UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

______________________________________________

FORM 10-Q

(Mark One)


☒						QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, ~~2021~~2022


☐						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)


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)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
5.250% Senior Notes due 2026	GM/26	New York Stock Exchange

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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☒ No ☐

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

☐

Accelerated filer

☐

Non-accelerated filer

☒

Smaller reporting company

☐

Emerging growth company

☐

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~August 3, 2021,~~July 25, 2022, there were 5,050,000 shares of the registrant’s common stock, par value $0.0001 per share, outstanding. All shares of the registrant’s common stock are owned by General Motors Holdings LLC, a wholly-owned subsidiary of General Motors Company.

The registrant is a wholly-owned subsidiary of General Motors Company and meets the conditions set forth in General Instructions H(1)(a) and (b) of Form 10-Q and is therefore filing this Quarterly Report on Form 10-Q with a reduced disclosure format as permitted by Instruction H(2).

INDEX


		Page
PART I
Item 1.	Condensed Consolidated Financial Statements ~~(Unaudited)~~	1
	Condensed Consolidated Balance Sheets (Unaudited)	1
	Condensed Consolidated Statements of Income (Unaudited)	2
	Condensed Consolidated Statements of Comprehensive Income (Unaudited)	2
	Condensed Consolidated Statements of Shareholders' Equity (Unaudited)	3
	Condensed Consolidated Statements of Cash Flows (Unaudited)	4
	Notes to Condensed Consolidated Financial Statements	5
	Note 1. Summary of Significant Accounting Policies	5
	Note 2. Related Party Transactions	5
	Note 3. Finance Receivables	7
	Note 4. Leased Vehicles	10
	Note 5. Equity in Net Assets of Non-consolidated Affiliates	10
	Note 6. Debt	1110
	Note 7. Variable Interest Entities and Other Transfers of Finance Receivables	11
	Note 8. Derivative Financial Instruments and Hedging Activities	1312
	Note 9. Commitments and Contingencies	1514
	Note 10. Shareholders' Equity	1615
	Note 11. Income Taxes	1716
	Note 12. Segment Reporting	1716
	Note 13. Regulatory Capital and Other Regulatory Matters	1716
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	1817
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2928
Item 4.	Controls and Procedures	2928
PART II
Item 1.	Legal Proceedings	2928
Item 1A.	Risk Factors	2928
Item 6.	Exhibits	3029
	Signature	3130

Table of Contents

GENERAL MOTORS FINANCIAL COMPANY, INC.

PART I

Item 1. Condensed Consolidated Financial Statements

CONDENSED CONSOLIDATED BALANCE SHEETS

(inIn millions, except per share amounts) ~~(unaudited)~~(Unaudited)


		June 30, 2021		December 31, 2020			June 30, 2022		December 31, 2021
ASSETS	ASSETS					ASSETS
Cash and cash equivalents	Cash and cash equivalents	$	4,378	$	5,063	Cash and cash equivalents	$	5,275	$	3,948
Finance receivables, net (Note 3; Note 7 VIEs)		60,212		58,390
Finance receivables, net of allowance for loan losses $2,027 and $1,886 (Note 3; Note 7 VIEs)						Finance receivables, net of allowance for loan losses $2,027 and $1,886 (Note 3; Note 7 VIEs)	66,847		62,979
Leased vehicles, net (Note 4; Note 7 VIEs)	Leased vehicles, net (Note 4; Note 7 VIEs)	40,596		39,819		Leased vehicles, net (Note 4; Note 7 VIEs)	35,307		37,929
Goodwill	Goodwill	1,174		1,173		Goodwill	1,171		1,169
Equity in net assets of non-consolidated affiliates (Note 5)	Equity in net assets of non-consolidated affiliates (Note 5)	1,704		1,581		Equity in net assets of non-consolidated affiliates (Note 5)	1,760		1,717
Related party receivables (Note 2)	Related party receivables (Note 2)	611		643		Related party receivables (Note 2)	502		301
Other assets (Note 7 VIEs)	Other assets (Note 7 VIEs)	7,247		7,156		Other assets (Note 7 VIEs)	6,917		5,743
Total assets	Total assets	$	115,922	$	113,825	Total assets	$	117,778	$	113,786
LIABILITIES AND SHAREHOLDERS' EQUITY	LIABILITIES AND SHAREHOLDERS' EQUITY					LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities	Liabilities					Liabilities
Secured debt (Note 6; Note 7 VIEs)	Secured debt (Note 6; Note 7 VIEs)	$	38,999	$	39,982	Secured debt (Note 6; Note 7 VIEs)	$	38,095	$	39,338
Unsecured debt (Note 6)	Unsecured debt (Note 6)	54,571		52,443		Unsecured debt (Note 6)	55,509		53,223
Deferred income	Deferred income	2,933		3,048		Deferred income	2,377		2,551
Related party payables (Note 2)	Related party payables (Note 2)	358		269		Related party payables (Note 2)	80		313
Other liabilities	Other liabilities	4,596		4,485		Other liabilities	6,874		4,567
Total liabilities	Total liabilities	101,457		100,227		Total liabilities	102,935		99,992
Commitments and contingencies (Note 9)	Commitments and contingencies (Note 9)	0		0		Commitments and contingencies (Note 9)	0		0
Shareholders' equity (Note 10)	Shareholders' equity (Note 10)					Shareholders' equity (Note 10)
Common stock, $0.0001 par value per share	Common stock, $0.0001 par value per share	0		0		Common stock, $0.0001 par value per share	—		—
Preferred stock, $0.01 par value per share	Preferred stock, $0.01 par value per share	0		0		Preferred stock, $0.01 par value per share	—		—
Additional paid-in capital	Additional paid-in capital	8,668		8,642		Additional paid-in capital	8,713		8,692
Accumulated other comprehensive loss		(1,206)		(1,309)
Accumulated other comprehensive income (loss)						Accumulated other comprehensive income (loss)	(1,226)		(1,273)
Retained earnings	Retained earnings	7,003		6,265		Retained earnings	7,357		6,375
Total shareholders' equity	Total shareholders' equity	14,465		13,598		Total shareholders' equity	14,844		13,794
Total liabilities and shareholders' equity	Total liabilities and shareholders' equity	$	115,922	$	113,825	Total liabilities and shareholders' equity	$	117,778	$	113,786

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

Amounts may not add due to rounding.

Table of Contents

GENERAL MOTORS FINANCIAL COMPANY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(inIn millions) ~~(unaudited)~~(Unaudited)


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2021		2020		2021		2020			2022		2021		2022		2021
Revenue	Revenue									Revenue
Finance charge income	Finance charge income	$	1,036	$	966	$	2,052	$	1,972	Finance charge income	$	1,062	$	1,036	$	2,072	$	2,052
Leased vehicle income	Leased vehicle income	2,304		2,386		4,625		4,849		Leased vehicle income	1,989		2,304		4,056		4,625
Other income	Other income	86		71		156		163		Other income	95		86		175		156
Total revenue	Total revenue	3,426		3,423		6,833		6,984		Total revenue	3,146		3,426		6,302		6,833
Costs and expenses	Costs and expenses									Costs and expenses
Operating expenses	Operating expenses	378		345		789		703		Operating expenses	393		378		766		789
Leased vehicle expenses	Leased vehicle expenses	825		1,779		2,069		3,476		Leased vehicle expenses	856		825		1,711		2,069
Provision for loan losses (Note 3)	Provision for loan losses (Note 3)	59		327		33		793		Provision for loan losses (Note 3)	198		59		320		33
Interest expense	Interest expense	633		788		1,283		1,623		Interest expense	642		633		1,219		1,283
Total costs and expenses	Total costs and expenses	1,895		3,239		4,174		6,595		Total costs and expenses	2,089		1,895		4,016		4,174
Equity income (Note 5)	Equity income (Note 5)	50		42		104		67		Equity income (Note 5)	50		50		104		104
Income before income taxes	Income before income taxes	1,581		226		2,763		456		Income before income taxes	1,106		1,581		2,390		2,763
Income tax provision (Note 11)	Income tax provision (Note 11)	401		53		705		116		Income tax provision (Note 11)	277		401		599		705
Net income		1,180		173		2,058		340
Net income (loss)										Net income (loss)	829		1,180		1,791		2,058
Less: cumulative dividends on preferred stock	Less: cumulative dividends on preferred stock	29		22		59		45		Less: cumulative dividends on preferred stock	30		29		59		59
Net income attributable to common shareholder		$	1,151	$	151	$	1,999	$	295
Net income (loss) attributable to common shareholder										Net income (loss) attributable to common shareholder	$	799	$	1,151	$	1,731	$	1,999

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(inIn millions) ~~(unaudited)~~(Unaudited)


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2021		2020		2021		2020			2022		2021		2022		2021
Net income		$	1,180	$	173	$	2,058	$	340
Net income (loss)										Net income (loss)	$	829	$	1,180	$	1,791	$	2,058
Other comprehensive income (loss), net of tax (Note 10)	Other comprehensive income (loss), net of tax (Note 10)									Other comprehensive income (loss), net of tax (Note 10)
Unrealized (loss) gain on hedges, net of income tax benefit (expense) of $2, $11, $(15), $50		(7)		(34)		42		(151)
Unrealized gain (loss) on hedges, net of income tax (expense) benefit of $(7), $2,$(38),$(15)										Unrealized gain (loss) on hedges, net of income tax (expense) benefit of $(7), $2,$(38),$(15)	21		(7)		116		42
Foreign currency translation adjustment	Foreign currency translation adjustment	133		33		61		(393)		Foreign currency translation adjustment	(213)		133		(69)		61
Other comprehensive income (loss), net of tax	Other comprehensive income (loss), net of tax	126		(1)		103		(544)		Other comprehensive income (loss), net of tax	(192)		126		46		103
Comprehensive income (loss)	Comprehensive income (loss)	$	1,306	$	172	$	2,161	$	(204)	Comprehensive income (loss)	$	637	$	1,306	$	1,837	$	2,161

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

Amounts may not add due to rounding.

Table of Contents

GENERAL MOTORS FINANCIAL COMPANY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(inIn millions) ~~(unaudited)~~(Unaudited)

Common Stock Preferred Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Retained Earnings Total
Shareholders'
Equity
Balance at January 1, 2020 $ 0 $ 0 $ 8,101 $ (1,119) $ 5,744 $ 12,726
Adoption of accounting standard — — — — (643) (643)
Net income — — — — 167 167
Other comprehensive loss — — — (543) — (543)
Stock based compensation — — 9 — — 9
Dividends paid (Note 10)
— — — — (400) (400)
Balance at March 31, 2020 0 0 8,110 (1,662) 4,868 11,316
Net income — — — — 173 173
Other comprehensive loss — — — (1) — (1)
Stock based compensation — — 10 — — 10
Dividends paid (Note 10)
— — — — (400) (400)
Dividends declared on preferred stock (Note 10)
— — — — (45) (45)
Balance at June 30, 2020 $ 0 $ 0 $ 8,120 $ (1,663) $ 4,596 $ 11,053
Balance at January 1, 2021 $ 0 $ 0 $ 8,642 $ (1,309) $ 6,265 $ 13,598
Net income — — — — 878 878
Other comprehensive loss — — — (23) — (23)
Stock based compensation — — 8 — — 8
Dividends paid (Note 10)
— — — — (661) (661)
Balance at March 31, 2021 0 0 8,650 (1,332) 6,482 13,800
Net income — — — — 1,180 1,180
Other comprehensive income — — — 126 — 126
Stock based compensation — — 18 — — 18
Dividends paid (Note 10)
— — — — (600) (600)
Dividends declared on preferred stock (Note 10)
— — — — (59) (59)
Balance at June 30, 2021 $ 0 $ 0 $ 8,668 $ (1,206) $ 7,003 $ 14,465


	Common Stock		Preferred Stock		Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Total Shareholders' Equity
Balance at January 1, 2021	$	—	$	—	$	8,642	$	(1,309)	$	6,265	$	13,598
Net income (loss)	—		—		—		—		878		878
Other comprehensive income (loss)	—		—		—		(23)		—		(23)
Stock-based compensation	—		—		8		—		—		8
Dividends paid (Note 10)	—		—		—		—		(661)		(661)
Balance at March 31, 2021	—		—		8,650		(1,332)		6,482		13,800
Net income (loss)	—		—		—		—		1,180		1,180
Other comprehensive income (loss)	—		—		—		126		—		126
Stock-based compensation	—		—		18		—		—		18
Dividends paid (Note 10)	—		—		—		—		(600)		(600)
Dividends declared on preferred stock (Note 10)	—		—		—		—		(59)		(59)
Balance at June 30, 2021	$	—	$	—	$	8,668	$	(1,206)	$	7,003	$	14,465







Balance at January 1, 2022	$	—	$	—	$	8,692	$	(1,273)	$	6,375	$	13,794
Net income (loss)	—		—		—		—		962		962
Other comprehensive income (loss)	—		—		—		238		—		238
Stock-based compensation	—		—		10		—		—		10
Balance at March 31, 2022	—		—		8,701		(1,034)		7,337		15,004
Net income (loss)	—		—		—		—		829		829
Other comprehensive income (loss)	—		—		—		(192)		—		(192)
Stock-based compensation	—		—		11		—		—		11
Dividends paid (Note 10)	—		—		—		—		(750)		(750)
Dividends declared on preferred stock (Note 10)	—		—		—		—		(59)		(59)
Balance at June 30, 2022	$	—	$	—	$	8,713	$	(1,226)	$	7,357	$	14,844

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

Amounts may not add due to rounding.

Table of Contents

GENERAL MOTORS FINANCIAL COMPANY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(inIn millions) ~~(unaudited)~~(Unaudited)


		Six Months Ended June 30,					Six Months Ended June 30,
		2021		2020			2022		2021
Cash flows from operating activities	Cash flows from operating activities					Cash flows from operating activities
Net income		$	2,058	$	340
Adjustments to reconcile net income to net cash provided by operating activities:
Net income (loss)						Net income (loss)	$	1,791	$	2,058
Depreciation and amortization	Depreciation and amortization	3,337		3,842		Depreciation and amortization	2,536		3,337
Accretion and amortization of loan and leasing fees	Accretion and amortization of loan and leasing fees	(792)		(1,011)		Accretion and amortization of loan and leasing fees	(634)		(792)
Undistributed earnings of non-consolidated affiliates, net	Undistributed earnings of non-consolidated affiliates, net	(104)		(67)		Undistributed earnings of non-consolidated affiliates, net	(77)		(104)
Provision for loan losses	Provision for loan losses	33		793		Provision for loan losses	320		33
Deferred income taxes	Deferred income taxes	212		91		Deferred income taxes	419		212
Stock-based compensation expense	Stock-based compensation expense	26		18		Stock-based compensation expense	21		26
Gain on termination of leased vehicles	Gain on termination of leased vehicles	(1,158)		(248)		Gain on termination of leased vehicles	(723)		(1,158)
Other operating activities	Other operating activities	112		(41)		Other operating activities	(74)		112
Changes in assets and liabilities:	Changes in assets and liabilities:					Changes in assets and liabilities:
Other assets	Other assets	(10)		(113)		Other assets	(943)		(10)
Other liabilities	Other liabilities	(177)		472		Other liabilities	(22)		(177)
Related party payables	Related party payables	82		4		Related party payables	(247)		82
Net cash provided by operating activities		3,619		4,080
Net cash provided by (used in) operating activities						Net cash provided by (used in) operating activities	2,366		3,619
Cash flows from investing activities	Cash flows from investing activities					Cash flows from investing activities
Purchases of retail finance receivables, net	Purchases of retail finance receivables, net	(17,479)		(15,063)		Purchases of retail finance receivables, net	(17,159)		(17,479)
Principal collections and recoveries on retail finance receivables	Principal collections and recoveries on retail finance receivables	12,237		9,362		Principal collections and recoveries on retail finance receivables	13,763		12,237
Net collections of commercial finance receivables		3,383		3,952
Net collections (funding) of commercial finance receivables						Net collections (funding) of commercial finance receivables	(862)		3,383
Purchases of leased vehicles, net	Purchases of leased vehicles, net	(12,391)		(6,054)		Purchases of leased vehicles, net	(6,203)		(12,391)
Proceeds from termination of leased vehicles	Proceeds from termination of leased vehicles	10,868		5,537		Proceeds from termination of leased vehicles	7,549		10,868
Net loans to related party		0		(938)
Capital injection to non-consolidated affiliates						Capital injection to non-consolidated affiliates	(26)		—
Other investing activities	Other investing activities	(27)		(19)		Other investing activities	(13)		(27)
Net cash used in investing activities		(3,409)		(3,223)
Net cash provided by (used in) investing activities						Net cash provided by (used in) investing activities	(2,951)		(3,409)
Cash flows from financing activities	Cash flows from financing activities					Cash flows from financing activities
Net change in debt (original maturities less than three months)	Net change in debt (original maturities less than three months)	2,369		821		Net change in debt (original maturities less than three months)	999		2,369
Borrowings and issuances of secured debt	Borrowings and issuances of secured debt	15,716		24,771		Borrowings and issuances of secured debt	14,389		15,716
Payments on secured debt	Payments on secured debt	(16,744)		(24,065)		Payments on secured debt	(15,634)		(16,744)
Borrowings and issuances of unsecured debt	Borrowings and issuances of unsecured debt	9,974		7,591		Borrowings and issuances of unsecured debt	9,206		9,974
Payments on unsecured debt	Payments on unsecured debt	(9,755)		(5,132)		Payments on unsecured debt	(6,558)		(9,755)
Dividends paid						Dividends paid	(809)		(1,261)
Debt issuance costs	Debt issuance costs	(105)		(97)		Debt issuance costs	(84)		(105)

Dividends paid		(1,261)		(845)
Net cash provided by financing activities		194		3,044
Net cash provided by (used in) financing activities						Net cash provided by (used in) financing activities	1,508		194
Net increase in cash, cash equivalents and restricted cash	Net increase in cash, cash equivalents and restricted cash	404		3,901		Net increase in cash, cash equivalents and restricted cash	922		404
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash	Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash	0		(149)		Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash	14		—
Cash, cash equivalents and restricted cash at beginning of period	Cash, cash equivalents and restricted cash at beginning of period	8,126		7,102		Cash, cash equivalents and restricted cash at beginning of period	7,183		8,126
Cash, cash equivalents and restricted cash at end of period	Cash, cash equivalents and restricted cash at end of period	$	8,530	$	10,854	Cash, cash equivalents and restricted cash at end of period	$	8,119	$	8,530

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheet:


	June 30, ~~2021~~2022
Cash and cash equivalents	$	~~4,378~~5,275
Restricted cash included in other assets	~~4,152~~2,844
Total	$	~~8,530~~8,119

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

Amounts may not add due to rounding.

Table of Contents

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.

The consolidated financial statements, including the notes thereto, are condensed and do not include all disclosures required by generally accepted accounting principles (GAAP) in the U.S. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2020,~~2021, as filed with the Securities and Exchange Commission ~~(SEC)~~ on February ~~10, 2021 (2020~~2, 2022 (2021 Form 10-K). Except as otherwise specified, dollar amounts presented within tables are stated in millions. Certain columns and rows may not add due to rounding.

The condensed consolidated financial statements at June 30, ~~2021,~~2022, and for the three and six months ended June 30, ~~2021~~2022 and ~~2020,~~2021, 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, ~~2020~~2021 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 2 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 investments in joint ventures in China.

~~Recently Adopted~~ Accounting Standards Not Yet Adopted In ~~January 2021,~~March 2022, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) 2022-02, "Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures" (ASU 2022-02), which eliminates the accounting guidance for troubled debt restructurings (TDRs) by creditors that have adopted ASU ~~2021-01, "Reference Rate Reform~~2016-13, "Financial Instruments - Credit Losses (Topic ~~848)~~326): ~~Scope,~~Measurement of Credit Losses on Financial Instruments." ~~which amended Topic 848 reference rate reform to clarify the scope and availability of expedients~~We adopted ASU 2016-13 on January 1, 2020. ASU 2022-02 enhances disclosure requirements for certain ~~derivative instruments affected~~loan refinancing and restructurings by ~~reference rate reform. We~~creditors when a borrower is experiencing financial difficulty. In addition, ASU 2022-02 amends the guidance on vintage disclosures to require entities to disclose current-period gross write-offs by year of origination.

For entities that have ~~elected various optional expedients in Topic 848 related to hedging relationships and expect to make future elections related to contract modifications and other hedging relationships.~~ adopted ASU 2016-13, ASU 2022-02 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted if an entity has adopted ASU 2016-13.

The ~~future election and application~~adoption of ~~these expedients are~~ASU 2022-02 is not expected to have a material impact on our consolidated financial statements.

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 interest payments on certain commercial loans we make to GM-franchised dealers.

We are included in GM's consolidated U.S. federal income tax returns and certain U.S. state returns, and we are obligated to pay GM for our share of tax liabilities. During the six months ended June 30, ~~2021,~~2022, we made ~~estimated~~ payments of ~~$328~~$380 million to GM for state and federal income taxes related to the years ~~2021 and 2020.~~2020 through 2022. Amounts owed to GM for income taxes are ~~accrued and~~ recorded as a related party payable. In addition, amounts due to GM for commercial finance receivables originated but not yet funded are recorded as a related party payable.

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GENERAL MOTORS FINANCIAL COMPANY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The following tables present related party transactions:


Balance Sheet Data	Balance Sheet Data	June 30, 2021		December 31, 2020		Balance Sheet Data	June 30, 2022		December 31, 2021
Commercial finance receivables, net due from dealers consolidated by GM(a)	Commercial finance receivables, net due from dealers consolidated by GM(a)	$	261	$	398	Commercial finance receivables, net due from dealers consolidated by GM(a)	$	133	$	163
Subvention receivable(b)	Subvention receivable(b)	$	590	$	642	Subvention receivable(b)	$	475	$	282

Commercial loan funding payable(c)	Commercial loan funding payable(c)	$	30	$	23	Commercial loan funding payable(c)	$	41	$	26
Taxes payable(c)	Taxes payable(c)	$	325	$	244	Taxes payable(c)	$	37	$	282


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended June 30,				Six Months Ended June 30,
Income Statement Data	Income Statement Data	2021		2020		2021		2020		Income Statement Data	2022		2021		2022		2021
Interest subvention earned on retail finance receivables(d)	Interest subvention earned on retail finance receivables(d)	$	204	$	151	$	383	$	292	Interest subvention earned on retail finance receivables(d)	$	221	$	204	$	431	$	383
Interest subvention earned on commercial finance receivables(d)	Interest subvention earned on commercial finance receivables(d)	$	7	$	11	$	16	$	26	Interest subvention earned on commercial finance receivables(d)	$	14	$	7	$	24	$	16
Leased vehicle subvention earned(e)	Leased vehicle subvention earned(e)	$	704	$	765	$	1,425	$	1,570	Leased vehicle subvention earned(e)	$	500	$	704	$	1,047	$	1,425

_________________

(a)Included in finance receivables, net.

(b)Included in related party receivables. We received subvention payments from GM of $561 million and $1.0 billion ~~and~~ ~~$967 million~~ for the three months ended June 30, 2022 and 2021, and ~~2020~~$1.0 billion and $2.0 billion for ~~both~~ the six months ended June 30, ~~2021~~2022 and ~~2020.~~2021.

(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 agrees to certain provisions in the Support Agreement intended to ensure we maintain adequate access to liquidity. Pursuant to these provisions, GM provides us with a $1.0 billion junior subordinated unsecured intercompany revolving credit facility, ~~(the Junior Subordinated Revolving Credit Facility),~~ and GM ~~agrees to~~will use commercially reasonable efforts to ensure we will continue to be designated as a subsidiary borrower under GM's corporate revolving credit facilities. We have access, subject to available capacity, to $15.5 billion of GM's unsecured revolving credit facilities consisting of a three-year, $4.3 billion facility and a five-year, $11.2 billion facility. We also have exclusive access to ~~the GM~~GM's $2.0 billion 364-day revolving credit facility (GM Revolving ~~364-Day~~364-day Credit Facility).

We had no borrowings outstanding under any of the GM revolving credit facilities at June 30, 2022 and December 31, 2021. In April ~~2021,~~2022, GM increased the total borrowing capacity of the five-year, $10.5 billion facility to $11.2 billion and extended the termination date for a $9.9 billion portion of the five-year facility by three years, which now matures on April 18, 2026. The termination date of April 18, 2023 for the remaining portion of the five-year facility remains unchanged. GM also renewed and increased the total borrowing capacity of the three-year, $4.0 billion facility to $4.3 billion, which now matures on April 7, 2024, and renewed the GM Revolving 364-Day Credit Facility, which now matures on April ~~6, 2022. At June 30, 2021, we had no borrowings outstanding under any of the GM revolving credit facilities.~~4, 2023.

Cruise is the GM global segment responsible for the development and commercialization of autonomous vehicle technology. ~~In July 2019, we entered into~~We have a multi-year credit agreement with Cruise whereby we may provide advances to Cruise up to an aggregate of $5.0 billion, over time, through 2024, to fund the purchase of autonomous vehicles from GM. ~~The agreement was amended in May 2021 to provide an aggregate funding of up to $5.2 billion over time. At June 30, 2021,~~ Cruise had 0an insignificant amount of borrowings outstanding under the credit ~~agreement.~~

agreement at June 30, 2022 and 0 borrowings outstanding at December 31, 2021.

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GENERAL MOTORS FINANCIAL COMPANY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Note 3. Finance Receivables


		June 30, 2021		December 31, 2020			June 30, 2022		December 31, 2021
Retail finance receivables	Retail finance receivables					Retail finance receivables
Retail finance receivables, net of fees(a)	Retail finance receivables, net of fees(a)	$	56,357	$	51,288	Retail finance receivables, net of fees(a)	$	61,208	$	58,093
Less: allowance for loan losses	Less: allowance for loan losses	(1,805)		(1,915)		Less: allowance for loan losses	(1,987)		(1,839)
Total retail finance receivables, net	Total retail finance receivables, net	54,552		49,373		Total retail finance receivables, net	59,220		56,254
Commercial finance receivables	Commercial finance receivables					Commercial finance receivables
Commercial finance receivables, net of fees(b)	Commercial finance receivables, net of fees(b)	5,705		9,080		Commercial finance receivables, net of fees(b)	7,666		6,772
Less: allowance for loan losses	Less: allowance for loan losses	(45)		(63)		Less: allowance for loan losses	(40)		(47)
Total commercial finance receivables, net	Total commercial finance receivables, net	5,660		9,017		Total commercial finance receivables, net	7,626		6,725
Total finance receivables, net	Total finance receivables, net	$	60,212	$	58,390	Total finance receivables, net	$	66,847	$	62,979
Fair value utilizing Level 2 inputs	Fair value utilizing Level 2 inputs	$	5,660	$	9,017	Fair value utilizing Level 2 inputs	$	7,626	$	6,725
Fair value utilizing Level 3 inputs	Fair value utilizing Level 3 inputs	$	56,490	$	51,645	Fair value utilizing Level 3 inputs	$	58,528	$	57,613

________________

(a) Net of unearned income, unamortized premiums and discounts, and deferred fees and costs.

(b) Net of dealer cash management balances of ~~$1.1~~$1.3 billion and ~~$1.4~~$1.0 billion at June 30, ~~2021~~2022 and December 31, ~~2020.~~2021.

Rollforward of Allowance for Retail Loan Losses A summary of the activity in the allowance for retail loan losses is as follows:

Three Months Ended June 30, Six Months Ended June 30,
2021 2020 2021 2020
Allowance for retail loan losses beginning balance $ 1,784 $ 1,879 $ 1,915 $ 866
Impact of adopting ASU 2016-13 0 0 0 801
Provision for loan losses 67 332 54 788
Charge-offs (204) (256) (457) (596)
Recoveries 144 89 293 245
Foreign currency translation 14 0 0 (60)
Allowance for retail loan losses ending balance $ 1,805 $ 2,044 $ 1,805 $ 2,044

The allowance for retail loan losses decreased by $239 million as of June 30, 2021 compared to June 30, 2020, primarily due to a reduction in the reserve levels established during the six months ended June 30, 2020, following the onset of the COVID-19 pandemic, as a result of actual credit performance that was better than forecast and favorable expectations for future charge-offs and recoveries, reflecting improved forecast economic conditions. These reductions in the reserve levels were partially offset by reserves established for loan originations during the six months ended June 30, 2021.


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Allowance for retail loan losses beginning balance	$	1,884	$	1,784	$	1,839	$	1,915
Provision for loan losses	202		67		328		54
Charge-offs	(247)		(204)		(521)		(457)
Recoveries	161		144		339		293
Foreign currency translation	(14)		14		4		—
Allowance for retail loan losses ending balance	$	1,987	$	1,805	$	1,987	$	1,805

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. The following tables are consolidated summaries of the amortized cost of the retail finance receivables by FICO score or its equivalent, determined at origination, for each vintage of the portfolio at June 30, ~~2021~~2022 and December 31, ~~2020:~~2021:


		Year of Origination												June 30, 2021					Year of Origination												June 30, 2022
		2021		2020		2019		2018		2017		Prior		Total		Percent			2022		2021		2020		2019		2018		Prior		Total		Percent
Prime - FICO Score 680 and greater	Prime - FICO Score 680 and greater	$	11,303	$	15,390	$	5,414	$	3,263	$	1,261	$	328	$	36,959	65.6	%	Prime - FICO Score 680 and greater	$	12,052	$	16,089	$	9,915	$	3,048	$	1,574	$	464	$	43,141	70.5	%
Near-prime - FICO Score 620 to 679	Near-prime - FICO Score 620 to 679	2,434		3,045		1,639		907		420		168		8,613		15.3		Near-prime - FICO Score 620 to 679	1,704		3,183		1,883		932		459		204		8,366		13.7
Sub-prime - FICO Score less than 620	Sub-prime - FICO Score less than 620	2,586		3,193		2,317		1,318		836		535		10,785		19.1		Sub-prime - FICO Score less than 620	1,826		3,323		1,986		1,356		699		512		9,701		15.8
Retail finance receivables, net of fees	Retail finance receivables, net of fees	$	16,323	$	21,628	$	9,370	$	5,488	$	2,517	$	1,031	$	56,357	100.0	%	Retail finance receivables, net of fees	$	15,582	$	22,595	$	13,784	$	5,337	$	2,732	$	1,179	$	61,208	100.0	%


	Year of Origination												December 31, 2021
	2021		2020		2019		2018		2017		Prior		Total		Percent
Prime - FICO Score 680 and greater	$	19,729	$	12,408	$	4,078	$	2,298	$	763	$	143	$	39,419	67.9	%
Near-prime - FICO Score 620 to 679	3,856		2,388		1,229		648		274		84		8,479		14.6
Sub-prime - FICO Score less than 620	4,053		2,528		1,777		972		570		295		10,195		17.5
Retail finance receivables, net of fees	$	27,638	$	17,324	$	7,084	$	3,918	$	1,607	$	522	$	58,093	100.0	%

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GENERAL MOTORS FINANCIAL COMPANY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Year of Origination December 31, 2020
2020 2019 2018 2017 2016 Prior Total Percent
Prime - FICO Score 680 and greater $ 18,685 $ 7,033 $ 4,491 $ 1,917 $ 555 $ 119 $ 32,800 64.0 %
Near-prime - FICO Score 620 to 679 3,695 2,097 1,232 603 225 83 7,935 15.4
Sub-prime - FICO Score less than 620 3,803 2,920 1,740 1,173 610 307 10,553 20.6
Retail finance receivables, net of fees $ 26,183 $ 12,050 $ 7,463 $ 3,693 $ 1,390 $ 509 $ 51,288 100.0 %

We review the ongoing 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 the 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 tables are consolidated summaries of the delinquency status of the outstanding amortized cost of retail finance receivables for each vintage of the portfolio at June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, as well as summary totals for June 30, ~~2020:~~2021:


		Year of Origination												June 30, 2021				June 30, 2020					Year of Origination												June 30, 2022				June 30, 2021
		2021		2020		2019		2018		2017		Prior		Total		Percent		Total		Percent			2022		2021		2020		2019		2018		Prior		Total		Percent		Total		Percent
0 - 30 days	0 - 30 days	$	16,224	$	21,320	$	9,063	$	5,285	$	2,375	$	920	$	55,187	97.9	%	$	44,869	96.5	%	0 - 30 days	$	15,468	$	22,088	$	13,426	$	5,076	$	2,577	$	1,046	$	59,681	97.5	%	$	55,187	97.9	%

31 - 60 days	31 - 60 days	75		221		222		150		106		82		856		1.5		998		2.2		31 - 60 days	88		369		262		193		117		99		1,129		1.8		856		1.5
Greater than 60 days	Greater than 60 days	22		78		77		49		33		27		286		0.5		601		1.3		Greater than 60 days	23		118		87		62		35		31		355		0.6		286		0.5
Finance receivables more than 30 days delinquent	Finance receivables more than 30 days delinquent	97		299		299		199		139		109		1,142		2.0		1,599		3.5		Finance receivables more than 30 days delinquent	111		487		350		254		152		130		1,484		2.4		1,142		2.0
In repossession	In repossession	2		9		8		4		3		2		28		0.1		21		0.0		In repossession	3		19		9		6		3		3		43		0.1		28		0.1
Finance receivables more than 30 days delinquent or in repossession	Finance receivables more than 30 days delinquent or in repossession	99		308		307		203		142		111		1,170		2.1		1,620		3.5		Finance receivables more than 30 days delinquent or in repossession	114		506		358		260		155		133		1,527		2.5		1,170		2.1
Retail finance receivables, net of fees	Retail finance receivables, net of fees	$	16,323	$	21,628	$	9,370	$	5,488	$	2,517	$	1,031	$	56,357	100.0	%	$	46,489	100.0	%	Retail finance receivables, net of fees	$	15,582	$	22,595	$	13,784	$	5,337	$	2,732	$	1,179	$	61,208	100.0	%	$	56,357	100.0	%


		Year of Origination												December 31, 2020					Year of Origination												December 31, 2021
		2020		2019		2018		2017		2016		Prior		Total		Percent			2021		2020		2019		2018		2017		Prior		Total		Percent
0 - 30 days	0 - 30 days	$	25,894	$	11,591	$	7,131	$	3,454	$	1,249	$	421	$	49,740	97.0	%	0 - 30 days	$	27,270	$	16,945	$	6,772	$	3,721	$	1,478	$	440	$	56,626	97.5	%

31 - 60 days	31 - 60 days	210		325		235		170		102		61		1,103		2.1		31 - 60 days	273		276		230		147		97		60		1,083		1.8
Greater than 60 days	Greater than 60 days	72		123		90		64		37		26		412		0.8		Greater than 60 days	83		93		76		46		30		21		349		0.6
Finance receivables more than 30 days delinquent	Finance receivables more than 30 days delinquent	282		448		325		234		139		87		1,515		2.9		Finance receivables more than 30 days delinquent	356		369		306		193		127		81		1,432		2.4
In repossession	In repossession	7		11		7		5		2		1		33		0.1		In repossession	12		10		6		4		2		1		35		0.1
Finance receivables more than 30 days delinquent or in repossession	Finance receivables more than 30 days delinquent or in repossession	289		459		332		239		141		88		1,548		3.0		Finance receivables more than 30 days delinquent or in repossession	368		379		312		197		129		82		1,467		2.5
Retail finance receivables, net of fees	Retail finance receivables, net of fees	$	26,183	$	12,050	$	7,463	$	3,693	$	1,390	$	509	$	51,288	100.0	%	Retail finance receivables, net of fees	$	27,638	$	17,324	$	7,084	$	3,918	$	1,607	$	522	$	58,093	100.0	%

The accrual of finance charge income had been suspended on retail finance receivables with contractual amounts due of ~~$555~~$583 million and ~~$714~~$602 million at June 30, ~~2021~~2022 and December 31, ~~2020.~~2021. Accrual of finance charge income on retail finance receivables is generally suspended on accounts that are more than 60 days delinquent, accounts in bankruptcy and accounts in repossession.

Impaired Retail Finance Receivables - TDRsThe outstanding amortized cost of retail finance receivables that are considered TDRs were $1.9 billion at June 30, 2022 and December 31, 2021, including nonaccrual loans of $200 million at June 30, 2022 and $219 million at December 31, 2021. For definition and additional information on TDRs, see Note 1 in our 2021 Form 10-K. Additional TDR activity is presented below:


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Number of loans classified as TDRs during the period	13,278		9,044		25,126		20,420
Outstanding amortized cost of loans classified as TDRs during the period	$	278	$	183	$	516	$	417

The unpaid principal balances, net of recoveries, of loans charged off during the reporting period and were within 12 months of being modified as a TDR were insignificant for the three and six months ended June 30, 2022 and 2021.

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GENERAL MOTORS FINANCIAL COMPANY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

~~Impaired Retail Finance Receivables - TDRs~~The outstanding amortized cost of retail finance receivables that are considered troubled debt restructurings (TDRs) was $2.0 billion, including $213 million in nonaccrual loans at June 30, 2021, and $2.2 billion, including $301 million in nonaccrual loans at December 31, 2020. Additional TDR activity is presented below:

Three Months Ended June 30, Six Months Ended June 30,
2021 2020 2021 2020
Number of loans classified as TDRs during the period 9,044 14,378 20,420 29,646
Outstanding amortized cost of loans classified as TDRs during the period $ 183 $ 248 $ 417 $ 535

The unpaid principal balances, net of recoveries, of loans charged off during the reporting period within 12 months of being modified as a TDR were $12 million and $17 million for the three months ended June 30, 2021 and 2020 and $22 million and $30 million for the six months ended June 30, 2021 and 2020.

Commercial Credit Quality Our commercial finance receivables consist of dealer financings, primarily for dealer 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.

Our commercial risk model and risk rating categories are as follows:


Dealer Risk Rating						Description
I						Performing accounts with strong to acceptable financial metrics with at least satisfactory capacity to meet financial commitments.
II						Performing accounts experiencing potential weakness in financial metrics and repayment prospects resulting in increased monitoring.
III						Non-Performing accounts with inadequate paying capacity for current obligations and that have the distinct possibility of creating a loss if deficiencies are not corrected.
IV						Non-Performing accounts with inadequate paying capacity for current obligations and inherent weaknesses that make collection or liquidation in full highly questionable or improbable.

Dealers with III and IV risk ratings are subject to additional monitoring and restrictions on funding, including suspension of lines of credit and liquidation of assets. The following tables summarize the credit risk profile by dealer risk rating of commercial finance receivables at June 30, ~~2021~~2022 and December 31, ~~2020:~~2021:


		Year of Origination(a)														June 30, 2021					Year of Origination														June 30, 2022
Dealer Risk Rating	Dealer Risk Rating	Revolving		2021		2020		2019		2018		2017		Prior		Total		Percent		Dealer Risk Rating	Revolving		2022		2021		2020		2019		2018		Prior		Total		Percent
I	I	$	4,149	$	227	$	507	$	147	$	56	$	72	$	43	$	5,201	91.2	%	I	$	6,024	$	353	$	395	$	406	$	110	$	49	$	38	$	7,374	96.2	%
II	II	298		5		18		18		0		11		5		355		6.2		II	190		15		3		—		12		—		8		229		3.0
III	III	103		8		0		3		28		2		5		149		2.6		III	59		1		2		—		1		—		—		63		0.8
IV	IV	0		0		0		0		0		0		0		0		0		IV	—		—		—		—		—		—		—		—		—
Balance at end of period	Balance at end of period	$	4,550	$	240	$	525	$	168	$	84	$	85	$	53	$	5,705	100.0	%	Balance at end of period	$	6,273	$	368	$	400	$	406	$	123	$	49	$	47	$	7,666	100.0	%

~~________________~~


	Year of Origination														December 31, 2021
Dealer Risk Rating	Revolving		2021		2020		2019		2018		2017		Prior		Total		Percent
I	$	5,296	$	433	$	426	$	131	$	57	$	50	$	10	$	6,403	94.6	%
II	213		5		16		12		1		10		—		257		3.8
III	81		8		15		2		—		2		4		112		1.6
IV	—		—		—		—		—		—		—		—		—
Balance at end of period	$	5,590	$	446	$	457	$	145	$	58	$	62	$	14	$	6,772	100.0	%

~~(a)~~ Floorplan advances comprise 93% and 94% of the total revolving ~~balance.~~balances at June 30, 2022 and December 31, 2021. Dealer term loans are presented by year of origination.

Year of Origination(a)
December 31, 2020
Dealer Risk Rating Revolving 2020 2019 2018 2017 2016 Prior Total Percent
I $ 7,210 $ 579 $ 179 $ 77 $ 110 $ 43 $ 19 $ 8,217 90.5 %
II 508 2 18 11 15 18 34 606 6.7
III 203 0 8 29 2 11 0 253 2.8
IV 0 0 0 0 0 0 4 4 0.0
Balance at end of period $ 7,921 $ 581 $ 205 $ 117 $ 127 $ 72 $ 57 $ 9,080 100.0 %

~~________________~~

~~(a) Floorplan advances comprise 97% of the total revolving balance. Dealer term loans are presented by year of origination.~~

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~~GENERAL MOTORS FINANCIAL COMPANY, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)~~

At June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, substantially all of our commercial finance receivables were current with respect to payment status, and activity in the allowance for commercial loan losses was insignificant for the three and six months ended June 30, ~~2021~~2022 and ~~2020. Commercial~~2021. There were 0 commercial finance receivables on nonaccrual status ~~were insignificant,~~ and ~~none~~NaN were classified as TDRs at June 30, ~~2021~~2022 and December 31, ~~2020.~~2021.

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GENERAL MOTORS FINANCIAL COMPANY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Note 4. Leased Vehicles


		June 30, 2021		December 31, 2020			June 30, 2022		December 31, 2021
Leased vehicles	Leased vehicles	$	58,702	$	58,915	Leased vehicles	$	50,034	$	54,821
Manufacturer subvention	Manufacturer subvention	(8,485)		(8,915)		Manufacturer subvention	(6,108)		(7,398)
Net capitalized cost	Net capitalized cost	50,217		50,000		Net capitalized cost	43,925		47,423
Less: accumulated depreciation	Less: accumulated depreciation	(9,621)		(10,181)		Less: accumulated depreciation	(8,618)		(9,494)
Leased vehicles, net	Leased vehicles, net	$	40,596	$	39,819	Leased vehicles, net	$	35,307	$	37,929

Depreciation expense related to leased vehicles, net was $1.2 billion and $1.5 billion ~~and $1.9 billion in~~for the three months ended June 30, 2022 and 2021 and ~~2020~~$2.4 billion and $3.2 billion ~~and $3.7 billion in~~for the six months ended June 30, ~~2021~~2022 and ~~2020.~~2021.

The following table summarizes minimum rental payments due to us as lessor under operating leases at June 30, ~~2021:~~2022:

Years Ending December 31,
2021 2022 2023 2024 2025 Thereafter Total
Lease payments under operating leases $ 3,315 $ 5,016 $ 2,695 $ 559 $ 30 $ 0 $ 11,615


	Years Ending December 31,
	2022		2023		2024		2025		2026		Thereafter		Total
Lease payments under operating leases	$	2,791	$	4,179	$	1,977	$	422	$	22	$	—	$	9,393

Note 5. Equity in Net Assets of Non-consolidated Affiliates

We use the equity method to account for our equity interest in joint ventures. The income of these joint ventures is not consolidated into our financial statements; rather, our proportionate share of the earnings is reflected as equity income.

There have been no ownership changes in our joint ventures since December 31, ~~2020.~~2021. The following table presents certain aggregated operating data of our joint ventures:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended June 30,				Six Months Ended June 30,
Summarized Operating Data	Summarized Operating Data	2021		2020		2021		2020		Summarized Operating Data	2022		2021		2022		2021
Finance charge income	Finance charge income	$	418	$	335	$	848	$	694	Finance charge income	$	424	$	418	$	875	$	848
Income before income taxes	Income before income taxes	$	191	$	158	$	394	$	254	Income before income taxes	$	190	$	191	$	396	$	394
Net income	Net income	$	143	$	118	$	296	$	190	Net income	$	143	$	143	$	297	$	296

In June 2022, we received the remaining dividend payment of $26 million from SAIC-GMAC Automotive Finance Company Limited declared in 2021, and reinvested it in SAIC-GMF Leasing Co. Ltd.

At June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, we had undistributed earnings of ~~$751~~$845 million and ~~$647~~$740 million related to our non-consolidated affiliates. In July 2021, SAIC-GMAC Automotive Finance Company Limited (SAIC-GMAC) declared a $309 million cash dividend of which our share was $108 million. The dividend payment, net of tax, is expected to be received in the fourth quarter of 2021.

Note 6. Debt


	June 30, 2022				December 31, 2021
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Secured debt
Revolving credit facilities	$	1,288	$	1,288	$	3,497	$	3,495
Securitization notes payable	36,806		36,296		35,841		35,906
Total secured debt	38,095		37,584		39,338		39,401
Unsecured debt
Senior notes	47,003		44,672		45,386		46,539
Credit facilities	1,348		1,324		1,229		1,211
Other unsecured debt	7,158		7,152		6,608		6,607
Total unsecured debt	55,509		53,148		53,223		54,357
Total secured and unsecured debt	$	93,603	$	90,732	$	92,561	$	93,758
Fair value utilizing Level 2 inputs			$	89,003			$	92,250
Fair value utilizing Level 3 inputs			$	1,729			$	1,508

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GENERAL MOTORS FINANCIAL COMPANY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

~~Note 6. Debt~~

June 30, 2021 December 31, 2020
Carrying Amount Fair Value Carrying Amount Fair Value
Secured debt
Revolving credit facilities $ 1,268 $ 1,267 $ 3,733 $ 3,735
Securitization notes payable 37,731 38,005 36,249 36,645
Total secured debt 38,999 39,272 39,982 40,380
Unsecured debt
Senior notes 47,819 49,755 46,798 48,922
Credit facilities 1,298 1,291 1,535 1,531
Other unsecured debt 5,454 5,449 4,110 4,115
Total unsecured debt 54,571 56,495 52,443 54,568
Total secured and unsecured debt $ 93,570 $ 95,767 $ 92,425 $ 94,948
Fair value utilizing Level 2 inputs $ 93,907 $ 92,922
Fair value utilizing Level 3 inputs $ 1,860 $ 2,026

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 information.

During the six months ended June 30, ~~2021,~~2022, we renewed credit facilities with a total borrowing capacity of ~~$18.7~~$10.6 billion, and we issued ~~$13.4~~$12.3 billion in aggregate principal amount of securitization notes payable with an initial weighted average interest rate of ~~0.75%~~2.57% and maturity dates ranging from ~~2022~~2023 to ~~2028.~~2029.

Unsecured Debt During the six months ended June 30, ~~2021,~~2022, we issued ~~$8.3~~$7.6 billion in aggregate principal amount of senior notes with an initial weighted average interest rate of ~~1.65%~~3.35% and maturity dates ranging from 2024 to ~~2031.~~2032.

~~In July 2021, we issued CAD $400 million in senior notes with an interest rate of 1.70% due in 2025.~~

General Motors Financial Company, Inc. is the sole guarantor of its subsidiaries' unsecured debt obligations for which a guarantee is provided.

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 debt obligations contain covenants including limitations on our ability to incur certain liens. At June 30, ~~2021,~~2022, we were in compliance with these debt covenants.

Note 7. Variable Interest Entities and Other Transfers of Finance Receivables

Securitizations and Credit Facilities The following table summarizes the assets and liabilities related to our consolidated VIEs:


		June 30, 2021		December 31, 2020			June 30, 2022		December 31, 2021
Restricted cash(a)	Restricted cash(a)	$	3,667	$	2,639	Restricted cash(a)	$	2,719	$	2,740
Finance receivables, net of fees	Finance receivables, net of fees	$	27,993	$	32,575	Finance receivables, net of fees	$	31,962	$	31,940
Lease related assets	Lease related assets	$	17,413	$	16,322	Lease related assets	$	16,266	$	16,143
Secured debt	Secured debt	$	38,601	$	39,424	Secured debt	$	38,044	$	39,277

_______________

(a) Included in other assets.

We use SPEs that are considered VIEs to issue variable funding notes to third-party, bank-sponsored warehouse facilities or asset-backed securities to investors in securitization transactions. The debt issued by these VIEs is backed by finance receivables and leasing-related assets transferred to the VIEs. We determined that we are the primary beneficiary of the VIEs because our servicing responsibilities give us the power to direct the activities that most significantly impact the performance of the VIEs and our variable interests in the VIEs give us the obligation to absorb losses and the right to receive residual returns

~~Table of Contents~~

~~GENERAL MOTORS FINANCIAL COMPANY, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)~~

that could potentially be significant. The respective assets of the VIEs serve as the sole source of repayment for the debt issued by these entities. Investors in the notes issued by the VIEs do not have recourse to us or our other assets, with the exception of customary representation and warranty repurchase provisions and indemnities that we provide as the servicer. We are not required, and do not currently intend, to provide any additional financial support to these VIEs. While these ~~VIE~~ subsidiaries are included in our condensed consolidated financial statements, ~~they~~these subsidiaries are separate legal entities and ~~their~~the finance receivables, lease-related assets and cash held by these subsidiaries are legally owned by them and are not available to our ~~creditors.~~creditors or creditors of our other subsidiaries.

Other Transfers of Finance Receivables Under certain debt agreements, we transfer finance receivables to entities that we do not control through majority voting interest or through contractual arrangements. These transfers do not meet the criteria to be considered sales under GAAP; therefore, the finance receivables and the related debt are included in our condensed consolidated financial statements, similar to the treatment of finance receivables and related debt of our consolidated VIEs. Any collections received on the transferred receivables are available only for the repayment of the related debt. At June 30, ~~2021~~2022 and December 31, ~~2020, $524~~2021, $145 million and ~~$863~~$500 million in finance receivables had been transferred in secured funding arrangements to third-party banks, relating to ~~$468~~$120 million and ~~$622~~$125 million in secured debt outstanding.

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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 risk, primarily by managing the amount, sources, and duration of our assets and liabilities and by using 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 fair value amounts of our derivative financial instruments and the associated notional amounts:


		June 30, 2021						December 31, 2020							June 30, 2022						December 31, 2021
		Notional		Fair Value of Assets(a)		Fair Value of Liabilities(a)		Notional		Fair Value of Assets(a)		Fair Value of Liabilities(a)			Notional		Fair Value of Assets		Fair Value of Liabilities		Notional		Fair Value of Assets		Fair Value of Liabilities
Derivatives designated as hedges	Derivatives designated as hedges													Derivatives designated as hedges
Fair value hedges	Fair value hedges													Fair value hedges
Interest rate swaps	Interest rate swaps	$	18,112	$	319	$	75	$	10,064	$	463	$	13	Interest rate swaps	$	21,600	$	2	$	536	$	15,058	$	74	$	88
Foreign currency swaps	Foreign currency swaps	712		0		30		1,958		128		9		Foreign currency swaps	—		—		—		682		—		59
Cash flow hedges	Cash flow hedges													Cash flow hedges
Interest rate swaps	Interest rate swaps	835		4		14		921		0		27		Interest rate swaps	806		25		—		611		12		4
Foreign currency swaps	Foreign currency swaps	6,418		204		99		5,626		278		47		Foreign currency swaps	7,444		7		649		7,419		85		201
Derivatives not designated as hedges	Derivatives not designated as hedges													Derivatives not designated as hedges
Interest rate contracts	Interest rate contracts	108,734		778		409		110,997		954		576		Interest rate contracts	109,673		1,526		1,183		110,053		846		339
Total(b)		$	134,811	$	1,305	$	627	$	129,566	$	1,823	$	672
Foreign currency contracts														Foreign currency contracts	—		—		—		148		—		—
Total														Total	$	139,523	$	1,560	$	2,368	$	133,971	$	1,017	$	691

~~_________________~~

~~(a)~~The gross amounts of the fair value of our derivative instruments that are classified as assets or liabilities are included in other assets or other liabilities, respectively. Amounts accrued for interest payments in a net receivable position are included in other assets. Amounts accrued for interest payments in a net payable position are included in other liabilities. 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 derivative instruments through AmeriCredit Financial Services, Inc. (AFSI); however, our SPEs may also be parties to derivative instruments. Agreements between AFSI and its derivative counterparties include rights of setoff for positions with offsetting values or for collateral held or posted. At June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the fair value of derivative instruments that are classified as assets or liabilities available for offset was ~~$472~~$970 million and ~~$501~~$505 million. At June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, we held ~~$509~~$272 million and ~~$728~~$376 million of collateral from counterparties that iswas available for netting against our asset positions. At June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, we ~~posted $104~~had $864 million and ~~$139~~$45 million of collateral posted to counterparties that iswas available for netting against our liability positions.

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GENERAL MOTORS FINANCIAL COMPANY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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:

Carrying Amount of
Hedged Items
Cumulative Amount of Fair Value
Hedging Adjustments(a)
June 30, 2021 December 31, 2020 June 30, 2021 December 31, 2020
Unsecured debt $ 24,622 $ 23,315 $ (381) $ (739)


	Carrying Amount of Hedged Items				Cumulative Amount of Fair Value Hedging Adjustments(a)
	June 30, 2022		December 31, 2021		June 30, 2022		December 31, 2021
Unsecured debt	$	28,646	$	24,964	$	454	$	(226)

_________________

(a)Includes ~~$223~~$94 million and ~~$200~~$246 million of unamortized gains remaining on hedged items for which hedge accounting has been discontinued at June 30, ~~2021~~2022 and December 31, ~~2020.~~2021.

The table below presents the effect of our derivative financial instruments in the condensed consolidated statements of income:


		Three Months Ended June 30,								Six Months Ended June 30,									Three Months Ended June 30,								Six Months Ended June 30,
		2021				2020				2021				2020					2022				2021				2022				2021
		Interest Expense(a)		Operating Expenses(b)		Interest Expense(a)		Operating Expenses(b)		Interest Expense(a)		Operating Expenses(b)		Interest Expense(a)		Operating Expenses(b)			Interest Expense(a)		Operating Expenses(b)		Interest Expense(a)		Operating Expenses(b)		Interest Expense(a)		Operating Expenses(b)		Interest Expense(a)		Operating Expenses(b)
Fair value hedges	Fair value hedges																	Fair value hedges
Hedged items - interest rate swaps	Hedged items - interest rate swaps	$	(107)	$	0	$	(66)	$	0	$	245	$	0	$	(569)	$	0	Hedged items - interest rate swaps	$	301	$	—	$	(107)	$	—	$	677	$	—	$	245	$	—
Interest rate swaps	Interest rate swaps	118		0		(56)		0		(217)		0		375		0		Interest rate swaps	(282)		—		118		—		(622)		—		(217)		—
Hedged items - foreign currency swaps(c)	Hedged items - foreign currency swaps(c)	0		(45)		0		(41)		0		32		0		(1)		Hedged items - foreign currency swaps(c)	—		—		—		(45)		—		23		—		32
Foreign currency swaps	Foreign currency swaps	(4)		48		(9)		43		(9)		(28)		(21)		4		Foreign currency swaps	—		—		(4)		48		(2)		(24)		(9)		(28)
Cash flow hedges	Cash flow hedges																	Cash flow hedges
Interest rate swaps	Interest rate swaps	(5)		0		(2)		0		(10)		0		(3)		0		Interest rate swaps	3		—		(5)		—		5		—		(10)		—
Hedged items - foreign currency swaps(c)	Hedged items - foreign currency swaps(c)	0		(38)		0		(113)		0		152		0		(7)		Hedged items - foreign currency swaps(c)	—		499		—		(38)		—		659		—		152
Foreign currency swaps	Foreign currency swaps	(30)		38		(28)		113		(60)		(152)		(57)		7		Foreign currency swaps	(42)		(499)		(30)		38		(81)		(659)		(60)		(152)
Derivatives not designated as hedges	Derivatives not designated as hedges																	Derivatives not designated as hedges
Interest rate contracts	Interest rate contracts	19		0		109		0		39		0		161		0		Interest rate contracts	28		—		19		—		28		—		39		—
Total (losses) income recognized		$	(9)	$	3	$	(52)	$	2	$	(12)	$	4	$	(114)	$	3
Total income (loss) recognized																		Total income (loss) recognized	$	8	$	—	$	(9)	$	3	$	5	$	—	$	(12)	$	4

_________________

(a)Total interest expense was ~~$633~~$642 million and ~~$788~~$633 million for the three months ended June 30, 2022 and 2021, and ~~2020~~$1.2 billion and $1.3 ~~billion and $1.6~~ billion for the six months ended June 30, ~~2021~~2022 and ~~2020.~~2021.

(b)Total operating expenses were ~~$378~~$393 million and ~~$345~~$378 million for the three months ended June 30, 2022 and 2021, and ~~2020~~$766 million and $789 ~~million and $703~~ million for the six months ended June 30, ~~2021~~2022 and ~~2020.~~2021.

(c)Transaction activity recorded in operating expenses related to foreign currency-denominated loans.

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GENERAL MOTORS FINANCIAL COMPANY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The ~~table~~tables below ~~presents~~present the effect of our derivative financial instruments in the condensed consolidated statements of comprehensive ~~income:~~income (loss):


		Gains (Losses) Recognized In Accumulated Other Comprehensive Loss									Gains (Losses) Recognized In Accumulated Other Comprehensive Income (Loss)
		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2021		2020		2021		2020			2022		2021		2022		2021
Fair value hedges	Fair value hedges									Fair value hedges
Foreign currency swaps	Foreign currency swaps	$	(1)	$	(7)	$	(4)	$	(12)	Foreign currency swaps	$	—	$	(1)	$	(2)	$	(4)
Cash flow hedges	Cash flow hedges									Cash flow hedges
Interest rate swaps	Interest rate swaps	1		(9)		6		(15)		Interest rate swaps	6		1		10		6
Foreign currency swaps	Foreign currency swaps	(6)		39		(131)		(180)		Foreign currency swaps	(392)		(6)		(449)		(131)
Total	Total	$	(6)	$	23	$	(129)	$	(207)	Total	$	(386)	$	(6)	$	(441)	$	(129)


		(Gains) Losses Reclassified From Accumulated Other Comprehensive Loss Into Income(a)(b)									(Gains) Losses Reclassified From Accumulated Other Comprehensive Income (Loss) Into Income
		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2021		2020		2021		2020			2022		2021		2022		2021
Fair value hedges	Fair value hedges									Fair value hedges
Foreign currency swaps	Foreign currency swaps	$	1	$	5	$	4	$	13	Foreign currency swaps	$	—	$	1	$	2	$	4
Cash flow hedges	Cash flow hedges									Cash flow hedges
Interest rate swaps	Interest rate swaps	4		1		7		2		Interest rate swaps	(2)		4		(3)		7
Foreign currency swaps	Foreign currency swaps	(6)		(63)		160		41		Foreign currency swaps	408		(6)		557		160
Total	Total	$	(1)	$	(57)	$	171	$	56	Total	$	406	$	(1)	$	557	$	171

~~_________________~~

~~(a)~~All amounts reclassified from accumulated other comprehensive ~~loss~~income (loss) were recorded to interest expense.

~~(b)~~During the next ~~twelve~~12 months, we estimate ~~$74~~$51 million in ~~losses~~gains will be reclassified into pre-tax earnings from derivatives designated for hedge accounting.

Note 9. Commitments and Contingencies

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 June 30, ~~2021,~~2022, we estimated our reasonably possible legal exposure for unfavorable outcomes is approximately ~~$234~~$257 million, and we have accrued ~~$76~~$144 million.

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 ~~$11~~$65 million at June 30, ~~2021.~~2022.

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GENERAL MOTORS FINANCIAL COMPANY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Note 10. Shareholders' Equity

June 30, 2021

December 31, 2020

June 30, 2022

December 31, 2021

Common Stock

Number of shares authorized

10,000,000

Number of shares authorized

10,000,000

Number of shares issued and outstanding

5,050,000

Number of shares issued and outstanding

5,050,000

During the six months ended June 30, ~~2021~~2022 and ~~2020,~~2021, our Board of Directors declared and paid dividends of $750 million and $1.2 billion ~~and $800 million~~ on our common stock to General Motors Holdings LLC.


		June 30, 2021	December 31, 2020		June 30, 2022	December 31, 2021
Preferred Stock	Preferred Stock			Preferred Stock
Number of shares authorized	Number of shares authorized	250,000,000	250,000,000	Number of shares authorized	250,000,000	250,000,000
Number of shares issued and outstanding	Number of shares issued and outstanding			Number of shares issued and outstanding
Fixed-to-Floating Rate Cumulative Perpetual Preferred Stock, Series A (Series A Preferred Stock)	Fixed-to-Floating Rate Cumulative Perpetual Preferred Stock, Series A (Series A Preferred Stock)	1,000,000	1,000,000	Fixed-to-Floating Rate Cumulative Perpetual Preferred Stock, Series A (Series A Preferred Stock)	1,000,000	1,000,000
Fixed-to-Floating Rate Cumulative Perpetual Preferred Stock, Series B (Series B Preferred Stock)	Fixed-to-Floating Rate Cumulative Perpetual Preferred Stock, Series B (Series B Preferred Stock)	500,000	500,000	Fixed-to-Floating Rate Cumulative Perpetual Preferred Stock, Series B (Series B Preferred Stock)	500,000	500,000
Fixed-Rate Reset Cumulative Perpetual Preferred Stock, Series C (Series C Preferred Stock)	Fixed-Rate Reset Cumulative Perpetual Preferred Stock, Series C (Series C Preferred Stock)	500,000	500,000	Fixed-Rate Reset Cumulative Perpetual Preferred Stock, Series C (Series C Preferred Stock)	500,000	500,000

During the six months ended June 30, 2022, we paid dividends of $29 million to holders of record of our Series A Preferred Stock, $16 million to holders of record of our Series B Preferred Stock, and $14 million to holders of record of our Series C Preferred Stock. During the six months ended June 30, 2021, we paid dividends of $29 million to holders of record of our Series A Preferred Stock, $16 million to holders of record of our Series B Preferred Stock, and $16 million to holders of record of our Series C Preferred Stock. During the six months ended June 30, 2020, we paid dividends of $29 million to holders of record of our Series A Preferred Stock, and $16 million to holders of record of our Series B Preferred Stock.

On June ~~17, 2021,~~20, 2022, our Board of Directors declared a dividend of $28.75 per share, $29 million in the aggregate, on our Series A Preferred Stock, a dividend of $32.50 per share, $16 million in the aggregate, on our Series B Preferred Stock, and a dividend of $28.50 per share, $14 million in the aggregate, on our Series C Preferred Stock, payable on September 30, ~~2021~~2022 to holders of record at September 15, ~~2021.~~2022. Accordingly, $59 million has been set aside for the payment of these dividends.

The following table summarizes the significant components of accumulated other comprehensive ~~loss:~~income (loss):


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2021		2020		2021		2020			2022		2021		2022		2021
Unrealized loss on hedges
Unrealized gain (loss) on hedges										Unrealized gain (loss) on hedges
Beginning balance	Beginning balance	$	(108)	$	(166)	$	(157)	$	(49)	Beginning balance	$	19	$	(108)	$	(77)	$	(157)
Change in value of hedges, net of tax	Change in value of hedges, net of tax	(7)		(34)		42		(151)		Change in value of hedges, net of tax	21		(7)		116		42
Ending balance	Ending balance	(115)		(200)		(115)		(200)		Ending balance	39		(115)		39		(115)
Defined benefit plans	Defined benefit plans									Defined benefit plans
Beginning balance	Beginning balance	1		1		1		1		Beginning balance	—		1		1		1
Unrealized gain on subsidiary pension, net of tax		0		0		0		0
Unrealized gain (loss) on subsidiary pension, net of tax										Unrealized gain (loss) on subsidiary pension, net of tax	—		—		—		—
Ending balance	Ending balance	1		1		1		1		Ending balance	—		1		—		1
Foreign currency translation adjustment	Foreign currency translation adjustment									Foreign currency translation adjustment
Beginning balance	Beginning balance	(1,225)		(1,497)		(1,153)		(1,071)		Beginning balance	(1,053)		(1,225)		(1,197)		(1,153)
Translation gain (loss), net of tax	Translation gain (loss), net of tax	133		33		61		(393)		Translation gain (loss), net of tax	(213)		133		(69)		61
Ending balance	Ending balance	(1,092)		(1,464)		(1,092)		(1,464)		Ending balance	(1,266)		(1,092)		(1,266)		(1,092)
Total accumulated other comprehensive loss		$	(1,206)	$	(1,663)	$	(1,206)	$	(1,663)
Total accumulated other comprehensive income (loss)										Total accumulated other comprehensive income (loss)	$	(1,226)	$	(1,206)	$	(1,226)	$	(1,206)

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GENERAL MOTORS FINANCIAL COMPANY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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.

We are included in GM’s consolidated U.S. federal income tax return and 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 our financial statements as if we filed our own tax returns in each jurisdiction. Refer to Note 2 for further information on related party taxes payable.

Note 12. Segment Reporting

Our chief operating decision maker evaluates the operating results and performance of our business based on our North America and International Segments. The management of each segment is responsible for executing our strategies. ~~Key~~The following tables summarize key operating data for our operating ~~segments were as follows:~~segments:


		Three Months Ended June 30, 2021						Three Months Ended June 30, 2020							Three Months Ended June 30, 2022						Three Months Ended June 30, 2021
		North America		International		Total		North America		International		Total			North America		International		Total		North America		International		Total
Total revenue	Total revenue	$	3,188	$	238	$	3,426	$	3,197	$	226	$	3,423	Total revenue	$	2,904	$	242	$	3,146	$	3,188	$	238	$	3,426
Operating expenses	Operating expenses	302		76		378		273		72		345		Operating expenses	315		79		393		302		76		378
Leased vehicle expenses	Leased vehicle expenses	813		12		825		1,768		11		1,779		Leased vehicle expenses	842		13		856		813		12		825
Provision for loan losses	Provision for loan losses	36		23		59		244		83		327		Provision for loan losses	170		28		198		36		23		59
Interest expense	Interest expense	575		58		633		710		78		788		Interest expense	560		82		642		575		58		633
Equity income	Equity income	0		50		50		0		42		42		Equity income	—		50		50		—		50		50
Income before income taxes	Income before income taxes	$	1,462	$	119	$	1,581	$	202	$	24	$	226	Income before income taxes	$	1,017	$	89	$	1,106	$	1,462	$	119	$	1,581


		Six Months Ended June 30, 2021						Six Months Ended June 30, 2020							Six Months Ended June 30, 2022						Six Months Ended June 30, 2021
		North America		International		Total		North America		International		Total			North America		International		Total		North America		International		Total
Total revenue	Total revenue	$	6,359	$	474	$	6,833	$	6,474	$	510	$	6,984	Total revenue	$	5,834	$	468	$	6,302	$	6,359	$	474	$	6,833
Operating expenses	Operating expenses	641		148		789		567		136		703		Operating expenses	618		148		766		641		148		789
Leased vehicle expenses	Leased vehicle expenses	2,044		25		2,069		3,452		24		3,476		Leased vehicle expenses	1,685		26		1,711		2,044		25		2,069
Provision for loan losses	Provision for loan losses	(8)		41		33		635		158		793		Provision for loan losses	268		52		320		(8)		41		33
Interest expense	Interest expense	1,167		116		1,283		1,448		175		1,623		Interest expense	1,067		152		1,219		1,167		116		1,283
Equity income	Equity income	0		104		104		0		67		67		Equity income	—		104		104		—		104		104
Income before income taxes	Income before income taxes	$	2,515	$	248	$	2,763	$	372	$	84	$	456	Income before income taxes	$	2,197	$	194	$	2,390	$	2,515	$	248	$	2,763


		June 30, 2021						December 31, 2020							June 30, 2022						December 31, 2021
		North America		International		Total		North America		International		Total			North America		International		Total		North America		International		Total
Finance receivables, net	Finance receivables, net	$	55,514	$	4,698	$	60,212	$	53,332	$	5,058	$	58,390	Finance receivables, net	$	62,545	$	4,302	$	66,847	$	58,883	$	4,096	$	62,979
Leased vehicles, net	Leased vehicles, net	$	40,421	$	175	$	40,596	$	39,656	$	163	$	39,819	Leased vehicles, net	$	35,099	$	208	$	35,307	$	37,741	$	188	$	37,929
Total assets	Total assets	$	108,127	$	7,795	$	115,922	$	105,507	$	8,318	$	113,825	Total assets	$	110,396	$	7,382	$	117,778	$	106,572	$	7,214	$	113,786

Note 13. 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 ~~$5.6~~$5.2 billion and ~~$6.2~~$5.1 billion at June 30, ~~2021~~2022 and December 31, ~~2020.~~2021.

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GENERAL MOTORS FINANCIAL COMPANY, INC.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Forward-looking statements in this Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) are not guarantees of future performance and may involve risks and uncertainties that could cause actual results to differ materially from those projected. Refer to the "Forward-Looking Statements" section of this MD&A and the "Risk Factors" section of our ~~2020~~Annual Report on Form 10-K for the fiscal year ended December 31, 2021, as filed with the Securities and Exchange Commission on February 2, 2022 (2021 Form 10-K) for a discussion of these risks and uncertainties.

Basis of Presentation

This MD&A should be read in conjunction with the accompanying condensed consolidated financial statements and notes thereto and the audited consolidated financial statements and notes thereto included in our ~~2020~~2021 Form 10-K.

Except as otherwise specified, dollar amounts presented within tables are stated in millions. Certain columns and rows may not add due to rounding. Average balances are calculated using daily balances, where available. Otherwise, average balances are calculated using monthly balances.

~~Critical Accounting Estimates~~Overview

~~The preparation~~We continue to monitor the impact of ~~condensed financial statements~~the COVID-19 pandemic, government actions and measures taken to prevent its spread, and the potential to affect our operations, particularly in ~~conformity with accounting principles generally accepted~~China. We are also monitoring the current global economic environment, including, specifically, the inflationary pressures in the U.S. ~~requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities~~ and the ~~disclosures of contingent assets and liabilities as~~macroeconomic impact of the ~~date~~conflict in Ukraine, and any resulting impacts on our financial position and results of operations. Refer to the ~~financial statements and the reported amount~~"Risk Factors" section of revenue and expenses in the periods presented. Actual results could differ from those estimates, due to inherent uncertainties in making estimates, and those differences may be material. The critical accounting estimates that affect the condensed consolidated financial statements and the judgment and assumptions used are consistent with those described in Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our ~~2020~~2021 Form ~~10-K.~~

10-K for additional information.

Results of Operations

This section discusses our results of operations for the three and six months ended June 30, ~~2021~~2022 as compared to the three and six months ended June 30, ~~2020.~~2021.

Income before income taxes for the six months ended June 30, ~~2021 increased~~2022 decreased to ~~$2.8~~$2.4 billion from ~~$456 million~~$2.8 billion for the six months ended June 30, ~~2020. There were offsetting changes to key~~2021. Key drivers of ~~income before income taxes, as follows:~~the change include the following:

•Leased vehicle income decreased ~~$224~~$569 million primarily due to a ~~decline~~9.2% decrease in the average balance of the leased vehicles portfolio.

•Leased vehicle expenses decreased ~~$1.4 billion~~$358 million primarily due to a ~~$910 million increase in leased vehicle termination gains, as well as a $500~~$791 million decrease in depreciation on leased ~~vehicles.~~vehicles, resulting from increased residual value estimates and a decrease in the size of the portfolio, partially offset by a $435 million decrease in lease termination gains associated with higher leased portfolio net book values and fewer vehicles returned to us for remarketing for the six months ended June 30, 2022 compared to the same period in 2021.

•Provision for loan losses ~~decreased $760~~increased $287 million primarily due to a reduction in ~~the~~ reserve levels ~~established during~~recorded in the six months ended June 30, ~~2020, following the onset of the COVID-19 pandemic,~~2021 as a result of actual credit performance that was better than forecast, ~~and~~as well as favorable expectations for future charge-offs and ~~recoveries, reflecting improved~~recoveries. In addition, the provision expense recorded in the six months ended June 30, 2022 incorporates economic forecast ~~economic conditions.~~scenarios weighted more heavily to a weaker outlook.

•Interest expense decreased ~~$340~~$64 million primarily due to a decreased ~~credit spreads~~effective rate of interest on ~~our debt.~~debt, as well as a decrease in the average debt outstanding.

Return on average common equity is widely used to measure earnings in relation to invested capital. Our return on average common equity ~~increased~~decreased to 26.6% for the four quarters ended June 30, 2022 from 31.9% for the four quarters ended June 30, 2021 ~~from 10.8% for the four quarters ended June 30, 2020~~ primarily due to ~~increased~~decreased earnings.

We use return on average tangible common equity, ~~(a non-GAAP measure)~~a non-generally accepted accounting principle (GAAP) measure, to measure our contribution to ~~GM's~~General Motors Company's (GM) enterprise profitability and cash flow. Our return on average tangible common equity ~~increased~~decreased to 29.2% for the four quarters ended June 30, 2022 from 35.5% for the four quarters ended June 30, 2021 ~~from 12.1% for the four quarters ended June 30, 2020~~ primarily due to ~~increased~~decreased earnings.

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GENERAL MOTORS FINANCIAL COMPANY, INC.

The following table presents our reconciliation of return on average tangible common equity to return on average common equity, the most directly comparable GAAP measure:


		Four Quarters Ended							Four Quarters Ended
		June 30, 2021			June 30, 2020				June 30, 2022			June 30, 2021
Net income attributable to common shareholder	Net income attributable to common shareholder	$	3,615		$	1,143		Net income attributable to common shareholder	$	3,402		$	3,615

Average equity	Average equity	$	13,197		$	12,078		Average equity	$	14,780		$	13,197
Less: average preferred equity	Less: average preferred equity	(1,855)			(1,477)			Less: average preferred equity	(1,969)			(1,855)
Average common equity	Average common equity	11,342			10,601			Average common equity	12,811			11,342
Less: average goodwill	Less: average goodwill	(1,170)			(1,179)			Less: average goodwill	(1,172)			(1,170)
Average tangible common equity	Average tangible common equity	$	10,172		$	9,422		Average tangible common equity	$	11,639		$	10,172

Return on average common equity	Return on average common equity	31.9		%	10.8		%	Return on average common equity	26.6		%	31.9		%
Return on average tangible common equity	Return on average tangible common equity	35.5		%	12.1		%	Return on average tangible common equity	29.2		%	35.5		%

Our calculation of this non-GAAP measure may not be comparable to similarly titled measures of other companies due to potential differences between companies in the method of calculation. As a result, the use of this non-GAAP measure has limitations and should not be considered superior to, in isolation from, or as a substitute for, related U.S. GAAP measures. This non-GAAP measure allows investors the opportunity to measure and monitor our performance against our externally communicated targets and evaluate the investment decisions being made by management to improve our return on average tangible common equity. Management uses this measure in its financial, investment and operational decision-making processes, for internal reporting and as part of its forecasting and budgeting processes. For these reasons we believe this non-GAAP measure is useful for our investors.

Three Months Ended June 30, ~~2021~~2022 compared to Three Months Ended June 30, ~~2020~~2021


Average Earning Assets	Average Earning Assets	Three Months Ended June 30,				2021 vs. 2020				Average Earning Assets	Three Months Ended June 30,				2022 vs. 2021
		2021		2020		Amount		Percentage			2022		2021		Amount		Percentage
Average retail finance receivables	Average retail finance receivables	$	55,108	$	44,636	$	10,472	23.5	%	Average retail finance receivables	$	60,451	$	55,108	$	5,343	9.7	%
Average commercial finance receivables	Average commercial finance receivables	6,166		10,061		(3,895)		(38.7)	%	Average commercial finance receivables	7,716		6,166		1,550		25.1	%
Average finance receivables	Average finance receivables	61,274		54,697		6,577		12.0	%	Average finance receivables	68,167		61,274		6,893		11.2	%
Average leased vehicles, net	Average leased vehicles, net	40,545		40,346		199		0.5	%	Average leased vehicles, net	35,998		40,545		(4,547)		(11.2)	%
Average earning assets	Average earning assets	$	101,819	$	95,043	$	6,776	7.1	%	Average earning assets	$	104,165	$	101,819	$	2,346	2.3	%

Retail finance receivables purchased	Retail finance receivables purchased	$	9,131	$	8,693	$	438	5.0	%	Retail finance receivables purchased	$	8,961	$	9,131	$	(170)	(1.9)	%

Leased vehicles purchased	Leased vehicles purchased	$	5,873	$	3,165	$	2,708	85.6	%	Leased vehicles purchased	$	3,870	$	5,873	$	(2,003)	(34.1)	%

Average retail finance receivables increased primarily due to new loan originations in excess of principal collections and payoffs. Our penetration of GM's retail sales in the U.S. was ~~43.1%~~44.6% and ~~53.0%~~43.1% for the three months ended June 30, ~~2021~~2022 and ~~2020.~~2021. Penetration levels vary depending on incentive financing programs available and competing third-party financing products in the market.

Average ~~retail~~commercial finance receivables increased primarily due to ~~continued strong demand for new vehicles, which is also reflected~~growth in the ~~increase in retail finance receivables~~number of dealers using our floorplan financing.

Leased vehicles purchased ~~in the three months ended June 30, 2021 as compared to the same period in 2020.~~

~~Average commercial finance receivables~~ decreased primarily due to ~~continued~~sustained low ~~dealer~~ new vehicle inventory as a result of strong demand for new vehicles, compounded by the global semiconductor supply shortage impacting automotive production. The semiconductor supply shortage is expected to have a temporary impact on our business.

Leased vehicles purchased increased during the three months ended June 30, 2021 as compared to the same period in 2020, primarily due to changes in GM's allocation of subvention, which was more heavily focused on loanand reduced lease financing ~~during the three months ended June 30, 2020.~~incentive levels.

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GENERAL MOTORS FINANCIAL COMPANY, INC.


Revenue	Revenue	Three Months Ended June 30,						2021 vs. 2020				Revenue	Three Months Ended June 30,						2022 vs. 2021
		2021			2020			Amount		Percentage			2022			2021			Amount		Percentage
Finance charge income	Finance charge income											Finance charge income
Retail finance receivables	Retail finance receivables	$	978		$	875		$	103	11.8	%	Retail finance receivables	$	977		$	978		$	(1)	(0.1)	%
Commercial finance receivables	Commercial finance receivables	$	58		$	91		$	(33)	(36.3)	%	Commercial finance receivables	$	85		$	58		$	27	46.6	%
Leased vehicle income	Leased vehicle income	$	2,304		$	2,386		$	(82)	(3.4)	%	Leased vehicle income	$	1,989		$	2,304		$	(315)	(13.7)	%
Other income	Other income	$	86		$	71		$	15	21.1	%	Other income	$	95		$	86		$	9	10.5	%
Equity income	Equity income	$	50		$	42		$	8	19.0	%	Equity income	$	50		$	50		$	—	—	%
Effective yield - retail finance receivables	Effective yield - retail finance receivables	7.1		%	7.9		%					Effective yield - retail finance receivables	6.5		%	7.1		%
Effective yield - commercial finance receivables	Effective yield - commercial finance receivables	3.8		%	3.6		%					Effective yield - commercial finance receivables	4.4		%	3.8		%

Finance Charge Income - Retail Finance Receivables Finance charge income on retail finance receivables ~~increased~~was flat for the three months ended June 30, 2022 compared to the same period in 2021 due to a decrease in effective yield, partially offset by the growth in the size of the ~~portfolio, partially offset by a decrease in the effective yield.~~portfolio. The effective yield on our retail finance receivables decreased primarily due to increased lending to borrowers with prime credit. The effective yield represents finance charges, rate subvention and fees recorded in earnings during the period as a percentage of average retail finance receivables.

Finance Charge Income - Commercial Finance Receivables Finance charge income on commercial finance receivables ~~decreased~~increased due to ~~a decrease~~an increase in the size of the portfolio, as well as an increase in the effective yield as a result of higher benchmark rates.

Leased Vehicle Income Leased vehicle income decreased primarily due to an 11.2% decrease in the average balance of the leased vehicles portfolio.


Costs and Expenses	Costs and Expenses	Three Months Ended June 30,						2021 vs. 2020				Costs and Expenses	Three Months Ended June 30,						2022 vs. 2021
		2021			2020			Amount		Percentage			2022			2021			Amount		Percentage
Operating expenses	Operating expenses	$	378��		$	345		$	33	9.6	%	Operating expenses	$	393		$	378		$	15	4.0	%
Leased vehicle expenses	Leased vehicle expenses	$	825		$	1,779		$	(954)	(53.6)	%	Leased vehicle expenses	$	856		$	825		$	31	3.8	%
Provision for loan losses	Provision for loan losses	$	59		$	327		$	(268)	(82.0)	%	Provision for loan losses	$	198		$	59		$	139	235.6	%
Interest expense	Interest expense	$	633		$	788		$	(155)	(19.7)	%	Interest expense	$	642		$	633		$	9	1.4	%
Average debt outstanding	Average debt outstanding	$	94,687		$	95,898		$	(1,211)	(1.3)	%	Average debt outstanding	$	92,942		$	94,687		$	(1,745)	(1.8)	%
Effective rate of interest on debt	Effective rate of interest on debt	2.7		%	3.3		%					Effective rate of interest on debt	2.8		%	2.7		%

Operating Expenses Operating expenses as an annualized percentage of average earning assets ~~was~~were 1.5% for ~~both~~ the three months ended June 30, ~~2021~~2022 and ~~2020.~~2021.

Leased Vehicle Expenses Leased vehicle expenses ~~decreased primarily due to a $583 million increase in lease termination gains~~increased for the three months ended June 30, ~~2021~~2022 compared to the same period in ~~2020, as well as~~2021, primarily due to a ~~$383~~$388 million decrease in lease termination gains associated with higher leased portfolio net book values and fewer vehicles returned to us for remarketing, partially offset by a $360 million decrease in depreciation on leased vehicles, resulting from increased residual value ~~estimates.~~estimates and a decrease in the size of the portfolio.

Provision for Loan Losses The provision for loan losses ~~decreased $268~~increased $139 million primarily due to a reduction in ~~the~~ reserve levels ~~established during~~recorded in the three months ended June 30, ~~2020, following the onset of the COVID-19 pandemic,~~2021 as a result of actual credit performance that was better than forecast, ~~and~~as well as favorable expectations for future charge-offs and ~~recoveries, reflecting improved~~recoveries. In addition, the provision expense recorded in the three months ended June 30, 2022 incorporates economic forecast ~~economic conditions.~~scenarios weighted more heavily to a weaker outlook.

Interest Expense Interest expense ~~decreased~~slightly increased primarily due to ~~decreased credit spreads~~an increased effective rate of interest on our ~~debt.~~debt, partially offset by a decrease in the average debt outstanding.

Taxes Our consolidated effective income tax rate was 26.2% ~~and 28.8%~~ of income before income taxes and equity income for both the three months ended June 30, ~~2021~~2022 and 2020. The decrease in the effective income tax rate is primarily due to a lower percentage of income being taxed at higher rates for our non-U.S. entities included in our effective tax rate calculation.2021.

Other Comprehensive Income (Loss)

Unrealized ~~Loss~~Gain (Loss) on Hedges Unrealized ~~losses~~gain (loss) on hedges included in other comprehensive income (loss) were ~~$(7)~~$21 million and ~~$(34)~~$(7) million for the three months ended June 30, ~~2021~~2022 and ~~2020.~~2021. The change in unrealized ~~loss~~gain (loss) was primarily due to changes in the fair value of our foreign currency swap ~~agreements resulting from the weakening~~agreements.

Table of ~~the U.S. Dollar against hedged currencies.~~Contents

GENERAL MOTORS FINANCIAL COMPANY, INC.

Unrealized gains and losses on cash flow hedges of our floating rate debt are reclassified into earnings in the same period during which the hedged transactions affect earnings via principal remeasurement or accrual of interest expense.

Foreign Currency Translation Adjustment Foreign currency translation adjustments included in other comprehensive income (loss) were ~~$133~~$(213) million and ~~$33~~$133 million for the three months ended June 30, ~~2021~~2022 and ~~2020.~~2021. Translation adjustments resulted from changes in the values of our international currency-denominated assets and liabilities as the value of the U.S.

~~Table of Contents~~

~~GENERAL MOTORS FINANCIAL COMPANY, INC.~~

Dollar changed in relation to international currencies. The foreign currency translation loss for the three months ended June 30, 2022 was primarily due to depreciating values of the Chinese Yuan Renminbi, Brazilian Real, Canadian Dollar, and Chilean Peso in relation to the U.S. Dollar. The foreign currency translation gain for the three months ended June 30, 2021 was primarily due to appreciating values of the Brazilian Real, the Mexican Peso and the Chinese Yuan Renminbi in relation to the U.S. Dollar. ~~The foreign currency translation income for the three months ended June 30, 2020 was primarily due to appreciating value of the Canadian Dollar in relation to the U.S. Dollar.~~

Six Months Ended June 30, ~~2021~~2022 compared to Six Months Ended June 30, ~~2020~~2021


Average Earning Assets	Average Earning Assets	Six Months Ended June 30,				2021 vs. 2020				Average Earning Assets	Six Months Ended June 30,				2022 vs. 2021
		2021		2020		Amount		Percentage			2022		2021		Amount		Percentage
Average retail finance receivables	Average retail finance receivables	$	53,838	$	43,564	$	10,274	23.6	%	Average retail finance receivables	$	59,624	$	53,838	$	5,786	10.7	%
Average commercial finance receivables	Average commercial finance receivables	7,156		10,668		(3,512)		(32.9)	%	Average commercial finance receivables	7,345		7,156		189		2.6	%
Average finance receivables	Average finance receivables	60,994		54,232		6,762		12.5	%	Average finance receivables	66,969		60,994		5,975		9.8	%
Average leased vehicles, net	Average leased vehicles, net	40,320		41,028		(708)		(1.7)	%	Average leased vehicles, net	36,630		40,320		(3,690)		(9.2)	%
Average earning assets	Average earning assets	$	101,314	$	95,260	$	6,054	6.4	%	Average earning assets	$	103,598	$	101,314	$	2,284	2.3	%

Retail finance receivables purchased	Retail finance receivables purchased	$	17,363	$	15,190	$	2,173	14.3	%	Retail finance receivables purchased	$	17,035	$	17,363	$	(328)	(1.9)	%

Leased vehicles purchased	Leased vehicles purchased	$	11,633	$	8,205	$	3,428	41.8	%	Leased vehicles purchased	$	7,412	$	11,633	$	(4,221)	(36.3)	%

Average retail finance receivables increased primarily due to new loan originations in excess of principal collections and payoffs. Our penetration of GM's retail sales in the U.S. was ~~43.4%~~45.3% and ~~49.0%~~43.4% for the six months ended June 30, ~~2021~~2022 and ~~2020.~~2021. Penetration levels vary depending on incentive financing programs available and competing third-party financing products in the market.

Average ~~retail~~commercial finance receivables increased slightly primarily due to ~~continued strong demand for new vehicles, which is also reflected~~growth in the ~~increase in retail finance receivables~~number of dealers using our floorplan financing.

Leased vehicles purchased ~~in the six months ended June 30, 2021 as compared to the same period in 2020.~~

Average leased vehicles, net decreased due to lease terminations in excess of purchases for the six months ended June 30, 2021. The increase in leased vehicles purchased during the six months ended June 30, 2021 compared to the same period in 2020 is primarily due to changes in GM's allocation of subvention, which was more heavily focused on loan financing during the six months ended June 30, 2020.


Revenue	Revenue	Six Months Ended June 30,						2021 vs. 2020				Revenue	Six Months Ended June 30,						2022 vs. 2021
		2021			2020			Amount		Percentage			2022			2021			Amount		Percentage
Finance charge income	Finance charge income											Finance charge income
Retail finance receivables	Retail finance receivables	$	1,923		$	1,747		$	176	10.1	%	Retail finance receivables	$	1,922		$	1,923		$	(1)	(0.1)	%
Commercial finance receivables	Commercial finance receivables	$	129		$	225		$	(96)	(42.7)	%	Commercial finance receivables	$	150		$	129		$	21	16.3	%
Leased vehicle income	Leased vehicle income	$	4,625		$	4,849		$	(224)	(4.6)	%	Leased vehicle income	$	4,056		$	4,625		$	(569)	(12.3)	%
Other income	Other income	$	156		$	163		$	(7)	(4.3)	%	Other income	$	175		$	156		$	19	12.2	%
Equity income	Equity income	$	104		$	67		$	37	55.2	%	Equity income	$	104		$	104		$	—	—	%
Effective yield - retail finance receivables	Effective yield - retail finance receivables	7.2		%	8.1		%					Effective yield - retail finance receivables	6.5		%	7.2		%
Effective yield - commercial finance receivables	Effective yield - commercial finance receivables	3.6		%	4.2		%					Effective yield - commercial finance receivables	4.1		%	3.6		%

Finance Charge Income - Retail Finance Receivables Finance charge income on retail finance receivables ~~increased~~was flat for the six months ended June 30, 2022 compared to the same period in 2021 due to a decrease in effective yield, partially offset by the growth in the size of the ~~portfolio, partially offset by a decrease in the effective yield.~~portfolio. The effective yield on our retail finance receivables decreased primarily due to increased lending to borrowers with prime credit. The effective yield represents finance charges, rate subvention and fees recorded in earnings during the period as a percentage of average retail finance receivables.

Finance Charge Income - Commercial Finance Receivables Finance charge income on commercial finance receivables ~~decreased~~increased slightly due to ~~a decrease~~an increase in the ~~size~~effective yield as a result of ~~the portfolio.~~higher benchmark rates.

Leased Vehicle IncomeLeased vehicle income decreased primarily due to a ~~decline~~9.2% decrease in the average balance of the leased vehicles portfolio.

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Costs and Expenses	Costs and Expenses	Six Months Ended June 30,						2021 vs. 2020				Costs and Expenses	Six Months Ended June 30,						2022 vs. 2021
		2021			2020			Amount		Percentage			2022			2021			Amount		Percentage
Operating expenses	Operating expenses	$	789		$	703		$	86	12.2	%	Operating expenses	$	766		$	789		$	(23)	(2.9)	%
Leased vehicle expenses	Leased vehicle expenses	$	2,069		$	3,476		$	(1,407)	(40.5)	%	Leased vehicle expenses	$	1,711		$	2,069		$	(358)	(17.3)	%
Provision for loan losses	Provision for loan losses	$	33		$	793		$	(760)	(95.8)	%	Provision for loan losses	$	320		$	33		$	287	869.7	%
Interest expense	Interest expense	$	1,283		$	1,623		$	(340)	(20.9)	%	Interest expense	$	1,219		$	1,283		$	(64)	(5.0)	%
Average debt outstanding	Average debt outstanding	$	94,301		$	92,355		$	1,946	2.1	%	Average debt outstanding	$	92,867		$	94,301		$	(1,434)	(1.5)	%
Effective rate of interest on debt	Effective rate of interest on debt	2.7		%	3.5		%					Effective rate of interest on debt	2.6		%	2.7		%

Operating Expenses Operating expenses as an annualized percentage of average earning assets ~~increased to~~were 1.5% and 1.6% for the six months ended June 30, ~~2021 from 1.5% for the six months ended June 30, 2020 due to certain one-time accruals recorded during the six months ended June 30,~~2022 and 2021.

Leased Vehicle Expenses Leased vehicle expenses decreased primarily due to a ~~$910 million increase in lease termination gains for the six months ended June 30, 2021 compared to the same period in 2020, as well as a $500~~$791 million decrease in depreciation on leased vehicles, resulting from increased residual value estimates and a decrease in the size of the ~~portfolio.~~portfolio, partially offset by a $435 million decrease in lease termination gains associated with higher leased portfolio net book values and fewer vehicles returned to us for remarketing for the six months ended June 30, 2022 compared to the same period in 2021.

Provision for Loan Losses Provision for loan losses ~~decreased $760 million~~increased primarily due to a reduction in ~~the~~ reserve levels ~~established during~~recorded in the six months ended June 30, ~~2020, following the onset of the COVID-19 pandemic,~~2021 as a result of actual credit performance that was better than forecast, ~~and~~as well as favorable expectations for future charge-offs and ~~recoveries, reflecting improved~~recoveries. In addition, the provision expense recorded in the six months ended June 30, 2022 incorporates economic forecast ~~economic conditions.~~scenarios weighted more heavily to a weaker outlook.

Interest Expense Interest expense decreased primarily due to a decreased ~~credit spreads~~effective rate of interest on ~~our debt.~~debt, as well as a decrease in the average debt outstanding.

Taxes Our consolidated effective income tax rate was ~~26.5%~~26.2% and ~~29.8%~~26.5% of income before income taxes and equity income for the six months ended June 30, ~~2021~~2022 and 2020. The decrease in the effective income tax rate is primarily due to a lower percentage of income being taxed at higher rates for our non-U.S. entities included in our effective tax rate calculation.2021.

~~Other Comprehensive Income (Loss)~~

Unrealized Gain (Loss) on Hedges Unrealized gains ~~(losses)~~ on hedges included in other comprehensive income (loss) were ~~$42~~$116 million and ~~$(151)~~$42 million for the six months ended June 30, ~~2021~~2022 and ~~2020.~~2021. The change in unrealized gain ~~(loss)~~ was primarily due to changes in the fair value of our foreign currency swap ~~agreements resulting from the weakening of the U.S. Dollar against hedged currencies.~~agreements.

Foreign Currency Translation Adjustment Foreign currency translation adjustments included in other comprehensive income (loss) were ~~$61~~$(69) million and ~~$(393)~~$61 million for the six months ended June 30, ~~2021~~2022 and ~~2020.~~2021. Translation adjustments resulted from changes in the values of our international currency-denominated assets and liabilities as the value of the U.S. Dollar changed in relation to international currencies. The foreign currency translation loss for the six months ended June 30, 2022 was primarily due to depreciating values of the Chinese Yuan Renminbi and Canadian Dollar, partially offset by the appreciating value of the Brazilian Real in relation to the U.S. Dollar. The foreign currency translation gain for the six months ended June 30, 2021 was primarily due to appreciating values of the Brazilian Real, the Canadian Dollar and the Chinese Yuan Renminbi in relation to the U.S. Dollar. The foreign currency translation loss for the six months ended June 30, 2020 was primarily due to depreciating values of the Brazilian Real, the Mexican Peso, and the Canadian Dollar in relation to the U.S. Dollar.

2221

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Earning Assets Quality

Retail Finance Receivables Our retail finance receivables portfolio includes loans made to consumers and businesses to finance the purchase of vehicles for personal and commercial use. A summary of the credit risk profile by FICO score or its equivalent, determined at origination, of the retail finance receivables is as follows:


		June 30, 2021					December 31, 2020						June 30, 2022					December 31, 2021
		Amount			Percent		Amount			Percent			Amount			Percent		Amount			Percent
Prime - FICO Score 680 and greater	Prime - FICO Score 680 and greater	$	36,959		65.6	%	$	32,800		64.0	%	Prime - FICO Score 680 and greater	$	43,141		70.5	%	$	39,419		67.9	%
Near-prime - FICO Score 620 to 679	Near-prime - FICO Score 620 to 679	8,613			15.3		7,935			15.4		Near-prime - FICO Score 620 to 679	8,366			13.7		8,479			14.6
Sub-prime - FICO Score less than 620	Sub-prime - FICO Score less than 620	10,785			19.1		10,553			20.6		Sub-prime - FICO Score less than 620	9,701			15.8		10,195			17.5
Retail finance receivables, net of fees	Retail finance receivables, net of fees	56,357			100.0	%	51,288			100.0	%	Retail finance receivables, net of fees	61,208			100.0	%	58,093			100.0	%
Less: allowance for loan losses	Less: allowance for loan losses	(1,805)					(1,915)					Less: allowance for loan losses	(1,987)					(1,839)
Retail finance receivables, net	Retail finance receivables, net	$	54,552				$	49,373				Retail finance receivables, net	$	59,220				$	56,254
Number of outstanding contracts	Number of outstanding contracts	2,910,548					2,824,757					Number of outstanding contracts	2,867,667					2,861,963
Average amount of outstanding contracts (in dollars)(a)	Average amount of outstanding contracts (in dollars)(a)	$	19,363				$	18,157				Average amount of outstanding contracts (in dollars)(a)	$	21,344				$	20,298
Allowance for loan losses as a percentage of retail finance receivables, net of fees	Allowance for loan losses as a percentage of retail finance receivables, net of fees	3.2		%			3.7		%			Allowance for loan losses as a percentage of retail finance receivables, net of fees	3.2		%			3.2		%

_________________

(a)Average amount of outstanding contracts ~~consists of~~is calculated as retail finance receivables, net of fees, divided by number of outstanding contracts.

The allowance for retail loan losses decreased as of June 30, 2021 compared to December 31, 2020, primarily due to a reduction in the reserve levels established during the six months ended June 30, 2020, following the onset of the COVID-19 pandemic, as a result of actual credit performance that was better than forecast and favorable expectations for future charge-offs and recoveries, reflecting improved forecast economic conditions. These reductions in the reserve levels were partially offset by reserves established for loan originations during the six months ended June 30, 2021.

Delinquency The following is a consolidated summary of delinquent retail finance receivables:

June 30, 2021 June 30, 2020
Amount Percentage Amount Percentage
31 - 60 days $ 856 1.5 % $ 998 2.2 %
Greater than 60 days 286 0.5 601 1.3
Total finance receivables more than 30 days delinquent 1,142 2.0 1,599 3.5
In repossession 28 0.1 21 0.0
Total finance receivables more than 30 days delinquent or in repossession $ 1,170 2.1 % $ 1,620 3.5 %


	June 30, 2022				June 30, 2021
	Amount		Percentage		Amount		Percentage
31 - 60 days	$	1,129	1.8	%	$	856	1.5	%
Greater than 60 days	355		0.6		286		0.5
Total finance receivables more than 30 days delinquent	1,484		2.4		1,142		2.0
In repossession	43		0.1		28		0.1
Total finance receivables more than 30 days delinquent or in repossession	$	1,527	2.5	%	$	1,170	2.1	%

At June 30, ~~2021 and 2020,~~2022, delinquency was positively impacted by changes in consumer spending behavior as well as various government support programs intended to mitigate the economic impact of the COVID-19 pandemic. In addition, a larger percentage of our portfolio was comprised of prime loans atincreased from June 30, 2021, ~~as compared~~but continued to ~~June 30, 2020. Delinquency is expected~~be lower than historical levels primarily due to favorable labor markets and strong household balance sheets. We expect that delinquency will increase over time relative to current levels, ~~as consumer spending continues to increase, government support programs expire and economic conditions normalize. However, delinquency is expected to be~~but may remain below pre-pandemic levels due to ~~continued~~ improvement in the credit mix of the portfolio.

Troubled Debt Restructurings (TDRs) The number of loans classified as TDRs ~~Payment~~was 13,278 and 25,126 for the three and six months ended June 30, 2022 compared to 9,044 and 20,420 for the three and six months ended June 30, 2021. Prior to July 1, 2021, payment deferrals granted to retail loan customers with accounts in good standing, but impacted by the COVID-19 pandemic, ~~are~~were not considered concessions for purposes of TDR classification for up to six months of deferral. Refer to Note 3 to our condensed consolidated financial statements for further information on TDRs.

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~~GENERAL MOTORS FINANCIAL COMPANY, INC.~~

Net Charge-offs The following table presents charge-off data with respect to our retail finance receivables portfolio:


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended June 30,						Six Months Ended June 30,
		2021			2020			2021			2020				2022			2021			2022			2021
Charge-offs	Charge-offs	$	204		$	256		$	457		$	596		Charge-offs	$	247		$	204		$	521		$	457
Less: recoveries	Less: recoveries	(144)			(89)			(293)			(245)			Less: recoveries	(161)			(144)			(339)			(293)
Net charge-offs	Net charge-offs	$	60		$	167		$	164		$	351		Net charge-offs	$	86		$	60		$	183		$	164
Net charge-offs as an annualized percentage of average retail finance receivables	Net charge-offs as an annualized percentage of average retail finance receivables	0.4		%	1.5		%	0.6		%	1.6		%	Net charge-offs as an annualized percentage of average retail finance receivables	0.6		%	0.4		%	0.6		%	0.6		%

~~Charge-offs~~Net charge-offs for the three ~~and six~~months ended June 30, 2022 increased from the three months ended June 30, 2021, ~~and 2020,~~but continued ~~at record low~~to be lower than historical levels primarily due to ~~changes in consumer spending behavior, government support programs intended to mitigate the economic impact of the COVID-19 pandemic,~~favorable labor markets, strong household balance sheets and improved recovery rates on repossessed vehicles. ~~Charge-offs are expected to~~We expect net charge-offs will increase over time relative to current levels, ~~as consumer spending continues to increase, government support programs expire and economic conditions normalize. However, charge-offs are expected to be~~but may remain below pre-pandemic levels due to ~~continued~~ improvement in the credit mix of the portfolio.

Commercial Finance Receivables June 30, 2021 December 31, 2020
Commercial finance receivables, net of fees $ 5,705 $ 9,080
Less: allowance for loan losses (45) (63)
Commercial finance receivables, net $ 5,660 $ 9,017
Number of dealers 2,093 2,028
Average carrying amount per dealer $ 3 $ 4
Allowance for loan losses as a percentage of commercial finance receivables, net of fees 0.8 % 0.7 %

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Commercial Finance Receivables	June 30, 2022			December 31, 2021
Commercial finance receivables, net of fees	$	7,666		$	6,772
Less: allowance for loan losses	(40)			(47)
Commercial finance receivables, net	$	7,626		$	6,725
Number of dealers	2,354			2,305
Average carrying amount per dealer	$	3		$	3
Allowance for loan losses as a percentage of commercial finance receivables, net of fees	0.5		%	0.7		%

At June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, no commercial finance receivables were classified as TDRs. Activity in the allowance for commercial loan losses was insignificant for the three and six months ended June 30, ~~2021~~2022 and ~~2020,~~2021, and substantially all of our commercial finance receivables were current with respect to payment status at June 30, ~~2021~~2022 and December 31, ~~2020.~~2021.

Leased Vehicles The following table summarizes activity in our operating lease portfolio (in thousands, except where noted):


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2021		2020		2021		2020			2022		2021		2022		2021
Operating leases purchased	Operating leases purchased	134		78		269		203		Operating leases purchased	89		134		170		269
Operating leases terminated	Operating leases terminated	157		134		299		280		Operating leases terminated	152		157		303		299
Operating leased vehicles returned(a)	Operating leased vehicles returned(a)	16		104		90		215		Operating leased vehicles returned(a)	2		16		4		90
Percentage of leased vehicles returned(b)	Percentage of leased vehicles returned(b)	10	%	78	%	30	%	77	%	Percentage of leased vehicles returned(b)	1	%	10	%	1	%	30	%

________________

(a)Represents the number of vehicles returned to us for remarketing.

(b)Calculated as the number of operating leased vehicles returned divided by the number of operating leases terminated.

The return rate ~~can fluctuate based upon~~is dependent on the level of used vehicle ~~pricing~~values at lease termination compared to contractual residual values at lease ~~inception and/or growth and age of the leased vehicles portfolio. Due to~~inception. Used vehicle prices were sustained at high ~~used vehicle prices~~levels for the three and six months ended June 30, 2021 compared to the same periods in 2020, prices on leased vehicles at termination generally exceeded their contractual residual values, which resulted in increased lessee or grounding dealer purchases of the leased vehicles upon lease termination. The high used vehicle prices were driven by continued low new vehicle inventory compounded by the global semiconductor supply shortage impacting automotive production, and strong demand for new and used vehicles driven by economic recovery and government stimulus. For the full year 2021, we expect used vehicle prices to be higher than 2020 levels,2022, primarily due to ~~sustained~~ low new vehicle inventory, and ~~an economic recovery driving continued strong demand for new and used vehicles.~~

resulted in unusually low return rates. The ~~increase in~~high levels of used vehicle prices also resulted in gains on terminations of leased vehicles of ~~$742~~$354 million and ~~$1.2 billion~~$723 million for the three and six months ended June 30, ~~2021,~~2022, compared to ~~$159~~$742 million and ~~$248 million~~$1.2 billion for the same periods in ~~2020.~~2021. The decrease in gains is primarily due to higher residual value estimates resulting in decreased depreciation expense, as well as fewer vehicles returned for the three and six months ended June 30, 2022 compared to the same periods in 2021. For the remainder of 2022, we expect used vehicle prices to remain elevated primarily due to sustained low new vehicle inventory, but to decrease relative to 2021 peak levels.

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~~GENERAL MOTORS FINANCIAL COMPANY, INC.~~

The following table summarizes the residual value based on our most recent estimates and the number of units included in leased vehicles, net by vehicle type (units in thousands):

June 30, 2021 December 31, 2020
Residual Value Units Percentage
of Units Residual Value Units Percentage
of Units
Crossovers $ 16,835 960 66.6 % $ 16,334 964 65.5 %
Trucks 7,918 275 19.1 7,455 275 18.7
SUVs 3,386 88 6.1 3,435 92 6.3
Cars 1,737 119 8.2 1,949 140 9.5
Total $ 29,876 1,442 100.0 % $ 29,173 1,471 100.0 %

~~The following table summarizes the scheduled maturity of our operating leases in the North America Segment:~~

2021 2022 2023 2024 and Thereafter
Operating lease maturities 12 % 35 % 32 % 21 %


	June 30, 2022					December 31, 2021
	Residual Value		Units	Percentage of Units		Residual Value		Units	Percentage of Units
Crossovers	$	15,460	808	67.3	%	$	16,696	897	67.3	%
Trucks	7,519		248	20.6		7,886		264	19.8
SUVs	2,790		71	5.9		3,104		80	5.9
Cars	1,148		74	6.1		1,430		93	7.0
Total	$	26,918	1,200	100.0	%	$	29,116	1,334	100.0	%

At June 30, 2022 and 2021, 99.8% and ~~2020,~~ 99.6% ~~and 99.4%~~ of our operating leases were current with respect to payment status.

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GENERAL MOTORS FINANCIAL COMPANY, INC.

Liquidity and Capital Resources

General Our primary sources of cash are finance charge income, leasing income and proceeds from the sale of terminated leased vehicles, net ~~distributions~~proceeds from credit facilities, securitizations, secured and unsecured borrowings, and collections and recoveries on finance receivables. Our primary uses of cash are purchases and funding of finance receivables and leased vehicles, repayment or repurchases of secured and unsecured debt, funding credit enhancement requirements in connection with securitizations and secured credit facilities, interest costs, operating expenses, income taxes and dividend payments.

Typically, our purchase and funding of retail and commercial finance receivables and leased vehicles are initially financed ~~initially~~ by utilizing cash and borrowings on our secured credit facilities. Subsequently, we typically obtain long-term financing for finance receivables and leased vehicles through securitization transactions and the issuance of unsecured debt.

The following table summarizes our available liquidity:


Liquidity	Liquidity	June 30, 2021		December 31, 2020		Liquidity	June 30, 2022		December 31, 2021
Cash and cash equivalents(a)	Cash and cash equivalents(a)	$	4,378	$	5,063	Cash and cash equivalents(a)	$	5,275	$	3,948
Borrowing capacity on unpledged eligible assets	Borrowing capacity on unpledged eligible assets	21,113		19,020		Borrowing capacity on unpledged eligible assets	21,880		19,283
Borrowing capacity on committed unsecured lines of credit	Borrowing capacity on committed unsecured lines of credit	478		504		Borrowing capacity on committed unsecured lines of credit	556		518
Borrowing capacity on the Junior Subordinated Revolving Credit Facility	Borrowing capacity on the Junior Subordinated Revolving Credit Facility	1,000		1,000		Borrowing capacity on the Junior Subordinated Revolving Credit Facility	1,000		1,000
Borrowing capacity on the GM Revolving 364-Day Credit Facility	Borrowing capacity on the GM Revolving 364-Day Credit Facility	2,000		2,000		Borrowing capacity on the GM Revolving 364-Day Credit Facility	2,000		2,000
Available liquidity	Available liquidity	$	28,969	$	27,587	Available liquidity	$	30,712	$	26,749

_________________

(a)Includes ~~$438~~$378 million and ~~$685~~$348 million in unrestricted cash outside of the U.S. at June 30, ~~2021~~2022 and December 31, ~~2020.~~2021. This cash is considered to be indefinitely invested based on specific plans for ~~reinvestment of these earnings.~~

reinvestment.

At June 30, ~~2021,~~2022, available liquidity increased from December 31, ~~2020,~~2021, primarily due to increased available borrowing capacity on unpledged eligible assets, resulting from the issuance of securitization transactions and unsecured debt, ~~partially offset by a decrease~~and increase in cash and cash equivalents. We generally target liquidity levels to support at least six months of our expected net cash outflows, including new originations, without access to new debt financing transactions or other capital markets activity. At June 30, ~~2021,~~2022, available liquidity exceeded our liquidity targets.

Our ~~Support Agreement~~support agreement with GM (the Support Agreement) provides that GM will use commercially reasonable efforts to ensure we will continue to be designated as a subsidiary borrower under GM's ~~unsecured~~corporate revolving credit facilities. We have access, subject to available capacity, to $15.5 billion of GM's unsecured revolving credit facilities consisting of a three-year, $4.3 billion facility and a five-year, $11.2 billion facility. We also have exclusive access to GM's $2.0 billion 364-day revolving credit facility (GM Revolving 364-day Credit Facility) and a $1.0 billion junior subordinated unsecured intercompany revolving credit facility (the Junior Subordinated Revolving Credit Facility). We had no borrowings outstanding under any of the GM revolving credit facilities at June 30, 2022 and December 31, 2021. In April 2022, GM renewed the GM Revolving 364-Day Credit ~~Facility.~~

In April 2021, GM increased the total borrowing capacity of the five-year, $10.5 billion facility to $11.2 billion and extended the termination date for a $9.9 billion portion of the five-year facility by three years, now set to mature on April 18, 2026. The termination date of April 18, 2023 for the remaining portion of the five-year facility remains unchanged. GM also renewed and increased the total borrowing capacity of the three-year, $4.0 billion facility to $4.3 billion,Facility, which now matures on April 4, 2023.

Cruise is the GM global segment responsible for the development and commercialization of autonomous vehicle technology. We have a multi-year credit agreement with Cruise whereby we may provide advances to Cruise up to an aggregate of $5.0 billion, over time, through 2024, to fund the purchase of autonomous vehicles from GM. Cruise had an insignificant amount of borrowings outstanding under the credit agreement at June 30, 2022 and no borrowings outstanding at December 31, 2021.


Cash Flow	Six Months Ended June 30,				2022 vs. 2021
	2022		2021		2022 vs. 2021
Net cash provided by operating activities	$	2,366	$	3,619	$	(1,253)
Net cash used in investing activities	$	(2,951)	$	(3,409)	$	458
Net cash provided by financing activities	$	1,508	$	194	$	1,314

During the six months ended June 30, 2022, net cash provided by operating activities decreased primarily due to a decrease in counterparty derivative collateral posting activities of $729 million and a decrease in leased vehicle income of $569 million, partially offset by a decrease in interest paid of $207 million.

During the six months ended June 30, 2022, net cash used in investing activities decreased primarily due to a decrease in purchases of leased vehicles of $6.2 billion, an increase in collections and recoveries on retail finance receivables of $1.5 billion

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April 7, 2024, and renewed the GM Revolving 364-Day Credit Facility, which now matures on April 6, 2022. At June 30, 2021, we had no borrowings outstanding under any of the GM revolving credit facilities.

Cash Flow Six Months Ended June 30, 2021 vs. 2020
2021 2020
Net cash provided by operating activities $ 3,619 $ 4,080 $ (461)
Net cash used in investing activities $ (3,409) $ (3,223) $ (186)
Net cash provided by financing activities $ 194 $ 3,044 $ (2,850)

~~During the six months ended June 30, 2021, net cash provided by operating activities decreased primarily due to a decrease in derivative collateral posting activities of $545 million~~ and a decrease in ~~leased vehicle income~~the purchases of ~~$224~~consumer finance receivables of $320 million, partially offset by ~~a decrease in interest paid of $289 million.~~

During the six months ended June 30, 2021, net cash used in investing activities increased primarily due to an increase in purchases of leased vehicles of $6.3 billion, an increase in purchases of retail finance receivables of $2.4 billion and a decrease in net collections of commercial finance receivables of ~~$569 million, partially offset by an increase~~$4.2 billion and a decrease in proceeds from termination of leased vehicles of ~~$5.3 billion, an increase in collections and recoveries on retail finance receivables of $2.9 billion, and a decrease of $938 million in net loans receivable from GM.~~$3.3 billion.

During the six months ended June 30, ~~2021,~~2022, net cash provided by financing activities ~~decreased~~increased primarily due to a decrease in ~~borrowings~~debt repayments of ~~$5.1~~$4.3 billion and ~~an increase~~a decrease in dividend payments of ~~$416~~$452 million, partially offset by a decrease in ~~debt repayments~~borrowings of ~~$2.7 billion . We increased our borrowings during the six months ended June 30, 2020 due to the onset of the COVID-19 pandemic.~~$3.5 billion.

Credit Facilities In the normal course of business, in addition to using our available cash, we fund our operations by borrowing under our credit facilities, which may be secured and/or structured as securitizations, or may be unsecured. We repay these borrowings as appropriate under our liquidity management strategy.

At June 30, ~~2021~~2022, credit facilities consist of the following:


Facility Type	Facility Type	Facility Amount		Advances Outstanding		Facility Type	Facility Amount		Advances Outstanding
Revolving retail asset-secured facilities(a)	Revolving retail asset-secured facilities(a)	$	22,654	$	1,268	Revolving retail asset-secured facilities(a)	$	22,154	$	1,288
Revolving commercial asset-secured facilities(b)	Revolving commercial asset-secured facilities(b)	4,084		—		Revolving commercial asset-secured facilities(b)	3,949		—
Total secured	Total secured	26,738		1,268		Total secured	26,103		1,288
Unsecured committed facilities	Unsecured committed facilities	496		18		Unsecured committed facilities	612		55
Unsecured uncommitted facilities(c)	Unsecured uncommitted facilities(c)	1,280		1,280		Unsecured uncommitted facilities(c)	1,293		1,293
Total unsecured	Total unsecured	1,776		1,298		Total unsecured	1,904		1,348
Junior Subordinated Revolving Credit Facility	Junior Subordinated Revolving Credit Facility	1,000		—		Junior Subordinated Revolving Credit Facility	1,000		—
GM Revolving 364-Day Credit Facility	GM Revolving 364-Day Credit Facility	2,000		—		GM Revolving 364-Day Credit Facility	2,000		—
Total	Total	$	31,514	$	2,566	Total	$	31,008	$	2,636

_________________

(a)Includes committed and uncommitted revolving credit facilities backed by retail finance receivables and leases. The financial institutions providing the uncommitted facilities are not contractually obligated to advance funds under them. We had ~~$27 million~~an insignificant amount in advances outstanding and ~~$756~~$742 million in unused borrowing capacity on these uncommitted facilities at June 30, ~~2021.~~2022.

(b)Includes revolving credit facilities backed by loans to dealers for floorplan financing.

(c)The financial institutions providing the uncommitted facilities are not contractually obligated to advance funds under them. We had $1.7 billion in unused borrowing capacity on these facilities at June 30, ~~2021.~~2022.

Refer to Note 6 to our condensed consolidated financial statements for further discussion.

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~~GENERAL MOTORS FINANCIAL COMPANY, INC.~~

Securitization Notes Payable We periodically finance our retail and commercial finance receivables and leases through public and private term securitization transactions, where the securitization markets are sufficiently developed. A summary of securitization notes payable is as follows:


Year of Transaction	Year of Transaction	Maturity Date (a)			Original Note Issuance (b)		Note Balance At June 30, 2021		Year of Transaction	Maturity Date (a)			Original Note Issuance (b)		Note Balance At June 30, 2022
2016		February 2024			$	500	$	26
2017		January 2023	-	May 2025	$	7,718	980
2018	2018	July 2023	-	September 2026	$	11,678	3,084		2018	March 2024	-	September 2026	$	6,587	$	795
2019	2019	April 2022	-	July 2027	$	13,956	5,098		2019	April 2024	-	July 2027	$	9,386	2,216
2020	2020	December 2021	-	August 2028	$	24,454	16,668		2020	August 2023	-	August 2028	$	21,752	8,209
2021	2021	September 2022	-	December 2028	$	13,381	11,945		2021	December 2022	-	June 2034	$	23,263	14,339
2022									2022	October 2023	-	December 2029	$	12,318	11,316
Total active securitizations	Total active securitizations						37,801		Total active securitizations						36,875
Debt issuance costs	Debt issuance costs						(70)		Debt issuance costs						(69)
Total	Total						$	37,731	Total						$	36,806

_________________

(a)Maturity dates represent legal final maturity of issued notes. The notes are expected to be paid based on amortization of the finance receivables and leases pledged.

(b)At historical foreign currency exchange rates at the time of issuance.

Our securitizations utilize ~~SPEs~~special purpose entities which are also ~~VIEs~~variable interest entities that meet the requirements to be consolidated in our financial statements. Refer to Note 7 to our condensed consolidated financial statements for further discussion.

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Unsecured Debt We periodically access the unsecured debt capital markets through the issuance of senior unsecured notes. At June 30, ~~2021,~~2022, the aggregate principal amount of our outstanding unsecured senior notes was $47.6 billion.

We issue other unsecured debt through demand notes, commercial paper offerings and other bank and non-bank funding sources. At June 30, ~~2021,~~2022, we had ~~$5.5~~$3.8 billion ~~of this type of unsecured debt~~ outstanding ~~of which $2.0~~in demand notes and $2.2 billion ~~was issued~~ under the U.S. commercial paper program.

LIBOR Transition The U.K. Financial Conduct Authority, which regulates the London Interbank Offered Rate (LIBOR), announced that it will no longer persuade or compel banks to submit rates for the calculation of LIBOR after 2021. In March 2021, the ~~U.K. Financial Conduct Authority announced~~ICE Benchmark Administration Limited, the administrator of LIBOR, extended the transition dates of certain U.S. Dollar LIBOR tenors to June 30, 2023, after which LIBOR reference rates will cease to be provided. Despite this deferral, the LIBOR administrator has advised that no new contracts using U.S. Dollar LIBOR should be entered into after December 31, 2021. It is unknown whether LIBOR will ~~cease~~continue to be published by its administrator based on continued bank submissions, or on any other basis, after ~~2021, with the exception of U.S. dollar LIBOR ceasing at the end of June 2023.~~such dates. Regulators, industry groups and certain committees such as the Alternative Reference Rates Committee ~~(ARRC)~~ have, among other things, published recommended fallback language for LIBOR-linked financial instruments, identified recommended alternatives for certain LIBOR rates, such as ~~the~~ Secured Overnight Financing Rate, ~~(SOFR),~~ and proposed implementations of the recommended alternatives in floating rate financial instruments. For more information on the expected replacement of LIBOR, see the "Risk Factors" section of our ~~2020~~2021 Form 10-K.

Support Agreement ~~At June 30, 2021 and December 31, 2020, our~~Our earning assets leverage ratio calculated in accordance with the terms of the Support Agreement was ~~7.66x~~7.62x and ~~8.00x,~~8.07x at June 30, 2022 and December 31, 2021, and the applicable leverage ratio threshold was ~~12.00x and 11.50x. The applicable~~12.00x. In determining our earning assets leverage ratio ~~increased to~~(net earning assets divided by adjusted equity) under the ~~maximum applicable ratio of 12.00x during the quarter as~~Support Agreement, net earning assets ~~increased above $100 billion~~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 ~~the first~~derivative accounting from time to time. The decrease in the earning assets leverage ratio is primarily due to increased shareholders' equity as a result of ~~$2.1~~$1.8 billion in net ~~income;~~income, partially offset by ~~$1.2 billion~~$750 million of dividends on our common stock paid to GM. Current dividend levels are reflective of our record earnings supported by strong residual values, favorable credit performance and improved economic conditions. Future dividends to GM will depend on several factors, including business and economic conditions, our financial condition, earnings, liquidity requirements and leverage ratio.

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~~GENERAL MOTORS FINANCIAL COMPANY, INC.~~

Asset and Liability Maturity Profile We define our asset and liability maturity profile as the cumulative maturities of our finance receivables, investment in leased vehicles, net of accumulated depreciation, cash and cash equivalents and other assets less our cumulative debt maturities. We manage our balance sheet so that asset maturities will exceed debt maturities each year. The following chart presents our cumulative maturities for earning assets and debt at June 30, ~~2021:~~2022:


		2021		2022		2023		2024 and Thereafter			2022		2023		2024		2025 and Thereafter
Encumbered assets	Encumbered assets	$	13,235	$	31,824	$	43,509	$	49,073	Encumbered assets	$	13,935	$	33,773	$	44,853	$	50,947
Unencumbered assets	Unencumbered assets	19,337		35,328		49,335		66,849		Unencumbered assets	24,038		38,827		51,348		66,831
Total assets	Total assets	32,572		67,152		92,844		115,922		Total assets	37,973		72,600		96,201		117,778

Secured debt	Secured debt	10,537		25,337		34,640		39,070		Secured debt	10,439		25,300		33,600		38,165
Unsecured debt	Unsecured debt	8,050		17,084		26,976		54,361		Unsecured debt	8,750		17,617		25,915		56,117
Total debt(a)	Total debt(a)	18,587		42,421		61,616		93,431		Total debt(a)	19,189		42,917		59,515		94,282
Net excess liquidity	Net excess liquidity	$	13,985	$	24,731	$	31,228	$	22,491	Net excess liquidity	$	18,784	$	29,683	$	36,686	$	23,496

_________________

(a)Excludes unamortized debt premium/(discount), unamortized debt issuance costs, and fair value adjustments.

Critical Accounting Estimates

The preparation of condensed financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities as of the date of the financial statements and the reported amount of revenue and expenses in the periods presented. Actual results could differ from those estimates, due to inherent uncertainties in making estimates, and those differences may be material. The critical accounting estimates that affect the condensed consolidated financial statements and the judgment and assumptions used are consistent with those described in Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our 2021 Form 10-K.

Forward-Looking Statements

This report contains several "forward-looking statements." Forward-looking statements are those that use words such as "believe," "expect," "intend," "plan," "may," "likely," "should," "estimate," "continue," "future" or "anticipate" and other comparable expressions. These words indicate future events and trends. Forward-looking statements are our current views with

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respect to future events and financial performance. These forward-looking statements are subject to many assumptions, risks and uncertainties that could cause actual results to differ significantly from historical results or from those anticipated by us. The most significant risks are detailed from time to time in our filings and reports with the ~~SEC,~~Securities and Exchange Commission (SEC), including our ~~2020~~2021 Form 10-K. It is advisable not to place undue reliance on our forward-looking statements. We undertake no obligation to, and do not, publicly update or revise any forward-looking statements, except as required by federal securities laws, whether as a result of new information, future events or otherwise.

The following factors are among those that may cause actual results to differ materially from historical results or from the forward-looking statements:

•~~the length and severity of the COVID-19 pandemic;~~

•GM's ability to sell new vehicles that we finance in the markets we serve;

•dealers' effectiveness in marketing our financial products to consumers;

•the viability of GM-franchised dealers that are commercial loan customers;

•the sufficiency, availability and cost of sources of financing, including credit facilities, securitization programs and secured and unsecured debt issuances;

•the adequacy of our underwriting criteria for loans and leases and the level of net charge-offs, delinquencies and prepayments on the loans and leases we purchase or originate;

•our ability to effectively manage capital or liquidity consistent with evolving business or operational needs, risk management standards and regulatory or supervisory requirements;

•the adequacy of our allowance for loan losses on our finance receivables;

•our ability to maintain and expand our market share due to competition in the automotive finance industry from a large number of banks, credit unions, independent finance companies and other captive automotive finance subsidiaries;

•changes in the automotive industry that result in a change in demand for vehicles and related vehicle financing;

•the effect, interpretation or application of new or existing laws, regulations, court decisions and accounting pronouncements;

•adverse determinations with respect to the application of existing laws, or the results of any audits from tax authorities, as well as changes in tax laws and regulations, supervision, enforcement and licensing across various jurisdictions;

•the prices at which used vehicles are sold in the wholesale auction markets;

•vehicle return rates, our ability to estimate residual value at lease inception and the residual value performance on vehicles we lease;

•interest rate fluctuations and certain related derivatives exposure;

•our joint ventures in China, which we cannot operate solely for our benefit and over which we have limited control;

•changes in the determination of LIBOR and other benchmark rates;

~~Table~~•the length and severity of ~~Contents~~the COVID-19 pandemic;

~~GENERAL MOTORS FINANCIAL COMPANY, INC.~~

•our ability to secure private ~~customer and employee~~ data, ~~or our~~ proprietary information, manage risks related to security breaches and other disruptions to ~~our~~ networks and systems owned or maintained by us or third parties and comply with enterprise data regulations in all key market regions;

•foreign currency exchange rate fluctuations and other risks applicable to our operations outside of the U.S.; ~~and~~

•changes in local, regional, national or international economic, social or political ~~conditions.~~conditions; and

•impact and uncertainties related to climate related events and climate change legislation.

If one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect, our actual results may vary materially from those expected, estimated or projected.

~~Additional~~Available Information

Our internet website is www.gmfinancial.com. Our website contains detailed information about us and our subsidiaries. Our Investor Center website at https://investor.gmfinancial.com contains a significant amount of information about our Company, including financial and other information for investors. We encourage investors to visit our website, as we frequently update and post new information about our Company on our website, and it is possible that this information could be deemed to be material information. Our website and information included in or linked to our website are not part of this Quarterly Report on Form 10-Q.

Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, as well as any amendments to those reports, are available free of charge on our website as soon as reasonably practicable after they are electronically filed with or furnished to the SEC. These reports can also be found on the SEC website at www.sec.gov.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes in our exposure to market risk since December 31, ~~2020.~~2021. Refer to Item 7A. - "Quantitative and Qualitative Disclosures About Market Risk" in our ~~2020~~2021 Form 10-K.

Item 4. Controls and Procedures

Disclosure Controls and Procedures We maintain disclosure controls and procedures designed to provide reasonable assurance that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended (Exchange Act), is recorded, processed, summarized and reported within the specified time periods and accumulated and communicated to our management, including our principal executive officer (CEO) and principal financial officer (CFO), as appropriate, to allow timely decisions regarding required disclosures.

Our management, with the participation of our CEO and CFO, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) promulgated under the Exchange Act) atas of June 30, ~~2021,~~2022, as required by paragraph (b) of Rules ~~13a-15(b)~~13a-15 or ~~15d-15(b) promulgated under the Exchange Act.~~15d-15. Based on this evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of June 30, ~~2021.~~2022.

Changes in Internal Control over Financial Reporting There have not been any changes in our internal control over financial reporting during the ~~three~~six months ended June 30, ~~2021~~2022, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. However, due to the COVID-19 pandemic, we are monitoring our control environment with increased vigilance to ensure changes as a result of physical distancing are addressed and all increased risks are mitigated. For additional information refer to the "Risk Factors" section of our 2020 Form 10-K.

PART II

Item 1. Legal Proceedings

~~The discussion under "Legal Proceedings" and "Other Administrative Tax Matters" in~~Refer to Note 9 to our condensed consolidated financial statements ~~is incorporated by reference into this Part II, Item 1.~~for information relating to legal proceedings.

Item 1A. Risk Factors

We face a number of significant risks and uncertainties in connection with our operations. Our business and the results of our operations and financial condition could be materially adversely affected by these risk factors. There have been no material changes to the Risk Factors disclosed in our ~~2020~~2021 Form 10-K.

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Item 6. Exhibits

3.1

Second Amended and Restated Certificate of Formation of General Motors Financial Company, Inc., incorporated herein by reference to Exhibit 3.1 to the Annual Report on Form 10-K, filed on February 10, ~~2021.~~2021

Incorporated by Reference

3.2

Third Amended and Restated Bylaws of General Motors Financial Company, Inc., incorporated herein by reference to Exhibit 3.2 to the Annual Report on Form 10-K, filed on February 10, ~~2021.~~2021

Incorporated by Reference

4.1

~~Forty-Second~~Forty-Sixth Supplemental Indenture, dated April ~~9, 2021,~~7, 2022, between General Motors Financial Company, Inc. and ~~Wells Fargo Bank, National Association,~~Computershare Trust Company, N.A., as trustee, with respect to General Motors Financial Company, Inc.’s Floating Rate Senior Notes due 2025, 3.800% Senior Notes due ~~2024, 1.050%~~2025 and 4.300% Senior Notes due ~~2024 and 2.400% Senior Notes due 2028,~~2029, incorporated herein by reference to Exhibit 4.2 to the Current Report on Form 8-K, filed on April ~~9, 2021.~~7, 2022

Incorporated by Reference

4.24.2

~~Forty-Third~~Forty-Seventh Supplemental Indenture, dated June ~~10, 2021,~~9, 2022, between General Motors Financial Company, Inc. and ~~Wells Fargo Bank, National Association,~~Computershare Trust Company, N.A., as trustee, with respect to General Motors Financial Company, Inc.’s ~~1.500%~~5.000% Senior Notes due ~~2026 and 2.700% Senior Notes due 20~~31,2027, incorporated herein by reference to Exhibit 4.2 to the Current Report on Form 8-K, filed on June ~~10, 2021.~~9, 2022

Incorporated by Reference

~~10.1~~10.1†

Fourth Amended and Restated 3-Year Revolving Credit Agreement among General Motors Company, General Motors Financial Company, Inc., General Motors do Brasil Ltda., the subsidiary borrowers from time to time parties thereto, the several lenders from time to time parties thereto, JPMorgan Chase Bank, N.A., as administrative agent, and Citibank, N.A., as syndication agent ~~, incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed on April 7, 2021.~~

~~Incorporated by Reference~~

~~10.2~~

~~Third~~ Amended and Restated 364-Day Revolving Credit Agreement among General Motors Company, General Motors Financial Company, Inc., the subsidiary borrowers from time to time parties thereto, the several lenders from time to time parties thereto, JPMorgan Chase Bank, N.A., as administrative agent, ~~and~~ Citibank, N.A., as syndication agent, and Bank of America, N.A., as co-syndication agent, incorporated herein by reference to Exhibit ~~10.2~~10.1 to the Current Report on Form 8-K, filed on April ~~7, 2021.~~

~~Incorporated by Reference~~

~~10.3~~

Amendment No. 1 to Third Amended and Restated 5-Year Revolving Credit Agreement, dated as of April 18, 2018, among General Motors Company, General Motors Financial Company, Inc., GM Global Treasury Centre, General Motors do Brasil Ltda., the subsidiary borrowers from time to time parties thereto, the several lenders from time to time party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and Citibank, N.A., as syndication agent~~, incorporated herein by reference to Exhibit 10.3 to the Current Report on Form 8-K, filed on April 7, 2021.~~5, 2022

Incorporated by Reference

31.1

Section 302 Certification of the Chief Executive Officer

Filed Herewith

31.2

Section 302 Certification of the Chief Financial Officer

Filed Herewith

Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Furnished Herewith

101

The following financial information from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, ~~2021,~~2022, formatted in Inline Extensible Business Reporting Language (iXBRL) includes: (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Income, (iii) the Condensed Consolidated Statements of Comprehensive Income, (iv) the Condensed Consolidated Statements of Shareholders' Equity, (v) the Condensed Consolidated Statements of Cash Flows, and (vi) Notes to the Condensed Consolidated Financial Statements

Filed Herewith

104

The cover page from the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, ~~2021,~~2022, formatted as iXBRL and contained in Exhibit 101

Filed Herewith

_________


†			Portions of the exhibit have been omitted pursuant to Rule 601(b)(10) of Regulation S-K. The omitted information is not material and would likely cause competitive harm to the registrant if publicly disclosed.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

General Motors Financial Company, Inc.

(Registrant)

Date:

~~August 4, 2021~~July 26, 2022

By:

/S/ SUSAN B. SHEFFIELD

Susan B. Sheffield

Executive Vice President and

Chief Financial Officer

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