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, 2014~~March 31, 2015



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 filer	o	Accelerated filer	o	Non-accelerated filer	ý	Smaller Reporting Company	o

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 ~~502~~505 shares of the registrant’s common stock, par value $1.00 per share, outstanding. All of the registrant’s common stock is owned by General Motors Holdings, LLC.

Table of Contents

GENERAL MOTORS FINANCIAL COMPANY, INC.

INDEX TO FORM 10-Q



		Page
Part I. Financial Information
Item 1.	Condensed Consolidated Financial Statements	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Income and Comprehensive Income	2
	Condensed Consolidated Statements of Cash Flows	3
	Notes to Condensed Consolidated Financial Statements	4
	Note ~~1 -~~1. Summary of Significant Accounting Policies	4
	Note ~~2 -~~2. Acquisition of Ally Financial International Operations	5
	Note 3. Finance Receivables	6
	Note ~~3 -~~4. Leased Vehicles	9
	Note 5. Restricted Cash	10
	Note 6. Equity in Net Assets of Non-consolidated Affiliates	10
	Note 7. Debt	10
	Note 8. Variable Interest Entities	11
	Note 9. Derivative Financial Instruments and Hedging Activities	12
	Note ~~4 - Leased Vehicles~~	12
	~~Note 5 - Debt~~10. Fair Values of Financial Instruments	13
	Note ~~6 - Variable Interest Entities~~11. Commitments and Contingencies	14
	Note ~~7 - Derivative Financial Instruments and Hedging Activities~~12. Income Taxes	15
	Note ~~8 - Fair Values of Assets and Liabilities~~13. Segment Reporting	1715
	Note ~~9 - Commitments and Contingencies~~14. Accumulated Other Comprehensive (Loss) Income	1816
	Note ~~10 - Income Taxes~~15. Regulatory Capital	1816
	Note ~~11 - Fair Values of Financial Instruments~~	18
	~~Note 12 - Segment Reporting~~	20
	~~Note 13 - Accumulated Other Comprehensive Income~~	21
	~~Note 14 - Regulatory Capital~~	22
	~~Note 15 -~~16. Guarantor Condensed Consolidating Financial Statements	2216
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	3123
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4533
Item 4.	Controls and Procedures	4533
Part II. Other Information		4634
Item 1.	Legal Proceedings	4634
Item 1A.	Risk Factors	4634
Item 6.	Exhibits	4735
	Signature		4836

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.

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.

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.

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, 2014~~4, 2015 ("Form 10-K"). Certain prior ~~year~~periods 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 preparation~~Subsequent 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 "Net~~which 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 agreements~~offer substantially similar products and services throughout many different regions, subject to ~~finance~~local 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 maintained~~U.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

all other countries. For additional financial information regarding our business segments, see ~~Table of Contents~~Note 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, 2014~~March 31, 2015 and December 31, ~~2013~~2014, we had related party receivables from GM in the amount of $~~185~~437 million and $~~129~~384 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, 2013~~in commercial loans outstanding to dealers that are consolidated by ~~GM, in connection with our commercial lending program. Our international operations also provide~~GM. 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,~~ ~~$228~~2014, $289 million ~~and $588 million were~~ was outstanding under such arrangements, and ~~are~~was included in commercial finance receivables. No amounts were outstanding at March 31, 2015. At ~~June 30, 2014~~March 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 ~~2010~~2012 through 2014 ~~are~~were 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, 2014~~date. 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 million~~Support 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

Table of Contents

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 Party~~Junior Subordinated Revolving Credit Facility at ~~June 30, 2014~~March 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.


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, 2014~~March 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.

~~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

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

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 $~~642~~682 million of consumer finance receivables (based on contractual amount due) ~~as of~~at ~~June 30, 2014~~March 31, 2015 and December 31, ~~2013.~~2014.

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 and~~customer; 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.

~~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 investment 12,135
$ 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 million~~was insignificant for the three months ended ~~June 30, 2014~~March 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 loan~~All receivables ~~with~~from 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

~~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, 2014~~March 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 information~~status and ~~events, it is probable that we will be unable to collect all amounts due according to~~none 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 ~~established~~offered 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, 2014~~March 31, 2015 and December 31, ~~2013, there were no outstanding commercial finance receivables classified~~2014, 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

Table of Contents

Note 3.5. Restricted Cash

The following table summarizes the components of restricted cash (in millions):


	June 30, 2014						December 31, 2013						March 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 facilities	79		258		337		62		415		477		$	327	$	326
Securitization notes payable - consumer													1,440		1,330
Securitization notes payable - commercial													59		65
Other	50		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 is~~was primarily comprised of ~~deposits~~interest-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 Vehicles~~Equity in Net Assets of Non-consolidated Affiliates

~~Our~~Non-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 primarily~~and financial affairs.

In January 2015, we completed the acquisition of Ally Financial's equity interest in ~~the North America Segment. As~~SAIC-GMAC. See Note 2 - "Acquisition of ~~June 30, 2014 and December 31, 2013, the amount of leased vehicles accounted~~Ally 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

~~Table of Contents~~

~~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 due~~income 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 debt~~VIEs 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 ~~six~~three 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 secured~~or renewed credit facilities ~~contain various covenants requiring minimum financial ratios, asset quality and portfolio performance ratios (portfolio~~with 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 any~~borrowing 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.

1310

Table of Contents

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 of~~In 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 $4.0~~comprised of $1.0 billion of ~~senior~~3.15% 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% senior~~2.4% notes ~~through a private placement~~due in ~~Canada. The~~April 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 ~~issues~~utilizes unsecured ~~debt through~~ credit facilities with banks ~~and other~~as well as non-bank funding ~~instruments.~~sources. During the ~~six~~three months ended ~~June 30, 2014,~~March 31, 2015, we ~~entered into $171 million of new~~increased 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

~~Table of Contents~~

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, 2014~~March 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 ~~six~~three 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.

Table of Contents

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, 2014~~At March 31, 2015 and December 31, ~~2013, $2.9~~2014, $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 Values~~The fair values of ~~Assets and Liabilities " for further discussion of fair value disclosure related~~the 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 balances~~swap 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, we~~We 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.

~~Table of Contents~~

~~We provided~~At 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 are~~Activity is substantially offset by translation ~~gains~~activity (included in operating expenses) related to the foreign currency-denominated loans described above.

~~Table of Contents~~


~~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.~~

1712

Table of Contents

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 reconciliation~~activity 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 Contingencies~~Fair Values of Financial Instruments

~~Guarantees~~Fair 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 payments~~future cash flows. Therefore, the estimates of ~~principal~~fair 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 par~~those 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 a~~The fair value of our consumer finance ~~company, we are subject to various consumer claims~~receivables is based on observable and ~~litigation seeking damages~~unobservable 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, violations~~charge-offs of ~~bankruptcy stay provisions, certificate~~the loans within the portfolio. The cash flow model produces an estimated amortization schedule of ~~title disputes, fraud, breach~~the finance

Table of ~~contract and discriminatory treatment of credit applicants. Some litigation against us could take~~Contents

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 us~~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 ~~could require us to make expenditures for which we estimate the aggregate risk to be~~discounted using a ~~range~~weighted-average cost of ~~up to~~ ~~$98 million~~.

~~Note 10. Income Taxes~~

~~For interim income tax reporting we estimate our annual effective tax rate~~capital using unobservable debt and ~~apply it to our year-to-date ordinary income. Tax jurisdictions~~equity 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 from~~similar credit rating and maturity profile. For the ~~annualized effective tax rate. The tax effects~~International Segment, the series of ~~unusual or infrequently occurring items, including changes~~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 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 Instruments~~Commitments and Contingencies

~~Fair values~~Guarantees of Indebtedness

The payments of principal and interest on senior notes issued by our top-tier holding company, our primary Canadian operating subsidiary and a European subsidiary 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 affected~~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 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 ~~assumptions~~U.S. Department of Justice directing us to produce certain documents relating to our and our subsidiaries’ and affiliates’ origination and securitization of sub-prime automobile loans since 2007 in connection with an investigation by the U.S. Department of Justice in contemplation of a civil proceeding for potential violations of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989. Among other matters, the subpoena requests information relating to the underwriting criteria used ~~including the discount rate~~to originate these automobile loans and the ~~estimated timing~~representations 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 maturity~~securitization of the ~~financial instruments~~automobile loans. We were subsequently served with additional investigative subpoenas to produce documents from state attorneys general and ~~those differences may~~other 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 value~~given that the ultimate outcome of ~~financial instruments exclude certain financial instruments~~the 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

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 value~~risk to be a range of ~~our company.~~up to $50 million.

1814

Table of Contents

~~Estimated fair values, carrying values~~Note 12. Income Taxes

For interim income tax reporting we estimate our annual effective tax rate and ~~various methods and assumptions used in valuing~~apply 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

~~Table of Contents~~

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 rating~~projected or year-to-date loss for which a tax benefit cannot be realized are excluded from the annualized effective tax rate. The tax effects of unusual or infrequently occurring items, including changes in judgment about valuation allowances and ~~maturity profile. For~~effects of changes in tax laws or rates, are reported in the ~~International Segment,~~interim period in which they occur.

In the ~~series~~three 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 ~~operating~~financial 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

Table of Contents

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 )

~~Table of Contents~~


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, 2014~~March 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 subsidiary~~The Guarantor’s guarantee ~~can~~may be released ~~under~~only upon customary circumstances, ~~including (i)~~ the ~~subsidiary is sold~~terms of which vary by issuance. Customary circumstances include the sale or ~~sells~~disposition of all of ~~its assets; (ii)~~ the ~~subsidiary is declared "unrestricted" for covenant purposes; (iii)~~Guarantor’s assets or capital stock, the ~~subsidiary's guarantee~~achievement of ~~other indebtedness is terminated or released; (iv)~~investment grade rating of the ~~requirements for~~senior 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 only~~parent-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 of~~at ~~June 30, 2014~~March 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

Table of Contents

GENERAL MOTORS FINANCIAL COMPANY, INC.

CONDENSED CONSOLIDATING BALANCE SHEET

~~June 30, 2014~~March 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
Goodwill													1,095			—			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 taxes	20		—			612		(199		)	433		59			—			764			(540		)	283
Goodwill	1,095		—			150		—			1,245
Related party receivables	—		18			167		—			185		—			18			419			—			437
Other assets	62		2			377		(5		)	436		107			170			622			—			899
Due from affiliates	3,116		—			—		(3,116		)	—		8,346			—			—			(8,346		)	—
Investment in affiliates	7,388		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 debt	4,000		—			3,596		—			7,596		9,744			—			4,688			—			14,432
Accounts payable and accrued expenses	49		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 payable	74		—			219		—			293		75			—			130			—			205
Related party taxes payable	891		—			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 liabilities	5,014		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 capital	4,793		79			3,400		(3,479		)	4,793		5,805			79			4,054			(4,133		)	5,805
Accumulated other comprehensive income	65		(5		)	81		(76		)	65
Accumulated other comprehensive loss													(779		)	(122		)	(754		)	876			(779		)
Retained earnings	1,809		3,853			2,876		(6,729		)	1,809		2,177			4,308			3,444			(7,752		)	2,177
Total shareholder's equity	6,667		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

Table of Contents

GENERAL MOTORS FINANCIAL COMPANY, INC.

CONDENSED CONSOLIDATING BALANCE SHEET

December 31, ~~2013~~2014

(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
Goodwill															1,095			—			149			—			1,244
Property and equipment, net	—			5			127			—			132		—			23			149			—			172
Leased vehicles, net	—			—			3,383			—			3,383
Deferred income taxes	1			—			358			—			359		28			—			601			(288		)	341
Goodwill	1,095			—			145			—			1,240
Related party receivables	29			—			100			—			129		—			11			373			—			384
Other assets	74			5			358			(4		)	433		94			18			366			—			478
Due from affiliates	3,754			863			—			(4,617		)	—		6,787			—			400			(7,187		)	—
Investment in affiliates	6,994			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 debt	4,000			—			2,973			—			6,973		7,500			—			4,717			—			12,217
Accounts payable and accrued expenses	101			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 payable	83			—			204			—			287		79			—			155			—			234
Related party taxes payable	643			—			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 affiliates	863			1,474			2,280			(4,617		)	—		—			4,164			3,023			(7,187		)	—
Total liabilities	5,662			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 capital	4,785			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 earnings	1,489			3,612			2,486			(6,098		)	1,489		2,026			4,160			3,224			(7,384		)	2,026
Total shareholder's equity	6,285			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

Table of Contents

GENERAL MOTORS FINANCIAL COMPANY, INC.

CONDENSED CONSOLIDATING STATEMENT OF INCOME

Three Months Ended ~~June 30, 2014~~March 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
Revenue
Finance charge income	$	—		$	39		$	843	$	—		$	882	$	—		$	80		$	774		$	—		$	854
Leased vehicle income	—			—			238		—			238		—			—			431			—			431
Other income	20			104			42		(95		)	71		7			108			45			(91		)	69
Equity in income of affiliates	189			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 expense	44			8			335		(33		)	354		94			(2		)	315			(27		)	380
	38			187			796		(95		)	926
Total costs and expenses														148			158			953			(91		)	1,168
Equity income														238			129			28			(367		)	28
Income before income taxes	171			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

Table of Contents

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 income 35
83
81
(146 ) 53
Equity in income of affiliates 187
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 expense 50
54
206
(146 ) 164
Acquisition and integration expenses —
—
16
—
16
45
144
529
(146 ) 572
Income before income taxes 177
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

~~Table of Contents~~

~~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			Consolidated		General 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 income	40			231			80		(213		)	138		20			127		38		(118		)	67
Equity in income of affiliates	359			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 expenses														1			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 expense	99			19			640		(89		)	669		55			11		305		(56		)	315
	94			344			1,576		(213		)	1,801
Total costs and expenses														56			157		780		(118		)	875
Equity income^(a)														170			116		—		(286		)	—
Income before income taxes	305			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.

~~Table of Contents~~

~~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 income 49
124
128
(230 ) 71
Equity in income of affiliates 300
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 expense 71
89
316
(230 ) 246
Acquisition and integration expenses —
—
22
—
22
69
269
834
(230 ) 942
Income before income taxes 280
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

Table of Contents

GENERAL MOTORS FINANCIAL COMPANY, INC.

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

~~Six~~Three Months Ended ~~June 30, 2014~~March 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 contributions	26			—			(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 activities																623			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

Table of Contents

GENERAL MOTORS FINANCIAL COMPANY, INC.

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

~~Six~~Three Months Ended ~~June 30, 2013~~March 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 debt	1,100			—			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 debt	2,500			—			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 parent	1,300			—			—			—			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 activities	2,490			(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

Table of Contents


Item 2.	~~MANAGEMENTS'S~~MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

~~GENERAL~~OVERVIEW

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. The~~segments: the North America Segment, which includes our operations in the U.S. and ~~Canada. The~~Canada, 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 acquire~~completed the acquisition of Ally Financial's ~~non-controlling~~ 40% equity interest in ~~GMAC-SAIC~~SAIC-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 to~~current shareholder of SAIC-GMAC, for proceeds of $125 million. As a ~~right~~result 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's~~own 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 ~~defaults~~credit losses than ~~these~~on 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 expand~~expanding our leasing, near prime and prime lending programs through GM-franchised dealerships in North America and ~~anticipate~~expect 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):



	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 679	926		17.5		260		12.2
Sub-prime - FICO Score less than 620	1,621		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 new~~and 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 ~~offerings~~products 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

Table of Contents

~~Each~~the 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 monitor~~dealer'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 extent~~unsecured debt in ~~Latin America, through~~the 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 ~~receivables~~earning assets and the relative development of ~~debt~~the 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 in~~deferred taxes from the tax years 2012 through 2014 that we would have otherwise bebeen required to pay to GM ~~over time, and~~on 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 available~~ability to borrow ~~under~~up to $2.0 billion against each of GM's ~~three-year $5.5 billion secured~~unsecured 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 facility~~GM's facilities are limited by GM's ability to ~~also~~borrow 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

Table of Contents

RESULTS OF OPERATIONS

Three Months Ended ~~June 30, 2014~~March 31, 2015 as compared to

Three Months Ended ~~June 30, 2013~~March 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 Change				2015						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 receivables	2,287		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 receivables	14,134		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, net	4,169		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, average~~Average consumer finance receivables increased ~~$524 million from June 30, 2013~~$2.2 due to ~~June 30, 2014, primarily because~~higher loan originations ~~exceeded~~in 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 of~~In addition, average consumer finance receivables ~~for~~decreased due to the ~~three months ended June 30, 2014 and 2013. The average new consumer loan size increased to~~ ~~$22,929~~ ~~for~~effects of foreign currency movements, primarily in the ~~three months ended June 30, 2014 from $21,796 for~~International Segment.

In the ~~three months ended June 30, 2013. The~~North America Segment, the average annual percentage rate for consumer finance receivables purchased during the three months ended ~~June 30, 2014~~March 31, 2015 decreased to ~~12.3%~~9.9% from ~~13.1%~~ ~~for~~13.2% 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 million~~an 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~~

Table of ~~the consumer and commercial receivables portfolios in Brazil, which were acquired October 1, 2013, as well as growth in U.K. consumer finance receivables.~~Contents

Revenue:

Revenues were as follows (dollars in millions):


	Three Months Ended June 30,																Three Months Ended March 31,
	2014						2013						2014 vs. 2013 Change				2015									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 receivables																	12.8		%	10.9		%	11.9		%	14.2		%	11.1		%	12.7		%	(0.8		)%	(5.6	)%
Effective yield - commercial finance receivables																	2.8		%	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 ~~flat~~up 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 from~~March 31, 2014, due to the ~~increase~~

~~Table of Contents~~

growth in ~~average consumer finance receivables was~~the 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 with~~rate subvention provided by GM.

The increase in leased vehicle income reflects the ~~amortization~~increase in the size of the ~~pre-acquisition~~leased 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 ~~addition~~increase in the size of the ~~consumer and~~ commercial ~~receivables portfolios~~receivable 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 Change					2015									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 debt																		3.1		%	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 due~~relates 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, 2014~~March 31, 2015 and ~~2013.~~2014.

Table of Contents

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.~~

~~Table of Contents~~

Provision for Loan ~~losses~~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 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 increase~~growth 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, 2014~~March 31, 2015 and ~~2013.~~

2014. The provision for commercial loan losses ~~on commercial finance receivables in the North America Segment~~ was ~~$1 million~~insignificant for the three months ended ~~June 30, 2014~~March 31, 2015 and ~~2013.~~2014.

~~The~~Interest 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 for~~portfolios, 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.

~~Table of Contents~~

~~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 receivables 2,158
4,715
6,873
882
1,725
2,607
4,266
163.6 %
Average finance receivables 13,849
17,121
30,970
12,082
5,340
17,422
13,548
77.8 %
Average leased vehicles, net 3,867
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

~~Table of Contents~~

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.

~~Table of Contents~~

~~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 ~~six~~three months ended ~~June 30, 2014~~March 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 change~~Dollar. Translation adjustments result from changes in the values of our international currency-denominated assets and liabilities ~~resulting from changes in~~as the value of the U.S. ~~dollar~~Dollar changes in relation to international ~~currencies for~~currencies. The change in other comprehensive (loss) income is primarily due to decreases in the ~~six months ended June 30, 2014~~values of the Brazilian Real, the Euro, the British Pound, the Mexican Peso and ~~2013.~~the Canadian Dollar in relation to the U.S Dollar.

Table of Contents

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.

~~Table of Contents~~

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 fees 11,394
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 contracts 737,660
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 fees 4.5 %
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 contracts	828,147			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 fees	4.2		%	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 due~~was consistent with the level at December 31, 2014. The International Segment's allowance continues to ~~normalizing credit trends~~grow 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 estimate~~portfolio 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.

Table of ~~its originations.~~Contents

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

~~Table of Contents~~

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 deferred 75.1 % 74.7 %
Deferred:
1-2 times 21.0
21.6
3-4 times 3.9
3.7
Total deferred 24.9
25.3
Total 100.0 % 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 deferred	77.2	%	76.1	%
Deferred:
1-2 times	18.8		19.8
3-4 times	4.0		4.1
Total deferred	22.8		23.9
Total	100.0	%	100.0	%

4029

Table of Contents

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 ~~portfolio~~credit performance of ~~both the pre- and post-acquisition finance receivables portfolios on a~~our 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.~~

~~The~~results.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						2013						2015						2014
	North America^(a)		International		Total		North America^(a)		International		Total		North 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 portfolio	15		2		17		36		5		41
Adjustments to reflect write-offs of the contractual amounts on loans acquired with deteriorated credit quality													7		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 portfolio 39
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 losses 61.5 % 62.2 %

~~Table of Contents~~


	Six Months Ended June 30,																		Three Months Ended March 31,
	2014									2013									2015									2014
	North America			International^(a)			Total			North America			International^(a)			Total			North 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 receivables																			2.6		%	0.8		%	1.8		%	3.1		%	0.6		%	1.8		%
Recoveries as a percentage of gross repossession credit losses	60.1		%							61.2		%							57.7		%							59.1		%

_________________


(a)	~~Repossession credit~~Credit 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, 2013									March 31, 2015									December 31, 2014
	North America			International			Total			North America			International			Total			North 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 dealers	367			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 fees	0.7		%	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, 2014~~March 31, 2015 and ~~2013.~~2014. At ~~June 30, 2014~~March 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.

Table of Contents

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 $13~~increased to $21 million ~~and~~ ~~$5 million~~ for the three months ended ~~June 30, 2014 and 2013 and $24 million and $9~~March 31, 2015 from $11 million for the ~~six~~three months ended ~~June 30,~~March 31, 2014, ~~and 2013.~~mainly due to the increase in size of the lease portfolio.

~~Table of Contents~~

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, 2013		March 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 assets	1,803		1,650		7,172		4,808
Borrowing capacity on committed unsecured lines of credit	990		615		641		558
Borrowing capacity on GM Related Party Credit Facility	600		600
Available liquidity	$	4,805	$	3,939
Borrowing capacity on Junior Subordinated Revolving Credit Facility					1,000		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, 2014~~March 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 from~~is 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 result~~North 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 secured~~unsecured 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 facility~~GM'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 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 ~~this facility~~ these facilities

Table of Contents

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.

~~Table of Contents~~

~~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 ~~this~~our Form ~~10-Q~~10-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 to~~periodically 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.

4432

Table of Contents

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 ~~also~~periodically 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, 2014~~March 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, 2014~~March 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. It~~2014.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.

Table of Contents


Item 4.	CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

~~Table of Contents~~

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) ~~and~~or 15d-15(e) promulgated under the Exchange Act) at ~~June 30, 2014.~~March 31, 2015. Based on this evaluation, required by paragraph (b) of ~~Rules~~Rule 13a-15 ~~and~~and/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 ~~risk~~risks factors. There have been no material changes to the ~~Risk~~Risks Factors disclosed in our Annual Report on Form ~~10-K.~~10-K for the year ended December 31, 2014.

4634

Table of Contents


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.

4735

Table of Contents

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, 2014~~April 23, 2015	By:	/S/ CHRIS A. CHOATE
			(Signature)
			Chris A. Choate
			Executive Vice President and
			Chief Financial Officer

4836



	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



	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



	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