GM Financial Reports Third Quarter 2019 Operating Results

  • Third quarter net income of $516 million
  • Retail loan and operating lease originations of $11.3 billion for the third quarter
  • Earning assets of $97.8 billion at September 30, 2019
  • Available liquidity of $27.2 billion at September 30, 2019

FORT WORTH, Texas--()--GENERAL MOTORS FINANCIAL COMPANY, INC. (“GM Financial” or the “Company”) announced net income of $516 million for the quarter ended September 30, 2019, compared to $441 million for the quarter ended September 30, 2018. Net income for the nine months ended September 30, 2019 was $1.2 billion, compared to $1.3 billion for the nine months ended September 30, 2018.

Retail loan originations were $5.4 billion for the quarter ended September 30, 2019, compared to $6.7 billion for the quarter ended September 30, 2018. Retail loan originations for the nine months ended September 30, 2019 were $19.7 billion, compared to $17.8 billion for the nine months ended September 30, 2018. The outstanding balance of retail finance receivables, net of fees was $42.0 billion at September 30, 2019, compared to $40.7 billion at December 31, 2018 and $37.9 billion at September 30, 2018.

Operating lease originations were $5.8 billion for the quarter ended September 30, 2019, compared to $5.4 billion for the quarter ended September 30, 2018. Operating lease originations for the nine months ended September 30, 2019 were $17.0 billion, compared to $17.3 billion for the nine months ended September 30, 2018. Leased vehicles, net was $42.5 billion at September 30, 2019, compared to $43.6 billion at December 31, 2018 and $44.1 billion at September 30, 2018.

The outstanding balance of commercial finance receivables, net of fees was $13.3 billion at September 30, 2019, compared to $12.7 billion at December 31, 2018 and $11.1 billion at September 30, 2018.

Retail finance receivables 31-60 days delinquent were 3.0% of the portfolio at September 30, 2019 and 3.4% at September 30, 2018. Accounts more than 60 days delinquent were 1.2% of the portfolio at September 30, 2019 and 1.3% at September 30, 2018.

Annualized net charge-offs were 1.6% of average retail finance receivables for the quarter ended September 30, 2019 and 1.7% for the quarter ended September 30, 2018. For the nine months ended September 30, 2019, annualized net charge-offs were 1.5%, compared to 1.8% for the nine months ended September 30, 2018.

The Company had total available liquidity of $27.2 billion at September 30, 2019, consisting of $3.2 billion of cash and cash equivalents, $20.7 billion of borrowing capacity on unpledged eligible assets, $0.3 billion of borrowing capacity on committed unsecured lines of credit, $1.0 billion of borrowing capacity on the Junior Subordinated Revolving Credit Facility from GM, and $2.0 billion of borrowing capacity on the GM Revolving 364-Day Credit Facility.

Earnings resulting from the Company's equity investment joint ventures that conduct automotive finance operations in China were $39 million for the quarter ended September 30, 2019, compared to $44 million for the quarter ended September 30, 2018. Earnings for the nine months ended September 30, 2019 were $126 million, compared to $141 million for the nine months ended September 30, 2018.

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. In lieu of a conference call, management recorded remarks addressing the Company’s results of operations for the quarter and nine months ended September 30, 2019. This recording, along with the presentation slides and this release, will be posted to the Company’s website on October 29, 2019 by 11:00 a.m. central time. The recording and materials can be accessed via the Investor Relations section of the Company’s website at www.gmfinancial.com.

Forward-Looking Statements

This release 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, 2018. 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; changes in the automotive industry that result in a change in demand for vehicles and related vehicle financing; the sufficiency, availability and cost of sources of financing, including credit facilities, securitization programs and secured and unsecured debt issuances; our joint ventures in China, which we cannot operate solely for our benefit and over which we have limited control; the adequacy of our underwriting criteria for loans and leases and the level of net charge-offs, delinquencies and prepayments on the loans and leases we purchase or originate; the adequacy of our allowance for loan losses on our finance receivables; the effect, interpretation or application of new or existing laws, regulations, court decisions and accounting pronouncements; adverse determinations with respect to the application of existing laws, or the results of any audits from tax authorities, as well as changes in tax laws and regulations, supervision, enforcement and licensing across various jurisdictions; the prices at which used vehicles are sold in the wholesale auction markets; vehicle return rates, our ability to estimate residual value at the inception of a lease and the residual value performance on vehicles we lease; interest rate fluctuations and certain related derivatives exposure; foreign currency exchange rate fluctuations and other risks applicable to our operations outside of the U.S.; changes to the LIBOR calculation process and potential phasing out of LIBOR; our ability to effectively manage capital or liquidity consistent with evolving business or operational needs, risk management standards and regulatory or supervisory requirements; changes in local, regional, national or international economic, social or political conditions; our ability to maintain and expand our market share due to competition in the automotive finance industry from a large number of banks, credit unions, independent finance companies and other captive automotive finance subsidiaries; our ability to secure private customer and employee data or our proprietary information, manage risks related to security breaches and other disruptions to our networks and systems and comply with enterprise data regulations in all key market regions; 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
September 30,

 

Nine Months Ended
September 30,

 

2019

 

2018

 

2019

 

2018

Revenue

 

 

 

 

 

 

 

Finance charge income

$

1,043

 

 

$

917

 

 

$

3,038

 

 

$

2,667

 

Leased vehicle income

2,515

 

 

2,501

 

 

7,536

 

 

7,445

 

Other income

101

 

 

100

 

 

344

 

 

305

 

Total revenue

3,659

 

 

3,518

 

 

10,918

 

 

10,417

 

Costs and expenses

 

 

 

 

 

 

 

Operating expenses

384

 

 

369

 

 

1,131

 

 

1,116

 

Leased vehicle expenses

1,574

 

 

1,677

 

 

5,025

 

 

5,148

 

Provision for loan losses

150

 

 

180

 

 

504

 

 

444

 

Interest expense

879

 

 

838

 

 

2,778

 

 

2,373

 

Total costs and expenses

2,987

 

 

3,064

 

 

9,438

 

 

9,081

 

Equity income

39

 

 

44

 

 

126

 

 

141

 

Income before income taxes

711

 

 

498

 

 

1,606

 

 

1,477

 

Income tax provision

195

 

 

57

 

 

416

 

 

225

 

Net income

516

 

 

441

 

 

1,190

 

 

1,252

 

Less: cumulative dividends on preferred stock

23

 

 

15

 

 

68

 

 

44

 

Net income attributable to common shareholder

$

493

 

 

$

426

 

 

$

1,122

 

 

$

1,208

 

Condensed Consolidated Balance Sheets

(Unaudited, in millions)

 

 

September 30, 2019

 

December 31, 2018

ASSETS

 

 

 

Cash and cash equivalents

$

3,218

 

 

$

 

4,883

 

Finance receivables, net

 

54,332

 

 

 

52,512

 

Leased vehicles, net

 

42,527

 

 

 

43,559

 

Goodwill

 

1,182

 

 

 

1,186

 

Equity in net assets of non-consolidated affiliates

 

1,381

 

 

 

1,355

 

Related party receivables

 

696

 

 

 

729

 

Other assets

 

6,025

 

 

 

5,696

 

Total assets

$

109,361

 

 

$

 

109,920

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

Liabilities

 

 

 

Secured debt

$

39,029

 

 

$

 

42,835

 

Unsecured debt

 

50,099

 

 

 

48,153

 

Deferred income

 

3,708

 

 

 

3,605

 

Related party payables

 

67

 

 

 

63

 

Other liabilities

 

3,770

 

 

 

3,605

 

Total liabilities

 

96,673

 

 

 

98,261

 

Total shareholders' equity

 

12,688

 

 

 

11,659

 

Total liabilities and shareholders' equity

$

109,361

 

 

$

 

109,920

 

Operational and Financial Data

(Unaudited, Dollars in millions)

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

Originations

2019

 

2018

 

2019

 

2018

Retail finance receivables originations

$

5,407

 

 

$

6,668

 

 

$

19,682

 

 

$

17,797

 

Lease originations

$

5,843

 

 

$

5,432

 

 

$

16,964

 

 

$

17,345

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

Average Earning Assets

2019

 

2018

 

2019

 

2018

Average retail finance receivables

$

42,311

 

 

$

36,809

 

 

$

42,103

 

 

$

35,130

 

Average commercial finance receivables

13,118

 

 

10,619

 

 

12,614

 

 

10,302

 

Average finance receivables

55,429

 

 

47,428

 

 

54,717

 

 

45,432

 

Average leased vehicles, net

42,754

 

 

44,110

 

 

43,059

 

 

43,688

 

Average earning assets

$

98,183

 

 

$

91,538

 

 

$

97,776

 

 

$

89,120

 

Ending Earning Assets

September 30, 2019

 

December 31, 2018

Retail finance receivables, net of fees

$

41,967

 

 

$

40,702

 

Commercial finance receivables, net of fees

13,298

 

 

12,721

 

Leased vehicles, net

42,527

 

 

43,559

 

Ending earning assets

$

97,792

 

 

$

96,982

 

Total Finance Receivables

September 30, 2019

 

December 31, 2018

Retail

 

 

 

Retail finance receivables, net of fees

$

41,967

 

 

$

40,702

 

Less: allowance for loan losses

(856

)

 

(844

)

Total retail finance receivables, net

41,111

 

 

39,858

 

Commercial

 

 

 

Commercial finance receivables, net of fees

13,298

 

 

12,721

 

Less: allowance for loan losses

(77

)

 

(67

)

Total commercial finance receivables, net

13,221

 

 

12,654

 

Total finance receivables, net

$

54,332

 

 

$

52,512

 

Allowance for Loan Losses

September 30, 2019

 

December 31, 2018

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

2.0

%

 

2.1

%

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

0.6

%

 

0.5

%

Delinquencies

September 30, 2019

 

September 30, 2018

Loan delinquency as a percentage of ending retail finance receivables:

 

 

 

31 - 60 days

3.0

%

 

3.4

%

Greater than 60 days

1.2

 

 

1.3

 

Total

4.2

%

 

4.7

%

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

Charge-offs and Recoveries

2019

 

2018

 

2019

 

2018

Charge-offs

$

300

 

 

$

285

 

 

$

886

 

 

$

878

 

Less: recoveries

(133

)

 

(130

)

 

(410

)

 

(398

)

Net charge-offs

$

167

 

 

$

155

 

 

$

476

 

 

$

480

 

Net charge-offs as an annualized percentage of average retail finance receivables

1.6

%

 

1.7

%

 

1.5

%

 

1.8

%

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

Operating Expenses

2019

 

2018

 

2019

 

2018

Operating expenses as an annualized percentage of average earning assets

1.6

%

 

1.6

%

 

1.5

%

 

1.7

%

 

 

Contacts

Stephen Jones
Vice President, Investor Relations
(817) 302-7119
Investors@gmfinancial.com

Contacts

Stephen Jones
Vice President, Investor Relations
(817) 302-7119
Investors@gmfinancial.com