The profitability and financial condition of our operations are dependent upon the operations of our parent, GM.
Our operations are heavily reliant on automotive dealers, and our profitability could be adversely affected by a change in dealers’ relationships with us or in their financial condition.
Our ability to continue to fund our business and service our debt is dependent on a number of financing sources and requires a significant amount of cash.
Our substantial indebtedness could adversely affect our financial health and prevent us from fulfilling our obligations under existing indebtedness.
Defaults and prepayments on loans and leases purchased or originated by us could adversely affect our operations.
We operate in a highly competitive industry, and competitive pressures could have a significant negative effect on our pricing, market share and operating results.
Compliance with laws and regulations can significantly increase our costs and affect how we do business.
We could be materially adversely affected by significant legal and regulatory proceedings.
Our profitability is dependent upon retail demand for automobiles and related automobile financing and the ability of customers to repay loans and leases, and our business may be negatively affected during times of low automobile sales, fluctuating wholesale prices and lease residual values, and high unemployment.
Our hedging strategies may not be successful in minimizing risks from unfavorable changes in interest rates and foreign currency exchange rates.
We do not control the operations of our investments in joint ventures, and we are subject to the risks of operating in China.
We may incur additional tax expense or become subject to additional tax exposure.
Changes in the method pursuant to which the LIBOR and other benchmark rates are determined could adversely impact our business and results of operations.
Security breaches and other disruptions to information technology systems and networks owned or maintained by us, or third-party vendors or suppliers on our behalf, could interfere with our operations and could compromise the confidentiality of private customer data or our proprietary information.
Our enterprise data practices, including the collection, use, sharing, and security of the Personal Identifiable Information of our customers or employees are subject to increasingly complex, restrictive, and punitive regulations in all key market regions.
Our operations outside the U.S. expose us to additional risks.
This section discusses our results of operations for the three months ended March 31, 2020 as compared to the three months ended March 31, 2019.
Return on average common equity is widely used to measure earnings in relation to invested capital. Our return on average common equity decreased to 12.7% for the four quarters ended March 31, 2020 from 13.8% for the four quarters ended March 31, 2019 primarily due to a higher effective tax rate as well as an increase in average common equity.