General Motors Financial Company Inc.
01/27/2026 | Press release | Distributed by Public on 01/27/2026 15:12
Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)
Management's Discussion and Analysis of Financial Condition and Results of Operations
General We are a global provider of automobile finance solutions, and we operate in the auto finance market as the wholly-owned captive finance subsidiary of GM. We evaluate our business in two reportable segments: the North America Segment, which includes our operations in the U.S. and Canada, and the International Segment, which includes operations in Brazil, Chile, Colombia, Mexico and Peru, as well as our equity investments in joint ventures in China.
Critical Accounting Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities as of the date of the financial statements and the reported amount of revenue and expenses in the periods presented. Actual results could differ from those estimates, due to inherent uncertainties in making estimates, and those differences may be material. Refer to Note 1to our consolidated financial statements for our significant accounting policies related to our critical accounting estimates. The accounting estimates that we believe are the most critical to understanding and evaluating our reported financial results include the following:
Allowance for Loan Losses Our retail finance receivables portfolio consists of smaller-balance, homogeneous loans that are carried at amortized cost basis, net of allowance for loan losses. The allowance for loan losses on retail finance receivables reflects net credit losses expected to be incurred over the remaining life of the retail finance receivables, which have a weighted average remaining life of approximately two years. We forecast net credit losses based on relevant information about past events, current conditions and forecast economic performance. We believe that the allowance is adequate to cover expected credit losses on the retail finance receivables; however, because the allowance for loan losses is based on estimates, there can be no assurance that the ultimate charge-off amount will not exceed such estimates or that our credit loss assumptions will not increase.
The severity of net credit losses is determined by the amounts we are able to recover when we sell the collateral underlying loans that have been charged off. The recovery rate is the percentage of the unpaid principal balance that we collect, primarily through auction proceeds. We incorporate our outlook on recovery rates in our retail allowance estimate. Each 5% relative decrease/increase in our forecast recovery rates would increase/decrease our U.S. allowance for loan losses by $106 million.
We also incorporate our outlook on overall economic performance, based on weightings applied to several scenarios, in our retail allowance estimate. If the forecast economic conditions were based entirely on the weakest scenario we considered, the U.S. allowance for loan losses would increase by $169 million. Actual economic data and recovery rates that are worse/lower than those we forecast could result in an increase in the allowance for loan losses.
Our commercial finance receivables portfolio consists of financing products for dealers and other businesses. We provide commercial lending products to our dealer customers that include floorplan financing, also known as wholesale or inventory financing, which is lending to finance vehicle inventory. We also provide dealer loans, which are loans to finance improvements to dealership facilities, to provide working capital, or to purchase and/or finance dealership real estate. Additionally, we provide lending products to commercial vehicle upfitters and advances to certain GM subsidiaries. The allowance for loan losses on commercial finance receivables is based on historical loss experience for the consolidated portfolio, in addition to forecasted auto industry conditions. There can be no assurance that ultimate charge-off amounts will not exceed such estimates or that our credit loss assumptions will not increase.
GENERAL MOTORS FINANCIAL COMPANY, INC.
Residual Value of Leased Vehicles We have investments in leased vehicles recorded as operating leases. Each leased asset in our portfolio represents a vehicle that we own and have leased to a customer. At the inception of a lease, we establish an expected residual value for the vehicle at the end of the lease term, which typically ranges from one to five years. We estimate the expected residual value based on third-party data that considers various data points and assumptions, including, but not limited to, recent auction values, the expected future volume of returning leased vehicles, significant liquidation of rental or fleet inventory, used vehicle prices, manufacturer incentive programs and fuel prices. Depreciation reduces the carrying value of each leased asset in our leased vehicles portfolio over time from its original acquisition value to its expected residual value at the end of the lease term.
During the term of a lease, we periodically evaluate the estimated residual value and may adjust the value downward, which increases the prospective depreciation, or upward (limited to the contractual residual value), which decreases the prospective depreciation.
The customer is obligated to make payments during the lease term for the difference between the purchase price and the contract residual value plus a money factor. However, since the customer is not obligated to purchase the vehicle at the end of the contract, we are exposed to a risk of loss to the extent the customer returns the vehicle prior to or at the end of the lease term and the proceeds we receive on the disposition of the vehicle are lower than the residual value estimated at the inception of the lease. Realization of the residual values is dependent on our future ability to market the vehicles under prevailing market conditions.
At December 31, 2025, the estimated residual value of our leased vehicles was $25.0 billion. If used vehicle prices weaken compared to our estimates, we would increase depreciation expense and/or record an impairment charge on our lease portfolio. If an impairment exists, we would determine any shortfall in recoverability of our leased vehicle asset groups by year, make and model. Recoverability is calculated as the excess of (1) the sum of remaining lease payments, plus estimated residual value, over (2) leased vehicles, net, less deferred income. Alternatively, if used vehicle prices outperform our latest estimates, we may record gains on sales of off-lease vehicles and/or decreased depreciation expense.
We reviewed our leased vehicles portfolio for indicators of impairment and determined that no impairment indicators were present at December 31, 2025 or 2024.
The following table illustrates the effect of a 1% relative change in the estimated residual values at December 31, 2025, which could increase or decrease depreciation expense over the remaining term of our leased vehicles portfolio, holding all other assumptions constant. Changes to residual values are rarely simultaneous across all maturities and segments, and also may impact return rates. If a decrease in residual values is concentrated among specific asset groups, the decrease could result in an immediate impairment charge.
| Years Ending December 31, | |||||||||||||||||||||||||||||
| 2026 | 2027 | 2028 | 2029 and Thereafter | Total | |||||||||||||||||||||||||
| Impact to depreciation expense | $ | 174 | $ | 60 | $ | 15 | $ | 1 | $ | 250 | |||||||||||||||||||
Income Taxes We are subject to income tax in the U.S. and numerous other state and foreign jurisdictions. Refer to Note 15to our consolidated financial statements for more information relating to our tax sharing agreement with GM for our U.S. operations.
We account for income taxes on a separate return basis using an asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences attributable to differences between financial statements' carrying amounts of existing assets and liabilities and their respective tax basis, net operating loss and tax credit carryforwards. A valuation allowance is recognized if it is more likely than not that some portion or the entire deferred tax asset will not be realized.
In the ordinary course of business, there may be transactions, calculations, structures and filing positions where the ultimate tax outcome is uncertain. At any point in time, multiple tax years are subject to audit by various taxing jurisdictions, and we record liabilities for estimated tax results based on the requirements of the accounting for uncertainty in income taxes. We believe the estimates recorded are reasonable. However, due to expiring statutes of limitations, audits, settlements, changes in tax law or new authoritative rulings, no assurance can be given that the final outcome of these matters will be comparable to what was reflected in the historical income tax provisions and accruals. We may need to adjust our accrued tax assets or liabilities if actual results differ from estimated results or if we adjust the assumptions used in the computation of the estimated tax results in the future. These adjustments could materially impact the effective tax rate, earnings, accrued tax balances and cash.
GENERAL MOTORS FINANCIAL COMPANY, INC.
The ability to realize deferred tax assets depends on the ability to generate sufficient taxable income within the carryback or carryforward periods provided for in the tax law for each applicable tax jurisdiction. The assessment regarding whether a valuation allowance is required or should be adjusted is based on an evaluation of possible sources of taxable income and also considers all available positive and negative evidence factors. Our accounting for deferred tax consequences represents our best estimate of future events. Changes in our current estimates, due to unanticipated market conditions or events, could have a material effect on our ability to utilize deferred tax assets.
Results of Operations
This section discusses our results of operations for the year ended December 31, 2025 as compared to the year ended December 31, 2024. For a discussion and analysis of the year ended December 31, 2024, compared to the same period in 2023, please refer to Management's Discussion and Analysis of Financial Condition and Results of Operations included in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on January 28, 2025.
Key Drivers Earnings before taxes, adjusted was $2.8 billion and $3.0 billion for 2025 and 2024. Changes in key drivers include the following:
•Finance charge income on retail finance receivables increased $626 million primarily due to increases in the effective yield and average balance of the portfolio. The effective yield on our retail finance receivables increased primarily due to increased average interest rates on new loan originations.
•Finance charge income on commercial finance receivables decreased $121 million primarily due to a decrease in the effective yield resulting from lower short-term benchmark rates, partially offset by an increase in the average balance of the portfolio
•Leased vehicle income increased $503 million primarily due to an increase in the average balance of the leased vehicles portfolio.
•Other income increased $177 million primarily due to an increase in earned premiums and fees on vehicle protection contracts.
•Interest expense increased $462 million primarily due to an increase in the average debt outstanding.
•Operating expenses increased $404 million primarily due to investments in the insurance and vehicle protection businesses and increases in the related claims expense, as well as a non-recurring reserve release in 2024.
•Leased vehicle expenses increased $278 million primarily due to a decrease in lease termination gains and increased depreciation resulting from an increase in the average balance of the leased vehicles portfolio.
•Provision for loan losses increased $178 million primarily due to a shift in the credit mix of loan originations.
For the year ending December 31, 2026, we expect to recognize income before income taxes in the $2.5 billion to $3.0 billion range.
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Average Earning Assets
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Years Ended December 31, | 2025 vs. 2024 | |||||||||||||||||||||
| 2025 | 2024 | Amount | Percentage | ||||||||||||||||||||
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Average retail finance receivables
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$ | 76,717 | $ | 73,917 | $ | 2,800 | 3.8 | % | |||||||||||||||
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Average commercial finance receivables
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17,203 | 16,704 | 499 | 3.0 | % | ||||||||||||||||||
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Average finance receivables
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93,920 | 90,621 | 3,299 | 3.6 | % | ||||||||||||||||||
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Average leased vehicles, net
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32,925 | 30,641 | 2,283 | 7.5 | % | ||||||||||||||||||
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Average earning assets
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$ | 126,844 | $ | 121,262 | $ | 5,582 | 4.6 | % | |||||||||||||||
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Retail finance receivables purchased
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$ | 36,314 | $ | 36,960 | $ | (646) | (1.7) | % | |||||||||||||||
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Leased vehicles purchased
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$ | 19,567 | $ | 19,089 | $ | 478 | 2.5 | % | |||||||||||||||
Average retail finance receivables increased primarily due to new loan originations in excess of principal collections and payoffs. Our penetration of GM's retail sales in the U.S. was 33.3% and 38.9% in 2025 and 2024. Penetration levels vary depending on incentive financing programs available and competing third-party financing products in the market.
GENERAL MOTORS FINANCIAL COMPANY, INC.
Average commercial finance receivables increased primarily due to higher floorplan penetration. Our floorplan dealer penetration in the U.S. was 48.5% and 47.5% at December 31, 2025 and 2024.
Leased vehicles purchased increased primarily due to growth in GM sales and higher net capitalized cost, partially offset by lower lease sales mix.
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Revenue
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Years Ended December 31, | 2025 vs. 2024 | |||||||||||||||||||||
| 2025 | 2024 | Amount | Percentage | ||||||||||||||||||||
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Finance charge income
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|||||||||||||||||||||||
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Retail finance receivables
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$ | 6,934 | $ | 6,309 | $ | 626 | 9.9 | % | |||||||||||||||
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Commercial finance receivables
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$ | 1,239 | $ | 1,360 | $ | (121) | (8.9) | % | |||||||||||||||
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Leased vehicle income
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$ | 7,800 | $ | 7,297 | $ | 503 | 6.9 | % | |||||||||||||||
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Other income
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$ | 1,086 | $ | 909 | $ | 177 | 19.5 | % | |||||||||||||||
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Equity income
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$ | 39 | $ | 64 | $ | (25) | (39.0) | % | |||||||||||||||
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Effective yield - retail finance receivables
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9.0 | % | 8.5 | % | |||||||||||||||||||
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Effective yield - commercial finance receivables
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7.2 | % | 8.1 | % | |||||||||||||||||||
Finance Charge Income - Retail Finance Receivables Finance charge income on retail finance receivables increased primarily due to increases in the effective yield and average balance of the portfolio. The effective yield on our retail finance receivables increased primarily due to increased average interest rates on new loan originations. The effective yield represents finance charges, rate subvention and fees recorded in earnings during the period as a percentage of average retail finance receivables.
Finance Charge Income - Commercial Finance Receivables Finance charge income on commercial finance receivables decreased primarily due to a decrease in the effective yield resulting from lower short-term benchmark rates, partially offset by an increase in the average balance of the portfolio.
Leased Vehicle IncomeLeased vehicle income increased primarily due to an increase in the average balance of the leased vehicles portfolio.
Other Income Other income increased primarily due to an increase in earned premiums and fees on vehicle protection contracts.
| Costs and Expenses | Years Ended December 31, | 2025 vs. 2024 | |||||||||||||||||||||
| 2025 | 2024 | Amount | Percentage | ||||||||||||||||||||
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Operating expenses
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$ | 2,206 | $ | 1,802 | $ | 404 | 22.4 | % | |||||||||||||||
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Leased vehicle expenses
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$ | 4,391 | $ | 4,113 | $ | 278 | 6.8 | % | |||||||||||||||
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Provision for loan losses
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$ | 1,207 | $ | 1,029 | $ | 178 | 17.3 | % | |||||||||||||||
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Interest expense
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$ | 6,492 | $ | 6,030 | $ | 462 | 7.7 | % | |||||||||||||||
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Average debt outstanding
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$ | 116,475 | $ | 108,962 | $ | 7,513 | 6.9 | % | |||||||||||||||
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Effective rate of interest on debt
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5.6 | % | 5.5 | % | |||||||||||||||||||
Operating ExpensesOperating expenses as a percentage of average earning assets were 1.7% and 1.5% for 2025 and 2024. Operating expenses increased primarily due to investments in the insurance and vehicle protection businesses and increases in the related claims expense, as well as a non-recurring reserve release in 2024.
Leased Vehicle Expenses Leased vehicle expenses increased primarily due to a decrease in lease termination gains and increased depreciation resulting from an increase in the average balance of the leased vehicles portfolio. The decrease in gains is primarily due to a decrease in the average gain on the sale of leased vehicles as well as fewer terminated leases in 2025.
Provision for Loan Losses Provision for loan losses increased primarily due to a shift in the credit mix of loan originations.
Interest ExpenseInterest expense increased primarily due to an increase in the average debt outstanding.
Taxes Our consolidated effective income tax rates were 26.5% and 29.7% of income before income taxes for 2025 and 2024. Refer to Note 15to our consolidated financial statements for tax rate reconciliation.
GENERAL MOTORS FINANCIAL COMPANY, INC.
Impairment of investment in nonconsolidated affiliate During 2024, in response to market challenges and competitive conditions, GM and its joint venture partners restructured their operations in China. Accordingly, we evaluated our investment in SAIC-GMAC for potential impairment, and we determined the carrying value of our investment exceeded its fair value. We concluded that the loss in value was other-than-temporary and recorded an impairment charge of $320 million.
Other Comprehensive Income (Loss)
Unrealized Gain (Loss) on HedgesUnrealized gain (loss) on hedges included in other comprehensive income (loss) was $(144) million and $81 million for 2025 and 2024. The change in unrealized gain (loss) was primarily due to changes in the fair value of our foreign currency swap agreements.
Unrealized gains and losses on cash flow hedges of our floating rate debt are reclassified into earnings in the same period during which the hedged transactions affect earnings via principal remeasurement or accrual of interest expense.
Foreign Currency Translation Adjustment Foreign currency translation adjustments included in other comprehensive income (loss) were $274 million and $(403) million for 2025 and 2024. Translation adjustments resulted from changes in the values of our foreign currency assets and liabilities as the value of the U.S. Dollar changed in relation to international currencies. The foreign currency translation gain for 2025 was primarily due to appreciating values of the Mexican Peso, Brazilian Real, Chinese Yuan Renminbi, and Canadian Dollar in relation to the U.S. Dollar. The foreign currency translation loss for 2024 was primarily due to depreciating values of the Mexican Peso, Brazilian Real, Canadian Dollar, and Chinese Yuan Renminbi in relation to the U.S. Dollar.
Earning Assets Quality
Retail Finance Receivables Our retail finance receivables portfolio includes loans made to consumers and businesses to finance the purchase of vehicles for personal and commercial use. A summary of the credit risk profile by FICO score or its equivalent, determined at origination, of the retail finance receivables is as follows:
| December 31, 2025 | December 31, 2024 | ||||||||||||||||||||||
| Amount | Percent | Amount | Percent | ||||||||||||||||||||
| Prime - FICO Score 680 and greater | $ | 56,440 | 74.9 | % | $ | 58,067 | 76.3 | % | |||||||||||||||
| Near-prime - FICO Score 620 to 679 | 9,303 | 12.3 | 8,990 | 11.8 | |||||||||||||||||||
| Sub-prime - FICO Score less than 620 | 9,661 | 12.8 | 9,008 | 11.8 | |||||||||||||||||||
| Retail finance receivables | 75,404 | 100.0 | % | 76,066 | 100.0 | % | |||||||||||||||||
| Less: allowance for loan losses | (2,656) | (2,400) | |||||||||||||||||||||
| Retail finance receivables, net | $ | 72,748 | $ | 73,667 | |||||||||||||||||||
| Number of outstanding contracts | 3,194,917 | 3,285,728 | |||||||||||||||||||||
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Average amount of outstanding contracts (in dollars)(a)
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$ | 23,601 | $ | 23,151 | |||||||||||||||||||
| Allowance for loan losses as a percentage of retail finance receivables | 3.5 | % | 3.2 | % | |||||||||||||||||||
_________________
(a)Average amount of outstanding contracts is calculated as retail finance receivables, divided by number of outstanding contracts.
The increase in the allowance for loan losses as a percentage of retail finance receivables is primarily due to changes in the composition of credit mix of the portfolio.
Delinquency The following is a consolidated summary of delinquent retail finance receivables:
| December 31, 2025 | December 31, 2024 | ||||||||||||||||||||||
| Amount | Percent | Amount | Percent | ||||||||||||||||||||
| 31 - 60 days | $ | 2,011 | 2.7 | % | $ | 1,885 | 2.5 | % | |||||||||||||||
| Greater than 60 days | 795 | 1.1 | 677 | 0.9 | |||||||||||||||||||
| Total finance receivables more than 30 days delinquent | 2,806 | 3.7 | 2,562 | 3.4 | |||||||||||||||||||
| In repossession | 75 | 0.1 | 66 | 0.1 | |||||||||||||||||||
| Total finance receivables more than 30 days delinquent or in repossession | $ | 2,881 | 3.8 | % | $ | 2,628 | 3.5 | % | |||||||||||||||
GENERAL MOTORS FINANCIAL COMPANY, INC.
Loan ModificationsLoan modifications extended to borrowers experiencing financial difficulty were insignificant for 2025 and 2024. Refer to Note 1and Note 4to our consolidated financial statements for further information on loan modifications.
Net Charge-offs The following table presents charge-off data with respect to our retail finance receivables portfolio:
| Years Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Charge-offs | $ | 1,998 | $ | 1,754 | |||||||
| Less: recoveries | (1,035) | (901) | |||||||||
| Net charge-offs | $ | 963 | $ | 853 | |||||||
| Net charge-offs as a percentage of average retail finance receivables | 1.3 | % | 1.2 | % | |||||||
| Commercial Finance Receivables | December 31, 2025 | December 31, 2024 | |||||||||
| Commercial finance receivables | $ | 17,365 | $ | 19,901 | |||||||
| Less: allowance for loan losses | (68) | (58) | |||||||||
| Commercial finance receivables, net | $ | 17,297 | $ | 19,843 | |||||||
| Number of dealers | 2,554 | 2,537 | |||||||||
| Average carrying amount per dealer | $ | 7 | $ | 8 | |||||||
| Allowance for loan losses as a percentage of commercial finance receivables | 0.4 | % | 0.3 | % | |||||||
Substantially all of our commercial finance receivables were current with respect to payment status at December 31, 2025 and 2024. No commercial loans were modified for 2025 and 2024.
Leased VehiclesThe following table summarizes activity in our operating lease portfolio (in thousands, except where noted):
| Years Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Operating leases purchased | 375 | 393 | |||||||||
| Operating leases terminated | 365 | 410 | |||||||||
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Operating leased vehicles returned(a)
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96 | 99 | |||||||||
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Percentage of leased vehicles returned(b)
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26 | % | 24 | % | |||||||
________________
(a)Represents the number of vehicles returned to us for remarketing.
(b)Calculated as the number of operating leased vehicles returned divided by the number of operating leases terminated.
The return rate is largely dependent on the level of used vehicle values at lease termination compared to contractual residual values at lease inception. Return rates for 2025 increased compared to 2024 due to decreased used vehicle values. The return rates continued to be lower than historical levels as used vehicle prices have generally remained higher than contractual residual values. Gains on terminations of leased vehicles were $586 million for 2025 compared to $758 million for 2024. The decrease in gains is primarily due to a decrease in the average gain on the sale of leased vehicles as well as fewer terminated leases in 2025.
The following table summarizes the residual value based on our most recent estimates and the number of units included in leased vehicles, net by vehicle segment (units in thousands):
| December 31, 2025 | December 31, 2024 | ||||||||||||||||||||||||||||||||||
| Residual Value | Units |
Percentage of Units |
Residual Value | Units |
Percentage of Units |
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| Crossovers | $ | 13,145 | 617 | 64.8 | % | $ | 13,184 | 635 | 67.3 | % | |||||||||||||||||||||||||
| Trucks | 8,702 | 254 | 26.6 | 7,458 | 224 | 23.7 | |||||||||||||||||||||||||||||
| SUVs | 2,619 | 56 | 5.9 | 2,260 | 53 | 5.6 | |||||||||||||||||||||||||||||
| Cars | 515 | 26 | 2.7 | 590 | 31 | 3.3 | |||||||||||||||||||||||||||||
| Total | $ | 24,981 | 952 | 100.0 | % | $ | 23,492 | 943 | 100.0 | % | |||||||||||||||||||||||||
At December 31, 2025 and 2024, residual values of leased EVs represented 21.1% and 10.0% of total residual values. At both December 31, 2025 and 2024, 99.3% of our operating leases were current with respect to payment status.
GENERAL MOTORS FINANCIAL COMPANY, INC.
Liquidity and Capital Resources
General Our primary sources of cash are finance charge income, leasing income and proceeds from the sale of terminated leased vehicles, net proceeds from credit facilities, securitizations, secured and unsecured borrowings, and collections and recoveries on finance receivables. Our expected material uses of cash are purchases and funding of finance receivables and leased vehicles, repayment or repurchases of secured and unsecured debt, funding credit enhancement requirements in connection with securitizations and secured credit facilities, interest costs, operating expenses, income taxes and dividend payments.
Typically, our purchase and funding of retail and commercial finance receivables and leased vehicles are initially financed by utilizing cash and borrowings on our secured credit facilities. Subsequently, we typically obtain long-term financing for finance receivables and leased vehicles through securitization transactions and the issuance of unsecured debt. Refer to Note 8to our consolidated financial statements for information regarding our material cash requirements for debt contractual obligations.
The following table summarizes our available liquidity:
| Liquidity | December 31, 2025 | December 31, 2024 | |||||||||
| Cash, cash equivalents and marketable debt securities(a) | $ | 5,866 | $ | 5,094 | |||||||
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Available capacity under secured credit facilities
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25,924 | 21,548 | |||||||||
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Available under committed unsecured credit facilities
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967 | 665 | |||||||||
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Available under the Junior Subordinated Revolving Credit Facility
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1,000 | 1,000 | |||||||||
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Available under the GM Revolving 364-Day Credit Facility
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2,000 | 2,000 | |||||||||
| Available liquidity | $ | 35,756 | $ | 30,307 | |||||||
_________________
(a)Includes $368 million and $389 million in unrestricted cash outside of the U.S. at December 31, 2025 and 2024, of which certain amounts are considered to be indefinitely invested based on specific plans for reinvestment.
Our available liquidity varies quarterly based on factors including near-term debt issuances and maturities, as well as changes in our earning assets. At December 31, 2025, available liquidity increased from December 31, 2024, primarily due to increased available capacity under secured credit facilities and an increase in cash and cash equivalents. Available capacity under secured credit facilities increased due to paydowns resulting from the issuance of securitization transactions and unsecured debt. We generally target liquidity levels to support at least six months of our expected net cash outflows, including new originations, without access to new debt financing transactions or other capital markets activity. At December 31, 2025, available liquidity exceeded our liquidity targets.
Cash FlowsThe following table summarizes our cash flow activities.
| Years Ended December 31, | 2025 vs. 2024 | ||||||||||||||||
| 2025 | 2024 | ||||||||||||||||
| Net cash provided by (used in) operating activities | $ | 7,979 | $ | 6,429 | $ | 1,550 | |||||||||||
| Net cash provided by (used in) investing activities | $ | (2,527) | $ | (15,418) | $ | 12,891 | |||||||||||
| Net cash provided by (used in) financing activities | $ | (4,563) | $ | 8,950 | $ | (13,513) | |||||||||||
The following table summarizes our net cash provided by (used in) operating activities. For further detail on our net cash provided by (used in) investing and financing activities, please refer to the Consolidated Statements of Cash Flows.
GENERAL MOTORS FINANCIAL COMPANY, INC.
| Years Ended December 31, | 2025 vs. 2024 | ||||||||||||||||
| Operating Activities | 2025 | 2024 | |||||||||||||||
| Net income (loss) | $ | 2,058 | $ | 1,860 | $ | 198 | |||||||||||
| Depreciation and amortization | 5,314 | 5,249 | 65 | ||||||||||||||
| Accretion and amortization of loan and leasing fees | (1,610) | (1,490) | (120) | ||||||||||||||
| Provision for loan losses | 1,207 | 1,029 | 178 | ||||||||||||||
| Other non-cash income | (593) | (369) | (225) | ||||||||||||||
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Changes in assets and liabilities
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1,193 | (911) | 2,104 | ||||||||||||||
| Deferred income taxes | 411 | 1,061 | (650) | ||||||||||||||
| Net cash provided by (used in) operating activities | $ | 7,979 | $ | 6,429 | $ | 1,550 | |||||||||||
Credit RatingsWe receive ratings from four independent credit rating agencies: DBRS Limited, Fitch Rating (Fitch), Moody's Investors Service (Moody's) and Standard & Poor's (S&P). The credit ratings assigned to us from all the credit rating agencies are closely associated with their opinions on GM. The following table summarizes our credit ratings at January 20, 2026:
| Company Rating | Bond Rating | Short Term Rating | Outlook | |||||||||||||||||||||||
| DBRS Limited | BBB (High) | BBB (High) | R-2 (High) | Stable | ||||||||||||||||||||||
| Fitch | BBB | BBB | F2 | Positive | ||||||||||||||||||||||
| Moody's | Baa2 | Baa2 | P-2 | Stable | ||||||||||||||||||||||
| S&P | BBB | BBB | A-2 | Stable | ||||||||||||||||||||||
Credit Facilities In the normal course of business, in addition to using our available cash, we fund our operations by borrowing under our credit facilities, which may be secured and/or structured as securitizations or may be unsecured. We repay these borrowings as appropriate under our liquidity management strategy.
At December 31, 2025, credit facilities consist of the following:
| Facility Type | Facility Amount | Advances Outstanding | ||||||||||||
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Secured debt(a)
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$ | 27,845 | $ | 1,869 | ||||||||||
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Unsecured debt(b)
|
3,830 | 2,863 | ||||||||||||
| Junior Subordinated Revolving Credit Facility | 1,000 | - | ||||||||||||
| GM Revolving 364-Day Credit Facility | 2,000 | - | ||||||||||||
| Total | $ | 34,675 | $ | 4,732 | ||||||||||
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(a)Includes committed and uncommitted revolving credit facilities backed by retail finance receivables and leases as well as loans to dealers for floorplan financing. The financial institutions providing the uncommitted facilities are not contractually obligated to advance funds under them, and no unused borrowing capacity is included in the facility amount. We had no advances outstanding on these uncommitted facilities at December 31, 2025.
(b)Includes committed and uncommitted facilities. The financial institutions providing the uncommitted facilities are not contractually obligated to advance funds under them, and no unused borrowing capacity is included in the facility amount. We had $2.9 billion of advances outstanding on these facilities at December 31, 2025.
Refer to Note 8to our consolidated financial statements for further discussion.
Securitization Notes Payable We periodically finance our retail and commercial finance receivables and leases through public and private term securitization transactions, where the securitization markets are sufficiently developed.
Our securitizations and credit facilities generally utilize special purpose entities, which are also variable interest entities (VIEs) that meet the requirements to be consolidated in our financial statements. Refer to Note 9to our consolidated financial statements for further discussion.
Unsecured Debt We periodically access the unsecured debt capital markets through the issuance of senior unsecured notes. At December 31, 2025, the aggregate principal amount of our outstanding unsecured senior notes was $56.7 billion.
GENERAL MOTORS FINANCIAL COMPANY, INC.
We issue other unsecured debt through demand notes, commercial paper and other bank and non-bank funding sources. At December 31, 2025, we had $3.3 billion outstanding in demand notes and $3.0 billion under the U.S. commercial paper program.
Support Agreement - Leverage Ratio Our earning assets leverage ratio, calculated in accordance with the terms of the support agreement with GM (the Support Agreement), was 8.67x and 9.24x at December 31, 2025 and 2024, and the applicable leverage ratio threshold was 12.00x. The decrease in the earning assets leverage ratio is primarily due to increased shareholders' equity as a result of $2.1 billion in net income, partially offset by $1.5 billion in dividends on our common stock paid to GM. In determining our earning assets leverage ratio (net earning assets divided by adjusted equity) under the Support Agreement, net earning assets means our finance receivables, net, plus leased vehicles, net, and adjusted equity means our equity, net of goodwill and inclusive of outstanding junior subordinated debt, as each may be adjusted for derivative accounting.
Asset and Liability Maturity Profile We define our asset and liability maturity profile as the cumulative maturities of our finance receivables, investment in leased vehicles, net of accumulated depreciation, cash and cash equivalents and other assets, less our cumulative debt maturities. We manage our balance sheet so that asset maturities will exceed debt maturities each year. The following chart presents our cumulative maturities for assets and debt at December 31, 2025:
| 2026 | 2027 | 2028 | 2029 and Thereafter | ||||||||||||||||||||
| Encumbered assets | $ | 24,959 | $ | 41,548 | $ | 52,405 | $ | 66,212 | |||||||||||||||
| Unencumbered assets | 48,787 | 67,109 | 77,268 | 74,265 | |||||||||||||||||||
| Total assets | 73,746 | 108,657 | 129,673 | 140,477 | |||||||||||||||||||
| Secured debt | 17,687 | 29,442 | 37,136 | 46,920 | |||||||||||||||||||
| Unsecured debt | 17,456 | 29,685 | 40,245 | 68,056 | |||||||||||||||||||
|
Total debt(a)
|
35,143 | 59,127 | 77,381 | 114,976 | |||||||||||||||||||
| Net excess liquidity | $ | 38,604 | $ | 49,529 | $ | 52,292 | $ | 25,501 | |||||||||||||||
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(a)Excludes unamortized debt premium/(discount), unamortized debt issuance costs and fair value adjustments.
Off-Balance Sheet Arrangements
Transfers of Finance Receivables During 2025, we sold certain retail finance receivables to third-party purchasers for $2.0 billion in cash proceeds, and we recognized an insignificant gain on the sale. We have continuing involvement with the finance receivables transferred, primarily in our role as servicer. The outstanding balance of the transferred finance receivables subject to continuing involvement was $1.7 billion at December 31, 2025. Refer to Note 4to our consolidated financial statements for further discussion.
Non-GAAP Measures
Earnings Before Taxes (EBT)-adjusted We use EBT-adjusted, a non-GAAP measure, to review our consolidated operating results because it excludes certain adjustments that are not considered part of our core operations. Examples of adjustments include, but are not limited to, impairment charges and other costs resulting from strategic shifts in our operations or discrete market and business conditions. For our non-GAAP measures, once we have made an adjustment in the current period for an item, we also adjust the related non-GAAP measure in any future periods in which there is an impact from the item.
The following table presents our reconciliation of EBT-adjusted to income before income taxes, the most directly comparable generally accepted accounting principles (GAAP) measure:
| Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Income before income taxes | $ | 2,802 | $ | 2,645 | $ | 2,985 | |||||||||||
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Adjustment - impairment charge(a)
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- | 320 | - | ||||||||||||||
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EBT - adjusted
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$ | 2,802 | $ | 2,965 | $ | 2,985 | |||||||||||
(a)This impairment charge was to write down our SAIC-GMAC equity investment to its fair value.
GENERAL MOTORS FINANCIAL COMPANY, INC.
Net Income Attributable to Common Shareholder - adjusted We use net income attributable to common shareholder - adjusted, a non-GAAP measure, to calculate our return on average tangible common equity - adjusted because it excludes certain adjustments that are not considered part of our core operations. It is calculated by subtracting the dividends paid to preferred shareholders from net income, after any adjustments.
The following table presents our reconciliation of net income attributable to common shareholder - adjusted to net income, the most directly comparable GAAP measure:
| Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
|
Net income
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$ | 2,058 | $ | 1,860 | $ | 2,245 | |||||||||||
|
Adjustment - impairment charge(a)
|
- | 320 | - | ||||||||||||||
| Net income - adjusted | 2,058 | 2,181 | 2,245 | ||||||||||||||
| Cumulative dividends on preferred stock | 119 | 119 | 119 | ||||||||||||||
| Net income attributable to common shareholder - adjusted | $ | 1,940 | $ | 2,062 | $ | 2,126 | |||||||||||
(a)This impairment charge was to write down our SAIC-GMAC equity investment to its fair value.
Return on Average Common EquityReturn on average common equity is a GAAP measure widely used to measure earnings in relation to invested capital. We calculate return on average common equity as net income attributable to common shareholder divided by average common equity. Our return on average common equity increased to 14.2% in 2025 from 12.7% in 2024, primarily due to the $320 million impairment charge on our SAIC-GMAC equity investment recorded in 2024.
Return on Average Tangible Common Equity - adjusted We use return on average tangible common equity - adjusted, a non-GAAP measure, to measure our contribution to GM's enterprise profitability and cash flows. We calculate average tangible common equity - adjusted as net income attributable to common shareholder - adjusted divided by average tangible common equity. Our return on average tangible common equity - adjusted decreased to 15.5% in 2025 from 16.5% in 2024.
The following table presents our reconciliation of return on average tangible common equity - adjusted to return on average common equity, the most directly comparable GAAP measure:
| Years Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
|
Net income attributable to common shareholder - adjusted
|
$ | 1,940 | $ | 2,062 | |||||||
| Average equity | $ | 15,672 | $ | 15,658 | |||||||
| Less: average preferred equity | (1,969) | (1,969) | |||||||||
| Average common equity | 13,703 | 13,689 | |||||||||
| Less: average goodwill and intangible assets | (1,175) | (1,177) | |||||||||
| Average tangible common equity | $ | 12,528 | $ | 12,512 | |||||||
|
Return on average common equity
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14.2 | % | 12.7 | % | |||||||
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Return on average tangible common equity - adjusted
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15.5 | % | 16.5 | % | |||||||
Our calculation of these non-GAAP measures may not be comparable to similarly titled measures of other companies due to potential differences between companies in the method of calculation. As a result, the use of these non-GAAP measures have limitations and should not be considered superior to, in isolation from, or as a substitute for, related U.S. GAAP measures. These non-GAAP measures allow investors the opportunity to measure and monitor our performance against our externally communicated targets and evaluate the investment decisions being made by management to improve our return on average tangible common equity. Management uses these measures in its financial, investment and operational decision-making processes, for internal reporting and as part of its forecasting and budgeting processes. For these reasons, we believe these non-GAAP measures are useful to our investors.
GENERAL MOTORS FINANCIAL COMPANY, INC.
Forward-Looking Statements
This report 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 (SEC), including this Annual Report on Form 10-K for the year ended December 31, 2025. It is advisable not to place undue reliance on our 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.
The following factors are among those that may cause actual results to differ materially from historical results or from the forward-looking statements:
•GM's ability to produce and sell new vehicles that we finance in the markets we serve;
•uncertainty regarding the impact of tariffs on the automotive industry, GM's business, and the general economy, including the financial health of our borrowers;
•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, operational or financing 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 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, accounting pronouncements, court decisions, legal proceedings, governmental investigations and other proceedings;
•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, including risks from our hedging activities;
•our joint ventures in China, which we cannot operate solely for our benefit and over which we have limited control;
•our ability to attract and retain qualified employees;
•pandemics, epidemics, disease outbreaks and other public health crises;
•our ability to secure private data, proprietary information, manage risks related to security breaches, cyberattacks and other disruptions to networks and systems owned or maintained by us or third parties 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.;
•changes in tax regulations and earnings forecasts could prevent full utilization of available tax incentives and tax credits;
•changes in local, regional, national or international economic, social or political conditions; and
•impact and uncertainties related to climate-related events and climate change legislation.
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. For a further discussion of these and other risks and uncertainties, refer to Part I, Item 1A. Risk Factors.
GENERAL MOTORS FINANCIAL COMPANY, INC.
General Motors Financial Company Inc. published this content on January 27, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on January 27, 2026 at 21:12 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]