UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549-100420549
Form 10-Q
þ☑QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended SeptemberJune 30, 20172020
OR
¨☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from              to


Commission file number 001-34960
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GENERAL MOTORS COMPANY
(Exact name of registrant as specified in its charter)
STATE OF DELAWARE27-0756180
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
300 Renaissance Center, Detroit, Michigan48265-3000
(Address of principal executive offices)(Zip Code)
Delaware27-0756180
(State or other jurisdiction of
incorporation or organization)		(I.R.S. Employer
Identification No.)
300 Renaissance Center,Detroit,Michigan48265-3000
(Address of principal executive offices)(Zip Code)
(313) 667-1500
(Registrant’s telephone number, including area code)

Not applicable
(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 par valueGMNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  þ☑  No  ¨☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes  þ☑  No  ¨☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer  þ☑  Accelerated filer  ¨☐Non-accelerated filer  ¨☐  Smaller reporting company  ¨ ☐Emerging growth company  ¨☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  ¨☐  No  þ☑
As of October 17, 2017 the number ofJuly 15, 2020 there were 1,431,096,512 shares outstanding of common stock was 1,420,407,560 shares.outstanding.




INDEX
Page
PART I
Item 1.Condensed Consolidated Financial Statements
1
Condensed Consolidated Income Statements (Unaudited)
1
Condensed Consolidated Statements of Comprehensive Income (Unaudited)
1
Condensed Consolidated Balance Sheets (Unaudited)
2
Condensed Consolidated Statements of Cash Flows (Unaudited)
3
Condensed Consolidated Statements of Equity (Unaudited)
4
Notes to Condensed Consolidated Financial Statements
5
Note 1.Nature of Operations and Basis of Presentation
5
Note 2.Significant Accounting Policies
5
Note 3.Revenue
6
Note 4.Marketable and Other Securities
8
Note 5.GM Financial Receivables and Transactions
9
Note 6.Inventories
11
Note 7.Equipment on Operating Leases
12
Note 8.Equity in Net Assets of Nonconsolidated Affiliates
12
Note 9.Goodwill
12
Note 10.Variable Interest Entities
13
Note 11.Debt
14
Note 12.Derivative Financial Instruments
15
Note 13.Accrued and Other Liabilities
17
Note 14.Pensions and Other Postretirement Benefits
18
Note 15.Commitments and Contingencies
18
Note 16.Income Taxes
23
Note 17.Restructuring and Other Initiatives
23
Note 18.Stockholders' Equity and Noncontrolling Interests
24
Note 19.Earnings Per Share
25
Note 20.Page
PART I
Item 1.Condensed Consolidated Financial StatementsSegment Reporting
125
Condensed Consolidated Income Statements (Unaudited)
1
Condensed Consolidated Statements of Comprehensive Income (Unaudited)
1
Condensed Consolidated Balance Sheets (Unaudited)
2
Condensed Consolidated Statements of Cash Flows (Unaudited)
3
Condensed Consolidated Statements of Equity (Unaudited)
4
Notes to Condensed Consolidated Financial Statements
5
Note 1.Nature of Operations and Basis of Presentation
5
Note 2.Discontinued Operations
6
Note 3.Marketable Securities
8
Note 4.GM Financial Receivables
10
Note 5.Inventories
11
Note 6.Equipment on Operating Leases
11
Note 7.Equity in Net Assets of Nonconsolidated Affiliates
12
Note 8.Variable Interest Entities
12
Note 9.Automotive and GM Financial Debt
13
Note 10.Derivative Financial Instruments
14
Note 11.Product Warranty and Related Liabilities
15
Note 12.Pensions and Other Postretirement Benefits
16
Note 13.Commitments and Contingencies
16
Note 14.Income Taxes
21
Note 15.Restructuring and Other Initiatives
21
Note 16.Stockholders' Equity and Noncontrolling Interests
22
Note 17.Earnings Per Share
23
Note 18.Acquisition of Business
23
Note 19.Segment Reporting
24
Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations
2729
Item 3.Quantitative and Qualitative Disclosures About Market Risk
4751
Item 4.Controls and Procedures
4751
PART II
Item 1.Legal Proceedings
4852
Item 1A.Risk Factors
4852
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
4853
Item 6.Exhibits
4954
Signature
5055


During the three months ended September 30, 2017 we closed the sale of the Opel and Vauxhall business and certain other assets in Europe (the Opel/Vauxhall Business) to Peugeot, S.A. (PSA Group). The Opel/Vauxhall Business and our European financing subsidiaries and branches (the Fincos, and together with the Opel/Vauxhall Business, the European Business) are presented as discontinued operations in our condensed consolidated financial statements for all periods presented. The transfer of the Fincos is expected to close by the end of the year subject to the receipt of the necessary regulatory approvals and satisfaction of other closing conditions. The assets and liabilities of the Fincos are presented as held for sale as of September 30, 2017, and the assets and liabilities of the European Business are presented as held for sale as of December 31, 2016 in our condensed consolidated financial statements.


Table of Contents
GENERAL MOTORS COMPANY AND SUBSIDIARIES





PART I

Item 1. Condensed Consolidated Financial Statements


CONDENSED CONSOLIDATED INCOME STATEMENTS
(In millions, except per share amounts) (Unaudited)
 Three Months EndedSix Months Ended
 June 30, 2020June 30, 2019June 30, 2020June 30, 2019
Net sales and revenue
Automotive$13,363  $32,425  $42,513  $63,686  
GM Financial3,415  3,635  6,974  7,252  
Total net sales and revenue (Note 3)16,778  36,060  49,487  70,938  
Costs and expenses
Automotive and other cost of sales13,444  28,327  40,170  56,556  
GM Financial interest, operating and other expenses3,238  3,144  6,594  6,450  
Automotive and other selling, general and administrative expense1,310  2,102  3,280  4,201  
Total costs and expenses17,992  33,573  50,044  67,207  
Operating income (loss)(1,214) 2,487  (557) 3,731  
Automotive interest expense303  195  496  376  
Interest income and other non-operating income, net413  364  724  1,169  
Equity income (Note 8)
212  271  80  685  
Income (loss) before income taxes(892) 2,927  (249) 5,209  
Income tax expense (benefit) (Note 16)(112) 524  245  661  
Net income (loss)(780) 2,403  (494) 4,548  
Net loss attributable to noncontrolling interests22  15  30  27  
Net income (loss) attributable to stockholders$(758) $2,418  $(464) $4,575  
Net income (loss) attributable to common stockholders$(806) $2,381  $(559) $4,500  
Earnings (loss) per share (Note 19)
Basic earnings (loss) per common share$(0.56) $1.68  $(0.39) $3.17  
Weighted-average common shares outstanding – basic1,432  1,420  1,432  1,419  
Diluted earnings (loss) per common share$(0.56) $1.66  $(0.39) $3.13  
Weighted-average common shares outstanding – diluted1,432  1,438  1,432  1,437  
Dividends declared per common share$—  $0.38  $0.38  $0.76  
 Three Months Ended Nine Months Ended
 September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016
Net sales and revenue       
Automotive$30,466
 $36,530
 $98,983
 $102,862
GM Financial3,157
 2,359
 8,890
 6,426
Total net sales and revenue33,623
 38,889
 107,873
 109,288
Costs and expenses       
Automotive cost of sales26,511
 31,139
 85,161
 87,761
GM Financial interest, operating and other expenses2,892
 2,202
 8,133
 5,938
Automotive selling, general and administrative expense2,304
 2,400
 7,141
 7,378
Total costs and expenses31,707
 35,741
 100,435
 101,077
Operating income1,916
 3,148
 7,438
 8,211
Automotive interest expense151
 145
 430
 413
Interest income and other non-operating income, net165
 109
 277
 295
Equity income (Note 7)500
 497
 1,585
 1,717
Income before income taxes2,430
 3,609
 8,870
 9,810
Income tax expense (Note 14)2,316
 902
 3,637
 2,436
Income from continuing operations114
 2,707
 5,233
 7,374
Income (loss) from discontinued operations, net of tax (Note 2)(3,096) 5
 (3,935) 119
Net income (loss)(2,982) 2,712
 1,298
 7,493
Net (income) loss attributable to noncontrolling interests1
 61
 (11) 99
Net income (loss) attributable to stockholders$(2,981) $2,773
 $1,287
 $7,592
        
Net income (loss) attributable to common stockholders$(2,983) $2,773
 $1,285
 $7,592
        
Earnings per share (Note 17)       
Basic earnings per common share – continuing operations$0.08
 $1.79
 $3.52
 $4.83
Basic earnings (loss) per common share – discontinued operations$(2.14) $—
 $(2.65) $0.07
Basic earnings (loss) per common share$(2.06) $1.79
 $0.87
 $4.90
Weighted-average common shares outstanding – basic1,445
 1,550
 1,483
 1,548
        
Diluted earnings per common share – continuing operations
$0.08
 $1.76
 $3.46
 $4.73
Diluted earnings (loss) per common share – discontinued operations$(2.11) $—
 $(2.61) $0.08
Diluted earnings (loss) per common share$(2.03) $1.76
 $0.85
 $4.81
Weighted-average common shares outstanding – diluted1,472
 1,574
 1,507
 1,578
        
Dividends declared per common share$0.38
 $0.38
 $1.14
 $1.14

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In millions) (Unaudited)
 Three Months EndedSix Months Ended
 June 30, 2020June 30, 2019June 30, 2020June 30, 2019
Net income (loss)$(780) $2,403  $(494) $4,548  
Other comprehensive income (loss), net of tax (Note 18)
Foreign currency translation adjustments and other(58) 68  (1,031) 217  
Defined benefit plans(39) 6  278  42  
Other comprehensive income (loss), net of tax(97) 74  (753) 259  
Comprehensive income (loss)(877) 2,477  (1,247) 4,807  
Comprehensive loss attributable to noncontrolling interests18  20  38  37  
Comprehensive income (loss) attributable to stockholders$(859) $2,497  $(1,209) $4,844  
 Three Months Ended Nine Months Ended
 September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016
Net income (loss)$(2,982) $2,712
 $1,298
 $7,493
Other comprehensive income (loss), net of tax (Note 16)       
Foreign currency translation adjustments and other371
 (92) 572
 (27)
Defined benefit plans1,213
 30
 973
 79
Other comprehensive income (loss), net of tax1,584
 (62) 1,545
 52
Comprehensive income (loss)(1,398) 2,650
 2,843
 7,545
Comprehensive (income) loss attributable to noncontrolling interests3
 75
 (9) 130
Comprehensive income (loss) attributable to stockholders$(1,395) $2,725
 $2,834
 $7,675


Reference should be made to the notes to condensed consolidated financial statements.

1

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Table of Contents
GENERAL MOTORS COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except per share amounts) (Unaudited)
June 30, 2020December 31, 2019
ASSETS
Current Assets
Cash and cash equivalents$28,228  $19,069  
Marketable debt securities (Note 4)9,254  4,174  
Accounts and notes receivable, net7,946  6,797  
GM Financial receivables, net (Note 5; Note 10 at VIEs)22,851  26,601  
Inventories (Note 6)10,280  10,398  
Other current assets (Note 4; Note 10 at VIEs)8,938  7,953  
Total current assets87,497  74,992  
Non-current Assets
GM Financial receivables, net (Note 5; Note 10 at VIEs)28,999  26,355  
Equity in net assets of nonconsolidated affiliates (Note 8)7,724  8,562  
Property, net37,066  38,750  
Goodwill and intangible assets, net5,282  5,337  
Equipment on operating leases, net (Note 7; Note 10 at VIEs)39,601  42,055  
Deferred income taxes24,654  24,640  
Other assets (Note 4; Note 10 at VIEs)6,712  7,346  
Total non-current assets150,038  153,045  
Total Assets$237,535  $228,037  
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable (principally trade)$15,154  $21,018  
Short-term debt and current portion of long-term debt (Note 11)
   Automotive2,710  1,897  
GM Financial (Note 10 at VIEs)37,313  35,503  
Accrued liabilities (Note 13)22,727  26,487  
Total current liabilities77,904  84,905  
Non-current Liabilities
Long-term debt (Note 11)
   Automotive32,211  12,489  
GM Financial (Note 10 at VIEs)54,939  53,435  
Postretirement benefits other than pensions (Note 14)5,836  5,935  
Pensions (Note 14)11,249  12,170  
Other liabilities (Note 13)11,903  13,146  
Total non-current liabilities116,138  97,175  
Total Liabilities194,042  182,080  
Commitments and contingencies (Note 15)
Equity (Note 18)
Common stock, $0.01 par value14  14  
Additional paid-in capital26,087  26,074  
Retained earnings25,104  26,860  
Accumulated other comprehensive loss(11,901) (11,156) 
Total stockholders’ equity39,304  41,792  
Noncontrolling interests4,189  4,165  
Total Equity43,493  45,957  
Total Liabilities and Equity$237,535  $228,037  
 September 30, 2017 December 31, 2016
ASSETS   
Current Assets   
Cash and cash equivalents$12,792
 $12,574
Marketable securities (Note 3)8,454
 11,841
Accounts and notes receivable, net10,013
 8,700
GM Financial receivables, net (Note 4; Note 8 at VIEs)19,399
 16,127
Inventories (Note 5)11,789
 11,040
Equipment on operating leases, net (Note 6)1,632
 1,110
Other current assets (Note 8 at VIEs)4,909
 3,633
Current assets held for sale (Note 2)7,630
 11,178
Total current assets76,618
 76,203
Non-current Assets   
GM Financial receivables, net (Note 4; Note 8 at VIEs)21,021
 17,001
Equity in net assets of nonconsolidated affiliates (Note 7)8,820
 8,996
Property, net35,178
 32,603
Goodwill and intangible assets, net5,854
 6,149
Equipment on operating leases, net (Note 6; Note 8 at VIEs)41,775
 34,342
Deferred income taxes30,723
 33,172
Other assets (Note 8 at VIEs)5,005
 3,849
Non-current assets held for sale (Note 2)4,508
 9,375
Total non-current assets152,884
 145,487
Total Assets$229,502
 $221,690
    
LIABILITIES AND EQUITY   
Current Liabilities   
Accounts payable (principally trade)$23,265
 $23,333
Short-term debt and current portion of long-term debt (Note 9)   
Automotive1,127
 1,060
GM Financial (Note 8 at VIEs)24,480
 22,737
Accrued liabilities26,603
 25,893
Current liabilities held for sale (Note 2)6,374
 12,158
Total current liabilities81,849
 85,181
Non-current Liabilities   
Long-term debt (Note 9)   
Automotive12,508
 9,500
GM Financial (Note 8 at VIEs)54,558
 41,826
Postretirement benefits other than pensions (Note 12)5,758
 5,803
Pensions (Note 12)14,119
 15,264
Other liabilities12,743
 12,415
Non-current liabilities held for sale (Note 2)4,490
 7,626
Total non-current liabilities104,176
 92,434
Total Liabilities186,025
 177,615
Commitments and contingencies (Note 13)

 

Equity (Note 16)   
Common stock, $0.01 par value14
 15
Additional paid-in capital25,782
 26,983
Retained earnings24,230
 26,168
Accumulated other comprehensive loss(7,783) (9,330)
Total stockholders’ equity42,243
 43,836
Noncontrolling interests1,234
 239
Total Equity43,477
 44,075
Total Liabilities and Equity$229,502
 $221,690



Reference should be made to the notes to condensed consolidated financial statements.

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GENERAL MOTORS COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions) (Unaudited)
Six Months Ended
June 30, 2020June 30, 2019
Cash flows from operating activities
Net income (loss)$(494) $4,548  
Depreciation and impairment of Equipment on operating leases, net3,759  3,748  
Depreciation, amortization and impairment charges on Property, net2,814  3,775  
Foreign currency remeasurement and transaction gains(63) (178) 
Undistributed earnings of nonconsolidated affiliates, net446  256  
Pension contributions and OPEB payments(327) (570) 
Pension and OPEB income, net(518) (306) 
Provision (benefit) for deferred taxes(24) 79  
Change in other operating assets and liabilities(6,847) (6,357) 
Net cash provided by (used in) operating activities(1,254) 4,995  
Cash flows from investing activities
Expenditures for property(2,336) (3,476) 
Available-for-sale marketable securities, acquisitions(7,656) (2,213) 
Available-for-sale marketable securities, liquidations3,694  1,244  
Purchases of finance receivables, net(14,929) (13,757) 
Principal collections and recoveries on finance receivables9,563  11,708  
Purchases of leased vehicles, net(6,054) (8,189) 
Proceeds from termination of leased vehicles5,537  6,444  
Other investing activities(155) 99  
Net cash used in investing activities(12,336) (8,140) 
Cash flows from financing activities
Net increase in short-term debt846  936  
Proceeds from issuance of debt (original maturities greater than three months)53,465  20,511  
Payments on debt (original maturities greater than three months)(29,512) (20,625) 
Proceeds from issuance of subsidiary preferred stock—  414  
Dividends paid(592) (1,184) 
Other financing activities(491) (264) 
Net cash provided by (used in) financing activities23,716  (212) 
Effect of exchange rate changes on cash, cash equivalents and restricted cash(429) 42  
Net increase (decrease) in cash, cash equivalents and restricted cash9,697  (3,315) 
Cash, cash equivalents and restricted cash at beginning of period22,943  23,496  
Cash, cash equivalents and restricted cash at end of period$32,640  $20,181  
Significant Non-cash Investing and Financing Activity
Non-cash property additions$1,773  $3,026  
 Nine Months Ended
 September 30, 2017 September 30, 2016
Cash flows from operating activities   
Income from continuing operations$5,233
 $7,374
Depreciation, amortization and impairment charges9,084
 7,125
Foreign currency remeasurement and transaction (gains) losses(12) 143
Undistributed earnings of nonconsolidated affiliates, net370
 400
Pension contributions and OPEB payments(1,109) (3,097)
Pension and OPEB income, net(646) (587)
Provision for deferred taxes3,517
 2,194
Change in other operating assets and liabilities(6,061) (1,271)
Net cash provided by operating activities – continuing operations
10,376
 12,281
Net cash provided by operating activities – discontinued operations
64
 308
Net cash provided by operating activities10,440
 12,589
Cash flows from investing activities
 
Expenditures for property(6,353) (6,102)
Available-for-sale marketable securities, acquisitions(4,499) (8,613)
Trading marketable securities, acquisitions—
 (249)
Available-for-sale marketable securities, liquidations7,901
 8,090
Trading marketable securities, liquidations—
 846
Acquisition of companies/investments, net of cash acquired(5) (802)
Purchases of finance receivables, net(15,134) (10,389)
Principal collections and recoveries on finance receivables9,363
 7,368
Purchases of leased vehicles, net(14,809) (14,959)
Proceeds from termination of leased vehicles4,649
 1,799
Other investing activities98
 200
Net cash used in investing activities – continuing operations
(18,789) (22,811)
Net cash used in investing activities – discontinued operations (Note 2)
(3,972) (1,188)
Net cash used in investing activities(22,761) (23,999)
Cash flows from financing activities
 
Net decrease in short-term debt(374) (289)
Proceeds from issuance of debt (original maturities greater than three months)43,048
 30,598
Payments on debt (original maturities greater than three months)(26,034) (15,294)
Payments to purchase common stock(2,994) (1,501)
Proceeds from issuance of GM Financial preferred stock985
 —
Dividends paid(1,701) (1,782)
Other financing activities(271) (172)
Net cash provided by financing activities – continuing operations12,659
 11,560
Net cash provided by financing activities – discontinued operations20
 585
Net cash provided by financing activities12,679
 12,145
Effect of exchange rate changes on cash, cash equivalents and restricted cash362
 52
Net increase in cash, cash equivalents and restricted cash720
 787
Cash, cash equivalents and restricted cash at beginning of period15,160
 17,332
Cash, cash equivalents and restricted cash at end of period$15,880
 $18,119
    
Cash, cash equivalents and restricted cash – continuing operations at end of period (Note 3)$15,315
 $17,392
Cash, cash equivalents and restricted cash – discontinued operations at end of period$565
 $727
Significant Non-cash Investing and Financing Activity   
Non-cash property additions – continuing operations$3,833
 $3,841
Non-cash property additions – discontinued operations$—
 $847
Non-cash business acquisition – continuing operations (Note 18)$—
 $290
Non-cash proceeds on sale of discontinued operations (Note 2)$808
 $—

Reference should be made to the notes to condensed consolidated financial statements.

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GENERAL MOTORS COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(In millions) (Unaudited)
Common Stockholders’Noncontrolling InterestsTotal Equity
Common StockAdditional Paid-in CapitalRetained EarningsAccumulated Other Comprehensive LossNoncontrolling Interests
Balance at January 1, 2019Balance at January 1, 2019$14  $25,563  $22,322  $(9,039) $3,917  $42,777  
Net incomeNet income—  —  2,157  —  (12) 2,145  
Other comprehensive incomeOther comprehensive income—  —  —  190  (5) 185  
Common Stockholders’ Noncontrolling Interests Total Equity
Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss 
Balance at January 1, 2016$15
 $27,607
 $20,285
 $(8,036) $452
 $40,323
Net income—
 —
 7,592
 —
 (99) 7,493
Other comprehensive income—
 —
 —
 83
 (31) 52
Issuance of common stock—
 290
 —
 —
 —
 290
Purchase of common stock—
 (820) (681) —
 —
 (1,501)
Exercise of common stock warrants—
 59
 —
 —
 —
 59
Stock based compensation—
 105
 (16) —
 —
 89
Stock based compensation—  95  (6) —  —  89  
Cash dividends paid on common stock—
 —
 (1,763) —
 —
 (1,763)Cash dividends paid on common stock—  —  (539) —  —  (539) 
Dividends to noncontrolling interests—
 —
 —
 —
 (25) (25)Dividends to noncontrolling interests—  —  —  —  (18) (18) 
Other—
 —
 —
 —
 (2) (2)Other—  3  5  —  (9) (1) 
Balance at September 30, 2016$15
 $27,241
 $25,417
 $(7,953) $295
 $45,015
           
Balance at January 1, 2017$15
 $26,983
 $26,168
 $(9,330) $239
 $44,075
Balance at March 31, 2019Balance at March 31, 201914  25,661  23,939  (8,849) 3,873  44,638  
Net income—
 —
 1,287
 —
 11
 1,298
Net income—  —  2,418  —  (15) 2,403  
Other comprehensive income—
 —
 —
 1,547
 (2) 1,545
Other comprehensive income—  —  —  79  (5) 74  
Purchase of common stock(1) (1,476) (1,517) —
 —
 (2,994)
Exercise of common stock warrants—
 42
 —
 —
 —
 42
Issuance of GM Financial preferred stock—
 —
 —
 —
 985
 985
Issuance of subsidiary preferred stock (Note 18)Issuance of subsidiary preferred stock (Note 18)—  —  —  —  408  408  
Stock based compensation—
 293
 (25) —
 —
 268
Stock based compensation—  78  (9) —  —  69  
Cash dividends paid on common stock—
 —
 (1,683) —
 —
 (1,683)Cash dividends paid on common stock—  —  (540) —  —  (540) 
Dividends to noncontrolling interests—
 —
 —
 —
 (18) (18)Dividends to noncontrolling interests—  —  —  —  (23) (23) 
Other—
 (60) —
 —
 19
 (41)Other—  26  (1) —  35  60  
Balance at September 30, 2017$14
 $25,782
 $24,230
 $(7,783) $1,234
 $43,477
Balance at June 30, 2019Balance at June 30, 2019$14  $25,765  $25,807  $(8,770) $4,273  $47,089  
Balance at January 1, 2020Balance at January 1, 2020$14  $26,074  $26,860  $(11,156) $4,165  $45,957  
Adoption of accounting standards (Note 1)Adoption of accounting standards (Note 1)—  —  (660) —  —  (660) 
Net incomeNet income—  —  294  —  (8) 286  
Other comprehensive lossOther comprehensive loss—  —  —  (644) (12) (656) 
Issuance of subsidiary preferred stockIssuance of subsidiary preferred stock—  —  —  —  26  26  
Purchase of common stockPurchase of common stock—  (57) (33) —  —  (90) 
Stock based compensationStock based compensation—  (3) (7) —  —  (10) 
Cash dividends paid on common stockCash dividends paid on common stock—  —  (545) —  —  (545) 
Dividends to noncontrolling interestsDividends to noncontrolling interests—  —  —  —  (4) (4) 
OtherOther—  —  (24) —  37  13  
Balance at March 31, 2020Balance at March 31, 202014  26,014  25,885  (11,800) 4,204  44,317  
Net lossNet loss—  —  (758) —  (22) (780) 
Other comprehensive lossOther comprehensive loss—  —  —  (101) 4  (97) 
Issuance of subsidiary preferred stockIssuance of subsidiary preferred stock—  —  —  —  26  26  
Stock based compensationStock based compensation—  73  —  —  —  73  
Dividends to noncontrolling interestsDividends to noncontrolling interests—  —  —  —  (39) (39) 
OtherOther—  —  (23) —  16  (7) 
Balance at June 30, 2020Balance at June 30, 2020$14  $26,087  $25,104  $(11,901) $4,189  $43,493  


























Reference should be made to the notes to condensed consolidated financial statements.

4

4
Table of Contents
GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Nature of Operations and Basis of Presentation
General Motors Company (sometimes referred to in this Quarterly Report on Form 10-Q as we, our, us, ourselves, the Company, General Motors or GM) designs, builds and sells cars, trucks, crossovers, cars and automobile parts worldwide.worldwide and is investing in and growing an autonomous vehicle business. We also provide automotive financing services through General Motors Financial Company, Inc. (GM Financial). We analyze the results of our continuing operations through the following operating segments: GM North America (GMNA), GM International Operations (GMIO), GM South America (GMSA), Cruise, and GM Financial. Our GMSA and GMIO operating segments are reported as one, combined international segment, GM International (GMI). Cruise, formerly GM Cruise, is our global segment responsible for the development and commercialization of autonomous vehicle technology. Nonsegment operations and Maven, our ride- and car-sharing business, are classified as Corporate. Corporate includes certain centrally recorded income and costs such as interest, income taxes, corporate expenditures including autonomous vehicle-related engineering costs and certain nonsegment specificnonsegment-specific revenues and expenses.

On July 31, 2017 we closed the sale of the Opel and Vauxhall business and certain other assets in Europe (the Opel/Vauxhall Business) to Peugeot S.A. (PSA Group). Both the Opel/Vauxhall Business and our European financing subsidiaries and branches (the Fincos, and together with the Opel/Vauxhall Business, the European Business) are presented as discontinued operations in our condensed consolidated financial statements for all periods presented. The assets and liabilities of the Fincos are presented as held for sale as of September 30, 2017, and the assets and liabilities of the European Business are presented as held for sale as of December 31, 2016 in our condensed consolidated financial statements. Unless otherwise indicated, information in these notes to the condensed consolidated financial statements relates to our continuing operations. Refer to Note 2 for additional details regarding the disposal of the Opel/Vauxhall Business and the planned disposals of the Fincos.


The accompanying condensed consolidated financial statements have been prepared in conformity with U.S. GAAP pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) for interim financial information. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. The accompanying condensed consolidated financial statements include all adjustments, which consist of normal recurring adjustments and transactions or events discretely impacting the interim periods, considered necessary by management to fairly state our results of operations, financial position and cash flows. The operating results for interim periods are not necessarily indicative of results that may be expected for any other interim period or for the full year. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our 20162019 Form 10-K. Except for per share amounts or as otherwise specified, dollar amounts presented within tables are stated in millions.


Principles of Consolidation We consolidate entities that we control due to ownership of a majority voting interest and we consolidate variable interest entities (VIEs) when we are the primary beneficiary. Our share of earnings or losses of nonconsolidated affiliates is included in our consolidated operating results using the equity method of accounting when we are able to exercise significant influence over the operating and financial decisions of the affiliate.

Recently Adopted Accounting Standards Effective January 1, 2020, we adopted Accounting Standards Update (ASU) 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" (ASU 2016-13), which requires entities to use a new impairment model based on current expected credit losses (CECL) rather than incurred losses. Estimated credit losses under CECL consider relevant information about past events, current conditions and reasonable and supportable forecasts that affect the collectability of financial assets, resulting in recognition of lifetime expected credit losses at initial recognition of the related asset. We adopted ASU 2016-13 on a modified retrospective basis by recognizing an after-tax cumulative-effect adjustment to the opening balance of Retained earnings of $660 million, inclusive of $643 million related to GM Financial. The application of ASU 2016-13 increased our allowance for loan losses related to GM Financial receivables, net by $801 million and had an insignificant impact to our allowance for credit losses for Accounts and notes receivable and no adoption impact to Marketable debt securities on our condensed consolidated balance sheets.

Accounting Standards Not Yet Adopted In May 2014March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, “Revenue from Contracts with Customers”ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (ASU 2014-09)2020-04), which requires usprovides optional expedients and exceptions for applying U.S. GAAP if certain criteria are met to recognize revenue when a customer obtains control rather than when we have transferred substantially all riskscontracts, hedging relationships and rewards of a goodother transactions that reference LIBOR or service and requires expanded disclosures. ASU 2014-09, as amended, is effective for us beginning January 1, 2018. ASU 2014-09 will affect the amount and timing of certain revenue related transactions primarily resulting from the earlier recognition of certain sales incentives and fixed fee license arrangements. Upon adoption of ASU 2014-09 sales incentives will be recorded at the time of sale rather than at the later of sale or announcement and fixed fee license arrangements will be recognized when the customer is granted access to intellectual property instead of over the contract period. Certain transactions with daily rental car companies may also qualifyanother reference rate expected to be accounted for as a sale as opposed to the current accounting as an operating lease. We expect to adopt the provisions ofdiscontinued. ASU 2014-09 on a modified retrospective basis2020-04 became effective March 12, 2020 and may be applied prospectively through a cumulative adjustment to equity. Upon adoption of ASU 2014-09 we estimate a reduction to Equity of up to $1.0 billion. This estimate is subject to change as a result of future changes in market conditions, incentive program offerings, and dealer inventory levels. We continue to assess the overall impact the adoption of ASU 2014-09 will have on our consolidated financial statements and are continuing to test and refine our processes designed to comply with ASU 2014-09 to permit adoption by January 1, 2018.

In January 2016 the FASB issued ASU 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities” (ASU 2016-01), which requires equity investments that are not accounted for under the equity method of accounting to be measured at fair value with changes recognized in net income and which updates certain presentation and disclosure requirements. ASU 2016-01 is effective for us beginning January 1, 2018 and requires a cumulative-effect adjustment for certain items upon adoption. At September 30, 2017 the carrying value of equity investments that are not accounted for under the equity method of accounting totaled approximately $500 million and unrealized gains or losses were insignificant.December 31, 2022. We do not believe the discontinuance of LIBOR will be a significant event for our Automotive arrangements. A substantial portion of GM Financial’s indebtedness bears interest at variable interest rates, primarily based on USD-LIBOR. The adoption of ASU 2016-01 will be2020-04 is not expected to have a material toimpact on our condensed consolidated financial statements.
In March 2017statements as the FASB issued ASU 2017-07, "Compensation – Retirement Benefits (Topic 715), Improvingstandard will ease, if warranted, the Presentationrequirements for accounting for the future effects of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost" (ASU 2017-07), which requires that the service cost componentrate reform. We continue to monitor the impact the discontinuance of net periodic pensionLIBOR or another reference rate will have on GM Financial's contracts, hedging relationships and other postretirement benefits (OPEB) (income) expense betransactions.

Note 2.Significant Accounting Policies
The information presented on Marketable Debt Securities, Accounts and Notes Receivable and GM Financial Receivables supplements the Significant Accounting Policies information presented in our 2019 Form 10-K to reflect the same income statement line item as other employee compensation costs, whileadoption of ASU 2016-13 that became effective January 1, 2020. See our 2019 Form 10-K for a description of our significant accounting policies in effect prior to the remaining componentsadoption of net periodic pension and OPEB (income) expense are to be presented outside operating income. ASU 2017-07 is effective for us on a retrospective basis beginning

2016-13.
5

Table of Contents
GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —— (Continued)

January 1, 2018Marketable Debt Securities We classify marketable debt securities as either available-for-sale or trading. Various factors, including turnover of holdings and will resultinvestment guidelines, are considered in determining the reclassificationclassification of non-service cost components from primarily Automotive costsecurities. Available-for-sale debt securities are recorded at fair value with unrealized gains, and losses that are not credit related, recorded net of sales toapplicable taxes in Accumulated other comprehensive loss until realized. Credit losses are recorded in Interest income and other non-operating income, net. We expect a resulting decrease
An evaluation is made quarterly to Operating income and an increasedetermine if any portion of unrealized losses on available-for-sale debt securities is related to credit losses or whether any unrealized losses recorded in Accumulated other comprehensive loss need to be reclassified. Non-credit related unrealized losses are reclassified to Interest income and other non-operating income, net of approximately $1.3 billion for the year ended December 31, 2016.

In August 2017 the FASB issued ASU 2017-12, "Derivatives and Hedging (Topic 815), Targeted Improvements to Accounting for Hedging Activities" (ASU 2017-12), which simplifies the application of hedge accounting and more closely aligns hedge accounting with companies' risk management strategies thereby making more hedging strategies eligible for hedge accounting. Unlike current guidance, ASU 2017-12 permits hedge accounting for specific risks in hedging relationships involving nonfinancial risk and interest rate risk. ASU 2017-12 is effective for us beginning January 1, 2019, with early adoption permitted. ASU 2017-12 requires a cumulative-effect adjustment for certain items upon adoption. We are currently evaluating the impact the adoption of ASU 2017-12 will have on our consolidated financial statements. The simplifications to the application of hedge accounting may result in the future expansion of our use of hedge accounting.
Note 2. Discontinued Operations
On March 5, 2017if we entered into a Master Agreement (the Agreement)intend to sell the security or it is more likely than not that we will be required to sell the security before the recovery of the unrealized loss.
Accounts and Notes Receivable Accounts and notes receivable primarily consists of amounts that are due and payable from our European Business to PSA Groupcustomers for net consideration with an estimated value of approximately $2.5 billion. On July 31, 2017 we closed the sale of our Opel/Vauxhall Businessvehicles, parts, and accessories. We evaluate the collectability of receivables each reporting period and record an allowance for doubtful accounts to PSA Group. The transfer ofpresent the Fincos is expected to close by the end of the year subject to the receipt of the necessary regulatory approvals and satisfaction of other closing conditions.

The net consideration paid at closing for the Opel/Vauxhall Business was $1.4 billion, consisting of (1) $1.1 billion in cash; and (2) $808 million in warrants in PSA Group; partially offset by (3) the $478 million de-risking premium payment made to PSA Group for assuming certain underfunded pension liabilities. The warrants are not exercisable for five years and do not include any governance or voting rights with respect to PSA Group. In addition, we agreed to sell the shares of PSA Group received upon exercise of the warrants within 35 days after exercise. The net consideration to be paid for the Fincos will be 0.8 times their book value at closing, which we estimate will be approximately $1.1 billion based on exchange rates at September 30, 2017, subject to foreign currency fluctuations. The purchase price is subject to certain working capital adjustments as provided in the Agreement.

The total charge from the sale of the European Business isamount expected to be approximately $6.3 billion,collected on our receivables. Additions to the allowance are charged to bad debt expense and reported in Automotive and other selling, general and administrative expense.
GM Financial Receivables Finance receivables are carried at amortized cost, net of tax. Duringallowance for loan losses. Provisions for loan losses are charged to operations in amounts sufficient to maintain the three months ended September 30, 2017allowance for loan losses at levels considered adequate to cover expected credit losses on the Company recorded afinance receivables. For retail finance receivables, GM Financial uses static pool modeling techniques to determine the allowance for loan losses expected over the remaining life of the receivables, which is supplemented by management judgment. The modeling techniques incorporate reasonable and supportable forecasts of economic conditions over the expected remaining life of the finance receivables. The economic forecasts incorporate factors which vary by region that GM Financial believes will have the largest impact on expected losses, including unemployment rates, interest rate spreads, disposable personal income and growth rates in gross domestic product.
Troubled debt restructurings (TDRs) are grouped separately for purposes of measuring the allowance. The allowance for TDRs uses static pool modeling techniques like non-TDR retail finance receivables to determine the expected loss amount. The expected cash flows of the receivables are then discounted at the original weighted average effective interest rate of the pool. Factors considered when estimating the allowance for TDRs are based on an evaluation of historical and current information, which may be supplemented by management judgment. Finance charge of $5.4 billion, of which $3.1 billionincome from loans classified as TDRs is recordedaccounted for in Income (loss) from discontinued operations,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.
Commercial finance receivables are carried at amortized cost, net of tax and $2.3 billion is recorded in Income tax expense, as a result of the sale of the Opel/Vauxhall Business. The charge relates to: (1) $4.3 billion of deferred tax assets that will no longer be realizable or that transferred to PSA Group; (2) $1.5 billion related to previously deferred pensionallowance for loan losses and payment ofany amounts received under a cash management program. GM Financial establishes the de-risking premiumallowance for loan losses based on historical loss experience, as well as the forecast for industry vehicle sales, which is the economic indicator believed to PSA Group for its assumption of certain underfunded pension liabilities; and (3) other net charges primarily related to contract cancellations, working capital adjustments and certain transitional services and other costs to supporthave the separation of operations to be provided for a period of timelargest impact on expected losses.
Note 3. Revenue
The following closing; partially offsettable disaggregates our revenue by proceeds. During the three months ended June 30, 2017 we recognized, on a pre-tax basis, a charge of $836 million in Income (loss) from discontinued operations consisting of (1) a charge of $421 million for the cancellation of production programs resulting from the convergence of vehicle platforms between the European Business and PSA Group; (2) a disposal loss of $324 million as a result of the Fincos being classified as held for sale; and (3) other insignificant charges. We expect to record a disposal loss of approximately $300 million upon sale of the Fincos.major source:

Our wholly-owned subsidiary (the Seller) has agreed to indemnify PSA Group for certain losses resulting from any inaccuracy of the representations and warranties or breaches of our covenants included in the Agreement and for certain other liabilities, including emissions and product liabilities. The Company has entered into a guarantee for the benefit of PSA Group and pursuant to which the Company has agreed to guarantee the Seller's obligation to indemnify PSA Group for certain losses resulting from any inaccuracy of certain representations and warranties or breaches of our covenants in the Agreement and for certain other liabilities. Certain of these indemnification obligations are subject to time limitations, thresholds and/or caps as to the amount of required payments.

We retained net underfunded pension liabilities of $6.8 billion owed primarily to current pensioners and former employees of the European Business with vested pension rights. PSA Group assumed approximately $3.1 billion of net underfunded pension liabilities primarily with respect to active employees of the Opel/Vauxhall Business, and during the three months ended September 30, 2017 the Seller made payments to PSA Group, or one or more pension funding vehicles, of $3.4 billion in respect of these assumed liabilities, which includes pension funding payments for active employees and the de-risking premium payment of $478 million discussed above. At closing we drew upon our three-year unsecured revolving credit facility to fund these payments. We issued debt securities, as described in Note 9, thereafter to repay the amount drawn on our credit facility.


Three Months Ended June 30, 2020
GMNAGMICorporateTotal AutomotiveCruiseGM FinancialEliminations/ReclassificationsTotal
Vehicle, parts and accessories$10,850  $1,439  $—  $12,289  $—  $—  $—  $12,289  
Used vehicles122  17  8  147  —  —  —  147  
Services and other632  221  72  925  28  —  (26) 927  
Automotive net sales and revenue11,604  1,677  80  13,361  28  —  (26) 13,363  
Leased vehicle income—  —  —  —  —  2,386  —  2,386  
Finance charge income—  —  —  —  —  966  —  966  
Other income—  —  —  —  —  71  (8) 63  
GM Financial net sales and revenue—  —  —  —  —  3,423  (8) 3,415  
Net sales and revenue$11,604  $1,677  $80  $13,361  $28  $3,423  $(34) $16,778  
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Table of Contents
GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —— (Continued)

Three Months Ended June 30, 2019
GMNAGMICorporateTotal AutomotiveCruiseGM FinancialEliminations/ ReclassificationsTotal
Vehicle, parts and accessories$26,976  $3,744  $—  $30,720  $—  $—  $—  $30,720  
Used vehicles577  29  —  606  —  —  —  606  
Services and other771  274  54  1,099  25  —  (25) 1,099  
Automotive net sales and revenue28,324  4,047  54  32,425  25  —  (25) 32,425  
Leased vehicle income—  —  —  —  —  2,512  —  2,512  
Finance charge income—  —  —  —  —  1,008  (2) 1,006  
Other income—  —  —  —  —  119  (2) 117  
GM Financial net sales and revenue—  —  —  —  —  3,639  (4) 3,635  
Net sales and revenue$28,324  $4,047  $54  $32,425  $25  $3,639  $(29) $36,060  
As part
Six Months Ended June 30, 2020
GMNAGMICorporateTotal AutomotiveCruiseGM FinancialEliminations/ReclassificationsTotal
Vehicle, parts and accessories$35,426  $4,437  $—  $39,863  $—  $—  $—  $39,863  
Used vehicles498  42  10  550  —  —  —  550  
Services and other1,511  478  108  2,097  53  —  (50) 2,100  
Automotive net sales and revenue37,435  4,957  118  42,510  53  —  (50) 42,513  
Leased vehicle income—  —  —  —  —  4,849  —  4,849  
Finance charge income—  —  —  —  —  1,972  (1) 1,971  
Other income—  —  —  —  —  163  (9) 154  
GM Financial net sales and revenue—  —  —  —  —  6,984  (10) 6,974  
Net sales and revenue$37,435  $4,957  $118  $42,510  $53  $6,984  $(60) $49,487  
Six Months Ended June 30, 2019
GMNAGMICorporateTotal AutomotiveCruiseGM FinancialEliminations/ ReclassificationsTotal
Vehicle, parts and accessories$52,938  $7,311  $—  $60,249  $—  $—  $—  $60,249  
Used vehicles1,204  64  —  1,268  —  —  —  1,268  
Services and other1,547  522  100  2,169  50  —  (50) 2,169  
Automotive net sales and revenue55,689  7,897  100  63,686  50  —  (50) 63,686  
Leased vehicle income—  —  —  —  —  5,021  —  5,021  
Finance charge income—  —  —  —  —  1,995  (4) 1,991  
Other income—  —  —  —  —  243  (3) 240  
GM Financial net sales and revenue—  —  —  —  —  7,259  (7) 7,252  
Net sales and revenue$55,689  $7,897  $100  $63,686  $50  $7,259  $(57) $70,938  

Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services. Adjustments to sales incentives for previously recognized sales increased revenue by $470 million and were insignificant in the retained pensionthree months ended June 30, 2020 and 2019.

Contract liabilities described above, we retained the United Kingdom defined benefit pension plans in existenceour Automotive segments primarily consist of maintenance, extended warranty and other service contracts of $2.3 billion and $2.2 billion at signingJune 30, 2020 and December 31, 2019, which are included in Accrued liabilities and Other liabilities. We recognized revenue of $241 million and $627 million related to the Opel/Vauxhall Business, including responsibility for service cost accruals through the closing date. Those plans with active participants closed to future accrual as of July 30, 2017. Any future service cost accruals on and from the closing date will be the responsibility of PSA Group.

We have agreed to purchase from and supply to PSA Group certain vehicles for a period of time following closing. Duringcontract liabilities in the three and ninesix months ended SeptemberJune 30, 2017 Total net sales2020 and revenue from continuing operations include $362$469 million and purchases$902 million in the three and expenses incurred by our continuing operations were insignificantsix months ended June 30, 2019. We expect to recognize revenue of $651 million in the six months ending December 31, 2020 and $718 million, $381 million and $533 million in the years ending December 31, 2021, 2022 and thereafter related to transactions with the Opel/Vauxhall Business that would have been eliminated in consolidation prior to the sale of the Opel/Vauxhall Business. During the nine months ended Septembercontract liabilities at June 30, 2017 cash payments were insignificant and cash receipts of $558 million were recorded in Net cash provided by operating cash flows - continuing operations related to transactions with the Opel/Vauxhall Business.2020.

The following tablesummarizes the results of the discontinued operations:
7

 Three Months Ended Nine Months Ended
 September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016
Automotive net sales and revenue$1,553
 $4,444
 $11,257
 $15,011
GM Financial net sales and revenue147
 132
 414
 418
Total net sales and revenue1,700
 4,576
 11,671
 15,429
Automotive cost of sales1,583
 4,279
 11,049
 14,287
GM Financial interest, operating and other expenses99
 104
 301
 317
Automotive selling, general, and administrative expense134
 324
 813
 1,011
Other income and (expense) items(74) 10
 (72) 75
Loss from discontinued operations before taxes190
 121
 564
 111
Loss on sale of discontinued operations before taxes(a)(b)1,150
 —
 1,986
 —
Total loss from discontinued operations before taxes1,340
 121
 2,550
 111
Income tax expense (benefit)(b)(c)1,756
 (126) 1,385
 (230)
Income (loss) from discontinued operations, net of tax$(3,096) $5
 $(3,935) $119
__________
(a)Includes contract cancellation charges associated with the disposal in the nine months ended September 30, 2017.
(b)Total loss on sale of discontinued operations, net of tax was $3.1 billion and $3.7 billion for the three and nine months ended September 30, 2017.
(c)Includes $2.0 billion of deferred tax assets that transferred to PSA Group in the three and nine months ended September 30, 2017.


7
Table of Contents
GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —— (Continued)

The following tablesummarizes the assetsNote 4. Marketable and liabilities of the Fincos at September 30, 2017 and the European Business at December 31, 2016:
 September 30, 2017 December 31, 2016
Current Assets   
Cash and cash equivalents$242
 $386
Accounts and notes receivable, net65
 938
GM Financial receivables, net6,995
 5,938
Inventories—
 2,748
Equipment on operating leases, net—
 786
Other current assets328
 382
Total current assets held for sale7,630
 11,178
Non-current Assets   
GM Financial receivables, net4,308
 3,723
Property, net65
 3,217
Deferred income taxes122
 1,920
Other assets13
 515
Total non-current assets held for sale4,508
 9,375
Total Assets Held for Sale$12,138
 $20,553
    
Current Liabilities   
Accounts payable (principally trade)$178
 $3,628
Short-term debt and current portion of long-term debt
 
Automotive—
 107
GM Financial6,014
 5,124
Accrued liabilities182
 3,299
Total current liabilities held for sale6,374
 12,158
Non-current Liabilities   
Long-term debt
 
Automotive—
 85
GM Financial4,327
 4,189
Pensions126
 2,687
Other liabilities37
 665
Total non-current liabilities held for sale4,490
 7,626
Total Liabilities Held for Sale$10,864
 $19,784

Note 3. MarketableOther Securities
The following table summarizes the fair value of cash equivalents and marketable debt securities, which approximates cost:

Fair Value LevelJune 30, 2020December 31, 2019
Cash and cash equivalents
Cash and time deposits(a)$13,203  $6,828  
Available-for-sale debt securities
U.S. government and agencies23,879  1,484  
Corporate debt23,318  5,863  
Sovereign debt22,250  2,123  
Total available-for-sale debt securities – cash equivalents9,447  9,470  
Money market funds15,578  2,771  
Total cash and cash equivalents(b)$28,228  $19,069  
Marketable debt securities
U.S. government and agencies(c)2$3,435  $226  
Corporate debt23,552  2,932  
Mortgage and asset-backed2641  681  
Sovereign debt21,626  335  
Total available-for-sale debt securities – marketable securities(d)$9,254  $4,174  
Restricted cash
Cash and cash equivalents$267  $292  
Money market funds14,145  3,582  
Total restricted cash$4,412  $3,874  
Available-for-sale debt securities included above with contractual maturities(e)
Due in one year or less$15,333  
Due between one and five years2,727  
Total available-for-sale debt securities with contractual maturities$18,060  
__________
(a)Includes $248 million designated exclusively to fund capital expenditures in GM Korea Company (GM Korea) at December 31, 2019. NaN amount was designated exclusively to fund GM Korea capital expenditures at June 30, 2020.
(b)Includes $1.2 billion and $2.3 billion in Cruise at June 30, 2020 and December 31, 2019.
(c)Includes $505 million of marketable debt securities pending cash settlement at June 30, 2020.
(d)Includes $960 million and $266 million in Cruise at June 30, 2020 and December 31, 2019.
(e)Excludes mortgage- and asset-backed securities of $641 million at June 30, 2020 as these securities are not due at a single maturity date.

Proceeds from the sale of available-for-sale debt investments sold prior to maturity were $554 million and $486 million in the three months ended June 30, 2020 and 2019 and $920 million and $1.1 billion in the six months ended June 30, 2020 and 2019. Net unrealized gains and losses on available-for-sale debt securities were insignificant in the three and six months ended June 30, 2020 and 2019. Cumulative unrealized gains and losses on available-for-sale debt securities were insignificant at June 30, 2020 and December 31, 2019.

We liquidated our remaining shares in Lyft, Inc. (Lyft) in the three months ended June 30, 2020. We recorded an unrealized loss of $65 million and an unrealized gain of $220 million in Interest income and other non-operating income, net in the three and six months ended June 30, 2019.
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GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —— (Continued)

 Fair Value Level September 30, 2017 December 31, 2016
Cash and cash equivalents     
Cash, cash equivalents and time deposits  $6,124
 $5,692
Available-for-sale securities     
U.S. government and agencies2 160
 1,158
Corporate debt2 1,770
 2,524
Money market funds1 2,983
 1,801
Sovereign debt2 1,755
 1,399
Total available-for-sale securities – cash equivalents  6,668
 6,882
Total cash and cash equivalents  $12,792
 $12,574
Marketable securities    

U.S. government and agencies2 $3,285
 $5,886
Corporate debt2 3,720
 3,611
Mortgage and asset-backed2 584
 197
Sovereign debt2 865
 2,147
Total available-for-sale securities – marketable securities  $8,454
 $11,841
Restricted cash     
Cash, cash equivalents and time deposits  $199
 $248
Available-for-sale securities, primarily money market funds1 2,324
 1,665
Total restricted cash  $2,523
 $1,913
      
Available-for-sale securities included above with contractual maturities(a)    
Due in one year or less  $6,417
  
Due between one and five years  5,138
  
Total available-for-sale securities with contractual maturities  $11,555
  
__________
(a)Excludes mortgage and asset-backed securities.

Sales proceeds from investments classified as available-for-sale and sold prior to maturity were $3.7 billion and $1.6 billion in the three months ended September 30, 2017 and 2016 and $5.1 billion and $5.8 billion in the nine months ended September 30, 2017 and 2016. Net unrealized gains and losses on available-for-sale securities and realized gains and losses on trading securities were insignificant in the three and nine months ended September 30, 2017 and 2016. Cumulative unrealized gains and losses on available-for-sale securities were insignificant at September 30, 2017 and December 31, 2016.

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheet to the total shown in the condensed consolidated statement of cash flows:
June 30, 2020
Cash and cash equivalents$28,228 
Restricted cash included in Other current assets3,930 
Restricted cash included in Other assets482 
Total$32,640 

Note 5. GM Financial Receivables and Transactions
 September 30, 2017
Cash and cash equivalents$12,792
Restricted cash included in Other current assets1,940
Restricted cash included in Other assets583
Total$15,315
June 30, 2020December 31, 2019
RetailCommercial(a)TotalRetailCommercial(a)Total
GM Financial receivables, net of fees$46,472  $7,489  $53,961  $42,229  $11,671  $53,900  
Less: allowance for loan losses(2,044) (67) (2,111) (866) (78) (944) 
GM Financial receivables, net$44,428  $7,422  $51,850  $41,363  $11,593  $52,956  
Fair value of GM Financial receivables utilizing Level 2 inputs$7,422  $11,593  
Fair value of GM Financial receivables utilizing Level 3 inputs$46,603  $41,973  

__________

(a)Net of dealer cash management balances of $1.3 billion and $1.2 billion at June 30, 2020 and December 31, 2019. Under the cash management program, subject to certain conditions, a dealer may choose to reduce the amount of interest on its floorplan line by making principal payments to GM Financial in advance.
Three Months EndedSix Months Ended
June 30, 2020June 30, 2019June 30, 2020June 30, 2019
Allowance for loan losses at beginning of period$1,966  $924  $944  $911  
Impact of adoption ASU 2016-13 (Note 1)—  —  801  —  
Provision for loan losses327  179  793  354  
Charge-offs(273) (279) (613) (588) 
Recoveries91  132  247  277  
Effect of foreign currency—  1  (61) 3  
Allowance for loan losses at end of period$2,111  $957  $2,111  $957  

The provision for loan losses increased primarily due to increased expected charge-offs and decreased expected recoveries as a result of the economic impact of the novel strain of the coronavirus (COVID-19) pandemic.

Retail Finance Receivables GM Financial's retail finance receivable portfolio includes loans made to consumers and businesses to finance the purchase of vehicles for personal and commercial use. A summary of the amortized cost of the retail finance receivables by FICO score or its equivalent, determined at origination, for each vintage of the retail finance receivables portfolio at June 30, 2020 is as follows:
Year of OriginationJune 30, 2020December 31, 2019
202020192018201720162015PriorTotalPercentTotalPercent
Prime – FICO score 680 and greater$10,305  $9,009  $6,056  $2,774  $940  $253  $9  $29,346  63.2 %$25,400  60.1 %
Near-prime – FICO score 620 to 6791,785  2,533  1,574  828  340  138  25  7,223  15.5 %6,862  16.3 %
Sub-prime – FICO score less than 6201,917  3,178  1,982  1,440  833  396  157  9,903  21.3 %9,967  23.6 %
Retail finance receivables, net of fees$14,007  $14,720  $9,612  $5,042  $2,113  $787  $191  $46,472  100.0 %$42,229  100.0 %

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GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —— (Continued)

Note 4. GM Financial Receivables
 September 30, 2017 December 31, 2016
 Retail Commercial Total Retail Commercial Total
Finance receivables, collectively evaluated for impairment, net of fees$30,052
 $9,119
 $39,171
 $24,480
 $7,506
 $31,986
Finance receivables, individually evaluated for impairment, net of fees2,170
 27
 2,197
 1,920
 27
 1,947
GM Financial receivables32,222
 9,146
 41,368
 26,400
 7,533
 33,933
Less: allowance for loan losses(899) (49) (948) (765) (40) (805)
GM Financial receivables, net$31,323
 $9,097
 $40,420
 $25,635
 $7,493
 $33,128
            
Fair value of GM Financial receivables    $40,513
     $33,181

We estimatereviews the fair value of retail finance receivables using observable and unobservable Level 3 inputs within a cash flow model. The inputs reflect assumptions regarding expected prepayments, deferrals, delinquencies, recoveries and charge-offs of the loans within the portfolio. The cash flow model produces an estimated amortization schedule of the finance receivables. The projected cash flows are then discounted to derive the fair value of the portfolio. Macroeconomic factors could affect the credit performance of the portfolio and therefore could potentially affect the assumptions used in our cash flow model. A substantial majority of our commercial finance receivables have variable interest rates. The carrying amount, a Level 2 input, is considered to be a reasonable estimate of fair value.
 Three Months Ended Nine Months Ended
 September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016
Allowance for loan losses at beginning of period$893
 $828
 $805
 $749
Provision for loan losses204
 167
 573
 501
Charge-offs(287) (284) (858) (826)
Recoveries135
 128
 420
 403
Effect of foreign currency3
 (2) 8
 10
Allowance for loan losses at end of period$948
 $837
 $948
 $837

The allowance for loan losses on retail and commercial finance receivables included a collective allowance of $617 million and $525 million and a specific allowance of $331 million and $280 million at September 30, 2017 and December 31, 2016.

Retail Finance Receivables We use proprietary scoring systems in the underwriting process that measure the credit quality of retail finance receivables using several factors, such as credit bureau information, consumer credit risk scores (e.g. FICO scores or its equivalent) and contract characteristics. We also consider other factors such as employment history, financial stability and capacity to pay. Subsequent to origination we review theongoing credit quality of retail finance receivables based on customer payment activity. In North America, while we historically focused on consumers with lower than prime credit scores, we have expanded our prime lending programs. At September 30, 2017 and December 31, 2016, 39% and 48% of theA retail finance receivables in North America were from consumers with sub-prime credit scores, which are defined as FICO scores or its equivalent of less than 620 at the time of loan origination.

An account is considered delinquent if a substantial portion of a scheduled payment has not been received by the date suchthe payment was contractually due. At September 30, 2017Retail finance receivables are collateralized by vehicle titles and, December 31, 2016subject to local laws, GM Financial generally has the right to repossess the vehicle in the event the customer defaults on the payment terms of the contract. The accrual of finance charge income had been suspended on delinquent retail finance receivables with contractual amounts due of $797$907 million and $798 million.$875 million at June 30, 2020 and December 31, 2019. The following table summarizesis a consolidated summary of the delinquency status of the outstanding amortized cost of retail finance receivables for each vintage of the portfolio at June 30, 2020:
Year of OriginationJune 30, 2020June 30, 2019
202020192018201720162015PriorTotalPercentTotal(a)Percent
Current$13,875  $14,234  $9,224  $4,752  $1,930  $689  $148  $44,852  96.5 %
31-to-60 days86  295  236  181  114  61  25  998  2.2 %$1,083  2.5 %
Greater-than-60 days44  183  147  106  67  36  18  601  1.3 %498  1.2 %
Finance receivables more than 30 days delinquent130  478  383  287  181  97  43  1,599  3.5 %1,581  3.7 %
In repossession2  8  5  3  2  1  —  21  — %48  0.1 %
Finance receivables more than 30 days delinquent or in repossession132  486  388  290  183  98  43  1,620  3.5 %$1,629  3.8 %
Retail finance receivables, net of fees$14,007  $14,720  $9,612  $5,042  $2,113  $787  $191  $46,472  100.0 %
__________
(a)Represents the contractual amountamounts of delinquent retail finance receivables, which is not significantly different than the recorded investmentoutstanding amortized cost for such receivables.

The outstanding amortized cost of retail finance receivables that are considered TDRs was $2.3 billion at June 30, 2020, including $320 million in nonaccrual loans.

Commercial Finance Receivables GM Financial's commercial finance receivables consist of dealer financings, primarily for inventory purchases. Proprietary models are used to assign a risk rating to each dealer. GM Financial performs periodic credit reviews of each dealership and adjusts the dealership's risk rating, if necessary. The commercial finance receivables on nonaccrual status were insignificant at June 30, 2020.

Prior to January 1, 2020, GM Financial estimated the allowance for loan losses based on an analysis of the retail finance receivables:experience of comparable commercial lenders. Effective January 1, 2020, GM Financial establishes the allowance for loan losses based on historical loss experience for the consolidated portfolio, in addition to forecast for industry vehicle sales. The updated risk rating categories are as follows:

RatingDescription
IPerforming accounts with strong to acceptable financial metrics with at least satisfactory capacity to meet financial commitments.
IIPerforming accounts experiencing potential weakness in financial metrics and repayment prospects resulting in increased monitoring.
IIINon-Performing accounts with inadequate paying capacity for current obligations and have the distinct possibility of creating a loss if deficiencies are not corrected.
IVNon-Performing accounts with inadequate paying capacity for current obligations and inherent weaknesses that make collection of liquidation in full highly questionable or improbable.
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GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —— (Continued)

 September 30, 2017 September 30, 2016
 Amount Percent of Contractual Amount Due Amount Percent of Contractual Amount Due
31-to-60 days delinquent$1,176
 3.6% $1,112
 4.4%
Greater-than-60 days delinquent521
 1.6% 491
 1.9%
Total finance receivables more than 30 days delinquent1,697
 5.2% 1,603
 6.3%
In repossession55
 0.2% 57
 0.2%
Total finance receivables more than 30 days delinquent or in repossession$1,752
 5.4% $1,660
 6.5%

At September 30, 2017Dealers with III and December 31, 2016 retail finance receivables classified as troubled debt restructurings and individually evaluated for impairment were $2.2 billion and $1.9 billion and the allowance for loan losses included $328 million and $276 million of specific allowances on these receivables.

Commercial Finance Receivables Our commercial finance receivables consist of dealer financings, primarily for inventory purchases. A proprietary model is used to assign aIV risk rating to each dealer. We perform periodic credit reviews of each dealership and adjust the dealership's risk rating, if necessary. Dealers in Group VIratings are subject to additional monitoring and restrictions on funding, including suspension of lines of credit and liquidation of assets. At September 30, 2017 and December 31, 2016 the commercial finance receivables on non-accrual status were insignificant. The following table summarizes the credit risk profile by dealer risk rating of commercial finance receivables: receivables at June 30, 2020:
Year of Origination(a)June 30, 2020
Revolving202020192018201720162015PriorTotalPercent
I$5,989  $134  $226  $81  $102  $127  $61  $8  $6,728  89.8 %
II388  1  7  3  21  4  13  22  459  6.1 %
III247  —  8  29  2  10  1  —  297  4.0 %
IV1  —  —  —  —  —  4  —  5  0.1 %
Commercial finance receivables, net of fees$6,625  $135  $241  $113  $125  $141  $79  $30  $7,489  100.0 %
__________
(a)Floorplan advances comprise 97% of the total revolving balance. Dealer term loans are presented by year of origination.

Transactions with GM Financial The following table shows transactions between our Automotive segments and GM Financial. These amounts are presented in GM Financial's condensed consolidated balance sheets and statements of income.
June 30, 2020December 31, 2019
Condensed Consolidated Balance Sheets(a)
Commercial finance receivables, net due from GM consolidated dealers$395  $478  
Finance receivables from GM subsidiaries$17  $39  
Subvention receivable(b)$618  $676  
Loans receivable(b)$947  $—  
Commercial loan funding payable$52  $74  

Three Months EndedSix Months Ended
June 30, 2020June 30, 2019June 30, 2020June 30, 2019
Condensed Consolidated Statements of Income
Interest subvention earned on finance receivables$162  $147  $318  $295  
Leased vehicle subvention earned$765  $818  $1,570  $1,653  
__________
(a)All balance sheet amounts are eliminated upon consolidation.
(b)Cash paid by Automotive segments to GM Financial for subvention was $967 million and $959 million in the three months ended June 30, 2020 and 2019 and $2.0 billion in the six months ended June 30, 2020 and 2019. Loans receivable include amounts funded to Automotive segments primarily in the amount of subvention owed to GM Financial in the three months ended June 30, 2020.

GM Financial's Board of Directors declared and paid dividends of $400 million and $800 million on its common stock in the three and six months ended June 30, 2020.

Note 6. Inventories
June 30, 2020December 31, 2019
Total productive material, supplies and work in process$5,149  $4,713  
Finished product, including service parts5,131  5,685  
Total inventories$10,280  $10,398  
11

  September 30, 2017 December 31, 2016
Group I– Dealers with superior financial metrics$1,547
 $1,372
Group II– Dealers with strong financial metrics3,465
 2,526
Group III– Dealers with fair financial metrics2,913
 2,598
Group IV– Dealers with weak financial metrics881
 613
Group V– Dealers warranting special mention due to elevated risks238
 334
Group VI– Dealers with loans classified as substandard, doubtful or impaired102
 90
  $9,146
 $7,533
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GENERAL MOTORS COMPANY AND SUBSIDIARIES
Note 5. Inventories
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —— (Continued)
 September 30, 2017
 GMNA GMIO GMSA Total
Total productive material, supplies and work in process$3,587
 $720
 $649
 $4,956
Finished product, including service parts4,572
 1,425
 836
 6,833
Total inventories$8,159
 $2,145
 $1,485
 $11,789
 December 31, 2016
 GMNA GMIO GMSA Total
Total productive material, supplies and work in process$3,277
 $970
 $761
 $5,008
Finished product, including service parts4,119
 1,208
 705
 6,032
Total inventories$7,396
 $2,178
 $1,466
 $11,040

Note 6.7. Equipment on Operating Leases
Equipment on operating leases primarily consists of leases to retail customers that are recorded asof GM Financial. The current portion of net equipment on operating leases is included in Other current assets.
June 30, 2020December 31, 2019
Equipment on operating leases$50,685  $53,081  
Less: accumulated depreciation(11,078) (10,989) 
Equipment on operating leases, net$39,607  $42,092  

Depreciation expense related to Equipment on operating leases, net was $1.9 billion and vehicle sales$1.8 billion in the three months ended June 30, 2020 and 2019 and$3.7 billionin the six months ended June 30, 2020 and 2019.

The following table summarizes lease payments due to daily rental car companies withGM Financial on leases to retail customers:
Year Ending December 31,
20202021202220232024Total
Lease receipts under operating leases$3,333  $4,961  $2,481  $435  $19  $11,229  

Note 8. Equity in Net Assets of Nonconsolidated Affiliates
Three Months EndedSix Months Ended
June 30, 2020June 30, 2019June 30, 2020June 30, 2019
Automotive China equity income$169  $235  $2  $611  
Other joint ventures equity income43  36  78  74  
Total Equity income$212  $271  $80  $685  
There have been 0 significant ownership changes in our Automotive China joint ventures (Automotive China JVs) since December 31, 2019.
Three Months EndedSix Months Ended
June 30, 2020June 30, 2019June 30, 2020June 30, 2019
Summarized Operating Data of Automotive China JVs
Automotive China JVs' net sales$9,239  $9,002  $13,560  $19,148  
Automotive China JVs' net income$562  $499  $214  $1,266  
Dividends declared but not paid from our nonconsolidated affiliates were $526 million and an insignificant amount at June 30, 2020 and December 31, 2019. Dividends received from our nonconsolidated affiliates were $525 million and $526 million in the three and six months ended June 30, 2020 and $941 million in the three and six months ended June 30, 2019. Undistributed earnings from our nonconsolidated affiliates were $1.7 billion and $2.1 billion at June 30, 2020 and December 31, 2019.
Note 9.Goodwill

We had Goodwill of $1.9 billion at June 30, 2020, which includes $1.3 billion related to GM Financial's North America reporting unit. Since December 31, 2019, the COVID-19 pandemic has caused material disruption to businesses, resulting in an economic slowdown. The economic and social uncertainty resulting from the COVID-19 pandemic indicated that it was more likely than not that a guaranteed repurchase obligation.goodwill impairment existed at March 31, 2020 for GM Financial's North America reporting unit. Therefore, in the three months ended March 31, 2020, we performed an event-driven goodwill impairment test for GM Financial's North America reporting unit and determined no goodwill impairment existed.

The fair value of GM Financial's North America reporting unit at March 31, 2020 was determined based on valuation techniques using the best available information, primarily discounted cash flow projections. We make significant assumptions and estimates about the extent and timing of future cash flows. There can be no assurance that anticipated financial results will
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GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —— (Continued)

 September 30, 2017 December 31, 2016
Equipment on operating leases$52,632
 $41,851
Less: accumulated depreciation(9,225) (6,399)
Equipment on operating leases, net(a)$43,407
 $35,452
__________
(a)Includes $41.8 billion and $34.3 billion of GM Financial equipment on operating leases, net at September 30, 2017 and December 31, 2016.

Depreciation expense related to equipment on operating leases, net was $1.8 billion and $1.3 billion inbe achieved. Under multiple scenarios, including fully weighting the downside cash flow scenario, the estimated fair value of GM Financial's North America reporting unit at March 31, 2020 exceeded its carrying amount. During the three months ended SeptemberJune 30, 20172020, we noted no further material deterioration in our economic performance or outlook that would indicate further testing of goodwill impairment was warranted. Future goodwill impairment could be recognized should economic uncertainty continue, thereby resulting in a prolonged economic slowdown and 2016 and $4.9 billion and $3.3 billiona corresponding decline in the nine months ended September 30, 2017 and 2016.fair value of our reporting units.

The following table summarizes minimum rental payments due to GM Financial on leases to retail customers:
 Year Ending December 31,
 2017 2018 2019 2020 2021
Minimum rental receipts under operating leases$1,800
 $6,256
 $3,861
 $1,182
 $110

Note 7. Equity in Net Assets of Nonconsolidated Affiliates
 Three Months Ended Nine Months Ended
 September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016
Automotive China equity income$459
 $459
 $1,472
 $1,448
Other joint ventures equity income41
 38
 113
 269
Total Equity income$500
 $497
 $1,585
 $1,717
There have been no significant ownership changes in our Automotive China joint ventures (Automotive China JVs) since December 31, 2016.
 Three Months Ended Nine Months Ended
 September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016
Summarized Operating Data of Automotive China JVs       
Automotive China JVs' net sales$12,161
 $10,945
 $34,177
 $32,417
Automotive China JVs' net income$964
 $956
 $2,912
 $3,021

Dividends received from our nonconsolidated affiliates were $382 million and an insignificant amount in the three months ended September 30, 2017 and 2016 and $2.0 billion in the nine months ended September 30, 2017 and 2016. At September 30, 2017 and December 31, 2016 we had undistributed earnings of $1.8 billion and $2.2 billion related to our nonconsolidated affiliates.

Note 8.10. Variable Interest Entities
GM Financial uses special purpose entities (SPEs) that are considered variable interest entities (VIEs)VIEs to issue variable funding notes to third party, bank-sponsored warehouse facilities or asset-backed securities to investors in securitization transactions. The debt issued by these VIEs is backed by finance receivables and leasing relatedleasing-related assets transferred to the VIEs (Securitized Assets). GM Financial determined that it is the primary beneficiary of the SPEs because the servicing responsibilities for the Securitized Assets give GM Financial the power to direct the activities that most significantly impact the performance of the VIEs and the variable interests in the VIEs give GM Financial the obligation to absorb losses and the right to receive residual returns that could potentially be significant. The assets 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 GM Financial or its other assets, with the exception of customary representation and warranty repurchase provisions and indemnities that GM Financial provides as the servicer. GM Financial is not required and does not currently intend to provide additional financial support to these SPEs. While these subsidiaries are included in GM Financial's condensed consolidated financial statements, they are separate legal entities and their assets are legally owned by them and are not available to GM Financial's creditors.

The following table summarizes the assets and liabilities related to GM Financial's consolidated VIEs:

June 30, 2020December 31, 2019
Restricted cash – current$2,269  $2,202  
Restricted cash – non-current$401  $441  
GM Financial receivables, net of fees – current$15,457  $19,081  
GM Financial receivables, net of fees – non-current$14,009  $15,921  
GM Financial equipment on operating leases, net$19,172  $14,464  
GM Financial short-term debt and current portion of long-term debt$24,245  $23,952  
GM Financial long-term debt$15,961  $15,819  
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GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —— (Continued)

 September 30, 2017 December 31, 2016
Restricted cash – current$1,768
 $1,302
Restricted cash – non-current$523
 $478
GM Financial receivables, net of fees – current$13,782
 $12,437
GM Financial receivables, net of fees – non-current$12,411
 $11,917
GM Financial equipment on operating leases, net$23,751
 $19,341
GM Financial short-term debt and current portion of long-term debt$19,207
 $17,526
GM Financial long-term debt$20,981
 $16,659


GM Financial recognizes finance charge, leased vehicle and fee income on the Securitized Assets and interest expense on the secured debt issued in a securitization transaction and records a provision for loan losses to recognize probable loan losses inherent in the finance receivables.


13
Note 9. Automotive and GM Financial Debt



September 30, 2017 December 31, 2016
 Carrying Amount Fair Value Carrying Amount Fair Value
Total automotive debt$13,635
 $14,798
 $10,560
 $11,399
Fair value utilizing Level 1 inputs  $12,877
   $9,515
Fair value utilizing Level 2 inputs  $1,921
   $1,884
Table of Contents

GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —— (Continued)
Note 11. Debt

Automotive The fair valuefollowing table presents debt in our automotive operations:
June 30, 2020December 31, 2019
Carrying AmountFair ValueCarrying AmountFair Value
Secured debt$274  $272  $167  $165  
Unsecured debt34,308  36,093  13,909  15,247  
Finance lease liabilities339  605  310  516  
Total automotive debt(a)$34,921  $36,970  $14,386  $15,928  
Fair value utilizing Level 1 inputs$17,660  $13,628  
Fair value utilizing Level 2 inputs$19,310  $2,300  
Available under credit facility agreements(b)$2,335  $17,285  
Weighted-average interest rate on outstanding short-term debt(c)3.9 %4.9 %
Weighted-average interest rate on outstanding long-term debt(c)3.5 %5.4 %
__________
(a)Includes net discount and debt issuance costs of automotive debt measured utilizing Level 1 inputs was based on quoted prices in active markets for identical instruments that a market participant can access$514 million and $540 million at the measurement date. The fair value of automotive debt measured utilizing Level 2 inputs was based on a discounted cash flow model using observable inputs. This model utilizes observable inputs such as contractual repayment terms and benchmark yield curves, plus a spread based on our senior unsecured notes that is intended to represent our nonperformance risk. We obtain the benchmark yield curves and yields on unsecured notes from independent sources that are widely used in the financial industry. At SeptemberJune 30, 20172020 and December 31, 2016 2019.
(b)Excludes our 364-day, $2.0 billion facility designated for exclusive use by GM Financial.
(c)Includes coupon rates on debt denominated in various foreign currencies and interest free loans.

Unsecured debt primarily consists of revolving credit facilities and senior notes. In the fair valuesix months ended June 30, 2020, we borrowed: (1) $3.4 billion against our three-year, $4.0 billion facility; (2) $2.0 billion against our three-year, $3.0 billion facility, which reduced to $2.0 billion in May 2020 (three-year, $2.0 billion transformation facility); and (3) $10.5 billion against our five-year, $10.5 billion facility, with maturity dates ranging from 2021 to 2023.

In April 2020, we renewed our 364-day, $2.0 billion facility designated for exclusive use by GM Financial for an additional 364-day term and extended $3.6 billion of automotive debt exceeded its carrying amount due primarilythe three-year, $4.0 billion facility for an additional year expiring in April 2022. The remaining portion will expire in April 2021, unless extended. As part of the extension of the three-year, $4.0 billion facility, we have agreed not to a decrease in bond yields compared to yields atexecute any share repurchases until we no longer have outstanding borrowings under the timerevolving credit facilities, except for the three-year, $2.0 billion transformation facility. In addition, we are restricted from paying dividends on our common shares if outstanding borrowings under the revolving credit facilities exceed $5.0 billion, with the exception of issuance.the three-year, $2.0 billion transformation facility.


In August 2017May 2020, we issued $3.0$4.0 billion in aggregate principal amount of senior unsecured notes with an initiala weighted average interest rate of 4.5%6.11% and maturity dates ranging from 20202023 to 2048.2027. The indentures governing these notes containare governed by a sixth supplemental indenture and the same base indenture that governs our existing notes, which contains terms and covenants customary offor these types of securities, including a limitation on the amount of certain secured debt we may incur. The net proceeds from the issuance of these senior unsecured notes wereprovide additional financial flexibility and will be used to repay the $3.0for general corporate purposes. In May 2020, we also entered into a new unsecured 364-day, $2.0 billion drawn on our three-year unsecured revolving credit facility in the three months ended September 30, 2017 to fund the payments to PSA Group, or one or more pension funding vehicles, for the assumed net underfunded pension liabilities in connection with the saleas an additional source of the Opel/Vauxhall Business as described in Note 2.available liquidity.


 September 30, 2017 December 31, 2016
 Carrying Amount Fair Value Carrying Amount Fair Value
Secured debt$40,775
 $40,889
 $35,087
 $35,162
Unsecured debt38,263
 39,411
 29,476
 30,045
Total GM Financial debt$79,038
 $80,300
 $64,563
 $65,207
        
Fair value utilizing Level 2 inputs  $78,293
   $62,951
Fair value utilizing Level 3 inputs  $2,007
   $2,256

GM Financial The fair valuefollowing table presents debt of GM Financial debt measured utilizing Level 2 inputs was based on quoted market prices for identical instruments and if unavailable, quoted market prices of similar instruments. For debt with original maturity or revolving period of eighteen months or less par value is considered to be a reasonable estimate of fair value. The fair value of GM Financial debt measured utilizing Level 3 inputs was based on the discounted future net cash flows expected to be settled using current risk-adjusted rates.Financial:


June 30, 2020December 31, 2019
Carrying AmountFair ValueCarrying AmountFair Value
Secured debt$40,308  $40,673  $39,959  $40,160  
Unsecured debt51,944  52,017  48,979  50,239  
Total GM Financial debt$92,252  $92,690  $88,938  $90,399  
Fair value utilizing Level 2 inputs$91,237  $88,481  
Fair value utilizing Level 3 inputs$1,453  $1,918  
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GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —— (Continued)

Secured debt consists of revolving credit facilities and securitization notes payable. Most of the secured debt was issued by VIEs and is repayable only from proceeds related to the underlying pledged Securitized Assets.assets. Refer to Note 810 for additional information on GM Financial's involvement with VIEs. GM Financial is required to hold certain funds in restricted cash accounts to provide additional collateral for borrowings under certain secured credit facilities. The weighted-average interest rate on secured debt was 2.42% at June 30, 2020. The revolving credit facilities have maturity dates ranging from 2020 to 2026 and securitization notes payable have maturity dates ranging from 2020 to 2027. At the end of the revolving period, if not renewed, the debt of revolving credit facilities will amortize over a defined period. In the ninesix months ended SeptemberJune 30, 2017 we entered into new or2020, GM Financial renewed revolving credit facilities with a total net additional borrowing capacity of $1.7$14.5 billion which had substantially the same terms as existing debt and we issued $18.8$9.0 billion in aggregate principal amount of securitization notes payable with an initial weighted average interest rate of 2.09%1.71% and maturity dates ranging from 20192021 to 2025.2027.


Unsecured debt consists of senior notes, credit facilities and other unsecured debt. Senior notes outstanding at June 30, 2020 have maturity dates ranging from 2020 through 2030 and have a weighted-average interest rate of 3.38%. In the ninesix months ended SeptemberJune 30, 2017 we2020, GM Financial issued $10.6$5.9 billion in aggregate principal amount of senior notes with an initial weighted average interest rate of 2.87%3.41% and maturity dates ranging from 20192023 to 2027.2030.


Each of the revolvingUnsecured credit facilities and the indentures governing GM Financial's notes contain termsother unsecured debt have original maturities of up to four years. The weighted-average interest rate on these credit facilities and covenantsother unsecured debt was 3.15% at June 30, 2020.

Contractual Maturities The following table summarizes contractual maturities including limitations on GM Financial's ability to incur certain liens.finance leases at June 30, 2020:

AutomotiveAutomotive FinancingTotal
2020 (July 1, 2020 to December 31, 2020)$1,489  $21,693  $23,182  
20211,908  27,507  29,415  
20225,160  14,878  20,038  
202313,010  9,329  22,339  
202475  6,170  6,245  
20252,540  6,265  8,805  
Thereafter11,253  5,941  17,194  
$35,435  $91,783  $127,218  


Note 10.12. Derivative Financial Instruments
Automotive The following table presents the notional amounts based on asset or liability positions of derivative financial instruments in our automotive operations:
Fair Value LevelJune 30, 2020December 31, 2019
Fair Value Level September 30, 2017 December 31, 2016
Derivatives designated as hedges(a)    
Assets    
Cash flow hedges    
Derivatives not designated as hedges(a)Derivatives not designated as hedges(a)
Foreign currency2 $—
 $803
Foreign currency2$4,236  $5,075  
Commodity2 73
 106
Total assets $73
 $909
Derivatives not designated as hedges(a)    
Assets    
Foreign currency2/3 $3,671
 $4,483
Commodity2 553
 1,061
Commodity2451  806  
PSA warrants(b)2 47
 —
PSA warrants(b)245  45  
Total assets $4,271
 $5,544
Liabilities    
Foreign currency2/3 $2,025
 $470
Commodity2 70
 181
Total liabilities $2,095
 $651
Total derivative financial instrumentsTotal derivative financial instruments$4,732  $5,926  
__________
(a)The fair value of these derivative instruments at September 30, 2017 and December 31, 2016 and the gains/losses included in our condensed consolidated income statements and statements of comprehensive income for the three and nine months ended September 30, 2017 and 2016 were insignificant.
(b)The fair value of the PSA warrants was $903 million at September 30, 2017.

(a)The fair value of these derivative instruments at June 30, 2020 and December 31, 2019 and the gains/losses included in our condensed consolidated income statements for the three and six months ended June 30, 2020 and 2019 were insignificant, unless otherwise noted.
(b)The fair value of the warrants issued by Peugeot, S.A. (PSA Group) included in Other assets was $659 million and $964 million at June 30, 2020 and December 31, 2019. We recorded gains in Interest income and other non-operating income, net of $114 million and $32 million in the three months ended June 30, 2020 and 2019 and losses of $303 million and gains of $171 million in the six months ended June 30, 2020 and 2019.

We estimate the fair value of the PSA warrants using a Black-Scholes valuation model.formula. The significant inputs to the model include the PSA Group stock price and the estimated dividend yield.The estimated dividend yield is adjusted based on the terms of the Agreement. Under the terms of the Agreement we We are entitled to thereceive any dividends distributeddeclared by PSA sinceGroup through the warrants issuance date. Gains or losses as a resultconversion date upon exercise of the change in the fair value of the PSA warrants are recorded in Interest income and other non-operating income, net.

GM Financial The following table presents the notional amounts based on asset or liability positions of GM Financial's derivative financial instruments:

warrants.
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GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —— (Continued)

GM Financial The following table presents the gross fair value amounts of GM Financial's derivative financial instruments and the associated notional amounts:
 Fair Value Level September 30, 2017 December 31, 2016
Derivatives designated as hedges(a)     
Assets     
 Fair value hedges – interest rate swaps2 $3,500
 $—
 Cash flow hedges     
Interest rate swaps2/3 2,561
 3,070
Foreign currency2 1,356
 —
 Total cash flow hedges  3,917
 3,070
Total assets  $7,417
 $3,070
Liabilities     
 Fair value hedges – interest rate swaps(b)2 $7,860
 $7,700
 Cash flow hedges     
Interest rate swaps2/3 —
 500
Foreign currency2 —
 791
 Total cash flow hedges  —
 1,291
Total liabilities  $7,860
 $8,991
Derivatives not designated as hedges(a)     
Assets     
Interest rate swaps2/3 $33,218
 $7,959
Interest rate caps and floors2 16,810
 9,698
Foreign currency2 1,182
 —
Total assets  $51,210
 $17,657
Liabilities     
Interest rate swaps2/3 $12,823
 $6,170
Interest rate caps and floors2 18,467
 12,146
Total liabilities  $31,290
 $18,316
Fair Value LevelJune 30, 2020December 31, 2019
NotionalFair Value of AssetsFair Value of LiabilitiesNotionalFair Value of AssetsFair Value of Liabilities
Derivatives designated as hedges(a)
Fair value hedges
Interest rate swaps2$10,894  $609  $—  $9,458  $234  $23  
Foreign currency swaps21,797  26  68  1,796  22  71  
Cash flow hedges
Interest rate swaps2964  —  32  590  —  6  
Foreign currency swaps25,143  26  302  4,429  40  119  
Derivatives not designated as hedges(a)
Interest rate contracts2112,403  1,045  807  92,400  340  300  
Total derivative financial instruments(b)$131,201  $1,706  $1,209  $108,673  $636  $519  
__________
(a)The fair value of these derivative instruments at September 30, 2017 and December 31, 2016 and the gains/losses included in our condensed consolidated income statements and statements of comprehensive income for the three and nine months ended September 30, 2017 and 2016 were insignificant.
(b)The fair value of these derivative instruments was $260 million and $276 million at September 30, 2017 and December 31, 2016.
(a)The gains/losses included in our condensed consolidated income statements and statements of comprehensive income for the three and six months ended June 30, 2020 and 2019 were insignificant, unless otherwise noted. Amounts accrued for interest payments in a net receivable position are included in Other assets. Amounts accrued for interest payments in a net payable position are included in Other liabilities.
(b)GM Financial held $778 million and $210 million of collateral from counterparties available for netting against GM Financial's asset positions, and posted $274 million and an insignificant amount of collateral to counterparties available for netting against GM Financial's liability positions at June 30, 2020 and December 31, 2019.

The fair value for Level 2 instruments was derived using the market approach based on observable market inputs including quoted prices of similar instruments and foreign exchange and interest rate forward curves.

The following amounts were recorded in the condensed consolidated balance sheets related to items designated and qualifying as hedged items in fair value hedging relationships:
June 30, 2020December 31, 2019
Carrying Amount of Hedged ItemsCumulative Amount of Fair Value Hedging Adjustments(a)Carrying Amount of Hedged ItemsCumulative Amount of Fair Value Hedging Adjustments(a)
GM Financial unsecured debt$24,203  $(648) $20,397  $(77) 
__________
(a)Includes an insignificant amount of amortization remaining on hedged items for which hedge accounting has been discontinued at June 30, 2020 and December 31, 2019.


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GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —— (Continued)
Note 11. Product Warranty13. Accrued and RelatedOther Liabilities

 Three Months Ended Nine Months Ended
 September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016
Warranty balance at beginning of period$8,890
 $8,639
 $9,069
 $8,550
Warranties issued and assumed in period – recall campaigns
173
 306
 527
 627
Warranties issued and assumed in period – product warranty
481
 631
 1,586
 1,717
Payments(787) (861) (2,382) (2,524)
Adjustments to pre-existing warranties(317) 101
 (405) 390
Effect of foreign currency and other39
 5
 84
 61
Warranty balance at end of period$8,479
 $8,821
 $8,479
 $8,821
June 30, 2020December 31, 2019
Accrued liabilities
Dealer and customer allowances, claims and discounts$6,855  $10,402  
Deferred revenue3,106  3,234  
Product warranty and related liabilities2,728  2,987  
Payrolls and employee benefits excluding postemployment benefits1,573  1,969  
Other8,465  7,895  
Total accrued liabilities$22,727  $26,487  
Other liabilities
Deferred revenue$2,696  $2,962  
Product warranty and related liabilities4,312  4,811  
Operating lease liabilities960  1,010  
Employee benefits excluding postemployment benefits724  704  
Postemployment benefits including facility idling reserves617  633  
Other2,594  3,026  
Total other liabilities$11,903  $13,146  



Three Months EndedSix Months Ended
June 30, 2020June 30, 2019June 30, 2020June 30, 2019
Product Warranty and Related Liabilities
Warranty balance at beginning of period$7,398  $7,552  $7,798  $7,590  
Warranties issued and assumed in period – recall campaigns41  128  158  252  
Warranties issued and assumed in period – product warranty220  529  718  1,056  
Payments(652) (728) (1,533) (1,460) 
Adjustments to pre-existing warranties(1) (57) (20) (22) 
Effect of foreign currency and other34  15  (81) 23  
Warranty balance at end of period$7,040  $7,439  $7,040  $7,439  

We estimate our reasonably possible loss in excess of amounts accrued for recall campaigns to be insignificant at Septemberat June 30, 2017.2020. Refer to Note 1315 for reasonably possible losses on Takata Corporation (Takata) matters.






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GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —— (Continued)


Note 12.14. Pensions and Other Postretirement Benefits
Three Months Ended June 30, 2020Three Months Ended June 30, 2019
Pension BenefitsGlobal OPEB PlansPension BenefitsGlobal OPEB Plans
U.S.Non-U.S.U.S.Non-U.S.
Service cost$63  $37  $4  $98  $29  $4  
Interest cost429  88  44  566  118  55  
Expected return on plan assets(817) (163) —  (871) (192) —  
Amortization of prior service cost (credit)(1) 1  (2) (1) 1  (4) 
Amortization of net actuarial losses4  40  18  3  30  7  
Net periodic pension and OPEB (income) expense$(322) $3  $64  $(205) $(14) $62  
 Three Months Ended September 30, 2017 Three Months Ended September 30, 2016
 Pension Benefits Global OPEB Plans Pension Benefits Global OPEB Plans
 U.S. Non-U.S.  U.S. Non-U.S. 
Service cost$79
 $45
 $4
 $96
 $80
 $4
Interest cost536
 115
 51
 553
 127
 50
Expected return on plan assets(919) (185) —
 (945) (179) —
Amortization of prior service cost (credit)(1) 2
 (3) (1) 4
 (3)
Amortization of net actuarial (gains) losses(2) 29
 8
 (6) 34
 5
Net periodic pension and OPEB (income) expense$(307) $6
 $60
 $(303) $66
 $56


Six Months Ended June 30, 2020Six Months Ended June 30, 2019
Pension BenefitsGlobal OPEB PlansPension BenefitsGlobal OPEB Plans
U.S.Non-U.S.U.S.Non-U.S.
Service cost$125  $66  $9  $196  $64  $8  
Interest cost858  179  87  1,132  238  109  
Expected return on plan assets(1,633) (333) —  (1,739) (387) —  
Amortization of prior service cost (credit)(2) 3  (4) (2) 2  (7) 
Amortization of net actuarial losses8  82  37  6  59  15  
Net periodic pension and OPEB (income) expense$(644) $(3) $129  $(407) $(24) $125  
 Nine Months Ended September 30, 2017 Nine Months Ended September 30, 2016
 Pension Benefits Global OPEB Plans Pension Benefits Global OPEB Plans
 U.S. Non-U.S.  U.S. Non-U.S. 
Service cost$237
 $131
 $14
 $287
 $195
 $13
Interest cost1,608
 366
 149
 1,659
 384
 150
Expected return on plan assets(2,757) (528) —
 (2,834) (538) —
Amortization of prior service cost (credit)(3) 4
 (10) (3) 10
 (10)
Amortization of net actuarial (gains) losses(5) 124
 24
 (19) 104
 15
Net periodic pension and OPEB (income) expense$(920) $97
 $177
 $(910) $155
 $168

We made discretionary contributions to our U.S. hourlyThe non-service cost components of net periodic pension plan of $2.0 billionand other postretirement benefits (OPEB) income of $336 million and $232 million in the ninethree months ended SeptemberJune 30, 2016.2020 and 2019 and $674 million and $462 million in the six months ended June 30, 2020 and 2019 are presented in Interest income and other non-operating income, net.


Note 13.15. Commitments and Contingencies
Litigation-Related Liability and Tax Administrative Matters In the normal course of our business, we are named from time to time as a defendant in various legal actions, including arbitrations, class actions and other litigation, that arise in connection with our business as a global company.litigation. We identify below the material individual proceedings and investigations in connection with whichwhere we believe a material loss is reasonably possible or probable. We accrue for matters when we believe that losses are probable and can be reasonably estimated. At SeptemberJune 30, 20172020 and December 31, 2016 total2019, we had accruals of $1.1 billion and $1.2 billion were recordedand $1.3 billion in Accrued liabilities and Other liabilities. In many proceedings,matters, it is inherently difficult to determine whether any loss is probable or even reasonably possible or to estimate the size or range of the possible loss. Accordingly, an adverse outcomeoutcomes from such proceedings could exceed the amounts accrued by an amount that could be material to our results of operations or cash flows in any particular reporting period.


Proceedings Related to Ignition Switch Recall and Other Recalls In 2014 we announced various recalls relating to safety and other matters. Those recalls included recalls to repair ignition switches that could, under certain circumstances, unintentionally move from the “run” position to the “accessory” or “off” position with a corresponding loss of power, which could in turn prevent airbags from deploying in the event of a crash.


Through October 17, 2017 we wereAppellate Litigation Regarding Successor Liability Ignition Switch Claims In 2016, the U.S. Court of Appeals for the Second Circuit held that the 2009 order of the United States Bankruptcy Court for the Southern District of New York (Bankruptcy Court) approving the sale of substantially all of the assets of Motors Liquidation Company (MLC), formerly known as General Motors Corporation, to GM free and clear of, among other things, claims asserting successor liability for obligations owed by MLC could not be enforced to bar claims against GM asserted by either plaintiffs who purchased used vehicles after the sale or against purchasers who asserted claims relating to the ignition switch defect, including pre-sale personal injury claims and economic-loss claims.

Economic-Loss Claims We are aware of overover 100 putative class actions pendingthat were filed against GM in various courts in the U.S. and CanadaCanadian courts alleging that consumers who purchased or leased vehicles manufactured by GM or General Motors CorporationMLC had been economically harmed by one or more of the 2014 recalls announced in 2014 and/or the underlying vehicle conditions associated with those recalls (economic-loss cases).
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —— (Continued)
In general, these economic-loss cases seek recovery for purported compensatory damages, such as alleged benefit-of-the-bargain damages or damages related to alleged diminution in value of the vehicles, as well as punitive damages, injunctive relief and other relief. There

Many of the pending U.S. economic-loss claims have been transferred to, and consolidated in, a single federal court, the U.S. District Court for the Southern District of New York (Southern District). These plaintiffs have asserted economic-loss claims under federal and state laws, including claims relating to recalled vehicles manufactured by GM and claims asserting successor liability relating to certain recalled vehicles manufactured by MLC.

In August 2017, the Southern District granted our motion to dismiss the successor liability claims of plaintiffs in 7 of the 16 states at issue on the motion and called for additional briefing to decide whether plaintiffs' claims can proceed in the other 9 states. In December 2017, the Southern District granted GM's motion and dismissed the plaintiffs' successor liability claims in an additional state, but found that there are genuine issues of material fact that prevent summary judgment for GM in 8 other states. In January 2018, GM moved for reconsideration of certain portions of the Southern District's December 2017 summary judgment ruling. That motion was granted in April 2018, dismissing plaintiffs' successor liability claims in any state where New York law applies.

In September 2018, the Southern District granted our motion to dismiss claims for lost personal time (in 41 out of 47 jurisdictions) and certain unjust enrichment claims, but denied our motion to dismiss plaintiffs’ economic loss claims in 27 jurisdictions under the "manifest defect" rule.

In August 2019, the Southern District granted our motion for summary judgment on plaintiffs’ economic loss “benefit of the bargain” damage claims (the August 2019 Opinion). The Southern District held that plaintiffs’ conjoint analysis-based damages model failed to establish that plaintiffs suffered difference-in-value damages and without such evidence, plaintiffs’ difference-in-value damage claims fail under the laws of all three bellwether states: California, Missouri and Texas. Later in August 2019, the bellwether plaintiffs filed a motion requesting that the Southern District reconsider its summary judgment decision or allow an interlocutory appeal if reconsideration is alsodenied. In December 2019, the Southern District denied plaintiffs' motion for reconsideration of the August 2019 Opinion, but granted the plaintiffs' motion for certification of an interlocutory appeal. On April 1, 2020, the Second Circuit Court of Appeals (the Second Circuit) granted the bellwether plaintiffs' petition seeking leave to appeal the August 2019 Opinion. On April 15, 2020, the bellwether plaintiffs and GM filed a civil action broughtStipulation to withdraw the appeal from the Second Circuit based on the class settlement agreement described below. Pursuant to the Stipulation, the bellwether plaintiffs can reinstate the appeal no later than April 2021. The Second Circuit endorsed the Stipulation by order on April 16, 2020.

In September 2019, GM filed an updated motion for summary judgment on plaintiffs’ remaining economic loss claims that were not addressed in the Southern District’s August 2019 Opinion and renewed its evidentiary motion seeking to strike the opinions of plaintiff’s expert on plaintiffs’ alleged “lost time” damages associated with having the recall repairs performed.

In March 2020, GM, plaintiffs and the MLC GUC Trust (GUC Trust) reached a settlement agreement (Class Settlement Agreement) to resolve on a national basis the economic loss claims of the proposed settlement class and proposed sub-classes, consisting of consumers who purchased or leased GM vehicles covered by the Arizona Attorney General relating7 2014 safety recalls at issue in the Southern District and the Bankruptcy Court. The proposed Class Settlement Agreement provides a common fund of approximately $120 million for settlement class members, of which GM will fund approximately $70 million and the GUC Trust will fund the remaining $50 million. GM will also pay attorneys’ fees and costs that may be awarded by the Southern District to plaintiffs’ counsel up to a maximum of $35 million. In April 2020, the Avoidance Action Trust (AAT), GM and plaintiffs reached a tentative settlement under which the AAT will pay an insignificant amount and will be added as a settling party to the recallsClass Settlement Agreement. During April and May 2020, the Southern District entered orders granting preliminary approval of the Class Settlement Agreement. The deadline for class members to object to or opt-out of the Class Settlement Agreement is October 2020. The final fairness hearing is set for December 2020.

Contingently Issuable Shares Under the Amended and Restated Master Sale and Purchase Agreement between GM and MLC, GM was obligated to issue additional shares (Adjustment Shares) of our common stock if allowed general unsecured claims against the GUC Trust, as estimated by the Bankruptcy Court, exceed $35.0 billion. In March 2020, in conjunction with the Class Settlement Agreement, the GUC Trust filed a motion in the Bankruptcy Court seeking approval to enter into and take actions necessary to execute the Class Settlement Agreement, and seeking Bankruptcy Court authorization permitting the GUC Trust to distribute $300 million of GUC Trust assets to its unitholders and entry into a mutual release agreement with GM that seeks civil penaltieswould release GM from any and injunctive relief for alleged violationsall claims, including any that would require GM to issue any Adjustment Shares. Bankruptcy
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GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —— (Continued)
Court approval of the GUC Trust motion is a condition precedent to preliminary approval of the Class Settlement Agreement by the Southern District. In April 2020, the Bankruptcy Court entered an order approving the GUC Trust's motion in its entirety. In May 2020, the approval and the mutual release agreement became binding and enforceable and GM was fully released from its potential Adjustment Shares obligation.

Personal Injury ClaimsWe also wereare aware of several hundred actions pending in various courts in the U.S. and Canada alleging injury or death as a result of defects that may be the subject of the 2014 recalls announced in 2014 (personal injury cases). In general, these personal injury cases seek recovery for purported compensatory damages, punitive damages andand/or other relief. Since 2016, several bellwether trials

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personal injury cases have taken place in the personal injury cases in the U.S. District Court for the Southern District of New York (Southern District), which is administering a federal multi-district litigation, and in a Texas state court, which is administering a Texas state multi-district litigation (MDL).litigation. None of these trials resulted in a finding of liability against GM. An additional personal injury bellwether trial is scheduled in 2018 along with non-bellwether trials in various courts.


On July 15, 2016 the Southern District granted in part and denied in part GM's motion to dismiss plaintiffs' complaint in the federal multi-district litigation seeking damages for alleged economic loss relating to the ignition switch and other recalls by GM in 2014. Among other things, the Southern District dismissed plaintiffs' claims brought under the Racketeer Influenced and Corrupt Organization Act (RICO) and rejected plaintiffs' broadest theory of damages – that plaintiffs could seek recovery for alleged reduction in the value of their vehicles due to damage to GM's reputation and brand as a result of the ignition switch matter. The Southern District granted GM's motion to dismiss with respect to certain state law claims but denied it as to other state law claims.

On September 15, 2016, plaintiffs filed a Fourth Amended Consolidated Complaint amending their economic-loss claims, and GM moved to dismiss certain claims in that Complaint as well. On June 30, 2017, the Southern District issued an order granting in part and denying in part GM’s motion. In its order, among other things, the Southern District reaffirmed its dismissal of plaintiffs’ brand devaluation claim and theory of damages and dismissed the claims of any plaintiff who purchased a vehicle before GM came into existence in July 2009. With respect to plaintiffs’ claims under the laws of certain states that were at issue in the motion, the Court granted GM’s motion to dismiss with respect to certain state law claims but denied it as to other state law claims.

In April 2015 the United States Bankruptcy Court for the Southern District of New York (Bankruptcy Court) issued a decision precluding claims against us based upon pre-sale accidents, claims based upon the acts or conduct by General Motors Corporation and claims asserting successor liability for obligations owed by General Motors Corporation (successor liability claims), except for claims asserting liabilities that had been expressly assumed by us in the July 2009 Sale Agreement, and claims that could be asserted against us only if they were otherwise viable and arose solely out of our own independent post-closing acts and did not in any way rely on acts or conduct by General Motors Corporation. 

On July 13, 2016 the United States Court of Appeals for the Second Circuit (Second Circuit) issued a decision and judgment affirming in part, reversing in part, and vacating portions of the Bankruptcy Court's decision and subsequent judgment. Among other things, the Second Circuit held that the 2009 Sale Order could not be enforced to bar claims against GM asserted by either plaintiffs who purchased used vehicles after the sale closing or against purchasers who asserted claims relating to the ignition switch defect, including pre-closing personal injury claims and economic-loss claims. The Second Circuit also vacated that portion of the Bankruptcy Court judgment enforcing the 2009 Sale Order against plaintiffs with pre-sale claims based on defects other than the ignition switch and remanded that issue to the Bankruptcy Court for further proceedings. In April 2017, the United States Supreme Court denied our petition for certiorari. Certain of these pre-sale claims were resolved through GM's Ignition Switch Recall Compensation Program (Compensation Program) and should not be the subject of additional litigation. For Plaintiffs asserting pre-sale claims related to the ignition switch defect that were not resolved by the Compensation Program, those Plaintiffs must still establish their right to assert successor liability claims and demonstrate that their claims have merit. In August 2017, the MDL court granted our motion to dismiss the successor liability claims of Plaintiffs in seven of the sixteen states at issue on the motion and called for additional briefing to decide whether Plaintiffs' claims can proceed in the other nine states.

In the putative shareholder class action filed in the United States District Court for the Eastern District of Michigan (Eastern District) on behalf of purchasers of our common stock from November 17, 2010 to July 24, 2014 (Shareholder Class Action), the lead plaintiff, the New York State Teachers' Retirement System, alleged that GM and several current and former officers and employees made material misstatements and omissions relating to problems with the ignition switch and other matters in SEC filings and other public statements. On May 23, 2016 the Eastern District entered a judgment approving a class-wide settlement of the Shareholder Class Action for $300 million. One shareholder has filed an appeal of the decision approving the settlement.

Three shareholder derivative actions against certain current and former GM directors and officers are pending in the Eastern District. In two of those matters that have been consolidated, the Court issued an Order on August 4, 2017 denying our motion to dismiss without prejudice and granting leave for Plaintiff to file an amended complaint. The court is still considering a motion to dismiss in the other action. Two derivative actions filed in the Circuit Court of Wayne County, Michigan, which have been consolidated, are stayed pending disposition of the federal derivative actions.

Government MattersIn connection with the 2014 recalls, we have from time to time received subpoenas and other requests for information related to investigations by agencies or other representatives of U.S. federal, state and the Canadian governments, including the United States Attorney’s Office for the Southern District of New York (the U.S. Attorney's Office). Ongoing matters or investigations as of September 30, 2017, included litigation initiated by the Arizona Attorney General, litigation initiated by the Orange County

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District Attorney, and investigations by 49 state attorneys general, and an inquiry from the U.S. General Services Administration which has subsequently been closed in light of our obligations under the Deferred Prosecution Agreement (DPA). Investigations into consumer protection claims by 49 state attorneys general and the litigation initiated by the Orange County District Attorney have been resolved. We believe we aregovernments. GM is cooperating fully with all reasonable pending requests for information. SuchAny existing governmental matters or investigations could in the future result in the imposition of damages, fines, civil consent orders, civil and criminal penalties or other remedies.

With regard to the investigation by the U.S. Attorney's Office, on September 16, 2015, we entered into the DPA with the U.S. Attorney's Office regarding its investigation of the events leading up to certain recalls regarding faulty ignition switches. Pursuant to the DPA we have paid the United States $900 million as a financial penalty, and we agreed to retain an independent monitor to review and assess our policies, practices or procedures related to statements about motor vehicle safety, the provision of information to those responsible for recall decisions, recall processes and addressing known defects in certified pre-owned vehicles. In addition, the U.S. Attorney's Office agreed to recommend to the Southern District that prosecution of GM on a two-count information filed in the Southern District be deferred for three years. The U.S. Attorney's Office also agreed that if we are in compliance with all of our obligations under the DPA, the U.S. Attorney's Office will, within 30 days after the expiration of the period of deferral (including any extensions thereto), seek dismissal with prejudice of the two-count information filed against GM. For a further description of the terms and conditions of the DPA refer to Note 15 of our 2016 Form 10-K.


The total amount accrued for ignition switch and the various other related2014 recalls at SeptemberJune 30, 20172020 reflects amounts for a combination of settled but unpaid matters, and for the remaining unsettled investigations, claims and/or lawsuits relating to the ignition switch recalls and other related recalls.recalls to the extent that such matters are probable and can be reasonably estimated. The amounts accrued for those unsettled investigations, claims, and/or lawsuits represent a combination of our best single point estimates where determinable and, where no such single point estimate is determinable, our estimate of the low end of the range of probable loss with regard to such matters, if that is determinable. We believe it is probable that we will incur additional liabilities beyond what has already been accrued for at least a portion of the remaining matters, whether through settlement or judgment; however, we are currently unable to estimate an overall amount or range of loss because these matters involve significant uncertainties, including the legal theory or the nature of the investigations, claims and/or lawsuits, the complexity of the facts, the lack of documentation available to us with respect to particular cases or groups of cases, the results of any investigation or litigation and the timing of resolution of the investigation or litigations, including any appeals, further proceedings regarding interpretation and application of the Second Circuit's July 13, 2016 decision and certain common law doctrines, and further proceedings following the Southern District's July 15, 2016 decision and its June 30, 2017 decision on GM's motion to dismiss the Fourth Amended and Consolidated Complaint. We will continue to consider resolution of pending matters involving ignition switch recalls and other recalls where it makes sense to do so.


GM Korea Wage Litigation Commencing on or about September 29, 2010GM Korea is party to litigation with current and former hourly employees of GM Korea Company (GM Korea) filed eight separate group actions in the appellate court and Incheon District Court in Incheon, Korea. The cases,group actions, which in the aggregate involve more than 10,000 employees, allege that GM Korea failed to include bonuses and certain allowances in its calculation of Ordinary Wages due under the Presidential Decree of the Korean Labor Standards Act. On November 23,regulations. In 2012, the Seoul High Court (an intermediate levelintermediate-level appellate court) affirmed a decision in one of the Incheon District Court in a casethese group actions involving five5 GM Korea employees which was contrary to GM Korea's position. GM Korea appealed to the Supreme Court of the Republic of Korea (Supreme(Korean Supreme Court). On May 29,In 2014, the Korean Supreme Court largely agreed with GM’s legal arguments and remanded the case to the Seoul High Court for consideration consistent with earlier Korean Supreme Court precedent holding that while fixed bonuses should be included in the calculation of Ordinary Wages, claims for retroactive application of this rule would be barred under certain circumstances. OnIn 2015, on reconsideration, the Seoul High Court held in GM Korea’s favor, on October 30, 2015, after which the plaintiffs appealed to the Korean Supreme Court. In July 20142020, the Korean Supreme Court held in GM KoreaKorea's favor. In light of this decision, we believe the probability that we will incur a material loss is remote and its labor union also agreed to include bonuses and certain allowances in Ordinary Wages retroactive to March 1, 2014. Therefore our accrual related to these cases was reclassified from a contingent liability to the Pensions liability. Wewe estimate our reasonably possible loss in excess of amounts accrued to be approximately $547 millionis insignificant at SeptemberJune 30, 2017, which relates to periods before March 1, 2014. We are2020.

GM Korea is also party to litigation with current and former salaried employees over allegations relating to Ordinary Wages regulation. On November 26regulation and 27, 2015 the Supreme Court remanded two salary cases to the Seoul High Court for a review of the merits. On September 1, 2017, the Seoul High Court issued a ruling concerning those two salary cases and another salaried worker case. Among other things, the Seoul High Court held that there was no agreement between GM Korea and its salaried workers regarding whether to include fixed bonuses in the calculation of Ordinary Wages. As a result,In 2017, the Seoul High Court held that certain workers are not barred from filing retroactive wage claims. On September 13, 2017, GM Korea appealed this ruling to the Korean Supreme Court. At September 30, 2017 theThe Korean Supreme Court has not yet rendered a decision. We estimate our reasonably possible loss for salary cases in excess of amounts accrued wasto be approximately $169 million.$170 million at June 30, 2020. Both the scope of claims asserted and GM Korea's assessment of any or all of the individual claim elements may change if new information becomes available. These casesavailable or the legal or regulatory frameworks change.

GM Korea is also party to litigation with current and former subcontract workers over allegations that they are entitled to the same wages and benefits provided to full-time employees, and to be hired as full-time employees. In May 2018, the Korean labor authorities issued an adverse administrative order finding that GM Korea must hire certain current subcontract workers as full-time employees. GM Korea appealed that order, and in June 2020, the Seoul High Court ruled against GM Korea. GM Korea has appealed this decision to the Korean Supreme Court. At June 30, 2020, our accrual covering certain asserted claims and claims that we believe are probable of assertion and for which liability is probable was approximately $190 million. We estimate the reasonably possible loss in excess of amounts accrued for other current subcontract workers who may assert similar claims to be approximately $110 million at June 30, 2020. We are currently pending before various courts in Korea.unable to estimate any possible loss or range of loss that may result from additional claims that may be asserted by former subcontract workers.

GM Brazil Indirect Tax Claim In March 2017 the Supreme Court of Brazil issued a decision concluding that a certain state value added tax should not be included in the calculation of federal gross receipts taxes. The decision reduces GM Brazil’s gross


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receiptsGM Brazil Indirect Tax Claim In 2019, the Superior Court of Brazil rendered favorable decisions on 3 cases brought by GM Brazil challenging whether a certain state value-added tax prospectively and, potentially, retrospectively. The retrospectiveshould be included in the calculation of federal gross receipts taxes. Those decisions granted the Company the right to recover, is under judicial reviewthrough offset of federal tax liabilities, certain amounts collected by the government between August 2001 and we do not expect resolution duringFebruary 2017. IfAs a result, GM Brazil recorded pre-tax recoveries of $380 million and $1.2 billion in Automotive and other cost of sales in the three and six months ended June 30, 2019. We recorded a total of $1.4 billion in pre-tax recoveries in Automotive and other cost of sales in the year ended December 31, 2019. Realization of these recoveries depends on the timing of administrative approvals and generation of federal tax liabilities eligible for offset. The Brazilian IRS has filed a Motion of Clarification on this matter with the Brazilian Supreme Court, which motion is awaiting decision as of Brazil grants retrospective recovery we estimate potential recoveries of up to $1.5 billion. However, given the remaining uncertainty regarding the ultimate judicial resolutiontime of this matterdisclosure. In addition, we are unableexpect third parties to assessmake claims on some or all of the likelihood of any favorable outcome at this time. We have not recorded any amounts relatingpre-tax recoveries, against which GM intends to the retrospective nature of this matter.defend.


Other Litigation-Related Liability and Tax Administrative Matters Various other legal actions, including class actions, governmental investigations, claims and proceedings are pending against us or our related companies or joint ventures, including matters arising out of alleged product defects; employment-related matters; product and workplace safety, vehicle emissions including CO2and nitrogen oxide, fuel economy and related government regulations; product warranties; financial services; dealer, supplier and other contractual relationships; government regulations relating to payments to foreign companies; government regulations relating to competition issues; tax-related matters not subject to the provision of Accounting Standards Codification (ASC) 740, Income Taxes (indirect tax-related matters); product design, manufacture and performance; consumer protection laws; and environmental protection laws, including laws regulating air emissions, water discharges, waste management and environmental remediation.remediation from stationary sources.


There areare several putativeputative class actions pending against GM in federal courts in the U.S. and, in the Provincial Courts in Canada and in Israel alleging that various vehicles sold, including model year 2011-2016 Duramax Diesel Chevrolet Silverado and GMC Sierra vehicles, violate federal, state and stateforeign emission standards. We are unable to estimate any reasonably possible loss or range of loss that may result from these actions. GM has also facesfaced a series of additional lawsuits based primarily on allegations in the Duramax suit,U.S. based on these allegations, including putative shareholder class actions claiming violations of federal securities law. At this early stage of these proceedings, we are unable to provide an evaluation oflaw and a shareholder demand lawsuit. The securities lawsuits have been voluntarily dismissed by the likelihood that a loss will be incurred or an estimate of the amounts or range of possible loss.plaintiffs in those actions.


We believe that appropriate accruals have been established for losses that are probable and can be reasonably estimated. It is possible that the resolution of one or more of these matters could exceed the amounts accrued in an amount that could be material to our results of operations. We also from time to time receive subpoenas and other inquiries or requests for information from agencies or other representatives of U.S. federal, state and foreign governments on a variety of issues.


Indirect tax-related matters are being litigated globally pertaining to value added taxes, customs, duties, sales, property taxes and other non-income tax related tax exposures. The various non-U.S. labor-related matters include claims from current and former employees related to alleged unpaid wage, benefit, severance and other compensation matters. Certain South American administrative proceedings are indirect tax-related and may require that we deposit funds in escrow or provide an alternative form of security which may range from $200 million to $600 million at September 30, 2017.security. Some of the matters may involve compensatory, punitive or other treble damage claims, environmental remediation programs or sanctions that, if granted, could require us to pay damages or make other expenditures in amounts that could not bebe reasonably estimated at SeptemberJune 30, 2017.2020. We believe that appropriate accruals have been established for losses that are probable and can be reasonably estimated.estimated. For indirect tax-related matters we estimate our reasonably possible loss in excess of amounts accrued to be up to approximately $1.0 billion$700 million at SeptemberJune 30, 2017.2020.


Takata Matters OnIn May 4, 2016, the National Highway Traffic Safety Administration (NHTSA) issued an amended consent order requiring Takata to file defect information reports (DIRs) for previously unrecalled front airbag inflators that contain phase-stabilizedphased-stabilized ammonium nitrate-based propellant without a moisture absorbing desiccant on a multi-year, risk-based schedule through 2019 impacting tens of millions of vehicles produced by numerous automotive manufacturers. NHTSA concluded that the likely root cause of the rupturing of the airbag inflators is a function of time, temperature cycling and environmental moisture.


On May 16, 2016 Takata issued its first DIR in connection with the amended consent order, and on January 3, 2017, Takata issued its second set of DIRs. Although we do not believe there is a safety defect at this time in any unrecalled GM vehicles within the scope of the Takata DIRs, in cooperation with NHTSA we have filed Preliminary DIRs on May 27, 2016, updated as of June 13, 2016, covering 2.5 million of certain of our GMT900 vehicles, which are full-size pick-uppickup trucks and sport utility vehicles (SUVs). On November 15, 2016 we filed a petition for inconsequentiality and request for deferral of determination regarding those GMT900 vehicles. On November 28, 2016 NHTSA granted GM's deferral request in connection with this petition. The deferral provided GM until August 31, 2017 to present evidence and analysis that our vehicles do not pose an unreasonable risk to motor vehicle safety.

Takata filed a second set of equipment DIRs on January 3, 2017 and we filed a second set of Preliminary DIRs for certain GMT900 vehicles on January 10, 2017. These January 2017 DIRs are consistent with GM’s May 2016 DIRs. On the same day, weWe have also filed a second petitionpetitions for inconsequentiality and deferral of decision with respect to the vehicles subject to our January

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2017those Preliminary DIRs. On January 18, 2017, NHTSA has consolidated our first and second petitions for inconsequentiality and will rule on boththem at the same time.


On August 25, 2017,While these petitions have been pending, we filed a supplemental brief in support of our petitions thathave provided NHTSA with the results of our long-term studystudies and testing andthe studies performed by third-party experts, all of which form the basis for our determination that the inflators in these vehicles do not present an unreasonable risk to safety and that no repair should ultimately be required. In our brief, we requested that NHTSA grant our petitions or, in the alternative, grant an additional deferral period to provide time for further testing.

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We believe these vehicles are currently performing as designed and ongoing testing continues to support the belief that the vehicles' unique design and integration mitigates against inflator propellant degradation and rupture risk. For example, the airbag inflators used in the vehicles are a variant engineered specifically for our vehicles, and include features such as greater venting, unique propellant wafer configurations, and machined steel end caps. The inflators are packaged in the instrument panel in such a way as to minimize exposure to moisture from the climate control system. Also, these vehicles have features that minimize the maximum temperature to which the inflator will be exposed, such as larger interior volumes and standard solar absorbing windshields and side glass.
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Accordingly, no0 warranty provision has been made for any repair associated with our vehicles subject to the Preliminary DIRs and amended consent order. However, in the event we are ultimately obligated to repair the vehicles subject to current or future Takata DIRs under the amended consent order in the U.S., we estimate a reasonably possible impact to GM of approximately $1.0$1.2 billion.
GM is engaged in discussions with regulatorshas recalled certain vehicles sold outside of the U.S. with respect to replace Takata inflators.inflators in those vehicles. There are significant differences in vehicle and inflator design between the relevant vehicles sold internationally and those sold in the U.S. We continue to gather and analyze evidence about these inflators and to share our findings with regulators. We were required to recall certain vehicles outside of the U.S. in the three months ended September 30, 2017 to replace Takata inflators in these vehicles. Additional recalls, if any, could be material to our results of operations and cash flows. We continue to monitor the international situation.
Through October 17, 2017 we were aware of twoThere are several putative class actions pendingthat have been filed against GM, including in the federal courtcourts in the U.S., one putative class action in Mexico and four putative class actions pending in variousthe Provincial Courts in Canada, arisingand in Mexico and Israel, arising out of allegations that airbag inflators manufactured by Takata are defective. At this early stage of these proceedings, we are unable to provide an evaluation of the likelihood that a loss will be incurred or an estimate of the amounts or range of possible loss. On August 16,

Opel/Vauxhall Sale In 2017 we sold the bankruptcy court hearingOpel and Vauxhall businesses and certain other assets in Europe (the Opel/Vauxhall Business) to PSA Group. We also sold the Takata bankruptcyEuropean financing subsidiaries and branches (the Fincos, and together with the Opel/Vauxhall Business, the European Business) to Banque PSA Finance S.A. and BNP Paribas Personal Finance S.A. Our wholly owned subsidiary (the Seller) agreed to indemnify PSA Group for certain losses resulting from any inaccuracy of the representations and warranties or breaches of our covenants included in the Master Agreement (the Agreement) and for certain other liabilities, including certain emissions and product liabilities. The Company entered into a guarantee for the benefit of PSA Group and pursuant to which the Company agreed to guarantee the Seller's obligation to indemnify PSA Group. Certain of these indemnification obligations are subject to time limitations, thresholds and/or caps as to the amount of required payments.

Although the sale reduced our new vehicle presence in Europe, we may still be impacted by actions taken by regulators related to vehicles sold before the sale. In Germany, the Kraftfahrt-Bundesamt (KBA) issued an order staying all Takatain November 2019, which converted a voluntary recall initiated by Opel in 2017 and 2018 into a mandatory recall for allegedly failing to comply with certain emissions regulations. However, because the overwhelming majority of vehicles have already received KBA-approved software calibration updates pursuant to the voluntary recall, the number of vehicles subject to the mandatory recall is insignificant. The Seller may also be obligated to indemnify PSA Group or otherwise absorb costs and expenses resulting from the foregoing as well as certain related potential litigation against automotive manufacturers, including GM, until November 16, 2017.costs, settlements, judgments and potential fines. In addition, at the KBA's request, the German authorities re-opened a separate criminal investigation related to this matter that had previously been closed with no action. We are unable to estimate any reasonably possible loss or range of loss that may result from this matter.


Transactions with PSA We continue to purchase from and supply to PSA Group certain vehicles, parts and engineering services for a period of time following the sale. The following table summarizes transactions with the Opel/Vauxhall Business:
Three Months EndedSix Months Ended
June 30, 2020June 30, 2019June 30, 2020June 30, 2019
Net sales and revenue(a)$8  $441  $61  $868  
Purchases and expenses(a)$56  $213  $204  $405  
Cash payments(b)$458  $616  
Cash receipts(b)$177  $1,057  
__________
(a)Included in Net income (loss).
(b)Included in Net cash provided by (used in) operating activities.

Product Liability With respect to product liability claims (other than claims relating to the ignition switch recalls discussed above) involving GM and General Motors Corporation products, we believe that any judgment against us for actual damages will be adequately covered by ourWe recorded accruals and, where applicable, excess liability insurance coverage. In addition we indemnify dealers for certain product liability related claims, including claims related to products sold by General Motors Corporation's dealers. At September 30, 2017 and December 31, 2016 liabilitiesliabilities of $615$562 million and $656and $544 million were recorded in Accrued liabilities and Other liabilities at June 30, 2020 and December 31, 2019 for the expected cost of all known product liability claims, plus an estimate of the expected cost for product liability claims that have already been incurred and are expected to be filed in the future for which we are self-insured. In light of vehicle recalls in recent years itIt is reasonably possible that our accruals for product liability claims may increase in future periods in material amounts, although we cannot estimate a reasonable range of incremental loss based on currently available information. Other than claims relating to the ignition switch recalls discussed above, we believe that any judgment against us involving our and MLC products for actual damages will be adequately covered by our recorded accruals and, where applicable, excess liability insurance coverage.

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Guarantees We enter into indemnification agreements for liabilityliability claims involving products manufactured primarily by certain joint ventures. We also provide vehicle repurchase guarantees and payment guarantees on commercial loans outstanding with third parties such as dealers. These guarantees terminate in years ranging from 20172020 to 20322025 or upon the occurrence of specific events or are ongoing. We believe that the related potential costs incurred are adequately covered andby our recorded accruals, which are insignificant. The maximum liability, calculated as future undiscounted payments was $5.2mainly based on vehicles sold to date were $3.1 billion and $4.3$2.6 billion for these guarantees at SeptemberJune 30, 20172020 and December 31, 2016,2019, the majority of which relaterelates to the indemnification agreements.


We provide payment guarantees on commercial loans outstanding with third parties such as dealers. In some instances, certain assets of the party or our payables to the party whose debt or performance we have guaranteed may offset, to some degree, the amount of any potential future payments. We are also exposed to residual value guarantees associated with certain guarantees. Our payablessales to the party whose debt or performance we have guaranteed may also reduce the amount of certain guarantees. If vehicles are required to be repurchased under vehicle repurchase obligations, the total exposure would be reduced to the extent vehicles are able to be resold to another dealer.rental car companies.



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We periodicallyperiodically enter into agreements that incorporate indemnification provisions in the normal course of business. It is not possible to estimate our maximum exposure under these indemnifications or guarantees due to the conditional nature of these obligations. Insignificant amounts have been recorded for such obligations as the majority of them are not probable or estimable at this time and the fair value of the guarantees at issuance was insignificant. Refer to the Opel/Vauxhall Sale section of this note for additional information on our indemnification obligations to PSA Group under the Agreement.


Note 14. 16.Income Taxes
For interim income tax reporting, we estimate our annual effective tax rate and apply it to our year to dateyear-to-date ordinary income (loss). Tax jurisdictions with a projected or year to dateyear-to-date loss for which a tax benefit cannot be realized are excluded. The tax effects of unusual or infrequently occurring items, including changes in judgment about valuation allowances and effects of changes in tax laws or rates, are reported in the interim period in which they occur. We have open tax years from 20072011 to 20162019 with various significant tax jurisdictions.


In the three months ended SeptemberJune 30, 20172020, Income tax benefit of $112 million was primarily due to tax benefit attributable to entities included in our effective tax rate calculation. In the three months ended June 30, 2019, Income tax expense of $2.3 billion$524 million was primarily resulted fromdue to tax expense attributable to entities included in our effective tax rate calculation, of $583 million including tax benefits from foreign dividends and $2.3 billion related to the establishment of a valuation allowance on deferred tax assets that will no longer be realizable as a result of the sale of the Opel/Vauxhall Business as described in Note 2, partially offset by tax benefits related to tax settlements.

In the threesix months ended SeptemberJune 30, 20162020, Income tax expense of $902$245 million on a pre-tax loss was primarily resulted fromdue to tax expense attributable to entities in our effective tax rate calculation and the establishment of a valuation allowance against deferred tax assets. In the six months ended June 30, 2019, Income tax expense of $661 million was primarily due to tax expense attributable to entities included in our effective tax rate calculation, of $1.3 billion, partially offset by tax benefits related to foreign currency losses.

In the nine months ended September 30, 2017 Incomea release of valuation allowance, tax expense of $3.6 billion primarily resulted from tax expense attributable to entities included in our effective tax rate calculation of $2.1 billion including taxsettlements and benefits from foreign dividends and $2.3 billion related to the establishment of a valuation allowance on deferred tax assets that will no longer be realizable as a result of the sale of the Opel/Vauxhall Business as described in Note 2, partially offset by tax benefits related to tax settlements. In the nine months ended September 30, 2016 Income tax expense of $2.4 billion primarily resulted from tax expense attributable to entities included in our effective tax rate calculation of $3.4 billion, partially offset by tax benefits related to foreign currency losses, tax settlements and deductions taken for stock investments in non-U.S. affiliates.dividends.


At SeptemberJune 30, 20172020, we had $30.1$24.1 billion of net deferred tax assets consisting of net operating losses and income tax credits, capitalized research expenditures and other timing differences that are available to offset future income tax liabilities, partially offset by valuation allowances. The net operating losses and income tax credits include U.S. operating loss and tax credit carryforward deferred tax assets of $9.6 billion that expire by 2037 if not utilized; and Non-U.S. operating loss and tax credit carryforward deferred tax assets of $4.9 billion of which $946 million expire by 2037 if not utilized and $4.0 billion can be carried forward indefinitely.


Note 15.17. Restructuring and Other Initiatives
We have executed various restructuring and other initiatives and we may execute additional initiatives in the future, if necessary, to streamline manufacturing capacity and reduce other costs to improve the utilization of remaining facilities. To the extent these programs involve voluntary separations, no liabilities area liability is generally recorded untilat the time offers to employees are accepted. To the extent these programs provide separation benefits in accordance with pre-existing agreements, a liability is recorded once the amount is probable and reasonably estimable. If employees are involuntarily terminated, a liability is generally recorded at the communication date. Related charges are recorded in Automotive and other cost of sales and Automotive and other selling, general and administrative expense.

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The following table summarizes the reserves and charges related to restructuring and other initiatives, including postemployment benefit reserves and charges:
Three Months EndedSix Months Ended
June 30, 2020June 30, 2019June 30, 2020June 30, 2019
Balance at beginning of period$583  $830  $564  $1,122  
Additions, interest accretion and other35  242  254  288  
Payments(163) (166) (338) (483) 
Revisions to estimates and effect of foreign currency25  13  —  (8) 
Balance at end of period$480  $919  $480  $919  
 Three Months Ended Nine Months Ended
 September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016
Balance at beginning of period$493
 $333
 $268
 $383
Additions, interest accretion and other43
 29
 333
 369
Payments(75) (24) (150) (429)
Revisions to estimates and effect of foreign currency(7) (30) 3
 (15)
Balance at end of period$454
 $308
 $454
 $308


In the ninethree and six months ended SeptemberJune 30, 2017,2020, restructuring and other initiatives primarily include restructuringincluded actions announcedin GMI related to the wind-down of Holden sales, design and engineering operations in Australia and New Zealand and the execution of binding term sheets to sell our vehicle and powertrain manufacturing facilities in Thailand. We recorded charges of $92 million in the three months ended June 30, 2017 in GMIO. These actions related2020, primarily to the withdrawal of Chevrolet from the Indian and South African markets by the end of 2017 and the transition of our South Africa manufacturing operations to Isuzu Motors. We intend to continue manufacturing vehicles in India for sale to certain export markets.inventory provisions. We recorded charges of $460$581 million in GMIOthe six months ended June 30, 2020, primarily consisting of $297$335 million ofin property and intangible asset impairments, sales incentives, inventory provisions, sales allowances and other

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —— (Continued)

charges, not reflected in the table above, and $163$246 million ofin dealer restructurings and employee separationsseparation charges, which are reflected in the table above. We also recorded a $236 million charge to Income tax expense due to the establishment of a valuation allowance against deferred tax assets in Australia and New Zealand in the six months ended June 30, 2020. We incurred $69 million in net cash outflows resulting from these restructuring actions, primarily for sales allowances payments and dealer restructuring payments in the six months ended June 30, 2020. We expect to incur additional restructuring and other contract cancellation costs,charges of approximately $400 million and additional net cash outflows of approximately $200 million, which includes expected proceeds of approximately $130 million from the sale of our manufacturing facility in Thailand, to be substantially complete by the end of 2020.

In the three and six months ended June 30, 2019, restructuring and other initiatives primarily included actions related to our announced transformation activities, which includes the unallocation of products to certain manufacturing facilities and other employee separation programs. We recorded charges of $361 million, primarily in GMNA, in the three months ended June 30, 2019 consisting of $231 million in supplier-related charges, which are reflected in the table above, and insignificant costs for separation and other programs$130 million primarily in non-cash accelerated depreciation, not reflected in the table above. We recorded charges of $1.2 billion, primarily in GMNA, and GMSA. We expect to complete these programs in 2017.
Other GMIO restructuring programsthe six months ended June 30, 2019 consisting of $911 million primarily in non-cash accelerated depreciation, not reflected in the table above, include separation and other programs$240 million primarily in Australia, Korea and India andsupplier-related charges, which are reflected in the withdrawal of the Chevrolet brand from Europe. Collectively thesetable above. These programs had a total cost since inception of $3.1 billion and were complete at December 31, 2019. We incurred $307 million and $487 million in 2013 of $883 million.cash outflows resulting from these restructuring actions in the six months ended June 30, 2020 and 2019, primarily for employee separations payments, and $1.4 billion in cash outflows since program inception, primarily for employee separation payments and supplier-related payments. We expect to complete these programs in 2017 and incur insignificant additional restructuring and other charges.

In the nine months ended September 30, 2016 restructuring and other initiatives related primarily to charges of $240 million in the three months ended March 31, 2016 in GMNAcash outflows related to these activities of approximately $100 million to be substantially complete by the cash severance incentive program to qualified U.S. hourly employees under our 2015 labor agreement with the International Union, United Automobile, Aerospace and Agriculture Implement Workersend of America (UAW) and insignificant costs for separation and other programs in Australia, Korea and India and the withdrawal of the Chevrolet brand from Europe.2020.


Note 16.18. Stockholders' Equity and Noncontrolling Interests
At September 30, 2017 and December 31, 2016 we hadWe have 2.0 billion shares of preferred stock and 5.0 billion shares of common stock authorized for issuance. At September 30, 2017We had 0 shares of preferred stock and December 31, 2016 we had 1.4 billion and 1.5 billion shares of common stock issued and outstanding.outstanding at June 30, 2020 and December 31, 2019.

Cruise Preferred Shares In the nine months ended September 30, 2017May 2019, GM Cruise Holdings LLC (Cruise Holdings) issued $1.1 billion of Cruise Class F Preferred Shares, including $687 million of Cruise Class F Preferred Shares to General Motors Holdings LLC. In August 2019, an additional insignificant amount of Cruise Class F Preferred Shares were issued to SoftBank Vision Fund (AIV M2), L.P. (The Vision Fund). All proceeds from these issuances are designated exclusively for working capital and 2016 we purchased 86 million and 48 million sharesgeneral corporate purposes of our outstandingCruise. The Cruise Class F Preferred Shares only convert into common stock for $3.0 billion and $1.5 billion as part of the common stock repurchase program announced in March 2015, which our BoardCruise Holdings, at specified exchange ratios, upon occurrence of Directors increased and extended in January 2016 and January 2017. Our total dividends paid on common stock were $546 million and $585 million in the three months ended September 30, 2017 and 2016 and $1.7 billion and $1.8 billion in the nine months ended September 30, 2017 and 2016.

In September 2017 GM Financial issued $1.0 billion of Fixed-to-Floating Rate Cumulative Perpetualan initial public offering. The Cruise Class F Preferred Stock, Series A, $0.01 par value, with a liquidation preference of $1,000 per share. The preferred stock isShares are classified as noncontrolling interests onin our condensed consolidated financial statements. Dividends will be paid semi-annually when declared starting March 30, 2018 at a fixed rate of 5.75% or approximately $58 million annually for the first 10 years after issuance, after which, if not called, dividends will be paid based on a floating rate. The following table summarizes the significant components of Accumulated other comprehensive loss:

 Three Months Ended Nine Months Ended
 September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016
Foreign Currency Translation Adjustments       
Balance at beginning of period$(2,162) $(1,959) $(2,355) $(2,034)
Other comprehensive income (loss) net of reclassification adjustment, noncontrolling interests and tax(a)(b)370
 (70) 563
 5
Balance at end of period$(1,792) $(2,029) $(1,792) $(2,029)
Defined Benefit Plans       
Balance at beginning of period$(7,208) $(5,950) $(6,968) $(5,999)
Other comprehensive income (loss) before reclassification adjustment, net of tax(a)87
 (3) (256) (18)
Reclassification adjustment, net of tax(a)(c)1,126
 33
 1,229
 97
Other comprehensive income, net of tax(a)1,213
 30
 973
 79
Balance at end of period$(5,995) $(5,920) $(5,995) $(5,920)
__________
(a)The income tax effect was insignificant in the three and nine months ended September 30, 2017 and 2016.
(b)The reclassification adjustments and noncontrolling interests were insignificant in the three and nine months ended September 30, 2017 and 2016.
(c)$1.2 billion is included in the loss on sale of the Opel/Vauxhall Business in the three and nine months ended September 30, 2017. An insignificant amount is included in the computation of periodic pension and OPEB (income) expense in the three and nine months ended September 30, 2017 and 2016.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —— (Continued)

The following table summarizes the significant components of Accumulated other comprehensive loss:
Three Months EndedSix Months Ended
June 30, 2020June 30, 2019June 30, 2020June 30, 2019
Foreign Currency Translation Adjustments
Balance at beginning of period$(3,091) $(2,125) $(2,277) $(2,250) 
Other comprehensive income (loss) and noncontrolling interests, net of reclassification adjustment and tax(a)(b)(101) 47  (915) 172  
Balance at end of period$(3,192) $(2,078) $(3,192) $(2,078) 
Defined Benefit Plans
Balance at beginning of period$(8,540) $(6,701) $(8,857) $(6,737) 
Other comprehensive income (loss) before reclassification adjustment, net of tax(b)(97) (28) 166  (29) 
Reclassification adjustment, net of tax(b)58  34  112  71  
Other comprehensive income (loss), net of tax(b)(39) 6  278  42  
Balance at end of period(c)$(8,579) $(6,695) $(8,579) $(6,695) 
__________
(a)The noncontrolling interests and reclassification adjustment were insignificant in the three and six months ended June 30, 2020 and 2019.
(b)The income tax effect was insignificant in the three and six months ended June 30, 2020 and 2019.
(c)Primarily consists of unamortized actuarial loss on our defined benefit plans. Refer to Note 17.2. Significant Accounting Policies of our 2019 Form 10-K for additional information.

Note 19. Earnings Per Share
 Three Months Ended Nine Months Ended
 September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016
Basic earnings per share       
Income from continuing operations(a)$115
 $2,768
 $5,222
 $7,473
Less: cumulative dividends on GM Financial preferred stock(2) —
 (2) —
Income from continuing operations attributable to common stockholders113
 2,768
 5,220
 7,473
Income (loss) from discontinued operations, net of tax(3,096) 5
 (3,935) 119
Net income (loss) attributable to common stockholders$(2,983) $2,773
 $1,285
 $7,592
        
Weighted-average common shares outstanding1,445
 1,550
 1,483
 1,548
        
Basic earnings per common share – continuing operations$0.08
 $1.79
 $3.52
 $4.83
Basic earnings (loss) per common share – discontinued operations$(2.14) $—
 $(2.65) $0.07
Basic earnings (loss) per common share$(2.06) $1.79
 $0.87
 $4.90
Diluted earnings per share       
Income from continuing operations attributable to common stockholders – diluted(a)$113
 $2,768
 $5,220
 $7,472
Income (loss) from discontinued operations, net of tax – diluted$(3,096) $5
 $(3,935) $119
Net income (loss) attributable to common stockholders – diluted$(2,983) $2,773
 $1,285
 $7,591
        
Weighted-average common shares outstanding – basic1,445
 1,550
 1,483
 1,548
Dilutive effect of warrants and awards under stock incentive plans27
 24
 24
 30
Weighted-average common shares outstanding – diluted1,472
 1,574
 1,507
 1,578
        
Diluted earnings per common share – continuing operations$0.08
 $1.76
 $3.46
 $4.73
Diluted earnings (loss) per common share – discontinued operations$(2.11) $—
 $(2.61) $0.08
Diluted earnings (loss) per common share$(2.03) $1.76
 $0.85
 $4.81
Potentially dilutive securities(b)6
 26
 6
 26
Three Months EndedSix Months Ended
June 30, 2020June 30, 2019June 30, 2020June 30, 2019
Basic earnings per share
Net income (loss) attributable to stockholders$(758) $2,418  $(464) $4,575  
Less: cumulative dividends on subsidiary preferred stock(48) (37) (95) (75) 
Net income (loss) attributable to common stockholders$(806) $2,381  $(559) $4,500  
Weighted-average common shares outstanding1,432  1,420  1,432  1,419  
Basic earnings (loss) per common share$(0.56) $1.68  $(0.39) $3.17  
Diluted earnings per share
Net income (loss) attributable to common stockholders – diluted$(806) $2,381  $(559) $4,500  
Weighted-average common shares outstanding – basic1,432  1,420  1,432  1,419  
Dilutive effect of warrants and awards under stock incentive plans—  18  —  18  
Weighted-average common shares outstanding – diluted1,432  1,438  1,432  1,437  
Diluted earnings (loss) per common share$(0.56) $1.66  $(0.39) $3.13  
Potentially dilutive securities(a)43  7  43  7  
__________
(a)
Net of Net (income) loss attributable to noncontrolling interests.
(b)Potentially dilutive securities attributable to outstanding stock options were excluded from the computation of diluted earnings per share because the securities would have had an antidilutive effect.

(a)Potentially dilutive securities attributable to outstanding stock options, Performance Share Units (PSUs) and Restricted Stock Units (RSUs) were excluded from the computation of diluted earnings per share (EPS) because the securities would have had an antidilutive effect.

Note 18.Acquisition of Business

On May 12, 2016 we acquired all of the outstanding capital stock of Cruise Automation Inc., an autonomous vehicle technology company, to further accelerate our development of autonomous vehicles. The deal consideration at closing was $581 million, of which $291 million was paid in cash and approximately $290 million was paid through the issuance of new common stock. The fair value of the common stock issued was determined based on the closing price of our common stock on May 12, 2016. In conjunction with the acquisition, we entered into other agreements that will result in future costs contingent upon the continued employment of key individuals and additional performance-based awards contingent upon the achievement of specific technology and commercialization milestones.

Of the total consideration, $130 million was allocated to intangible assets, primarily in-process research and development with an indefinite life until fully developed and commercialized, $39 million was allocated to deferred tax liabilities, net of other assets, and $490 million was allocated to non-tax-deductible goodwill in Corporate primarily related to the synergies expected to arise as a result of the acquisition.


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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —— (Continued)

Note 19.20. Segment Reporting

We analyze the results of our business through the following reportable segments: GMNA, GMIO, GMSAGMI, Cruise and GM Financial. As discussed in Note 2, the European Business is presented as discontinued operations and is excluded from our segment results for all periods presented. The European Business was previously reported as our GM Europe (GME) segment and part of GM Financial. The chief operating decision maker evaluates the operating results and performance of our automotive segments and Cruise
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —— (Continued)
through earnings before interest and income taxes-adjusted,taxes (EBIT)-adjusted, which is presented net of noncontrolling interests. The chief operating decision maker evaluates GM Financial through earnings before income taxes-adjustedtaxes (EBT)-adjusted because interest income and interest expense are part of operating results when assessing and measuring the operational and financial performance of the segment. Each segment has a manager responsible for executing our strategic initiatives. Our automotive manufacturing operations are integrated within the segments, benefit from broad-based trade agreements and are subject to regulatory requirements. While not all vehicles within a segment are individually profitable on a fully allocated cost basis, those vehicles attract customers to dealer showrooms and help maintain sales volumes for other, more profitable vehicles and contribute towards meeting required fuel efficiency standards. As a result of these and other factors, we do not manage our business on an individual brand or vehicle basis.


Substantially all of the cars, trucks, crossovers, cars and automobile parts produced are marketed through retail dealers in North America and through distributors and dealers outside of North America, the substantial majority of which are independently owned. In addition to the products sold to dealers for consumer retail sales, cars, trucks, crossovers and crossoverscars are also sold to fleet customers, including daily rental car companies, commercial fleet customers, leasing companies and governments. Fleet sales are completed through the dealer network and in some cases directly with fleet customers. Retail and fleet customers can obtain a wide range of after-sale vehicle services and products through the dealer network, such as maintenance, light repairs, collision repairs, vehicle accessories and extended service warranties.


GMNA primarily meets the demands of customers in North America with vehicles developed, manufactured and/or marketed under the Buick, Cadillac, Chevrolet and GMC brands. TheGMI primarily meets the demands of customers outside North America are primarily met with vehicles developed, manufactured and/or marketed under the Buick, Cadillac, Chevrolet, GMC and Holden brands. We also have equity ownership stakes directly or indirectly in entities through various regional subsidiaries,that meet the demands of customers in other countries, primarily in Asia. These companies design, manufactureChina, with vehicles developed, manufactured and/or market vehiclesmarketed under the Baojun, Buick, Cadillac, Chevrolet Jiefang and Wuling brands. Cruise, formerly GM Cruise, is our global segment responsible for the development and commercialization of autonomous vehicle technology, and includes autonomous vehicle-related engineering and other costs.


Our automotive operations' interest income and interest expense, Maven, legacy costs from the Opel/Vauxhall Business (primarily pension costs), corporate expenditures including autonomous vehicle-related engineering and other costs and certain nonsegment specificnonsegment-specific revenues and expenses are recorded centrally in Corporate. Corporate assets primarily consist primarily of cash and cash equivalents, marketable debt securities, our investment in Lyft, goodwill, intangibles, Maven vehiclesPSA warrants and intercompany balances. Retained net underfunded pension liabilities related to the European Business are also recorded in Corporate. All intersegment balances and transactions have been eliminated in consolidation.

Beginning in the three months ended December 31, 2017, we intend to change our reportable segments as a result of planned changes in our organizational structure and the evolution of our business resulting from the sale of the Opel/Vauxhall Business and the various strategic actions taken in the GMIO region. As a result, our GMSA and GMIO segments will be reported as one, combined reportable international segment, GM International (GMI). Our GMNA and GM Financial segments will not be impacted.


The following tables summarize key financial information by segment:

At and For the Three Months Ended June 30, 2020
GMNAGMICorporateEliminationsTotal AutomotiveCruiseGM FinancialEliminations/ReclassificationsTotal
Net sales and revenue$11,604  $1,677  $80  $13,361  $28  $3,423  $(34) $16,778  
Earnings (loss) before interest and taxes-adjusted$(101) $(270) $(182) $(553) $(195) $226  $(14) $(536) 
Adjustments(a)$—  $(92) $—  $(92) $—  $—  $—  (92) 
Automotive interest income61  
Automotive interest expense(303) 
Net (loss) attributable to noncontrolling interests(22) 
Loss before income taxes(892) 
Income tax benefit112  
Net loss(780) 
Net loss attributable to noncontrolling interests22  
Net loss attributable to stockholders$(758) 
Equity in net assets of nonconsolidated affiliates$133  $6,107  $—  $—  $6,240  $—  $1,484  $—  $7,724  
Goodwill and intangibles$2,399  $819  $1  $—  $3,219  $726  $1,337  $—  $5,282  
Total assets$101,521  $21,494  $43,258  $(41,700) $124,573  $3,963  $111,154  $(2,155) $237,535  
Depreciation and amortization$1,127  $149  $6  $—  $1,282  $11  $1,965  $—  $3,258  
Impairment charges$—  $7  $—  $—  $7  $—  $—  $—  $7  
Equity income$5  $165  $—  $—  $170  $—  $42  $—  $212  
__________
(a)Consists of restructuring and other charges in Australia, New Zealand and Thailand.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —— (Continued)

At and For the Three Months Ended June 30, 2019
GMNAGMICorporateEliminationsTotal
Automotive		CruiseGM
Financial		Eliminations/ReclassificationsTotal
Net sales and revenue$28,324  $4,047  $54  $32,425  $25  $3,639  $(29) $36,060  
Earnings (loss) before interest and taxes-adjusted$3,022  $(48) $(216) $2,758  $(279) $536  $(3) $3,012  
Adjustments(a)$(336) $357  $(2) $19  $—  $—  $—  19  
Automotive interest income106  
Automotive interest expense(195) 
Net (loss) attributable to noncontrolling interests(15) 
Income before income taxes2,927  
Income tax expense(524) 
Net income2,403  
Net loss attributable to noncontrolling interests15  
Net income attributable to stockholders$2,418  
Equity in net assets of nonconsolidated affiliates$82  $6,800  $12  $—  $6,894  $—  $1,446  $—  $8,340  
Goodwill and intangibles$2,520  $908  $1  $—  $3,429  $670  $1,358  $—  $5,457  
Total assets$114,515  $26,681  $29,597  $(50,446) $120,347  $4,212  $110,711  $(1,533) $233,737  
Depreciation and amortization$1,409  $119  $13  $—  $1,541  $7  $1,848  $—  $3,396  
Impairment charges$8  $3  $—  $—  $11  $—  $—  $—  $11  
Equity income (loss)$2  $233  $(6) $—  $229  $—  $42  $—  $271  
__________
(a)Consists of restructuring and other charges related to transformation activities of $361 million, primarily in GMNA and a benefit of $380 million related to the retrospective recoveries of indirect taxes in Brazil in GMI.
At and For the Six Months Ended June 30, 2020
GMNAGMICorporateEliminationsTotal
Automotive		CruiseGM
Financial		Eliminations/ReclassificationsTotal
Net sales and revenue$37,435  $4,957  $118  $42,510  $53  $6,984  $(60) $49,487  
Earnings (loss) before interest and taxes-adjusted$2,093  $(821) $(593) $679  $(423) $456  $2  $714  
Adjustments(a)$—  $(581) $—  $(581) $—  $—  $—  (581) 
Automotive interest income144  
Automotive interest expense(496) 
Net (loss) attributable to noncontrolling interests(30) 
Loss before income taxes(249) 
Income tax expense(245) 
Net loss(494) 
Net loss attributable to noncontrolling interests30  
Net loss attributable to stockholders$(464) 
Depreciation and amortization$2,354  $315  $15  $—  $2,684  $19  $3,753  $—  $6,456  
Impairment charges$20  $97  $—  $—  $117  $—  $—  $—  $117  
Equity income$11  $2  $—  $—  $13  $—  $67  $—  $80  
__________
(a)Consists of restructuring and other charges in Australia, New Zealand and Thailand.
27
 At and For the Three Months Ended September 30, 2017
 GMNA GMIO GMSA Corporate Eliminations Total Automotive GM Financial Eliminations Total
Net sales and revenue$24,819
 $3,007
 $2,569
 $80
   $30,475
 $3,161
 $(13) $33,623
Earnings (loss) before interest and taxes-adjusted$2,068
 $337
 $52
 $(242)   $2,215
 $310
 $(2) $2,523
Automotive interest income                59
Automotive interest expense                (151)
Net (loss) attributable to noncontrolling interests                (1)
Income before income taxes                2,430
Income tax expense                (2,316)
Income from continuing operations                114
Loss from discontinued operations, net of tax                (3,096)
Net loss attributable to noncontrolling interests                1
Net loss attributable to stockholders                $(2,981)
                  
Equity in net assets of nonconsolidated affiliates$82
 $7,618
 $1
 $—
 $—
 $7,701
 $1,119
 $—
 $8,820
Total assets(a)$109,885
 $20,551
 $7,617
 $26,410
 $(40,067) $124,396
 $106,142
 $(1,036) $229,502
Depreciation and amortization$1,210
 $101
 $65
 $11
 $—
 $1,387
 $1,743
 $—
 $3,130
Impairment charges$10
 $7
 $—
 $—
 $—
 $17
 $—
 $—
 $17
Equity income$2
 $457
 $—
 $—
 $—
 $459
 $41
 $—
 $500

__________
(a)Assets in GM Financial include assets classified as held for sale.

 At and For the Three Months Ended September 30, 2016
 GMNA GMIO GMSA Corporate Eliminations 
Total
Automotive
 
GM
Financial
 Eliminations Total
Net sales and revenue$31,085
 $3,376
 $2,029
 $40
   $36,530
 $2,360
 $(1) $38,889
Earnings (loss) before interest and taxes-adjusted$3,579
 $220
 $(118) $(212)   $3,469
 $193
 $—
 $3,662
Adjustments(a)$—
 $—
 $—
 $110
   $110
 $—
 $—
 110
Automotive interest income                43
Automotive interest expense                (145)
Net (loss) attributable to noncontrolling interests                (61)
Income before income taxes                3,609
Income tax expense                (902)
Income from continuing operations                2,707
Income from discontinued operations, net of tax                5
Net loss attributable to noncontrolling interests                61
Net income attributable to stockholders                $2,773
                  
Equity in net assets of nonconsolidated affiliates$74
 $7,629
 $2
 $—
 $—
 $7,705
 $940
 $—
 $8,645
Total assets(b)$101,846
 $20,679
 $7,662
 $38,535
 $(31,339) $137,383
 $82,200
 $(2,007) $217,576
Depreciation and amortization$1,088
 $116
 $75
 $2
 $(1) $1,280
 $1,249
 $—
 $2,529
Impairment charges$3
 $2
 $—
 $—
 $—
 $5
 $—
 $—
 $5
Equity income$3
 $459
 $—
 $—
 $—
 $462
 $35
 $—
 $497
__________
(a)Consists of a net benefit of $110 million for legal related matters related to the ignition switch recall.
(b)Assets in Corporate and GM Financial include assets classified as held for sale.


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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —— (Continued)

At and For the Six Months Ended June 30, 2019
GMNAGMICorporateEliminationsTotal
Automotive		CruiseGM
Financial		Eliminations/ReclassificationsTotal
Net sales and revenue$55,689  $7,897  $100  $63,686  $50  $7,259  $(57) $70,938  
Earnings (loss) before interest and taxes-adjusted$4,918  $(17) $(10) $4,891  $(448) $895  $(16) $5,322  
Adjustments(a)$(1,119) $1,207  $(2) $86  $—  $—  $—  86  
Automotive interest income204  
Automotive interest expense(376) 
Net (loss) attributable to noncontrolling interests(27) 
Income before income taxes5,209  
Income tax expense(661) 
Net income4,548  
Net loss attributable to noncontrolling interests27  
Net income attributable to stockholders$4,575  
Depreciation and amortization$3,478  $246  $25  $—  $3,749  $9  $3,747  $—  $7,505  
Impairment charges$15  $3  $—  $—  $18  $—  $—  $—  $18  
Equity income (loss)$4  $607  $(13) $—  $598  $—  $87  $—  $685  
_________
(a)Consists of restructuring and other charges related to transformation activities of $1.2 billion, primarily in GMNA and a benefit of $1.2 billion related to the retrospective recoveries of indirect taxes in Brazil in GMI.
28

 At and For the Nine Months Ended September 30, 2017
 GMNA GMIO GMSA Corporate Eliminations Total
Automotive		 GM
Financial		 Eliminations Total
Net sales and revenue$82,594
 $9,400
 $6,826
 $306
   $99,126
 $8,899
 $(152) $107,873
Earnings (loss) before interest and taxes-adjusted$9,014
 $974
 $(90) $(1,029)   $8,869
 $895
 $(5) $9,759
Adjustments(a)$—
 $(460) $(80) $(114)   $(654) $—
 $—
 (654)
Automotive interest income                184
Automotive interest expense                (430)
Net income attributable to noncontrolling interests                11
Income before income taxes                8,870
Income tax expense                (3,637)
Income from continuing operations                5,233
Loss from discontinued operations, net of tax                (3,935)
Net (income) attributable to noncontrolling interests                (11)
Net income attributable to stockholders                $1,287
                  
Depreciation and amortization$3,499
 $327
 $208
 $23
 $(1) $4,056
 $4,757
 $—
 $8,813
Impairment charges$59
 $204
 $3
 $5
 $—
 $271
 $—
 $—
 $271
Equity income$8
 $1,448
 $—
 $—
 $��
 $1,456
 $129
 $—
 $1,585
__________
(a)Consists of charges of $460 million related to restructuring actions in India and South Africa in GMIO; charges of $80 million associated with the deconsolidation of Venezuela in GMSA and charges of $114 million for legal related matters related to the ignition switch recall in Corporate.


 At and For the Nine Months Ended September 30, 2016
 GMNA GMIO GMSA Corporate Eliminations 
Total
Automotive
 
GM
Financial
 Eliminations Total
Net sales and revenue$87,815
 $9,923
 $5,011
 $113
   $102,862
 $6,429
 $(3) $109,288
Earnings (loss) before interest and taxes-adjusted$9,708
 $844
 $(300) $(602)   $9,650
 $600
 $—
 $10,250
Adjustments(a)$—
 $—
 $—
 $(65)   $(65) $—
 $—
 (65)
Automotive interest income                137
Automotive interest expense                (413)
Net (loss) attributable to noncontrolling interests                (99)
Income before income taxes                9,810
Income tax expense                (2,436)
Income from continuing operations                7,374
Income from discontinued operations, net of tax                119
Net loss attributable to noncontrolling interests                99
Net income attributable to stockholders                $7,592
                  
Depreciation and amortization$3,185
 $330
 $202
 $12
 $(3) $3,726
 $3,290
 $—
 $7,016
Impairment charges$44
 $65
 $—
 $—
 $—
 $109
 $—
 $—
 $109
Equity income$162
 $1,446
 $—
 $—
 $—
 $1,608
 $109
 $—
 $1,717
__________
(a)Consists of a net charge of $65 million for legal related matters related to the ignition switch recall.


*  *  *  *  *  *  *


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


Basis of Presentation This Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) should be read in conjunction with the accompanying condensed consolidated financial statements and the notes thereto, and the audited consolidated financial statements and notes thereto included in our 20162019 Form 10-K.

During the three months ended September 30, 2017 we closed the sale of the Opel and Vauxhall business and certain other assets in Europe (the Opel/Vauxhall Business) to Peugeot, S.A. (PSA Group). The Opel/Vauxhall Business and our European financing subsidiaries and branches (the Fincos, and together with the Opel/Vauxhall Business, the European Business) are presented as discontinued operations in our condensed consolidated financial statements for all periods presented. The assets and liabilities of the Fincos are presented as held for sale as of September 30, 2017, and the assets and liabilities of the European Business are presented as held for sale as of December 31, 2016 in our condensed consolidated financial statements. In results which were reported prior to the three and nine months ended September 30, 2017, these operations were primarily reported in our GME segment, which is no longer a reportable segment, and GM Financial. Refer to Note 2 to our condensed consolidated financial statements for additional information on the disposition of the European Business.


Forward-looking statements in this MD&A are not guarantees of future performance and may involve risks and uncertainties that could cause actual results to differ materially from those projected. Refer to the "Forward-Looking Statements" section of this MD&A and the "Risk Factors" sectionItem 1A. Risk Factors of our 20162019 Form 10-K for a discussion of these risks and uncertainties. Except for per share amounts or as otherwise specified, dollar amounts presented within tables are stated in millions.


Non-GAAP Measures Unless otherwise indicated, our non-GAAP measures discussed in this MD&A are related to our continuing operations and not our discontinued operations nor assets and liabilities held for sale. Our non-GAAP measures include earnings before interest and taxes (EBIT)-adjusted,include: EBIT-adjusted, presented net of noncontrolling interests, earnings per share (EPS)-diluted-adjusted,interests; EBT-adjusted for our GM Financial segment; EPS-diluted-adjusted; effective tax rate-adjusted (ETR-adjusted),; return on invested capital-adjusted (ROIC-adjusted) and adjusted automotive free cash flow. Our calculation of these non-GAAP measures may not be comparable to similarly titled measures of other companies due to potential differences between companies in the method of calculation. As a result, the use of these non-GAAP measures has limitations and should not be considered superior to, in isolation from, or as a substitute for, related U.S. GAAP measures.


These non-GAAP measures allow management and investors to view operating trends, perform analytical comparisons and benchmark performance between periods and among geographic regions to understand operating performance without regard to items we do not consider a component of our core operating performance. Furthermore, these non-GAAP measures allow investors the opportunity to measure and monitor our performance against our externally communicated targets and evaluate the investment decisions being made by management to improve ROIC-adjusted. Management uses these measures in its financial, investment and operational decision-making processes, for internal reporting and as part of its forecasting and budgeting processes. Further, our Board of Directors uses certain of these and other measures as key metrics to determine management performance under our performance-based compensation plans. For these reasons, we believe these non-GAAP measures are useful for our investors.


EBIT-adjusted EBIT-adjusted is presented net of noncontrolling interests and is used by management and can be used by investors to review our consolidated operating results because it excludes automotive interest income, automotive interest expense and income taxes as well as certain additional adjustments that are not considered part of our core operations. Examples of adjustments to EBIT include, but are not limited to, impairment charges related to goodwill; impairment charges on long-lived assets and other exit costs resulting from strategic shifts in our operations or discrete market and business conditions; costs arising from the ignition switch recall and related legal matters; and certain currency devaluations associated with hyperinflationary economies. For EBIT-adjusted and our other non-GAAP measures, once we have made an adjustment in the current period for an item, we will also adjust the related non-GAAP measure in any future periods in which there is an impact from the item. Our corresponding measure for our GM Financial segment is EBT-adjusted because interest income and interest expense are part of operating results when assessing and measuring the operational and financial performance of the segment.


EPS-diluted-adjusted EPS-diluted-adjusted is used by management and can be used by investors to review our consolidated diluted earnings per shareEPS results on a consistent basis. EPS-diluted-adjusted is calculated as net income attributable to common stockholders-diluted less income (loss) from discontinued operations on an after-tax basis, adjustments noted above for EBIT-adjusted gains or losses on the extinguishment of debt obligations on an after-tax basis and certain income tax adjustments divided by weighted-average common shares outstanding-diluted. Examples of income tax adjustments include the establishment or reversal of significant deferred tax asset valuation allowances.


ETR-adjustedETR-adjusted is used by management and can be used by investors to review the consolidated effective tax rate for our core operations on a consistent basis. ETR-adjusted is calculated as Income tax expense less the income tax related to the adjustments noted above for EBIT-adjusted and the income tax adjustments noted above for EPS-diluted-adjusted divided by Income before income taxes less adjustments. When we provide an expected adjusted effective tax rate, we do not provide an expected effective tax rate because the U.S. GAAP measure may include significant adjustments that are difficult to predict.


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ROIC-adjusted ROIC-adjusted is used by management and can be used by investors to review our investment and capital allocation decisions. We define ROIC-adjusted as EBIT-adjusted for the trailing four quarters divided by ROIC-adjusted average net assets, which is considered to be the average equity balances adjusted for average automotive debt and interest liabilities, exclusive of capitalfinance leases; average automotive net pension and OPEB liabilities; and average automotive net income tax assets during the same period. Adjustments to the average equity balances exclude assets and liabilities classified as either assets held for sale or liabilities held for sale.


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Adjusted automotive free cash flowAdjusted automotive free cash flow is used by management and can be used by investors to review the liquidity of our automotive operations and to measure and monitor our performance against our capital allocation program and evaluate our automotive liquidity against the substantial cash requirements of our automotive operations. We measure adjusted automotive free cash flow as automotive operating cash flow from continuing operations less capital expenditures adjusted for management actions. Management actions primarily related to strengthening our balance sheet,can include voluntary events such as prepayments of debt and discretionary contributions to employee benefit plans.plans or nonrecurring specific events such as a closure of a facility that are considered special for EBIT-adjusted purposes. Refer to the "Liquidity and Capital Resources" section of this MD&A for our reconciliation of Net automotive cash provided by operating activities under U.S. GAAP to this non-GAAP measure.additional information.


The following table reconciles Net income (loss) attributable to stockholders under U.S. GAAP to EBIT-adjusted:EBIT (loss)-adjusted:
 Three Months Ended
 September 30, June 30, March 31, December 31,
 2017 2016 2017 2016 2017 2016 2016 2015
Net income (loss) attributable to stockholders$(2,981) $2,773
 $1,660
 $2,866
 $2,608
 $1,953
 $1,835
 $6,266
(Income) loss from discontinued operations, net of tax3,096
 (5) 770

(106) 69
 (8) 120
 230
Income tax expense (benefit)2,316
 902
 534
 877
 787
 657
 303
 (3,139)
Gain on extinguishment of debt—
 —
 —
 —
 —
 —
 —
 (449)
Automotive interest expense151
 145
 132
 144
 147
 124
 150
 109
Automotive interest income(59) (43) (68) (50) (57) (44) (45) (40)
Adjustments               
GMIO restructuring(a)—
 —
 460
 —
 —
 —
 —
 —
Venezuela deconsolidation(b)—
 —
 80
 —
 —
 —
 —
 —
Ignition switch recall and related legal matters(c)—
 (110) 114
 115
 —
 60
 235
 60
Other—
 —
 —
 —
 —
 —
 —
 (18)
Total adjustments—
 (110) 654
 115
 —
 60
 235
 42
EBIT-adjusted$2,523
 $3,662
 $3,682
 $3,846
 $3,554
 $2,742
 $2,598
 $3,019
Three Months Ended
June 30,March 31,December 31,September 30,
20202019202020192019201820192018
Net income (loss) attributable to stockholders$(758) $2,418  $294  $2,157  $(194) $2,044  $2,351  $2,534  
Income tax expense (benefit)(112) 524  357  137  (163) (611) 271  100  
Automotive interest expense303  195  193  181  200  185  206  161  
Automotive interest income(61) (106) (83) (98) (96) (117) (129) (82) 
Adjustments
GMI restructuring(a)92  —  489  —  —  —  —  —  
Transformation activities(b)—  361  —  790  194  1,327  390  —  
GM Brazil indirect tax recoveries(c)—  (380) —  (857) —  —  (123) —  
FAW-GM divestiture(d)—  —  —  —  164  —  —  —  
Ignition switch recall and related legal matters(e)—  —  —  —  —  —  —  440  
Total adjustments92  (19) 489  (67) 358  1,327  267  440  
EBIT (loss)-adjusted$(536) $3,012  $1,250  $2,310  $105  $2,828  $2,966  $3,153  
_________
(a)This adjustment was excluded because of a strategic decision to rationalize our core operations by exiting or significantly reducing our presence in various international markets to focus resources on opportunities expected to deliver higher returns. The adjustment primarily consists of asset impairments, sales incentives, inventory provisions, dealer restructuring, employee separations and other contract cancellation costs in India and South Africa.
(b)
This adjustment was excluded because we ceased operations and terminated employment relationships in Venezuela due to causes beyond our control, which included adverse political and economic conditions, including the seizure of our manufacturing facility.
(a)These adjustments were excluded because of a strategic decision to rationalize our core operations by exiting or significantly reducing our presence in various international markets to focus resources on opportunities expected to deliver higher returns. These adjustments primarily consist of inventory provisions in the three months ended June 30, 2020 and asset impairments, dealer restructurings, employee separation charges and sales allowances in the three months ended March 31, 2020 in Australia, New Zealand and Thailand.
(b)These adjustments were excluded because of a strategic decision to accelerate our transformation for the future to strengthen our core business, capitalize on the future of personal mobility and drive significant cost efficiencies. The adjustments primarily consist of supplier-related charges and accelerated depreciation in the three months ended June 30, 2019, accelerated depreciation in the three months ended March 31, 2019, accelerated depreciation and employee separation charges in the three months ended December 31, 2019, employee separation charges and accelerated depreciation in the three months ended December 31, 2018 and supplier-related charges and pension curtailment and other charges in the three months ended September 30, 2019.
(c)These adjustments were excluded because of the unique events associated with decisions rendered by the Superior Judicial Court of Brazil resulting in retrospective recoveries of indirect taxes.
(d)This adjustment was excluded because we divested our joint venture FAW-GM Light Duty Commercial Vehicle Co., Ltd. (FAW-GM), as a result of a strategic decision by both shareholders, allowing us to focus our resources on opportunities expected to deliver higher returns.
(e)This adjustment was excluded because of the unique events associated with the ignition switch recall, which included various investigations, inquiries and complaints from constituents.

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GENERAL MOTORS COMPANY AND SUBSIDIARIES


(c)These adjustments were excluded because of the unique events associated with the ignition switch recall. These events included the creation of the Compensation Program, as well as various investigations, inquiries, and complaints from various constituents.

The following table reconciles diluted earnings (loss) per common share under U.S. GAAP to EPS-diluted-adjusted:

Three Months EndedSix Months Ended
June 30, 2020June 30, 2019June 30, 2020June 30, 2019
AmountPer ShareAmountPer ShareAmountPer ShareAmountPer Share
Diluted earnings (loss) per common share$(806) $(0.56) $2,381  $1.66  $(559) $(0.39) $4,500  $3.13  
Adjustments(a)92  0.06  (19) (0.01) 581  0.41  (86) (0.06) 
Tax effect on adjustment(b)5  —  (9) (0.01) (68) (0.05) (41) (0.03) 
Tax adjustment(c)—  —  —  —  236  0.16  —  —  
EPS-diluted-adjusted$(709) $(0.50) $2,353  $1.64  $190  $0.13  $4,373  $3.04  
________
28
Table(a)Refer to the reconciliation of ContentsNet income (loss) attributable to stockholders under U.S. GAAP to EBIT (loss)-adjusted within this section of MD&A for the details of each individual adjustment.
GENERAL MOTORS COMPANY AND SUBSIDIARIES(b)The tax effect of each adjustment is determined based on the tax laws and valuation allowance status of the jurisdiction to which the adjustment relates.

(c)This adjustment consists of tax expense related to the establishment of a valuation allowance against deferred tax assets in Australia and New Zealand. This adjustment was excluded because significant impacts of valuation allowances are not considered part of our core operations.



 Three Months Ended Nine Months Ended
 September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016
 Amount Per Share Amount Per Share Amount Per Share Amount Per Share
Diluted earnings (loss) per common share$(2,983) $(2.03) $2,773
 $1.76
 $1,285
 $0.85
 $7,591
 $4.81
Diluted (earnings) loss per common share – discontinued operations3,096
 2.11
 (5) (0.00) 3,935
 2.61
 (119) (0.08)
Adjustments(a)—
 —
 (110) (0.07) 654
 0.43
 65
 0.04
Tax effect on adjustments(b)—
 —
 41
 0.02
 (208) (0.14) (25) (0.01)
Tax adjustment(c)1,828
 1.24
 —
 —
 1,828
 1.22
 —
 —
EPS-diluted-adjusted$1,941
 $1.32
 $2,699
 $1.71
 $7,494
 $4.97
 $7,512
 $4.76
__________
(a)
Refer to the reconciliation of Net income (loss) attributable to stockholders under U.S. GAAP to EBIT-adjusted within this section of MD&A for adjustment details.
(b)
The tax effect of each adjustment is determined based on the tax laws and valuation allowance status of the jurisdiction in which the adjustment relates.
(c)
This adjustment represents the tax expense related to the establishment of a valuation allowance on deferred tax assets that will no longer be realizable as a result of the sale of the Opel/Vauxhall Business, partially offset by tax benefits related to tax settlements.

The following table reconciles our effective tax rate under U.S. GAAP to ETR-adjusted:
Three Months EndedSix Months Ended
June 30, 2020June 30, 2019June 30, 2020June 30, 2019
Income (loss) before income taxesIncome tax benefitEffective tax rateIncome before income taxesIncome tax expenseEffective tax rateIncome (loss) before income taxesIncome tax expenseEffective tax rateIncome before income taxesIncome tax expenseEffective tax rate
Effective tax rate$(892) $(112) 12.6 %$2,927  $524  17.9 %$(249) $245  n.m.$5,209  $661  12.7 %
Adjustments(a)92  (5) (16) 9  581  68  (83) 41  
Tax adjustment(b)—  —  (236) —  
ETR-adjusted$(800) $(117) 14.6 %$2,911  $533  18.3 %$332  $77  23.2 %$5,126  $702  13.7 %
 Three Months Ended Nine Months Ended
 September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016
 Income before income taxes Income tax expense Effective tax rate Income before income taxes Income tax expense Effective tax rate Income before income taxes Income tax expense Effective tax rate Income before income taxes Income tax expense Effective tax rate
Effective tax rate$2,430
 $2,316
 95.3% $3,609
 $902
 25.0% $8,870
 $3,637
 41.0% $9,810
 $2,436
 24.8%
Adjustments(a)—
 —
 
 (110) (41) 
 654
 208
 
 65
 25
 
Tax adjustment(b)
 (1,828) 
 
 —
 
 
 (1,828) 
 
 —
 
ETR-adjusted$2,430
 $488
 20.1% $3,499
 $861
 24.6% $9,524
 $2,017
 21.2% $9,875
 $2,461
 24.9%
________
__________n.m. = not meaningful
(a)
Refer to the reconciliation of Net income (loss) attributable to stockholders under U.S. GAAP to EBIT-adjusted within this section of MD&A for adjustment details.
(b)Refer to the reconciliation of diluted earnings (loss) per common share under U.S. GAAP to EPS-diluted-adjusted within this section of MD&A for adjustment details.

(a)Refer to the reconciliation of Net income (loss) attributable to stockholders under U.S. GAAP to EBIT (loss)-adjusted within this section of MD&A for adjustment details. Net income attributable to noncontrolling interests included for these adjustments is insignificant in the three and six months ended June 30, 2019. The tax effect of each adjustment is determined based on the tax laws and valuation allowance status of the jurisdiction to which the adjustment relates.
(b)Refer to the reconciliation of diluted earnings (loss) per common share under U.S. GAAP to EPS-diluted-adjusted within this section of MD&A for adjustment details.

We define return on equity (ROE) as Net income (loss) attributable to stockholders for the trailing four quarters divided by average equity for the same period. Management uses average equity to provide comparable amounts in the calculation of ROE. The following table summarizes the calculation of ROE (dollars in billions):
Four Quarters Ended
June 30, 2020June 30, 2019
Net income (loss) attributable to stockholders$1.7  $9.2  
Average equity(a)$42.8  $41.1  
ROE4.0 %22.3 %
__________
(a)Includes equity of noncontrolling interests where the corresponding earnings (loss) are included in Net income (loss) attributable to stockholders.

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 Four Quarters Ended
 September 30, 2017 September 30, 2016
Net income attributable to stockholders$3.1
 $13.9
Average equity$44.5
 $42.7
ROE7.0% 32.5%

The following table summarizes the calculation of ROIC-adjusted (dollars in billions):

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 Four Quarters Ended
 September 30, 2017 September 30, 2016
EBIT-adjusted(a)$12.4
 $13.3
Average equity$44.5
 $42.7
Add: Average automotive debt and interest liabilities (excluding capital leases)10.8
 9.4
Add: Average automotive net pension & OPEB liability21.2
 22.6
Less: Average automotive net income tax asset(31.7) (33.1)
ROIC-adjusted average net assets
$44.8
 $41.6
ROIC-adjusted
27.6% 31.9%
Four Quarters Ended
June 30, 2020June 30, 2019
EBIT (loss)-adjusted(a)$3.8  $11.3  
Average equity(b)$42.8  $41.1  
Add: Average automotive debt and interest liabilities (excluding finance leases)23.6  14.9  
Add: Average automotive net pension & OPEB liability17.1  16.9  
Less: Average automotive and other net income tax asset(23.9) (23.1) 
ROIC-adjusted average net assets$59.6  $49.8  
ROIC-adjusted6.4 %22.7 %
__________
(a)Refer to the reconciliation of Net income (loss) attributable to stockholders under U.S. GAAP to EBIT-adjusted within this section of MD&A.

(a)Refer to the reconciliation of Net income (loss) attributable to stockholders under U.S. GAAP to EBIT (loss)-adjusted within this section of MD&A.
(b)Includes equity of noncontrolling interests where the corresponding earnings (loss) are included in EBIT (loss)-adjusted.

Overview Our management team has adopted a strategic plan to transform GM into the world's most valued automotive company. Our plan includes several major initiatives that we anticipate will help us achieveredefine the future of personal mobility and advance our goalvision of 9% to 10% margins on an EBIT-adjusted basis (EBIT-adjusted margins, calculated as EBIT-adjusted divided by Net sales and revenue) by early next decade: earnzero crashes, zero emissions, zero congestion while also strengthening the core of our business: earning customers for life by delivering great products to our customers; leadwinning vehicles, leading the industry in quality and safety and improveimproving the customer ownership experience; leadleading in technology and innovation, including electrification, OnStar 4G LTEautonomous vehicles and connected car, alternative propulsion, urban mobility including ride-data connectivity; growing our brands; making tough, strategic decisions about the markets and car-sharing through Mavenproducts in which we will invest and compete; building profitable adjacent businesses; and targeting 10% core margins on an EBIT-adjusted basis.
COVID-19 and government actions and measures to prevent its spread continue to affect our operations and business in a number of significant ways. In response to COVID-19, we previously suspended the majority of our global manufacturing operations and our investmentAutomotive China JVs’ manufacturing operations. By April 2020, we fully resumed our Automotive China JVs’ manufacturing operations. Beginning in Lyft, active safety features and autonomous vehicles; growMay 2020, we resumed our brands, particularly the Cadillac brandcritical manufacturing operations in the U.S. and China and the Chevrolet brand globally; continue our growth in China; continue the growth of GM Financial into our full captive automotive financing company; and deliver core operating efficiencies.

In addition to our EBIT-adjusted margin improvement goal, our overall financial targets include expected total annual operational and functional cost savings of $6.5 billion in aggregate through 2018 compared to 2014 costs, of which more than $5 billion has been realized as of September 30, 2017, and which will more than offset our planned incremental investments in brand building, engineering and technology as we launch new products; and execution of our capital allocation program as described in the "Liquidity and Capital Resources" section of this MD&A.

For the year ending December 31, 2017 we expect to continue to generate strong consolidated financial results notwithstanding a more challenging operating environment than expected at the beginning of the year. Raw material costs are on the riseNorth America, and we continue to take actions to adjustincrease production and replenish dealer inventories. Government-imposed restrictions on businesses, operations and travel and the related economic uncertainty have impacted demand for our vehicles in most of our global markets. We expect COVID-19 to continue to materially impact our results of operations during the remainder of 2020. In response, we are executing a number of austerity measures, including aggressive actions to lower passenger carreduce costs, such as limiting advertising and other third-party spending, deferring salaried employee compensation and delaying non-critical projects, including certain future product programs. The extent of COVID-19’s impact on our future operations and the demand for our products will depend upon, among other things, the duration, spread and pricing pressure in North America. We forecast total net sales and revenue, EBIT-adjusted and EBIT-adjusted margins that are generally in line with 2016 results, ROIC-adjusted of greater than 25%, Automotive operating cash flow from continuing operations of approximately $14 billion, adjusted automotive free cash flow from continuing operations of approximately $6 billion, EPS-diluted of between $1.66 and $2.16 and EPS-diluted-adjusted in the middleintensity of the rangepandemic and related government responses such as required physical distancing, restrictions on business operations and travel, the pace of $6.00recovery of economic activity and the impact to $6.50. The following table reconciles expected diluted earnings per common share under U.S. GAAPconsumers, all of which are uncertain and difficult to expected EPS-diluted-adjusted:predict in light of the rapidly evolving landscape. Refer to Item 1A. Risk Factors for a full discussion of the risks associated with the COVID-19 pandemic.
Year Ending December 31, 2017
Diluted earnings per common share$ 1.66-2.16
Diluted loss per common share – discontinued operations(a)2.83
Adjustments(b)0.43
Tax effect on adjustments(c)(0.14)
Tax adjustment(d)1.22
EPS-diluted-adjusted$ 6.00-6.50
__________
(a)
Refer to Overview – PSA Group Transaction for additional details of the components of the total charge associated with the sale of the European Business. The Fincos portion of the charges is subject to interest rate and foreign currency fluctuations and is based on the estimated closing date.
(b)Refer to the reconciliation of Net income attributable to stockholders under U.S GAAP to EBIT-adjusted within the Non-GAAP Measures section of this MD&A.
(c)
The tax effect of each adjustment is determined based on the tax laws and valuation allowance status of the jurisdiction in which the adjustment relates.
(d)
This adjustment represents the tax provision related to the establishment of valuation allowances, partially offset by tax benefits related to tax settlements.


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The following table reconciles expected Net automotive cash provided by operating activities from continuing operations under U.S. GAAP to expected adjusted automotive free cash flow from continuing operations (dollars in billions):
 Year Ending December 31, 2017
Net automotive cash provided by operating activities – continuing operations$14
Less: expected capital expenditures(8)
Adjusted automotive free cash flow – continuing operations6
Net automotive cash provided by operating activities – discontinued operations—
Less: expected capital expenditures – discontinued operations(1)
Adjusted automotive free cash flow$5

We are committed to help reduce the supply shortage of necessary medical equipment arising from the COVID-19 pandemic, including manufacturing face masks beginning in March 2020 and collaborating with Ventec Life Systems to produce critical care ventilators in our U.S. facilities beginning in April 2020. We are providing our resources related to these initiatives at cost.

We also face continuing challenges from a market, operating and regulatory standpointchallenges in a number ofseveral countries across the globe due to, among other factors, weak economic conditions, competitive pressures, our product portfolio offerings, heightened emissions standards, labor disruptions, foreign exchange volatility, rising material prices, evolving trade policy and political uncertainty. AsRefer to Item 1A. Risk Factors of our 2019 Form 10-K for a resultdiscussion of these conditions,challenges.

In November 2018, we continueannounced plans to strategically assessaccelerate steps to improve our overall business performance, including the reorganization of global product development staffs, the realignment of manufacturing capacity in response to market-related volume declines in passenger cars and abilitya reduction of our salaried workforce. We are on track for these transformation activities to achieve acceptable returnsdrive between $5.5 billion and $6.0 billion of annual cash savings by the end of 2020, consisting of $4.0 billion to $4.5 billion in cost savings primarily from reductions in Automotive and other cost of sales in our condensed consolidated financial statements, with the remainder in reduced capital expenditures. We are on our invested capital.track to reduce capital expenditures from approximately $8.5 billion to approximately $7.0 billion on a normalized run-rate basis. As we continue to assess our performance and the needs of our evolving business, additional restructuring and rationalization actions could be required. These actions may be required or a determination may be made that the carrying amount of our long-lived assets may not be recoverable in certain of these countries. Such a determination maycould give rise to future asset impairments or other charges, which may have a material impact on our resultsoperating
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results. Capital spending originally expected to be incurred in 2020 will be re-timed to 2021, however over the two-year period we expect to maintain our normalized run-rate.

GMNA In the nine months ended September 30, 2017 industry salesIndustry sales in North America were 16.17.8 million units in the six months ended June 30, 2020, representing a decrease of 1.2%25.5% compared to the corresponding period in 2016.2019. U.S. industry sales were 13.16.6 million units in the ninesix months ended SeptemberJune 30, 2017 and2020, representing a decrease of 23.7% compared to the corresponding period in 2019. As described above, we expect COVID-19 to result in a significant contraction of total North America industry unit sales to bevolumes in 2020. However, industry volumes will ultimately depend upon, among other things, the low 17 millions for the full year. Consistent with 2016, U.S. industry sales in the second halfduration, spread and intensity of the yearpandemic, related government responses and economic recovery all of which are projecteduncertain and difficult to be stronger thanpredict in the first halflight of the year.rapidly evolving landscape.


In the nine months ended September 30, 2017 ourOur total vehicle sales in the U.S., our largest market in North America, totaled 2.21.1 million units for market share of 16.7%,16.8% in the six months ended June 30, 2020, representing an increase of 0.10.5 percentage points compared to the corresponding period in 2016.2019. We continue to lead the U.S. industry in market share. The increase

As discussed above, in response to COVID-19, we suspended production across our U.S. market share was driven by strong performancemanufacturing facilities in fleet sales, primarily commercial and government.

In the year ending December 31, 2017 we forecast sustained EBIT-adjusted margins of greater than 10% on continued strength of U.S. industry light vehicle sales, key product launches and continued focus on overall cost savings. Based on our current cost structure, we estimate GMNA’s breakeven point at the U.S., Canada and Mexico in March 2020. We gradually resumed critical manufacturing operations in North America beginning in May 2020 and reached production levels in line with industry leveldemand in June 2020. We continue to befollow physical distancing guidance, enhanced deep cleaning procedures and provide personal protective equipment to protect our employees.

The Unifor contract ratified in the range of 10.0 to 11.0 million units.

In September 2017 the labor contract2016 covering approximately 2,900certain hourly employees in Canada expired and Unifor initiated a work stoppage. In October 2017 we entered into a collectively bargained labor agreement with Unifor. The impactexpires in September 2020. For discussion of the agreement was not materialrisks related to a significant labor disruption at one of our condensed consolidated financial statements.facilities, refer to Item 1A. Risk Factors of our 2019 Form 10-K.


GMIO InGMI Industry sales in China were 10.2 million units in the ninesix months ended SeptemberJune 30, 2017 China industry sales were 19.4 million units and our market share was 14.2%. We continue to see strength in sales2020, representing a decrease of our Cadillac and Baojun passenger vehicles and SUVs. However, residual effects from the government's partial removal of a purchase tax incentive at the end of 2016, and the rapid growth of SUVs over sedans in the market impacted Buick and Chevrolet performance. Wuling sales were impacted by the market shift away from mini commercial vehicles. In the nine months ended September 30, 2017 our Automotive China JVs generated equity income of $1.5 billion. We expect industry growth in 2017 and a continuation of pricing pressures, which will continue to pressure margins. We continue to expect an increase in vehicle sales in 2017 driven by new launches and expect to sustain strong China equity income and margins by focusing on improvements in vehicle mix, cost efficiencies, and downstream performance optimization.

Many markets in the rest of Asia Pacific, Africa and the Middle East continue to experience negative impacts from economic conditions such as foreign exchange volatility and low oil prices, however, strength in certain markets led to industry sales of 15.7 million units, representing an increase of 2.2% in the nine months ended September 30, 201719.3% compared to the corresponding period in 2016.2019. Our total vehicle sales totaled 0.5in China were 1.2 million units leading to afor market share of 3.0%11.5% in the ninesix months ended SeptemberJune 30, 2017,2020, representing a decrease of 0.40.9 percentage points compared to the corresponding period in 2016.

GM Korea's collective bargaining agreement negotiations began2019. The sales across all brands decreased in the second quartersix months ended June 30, 2020, compared to the corresponding period in 2019, primarily driven by an industry downturn significantly impacted by the COVID-19 pandemic. We expect both GM and industry sales to gradually recover as the impact of 2017. Although GM Korea has reached settlementsthe COVID-19 pandemic in recent years without work stoppages, there isChina subsides; however, the ongoing global macro-economic impact of COVID-19 and geopolitical tensions may continue to place pressure on China's automotive industry. Our Automotive China JVs generated equity income of $0.2 billion and an equity loss of $0.2 billion in the three months ended June 30, 2020 and March 31, 2020. A continuation of industry weakness and pricing pressures, a potential riskmore challenging regulatory environment related to emissions, fuel consumption and new energy vehicles, and continued weakness in the Chinese Yuan against the U.S. Dollar will continue to place pressure on our operations in China. While we expect lower China equity income in the near term, we will continue to build upon our strong brands, network, and partnerships in China as well as continue to drive improvements in vehicle mix and cost.

Outside of work stoppagesChina, industry sales were 9.5 million units in negotiations which could negatively affect our business.the six months ended June 30, 2020, representing a decrease of 27.0% compared to the corresponding period in 2019, primarily due to the ongoing global macro-economic impact of COVID-19. Our total vehicle sales outside of China were 0.5 million units for market share of 4.9% in the six months ended June 30, 2020, representing an increase of 0.3 percentage points compared to the corresponding period in 2019.


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In May 2017 we announced severalthe six months ended June 30, 2020, restructuring actions in GMIO whichGMI were primarily related to the withdrawalwind-down of Chevrolet fromHolden sales, design and engineering operations in Australia and New Zealand, with cessation of Holden vehicle sales by 2021, the Indianexecution of binding term sheets with Great Wall Motors to sell our vehicle and South African marketspowertrain manufacturing facilities in Thailand, and the wind-down of our vehicle sales operations in Thailand, targeted for completion by the end of 20172020. These actions were taken to strengthen the Company's core business and focus investment on other opportunities that will derive the transitiongreatest returns for shareholders and support investment in future technologies. We recorded charges of $0.6 billion in the six months ended June 30, 2020 and expect to incur additional charges of $0.4 billion in the six months ending December 31, 2020. We also recorded deferred tax charges of $0.2 billion in the six months ended June 30, 2020. We expect additional net cash outflows of approximately $0.2 billion, which includes expected proceeds of approximately $0.1 billion from the sale of our South African manufacturing operationsfacility in Thailand, to Isuzu Motors. These actions occurred as a resultbe substantially complete by the end of a strategic decision2020. The charges will primarily be considered special for EBIT-adjusted, EPS-diluted-adjusted and adjusted automotive free cash flow purposes. We intend to focus resources on opportunities expectedcontinue to deliver higher returns.provide servicing and spare parts to customers for an extended period of time in Australia, New Zealand and Thailand. Refer to Note 1517 to our condensed consolidated financial statements for additional information related to these restructuring actions.

GMSAThe South American automotive industry continues to be challenged by weak economic conditions and lack of consumer confidence. Despite these challenges, industry sales were 3.1 million units in the nine months ended September 30, 2017 representing a 13.2% increase compared to the corresponding period in 2016. In the nine months ended September 30, 2017 our vehicle sales in Brazil, our largest market in South America, totaled 0.3 million units for market share of 17.5%, representing an increase of 1.2 percentage points compared to the corresponding period in 2016 as we continue to benefit from a refreshed portfolio.

Based on our current cost structure, we estimate GMSA’s breakeven point at the Brazil industry level to be 2.2 million units. For the remainder of 2017, we forecast improved results driven by a modest industry recovery and the strength of our portfolio.

Venezuelan Operations  In May 2017 we deconsolidated our business in Venezuela which resulted in a charge of $0.1 billion during the nine months ended September 30, 2017.

CorporateThrough October 17, 2017, we purchased an aggregate of 274 million shares of our common stock under our repurchase program for $9.4 billion, as detailed in the "Liquidity and Capital Resources" section of this MD&A.

The ignition switch recall has led to various inquiries, investigations, subpoenas, requests for information and complaints from agencies or other representatives of U.S., federal, state and Canadian governments. In addition these and other recalls have resulted in a number of claims and lawsuits. Such lawsuits and investigations could in the future result in the imposition of material damages, fines, civil consent orders, civil and criminal penalties or other remedies. Refer to Note 13 to our condensed consolidated financial statements for additional information.

Takata MattersOn May 4, 2016 NHTSA issued an amended consent order requiring Takata to file defect information reports (DIRs) for previously unrecalled front airbag inflators that contain phase-stabilized ammonium nitrate-based propellant without a moisture absorbing desiccant on a multi-year, risk-based schedule through 2019 impacting tens of millions of vehicles produced by numerous automotive manufacturers. NHTSA concluded that the likely root cause of the rupturing of the airbag inflators is a function of time, temperature cycling and environmental moisture.

On May 16, 2016 Takata issued its first DIR in connection with the amended consent order, and on January 3, 2017, Takata issued its second set of DIRs. Although we do not believe there is a safety defect at this time in any unrecalled GM vehicles within the scope of the Takata DIRs, in cooperation with NHTSA we filed Preliminary DIRs on May 27, 2016, updated as of June 13, 2016, covering 2.5 million of certain of our GMT900 vehicles, which are full-size pick-up trucks and SUVs. On November 15, 2016, we filed a petition for inconsequentiality and request for deferral of determination regarding those GMT900 vehicles. On November 28, 2016, NHTSA granted GM’s deferral request in connection with this petition. The deferral provided GM until August 31, 2017 to present evidence and analysis that our vehicles do not pose an unreasonable risk to motor vehicle safety.

Takata filed a second set of equipment DIRs on January 3, 2017 and we filed a second set of Preliminary DIRs for certain GMT900 vehicles on January 10, 2017. These January 2017 DIRs are consistent with GM’s May 2016 DIRs. On the same day, we also filed a second petition for inconsequentiality and deferral of decision with respect to the vehicles subject to our January 2017 DIRs. On January 18, 2017, NHTSA consolidated our first and second petitions for inconsequentiality and will rule on both at the same time.

On August 25, 2017, we filed a supplemental brief in support of our petitions that provided NHTSA with the results of our long-term study and testing and the basis for our determination that the inflators in these vehicles do not present an unreasonable risk to safety and that no repair should ultimately be required. In our brief, we requested that NHTSA grant our petitions or, in the alternative, grant an additional deferral period to provide time for further testing.

We believe these vehicles are currently performing as designed and ongoing testing continues to support the belief that the vehicles' unique design and integration mitigates against inflator propellant degradation and rupture risk. For example, the airbag inflators used in the vehicles are a variant engineered specifically for our vehicles, and include features such as greater venting, unique propellant wafer configurations, and machined steel end caps. The inflators are packaged in the instrument panel in such a way as to minimize exposure to moisture from the climate control system. Also, these vehicles have features that minimize the


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maximum temperature to which the inflator will be exposed, such as larger interior volumes and standard solar absorbing windshields and side glass.

Accordingly, no warranty provision has been made for any repair associated withCruise We are actively testing our autonomous vehicles subject to the Preliminary DIRs and amended consent order. However, in the event we are ultimately obligated to repair the vehicles subject to current or future Takata DIRs under the amended consent order in the U.S., we estimate a reasonably possible impact to GM of approximately $1.0 billion.

GM is engaged in discussions with regulators outside the U.S. with respect to Takata inflators. There are differences in vehicle and inflator design between the relevant vehicles sold internationally and those sold in the U.S. WeGated by safety and regulation, we continue to gather and analyze evidence about these inflators and to share our findings with regulators. We were required to recall certainmake significant progress towards commercialization of a network of on-demand autonomous vehicles outside of the U.S. in the three months ended SeptemberU.S.

Corporate Mark-to-market equity securities and warrants held by Corporate totaled $0.7 billion at June 30, 2017 to replace Takata inflators in these vehicles. Additional recalls, if any, could be material to our results2020, a decrease of operations and cash flows. We continue to monitor the international situation.
Through October 17, 2017 we were aware of two putative class action pending against GM in federal court in the U.S., one putative class action in Mexico and four putative class actions pending in various Provincial Courts in Canada arising out of allegations that airbag inflators manufactured by Takata are defective. At this early stage of these proceedings, we are unable to provide an evaluation of the likelihood that a loss will be incurred or an estimate of the amounts or range of possible loss. On August 16, 2017, the bankruptcy court hearing the Takata bankruptcy entered an order staying all Takata related litigation against automotive manufacturers, including GM, until November 16, 2017.
On June 26, 2017, Takata filed for bankruptcy protection in the United States and Japan. Over the past several months, a group of global automakers, including GM, have had discussions with Takata and Key Safety Systems, Inc. regarding a potential transaction involving the sale of Takata's business. GM has not experienced any supply interruptions arising$0.8 billion from Takata initiating formal insolvency proceedings and anticipates that Takata will continue an uninterrupted supply of component parts to GM during the insolvency proceedings. GM continues to monitor Takata’s financial and operational performance and to develop alternative and contingent supplies to attempt to mitigate prospective threatsDecember 2019, due to the supply of components.

PSA Group Transaction On July 31, 2017 we closed the saleliquidation of our Opel/Vauxhall Business toshares in Lyft and market price fluctuations. Market price changes of our PSA Group. The transferwarrants generated unrealized losses of $0.3 billion in the Fincos is expected to close by the end of the year subject to the receipt of the necessary regulatory approvals and satisfaction of other closing conditions.

The net consideration paid at closing for the Opel/Vauxhall Business was $1.4 billion, consisting of (1) $1.1 billion in cash; and (2) $0.8 billion in warrants in PSA Group; partially offset by (3) the $0.5 billion de-risking premium payment made to PSA Group for assuming certain underfunded pension liabilities. In addition, we agreed to sell the shares of PSA Group received upon exercise of the warrants within 35 days after exercise. The net consideration to be paid for the Fincos will be 0.8 times their book value at closing, which we estimate will be approximately $1.1 billion based on exchange rates at September 30, 2017, subject to foreign currency fluctuations. The purchase price is subject to certain working capital adjustments as provided in the Agreement.

The total charge from the sale of the European Business is expected to be approximately $6.3 billion, net of tax. During the three months ended September 30, 2017 the Company recorded a charge of $5.4 billion as a result of the sale of the Opel/Vauxhall Business, of which $3.1 billion is recorded in Income (loss) from discontinued operations, net of tax, and $2.3 billion was treated as an adjustment to both EPS-diluted-adjusted and ETR-adjusted. The charge relates to: (1) $4.3 billion of deferred tax assets that will no longer be realizable or that transferred to PSA Group; (2) $1.5 billion related to previously deferred pension losses and payment of the de-risking premium to PSA Group for its assumption of certain underfunded pension liabilities; and (3) other net charges primarily related to contract cancellations, working capital adjustments and certain transitional services and other costs to support the separation of operations to be provided for a period of time following closing; partially offset by proceeds. During the threesix months ended June 30, 2017 we recognized, on2020, compared to a pre-tax basis, a chargegain of $0.8$0.2 billion in Income (loss) from discontinued operations consisting of (1) a charge of $0.4 billion for the cancellation of production programs resulting from the convergence of vehicle platforms between the European Business and PSA Group; (2) a disposal loss of $0.3 billion as a result of the Fincos being classified as held for sale; and (3) other insignificant charges. We expect to record a disposal loss of approximately $0.3 billion upon sale of the Fincos.corresponding period in 2019.


The Seller has agreed to indemnify PSA Group for certain losses resulting from any inaccuracy of the representations and warranties or breaches of our covenants included in the Agreement and for certain other liabilities including emissions and product liabilities. The Company has entered into a guarantee for the benefit of PSA Group and pursuant to which the Company has agreed to guarantee the Seller's obligation to indemnify PSA Group for certain losses resulting from any inaccuracy of certain

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representations and warranties or breaches of our covenants in the Agreement and for certain other liabilities. Certain of these indemnification obligations are subject to time limitations, thresholds and/or caps as to the amount of required payments.

We retained net underfunded pension liabilities of $6.8 billion owed primarily to current pensioners and former employees of the European Business with vested pension rights. PSA Group assumed approximately $3.1 billion of net underfunded pension liabilities primarily with respect to active employees of the Opel/Vauxhall Business, and during the three months ended September 30, 2017 the Seller made payments of $3.4 billion in respect of these assumed liabilities, which includes pension funding payments for active employees and the de-risking premium payment discussed above. At closing we drew upon our three-year unsecured revolving credit facility to fund these payments. We issued debt securities thereafter to repay the draw on our credit facility.

We also retained the United Kingdom defined benefit pension plans in existence at signing related to the Opel/Vauxhall Business, including responsibility for service cost accruals through the closing date.

We have agreed to purchase from and supply to PSA Group certain vehicles for a period of time following closing and not to engage in certain competing businesses in Europe for a period of three years.

Refer to Note 2 to our condensed consolidated financial statements for additional information.

Vehicle Sales The principal factors that determine consumer vehicle preferences in the markets in which we operate include overall vehicle design, price, quality, available options, safety, reliability, fuel economy and functionality. Market leadership in individual countries in which we compete varies widely.

We present both wholesale and retailtotal vehicle sales data to assist in the analysis of our revenue and our market share.

Wholesale vehicle sales data (vehicles in thousands), which representsconsists of sales directly to GM's dealers and others, includingdistributors as well as sales to fleet customers, is the measure thatU.S. Government and excludes vehicles sold by our joint ventures. Wholesale vehicle sales data correlates to our revenue recognized from the sale of vehicles, which is the largest component of Automotive net sales and revenue. Wholesale vehicle sales exclude vehicles sold by joint ventures. In the ninesix months ended SeptemberJune 30, 2017, 39.2%2020, 32.3% of our wholesale vehicle sales volume was generated outside the U.S. The following table summarizes total wholesale vehicle sales of new vehicles by automotive segment:segment (vehicles in thousands):
Three Months EndedSix Months Ended
June 30, 2020June 30, 2019June 30, 2020June 30, 2019
GMNA331  78.6 %870  77.1 %1,106  79.8 %1,729  77.7 %
GMI90  21.4 %259  22.9 %281  20.2 %495  22.3 %
Total421  100.0 %1,129  100.0 %1,387  100.0 %2,224  100.0 %
 Three Months Ended Nine Months Ended
 September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016
GMNA(a)762
 70.4% 1,030
 76.7% 2,596
 72.7% 2,908
 76.4%
GMIO(b)136
 12.5% 160
 11.9% 452
 12.7% 500
 13.1%
GMSA(a)185
 17.1% 153
 11.4% 487
 14.6% 400
 10.5%
Total1,083
 100.0% 1,343
 100.0% 3,535
 100.0% 3,808
 100.0%
                
Discontinued operations90
   268
   696
   904
  

__________
(a)Wholesale vehicle sales related to transactions with the European Business were insignificant for the three and nine months ended September 30, 2017 and 2016.
(b)Wholesale vehicle sales include 37 and 24 vehicles related to transactions with the European Business for the three months ended September 30, 2017 and 2016 and 131 and 94 vehicles for the nine months ended September 30, 2017 and 2016.

RetailTotal vehicle sales data which representsrepresents: (1) retail sales (i.e., sales to end customers based upon the good faith estimates of management, includingconsumers who purchase new vehicles from dealers or distributors); (2) fleet sales, such as sales to fleet customers, does not correlate directly to the revenue we recognize during the period. However retail vehicle sales data is indicative of the underlying demand for ourlarge and small businesses, governments, and daily rental car companies; and (3) vehicles used by dealers in their businesses, including courtesy transportation vehicles. Market share information is based primarily on retail vehicle sales volume. In countries where retail vehicle sales data is not readily available, other data sources such as wholesale or forecast volumes are used to estimate retail vehicle sales to end customers.

RetailTotal vehicle sales data includes all sales by joint ventures on a total vehicle basis, not based on theour percentage of ownership interest in the joint venture. Certain joint venture agreements in China allow for the contractual right to report vehicle sales of non-GM trademarked vehicles by those joint ventures. Retailventures, which are included in the total vehicle sales we report for China. While total vehicle sales data includes vehicles used by dealers under courtesy transportation programs and vehicles sold throughdoes not correlate directly to the dealer registration channel primarily in Europe. This sales channel consists primarilyrevenue we recognize during a particular period, we believe it is indicative of dealer demonstrator, loaner and self-registered vehicles which are not eligible to be sold as new vehicles after being registered by dealers. Certain fleet sales that are accountedthe underlying demand for as operating leases are included in retailour vehicles. Total vehicle sales at the timedata represents management's good faith estimate based on sales reported by GM's dealers, distributors, and joint ventures, commercially available data sources such as registration and insurance data, and internal estimates and forecasts when other data is not available.

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The following table summarizes industry and GM total industry retailvehicle sales or estimated sales where retail sales volume is not available, of vehicles and our related competitive position by geographic region (vehicles in thousands):

 Three Months EndedSix Months Ended
 June 30, 2020June 30, 2019June 30, 2020June 30, 2019
 IndustryGMMarket ShareIndustryGMMarket ShareIndustryGMMarket ShareIndustryGMMarket Share
North America
United States3,030  492  16.3 %4,560  747  16.4 %6,611  1,111  16.8 %8,667  1,412  16.3 %
Other492  73  14.7 %977  129  13.2 %1,198  173  14.5 %1,816  239  13.1 %
Total North America3,522  565  16.0 %5,537  876  15.8 %7,809  1,284  16.4 %10,483  1,651  15.7 %
Asia/Pacific, Middle East and Africa
China(a)6,280  714  11.4 %6,464  754  11.7 %10,226  1,175  11.5 %12,678  1,568  12.4 %
Other3,299  130  4.0 %5,245  145  2.8 %8,208  275  3.3 %10,886  277  2.6 %
Total Asia/Pacific, Middle East and Africa9,579  844  8.8 %11,709  899  7.7 %18,434  1,450  7.9 %23,564  1,845  7.8 %
South America
Brazil251  40  15.8 %700  116  16.5 %809  134  16.6 %1,308  222  17.0 %
Other138  17  12.4 %374  46  12.4 %445  55  12.3 %769  96  12.4 %
Total South America389  57  14.6 %1,074  162  15.1 %1,254  189  15.1 %2,077  318  15.3 %
Total in GM markets13,490  1,466  10.9 %18,320  1,937  10.6 %27,497  2,923  10.6 %36,124  3,814  10.6 %
Total Europe2,479  —  — %5,145  1  — %6,193  —  — %10,081  2  — %
Total Worldwide(b)15,969  1,466  9.2 %23,465  1,938  8.3 %33,690  2,923  8.7 %46,205  3,816  8.3 %
United States
Cars671  37  5.5 %1,263  107  8.5 %1,559  109  7.0 %2,442  223  9.1 %
Trucks840  253  30.2 %1,181  356  30.1 %1,788  545  30.5 %2,150  629  29.3 %
Crossovers1,519  202  13.3 %2,116  284  13.4 %3,264  457  14.0 %4,075  560  13.7 %
Total United States3,030  492  16.3 %4,560  747  16.4 %6,611  1,111  16.8 %8,667  1,412  16.3 %
China(a)
SGMS350  372  557  754  
SGMW364  382  618  814  
Total China6,280  714  11.4 %6,464  754  11.7 %10,226  1,175  11.5 %12,678  1,568  12.4 %

__________
(a)Includes sales by the Automotive China JVs: SAIC General Motors Sales Co., Ltd. (SGMS) and SAIC GM Wuling Automobile Co., Ltd. (SGMW).
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Table(b)Cuba, Iran, North Korea, Sudan and Syria are subject to broad economic sanctions. Accordingly these countries are excluded from industry sales data and corresponding calculation of Contentsmarket share.
GENERAL MOTORS COMPANY AND SUBSIDIARIES



 Three Months Ended Nine Months Ended
 September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016
 Industry GM Market Share Industry GM Market Share Industry GM Market Share Industry GM Market Share
North America                       
United States4,511
 781
 17.3% 4,553
 773
 17.0% 13,117
 2,196
 16.7% 13,365
 2,212
 16.6%
Other1,015
 144
 14.1% 1,021
 146
 14.3% 2,998
 423
 14.1% 2,943
 416
 14.1%
Total North America(a)5,526
 925
 16.7% 5,574
 919
 16.5% 16,115
 2,619
 16.3% 16,308
 2,628
 16.1%
Asia/Pacific, Middle East and Africa                       
China(b)6,940
 982
 14.2% 6,568
 874
 13.3% 19,373
 2,748
 14.2% 19,565
 2,690
 13.7%
Other(c)5,222
 148
 2.8% 5,056
 171
 3.4% 15,695
 466
 3.0% 15,353
 524
 3.4%
Total Asia/Pacific, Middle East and Africa(a)12,162
 1,130
 9.3% 11,624
 1,045
 9.0% 35,068
 3,214
 9.2% 34,918
 3,214
 9.2%
South America                       
Brazil601
 107
 17.8% 525
 89
 16.9% 1,620
 283
 17.5% 1,508
 246
 16.3%
Other515
 72
 14.0% 436
 64
 14.7% 1,447
 204
 14.1% 1,201
 176
 14.6%
Total South America(a)1,116
 179
 16.1% 961
 153
 15.9% 3,067
 487
 15.9% 2,709
 422
 15.6%
Total in GM markets18,804
 2,234
 11.9% 18,159
 2,117
 11.7% 54,250
 6,320
 11.6% 53,935
 6,264
 11.6%
Total Europe4,356
 83
 1.9% 4,306
 274
 6.4% 14,526
 684
 4.7% 14,096
 897
 6.4%
Total Worldwide(d)23,160
 2,317
 10.0% 22,465
 2,391
 10.6% 68,776
 7,004
 10.2% 68,031
 7,161
 10.5%
United States                       
Cars1,573
 179
 11.4% 1,736
 218
 12.5% 4,709
 541
 11.5% 5,264
 663
 12.6%
Trucks1,276
 347
 27.2% 1,248
 346
 27.8% 3,701
 948
 25.6% 3,619
 956
 26.4%
Crossovers1,662
 255
 15.4% 1,569
 209
 13.3% 4,707
 707
 15.0% 4,482
 593
 13.2%
Total United States4,511
 781
 17.3% 4,553
 773
 17.0% 13,117
 2,196
 16.7% 13,365
 2,212
 16.6%
China(b)                       
SGMS  497
     433
     1,307
     1,243
  
SGMW and FAW-GM  485
     441
     1,441
     1,447
  
Total China6,940
 982
 14.2% 6,568
 874
 13.3% 19,373
 2,748
 14.2% 19,565
 2,690
 13.7%
__________
(a)
Sales of Opel/Vauxhall outside of Europe were insignificant in the three and nine months ended September 30, 2017 and 2016.
(b)
Our China sales include the Automotive China JVs SAIC General Motors Sales Co., Ltd. (SGMS), SAIC GM Wuling Automobile Co., Ltd. (SGMW) and FAW-GM Light Duty Commercial Vehicle Co., Ltd. (FAW-GM). In the three months ended March 31, 2017, we began using estimated vehicle registrations data as the basis for calculating industry volume and market share in China. In the three and nine months ended September 30, 2016, wholesale volumes were used for Industry, GM and Market Share.Our retail sales in China were 908 and 2,718 in the three and nine months ended September 30, 2016.
(c)
Includes Industry and GM sales in India and South Africa. We intend to phase out sales of Chevrolet in the Indian and South African markets by the end of 2017.
(d)
We do not currently export vehicles to Cuba, Iran, North Korea, Sudan or Syria. Accordingly these countries are excluded from industry sales data and corresponding calculation ofmarket share.

In the ninesix months ended SeptemberJune 30, 20172020, we estimate we hadwere the largest market share leader in North America and South America and had the number three two market share in the Asia/Pacific, Middle East and Africa region.China.


TheAs discussed above, total vehicle sales and market share data provided in the table above includes both fleet vehicle sales and sales to retail customers.vehicles. Certain fleet transactions, particularly sales to daily rental car companies, are generally less profitable than retail sales to retailend customers. A significant portion of the sales to daily rental car companies are recorded as operating leases under U.S. GAAP with no recognition of revenue at the date of initial delivery due to guaranteed repurchase obligations. The following table summarizes estimated fleet sales and those sales as a percentage of total retail vehicle sales (vehicles in thousands):

Three Months EndedSix Months Ended
June 30, 2020June 30, 2019June 30, 2020June 30, 2019
GMNA70  207  269  397  
GMI47  127  126  219  
Total fleet sales117  334  395  616  
Fleet sales as a percentage of total vehicle sales8.0 %17.2 %13.5 %16.2 %
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 Three Months Ended Nine Months Ended
 September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016
GMNA160
 144
 501
 500
GMIO91
 106
 214
 234
GMSA68
 43
 141
 108
Total fleet sales319
 293
 856
 842
        
Fleet sales as a percentage of total retail vehicle sales14.3% 13.8% 13.5% 13.4%

The following table summarizes United States fleet sales (vehicles in thousands):
 Three Months Ended Nine Months Ended
 September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016
Daily rental sales74
 69
 191
 217
Other fleet sales62
 51
 226
 205
Total fleet sales136
 120
 417
 422

GM Financial Summary and Outlook GM Financial has expanded its leasing, near prime and prime lending programs in North America; therefore, leasing and prime lending have become a larger percentage of originations and the retail portfolio balance. Based on recent pricing trends for used vehicles in the secondary market that have remained more favorable than previously expected and the temporary impact from Hurricanes Harvey and Irma, we now expect used car prices to decline less than 7% during 2017 compared to 2016. We continue to expect the increased supply of used vehicles to pressure used car prices in 2018. GM Financial continues to expect pre-tax income to double from 2014 earnings of $0.8 billion once full captive penetration levels are achieved. The following table summarizes the residual value as well as the number of units included in GM Financial equipment on operating leases, net by vehicle type (units in thousands):

 September 30, 2017 December 31, 2016
 Residual Value Units Unit Percentage Residual Value Units Unit Percentage
Cars$5,968
 460
 28.6% $5,240
 420
 31.7%
Trucks6,722
 276
 17.1% 5,231
 224
 16.9%
Crossovers13,107
 782
 48.5% 10,349
 604
 45.7%
SUVs3,456
 93
 5.8% 2,791
 75
 5.7%
Total$29,253
 1,611
 100.0% $23,611
 1,323
 100.0%

GM Financial's retail penetration in North America grew to approximately 40% in the nine months ended September 30, 2017 from approximately 33% in the corresponding period in 2016 as a result of the expanded leasing and lending programs. In the nine months ended September 30, 2017 and 2016 GM Financial's revenue consisted of leased vehicle income of 71% and 64%, retail finance charge income of 24% and 30%, and commercial finance charge income of 3%. We believe that offering a comprehensive suite of financing products will generate incremental sales of our vehicles, drive incremental GM Financial earnings and help support our sales throughout various economic cycles.Refer GM Financial's leasing program is exposed to residual values, which are heavily dependent on used vehicle prices. Used vehicle prices for the six months ended June 30, 2020 decreased compared to the PSA Group Transaction portionsame period in 2019. Prices were heavily impacted by softening in the used vehicle market in late March and April, primarily due to impacts from the COVID-19 pandemic. Sales volume and pricing increased in May and June relative to April, primarily due to lower new vehicle inventory and strong demand for used vehicles. However, GM Financial’s current outlook for used vehicle prices is consistent with industry forecasts of a 6% to 8% decrease in 2020 compared to 2019 due to expected continued impacts from the “Overview” sectionCOVID-19 pandemic. Despite a very strong recovery from the lowest prices in April, used vehicle prices face headwinds in the second half of this MD&A2020; driven by increased supply due to: (1) increased off-lease supply from terminated leases that were extended; (2) sales of rental car fleets; (3) increased repossession activity; and (4) weaker dealer demand due to increases in new vehicle inventory and trade-in activity. Additional headwinds to used vehicle prices in the second half of 2020 include economic uncertainty, new vehicle incentive levels and normal seasonal pricing weakness. GM Financial updated residual value estimates as of March 31, 2020 based upon used vehicle market forecasts at that date and increased the depreciation rate for the three months ended June 30, 2020. GM Financial’s residual value estimates as of June 30, 2020 are consistent with the prior quarter; therefore, we expect to record increased depreciation expense in the second half of 2020. If used vehicle prices outperform industry expectations, GM Financial may record increased gains on sales of off-lease vehicles due to lower net book values and/or decreased depreciation expense in future quarters. The following table summarizes the estimated residual value based on our most recent estimates and the number of units included in GM Financial Equipment on operating leases, net by vehicle type (units in thousands):
June 30, 2020December 31, 2019
Residual ValueUnitsPercentageResidual ValueUnitsPercentage
Crossovers$15,752  966  63.2 %$15,950  972  60.5 %
Trucks7,021  280  18.3 %7,256  288  18.0 %
SUVs3,415  97  6.4 %3,917  108  6.7 %
Cars2,501  185  12.1 %3,276  238  14.8 %
Total$28,689  1,528  100.0 %$30,399  1,606  100.0 %

GM Financial's penetration of our retail sales in the U.S. decreased to 49% in the six months ended June 30, 2020 from 50% in the corresponding period in 2019. Penetration levels vary depending on incentive financing programs available and competing third-party financing products in the market. GM Financial's prime loan originations as a discussion onpercentage of total loan originations in North America increased to 74% in the Agreement to sellsix months ended June 30, 2020 from 73% in the Fincos to PSA Group.six months ended June 30, 2019. In the six months ended June 30, 2020, GM Financial's revenue consisted of leased vehicle income of 70%, retail finance charge income of 25% and commercial finance charge income of 3%.


Consolidated Results We review changes in our results of operations under five categories: volume, mix, price, cost and other. Volume measures the impact of changes in wholesale vehicle volumes driven by industry volume, market share and changes in dealer stock levels. Mix measures the impact of changes to the regional portfolio due to product, model, trim, country and option penetration in current year wholesale vehicle volumes. Price measures the impact of changes related to Manufacturer’s Suggested Retail Price and various sales allowances. Cost includes primarily:primarily includes: (1) material and freight; (2) manufacturing, engineering, advertising, administrative and selling and warranty expense; and (3) non-vehicle related activity. Other primarily includes primarily foreign exchange and non-vehicle related automotive revenues as well as equity income or loss from our nonconsolidated affiliates. Due to the uncertainty related to the COVID-19 pandemic, our results in the three and six months ended June 30, 2020 in revenues and costs may not be indicative of results for the remainder of 2020. Refer to the regional sections of this MD&A for additional information.

Total Net Sales and Revenue


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Total Net Sales and Revenue
Three Months EndedFavorable/ (Unfavorable)%Variance Due To
June 30, 2020June 30, 2019VolumeMixPriceOther
(Dollars in billions)
GMNA$11,604  $28,324  $(16,720) (59.0)%$(16.1) $(1.0) $0.9  $(0.5) 
GMI1,677  4,047  (2,370) (58.6)%$(2.2) $0.2  $—  $(0.4) 
Corporate80  54  26  48.1 %$—  
Automotive13,361  32,425  (19,064) (58.8)%$(18.3) $(0.8) $0.9  $(0.9) 
Cruise28  25  3  12.0 %$—  
GM Financial3,423  3,639  (216) (5.9)%$(0.2) 
Eliminations/reclassifications(34) (29) (5) (17.2)%$—  
Total net sales and revenue$16,778  $36,060  $(19,282) (53.5)%$(18.3) $(0.8) $0.9  $(1.1) 

Six Months EndedFavorable/ (Unfavorable)%Variance Due To
June 30, 2020June 30, 2019VolumeMixPriceOther
(Dollars in billions)
GMNA$37,435  $55,689  $(18,254) (32.8)%$(18.5) $(0.2) $0.9  $(0.5) 
GMI4,957  7,897  (2,940) (37.2)%$(2.8) $0.6  $—  $(0.7) 
Corporate118  100  18  18.0 %$—  
Automotive42,510  63,686  (21,176) (33.3)%$(21.3) $0.4  $1.0  $(1.2) 
Cruise53  50  3  6.0 %$—  
GM Financial6,984  7,259  (275) (3.8)%$(0.3) 
Eliminations/reclassifications(60) (57) (3) (5.3)%$—  $—  
Total net sales and revenue$49,487  $70,938  $(21,451) (30.2)%$(21.3) $0.4  $1.0  $(1.5) 
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 Three Months Ended Favorable/ (Unfavorable) %  Variance Due To
September 30, 2017 September 30, 2016    Volume Mix Price Other
      (Dollars in billions)
GMNA$24,819
 $31,085
 $(6,266) (20.2)%  $(7.3) $1.3
 $(0.4) $0.2
GMIO3,007
 3,376
 (369) (10.9)%  $(0.4) $—
 $0.1
 $—
GMSA2,569
 2,029
 540
 26.6 %  $0.4
 $0.1
 $0.1
 $(0.1)
Corporate80
 40
 40
 n.m.
  

 

 

 $—
Automotive30,475
 36,530
 (6,055) (16.6)%  $(7.4)
$1.4

$(0.2)
$0.1
GM Financial3,161
 2,360
 801
 33.9 %  

 

 

 $0.8
Eliminations(13) (1) (12) n.m.
  

 

 

 $—
Total net sales and revenue$33,623
 $38,889
 $(5,266) (13.5)%  $(7.4) $1.4
 $(0.2) $0.9

Automotive and Other Cost of Sales
Three Months EndedFavorable/ (Unfavorable)%Variance Due To
June 30, 2020June 30, 2019VolumeMixCostOther

(Dollars in billions)
GMNA$11,165  $24,371  $13,206  54.2 %$11.7  $0.2  $1.5  $(0.2) 
GMI2,015  3,633  1,618  44.5 %$2.0  $(0.2) $(0.3) $0.2  
Corporate76  32  (44) n.m.$(0.1) $—  
Cruise188  292  104  35.6 %$0.1  $—  
Eliminations—  (1) (1) n.m.$—  
Total automotive and other cost of sales$13,444  $28,327  $14,883  52.5 %$13.7  $(0.1) $1.2  $0.1  
________
n.m. = not meaningful

Six Months EndedFavorable/ (Unfavorable)%Variance Due To
June 30, 2020June 30, 2019VolumeMixCostOther
(Dollars in billions)
GMNA$33,718  $49,342  $15,624  31.7 %$13.5  $(0.2) $2.4  $(0.1) 
GMI5,898  6,662  764  11.5 %$2.5  $(0.5) $(1.6) $0.3  
Corporate183  67  (116) n.m.$(0.1) $(0.1) 
Cruise371  487  116  23.8 %$0.1  $—  
Eliminations—  (2) (2) n.m.$—  $—  
Total automotive and other cost of sales$40,170  $56,556  $16,386  29.0 %$16.0  $(0.7) $0.9  $0.2  
________
n.m. = not meaningful

In the three months ended June 30, 2020, favorable Cost was primarily due to: (1) favorable cost of $0.9 billion primarily due to the impact of COVID-19, inclusive of the suspension of production and austerity measures as well as cost savings associated with transformation activities; (2) charges of $0.4 billion primarily related to supplier-related charges and accelerated depreciation resulting from transformation activities in 2019; and (3) decreased costs of $0.3 billion related to parts and accessories sales; partially offset by (4) a benefit of $0.4 billion related to the retrospective recoveries of indirect taxes in Brazil in 2019.

In the six months ended June 30, 2020, favorable Cost was primarily due to: (1) charges of $1.1 billion primarily related to accelerated depreciation and supplier-related charges resulting from transformation activities in 2019; (2) favorable cost of $1.0 billion primarily due to the impact of COVID-19, inclusive of the suspension of production and austerity measures as well as cost savings associated with transformation activities; and (3) decreased costs of $0.3 billion related to parts and accessories sales; partially offset by (4) a benefit of $1.2 billion related to the retrospective recoveries of indirect taxes in Brazil in 2019; and (5) charges of $0.5 billion primarily related to dealer restructuring charges, property and intangible asset impairments and inventory provisions in Australia, New Zealand, and Thailand. In the six months ended June 30, 2020, favorable Other was due to the foreign currency effect resulting from the weakening of the Brazilian Real and other currencies against the U.S. Dollar.

Automotive and other selling, general and administrative expense
Three Months EndedFavorable/ (Unfavorable)Six Months EndedFavorable/ (Unfavorable)
June 30, 2020June 30, 2019%June 30, 2020June 30, 2019%
Automotive and other selling, general and administrative expense$1,310  $2,102  $792  37.7 %$3,280  $4,201  $921  21.9 %

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In the three months ended June 30, 2020, Automotive and other selling, general and administrative expense decreased primarily due to decreased advertising and other costs of $0.8 billion primarily related to the impact of COVID-19, inclusive of austerity measures and cost savings associated with transformation activities.

In the six months ended June 30, 2020, Automotive and other selling, general and administrative expense decreased primarily due to decreased advertising and other costs of $0.9 billion primarily related to the impact of COVID-19, inclusive of austerity measures and cost savings associated with transformation activities.

Interest Income and Other Non-operating Income, net
Three Months EndedFavorable/ (Unfavorable)Six Months EndedFavorable/ (Unfavorable)
June 30, 2020June 30, 2019%June 30, 2020June 30, 2019%
Interest income and other non-operating income, net$413  $364  $49  13.5 %$724  $1,169  $(445) (38.1)%

In the three months ended June 30, 2020, Interest income and other non-operating income, net increased primarily due to gains related to PSA warrants and our investment in Lyft of $0.2 billion, partially offset by several other insignificant items.

In the six months ended June 30, 2020, Interest income and other non-operating income, net decreased primarily due to losses related to PSA warrants and lower gains in our investment in Lyft of $0.7 billion, partially offset by increased non-service pension income of $0.2 billion.

The following table summarizes gains (losses) related to our investment in Lyft and PSA warrants:
Three Months EndedFavorable/ (Unfavorable)Six Months EndedFavorable/ (Unfavorable)
June 30, 2020June 30, 2019June 30, 2020June 30, 2019
Gains (losses) related to Lyft$4  $(65) $69  $10  $220  $(210) 
Gains (losses) related to PSA warrants114  32  82  (303) 171  (474) 
Total gains (losses) on investments$118  $(33) $151  $(293) $391  $(684) 

Income Tax Expense
Three Months EndedFavorable/ (Unfavorable)Six Months EndedFavorable/ (Unfavorable)
June 30, 2020June 30, 2019%June 30, 2020June 30, 2019%
Income tax expense (benefit)$(112) $524  $636  n.m.$245  $661  $416  62.9 %
________
n.m. = not meaningful
In the three months ended June 30, 2020, Income tax expense decreased primarily due to lower pre-tax income.

In the six months ended June 30, 2020, Income tax expense decreased primarily due tolower pre-tax income, partially offset by establishment of a valuation allowance.

For the three and six months ended June 30, 2020, our ETR-adjusted was 14.6% and 23.2%.

Refer to Note 16 to our condensed consolidated financial statements for additional information related to Income tax expense.

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GM North America
Three Months EndedFavorable / (Unfavorable)%Variance Due To
June 30, 2020June 30, 2019VolumeMixPriceCostOther
(Dollars in billions)
Total net sales and revenue$11,604  $28,324  $(16,720) (59.0)%$(16.1) $(1.0) $0.9  $(0.5) 
EBIT (loss)-adjusted$(101) $3,022  $(3,123) n.m.$(4.4) $(0.8) $0.9  $1.4  $(0.2) 
EBIT (loss)-adjusted margin(0.9)%10.7 %(11.6)%
(Vehicles in thousands)
Wholesale vehicle sales331  870  (539) (62.0)%
__________
n.m. = not meaningful

                 
 Nine Months Ended Favorable/ (Unfavorable) %  Variance Due To
September 30, 2017 September 30, 2016    Volume Mix Price Other
      (Dollars in billions)
GMNA$82,594
 $87,815
 $(5,221) (5.9)%  $(8.5) $3.1
 $0.1
 $0.1
GMIO9,400
 9,923
 (523) (5.3)%  $(0.8) $—
 $0.3
 $—
GMSA6,826
 5,011
 1,815
 36.2 %  $1.0
 $0.4
 $0.2
 $0.2
Corporate306
 113
 193
 n.m.
  

 

 

 $0.2
Automotive99,126
 102,862
 (3,736) (3.6)%  $(8.4)
$3.6

$0.6

$0.5
GM Financial8,899
 6,429
 2,470
 38.4 %  

 

 

 $2.5
Eliminations(152) (3) (149) n.m.
  

 

 

 $(0.1)
Total net sales and revenue$107,873
 $109,288
 $(1,415) (1.3)%  $(8.4) $3.6
 $0.6
 $2.8
Six Months EndedFavorable / (Unfavorable)%Variance Due To
June 30, 2020June 30, 2019VolumeMixPriceCostOther
(Dollars in billions)
Total net sales and revenue$37,435  $55,689  $(18,254) (32.8)%$(18.5) $(0.2) $0.9  $(0.5) 
EBIT-adjusted$2,093  $4,918  $(2,825) (57.4)%$(4.9) $(0.4) $0.9  $1.8  $(0.3) 
EBIT-adjusted margin5.6 %8.8 %(3.2)%
(Vehicles in thousands)
Wholesale vehicle sales1,106  1,729  (623) (36.0)%
__________
n.m. = not meaningful

Automotive Cost of Sales
 Three Months Ended Favorable/ (Unfavorable) %  Variance Due To
 September 30, 2017 September 30, 2016    Volume Mix Cost Other
      (Dollars in billions)
GMNA$21,116
 $25,727
 $4,611
 17.9 %  $5.2
 $(0.7) $0.1
 $—
GMIO2,858
 3,416
 558
 16.3 %  $0.4
 $—
 $0.2
 $0.1
GMSA2,373
 1,965
 (408) (20.8)%  $(0.3) $(0.1) $—
 $—
Corporate175
 32
 (143) n.m.
  
 
 $(0.2) $—
Eliminations(11) (1) 10
 n.m.
  
 
 $—
 $—
Total automotive cost of sales$26,511
 $31,139
 $4,628
 14.9 %  $5.2
 $(0.8) $0.1
 $0.1
__________
n.m. = not meaningful
 Nine Months Ended Favorable/ (Unfavorable) %  Variance Due To
 September 30, 2017 September 30, 2016    Volume Mix Cost Other
      (Dollars in billions)
GMNA$68,644
 $73,015
 $4,371
 6.0 %  $6.1
 $(2.4) $0.8
 $(0.2)
GMIO9,557
 9,814
 257
 2.6 %  $0.7
 $(0.3) $(0.3) $0.1
GMSA6,445
 4,845
 (1,600) (33.0)%  $(0.8) $(0.4) $(0.1) $(0.3)
Corporate662
 90
 (572) n.m.
  
 
 $(0.6) $0.1
Eliminations(147) (3) 144
 n.m.
  

 

 $0.1
 $—
Total automotive cost of sales$85,161
 $87,761
 $2,600
 3.0 %  $5.9
 $(3.1) $—
 $(0.3)
__________
n.m. = not meaningful

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In the three months ended September 30, 2017 favorable Cost was due primarily to: (1) decreased warranty costs of $0.5 billion; and (2) decreased material and freight costs of $0.2 billion related to carryover vehicles; partially offset by (3) increased material and freight costs of $0.3 billion related to vehicles launched within the last twelve months incorporating significant exterior and/or interior changes (Majors); (4) increased engineering costs of $0.2 billion; and (5) increased manufacturing costs of $0.2 billion.

In the nine months ended September 30, 2017 Cost remained flat due primarily to: (1) increased material and freight costs of $0.8 billion related to Majors; (2) increased engineering costs of $0.8 billion; and (3) charges of $0.4 billion related to restructuring actions in India and South Africa; offset by (4) decreased warranty costs of $0.9 billion; (5) decreased material and freight costs of $0.6 billion related to carryover vehicles; (6) restructuring costs related to UAW cash severance incentive program of $0.2 billion in 2016; and (7) decreased manufacturing costs of $0.2 billion. In the nine months ended September 30, 2017 unfavorable Other was due primarily to the foreign currency effect of $0.3 billion due to the strengthening of the Brazilian Real against the U.S. Dollar.

Automotive selling, general and administrative expense
 Three Months Ended Favorable/ (Unfavorable)    Nine Months Ended Favorable/ (Unfavorable)  
 September 30, 2017 September 30, 2016  %  September 30, 2017 September 30, 2016  %
Automotive selling, general and administrative expense$2,304
 $2,400
 $96
 4.0%  $7,141
 $7,378
 $237
 3.2%

In the three months ended September 30, 2017 Automotive selling, general and administrative expense decreased due primarily to decreased advertising costs of $0.2 billion, partially offset by a net benefit for legal related matters related to the ignition switch recall in 2016.

In the nine months ended September 30, 2017 Automotive selling, general and administrative expense decreased due primarily to decreased advertising costs of $0.2 billion.

Income Tax Expense
 Three Months EndedFavorable/ (Unfavorable)    Nine Months Ended Favorable/ (Unfavorable)  
 September 30, 2017 September 30, 2016  %  September 30, 2017 September 30, 2016  %
Income tax expense$2,316
 $902
 $(1,414) n.m.  $3,637
 $2,436
 $(1,201) (49.3)%

In the three months ended September 30, 2017 Income tax expense increased due primarily to the establishment of a valuation allowance related to the sale of the Opel/Vauxhall Business, partially offset by tax benefits related to tax settlements and a decrease in pre-tax earnings.

In the nine months ended September 30, 2017 Income tax expense increased due primarily to the establishment of a valuation allowance related to the sale of the Opel/Vauxhall Business, partially offset by tax benefits related to tax settlements, a decrease in pre-tax earnings, and tax benefits from foreign dividends.

Changes in U.S. or foreign tax laws could impact the value of our deferred tax assets, resulting in asset impairment or write-off. If U.S. tax reform legislation is enacted it could result in a one-time reduction to net deferred tax assets and a related increase to Income tax expense in the period that includes the enactment date of the law change. Given the magnitude of our net deferred tax assets, the income tax charge to earnings could be material.

Discontinued Operations
 Three Months Ended Favorable / (Unfavorable)    Nine Months Ended Favorable / (Unfavorable)  
 September 30, 2017 September 30, 2016  %  September 30, 2017 September 30, 2016  %
Income (loss) from discontinued operations, net of tax$(3,096) $5
 $(3,101) n.m.  $(3,935) $119
 $(4,054) n.m.
__________
n.m. = not meaningful

In the three months ended September 30, 2017 Income (loss) from discontinued operations, net of tax, decreased due primarily to a disposal loss of $3.1 billion, net of tax, primarily related to deferred tax assets that transferred to PSA Group, previously

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deferred pension losses and payment of the de-risking premium to PSA Group for its assumption of certain underfunded pension liabilities.

In the nine months ended September 30, 2017 Income (loss) from discontinued operations, net of tax, decreased due primarily to a disposal loss of $3.7 billion, net of tax, primarily related to deferred tax assets that transferred to PSA Group, previously deferred pension losses and payment of the de-risking premium to PSA Group for its assumption of certain underfunded pension liabilities; and an increased operating loss of $0.3 billion due primarily to decreased wholesale volumes and unfavorable foreign exchange in the United Kingdom.

GM North America
 Three Months Ended Favorable / (Unfavorable) %  Variance Due To
 September 30, 2017 September 30, 2016    Volume Mix Price Cost Other
      (Dollars in billions)
Total net sales and revenue$24,819
 $31,085
 $(6,266) (20.2)%  $(7.3) $1.3
 $(0.4) 
 $0.2
EBIT-adjusted$2,068
 $3,579
 $(1,511) (42.2)%  $(2.1) $0.6
 $(0.4) $0.3
 $0.1
EBIT-adjusted margin8.3% 11.5% (3.2)%             
 (Vehicles in thousands)             
Wholesale vehicle sales762
 1,030
 (268) (26.0)%           
                   
 Nine Months Ended Favorable / (Unfavorable) %  Variance Due To
 September 30, 2017 September 30, 2016    Volume Mix Price Cost Other
      (Dollars in billions)
Total net sales and revenue$82,594
 $87,815
 $(5,221) (5.9)%  $(8.5) $3.1
 $0.1
 
 $0.1
EBIT-adjusted$9,014
 $9,708
 $(694) (7.1)%  $(2.4) $0.7
 $0.1
 $1.3
 $(0.3)
EBIT-adjusted margin10.9% 11.1% (0.2)%             
 (Vehicles in thousands)             
Wholesale vehicle sales2,596 2,908
 (312) (10.7)%           

GMNA Total Net Sales and Revenue In the three months ended SeptemberJune 30, 20172020, Total net sales and revenue decreased primarily due to: (1) decreased net wholesale volumes across most vehicle lines as a result of suspending production due to the COVID-19 pandemic; (2) unfavorable mix associated with decreased sales of full-size SUVs and pickup trucks partially offset by decreased sales of crossover vehicles and passenger cars; and (3) unfavorable Other primarily due to decreased sales of parts and accessories; partially offset by (4) favorable price primarily due to full-size pickup trucks and crossover vehicles.

In the six months ended June 30, 2020, Total net sales and revenue decreased primarily due primarily to: (1) decreased net wholesale volumes across most vehicle lines as a result of suspending production due primarily to a decrease in full-size pick-up trucks and crossover vehicles due primarily to planned production downtime to prepare for current and future product launches, planned production downtimethe COVID-19 pandemic; (2) unfavorable mix associated with a decrease in Chevrolet passenger cars including the Malibudecreased sales of full-size SUVs and Cruze to match supply and demand, and a decrease in off-lease rental car sales; and (2) unfavorable pricing for carryovers primarily related to Chevrolet passenger cars;pickup trucks partially offset by (3) favorable Mix associated with a decrease indecreased sales of Chevroletcrossover vehicles and passenger cars.

In the nine months ended September 30, 2017 Total net salescars; and revenue decreased(3) unfavorable Other primarily due primarily to decreased net wholesale volumes associated with a decrease in off-lease rental car sales of parts and a decrease in Chevrolet passenger cars,accessories; partially offset by (4) favorable Mix associated with a decrease in sales of Chevrolet passenger carsprice primarily due to crossover vehicles and decreased volumes of off-lease rental car sales.full-size pickup trucks.


GMNA EBIT-Adjusted EBIT (Loss)-Adjusted In the three months ended SeptemberJune 30, 20172020, EBIT-adjusted decreased primarily due primarily to: (1) decreased net wholesale volumes; and (2) unfavorable pricing; partially offset bymix; and (3) favorable Mix; and (4) favorable Cost including decreased warranty costs of $0.5 billion and decreased material and freight costs for carryover vehicles of $0.2 billion, partially offset by increased material costs related to Majors of $0.3 billion.

In the nine months ended September 30, 2017 EBIT-adjusted decreased due primarily to: (1) decreased net wholesale volumes; and (2) unfavorable Other primarily due primarily to the foreign currency effect resulting from the weakening of the Mexican Peso against the U.S. Dollar; partially offset by (3)(4) favorable Cost includingdue to savings in advertising of $0.5 billion, engineering of $0.4 billion and manufacturing of $0.4 billion, all inclusive of the suspension of production and austerity measures in response to the COVID-19 pandemic as well as transformation activities, and increased non-service pension income; and (5) favorable price.

In the six months ended June 30, 2020, EBIT-adjusted decreased warranty costsprimarily due to: (1) decreased net wholesale volumes; (2) unfavorable mix; and (3) unfavorable Other primarily due to the foreign currency effect resulting from the weakening of $0.9 billion, decreased material and freight costs relatedthe Mexican Peso against the U.S. Dollar; partially offset by (4) favorable Cost due to carryover vehiclessavings in advertising of $0.6 billion, decreased restructuring chargesengineering of $0.5 billion and manufacturing of $0.4 billion, all inclusive of the suspension of production and austerity measures in response to the COVID-19 pandemic as well as transformation activities, increased non-service pension income of $0.2 billion related to the 2016 UAW cash severance incentive program and decreased manufacturing and advertising costs, partially offset by increasedfavorable material costs for Majorsperformance of $0.8 billion and increased engineering costs of $0.3$0.2 billion; and (4)(5) favorable Mix.price.

GM International Operations


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GM International
Three Months EndedFavorable / (Unfavorable)Variance Due To
June 30, 2020June 30, 2019%VolumeMixPriceCostOther
(Dollars in billions)
Total net sales and revenue$1,677  $4,047  $(2,370) (58.6)%$(2.2) $0.2  $—  $(0.4) 
EBIT (loss)-adjusted$(270) $(48) $(222) n.m.$(0.2) $—  $—  $0.1  $(0.1) 
EBIT (loss)-adjusted margin(16.1)%(1.2)%(14.9)%
Equity income — Automotive China$169  $235  $(66) (28.1)%
EBIT (loss)-adjusted — excluding Equity income$(439) $(283) $(156) (55.1)%
(Vehicles in thousands)
Wholesale vehicle sales90  259  (169) (65.3)%
 Three Months Ended Favorable / (Unfavorable)    Variance Due To
 September 30, 2017 September 30, 2016  %  Volume Mix Price Cost Other
      (Dollars in billions)
Total net sales and revenue$3,007
 $3,376
 $(369) (10.9)%  $(0.4) $—
 $0.1
 
 $—
EBIT-adjusted$337
 $220
 $117
 53.2 %  $(0.1) $—
 $0.1
 $0.2
 $(0.1)
EBIT-adjusted margin11.2% 6.5% 4.7%             
Equity income – Automotive China$459
 $459
 $—
 — %           
EBIT (loss)-adjusted – excluding Equity income$(122) $(239) $117
 49.0 %           
 (Vehicles in thousands)             
Wholesale vehicle sales136
 160
 (24) (15.0)%           
__________
n.m. = not meaningful
                   
 Nine Months Ended Favorable / (Unfavorable)    Variance Due To
 September 30, 2017 September 30, 2016  %  Volume Mix Price Cost Other
      (Dollars in billions)
Total net sales and revenue$9,400
 $9,923
 $(523) (5.3)%  $(0.8) $—
 $0.3
 
 $—
EBIT-adjusted$974
 $844
 $130
 15.4 %  $(0.1) $(0.2) $0.3
 $0.3
 $(0.1)
EBIT-adjusted margin10.4% 8.5% 1.9%             
Equity income – Automotive China$1,472
 $1,448
 $24
 1.7 %           
EBIT (loss)-adjusted – excluding Equity income$(498) $(604) $106
 17.5 %           
 (Vehicles in thousands)             
Wholesale vehicle sales452 500
 (48) (9.6)%           
Six Months EndedFavorable / (Unfavorable)Variance Due To
June 30, 2020June 30, 2019%VolumeMixPriceCostOther
(Dollars in billions)
Total net sales and revenue$4,957  $7,897  $(2,940) (37.2)%$(2.8) $0.6  $—  $(0.7) 
EBIT (loss)-adjusted$(821) $(17) $(804) n.m.$(0.3) $—  $0.1  $0.1  $(0.8) 
EBIT (loss)-adjusted margin(16.6)%(0.2)%(16.4)%
Equity income — Automotive China$2  $611  $(609) (99.7)%
EBIT (loss)-adjusted — excluding Equity income$(823) $(628) $(195) (31.1)%
(Vehicles in thousands)
Wholesale vehicle sales281  495  (214) (43.2)%

__________
n.m. = not meaningful

The vehicle sales of our Automotive China JVs are not recorded in Total net sales and revenue. The results of our joint ventures are recorded in Equity income, which is included in EBIT-adjustedEBIT (loss)-adjusted above.


GMIOGMI Total Net Sales and Revenue In the three months ended SeptemberJune 30, 20172020, Total net sales and revenue decreased primarily due to: (1) decreased wholesale volumes primarily due to lower industry volumes due to the COVID-19 pandemic primarily in Brazil and Asia/Pacific; and (2) unfavorable Other primarily due to the foreign currency effect resulting from the weakening of the Brazilian Real and Argentine Peso against the U.S. Dollar and decreased parts and accessories sales, partially offset by (3) favorable mix in Brazil partially offset by unfavorable mix in the Middle East.

In the six months ended June 30, 2020, Total net sales and revenue decreased primarily due primarily toto: (1) decreased wholesale volumes across our vehicle portfolio in the Middle Eastprimarily due to decreasedlower industry sales, partially offset by favorable pricingvolumes and the COVID-19 pandemic primarily in AustraliaBrazil and Asia/Pacific; and (2) unfavorable Other primarily due to carryover vehicles and in Egypt to mitigate the impactforeign currency effect resulting from the weakening of the weakening Egyptian Pound against the U.S. Dollar.

In the nine months ended September 30, 2017 Total net salesBrazilian Real and revenue decreased due primarily to decreased wholesale volumes across our vehicle portfolio in the Middle East associated with decreased industry sales and decreased passenger car volumes in Australia due to ceasing production of the Chevrolet Cruze; partially offset by favorable pricing in Egypt to mitigate the impact of the weakening Egyptian PoundArgentine Peso against the U.S. Dollar and decreased parts and accessories sales, partially offset by (3) favorable mix in Australia due to carryover vehicles.Brazil and Asia/Pacific.


GMIO EBIT-Adjusted GMI EBIT (Loss)-Adjusted In the three months ended SeptemberJune 30, 2017 EBIT-adjusted2020, EBIT (loss)-adjusted increased primarily due to unfavorable volume.

In the six months ended June 30, 2020, EBIT (loss)-adjusted increased primarily due to: (1) favorable Costunfavorable volume; and (2) unfavorable Other primarily due to decreased equity income and the settlementforeign currency effect resulting from the weakening of labor negotiations in the prior yearArgentine Peso and decreased selling, general and administrative expenses in Korea and India; and (2) favorable pricing in Australia and Egypt; other currencies against the U.S. Dollar; partially offset by (3) decreased wholesale volumes in the Middle East.

In the nine months ended September 30, 2017 EBIT-adjusted increased due primarily to: (1) favorable Cost primarily due to the settlementdecreased advertising.

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GENERAL MOTORS COMPANY AND SUBSIDIARIES


We view the Chinese market as important to our global growth strategy and are employing a multi-brand strategy led by our Buick, Chevrolet and Cadillac brands. In the coming years we plan to leverage our global architectures to increase the number of product offerings under the Buick, Chevrolet and Cadillac brands in China and continue to grow our business under the local Baojun and Wuling brands, with Baojun seizing the growth opportunitiesfocusing its expansion in less developed cities and markets. We operate in the

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Chinese market through a number of joint ventures and maintaining good relationsstrong relationships with our joint venture partners which are affiliated with the Chinese government, is an important part of our China growth strategy.


The following tables summarizetable summarizes certain key operational and financial data for the Automotive China JVs (vehicles in thousands):
Three Months EndedSix Months Ended
June 30, 2020June 30, 2019June 30, 2020June 30, 2019
Wholesale vehicle sales, including vehicles exported to markets outside of China733  731  1,075  1,587  
Total net sales and revenue$9,239  $9,002  $13,560  $19,148  
Net income$562  $499  $214  $1,266  

Cruise
 Three Months Ended  Nine Months Ended
 September 30, 2017 September 30, 2016  September 30, 2017 September 30, 2016
Wholesale vehicles including vehicles exported to markets outside of China963
 905
  2,842
 2,752
Total net sales and revenue$12,161
 $10,945
  $34,177
 $32,417
Net income$964
 $956
  $2,912
 $3,021
Three Months EndedFavorable / (Unfavorable)%Six Months EndedFavorable / (Unfavorable)%
June 30, 2020June 30, 2019June 30, 2020June 30, 2019
Total net sales and revenue(a)$28  $25  $3  12.0 %$53  $50  $3  6.0 %
EBIT (loss)-adjusted$(195) $(279) $84  30.1 %$(423) $(448) $25  5.6 %
__________
 September 30, 2017 December 31, 2016
Cash and cash equivalents$7,488
 $8,197
Debt$391
 $246
(a)Reclassified to Interest income and other non-operating income, net in our condensed consolidated income statements in the three and six months ended June 30, 2020 and 2019.


Cruise EBIT (Loss)-Adjusted In the three and six months ended June 30, 2020, EBIT (loss)-adjusted decreased primarily due to a reduction in development costs as we progress towards the commercialization of a network of on-demand autonomous vehicles in the U.S.

GM South AmericaFinancial
 Three Months Ended Favorable / (Unfavorable)    Variance Due To
 September 30, 2017 September 30, 2016  %  Volume Mix Price Cost Other
      (Dollars in billions)
Total net sales and revenue$2,569
 $2,029
 $540
 26.6%  $0.4
 $0.1
 $0.1
 
 $(0.1)
EBIT (loss)-adjusted$52
 $(118) $170
 n.m.
  $0.1
 $—
 $0.1
 $—
 $(0.1)
EBIT (loss)-adjusted margin2.0% (5.8)% 7.8%             
 (Vehicles in thousands)             
Wholesale vehicle sales185
 153
 32
 20.9%           
Three Months EndedIncrease/ (Decrease)%Six Months EndedIncrease/ (Decrease)%
June 30, 2020June 30, 2019June 30, 2020June 30, 2019
Total revenue$3,423  $3,639  $(216) (5.9)%$6,984  $7,259  $(275) (3.8)%
Provision for loan losses$327  $179  $148  82.7 %$793  $354  $439  n.m.
EBT-adjusted$226  $536  $(310) (57.8)%$456  $895  $(439) (49.1)%
Average debt outstanding (dollars in billions)$95.9  $92.5  $3.4  3.6 %$92.4  $92.4  $—  (0.1)%
Effective rate of interest paid3.3 %4.1 %(0.8)%3.5 %4.1 %(0.6)%
__________
n.m. = not meaningful

 Nine Months Ended Favorable / (Unfavorable)    Variance Due To
 September 30, 2017 September 30, 2016  %  Volume Mix Price Cost Other
      (Dollars in billions)
Total net sales and revenue$6,826
 $5,011
 $1,815
 36.2%  $1.0
 $0.4
 $0.2
 
 $0.2
EBIT (loss)-adjusted$(90) $(300) $210
 70.0%  $0.2
 $—
 $0.2
 $(0.1) $(0.1)
EBIT (loss)-adjusted margin(1.3)% (6.0)% 4.7%             
 (Vehicles in thousands)             
Wholesale vehicle sales487
 400
 87
 21.8%           

GMSA Total Net Sales andGM Financial Revenue In the three months ended SeptemberJune 30, 2017 Total net sales2020, total revenue decreased primarily due to decreased leased vehicle income of $0.1 billion primarily due to a decrease in the leased vehicle portfolio and revenue increaseddecreased commercial finance charge income of $0.1 billion due primarily to increased wholesale volumes associated witha lower effective yield resulting from falling benchmark interest rates and a decrease in the Chevrolet Onix in Brazil and Argentina.commercial finance receivables portfolio as a result of GM suspending manufacturing operations due to the COVID-19 pandemic.

In the ninesix months ended SeptemberJune 30, 2017 Total net sales2020 total revenue decreased primarily due to decreased leased vehicle income of $0.2 billion primarily due to a decrease in the leased vehicle portfolio and revenue increased due primarily to: (1) increased wholesale volumes associated with the Chevrolet Onix in Brazil and Argentina; (2) favorable Mix driven by increased salesdecreased investment income of the Chevrolet Cruze in Brazil and Argentina; (3) favorable pricing related to carryover vehicles in Argentina and Brazil; and (4) favorable Other due primarily to the foreign currency effect$0.1 billion resulting from the strengthening of the Brazilian Real against the U.S. Dollar.falling benchmark interest rates.

GMSA EBIT (Loss)-Adjusted In the three months ended September 30, 2017 EBIT (loss)-adjusted decreased due primarily to favorable Price and increased wholesale volumes.

In the nine months ended September 30, 2017 EBIT (loss)-adjusted decreased due primarily to favorable Price and increased wholesale volumes.


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GM Financial
 Three Months Ended Increase / (Decrease) %  Nine Months Ended Increase/ (Decrease) %
 September 30, 2017 September 30, 2016    September 30, 2017 September 30, 2016  
Total revenue$3,161
 $2,360
 $801
 33.9%  $8,899
 $6,429
 $2,470
 38.4%
Provision for loan losses$204
 $167
 $37
 22.2%  $573
 $501
 $72
 14.4%
Earnings before income taxes-adjusted$310
 $193
 $117
 60.6%  $895
 $600
 $295
 49.2%
 (Dollars in billions)
Average debt outstanding$79.0
 $56.9
 $22.1
 38.8%  $73.3
 $52.4
 $20.9
 39.9%
Effective rate of interest paid3.4% 3.6% (0.2)% 

  3.5% 3.6% (0.1)% 


GM Financial Revenue EBT-Adjusted In the three months ended SeptemberJune 30, 2017 Total revenue increased2020, EBT-adjusted decreased primarily due primarily to increasedto: (1) decreased leased vehicle income net of $0.7leased vehicle expenses of $0.3 billion primarily due to a decrease in the leased vehicle portfolio and an increase in the depreciation rate resulting from lowered residual value estimates on the lease portfolio; (2) increased provision for loan losses of $0.1 billion primarily due to increased expected charge-offs and decreased expected recoveries as a result of the economic impact of the COVID-19 pandemic, inclusive of new CECL standard impacts; partially offset by (3) decreased interest expense of $0.2 billion due to a larger lease portfolio.

In the nine months ended September 30, 2017 Total revenue increased due primarily to increased leased vehicle incomelower effective rate of $2.1 billion due to a larger lease portfolio.

GM Financial Earnings Before Income Taxes-Adjusted In the three months ended September 30, 2017 Earnings before income taxes-adjusted increased due primarily to increased net leased vehicle income of $0.2 billion due primarily to a larger lease portfolio,interest on debt resulting from falling benchmark interest rates, partially offset by an increase in interest expensethe average debt outstanding.

In the six months ended June 30, 2020 EBT-adjusted decreased primarily due to: (1) increased provision for loan losses of $0.4 billion primarily due to increased expected charge-offs and decreased expected recoveries as a result of the economic impact of the COVID-19 pandemic, inclusive of new CECL standard impacts; (2) decreased leased vehicle income net of leased vehicle expenses of $0.2 billion primarily due to a decrease in the leased vehicle portfolio and an increase in average debt outstanding.

In the nine months ended September 30, 2017 Earnings before income taxes-adjusted increased due primarily to increased net leased vehicle income of $0.6 billion due primarily to a largerdepreciation rate resulting from lowered residual value estimates on the lease portfolio,portfolio; partially offset by an increase in(3) decreased interest expense of $0.5$0.3 billion due to an increase in averagea lower effective rate of interest on debt outstanding.resulting from falling benchmark interest rates.


Liquidity and Capital Resources We believe thatAs described in the “Overview” section of this MD&A, the COVID-19 pandemic has had a material impact on our financial results and we expect it will continue to have a material impact on future periods, including our cash flows from operating activities and liquidity. The extent of COVID-19’s impact on our liquidity will depend upon, among other things, the duration, spread and intensity of the pandemic and related government responses such as required physical distancing, restrictions on business operations and travel, the pace of recovery of economic activity and the impact to consumers, all of which are uncertain and difficult to predict. Refer to Item 1A. Risk Factors for a full discussion of the risks associated with the COVID-19 pandemic.

In April and May 2020, to preserve financial flexibility in light of the current level of cash and cash equivalents, marketable securities and availabilityuncertainty in global markets resulting from the COVID-19 pandemic, we borrowed $15.9 billion under our revolving credit facilities, will beextended a portion of our revolving credit facilities for an additional year, issued $4.0 billion in senior unsecured notes and entered into a new unsecured 364-day, $2.0 billion revolving credit facility. See the "Automotive Liquidity" section of this MD&A for additional information on these liquidity actions. In response to the uncertainties created by the pandemic, we are executing a number of austerity measures to reduce costs, such as limiting advertising and other third-party spending, suspending our dividend on common shares, deferring salaried employee compensation and delaying non-critical projects, including certain future product programs.

Despite the negative impact COVID-19 continues to have on our liquidity, we believe our current levels of cash, cash equivalents, and marketable debt securities, which include the borrowings under our revolving credit facilities, and other liquidity actions currently available to us are sufficient to meet our liquidity needs. We expect to have substantial cash requirements going forward which we plan to fund through total available liquidity and cash flows generated from operations and future debt issuances.requirements. We also maintain access to the capital markets and may issue debt or equity securities, from time to time, which may provide an additional source of liquidity. We have substantial cash requirements going forward, which we plan to fund through our total available liquidity, cash flows from operating activities and additional liquidity measures, if determined to be necessary. Our future uses of cash, whichability to raise additional capital may vary from time to time based on marketbe adversely impacted by potential worsening global economic conditions and other factors, are focused on three objectives, which constitute our capital allocation framework: (1) reinvestthe recent disruptions to, and volatility in, our business; (2) maintain a strong investment-grade balance sheet;the credit and (3) return available cash to shareholders. financial markets in the U.S. and worldwide resulting from the ongoing COVID-19 pandemic.

Our known current and future material uses of cash include, among other possible demands:relate to funding near-term operations through the current economic cycle including: (1) capital expenditures of approximately $8 billion annually as well as payments for engineering and product development activities; (2)ongoing cash costs including payments associated with previously announced vehicle recalls, the settlements of the multidistrictmulti-district litigation and any other recall-related contingencies; (3)contingencies, payments to service debt and other long-term obligations, including repayment of amounts drawn on our revolving credit facilities and discretionary and mandatory contributions to our pension plans; (4) dividendand (2) capital expenditures and payments for engineering and product development activities, which we expect will be significantly less than previously forecasted for the remainder of 2020 due to our austerity measures. Our future uses of cash will be focused on the three objectives of our common stock thatcapital allocation program: (1) reinvest in our business at an average target ROIC-adjusted rate of 20% or greater; (2) maintain a strong investment-grade balance sheet, including a target average automotive cash balance of $18 billion; and (3) after the first two objectives are declared bymet, return available cash to shareholders. Our senior management evaluates our capital allocation program on an ongoing basis and recommends any modifications to the program to our Board of Directors; and (5) payments to purchase shares of our common stock authorized by our Board of Directors.Directors not less than once annually.


Our liquidity plans are subject to a number of risks and uncertainties, including those described in the "Forward-Looking Statements" section of this MD&A, Item 1A. Risk Factors in this Form 10-Q and the “Risk Factors” sectionItem 1A. Risk Factors of our 20162019 Form 10-K, some of which are outside of our control.


Cash flows occur amongst our Automotive, Cruise and GM Financial operations that are eliminated when we consolidate our cash flows. Such eliminations include, among other things, collections by Automotive on wholesale accounts receivables
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financed by dealers through GM Financial, payments between Automotive and GM Financial for accounts receivables transferred by Automotive to GM Financial, loans to Automotive from GM Financial, dividends issued by GM Financial to Automotive and Automotive cash injections in Cruise. The presentation of Automotive liquidity, Cruise liquidity and GM Financial liquidity presented below includes the impact of cash transactions amongst the sectors that are ultimately eliminated in consolidation.

Automotive Liquidity Total available liquidity includes cash, cash equivalents, marketable debt securities and funds available under credit facilities. The amount of available liquidity is subject to seasonal fluctuations and includes balances held by various business units and subsidiaries worldwide that are needed to fund their operations. In response to the COVID-19 pandemic, we have taken immediate actions to provide for additional liquidity including drawing $15.9 billion on our revolving credit facilities and implementing austerity measures. In May 2020, we issued $4.0 billion in aggregate principal amount of senior unsecured notes with a weighted average interest rate of 6.11% and maturity dates ranging from 2023 to 2027. The notes are governed by a sixth supplemental indenture and the same base indenture that governs our existing notes, which contains terms and covenants customary for these types of securities, including a limitation on the amount of certain secured debt we may incur. The net proceeds from the issuance of these senior unsecured notes provides additional financial flexibility and will be used for general corporate purposes. In May 2020, we also entered into a new unsecured 364-day, $2.0 billion revolving credit facility as an additional source of available liquidity. We have changed the management of our liquidity by borrowing on our credit facilities, changing our investment portfolio composition and taking significant austerity measures to provide better flexibility in response to COVID-19; however, we have not significantly changed our investment guidelines since December 31, 2019.

We use credit facilities as a mechanism to provide additional flexibility in managing our global liquidity. We increased our automotive borrowing capacity under credit facilities from $17.5 billion at December 31, 2019 to $18.5 billion at June 30, 2020. At June 30, 2020 our automotive borrowing capacity under credit facilities consisted of four revolving credit facilities. These facilities consist of a three-year, $4.0 billion facility, a five-year, $10.5 billion facility, a three-year, $2.0 billion transformation facility and a new 364-day, $2.0 billion revolving credit facility entered into in May 2020. The three-year, $4.0 billion facility allows for borrowings in U.S. Dollars and other currencies and includes a letter of credit sub-facility of $1.1 billion. The five-year, $10.5 billion facility allows for borrowings in U.S. Dollars and other currencies. The three-year, $2.0 billion transformation facility and the new unsecured 364-day facility allow for borrowings in U.S. Dollars only. Total borrowing capacity under our automotive credit facilities does not include a 364-day, $2.0 billion facility designated for exclusive use by GM Financial, which allows for borrowings in U.S. Dollars only.

In April 2020, we renewed our 364-day, $2.0 billion facility designated for exclusive use by GM Financial for an additional 364-day term and extended $3.6 billion of the three-year, $4.0 billion facility for an additional year expiring in April 2022. The remaining portion will expire in April 2021, unless extended. As part of the extension of the three-year, $4.0 billion facility, we have agreed not to execute any share repurchases until we no longer have outstanding borrowings under the revolving credit facilities, except for the three-year, $2.0 billion transformation facility. In addition, we are restricted from paying dividends on our common shares if outstanding borrowings under the revolving credit facilities exceed $5.0 billion, with the exception of the three-year, $2.0 billion transformation facility.

In the six months ended June 30, 2020, we borrowed $3.4 billion against our three-year, $4.0 billion facility, $2.0 billion against our three-year, $2.0 billion transformation facility and $10.5 billion against our five-year, $10.5 billion facility to preserve financial flexibility in response to the current uncertainty in global markets and the adverse economic environment resulting from the COVID-19 pandemic. We did not have any borrowings against our facilities at December 31, 2019. We had letters of credit outstanding under our sub-facility of $0.3 billion and $0.2 billion at June 30, 2020 and December 31, 2019. Refer to Note 11 to our condensed consolidated financial statements for additional information on the contractual maturities of our debt obligations.

If available capacity permits, GM Financial has access to our automotive credit facilities, except for the three-year, $2.0 billion transformation facility. In addition, GM Financial has exclusive use of the 364-day, $2.0 billion facility that expires in April 2021. GM Financial did not have borrowings outstanding against any facilities at June 30, 2020 and December 31, 2019. We had intercompany loans from GM Financial of $1.4 billion, which primarily consisted of $0.9 billion in funding for subvention owed in the three months ended June 30, 2020 and $0.4 billion of commercial loans to dealers we consolidate at June 30, 2020 and $0.5 billion which primarily consisted of commercial loans to dealers we consolidate at December 31, 2019. We did not have intercompany loans to GM Financial. Refer to Note 5 of our condensed consolidated financial statements for additional information.

In the three and six months ended June 30, 2020, GM Financial's Board of Directors declared and paid dividends of $0.4 billion and $0.8 billion on its common stock. Future dividends from GM Financial will depend on several factors including
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business and economic conditions, its financial condition, earnings, liquidity requirements and leverage ratio. In addition, we expect to continue to receive dividends from our Automotive China JVs on a normal cadence.

We continue to monitor and evaluate opportunities to strengthen our competitive position over the long term while maintaining a strong investment-grade balance sheet. These actions may include opportunistic payments to reduce our long-term obligations as well as the possibility of acquisitions, dispositions, investments with joint venture partners and strategic alliances that we believe would generate significant advantages and substantially strengthen our business. These actions may negatively impact

Several of our liquidityloan facilities, including our revolving credit facilities, require compliance with certain financial and operational covenants as well as regular reporting to lenders. We have reviewed our covenants in effect as of June 30, 2020 and determined we are in compliance and expect to remain in compliance in the short term.future.


Management's capital allocation framework includes reinvesting in our business at an average target ROIC-adjusted rate of 20% or greater, maintaining a strong investment-grade balance sheet, including a target cash balance of $18 billion, and returning available cash to shareholders. As a result of the sale of the Opel/Vauxhall Business cash of $2 billion became available to accelerate repurchases of our common stock, under our previously announced program, subject to market conditions.


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As part of our capital allocation frameworkIn January 2017 we announced in January 2016 that our Board of Directors had authorized a program to purchase up to $4 billion of our common stock before the end of 2017, which was completed at September 30, 2017. We also announced in January 2017 that our Board of Directors had authorized the purchase of up to an additional $5$5.0 billion of our common stock with no expiration date subsequent to completing the remaining portionas part of the previously announced program. From inception of the program in 2015 through October 17, 2017 we purchased an aggregate of 274 million shares of our outstanding common stock under our common stock repurchase program for $9.4 billion. In the nine months ended September 30, 2017 we returned total cash to shareholders of $4.7program. We have completed $1.7 billion consisting of dividends paid on our common stock and purchases of our common stock.

In August 2017 we issued $3.0 billion in aggregate principal amount of senior unsecured notes and used the net proceeds to repay the $3.0 billion drawn on our three-year unsecured revolving credit facility to fund the payments to PSA Group, or one or more pension funding vehicles, for the assumed net underfunded pension liabilities in connection with the sale of the Opel/Vauxhall Business. Refer$5.0 billion program through June 30, 2020. In April 2020 we agreed not to Note 9 to our condensed consolidated financial statements for additional information onexecute any share repurchases until we no longer have outstanding borrowings under the senior unsecured notes.

Automotive Liquidity Total available liquidity includes cash, cash equivalents, marketable securities and funds available under credit facilities. The amount of available liquidity is subject to intra-month and seasonal fluctuations and includes balances held by various business units and subsidiaries worldwide that are needed to fund their operations. There have been no significant changes in the management of our liquidity, including the allocation of our available liquidity, the composition of our portfolio and our investment guidelines since December 31, 2016. Refer to the “Liquidity and Capital Resources” section of MD&A in our 2016 Form 10-K.

We use credit facilities as a mechanism to provide additional flexibility in managing our global liquidity. The total size of our credit facilities was $14.5 billion at September 30, 2017 and December 31, 2016, which consisted principally of our two primary revolving credit facilities. We did not have any borrowings against our primary facilities, but had letters of credit outstanding under our sub-facility of $0.4 billion at September 30, 2017 and December 31, 2016. GM Financial had access to our revolving credit facilities, at September 30, 2017 and December 31, 2016 but did not borrow against them. At September 30, 2017 and December 31, 2016 we had intercompany loans from GM Financial of $0.4except for the three-year, $2.0 billion and $0.3 billion, which consisted primarily of commercial loans to dealers we consolidate, and we had no intercompany loans to GM Financial. transformation facility.

The following table summarizes our automotive available liquidity (dollars in billions):
 September 30, 2017 December 31, 2016
Cash and cash equivalents$8.8
 $9.8
Marketable securities8.5
 11.8
Available liquidity17.3
 21.6
Available under credit facilities(a)14.1
 14.2
Total automotive available liquidity$31.4
 $35.8
June 30, 2020December 31, 2019
Automotive cash and cash equivalents, net(a)$20.0  $13.4  
Marketable debt securities8.3  3.9  
Automotive cash, cash equivalents and marketable debt securities, net28.3  17.3  
Cruise cash and cash equivalents(b)1.2  2.3  
Cruise marketable debt securities(b)1.0  0.3  
Available liquidity30.5  19.9  
Available under credit facilities2.3  17.3  
Total available liquidity$32.8  

$37.2  
__________
(a)Includes the impact of outstanding letters of credit of $0.2 billion at December 31, 2016 under our primary credit facilities which were transferred to PSA Group at closing.

(a)Amount is net of $0.5 billion owed for unsettled marketable debt securities at June 30, 2020.
(b)Amounts are designated exclusively for the use of Cruise.

The following table summarizes the changes in our automotiveAutomotive available liquidity (dollars(excluding Cruise, dollars in billions):
 Nine Months Ended September 30, 2017
Operating cash flow$7.3
Capital expenditures(6.3)
Dividends paid and payments to purchase common stock(4.7)
Net cash used in investing activities – discontinued operations(a)(3.6)
Issuance of senior unsecured notes3.0
Other non-operating(0.1)
Total change in automotive available liquidity$(4.4)
__________
Six Months Ended June 30, 2020
Operating cash flow$(7.7)
Capital expenditures(2.3)
Dividends paid and payments to purchase common stock(0.6)
(a)Consists primarily
Issuance of payments to PSA Group, or one or more pension funding vehicles, of $3.4 billion for the assumed net underfunded pension liabilitiessenior unsecured notes4.0 
Borrowings against credit facilities15.9 
Other non-operating(a)1.7 
Decrease in connection with the sale of the Opel/Vauxhall Business, which includes pension funding payments for active employees and the de-risking premium payment of $478 million.available credit facilities(15.0)
Total change in automotive available liquidity$(4.0)


__________
(a)Amount includes $0.6 billion of proceeds from the sale of our remaining shares in Lyft and $0.9 billion in intercompany loans from GM Financial for subvention owed.

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Automotive Cash Flow (Dollars(dollars in Billions)billions)
Six Months EndedChange
June 30, 2020June 30, 2019
Operating Activities
Net income (loss)$(0.5) $4.2  $(4.7) 
Depreciation, amortization and impairment charges2.8  3.8  (1.0) 
Pension and OPEB activities(0.8) (0.9) 0.1  
Working capital(5.8) (4.6) (1.2) 
Accrued and other liabilities and income taxes(4.9) —  (4.9) 
Other1.5  (0.9) 2.4  
Net automotive cash provided by (used in) operating activities$(7.7) $1.6  $(9.3) 
 Nine Months Ended Change
 September 30, 2017 September 30, 2016 
Operating Activities
     
Income from continuing operations$4.6
 $6.9
 $(2.3)
Depreciation, amortization and impairment charges4.3
 3.8
 0.5
Pension and OPEB activities(1.8) (3.7) 1.9
Working capital(2.4) 0.4
 (2.8)
Equipment on operating leases(0.7) 0.8
 (1.5)
Accrued and other liabilities(0.8) —
 (0.8)
Income taxes2.9
 1.8
 1.1
Undistributed earnings of nonconsolidated affiliates, net0.5
 0.4
 0.1
Other0.7
 (0.6) 1.3
Net automotive cash provided by operating activities$7.3
 $9.8
 $(2.5)


In the ninesix months ended SeptemberJune 30, 20172020, the decrease in Net automotive cash provided by (used in) operating activities was primarily due primarily to: (1) a decrease in Workinglower pre-tax earnings of $5.1 billion, the unwind of sales incentives of $4.4 billion, and the unwind of working capital, due toall impacted unfavorably by COVID-19; (2) lower production volumes; (2) a decrease in Equipment on operating leases due to an increase in units out to daily rental car companies; and (3) a decrease in Accrued and other liabilities due to decreased sales incentives;dividends received from our nonconsolidated affiliates of $0.4 billion; partially offset by (3) dividends received from GM Financial of $0.8 billion; and (4) discretionary contributionsseveral other insignificant items.
Six Months EndedChange
June 30, 2020June 30, 2019
Investing Activities
Capital expenditures$(2.3) $(3.4) $1.1  
Acquisitions and liquidations of marketable securities, net(a)(3.3) (0.1) (3.2) 
GM investment in Cruise—  (0.7) 0.7  
Other—  0.1  (0.1) 
Net automotive cash used in investing activities$(5.6) $(4.1) $(1.5) 
__________
(a)Amount includes $0.6 billion of $2.0 billion made toproceeds from the sale of our U.S. hourly pension planremaining shares in Lyft in the ninesix months ended SeptemberJune 30, 2016; (5) an increase in Income taxes2020.

In the six months ended June 30, 2020, capital expenditures decreased due to the establishmentdelay of a valuation allowance relatednon-critical projects, including certain future product programs, in response to the saleCOVID-19 pandemic. Cash used in acquisitions and liquidations of the Opel/Vauxhall Business, partially offset by tax benefits related to tax settlements and a decrease in pre-tax earnings; and (6) an increase in Othermarketable securities, net increased due to several insignificant items.the increased purchases of marketable securities with proceeds from the issuance of debt in response to the COVID-19 pandemic.

Six Months EndedChange
June 30, 2020June 30, 2019
Financing Activities
Borrowings against credit facilities$15.9  $0.7  $15.2  
Net proceeds from short-term debt(a)1.6  0.8  0.8  
Issuance of senior unsecured notes4.0  —  4.0  
Dividends paid and payments to purchase common stock(0.6) (1.1) 0.5  
Other(0.3) (0.3) —  
Net automotive cash provided by financing activities$20.6  $0.1  $20.5  
__________
 Nine Months Ended Change
 September 30, 2017 September 30, 2016 
Investing Activities
     
Capital expenditures$(6.3) $(6.0) $(0.3)
Acquisitions and liquidations of marketable securities, net3.4
 0.1
 3.3
Investment in Lyft—
 (0.5) 0.5
Acquisition of Cruise—
 (0.3) 0.3
Other0.1
 0.1
 —
Net automotive cash used in investing activities$(2.8) $(6.6) $3.8
(a)Amount includes $0.9 billion intercompany loans from GM Financial for subvention owed in the six months ended June 30, 2020.


 Nine Months Ended Change
 September 30, 2017 September 30, 2016 
Financing Activities
     
Issuance of senior unsecured notes$3.0
 $2.0
 $1.0
Dividends paid and payments to purchase common stock(4.7) (3.3) (1.4)
Other(0.3) (0.2) (0.1)
Net automotive cash used in financing activities$(2.0)
$(1.5) $(0.5)

Adjusted Automotive Free Cash Flow (DollarsWe measure adjusted automotive free cash flow as automotive operating cash flow from operations less capital expenditures adjusted for management actions. For the six months ended June 30, 2020, net automotive cash used in Billions)operating activities under U.S. GAAP was $7.7 billion, capital expenditures were $2.3 billion, and adjustments for management actions were insignificant.


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For the six months ended June 30, 2019, net automotive cash provided by operating activities under U.S. GAAP was $1.6 billion, capital expenditures were $3.4 billion, and an adjustment for management actions related to transformation activities primarily in GMNA was $0.5 billion.

 Nine Months Ended
 September 30, 2017 September 30, 2016
Net automotive cash provided by operating activities – continuing operations$7.3

$9.8
Less: capital expenditures(6.3)
(6.0)
Adjustment – discretionary pension plan contributions—

2.0
Adjusted automotive free cash flow – continuing operations(a)1.0

5.7
Net automotive cash provided by operating activities – discontinued operations—
 0.3
Less: capital expenditures – discontinued operations(0.7) (0.8)
Adjusted automotive free cash flow$0.3
 $5.2
__________
(a)Amounts may not add due to rounding.

Status of Credit Ratings We receive ratings from four independent credit rating agencies: DBRS Limited (DBRS), Fitch Ratings (Fitch), Moody's Investor Service (Moody's) and Standard & Poor's (S&P). In January 2017 Moody's upgraded our revolvingAll four credit facilities rating to Baa2 from Baa3, and revised their outlook to Stable from Positive. Our senior unsecured bonds were upgraded to Baa3 from Ba1 and remain notched below our revolving credit facilities rating. Also in January 2017, S&P upgradedagencies currently rate our corporate rating, revolving credit facilities rating and senior unsecured rating to BBB from BBB– and revised their outlook to Stable from Positive. In June 2017 Fitch upgradedat investment grade. The following table summarizes our corporate rating, revolving credit facilities rating and senior unsecured rating to BBB from BBB– and revised their outlook to Stable from Positive.
ratings at July 15, 2020:
CorporateRevolving Credit FacilitiesSenior UnsecuredOutlook
DBRSBBBBBBN/ANegative
FitchBBB-BBB-BBB-Stable
Moody'sInvestment GradeBaa2Baa3Negative
S&PBBBBBBBBBCredit watch with negative implications

Rating actions taken by each of the credit rating agencies from January 1, 2020 through July 15, 2020 were as follows: (1) S&P revised their outlook to Credit watch with negative implications from Stable in March 2020; (2) Moody’s revised their outlook to Under review for downgrade from Stable in March 2020; confirmed our ratings and revised their outlook to Negative from Under review for downgrade in May 2020; (3) DBRS revised their outlook to Under review with negative implications from Stable in March 2020; downgraded our ratings to BBB from BBB (high) and revised their outlook to Negative from Under review with negative implications in June 2020; and (4) Fitch downgraded our ratings to BBB- from BBB in May 2020.

Cruise Liquidity The changes in our Cruise available liquidity in the six months ended June 30, 2020 were primarily driven by operating cash flow. When Cruise's autonomous vehicles are ready for commercial deployment, The Vision Fund is obligated to purchase additional Cruise convertible preferred shares for $1.35 billion.

Cruise Cash Flow (dollars in billions)
Six Months EndedChange
June 30, 2020June 30, 2019
Net cash used in operating activities$(0.4) $(0.4) $—  
Net cash used in investing activities$(0.7) $(0.9) $0.2  
Net cash provided by financing activities$—  $1.1  $(1.1) 

Automotive Financing – GM Financial Liquidity GM Financial's primary sources of cash are finance charge income, leasing income and proceeds from the sale of terminated leased vehicles, servicing fees, net distributions from secured debtcredit facilities, including securitizations, secured and unsecured borrowings and collections and recoveries on finance receivables. GM Financial's primary uses of cash are purchases of retail finance receivables and leased vehicles, the funding of commercial finance receivables, repayment of secured and unsecured debt, funding credit enhancement requirements in connection with securitizations and secured debtcredit facilities, interest costs, and operating expenses and interest costs.expenses. GM Financial continues to monitor and evaluate opportunities to optimize its liquidity position and the mix of its debt between secured and unsecured debt. In September 2017 GM Financial issued $1.0 billion of Fixed-to-Floating Rate Cumulative Perpetual Preferred Stock, Series A, $0.01 par value, with a liquidation preference of $1,000 per share. The following table summarizes GM Financial's available liquidity (dollars in billions):
June 30, 2020December 31, 2019
Cash and cash equivalents$6.5  $3.3  
Borrowing capacity on unpledged eligible assets15.2  17.5  
Borrowing capacity on committed unsecured lines of credit0.4  0.3  
Borrowing capacity on revolving credit facility, exclusive to GM Financial2.0  2.0  
Total GM Financial available liquidity(a)$24.0  $23.1  
 September 30, 2017 December 31, 2016
Cash and cash equivalents$4.0
 $2.8
Borrowing capacity on unpledged eligible assets12.7
 8.3
Borrowing capacity on committed unsecured lines of credit0.1
 0.1
Total GM Financial available liquidity$16.8
 $11.2
__________

(a)Amounts may not sum due to rounding.
In the nine months ended September
At June 30, 20172020, GM Financial's available liquidity increased from December 31, 2019 due primarily to an increase in cash and additional capacity on newcash equivalents and renewed secured credit facilities.

a decrease in borrowing capacity. GM Financial increased utilization of credit facilities in the three months ended March 31, 2020 to preserve financial flexibility in response to uncertainty in global capital markets and weak economic environment resulting from the COVID-19 pandemic. The composition of liquidity has shifted back towards borrowing capacity during the ability to borrow up to $1.0 billion against our three-year, $4.0 billion revolving credit facilitythree months ended June 30, 2020, and up to $3.0 billion against our five-year, $10.5 billion revolving credit facility.
GM Financial Cash Flow (Dollars in Billions)expects the composition of liquidity to revert to
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 Nine Months Ended Change
 September 30, 2017 September 30, 2016 
Net cash provided by operating activities$4.8
 $3.6
 $1.2
Net cash used in investing activities$(17.6) $(17.3) $(0.3)
Net cash provided by financing activities$14.6
 $13.1
 $1.5


In the nine months ended September 30, 2017 Net cash provided by operating activities increased due primarily to an increase in net leased vehicle income, partially offset by increased interest expense and operating expenses.


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historical levels of cash and cash equivalents and borrowing capacity over time. GM Financial structures liquidity to support at least six months of GM Financial's expected net cash flows, including new originations, without access to new debt financing transactions or other capital markets activity.

GM Financial did not have any borrowings outstanding against our credit facility designated for their exclusive use or the remainder of our revolving credit facilities at June 30, 2020 and December 31, 2019. Refer to the Automotive Liquidity section of this MD&A for additional details.

Credit Facilities In the normal course of business, in addition to using its available cash, GM Financial utilizes borrowings under its credit facilities, which may be secured or unsecured, and GM Financial repays these borrowings as appropriate under its cash management strategy. At June 30, 2020 secured, committed unsecured and uncommitted unsecured credit facilities totaled $25.5 billion, $0.4 billion and $1.8 billion with advances outstanding of $7.6 billion, $0.1 billion and $1.8 billion.

GM Financial Cash Flow (dollars in billions)
Six Months EndedChange
June 30, 2020June 30, 2019
Net cash provided by operating activities$4.1  $4.3  $(0.2) 
Net cash used in investing activities$(3.2) $(4.3) $1.1  
Net cash provided by (used in) financing activities$3.0  $(0.8) $3.8  

In the ninesix months ended SeptemberJune 30, 20172020, Net cash provided by operating activities decreased primarily due to a decrease in revenue and collateral posting activities, partially offset by a decrease in interest paid.

In the six months ended June 30, 2020, Net cash used in investing activities increaseddecreased primarily due primarily to: (1) a decrease in purchases of leased vehicles of $2.1 billion; and (2) increased collections, and recoveries on finance receivables of $1.2 billion; partially offset by (3) increased purchases and funding of finance receivables of $5.4$1.3 billion, inclusive of a net change in funding to Automotive for subvention of $0.9 billion; partially offset by (2) increasedand (4) a decrease in proceeds from the termination of leased vehicles of $2.9 billion; and (3) increased collections on finance receivables of $2.0$0.9 billion.


In the ninesix months ended SeptemberJune 30, 20172020, Net cash provided by financing activities increased primarily due primarily to the issuance of preferred stock of $1.0 billion and a netan increase in borrowings of $0.6$13.4 billion partially offset by an increase in debt repayments of $8.8 billion and dividend payments of $0.8 billion.


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Contractual Obligations and Other Long-Term Liabilities We have minimum commitments under contractual obligations, including purchase obligations. A purchase obligation is defined as an agreement to purchase goods or services that is enforceable and legally binding on us and that specifies all significant terms, including fixed or minimum quantities to be purchased or fixed minimum price provisions and the approximate timing of the transaction. Based on these definitions, the following table includes only those contracts that include fixed or minimum obligations. The majority of our purchases are not included in the table as they are made under purchase orders that are requirements-based and accordingly do not specify minimum quantities. The following table summarizes aggregated information about our outstanding contractual obligations and other long-term liabilities at June 30, 2020:
Payments Due by Period
July 1, 2020 to December 31, 202020212022-20232024-20252026 and afterTotal
Automotive debt$1,424  $1,825  $18,096  $2,579  $11,107  $35,031  
Automotive Financing debt21,693  27,507  24,207  12,435  5,941  91,783  
Finance lease obligations65  82  68  27  97  339  
Automotive interest payments(a)590  1,212  2,032  1,525  8,581  13,940  
Automotive Financing interest payments(b)2,082  1,848  2,081  866  348  7,225  
Postretirement benefits(c)182  233  462  —  —  877  
Operating lease obligations125  240  383  265  389  1,402  
Other contractual commitments:
Material969  465  135  72  21  1,662  
Marketing312  253  94  8  —  667  
Other (d)578  783  1,475  198  184  3,218  
Total contractual commitments(e)$28,020  $34,448  $49,033  $17,975  $26,668  $156,144  
Non-contractual benefits(f)$153  $272  $489  $915  $9,382  $11,211  
__________
(a)Amounts include automotive interest payments based on contractual terms and current interest rates on our debt and finance lease obligations. Automotive interest payments based on variable interest rates were determined using the interest rate in effect at June 30, 2020.
(b)GM Financial interest payments were determined using the interest rate in effect at June 30, 2020 for floating rate debt and the contractual rates for fixed rate debt. GM Financial interest payments on floating rate tranches of the securitization notes payable were converted to a fixed rate based on the floating rate plus any expected hedge payments.
(c)Amounts include OPEB payments under the contract term of the current labor agreements in North America and do not include pension funding obligations.
(d)Amounts include $0.9 billion related to committed capital contributions to a non-consolidated VIE.
(e)Amounts do not include future cash payments for purchase obligations and certain other accrued expenditures (unless listed in the table above) that were recorded in Accounts payable, Accrued liabilities and Other liabilities in our condensed consolidated financial statements at June 30, 2020.
(f)Amounts include all expected future payments for both current and expected future service at June 30, 2020 for OPEB obligations for salaried and hourly employees extending beyond the current North American union contract agreements, workers' compensation and extended disability benefits. Amounts do not include pension funding obligations.

The table above does not reflect product warranty and related liabilities, certified pre-owned, extended warranty and free maintenance of $7.8 billion and unrecognized tax benefits of $0.7 billion due to the uncertainty regarding the future cash outflows potentially associated with these amounts. In addition, future cash outflows related to previously announced restructuring actions are not included in the table above. Refer to Note 17 of our condensed consolidated financial statements for additional information.

Critical Accounting Estimates The condensed consolidated financial statements are prepared in conformity with U.S. GAAP, which requires the use of estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses in the periods presented. We believe the accounting estimates employed are appropriate and the resulting balances are reasonable; however, due to the inherent uncertainties in developing estimates, actual results could differ from the original estimates, requiring adjustments to these balances in future periods. The critical accounting estimates that affect the condensed consolidated financial statements and the judgments and assumptions used are consistent with those described in the MD&A section in our 20162019 Form 10-K.10-K, as supplemented by the subsequent discussions of the allowance for loan losses on GM Financial receivables and the residual value of GM Financial leased vehicles.

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GM Financial Allowance for Loan Losses Refer to Note 2 to our condensed consolidated financial statements for additional information regarding our allowance for loan losses on retail and commercial finance receivables. The GM Financial retail finance receivables portfolio consists of smaller-balance, homogeneous loans that are carried at amortized cost, net of allowance for loan losses. The allowance for loan losses on retail finance receivables reflects net credit losses expected to be incurred over the remaining life of the retail finance receivables. We believe that the allowance is adequate to cover expected credit losses on the retail finance receivables; however, because the allowance for loan losses is based on estimates, there can be no assurance that the ultimate charge-off amount will not exceed such estimates or that our credit loss assumptions will not increase.
During the six months ended June 30, 2020, GM Financial updated the forecast of economic factors for potential impacts from the COVID-19 pandemic. In addition, GM Financial lowered the forecast of expected recovery rates on repossessions. In aggregate, these updates resulted in an increase in the allowance for loan losses on the GM Financial retail finance receivables portfolio of $0.1 billion and $0.3 billion for the three and six months ended June 30, 2020. Actual economic data and recovery rates that are lower than those we forecast would result in an increase to the allowance for loan losses.
The GM Financial commercial finance receivables portfolio consists of 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. The allowance for loan losses on commercial finance receivables is also based on estimates that, effective January 1, 2020, include historical loss experience for the consolidated portfolio, as well as the forecast for industry vehicle sales. There can be no assurance that the ultimate charge-off amount will not exceed such estimates or that our credit loss assumptions will not increase.

Residual Value of GM Financial Leased Vehicles At June 30, 2020, the estimated residual value of GM Financial’s leased vehicles at the end of the lease term was $28.7 billion. Depreciation reduces the carrying value of each leased asset in GM Financial’s operating lease portfolio over time from its original acquisition value to its expected residual value at the end of the lease term. GM Financial reviewed the lease portfolio for indicators of impairment and determined that no impairment indicators were present at June 30, 2020. GM Financial updated residual value estimates on the lease portfolio to reflect the decrease in forecasted used vehicle prices due to economic impacts from the COVID-19 pandemic and will record increased depreciation expense over the remaining term of the portfolio. If used vehicle prices decrease further, GM Financial would further increase depreciation expense and/or record an impairment charge on the lease portfolio. If an impairment exists, GM Financial would determine any shortfall in recoverability of the leased vehicle asset groups by year, make and model. Recoverability is calculated as the excess of: (1) the sum of remaining lease payments plus estimated residual value; over (2) leased vehicles, net less deferred revenue. Alternatively, if used vehicle prices outperform our estimates, GM Financial would record increased gains on sales of off-leased vehicles and/or decreased depreciation expense.

Forward-Looking Statements In thisThis report and inthe other reports we subsequently file and have previously filed by us with the SEC on Forms 10-Kfrom time to time, as well as statements incorporated by reference herein and 10-Q and file or furnish on Form 8-K, and in related comments by our management, we usemay include "forward-looking statements" within the meaning of the U.S. federal securities laws. Forward-looking statements are any statements other than statements of historical fact. Forward-looking statements represent our current judgment about possible future events and are often identified by words like "aim," “anticipate,” “appears,” “approximately,” “believe,” “continue,” “could,” “designed,” “effect,” “estimate,” “evaluate,” “expect,” “forecast,” “goal,” “initiative,” “intend,” “may,” “objective,” “outlook,” “plan,” “potential,” “priorities,” “project,” “pursue,” “seek,” “should,” “target,” “when,” “will,” “would,” or the negative of any of those words or similar expressions to identify forward-looking statements that represent our current judgment about possible future events.expressions. In making these statements, we rely on assumptions and analysesanalysis based on our experience and perception of historical trends, current conditions and expected future developments as well as other factors we consider appropriate under the circumstances. We believe these judgments are reasonable, but these statements are not guarantees of any events or financial results, and our actual results may differ materially due to a variety of important factors, both positive and negative. These factors, which may be revised or supplemented in subsequent reports onwe file with the SEC, Forms 10-Q and 8-K, include, among others, the following: (1) our ability to deliver new products, services and customer experiences in response to new participantsincreased competition in the automotive industry and to effectively compete in autonomous, ride–sharing and transportation as a service;industry; (2) our ability to timely fund and introduce new and improved vehicle models that are able to attract a sufficient number of consumers; (3) the success of our crossovers, SUVs and full-size pick-up truckspickup trucks; (4) our ability to successfully and SUVs, which may be affected by increasescost-effectively restructure our operations in the priceU.S. and various other countries and initiate additional cost reduction actions with minimal disruption; (5) our ability to reduce the cost of oil; (4)manufacturing electric vehicles and drive increased consumer adoption; (6) the unique technological, operational, regulatory and competitive risks related to the timing and commercialization of autonomous vehicles; (7) global automobile market sales volume, which can be volatile; (5) aggressive competition(8) our significant business in China; (6) the international scaleChina, which is subject to unique operational, competitive, regulatory and footprint of our operations which exposes us to a variety of domestic and foreign political, economic and regulatory risks, including the risk of changes in existing, the adoption of new, or the introduction of novel interpretations of, laws, regulations, policies or other activities of governments, agencies and similar organizations particularly laws, regulations and policies relating to free trade agreements, vehicle safety including recalls, and, including such actions that may affect the production, licensing, distribution or sale of our products, the cost thereof or applicable tax rates; (7)risks; (9) our joint ventures, which we cannot operate solely for our benefit and over which we may have limited control; (8)(10) the international scale and footprint of our abilityoperations, which exposes us to comply with extensive lawsa variety of unique political, economic, competitive and regulations applicable to our industry, including those regarding fuel economy and emissions; (9) costs andregulatory risks, associated with litigation and government investigations including the potential impositionrisk of damages, substantial fines, civil lawsuitschanges in government leadership and criminal penalties, interruptions of business, modification of business practices, equitable remedieslaws (including labor, tax and other laws), political instability and economic tensions between governments and changes in international trade policies, new barriers to entry and
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changes to or withdrawals from free trade agreements, public health crises, including the occurrence of a contagious disease or illness, such as the COVID-19 pandemic, changes in foreign exchange rates and interest rates, economic downturns in foreign countries, differing local product preferences and product requirements, compliance with U.S. and foreign countries' export controls and economic sanctions, against usdiffering labor regulations, requirements and union relationships, differing dealer and franchise regulations and relationships, and difficulties in connection with various legal proceedings and investigations relating toobtaining financing in foreign countries; (11) any significant disruption, including any work stoppages, at any of our various recalls; (10) our ability to comply with the terms of the DPA; (11) our ability to maintain quality control over our vehicles and avoid material vehicle recalls and the cost and effect on our reputation and products;manufacturing facilities; (12) the ability of our suppliers to deliver parts, systems and components without disruption and at such times to allow us to meet production schedules; (13) prices of raw materials used by us and our dependence on our manufacturing facilities around the world;suppliers; (14) our highly competitive industry, which is characterized by excess manufacturing capacity and the use of incentives and the introduction of new and improved vehicle models by our competitors; (15) the possibility that competitors may independently develop products and services similar to ours or that our abilityintellectual property rights are not sufficient to realize production efficiencies and to achieve reductions in costs as we implement operating effectiveness initiatives throughout our automotive operations;prevent competitors from developing or selling those products or services; (16) our ability to successfully restructure our operations in various countries; (17) our ability to manage risks related to security breaches and other disruptions to our vehicles, information technology networkssystems and networked products, including connected vehicles and in-vehicle systems; (17) our ability to comply with increasingly complex, restrictive and punitive regulations relating to our enterprise data practices, including the collection, use, sharing and security of the Personal Identifiable Information of our customers, employees, or suppliers; (18) our ability to comply with extensive laws, regulations and policies applicable to our operations and products, including those relating to fuel economy and emissions and autonomous vehicles; (19) costs and risks associated with litigation and government investigations; (20) the costs and effect on our reputation of product safety recalls and alleged defects in products and services; (21) any additional tax expense or exposure; (22) our continued ability to develop captive financing capability through GM Financial; (19)(23) any significant increasesincrease in our pension expense or projected pension contributions resulting from changes infunding requirements; and (24) the value of plan assets, the discount rate applied to value the pension liabilities or mortality or other assumption changes; (20) significant changes in economic, political, regulatory environment, market conditions, foreign currency exchange rates or political stability in the countries in which we operate, particularly China, with the effect of competition from new market entrants; and (21) risks and uncertainties associated with the consummation of the sale of GM Financial's European subsidiaries and branches to PSA Group, including satisfaction of the closing conditions.ongoing COVID-19 pandemic. A further list and description of these risks, uncertainties and other factors can be found in our 20162019 Form 10-K and our subsequent filings with the SEC.


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We caution readers not to place undue reliance on forward-looking statements. WeForward-looking statements speak only as of the date they are made, and we undertake no obligation to update publicly or otherwise revise any forward-looking statements, whether as a result of new information, future events or other factors, that affect the subject of these statements, except where we are expressly required to do so by law.


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Item 3. Quantitative and Qualitative Disclosures About Market Risk


There have been no significant changes in our exposure to market risk since December 31, 2016. Refer2019. For further discussion on market risk, refer to Item 7A of our 20162019 Form 10-K.


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Item 4. Controls and Procedures


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


Our management, with the participation of our CEO and CFO, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) promulgated under the Exchange Act) at SeptemberJune 30, 2017. Based on this evaluation2020 as required by paragraph (b) of Rules 13a-15 or 15d-15,15d-15. Based on this evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of Septemberat June 30, 2017.2020.


Changes in Internal Control over Financial Reporting There have not been any changes in our internal control over financial reporting during the three months ended SeptemberJune 30, 20172020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. However, due to the COVID-19 global pandemic, we are monitoring our control environment with increased vigilance to ensure changes as a result of physical distancing are addressed and all increased risks are mitigated. For additional information refer to Item 1A. Risk Factors.


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PART II

Item 1. Legal Proceedings


Refer to theThe discussion in theunder "Litigation-Related Liability and Tax Administrative Matters" section in Note 1315 to our condensed consolidated financial statements and the 2016 Form 10-K for information relating to legal proceedings.is incorporated by reference into this Part II – Item 1.


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Item 1A. Risk Factors


We face a number of significant risks and uncertainties in connection withThe COVID-19 pandemic may continue to disrupt our operations. Our business and operations, which could materially adversely impact our business, financial condition, liquidity and results of operations. Pandemics, epidemics or disease outbreaks in the U.S. or globally may continue to disrupt our business, which could materially affect our results of operations, financial condition, liquidity and future expectations. In January 2020, the World Health Organization declared the COVID-19 outbreak a public health emergency and in March 2020 declared it a global pandemic. The outbreak has since spread globally and has caused significant disruption to the global economy, including the automotive industry. We responded by implementing work-from-home protocols for employees who can work remotely and systematically suspending the majority of our global manufacturing operations. By April 2020, we fully resumed our Automotive China JVs’ manufacturing operations. Beginning in May 2020, we resumed our critical manufacturing operations in North America, and we continue to take actions to increase production and replenish dealer inventories. Our manufacturing operations resumed production under enhanced public health procedures, including temperature screening of employees before entry into facilities, shift adjustments to allow for physical distancing, deep cleaning of facilities after each shift, and the provision of personal protective equipment.

The COVID-19 pandemic has had a material impact on our business as discussed in detail in Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. However, the full extent to which the COVID-19 pandemic will impact our operations will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration and severity of the outbreak or subsequent outbreaks, which may cause us to again suspend our global manufacturing operations. In particular, if COVID-19 continues to spread or re-emerges, particularly in North America where our profits are most concentrated, resulting in a prolonged period of travel, commercial, social and other similar restrictions, we could experience among other things: (1) global supply disruptions; (2) labor disruptions; (3) an inability to manufacture; (4) an inability to sell to our customers; (5) a decline in showroom traffic and customer demand during and following the pandemic; (6) customer defaults on automobile loans and leases; (7) lower than expected pricing on vehicles sold at auction; and (8) an impaired ability to access credit and the capital markets. We may also be subject to enhanced legal risks, including potential litigation related to the COVID-19 pandemic.Further, we expect the COVID-19 pandemic, and the related adverse economic impact, will result in a significant contraction of total industry volumes in 2020. We also have substantial cash requirements going forward, including: (1) ongoing cash costs including payments associated with previously announced vehicle recalls, the settlements of the multi-district litigation and any other recall-related contingencies, payments to service debt and other long-term obligations, including repayment of amounts drawn on our revolving credit facilities and mandatory contributions to our pension plans; and (2) capital expenditures and payments for engineering and product development activities. We cannot predict with confidence whether our current liquidity will be sufficient to fund our ongoing needs because the duration of the COVID-19 pandemic and the extent to which it will impact our operations is highly uncertain and will depend on future developments. Any resulting financial impact cannot be reasonably estimated at this time, but the COVID-19 pandemic could continue to have a material impact on our business, financial condition and results of operations. For a further discussion of the impact of COVID-19 on our liquidity, refer to the “Liquidity and Capital Resources” section in Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

As the COVID-19 pandemic continues to adversely affect our operating and financial results, it may also heighten many of the other risks described in Item 1A. Risk Factors in our 2019 Form 10-K. In particular, see the risk factors regarding global automobile sales volumes, scale and footprint of our operations, and financial condition could be materially adversely affected by these risk factors. There have been no material changes to the Risk Factors discloseddisruptions at our manufacturing facilities, disruptions in our 2016 Form 10-K.suppliers’ operations, and reliance on GM Financial.


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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds


Purchases of Equity Securities The following table summarizes our purchases of common stock in the three months ended SeptemberJune 30, 2017:2020:
 Total Number of Shares Purchased(a) Average Price Paid per Share 
Total Number of Shares
Purchased Under Announced Programs(b)
 
Approximate Dollar Value of Shares That
May Yet be Purchased Under Announced Programs
July 1, 2017 through July 31, 201719,039,928
 $35.79
 19,005,753
 $5.8 billion
August 1, 2017 through August 31, 201715,242,410
 $35.30
 14,933,968
 $5.3 billion
September 1, 2017 through September 30, 20177,543,150
 $38.36
 7,535,445
 $5.0 billion
Total41,825,488
 $36.07
 41,475,166
  
Total Number of Shares Purchased(a)(b)Weighted Average Price Paid per ShareTotal Number of Shares
Purchased Under Announced Programs(b)		Approximate Dollar Value of Shares That
May Yet be Purchased Under Announced Programs
April 1, 2020 through April 30, 202051,252  $22.25  —  $3.3 billion
May 1, 2020 through May 31, 2020—  $—  —  $3.3 billion
June 1, 2020 through June 30, 2020—  $—  —  $3.3 billion
Total51,252  $22.25  —  
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(a)Shares purchased consist of shares retained by us for the payment of the exercise price upon the exercise of warrants and shares delivered by employees or directors to us for the payment of taxes resulting from issuance of common stock upon the vesting of Restricted Stock Units (RSUs) and Restricted Stock Awards relating to compensation plans. Refer to our 2016 Form 10-K for additional details on warrants outstanding and employee stock incentive plans. In June 2017 our shareholders approved the 2017 Long Term Incentive Plan which authorizes awards of stock options, stock appreciation rights, restricted stock, RSUs, performance awards or other stock-based awards to selected employees, consultants, advisors, and non-employee Directors of the Company.
(b)In January 2017 we announced that our Board of Directors had authorized the purchase of up to an additional $5 billion of our common stock with no expiration date.

(a)Shares purchased consist of shares delivered by employees or directors to us for the payment of taxes resulting from the issuance of common stock upon the vesting of RSUs, PSUs and Restricted Stock Awards relating to compensation plans. Refer to our 2019 Form 10-K for additional details on employee stock incentive plans.
(b)In January 2017, we announced that our Board of Directors had authorized the purchase of up to $5.0 billion of our common stock with no expiration date. In April 2020 we agreed not to execute any share repurchases until we no longer have outstanding borrowings under the revolving credit facilities, except for the three-year, $2.0 billion transformation facility.

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Item 6. Exhibits
Exhibit NumberExhibit Name
1.13.1
Underwriting Agreement, dated August 2, 2017, by and among General Motors Company, as issuer, and Deutsche Bank Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and Morgan Stanley & Co. LLC, as representativesRestated Certificate of the several underwriters named therein, (incorporated herein by reference to Exhibit 1.1 to the Current Report on Form 8-KIncorporation of General Motors Company filed August 8, 2017)
Incorporated by Reference
3.1
Certificate of Elimination of Series A Fixed Rate Cumulative Perpetual Preferred Stock (incorporated herein by reference to Exhibit 3.1 to the Current Report on Form 8-K of General Motors Company filed September 1, 2017)
Incorporated by Reference
3.2
Certificate of Elimination of 4.75% Series B Mandatory Convertible Junior Preferred Stock (incorporated herein by reference to Exhibit 3.2 to the Current Report on Form 8-K of General Motors Company filed September 1, 2017)
Incorporated by Reference
3.3
Restated Certificate of Incorporation, (incorporateddated December 7, 2010, incorporated herein by reference to Exhibit 3.2 to the Current Report on Form 8-K of General Motors Company filed December 13, 2010)2010
Incorporated by Reference
4.13.2
FourthGeneral Motors Company Amended and Restated Bylaws, as amended August 14, 2018, incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K of General Motors Company filed on August 20, 2018
Incorporated by Reference
4.1
Sixth Supplemental Indenture, dated as of August 7, 2017,May 12, 2020, to the Indenture, dated as of September 27, 2013, between General Motors Company, as issuer, and The Bank of New York Mellon, as Trustee, (incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K of General Motors Company filed August 8, 2017)
Incorporated by Reference
4.2
Calculation Agency Agreement, dated as of August 7, 2017 between General Motors Company and the Bank of New York Mellon, as calculation agent (incorporated hereinincorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K of General Motors Company filed August 8, 2017)May 12, 2020
Incorporated by Reference
10.1
Amendment Number 2, dated July 30, 2017,Second Amended and Restated 364-Day Revolving Credit Agreement among General Motors Company, General Motors Financial Company, Inc., the subsidiary borrowers from time to time parties thereto, the several lenders from time to time parties thereto, JPMorgan Chase Bank, N.A., as administrative agent, and Citibank, N.A., as syndication agent, incorporated by reference to Exhibit 10.1 to the Master Agreement betweenCurrent Report on Form 8-K of General Motors Holdings, LLC and Peugeot S.A.Company filed April 17, 2020
Filed HerewithIncorporated by Reference
31.110.2
Amendment No. 1, dated April 24, 2020, to Third Amended and Restated 3-Year Revolving Credit Agreement, dated April 18, 2018, among General Motors Company, General Motors Financial Company, Inc., General Motors do Brasil Ltda., the subsidiary borrowers from time to time parties thereto, the several lenders from time to time parties thereto, JPMorgan Chase Bank, N.A., as administrative agent, and Citibank, N.A., as syndication agent, incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of General Motors Company filed April 27, 2020
Incorporated by Reference
10.3
364-Day Revolving Credit Agreement, dated May 13, 2020, by and among General Motors Company, the subsidiary borrowers from time to time parties thereto, the several lenders from time to time parties thereto, JPMorgan Chase Bank, N.A., as administrative agent, and Citibank, N.A., as syndication agent, incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K of General Motors Company filed May 13, 2020
Incorporated by Reference
10.4*
General Motors Company 2020 Long-Term Incentive Plan, incorporated by reference to Exhibit 4.1 to the Registration Statement on Form S-8 of General Motors Company filed June 25, 2020
Incorporated by Reference
10.5*
Form of Restricted Stock Unit Award Agreement under the General Motors Company 2017 Long-Term Incentive Plan
Filed Herewith
31.1
Section 302 Certification of the Chief Executive Officer
Filed Herewith
31.2
Section 302 Certification of the Chief Financial Officer
Filed Herewith
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Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Furnished with this Report
101.INS101XBRL Instance DocumentThe following financial information from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, formatted in Inline Extensible Business Reporting Language (iXBRL) includes: (i) the Condensed Consolidated Income Statements, (ii) the Condensed Consolidated Statements of Comprehensive Income, (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Cash Flows, (v) the Condensed Consolidated Statements of Equity and (vi) Notes to the Condensed Consolidated Financial StatementsFiled Herewith
101.SCH104The cover page from the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, formatted as Inline XBRL Taxonomy Extension Schema Documentand contained in Exhibit 101Filed Herewith
101.CALXBRL Taxonomy Extension Calculation Linkbase DocumentFiled Herewith
101.DEFXBRL Taxonomy Extension Definition Linkbase DocumentFiled Herewith
101.LABXBRL Taxonomy Extension Label Linkbase DocumentFiled Herewith
101.PREXBRL Taxonomy Extension Presentation Linkbase DocumentFiled Herewith

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*Management contracts or compensatory plans and arrangements.


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SIGNATURE


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



GENERAL MOTORS COMPANY (Registrant)




By:/s/ THOMAS S. TIMKOCHRISTOPHER T. HATTO
Thomas S. Timko,Christopher T. Hatto, Vice President, Global Business ServicesSolutions and Chief Accounting Officer
Date:October 24, 2017July 29, 2020

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