General Motors Financial Company, Inc. - FORM 8-K - EX-99.1 - February 4, 2015

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Exhibit 99.1

 

LOGO

GM FINANCIAL REPORTS FULL YEAR AND DECEMBER QUARTER 2014

OPERATING RESULTS

 

  •   Full year earnings of $537 million; $59 million for the December quarter

 

  •   Full year consumer loan and lease originations of $21.3 billion; $6.0 billion for the December quarter

 

  •   Full year annualized net credit losses of 1.9% on average consumer finance receivables; 2.2% for the December quarter

 

  •   End of period earning assets of $40.8 billion

FORT WORTH, TEXAS February 4, 2015 – GENERAL MOTORS FINANCIAL COMPANY, INC. (“GM Financial” or the “Company”) announced earnings of $59 million for the quarter ended December 31, 2014, compared to $121 million for the quarter ended December 31, 2013. Earnings for the year ended December 31, 2014 were $537 million, compared to $566 million for the year ended December 31, 2013. Earnings include $13 million and $42 million in pre-tax acquisition and integration expenses for the quarter and year ended December 31, 2013, respectively. Additionally, earnings for the quarter ending December 31, 2013 include $15 million in pre-tax charges associated with discontinuing the Chevrolet brand in Europe.

Consumer loan originations were $4.0 billion for the quarter ended December 31, 2014, compared to $4.1 billion for the quarter ended September 30, 2014, and $3.3 billion for the quarter ended December 31, 2013. Consumer loan originations for the year ended December 31, 2014 were $15.1 billion, compared to $9.6 billion for the year ended December 31, 2013. The outstanding balance of consumer finance receivables totaled $25.7 billion at December 31, 2014.

Operating lease originations of General Motors Company (“GM”) vehicles were $2.1 billion for the quarter ended December 31, 2014, compared to $1.8 billion for the quarter ended September 30, 2014, and $650 million for the quarter ended December 31, 2013. Operating lease originations for the year ended December 31, 2014 were $6.2 billion, compared to $2.8 billion for the year ended December 31, 2013. Leased vehicles, net totaled $7.1 billion at December 31, 2014.

-MORE-

The outstanding balance of commercial finance receivables was $8.1 billion at December 31, 2014 compared to $7.2 billion at September 30, 2014 and $6.7 billion at December 31, 2013.

Consumer finance receivables 31-to-60 days delinquent were 4.2% of the portfolio at December 31, 2014, compared to 4.1% at December 31, 2013. Accounts more than 60 days delinquent were 1.7% of the portfolio at December 31, 2014 and 2013.

Annualized net credit losses were 2.2% of average consumer finance receivables for the quarter ended December 31, 2014 compared to 2.1% a year ago. For the year ended December 31, 2014 and 2013, annualized consumer net credit losses were 1.9%.

The Company had total available liquidity of $9.3 billion at December 31, 2014, consisting of $3.0 billion of unrestricted cash, $4.8 billion of borrowing capacity on unpledged eligible assets, $0.5 billion of borrowing capacity on unsecured lines of credit and $1.0 billion of borrowing capacity on a Junior Subordinated Revolving Credit Facility from GM.

The Company acquired Ally Financial’s auto finance and financial services operations in Austria, Belgium, Chile, Colombia, Germany, Greece, Italy, Mexico, the Netherlands, Spain, Sweden, Switzerland, and the United Kingdom on April 1, 2013 and acquired Ally Financial’s auto finance and financial services operations in France and Portugal on June 1, 2013. The Company also acquired Ally Financial’s auto finance and financial services operations in Brazil on October 1, 2013. The results of operations of the acquired entities are included since their respective acquisition dates.

A 35% equity interest in SAIC-GMAC Automotive Finance Company Limited, a joint venture that conducts auto finance operations in China, was acquired on January 2, 2015.

About GM Financial

General Motors Financial Company, Inc. is the captive finance company for and a wholly-owned subsidiary of General Motors Company and is headquartered in Fort Worth, Texas. For more information, visit www.gmfinancial.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 which 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. 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, 2014. Such risks include – but are not limited to – changes in general economic and business conditions; GM’s ability to sell new vehicles that we finance in the markets we serve in North America, Europe, Latin America and China; interest rate and currency 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; vehicle return rates and the residual value performance on vehicles we lease; the viability of GM-franchised dealers that are commercial loan customers; the prices at which used cars are sold in the wholesale markets; and changes in business strategy, including expansion of product lines and credit risk appetite, and acquisitions. If one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect, actual events or results may differ materially. 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

(Dollars in Millions)

 

     Three Months Ended      Year Ended  
     December 31,      December 31,  
     2014      2013      2014      2013  

Revenue

            

Finance charge income

    $ 880       $ 854       $ 3,475       $ 2,563   

Leased vehicle income

      355         180         1,090         595   

Other income

      70         67         289         186   
  

 

 

     

 

 

     

 

 

     

 

 

  
     1,305         1,101         4,854         3,344   
  

 

 

     

 

 

     

 

 

     

 

 

  

Costs and expenses

            

Operating expenses

      316         268         1,162         770   

Leased vehicle expenses

      284         139         847         453   

Provision for loan losses

      196         164         604         475   

Interest expense

      389         307         1,426         721   

Acquisition and integration expenses

      —           13         —           42   
  

 

 

     

 

 

     

 

 

     

 

 

  
     1,185         891         4,039         2,461   
  

 

 

     

 

 

     

 

 

     

 

 

  

Income before income taxes

      120         210         815         883   

Income tax provision

      61         89         278         317   
  

 

 

     

 

 

     

 

 

     

 

 

  

Net income

    $ 59       $ 121       $ 537       $ 566   
  

 

 

     

 

 

     

 

 

     

 

 

  

 

4

Consolidated Balance Sheets

(Dollars in Millions)

 

     December 31, 2014      December 31, 2013  

Assets

      

Cash and cash equivalents

    $ 2,974       $ 1,074   

Finance receivables, net

      33,000         29,282   

Leased vehicles, net

      7,060         3,383   

Restricted cash

      2,071         1,958   

Goodwill

      1,244         1,240   

Property and equipment, net

      172         132   

Deferred income taxes

      341         359   

Related party receivables

      384         129   

Other assets

      478         433   
  

 

 

     

 

 

  

Total assets

    $ 47,724       $ 37,990   
  

 

 

     

 

 

  

Liabilities and Shareholder’s Equity

      

Liabilities

      

Secured debt

    $ 25,214       $ 22,073   

Unsecured debt

      12,217         6,973   

Accounts payable and accrued expenses

      1,002         946   

Deferred income

      392         168   

Deferred income taxes

      20         87   

Taxes payable

      234         287   

Related party taxes payable

      636         643   

Related party payables

      433         368   

Other liabilities

      184         160   
  

 

 

     

 

 

  

Total liabilities

      40,332         31,705   
  

 

 

     

 

 

  

Shareholder’s equity

      7,392         6,285   
  

 

 

     

 

 

  

Total liabilities and shareholder’s equity

    $ 47,724       $ 37,990   
  

 

 

     

 

 

  

 

5

Operational and Financial Data

(Unaudited, Dollars in Millions)

 

     Three Months Ended  
     December,  
     2014     2013  
     North
America		     International     Total     North
America		     International     Total  

Consumer finance receivables originations

    $ 1,934      $ 2,022      $ 3,956      $ 1,146      $ 2,121      $ 3,267   

GM lease originations

    $ 2,068      $ 24      $ 2,092      $ 650      $ —        $ 650   

GM new vehicle loans and leases as a percent of total loan and lease originations

      69.3 %      86.6 %      75.2 %      53.6 %      89.7 %      73.1 % 
     Year Ended  
     December 31,  
     2014     2013  
     North
America		     International     Total     North
America		     International     Total  

Consumer finance receivables originations

    $ 6,808      $ 8,277      $ 15,085      $ 5,126      $ 4,471      $ 9,597   

GM lease originations

    $ 6,132      $ 37      $ 6,169      $ 2,830      $ —        $ 2,830   

GM new vehicle loans and leases as a percent of total loan and lease originations

      64.8 %      87.3 %      73.6 %      55.0 %      87.4 %      66.7 % 
     Three Months Ended  
     December 31,  
     2014     2013  
     North
America		     International     Total     North
America		     International     Total  

Average consumer finance receivables

    $ 13,038      $ 12,515      $ 25,553      $ 11,496      $ 11,432      $ 22,928   

Average commercial finance receivables

      2,789        4,663        7,452        1,630        4,704        6,334   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Average finance receivables

      15,827        17,178        33,005        13,126        16,136        29,262   

Average leased vehicles, net

      6,385        21        6,406        3,237        2        3,239   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Average earning assets

    $ 22,212      $ 17,199      $ 39,411      $ 16,363      $ 16,138      $ 32,501   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

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     Year Ended  
     December 31,  
     2014     2013  
     North
America		     International     Total     North
America		     International     Total  

Average consumer finance receivables

    $ 12,205      $ 12,568      $ 24,773      $ 11,335      $ 6,459      $ 17,794   

Average commercial finance receivables

      2,384        4,653        7,037        1,164        2,997        4,161   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Average finance receivables

      14,589        17,221        31,810        12,499        9,456        21,955   

Average leased vehicles, net

      4,867        7        4,874        2,599        3        2,602   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Average earning assets

    $ 19,456      $ 17,228      $ 36,684      $ 15,098      $ 9,459      $ 24,557   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
     December 31, 2014     December 31, 2013  
     North
America		     International     Total     North
America		     International     Total  

Consumer finance receivables

    $ 13,409      $ 12,263      $ 25,672      $ 11,493      $ 11,757      $ 23,250   

Commercial finance receivables

      3,180        4,892        8,072        1,975        4,725        6,700   

Leased vehicles

      7,029        31        7,060        3,381        2        3,383   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Ending Earning Assets

    $ 23,618      $ 17,186      $ 40,804      $ 16,849      $ 16,484      $ 33,333   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
     December 31, 2014     December 31, 2013  
     North
America		     International     Total     North
America		     International     Total  

Consumer

             

Pre-acquisition consumer finance receivables - outstanding balance

    $ 361      $ 147      $ 508      $ 931      $ 363      $ 1,294   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Pre-acquisition consumer finance receivables - carrying value

    $ 313      $ 146      $ 459      $ 826      $ 348      $ 1,174   

Post-acquisition consumer finance receivables, net of fees

      13,048        12,116        25,164        10,562        11,394        21,956   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
     13,361        12,262        25,623        11,388        11,742        23,130   

Less: allowance for loan losses

      (577 )      (78 )      (655 )      (468 )      (29 )      (497 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total consumer finance receivables, net

      12,784        12,184        24,968        10,920        11,713        22,633   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Commercial

             

Commercial finance receivables, net of fees

      3,180        4,892        8,072        1,975        4,725        6,700   

Less: allowance for loan losses

      (21 )      (19 )      (40 )      (17 )      (34 )      (51 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total commercial finance receivables, net

      3,159        4,873        8,032        1,958        4,691        6,649   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total finance receivables, net

    $ 15,943      $ 17,057      $ 33,000      $ 12,878      $ 16,404      $ 29,282   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

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     December 31, 2014     December 31, 2013  
     North
America		     International     Total     North
America		     International     Total  

Allowance for loan losses as a percentage of post-acquisition consumer finance receivables

      4.4 %      0.6 %      2.6 %      4.4 %      0.3 %      2.3 % 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Allowance for loan losses as a percentage of commercial finance receivables

      0.7 %      0.4 %      0.5 %      0.9 %      0.7 %      0.8 % 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
     December 31, 2014     December 31, 2013  
     North
America		     International     Total     North
America		     International     Total  

Loan delinquency as a percent of ending consumer finance receivables:

             

31 - 60 days

      7.4 %      0.7 %      4.2 %      7.5 %      0.8 %      4.1 % 

Greater than 60 days

      2.5        0.8        1.7        2.5        1.0        1.7   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

      9.9 %      1.5 %      5.9 %      10.0 %      1.8 %      5.8 % 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

We analyze portfolio performance of both the pre- and post-acquisition finance receivables portfolios on a combined basis. This information allows us and investors the ability to analyze credit loss trends in the combined portfolio. Additionally, information on credit losses, on a combined basis, 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
December 31,		  
     2014      2013  
     North
America(a)		      International     Total      North
America(a)		      International      Total  

Charge-offs

    $ 233       $ 36      $ 269       $ 183       $ 36       $ 219   

Adjustments to reflect write-offs of the contractual amounts on the pre-acquisition portfolio

      11         (1 )      10         31         4         35   
  

 

 

     

 

 

    

 

 

     

 

 

     

 

 

     

 

 

  

Total credit losses

    $ 244       $ 35      $ 279       $ 214       $ 40       $ 254   
  

 

 

     

 

 

    

 

 

     

 

 

     

 

 

     

 

 

  
     Year Ended
December 31,		  
     2014      2013  
     North
America(a)		      International     Total      North
America(a)		      International      Total  

Charge-offs

    $ 776       $ 138      $ 914       $ 584       $ 54       $ 638   

Adjustments to reflect write-offs of the contractual amounts on the pre-acquisition portfolio

      63         6        69         154         13         167   
  

 

 

     

 

 

    

 

 

     

 

 

     

 

 

     

 

 

  

Total credit losses

    $ 839       $ 144      $ 983       $ 738       $ 67       $ 805   
  

 

 

     

 

 

    

 

 

     

 

 

     

 

 

     

 

 

  

 

(a) Total credit losses in the North America Segment is comprised of the sum of repossession credit losses and mandatory credit losses.

 

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The following table presents credit loss data (which includes charge-offs on the post-acquisition portfolio and write-offs of contractual amounts on the pre-acquisition portfolio) with respect to our consumer finance receivables portfolio (dollars in millions):

 

     Three Months Ended
December 31,		  
     2014     2013  
     North
America		     International(a)     Total     North
America		     International(a)     Total  

Repossession credit losses

    $ 237      $ 35      $ 272      $ 201      $ 40      $ 241   

Less: recoveries

      (126 )      (11 )      (137 )      (114 )      (18 )      (132 ) 

Mandatory credit losses(b)

      7        —          7        13        —          13   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net credit losses

    $ 118      $ 24      $ 142      $ 100      $ 22      $ 122   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net annualized credit losses as a percentage of average consumer finance receivables(c):

      3.6 %      0.8 %      2.2 %      3.5 %      0.8 %      2.1 % 

Recoveries as a percentage of gross repossession credit losses:

      53.1 %          56.7 %     
     Year Ended
December 31,		  
     2014     2013  
     North
America		     International(a)     Total     North
America		     International(a)     Total  

Repossession credit losses

    $ 812      $ 144      $ 956      $ 720      $ 67      $ 787   

Less: recoveries

      (465 )      (56 )      (521 )      (427 )      (35 )      (462 ) 

Mandatory credit losses(b)

      27        —          27        18        —          18   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net credit losses

    $ 374      $ 88      $ 462      $ 311      $ 32      $ 343   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net annualized credit losses as a percentage of average consumer finance receivables(c):

      3.1 %      0.7 %      1.9 %      2.7  %      0.5 %      1.9 % 

Recoveries as a percentage of gross repossession credit losses:

      57.3 %          59.3 %     

 

(a) Repossession credit losses for the International Segment include the write-down of defaulted receivables to net realizable value.
(b) Mandatory credit losses represent accounts 120 days delinquent in the post-acquisition portfolio that are charged off in full, with no recovery amounts realized at time of charge-off, net of any subsequent recoveries as well as the net write-down of consumer finance receivables in repossession to the net realizable value of the repossessed vehicle when the repossessed vehicle is legally available for sale.
(c) Average consumer finance receivables is defined as the average receivable balance excluding the carrying value adjustment.

 

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     Three Months Ended
December 31,		  
     2014     2013  
     North
America		     International     Total     North
America		     International     Total  

Annualized operating expenses as a percent of average earning assets(a)

      2.7 %      3.8 %      3.2 %      2.8 %      3.8 %      3.3 % 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
     Year Ended
December 31,		  
     2014     2013  
     North
America		     International     Total     North
America		     International     Total  

Annualized operating expenses as a percent of average earning assets(a)

      2.8 %      3.6 %      3.2 %      2.9 %      3.5 %      3.1 % 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

(a) Excluding lease and acquisition and integration expenses.

Investor Relations contact:

Stephen Jones

(817) 302-7119

 

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General Motors Financial Company, Inc. Reports