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GM Financial Reports September Quarter Operating Results

  • Earnings of $124 million
  • Consumer loan and lease originations of $1.8 billion
  • Available liquidity of $3.1 billion
  • Annualized net credit losses of 2.5% on consumer loans

FORT WORTH, Texas--(BUSINESS WIRE)-- GENERAL MOTORS FINANCIAL COMPANY, INC. (“GM Financial” or the “Company”) announced net income of $124 million for the quarter ended September 30, 2012, compared to $109 million for the quarter ended September 30, 2011. Net income for the nine months ended September 30, 2012 was $373 million, compared to $282 million for the nine months ended September 30, 2011.

Consumer loan originations were $1.5 billion for the quarter ended September 30, 2012, compared to $1.5 billion for the quarter ended June 30, 2012, and $1.4 billion for the quarter ended September 30, 2011. Consumer loan originations for the nine months ended September 30, 2012 were $4.4 billion, compared to $3.8 billion for the nine months ended September 30, 2011. The outstanding balance of consumer finance receivables totaled $10.9 billion at September 30, 2012.

Lease originations of General Motors Company (“GM”) vehicles were $299 million for the quarter ended September 30, 2012, compared to $394 million for the quarter ended June 30, 2012 and $189 million for the quarter ended September 30, 2011. Lease originations for the nine months ended September 30, 2012 were $1.1 billion, compared to $672 million for the nine months ended September 30, 2011. Leased vehicles, net, totaled $1.6 billion at September 30, 2012.

Consumer finance receivables 31-to-60 days delinquent were 5.2% of the portfolio at September 30, 2012, compared to 4.7% at September 30, 2011. Accounts more than 60 days delinquent were 1.9% of the portfolio at September 30, 2012, compared to 1.7% a year ago.

Annualized net credit losses were 2.5% of average consumer finance receivables for the quarter ended September 30, 2012, compared to 3.0% for the quarter ended September 30, 2011. For the nine months ended September 30, 2012, annualized consumer net credit losses were 2.2%, compared to 3.1% last year.

The Company had total available liquidity of $3.1 billion at September 30, 2012, consisting of $1.8 billion 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 3,700 employees, over 809,000 customers and $16.3 billion in assets. 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 acquisitions and 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 Nine Months Ended
September 30, September 30,
2012 2011 2012 2011
Revenue
Finance charge income $ 415,064 $ 348,285 $ 1,176,107 $ 907,047
Leased vehicles income 80,578 27,096 199,699 60,831
Other income 18,875 15,300 56,625 47,855
514,517 390,681 1,432,431 1,015,733
Costs and expenses
Operating expenses 105,344 88,135 295,930 249,920
Leased vehicles expenses 56,029 17,864 147,686 39,446
Provision for loan losses 78,166 50,941 188,596 134,935
Interest expense 74,329 56,295 201,597 139,729
313,868 213,235 833,809 564,030
Income before income taxes 200,649 177,446 598,622 451,703
Income tax provision 76,701 68,639 226,100 169,840
Net income $ 123,948 $ 108,807 $ 372,522 $ 281,863
Consolidated Balance Sheets
(Unaudited, in Thousands)
September 30, December 31, September 30,
2012 2011 2011
Assets
Cash and cash equivalents $ 1,805,981 $ 572,297 $ 307,215
Finance receivables, net 10,598,353 9,162,492 8,917,970
Restricted cash – securitization notes payable 718,729 919,283 929,196
Restricted cash – credit facilities 118,492 136,556 124,979
Property and equipment, net 52,079 47,440 46,487
Leased vehicles, net 1,570,625 809,491 564,103
Deferred income taxes 143,733 108,684 119,017
Goodwill 1,108,437 1,107,982 1,107,684
Other assets 178,770 178,695 190,083
Total assets $ 16,295,199 $ 13,042,920 $ 12,306,734
Liabilities and Shareholder's Equity
Liabilities:
Credit facilities $ 556,946 $ 1,099,391 $ 552,871
Securitization notes payable 9,005,203 6,937,841 6,901,572
Senior notes 1,500,000 500,000 500,000
Convertible senior notes 500 500
Accounts payable and accrued expenses 233,151 160,172 194,244
Deferred income 66,647 24,987
Taxes payable 91,480 85,477 83,231
Intercompany taxes payable 548,056 300,306 245,369
Interest rate swap and cap agreements 1,802 11,208 22,932
Total liabilities 12,003,285 9,119,882 8,500,719
Shareholder's equity 4,291,914 3,923,038 3,806,015
Total liabilities and shareholder's equity $ 16,295,199 $ 13,042,920 $ 12,306,734
Consolidated Statements of Cash Flows
(Unaudited, in Thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
2012 2011 2012 2011
Cash flows from operating activities:
Net income $ 123,948 $ 108,807 $ 372,522 $ 281,863
Adjustments to reconcile net income to

net cash provided by operating activities:

Depreciation and amortization 66,083 31,353 178,444 72,397
Accretion and amortization of loan and leasing fees (13,372 ) (6,996 ) (37,635 ) (14,910 )
Amortization of carrying value adjustment (10,421 ) 16,853 (2,075 ) 143,775
Amortization of purchase accounting premium (7,071 ) (13,007 ) (26,068 ) (57,698 )
Provision for loan losses 78,166 50,941 188,596 134,935
Deferred income taxes 3,732 3,303 (34,002 ) 41,159
Stock-based compensation expense 602 3,532 3,141 9,585
Other (175 ) (5,968 ) (9,072 ) (23,148 )
Changes in assets and liabilities:
Other assets 8,613 1,699 (4,399 ) 27,743
Accounts payable and accrued expenses 28,977 8,721 48,159 (500 )
Taxes payable 684 7,795 5,985 (79,518 )
Intercompany taxes payable 69,895 59,214 247,750 203,155
Net cash provided by operating activities 349,661 266,247 931,346 738,838
Cash flows from investing activities:
Purchases of consumer finance receivables, net (1,483,858 ) (1,340,610 ) (4,353,965 ) (3,793,696 )
Principal collections and recoveries
on consumer finance receivables 1,009,527 936,431 3,049,533 2,816,607
Fundings of commercial finance receivables, net (408,341 ) (581,499 )
Collections of commercial finance receivables 253,494 299,731
Net purchases of leased vehicles (221,904 ) (156,022 ) (824,826 ) (552,709 )
Net changes in restricted cash and other (32,682 ) (3,801 ) 214,742 (27,152 )
Net cash used by investing activities (883,764 ) (564,002 ) (2,196,284 ) (1,556,950 )
Cash flows from financing activities:
Net change in credit facilities 21,746 133,442 (552,388 ) (274,040 )
Net change in securitization notes payable 385,498 33,380 2,093,322 828,527
Issuance of senior notes 1,000,000 1,000,000 500,000
Other net changes (21,061 ) (85,397 ) (44,052 ) (120,132 )
Net cash provided by financing activities 1,386,183 81,425 2,496,882 934,355
Net increase in cash and cash equivalents 852,080 (216,330 ) 1,231,944 116,243
Effect of Canadian exchange rate changes on
cash and cash equivalents 1,810 (2,183 ) 1,740 (3,582 )
Cash and cash equivalents at beginning of period 952,091 525,728 572,297 194,554
Cash and cash equivalents at end of period $ 1,805,981 $ 307,215 $ 1,805,981 $ 307,215
Other Financial Data
(Unaudited, Dollars in Thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
2012 2011 2012 2011
Consumer finance receivables originations $ 1,477,860 $ 1,358,115 $ 4,363,019 $ 3,845,258
Commercial finance receivables originations 410,344 584,140
GM lease origination volume 299,287 188,706 1,077,446 672,417
GM new vehicle loans as a percent of
total consumer loan originations 32.1 % 30.9 % 30.8 % 28.0 %
GM new vehicle loans and leases
as a percent of total consumer loan and lease originations 43.5 % 39.3 % 44.5 % 38.7 %
Loans securitized $ 1,372,044 $ 954,915 $ 5,721,379 $ 3,872,703
Three Months Ended Nine Months Ended
September 30, September 30,
2012 2011 2012 2011
Average consumer finance receivables $ 10,657,242 $ 9,276,098 $ 10,240,740 $ 8,958,549
Average commercial finance receivables 222,039 98,428
Average finance receivables 10,879,281 9,276,098 10,339,168 8,958,549
Average leased vehicles, net 1,482,640 501,767 1,226,636 305,442
Average earning assets $ 12,361,921 $ 9,777,865 $ 11,565,804 $ 9,263,991
Finance receivables
September 30, December 31, September 30,
2012 2011 2011
Pre-acquisition consumer finance receivables - outstanding balance

$

2,597,182

*

$ 4,366,075 $ 5,076,311
Pre-acquisition consumer finance receivables - carrying value $ 2,349,536 $ 4,027,361 $ 4,707,399
Post-acquisition consumer finance receivables, net of fees

8,255,453

*

5,313,899 4,361,893
10,604,989 9,341,260 9,069,292
Less: allowance for loan losses on post-acquisition
consumer finance receivables (291,049 ) (178,768 ) (151,322 )
Total consumer finance receivables, net 10,313,940 9,162,492 8,917,970
Commercial finance receivables, net of fees 284,413
Less: allowance for loan losses
Total commercial finance receivables, net 284,413
Total finance receivables, net $ 10,598,353 $ 9,162,492 $ 8,917,970
Allowance for loan losses as a percent
of post-acquisition consumer finance receivables 3.5 % 3.4 % 3.5 %

*The outstanding balance of consumer finance receivables totaling $10.9 billion at September 30, 2012, is the sum of pre-acquisition consumer finance receivables-outstanding balance and post-acquisition consumer finance receivables, net of fees

September 30,
2012 2011
Loan delinquency as a percent of ending consumer finance receivables:
31 - 60 days 5.2 % 4.7 %
Greater than 60 days 1.9 1.7
Total 7.1 % 6.4 %

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 Nine Months Ended
September 30, September 30,
2012 2011 2012 2011
Charge-offs $ 82,255 $ 20,246 $ 186,054 $ 28,793
Adjustments to reflect write-offs of the
contractual amounts on the pre-acquisition portfolio 67,267 133,084 236,031 437,984
Credit losses on the combined portfolio $ 149,522 $ 153,330 $ 422,085 $ 466,777
Credit losses on the combined portfolio $ 149,522 $ 153,330 $ 422,085 $ 466,777
Less: recoveries (82,476 ) (83,373 ) (256,776 ) (257,724 )
Net credit losses on the combined portfolio $ 67,046 $ 69,957 $ 165,309 $ 209,053
Annualized net credit losses as a percent of
average consumer finance receivables 2.5 % 3.0 % 2.2 % 3.1 %
Recoveries as a percent of
gross repossession credit losses 59.2 % 55.3 % 61.5 % 54.2 %
Three Months Ended Nine Months Ended
September 30, September 30,
2012 2011 2012 2011
Contracts receiving a payment deferral as an average
quarterly percent of average consumer finance
receivables 5.7 % 5.4 % 5.4 % 5.2 %
Operating expenses $ 105,344 $ 88,135 $ 295,930 $ 249,920
Annualized operating expenses as a percent of
average earning assets 3.4 % 3.6 % 3.4 % 3.6 %

General Motors Financial Company, Inc.
Investor Relations, 817-302-7000

Source: General Motors Financial Company, Inc.