GM Financial Reports March Quarter 2018 Operating Results

  • March quarter net income of $369 million
  • Retail loan and lease originations of $10.8 billion for the March quarter
  • Earning assets of $88.1 billion at March 31, 2018
  • Available liquidity of $19.4 billion at March 31, 2018

FORT WORTH, Texas--()--GENERAL MOTORS FINANCIAL COMPANY, INC. (“GM Financial” or the “Company”) announced net income of $369 million for the quarter ended March 31, 2018, compared to $202 million for the quarter ended March 31, 2017.

Retail loan originations were $5.1 billion for the quarter ended March 31, 2018, compared to $4.4 billion for the quarter ended December 31, 2017, and $5.6 billion for the quarter ended March 31, 2017. The outstanding balance of retail finance receivables was $34.3 billion at March 31, 2018.

Operating lease originations were $5.7 billion for the quarter ended March 31, 2018, compared to $5.8 billion for the quarter ended December 31, 2017, and $6.3 billion for the quarter ended March 31, 2017. Leased vehicles, net was $43.4 billion at March 31, 2018.

The outstanding balance of commercial finance receivables was $10.4 billion at March 31, 2018, compared to $10.3 billion at December 31, 2017 and $8.5 billion at March 31, 2017.

Retail finance receivables 31-60 days delinquent were 3.7% of the portfolio at March 31, 2018 and 3.4% at March 31, 2017. Accounts more than 60 days delinquent were 1.7% of the portfolio at March 31, 2018 and 1.4% at March 31, 2017.

Annualized net charge-offs were 2.1% of average retail finance receivables for the quarter ended March 31, 2018 and 2.3% for the quarter ended March 31, 2017.

The Company had total available liquidity of $19.4 billion at March 31, 2018, consisting of $4.2 billion of cash and cash equivalents, $14.1 billion of borrowing capacity on unpledged eligible assets, $0.1 billion of borrowing capacity on committed unsecured lines of credit and $1.0 billion of borrowing capacity on the Junior Subordinated Revolving Credit Facility from GM.

Earnings resulting from the Company's equity investment in SAIC-GMAC, a joint venture that conducts auto finance operations in China, were $52 million for the quarter ended March 31, 2018 compared to $47 million for the quarter ended March 31, 2017.

Operating Results

On October 31, 2017, we completed the sale of certain of our European subsidiaries and branches (collectively, the "European Operations") to Banque PSA Finance S.A. and BNP Paribas Personal Finance S.A. The European Operations are presented as discontinued operations in our condensed consolidated financial statements for the three months ended March 31, 2017. Unless otherwise indicated, information in this release relates to our continuing operations.

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

This presentation contains several “forward-looking statements.” Forward-looking statements are those that use words such as “believe,” “expect,” “intend,” “plan,” “may,” “likely,” “should,” “estimate,” “continue,” “future” or "anticipate" and other comparable expressions. These words indicate future events and trends. Forward-looking statements 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 by us. 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, 2017. Such risks include - but are not limited to - GM’s ability to sell new vehicles that we finance in the markets we serve; the viability of GM-franchised dealers that are commercial loan customers; the availability and cost of sources of financing; our joint venture in China, which we cannot operate solely for our benefit and over which we have limited control; the level of net charge-offs, delinquencies and prepayments on the loans and leases we originate; the effect, interpretation or application of new or existing laws, regulations, court decisions and accounting pronouncements; the prices at which used cars are sold in the wholesale auction markets; vehicle return rates and the residual value performance on vehicles we lease; interest rate fluctuations and certain related derivatives exposure; foreign currency exchange rate fluctuations; our financial condition and liquidity, as well as future cash flows and earnings; changes in general economic and business conditions; competition; our ability to manage risks related to security breaches and other disruptions to our networks and systems; and changes in business strategy, including expansion of product lines and credit risk appetite, acquisitions and divestitures. If one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect, our actual results may vary materially from those expected, estimated or projected. 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.
Condensed Consolidated Statements of Income
(Unaudited, in millions)
 
Three Months Ended March 31,
2018     2017
Revenue
Finance charge income $ 866 $ 752
Leased vehicle income 2,447 1,931
Other income   98   65

Total revenue

  3,411   2,748
Costs and expenses
Operating expenses 365 330
Leased vehicle expenses 1,787 1,429
Provision for loan losses 136 211
Interest expense   732   596
Total costs and expenses 3,020 2,566
Equity income   52   47
Income from continuing operations before income taxes 443 229
Income tax provision   74   50
Income from continuing operations 369 179
Income from discontinued operations, net of tax     23
Net income $ 369 $ 202
Net income attributable to common shareholder $ 355 $ 202
         
 
Condensed Consolidated Balance Sheets
(Unaudited, in millions)
 
March 31, 2018 December 31, 2017
ASSETS
Cash and cash equivalents $ 4,178 $ 4,265
Finance receivables, net 43,773 42,172
Leased vehicles, net 43,444 42,882
Goodwill 1,198 1,197
Equity in net assets of non-consolidated affiliate 1,281 1,187
Related party receivables 659 309
Other assets   6,489   5,003
Total assets $ 101,022 $ 97,015
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Secured debt $ 39,441 $ 39,887
Unsecured debt 44,079 40,830
Deferred income 3,336 3,221
Related party payables 132 92
Other liabilities   3,286   2,691
Total liabilities   90,274   86,721
Shareholders' equity   10,748   10,294
Total liabilities and shareholders' equity $ 101,022 $ 97,015
         
 
Operational and Financial Data
(Unaudited, Dollars in millions)

Three Months Ended March 31,

Originations

2018 2017
Retail finance receivables originations $ 5,078 $ 5,607
GM lease originations $ 5,712 $ 6,273
GM new vehicle loans and leases as a percentage of total loan and lease originations 89.7 % 87.7 %
 
 
 
Three Months Ended March 31,

Average Earning Assets

2018 2017
Average retail finance receivables $ 33,471 $ 27,484
Average commercial finance receivables   10,068     7,963  
Average finance receivables 43,539 35,447
Average leased vehicles, net   43,177     35,751  
Average earning assets $ 86,716   $ 71,198  
         
 

Ending Earning Assets

March 31, 2018 March 31, 2017
Retail finance receivables, net of fees $ 34,320 $ 29,276
Commercial finance receivables, net of fees 10,365 8,504
Leased vehicles, net   43,444     37,090  
Ending earning assets $ 88,129   $ 74,870  
 
 

Total Finance Receivables

March 31, 2018 December 31, 2017
Retail
Retail finance receivables, net of fees(a) $ 34,320 $ 32,802
Less: allowance for loan losses   (858 )   (889 )
Total retail finance receivables, net   33,462     31,913  
Commercial
Commercial finance receivables, net of fees 10,365 10,312
Less: allowance for loan losses   (54 )   (53 )
Total commercial finance receivables, net   10,311     10,259  
Total finance receivables, net $ 43,773   $ 42,172  
 

(a)

Net of unearned income, unamortized premiums and discounts, and deferred fees and costs of $217 million and $228 million at March 31, 2018 and December 31, 2017.

         
 

Allowance for Loan Losses

March 31, 2018 December 31, 2017
Allowance for loan losses as a percentage of retail finance receivables, net of fees 2.5 % 2.7 %
Allowance for loan losses as a percentage of commercial finance receivables, net of fees 0.5 % 0.5 %
 
 

Delinquencies

March 31, 2018 March 31, 2017
Loan delinquency as a percentage of ending retail finance receivables:
31 - 60 days 3.7 % 3.4 %
Greater than 60 days 1.7   1.4  
Total 5.4 % 4.8 %
         
 

Three Months Ended March 31,

Charge-offs and Recoveries

2018 2017
Charge-offs $ 295 $ 298
Less: recoveries   (123 )   (143 )
Net charge-offs $ 172   $ 155  
Net charge-offs as an annualized percentage of average retail finance receivables 2.1 % 2.3 %
Recovery rate as a percentage of gross repossession charge-offs in North America 53.1 % 51.6 %
 
 
Three Months Ended March 31,

Operating Expenses

2018 2017
Operating expenses as an annualized percentage of average earning assets 1.7 % 1.9 %

Contacts

General Motors Financial Company, Inc.
Stephen Jones, 817-302-7119
Vice President, Investor Relations
Investors@gmfinancial.com

Contacts

General Motors Financial Company, Inc.
Stephen Jones, 817-302-7119
Vice President, Investor Relations
Investors@gmfinancial.com