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GM Financial Reports March Quarter 2016 Operating Results

April 21, 2016 7:43 AM EDT
  • March quarter net income of $164 million
  • Consumer loan and lease originations of $10.9 billion for the March quarter
  • End of period earning assets of $64.0 billion
  • Available liquidity of $12.7 billion at quarter end

FORT WORTH, Texas--(BUSINESS WIRE)-- GENERAL MOTORS FINANCIAL COMPANY, INC. (“GM Financial” or the “Company”) announced net income of $164 million for the quarter ended March 31, 2016, compared to $150 million for the quarter ended March 31, 2015.

Retail loan originations were $4.1 billion for the quarter ended March 31, 2016, compared to $4.4 billion for the quarter ended December 31, 2015, and $4.1 billion for the quarter ended March 31, 2015. The outstanding balance of retail finance receivables was $30.3 billion at March 31, 2016.

Operating lease originations were $6.8 billion for the quarter ended March 31, 2016, compared to $5.4 billion for the quarter ended December 31, 2015, and $3.0 billion for the quarter ended March 31, 2015. Leased vehicles, net was $24.5 billion at March 31, 2016.

The outstanding balance of commercial finance receivables was $9.2 billion at March 31, 2016 compared to $8.4 billion at December 31, 2015 and $7.6 billion at March 31, 2015.

Retail finance receivables 31-60 days delinquent were 3.1% of the portfolio at March 31, 2016 and 3.4% at March 31, 2015. Accounts more than 60 days delinquent were 1.4% of the portfolio at March 31, 2016 and 2015.

Annualized net credit losses were 1.9% of average retail finance receivables for the quarter ended March 31, 2016 and 1.8% for the quarter ended March 31, 2015.

The Company had total available liquidity of $12.7 billion at March 31, 2016, consisting of $2.9 billion of cash and cash equivalents, $8.4 billion of borrowing capacity on unpledged eligible assets, $0.4 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.

Additionally, earnings resulting from the Company's equity investment in SAIC-GMAC, a joint venture that conducts auto finance operations in China, were $36 million for the three months ended March 31, 2016 compared to $28 million for the three months ended March 31, 2015.

About GM Financial

General Motors Financial Company, Inc. is the wholly-owned captive finance 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 and cost 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,
2016  

 

2015
Revenue
Finance charge income $ 818 $ 854
Leased vehicle income 1,184 431
Other income   73   69
Total revenue   2,075   1,354
Costs and expenses
Operating expenses 334 306
Leased vehicle expenses 893 327
Provision for loan losses 196 155
Interest expense   463   380
Total costs and expenses 1,886 1,168
Equity income   36   28
Income before income taxes 225 214
Income tax provision   61   64
Net income $ 164 $ 150
       
 
Consolidated Balance Sheets
(Unaudited, Dollars in millions)
 
March 31, 2016 December 31, 2015
Assets
Cash and cash equivalents $ 2,898 $ 3,061
Finance receivables, net 38,658 36,781
Leased vehicles, net 24,538 20,172
Restricted cash 2,130 1,941
Goodwill 1,195 1,189
Equity in net assets of non-consolidated affiliates 989 986
Property and equipment, net of accumulated depreciation 230 219
Deferred income taxes 251 231
Related party receivables 1,076 573
Other assets   799   751
Total assets $ 72,764 $ 65,904
Liabilities and Shareholder's Equity
Liabilities
Secured debt $ 32,733 $ 30,689
Unsecured debt 27,638 23,657
Accounts payable and accrued expenses 1,236 1,218
Deferred income 1,783 1,454
Deferred income taxes 161 129
Related party payables 448 362
Other liabilities   390   343
Total liabilities   64,389   57,852
Shareholder's equity   8,375   8,052
Total liabilities and shareholder's equity $ 72,764 $ 65,904
             
 
Operational and Financial Data
(Unaudited, Dollars in millions)
 
Three Months Ended
March 31,
2016     2015

NorthAmerica

    International       Total

NorthAmerica

International Total
Retail finance receivables originations $ 2,580 $ 1,563 $ 4,143 $

2,273

$

1,805

$ 4,078
GM lease originations $ 6,720 $ 32 $ 6,752 $ 3,007 $ 17 $ 3,024

GM new vehicle loans and leases as a

   percent of total loan and lease originations

89.1 % 86.5 % 88.7 % 73.8 % 85.6 % 76.8 %
 
 
Three Months Ended
March 31,
2016 2015

NorthAmerica

International

 

Total

NorthAmerica

International

Total

Average retail finance receivables $ 18,622 $ 10,963 $ 29,585 $ 13,860 $ 11,847 $ 25,707
Average commercial finance receivables   4,109     4,510     8,619     3,140     4,497     7,637  
Average finance receivables 22,731 15,473 38,204 17,000 16,344 33,344
Average leased vehicles, net   22,190     97     22,287     7,825     36     7,861  
Average earning assets $ 44,921   $ 15,570   $ 60,491   $ 24,825   $ 16,380   $ 41,205  
 
 
March 31, 2016

 

March 31, 2015

NorthAmerica

International

 

Total

 

NorthAmerica

International

Total
Retail finance receivables $ 18,806 $ 11,466 $ 30,272 $ 14,333 $ 11,299 $ 25,632
Commercial finance receivables 4,427 4,802 9,229 3,260 4,347 7,607
Leased vehicles   24,422     116     24,538     8,898     41     8,939  
Ending earning assets $ 47,655   $ 16,384   $ 64,039   $ 26,491   $ 15,687   $ 42,178  
         
 
March 31, 2016 December 31, 2015

NorthAmerica

    International  

 

Total

NorthAmerica

    International     Total
Retail

 

Retail finance receivables,   net of fees(a,b)

$ 18,806 $ 11,466 $ 30,272 $ 18,148 $ 10,976 $ 29,124
Less: allowance for loan losses   (673 )   (123 )   (796 )   (618 )   (117 )   (735 )
Total retail finance receivables, net   18,133     11,343     29,476     17,530     10,859     28,389  
Commercial

Commercial finance receivables,

   net of fees

4,427 4,802 9,229 4,051 4,388 8,439
Less: allowance for loan losses   (25 )   (22 )   (47 )   (23 )   (24 )   (47 )
Total commercial finance receivables, net   4,402     4,780     9,182     4,028     4,364     8,392  
Total finance receivables, net $ 22,535   $ 16,123   $ 38,658   $ 21,558   $ 15,223   $ 36,781  

(a)

 

Includes $1.2 billion and $1.1 billion of direct-financing leases at March 31, 2016 and December 31, 2015.

(b)

Net of unearned income, unamortized premiums and discounts, and deferred fees and costs of $195 million and $179 million at March 31, 2016 and December 31, 2015.

         
 
March 31, 2016 December 31, 2015

NorthAmerica

    International     Total

NorthAmerica

    International     Total

Allowance for loan losses as a percentage   of retail finance receivables,   net of fees

3.6 % 1.1 % 2.6 % 3.4 % 1.1 % 2.5 %

Allowance for loan losses as a percentage   of commercial finance receivables,   net of fees

0.6 % 0.5 % 0.5 % 0.6 % 0.5 % 0.6 %
         
 
March 31, 2016 March 31, 2015

NorthAmerica

    International     Total

NorthAmerica

    International     Total

Loan delinquency as a percent of endingretail finance receivables:

31 - 60 days 4.5 %

1.0

%

3.1

%

5.4

%

1.0

%

3.4

%

Greater than 60 days 1.6 %

0.9

%

1.4

%

1.8

%

0.9

%

1.4

%

Total 6.1 %

1.9

%

4.5

%

7.2

%

1.9

%

4.8

%

   
 
Three Months Ended
March 31,
2016       2015

NorthAmerica

    International     Total

NorthAmerica

    International     Total
Charge-offs $ 259 $ 34 $ 293 $ 200 $ 34 $ 234

Adjustments to reflect write-offs of the   contractual amounts on loans acquired   with deteriorated credit quality

  2         2     7     1     8  
Total credit losses $ 261 $ 34 $ 295 $ 207 $ 35 $ 242
Less: recoveries   (144 )   (11 )   (155 )   (119 )   (12 )   (131 )
Net credit losses $ 117   $ 23   $ 140   $ 88   $ 23   $ 111  

Net annualized credit losses as a percent of   average retail finance receivables:

2.5 % 0.8 % 1.9 % 2.6 % 0.8 % 1.8 %

Recoveries as a percentage of gross

   repossession credit losses:(a)

54.1 % 57.7 %

(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
March 31,
2016     2015

NorthAmerica

    International     Total

NorthAmerica

    International     Total

Annualized operating expenses as a

   percent of average earning assets(a)

1.8 % 3.5 % 2.2 % 2.6 % 3.6 % 3.0 %

(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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