10-Q 1 gm2016q2.htm 10-Q Document


UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549-1004
Form 10-Q
þ
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2016
OR
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to

Commission file number 001-34960
GENERAL MOTORS COMPANY
(Exact name of registrant as specified in its charter)
STATE OF DELAWARE
27-0756180
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
 
 
300 Renaissance Center, Detroit, Michigan
48265-3000
(Address of principal executive offices)
(Zip Code)
(313) 556-5000
(Registrant’s telephone number, including area code)

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  þ  No  ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes  þ  No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer  þ  Accelerated filer  ¨  Non-accelerated filer  ¨  Smaller reporting company  ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  ¨  No  þ
As of July 14, 2016 the number of shares outstanding of common stock was 1,561,921,814 shares.





INDEX
 
 
 
Page
PART I
Item 1.
Condensed Consolidated Financial Statements
 
Condensed Consolidated Income Statements (Unaudited)
 
Condensed Consolidated Statements of Comprehensive Income (Unaudited)
 
Condensed Consolidated Balance Sheets (Unaudited)
 
Condensed Consolidated Statements of Cash Flows (Unaudited)
 
Condensed Consolidated Statements of Equity (Unaudited)
 
Notes to Condensed Consolidated Financial Statements
 
Note 1.
Nature of Operations and Basis of Presentation
 
Note 2.
Acquisition of Business
 
Note 3.
Marketable Securities
 
Note 4.
GM Financial Receivables
 
Note 5.
Inventories
 
Note 6.
Equity in Net Assets of Nonconsolidated Affiliates
 
Note 7.
Variable Interest Entities
 
Note 8.
Automotive and GM Financial Debt
 
Note 9.
Product Warranty and Related Liabilities
 
Note 10.
Pensions and Other Postretirement Benefits
 
Note 11.
Commitments and Contingencies
 
Note 12.
Income Taxes
 
Note 13.
Restructuring and Other Initiatives
 
Note 14.
Stockholders' Equity
 
Note 15.
Earnings Per Share
 
Note 16.
Segment Reporting
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
Item 4.
Controls and Procedures
PART II
Item 1.
Legal Proceedings
Item 1A.
Risk Factors
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
Item 6.
Exhibits
Signature
 





GENERAL MOTORS COMPANY AND SUBSIDIARIES


PART I

Item 1. Condensed Consolidated Financial Statements

CONDENSED CONSOLIDATED INCOME STATEMENTS
(In millions, except per share amounts) (Unaudited)
 
Three Months Ended
 
Six Months Ended
 
June 30, 2016
 
June 30, 2015
 
June 30, 2016
 
June 30, 2015
Net sales and revenue
 
 
 
 
 
 
 
Automotive
$
40,089

 
$
36,670

 
$
75,284

 
$
71,034

GM Financial
2,283

 
1,510

 
4,353

 
2,858

Total net sales and revenue
42,372

 
38,180

 
79,637

 
73,892

Costs and expenses
 
 
 
 
 
 
 
Automotive cost of sales
34,426

 
32,597

 
65,015

 
63,271

GM Financial interest, operating and other expenses
2,063

 
1,318

 
3,949

 
2,486

Automotive selling, general and administrative expense
2,847

 
2,977

 
5,665

 
6,094

Total costs and expenses
39,336

 
36,892

 
74,629

 
71,851

Operating income
3,036

 
1,288

 
5,008

 
2,041

Automotive interest expense
147

 
108

 
274

 
218

Interest income and other non-operating income, net
172

 
13

 
257

 
254

Equity income (Note 6)
660

 
524

 
1,220

 
1,077

Income before income taxes
3,721

 
1,717

 
6,211

 
3,154

Income tax expense (Note 12)
871

 
577

 
1,430

 
1,106

Net income
2,850

 
1,140

 
4,781

 
2,048

Net (income) loss attributable to noncontrolling interests
16

 
(23
)
 
38

 
14

Net income attributable to common stockholders
$
2,866

 
$
1,117

 
$
4,819

 
$
2,062

 
 
 
 
 
 
 
 
Earnings per share (Note 15)
 
 
 
 
 
 
 
Basic
 
 
 
 
 
 
 
Basic earnings per common share
$
1.85

 
$
0.70

 
$
3.12

 
$
1.28

Weighted-average common shares outstanding
1,548

 
1,596

 
1,547

 
1,606

Diluted
 
 
 
 
 
 
 
Diluted earnings per common share
$
1.81

 
$
0.67

 
$
3.05

 
$
1.23

Weighted-average common shares outstanding
1,581

 
1,660

 
1,580

 
1,673

 
 
 
 
 
 
 
 
Dividends declared per common share
$
0.38

 
$
0.36

 
$
0.76

 
$
0.66

 
 
 
 
 
 
 
 
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In millions) (Unaudited)
 
Three Months Ended
 
Six Months Ended
 
June 30, 2016
 
June 30, 2015
 
June 30, 2016
 
June 30, 2015
Net income
$
2,850

 
$
1,140

 
$
4,781

 
$
2,048

Other comprehensive income (loss), net of tax (Note 14)
 
 
 
 
 
 
 
Foreign currency translation adjustments and other
(19
)
 
(148
)
 
65

 
49

Defined benefit plans
171

 
(65
)
 
49

 
489

Other comprehensive income (loss), net of tax
152

 
(213
)
 
114

 
538

Comprehensive income
3,002

 
927

 
4,895

 
2,586

Comprehensive (income) loss attributable to noncontrolling interests
13

 
(22
)
 
55

 
6

Comprehensive income attributable to common stockholders
$
3,015

 
$
905

 
$
4,950

 
$
2,592


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

1



GENERAL MOTORS COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except share and per share amounts) (Unaudited)
 
June 30, 2016
 
December 31, 2015
ASSETS
 
 
 
Current Assets
 
 
 
Cash and cash equivalents
$
18,923

 
$
15,238

Marketable securities (Note 3)
4,247

 
8,163

Restricted cash (Note 3; Note 7 at VIEs)
1,595

 
1,590

Accounts and notes receivable, net
10,461

 
8,337

GM Financial receivables, net (Note 4; Note 7 at VIEs)
19,800

 
18,051

Inventories (Note 5)
15,026

 
13,764

Equipment on operating leases, net
2,505

 
2,783

Other current assets
2,073

 
1,482

Total current assets
74,630

 
69,408

Non-current Assets
 
 
 
Restricted cash (Note 3; Note 7 at VIEs)
603

 
583

GM Financial receivables, net (Note 4; Note 7 at VIEs)
19,309

 
18,500

Equity in net assets of nonconsolidated affiliates (Note 6)
8,198

 
9,201

Property, net
33,510

 
31,229

Goodwill and intangible assets, net
6,433

 
5,947

GM Financial equipment on operating leases, net (Note 7 at VIEs)
28,442

 
20,172

Deferred income taxes (Note 1)
35,627

 
36,860

Other assets
3,697

 
2,438

Total non-current assets
135,819

 
124,930

Total Assets
$
210,449

 
$
194,338

LIABILITIES AND EQUITY
 
 
 
Current Liabilities
 
 
 
Accounts payable (principally trade)
$
26,959

 
$
24,062

Short-term debt and current portion of long-term debt (Note 8)
 
 
 
Automotive
1,031

 
817

GM Financial (Note 7 at VIEs)
20,199

 
18,745

Accrued liabilities
27,854

 
27,593

Total current liabilities
76,043

 
71,217

Non-current Liabilities
 
 
 
Long-term debt (Note 8)
 
 
 
Automotive
9,789

 
7,948

GM Financial (Note 7 at VIEs)
44,301

 
35,601

Postretirement benefits other than pensions (Note 10)
5,675

 
5,685

Pensions (Note 10)
17,939

 
20,911

Other liabilities
12,699

 
12,653

Total non-current liabilities
90,403

 
82,798

Total Liabilities
166,446

 
154,015

Commitments and contingencies (Note 11)
 
 


Equity (Note 14)
 
 
 
Common stock, $0.01 par value
16

 
15

Additional paid-in capital
27,734

 
27,607

Retained earnings
23,785

 
20,285

Accumulated other comprehensive loss
(7,905
)
 
(8,036
)
Total stockholders’ equity
43,630

 
39,871

Noncontrolling interests
373

 
452

Total Equity
44,003

 
40,323

Total Liabilities and Equity
$
210,449

 
$
194,338


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

2



GENERAL MOTORS COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions) (Unaudited)
 
 
Six Months Ended
 
 
June 30, 2016
 
June 30, 2015
Cash flows from operating activities
 
 
 
 
Net income
 
$
4,781

 
$
2,048

Depreciation, amortization and impairment charges
 
4,871

 
3,927

Foreign currency remeasurement and transaction losses
 
237

 
788

Amortization of discount and issuance costs on debt issues
 
94

 
87

Undistributed earnings of nonconsolidated affiliates, net
 
893

 
350

Pension contributions and OPEB payments
 
(2,784
)
 
(824
)
Pension and OPEB (income) expense, net
 
(297
)
 
189

Provision for deferred taxes
 
1,305

 
593

Change in other operating assets and liabilities
 
(3,139
)
 
(997
)
Net cash provided by operating activities
 
5,961

 
6,161

Cash flows from investing activities
 
 
 
 
Expenditures for property
 
(4,610
)
 
(3,489
)
Available-for-sale marketable securities, acquisitions
 
(2,278
)
 
(4,836
)
Trading marketable securities, acquisitions
 
(203
)
 
(1,028
)
Available-for-sale marketable securities, liquidations
 
5,337

 
6,689

Trading marketable securities, liquidations
 
813

 
1,099

Acquisition of companies/investments, net of cash acquired
 
(801
)
 
(928
)
Increase in restricted cash
 
(320
)
 
(344
)
Decrease in restricted cash
 
269

 
129

Purchases of finance receivables
 
(8,354
)
 
(8,376
)
Principal collections and recoveries on finance receivables
 
6,641

 
5,716

Purchases of leased vehicles, net
 
(10,203
)
 
(6,504
)
Proceeds from termination of leased vehicles
 
1,090

 
468

Other investing activities
 
178

 
81

Net cash used in investing activities
 
(12,441
)
 
(11,323
)
Cash flows from financing activities
 
 
 
 
Net increase (decrease) in short-term debt
 
438

 
(202
)
Proceeds from issuance of debt (original maturities greater than three months)
 
23,213

 
16,498

Payments on debt (original maturities greater than three months)
 
(11,962
)
 
(8,417
)
Payments to purchase common stock
 
(300
)
 
(1,999
)
Dividends paid
 
(1,188
)
 
(1,086
)
Other financing activities
 
(116
)
 
(40
)
Net cash provided by financing activities
 
10,085

 
4,754

Effect of exchange rate changes on cash and cash equivalents
 
80

 
(919
)
Net increase (decrease) in cash and cash equivalents
 
3,685

 
(1,327
)
Cash and cash equivalents at beginning of period
 
15,238

 
18,954

Cash and cash equivalents at end of period
 
$
18,923

 
$
17,627

Significant Non-cash Investing Activity
 
 
 
 
Non-cash property additions
 
$
4,582

 
$
3,490

Non-cash business acquisition (Note 2)
 
$
290

 
 

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

3



GENERAL MOTORS COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(In millions) (Unaudited)
 
Common Stockholders’
 
Noncontrolling Interests
 
Total Equity
Common Stock
 
Additional Paid-in Capital
 
Retained Earnings
 
Accumulated Other Comprehensive Loss
 
Balance at January 1, 2015
$
16

 
$
28,937

 
$
14,577

 
$
(8,073
)
 
$
567

 
$
36,024

Net income

 

 
2,062

 

 
(14
)
 
2,048

Other comprehensive income

 

 

 
530

 
8

 
538

Purchase of common stock

 
(941
)
 
(1,058
)
 

 

 
(1,999
)
Exercise of common stock warrants

 
41

 

 

 

 
41

Stock based compensation

 
124

 
(14
)
 

 

 
110

Cash dividends paid on common stock

 

 
(1,055
)
 

 

 
(1,055
)
Dividends declared or paid to noncontrolling interests

 

 

 

 
(56
)
 
(56
)
Other

 

 

 

 
19

 
19

Balance at June 30, 2015
$
16

 
$
28,161

 
$
14,512

 
$
(7,543
)
 
$
524

 
$
35,670

 
 
 
 
 
 
 
 
 
 
 
 
Balance at January 1, 2016
$
15

 
$
27,607

 
$
20,285

 
$
(8,036
)
 
$
452

 
$
40,323

Net income

 

 
4,819

 

 
(38
)
 
4,781

Other comprehensive income

 

 

 
131

 
(17
)
 
114

Issuance of common stock

 
290

 

 

 

 
290

Purchase of common stock

 
(167
)
 
(133
)
 

 

 
(300
)
Exercise of common stock warrants
1

 
28

 

 

 

 
29

Stock based compensation

 
(24
)
 
(8
)
 

 

 
(32
)
Cash dividends paid on common stock

 

 
(1,178
)
 

 

 
(1,178
)
Dividends declared or paid to noncontrolling interests

 

 

 

 
(17
)
 
(17
)
Other

 

 

 

 
(7
)
 
(7
)
Balance at June 30, 2016
$
16

 
$
27,734

 
$
23,785

 
$
(7,905
)
 
$
373

 
$
44,003


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


4



GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



Note 1. Nature of Operations and Basis of Presentation
General Motors Company (sometimes referred to in this Quarterly Report on Form 10-Q as we, our, us, ourselves, the Company, General Motors or GM) designs, builds and sells cars, trucks, crossovers and automobile parts worldwide. We also provide automotive financing services through General Motors Financial Company, Inc. (GM Financial). We analyze the results of our business through the following segments: GM North America (GMNA), GM Europe (GME), GM International Operations (GMIO), GM South America (GMSA) and GM Financial. Nonsegment operations are classified as Corporate. Corporate includes certain centrally recorded income and costs, such as interest, income taxes and corporate expenditures and certain nonsegment specific revenues and expenses.

The accompanying condensed consolidated financial statements have been prepared in conformity with U.S. GAAP pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) for interim financial information. Accordingly they do not include all of the information and notes required by U.S. GAAP for complete financial statements. The accompanying condensed consolidated financial statements include all adjustments, which consist of normal recurring adjustments and transactions or events discretely impacting the interim periods, considered necessary by management to fairly state our results of operations, financial position and cash flows. The operating results for interim periods are not necessarily indicative of results that may be expected for any other interim period or for the full year. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our 2015 Form 10-K. Except for per share amounts or as otherwise specified, dollar amounts presented within tables are stated in millions.

Effective January 1, 2016 we retrospectively adopted Accounting Standards Update (ASU) 2015-17, Balance Sheet Classification of Deferred Taxes, which requires all deferred tax assets and liabilities to be classified as non-current. As a result current Deferred income taxes and Accrued liabilities decreased by $8.6 billion and $249 million and non-current Deferred income taxes increased by $8.4 billion at December 31, 2015 in our condensed consolidated balance sheets.

In February 2016 ASU 2016-02, Leases (ASU 2016-02) was issued which requires the lessee to recognize most leases on the balance sheet thereby resulting in the recognition of lease assets and liabilities for those leases currently classified as operating leases. The accounting for leases where we are the lessor is largely unchanged. ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018 with early adoption permitted. We are currently assessing the impact ASU 2016-02 will have on our consolidated financial statements.

In June 2016 ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASU 2016-13), was issued that requires entities to use a Current Expected Credit Loss model which is a new impairment model based on expected losses rather than incurred losses. Under this model, an entity would recognize an impairment allowance equal to its current estimate of all contractual cash flows that the entity does not expect to collect from financial assets measured at amortized cost. The entity's estimate would consider relevant information about past events, current conditions and reasonable and supportable forecasts, which will result in recognition of lifetime expected credit losses by GM Financial upon loan origination. ASU 2016-13 is effective for interim and annual reporting periods beginning after December 15, 2019 with early adoption permitted for annual reporting periods beginning after December 15, 2018. We are currently assessing the impact ASU 2016-13 will have on our consolidated financial statements.

Note 2. Acquisition of Business
On May 12, 2016 we acquired all of the outstanding capital stock of Cruise Automation, Inc. (Cruise), an autonomous vehicle technology company, to further accelerate our development of autonomous vehicles. The deal consideration at closing was $581 million, of which $291 million was paid in cash and approximately $290 million was paid through the issuance of new common stock. The fair value of the common stock issued was determined based on the closing price of our common stock on May 12, 2016. In conjunction with the acquisition, we entered into other agreements that will result in future costs contingent upon the continued employment of key individuals and additional performance-based awards contingent upon the achievement of specific technology and commercialization milestones.

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


5



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

The results of operations associated with this acquisition were not significant to our condensed consolidated financial statements. Accordingly, pro forma financial information is not presented. We have included the financial results of Cruise in our condensed consolidated financial statements from the date of acquisition.

Note 3. Marketable Securities
The following table summarizes the fair value, which approximates cost, of cash equivalents and marketable securities:
 
Fair Value Level
 
June 30, 2016
 
December 31, 2015
Cash, cash equivalents and time deposits
 
 
$
9,088

 
$
7,730

Available-for sale securities
 
 
 
 
 
U.S. government and agencies
2
 
$
1,953

 
$
5,329

Corporate debt
2
 
5,999

 
6,267

Money market funds
1
 
1,983

 
2,275

Sovereign debt
2
 
4,097

 
1,219

Total available-for-sale securities
 
 
14,032

 
15,090

Trading securities – sovereign debt
2
 
50

 
581

Total marketable securities (including securities classified as cash equivalents)
 
 
$
14,082

 
$
15,671

Restricted cash
 
 
 
 
 
Cash, cash equivalents and time deposits
 
 
$
717

 
$
833

Available-for-sale securities, primarily money market funds
1
 
1,481

 
1,340

Total restricted cash
 
 
$
2,198

 
$
2,173

Available-for-sale securities included above with contractual maturities
 
 
 
 
 
Due in one year or less
 
 
$
10,146

 
 
Due between one and five years
 
 
1,920

 
 
Total available-for-sale securities with contractual maturities
 
 
$
12,066

 
 

Marketable securities classified as cash equivalents totaled $9.8 billion and $7.5 billion at June 30, 2016 and December 31, 2015 and consisted of corporate debt, money market funds and sovereign debt. Sales proceeds from investments classified as available-for-sale and sold prior to maturity were $1.6 billion and $4.5 billion in the three months ended June 30, 2016 and 2015 and $4.2 billion and $5.9 billion in the six months ended June 30, 2016 and 2015. Net unrealized gains and losses on trading securities were insignificant in the three and six months ended June 30, 2016 and 2015.

Note 4. GM Financial Receivables
 
June 30, 2016
 
December 31, 2015
 
Retail
 
Commercial
 
Total
 
Retail
 
Commercial
 
Total
Finance receivables
$
30,861

 
$
9,112

 
$
39,973

 
$
29,124

 
$
8,209

 
$
37,333

Less: allowance for loan losses
(814
)
 
(50
)
 
(864
)
 
(735
)
 
(47
)
 
(782
)
GM Financial receivables, net
$
30,047

 
$
9,062

 
$
39,109

 
$
28,389

 
$
8,162

 
$
36,551

 
 
 
 
 
 
 
 
 
 
 
 
Fair value of GM Financial receivables
 
 
 
 
$
39,510

 
 
 
 
 
$
36,707


GM Financial estimates the fair value of retail finance receivables using observable and unobservable inputs within a cash flow model, a Level 3 input. The inputs reflect assumptions regarding expected prepayments, deferrals, delinquencies, recoveries and charge-offs of the loans within the portfolio. The cash flow model produces an estimated amortization schedule of the finance receivables which is the basis for the calculation of the series of cash flows that derive the fair value of the portfolio. The series of cash flows is calculated and discounted using a weighted-average cost of capital or current interest rates. The weighted-average cost of capital uses unobservable debt and equity percentages, an unobservable cost of equity and an observable cost of debt based on companies with a similar credit rating and maturity profile as the portfolio. Macroeconomic factors could affect the credit performance of the portfolio and therefore could potentially affect the assumptions used in GM Financial's cash flow model. A

6



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

substantial majority of GM Financial's commercial finance receivables have variable interest rates and maturities of one year or less. Therefore, the carrying amount is considered to be a reasonable estimate of fair value using Level 2 inputs.
 
Three Months Ended
 
Six Months Ended
 
June 30, 2016
 
June 30, 2015
 
June 30, 2016
 
June 30, 2015
Allowance for loan losses at beginning of period
$
843

 
$
728

 
$
782

 
$
695

Provision for loan losses
151

 
141

 
347

 
296

Charge-offs
(266
)
 
(220
)
 
(559
)
 
(454
)
Recoveries
133

 
109

 
283

 
233

Effect of foreign currency
3

 
2

 
11

 
(10
)
Allowance for loan losses at end of period
$
864

 
$
760

 
$
864

 
$
760


The activity for the allowance for commercial loan losses was insignificant in the three and six months ended June 30, 2016 and 2015.

Retail Finance Receivables GM Financial uses proprietary scoring systems in its underwriting process that measure the credit quality of retail finance receivables using several factors, such as credit bureau information, consumer credit risk scores (e.g. FICO scores or its equivalent) and contract characteristics. In addition to GM Financial's proprietary scoring systems GM Financial considers other individual consumer factors such as employment history, financial stability and capacity to pay. Subsequent to origination GM Financial reviews the credit quality of retail receivables based on customer payment activity. Historically, at the time of loan origination substantially all of GM Financial's international consumers were considered to be prime credit quality. At June 30, 2016 and December 31, 2015, 55% and 60% of the retail finance receivables in North America were from consumers with sub-prime credit scores, which are defined as FICO scores or its equivalent of less than 620 at the time of loan origination.

An account is considered delinquent if a substantial portion of a scheduled payment has not been received by the date such payment was contractually due. At June 30, 2016 and December 31, 2015 the accrual of finance charge income had been suspended on delinquent retail finance receivables with contractual amounts due of $758 million and $778 million. The following table summarizes the contractual amount of delinquent contracts, which was not significantly different than the recorded investment of the retail finance receivables:
 
June 30, 2016
 
June 30, 2015
 
Amount
 
Percent of Contractual Amount Due
 
Amount
 
Percent of Contractual Amount Due
31-to-60 days delinquent
$
1,070

 
3.4
%
 
$
1,062

 
3.6
%
Greater-than-60 days delinquent
465

 
1.5
%
 
452

 
1.6
%
Total finance receivables more than 30 days delinquent
1,535

 
4.9
%
 
1,514

 
5.2
%
In repossession
51

 
0.2
%
 
46

 
0.2
%
Total finance receivables more than 30 days delinquent or in repossession
$
1,586

 
5.1
%
 
$
1,560

 
5.4
%

At June 30, 2016 and December 31, 2015 retail finance receivables classified as troubled debt restructurings and individually evaluated for impairment were $1.7 billion and $1.6 billion and the allowance for loan losses included $244 million and $220 million of specific allowances on these receivables.

Commercial Finance Receivables GM Financial's commercial finance receivables consist of dealer financings, primarily for inventory purchases. A proprietary model is used to assign a risk rating to each dealer. A credit review of each dealer is performed at least annually, and if necessary, the dealer's risk rating is adjusted on the basis of the review. Dealers in Group VI are subject to additional restrictions on funding, up to suspension of lines of credit and liquidation of assets. At June 30, 2016 and December 31, 2015 the commercial finance receivables on non-accrual status were insignificant. The following table summarizes the credit risk profile by dealer grouping of commercial finance receivables: 

7



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

 
June 30, 2016
 
December 31, 2015
Group I – Dealers with superior financial metrics
$
1,274

 
$
1,298

Group II – Dealers with strong financial metrics
3,008

 
2,573

Group III – Dealers with fair financial metrics
2,903

 
2,597

Group IV – Dealers with weak financial metrics
1,140

 
1,058

Group V – Dealers warranting special mention due to potential weaknesses
596

 
501

Group VI – Dealers with loans classified as substandard, doubtful or impaired
191

 
182

 
$
9,112

 
$
8,209


Note 5. Inventories
 
June 30, 2016
 
GMNA
 
GME
 
GMIO
 
GMSA
 
Total
Total productive material, supplies and work in process
$
3,550

 
$
680

 
$
1,180

 
$
887

 
$
6,297

Finished product, including service parts
4,239

 
2,538

 
1,213

 
739

 
8,729

Total inventories
$
7,789

 
$
3,218

 
$
2,393

 
$
1,626

 
$
15,026

 
December 31, 2015
 
GMNA
 
GME
 
GMIO
 
GMSA
 
Total
Total productive material, supplies and work in process
$
2,705

 
$
713

 
$
1,113

 
$
616

 
$
5,147

Finished product, including service parts
4,884

 
2,166

 
954

 
613

 
8,617

Total inventories
$
7,589

 
$
2,879

 
$
2,067

 
$
1,229

 
$
13,764


Note 6. Equity in Net Assets of Nonconsolidated Affiliates
 
Three Months Ended
 
Six Months Ended
 
June 30, 2016
 
June 30, 2015
 
June 30, 2016
 
June 30, 2015
Automotive China JVs equity income
$
471

 
$
503

 
$
989

 
$
1,022

Other joint ventures equity income
189

 
21

 
231

 
55

Total Equity income
$
660

 
$
524

 
$
1,220

 
$
1,077

 
 
 
 
There have been no significant ownership changes in our Automotive China joint ventures (Automotive China JVs) since December 31, 2015.

Dividends received from our nonconsolidated affiliates were $1.9 billion and $1.4 billion in the three months ended June 30, 2016 and 2015 and $2.0 billion and $1.4 billion in the six months ended June 30, 2016 and 2015. At June 30, 2016 and December 31, 2015 we had undistributed earnings of $1.3 billion and $2.2 billion related to our nonconsolidated affiliates.

Note 7. Variable Interest Entities
GM Financial uses special purpose entities (SPEs) that are considered variable interest entities (VIEs) to issue variable funding notes to third party bank-sponsored warehouse facilities or asset-backed securities to investors in securitization transactions. The debt issued by these VIEs is backed by finance receivables and leasing related assets transferred by GM Financial to the VIEs (Securitized Assets). GM Financial holds variable interests in the VIEs that could potentially be significant to the VIEs. GM Financial determined that it is the primary beneficiary of the SPEs because: (1) the servicing responsibilities for the Securitized Assets give GM Financial the power to direct the activities that most significantly impact the performance of the VIEs; and (2) the variable interests in the VIEs give GM Financial the obligation to absorb losses and the right to receive residual returns that could potentially be significant. The assets of the VIEs serve as the sole source of repayment for the debt issued by these entities. Investors in the notes issued by the VIEs do not have recourse to GM Financial or its other assets, with the exception of customary representation and warranty repurchase provisions and indemnities that GM Financial provides as the servicer. GM Financial is not required and does not currently intend to provide additional financial support to these SPEs. While these subsidiaries are

8



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

included in GM Financial's condensed consolidated financial statements, they are separate legal entities and their assets are legally owned by them and are not available to GM Financial's creditors. The following table summarizes the assets and liabilities related to GM Financial's consolidated VIEs:
 
June 30, 2016
 
December 31, 2015
Restricted cash – current
$
1,432

 
$
1,345

Restricted cash – non-current
$
562

 
$
531

GM Financial receivables, net of fees – current
$
12,989

 
$
12,224

GM Financial receivables, net of fees – non-current
$
11,408

 
$
12,597

GM Financial equipment on operating leases, net
$
17,533

 
$
11,684

GM Financial short-term debt and current portion of long-term debt
$
15,104

 
$
13,545

GM Financial long-term debt
$
18,177

 
$
15,841


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

Note 8. Automotive and GM Financial Debt


June 30, 2016
 
December 31, 2015
 
Carrying Amount
 
Fair Value
 
Carrying Amount
 
Fair Value
Total automotive debt
$
10,820

 
$
11,934

 
$
8,765

 
$
9,088

Fair value utilizing Level 1 inputs
 
 
$
9,701

 
 
 
$
6,972

Fair value utilizing Level 2 inputs
 
 
$
2,233

 
 
 
$
2,116


The fair value of automotive debt measured utilizing Level 1 inputs was based on quoted prices in active markets for identical instruments that a market participant can access at the measurement date. The fair value of automotive debt measured utilizing Level 2 inputs was based on a discounted cash flow model using observable inputs. This model utilizes observable inputs such as contractual repayment terms and benchmark yield curves, plus a spread based on our senior unsecured notes that is intended to represent our nonperformance risk. We obtain the benchmark yield curves and yields on unsecured notes from independent sources that are widely used in the financial industry. At June 30, 2016 and December 31, 2015 the fair value of automotive debt exceeded its carrying amount due primarily to a decrease in bond yields compared to yields at the time of issuance.

In February 2016 we issued $2.0 billion in aggregate principal amount of senior unsecured notes comprising $1.25 billion of 6.60% notes due in 2036 and $750 million of 6.75% notes due in 2046. These notes contain terms and covenants customary of these types of securities including limitations on the amount of certain secured debt we may incur. The net proceeds from the issuance of these senior unsecured notes were used to fund discretionary contributions to our U.S. hourly pension plan as described in Note 10.

In May 2016 we amended and restated our two primary revolving credit facilities, increasing our aggregate borrowing capacity from $12.5 billion to $14.5 billion. These facilities consist of a three-year, $4.0 billion facility and a five-year, $10.5 billion facility. Both facilities are available to us as well as certain wholly-owned subsidiaries, including GM Financial. The three-year, $4.0 billion facility allows for borrowings in U.S. Dollars and other currencies and includes a GM Financial borrowing sub-limit of $1.0 billion and a letter of credit sub-facility of $1.0 billion. The five-year, $10.5 billion facility allows for borrowings in U.S. Dollars and other currencies and includes a GM Financial borrowing sub-limit of $3.0 billion and a letter of credit sub-limit of $500 million

The revolving credit facilities require us to maintain at least $4.0 billion in global liquidity and at least $2.0 billion in U.S. liquidity. If we fail to maintain an investment grade corporate rating from at least two of the following credit rating agencies: Fitch Ratings (Fitch), Moody's Investor Service (Moody's) and Standard & Poor's (S&P), we will be required to provide guarantees from certain subsidiaries under the terms of the revolving credit facilities. Interest rates on obligations under the revolving credit facilities are based on prevailing annual interest rates for Eurodollar loans or an alternative base rate, plus an applicable margin.

9



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

 
June 30, 2016
 
December 31, 2015
 
Carrying Amount
 
Fair Value
 
Carrying Amount
 
Fair Value
Secured debt
$
34,338

 
$
34,530

 
$
30,689

 
$
30,671

Unsecured debt
30,162

 
30,819

 
23,657

 
23,726

Total GM Financial debt
$
64,500

 
$
65,349

 
$
54,346

 
$
54,397

 
 
 
 
 
 
 
 
Fair value utilizing Level 2 inputs
 
 
$
60,953

 
 
 
$
48,716

Fair value utilizing Level 3 inputs
 
 
$
4,396

 
 
 
$
5,681


The fair value of GM Financial debt measured utilizing Level 2 inputs was based on quoted market prices for identical instruments and if unavailable, quoted market prices of similar instruments. For debt that has terms of one year or less or has been priced within the last six months, the carrying amount or par value is considered to be a reasonable estimate of fair value. The fair value of GM Financial debt measured utilizing Level 3 inputs was based on the discounted future net cash flows expected to be settled using current risk-adjusted rates.

Secured debt consists of revolving credit facilities and securitization notes payable. Most of the secured debt was issued by VIEs and is repayable only from proceeds related to the underlying pledged Securitized Assets. Refer to Note 7 for additional information on GM Financial's involvement with VIEs. In the six months ended June 30, 2016 GM Financial issued securitization notes payable of $8.4 billion and entered into new or renewed credit facilities with a total net additional borrowing capacity of $2.5 billion, which had substantially the same terms as existing debt.

Unsecured debt consists of senior notes, credit facilities, retail customer deposits and other unsecured debt. In March 2016 GM Financial issued $2.75 billion in aggregate principal amount of senior notes comprising $1.5 billion of 4.20% notes due in March 2021 and $1.25 billion of 5.25% notes due in March 2026. In May 2016 GM Financial issued $3.0 billion in aggregate principal amount of senior notes comprising $1.4 billion of 2.40% notes due in May 2019, $1.2 billion of 3.70% notes due in May 2023 and $400 million of floating rate notes due in May 2019. Also in May 2016 GM Financial issued Euro 500 million of 1.168% term notes due in May 2020. In July 2016 GM Financial issued $2.0 billion of 3.20% senior notes due in July 2021. Each of these notes contain terms and covenants including limitations on GM Financial's ability to incur certain liens.

GM Financial accepts deposits from retail banking customers in Germany. At June 30, 2016 the outstanding balance of these deposits was $1.8 billion, of which 36% were overnight deposits.

Note 9. Product Warranty and Related Liabilities
 
Three Months Ended
 
Six Months Ended
 
June 30, 2016
 
June 30, 2015
 
June 30, 2016
 
June 30, 2015
Warranty balance at beginning of period
$
9,233

 
$
9,242

 
$
9,279

 
$
9,646

Warranties issued and assumed in period  recall campaigns and courtesy transportation
220

 
203

 
374

 
386

Warranties issued and assumed in period  policy and product warranty
663

 
604

 
1,212

 
1,166

Payments
(924
)
 
(1,032
)
 
(1,835
)
 
(2,106
)
Adjustments to pre-existing warranties
206

 
243

 
289

 
329

Effect of foreign currency and other
(32
)
 
36

 
47

 
(125
)
Warranty balance at end of period
$
9,366

 
$
9,296

 
$
9,366

 
$
9,296


Note 10. Pensions and Other Postretirement Benefits

10



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

 
Three Months Ended June 30, 2016
 
Three Months Ended June 30, 2015
 
Pension Benefits
 
Global OPEB Plans
 
Pension Benefits
 
Global OPEB Plans
 
U.S.
 
Non-U.S.
 
 
U.S.
 
Non-U.S.
 
Service cost
$
96

 
$
89

 
$
4

 
$
102

 
$
95

 
$
6

Interest cost
553

 
140

 
50

 
688

 
195

 
59

Expected return on plan assets
(944
)
 
(179
)
 

 
(974
)
 
(202
)
 

Amortization of prior service cost (credit)
(1
)
 
3

 
(3
)
 
(1
)
 
4

 
(3
)
Amortization of net actuarial (gains) losses
(7
)
 
48

 
5

 
2

 
59

 
9

Curtailments, settlements and other

 

 

 

 
107

 

Net periodic pension and OPEB (income) expense
$
(303
)
 
$
101

 
$
56

 
$
(183
)
 
$
258

 
$
71

 
Six Months Ended June 30, 2016
 
Six Months Ended June 30, 2015
 
Pension Benefits
 
Global OPEB Plans
 
Pension Benefits
 
Global OPEB Plans
 
U.S.
 
Non-U.S.
 
 
U.S.
 
Non-U.S.
 
Service cost
$
191

 
$
174

 
$
9

 
$
203

 
$
195

 
$
12

Interest cost
1,106

 
284

 
100

 
1,377

 
391

 
119

Expected return on plan assets
(1,889
)
 
(361
)
 

 
(1,948
)
 
(405
)
 

Amortization of prior service cost (credit)
(2
)
 
6

 
(7
)
 
(2
)
 
8

 
(6
)
Amortization of net actuarial (gains) losses
(13
)
 
95

 
10

 
4

 
117

 
17

Curtailments, settlements and other

 

 

 

 
107

 

Net periodic pension and OPEB (income) expense
$
(607
)
 
$
198

 
$
112

 
$
(366
)
 
$
413

 
$
142


Effective January 2016 the discount rate used to determine the service cost and interest cost for our pension and other postretirement benefits (OPEB) plans was based on individual annual yield curve rates. This refinement is considered a change in estimate and has been applied prospectively. The use of the individual annual yield curve rates has reduced the service cost and interest cost by $194 million and $385 million in the three and six months ended June 30, 2016, which will be offset in the actuarial gains and losses upon the next remeasurement of the plans' obligations.

We made discretionary contributions to our U.S. hourly pension plan of $2.0 billion in the six months ended June 30, 2016. These discretionary contributions were funded with the net proceeds from the issuance of the automotive senior unsecured notes described in Note 8.

The curtailment charges recorded in the three and six months ended June 30, 2015 were due primarily to the GM Canada hourly pension plan that was remeasured as a result of a voluntary separation program.

Note 11. Commitments and Contingencies
Litigation-Related Liability and Tax Administrative Matters In the normal course of business, we are named from time to time as a defendant in various legal actions, including arbitrations, class actions and other litigation, that arise in connection with our business as a global company. We identify below the material individual proceedings and investigatory activity in connection with which we believe a material loss is reasonably possible or probable. We accrue for matters when we believe that losses are probable and can be reasonably estimated. At June 30, 2016 and December 31, 2015 accruals were $1.3 billion and $1.2 billion and were recorded in Accrued liabilities and Other liabilities. In many proceedings, it is inherently difficult to determine whether any loss is probable or even reasonably possible or to estimate the size or range of the possible loss. Accordingly an adverse outcome from such proceedings could exceed the amounts accrued by an amount that could be material to our financial position, results of operations or cash flows in any particular reporting period.

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


11



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

Through July 15, 2016 we were aware of 100 putative class actions pending against GM in various federal and state trial courts in the U.S. and 21 putative class actions pending in various Provincial Courts in Canada alleging that consumers who purchased or leased vehicles manufactured by GM or General Motors Corporation had been economically harmed by one or more of the recalls announced in 2014 and/or the underlying vehicle conditions associated with those recalls (economic-loss cases). In general, these economic-loss cases seek recovery for purported compensatory damages, such as alleged diminution in value of the vehicles, as well as punitive damages, injunctive relief and other relief. There are also two civil actions brought by state governmental entities relating to the 2014 recalls that seek injunctive relief as well as economic damages and attorneys' fees for alleged violations of state laws.

Through July 15, 2016 we were aware of 285 actions pending in various federal and state trial courts in the U.S. and 16 actions pending in various Provincial Courts in Canada alleging injury or death as a result of defects that may be the subject of recalls announced in 2014 (personal injury cases). In general, these personal injury cases seek recovery for purported compensatory damages, punitive damages and other relief.

Since June 2014 the United States Judicial Panel on Multidistrict Litigation (JPML) has issued orders from time to time directing that certain pending economic-loss and personal injury federal lawsuits involving faulty or allegedly faulty ignition switches or other defects that may be related to the recalls announced in 2014 be transferred to, and consolidated in, a single federal court, the Southern District of New York (the multidistrict litigation). Through July 15, 2016 the JPML has transferred 307 pending cases to, and consolidated them with, the multidistrict litigation. At the court's suggestion, the parties to the multidistrict litigation engage from time to time in discussions of possible mechanisms to resolve pending litigation. Since September 17, 2015 we have reached various agreements with certain personal injury claimants regarding possible settlement of their claims.

In order to facilitate the resolution of the multidistrict litigation, the Southern District of New York (the district court) scheduled six cases involving personal injury for bellwether trials in 2016 (i.e., trials designed to be representative of the group of personal injury cases in the multidistrict litigation). Through July 15, 2016 two of the cases set for bellwether trials were dismissed with prejudice by the plaintiffs. In a third bellwether trial, a jury concluded that GM was not liable to the plaintiffs. In a fourth case set for a bellwether trial, GM and the plaintiff entered into a confidential settlement. The final two of the original six bellwether trials are scheduled to commence in September and November 2016, respectively. The district court has also scheduled additional personal injury bellwether trials for 2017. In addition to the federal bellwether trials, there are two bellwether personal injury trials scheduled to commence in August and September 2016, respectively, in a state court multidistrict litigation pending in Texas. Each bellwether trial will be tried on its facts and the result of any subsequent bellwether trial may be different from the earlier bellwether trials.

On July 15, 2016 the district court overseeing the multidistrict litigation issued a ruling on GM's motion to dismiss plaintiffs' complaint seeking damages for alleged economic loss relating to the ignition switch and other recalls by GM in 2014. The district court granted GM's motion in part and denied it in part. The district court dismissed plaintiffs' claims brought under the Racketeer Influenced and Corrupt Organization Act (RICO), and those brought by any plaintiff whose vehicle was not allegedly defective when sold. The district court also rejected Plaintiffs' broadest theory of damages – that plaintiffs could seek recovery for alleged reduction in the resale value of their vehicles due to damage to GM's reputation and brand as a result of the ignition switch matter. The district court also held that plaintiffs did not have a common basis for their claims across all defects and models to proceed as a single class, and that the remaining claims may have to proceed individually or in subclasses of vehicles affected by a common defect. Further, the district court held that the named plaintiffs may assert claims only on behalf of owners of the same vehicle models that they themselves purchased (or leased) or models with sufficiently similar defects, and that it will not specify the specific permissible class claims until the class-certification stage. Finally, the district court granted GM's motion to dismiss with respect to certain state law claims but denied it as to other state law claims. The court held that the viability of state law claims will depend on each state's specific laws and plaintiffs' specific factual allegations. While the ruling is limited to post-bankruptcy claims, we believe the district court's legal holdings rejecting plaintiffs' broadest damages theory and dismissing certain other claims should apply to similarly limit plaintiffs' pre-bankruptcy claims.

Because many plaintiffs in the actions described in the above paragraphs are suing over the conduct of General Motors Corporation or vehicles manufactured by that entity for liabilities not expressly assumed by GM, we moved to enforce the terms of the July 2009 Sale Order and Injunction (2009 Sale Order) issued by the United States Bankruptcy Court for the Southern District of New York (Bankruptcy Court) to preclude claims from being asserted against us for, among other things, personal injuries based on pre-sale accidents, any economic-loss claims based on acts or conduct of General Motors Corporation and claims asserting successor liability for obligations owed by General Motors Corporation (successor liability claims). On April 15, 2015 the Bankruptcy Court issued a decision precluding claims against us based upon pre-sale accidents, claims based upon the acts or conduct by General

12



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

Motors Corporation and successor liability claims, except for claims asserting liabilities that had been expressly assumed by us in the July 2009 Sale Agreement, and claims that could be asserted against us only if they were otherwise viable and arose solely out of our own independent post-closing acts and did not in any way rely on acts or conduct by General Motors Corporation. Plaintiffs appealed the Bankruptcy Court’s decision and we cross appealed with respect to certain issues to preserve our rights.

On July 13, 2016 a three judge panel of the United States Court of Appeals for the Second Circuit (Second Circuit) issued a decision and judgment affirming in part, reversing in part, and vacating portions of the Bankruptcy Court's April 15 decision and subsequent judgment. Among other things, the Second Circuit held that the 2009 Sale Order could not be enforced to bar claims against GM asserted by either plaintiffs who purchased used vehicles after the sale closing or against purchasers who asserted claims relating to the ignition switch defect, including pre-closing personal injury claims and economic loss claims. The Second Circuit also vacated that portion of the Bankruptcy Court judgment enforcing the 2009 Sale Order against plaintiffs with pre-sale claims based on defects other than the ignition switch and remanded that issue to the Bankruptcy Court for further proceedings. We intend to appeal the decision and judgment. In 2014, GM voluntarily established the Ignition Switch Recall Compensation Program, administered by an independent administrator, which provided compensation for individuals who suffered personal injuries resulting from the ignition switch defect, both before and after bankruptcy. As a result, certain pre-closing personal injury claims relating to the ignition switch defect were resolved through this program. Refer to Ignition Switch Recall Compensation Program below for a discussion of the payments made to-date under this program.

In addition on December 4, 2015 the Bankruptcy Court issued a judgment regarding certain issues, including the extent to which punitive damages could be asserted against GM based on claims in connection with vehicles manufactured by General Motors Corporation, for which GM assumed liability in the 2009 Sale Agreement. Various groups of plaintiffs have appealed that decision to the district court overseeing the multidistrict litigation.

In the putative shareholder class action filed in the United States District Court for the Eastern District of Michigan (Eastern District) on behalf of purchasers of our common stock from November 17, 2010 to July 24, 2014 (Shareholder Class Action), the lead plaintiff, the New York State Teachers' Retirement System alleged that GM and several current and former officers and employees made material misstatements and omissions relating to problems with the ignition switch and other matters in SEC filings and other public statements.

On February 11, 2016 the Delaware Supreme Court affirmed the dismissal of four consolidated shareholder derivative actions that had been pending in the Delaware Chancery Court. In light of the Delaware Supreme Court’s decision, proceedings have resumed in the two consolidated shareholder derivative actions in the Eastern District that had been stayed pending disposition of the Delaware cases and the Eastern District is now considering our motion to dismiss in those actions. During the three months ended March 31, 2016 an additional shareholder derivative action was filed in the Eastern District against certain current and former GM directors and officers making similar allegations to the two other shareholder derivative actions that are pending in the Eastern District. This new derivative action has been transferred to the same judge handling those two other shareholder derivative actions. Two derivative actions filed in the Circuit Court of Wayne County, Michigan, have been consolidated and remain stayed pending disposition of the federal derivative actions.

In connection with the 2014 recalls, various investigations, inquiries and complaints have been received from the United States Attorney’s Office for the Southern District of New York (the Office), Congress, the SEC, Transport Canada and 50 state attorneys general. In connection with the foregoing we have received subpoenas and requests for additional information and we have participated in discussions with various governmental authorities. We have not received inquiries from the committees in Congress for a substantial period of time and are unaware of any further action they may take. On June 3, 2015 we received notice of an investigation by the Federal Trade Commission (FTC) concerning certified pre-owned vehicle advertising where dealers had certified vehicles that allegedly needed recall repairs. On January 28, 2016 the FTC published a proposed consent agreement for public comment. The public comment period has closed; the matter remains pending before the FTC. We believe we are cooperating fully with all pending requests for information in ongoing investigations. Such matters could in the future result in the imposition of material damages, fines, civil consent orders, civil and criminal penalties or other remedies.

As described more specifically below, we have resolved, partially or totally, several matters relating to the recalls announced in 2014, including the recognition of additional liabilities for such matters.

First, with regard to the investigation by the Office, on September 16, 2015 we entered into a Deferred Prosecution Agreement (the DPA) with the Office regarding its investigation of the events leading up to certain recalls regarding faulty ignition switches. Under the DPA we have paid the United States $900 million as a financial penalty, and we agreed to retain an independent monitor

13



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

to review and assess our policies, practices or procedures related to statements about motor vehicle safety, the provision of information to those responsible for recall decisions, recall processes and addressing known defects in certified pre-owned vehicles. In addition, the Office agreed to recommend to the U.S. District Court for the Southern District of New York (Southern District) that prosecution of GM on the two-count information filed in the Southern District be deferred for three years. The Office also agreed that if we are in compliance with all of our obligations under the DPA, the Office will, within 30 days after the expiration of the period of deferral (including any extensions thereto), seek dismissal with prejudice of the two-count information filed against GM. For a further description of the terms and conditions of the DPA refer to Note 15 of our 2015 Form 10-K.
 
Second, on May 23, 2016 the district court entered a judgment approving a class-wide settlement of the Shareholder Class Action described above for $300 million. One significant shareholder opted out of the settlement prior to approval and one shareholder has filed an appeal of the decision approving the settlement.

Third, on September 17, 2015 we announced we had reached a memorandum of understanding regarding a $275 million settlement that could potentially cover approximately 1,400 personal injury claimants who have lawsuits pending in the multidistrict litigation or who have otherwise asserted claims related to the ignition switch recall or certain other recalls announced in 2014. In December 2015 the court overseeing the multidistrict litigation established a qualified settlement fund and appointed a special master to administer certain facets of the settlement pursuant to the terms of the memorandum of understanding. The special master commenced his work in the three months ended December 31, 2015 and his work continues.

The total amount accrued at June 30, 2016 for the remaining investigations, claims and/or lawsuits relating to the ignition switch recalls and other related recalls represents a combination of our best single point estimates where determinable and, where no such single point estimate is determinable, our estimate of the low end of the range of probable loss with regard to such matters, if that is determinable. We believe it is probable that we will incur additional liabilities beyond what has already been accrued with regard to at least a portion of the remaining matters, whether through settlement or judgment; however, we are currently unable to estimate an overall amount or range of loss because these matters involve significant uncertainties. The uncertainties include the legal theory or the nature of the investigations, claims and/or lawsuits, the complexity of the facts, the lack of documentation available to us with respect to particular cases or groups of cases, the results of any investigation or litigation and the timing of resolution of the investigation or litigations, including any appeals, and further proceedings following the Second Circuit's July 13 decision, and the district court's July 15 decision. We will continue to consider resolution of pending matters involving ignition switch recalls and other recalls where it makes sense to do so.

GM Canada Dealers' Claim On February 12, 2010 a claim was filed in the Ontario Superior Court of Justice against GM Canada on behalf of a purported class of over 200 former GM Canada dealers (the Plaintiff Dealers) which had entered into wind-down agreements with GM Canada. In May 2009 in the context of the global restructuring of GM's business and the possibility that GM Canada might be required to initiate insolvency proceedings, GM Canada offered the Plaintiff Dealers the wind-down agreements to assist with their exit from the GM Canada dealer network and to facilitate winding down their operations in an orderly fashion. The Plaintiff Dealers allege that their Dealer Sales and Service Agreements were wrongly terminated by GM Canada and that GM Canada failed to comply with certain disclosure obligations, breached its statutory duty of fair dealing and unlawfully interfered with the Plaintiff Dealers' statutory right to associate in an attempt to coerce the Plaintiff Dealers into accepting the wind-down agreements. The Plaintiff Dealers seek damages and assert that the wind-down agreements are rescindable. The Plaintiff Dealers' initial pleading makes reference to a claim “not exceeding” $750 million Canadian Dollar, without explanation of any specific measure of damages. On March 1, 2011 the court approved certification of a class for the purpose of deciding a number of specifically defined issues. A number of former dealers opted out of participation in the litigation, leaving 181 dealers in the certified class. On July 8, 2015 the Ontario Superior Court dismissed the Plaintiff Dealers’ claim against GM Canada. The court also dismissed GM Canada’s counterclaim against the Plaintiff Dealers for repayment of the wind-down payments made to them by GM Canada as well as for other relief. All parties have filed notices of appeal. We anticipate that the appeal will be heard in 2016.

GM Korea Wage Litigation Commencing on or about September 29, 2010 current and former hourly employees of GM Korea Company (GM Korea) filed eight separate group actions in the Incheon District Court in Incheon, Korea. The cases, which in aggregate involve more than 10,000 employees, allege that GM Korea failed to include bonuses and certain allowances in its calculation of Ordinary Wages due under the Presidential Decree of the Korean Labor Standards Act. On November 23, 2012 the Seoul High Court (an intermediate level appellate court) affirmed a decision of the Incheon District Court in a case involving five GM Korea employees which was contrary to GM Korea's position. GM Korea appealed to the Supreme Court of the Republic of Korea (Supreme Court). On May 29, 2014 the Supreme Court remanded the case to the Seoul High Court for consideration consistent with earlier Supreme Court precedent holding that while fixed bonuses should be included in the calculation of Ordinary

14



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

Wages, claims for retroactive application of this rule would be barred under certain circumstances. On reconsideration, the Seoul High Court held in GM Korea’s favor on October 30, 2015, after which plaintiffs appealed to the Supreme Court. In July 2014 GM Korea and its labor union also agreed to include bonuses and certain allowances in Ordinary Wages retroactive to March 1, 2014. Therefore our accrual related to these cases was reclassified from a contingent liability to the Pensions liability. We estimate our reasonably possible loss in excess of amounts accrued to be 597 billion South Korean Won (equivalent to $513 million) at June 30, 2016, which relates to periods before March 1, 2014. We are also party to litigation with current and former salaried employees over allegations relating to Ordinary Wages regulation. On November 26 and 27, 2015 the Supreme Court remanded two salary cases to the Seoul High Court for a review of the merits. Both the scope of claims asserted and GM Korea's assessment of any or all of the individual claim elements may change if new information becomes available. These cases are currently pending before various courts in Korea.

Other Litigation-Related Liability and Tax Administrative Matters Various other legal actions, governmental investigations, claims and proceedings are pending against us including matters arising out of alleged product defects; employment-related matters; governmental regulations relating to product and workplace safety, emissions and fuel economy; product warranties; financial services; dealer, supplier and other contractual relationships; government regulations relating to payments to foreign companies; government regulations relating to competition issues; tax-related matters not subject to Accounting Standards Codification 740, Income Taxes (indirect tax-related matters); and environmental matters.

Indirect tax-related matters are being litigated globally pertaining to value added taxes, customs, duties, sales, property taxes and other non-income tax related tax exposures. The various non-U.S. labor-related matters include claims from current and former employees related to alleged unpaid wage, benefit, severance and other compensation matters. Certain South American administrative proceedings are indirect tax-related and may require that we deposit funds in escrow. Escrow deposits may range from $500 million to $600 million at June 30, 2016. Some of the matters may involve compensatory, punitive or other treble damage claims, environmental remediation programs or sanctions that, if granted, could require us to pay damages or make other expenditures in amounts that could not be reasonably estimated at June 30, 2016.We believe that appropriate accruals have been established for losses that are probable and can be reasonably estimated. For indirect tax-related matters we estimate our reasonably possible loss in excess of amounts accrued to be up to approximately $900 million at June 30, 2016.

Takata Matters On May 4, 2016 the National Highway Transportation Safety Administration (NHTSA) issued an amended consent order requiring Takata Corporation (Takata) to file defect information reports (DIRs) for previously unrecalled front airbag inflators on a multi-year, risk-based schedule through 2019 impacting tens of millions of vehicles produced by numerous automotive manufacturers. NHTSA concluded that the likely root cause of the rupturing of the airbag inflators is a function of time, temperature cycling and environmental moisture. On May 16, 2016 Takata issued its first DIR in connection with the amended consent order.

Although we do not believe there is a safety defect at this time in any GM vehicles within scope of the Takata DIR, in cooperation with NHTSA we filed a Preliminary DIR on May 27, 2016, updated as of June 13, 2016, covering 2.5 million of our full-size pick-up trucks and sport utility vehicles (SUVs). As a result of discussions with NHTSA and as described in the Preliminary DIR, GM will have an opportunity to prove to NHTSA that the inflators in these vehicles do not pose an unreasonable risk to safety. If we do not make such a showing by September 2016, 120 days prior to the due date of the next DIR, then we will be obligated to repair the front passenger airbag inflators in these vehicles. We presently believe that the results of further testing and analysis will demonstrate that the vehicles do not present an unreasonable risk to safety and that no repair will ultimately be required.

Our analysis and data presently indicate that the inflators in the GM vehicles within the scope of the Takata DIR and the amended consent order are currently performing as designed, show no significant signs of propellant degradation and, therefore, will not pose an unreasonable risk to motor vehicle safety through 2019, if at all, given the unique vehicle platform and design characteristics of the vehicles and the differences in the airbag inflators in those vehicles.

Accordingly, no provision has been made for any repair associated with our vehicles subject to the Preliminary DIR and amended consent order. However, in the event we are ultimately obligated to repair the inflators in these vehicles, we estimate a reasonably possible cost of up to $320 million for the 2.5 million vehicles subject to the Preliminary DIR and an additional $550 million for up to 4.3 million vehicles subject to future Takata DIRs under the amended consent order.

Product Liability With respect to product liability claims (other than claims relating to the ignition switch recalls discussed above) involving our and General Motors Corporation products, we believe that any judgment against us for actual damages will be adequately covered by our recorded accruals and, where applicable, excess liability insurance coverage. In addition we indemnify dealers for certain product liability related claims including products sold by General Motors Corporation's dealers. At June 30,

15



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

2016 and December 31, 2015 liabilities of $687 million and $712 million were recorded in Accrued liabilities and Other liabilities for the expected cost of all known product liability claims plus an estimate of the expected cost for product liability claims that have already been incurred and are expected to be filed in the future for which we are self-insured. In light of vehicle recalls in recent years it is reasonably possible that our accruals for product liability claims may increase in future periods in material amounts, although we cannot estimate a reasonable range of incremental loss based on currently available information.

Ignition Switch Recall Compensation Program In the three months ended June 30, 2014 we created a compensation program (the Program) for accident victims who died or suffered physical injury (or for their families) as a result of a faulty ignition switch related to the 2.6 million vehicles recalled in the three months ended March 31, 2014. The Program is being administered by an independent administrator and accepted claims for review from August 1, 2014 through January 31, 2015. The Program completed its claims review process in the three months ended September 30, 2015, but continues to process acceptances that require court approval and resolve liens related to accepted claims. Accident victims (or their families) that accept a payment under the Program agree to settle all claims against GM related to the accident. The following table summarizes the activity for the Program:
 
Six Months Ended
 
June 30, 2016
 
June 30, 2015
Balance at beginning of period
$
66

 
$
315

Provisions

 
225

Payments
(50
)
 
(177
)
Balance at end of period
$
16

 
$
363


Guarantees We enter into indemnification agreements for liability claims involving products manufactured primarily by certain joint ventures. We also provide vehicle repurchase guarantees and payment guarantees on commercial loans outstanding with third parties such as dealers. These guarantees terminate in years ranging from 2016 to 2030 or upon the occurrence of specific events or are ongoing and we believe that the related potential costs incurred are adequately covered by recorded accruals. The liability recorded was $68 million and $72 million and the maximum liability, calculated as future undiscounted payments, was $4.2 billion and $2.6 billion for these guarantees at June 30, 2016 and December 31, 2015.

In some instances certain assets of the party whose debt or performance we have guaranteed may offset, to some degree, the amount of certain guarantees. Our payables to the party whose debt or performance we have guaranteed may also reduce the amount of certain guarantees. If vehicles are required to be repurchased under vehicle repurchase obligations, the total exposure would be reduced to the extent vehicles are able to be resold to another dealer.

We periodically enter into agreements that incorporate indemnification provisions in the normal course of business. It is not possible to estimate our maximum exposure under these indemnifications or guarantees due to the conditional nature of these obligations. Insignificant amounts have been recorded for such obligations as the majority of them are not probable or estimable at this time and the fair value of the guarantees at issuance was insignificant.

Note 12. Income Taxes
For interim income tax reporting we estimate our annual effective tax rate and apply it to our year to date ordinary income (loss). Tax jurisdictions with a projected or year to date loss for which a tax benefit cannot be realized are excluded. The tax effects of unusual or infrequently occurring items, including changes in judgment about valuation allowances and effects of changes in tax laws or rates, are reported in the interim period in which they occur. We have open tax years from 2006 to 2015 with various significant tax jurisdictions.

In the three months ended June 30, 2016 income tax expense of $871 million primarily resulted from tax expense attributable to entities included in our effective tax rate calculation of $1.2 billion, partially offset by tax benefits related to foreign currency losses. In the three months ended June 30, 2015 income tax expense of $577 million resulted from tax expense attributable to entities included in our effective tax rate calculation of $793 million, partially offset by net favorable discrete adjustments related to uncertain tax positions and other items.

In the six months ended June 30, 2016 income tax expense of $1.4 billion primarily resulted from tax expense attributable to entities included in our effective tax rate calculation of $2.0 billion, partially offset by tax benefits related to foreign currency losses, tax audit settlements and deduction taken for stock investments in non-U.S. affiliates. In the six months ended June 30,

16



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

2015 income tax expense of $1.1 billion resulted from tax expense attributable to entities included in our effective tax rate calculation of $1.3 billion, partially offset by net favorable discrete adjustments related to uncertain tax positions and other items.

At June 30, 2016 we had $35.0 billion of net deferred tax assets consisting of: (1) net operating losses and income tax credits; (2) capitalized research expenditures; and (3) other timing differences that are available to offset future income tax liabilities.

Note 13. Restructuring and Other Initiatives
We have executed various restructuring and other initiatives and we plan to execute additional initiatives in the future, if necessary, in order to align manufacturing capacity and other costs with prevailing global automotive production and to improve the utilization of remaining facilities. To the extent these programs involve voluntary separations, no liabilities are generally recorded until offers to employees are accepted. If employees are involuntarily terminated, a liability is generally recorded at the communication date. Related charges are recorded in Automotive cost of sales and Automotive selling, general and administrative expense. The following tables summarize the reserves and charges related to restructuring and other initiatives, including postemployment benefit reserves and charges, by segment:
 
GMNA
 
GME
 
GMIO
 
GMSA
 
Total
Balance at January 1, 2016
$
143

 
$
270

 
$
161

 
$
7

 
$
581

Additions, interest accretion and other
241

 
5

 
44

 
15

 
305

Payments
(23
)
 
(85
)
 
(31
)
 
(18
)
 
(157
)
Revisions to estimates and effect of foreign currency
6

 
12

 
6

 

 
24

Balance at March 31, 2016
367

 
202

 
180

 
4

 
753

Additions, interest accretion and other
1

 
7

 
32

 
7

 
47

Payments
(257
)
 
(51
)
 
(32
)
 
(7
)
 
(347
)
Revisions to estimates and effect of foreign currency

 
(2
)
 
(6
)
 
1

 
(7
)
Balance at June 30, 2016
$
111

 
$
156

 
$
174

 
$
5

 
$
446



 
GMNA
 
GME
 
GMIO
 
GMSA
 
Total
Balance at January 1, 2015
$
459

 
$
751

 
$
166

 
$
2

 
$
1,378

Additions, interest accretion and other
9

 
127

 
37

 
11

 
184

Payments
(19
)
 
(385
)
 
(22
)
 
(11
)
 
(437
)
Revisions to estimates and effect of foreign currency
(11
)
 
(53
)
 
(10
)
 

 
(74
)
Balance at March 31, 2015
438

 
440

 
171

 
2

 
1,051

Additions, interest accretion and other
65

 
9

 
54

 
35

 
163

Payments
(19
)
 
(73
)
 
(53
)
 
(29
)
 
(174
)
Revisions to estimates and effect of foreign currency
1

 
17

 
(8
)
 

 
10

Balance at June 30, 2015(a)
$
485

 
$
393

 
$
164

 
$
8

 
$
1,050

________
(a)
Included temporary layoff benefits of $353 million at June 30, 2015 for GMNA.

In the three and six months ended June 30, 2016 restructuring and other initiatives related primarily to: (1) charges of $240 million in the three months ended March 31, 2016 at GMNA related to the cash severance incentive program to qualified U.S. hourly employees under our 2015 labor agreement with the International Union, United Automobile, Aerospace and Agriculture Implement Workers of America (UAW); and (2) separation and other programs in Australia, Korea and India and the withdrawal of the Chevrolet brand from Europe which collectively had a total cost since inception of $770 million and affected a total of approximately 4,530 employees at GMIO through June 30, 2016. We expect to complete these programs in GMIO in 2017 and incur additional related restructuring and other charges of approximately $90 million.

In the three and six months ended June 30, 2015 restructuring and other initiatives related primarily to: (1) the change in our business model in Russia for which we recorded total pre-tax charges of $443 million at GME and GMIO in the six months ended

17



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

June 30, 2015, of which $125 million is reflected in the table above; and (2) separation and other programs in Australia, Korea, Thailand and Indonesia and the withdrawal of the Chevrolet brand from Europe which had a total cost since inception of $605 million at GMIO through June 30, 2015.

Note 14. Stockholders' Equity
We have 2.0 billion shares of preferred stock and 5.0 billion shares of common stock authorized for issuance. At June 30, 2016 and December 31, 2015 we had 1.6 billion and 1.5 billion shares of common stock issued and outstanding, respectively. In the six months ended June 30, 2016 and 2015 we purchased 10 million and 55 million shares of our outstanding common stock for $300 million and $2.0 billion as part of the common stock repurchase program announced in March 2015, which our Board of Directors increased and extended in January 2016. Our total dividends declared on common stock were $591 million and $570 million in the three months ended June 30, 2016 and 2015 and $1.2 billion and $1.1 billion in the six months ended June 30, 2016 and 2015, respectively.

The following table summarizes the significant components of Accumulated other comprehensive loss:
 
Three Months Ended
 
Six Months Ended
 
June 30, 2016
 
June 30, 2015
 
June 30, 2016
 
June 30, 2015
Foreign Currency Translation Adjustments
 
 
 
 
 
 
 
Balance at beginning of period
$
(1,949
)
 
$
(881
)
 
$
(2,034
)
 
$
(1,064
)
Other comprehensive income (loss) before reclassification adjustment, net of tax(a)
(3
)
 
(149
)
 
68

 
(127
)
Reclassification adjustment, net of tax(a)(b)
(4
)
 
6

 
(9
)
 
176

Other comprehensive income (loss), net of tax(a)
(7
)
 
(143
)
 
59

 
49

Other comprehensive income (loss) attributable to noncontrolling interests, net of tax(a)
(3
)
 
1

 
16

 
(8
)
Balance at end of period
$
(1,959
)
 
$
(1,023
)
 
$
(1,959
)
 
$
(1,023
)
Defined Benefit Plans
 
 
 
 
 
 
 
Balance at beginning of period
$
(6,121
)
 
$
(6,452
)
 
$
(5,999
)
 
$
(7,006
)
Other comprehensive income (loss) before reclassification adjustment, net of tax(a)
133

 
(147
)
 
(15
)
 
341

Reclassification adjustment, net of tax(a)(c)
38

 
82

 
64

 
148

Other comprehensive income (loss), net of tax(a)
171

 
(65
)
 
49

 
489

Balance at end of period
$
(5,950
)
 
$
(6,517
)
 
$
(5,950
)
 
$
(6,517
)
_______
(a)
The income tax effect was insignificant in the three and six months ended June 30, 2016 and 2015.
(b)
Related to the change of our business model in Russia in the six months ended June 30, 2015. Included in Automotive cost of sales.
(c)
Included in the computation of net periodic pension and OPEB (income) expense. Refer to Note 10 for additional information.

Note 15. Earnings Per Share
Basic and diluted earnings per share are computed by dividing Net income attributable to common stockholders by the weighted-average common shares outstanding in the period. Diluted earnings per share is computed by giving effect to all potentially dilutive securities that are outstanding.

18



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

 
Three Months Ended
 
Six Months Ended
 
June 30, 2016
 
June 30, 2015
 
June 30, 2016
 
June 30, 2015
Net income attributable to common stockholders – basic
$
2,866

 
$
1,117

 
$
4,819

 
$
2,062

Less: earnings adjustment for dilutive stock compensation rights
(1
)
 
(4
)
 
(2
)
 
(1
)
Net income attributable to common stockholders – diluted
$
2,865

 
$
1,113

 
$
4,817

 
$
2,061

 
 
 
 
 
 
 
 
Weighted-average common shares outstanding – basic
1,548

 
1,596

 
1,547

 
1,606

Dilutive effect of warrants and awards under stock incentive plans
33

 
64

 
33

 
67

Weighted-average common shares outstanding – diluted
1,581

 
1,660

 
1,580

 
1,673

 
 
 
 
 
 
 
 
Diluted earnings per common share
$
1.81

 
$
0.67

 
$
3.05

 
$
1.23


In the three and six months ended June 30, 2016 stock options to purchase 26 million shares were not included in the computation of diluted earnings per share because the stock options would have had an antidilutive effect. In the three and six months ended June 30, 2015 warrants to purchase 46 million shares were not included in the computation of diluted earnings per share because the warrants would have had an antidilutive effect. The warrants expired December 31, 2015.

Note 16. Segment Reporting

We analyze the results of our business through the following segments: GMNA, GME, GMIO, GMSA and GM Financial. The chief operating decision maker evaluates the operating results and performance of our automotive segments through income before interest and income taxes, as adjusted for additional amounts, which is presented net of noncontrolling interests. The chief operating decision maker evaluates GM Financial through income before income taxes-adjusted because he/she believes interest income and interest expense are part of operating results when assessing and measuring the operational and financial performance of the segment. Each segment has a manager responsible for executing our strategies. Our automotive manufacturing operations are integrated within the segments, benefit from broad-based trade agreements and are subject to regulatory requirements. While not all vehicles within a segment are individually profitable on a fully allocated cost basis, those vehicles attract customers to dealer showrooms and help maintain sales volumes for other, more profitable vehicles and contribute towards meeting required fuel efficiency standards. Because of these and other factors, we do not manage our business on an individual brand or vehicle basis.

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

GMNA primarily meets the demands of customers in North America with vehicles developed, manufactured and/or marketed under the Buick, Cadillac, Chevrolet and GMC brands. The demands of customers outside North America are primarily met with vehicles developed, manufactured and/or marketed under the Buick, Cadillac, Chevrolet, GMC, Holden, Opel and Vauxhall brands. We also have equity ownership stakes directly or indirectly in entities through various regional subsidiaries, primarily in Asia. These companies design, manufacture and/or market vehicles under the Baojun, Buick, Cadillac, Chevrolet, Jiefang and Wuling brands.

Our automotive operations' interest income and interest expense are recorded centrally in Corporate. Corporate assets consist primarily of cash and cash equivalents, marketable securities and intercompany balances. All intersegment balances and transactions have been eliminated in consolidation. The following tables summarize key financial information by segment:

19



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

 
At and For the Three Months Ended June 30, 2016
 
GMNA
 
GME
 
GMIO
 
GMSA
 
Corporate
 
Eliminations
 
Total Automotive
 
GM Financial
 
Eliminations
 
Total
Net sales and revenue
$
30,195

 
$
5,386

 
$
2,825

 
$
1,638

 
$
45

 
 
 
$
40,089

 
$
2,292

 
$
(9
)
 
$
42,372

Income (loss) before automotive interest and taxes-adjusted
$
3,647

 
$
137

 
$
169

 
$
(121
)
 
$
(145
)
 
 
 
$
3,687

 
$
266

 
$
(6
)
 
$
3,947

Adjustments(a)
$

 
$

 
$

 
$

 
$
(115
)
 
 
 
$
(115
)
 
$

 
$

 
(115
)
Automotive interest income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
52

Automotive interest expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(147
)
Net (loss) attributable to noncontrolling interests
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(16
)
Income before income taxes
 
 
 
 
 
 
 
 
 
</