit
    
    
    (15,665
    )
    
    
    Repurchases from gain on sale trusts
    
    
    (69,746
    )
    
    
    (93,712
    )Purchases of finance receivables held for
investment
    
    
    (352,017
    )
    
    
    (1,054,897
    )Sale of finance receivables
    
    
    615,263
    
    
    
    Collections on finance receivables held for
investment
    
    
    901,843
    
    
    
    1,130,180Change in restricted cash
    
    
    36,001
    
    
    
    (11,277
    )Purchases of fixed assets
    
    
    (2,524
    )
    
    
    (2,788
    )Net cash provided by investing activities
    
    
    1,141,187
    
    
    
    38,748Cash flows from financing activitiesNet change in warehouse credit facilities
    
    
    (280,390
    )
    
    
    127,828Net change in residual credit facilities
    
    
    (54,000
    )
    
    
    (57,000
    )Issuance of securitization notes
    
    
    
    
    
    
    775,100Payment on securitization notes
    
    
    (949,436
    )
    
    
    (1,084,679
    )Capitalized finance costs
    
    
    (853
    )
    
    
    (2,508
    )Redemption of preferred stock
    
    
    
    
    
    
    (30,000
    )Net cash used in financing activities
    
    
    (1,284,679
    )
    
    
    (271,259
    )Net increase (decrease) in cash and cash
equivalents
    
    
    40,693
    
    
    
    (4,413
    )Cash and cash equivalentsBeginning of period
    
    
    52,505
    
    
    
    60,367End of period
    
    $
    93,198
    
    
    $
    55,954Non-cash ActivityPreferred Stock dividend declared
    
    $
    
    
    
    $
    788Supplemental DisclosureInterest paid
    
    $
    141,263
    
    
    $
    165,775Income taxes (received) paid
    
    $
    (17,328
    )
    
    $
    26,603
  4




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Triad Financial Corporation
 
 Notes to Consolidated Financial Statements
 1. Organization and Nature of Business
         5




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2. Accounting Policies
 Basis of Presentation
    Cash Equivalents
  Restricted Cash
  Finance Receivables
    Sale of Receivables
  6




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Allowance for Credit Losses
   Charge-Off Policy
  Derivative Financial Instruments
 ,
 7




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Fair Value Disclosures
    
 
 
  8




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Fair Value Measurement at September 30, 2008Level 1
    
    Level 2
    
    Level 3
    
    Total FairInputs
    
    Inputs
    
    Inputs
    
    Value(Dollars in thousands)Derivative financial instruments
    
    $
    
    
    
    $
    (10,850
    )
    
    $
    
    
    
    $
    (10,850
    )
  Fixed Assets
   Equipment
    
    3-5 yearsSoftware
    
    3-5 yearsFurniture and fixtures
    
    5 years
    Goodwill
  9




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Income Taxes
    Stock-Based Compensation
  Use of Estimates
  10




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3. Finance Receivables
  2008
    
    
    2007(Dollars in thousands)Finance receivables held for investment
    
    $
    2,074,971
    
    
    $
    3,124,036Premiums and discounts, net
    
    
    (2,586
    )
    
    
    (3,592
    )Deferred costs, net
    
    
    16,960
    
    
    
    25,767Finance receivables held for investment, gross
    
    
    2,089,345
    
    
    
    3,146,211Allowance for credit losses
    
    
    (192,011
    )
    
    
    (230,500
    )Finance receivables held for investment, net
    
    
    1,897,334
    
    
    
    2,915,711Predecessor finance receivables held for investment, net
    
    
    292,407
    
    
    
    475,296Finance receivables repurchased from gain on sale trusts, net
    
    
    47,629
    
    
    
    123,972Finance receivables, net
    
    $
    2,237,370
    
    
    $
    3,514,979
    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
    
    
    (49,174
    )
    
    
    
    
    
    
    (49,174
    )
    
    
    36,245
    
    
    
    (12,929
    )Sale of receivables
    
    
    (375
    )
    
    
    48
    
    
    
    (327
    )
    
    
    (15
    )
    
    
    (342
    )Principal collections
    
    
    (169,618
    )
    
    
    
    
    
    
    (169,618
    )
    
    
    
    
    
    
    (169,618
    )Charge-offs, net of sales proceeds and recoveries
    
    
    (26,256
    )
    
    
    26,256
    
    
    
    
    
    
    
    
    
    
    
    Reclassifications
    
    
    
    
    
    
    20,829
    
    
    
    20,829
    
    
    
    (20,829
    )
    
    
    Change in cash flows
    
    
    (8,661
    )
    
    
    8,661
    
    
    
    
    
    
    
    
    
    
    
    Balance, September 30, 2008
    
    $
    385,770
    
    
    $
    (49,597
    )
    
    $
    336,173
    
    
    $
    (43,766
    )
    
    $
    292,407
 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
    
    
    (89,280
    )
    
    
    
    
    
    
    (89,280
    )
    
    
    67,473
    
    
    
    (21,807
    )Principal collections
    
    
    (276,081
    )
    
    
    
    
    
    
    (276,081
    )
    
    
    
    
    
    
    (276,081
    )Charge-offs, net of sales proceeds and recoveries
    
    
    (40,247
    )
    
    
    40,247
    
    
    
    
    
    
    
    
    
    
    
    Reclassifications
    
    
    
    
    
    
    1,838
    
    
    
    1,838
    
    
    
    (1,838
    )
    
    
    Change in cash flows
    
    
    (48,519
    )
    
    
    48,519
    
    
    
    
    
    
    
    
    
    
    
    Balance, September 30, 2007
    
    $
    792,709
    
    
    $
    (162,634
    )
    
    $
    630,075
    
    
    $
    (78,717
    )
    
    $
    551,358
 11




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Contractual
    
    
    Nonaccretable
    
    
    Expected
    
    
    Accretable
    
    
    CarryingPayments
    
    
    Discount
    
    
    Payments
    
    
    Discount
    
    
    Value(Dollars in thousands)Balance, December 31, 2007
    
    $
    145,125
    
    
    $
    (12,852
    )
    
    $
    132,273
    
    
    $
    (8,301
    )
    
    $
    123,972Finance receivables repurchased
    
    
    80,191
    
    
    
    (7,471
    )
    
    
    72,720
    
    
    
    (5,565
    )
    
    
    67,155Interest income
    
    
    (11,368
    )
    
    
    
    
    
    
    (11,368
    )
    
    
    12,390
    
    
    
    1,022Sale of receivables
    
    
    (66,005
    )
    
    
    6,578
    
    
    
    (59,427
    )
    
    
    4,525
    
    
    
    (54,902
    )Principal collections
    
    
    (89,618
    )
    
    
    
    
    
    
    (89,618
    )
    
    
    
    
    
    
    (89,618
    )Charge-offs, net of sales proceeds and recoveries
    
    
    (2,299
    )
    
    
    2,299
    
    
    
    
    
    
    
    
    
    
    
    Reclassifications
    
    
    
    
    
    
    8,162
    
    
    
    8,162
    
    
    
    (8,162
    )
    
    
    Change in cash flows
    
    
    (2
    )
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    Balance, September 30, 2008
    
    $
    56,024
    
    
    $
    (3,282
    )
    
    $
    52,742
    
    
    $
    (5,113
    )
    
    $
    47,629
 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
    
    
    (12,776
    )
    
    
    
    
    
    
    (12,776
    )
    
    
    10,362
    
    
    
    (2,414
    )Principal collections
    
    
    (88,353
    )
    
    
    
    
    
    
    (88,353
    )
    
    
    
    
    
    
    (88,353
    )Charge-offs, net of sales proceeds and recoveries
    
    
    (3,878
    )
    
    
    3,878
    
    
    
    
    
    
    
    
    
    
    
    Reclassifications
    
    
    
    
    
    
    5,172
    
    
    
    5,172
    
    
    
    (5,172
    )
    
    
    Change in cash flows
    
    
    2,676
    
    
    
    (2,676
    )
    
    
    
    
    
    
    
    
    
    
    Balance, September 30, 2007
    
    $
    71,417
    
    
    $
    (5,774
    )
    
    $
    65,643
    
    
    $
    (4,262
    )
    
    $
    61,381
  4. Allowance For Credit Losses
  Three Months Ended
    
    
    Three Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007(Dollars in thousands)Balance, beginning of period
    
    $
    169,840
    
    
    $
    219,501Provision for credit losses
    
    
    87,361
    
    
    
    70,146Charge-offs
    
    
    (73,364
    )
    
    
    (73,566
    )Recoveries
    
    
    8,174
    
    
    
    6,446Balance, end of period
    
    $
    192,011
    
    
    $
    222,527
 Nine Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007(Dollars in thousands)Balance, beginning of period
    
    $
    230,500
    
    
    $
    195,000Receivables sold
    
    
    (22,504
    )
    
    
    Provision for credit losses
    
    
    175,443
    
    
    
    193,001Charge-offs
    
    
    (219,019
    )
    
    
    (183,412
    )Recoveries
    
    
    27,591
    
    
    
    17,938Balance, end of period
    
    $
    192,011
    
    
    $
    222,527
 12




---



##### Table of Contents



5. Sales of Receivables
 Servicing Portfolio
  Three Months
    
    
    Three MonthsEnded
    
    
    EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007(Dollars in thousands)Balance, beginning of period
    
    $
    
    
    
    $
    269,908Receivables called
    
    
    
    
    
    
    Collections and charge-offs.
    
    
    
    
    
    
    (47,034
    )Balance, end of period
    
    $
    
    
    
    $
    222,874
 Nine Months
    
    
    Nine MonthsEnded
    
    
    EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007(Dollars in thousands)Balance, beginning of period
    
    $
    94,097
    
    
    $
    484,818Receivables called
    
    
    (69,746
    )
    
    
    (93,712
    )Collections and charge-offs.
    
    
    (24,351
    )
    
    
    (168,232
    )Balance, end of period
    
    $
    
    
    
    $
    222,874
   13




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##### Table of Contents



Retained Interest in Securitized Assets
  2008
    
    
    2007(Dollars in thousands)Restricted cash held for the benefit of securitizations
    
    $
    
    
    
    $
    14,731Overcollaterization receivable
    
    
    
    
    
    
    12,233Interest-only
    
    
    
    
    
    
    (447
    )Retained interest in securitized assets, gross
    
    
    
    
    
    
    26,517Payable to Ford Credit
    
    
    
    
    
    
    (15,601
    )Retained interest in securitized assets, net
    
    $
    
    
    
    $
    10,916
    14




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##### Table of Contents



Retained
    
    
    
    
    
    
    RetainedInterest in
    
    
    
    
    
    
    Interest inRestricted
    
    
    Over-
    
    
    Interest-
    
    
    Securitized
    
    
    Payable to
    
    
    SecuritizedCash
    
    
    Collateralization
    
    
    Only
    
    
    Assets, Gross
    
    
    Ford 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 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
    )
    
    $
    10,964Distributions
    
    
    (14,731
    )
    
    
    (9,833
    )
    
    
    (1,240
    )
    
    
    (25,804
    )
    
    
    
    
    
    
    (25,804
    )Residual interest income
    
    
    
    
    
    
    
    
    
    
    3,357
    
    
    
    3,357
    
    
    
    
    
    
    
    3,357Realized gains (losses)
    
    
    
    
    
    
    
    
    
    
    363
    
    
    
    363
    
    
    
    (182
    )
    
    
    181Unrealized losses
    
    
    
    
    
    
    
    
    
    
    (3,022
    )
    
    
    (3,022
    )
    
    
    
    
    
    
    (3,022
    )Payment to Ford Credit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,170
    
    
    
    13,170Transfer to other liabilities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,154
    
    
    
    1,154Balance, June 30, 2008
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
 Retained
    
    
    
    
    
    
    RetainedInterest in
    
    
    
    
    
    
    Interest inRestricted
    
    
    Over-
    
    
    
    
    
    
    Securitized
    
    
    Payable to
    
    
    SecuritizedCash
    
    
    Collateralization
    
    
    Interest- Only
    
    
    Assets, Gross
    
    
    Ford Credit
    
    
    Assets, Net(Dollars in thousands)Balance, 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 losses )
    
    
    
    
    
    
    
    
    
    
    (1,797
    )
    
    
    (1,797
    )
    
    
    (589
    )
    
    
    (2,386
    )Balance, March 31, 2007
    
    $
    35,225
    
    
    $
    41,935
    
    
    $
    1,502
    
    
    $
    78,662
    
    
    $
    (21,519
    )
    
    $
    57,143Distributions
    
    
    
    
    
    
    (6,847
    )
    
    
    (6,009
    )
    
    
    (12,856
    )
    
    
    
    
    
    
    (12,856
    )Residual interest income
    
    
    
    
    
    
    
    
    
    
    5,056
    
    
    
    5,056
    
    
    
    (872
    )
    
    
    4,184Unrealized gains )
    
    
    
    
    
    
    
    
    
    
    197
    
    
    
    197
    
    
    
    (1,123
    )
    
    
    (926
    )Balance, June 30, 2007
    
    $
    35,225
    
    
    $
    35,088
    
    
    $
    746
    
    
    $
    71,059
    
    
    $
    (23,514
    )
    
    $
    47,545Distributions
    
    
    
    
    
    
    (6,114
    )
    
    
    (3,213
    )
    
    
    (9,327
    )
    
    
    
    
    
    
    (9,327
    )Residual interest income
    
    
    
    
    
    
    
    
    
    
    5,827
    
    
    
    5,827
    
    
    
    (953
    )
    
    
    4,874Unrealized gains )
    
    
    
    
    
    
    
    
    
    
    (1,936
    )
    
    
    (1,936
    )
    
    
    (570
    )
    
    
    (2,506
    )Balance, September 30, 2007
    
    $
    35,225
    
    
    $
    28,974
    
    
    $
    1,424
    
    
    $
    65,623
    
    
    $
    (25,037
    )
    
    $
    40,586
 15




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##### Table of Contents



6. Revolving Credit Facilities
  2008
    
    
    2007(Dollars in thousands)Warehouse loan facilities
    
    $
    
    
    
    $
    280,390Residual loan facility
    
    
    
    
    
    
    54,000Total revolving credit facilities
    
    $
    
    
    
    $
    334,390
        16




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##### Table of Contents



7. Securitization Notes Payable
  OriginalWeighted-
    
    
    Collateral
    
    
    NoteOriginal
    
    
    Average
    
    
    Pledged
    
    
    BalanceNote
    
    
    Interest
    
    
    at
    
    
    atTransaction
    
    Amount
    
    
    Rate
    
    
    September 30, 2008
    
    
    September 30, 2008(Dollars in thousands)2005-A, due June 12, 2012(a)
    
    $
    1,104,000
    
    
    
    4.09
    %
    
    $
    199,091
    
    
    $
    188,3462005-B, due April 12, 2013(a)
    
    
    905,303
    
    
    
    4.32
    %
    
    
    188,196
    
    
    
    177,0602006-A, due April 12, 2013(a)
    
    
    822,500
    
    
    
    4.88
    %
    
    
    259,583
    
    
    
    242,1542006-B, due November 12, 2012(a)
    
    
    915,500
    
    
    
    5.50
    %
    
    
    346,513
    
    
    
    320,7012006-C, due May 13, 2013(a)
    
    
    1,092,200
    
    
    
    5.37
    %
    
    
    496,983
    
    
    
    453,9842007-A, due February 12, 2014(a)
    
    
    775,110
    
    
    
    5.34
    %
    
    
    478,231
    
    
    
    429,8952007-B, due July 14, 2014(a)
    
    
    598,330
    
    
    
    5.70
    %
    
    
    491,196
    
    
    
    433,913$
    6,212,943
    
    
    
    
    
    
    $
    2,459,793
    
    
    $
    2,246,053
 
 (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.    17




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##### Table of Contents



8. Senior Notes Payable
    9. Preferred Stock
   10. Derivative Financial Instruments
  11. Income Taxes
  18




---



##### Table of Contents



12. Commitments and Contingencies
      19




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##### Table of Contents



(Dollars in thousands)Year ending December 31,2008
    
    $
    7812009
    
    $
    3,3312010
    
    $
    3,4092011
    
    $
    2,4882012
    
    $
    2,112
 13. Comprehensive Income
  Nine Months
    
    
    Nine MonthsEnded
    
    
    EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007(Dollars in thousands)Net (loss) income
    
    $
    (97,884
    )
    
    $
    12,956Other comprehensive income (loss), netUnrealized holding (loss) gains on available
for sale securities (net of tax of $45 and
$902)
    
    
    (73
    )
    
    
    1,380Net unrealized holding gains reclassified into
earnings (net of tax of $1,194 and $3,199)
    
    
    (1,828
    )
    
    
    (4,899
    )Total other comprehensive loss, net
    
    
    (1,901
    )
    
    
    (3,519
    )Comprehensive (loss) income
    
    $
    (99,785
    )
    
    $
    9,437
  Nine Months
    
    
    Nine MonthsEnded
    
    
    EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007(Dollars in thousands)Balance, beginning of period
    
    $
    1,901
    
    
    $
    9,084Current period change
    
    
    (1,901
    )
    
    
    (3,519
    )Balance, end of period
    
    $
    
    
    
    $
    5,565
 14. Stock-Based Compensation
   20




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##### Table of Contents



Weighted-AverageExerciseShares
    
    
    Price(Amounts in thousands exceptweighted-averageexercise price )Outstanding at June 30, 2008
    
    
    2,317
    
    
    $
    7.72Canceled
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    Outstanding at September 30, 2008
    
    
    2,317
    
    
    $
    7.72Outstanding at December 31, 2007
    
    
    2,867
    
    
    $
    7.68Canceled
    
    
    (322
    )
    
    
    7.52Forfeited
    
    
    (228
    )
    
    
    7.52Outstanding at September 30, 2008
    
    
    2,317
    
    
    $
    7.72Exercisable at September 30, 2008
    
    
    1,547
    
    
    $
    7.65Weighted-average remaining contractual life in years
    
    
    
    
    
    
    7.34Outstanding at June 30, 2007
    
    
    2,975
    
    
    $
    7.63Granted
    
    
    112
    
    
    
    8.46Canceled
    
    
    (142
    )
    
    
    7.54Forfeited
    
    
    (114
    )
    
    
    7.57Outstanding at September 30, 2007
    
    
    2,831
    
    
    $
    7.67Outstanding at December 31, 2006.
    
    
    2,988
    
    
    $
    7.58Granted
    
    
    324
    
    
    
    8.36Canceled
    
    
    (217
    )
    
    
    7.54Forfeited
    
    
    (264
    )
    
    
    7.58Outstanding at September 30, 2007
    
    
    2,831
    
    
    $
    7.67
 21




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##### Table of Contents



15.
    
    Revised Quarterly Financial Data
   Three months Ended September 30, 2007
    
    
    Nine months Ended September 30, 2007Reported
    
    
    Adjustment
    
    
    Revised
    
    
    Reported
    
    
    Adjustment
    
    
    Revised(Dollars in thousands)Financing and other interest income.
    
    $
    155,264
    
    
    $
    
    
    
    $
    155,264
    
    
    $
    474,968
    
    
    $
    
    
    
    $
    474,968Interest expense
    
    
    54,771
    
    
    
    
    
    
    
    54,771
    
    
    
    165,345
    
    
    
    
    
    
    
    165,345Net interest margin
    
    
    100,493
    
    
    
    
    
    
    
    100,493
    
    
    
    309,623
    
    
    
    
    
    
    
    309,623Provision for credit losses
    
    
    70,146
    
    
    
    
    
    
    
    70,146
    
    
    
    193,001
    
    
    
    
    
    
    
    193,001Net interest margin after provision
for credit losses
    
    
    30,347
    
    
    
    
    
    
    
    30,347
    
    
    
    116,622
    
    
    
    
    
    
    
    116,622Servicing income
    
    
    1,754
    
    
    
    
    
    
    
    1,754
    
    
    
    6,802
    
    
    
    
    
    
    
    6,802Other income (expense)
    
    
    573
    
    
    
    (3,618
    )
    
    
    (3,045
    )
    
    
    9,169
    
    
    
    (2,662
    )
    
    
    6,507Total other revenues
    
    
    2,327
    
    
    
    (3,618
    )
    
    
    (1,291
    )
    
    
    15,971
    
    
    
    (2,662
    )
    
    
    13,309Operating expensesCompensation and employee benefits.
    
    
    21,487
    
    
    
    
    
    
    
    21,487
    
    
    
    65,144
    
    
    
    
    
    
    
    65,144Occupancy and equipment
    
    
    4,081
    
    
    
    
    
    
    
    4,081
    
    
    
    12,130
    
    
    
    
    
    
    
    12,130System and data processing
    
    
    3,333
    
    
    
    
    
    
    
    3,333
    
    
    
    9,961
    
    
    
    
    
    
    
    9,961Professional services
    
    
    2,020
    
    
    
    
    
    
    
    2,020
    
    
    
    4,627
    
    
    
    
    
    
    
    4,627Telecommunications
    
    
    954
    
    
    
    
    
    
    
    954
    
    
    
    2,772
    
    
    
    
    
    
    
    2,772Advertising
    
    
    1,106
    
    
    
    
    
    
    
    1,106
    
    
    
    3,028
    
    
    
    
    
    
    
    3,028Other
    
    
    3,700
    
    
    
    
    
    
    
    3,700
    
    
    
    10,225
    
    
    
    
    
    
    
    10,225Total operating expenses
    
    $
    36,681
    
    
    $
    
    
    
    $
    36,681
    
    
    $
    107,887
    
    
    $
    
    
    
    $
    107,887Income (loss) before income taxes
    
    
    (4,007
    )
    
    
    (3,618
    )
    
    
    (7,625
    )
    
    
    24,706
    
    
    
    (2,662
    )
    
    
    22,044Benefit (provision) for income taxes
    
    
    1,538
    
    
    
    1,414
    
    
    
    2,952
    
    
    
    (10,128
    )
    
    
    1,040
    
    
    
    (9,088
    )Net income (loss)
    
    $
    (2,469
    )
    
    $
    (2,204
    )
    
    $
    (4,673
    )
    
    $
    14,578
    
    
    $
    (1,622
    )
    
    $
    12,956
 22




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##### Table of Contents



At September 30, 2007Reported
    
    
    Adjustment
    
    
    Revised(Dollars in thousands)AssetsCash and cash equivalents
    
    $
    55,954
    
    
    $
    
    
    
    $
    55,954Cash  restricted
    
    
    285,336
    
    
    
    
    
    
    
    285,336Finance receivables held
for investment, net
    
    
    3,570,251
    
    
    
    
    
    
    
    3,570,251Retained interest in
securitized assets, net
    
    
    40,586
    
    
    
    
    
    
    
    40,586Account receivable, net
    
    
    44,999
    
    
    
    
    
    
    
    44,999Fixed assets, net of
accumulated depreciation
    
    
    14,803
    
    
    
    
    
    
    
    14,803Collateral held for resale
    
    
    19,148
    
    
    
    
    
    
    
    19,148Capitalized financing
costs, net of accumulated
amortization
    
    
    11,094
    
    
    
    
    
    
    
    11,094Deferred tax assets, net
    
    
    84,315
    
    
    
    1,040
    
    
    
    85,355Goodwill
    
    
    30,446
    
    
    
    
    
    
    
    30,446Other assets
    
    
    3,483
    
    
    
    
    
    
    
    3,483Total assets
    
    $
    4,160,415
    
    
    $
    1,040
    
    
    $
    4,161,455LiabilitiesRevolving credit facilities.
    
    
    599,959
    
    
    
    
    
    
    
    599,959Securitization notes payable
    
    
    2,948,636
    
    
    
    
    
    
    
    2,948,636Senior notes payable
    
    
    149,233
    
    
    
    
    
    
    
    149,233Taxes payable
    
    
    5,310
    
    
    
    
    
    
    
    5,310Other liabilities
    
    
    70,846
    
    
    
    2,662
    
    
    
    73,508Total liabilities
    
    
    3,773,984
    
    
    
    2,662
    
    
    
    3,776,646Stockholders EquityCommon stock
    
    
    
    
    
    
    
    
    
    
    Additional paid-in-capital
    
    
    345,000
    
    
    
    
    
    
    
    345,000Retained earnings
    
    
    35,866
    
    
    
    (1,622
    )
    
    
    34,244Accumulated other
comprehensive earnings
    
    
    5,565
    
    
    
    
    
    
    
    5,565Total stockholders equity.
    
    
    386,431
    
    
    
    (1,622
    )
    
    
    384,809Total liabilities and
stockholders equity
    
    $
    4,160,415
    
    
    $
    1,040
    
    
    $
    4,161,455
 23




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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
      24




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##### Table of Contents



Critical Accounting Policies and Use of Estimates
  25




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##### Table of Contents



Components of Revenues and Expenses
   Results of Operations
 Three Months Ended September 30, 2008 as Compared to Three Months Ended September 30, 2007
  Net Interest Margin
  For the Three Months EndedSeptember 30,2008
    
    
    2007(Dollars in thousands)Average owned finance receivables, carrying value
    
    $
    2,565,002
    
    
    $
    3,809,512
   26




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##### Table of Contents



For the Three Months EndedSeptember 30,2008
    
    
    2007(Dollars in thousands)Financing income
    
    $
    100,306
    
    
    $
    146,925Other interest income
    
    
    1,890
    
    
    
    8,339Interest expense
    
    
    (36,913
    )
    
    
    (54,771
    )Net interest margin
    
    $
    65,283
    
    
    $
    100,493Annualized financing income as a
percentage of average owned finance
receivables
    
    
    15.6
    %
    
    
    15.4
    %
      Provision for Credit Losses
  27




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##### Table of Contents



Servicing Income
  Other Income (Expense)
  For the Three Months EndedSeptember 30,2008
    
    
    2007(Dollars in thousands)Customer fees
    
    $
    3,354
    
    
    $
    4,585Gains (losses) on derivative financial instruments
    
    
    563
    
    
    
    (7,913
    )Other
    
    
    4,256
    
    
    
    283Other income (expense)
    
    $
    8,173
    
    
    $
    (3,045
    )
     Expenses
   28




---



##### Table of Contents



Income Taxes
  Nine Months Ended September 30, 2008 as Compared to Nine Months Ended September 30, 2007
   
    
    $57.5 million charge to establish valuation allowance against our gross deferred tax
assets;
    
    $30.4 million goodwill impairment charge;
    
    $9.2 million of expense related to shutdown of the Indirect (Dealer) originations
channel;
    
    $3.7 million of expense related to sale of the Direct originations channel;
    
    $2.9 million in losses on our derivative financial instruments;
    
    $2.1 million of legal and professional fees related to terminating our warehouse and
residual lending facilities and establishing alternative funding sources; and
    
    $0.8 million loss on sale of a $632 million portfolio of loans.
 Net Interest Margin
  For the Nine Months EndedSeptember 30,2008
    
    
    2007(Dollars in thousands)Average owned finance receivables, carrying value
    
    $
    3,113,585
    
    
    $
    3,874,214
   29




---



##### Table of Contents



For the Nine Months EndedSeptember 30,2008
    
    
    2007(Dollars in thousands)Financing income
    
    $
    360,415
    
    
    $
    449,729Other interest income
    
    
    11,021
    
    
    
    25,239Interest expense
    
    
    (136,380
    )
    
    
    (165,345
    )Net interest margin
    
    $
    235,056
    
    
    $
    309,623Annualized financing income as a
percentage of average owned finance
receivables
    
    
    15.4
    %
    
    
    15.5
    %
      Provision for Credit Losses
  30




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##### Table of Contents



Servicing Income
  Other Income (Expense)
  For the Nine Months EndedSeptember 30,2008
    
    
    2007(Dollars in thousands)Customer fees
    
    $
    11,609
    
    
    $
    15,118Losses on derivative financial instruments
    
    
    (2,904
    )
    
    
    (6,739
    )Other
    
    
    2,222
    
    
    
    (1,872
    )Other income (expense)
    
    $
    10,927
    
    
    $
    6,507
     Expenses
  31




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##### Table of Contents




    
    $5.4 million charge to compensation and employee benefits representing severance
payments to employees impacted by the shutdown of the Indirect (Dealer) origination
channel and sale of the Direct originations channel;
    
    $3.4 million charge to occupancy and equipment representing the write-off of certain
fixed assets as a result of the shutdown of the Indirect (Dealer) originations channel
and sale of Direct originations channel;
    
    $2.6 million charge to occupancy and equipment representing an accrual for future
excess facility capacity resulting from the shutdown of the Indirect (Dealer)
originations channel and the sale of $632 million of receivables;
    
    $2.1 million charge to professional services representing legal and professional
fees incurred in the termination of existing warehouse and residual lending facilities
and the establishment of alternative funding sources;
    
    $30.4 million goodwill impairment charge; and
    
    $1.5 million charge to other expenses representing the write-off of certain other
assets as a result of the shutdown of the Indirect (Dealer) originations channel and
sale of the Direct originations channel.
 Income Taxes
  Credit Quality
    At September 30,
    
    
    At December 31,2008
    
    
    2007(Dollars in thousands)Finance receivables held for investment
    
    $
    2,074,971
    
    
    $
    3,124,036Allowance for credit losses
    
    
    (192,011
    )
    
    
    (230,500
    )Finance receivables held for investment, net of allowance
    
    
    1,882,960
    
    
    
    2,893,536Allowance for credit losses as a percentage of receivables
    
    
    9.3
    %
    
    
    7.4
    %Predecessor finance receivables held for investment, net
    
    
    292,407
    
    
    
    475,296Finance receivables repurchased from gain on sale trusts, net
    
    
    47,629
    
    
    
    123,972Total owned finance receivables held for investment, net
    
    $
    2,222,996
    
    
    $
    3,492,804
 32




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##### Table of Contents



At September 30,
    
    
    At December 31,2008
    
    
    2007Amount
    
    
    Percent
    
    
    Amount
    
    
    Percent(Dollars in thousands)Delinquent contracts:31 to 60 days
    
    $
    289,524
    
    
    
    11.8
    %
    
    $
    377,862
    
    
    
    10.0
    %Greater than 60 days
    
    
    99,399
    
    
    
    4.1
    
    
    
    156,036
    
    
    
    4.1388,923
    
    
    
    15.9
    
    
    
    533,898
    
    
    
    14.1In repossession
    
    
    19,770
    
    
    
    0.8
    
    
    
    29,383
    
    
    
    0.8$
    408,693
    
    
    
    16.7
    %
    
    $
    563,281
    
    
    
    14.9
    %
     At September 30,
    
    At December 31,2008
    
    2007Percent
    
    PercentNever extended.
    
    
    55.3
    %
    
    
    73.2
    %Extended:1-2 times
    
    
    43.1
    %
    
    
    26.1
    %3-4 times
    
    
    1.6
    %
    
    
    0.7
    %Total extended
    
    
    44.7
    %
    
    
    26.8
    %Total
    
    
    100.0
    %
    
    
    100.0
    %
  33




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##### Table of Contents



For the Three Months EndedSeptember 30,2008
    
    
    2007(Dollars in thousands)Repossession charge-offs
    
    $
    97,577
    
    
    $
    98,066Less: Sales proceeds and recoveries
    
    
    (50,689
    )
    
    
    (54,846
    )Mandatory charge-offs(1)
    
    
    26,846
    
    
    
    40,814Net charge-offs(2)
    
    $
    73,734
    
    
    $
    84,034Annualized net charge-offs as a percentage of average total
owned receivables outstanding
    
    
    11.5
    %
    
    
    8.8
    %Sales proceeds and recoveries as a percentage of charge-offs
    
    
    40.7
    %
    
    
    39.5
    %
 For the Nine Months EndedSeptember 30,2008
    
    
    2007(Dollars in thousands)Repossession charge-offs
    
    $
    314,208
    
    
    $
    279,875Less: Sales proceeds and recoveries
    
    
    (177,293
    )
    
    
    (171,767
    )Mandatory charge-offs(1)
    
    
    83,067
    
    
    
    101,491Net charge-offs(2)
    
    $
    219,982
    
    
    $
    209,599Annualized net charge-offs as a percentage of average total
owned receivables outstanding
    
    
    9.4
    %
    
    
    7.2
    %Sales proceeds and recoveries as a percentage of charge-offs
    
    
    44.6
    %
    
    
    45.0
    %
 
 (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.  34




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##### Table of Contents



Total Managed Information
     For the Three Months EndedSeptember 30,2008
    
    
    2007(Dollars in thousands)Average owned finance receivables, carrying value
    
    $
    2,565,002
    
    
    $
    3,809,512Average sold finance receivables
    
    
    
    
    
    
    245,637Average total managed finance receivables
    
    $
    2,565,002
    
    
    $
    4,055,149
 For the Nine Months EndedSeptember 30,2008
    
    
    2007(Dollars in thousands)Average owned finance receivables, carrying value
    
    $
    3,113,585
    
    
    $
    3,874,214Average sold finance receivables
    
    
    40,177
    
    
    
    314,420Average total managed finance receivables
    
    $
    3,153,762
    
    
    $
    4,188,634
 Total Managed Net Interest Margin
  For the Three Months EndedSeptember 30,2008
    
    
    2007(Dollars in thousands)Financing income and customer fees
    
    $
    104,481
    
    
    $
    161,541Interest expense
    
    
    (36,913
    )
    
    
    (59,667
    )Net interest margin
    
    $
    67,568
    
    
    $
    101,874
 35




---



##### Table of Contents



For the Nine Months EndedSeptember 30,2008
    
    
    2007(Dollars in thousands)Financing income and customer fees
    
    $
    388,469
    
    
    $
    520,686Interest expense
    
    
    (138,788
    )
    
    
    (174,935
    )Net interest margin
    
    $
    249,681
    
    
    $
    345,751
  For the Three Months EndedSeptember 30,2008
    
    
    2007(Dollars in thousands)Net margin as reflected on the consolidated statements of income
    
    $
    65,283
    
    
    $
    100,493Other interest income
    
    
    (1,890
    )
    
    
    (8,339
    )Financing revenue on sold receivables
    
    
    
    
    
    
    3,429Interest expense on sold receivables
    
    
    
    
    
    
    (601
    )Gains (losses) on forward starting swaps agreements
    
    
    
    
    
    
    (4,295
    )Premium amortization
    
    
    821
    
    
    
    6,602Customer fees
    
    
    3,354
    
    
    
    4,585Total managed net interest margin
    
    $
    67,568
    
    
    $
    101,874
 For the Nine Months EndedSeptember 30,2008
    
    
    2007(Dollars in thousands)Net margin as reflected on the consolidated statements of income
    
    $
    235,056
    
    
    $
    309,623Other interest income
    
    
    (11,021
    )
    
    
    (25,239
    )Financing revenue on sold receivables
    
    
    4,538
    
    
    
    31,617Interest expense on sold receivables
    
    
    (653
    )
    
    
    (5,513
    )Gains (losses) on forward starting swaps agreements
    
    
    (1,755
    )
    
    
    (4,077
    )Premium amortization
    
    
    11,907
    
    
    
    24,222Customer fees
    
    
    11,609
    
    
    
    15,118Total managed net interest margin
    
    $
    249,681
    
    
    $
    345,751
  For the Three MonthsEndedSeptember 30,2008
    
    
    2007Annualized finance income and customer fees
    
    
    16.3
    %
    
    
    15.9
    %Annualized interest expense
    
    
    (5.8
    )
    
    
    (5.9
    )Annualized net interest margin as a percentage of average total managed receivables
    
    
    10.5
    %
    
    
    10.0
    %
 For the Nine MonthsEndedSeptember 30,2008
    
    
    2007Annualized finance income and customer fees
    
    
    16.4
    %
    
    
    16.6
    %Annualized interest expense
    
    
    (5.8
    )
    
    
    (5.6
    )Annualized net interest margin as a percentage of average total managed receivables
    
    
    10.6
    %
    
    
    11.0
    %
 36




---



##### Table of Contents



Total Managed Credit Quality
  At September 30, 2008Owned
    
    
    Sold
    
    
    Total Managed(Dollars in thousands)Owned finance receivables, unpaid principal balance
    
    $
    2,449,465
    
    
    $
    
    
    
    $
    2,449,465Sold finance receivables
    
    
    
    
    
    
    
    
    
    
    Total managed finance receivables
    
    $
    2,449,465
    
    
    $
    
    
    
    $
    2,449,465Number of outstanding contracts
    
    
    198,223
    
    
    
    
    
    
    
    198,223Average principal amount of outstanding contracts
(in dollars)
    
    $
    12,357
    
    
    $
    
    
    
    $
    12,357
 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
  At September 30, 2008Owned
    
    
    Sold
    
    
    Total ManagedDelinquent contracts:
    
    Amount
    
    
    Percent
    
    
    Amount
    
    
    Percent
    
    
    Amount
    
    
    Percent(Dollars in thousands)31 to 60 days
    
    $
    289,524
    
    
    
    11.8
    %
    
    $
    
    
    
    
    
    
    
    $
    289,524
    
    
    
    11.8
    %Greater than 60 days
    
    
    99,399
    
    
    
    4.1
    
    
    
    
    
    
    
    
    
    
    
    99,399
    
    
    
    4.1388,923
    
    
    
    15.9
    
    
    
    
    
    
    
    
    
    
    
    388,923
    
    
    
    15.9In repossession
    
    
    19,770
    
    
    
    0.8
    
    
    
    
    
    
    
    
    
    
    
    19,770
    
    
    
    0.8$
    408,693
    
    
    
    16.7
    %
    
    $
    
    
    
    
    
    
    
    $
    408,693
    
    
    
    16.7
    %
 At December 31, 2007Owned
    
    
    Sold
    
    
    Total ManagedDelinquent contracts:
    
    Amount
    
    
    Percent
    
    
    Amount
    
    
    Percent
    
    
    Amount
    
    
    Percent(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
    %
 37




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##### Table of Contents



At September 30, 2008Owned
    
    Sold
    
    Total ManagedNever extended.
    
    
    55.3
    %
    
    
    
    
    55.3
    %Extended:1-2 times.
    
    
    43.1
    %
    
    
    
    
    43.1
    %3-4 times.
    
    
    1.6
    %
    
    
    
    
    1.6
    %Total extended
    
    
    44.7
    %
    
    
    
    
    44.7
    %Total.
    
    
    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
    %
   38




---



##### Table of Contents



For the Three Months EndedSeptember 30,2008
    
    
    2007(Dollars in thousands)Owned:Repossession charge-offs
    
    $
    97,577
    
    
    $
    98,066Less: Sales proceeds and recoveries
    
    
    (50,689
    )
    
    
    (54,846
    )Mandatory charge-offs(1)
    
    
    26,846
    
    
    
    40,814Net charge-offs(2)
    
    $
    73,734
    
    
    $
    84,034Sold:Charge-offs
    
    $
    
    
    
    $
    11,019Less: Sales proceeds and recoveries
    
    
    
    
    
    
    (6,122
    )Mandatory charge-offs(1)
    
    
    
    
    
    
    Net charge-offs
    
    $
    
    
    
    $
    4,897Total Managed:Repossession charge-offs
    
    $
    97,577
    
    
    $
    109,085Less: Sales proceeds and recoveries
    
    
    (50,689
    )
    
    
    (60,968
    )Mandatory charge-offs(1)
    
    
    26,846
    
    
    
    40,814Net charge-offs
    
    $
    73,734
    
    
    $
    88,931Annualized net charge-offs as a percentage of average total
managed receivables outstanding
    
    
    11.5
    %
    
    
    8.8
    %Sales proceeds and recoveries as a percentage of charge-offs
    
    
    40.7
    %
    
    
    40.7
    %
 For the Nine Months EndedSeptember 30,2008
    
    
    2007(Dollars in thousands)Owned:Repossession charge-offs
    
    $
    314,208
    
    
    $
    279,875Less: Sales proceeds and recoveries
    
    
    (177,293
    )
    
    
    (171,767
    )Mandatory charge-offs(1)
    
    
    83,067
    
    
    
    101,491Net charge-offs(2)
    
    $
    219,982
    
    
    $
    209,599Sold:Charge-offs
    
    $
    5,537
    
    
    $
    34,152Less: Sales proceeds and recoveries
    
    
    (2,686
    )
    
    
    (18,654
    )Mandatory charge-offs(1)
    
    
    
    
    
    
    Net charge-offs
    
    $
    2,851
    
    
    $
    15,498Total Managed:Repossession charge-offs
    
    $
    319,745
    
    
    $
    314,027Less: Sales proceeds and recoveries
    
    
    (179,979
    )
    
    
    (190,421
    )Mandatory charge-offs(1)
    
    
    83,067
    
    
    
    101,491Net charge-offs
    
    $
    222,833
    
    
    $
    225,097Annualized net charge-offs as a percentage of average total
managed receivables outstanding
    
    
    9.4
    %
    
    
    7.2
    %Sales proceeds and recoveries as a percentage of charge-offs
    
    
    44.7
    %
    
    
    45.8
    %
 
 (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.  39




---



##### Table of Contents



Liquidity and Capital Resources
 General
      40




---



##### Table of Contents



Contractual and Long-Term Debt Obligations
  Securitizations
  Off-Balance Sheet Arrangements
  
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Interest Rate Risk
 General
  41




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##### Table of Contents



Borrowing and Residual Credit Facility
   Interest Rate Swap Agreements
  
 ITEM 4. CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
   Changes in Internal Control over Financial Reporting
  
 PART II. OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  42




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##### Table of Contents



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
  43




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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. 333-65107)) 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. 333-65107)). *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. 333-65107)). *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. 333-65107)). *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)).
 44




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##### Table of Contents



ExhibitNo.
    
    Description10.6
    
    
    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 Corporation, 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. 333-65107)).10.9
    
    
    Termination Agreement, dated as of May 30, 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 10.9 on Form 10-Q of Triad Financial Corporation, filed on
August 14, 2008 (File No. 333-65107)).10.10
    
    
    Termination Agreement, dated as of June 20, 2008, among the Company,
Triad Financial Residual Special Purpose LLC, as residual facility
borrower, Triad Automobile Receivables Warehouse Trust, as warehouse
facility borrower, Triad Financial Warehouse Special Purpose LLC, The
Bank of New York (as successor-in-interest to JPMorgan Chase Bank,
National Association), as Collection Account Bank, Systems and Services
Technologies, Inc., as a Backup Servicer, and Citigroup Global Markets
Realty Corp., as lender (incorporated herein by reference to
Exhibit 10.10 on Form 10-Q of Triad Financial Corporation, filed on
August 14, 2008 (File No. 333-65107)).10.11
    
    
    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)).10.12
    
    
    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)).10.13
    
    
    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)).10.14
    
    
    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)).10.15
    
    
    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)).10.16
    
    
    Amended and Restated Limited Liability Company Agreement of Triad
Holdings, LLC dated June 17, 2008 (incorporated herein by reference to
Exhibit 10.16 on Form 10-Q of Triad Financial Corporation, filed on
August 14, 2008 (File No. 333-65107)).10.17
    
    
    Senior Unsecured Demand Promissory Note dated as of May 11, 2008, by the
Company in favor of Hunters Glen/Ford Ltd (incorporated herein by
reference to Exhibit 10.17 on Form 10-Q of Triad Financial Corporation,
filed on August 14, 2008 (File No. 333-65107)).
 45




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##### Table of Contents



ExhibitNo.
    
    Description10.18
    
    
    Senior Unsecured Demand Promissory Note dated as of June 17, 2008, by
the Company in favor of Hunters Glen/Ford Ltd (incorporated herein by
reference to Exhibit 10.18 on Form 10-Q of Triad Financial Corporation,
filed on August 14, 2008 (File No. 333-65107)).10.19
    
    
    Senior Unsecured Demand Promissory Note dated as of June 17, 2008, by
the Company in favor of GTCR Fund VIII, L.P. , GTCR Fund VIII/B, L.P.
and GTCR Co-Invest II, L.P. (incorporated herein by reference to
Exhibit 10.19 on Form 10-Q of Triad Financial Corporation, filed on
August 14, 2008 (File No. 333-65107)).10.20
    
    
    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)).10.21
    
    
    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)).*10.22
    
    
    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)).10.23
    
    
    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 46




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##### Table of Contents



SIGNATURES
  Date: November 10, 2008
    /s/ Daniel D. LeonardDaniel D. LeonardPresident & Chief Executive OfficerDate: November 10, 2008
    /s/ Jeffrey O. ButcherJeffrey O. ButcherVice President & Chief Financial Officer 47




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##### Table of Contents



EXHIBIT INDEX
 ExhibitNumber
    
    Description of Document2.1
    
    
    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. 333-65107)) 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- 65107)). *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. 333-65107)). *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- 65107)). *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)).
 48




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##### Table of Contents



ExhibitNumber
    
    Description of Document10.6
    
    
    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 Corporation, 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. 333-65107)).10.9
    
    
    Termination Agreement, dated as of May 30, 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 10.9 on Form 10-Q of Triad Financial Corporation, filed on
August 14, 2008 (File No. 333-65107)).10.10
    
    
    Termination Agreement, dated as of June 20, 2008, among the Company,
Triad Financial Residual Special Purpose LLC, as residual facility
borrower, Triad Automobile Receivables Warehouse Trust, as warehouse
facility borrower, Triad Financial Warehouse Special Purpose LLC, The
Bank of New York (as successor-in-interest to JPMorgan Chase Bank,
National Association), as Collection Account Bank, Systems and Services
Technologies, Inc., as a Backup Servicer, and Citigroup Global Markets
Realty Corp., as lender (incorporated herein by reference to Exhibit
10.10 on Form 10-Q of Triad Financial Corporation, filed on August 14,
2008 (File No. 333-65107)).10.11
    
    
    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)).10.12
    
    
    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)).10.13
    
    
    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)).10.14
    
    
    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)).10.15
    
    
    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)).10.16
    
    
    Amended and Restated Limited Liability Company Agreement of Triad
Holdings, LLC dated June 17, 2008 (incorporated herein by reference to
Exhibit 10.16 on Form 10-Q of Triad Financial Corporation, filed on
August 14, 2008 (File No. 333-65107)).
 49




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##### Table of Contents



ExhibitNumber
    
    Description of Document10.17
    
    
    Senior Unsecured Demand
Promissory Note dated as of May 11, 2008, by the Company in favor of
Hunters Glen/Ford Ltd (incorporated herein by reference to Exhibit
10.17 on Form 10-Q of Triad Financial Corporation, filed on August 14,
2008 (File No. 333-65107)).10.18
    
    
    Senior Unsecured Demand Promissory Note dated as of June 17, 2008, by
the Company in favor of Hunters Glen/Ford Ltd (incorporated herein by
reference to Exhibit 10.18 on Form 10-Q of Triad Financial Corporation,
filed on August 14, 2008 (File No. 333-65107)).10.19
    
    
    Senior Unsecured Demand Promissory Note dated as of June 17, 2008, by
the Company in favor of GTCR Fund VIII, L.P. , GTCR Fund VIII/B, L.P.
and GTCR Co-Invest II, L.P. (incorporated herein by reference to Exhibit
10.19 on Form 10-Q of Triad Financial Corporation, filed on August 14,
2008 (File No. 333-65107)).10.20
    
    
    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)).10.21
    
    
    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)).*10.22
    
    
    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)).10.23
    
    
    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 50