FORT WORTH, Texas — GENERAL MOTORS FINANCIAL COMPANY, INC. (“GM Financial” or the “Company”) announced net income of $136 million for the quarter ended June 30, 2012, compared to $96 million for the quarter ended June 30, 2011. Net income for the six months ended June 30, 2012 was $249 million, compared to $173 million for the six months ended June 30, 2011.
- Earnings of $136 million
- Loan and lease originations of $1.9 billion
- Available liquidity of $2.1 billion
- Annualized consumer net credit losses of 1.5%
Loan originations were $1.5 billion for the quarter ended June 30, 2012, compared to $1.4 billion for the quarter ended March 31, 2012, and $1.3 billion for the quarter ended June 30, 2011. Loan originations for the six months ended June 30, 2012 were $2.9 billion, compared to $2.5 billion for the six months ended June 30, 2011. The outstanding balance of consumer finance receivables totaled $10.4 billion at June 30, 2012.
Lease originations of General Motors Company (“GM”) vehicles were $394 million for the quarter ended June 30, 2012, compared to $384 million for the quarter ended March 31, 2012 and $173 million for the quarter ended June 30, 2011. Lease originations for the six months ended June 30, 2012 were $778 million, compared to $484 million for the six months ended June 30, 2011. Leased vehicles, net, totaled $1.4 billion at June 30, 2012.
Consumer finance receivables 31-to-60 days delinquent were 4.1% of the portfolio at June 30, 2012, compared to 4.4% at June 30, 2011. Accounts more than 60 days delinquent were 1.5% of the portfolio at June 30, 2012, compared to 1.7% a year ago.
Annualized net credit losses were 1.5% of average consumer finance receivables for the quarter ended June 30, 2012, compared to 2.4% for the quarter ended June 30, 2011. For the six months ended June 30, 2012, annualized consumer net credit losses were 2.0%, compared to 3.2% last year.
The Company had total available liquidity of $2.1 billion at June 30, 2012, consisting of $952 million of unrestricted cash, approximately $891 million of borrowing capacity on unpledged eligible assets and $300 million on a line of credit from GM.
About GM Financial
General Motors Financial Company, Inc. provides auto finance solutions through auto dealers across the United States and Canada. GM Financial has approximately 3,600 employees, over 800,000 customers and $12 billion in finance receivables and leased vehicles. The Company is a wholly-owned 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 that involve risks and uncertainties detailed from time to time in the Company’s filings and reports with the Securities and Exchange Commission including the Company’s annual report on Form 10-K for the year ended December 31, 2011. Such risks include – but are not limited to – changes in general economic and business conditions, GM’s ability to sell new vehicles in the United States and Canada that we finance, interest rate 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 of sources of financing, the level of net credit losses, delinquencies and prepayments on the loans and leases we originate, the prices at which used cars are sold in the wholesale auction markets, changes in business strategy, including expansion of product lines and credit risk appetite and significant litigation. These forward-looking statements are based on the beliefs of the Company’s management as well as assumptions made by and information currently available to the Company’s management. Actual events or results may differ materially. It is advisable not to place undue reliance on any forward-looking statements. The Company undertakes no obligation to, and does 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 Thousands) | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Revenue | ||||||||||||||||
| Finance charge income | $ | 403,317 | $ | 290,916 | $ | 761,573 | $ | 558,762 | ||||||||
| Other income | 83,194 | 38,969 | 156,341 | 66,290 | ||||||||||||
| 486,511 | 329,885 | 917,914 | 625,052 | |||||||||||||
| Costs and expenses | ||||||||||||||||
| Operating expenses | 92,717 | 85,379 | 190,586 | 161,785 | ||||||||||||
| Leased vehicles expenses | 51,011 | 13,098 | 91,657 | 21,582 | ||||||||||||
| Provision for loan losses | 61,876 | 44,570 | 110,430 | 83,994 | ||||||||||||
| Interest expense | 64,176 | 42,817 | 127,268 | 83,434 | ||||||||||||
| 269,780 | 185,864 | 519,941 | 350,795 | |||||||||||||
| Income before income taxes | 216,731 | 144,021 | 397,973 | 274,257 | ||||||||||||
| Income tax provision | 80,436 | 48,203 | 149,399 | 101,201 | ||||||||||||
| Net income | $ | 136,295 | $ | 95,818 | $ | 248,574 | $ | 173,056 | ||||||||
| Consolidated Balance Sheets | ||||||||||||
| (Unaudited, in Thousands) | ||||||||||||
| June 30, 2012 | December 31, 2011 | June 30, 2011 | ||||||||||
| Assets | ||||||||||||
| Cash and cash equivalents | $ | 952,091 | $ | 572,297 | $ | 525,728 | ||||||
| Finance receivables, net | 10,030,657 | 9,162,492 | 8,587,015 | |||||||||
| Restricted cash – securitization notes payable | 705,022 | 919,283 | 937,162 | |||||||||
| Restricted cash – credit facilities | 115,396 | 136,556 | 109,386 | |||||||||
| Property and equipment, net | 50,079 | 47,440 | 46,810 | |||||||||
| Leased vehicles, net | 1,366,785 | 809,491 | 439,430 | |||||||||
| Deferred income taxes | 147,366 | 108,684 | 119,975 | |||||||||
| Goodwill | 1,107,966 | 1,107,982 | 1,108,696 | |||||||||
| Other assets | 164,190 | 178,695 | 210,971 | |||||||||
| Total assets | $ | 14,639,552 | $ | 13,042,920 | $ | 12,085,173 | ||||||
| Liabilities and Shareholder’s Equity | ||||||||||||
| Liabilities | ||||||||||||
| Credit facilities | $ | 523,235 | $ | 1,099,391 | $ | 422,756 | ||||||
| Securitization notes payable | 8,626,823 | 6,937,841 | 6,880,681 | |||||||||
| Senior notes | 500,000 | 500,000 | 569,870 | |||||||||
| Convertible senior notes | 500 | 500 | 1,447 | |||||||||
| Accounts payable and accrued expenses | 203,486 | 160,172 | 185,139 | |||||||||
| Deferred income | 56,608 | 24,987 | 18,222 | |||||||||
| Taxes payable | 90,777 | 85,477 | 75,203 | |||||||||
| Intercompany taxes payable | 478,161 | 300,306 | 186,155 | |||||||||
| Interest rate swap and cap agreements | 2,732 | 11,208 | 35,206 | |||||||||
| Total liabilities | 10,482,322 | 9,119,882 | 8,374,679 | |||||||||
| Shareholder’s equity | 4,157,230 | 3,923,038 | 3,710,494 | |||||||||
| Total liabilities and shareholder’s equity | $ | 14,639,552 | $ | 13,042,920 | $ | 12,085,173 | ||||||
| Consolidated Statements of Cash Flows | ||||||||||||||||||||
| (Unaudited, in Thousands) | ||||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||
| June 30, | June 30, | |||||||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||||||
| Cash flows from operating activities: | ||||||||||||||||||||
| Net income | $ | 136,295 | $ | 95,818 | $ | 248,574 | $ | 173,056 | ||||||||||||
| Adjustments to reconcile net income to | ||||||||||||||||||||
| net cash provided by operating activities: | ||||||||||||||||||||
| Depreciation and amortization | 61,796 | 23,176 | 112,361 | 41,044 | ||||||||||||||||
| Amortization of purchase accounting premium | (9,053 | ) | (21,574 | ) | (18,997 | ) | (44,691 | ) | ||||||||||||
| Amortization of carrying value adjustment | (11,823 | ) | 58,995 | 8,346 | 126,922 | |||||||||||||||
| Accretion and amortization of loan and leasing fees | (13,176 | ) | (4,978 | ) | (24,263 | ) | (7,914 | ) | ||||||||||||
| Provision for loan losses | 61,876 | 44,570 | 110,430 | 83,994 | ||||||||||||||||
| Deferred income taxes | (28,082 | ) | 59,645 | (37,734 | ) | 37,856 | ||||||||||||||
| Stock-based compensation expense | 1,955 | 3,128 | 2,539 | 6,053 | ||||||||||||||||
| Other | (3,341 | ) | (8,336 | ) | (8,897 | ) | (17,180 | ) | ||||||||||||
| Changes in assets and liabilities, net of assets and | ||||||||||||||||||||
| liabilities acquired: | ||||||||||||||||||||
| Other assets | (11,069 | ) | 14,523 | (13,012 | ) | 26,044 | ||||||||||||||
| Accounts payable and accrued expenses | (6,492 | ) | 3,544 | 19,182 | (9,221 | ) | ||||||||||||||
| Taxes payable | 1,193 | (104,430 | ) | 5,301 | (87,313 | ) | ||||||||||||||
| Intercompany taxes payable | 105,477 | 89,124 | 177,855 | 143,941 | ||||||||||||||||
| Net cash provided by operating activities | 285,556 | 253,205 | 581,685 | 472,591 | ||||||||||||||||
| Cash flows from investing activities: | ||||||||||||||||||||
| Purchases of consumer finance receivables, net | (1,505,445 | ) | (1,318,304 | ) | (2,870,107 | ) | (2,453,086 | ) | ||||||||||||
| Principal collections and recoveries on consumer | ||||||||||||||||||||
| finance receivables | 1,024,088 | 925,885 | 2,040,006 | 1,880,176 | ||||||||||||||||
| Fundings of commercial finance receivables | (173,158 | ) | (173,158 | ) | ||||||||||||||||
| Collections of commercial finance receivables | 46,237 | 46,237 | ||||||||||||||||||
| Net purchases of leased vehicles | (304,474 | ) | (89,361 | ) | (602,922 | ) | (396,687 | ) | ||||||||||||
| Net change in restricted cash and other | 163,135 | 87,535 | 247,424 | (23,351 | ) | |||||||||||||||
| Net cash used in investing activities | (749,617 | ) | (394,245 | ) | (1,312,520 | ) | (992,948 | ) | ||||||||||||
| Cash flows from financing activities: | ||||||||||||||||||||
| Net change in credit facilities | (249,854 | ) | (988,493 | ) | (574,134 | ) | (407,482 | ) | ||||||||||||
| Net change in securitization notes payable | 1,076,524 | 840,205 | 1,707,824 | 795,147 | ||||||||||||||||
| Issuance of senior notes | 500,000 | 500,000 | ||||||||||||||||||
| Other net changes | (18,230 | ) | (16,926 | ) | (22,991 | ) | (34,735 | ) | ||||||||||||
| Net cash provided by financing activities | 808,440 | 334,786 | 1,110,699 | 852,930 | ||||||||||||||||
| Net increase in cash and cash equivalents | 344,379 | 193,746 | 379,864 | 332,573 | ||||||||||||||||
| Effect of Canadian exchange rate changes on | ||||||||||||||||||||
| cash and cash equivalents | (1,079 | ) | (1,201 | ) | (70 | ) | (1,399 | ) | ||||||||||||
| Cash and cash equivalents at beginning of period | 608,791 | 333,183 | 572,297 | 194,554 | ||||||||||||||||
| Cash and cash equivalents at end of period | $ | 952,091 | $ | 525,728 | $ | 952,091 | $ | 525,728 | ||||||||||||
| Other Financial Data | ||||||||||||||||||||
| (Unaudited, Dollars in Thousands) | ||||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||
| June 30, | June 30, | |||||||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||||||
| Consumer loan originations | $ | 1,489,402 | $ | 1,349,222 | $ | 2,885,159 | $ | 2,487,143 | ||||||||||||
| GM lease originations | 394,360 | 172,764 | 778,159 | 483,711 | ||||||||||||||||
| GM new vehicle loans as a percent | ||||||||||||||||||||
| of total loan originations | 30.9 | % | 30.0 | % | 30.2 | % | 26.4 | % | ||||||||||||
| GM new vehicle loans and leases | ||||||||||||||||||||
| as a percent of total loan and lease originations | 45.4 | % | 38.0 | % | 45.0 | % | 38.4 | % | ||||||||||||
| Consumer loans securitized | $ | 2,433,616 | $ | 2,068,978 | $ | 4,349,335 | $ | 2,917,788 | ||||||||||||
| Commercial finance fundings | 173,796 | 173,796 | ||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||
| June 30, | June 30, | |||||||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||||||
| Average consumer finance receivables | $ | 10,237,530 | $ | 8,926,612 | $ | 10,030,179 | $ | 8,797,154 | ||||||||||||
| Average commercial finance receivables | 55,921 | 31,955 | ||||||||||||||||||
| Average finance receivables | 10,293,451 | 8,926,612 | 10,062,134 | 8,797,154 | ||||||||||||||||
| Average leased vehicles, net | 1,231,419 | 377,928 | 1,100,369 | 243,105 | ||||||||||||||||
| Average earning assets | $ | 11,524,870 | $ | 9,304,540 | $ | 11,162,503 | $ | 9,040,259 | ||||||||||||
| Finance Receivables | |||||||||||||||
| Consumer: | June 30, 2012 | December 31, 2011 | June 30, 2011 | ||||||||||||
| Pre-acquisition consumer finance receivables – outstanding | |||||||||||||||
| Balance | $ 3,100,850 | * | $ | 4,366,075 | $ | 5,886,828 | |||||||||
| Pre-acquisition consumer finance receivables – carrying value | $ | 2,812,205 | $ | 4,027,361 | $ | 5,471,957 | |||||||||
| Post-acquisition consumer finance receivables, net of fees | 7,340,242 | * | 5,313,899 | 3,222,584 | |||||||||||
| $ | 10,152,447 | $ | 9,341,260 | $ | 8,694,541 | ||||||||||
| Less: allowance for loan losses on | |||||||||||||||
| post-acquisition consumer finance receivables | (249,350 | ) | (178,768 | ) | (107,526 | ) | |||||||||
| Total consumer finance receivables, net | 9,903,097 | 9,162,492 | 8,587,015 | ||||||||||||
| Commercial: | |||||||||||||||
| Commercial finance receivables, net of fees | 127,560 | ||||||||||||||
| Less: allowance for loan losses on commercial | |||||||||||||||
| finance receivables | |||||||||||||||
| Total commercial finance receivables, net | 127,560 | ||||||||||||||
| Total finance receivables, net | $ | 10,030,657 | $ | 9,162,492 | $ | 8,587,015 | |||||||||
| 3.4 | % | 3.4 | % | 3.3 | % | ||||||||||
| Allowance for loan losses as a percent | |||||||||||||||
| of post-acquisition consumer finance receivables | |||||||||||||||
*The outstanding balance of consumer finance receivables totaling $10.4 billion at June 30, 2012, is the sum of pre-acquisition consumer finance receivables – outstanding balance and post-acquisition consumer finance receivables, net of fees.
| June 30, 2012 | June 30, 2011 | |||||||
| Loan delinquency as a percent of | ||||||||
| ending consumer finance receivables: | ||||||||
| 31 – 60 days | 4.1 | % | 4.4 | % | ||||
| Greater than 60 days | 1.5 | 1.7 | ||||||
| Total | 5.6 | % | 6.1 | % | ||||
The Company analyzes portfolio performance of both the pre-acquisition and post-acquisition consumer finance receivable portfolios on a combined basis. This information allows for the ability to analyze credit loss trends of the combined portfolio and also facilitates comparisons of current and historical results.
The following is a reconciliation of charge-offs on the post-acquisition portfolio to credit losses on the combined portfolio:
| Three Months Ended | Six Months Ended | |||||||||||||||||||
| June 30, | June 30, | |||||||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||||||
| Charge-offs | $ | 52,741 | $ | 6,738 | $ | 103,799 | $ | 8,547 | ||||||||||||
| Adjustments to reflect write-offs of the | ||||||||||||||||||||
| contractual amounts on the pre-acquisition | ||||||||||||||||||||
| portfolio | 65,147 | 123,072 | 168,764 | 304,900 | ||||||||||||||||
| Credit losses on the combined portfolio | $ | 117,888 | $ | 129,810 | $ | 272,563 | $ | 313,447 | ||||||||||||
|
Credit losses on the combined portfolio |
$ | 117,888 | $ | 129,810 | $ | 272,563 |
$ |
313,447 |
||||||||||||
| Less: recoveries | (80,315 | ) | (75,550 | ) | (174,300 | ) | (174,351 | ) | ||||||||||||
| Net credit losses on the combined portfolio | $ | 37,573 | $ | 54,260 | $ | 98,263 | $ | 139,096 | ||||||||||||
| Annualized net credit losses as a percent of | ||||||||||||||||||||
| average consumer finance receivables | 1.5 | % | 2.4 | % | 2.0 | % | 3.2 | % | ||||||||||||
| Recoveries as a percent of | 67.7 | % | 56.4 | % | ||||||||||||||||
| gross repossession credit losses | 62.6 | % | 53.6 | % | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||
| June 30, | June 30, | |||||||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||||||
| Contracts receiving a payment | ||||||||||||||||||||
| deferral as an average quarterly | ||||||||||||||||||||
| percent of average consumer finance | 5.1 | % | ||||||||||||||||||
| receivables | 5.3 | % | 4.9 | % | 5.3 | % | ||||||||||||||
| Operating expenses | $ | 92,717 | $ | 85,379 | $ | 190,586 | $ | 161,785 | ||||||||||||
| Annualized operating expenses as a | ||||||||||||||||||||
| percent of average earning assets | 3.2 | % | 3.7 | % | 3.4 | % | 3.6 | % | ||||||||||||