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GM Financial Reports June Quarter 2018 Operating Results

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  • June quarter net income of $442 million
  • Retail loan and lease originations of $12.3 billion for the June
    quarter
  • Earning assets of $90.4 billion at June 30, 2018
  • Available liquidity of $23.1 billion at June 30, 2018

GENERAL MOTORS FINANCIAL COMPANY, INC. ("GM Financial" or the
"Company") announced net income of $442 million for the quarter ended
June 30, 2018, compared to $62 million for the quarter ended June 30,
2017. Net income for the six months ended June 30, 2018 was $811
million, compared to $264 million for the six months ended June 30,
2017. Net income from continuing operations for the three and six month
periods ended June 30, 2017 was $270 million and $449 million,
respectively.

Retail loan originations were $6.0 billion for the quarter ended
June 30, 2018, compared to $5.1 billion for the quarter ended March 31,
2018, and $5.3 billion for the quarter ended June 30, 2017. Retail loan
originations for the six months ended June 30, 2018 were $11.1 billion,
compared to $10.9 billion for the six months ended June 30, 2017. The
outstanding balance of retail finance receivables was $35.7 billion at
June 30, 2018.

Operating lease originations were $6.2 billion for the quarter ended
June 30, 2018, compared to $5.7 billion for the quarter ended March 31,
2018, and $6.7 billion for the quarter ended June 30, 2017. Operating
lease originations for the six months ended June 30, 2018 were $11.9
billion, compared to $13.0 billion for the six months ended June 30,
2017. Leased vehicles, net was $44.1 billion at June 30, 2018.

The outstanding balance of commercial finance receivables was $10.7
billion at June 30, 2018, compared to $10.4 billion at March 31, 2018
and $9.7 billion at June 30, 2017.

Retail finance receivables 31-60 days delinquent were 3.3% of the
portfolio at June 30, 2018 and 3.4% at June 30, 2017. Accounts more than
60 days delinquent were 1.3% of the portfolio at June 30, 2018 and 1.5%
at June 30, 2017.

Annualized net charge-offs were 1.7% of average retail finance
receivables for the quarters ended June 30, 2018 and 2017. For the six
months ended June 30, 2018, annualized retail net charge-offs were 1.9%,
compared to 2.0% for the six months ended June 30, 2017.

The Company had total available liquidity of $23.1 billion at June 30,
2018, consisting of $4.0 billion of cash and cash equivalents, $15.9
billion of borrowing capacity on unpledged eligible assets, $0.1 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 in SAIC-GMAC, a
joint venture that conducts auto finance operations in China, were $45
million for the quarter ended June 30, 2018 compared to $41 million for
the quarter ended June 30, 2017. Earnings for the six months ended
June 30, 2018 were $97 million, compared to $88 million for the six
months ended June 30, 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 and six months
ended June 30, 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 vehicles 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 June 30, Six Months Ended June 30,
2018     2017 2018     2017
Revenue
Finance charge income $ 884 $ 812 $ 1,750 $ 1,564
Leased vehicle income 2,497 2,107 4,944 4,038
Other income   107   71     205   136  
Total revenue   3,488   2,990     6,899   5,738  
Costs and expenses
Operating expenses 382 333 747 663
Leased vehicle expenses 1,684 1,549 3,471 2,978
Provision for loan losses 128 158 264 369
Interest expense   803   635     1,535   1,231  
Total costs and expenses 2,997 2,675 6,017 5,241
Equity income   45   41     97   88  
Income from continuing operations before income taxes 536 356 979 585
Income tax provision   94   86     168   136  
Income from continuing operations 442 270 811 449

Loss from discontinued operations, net of tax

    (208 )     (185 )
Net income $ 442 $ 62   $ 811 $ 264  
Net income attributable to common shareholder $ 427 $ 62   $ 782 $ 264  
         
 
Condensed Consolidated Balance Sheets
(Unaudited, in millions)
 
June 30, 2018 December 31, 2017
ASSETS
Cash and cash equivalents $ 4,012 $ 4,265
Finance receivables, net 45,500 42,172
Leased vehicles, net 44,054 42,882
Goodwill 1,188 1,197
Equity in net assets of non-consolidated affiliate 1,260 1,187
Related party receivables 736 309
Other assets   5,808   5,003
Total assets $ 102,558 $ 97,015
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Secured debt $ 39,083 $ 39,887
Unsecured debt 45,357 40,830
Deferred income 3,517 3,221
Related party payables 76 92

Other liabilities

  3,549

 

2,691
Total liabilities   91,582   86,721
Shareholders' equity   10,976   10,294
Total liabilities and shareholders' equity $ 102,558 $ 97,015
 
 
Operational and Financial Data
(Unaudited, Dollars in millions)
                 

Three Months Ended June 30,

Six Months Ended June 30,

Originations

2018 2017 2018 2017
Retail finance receivables originations $ 6,051 $ 5,253 $ 11,129 $ 10,860
GM lease originations $ 6,201 $ 6,751 $ 11,913 $ 13,024
GM new vehicle loans and leases as a percentage of total loan and
lease originations
90.7 % 88.8 % 90.2 % 88.3 %
 
 
Three Months Ended June 30, Six Months Ended June 30,

Average Earning Assets

2018 2017 2018 2017
Average retail finance receivables $ 35,081 $ 30,432 $ 34,253 $ 28,960
Average commercial finance receivables   10,333     9,074     10,177     8,520  
Average finance receivables 45,414 39,506 44,430 37,480
Average leased vehicles, net   43,805     38,368     43,498     37,055  
Average earning assets $ 89,219   $ 77,874   $ 87,928   $ 74,535  
         
 

Ending Earning Assets

June 30, 2018 June 30, 2017
Retail finance receivables, net of fees $ 35,675 $ 31,100
Commercial finance receivables, net of fees 10,698 9,675
Leased vehicles, net   44,054     39,725  
Ending earning assets $ 90,427   $ 80,500  
 
 

Total Finance Receivables

June 30, 2018 December 31, 2017
Retail
Retail finance receivables, net of fees(a) $ 35,675 $ 32,802
Less: allowance for loan losses   (815 )   (889 )
Total retail finance receivables, net   34,860     31,913  
Commercial
Commercial finance receivables, net of fees 10,698 10,312
Less: allowance for loan losses   (58 )   (53 )
Total commercial finance receivables, net   10,640     10,259  
Total finance receivables, net $ 45,500   $ 42,172  
 

(a) Net of unearned income, unamortized premiums and discounts, and
deferred fees and costs of $184 million and $228 million at June 30,
2018 and December 31, 2017.

           
 

Allowance for Loan Losses

June 30, 2018 December 31, 2017
Allowance for loan losses as a percentage of retail finance
receivables, net of fees
2.3 % 2.7 %
Allowance for loan losses as a percentage of commercial finance
receivables, net of fees
0.5 % 0.5 %
 
 

Delinquencies

June 30, 2018 June 30, 2017
Loan delinquency as a percentage of ending retail finance
receivables:
31 - 60 days 3.3 % 3.4 %
Greater than 60 days 1.3   1.5  
Total 4.6 % 4.9 %
                 
 

Three Months Ended June 30,

Six Months Ended June 30,

Charge-offs and Recoveries

2018 2017 2018 2017
Charge-offs $ 298 $ 272 $ 593 $ 570
Less: recoveries   (145 )   (142 )   (268 )   (285 )
Net charge-offs $ 153   $ 130   $ 325   $ 285  
Net charge-offs as an annualized percentage of average retail
finance receivables
1.7 % 1.7 % 1.9 % 2.0 %
Recovery rate as a percentage of gross repossession charge-offs in
North America(a)
52.3 % 53.9 % 51.7 % 52.7 %
 

(a) Recovery rate for the three months ended March 31, 2018 was
revised from 53.1% to 50.9% due to the reclassification of $4 million in
non-repossession recoveries.

         
 
Three Months Ended June 30, Six Months Ended June 30,

Operating Expenses

2018     2017 2018     2017
Operating expenses as an annualized percentage of average earning
assets
1.7 % 1.7 % 1.7 % 1.8 %

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