UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________________________________________
FORM 10-Q
(Mark One)
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☒ | | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended June 30, 20212022
OR
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☐ | | 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)
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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:
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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.
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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
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PART I |
Item 1. | Condensed Consolidated Financial Statements (Unaudited) | |
| Condensed Consolidated Balance Sheets (Unaudited) | |
| Condensed Consolidated Statements of Income (Unaudited) | |
| Condensed Consolidated Statements of Comprehensive Income (Unaudited) | |
| Condensed Consolidated Statements of Shareholders' Equity (Unaudited) | |
| Condensed Consolidated Statements of Cash Flows (Unaudited) | |
| Notes to Condensed Consolidated Financial Statements | |
| Note 1. Summary of Significant Accounting Policies | |
| Note 2. Related Party Transactions | |
| Note 3. Finance Receivables | |
| Note 4. Leased Vehicles | |
| Note 5. Equity in Net Assets of Non-consolidated Affiliates | |
| Note 6. Debt | |
| Note 7. Variable Interest Entities and Other Transfers of Finance Receivables | |
| Note 8. Derivative Financial Instruments and Hedging Activities | |
| Note 9. Commitments and Contingencies | |
| Note 10. Shareholders' Equity | |
| Note 11. Income Taxes | |
| Note 12. Segment Reporting | |
| Note 13. Regulatory Capital and Other Regulatory Matters | |
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | |
Item 4. | Controls and Procedures | |
PART II |
Item 1. | Legal Proceedings | |
Item 1A. | Risk Factors | |
Item 6. | Exhibits | |
| Signature | |
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 | |
| 60,212 | | | 58,390 | | |
Finance receivables, net of allowance for loan losses $2,027 and $1,886 (Note 3; | | Finance receivables, net of allowance for loan losses $2,027 and $1,886 (Note 3; | 66,847 | | | 62,979 | |
| | 40,596 | | | 39,819 | | | 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 | |
| | 7,247 | | | 7,156 | | | 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 | |
| | $ | 38,999 | | | $ | 39,982 | | | $ | 38,095 | | | $ | 39,338 | |
| | 54,571 | | | 52,443 | | | 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 |
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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.
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 | |
| | 50 | | | 42 | | | 104 | | | 67 | | | 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 | |
| | 401 | | | 53 | | | 705 | | | 116 | | | 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.
GENERAL MOTORS FINANCIAL COMPANY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(inIn millions) (unaudited)(Unaudited)
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| 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 | |
| — | | | — | | | — | | | — | | | (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 | |
| — | | | — | | | — | | | — | | | (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 | |
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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 | |
| — | | | — | | | — | | | — | | | (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 | |
| — | | | — | | | — | | | — | | | (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 | |
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| 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 | |
| — | | | — | | | — | | | — | | | (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 | |
| — | | | — | | | — | | | — | | | (600) | | | (600) | |
Dividends declared on preferred stock (Note 10) | — | | | — | | | — | | | — | | | (59) | | | (59) | |
Balance at June 30, 2021 | $ | — | | | $ | — | | | $ | 8,668 | | | $ | (1,206) | | | $ | 7,003 | | | $ | 14,465 | |
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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 | |
| — | | | — | | | — | | | — | | | (750) | | | (750) | |
Dividends declared on preferred stock (Note 10) | — | | | — | | | — | | | — | | | (59) | | | (59) | |
Balance at June 30, 2022 | $ | — | | | $ | — | | | $ | 8,713 | | | $ | (1,226) | | | $ | 7,357 | | | $ | 14,844 | |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
Amounts may not add due to rounding.
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, 20212022 |
Cash and cash equivalents | $ | 4,3785,275 | |
Restricted cash included in other assets | 4,1522,844 | |
Total | $ | 8,5308,119 | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
Amounts may not add due to rounding.
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 (20202, 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, 20212022 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, 20202021 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 Reform2016-13, "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 expedientsWe adopted ASU 2016-13 on January 1, 2020. ASU 2022-02 enhances disclosure requirements for certain derivative instruments affectedloan refinancing and restructurings by reference rate reform. Wecreditors 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 applicationadoption of these expedients areASU 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.
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, 20212022 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 towill 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 GMGM's $2.0 billion 364-day revolving credit facility (GM Revolving 364-Day364-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 intoWe 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.
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, 20212022 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, 20212022 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 | % |
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, 20212022 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, 20212022 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.
GENERAL MOTORS FINANCIAL COMPANY, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
Impaired Retail Finance Receivables - TDRsThe 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, 20212022 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.
GENERAL MOTORS FINANCIAL COMPANY, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
At June 30, 20212022 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, 20212022 and 2020. Commercial2021. There were 0 commercial finance receivables on nonaccrual status were insignificant, and noneNaN were classified as TDRs at June 30, 20212022 and December 31, 2020.2021.
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 infor the three months ended June 30, 2022 and 2021 and 2020$2.4 billion and $3.2 billion and $3.7 billion infor the six months ended June 30, 20212022 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, 20212022 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 | |
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 20222023 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
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, theythese subsidiaries are separate legal entities and theirthe 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, 20212022 and December 31, 2020, $5242021, $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.
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, 20212022 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, 20212022 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, 20212022 and December 31, 2020,2021, we posted $104had $864 million and $139$45 million of collateral posted to counterparties that iswas available for netting against our liability positions.
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, 20212022 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, 20212022 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, 20212022 and 2020.2021.
(c)Transaction activity recorded in operating expenses related to foreign currency-denominated loans.
GENERAL MOTORS FINANCIAL COMPANY, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
The tabletables below presentspresent 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 lossincome (loss) were recorded to interest expense.
(b)During the next twelve12 months, we estimate $74$51 million in lossesgains 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.
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 | Common Stock | | | | Common Stock | | | |
Number of shares authorized | Number of shares authorized | 10,000,000 | | | 10,000,000 | | Number of shares authorized | 10,000,000 | | | 10,000,000 | |
Number of shares issued and outstanding | Number of shares issued and outstanding | 5,050,000 | | | 5,050,000 | | Number of shares issued and outstanding | 5,050,000 | | | 5,050,000 | |
During the six months ended June 30, 20212022 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, 20212022 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) | |
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. KeyThe 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, 20212022 and December 31, 2020.2021.
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 2020Annual 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 20202021 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 EstimatesOverview
The preparationWe continue to monitor the impact of condensed financial statementsthe 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 acceptedChina. 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 asmacroeconomic impact of the dateconflict 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 20202021 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, 20212022 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 increased2022 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 key2021. 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 decline9.2% 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 $760increased $287 million primarily due to a reduction in the reserve levels established duringrecorded 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, andas well as favorable expectations for future charge-offs and recoveries, reflecting improvedrecoveries. 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 spreadseffective 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 increaseddecreased 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 increaseddecreased 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'sGeneral Motors Company's (GM) enterprise profitability and cash flow. Our return on average tangible common equity increaseddecreased 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 increaseddecreased earnings.
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, 20212022 compared to Three Months Ended June 30, 20202021
| 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, 20212022 and 2020.2021. Penetration levels vary depending on incentive financing programs available and competing third-party financing products in the market.
Average retailcommercial finance receivables increased primarily due to continued strong demand for new vehicles, which is also reflectedgrowth in the increase in retail finance receivablesnumber 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 continuedsustained 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.
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 increasedwas 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 decreasedincreased due to a decreasean 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 waswere 1.5% for both the three months ended June 30, 20212022 and 2020.2021.
Leased Vehicle Expenses Leased vehicle expenses decreased primarily due to a $583 million increase in lease termination gainsincreased for the three months ended June 30, 20212022 compared to the same period in 2020, as well as2021, 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 $268increased $139 million primarily due to a reduction in the reserve levels established duringrecorded 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, andas well as favorable expectations for future charge-offs and recoveries, reflecting improvedrecoveries. 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 decreasedslightly increased primarily due to decreased credit spreadsan 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, 20212022 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 LossGain (Loss) on Hedges Unrealized lossesgain (loss) on hedges included in other comprehensive income (loss) were $(7)$21 million and $(34)$(7) million for the three months ended June 30, 20212022 and 2020.2021. The change in unrealized lossgain (loss) was primarily due to changes in the fair value of our foreign currency swap agreements resulting from the weakeningagreements.
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, 20212022 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.
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, 20212022 compared to Six Months Ended June 30, 20202021
| 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, 20212022 and 2020.2021. Penetration levels vary depending on incentive financing programs available and competing third-party financing products in the market.
Average retailcommercial finance receivables increased slightly primarily due to continued strong demand for new vehicles, which is also reflectedgrowth in the increase in retail finance receivablesnumber 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 commercial finance receivables decreased primarily due to continuedsustained 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.and reduced lease financing incentive levels.
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 increasedwas 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 decreasedincreased slightly due to a decreasean increase in the sizeeffective yield as a result of the portfolio.higher benchmark rates.
Leased Vehicle IncomeLeased vehicle income decreased primarily due to a decline9.2% decrease in the average balance of the leased vehicles portfolio.
GENERAL MOTORS FINANCIAL COMPANY, INC.
| 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 towere 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 millionincreased primarily due to a reduction in the reserve levels established duringrecorded 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, andas well as favorable expectations for future charge-offs and recoveries, reflecting improvedrecoveries. 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 spreadseffective 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, 20212022 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, 20212022 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.
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 $61$(69) million and $(393)$61 million for the six months ended June 30, 20212022 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.
GENERAL MOTORS FINANCIAL COMPANY, INC.
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 ofis 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 comparedbut continued to June 30, 2020. Delinquency is expectedbe 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 bebut 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 Paymentwas 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, arewere 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.
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-offsNet charge-offs for the three and sixmonths ended June 30, 2022 increased from the three months ended June 30, 2021, and 2020,but continued at record lowto 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 toWe 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 bebut 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 | % |
GENERAL MOTORS FINANCIAL COMPANY, INC.
| | | | | | | | | | | |
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, 20212022 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, 20212022 and 2020,2021, and substantially all of our commercial finance receivables were current with respect to payment status at June 30, 20212022 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 uponis dependent on the level of used vehicle pricingvalues at lease termination compared to contractual residual values at lease inception and/or growth and age of the leased vehicles portfolio. Due toinception. Used vehicle prices were sustained at high used vehicle priceslevels 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 inhigh 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.
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.
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 distributionsproceeds 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 | |
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(a)Includes $438$378 million and $685$348 million in unrestricted cash outside of the U.S. at June 30, 20212022 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 decreaseand 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 Agreementsupport 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 unsecuredcorporate 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 | |
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
GENERAL MOTORS FINANCIAL COMPANY, INC.
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 incomethe purchases of $224consumer 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 decreasedincreased primarily due to a decrease in borrowingsdebt repayments of $5.1$4.3 billion and an increasea decrease in dividend payments of $416$452 million, partially offset by a decrease in debt repaymentsborrowings 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, 20212022, 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 millionan 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.
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 SPEsspecial purpose entities which are also VIEsvariable 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.
GENERAL MOTORS FINANCIAL COMPANY, INC.
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 $2.0in 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 announcedICE 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 ceasecontinue 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 20202021 Form 10-K.
Support Agreement At June 30, 2021 and December 31, 2020, ourOur earning assets leverage ratio calculated in accordance with the terms of the Support Agreement was 7.66x7.62x 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 applicable12.00x. 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 asSupport Agreement, net earning assets increased above $100 billionmeans 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 firstderivative 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.
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
GENERAL MOTORS FINANCIAL COMPANY, INC.
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 20202021 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 Contentsthe 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.
AdditionalAvailable 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.
GENERAL MOTORS FINANCIAL COMPANY, INC.
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 20202021 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 threesix months ended June 30, 20212022, 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" inRefer 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 20202021 Form 10-K.
GENERAL MOTORS FINANCIAL COMPANY, INC.
Item 6. Exhibits
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| | Forty-SecondForty-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 FloatingRateSenior 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 |
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| | Forty-ThirdForty-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 2031,2027, 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 |
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| | 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 |
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| | 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 10.210.1 to the Current Report on Form 8-K, filed on April 7, 2021. | | Incorporated by Reference |
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| | 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 |
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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 |
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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 |
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† | 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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GENERAL MOTORS FINANCIAL COMPANY, INC.
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.
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| | | | | General Motors Financial Company, Inc. |
| | | | | (Registrant) |
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Date: | August 4, 2021July 26, 2022 | | By: | | /S/ SUSAN B. SHEFFIELD |
| | | | | Susan B. Sheffield |
| | | | | Executive Vice President and |
| | | | | Chief Financial Officer |