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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 March 31, 2007
 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: 333-126538
 
 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 100
Huntington Beach, California(Address of principal executive offices)
    
    92647(Zip Code)
 (714) 373-8300  (Registrants telephone number, including area code)
 
 þ o
  o o þ
 o þ




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##### Table of Contents



TRIAD FINANCIAL CORPORATION
INDEX TO FORM 10-Q
 PagePART I FINANCIAL INFORMATIONITEM 1. FINANCIAL STATEMENTS
    
    
    2CONSOLIDATED 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
    
    
    18ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    30ITEM 4. CONTROLS AND PROCEDURES
    
    
    32PART II OTHER INFORMATIONITEM 1. LEGAL PROCEEDINGS
    
    
    32ITEM 1A. RISK FACTORS
    
    
    32ITEM 2. UNREGISTERED SALES OF EQUITY SECUITIES AND USE OF PROCEEDS
    
    
    33ITEM 3. DEFAULTS UPON SENIOR SECURITIES
    
    
    33ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    33ITEM 5. OTHER INFORMATION
    
    
    33ITEM 6. EXHIBITS
    
    
    34SIGNATURES
    
    
    36EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1




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TRIAD FINANCIAL CORPORATION
 Forward-Looking Statements
  
    
    our ability to make payments of principal and interest on, or refinance, our substantial
indebtedness;
    
    our reliance on our warehouse facilities, 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;
    
    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;
    
    general economic conditions, including wholesale auction values and interest rates;
    
    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, 2007
    
    
    December 31, 2006(Dollars in thousands)(Unaudited)ASSETSCash and cash equivalents
    
    $
    57,751
    
    
    $
    60,367Cash  restricted
    
    
    300,609
    
    
    
    274,059Finance receivables held for investment, net
    
    
    3,727,999
    
    
    
    3,781,469Retained interest in securitized assets
    
    
    57,143
    
    
    
    102,531Accounts receivable, net
    
    
    44,768
    
    
    
    50,918Fixed assets, net of accumulated depreciation of $16,309 in
2007 and $13,913 in 2006
    
    
    16,873
    
    
    
    19,294Collateral held for resale
    
    
    15,670
    
    
    
    17,072Capitalized financing costs, net of accumulated amortization
of $22,142 in 2007 and $20,826 in 2006
    
    
    13,787
    
    
    
    15,031Deferred tax asset, net
    
    
    71,510
    
    
    
    63,731Goodwill
    
    
    30,446
    
    
    
    30,446Other assets
    
    
    3,024
    
    
    
    3,617Total assets
    
    $
    4,339,580
    
    
    $
    4,418,535LIABILITIES AND STOCKHOLDERS EQUITYLiabilitiesRevolving credit facilities
    
    $
    787,067
    
    
    $
    529,131Securitization notes payable
    
    
    2,914,536
    
    
    
    3,258,215Senior notes payable
    
    
    149,188
    
    
    
    149,167Taxes payable
    
    
    2,822
    
    
    
    3,499Other liabilities
    
    
    73,104
    
    
    
    72,364Total liabilities
    
    
    3,926,717
    
    
    
    4,012,376Commitments and contingencies (Note 12)Stockholders EquityPreferred stock, no par value; authorized 3,000,000
shares; issued and outstanding 1,500,000 shares at March
31, 2007 and December 31, 2006
    
    
    30,000
    
    
    
    30,000Common stock, no par value; authorized 9,069 shares; issued
and outstanding 9,069 shares at March 31, 2007 and December
31, 2006
    
    
    
    
    
    
    Additional paid in capital
    
    
    345,000
    
    
    
    345,000Retained earnings
    
    
    30,221
    
    
    
    22,075Accumulated other comprehensive income
    
    
    7,642
    
    
    
    9,084Total stockholders equity
    
    
    412,863
    
    
    
    406,159Total liabilities and stockholders equity
    
    $
    4,339,580
    
    
    $
    4,418,535
  2




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TRIAD FINANCIAL CORPORATION
 
 Consolidated Statements of Income
 Three Months
    
    
    Three MonthsEnded
    
    
    EndedMarch 31, 2007
    
    
    March 31, 2006(Dollars in thousands)(Unaudited)Financing and other interest income
    
    $
    161,530
    
    
    $
    110,601Interest expense
    
    
    54,863
    
    
    
    39,904Net interest margin
    
    
    106,667
    
    
    
    70,697Provision for credit losses
    
    
    62,630
    
    
    
    42,532Net interest margin after provision
for credit losses
    
    
    44,037
    
    
    
    28,165Securitization and servicing income
    
    
    2,977
    
    
    
    7,303Other income
    
    
    2,659
    
    
    
    7,529Total other revenues
    
    
    5,636
    
    
    
    14,832Operating expenses:Compensation and employee benefits
    
    
    20,752
    
    
    
    18,490Occupancy and equipment
    
    
    4,142
    
    
    
    4,147Systems and data processing
    
    
    3,337
    
    
    
    3,289Professional services
    
    
    1,534
    
    
    
    1,746Telecommunications
    
    
    946
    
    
    
    804Advertising
    
    
    779
    
    
    
    367Other
    
    
    3,480
    
    
    
    3,386Total operating expenses
    
    
    34,970
    
    
    
    32,229Income before income taxes
    
    
    14,703
    
    
    
    10,768Provision for income taxes
    
    
    5,769
    
    
    
    4,210Net income
    
    $
    8,934
    
    
    $
    6,558
  3




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TRIAD FINANCIAL CORPORATION
 
 Consolidated Statements of Cash Flows
 Three Months Ended
    
    
    Three Months EndedMarch 31, 2007
    
    
    March 31, 2006(Dollars in thousands)(Unaudited)Cash flows from operating activitiesNet income
    
    $
    8,934
    
    
    $
    6,558Adjustments to reconcile net income to net cash
provided by operating activities:Depreciation and amortization
    
    
    7,675
    
    
    
    5,239Provision for credit losses
    
    
    62,630
    
    
    
    42,532Deferred income tax benefit
    
    
    (6,837
    )
    
    
    (900
    )Accretion of present value discount
    
    
    (6,212
    )
    
    
    (8,171
    )Amortization of purchase premium
    
    
    9,025
    
    
    
    20,862Loss on repurchase of receivables from gain on
sale trusts
    
    
    2,864
    
    
    
    Changes in operating assets and liabilitiesAccounts receivable
    
    
    6,150
    
    
    
    (2,949
    )Other assets
    
    
    (194
    )
    
    
    (1,121
    )Other liabilities
    
    
    916
    
    
    
    (454
    )Current tax receivable/payable
    
    
    (677
    )
    
    
    (6,923
    )Net cash provided by operating activities
    
    
    84,274
    
    
    
    54,673Cash flows from investing activitiesDistributions from gain on sale trusts
    
    
    49,059
    
    
    
    51,632Repurchases from gain on sale trusts
    
    
    (93,712
    )
    
    
    (45,632
    )Purchases of finance receivables held for
investment
    
    
    (306,563
    )
    
    
    (741,091
    )Collections on finance receivables held
for investment
    
    
    376,846
    
    
    
    283,779Change in restricted cash
    
    
    (26,550
    )
    
    
    (46,678
    )Purchases of fixed assets
    
    
    (155
    )
    
    
    (3,477
    )Net cash used in investing activities
    
    
    (1,075
    )
    
    
    (501,467
    )Cash flows from financing activitiesNet change in warehouse credit facilities
    
    
    302,936
    
    
    
    (146,808
    )Net change in residual credit facilities
    
    
    (45,000
    )
    
    
    6,000Net change in due to Ford Motor Credit
Company
    
    
    
    
    
    
    (15,491
    )Issuance of securitization notes
    
    
    
    
    
    
    822,426Payment on securitization notes
    
    
    (343,679
    )
    
    
    (224,647
    )Capitalized finance costs
    
    
    (72
    )
    
    
    (2,836
    )Net cash (used in) provided by financing activities
    
    
    (85,815
    )
    
    
    438,644Net decrease in cash and cash equivalents
    
    
    (2,616
    )
    
    
    (8,150
    )Cash and cash equivalentsBeginning of period
    
    
    60,367
    
    
    
    45,295End of period
    
    $
    57,751
    
    
    $
    37,145Supplemental DisclosureInterest paid
    
    $
    54,642
    
    
    $
    39,357Income taxes paid
    
    $
    13,287
    
    
    $
    12,248
  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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Restricted Cash
  Finance Receivables
    Sale of Receivables
    Allowance for Credit Losses
  6




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Charge-Off Policy
  Derivative Financial Instruments
  Fixed Assets
   Equipment
    
    3-5 yearsSoftware
    
    3-5 yearsFurniture and fixtures
    
    5 years
    Goodwill
  7




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Income Taxes
   Stock-Based Compensation
  Use of Estimates
  8




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##### Table of Contents



3. Finance Receivables
  2007
    
    
    2006(Dollars in thousands)Finance receivables held for investment
    
    $
    3,061,281
    
    
    $
    3,045,938Premiums and discounts, net
    
    
    (5,926
    )
    
    
    (7,699
    )Deferred costs, net
    
    
    23,189
    
    
    
    26,325Allowance for credit losses
    
    
    (208,077
    )
    
    
    (195,000
    )Finance receivables held for investment, net
    
    
    2,870,467
    
    
    
    2,869,564Predecessor finance receivables held for investment, net
    
    
    738,797
    
    
    
    849,246Finance receivables repurchased from gain on sale trusts, net
    
    
    118,735
    
    
    
    62,659Finance receivables, net
    
    $
    3,727,999
    
    
    $
    3,781,469
   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
    
    
    (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, 2005
    
    $
    2,220,192
    
    
    $
    (524,710
    )
    
    $
    1,695,482
    
    
    $
    (227,072
    )
    
    $
    1,468,410Interest income
    
    
    (58,250
    )
    
    
    
    
    
    
    (58,250
    )
    
    
    38,365
    
    
    
    (19,885
    )Principal collections
    
    
    (171,798
    )
    
    
    
    
    
    
    (171,798
    )
    
    
    
    
    
    
    (171,798
    )Charge-offs
    
    
    (19,518
    )
    
    
    19,518
    
    
    
    
    
    
    
    
    
    
    
    Reclassifications
    
    
    
    
    
    
    23,432
    
    
    
    23,432
    
    
    
    (23,432
    )
    
    
    Change in cash flows
    
    
    (45,564
    )
    
    
    45,564
    
    
    
    
    
    
    
    
    
    
    
    Balance, March 31, 2006
    
    $
    1,925,062
    
    
    $
    (436,196
    )
    
    $
    1,488,866
    
    
    $
    (212,139
    )
    
    $
    1,276,727
 9




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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
    
    
    (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
 Contractual
    
    
    Nonaccretable
    
    
    Expected
    
    
    Accretable
    
    
    CarryingPayments
    
    
    Discount
    
    
    Payments
    
    
    Discount
    
    
    Value(Dollars in thousands)Balance, December 31, 2005
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Finance receivables repurchased
    
    
    49,846
    
    
    
    (6,028
    )
    
    
    43,818
    
    
    
    (2,179
    )
    
    
    41,639Interest income
    
    
    (1,747
    )
    
    
    
    
    
    
    (1,747
    )
    
    
    771
    
    
    
    (976
    )Principal collections
    
    
    (11,454
    )
    
    
    
    
    
    
    (11,454
    )
    
    
    
    
    
    
    (11,454
    )Charge-offs
    
    
    (1,141
    )
    
    
    1,141
    
    
    
    
    
    
    
    
    
    
    
    Reclassifications
    
    
    
    
    
    
    270
    
    
    
    270
    
    
    
    (270
    )
    
    
    Change in cash flows
    
    
    (187
    )
    
    
    187
    
    
    
    
    
    
    
    
    
    
    
    Balance, March 31, 2006
    
    $
    35,317
    
    
    $
    (4,430
    )
    
    $
    30,887
    
    
    $
    (1,678
    )
    
    $
    29,209
 4. Allowance For Credit Losses
  Three Months
    
    
    Three MonthsEnded
    
    
    EndedMarch 31,
    
    
    March 31,2007
    
    
    2006(Dollars in thousands)Balance, beginning of period
    
    $
    195,000
    
    
    $
    51,259Provision for credit losses
    
    
    62,630
    
    
    
    42,532Charge-offs
    
    
    (54,828
    )
    
    
    (11,296
    )Recoveries
    
    
    5,275
    
    
    
    467Balance, end of period
    
    $
    208,077
    
    
    $
    82,962
   10




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5. Sales of Receivables
 Servicing Portfolio
  Three Months
    
    
    Three MonthsEnded
    
    
    EndedMarch 31,
    
    
    March 31,2007
    
    
    2006(Dollars in thousands)Balance, beginning of period
    
    $
    484,818
    
    
    $
    1,130,352Called receivables
    
    
    (93,712
    )
    
    
    (45,632
    )Collections and write-offs
    
    
    (68,527
    )
    
    
    (166,842
    )Balance, end of period
    
    $
    322,579
    
    
    $
    917,878
  Retained Interest in Securitized Assets
  2007
    
    
    2006(Dollars in thousands)Restricted cash held for the benefit of securitizations
    
    
    35,225
    
    
    
    57,751Overcollaterization receivable
    
    
    41,935
    
    
    
    63,026Interest-only
    
    
    (20,017
    )
    
    
    (18,246
    )Retained interest in securitized assets
    
    $
    57,143
    
    
    $
    102,531
     11




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Restricted
    
    
    Over-
    
    
    Interest-Cash
    
    
    Collateralization
    
    
    Only
    
    
    TotalBalance, December 31, 2006
    
    $
    57,751
    
    
    $
    63,026
    
    
    $
    (18,246
    )
    
    $
    102,531Distributions
    
    
    (22,526
    )
    
    
    (21,091
    )
    
    
    (5,442
    )
    
    
    (49,059
    )Residual interest income
    
    
    
    
    
    
    
    
    
    
    6,212
    
    
    
    6,212Unrealized losses
    
    
    
    
    
    
    
    
    
    
    (2,541
    )
    
    
    (2,541
    )Balance, March 31, 2007
    
    $
    35,225
    
    
    $
    41,935
    
    
    $
    (20,017
    )
    
    $
    57,143Balance, December 31, 2005
    
    $
    80,298
    
    
    $
    150,283
    
    
    $
    (13,629
    )
    
    $
    216,952Distributions
    
    
    (9,360
    )
    
    
    (32,121
    )
    
    
    (10,151
    )
    
    
    (51,632
    )Residual interest income
    
    
    
    
    
    
    
    
    
    
    8,171
    
    
    
    8,171Unrealized gains
    
    
    
    
    
    
    
    
    
    
    1,276
    
    
    
    1,276Balance, March 31, 2006
    
    $
    70,938
    
    
    $
    118,162
    
    
    $
    (14,333
    )
    
    $
    174,767
   6. Revolving Credit Facilities
  2007
    
    
    2006(Dollars in thousands)Warehouse loan facilities
    
    $
    737,067
    
    
    $
    434,131Residual loan facilities
    
    
    50,000
    
    
    
    95,000Total revolving credit facilities
    
    $
    787,067
    
    
    $
    529,131
  Facility
    
    
    Collateral
    
    
    AdvancesAmount
    
    
    Pledged
    
    
    Outstanding(Dollars in thousands)Warehouse loan facility, due April 2009
    
    $
    625,000
    
    
    $
    410,372
    
    
    $
    369,400Residual loan facility, due April 2009
    
    
    125,000
    
    
    
    224,591
    
    
    
    25,000Warehouse loan facility, due October 2007(a)
    
    
    625,000
    
    
    
    408,427
    
    
    
    367,667Residual loan facility, due October 2007(a)
    
    
    125,000
    
    
    
    224,591
    
    
    
    25,000$
    787,067
 
 (a)
    
    Warehouse and residual loan facilities provided by Goldman Sachs Mortgage Company, an
affiliate of one of our equity investors. 12




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##### Table of Contents



7. Securitization Notes Payable
  Original
    
    
    FinanceWeighted
    
    
    Receivables
    
    
    NoteOriginal
    
    
    Average
    
    
    Pledged
    
    
    BalanceNote
    
    
    Interest
    
    
    at
    
    
    atTransaction
    
    Amount
    
    
    Rate
    
    
    March 31, 2007
    
    
    March 31, 2007(Dollars in thousands)2005-A, due June 12, 2012(a)
    
    $
    1,104,000
    
    
    
    4.09
    %
    
    $
    488,141
    
    
    $
    447,7272005-B, due April 12, 2013(a)
    
    $
    905,303
    
    
    
    4.32
    %
    
    $
    440,407
    
    
    $
    403,7212006-A, due April 12, 2013(a)
    
    $
    822,500
    
    
    
    4.88
    %
    
    $
    544,687
    
    
    $
    490,5432006-B, due November 12, 2012(a)
    
    $
    915,500
    
    
    
    5.50
    %
    
    $
    706,865
    
    
    $
    646,0902006-C, due May 13, 2013(a)
    
    $
    1,092,200
    
    
    
    5.37
    %
    
    $
    1,001,558
    
    
    $
    926,455$
    2,914,536
 
 (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. 13




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##### Table of Contents



8. Senior Notes Payable
    9. Preferred Stock
   14




---



##### Table of Contents



10. Derivative Financial Instruments
  11. Income Taxes
    12. Commitments and Contingencies
     15




---



##### Table of Contents



(Dollars in thousands)Year ending December 31,2007
    
    $
    2,7542008
    
    $
    2,1912009
    
    $
    1,8952010
    
    $
    1,8952011
    
    $
    1,8952012 and thereafter
    
    $
    1,737
 13. Comprehensive Income
  Three Months
    
    
    Three MonthsEnded
    
    
    EndedMarch 31,
    
    
    March 31,2007
    
    
    2006(Dollars in thousands)Net income
    
    $
    8,934
    
    
    $
    6,558Other comprehensive income, netUnrealized holding gains on
available for sale securities
(net of tax of $233 and $689)
    
    
    356
    
    
    
    1,056Net unrealized holding gains reclassified
into earnings (net of tax of $1,175, and $185)
    
    
    (1,798
    )
    
    
    (284
    )Total other comprehensive income, net
    
    
    (1,442
    )
    
    
    772Comprehensive income
    
    $
    7,492
    
    
    $
    7,330
  Three Months
    
    
    Three MonthsEnded
    
    
    EndedMarch 31,
    
    
    March 31,2007
    
    
    2006(Dollars in thousands)Balance, beginning of period
    
    $
    9,084
    
    
    $
    1,849Current period change
    
    
    (1,442
    )
    
    
    772Balance, end of period
    
    $
    7,642
    
    
    $
    2,621
 14. Stock-Based Compensation
   16




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##### Table of Contents



Weighted-AverageExerciseShares
    
    
    Price(Amounts in thousands exceptweighted-averageexercise price)(Dollars in thousands)Outstanding at December
31, 2006
    
    
    2,988
    
    
    $
    7.58Granted
    
    
    200
    
    
    
    8.30Canceled
    
    
    
    
    
    
    Forfeited
    
    
    (150
    )
    
    
    7.59Outstanding at March 31, 2007
    
    
    3,038
    
    
    $
    7.62Exercisable at March 31, 2007
    
    
    1,220
    
    
    $
    7.60Weighted-average remaining
contractual life in years
    
    
    
    
    
    
    8.60Outstanding at December 31, 2005
    
    
    2,000
    
    
    $
    7.50Granted
    
    
    1,000
    
    
    
    7.73Canceled
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    Outstanding at March 31, 2006
    
    
    3,000
    
    
    $
    7.58
 17




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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
    18




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##### Table of Contents



Critical Accounting Policies and Use of Estimates
  Components of Revenues and Expenses
   Results of Operations
 Three Months Ended March 31, 2007 as Compared to Three Months Ended March 31, 2006
  Net Interest Margin
  For the Three Months EndedMarch 31,2007
    
    
    2006(Dollars in thousands)Average owned finance receivables, carrying value
    
    $
    3,934,717
    
    
    $
    2,862,421
  19




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##### Table of Contents



For the Three Months EndedMarch 31,2007
    
    
    2006(Dollars in thousands)Financing income
    
    $
    152,196
    
    
    $
    100,555Other interest income
    
    
    9,334
    
    
    
    10,046Interest expense
    
    
    (54,863
    )
    
    
    (39,904
    )Net interest margin
    
    $
    106,667
    
    
    $
    70,697Annualized financing income as a
percentage of average owned finance
receivables
    
    
    15.5
    %
    
    
    14.1
    %
       20




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##### Table of Contents



Provision for Credit Losses
  Securitization and Servicing Income
  Other Income
  For the Three Months EndedMarch 31,2007
    
    
    2006(Dollars in thousands)Customer fees
    
    $
    5,983
    
    
    $
    5,071(Losses) gains on interest rate swap agreements
    
    
    (807
    )
    
    
    1,991Other
    
    
    (2,517
    )
    
    
    467Other income
    
    $
    2,659
    
    
    $
    7,529
  Expenses
  Income Taxes
  21




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##### Table of Contents



Credit Quality
    At March 31,
    
    
    At December 31,2007
    
    
    2006(Dollars in thousands)Finance receivables held for investment
    
    $
    3,061,281
    
    
    $
    3,045,938Allowance for credit losses
    
    
    (208,077
    )
    
    
    (195,000
    )Finance receivables held for investment, net of allowance
    
    
    2,853,204
    
    
    
    2,850,938Allowance for credit losses as a percentage of receivables
    
    
    6.8
    %
    
    
    6.4
    %Predecessor finance receivables held for investment, net
    
    
    738,797
    
    
    
    849,246Finance receivables repurchased from gain on sale trusts, net
    
    
    118,735
    
    
    
    62,659Total owned finance receivables held for investment, net
    
    $
    3,710,736
    
    
    $
    3,762,843
   At March 31,
    
    
    At December 31,2007
    
    

2006Amount
    
    
    Percent
    
    
    Amount
    
    
    Percent(Dollars in thousands)Delinquent contracts:31 to 60 days
    
    $
    255,778
    
    
    
    6.4
    %
    
    $
    269,861
    
    
    
    6.7
    %Greater than 60 days
    
    
    72,695
    
    
    
    1.8
    
    
    
    97,332
    
    
    
    2.4328,473
    
    
    
    8.2
    
    
    
    367,193
    
    
    
    9.1In repossession
    
    
    15,670
    
    
    
    0.4
    
    
    
    17,072
    
    
    
    0.4$
    344,143
    
    
    
    8.6
    %
    
    $
    384,265
    
    
    
    9.5
    %
   22




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##### Table of Contents



At March 31,
    
    
    At December 31,2007
    
    
    2006Percent
    
    
    PercentNever extended
    
    
    80.0
    %
    
    
    83.3
    %Extended:1-2 times
    
    
    19.6
    %
    
    
    16.4
    %3-4 times
    
    
    0.4
    %
    
    
    0.3
    %Total extended
    
    
    20.0
    %
    
    
    16.7
    %Total
    
    
    100.0
    %
    
    
    100.0
    %
    For the Three Months EndedMarch 31,2007
    
    
    2006(Dollars in thousands)Repossession charge-offs
    
    $
    91,019
    
    
    $
    50,667Less: Recoveries
    
    
    (59,328
    )
    
    
    (34,762
    )Mandatory charge-offs(1)
    
    
    33,432
    
    
    
    15,584Net charge-offs
    
    $
    65,123
    
    
    $
    31,489Annualized net charge-offs as a
percentage of average total owned
receivables outstanding
    
    
    6.6
    %
    
    
    4.4
    %Recoveries as a percentage of charge-offs
    
    
    47.7
    %
    
    
    52.5
    %
 
 (1)
    
    Mandatory charge-offs represent accounts more than 120 days past due where the collateral has
not been received at the time of charge-off.  23




---



##### Table of Contents



Total Managed Information
     For the Three Months EndedMarch 31,2007
    
    
    2006(Dollars in thousands)Average owned finance receivables, carrying value
    
    $
    3,934,717
    
    
    $
    2,862,421Average sold finance receivables
    
    
    401,056
    
    
    
    1,009,067Average total managed finance receivables
    
    $
    4,335,773
    
    
    $
    3,871,488
 24




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##### Table of Contents



Total Managed Net Interest Margin
  For the Three Months EndedMarch 31,2007
    
    
    2006(Dollars in thousands)Financing and other interest income
    
    $
    183,539
    
    
    $
    169,671Interest expense
    
    
    (58,538
    )
    
    
    (45,718
    )Net interest margin
    
    $
    125,001
    
    
    $
    123,953
  For the Three Months EndedMarch 31,2007
    
    
    2006(Dollars in thousands)Net margin as reflected on the consolidated statements of income
    
    $
    106,667
    
    
    $
    70,697Other interest income
    
    
    (9,334
    )
    
    
    (10,046
    )Financing revenue on sold receivables
    
    
    16,335
    
    
    
    43,183Interest expense on sold receivables
    
    
    (2,868
    )
    
    
    (7,805
    )Gains (losses) on interest rate swaps
    
    
    (807
    )
    
    
    1,991Premium amortization
    
    
    9,025
    
    
    
    20,862Customer fees
    
    
    5,983
    
    
    
    5,071Total managed net interest margin
    
    $
    125,001
    
    
    $
    123,953
  For the Three MonthsEndedMarch 31,2007
    
    
    2006(Dollars inThousands)Annualized finance revenue, fee and other income
    
    
    16.9
    %
    
    
    17.5
    %Annualized interest expense
    
    
    (5.4
    )
    
    
    (4.7
    )Annualized net interest margin as a percentage of average total managed receivables
    
    
    11.5
    %
    
    
    12.8
    %
  Total Managed Credit Quality
  25




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##### Table of Contents



At March 31, 2007Owned
    
    
    Sold
    
    
    Total Managed(Dollars in thousands)Owned finance receivables, unpaid principal balance
    
    $
    3,990,077
    
    
    $
    
    
    
    $
    3,990,077Sold finance receivables
    
    
    
    
    
    
    322,579
    
    
    
    322,579Total managed finance receivables
    
    $
    3,990,077
    
    
    $
    322,579
    
    
    $
    4,312,656Number of outstanding contracts
    
    
    273,152
    
    
    
    36,407
    
    
    
    309,559Average principal amount of outstanding contracts (in
dollars)
    
    $
    14,608
    
    
    $
    8,860
    
    
    $
    13,932
 At December 31, 2006Owned
    
    
    Sold
    
    
    Total Managed(Dollars in thousands)Owned finance receivables, unpaid principal balance
    
    $
    4,032,551
    
    
    $
    
    
    
    $
    4,032,551Sold finance receivables
    
    
    
    
    
    
    484,818
    
    
    
    484,818Total managed finance receivables
    
    $
    4,032,551
    
    
    $
    484,818
    
    
    $
    4,517,369Number of outstanding contracts
    
    
    264,559
    
    
    
    55,802
    
    
    
    320,361Average principal amount of outstanding contracts (in
dollars)
    
    $
    15,243
    
    
    $
    8,688
    
    
    $
    14,101
  At March 31, 2007Owned
    
    
    Sold
    
    
    Total ManagedDelinquent contracts:
    
    Amount
    
    
    Percent
    
    
    Amount
    
    
    Percent
    
    
    Amount
    
    
    Percent(Dollars in thousands)31 to 60 days
    
    $
    255,778
    
    
    
    6.4
    %
    
    $
    29,026
    
    
    
    9.0
    %
    
    $
    284,804
    
    
    
    6.6
    %Greater than 60 days
    
    
    72,695
    
    
    
    1.8
    
    
    
    7,874
    
    
    
    2.4
    
    
    
    80,569
    
    
    
    1.9328,473
    
    
    
    8.2
    
    
    
    36,900
    
    
    
    11.4
    
    
    
    365,373
    
    
    
    8.5In repossession
    
    
    15,670
    
    
    
    0.4
    
    
    
    2,559
    
    
    
    0.8
    
    
    
    18,229
    
    
    
    0.4$
    344,143
    
    
    
    8.6
    %
    
    $
    39,459
    
    
    
    12.2
    %
    
    $
    383,602
    
    
    
    8.9
    %
 At December 31, 2006Owned
    
    
    Sold
    
    
    Total ManagedDelinquent contracts:
    
    Amount
    
    
    Percent
    
    
    Amount
    
    
    Percent
    
    
    Amount
    
    
    Percent(Dollars in thousands)31 to 60 days
    
    $
    269,861
    
    
    
    6.7
    %
    
    $
    51,827
    
    
    
    10.7
    %
    
    $
    321,688
    
    
    
    7.1
    %Greater than 60 days
    
    
    97,332
    
    
    
    2.4
    
    
    
    17,970
    
    
    
    3.7
    
    
    
    115,302
    
    
    
    2.6367,193
    
    
    
    9.1
    
    
    
    69,797
    
    
    
    14.4
    
    
    
    436,990
    
    
    
    9.7In repossession
    
    
    17,072
    
    
    
    0.4
    
    
    
    4,819
    
    
    
    1.0
    
    
    
    21,891
    
    
    
    0.5$
    384,265
    
    
    
    9.5
    %
    
    $
    74,616
    
    
    
    15.4
    %
    
    $
    458,881
    
    
    
    10.2
    %
   26




---



##### Table of Contents



At March 31, 2007Owned
    
    
    Sold
    
    
    Total ManagedNever extended
    
    
    80.0
    %
    
    
    52.6
    %
    
    
    77.9
    %Extended:1-2 times
    
    
    19.6
    %
    
    
    44.4
    %
    
    
    21.5
    %3-4 times
    
    
    0.4
    %
    
    
    3.0
    %
    
    
    0.6
    %Total extended
    
    
    20.0
    %
    
    
    47.4
    %
    
    
    22.1
    %Total
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
 At December 31, 2006Owned
    
    
    Sold
    
    
    Total ManagedNever extended
    
    
    83.3
    %
    
    
    53.1
    %
    
    
    80.1
    %Extended:1-2 times
    
    
    16.4
    %
    
    
    43.8
    %
    
    
    19.3
    %3-4 times
    
    
    0.3
    %
    
    
    3.1
    %
    
    
    0.6
    %Total extended
    
    
    16.7
    %
    
    
    46.9
    %
    
    
    19.9
    %Total
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
   27




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##### Table of Contents



For the Three Months EndedMarch 31,2007
    
    
    2006(Dollars in thousands)Owned:Repossession charge-offs
    
    $
    91,019
    
    
    $
    50,667Less: Recoveries
    
    
    (59,328
    )
    
    
    (34,762
    )Mandatory charge-offs(1)
    
    
    33,432
    
    
    
    15,584Net charge-offs
    
    $
    65,123
    
    
    $
    31,489Sold:Charge-offs
    
    $
    14,871
    
    
    $
    37,009Less: Recoveries
    
    
    (8,371
    )
    
    
    (19,473
    )Mandatory charge-offs(1)
    
    
    
    
    
    
    Net charge-offs
    
    $
    6,500
    
    
    $
    17,536Total Managed:Repossession charge-offs
    
    $
    105,890
    
    
    $
    87,676Less: Recoveries
    
    
    (67,699
    )
    
    
    (54,235
    )Mandatory charge-offs(1)
    
    
    33,432
    
    
    
    15,584Net charge-offs
    
    $
    71,623
    
    
    $
    49,025Annualized net charge-offs as a
percentage of average total managed
receivables outstanding
    
    
    6.6
    %
    
    
    5.1
    %Recoveries as a percentage of charge-offs
    
    
    48.6
    %
    
    
    52.5
    %
 
 (1)
    
    Mandatory charge-offs represent accounts more than 120 days past due where the collateral has
not been received at the time of charge-off.  Liquidity and Capital Resources
 General
    28




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##### Table of Contents



Contractual and Long-Term Debt Obligations
  Securitizations
    29




---



##### Table of Contents



Off-Balance Sheet Arrangements
  Recent Accounting Pronouncements
   
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Interest Rate Risk
 General
  30




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##### Table of Contents



Warehouse and Residual Facilities
   Securitizations
    31




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##### Table of Contents



Interest Rate Swap Agreements
  
 ITEM 4. CONTROLS AND PROCEDURES
    
 PART II. OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
   
 ITEM 1A. RISK FACTORS
  32




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##### Table of Contents



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
  33




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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)).*10.3
    
    
    
    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)).10.4
    
    
    
    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)).10.5
    
    
    
    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
 34




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##### Table of Contents



EXHIBITNO.
    
    DESCRIPTIONherein
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)).10.6
    
    
    
    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)).10.7
    
    
    
    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)).10.8
    
    
    
    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)).10.9
    
    
    
    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)).10.10
    
    
    
    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)).10.11
    
    
    
    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)).10.12
    
    
    
    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)).*10.13
    
    
    
    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)).10.14
    
    
    
    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 35




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##### Table of Contents



SIGNATURES
  Date: May 14, 2007
    
    /s/ CARL B. WEBBCarl B. WebbPresident & Chief Executive OfficerDate: May 14, 2007
    
    /s/ MIKE L. WILHELMSMike L. WilhelmsSenior Vice President & Chief Financial Officer
 36




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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)).*10.3
    
    
    
    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)).10.4
    
    
    
    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)).10.5
    
    
    
    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
 37




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##### Table of Contents



EXHIBITNO.
    
    DESCRIPTIONherein
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)).10.6
    
    
    
    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)).10.7
    
    
    
    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)).10.8
    
    
    
    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)).10.9
    
    
    
    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)).10.10
    
    
    
    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)).10.11
    
    
    
    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)).10.12
    
    
    
    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)).*10.13
    
    
    
    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)).10.14
    
    
    
    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 38