GM Financial Reports June Quarter 2016 Operating Results

July 21, 2016 7:41 AM

June quarter net income of $189 million
Consumer loan and lease originations of $10.7 billion for the June quarter
End of period earning assets of $68.7 billion
Available liquidity of $15.4 billion at quarter end

FORT WORTH, Texas--(BUSINESS WIRE)-- GENERAL MOTORS FINANCIAL COMPANY, INC. (“GM Financial” or the “Company”) announced net income of $189 million for the quarter ended June 30, 2016, compared to $186 million for the quarter ended June 30, 2015. Net income for the six months ended June 30, 2016 was $353 million, compared to $336 million for the six months ended June 30, 2015.

Retail loan originations were $4.2 billion for the quarter ended June 30, 2016, compared to $4.1 billion for the quarter ended March 31, 2016, and $4.3 billion for the quarter ended June 30, 2015. Retail loan originations for the six months ended June 30, 2016 were $8.3 billion, compared to $8.4 billion for the six months ended June 30, 2015. The outstanding balance of retail finance receivables was $30.9 billion at June 30, 2016.

Operating lease originations were $6.5 billion for the quarter ended June 30, 2016, compared to $6.8 billion for the quarter ended March 31, 2016, and $5.6 billion for the quarter ended June 30, 2015. Operating lease originations for the six months ended June 30, 2016 were $13.3 billion, compared to $8.6 billion for the six months ended June 30, 2015. Leased vehicles, net was $28.4 billion at June 30, 2016.

The outstanding balance of commercial finance receivables was $9.4 billion at June 30, 2016 compared to $9.2 billion at March 31, 2016 and $7.8 billion at June 30, 2015.

Retail finance receivables 31-60 days delinquent were 3.4% of the portfolio at June 30, 2016 and 3.6% at June 30, 2015. Accounts more than 60 days delinquent were 1.5% of the portfolio at June 30, 2016 and 1.6% at June 30, 2015.

Annualized net charge-offs were 1.7% of average retail finance receivables for the quarter ended June 30, 2016 and 1.6% for the quarter ended June 30, 2015. For the six months ended June 30, 2016, annualized retail net charge-offs were 1.8%, compared to 1.7% for the six months ended June 30, 2015.

The Company had total available liquidity of $15.4 billion at June 30, 2016, consisting of $3.1 billion of cash and cash equivalents, $10.7 billion of borrowing capacity on unpledged eligible assets, $0.6 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 $37 million for the three months ended June 30, 2016 compared to $28 million for the three months ended June 30, 2015. Earnings for the six months ended June 30, 2016 were $73 million, compared to $56 million for the six months ended June 30, 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, Latin America, China and Europe, particularly the United Kingdom where automobile sales may be negatively impacted due to the passage of the referendum to discontinue membership in the European Union; 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 June 30,				Six Months Ended June 30,
		2016		2015		2016		2015
Revenue
Finance charge income	$	826	$	848	$	1,644	$	1,702
Leased vehicle income		1,390		599		2,574		1,030
Other income		76		68		149		137
Total revenue		2,292		1,515		4,367		2,869
Costs and expenses
Operating expenses		343		319		677		625
Leased vehicle expenses		1,068		467		1,961		794
Provision for loan losses		151		141		347		296
Interest expense		501		391		964		771
Total costs and expenses		2,063		1,318		3,949		2,486
Equity income		37		28		73		56
Income before income taxes		266		225		491		439
Income tax provision		77		39		138		103
Net income	$	189	$	186	$	353	$	336



Consolidated Balance Sheets
(Unaudited, Dollars in millions)

	June 30, 2016		December 31, 2015
Assets
Cash and cash equivalents	$	3,102	$	3,061
Finance receivables, net		39,430		36,781
Leased vehicles, net		28,442		20,172
Restricted cash		2,010		1,941
Goodwill		1,200		1,189
Equity in net assets of non-consolidated affiliates		879		986
Property and equipment, net of accumulated depreciation		245		219
Deferred income taxes		307		231
Related party receivables		979		573
Other assets		1,009		751
Total assets	$	77,603	$	65,904
Liabilities and Shareholder's Equity
Liabilities
Secured debt	$	34,338	$	30,689
Unsecured debt		30,162		23,657
Accounts payable and accrued expenses		1,537		1,218
Deferred income		2,035		1,454
Deferred income taxes		251		129
Related party payables		449		362
Other liabilities		358		343
Total liabilities		69,130		57,852
Shareholder's equity		8,473		8,052
Total liabilities and shareholder's equity	$	77,603	$	65,904



Operational and Financial Data
(Unaudited, Dollars in millions)

	Three Months Ended June 30,
	2016									2015
	NorthAmerica			International			Total			NorthAmerica			International			Total
Retail finance receivables originations	$	2,545		$	1,651		$	4,196		$	2,642		$	1,646		$	4,288
GM lease originations	$	6,447		$	69		$	6,516		$	5,587		$	20		$	5,607
GM new vehicle loans and leases as a percent of total
loan and lease originations		87.5	%		87.1	%		87.5	%		83.5	%		84.2	%		83.6	%



	Six Months Ended June 30,
	2016									2015
	NorthAmerica			International			Total			NorthAmerica			International			Total
Retail finance receivables originations	$	5,125		$	3,214		$	8,339		$	4,915		$	3,451		$	8,366
GM lease originations	$	13,167		$	101		$	13,268		$	8,594		$	37		$	8,631
GM new vehicle loans and leases as a percent of total
loan and lease originations		88.3	%		86.8	%		88.1	%		79.7	%		84.9	%		80.8	%



	Three Months Ended June 30,
	2016						2015
	NorthAmerica		International		Total		NorthAmerica		International		Total
Average retail finance receivables	$	19,078	$	11,491	$	30,569	$	14,927	$	11,666	$	26,593
Average commercial finance receivables		4,614		4,672		9,286		3,359		4,301		7,660
Average finance receivables		23,692		16,163		39,855		18,286		15,967		34,253
Average leased vehicles, net		26,311		141		26,452		10,826		50		10,876
Average earning assets	$	50,003	$	16,304	$	66,307	$	29,112	$	16,017	$	45,129



	Six Months Ended June 30,
	2016						2015
	NorthAmerica		International		Total		NorthAmerica		International		Total
Average retail finance receivables	$	18,850	$	11,193	$	30,043	$	14,396	$	11,822	$	26,218
Average commercial finance receivables		4,352		4,560		8,912		3,248		4,406		7,654
Average finance receivables		23,202		15,753		38,955		17,644		16,228		33,872
Average leased vehicles, net		24,226		120		24,346		9,387		43		9,430
Average earning assets	$	47,428	$	15,873	$	63,301	$	27,031	$	16,271	$	43,302



	June 30, 2016						June 30, 2015
	NorthAmerica		International		Total		NorthAmerica		International		Total
Retail finance receivables	$	19,429	$	11,432	$	30,861	$	15,490	$	11,840	$	27,330
Commercial finance receivables		4,833		4,600		9,433		3,515		4,300		7,815
Leased vehicles		28,278		164		28,442		12,846		58		12,904
Ending earning assets	$	52,540	$	16,196	$	68,736	$	31,851	$	16,198	$	48,049



	June 30, 2016									December 31, 2015
	NorthAmerica			International			Total			NorthAmerica			International			Total
Retail
Retail finance receivables, net of fees(a,b)	$	19,429		$	11,432		$	30,861		$	18,148		$	10,976		$	29,124
Less: allowance for loan losses		(687	)		(127	)		(814	)		(618	)		(117	)		(735	)
Total retail finance receivables, net		18,742			11,305			30,047			17,530			10,859			28,389
Commercial
Commercial finance receivables, net of fees		4,833			4,600			9,433			4,051			4,388			8,439
Less: allowance for loan losses		(29	)		(21	)		(50	)		(23	)		(24	)		(47	)
Total commercial finance receivables, net		4,804			4,579			9,383			4,028			4,364			8,392
Total finance receivables, net	$	23,546		$	15,884		$	39,430		$	21,558		$	15,223		$	36,781

(a)		Includes $1.3 billion and $1.1 billion of direct-financing leases at June 30, 2016 and December 31, 2015.

(b)		Net of unearned income, unamortized premiums and discounts, and deferred fees and costs of $190 million and $179 million at June 30, 2016 and December 31, 2015.



	June 30, 2016						December 31, 2015
	NorthAmerica		International		Total		NorthAmerica		International		Total
Allowance for loan losses as a percentage of retail finance
receivables, net of fees	3.5	%	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	%



	June 30, 2016						June 30, 2015
	NorthAmerica		International		Total		NorthAmerica		International		Total
Loan delinquency as a percent of ending retail finance
receivables:
31 - 60 days	4.9	%	1.0	%	3.4	%	5.9	%	1.1	%	3.6	%
Greater than 60 days	1.9	%	0.9	%	1.5	%	2.1	%	1.0	%	1.6	%
Total	6.8	%	1.9	%	4.9	%	8.0	%	2.1	%	5.2	%



	Three Months Ended June 30,
	2016									2015
	NorthAmerica			International			Total			NorthAmerica			International			Total
Charge-offs	$	228		$	38		$	266		$	188		$	32		$	220
Less: recoveries		(121	)		(12	)		(133	)		(100	)		(11	)		(111	)
Net charge-offs	$	107		$	26		$	133		$	88		$	21		$	109
Net annualized charge-offs as a percent of average
retail finance receivables		2.3	%		0.9	%		1.7	%		2.4	%		0.7	%		1.6	%
Recoveries as a percentage of gross repossession
charge-offs(a)		54.8	%								58.8	%

(a)

Charge-offs 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 charge-offs is not meaningful.



	Six Months Ended June 30,
	2016									2015
	NorthAmerica			International			Total			NorthAmerica			International			Total
Charge-offs	$	487		$	72		$	559		$	388		$	66		$	454
Less: recoveries		(260	)		(23	)		(283	)		(210	)		(23	)		(233	)
Net charge-offs	$	227		$	49		$	276		$	178		$	43		$	221
Net annualized charge-offs as a percent of average
retail finance receivables		2.4	%		0.9	%		1.8	%		2.5	%		0.7	%		1.7	%
Recoveries as a percentage of gross repossession
charge-offs(a)		54.4	%								58.2	%

(a)



	Three Months Ended June 30,
	2016						2015
	NorthAmerica		International		Total		NorthAmerica		International		Total
Annualized operating expenses as a percent of average
earning assets	1.7	%	3.2	%	2.1	%	2.5	%	3.4	%	2.8	%



	Six Months Ended June 30,
	2016						2015
	NorthAmerica		International		Total		NorthAmerica		International		Total
Annualized operating expenses as a percent of average
earning assets	1.8	%	3.3	%	2.2	%	2.6	%	3.5	%	2.9	%

View source version on businesswire.com: http://www.businesswire.com/news/home/20160721005627/en/

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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GM Financial Reports June Quarter 2016 Operating Results

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