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GM Financial Reports Full Year and December Quarter 2015 Operating Results

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February 3, 2016 8:42 AM EST
  • Full year net income of $646 million; December quarter net income of $131 million
  • Full year retail loan and lease originations of $37.7 billion; $9.8 billion for the December quarter
  • End of period earning assets of $57.7 billion
  • Available liquidity of $14.7 billion at year end

FORT WORTH, Texas--(BUSINESS WIRE)-- GENERAL MOTORS FINANCIAL COMPANY, INC. (“GM Financial” or the “Company”) announced net income of $131 million for the quarter ended December 31, 2015, compared to $59 million for the quarter ended December 31, 2014. Earnings for the year ended December 31, 2015 were $646 million, compared to $537 million for the year ended December 31, 2014.

Retail loan originations were $4.4 billion for the quarter ended December 31, 2015, compared to $4.7 billion for the quarter ended September 30, 2015, and $4.0 billion for the quarter ended December 31, 2014. Retail loan originations for the year ended December 31, 2015 were $17.5 billion, compared to $15.1 billion for the year ended December 31, 2014. The outstanding balance of retail finance receivables was $29.1 billion at December 31, 2015.

Operating lease originations were $5.4 billion for the quarter ended December 31, 2015, compared to $6.2 billion for the quarter ended September 30, 2015, and $2.1 billion for the quarter ended December 31, 2014. Operating lease originations for the year ended December 31, 2015 were $20.2 billion, compared to $6.2 billion for the year ended December 31, 2014. Leased vehicles, net was $20.2 billion at December 31, 2015.

The outstanding balance of commercial finance receivables was $8.4 billion at December 31, 2015 compared to $8.1 billion at December 31, 2014.

Retail finance receivables 31-to-60 days delinquent were 4.2% of the portfolio at December 31, 2015, and 2014. Accounts more than 60 days delinquent were 1.6% of the portfolio at December 31, 2015, compared to 1.7% at December 31, 2014.

Annualized net credit losses were 2.2% of average retail finance receivables for the quarter ended December 31, 2015 and 2014. For the year ended December 31, 2015 and 2014, annualized retail net credit losses were 1.9%.

The Company had total available liquidity of $14.7 billion at December 31, 2015, consisting of $3.1 billion of cash and cash equivalents, $9.7 billion of borrowing capacity on unpledged eligible assets, $0.9 billion of borrowing capacity on committed unsecured lines of credit and $1.0 billion of borrowing capacity on a Junior Subordinated Revolving Credit Facility from GM.

On January 2, 2015, the Company completed the acquisition of Ally Financial Inc.’s 40% equity interest in SAIC-GMAC Automotive Finance Company Limited (“SAIC-GMAC”). Also on January 2, 2015, the Company sold a 5% equity interest in SAIC-GMAC to Shanghai Automotive Group Finance Company Ltd. As a result of these transactions, the Company owns a 35% equity interest in SAIC-GMAC. Income from our equity investment in SAIC-GMAC is included in our results beginning January 2, 2015.

About GM Financial

General Motors Financial Company, Inc. is the captive finance company for and a wholly-owned subsidiary of General Motors Company and is headquartered in Fort Worth, Texas. For more information, visit www.gmfinancial.com.

Forward-Looking Statements

Except for the historical information contained herein, the matters discussed in this news release include forward-looking statements which are our current views with respect to future events and financial performance. These forward-looking statements are subject to many assumptions, risks and uncertainties that could cause actual results to differ significantly from historical results or from those anticipated. The most significant risks are detailed from time to time in our filings and reports with the Securities and Exchange Commission, including our annual report on Form 10-K for the year ended December 31, 2015. Such risks include – but are not limited to – changes in general economic and business conditions; GM’s ability to sell new vehicles that we finance in the markets we serve in North America, Europe, Latin America and China; interest rate and currency fluctuations; our financial condition and liquidity, as well as future cash flows and earnings; competition; the effect, interpretation or application of new or existing laws, regulations, court decisions and accounting pronouncements; the availability of sources of financing; the level of net charge-offs, delinquencies and prepayments on the loans and leases we originate; vehicle return rates and the residual value performance on vehicles we lease; the viability of GM-franchised dealers that are commercial loan customers; the prices at which used cars are sold in the wholesale markets; and changes in business strategy, including expansion of product lines and credit risk appetite, and acquisitions. If one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect, actual events or results may differ materially. It is advisable not to place undue reliance on any forward-looking statements. We undertake no obligation to, and do not, publicly update or revise any forward-looking statements, except as required by federal securities laws, whether as a result of new information, future events or otherwise.

 
 
General Motors Financial Company, Inc.
Consolidated Statements of Income
(Dollars in millions)
 
    Three Months Ended     Year Ended
December 31, December 31,
2015

 

  2014 2015     2014
Revenue
Finance charge income $ 837 $ 880 $ 3,381 $ 3,475
Leased vehicle income 980 355 2,807 1,090
Other income   61   70   266   289
Total revenue   1,878   1,305   6,454   4,854
Costs and expenses
Operating expenses 348 316 1,293 1,162
Leased vehicle expenses 777 284 2,200 847
Provision for loan losses 184 196 624 604
Interest expense   433   389   1,616   1,426
Total costs and expenses 1,742 1,185 5,733 4,039
Equity income   31   —   116   —
Income before income taxes 167 120 837 815
Income tax provision   36   61   191   278
Net income $ 131 $ 59 $ 646 $ 537
 
 
Consolidated Balance Sheets
(Dollars in millions)
 
    December 31, 2015     December 31, 2014
Assets
Cash and cash equivalents $ 3,061 $ 2,974
Finance receivables, net 36,781 33,000
Leased vehicles, net 20,172 7,060
Restricted cash 1,941 2,071
Goodwill 1,189 1,244
Equity in net assets of non-consolidated affiliates 986 —
Property and equipment, net of accumulated depreciation 219 172
Deferred income taxes 231 341
Related party receivables 573 384
Other assets   751   362
Total assets $ 65,904 $ 47,608
Liabilities and Shareholder's Equity
Liabilities
Secured debt $ 30,689 $ 25,173
Unsecured debt 23,657 12,142
Accounts payable and accrued expenses 1,218 1,002
Deferred income 1,454 392
Deferred income taxes 129 20
Related party taxes payable — 636
Related party payables 362 433
Other liabilities   343   418
Total liabilities   57,852   40,216
Shareholder's equity   8,052   7,392
Total liabilities and shareholder's equity $ 65,904 $ 47,608
 
 
Operational and Financial Data
(Unaudited, Dollars in millions)
 
    Three Months Ended
December 31,
2015     2014
North         North        
America International Total America International Total
Retail finance receivables originations $ 2,861 $ 1,569 $ 4,430 $ 1,934

 

$ 2,022

 

$ 3,956
GM lease originations $ 5,366 $ 22 $ 5,388 $ 2,068 $ 24 $ 2,092

GM new vehicle loans and leases as a

percent of total loan and lease originations

88.0 % 86.8 % 87.8 % 69.3 % 86.6 % 75.2 %
 
 
    Year Ended
December 31,
2015     2014
North         North        
America International Total America International Total
Retail finance receivables originations $ 10,931 $ 6,606 $ 17,537 $ 6,808 $ 8,277 $ 15,085
GM lease originations $ 20,121 $ 78 $ 20,199 $ 6,132 $ 37 $ 6,169
GM new vehicle loans and leases as a

percent of total loan and lease originations

84.3 % 85.3 % 84.5 % 64.8 % 87.3 % 73.6 %
 
 
    Three Months Ended
December 31,
2015  

 

2014
North         North        
America International Total America International Total
Average retail finance receivables $ 17,479 $ 11,029 $ 28,508 $ 13,038 $ 12,515 $ 25,553
Average commercial finance receivables   3,857   4,374   8,231   2,789   4,663   7,452
Average finance receivables 21,336 15,403 36,739 15,827 17,178 33,005
Average leased vehicles, net   18,478   78   18,556   6,385   21   6,406
Average earning assets $ 39,814 $ 15,481 $ 55,295 $ 22,212 $ 17,199 $ 39,411
 
 
    Year Ended
December 31,
2015     2014
North         North        
America International Total America International Total
Average retail finance receivables $ 15,688 $ 11,509 $ 27,197 $ 12,205 $ 12,568 $ 24,773
Average commercial finance receivables   3,465   4,364   7,829   2,384   4,653   7,037
Average finance receivables 19,153 15,873 35,026 14,589 17,221 31,810
Average leased vehicles, net   13,033   57   13,090   4,867   7   4,874
Average earning assets $ 32,186 $ 15,930 $ 48,116 $ 19,456 $ 17,228 $ 36,684
 
 
    December 31, 2015  

 

December 31, 2014
North         North        
America International Total America International Total
Retail finance receivables(a) $ 18,148 $ 10,976 $ 29,124 $ 13,409 $ 12,263 $ 25,672
Commercial finance receivables 4,051 4,388 8,439 3,180 4,892 8,072
Leased vehicles   20,086   86   20,172   7,029   31   7,060
Ending earning assets $ 42,285 $ 15,450 $ 57,735 $ 23,618 $ 17,186 $ 40,804

(a) December 31, 2014 retail finance receivables include the outstanding balance of the pre-acquisition portfolio

 
 
    December 31, 2015     December 31, 2014
North         North        
America International Total America International Total
Retail

 

Retail finance receivables,

net of fees(a,b)

$ 18,148 $ 10,976 $ 29,124 $ 13,361 $ 12,262 $ 25,623
Less: allowance for loan losses   (618 )   (117 )   (735 )   (577 )   (78 )   (655 )
Total retail finance receivables, net   17,530     10,859     28,389     12,784     12,184     24,968  
Commercial
Commercial finance receivables,
net of fees 4,051 4,388 8,439 3,180 4,892 8,072
Less: allowance for loan losses   (23 )   (24 )   (47 )   (21 )   (19 )   (40 )
Total commercial finance receivables, net   4,028     4,364     8,392     3,159     4,873     8,032  
Total finance receivables, net $ 21,558   $ 15,223   $ 36,781   $ 15,943   $ 17,057   $ 33,000  

(a) Amounts reported in the International Segment include $1.1 billion and $1.0 billion of direct-financing leases at December 31, 2015 and 2014.

(b) Net of unamortized premiums and discounts, and deferred fees and costs of $179 million and $245 million at December 31, 2015 and 2014

 
 
    December 31, 2015     December 31, 2014
North         North        
America International Total America International Total
Allowance for loan losses as a percentage
of retail finance receivables,
net of fees 3.4 % 1.1 % 2.5 % 4.4 % 0.6 % 2.6 %
Allowance for loan losses as a percentage
of commercial finance receivables,
net of fees 0.6 % 0.5 % 0.6 % 0.7 % 0.4 % 0.5 %
 
 
    December 31, 2015     December 31, 2014
North         North        
America International Total America International Total
Loan delinquency as a percent of endingretail finance receivables:
31 - 60 days 6.3 % 0.8 % 4.2 % 7.4 % 0.7 % 4.2 %
Greater than 60 days 2.2 % 0.8 % 1.6 % 2.5 % 0.8 % 1.7 %
Total 8.5 % 1.6 % 5.8 % 9.9 % 1.5 % 5.9 %
 
 
    Three Months Ended
December 31,
2015     2014
North         North        
America

International(a)

Total America

International(a)

Total
Charge-offs $ 250 $ 36 $ 286 $ 233 $ 36 $ 269
Adjustments to reflect write-offs of the
contractual amounts on loans acquired
with deteriorated credit quality   3     —     3     11     (1 )   10  
Total credit losses $ 253 $ 36 $ 289 $ 244 $ 35 $ 279
Less: recoveries   (123 )   (11 )   (134 )   (126 )   (11 )   (137 )
Net credit losses $ 130   $ 25   $ 155   $ 118   $ 24   $ 142  
Net annualized credit losses as a percent of
average retail finance receivables: 3.0 % 0.9 % 2.2 % 3.6 % 0.8 % 2.2 %
Recoveries as a percentage of gross
repossession credit losses: 53.4 % 53.1 %

(a) Credit losses for the International Segment primarily include the write-down of receivables to net realizable value. As a result, a calculation of recoveries as a percentage of gross credit losses is not meaningful.

 
 
    Year Ended
December 31,
2015     2014
North        

North

       
America

International(a)

Total

America

International(a)

Total
Charge-offs $ 859 $ 137 $ 996 $ 776 $ 138 $ 914
Adjustments to reflect write-offs of the
contractual amounts on loans acquired
with deteriorated credit quality   18     1     19     63     6     69  
Total credit losses $ 877 $ 138 $ 1,015 $ 839 $ 144 $ 983
Less: recoveries   (465 )   (47 )   (512 )   (465 )   (56 )   (521 )
Net credit losses $ 412   $ 91   $ 503   $ 374   $ 88   $ 462  
Net annualized credit losses as a percent of
average retail finance receivables: 2.6 % 0.8 % 1.9 % 3.1 % 0.7 % 1.9 %
Recoveries as a percentage of gross
repossession credit losses: 56.4 % 57.3 %

(a) Credit losses for the International Segment primarily include the write-down of receivables to net realizable value. As a result, a calculation of recoveries as a percentage of gross credit losses is not meaningful.

 
 

 

    Three Months Ended
December 31,
2015     2014
North         North        
America International Total America International Total
Annualized operating expenses as a

percent of average earning assets(a)

2.0 % 3.6 % 2.5 % 2.7 % 3.8 % 3.2 %
 
 
    Year Ended
December 31,
2015     2014
North         North        
America International Total America International Total
Annualized operating expenses as a

percent of average earning assets(a)

2.3 % 3.5 % 2.7 % 2.8 % 3.6 % 3.2 %

(a) Excludes leased vehicle expenses.

General Motors Financial Company, Inc.
Stephen Jones, 817-302-7119
Vice President, Investor Relations
[email protected]

Source: General Motors Financial Company, Inc.


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