Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________________________________________ 
FORM 10-Q
(Mark One)
ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2014March 31, 2015
OR
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period ________________ to ________________
Commission file number 1-10667
______________________________________________ 
General Motors Financial Company, Inc.
(Exact name of registrant as specified in its charter)
Texas 75-2291093
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
801 Cherry Street, Suite 3500, Fort Worth, Texas 76102
(Address of principal executive offices, including Zip Code)
(817) 302-7000
(Registrant’s telephone number, including area code) 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  Q    No  o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  Q    No  o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of "large accelerated filer"; "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated fileroAccelerated fileroNon-accelerated filerýSmaller Reporting Companyo
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes  o    No  Q 

As of July 24, 2014,April 23, 2015, there were 502505 shares of the registrant’s common stock, par value $1.00 per share, outstanding. All of the registrant’s common stock is owned by General Motors Holdings, LLC.




Table of Contents

GENERAL MOTORS FINANCIAL COMPANY, INC.
INDEX TO FORM 10-Q
 
  Page
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Table of Contents

Part I.FINANCIAL INFORMATION
Item 1.CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
GENERAL MOTORS FINANCIAL COMPANY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in millions, except per share amounts) 
(Unaudited)
 June 30, 2014 December 31, 2013 March 31, 2015 December 31, 2014
Assets        
Cash and cash equivalents $1,412
 $1,074
 $2,121
 $2,974
Finance receivables, net 31,545
 29,282
Restricted cash 2,205
 1,958
Property and equipment, net 150
 132
Leased vehicles, net 4,748
 3,383
Finance receivables, net (Note 3; Note 8 VIEs)
 32,470
 33,000
Leased vehicles, net (Note 4; Note 8 VIEs)
 8,939
 7,060
Restricted cash (Note 5; Note 8 VIEs)
 1,849
 2,071
Goodwill 1,243
 1,244
Equity in net assets of non-consolidated affiliates (Note 6)
 929
 
Property and equipment, net of accumulated depreciation of $66 and $59 176
 172
Deferred income taxes 433
 359
 283
 341
Goodwill 1,245
 1,240
Related party receivables 185
 129
 437
 384
Other assets 436
 433
 899
 478
Total assets $42,359
 $37,990
 $49,346
 $47,724
Liabilities and Shareholder's Equity        
Liabilities:        
Secured debt $25,006
 $22,073
Unsecured debt 7,596
 6,973
Secured debt (Note 7; Note 8 VIEs)
 $24,693
 $25,214
Unsecured debt (Note 7)
 14,432
 12,217
Accounts payable and accrued expenses 984
 946
 970
 1,002
Deferred income 249
 168
 546
 392
Deferred income taxes 12
 87
 48
 20
Taxes payable 293
 287
 205
 234
Related party taxes payable 891
 643
 636
 636
Related party payables 432
 368
 450
 433
Other liabilities 229
 160
 163
 184
Total liabilities 35,692
 31,705
 42,143
 40,332
Commitments and contingencies (Note 9)    
Commitments and contingencies (Note 11)
 
 
Shareholder's equity:        
Common stock, $1.00 par value per share, 1,000 shares authorized and 502 shares issued 
 
Common stock, $1.00 par value per share, 1,000 shares authorized and 505 shares issued 
 
Additional paid-in capital 4,793
 4,785
 5,805
 5,799
Accumulated other comprehensive income 65
 11
Accumulated other comprehensive loss (Note 14)
 (779) (433)
Retained earnings 1,809
 1,489
 2,177
 2,026
Total shareholder's equity 6,667
 6,285
 7,203
 7,392
Total liabilities and shareholder's equity $42,359
 $37,990
 $49,346
 $47,724
The accompanying notes are an integral part of these condensed consolidated financial statements.

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Table of Contents

GENERAL MOTORS FINANCIAL COMPANY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(In millions) 
(Unaudited)
 Three Months Ended June 30, Six Months Ended June 30, Three Months Ended March 31,
 2014 2013 2014 2013 2015 2014
Revenue            
Finance charge income $882
 $647
 $1,712
 $1,062
 $854
 $830
Leased vehicle income 238
 136
 438
 243
 431
 200
Other income 71
 53
 138
 71
 69
 67
Total revenue 1,191
 836
 2,288
 1,376
 1,354
 1,097
Costs and expenses            
Salaries and benefits 154
 116
 290
 190
 165
 136
Other operating expenses 126
 75
 259
 109
 141
 133
Total operating expenses 280
 191
 549
 299
 306
 269
Leased vehicle expenses 179
 101
 335
 181
 327
 156
Provision for loan losses 113
 100
 248
 194
 155
 135
Interest expense 354
 164
 669
 246
 380
 315
Acquisition and integration expenses 
 16
 
 22
Total costs and expenses 926
 572
 1,801
 942
 1,168
 875
Equity income (Note 6)
 28
 
Income before income taxes 265
 264
 487
 434
 214
 222
Income tax provision 90
 86
 167
 150
 64
 77
Net income 175
 178
 320
 284
 150
 145
Other comprehensive income (loss)        
Other comprehensive (loss) income    
Defined benefit plans, net 1
 
Foreign currency translation adjustment 49
 (59) 54
 (65) (347) 5
Other comprehensive income (loss), net 49
 (59) 54
 (65)
Comprehensive income $224
 $119
 $374
 $219
Other comprehensive (loss) income, net (346) 5
Comprehensive (loss) income $(196) $150
The accompanying notes are an integral part of these condensed consolidated financial statements.


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Table of Contents

GENERAL MOTORS FINANCIAL COMPANY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
 Six Months Ended June 30, Three Months Ended March 31,
 2014 2013 2015 2014
Net cash provided by operating activities $904
 $701
 $545
 $386
Cash flows from investing activities:        
Purchases of consumer finance receivables, net (6,827) (3,812) (4,065) (3,320)
Principal collections and recoveries on consumer finance receivables 5,300
 3,054
 2,814
 2,617
Net funding of commercial finance receivables (297) (382)
Net collections (funding) of commercial finance receivables 54
 (255)
Purchases of leased vehicles, net (1,856) (1,176) (2,319) (628)
Proceeds from termination of leased vehicles 264
 84
 185
 123
Acquisition of international operations, net of cash on hand (46) (2,107)
Acquisition of equity interest (1,049) 
Purchases of property and equipment (15) (4) (17) (7)
Change in restricted cash (236) (158) (154) (147)
Change in other assets (2) (2) 6
 
Net cash used in investing activities (3,715) (4,503) (4,545) (1,617)
Cash flows from financing activities:        
Net increase in debt (original maturities less than three months) 278
 
Net change in debt (original maturities less than three months) 198
 451
Borrowings and issuance of secured debt 10,722
 9,085
 2,889
 5,070
Payments on secured debt (8,445) (7,007) (2,748) (4,238)
Borrowings and issuance of unsecured debt 1,472
 3,022
 3,258
 390
Payments on unsecured debt (838) (633) (308) (330)
Repayment of debt to Ally Financial 
 (1,416)
Capital contribution from parent 
 1,300
Debt issuance costs (49) (63) (41) (23)
Net cash provided by financing activities 3,140
 4,288
 3,248
 1,320
Net increase in cash and cash equivalents 329
 486
Net (decrease) increase in cash and cash equivalents (752) 89
Effect of foreign exchange rate changes on cash and cash equivalents 9
 (18) (101) (1)
Cash and cash equivalents at beginning of period 1,074
 1,289
 2,974
 1,074
Cash and cash equivalents at end of period $1,412
 $1,757
 $2,121
 $1,162
Supplemental cash flow information:    
Subvention receivable from GM $252
 $111
Commercial loan funding payable to GM $425
 $462
Sale of equity interest in SAIC-GMAC $125
 $
The accompanying notes are an integral part of these condensed consolidated financial statements.

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Table of Contents

GENERAL MOTORS FINANCIAL COMPANY, INC.
Notes to Condensed Consolidated Financial Statements

Note 1.Summary of Significant Accounting Policies
Acquisition of Ally Financial International Operations
We acquired Ally Financial Inc.'s ("Ally Financial") auto finance and financial services operations in Germany, the United Kingdom (the "U.K."), Italy, Sweden, Switzerland, Austria, Belgium, the Netherlands, Greece, Spain, Chile, Colombia and Mexico on April 1, 2013. We acquired Ally Financial's auto finance and financial services operations in France and Portugal on June 1, 2013, and we acquired Ally Financial's auto finance and financial services operations in Brazil on October 1, 2013. Additionally, we have agreed to acquire Ally Financial's non-controlling 40% equity interest in GMAC-SAIC Automotive Finance Company Limited ("GMAC-SAIC"), a joint venture, which conducts auto finance operations in China. This agreement is subject to certain regulatory and other approvals and has become subject to a right of termination by either party in its sole discretion; however, we do not expect the agreement to be terminated. We consider it probable that our acquisition of Ally Financial's interest in GMAC-SAIC will occur in late 2014 or as soon as practicable thereafter. The results of operations of the acquired entities since the applicable acquisition dates are included in our financial statements for the three and six months ended June 30, 2014 and 2013.
Segment Information
We evaluate our business in two operating segments: North America ("the North America Segment") and international ("the International Segment"). The North America Segment includes our operations in the U.S. and Canada. The International Segment includes our operations in all other countries. For additional financial information regarding our business segments, see Note 12 - "Segment Reporting."
Basis of Presentation
The condensed consolidated financial statements include our accounts and the accounts of our wholly-owned subsidiaries, including certain special-purpose financing entities utilized in secured financing transactions, which are considered variable interest entities ("VIEs"). All intercompany transactions and balances have been eliminated in consolidation.
The interim period consolidated financial statements, including the notes thereto, are condensed and do not include all disclosures required by generally accepted accounting principles ("GAAP") in the United States of America. These interim period condensed consolidated financial statements should be read in conjunction with the consolidated financial statements that are included in our Annual Report on Form 10-K filed on February 6, 20144, 2015 ("Form 10-K"). Certain prior yearperiods amounts were reclassified to conform to our current year presentation.
The condensed consolidated financial statements as of June 30, 2014,at March 31, 2015, and for the three and six months ended June 30,March 31, 2015 and 2014, and 2013, are unaudited and, in management’s opinion, include all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the results for such interim periods. The results for interim periods are not necessarily indicative of results for a full year.
The preparationSubsequent to the issuance of our condensed consolidated financial statements in conformity with GAAP in the United States of America requires management to make estimates and assumptions which affect the reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities as of and for the date of the financial statements and the amount of revenue and costs and expenses during the reporting periods. Actual results could differ from those estimates and those differences may be material. These estimates include, among other things, the determination of the allowance for loan losses on finance receivables, estimated recovery value on leased vehicles, goodwill, income taxes and the expected cash flows on the pre-acquisition consumer finance receivables.
Net Presentation of Cash Flows Related to Commercial Finance Receivables
Our commercial finance receivables are primarily comprised of floorplan financing to dealers.  The floorplan financing loans are repayable by the dealer within two to ten days after the dealer sells the vehicle subject to the financing. In our experience, these loans are typically repaidthree months ended March 31, 2014, we identified items not properly classified in less than 90 days of when the credit is extended. Furthermore, we have the unilateral ability to call the loans and receive payment within 30 days of when the credit is extended. Therefore, the presentation of the cash flows related to commercial finance receivables are reflected on the condensed consolidated statements of cash flows. The adjustments to previously reported amounts within the condensed consolidated statement of cash flows, as "Netwhich had no impact on cash and cash equivalents at March 31, 2014, had a net effect of decreasing net cash provided by operating activities by $79 million and decreasing net cash used in investing activities by $79 million, and were principally related to net funding (collections) of commercial finance receivables."
Segment Information
We have revolving debt agreementsoffer substantially similar products and services throughout many different regions, subject to financelocal regulations and market conditions. We evaluate our commercial lending activities.business in two operating segments: North America (the "North America Segment") and international (the "International Segment"). The revolving period of these agreements ranges from 12 to 18 months; however,North America Segment includes our operations in the terms of these financing agreements require that a borrowing base of eligible floorplan receivables, within certain concentration limits, must be maintainedU.S. and Canada. The International Segment includes our operations in sufficient amounts to support advances.  When a dealer repays a floorplan receivable to us, the amount advanced against such receivables must be repaid by us or else the equivalent amount in new receivables must be added to the borrowing base. Despite the revolving term exceeding 90 days, the actual term

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all other countries. For additional financial information regarding our business segments, see Table of ContentsNote 13

for repayment of advances under these agreements is when we receive repayment from the dealers, which is typically within 90 days of when the credit is extended. Therefore, for 2014, the cash flows related to these revolving debt agreements are reflected on the condensed consolidated statements of cash flows as “Net increase in debt (original maturities less than three months).” - "Segment Reporting."
Related Party Transactions
We are the wholly-owned captive finance subsidiary of our parent, General Motors Company ("GM"). We offer loan and lease finance products through GM-franchised dealers to consumers purchasing new and certain used vehicles manufactured by GM and make commercial loans directly to GM-franchised dealers.dealers and their affiliates. Under subvention programs, GM makes cash payments to us for offering incentivized rates and structures on consumer loan and lease finance products. In addition, GM makes payments to us to cover certain interest payments on commercial loans. At June 30, 2014March 31, 2015 and December 31, 20132014, we had related party receivables from GM in the amount of $185437 million and $129384 million under these programs., primarily related to subvention.
In addition,At March 31, 2015 and December 31, 2014 we had $90164 million and $62176 million due at June 30, 2014 and December 31, 2013in commercial loans outstanding to dealers that are consolidated by GM, in connection with our commercial lending program. Our international operations also provideGM. Prior to January 1, 2015, we provided financing to certain GM subsidiaries through factoring and other wholesale financing arrangements. At June 30, 2014 and December 31, 2013, $2282014, $289 million and $588 million were was outstanding under such arrangements, and arewas included in commercial finance receivables. No amounts were outstanding at March 31, 2015. At June 30, 2014March 31, 2015 and December 31, 2013,2014, we also had $432$450 million and $368$433 million of related party payables due to GM, primarily for commercial finance receivables originated but not yet funded. These payables typically settle within 30 days.
We have a tax sharing agreement with GM for our USU.S. operations. Under our tax sharing arrangement with GM, payments related to our U.S. operations and we are obligated to pay GM for our share of the consolidated U.S. federal and certain state tax liabilities for taxable income recognized by us in any period beginning on or after October 1, 2010. Payments for the tax years 20102012 through 2014 arewere deferred for four years from their original due date, and the total deferral amount is to not exceed $1.0 billion. The tax sharing agreement may be modified at any time by GM in its sole discretion. As of June 30, 2014date. At March 31, 2015 and December 31, 2013,2014, we have recorded related party taxes payable to GM in the amount of $891 million and $643$636 million.
We have a $600 millionSupport Agreement with GM (the “Support Agreement”), which provides that, if our earning assets leverage at the end of any calendar quarter is higher than thresholds set in the Support Agreement, we may require GM to provide funding sufficient to bring our earning assets leverage to within the appropriate threshold. In determining our earning assets leverage (net earning assets divided by adjusted equity) under the Support Agreement, net earning assets means our finance receivables, net, plus leased

4


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. At March 31, 2015, our earning assets leverage ratio was 6.9, which is below the applicable ratio of 8.0.
Additionally, the Support Agreement provides that GM will own all of our outstanding voting shares as long as we have any unsecured debt securities outstanding and that GM will use its commercially reasonable efforts to ensure that we will continue to be designated as a subsidiary borrower on $4.0 billion under GM’s corporate revolving credit facilities. GM also agreed to certain provisions intended to ensure that we maintain adequate access to liquidity. Pursuant to these provisions, GM provided us with a $1.0 billion unsecured intercompany revolving credit facility with GM ("GM Related Party(the “Junior Subordinated Revolving Credit Facility"Facility”). There were no advances outstanding under the GM Related PartyJunior Subordinated Revolving Credit Facility at June 30, 2014March 31, 2015 or December 31, 2013.
Recently Adopted Accounting Principles
On January 1, 2014 we adopted Accounting Standards Update (ASU) ASU 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists” which was issued to eliminate diversity in practice. This ASU requires that companies net their unrecognized tax benefits against all same-jurisdiction net operating losses or tax credit carryforwards that would be used to settle the position with a tax authority. The adoption of this ASU did not have a material effect on our consolidated financial statements.2014.
Accounting Standards Not Yet Adopted
In May 2014 the Financial Accounting Standards Board issued ASU 2014-09, “Revenue Recognition - Revenue from Contracts with Customers” (ASU 2014-09)("ASU 2014-09") that requires companies to recognize revenue when a customer obtains control rather than when companies have transferred substantially all risks and rewards of a good or service. This update is effective for annual reporting periods beginning on or after December 15, 2016 and interim periods therein and requires expanded disclosures. We are currently assessing the impact that the adoption of ASU 2014-09 will have on our condensed consolidated financial statements.

In April 2015 the Financial Accounting Standards Board issued ASU 2015-03, “Interest - Imputation of Interest” ("ASU 2015-03") that requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. This update is effective for annual reporting periods beginning on or after December 15, 2015 and interim periods within fiscal years beginning after December 15, 2016. We are currently assessing the impact that the adoption of ASU 2015-03 will have on our consolidated financial statements.
Note 2.    Acquisition of Ally Financial International Operations
In November 2012, we entered into a definitive agreement with Ally Financial to acquire the outstanding equity interests in the top-level holding companies of its automotive finance and financial services operations in Europe and Latin America and a separate agreement to acquire Ally Financial's non-controlling equity interest in SAIC-GMAC Automotive Finance Company Limited ("SAIC-GMAC"), which conducts auto finance operations in China.
During 2013, we completed the acquisition of Ally Financial's European and Latin American auto finance and financial services operations. The aggregate consideration for these acquisitions was $3.3 billion. In addition, we repaid debt of $1.4 billion that was assumed as part of the acquisitions. We recorded the fair value of the assets acquired and liabilities assumed on the acquisition date.
On January 2, 2015, we completed the acquisition of Ally Financial's 40% equity interest in SAIC-GMAC. The aggregate purchase price was $1.0 billion. Also on January 2, 2015, we sold a 5% equity interest in SAIC-GMAC to Shanghai Automotive Group Finance Company Ltd. (“SAIC FC”), a current shareholder of SAIC-GMAC, for proceeds of $125 million. As a result of these transactions, we own a 35% equity interest in SAIC-GMAC. We account for our ownership interest in SAIC-GMAC using the equity method of accounting. The difference between the carrying amount in our investment and our share of the underlying net assets of SAIC-GMAC was $371 million, which was primarily related to goodwill. We determined the acquisition date fair values of the identifiable assets acquired and liabilities assumed in accordance with ASC 805 Business Combinations.
Income resulting from the equity investment in SAIC-GMAC is included in our results beginning January 2, 2015. Equity income from SAIC-GMAC recorded in the three months ended March 31, 2015 was $28 million. If the acquisition had occurred on January 1, 2014, our net income for the three months ended March 31, 2014 would have been $174 million.

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Note 2.3.Finance Receivables
Our pre-acquisition and post-acquisition consumer finance portfolios are now reported on a combined basis, due to the diminished size of the pre-acquisition portfolio, which was $344 million at March 31, 2015.
The finance receivables portfolio consists of the following (in millions): 
 June 30, 2014 December 31, 2013 March 31, 2015 December 31, 2014
 
North
America
 International Total 
North
America
 International Total 
North
America
 International Total 
North
America
 International Total
Consumer                        
Pre-acquisition consumer finance receivables - outstanding balance $584
 $255
 $839
 $931
 $363
 $1,294
Pre-acquisition consumer finance receivables - carrying value $510
 $245
 $755
 $826
 $348
 $1,174
Post-acquisition consumer finance receivables, collectively evaluated for impairment, net of fees(a)
 10,402
 12,897
 23,299
 9,795
 11,394
 21,189
Post-acquisition consumer finance receivables, individually evaluated for impairment, net of fees 992
 
 992
 767
 
 767
 11,904
 13,142
 25,046
 11,388
 11,742
 23,130
Consumer finance receivables, collectively evaluated for impairment, net of fees(a)
 $13,000
 $11,297
 $24,297
 $12,127
 $12,262
 $24,389
Consumer finance receivables, individually evaluated for impairment, net of fees 1,294
 
 1,294
 1,234
 
 1,234
Total consumer finance receivables(b)
 14,294
 11,297
 25,591
 13,361
 12,262
 25,623
Less: allowance for loan losses - collective (392) (60) (452) (365) (29) (394) (441) (87) (528) (405) (78) (483)
Less: allowance for loan losses - specific (123) 
 (123) (103) 
 (103) (164) 
 (164) (172) 
 (172)
Total consumer finance receivables, net 11,389
 13,082
 24,471
 10,920
 11,713
 22,633
 13,689
 11,210
 24,899
 12,784
 12,184
 24,968
Commercial   

                    
Commercial finance receivables, collectively evaluated for impairment, net of fees 2,373
 4,653
 7,026
 1,975
 4,627
 6,602
 3,260
 4,278
 7,538
 3,180
 4,803
 7,983
Commercial finance receivables, individually evaluated for impairment, net of fees 
 88
 88
 
 98
 98
 
 69
 69
 
 89
 89
 2,373
 4,741
 7,114
 1,975
 4,725
 6,700
Total commercial finance receivables 3,260
 4,347
 7,607
 3,180
 4,892
 8,072
Less: allowance for loan losses - collective (17) (18) (35) (17) (27) (44) (20) (11) (31) (21) (14) (35)
Less: allowance for loan losses - specific 
 (5) (5) 
 (7) (7) 
 (5) (5) 
 (5) (5)
Total commercial finance receivables, net 2,356
 4,718
 7,074
 1,958
 4,691
 6,649
 3,240
 4,331
 7,571
 3,159
 4,873
 8,032
Total finance receivables, net $13,745
 $17,800
 $31,545
 $12,878
 $16,404
 $29,282
 $16,929
 $15,541
 $32,470
 $15,943
 $17,057
 $33,000
________________
(a) Amounts reported for International include $1.1 billion and $1.0 billion of direct-financing leases at June 30, 2014March 31, 2015 and December 31, 2013.2014.
Consumer Finance Receivables(b) Net of unamortized premiums and discounts, and deferred fees and costs of $191 million and $245 million at March 31, 2015 and December 31, 2014.
Our consumer finance receivables are reported in two portfolios: pre-acquisition and post-acquisition. The pre-acquisition consumer finance receivables portfolio consists of (i) finance receivables originated in North America prior to our merger with GM, all of which were considered to have had deterioration in credit quality, and (ii) finance receivables that were considered to have had deterioration in credit quality that were acquired with the international operations. The pre-acquisition consumer portfolio will decrease over time with the amortization of the acquired receivables.
The post-acquisition consumer finance receivables portfolio consists of (i) finance receivables originated in North America since our merger with GM, (ii) finance receivables originated in the international operations since the applicable acquisition dates and (iii) finance receivables that were considered to have had no deterioration in credit quality that were acquired with the international operations. The post-acquisition consumer portfolio will grow over time as we originate new receivables.

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Pre-acquisition Consumer Finance Receivables
Following is a summary of activity in our pre-acquisition consumer finance receivables portfolio (in millions): 
  Six Months Ended June 30,
  2014 2013
  North America International Total North America International Total
Pre-acquisition consumer finance receivables - outstanding balance, beginning of period $931
 $363
 $1,294
 $2,162
 $
 $2,162
Pre-acquisition consumer finance receivables - carrying value, beginning of period $826
 $348
 $1,174
 $1,958
 $
 $1,958
International operations acquisition 
 
 
 
 1,569
 1,569
Principal collections and other (308) (126) (434) (641) (264) (905)
Change in carrying value adjustment (8) 27
 19
 (38) 8
 (30)
Foreign currency translation 
 (4) (4) 
 (41) (41)
Balance at end of period $510
 $245
 $755
 $1,279
 $1,272
 $2,551
We review our pre-acquisition portfolio for differences between contractual cash flows and the cash flows expected to be collected to determine if the difference is attributable, at least in part, to credit quality. During the six months ended June 30, 2014 and 2013, as a result of improvements in the credit performance of the North America pre-acquisition portfolio, expected cash flows increased by $33 million and $54 million. We transferred the amount of excess cash flows from the non-accretable difference to accretable yield. This excess will be amortized through finance charge income over the remaining life of the portfolio. As a result of the decrease in the pre-acquisition portfolio through amortization, the amount of excess cash flows transferred to accretable yield and subsequently amortized through finance charge income has decreased.
A summary of the activity in the accretable yield on the pre-acquisition consumer finance receivables portfolios is as follows (in millions):
  Three Months Ended June 30,
  2014 2013
  North America International Total North America International Total
Balance at beginning of period $174
 $55
 $229
 $371
 $
 $371
International operations acquisition 
 
 
 
 249
 249
Accretion of accretable yield (41) (13) (54) (79) (53) (132)
Transfer from non-accretable difference 
 
 
 6
 
 6
Foreign currency translation 
 2
 2
 
 (12) (12)
Balance at end of period $133
 $44
 $177
 $298
 $184
 $482

  Six Months Ended June 30,
  2014 2013
  North America International Total North America International Total
Balance at beginning of period $181
 $74
 $255
 $404
 $
 $404
International operations acquisition 
 
 
 
 249
 249
Accretion of accretable yield (81) (30) (111) (160) (53) (213)
Transfer from non-accretable difference 33
 
 33
 54
 
 54
Foreign currency translation 
 
 
 
 (12) (12)
Balance at end of period $133
 $44
 $177
 $298
 $184
 $482

Post-acquisition Consumer Finance Receivables
  Three Months Ended March 31,
  2015 2014
  North America International Total North America International Total
Consumer finance receivables, net of fees - beginning of period $13,361
 $12,262
 $25,623
 $11,388
 $11,742
 $23,130
Loans purchased 2,273
 1,805
 4,078
 1,364
 2,048
 3,412
Principal collections and other (1,134) (1,459) (2,593) (1,003) (1,464) (2,467)
Charge-offs (200) (34) (234) (192) (32) (224)
Foreign currency translation (6) (1,277) (1,283) (1) 174
 173
Balance at end of period $14,294
 $11,297
 $25,591
 $11,556
 $12,468
 $24,024

76


We generally purchase consumer finance contracts from auto dealers without recourse, and accordingly, the dealer has no liability to us if the consumer defaults on the contract. Depending upon the contract structure and consumer credit attributes, we may pay dealers a participation fee or we may charge dealers a non-refundable acquisition fee when purchasing individual finance contracts. We also have subvention programs with GM and other new vehicle manufacturers, under which the manufacturers provide us cash payments in order for us to offer lower interest rates on consumer finance contracts we purchase. We record the amortization of participation fees and subvention and accretion of acquisition fees to finance charge income using the effective interest method.
Following is a summary of activity in our post-acquisition consumer finance receivables portfolio (in millions):
  Six Months Ended June 30,
  2014 2013
  North America International Total North America International Total
Post-acquisition consumer finance receivables, net of fees - beginning of period $10,562
 $11,394
 $21,956
 $8,831
 $
 $8,831
International operations acquisition 
 
 
 
 5,422
 5,422
Loans purchased 2,917
 4,128
 7,045
 2,710
 1,117
 3,827
Charge-offs (349) (66) (415) (248) 
 (248)
Principal collections and other (1,736) (2,888) (4,624) (1,346) (594) (1,940)
Foreign currency translation 
 329
 329
 
 (12) (12)
Balance at end of period $11,394
 $12,897
 $24,291
 $9,947
 $5,933
 $15,880
A summary of the activity in the allowance for consumer loan losses is as follows (in millions):
  Three Months Ended June 30,
  2014 2013
  North America International Total North America International Total
Balance at beginning of period $491
 $46
 $537
 $382
 $
 $382
Provision for loan losses 89
 33
 122
 80
 8
 88
Charge-offs (157) (34) (191) (116) 
 (116)
Recoveries 92
 15
 107
 69
 
 69
Balance at end of period $515
 $60
 $575
 $415
 $8
 $423


 Six Months Ended June 30, Three Months Ended March 31,
 2014 2013 2015 2014
 North America International Total North America International Total North America International Total North America International Total
Balance at beginning of period $468
 $29
 $497
 $345
 $
 $345
 $577
 $78
 $655
 $468
 $29
 $497
Provision for loan losses 193
 66
 259
 169
 8
 177
 118
 39
 157
 104
 33
 137
Charge-offs (349) (66) (415) (248) 
 (248) (200) (34) (234) (192) (32) (224)
Recoveries 203
 31
 234
 149
 
 149
 110
 12
 122
 111
 16
 127
Foreign currency translation 
 (8) (8) 
 
 
Balance at end of period $515
 $60
 $575
 $415
 $8
 $423
 $605
 $87
 $692
 $491
 $46
 $537

8


Consumer Credit Quality
We use proprietary scoring systems in the underwriting process that measure the credit quality of the receivables using several factors, such as credit bureau information, consumer credit risk scores (e.g. FICO score), and contract characteristics. In addition to our proprietary scoring system, we consider other individual consumer factors, such as employment history, financial stability, and capacity to pay. At the time of loan origination, substantially all of our international consumers have the equivalent of prime credit scores. In the North America Segment, however,while we historically focused on consumers with lower than prime credit scores, we are seeking to expand our consumer finance receivables are predominantly sub-prime.prime lending programs. A summary of the credit risk profile by FICO score band, determined at origination, of the consumer finance receivables in the North America Segment is as follows (dollars in millions):
  June 30, 2014 December 31, 2013
  Amount Percent Amount Percent
FICO Score less than 540 $3,723
 31.1% $3,511
 30.6%
FICO Score 540 to 599 5,707
 47.6
 5,435
 47.3
FICO Score 600 to 659 2,293
 19.1
 2,277
 19.8
FICO Score 660 and greater 255
 2.2
 270
 2.3
Balance at end of period(a)
 $11,978
 100.0% $11,493
 100.0%
  March 31, 2015 December 31, 2014
  Amount Percent Amount Percent
Prime - FICO Score 680 and greater $1,161
 8.1% $596
 4.4%
Near Prime - FICO Score 620 to 679 2,138
 15.0
 1,691
 12.7
Sub-prime - FICO Score less than 620 10,995
 76.9
 11,074
 82.9
Balance at end of period $14,294
 100.0% $13,361
 100.0%
_________________ 
(a)
Balance at the end of the period is the sum of pre-acquisition consumer finance receivables-outstanding balance and post-acquisition consumer finance receivables, net of fees for North America Segment.
In addition we review the credit quality of all of our consumer finance receivables based on consumer payment activity. A consumer account is considered delinquent if a substantial portion of a scheduled payment has not been received by the date such payment was contractually due. Consumer 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 consumer defaults on the payment terms of the contract. The following is a summary of the contractual amounts of delinquent consumer finance receivables, which is not significantly different than recorded investment, that are (i) more than 30 days delinquent, but not yet in repossession and (ii) in repossession, but not yet charged off (dollars in millions): 
 June 30, Three Months Ended March 31,
 2014 2013 2015 2014
 North America International Total Percent of Contractual Amount Due North America International Total Percent of Contractual Amount Due North America International Total Percent of Contractual Amount Due North America International Total Percent of Contractual Amount Due
31 - 60 days $756
 $130
 $886
 3.5% $601
 $44
 $645
 3.4% $767
 $113
 $880
 3.4% $579
 $138
 $717
 3.1%
Greater than 60 days 255
 133
 388
 1.6
 208
 45
 253
 1.4
 259
 98
 357
 1.4
 210
 126
 336
 1.4
 1,011
 263
 1,274
 5.1
 809
 89
 898
 4.8
 1,026
 211
 1,237
 4.8
 789
 264
 1,053
 4.5
In repossession 35
 5
 40
 0.1
 31
 4
 35
 0.2
 34
 8
 42
 0.2
 33
 5
 38
 0.1
 $1,046
 $268
 $1,314
 5.2% $840
 $93
 $933
 5.0% $1,060
 $219
 $1,279
 5.0% $822
 $269
 $1,091
 4.6%
The accrual of finance charge income has been suspended on $626$581 million and $642682 million of consumer finance receivables (based on contractual amount due) as ofat June 30, 2014March 31, 2015 and December 31, 2013.2014.

7


Impaired Consumer Finance Receivables - TDRs
Consumer finance receivables in the post-acquisition portfolio that become classified as troubled debt restructurings ("TDRs") are separately assessed for impairment. A specific allowance is estimated based on the present value of the expected future cash flows of the receivable discounted at the loan's original effective interest rate. The financial effects of the accounts that become classified as TDRs result in an impairment charge recorded as part of the provision for loan losses. Accounts that become classified as TDRs because of a payment deferral still accrue interest at the contractual rate and an additional fee is collected (where permitted) at each time of deferral and recorded as a reduction of accrued interest. No interest or fees are forgiven on a payment deferral to a customer andcustomer; therefore, there are no additional financial effects of deferred loans becoming classified as TDRs. Accounts in Chapter 13 bankruptcy would have already been placed on non-accrual; therefore, there are no additional financial effects from these loans becoming classified as TDRs. As of June 30, 2014, the outstanding balance of consumer finance receivables in the International Segment determined to be TDRs was insignificant; therefore, the following information is presented with regard to the TDRs in the North America Segment only.

9


The outstanding recorded investment for consumer finance receivables that are considered to be TDRs and the related allowance is presented below (in millions):
  June 30, 2014 December 31, 2013
Outstanding recorded investment $992
 $767
Less: allowance for loan losses (123) (103)
Outstanding recorded investment, net of allowance $869
 $664
Unpaid principal balance $1,009
 $779
Finance charge income from loans classified as TDRs is accounted for in the same manner as other accruing loans. Cash collections on these loans are allocated according to the same payment hierarchy methodology applied to loans that are not classified as TDRs.
At March 31, 2015 and December 31, 2014, the outstanding balance of consumer finance receivables in the International Segment determined to be TDRs was insignificant; therefore, the following information is presented with regard to the TDRs in the North America Segment only (in millions):
  March 31, 2015 December 31, 2014
Outstanding recorded investment $1,294
 $1,234
Less: allowance for loan losses (164) (172)
Outstanding recorded investment, net of allowance $1,130
 $1,062
Unpaid principal balance $1,319
 $1,255
Additional information about loans classified as TDRs is presented below (in millions)millions, except for number of loans):
 Three Months Ended June 30, Six Months Ended June 30, Three Months Ended March 31,
 2014 2013 2014 2013 2015 2014
Average recorded investment $928
 $403
 $875
 $345
 $1,264
 $816
Finance charge income recognized $30
 $15
 $59
 $25
 $40
 $29
Number of loans classified as TDRs during the period 11,752
 10,127
Recorded investment of loans classified as TDRs during the period $199
 $183
The following table provides information on consumer loans at the time they became classified as TDRs (dollars in millions):
 Three Months Ended June 30, Six Months Ended June 30,
 2014 2013 2014 2013
 Number of Accounts Amount Number of Accounts Amount Number of Accounts Amount Number of Accounts Amount
Recorded investment12,135
 $213
 8,966
 $164
 22,247
 $388
 15,948
 $290
A redefault is when an account meets the requirements for evaluation under our charge-off policy (See Note 1 - "Summary of Significant Accounting Policies" in our Form 10-K for additional information). The unpaid principal balance, net of recoveries, of loans that redefaulted during the reporting period and were within 12 months or less of being modified as a TDR were $11 million and $5 millionwas insignificant for the three months ended June 30, 2014March 31, 2015 and 2013, and $20 million and $10 million for the six months ended June 30, 2014 and 2013.2014.
Commercial Finance Receivables
Following is a summary of activity in our commercial finance receivables portfolio (in millions): 
 Six Months Ended June 30, Three Months Ended March 31,
 2014 2013 2015 2014
 North America International Total North America International Total North America International Total North America International Total
Commercial finance receivables, net of fees - beginning of period $1,975
 $4,725
 $6,700
 $560
 $
 $560
 $3,180
 $4,892
 $8,072
 $1,975
 $4,725
 $6,700
International operations acquisition 
 
 
 
 3,990
 3,990
Net funding (collections) of commercial finance receivables 397
 (56) 341
 609
 (175) 434
 110
 (150) (40) 223
 154
 377
Charge-offs 
 
 
 
 
 
 
 
 
 
 
 
Foreign currency translation 1
 72
 73
 
 (23) (23) (30) (395) (425) (8) 39
 31
Balance at end of period $2,373
 $4,741
 $7,114
 $1,169
 $3,792
 $4,961
 $3,260
 $4,347
 $7,607
 $2,190
 $4,918
 $7,108





108


A summary of the activity in the allowance for commercial loan losses is as follows (in millions):
  Three Months Ended June 30,
  2014 2013
  North America International Total North America International Total
Balance at beginning of period $16
 $33
 $49
 $11
 $
 $11
Provision for loan losses 1
 (10) (9) 1
 11
 12
Charge-offs 
 
 
 
 
 
Recoveries 
 
 
 
 1
 1
Balance at end of period $17
 $23
 $40
 $12
 $12
 $24


  Six Months Ended June 30,
  2014 2013
  North America International Total North America International Total
Balance at beginning of period $17
 $34
 $51
 $6
 $
 $6
Provision for loan losses 
 (11) (11) 6
 11
 17
Charge-offs 
 
 
 
 
 
Recoveries 
 
 
 
 1
 1
Balance at end of period $17
 $23
 $40
 $12
 $12
 $24

Commercial Credit Quality
We extend wholesale credit to dealers primarily in the form of approved lines of credit to purchase new vehicles as well as used vehicles. Each commercial lending request is evaluated, taking into consideration the borrower's financial condition and the underlying collateral for the loan.
We use proprietary models to assign each dealer a risk rating. These models use historical performance data to identify key factors about a dealer that we consider significant in predicting a dealer's ability to meet its financial obligations. We also consider numerous other financial and qualitative factors including, but not limited to, capitalization and leverage, liquidity and cash flow, profitability and credit history. 
We regularly review our models to confirm the continued business significance and statistical predictability of the factors and update the models to incorporate new factors or other information that improves statistical predictability. In addition, we verify the existence of the assets collateralizing the receivables by physical audits of vehicle inventories, which are performed with increased frequency for higher risk (i.e., Groups III, IV, V and VI) dealers. We perform a credit review of each dealer at least annually and adjust the dealer's risk rating, if necessary. The credit lines for Group VI dealers are typically suspended and no further funding is extended to these dealers. 
Performance of our commercial finance receivables is evaluated based on our internal dealer risk rating analysis, as payment for wholesale receivables is generally not required until the dealer has sold the vehicle inventory. Wholesale and dealer loanAll receivables withfrom the same dealer customer share the same risk rating.
A summary of the credit risk profile by dealer grouping of the commercial finance receivables is as follows (in millions): 
    June 30, 2014 December 31, 2013
Group I-Dealers with superior financial metrics $754
 $598
Group II-Dealers with strong financial metrics 1,633
 1,588
Group III --Dealers with fair financial metrics 2,365
 2,174
Group IV --Dealers with weak financial metrics 1,539
 1,622
Group V-Dealers warranting special mention due to potential weaknesses 615
 488
Group VI --Dealers with loans classified as substandard, doubtful or impaired 208
 230
Balance at end of period $7,114
 $6,700

11


The credit lines for Group VI dealers are suspended and no further funding is extended to these dealers. 
    March 31, 2015 December 31, 2014
Group I-Dealers with superior financial metrics $954
 $1,062
Group II-Dealers with strong financial metrics 2,149
 2,090
Group III-Dealers with fair financial metrics 2,690
 2,856
Group IV-Dealers with weak financial metrics 1,108
 1,250
Group V-Dealers warranting special mention due to potential weaknesses 515
 559
Group VI-Dealers with loans classified as substandard, doubtful or impaired 191
 255
Balance at end of period $7,607
 $8,072
At June 30, 2014March 31, 2015 and December 31, 2013, 99.8%2014 substantially all of our commercial finance receivables were current with respect to payment status.
Impaired Commercial Finance Receivables
We consider a loan impaired when, based on current informationstatus and events, it is probable that we will be unable to collect all amounts due according tonone were classified as TDRs. Activity in the contractual terms of the loan agreement. The amount of impairment is based on expected proceeds, including the estimated amount of future cash flows and/or the fair value of underlying collateral, compared to the recorded investment of the loan. A specific allowance for commercial loan losses was insignificant for the three months ended March 31, 2015 and 2014.
Note 4.Leased Vehicles
Our operating lease program is establishedoffered primarily in the amount of any measured impairment.North America Segment. The following information regarding our leased vehicles is presented on a consolidated basis (in millions):
Commercial finance receivables classified as TDRs are assessed for impairment and included in our allowance for credit losses based on the present value of the expected future cash flows of the receivable discounted at the loan's original effective interest rate. For receivables where foreclosure is probable, the fair value of the collateral is used to estimate the specific impairment.
  March 31, 2015 December 31, 2014
Leased vehicles $12,231
 $9,747
Manufacturer incentives (1,880) (1,479)
  10,351
 8,268
Less: accumulated depreciation (1,412) (1,208)
Leased vehicles, net $8,939
 $7,060
At June 30, 2014March 31, 2015 and December 31, 2013, there were no outstanding commercial finance receivables classified2014, our Canadian subsidiary was servicing $74 million and $110 million of leased vehicles for a third party.
The following table summarizes minimum rental payments due to us as TDRs.lessor under operating leases (in millions):
  Years Ending December 31,
  2015 2016 2017 2018 2019
Minimum rental payments under operating leases $1,160
 $1,365
 $923
 $214
 $13

9

Table of Contents

Note 3.5.    Restricted Cash
The following table summarizes the components of restricted cash (in millions):
June 30, 2014 December 31, 2013March 31, 2015 December 31, 2014
North America International Total North America International Total
Securitization notes payable$1,014
 $390
 $1,404
 $890
 $208
 $1,098
Revolving credit facilities79
 258
 337
 62
 415
 477
$327
 $326
Securitization notes payable - consumer1,440
 1,330
Securitization notes payable - commercial59
 65
Other50
 414
 464
 26
 357
 383
23
 350
Total restricted cash$1,143
 $1,062
 $2,205
 $978
 $980
 $1,958
$1,849
 $2,071
Restricted cash for securitization notes payable and revolving credit facilities is comprised of funds deposited as collateral required in restricted cash accounts as collateral required to support securitization transactions or funds deposited in restricted cash accounts to provide additional collateral for borrowings under revolving credit facilities. Additionally, these funds include monthly collections from borrowers that have not yet been used for repayment of debt.
In the North America Segment,As of December 31, 2014, other restricted cash other is comprised of cash deposited to support derivative transactions. In the International Segment, restricted cash other iswas primarily comprised of depositsinterest-bearing cash in Brazil held in escrow pending resolution of tax and civil litigation. As of March 31, 2015, these amounts were reclassified to deposits and are included in other assets on the condensed consolidated balance sheet.
Note 4.6.Leased VehiclesEquity in Net Assets of Non-consolidated Affiliates
OurNon-consolidated affiliates are entities in which an equity ownership interest is maintained and for which the equity method of accounting is used due to the ability to exert significant influence over decisions relating to their operating lease program is offered primarilyand financial affairs.
In January 2015, we completed the acquisition of Ally Financial's equity interest in the North America Segment. AsSAIC-GMAC. See Note 2 - "Acquisition of June 30, 2014 and December 31, 2013, the amount of leased vehicles accountedAlly Financial International Operations" for as operating leases in the International Segment is insignificant; therefore, the following information regarding our leased vehicles is presented on a consolidated basis.
Following is a summary of our leased vehicles (in millions):
  June 30, 2014 December 31, 2013
Leased vehicles $6,528
 $4,684
Manufacturer incentives (936) (659)
  5,592
 4,025
Less: accumulated depreciation (844) (642)
Leased vehicles, net $4,748
 $3,383

12


A summary of the changes in our leased vehicles is as follows (in millions):
  Six Months Ended June 30,
  2014 2013
Balance at beginning of period $4,025
 $1,976
International operations acquisition 
 9
Leased vehicles purchased 2,322
 1,454
Leased vehicles returned - end of term (469) (106)
Leased vehicles returned - default (24) (9)
Manufacturer incentives (274) (197)
Foreign currency translation 12
 (46)
Balance at end of period $5,592
 $3,081
As of June 30, 2014 and December 31, 2013, our Canada subsidiary was servicing $192 million and $303 million of leased vehicles for a third party.additional information.
The following table summarizes minimum rental payments dueincome of SAIC-GMAC is not consolidated into our financial statements; rather, our proportionate share of the earnings is reflected as equity income. At March 31, 2015, we had undistributed earnings of $28 million related to us as lessor under operating leases (in millions):
  Years Ending December 31,  
  2014 2015 2016 2017 2018 2019
Minimum rental payments under operating leases $702
 $898
 $662
 $262
 $43
 $2
SAIC-GMAC.
Note 5.7.Debt
Debt consists of the following (in millions): 
  June 30, 2014 December 31, 2013
  North America International Total North America International Total
Secured           

Revolving credit facilities $2,703
 $5,888
 $8,591
 $1,678
 $7,322
 $9,000
Securitization notes payable 11,847
 4,568
 16,415
 10,801
 2,272
 13,073
Total secured $14,550
 $10,456
 $25,006
 $12,479
 $9,594
 $22,073
             
Unsecured           
Senior notes $4,376
 $
 $4,376
 $4,000
 $
 $4,000
Credit facilities 
 2,430
 2,430
 
 2,370
 2,370
Other unsecured debt 
 790
 790
 
 603
 603
Total unsecured $4,376
 $3,220
 $7,596
 $4,000
 $2,973
 $6,973
  March 31, 2015 December 31, 2014
  North America International Total North America International Total
Secured Debt           

Revolving credit facilities $1,781
 $4,922
 $6,703
 $1,701
 $5,327
 $7,028
Securitization notes payable - consumer 13,710
 2,323
 16,033
 13,253
 2,868
 16,121
Securitization notes payable - commercial 500
 1,457
 1,957
 500
 1,565
 2,065
Total secured debt $15,991
 $8,702
 $24,693
 $15,454
 $9,760
 $25,214
             
Unsecured Debt           
Senior notes $10,060
 $1,234
 $11,294
 $7,846
 $604
 $8,450
Credit facilities 
 2,459
 2,459
 
 2,974
 2,974
Other unsecured debt 
 679
 679
 
 793
 793
Total unsecured debt $10,060
 $4,372
 $14,432
 $7,846
 $4,371
 $12,217
Secured Debt
Secured debt consists of revolving credit facilities and securitization notes payable. Most of the secured debt was issued by variable interest entities, as further discussed in Note 6 - "Variable Interest Entities." This debtVIEs and is repayable only from proceeds related to the underlying pledged finance receivables and lease related assets.
leases. Refer to Note 8 - "Variable Interest Entities" for additional information relating to our involvement with VIEs. During the sixthree months ended June 30, 2014,March 31, 2015, we issued securitization notes payable of $2.0 billion through securitization transactions, and we entered into $445 million in new revolving credit facilities and issued $5.0 billion in securitization notes payable.
We are required to hold funds in restricted cash accounts to provide additional collateral for borrowings under certain of our secured credit facilities. Additionally, certain of our securedor renewed credit facilities contain various covenants requiring minimum financial ratios, asset quality and portfolio performance ratios (portfoliowith a total additional net loss and delinquency ratios and pool level cumulative net loss ratios) as well as limits on deferment levels. Failure to meet anyborrowing capacity of these covenants could result in an event of default under these agreements. If an event of default occurs under these agreements, the lenders could elect to declare all amounts outstanding under these agreements to be immediately due and payable, enforce their interests against collateral pledged under these agreements,$770 million.

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restrict our ability to obtain additional borrowings under these agreements and/or remove us as servicer. As of June 30, 2014, we were in compliance with all covenants related to our credit facilities.
Unsecured Debt
Unsecured debt consists primarily ofIn January 2015, our top-tier holding company issued $2.25 billion in senior notes we have issued in the North America Segment, as well as credit facilities and other unsecured debt in the International Segment.
At June 30, 2014, we had $4.0comprised of $1.0 billion of senior3.15% notes due in January 2020, $1.0 billion of 4.0% notes due in January 2025 and $250 million in floating rate notes due in January 2020. All of these notes are guaranteed by our principal operating subsidiary, AmeriCredit Financial Services, Inc. ("AFSI").
In February 2015, a European subsidiary issued €650 million of 0.85% notes under our Euro medium term notes program. These notes are due in February 2018. All of these notes are guaranteed by our top-tier holding company that mature from 2016 through 2023 and have interest rates that range from 2.75%by AFSI.
Subsequent to 6.75%. All of these senior notes may be redeemed, at our option, in whole or in part, at any time before maturity at the redemption prices set forth in the indentures that govern the senior notes, plus accrued and unpaid interest, to the redemption date. In addition, if a change of control occurs, as that term is defined in the indentures that govern the senior notes, prior to us being rated "investment grade" by at least two of three listed rating agencies, the holders of these senior notes will have the right, subject to certain conditions, to require us to repurchase their senior notes at a purchase price equal to 101% of the aggregate principal amount of senior notes repurchased plus accrued and unpaid interest, as of the date of repurchase. These senior notes are guaranteed solely by AmeriCredit Financial Services, Inc. ("AFSI"); none of our other subsidiaries are guarantors of these senior notes. See Note 15 - "Guarantor Consolidating Financial Statements" for further discussion.
On July 10, 2014,March 31, 2015, our top-tier holding company issued an additional $1.5$2.4 billion in senior notes comprised of which $700 million are due July 2017 and $800 million are due July 2019. Interest rates on the respective tranches are 2.63% and 3.50%, payable semiannually. Terms are substantially the same as those of senior notes previously issued. We intend to use the net proceeds from this offering for general corporate purposes.
The indentures that govern the senior notes issued by our top-tier holding company provide for customary events of default, including nonpayment, failure to comply with covenants or other agreements in the indentures, if any subsidiary guarantee shall cease to be in full force and effect or any guarantor shall deny or disaffirm its obligations under its subsidiary guarantee, and certain events of bankruptcy or insolvency. If any event of default occurs and is continuing with respect to a series of senior notes, the trustee or the holders of at least 25% in principal amount of the then outstanding senior notes of such series may declare all of the senior notes of such series to be due and payable immediately. As of June 30, 2014, we were in compliance with all covenants related to our senior notes.
In May 2014 our Canadian subsidiary issued C$400$850 million of 3.25% senior2.4% notes through a private placementdue in Canada. TheApril 2018, $1.25 billion of 3.45% notes due in April 2022 and $300 million of floating rate notes are due in May 2017 with interest payable semiannually. Similar to the senior notes issued by our top-tier holding company,April 2018. All of these notes are guaranteed by AFSI. We intend to use the net proceeds from this offering for general corporate purposes.
The International Segment issuesutilizes unsecured debt through credit facilities with banks and otheras well as non-bank funding instruments.sources. During the sixthree months ended June 30, 2014,March 31, 2015, we entered into $171 million of newincreased borrowing capacity on unsecured committed credit facilities.facilities by $90 million.
Note 6.8.    Variable Interest Entities
Securitizations and credit facilities
The following table summarizes the assets and liabilities of our consolidated VIEs related to securitization and credit facilities (in millions):
  June 30, 2014 December 31, 2013
Restricted cash $1,741
 $1,523
VIE assets $27,173
 $23,584
VIE liabilities $22,371
 $19,448
  March 31, 2015 December 31, 2014
Restricted cash $1,826
 $1,721
Finance receivables, net $21,979
 $23,109
Leased vehicle assets $5,401
 $4,595
Secured debt $22,857
 $22,794
The assets of the VIEs and the restricted cash we hold 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 we provide as the servicer. We are not required and do not currently intend to provide additional financial support to these VIEs. While these subsidiaries are included in our condensed consolidated financial statements, these subsidiaries are separate legal entities and their assets are legally owned by them and not available to our creditors.
In addition, we entered into interest rate swaps and caps with certain of our special-purpose entities ("SPEs") that issue variable rate debt against fixed rate securitized assets.assets entered into interest rate swap agreements. Under the terms of these swaps, the SPEs are obligated to pay us a fixed rate of interest on certain payment dates in exchange for receiving a floating rate of interest on notional amounts equal to the outstanding balance

14


of the secured debt. This arrangement enables the SPEs to mitigate the interest rate risk inherent in issuing variable rate debt that is secured by fixed rate securitized assets, as may be required to maintain ratings on such securitizations. See Note 79 - "Derivative Financial Instruments and Hedging Activities" for further discussion.
Other VIEs
We consolidate certain operating entities that provide auto finance and financial services, which we do not control through a majority voting interest. We manage these entities and maintain a controlling financial interest in them and are exposed to the risks of ownership through contractual arrangements. The majority voting interests in these entities are indirectly wholly-owned by our parent, GM. Prior to December 2013, the voting interests in these entities were indirectly wholly-owned by us. At June 30, 2014March 31, 2015 and December 31, 2013,2014, total assets of these entities were $4.0$4.2 billion and $3.9$4.5 billion, which were comprised primarily of cash and cash equivalents and finance receivables; and total liabilities were $3.2$3.5 billion and $3.0$4.0 billion, which were comprised primarily of debt, accounts payable (primarily trade) and accrued liabilities. In the sixthree months ended June 30,March 31, 2015 and 2014 total revenue recorded by these entities was $118$41 million and $58 million, and net income was $21 million. In the three months ended June 30, 2014 total revenue recorded by these entities was $60$11 million and net income was $11$10 million. These amounts are stated prior to intercompany eliminations and include amounts related to securitization and credit facilities held by consolidated VIEs. Liabilities recognized as a result of consolidating these entities generally do not represent claims against us or our other subsidiaries and assets recognized generally are for the benefit of these entities operations and cannot be used to satisfy our or our subsidiaries obligations.




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Transfers of finance receivables to non-VIEs
Under certain debt agreements, we transfer finance receivables to third-party banks, which are not considered VIEs.  These transfers do not meet the criteria to be considered sales; therefore, the finance receivables and the related debt are included in our condensed consolidated financial statements.  Any collections received on the transferred receivables are available only for the repayment of the related debt.  As of June 30, 2014At March 31, 2015 and December 31, 2013, $2.92014, $2.0 billion and $2.8$2.5 billion in finance receivables had been transferred in secured funding arrangements to third-party banks, to which $2.7$1.8 billion and $2.7$2.4 billion in secured debt was outstanding.
Note 7.9.Derivative Financial Instruments and Hedging Activities
Derivative swap and cap agreements consist of the following (in millions): 
 June 30, 2014 December 31, 2013 Fair Value March 31, 2015 December 31, 2014
 Notional 
Fair Value(a)
 Notional 
Fair Value(a)
 Level Notional Fair Value Notional Fair Value
Assets                
Interest rate swaps $3,800
 $17
 $2,422
 $11
(a) 
3 $1,688
 $6
 $1,652
 $6
Interest rate caps 2,606
 7
 1,398
 7
(b) 
2 2,082
 5
 2,123
 6
Foreign currency swaps(b)
 1,678
 1
 1,678
 3
(b) 
2 1,488
 30
 1,594
 4
Total assets(c)
 $8,084
 $25
 $5,498
 $21
(c) 
 $5,258
 $41
 $5,369
 $16
Liabilities                
Interest rate swaps $4,858
 $34
 $4,266
 $17
(a) 
3 $5,114
 $35
 $5,627
 $39
Interest rate caps 2,312
 8
 1,206
 7
(b) 
2 1,764
 4
 1,804
 6
Foreign currency swaps(b)
 2,227
 53
 2,133
 29
(b) 
2 939
 1
 1,044
 1
Total liabilities(d)
 $9,397
 $95
 $7,605
 $53
(d) 
 $7,817
 $40
 $8,475
 $46
 _________________
(a)See Note 8 - " Fair ValuesThe fair values of Assets and Liabilities " for further discussion of fair value disclosure relatedthe interest rate swap agreements are estimated by discounting future net cash flows expected to the derivatives.be settled using current risk-adjusted rates.
(b)
The fair values of the interest rate cap agreements and foreign currency swaps relate to (i) intercompany loans denominated in foreign currencies (notional balancesswap agreements are based on the intercompany loans of €674 million, £423 million and 208kr million have been translated to USD) and (ii) a £350 million cross-currency swap for a securitization in the International Segment.
quoted market prices.
(c)Included in other assets on the condensed consolidated balance sheets.
(d)Included in other liabilities on the condensed consolidated balance sheets.
As appropriate, weWe purchase interest rate cap agreements to limit floating rate exposures on certain of our revolving secured debt. We also utilize interest rate swap agreements to convert floating rate exposures on certain of our revolving debt or on securities issued in securitization transactions to fixed rates, thereby hedging the variability in interest expense paid.

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We providedAt March 31, 2015, we had loans denominated in foreign currencies (euro, British pound and Swedish krona) to certain of our international entities for the equivalent of $1.7 billion.$576 million. We purchase foreign currency swaps to hedge against any valuation change in the loans due to changes in foreign exchange rates. In addition, our operations in the U.K. had $550 million in debt denominated in U.S. Dollars outstanding, with a cross-currency swap in place to hedge against any valuation change in the debt due to changes in exchange rates.
The following table presents information on the effect of derivative instruments on the condensed consolidated statements of income and comprehensive income (in millions):
  Three Months Ended June 30, Six Months Ended June 30,
  2014 2013 2014 2013
Non-designated hedges:        
Interest rate contracts(a)
 $1
 $(3) $(9) $(3)
Foreign currency derivatives(b)
 (26) (12) (42) (12)
  $(25) $(15) $(51) $(15)
  Three Months Ended March 31,
  2015 2014
Non-designated hedges:    
Interest rate contracts (a)
 $(6) $(10)
Foreign currency derivatives (b)
 69
 (16)
  $63
 $(26)
 _________________
(a)
Gains (losses)Losses recognized in earnings are included in interest expense.
(b)
The losses for the three and six months ended June 30, 2014 areActivity is substantially offset by translation gainsactivity (included in operating expenses) related to the foreign currency-denominated loans described above.

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Note 8.Fair Values of Assets and Liabilities
Refer to Note 10 - "Fair Values of Assets and Liabilities" to the consolidated financial statements in our Form 10-K for further discussion of valuation techniques and fair value measurement levels.
Assets and liabilities itemized below were measured at fair value on a recurring basis, using either the market approach (i), the cost approach (ii) or the income approach (iii) (in millions):
  June 30, 2014
  Fair Value Measurements Using  
  Level 1 Level 2 Level 3  
 
Quoted
Prices In
Active
Markets For
Identical
Assets
 
Significant
Other
Observable
Inputs
 
Significant
Unobservable
Inputs
 
Assets/
Liabilities
At Fair
Value
Assets        
Money market funds(i)(a)
 $2,284
 $
 $
 $2,284
Derivatives not designated as hedging instruments:        
Interest rate swaps(iii)
 
 
 17
 17
Interest rate caps(i)
 
 7
 
 7
Foreign currency swaps(i)
 
 1
 
 1
Total assets $2,284
 $8
 $17
 $2,309
Liabilities        
Derivatives not designated as hedging instruments:        
Interest rate swaps(iii)
 $
 $
 $34
 $34
Interest rate caps(i)
 
 8
 
 8
Foreign currency swaps(i)
 
 53
 
 53
Total liabilities $
 $61
 $34
 $95
_________________ 
(a)Excludes cash in banks of $1.3 billion.


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  December 31, 2013
  Fair Value Measurements Using  
  Level 1 Level 2 Level 3  
 
Quoted
Prices In
Active
Markets For
Identical
Assets
 
Significant
Other
Observable
Inputs
 
Significant
Unobservable
Inputs
 
Assets/
Liabilities
At Fair
Value
Assets        
Money market funds(i)(a)
 $1,452
 $
 $
 $1,452
Derivatives not designated as hedging instruments:        
Interest rate swaps(iii)
 
 
 11
 11
Interest rate caps(i)
 
 7
 
 7
Foreign currency swaps(i)
 
 3
 
 3
Total assets $1,452
 $10
 $11
 $1,473
Liabilities        
Derivatives not designated as hedging instruments:        
Interest rate swaps(iii)
 $
 $
 $17
 $17
Interest rate caps(i)
 
 7
 
 7
Foreign currency swaps(i)
 
 29
 
 29
Total liabilities $
 $36
 $17
 $53
_________________ 
(a)
Excludes cash in banks of $1.6 billion.
The tables below present a reconciliationactivity for interest rate swap agreements measured at fair value on a recurring basis using significant unobservable inputs (Level 3) (in millions):
  Three Months Ended June 30,
  2014 2013
  Assets Liabilities Assets Liabilities
Balance at beginning of period $8
 $(20) $
 $
Total realized and unrealized gains included in earnings 9
 (19) 2
 (4)
Purchases 
 
 7
 (18)
Settlements 
 5
 (2) 2
Balance at end of period $17
 $(34) $7
 $(20)

  Six Months Ended June 30,
  2014 2013
  Assets Liabilities Assets Liabilities
Balance at beginning of period $11
 $(17) $
 $
Total realized and unrealized gains included in earnings 6
 (26) 2
 (4)
Purchases 
 
 7
 (18)
Settlements 
 9
 (2) 2
Balance at end of period $17
 $(34) $7
 $(20)

was insignificant for the three months ended March 31, 2015 and 2014.
Note 9.10.Commitments and ContingenciesFair Values of Financial Instruments
GuaranteesFair values are based on estimates using present value or other valuation techniques in cases where quoted market prices are not available. Those techniques are significantly affected by the assumptions used, including the discount rate and the estimated timing and amount of Indebtedness
The paymentsfuture cash flows. Therefore, the estimates of principalfair value may differ substantially from amounts that ultimately may be realized or paid at settlement or maturity of the financial instruments and interest on senior notes issued by our top-tier holding company are guaranteed by AFSI. As of June 30, 2014 and December 31, 2013, the parthose differences may be material. Disclosures about fair value of these senior notes was $4.0 billion . See Note 15 - "Guarantor Consolidating Financial Statements" for further discussion.financial instruments exclude certain financial instruments and all non-financial instruments. Accordingly, the aggregate fair value amounts presented do not represent the underlying value of our company.
Estimated fair values, carrying values and various methods and assumptions used in valuing our financial instruments are set forth below (in millions):
    March 31, 2015 December 31, 2014
   Level 
Carrying
Value
 
Estimated
Fair Value
 
Carrying
Value
 
Estimated
Fair Value
Financial assets:          
Cash and cash equivalents
(a) 
1 $2,121
 $2,121
 $2,974
 $2,974
Finance receivables, net
(b) 
3 $32,470
 $32,942
 $33,000
 $33,573
Restricted cash
(a) 
1 $1,849
 $1,849
 $2,071
 $2,071
Financial liabilities:          
Secured debt          
North America
(c) 
2 $15,991
 $16,045
 $15,454
 $15,497
International
(d) 
2 $4,417
 $4,420
 $5,690
 $5,694
International
(e) 
3 $4,285
 $4,252
 $4,070
 $4,037
Unsecured debt          
North America
(f) 
2 $10,060
 $10,386
 $7,846
 $8,092
International
(g) 
2 $3,386
 $3,402
 $3,496
 $3,507
International
(e) 
3 $986
 $984
 $875
 $880
_________________
(a)Cash and cash equivalents bear interest at market rates; therefore, carrying value is considered to be a reasonable estimate of fair value.
(b)The fair value of the consumer finance receivables in the North America Segment is estimated based upon forecasted cash flows on the receivables discounted using a pre-tax weighted-average cost of capital. The fair value of the consumer finance receivables in the International Segment is estimated based on forecasted cash flows on the receivables discounted using current origination rates for similar type loans. Commercial finance receivables generally have variable interest rates and maturities of one year or less. Therefore, the carrying value is considered to be a reasonable estimate of fair value.
(c)Secured debt in the North America Segment is comprised of revolving credit facilities, publicly-issued secured debt, and privately-issued secured debt. For revolving credit facilities with variable rates of interest and terms of one year or less, carrying value is considered to be a reasonable estimate of fair value. The fair value of the publicly and privately issued secured debt is based on quoted market prices, when available. If quoted market prices are not available, the market value is estimated using quoted market prices of similar securities.
(d)The level 2 secured debt in the International Segment has terms of one year or less, or has been priced within the last six months; therefore, par value is considered to be a reasonable estimate of fair value.
(e)The fair value of level 3 secured debt and unsecured debt in the International Segment is estimated by discounting future net cash flows expected to be settled using current risk-adjusted rates.
(f)The fair value of unsecured debt in the North America Segment is based on quoted market prices in thinly-traded markets.
(g)The fair value of senior notes is based on quoted market prices in thinly-traded markets. The fair value of other unsecured debt in the International Segment has terms of one year or less; therefore, par value is considered to be a reasonable estimate of fair value.
Legal Proceedings
As aThe fair value of our consumer finance company, we are subject to various consumer claimsreceivables is based on observable and litigation seeking damagesunobservable inputs within a discounted cash flow model. Those unobservable inputs reflect assumptions regarding expected prepayments, deferrals, delinquencies, recoveries and statutory penalties, based upon, among other things, usury, disclosure inaccuracies, wrongful repossession, violationscharge-offs of bankruptcy stay provisions, certificatethe loans within the portfolio. The cash flow model produces an estimated amortization schedule of title disputes, fraud, breachthe finance

13


receivables which is the form of class action complaints by consumers and certain legal actions include claims for substantial compensatory and/or punitive damages or claims for indeterminate amounts of damages. We establish reserves for legal claims when payments associated with the claims become probable and the payments can be reasonably estimated. Given the inherent difficulty of predicting the outcome of litigation and regulatory matters, it is generally very difficult to predict what the eventual outcome will be, and when the matter will be resolved. The actual costs of resolving legal claims may be higher or lower than any amounts reservedbasis for the claims.
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. It is reasonably possible that somecalculation of the matters for which accruals have not been established could be decided unfavorably to usseries of cash flows that derive the fair value of the portfolio. For the North America Segment, the series of cash flows is calculated and could require us to make expenditures for which we estimate the aggregate risk to bediscounted using a rangeweighted-average cost of up to $98 million.
Note 10.     Income Taxes

For interim income tax reporting we estimate our annual effective tax ratecapital using unobservable debt and apply it to our year-to-date ordinary income. Tax jurisdictionsequity percentages, an unobservable cost of equity and an observable cost of debt based on companies with a projected or year-to-date loss for which a tax benefit cannot be realized are excluded fromsimilar credit rating and maturity profile. For the annualized effective tax rate. The tax effectsInternational Segment, the series of unusual or infrequently occurring items, including changescash flows is calculated and discounted using current interest rates. Macroeconomic factors could affect the credit performance of our portfolio and therefore could potentially impact the assumptions used in judgment about valuation allowances and effects of changes in tax laws or rates, are reported in the interim period in which they occur.

Our effective income tax rate was 34.0% and 34.3% for the three and six months ended June 30, 2014. Our effective income tax rate was 32.7% and 34.6% for the three and six months ended June 30, 2013.our cash flow model.
Note 11.Fair Values of Financial InstrumentsCommitments and Contingencies
Fair valuesGuarantees of Indebtedness
The payments of principal and interest on senior notes issued by our top-tier holding company, our primary Canadian operating subsidiary and a European subsidiary under our Euro medium term note program are guaranteed by our primary U.S. operating subsidiary, AFSI. At March 31, 2015 and December 31, 2014, the par value of these senior notes was $11.3 billion and $8.4 billion. See Note 16 - "Guarantor Condensed Consolidating Financial Statements" for further discussion.
Legal Proceedings
As a consumer finance company, we are subject to various consumer claims and litigation seeking damages and statutory penalties, based on estimates using present value upon, among other things, usury, disclosure inaccuracies, wrongful repossession, violations of bankruptcy stay provisions, certificate of title disputes, fraud, breach of contract and discriminatory treatment of credit applicants. Some litigation against us could take the form of class action complaints by consumers and certain legal actions include claims for substantial compensatory and/or other valuation techniques in cases where quoted market prices are not available. Those techniques are significantly affectedpunitive damages or claims for indeterminate amounts of damages. We establish reserves for legal claims when payments associated with the claims become probable and the payments can be reasonably estimated. Given the inherent difficulty of predicting the outcome of litigation and regulatory matters, it is generally very difficult to predict what the eventual outcome will be, and when the matter will be resolved. The actual costs of resolving legal claims may be higher or lower than any amounts reserved for the claims. At March 31, 2015, we estimated our reasonably possible legal exposure for unfavorable outcomes to be a range of up to $93 million and have accrued $38 million.
In July 2014, we were served with a subpoena by the assumptionsU.S. Department of Justice directing us to produce certain documents relating to our and our subsidiaries’ and affiliates’ origination and securitization of sub-prime automobile loans since 2007 in connection with an investigation by the U.S. Department of Justice in contemplation of a civil proceeding for potential violations of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989. Among other matters, the subpoena requests information relating to the underwriting criteria used including the discount rateto originate these automobile loans and the estimated timingrepresentations and amount of future cash flows. Therefore,warranties relating to those underwriting criteria that were made in connection with the estimates of fair value may differ substantially from amounts that ultimately may be realized or paid at settlement or maturitysecuritization of the financial instrumentsautomobile loans. We were subsequently served with additional investigative subpoenas to produce documents from state attorneys general and those differences mayother governmental offices relating to our sub-prime auto finance business and securitization of sub-prime auto loans. In October 2014, we received a document request from the Securities and Exchange Commission in connection with its investigation into certain practices in sub-prime auto loan securitization.  We are investigating these matters internally and believe that we are cooperating with all requests. Such investigations could in the future result in the imposition of damages, fines or civil or criminal claims and/or penalties. No assurance can be material. Disclosures about fair valuegiven that the ultimate outcome of financial instruments exclude certain financial instrumentsthe investigations or any resulting proceedings would not materially and all non-financial instruments. Accordingly,adversely affect us or any of our subsidiaries and affiliates.
Other Administrative Tax Matters
We accrue non-income tax liabilities for contingencies when management believes that a loss is probable and the amounts can be reasonably estimated, while contingent gains are recognized only when realized. In the event any losses are sustained in excess of accruals, they will be charged against income at that time.
In evaluating indirect tax matters, we take into consideration factors such as our historical experience with matters of similar nature, specific facts and circumstances, and the likelihood of prevailing. We reevaluate and update our accruals as matters progress over time. It is reasonably possible that some of the matters for which accruals have not been established could be decided unfavorably to us and could require us to make expenditures for which we estimate the aggregate fair value amounts presented do not represent the underlying valuerisk to be a range of our company.up to $50 million.

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Estimated fair values, carrying valuesNote 12.     Income Taxes

For interim income tax reporting we estimate our annual effective tax rate and various methods and assumptions used in valuingapply it to our financial instruments are set forth below (in millions):
    June 30, 2014 December 31, 2013
   Level 
Carrying
Value
 
Estimated
Fair Value
 
Carrying
Value
 
Estimated
Fair Value
Financial assets:          
Cash and cash equivalents
(a) 
1 $1,412
 $1,412
 $1,074
 $1,074
Finance receivables, net
(b) 
3 $31,545
 $31,922
 $29,282
 $29,301
Restricted cash
(a) 
1 $2,205
 $2,205
 $1,958
 $1,958
Interest rate swap agreements
(c) 
3 $17
 $17
 $11
 $11
Interest rate cap agreements purchased
(d) 
2 $7
 $7
 $7
 $7
Foreign currency swap agreements
(d) 
2 $1
 $1
 $3
 $3
Financial liabilities:          
Secured debt          
North America
(e) 
2 $14,550
 $14,660
 $12,479
 $12,565
International
(f) 
2 $7,067
 $7,083
 $5,113
 $5,113
International
(g) 
3 $3,389
 $3,403
 $4,481
 $4,492
Unsecured debt          
North America
(h) 
2 $4,376
 $4,524
 $4,000
 $4,106
International
(i) 
2 $2,946
 $2,946
 $1,282
 $1,282
International
(g) 
3 $274
 $281
 $1,691
 $1,690
Interest rate swap agreements
(c) 
3 $34
 $34
 $17
 $17
Interest rate cap agreements sold
(d) 
2 $8
 $8
 $7
 $7
Foreign currency swap agreements
(d) 
2 $53
 $53
 $29
 $29
_________________
(a)Cash and cash equivalents and restricted cash bear interest at market rates; therefore, carrying value is considered to be a reasonable estimate of fair value.
(b)The fair value of the consumer finance receivables in the North America Segment is estimated based upon forecasted cash flows on the receivables discounted using a pre-tax weighted average cost of capital. The fair value of the consumer finance receivables in the International Segment is estimated based on forecasted cash flows on the receivables discounted using current origination rates for similar type loans. Commercial finance receivables generally have variable interest rates and maturities of one year or less. Therefore, the carrying value is considered to be a reasonable estimate of fair value.
(c)The fair values of the interest rate swap agreements are estimated by discounting future net cash flows expected to be settled using current risk-adjusted rates.
(d)The fair values of the interest rate cap agreements and foreign currency swap agreements are based on quoted market prices.
(e)Secured debt in the North America Segment is comprised of revolving credit facilities, publicly-issued secured debt, and privately-issued secured debt. For revolving credit facilities with variable rates of interest and terms of one year or less, carrying value is considered to be a reasonable estimate of fair value. The fair value of the publicly and privately issued secured term debt is based on quoted market prices, when available. If quoted market prices are not available, the market value is estimated using quoted market prices of similar securities.
(f)The level 2 secured debt in the International Segment has terms of one year or less, or has been priced within the last six months; therefore, par value is considered to be a reasonable estimate of fair value.
(g)The fair value of level 3 secured debt and unsecured debt in the International Segment is estimated by discounting future net cash flows expected to be settled using current risk-adjusted rates.
(h)The fair value of unsecured debt in the North America Segment is based on quoted market prices in thinly-traded markets.
(i)The level 2 unsecured debt in the International Segment has terms of one year or less; therefore, par value is considered to be a reasonable estimate of fair value.
The fair value of our consumer finance receivables is based on observable and unobservable inputs within a discounted cash flow model. Those unobservable inputs reflect assumptions regarding expected prepayments, deferrals, delinquencies, recoveries and charge-offs of the loans within the portfolio. The cash flow model produces an estimated amortization schedule of the finance

19


receivables which is the basis for the calculation of the series of cash flows that derive the fair value of the portfolio. For the North America Segment, the series of cash flows is calculated and discounted using a weighted average cost of capital using unobservable debt and equity percentages, an unobservable cost of equity and an observable cost of debt based on companiesyear-to-date ordinary income. Tax jurisdictions with a similar credit ratingprojected 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 maturity profile. Foreffects of changes in tax laws or rates, are reported in the International Segment,interim period in which they occur.

In the seriesthree months ended March 31, 2015 income tax expense of cash flows is calculated and discounted using current interest rates. Macroeconomic factors could affect the credit performance of our portfolio and therefore could potentially impact the assumptions used$64 million primarily resulted from tax expense attributable to entities included in our cash flow model.effective tax rate calculation, partially offset by tax benefits related to tax audit settlements in various jurisdictions.  In the three months ended March 31, 2014 income tax expense of $77 million primarily resulted from tax expense attributable to entities included in our effective tax rate calculation.
Note 12.13.Segment Reporting

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

For segment reporting purposes only, interest expense related to the senior notes has been allocated based on targeted leverage for each segment. Interest expense in excess of the targeted overall leverage is reflected in the "Corporate" column below. In addition, the interest income on $1.7 billion in intercompany loans provided to the international operations is presented in the "Corporate" column below.as revenue.
All inter-segment balances and transactions have been eliminated. Key operatingfinancial data for our operating segments were as follows (in millions):
 Three Months Ended June 30, 2014 Three Months Ended March 31, 2015
 
North
America
 International Corporate Eliminations Total 
North
America
 International Corporate Eliminations Total
Total revenue $691
 $500
 $15
 $(15) $1,191
 $906
 $448
 $7
 $(7) $1,354
Operating expenses, including leased vehicle expenses 310
 149
 
 
 459
 487
 146
 
 
 633
Provision for loan losses 90
 23
 
 
 113
 118
 37
 
 
 155
Interest expense 104
 248
 17
 (15) 354
 165
 206
 16
 (7) 380
Equity income 
 28
 
 
 28
Income before income taxes $187
 $80
 $(2) $
 $265
 $136
 $87
 $(9) $
 $214

 Three Months Ended June 30, 2013 Three Months Ended March 31, 2014
 
North
America
 International Corporate Eliminations Total 
North
America
 International Corporate Eliminations Total
Total revenue $588
 $248
 $14
 $(14) 836
 $636
 $461
 $16
 $(16) $1,097
Operating expenses, including leased vehicle expenses 203
 89
 
 
 292
 274
 151
 
 
 425
Provision for loan losses 81
 19
 
 
 100
 103
 32
 
 
 135
Interest expense 91
 81
 6
 (14) 164
 92
 214
 25
 (16) 315
Acquisition and integration expenses 
 16
 
 
 16
Income before income taxes $213
 $43
 $8
 $
 $264
 $167
 $64
 $(9) $
 $222
  Six Months Ended June 30, 2014
  
North
America
 International Corporate Eliminations Total
Total revenue $1,327
 $961
 $31
 $(31) 2,288
Operating expenses, including leased vehicle expenses 584
 300
 
 
 884
Provision for loan losses 193
 55
 
 
 248
Interest expense 196
 462
 42
 (31) 669
Income before income taxes $354
 $144
 $(11) $
 $487

  March 31, 2015 December 31, 2014
  
North
America
 International Total 
North
America
 International Total
Finance receivables, net $16,929
 $15,541
 $32,470
 $15,943
 $17,057
 $33,000
Total assets $30,535
 $18,811
 $49,346
 $27,687
 $20,037
 $47,724

2015


  Six Months Ended June 30, 2013
  
North
America
 International Corporate Eliminations Total
Total revenue $1,128
 $248
 $14
 $(14) 1,376
Operating expenses, including leased vehicle expenses 391
 89
 
 
 480
Provision for loan losses 175
 19
 
 
 194
Interest expense 173
 81
 6
 (14) 246
Acquisition and integration expenses 
 22
 
 
 22
Income before income taxes $389
 $37
 $8
 $
 $434


  June 30, 2014 December 31, 2013
  
North
America
 International Total 
North
America
 International Total
Finance receivables, net $13,745
 $17,800
 $31,545
 $12,878
 $16,404
 $29,282
Total assets $21,977
 $20,382
 $42,359
 $19,094
 $18,896
 $37,990
Note 13.14.Accumulated Other Comprehensive (Loss) Income (Loss)
A summary of changes in accumulated other comprehensive (loss) income (loss) is as follows (in millions):
 Three Months Ended June 30, Three Months Ended March 31,
 2014 2013 2015 2014
Defined benefit plans, net:        
Balance at beginning of period $3
 $
 $(11) $3
Unrealized gain on subsidiary pension 
 
 1
 
Balance at end of period 3
 
 (10) 3
Foreign currency translation adjustment:        
Balance at beginning of period 13
 (9) (422) 8
Translation gain (loss) 49
 (59)
Translation (loss) gain (347) 5
Balance at end of period 62
 (68) (769) 13
Total accumulated other comprehensive income (loss) $65
 $(68)
Total accumulated other comprehensive (loss) income $(779) $16
  Six Months Ended June 30,
  2014 2013
Defined benefit plans, net:    
Balance at beginning of period $3
 $
Unrealized gain on subsidiary pension 
 
Balance at end of period 3
 
Foreign currency translation adjustment:    
Balance at beginning of period 8
 (3)
Translation gain (loss) 54
 (65)
Balance at end of period 62
 (68)
Total accumulated other comprehensive income (loss) $65
 $(68)


21


Note 14.15.Regulatory Capital
The International Segment includes the operations of certain stand-alone entities that operate in local markets as either banks or regulated finance companies that are subject to regulatory restrictions. These regulatory restrictions, among other things, require that these entities meet certain minimum capital requirements and may restrict dividend distributions and ownership of certain assets. We were in compliance with all regulatory requirements at June 30, 2014.March 31, 2015. Total assets of our regulated international banks and finance companies were approximately $12.5$9.5 billion and $12.1$11.4 billion at June 30, 2014March 31, 2015 and December 31, 2013.2014.The decrease in assets is primarily due to the effect of foreign currency movements.
Note 15.16.Guarantor Condensed Consolidating Financial Statements
The payment of principal and interest on senior notes issued by our top-tier holding company is currently guaranteed solely by AFSI (the "Guarantor") and none of our other subsidiaries (the "Non-Guarantor Subsidiaries"). The separate financial statements of the Guarantor are not included herein because the Guarantor is a 100% owned consolidated subsidiary and is unconditionally liable for the obligations represented by the senior notes.  A subsidiaryThe Guarantor’s guarantee canmay be released underonly upon customary circumstances, including (i) the subsidiary is soldterms of which vary by issuance.  Customary circumstances include the sale or sellsdisposition of all of its assets; (ii) the subsidiary is declared "unrestricted" for covenant purposes; (iii)Guarantor’s assets or capital stock, the subsidiary's guaranteeachievement of other indebtedness is terminated or released; (iv)investment grade rating of the requirements forsenior notes and legal defeasance or covenant defeasance or to discharge the indenture have been satisfied; (v) the rating on the parent's debt securities is changed to investment grade; or (vi) the parent's debt securities are converted or exchanged into equity securities.defeasance.
The condensed consolidating financial statements present consolidating financial data for (i) General Motors Financial Company, Inc. (on a parent onlyparent-only basis), (ii) the Guarantor, (iii) the combined Non-Guarantor Subsidiaries and (iv) an elimination column for adjustments to arrive at the information for the parent company and our subsidiaries on a consolidated basis and (v) the parent company and our subsidiaries on a consolidated basis as ofat June 30, 2014March 31, 2015 and December 31, 2013,2014, and for the three and six months ended June 30,March 31, 2015 and 2014 (after the elimination of intercompany balances and 2013.transactions).
Investments in subsidiaries are accounted for by the parent company using the equity method for purposes of this presentation. Results of operations of subsidiaries are therefore reflected in the parent company's investment accounts and earnings. The principal elimination entries set forth below eliminate investments in subsidiaries and intercompany balances and transactions.

































2216




GENERAL MOTORS FINANCIAL COMPANY, INC.
CONDENSED CONSOLIDATING BALANCE SHEET
June 30, 2014March 31, 2015
(In millions) 
(Unaudited)
General
Motors
Financial
Company,
Inc.
 Guarantor 
Non-
Guarantors
 Eliminations Consolidated
General
Motors
Financial
Company,
Inc.
 Guarantor 
Non-
Guarantors
 Eliminations Consolidated
Assets                  
Cash and cash equivalents$
 $699
 $713
 $
 $1,412
$
 $1,444
 $677
 $
 $2,121
Finance receivables, net
 609
 30,936
 
 31,545

 3,845
 28,625
 
 32,470
Leased vehicles, net
 
 8,939
 
 8,939
Restricted cash
 30
 2,175
 
 2,205

 13
 1,836
 
 1,849
Goodwill1,095
 
 148
 
 1,243
Equity in net assets of non-consolidated affiliates
 
 929
 
 929
Property and equipment, net
 6
 144
 
 150
  31
 145
   176
Leased vehicles, net
 
 4,748
 
 4,748
Deferred income taxes20
 
 612
 (199) 433
59
 
 764
 (540) 283
Goodwill1,095
 
 150
 
 1,245
Related party receivables
 18
 167
 
 185

 18
 419
 
 437
Other assets62
 2
 377
 (5) 436
107
 170
 622
 
 899
Due from affiliates3,116
 
 
 (3,116) 
8,346
 
 
 (8,346) 
Investment in affiliates7,388
 3,594
 
 (10,982) 
8,138
 3,559
 
 (11,697) 
Total assets$11,681
 $4,958
 $40,022
 $(14,302) $42,359
$17,745
 $9,080
 $43,104
 $(20,583) $49,346
Liabilities and Shareholder's Equity                  
Liabilities:                  
Secured debt$
 $
 $25,006
 $
 $25,006
$
 $
 $24,693
 $
 $24,693
Unsecured debt4,000
 
 3,596
 
 7,596
9,744
 
 4,688
 
 14,432
Accounts payable and accrued expenses49
 137
 803
 (5) 984
85
 166
 719
 
 970
Deferred income
 
 249
 
 249

 
 546
 
 546
Deferred taxes liabilities
 199
 12
 (199) 12
Deferred income taxes
 584
 4
 (540) 48
Taxes payable74
 
 219
 
 293
75
 
 130
 
 205
Related party taxes payable891
 
 1
 (1) 891
636
 
 
 
 636
Related party payable
 
 432
 
 432
Related party payables
 
 450
 
 450
Other liabilities
 18
 211
 
 229
2
 11
 150
 
 163
Due to affiliates
 677
 2,438
 (3,115) 

 4,054
 4,292
 (8,346) 
Total liabilities5,014
 1,031
 32,967
 (3,320) 35,692
10,542
 4,815
 35,672
 (8,886) 42,143
Shareholder's equity:                  
Common stock
 
 698
 (698) 

 
 688
 (688) 
Additional paid-in capital4,793
 79
 3,400
 (3,479) 4,793
5,805
 79
 4,054
 (4,133) 5,805
Accumulated other comprehensive income65
 (5) 81
 (76) 65
Accumulated other comprehensive loss(779) (122) (754) 876
 (779)
Retained earnings1,809
 3,853
 2,876
 (6,729) 1,809
2,177
 4,308
 3,444
 (7,752) 2,177
Total shareholder's equity6,667
 3,927
 7,055
 (10,982) 6,667
7,203
 4,265
 7,432
 (11,697) 7,203
Total liabilities and shareholder's equity$11,681
 $4,958
 $40,022
 $(14,302) $42,359
$17,745
 $9,080
 $43,104
 $(20,583) $49,346



2317


GENERAL MOTORS FINANCIAL COMPANY, INC.
CONDENSED CONSOLIDATING BALANCE SHEET
December 31, 20132014
(In millions) 
(Unaudited)
General
Motors
Financial
Company,
Inc.
 Guarantor 
Non-
Guarantors
 Eliminations Consolidated
General
Motors
Financial
Company,
Inc.
 Guarantor 
Non-
Guarantors
 Eliminations Consolidated
Assets                  
Cash and cash equivalents$
 $395
 $679
 $
 $1,074
$
 $2,266
 $708
 $
 $2,974
Finance receivables, net
 612
 28,670
 
 29,282

 2,401
 30,599
 
 33,000
Leased vehicles, net
 
 7,060
 
 7,060
Restricted cash
 20
 1,938
 
 1,958

 17
 2,054
 
 2,071
Goodwill1,095
 
 149
 
 1,244
Property and equipment, net
 5
 127
 
 132

 23
 149
 
 172
Leased vehicles, net
 
 3,383
 
 3,383
Deferred income taxes1
 
 358
 
 359
28
 
 601
 (288) 341
Goodwill1,095
 
 145
 
 1,240
Related party receivables29
 
 100
 
 129

 11
 373
 
 384
Other assets74
 5
 358
 (4) 433
94
 18
 366
 
 478
Due from affiliates3,754
 863
 
 (4,617) 
6,787
 
 400
 (7,187) 
Investment in affiliates6,994
 3,565
 
 (10,559) 
7,684
 4,059
 
 (11,743) 
Total assets$11,947
 $5,465
 $35,758
 $(15,180) $37,990
$15,688
 $8,795
 $42,459
 $(19,218) $47,724
Liabilities and Shareholder's Equity                  
Liabilities:                  
Secured debt$
 $
 $22,073
 $
 $22,073
$
 $
 $25,214
 $
 $25,214
Unsecured debt4,000
 
 2,973
 
 6,973
7,500
 
 4,717
 
 12,217
Accounts payable and accrued expenses101
 133
 716
 (4) 946
78
 156
 768
 
 1,002
Deferred income
 
 168
 
 168

 
 392
 
 392
Deferred taxes payable(28) 161
 (46) 
 87
Deferred income taxes
 288
 20
 (288) 20
Taxes payable83
 
 204
 
 287
79
 
 155
 
 234
Related party taxes payable643
 
 1
 (1) 643
636
 
 
 
 636
Related party payable
 
 368
 
 368
Related party payables
 
 433
 
 433
Other liabilities
 14
 146
 
 160
3
 12
 169
 
 184
Due to affiliates863
 1,474
 2,280
 (4,617) 

 4,164
 3,023
 (7,187) 
Total liabilities5,662
 1,782
 28,883
 (4,622) 31,705
8,296
 4,620
 34,891
 (7,475) 40,332
Shareholder's equity:                  
Common stock
 
 532
 (532) 

 
 690
 (690) 
Additional paid-in capital4,785
 79
 3,833
 (3,912) 4,785
5,799
 79
 4,064
 (4,143) 5,799
Accumulated other comprehensive income (loss)11
 (8) 24
 (16) 11
Accumulated other comprehensive loss(433) (64) (410) 474
 (433)
Retained earnings1,489
 3,612
 2,486
 (6,098) 1,489
2,026
 4,160
 3,224
 (7,384) 2,026
Total shareholder's equity6,285
 3,683
 6,875
 (10,558) 6,285
7,392
 4,175
 7,568
 (11,743) 7,392
Total liabilities and shareholder's equity$11,947
 $5,465
 $35,758
 $(15,180) $37,990
$15,688
 $8,795
 $42,459
 $(19,218) $47,724







2418


GENERAL MOTORS FINANCIAL COMPANY, INC.
CONDENSED CONSOLIDATING STATEMENT OF INCOME
Three Months Ended June 30, 2014March 31, 2015
(In millions) 
(Unaudited)
General
Motors
Financial
Company,
Inc.
 Guarantor 
Non-
Guarantors
 Eliminations ConsolidatedGeneral
Motors
Financial
Company,
Inc.
 Guarantor Non-
Guarantors
 Eliminations Consolidated
Revenue                  
Finance charge income$
 $39
 $843
 $
 $882
$
 $80
 $774
 $
 $854
Leased vehicle income
 
 238
 
 238

 
 431
 
 431
Other income20
 104
 42
 (95) 71
7
 108
 45
 (91) 69
Equity in income of affiliates189
 153
 
 (342) 
209
 296
 1,123
 (437) 1,191
7
 188
 1,250
 (91) 1,354
Costs and expenses                  
Salaries and benefits
 63
 91
 
 154

 89
 76
 
 165
Other operating expenses(6) 41
 153
 (62) 126
54
 (3) 154
 (64) 141
Total operating expenses(6) 104
 244
 (62) 280
54
 86
 230
 (64) 306
Leased vehicle expenses
 
 179
 
 179

 
 327
 
 327
Provision for loan losses
 75
 38
 
 113

 74
 81
 
 155
Interest expense44
 8
 335
 (33) 354
94
 (2) 315
 (27) 380
38
 187
 796
 (95) 926
Total costs and expenses148
 158
 953
 (91) 1,168
Equity income238
 129
 28
 (367) 28
Income before income taxes171
 109
 327
 (342) 265
97
 159
 325
 (367) 214
Income tax (benefit) provision(4) (16) 110
 
 90
(53) 11
 106
 
 64
Net income$175
 $125
 $217
 $(342) $175
$150
 $148
 $219
 $(367) $150
                  
Comprehensive income$224
 $148
 $267
 $(415) $224
$(196) $90
 $(125) $35
 $(196)



2519


GENERAL MOTORS FINANCIAL COMPANY, INC.
CONDENSED CONSOLIDATING STATEMENT OF INCOME
Three Months Ended June 30, 2013
(In millions)
(Unaudited)
 
General
Motors
Financial
Company,
Inc.
 Guarantor 
Non-
Guarantors
 Eliminations Consolidated
Revenue         
Finance charge income$
 $30
 $617
 $
 $647
Leased vehicle income
 
 136
 
 136
Other income35
 83
 81
 (146) 53
Equity in income of affiliates187
 158
 
 (345) 
 222
 271
 834
 (491) 836
Costs and expenses         
Salaries and benefits
 54
 62
 
 116
Other operating (income) expenses(5) (24) 104
 
 75
Total operating expenses(5) 30
 166
 
 191
Leased vehicle expenses
 
 101
 
 101
Provision for loan losses
 60
 40
 
 100
Interest expense50
 54
 206
 (146) 164
Acquisition and integration expenses
 
 16
 
 16
 45
 144
 529
 (146) 572
Income before income taxes177
 127
 305
 (345) 264
Income tax (benefit) provision(1) (13) 100
 
 86
Net income$178
 $140
 $205
 $(345) $178
          
Comprehensive income$119
 $146
 $150
 $(296) $119



26


GENERAL MOTORS FINANCIAL COMPANY, INC.
CONDENSED CONSOLIDATING STATEMENT OF INCOME
Six Months Ended June 30,March 31, 2014
(In millions) 
(Unaudited)
General
Motors
Financial
Company,
Inc.
 Guarantor 
Non-
Guarantors
 Eliminations ConsolidatedGeneral
Motors
Financial
Company,
Inc.
 Guarantor Non-
Guarantors
 Eliminations Consolidated
Revenue                  
Finance charge income$
 $69
 $1,643
 $
 $1,712
$
 $30
 $800
 $
 $830
Leased vehicle income
 
 438
 
 438

 
 200
 
 200
Other income40
 231
 80
 (213) 138
20
 127
 38
 (118) 67
Equity in income of affiliates359
 269
 
 (628) 
399
 569
 2,161
 (841) 2,288
20
 157
 1,038
 (118) 1,097
Costs and expenses                  
Salaries and benefits
 116
 174
 
 290

 53
 83
 
 136
Other operating (income) expenses(5) 74
 314
 (124) 259
Other operating expenses1
 33
 161
 (62) 133
Total operating expenses(5) 190
 488
 (124) 549
1
 86
 244
 (62) 269
Leased vehicle expenses
 
 335
 
 335

 
 156
 
 156
Provision for loan losses
 135
 113
 
 248

 60
 75
 
 135
Interest expense99
 19
 640
 (89) 669
55
 11
 305
 (56) 315
94
 344
 1,576
 (213) 1,801
Total costs and expenses56
 157
 780
 (118) 875
Equity income(a)
170
 116
 
 (286) 
Income before income taxes305
 225
 585
 (628) 487
134
 116
 258
 (286) 222
Income tax (benefit) provision(15) (16) 198
 
 167
(11) 
 88
 
 77
Net income$320
 $241
 $387
 $(628) $320
$145
 $116
 $170
 $(286) $145
                  
Comprehensive income$374
 $244
 $442
 $(686) $374
$150
 $96
 $175
 $(271) $150

________________
(a)Equity income has been reclassified from revenue as previously presented.




27


GENERAL MOTORS FINANCIAL COMPANY, INC.
CONDENSED CONSOLIDATING STATEMENT OF INCOME
Six Months Ended June 30, 2013
(In millions)
(Unaudited)
 
General
Motors
Financial
Company,
Inc.
 Guarantor 
Non-
Guarantors
 Eliminations Consolidated
Revenue         
Finance charge income$
 $69
 $993
 $
 $1,062
Leased vehicle income
 
 243
 
 243
Other income49
 124
 128
 (230) 71
Equity in income of affiliates300
 304
 
 (604) 
 349
 497
 1,364
 (834) 1,376
Costs and expenses         
Salaries and benefits
 102
 88
 
 190
Other operating (income) expenses(2) (49) 160
 
 109
Total operating expenses(2) 53
 248
 
 299
Leased vehicle expenses
 
 181
 
 181
Provision for loan losses
 127
 67
 
 194
Interest expense71
 89
 316
 (230) 246
Acquisition and integration expenses
 
 22
 
 22
 69
 269
 834
 (230) 942
Income before income taxes280
 228
 530
 (604) 434
Income tax (benefit) provision(4) (27) 181
 
 150
Net income$284
 $255
 $349
 $(604) $284
          
Comprehensive income$219
 $262
 $288
 $(550) $219



2820


GENERAL MOTORS FINANCIAL COMPANY, INC.
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
SixThree Months Ended June 30, 2014March 31, 2015
(In millions) 
(Unaudited)
General
Motors
Financial
Company,
Inc.
 Guarantor 
Non-
Guarantors
 Eliminations Consolidated
General
Motors
Financial
Company,
Inc.
 Guarantor 
Non-
Guarantors
 Eliminations Consolidated
Net cash provided by operating activities$205
 $141
 $558
 $
 $904
Net cash (used in) provided by operating activities$(62) $368
 $239
 $
 $545
Cash flows from investing activities:                  
Purchases of consumer finance receivables, net
 (2,924) (6,546) 2,643
 (6,827)
 (2,283) (2,278) 496
 (4,065)
Principal collections and recoveries on consumer finance receivables
 (100) 5,400
 
 5,300

 120
 2,694
 
 2,814
Proceeds from sale of consumer finance receivables, net
 2,643
 
 (2,643) 

 496
 
 (496) 
Net collections (funding) of commercial finance receivables
 256
 (553) 
 (297)
Net (collections) funding of commercial finance receivables
 150
 (96) 
 54
Purchases of leased vehicles, net
 
 (1,856) 
 (1,856)
 
 (2,319) 
 (2,319)
Proceeds from termination of leased vehicles
 
 264
 
 264

 
 185
 
 185
Acquisition of international operations, net of cash on hand(46) 
 
 
 (46)
Acquisition of equity interest(513) (536) 
 
 (1,049)
Purchases of property and equipment
 (2) (13) 
 (15)
 (8) (9) 
 (17)
Change in restricted cash
 (9) (227) 
 (236)
 4
 (158) 
 (154)
Change in other assets
 
 (2) 
 (2)
 
 6
 
 6
Net change in investment in affiliates(5) 243
 
 (238) 
(48) 571
 
 (523) 
Net cash (used in) provided by investing activities(51) 107
 (3,533) (238) (3,715)
Net cash used in investing activities(561) (1,486) (1,975) (523) (4,545)
Cash flows from financing activities:                  
Net increase in debt (original maturities less than three months)
 
 278
 
 278
Net change in debt (original maturities less than three months)
 
 198
 
 198
Borrowings and issuance of secured debt
 
 10,722
 
 10,722

 
 2,889
 
 2,889
Payments on secured debt
 
 (8,445) 
 (8,445)
 
 (2,748) 
 (2,748)
Borrowings and issuance of unsecured debt
 
 1,472
 
 1,472
2,250
 
 1,008
 
 3,258
Payments on unsecured debt
 
 (838) 
 (838)
 
 (308) 
 (308)
Net capital contributions26
 
 (264) 238
 

 
 (523) 523
 
Debt issuance costs
 
 (49) 
 (49)(20) 
 (21) 
 (41)
Net change in due from/due to affiliates

(180) 56
 124
 
 
(1,607) 296
 1,311
 
 
Net cash (used in) provided by financing activities(154) 56
 3,000
 238
 3,140
Net increase in cash and cash equivalents
 304
 25
 
 329
Net cash provided by financing activities623
 296
 1,806
 523
 3,248
Net (decrease) increase in cash and cash equivalents
 (822) 70
 
 (752)
Effect of foreign exchange rate changes on cash and cash equivalents
 
 9
 
 9

 
 (101) 
 (101)
Cash and cash equivalents at beginning of period
 395
 679
 
 1,074

 2,266
 708
 
 2,974
Cash and cash equivalents at end of period$
 $699
 $713
 $
 $1,412
$
 $1,444
 $677
 $
 $2,121

2921


GENERAL MOTORS FINANCIAL COMPANY, INC.
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
SixThree Months Ended June 30, 2013March 31, 2014
(In millions) 
(Unaudited) 
General
Motors
Financial
Company,
Inc.
 Guarantor 
Non-
Guarantors
 Eliminations Consolidated
General
Motors
Financial
Company,
Inc.
 Guarantor 
Non-
Guarantors
 Eliminations Consolidated
Net cash provided by operating activities$86
 $184
 $431
 $
 $701
$175
 $57
 $154
 $
 $386
Cash flows from investing activities:                  
Purchases of consumer finance receivables, net
 (2,695) (4,222) 3,105
 (3,812)
 (1,363) (2,838) $881
 (3,320)
Principal collections and recoveries on consumer finance receivables
 1
 3,053
 
 3,054

 (33) 2,650
 
 2,617
Proceeds from sale of consumer finance receivables, net
 3,105
 
 (3,105) 

 881
 
 (881) 
Net funding of commercial finance receivables
 (1,080) (769) 1,467
 (382)
 (152) (103) 
 (255)
Proceeds from sale of commercial finance receivables, net
 1,467
 
 (1,467) 
Purchases of leased vehicles, net
 
 (1,176) 
 (1,176)
 
 (628) 
 (628)
Proceeds from termination of leased vehicles
 
 84
 
 84

 
 123
 
 123
Acquisition of international operations, net of cash on hand(2,547) (863) 440
 863
 (2,107)
Purchases of property and equipment
 
 (4) 
 (4)
 
 (7) 
 (7)
Change in restricted cash
 
 (158) 
 (158)
 3
 (150) 
 (147)
Change in other assets
 (10) 8
 
 (2)
Net change in investment in affiliates(29) (97) 
 126
 

 640
 
 (640) 
Net cash used in by investing activities(2,576) (172) (2,744) 989
 (4,503)
Net cash used in investing activities
 (24) (953) (640) (1,617)
Cash flows from financing activities:                  
Net change in debt (original maturities less than three months)
 
 451
 
 451
Borrowings and issuance of secured debt1,100
 
 7,985
 
 9,085

 
 5,070
 
 5,070
Payments on secured debt(1,100) 
 (5,907) 
 (7,007)
 
 (4,238) 
 (4,238)
Borrowings and issuance of unsecured debt2,500
 
 522
 
 3,022

 
 390
 
 390
Payments on unsecured debt
 
 (633) 
 (633)
 
 (330) 
 (330)
Repayment of debt to Ally Financial
 
 (1,416) 
 (1,416)
Capital contribution from parent1,300
 
 
 
 1,300
Net capital contributions(45) 
 (595) 640
 
Debt issuance costs(29) 
 (34) 
 (63)
 
 (23) 
 (23)
Net capital contribution to subsidiaries
 
 130
 (130) 
Net change in due from/due to affiliates(1,281) (211) 2,354
 (862) 
(130) 112
 18
 
 
Net cash provided (used in) by financing activities2,490
 (211) 3,001
 (992) 4,288
Net cash (used in) provided by financing activities(175) 112
 743
 640
 1,320
Net increase (decrease) in cash and cash equivalents
 (199) 688
 (3) 486

 145
 (56) 
 89
Effect of foreign exchange rate changes on cash and cash equivalents
 
 (21) 3
 (18)
 
 (1) 
 (1)
Cash and cash equivalents at beginning of period
 1,252
 37
 
 1,289

 395
 679
 
 1,074
Cash and cash equivalents at end of period$
 $1,053
 $704
 $
 $1,757
$
 $540
 $622
 $
 $1,162









3022


Item 2.MANAGEMENTS'SMANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERALOVERVIEW
We are a global provider of automobile finance solutions, and we operate in the market as the wholly-owned captive finance subsidiary of our parent, GM. We conduct our business generally in two segments, in North America and internationally in Europe and Latin America. Thesegments: the North America Segment, which includes our operations in the U.S. and Canada. TheCanada, and the International Segment, which includes operations in Austria, Belgium, Brazil, Chile, Colombia, France, Germany, Greece, Italy, Mexico, the Netherlands, Portugal, Spain, Sweden, Switzerland and the U.K. Additionally,On January 2, 2015, we have agreed to acquirecompleted the acquisition of Ally Financial's non-controlling 40% equity interest in GMAC-SAICSAIC-GMAC for an aggregate purchase price of $1.0 billion. Also on January 2, 2015, we sold a 5% equity interest in SAIC-GMAC to Shanghai Automotive Group Finance Company Limited ("GMAC-SAIC"Ltd. (“SAIC FC”), a joint venture, which conducts auto finance operations in China. This agreement is subject to certain regulatory and other approvals and has become subject tocurrent shareholder of SAIC-GMAC, for proceeds of $125 million. As a rightresult of termination by either party in its sole discretion; however,these transactions, we do not expect the agreement to be terminated. We consider it probable that our acquisition of Ally Financial'sown a 35% equity interest in GMAC-SAIC will occur in late 2014 or as soon as practicable thereafter.SAIC-GMAC.
North America Operations
Consumer
Our automobile finance programs in the North America Segment include sub-prime lending and full credit spectrum leasing and, tomore recently, prime and near-prime lending, offered through GM-franchised dealers under the "GM Financial" brand. We also offer a more limited extent, prime lending.sub-prime lending product through non-GM franchised and select independent dealers under the "AmeriCredit" brand. Our sub-prime lending program is designed to serve customers who have limited access to automobile financing through banks and credit unions. Our typical borrowers have experienced prior credit difficulties or have limited credit histories and generally have credit bureau scores ranging from 500 to 700. We therefore generally charge higher rates than those charged by banks and credit unions and we also expect to sustain a higher level of defaultscredit losses than theseon prime lending. We generally finance new GM vehicles, moderately-priced new vehicles from other automobile financing sources.manufacturers, and later-model, low mileage used vehicles. During the three months ended March 31, 2015 and 2014, 73.8% and 52.7% of our loan and lease originations in the North America Segment were for new GM vehicles.
We are currently seeking to expandexpanding our leasing, near prime and prime lending programs through GM-franchised dealerships in North America and anticipateexpect that leasing and prime lending will become an increasing percentage of our originations and consumer portfolio balance over time. Between February and April 2015, we implemented a brand-by-brand exclusive lease subvention arrangement in the U.S. with GM. We define prime lending as lending to customers with FICO scores of 680 and greater, near-prime lending as lending to customers with FICO scores between 620 to 679, and sub-prime lending as lending to customers with FICO scores of less than 620. The following table presents our consumer loan and lease originations in North America by FICO score band (in millions):
We
 Three Months Ended March 31,
 2015 2014
 Amount Percentage Amount Percentage
Prime - FICO Score 680 and greater$2,733
 51.8% $539
 25.2%
Near prime - FICO Score 620 to 679926
 17.5
 260
 12.2
Sub-prime - FICO Score less than 6201,621
 30.7
 1,338
 62.6
Total originations$5,280
 100.0% $2,137
 100.0%
The consumer lending and leasing programs in our International Segment focus our marketing activities on automobile dealerships. We are selective in choosing the dealers with whom we conduct business and primarily pursue GM and non-GM manufacturer-franchised dealerships with new and used car operations; however, we also conduct business with a limited number of independent dealerships. We generally financefinancing new GM vehicles moderately-priced newand select used vehicles from other manufacturers,for predominantly consumers with prime credit scores. We also offer finance-related insurance products through third parties, such as credit life, gap and later-model, low-mileage used vehicles.extended warranty coverage.
Our leasing product is offered through GM-franchised dealers and primarily targets prime consumers leasing new GM vehicles. We seek to provide competitive alternatives to existing marketplace lease offerings in GM-franchised dealers.
Our origination platform provides specialized focus on marketing our financing programs and underwriting loans and leases. Responsibilities are segregated so that the sales group markets our programs and products to our dealer customers, while the underwriting group focuses on underwriting, negotiating and closing loans and leases. In the U.S. our sales and underwriting groups are further segregated with separate teams servicing GM dealers and non-GM dealers, allowing us to continue efficient service for our non-GM dealers under the "AmeriCredit" brand while providing GM-franchised dealers the broader loan, lease and commercial lending products we offer under the "GM Financial" brand.
We utilize a proprietary credit scoring system to support the credit approval process. The credit scoring system was developed through statistical analysis of our consumer demographic and portfolio databases consisting of data which we have collected in more than 20 years of operating history. Credit scoring is used to differentiate credit applications and to statistically rank-order credit risk in terms of expected default rates, which enables us to evaluate credit applications for approval and tailor contract pricing and structure. In addition to our proprietary credit scoring system, we utilize other underwriting guidelines in our underwriting process to help us further evaluate the credit risk of our consumer financing activities.
Our servicing activities include collecting and processing customer payments, responding to customer inquiries, initiating contact with customers who are delinquent, maintaining the security interests in the financed vehicles, monitoring physical damage insurance coverage of the financed vehicles, and arranging for the repossession of financed vehicles, liquidation of collateral and pursuit of deficiencies when appropriate. Our activities also include managing an end-of-term process for consumers purchasing or returning leased vehicles.
Commercial
Our commercial lending offeringsproducts are offered primarily to GM-franchised dealers and their affiliates and consist predominantly of loans to finance the purchase of vehicle inventory, also known as wholesale or floorplan financing, as well as dealer loans, which are loans to finance improvements to dealership facilities, to provide working capital and to purchase and/or finance dealership real estate. Other commercial products offered in the International Segment include fleet financing and storage center financing.
We establish new and used vehicle inventory credit lines at the time of dealer account acquisition, subject to revision as part of subsequent annual credit reviews. The maximum availability on these credit lines is based upon a dealer’s monthly vehicle rate of travel (e.g., sales rate) and financial strength at the time of account acquisition or annual review, as applicable. At times, a dealer’s vehicle inventory needs may exceed its credit line availability for a number of reasons, such as seasonal factory build-out, planned marketing events, reductions in sales, or other business and seasonal factors. When a dealer's needs require that its outstanding balance be allowed to exceed the maximum availability under its credit line(s), we may accept a temporary overline situation, reallocate credit amounts among existing lines, temporarily or permanently increase the dealer's credit line, or suspend

3123


Eachthe dealer's credit lines. The action we take depends on communications with the dealer, is assigned a risk rating based on various factors, including, but not limited to, collateral analysis capital sufficiency, operating performance, financial outlook and credit and payment history, if available. The risk rating indicates the pricing for and guides the management of the account. We monitordealer's financial condition and the level of borrowing under each dealer's account daily. Our commercial loan servicing activities include dealership customer service, account maintenance, exception processing, credit line monitoring and adjustment and insurance monitoring.
International Operations
Consumer
We primarily employ an indirect-to-consumer model similar to the one we use in the North America Segment. Our consumer lending programs focus on financing prime quality consumers purchasing new GM vehicles. In manyunderlying cause of the countries in which we operate, we also offer financial leases and a lease/retail hybrid product that includes a balloon payment at expiration, at which time the consumer may elect to make the payment, refinance or return the vehicle. We also offer finance-related insurance products through third parties, such as credit life, gap and extended warranty coverage. We finance primarily new automobiles, although we also finance used automobiles. In most of the countries in which we operate, similar to our underwriting process in the North America Segment, we utilize a proprietary credit scoring system to differentiate consumer credit applications and to statistically rank-order credit risk in terms of expected default rates, which enables us to evaluate credit applications for approval and tailor loan and lease pricing and structure.
Our servicing activities include collecting and processing customer payments, responding to customer inquiries, initiating contact with customers who are delinquent, maintaining the security interest in the financed vehicle, monitoring physical damage insurance coverage of the financed vehicle, and arrangingneed for the repossession of financed vehicles, liquidation of collateral and pursuit of deficiencies when appropriate.
Commercial
Commercial products offered to dealer customers include new and used vehicle inventory financing, inventory insurance, working capital and capital improvement loans. Other commercial products include fleet financing and storage center financing. In addition, we provide training to dealer employees to help them maximize the value of these finance and insurance products. We utilize a proprietary underwriting system for commercial lending that has been refined through decades of experience in managing economic cycles. This process involves assigning a risk rating to each dealer based on our due diligence of various factors, including, but not limited to, collateral analysis, capital sufficiency, operating performance, financial outlook and credit and payment history, if available. The underwriting processes are performed in commercial lending centers located in Mexico, Brazil and Germany, the management of which operates independently of in-country sales and servicing operations. Our commercial loan servicing activities include dealership customer service, account maintenance and monitoring, exception processing, credit line monitoring and adjustment and insurance monitoring.overline.
Financing
We primarily finance our loan, lease and commercial origination volume through the use of our secured and unsecured bank lines,credit facilities, through public and private securitization transactions where such markets are developed, and through the issuance of senior notes and, to a lesser extentunsecured debt in Latin America, throughthe public markets including the issuance of commercial paper and other financing programs.
markets. We seek to fund our operations through local sources of funding to minimize currency and country risk. As such, the mix of funding sources varies from country to country, based on the characteristics of our receivablesearning assets and the relative development of debtthe capital and securitization markets in each country. Our Latin American operations are entirely funded locally. Our European operations obtain most of their funding from local sources, but also borrow funds from affiliated companies.
In addition to our bank lines and securitization programs, GM provides us with financial resources through a tax sharing agreement, which effectively defers up to $1.0 billion indeferred taxes from the tax years 2012 through 2014 that we would have otherwise bebeen required to pay to GM over time, andon the statutory tax payment due dates. GM also provides us with financial resources through a $1.0 billion unsecured intercompany revolving credit facility (the "Junior Subordinated Revolving Credit Facility").
We have the $600 million GM Related Party Credit Facility.
Additionally, we have a sub-limit of $4.0 billion availableability to borrow underup to $2.0 billion against each of GM's three-year $5.5 billion securedunsecured revolving credit facility.facilities (a three-year $5.0 billion facility and a five-year, $7.5 billion facility) subject to available capacity. Our borrowings under this facilityGM's facilities are limited by GM's ability to alsoborrow the entire amount available under the facilities. Therefore, we may be able to borrow up to $4.0 billion in total or may be unable to borrow depending on GM's borrowing activity. If we do borrow under the facility. If we borrow under this facility,these facilities, we expect such borrowings would be short-term in nature and, except in extraordinary circumstances, would not be used to fund our operating activities in the ordinary course of business. Neither we, nor any of our subsidiaries, guarantee any obligations under these facilities, and none of our or our subsidiaries' assets secure these facilities.


3224


RESULTS OF OPERATIONS
Three Months Ended June 30, 2014March 31, 2015 as compared to
Three Months Ended June 30, 2013March 31, 2014
The results of operations discussed below are inclusive of changes in the values of foreign currencies, primarily due to the appreciation of the U.S. Dollar against the Brazilian Real, the Euro, the British Pound, the Canadian Dollar and the Mexican Peso. In the three months ended March 31, 2015, average consumer finance receivables decreased $2.0 billion, average leased vehicles, net decreased $113 million and average commercial finance receivables decreased $769 million, compared to the average for the three months ended March 31, 2014 due to changes in foreign currency valuation.
Average Earning Assets:
Average earning assets were as follows (dollars in millions)millions, except where noted):
Three Months Ended June 30,  Three Months Ended March 31,  
2014 2013 2014 vs. 2013 Change2015 2014 2015 vs. 2014 Change
North America International Total North America International Total Amount %North America International Total North America International Total Amount %
Average consumer finance receivables$11,847
 $12,827
 $24,674
 $11,323
 $6,957
 $18,280
 $6,394
 35.0%$13,860
 $11,847
 $25,707
 $11,532
 $11,950
 $23,482
 $2,225
 9.5%
Average commercial finance receivables2,287
 4,755
 7,042
 1,059
 3,515
 4,574
 2,468
 54.0%3,140
 4,497
 7,637
 2,038
 4,674
 $6,712
 925
 13.8%
Average finance receivables14,134
 17,582
 31,716
 12,382
 10,472
 22,854
 8,862
 38.8%17,000
 16,344
 33,344
 13,570
 16,624
 30,194
 3,150
 10.4%
Average leased vehicles, net4,169
 1
 4,170
 2,410
 7
 2,417
 1,753
 72.5%7,825
 36
 7,861
 3,530
 2
 3,532
 4,329
 122.6%
Average earning assets$18,303
 $17,583
 $35,886
 $14,792
 $10,479
 $25,271
 $10,615
 42.0%$24,825
 $16,380
 $41,205
 $17,100
 $16,626
 $33,726
 $7,479
 22.2%
               
Consumer finance receivables purchased$2,273
 $1,805
 $4,078
 $1,364
 $2,048
 $3,412
 $666
 19.5%
Average new consumer loan size (in dollars)$24,081
 $12,248
 $16,870
 $21,424
 $14,648
 $16,771
 $99
 0.6%
Leased vehicles purchased$3,007
 $17
 $3,024
 $773
 N/A
 $773
 $2,251
 291.2%
Average new lease size (in dollars)$37,080
 $21,317
 $36,926
 $32,127
 N/A
 $32,127
 $4,799
 14.9%
In the North America Segment, averageAverage consumer finance receivables increased $524 million from June 30, 2013$2.2 due to June 30, 2014, primarily becausehigher loan originations exceededin the U.S., U.K., Brazil and Mexico markets offset by portfolio liquidations through payments and defaults. We purchased $1.5 billion and $1.4 billion ofIn addition, average consumer finance receivables fordecreased due to the three months ended June 30, 2014 and 2013. The average new consumer loan size increased to $22,929 foreffects of foreign currency movements, primarily in the three months ended June 30, 2014 from $21,796 forInternational Segment.
In the three months ended June 30, 2013. TheNorth America Segment, the average annual percentage rate for consumer finance receivables purchased during the three months ended June 30, 2014March 31, 2015 decreased to 12.3%9.9% from 13.1% for13.2% during the three months ended June 30, 2013, primarily due to pricing adjustments driven by the impact of subvention programs.
Inprior period. The increase in average consumer loan and lease size and decrease in average annual percentage rate in the North America Segment were both primarily due to higher volumes of new car originations, which typically are for higher amounts, and have lower contractual rates due to the rate subvention support provided by GM, as well as increased prime lending. In the International Segment, the decrease in average consumer loan and lease size is primarily due to the effect of foreign currency movements.
Average commercial finance receivables increased $1.2 billion from June 30, 2013 to June 30, 2014,$925 million was primarily due to the continued ramp-up in that business since the introduction of our commercial lending platform in April 2012 and dealer conquests and related origination growth in the North America Segment, in accordance with our business since that time.plan.
Average leased vehicles, net, increased $1.8$4.3 billion from June 30, 2013 due to June 30, 2014. We purchased $1.5 billion and $834 millionan increase of leased vehicles for the three months ended June 30, 2014 and 2013. The increase in leased vehicles purchased was a result of GM's overall increased market penetration in leases and a 38% increase in our share of GM's lease business.business in North America, primarily as a result of our exclusive lease subvention arrangement with GM, which was implemented on a brand-by-brand basis between February and April 2015.
The increase in average finance receivables in the International Segment is primarily due to the addition






25


Revenue:
Revenues were as follows (dollars in millions):
Three Months Ended June 30,  Three Months Ended March 31,  
2014 2013 2014 vs. 2013 Change2015 2014 2015 vs. 2014 Change
North America International Total North America International Total Amount %North America International Total North America International Total Amount %
Finance charge income:              
              
Consumer finance receivables$420
 $356
 $776
 $426
 $143
 $569
 $207
 36.4%$436
 $317
 $753
 $405
 $328
 $733
 $20
 2.7 %
Commercial finance receivables$19
 $87
 $106
 $9
 $69
 $78
 $28
 35.9%$22
 $79
 $101
 $15
 $82
 $97
 $4
 4.1 %
Leased vehicle income$237
 $1
 $238
 $134
 $2
 $136
 $102
 75.0%$429
 $2
 $431
 $199
 $1
 $200
 $231
 115.5 %
Other income$15
 $56
 $71
 $19
 $34
 $53
 $18
 34.0%$19
 $50
 $69
 $17
 $50
 $67
 $2
 3.0 %
Effective yield - consumer finance receivables12.8% 10.9% 11.9% 14.2% 11.1% 12.7% (0.8)% (5.6)%
Effective yield - commercial finance receivables2.8% 7.1% 5.4% 3.0% 7.1% 5.8% (0.4)% (13.3)%
In the North America Segment, finance charge income on consumer finance receivables was flatup slightly for the three months ended June 30, 2014,March 31, 2015, compared to the three months ended June 30, 2013. Increased finance charge income resulting fromMarch 31, 2014, due to the increase

33


growth in average consumer finance receivables wasthe portfolio, partially offset by a decrease in effective yield. The effective yield on our consumer finance receivables decreased to 14.2% for the three months ended June 30, 2014, from 15.1% for the three months ended June 30, 2013, primarily due to a decrease in the average annual percentage rate on new originations as well as a reduced yield impact from the accretion on the pre-acquisition portfolio.originations. The effective yield represents finance charges and fees recorded in earnings during the period as a percentage of average consumer finance receivables. The effective yield, as a percentage of average consumer finance receivables, is higher than the contractual rates of our auto finance contracts primarily because the effective yield includes, in addition to the contractual rates and fees, the impact of excess cash flows transferred from non-accretable difference to accretable yield, which impact has decreased over time withrate subvention provided by GM.
The increase in leased vehicle income reflects the amortizationincrease in the size of the pre-acquisitionleased asset portfolio. The difference between the effective yield and the contractual rates will continue to decrease as the pre-acquisition portfolio amortizes.
The increase in commercial finance charge income reflects the increase in the average commercial finance receivables portfolio.
Leased vehicle income increased by 75.0% to $238 million for the three months ended June 30, 2014 from $136 million for the three months ended June 30, 2013, due to the increased size of the leased asset portfolio.
The increase in revenue for the International Segment is primarily due to the additionincrease in the size of the consumer and commercial receivables portfoliosreceivable portfolio, partially offset by a decrease in Brazil, which were acquired October 1, 2013.the effective yield on commercial finance receivables.
Costs and Expenses:
Costs and expenses were as follows (dollars in millions):
Three Months Ended June 30,  Three Months Ended March 31,  
2014 2013 2014 vs. 2013 Change2015 2014 2015 vs. 2014 Change
North America International Total North America International Total Amount%North America International Total North America International Total Amount %
Operating expenses$133
 $147
 $280
 $104
 $87
 $191
 $89
46.6 %$161
 $145
 $306
 $118
 $151
 $269
 $37
 13.8 %
Leased vehicle expenses$177
 $2
 $179
 $99
 $2
 $101
 $78
77.2 %$326
 $1
 $327
 $156
 $
 $156
 $171
 109.6 %
Provision for loan losses$90
 $23
 $113
 $81
 $19
 $100
 $13
13.0 %$118
 $37
 $155
 $103
 $32
 $135
 $20
 14.8 %
Interest expense(a)
$128
 $226
 $354
 $104
 $60
 $164
 $190
115.9 %$186
 $194
 $380
 $120
 $195
 $315
 $65
 20.6 %
Acquisition and integration expenses$
 $
 $
 $
 $16
 $16
 $(16)(100.0)%
Average debt outstanding$24,469
 $13,614
 $38,083
 $16,660
 $12,630
 $29,290
 $8,793
 30.0 %
Effective rate of interest on debt3.1% 5.8% 4.0% 2.9% 6.3% 4.4% (0.4)% (9.1)%
_________________        
(a)Amounts do not reflect allocation of senior note interest expense, and therefore do not agree with amounts presented in Note 12 - "Segment Reporting" in our consolidated financial statements in this Form 10-Q.
(a) Amounts do not reflect allocation of senior note interest expense, and therefore do not agree with amounts presented in Note 13 - "Segment Reporting" in our condensed consolidated financial statements in this Form 10-Q.
Operating Expenses
In the North America Segment,The increase in operating expenses increased by $29 million for the three months ended June 30, 2014, compared to the three months ended June 30, 2013, primarily duerelates to the growth in earning assets.assets and investments to support the prime lending program and enhance lease origination and servicing capabilities in the North America Segment. Our operating expenses are predominantly related to personnel costs that include base salary and wages, performance incentives and benefits as well as related employment taxes. These expenses represented 76.4% and 76.8% of total operating expenses for the three months ended June 30, 2014 and 2013.
The increase in operating expenses for the International Segment is primarily due to the acquisition of the operations in Brazil, which were acquired October 1, 2013.
Operating expenses as an annualized percentage of average earning assets were 3.1%3.0% and 3.2% for the three months ended June 30, 2014March 31, 2015 and 2013.2014.

26


Leased Vehicle Expenses
Leased vehicle expenses, which are primarily comprised of depreciation of leased vehicles, increased by 77.2% to $179 million for the three months ended June 30, 2014, from $101 million for the three months ended June 30, 2013, due to the increased size of the leased asset portfolio in the North America Segment. Our leased vehicle expenses are predominantly related to depreciation of leased assets.

34


Provision for Loan lossesLosses
Provisions for consumer finance receivable loan losses are charged to income to bring our allowance for loan losses to a level which management considers adequate to absorb probable credit losses inherent in the consumer finance receivables portfolio. The provision for loan losses recorded for the three months ended June 30, 2014 and 2013 reflects inherent losses on receivables originated during these periods and changes in the amount of inherent losses on post-acquisition finance receivables originated in prior periods. In the North America Segment, the provision for consumer loan losses increased primarily due to $89 million for the three months ended June 30, 2014 from $80 million for the three months ended June 30, 2013, as a result of the increasegrowth in the size of the consumer finance receivables portfolio. As an annualized percentage of average post-acquisition consumer finance receivables, the provision for loan losses was 3.2% and 3.3%2.5% for the three months ended June 30, 2014March 31, 2015 and 2013.
2014. The provision for commercial loan losses on commercial finance receivables in the North America Segment was $1 millioninsignificant for the three months ended June 30, 2014March 31, 2015 and 2013.2014.
TheInterest Expense
Interest expense increased primarily due to an increase in the provision for loan losses for the International Segment is primarily due to the acquisition of the operations in Brazil, which were acquired October 1, 2013, partially offset by improved credit performance in Europe.
Interest Expense
In the North America Segment, interest expense increased to $128 million for the three months ended June 30, 2014, from $104 million for the three months ended June 30, 2013. The increase was primarily as a result of an increase in average debt outstanding to $17.9 billion for the three months ended June 30, 2014,resulting from$14.3 billion for the three months ended June 30, 2013. The increase in debt was due to funding requirements for growth in the loan and lease portfolio, as well as forportfolios, partially offset by a decrease in the acquisition of the international operations. The effective rate of interest on our debt was 2.9% for the three months ended June 30, 2014 and 2013.
The increase in interest expense for the International Segment is primarily due to the acquisition of the operations in Brazil, which were acquired October 1, 2013.
Acquisition and Integration Expenses
The acquisition and integration expenses for the three months ended June 30, 2013 represent advisory, legal and professional fees and other costs related to the acquisition of the international operations.
Taxes
Our consolidated effective income tax rate was 34.0% and 32.7% for the three months ended June 30, 2014 and 2013.
Other Comprehensive Income
Foreign Currency Translation Adjustment
Consolidated foreign currency translation adjustments of $49 million and $(59) million for three months ended June 30, 2014 and 2013, were included in other comprehensive income. Most of the entities acquired with the international operations acquisition use functional currencies other than the U.S. dollar. The translation adjustment is due to the change in the values of our international currency-denominated assets and liabilities resulting from changes in the value of the U.S. dollar in relation to international currencies for the three months ended June 30, 2014 and 2013.


35


Six Months Ended June 30, 2014as compared to
Six Months Ended June 30, 2013
Average Earning Assets:
Average earning assets were as follows (dollars in millions):
 Six Months Ended June 30,  
 2014 2013 2014 vs. 2013 Change
 North America International Total North America International Total Amount %
Average consumer finance receivables$11,691
 $12,406
 $24,097
 $11,200
 $3,615
 $14,815
 $9,282
 62.7%
Average commercial finance receivables2,158
 4,715
 6,873
 882
 1,725
 2,607
 4,266
 163.6%
Average finance receivables13,849
 17,121
 30,970
 12,082
 5,340
 17,422
 13,548
 77.8%
Average leased vehicles, net3,867
 2
 3,869
 2,150
 4
 2,154
 1,715
 79.6%
Average earning assets$17,716
 $17,123
 $34,839
 $14,232
 $5,344
 $19,576
 $15,263
 78.0%
In the North America Segment, average consumer finance receivables increased $491 million from June 30, 2013 to June 30, 2014, primarily because loan originations exceeded portfolio liquidation through payments and defaults. We purchased $2.9 billion and $2.7 billion of consumer finance receivables in the North America Segment for the six months ended June 30, 2014 and 2013. The average new consumer loan size increased to $22,200 for the six months ended June 30, 2014 from $21,429 for the six months ended June 30, 2013. The average annual percentage rate for consumer finance receivables purchased during the six months ended June 30, 2014 decreased to 12.7% from 13.4% for the six months ended June 30, 2013, primarily due to pricing adjustments driven by the impact of subvention programs.
In the North America Segment, average commercial finance receivables increased $1.3 billion from June 30, 2013 to June 30, 2014, primarily due to the continued ramp-up in business since the introduction of our commercial lending platform in April 2012 and dealer conquests and related origination growth in the business since that time.
Average leased vehicles, net, increased $1.7 billion from June 30, 2013 to June 30, 2014. We purchased $2.3 billion and $1.5 billion of leased vehicles for the six months ended June 30, 2014 and 2013. The increase in leased vehicles purchased was a result of GM's overall increased market penetration in leases and an increase of 8% in our share of GM's business.
The increase in the average earning assets for the International Segment is primarily due to the acquisition of the majority of the international operations on April 1, 2013, and the operations in Brazil, which were acquired October 1, 2013.
Revenue:
Revenues were as follows (dollars in millions):
 Six Months Ended June 30,  
 2014 2013 2014 vs. 2013 Change
 North America International Total North America International Total Amount %
Finance charge income:               
Consumer finance receivables$825
 $684
 $1,509
 $835
 $143
 $978
 $531
 54.3%
Commercial finance receivables$34
 $169
 $203
 15
 69
 $84
 $119
 141.7%
Leased vehicle income$436
 $2
 $438
 241
 2
 $243
 $195
 80.2%
Other income$32
 $106
 $138
 37
 34
 $71
 $67
 94.4%
In the North America Segment, finance charge income on consumer finance receivables was flat for the six months ended June 30, 2014, compared to the six months ended June 30, 2013. Increased finance charge income resulting from the increase in average consumer finance receivables was offset by a decrease in effective yield. The effective yield on our consumer finance receivables decreased to 14.2% for the six months ended June 30, 2014, from 15.0% for the six months ended June 30, 2013, primarily due to a decrease in the average annual percentage rate on new originations as well as a reduced yield impact from the

36


accretion on the pre-acquisition portfolio. The effective yield represents finance charges and fees recorded in earnings during the period as a percentage of average consumer finance receivables. The effective yield, as a percentage of average consumer finance receivables, is higher than the contractual rates of our auto finance contracts because the effective yield includes, in addition to the contractual rates and fees, the impact of excess cash flows transferred from non-accretable difference to accretable yield, which impact has decreased over time with the amortization of the pre-acquisition portfolio. The difference between the effective yield and the contractual rates will continue to decrease as the pre-acquisition portfolio amortizes.
The increase in commercial finance charge income reflects the increase in the average commercial finance receivables portfolio.
Leased vehicle income increased by 80.2% to $438 million for the six months ended June 30, 2014 from $243 million for the six months ended June 30, 2013, due to the increased size of the leased asset portfolio.
The increase in revenue for the International Segment is primarily due to the acquisition of the majority of the international operations on April 1, 2013, and the operations in Brazil, which were acquired October 1, 2013.
Costs and Expenses:
Costs and expenses were as follows (dollars in millions):
 Six Months Ended June 30,  
 2014 2013 2014 vs. 2013 Change
 North America International Total North America International Total Amount%
Operating expenses$251
 $298
 $549
 $212
 $87
 $299
 $250
83.6 %
Leased vehicle expenses$333
 $2
 $335
 179
 2
 $181
 $154
85.1 %
Provision for loan losses$193
 $55
 $248
 175
 19
 $194
 $54
27.8 %
Interest expense(a)
$248
 $421
 $669
 186
 60
 $246
 $423
172.0 %
Acquisition and integration expenses$
 $
 $
 
 22
 $22
 $(22)(100.0)%
_________________ 
(a)Amounts do not reflect allocation of senior note interest expense, and therefore do not agree with amounts presented in Note 12 - "Segment Reporting" in our consolidated financial statements in this Form 10-Q.
Operating Expenses
In the North America Segment, operating expenses increased by $39 million for the six months ended June 30, 2014, compared to the six months ended June 30, 2013, primarily due to the growth in earning assets. Our operating expenses are predominantly related to personnel costs that include base salary and wages, performance incentives and benefits as well as related employment taxes. These expenses represented 75.8% and 72.8% of total operating expenses for the six months ended June 30, 2014 and 2013.
The increase in operating expenses for the International Segment is primarily due to the acquisition of the majority of the international operations on April 1, 2013, and the operations in Brazil, which were acquired October 1, 2013.
Operating expenses as an annualized percentage of average earning assets were 3.2% for the six months ended June 30, 2014 compared to 3.1% for the six months ended June 30, 2013.
Leased Vehicle Expenses
Leased vehicle expenses increased by 85.1% to $335 million for the six months ended June 30, 2014, from $181 million for the six months ended June 30, 2013, due to the increased size of the leased asset portfolio. Our leased vehicle expenses are predominantly related to depreciation of leased assets.
Provision for Loan losses
Provisions for consumer finance receivable loan losses are charged to income to bring our allowance for loan losses to a level which management considers adequate to absorb probable credit losses inherent in the consumer finance receivables portfolio. The provision for loan losses recorded for the six months ended June 30, 2014 and 2013 reflects inherent losses on receivables originated during these periods and changes in the amount of inherent losses on post-acquisition finance receivables originated in prior periods. In the North America Segment, the provision for consumer loan losses increased to $193 million for the six months ended June 30, 2014 from $169 million for the six months ended June 30, 2013, as a result of the increase in the size of the consumer finance receivables portfolio. As an annualized percentage of average post-acquisition consumer finance receivables, the provision for loan losses was 3.5% and 3.6% for the six months ended June 30, 2014 and 2013.

37


The provision for loan losses on commercial finance receivables was insignificant for the six months ended June 30, 2014 and $6 million for the six months ended June 30, 2013.
The increase in the provision for loan losses for the International Segment is primarily due to the acquisition of the majority of the international operations on April 1, 2013, and the operations in Brazil, which were acquired October 1, 2013.
Interest Expense
In the North America Segment, interest expense increased to $248 million for the six months ended June 30, 2014, from $186 million for the six months ended June 30, 2013. The increase was primarily as a result of an increase in average debt outstanding to $17.3 billion for the six months ended June 30, 2014, from $12.8 billion for the six months ended June 30, 2013. The increase in debt was due to funding requirements for growth in the loan and lease portfolio, as well as for the acquisition of the international operations. The effective rate of interest on our debt was 2.9% for the six months ended June 30, 2014 and 2013.
The increase in interest expense for the International Segment is primarily due to the acquisition of the majority of the international operations on April 1, 2013, and the operations in Brazil, which were acquired October 1, 2013.
Acquisition and Integration Expenses
The acquisition and integration expenses for the six months ended June 30, 2013 represent advisory, legal and professional fees and other costs related to the acquisition of the international operations.debt.
Taxes
Our consolidated effective income tax rate was 34.3%29.9% and 34.6%34.7% for the sixthree months ended June 30, 2014March 31, 2015 and 2013.2014. The decrease in the effective income tax rate is primarily related to our equity investment in SAIC-GMAC, which was acquired in January 2015.
Other Comprehensive Income
Foreign Currency Translation Adjustment
Consolidated foreign currency translation adjustments of $54 million and $(65) million for six months ended June 30, 2014 and 2013, were included in other comprehensive income.(loss) income were $(347) million and $5 million for three months ended March 31, 2015 and 2014. Most of the entities acquired with the international operations acquisition use functional currencies other than the U.S. dollar. The translation adjustment is due to the changeDollar. Translation adjustments result from changes in the values of our international currency-denominated assets and liabilities resulting from changes inas the value of the U.S. dollarDollar changes in relation to international currencies forcurrencies. The change in other comprehensive (loss) income is primarily due to decreases in the six months ended June 30, 2014values of the Brazilian Real, the Euro, the British Pound, the Mexican Peso and 2013.the Canadian Dollar in relation to the U.S Dollar.


27


CREDIT QUALITY
Consumer Finance Receivables
In the North America Segment, we primarily provide financing in relatively high-risk markets, and therefore anticipate a corresponding high level of delinquencies and charge-offs. In the International Segment, the consumer financing we provide is generally to borrowers with prime credit and considered lower-risk; therefore, we expect correspondingly lower levels of delinquencies and charge-offs than in our North America Segment.

38


The following tables present certain data related to the consumer finance receivables portfolio (dollars in millions, except where noted):
 June 30, 2014 December 31, 2013
 North America International Total North America International Total
Pre-acquisition consumer finance receivables - outstanding balance$584
 $255
 $839
 $931
 $363
 $1,294
Pre-acquisition consumer finance receivables - carrying value$510
 $245
 $755
 $826
 $348
 $1,174
Post-acquisition consumer finance receivables, net of fees11,394
 12,897
 24,291
 10,562
 11,394
 21,956
 11,904
 13,142
 25,046
 11,388
 11,742
 23,130
Less: allowance for loan losses(515) (60) (575) (468) (29) (497)
Total consumer finance receivables, net$11,389
 $13,082
 $24,471
 $10,920
 $11,713
 $22,633
Number of outstanding contracts737,660
 1,345,869
 2,083,529
 725,797
 1,224,845
 1,950,642
Average amount of outstanding contracts (in dollars)(a)$16,238

$9,772

$12,061

$15,835
 $9,599
 $11,919
Allowance for loan losses as a percentage of post-acquisition consumer finance receivables, net of fees4.5%
0.5%
2.4%
4.4% 0.3% 2.3%
 March 31, 2015 December 31, 2014
 North America International Total North America International Total
Consumer finance receivables, net of fees$14,294
 $11,297
 $25,591
 $13,361
 $12,262
 $25,623
Less: allowance for loan losses(605) (87) (692) (577) (78) (655)
Consumer finance receivables, net$13,689
 $11,210
 $24,899
 $12,784
 $12,184
 $24,968
Number of outstanding contracts828,147
 1,507,627
 2,335,774
 788,833
 1,458,362
 2,247,195
Average amount of outstanding contracts (in dollars)(a)
$17,260

$7,493

$10,956

$16,999
 $8,409
 $11,424
Allowance for loan losses as a percentage of consumer finance receivables, net of fees4.2%
0.8%
2.7%
4.4% 0.6% 2.6%
_________________ 
(a)
Average amount of outstanding contract consists of pre-acquisition consumer finance receivables - outstanding balance and post-acquisition consumer finance receivables, net of fees, divided by number of outstanding contracts. The decrease in the average amount of outstanding contracts in the International Segment is primarily due to changes in foreign exchange rates.
Our consumer finance receivables consist of smaller-balance, homogeneous loans, divided into two primary portfolios: finance receivables originated in the North America Segment and finance receivables originated in the International Segment, which are carried at amortized cost, net of allowance for loan losses. Each of these portfolios is further divided into pools based on common risk characteristics, such as internal credit score, origination period, delinquent status, and geography. An internal credit score, of which FICO is an input, is created by using algorithms or statistical models contained in an origination scorecard.  The scorecard is used to evaluate a consumer’s ability to pay based on statistical modeling of their prior credit usage, structure of the loan and other information.  The output of the scorecard rank-orders consumers from those that are most likely to pay to those that are least likely to pay. By further dividing the portfolio into pools based on internal credit scores we are better able to distinguish expected credit performance for different credit risks. These pools are collectively evaluated for impairment based on a statistical calculation, which is supplemented by management judgment. The allowance is aggregated for each of the portfolio pools. Provisions for loan losses are charged to operations in amounts sufficient to maintain the allowance for loan losses at levels considered adequate to cover probable losses incurred in our finance receivables.
The allowance for loan losses for the North America Segment as a percentage of post-acquisition consumer finance receivables, net of fees, has increased duewas consistent with the level at December 31, 2014. The International Segment's allowance continues to normalizing credit trendsgrow with moderately higher defaults and delinquencies. The allowance for the acquired international receivables was eliminated in acquisition accounting at the acquisition dates. As a result, the allowance at June 30, 2014 for the International Segment represents an estimateportfolio of losses inherent in only the receivables originated since the acquisition dates. The allowance for losses for the International Segment will grow over time as the post-acquisition loan balance grows. However, the allowance for losses for the International Segment is expected to be much less than that for the North America Segment due to the higher credit qualityacquisition.

28


Delinquency
The following is a summary of the contractual amounts of delinquent consumer finance receivables, which is not materially different than recorded investment that are (i) more than 30 days delinquent, but not yet in repossession and (ii) in repossession, but not yet charged off (dollars in millions):

  June 30,
  2014 2013
  North America International Total North America International Total
  Amount Amount Amount Percent of Contractual Amount Due Amount Amount Amount Percent of Contractual Amount Due
31 - 60 days $756
 $130
 $886
 3.5% $601
 $44
 $645
 3.4%
Greater than 60 days 255
 133
 388
 1.6
 208
 45
 253
 1.4
  1,011
 263
 1,274
 5.1
 809
 89
 898
 4.8
In repossession 35
 5
 40
 0.1
 31
 4
 35
 0.2
  $1,046
 $268
 $1,314
 5.2% $840
 $93
 $933
 5.0%

An account is considered delinquent if a substantial portion of a scheduled payment has not been received by the date such payment was contractually due. Delinquencies may vary from period to period based upon the average credit scores in the portfolio which reflects our underwriting strategies and risk tolerance, the average age or seasoning of the portfolio, seasonality within the

39


calendar year and economic factors. Our target customer base in the North America Segment is predominantly sub-prime; therefore, a relatively high percentage of accounts become delinquent at some point in the life of a loan and there is a high rate of account movement between current and delinquent status in the portfolio.
Delinquencies inthe North America Segment increased to 8.4% at June 30, 2014 from 7.1% at June 30, 2013, consistent with a greater concentration of loans with lower average credit scores at June 30, 2014 and normalizing credit trends. Our customer base in the International Segment is primarily prime; therefore, delinquency levels are much lower, with 2.0% and 1.2% in delinquencies at June 30, 2014 and 2013. The increase in delinquencies from June 30, 2013 is due to the acquisition of Brazil.
  Three Months Ended March 31,
  2015 2014
  North America International Total North America International Total
  Amount Amount Amount Percent of Contractual Amount Due Amount Amount Amount Percent of Contractual Amount Due
31 - 60 days $767
 $113
 $880
 3.4% $579
 $138
 $717
 3.1%
Greater than 60 days 259
 98
 357
 1.4
 210
 126
 336
 1.4
  1,026
 211
 1,237
 4.8
 789
 264
 1,053
 4.5
In repossession 34
 8
 42
 0.2
 33
 5
 38
 0.1
  $1,060
 $219
 $1,279
 5.0% $822
 $269
 $1,091
 4.6%
Deferrals
Due to the lower-risk nature of the consumer base in the International Segment, it is unnecessary to offer deferrals as frequently as in the North America Segment, which leads to an immaterial overall level of deferrals in the International Segment. Therefore, the following information regarding deferrals is presented for consumer finance receivables in the North America Segment only.
In accordance with our policies and guidelines, we, at times, offer payment deferrals to consumers, whereby the consumer is allowed to move up to two delinquent payments to the end of the loan generally by paying a fee (approximately the interest portion of the payment deferred, except where state law provides for a lesser amount). Our policies and guidelines limit the number and frequency of deferments that may be granted. Additionally, we generally limit the granting of deferments on new accounts until a requisite number of payments have been received.
Due to the nature of our consumer base in the North America Segment and policies and guidelines of the deferral program, which policies and guidelines have not changed materially in several years, approximately 50% to 60% of accounts historically comprising the consumer finance receivables in the North America Segment receive a deferral at some point in the life of the account.
An account for which all delinquent payments are deferred or paid in a deferment transaction is classified as current at the time the deferment is granted and therefore is not included as a delinquent account. Thereafter, such account is aged based on the timely payment of future installments in the same manner as any other account.
Contracts receiving a payment deferral as an average quarterly percentage of average consumer finance receivables outstanding in the North America Segment were 6.3%5.5% and 5.8% for the three months ended June 30,March 31, 2015 and 2014. Refer to our Annual Report on Form 10-K for the year ended December 31, 2014 and 2013 and 6.1% for six months ended June 30, 2014 and 2013.further discussion of deferrals.
The following is a summary of deferrals in the North America Segment as a percentage of consumer finance receivables outstanding:
 June 30, 2014
December 31, 2013
Never deferred75.1% 74.7%
Deferred:   
1-2 times21.0
 21.6
3-4 times3.9
 3.7
Total deferred24.9
 25.3
Total100.0% 100.0%
We evaluate the results of our deferment strategies based upon the amount of cash installments that are collected on accounts after they have been deferred versus the extent to which the collateral underlying the deferred accounts has depreciated over the same period of time. Based on this evaluation, we believe that payment deferrals granted according to our policies and guidelines are an effective portfolio management technique and result in higher ultimate cash collections from the portfolio.
Changes in deferment levels do not have a direct impact on the ultimate amount of consumer finance receivables charged off by us. However, the timing of a charge-off may be affected if the previously deferred account ultimately results in a charge-off. To the extent that deferrals impact the ultimate timing of when an account is charged off, historical charge-off ratios, loss confirmation periods and cash flow forecasts for loans classified as TDRs used in the determination of the adequacy of our allowance for loan losses are also impacted. Increased use of deferrals may result in a lengthening of the loss confirmation period, which would increase expectations of credit losses inherent in the portfolio and therefore increase the allowance for loan losses and related provision for loan losses. Changes in these ratios and periods are considered in determining the appropriate level of allowance for loan losses and related provision for loan losses.
 March 31, 2015
December 31, 2014
Never deferred77.2% 76.1%
Deferred:   
1-2 times18.8
 19.8
3-4 times4.0
 4.1
Total deferred22.8
 23.9
Total100.0% 100.0%

4029


Troubled Debt Restructurings
See Note 23 - "Finance Receivables" to our condensed consolidated financial statements in this Form 10-Q for further discussion of TDRs.
Credit Losses - non-U.S. GAAP measure
We analyze portfoliocredit performance of both the pre- and post-acquisition finance receivables portfolios on aour combined basis.portfolio, which includes loans acquired with deteriorated credit quality. This information allows us and investors the ability to analyze credit loss trends in the combined portfolio. Additionally, information on credit losses, on a combined basis, facilitates comparisons of current and historical results.
Theresults.The following is a reconciliation of charge-offs on the post-acquisition portfolio to credit losses on the combined portfolio (in millions):
Three Months Ended June 30,Three Months Ended March 31,
2014 20132015 2014
North America(a)
 International Total 
North America(a)
 International TotalNorth America International Total 
North America(a)
 International Total
Charge-offs$157
 $34
 $191
 $116
 $
 $116
$200
 $34
 $234
 $192
 $32
 $224
Adjustments to reflect write-offs of the contractual amounts on the pre-acquisition portfolio15
 2
 17
 36
 5
 41
Adjustments to reflect write-offs of the contractual amounts on loans acquired with deteriorated credit quality7
 1
 8
 24
 3
 27
Total credit losses$172
 $36
 $208
 $152
 $5
 $157
$207
 $35
 $242
 $216
 $35
 $251
_________________ 
(a)
Total credit losses in the North America Segment is comprised of the sum of repossession credit losses and mandatory credit losses.

 Six Months Ended June 30,
 2014 2013
 
North America(a)
 International Total 
North America(a)
 International Total
Charge-offs$349
 $66
 $415
 $248
 $
 $248
Adjustments to reflect write-offs of the contractual amounts on the pre-acquisition portfolio39
 5
 44
 89
 5
 94
Total credit losses$388
 $71
 $459
 $337
 $5
 $342
_________________ 
(a)Total credit losses in the North America Segment is comprised of the sum of repossession credit losses and mandatory credit losses.
The following table presents credit loss data (which includes charge-offs on the post-acquisition portfolio and write-offs of contractual amounts on the pre-acquisition portfolios)loans acquired with deteriorated credit quality) with respect to our consumer finance receivables portfolio (dollars in millions): 
 Three Months Ended June 30,
 2014 2013
 North America 
International(a)
 Total North America 
International(a)
 Total
Repossession credit losses$170
 $36
 $206
 $151
 $5
 $156
Less: recoveries(105) (16) (121) (94) 
 (94)
Mandatory credit losses(b)
2
 
 2
 1
 
 1
Net credit losses$67
 $20
 $87
 $58

$5
 $63
Net annualized credit losses as a percentage of average consumer finance receivables(c)
2.3% 0.6% 1.4% 2.1% 0.3% 1.4%
Recoveries as a percentage of gross repossession credit losses61.5%     62.2%    



41


Six Months Ended June 30,Three Months Ended March 31,
2014 20132015 2014
North America 
International(a)
 Total North America 
International(a)
 TotalNorth America 
International(a)
 Total North America 
International(a)
 Total
Repossession credit losses$387
 $71
 $458
 $339
 $5
 $344
Credit losses$207
 $35
 $242
 $216
 $35
 $251
Less: recoveries(233) (33) (266) (208) 
 (208)(119) (12) (131) (128) (17) (145)
Mandatory credit losses(b)
1
 
 1
 (2) 
 (2)
Net credit losses$155
 $38
 $193
 $129
 $5
 $134
$88
 $23
 $111
 $88
 $18
 $106
Net annualized credit losses as a percentage of average consumer finance receivables(c)
2.7% 0.6% 1.6% 2.3% 0.3% 1.8%
Net annualized credit losses as a percentage of average consumer finance receivables2.6% 0.8% 1.8% 3.1% 0.6% 1.8%
Recoveries as a percentage of gross repossession credit losses60.1%     61.2%    57.7%     59.1%    
_________________ 
(a)Repossession creditCredit losses for the International Segment represent the write-down of defaulted receivables to net realizable value. As a result, a calculation of recoveries as a percentage of gross repossession credit losses is not meaningful.
(b)Mandatory credit losses represent accounts 120 days delinquent in the post-acquisition portfolio that are charged off in full, with no recovery amounts realized at time of charge-off, net of any subsequent recoveries as well as the net write-down of consumer finance receivables in repossession to the net realizable value of the repossessed vehicle when the repossessed vehicle is legally available for sale.
(c)Average consumer finance receivables are defined as the average receivable balance excluding the carrying value adjustment.
Net credit losses as a percentage of average consumer finance receivables outstanding may vary from period to period based upon the average credit scores in the portfolio which reflects our underwriting strategies and risk tolerance, the average age or seasoning of the portfolio and economic conditions.
Commercial Finance Receivables
The following table presents certain data related to the commercial finance receivables portfolio (dollars in millions):
June 30, 2014 December 31, 2013March 31, 2015 December 31, 2014
North America International Total North America International TotalNorth America International Total North America International Total
Commercial finance receivables, net of fees$2,373
 $4,741
 $7,114
 $1,975
 $4,725
 $6,700
$3,260
 $4,347
 $7,607
 $3,180
 $4,892
 $8,072
Less: allowance for loan losses(17) (23) (40) (17) (34) (51)(20) (16) (36) (21) (19) (40)
Total commercial finance receivables, net$2,356
 $4,718
 $7,074
 $1,958
 $4,691
 $6,649
$3,240
 $4,331
 $7,571
 $3,159
 $4,873
 $8,032
Number of dealers367
 2,241
 2,608
 309
 2,646
 2,955
530
 2,129
 2,659
 489
 2,147
 2,636
Average carrying amount per dealer$6
 $2
 $3
 $6
 $2
 $2
$6

$2

$3

$6
 $2
 $3
Allowance for loan losses as a percentage of commercial finance receivables, net of fees0.7% 0.5% 0.6% 0.9% 0.7% 0.8%0.6% 0.4% 0.5% 0.7% 0.4% 0.5%
Commercial finance receivables are assessed for impairment and any required allowance for credit losses is recorded based on the present value of the expected future cash flows of the receivable discounted at the loan's original effective interest rate. For receivables where foreclosure is probable, the fair value of the collateral is used to estimate the specific impairment. At June 30, 2014 and December 31, 2013, there were no outstanding commercial finance receivables classified as TDRs.
There were no charge-offs of commercial finance receivables for the three or six months ended June 30, 2014March 31, 2015 and 2013.2014. At June 30, 2014March 31, 2015 and December 31, 2013, 99.8%2014 substantially all of our commercial finance receivables were current with respect to payment status.status and none were classified as TDRs.

30


Leased Vehicles
At June 30,March 31, 2015 and 2014, 98.9% and 2013, 98.3% and 99.2%98.8% of our leases were current with respect to payment status. Leased vehicles returned as a result of a default were $13increased to $21 million and $5 million for the three months ended June 30, 2014 and 2013 and $24 million and $9March 31, 2015 from $11 million for the sixthree months ended June 30,March 31, 2014, and 2013.mainly due to the increase in size of the lease portfolio.

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LIQUIDITY AND CAPITAL RESOURCES
General
Our primary sources of cash are finance charge income, leasing income, servicing fees, net distributions from secured debt facilities, including securitizations, secured and unsecured borrowings net proceeds from senior notes transactions and collections and recoveries on finance receivables. Our primary uses of cash are purchases of consumer finance receivables and leased vehicles, the funding of commercial finance receivables, funding credit enhancement requirements in connection with securitizations and secured facilities, repayment of secured and unsecured debt, operating expenses, interest costs capital expenditures and business acquisitions.
We used cash of $6.8 billion and $3.8 billion for the purchase of consumer finance receivables for the six months ended June 30, 2014 and 2013. We used cash of $1.9 billion and $1.2 billion for the purchase of leased vehicles for the six months ended June 30, 2014 and 2013. We used cash of $0.3 billion and $0.4 billion for the funding of commercial finance receivables, net of collections, for the six months ended June 30, 2014 and 2013. We used cash of $3.5 billion for the acquisition of the international operations and repayment of debt to Ally Financial for the six months ended June 30, 2013.
In the North America Segment, our purchase and funding of finance receivables and lease vehicles were financed initially utilizing cash and borrowings on our secured and unsecured credit facilities and senior notes.facilities. Subsequently, our strategy is to obtain long-term financing for consumer and commercial finance receivables and leased vehicles through securitization transactions.transactions and the issuance of unsecured debt.
In the International Segment, our purchase and funding of finance receivables are typically financed with borrowings on secured and unsecured credit facilities. In certain countries where the debt capital and securitization markets are sufficiently developed, such as in Germany and the U.K., we obtain permanent financing through securitization transactions. In addition, we raise unsecured debt in the international capital markets through the issuance of notes under our Euro medium term note program.
Cash Flow
In the three months ended March 31, 2015, net cash provided by operating activities increased due primarily to an increase in leased vehicle income, partially offset by increased operating expenses and interest expense.
In the three months ended March 31, 2015, net cash used by investing activities increased due to an increase in purchases of consumer finance receivables, net of collections of $548 million, an increase in purchases of leased vehicles of $1.7 billion and cash used for the acquisition of the equity interest in SAIC-GMAC of $1.0 billion, partially offset by a decrease in net fundings of commercial receivables of $309 million.
In the three months ended March 31, 2015, net cash provided financing activities increased due primarily to a net increase in borrowings of $1.9 billion.
Liquidity
Our available liquidity consists of the following (in millions): 
June 30, 2014 December 31, 2013March 31, 2015 December 31, 2014
Cash and cash equivalents(a)
$1,412
 $1,074
Cash and cash equivalents(a)$2,121
 $2,974
Borrowing capacity on unpledged eligible assets1,803
 1,650
7,172
 4,808
Borrowing capacity on committed unsecured lines of credit990
 615
641
 558
Borrowing capacity on GM Related Party Credit Facility600
 600
Available liquidity$4,805
 $3,939
Borrowing capacity on Junior Subordinated Revolving Credit Facility1,000
 1,000
$10,934
 $9,340
_________________
(a)
Includes $681$650 million and $659$691 million in unrestricted cash outside of the U.S. at June 30, 2014March 31, 2015 and December 31, 2013.2014. This cash is considered to be indefinitely invested based on specific plans for reinvestment of these earnings.
The increase in available liquidity reflects an increase in cash and cash equivalents resulting fromis primarily due to the issuance of C$400 million$2.25 billion in senior notes in May 2014. In addition, borrowing capacity on committed unsecured lines of credit increased as a resultNorth America in the three months ended March 31, 2015, partially offset by $1.0 billion used for the acquisition of the addition of new facilities as well as lower utilization as of June 30, 2014.equity interest in SAIC-GMAC.
We have the ability to borrow up to $4.0$2.0 billion against each of GM's three-year $5.5 billion securedunsecured revolving credit facility.facilities (a three-year, $5.0 billion facility and a five-year $7.5 billion facility) subject to available capacity. Our borrowings under the facilityGM's facilities are limited by GM's ability to borrow the entire amount available under the facility.facilities. Therefore, we may be able to borrow up to $4.0 billion in total or may be unable to borrow depending on GM's borrowing activity. If we do borrow under the facilitythese facilities, we expect such borrowings would be short-term in nature and, except in extraordinary circumstances, would not be used to fund our operating activities in the ordinary course of business. Neither we, nor any of our subsidiaries, guarantee any obligations under this facility these facilities

31


and none of our subsidiaries' assets secure this facility.these facilities. Liquidity available to us under the GM unsecured revolving credit facilities is not included in the table above.
Credit Facilities
In the normal course of business, in addition to using our available cash, we utilize borrowings under our credit facilities, which may be secured or structured as securitizations, or may be unsecured, and we repay these borrowings as appropriate under our cash management strategy.

43


As of June 30, 2014,At March 31, 2015, credit facilities consist of the following (in millions):
Facility Type Facility Amount Advances Outstanding Facility Amount Advances Outstanding
Revolving consumer asset-secured facilities(a)
 $14,544
 $6,633
 $14,905
 $5,097
Revolving commercial asset-secured facilities(b)
 3,043
 1,984
 3,702
 1,614
Total secured $17,587
 $8,617
 $18,607
 $6,711
Unsecured committed facilities(c) 1,386
 396
 1,290
 649
Unsecured uncommitted facilities(c)(d)
 
 2,035
 
 1,810
Total unsecured $1,386
 $2,431
 $1,290
 $2,459
GM Related Party Credit Facility 600
 
Junior Subordinated Revolving Credit Facility 1,000
 
Total $19,573
 $11,048
 $20,897
 $9,170
Acquisition accounting discount   (27)   (8)
   $11,021
   $9,162
_________________
(a)Includes revolving credit facilities backed by consumer finance receivables and leases.
(b)Includes revolving credit facilities backed by loans to dealers for floorplan financing.
(c)Does not include $4.0 billion in liquidity available to us under GM's unsecured revolving credit facilities.
(d)The financial institutions providing the uncommitted facilities are not contractually obligated to advance funds under them; therefore, we do not include available capacity on these facilities in our liquidity. We had $352$369 million in unused borrowing capacity on these facilities as of June 30, 2014.at March 31, 2015.
See Note 57 - "Debt" to our condensed consolidated financial statements in thisour Form 10-Q10-K for further discussion of the terms of our revolving credit facilities.
We are required to hold funds in restricted cash accounts to provide additional collateral for borrowings under certain of our secured credit facilities. Additionally, our secured credit facilities contain various covenants requiring minimum financial ratios, asset quality and portfolio performance ratios (portfolio net loss and delinquency ratios, and pool level cumulative net loss ratios) as well as limits on deferment levels. Failure to meet any of these covenants could result in an event of default under these agreements. If an event of default occurs under these agreements, the lenders could elect to declare all amounts outstanding under these agreements to be immediately due and payable, enforce their interests against collateral pledged under these agreements, restrict our ability to obtain additional borrowings under these agreements and/or remove us as servicer. As of June 30, 2014, we were in compliance with all covenants related to our credit facilities.
Securitization Notes Payable
We seek toperiodically finance our consumer and commercial finance receivables and leases through public and private term securitization transactions, where the debt capital and securitization markets are sufficiently developed, such as in the U.S., Germany and the U.K. The proceeds from the transactions were primarily used to repay borrowings outstanding under our revolving credit facilities.
developed. A summary of securitization notes payable is as follows (in millions):
Year of Transaction 
Maturity Date (a)
 Original Issuance Amounts Note Balance At
June 30, 2014
 Maturity
Date (a)
 
Original Note
Issuance
(b)
 Note
Balance At
March 31, 2015
2007 June 2018 $76
   $65
 June 2018 $74
 $56
2010 July 2017-April 2018 $200
-$850
 399
 January 2018 850
 89
2011 July 2018-December 2019 $551
-$1,000
 1,348
 July 2018-December 2019 4,550
 771
2012 June 2016-July 2020 $193
-$1,300
 4,585
 June 2016-July 2020 9,096
 3,182
2013 July 2015-October 2021 $227
-$1,107
 5,394
 March 2016-October 2021 7,710
 3,547
2014 March 2019-March 2022 $562
-$1,400
 4,634
 March 2019-September 2022 10,710
 8,405
2015 March 2020-January 2021 1,985
 1,943
Total active securitizations     16,425
   17,993
Acquisition accounting discount     (10)
Acquisition accounting premium   (3)
     $16,415
   $17,990
_________________ 
(a)Maturity dates represent legal final maturity of issued notes. The notes are expected to be paid based on amortization of the finance receivables pledged.
(b)At historical foreign currency exchange rates at the time of issuance.

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Our securitizations utilize special purpose entities which are also VIEs that meet the requirements to be consolidated in our financial statements. See Note 6 8- "Variable Interest Entities" to our condensed consolidated financial statements in this Form 10-Q for further discussion.
Senior Notes and Other Unsecured Debt
We alsoperiodically access the public capital markets through the issuance of unsecured debt. In the North America Segment, we periodically issue senior unsecured notes.notes, predominantly from registered shelves. At June 30, 2014March 31, 2015, we had $4.4$11.3 billion in senior unsecured notes outstanding.
Subsequent to June 30, 2014, our top-tier holding company issued an additional $1.5 billion in senior notes, of which $700 million are due July 2017 and $800 million are due July 2019. Interest rates on the respective tranches are 2.63% and 3.50%, payable semiannually. We intend to use the net proceeds from this offering for general corporate purposes.
In the International Segment, particularly in Latin America, we issue other unsecured debt through commercial paper offerings and other non-bank funding instruments.sources. At June 30, 2014March 31, 2015 we had $790$679 million of this type of unsecured debt outstanding.
Subsequent to March 31, 2015, our top-tier holding company issued $2.4 billion in senior notes comprised of $850 million of 2.4% notes due in April 2018, $1.25 billion of 3.45% notes due in April 2022 and $300 million of floating rate notes due in April 2018. All of these notes are guaranteed by AFSI.

FORWARD-LOOKING STATEMENTS
This report contains several "forward-looking statements." Forward-looking statements are those that use words such as "believe," "expect," "anticipate," "intend," "plan," "may," "likely," "should," "estimate," "continue," "future" and/or "anticipate" and other comparable expressions. These words indicate future events and trends. Forward-looking statements are our current views with 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 Securities and Exchange Commission ("SEC"), including our Annual Report on Form 10-K for the year ended December 31, 2013. It2014.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:
our ability to close the acquisition of Ally Financial's equity interest in auto finance and financial services operations in China and operate that business successfully;
changes in general economic and business conditions;
GM's ability to sell new vehicles that we finance in the markets we serve in North America, Europe, Latin America and Latin America;China;
interest rate and currency fluctuations;
our financial condition and liquidity, as well as future cash flows and earnings;
competition;
the effect, interpretation or application of new or existing laws, regulations, court decisions and accounting pronouncements;
the availability of sources of financing;
the level of net charge-offs, delinquencies and prepayments on the loans and leases we originate;
vehicle return rates and the residual value performance on vehicles we lease;
the viability of GM-franchised dealers that are commercial loan customers;
the prices at which used cars are sold in the wholesale auction markets; and
changes in business strategy, including acquisitions and expansion of product lines and credit risk appetite.appetite, and acquisitions.
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.
Item 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There have been no significant changes in our exposure to interest rate risk since December 31, 2013.2014. See Item 7A - "Quantitative and Qualitative Disclosures About Market Risk" in our Form 10-K.


33


Item 4.CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures

45


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 specified in the SEC's rules and forms 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 disclosure.
Our management, with the participation of our Chief Executive Officer ("CEO")CEO and Chief Financial Officer ("CFO"),CFO, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) andor 15d-15(e) promulgated under the Exchange Act) at June 30, 2014.March 31, 2015. Based on this evaluation, required by paragraph (b) of RulesRule 13a-15 andand/or 15d-15, our CEO and CFO concluded that our disclosure controls and procedures were effective as of June 30, 2014.at March 31, 2015.
Changes in Internal Control Over Financial Reporting
There were no changes made in our internal control over financial reporting during the quarter ended June 30, 2014,March 31, 2015, that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.
Limitations Inherent in all Controls
Our management, including the CEO and CFO, recognize that the disclosure controls and internal controls (discussed above) cannot prevent all errors or all attempts at fraud. Any controls system, no matter how well crafted and operated, can only provide reasonable, and not absolute, assurance of achieving the desired control objectives, and management was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Because of the inherent limitations in any control system, no evaluation or implementation of a control system can provide complete assurance that all control issues and all possible instances of fraud have been or will be detected.
Part II.OTHER INFORMATION
Item 1.Legal Proceedings
None.See Note 11 - "Commitments and Contingencies" to our condensed consolidated financial statements 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, results of operations and financial condition could be materially adversely affected by these riskrisks factors. There have been no material changes to the RiskRisks Factors disclosed in our Annual Report on Form 10-K.10-K for the year ended December 31, 2014.
.

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Item 6.Exhibits
31.1 Officers' Certifications of Periodic Report pursuant to Section 302 of Sarbanes-Oxley Act of 2002 Filed Herewith
     
32.1 Officers' Certifications of Periodic Report pursuant to Section 906 of Sarbanes-Oxley Act of 2002 Furnished with this Report
     
101.INS* XBRL Instance Document Furnished with this Report
     
101.SCH* XBRL Taxonomy Extension Schema Document Furnished with this Report
     
101.CAL* XBRL Taxonomy Extension Calculation Linkbase Document Furnished with this Report
     
101.DEF* XBRL Taxonomy Extension Definition Linkbase Document Furnished with this Report
     
101.LAB* XBRL Taxonomy Extension Label Linkbase Document Furnished with this Report
     
101.PRE* XBRL Taxonomy Presentation Linkbase Document Furnished with this Report
__________
*Submitted electronically with this Report.


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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
     General Motors Financial Company, Inc.
     (Registrant)
      
Date:July 24, 2014April 23, 2015 By: 
/S/    CHRIS A. CHOATE        
     (Signature)
     Chris A. Choate
     Executive Vice President and
     Chief Financial Officer


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