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GM Financial Reports September Quarter 2015 Operating Results

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October 21, 2015 7:43 AM EDT
  • September quarter net income of $179 million
  • Consumer loan and lease originations of $10.9 billion
  • End of period earning assets of $52.7 billion
  • Available liquidity of $11.6 billion at quarter end

FORT WORTH, Texas--(BUSINESS WIRE)-- GENERAL MOTORS FINANCIAL COMPANY, INC. (“GM Financial” or the “Company”) announced net income of $179 million for the quarter ended September 30, 2015, compared to $158 million for the quarter ended September 30, 2014. Earnings for the nine months ended September 30, 2015 were $515 million, compared to $478 million for the nine months ended September 30, 2014.

Consumer loan originations were $4.7 billion for the quarter ended September 30, 2015, compared to $4.3 billion for the quarter ended June 30, 2015, and $4.1 billion for the quarter ended September 30, 2014. Consumer loan originations for the nine months ended September 30, 2015 were $13.1 billion, compared to $11.1 billion for the nine months ended September 30, 2014. The outstanding balance of consumer finance receivables was $28.0 billion at September 30, 2015.

Operating lease originations were $6.2 billion for the quarter ended September 30, 2015, compared to $5.6 billion for the quarter ended June 30, 2015, and $1.8 billion for the quarter ended September 30, 2014. Operating lease originations for the nine months ended September 30, 2015 were $14.8 billion, compared to $4.1 billion for the nine months ended September 30, 2014. Leased vehicles, net was $16.9 billion at September 30, 2015.

The outstanding balance of commercial finance receivables was $7.8 billion at September 30, 2015 compared to $7.2 billion at September 30, 2014.

Consumer finance receivables 31-to-60 days delinquent were 4.0% of the portfolio at September 30, 2015, compared to 3.9% at September 30, 2014. Accounts more than 60 days delinquent were 1.6% of the portfolio at September 30, 2015, compared to 1.7% at September 30, 2014.

Annualized net credit losses were 1.9% of average consumer finance receivables for the quarter ended September 30, 2015, compared to 2.0% for the quarter ended September 30, 2014. For the nine months ended September 30, 2015, annualized consumer net credit losses were 1.7%, compared to 1.8% for the nine months ended September 30, 2014.

The Company had total available liquidity of $11.6 billion at September 30, 2015, consisting of $1.6 billion of cash and cash equivalents, $8.0 billion of borrowing capacity on unpledged eligible assets, $1.0 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, in millions)
 
Three Months Ended Nine Months Ended
September 30, September 30,
2015

 

2014 2015   2014
Revenue
Finance charge income $ 842 $ 883 $ 2,544 $ 2,595
Leased vehicle income 797 297 1,827 735
Other income   68   81   205   219
Total revenue   1,707   1,261   4,576   3,549
Costs and expenses
Operating expenses 320 297 945 846
Leased vehicle expenses 629 228 1,423 563
Provision for loan losses 144 160 440 408
Interest expense   412   368   1,183   1,037
Total costs and expenses 1,505 1,053 3,991 2,854
Equity income   29   —   85   —
Income before income taxes 231 208 670 695
Income tax provision   52   50   155   217
Net income $ 179 $ 158 $ 515 $ 478
     
 
Consolidated Balance Sheets
(Unaudited, in millions)
 
September 30, 2015 December 31, 2014
Assets
Cash and cash equivalents $ 1,602 $ 2,974
Finance receivables, net 35,074 33,000
Leased vehicles, net 16,915 7,060
Restricted cash 1,928 2,071
Goodwill 1,243 1,244
Equity in net assets of non-consolidated affiliates 978 —
Property and equipment, net of accumulated depreciation 207 172
Deferred income taxes 236 341
Related party receivables 589 384
Other assets   774   478
Total assets $ 59,546 $ 47,724
Liabilities and Shareholder's Equity
Liabilities
Secured debt $ 28,284 $ 25,214
Unsecured debt 19,975 12,217
Accounts payable and accrued expenses 1,094 1,002
Deferred income 1,205 392
Deferred income taxes 84 20
Related party taxes payable 649 636
Related party payables 527 433
Other liabilities   324   418
Total liabilities   52,142   40,332
Shareholder's equity   7,404   7,392
Total liabilities and shareholder's equity $ 59,546 $ 47,724
   
 
Operational and Financial Data
(Unaudited, in millions)
 
Three Months Ended
September 30,
2015   2014

NorthAmerica

  International   Total

NorthAmerica

  International   Total
Consumer finance receivables originations $ 3,155 $ 1,586 $ 4,741 $ 1,957

 

$ 2,127

 

$ 4,084
GM lease originations $ 6,161 $ 19 $ 6,180 $ 1,742 $ 13 $ 1,755
GM new vehicle loans and leases as a

percent of total loan and lease originations

87.8 % 84.5 % 87.3 % 65.5 % 87.7 % 73.6 %
   
 
Nine Months Ended
September 30,
2015   2014

NorthAmerica

  International   Total

NorthAmerica

  International   Total
Consumer finance receivables originations $ 8,070 $ 5,037 $ 13,107 $ 4,874 $ 6,255 $ 11,129
GM lease originations $ 14,755 $ 56 $ 14,811 $ 4,064 $ 13 $ 4,077
GM new vehicle loans and leases as a

percent of total loan and lease originations

83.0 % 84.8 % 83.3 % 62.7 % 87.6 % 73.0 %
       
 
Three Months Ended
September 30,
2015

 

2014

NorthAmerica

 

International

 

Total

NorthAmerica

 

International

 

Total
Average consumer finance receivables $ 16,435 $ 11,396 $ 27,831 $ 12,383 $ 12,943 $ 25,326
Average commercial finance receivables   3,475   4,258   7,733   2,404   4,519   6,923
Average finance receivables 19,910 15,654 35,564 14,787 17,462 32,249
Average leased vehicles, net   14,875   66   14,941   5,299   5   5,304
Average earning assets $ 34,785 $ 15,720 $ 50,505 $ 20,086 $ 17,467 $ 37,553
       
 
Nine Months Ended
September 30,
2015   2014

NorthAmerica

  International   Total

NorthAmerica

  International   Total
Average consumer finance receivables $ 15,084 $ 11,650 $ 26,734 $ 11,924 $ 12,585 $ 24,509
Average commercial finance receivables   3,312   4,358   7,670   2,235   4,649   6,884
Average finance receivables 18,396 16,008 34,404 14,159 17,234 31,393
Average leased vehicles, net   11,236   50   11,286   4,352   3   4,355
Average earning assets $ 29,632 $ 16,058 $ 45,690 $ 18,511 $ 17,237 $ 35,748
         
 
September 30, 2015

 

September 30, 2014

NorthAmerica

 

International

 

Total

NorthAmerica

 

International

 

Total
Consumer finance receivables $ 16,994 $ 10,993 $ 27,987 $ 12,674 $ 12,604 $ 25,278
Commercial finance receivables 3,503 4,342 7,845 2,513 4,638 7,151
Leased vehicles   16,843   72   16,915   5,785   11   5,796
Ending earning assets $ 37,340 $ 15,407 $ 52,747 $ 20,972 $ 17,253 $ 38,225
     
 
September 30, 2015 December 31, 2014

NorthAmerica

  International

 

Total

NorthAmerica

  International   Total
Consumer

 

Consumer finance receivables,

net of fees(a)

$ 16,994 $ 10,993 $ 27,987 $ 13,361 $ 12,262 $ 25,623
Less: allowance for loan losses   (623 )   (95 )   (718 )   (577 )   (78 )   (655 )
Total consumer finance receivables, net   16,371     10,898     27,269     12,784     12,184     24,968  
Commercial
Commercial finance receivables,
net of fees 3,503 4,342 7,845 3,180 4,892 8,072
Less: allowance for loan losses   (21 )   (19 )   (40 )   (21 )   (19 )   (40 )
Total commercial finance receivables, net   3,482     4,323     7,805     3,159     4,873     8,032  
Total finance receivables, net $ 19,853   $ 15,221   $ 35,074   $ 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 September 30, 2015 and December 31, 2014.

     
 
September 30, 2015 December 31, 2014

NorthAmerica

  International   Total

NorthAmerica

  International   Total

Allowance for loan losses as a percentage

of consumer finance receivables,
net of fees 3.7 % 0.9 % 2.6 % 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 %
     
 
September 30, 2015 September 30, 2014

NorthAmerica

  International   Total

NorthAmerica

  International   Total

Loan delinquency as a percent of ending

consumer finance receivables:
31 - 60 days 6.1 % 0.9 % 4.0 % 6.8 % 0.9 % 3.9 %
Greater than 60 days 2.1 % 0.8 % 1.6 % 2.4 % 1.0 % 1.7 %
Total 8.2 % 1.7 % 5.6 % 9.2 % 1.9 % 5.6 %
 
 
Three Months Ended
September 30,
2015   2014

NorthAmerica

  International(a)   Total

NorthAmerica

  International(a)   Total
Charge-offs $ 221 $ 35 $ 256 $ 194 $ 36 $ 230

Adjustments to reflect write-offs of the

contractual amounts on loans acquired

with deteriorated credit quality   4     —     4     13     2     15  
Total Credit Losses $ 225 $ 35 $ 260 $ 207 $ 38 $ 245
Less: recoveries   (117 )   (13 )   (130 )   (106 )   (12 )   (118 )
Net credit losses $ 108   $ 22   $ 130   $ 101   $ 26   $ 127  

Net annualized credit losses as a percent of

average consumer finance receivables:

2.6 % 0.8 % 1.9 % 3.2 % 0.8 % 2.0 %
Recoveries as a percentage of gross
repossession credit losses: 56.2 % 56.6 %

(a)

 

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

 
 
Nine Months Ended
September 30,
2015   2014

NorthAmerica

  International(a)   Total

NorthAmerica

  International(a)   Total
Charge-offs $ 609 $ 101 $ 710 $ 543 $ 102 $ 645

Adjustments to reflect write-offs of the

contractual amounts on loans acquired

with deteriorated credit quality   15     1     16     52     7     59  
Total Credit Losses $ 624 $ 102 $ 726 $ 595 $ 109 $ 704
Less: recoveries   (342 )   (36 )   (378 )   (339 )   (45 )   (384 )
Net credit losses $ 282   $ 66   $ 348  

$

256   $ 64   $ 320  

Net annualized credit losses as a percent of

average consumer finance receivables:

2.5 % 0.8 % 1.7 % 2.9 % 0.7 % 1.8 %
Recoveries as a percentage of gross
repossession credit losses: 57.5 % 59.0 %

(a)

 

Credit losses for the International Segment primarily include the write-down of defaulted 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
September 30,
2015   2014

NorthAmerica

  International   Total

NorthAmerica

  International   Total
Annualized operating expenses as a

percent of average earning assets(a)

2.1 % 3.4 % 2.5 % 2.8 % 3.6 % 3.1 %
   
 
Nine Months Ended
September 30,
2015   2014

NorthAmerica

  International   Total

NorthAmerica

  International   Total
Annualized operating expenses as a

percent of average earning assets(a)

2.4 % 3.5 % 2.8 % 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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