FORT WORTH, Texas--GENERAL MOTORS FINANCIAL COMPANY, INC. or the “Company”) announced income from continuing operations before income taxes of $416 million for the quarter ended December 31, 2018, compared to $498 million for the quarter ended September 30, 2018, and $301 million for the quarter ended December 31, 2017. Income from continuing operations before income taxes for the year ended December 31, 2018 was $1.9 billion, compared to $1.2 billion for the year ended December 31, 2017.
Retail loan originations were $8.4 billion for the quarter ended December 31, 2018, compared to $6.7 billion for the quarter ended September 30, 2018, and $4.4 billion for the quarter ended December 31, 2017. Retail loan originations for the year ended December 31, 2018 were $26.2 billion, compared to $19.9 billion for the year ended December 31, 2017. The outstanding balance of retail finance receivables, net of fees was $40.7 billion at December 31, 2018.
Operating lease originations were $5.2 billion for the quarter ended December 31, 2018, compared to $5.4 billion for the quarter ended September 30, 2018, and $5.8 billion for the quarter ended December 31, 2017. Operating lease originations for the year ended December 31, 2018 were $22.6 billion, compared to $25.4 billion for the year ended December 31, 2017. Leased vehicles, net was $43.6 billion at December 31, 2018.
The outstanding balance of commercial finance receivables, net of fees was $12.7 billion at December 31, 2018, compared to $11.1 billion at September 30, 2018 and $10.3 billion at December 31, 2017.
Retail finance receivables 31-60 days delinquent were 3.3% of the portfolio at December 31, 2018 and 4.1% at December 31, 2017. Accounts more than 60 days delinquent were 1.4% of the portfolio at December 31, 2018 and 1.7% at December 31, 2017.
Annualized net charge-offs were 1.8% of average retail finance receivables for the quarter ended December 31, 2018 and 2.2% for the quarter ended December 31, 2017. For the year ended December 31, 2018, net charge-offs were 1.8% of average retail finance receivables, compared to 2.0% for the year ended December 31, 2017.
The Company had total available liquidity of $26.2 billion at December 31, 2018, consisting of $4.9 billion of cash and cash equivalents, $18.0 billion of borrowing capacity on unpledged eligible assets, $0.3 billion of borrowing capacity on committed unsecured lines of credit, $1.0 billion of borrowing capacity on the Junior Subordinated Revolving Credit Facility from GM, and $2.0 billion of borrowing capacity on the GM Revolving 364-Day Credit Facility.
Earnings resulting from the Company's equity investment joint ventures that conduct automotive finance operations in China were $42 million for the quarter ended December 31, 2018 compared to $44 million for the quarter ended September 30, 2018, and $44 million for the quarter ended December 31, 2017. Earnings for the year ended December 31, 2018 were $183 million, compared to $173 million for the year ended December 31, 2017.
Discontinued Operations
On October 31, 2017, we completed the sale of certain of our European subsidiaries and branches (collectively, the "European Operations") to Banque PSA Finance S.A. and BNP Paribas Personal Finance S.A. The European Operations are presented as discontinued operations in our consolidated financial statements for the year and quarter ended December 31, 2017. Unless otherwise indicated, information in this release relates to our continuing operations.
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. In lieu of a conference call, management recorded remarks addressing the Company’s results of operations for the year and quarter ended December 31, 2018. This recording, along with the presentation slides and this release, will be posted to the Company’s website on February 6, 2019 at 11:00 a.m. central time. The recording and materials can be accessed via the Investor Relations section of the Company’s website at www.gmfinancial.com.
| General Motors Financial Company, Inc. | |||||||||||||||||||
| Consolidated Statements of Income | |||||||||||||||||||
| (in millions) | |||||||||||||||||||
|
Three Months Ended |
Years Ended December 31, | ||||||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||||||
| Revenue | |||||||||||||||||||
| Finance charge income | $ | 962 | $ | 855 | $ | 3,629 | $ | 3,256 | |||||||||||
| Leased vehicle income | 2,518 | 2,324 | 9,963 | 8,606 | |||||||||||||||
| Other income | 119 | 73 | 424 | 289 | |||||||||||||||
| Total revenue | 3,599 | 3,252 | 14,016 | 12,151 | |||||||||||||||
| Costs and expenses | |||||||||||||||||||
| Operating expenses | 406 | 381 | 1,522 | 1,390 | |||||||||||||||
| Leased vehicle expenses | 1,769 | 1,767 | 6,917 | 6,415 | |||||||||||||||
| Provision for loan losses | 198 | 184 | 642 | 757 | |||||||||||||||
| Interest expense | 852 | 663 | 3,225 | 2,566 | |||||||||||||||
| Total costs and expenses | 3,225 | 2,995 | 12,306 | 11,128 | |||||||||||||||
| Equity income | 42 | 44 | 183 | 173 | |||||||||||||||
| Income from continuing operations before income taxes | 416 | 301 | 1,893 | 1,196 | |||||||||||||||
| Income tax provision (benefit) | 98 | (149 | ) | 323 | 111 | ||||||||||||||
| Income from continuing operations | 318 | 450 | 1,570 | 1,085 | |||||||||||||||
| (Loss) income from discontinued operations, net of tax | — | (255 | ) | — | (424 | ) | |||||||||||||
| Net income | $ | 318 | $ | 195 | $ | 1,570 | $ | 661 | |||||||||||
| Net income attributable to common shareholder | $ | 296 | $ | 181 | $ | 1,504 | $ | 645 | |||||||||||
| Consolidated Balance Sheets | ||||||||
| (in millions) | ||||||||
| December 31, 2018 | December 31, 2017 | |||||||
| ASSETS | ||||||||
| Cash and cash equivalents | $ | 4,883 | $ | 4,265 | ||||
| Finance receivables, net | 52,512 | 42,172 | ||||||
| Leased vehicles, net | 43,559 | 42,882 | ||||||
| Goodwill | 1,186 | 1,197 | ||||||
| Equity in net assets of non-consolidated affiliates | 1,355 | 1,187 | ||||||
| Related party receivables | 729 | 309 | ||||||
| Other assets | 5,696 | 5,003 | ||||||
| Total assets | $ | 109,920 | $ | 97,015 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Liabilities | ||||||||
| Secured debt | $ | 42,835 | $ | 39,887 | ||||
| Unsecured debt | 48,153 | 40,830 | ||||||
| Deferred income | 3,605 | 3,221 | ||||||
| Related party payables | 63 | 92 | ||||||
| Other liabilities | 3,605 | 2,691 | ||||||
| Total liabilities | 98,261 | 86,721 | ||||||
| Total shareholders' equity | 11,659 | 10,294 | ||||||
| Total liabilities and shareholders' equity | $ | 109,920 | $ | 97,015 | ||||
|
Operational and Financial Data (Unaudited, Dollars in millions) |
|||||||||||||||||||||
|
Three Months Ended |
Years Ended December 31, | ||||||||||||||||||||
|
Originations |
2018 | 2017 | 2018 | 2017 | |||||||||||||||||
| Retail finance receivables originations | $ | 8,384 | $ | 4,374 | $ | 26,181 | $ | 19,920 | |||||||||||||
| GM lease originations | $ | 5,248 | $ | 5,840 | $ | 22,593 | $ | 25,421 | |||||||||||||
| GM new vehicle loans and leases as a percentage of total loan and lease originations | 91.4 | % | 90.0 | % | 90.5 | % | 88.9 | % | |||||||||||||
|
Three Months Ended |
Years Ended December 31, | ||||||||||||||||
|
Average Earning Assets |
2018 | 2017 | 2018 | 2017 | |||||||||||||
| Average retail finance receivables | $ | 39,244 | $ | 32,754 | $ | 36,167 | $ | 30,619 | |||||||||
| Average commercial finance receivables | 11,761 | 9,710 | 10,689 | 9,060 | |||||||||||||
| Average finance receivables | 51,005 | 42,464 | 46,856 | 39,679 | |||||||||||||
| Average leased vehicles, net | 43,873 | 42,322 | 43,710 | 39,255 | |||||||||||||
| Average earning assets | $ | 94,878 | $ | 84,786 | $ | 90,566 | $ | 78,934 | |||||||||
|
Ending Earning Assets |
December 31, 2018 | December 31, 2017 | ||||||
| Retail finance receivables, net of fees | $ | 40,702 | $ | 32,802 | ||||
| Commercial finance receivables, net of fees | 12,721 | 10,312 | ||||||
| Leased vehicles, net | 43,559 | 42,882 | ||||||
| Ending earning assets | $ | 96,982 | $ | 85,996 | ||||
|
Total Finance Receivables |
December 31, 2018 | December 31, 2017 | ||||||||
| Retail | ||||||||||
| Retail finance receivables, net of fees | $ | 40,702 | $ | 32,802 | ||||||
| Less: allowance for loan losses | (844 | ) | (889 | ) | ||||||
| Total retail finance receivables, net | 39,858 | 31,913 | ||||||||
| Commercial | ||||||||||
| Commercial finance receivables, net of fees | 12,721 | 10,312 | ||||||||
| Less: allowance for loan losses | (67 | ) | (53 | ) | ||||||
| Total commercial finance receivables, net | 12,654 | 10,259 | ||||||||
| Total finance receivables, net | $ | 52,512 | $ | 42,172 | ||||||
|
Allowance for Loan Losses |
December 31, 2018 | December 31, 2017 | ||||||
| Allowance for loan losses as a percentage of retail finance receivables, net of fees | 2.1 | % | 2.7 | % | ||||
| Allowance for loan losses as a percentage of commercial finance receivables, net of fees | 0.5 | % | 0.5 | % | ||||
|
Delinquencies |
December 31, 2018 | December 31, 2017 | ||||||
| Loan delinquency as a percentage of ending retail finance receivables: | ||||||||
| 31 - 60 days | 3.3 | % | 4.1 | % | ||||
| Greater than 60 days | 1.4 | 1.7 | ||||||
| Total | 4.7 | % | 5.8 | % | ||||
|
Three Months Ended |
Years Ended December 31, | ||||||||||||||||||||
|
Charge-offs and Recoveries |
2018 | 2017 | 2018 | 2017 | |||||||||||||||||
| Charge-offs | $ | 318 | $ | 315 | $ | 1,196 | $ | 1,171 | |||||||||||||
| Less: recoveries | (138 | ) | (132 | ) | (536 | ) | (552 | ) | |||||||||||||
| Net charge-offs | $ | 180 | $ | 183 | $ | 660 | $ | 619 | |||||||||||||
| Net charge-offs as an annualized percentage of average retail finance receivables | 1.8 | % | 2.2 | % | 1.8 | % | 2.0 | % | |||||||||||||
| Recovery rate as a percentage of gross repossession charge-offs in North America | 52.1 | % | 50.2 | % | 52.3 | % | 51.9 | % | |||||||||||||
|
Three Months Ended |
Years Ended December 31, | ||||||||||||||||
|
Operating Expenses |
2018 | 2017 | 2018 | 2017 | |||||||||||||
| Operating expenses as an annualized percentage of average earning assets | 1.7 | % | 1.8 | % | 1.7 | % | 1.8 | % | |||||||||
