GM Financial Reports June Quarter 2017 Operating Results

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Business Wire 25-Jul-2017 7:55 AM
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June quarter income from continuing operations of $270 million
Retail loan and lease originations of $12.0 billion for the June quarter
End of period earning assets of $80.5 billion
Available liquidity of $17.0 billion at quarter-end
FORT WORTH, Texas--(BUSINESS WIRE)-- GENERAL MOTORS FINANCIAL COMPANY, INC.(GM Financial or the Company) announced income from continuing operations of $270 million for the quarter ended June30, 2017, compared to $143 million for the quarter ended June30, 2016. Income from continuing operations for the six months ended June30, 2017 was $449 million, compared to $281 million for the six months ended June30, 2016.
Retail loan originations were $5.3 billion for the quarter ended June30, 2017, compared to $5.6 billion for the quarter ended March 31, 2017, and $3.2 billion for the quarter ended June30, 2016. Retail loan originations for the six months ended June30, 2017 were $10.9 billion, compared to $6.4 billion for the six months ended June30, 2016. The outstanding balance of retail finance receivables was $31.1 billion at June30, 2017.
Operating lease originations were $6.7 billion for the quarter ended June30, 2017, compared to $6.3 billion for the quarter ended March 31, 2017, and $6.5 billion for the quarter ended June30, 2016. Operating lease originations for the six months ended June30, 2017 were $13.0 billion, compared to $13.2 billion for the six months ended June30, 2016. Leased vehicles, net was $39.7 billion at June30, 2017.
The outstanding balance of commercial finance receivables was $9.7 billion at June30, 2017, compared to $8.5 billion at March 31, 2017 and $6.0 billion at June30, 2016.
Retail finance receivables 31-60 days delinquent were 3.4% of the portfolio at June30, 2017 and 4.3% at June30, 2016. Accounts more than 60 days delinquent were 1.5% of the portfolio at June30, 2017 and 1.9% at June30, 2016.
Annualized net charge-offs were 1.7% of average retail finance receivables for the quarter ended June30, 2017 and 2.2% for the quarter ended June30, 2016. For the six months ended June30, 2017, annualized retail net charge-offs were 2.0%, compared to 2.3% for the six months ended June30, 2016.
The Company had total available liquidity of $17.0 billion at June30, 2017, consisting of $5.2 billion of cash and cash equivalents, $10.7 billion of borrowing capacity on unpledged eligible assets, $0.1 billion of borrowing capacity on committed unsecured lines of credit and $1.0 billion of borrowing capacity on a Junior Subordinated Revolving Credit Facility from GM.
Earnings resulting from the Company's equity investment in SAIC-GMAC, a joint venture that conducts auto finance operations in China, were $41 million for the three months ended June30, 2017 compared to $37 million for the three months ended June30, 2016. Earnings for the six months ended June30, 2017 were $88 million, compared to $73 million for the six months ended June30, 2016.
Operating Results
As previously announced, on March 5, 2017, our parent company entered into a Master Agreement with Peugeot S.A. to sell certain businesses and other assets in Europe, including our European subsidiaries. The assets and liabilities of our European Operations have been reclassified as held for sale and reported as discontinued operations for all periods presented.
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. For more information, visit 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, 2016. Such risks include - but are not limited to - GMs ability to sell new vehicles that we finance in the markets we serve; the viability of GM-franchised dealers that are commercial loan customers; the availability and cost of sources of financing; our joint venture in China, which we cannot operate solely for our benefit and over which we have limited control; the level of net charge-offs, delinquencies and prepayments on the loans and leases we originate; the effect, interpretation or application of new or existing laws, regulations, court decisions and accounting pronouncements; the prices at which used cars are sold in the wholesale auction markets; vehicle return rates and the residual value performance on vehicles we lease; interest rate fluctuation and certain related derivatives exposure; foreign currency exchange rate fluctuations; our financial condition and liquidity, as well as future cash flows and earnings; changes in general economic and business conditions; competition; our ability to manage risks related to security breaches and other disruptions to our networks and systems; changes in business strategy, including expansion of product lines and credit risk appetite, acquisitions and divestitures; and risks and uncertainties associated with the consummation of the sale of GM's Opel/Vauxhall businesses, certain other assets in Europe and certain of our European subsidiaries and branches to Peugeot S.A., including satisfaction of closing 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.
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General Motors Financial Company, Inc.
Consolidated Statements of Income
(Unaudited, Dollars in millions)

Three Months Ended June 30, Six Months Ended June 30,
2017 2016 2017 2016
Revenue
Finance charge income $ 812 $ 698 $ 1,564 $ 1,389
Leased vehicle income 2,107 1,383 4,038 2,562
Other income 71 57 136 118
Total revenue 2,990 2,138 5,738 4,069
Costs and expenses
Operating expenses 333 296 663 569
Leased vehicle expenses 1,549 1,062 2,978 1,951
Provision for loan losses 158 144 369 334
Interest expense 635 460 1,231 882
Total costs and expenses 2,675 1,962 5,241 3,736
Equity income 41 37 88 73
Income from continuing operations before income taxes 356 213 585 406
Income tax provision 86 70 136 125
Income from continuing operations 270 143 449 281
(Loss) income from discontinued operations, net of tax (208 ) 46 (185 ) 72
Net income $ 62 $ 189 $ 264 $ 353
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Consolidated Balance Sheets
(Unaudited, Dollars in millions)

June 30, 2017 December 31, 2016
ASSETS
Cash and cash equivalents $ 5,201 $ 2,815
Finance receivables, net 39,882 33,475
Leased vehicles, net 39,725 34,342
Goodwill 1,198 1,196
Equity in net assets of non-consolidated affiliates 1,056 944
Related party receivables 383 347
Other assets 4,377 3,695
Assets held for sale 11,689 10,951
Total assets $ 103,511 $ 87,765
LIABILITIES AND SHAREHOLDER'S EQUITY
Liabilities
Secured debt $ 38,828 $ 35,087
Unsecured debt 39,651 29,476
Deferred income 2,830 2,355
Related party payables 273 320
Other liabilities 2,301 2,141
Liabilities held for sale 10,472 9,693
Total liabilities 94,355 79,072
Shareholder's equity 9,156 8,693
Total liabilities and shareholder's equity $ 103,511 $ 87,765
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Operational and Financial Data
(Unaudited, Dollars in millions)

Three Months Ended June 30, Six Months Ended June 30,
Originations 2017 2016 2017 2016
Retail finance receivables originations $ 5,253 $ 3,237 $ 10,860 $ 6,421
GM lease originations $ 6,751 $ 6,471 $ 13,024 $ 13,198
GM new vehicle loans and leases as a percentage of total loan and lease originations 88.8 % 88.0 % 88.3 % 88.8 %
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Three Months Ended June 30, Six Months Ended June 30,
Average Earning Assets 2017 2016 2017 2016
Average retail finance receivables $ 30,432 $ 23,618 $ 28,960 $ 23,234
Average commercial finance receivables 9,074 5,768 8,520 5,521
Average finance receivables 39,506 29,386 37,480 28,755
Average leased vehicles, net 38,368 26,336 37,055 24,243
Average earning assets $ 77,874 $ 55,722 $ 74,535 $ 52,998
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Ending Earning Assets June 30, 2017 June 30, 2016
Retail finance receivables, net of fees $ 31,100 $ 24,102
Commercial finance receivables, net of fees 9,675 5,985
Leased vehicles, net 39,725 28,310
Ending earning assets $ 80,500 $ 58,397
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Total Finance Receivables June 30, 2017 December 31, 2016
Retail
Retail finance receivables, net of fees(a) $ 31,100 $ 26,400
Less: allowance for loan losses (844 ) (765 )
Total retail finance receivables, net 30,256 25,635
Commercial
Commercial finance receivables, net of fees 9,675 7,880
Less: allowance for loan losses (49 ) (40 )
Total commercial finance receivables, net 9,626 7,840
Total finance receivables, net $ 39,882 $ 33,475
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(a) Net of unearned income, unamortized premiums and discounts, and deferred fees and costs of $259 million and $178 million at June 30, 2017 and December 31, 2016.
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Allowance for Loan Losses June 30, 2017 December 31, 2016
Allowance for loan losses as a percentage of retail finance receivables, net of fees 2.7 % 2.9 %
Allowance for loan losses as a percentage of commercial finance receivables, net of fees 0.5 % 0.5 %
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Delinquencies June 30, 2017 June 30, 2016
Loan delinquency as a percentage of ending retail finance receivables:
31 - 60 days 3.4 % 4.3 %
Greater than 60 days 1.5 1.9
Total 4.9 % 6.2 %
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Three Months Ended June 30, Six Months Ended June 30,
Charge-offs and Recoveries 2017 2016 2017 2016
Charge-offs $ 272 $ 258 $ 570 $ 542
Less: recoveries (142 ) (130 ) (285 ) (275 )
Net charge-offs $ 130 $ 128 $ 285 $ 267
Net charge-offs as an annualized percentage of average retail finance receivables 1.7 % 2.2 % 2.0 % 2.3 %
Recovery rate as a percentage of gross repossession charge-offs in North America 53.9 % 54.8 % 52.7 % 54.4 %
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Three Months Ended June 30, Six Months Ended June 30,
Operating Expenses 2017 2016 2017 2016
Operating expenses as an annualized percentage of average earning assets 1.7 % 2.1 % 1.8 % 2.2 %
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View source version on businesswire.com: http://www.businesswire.com/news/home/20170725005800/en/
General Motors Financial Company, Inc. Stephen Jones, 817-302-7119Vice President, Investor RelationsInvestors@gmfinancial.com
Source: General Motors Financial Company, Inc.