General Motors 2013 Annual Report Download - page 87

GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
cash equivalents, Accounts and notes receivables, net, Inventories, and Property, net; and (2) Total liabilities were $395 million and
$254 million, which were composed of Accounts payable (principally trade) and Accrued liabilities. In the years ended December 31,
2013 and 2012 Total net sales and revenue recorded for these consolidated VIEs were $1.1 billion and $1.0 billion and Net income
was $55 million and $56 million. These amounts are stated prior to intercompany eliminations. Liabilities recognized as a result of
consolidating VIEs generally do not represent claims against us or our other subsidiaries and assets recognized generally are for the
benefit of the VIEs’ operations and cannot be used to satisfy our obligations.
GM Korea and GM India are non-wholly owned consolidated subsidiaries that we control through a majority voting interest. They
are also VIEs because in the future they may require additional subordinated financial support. At December 31, 2013 and 2012 the
combined creditors of GM Korea’s and GM India’s liabilities of $242 million and $368 million, which were composed of short-term
debt, current derivative liabilities and long-term debt, do not have recourse to our general credit.
Automotive Financing — GM Financial
GM Financial uses special purpose entities (SPEs) that are considered VIEs to issue variable funding notes to third party bank-
sponsored warehouse facilities or asset-backed securities to investors in securitization transactions. The debt issued by these VIEs is
backed by the cash flows related to finance receivables and leasing related assets transferred by GM Financial to the VIEs (Securitized
Assets). GM Financial holds variable interests in the VIEs that could potentially be significant to the VIEs. GM Financial determined
that it is the primary beneficiary of the SPEs because (1) the servicing responsibilities for the Securitized Assets give it the power to
direct the activities that most significantly impact the performance of the VIEs and (2) the variable interests in the VIEs give it the
obligation to absorb losses and the right to receive residual returns that could potentially be significant. The assets and liabilities of the
VIEs are included in GM Financial’s consolidated balance sheets. The amounts are stated prior to intercompany eliminations.
The following table summarizes the assets and liabilities related to GM Financial’s consolidated VIEs (dollars in millions):
December 31, 2013 December 31, 2012
Restricted cash ................................................................. $ 1,523 $ 744
Securitized Assets ............................................................... $ 23,584 $ 10,442
Securitization notes payable and other credit facilities ................................... $ 19,448 $ 9,378
Restricted cash represents collections from the underlying Securitized Assets and certain reserve accounts held as credit
enhancement for securitizations held by GM Financial for the benefit of the noteholders. Except for the acquisition accounting
adjustments, which are not recorded in SPE trusts, GM Financial recognizes finance charge income, leased vehicle income and other
income on the Securitized Assets and interest expense on the secured debt issued by the SPEs. GM Financial also maintains an
allowance for credit losses on the Securitized Assets. Cash pledged to support the secured borrowings is deposited to a restricted cash
account which is invested in highly liquid securities with original maturities of 90 days or less.
The assets of the VIEs and the restricted cash held by GM Financial serve as the sole source of repayment for the debt issued by
these entities. Investors in the notes issued by the VIEs do not have recourse to GM Financial or its other assets, with the exception of
customary representation and warranty repurchase provisions and indemnities that GM Financial provides as the servicer. GM
Financial is not required and does not currently intend to provide additional financial support to these SPEs. While these subsidiaries
are included in our consolidated financial statements, these subsidiaries are separate legal entities and their assets are legally owned by
them and are not available to GM Financial’s creditors.
Nonconsolidated VIEs
Automotive
VIEs that are not consolidated include certain vehicle assembling, manufacturing and selling venture arrangements and other
automotive related entities to which we provided financial support, including GM India prior to September 2012 and Ally Financial. We
concluded these entities are VIEs because they do not have sufficient equity at risk or may require additional subordinated financial
support. We currently lack the power through voting or similar rights to direct those activities of these entities that most significantly
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