General Motors Financial Company, Inc. - FORM 8-K - EX-99.1 - PRESS RELEASE DATED FEBRUARY 16, 2012

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8-K - FORM 8-K - General Motors Financial Company, Inc.	d301086d8k.htm

Exhibit 99.1

GM FINANCIAL REPORTS DECEMBER QUARTER OPERATING RESULTS

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Earnings of $104 million

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Loan and lease originations of $1.6 billion

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Available liquidity of $1.6 billion

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Annualized net credit losses of 3.3%

FORT WORTH, TEXAS February 16, 2012 – GENERAL MOTORS FINANCIAL COMPANY, INC. (“GM Financial” or the “Company”) announced net income of $104 million for the quarter ended December 31, 2011, and $386 million for the year ended December 31, 2011.

Loan originations were $1.2 billion for the quarter ended December 31, 2011, compared to $1.4 billion for the quarter ended September 30, 2011, and $935 million for the quarter ended December 31, 2010. Loan originations for the year ended December 31, 2011, were $5.1 billion, compared to $3.4 billion for the year ended December 31, 2010. The outstanding balance on finance receivables totaled $9.7 billion at December 31, 2011.

Lease originations of General Motors Company (“GM”) vehicles were $314 million for the quarter ended December 31, 2011, compared to $189 million for the quarter ended September 30, 2011 and $11 million for the quarter ended December 31, 2010. Lease originations of GM vehicles totaled $987 million for the year ended December 31, 2011. Leased vehicles, net, totaled $809 million at December 31, 2011.

Finance receivables 31-to-60 days delinquent were 5.3% of the portfolio at December 31, 2011, compared to 6.2% at December 31, 2010. Accounts more than 60 days delinquent were 1.9% of the portfolio at December 31, 2011, compared to 2.4% a year ago.

Annualized net charge-offs were 3.3% of average finance receivables for the quarter ended December 31, 2011, compared to 5.5% for the quarter ended December 31, 2010. For the year ended December 31, 2011, net charge-offs were 3.2%.

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The Company had total available liquidity of $1.6 billion at December 31, 2011, consisting of $572 million of unrestricted cash, approximately $681 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 3,500 employees, 700,000 customers and $11 billion in auto receivables and leased vehicles. The Company is a wholly-owned subsidiary of General Motors Company and is headquartered in Fort Worth, Texas. For more information, visit www.gmfinancial.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, unpredictable leased vehicle residual values and return rates, GM’s ability to sell new vehicles in the U.S. and Canada that we finance, 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 December 31, 2011, and December 31, 2010, and the year ended December 31, 2011, reflect the change in basis from the application of purchase accounting.

General Motors Financial Company, Inc.

Consolidated Statements of Income

(Unaudited, Dollars in Thousands)


	Three Months Ended		Three Months Ended		Year Ended
	December 31,		December 31,		December 31,
	2011		2010		2011
Revenue
Finance charge income	$	339,640	$	264,347	$	1,246,687
Other income		54,615		16,824		163,301

		394,255		281,171		1,409,988

Costs and expenses
Operating expenses		88,620		70,441		338,540
Leased vehicles expenses		27,642		2,106		67,088
Provision for loan losses		43,437		26,352		178,372
Interest expense		64,441		36,684		204,170
Acquisition expenses				16,322

		224,140		151,905		788,170

Income before income taxes		170,115		129,266		621,818
Income tax provision		66,451		54,633		236,291

Net income	$	103,664	$	74,633	$	385,527

Consolidated Balance Sheets

(Unaudited, Dollars in Thousands)


	December 31, 2011		December 31, 2010
Assets
Cash and cash equivalents	$	572,297	$	194,554
Finance receivables, net		9,162,492		8,197,324
Restricted cash – securitization notes payable		919,283		926,082
Restricted cash – credit facilities		136,556		131,438
Property and equipment, net		47,440		47,290
Leased vehicles, net		809,491		46,780
Deferred income taxes		108,684		157,884
Goodwill		1,107,982		1,094,923
Other assets		178,695		122,463

Total assets	$	13,042,920	$	10,918,738

Liabilities and Shareholder’s Equity
Liabilities
Credit facilities	$	1,099,391	$	831,802
Securitization notes payable		6,937,841		6,128,217
Senior notes		500,000		70,054
Convertible senior notes		500		1,446
Accounts payable and accrued expenses		185,159		97,169
Taxes payable		85,477		160,712
Intercompany taxes payable		300,306		42,214
Interest rate swap and cap agreements		11,208		57,016

Total liabilities		9,119,882		7,388,630


Shareholder’s equity		3,923,038		3,530,108

Total liabilities and shareholder’s equity	$	13,042,920	$	10,918,738

Consolidated Statements of Cash Flows

(Unaudited, Dollars in Thousands)


	Three Months Ended December 31, 2011			Three Months Ended December 31, 2010			Year Ended December 31, 2011
Cash flows from operating activities:
Net income	$	103,664		$	74,633		$	385,527
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		37,222			7,809			109,619
Amortization of purchase accounting premium		(9,973	)		(27,458	)		(67,671	)
Amortization of carrying value adjustment		33,791			77,092			177,566
Accretion and amortization of loan and leasing fees		(5,792	)		1,111			(20,702	)
Provision for loan losses		43,437			26,352			178,372
Deferred income taxes		9,077			21,367			50,236
Stock-based compensation expense		7,521						17,106
Other		(70	)		(11,539	)		(23,218	)
Changes in assets and liabilities, net of assets and liabilities acquired:
Other assets		6,906			(369	)		34,649
Accrued expenses		(20,899	)		(10,275	)		(21,399	)
Taxes payable		2,233			(9,448	)		(77,285	)
Intercompany taxes payable		54,937			42,214			258,092

Net cash provided by operating activities		262,054			191,489			1,000,892

Cash flows from investing activities:
Purchases of receivables		(1,226,943	)		(947,318	)		(5,020,639	)
Principal collections and recoveries on receivables		902,657			870,862			3,719,264
Net purchases of leased vehicles		(272,412	)		(10,655	)		(857,138	)
Proceeds from termination of leased vehicles		6,037						38,054
Net change in restricted cash and other		7,564			63,697			(19,588	)

Net cash used in investing activities		(583,097	)		(23,414	)		(2,140,047	)

Cash flows from financing activities:
Net change in credit facilities		544,575			212,032			270,535
Net change in securitization notes payable		46,014			(254,644	)		874,541
Issuance of senior notes								500,000
Other net changes		(4,878	)		(468,568	)		(125,010	)

Net cash provided (used) by financing activities		585,711			(511,180	)		1,520,066

Net increase (decrease) in cash and cash equivalents		264,668			(343,105	)		380,911
Effect of Canadian exchange rate changes on cash and cash equivalents		414			130			(3,168	)
Cash and cash equivalents at beginning of period		307,215			537,529			194,554

Cash and cash equivalents at end of period	$	572,297		$	194,554		$	572,297

Other Financial Data

(Unaudited, Dollars in Thousands)


	Three Months Ended			Three Months Ended			Year Ended
	December 31,			December 31,			December 31,
	2011			2010			2011
Loan origination volume	$	1,239,542		$	934,812		$	5,084,800
GM lease origination volume		314,343			10,655			986,760
GM new vehicle loans as a percent of total loan originations		30.2	%		18.1	%		28.5	%
GM new vehicle loans and leases as a percent of total loan and lease originations		44.3	%		19.0	%		40.1	%
Loans securitized	$	954,917		$	742,708		$	4,827,620


	Three Months Ended		Three Months Ended		Year Ended
	December 31,		December 31,		December 31,
	2011		2010		2011
Average finance receivables	$	9,569,608	$	8,679,506	$	9,112,464
Average leased vehicles, net		686,797		50,144		428,136

Average earning assets	$	10,256,405	$	8,729,650	$	9,540,600


	December 31,			December 31,
	2011			2010
Finance receivables:
Pre-acquisition finance receivables - outstanding balance	$	4,366,075		$	7,724,188
Less: Carrying value adjustment		(338,714	)		(424,225	)

Pre-acquisition finance receivables - carrying value		4,027,361			7,299,963
Post-acquisition finance receivables, net of fees		5,313,899			923,713

		9,341,260			8,223,676
Less: Allowance for loan losses on post-acquisition finance receivables		(178,768	)		(26,352	)

Total finance receivables, net	$	9,162,492		$	8,197,324

Allowance for loan losses as a percent of post-acquisition finance receivables		3.4	%		2.9	%


	December 31,			December 31,
	2011			2010
Loan delinquency as a percent of ending finance receivables:
31- 60 days		5.3	%		6.2	%
Greater than 60 days		1.9			2.4

Total		7.2	%		8.6	%

The Company analyzes portfolio performance of both the pre-acquisition and post-acquisition finance receivable portfolios on a combined basis. This information allows for the ability to analyze credit loss trends of the combined portfolio and also 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, 2011			Three Months Ended December 31, 2010			Year Ended December 31, 2011
Charge-offs	$	37,428					$	66,080
Adjustments to reflect write-offs of the contractual amounts on the pre-acquisition portfolio		130,433		$	221,046			568,558

Total credit losses on the combined portfolio	$	167,861		$	221,046		$	634,638


Total credit losses on the combined portfolio	$	167,861		$	221,046		$	634,638
Less: Recoveries		(87,881	)		(100,904	)		(345,605	)

Net credit losses on the combined portfolio	$	79,980		$	120,142		$	289,033

Annualized net credit losses as a percent of average finance receivables		3.3	%		5.5	%		3.2	%
Recoveries as a percent of gross repossession credit losses		54.1	%		45.9	%		54.1	%


	Three Months Ended December 31, 2011			Three Months Ended December 31, 2010			Year Ended December 31, 2011
Contracts receiving a payment deferral as an average quarterly percent of average finance receivables		5.7	%		6.2	%		5.3	%

Operating expenses	$	88,620		$	70,441		$	338,540

Annualized operating expenses as a percent of average earning assets		3.4	%		3.2	%		3.5	%

Contact:

Caitlin DeYoung

(817) 302-7394

General Motors Financial Company, Inc. - FORM 8-K - EX-99.1 - PRESS RELEASE DATED FEBRUARY 16, 2012 - February 16, 2012

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General Motors Financial Company, Inc. Reports