nd
2 Quarter 2016
Earnings Presentation
July 21, 2016
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, 2015.
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, Latin America, China and Europe, particularly
the United Kingdom where automobile sales may be negatively impacted due to the passage of the referendum to
discontinue membership in the European Union; 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
2
nd
Quarter 2016 Highlights
▪ Operating results
◦ Earned $266M 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 34% in the June 2016 quarter from 30% in
the June 2015 quarter
▪
Increased North America prime loan originations (≥680 FICO) to $1.1B in the June 2016 quarter from
$0.9B in the June 2015 quarter
▪
Expanded penetration of GM retail sales in both Europe and Latin America regions, compared to the
June 2015 quarter
◦ Credit performance generally stable
▪ Funding platform expansion
◦ Issued over $7B in public secured and unsecured debt securities in the quarter
◦ Increased retail bank deposits in Germany to $1.8B as of quarter end
◦ Continued diversification of funding platform by increasing unsecured debt funding to
unencumber assets
▪
Unsecured debt is 47% of total debt at June 30, 2016, up from 44% at December 31, 2015
▪ Customer experience initiatives enhancing customer loyalty and retention
◦ Early measures show positive impact on GM loyalty in the U.S.
3
Key Metrics
June 2016 Quarter
($M)
Earnings Before Tax
North
America
June 2015 Quarter
International Total Co.
1
North
America
International
Total Co.
1
$148
$118
$266
$133
$107
$225
Ending Earning Assets
$52,540
$16,196
$68,736
$31,851
$16,198
$48,049
Total Originations (Loan & Lease)
$8,992
$1,720
$10,712
$8,229
$1,666
$9,895
GM New as a % of Total Originations
87.5%
87.1%
87.5%
83.5%
84.2%
83.6%
Annualized Net Charge-offs as a % of Avg.
Retail Finance Receivables
2.3%
0.9%
1.7%
2.4%
0.7%
1.6%
1. Reflects net impact of intercompany allocations
4
North America
GM and GMF Penetration Statistics
(Quarterly)
Jun-16
Mar-16
Jun-15
GMF as a % of GM Retail Sales
U.S.
Canada
34.3%
17.9%
37.5%
23.2%
30.2%
25.1%
GMF Wholesale Dealer Penetration
U.S.
14.2%
13.7%
10.8%
12.0%
11.8%
11.0%
87.1%
98.8%
88.8%
99.6%
82.6%
98.9%
Canada
GM as % of GMF Retail Originations
(GM New / GMF Retail Loan & Lease)
U.S.
Canada
▪
GMF penetration of GM retail sales largely dependent on level of GM support for
subvented products in the market
◦
June 2016 quarter impacted by lower GM lease and subvented loan mix compared to March 2016 quarter
5
North America
Origination Mix by Credit Tier
Three Months Ended
(Loan and Lease Originations, $M)
Jun-16
Jun-15
Amount
Percent
Amount
Percent
Prime – FICO Score 680 and greater
$6,207
69.0%
$5,147
62.6%
Near-prime – FICO Score 620 to 679
1,171
13.0
1,384
16.8
Sub-prime – FICO Score less than 620
1,614
18.0
1,698
20.6
$8,992
100.0%
$8,229
100.0%
Total originations
1.
▪
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 prime credit tiers, driven by an increase in GM lease
penetration and in GMF prime loan originations
6
North America
Retail Loan Originations
$3.5
$3.2
$2.9
$3.0
Originations ($B)
$2.6
$2.6
$2.5
$2.0
$2.5
Loans originated on
new vehicles by
GM dealers
$2.0
$1.3
$1.9
$1.6
$1.4
Loans originated on
used vehicles by
GM dealers
$1.5
$1.0
$0.5
$0.6
$0.6
$0.5
$0.5
$0.5
$0.7
$0.6
$0.5
$0.5
$0.6
Jun-15
Sept-15
Dec-15
Mar-16
Jun-16
Loans originated on
vehicles by non-GM
dealers
$0.0
GMF as % of GM
New U.S. loans <620
32%
32%
32%
38%
36%
GMF as % of GM
New U.S. loans ≥620
9%
14%
14%
10%
10%
▪
Weighted average FICO score in the June 2016 quarter continues to trend
positively
7
North America
Retail Loan Credit Performance
5.0%
8.0%
4.0%
6.0%
3.0%
2.0%
2.4%
2.7%
3.0%
2.6%
4.0%
2.3%
2.0%
1.0%
Delinquency
Net Annualized Charge-offs
Credit Metrics
Net annualized
charge-offs
31-60 day delinquency
61+ day delinquency
0.0%
Recovery Rate
0.0%
Jun-15
Sept-15
Dec-15
59%
56%
53%
Mar-16
54%
Jun-16
55%
▪ Credit performance reflects portfolio mix shift to prime
◦ Finance receivables with FICO scores <620 comprise 55% of the North America retail
loan portfolio at June 30, 2016, compared to 71% at June 30, 2015
▪ Recovery rates are expected to continue trending down throughout 2016
8
North America
Lease Originations
$28.3
$24.4
$20.1
$16.8
$12.8
$0.2
$0.3
$0.4
$5.1
Jun-15
Canada Lease Volume ($B)
$0.3
$0.2
$5.9
Sept-15
U.S. Lease Volume ($B)
$6.5
$6.1
Mar-16
Jun-16
$5.2
Dec-15
Lease Portfolio ($B)
▪
Year-over-year origination volume up driven by increase in GM's U.S. lease
penetration
▪
Credit performance commensurate with the predominantly prime credit
portfolio
▪
Favorable residual performance driven by truck and SUV values
9
North America
Commercial Lending
Receivables Outstanding ($B)
$5
567
607
656
694
721
$4
$3
$2
$3.5
$3.5
Jun-15
Sept-15
$4.1
$4.4
$4.8
$1
$0
Dec-15
Mar-16
Jun-16
Commercial Finance Receivables Outstanding
Number of Dealers
▪ Floorplan financing represents 87% of commercial portfolio
▪ Our expanded product suite and increasing retail finance penetration enhances our value
proposition and opportunity for continued steady growth
10
International Operations
GM and GMF Penetration Statistics
(Quarterly)
Jun-16
Mar-16
Jun-15
GMF as a % of GM Retail Sales
Europe
Latin America
40.6%
55.2%
37.3%
55.0%
38.4%
45.5%
GMF Wholesale Dealer Penetration
Europe
98.8%
99.9%
99.5%
95.4%
95.2%
95.9%
80.6%
96.0%
81.0%
95.3%
77.3%
94.1%
Latin America
GM as % of GMF Retail Originations
(GM New / GMF Retail Loan and Lease)
Europe
Latin America
▪ Continued strong penetration levels in Europe and Latin America, impacted
favorably by GM subvention support programs
11
International Operations
Retail Loan Originations
$2.0
$1.7
$1.6
$1.6
$1.6
$0.7
$0.7
$0.6
$1.7
Originations ($B)
$1.5
$0.7
$0.7
$1.0
$0.5
Latin America
Retail Loan
Europe
Retail Loan
$1.0
$0.9
$0.9
Sept-15
Dec-15
$1.0
$1.0
Mar-16
Jun-16
$0.0
Jun-15
▪ Stable origination trend, with foreign exchange impact offsetting volume
increases
◦ Number of outstanding loan contracts grew to 1.6M for the quarter, an increase of 5%
from June 2015 and 1% from March 2016
12
International Operations
Retail Loan Credit Performance
5.0%
1.2%
1.0%
4.0%
0.8%
3.0%
0.6%
2.0%
0.4%
Net annualized
charge-offs
31-60 day delinquency
61+ day delinquency
1.0%
0.7%
0.8%
0.9%
0.8%
0.9%
Jun-15
Sept-15
Dec-15
Mar-16
Jun-16
0.0%
▪
Delinquency
Net Annualized Charge-offs
Credit Metrics
0.2%
0.0%
Credit metrics generally stable, consistent with a predominantly
prime portfolio
13
International Operations
Commercial Lending
Receivables Outstanding ($B)
$7
$6
$5
$4
2,130
2,153
2,139
$4.3
$4.3
$4.4
$1.1
$1.1
$1.3
$3.2
$3.2
$3.1
Jun-15
Sept-15
Dec-15
2,147
2,146
$4.8
$4.6
$1.2
$1.2
$3.6
$3.4
Mar-16
Jun-16
$3
$2
$1
$0
Latin America Commercial Receivables Outstanding
Europe Commercial Receivables Outstanding
Number of Dealers
▪ At June 30, 2016, commercial finance receivables were comprised of 94%
floorplan and 6% primarily from real estate and dealer loans
◦
Decline in European commercial receivables compared to March 2016 quarter primarily
driven by appreciation of the U.S. Dollar against foreign currencies
14
China Joint Venture – SAIC-GMAC
▪ GM Financial realized equity income for the three months ended June 2016 and
2015 of $37M and $28M and for the six months ended June 2016 and 2015 of
$73M and $56M, respectively, through its 35% equity stake in SAIC-GMAC
Jun-16
26.1%
$1.7
Mar-16
23.2%
$1.7
Jun-15
17.8%
$1.1
Ending Earning Assets ($B)
Retail
Commercial3
$7.1
$3.1
$7.2
$3.0
$6.4
$3.1
Net Retail Charge-offs
0.3%
0.4%
0.6%
1
China JV as a % of SGM Retail Sales
Retail Originations ($B)2
2
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
Financial Results
Earnings Before Taxes ($M)
Three Months Ended June 30,1
2016
Six Months Ended June 30,1
2015
2016
$266
2015
$491
$439
$225
$148
Total Co.
$133
North America
$265 $269
$118 $107
International
Total Co.
North America
$227
$194
International
1. Total company reflects net impact of intercompany allocations
▪
For the six months ended June 30, 2016:
◦
North America - Earnings essentially flat with portfolio growth and favorable residual performance being 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 stronger penetration rates year-over-year, higher earning assets and an
increase in China JV equity income moderately offset by FX
▪
Earnings for six months consistent with full-year earnings outlook to be slightly higher than 2015
◦
▪
Expect earnings for the second half of 2016 to be impacted by increased operating expenses related to staffing and,
to a lesser degree, increased interest expense, both in support of GMF's full captive strategy
On track to double 2014 calendar-year earnings when full captive penetration levels are achieved
16
Solid Balance Sheet Metrics
$68.7
$57.7
Jun-15
Retail
Loan
$64.5
$12.9
Jun-16
Jun-15
$54.3
$48.0
Liquidity ($B)
Total Debt ($B)
Ending Earning Assets ($B)
$14.7
$15.4
Dec-15
Jun-16
$44.2
Dec-15
Jun-16
Retail
Lease
Commercial
Loan
Jun-15
Dec-15
Secured
Debt
Unsecured
Debt
Borrowing Capacity
Cash
▪ Composition of earning assets continuing to shift to more “prime-like” credit profile
◦
Sub-prime loan portfolio (<620 FICO) represented approximately 16% of ending earning assets at June 30,
2016, down from 19% at December 31, 2015, with sub-prime mix expected to continue declining with growth in
the commercial, lease and prime portfolios in North America
▪ Total debt increased commensurate with earning asset growth and percent unsecured
increased to 47% at June 30, 2016 from 44% at December 31, 2015
▪ Liquidity increased at June 30, 2016 from December 31, 2015 due to increased borrowing
capacity on unpledged eligible assets
17
Solid Balance Sheet Metrics
Leverage Ratio1
Tangible Net Worth ($B)
$6.3
$6.9
9.3x
$7.3
8.3x
7.5x
Jun-15
Dec-15
Jun-16
Jun-15
Dec-15
Jun-16
▪ Tangible net worth is net of accumulated losses on foreign currency translation
◦ Accumulated other comprehensive loss related to FX of $1.0B at June 30, 2016
▪ Year-over-year leverage increase consistent with earning asset expansion in
higher credit quality tiers
◦ Support agreement applicable leverage ratio was 9.5x, increases to 11.5x when earning
assets reach $75B
◦ Leverage ratio could temporarily exceed the applicable level at September 30, 2016 and if
so, we intend to borrow on the GM Junior Subordinated Revolving Credit Facility; we expect
ratio to be within applicable level and borrowing repaid by December 31, 2016
1. Calculated consistent with GM/GMF Support Agreement; Net Earnings Assets divided by Adjusted Equity (which includes amounts outstanding on the Junior Subordinated
Revolving Credit Facility, if any)
18
Funding Activity
$64.5B Debt
Outstanding
▪ Credit facilities
◦
Other Unsecured 4%
▪ Capital markets
Credit Facilities 11%1
Senior Notes 3%
Totaling $24.8B, provided by 35 banks at June 30, 2016
International
$14.3B
◦
Public securitization funding
▪
Securitization 5%
•
Closed AMCAR 2016-2 (U.S. Subprime Loan) for $1.2B
Credit Facilities 6%
•
Closed ECARAT 6 U.K. (U.K. Retail Loan) for $0.5B
▪
Senior Notes
35%
◦
Securitization
36%
•
Closed GMALT 2016-2 (U.S. Lease) for $1.1B
•
Closed GFORT 2016-1 (U.S. Floorplan) for $1.0B
▪
In May 2016, raised $3.0B in U.S. notes, comprised of $2.6B of
fixed rate notes (3 and 7 year tenors) and $0.4B of floating rate
notes (3 year tenor); and $0.6B in fixed rate EMTN notes (4 year
tenor)
▪
Subsequent to quarter end, issued $2.0B in fixed rate U.S. notes
(5 year tenor)
▪ Other
◦
Retail bank deposits
▪
◦
International unsecured credit facilities were 5% and secured
credit facilities were 6% of total debt outstanding
In May 2016:
Senior unsecured note issuances
North America
$50.2B
1.
In April 2016:
$1.8B outstanding in Germany at June 30, 2016, up $0.5B from
December 31, 2015
Private amortizing securitizations
▪
Closed three U.S. transactions totaling $1.5B during the quarter
19
Public Debt Issuances
$21-27B
$20B
~$10-13
$12B
$11
$6
~$11-14
$9
$6
2015 CY
Securitization
Six Months Ended June 2016
1
2016 CY Forecast
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 - 2016 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 in 2017
Global senior note platform funding operations in U.S., Canada, and Europe (5-8 issuances per year)
◦
In the second half of 2016, evaluating incremental Euro issuance off of the EMTN platform to support funding
needs in the U.S.
1. Includes 144a transactions
20
For more information, visit
gmfinancial.com
Investor Relations contact:
Stephen Jones
Vice President, Investor Relations
(817) 302-7119
Investors@gmfinancial.com