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EX-32.1 - EXHIBIT 32.1 OFFICERS' CERTIFICATIONS OF PERIODIC REPORT PURSUANT TO SECTION 906 - General Motors Financial Company, Inc.gmfexhibit321officerscerti.htm
EX-31.1 - EXHIBIT 31.1 OFFICERS' CERTIFICATIONS OF PERIODIC REPORT PURSUANT TO SECTION 302 - General Motors Financial Company, Inc.gmfexhibit311officerscerti.htm
EX-3.1 - EXHIBIT 3.1 CERTIFICATE OF AMENDMENT TO THE AMENDED AND RESTATED CERTIFICATE OF - General Motors Financial Company, Inc.gmfexhibit31certificateofa.htm
EX-2.1 - EXHIBIT 2.1 MASTER AGREEMENT DATED AS OF MARCH 5, 2017 BETWEEN GENERAL MOTORS HO - General Motors Financial Company, Inc.gmfexhibit21masteragreemen.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________________________________________ 
FORM 10-Q
(Mark One)
ý
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2017
OR
o
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________________ to ________________
Commission file number 1-10667
______________________________________________ 
General Motors Financial Company, Inc.
(Exact name of registrant as specified in its charter)
State of Texas
 
75-2291093
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
801 Cherry Street, Suite 3500, Fort Worth, Texas 76102
(Address of principal executive offices, including Zip Code)
(817) 302-7000
(Registrant’s telephone number, including area code) 
Not applicable
(Former name, former address and former fiscal year, if changed since last report) 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  Q    No  o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  Q    No  o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
o
Accelerated filer
o
Non-accelerated filer (Do not check if a smaller reporting company)
ý
Smaller reporting company
o
Emerging growth company
o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. Yes o No o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  o    No  Q 
As of April 27, 2017, there were 505 shares of the registrant’s common stock, par value $1.00 per share, outstanding. All of the registrant’s common stock is owned by General Motors Holdings LLC.





INDEX
 
 
 
Page
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
       PART II
 
 


GENERAL MOTORS FINANCIAL COMPANY, INC.

PART I
Item 1. Condensed Consolidated Financial Statements

CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in millions) (Unaudited)
 
March 31, 2017
 
December 31, 2016
ASSETS
 
 
 
Cash and cash equivalents
$
2,694

 
$
3,201

Finance receivables, net (Note 4; Note 8 VIEs)
46,910

 
43,190

Leased vehicles, net (Note 5; Note 8 VIEs)
37,302

 
34,526

Goodwill
1,200

 
1,196

Equity in net assets of non-consolidated affiliates (Note 6)
998

 
944

Property and equipment, net of accumulated depreciation of $147 and $127
291

 
279

Deferred income taxes
284

 
274

Related party receivables (Note 3)
617

 
510

Other assets (Note 8 VIEs)
4,244

 
3,645

Total assets
$
94,540

 
$
87,765

LIABILITIES AND SHAREHOLDER'S EQUITY
 
 
 
Liabilities
 
 
 
Secured debt (Note 7; Note 8 VIEs)
$
42,579

 
$
39,270

Unsecured debt (Note 7)
37,370

 
34,606

Accounts payable and accrued expenses
1,501

 
1,474

Deferred income
2,588

 
2,365

Deferred income taxes
259

 
220

Related party payables (Note 3)
448

 
400

Other liabilities
803

 
737

Total liabilities
85,548

 
79,072

Commitments and contingencies (Note 10)

 

Shareholder's equity
 
 
 
Common stock, $1.00 par value per share, 1,000 shares authorized and 505 shares issued

 

Additional paid-in capital
6,512

 
6,505

Accumulated other comprehensive loss (Note 13)
(1,148
)
 
(1,238
)
Retained earnings
3,628

 
3,426

Total shareholder's equity
8,992

 
8,693

Total liabilities and shareholder's equity
$
94,540

 
$
87,765

The accompanying notes are an integral part of these condensed consolidated financial statements.

1

GENERAL MOTORS FINANCIAL COMPANY, INC.


CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(In millions) (Unaudited)
 
Three Months Ended March 31,
 
2017
 
2016
Revenue
 
 
 
Finance charge income
$
862

 
$
818

Leased vehicle income
1,942

 
1,184

Other income
75

 
73

Total revenue
2,879

 
2,075

Costs and expenses
 
 
 
Salaries and benefits
229

 
193

Other operating expenses
163

 
141

Total operating expenses
392

 
334

Leased vehicle expenses
1,438

 
893

Provision for loan losses
217

 
196

Interest expense
619

 
463

Total costs and expenses
2,666

 
1,886

Equity income (Note 6)
47

 
36

Income before income taxes
260

 
225

Income tax provision (Note 11)
58

 
61

Net income
202

 
164

Other comprehensive income, net of tax
 
 
 
Unrealized (loss) income on cash flow hedges, net of income tax benefit of $3
(4
)
 

Defined benefit plans, net of income tax

 
(1
)
Foreign currency translation adjustment, net of income tax expense of $4 and $0
94

 
153

Other comprehensive income, net of tax
90

 
152

Comprehensive income
$
292

 
$
316

The accompanying notes are an integral part of these condensed consolidated financial statements.


2

GENERAL MOTORS FINANCIAL COMPANY, INC.


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions) (Unaudited)
 
Three Months Ended March 31,
 
2017
 
2016
Net cash provided by operating activities
$
1,416

 
$
1,158

Cash flows from investing activities
 
 
 
Purchases of retail finance receivables, net
(6,401
)
 
(4,165
)
Principal collections and recoveries on retail finance receivables
3,595

 
3,271

Net funding of commercial finance receivables
(541
)
 
(1,024
)
Purchases of leased vehicles, net
(4,794
)
 
(5,158
)
Proceeds from termination of leased vehicles
1,082

 
481

Purchases of property and equipment
(24
)
 
(20
)
Other investing activities

 
1

Net cash used in investing activities
(7,083
)
 
(6,614
)
Cash flows from financing activities
 
 
 
Net change in debt (original maturities less than three months)
(268
)
 
757

Borrowings and issuance of secured debt
8,361

 
7,054

Payments on secured debt
(4,805
)
 
(5,251
)
Borrowings and issuance of unsecured debt
2,968

 
3,131

Payments on unsecured debt
(574
)
 
(241
)
Debt issuance costs
(27
)
 
(26
)
Net cash provided by financing activities
5,655

 
5,424

Net decrease in cash, cash equivalents and restricted cash
(12
)
 
(32
)
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash
37

 
58

Cash, cash equivalents and restricted cash at beginning of period
5,302

 
5,002

Cash, cash equivalents and restricted cash at end of period
$
5,327

 
$
5,028

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheet:
 
March 31, 2017
Cash and cash equivalents
$
2,694

Restricted cash included in other assets
2,633

Total
$
5,327

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

GENERAL MOTORS FINANCIAL COMPANY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Summary of Significant Accounting Policies
Basis of Presentation The condensed consolidated financial statements include our accounts and the accounts of our consolidated subsidiaries, including certain special-purpose financing entities utilized in secured financing transactions, which are considered variable interest entities (VIEs). All intercompany transactions and balances have been eliminated in consolidation.
The interim period condensed consolidated financial statements, including the notes thereto, are condensed and do not include all disclosures required by generally accepted accounting principles (GAAP) in the United States of America. These interim period condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements that are included in our Annual Report on Form 10-K filed on February 7, 2017 (Form 10-K). Except as otherwise specified, dollar amounts presented within tables are stated in millions.
The condensed consolidated financial statements at March 31, 2017, and for the three months ended March 31, 2017 and 2016, are unaudited and, in management’s opinion, include all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the results for such interim periods. The results for interim periods are not necessarily indicative of results for a full year.
Segment Information We are the wholly-owned captive finance subsidiary of General Motors Company (GM). We offer substantially similar products and services throughout many different regions, subject to local regulations and market conditions. We evaluate our business in two operating segments. The North America Segment includes our operations in the U.S. and Canada. The International Segment includes our operations in all other countries.
Note 2. Disposition of Business
On March 5, 2017, General Motors Holdings LLC, a wholly-owned subsidiary of GM and our parent, entered into a Master Agreement (the Agreement) with Peugeot, S.A. (PSA Group) pursuant to which PSA Group will acquire GM's Opel and Vauxhall businesses and certain other assets in Europe (the Opel/Vauxhall Business) and certain of our European subsidiaries and branches (European Operations, together with the Opel/Vauxhall Business, the Transferred Business).
The net consideration to be paid for our European Operations will be 0.8 times their book value at closing, which we estimate will be approximately $1 billion, denominated in Euros. The purchase price is subject to certain adjustments as provided in the Agreement. We expect to recognize a disposal loss of approximately $700 million to $800 million at closing.
The transfer of the Opel/Vauxhall Business is expected to close by the end of 2017 and the transfer of our European Operations is expected to close as soon as practicable after the receipt of the necessary antitrust, financial and other regulatory approvals, which may be after the transfer of the Opel/Vauxhall Business, but not before. The transfer of our European Operations will not occur unless the transfer of the Opel/Vauxhall Business occurs.
Note 3. Related Party Transactions
We offer loan and lease finance products through GM-franchised dealers to customers purchasing new and certain used vehicles manufactured by GM and make commercial loans directly to GM-franchised dealers and their affiliates. We also offer commercial loans to dealers that are consolidated by GM and those balances are included in our finance receivables, net.
Under subvention programs, GM makes cash payments to us for offering incentivized rates and structures on retail loan and lease finance products. In addition, GM makes payments to us to cover certain interest payments on commercial loans. We also provide funding under lines of credit to GM.
In March 2017, we executed an agreement to purchase certain program vehicles from Maven Drive LLC (Maven), a wholly-owned subsidiary of GM. We simultaneously leased these vehicles to Maven for use in their ride-sharing arrangements. We account for these leases as direct-finance leases, which are included in our finance receivables, net.

4

GENERAL MOTORS FINANCIAL COMPANY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


We have related party payables due to GM, primarily for commercial finance receivables originated but not yet funded. These payables typically settle within 30 days. The following tables present related party transactions:
Balance Sheet Data
March 31, 2017
 
December 31, 2016
Commercial finance receivables, net due from dealers consolidated by GM(a)
$
339

 
$
401

Direct-finance lease receivables from Maven(a)
$
128

 
$

Advances drawn on lines of credit due from GM(b)
$
145

 
$
137

Subvention receivable(c)
$
471

 
$
373

Commercial loan funding payable(d)
$
438

 
$
389

 
Three Months Ended March 31,
Income Statement Data
2017
 
2016
Interest subvention earned on retail finance receivables and leases(e)
$
111

 
$
103

Interest subvention earned on commercial finance receivables(e)
$
40

 
$
40

Leased vehicle subvention earned(f)
$
709

 
$
459

_________________
(a)
Included in finance receivables, net.
(b)
Included in related party receivables.
(c)
Included in related party receivables. We received subvention payments from GM of $1.0 billion and $1.2 billion for the three months ended March 31, 2017 and 2016.
(d)
Included in related party payables.
(e)
Included in finance charge income.
(f)
Included as a reduction to leased vehicle expenses.
Under our support agreement with GM (the Support Agreement), if our earning assets leverage ratio at the end of any calendar quarter exceeds the applicable threshold set in the Support Agreement, we may require GM to provide funding sufficient to bring our earning assets leverage ratio to within the applicable threshold. 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 from time to time. 
Additionally, the Support Agreement provides that GM will own all of our outstanding voting shares as long as we have any unsecured debt securities outstanding and that GM will use its commercially reasonable efforts to ensure that we will continue to be designated as a subsidiary borrower of up to $4.0 billion under GM’s corporate revolving credit facilities. We have the ability to borrow up to $1.0 billion under GM's three-year, $4.0 billion unsecured revolving credit facility and $3.0 billion under GM's five-year, $10.5 billion unsecured revolving credit facility, subject to available capacity. GM also agreed to certain provisions in the Support Agreement intended to ensure that we maintain adequate access to liquidity. Pursuant to these provisions, GM provided us with a $1.0 billion junior subordinated unsecured intercompany revolving credit facility (the Junior Subordinated Revolving Credit Facility).
We are included in GM's consolidated U.S. federal income tax returns. For taxable income we recognize in any period beginning on or after October 1, 2010, we are obligated to pay GM for our share of the consolidated U.S. federal and certain state tax liabilities. Amounts owed to GM for income taxes are accrued and recorded as a related party payable.  At March 31, 2017 and December 31, 2016, there are no related party taxes payable to GM due to our taxable loss position.  

5

GENERAL MOTORS FINANCIAL COMPANY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


Note 4. Finance Receivables
 
March 31, 2017
 
December 31, 2016

Retail finance receivables
 
 
 
Retail finance receivables, collectively evaluated for impairment, net of fees(a)
$
34,047

 
$
30,989

Retail finance receivables, individually evaluated for impairment, net of fees
1,957

 
1,921

Total retail finance receivables, net of fees(b)
36,004

 
32,910

Less: allowance for loan losses - collective
(568
)
 
(517
)
Less: allowance for loan losses - specific
(284
)
 
(276
)
Total retail finance receivables, net
35,152

 
32,117

Commercial finance receivables
 
 
 
Commercial finance receivables, collectively evaluated for impairment, net of fees
11,725

 
11,053

Commercial finance receivables, individually evaluated for impairment, net of fees
87

 
70

Total commercial finance receivables, net of fees
11,812

 
11,123

Less: allowance for loan losses - collective
(46
)
 
(43
)
Less: allowance for loan losses - specific
(8
)
 
(7
)
Total commercial finance receivables, net
11,758

 
11,073

Total finance receivables, net
$
46,910

 
$
43,190

Fair value of finance receivables
$
46,722

 
$
43,140

________________
(a) Includes $1.6 billion and $1.3 billion of direct-finance leases at March 31, 2017 and December 31, 2016.
(b) Net of unearned income, unamortized premiums and discounts, and deferred fees and costs of $199 million and $191 million at March 31, 2017 and December 31, 2016.

We estimate the fair value of retail finance receivables using observable and unobservable Level 3 inputs within a cash flow model. The inputs reflect assumptions regarding expected prepayments, deferrals, delinquencies, recoveries and charge-offs of the loans within the portfolio. The cash flow model produces an estimated amortization schedule of the finance receivables. The projected cash flows are then discounted to derive the fair value of the portfolio. Macroeconomic factors could affect the credit performance of the portfolio and, therefore, could potentially affect the assumptions used in our cash flow model. A substantial majority of our commercial finance receivables have variable interest rates. The carrying amount, a Level 2 input, is considered to be a reasonable estimate of fair value.
Retail Finance Receivables
Three Months Ended March 31,
 
2017
 
2016
Allowance for retail loan losses beginning balance
$
793

 
$
735

Provision for loan losses
213

 
197

Charge-offs
(307
)
 
(293
)
Recoveries
147

 
150

Foreign currency translation
6

 
7

Allowance for retail loan losses ending balance
$
852

 
$
796



6

GENERAL MOTORS FINANCIAL COMPANY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


Retail Credit Quality We use proprietary scoring systems in the underwriting process that measure the credit quality of the receivables using several factors, such as credit bureau information, consumer credit risk scores (e.g. FICO score or its equivalent), and contract characteristics. We also consider other factors, such as employment history, financial stability and capacity to pay. At the time of loan origination, substantially all of our International Segment customers have the equivalent of prime credit scores. In the North America Segment, while we historically focused on consumers with lower than prime credit scores, we have expanded our prime lending programs. A summary of the credit risk profile by FICO score band or equivalent scores, determined at origination, of the retail finance receivables in the North America Segment is as follows:
 
March 31, 2017
 
December 31, 2016
 
Amount
 
Percent
 
Amount
 
Percent
Prime - FICO Score 680 and greater
$
10,062

 
41.3
%
 
$
7,923

 
36.4
%
Near-prime - FICO Score 620 to 679
3,742

 
15.4

 
3,468

 
15.9

Sub-prime - FICO Score less than 620
10,550

 
43.3

 
10,395

 
47.7

Balance at end of period
$
24,354

 
100.0
%
 
$
21,786

 
100.0
%

In addition, we review the credit quality of our retail finance receivables based on customer payment activity. A retail account is considered delinquent if a substantial portion of a scheduled payment has not been received by the date such payment was contractually due. Retail finance receivables are collateralized by vehicle titles and, subject to local laws, we generally have the right to repossess the vehicle in the event the customer defaults on the payment terms of the contract. The following is a consolidated summary of the contractual amounts of delinquent retail finance receivables, which is not significantly different than the recorded investment for such receivables.
 
March 31, 2017
 
March 31, 2016
 
Total
 
Percent of Contractual Amount Due
 
Total
 
Percent of Contractual Amount Due
31 - 60 days
$
1,006

 
2.8
%
 
$
963

 
3.1
%
Greater than 60 days
441

 
1.2

 
421

 
1.4

Total finance receivables more than 30 days delinquent
1,447

 
4.0

 
1,384

 
4.5

In repossession
51

 
0.1

 
48

 
0.2

Total finance receivables more than 30 days delinquent or in repossession
$
1,498

 
4.1
%
 
$
1,432

 
4.7
%
At March 31, 2017 and December 31, 2016, the accrual of finance charge income had been suspended on retail finance receivables with contractual amounts due of $711 million and $807 million.
Impaired Retail Finance Receivables - TDRs Retail finance receivables that become classified as troubled debt restructurings (TDRs) are separately assessed for impairment. A specific allowance is estimated based on the present value of the expected future cash flows of the receivable discounted at the loan's original effective interest rate. Accounts that become classified as TDRs because of a payment deferral accrue interest at the contractual rate and an additional fee is collected (where permitted) at each time of deferral and recorded as a reduction of accrued interest. No interest or fees are forgiven on a payment deferral to a customer; therefore, there are no additional financial effects of deferred loans becoming classified as TDRs. Accounts in the U.S. in Chapter 13 bankruptcy would have already been placed on non-accrual; therefore, there are no additional financial effects from these loans becoming classified as TDRs. Finance charge income from loans classified as TDRs is accounted for in the same manner as other accruing loans. Cash collections on these loans are allocated according to the same payment hierarchy methodology applied to loans that are not classified as TDRs.

7

GENERAL MOTORS FINANCIAL COMPANY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


At March 31, 2017 and December 31, 2016, the outstanding balance of retail finance receivables in the International Segment determined to be TDRs was insignificant; therefore, the following information is presented with regard to the TDRs in the North America Segment only. The outstanding recorded investment for retail finance receivables that are considered to be TDRs and the related allowance is presented below:
 
March 31, 2017
 
December 31, 2016
Outstanding recorded investment
$
1,957

 
$
1,920

Less: allowance for loan losses
(284
)
 
(276
)
Outstanding recorded investment, net of allowance
$
1,673

 
$
1,644

Unpaid principal balance
$
1,998

 
$
1,967

Additional information about loans classified as TDRs is presented below:
 
Three Months Ended March 31,
 
2017
 
2016
Average outstanding recorded investment
$
1,939

 
$
1,636

Finance charge income recognized
$
60

 
$
51

Number of loans classified as TDRs during the period
16,474

 
14,646

Recorded investment of loans classified as TDRs during the period
$
287

 
$
254

The unpaid principal balance, net of recoveries, of loans that were charged off during the reporting period and were within 12 months of being modified as a TDR were insignificant for the three months ended March 31, 2017 and 2016.
Commercial Finance Receivables
Commercial Credit Quality We extend wholesale credit to dealers primarily in the form of approved lines of credit to purchase new vehicles as well as used vehicles. Each commercial lending request is evaluated, taking into consideration the borrower's financial condition and the underlying collateral for the loan. We use proprietary models to assign each dealer a risk rating. These models use historical performance data to identify key factors about a dealer that we consider significant in predicting a dealer's ability to meet its financial obligations. We also consider numerous other financial and qualitative factors including, but not limited to, capitalization and leverage, liquidity and cash flow, profitability and credit history. 
We regularly review our models to confirm the continued business significance and statistical predictability of the factors and update the models to incorporate new factors or other information that improves statistical predictability. In addition, we verify the existence of the assets collateralizing the receivables by physical audits of vehicle inventories, which are performed with increased frequency for higher risk dealers (i.e., Groups III, IV, V and VI). We perform periodic credit reviews of each dealership and adjust the dealership's risk rating, if necessary. Dealers in Group VI are subject to additional funding restrictions including suspension of lines of credit and liquidation of assets.
Performance of our commercial finance receivables is evaluated based on our internal dealer risk rating analysis, as payment for wholesale receivables is generally not required until the dealer has sold or leased the vehicle inventory. All receivables from the same dealer customer share the same risk rating. The following table summarizes the credit risk profile by dealer risk rating of commercial finance receivables: 
 
 
 
March 31, 2017
 
December 31, 2016
 
 
 
Amount
 
Percent
 
Amount
 
Percent
Group I
-
Dealers with superior financial metrics
$
1,664

 
14.1
%
 
$
1,596

 
14.3
%
Group II
-
Dealers with strong financial metrics
3,804

 
32.2

 
3,445

 
31.0

Group III
-
Dealers with fair financial metrics
4,171

 
35.3

 
4,039

 
36.3

Group IV
-
Dealers with weak financial metrics
1,441

 
12.2

 
1,231

 
11.1

Group V
-
Dealers warranting special mention due to potential weaknesses
548

 
4.6

 
642

 
5.8

Group VI
-
Dealers with loans classified as substandard, doubtful or impaired
184

 
1.6

 
170

 
1.5

Balance at end of period
$
11,812

 
100.0
%
 
$
11,123

 
100.0
%

8

GENERAL MOTORS FINANCIAL COMPANY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


At March 31, 2017 and December 31, 2016, substantially all of our commercial finance receivables were current with respect to payment status and none were classified as TDRs. Activity in the allowance for commercial loan losses was insignificant for the three months ended March 31, 2017 and 2016.
Note 5. Leased Vehicles
 
March 31, 2017
 
December 31, 2016
Leased vehicles
$
53,000

 
$
48,581

Manufacturer subvention
(8,372
)
 
(7,706
)
 
44,628

 
40,875

Less: accumulated depreciation
(7,326
)
 
(6,349
)
Leased vehicles, net
$
37,302

 
$
34,526

The following table summarizes minimum rental payments due to us as lessor under operating leases:
 
Years Ending December 31,
 
2017
 
2018
 
2019
 
2020
 
2021
Minimum rental payments under operating leases
$
4,654

 
$
4,878

 
$
2,494

 
$
365

 
$
13

Note 6. Equity in Net Assets of Non-consolidated Affiliates
We use the equity method to account for our equity interest in SAIC-GMAC Automotive Finance Company Limited (SAIC-GMAC), a joint venture that conducts auto finance operations in China. The income of SAIC-GMAC is not consolidated into our financial statements; rather, our proportionate share of the earnings is reflected as equity income.
There were no cash dividends received from SAIC-GMAC during the three months ended March 31, 2017. We received cash dividends from SAIC-GMAC of $27 million during the three months ended March 31, 2016. At March 31, 2017 we had undistributed earnings of $189 million related to SAIC-GMAC.
Note 7. Debt
 
March 31, 2017
 
December 31, 2016
 
Carrying Amount
 
Fair Value
 
Carrying Amount
 
Fair Value
Secured debt
 
 
 
 
 
 
 
Revolving credit facilities
$
11,865

 
$
11,866

 
$
9,817

 
$
9,812

Securitization notes payable
30,714

 
30,814

 
29,453

 
29,545

Total secured debt
$
42,579

 
$
42,680

 
$
39,270

 
$
39,357

Unsecured debt
 
 
 
 
 
 
 
Senior notes
$
31,088

 
$
32,103

 
$
28,577

 
$
29,182

Credit facilities
3,453

 
3,452

 
3,354

 
3,354

Retail customer deposits
1,913

 
1,917

 
1,895

 
1,902

Other unsecured debt
916

 
918

 
780

 
782

Total unsecured debt
$
37,370

 
$
38,390

 
$
34,606

 
$
35,220

Total Secured and Unsecured debt
$
79,949

 
$
81,070

 
$
73,876

 
$
74,577

Fair value utilizing Level 2 inputs
 
 
$
77,267

 
 
 
$
69,990

Fair value utilizing Level 3 inputs
 
 
$
3,803

 
 
 
$
4,587


The fair value of our debt measured utilizing Level 2 inputs was based on quoted market prices for identical instruments and if unavailable, quoted market prices of similar instruments. For debt that has terms of one year or less or has been priced within the last six months, the carrying amount or par value is considered to be a reasonable estimate of fair value. The fair value of our debt measured utilizing Level 3 inputs was based on the discounted future net cash flows expected to be settled using current risk-adjusted rates.

9

GENERAL MOTORS FINANCIAL COMPANY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


Secured Debt Most of the secured debt was issued by VIEs and is repayable only from proceeds related to the underlying pledged assets. Refer to Note 8 - "Variable Interest Entities" for further discussion.
During the three months ended March 31, 2017, we entered into new credit facilities or renewed credit facilities with a total net additional borrowing capacity of $182 million, and we issued securitization notes payable of $4.0 billion.
Unsecured Debt During the three months ended March 31, 2017, our top-tier holding company issued $2.5 billion in senior notes comprising:
 
Amount Issued
3.45% Senior notes due January 2022
$
1,250

4.35% Senior notes due January 2027
$
750

Floating rate senior notes due January 2022
$
500

All of these notes are guaranteed solely by AmeriCredit Financial Services, Inc. (AFSI), our primary U.S. operating subsidiary.
Subsequent to March 31, 2017, our top-tier holding company issued $3.0 billion in senior notes comprised of $1.0 billion of 2.65% notes due in April 2020, $1.25 billion of 3.95% notes due in April 2024 and $750 million of floating rate notes due in April 2020. All of these notes are guaranteed solely by AFSI.
We accept deposits from retail banking customers in Germany. Following is summarized information for our deposits at March 31, 2017 and December 31, 2016:
 
March 31, 2017
 
December 31, 2016
 
Outstanding Balance
 
Weighted Average Interest Rate
 
Outstanding Balance
 
Weighted Average Interest Rate
Overnight deposits
$
788

 
0.40
%
 
$
799

 
0.50
%
Term deposits - 12 months
417

 
0.84
%
 
423

 
0.93
%
Term deposits - 24 months
298

 
1.24
%
 
281

 
1.26
%
Term deposits - 36 months
410

 
1.47
%
 
392

 
1.48
%
Total deposits
$
1,913

 
0.86
%
 
$
1,895

 
0.91
%
Compliance with Debt Covenants Several of our revolving credit facilities require compliance with certain financial and operational covenants as well as regular reporting to lenders, including providing certain subsidiary financial statements. Certain of our secured debt agreements also contain various covenants, including maintaining portfolio performance ratios as well as limits on deferment levels. Our unsecured senior notes contain covenants including limitations on our ability to incur certain liens. At March 31, 2017, we were in compliance with these debt covenants.
Note 8. Variable Interest Entities
Securitizations and Credit Facilities
The following table summarizes the assets and liabilities related to our consolidated VIEs:
 
March 31, 2017
 
December 31, 2016
Restricted cash(a)
$
2,598

 
$
2,067

Finance receivables, net of fees
$
30,370

 
$
29,661

Lease related assets
$
23,154

 
$
19,341

Secured debt
$
41,671

 
$
38,244

_______________
(a) Included in other assets in the condensed consolidated balance sheets.
These amounts are related to securitization and credit facilities held by consolidated VIEs. Our continuing involvement with these VIEs consists of servicing assets held by the entities and holding residual interests in the entities. We have determined that we are the primary beneficiary of each VIE because we hold both (i) the power to direct the activities of the VIEs that most significantly impact the VIEs' economic performance and (ii) the obligation to absorb losses from and the right to receive benefits of the VIEs that could potentially be significant to the VIEs. We are not required, and do not currently intend, to provide any

10

GENERAL MOTORS FINANCIAL COMPANY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


additional financial support to these VIEs. Liabilities recognized as a result of consolidating these entities generally do not represent claims against us or our other subsidiaries and assets recognized generally are for the benefit of these entities operations and cannot be used to satisfy our or our subsidiaries obligations.
Other VIEs We consolidate certain operating entities that provide auto finance and financial services, which we do not control through a majority voting interest. We manage these entities and maintain a controlling financial interest in them and are exposed to the risks of ownership through contractual arrangements. The majority voting interests in these entities are indirectly wholly-owned by our parent, GM. The amounts presented below are stated prior to intercompany eliminations and include amounts related to securitizations and credit facilities held by consolidated VIEs. The following table summarizes the assets and liabilities of these VIEs:
 
March 31, 2017
 
December 31, 2016
Assets(a)
$
4,312

 
$
4,251

Liabilities(b)
$
3,604

 
$
3,559

_________________
(a)
Comprised primarily of finance receivables, net of $3.6 billion and $3.5 billion at March 31, 2017 and December 31, 2016.
(b)
Comprised primarily of debt of $3.0 billion and $3.0 billion at March 31, 2017 and December 31, 2016.
The following table summarizes the revenue and net income of these VIEs:
 
Three Months Ended March 31,
 
2017
 
2016
Total revenue
$
51

 
$
47

Net income
$
6

 
$
7


11

GENERAL MOTORS FINANCIAL COMPANY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


Note 9. Derivative Financial Instruments and Hedging Activities
 
 
 
March 31, 2017
 
December 31, 2016
 
Level
 
Notional
 
Fair Value
 
Notional
 
Fair Value
Derivatives designated as hedges
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
 
Fair value hedges
 
 
 
 
 
 
 
 
 
Interest rate swaps
2
 
$

 
$

 
$

 
$

Cash flow hedges
 
 
 
 
 
 
 
 
 
Interest rate swaps
2,3
 
3,597

 
16

 
3,542

 
12

Foreign currency swaps
2
 

 

 

 

Total assets(a)
 
 
$
3,597

 
$
16

 
$
3,542

 
$
12

Liabilities
 
 
 
 
 
 
 
 
 
Fair value hedges
 
 
 
 
 
 
 
 
 
Interest rate swaps
2
 
$
8,950

 
$
317

 
$
7,700

 
$
276

Cash flow hedges
 
 
 
 
 
 
 
 
 
Interest rate swaps
2,3
 
717

 
1

 
1,280

 
3

Foreign currency swaps
2
 
802

 
24

 
791

 
33

Total liabilities(b)
 
 
$
10,469

 
$
342

 
$
9,771

 
$
312

Derivatives not designated as hedges
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
 
Interest rate swaps
2,3
 
$
15,455

 
$
74

 
$
8,667

 
$
55

Interest rate caps and floors
2
 
13,369

 
33

 
10,469

 
26

Foreign currency swaps
2
 
617

 
65

 
1,576

 
78

Total assets(a)
 
 
$
29,441

 
$
172

 
$
20,712

 
$
159

Liabilities
 
 
 
 
 
 
 
 
 
Interest rate swaps
2,3
 
$
14,225

 
$
55

 
$
8,337

 
$
36

Interest rate caps and floors
2
 
15,101

 
33

 
12,146

 
26

Foreign currency swaps
2
 
1,412

 
15

 
119

 
2

Total liabilities(b)
 
 
$
30,738

 
$
103

 
$
20,602

 
$
64

 _________________
(a)
Derivative assets are included in other assets in the condensed consolidated balance sheets.
(b)
Derivative liabilities are included in other liabilities in the condensed consolidated balance sheets. Amounts accrued for interest payments in a net receivable position are included in other assets in the condensed consolidated balance sheets.

The fair value for Level 2 instruments was derived using the market approach based on observable market inputs including quoted prices of similar instruments and foreign exchange and interest rate forward curves. The fair value for Level 3 instruments was derived using the income approach based on a discounted cash flow model, in which expected cash flows are discounted using current risk-adjusted rates. The activity for interest rate swap agreements measured at fair value on a recurring basis using significant unobservable inputs (Level 3) was insignificant for the three months ended March 31, 2017 and 2016.

12

GENERAL MOTORS FINANCIAL COMPANY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


 
Income (Losses) Recognized In Income
 
Three Months Ended March 31,
 
2017
 
2016
Fair value hedges
 
 
 
Interest rate contracts(a)(b)
$
11

 
$
(6
)
Cash flow hedges
 
 
 
Interest rate contracts(a)
(2
)
 

Foreign currency contracts(c)
6

 

Derivatives not designated as hedges
 
 
 
Interest rate contracts(a)
(5
)
 

Foreign currency derivatives(c)(d)
(22
)
 
69

Total
$
(12
)
 
$
63

 
Gains (Losses) Recognized In
Accumulated Other Comprehensive Loss
 
Three Months Ended March 31,
 
2017
 
2016
Cash flow hedges
 
 
 
Interest rate contracts
$
2

 
$

Foreign currency contracts
(3
)
 

Total
$
(1
)
 
$

 
Gains (Losses) Reclassified From
Accumulated Other Comprehensive Loss Into Income
 
Three Months Ended March 31,
 
2017
 
2016
Cash flow hedges
 
 
 
Interest rate contracts
$
1

 
$

Foreign currency contracts
(4
)
 

Total
$
(3
)
 
$

_________________
(a)
Recognized in earnings as interest expense.
(b)
Includes hedge ineffectiveness which reflects the net change in the fair value of interest rate contracts of $26 million and $2 million offset by the change in fair value of hedged debt attributable to the hedged risk of $27 million and $4 million for the three months ended March 31, 2017 and 2016.
(c)
Recognized in earnings as other operating expenses and interest expense.
(d)
Activity is partially offset by translation activity (included in other operating expenses) related to foreign currency-denominated loans.
Note 10. Commitments and Contingencies
Guarantees of Indebtedness The payments of principal and interest on senior notes issued by our top-tier holding company, our primary Canadian operating subsidiary and a European subsidiary are guaranteed by our primary U.S. operating subsidiary, AFSI. At March 31, 2017 and December 31, 2016, the par value of these senior notes was $31.5 billion and $29.0 billion. Refer to Note 15 - "Guarantor Condensed Consolidating Financial Statements" for further discussion.
Legal Proceedings As a retail finance company, we are subject to various customer claims and litigation seeking damages and statutory penalties, based upon, among other things, usury, disclosure inaccuracies, wrongful repossession, violations of bankruptcy stay provisions, certificate of title disputes, fraud, breach of contract and discriminatory treatment of credit applicants. Some litigation against us could take the form of class action complaints by customers and certain legal actions include claims for substantial compensatory and/or punitive damages or claims for indeterminate amounts of damages. We establish reserves for legal claims when payments associated with the claims become probable and the payments can be reasonably estimated. Given the inherent difficulty of predicting the outcome of litigation and regulatory matters, it is generally very difficult to predict what

13

GENERAL MOTORS FINANCIAL COMPANY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


the eventual outcome will be, and when the matter will be resolved. The actual costs of resolving legal claims may be higher or lower than any amounts reserved for the claims. At March 31, 2017, we estimated our reasonably possible legal exposure for unfavorable outcomes of up to $112 million, and have accrued $37 million.
In July 2014, we were served with a subpoena by the U.S. Department of Justice directing us to produce certain documents relating to our and our subsidiaries’ and affiliates’ origination and securitization of sub-prime automobile loans since 2007 in connection with an investigation by the U.S. Department of Justice in contemplation of a civil proceeding for potential violations of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989. Among other matters, the subpoena requests information relating to the underwriting criteria used to originate these automobile loans and the representations and warranties relating to those underwriting criteria that were made in connection with the securitization of the automobile loans. We have subsequently been served with additional investigative subpoenas to produce documents from state attorneys general and other governmental offices relating to our automobile loan and lease business and securitization of automobile loans and leases. These investigations are ongoing and could in the future result in the imposition of damages, fines or civil or criminal claims and/or penalties. No assurance can be given that the ultimate outcome of the investigations or any resulting proceedings would not materially and adversely affect us or any of our subsidiaries and affiliates.
Other Administrative Tax Matters We accrue non-income tax liabilities for contingencies when management believes that a loss is probable and the amounts can be reasonably estimated, while contingent gains are recognized only when realized. In the event any losses are sustained in excess of accruals, they will be charged against income at that time.
In evaluating indirect tax matters, we take into consideration factors such as our historical experience with matters of similar nature, specific facts and circumstances, and the likelihood of prevailing. We reevaluate and update our accruals as matters progress over time. Where there is a reasonable possibility that losses exceeding amounts already recognized may be incurred, our estimate of the additional range of loss is up to $37 million.
Note 11. Income Taxes
For interim income tax reporting we estimate our annual effective tax rate and apply it to our year-to-date ordinary income. Tax jurisdictions with a projected or year-to-date loss for which a tax benefit cannot be realized are excluded from the annualized effective tax rate. The tax effects of unusual or infrequently occurring items, including changes in judgment about valuation allowances and effects of changes in tax laws or rates, are reported in the interim period in which they occur.
During the three months ended March 31, 2017 and 2016, income tax expense of $58 million and $61 million primarily resulted from tax expense attributable to entities included in our effective tax rate calculation. The decrease in tax expense is due primarily to an increase in U.S. tax credits.
We are included in GM’s consolidated U.S. federal income tax return and for certain states’ income tax returns. Net operating losses and certain tax credits generated by us have been utilized by GM; however, income tax expense and deferred tax balances are presented in these financial statements as if we filed our own tax returns in each jurisdiction.
Note 12. Segment Reporting

We offer substantially similar products and services throughout many different regions, subject to local regulations and market conditions. We evaluate our business in two operating segments: the North America Segment and the International Segment. The North America Segment includes our operations in the U.S. and Canada. The International Segment includes our operations in all other countries. Our chief operating decision maker evaluates the operating results and performance of our business based on these operating segments. The management of each segment is responsible for executing our strategies.


14

GENERAL MOTORS FINANCIAL COMPANY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


For segment reporting purposes only, interest expense related to the senior notes has been allocated based on targeted leverage for each segment. Interest expense in excess of the targeted overall leverage is reflected in the "Corporate" column below. In addition, the interest income on intercompany loans provided to the international operations is presented in the "Corporate" column as revenue. Key operating data for our operating segments were as follows:
 
Three Months Ended March 31, 2017
 
North
America
 
International
 
Corporate
 
Eliminations
 
Total
Total revenue
$
2,474

 
$
405

 
$

 
$

 
$
2,879

Operating expenses
248

 
144

 

 

 
392

Leased vehicle expenses
1,426

 
12

 

 

 
1,438

Provision for loan losses
187

 
30

 

 

 
217

Interest expense
455

 
164

 

 

 
619

Equity income

 
47

 

 

 
47

Income before income taxes
$
158

 
$
102

 
$

 
$

 
$
260

 
Three Months Ended March 31, 2016
 
North
America
 
International
 
Corporate
 
Eliminations
 
Total
Total revenue
$
1,688

 
$
387

 
$
(1
)
 
$
1

 
$
2,075

Operating expenses
201

 
133

 

 

 
334

Leased vehicle expenses
888

 
5

 

 

 
893

Provision for loan losses
177

 
19

 

 

 
196

Interest expense
305

 
157

 

 
1

 
463

Equity income

 
36

 

 

 
36

Income (loss) before income taxes
$
117

 
$
109

 
$
(1
)
 
$

 
$
225

 
March 31, 2017
 
December 31, 2016
 
North
America
 
International
 
Total
 
North
America
 
International
 
Total
Finance receivables, net
$
30,618

 
$
16,292

 
$
46,910

 
$
27,617

 
$
15,573

 
$
43,190

Leased vehicles, net
$
37,018

 
$
284

 
$
37,302

 
$
34,284

 
$
242

 
$
34,526

Total assets
$
74,793

 
$
19,747

 
$
94,540

 
$
68,656

 
$
19,109

 
$
87,765


15

GENERAL MOTORS FINANCIAL COMPANY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


Note 13. Accumulated Other Comprehensive Loss
 
Three Months Ended March 31,
 
2017
 
2016
Unrealized gain on cash flow hedge
 
 
 
Beginning balance
$
17

 
$

Change in value of cash flow hedge, net of tax
(4
)
 

Ending balance
13

 

Defined benefit plans
 
 
 
Beginning balance
(20
)
 
(13
)
Unrealized gain (loss) on subsidiary pension, net of tax

 
(1
)
Ending balance
(20
)
 
(14
)
Foreign currency translation adjustment
 
 
 
Beginning balance
(1,235
)
 
(1,091
)
Translation gain, net of tax
94

 
153

Ending balance
(1,141
)
 
(938
)
Total accumulated other comprehensive loss
$
(1,148
)
 
$
(952
)
Note 14. Regulatory Capital
We are required to comply with a wide variety of laws and regulations. Our International Segment includes the operations of certain stand-alone entities that operate in local markets as either banks or regulated finance companies that are subject to regulatory restrictions. These regulatory restrictions, among other things, require that these entities meet certain minimum capital requirements and may restrict dividend distributions and ownership of certain assets. We were in compliance with all regulatory capital requirements as most recently reported.
Total assets of our regulated international banks and finance companies were approximately $13.1 billion and $12.6 billion at March 31, 2017 and December 31, 2016.
Note 15. Guarantor Condensed Consolidating Financial Statements
The payment of principal and interest on senior notes issued by our top-tier holding company is currently guaranteed solely by AFSI (the Guarantor) and none of our other subsidiaries (the Non-Guarantor Subsidiaries). The Guarantor is a 100% owned consolidated subsidiary and is unconditionally liable for the obligations represented by the senior notes.  The Guarantor’s guarantee may be released only upon customary circumstances, the terms of which vary by issuance.  Customary circumstances include the sale or disposition of all of the Guarantor’s assets or capital stock, the achievement of investment grade rating of the senior notes and legal or covenant defeasance.
The condensed consolidating financial statements present consolidating financial data for (i) General Motors Financial Company, Inc. (on a parent-only basis), (ii) the Guarantor, (iii) the combined Non-Guarantor Subsidiaries and (iv) the parent company and our subsidiaries on a consolidated basis at March 31, 2017 and December 31, 2016, and for the three months ended March 31, 2017 and 2016 (after the elimination of intercompany balances and transactions).
Investments in subsidiaries are accounted for by the parent company using the equity method for purposes of this presentation. Results of operations of subsidiaries are therefore reflected in the parent company's investment accounts and earnings. The principal elimination entries set forth below eliminate investments in subsidiaries and intercompany balances and transactions.




16

GENERAL MOTORS FINANCIAL COMPANY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


CONDENSED CONSOLIDATING BALANCE SHEET
March 31, 2017
(Unaudited)
 
General
Motors
Financial
Company,
Inc.
 
Guarantor
 
Non-
Guarantors
 
Eliminations
 
Consolidated
ASSETS
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$

 
$
2,040

 
$
654

 
$

 
$
2,694

Finance receivables, net

 
7,516

 
39,394

 

 
46,910

Leased vehicles, net

 

 
37,302

 

 
37,302

Goodwill
1,095

 

 
105

 

 
1,200

Equity in net assets of non-consolidated affiliates

 

 
998

 

 
998

Property and equipment, net

 
163

 
128

 

 
291

Deferred income taxes
613

 
75

 
284

 
(688
)
 
284

Related party receivables

 
73

 
544

 

 
617

Other assets
3

 
746

 
3,743

 
(248
)
 
4,244

Due from affiliates
26,778

 
15,992

 

 
(42,770
)
 

Investment in affiliates
9,401

 
5,971

 

 
(15,372
)
 

Total assets
$
37,890

 
$
32,576

 
$
83,152

 
$
(59,078
)
 
$
94,540

LIABILITIES AND SHAREHOLDER'S EQUITY
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
Secured debt
$

 
$

 
$
42,827

 
$
(248
)
 
$
42,579

Unsecured debt
28,573

 

 
8,797

 

 
37,370

Accounts payable and accrued expenses
261

 
330

 
910

 

 
1,501

Deferred income

 

 
2,588

 

 
2,588

Deferred income taxes

 

 
947

 
(688
)
 
259

Related party payables
1

 

 
447

 

 
448

Other liabilities
63

 
476

 
264

 

 
803

Due to affiliates

 
25,977

 
16,793

 
(42,770
)
 

Total liabilities
28,898

 
26,783

 
73,573

 
(43,706
)
 
85,548

Shareholder's equity
 
 
 
 
 
 
 
 
 
Common stock

 

 
698

 
(698
)
 

Additional paid-in capital
6,512

 
79

 
4,652

 
(4,731
)
 
6,512

Accumulated other comprehensive loss
(1,148
)
 
(157
)
 
(1,123
)
 
1,280

 
(1,148
)
Retained earnings
3,628

 
5,871

 
5,352

 
(11,223
)
 
3,628

Total shareholder's equity
8,992

 
5,793

 
9,579

 
(15,372
)
 
8,992

Total liabilities and shareholder's equity
$
37,890

 
$
32,576

 
$
83,152

 
$
(59,078
)
 
$
94,540














17

GENERAL MOTORS FINANCIAL COMPANY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


CONDENSED CONSOLIDATING BALANCE SHEET
December 31, 2016
(Unaudited)
 
General
Motors
Financial
Company,
Inc.
 
Guarantor
 
Non-
Guarantors
 
Eliminations
 
Consolidated
ASSETS
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$

 
$
2,284

 
$
917

 
$

 
$
3,201

Finance receivables, net

 
4,969

 
38,221

 

 
43,190

Leased vehicles, net

 

 
34,526

 

 
34,526

Goodwill
1,095

 

 
101

 

 
1,196

Equity in net assets of non-consolidated affiliates

 

 
944

 

 
944

Property and equipment, net

 
152

 
127

 

 
279

Deferred income taxes
502

 
89

 
274

 
(591
)
 
274

Related party receivables

 
25

 
485

 

 
510

Other assets
4

 
643

 
3,167

 
(169
)
 
3,645

Due from affiliates
24,548

 
16,065

 

 
(40,613
)
 

Investment in affiliates
8,986

 
6,445

 

 
(15,431
)
 

Total assets
$
35,135

 
$
30,672

 
$
78,762

 
$
(56,804
)
 
$
87,765

LIABILITIES AND SHAREHOLDER'S EQUITY
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
Secured debt
$

 
$

 
$
39,439

 
$
(169
)
 
$
39,270

Unsecured debt
26,076

 

 
8,530

 

 
34,606

Accounts payable and accrued expenses
302

 
273

 
899

 

 
1,474

Deferred income

 

 
2,365

 

 
2,365

Deferred income taxes

 

 
811

 
(591
)
 
220

Related party payables
1

 

 
399

 

 
400

Other liabilities
63

 
417

 
257

 

 
737

Due to affiliates

 
24,437

 
16,176

 
(40,613
)
 

Total liabilities
26,442

 
25,127

 
68,876

 
(41,373
)
 
79,072

Shareholder's equity
 
 
 
 
 
 
 
 
 
Common stock

 

 
698

 
(698
)
 

Additional paid-in capital
6,505

 
79

 
5,345

 
(5,424
)
 
6,505

Accumulated other comprehensive loss
(1,238
)
 
(161
)
 
(1,223
)
 
1,384

 
(1,238
)
Retained earnings
3,426

 
5,627

 
5,066

 
(10,693
)
 
3,426

Total shareholder's equity
8,693

 
5,545

 
9,886

 
(15,431
)
 
8,693

Total liabilities and shareholder's equity
$
35,135

 
$
30,672

 
$
78,762

 
$
(56,804
)
 
$
87,765








18

GENERAL MOTORS FINANCIAL COMPANY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


CONDENSED CONSOLIDATING STATEMENT OF INCOME
Three Months Ended March 31, 2017
(Unaudited)
 
General
Motors
Financial
Company,
Inc.
 
Guarantor
 
Non-
Guarantors
 
Eliminations
 
Consolidated
Revenue
 
 
 
 
 
 
 
 
 
Finance charge income
$

 
$
95

 
$
767

 
$

 
$
862

Leased vehicle income

 

 
1,942

 

 
1,942

Other income

 
273

 
1

 
(199
)
 
75

Total revenue

 
368

 
2,710

 
(199
)
 
2,879

Costs and expenses
 
 
 
 
 
 
 
 
 
Salaries and benefits

 
163

 
66

 

 
229

Other operating expenses
7

 
44

 
222

 
(110
)
 
163

Total operating expenses
7

 
207

 
288

 
(110
)
 
392

Leased vehicle expenses

 

 
1,438

 

 
1,438

Provision for loan losses

 
73

 
144

 

 
217

Interest expense
235

 
33

 
440

 
(89
)
 
619

Total costs and expenses
242

 
313

 
2,310

 
(199
)
 
2,666

Equity income
315

 
215

 
47

 
(530
)
 
47

Income before income taxes
73

 
270

 
447

 
(530
)
 
260

Income tax (benefit) provision
(129
)
 
26

 
161

 

 
58

Net income
$
202

 
$
244

 
$
286

 
$
(530
)
 
$
202

 
 
 
 
 
 
 
 
 
 
Comprehensive income
$
292

 
$
248

 
$
386

 
$
(634
)
 
$
292




19

GENERAL MOTORS FINANCIAL COMPANY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


CONDENSED CONSOLIDATING STATEMENT OF INCOME
Three Months Ended March 31, 2016
(Unaudited)
 
General
Motors
Financial
Company,
Inc.
 
Guarantor
 
Non-
Guarantors
 
Eliminations
 
Consolidated
Revenue
 
 
 
 
 
 
 
 
 
Finance charge income
$

 
$
99

 
$
719

 
$

 
$
818

Leased vehicle income

 

 
1,184

 

 
1,184

Other income
(1
)
 
205

 
15

 
(146
)
 
73
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