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GM Financial Reports Third Quarter 2021 Operating Results

·10 min read
  • Third quarter net income of $822 million

  • Retail loan and operating lease originations of $11.6 billion for the third quarter

  • Earning assets of $101.5 billion at September 30, 2021

  • Available liquidity of $29.5 billion at September 30, 2021

FORT WORTH, Texas, October 27, 2021--(BUSINESS WIRE)--GENERAL MOTORS FINANCIAL COMPANY, INC. ("GM Financial" or the "Company") announced net income of $822 million for the quarter ended September 30, 2021, compared to $1.2 billion for the quarter ended June 30, 2021, and $893 million for the quarter ended September 30, 2020. Net income for the nine months ended September 30, 2021 was $2.9 billion, compared to $1.2 billion for the nine months ended September 30, 2020.

Retail loan originations were $7.8 billion for the quarter ended September 30, 2021, compared to $9.1 billion for the quarter ended June 30, 2021, and $7.3 billion for the quarter ended September 30, 2020. Retail loan originations for the nine months ended September 30, 2021 were $25.2 billion, compared to $22.5 billion for the nine months ended September 30, 2020. The outstanding balance of retail finance receivables, net of fees was $57.4 billion at September 30, 2021, compared to $51.3 billion at December 31, 2020 and $48.7 billion at September 30, 2020.

Operating lease originations were $3.8 billion for the quarter ended September 30, 2021, compared to $5.9 billion for the quarter ended June 30, 2021, and $5.5 billion for the quarter ended September 30, 2020. Operating lease originations for the nine months ended September 30, 2021 were $15.5 billion, compared to $13.7 billion for the nine months ended September 30, 2020. Leased vehicles, net was $39.7 billion at September 30, 2021, compared to $39.8 billion at December 31, 2020, and $39.4 billion at September 30, 2020.

The outstanding balance of commercial finance receivables, net of fees was $4.4 billion at September 30, 2021, compared to $9.1 billion at December 31, 2020 and $8.5 billion at September 30, 2020.

Retail finance receivables 31-60 days delinquent were 1.7% of the portfolio at September 30, 2021 and 2.1% at September 30, 2020. Accounts more than 60 days delinquent were 0.5% of the portfolio at September 30, 2021 and 0.8% at September 30, 2020.

Annualized net charge-offs were 0.5% of average retail finance receivables for the quarter ended September 30, 2021 and 1.2% for the quarter ended September 30, 2020. For the nine months ended September 30, 2021, annualized net charge-offs were 0.6%, compared to 1.5% for the nine months ended September 30, 2020.

The Company had total available liquidity of $29.5 billion at September 30, 2021, consisting of $4.9 billion of cash and cash equivalents, $21.1 billion of borrowing capacity on unpledged eligible assets, $0.5 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 in joint ventures that conduct automotive finance operations in China were $53 million for the quarter ended September 30, 2021, compared to $50 million for the quarter ended June 30, 2021 and $46 million for the quarter ended September 30, 2020. Earnings for the nine months ended September 30, 2021 were $157 million, compared to $113 million for the nine months ended September 30, 2020.

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 quarter ended September 30, 2021. This recording, along with the presentation slides and this release, will be posted to the Company’s website on October 27, 2021 by 11:00 a.m. central time. The recording and materials can be accessed via the Investor Relations section of the Company’s website at https://investor.gmfinancial.com.

Forward-Looking Statements

This release contains several "forward-looking statements." Forward-looking statements are those that use words such as "believe," "expect," "intend," "plan," "may," "likely," "should," "estimate," "continue," "future" or "anticipate" and other comparable expressions. These words indicate future events and trends. Forward-looking statements 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 by us. 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, 2020 and our subsequent quarterly reports on Form 10-Q. Such risks include - but are not limited to - the length and severity of the COVID-19 pandemic; GM's ability to sell new vehicles that we finance in the markets we serve; dealers' effectiveness in marketing our financial products to consumers; the viability of GM-franchised dealers that are commercial loan customers; the sufficiency, availability and cost of sources of financing, including credit facilities, securitization programs and secured and unsecured debt issuances; the adequacy of our underwriting criteria for loans and leases and the level of net charge-offs, delinquencies and prepayments on the loans and leases we purchase or originate; our ability to effectively manage capital or liquidity consistent with evolving business or operational needs, risk management standards and regulatory or supervisory requirements; the adequacy of our allowance for loan losses on our finance receivables; our ability to maintain and expand our market share due to competition in the automotive finance industry from a large number of banks, credit unions, independent finance companies and other captive automotive finance subsidiaries; changes in the automotive industry that result in a change in demand for vehicles and related vehicle financing; the effect, interpretation or application of new or existing laws, regulations, court decisions and accounting pronouncements; adverse determinations with respect to the application of existing laws, or the results of any audits from tax authorities, as well as changes in tax laws and regulations, supervision, enforcement and licensing across various jurisdictions; the prices at which used vehicles are sold in the wholesale auction markets; vehicle return rates, our ability to estimate residual value at lease inception and the residual value performance on vehicles we lease; interest rate fluctuations and certain related derivatives exposure; our joint ventures in China, which we cannot operate solely for our benefit and over which we have limited control; changes in the determination of LIBOR and other benchmark rates; our ability to secure private customer and employee data or our proprietary information, manage risks related to security breaches and other disruptions to our networks and systems and comply with enterprise data regulations in all key market regions; foreign currency exchange rate fluctuations and other risks applicable to our operations outside of the U.S.; and changes in local, regional, national or international economic, social or political conditions. If one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect, our actual results may vary materially from those expected, estimated or projected. 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 law, whether as a result of new information, future events or otherwise.

General Motors Financial Company, Inc.
Condensed Consolidated Statements of Income
(Unaudited, in millions)

Three Months Ended September
30,

Nine Months Ended September
30,

2021

2020

2021

2020

Revenue

Finance charge income

$

1,035

$

999

$

3,087

$

2,971

Leased vehicle income

2,246

2,354

6,871

7,203

Other income

73

68

229

231

Total revenue

3,354

3,421

10,187

10,405

Costs and expenses

Operating expenses

381

394

1,170

1,097

Leased vehicle expenses

1,088

1,126

3,157

4,602

Provision for loan losses

141

31

174

824

Interest expense

704

709

1,987

2,332

Total costs and expenses

2,314

2,260

6,488

8,855

Equity income

53

46

157

113

Income before income taxes

1,093

1,207

3,856

1,663

Income tax provision

271

314

976

430

Net income

822

893

2,880

1,233

Less: cumulative dividends on preferred stock

30

24

89

69

Net income attributable to common shareholder

$

792

$

869

$

2,791

$

1,164

Condensed Consolidated Balance Sheets
(Unaudited, in millions)

September 30, 2021

December 31, 2020

ASSETS

Cash and cash equivalents

$

4,865

$

5,063

Finance receivables, net

59,922

58,390

Leased vehicles, net

39,657

39,819

Goodwill

1,170

1,173

Equity in net assets of non-consolidated affiliates

1,649

1,581

Related party receivables

331

643

Other assets

6,612

7,156

Total assets

$

114,206

$

113,825

LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities

Secured debt

$

38,041

$

39,982

Unsecured debt

54,064

52,443

Deferred income

2,754

3,048

Related party payables

470

269

Other liabilities

4,277

4,485

Total liabilities

99,606

100,227

Total shareholders' equity

14,600

13,598

Total liabilities and shareholders' equity

$

114,206

$

113,825

Operational and Financial Data
(Unaudited, Dollars in millions)

Three Months Ended September
30,

Nine Months Ended September
30,

Originations

2021

2020

2021

2020

Retail finance receivables originations

$

7,800

$

7,301

$

25,163

$

22,491

Lease originations

$

3,849

$

5,532

$

15,482

$

13,737

Three Months Ended September
30,

Nine Months Ended September
30,

Average Earning Assets

2021

2020

2021

2020

Average retail finance receivables

$

57,216

$

47,818

$

54,962

$

45,016

Average commercial finance receivables

4,994

8,046

6,436

9,897

Average finance receivables

62,210

55,864

61,398

54,913

Average leased vehicles, net

40,255

39,504

40,266

40,562

Average earning assets

$

102,465

$

95,368

$

101,664

$

95,475

Ending Earning Assets

September 30, 2021

December 31, 2020

Retail finance receivables, net of fees

$

57,424

$

51,288

Commercial finance receivables, net of fees

4,401

9,080

Leased vehicles, net

39,657

39,819

Ending earning assets

$

101,482

$

100,187

Finance Receivables

September 30, 2021

December 31, 2020

Retail

Retail finance receivables, net of fees

$

57,424

$

51,288

Less: allowance for loan losses

(1,863)

(1,915)

Total retail finance receivables, net

55,561

49,373

Commercial

Commercial finance receivables, net of fees

4,401

9,080

Less: allowance for loan losses

(40)

(63)

Total commercial finance receivables, net

4,361

9,017

Total finance receivables, net

$

59,922

$

58,390

Allowance for Loan Losses

September 30, 2021

December 31, 2020

Allowance for loan losses as a percentage of retail finance receivables, net of fees

3.2

%

3.7

%

Allowance for loan losses as a percentage of commercial finance receivables, net of fees

0.9

%

0.7

%

Delinquencies

September 30, 2021

September 30, 2020

Loan delinquency as a percentage of ending retail finance receivables:

31 - 60 days

1.7

%

2.1

%

Greater than 60 days

0.5

0.8

Total

2.2

%

2.9

%

Three Months Ended September
30,

Nine Months Ended September
30,

Charge-offs and Recoveries

2021

2020

2021

2020

Charge-offs

$

207

$

280

$

664

$

876

Less: recoveries

(133)

(133)

(426)

(378)

Net charge-offs

$

74

$

147

$

238

$

498

Net charge-offs as an annualized percentage of average retail finance receivables

0.5

%

1.2

%

0.6

%

1.5

%

Three Months Ended September
30,

Nine Months Ended September
30,

Operating Expenses

2021

2020

2021

2020

Operating expenses as an annualized percentage of average earning assets

1.5

%

1.6

%

1.5

%

1.5

%

View source version on businesswire.com: https://www.businesswire.com/news/home/20211027005557/en/

Contacts

Stephen Jones
Vice President, Investor Relations
(817) 302-7119
Investors@gmfinancial.com

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