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Dealer/GM News | Finance & Insurance News
May 10, 2012

GM Financial Reports March Quarter Operating Results

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Dealer/GM News | Finance & Insurance News
May 10, 2012

GM Financial Reports March Quarter Operating Results

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 %

Dealer/GM News•Finance & Insurance News

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