Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2020 | Jul. 28, 2020 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 1-10667 | |
Entity Registrant Name | General Motors Financial Company, Inc. | |
Entity Incorporation, State or Country Code | TX | |
Entity Tax Identification Number | 75-2291093 | |
Entity Address, Address Line One | 801 Cherry Street | |
Entity Address, Address Line Two | Suite 3500 | |
Entity Address, City or Town | Fort Worth | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 76102 | |
City Area Code | 817 | |
Local Phone Number | 302-7000 | |
Title of 12(b) Security | 5.250% Senior Notes due 2026 | |
Trading Symbol | GM/26 | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 5,050,000 | |
Entity Central Index Key | 0000804269 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Assets | ||
Cash and cash equivalents | $ 6,512 | $ 3,311 |
Finance receivables, net (Note 3; Note 8 VIEs) | 52,262 | 53,473 |
Goodwill (Note 5) | 1,167 | 1,185 |
Equity in net assets of non-consolidated affiliates (Note 6) | 1,484 | 1,455 |
Related party receivables (Note 2) | 1,570 | 678 |
Other assets (Note 8 VIEs) | 8,729 | 7,060 |
Total assets | 111,325 | 109,217 |
Liabilities | ||
Secured debt (Note 7; Note 8 VIEs) | 40,308 | 39,959 |
Unsecured debt (Note 7) | 51,944 | 48,979 |
Deferred income | 3,185 | 3,648 |
Related party payables (Note 2) | 65 | 82 |
Other liabilities | 4,770 | 3,823 |
Total liabilities | 100,272 | 96,491 |
Commitments and contingencies (Note 10) | ||
Shareholders' equity (Note 11) | ||
Common stock, $0.0001 par value per share | 0 | 0 |
Preferred stock, $0.01 par value per share | 0 | 0 |
Additional paid-in capital | 8,120 | 8,101 |
Accumulated other comprehensive loss | (1,663) | (1,119) |
Retained earnings | 4,596 | 5,744 |
Total shareholders' equity | 11,053 | 12,726 |
Total liabilities and shareholders' equity | 111,325 | 109,217 |
Assets Leased to Others [Member] | ||
Assets | ||
Leased vehicles, net (Note 4; Note 8 VIEs) | $ 39,601 | $ 42,055 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Common stock par value per share (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock par value (in dollars per share) | $ 0.01 | $ 0.01 |
Condensed Consolidated Statemen
Condensed Consolidated Statements Of Income - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenue | ||||
Finance charge income | $ 966 | $ 1,008 | $ 1,972 | $ 1,995 |
Leased vehicle income | 2,386 | 2,512 | 4,849 | 5,021 |
Other income | 71 | 119 | 163 | 243 |
Total revenue | 3,423 | 3,639 | 6,984 | 7,259 |
Costs and expenses | ||||
Operating expenses | 345 | 377 | 703 | 747 |
Leased vehicle expenses | 1,779 | 1,637 | 3,476 | 3,451 |
Provision for loan losses (Note 3) | 327 | 179 | 793 | 354 |
Interest expense | 788 | 952 | 1,623 | 1,899 |
Total costs and expenses | 3,239 | 3,145 | 6,595 | 6,451 |
Equity income (Note 6) | 42 | 42 | 67 | 87 |
Income before income taxes | 226 | 536 | 456 | 895 |
Income tax provision (Note 12) | 53 | 133 | 116 | 221 |
Net income | 173 | 403 | 340 | 674 |
Less: cumulative dividends on preferred stock | 22 | 22 | 45 | 45 |
Net income attributable to common shareholder | $ 151 | $ 381 | $ 295 | $ 629 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements Of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 173 | $ 403 | $ 340 | $ 674 |
Other comprehensive (loss) income, net of tax (Note 11) | ||||
Unrealized loss on hedges, net of income tax benefit of $11, $6, $50, $11 | (34) | (18) | (151) | (33) |
Foreign currency translation adjustment | 33 | 8 | (393) | 65 |
Other comprehensive (loss) income, net of tax | (1) | (10) | (544) | 32 |
Comprehensive income (loss) | $ 172 | $ 393 | $ (204) | $ 706 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements Of Comprehensive Income (Parentheticals) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Statement [Abstract] | ||||
Change in value of cash flow hedges, tax (benefit) | $ 11 | $ 6 | $ 50 | $ 11 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Shareholders' Equity - USD ($) $ in Millions | Total | Cumulative Effect, Period of Adoption, Adjustment [Member] | Common Stock [Member] | Preferred Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Loss [Member] | Retained Earnings [Member] |
Balance at beginning of period at Dec. 31, 2018 | $ 11,659 | $ 0 | $ 0 | $ 8,058 | $ (1,066) | $ 4,667 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 271 | 271 | |||||
Other comprehensive income (loss) | 42 | 42 | |||||
Stock based compensation | 11 | 11 | |||||
Other | 1 | 1 | |||||
Balance at end of period at Mar. 31, 2019 | 11,984 | 0 | 0 | 8,069 | (1,024) | 4,939 | |
Balance at beginning of period at Dec. 31, 2018 | 11,659 | 0 | 0 | 8,058 | (1,066) | 4,667 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 674 | ||||||
Other comprehensive income (loss) | 32 | ||||||
Balance at end of period at Jun. 30, 2019 | 12,385 | 0 | 0 | 8,077 | (1,034) | 5,342 | |
Balance at beginning of period at Mar. 31, 2019 | 11,984 | 0 | 0 | 8,069 | (1,024) | 4,939 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 403 | 403 | |||||
Other comprehensive income (loss) | (10) | (10) | |||||
Stock based compensation | 8 | 8 | |||||
Balance at end of period at Jun. 30, 2019 | 12,385 | 0 | 0 | 8,077 | (1,034) | 5,342 | |
Balance at beginning of period at Dec. 31, 2019 | 12,726 | $ (643) | 0 | 0 | 8,101 | (1,119) | 5,744 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 167 | 167 | |||||
Other comprehensive income (loss) | (543) | (543) | |||||
Stock based compensation | 9 | 9 | |||||
Dividends paid (Note 11) | (400) | (400) | |||||
Balance at end of period at Mar. 31, 2020 | 11,316 | 0 | 0 | 8,110 | (1,662) | 4,868 | |
Balance at beginning of period at Dec. 31, 2019 | 12,726 | $ (643) | 0 | 0 | 8,101 | (1,119) | 5,744 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 340 | ||||||
Other comprehensive income (loss) | (544) | ||||||
Balance at end of period at Jun. 30, 2020 | 11,053 | 0 | 0 | 8,120 | (1,663) | 4,596 | |
Balance at beginning of period at Mar. 31, 2020 | 11,316 | 0 | 0 | 8,110 | (1,662) | 4,868 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 173 | 173 | |||||
Other comprehensive income (loss) | (1) | (1) | |||||
Stock based compensation | 10 | 10 | |||||
Dividends paid (Note 11) | (400) | (400) | |||||
Dividends declared on preferred stock (Note 11) | (45) | (45) | |||||
Balance at end of period at Jun. 30, 2020 | $ 11,053 | $ 0 | $ 0 | $ 8,120 | $ (1,663) | $ 4,596 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements Of Cash Flows - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Statement of Cash Flows [Abstract] | ||
Net cash provided by operating activities | $ 4,080 | $ 4,293 |
Cash flows from investing activities | ||
Purchases of retail finance receivables, net | (15,063) | (14,450) |
Principal collections and recoveries on retail finance receivables | 9,362 | 12,096 |
Net collections (funding) of commercial finance receivables | 3,952 | (220) |
Purchases of leased vehicles, net | (6,054) | (8,189) |
Proceeds from termination of leased vehicles | 5,537 | 6,444 |
Net loans to related party | (938) | 0 |
Other investing activities | (19) | (30) |
Net cash used in investing activities | (3,223) | (4,349) |
Cash flows from financing activities | ||
Net change in debt (original maturities less than three months) | 821 | 243 |
Borrowings and issuances of secured debt | 24,771 | 12,857 |
Payments on secured debt | (24,065) | (14,743) |
Borrowings and issuances of unsecured debt | 7,591 | 6,668 |
Payments on unsecured debt | (5,132) | (5,659) |
Debt issuance costs | (97) | (78) |
Dividends paid | (845) | (46) |
Net cash provided by (used in) financing activities | 3,044 | (758) |
Net increase in cash, cash equivalents and restricted cash | 3,901 | (814) |
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash | (149) | 22 |
Cash, cash equivalents and restricted cash at beginning of period | 7,102 | 7,443 |
Cash, cash equivalents and restricted cash at end of period | 10,854 | 6,651 |
Supplemental Cash Flow Elements [Abstract] | ||
Total | $ 10,854 | $ 6,651 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The condensed consolidated financial statements include our accounts and the accounts of our consolidated subsidiaries, including certain special purpose entities (SPEs) utilized in secured financing transactions, which are considered variable interest entities (VIEs). All intercompany balances and transactions have been eliminated in consolidation. The consolidated financial statements, including the notes thereto, are condensed and do not include all disclosures required by generally accepted accounting principles (GAAP) in the U.S. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements that are included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, as filed with the Securities and Exchange Commission (SEC) on February 5, 2020 (2019 Form 10-K). Except as otherwise specified, dollar amounts presented within tables are stated in millions. The condensed consolidated financial statements at June 30, 2020 , and for the three and six months ended June 30, 2020 and 2019 , are unaudited and, in management’s opinion, include all adjustments, which consist of normal recurring adjustments and transactions or events discretely impacting the interim periods, considered necessary by management to fairly state our results of operations. The results for interim periods are not necessarily indicative of results for a full year. The condensed consolidated balance sheet at December 31, 2019 was derived from audited annual financial statements. Segment Information We are the wholly-owned captive finance subsidiary of General Motors Company (GM). We offer substantially similar products and services throughout many different regions, subject to local regulations and market conditions. We evaluate our business in two operating segments: North America (the North America Segment) and International (the International Segment). Our North America Segment includes operations in the U.S. and Canada. Our International Segment includes operations in Brazil, Chile, Colombia, Mexico and Peru, as well as our equity investments in joint ventures in the Asia/Pacific region. 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 finance receivables, resulting in recognition of lifetime expected credit losses upon origination of the related finance receivable. We adopted ASU 2016-13 on a modified retrospective basis on January 1, 2020 by recognizing an after-tax cumulative-effect adjustment to the opening balance of retained earnings of $643 million . The application of ASU 2016-13 increased our allowance for loan losses by $801 million . The following updates to our accounting policies became effective upon the adoption of ASU 2016-13. Retail Finance Receivables and the Allowance for Loan Losses Our retail finance receivables portfolio consists of smaller-balance, homogeneous loans that are carried at amortized cost, net of allowance for loan losses. These loans are divided among pools based on common risk characteristics, such as internal credit score, origination period (vintage) and geography. An internal credit score, of which FICO is an input in North America, is created by using algorithms or statistical models contained in origination scorecards. The scorecards are used to evaluate a consumer’s ability to pay based on statistical modeling of his or her prior credit usage, structure of the loan and other information. The output of the scorecards rank-orders consumers from those that are least likely to default to those that are most likely to default. By further dividing the portfolio into pools based on internal credit scores, we are better able to distinguish expected credit performance for different credit risks. The allowance is aggregated for each of the pools. Provisions for loan losses are charged to operations in amounts sufficient to maintain the allowance for loan losses at levels considered adequate to cover expected credit losses on our retail finance receivables portfolio. We use 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. We assess the recent internal operating and external environments and may qualitatively adjust certain assumptions to result in an allowance that is more reflective of losses that are expected to occur in the forecast environment. Expected losses are estimated for groups of accounts aggregated by internal credit score and monthly vintage. Generally, the expected losses are projected based on historical loss experience over the last ten years, more heavily weighted toward recent performance when determining the allowance to result in an estimate that is more reflective of the current internal and external environments. We consider forecast economic conditions over a reasonable and supportable forecast period. We determine the expected remaining life of the finance receivables to be a reasonable and supportable forecast horizon, primarily due to the relatively short weighted average life of retail finance receivables. We determined the economic factors that have the largest impact on expected losses include unemployment rates, interest rate spreads, disposable personal income, and growth rates in gross domestic products. We use forecasts for our chosen factors provided by a leading economic research firm. We compare the forecasts to consensus forecasts to assess for reasonableness and may use one or more forecast scenarios provided by the research firm. Troubled debt restructurings (TDRs) are grouped separately for purposes of measuring the allowance. The allowance for TDRs uses static pool modeling techniques, similar to 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 TDR allowance are based on an evaluation of historical and current information, and may be supplemented by management judgment. While we expect certain of our finance receivables to become TDRs, there is typically no delay between the point at which we become aware that a receivable is expected to become a TDR and when the receivable actually qualifies as a TDR. Therefore, our TDR portfolio does not include any receivables that are expected to become TDRs. We believe these factors are relevant in estimating expected losses and also consider an evaluation of overall portfolio credit quality based on indicators such as changes in our credit evaluation, underwriting and collection management policies, changes in the legal and regulatory environment, general economic conditions and business trends and uncertainties in forecasting and modeling techniques used in estimating our allowance. We update our retail loss forecast models and portfolio indicators on a quarterly basis to incorporate information reflective of the current and forecast economic environments. Assumptions regarding credit losses are reviewed periodically and may be impacted by actual performance of finance receivables and changes in any of the factors discussed above. Should the credit loss assumptions increase, there would be an increase in the amount of allowance for loan losses required, which would decrease the net carrying value of finance receivables and increase the amount of provision for loan losses. Commercial Finance Receivables and the Allowance for Loan Losses Our commercial lending offerings consist 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. Commercial finance receivables are carried at amortized cost, net of allowance for loan losses and any amounts received under a cash management program. Provisions for loan losses are charged to operations in amounts sufficient to maintain the allowance for loan losses at levels considered adequate to cover expected credit losses in the commercial finance receivables portfolio. We establish the allowance for loan losses based on historical loss experience, as well as the forecast for industry vehicle sales, which is the economic indicator that we believe has the largest impact on expected losses. The commercial finance receivables are aggregated into loan-risk pools, which are determined based on our internally-developed risk rating system. Dealer’s financial and operating metrics are regularly scored and further evaluated to derive a risk rating. Based on dealer risk ratings, we establish probability of default and loss given default, and also determine if any specific dealer loan requires additional reserves. Accounting Standards Not Yet Adopted |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions We offer loan and lease finance products through GM-franchised dealers to customers purchasing new vehicles manufactured by GM and certain used vehicles, and make commercial loans directly to GM-franchised dealers and their affiliates. We also offer commercial loans to dealers that are consolidated by GM and those balances are included in our finance receivables, net. Under subvention programs, GM makes cash payments to us for offering incentivized rates and structures on retail loan and lease finance products. In addition, GM makes cash payments to us to cover interest payments on certain commercial loans. We purchase certain program vehicles from GM subsidiaries. We simultaneously lease these vehicles to those subsidiaries for use primarily in their vehicle-sharing arrangements. We account for these leases as direct-finance leases, sales-type leases or loans depending on the origin of the asset, all of which are included in our finance receivables, net. We periodically purchase finance receivables from other GM subsidiaries for vehicles sold to rental car companies and for vehicles sold to certain dealerships. During the six months ended June 30, 2020 and 2019 , we purchased $187 million and $442 million of these receivables from GM, which are included in our finance receivables, net. We have related party payables due to GM, primarily for commercial finance receivables originated but not yet funded. The following tables present related party transactions: Balance Sheet Data June 30, 2020 December 31, 2019 Commercial finance receivables, net due from dealers consolidated by GM (a) $ 395 $ 478 Finance receivables from GM subsidiaries (a) $ 17 $ 39 Subvention receivable (b) $ 618 $ 676 Loans receivable (b) $ 947 $ — Commercial loan funding payable (c) $ 52 $ 74 Three Months Ended June 30, Six Months Ended June 30, Income Statement Data 2020 2019 2020 2019 Interest subvention earned on retail finance receivables (d) $ 151 $ 133 $ 292 $ 264 Interest subvention earned on commercial finance receivables (d) $ 11 $ 14 $ 26 $ 31 Leased vehicle subvention earned (e) $ 765 $ 818 $ 1,570 $ 1,653 _________________ (a) Included in finance receivables, net. (b) Included in related party receivables. We received subvention payments from GM of $967 million and $949 million for the three months ended June 30, 2020 and 2019 and $2.0 billion for both the six months ended June 30, 2020 and 2019 . Loans receivable consist primarily of $903 million due from GM for subvention. (c) Included in related party payables. (d) Included in finance charge income. (e) Included as a reduction to leased vehicle expenses. Under the support agreement with GM (the Support Agreement), if our earning assets leverage ratio at the end of any calendar quarter exceeds the applicable threshold set in the Support Agreement, we may require GM to provide funding sufficient to bring our earning assets leverage ratio to within the applicable threshold. In determining our earning assets leverage ratio (net earning assets divided by adjusted equity) under the Support Agreement, net earning assets means our finance receivables, net, plus leased vehicles, net, and adjusted equity means our equity, net of goodwill and inclusive of outstanding junior subordinated debt, as each may be adjusted for derivative accounting from time to time. Additionally, the Support Agreement provides that GM will own all of our outstanding voting shares as long as we have any unsecured debt securities outstanding. GM also agrees to certain provisions in the Support Agreement intended to ensure that we maintain adequate access to liquidity. Pursuant to these provisions, GM provides us with a $1.0 billion junior subordinated unsecured intercompany revolving credit facility (the Junior Subordinated Revolving Credit Facility), and GM agrees to use commercially reasonable efforts to ensure that we will continue to be designated as a subsidiary borrower under GM's corporate revolving credit facilities. We have access, subject to available capacity, to $14.5 billion of GM's unsecured revolving credit facilities consisting of a three-year, $4.0 billion facility, and a five-year, $10.5 billion facility. We also have exclusive access to GM's $2.0 billion facility (GM Revolving 364 -Day Credit Facility). At June 30, 2020 , we had no amounts borrowed under any of the GM facilities. At June 30, 2020 , GM had $3.4 billion in borrowings outstanding on the three-year, $4.0 billion facility and $10.5 billion in borrowings outstanding on the five-year, $10.5 billion facility. In April 2020, GM renewed the $2.0 billion GM Revolving 364 -Day Credit Facility 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. |
Finance Receivables
Finance Receivables | 6 Months Ended |
Jun. 30, 2020 | |
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract] | |
Finance Receivables | Finance Receivables June 30, 2020 December 31, 2019 Retail finance receivables Retail finance receivables, net of fees (a) $ 46,489 $ 42,268 Less: allowance for loan losses (2,044 ) (866 ) Total retail finance receivables, net 44,445 41,402 Commercial finance receivables Commercial finance receivables, net of fees (b) 7,884 12,149 Less: allowance for loan losses (67 ) (78 ) Total commercial finance receivables, net 7,817 12,071 Total finance receivables, net $ 52,262 $ 53,473 Fair value utilizing Level 2 inputs $ 7,817 $ 12,071 Fair value utilizing Level 3 inputs $ 46,619 $ 42,012 ________________ (a) Net of unearned income, unamortized premiums and discounts, and deferred fees and costs o f $218 million and $83 million at June 30, 2020 and December 31, 2019 . (b) Net of dealer cash management balances of $1.3 billion and $1.2 billion at June 30, 2020 and December 31, 2019 . Rollforward of Allowance for Retail Loan Losses A summary of the activity in the allowance for retail loan losses is as follows: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Allowance for retail loan losses beginning balance $ 1,879 $ 862 $ 866 $ 844 Impact of adopting ASU 2016-13 ( Note 1 ) — — 801 — Provision for loan losses 332 165 788 343 Charge-offs (256 ) (279 ) (596 ) (586 ) Recoveries 89 132 245 277 Foreign currency translation — 1 (60 ) 3 Allowance for retail loan losses ending balance $ 2,044 $ 881 $ 2,044 $ 881 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 coronavirus disease 2019 (COVID-19) pandemic. Retail Credit Quality Our retail finance receivables portfolio includes loans made to consumers and businesses to finance the purchase of vehicles for personal and commercial use. 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 Origination 2020 2019 2018 2017 2016 2015 Prior Total Percent Prime - FICO Score 680 and greater $ 10,305 $ 9,019 $ 6,063 $ 2,774 $ 940 $ 253 $ 9 $ 29,363 63.2 % Near-prime - FICO Score 620 to 679 1,785 2,533 1,574 828 340 138 25 7,223 15.5 Sub-prime - FICO Score less than 620 1,917 3,178 1,982 1,440 833 396 157 9,903 21.3 Retail finance receivables, net of fees $ 14,007 $ 14,730 $ 9,619 $ 5,042 $ 2,113 $ 787 $ 191 $ 46,489 100.0 % We review the ongoing credit quality of our retail finance receivables based on customer payment activity. A retail account is considered delinquent if a substantial portion of a scheduled payment has not been received by the date the payment was contractually due. Retail finance receivables are collateralized by vehicle titles and, subject to local laws, we generally have the right to repossess the vehicle in the event the customer defaults on the payment terms of the contract. The following table is 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 Origination 2020 2019 2018 2017 2016 2015 Prior Total Percent Current $ 13,875 $ 14,244 $ 9,231 $ 4,752 $ 1,930 $ 689 $ 148 $ 44,869 96.5 % 31 - 60 days 86 295 236 181 114 61 25 998 2.2 Greater than 60 days 44 183 147 106 67 36 18 601 1.3 Finance receivables more than 30 days delinquent 130 478 383 287 181 97 43 1,599 3.5 In repossession 2 8 5 3 2 1 — 21 — Finance receivables more than 30 days delinquent or in repossession 132 486 388 290 183 98 43 1,620 3.5 Retail finance receivables, net of fees $ 14,007 $ 14,730 $ 9,619 $ 5,042 $ 2,113 $ 787 $ 191 $ 46,489 100.0 % The accrual of finance charge income had been suspended on retail finance receivables with contractual amounts due of $907 million and $875 million at June 30, 2020 and December 31, 2019 . TDRs 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. Additional TDR activity is presented below: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2018 2020 2019 2018 Number of loans classified as TDRs during the period 14,378 17,407 19,662 29,646 33,939 33,096 Outstanding amortized cost of loans classified as TDRs during the period $ 248 $ 318 $ 360 $ 535 $ 626 $ 613 The unpaid principal balances, net of recoveries, of loans charged off during the reporting period within 12 months of being modified as a TDR were $17 million , $16 million , and $17 million for the three months ended June 30, 2020 , 2019 and 2018 and $30 million , $28 million , and $28 million for the six months ended June 30, 2020 , 2019 and 2018 . Commercial Credit Quality Our commercial finance receivables consist of dealer financings, primarily for dealer inventory purchases. Proprietary models are used to assign a risk rating to each dealer. We perform periodic credit reviews of each dealership and adjust the dealership's risk rating, if necessary. Effective January 1, 2020, we updated our commercial risk model and our risk rating categories as follows: Dealer Risk Rating Description I Performing accounts with strong to acceptable financial metrics with at least satisfactory capacity to meet financial commitments. II Performing accounts experiencing potential weakness in financial metrics and repayment prospects resulting in increased monitoring. III Non-Performing accounts with inadequate paying capacity for current obligations and that have the distinct possibility of creating a loss if deficiencies are not corrected. IV Non-Performing accounts with inadequate paying capacity for current obligations and inherent weaknesses that make collection or liquidation in full highly questionable or improbable. Dealers with III and IV risk ratings are subject to additional monitoring and restrictions on funding, including suspension of lines of credit and liquidation of assets. The following table summarizes the credit risk profile by dealer risk rating of commercial finance receivables at June 30, 2020 . Year of Origination (a) Dealer Risk Rating Revolving 2020 2019 2018 2017 2016 2015 Prior Total Percent I $ 6,232 $ 170 $ 253 $ 100 $ 117 $ 127 $ 75 $ 8 $ 7,082 89.8 % II 408 1 7 12 33 4 13 22 500 6.3 III 247 — 8 29 2 10 1 — 297 3.8 IV 1 — — — — — 4 — 5 0.1 Balance at end of period $ 6,888 $ 171 $ 268 $ 141 $ 152 $ 141 $ 93 $ 30 $ 7,884 100.0 % ________________ (a) Floorplan advances comprise 97% of the total revolving balance. Dealer term loans are presented by year of origination. At June 30, 2020 , substantially all of our commercial finance receivables were current with respect to payment status and activity in the allowance for commercial loan losses was insignificant for the three and six months ended June 30, 2020 and 2019 . Commercial finance receivables classified as TDRs and amounts on non-accrual status were insignificant at June 30, 2020 . |
Leased Vehicles
Leased Vehicles | 6 Months Ended |
Jun. 30, 2020 | |
Lessor Disclosure [Abstract] | |
Leased Vehicles | Leased Vehicles June 30, 2020 December 31, 2019 Leased vehicles $ 60,037 $ 62,767 Manufacturer subvention (9,358 ) (9,731 ) Net capitalized cost 50,679 53,036 Less: accumulated depreciation (11,078 ) (10,981 ) Leased vehicles, net $ 39,601 $ 42,055 The following table summarizes minimum rental payments due to us as lessor under operating leases at June 30, 2020 : Years Ending December 31, 2020 2021 2022 2023 2024 Total Lease payments under operating leases $ 3,333 $ 4,961 $ 2,481 $ 435 $ 19 $ 11,229 |
Goodwill
Goodwill | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill The following table summarizes the change in the carrying amounts of goodwill by segment: Six Months Ended June 30, 2020 2020 2019 North America International Total North America International Total Beginning balance $ 1,105 $ 80 $ 1,185 $ 1,105 $ 81 $ 1,186 Foreign currency translation — (18 ) (18 ) — 2 2 Ending balance $ 1,105 $ 62 $ 1,167 $ 1,105 $ 83 $ 1,188 Since December 31, 2019, the COVID-19 pandemic has resulted in a widespread health crisis that has adversely affected businesses, economies and financial markets worldwide, placed constraints on the operations of businesses, decreased consumer mobility and activity, and caused significant economic volatility in the global debt and equity markets. The economic and social uncertainty resulting from the COVID-19 outbreak indicated that it was more likely than not that goodwill impairment existed at March 31, 2020 for our North America reporting unit. Therefore, at March 31, 2020, we performed an event-driven goodwill impairment test for our North America reporting unit and determined no goodwill impairment existed. The fair value of our 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 be achieved. Under multiple scenarios, including fully weighting the downside cash flow scenario, the estimated fair value of our North America reporting unit at March 31, 2020 exceeded its carrying amount. During the three months ended June 30, 2020 |
Equity in Net Assets of Non-con
Equity in Net Assets of Non-consolidated Affiliates | 6 Months Ended |
Jun. 30, 2020 | |
Noncontrolling Interest [Abstract] | |
Equity in Net Assets of Non-consolidated Affiliates | Equity in Net Assets of Non-consolidated Affiliates We use the equity method to account for our equity interest in joint ventures . The income of these joint ventures is not consolidated into our financial statements; rather, our proportionate share of the earnings is reflected as equity income. There have been no ownership changes in our joint ventures since December 31, 2019. The following table presents certain aggregated operating data of our joint ventures: Three Months Ended June 30, Six Months Ended June 30, Summarized Operating Data 2020 2019 2020 2019 Finance charge income $ 335 $ 344 $ 694 $ 694 Income before income taxes $ 158 $ 161 $ 254 $ 331 Net income $ 118 $ 121 $ 190 $ 248 At June 30, 2020 and December 31, 2019 , we had undistributed earnings of $666 million and $615 million |
Debt
Debt | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Debt June 30, 2020 December 31, 2019 Carrying Amount Fair Value Carrying Amount Fair Value Secured debt Revolving credit facilities $ 7,605 $ 7,608 $ 6,152 $ 6,160 Securitization notes payable 32,703 33,065 33,807 34,000 Total secured debt 40,308 40,673 39,959 40,160 Unsecured debt Senior notes 46,641 46,721 43,679 44,937 Credit facilities 1,857 1,846 1,936 1,936 Other unsecured debt 3,446 3,450 3,364 3,366 Total unsecured debt 51,944 52,017 48,979 50,239 Total secured and unsecured 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 Secured Debt Most of the secured debt was issued by VIEs and is repayable only from proceeds related to the underlying pledged assets. Refer to Note 8 for further information. The weighted average interest rate on secured debt was 2.42% at June 30, 2020 . Issuance costs on secured debt of $84 million as of June 30, 2020 and $75 million as of December 31, 2019 are amortized to interest expense over the expected term of the secured debt. The terms of our revolving credit facilities provide for a revolving period and subsequent amortization period, and are expected to be repaid over periods ranging up to six years . During the six months ended June 30, 2020 , we renewed credit facilities with a total borrowing capacity of $14.5 billion . Securitization notes payable at June 30, 2020 are due beginning in 2020 through 2027 . During the six months ended June 30, 2020 , we issued $9.0 billion in aggregate principal amount of securitization notes payable with an initial weighted average interest rate of 1.71% and maturity dates ranging from 2021 to 2027 . Unsecured Debt Senior Notes At June 30, 2020 , we had $46.1 billion aggregate outstanding in senior notes that mature from 2020 through 2030 and have a weighted average interest rate of 3.38% . Issuance costs on senior notes of $115 million as of June 30, 2020 and $109 million as of December 31, 2019 are amortized to interest expense over the term of the notes. During the six months ended June 30, 2020 , we issued $5.9 billion in aggregate principal amount of senior notes with an initial weighted average interest rate of 3.41% and maturity dates ranging from 2023 through 2030 . General Motors Financial Company, Inc. is the sole guarantor of its subsidiaries' unsecured debt obligations for which a guarantee is provided. Credit Facilities and Other Unsecured Debt We use unsecured credit facilities with banks as well as non-bank instruments as funding sources. Our credit facilities and other unsecured debt have maturities of up to four years . The weighted average interest rate on these credit facilities and other unsecured debt was 3.15% at June 30, 2020 . Compliance with Debt Covenants Several of our revolving credit facilities require compliance with certain financial and operational covenants as well as regular reporting to lenders, including providing certain subsidiary financial statements. Certain of our secured debt agreements also contain various covenants, including maintaining portfolio performance ratios as well as limits on deferment levels. Our unsecured debt obligations contain covenants including limitations on our ability to incur certain liens. At June 30, 2020 , we were in compliance with these debt covenants. |
Variable Interest Entities
Variable Interest Entities | 6 Months Ended |
Jun. 30, 2020 | |
Variable Interest Entities [Abstract] | |
Variable Interest Entities | Variable Interest Entities The following table summarizes the assets and liabilities related to our consolidated VIEs: June 30, 2020 December 31, 2019 Restricted cash (a) $ 2,670 $ 2,643 Finance receivables, net of fees $ 29,729 $ 35,392 Lease related assets $ 19,172 $ 14,464 Secured debt $ 40,206 $ 39,771 _______________ (a) Included in other assets. We use SPEs that are considered VIEs to issue variable funding notes to third party, bank-sponsored warehouse facilities or asset-backed securities to investors in securitization transactions. The debt issued by these VIEs is backed by finance receivables and leasing-related assets transferred to the VIEs. We determined that we are the primary beneficiary of the VIEs because our servicing responsibilities give us the power to direct the activities that most significantly impact the performance of the VIEs and our variable interests in the VIEs give us the obligation to absorb losses and the right to receive residual returns 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 us or our other assets, with the exception of customary representation and warranty repurchase provisions and indemnities that we provide as the servicer. We are not required to provide any additional financial support to these VIEs. While these VIE subsidiaries are included in our condensed consolidated financial statements, they are separate legal entities and their assets are legally owned by them and are not available to our creditors. |
Derivative Financial Instrument
Derivative Financial Instruments and Hedging Activities | 6 Months Ended |
Jun. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments and Hedging Activities | Derivative Financial Instruments and Hedging Activities We are exposed to certain risks arising from both our business operations and economic conditions. We manage economic risks, including interest rate risk, primarily by managing the amount, sources, and duration of our assets and liabilities and by using derivative financial instruments. Specifically, we enter into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. Our derivative financial instruments are used to manage differences in the amount, timing, and duration of our known or expected cash receipts and our known or expected cash payments principally related to our borrowings. Certain of our foreign operations expose us to fluctuations of foreign interest rates and exchange rates. We primarily finance our earning assets with debt in the same currency to minimize the impact to earnings from our exposure to fluctuations in exchange rates. When we use a different currency, these fluctuations may impact the value of our cash receipts and payments in terms of our functional currency. We enter into derivative financial instruments to protect the value or fix the amount of certain assets and liabilities in terms of the relevant functional currency. The table below presents the gross fair value amounts of our derivative financial instruments and the associated notional amounts: June 30, 2020 December 31, 2019 Notional Fair Value of Assets (a) Fair Value of Liabilities (a) Notional Fair Value of Assets (a) Fair Value of Liabilities (a) Derivatives designated as hedges Fair value hedges Interest rate swaps $ 10,894 $ 609 $ — $ 9,458 $ 234 $ 23 Foreign currency swaps 1,797 26 68 1,796 22 71 Cash flow hedges Interest rate swaps 964 — 32 590 — 6 Foreign currency swaps 5,143 26 302 4,429 40 119 Derivatives not designated as hedges Interest rate contracts 112,403 1,045 807 92,400 340 300 Total (b) $ 131,201 $ 1,706 $ 1,209 $ 108,673 $ 636 $ 519 _________________ (a) The gross amounts of the fair value of our assets and liabilities are included in other assets and other liabilities, respectively. Amounts accrued for interest payments in a net receivable position are included in other assets. Amounts accrued for interest payments in a net payable position are included in other liabilities. All our derivatives are categorized within Level 2 of the fair value hierarchy. The fair value for Level 2 instruments was derived using the market approach based on observable market inputs including quoted prices of similar instruments and foreign exchange and interest rate forward curves. (b) We primarily enter into derivative instruments through AmeriCredit Financial Services, Inc. (AFSI); however, our SPEs may also be parties to derivative instruments. Agreements between AFSI and its derivative counterparties include rights of setoff for positions with offsetting values or for collateral held or posted. At June 30, 2020 and December 31, 2019 , the fair value of assets and liabilities available for offset was $701 million and $302 million . At June 30, 2020 and December 31, 2019 , we held $778 million and $210 million of collateral from counterparties that is available for netting against our asset positions. At June 30, 2020 and December 31, 2019 , we posted $274 million and $89 million of collateral to counterparties that is available for netting against our liability positions. The following amounts were recorded in the condensed consolidated balance sheet related to items designated and qualifying as hedged items in fair value hedging relationships: Carrying Amount of Cumulative Amount of Fair Value (a) June 30, 2020 December 31, 2019 June 30, 2020 December 31, 2019 Unsecured debt $ 24,203 $ 20,397 $ (648 ) $ (77 ) _________________ (a) Includes $(111) million and $69 million at June 30, 2020 and December 31, 2019 of amortization remaining on hedged items for which hedge accounting has been discontinued. The tables below present the effect of our derivative financial instruments in the condensed consolidated statements of income: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Interest Expense (a) Operating Expenses (b) Interest Expense (a) Operating Expenses (b) Interest Expense (a) Operating Expenses (b) Interest Expense (a) Operating Expenses (b) Fair value hedges Hedged items - interest rate swaps $ (66 ) $ — $ (313 ) $ — $ (569 ) $ — $ (523 ) $ — Interest rate swaps (56 ) — 285 — 375 — 466 — Hedged items - foreign currency swaps — (41 ) — (25 ) — (1 ) — 7 Foreign currency swaps (9 ) 43 (15 ) 27 (21 ) 4 (31 ) (4 ) Cash flow hedges Interest rate swaps (2 ) — 1 — (3 ) — 4 — Foreign currency swaps (28 ) 113 (21 ) 18 (57 ) 7 (39 ) (15 ) Derivatives not designated as hedges Interest rate contracts 109 — (5 ) — 161 — (10 ) — Total (losses) income recognized $ (52 ) $ 115 $ (68 ) $ 20 $ (114 ) $ 10 $ (133 ) $ (12 ) _________________ (a) Total interest expense was $788 million and $952 million for the three months ended June 30, 2020 and 2019 and $1.6 billion and $1.9 billion for the six months ended June 30, 2020 and 2019 . (b) Activity is offset by translation activity also recorded in operating expenses related to foreign currency-denominated loans. Total operating expenses were $345 million and $377 million for the three months ended June 30, 2020 and 2019 and $703 million and $747 million for the six months ended June 30, 2020 and 2019 . The tables below present the effect of our derivative financial instruments in the condensed consolidated statements of comprehensive income: Gains (Losses) Recognized In Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Fair value hedges Foreign currency swaps $ (7 ) $ (9 ) $ (12 ) $ (20 ) Cash flow hedges Interest rate swaps (9 ) (2 ) (15 ) (2 ) Foreign currency swaps 39 (19 ) (180 ) (71 ) Total $ 23 $ (30 ) $ (207 ) $ (93 ) (Gains) Losses Reclassified From (a)(b) Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Fair value hedges Foreign currency swaps $ 5 $ 11 $ 13 $ 22 Cash flow hedges Interest rate swaps 1 (1 ) 2 (3 ) Foreign currency swaps (63 ) 2 41 41 Total $ (57 ) $ 12 $ 56 $ 60 _________________ (a) All amounts reclassified from accumulated other comprehensive loss were recorded to interest expense. (b) During the next twelve months, we estimate $88 million in losses will be reclassified into pretax earnings from derivatives designated for hedge accounting. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Guarantees of Indebtedness At June 30, 2020, we had no guarantees. Legal Proceedings We are subject to various pending and potential legal and regulatory proceedings in the ordinary course of business, including litigation, arbitration, claims, investigations, examinations, subpoenas and enforcement proceedings. Some litigation against us could take the form of class actions. The outcome of these proceedings is inherently uncertain, and thus we cannot confidently predict how or when proceedings will be resolved. An adverse outcome in one or more of these proceedings could result in substantial damages, settlements, fines, penalties, diminished income or reputational harm. We identify below the material proceedings in connection with which we believe a material loss is reasonably possible or probable. In accordance with the current accounting standards for loss contingencies, we establish reserves for legal matters when it is probable that a loss associated with the matter has been incurred and the amount of the loss can be reasonably estimated. The actual costs of resolving legal matters may be higher or lower than any amounts reserved for these matters. At June 30, 2020 , we estimated our reasonably possible legal exposure for unfavorable outcomes is up to $40 million , and we have accrued $14 million . In 2014 and 2015, we were served with investigative subpoenas from various state attorneys general and other governmental offices to produce documents and data relating to our automobile loan and lease business and securitization of loans and leases. We believe that we have cooperated fully with all reasonable requests for information. We are currently unable to estimate any reasonably possible loss or range of loss that may result from these investigations. Other Administrative Tax Matters We accrue non-income tax liabilities for contingencies when management believes that a loss is probable and the amounts can be reasonably estimated, while contingent gains are recognized only when realized. In the event any losses are sustained in excess of accruals, they will be charged against income at that time. In evaluating indirect tax matters, we take into consideration factors such as our historical experience with matters of similar nature, specific facts and circumstances, and the likelihood of prevailing. We reevaluate and update our accruals as matters progress over time. Where there is a reasonable possibility that losses exceeding amounts already recognized may be incurred, our estimate of the additional range of loss is up to $11 million at June 30, 2020 . |
Shareholders' Equity
Shareholders' Equity | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | Shareholders' Equity June 30, 2020 December 31, 2019 Common Stock Number of shares authorized 10,000,000 10,000,000 Number of shares issued and outstanding 5,050,000 5,050,000 During the six months ended June 30, 2020 , our Board of Directors declared and paid dividends of $800 million on our common stock to General Motors Holdings LLC. June 30, 2020 December 31, 2019 Preferred Stock Number of shares authorized 250,000,000 250,000,000 Number of shares issued and outstanding Fixed-to-Floating Rate Cumulative Perpetual Preferred Stock, Series A (Series A Preferred Stock) 1,000,000 1,000,000 Fixed-to-Floating Rate Cumulative Perpetual Preferred Stock, Series B (Series B Preferred Stock) 500,000 500,000 During the six months ended June 30, 2020 , we paid dividends of $29 million to holders of record of our Series A Preferred Stock, and $16 million to holders of record of our Series B Preferred Stock. During the six months ended June 30, 2019 , we paid dividends of $29 million to holders of record of our Series A Preferred Stock, and $17 million to holders of record of our Series B Preferred Stock. On June 22, 2020, prior to the declaration of our common stock dividend, our Board of Directors declared a dividend of $28.75 per share, $29 million in the aggregate, on our Series A Preferred Stock, payable on September 30, 2020 to holders of record at September 15, 2020 and declared a dividend of $32.50 per share, $16 million in the aggregate, on our Series B Preferred Stock, payable on September 30, 2020 to holders of record at September 15, 2020. Accordingly, $45 million has been set aside for the payment of these dividends. The following table summarizes the significant components of accumulated other comprehensive loss: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Unrealized loss on hedges Beginning balance $ (166 ) $ (6 ) $ (49 ) $ 9 Change in value of hedges, net of tax (34 ) (18 ) (151 ) (33 ) Ending balance (200 ) (24 ) (200 ) (24 ) Defined benefit plans Beginning balance 1 1 1 1 Unrealized gain on subsidiary pension, net of tax — — — — Ending balance 1 1 1 1 Foreign currency translation adjustment Beginning balance (1,497 ) (1,019 ) (1,071 ) (1,076 ) Translation gain (loss), net of tax 33 8 (393 ) 65 Ending balance (1,464 ) (1,011 ) (1,464 ) (1,011 ) Total accumulated other comprehensive loss $ (1,663 ) $ (1,034 ) $ (1,663 ) $ (1,034 ) |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For interim income tax reporting we estimate our annual effective tax rate and apply it to our year-to-date ordinary income. Tax jurisdictions with a projected or year-to-date loss for which a tax benefit cannot be realized are excluded from the annualized effective tax rate. The tax effects of unusual or infrequently occurring items, including changes in judgment about valuation allowances and effects of changes in tax laws or rates, are reported in the interim period in which they occur. During the three months ended June 30, 2020 and 2019 , income tax expense of $53 million and $133 million primarily resulted from tax expense attributable to entities included in our effective tax rate calculation. The decrease in income tax expense is primarily due to a decrease in our pre-tax earnings. During the six months ended June 30, 2020 and 2019 , income tax expense of $116 million and $221 million primarily resulted from tax expense attributable to entities included in our effective tax rate calculation. The decrease in income tax expense is primarily due to a decrease in our pre-tax earnings. We are included in GM’s consolidated U.S. federal income tax return and for certain states’ income tax returns. Net operating losses and certain tax credits generated by us have been utilized by GM; however, income tax expense and deferred tax balances are presented in these financial statements as if we filed our own tax returns in each jurisdiction. |
Segment Reporting
Segment Reporting | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting Our chief operating decision maker evaluates the operating results and performance of our business based on our North America and International Segments. The management of each segment is responsible for executing our strategies. Key operating data for our operating segments were as follows: Three Months Ended June 30, 2020 Three Months Ended June 30, 2019 North International Total North International Total Total revenue $ 3,197 $ 226 $ 3,423 $ 3,332 $ 307 $ 3,639 Operating expenses 273 72 345 281 96 377 Leased vehicle expenses 1,768 11 1,779 1,627 10 1,637 Provision for loan losses 244 83 327 142 37 179 Interest expense 710 78 788 831 121 952 Equity income — 42 42 — 42 42 Income before income taxes $ 202 $ 24 $ 226 $ 451 $ 85 $ 536 Six Months Ended June 30, 2020 Six Months Ended June 30, 2019 North International Total North International Total Total revenue $ 6,474 $ 510 $ 6,984 $ 6,638 $ 621 $ 7,259 Operating expenses 567 136 703 557 190 747 Leased vehicle expenses 3,452 24 3,476 3,430 21 3,451 Provision for loan losses 635 158 793 281 73 354 Interest expense 1,448 175 1,623 1,654 245 1,899 Equity income — 67 67 — 87 87 Income before income taxes $ 372 $ 84 $ 456 $ 716 $ 179 $ 895 June 30, 2020 December 31, 2019 North International Total North International Total Finance receivables, net $ 47,649 $ 4,613 $ 52,262 $ 46,679 $ 6,794 $ 53,473 Leased vehicles, net $ 39,467 $ 134 $ 39,601 $ 41,881 $ 174 $ 42,055 Total assets $ 103,521 $ 7,804 $ 111,325 $ 99,453 $ 9,764 $ 109,217 |
Regulatory Capital and Other Re
Regulatory Capital and Other Regulatory Matters | 6 Months Ended |
Jun. 30, 2020 | |
Regulatory Capital and Other Regulatory Matters [Abstract] | |
Regulatory Capital and Other Regulatory Matters | Regulatory Capital and Other Regulatory Matters We are required to comply with a wide variety of laws and regulations. Certain of our entities operate in international markets as either banks or regulated finance companies that are subject to regulatory restrictions. These regulatory restrictions, among other things, require that certain of these entities meet minimum capital requirements and may restrict dividend distributions and ownership of certain assets. We were in compliance with all regulatory capital requirements as most recently reported. Total assets of our regulated international banks and finance companies were approximately $5.9 billion and $7.8 billion at June 30, 2020 and December 31, 2019 . |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The condensed consolidated financial statements include our accounts and the accounts of our consolidated subsidiaries, including certain special purpose entities (SPEs) utilized in secured financing transactions, which are considered variable interest entities (VIEs). All intercompany balances and transactions have been eliminated in consolidation. The consolidated financial statements, including the notes thereto, are condensed and do not include all disclosures required by generally accepted accounting principles (GAAP) in the U.S. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements that are included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, as filed with the Securities and Exchange Commission (SEC) on February 5, 2020 (2019 Form 10-K). Except as otherwise specified, dollar amounts presented within tables are stated in millions. The condensed consolidated financial statements at June 30, 2020 , and for the three and six months ended June 30, 2020 and 2019 , are unaudited and, in management’s opinion, include all adjustments, which consist of normal recurring adjustments and transactions or events discretely impacting the interim periods, considered necessary by management to fairly state our results of operations. The results for interim periods are not necessarily indicative of results for a full year. The condensed consolidated balance sheet at December 31, 2019 was derived from audited annual financial statements. |
Segment Information | Segment Information We are the wholly-owned captive finance subsidiary of General Motors Company (GM). We offer substantially similar products and services throughout many different regions, subject to local regulations and market conditions. We evaluate our business in two operating segments: North America (the North America Segment) and International (the International Segment). Our North America Segment includes operations in the U.S. and Canada. Our International Segment includes operations in Brazil, Chile, Colombia, Mexico and Peru, as well as our equity investments in joint ventures in the Asia/Pacific region. |
Recently Adopted Accounting Standards and Accounting Standards Not Yet Adopted | 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 finance receivables, resulting in recognition of lifetime expected credit losses upon origination of the related finance receivable. We adopted ASU 2016-13 on a modified retrospective basis on January 1, 2020 by recognizing an after-tax cumulative-effect adjustment to the opening balance of retained earnings of $643 million . The application of ASU 2016-13 increased our allowance for loan losses by $801 million . The following updates to our accounting policies became effective upon the adoption of ASU 2016-13. Retail Finance Receivables and the Allowance for Loan Losses Our retail finance receivables portfolio consists of smaller-balance, homogeneous loans that are carried at amortized cost, net of allowance for loan losses. These loans are divided among pools based on common risk characteristics, such as internal credit score, origination period (vintage) and geography. An internal credit score, of which FICO is an input in North America, is created by using algorithms or statistical models contained in origination scorecards. The scorecards are used to evaluate a consumer’s ability to pay based on statistical modeling of his or her prior credit usage, structure of the loan and other information. The output of the scorecards rank-orders consumers from those that are least likely to default to those that are most likely to default. By further dividing the portfolio into pools based on internal credit scores, we are better able to distinguish expected credit performance for different credit risks. The allowance is aggregated for each of the pools. Provisions for loan losses are charged to operations in amounts sufficient to maintain the allowance for loan losses at levels considered adequate to cover expected credit losses on our retail finance receivables portfolio. We use 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. We assess the recent internal operating and external environments and may qualitatively adjust certain assumptions to result in an allowance that is more reflective of losses that are expected to occur in the forecast environment. Expected losses are estimated for groups of accounts aggregated by internal credit score and monthly vintage. Generally, the expected losses are projected based on historical loss experience over the last ten years, more heavily weighted toward recent performance when determining the allowance to result in an estimate that is more reflective of the current internal and external environments. We consider forecast economic conditions over a reasonable and supportable forecast period. We determine the expected remaining life of the finance receivables to be a reasonable and supportable forecast horizon, primarily due to the relatively short weighted average life of retail finance receivables. We determined the economic factors that have the largest impact on expected losses include unemployment rates, interest rate spreads, disposable personal income, and growth rates in gross domestic products. We use forecasts for our chosen factors provided by a leading economic research firm. We compare the forecasts to consensus forecasts to assess for reasonableness and may use one or more forecast scenarios provided by the research firm. Troubled debt restructurings (TDRs) are grouped separately for purposes of measuring the allowance. The allowance for TDRs uses static pool modeling techniques, similar to 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 TDR allowance are based on an evaluation of historical and current information, and may be supplemented by management judgment. While we expect certain of our finance receivables to become TDRs, there is typically no delay between the point at which we become aware that a receivable is expected to become a TDR and when the receivable actually qualifies as a TDR. Therefore, our TDR portfolio does not include any receivables that are expected to become TDRs. We believe these factors are relevant in estimating expected losses and also consider an evaluation of overall portfolio credit quality based on indicators such as changes in our credit evaluation, underwriting and collection management policies, changes in the legal and regulatory environment, general economic conditions and business trends and uncertainties in forecasting and modeling techniques used in estimating our allowance. We update our retail loss forecast models and portfolio indicators on a quarterly basis to incorporate information reflective of the current and forecast economic environments. Assumptions regarding credit losses are reviewed periodically and may be impacted by actual performance of finance receivables and changes in any of the factors discussed above. Should the credit loss assumptions increase, there would be an increase in the amount of allowance for loan losses required, which would decrease the net carrying value of finance receivables and increase the amount of provision for loan losses. Commercial Finance Receivables and the Allowance for Loan Losses Our commercial lending offerings consist 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. Commercial finance receivables are carried at amortized cost, net of allowance for loan losses and any amounts received under a cash management program. Provisions for loan losses are charged to operations in amounts sufficient to maintain the allowance for loan losses at levels considered adequate to cover expected credit losses in the commercial finance receivables portfolio. We establish the allowance for loan losses based on historical loss experience, as well as the forecast for industry vehicle sales, which is the economic indicator that we believe has the largest impact on expected losses. The commercial finance receivables are aggregated into loan-risk pools, which are determined based on our internally-developed risk rating system. Dealer’s financial and operating metrics are regularly scored and further evaluated to derive a risk rating. Based on dealer risk ratings, we establish probability of default and loss given default, and also determine if any specific dealer loan requires additional reserves. Accounting Standards Not Yet Adopted |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | The following tables present related party transactions: Balance Sheet Data June 30, 2020 December 31, 2019 Commercial finance receivables, net due from dealers consolidated by GM (a) $ 395 $ 478 Finance receivables from GM subsidiaries (a) $ 17 $ 39 Subvention receivable (b) $ 618 $ 676 Loans receivable (b) $ 947 $ — Commercial loan funding payable (c) $ 52 $ 74 Three Months Ended June 30, Six Months Ended June 30, Income Statement Data 2020 2019 2020 2019 Interest subvention earned on retail finance receivables (d) $ 151 $ 133 $ 292 $ 264 Interest subvention earned on commercial finance receivables (d) $ 11 $ 14 $ 26 $ 31 Leased vehicle subvention earned (e) $ 765 $ 818 $ 1,570 $ 1,653 _________________ (a) Included in finance receivables, net. (b) Included in related party receivables. We received subvention payments from GM of $967 million and $949 million for the three months ended June 30, 2020 and 2019 and $2.0 billion for both the six months ended June 30, 2020 and 2019 . Loans receivable consist primarily of $903 million due from GM for subvention. (c) Included in related party payables. (d) Included in finance charge income. (e) Included as a reduction to leased vehicle expenses. |
Finance Receivables (Tables)
Finance Receivables (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract] | |
Finance Receivables, Net | June 30, 2020 December 31, 2019 Retail finance receivables Retail finance receivables, net of fees (a) $ 46,489 $ 42,268 Less: allowance for loan losses (2,044 ) (866 ) Total retail finance receivables, net 44,445 41,402 Commercial finance receivables Commercial finance receivables, net of fees (b) 7,884 12,149 Less: allowance for loan losses (67 ) (78 ) Total commercial finance receivables, net 7,817 12,071 Total finance receivables, net $ 52,262 $ 53,473 Fair value utilizing Level 2 inputs $ 7,817 $ 12,071 Fair value utilizing Level 3 inputs $ 46,619 $ 42,012 ________________ (a) Net of unearned income, unamortized premiums and discounts, and deferred fees and costs o f $218 million and $83 million at June 30, 2020 and December 31, 2019 . (b) Net of dealer cash management balances of $1.3 billion and $1.2 billion at June 30, 2020 and December 31, 2019 . |
Allowance for Credit Losses on Financing Receivables | A summary of the activity in the allowance for retail loan losses is as follows: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Allowance for retail loan losses beginning balance $ 1,879 $ 862 $ 866 $ 844 Impact of adopting ASU 2016-13 ( Note 1 ) — — 801 — Provision for loan losses 332 165 788 343 Charge-offs (256 ) (279 ) (596 ) (586 ) Recoveries 89 132 245 277 Foreign currency translation — 1 (60 ) 3 Allowance for retail loan losses ending balance $ 2,044 $ 881 $ 2,044 $ 881 |
Financing Receivable Credit Quality Indicators | 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 Origination 2020 2019 2018 2017 2016 2015 Prior Total Percent Prime - FICO Score 680 and greater $ 10,305 $ 9,019 $ 6,063 $ 2,774 $ 940 $ 253 $ 9 $ 29,363 63.2 % Near-prime - FICO Score 620 to 679 1,785 2,533 1,574 828 340 138 25 7,223 15.5 Sub-prime - FICO Score less than 620 1,917 3,178 1,982 1,440 833 396 157 9,903 21.3 Retail finance receivables, net of fees $ 14,007 $ 14,730 $ 9,619 $ 5,042 $ 2,113 $ 787 $ 191 $ 46,489 100.0 % Effective January 1, 2020, we updated our commercial risk model and our risk rating categories as follows: Dealer Risk Rating Description I Performing accounts with strong to acceptable financial metrics with at least satisfactory capacity to meet financial commitments. II Performing accounts experiencing potential weakness in financial metrics and repayment prospects resulting in increased monitoring. III Non-Performing accounts with inadequate paying capacity for current obligations and that have the distinct possibility of creating a loss if deficiencies are not corrected. IV Non-Performing accounts with inadequate paying capacity for current obligations and inherent weaknesses that make collection or liquidation in full highly questionable or improbable. June 30, 2020 . Year of Origination (a) Dealer Risk Rating Revolving 2020 2019 2018 2017 2016 2015 Prior Total Percent I $ 6,232 $ 170 $ 253 $ 100 $ 117 $ 127 $ 75 $ 8 $ 7,082 89.8 % II 408 1 7 12 33 4 13 22 500 6.3 III 247 — 8 29 2 10 1 — 297 3.8 IV 1 — — — — — 4 — 5 0.1 Balance at end of period $ 6,888 $ 171 $ 268 $ 141 $ 152 $ 141 $ 93 $ 30 $ 7,884 100.0 % ________________ (a) Floorplan advances comprise 97% of the total revolving balance. Dealer term loans are presented by year of origination. |
Past Due Financing Receivables | The following table is 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 Origination 2020 2019 2018 2017 2016 2015 Prior Total Percent Current $ 13,875 $ 14,244 $ 9,231 $ 4,752 $ 1,930 $ 689 $ 148 $ 44,869 96.5 % 31 - 60 days 86 295 236 181 114 61 25 998 2.2 Greater than 60 days 44 183 147 106 67 36 18 601 1.3 Finance receivables more than 30 days delinquent 130 478 383 287 181 97 43 1,599 3.5 In repossession 2 8 5 3 2 1 — 21 — Finance receivables more than 30 days delinquent or in repossession 132 486 388 290 183 98 43 1,620 3.5 Retail finance receivables, net of fees $ 14,007 $ 14,730 $ 9,619 $ 5,042 $ 2,113 $ 787 $ 191 $ 46,489 100.0 % |
Troubled Debt Restructurings on Financing Receivables | Additional TDR activity is presented below: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2018 2020 2019 2018 Number of loans classified as TDRs during the period 14,378 17,407 19,662 29,646 33,939 33,096 Outstanding amortized cost of loans classified as TDRs during the period $ 248 $ 318 $ 360 $ 535 $ 626 $ 613 |
Leased Vehicles (Tables)
Leased Vehicles (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Lessor Disclosure [Abstract] | |
Summary of Leased Vehicles | June 30, 2020 December 31, 2019 Leased vehicles $ 60,037 $ 62,767 Manufacturer subvention (9,358 ) (9,731 ) Net capitalized cost 50,679 53,036 Less: accumulated depreciation (11,078 ) (10,981 ) Leased vehicles, net $ 39,601 $ 42,055 |
Schedule of Future Minimum Rental Payments Receivable For Operating Leases | The following table summarizes minimum rental payments due to us as lessor under operating leases at June 30, 2020 : Years Ending December 31, 2020 2021 2022 2023 2024 Total Lease payments under operating leases $ 3,333 $ 4,961 $ 2,481 $ 435 $ 19 $ 11,229 |
Goodwill (Tables)
Goodwill (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following table summarizes the change in the carrying amounts of goodwill by segment: Six Months Ended June 30, 2020 2020 2019 North America International Total North America International Total Beginning balance $ 1,105 $ 80 $ 1,185 $ 1,105 $ 81 $ 1,186 Foreign currency translation — (18 ) (18 ) — 2 2 Ending balance $ 1,105 $ 62 $ 1,167 $ 1,105 $ 83 $ 1,188 |
Equity in Net Assets of Non-c_2
Equity in Net Assets of Non-consolidated Affiliates (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Noncontrolling Interest [Abstract] | |
Summarized Financial Data of Nonconsolidated Affiliates | The following table presents certain aggregated operating data of our joint ventures: Three Months Ended June 30, Six Months Ended June 30, Summarized Operating Data 2020 2019 2020 2019 Finance charge income $ 335 $ 344 $ 694 $ 694 Income before income taxes $ 158 $ 161 $ 254 $ 331 Net income $ 118 $ 121 $ 190 $ 248 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | June 30, 2020 December 31, 2019 Carrying Amount Fair Value Carrying Amount Fair Value Secured debt Revolving credit facilities $ 7,605 $ 7,608 $ 6,152 $ 6,160 Securitization notes payable 32,703 33,065 33,807 34,000 Total secured debt 40,308 40,673 39,959 40,160 Unsecured debt Senior notes 46,641 46,721 43,679 44,937 Credit facilities 1,857 1,846 1,936 1,936 Other unsecured debt 3,446 3,450 3,364 3,366 Total unsecured debt 51,944 52,017 48,979 50,239 Total secured and unsecured 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 |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Securitization and Credit Facility VIEs [Member] | |
Variable Interest Entity [Line Items] | |
Schedule of Variable Interest Entities | The following table summarizes the assets and liabilities related to our consolidated VIEs: June 30, 2020 December 31, 2019 Restricted cash (a) $ 2,670 $ 2,643 Finance receivables, net of fees $ 29,729 $ 35,392 Lease related assets $ 19,172 $ 14,464 Secured debt $ 40,206 $ 39,771 _______________ (a) Included in other assets. |
Derivative Financial Instrume_2
Derivative Financial Instruments and Hedging Activities (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments | The table below presents the gross fair value amounts of our derivative financial instruments and the associated notional amounts: June 30, 2020 December 31, 2019 Notional Fair Value of Assets (a) Fair Value of Liabilities (a) Notional Fair Value of Assets (a) Fair Value of Liabilities (a) Derivatives designated as hedges Fair value hedges Interest rate swaps $ 10,894 $ 609 $ — $ 9,458 $ 234 $ 23 Foreign currency swaps 1,797 26 68 1,796 22 71 Cash flow hedges Interest rate swaps 964 — 32 590 — 6 Foreign currency swaps 5,143 26 302 4,429 40 119 Derivatives not designated as hedges Interest rate contracts 112,403 1,045 807 92,400 340 300 Total (b) $ 131,201 $ 1,706 $ 1,209 $ 108,673 $ 636 $ 519 _________________ (a) The gross amounts of the fair value of our assets and liabilities are included in other assets and other liabilities, respectively. Amounts accrued for interest payments in a net receivable position are included in other assets. Amounts accrued for interest payments in a net payable position are included in other liabilities. All our derivatives are categorized within Level 2 of the fair value hierarchy. The fair value for Level 2 instruments was derived using the market approach based on observable market inputs including quoted prices of similar instruments and foreign exchange and interest rate forward curves. (b) We primarily enter into derivative instruments through AmeriCredit Financial Services, Inc. (AFSI); however, our SPEs may also be parties to derivative instruments. Agreements between AFSI and its derivative counterparties include rights of setoff for positions with offsetting values or for collateral held or posted. At June 30, 2020 and December 31, 2019 , the fair value of assets and liabilities available for offset was $701 million and $302 million . At June 30, 2020 and December 31, 2019 , we held $778 million and $210 million of collateral from counterparties that is available for netting against our asset positions. At June 30, 2020 and December 31, 2019 , we posted $274 million and $89 million of collateral to counterparties that is available for netting against our liability positions. |
Schedule of Fair Value Hedging Instruments, Statements of Financial Performance and Financial Position, Location | The following amounts were recorded in the condensed consolidated balance sheet related to items designated and qualifying as hedged items in fair value hedging relationships: Carrying Amount of Cumulative Amount of Fair Value (a) June 30, 2020 December 31, 2019 June 30, 2020 December 31, 2019 Unsecured debt $ 24,203 $ 20,397 $ (648 ) $ (77 ) _________________ (a) Includes $(111) million and $69 million at June 30, 2020 and December 31, 2019 of amortization remaining on hedged items for which hedge accounting has been discontinued. |
Effect of Derivative Instruments on the Condensed Consolidated Statements of Income | The tables below present the effect of our derivative financial instruments in the condensed consolidated statements of income: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Interest Expense (a) Operating Expenses (b) Interest Expense (a) Operating Expenses (b) Interest Expense (a) Operating Expenses (b) Interest Expense (a) Operating Expenses (b) Fair value hedges Hedged items - interest rate swaps $ (66 ) $ — $ (313 ) $ — $ (569 ) $ — $ (523 ) $ — Interest rate swaps (56 ) — 285 — 375 — 466 — Hedged items - foreign currency swaps — (41 ) — (25 ) — (1 ) — 7 Foreign currency swaps (9 ) 43 (15 ) 27 (21 ) 4 (31 ) (4 ) Cash flow hedges Interest rate swaps (2 ) — 1 — (3 ) — 4 — Foreign currency swaps (28 ) 113 (21 ) 18 (57 ) 7 (39 ) (15 ) Derivatives not designated as hedges Interest rate contracts 109 — (5 ) — 161 — (10 ) — Total (losses) income recognized $ (52 ) $ 115 $ (68 ) $ 20 $ (114 ) $ 10 $ (133 ) $ (12 ) _________________ (a) Total interest expense was $788 million and $952 million for the three months ended June 30, 2020 and 2019 and $1.6 billion and $1.9 billion for the six months ended June 30, 2020 and 2019 . (b) Activity is offset by translation activity also recorded in operating expenses related to foreign currency-denominated loans. Total operating expenses were $345 million and $377 million for the three months ended June 30, 2020 and 2019 and $703 million and $747 million for the six months ended June 30, 2020 and 2019 . The tables below present the effect of our derivative financial instruments in the condensed consolidated statements of comprehensive income: Gains (Losses) Recognized In Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Fair value hedges Foreign currency swaps $ (7 ) $ (9 ) $ (12 ) $ (20 ) Cash flow hedges Interest rate swaps (9 ) (2 ) (15 ) (2 ) Foreign currency swaps 39 (19 ) (180 ) (71 ) Total $ 23 $ (30 ) $ (207 ) $ (93 ) (Gains) Losses Reclassified From (a)(b) Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Fair value hedges Foreign currency swaps $ 5 $ 11 $ 13 $ 22 Cash flow hedges Interest rate swaps 1 (1 ) 2 (3 ) Foreign currency swaps (63 ) 2 41 41 Total $ (57 ) $ 12 $ 56 $ 60 _________________ (a) All amounts reclassified from accumulated other comprehensive loss were recorded to interest expense. (b) During the next twelve months, we estimate $88 million in losses will be reclassified into pretax earnings from derivatives designated for hedge accounting. |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Summary of Common and Preferred Stock | June 30, 2020 December 31, 2019 Common Stock Number of shares authorized 10,000,000 10,000,000 Number of shares issued and outstanding 5,050,000 5,050,000 During the six months ended June 30, 2020 , our Board of Directors declared and paid dividends of $800 million on our common stock to General Motors Holdings LLC. June 30, 2020 December 31, 2019 Preferred Stock Number of shares authorized 250,000,000 250,000,000 Number of shares issued and outstanding Fixed-to-Floating Rate Cumulative Perpetual Preferred Stock, Series A (Series A Preferred Stock) 1,000,000 1,000,000 Fixed-to-Floating Rate Cumulative Perpetual Preferred Stock, Series B (Series B Preferred Stock) 500,000 500,000 |
Schedule of Accumulated Other Comprehensive Loss | The following table summarizes the significant components of accumulated other comprehensive loss: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Unrealized loss on hedges Beginning balance $ (166 ) $ (6 ) $ (49 ) $ 9 Change in value of hedges, net of tax (34 ) (18 ) (151 ) (33 ) Ending balance (200 ) (24 ) (200 ) (24 ) Defined benefit plans Beginning balance 1 1 1 1 Unrealized gain on subsidiary pension, net of tax — — — — Ending balance 1 1 1 1 Foreign currency translation adjustment Beginning balance (1,497 ) (1,019 ) (1,071 ) (1,076 ) Translation gain (loss), net of tax 33 8 (393 ) 65 Ending balance (1,464 ) (1,011 ) (1,464 ) (1,011 ) Total accumulated other comprehensive loss $ (1,663 ) $ (1,034 ) $ (1,663 ) $ (1,034 ) |
Segment Reporting (Tables)
Segment Reporting (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Key operating data for our operating segments were as follows: Three Months Ended June 30, 2020 Three Months Ended June 30, 2019 North International Total North International Total Total revenue $ 3,197 $ 226 $ 3,423 $ 3,332 $ 307 $ 3,639 Operating expenses 273 72 345 281 96 377 Leased vehicle expenses 1,768 11 1,779 1,627 10 1,637 Provision for loan losses 244 83 327 142 37 179 Interest expense 710 78 788 831 121 952 Equity income — 42 42 — 42 42 Income before income taxes $ 202 $ 24 $ 226 $ 451 $ 85 $ 536 Six Months Ended June 30, 2020 Six Months Ended June 30, 2019 North International Total North International Total Total revenue $ 6,474 $ 510 $ 6,984 $ 6,638 $ 621 $ 7,259 Operating expenses 567 136 703 557 190 747 Leased vehicle expenses 3,452 24 3,476 3,430 21 3,451 Provision for loan losses 635 158 793 281 73 354 Interest expense 1,448 175 1,623 1,654 245 1,899 Equity income — 67 67 — 87 87 Income before income taxes $ 372 $ 84 $ 456 $ 716 $ 179 $ 895 June 30, 2020 December 31, 2019 North International Total North International Total Finance receivables, net $ 47,649 $ 4,613 $ 52,262 $ 46,679 $ 6,794 $ 53,473 Leased vehicles, net $ 39,467 $ 134 $ 39,601 $ 41,881 $ 174 $ 42,055 Total assets $ 103,521 $ 7,804 $ 111,325 $ 99,453 $ 9,764 $ 109,217 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Narrative (Details) $ in Millions | 6 Months Ended | ||||||
Jun. 30, 2020USD ($)segment | Mar. 31, 2020USD ($) | Jan. 01, 2020USD ($) | Dec. 31, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Accounting Policies [Abstract] | |||||||
Number of operating segments | segment | 2 | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201613Member | ||||||
Adoption of accounting standard (Note 1) | $ 11,053 | $ 11,316 | $ 12,726 | $ 12,385 | $ 11,984 | $ 11,659 | |
Cumulative Effect, Period of Adoption, Adjustment [Member] | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Adoption of accounting standard (Note 1) | (643) | ||||||
Allowance For Credit Losses [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member] | Accounting Standards Update 2016-13 [Member] | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Adoption of accounting standard (Note 1) | $ 801 | ||||||
Retained Earnings [Member] | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Adoption of accounting standard (Note 1) | $ 4,596 | $ 4,868 | 5,744 | $ 5,342 | $ 4,939 | $ 4,667 | |
Retained Earnings [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member] | Accounting Standards Update 2016-13 [Member] | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Adoption of accounting standard (Note 1) | $ (643) | $ (643) |
Related Party Transactions - Tr
Related Party Transactions - Transactions (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Commercial Finance Receivables [Member] | |||||
Related Party Transaction [Line Items] | |||||
Finance receivables, net due | $ 7,817 | $ 7,817 | $ 12,071 | ||
Retail Finance Receivables [Member] | |||||
Related Party Transaction [Line Items] | |||||
Finance receivables, net due | 44,445 | 44,445 | 41,402 | ||
Affiliated Entity [Member] | |||||
Related Party Transaction [Line Items] | |||||
Subvention receivable | 618 | 618 | 676 | ||
Loans receivable | 947 | 947 | 0 | ||
Leased vehicle subvention earned | 765 | $ 818 | 1,570 | $ 1,653 | |
Affiliated Entity [Member] | Commercial Finance Receivables [Member] | |||||
Related Party Transaction [Line Items] | |||||
Finance receivables, net due | 395 | 395 | 478 | ||
Commercial loan funding payable | 52 | 52 | 74 | ||
Interest subvention earned | 11 | 14 | 26 | 31 | |
Affiliated Entity [Member] | Retail Finance Receivables [Member] | |||||
Related Party Transaction [Line Items] | |||||
Finance receivables, net due | 17 | 17 | $ 39 | ||
Interest subvention earned | 151 | 133 | 292 | 264 | |
Parent Company [Member] | |||||
Related Party Transaction [Line Items] | |||||
Revenue from related parties | $ 967 | $ 949 | $ 2,000 | $ 2,000 |
Related Party Transactions - Na
Related Party Transactions - Narrative (Details) - USD ($) | 1 Months Ended | 6 Months Ended | |
Apr. 30, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | |
Related Party Transaction [Line Items] | |||
Long-term line of credit | $ 0 | ||
Junior Subordinated Revolving Credit Facility [Member] | General Motors [Member] | |||
Related Party Transaction [Line Items] | |||
Line of credit facilities - GM Related party facility | 1,000,000,000 | ||
Revolving Credit Facility [Member] | |||
Related Party Transaction [Line Items] | |||
Maximum borrowing capacity | $ 14,500,000,000 | ||
Line of Credit [Member] | |||
Related Party Transaction [Line Items] | |||
Debt instrument term | 4 years | ||
Line of Credit [Member] | Revolving Credit Facility [Member] | General Motors [Member] | |||
Related Party Transaction [Line Items] | |||
Maximum borrowing capacity | $ 14,500,000,000 | ||
Line of Credit [Member] | Revolving Credit Facility [Member] | Three Year Revolving Credit Facility [Member] | General Motors [Member] | |||
Related Party Transaction [Line Items] | |||
Maximum borrowing capacity | $ 4,000,000,000 | $ 4,000,000,000 | |
Debt instrument term | 3 years | 3 years | |
Long-term line of credit | $ 3,400,000,000 | ||
Line of Credit [Member] | Revolving Credit Facility [Member] | Five Year Revolving Credit Facility [Member] | General Motors [Member] | |||
Related Party Transaction [Line Items] | |||
Maximum borrowing capacity | $ 10,500,000,000 | ||
Debt instrument term | 5 years | 5 years | |
Line of Credit [Member] | Revolving Credit Facility [Member] | Three Hundred and Sixty-Four Day Revolving Credit Facilities [Member] | General Motors [Member] | |||
Related Party Transaction [Line Items] | |||
Maximum borrowing capacity | $ 2,000,000,000 | $ 2,000,000,000 | |
Debt instrument term | 364 days | 364 days | |
Line of Credit [Member] | Revolving Credit Facility [Member] | Three Year Revolving Credit Facility Expiring April 2022 [Member] | General Motors [Member] | |||
Related Party Transaction [Line Items] | |||
Maximum borrowing capacity | $ 3,600,000,000 | ||
Purchase of Retail Finance Receivables [Member] | Parent Company [Member] | |||
Related Party Transaction [Line Items] | |||
Related party purchases | $ 187,000,000 | $ 442,000,000 |
Finance Receivables - Narrative
Finance Receivables - Narrative (Details) - Retail Finance Receivables [Member] - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2019 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Accrual of finance charge income | $ 907 | $ 907 | $ 875 | ||||
Troubled debt restructurings | 2,300 | 2,300 | |||||
Nonaccrual loans | 320 | 320 | |||||
Unpaid principal balances, net of recoveries | $ 17 | $ 16 | $ 17 | $ 30 | $ 28 | $ 28 |
Finance Receivables - Finance R
Finance Receivables - Finance Receivables, net (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Finance receivables, net | $ 52,262 | $ 53,473 | ||||
Level 2 [Member] | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Fair value utilizing inputs | 7,817 | 12,071 | ||||
Level 3 [Member] | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Fair value utilizing inputs | 46,619 | 42,012 | ||||
Retail Finance Receivables [Member] | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Finance receivables, net of fees | 46,489 | 42,268 | ||||
Less: allowance for loan losses | (2,044) | $ (1,879) | (866) | $ (881) | $ (862) | $ (844) |
Total finance receivables, net | 44,445 | 41,402 | ||||
Deferred income | 218 | 83 | ||||
Commercial Finance Receivables [Member] | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Finance receivables, net of fees | 7,884 | 12,149 | ||||
Less: allowance for loan losses | (67) | (78) | ||||
Total finance receivables, net | 7,817 | 12,071 | ||||
Dealer cash management balances | $ 1,300 | $ 1,200 |
Finance Receivables - Allowance
Finance Receivables - Allowance for Loan Losses (Details) - Retail Finance Receivables [Member] - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Allowance for retail loan losses beginning balance | $ 1,879 | $ 862 | $ 866 | $ 844 |
Provision for loan losses | 332 | 165 | 788 | 343 |
Charge-offs | (256) | (279) | (596) | (586) |
Recoveries | 89 | 132 | 245 | 277 |
Foreign currency translation | 0 | 1 | (60) | 3 |
Allowance for retail loan losses ending balance | $ 2,044 | $ 881 | 2,044 | $ 881 |
Cumulative Effect, Period of Adoption, Adjustment [Member] | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Allowance for retail loan losses beginning balance | $ 801 |
Finance Receivables - Credit Ri
Finance Receivables - Credit Risk Profile by FICO Score (Details) - Retail Finance Receivables [Member] - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | $ 14,007 | |
2019 | 14,730 | |
2018 | 9,619 | |
2017 | 5,042 | |
2016 | 2,113 | |
2015 | 787 | |
Prior | 191 | |
Total | $ 46,489 | $ 42,268 |
Percent of portfolio | 100.00% | |
Prime - FICO Score 680 and greater [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | $ 10,305 | |
2019 | 9,019 | |
2018 | 6,063 | |
2017 | 2,774 | |
2016 | 940 | |
2015 | 253 | |
Prior | 9 | |
Total | $ 29,363 | |
Percent of portfolio | 63.20% | |
Near-prime - FICO Score 620 to 679 [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | $ 1,785 | |
2019 | 2,533 | |
2018 | 1,574 | |
2017 | 828 | |
2016 | 340 | |
2015 | 138 | |
Prior | 25 | |
Total | $ 7,223 | |
Percent of portfolio | 15.50% | |
Sub-prime - FICO Score less than 620 [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | $ 1,917 | |
2019 | 3,178 | |
2018 | 1,982 | |
2017 | 1,440 | |
2016 | 833 | |
2015 | 396 | |
Prior | 157 | |
Total | $ 9,903 | |
Percent of portfolio | 21.30% |
Finance Receivables - Delinquen
Finance Receivables - Delinquency (Details) - Retail Finance Receivables [Member] - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Financing Receivable, Past Due [Line Items] | ||
2020 | $ 14,007 | |
2019 | 14,730 | |
2018 | 9,619 | |
2017 | 5,042 | |
2016 | 2,113 | |
2015 | 787 | |
Prior | 191 | |
Total | $ 46,489 | $ 42,268 |
Percent of portfolio | 100.00% | |
Total | 100.00% | |
Performing Financial Instruments [Member] | Not Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
2020 | $ 13,875 | |
2019 | 14,244 | |
2018 | 9,231 | |
2017 | 4,752 | |
2016 | 1,930 | |
2015 | 689 | |
Prior | 148 | |
Current, Total | $ 44,869 | |
Percent of portfolio | 96.50% | |
Nonperforming Financial Instruments [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
2020 | $ 132 | |
2019 | 486 | |
2018 | 388 | |
2017 | 290 | |
2016 | 183 | |
2015 | 98 | |
Prior | 43 | |
Financing receivable past due | $ 1,620 | |
Financing receivable past due (percent) | 3.50% | |
Nonperforming Financial Instruments [Member] | 31 to 60 Days [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
2020 | $ 86 | |
2019 | 295 | |
2018 | 236 | |
2017 | 181 | |
2016 | 114 | |
2015 | 61 | |
Prior | 25 | |
Financing receivable past due | $ 998 | |
Financing receivable past due (percent) | 2.20% | |
Nonperforming Financial Instruments [Member] | Greater Than 60 Days [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
2020 | $ 44 | |
2019 | 183 | |
2018 | 147 | |
2017 | 106 | |
2016 | 67 | |
2015 | 36 | |
Prior | 18 | |
Financing receivable past due | $ 601 | |
Financing receivable past due (percent) | 1.30% | |
Nonperforming Financial Instruments [Member] | Financing Receivables, Greater than 30 Days Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
2020 | $ 130 | |
2019 | 478 | |
2018 | 383 | |
2017 | 287 | |
2016 | 181 | |
2015 | 97 | |
Prior | 43 | |
Financing receivable past due | $ 1,599 | |
Financing receivable past due (percent) | 3.50% | |
Nonperforming Financial Instruments [Member] | Financing Receivables, In Repossession [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
2020 | $ 2 | |
2019 | 8 | |
2018 | 5 | |
2017 | 3 | |
2016 | 2 | |
2015 | 1 | |
Prior | 0 | |
Financing receivable past due | $ 21 | |
Financing receivable past due (percent) | 0.00% |
Finance Receivables - Troubled
Finance Receivables - Troubled Debt Restructurings (Details) - Retail Finance Receivables [Member] $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2020USD ($)loan | Jun. 30, 2019USD ($)loan | Jun. 30, 2018USD ($)loan | Jun. 30, 2020USD ($)loan | Jun. 30, 2019USD ($)loan | Jun. 30, 2018USD ($)loan | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Number of loans classified as TDRs during the period | loan | 14,378 | 17,407 | 19,662 | 29,646 | 33,939 | 33,096 |
Outstanding amortized cost of loans classified as TDRs during the period | $ | $ 248 | $ 318 | $ 360 | $ 535 | $ 626 | $ 613 |
Finance Receivables - Credit _2
Finance Receivables - Credit Risk Profile by Dealer (Details) - Commercial Finance Receivables [Member] - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Revolving | $ 6,888 | |
2020 | 171 | |
2019 | 268 | |
2018 | 141 | |
2017 | 152 | |
2016 | 141 | |
2015 | 93 | |
Prior | 30 | |
Total | $ 7,884 | $ 12,149 |
Percent of portfolio | 100.00% | |
Floorplan Advances [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Percent of revolving balance | 97.00% | |
Group I - Performing accounts with strong to acceptable financial metrics [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Revolving | $ 6,232 | |
2020 | 170 | |
2019 | 253 | |
2018 | 100 | |
2017 | 117 | |
2016 | 127 | |
2015 | 75 | |
Prior | 8 | |
Total | $ 7,082 | |
Percent of portfolio | 89.80% | |
Group II - Performing accounts experiencing potential weakness in financial metrics [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Revolving | $ 408 | |
2020 | 1 | |
2019 | 7 | |
2018 | 12 | |
2017 | 33 | |
2016 | 4 | |
2015 | 13 | |
Prior | 22 | |
Total | $ 500 | |
Percent of portfolio | 6.30% | |
Group III - Non-Performing accounts with inadequate paying capacity for current obligations [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Revolving | $ 247 | |
2020 | 0 | |
2019 | 8 | |
2018 | 29 | |
2017 | 2 | |
2016 | 10 | |
2015 | 1 | |
Prior | 0 | |
Total | $ 297 | |
Percent of portfolio | 3.80% | |
Group IV - Non-Performing accounts with inadequate paying capacity for current obligations and inherent weaknesses [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Revolving | $ 1 | |
2020 | 0 | |
2019 | 0 | |
2018 | 0 | |
2017 | 0 | |
2016 | 0 | |
2015 | 4 | |
Prior | 0 | |
Total | $ 5 | |
Percent of portfolio | 0.10% |
Leased Vehicles - Summary of Le
Leased Vehicles - Summary of Leased Vehicles (Details) - Assets Leased to Others [Member] - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Lessor, Lease, Description [Line Items] | ||
Leased vehicles | $ 60,037 | $ 62,767 |
Manufacturer subvention | (9,358) | (9,731) |
Net capitalized cost | 50,679 | 53,036 |
Less: accumulated depreciation | (11,078) | (10,981) |
Leased vehicles, net | $ 39,601 | $ 42,055 |
Leased Vehicles - Minimum Renta
Leased Vehicles - Minimum Rental Payments (Details) $ in Millions | Jun. 30, 2020USD ($) |
Operating Leases, Future Minimum Payments Receivable [Abstract] | |
2020 | $ 3,333 |
2021 | 4,961 |
2022 | 2,481 |
2023 | 435 |
2024 | 19 |
Total | $ 11,229 |
Goodwill (Details)
Goodwill (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Goodwill [Roll Forward] | ||
Balance at beginning of period | $ 1,185 | $ 1,186 |
Foreign currency translation | (18) | 2 |
Balance at end of period | 1,167 | 1,188 |
North America Segment [Member] | ||
Goodwill [Roll Forward] | ||
Balance at beginning of period | 1,105 | 1,105 |
Foreign currency translation | 0 | 0 |
Balance at end of period | 1,105 | 1,105 |
International Segment [Member] | ||
Goodwill [Roll Forward] | ||
Balance at beginning of period | 80 | 81 |
Foreign currency translation | (18) | 2 |
Balance at end of period | $ 62 | $ 83 |
Equity in Net Assets of Non-c_3
Equity in Net Assets of Non-consolidated Affiliates (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Noncontrolling Interest [Line Items] | |||||
Finance charge income | $ 966 | $ 1,008 | $ 1,972 | $ 1,995 | |
Income before income taxes | 226 | 536 | 456 | 895 | |
Net income | 42 | 42 | 67 | 87 | |
Joint Ventures [Member] | |||||
Noncontrolling Interest [Line Items] | |||||
Finance charge income | 335 | 344 | 694 | 694 | |
Income before income taxes | 158 | 161 | 254 | 331 | |
Net income | 118 | $ 121 | 190 | $ 248 | |
Undistributed earnings | $ 666 | $ 666 | $ 615 |
Restricted Cash (Details)
Restricted Cash (Details) $ in Millions | Jun. 30, 2020USD ($) |
Restricted Cash and Cash Equivalents Items [Line Items] | |
Restricted cash included in other assets | $ 4,342 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Renewed borrowing capacity | $ 14,500,000,000 | |
Secured Debt [Member] | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 2.42% | |
Debt issuance costs | $ 84,000,000 | $ 75,000,000 |
Secured Debt [Member] | Securitization Notes Payable with Maturity Dates from 2021 to 2027 [Member] | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 1.71% | |
Debt instrument, face amount | $ 9,000,000,000 | |
Unsecured Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 3.38% | |
Debt instrument, face amount | $ 46,100,000,000 | |
Unsecured Senior Notes [Member] | Senior Notes with Maturity Dates from 2024 to 2028 [Member] | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 3.41% | |
Debt instrument, face amount | $ 5,900,000,000 | |
Unsecured Debt [Member] | ||
Debt Instrument [Line Items] | ||
Debt issuance costs | $ 115,000,000 | $ 109,000,000 |
Line of Credit [Member] | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 3.15% | |
Debt instrument term | 4 years | |
Maximum [Member] | Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Expiration period | 6 years |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Short Term and Long Term Debt [Line Items] | ||
Secured debt | $ 40,308 | $ 39,959 |
Unsecured debt | 51,944 | 48,979 |
Total secured and unsecured debt | 92,252 | 88,938 |
Secured debt fair value | 40,673 | 40,160 |
Unsecured debt fair value | 52,017 | 50,239 |
Fair value of Secured and Unsecured debt | 92,690 | 90,399 |
Level 2 [Member] | ||
Short Term and Long Term Debt [Line Items] | ||
Fair value of Secured and Unsecured debt | 91,237 | 88,481 |
Level 3 [Member] | ||
Short Term and Long Term Debt [Line Items] | ||
Fair value of Secured and Unsecured debt | 1,453 | 1,918 |
Revolving Credit Facility [Member] | ||
Short Term and Long Term Debt [Line Items] | ||
Secured debt | 7,605 | 6,152 |
Unsecured debt | 1,857 | 1,936 |
Secured debt fair value | 7,608 | 6,160 |
Unsecured debt fair value | 1,846 | 1,936 |
Securitization Notes Payable [Member] | ||
Short Term and Long Term Debt [Line Items] | ||
Secured debt | 32,703 | 33,807 |
Secured debt fair value | 33,065 | 34,000 |
Senior Notes [Member] | ||
Short Term and Long Term Debt [Line Items] | ||
Unsecured debt | 46,641 | 43,679 |
Unsecured debt fair value | 46,721 | 44,937 |
Other Unsecured Debt [Member] | ||
Short Term and Long Term Debt [Line Items] | ||
Unsecured debt | 3,446 | 3,364 |
Unsecured debt fair value | $ 3,450 | $ 3,366 |
Variable Interest Entities (Det
Variable Interest Entities (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Variable Interest Entity [Line Items] | ||
Restricted cash | $ 4,342 | |
Finance receivables, net of fees | 52,262 | $ 53,473 |
Secured debt | 40,308 | 39,959 |
Securitization and Credit Facility VIEs [Member] | ||
Variable Interest Entity [Line Items] | ||
Restricted cash | 2,670 | 2,643 |
Finance receivables, net of fees | 29,729 | 35,392 |
Secured debt | 40,206 | 39,771 |
Assets Leased to Others [Member] | ||
Variable Interest Entity [Line Items] | ||
Lease related assets | 39,601 | 42,055 |
Assets Leased to Others [Member] | Securitization and Credit Facility VIEs [Member] | ||
Variable Interest Entity [Line Items] | ||
Lease related assets | $ 19,172 | $ 14,464 |
Derivative Financial Instrume_3
Derivative Financial Instruments and Hedging Activities - Fair Value (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Derivatives, Fair Value [Line Items] | ||
Fair value of assets (liabilities) available for offset | $ 701 | $ 302 |
Other Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, Notional amount | 131,201 | 108,673 |
Derivative asset, Fair value | 1,706 | 636 |
Collateral available for netting against liability positions | 274 | 89 |
Other Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, Fair value | 1,209 | 519 |
Cash held for netting against asset positions | 778 | 210 |
Designated as Hedging Instrument [Member] | Fair Value Hedging [Member] | Other Assets [Member] | Interest Rate Swaps [Member] | Level 2 [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, Notional amount | 10,894 | 9,458 |
Derivative asset, Fair value | 609 | 234 |
Designated as Hedging Instrument [Member] | Fair Value Hedging [Member] | Other Assets [Member] | Foreign Currency Swaps [Member] | Level 2 [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, Notional amount | 1,797 | 1,796 |
Derivative asset, Fair value | 26 | 22 |
Designated as Hedging Instrument [Member] | Fair Value Hedging [Member] | Other Liabilities [Member] | Interest Rate Swaps [Member] | Level 2 [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, Fair value | 0 | 23 |
Designated as Hedging Instrument [Member] | Fair Value Hedging [Member] | Other Liabilities [Member] | Foreign Currency Swaps [Member] | Level 2 [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, Fair value | 68 | 71 |
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Other Assets [Member] | Interest Rate Swaps [Member] | Level 2 [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, Notional amount | 964 | 590 |
Derivative asset, Fair value | 0 | 0 |
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Other Assets [Member] | Foreign Currency Swaps [Member] | Level 2 [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, Notional amount | 5,143 | 4,429 |
Derivative asset, Fair value | 26 | 40 |
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Other Liabilities [Member] | Interest Rate Swaps [Member] | Level 2 [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, Fair value | 32 | 6 |
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Other Liabilities [Member] | Foreign Currency Swaps [Member] | Level 2 [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, Fair value | 302 | 119 |
Not Designated as Hedging Instrument [Member] | Other Assets [Member] | Interest Rate Contracts [Member] | Level 2 [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, Notional amount | 112,403 | 92,400 |
Derivative asset, Fair value | 1,045 | 340 |
Not Designated as Hedging Instrument [Member] | Other Liabilities [Member] | Interest Rate Contracts [Member] | Level 2 [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, Fair value | $ 807 | $ 300 |
Derivative Financial Instrume_4
Derivative Financial Instruments and Hedging Activities - Balance Sheet (Details) - Designated as Hedging Instrument [Member] - Fair Value Hedging [Member] - Unsecured Debt [Member] - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Derivatives, Fair Value [Line Items] | ||
Carrying Amount of Hedged Items | $ 24,203 | $ 20,397 |
Cumulative Amount of Fair Value Hedging Adjustments | (648) | (77) |
Discontinued hedge cumulative amount of fair value hedging adjustments | $ (111) | $ 69 |
Derivative Financial Instrume_5
Derivative Financial Instruments and Hedging Activities - Income (Losses) Recognized in Income (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Derivatives, Fair Value [Line Items] | ||||
Interest expense | $ 788 | $ 952 | $ 1,623 | $ 1,899 |
Operating expenses | 345 | 377 | 703 | 747 |
AOCI Attributable to Parent [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Gains (Losses) Recognized In Accumulated Other Comprehensive Loss | 23 | (30) | (207) | (93) |
(Gains) Losses Reclassified From Accumulated Other Comprehensive Income | (57) | 12 | 56 | 60 |
Fair Value Hedging [Member] | Foreign Currency Translation Adjustment [Member] | Foreign Currency Swaps [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Gains (Losses) Recognized In Accumulated Other Comprehensive Loss | (7) | (9) | (12) | (20) |
(Gains) Losses Reclassified From Accumulated Other Comprehensive Income | 5 | 11 | 13 | 22 |
Cash Flow Hedging [Member] | Foreign Currency Translation Adjustment [Member] | Foreign Currency Swaps [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Gains (Losses) Recognized In Accumulated Other Comprehensive Loss | 39 | (19) | (180) | (71) |
(Gains) Losses Reclassified From Accumulated Other Comprehensive Income | (63) | 2 | 41 | 41 |
Cash Flow Hedging [Member] | Unrealized (Loss) Gain on Hedges [Member] | Interest Rate Swaps [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Gains (Losses) Recognized In Accumulated Other Comprehensive Loss | (9) | (2) | (15) | (2) |
(Gains) Losses Reclassified From Accumulated Other Comprehensive Income | 1 | (1) | 2 | (3) |
Interest Expense [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Total | (52) | (68) | (114) | (133) |
Operating Expense [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Total | 115 | 20 | 10 | (12) |
Designated as Hedging Instrument [Member] | Foreign Currency Translation Adjustment [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Gain (loss) to be reclassified in next twelve months | (88) | |||
Designated as Hedging Instrument [Member] | Interest Expense [Member] | Fair Value Hedging [Member] | Interest Rate Swaps [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Hedged items | (66) | (313) | (569) | (523) |
Interest rate swaps and Foreign currency swaps | (56) | 285 | 375 | 466 |
Designated as Hedging Instrument [Member] | Interest Expense [Member] | Fair Value Hedging [Member] | Foreign Currency Swaps [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Hedged items | 0 | 0 | 0 | 0 |
Interest rate swaps and Foreign currency swaps | (9) | (15) | (21) | (31) |
Designated as Hedging Instrument [Member] | Interest Expense [Member] | Cash Flow Hedging [Member] | Interest Rate Swaps [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Interest rate swaps and Foreign currency swaps | (2) | 1 | (3) | 4 |
Designated as Hedging Instrument [Member] | Interest Expense [Member] | Cash Flow Hedging [Member] | Foreign Currency Swaps [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Interest rate swaps and Foreign currency swaps | (28) | (21) | (57) | (39) |
Designated as Hedging Instrument [Member] | Operating Expense [Member] | Fair Value Hedging [Member] | Interest Rate Swaps [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Hedged items | 0 | 0 | 0 | 0 |
Interest rate swaps and Foreign currency swaps | 0 | 0 | 0 | 0 |
Designated as Hedging Instrument [Member] | Operating Expense [Member] | Fair Value Hedging [Member] | Foreign Currency Swaps [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Hedged items | (41) | (25) | (1) | 7 |
Interest rate swaps and Foreign currency swaps | 43 | 27 | 4 | (4) |
Designated as Hedging Instrument [Member] | Operating Expense [Member] | Cash Flow Hedging [Member] | Interest Rate Swaps [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Interest rate swaps and Foreign currency swaps | 0 | 0 | 0 | 0 |
Designated as Hedging Instrument [Member] | Operating Expense [Member] | Cash Flow Hedging [Member] | Foreign Currency Swaps [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Interest rate swaps and Foreign currency swaps | 113 | 18 | 7 | (15) |
Not Designated as Hedging Instrument [Member] | Interest Expense [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Interest rate contracts | 109 | (5) | 161 | (10) |
Not Designated as Hedging Instrument [Member] | Operating Expense [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Interest rate contracts | $ 0 | $ 0 | $ 0 | $ 0 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Jun. 30, 2020USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Estimate of possible loss | $ 40 |
Loss accrual | 14 |
Indirect tax contingency | $ 11 |
Shareholders' Equity - Narrativ
Shareholders' Equity - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | Jun. 22, 2020 | Jun. 30, 2020 | Jun. 30, 2020 | Jun. 30, 2019 |
Class of Stock [Line Items] | ||||
Common stock dividends | $ 800 | |||
Dividends declared on preferred stock (Note 11) | $ 45 | |||
Amount set aside for dividend payments | $ 45 | |||
Series A Preferred Stock [Member] | ||||
Class of Stock [Line Items] | ||||
Dividends declared on preferred stock (Note 11) | $ 29 | 29 | $ 29 | |
Preferred stock dividends paid (in dollars per share) | $ 28.75 | |||
Series B Preferred Stock [Member] | ||||
Class of Stock [Line Items] | ||||
Dividends declared on preferred stock (Note 11) | $ 16 | $ 16 | $ 17 | |
Preferred stock dividends paid (in dollars per share) | $ 32.50 |
Shareholders' Equity - Summary
Shareholders' Equity - Summary of Common and Preferred Stock (Details) - shares | Jun. 30, 2020 | Dec. 31, 2019 |
Class of Stock [Line Items] | ||
Common stock shares authorized | 10,000,000 | 10,000,000 |
Common stock shares issued | 5,050,000 | 5,050,000 |
Common stock shares outstanding | 5,050,000 | 5,050,000 |
Preferred stock shares authorized | 250,000,000 | 250,000,000 |
Fixed-to-Floating Rate Cumulative Preferred Stock Series A [Member] | ||
Class of Stock [Line Items] | ||
Preferred stock shares issued | 1,000,000 | 1,000,000 |
Preferred stock shares outstanding | 1,000,000 | 1,000,000 |
Fixed-to-Floating Rate Cumulative Perpetual Preferred Stock, Series B [Member] | ||
Class of Stock [Line Items] | ||
Preferred stock shares issued | 500,000 | 500,000 |
Preferred stock shares outstanding | 500,000 | 500,000 |
Shareholders' Equity - Accumula
Shareholders' Equity - Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Changes in Accumulated Other Comprehensive Income [Roll Forward] | ||||
Balance at beginning of period | $ 11,316 | $ 11,984 | $ 12,726 | $ 11,659 |
Balance at end of period | 11,053 | 12,385 | 11,053 | 12,385 |
AOCI Attributable to Parent [Member] | ||||
Changes in Accumulated Other Comprehensive Income [Roll Forward] | ||||
Balance at beginning of period | (1,662) | (1,024) | (1,119) | (1,066) |
Balance at end of period | (1,663) | (1,034) | (1,663) | (1,034) |
Unrealized (Loss) Gain on Hedges [Member] | ||||
Changes in Accumulated Other Comprehensive Income [Roll Forward] | ||||
Balance at beginning of period | (166) | (6) | (49) | 9 |
Other comprehensive (loss) income, net of tax | (34) | (18) | (151) | (33) |
Balance at end of period | (200) | (24) | (200) | (24) |
Defined Benefit Plans [Member] | ||||
Changes in Accumulated Other Comprehensive Income [Roll Forward] | ||||
Balance at beginning of period | 1 | 1 | 1 | 1 |
Other comprehensive (loss) income, net of tax | 0 | 0 | 0 | 0 |
Balance at end of period | 1 | 1 | 1 | 1 |
Foreign Currency Translation Adjustment [Member] | ||||
Changes in Accumulated Other Comprehensive Income [Roll Forward] | ||||
Balance at beginning of period | (1,497) | (1,019) | (1,071) | (1,076) |
Other comprehensive (loss) income, net of tax | 33 | 8 | (393) | 65 |
Balance at end of period | $ (1,464) | $ (1,011) | $ (1,464) | $ (1,011) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Income tax (benefit) provision | $ 53 | $ 133 | $ 116 | $ 221 |
Segment Reporting - Revenue (De
Segment Reporting - Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Segment Reporting Information [Line Items] | ||||
Total revenue | $ 3,423 | $ 3,639 | $ 6,984 | $ 7,259 |
Operating expenses | 345 | 377 | 703 | 747 |
Leased vehicle expenses | 1,779 | 1,637 | 3,476 | 3,451 |
Provision for loan losses | 327 | 179 | 793 | 354 |
Interest expense | 788 | 952 | 1,623 | 1,899 |
Equity income | 42 | 42 | 67 | 87 |
Income before income taxes | 226 | 536 | 456 | 895 |
North America Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 3,197 | 3,332 | 6,474 | 6,638 |
Operating expenses | 273 | 281 | 567 | 557 |
Leased vehicle expenses | 1,768 | 1,627 | 3,452 | 3,430 |
Provision for loan losses | 244 | 142 | 635 | 281 |
Interest expense | 710 | 831 | 1,448 | 1,654 |
Equity income | 0 | 0 | 0 | 0 |
Income before income taxes | 202 | 451 | 372 | 716 |
International Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 226 | 307 | 510 | 621 |
Operating expenses | 72 | 96 | 136 | 190 |
Leased vehicle expenses | 11 | 10 | 24 | 21 |
Provision for loan losses | 83 | 37 | 158 | 73 |
Interest expense | 78 | 121 | 175 | 245 |
Equity income | 42 | 42 | 67 | 87 |
Income before income taxes | $ 24 | $ 85 | $ 84 | $ 179 |
Segment Reporting - Assets (Det
Segment Reporting - Assets (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Segment Reporting Information [Line Items] | ||
Finance receivables, net | $ 52,262 | $ 53,473 |
Total assets | 111,325 | 109,217 |
North America Segment [Member] | ||
Segment Reporting Information [Line Items] | ||
Finance receivables, net | 47,649 | 46,679 |
Total assets | 103,521 | 99,453 |
International Segment [Member] | ||
Segment Reporting Information [Line Items] | ||
Finance receivables, net | 4,613 | 6,794 |
Total assets | 7,804 | 9,764 |
Assets Leased to Others [Member] | ||
Segment Reporting Information [Line Items] | ||
Leased vehicles, net (Note 4; Note 8 VIEs) | 39,601 | 42,055 |
Assets Leased to Others [Member] | North America Segment [Member] | ||
Segment Reporting Information [Line Items] | ||
Leased vehicles, net (Note 4; Note 8 VIEs) | 39,467 | 41,881 |
Assets Leased to Others [Member] | International Segment [Member] | ||
Segment Reporting Information [Line Items] | ||
Leased vehicles, net (Note 4; Note 8 VIEs) | $ 134 | $ 174 |
Regulatory Capital and Other _2
Regulatory Capital and Other Regulatory Matters (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Capital Requirements on Foreign Financial Institutions [Line Items] | ||
Assets | $ 111,325 | $ 109,217 |
International Regulated Bank And Finance Companies [Member] | ||
Capital Requirements on Foreign Financial Institutions [Line Items] | ||
Assets | $ 5,900 | $ 7,800 |