General Motors 2012 Annual Report Download - page 52

GENERAL MOTORS COMPANY AND SUBSIDIARIES
Series A Preferred Stock
Beginning December 31, 2014 we will be permitted to redeem, in whole or in part, the shares of Series A Preferred Stock
outstanding at a redemption price equal to $25.00 per share plus any accrued and unpaid dividends, subject to limited exceptions. Our
ability to redeem any portion of this $6.9 billion face amount in Series A Preferred Stock will depend upon our having sufficient
liquidity.
Automotive Financing
Liquidity Overview
GM Financial’s primary sources of cash are finance charge income, servicing fees, net distributions from securitization trusts,
borrowings under credit facilities, transfers of finance receivables to trusts in securitization transactions, collections and recoveries on
finance receivables and net proceeds from senior notes transactions. GM Financial’s primary uses of cash are purchases and
originations of finance receivables and leased assets, repayment of credit facilities, securitization of notes payable and other
indebtedness, funding credit enhancement requirements for securitization transactions and credit facilities and operating expenses.
GM Financial used cash of $5.6 billion, $5.0 billion and $0.9 billion for the purchase of consumer finance receivables in the years
ended December 31, 2012 and 2011 and the three months ended December 31, 2010. GM Financial used cash of $1.2 billion for the
origination of commercial finance receivables in the year ended December 31, 2012. GM Financial used cash of $1.1 billion and $0.8
billion for the purchase of leased vehicles in the years ended December 31, 2012 and 2011. These purchases and originations were
funded initially utilizing cash and borrowings under credit facilities and subsequently funded in securitization transactions.
GM Financial received cash of $4.0 billion, $3.7 billion and $0.9 billion from collections and recoveries on consumer finance
receivables in the years ended December 31, 2012 and 2011 and the three months ended December 31, 2010 and $0.7 billion from
collections on commercial finance receivables in the year ended December 31, 2012.
Available Liquidity
The following table summarizes GM Financial’s available liquidity for daily operations (dollars in millions):
December 31, 2012 December 31, 2011
Cash and cash equivalents ......................................................... $1,289 $ 572
Borrowing capacity on unpledged eligible receivables .................................. 706 387
Borrowing capacity on unpledged eligible leased assets ................................. 643 294
Available liquidity ............................................................... $2,638 $1,253
The increase in liquidity is due primarily to the issuance of senior notes of $1.0 billion, improved credit performance on consumer
finance receivables which led to an increase in distributions from trusts and the settlement of several older securitizations with high
enhancement levels.
As previously described GM Financial has the ability to borrow up to $4.0 billion against our three-year $5.5 billion secured
revolving credit facility. GM Financial’s borrowings under the facility are limited by our ability to borrow the entire amount available
under the facility. Therefore GM Financial may be able to borrow up to $4.0 billion or may be unable to borrow depending on our
borrowing activity. If GM Financial does borrow under the facility it expects such borrowings would be short-term in nature. Neither
GM Financial, nor any of its subsidiaries, guarantee any obligations under this facility and none of its subsidiaries’ assets secure this
facility.
General Motors Company 2012 ANNUAL REPORT 49