1 st Quarter 2016 Earnings Presentation. April 21, 2016

Transcription

1 1 st Quarter 2016 Earnings Presentation April 21, 2016

2 Safe Harbor Statement This presentation contains several forward-looking statements. Forward-looking statements are those that use words such as believe, expect, anticipate, intend, plan, may, likely, should, estimate, continue, future or 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, 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 and cost 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. 2

3 1 st Quarter 2016 Highlights Operating results Earned $225M in pretax income in the quarter Continued expansion of captive presence with GM customers and dealers Grew penetration of GM retail sales in the U.S., increasing to 38% in the March 2016 quarter from 21% in the March 2015 quarter Captive evolution Increased North America prime loan originations ( 680 FICO) to $1.1B in the March 2016 quarter from $0.6B in the March 2015 quarter Expanded penetration of GM retail sales in both Europe and Latin America regions, compared to the March 2015 quarter Became the exclusive lender for GM subvented loans in the U.S. in January 2016 Funding platform expansion Issued $5.0B in public secured and unsecured debt securities in the U.S. in the quarter Increased retail bank deposits in Germany to $1.6B as of quarter end Continued diversification of funding platform by increasing unsecured debt funding to unencumber assets Unsecured debt is 46% of total debt at March 31, 2016, up from 44% at December 31,

4 Key Metrics ($M) March 2016 Quarter North America International Total Co. March 2015 Quarter North America International Total Co. 1 1 Earnings Before Tax $117 $109 $225 $136 $87 $214 Ending Earning Assets 47,655 16,384 64,039 26,491 15,687 42,178 Total Originations (Loan & Lease) 9,300 1,595 10,895 5,280 1,822 7,102 GM New as a % of Total Originations 89.1% 86.5% 88.7% 73.8% 85.6% 76.8% Annualized Net Credit Loss as a % of Avg. Retail Finance Receivables 2.5% 0.8% 1.9% 2.6% 0.8% 1.8% 1. Reflects net impact of intercompany allocations 4

5 North America GM and GMF Penetration Statistics (Quarterly) Mar-16 Dec-15 Mar-15 GMF as a % of GM Retail Sales U.S. 37.5% 33.4% 20.6% Canada 23.2% 13.1% 22.3% GMF Wholesale Dealer Penetration U.S. 13.7% 12.8% 9.9% Canada 13.1% 13.1% 11.2% GM as % of GMF Retail Originations (GM New / GMF Retail Loan & Lease) U.S. 88.8% 87.8% 72.5% Canada 99.6% 97.9% 98.8% 5

6 North America Origination Mix by Credit Tier Three Months Ended (Loan and Lease Originations, $M) 1 Mar-16 Mar-15 Amount Percent Amount Percent Prime FICO Score 680 and greater $6, % $2, % Near-prime FICO Score 620 to 679 1, Sub-prime FICO Score less than 620 1, , Total originations $9, % $5, % 1. For originations associated with the commercial vehicle program, FICO scores or equivalents are used in determining prime, near-prime and sub-prime classifications Origination mix shifting to higher credit tiers, driven by lease exclusivity and increase in prime loan penetration 6

7 North America Retail Loan Originations Originations ($B) $3.5 $3.0 $2.5 $2.0 $1.5 $1.0 $0.5 $0.0 $2.3 $0.9 $2.6 $1.3 $0.7 $0.6 $3.2 $2.0 $0.6 $2.9 $1.9 $2.6 $1.6 $0.5 $0.5 $0.7 $0.7 $0.6 $0.5 $0.5 Mar-15 Jun-15 Sept-15 Dec-15 Mar-16 GMF as % of GM New U.S. loans <620 33% 32% 32% 32% 38% Loans originated on new vehicles by GM dealers Loans originated on used vehicles by GM dealers Loans originated on vehicles by non-gm dealers GMF as % of GM New U.S. loans 620 6% 9% 14% 14% 10% Year-over-year total origination volume up due to growth in GM New prime originations (FICO 680) GMF as percent of GM New prime loans largely reflects GM's subvented loan support in market; competition for non-subvented loan originations remains significant Weighted average FICO score for originations for the quarter ended March 31, 2016 was ~45 points higher year-over-year 7

8 North America Retail Loan Credit Performance Credit Metrics 5.0% 8.0% Credit Losses 4.0% 3.0% 2.0% 1.0% 2.6% 2.3% 2.6% 3.0% 2.5% 6.0% 4.0% 2.0% Delinquency Annualized quarterly net credit losses day delinquency 61+ day delinquency 0.0% Mar-15 Jun-15 Sept-15 Dec-15 Mar % Recovery Rate 58% 59% 56% 53% 54% Credit metrics reflect normal seasonal pattern Finance receivables with FICO scores <620 still comprise 57% of the North America retail loan portfolio Growth in prime originations should favorably impact credit metrics over time Recovery rates expected to trend down moderately throughout

9 North America Lease Originations $24.4 $20.1 $16.8 $8.9 $12.8 $0.4 $0.3 $0.2 $0.2 Canada Lease Volume ($B) U.S. Lease Volume ($B) $0.2 $5.1 $5.9 $5.2 $6.5 Lease Portfolio ($B) $2.8 Mar-15 Jun-15 Sept-15 Dec-15 Mar-16 Growth in total originations and portfolio balance driven by implementation of lease exclusivity in the U.S. Credit performance commensurate with the predominantly prime credit portfolio 9

10 North America Commercial Lending Receivables Outstanding ($B) $5 $4 $3 $2 $1 $ $4.1 $4.4 $3.3 $3.5 $3.5 Mar-15 Jun-15 Sept-15 Dec-15 Mar-16 Commercial Finance Receivables Outstanding Number of Dealers Floorplan financing represents 86% of commercial portfolio Our expanded product suite and increasing retail finance penetration enhances our value proposition and opportunity for continued steady growth 10

11 International Operations GM and GMF Penetration Statistics (Quarterly) Mar-16 Dec-15 Mar-15 GMF as a % of GM Retail Sales Europe 37.4% 43.4% 36.3% Latin America 55.0% 52.0% 50.1% GMF Wholesale Dealer Penetration Europe 99.9% 99.6% 99.5% Latin America 95.2% 96.9% 94.2% GM as % of GMF Retail Originations (GM New / GMF Retail Loan and Lease) Europe 81.0% 80.5% 77.9% Latin America 95.3% 94.5% 93.7% 11

12 International Operations Retail Loan Originations $2.0 $1.8 $1.7 $1.6 $1.6 $1.6 $1.5 Originations ($B) $1.0 $0.5 $0.9 $0.9 $0.7 $1.0 $0.7 $0.7 $0.9 $0.9 $0.6 $1.0 Latin America Retail Loan Europe Retail Loan $0.0 Mar-15 Jun-15 Sept-15 Dec-15 Mar-16 Origination volume was negatively impacted by the appreciation of the U.S. Dollar against foreign currencies Number of outstanding loan contracts at March 31, 2016 increased 5% from March 2015 and 1% from December

13 International Operations Retail Loan Credit Performance Credit Metrics 5.0% 1.2% Credit Losses 4.0% 3.0% 2.0% 1.0% 0.0% 0.8% 0.7% 0.8% 0.9% 0.8% Mar-15 Jun-15 Sept-15 Dec-15 Mar % 0.8% 0.6% 0.4% 0.2% 0.0% Delinquency Annualized quarterly net credit losses day delinquency 61+ day delinquency Credit loss performance overall remains stable, consistent with a predominantly prime portfolio 13

14 International Operations Commercial Lending Receivables Outstanding ($B) $7 $6 $5 $4 $3 $2 $1 $0 2,129 2,130 2,153 2,139 2,147 $4.3 $4.3 $4.3 $4.4 $4.8 $1.2 $1.3 $1.1 $1.1 $1.3 $3.0 $3.2 $3.2 $3.1 $3.6 Mar-15 Jun-15 Sept-15 Dec-15 Mar-16 Latin America Commercial Receivables Outstanding Europe Commercial Receivables Outstanding Number of Dealers At March 31, 2016, commercial finance receivables were comprised of 94% floorplan and 6% primarily from real estate and dealer loans Growth in European commercial receivables primarily due to higher inventory in the U.K. and Germany 14

15 China Joint Venture SAIC-GMAC GM Financial realized equity income of $36M in the March 2016 quarter and $28M in the March 2015 quarter through its 35% equity stake in SAIC-GMAC Mar-16 Dec-15 Mar-15 China JV as a % of SGM 1 Retail Sales % 24.5% 16.1% Retail Originations ($B) 2 $1.7 $2.1 $1.3 Ending Earning Assets ($B) Retail $7.2 $6.9 $6.6 Commercial 3 $3.0 $3.3 $2.9 Net Retail Credit Losses 0.4% 0.6% 0.6% 1. SAIC General Motors Sales Co., Ltd. 2. Includes off-balance sheet contracts originated for third-parties 3. Commercial receivables are not netted with dealer deposits 15

16 Financial Results Earnings Before Taxes ($M) $225 Three Months Ended March 31, 1 $ $136 $117 $109 $87 Total Co. North America International 1. Total company reflects net impact of intercompany allocations Total company year-over-year earnings modestly up compared to March 2015 quarter North America - Earnings attributable to portfolio growth were offset by: (1) lower effective yield on higher credit quality assets; (2) increased interest expense to support prospectively higher origination levels; and (3) incremental operating expenses associated with earning asset growth, investments in prime lending program, and enhancements in lease and servicing capabilities. International - Earnings growth driven by solid operating performance and an increase in China JV equity income, partially offset by FX Earnings for March 2016 quarter consistent with full-year earnings outlook to be slightly higher than 2015 On track to double 2014 calendar-year earnings over the next few years 16

17 Solid Balance Sheet Metrics Leverage Ratio 1 Tangible Net Worth ($B) 1 8.3x 8.8x $6.0 $6.9 $ x Mar-15 Dec-15 Mar-16 Mar-15 Dec-15 Mar-16 Year-over-year leverage increase consistent with earning asset expansion in higher credit quality tiers Support agreement applicable leverage ratio was 9.5x Leverage ratio could temporarily equal or slightly exceed applicable ratio in June and September quarters; additional funding from GM is not expected to be needed as available liquidity is anticipated to be sufficient to operate the business; leverage ratio is anticipated to be below applicable level by year-end Tangible net worth is net of accumulated losses on foreign currency translation Accumulated other comprehensive loss related to FX of $0.9B at March 31, Calculated consistent with GM/GMF Support Agreement 17

18 Solid Balance Sheet Metrics Ending Earning Assets ($B) Total Debt ($B) Liquidity ($B) $42.2 $57.7 $64.0 $39.0 $54.3 $60.4 $10.9 $14.7 $12.7 Mar-15 Dec-15 Mar-16 Mar-15 Dec-15 Mar-16 Mar-15 Dec-15 Mar-16 Retail Loan Retail Lease Commercial Loan Secured Debt Unsecured Debt Borrowing Capacity Cash Composition of earning assets continuing to shift to more prime-like credit profile Sub-prime loan portfolio (<620 FICO) represented approximately 17% of ending earning assets at March 31, 2016, down from 19% at December 31, 2015, with sub-prime mix expected to continue declining with growth in the commercial, lease and prime portfolios in North America Total debt increased commensurate with earning asset growth and percent unsecured increased to 46% at March 31, 2016 from 44% at December 31, 2015 Liquidity remains solid; down at March 31, 2016 from December 31, 2015 due to the funding of loan and lease originations in excess of available borrowing capacity as well as funding of a loan to Adam Opel in Germany 18

19 Funding Activity $60.4B Debt Outstanding Credit facilities Other Unsecured 4% Totaling $24.8B, provided by 36 banks at March 31, 2016 Credit Facilities 13% 1 Senior Notes 2% Securitization 5% International Capital markets North America: increased capacity by $142M in the quarter International: increased capacity by $290M in the quarter Credit Facilities 7% Public securitization funding In January 2016, closed AMCAR (U.S. Subprime Loan) for $1.2B Senior Notes 34% In February 2016, closed GMALT (U.S. Lease) for $1.0B Senior unsecured note issuances In February 2016, raised $2.75B U.S. notes comprising $1.5B in five year fixed rate notes and $1.25B in ten year fixed rate notes North America Other Retail bank deposits Securitization 35% $1.6B outstanding in Germany at March 31, 2016, up $0.3B from December 31, 2015 Private amortizing securitizations Closed one U.S. transaction totaling $1.0B during the quarter 1. International unsecured credit facilities were 6% and secured credit facilities were 7% of total debt outstanding 19

20 Public Debt Issuances $21-27B $20B ~$10-13 $11 $5B ~$ $9 $3 $ CY 1Q CY Forecast Securitization Senior Notes Maintain strategy of funding locally, with flexibility to issue globally to support North America funding needs and enhance investor diversification Securitization platforms segregated by asset type issuance cadence similar to 2015 AMCAR - U.S. subprime retail loan ECARAT U.K. - retail loan GMALT - U.S. lease ECARAT Germany - retail loan GFORT - U.S. floorplan U.S. prime retail loan platform as early as late 2016 Global senior note platform funding operations in U.S., Canada, and Europe (5-8 issuances per year) 1. Includes 144a transactions 20

21 Investor Relations contact: Stephen Jones Vice President, Investor Relations (817) For more information, visit gmfinancial.com