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GM Financial Reports March Quarter 2015 Operating Results

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April 23, 2015 8:21 AM EDT
  • March quarter net income of $150 million
  • Consumer loan and lease originations of $7.1 billion
  • Annualized net credit losses of 1.8% on average consumer finance receivables
  • End of period earning assets of $42.2 billion

FORT WORTH, Texas--(BUSINESS WIRE)-- GENERAL MOTORS FINANCIAL COMPANY, INC. (“GM Financial” or the “Company”) announced net income of $150 million for the quarter ended March 31, 2015, compared to $145 million for the quarter ended March 31, 2014.

Consumer loan originations were $4.1 billion for the quarter ended March 31, 2015, compared to $4.0 billion for the quarter ended December 31, 2014, and $3.4 billion for the quarter ended March 31, 2014. The outstanding balance of consumer finance receivables totaled $25.6 billion at March 31, 2015.

Operating lease originations of General Motors Company (“GM”) vehicles were $3.0 billion for the quarter ended March 31, 2015, compared to $2.1 billion for the quarter ended December 31, 2014, and $773 million for the quarter ended March 31, 2014. Leased vehicles, net totaled $8.9 billion at March 31, 2015.

The outstanding balance of commercial finance receivables was $7.6 billion at March 31, 2015 compared to $8.1 billion at December 31, 2014 and $7.1 billion at March 31, 2014.

Consumer finance receivables 31-to-60 days delinquent were 3.4% of the portfolio at March 31, 2015, compared to 3.1% at March 31, 2014. Accounts more than 60 days delinquent were 1.4% of the portfolio at March 31, 2015 and 2014.

Annualized net credit losses were 1.8% of average consumer finance receivables for the quarters ended March 31, 2015 and 2014.

The Company had total available liquidity of $10.9 billion at March 31, 2015, consisting of $2.1 billion of unrestricted cash, $7.2 billion of borrowing capacity on unpledged eligible assets, $0.6 billion of borrowing capacity on 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, 2014. 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
(Unaudited, Dollars in Millions)
 
Three Months Ended
March 31,
2015  

 

2014
Revenue
Finance charge income $ 854 $ 830
Leased vehicle income 431 200
Other income   69   67
  1,354   1,097
Costs and expenses
Operating expenses 306 269
Leased vehicle expenses 327 156
Provision for loan losses 155 135
Interest expense   380   315
1,168 875
Equity income   28   -
Income before income taxes 214 222
Income tax provision   64   77
Net income $ 150 $ 145
       
 
Consolidated Balance Sheets
(Unaudited, Dollars in Millions)
 
March 31, 2015 December 31, 2014
Assets
Cash and cash equivalents $ 2,121 $

2,974

Finance receivables, net 32,470 33,000
Leased vehicles, net 8,939 7,060
Restricted cash 1,849 2,071
Goodwill 1,243 1,244
Equity in net assets of non-consolidated affiliates 929 --
Property and equipment, net 176 172
Deferred income taxes 283 341
Related party receivables 437 384
Other assets   899   478
Total assets $ 49,346 $

47,724

Liabilities and Shareholder's Equity
Liabilities
Secured debt $ 24,693 $ 25,214
Unsecured debt 14,432 12,217
Accounts payable and accrued expenses 970 1,002
Deferred income 546 392
Deferred income taxes 48 20
Taxes payable 205 234
Related party taxes payable 636 636
Related party payables 450 433
Other liabilities   163   184
Total liabilities   42,143   40,332
Shareholder's equity   7,203   7,392
Total liabilities and shareholder's equity $ 49,346 $ 47,724
 
 
Operational and Financial Data
(Unaudited, Dollars in Millions)
 
    Three Months Ended

March 31,

2015       2014

NorthAmerica

    International     Total

NorthAmerica

    International     Total
Consumer finance receivables originations $ 2,273 $ 1,805 $ 4,078

 

$ 1,364

 

$ 2,048

 

$ 3,412
GM lease originations $ 3,007 $ 17 $ 3,024 $ 773 $ - $ 773
GM new vehicle loans and leases as a percent of
total loan and lease originations 73.8 % 85.6 % 76.8 % 52.7 % 88.0 % 70.0 %
   
 
Three Months Ended
March 31,
2015    

 

2014

NorthAmerica

 

 

International  

 

Total

NorthAmerica

 

 

International  

 

Total
Average consumer finance receivables $ 13,860 $ 11,847 $ 25,707 $ 11,532 $ 11,950 $ 23,482
Average commercial finance receivables   3,140   4,497   7,637   2,038   4,674   6,712
Average finance receivables 17,000 16,344 33,344 13,570 16,624 30,194
Average leased vehicles, net   7,825   36   7,861   3,530   2   3,532
Average earning assets $ 24,825 $ 16,380 $ 41,205 $ 17,100 $ 16,626 $ 33,726
 
 
    March 31, 2015    

 

March 31, 2014

NorthAmerica

 

  International  

 

Total

NorthAmerica

 

 

International  

 

Total
Consumer finance receivables(a) $ 14,333 $ 11,299 $ 25,632 $ 11,646 $ 12,476 $ 24,122
Commercial finance receivables 3,260 4,347 7,607 2,190 4,918 7,108
Leased vehicles   8,898   41   8,939   3,724   2   3,726
Ending earning assets $ 26,491 $ 15,687 $ 42,178 $ 17,560 $ 17,396 $ 34,956

(a) Calculated using pre-acquisition consumer finance receivables – outstanding balance.

         
 
March 31, 2015

 

December 31, 2014

NorthAmerica

    International  

 

Total

NorthAmerica

    International     Total
Consumer

 

Consumer finance receivables,
net of fees(a) (b) $ 14,294 $ 11,297 $ 25,591 $ 13,361 $ 12,262 $ 25,623
Less: allowance for loan losses   (605 )   (87 )   (692 )   (577 )   (78 )   (655 )
Total consumer finance receivables, net   13,689     11,210     24,899     12,784     12,184     24,968  
Commercial
Commercial finance receivables, net of fees 3,260 4,347 7,607 3,180 4,892 8,072
Less: allowance for loan losses   (20 )   (16 )   (36 )   (21 )   (19 )   (40 )
Total commercial finance receivables, net   3,240     4,331     7,571     3,159     4,873     8,032  
Total finance receivables, net $ 16,929   $ 15,541   $ 32,470   $ 15,943   $

17,057

  $ 33,000  

(a) Amounts for International include $1.0 billion of direct-financing leases at March 31, 2015 and December 31, 2014.

(b) Calculated using pre-acquisition consumer finance receivables – carrying value.

         
 
March 31, 2015 December 31, 2014

NorthAmerica

    International     Total

NorthAmerica

    International     Total
Allowance for loan losses as a percentage of
consumer finance receivables, net of fees 4.2 % 0.8 % 2.7 % 4.4 % 0.6 % 2.6 %
Allowance for loan losses as a percentage of
commercial finance receivables, net of fees 0.6 % 0.4 % 0.5 % 0.7 % 0.4 % 0.5 %
         
 
March 31, 2015 March 31, 2014

NorthAmerica

    International     Total

NorthAmerica

    International     Total
Loan delinquency as a percent of ending
consumer finance receivables:
31 - 60 days 5.4 % 1.0 % 3.4 % 5.0 % 1.1 % 3.1 %
Greater than 60 days 1.8 % 0.9 % 1.4 % 1.8 % 1.0 % 1.4 %
Total 7.2 % 1.9 % 4.8 % 6.8 % 2.1 % 4.5 %
   
 
Three Months Ended
March 31,
2015       2014

NorthAmerica

    International     Total

NorthAmerica

    International     Total
Charge-offs $ 200 $ 34 $ 234

 

$ 192

 

$ 32

 

$ 224
Adjustments to reflect write-offs of the contractual
amounts on the pre-acquisition portfolio   7   1   8   24   3   27
Total credit losses $ 207 $ 35 $ 242 $ 216 $ 35 $ 251
 
 

The following table presents credit loss data with respect to our consumer finance receivables portfolio (dollars in millions):

   
Three Months Ended
March 31,
2015       2014

NorthAmerica

 

 

International(a)     Total

 

NorthAmerica

    International(a)     Total

Credit losses

$ 207 $ 35 $ 242 $ 216 $ 35 $ 251
Less: recoveries   (119 )   (12 )   (131 )   (128 )

 

  (17 )

 

  (145 )
Net credit losses $ 88   $ 23   $ 111   $ 88   $ 18   $ 106  
Net annualized credit losses as a percent of
average consumer finance receivables: 2.6 % 0.8 % 1.8 % 3.1 % 0.6 % 1.8 %
Recoveries as a percentage of gross
repossession credit losses: 57.7 %

 

 

59.1 %

 

 

(a) Credit losses for the international segment represent the write-down of defaulted receivables to net realizable value.

   
 

 

Three Months
Ended March 31,
2015       2014

NorthAmerica

    International     Total

NorthAmerica

    International     Total
Annualized operating expenses as a percent of
average earning assets(a) 2.6 % 3.6 % 3.0 % 2.8 % 3.7 % 3.2 %

(a) Excluding leased vehicle expenses.

General Motors Financial Company, Inc.
Stephen Jones, 817-302-7119

Source: General Motors Financial Company, Inc.


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