ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
State of Texas | 75-2291093 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Large accelerated filer | o | Accelerated filer | o | Non-accelerated filer | ý | Smaller reporting company | o | Emerging growth company | o |
Page | ||
March 31, 2019 | December 31, 2018 | ||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 5,286 | $ | 4,883 | |||
53,229 | 52,512 | ||||||
43,052 | 43,559 | ||||||
Goodwill | 1,187 | 1,186 | |||||
Equity in net assets of non-consolidated affiliates (Note 5) | 1,429 | 1,355 | |||||
Related party receivables (Note 2) | 640 | 729 | |||||
Other assets (Note 7 VIEs) | 6,422 | 5,696 | |||||
Total assets | $ | 111,245 | $ | 109,920 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
Liabilities | |||||||
$ | 41,625 | $ | 42,835 | ||||
Unsecured debt (Note 6) | 50,506 | 48,153 | |||||
Deferred income | 3,633 | 3,605 | |||||
Related party payables (Note 2) | 66 | 63 | |||||
Other liabilities | 3,431 | 3,605 | |||||
Total liabilities | 99,261 | 98,261 | |||||
Commitments and contingencies (Note 9) | |||||||
Shareholders' equity (Note 10) | |||||||
Common stock, $0.0001 par value per share | — | — | |||||
Preferred stock, $0.01 par value per share | — | — | |||||
Additional paid-in capital | 8,069 | 8,058 | |||||
Accumulated other comprehensive loss | (1,024 | ) | (1,066 | ) | |||
Retained earnings | 4,939 | 4,667 | |||||
Total shareholders' equity | 11,984 | 11,659 | |||||
Total liabilities and shareholders' equity | $ | 111,245 | $ | 109,920 |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Revenue | |||||||
Finance charge income | $ | 987 | $ | 866 | |||
Leased vehicle income | 2,509 | 2,447 | |||||
Other income | 124 | 98 | |||||
Total revenue | 3,620 | 3,411 | |||||
Costs and expenses | |||||||
Operating expenses | 370 | 365 | |||||
Leased vehicle expenses | 1,814 | 1,787 | |||||
Provision for loan losses (Note 3) | 175 | 136 | |||||
Interest expense | 947 | 732 | |||||
Total costs and expenses | 3,306 | 3,020 | |||||
Equity income (Note 5) | 45 | 52 | |||||
Income before income taxes | 359 | 443 | |||||
Income tax provision (Note 11) | 88 | 74 | |||||
Net income | 271 | 369 | |||||
Less: cumulative dividends on preferred stock | 23 | 14 | |||||
Net income attributable to common shareholder | $ | 248 | $ | 355 |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Net income | $ | 271 | $ | 369 | |||
Other comprehensive income, net of tax (Note 10) | |||||||
Unrealized (loss) gain on hedges, net of income tax (benefit) expense of $(5) and $1 | (15 | ) | 1 | ||||
Foreign currency translation adjustment, net of income tax expense (benefit) of $0 and $(1) | 57 | 59 | |||||
Other comprehensive income, net of tax | 42 | 60 | |||||
Comprehensive income | $ | 313 | $ | 429 |
Common Stock | Preferred Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Total Equity | ||||||||||||||||||
Balance at January 1, 2018 | $ | — | $ | — | $ | 7,525 | $ | (768 | ) | $ | 3,537 | $ | 10,294 | ||||||||||
Adoption of accounting standards | — | — | — | — | 40 | 40 | |||||||||||||||||
Net income | — | — | — | — | 369 | 369 | |||||||||||||||||
Other comprehensive income | — | — | — | 60 | — | 60 | |||||||||||||||||
Stock based compensation | — | — | 16 | — | — | 16 | |||||||||||||||||
Dividends paid | — | — | — | — | (30 | ) | (30 | ) | |||||||||||||||
Other | — | — | — | — | (1 | ) | (1 | ) | |||||||||||||||
Balance at March 31, 2018 | $ | — | $ | — | $ | 7,541 | $ | (708 | ) | $ | 3,915 | $ | 10,748 | ||||||||||
Balance at January 1, 2019 | $ | — | $ | — | $ | 8,058 | $ | (1,066 | ) | $ | 4,667 | $ | 11,659 | ||||||||||
Net income | — | — | — | — | 271 | 271 | |||||||||||||||||
Other comprehensive income | — | — | — | 42 | — | 42 | |||||||||||||||||
Stock based compensation | — | — | 11 | — | — | 11 | |||||||||||||||||
Other | — | — | — | — | 1 | 1 | |||||||||||||||||
Balance at March 31, 2019 | $ | — | $ | — | $ | 8,069 | $ | (1,024 | ) | $ | 4,939 | $ | 11,984 |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Cash flows from operating activities | |||||||
Net cash provided by operating activities | $ | 2,143 | $ | 1,669 | |||
Cash flows from investing activities | |||||||
Purchases of retail finance receivables, net | (7,222 | ) | (5,073 | ) | |||
Principal collections and recoveries on retail finance receivables | 5,990 | 3,576 | |||||
Net collections of commercial finance receivables | 380 | 32 | |||||
Purchases of leased vehicles, net | (3,747 | ) | (4,496 | ) | |||
Proceeds from termination of leased vehicles | 3,059 | 2,379 | |||||
Other investing activities | (16 | ) | (20 | ) | |||
Net cash used in investing activities | (1,556 | ) | (3,602 | ) | |||
Cash flows from financing activities | |||||||
Net change in debt (original maturities less than three months) | 479 | 23 | |||||
Borrowings and issuances of secured debt | 6,530 | 5,602 | |||||
Payments on secured debt | (7,789 | ) | (6,166 | ) | |||
Borrowings and issuances of unsecured debt | 4,544 | 3,861 | |||||
Payments on unsecured debt | (2,893 | ) | (486 | ) | |||
Debt issuance costs | (34 | ) | (40 | ) | |||
Dividends paid | (46 | ) | (30 | ) | |||
Net cash provided by financing activities | 791 | 2,764 | |||||
Net increase in cash, cash equivalents and restricted cash | 1,378 | 831 | |||||
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash | 8 | 8 | |||||
Cash, cash equivalents and restricted cash at beginning of period | 7,443 | 6,567 | |||||
Cash, cash equivalents and restricted cash at end of period | $ | 8,829 | $ | 7,406 |
March 31, 2019 | |||
Cash and cash equivalents | $ | 5,286 | |
Restricted cash included in other assets | 3,543 | ||
Total | $ | 8,829 |
Years Ending December 31, | |||||||||||||||||||||||||||
2019 | 2020 | 2021 | 2022 | 2023 | Thereafter | Total | |||||||||||||||||||||
Minimum commitments | $ | 27 | $ | 26 | $ | 25 | $ | 23 | $ | 19 | $ | 47 | $ | 167 |
Balance Sheet Data | March 31, 2019 | December 31, 2018 | |||||
Commercial finance receivables, net due from dealers consolidated by GM(a) | $ | 430 | $ | 445 | |||
Finance receivables from GM subsidiaries(a) | $ | 121 | $ | 134 | |||
Subvention receivable(b) | $ | 639 | $ | 727 | |||
Commercial loan funding payable(c) | $ | 57 | $ | 61 |
Three Months Ended March 31, | |||||||
Income Statement Data | 2019 | 2018 | |||||
Interest subvention earned on retail finance receivables(d) | $ | 131 | $ | 112 | |||
Interest subvention earned on commercial finance receivables(d) | $ | 17 | $ | 18 | |||
Leased vehicle subvention earned(e) | $ | 835 | $ | 798 |
(a) | Included in finance receivables, net. |
(b) | Included in related party receivables. We received subvention payments from GM of $1.1 billion and $0.6 billion for the three months ended March 31, 2019 and 2018. |
(c) | Included in related party payables. |
(d) | Included in finance charge income. |
(e) | Included as a reduction to leased vehicle expenses. |
March 31, 2019 | December 31, 2018 | ||||||
Retail finance receivables | |||||||
Retail finance receivables, collectively evaluated for impairment, net of fees | $ | 39,452 | $ | 38,354 | |||
Retail finance receivables, individually evaluated for impairment, net of fees | 2,333 | 2,348 | |||||
Total retail finance receivables, net of fees(a) | 41,785 | 40,702 | |||||
Less: allowance for loan losses - collective | (538 | ) | (523 | ) | |||
Less: allowance for loan losses - specific | (324 | ) | (321 | ) | |||
Total retail finance receivables, net | 40,923 | 39,858 | |||||
Commercial finance receivables | |||||||
Commercial finance receivables, collectively evaluated for impairment, net of fees | 12,334 | 12,680 | |||||
Commercial finance receivables, individually evaluated for impairment, net of fees | 34 | 41 | |||||
Total commercial finance receivables, net of fees(b) | 12,368 | 12,721 | |||||
Less: allowance for loan losses - collective | (60 | ) | (63 | ) | |||
Less: allowance for loan losses - specific | (2 | ) | (4 | ) | |||
Total commercial finance receivables, net | 12,306 | 12,654 | |||||
Total finance receivables, net | $ | 53,229 | $ | 52,512 | |||
Fair value utilizing Level 2 inputs | $ | 12,306 | $ | 12,654 | |||
Fair value utilizing Level 3 inputs | $ | 40,951 | $ | 39,564 |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Allowance for retail loan losses beginning balance | $ | 844 | $ | 889 | |||
Provision for loan losses | 178 | 135 | |||||
Charge-offs | (307 | ) | (295 | ) | |||
Recoveries | 145 | 123 | |||||
Foreign currency translation | 2 | 6 | |||||
Allowance for retail loan losses ending balance | $ | 862 | $ | 858 |
March 31, 2019 | March 31, 2018 | ||||||||||||
Amount | Percent of Contractual Amount Due | Amount | Percent of Contractual Amount Due | ||||||||||
31 - 60 days | $ | 1,048 | 2.5 | % | $ | 1,265 | 3.7 | % | |||||
Greater than 60 days | 412 | 1.0 | 605 | 1.7 | |||||||||
Total finance receivables more than 30 days delinquent | 1,460 | 3.5 | 1,870 | 5.4 | |||||||||
In repossession | 47 | 0.1 | 53 | 0.2 | |||||||||
Total finance receivables more than 30 days delinquent or in repossession | $ | 1,507 | 3.6 | % | $ | 1,923 | 5.6 | % |
March 31, 2019 | December 31, 2018 | ||||||
Outstanding recorded investment | $ | 2,333 | $ | 2,348 | |||
Less: allowance for loan losses | (324 | ) | (321 | ) | |||
Outstanding recorded investment, net of allowance | $ | 2,009 | $ | 2,027 | |||
Unpaid principal balance | $ | 2,364 | $ | 2,379 |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Average outstanding recorded investment | $ | 2,341 | $ | 2,214 | |||
Finance charge income recognized | $ | 68 | $ | 64 | |||
Number of loans classified as TDRs during the period | 16,532 | 13,336 | |||||
Recorded investment of loans classified as TDRs during the period | $ | 308 | $ | 251 |
March 31, 2019 | December 31, 2018 | ||||||||||||||
Amount | Percent | Amount | Percent | ||||||||||||
Group I | - | Dealers with superior financial metrics | $ | 2,075 | 16.8 | % | $ | 2,192 | 17.2 | % | |||||
Group II | - | Dealers with strong financial metrics | 4,897 | 39.6 | 4,500 | 35.4 | |||||||||
Group III | - | Dealers with fair financial metrics | 3,737 | 30.2 | 4,292 | 33.7 | |||||||||
Group IV | - | Dealers with weak financial metrics | 1,167 | 9.4 | 1,205 | 9.5 | |||||||||
Group V | - | Dealers warranting special mention due to elevated risks | 423 | 3.4 | 449 | 3.5 | |||||||||
Group VI | - | Dealers with loans classified as substandard, doubtful or impaired | 69 | 0.6 | 83 | 0.7 | |||||||||
Balance at end of period | $ | 12,368 | 100.0 | % | $ | 12,721 | 100.0 | % |
March 31, 2019 | December 31, 2018 | ||||||
Leased vehicles | $ | 64,585 | $ | 64,928 | |||
Manufacturer subvention | (9,925 | ) | (9,934 | ) | |||
Net capitalized cost | 54,660 | 54,994 | |||||
Less: accumulated depreciation | (11,608 | ) | (11,435 | ) | |||
Leased vehicles, net | $ | 43,052 | $ | 43,559 |
Years Ending December 31, | |||||||||||||||||||||||
2019 | 2020 | 2021 | 2022 | 2023 | Total | ||||||||||||||||||
Lease payments under operating leases | $ | 5,220 | $ | 4,740 | $ | 2,143 | $ | 306 | $ | 15 | $ | 12,424 |
Three Months Ended March 31, | |||||||
Summarized Operating Data | 2019 | 2018 | |||||
Finance charge income | $ | 350 | $ | 307 | |||
Provision for loan losses | $ | 6 | $ | 3 | |||
Interest expense | $ | 152 | $ | 124 | |||
Income before income taxes | $ | 170 | $ | 198 | |||
Net income | $ | 127 | $ | 148 |
March 31, 2019 | December 31, 2018 | ||||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||
Secured debt | |||||||||||||||
Revolving credit facilities | $ | 2,305 | $ | 2,311 | $ | 3,410 | $ | 3,413 | |||||||
Securitization notes payable | 39,320 | 39,427 | 39,425 | 39,422 | |||||||||||
Total secured debt | 41,625 | 41,738 | 42,835 | 42,835 | |||||||||||
Unsecured debt | |||||||||||||||
Senior notes | 44,890 | 45,249 | 42,611 | 42,015 | |||||||||||
Credit facilities | 1,869 | 1,865 | 2,157 | 2,151 | |||||||||||
Other unsecured debt | 3,747 | 3,752 | 3,385 | 3,390 | |||||||||||
Total unsecured debt | 50,506 | 50,866 | 48,153 | 47,556 | |||||||||||
Total secured and unsecured debt | $ | 92,131 | $ | 92,604 | $ | 90,988 | $ | 90,391 | |||||||
Fair value utilizing Level 2 inputs | $ | 90,615 | $ | 88,305 | |||||||||||
Fair value utilizing Level 3 inputs | $ | 1,989 | $ | 2,086 |
March 31, 2019 | December 31, 2018 | ||||||
Restricted cash(a) | $ | 2,682 | $ | 2,380 | |||
Finance receivables, net of fees | $ | 32,065 | $ | 32,626 | |||
Lease related assets | $ | 20,313 | $ | 21,781 | |||
Secured debt | $ | 41,355 | $ | 42,504 |
March 31, 2019 | December 31, 2018 | |||||||||||||||||||||||
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 | $ | 13,039 | $ | 135 | $ | 127 | $ | 9,533 | $ | 42 | $ | 231 | ||||||||||||
Foreign currency swaps | 1,797 | 18 | 72 | 1,829 | 37 | 60 | ||||||||||||||||||
Cash flow hedges | ||||||||||||||||||||||||
Interest rate swaps | 599 | 4 | — | 768 | 8 | — | ||||||||||||||||||
Foreign currency swaps | 3,298 | 35 | 96 | 2,075 | 43 | 58 | ||||||||||||||||||
Derivatives not designated as hedges | ||||||||||||||||||||||||
Interest rate contracts | 96,296 | 233 | 428 | 99,666 | 372 | 520 | ||||||||||||||||||
Total(b) | $ | 115,029 | $ | 425 | $ | 723 | $ | 113,871 | $ | 502 | $ | 869 |
(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 March 31, 2019 and December 31, 2018, the fair value of assets and liabilities available for offset was $283 million and $320 million. At March 31, 2019 and December 31, 2018, we held $42 million and $30 million and posted $284 million and $451 million of collateral available for netting. |
Carrying Amount of Hedged Items | Cumulative Amount of Fair Value Hedging Adjustments(a) | ||||||||||||||
March 31, 2019 | December 31, 2018 | March 31, 2019 | December 31, 2018 | ||||||||||||
Unsecured debt | $ | 20,200 | $ | 17,923 | $ | 281 | $ | 459 |
(a) | Includes $228 million and $247 million at March 31, 2019 and December 31, 2018 of adjustments remaining on hedged items for which hedge accounting has been discontinued. |
Income (Losses) Recognized In Income | |||||||||||||||
Three Months Ended March 31, 2019 | Three Months Ended March 31, 2018 | ||||||||||||||
Interest Expense(a) | Operating Expenses(b) | Interest Expense(a) | Operating Expenses(b) | ||||||||||||
Fair value hedges | |||||||||||||||
Hedged items - interest rate swaps | $ | (210 | ) | $ | — | $ | 208 | $ | — | ||||||
Interest rate swaps | 181 | — | (210 | ) | — | ||||||||||
Hedged items - foreign currency swaps | — | 32 | — | — | |||||||||||
Foreign currency swaps | (16 | ) | (31 | ) | — | — | |||||||||
Cash flow hedges | |||||||||||||||
Interest rate swaps | 3 | — | 4 | — | |||||||||||
Foreign currency swaps | (18 | ) | (33 | ) | (9 | ) | 24 | ||||||||
Derivatives not designated as hedges | |||||||||||||||
Interest rate contracts | (5 | ) | — | 6 | — | ||||||||||
Foreign currency swaps | — | — | (7 | ) | 22 | ||||||||||
Total | $ | (65 | ) | $ | (32 | ) | $ | (8 | ) | $ | 46 |
(a) | Total interest expense was $947 million and $732 million for the three months ended March 31, 2019 and 2018. |
(b) | Activity is offset by translation activity also recorded in operating expenses related to foreign currency-denominated loans. Total operating expense was $370 million and $365 million for the three months ended March 31, 2019 and 2018. |
Gains (Losses) Recognized In Accumulated Other Comprehensive Loss | |||||||
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Fair value hedges | |||||||
Foreign currency swaps | $ | (11 | ) | $ | — | ||
Cash flow hedges | |||||||
Interest rate contracts | — | 4 | |||||
Foreign currency contracts | (52 | ) | 18 | ||||
Total | $ | (63 | ) | $ | 22 |
(Gains) Losses Reclassified From Accumulated Other Comprehensive Loss Into Income(a)(b) | |||||||
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Fair value hedges | |||||||
Foreign currency swaps | $ | 11 | $ | — | |||
Cash flow hedges | |||||||
Interest rate contracts | (2 | ) | (3 | ) | |||
Foreign currency contracts | 39 | (18 | ) | ||||
Total | $ | 48 | $ | (21 | ) |
(a) | All amounts reclassified from accumulated other comprehensive loss were recorded to interest expense. |
(b) | During the next twelve months, we estimate $5 million will be reclassified into pretax earnings from derivatives designated for hedge accounting. |
March 31, 2019 | December 31, 2018 | ||||
Common Stock | |||||
Number of shares authorized | 10,000,000 | 10,000,000 | |||
Number of shares issued and outstanding | 5,050,000 | 5,050,000 |
March 31, 2019 | December 31, 2018 | ||||
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 |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Unrealized (loss) gain on hedges | |||||||
Beginning balance | $ | 9 | $ | 16 | |||
Change in value of hedges, net of tax | (15 | ) | 1 | ||||
Ending balance | (6 | ) | 17 | ||||
Defined benefit plans | |||||||
Beginning balance | 1 | 1 | |||||
Unrealized gain on subsidiary pension, net of tax | — | — | |||||
Ending balance | 1 | 1 | |||||
Foreign currency translation adjustment | |||||||
Beginning balance | (1,076 | ) | (785 | ) | |||
Translation gain, net of tax | 57 | 59 | |||||
Ending balance | (1,019 | ) | (726 | ) | |||
Total accumulated other comprehensive loss | $ | (1,024 | ) | $ | (708 | ) |
Three Months Ended March 31, 2019 | |||||||||||
North America | International | Total | |||||||||
Total revenue | $ | 3,306 | $ | 314 | $ | 3,620 | |||||
Operating expenses | 276 | 94 | 370 | ||||||||
Leased vehicle expenses | 1,803 | 11 | 1,814 | ||||||||
Provision for loan losses | 139 | 36 | 175 | ||||||||
Interest expense | 823 | 124 | 947 | ||||||||
Equity income | — | 45 | 45 | ||||||||
Income before income taxes | $ | 265 | $ | 94 | $ | 359 |
Three Months Ended March 31, 2018 | |||||||||||
North America | International | Total | |||||||||
Total revenue | $ | 3,085 | $ | 326 | $ | 3,411 | |||||
Operating expenses | 271 | 94 | 365 | ||||||||
Leased vehicle expenses | 1,778 | 9 | 1,787 | ||||||||
Provision for loan losses | 97 | 39 | 136 | ||||||||
Interest expense | 597 | 135 | 732 | ||||||||
Equity income | — | 52 | 52 | ||||||||
Income before income taxes | $ | 342 | $ | 101 | $ | 443 |
March 31, 2019 | December 31, 2018 | ||||||||||||||||||||||
North America | International | Total | North America | International | Total | ||||||||||||||||||
Finance receivables, net | $ | 46,608 | $ | 6,621 | $ | 53,229 | $ | 45,711 | $ | 6,801 | $ | 52,512 | |||||||||||
Leased vehicles, net | $ | 42,887 | $ | 165 | $ | 43,052 | $ | 43,396 | $ | 163 | $ | 43,559 | |||||||||||
Total assets | $ | 101,824 | $ | 9,421 | $ | 111,245 | $ | 100,176 | $ | 9,744 | $ | 109,920 |
• | Retail finance charge income increased $74 million due primarily to an increase in the average balance of the consumer finance receivables portfolio, partially offset by a decrease in effective yield as the portfolio shifts to lower yielding prime loan assets. |
• | Commercial finance charge income increased $47 million due to an increase in the average balance of the commercial finance receivables portfolio as well as increased interest rates on the portfolio. |
• | Leased vehicle income net of leased vehicle expenses increased $35 million due to growth in the lease portfolio and increased volume of lease terminations, partially offset by decreased gains on terminated leased vehicles sold at auction. |
• | Interest expense increased $97 million due to an increase in the average balance of debt outstanding, and $118 million due to an increase in the effective rate of interest on debt. |
Four Quarters Ended | |||||||
March 31, 2019 | March 31, 2018 | ||||||
Net income attributable to common shareholder | $ | 1,397 | $ | 798 | |||
Plus: loss from discontinued operations, net of tax | — | 447 | |||||
Net income from continuing operations attributable to common shareholder | 1,397 | 1,245 | |||||
Average equity | 11,395 | 9,866 | |||||
Less: average preferred equity | 1,250 | 530 | |||||
Average common equity | 10,145 | 9,336 | |||||
Less: average goodwill | 1,189 | 1,199 | |||||
Average tangible common equity | $ | 8,956 | $ | 8,137 | |||
Return on average equity | 12.9 | % | 12.9 | % | |||
Return on average tangible common equity | 15.6 | % | 15.3 | % |
Average Earning Assets | Three Months Ended March 31, | 2019 vs. 2018 Change | ||||||||||||
2019 | 2018 | Amount | Percentage | |||||||||||
Average retail finance receivables | $ | 41,591 | $ | 33,471 | $ | 8,120 | 24.3 | % | ||||||
Average commercial finance receivables | 12,167 | 10,068 | 2,099 | 20.8 | % | |||||||||
Average finance receivables | 53,758 | 43,539 | 10,219 | 23.5 | % | |||||||||
Average leased vehicles, net | 43,394 | 43,177 | 217 | 0.5 | % | |||||||||
Average earning assets | $ | 97,152 | $ | 86,716 | $ | 10,436 | 12.0 | % | ||||||
Retail finance receivables purchased | $ | 7,162 | $ | 5,078 | $ | 2,084 | 41.0 | % | ||||||
Leased vehicles purchased | $ | 5,210 | $ | 5,712 | $ | (502 | ) | (8.8 | )% |
Revenue | Three Months Ended March 31, | 2019 vs. 2018 Change | ||||||||||||
2019 | 2018 | Amount | Percentage | |||||||||||
Finance charge income | ||||||||||||||
Retail finance receivables | $ | 816 | $ | 742 | $ | 74 | 10.0 | % | ||||||
Commercial finance receivables | $ | 171 | $ | 124 | $ | 47 | 37.9 | % | ||||||
Leased vehicle income | $ | 2,509 | $ | 2,447 | $ | 62 | 2.5 | % | ||||||
Other income | $ | 124 | $ | 98 | $ | 26 | 26.5 | % | ||||||
Equity income | $ | 45 | $ | 52 | $ | (7 | ) | (13.5 | )% | |||||
Effective yield - retail finance receivables | 8.0 | % | 9.0 | % | ||||||||||
Effective yield - commercial finance receivables | 5.7 | % | 5.0 | % |
Costs and Expenses | Three Months Ended March 31, | 2019 vs. 2018 Change | ||||||||||||
2019 | 2018 | Amount | Percentage | |||||||||||
Operating expenses | $ | 370 | $ | 365 | $ | 5 | 1.4 | % | ||||||
Leased vehicle expenses | $ | 1,814 | $ | 1,787 | $ | 27 | 1.5 | % | ||||||
Provision for loan losses | $ | 175 | $ | 136 | $ | 39 | 28.7 | % | ||||||
Interest expense | $ | 947 | $ | 732 | $ | 215 | 29.4 | % | ||||||
Average debt outstanding | $ | 92,321 | $ | 81,525 | $ | 10,796 | 13.2 | % | ||||||
Effective rate of interest on debt | 4.2 | % | 3.6 | % |
March 31, 2019 | December 31, 2018 | ||||||||||||
Amount | Percent | Amount | Percent | ||||||||||
Prime - FICO Score 680 and greater | $ | 25,452 | 60.9 | % | $ | 24,434 | 60.0 | % | |||||
Near-prime - FICO Score 620 to 679 | 6,324 | 15.1 | 6,144 | 15.1 | |||||||||
Sub-prime - FICO Score less than 620 | 10,009 | 24.0 | 10,124 | 24.9 | |||||||||
Retail finance receivables, net of fees | 41,785 | 100.0 | % | 40,702 | 100.0 | % | |||||||
Less: allowance for loan losses | (862 | ) | (844 | ) | |||||||||
Retail finance receivables, net | $ | 40,923 | $ | 39,858 | |||||||||
Number of outstanding contracts | 2,651,794 | 2,607,703 | |||||||||||
Average amount of outstanding contracts (in dollars)(a) | $ | 15,757 | $ | 15,608 | |||||||||
Allowance for loan losses as a percentage of retail finance receivables, net of fees | 2.1 | % | 2.1 | % |
(a) | Average amount of outstanding contracts consists of retail finance receivables, net of fees, divided by number of outstanding contracts. |
March 31, 2019 | March 31, 2018 | ||||||||||||
Amount | Percent of Contractual Amount Due | Amount | Percent of Contractual Amount Due | ||||||||||
31 - 60 days | $ | 1,048 | 2.5 | % | $ | 1,265 | 3.7 | % | |||||
Greater than 60 days | 412 | 1.0 | 605 | 1.7 | |||||||||
Total finance receivables more than 30 days delinquent | 1,460 | 3.5 | 1,870 | 5.4 | |||||||||
In repossession | 47 | 0.1 | 53 | 0.2 | |||||||||
Total finance receivables more than 30 days delinquent or in repossession | $ | 1,507 | 3.6 | % | $ | 1,923 | 5.6 | % |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Charge-offs | $ | 307 | $ | 295 | |||
Less: recoveries | (145 | ) | (123 | ) | |||
Net charge-offs | $ | 162 | $ | 172 | |||
Net charge-offs as an annualized percentage of average retail finance receivables | 1.6 | % | 2.1 | % |
Commercial Finance Receivables | March 31, 2019 | December 31, 2018 | |||||
Commercial finance receivables, net of fees | $ | 12,368 | $ | 12,721 | |||
Less: allowance for loan losses | (62 | ) | (67 | ) | |||
Commercial finance receivables, net | $ | 12,306 | $ | 12,654 | |||
Number of dealers | 1,773 | 1,750 | |||||
Average carrying amount per dealer | $ | 7 | $ | 7 | |||
Allowance for loan losses as a percentage of commercial finance receivables, net of fees | 0.5 | % | 0.5 | % |
March 31, 2019 | December 31, 2018 | ||||||||||||||||||
Residual Value | Units | Percentage of Units | Residual Value | Units | Percentage of Units | ||||||||||||||
Cars | $ | 4,567 | 347 | 20.5 | % | $ | 4,884 | 379 | 22.3 | % | |||||||||
Trucks | 7,134 | 290 | 17.2 | 7,299 | 296 | 17.4 | |||||||||||||
Crossovers | 15,457 | 939 | 55.7 | 15,057 | 917 | 53.8 | |||||||||||||
SUVs | 4,074 | 111 | 6.6 | 4,160 | 111 | 6.5 | |||||||||||||
Total | $ | 31,232 | 1,687 | 100.0 | % | $ | 31,400 | 1,703 | 100.0 | % |
Three Months Ended March 31, | |||||
2019 | 2018 | ||||
Operating leases originated | 138 | 149 | |||
Operating leases terminated | 155 | 124 | |||
Operating lease vehicles returned(a) | 117 | 94 | |||
Percentage of lease vehicles returned(b) | 75 | % | 76 | % |
(a) | Represents the number of vehicles returned to us for remarketing. |
(b) | Calculated as the number of operating leases returned divided by the number of operating leases terminated. |
Liquidity | March 31, 2019 | December 31, 2018 | |||||
Cash and cash equivalents(a) | $ | 5,286 | $ | 4,883 | |||
Borrowing capacity on unpledged eligible assets | 19,715 | 18,048 | |||||
Borrowing capacity on committed unsecured lines of credit | 342 | 290 | |||||
Borrowing capacity on the Junior Subordinated Revolving Credit Facility | 1,000 | 1,000 | |||||
Borrowing capacity on the GM Revolving 364-Day Credit Facility | 2,000 | 2,000 | |||||
Available liquidity | $ | 28,343 | $ | 26,221 |
(a) | Includes $314 million and $503 million in unrestricted cash outside of the U.S. at March 31, 2019 and December 31, 2018. This cash is considered to be indefinitely invested based on specific plans for reinvestment of these earnings. |
Facility Type | Facility Amount | Advances Outstanding | ||||||
Revolving retail asset-secured facilities(a) | $ | 22,539 | $ | 2,038 | ||||
Revolving commercial asset-secured facilities(b) | 3,974 | 267 | ||||||
Total secured | 26,513 | 2,305 | ||||||
Unsecured committed facilities | 439 | 97 | ||||||
Unsecured uncommitted facilities(c) | 1,772 | 1,772 | ||||||
Total unsecured | 2,211 | 1,869 | ||||||
Junior Subordinated Revolving Credit Facility | 1,000 | — | ||||||
GM Revolving 364-Day Credit Facility | 2,000 | — | ||||||
Total | $ | 31,724 | $ | 4,174 |
(a) | Includes committed and uncommitted revolving credit facilities backed by retail finance receivables and leases. The financial institutions providing the uncommitted facilities are not contractually obligated to advance funds under them. We had $128 million in advances outstanding and $681 million in unused borrowing capacity on these facilities at March 31, 2019. |
(b) | Includes revolving credit facilities backed by loans to dealers for floorplan financing. |
(c) | The financial institutions providing the uncommitted facilities are not contractually obligated to advance funds under them. We had $1.5 billion in unused borrowing capacity on these facilities at March 31, 2019. |
Year of Transaction | Maturity Date (a) | Original Note Issuance (b) | Note Balance At March 31, 2019 | |||||||||
2014 | March 2022 | $ | 1,950 | $ | 176 | |||||||
2015 | January 2021 | - | December 2023 | $ | 5,297 | 786 | ||||||
2016 | May 2019 | - | September 2024 | $ | 11,104 | 3,569 | ||||||
2017 | August 2019 | - | May 2025 | $ | 22,394 | 12,233 | ||||||
2018 | June 2020 | - | September 2026 | $ | 23,005 | 18,233 | ||||||
2019 | April 2023 | - | March 2025 | $ | 4,644 | 4,394 | ||||||
Total active securitizations | 39,391 | |||||||||||
Debt issuance costs | (71 | ) | ||||||||||
Total | $ | 39,320 |
(a) | Maturity dates represent legal final maturity of issued notes. The notes are expected to be paid based on amortization of the finance receivables and leases pledged. |
(b) | At historical foreign currency exchange rates at the time of issuance. |
• | GM's ability to sell new vehicles that we finance in the markets we serve; |
• | the viability of GM-franchised dealers that are commercial loan customers; |
• | changes in the automotive industry that result in a change in demand for vehicles and related vehicle financing; |
• | the sufficiency, availability and cost of sources of financing, including credit facilities, securitization programs and secured and unsecured debt issuances; |
• | our joint ventures in China, which we cannot operate solely for our benefit and over which we have limited control; |
• | the adequacy of our underwriting criteria for loans and leases and the level of net charge-offs, delinquencies and prepayments on the loans and leases we purchase or originate; |
• | the adequacy of our allowance for loan losses on our finance receivables; |
• | the effect, interpretation or application of new or existing laws, regulations, court decisions and accounting pronouncements; |
• | adverse determinations with respect to the application of existing laws, or the results of any audits from tax authorities, as well as changes in tax laws and regulations, supervision, enforcement and licensing across various jurisdictions; |
• | the prices at which used vehicles are sold in the wholesale auction markets; |
• | vehicle return rates, our ability to estimate residual value at the inception of a lease and the residual value performance on vehicles we lease; |
• | interest rate fluctuations and certain related derivatives exposure; |
• | foreign currency exchange rate fluctuations and other risks applicable to our operations outside of the U.S.; |
• | changes to the LIBOR calculation process and potential phasing out of LIBOR; |
• | our ability to effectively manage capital or liquidity consistent with evolving business or operational needs, risk management standards, and regulatory or supervisory requirements; |
• | changes in local, regional, national or international economic, social or political conditions; |
• | our ability to maintain and expand our market share due to competition in the automotive finance industry from a large number of banks, credit unions, independent finance companies and other captive automotive finance subsidiaries; |
• | our ability to secure private customer and employee data or our proprietary information, manage risks related to security breaches and other disruptions to our networks and systems and comply with enterprise data regulations in all key market regions; and |
• | changes in business strategy, including expansion of product lines and credit risk appetite, acquisitions and divestitures. |
Filed Herewith | ||||
Filed Herewith | ||||
Furnished Herewith | ||||
Incorporated by Reference | ||||
101.INS | XBRL Instance Document | Filed Herewith | ||
101.SCH | XBRL Taxonomy Extension Schema Document | Filed Herewith | ||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | Filed Herewith | ||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | Filed Herewith | ||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | Filed Herewith | ||
101.PRE | XBRL Taxonomy Presentation Linkbase Document | Filed Herewith |
General Motors Financial Company, Inc. | |||||
(Registrant) | |||||
Date: | April 30, 2019 | By: | /S/ SUSAN B. SHEFFIELD | ||
Susan B. Sheffield | |||||
Executive Vice President and | |||||
Chief Financial Officer |
/s/ Daniel E. Berce | ||
Daniel E. Berce | ||
President and Chief Executive Officer |
/s/ Susan B. Sheffield | ||
Susan B. Sheffield | ||
Executive Vice President and Chief Financial Officer |
/s/ Daniel E. Berce | ||
Daniel E. Berce | ||
President and Chief Executive Officer |
/s/ Susan B. Sheffield | ||
Susan B. Sheffield | ||
Executive Vice President and Chief Financial Officer |
Document and Entity Information - shares |
3 Months Ended | |
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Mar. 31, 2019 |
Apr. 29, 2019 |
|
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | acf | |
Entity Registrant Name | General Motors Financial Company, Inc. | |
Entity Central Index Key | 0000804269 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Common Stock, Shares Outstanding | 5,050,000 |
Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Common Stock, Number of Shares, Par Value and Other Disclosures [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 Statements Of Income - USD ($) $ in Millions |
3 Months Ended | |
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Mar. 31, 2019 |
Mar. 31, 2018 |
|
Revenue | ||
Finance charge income | $ 987 | $ 866 |
Leased vehicle income | 2,509 | 2,447 |
Other income | 124 | 98 |
Total revenue | 3,620 | 3,411 |
Costs and expenses | ||
Operating expenses | 370 | 365 |
Leased vehicle expenses | 1,814 | 1,787 |
Provision for loan losses (Note 3) | 175 | 136 |
Interest expense | 947 | 732 |
Total costs and expenses | 3,306 | 3,020 |
Equity income (Note 5) | 45 | 52 |
Income before income taxes | 359 | 443 |
Income tax provision (Note 11) | 88 | 74 |
Net income | 271 | 369 |
Less: cumulative dividends on preferred stock | 23 | 14 |
Net income attributable to common shareholder | $ 248 | $ 355 |
Condensed Consolidated Statements Of Comprehensive Income - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 271 | $ 369 |
Other comprehensive income, net of tax (Note 10) | ||
Unrealized (loss) gain on hedges, net of income tax (benefit) expense of $(5) and $1 | (15) | 1 |
Foreign currency translation adjustment, net of income tax expense (benefit) of $0 and $(1) | 57 | 59 |
Other comprehensive income, net of tax | 42 | 60 |
Comprehensive income | $ 313 | $ 429 |
Condensed Consolidated Statements Of Comprehensive Income (Parentheticals) - USD ($) $ in Millions |
3 Months Ended | |
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Mar. 31, 2019 |
Mar. 31, 2018 |
|
Income Statement [Abstract] | ||
Change in value of cash flow hedges, tax expense (benefit) | $ (5) | $ 1 |
Translation income (loss), tax | $ 0 | $ (1) |
Consolidated Statements of Shareholders' Equity - USD ($) $ in Millions |
Total |
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, 2017 | $ 10,294 | $ 0 | $ 0 | $ 7,525 | $ (768) | $ 3,537 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Adoption of accounting standards | 40 | 40 | ||||
Net income | 369 | 369 | ||||
Other comprehensive income | 60 | 60 | ||||
Stock based compensation | 16 | 16 | ||||
Dividends paid | (30) | (30) | ||||
Other | (1) | (1) | ||||
Balance at end of period at Mar. 31, 2018 | 10,748 | 0 | 0 | 7,541 | (708) | 3,915 |
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 | 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 |
Summary of Significant Accounting Policies |
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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 transactions and accounts have been eliminated in consolidation. The consolidated financial statements, including the notes thereto, are condensed and do not include all disclosures required by generally accepted accounting principles (GAAP) in the U.S. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements that are included in our Annual Report on Form 10–K for the fiscal year ended December 31, 2018, as filed with the Securities and Exchange Commission (SEC) on February 6, 2019 (2018 Form 10–K). Except as otherwise specified, dollar amounts presented within tables are stated in millions. The condensed consolidated financial statements at March 31, 2019, and for the three months ended March 31, 2019 and 2018, 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, 2018 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 China. Recently Adopted Accounting Standards Effective January 1, 2019, we adopted ASU 2016-02, "Leases" (ASU 2016-02) using the optional transition method, resulting in the recognition of right of use assets for $129 million, included in other assets, and lease obligations for $144 million, included in other liabilities on our condensed consolidated balance sheet related to our existing operating leases at January 1, 2019. We elected to apply the package of practical expedients permitted under the transition guidance in the new standard, which allowed us to carry forward our historical lease classification. The accounting for finance leases and leases where we are lessor remained substantially unchanged. The application of ASU 2016-02 had no impact on our condensed consolidated statement of income or condensed consolidated statement of cash flows. The following table summarizes our minimum commitments under noncancelable operating leases having initial terms in excess of one year as of December 31, 2018:
Refer to Note 9 for information on our operating leases as of March 31, 2019. As lessor, we have investments in leased vehicles recorded as operating leases. Leased vehicles consist of automobiles leased to customers and are carried at amortized cost less unearned manufacturer subvention payments, which are received up front. Depreciation expense is recorded on a straight-line basis over the term of the lease agreement to the estimated residual value. Manufacturer subvention is earned on a straight-line basis as a reduction to depreciation expense. The lessee may purchase the leased vehicle at the maturity of the lease by paying the purchase price stated in the lease agreement, which equals the contract residual value determined at origination of the lease, plus any fees and all other amounts owed under the lease. If the lessee decides not to purchase the leased vehicle, the lessee must return it to a dealer by the lease's scheduled lease maturity date. Extensions may be granted to the lessee for up to six months. If the lessee extends the maturity date on their lease agreement, the lessee is responsible for additional monthly payments until the leased vehicle is returned or purchased. Since the lessee is not obligated to purchase the vehicle at the end of the contract, we are exposed to a risk of loss to the extent the customer returns the vehicle prior to or at the end of the lease term and the value of the vehicle is lower than the residual value estimated at inception of the lease. We estimate the expected residual value based on third party data which considers various data points and assumptions including recent auction values, the expected future volume of returning leased vehicles, used vehicle prices, manufacturer incentive programs and fuel prices. Changes in the expected residual value result in increased or decreased depreciation of the leased asset over the remaining term of the lease. Upon disposition, a gain or loss is recorded for any difference between the net book value of the lease and the proceeds from the disposition of the asset, including any insurance proceeds. Under the accounting for impairment or disposal of long-lived assets, vehicles on operating leases are evaluated by asset group for impairment. We aggregate leased vehicles into asset groups based on make, year and model. When asset group indicators of impairment exist and aggregate future cash flows from the operating lease, including the expected realizable fair value of the leased assets at the end of the lease, are less than the book value of the lease asset group, an immediate impairment write-down is recognized if the difference is deemed not recoverable. |
Related Party Transactions |
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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 certain interest payments on 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 three months ended March 31, 2019, we purchased $194 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:
_________________
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. In April 2019, GM renewed the 364-day, $2.0 billion facility (the GM Revolving 364-Day Credit Facility) for an additional 364-day term. This facility has been allocated for exclusive access by us since April 2018. At March 31, 2019, we had no amounts borrowed under any of the GM facilities. We are included in GM's consolidated U.S. federal income tax returns and certain U.S. state returns, and we are obligated to pay GM for our share of these tax liabilities. Amounts owed to GM for income taxes are accrued and recorded as a related party payable. At March 31, 2019 and December 31, 2018, there are no related party taxes payable to GM. |
Finance Receivables |
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Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Finance Receivables | Finance Receivables
(a) Net of unearned income, unamortized premiums and discounts, and deferred fees and costs of $29 million and $53 million at March 31, 2019 and December 31, 2018. (b) Net of dealer cash management balances of $1,083 million and $922 million at March 31, 2019 and December 31, 2018. Rollforward of Allowance for Retail Loan Losses A summary of the activity in the allowance for retail loan losses is as follows:
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. We review the 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 such 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 is a consolidated summary of the contractual amounts of delinquent retail finance receivables, which is not significantly different than the recorded investment for such receivables:
At March 31, 2019 and December 31, 2018, the accrual of finance charge income had been suspended on retail finance receivables with contractual amounts due of $745 million and $888 million. Impaired Retail Finance Receivables - TDRs Retail finance receivables that become classified as troubled debt restructurings (TDRs) are separately assessed for impairment. A specific allowance is estimated based on the present value of the expected future cash flows of the receivable discounted at the loan's original effective interest rate. Accounts that become classified as TDRs because of a payment deferral accrue interest at the contractual rate and an additional fee is collected (where permitted) at each time of deferral and recorded as a reduction of accrued interest. No interest or fees are forgiven on a payment deferral to a customer; therefore, there are no additional financial effects of deferred loans becoming classified as TDRs. Accounts in the U.S. in Chapter 13 bankruptcy would have already been placed on non-accrual; therefore, there are no additional financial effects from these loans becoming classified as TDRs. Finance charge income from loans classified as TDRs is accounted for in the same manner as other accruing loans. Cash collections on these loans are allocated according to the same payment hierarchy methodology applied to loans that are not classified as TDRs. The outstanding recorded investment for retail finance receivables that are considered to be TDRs and the related allowance is presented below:
Additional information about loans classified as TDRs is presented below:
The unpaid principal balance, net of recoveries, of loans charged off during the reporting period within 12 months of being modified as a TDR was insignificant for the three months ended March 31, 2019 and 2018. Commercial Credit Quality Our commercial finance receivables consist of dealer financings, primarily for 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. Dealers in Group VI are subject to additional 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 March 31, 2019 and December 31, 2018, substantially all of our commercial finance receivables were current with respect to payment status. Commercial finance receivables on non-accrual status were insignificant, and none were classified as TDRs. Activity in the allowance for commercial loan losses was insignificant for the three months ended March 31, 2019 and 2018. |
Leased Vehicles |
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Property Subject to or Available for Operating Lease, Net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leased Vehicles | Leased Vehicles
The following table summarizes lease payments due to us as lessor under operating leases at March 31, 2019:
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Equity in Net Assets of Non-consolidated Affiliates |
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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 significant ownership changes in our joint ventures since December 31, 2018. The following table presents certain aggregated operating data of our joint ventures:
At March 31, 2019 and December 31, 2018, we had undistributed earnings of $543 million and $498 million related to our non-consolidated affiliates. |
Debt |
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Debt | Debt
Secured Debt Most of the secured debt was issued by VIEs and is repayable only from proceeds related to the underlying pledged assets. Refer to Note 7 for further discussion. During the three months ended March 31, 2019, we entered into new credit facilities or renewed credit facilities with a total net additional borrowing capacity of $75 million, and we issued $4.6 billion in aggregate principal amount of securitization notes payable with an initial weighted average interest rate of 3.16% and legal final maturity dates ranging from 2023 to 2025. Unsecured Debt During the three months ended March 31, 2019, we issued $3.9 billion in aggregate principal amount of senior notes with a weighted average interest rate of 4.22% and maturity dates ranging from 2021 to 2029. In April 2019, we issued $1.3 billion in senior notes with an interest rate of 3.55% due in 2022. The principal amount outstanding of our commercial paper in the U.S. was $1.5 billion and $1.2 billion at March 31, 2019 and December 31, 2018. General Motors Financial Company, Inc. is the sole guarantor of its subsidiaries' unsecured debt obligations for which a guarantee is provided. Compliance with Debt Covenants Several of our revolving credit facilities require compliance with certain financial and operational covenants as well as regular reporting to lenders, including providing certain subsidiary financial statements. Certain of our secured debt agreements also contain various covenants, including maintaining portfolio performance ratios as well as limits on deferment levels. Our unsecured debt obligations contain covenants including limitations on our ability to incur certain liens. At March 31, 2019, we were in compliance with these debt covenants. |
Variable Interest Entities |
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Variable Interest Entities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Variable Interest Entities | Variable Interest Entities Securitizations and Credit Facilities The following table summarizes the assets and liabilities related to our consolidated VIEs:
(a) Included in other assets. These amounts are related to securitization and credit facilities held by consolidated VIEs. Our continuing involvement with these VIEs consists of servicing assets held by the entities and holding residual interests in the entities. We have determined that we are the primary beneficiary of each VIE because we hold both (i) the power to direct the activities of the VIEs that most significantly impact the VIEs' economic performance and (ii) the obligation to absorb losses from and the right to receive benefits of the VIEs that could potentially be significant to the VIEs. We are not required, and do not currently intend, to provide any additional financial support to these VIEs. Liabilities recognized as a result of consolidating these entities generally do not represent claims against us or our other subsidiaries and assets recognized generally are for the benefit of these entities' operations and cannot be used to satisfy our or our other subsidiaries' obligations. |
Derivative Financial Instruments and Hedging Activities |
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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 the use of 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 amounts of fair value of our derivative instruments and the associated notional amounts:
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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:
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The table below presents the effect of our derivative financial instruments in the condensed consolidated statements of income:
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The tables below present the effect of our derivative financial instruments in the condensed consolidated statements of comprehensive income:
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Commitments and Contingencies |
3 Months Ended |
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Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Operating Leases Our portfolio of leases consists primarily of real estate office space. Certain leases contain escalation clauses and renewal options, and generally our leases have no residual value guarantees or material covenants. We exclude from our balance sheet leases with a term equal to one year or less and do not separate non-lease components from our real estate leases. Rent expense under operating leases was $5 million for the three months ended March 31, 2019. At March 31, 2019, operating lease right of use assets, included in other assets, were $123 million and operating lease liabilities, included in other liabilities, were $138 million. As of March 31, 2019, our undiscounted future lease obligations related to operating leases having initial terms in excess of one year are $20 million for the nine months ended December 31, 2019 and $26 million, $26 million, $24 million, $19 million and $46 million for the years 2020, 2021, 2022, 2023 and thereafter. The weighted average discount rate is 4.8% and the weighted average remaining lease term is 6.6 years as of March 31, 2019. Imputed interest for operating leases and variable lease costs were insignificant for the three months ended March 31, 2019. Guarantees of Indebtedness At March 31, 2019 and December 31, 2018, we guaranteed approximately $1.1 billion in aggregate principal amount of Euro Medium Term Notes issued by General Motors Financial International B.V., our former subsidiary, pursuant to our Euro Medium Term Note Programme. Subject to the terms and conditions of a letter agreement with BNP Paribas in connection with the sale of certain of our European Operations, BNP Paribas will reimburse us for any amount that we may pay under any such 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 March 31, 2019, we estimated our reasonably possible legal exposure for unfavorable outcomes is up to $66 million, and have accrued $23 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 $13 million as of March 31, 2019. |
Shareholders' Equity |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity | Shareholders' Equity
During the three months ended March 31, 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. During the three months ended March 31, 2018, we paid dividends of $30 million to holders of record of our Series A Preferred Stock. The following table summarizes the significant components of accumulated other comprehensive loss:
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Income Taxes |
3 Months Ended |
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Mar. 31, 2019 | |
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 March 31, 2019 and 2018, income tax expense of $88 million and $74 million primarily resulted from tax expense attributable to entities included in our effective tax rate calculation. 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 |
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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:
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Regulatory Capital and Other Regulatory Matters |
3 Months Ended |
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Mar. 31, 2019 | |
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 $7.5 billion and $7.9 billion at March 31, 2019 and December 31, 2018. |
Summary of Significant Accounting Policies (Policies) |
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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 transactions and accounts have been eliminated in consolidation. The consolidated financial statements, including the notes thereto, are condensed and do not include all disclosures required by generally accepted accounting principles (GAAP) in the U.S. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements that are included in our Annual Report on Form 10–K for the fiscal year ended December 31, 2018, as filed with the Securities and Exchange Commission (SEC) on February 6, 2019 (2018 Form 10–K). Except as otherwise specified, dollar amounts presented within tables are stated in millions. The condensed consolidated financial statements at March 31, 2019, and for the three months ended March 31, 2019 and 2018, 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, 2018 was derived from audited annual financial statements. |
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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 China. |
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Recently Adopted Accounting Standards | Recently Adopted Accounting Standards Effective January 1, 2019, we adopted ASU 2016-02, "Leases" (ASU 2016-02) using the optional transition method, resulting in the recognition of right of use assets for $129 million, included in other assets, and lease obligations for $144 million, included in other liabilities on our condensed consolidated balance sheet related to our existing operating leases at January 1, 2019. We elected to apply the package of practical expedients permitted under the transition guidance in the new standard, which allowed us to carry forward our historical lease classification. The accounting for finance leases and leases where we are lessor remained substantially unchanged. The application of ASU 2016-02 had no impact on our condensed consolidated statement of income or condensed consolidated statement of cash flows. The following table summarizes our minimum commitments under noncancelable operating leases having initial terms in excess of one year as of December 31, 2018:
Refer to Note 9 for information on our operating leases as of March 31, 2019. As lessor, we have investments in leased vehicles recorded as operating leases. Leased vehicles consist of automobiles leased to customers and are carried at amortized cost less unearned manufacturer subvention payments, which are received up front. Depreciation expense is recorded on a straight-line basis over the term of the lease agreement to the estimated residual value. Manufacturer subvention is earned on a straight-line basis as a reduction to depreciation expense. The lessee may purchase the leased vehicle at the maturity of the lease by paying the purchase price stated in the lease agreement, which equals the contract residual value determined at origination of the lease, plus any fees and all other amounts owed under the lease. If the lessee decides not to purchase the leased vehicle, the lessee must return it to a dealer by the lease's scheduled lease maturity date. Extensions may be granted to the lessee for up to six months. If the lessee extends the maturity date on their lease agreement, the lessee is responsible for additional monthly payments until the leased vehicle is returned or purchased. Since the lessee is not obligated to purchase the vehicle at the end of the contract, we are exposed to a risk of loss to the extent the customer returns the vehicle prior to or at the end of the lease term and the value of the vehicle is lower than the residual value estimated at inception of the lease. We estimate the expected residual value based on third party data which considers various data points and assumptions including recent auction values, the expected future volume of returning leased vehicles, used vehicle prices, manufacturer incentive programs and fuel prices. Changes in the expected residual value result in increased or decreased depreciation of the leased asset over the remaining term of the lease. Upon disposition, a gain or loss is recorded for any difference between the net book value of the lease and the proceeds from the disposition of the asset, including any insurance proceeds. Under the accounting for impairment or disposal of long-lived assets, vehicles on operating leases are evaluated by asset group for impairment. We aggregate leased vehicles into asset groups based on make, year and model. When asset group indicators of impairment exist and aggregate future cash flows from the operating lease, including the expected realizable fair value of the leased assets at the end of the lease, are less than the book value of the lease asset group, an immediate impairment write-down is recognized if the difference is deemed not recoverable. |
Summary of Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Future Minimum Rental Payments for Operating Leases | The following table summarizes our minimum commitments under noncancelable operating leases having initial terms in excess of one year as of December 31, 2018:
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Related Party Transactions (Tables) |
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Schedule of Related Party Transactions | The following tables present related party transactions:
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Finance Receivables (Tables) |
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Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Finance Receivables, Net |
(a) Net of unearned income, unamortized premiums and discounts, and deferred fees and costs of $29 million and $53 million at March 31, 2019 and December 31, 2018. (b) Net of dealer cash management balances of $1,083 million and $922 million at March 31, 2019 and December 31, 2018. |
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Allowance for Credit Losses on Financing Receivables |
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Past Due Financing Receivables | The following is a consolidated summary of the contractual amounts of delinquent retail finance receivables, which is not significantly different than the recorded investment for such receivables:
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Troubled Debt Restructurings on Financing Receivables | The outstanding recorded investment for retail finance receivables that are considered to be TDRs and the related allowance is presented below:
Additional information about loans classified as TDRs is presented below:
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Financing Receivable Credit Quality Indicators for Commercial Lending | The following table summarizes the credit risk profile by dealer risk rating of commercial finance receivables:
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Leased Vehicles (Tables) |
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Property Subject to or Available for Operating Lease, Net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Leased Vehicles |
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Schedule of Future Minimum Rental Payments Receivable For Operating Leases | The following table summarizes lease payments due to us as lessor under operating leases at March 31, 2019:
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Equity in Net Assets of Non-consolidated Affiliates (Tables) |
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Noncontrolling Interest [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summarized Financial Data of Nonconsolidated Affiliates | The following table presents certain aggregated operating data of our joint ventures:
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Debt (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt |
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Variable Interest Entities (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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:
(a) Included in other assets. |
Derivative Financial Instruments and Hedging Activities (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Instruments | The table below presents the gross amounts of fair value of our derivative instruments and the associated notional amounts:
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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:
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Effect of Derivative Instruments on the Condensed Consolidated Statements of Income | The table below presents the effect of our derivative financial instruments in the condensed consolidated statements of income:
_________________
The tables below present the effect of our derivative financial instruments in the condensed consolidated statements of comprehensive income:
_________________
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Shareholders' Equity (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Common and Preferred Stock |
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Schedule of Accumulated Other Comprehensive Loss | The following table summarizes the significant components of accumulated other comprehensive loss:
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Segment Reporting (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment | Key operating data for our operating segments were as follows:
|
Summary of Significant Accounting Policies - Narrative (Details) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Jan. 01, 2019
USD ($)
|
Mar. 31, 2019
segment
|
Mar. 31, 2018
USD ($)
|
|
Accounting Policies [Abstract] | |||
Number of operating segments | segment | 2 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Adoption of accounting standards | $ 40 | ||
Retained Earnings [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Adoption of accounting standards | $ 40 | ||
Right-of-Use Assets [Member] | Accounting Standards Update 2016-02 [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Adoption of accounting standards | $ 129 | ||
Lease Obligations [Member] | Accounting Standards Update 2016-02 [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Adoption of accounting standards | $ 144 |
Summary of Significant Accounting Policies - Noncancelable Operating Lease (Details) $ in Millions |
Dec. 31, 2018
USD ($)
|
---|---|
Accounting Policies [Abstract] | |
2019 | $ 27 |
2020 | 26 |
2021 | 25 |
2022 | 23 |
2023 | 19 |
Thereafter | 47 |
Total | $ 167 |
Related Party Transactions (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
Dec. 31, 2018 |
|
Affiliated Entity [Member] | |||
Related Party Transaction [Line Items] | |||
Subvention receivable | $ 639 | $ 727 | |
Leased vehicle subvention earned | 835 | $ 798 | |
Affiliated Entity [Member] | Retail Finance Receivables [Member] | |||
Related Party Transaction [Line Items] | |||
Finance receivables, net due | 121 | 134 | |
Interest subvention earned | 131 | 112 | |
Affiliated Entity [Member] | Commercial Finance Receivables [Member] | |||
Related Party Transaction [Line Items] | |||
Finance receivables, net due | 430 | 445 | |
Commercial loan funding payable | 57 | $ 61 | |
Interest subvention earned | 17 | 18 | |
Parent Company [Member] | |||
Related Party Transaction [Line Items] | |||
Revenue from related parties | $ 1,100 | $ 600 |
Related Party Transactions - Narrative (Details) - USD ($) |
1 Months Ended | 3 Months Ended | 12 Months Ended |
---|---|---|---|
Apr. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2018 |
|
Affiliated Entity [Member] | |||
Related Party Transaction [Line Items] | |||
Tax expense due to related party | $ 0 | $ 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 | ||
Line of Credit [Member] | Three Hundred and Sixty-Four Day Revolving Credit Facilities [Member] | General Motors [Member] | Subsequent Event [Member] | |||
Related Party Transaction [Line Items] | |||
Debt instrument term | 364 days | ||
Maximum borrowing capacity | $ 2,000,000,000 | ||
Debt instrument renewal term | 364 days | ||
Purchase of Retail Finance Receivables [Member] | Parent Company [Member] | |||
Related Party Transaction [Line Items] | |||
Related party purchases | $ 194,000,000 |
Finance Receivables - Narrative (Details) - USD ($) $ in Millions |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Retail Finance Receivables [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accrual of finance charge income | $ 745 | $ 888 |
Finance Receivables - Allowance for Loan Losses (Details) - Retail Finance Receivables [Member] - Automobile Loan [Member] - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||
Allowance for retail loan losses beginning balance | $ 844 | $ 889 |
Provision for loan losses | 178 | 135 |
Charge-offs | (307) | (295) |
Recoveries | 145 | 123 |
Foreign currency translation | 2 | 6 |
Allowance for retail loan losses ending balance | $ 862 | $ 858 |
Finance Receivables - Troubled Debt Restructurings (Details) - Retail Finance Receivables [Member] - Automobile Loan [Member] $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2019
USD ($)
loan
|
Mar. 31, 2018
USD ($)
loan
|
Dec. 31, 2018
USD ($)
|
|
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Outstanding recorded investment | $ 2,333 | $ 2,348 | |
Less: allowance for loan losses | (324) | (321) | |
Outstanding recorded investment, net of allowance | 2,009 | 2,027 | |
Unpaid principal balance | 2,364 | $ 2,379 | |
Average outstanding recorded investment | 2,341 | $ 2,214 | |
Finance charge income recognized | $ 68 | $ 64 | |
Number of loans classified as TDRs during the period | loan | 16,532 | 13,336 | |
Recorded investment of loans classified as TDRs during the period | $ 308 | $ 251 |
Leased Vehicles - Summary of Leased Vehicles (Details) - USD ($) $ in Millions |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Property Subject to or Available for Operating Lease, Net [Abstract] | ||
Leased vehicles | $ 64,585 | $ 64,928 |
Manufacturer subvention | (9,925) | (9,934) |
Net capitalized cost | 54,660 | 54,994 |
Less: accumulated depreciation | (11,608) | (11,435) |
Leased vehicles, net | $ 43,052 | $ 43,559 |
Leased Vehicles - Minimum Rental Payments (Details) $ in Millions |
Mar. 31, 2019
USD ($)
|
---|---|
Operating Leases, Future Minimum Payments Receivable [Abstract] | |
2019 | $ 5,220 |
2020 | 4,740 |
2021 | 2,143 |
2022 | 306 |
2023 | 15 |
Total | $ 12,424 |
Restricted Cash (Details) $ in Millions |
Mar. 31, 2019
USD ($)
|
---|---|
Restricted Cash and Cash Equivalents Items [Line Items] | |
Restricted cash included in other assets | $ 3,543 |
Equity in Net Assets of Non-consolidated Affiliates (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
Dec. 31, 2018 |
|
Noncontrolling Interest [Line Items] | |||
Net income | $ 45 | $ 52 | |
Joint Ventures [Member] | |||
Noncontrolling Interest [Line Items] | |||
Finance charge income | 350 | 307 | |
Provision for loan losses | 6 | 3 | |
Interest expense | 152 | 124 | |
Income before income taxes | 170 | 198 | |
Net income | 127 | $ 148 | |
Undistributed earnings | $ 543 | $ 498 |
Debt - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2019 |
Apr. 30, 2019 |
Dec. 31, 2018 |
|
Secured Debt [Member] | Revolving Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Increase to borrowing capacity | $ 75 | ||
Secured Debt [Member] | Securitization Notes Payable [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, face amount | $ 4,600 | ||
Weighted average interest rate | 3.16% | ||
Senior Notes [Member] | Senior Notes with Maturity Dates from 2021 to 2029 [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, face amount | $ 3,900 | ||
Weighted average interest rate | 4.22% | ||
Unsecured Debt [Member] | Commercial Paper [Member] | |||
Debt Instrument [Line Items] | |||
Principal amount outstanding | $ 1,500 | $ 1,200 | |
Subsequent Event [Member] | Unsecured Debt [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, face amount | $ 1,300 | ||
Stated interest rate | 3.55% |
Variable Interest Entities - Assets and Liabilities of Consolidated VIE's (Details) - USD ($) $ in Millions |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Variable Interest Entity [Line Items] | ||
Restricted cash | $ 3,543 | |
Finance receivables, net of fees | 53,229 | $ 52,512 |
Lease related assets | 43,052 | 43,559 |
Securitization and Credit Facility VIEs [Member] | ||
Variable Interest Entity [Line Items] | ||
Restricted cash | 2,682 | 2,380 |
Finance receivables, net of fees | 32,065 | 32,626 |
Lease related assets | 20,313 | 21,781 |
Secured debt | $ 41,355 | $ 42,504 |
Derivative Financial Instruments and Hedging Activities - Derivatives Recognized in the Balance Sheet (Details) - Designated as Hedging Instrument [Member] - Fair Value Hedging [Member] - Unsecured Debt [Member] - USD ($) $ in Millions |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Derivatives, Fair Value [Line Items] | ||
Carrying Amount of Hedged Items | $ 20,200 | $ 17,923 |
Cumulative Amount of Fair Value Hedging Adjustments | 281 | 459 |
Discontinued hedge cumulative amount of fair value hedging adjustments | $ 228 | $ 247 |
Commitments and Contingencies - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Dec. 31, 2018 |
|
Commitment and Contingencies [Line Items] | ||
Rent expense | $ 5 | |
Operating lease payments for the remainder of 2019 | 20 | |
2020 | 26 | |
2021 | 26 | |
2022 | 24 | |
2023 | 19 | |
Thereafter | $ 46 | |
Weighted average discount rate | 4.80% | |
Weighted average remaining lease term | 6 years 7 months 6 days | |
Estimate of possible loss | $ 66 | |
Loss accrual | 23 | |
Indirect tax contingency | 13 | |
Parent Company [Member] | Euro Medium Term Notes [Member] | Senior Notes [Member] | ||
Commitment and Contingencies [Line Items] | ||
Debt instrument, face amount | 1,100 | $ 1,100 |
Other Assets [Member] | ||
Commitment and Contingencies [Line Items] | ||
Operating lease right-of-use assets | 123 | |
Other Liabilities [Member] | ||
Commitment and Contingencies [Line Items] | ||
Operating lease liabilities | $ 138 |
Shareholders' Equity - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
Dec. 31, 2018 |
|
Class of Stock [Line Items] | |||
Preferred stock par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Fixed-to-Floating Rate Cumulative Preferred Stock Series A [Member] | |||
Class of Stock [Line Items] | |||
Preferred stock dividends paid | $ 29 | $ 30 | |
Preferred stock shares issued | 1,000,000 | 1,000,000 | |
Fixed-to-Floating Rate Cumulative Perpetual Preferred Stock, Series B [Member] | |||
Class of Stock [Line Items] | |||
Preferred stock dividends paid | $ 17 | ||
Preferred stock shares issued | 500,000 | 500,000 |
Shareholders' Equity - Summary of Common and Preferred Stock (Details) - shares |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
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 | 5,050,000.00 | 5,050,000.00 |
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 |
Income Taxes (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Income Tax Disclosure [Abstract] | ||
Income tax (benefit) provision | $ 88 | $ 74 |
Segment Reporting - Operations Reporting by Revenue (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Segment Reporting Information [Line Items] | ||
Total revenue | $ 3,620 | $ 3,411 |
Operating expenses | 370 | 365 |
Leased vehicle expenses | 1,814 | 1,787 |
Provision for loan losses | 175 | 136 |
Interest expense | 947 | 732 |
Equity income | 45 | 52 |
Income before income taxes | 359 | 443 |
Operating Segments [Member] | North America Segment [Member] | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 3,306 | 3,085 |
Operating expenses | 276 | 271 |
Leased vehicle expenses | 1,803 | 1,778 |
Provision for loan losses | 139 | 97 |
Interest expense | 823 | 597 |
Equity income | 0 | 0 |
Income before income taxes | 265 | 342 |
Operating Segments [Member] | International Segment [Member] | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 314 | 326 |
Operating expenses | 94 | 94 |
Leased vehicle expenses | 11 | 9 |
Provision for loan losses | 36 | 39 |
Interest expense | 124 | 135 |
Equity income | 45 | 52 |
Income before income taxes | $ 94 | $ 101 |
Segment Reporting - Operations Reporting by Assets (Details) - USD ($) $ in Millions |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Segment Reporting Information [Line Items] | ||
Finance receivables, net | $ 53,229 | $ 52,512 |
Leased vehicles, net | 43,052 | 43,559 |
Total assets | 111,245 | 109,920 |
North America Segment [Member] | ||
Segment Reporting Information [Line Items] | ||
Finance receivables, net | 46,608 | 45,711 |
Leased vehicles, net | 42,887 | 43,396 |
Total assets | 101,824 | 100,176 |
International Segment [Member] | ||
Segment Reporting Information [Line Items] | ||
Finance receivables, net | 6,621 | 6,801 |
Leased vehicles, net | 165 | 163 |
Total assets | $ 9,421 | $ 9,744 |
Regulatory Capital and Other Regulatory Matters (Details) - USD ($) $ in Millions |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Capital Requirements on Foreign Financial Institutions [Line Items] | ||
Assets | $ 111,245 | $ 109,920 |
International Regulated Bank And Finance Companies [Member] | ||
Capital Requirements on Foreign Financial Institutions [Line Items] | ||
Assets | $ 7,500 | $ 7,900 |
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