GM Financial Finance Receivables, net

In April 2012 GM Financial commenced commercial lending activities in the U.S. centered on floorplan financing of dealer vehicle inventory and dealer loans to finance dealer sites, facilities, facility improvements and working capital. These loans are made on a secured basis.

The following table summarizes GM Financial finance receivables, net relating to consumer and commercial activities (dollars in millions):



	June 30, 2012		December 31, 2011
Current	$	3,478	$	3,251
Non-current	6,552		5,911
Total GM Financial finance receivables, net	$	10,030	$	9,162

The following table summarizes the components of GM Financial finance receivables, net (dollars in millions):



	June 30, 2012			December 31, 2011
Pre-acquisition consumer finance receivables, outstanding balance	$	3,100		$	4,366
Pre-acquisition consumer finance receivables, carrying amount	$	2,811		$	4,027
Post-acquisition finance receivables, net of fees(a)	7,468			5,314
Total finance receivables	10,279			9,341
Less: allowance for loan losses on post-acquisition finance receivables	(249		)	(179		)
Total GM Financial finance receivables, net	$	10,030		$	9,162

________

(a) At June 30, 2012 the balance includes finance receivables and loans in connection with the commercial lending program of $128 million.

The following table summarizes activity for finance receivables (dollars in millions):



	Three Months Ended						Six Months Ended
	June 30, 2012			June 30, 2011			June 30, 2012			June 30, 2011
Pre-acquisition consumer finance receivables, carrying amount, beginning of period	$	3,358		$	6,336		$	4,027		$	7,299
Post-acquisition finance receivables, beginning of period	6,326			2,005			5,314			924
Loans originated or purchased(a)	1,663			1,349			3,059			2,487
Charge-offs	(53		)	(6		)	(104		)	(8		)
Principal collections and other(a)	(978		)	(859		)	(1,898		)	(1,711		)
Change in carrying amount adjustment on the pre-acquisition finance receivables	(37		)	(131		)	(119		)	(297		)
Balance at end of period	$	10,279		$	8,694		$	10,279		$	8,694

________

(a) Includes finance receivables and loans originated of $174 million and principal collections of $46 million in connection with the commercial lending program for the three and six months ended June 30, 2012.

The following table summarizes the carrying amount and estimated fair value of GM Financial finance receivables, net (dollars in millions):



	June 30, 2012				December 31, 2011
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
GM Financial finance receivables, net	$	10,030	$	10,330	$	9,162	$	9,386

GM Financial determined the fair value of consumer finance receivables using Level 2 and Level 3 inputs within a cash flow model. The Level 3 inputs reflect assumptions regarding expected prepayments, deferrals, delinquencies, recoveries and charge-offs of the loans within the finance receivable portfolio. The cash flow model produces an estimated amortization schedule of the finance receivables which is the basis for the calculation of the series of cash flows that derive the fair value of the portfolio. The series of cash flows are calculated and discounted using a weighted-average cost of capital (WACC) using unobservable debt and equity percentages, an unobservable cost of equity and an observable cost of debt based on companies with a similar credit rating and maturity and maturity profile as the portfolio. Macroeconomic factors could negatively affect the credit performance of the portfolio and therefore could potentially affect the assumptions used in our cash flow model.

Substantially all commercial finance receivables have variable interest rates and maturities of one year. Therefore, carrying amount is considered to be a reasonable estimate of fair value which is determined using Level 1 inputs.

GM Financial purchases consumer finance contracts from automobile dealers without recourse, and accordingly, the dealer has no liability to GM Financial if the consumer defaults on the contract. Finance receivables are collateralized by vehicle titles and GM Financial has the right to repossess the vehicle in the event the consumer defaults on the payment terms of the contract.

At June 30, 2012 and December 31, 2011 the accrual of finance charge income has been suspended on delinquent consumer finance receivables based on contractual amounts due of $412 million and $439 million. At June 30, 2012 there were no commercial finance receivables or loans on non-accrual status.

GM Financial reviews its pre-acquisition portfolio for differences between contractual cash flows and the cash flows expected to be collected from its initial investment in the pre-acquisition portfolio to determine if the difference is attributable, at least, in part to credit quality. In the six months ended June 30, 2012 as a result of improvements in credit performance of the pre-acquisition portfolio, which resulted in an increase of expected cash flows of $170 million, GM Financial transferred this excess non-accretable discount to accretable yield. GM Financial will recognize this excess as finance charge income over the remaining life of the portfolio.

The following table summarizes accretable yield (dollars in millions):



	Three Months Ended						Six Months Ended
	June 30, 2012			June 30, 2011			June 30, 2012			June 30, 2011
Balance at beginning of period	$	768		$	999		$	737		$	1,201
Accretion of accretable yield	(143		)	(181		)	(279		)	(383		)
Transfer from non-accretable discount	3			254			170			254
Balance at end of period	$	628		$	1,072		$	628		$	1,072

The following table summarizes the allowance for post-acquisition loan losses on consumer finance receivables (dollars in millions):



	June 30, 2012		December 31, 2011
Current	$	189	$	136
Non-current	60		43
Total allowance for post-acquisition loan losses	$	249	$	179

The following table summarizes activity for the allowance for post-acquisition loan losses on consumer finance receivables (dollars in millions):



	Three Months Ended						Six Months Ended
	June 30, 2012			June 30, 2011			June 30, 2012			June 30, 2011
Balance at beginning of period	$	208		$	65		$	179		$	26
Provision for loan losses	62			45			110			84
Charge-offs	(53		)	(6		)	(104		)	(8		)
Recoveries	32			4			64			6
Balance at end of period	$	249		$	108		$	249		$	108

Credit Quality

Consumer Finance Receivables

Credit bureau scores, generally referred to as FICO scores, are determined during GM Financial's automotive loan origination process. The following table summarizes the credit risk profile of consumer finance receivables by FICO score band, determined at origination (dollars in millions):



	June 30, 2012		December 31, 2011
FICO score less than 540	$	2,631	$	2,133
FICO score 540 to 599	4,632		4,167
FICO score 600 to 659	2,582		2,624
FICO score greater than 660	595		756
Balance at end of period(a)	$	10,440	$	9,680

__________


(a)	Composed of the sum of pre-acquisition consumer finance receivables - outstanding balance and post-acquisition consumer finance receivables, net of fees.

Commercial Finance Receivables

GM Financial's commercial finance receivables consist of dealer financings. A proprietary model is used to assign a risk rating to each dealer. A credit review of each dealer is performed at least annually and, if necessary, the dealer's risk rating is adjusted on the basis of the review.

Delinquency

Consumer Finance Receivables

The following summarizes the contractual amount of consumer finance receivables, which is not materially different than the recorded investment, more than 30 days delinquent, but not yet in repossession, and in repossession, but not yet charged off (dollars in millions):



	June 30, 2012				June 30, 2011
	Amount		Percent of Contractual Amount Due		Amount		Percent of Contractual Amount Due
Delinquent contracts
31-to-60 days	$	428	4.1	%	$	398	4.4	%
Greater-than-60 days	158		1.5	%	158		1.7	%
Total finance receivables more than 30 days delinquent	586		5.6	%	556		6.1	%
In repossession	25		0.3	%	23		0.3	%
Total finance receivables more than 30 days delinquent and in repossession	$	611	5.9	%	$	579	6.4	%

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. Delinquencies may vary from period to period based upon the average age of the portfolio, seasonality within the calendar year and economic factors.

Commercial Finance Receivables

At June 30, 2012 all commercial finance receivables were current with respect to payment status.