10-Q 1 gm2019q1.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, 2019
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
captureb90.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) 667-1500
(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 every Interactive Data File required to be submitted 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 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. ¨
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 18, 2019 there were 1,418,392,858 shares of common stock outstanding.






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.
Revenue
 
Note 3.
Marketable and Other Securities
 
Note 4.
GM Financial Receivables and Transactions
 
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 and Noncontrolling Interests
 
Note 17.
Earnings Per Share
 
Note 18.
Discontinued Operations
 
Note 19.
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, 2019

March 31, 2018
Net sales and revenue
 
 
 
Automotive
$
31,261

 
$
32,691

GM Financial
3,617

 
3,408

Total net sales and revenue (Note 2)
34,878

 
36,099

Costs and expenses
 
 
 
Automotive and other cost of sales
28,229

 
30,184

GM Financial interest, operating and other expenses
3,306

 
3,014

Automotive and other selling, general and administrative expense
2,099

 
2,372

Total costs and expenses
33,634

 
35,570

Operating income
1,244

 
529

Automotive interest expense
181

 
150

Interest income and other non-operating income, net
805

 
549

Equity income (Note 7)
414

 
648

Income before income taxes
2,282

 
1,576

Income tax expense (Note 14)
137

 
466

Income from continuing operations
2,145

 
1,110

Loss from discontinued operations, net of tax (Note 18)

 
70

Net income
2,145

 
1,040

Net loss attributable to noncontrolling interests
12


6

Net income attributable to stockholders
$
2,157

 
$
1,046

 
 
 
 
Net income attributable to common stockholders
$
2,119

 
$
1,032

 
 
 
 
Earnings per share (Note 17)
 
 
 
Basic earnings per common share – continuing operations
$
1.50

 
$
0.78

Basic loss per common share – discontinued operations
$

 
$
0.05

 
 
 
 
Basic earnings per common share
$
1.50

 
$
0.73

Weighted-average common shares outstanding – basic
1,417

 
1,408

 
 
 
 
Diluted earnings per common share – continuing operations
$
1.48

 
$
0.77

Diluted loss per common share – discontinued operations
$

 
$
0.05

 
 
 
 
Diluted earnings per common share
$
1.48

 
$
0.72

Weighted-average common shares outstanding – diluted
1,436

 
1,430

 
 
 
 
Dividends declared per common share
$
0.38

 
$
0.38


CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In millions) (Unaudited)
 
Three Months Ended
 
March 31, 2019
 
March 31, 2018
Net income
$
2,145

 
$
1,040

Other comprehensive income, net of tax (Note 16)
 
 
 
Foreign currency translation adjustments and other
149

 
34

Defined benefit plans
36

 
(7
)
Other comprehensive income, net of tax
185

 
27

Comprehensive income
2,330

 
1,067

Comprehensive loss attributable to noncontrolling interests
17

 
7

Comprehensive income attributable to stockholders
$
2,347

 
$
1,074



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, 2019
 
December 31, 2018
ASSETS
 
 
 
Current Assets
 
 
 
Cash and cash equivalents
$
17,176


$
20,844

Marketable securities (Note 3)
6,021


5,966

Accounts and notes receivable, net
12,116


6,549

GM Financial receivables, net (Note 4; Note 8 at VIEs)
27,230


26,850

Inventories (Note 5)
11,108


9,816

Other current assets (Note 3; Note 8 at VIEs)
6,439


5,268

Total current assets
80,090

 
75,293

Non-current Assets
 
 
 
GM Financial receivables, net (Note 4; Note 8 at VIEs)
25,448


25,083

Equity in net assets of nonconsolidated affiliates (Note 7)
8,266


9,215

Property, net
38,336


38,758

Goodwill and intangible assets, net
5,518


5,579

Equipment on operating leases, net (Note 6; Note 8 at VIEs)
43,052


43,559

Deferred income taxes
24,303


24,082

Other assets (Note 3; Note 8 at VIEs)
8,119


5,770

Total non-current assets
153,042


152,046

Total Assets
$
233,132


$
227,339

 
 
 
 
LIABILITIES AND EQUITY
 
 
 
Current Liabilities
 
 
 
Accounts payable (principally trade)
$
24,560


$
22,297

Short-term debt and current portion of long-term debt (Note 9)
 
 
 
Automotive
1,999


935

GM Financial (Note 8 at VIEs)
31,273


30,956

Accrued liabilities
27,471


28,049

Total current liabilities
85,303


82,237

Non-current Liabilities



Long-term debt (Note 9)





Automotive
12,954


13,028

GM Financial (Note 8 at VIEs)
60,858


60,032

Postretirement benefits other than pensions (Note 12)
5,363


5,370

Pensions (Note 12)
11,099


11,538

Other liabilities
12,917


12,357

Total non-current liabilities
103,191


102,325

Total Liabilities
188,494


184,562

Commitments and contingencies (Note 13)





Equity (Note 16)



Common stock, $0.01 par value
14


14

Additional paid-in capital
25,661


25,563

Retained earnings
23,939


22,322

Accumulated other comprehensive loss
(8,849
)

(9,039
)
Total stockholders’ equity
40,765


38,860

Noncontrolling interests
3,873


3,917

Total Equity
44,638


42,777

Total Liabilities and Equity
$
233,132


$
227,339






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, 2019
 
March 31, 2018
Cash flows from operating activities
 
 
 
Income from continuing operations
$
2,145


$
1,110

Depreciation and impairment of Equipment on operating leases, net
1,897


1,859

Depreciation, amortization and impairment charges on Property, net
2,219


1,722

Foreign currency remeasurement and transaction losses
80


243

Undistributed earnings of nonconsolidated affiliates, net
(413
)

(648
)
Pension contributions and OPEB payments
(291
)

(400
)
Pension and OPEB income, net
(149
)

(300
)
Provision (benefit) for deferred taxes
(253
)

365

Change in other operating assets and liabilities
(5,316
)

(3,503
)
Net cash provided by (used in) operating activities
(81
)

448

Cash flows from investing activities
 
 

Expenditures for property
(2,014
)

(2,272
)
Available-for-sale marketable securities, acquisitions
(677
)

(914
)
Available-for-sale marketable securities, liquidations
678


2,062

Purchases of finance receivables, net
(7,215
)

(4,925
)
Principal collections and recoveries on finance receivables
6,207


3,478

Purchases of leased vehicles, net
(3,747
)

(4,496
)
Proceeds from termination of leased vehicles
3,059


2,379

Other investing activities
(2
)

(40
)
Net cash used in investing activities – continuing operations
(3,711
)

(4,728
)
Net cash provided by investing activities – discontinued operations


166

Net cash used in investing activities
(3,711
)

(4,562
)
Cash flows from financing activities
 
 

Net increase in short-term debt
959


120

Proceeds from issuance of debt (original maturities greater than three months)
11,757


11,334

Payments on debt (original maturities greater than three months)
(10,777
)

(6,832
)
Dividends paid
(626
)

(566
)
Other financing activities
(236
)

(287
)
Net cash provided by financing activities
1,077


3,769

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


44

Net decrease in cash, cash equivalents and restricted cash
(2,715
)

(301
)
Cash, cash equivalents and restricted cash at beginning of period
23,496


17,848

Cash, cash equivalents and restricted cash at end of period
$
20,781


$
17,547

 
 
 
 
Significant Non-cash Investing and Financing Activity
 
 
 
Non-cash property additions – continuing operations
$
1,785

 
$
2,675













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, 2018
$
14


$
25,371


$
17,627


$
(8,011
)

$
1,199


$
36,200

Adoption of accounting standards




(1,046
)

(98
)



(1,144
)
Net income

 

 
1,046




(6
)

1,040

Other comprehensive income

 

 


28


(1
)

27

Purchase of common stock

 
(44
)
 
(56
)
 

 

 
(100
)
Cash dividends paid on common stock

 

 
(536
)





(536
)
Dividends to noncontrolling interests

 

 

 

 
(30
)
 
(30
)
Other

 
10

 
(7
)



(2
)

1

Balance at March 31, 2018
$
14

 
$
25,337

 
$
17,028


$
(8,081
)

$
1,160


$
35,458

 
 
 
 
 
 
 
 
 
 
 
 
Balance at January 1, 2019
$
14


$
25,563


$
22,322


$
(9,039
)

$
3,917


$
42,777

Net income




2,157




(12
)

2,145

Other comprehensive income






190


(5
)

185

Stock based compensation


95


(6
)





89

Cash dividends paid on common stock




(539
)





(539
)
Dividends to noncontrolling interests








(18
)

(18
)
Other


3


5




(9
)

(1
)
Balance at March 31, 2019
$
14


$
25,661


$
23,939


$
(8,849
)

$
3,873


$
44,638































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 trucks, crossovers, cars and automobile parts worldwide and is investing in and growing an autonomous vehicle business. We also provide automotive financing services through General Motors Financial Company, Inc. (GM Financial). We analyze the results of our continuing operations through the following operating segments: GM North America (GMNA), GM International Operations (GMIO), GM South America (GMSA), GM Cruise and GM Financial. Our GMSA and GMIO operating segments are reported as one, combined international segment, GM International (GMI). GM Cruise is our global segment responsible for the development and commercialization of autonomous vehicle technology. As a result of the growing importance of our autonomous vehicle operations, we moved these operations from Corporate to GM Cruise and began presenting GM Cruise as a new reportable segment in the three months ended June 30, 2018. All periods presented have been recast to reflect the segment changes. 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 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 2018 Form 10-K. Except for per share amounts or as otherwise specified, dollar amounts presented within tables are stated in millions. In the three months ended June 30, 2018 we changed the presentation of our condensed consolidated statements of cash flows to separately classify Depreciation and impairment of Equipment on operating leases, net and Depreciation, amortization and impairment charges on Property, net. In the three months ended March 31, 2019 we changed the presentation of our condensed consolidated balance sheets to reclassify the current portion of Equipment on operating leases, net to Other current assets and our condensed consolidated statements of cash flows to reclassify Payments to purchase common stock to Other financing activities. We have made corresponding reclassifications to the comparable information for all periods presented.

Principles of Consolidation We consolidate entities that we control due to ownership of a majority voting interest and we consolidate variable interest entities (VIEs) when we are the primary beneficiary. Our share of earnings or losses of nonconsolidated affiliates is included in our consolidated operating results using the equity method of accounting when we are able to exercise significant influence over the operating and financial decisions of the affiliate.

Recently Adopted Accounting Standards

Effective January 1, 2019, we adopted Accounting Standards Update (ASU) 2016-02, "Leases" (ASU-2016-02) using the modified retrospective method, resulting in a cumulative-effect adjustment to the opening balance of Retained earnings for an insignificant amount. We recognized $1.0 billion of right of use assets and lease obligations included in Other assets, Accrued liabilities and Other liabilities on our condensed consolidated balance sheet for our existing operating lease portfolio at January 1, 2019. We elected to apply the practical expedient related to land easements, as well as the package of practical expedients permitted under the transition guidance in the new standard, which allowed us to carry forward our historical lease classification. The accounting for our finance leases and leases where we are the lessor remained substantially unchanged. The application of ASU 2016-02 had no impact on our condensed consolidated income statement or condensed consolidated statement of cash flows.


5


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

The following table summarizes our minimum commitments under noncancelable operating leases having initial terms in excess of one year, primarily for property, at December 31, 2018 as disclosed in our 2018 Form 10-K:

 
Years Ending December 31,
 
2019
 
2020
 
2021
 
2022
 
2023
 
Thereafter
 
Total
Minimum commitments(a)
$
296

 
$
286

 
$
247

 
$
180

 
$
146

 
$
582

 
$
1,737

Sublease income
(61
)
 
(51
)
 
(44
)
 
(38
)
 
(33
)
 
(129
)
 
(356
)
Net minimum commitments
$
235

 
$
235

 
$
203

 
$
142

 
$
113

 
$
453

 
$
1,381

_________
(a)
Certain leases contain escalation clauses and renewal or purchase options.

Refer to Note 13 for information on our operating leases at March 31, 2019.
                                                                                                                                                                                                
Note 2. Revenue
The following table disaggregates our revenue by major source for revenue generating segments:
 
Three Months Ended March 31, 2019
 
GMNA
 
GMI
 
Corporate
 
Total Automotive
 
GM Cruise
 
GM Financial
 
Eliminations/Reclassifications
 
Total
Vehicle, parts and accessories
$
25,962


$
3,567


$


$
29,529


$

 
$


$


$
29,529

Used vehicles
627

 
35

 

 
662

 

 

 

 
662

Services and other
776


248


46


1,070


25

 


(25
)

1,070

Automotive net sales and revenue
27,365


3,850


46


31,261


25

 


(25
)

31,261

Leased vehicle income

 

 

 

 

 
2,509

 

 
2,509

Finance charge income

 

 

 

 

 
987

 
(2
)
 
985

Other income

 

 

 

 

 
124

 
(1
)
 
123

GM Financial net sales and revenue









 
3,620


(3
)

3,617

Net sales and revenue
$
27,365


$
3,850


$
46


$
31,261


$
25

 
$
3,620


$
(28
)

$
34,878


Three Months Ended March 31, 2018

GMNA

GMI

Corporate

Total Automotive

GM Financial

Eliminations

Total
Vehicle, parts and accessories
$
25,882


$
4,605


$
9


$
30,496


$


$
(7
)

$
30,489

Used vehicles
1,155


47




1,202




(17
)

1,185

Services and other
781


196


40


1,017






1,017

Automotive net sales and revenue
27,818


4,848


49


32,715




(24
)

32,691

Leased vehicle income








2,447




2,447

Finance charge income








866


(2
)

864

Other income








98


(1
)

97

GM Financial net sales and revenue








3,411


(3
)

3,408

Net sales and revenue
$
27,818


$
4,848


$
49


$
32,715


$
3,411


$
(27
)

$
36,099

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services. Adjustments to sales incentives for previously recognized sales were insignificant in the three months ended March 31, 2019 and 2018.

Contract liabilities in our Automotive segments consist primarily of maintenance, extended warranty and other service contracts. We recognized revenue of $433 million and $383 million related to contract liabilities during the three months ended March 31, 2019 and 2018. We expect to recognize revenue of $1.1 billion in the nine months ending December 31, 2019 and $588 million, $396 million and $379 million in the years ending December 31, 2020, 2021 and thereafter related to contract liabilities at March 31, 2019.


6


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

Note 3. Marketable and Other Securities
The following table summarizes the fair value of cash equivalents and marketable debt securities which approximates cost:
 
Fair Value Level
 
March 31, 2019

December 31, 2018
Cash and cash equivalents
 
 




Cash and time deposits(a)
 
 
$
7,469


$
7,254

Available-for-sale debt securities
 
 




U.S. government and agencies
2
 
3,798


4,656

Corporate debt
2
 
2,683


3,791

Sovereign debt
2
 
274


1,976

Total available-for-sale debt securities – cash equivalents
 
 
6,755


10,423

Money market funds
1
 
2,952


3,167

Total cash and cash equivalents(b)
 
 
$
17,176


$
20,844

Marketable debt securities
 
 
 
 


U.S. government and agencies
2
 
$
1,231


$
1,230

Corporate debt
2
 
3,482


3,478

Mortgage and asset-backed
2
 
747


695

Sovereign debt
2
 
561


563

Total available-for-sale debt securities – marketable securities
 
 
$
6,021


$
5,966

Restricted cash
 
 
 

 
Cash and cash equivalents
 
 
$
237


$
260

Money market funds
1
 
3,368


2,392

Total restricted cash
 
 
$
3,605


$
2,652

 
 
 
 
 
 
Available-for-sale debt securities included above with contractual maturities(c)
 
 
 
 
Due in one year or less
 
 
$
7,671

 
 
Due between one and five years
 
 
4,358

 
 
Total available-for-sale debt securities with contractual maturities
 
 
$
12,029

 
 
__________
(a)
Includes $504 million and $616 million that is designated exclusively to fund capital expenditures in GM Korea Company (GM Korea) at March 31, 2019 and December 31, 2018.
(b)
Includes $2.1 billion and $2.3 billion in GM Cruise at March 31, 2019 and December 31, 2018.
(c)
Excludes mortgage and asset-backed securities.

Proceeds from the sale of investments classified as available-for-sale and sold prior to maturity were $611 million and $920 million in the three months ended March 31, 2019 and 2018. Net unrealized gains and losses on available-for-sale debt securities were insignificant in the three months ended March 31, 2019 and 2018. Cumulative unrealized gains and losses on available-for-sale debt securities were insignificant at March 31, 2019 and December 31, 2018.

Our investment in Lyft, Inc. (Lyft) is estimated at fair value using Level 3 inputs because the investment is subject to transfer restrictions. The fair value of our investment in Lyft at March 31, 2019 uses Lyft’s quoted market price, less a discount for the lack of marketability due to the restriction from selling our shares until September 26, 2019. The estimated volatility of Lyft’s common stock represents the significant unobservable input to the put option pricing model used to derive the fair value of our investment. The fair value of this investment was $1.2 billion and $884 million in Other assets at March 31, 2019 and December 31, 2018. We recorded an unrealized gain of $285 million in Interest income and other non-operating income, net in the three months ended March 31, 2019. Refer to Item 3. Quantitative and Qualitative Disclosures About Market Risk for exposure to equity price market risk.
 


7


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

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 statement of cash flows:
 
March 31, 2019
Cash and cash equivalents
$
17,176

Restricted cash included in Other current assets
3,063

Restricted cash included in Other assets
542

Total
$
20,781



Note 4. GM Financial Receivables and Transactions

March 31, 2019

December 31, 2018

Retail
 
Commercial(a)
 
Total
 
Retail
 
Commercial(a)
 
Total
Finance receivables, collectively evaluated for impairment, net of fees
$
39,331


$
11,904


$
51,235


$
38,220


$
12,235


$
50,455

Finance receivables, individually evaluated for impairment, net of fees(b)
2,333


34


2,367


2,348


41


2,389

GM Financial receivables
41,664


11,938


53,602


40,568


12,276


52,844

Less: allowance for loan losses(b)
(862
)

(62
)

(924
)

(844
)

(67
)

(911
)
GM Financial receivables, net
$
40,802


$
11,876


$
52,678


$
39,724


$
12,209


$
51,933



















Fair value of GM Financial receivables utilizing Level 2 inputs






$
11,876








$
12,209

Fair value of GM Financial receivables utilizing Level 3 inputs
 
 
 
 
$
40,830

 
 
 
 
 
$
39,430

__________
(a)
Net of dealer cash management balances of $1.1 billion and $922 million at March 31, 2019 and December 31, 2018. Under the cash management program, subject to certain conditions, a dealer may choose to reduce the amount of interest on their floorplan line by making principal payments to GM Financial in advance.
(b)
Retail finance receivables individually evaluated for impairment, net of fees are classified as troubled debt restructurings. The allowance for loan losses included $324 million and $321 million of specific allowances on these receivables at March 31, 2019 and December 31, 2018.

 
Three Months Ended
 
March 31, 2019

March 31, 2018
Allowance for loan losses at beginning of period
$
911

 
$
942

Provision for loan losses
175

 
136

Charge-offs
(309
)
 
(295
)
Recoveries
145

 
123

Effect of foreign currency
2

 
6

Allowance for loan losses at end of period
$
924

 
$
912


The allowance for loan losses on retail and commercial finance receivables included a collective allowance of $598 million and $586 million and a specific allowance of $326 million and $325 million at March 31, 2019 and December 31, 2018.

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 score 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. At March 31, 2019 and December 31, 2018, 24% and 25% of retail finance receivables were from consumers with sub-prime credit scores, which are defined as a FICO score or its equivalent of less than 620 at the time of loan origination.


8


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

An account is considered delinquent if a substantial portion of a scheduled payment has not been received by the date the payment was contractually due. The accrual of finance charge income had been suspended on delinquent retail finance receivables with contractual amounts due of $745 million and $888 million at March 31, 2019 and December 31, 2018. 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:

March 31, 2019

March 31, 2018

Amount
 
Percent of Contractual Amount Due
 
Amount
 
Percent of Contractual Amount Due
31-to-60 days delinquent
$
1,048


2.5
%

$
1,265


3.7
%
Greater-than-60 days delinquent
412


1.0
%

605


1.7
%
Total finance receivables more than 30 days delinquent
1,460


3.5
%

1,870


5.4
%
In repossession
47


0.1
%

53


0.2
%
Total finance receivables more than 30 days delinquent or in repossession
$
1,507


3.6
%

$
1,923


5.6
%

Commercial Finance Receivables Our commercial finance receivables consist of dealer financings, primarily for inventory purchases. Proprietary models are used to assign a risk rating to each dealer. We perform periodic credit reviews of each dealership and adjust the dealership's risk rating, if necessary. Dealers in Group VI are subject to additional restrictions on funding, including suspension of lines of credit and liquidation of assets. The commercial finance receivables on non-accrual status were insignificant at March 31, 2019 and December 31, 2018. The following table summarizes the credit risk profile by dealer risk rating of the commercial finance receivables: 
 
 
March 31, 2019
 
December 31, 2018
Group I
– Dealers with superior financial metrics
$
2,051


$
2,192

Group II
– Dealers with strong financial metrics
4,736


4,399

Group III
– Dealers with fair financial metrics
3,548


4,064

Group IV
– Dealers with weak financial metrics
1,111


1,116

Group V
– Dealers warranting special mention due to elevated risks
423


422

Group VI
– Dealers with loans classified as substandard, doubtful or impaired
69


83

 
 
$
11,938


$
12,276


Transactions with GM Financial The following table shows transactions between our Automotive segments and GM Financial. These amounts are presented in GM Financial's condensed consolidated balance sheets and statements of income.
 
March 31, 2019
 
December 31, 2018
Condensed Consolidated Balance Sheets(a)
 
 
 
Commercial finance receivables, net due from GM consolidated dealers
$
430

 
$
445

Finance receivables from GM subsidiaries
$
121

 
$
134

Subvention receivable(b)
$
639

 
$
727

Commercial loan funding payable
$
57

 
$
61

 
Three Months Ended
 
March 31, 2019
 
March 31, 2018
Condensed Consolidated Statements of Income
 
 
 
Interest subvention earned on finance receivables
$
148

 
$
130

Leased vehicle subvention earned
$
835

 
$
798

__________
(a)
All balance sheet amounts are eliminated upon consolidation.
(b)
Cash paid by Automotive segments to GM Financial for subvention was $1.1 billion and $642 million in the three months ended March 31, 2019 and 2018.


9


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

Note 5. Inventories
 
March 31, 2019
 
December 31, 2018
Total productive material, supplies and work in process
$
4,685

 
$
4,274

Finished product, including service parts
6,423

 
5,542

Total inventories
$
11,108

 
$
9,816


Note 6. Equipment on Operating Leases
Equipment on operating leases consists primarily of leases to retail customers of GM Financial. The current portion of net equipment on operating leases is presented as Other current assets.

March 31, 2019

December 31, 2018
Equipment on operating leases
$
54,872


$
55,282

Less: accumulated depreciation
(11,632
)

(11,476
)
Equipment on operating leases, net
$
43,240


$
43,806


Depreciation expense related to Equipment on operating leases, net was $1.9 billion and $1.8 billion in the three months ended March 31, 2019 and 2018.

The following table summarizes lease payments due to GM Financial on leases to retail customers:
 
Year Ending December 31,
 
2019
 
2020
 
2021
 
2022
 
2023
 
Total
Lease receipts under operating leases
$
5,220

 
$
4,740

 
$
2,143

 
$
306

 
$
15

 
$
12,424


Note 7. Equity in Net Assets of Nonconsolidated Affiliates
 
Three Months Ended
 
March 31, 2019
 
March 31, 2018
Automotive China equity income
$
376

 
$
597

Other joint ventures equity income
38

 
51

Total Equity income
$
414

 
$
648

There have been no significant ownership changes in our Automotive China joint ventures (Automotive China JVs) since December 31, 2018.
 
Three Months Ended
 
March 31, 2019
 
March 31, 2018
Summarized Operating Data of Automotive China JVs
 
 
 
Automotive China JVs' net sales
$
10,146

 
$
13,719

Automotive China JVs' net income
$
767

 
$
1,177

Dividends declared but not paid from our nonconsolidated affiliates were $1.6 billion and an insignificant amount at March 31, 2019 and December 31, 2018. Dividends received from our nonconsolidated affiliates were insignificant in the three months ended March 31, 2019 and 2018. Undistributed earnings from our nonconsolidated affiliates were $2.7 billion and $2.3 billion at March 31, 2019 and December 31, 2018.


10


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

Note 8. Variable Interest Entities
GM Financial uses special purpose entities (SPEs) that are considered VIEs to issue variable funding notes to third party bank-sponsored warehouse facilities or asset-backed securities to investors in securitization transactions. The debt issued by these VIEs is backed by finance receivables and leasing related assets transferred to the VIEs (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, 2019
 
December 31, 2018
Restricted cash – current
$
2,209

 
$
1,876

Restricted cash – non-current
$
473

 
$
504

GM Financial receivables, net of fees – current
$
18,283

 
$
18,304

GM Financial receivables, net of fees – non-current
$
13,448

 
$
14,008

GM Financial equipment on operating leases, net
$
20,313

 
$
21,781

GM Financial short-term debt and current portion of long-term debt
$
21,832

 
$
21,087

GM Financial long-term debt
$
19,523

 
$
21,417


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, 2019
 
December 31, 2018
 
Carrying Amount
 
Fair Value
 
Carrying Amount
 
Fair Value
Automotive debt
$
14,662

 
$
14,701

 
$
13,435

 
$
12,700

Finance lease liabilities
291

 
487

 
528

 
831

Total automotive debt
$
14,953

 
$
15,188

 
$
13,963

 
$
13,531

Fair value utilizing Level 1 inputs
 
 
$
12,353

 
 
 
$
11,693

Fair value utilizing Level 2 inputs
 
 
$
2,835

 
 
 
$
1,838


Finance lease assets in Property, net were $314 million at March 31, 2019. Finance lease costs were insignificant in the three months ended March 31, 2019. Undiscounted future lease obligations related to finance leases are $106 million in the nine months ending December 31, 2019, $160 million in aggregate for the years 2020 to 2023 and $371 million thereafter, with imputed interest of $346 million at March 31, 2019. The weighted-average discount rate on finance leases was 11.9% and the weighted-average remaining lease term was 14.6 years at March 31, 2019.

In January 2019 we executed a new three-year committed unsecured revolving credit facility with an initial borrowing capacity of $3.0 billion, reducing to $2.0 billion in July 2020. The facility is to fund costs related to the transformation activities announced in November 2018 and to provide additional financial flexibility. In the three months ended March 31, 2019 we borrowed $400 million against this facility to support transformation related disbursements. In April 2019 we renewed our 364-day $2.0 billion credit facility for an additional 364-day term. This facility has been allocated for exclusive use by GM Financial since April 2018.


11


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

 
March 31, 2019
 
December 31, 2018
 
Carrying Amount
 
Fair Value
 
Carrying Amount
 
Fair Value
Secured debt
$
41,625


$
41,738


$
42,835


$
42,835

Unsecured debt
50,506


50,866


48,153


47,556

Total GM Financial debt
$
92,131


$
92,604


$
90,988


$
90,391

 


 




 
Fair value utilizing Level 2 inputs


$
90,615





$
88,305

Fair value utilizing Level 3 inputs


$
1,989





$
2,086


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 assets. Refer to Note 8 for additional information on GM Financial's involvement with VIEs. In the three months ended March 31, 2019 GM Financial issued $4.6 billion in aggregate principal amount of securitization notes payable with an initial weighted average interest rate of 3.16% and maturity dates ranging from 2023 to 2025.

Unsecured debt consists of senior notes, credit facilities and other unsecured debt. In the three months ended March 31, 2019 GM Financial issued $3.9 billion in aggregate principal amount of senior notes with an initial weighted average interest rate of 4.22% and maturity dates ranging from 2021 to 2029.

In April 2019 GM Financial issued $1.3 billion in senior notes with an interest rate of 3.55%, due in 2022.

The principal amount outstanding of GM Financial's commercial paper in the U.S. was $1.5 billion and $1.2 billion at March 31, 2019 and December 31, 2018.

Each of the revolving credit facilities and the indentures governing GM Financial's notes contain terms and covenants, including limitations on GM Financial's ability to incur certain liens.
    
Note 10. Derivative Financial Instruments
Automotive The following table presents the notional amounts of derivative financial instruments in our automotive operations:
 
Fair Value Level
 
March 31, 2019
 
December 31, 2018
Derivatives not designated as hedges(a)
 
 
 
 
 
Foreign currency
2
 
$
3,500


$
2,710

Commodity
2
 
838


658

PSA warrants(b)
2
 
45


45

Total derivative financial instruments
 
 
$
4,383


$
3,413

__________
(a)
The fair value of these derivative instruments at March 31, 2019 and December 31, 2018 and the gains/losses included in our condensed consolidated income statements for the three months ended March 31, 2019 and 2018 were insignificant, unless otherwise noted.
(b)
The fair value of the PSA warrants located in Other assets was $950 million and $827 million at March 31, 2019 and December 31, 2018. We recorded gains in Interest income and other non-operating income, net of $139 million and $127 million in the three months ended March 31, 2019 and 2018.

We estimate the fair value of the PSA warrants using a Black-Scholes formula. The significant inputs to the model include the PSA stock price and the estimated dividend yield. We are entitled to receive any dividends declared by PSA through the conversion date upon exercise of the warrants.

12


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


GM Financial The following table presents the notional amounts of GM Financial's derivative financial instruments:
 
Fair Value Level
 
March 31, 2019
 
December 31, 2018
Derivatives designated as hedges(a)
 
 
 
 
 
Fair value hedges – interest rate swaps(b)
2
 
$
13,039


$
9,533

Fair value hedges – foreign currency swaps(b)
2
 
1,797


1,829

Cash flow hedges
 
 
 
 
 
Interest rate swaps
2
 
599


768

Foreign currency swaps
2
 
3,298


2,075

Derivatives not designated as hedges(a)
 
 
 
 
 
Interest rate contracts(c)
2
 
96,296


99,666

Total derivative financial instruments(d)
 
 
$
115,029


$
113,871

__________
(a)
The fair value of these derivative instruments at March 31, 2019 and December 31, 2018 and the gains/losses included in our condensed consolidated income statements and statements of comprehensive income for the three months ended March 31, 2019 and 2018 were insignificant, unless otherwise noted. Amounts accrued for interest payments in a net receivable position are included in Other assets. Amounts accrued for interest payments in a net payable position are included in Other liabilities.
(b)
The fair value of these derivative instruments located in Other liabilities was insignificant and $291 million at March 31, 2019 and December 31, 2018.
(c)
The fair value of these derivative instruments located in Other assets was $233 million and $372 million at March 31, 2019 and December 31, 2018. The fair value of these derivative instruments located in Other liabilities was $428 million and $520 million at March 31, 2019 and December 31, 2018.
(d)
We held insignificant amounts and posted $284 million and $451 million of collateral available for netting at March 31, 2019 and December 31, 2018.

The fair value for Level 2 instruments was derived using the market approach based on observable market inputs including quoted prices of similar instruments and foreign exchange and interest rate forward curves.

The following amounts were recorded in the condensed consolidated balance sheets related to items designated and qualifying as hedged items in fair value hedging relationships:
 
March 31, 2019
 
December 31, 2018
 
Carrying Amount of Hedged Items
 
Cumulative Amount of Fair Value Hedging Adjustments(a)
 
Carrying Amount of Hedged Items
 
Cumulative Amount of Fair Value Hedging Adjustments(a)
GM Financial long-term debt
$
20,200

 
$
281

 
$
17,923

 
$
459

__________
(a)
Includes $228 million and $247 million of adjustments remaining on hedged items for which hedge accounting has been discontinued at March 31, 2019 and December 31, 2018.

Note 11. Product Warranty and Related Liabilities
 
Three Months Ended
 
March 31, 2019
 
March 31, 2018
Warranty balance at beginning of period
$
7,590


$
8,332

Warranties issued and assumed in period  recall campaigns
124


183

Warranties issued and assumed in period  product warranty
527


521

Payments
(732
)

(735
)
Adjustments to pre-existing warranties
36


(82
)
Effect of foreign currency and other
7


(86
)
Warranty balance at end of period
$
7,552


$
8,133


We estimate our reasonably possible loss in excess of amounts accrued for recall campaigns to be insignificant at March 31, 2019. Refer to Note 13 for reasonably possible losses on Takata Corporation (Takata) matters.

13


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


Note 12. Pensions and Other Postretirement Benefits

Three Months Ended March 31, 2019

Three Months Ended March 31, 2018

Pension Benefits
 
Global OPEB Plans
 
Pension Benefits
 
Global OPEB Plans

U.S.
 
Non-U.S.
 
 
U.S.
 
Non-U.S.
 
Service cost
$
98


$
35


$
4


$
83


$
66


$
5

Interest cost
566


120


54


513


120


50

Expected return on plan assets
(868
)

(195
)



(973
)

(212
)


Amortization of prior service cost (credit)
(1
)

1


(3
)

(1
)

1


(4
)
Amortization of net actuarial losses
3


29


8


2


37


13

Net periodic pension and OPEB (income) expense
$
(202
)
 
$
(10
)
 
$
63

 
$
(376
)
 
$
12


$
64

 
 
 
 
 
 
 
 
 
 
 
 
The non-service cost components of net periodic pension and other postretirement benefits (OPEB) income of $230 million and $421 million in the three months ended March 31, 2019 and 2018 are presented in Interest income and other non-operating income, net.

Note 13. Commitments and Contingencies
Litigation-Related Liability and Tax Administrative Matters In the normal course of our business, we are named from time to time as a defendant in various legal actions, including arbitrations, class actions and other litigation. We identify below the material individual proceedings and investigations where 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, 2019 and December 31, 2018, we had accruals of $1.4 billion and $1.3 billion in Accrued liabilities and Other liabilities. In many matters, it is inherently difficult to determine whether loss is probable or reasonably possible or to estimate the size or range of the possible loss. Accordingly, adverse outcomes 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 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.

Economic-Loss Claims We are aware of over 100 putative class actions pending against GM in U.S. and Canadian courts alleging that consumers who purchased or leased vehicles manufactured by GM or Motors Liquidation Company (MLC), formerly known as General Motors Corporation, had been economically harmed by one or more of the 2014 recalls 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.

Many of the pending U.S. economic-loss claims have been transferred to, and consolidated in, a single federal court, the U.S. District Court for the Southern District of New York (Southern District). These plaintiffs have asserted economic-loss claims under federal and state laws, including claims relating to recalled vehicles manufactured by GM and claims asserting successor liability relating to certain recalled vehicles manufactured by MLC.

In August 2017 the Southern District granted our motion to dismiss the successor liability claims of plaintiffs in seven of the sixteen states at issue on the motion and called for additional briefing to decide whether plaintiffs' claims can proceed in the other nine states. In December 2017, the Southern District granted GM's motion and dismissed the plaintiffs' successor liability claims in an additional state, but found that there are genuine issues of material fact that prevent summary judgment for GM in eight other states. In January 2018, GM moved for reconsideration of certain portions of the Southern District's December 2017 summary judgment ruling. That motion was granted in April 2018, dismissing plaintiffs' successor liability claims in any state where New York law applies.


14


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

In September 2018, the Southern District granted our motion to dismiss claims for lost personal time (in 41 out of 47 jurisdictions) and certain unjust enrichment claims, but denied our motion to dismiss plaintiffs’ economic loss claims in 27 jurisdictions under the "manifest defect" rule. Significant summary judgment, class certification, and expert evidentiary motions remain at issue.

Personal Injury Claims We also are aware of several hundred actions pending in various courts in the U.S. and Canada alleging injury or death as a result of defects that may be the subject of the 2014 recalls (personal injury cases). In general, these cases seek recovery for purported compensatory damages, punitive damages and/or other relief. Since 2016, several bellwether trials of personal injury cases have taken place in the Southern District and in a Texas state court, which is administering a Texas state multi-district litigation. None of these trials resulted in a finding of liability against GM.

Appellate Litigation Regarding Successor Liability Ignition Switch Claims In 2016, the United States Court of Appeals for the Second Circuit held that the 2009 order of the Bankruptcy Court approving the sale of substantially all of the assets of MLC to GM free and clear of, among other things, claims asserting successor liability for obligations owed by MLC (successor liability claims) could not be enforced to bar claims against GM asserted by either plaintiffs who purchased used vehicles after the sale or against purchasers who asserted claims relating to the ignition switch defect, including pre-sale personal injury claims and economic-loss claims.

Contingently Issuable Shares  Under the Amended and Restated Master Sale and Purchase Agreement between us and MLC, GM may be obligated to issue additional shares (Adjustment Shares) of our common stock if allowed general unsecured claims against the MLC GUC Trust (GUC Trust), as estimated by the Bankruptcy Court, exceed $35.0 billion. The maximum number of Adjustment Shares issuable is 30 million shares (subject to adjustment to take into account stock dividends, stock splits and other transactions), which amounts to approximately $1.2 billion based on the GM share price as of April 18, 2019. The GUC Trust stated in public filings that allowed general unsecured claims were approximately $31.9 billion at December 31, 2018. In 2016 and 2017, certain personal injury and economic loss plaintiffs filed motions in the Bankruptcy Court seeking authority to file late claims against the GUC Trust. In May 2018, the GUC Trust filed motions seeking the Bankruptcy Court’s approval of a proposed settlement with certain personal injury and economic loss plaintiffs, approval of a notice relating to that proposed settlement and estimation of alleged personal injury and economic loss late claims for the purpose of obtaining an order requiring GM to issue the maximum number of Adjustment Shares. GM vigorously contested each of these motions.

In September 2018 the Bankruptcy Court denied without prejudice the GUC Trust’s motions described above, finding that the settling parties first need to obtain class certification with respect to the economic loss late claims. In February 2019, the GUC Trust and certain plaintiffs filed a motion with the Bankruptcy Court requesting approval of a new settlement to obtain the maximum number of Adjustment Shares. In March 2019, we asserted several legal objections to this new settlement. We are unable to estimate any reasonably possible loss or range of loss that may result from this matter.

Government Matters 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. GM is cooperating with all reasonable pending requests for information. Any existing governmental matters or investigations could in the future result in the imposition of damages, fines, civil consent orders, civil and criminal penalties or other remedies.

The total amount accrued for the 2014 recalls at March 31, 2019 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 to the extent that such matters are probable and can be reasonably estimated. The amounts accrued for those unsettled investigations, claims, and/or lawsuits represent 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 will continue to consider resolution of pending matters involving ignition switch recalls and other recalls where it makes sense to do so.

GM Korea Wage Litigation GM Korea is party to litigation with current and former hourly employees in the appellate court and Incheon District Court in Incheon, Korea. The group actions, which in the 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 Korean regulations. In 2012, the Seoul High Court (an intermediate level appellate court) affirmed a decision in one of these group actions 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). In 2014, the Supreme Court largely agreed with GM’s legal arguments and 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. In 2015, on reconsideration, the Seoul High Court held in GM Korea’s favor, after which the plaintiffs

15


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

appealed to the Supreme Court. The Supreme Court has not yet rendered a decision. We estimate our reasonably possible loss in excess of amounts accrued to be approximately $580 million at March 31, 2019. 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 or the legal or regulatory framework change.
 
GM Korea is also party to litigation with current and former salaried employees over allegations relating to ordinary wages regulation and whether to include fixed bonuses in the calculation of ordinary wages. In 2017, the Seoul High Court held that certain workers are not barred from filing retroactive wage claims. GM Korea appealed this ruling to the Supreme Court. The Supreme Court has not yet rendered a decision. We estimate our reasonably possible loss in excess of amounts accrued to be approximately $170 million at March 31, 2019. 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 or the legal or regulatory framework change.

GM Korea is also party to litigation with current and former subcontract workers over allegations that they are entitled to the same wages and benefits provided to full-time employees, and to be hired as full-time employees. In May 2018 the Korean labor authorities issued an adverse administrative order finding that GM Korea must hire certain current subcontract workers as full-time employees. GM Korea appealed that order. At March 31, 2019, we recorded an insignificant accrual covering certain asserted claims and claims that we believe are probable of assertion and for which liability is probable. We estimate that the reasonably possible loss in excess of amounts accrued for other current subcontract workers who may assert similar claims to be approximately $140 million at March 31, 2019. We are currently unable to estimate any possible loss or range of loss that may result from additional claims that may be asserted by former subcontract workers.

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 reduced GM Brazil’s gross receipts tax prospectively and, potentially, retrospectively. In February 2019, the Superior Judicial Court of Brazil rendered a favorable decision on one of GM Brazil's cases granting the company the right to recover, through offset of federal tax liabilities, amounts collected by the government from October 2007 to December 2014. As a result of the favorable decision, we recorded pre-tax recoveries of $857 million to Automotive and other cost of sales in the three months ended March 31, 2019. Timing on realization of these recoveries is dependent upon the timing of administrative approvals and generation of federal tax liabilities eligible for offset.

In April 2019, the Superior Judicial Court of Brazil rendered a favorable decision on another GM Brazil case, granting us the right to recover tax amounts collected by the government from August 2001 to September 2007. We expect to record estimated pre-tax recoveries of up to $450 million in the three months ending June 30, 2019. Timing on realization of these recoveries is dependent upon the timing of administrative approvals and generation of federal tax liabilities eligible for offset.

The retrospective right to recover for other periods remains under judicial review, and a decision could be rendered in 2019. If the Superior Judicial Court of Brazil grants retrospective recovery right for the other periods, we estimate additional potential pre-tax recoveries of up to $100 million.

Other Litigation-Related Liability and Tax Administrative Matters Various other legal actions, including class 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; product and workplace safety, vehicle emissions and fuel economy regulations; product warranties; financial services; dealer, supplier and other contractual relationships; 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); product design, manufacture and performance; consumer protection laws; and environmental protection laws, including laws regulating air emissions, water discharges, waste management and environmental remediation from stationary sources.

There are several putative class actions pending against GM in federal courts in the U.S., the Provincial Courts in Canada and Israel alleging that various vehicles sold including model year 2011-2016 Duramax Diesel Chevrolet Silverado and GMC Sierra vehicles, violate federal, state and foreign emission standards. GM has also faced a series of additional lawsuits based primarily on allegations in the Duramax suit, including putative shareholder class actions claiming violations of federal securities law and a shareholder demand lawsuit. The securities lawsuits have been voluntarily dismissed. At this 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.


16


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

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.

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 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 $300 million to $550 million at March 31, 2019. 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, 2019. 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 March 31, 2019.

Takata Matters In May 2016, the National Highway Traffic Safety Administration (NHTSA) issued an amended consent order requiring Takata to file defect information reports (DIRs) for previously unrecalled front airbag inflators that contain phased-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.

Although we do not believe there is a safety defect at this time in any unrecalled GM vehicles within scope of the Takata DIRs, in cooperation with NHTSA we have filed Preliminary DIRs covering certain of our GMT900 vehicles, which are full-size pickup trucks and sport utility vehicles (SUVs). We have also filed petitions for inconsequentiality with respect to the vehicles subject to those Preliminary DIRs. NHTSA has consolidated our petitions and will rule on them at the same time.

While these petitions have been pending, we have provided NHTSA with the results of our long-term studies and the studies performed by third-party experts, all of which form the basis for our determination that the inflators in these vehicles do not present an unreasonable risk to safety and that no repair should ultimately be required.

We believe these vehicles are currently performing as designed and our inflator aging studies and field data support the belief that the vehicles' unique design and integration mitigates against inflator propellant degradation and rupture risk. For example, the airbag inflators used in the vehicles are a variant engineered specifically for our vehicles, and include features such as greater venting, unique propellant wafer configurations, and machined steel end caps. The inflators are packaged in the instrument panel in such a way as to minimize exposure to moisture from the climate control system. Also, these vehicles have features that minimize the maximum temperature to which the inflator will be exposed, such as larger interior volumes and standard solar absorbing windshields and side glass.

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 vehicles subject to current or future Takata DIRs under the amended consent order in the U.S., we estimate a reasonably possible impact to GM of approximately $1.2 billion.
GM has recalled certain vehicles sold outside of the U.S. to replace Takata inflators in those vehicles. There are significant differences in vehicle and inflator design between the relevant vehicles sold internationally and those sold in the U.S. We continue to gather and analyze evidence about these inflators and to share our findings with regulators. Additional recalls, if any, could be material to our results of operations and cash flows. We continue to monitor the international situation.
Through April 18, 2019 we are aware of three putative class actions pending against GM in federal court in the U.S., one putative class action in Mexico, one putative class action in Israel and three putative class actions pending in various Provincial Courts in Canada arising out of allegations that airbag inflators manufactured by Takata are defective. 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. We recorded liabilities

17


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

of $530 million and $531 million in Accrued liabilities and Other liabilities at March 31, 2019 and December 31, 2018 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. 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. These guarantees terminate in years ranging from 2019 to 2024 or upon the occurrence of specific events or are ongoing. We believe that the related potential costs incurred are adequately covered by our recorded accruals, which are insignificant. The maximum future undiscounted payments mainly based on vehicles sold to date was $2.5 billion and $2.4 billion for these guarantees at March 31, 2019 and December 31, 2018, the majority of which relate to the indemnification agreements.

We provide payment guarantees on commercial loans outstanding with third parties such as dealers. In some instances, certain assets of the party or our payables to the party whose debt or performance we have guaranteed may offset, to some degree, the amount of any potential future payments. We are also exposed to residual value guarantees associated with certain sales to rental car companies.

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. Refer to Note 18 for additional information on our indemnification obligations to Peugeot, S.A. (PSA Group) under the Master Agreement (the Agreement).

Operating Leases Our portfolio of leases consists primarily of real estate office space, manufacturing and warehousing facilities, land and equipment. Certain leases contain escalation clauses and renewal or purchase options, and generally our leases have no residual value guarantees or material covenants. We exclude leases with a term of one year or less from our balance sheet, and do not separate non-lease components from our real estate leases.

Rent expense under operating leases was $86 million in the three months ended March 31, 2019. Variable lease costs were insignificant in the three months ended March 31, 2019. At March 31, 2019 operating lease right of use assets in Other assets were $988 million, operating lease liabilities in Accrued liabilities were $236 million and non-current operating lease liabilities in Other liabilities were $838 million. Operating lease right of use assets obtained in exchange for lease obligations were $122 million in the three months ended March 31, 2019. Our undiscounted future lease obligations related to operating leases having initial terms in excess of one year are $205 million for the nine months ending December 31, 2019 and $240 million, $210 million, $144 million, $131 million and $304 million for the years 2020, 2021, 2022, 2023 and thereafter, with imputed interest of $160 million as of March 31, 2019. The weighted average discount rate was 4.4% and the weighted-average remaining lease term was 5.8 years at March 31, 2019. Payments for operating leases included in Net cash provided by (used in) operating activities were $81 million in the three months ended March 31, 2019. In 2018, we entered into lease agreements for office space with gross future lease obligations of $339 million that will commence at various dates throughout 2019.

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.

In the three months ended March 31, 2019 Income tax expense of $137 million primarily resulted from tax expense attributable to entities included in our effective tax rate calculation, partially offset by tax benefits related to a release of valuation allowance and benefits from foreign dividends. The effective tax rate is lower than the applicable statutory tax rate due primarily to tax benefits related to a release of valuation allowance and benefits from foreign dividends.

In the three months ended March 31, 2018 Income tax expense of $466 million primarily resulted from tax expense attributable to entities included in our effective tax rate calculation. The recorded effective tax rate is higher than the applicable statutory tax rate due primarily to losses incurred in jurisdictions for which a valuation allowance is recorded.


18


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

At March 31, 2019 we had $23.6 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.

Note 15. Restructuring and Other Initiatives
We have executed various restructuring and other initiatives and we may execute additional initiatives in the future, if necessary, to streamline manufacturing capacity and reduce other costs to improve the utilization of remaining facilities. To the extent these programs involve voluntary separations, a liability is generally recorded at the time offers to employees are accepted. To the extent these programs provide separation benefits in accordance with pre-existing agreements, a liability is recorded once the amount is probable and reasonably estimable. If employees are involuntarily terminated, a liability is generally recorded at the communication date. Related charges are recorded in Automotive and other cost of sales and Automotive and other 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:

Three Months Ended

March 31, 2019

March 31, 2018
Balance at beginning of period
$
1,122


$
227

Additions, interest accretion and other
46


455

Payments
(317
)

(37
)
Revisions to estimates and effect of foreign currency
(21
)

(12
)
Balance at end of period
$
830


$
633


In the three months ended March 31, 2019 restructuring and other initiatives primarily included actions related to our announced transformation activities, which includes the unallocation of products to certain manufacturing facilities and other employee separation programs. We recorded charges of $790 million, primarily in GMNA, in the three months ended March 31, 2019 primarily consisting of non-cash accelerated depreciation, not reflected in the table above. These programs have a total cost since inception of $2.1 billion and we expect to incur additional restructuring and other charges in the nine months ending December 31, 2019 that range from $900 million to $1.5 billion, primarily related to employee-related separation charges, supplier-related charges and accelerated depreciation. We incurred $315 million in cash outflows resulting from these restructuring actions in the three months ended March 31, 2019. We expect additional cash outflows related to these activities of approximately $1.5 billion to be substantially complete by the end of 2020.

In the three months ended March 31, 2018 restructuring and other initiatives primarily included the closure of a facility and other restructuring actions in Korea. We recorded charges of $900 million in GMI primarily consisting of $464 million in non-cash asset impairments, not reflected in the table above, and $436 million in employee separation charges, which are reflected in the table above in the three months ended March 31, 2018.

Note 16. Stockholders' Equity and Noncontrolling Interests
We had 2.0 billion shares of preferred stock and 5.0 billion shares of common stock authorized for issuance and 1.4 billion shares of common stock issued and outstanding at March 31, 2019 and December 31, 2018. Our total dividends paid on common stock were $539 million and $536 million in the three months ended March 31, 2019 and 2018.


19


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

The following table summarizes the significant components of Accumulated other comprehensive loss:

Three Months Ended

March 31, 2019

March 31, 2018
Foreign Currency Translation Adjustments
 
 
 
Balance at beginning of period
$
(2,250
)

$
(1,606
)
Other comprehensive income and noncontrolling interests, net of reclassification adjustment, tax and impact of adoption of accounting standards(a)(b)(c)
125

 
108

Balance at end of period
$
(2,125
)
 
$
(1,498
)
 
 
 
 
Defined Benefit Plans
 
 
 
Balance at beginning of period
$
(6,737
)

$
(6,398
)
Other comprehensive loss before reclassification adjustment, net of tax and impact of adoption of accounting standards(b)(c)
(1
)

(170
)
Reclassification adjustment, net of tax(b)
37


44

Other comprehensive income (loss), net of tax and impact of adoption of accounting standards(b)(c)
36


(126
)
Balance at end of period
$
(6,701
)

$
(6,524
)
__________
(a)
The noncontrolling interests and reclassification adjustment were insignificant in the three months ended March 31, 2019 and 2018.
(b)
The income tax effect was insignificant in the three months ended March 31, 2019 and 2018.
(c)
Refer to our 2018 Form 10-K for additional information on adoption of accounting standards in 2018.


20


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

Note 17. Earnings Per Share

Three Months Ended

March 31, 2019

March 31, 2018
Basic earnings per share



Income from continuing operations(a)
$
2,157


$
1,116

Less: cumulative dividends on subsidiary preferred stock
(38
)

(14
)
Income from continuing operations attributable to common stockholders
2,119


1,102

Loss from discontinued operations, net of tax


70

Net income attributable to common stockholders
$
2,119


$
1,032


 

 
Weighted-average common shares outstanding
1,417


1,408


 
 
 
Basic earnings per common share – continuing operations
$
1.50


$
0.78

Basic loss per common share – discontinued operations
$


$
0.05

Basic earnings per common share
$
1.50


$
0.73

Diluted earnings per share
 
 
 
Income from continuing operations attributable to common stockholders – diluted(a)
$
2,119


$
1,102

Loss from discontinued operations, net of tax – diluted
$


$
70

Net income attributable to common stockholders – diluted
$
2,119


$
1,032







Weighted-average common shares outstanding – basic
1,417


1,408

Dilutive effect of warrants and awards under stock incentive plans
19


22

Weighted-average common shares outstanding – diluted
1,436


1,430







Diluted earnings per common share – continuing operations
$
1.48


$
0.77

Diluted loss per common share – discontinued operations
$


$
0.05

Diluted earnings per common share
$
1.48


$
0.72

Potentially dilutive securities(b)
8


4

__________
(a)
Net of Net loss attributable to noncontrolling interests.
(b)
Potentially dilutive securities attributable to outstanding stock options and Restricted Stock Units (RSUs) were excluded from the computation of diluted earnings per share (EPS) because the securities would have had an antidilutive effect.

Note 18. Discontinued Operations
On July 31, 2017 we closed the sale of the Opel and Vauxhall businesses and certain other assets in Europe (the Opel/Vauxhall Business) to PSA Group. On October 31, 2017 we closed the sale of the European financing subsidiaries and branches (the Fincos, and together with the Opel/Vauxhall Business, the European Business) to Banque PSA Finance S.A. and BNP Paribas Personal Finance S.A. Our wholly owned subsidiary (the Seller) agreed to indemnify PSA Group for certain losses resulting from any inaccuracy of the representations and warranties or breaches of our covenants included in the Agreement and for certain other liabilities including certain emissions and product liabilities. The Company entered into a guarantee for the benefit of PSA Group and pursuant to which the Company agreed to guarantee the Seller's obligation to indemnify PSA Group. Certain of these indemnification obligations are subject to time limitations, thresholds and/or caps as to the amount of required payments.

Although the sale reduced our new vehicle presence in Europe, we may still be impacted by actions taken by regulators related to vehicles sold before the sale. In Germany, the Kraftfahrt-Bundesamt (KBA) issued an order in October 2018, which would convert Opel’s existing voluntary recall of certain vehicles into a mandatory recall for allegedly failing to comply with certain emissions regulations. In addition, at the KBA's request, the German authorities re-opened a separate criminal investigation that had previously been closed with no action. Opel is challenging the mandatory recall order of the KBA in court on the grounds that the emission control systems contained in the subject vehicles have at all times complied with the regulations in place when the vehicles were manufactured, tested, approved and sold.

In 2017 and 2018, Opel initiated a voluntarily recall/service campaign for many of these vehicles and such voluntary actions remain ongoing while Opel’s challenge of the mandatory recall remains pending. Opel’s voluntary recall and service actions have been undertaken at its own expense, and this expense should not be transferred to the Seller because it was accounted for at the

21


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

time of the sale. However, the Seller may be obligated to indemnify PSA Group for certain additional expenses resulting from any mandatory recall that might be ordered to be implemented, as well as related potential litigation costs, settlements, judgments and potential fines. We are unable to estimate any reasonably possible loss or range of loss that may result from this matter.

We continue to purchase from and supply to PSA Group certain vehicles, parts and engineering services for a period of time following closing. Total net sales and revenue of $427 million and $607 million and purchases and expenses of $192 million and $476 million related to transactions with the Opel/Vauxhall Business were included in continuing operations during the three months ended March 31, 2019 and 2018. Cash payments of $279 million and $426 million and cash receipts of $581 million and $811 million were recorded in Net cash provided by (used in) operating activities related to transactions with the Opel/Vauxhall Business during the three months ended March 31, 2019 and 2018.
 
 
 
 
Note 19. Segment Reporting

We report segment information consistent with the way the chief operating decision maker evaluates the operating results and performance of the Company. As a result of the growing importance of our autonomous vehicle operations, we moved these operations from Corporate to GM Cruise and began presenting GM Cruise as a new reportable segment in the three months ended June 30, 2018. Our GMNA, GMI and GM Financial reportable segments were not significantly impacted. All periods presented have been recast to reflect the changes.

We analyze the results of our business through the following reportable segments: GMNA, GMI, GM Cruise and GM Financial. The chief operating decision maker evaluates the operating results and performance of our automotive segments and GM Cruise through earnings before interest and taxes (EBIT)-adjusted, which is presented net of noncontrolling interests. The chief operating decision maker evaluates GM Financial through earnings before income taxes (EBT)-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. 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.

Substantially all of the trucks, crossovers, cars 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, trucks, crossovers and cars 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 meets the demands of customers in North America with vehicles developed, manufactured and/or marketed under the Buick, Cadillac, Chevrolet and GMC brands. GMI primarily meets the demands of customers outside North America with vehicles developed, manufactured and/or marketed under the Buick, Cadillac, Chevrolet, GMC, and Holden brands. We also have equity ownership stakes in entities that meet the demands of customers in other countries, primarily China, with vehicles developed, manufactured and/or marketed under the Baojun, Buick, Cadillac, Chevrolet, Jiefang and Wuling brands. GM Cruise is our global segment responsible for the development and commercialization of autonomous vehicle technology, and includes autonomous vehicle-related engineering and other costs.

Our automotive operations' interest income and interest expense, Maven, legacy costs from the Opel/Vauxhall Business (primarily pension costs), corporate expenditures 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, PSA warrants, Maven vehicles and intercompany balances. Retained net underfunded pension liabilities related to the European Business are also recorded in Corporate. All intersegment balances and transactions have been eliminated in consolidation.


22


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

The following tables summarize key financial information by segment:

At and For the Three Months Ended March 31, 2019

GMNA
 
GMI
 
Corporate
 
Eliminations
 
Total Automotive
 
GM Cruise
 
GM Financial
 
Eliminations/Reclassifications
 
Total
Net sales and revenue
$
27,365


$
3,850


$
46


 

$
31,261


$
25


$
3,620


$
(28
)

$
34,878

Earnings (loss) before interest and taxes-adjusted
$
1,896


$
31


$
206


 

$
2,133


$
(169
)
 
$
359


$
(13