Attached files

file filename
EX-32.1 - EX-32.1 OFFICERS' CERTIFICATIONS OF PERIODIC REPORT PURSUANT TO SECTION 906 - General Motors Financial Company, Inc.gmfexhibit321officerscerti.htm
EX-31.1 - EX-31.1 OFFICERS' CERTIFICATIONS OF PERIODIC REPORT PURSUANT TO SECTION 302 - General Motors Financial Company, Inc.gmfexhibit311officerscerti.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, 2018
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. 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 25, 2018, there were 5,050,000 shares of the registrant’s common stock, par value $0.0001 per share, outstanding. All of the registrant’s common stock is owned by General Motors Holdings LLC, a wholly-owned subsidiary of General Motors Company.



INDEX
 
 
Page
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
       PART II
 
 


GENERAL MOTORS FINANCIAL COMPANY, INC.

PART I
Item 1. Condensed Consolidated Financial Statements
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except per share amounts) (Unaudited)
 
March 31, 2018
 
December 31, 2017
ASSETS
 
 
 
Cash and cash equivalents
$
4,178

 
$
4,265

Finance receivables, net (Note 3; Note 7 VIEs)
43,773

 
42,172

Leased vehicles, net (Note 4; Note 7 VIEs)
43,444

 
42,882

Goodwill
1,198

 
1,197

Equity in net assets of non-consolidated affiliate (Note 5)
1,281

 
1,187

Related party receivables (Note 2)
659

 
309

Other assets (Note 7 VIEs)
6,489

 
5,003

Total assets
$
101,022

 
$
97,015

LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
 
Liabilities
 
 
 
Secured debt (Note 6; Note 7 VIEs)
$
39,441

 
$
39,887

Unsecured debt (Note 6)
44,079

 
40,830

Deferred income
3,336

 
3,221

Related party payables (Note 2)
132

 
92

Other liabilities
3,286

 
2,691

Total liabilities
90,274

 
86,721

Commitments and contingencies (Note 9)

 

Shareholders' equity (Note 10)
 
 
 
Common stock, $0.0001 par value per share

 

Preferred stock, $0.01 par value per share

 

Additional paid-in capital
7,541

 
7,525

Accumulated other comprehensive loss
(708
)
 
(768
)
Retained earnings
3,915

 
3,537

Total shareholders' equity
10,748

 
10,294

Total liabilities and shareholders' equity
$
101,022

 
$
97,015

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

1

GENERAL MOTORS FINANCIAL COMPANY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In millions) (Unaudited)
 
Three Months Ended March 31,
 
2018
 
2017
Revenue
 
 
 
Finance charge income
$
866

 
$
752

Leased vehicle income
2,447

 
1,931

Other income
98

 
65

Total revenue
3,411

 
2,748

Costs and expenses
 
 
 
Salaries and benefits
221

 
199

Other operating expenses
144

 
131

Total operating expenses
365

 
330

Leased vehicle expenses
1,787

 
1,429

Provision for loan losses (Note 3)
136

 
211

Interest expense
732

 
596

Total costs and expenses
3,020

 
2,566

Equity income (Note 5)
52

 
47

Income from continuing operations before income taxes
443

 
229

Income tax provision (Note 11)
74

 
50

Income from continuing operations
369

 
179

Income from discontinued operations, net of tax (Note 12)

 
23

Net income
$
369

 
$
202

 
 
 
 
Net income attributable to common shareholder
$
355

 
$
202

 

 
 

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In millions) (Unaudited)
 
Three Months Ended March 31,
 
2018
 
2017
Net income
$
369

 
$
202

Other comprehensive income, net of tax (Note 10)
 
 
 
Unrealized gain (loss) on cash flow hedges, net of income tax expense (benefit) of $1 and $(3)
1

 
(4
)
Foreign currency translation adjustment, net of income tax (benefit) expense of $(1) and $4
59

 
94

Other comprehensive income, net of tax
60

 
90

Comprehensive income
$
429

 
$
292


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,
 
2018
 
2017
Net cash provided by operating activities - continuing operations
$
1,669

 
$
1,355

Net cash provided by operating activities - discontinued operations

 
61

Net cash provided by operating activities
1,669

 
1,416

Cash flows from investing activities
 
 
 
Purchases of retail finance receivables, net
(5,073
)
 
(5,475
)
Principal collections and recoveries on retail finance receivables
3,576

 
2,810

Net collections (funding) of commercial finance receivables
32

 
(577
)
Purchases of leased vehicles, net
(4,496
)
 
(4,760
)
Proceeds from termination of leased vehicles
2,379

 
1,079

Other investing activities
(20
)
 
(20
)
Net cash used in investing activities - continuing operations
(3,602
)
 
(6,943
)
Net cash provided by (used in) investing activities - discontinued operations

 
(140
)
Net cash used in investing activities
(3,602
)
 
(7,083
)
Cash flows from financing activities
 
 
 
Net change in debt (original maturities less than three months)
23

 
(360
)
Borrowings and issuances of secured debt
5,602

 
8,055

Payments on secured debt
(6,166
)
 
(4,440
)
Borrowings and issuances of unsecured debt
3,861

 
2,968

Payments on unsecured debt
(486
)
 
(531
)
Debt issuance costs
(40
)
 
(27
)
Dividends paid
(30
)
 

Net cash provided by financing activities - continuing operations
2,764

 
5,665

Net cash provided by (used in) financing activities - discontinued operations

 
(10
)
Net cash provided by financing activities
2,764

 
5,655

Net increase (decrease) in cash, cash equivalents and restricted cash
831

 
(12
)
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash
8

 
37

Cash, cash equivalents and restricted cash at beginning of period
6,567

 
5,302

Cash, cash equivalents and restricted cash at end of period
$
7,406

 
$
5,327

Cash, cash equivalents and restricted cash from continuing operations at end of period
$
7,406

 
$
4,737

Cash, cash equivalents and restricted cash from discontinued operations at end of period
$

 
$
590

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheet:
 
March 31, 2018
Cash and cash equivalents
$
4,178

Restricted cash included in other assets
3,228

Total
$
7,406

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 entities (SPEs) utilized in secured financing transactions, which are considered variable interest entities (VIEs). All intercompany transactions and accounts have been eliminated in consolidation.
On October 31, 2017, we completed the sale of certain of our European subsidiaries and branches (collectively, our European Operations) to Banque PSA Finance S.A. and BNP Paribas Personal Finance S.A. The European Operations are presented as discontinued operations in our condensed consolidated financial statements for the three months ended March 31, 2017. Refer to Note 12 for additional details regarding our disposal of these operations. Unless otherwise indicated, information in these notes to the condensed consolidated financial statements relates to our continuing operations.
The 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 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 6, 2018 (Form 10-K). Except as otherwise specified, dollar amounts presented within tables are stated in millions.
The condensed consolidated financial statements at March 31, 2018, and for the three months ended March 31, 2018 and 2017, are unaudited and, in management’s opinion, include all adjustments, which consist of normal recurring adjustments and transactions or events discretely impacting the interim periods, considered necessary by management to fairly state our results of operations. The results for interim periods are not necessarily indicative of results for a full year. The condensed consolidated balance sheet at December 31, 2017, was derived from audited annual financial statements.
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: North America (the North America Segment) and International (the International Segment). Our North America Segment includes operations in the U.S. and Canada. Our International Segment includes operations in Brazil, Chile, Colombia, Mexico and Peru, as well as our equity investment in SAIC-GMAC Automotive Finance Company Limited (SAIC-GMAC), a joint venture that conducts automobile finance operations in China.
Recently Adopted Accounting Standards
Effective January 1, 2018, we adopted ASU 2014-09, “Revenue from Contracts with Customers” (ASU 2014-09) as amended, as incorporated into Accounting Standards Codification (ASC) 606, on a modified retrospective basis by recognizing a cumulative effect adjustment of $33 million as an increase to the opening balance of retained earnings. Under the new standard, commission revenue and expenses related to certain retail finance receivables that were previously recognized as earned or incurred ratably over the term of the related receivables will now be recognized in full at the origination of the receivables.
Effective January 1, 2018, we adopted ASU 2018-02, "Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income" (ASU 2018-02). ASU 2018-02 provides the option to reclassify stranded tax effects related to the U.S. Tax Cuts and Jobs Act of 2017 (the Act) in accumulated other comprehensive income to retained earnings. The cumulative effect of the adjustments to the opening balance of retained earnings for the adopted standard was insignificant.
Effective January 1, 2018, we adopted ASU 2017-12, "Derivatives and Hedging (Topic 815), Targeted Improvements to Accounting for Hedging Activities" (ASU 2017-12), on a modified retrospective basis, which is intended to facilitate financial reporting that more closely reflects risk management activities and simplifies the application of hedge accounting. Changes to the new guidance include expanded disclosures regarding the types of risk management strategies eligible for hedge accounting, simplifying the documentation and effectiveness assessment requirements, changing how ineffectiveness is measured, and changing the presentation and disclosure requirements for hedge accounting activities. The cumulative effect of the adjustments to the opening balance of retained earnings for the adopted standard was insignificant.
The following change to our derivative accounting policy became effective upon adoption of ASU 2017-12:
Certain interest rate swap and foreign currency swap agreements have been designated as cash flow hedges. The risk being hedged is the foreign currency and interest rate risk related to forecasted transactions. If the contract has been designated as a cash flow hedge, the change in the fair value of the cash flow hedge is deferred in accumulated other comprehensive loss and is recognized in interest, operating and other expenses along with the earnings effect of the hedged item when the hedged item affects earnings.

4

GENERAL MOTORS FINANCIAL COMPANY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Changes in the fair value of amounts excluded from the assessment of effectiveness are recorded currently in earnings and are presented in the same income statement line as the earnings effect of the hedged item.
Note 2. Related Party Transactions
We offer loan and lease finance products through GM-franchised dealers to customers purchasing new vehicles manufactured by GM and certain used vehicles 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 cash payments to us to cover certain interest payments on commercial loans. The balance in subvention receivable increased from December 31, 2017 due to a re-timing of cash payments from GM.
We purchase certain program vehicles from GM subsidiaries. We simultaneously lease these vehicles to those subsidiaries for use in their ride-sharing arrangements. We account for these leases as direct-financing leases, which are included in our finance receivables, net.
We periodically purchase finance receivables from other GM subsidiaries for vehicles sold to rental car companies and for vehicles sold to certain dealerships. During the three months ended March 31, 2018, we purchased $136 million of these receivables from GM.
We have related party payables due to GM, primarily for commercial finance receivables originated but not yet funded.
The following tables present related party transactions:
Balance Sheet Data
March 31, 2018
 
December 31, 2017
Commercial finance receivables, net due from dealers consolidated by GM(a)
$
369

 
$
355

Direct-financing lease receivables from GM subsidiaries(a)
$
101

 
$
88

Subvention receivable(b)
$
658

 
$
306

Commercial loan funding payable(c)
$
130

 
$
90

 
Three Months Ended March 31,
Income Statement Data
2018
 
2017
Interest subvention earned on retail finance receivables(d)
$
112

 
$
95

Interest subvention earned on commercial finance receivables(d)
$
18

 
$
15

Leased vehicle subvention earned(e)
$
798

 
$
706

_________________
(a)
Included in finance receivables, net.
(b)
Included in related party receivables. We received subvention payments from GM of $0.6 billion and $1.0 billion for the three months ended March 31, 2018 and 2017.
(c)
Included in related party payables.
(d)
Included in finance charge income.
(e)
Included as a reduction to leased vehicle expenses.
Under the 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. 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), and GM agreed to use commercially reasonable efforts to ensure that we will continue to be designated as a subsidiary borrower under GM's corporate revolving credit facilities. At March 31, 2018, we had no amounts borrowed under either of GM's unsecured revolving credit facilities.

5

GENERAL MOTORS FINANCIAL COMPANY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

On April 18, 2018, GM amended and restated its revolving credit facilities, consisting of a three-year, $4.0 billion facility and a five-year, $10.5 billion facility, and added a 364-day, $2.0 billion facility (the 364-day facility). Also on April 18, 2018, we and GM amended the Support Agreement to, among other things, allow for irrevocable and exclusive access by us of no less than $2.0 billion of the 364-day facility to support our liquidity.
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, 2018 and December 31, 2017, there are no related party taxes payable to GM.
Note 3. Finance Receivables
 
March 31, 2018
 
December 31, 2017

Retail finance receivables
 
 
 
Retail finance receivables, collectively evaluated for impairment, net of fees
$
32,121

 
$
30,574

Retail finance receivables, individually evaluated for impairment, net of fees
2,199

 
2,228

Total retail finance receivables, net of fees(a)
34,320

 
32,802

Less: allowance for loan losses - collective
(551
)
 
(561
)
Less: allowance for loan losses - specific
(307
)
 
(328
)
Total retail finance receivables, net
33,462

 
31,913

Commercial finance receivables
 
 
 
Commercial finance receivables, collectively evaluated for impairment, net of fees
10,342

 
10,290

Commercial finance receivables, individually evaluated for impairment, net of fees
23

 
22

Total commercial finance receivables, net of fees
10,365

 
10,312

Less: allowance for loan losses - collective
(50
)
 
(50
)
Less: allowance for loan losses - specific
(4
)
 
(3
)
Total commercial finance receivables, net
10,311

 
10,259

Total finance receivables, net
$
43,773

 
$
42,172

Fair value of finance receivables
$
43,505

 
$
42,178

________________
(a) Net of unearned income, unamortized premiums and discounts, and deferred fees and costs of $217 million and $228 million at March 31, 2018 and December 31, 2017.
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,
 
2018
 
2017
Allowance for retail loan losses beginning balance
$
889

 
$
765

Provision for loan losses
135

 
207

Charge-offs
(295
)
 
(298
)
Recoveries
123

 
143

Foreign currency translation
6

 
6

Allowance for retail loan losses ending balance
$
858

 
$
823



6

GENERAL MOTORS FINANCIAL COMPANY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Retail Credit Quality Our retail finance receivables portfolio includes loans made to consumers and businesses to finance the purchase of vehicles for personal and commercial use. 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 their equivalent), and contract characteristics. We also consider other factors, such as employment history, financial stability and capacity to pay. A summary of the credit risk profile by FICO score band or equivalent scores, determined at origination, of the retail finance receivables is as follows:
 
March 31, 2018
 
December 31, 2017
 
Amount
 
Percent
 
Amount
 
Percent
Prime - FICO Score 680 and greater
$
18,392

 
53.6
%
 
$
16,892

 
51.5
%
Near-prime - FICO Score 620 to 679
5,451

 
15.9

 
5,226

 
15.9

Sub-prime - FICO Score less than 620
10,477

 
30.5

 
10,684

 
32.6

Balance at end of period
$
34,320

 
100.0
%
 
$
32,802

 
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, 2018
 
March 31, 2017
 
Amount
 
Percent of Contractual Amount Due
 
Amount
 
Percent of Contractual Amount Due
31 - 60 days
$
1,265

 
3.7
%
 
$
995

 
3.4
%
Greater than 60 days
605

 
1.7

 
430

 
1.4

Total finance receivables more than 30 days delinquent
1,870

 
5.4

 
1,425

 
4.8

In repossession
53

 
0.2

 
46

 
0.2

Total finance receivables more than 30 days delinquent or in repossession
$
1,923

 
5.6
%
 
$
1,471

 
5.0
%
At March 31, 2018 and December 31, 2017, the accrual of finance charge income had been suspended on retail finance receivables with contractual amounts due of $852 million and $778 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.
The outstanding recorded investment for retail finance receivables that are considered to be TDRs and the related allowance is presented below:
 
March 31, 2018
 
December 31, 2017
Outstanding recorded investment
$
2,199

 
$
2,228

Less: allowance for loan losses
(307
)
 
(328
)
Outstanding recorded investment, net of allowance
$
1,892

 
$
1,900

Unpaid principal balance
$
2,239

 
$
2,266


7

GENERAL MOTORS FINANCIAL COMPANY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Additional information about loans classified as TDRs is presented below:
 
Three Months Ended March 31,
 
2018
 
2017
Average outstanding recorded investment
$
2,214

 
$
1,939

Finance charge income recognized
$
64

 
$
60

Number of loans classified as TDRs during the period
13,336

 
16,474

Recorded investment of loans classified as TDRs during the period
$
251

 
$
287

The unpaid principal balances, 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, 2018 and 2017.
Commercial Finance Receivables
Commercial Credit Quality Our commercial finance receivables consist of dealer financings, primarily for inventory purchases. Proprietary models are used to assign a risk rating to each dealer. 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 restrictions on funding, including suspension of lines of credit and liquidation of assets. The following table summarizes the credit risk profile by dealer risk rating of commercial finance receivables: 
 
 
 
March 31, 2018
 
December 31, 2017
 
 
 
Amount
 
Percent
 
Amount
 
Percent
Group I
-
Dealers with superior financial metrics
$
1,799

 
17.4
%
 
$
1,915

 
18.6
%
Group II
-
Dealers with strong financial metrics
3,708

 
35.8

 
3,584

 
34.7

Group III
-
Dealers with fair financial metrics
3,414

 
32.9

 
3,424

 
33.2

Group IV
-
Dealers with weak financial metrics
1,111

 
10.7

 
1,048

 
10.2

Group V
-
Dealers warranting special mention due to elevated risks
268

 
2.6

 
260

 
2.5

Group VI
-
Dealers with loans classified as substandard, doubtful or impaired
65

 
0.6

 
81

 
0.8

Balance at end of period
$
10,365

 
100.0
%
 
$
10,312

 
100.0
%
At March 31, 2018 and December 31, 2017, substantially all of our commercial finance receivables were current with respect to payment status. Commercial finance receivables on non-accrual status were insignificant, and none were classified as TDRs. Activity in the allowance for commercial loan losses was insignificant for the three months ended March 31, 2018 and 2017.
Note 4. Leased Vehicles
 
March 31, 2018
 
December 31, 2017
Leased vehicles
$
63,486

 
$
62,203

Manufacturer subvention
(9,610
)
 
(9,468
)
 
53,876

 
52,735

Less: accumulated depreciation
(10,432
)
 
(9,853
)
Leased vehicles, net
$
43,444

 
$
42,882

The following table summarizes minimum rental payments due to us as lessor under operating leases at March 31, 2018:
 
Years Ending December 31,
 
2018
 
2019
 
2020
 
2021
 
2022
Minimum rental payments under operating leases
$
5,241

 
$
5,064

 
$
2,336

 
$
346

 
$
19


8

GENERAL MOTORS FINANCIAL COMPANY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Note 5. Equity in Net Assets of Non-consolidated Affiliate
We use the equity method to account for our equity interest in 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.
 
Three Months Ended March 31,
Summarized Operating Data(a)
2018
 
2017
Finance charge income
$
307

 
$
258

Provision for loan losses
$
3

 
$
(15
)
Interest expense
$
124

 
$
76

Income before income taxes
$
198

 
$
178

Net income
$
148

 
$
134

 _________________
(a)
This data represents that of the entire entity and not our 35% proportionate share.
During the three months ended March 31, 2018 and 2017, there were no dividends received from SAIC-GMAC. At March 31, 2018 and December 31, 2017 we had undistributed earnings of $367 million and $315 million related to SAIC-GMAC.
Note 6. Debt
 
March 31, 2018
 
December 31, 2017
 
Carrying Amount
 
Fair Value
 
Carrying Amount
 
Fair Value
Secured debt
 
 
 
 
 
 
 
Revolving credit facilities
$
3,587

 
$
3,605

 
$
4,694

 
$
4,713

Securitization notes payable
35,854

 
35,790

 
35,193

 
35,235

Total secured debt
39,441

 
39,395

 
39,887

 
39,948

Unsecured debt
 
 
 
 
 
 
 
Senior notes
40,056

 
40,708

 
36,820

 
37,969

Credit facilities
2,311

 
2,314

 
2,368

 
2,375

Other unsecured debt
1,712

 
1,716

 
1,642

 
1,645

Total unsecured debt
44,079

 
44,738

 
40,830

 
41,989

Total secured and unsecured debt
$
83,520

 
$
84,133

 
$
80,717

 
$
81,937

Fair value utilizing Level 2 inputs
 
 
$
81,931

 
 
 
$
79,623

Fair value utilizing Level 3 inputs
 
 
$
2,202

 
 
 
$
2,314

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 with original maturity or revolving period of eighteen months or less, 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.
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 7 for further discussion.
During the three months ended March 31, 2018, we issued $4.7 billion in aggregate principal amount of securitization notes payable with an initial weighted average interest rate of 2.59% and legal final maturity dates ranging from 2022 to 2025.

9

GENERAL MOTORS FINANCIAL COMPANY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Unsecured Debt During the three months ended March 31, 2018, we issued $3.4 billion in aggregate principal amount of senior notes with an initial weighted average interest rate of 2.30% and maturity dates ranging from 2021 to 2028.
In April 2018, we issued $2.5 billion in senior notes with a weighted average interest rate of 3.80% and maturity dates ranging from 2021 to 2025.
All of these notes are guaranteed by AmeriCredit Financial Services, Inc. (AFSI), our primary U.S. operating subsidiary, and $1.2 billion in senior notes issued by subsidiaries in Canada and Mexico are also guaranteed by General Motors Financial Company, Inc.
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, 2018, we were in compliance with these debt covenants.
Note 7. Variable Interest Entities
Securitizations and Credit Facilities The following table summarizes the assets and liabilities related to our consolidated VIEs:
 
March 31, 2018
 
December 31, 2017
Restricted cash(a)
$
2,539

 
$
2,267

Finance receivables, net of fees
$
28,120

 
$
28,364

Lease related assets
$
20,525

 
$
22,222

Secured debt
$
39,026

 
$
39,328

_______________
(a) Included in other assets.
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 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 other subsidiaries' obligations.

10

GENERAL MOTORS FINANCIAL COMPANY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Note 8. Derivative Financial Instruments and Hedging Activities
We are exposed to certain risks arising from both our business operations and economic conditions. We manage economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of our assets and liabilities and the use of derivative financial instruments. Specifically, we enter into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. Our derivative financial instruments are used to manage differences in the amount, timing, and duration of our known or expected cash receipts and our known or expected cash payments principally related to our borrowings.
Certain of our foreign operations expose us to fluctuations of foreign interest rates and exchange rates. We primarily finance our earning assets with debt in the same currency to minimize the impact to earnings from our exposure to fluctuations in exchange rates. When we use a different currency, these fluctuations may impact the value of our cash receipts and payments in terms of our functional currency. We enter into derivative financial instruments to protect the value or fix the amount of certain assets and liabilities in terms of the relevant functional currency. The table below presents the gross amounts of fair value of our derivative instruments and the associated notional amounts.
 
 
March 31, 2018
 
December 31, 2017
 
 
Notional
 
Fair Value of Assets(a)
 
Fair Value of Liabilities(a)
 
Notional
 
Fair Value of Assets(a)
 
Fair Value of Liabilities(a)
Derivatives designated as hedges
 
 
 
 
 
 
 
 
 
 
 
 
Fair value hedges
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate contracts
 
$
9,780

 
$
4

 
$
396

 
$
11,110

 
$
2

 
$
290

Cash flow hedges
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate contracts
 
1,794

 
17

 

 
2,177

 
15

 

Foreign currency swaps
 
2,228

 
154

 
14

 
1,574

 
103

 

Derivatives not designated as hedges
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate contracts
 
91,206

 
464

 
514

 
81,938

 
329

 
207

Foreign currency swaps
 
1,968

 
130

 
5

 
1,201

 
104

 

Total(b)
 
$
106,976

 
$
769

 
$
929

 
$
98,000

 
$
553

 
$
497

 _________________
(a)
The gross amounts of the fair value of our assets and liabilities are included in other assets and other liabilities, respectively. Amounts accrued for interest payments in a net receivable position are included in other assets. All our derivatives are categorized within Level 2 of the fair value hierarchy. 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.
(b)
We primarily enter into derivatives contracts through AFSI; however our SPEs may also be parties to derivative transactions. Agreements between AFSI and its derivative counterparties include rights of setoff for positions with offsetting values or for collateral held or posted. At March 31, 2018 and December 31, 2017, the fair value of assets and liabilities available for offset was $453 million and $284 million. At March 31, 2018 and December 31, 2017, we held $40 million and $25 million and posted $541 million and $299 million of collateral available for netting.
As of March 31, 2018, the following amounts were recorded in the condensed consolidated balance sheet related to items designated and qualifying as hedged items in fair value hedging relationships:
 
March 31, 2018
 
Carrying Amount of Hedged Items
 
Cumulative Amount of Fair Value Hedging Adjustments(a)
Unsecured debt
$
13,672

 
$
602

 _________________
(a)
Includes $163 million of hedging adjustment remaining on hedged items for which hedge accounting has been discontinued.

11

GENERAL MOTORS FINANCIAL COMPANY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


The table below presents the effect of our derivative financial instruments in the condensed consolidated statement of income for the three months ended March 31, 2018.
 
Income (Losses) Recognized In Income
 
Three Months Ended March 31,
 
2018
 
Interest Expense(a)
 
Other Operating Expenses(b)
Fair value hedges
 
 
 
Hedged items
$
208

 
$

Interest rate contracts
(210
)
 

Cash flow hedges
 
 
 
Interest rate contracts
4

 

Foreign currency contracts
(9
)
 
24

Derivatives not designated as hedges
 
 
 
Interest rate contracts
6

 

Foreign currency contracts
(7
)
 
22

Total
$
(8
)
 
$
46

_________________
(a)
Total interest expense was $732 million for the three months ended March 31, 2018.
(b)
Activity is offset by translation activity also recorded in other operating expenses related to foreign currency-denominated loans. Total operating expense was $144 million for the three months ended March 31, 2018.

The table below presents the effect of our derivative financial instruments in the condensed consolidated statement of income for the three months ended March 31, 2017.
 
Income (Losses) Recognized In Income
 
Three Months Ended March 31,
 
2017
Fair value hedges
 
Interest rate contracts(a)(b)
$
11

Cash flow hedges
 
Interest rate contracts(a)
(1
)
Foreign currency contracts(c)
6

Derivatives not designated as hedges
 
Interest rate contracts(a)
(5
)
Foreign currency contracts(c)(d)
(7
)
Total
$
4

_________________
(a)
Recognized in earnings as interest expense.
(b)
Includes hedge ineffectiveness which reflects the net change in the fair value of interest rate contracts offset by the change in fair value of hedged debt attributable to the hedged risk.
(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.

12

GENERAL MOTORS FINANCIAL COMPANY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

 
Gains (Losses) Recognized In Accumulated Other Comprehensive Loss
 
Gains (Losses) Reclassified From Accumulated Other Comprehensive Loss Into Income
 
Location of Amounts Reclassified from Accumulated OCI
 
Three Months Ended March 31,
 
Three Months Ended March 31,
 
 
2018
 
2017
 
2018
 
2017
 
Cash flow hedges
 
 
 
 
 
 
 
 
 
Interest rate contracts
$
4

 
$
2

 
$
(3
)
 
$
1

 
Interest expense
Foreign currency contracts
18

 
(3
)
 
(18
)
 
(4
)
 
Interest expense
Total
$
22

 
$
(1
)
 
$
(21
)
 
$
(3
)
 
 
Note 9. Commitments and Contingencies
Guarantees of Indebtedness The payments of principal and interest on senior notes issued by our top-tier holding company and our primary Canadian and Mexican operating subsidiaries are guaranteed by our primary U.S. operating subsidiary, AFSI. At March 31, 2018 and December 31, 2017, the aggregate principal amount of our senior notes was $40.8 billion and $37.3 billion. Refer to Note 15 for further discussion.
At March 31, 2018 and December 31, 2017, we and AFSI guaranteed approximately $1.2 billion and $2.0 billion in aggregate principal amount of Euro Medium Term Notes issued by General Motors Financial International B.V., our former subsidiary, pursuant to our Euro Medium Term Note Programme. Subject to the terms and conditions of a letter agreement entered into with BNP Paribas in connection with the sale of certain of our European Operations on October 31, 2017, BNP Paribas has agreed to pay to us and AFSI any amount that we and AFSI may pay under any such guarantees.
Legal Proceedings We are subject to various pending and potential legal and regulatory proceedings in the ordinary course of business, including litigation, arbitration, claims, investigations, examinations, subpoenas and enforcement proceedings. Some litigation against us could take the form of class actions. The outcome of these proceedings is inherently uncertain, and thus we cannot confidently predict how or when proceedings will be resolved. An adverse outcome in one or more of these proceedings could result in substantial damages, settlements, fines, penalties, diminished income or reputational harm. We identify below the material proceedings in connection with which we believe a material loss is reasonably possible or probable.
In accordance with the current accounting standards for loss contingencies, we establish reserves for legal matters when it is probable that a loss associated with the matter has been incurred and the amount of the loss can be reasonably estimated. The actual costs of resolving legal matters may be higher or lower than any amounts reserved for these matters. At March 31, 2018, we estimated our reasonably possible legal exposure for unfavorable outcomes is up to $68 million, and have accrued $21 million.
In 2014 and 2015, we were served with investigative subpoenas from various state attorneys general and other governmental offices to produce documents and data relating to our automobile loan and lease business and securitization of loans and leases. We believe that we have cooperated fully with all reasonable requests for information.
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 $18 million.
Note 10. Shareholders' Equity
At March 31, 2018 and December 31, 2017, we had 250 million shares of preferred stock and 10 million shares of common stock authorized for issuance. At March 31, 2018 and December 31, 2017, we had 1.0 million shares of Series A Preferred Stock and 5.05 million shares of common stock issued and outstanding. On March 30, 2018, we paid a dividend of $30.4 million at $30.35 per share of Series A Preferred Stock to holders of record of Series A Preferred Stock as of March 15, 2018.

13

GENERAL MOTORS FINANCIAL COMPANY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The following table summarizes the significant components of accumulated other comprehensive loss:
 
Three Months Ended March 31,
 
2018
 
2017
Unrealized gain on cash flow hedges
 
 
 
Beginning balance
$
16

 
$
17

Change in value of cash flow hedges, net of tax
1

 
(4
)
Ending balance
17

 
13

Defined benefit plans
 
 
 
Beginning balance
1

 
(20
)
Unrealized loss on subsidiary pension, net of tax

 

Ending balance
1

 
(20
)
Foreign currency translation adjustment
 
 
 
Beginning balance
(785
)
 
(1,235
)
Translation gain, net of tax
59

 
94

Ending balance
(726
)
 
(1,141
)
Total accumulated other comprehensive loss
$
(708
)
 
$
(1,148
)
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, 2018 and 2017, income tax expense of $74 million and $50 million primarily resulted from tax expense attributable to entities included in our effective tax rate calculation.
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.
On December 22, 2017, the Act was signed into law. The Act changed many aspects of U.S. corporate income taxation, including the reduction of the corporate income tax rate from 35% to 21%, implementation of a territorial tax system and imposition of a tax on deemed repatriated earnings of foreign subsidiaries. At December 31, 2017, we had not completed our accounting for the tax effects of enactment of the Act; however, we made a reasonable estimate of the effects on our existing deferred tax balances and the one-time transition tax. We will continue to assess our provision for income taxes as future guidance is issued, but do not currently anticipate significant revisions will be necessary. Any such revisions will be treated in accordance with the measurement period guidance outlined in Staff Accounting Bulletin No. 118. As of March 31, 2018, no material amounts have been identified.

14

GENERAL MOTORS FINANCIAL COMPANY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Note 12. Discontinued Operations
On October 31, 2017, we completed the sale of certain of our European Operations to Banque PSA Finance S.A. and BNP Paribas Personal Finance S.A. Refer to Note 2 - "Discontinued Operations" to our consolidated financial statements in our Form 10-K for further discussion of the terms of the agreement.
The following table summarizes the results of operations of the European Operations:
 
Three Months Ended March 31, 2017
Total revenue
$
131

Interest expense
23

Other expenses
77

Total costs and expenses
100

Income from discontinued operations before income taxes
31

Loss on sale of discontinued operations before income taxes

Income from discontinued operations before income taxes
31

Income tax provision
8

Income from discontinued operations, net of tax
$
23

Note 13. Segment Reporting
Our chief operating decision maker evaluates the operating results and performance of our business based on our North America and International operating segments. The management of each segment is responsible for executing our strategies. As discussed in Note 12, our European Operations are presented as discontinued operations and are excluded from our segment results for the three months ended March 31, 2017. These operations were previously included in our International Segment. Key operating data for our operating segments were as follows:
 
Three Months Ended March 31, 2018
 
North
America
 
International
 
Total
Total revenue
$
3,085

 
$
326

 
$
3,411

Operating expenses
271

 
94

 
365

Leased vehicle expenses
1,778

 
9

 
1,787

Provision for loan losses
97

 
39

 
136

Interest expense
597

 
135

 
732

Equity income

 
52

 
52

Income from continuing operations before income taxes
$
342

 
$
101

 
$
443

 
Three Months Ended March 31, 2017
 
North
America
 
International
 
Total
Total revenue
$
2,474

 
$
274

 
$
2,748

Operating expenses
248

 
82

 
330

Leased vehicle expenses
1,426

 
3

 
1,429

Provision for loan losses
187

 
24

 
211

Interest expense
455

 
141

 
596

Equity income

 
47

 
47

Income from continuing operations before income taxes
$
158

 
$
71

 
$
229


15

GENERAL MOTORS FINANCIAL COMPANY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

 
March 31, 2018
 
December 31, 2017
 
North
America
 
International
 
Total
 
North
America
 
International
 
Total
Finance receivables, net
$
36,901

 
$
6,872

 
$
43,773

 
$
35,436

 
$
6,736

 
$
42,172

Leased vehicles, net
$
43,297

 
$
147

 
$
43,444

 
$
42,753

 
$
129

 
$
42,882

Total assets
$
91,357

 
$
9,665

 
$
101,022

 
$
87,618

 
$
9,397

 
$
97,015

Note 14. Regulatory Capital and Other Regulatory Matters
We are required to comply with a wide variety of laws and regulations. Certain of our entities operate in international markets as either banks or regulated finance companies that are subject to regulatory restrictions. These regulatory restrictions, among other things, require that certain of these entities meet 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 $8.0 billion and $7.8 billion at March 31, 2018 and December 31, 2017.
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 in certain circumstances, including the sale or disposition of all of the Guarantor’s assets or capital stock, legal or covenant defeasance, and the discharge of certain guaranteed senior notes. Our currently outstanding $500 million 6.75% senior notes mature on June 1, 2018, and when, among other things, such notes are discharged on or before the stated maturity date, the Guarantor's guarantees on all outstanding senior notes will be automatically and unconditionally released and discharged.
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, 2018 and December 31, 2017, and for the three months ended March 31, 2018 and 2017 (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, 2018
(Unaudited)
 
General
Motors
Financial
Company, Inc.
 
Guarantor
 
Non-
Guarantors
 
Eliminations
 
Consolidated
ASSETS
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$

 
$
3,086

 
$
1,092

 
$

 
$
4,178

Finance receivables, net

 
11,114

 
32,659

 

 
43,773

Leased vehicles, net

 

 
43,444

 

 
43,444

Goodwill
1,095

 

 
103

 

 
1,198

Equity in net assets of non-consolidated affiliate

 

 
1,281

 

 
1,281

Related party receivables

 
91

 
568

 

 
659

Other assets
633

 
2,045

 
4,899

 
(1,088
)
 
6,489

Due from affiliates
38,038

 
23,975

 

 
(62,013
)
 

Investment in affiliates
10,436

 
6,844

 

 
(17,280
)
 

Total assets
$
50,202

 
$
47,155

 
$
84,046

 
$
(80,381
)
 
$
101,022

LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
Secured debt
$

 
$

 
$
39,871

 
$
(430
)
 
$
39,441

Unsecured debt
39,055

 

 
5,024

 

 
44,079

Deferred income

 

 
3,336

 

 
3,336

Related party payables
2

 

 
130

 

 
132

Other liabilities
397

 
1,429

 
2,118

 
(658
)
 
3,286

Due to affiliates

 
37,772

 
24,241

 
(62,013
)
 

Total liabilities
39,454

 
39,201

 
74,720

 
(63,101
)
 
90,274

Shareholders' equity
 
 
 
 
 
 
 
 
 
Common stock

 

 
698

 
(698
)
 

Preferred stock

 

 

 

 

Additional paid-in capital
7,541

 
79

 
2,128

 
(2,207
)
 
7,541

Accumulated other comprehensive loss
(708
)
 
(133
)
 
(661
)
 
794

 
(708
)
Retained earnings
3,915

 
8,008

 
7,161

 
(15,169
)
 
3,915

Total shareholders' equity
10,748

 
7,954

 
9,326

 
(17,280
)
 
10,748

Total liabilities and shareholders' equity
$
50,202

 
$
47,155

 
$
84,046

 
$
(80,381
)
 
$
101,022













17

GENERAL MOTORS FINANCIAL COMPANY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

 
$
3,535

 
$
730

 
$

 
$
4,265

Finance receivables, net

 
9,569

 
32,603

 

 
42,172

Leased vehicles, net

 

 
42,882

 

 
42,882

Goodwill
1,095

 

 
102

 

 
1,197

Equity in net assets of non-consolidated affiliate

 

 
1,187

 

 
1,187

Related party receivables
2

 
23

 
284

 

 
309

Other assets
558

 
1,497

 
3,920

 
(972
)
 
5,003

Due from affiliates
35,312

 
22,603

 

 
(57,915
)
 

Investment in affiliates
9,870

 
6,426

 

 
(16,296
)
 

Total assets
$
46,837

 
$
43,653

 
$
81,708

 
$
(75,183
)
 
$
97,015

LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
Secured debt
$

 
$

 
$
40,289

 
$
(402
)
 
$
39,887

Unsecured debt
36,145

 

 
4,685

 

 
40,830

Deferred income

 

 
3,221

 

 
3,221

Related party payables
2

 

 
90

 

 
92

Other liabilities
396

 
967

 
1,898

 
(570
)
 
2,691

Due to affiliates

 
35,110

 
22,805

 
(57,915
)
 

Total liabilities
36,543

 
36,077

 
72,988

 
(58,887
)
 
86,721

Shareholders' equity
 
 
 
 
 
 
 
 
 
Common stock

 

 
698

 
(698
)
 

Preferred stock

 

 

 

 

Additional paid-in capital
7,525

 
79

 
2,123

 
(2,202
)
 
7,525

Accumulated other comprehensive loss
(768
)
 
(109
)
 
(714
)
 
823

 
(768
)
Retained earnings
3,537

 
7,606

 
6,613

 
(14,219
)
 
3,537

Total shareholders' equity
10,294

 
7,576

 
8,720

 
(16,296
)
 
10,294

Total liabilities and shareholders' equity
$
46,837

 
$
43,653

 
$
81,708

 
$
(75,183
)
 
$
97,015


18

GENERAL MOTORS FINANCIAL COMPANY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

CONDENSED CONSOLIDATING STATEMENT OF INCOME
Three Months Ended March 31, 2018
(Unaudited)
 
General
Motors
Financial
Company, Inc.
 
Guarantor
 
Non-
Guarantors
 
Eliminations
 
Consolidated
Revenue
 
 
 
 
 
 
 
 
 
Finance charge income
$

 
$
169

 
$
697

 
$

 
$
866

Leased vehicle income

 

 
2,447

 

 
2,447

Other income
2

 
311

 
28

 
(243
)
 
98

Total revenue
2

 
480

 
3,172

 
(243
)
 
3,411

Costs and expenses
 
 
 
 
 
 
 
 
 
Salaries and benefits

 
181

 
40

 

 
221

Other operating expenses
82

 
(16
)
 
216

 
(138
)
 
144

Total operating expenses
82

 
165

 
256

 
(138
)
 
365

Leased vehicle expenses

 

 
1,787

 

 
1,787

Provision for loan losses

 
88

 
48

 

 
136

Interest expense
101

 
290

 
446

 
(105
)
 
732

Total costs and expenses
183

 
543

 
2,537

 
(243
)
 
3,020

Equity income
475

 
442

 
52

 
(917
)
 
52

Income before income taxes
294

 
379

 
687

 
(917
)
 
443

Income tax (benefit) provision
(75
)
 
(23
)
 
172

 

 
74

Net income
369

 
402

 
515

 
(917
)
 
369

 
 
 
 
 
 
 
 
 
 
Net income attributable to common shareholder
$
355

 
$
402

 
$
515

 
$
(917
)
 
$
355

 
 
 
 
 
 
 
 
 
 
Comprehensive income
$
429

 
$
378

 
$
568

 
$
(946
)
 
$
429


19

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

 
$
657

 
$

 
$
752

Leased vehicle income

 

 
1,931

 

 
1,931

Other income

 
273

 
(9
)
 
(199
)
 
65

Total revenue

 
368

 
2,579

 
(199
)
 
2,748

Costs and expenses
 
 
 
 
 
 
 
 
 
Salaries and benefits

 
163

 
36

 

 
199

Other operating expenses
7

 
44

 
190

 
(110
)
 
131

Total operating expenses
7

 
207

 
226

 
(110
)
 
330

Leased vehicle expenses

 

 
1,429

 

 
1,429

Provision for loan losses

 
73

 
138

 

 
211

Interest expense
235

 
33

 
417

 
(89
)
 
596

Total costs and expenses
242

 
313

 
2,210

 
(199
)
 
2,566

Equity income
315

 
215

 
47

 
(530
)
 
47

Income from continuing operations before income taxes
73

 
270

 
416

 
(530
)
 
229

Income tax (benefit) provision
(129
)
 
26

 
153

 

 
50

Income from continuing operations
202

 
244

 
263

 
(530
)
 
179

Income from discontinued operations, net of tax

 

 
23

 

 
23

Net income
$
202

 
$
244

 
$
286

 
$
(530
)
 
$
202

 
 
 
 
 
 
 
 
 
 
Comprehensive income
$
292

 
$
248

 
$
386

 
$
(634
)
 
$