GM Financial Receivables and Transactions



	December 31, 2018									December 31, 2017
	Retail			Commercial(a)			Total			Retail			Commercial(a)			Total
Finance receivables, collectively evaluated for impairment, net of fees	$	38,220		$	12,235		$	50,455		$	30,486		$	9,935		$	40,421
Finance receivables, individually evaluated for impairment, net of fees	2,348			41			2,389			2,228			22			2,250
GM Financial receivables	40,568			12,276			52,844			32,714			9,957			42,671
Less: allowance for loan losses	(844		)	(67		)	(911		)	(889		)	(53		)	(942		)
GM Financial receivables, net	$	39,724		$	12,209		$	51,933		$	31,825		$	9,904		$	41,729

Fair value of GM Financial receivables utilizing Level 2 inputs							$	12,209								$	9,904
Fair value of GM Financial receivables utilizing Level 3 inputs							$	39,430								$	31,831

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(a)	Net of dealer cash management balances of $922 million and $536 million at December 31, 2018 and 2017.



	Years Ended December 31,
	2018			2017			2016
Allowance for loan losses at beginning of period	$	942		$	805		$	749
Provision for loan losses	642			757			644
Charge-offs	(1,199		)	(1,173		)	(1,137		)
Recoveries	536			552			542
Effect of foreign currency	(10		)	1			7
Allowance for loan losses at end of period	$	911		$	942		$	805

The allowance for loan losses on retail and commercial finance receivables included a collective allowance of $586 million, $611 million and $525 million and a specific allowance of $325 million, $331 million and $280 million at December 31, 2018, 2017 and 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 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 December 31, 2018 and 2017 25% and 33% 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.

We purchase retail 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.

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 $888 million and $778 million at December 31, 2018 and 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:



	December 31, 2018				December 31, 2017
	Amount		Percent of Contractual Amount Due		Amount		Percent of Contractual Amount Due
31-to-60 days delinquent	$	1,349	3.3	%	$	1,334	4.1	%
Greater-than-60 days delinquent	547		1.4	%	559		1.7	%
Total finance receivables more than 30 days delinquent	1,896		4.7	%	1,893		5.8	%
In repossession	44		0.1	%	27		—	%
Total finance receivables more than 30 days delinquent or in repossession	$	1,940	4.8	%	$	1,920	5.8	%

Retail finance receivables classified as TDRs and individually evaluated for impairment were $2.3 billion and $2.2 billion and the allowance for loan losses included $321 million and $328 million of specific allowances on these receivables at December 31, 2018 and 2017.

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 December 31, 2018 and 2017. The following table summarizes the credit risk profile by dealer risk rating of the commercial finance receivables:



		December 31, 2018		December 31, 2017
Group I	– Dealers with superior financial metrics	$	2,192	$	1,915
Group II	– Dealers with strong financial metrics	4,399		3,465
Group III	– Dealers with fair financial metrics	4,064		3,239
Group IV	– Dealers with weak financial metrics	1,116		997
Group V	– Dealers warranting special mention due to elevated risks	422		260
Group VI	– Dealers with loans classified as substandard, doubtful or impaired	83		81
		$	12,276	$	9,957

Transactions with GM Financial The following table shows transactions between our Automotive segments and GM Financial. These amounts are presented in GM Financial's consolidated balance sheets and statements of income. All balance sheet amounts in the table below are eliminated.



	December 31, 2018		December 31, 2017
Consolidated Balance Sheets
Commercial finance receivables, net due from GM consolidated dealers	$	445	$	355
Direct-financing lease receivables from GM subsidiaries	$	134	$	88
Subvention receivable(a)	$	727	$	306
Commercial loan funding payable	$	61	$	90



	Years Ended December 31,
	2018		2017		2016
Consolidated Statements of Income
Interest subvention earned on finance receivables	$	554	$	492	$	387
Leased vehicle subvention earned	$	3,274	$	3,046	$	2,232

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(a)	Cash paid by Automotive segments to GM Financial for subvention was $3.8 billion, $4.3 billion, and $4.2 billion during 2018, 2017 and 2016.

GM Financial’s Board of Directors declared and paid a dividend of $375 million on its common stock in October 2018; and paid a special dividend of $550 million to GM in November 2017 following the sale of the Fincos.