General Motors Financial Company, Inc. - FORM 8-K - EX-99.1 - PRESS RELEASE

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8-K - FORM 8-K - General Motors Financial Company, Inc.	d8k.htm

Exhibit 99.1

LOGO

GM FINANCIAL REPORTS MARCH QUARTER OPERATING RESULTS

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Earnings of $77 million

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Loan originations of $1.1 billion

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Lease originations of $311 million

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Annualized net credit losses of 4.0%

FORT WORTH, TEXAS May 4, 2011 – GENERAL MOTORS FINANCIAL COMPANY, INC. (“GM Financial” or the “Company”), announced net income of $77 million for the quarter ended March 31, 2011.

Loan originations were $1.1 billion for the quarter ended March 31, 2011, compared to $935 million for the quarter ended December 31, 2010 and $624 million for the quarter ended March 31, 2010. Lease originations were $311 million for the quarter ended March 31, 2011, compared to $11 million for the quarter ended December 31, 2010. Loan and lease financing for new GM vehicles accounted for 38.8% of total loan and lease originations for the quarter ended March 31, 2011, compared to 19.0% for the quarter ended December 31, 2010. Finance receivables totaled $8.7 billion at March 31, 2011.

Finance receivables 31-to-60 days delinquent were 3.8% of the portfolio at March 31, 2011, compared to 5.3% at March 31, 2010. Accounts more than 60 days delinquent were 1.5% of the portfolio at March 31, 2011, compared to 2.2% a year ago.

Annualized net charge-offs were 4.0% of average finance receivables for the quarter ended March 31, 2011, compared to 7.6% for the quarter ended March 31, 2010.

The Company had total available liquidity of $710 million at March 31, 2011, consisting of $333 million of unrestricted cash, approximately $77 million 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 3,000 employees, 800,000 customers and $9 billion in auto receivables and leases. The Company is a wholly-owned subsidiary of General Motors Company and is headquartered in Fort Worth, Texas. For more information, visit www.americredit.com.

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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 transition report on Form 10-K for the six month period ended December 31, 2010. Such risks include – but are not limited to – variable economic conditions, adverse portfolio performance, volatile wholesale vehicle values, reliance on warehouse financing and capital markets, the ability to continue to securitize loans, the continued availability of credit enhancement for securitization transactions on acceptable terms, fluctuating interest rates, competition, regulatory and legal changes, the high degree of risk associated with subprime borrowers, and exposure to 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.

On October 1, 2010, the Company was acquired by General Motors Holdings LLC, a wholly owned subsidiary of General Motors Company. The merger was accounted for under purchase accounting whereby the purchase price of the transaction was allocated to the assets acquired and liabilities assumed based upon fair market values. As a result of the purchase price allocation, the carrying value of GM Financial’s net finance receivables, deferred tax assets, credit facilities, securitization notes payable and uncertain tax positions increased. Additionally, goodwill of approximately $1.1 billion was established on October 1, 2010. The consolidated financial statements as of and for the three months ended March 31, 2011 (labeled “Successor”) reflect the change in basis from the application of purchase accounting. The consolidated financial statements for the periods prior to the merger (labeled “Predecessor”), have been prepared on the same basis as the audited financial statements included in the annual report on Form 10-K for the year ended June 30, 2010.

General Motors Financial Company, Inc.

Consolidated Statements of Income

(Unaudited, Dollars in Thousands)


	Successor		Predecessor
	Three Months Ended March 31, 2011		Three Months Ended March 31, 2010
Revenue:
Finance charge income	$	267,846	$	339,892
Other income		27,321		21,213

		295,167		361,105

Costs and expenses:
Operating expenses		76,406		75,215
Leased vehicles expenses		8,484		8,688
Provision for loan losses		39,424		74,583
Interest expense		40,617		106,584
Restructuring charges				220

		164,931		265,290


Income before income taxes		130,236		95,815

Income tax provision		52,998		32,609


Net income	$	77,238	$	63,206

Consolidated Balance Sheets

(Unaudited, Dollars in Thousands)


	Successor				Predecessor
	March 31,		December 31,		March 31,
	2011		2010		2010
Cash and cash equivalents	$	333,183	$	194,554	$	497,329
Finance receivables, net		8,276,473		8,197,324		8,187,125
Restricted cash – securitization notes payable		1,003,455		926,082		989,356
Restricted cash – credit facilities		151,131		131,438		153,244
Property and equipment, net		44,673		47,290		38,838
Leased vehicles, net		316,425		46,780		117,037
Deferred income taxes		161,886		140,523		83,249
Goodwill		1,112,284		1,112,284
Other assets		210,698		122,463		157,473

Total assets	$	11,610,208	$	10,918,738	$	10,223,651


Credit facilities	$	1,411,884	$	831,802	$	658,137
Securitization notes payable		6,061,281		6,128,217		6,462,494
Senior notes		69,962		70,054		70,620
Convertible senior notes		1,446		1,446		408,539
Accounts payable and accrued expenses		122,945		97,169		167,286
Taxes payable		177,823		160,712		59,356
Intercompany taxes payable		97,031		42,214
Interest rate swap agreements		33,767		46,797		83,946
Other liabilities		21,851		10,219		11,840

Total liabilities		7,997,990		7,388,630		7,922,218


Shareholders’ equity		3,612,218		3,530,108		2,301,433

Total liabilities and shareholders’ equity	$	11,610,208	$	10,918,738	$	10,223,651

Consolidated Statements of Cash Flows

(Unaudited, Dollars in Thousands)


	Successor			Predecessor
	Three Months Ended			Three Months Ended
	March 31,			March 31,
	2011			2010
Cash flows from operating activities:
Net income	$	77,238		$	63,206
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		17,868			18,351
Accretion and amortization of fees		(2,936	)		717
Amortization of finance receivables premium		67,927
Amortization of debt discount		(23,117	)
Provision for loan losses		39,424			74,583
Deferred income taxes		(21,789	)		(68,794	)
Stock-based compensation expense		2,925			4,604
Other		(8,844	)		(2,950	)
Changes in assets and liabilities:
Other assets		11,521			40,358
Accounts payable and accrued expenses		(12,765	)		59,202
Taxes payable		17,117			2,301
Intercompany taxes payable		54,817

Net cash provided by operating activities		219,386			191,578

Cash flows from investing activities:
Purchases of receivables		(1,134,782	)		(610,643	)
Principal collections and recoveries on receivables		954,291			952,548
Net purchases of leased vehicles		(307,326	)
Net change in restricted cash and other		(110,886	)		(144,897	)

Net cash (used) provided by investing activities		(598,703	)		197,008

Cash flows from financing activities:
Net change in credit facilities		581,011			(51,790	)
Net change in securitization notes payable		(45,058	)		(129,064	)
Retirement of debt					(20,425	)
Other net changes		(17,809	)		(9,646	)

Net cash provided (used) by financing activities		518,144			(210,925	)

Net increase in cash and cash equivalents		138,827			177,661
Effect of Canadian exchange rate changes on cash and cash equivalents		(198	)		24
Cash and cash equivalents at beginning of period		194,554			319,644

Cash and cash equivalents at end of period	$	333,183		$	497,329

Other Financial Data

(Unaudited, Dollars in Thousands)


	Three Months Ended		Three Months Ended		Three Months Ended
	March 31,		December 31,		March 31,
	2011		2010		2010

Loan origination volume	$	1,137,921	$	934,812	$	623,855

Average finance receivables		8,666,189		8,679,506		9,042,982

Loans securitized		848,810		742,708	$	927,758

Lease origination volume	$	310,947	$	10,655


	Successor						Predecessor
	March 31,			December 31,			March 31,
	2011			2010			2010
Finance receivables:
Pre-acquisition finance receivables	$	6,744,752		$	7,724,188		$	8,810,374
Post-acquisition finance receivables		2,004,813			923,713

		8,749,565			8,647,901			8,810,374
Add purchase accounting premium		355,629			423,556
Less non-accretable discount on:
Pre-acquisition finance receivables		(763,306	)		(847,781	)
Less allowance for loan losses on:
Post-acquisition finance receivables		(65,415	)		(26,352	)
Pre-acquisition finance receivables								(623,249	)

	$	8,276,473		$	8,197,324		$	8,187,125


Non-accretable discount as a percentage of ending pre-acquisition finance receivables		11.3	%		11.0	%


Allowance for loan losses as a percentage of ending post-acquisition finance receivables		3.3	%		2.9	%


Allowance for loan losses as a percentage of ending pre-acquisition finance receivables								7.1	%


	March 31, 2011			March 31, 2010

Delinquency as a percent of ending finance receivables:
31 - 60 days		3.8	%		5.3	%
Greater than 60 days		1.5			2.2

Total		5.3	%		7.5	%


	Three Months Ended			Three Months Ended
	March 31,			March 31,
	2011			2010
Contracts receiving a payment deferral as an average quarterly percentage of average finance receivables		5.2	%		7.1	%

Net charge-offs	$	84,836		$	168,393

Annualized net charge-offs as a percent of average finance receivables		4.0	%		7.6	%

Net recoveries as a percent of gross repossession charge-offs		51.7	%		44.9	%

Components of net margin:


	Successor			Predecessor
	Three Months Ended			Three Months Ended
	March 31,			March 31,
	2011			2010

Finance charge income	$	267,846		$	339,892
Other income		27,321			21,213
Interest expense		(40,617	)		(106,584	)

Net margin	$	254,550		$	254,521

Annualized net margin as a percent of average finance receivables:


	Successor			Predecessor
	Three Months Ended			Three Months Ended
	March 31,			March 31,
	2011			2010
Finance charge income		12.5	%		15.2	%
Other income		1.3			0.9
Interest expense		(1.9	)		(4.7	)

Net margin		11.9	%		11.4	%



	Successor			Predecessor
	Three Months Ended			Three Months Ended
	March 31,			March 31,
	2011			2010
Operating expenses	$	76,406		$	75,215

Annualized operating expenses as a percent of average finance receivables		3.6	%		3.4	%

Contact:

Caitlin DeYoung

(817) 302-7394

General Motors Financial Company, Inc. - FORM 8-K - EX-99.1 - PRESS RELEASE - May 4, 2011

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General Motors Financial Company, Inc. Reports