GM Financial Reports First Quarter 2020 Operating Results

  • First quarter net income of $167 million
  • Retail loan and operating lease originations of $11.5 billion for the first quarter
  • Earning assets of $96.1 billion at March 31, 2020
  • Available liquidity of $24.9 billion at March 31, 2020

FORT WORTH, Texas--()--GENERAL MOTORS FINANCIAL COMPANY, INC. (“GM Financial” or the “Company”) announced net income of $167 million for the quarter ended March 31, 2020, compared to $377 million for the quarter ended December 31, 2019, and $271 million for the quarter ended March 31, 2019.

Retail loan originations were $6.5 billion for the quarter ended March 31, 2020, compared to $5.5 billion for the quarter ended December 31, 2019, and $7.2 billion for the quarter ended March 31, 2019. The outstanding balance of retail finance receivables, net of fees was $42.5 billion at March 31, 2020, compared to $42.3 billion at December 31, 2019 and $41.8 billion at March 31, 2019.

Operating lease originations were $5.0 billion for the quarter ended March 31, 2020, compared to $5.4 billion for the quarter ended December 31, 2019, and $5.2 billion for the quarter ended March 31, 2019. Leased vehicles, net was $41.3 billion at March 31, 2020, compared to $42.1 billion at December 31, 2019 and $43.1 billion at March 31, 2019.

The outstanding balance of commercial finance receivables, net of fees was $12.3 billion at March 31, 2020, compared to $12.1 billion at December 31, 2019 and $12.4 billion at March 31, 2019.

Retail finance receivables 31-60 days delinquent were 2.7% of the portfolio at March 31, 2020 and 2.5% at March 31, 2019. Accounts more than 60 days delinquent were 1.1% of the portfolio at March 31, 2020 and 1.0% at March 31, 2019.

Annualized net charge-offs were 1.7% of average retail finance receivables for the quarter ended March 31, 2020 and 1.6% for the quarter ended March 31, 2019.

The Company had total available liquidity of $24.9 billion at March 31, 2020, consisting of $11.6 billion of cash and cash equivalents, $10.0 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 $25 million for the quarter ended March 31, 2020, compared to $40 million for the quarter ended December 31, 2019, and $45 million for the quarter ended March 31, 2019.

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 ended March 31, 2020. This recording, along with the presentation slides and this release, will be posted to the Company’s website on May 6, 2020 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 https://investor.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, 2019. Such risks include - but are not limited to - the length and severity of the COVID-19 pandemic; GM's ability to sell new vehicles that we finance in the markets we serve; dealers' effectiveness in marketing our financial products to consumers; the viability of GM-franchised dealers that are commercial loan customers; the sufficiency, availability and cost of sources of financing, including credit facilities, securitization programs and secured and unsecured debt issuances; 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; our ability to effectively manage capital or liquidity consistent with evolving business or operational needs, risk management standards and regulatory or supervisory requirements; the adequacy of our allowance for loan losses on our finance receivables; 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; changes in the automotive industry that result in a change in demand for vehicles and related vehicle financing; 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; our joint ventures in Asia/Pacific, which we cannot operate solely for our benefit and over which we have limited control; changes in the determination of LIBOR and other benchmark rates; 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; foreign currency exchange rate fluctuations and other risks applicable to our operations outside of the U.S.; and changes in local, regional, national or international economic, social or political conditions. 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.

Consolidated Statements of Income

(Unaudited, in millions)

 

 

Three Months Ended March 31,

 

2020

 

2019

Revenue

 

 

 

Finance charge income

$

1,006

 

 

$

987

 

Leased vehicle income

2,463

 

 

2,509

 

Other income

92

 

 

124

 

Total revenue

3,561

 

 

3,620

 

Costs and expenses

 

 

 

Operating expenses

358

 

 

370

 

Leased vehicle expenses

1,697

 

 

1,814

 

Provision for loan losses

466

 

 

175

 

Interest expense

835

 

 

947

 

Total costs and expenses

3,356

 

 

3,306

 

Equity income

25

 

 

45

 

Income before income taxes

230

 

 

359

 

Income tax provision

63

 

 

88

 

Net income

167

 

 

271

 

Less: cumulative dividends on preferred stock

23

 

 

23

 

Net income attributable to common shareholder

$

144

 

 

$

248

 

 

Consolidated Balance Sheets

(Unaudited, in millions)

     

 

March 31, 2020

 

December 31, 2019

ASSETS

 

 

 

 

 

Cash and cash equivalents

$

11,632

 

 

$

3,311

 

Finance receivables, net

52,820

 

 

53,473

 

Leased vehicles, net

41,296

 

 

42,055

 

Goodwill

1,168

 

 

1,185

 

Equity in net assets of non-consolidated affiliates

1,437

 

 

1,455

 

Related party receivables

670

 

 

678

 

Other assets

6,526

 

 

7,060

 

Total assets

$

115,549

 

 

$

109,217

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

Liabilities

 

 

 

 

 

Secured debt

$

46,170

 

 

$

39,959

 

Unsecured debt

50,019

 

 

48,979

 

Deferred income

3,480

 

 

3,648

 

Related party payables

51

 

 

82

 

Other liabilities

4,513

 

 

3,823

 

Total liabilities

104,233

 

 

96,491

 

Total shareholders' equity

11,316

 

 

12,726

 

Total liabilities and shareholders' equity

$

115,549

 

 

$

109,217

 

 

Operational and Financial Data

(Unaudited, Dollars in millions)

 

 

Three Months Ended March 31,

Originations

2020

 

2019

Retail finance receivables originations

$

6,497

 

 

$

7,162

 

Lease originations

$

5,040

 

 

$

5,210

 

 

Three Months Ended March 31,

Average Earning Assets

2020

 

2019

Average retail finance receivables

$

42,416

 

 

$

41,591

 

Average commercial finance receivables

11,678

 

 

12,167

 

Average finance receivables

54,094

 

 

53,758

 

Average leased vehicles, net

41,778

 

 

43,394

 

Average earning assets

$

95,872

 

 

$

97,152

 

Ending Earning Assets

March 31, 2020

 

December 31, 2019

Retail finance receivables, net of fees

$

42,504

 

 

$

42,268

 

Commercial finance receivables, net of fees

12,282

 

 

12,149

 

Leased vehicles, net

41,296

 

 

42,055

 

Ending earning assets

$

96,082

 

 

$

96,472

 

Finance Receivables

March 31, 2020

 

December 31, 2019

Retail

 

 

 

Retail finance receivables, net of fees

$

42,504

 

 

$

42,268

 

Less: allowance for loan losses

(1,879

)

 

(866

)

Total retail finance receivables, net

40,625

 

 

41,402

 

Commercial

 

 

 

Commercial finance receivables, net of fees

12,282

 

 

12,149

 

Less: allowance for loan losses

(87

)

 

(78

)

Total commercial finance receivables, net

12,195

 

 

12,071

 

Total finance receivables, net

$

52,820

 

 

$

53,473

 

Allowance for Loan Losses

March 31, 2020

 

December 31, 2019

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

4.4

%

 

2.0

%

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

0.7

%

 

0.6

%

Delinquencies

March 31, 2020

 

March 31, 2019

Loan delinquency as a percentage of ending retail finance receivables:

 

 

 

31 - 60 days

2.7

%

 

2.5

%

Greater than 60 days

1.1

 

 

1.0

 

Total

3.8

%

 

3.5

%

 

Three Months Ended March 31,

Charge-offs and Recoveries

2020

 

2019

Charge-offs

$

340

 

 

$

307

 

Less: recoveries

(156

)

 

(145

)

Net charge-offs

$

184

 

 

$

162

 

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

1.7

%

 

1.6

%

 

Three Months Ended March 31,

Operating Expenses

2020

 

2019

Operating expenses as an annualized percentage of average earning assets

1.5

%

 

1.5

%

 

 

Contacts

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

Contacts

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