Related Party Transactions

9 Months Ended

Sep. 30, 2020

We offer loan and lease finance products through GM-franchised dealers to customers purchasing new vehicles manufactured by GM and certain used vehicles, and make commercial loans directly to GM-franchised dealers and their affiliates. We also offer commercial loans to dealers that are consolidated by GM and those balances are included in our finance receivables, net.

Under subvention programs, GM makes cash payments to us for offering incentivized rates and structures on retail loan and lease finance products. In addition, GM makes cash payments to us to cover interest payments on certain commercial loans.

We purchase certain program vehicles from GM subsidiaries. We simultaneously lease these vehicles to those subsidiaries for use primarily in their vehicle-sharing arrangements. We account for these leases as direct-finance leases, sales-type leases or loans depending on the origin of the asset, all of which are included in our finance receivables, net.

We purchased finance receivables from other GM subsidiaries for vehicles sold to rental car companies and for vehicles sold to certain dealerships. During the nine months ended September 30, 2020 and 2019, we purchased $190 million and $689 million of these receivables from GM, which are included in our finance receivables, net.

We have related party payables due to GM, primarily for taxes payable and commercial finance receivables originated but not yet funded.

The following tables present related party transactions:


Balance Sheet Data	September 30, 2020		December 31, 2019
Commercial finance receivables, net due from dealers consolidated by GM(a)	$	399	$	478
Subvention receivable(b)	$	566	$	676
Commercial loan funding payable(c)	$	75	$	74
Taxes payable(c)	$	159	$	4


	Three Months Ended September 30,				Nine Months Ended September 30,
Income Statement Data	2020		2019		2020		2019
Interest subvention earned on retail finance receivables(d)	$	172	$	137	$	464	$	401
Interest subvention earned on commercial finance receivables(d)	$	6	$	16	$	32	$	47
Leased vehicle subvention earned(e)	$	749	$	814	$	2,319	$	2,467

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(a)Included in finance receivables, net.

(b)Included in related party receivables. We received subvention payments from GM of $943 million and $1.0 billion for the three months ended September 30, 2020 and 2019 and $3.0 billion and $3.1 billion for the nine months ended September 30, 2020 and 2019.

(c)Included in related party payables.

(d)Included in finance charge income.

(e)Included as a reduction to leased vehicle expenses.

Under the support agreement with GM (the Support Agreement), if our earning assets leverage ratio at the end of any calendar quarter exceeds the applicable threshold set in the Support Agreement, we may require GM to provide funding sufficient to bring our earning assets leverage ratio to within the applicable threshold. In determining our earning assets leverage ratio (net earning assets divided by adjusted equity) under the Support Agreement, net earning assets means our finance receivables, net, plus leased vehicles, net, and adjusted equity means our equity, net of goodwill and inclusive of outstanding junior subordinated debt, as each may be adjusted for derivative accounting from time to time.

Additionally, the Support Agreement provides that GM will own all of our outstanding voting shares as long as we have any unsecured debt securities outstanding. GM also agrees to certain provisions in the Support Agreement intended to ensure that we maintain adequate access to liquidity. Pursuant to these provisions, GM provides us with a $1.0 billion junior subordinated unsecured intercompany revolving credit facility (the Junior Subordinated Revolving Credit Facility), and GM agrees to use commercially reasonable efforts to ensure that we will continue to be designated as a subsidiary borrower under GM's corporate revolving credit facilities. We have access, subject to available capacity, to $14.5 billion of GM's unsecured

revolving credit facilities consisting of a three-year, $4.0 billion facility, and a five-year, $10.5 billion facility. We also have exclusive access to GM's $2.0 billion facility (GM Revolving 364-Day Credit Facility). At September 30, 2020, we had no amounts borrowed under any of the GM facilities. At September 30, 2020, GM had $0.2 billion in borrowings outstanding on the three-year, $4.0 billion facility and $10.5 billion in borrowings outstanding on the five-year, $10.5 billion facility. In October 2020, GM repaid $3.9 billion of the five-year, $10.5 billion facility.

In April 2020, GM renewed the $2.0 billion GM Revolving 364-Day Credit Facility for an additional 364-day term and extended $3.6 billion of the three-year, $4.0 billion facility for an additional year expiring in April 2022. The remaining portion will expire in April 2021, unless extended.

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 tax liabilities. Amounts owed to GM for income taxes are accrued and recorded as a related party payable.