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

GM FINANCIAL REPORTS JUNE QUARTER OPERATING RESULTS

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Earnings of $96 million

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Loan originations of $1.3 billion

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GM lease originations of $173 million

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Annualized net credit losses of 2.4%

FORT WORTH, TEXAS August 4, 2011 – GENERAL MOTORS FINANCIAL COMPANY, INC. (“GM Financial” or the “Company”), announced net income of $96 million for the quarter ended June 30, 2011, and $173 million for the six months ended June 30, 2011.

Loan originations were $1.3 billion for the quarter ended June 30, 2011, compared to $1.1 billion for the quarter ended March 31, 2011 and $906 million for the quarter ended June 30, 2010. Lease originations of General Motors Company (“GM”) vehicles were $173 million for the quarter ended June 30, 2011, compared to $311 million for the quarter ended March 31, 2011. Loan and lease financing for new GM vehicles accounted for 38.0% of total loan and lease originations for the quarter ended June 30, 2011, compared to 38.8% for the quarter ended March 31, 2011. Originations for the six months ended June 30, 2011 were $2.5 billion, compared to $1.5 billion for the six months ended June 30, 2010. Finance receivables totaled $9.1 billion at June 30, 2011.

Finance receivables 31-to-60 days delinquent were 4.4% of the portfolio at June 30, 2011, compared to 6.2% at June 30, 2010. Accounts more than 60 days delinquent were 1.7% of the portfolio at June 30, 2011, compared to 2.7% a year ago.

Annualized net charge-offs were 2.4% of average finance receivables for the quarter ended June 30, 2011, compared to 4.5% for the quarter ended June 30, 2010. For the six months ended June 30, 2011, annualized net charge-offs were 3.2%, compared to 6.1% last year.

The Company had total available liquidity of $1.5 billion at June 30, 2011, consisting of $526 million of unrestricted cash, approximately $675 million of borrowing capacity on unpledged eligible assets and $300 million on a line of credit from GM.

-MORE-

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 3,300 employees, 700,000 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.

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/T 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 and six months ended June 30, 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 June 30, 2011		Six Months Ended June 30, 2011		Three Months Ended June 30, 2010		Six Months Ended June 30, 2010
Revenue
Finance charge income	$	290,916	$	558,762	$	338,531	$	678,423
Other income		38,969		66,290		23,142		44,355

		329,885		625,052		361,673		722,778

Costs and expenses
Operating expenses		85,379		161,785		68,304		143,519
Leased vehicles expenses		13,098		21,582		5,620		14,308
Provision for loan losses		44,570		83,994		49,326		123,909
Interest expense		42,817		83,434		98,730		205,314
Restructuring charges, net						534		754

		185,864		350,795		222,514		487,804

Income before income taxes		144,021		274,257		139,159		234,974
Income tax provision		48,203		101,201		53,609		86,218

Net income	$	95,818	$	173,056	$	85,550	$	148,756

Consolidated Balance Sheets

(Unaudited, Dollars in Thousands)


	Successor				Predecessor
	June 30, 2011		December 31, 2010		June 30, 2010
Assets
Cash and cash equivalents	$	525,728	$	194,554	$	282,273
Finance receivables, net		8,587,015		8,197,324		8,160,208
Restricted cash – securitization notes payable		937,162		926,082		930,155
Restricted cash – credit facilities		109,386		131,438		142,725
Property and equipment, net		46,810		47,290		37,734
Leased vehicles, net		439,430		46,780		94,677
Deferred income taxes		119,975		157,884		81,836
Goodwill		1,108,696		1,094,923
Other assets		210,971		122,463		151,425

Total assets	$	12,085,173	$	10,918,738	$	9,881,033


Liabilities and Shareholder’s Equity
Liabilities
Credit facilities	$	422,756	$	831,802	$	598,946
Securitization notes payable		6,880,681		6,128,217		6,108,976
Senior notes		569,870		70,054		70,620
Convertible senior notes		1,447		1,446		414,068
Accounts payable and accrued expenses		203,361		97,169		141,052
Taxes payable		75,203		160,712		68,961
Intercompany taxes payable		186,155		42,214
Interest rate swap agreements		23,720		46,797		70,421
Other liabilities		11,486		10,219		7,565

Total liabilities		8,374,679		7,388,630		7,480,609


Shareholder’s equity		3,710,494		3,530,108		2,400,424

Total liabilities and shareholder’s equity	$	12,085,173	$	10,918,738	$	9,881,033

Consolidated Statements of Cash Flows

(Unaudited, Dollars in Thousands)


	Successor						Predecessor
	Three Months Ended June 30, 2011			Six Months Ended June 30, 2011			Three Months Ended June 30, 2010			Six Months Ended June 30, 2010
Cash flows from operating activities:
Net income	$	95,818		$	173,056		$	85,550		$	148,756
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		23,176			41,044			17,047			35,398
Amortization of debt discount		(21,574	)		(44,691	)
Amortization of finance receivables premium		58,995			126,922
Accretion and amortization of loan and leasing fees		(4,978	)		(7,914	)		62			779
Provision for loan losses		44,570			83,994			49,326			123,909
Deferred income taxes		59,645			37,856			(350	)		(69,144	)
Stock-based compensation expense		3,128			6,053			3,605			8,209
Other		(8,336	)		(17,180	)		5,968			3,018
Changes in assets and liabilities:
Other assets		(10,384	)		1,137			(6,918	)		33,440
Accounts payable and accrued expenses		3,544			(9,221	)		(31,755	)		27,447
Taxes payable		(104,430	)		(87,313	)		9,605			11,906
Intercompany taxes payable		89,124			143,941
Sale of leases held for sale		24,907			24,907

Net cash provided by operating activities		253,205			472,591			132,140			323,718

Cash flows from investing activities:
Purchases of receivables		(1,318,304	)		(2,453,086	)		(894,301	)		(1,504,944	)
Principal collections and recoveries on receivables		925,885			1,880,176			873,516			1,826,064
Purchases of leased vehicles		(97,542	)		(417,748	)
Proceeds from termination of leased vehicles		8,181			21,061
Net change in restricted cash and other		87,535			(23,351	)		87,325			(57,572	)

Net cash (used) provided by investing activities		(394,245	)		(992,948	)		66,540			263,548

Cash flows from financing activities:
Net change in credit facilities		(988,493	)		(407,482	)		(59,191	)		(110,981	)
Net change in securitization notes payable		840,205			795,147			(354,370	)		(483,434	)
Issuance of senior notes		500,000			500,000
Other net changes		(16,926	)		(34,735	)		(511	)		(30,582	)

Net cash provided (used) by financing activities		334,786			852,930			(414,072	)		(624,997	)

Net increase (decrease) in cash and cash equivalents		193,746			332,573			(215,392	)		(37,731	)
Effect of Canadian exchange rate changes on cash and cash equivalents		(1,201	)		(1,399	)		336			360
Cash and cash equivalents at beginning of period		333,183			194,554			497,329			319,644

Cash and cash equivalents at end of period	$	525,728		$	525,728		$	282,273		$	282,273

Other Financial Data

(Unaudited, Dollars in Thousands)


	Three Months Ended June 30, 2011		Six Months Ended June 30, 2011		Three Months Ended June 30, 2010		Six Months Ended June 30, 2010
Loan origination volume	$	1,349,222	$	2,487,143	$	906,097	$	1,529,952
Loans securitized		2,068,978		2,917,788		640,004		1,567,762
Average finance receivables		8,926,612		8,797,154		8,794,764		8,918,215
GM lease origination volume		172,764		483,711
Average leased vehicles, net	$	377,928	$	243,105	$	105,857	$	113,001


	Successor						Predecessor
	June 30, 2011			December 31, 2010			June 30, 2010
Finance receivables:
Pre-acquisition finance receivables	$	5,886,828		$	7,724,188		$	8,733,518
Post-acquisition finance receivables		3,222,584			923,713

		9,109,412			8,647,901			8,733,518
Add purchase accounting premium		109,206			423,556
Less non-accretable discount on:
Pre-acquisition finance receivables		(524,077	)		(847,781	)
Less allowance for loan losses on:
Post-acquisition finance receivables		(107,526	)		(26,352	)
Pre-acquisition finance receivables								(573,310	)

	$	8,587,015		$	8,197,324		$	8,160,208


Non-accretable discount as a percentage of ending pre-acquisition finance receivables		8.9	%		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								6.6	%


	June 30, 2011			December 31, 2010			June 30, 2010
Loan delinquency as a percent of ending finance receivables:
31 - 60 days		4.4	%		6.2	%		6.2	%
Greater than 60 days		1.7			2.4			2.7

Total		6.1	%		8.6	%		8.9	%


	Three Months Ended June 30, 2011			Six Months Ended June 30, 2011			Three Months Ended June 30, 2010			Six Months Ended June 30, 2010
Contracts receiving a payment deferral as an average quarterly percentage of average finance receivables		4.9	%		5.1	%		5.8	%		6.4	%

Net charge-offs	$	54,260		$	139,096		$	99,265		$	267,658

Annualized net charge-offs as a percent of average finance receivables		2.4	%		3.2	%		4.5	%		6.1	%

Net recoveries as a percent of gross repossession charge-offs		56.4	%		53.6	%		48.6	%		46.4	%

Components of net margin:


	Successor						Predecessor
	Three Months Ended June 30, 2011			Six Months Ended June 30, 2011			Three Months Ended June 30, 2010			Six Months Ended June 30, 2010
Finance charge income	$	290,916		$	558,762		$	338,531		$	678,423
Other income		38,969			66,290			23,142			44,355
Interest expense		(42,817	)		(83,434	)		(98,730	)		(205,314	)

Net margin	$	287,068		$	541,618		$	262,943		$	517, 464

Annualized net margin as a percent of average finance receivables:


	Successor						Predecessor
	Three Months Ended June 30, 2011			Six Months Ended June 30, 2011			Three Months Ended June 30, 2010			Six Months Ended June 30, 2010
Finance charge income		13.1	%		12.8	%		15.4	%		15.3	%
Other income		1.7			1.5			1.1			1.0
Interest expense		(1.9	)		(1.9	)		(4.5	)		(4.6	)

Net margin		12.9	%		12.4	%		12.0	%		11.7	%


	Successor						Predecessor
	Three Months Ended June 30, 2011			Six Months Ended June 30, 2011			Three Months Ended June 30, 2010			Six Months Ended June 30, 2010
Operating expenses	$	85,379		$	161,785		$	68,304		$	143,519

Annualized operating expenses as a percent of average finance receivables		3.8	%		3.7	%		3.1	%		3.2	%

Contact:

Caitlin DeYoung

(817) 302-7394

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

Attached files

General Motors Financial Company, Inc. Reports