10-Q 1 gm2017q1.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 March 31, 2017
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
gmmainlogoa06.jpg
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, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer  þ  Accelerated filer  ¨  Non-accelerated filer  ¨  Smaller reporting company  ¨ Emerging growth company  ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. Yes ¨  No ¨
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 April 21, 2017 the number of shares outstanding of common stock was 1,509,111,353 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.
Disposition of Business
 
Note 3.
Marketable Securities
 
Note 4.
GM Financial Receivables
 
Note 5.
Inventories
 
Note 6.
Equipment on Operating Leases
 
Note 7.
Equity in Net Assets of Nonconsolidated Affiliates
 
Note 8.
Variable Interest Entities
 
Note 9.
Automotive and GM Financial Debt
 
Note 10.
Derivative Financial Instruments
 
Note 11.
Product Warranty and Related Liabilities
 
Note 12.
Pensions and Other Postretirement Benefits
 
Note 13.
Commitments and Contingencies
 
Note 14.
Income Taxes
 
Note 15.
Restructuring and Other Initiatives
 
Note 16.
Stockholders' Equity
 
Note 17.
Earnings Per Share
 
Note 18.
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
 
March 31, 2017
 
March 31, 2016
Net sales and revenue
 
 
 
Automotive
$
38,325

 
$
35,195

GM Financial
2,875

 
2,070

Total net sales and revenue
41,200

 
37,265

Costs and expenses
 
 
 
Automotive cost of sales
33,105

 
30,589

GM Financial interest, operating and other expenses
2,666

 
1,886

Automotive selling, general and administrative expense
2,684

 
2,818

Total costs and expenses
38,455

 
35,293

Operating income
2,745

 
1,972

Automotive interest expense
144

 
127

Interest income and other non-operating income, net
161

 
85

Equity income (Note 7)
555

 
560

Income before income taxes
3,317

 
2,490

Income tax expense (Note 14)
700

 
559

Net income
2,617

 
1,931

Net (income) loss attributable to noncontrolling interests
(9
)
 
22

Net income attributable to common stockholders
$
2,608

 
$
1,953

 
 
 
 
Earnings per share (Note 17)
 
 
 
Basic
 
 
 
Basic earnings per common share
$
1.73

 
$
1.26

Weighted-average common shares outstanding
1,505

 
1,546

Diluted
 
 
 
Diluted earnings per common share
$
1.70

 
$
1.24

Weighted-average common shares outstanding
1,532

 
1,580

 
 
 
 
Dividends declared per common share
$
0.38

 
$
0.38

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In millions) (Unaudited)
 
Three Months Ended
 
March 31, 2017
 
March 31, 2016
Net income
$
2,617

 
$
1,931

Other comprehensive income (loss), net of tax (Note 16)
 
 
 
Foreign currency translation adjustments and other
108

 
84

Defined benefit plans
(29
)
 
(122
)
Other comprehensive income (loss), net of tax
79

 
(38
)
Comprehensive income
2,696

 
1,893

Comprehensive (income) loss attributable to noncontrolling interests
(8
)
 
42

Comprehensive income attributable to common stockholders
$
2,688

 
$
1,935


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 per share amounts) (Unaudited)
 
March 31, 2017
 
December 31, 2016
ASSETS
 
 
 
Current Assets
 
 
 
Cash and cash equivalents
$
12,864

 
$
12,960

Marketable securities (Note 3)
10,260

 
11,841

Accounts and notes receivable, net
10,898

 
9,638

GM Financial receivables, net (Note 4; Note 8 at VIEs)
23,903

 
22,065

Inventories (Note 5)
14,686

 
13,788

Equipment on operating leases, net (Note 6)
2,283

 
1,896

Other current assets
4,704

 
4,015

Total current assets
79,598

 
76,203

Non-current Assets
 
 
 
GM Financial receivables, net (Note 4; Note 8 at VIEs)
22,540

 
20,724

Equity in net assets of nonconsolidated affiliates (Note 7)
9,416

 
8,996

Property, net
37,202

 
35,820

Goodwill and intangible assets, net
6,193

 
6,259

GM Financial equipment on operating leases, net (Note 6; Note 8 at VIEs)
37,302

 
34,526

Deferred income taxes
34,263

 
35,092

Other assets
4,279

 
4,070

Total non-current assets
151,195

 
145,487

Total Assets
$
230,793

 
$
221,690

LIABILITIES AND EQUITY
 
 
 
Current Liabilities
 
 
 
Accounts payable (principally trade)
$
28,725

 
$
26,961

Short-term debt and current portion of long-term debt (Note 9)
 
 
 
Automotive
1,350

 
1,167

GM Financial (Note 8 at VIEs)
32,351

 
27,861

Accrued liabilities
28,478

 
29,192

Total current liabilities
90,904

 
85,181

Non-current Liabilities
 
 
 
Long-term debt (Note 9)
 
 
 
Automotive
9,602

 
9,585

GM Financial (Note 8 at VIEs)
47,598

 
46,015

Postretirement benefits other than pensions (Note 12)
5,771

 
5,803

Pensions (Note 12)
17,636

 
17,951

Other liabilities
13,068

 
13,080

Total non-current liabilities
93,675

 
92,434

Total Liabilities
184,579

 
177,615

Commitments and contingencies (Note 13)


 


Equity (Note 16)
 
 
 
Common stock, $0.01 par value
15

 
15

Additional paid-in capital
27,012

 
26,983

Retained earnings
28,195

 
26,168

Accumulated other comprehensive loss
(9,250
)
 
(9,330
)
Total stockholders’ equity
45,972

 
43,836

Noncontrolling interests
242

 
239

Total Equity
46,214

 
44,075

Total Liabilities and Equity
$
230,793

 
$
221,690


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)
 
Three Months Ended
 
March 31, 2017
 
March 31, 2016
Cash flows from operating activities
 
 
 
Net income
$
2,617

 
$
1,931

Depreciation, amortization and impairment charges
2,883

 
2,292

Foreign currency remeasurement and transaction losses
146

 
162

Undistributed earnings of nonconsolidated affiliates, net
(555
)
 
(519
)
Pension contributions and OPEB payments
(387
)
 
(1,922
)
Pension and OPEB income, net
(146
)
 
(151
)
Provision for deferred taxes
914

 
731

Change in other operating assets and liabilities
(3,431
)
 
(2,632
)
Net cash provided by (used in) operating activities
2,041

 
(108
)
Cash flows from investing activities

 

Expenditures for property
(2,005
)
 
(2,285
)
Available-for-sale marketable securities, acquisitions
(1,316
)
 
(1,773
)
Trading marketable securities, acquisitions

 
(104
)
Available-for-sale marketable securities, liquidations
2,914

 
3,272

Trading marketable securities, liquidations

 
291

Acquisition of companies/investments, net of cash acquired

 
(516
)
Purchases of finance receivables, net
(6,315
)
 
(4,161
)
Principal collections and recoveries on finance receivables
3,593

 
3,271

Purchases of leased vehicles, net
(4,760
)
 
(5,111
)
Proceeds from termination of leased vehicles
1,082

 
481

Other investing activities
2

 
(5
)
Net cash used in investing activities
(6,805
)
 
(6,640
)
Cash flows from financing activities

 

Net increase (decrease) in short-term debt
(264
)
 
738

Proceeds from issuance of debt (original maturities greater than three months)
11,589

 
12,234

Payments on debt (original maturities greater than three months)
(5,561
)
 
(5,550
)
Payments to purchase common stock

 
(300
)
Dividends paid
(573
)
 
(588
)
Other financing activities
(144
)
 
(107
)
Net cash provided by financing activities
5,047

 
6,427

Effect of exchange rate changes on cash, cash equivalents and restricted cash
103

 
152

Net increase (decrease) in cash, cash equivalents and restricted cash
386

 
(169
)
Cash, cash equivalents and restricted cash at beginning of period
15,160

 
17,332

Cash, cash equivalents and restricted cash at end of period
$
15,546

 
$
17,163

Significant Non-cash Investing and Financing Activity
 
 
 
Non-cash property additions
$
2,269

 
$
2,430


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, 2016
$
15

 
$
27,607

 
$
20,285

 
$
(8,036
)
 
$
452

 
$
40,323

Net income

 

 
1,953

 

 
(22
)
 
1,931

Other comprehensive loss

 

 

 
(18
)
 
(20
)
 
(38
)
Purchase of common stock

 
(167
)
 
(133
)
 

 

 
(300
)
Exercise of common stock warrants

 
7

 

 

 

 
7

Stock based compensation

 
15

 
(10
)
 

 

 
5

Cash dividends paid on common stock

 

 
(587
)
 

 

 
(587
)
Dividends declared or paid to noncontrolling interests

 

 

 

 
(8
)
 
(8
)
Other

 
1

 

 

 
(9
)
 
(8
)
Balance at March 31, 2016
$
15

 
$
27,463

 
$
21,508

 
$
(8,054
)
 
$
393

 
$
41,325

 
 
 
 
 
 
 
 
 
 
 
 
Balance at January 1, 2017
$
15

 
$
26,983

 
$
26,168

 
$
(9,330
)
 
$
239

 
$
44,075

Net income

 

 
2,608

 

 
9

 
2,617

Other comprehensive income (loss)

 

 

 
80

 
(1
)
 
79

Exercise of common stock warrants

 
4

 

 

 

 
4

Stock based compensation

 
24

 
(8
)
 

 

 
16

Cash dividends paid on common stock

 

 
(573
)
 

 

 
(573
)
Other

 
1

 

 

 
(5
)
 
(4
)
Balance at March 31, 2017
$
15

 
$
27,012

 
$
28,195

 
$
(9,250
)
 
$
242

 
$
46,214


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 and Maven, our ride- and car-sharing business, are classified as Corporate. Corporate includes certain centrally recorded income and costs such as interest, income taxes, corporate expenditures including autonomous vehicle-related engineering costs and certain nonsegment 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 2016 Form 10-K. Except for per share amounts or as otherwise specified, dollar amounts presented within tables are stated in millions.

In May 2014 the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, “Revenue from Contracts with Customers” (ASU 2014-09), which requires us to recognize revenue when a customer obtains control rather than when we have transferred substantially all risks and rewards of a good or service and requires expanded disclosures. ASU 2014-09, as amended, is effective for us beginning January 1, 2018. ASU 2014-09 will affect the amount and timing of certain revenue related transactions primarily resulting from the earlier recognition of certain sales incentives and fixed fee license arrangements. Upon adoption of ASU 2014-09 sales incentives will be recorded at the time of sale rather than at the later of sale or announcement and fixed fee license arrangements will be recognized when the customer is granted access to intellectual property instead of over the contract period. Certain transactions with daily rental car companies may also qualify to be accounted for as a sale as opposed to the current accounting as an operating lease. We expect to adopt the provisions of ASU 2014-09 on a modified retrospective basis through a cumulative adjustment to equity. We do not expect the adoption of ASU 2014-09 to be material to our consolidated financial statements. We continue to assess the overall impact the adoption of ASU 2014-09 will have on our consolidated financial statements, and have begun testing our processes designed to comply with ASU 2014-09 to permit adoption by January 1, 2018.
In January 2016 the FASB issued ASU 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities” (ASU 2016-01), which requires equity investments that are not accounted for under the equity method of accounting to be measured at fair value with changes recognized in net income and which updates certain presentation and disclosure requirements. ASU 2016-01 is effective for us beginning January 1, 2018. At March 31, 2017 the carrying value of equity investments that are not accounted for under the equity method of accounting totaled $528 million and unrealized gains or losses were insignificant. Currently we do not believe the adoption of ASU 2016-01 will have a material impact on our consolidated financial statements, however changes in future market conditions and equity investment balances prior to the implementation date will affect the impact the adoption may have on our consolidated financial statements.

In March 2017 the FASB issued ASU 2017-07, "Compensation – Retirement Benefits (Topic 715), Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost" (ASU 2017-07), which requires that the service cost component of net periodic pension and other postretirement benefits (OPEB) (income) expense be presented in the same income statement line item as other employee compensation costs, while the remaining components of net periodic pension and OPEB (income) expense are to be presented outside operating income. ASU 2017-07 is effective for us on a retrospective basis beginning January 1, 2018. The effect of adopting ASU 2017-07 will be the reclassification of the non-service cost components from primarily Automotive cost of sales to Interest income and other non-operating income, net. As a result, upon adoption we expect a decrease to Operating income and an increase to Interest income and other non-operating income, net of approximately $1.2 billion and $380 million for the years ended December 31, 2016 and 2015.

Note 2. Disposition of Business
On March 5, 2017 our wholly-owned subsidiary (the Seller) entered into a Master Agreement (the Agreement) with Peugeot, S.A. (PSA Group) pursuant to which PSA Group will acquire our Opel and Vauxhall businesses and certain other assets in Europe

5



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

(the Opel/Vauxhall Business) and our European financing subsidiaries and branches (the Fincos, together with the Opel/Vauxhall Business, the Transferred Business) for net consideration with an estimated value of approximately $2.2 billion. The purchase price is subject to certain working capital and other adjustments as provided in the Agreement. The Seller has agreed to indemnify PSA Group for certain losses resulting from any inaccuracy of the representations and warranties or breaches of covenants included in the Agreement and certain other liabilities. The Company has entered into a guarantee for the benefit of PSA Group and pursuant to which the Company has agreed to guarantee the Seller's obligation to indemnify PSA Group for certain losses resulting from any inaccuracy of the representations and warranties or breaches of our covenants in the Agreement and for certain other liabilities.

The Company expects to recognize a charge of approximately $4.5 billion upon closing principally related to: (1) up to approximately $2.7 billion of certain deferred tax assets that will no longer be realizable upon sale; (2) an approximate $400 million de-risking premium payment to be made to PSA Group for the assumption of certain underfunded pension liabilities; (3) the recognition of approximately $1.2 billion of previously deferred pension losses; and (4) costs related to other services provided under the Agreement. The ultimate charge upon closing, including the principal components thereof, may differ from these estimates based on changes to the carrying amounts of the Transferred Business through the date of closing and the ultimate resolution of certain closing conditions. At closing, the Seller will make payments to PSA Group of approximately $3.2 billion for the assumed pension liabilities, which includes pension funding payments for active employees and the de-risking premium. These payments are subject to foreign currency and discount rate fluctuations. At a future reporting date, the Transferred Business will be presented as held for sale and as discontinued operations following the receipt of certain consents and approvals required for the closing of the sale of the Transferred Business.

The transfer of the Opel/Vauxhall Business is expected to close by the end of 2017 and the transfer of the Fincos is expected to close as soon as practicable after the receipt of the necessary antitrust, financial and other regulatory approvals, which may be after the transfer of the Opel/Vauxhall Business. The transfer of the Fincos will not occur unless the transfer of the Opel/Vauxhall Business occurs. As a potential outcome of the Agreement we expect the convergence of vehicle platforms between the Transferred Business and PSA Group may result in platform rationalization that may have a material impact on our results of operations in 2017.

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

6



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

 
Fair Value Level
 
March 31, 2017
 
December 31, 2016
Cash and cash equivalents
 
 
 
 
 
Cash, cash equivalents and time deposits
 
 
$
6,857

 
$
6,077

Available-for-sale securities
 
 
 
 
 
U.S. government and agencies
2
 
1,128

 
1,158

Corporate debt
2
 
2,459

 
2,524

Money market funds
1
 
1,768

 
1,802

Sovereign debt
2
 
652

 
1,399

Total available-for-sale securities – cash equivalents
 
 
6,007

 
6,883

Total cash and cash equivalents
 
 
$
12,864

 
$
12,960

Marketable securities
 
 
 
 


U.S. government and agencies
2
 
$
4,053

 
$
5,886

Corporate debt
2
 
3,974

 
3,611

Mortgage and asset-backed
2
 
370

 
197

Sovereign debt
2
 
1,863

 
2,147

Total available-for-sale securities – marketable securities
 
 
$
10,260

 
$
11,841

Restricted cash
 
 
 
 
 
Cash, cash equivalents and time deposits
 
 
$
547

 
$
531

Available-for-sale securities, primarily money market funds
1
 
2,153

 
1,687

Total restricted cash
 
 
$
2,700

 
$
2,218

 
 
 
 
 
 
Available-for-sale securities included above with contractual maturities(a)
 
 
 
 
 
Due in one year or less
 
 
$
8,673

 
 
Due between one and five years
 
 
5,474

 
 
Total available-for-sale securities with contractual maturities
 
 
$
14,147

 
 
__________
(a)
Excludes mortgage and asset-backed securities.

Sales proceeds from investments classified as available-for-sale and sold prior to maturity were $626 million and $2.6 billion in the three months ended March 31, 2017 and 2016. Net unrealized gains and losses on available-for-sale securities and realized gains and losses on trading securities were insignificant in the three months ended March 31, 2017 and 2016. Cumulative unrealized gains and losses on available-for-sale securities were insignificant at March 31, 2017 and December 31, 2016.

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheet to the total shown in the condensed consolidated statements of cash flows:
 
March 31, 2017
Cash and cash equivalents
$
12,864

Restricted cash included in Other current assets
2,103

Restricted cash included in Other assets
579

Total
$
15,546



7



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

Note 4. GM Financial Receivables
 
March 31, 2017
 
December 31, 2016
 
Retail
 
Commercial
 
Total
 
Retail
 
Commercial
 
Total
Finance receivables, collectively evaluated for impairment, net of fees
$
33,919

 
$
11,386

 
$
45,305

 
$
30,989

 
$
10,652

 
$
41,641

Finance receivables, individually evaluated for impairment, net of fees
1,957

 
87

 
2,044

 
1,921

 
70

 
1,991

GM Financial receivables
35,876

 
11,473

 
47,349

 
32,910

 
10,722

 
43,632

Less: allowance for loan losses
(852
)
 
(54
)
 
(906
)
 
(793
)
 
(50
)
 
(843
)
GM Financial receivables, net
$
35,024

 
$
11,419

 
$
46,443

 
$
32,117

 
$
10,672

 
$
42,789

 
 
 
 
 
 
 
 
 
 
 
 
Fair value of GM Financial receivables
 
 
 
 
$
46,255

 
 
 
 
 
$
42,739


We estimate the fair value of retail finance receivables using observable and unobservable Level 3 inputs within a cash flow model. The inputs reflect assumptions regarding expected prepayments, deferrals, delinquencies, recoveries and charge-offs of the loans within the portfolio. The cash flow model produces an estimated amortization schedule of the finance receivables. The projected cash flows are then discounted to derive the fair value of the portfolio. Macroeconomic factors could affect the credit performance of the portfolio and therefore could potentially affect the assumptions used in our cash flow model. A substantial majority of our commercial finance receivables have variable interest rates. The carrying amount, a Level 2 input, is considered to be a reasonable estimate of fair value.
 
Three Months Ended
 
March 31, 2017
 
March 31, 2016
Allowance for loan losses at beginning of period
$
843

 
$
782

Provision for loan losses
217

 
196

Charge-offs
(307
)
 
(293
)
Recoveries
147

 
150

Effect of foreign currency
6

 
8

Allowance for loan losses at end of period
$
906

 
$
843


The allowance for loan losses on retail and commercial finance receivables included a collective allowance of $614 million and $560 million and a specific allowance of $292 million and $283 million at March 31, 2017 and December 31, 2016.

Retail Finance Receivables We use proprietary scoring systems in the underwriting process that measure the credit quality of retail finance receivables using several factors, such as credit bureau information, consumer credit risk scores (e.g. FICO scores or its equivalent) and contract characteristics. We also consider other factors such as employment history, financial stability and capacity to pay. Subsequent to origination we review the credit quality of retail finance receivables based on customer payment activity. In North America, while we historically focused on consumers with lower than prime credit scores, we have expanded our prime lending programs. At March 31, 2017 and December 31, 2016, 44% and 48% 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. At the time of loan origination, substantially all of our international consumers have the equivalent of prime credit scores.

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 March 31, 2017 and December 31, 2016 the accrual of finance charge income had been suspended on delinquent retail finance receivables with contractual amounts due of $711 million and $807 million. The following table summarizes the contractual amount of delinquent retail finance receivables, which is not significantly different than the recorded investment of the retail finance receivables:

8



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

 
March 31, 2017
 
March 31, 2016
 
Amount
 
Percent of Contractual Amount Due
 
Amount
 
Percent of Contractual Amount Due
31-to-60 days delinquent
$
1,006

 
2.8
%
 
$
963

 
3.1
%
Greater-than-60 days delinquent
441

 
1.2
%
 
421

 
1.4
%
Total finance receivables more than 30 days delinquent
1,447

 
4.0
%
 
1,384

 
4.5
%
In repossession
51

 
0.2
%
 
48

 
0.2
%
Total finance receivables more than 30 days delinquent or in repossession
$
1,498

 
4.2
%
 
$
1,432

 
4.7
%

At March 31, 2017 and December 31, 2016 retail finance receivables classified as troubled debt restructurings and individually evaluated for impairment were $2.0 billion and $1.9 billion and the allowance for loan losses included $284 million and $276 million of specific allowances on these receivables.

Commercial Finance Receivables Our commercial finance receivables consist of dealer financings, primarily for inventory purchases. A proprietary model is used to assign 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, up to suspension of lines of credit and liquidation of assets. At March 31, 2017 and December 31, 2016 the commercial finance receivables on non-accrual status were insignificant. The following table summarizes the credit risk profile by dealer risk rating of commercial finance receivables: 
 
 
March 31, 2017
 
December 31, 2016
Group I
– Dealers with superior financial metrics
$
1,649

 
$
1,576

Group II
– Dealers with strong financial metrics
3,733

 
3,299

Group III
– Dealers with fair financial metrics
3,954

 
3,842

Group IV
– Dealers with weak financial metrics
1,411

 
1,201

Group V
– Dealers warranting special mention due to potential weaknesses
544

 
636

Group VI
– Dealers with loans classified as substandard, doubtful or impaired
182

 
168

 
 
$
11,473

 
$
10,722


Note 5. Inventories
 
March 31, 2017
 
GMNA
 
GME
 
GMIO
 
GMSA
 
Total
Total productive material, supplies and work in process
$
3,525

 
$
704

 
$
999

 
$
786

 
$
6,014

Finished product, including service parts
4,073

 
2,625

 
1,231

 
743

 
8,672

Total inventories
$
7,598

 
$
3,329

 
$
2,230

 
$
1,529

 
$
14,686

 
December 31, 2016
 
GMNA
 
GME
 
GMIO
 
GMSA
 
Total
Total productive material, supplies and work in process
$
3,226

 
$
684

 
$
974

 
$
759

 
$
5,643

Finished product, including service parts
4,108

 
2,229

 
1,107

 
701

 
8,145

Total inventories
$
7,334

 
$
2,913

 
$
2,081

 
$
1,460

 
$
13,788


Note 6. Equipment on Operating Leases
Equipment on operating leases in our automotive operations consists of vehicle sales to daily rental car companies with a guaranteed repurchase obligation.

9



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

 
March 31, 2017
 
December 31, 2016
Equipment on operating leases
$
2,509

 
$
2,076

Less: accumulated depreciation
(226
)
 
(180
)
Equipment on operating leases, net
$
2,283

 
$
1,896

 
Three Months Ended
 
March 31, 2017
 
March 31, 2016
Depreciation expense
$
54

 
$
33

Impairment charges
$
57

 
$
38


GM Financial originates leases to retail customers that are recorded as operating leases.
 
March 31, 2017
 
December 31, 2016
GM Financial equipment on operating leases
$
44,628

 
$
40,875

Less: accumulated depreciation
(7,326
)
 
(6,349
)
GM Financial equipment on operating leases, net
$
37,302

 
$
34,526


Depreciation expense related to GM Financial equipment on operating leases, net was $1.4 billion and $915 million in the three months ended March 31, 2017 and 2016.

The following table summarizes minimum rental payments due to GM Financial on leases to retail customers:
 
Years Ending December 31,
 
2017
 
2018
 
2019
 
2020
 
2021
Minimum rental receipts under operating leases
$
4,654

 
$
4,878

 
$
2,494

 
$
365

 
$
13


Note 7. Equity in Net Assets of Nonconsolidated Affiliates
 
Three Months Ended
 
March 31, 2017
 
March 31, 2016
Automotive China JVs equity income
$
504

 
$
518

Other joint ventures equity income
51

 
42

Total Equity income
$
555

 
$
560

 
 
 
 
There have been no significant ownership changes in our Automotive China joint ventures (Automotive China JVs) since December 31, 2016.
 
Three Months Ended
 
March 31, 2017
 
March 31, 2016
Summarized Operating Data of Automotive China JVs
 
 
 
Automotive China JVs' net sales
$
11,201

 
$
11,191

Automotive China JVs' net income
$
1,046

 
$
1,086


Dividends received from our nonconsolidated affiliates were insignificant in the three months ended March 31, 2017 and 2016. At March 31, 2017 and December 31, 2016 we had undistributed earnings of $2.7 billion and $2.2 billion related to our nonconsolidated affiliates.

Note 8. 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

10



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

debt issued by these VIEs is backed by finance receivables and leasing related assets transferred to the VIEs (Securitized Assets). GM Financial determined that it is the primary beneficiary of the SPEs because the servicing responsibilities for the Securitized Assets give GM Financial the power to direct the activities that most significantly impact the performance of the VIEs and the variable interests in the VIEs give GM Financial the obligation to absorb losses and the right to receive residual returns that could potentially be significant. The assets serve as the sole source of repayment for the debt issued by these entities. Investors in the notes issued by the VIEs do not have recourse to GM Financial or its other assets, with the exception of customary representation and warranty repurchase provisions and indemnities that GM Financial provides as the servicer. GM Financial is not required and does not currently intend to provide additional financial support to these SPEs. While these subsidiaries are included in GM Financial's condensed consolidated financial statements, they are separate legal entities and their assets are legally owned by them and are not available to GM Financial's creditors. The following table summarizes the assets and liabilities related to GM Financial's consolidated VIEs:
 
March 31, 2017
 
December 31, 2016
Restricted cash – current
$
2,078

 
$
1,532

Restricted cash – non-current
$
520

 
$
535

GM Financial receivables, net of fees – current
$
15,716

 
$
15,220

GM Financial receivables, net of fees – non-current
$
14,391

 
$
14,151

GM Financial equipment on operating leases, net
$
23,154

 
$
19,341

GM Financial short-term debt and current portion of long-term debt
$
23,573

 
$
20,005

GM Financial long-term debt
$
18,098

 
$
18,239


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 9. Automotive and GM Financial Debt


March 31, 2017
 
December 31, 2016
 
Carrying Amount
 
Fair Value
 
Carrying Amount
 
Fair Value
Total automotive debt
$
10,952

 
$
11,913

 
$
10,752

 
$
11,612

Fair value utilizing Level 1 inputs
 
 
$
9,590

 
 
 
$
9,515

Fair value utilizing Level 2 inputs
 
 
$
2,323

 
 
 
$
2,097


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 March 31, 2017 and December 31, 2016 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.
 
March 31, 2017
 
December 31, 2016
 
Carrying Amount
 
Fair Value
 
Carrying Amount
 
Fair Value
Secured debt
$
42,579

 
$
42,680

 
$
39,270

 
$
39,357

Unsecured debt
37,370

 
38,390

 
34,606

 
35,220

Total GM Financial debt
$
79,949

 
$
81,070

 
$
73,876

 
$
74,577

 
 
 
 
 
 
 
 
Fair value utilizing Level 2 inputs
 
 
$
77,267

 
 
 
$
69,990

Fair value utilizing Level 3 inputs
 
 
$
3,803

 
 
 
$
4,587



11



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

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 8 for additional information on GM Financial's involvement with VIEs. In the three months ended March 31, 2017 we issued securitization notes payable of $4.0 billion and entered into new or renewed credit facilities with a total net additional borrowing capacity of $182 million, 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 the three months ended March 31, 2017 we issued $2.5 billion in aggregate principal amount of senior notes comprising:
 
 
Amount Issued
3.45% Senior notes due January 2022
 
$
1,250

4.35% Senior notes due January 2027
 
$
750

Floating rate notes due January 2022
 
$
500


In April 2017 we issued $3.0 billion in aggregate principal amount of senior notes comprising $1.0 billion of 2.65% notes due in April 2020, $1.25 billion of 3.95% notes due in April 2024 and $750 million of floating rate notes due in April 2020. 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 March 31, 2017 and December 31, 2016 the outstanding balance of these deposits was $1.9 billion, of which 41% and 42% were overnight deposits.

Note 10. Derivative Financial Instruments
Automotive The following table presents the notional amounts for derivative financial instruments in our automotive operations:
 
Fair Value Level
 
March 31, 2017
 
December 31, 2016
Derivatives designated as hedges
 
 
 
 
 
Assets
 
 
 
 
 
 Net investment hedges - foreign currency(a)(b)(c)
2
 
$
1,490

 
$

 Cash flow hedges
 
 
 
 
 
Foreign currency(a)(b)(c)
2
 
732

 
803

Commodity(a)(b)(c)
2
 
279

 
106

Total cash flow hedges
 
 
1,011

 
909

Total assets
 
 
$
2,501

 
$
909

Derivatives not designated as hedges
 
 
 
 
 
Assets
 
 
 
 
 
Foreign currency(a)(b)
2/3
 
$
4,200

 
$
4,605

Interest rate swaps(a)(b)
2
 
5,808

 

Commodity(a)(b)
2
 
1,177

 
1,061

Total assets
 
 
$
11,185

 
$
5,666

Liabilities
 
 
 
 
 
Foreign currency(a)(b)
2
 
$
2,083

 
$
470

Commodity(a)(b)
2
 
364

 
181

Total liabilities
 
 
$
2,447

 
$
651

__________

12



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

(a)
The fair value of these derivative instruments was insignificant at March 31, 2017 and December 31, 2016.
(b)
The gains and losses on these derivative instruments included in the condensed consolidated income statements were insignificant for the three months ended March 31, 2017 and 2016.
(c)
The gains and losses on these derivative financial instruments included in Accumulated other comprehensive loss were insignificant at March 31, 2017 and December 31, 2016. The gains and losses on these derivative financial instruments included in the condensed consolidated statements of comprehensive income were insignificant for the three months ended March 31, 2017 and 2016.

GM Financial The following table presents the notional amounts for GM Financial's derivative financial instruments:
 
Fair Value Level
 
March 31, 2017
 
December 31, 2016
Derivatives designated as hedges
 
 
 
 
 
Assets
 
 
 
 
 
 Cash flow hedges - interest rate swaps(a)(b)(c)
2/3
 
$
3,597

 
$
3,542

Liabilities
 
 
 
 
 
 Fair value hedges - interest rate swaps(b)(d)
2
 
$
8,950

 
$
7,700

 Cash flow hedges
 
 
 
 
 
Interest rate swaps(a)(b)(c)
2/3
 
717

 
1,280

Foreign currency(a)(b)(c)
2
 
802

 
791

Total liabilities
 
 
$
10,469

 
$
9,771

Derivatives not designated as hedges
 
 
 
 
 
Assets
 
 
 
 
 
Interest rate swaps(a)(b)
2/3
 
$
15,455

 
$
8,667

Interest rate caps and floors(a)(b)
2
 
13,369

 
10,469

Foreign currency(a)(b)
2
 
617

 
1,576

Total assets
 
 
$
29,441

 
$
20,712

Liabilities
 
 
 
 
 
Interest rate swaps(a)(b)
2/3
 
$
14,225

 
$
8,337

Interest rate caps and floors(a)(b)
2
 
15,101

 
12,146

Foreign currency(a)(b)
2
 
1,412

 
119

Total liabilities
 
 
$
30,738

 
$
20,602

__________
(a)
The fair value of these derivative instruments was insignificant at March 31, 2017 and December 31, 2016.
(b)
The gains and losses on these derivative instruments included in the condensed consolidated income statements were insignificant for the three months ended March 31, 2017 and 2016.
(c)
The gains and losses on these derivative financial instruments included in Accumulated other comprehensive loss were insignificant at March 31, 2017 and December 31, 2016. The gains and losses on these derivative financial instruments included in the condensed consolidated statements of comprehensive income were insignificant for the three months ended March 31, 2017 and 2016.
(d)
The fair value of these derivative instruments was $317 million and $276 million at March 31, 2017 and December 31, 2016.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Note 11. Product Warranty and Related Liabilities

13



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

 
Three Months Ended
 
March 31, 2017
 
March 31, 2016
Warranty balance at beginning of period
$
9,701

 
$
9,279

Warranties issued and assumed in period  recall campaigns
184

 
154

Warranties issued and assumed in period  product warranty
613

 
549

Payments
(897
)
 
(911
)
Adjustments to pre-existing warranties
36

 
83

Effect of foreign currency and other
43

 
79

Warranty balance at end of period
$
9,680

 
$
9,233


We estimate our reasonably possible loss in excess of amounts accrued for recall campaigns to be an insignificant amount at March 31, 2017. Refer to Note 13 for reasonably possible losses on Takata Corporation (Takata) matters.

Note 12. Pensions and Other Postretirement Benefits
 
Three Months Ended March 31, 2017
 
Three Months Ended March 31, 2016
 
Pension Benefits
 
Global OPEB Plans
 
Pension Benefits
 
Global OPEB Plans
 
U.S.
 
Non-U.S.
 
 
U.S.
 
Non-U.S.
 
Service cost
$
79

 
$
95

 
$
4

 
$
95

 
$
85

 
$
5

Interest cost
536

 
127

 
49

 
553

 
144

 
50

Expected return on plan assets
(919
)
 
(183
)
 

 
(945
)
 
(182
)
 

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

 
(3
)
 
(1
)
 
3

 
(4
)
Amortization of net actuarial (gains) losses
(1
)
 
62

 
8

 
(6
)
 
47

 
5

Net periodic pension and OPEB (income) expense
$
(306
)
 
$
102

 
$
58

 
$
(304
)
 
$
97

 
$
56


We made discretionary contributions to our U.S. hourly pension plan of $1.5 billion in the three months ended March 31, 2016 and $482 million in April 2016. These discretionary contributions were funded with the net proceeds from the issuance of senior unsecured notes.

Note 13. 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 investigations 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 March 31, 2017 and December 31, 2016 accruals of $1.2 billion and $1.3 billion 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 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.

Through April 17, 2017 we were aware of 100 putative class actions pending against GM in various federal and state trial courts in the U.S. and 20 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 benefit-of-the-bargain damages or damages related to alleged diminution in value of the vehicles, as well as punitive damages, injunctive relief and other relief. There

14



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

are also two civil actions brought by state governmental entities relating to the 2014 recalls that seek injunctive relief as well as civil penalties and attorneys' fees for alleged violations of state laws.

Through April 17, 2017 we were aware of 281 actions pending in various federal and state trial courts in the U.S. and 14 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.

During 2016, the U.S. District Court for the Southern District of New York (the Southern District), which is administering a federal multidistrict litigation (the multidistrict litigation) and a Texas court administering a Texas state multidistrict litigation scheduled a combined eight ignition-switch personal injury cases for bellwether trials. None of those resulted in a finding of liability against GM; juries in two cases returned verdicts in favor of GM, a court dismissed one case on summary judgment, plaintiffs dismissed two cases with prejudice before trial, and the parties settled the remaining three cases. The Southern District and the Texas court have scheduled additional personal injury bellwether trials for 2017 and 2018. 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 Southern District granted in part and denied in part 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 Southern District 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 Southern District also rejected plaintiffs' broadest theory of damages – that plaintiffs could seek recovery for alleged reduction in the value of their vehicles due to damage to GM's reputation and brand as a result of the ignition switch matter. The Southern District 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 Southern District 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 Southern District 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 addressed post-bankruptcy claims, we believe the Southern District's legal holdings should apply to limit plaintiffs' pre-bankruptcy claims. On September 15, 2016, plaintiffs filed a Fourth Amended Consolidated Complaint amending their economic-loss claims. On December 7, 2016 GM moved to dismiss certain claims in that complaint.

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 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, 2015 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. The Second Circuit denied our request for an en banc review of the panel's decision and judgment. On April 24, 2017, the United States Supreme Court denied our petition for certiorari. In 2014 GM voluntarily established the Ignition Switch Recall Compensation Program (the Program), administered by an independent administrator, which provided compensation for individuals who died or suffered personal injuries (or for their families) as a result of the ignition switch defect, both before and after bankruptcy. The Program completed its claims review process in the three months ended September 30, 2015, but continues to process

15



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

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. As a result, certain pre-closing personal injury claims relating to the ignition switch defect were resolved through this program.

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

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. In early 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. On April 5, 2017, GM filed a motion to dismiss this new derivative action. Finally, two derivative actions filed in the Circuit Court of Wayne County, Michigan, which have been consolidated, are stayed pending disposition of the federal derivative actions.

In connection with the 2014 recalls, we have from time to time received subpoenas and other requests for information related to investigations by agencies or other representatives of U.S. federal, state and the Canadian governments, including the United States Attorney’s Office for the Southern District of New York (the Office). Ongoing matters of investigations as of March 31, 2017 include litigation initiated by the Arizona Attorney General, litigation initiated by the Orange County District Attorney, and investigations by 49 state attorneys general which may result in litigation. We believe we are cooperating fully with all reasonable pending requests for information. We have accrued for these matters to the extent required by law and regulations. Such matters could in the future result in the imposition of material damages, fines, civil consent orders, civil and criminal penalties or other remedies.

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. Pursuant to the DPA we have paid the United States $900 million as a financial penalty, and we agreed to retain an independent monitor to review and assess our policies, practices or procedures related to statements about motor vehicle safety, the provision of information to those responsible for recall decisions, recall processes and addressing known defects in certified pre-owned vehicles. In addition, the Office agreed to recommend to the Southern District that prosecution of GM on a two-count information filed in the Southern District be deferred for three years. The 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 2016 Form 10-K.

The total amount accrued at March 31, 2017 reflects amounts for a combination of settled but unpaid matters, and for the remaining unsettled investigations, claims and/or lawsuits relating to the ignition switch recalls and other related recalls. The amounts accrued for those unsettled investigations, claims, and/or lawsuits 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, including the legal theory or the nature of the investigations, claims and/or lawsuits, the complexity of the facts, the lack of documentation available to us with respect to particular cases or groups of cases, the results of any investigation or litigation and the timing of resolution of the investigation or litigations, including any appeals, further proceedings regarding interpretation and application of the Second Circuit's July 13, 2016 decision and certain common law doctrines, and further proceedings following the district court's July 15, 2016 decision and its decision on GM's motion to dismiss the Fourth Amended and Consolidated Complaint in the multidistrict litigation. We will continue to consider resolution of pending matters involving ignition switch recalls and other recalls where it makes sense to do so.


16



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

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 Dollars, 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. The appeals and cross appeals were heard by the Ontario Court of Appeal in January 2017.

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 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 the 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 616 billion South Korean Won (equivalent to $552 million) at March 31, 2017, 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. At March 31, 2017 we identified a reasonably possible loss for salary cases in excess of amounts accrued to be 190 billion South Korean Won (equivalent to $170 million). 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.

GM Brazil Indirect Tax Claim In March 2017 the Supreme Court of Brazil issued a decision concluding that a certain state value added tax should not be included in the calculation of federal gross receipts taxes. The decision reduces GM Brazil’s gross receipts tax prospectively and, potentially, retrospectively. The retrospective right to recover is under judicial review and we do not expect resolution during 2017. If the Supreme Court of Brazil grants retrospective recovery we estimate potential recoveries of up to $1.4 billion. However, given the remaining uncertainty regarding the ultimate judicial resolution of this matter we are unable to assess the likelihood of any favorable outcome at this time. We have not recorded any amounts relating to this matter.

Other Litigation-Related Liability and Tax Administrative Matters Various other legal actions, governmental investigations, claims and proceedings are pending against us or our related companies or joint ventures, including matters arising out of alleged product defects; employment-related matters; 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 the provision of Accounting Standards Codification (ASC) 740, Income Taxes (indirect tax-related matters); and environmental protection laws, including laws regulating air emissions, water discharges, waste management and environmental remediation. We believe that appropriate accruals have been established for losses that are probable and can be reasonably estimated. It is possible that the resolution of one or more of these matters could exceed the amounts accrued in an amount that could be material to our results of operations. We also from time to time receive subpoenas and other inquiries or requests for information from agencies or other representatives of U.S. federal, state and foreign governments on a variety of issues.


17



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

Indirect tax-related matters are being litigated globally pertaining to value added taxes, customs, duties, sales, property taxes and other non-income tax related tax exposures. The various non-U.S. labor-related matters include claims from current and former employees related to alleged unpaid wage, benefit, severance and other compensation matters. Certain South American administrative proceedings are indirect tax-related and may require that we deposit funds in escrow or provide an alternative form of security which may range from $200 million to $600 million at March 31, 2017. 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 March 31, 2017. 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 $1.1 billion at March 31, 2017.

Takata Matters On May 4, 2016 the National Highway Transportation Safety Administration (NHTSA) issued an amended consent order requiring Takata to file defect information reports (DIRs) for previously unrecalled front airbag inflators that contain phase-stabilized ammonium nitrate-based propellant without a moisture absorbing desiccant on a multi-year, risk-based schedule through 2019 impacting tens of millions of vehicles produced by numerous automotive manufacturers. NHTSA concluded that the likely root cause of the rupturing of the airbag inflators is a function of time, temperature cycling and environmental moisture. On May 16, 2016 Takata issued its first DIR in connection with the amended consent order, and on January 3, 2017, Takata issued its second set of DIRs.

Although we do not believe there is a safety defect at this time in any GM vehicles within the scope of the Takata DIRs, in cooperation with NHTSA we filed Preliminary DIRs on May 27, 2016, updated as of June 13, 2016, covering 2.5 million of certain of our GMT900 vehicles, which are full-size pick-up trucks and sport utility vehicles (SUVs). On November 15, 2016 we filed a petition for inconsequentiality and request for deferral of determination regarding those GMT900 vehicles. On November 28, 2016 NHTSA granted GM's deferral request in connection with this petition. The deferral provides GM until August 31, 2017 to present evidence and analysis that our vehicles do not pose an unreasonable risk to motor vehicle safety. We believe that this timeline will permit us to complete our testing of the relevant non-desiccated Takata inflators in GMT900 vehicles and to prove to NHTSA that the inflators in these vehicles do not present an unreasonable risk to safety and that no repair will ultimately be required.

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

We believe these vehicles are currently performing as designed and ongoing testing continues to support the belief that the vehicles' unique design and integration mitigates against inflator propellant degradation. We 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. Accordingly, no warranty provision has been made for any repair associated with our vehicles subject to the Preliminary DIRs and amended consent order. However, in the event we are ultimately obligated to repair the inflators in these vehicles, we estimate a reasonably possible cost of up to $880 million for the 6.9 million vehicles subject to the Preliminary DIRs or future Takata DIRs under the amended consent order.

Through April 17, 2017 we were aware of one putative class action pending against GM in federal court in the U.S., one putative class action in Mexico and seven putative class actions pending in various Provincial Courts in Canada arising out of allegations that airbag inflators manufactured by Takata are defective. In addition, the New Mexico Attorney General has initiated litigation against Takata and numerous automotive manufacturers, including GM. At this early stage of these proceedings, we are unable to provide an evaluation of the likelihood that a loss will be incurred or an estimate of the amounts or range of possible loss.

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 March 31, 2017 and December 31, 2016 liabilities of $636 million and $656 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

18



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

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.

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 2017 to 2031 or upon the occurrence of specific events or are ongoing. We believe that the related potential costs incurred are adequately covered and our recorded accruals are insignificant. The maximum liability, calculated as future undiscounted payments, was $4.5 billion and $4.4 billion for these guarantees at March 31, 2017 and December 31, 2016, the majority of which relate to the indemnification agreements.

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 14. 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 2007 to 2016 with various significant tax jurisdictions.

In the three months ended March 31, 2017 income tax expense of $700 million primarily resulted from tax expense attributable to entities included in our effective tax rate calculation of $804 million including tax benefits from foreign dividends, partially offset by tax benefits related to tax settlements. In the three months ended March 31, 2016 income tax expense of $559 million primarily resulted from tax expense attributable to entities included in our effective tax rate calculation of $775 million, partially offset by tax benefits related to tax settlements and deductions taken for stock investments in non-U.S. affiliates.

At March 31, 2017 we had $33.7 billion of net deferred tax assets consisting of net operating losses and income tax credits, capitalized research expenditures and other timing differences that are available to offset future income tax liabilities, partially offset by valuation allowances. The net operating losses and income tax credits include U.S. operating loss and tax credit carryforward deferred tax assets of $9.4 billion that will expire by 2037 if not utilized; and Non-U.S operating loss and tax credit carryforward deferred tax assets of $5.8 billion of which $1.3 billion expire by 2037 if not utilized and $4.5 billion can be carried forward indefinitely. Refer to Note 2 for the effect the sale of the Transferred Business will have on our net deferred tax assets.

Note 15. Restructuring and Other Initiatives
We have executed various restructuring and other initiatives and we plan to execute additional initiatives in the future, if necessary, 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 table summarizes the reserves and charges related to restructuring and other initiatives, including postemployment benefit reserves and charges:

19



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

 
Three Months Ended
 
March 31, 2017
 
March 31, 2016
Balance at beginning of period
$
350

 
$
581

Additions, interest accretion and other
46

 
305

Payments
(34
)
 
(157
)
Revisions to estimates and effect of foreign currency
11

 
24

Balance at end of period
$
373

 
$
753


In the three months ended March 31, 2017 restructuring and other initiatives related primarily to charges in GMIO related to separation and other programs in Australia, Korea and India and the withdrawal of the Chevrolet brand from Europe. Collectively these programs had a total cost since inception in 2013 of $835 million and affected a total of approximately 4,580 employees through March 31, 2017. We expect to complete these programs in 2017 and incur insignificant additional restructuring and other charges.

In the three months ended March 31, 2016 restructuring and other initiatives related primarily to charges of $240 million in 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 insignificant costs for separation and other programs in Australia, Korea and India and the withdrawal of the Chevrolet brand from Europe.

Note 16. Stockholders' Equity
At March 31, 2017 and December 31, 2016 we had 2.0 billion shares of preferred stock and 5.0 billion shares of common stock authorized for issuance. At March 31, 2017 and December 31, 2016 we had 1.5 billion shares of common stock issued and outstanding. In the three months ended March 31, 2017 we did not purchase shares of our outstanding common stock and in the three months ended March 31, 2016 we purchased 10 million shares of our outstanding common stock for $300 million as part of the common stock repurchase program announced in March 2015, which our Board of Directors increased and extended in January 2016 and January 2017. Our total dividends paid on common stock were $573 million and $587 million in the three months ended March 31, 2017 and 2016. The following table summarizes the significant components of Accumulated other comprehensive loss:
 
Three Months Ended
 
March 31, 2017
 
March 31, 2016
Foreign Currency Translation Adjustments
 
 
 
Balance at beginning of period
$
(2,355
)
 
$
(2,034
)
Other comprehensive income net of reclassification adjustment, noncontrolling interests and tax(a)(b)
91

 
85

Balance at end of period
$
(2,264
)
 
$
(1,949
)
Defined Benefit Plans
 
 
 
Balance at beginning of period
$
(6,968
)
 
$
(5,999
)
Other comprehensive loss before reclassification adjustment, net of tax(a)
(77
)
 
(148
)
Reclassification adjustment, net of tax(a)(c)
48

 
26

Other comprehensive loss, net of tax(a)
(29
)
 
(122
)
Balance at end of period
$
(6,997
)
 
$
(6,121
)
__________
(a)
The income tax effect was insignificant in the three months ended March 31, 2017 and 2016.
(b)
The reclassification adjustments and noncontrolling interests were insignificant for the three months ended March 31, 2017 and 2016.
(c)
Included in the computation of net periodic pension and OPEB (income) expense. Refer to Note 12 for additional information.
    

20



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

Note 17. Earnings Per Share
 
Three Months Ended
 
March 31, 2017
 
March 31, 2016
Net income attributable to common stockholders – diluted
$
2,608

 
$
1,952

 
 
 
 
Weighted-average common shares outstanding
1,505

 
1,546

Dilutive effect of warrants and awards under stock incentive plans
27

 
34

Weighted-average common shares outstanding – diluted
1,532

 
1,580

 
 
 
 
Diluted earnings per common share
$
1.70

 
$
1.24

Potentially dilutive securities(a)

 
26

__________
(a)
Potentially dilutive securities attributable to outstanding stock options were excluded from the computation of diluted earnings per share because the securities would have had an antidilutive effect.

Note 18. 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 earnings before interest and income taxes-adjusted, which is presented net of noncontrolling interests. The chief operating decision maker evaluates GM Financial through earnings before income taxes-adjusted because interest income and interest expense are part of operating results when assessing and measuring the operational and financial performance of the segment. Each segment has a manager responsible for executing our strategic initiatives. Our automotive manufacturing operations are integrated within the segments, benefit from broad-based trade agreements and are subject to regulatory requirements. While not all vehicles within a segment are individually profitable on a fully allocated cost basis, those vehicles attract customers to dealer showrooms and help maintain sales volumes for other, more profitable vehicles and contribute towards meeting required fuel efficiency standards. As a result of these and other factors, we do not manage our business on an individual brand or vehicle basis. At a future reporting date, GME will be presented as held for sale and as discontinued operations following the receipt of certain consents and approvals required for closing of the sale of the Transferred Business.

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, Maven, corporate expenditures including autonomous vehicle-related engineering and other costs and certain nonsegment specific revenues and expenses are recorded centrally in Corporate. Corporate assets consist primarily of cash and cash equivalents, marketable securities, our investment in Lyft, goodwill, intangibles, Maven vehicles and intercompany balances. All intersegment balances and transactions have been eliminated in consolidation. The following tables summarize key financial information by segment:

21



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

 
At and For the Three Months Ended March 31, 2017
 
GMNA
 
GME
 
GMIO
 
GMSA
 
Corporate
 
Eliminations
 
Total Automotive
 
GM Financial
 
Eliminations
 
Total
Net sales and revenue
$
29,302

 
$
4,501

 
$
2,520

 
$
1,959

 
$
174

 
 
 
$
38,456

 
$
2,879

 
$
(135
)
 
$
41,200

Earnings (loss) before interest and taxes-adjusted
$
3,416

 
$
(201
)
 
$
319

 
$
(115
)
 
$
(282
)
 
 
 
$
3,137

 
$
260

 
$
(2
)
 
$
3,395

Adjustments
$

 
$

 
$

 
$

 
$

 
 
 
$

 
$

 
$

 

Automotive interest income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
57

Automotive interest expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(144
)
Net income attributable to noncontrolling interests
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
9

Income before income taxes
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3,317

Income tax expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(700
)
Net (income) attributable to noncontrolling interests
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(9
)
Net income attributable to common stockholders
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
2,608

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity in net assets of nonconsolidated affiliates
$
77

 
$

 
$
8,339

 
$
2

 
$

 
$

 
$
8,418

 
$
998

 
$

 
$
9,416

Total assets
$
105,784

 
$
14,529

 
$
20,537

 
$
7,826

 
$
26,823

 
$
(37,858
)
 
$
137,641

 
$
94,684

 
$
(1,532
)
 
$
230,793

Depreciation and amortization
$
1,100

 
$
95

 
$
118

 
$
73

 
$
1

 
$
(1
)
 
$
1,386

 
$
1,439

 
$

 
$
2,825

Impairment charges
$
15

 
$
37

 
$
1

 
$

 
$
5

 
$

 
$
58

 
$

 
$

 
$
58

Equity income
$
5

 
$

 
$
503

 
$

 
$

 
$

 
$
508

 
$
47

 
$

 
$
555

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
At and For the Three Months Ended March 31, 2016
 
GMNA
 
GME
 
GMIO
 
GMSA
 
Corporate
 
Eliminations
 
Total
Automotive
 
GM
Financial
 
Eliminations
 
Total
Net sales and revenue
$
26,463

 
$
4,681

 
$
2,679

 
$
1,343

 
$
29

 
 
 
$
35,195

 
$
2,075

 
$
(5
)
 
$
37,265

Earnings (loss) before interest and taxes-adjusted
$
2,296

 
$
(6
)
 
$
379

 
$
(67
)
 
$
(169
)
 
 
 
$
2,433

 
$
225

 
$
(3
)
 
$
2,655

Adjustments(a)
$

 
$

 
$

 
$

 
$
(60
)
 
 
 
$
(60
)
 
$

 
$

 
(60
)
Automotive interest income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
44

Automotive interest expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(127
)
Net (loss) attributable to noncontrolling interests