FORT WORTH, TEXAS — GENERAL MOTORS FINANCIAL COMPANY, INC. (“GM Financial” or the “Company”) announced net income of $112 million for the quarter ended March 31, 2012, compared to $77 million for the quarter ended March 31, 2011.
- Earnings of $112 million
- Loan and lease originations of $1.8 billion
- Available liquidity of $1.9 billion
- Annualized net credit losses of 2.5%
Loan originations were $1.4 billion for the quarter ended March 31, 2012, compared to $1.2 billion for the quarter ended December 31, 2011, and $1.1 billion for the quarter ended March 31, 2011. The outstanding balance of finance receivables totaled $10.0 billion at March 31, 2012.
Lease originations of General Motors Company (“GM”) vehicles were $384 million for the quarter ended March 31, 2012, compared to $314 million for the quarter ended December 31, 2011 and $311 million for the quarter ended March 31, 2011. Leased vehicles, net, totaled $1.1 billion at March 31, 2012.
Finance receivables 31-to-60 days delinquent were 3.2% of the portfolio at March 31, 2012, compared to 3.8% at March 31, 2011. Accounts more than 60 days delinquent were 1.2% of the portfolio at March 31, 2012, compared to 1.5% a year ago.
Annualized net charge-offs were 2.5% of average finance receivables for the quarter ended March 31, 2012, compared to 4.0% for the quarter ended March 31, 2011.
The Company had total available liquidity of $1.9 billion at March 31, 2012, consisting of $609 million of unrestricted cash, approximately $1.0 billion 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, 770,000 customers and $11 billion in auto 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 charge-offs, 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, Dollars in Thousands) | ||||||||
| Three Months Ended | Three Months Ended | |||||||
| March 31, 2012 | March 31, 2011 | |||||||
| Revenue | ||||||||
| Finance charge income | $ | 358,256 | $ | 267,846 | ||||
| Other income | 73,147 | 27,321 | ||||||
| 431,403 | 295,167 | |||||||
| Costs and expenses | ||||||||
| Operating expenses | 97,869 | 76,406 | ||||||
| Leased vehicles expenses | 40,646 | 8,484 | ||||||
| Provision for loan losses | 48,554 | 39,424 | ||||||
| Interest expense | 63,092 | 40,617 | ||||||
| 250,161 | 164,931 | |||||||
| Income before income taxes | 181,242 | 130,236 | ||||||
| Income tax provision | 68,963 | 52,998 | ||||||
| Net income | $ | 112,279 | $ | 77,238 | ||||
| Consolidated Balance Sheets | ||||||||||||
| (Unaudited, Dollars in Thousands) | ||||||||||||
| March 31, 2012 | December 31, 2011 | March 31, 2011 | ||||||||||
| Assets | ||||||||||||
| Cash and cash equivalents | $ | 608,791 | $ | 572,297 | $ | 333,183 | ||||||
| Finance receivables, net | 9,475,676 | 9,162,492 | 8,276,473 | |||||||||
| Restricted cash – securitization notes payable | 856,573 | 919,283 | 1,003,455 | |||||||||
| Restricted cash – credit facilities | 121,657 | 136,556 | 151,131 | |||||||||
| Property and equipment, net | 49,461 | 47,440 | 44,673 | |||||||||
| Leased vehicles, net | 1,099,984 | 809,491 | 316,425 | |||||||||
| Deferred income taxes | 118,754 | 108,684 | 161,886 | |||||||||
| Goodwill | 1,108,227 | 1,107,982 | 1,112,284 | |||||||||
| Other assets | 152,220 | 178,695 | 210,698 | |||||||||
| Total assets | $ | 13,591,343 | $ | 13,042,920 | $ | 11,610,208 | ||||||
| Liabilities and Shareholder’s Equity | ||||||||||||
| Liabilities | ||||||||||||
| Credit facilities | $ | 778,663 | $ | 1,099,391 | $ | 1,411,884 | ||||||
| Securitization notes payable | 7,559,357 | 6,937,841 | 6,061,281 | |||||||||
| Senior notes | 500,000 | 500,000 | 69,962 | |||||||||
| Convertible senior notes | 500 | 500 | 1,446 | |||||||||
| Accounts payable and accrued expenses | 218,578 | 160,172 | 106,585 | |||||||||
| Taxes payable | 89,594 | 85,477 | 177,823 | |||||||||
| Intercompany taxes payable | 372,684 | 300,306 | 97,031 | |||||||||
| Other liabilities | 46,888 | 36,195 | 71,978 | |||||||||
| Total liabilities | 9,566,264 | 9,119,882 | 7,997,990 | |||||||||
| Shareholder’s equity | 4,025,079 | 3,923,038 | 3,612,218 | |||||||||
| Total liabilities and shareholder’s equity | $ | 13,591,343 | $ | 13,042,920 | $ | 11,610,208 | ||||||
| Consolidated Statements of Cash Flows | ||||||||||
| (Unaudited, Dollars in Thousands) | ||||||||||
| Three Months Ended | Three Months Ended | |||||||||
| March 31, 2012 | March 31, 2011 | |||||||||
| Cash flows from operating activities: | ||||||||||
| Net income | $ | 112,279 | $ | 77,238 | ||||||
| Adjustments to reconcile net income to | ||||||||||
| net cash provided by operating activities: | ||||||||||
| Depreciation and amortization | 50,565 | 17,868 | ||||||||
| Amortization of purchase accounting premium | (9,944 | ) | (23,117 | ) | ||||||
| Amortization of carrying value adjustment | 20,169 | 67,927 | ||||||||
| Accretion and amortization of loan and leasing fees | (11,087 | ) | (2,936 | ) | ||||||
| Provision for loan losses | 48,554 | 39,424 | ||||||||
| Deferred income taxes | (9,652 | ) | (21,789 | ) | ||||||
| Stock-based compensation expense | 584 | 2,925 | ||||||||
| Other | (5,556 | ) | (8,844 | ) | ||||||
| Changes in assets and liabilities | ||||||||||
| Other assets | (1,943 | ) | 11,521 | |||||||
| Accounts payable and accrued expenses | 25,674 | (12,765 | ) | |||||||
| Taxes payable | 4,108 | 17,117 | ||||||||
| Intercompany taxes payable | 72,378 | 54,817 | ||||||||
| Net cash provided by operating activities | 296,129 | 219,386 | ||||||||
| Cash flows from investing activities: | ||||||||||
| Purchases of finance receivables | (1,364,662 | ) | (1,134,782 | ) | ||||||
| Principal collections and recoveries on finance | ||||||||||
| receivables | 1,015,918 | 954,291 | ||||||||
| Net purchases of leased vehicles | (298,448 | ) | (307,326 | ) | ||||||
| Net change in restricted cash and other | 84,289 | (110,886 | ) | |||||||
| Net cash used in investing activities | (562,903 | ) | (598,703 | ) | ||||||
| Cash flows from financing activities: | ||||||||||
| Net change in credit facilities | (324,280 | ) | 581,011 | |||||||
| Net change in securitization notes payable | 631,300 | (45,058 | ) | |||||||
| Other net changes | (4,761 | ) | (17,809 | ) | ||||||
| Net cash provided by financing activities | 302,259 | 518,144 | ||||||||
| Net increase in cash and cash equivalents | 35,485 | 138,827 | ||||||||
| Effect of Canadian exchange rate changes on cash and | ||||||||||
| cash equivalents | 1,009 | (198 | ) | |||||||
| Cash and cash equivalents at beginning of period | 572,297 | 194,554 | ||||||||
| Cash and cash equivalents at end of period | $ | 608,791 | $ | 333,183 | ||||||
| Other Financial Data | |||||||||||||||
| (Unaudited, Dollars in Thousands) | |||||||||||||||
| Three Months Ended | Three Months Ended | ||||||||||||||
| March 31, 2012 | March 31, 2011 | ||||||||||||||
| Loan origination volume | $ | 1,395,757 | $ | 1,137,921 | |||||||||||
| GM lease origination volume | 383,799 | 310,947 | |||||||||||||
| GM new vehicle loans as a percent | |||||||||||||||
| of total loan originations | 29.4 | % | 22.1 | % | |||||||||||
| GM new vehicle loans and leases | |||||||||||||||
| as a percent of total loan and lease originations | 44.6 | % | 38.8 | % | |||||||||||
| Loans securitized | $ | 1,915,719 | $ | 848,810 | |||||||||||
| Three Months Ended | Three Months Ended | ||||||||||||||
| March 31, 2012 | March 31, 2011 | ||||||||||||||
| Average finance receivables | $ | 9,822,848 | $ | 8,666,189 | |||||||||||
| Average leased vehicles, net | 969,223 | 181,603 | |||||||||||||
| Average earning assets | $ | 10,792,071 | $ | 8,847,792 | |||||||||||
| March 31, 2012 | December 31, 2011 | March 31, 2011 | |||||||||||||
| Finance receivables: | |||||||||||||||
| Pre-acquisition finance receivables – outstanding | |||||||||||||||
| balance | $ | 3,674,764 | * | $ | 4,366,075 | $ | 6,744,752 | ||||||||
| Pre-acquisition finance receivables – carrying value | 3,357,341 | 4,027,361 | 6,337,075 | ||||||||||||
| Post-acquisition finance receivables, net of fees | 6,326,427 | * | 5,313,899 | 2,004,813 | |||||||||||
| 9,683,768 | 9,341,260 | 8,341,888 | |||||||||||||
| Less: Allowance for loan losses on | |||||||||||||||
| post-acquisition finance receivables | (208,092 | ) | (178,768 | ) | (65,415 | ) | |||||||||
| Finance receivables, net | $ | 9,475,676 | $ | 9,162,492 | $ | 8,276,473 | |||||||||
| Allowance for loan losses as a percent | |||||||||||||||
| of post-acquisition finance receivables | 3.3 | % | 3.4 | % | 3.3 | % | |||||||||
| *The outstanding balance of finance receivables totaling $10.0 billion at March 31, 2012, is the sum of pre-acquisition finance receivables – outstanding balance and post-acquisition finance receivables, net of fees. | |||||||||||||||
| March 31, 2012 | March 31, 2011 | ||||||||||||||
| Loan delinquency as a percent of | |||||||||||||||
| ending finance receivables: | |||||||||||||||
| 31 – 60 days | 3.2 | % | 3.8 | % | |||||||||||
| Greater than 60 days | 1.2 | 1.5 | |||||||||||||
| Total | 4.4 | % | 5.3 | % | |||||||||||
The Company analyzes portfolio performance of both the pre-acquisition and post-acquisition 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 | Three Months Ended | |||||||||
| March 31, 2012 | March 31, 2011 | |||||||||
| Charge-offs | $ | 51,058 | $ | 1,809 | ||||||
| Adjustments to reflect write-offs of | ||||||||||
| contractual amounts on the pre-acquisition | ||||||||||
| portfolio | 103,617 | 181,828 | ||||||||
| Total credit losses on the combined portfolio | $ | 154,675 | $ | 183,637 | ||||||
| Total credit losses on the combined portfolio | $ | 154,675 | $ | 183,637 | ||||||
| Less: Recoveries | (93,985 | ) | (98,801 | ) | ||||||
| Net credit losses on the combined portfolio | $ | 60,690 | $ | 84,836 | ||||||
| Annualized net credit losses as a percent of | ||||||||||
| average finance receivables | 2.5 | % | 4.0 | % | ||||||
| Recoveries as a percent of | ||||||||||
| gross repossession credit losses | 58.9 | % | 51.7 | % | ||||||
| Three Months Ended | Three Months Ended | |||||||||
| March 31, 2012 | March 31, 2011 | |||||||||
| Contracts receiving a payment | ||||||||||
| deferral as an average quarterly | ||||||||||
| percent of average finance | ||||||||||
| receivables | 5.2 | % | 5.2 | % | ||||||
| Operating expenses | $ | 97,869 | $ | 76,406 | ||||||
| Annualized operating expenses as a | ||||||||||
| percent of average earning assets | 3.6 | % | 3.5 | % | ||||||
