FORT WORTH, Texas--(BUSINESS WIRE)--GENERAL MOTORS FINANCIAL COMPANY, INC. (“GM Financial” or the “Company”) announced net income of $377 million for the quarter ended December 31, 2019, compared to $318 million for the quarter ended December 31, 2018. Net income was $1.6 billion for both the years ended December 31, 2019 and 2018.
Retail loan originations were $5.5 billion for the quarter ended December 31, 2019, compared to $8.4 billion for the quarter ended December 31, 2018. Retail loan originations for the year ended December 31, 2019 were $25.1 billion, compared to $26.2 billion for the year ended December 31, 2018. The outstanding balance of retail finance receivables, net of fees was $42.3 billion at December 31, 2019, compared to $40.7 billion at December 31, 2018.
Operating lease originations were $5.4 billion for the quarter ended December 31, 2019, compared to $5.2 billion for the quarter ended December 31, 2018. Operating lease originations for the year ended December 31, 2019 were $22.4 billion, compared to $22.6 billion for the year ended December 31, 2018. Leased vehicles, net was $42.1 billion at December 31, 2019, compared to $43.6 billion at December 31, 2018.
The outstanding balance of commercial finance receivables, net of fees was $12.1 billion at December 31, 2019, compared to $12.7 billion at December 31, 2018.
Retail finance receivables 31-60 days delinquent were 3.2% of the portfolio at December 31, 2019 and 3.3% at December 31, 2018. Accounts more than 60 days delinquent were 1.3% of the portfolio at December 31, 2019 and 1.4% at December 31, 2018.
Annualized net charge-offs were 1.8% of average retail finance receivables for both the quarters ended December 31, 2019 and 2018. For the year ended December 31, 2019, net charge-offs were 1.6%, compared to 1.8% for the year ended December 31, 2018.
The Company had total available liquidity of $24.1 billion at December 31, 2019, consisting of $3.3 billion of cash and cash equivalents, $17.5 billion of borrowing capacity on unpledged eligible assets, $0.3 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 joint ventures that conduct automotive finance operations in China were $40 million for the quarter ended December 31, 2019, compared to $42 million for the quarter ended December 31, 2018. Earnings for the year ended December 31, 2019 were $166 million, compared to $183 million for the year ended December 31, 2018.
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. In lieu of a conference call, management recorded remarks addressing the Company’s results of operations for the year and quarter ended December 31, 2019. This recording, along with the presentation slides and this release, will be posted to the Company’s website on February 5, 2020 by 11:00 a.m. central time. The recording and materials can be accessed via the Investor Relations section of the Company’s website at 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, 2019. Such risks include - but are not limited to - GM's ability to sell new vehicles that we finance in the markets we serve; dealers' effectiveness in marketing our financial products to consumers; the viability of GM-franchised dealers that are commercial loan customers; the sufficiency, availability and cost of sources of financing, including credit facilities, securitization programs and secured and unsecured debt issuances; the adequacy of our underwriting criteria for loans and leases and the level of net charge-offs, delinquencies and prepayments on the loans and leases we purchase or originate; our ability to effectively manage capital or liquidity consistent with evolving business or operational needs, risk management standards and regulatory or supervisory requirements; the adequacy of our allowance for loan losses on our finance receivables; our ability to maintain and expand our market share due to competition in the automotive finance industry from a large number of banks, credit unions, independent finance companies and other captive automotive finance subsidiaries; changes in the automotive industry that result in a change in demand for vehicles and related vehicle financing; the effect, interpretation or application of new or existing laws, regulations, court decisions and accounting pronouncements; adverse determinations with respect to the application of existing laws, or the results of any audits from tax authorities, as well as changes in tax laws and regulations, supervision, enforcement and licensing across various jurisdictions; the prices at which used vehicles are sold in the wholesale auction markets; vehicle return rates, our ability to estimate residual value at the inception of a lease and the residual value performance on vehicles we lease; interest rate fluctuations and certain related derivatives exposure; our joint ventures in China, which we cannot operate solely for our benefit and over which we have limited control; changes in the determination of LIBOR and other benchmark rates; our ability to secure private customer and employee data or our proprietary information, manage risks related to security breaches and other disruptions to our networks and systems and comply with enterprise data regulations in all key market regions; foreign currency exchange rate fluctuations, public health crises, including the occurrence of a contagious disease or illness, such as the novel coronavirus and other risks applicable to our operations outside of the U.S.; and changes in local, regional, national or international economic, social or political conditions. 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. Consolidated Statements of Income (Unaudited, in millions) |
||||||||||||||||
|
Three Months Ended
|
|
Years Ended
|
|||||||||||||
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|||||||||
Revenue |
|
|
|
|
|
|
|
|||||||||
Finance charge income |
$ |
1,033 |
|
|
$ |
962 |
|
|
$ |
4,071 |
|
|
$ |
3,629 |
|
|
Leased vehicle income |
2,496 |
|
|
2,518 |
|
|
10,032 |
|
|
9,963 |
|
|||||
Other income |
107 |
|
|
119 |
|
|
451 |
|
|
424 |
|
|||||
Total revenue |
3,636 |
|
|
3,599 |
|
|
14,554 |
|
|
14,016 |
|
|||||
Costs and expenses |
|
|
|
|
|
|
|
|||||||||
Operating expenses |
433 |
|
|
406 |
|
|
1,564 |
|
|
1,522 |
|
|||||
Leased vehicle expenses |
1,660 |
|
|
1,769 |
|
|
6,685 |
|
|
6,917 |
|
|||||
Provision for loan losses |
222 |
|
|
198 |
|
|
726 |
|
|
642 |
|
|||||
Interest expense |
863 |
|
|
852 |
|
|
3,641 |
|
|
3,225 |
|
|||||
Total costs and expenses |
3,178 |
|
|
3,225 |
|
|
12,616 |
|
|
12,306 |
|
|||||
Equity income |
40 |
|
|
42 |
|
|
166 |
|
|
183 |
|
|||||
Income before income taxes |
498 |
|
|
416 |
|
|
2,104 |
|
|
1,893 |
|
|||||
Income tax provision |
121 |
|
|
98 |
|
|
537 |
|
|
323 |
|
|||||
Net income |
377 |
|
|
318 |
|
|
1,567 |
|
|
1,570 |
|
|||||
Less: cumulative dividends on preferred stock |
22 |
|
|
22 |
|
|
90 |
|
|
66 |
|
|||||
Net income attributable to common shareholder |
$ |
355 |
|
|
$ |
296 |
|
|
$ |
1,477 |
|
|
$ |
1,504 |
|
|
Consolidated Balance Sheets (Unaudited, in millions) |
||||||||
|
December 31, 2019 |
|
December 31, 2018 |
|||||
ASSETS |
|
|
|
|||||
Cash and cash equivalents |
$ |
3,311 |
|
|
$ |
4,883 |
|
|
Finance receivables, net |
53,473 |
|
|
52,512 |
|
|||
Leased vehicles, net |
42,055 |
|
|
43,559 |
|
|||
Goodwill |
1,185 |
|
|
1,186 |
|
|||
Equity in net assets of non-consolidated affiliates |
1,455 |
|
|
1,355 |
|
|||
Related party receivables |
678 |
|
|
729 |
|
|||
Other assets |
7,060 |
|
|
5,696 |
|
|||
Total assets |
$ |
109,217 |
|
|
$ |
109,920 |
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|||||
Liabilities |
|
|
|
|||||
Secured debt |
$ |
39,959 |
|
|
$ |
42,835 |
|
|
Unsecured debt |
48,979 |
|
|
48,153 |
|
|||
Deferred income |
3,648 |
|
|
3,605 |
|
|||
Related party payables |
82 |
|
|
63 |
|
|||
Other liabilities |
3,823 |
|
|
3,605 |
|
|||
Total liabilities |
96,491 |
|
|
98,261 |
|
|||
Total shareholders' equity |
12,726 |
|
|
11,659 |
|
|||
Total liabilities and shareholders' equity |
$ |
109,217 |
|
|
$ |
109,920 |
|
|
Operational and Financial Data (Unaudited, Dollars in millions) |
|||||||||||||||
|
Three Months Ended December 31, |
|
Years Ended December 31, |
||||||||||||
Originations |
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||
Retail finance receivables originations |
$ |
5,468 |
|
|
$ |
8,384 |
|
|
$ |
25,150 |
|
|
$ |
26,181 |
|
Lease originations |
$ |
5,402 |
|
|
$ |
5,248 |
|
|
$ |
22,366 |
|
|
$ |
22,593 |
|
|
Three Months Ended December 31, |
|
Years Ended December 31, |
||||||||||||
Average Earning Assets |
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||
Average retail finance receivables |
$ |
42,112 |
|
|
$ |
39,244 |
|
|
$ |
42,112 |
|
|
$ |
36,167 |
|
Average commercial finance receivables |
12,184 |
|
|
11,761 |
|
|
12,429 |
|
|
10,689 |
|
||||
Average finance receivables |
54,296 |
|
|
51,005 |
|
|
54,541 |
|
|
46,856 |
|
||||
Average leased vehicles, net |
42,346 |
|
|
43,873 |
|
|
42,881 |
|
|
43,710 |
|
||||
Average earning assets |
$ |
96,642 |
|
|
$ |
94,878 |
|
|
$ |
97,422 |
|
|
$ |
90,566 |
|
Ending Earning Assets |
December 31, 2019 |
|
December 31, 2018 |
||||
Retail finance receivables, net of fees |
$ |
42,268 |
|
|
$ |
40,702 |
|
Commercial finance receivables, net of fees |
12,149 |
|
|
12,721 |
|
||
Leased vehicles, net |
42,055 |
|
|
43,559 |
|
||
Ending earning assets |
$ |
96,472 |
|
|
$ |
96,982 |
|
Finance Receivables |
December 31, 2019 |
|
December 31, 2018 |
||||
Retail |
|
|
|
||||
Retail finance receivables, net of fees |
$ |
42,268 |
|
|
$ |
40,702 |
|
Less: allowance for loan losses |
(866 |
) |
|
(844 |
) |
||
Total retail finance receivables, net |
41,402 |
|
|
39,858 |
|
||
Commercial |
|
|
|
||||
Commercial finance receivables, net of fees |
12,149 |
|
|
12,721 |
|
||
Less: allowance for loan losses |
(78 |
) |
|
(67 |
) |
||
Total commercial finance receivables, net |
12,071 |
|
|
12,654 |
|
||
Total finance receivables, net |
$ |
53,473 |
|
|
$ |
52,512 |
|
Allowance for Loan Losses |
December 31, 2019 |
|
December 31, 2018 |
||
Allowance for loan losses as a percentage of retail finance receivables, net of fees |
2.0 |
% |
|
2.1 |
% |
Allowance for loan losses as a percentage of commercial finance receivables, net of fees |
0.6 |
% |
|
0.5 |
% |
Delinquencies |
December 31, 2019 |
|
December 31, 2018 |
||
Loan delinquency as a percentage of ending retail finance receivables: |
|
|
|
||
31 - 60 days |
3.2 |
% |
|
3.3 |
% |
Greater than 60 days |
1.3 |
|
|
1.4 |
|
Total |
4.5 |
% |
|
4.7 |
% |
|
Three Months Ended
|
|
Years Ended December 31, |
||||||||||||||||
Charge-offs and Recoveries |
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||||||
Charge-offs |
$ |
332 |
|
|
$ |
318 |
|
|
$ |
1,218 |
|
|
$ |
1,196 |
|
||||
Less: recoveries |
(138 |
) |
|
(138 |
) |
|
(548 |
) |
|
(536 |
) |
||||||||
Net charge-offs |
$ |
194 |
|
|
$ |
180 |
|
|
$ |
670 |
|
|
$ |
660 |
|
||||
Net charge-offs as an annualized percentage of average retail finance receivables |
1.8 |
% |
|
1.8 |
% |
|
1.6 |
% |
|
1.8 |
% |
||||||||
|
Three Months Ended
|
|
Years Ended December 31, |
||||||||||||||||
Operating Expenses |
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||||||
Operating expenses as an annualized percentage of average earning assets |
1.8 |
% |
|
1.7 |
% |
|
1.6 |
% |
|
1.7 |
% |
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