GM Financial Receivables



	March 31, 2018									December 31, 2017
	Retail			Commercial			Total			Retail			Commercial			Total
Finance receivables, collectively evaluated for impairment, net of fees	$	32,020		$	9,973		$	41,993		$	30,486		$	9,935		$	40,421
Finance receivables, individually evaluated for impairment, net of fees	2,199			23			2,222			2,228			22			2,250
GM Financial receivables	34,219			9,996			44,215			32,714			9,957			42,671
Less: allowance for loan losses	(858		)	(54		)	(912		)	(889		)	(53		)	(942		)
GM Financial receivables, net	$	33,361		$	9,942		$	43,303		$	31,825		$	9,904		$	41,729

Fair value of GM Financial receivables							$	43,035								$	41,735

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



	Three Months Ended
	March 31, 2018			March 31, 2017
Allowance for loan losses at beginning of period	$	942		$	805
Provision for loan losses	136			211
Charge-offs	(295		)	(298		)
Recoveries	123			143
Effect of foreign currency	6			6
Allowance for loan losses at end of period	$	912		$	867

The allowance for loan losses on retail and commercial finance receivables included a collective allowance of $601 million and $611 million and a specific allowance of $311 million and $331 million at March 31, 2018 and December 31, 2017.

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 their 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, 2018 and December 31, 2017, 31% and 33% of retail finance receivables were from consumers with sub-prime credit scores, which are defined as FICO scores or equivalent scores 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 the payment was contractually due. The accrual of finance charge income had been suspended on delinquent retail finance receivables with contractual amounts due of $852 million and $778 million at March 31, 2018 and December 31, 2017. 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, 2018				March 31, 2017
	Amount		Percent of Contractual Amount Due		Amount		Percent of Contractual Amount Due
31-to-60 days delinquent	$	1,265	3.7	%	$	995	3.4	%
Greater-than-60 days delinquent	605		1.7	%	430		1.4	%
Total finance receivables more than 30 days delinquent	1,870		5.4	%	1,425		4.8	%
In repossession	53		0.2	%	46		0.2	%
Total finance receivables more than 30 days delinquent or in repossession	$	1,923	5.6	%	$	1,471	5.0	%

Retail finance receivables classified as troubled debt restructurings and individually evaluated for impairment were $2.2 billion and the allowance for loan losses included $307 million and $328 million of specific allowances on these receivables at March 31, 2018 and December 31, 2017.

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. The commercial finance receivables on non-accrual status were insignificant at March 31, 2018 and December 31, 2017. The following table summarizes the credit risk profile by dealer risk rating of the commercial finance receivables:



		March 31, 2018		December 31, 2017
Group I	– Dealers with superior financial metrics	$	1,784	$	1,915
Group II	– Dealers with strong financial metrics	3,670		3,465
Group III	– Dealers with fair financial metrics	3,161		3,239
Group IV	– Dealers with weak financial metrics	1,048		997
Group V	– Dealers warranting special mention due to elevated risks	268		260
Group VI	– Dealers with loans classified as substandard, doubtful or impaired	65		81
		$	9,996	$	9,957