GM Financial Receivables



	June 30, 2017									December 31, 2016
	Retail			Commercial			Total			Retail			Commercial			Total
Finance receivables, collectively evaluated for impairment, net of fees	$	28,971		$	9,308		$	38,279		$	24,480		$	7,506		$	31,986
Finance receivables, individually evaluated for impairment, net of fees	2,012			35			2,047			1,920			27			1,947
GM Financial receivables	30,983			9,343			40,326			26,400			7,533			33,933
Less: allowance for loan losses	(844		)	(49		)	(893		)	(765		)	(40		)	(805		)
GM Financial receivables, net	$	30,139		$	9,294		$	39,433		$	25,635		$	7,493		$	33,128

Fair value of GM Financial receivables							$	39,477								$	33,181

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



	Three Months Ended						Six Months Ended
	June 30, 2017			June 30, 2016			June 30, 2017			June 30, 2016
Allowance for loan losses at beginning of period	$	867		$	808		$	805		$	749
Provision for loan losses	158			144			369			334
Charge-offs	(273		)	(258		)	(571		)	(542		)
Recoveries	142			130			285			275
Effect of foreign currency	(1		)	4			5			12
Allowance for loan losses at end of period	$	893		$	828		$	893		$	828

The allowance for loan losses on retail and commercial finance receivables included a collective allowance of $583 million and $525 million and a specific allowance of $310 million and $280 million at June 30, 2017 and December 31, 2016.

Retail Finance Receivables We use proprietary scoring systems in the underwriting process that measure the credit quality of retail finance receivables using several factors, such as credit bureau information, consumer credit risk scores (e.g. FICO scores or its equivalent) and contract characteristics. We also consider other factors such as employment history, financial stability and capacity to pay. Subsequent to origination we review the credit quality of retail finance receivables based on customer payment activity. In North America, while we historically focused on consumers with lower than prime credit scores, we have expanded our prime lending programs. At June 30, 2017 and December 31, 2016, 41% and 48% of the retail finance receivables in North America were from consumers with sub-prime credit scores, which are defined as FICO scores or its equivalent of less than 620 at the time of loan origination.

An account is considered delinquent if a substantial portion of a scheduled payment has not been received by the date such payment was contractually due. At June 30, 2017 and December 31, 2016 the accrual of finance charge income had been suspended on delinquent retail finance receivables with contractual amounts due of $772 million and $798 million. The following table summarizes the contractual amount of delinquent retail finance receivables, which is not significantly different than the recorded investment of the retail finance receivables:



	June 30, 2017				June 30, 2016
	Amount		Percent of Contractual Amount Due		Amount		Percent of Contractual Amount Due
31-to-60 days delinquent	$	1,076	3.4	%	$	1,055	4.3	%
Greater-than-60 days delinquent	464		1.5	%	454		1.9	%
Total finance receivables more than 30 days delinquent	1,540		4.9	%	1,509		6.2	%
In repossession	43		0.2	%	47		0.2	%
Total finance receivables more than 30 days delinquent or in repossession	$	1,583	5.1	%	$	1,556	6.4	%

At June 30, 2017 and December 31, 2016 retail finance receivables classified as troubled debt restructurings and individually evaluated for impairment were $2.0 billion and $1.9 billion and the allowance for loan losses included $306 million and $276 million of specific allowances on these receivables.

Commercial Finance Receivables Our commercial finance receivables consist of dealer financings, primarily for inventory purchases. A proprietary model is used to assign a risk rating to each dealer. We perform periodic credit reviews of each dealership and adjust the dealership's risk rating, if necessary. Dealers in Group VI are subject to additional restrictions on funding, including suspension of lines of credit and liquidation of assets. At June 30, 2017 and December 31, 2016 the commercial finance receivables on non-accrual status were insignificant. The following table summarizes the credit risk profile by dealer risk rating of commercial finance receivables:



		June 30, 2017		December 31, 2016
Group I	– Dealers with superior financial metrics	$	1,610	$	1,372
Group II	– Dealers with strong financial metrics	3,260		2,526
Group III	– Dealers with fair financial metrics	3,180		2,598
Group IV	– Dealers with weak financial metrics	855		613
Group V	– Dealers warranting special mention due to elevated risks	328		334
Group VI	– Dealers with loans classified as substandard, doubtful or impaired	110		90
		$	9,343	$	7,533