General Motors Financial Company, Inc. - FORM 10-Q

General Motors Financial Company, Inc. - FORM 10-Q - November 9, 2010

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EX-31.1 - OFFICERS' CERTIFICATIONS PURSUANT TO SECTION 302 - General Motors Financial Company, Inc.	dex311.htm
EX-32.1 - OFFICERS' CERTIFICATIONS PURSUANT TO SECTION 906 - General Motors Financial Company, Inc.	dex321.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2010

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 1-10667

General Motors Financial Company, Inc.

(formerly AmeriCredit Corp.)

(Exact name of registrant as specified in its charter)

Texas

75-2291093

(State or other jurisdiction of

Incorporation or organization)

(I.R.S. Employer

Identification No.)

801 Cherry Street, Suite 3500, Fort Worth, Texas 76102

(Address of principal executive offices, including Zip Code)

(817) 302-7000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 105 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨ No x

There were 500 shares of common stock, $0.01 par value outstanding as of November 9, 2010.

GENERAL MOTORS FINANCIAL COMPANY, INC.

(formerly AMERICREDIT CORP.)

INDEX TO FORM 10-Q


			Page

Part I. FINANCIAL INFORMATION

	Item 1.	CONDENSED FINANCIAL STATEMENTS (UNAUDITED)		3

		Consolidated Balance Sheets – September 30, 2010 and June 30, 2010		3

		Consolidated Statements of Income and Comprehensive Income – Three Months Ended September 30, 2010 and 2009		4

		Consolidated Statements of Cash Flows – Three Months Ended September 30, 2010 and 2009		5

		Notes to Consolidated Financial Statements		6

	Item 2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		31

	Item 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		47

	Item 4.	CONTROLS AND PROCEDURES		47

Part II. OTHER INFORMATION

	Item 1.	LEGAL PROCEEDINGS		48

	Item 1A.	RISK FACTORS		49

	Item 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS		49

	Item 3.	DEFAULTS UPON SENIOR SECURITIES		49

	Item 4.	REMOVED AND RESERVED		49

	Item 5.	OTHER INFORMATION		49

	Item 6.	EXHIBITS		50

SIGNATURE				51

Part I. FINANCIAL INFORMATION

Item 1.

CONDENSED FINANCIAL STATEMENTS

GENERAL MOTORS FINANCIAL COMPANY, INC.

Consolidated Balance Sheets

(Unaudited, Dollars in Thousands)


	September 30, 2010			June 30, 2010
Assets
Cash and cash equivalents	$	537,529		$	282,273
Finance receivables, net		8,147,086			8,160,208
Restricted cash – securitization notes payable		975,942			930,155
Restricted cash – credit facilities		134,468			142,725
Property and equipment, net		36,592			37,734
Leased vehicles, net		54,730			94,677
Deferred income taxes		77,999			81,836
Other assets		143,064			151,425


Total assets	$	10,107,410		$	9,881,033


Liabilities and Shareholders’ Equity
Liabilities:
Credit facilities	$	617,415		$	598,946
Securitization notes payable		6,273,224			6,108,976
Senior notes		70,620			70,620
Convertible senior notes		419,693			414,068
Accrued taxes and expenses		208,438			210,013
Interest rate swap agreements		60,895			70,421
Other liabilities		6,504			7,565


Total liabilities		7,656,789			7,480,609


Commitments and contingencies (Note 9)

Shareholders’ equity:
Preferred stock, $.01 par value per share, 20,000,000 shares authorized; none issued
Common stock, $.01 par value per share, 350,000,000 shares authorized; 137,751,364 and 136,856,360 shares issued		1,378			1,369
Additional paid-in capital		321,576			327,095
Accumulated other comprehensive income		17,153			11,870
Retained earnings		2,150,480			2,099,005


		2,490,587			2,439,339

Treasury stock, at cost (1,955,736 and 1,916,510 shares)		(39,966	)		(38,915	)


Total shareholders’ equity		2,450,621			2,400,424


Total liabilities and shareholders’ equity	$	10,107,410		$	9,881,033

GENERAL MOTORS FINANCIAL COMPANY, INC.

Consolidated Statements of Income and Comprehensive Income

(Unaudited, Dollars in Thousands, Except Per Share Data)


	Three Months Ended September 30,
	2010			2009
Revenue
Finance charge income	$	342,349		$	389,796
Other income		30,275			23,488

		372,624			413,284


Costs and expenses
Operating expenses		68,855			68,862
Leased vehicles expenses		6,539			10,110
Provision for loan losses		74,618			157,951
Interest expense		89,364			130,148
Acquisition expenses		42,651
Restructuring charges, net		(39	)		(37	)

		281,988			367,034


Income before income taxes		90,636			46,250

Income tax provision		39,336			20,489


Net income		51,300			25,761


Other comprehensive income
Unrealized gains on cash flow hedges		6,255			7,411
Foreign currency translation adjustment		2,055			6,924
Income tax provision		(3,027	)		(5,176	)


Other comprehensive income		5,283			9,159


Comprehensive income	$	56,583		$	34,920


Earnings per share
Basic	$	0.38		$	0.19

Diluted	$	0.37		$	0.19


Weighted average shares
Basic		135,232,827			133,229,960

Diluted		140,302,755			136,083,460

The accompanying notes are an integral part of these consolidated financial statements.

GENERAL MOTORS FINANCIAL COMPANY, INC.

Consolidated Statements of Cash Flows

(Unaudited, in Thousands)


	Three Months Ended September 30,
	2010			2009
Cash flows from operating activities
Net income	$	51,300		$	25,761
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		14,649			22,824
Accretion and amortization of loan fees		(942	)		2,375
Provision for loan losses		74,618			157,951
Deferred income taxes		452			15,517
Non-cash interest charges on convertible debt		5,625			5,249
Stock-based compensation expense		5,019			2,968
Amortization of warrant costs					1,968
Other		(13,800	)		(6,817	)
Changes in assets and liabilities:
Other assets		16,373			1,305
Accrued taxes and expenses		(8,552	)		(6,657	)
Income tax receivable					113,207

Net cash provided by operating activities		144,742			335,651

Cash flows from investing activities:
Purchases of receivables		(940,763	)		(217,920	)
Principal collections and recoveries on receivables		883,807			912,121
Purchases of property and equipment		(312	)		(152	)
Change in restricted cash – securitization notes payable		(45,787	)		(21,698	)
Change in restricted cash – credit facilities		8,257			24,798
Change in other assets		40,193			10,387

Net cash (used) provided by investing activities		(54,605	)		707,536

Cash flows from financing activities:
Net change in credit facilities		(68,030	)		(611,065	)
Issuance of securitization notes payable		1,050,000			725,000
Payments on securitization notes payable		(795,512	)		(885,950	)
Debt issuance costs		(7,686	)		(2,704	)
Proceeds from issuance of common stock		2,138			1,136
Cash settlement of share based awards		(16,062	)
Other net changes		313			(119	)

Net cash provided (used) by financing activities		165,161			(773,702	)

Net increase in cash and cash equivalents		255,298			269,485
Effect of Canadian exchange rate changes on cash and cash equivalents		(42	)		(666	)
Cash and cash equivalents at beginning of period		282,273			193,287

Cash and cash equivalents at end of period	$	537,529		$	462,106

The accompanying notes are an integral part of these consolidated financial statements.

GENERAL MOTORS FINANCIAL COMPANY, INC.

Notes to Consolidated Financial Statements

(Unaudited)

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The consolidated financial statements include our accounts and the accounts of our wholly-owned subsidiaries, including certain special purpose financing trusts utilized in securitization transactions (“Trusts”) which are considered variable interest entities. All significant intercompany transactions and accounts have been eliminated in consolidation.

The consolidated financial statements as of September 30, 2010, and for the three months ended September 30, 2010 and 2009, are unaudited, and in management’s opinion include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for such interim periods. Certain prior year amounts have been reclassified to conform to the current year presentation. The results for interim periods are not necessarily indicative of results for a full year.

The interim period consolidated financial statements, including the notes thereto, are condensed and do not include all disclosures required by generally accepted accounting principles (“GAAP”) in the United States of America. These interim period financial statements should be read in conjunction with our consolidated financial statements that are included in our Annual Report on Form 10-K for the year ended June 30, 2010.

Subsequent Events

On October 1, 2010, pursuant to the terms of the Agreement and Plan of Merger (the “Merger Agreement”), dated as of July 21, 2010, with General Motors Holdings LLC (“GM Holdings”), a Delaware limited liability company and a wholly owned subsidiary of General Motors Company (“GM”), and Goalie Texas Holdco Inc., a Texas corporation and a direct wholly owned subsidiary of GM Holdings (“Merger Sub”), GM Holdings completed its acquisition of AmeriCredit Corp. via the merger of Merger Sub with and into AmeriCredit Corp. (the “Merger”), with AmeriCredit Corp. continuing as the surviving company in the Merger and becoming a wholly-owned subsidiary of GM Holdings. Following the Merger, our name was changed to General Motors Financial Company, Inc.

These financial statements do not reflect the purchase accounting adjustments that will be made as a result of the Merger.

NOTE 2 – FINANCE RECEIVABLES

Finance receivables consist of the following (in thousands):


	September 30, 2010			June 30, 2010
Finance receivables unsecuritized, net of fees	$	1,219,025		$	1,533,673
Finance receivables securitized, net of fees		7,456,550			7,199,845
Less allowance for loan losses		(528,489	)		(573,310	)

	$	8,147,086		$	8,160,208

Finance receivables securitized represent receivables transferred to our special purpose finance subsidiaries in securitization transactions accounted for as secured financings. Finance receivables unsecuritized include $589.9 million and $651.3 million pledged under our credit facilities as of September 30, 2010, and June 30, 2010, respectively.

Finance receivables are collateralized by vehicle titles and we have the right to repossess the vehicle in the event the consumer defaults on the payment terms of the contract.

The accrual of finance charge income has been suspended on $508.5 million and $491.2 million of delinquent finance receivables as of September 30, 2010, and June 30, 2010, respectively.

A summary of the allowance for loan losses is as follows (in thousands):


	Three Months Ended September 30,
	2010			2009
Balance at beginning of period	$	573,310		$	890,640
Provision for loan losses		74,618			157,951
Net charge-offs		(119,439	)		(222,633	)

Balance at end of period	$	528,489		$	825,958

NOTE 3 – SECURITIZATIONS

A summary of our securitization activity and cash flows from special purpose entities used for securitizations is as follows (in thousands):


	Three Months Ended September 30,
	2010		2009
Receivables securitized	$	1,164,267	$	981,056
Net proceeds from securitization		1,050,000		725,000
Servicing fees ^(a)		43,663		53,107
Distributions		110,930		74,624

(a)

Cash flows received for servicing securitizations accounted for as secured financings are included in finance charge income on the consolidated statements of income.

As of September 30, 2010 and June 30, 2010, we were servicing $7.5 billion and $7.2 billion, respectively, of finance receivables that have been transferred to securitization Trusts.

NOTE 4 – CREDIT FACILITIES

Amounts outstanding under our credit facilities are as follows (in thousands):


	September 30, 2010		June 30, 2010
Medium term note facility	$	543,843	$	598,946
Wachovia funding facilities		73,572

	$	617,415	$	598,946

Further detail regarding terms and availability of our credit facilities as of September 30, 2010, follows (in thousands):


Facility	Facility Amount		Advances Outstanding		Finance Receivables Pledged		Restricted Cash Pledged ^(e)
Master/Syndicated warehouse facility^(a):	$	1,300,000					$	300
GM revolving credit facility ^(b):		300,000
Medium term note facility ^(c):			$	543,843	$	589,936		105,180
Wachovia funding facilities ^(d):				73,572

	$	1,600,000	$	617,415	$	589,936	$	105,480

(a)

In February 2011 when the revolving period ends and if the facility is not renewed, the outstanding balance will be repaid over time based on the amortization of the receivables pledged until February 2012 when the remaining balance will be due and payable.

(b)

On September 30, 2010, we entered into a six month unsecured revolving credit facility with General Motors Holdings LLC.

(c)

The revolving period under this facility ended in October 2009, and the outstanding debt balance will be repaid over time based on the amortization of the receivables pledged until October 2016 when any remaining amount outstanding will be due and payable.

(d)

Advances under the Wachovia funding facilities are currently secured by $77.4 million of asset-backed securities issued in the AmeriCredit Automobile Receivables Trust (“AMCAR”) 2008-1 securitization transaction. In accordance with the adoption of new accounting guidance regarding consolidation of variable interest entities, the Wachovia funding facilities were consolidated effective July 1, 2010. These facilities are amortizing in accordance with the underlying securitization transaction.

(e)

These amounts do not include cash collected on finance receivables pledged of $29.0 million which is also included in restricted cash – credit facilities on the consolidated balance sheets.

Our master/syndicated warehouse and medium term note facilities are administered by agents on behalf of institutionally managed commercial paper or medium term note conduits. Under these funding agreements, we transfer finance receivables to our special purpose finance subsidiaries. These subsidiaries, in turn, issue notes to the agents, collateralized by such finance receivables and cash. The agents provide funding under the notes to the subsidiaries pursuant to an advance formula, and the subsidiaries forward the funds to us in consideration for the transfer of finance receivables. While these subsidiaries are included in our consolidated financial statements, these subsidiaries are separate legal entities and the finance receivables and other assets held by these subsidiaries are legally owned by these subsidiaries and are not available to our creditors or our other subsidiaries. Advances under the funding agreements bear interest at commercial paper, London Interbank Offered Rates (“LIBOR”) or prime rates plus a credit spread and specified fees depending upon the source of funds provided by the agents.

We are required to hold certain funds in restricted cash accounts to provide additional collateral for borrowings under certain of our credit facilities. Additionally, the credit facilities, other than the GM facility, contain various covenants requiring minimum financial ratios, asset quality and portfolio performance ratios (portfolio net loss and delinquency ratios, and pool level cumulative net loss ratios) as well as limits on deferment levels. Failure to meet any of these covenants could result in an event of default under these agreements. If an event of default occurs under these agreements, the lenders could elect to declare all amounts outstanding under these agreements to be immediately due and payable, enforce their interests against collateral pledged under these agreements or, with respect to the master/syndicated warehouse facility, restrict our ability to obtain additional borrowings under this facility. As of September 30, 2010, we were in compliance with all covenants in our credit facilities.

In September 2008, we entered into agreements with Wachovia Capital Markets, LLC and Wachovia Bank, National Association (together, “Wachovia”), to establish two one-year funding facilities under which Wachovia would provide total funding of $117.7 million secured by asset-backed securities as collateral. In conjunction with our AMCAR 2008-1 transaction, we obtained initial funding under these facilities of $48.9 million by pledging double-A rated asset-backed securities (the “Class B Notes”) as collateral and $68.8 million by pledging single-A rated asset-backed securities (the “Class C Notes”) as collateral. Under these facilities, we retained the Class B Notes and the Class C Notes issued in the transaction and then sold the retained notes to a special purpose subsidiary, which in turn pledged such retained notes as collateral to secure the funding under the two facilities. The facilities will continue to amortize in accordance with the securitization transaction until paid off. As part of the transaction, we issued a warrant to Wachovia pursuant to which the holder or holder of the warrant could purchase 1,000,000 shares of our common stock, on or prior to September 24, 2015 at an exercise price of $13.55 per share. On August 10, 2010, Wachovia exercised the warrant at a price of $24.12 per share in a cashless exercise and received a net settlement of 438,112 shares of our common stock. In accordance with the adoption of new accounting guidance regarding consolidation of variable interest entities, the Wachovia funding facilities were consolidated effective July 1, 2010.

Debt issuance costs are being amortized to interest expense over the expected term of the credit facilities. Unamortized costs of $5.7 million and $8.3 million as of September 30, 2010 and June 30, 2010, respectively, are included in other assets on the consolidated balance sheets.

NOTE 5 – SECURITIZATION NOTES PAYABLE

Securitization notes payable represents debt issued by us in securitization transactions. Debt issuance costs are being amortized over the expected term of the securitizations on an effective yield basis. Unamortized costs of $23.9 million and $19.7 million as of September 30, 2010 and June 30, 2010, respectively, are included in other assets on the consolidated balance sheets.

Securitization notes payable as of September 30, 2010, consists of the following (dollars in thousands):


Transaction	Maturity Date (c)	Original Note Amount		Original Weighted Average Interest Rate			Receivables Pledged		Note Balance
2005-C-F	June 2012	$	1,100,000		4.5	%	$	58,150	$	53,024
2005-D-A	November 2012		1,400,000		4.9	%		102,189		93,663
2006-1	May 2013		945,000		5.3	%		86,759		68,132
2006-R-M	January 2014		1,200,000		5.4	%		236,448		213,922
2006-A-F	September 2013		1,350,000		5.6	%		193,237		176,342
2006-B-G	September 2013		1,200,000		5.2	%		212,929		194,880
2007-A-X	October 2013		1,200,000		5.2	%		262,089		240,576
2007-B-F	December 2013		1,500,000		5.2	%		390,138		358,792
2007-1	March 2016		1,000,000		5.4	%		223,104		227,332
2007-C-M	April 2014		1,500,000		5.5	%		462,531		424,725
2007-D-F	June 2014		1,000,000		5.5	%		334,869		308,131
2007-2-M	March 2016		1,000,000		5.3	%		318,783		305,461
2008-A-F	October 2014		750,000		6.0	%		382,105		305,426
2008-1 (a)	January 2015		500,000		8.7	%		316,308		104,361
2008-2	April 2015		500,000		10.5	%		337,707		190,596
2009-1	January 2016		725,000		7.5	%		605,037		407,045
2009-1 (APART)	July 2017		227,493		2.7	%		203,006		146,318
2010-1	July 2017		600,000		3.7	%		547,736		454,741
2010-A	July 2017		200,000		3.1	%		207,431		166,485
2010-2	June 2016		600,000		3.8	%		561,665		521,365
2010-B	November 2017		200,000		2.2	%		225,775		194,655
2010-3	January 2018		850,000		2.5	%		914,809		849,924
BV2005-LJ-1 (b)	May 2012		232,100		5.1	%		8,070		8,562
BV2005-LJ-2 (b)(d)	February 2014		185,596		4.6	%		9,711		8,804
BV2005-3 (b)	June 2014		220,107		5.1	%		17,327		18,245
LB2005-A (b)	April 2012		350,000		4.1	%		10,667		11,462
LB2005-B (b)	June 2012		350,000		4.4	%		18,752		16,414
LB2006-A (b)	May 2013		450,000		5.4	%		44,748		38,941
LB2006-B (b)	September 2013		500,000		5.2	%		68,009		70,052
LB2007-A	January 2014		486,000		5.0	%		96,461		94,848

		$	22,321,296				$	7,456,550	$	6,273,224

(a)

Note balance does not include $77.4 million of asset-backed securities pledged to the Wachovia funding facilities, which were consolidated effective July 1, 2010.

(b)

Transactions relate to securitization Trusts acquired by us.

(c)

Maturity date represents final legal maturity of securitization notes payable. Securitization notes payable are expected to be paid based on amortization of the finance receivables pledged to the Trusts.

(d)

Note balance does not include $1.4 million of asset-backed securities repurchased and retained by us.

At the time of securitization of finance receivables, we are required to pledge assets equal to a specified percentage of the securitization pool to support the securitization transaction. Typically, the assets pledged consist of cash deposited to a restricted account and additional receivables delivered to the Trust, which create overcollateralization. The securitization transactions require the percentage of assets pledged to support the transaction to increase until a specified level is attained. Excess cash flows generated by the Trusts are added to the restricted cash account or used to pay down outstanding debt in the Trusts, creating overcollateralization until the targeted percentage level of assets has been reached. Once the targeted percentage level of assets is reached and maintained, excess cash flows generated by the Trusts are released to us as distributions from Trusts. Additionally, as the balance of the securitization pool declines, the amount of pledged assets needed to maintain the required percentage level is reduced. Assets in excess of the required percentage are also released to us as distributions from Trusts.

With respect to our securitization transactions covered by a financial guaranty insurance policy, agreements with the insurers provide that if portfolio performance ratios (delinquency, cumulative default or cumulative net loss) in a Trust’s pool of receivables exceed certain targets, the specified credit enhancement levels would be increased.

Agreements with our financial guaranty insurance providers contain additional specified targeted portfolio performance ratios that are higher than those described in the preceding paragraph. If, at any measurement date, the targeted portfolio performance ratios with respect to any insured Trust were to exceed these higher levels, provisions of the agreements permit our financial guaranty insurance providers to declare the occurrence of an event of default and terminate our servicing rights to the receivables transferred to that Trust. As of September 30, 2010, no such servicing right termination events have occurred with respect to any of the Trusts formed by us.

NOTE 6 – SENIOR NOTES AND CONVERTIBLE SENIOR NOTES

Senior notes and convertible senior notes consist of the following (in thousands):


	September 30, 2010			June 30, 2010

8.5% Senior Notes (due June 2015)	$	70,620		$	70,620


0.75% Convertible Senior Notes (due in September 2011)		247,000			247,000
Debt discount		(14,138	)		(17,645	)

2.125% Convertible Senior Notes (due in September 2013)		215,017			215,017
Debt discount		(28,186	)		(30,304	)

	$	419,693		$	414,068

As a result of adopting new guidance regarding the accounting for convertible debt instruments that may be settled in cash upon conversion (including partial cash settlement), we have separately accounted for the liability and equity components of the convertible senior notes due in September 2011 and 2013, retrospectively, based on our nonconvertible debt borrowing rate on the issuance date of approximately 7%. At issuance, the liability and equity components were $404.3 million and $145.7 million ($91.7 million net of deferred taxes), respectively. The debt discount is being amortized to interest expense over the expected term of the notes based on the effective interest method.

As a result of the Merger, the holders of the senior notes and the convertible senior notes have the right to require us to repurchase some or all of their notes as provided in the indentures for such notes. The repurchase dates for any notes tendered to us pursuant to procedures previously delivered to holders of senior notes and convertible senior notes are December 3, 2010 with respect to the senior notes, and December 10, 2010, with respect to the convertible senior notes. The repurchase price with respect to the senior notes is 101% of the principal amount of the notes plus accrued interest and the repurchase price with respect to the convertible senior notes is the principal amount of the notes plus accrued interest. Also, pursuant to the terms of the convertible senior notes indentures a “make-whole” payment of $0.69 per $1,000 of principal amount of the convertible senior notes due in 2011 and $0.81 per $1,000 of principal amount of the convertible senior notes due in 2013 will be made to those who elect to convert as a result of the Merger.

Interest expense related to the convertible senior notes consists of the following (in thousands):


	Three Months Ended September 30,
	2010		2009
Contractual interest	$	1,605	$	1,605
Discount amortization		5,625		5,249

Total interest expense related to convertible senior notes	$	7,230	$	6,854

Debt issuance costs related to the senior notes and the convertible senior notes are being amortized to interest expense over the expected term of the notes; unamortized costs of $0.9 million and $0.9 million related to the senior notes and $2.5 million and $2.8 million related to the convertible senior notes are included in other assets on the consolidated balance sheets as of September 30, 2010 and June 30, 2010, respectively.

NOTE 7 – DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES

Interest rate caps, swaps and foreign currency contracts consist of the following (in thousands):


	September 30, 2010				June 30, 2010
	Notional		Fair Value		Notional		Fair Value
Assets

Interest rate swaps ^(a)	$	1,460,103	$	27,364	$	1,682,182	$	26,194
Interest rate caps ^(a)		837,475		2,027		774,456		3,188

Total assets	$	2,297,578	$	29,391	$	2,456,638	$	29,382

Liabilities

Interest rate swaps	$	1,460,103	$	60,895	$	1,682,182	$	70,421
Interest rate caps ^(b)		691,420		2,089		708,287		3,320
Foreign currency contracts ^(b)(c)		55,572		1,589		58,470		1,206

Total liabilities	$	2,207,095	$	64,573	$	2,448,939	$	74,947

(a)	Included in other assets on the consolidated balance sheet.

(b)	Included in other liabilities on the consolidated balance sheet.

(c)	Notional has been translated from Canadian dollars to U.S. dollars at the quarter end rate.

Interest rate swap agreements designated as hedges had unrealized losses of approximately $47.5 million and $53.8 million included in accumulated other comprehensive income as of September 30, 2010, and June 30, 2010, respectively. The ineffectiveness related to the interest rate swap agreements was immaterial for the three months ended September 30, 2010 and 2009. We estimate approximately $39.0 million of unrealized losses included in accumulated other comprehensive income will be reclassified into earnings within the next twelve months.

Interest rate swap agreements not designated as hedges had a change in fair value which resulted in gains of $5.4 million and $5.4 million included in interest expense on the consolidated statements of income for the three months ended September 30, 2010 and 2009, respectively.

Under the terms of our derivative financial instruments, we are required to pledge certain funds to be held in restricted cash accounts as collateral for the outstanding derivative transactions. As of September 30, 2010, and June 30, 2010, these restricted cash accounts totaled $25.3 million and $26.7 million, respectively, and are included in other assets on the consolidated balance sheets.

The following table presents information on the effect of derivative instruments on the consolidated statements of income and comprehensive income for the three month periods ended September 30, 2010 and 2009 (in thousands):


	Income (Losses) Recognized In Income						(Losses) Recognized in Accumulated Other Comprehensive Income						(Losses) Reclassified From Accumulated Other Comprehensive Income into Income (c)
	September 30,						September 30,						September 30,
	2010			2009			2010			2009			2010			2009
Non-Designated Hedges:
Interest rate contracts (a)	$	5,478		$	5,924
Foreign currency contracts (b)		(383	)		(2,210	)

Total	$	5,095		$	3,714


Designated Hedges:
Interest rate contracts (a)	$	(85	)	$	20		$	(8,218	)	$	(15,833	)	$	(14,473	)	$	(23,244	)

Total	$	(85	)	$	20		$	(8,218	)	$	(15,833	)	$	(14,473	)	$	(23,244	)

(a)	Income (losses) recognized in income are included in interest expense.

(b)	Losses recognized in income are included in operating expenses.

(c)	Losses reclassified from AOCI into income for effective and ineffective portions are included in interest expense.

NOTE 8 – FAIR VALUES OF ASSETS AND LIABILITIES

Effective July 1, 2008, we adopted fair value measurement guidance which provides a framework for measuring fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Fair value measurement requires that valuation techniques maximize the use of observable inputs and minimize the use of unobservable inputs and also establishes a fair value hierarchy which prioritizes the valuation inputs into three broad levels.

There are three general valuation techniques that may be used to measure fair value, as described below:

(A)	Market approach – Uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. Prices may be indicated by pricing guides, sale transactions, market trades, or other sources;

(B)	Cost approach – Based on the amount that currently would be required to replace the service capacity of an asset (replacement cost); and

(C)

Income approach – Uses valuation techniques to convert future amounts to a single present amount based on current market expectations about the future amounts (includes present value techniques and option-pricing models). Net present value is an income approach where a stream of expected cash flows is discounted at an appropriate market interest rate.

Assets and liabilities itemized below were measured at fair value on a recurring basis at September 30, 2010:


	September 30, 2010 (in thousands)
	Fair Value Measurements Using
	Level 1	Level 2		Level 3
	Quoted Prices In Active Markets Identical Assets	Significant Other Observable Inputs		Significant Unobservable Inputs		Assets/ Liabilities At Fair Value
	Quoted Prices In Active Markets Identical Assets	Significant Other Observable Inputs		Significant Unobservable Inputs		Assets/ Liabilities At Fair Value
Assets
Derivatives not designated as hedging instruments:
Interest rate caps (A)		$	2,027			$	2,027
Interest rate swaps (C)				$	27,364		27,364

Total assets	$	$	2,027	$	27,364	$	29,391

Liabilities
Derivatives designated as hedging instruments:
Interest rate swaps (C)				$	60,895	$	60,895
Derivatives not designated as hedging instruments:
Interest rate caps (A)		$	2,089				2,089
Foreign currency contracts (A)			1,589				1,589

Total liabilities	$	$	3,678	$	60,895	$	64,573

Assets and liabilities itemized below were measured at fair value on a recurring basis at June 30, 2010:


	June 30, 2010 (in thousands)
	Fair Value Measurements Using
	Level 1	Level 2		Level 3
	Quoted Prices In Active Markets Identical Assets	Significant Other Observable Inputs		Significant Unobservable Inputs		Assets/ Liabilities At Fair Value
	Quoted Prices In Active Markets Identical Assets	Significant Other Observable Inputs		Significant Unobservable Inputs		Assets/ Liabilities At Fair Value
Assets
Derivatives not designated as hedging instruments:
Interest rate caps (A)		$	3,188			$	3,188
Interest rate swaps (C)				$	26,194		26,194

Total assets	$	$	3,188	$	26,194	$	29,382

Liabilities
Derivatives designated as hedging instruments:
Interest rate swaps (C)				$	70,421	$	70,421
Derivatives not designated as hedging instruments:
Interest rate caps (A)		$	3,320				3,320
Foreign currency contracts (A)			1,206				1,206

Total liabilities	$	$	4,526	$	70,421	$	74,947

Financial instruments are considered Level 1 when quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis.

Financial instruments are considered Level 2 when inputs other than quoted prices are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

Financial instruments are considered Level 3 when their values are determined using price models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. Level 3 financial instruments also include those for which the determination of fair value requires significant management judgment or estimation. A brief description of the valuation techniques used for our Level 3 assets and liabilities is provided below.

The table below presents a reconciliation for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) (in thousands):


	Assets			Liabilities
	Interest Rate Swap Agreements			Interest Rate Swap Agreements
Balance at July 1, 2010	$	26,194		$	(70,421	)
Total realized and unrealized gains
Included in earnings		5,417			(85	)
Included in other comprehensive income					(8,218	)
Settlements		(4,247	)		17,829

Balance at September 30, 2010	$	27,364		$	(60,895	)

Derivatives

The fair values of our interest rate caps and foreign currency contracts are valued based on quoted market prices received from bank counterparties and are classified as Level 2.

Our interest rate swaps are not exchange traded but instead are traded in over-the-counter markets where quoted market prices are not readily available. The fair value of derivatives is derived using models that use primarily market observable inputs, such as interest rate yield curves and credit curves. Any derivative fair value measurements using significant assumptions that are unobservable are classified as Level 3, which include interest rate swaps whose remaining terms extend beyond market observable interest rate yield curves. The impacts of our and the counterparties’ non-performance risk to the derivative trades is considered when measuring the fair value of derivative assets and liabilities.

NOTE 9 – COMMITMENTS AND CONTINGENCIES

Guarantees of Indebtedness

The payments of principal and interest on our senior notes and convertible senior notes are guaranteed by certain of our subsidiaries. The par value of the senior notes and convertible senior notes was $532.6 million as of September 30, 2010, and June 30, 2010. See guarantor consolidating financial statements in Note 14.

Limited Corporate Guarantees of Indebtedness

We guaranteed the timely payment of interest and ultimate payment of principal on the Class B and Class C asset-backed securities issued in our AMCAR 2008-2 securitization transaction, up to a maximum of $50.0 million in the aggregate.

Legal Proceedings

As a consumer finance company, we are subject to various consumer claims and litigation seeking damages and statutory penalties, based upon, among other things, usury, disclosure inaccuracies, wrongful repossession, violations of bankruptcy stay provisions, certificate of title disputes, fraud, breach of contract and discriminatory treatment of credit applicants. Some litigation against us could take the form of class action complaints by consumers and/or, prior to the Merger, shareholders. As the assignee of finance contracts originated by dealers, we may also be named as a co-defendant in lawsuits filed by consumers principally against dealers. The damages and penalties claimed by consumers in these types of matters can be substantial. The relief requested by the plaintiffs varies but can include requests for compensatory, statutory and punitive damages. We believe that we have taken prudent steps to address and mitigate the litigation risks associated with our business activities. However, any adverse resolution of litigation pending or threatened against us could have a material adverse affect on our financial condition, results of operations and cash flows.

On July 21, 2010, we entered into the Merger Agreement. The following litigation has been commenced with respect to the proposed Merger:

On July 27, 2010, an action styled Robert Hatfield, Derivatively on behalf of AmeriCredit Corp. vs. Clifton H. Morris, Jr., Daniel E. Berce, John Clay, Ian M. Cumming, A.R. Dike, James H. Greer, Douglas K. Higgins, Kenneth H. Jones, Jr., Robert B. Sturges, Justin R. Wheeler, General Motors Holdings LLC and General Motors Company, Defendants, and AmeriCredit Corp., Nominal Defendant, was filed in the District Court of Tarrant County, Texas, Cause No. 017 246937 10 (the “Hatfield Case”). In the Hatfield Case, the plaintiff alleges, among other allegations, that the individual defendants, who are or were members of our Board of Directors, breached their fiduciary duties with regards to the transaction between us and GM Holdings. Among other relief, the complaint sought to enjoin the closing of the transaction, and seeks to require us to rescind the transaction and the recovery of attorney fees and expenses.

On July 28, 2010, an action styled Labourers’ Pension Fund of Central and Eastern Canada, on behalf of itself and all others similarly situated v. AmeriCredit Corp., Clifton H. Morris, Jr., Daniel E. Berce, Bruce R. Berkowitz, John R. Clay, Ian M. Cumming, A.R. Dike, James H. Greer, Douglas K. Higgins, Kenneth H. Jones, Jr., Justin R. Wheeler and General Motors Company, Defendants, was filed in the District Court of Tarrant County, Texas, Cause No. 236 246960 10 (the “Labourers’ Pension Fund Case”). In the Labourers’ Pension Fund Case, the plaintiff seeks class action status and alleges that certain current and former members of our Board of Directors breached their fiduciary duties in negotiating and approving the transaction between us and GM Holdings. Among other relief, the complaint sought to enjoin both the transaction from closing as well as a shareholder vote on the pending transaction and seeks the recovery of damages on behalf of shareholders and the recovery of attorney fees and expenses. The court has not yet determined whether the case may be maintained as a class action.

On August 6, 2010, an action styled Carla Butler, Derivatively on behalf of AmeriCredit Corp., Plaintiff vs. Clifton H. Morris, Jr., Daniel E. Berce, John Clay, Ian M. Cumming, A.R. Dike, James H. Greer, Douglas K. Higgins, Kenneth H. Jones, Jr., Robert B. Sturges, Justin R. Wheeler, General Motors Holdings LLC and General Motors Company, Defendants, and AmeriCredit Corp., Nominal Defendant, was filed in the District Court of Tarrant County, Texas, Cause No. 67 247227-10 (the “Butler Case”). In the Butler Case, like previously filed litigation related to the transaction between us and GM Holdings, the complaint alleges that our individual officers and certain current and former directors breached their fiduciary duties. Among other relief, the complaint sought to rescind the transaction and enjoin its consummation and also seeks an award of plaintiff costs and disbursements including attorneys’ and expert fees.

On September 1, 2010, an action styled Douglas Mogle, Plaintiff vs. AmeriCredit Corp., Clifton H. Morris, Jr., Daniel E. Berce, Bruce R. Berkowitz, John R. Clay, Ian M. Cumming, A.R. Dike, James H. Greer, Douglas K. Higgins, Kenneth H. Jones, Jr., Justin R. Wheeler, Leucadia National Corporation, Fairholme Funds Inc., and General Motors Company, was filed in the District Court of Tarrant County, Texas, Cause No. 153 247833 10 (the “Mogle Case”). In the Mogle Case, like previously filed litigation related to the transaction between us and GM Holdings, the complaint alleges that our individual officers and certain current and former directors breached their fiduciary duties. Among other relief, the complaint sought to enjoin both the transaction from closing as well as a shareholder vote on the transaction and seeks the recovery of damages on behalf of shareholders and the recovery of attorney fees and expenses. The court has not yet determined whether the case may be maintained as a class action.

We believe that the claims alleged in the Hatfield Case, the Labourers’ Pension Fund Case, the Butler Case and the Mogle Case are without merit and we intend to assert vigorous defenses to the litigation. Neither the likelihood of an unfavorable outcome nor the amount of ultimate liability, if any, with respect to this litigation can be determined at this time.

NOTE 10 – INCOME TAXES

We had unrecognized tax benefits of $42.7 million and $42.5 million at September 30, 2010 and June 30, 2010, respectively. The amount of unrecognized tax benefits, if recognized, that would affect the effective tax rate was $18.5 million and $17.6 million at September 30, 2010 and June 30, 2010, respectively, which includes the federal benefit of state taxes.

At September 30, 2010, we believe that it is reasonably possible that the balance of the gross unrecognized tax benefits could decrease by $0.2 million to $15.8 million in the next twelve months due to ongoing activities with various taxing jurisdictions that we expect may give rise to settlements or the expiration of statutes of limitations.

We recognize accrued interest and penalties associated with uncertain tax positions as part of the income tax provision. As of July 1, 2010, accrued interest and penalties associated with uncertain tax positions were $12.1 million and $8.5 million, respectively. During the three months ended September 30, 2010, we accrued an additional $0.9 million in potential interest and $0.2 million in potential penalties associated with uncertain tax positions.

We continually evaluate expiring statutes of limitations, audits, proposed settlements, changes in tax law and new authoritative rulings and recognize tax benefits and interest and penalties associated with uncertain tax positions as appropriate.

We file income tax returns in the U.S. and various state, local, and foreign jurisdictions. Our consolidated federal income tax returns for fiscal years 2009, 2008, 2007 and 2006 are under audit by the Internal Revenue Service (“IRS”). Our federal income tax returns prior to fiscal year 2006 are closed. Foreign and state jurisdictions have statutes of limitations that generally range from three to five years. Certain of our tax returns are currently under examination in various state tax jurisdictions.

Our effective income tax rate was 43.4% and 44.3% for the three months ended September 30, 2010 and 2009, respectively. The September 30, 2010 effective tax rate was negatively impacted primarily by the nondeductibility of certain payments to our executive officers related to the merger with GM. The September 30, 2009 effective tax rate was negatively impacted primarily by state income tax rates and adjustments to state deferred tax assets and liabilities.

Tax Accounting Change

During fiscal 2009, we filed an application for a change of accounting method for tax purposes under Internal Revenue Code (“IRC”) Section 475. We believe that, as a result of our business activities, certain assets must be marked-to-market for income tax purposes. Although this method change requires consent from the IRS, which is still pending, this change to a permissible method of accounting is generally considered to be perfunctory and should be granted. As a result of this change of accounting, we reported a taxable loss for fiscal 2009 of $803 million. Approximately $600 million of this loss was carried back to the prior two fiscal years to offset federal taxable income recognized in those years, resulting in an income tax refund of approximately $198 million.

On November 6, 2009, the Worker, Homeownership, and Business Assistance Act of 2009 was signed into law which provides an election to carryback a loss to the third, fourth or fifth year that precedes the year of loss. Because of this change in tax law, we elected to extend our U.S. federal fiscal 2009 net operating loss (“NOL”) carryback period which resulted in an additional income tax refund of approximately $81 million. We have fully utilized our federal NOL.

NOTE 11 – EARNINGS PER SHARE

A reconciliation of weighted average shares used to compute basic and diluted earnings per share is as follows (dollars in thousands, except per share data):


	Three Months Ended September 30,
	2010		2009
Net income	$	51,300	$	25,761


Basic weighted average shares		135,232,827		133,229,960

Incremental shares resulting from assumed conversions: Stock based compensation and warrants		5,069,928		2,853,500

Diluted weighted average shares		140,302,755		136,083,460


Earnings per share:
Basic	$	0.38	$	0.19

Diluted	$	0.37	$	0.19

Basic earnings per share have been computed by dividing net income by weighted average shares outstanding.

Diluted earnings per share has been computed by dividing net income by the weighted average shares and assumed incremental shares. The treasury stock method was used to compute the assumed incremental shares related to our outstanding stock-based compensation and warrants. The average market prices for the periods were used to determine the number of incremental shares. Options to purchase approximately 0.4 million and 1.8 million shares of common stock for the three months ended September 30, 2010 and 2009, respectively, were not included in the computation of diluted earnings per share because the option exercise price was greater than the average market price of the common shares. Warrants to purchase approximately 18.8 million shares of common stock for the three months ended September 30, 2010 and 2009, were not included in the computation of diluted earnings per share because the exercise price was greater than the average market price of the common shares.

NOTE 12 – SUPPLEMENTAL CASH FLOW INFORMATION

Cash payments for interest costs and income taxes consist of the following (in thousands):


	Three Months Ended September 30,
	2010		2009
Interest costs (none capitalized)	$	90,490	$	127,482
Income taxes		28,904		71

NOTE 13 – FAIR VALUE OF FINANCIAL INSTRUMENTS

Financial Accounting Standards Board (“FASB”) guidance regarding disclosures about fair value of financial instruments requires disclosure of fair value information about financial instruments, whether recognized or not in our consolidated balance sheets. Fair values are based on estimates using present value or other valuation techniques in cases where quoted market prices are not available. Those techniques are significantly affected by the assumptions used, including the discount rate and the estimated timing and amount of future cash flows. Therefore, the estimates of fair value may differ substantially from amounts that ultimately may be realized or paid at settlement or maturity of the financial instruments and those differences may be material. Disclosures about fair value of financial instruments exclude certain financial instruments and all non-financial instruments from our disclosure requirements. Accordingly, the aggregate fair value amounts presented do not represent the underlying value of our Company.

Estimated fair values, carrying values and various methods and assumptions used in valuing our financial instruments are set forth below (in thousands):


			September 30, 2010				June 30, 2010
			Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Financial assets:
Cash and cash equivalents	(a	)	$	537,529	$	537,529	$	282,273	$	282,273
Finance receivables, net	(b	)		8,147,086		8,127,397		8,160,208		8,110,223
Restricted cash – securitization notes payable	(a	)		975,942		975,942		930,155		930,155
Restricted cash – credit facilities	(a	)		134,468		134,468		142,725		142,725
Restricted cash – other	(a	)		25,590		25,590		26,960		26,960
Interest rate swap agreements	(d	)		27,364		27,364		26,194		26,194
Interest rate cap agreements purchased	(d	)		2,027		2,027		3,188		3,188
Financial liabilities:
Credit facilities	(c	)		617,415		617,415		598,946		598,946
Securitization notes payable	(d	)		6,273,224		6,408,808		6,108,976		6,230,902
Senior notes	(d	)		70,620		73,445		70,620		70,620
Convertible senior notes	(d	)		419,693		458,861		414,068		414,007
Interest rate swap agreements	(d	)		60,895		60,895		70,421		70,421
Interest rate cap agreements sold	(d	)		2,089		2,089		3,320		3,320
Foreign currency hedge contracts	(d	)		1,589		1,589		1,206		1,206

(a)

The carrying value of cash and cash equivalents, restricted cash – securitization notes payable, restricted cash – credit facilities and restricted cash – other is considered to be a reasonable estimate of fair value since these investments bear interest at market rates and have maturities of less than 90 days.

(b)	The fair value of the finance receivables is estimated based upon forecast cash flows on the receivables discounted using a weighted average cost of capital. The forecast includes among other things items such as prepayment, defaults, recoveries and fee income assumptions.

(c)	Credit facilities have variable rates of interest and maturities of three years or less. Therefore, carrying value is considered to be a reasonable estimate of fair value.

(d)

The fair values of the interest rate cap and swap agreements, foreign currency contracts, securitization notes payable, senior notes, convertible senior notes and foreign currency contracts are based on quoted market prices, when available. If quoted market prices are not available, the market value is estimated by discounting future net cash flows expected to be settled using a current risk-adjusted rate.

NOTE 14 – GUARANTOR CONSOLIDATING FINANCIAL STATEMENTS

The payment of principal and interest on our senior notes and convertible senior notes are guaranteed by certain of our subsidiaries (the “Subsidiary Guarantors”). The separate financial statements of the Subsidiary Guarantors are not included herein because the Subsidiary Guarantors are our wholly-owned consolidated subsidiaries and are jointly, severally, fully and unconditionally liable for the obligations represented by the senior notes and convertible senior notes. We believe that the consolidating financial information for General Motors Financial Company, Inc., the combined Subsidiary Guarantors and the combined Non-Guarantor Subsidiaries provide information that is more meaningful in understanding the financial position of the Subsidiary Guarantors than separate financial statements of the Subsidiary Guarantors.

The consolidating financial statements present consolidating financial data for (i) General Motors Financial Company, Inc. (on a parent only basis), (ii) the combined Subsidiary Guarantors, (iii) the combined Non-Guarantor Subsidiaries, (iv) an elimination column for adjustments to arrive at the information for the parent company and our subsidiaries on a consolidated basis and (v) the parent company and our subsidiaries on a consolidated basis.

Investments in subsidiaries are accounted for by the parent company using the equity method for purposes of this presentation. Results of operations of subsidiaries are therefore reflected in the parent company’s investment accounts and earnings. The principal elimination entries set forth below eliminate investments in subsidiaries and intercompany balances and transactions.

General Motors Financial Company, Inc.

Consolidating Balance Sheet

September 30, 2010

(Unaudited, in Thousands)


	General Motors Financial Company, Inc.			Guarantors		Non- Guarantors			Eliminations			Consolidated
ASSETS

Cash and cash equivalents				$	530,571	$	6,958					$	537,529
Finance receivables, net					589,644		7,557,442						8,147,086
Restricted cash - securitization notes payable							975,942						975,942
Restricted cash - credit facilities							134,468						134,468
Property and equipment, net	$	5,110			31,482								36,592
Leased vehicles, net					2,178		52,552						54,730
Deferred income taxes		57,944			125,678		(105,623	)					77,999
Other assets		3,342			85,832		53,890						143,064
Due from affiliates		678,457					1,998,548		$	(2,677,005	)
Investment in affiliates		2,333,647			3,874,952		820,380			(7,028,979	)

Total assets	$	3,078,500		$	5,240,337	$	11,494,557		$	(9,705,984	)	$	10,107,410


LIABILITIES AND SHAREHOLDERS’ EQUITY

Liabilities:
Credit facilities						$	617,415					$	617,415
Securitization notes payable							6,273,224						6,273,224
Senior notes	$	70,620											70,620
Convertible senior notes		419,693											419,693
Accrued taxes and expenses		137,566		$	31,453		39,419						208,438
Interest rate swap agreements							60,895						60,895
Other liabilities					6,504								6,504
Due to affiliates					2,677,005				$	(2,677,005	)

Total liabilities		627,879			2,714,962		6,990,953			(2,677,005	)		7,656,789


Shareholders’ equity:
Common stock		1,378			107,592					(107,592	)		1,378
Additional paid-in capital		321,576			75,887		1,279,497			(1,355,384	)		321,576
Accumulated other comprehensive income (loss)		17,153			50,238		(30,847	)		(19,391	)		17,153
Retained earnings		2,150,480			2,291,658		3,254,954			(5,546,612	)		2,150,480

		2,490,587			2,525,375		4,503,604			(7,028,979	)		2,490,587
Treasury stock		(39,966	)										(39,966	)

Total shareholders’ equity		2,450,621			2,525,375		4,503,604			(7,028,979	)		2,450,621


Total liabilities and shareholders’ equity	$	3,078,500		$	5,240,337	$	11,494,557		$	(9,705,984	)	$	10,107,410

General Motors Financial Company, Inc.

Consolidating Balance Sheet

June 30, 2010

(in thousands)


	General Motors Financial Company, Inc.			Guarantors		Non- Guarantors			Eliminations			Consolidated
ASSETS

Cash and cash equivalents				$	275,139	$	7,134					$	282,273
Finance receivables, net					823,241		7,336,967						8,160,208
Restricted cash - securitization notes payable							930,155						930,155
Restricted cash - credit facilities							142,725						142,725
Property and equipment, net	$	5,194			32,540								37,734
Leased vehicles, net					3,194		91,483						94,677
Deferred income taxes		13,118			107,912		(39,194	)					81,836
Other assets		3,751			97,010		50,664						151,425
Due from affiliates		741,354					1,857,097		$	(2,598,451	)
Investment in affiliates		2,256,871			3,753,620		820,266			(6,830,757	)

Total assets	$	3,020,288		$	5,092,656	$	11,197,297		$	(9,429,208	)	$	9,881,033


LIABILITIES AND SHAREHOLDERS’ EQUITY

Liabilities:
Credit facilities						$	598,946					$	598,946
Securitization notes payable							6,108,976						6,108,976
Senior notes	$	70,620											70,620
Convertible senior notes		414,068											414,068
Accrued taxes and expenses		135,058		$	34,229		40,726						210,013
Interest rate swap agreements							70,421						70,421
Other liabilities		118			7,447								7,565
Due to affiliates					2,598,451				$	(2,598,451	)

Total liabilities		619,864			2,640,127		6,819,069			(2,598,451	)		7,480,609


Shareholders’ equity:
Common stock		1,369			110,457					(110,457	)		1,369
Additional paid-in capital		327,095			75,887		1,272,491			(1,348,378	)		327,095
Accumulated other comprehensive income (loss)		11,870			45,256		(34,818	)		(10,438	)		11,870
Retained earnings		2,099,005			2,220,929		3,140,555			(5,361,484	)		2,099,005

		2,439,339			2,452,529		4,378,228			(6,830,757	)		2,439,339
Treasury stock		(38,915	)										(38,915	)

Total shareholders’ equity		2,400,424			2,452,529		4,378,228			(6,830,757	)		2,400,424

Total liabilities and shareholders’ equity	$	3,020,288		$	5,092,656	$	11,197,297		$	(9,429,208	)	$	9,881,033

General Motors Financial Company, Inc.

Consolidating Statement of Income

Three Months Ended September 30, 2010

(Unaudited, in Thousands)


	General Motors Financial Company, Inc.			Guarantors			Non- Guarantors		Eliminations			Consolidated

Revenue
Finance charge income				$	39,846		$	302,503				$	342,349
Other income	$	8,644			92,609			139,765	$	(210,743	)		30,275
Equity in income of affiliates		70,729			114,399					(185,128	)


		79,373			246,854			442,268		(395,871	)		372,624


Costs and expenses
Operating expenses		18,104			4,110			46,641					68,855
Leased vehicles expenses					867			5,672					6,539
Provision for loan losses					57,628			16,990					74,618
Interest expense		11,394			94,245			194,468		(210,743	)		89,364
Acquisition expenses		6,199			36,452								42,651
Restructuring charges, net					(39	)							(39	)


		35,697			193,263			263,771		(210,743	)		281,988


Income before income taxes		43,676			53,591			178,497		(185,128	)		90,636

Income tax (benefit) provision		(7,624	)		(17,138	)		64,098					39,336


Net income	$	51,300		$	70,729		$	114,399	$	(185,128	)	$	51,300

General Motors Financial Company, Inc.

Consolidating Statement of Income

Three Months Ended September 30, 2009

(Unaudited, in Thousands)


	General Motors Financial Company, Inc.			Guarantors			Non- Guarantors		Eliminations			Consolidated

Revenue
Finance charge income				$	19,324		$	370,472				$	389,796
Other income	$	4,958			87,417			162,952	$	(231,839	)		23,488
Equity in income of affiliates		34,348			42,655					(77,003	)


		39,306			149,396			533,424		(308,842	)		413,284


Costs and expenses
Operating expenses		3,406			14,027			51,429					68,862
Leased vehicles expenses					349			9,761					10,110
Provision for loan losses					13,498			144,453					157,951
Interest expense		13,290			90,260			258,437		(231,839	)		130,148
Restructuring charges, net					(37	)							(37	)


		16,696			118,097			464,080		(231,839	)		367,034


Income before income taxes		22,610			31,299			69,344		(77,003	)		46,250

Income tax (benefit) provision		(3,151	)		(3,049	)		26,689					20,489


Net income	$	25,761		$	34,348		$	42,655	$	(77,003	)	$	25,761

General Motors Financial Company, Inc.

Consolidating Statement of Cash Flows

Three Months Ended September 30, 2010

(Unaudited, in Thousands)


	General Motors Financial Company, Inc.			Guarantors			Non- Guarantors			Eliminations			Consolidated
Cash flows from operating activities:
Net income	$	51,300		$	70,729		$	114,399		$	(185,128	)	$	51,300
Adjustments to reconcile net income to net cash provided (used) by operating activities:
Depreciation and amortization		486			1,513			12,650						14,649
Accretion and amortization of loan fees					141			(1,083	)					(942	)
Provision for loan losses					57,628			16,990						74,618
Deferred income taxes		(46,078	)		(17,614	)		64,144						452
Stock-based compensation expense		5,625												5,625
Non-cash interest charges on convertible debt		5,019												5,019
Other					(2,362	)		(11,438	)					(13,800	)
Equity in income of affiliates		(70,729	)		(114,399	)					185,128
Changes in assets and liabilities:
Other assets		4,085			11,280			1,008						16,373
Accrued taxes and expenses		1,026			(9,295	)		(283	)					(8,552	)


Net cash provided (used) by operating activities		(49,266	)		(2,379	)		196,387						144,742


Cash flows from investing activities:
Purchases of receivables					(940,763	)		(1,155,706	)		1,155,706			(940,763	)
Principal collections and recoveries on receivables					(28,055	)		911,862						883,807
Net proceeds from sale of receivables					1,155,706						(1,155,706	)
Purchases of property and equipment		1			(313	)								(312	)
Change in restricted cash — securitization notes payable								(45,787	)					(45,787	)
Change in restricted cash — credit facilities								8,257						8,257
Change in other assets					(403	)		40,596						40,193
Net change in investment in affiliates		(2,076	)		(4,180	)		(114	)		6,370

Net cash (used) provided by investing activities		(2,075	)		181,992			(240,892	)		6,370			(54,605	)


Cash flows from financing activities:
Net change in credit facilities								(68,030	)					(68,030	)
Issuance of securitization notes payable								1,050,000						1,050,000
Payments on securitization notes payable								(795,512	)					(795,512	)
Debt issuance costs								(7,686	)					(7,686	)
Proceeds from issuance of common stock		2,138			(2,865	)		7,006			(4,141	)		2,138
Cash settlement of share based awards		(16,062	)											(16,062	)
Other net changes		313												313
Net change in due (to) from affiliates		62,897			78,603			(141,449	)		(51	)


Net cash provided by financing activities		49,286			75,738			44,329			(4,192	)		165,161


Net increase (decrease) in cash and cash equivalents		(2,055	)		255,351			(176	)		2,178			255,298

Effect of Canadian exchange rate changes on cash and cash equivalents		2,055			81						(2,178	)		(42	)

Cash and cash equivalents at beginning of period					275,139			7,134						282,273


Cash and cash equivalents at end of period	$			$	530,571		$	6,958		$			$	537,529

General Motors Financial Company, Inc.

Consolidating Statement of Cash Flows

Three Months Ended September 30, 2009

(Unaudited, in Thousands)


	General Motors Financial Company, Inc.			Guarantors			Non- Guarantors			Eliminations			Consolidated
Cash flows from operating activities:
Net income	$	25,761		$	34,348		$	42,655		$	(77,003	)	$	25,761
Adjustments to reconcile net income to net cash provided (used) by operating activities:
Depreciation and amortization		500			3,026			19,298						22,824
Accretion and amortization of loan fees					(2,218	)		4,593						2,375
Provision for loan losses					13,498			144,453						157,951
Deferred income taxes		(8,124	)		(3,048	)		26,689						15,517
Non-cash interest charges on convertible debt		5,249												5,249
Stock-based compensation expense		2,968												2,968
Amortization of warrant costs		1,968												1,968
Other					(2,284	)		(4,533	)					(6,817	)
Equity in income of affiliates		(34,348	)		(42,655	)					77,003
Changes in assets and liabilities:
Other assets		1,159			(4,644	)		4,790						1,305
Accrued taxes and expenses		(1,676	)		(3,711	)		(1,270	)					(6,657	)
Income tax receivable		113,239			(32	)								113,207


Net cash provided (used) by operating activities		106,696			(7,720	)		236,675						335,651


Cash flows from investing activities:
Purchases of receivables					(217,920	)		(257,339	)		257,339			(217,920	)
Principal collections and recoveries on receivables					56,325			855,796						912,121
Net proceeds from sale of receivables					257,339						(257,339	)
Purchases of property and equipment					(152	)								(152	)
Change in restricted cash — securitization notes payable								(21,698	)					(21,698	)
Change in restricted cash — credit facilities								24,798						24,798
Change in other assets					8,257			2,130						10,387
Net change in investment in affiliates		(6,196	)		688,630			6,827			(689,261	)


Net cash provided (used) by investing activities		(6,196	)		792,479			610,514			(689,261	)		707,536


Cash flows from financing activities:
Net change in credit facilities								(611,065	)					(611,065	)
Issuance of securitization notes payable								725,000						725,000
Payments on securitization notes payable								(885,950	)					(885,950	)
Debt issuance costs		1,517						(4,221	)					(2,704	)
Proceeds from issuance of common stock		1,136			(13,523	)		(682,636	)		696,159			1,136
Other net changes		(119	)											(119	)
Net change in due (to) from affiliates		(109,959	)		(500,628	)		609,675			912


Net cash (used) provided by financing activities		(107,425	)		(514,151	)		(849,197	)		697,071			(773,702	)


Net increase (decrease) in cash and cash equivalents		(6,925	)		270,608			(2,008	)		7,810			269,485

Effect of Canadian exchange rate changes on cash and cash equivalents		6,925			219						(7,810	)		(666	)

Cash and cash equivalents at beginning of period					186,564			6,723						193,287


Cash and cash equivalents at end of period	$			$	457,391		$	4,715		$			$	462,106

Item 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

SUBSEQUENT EVENTS

On October 1, 2010, pursuant to the terms of the Agreement and Plan of Merger (the “Merger Agreement”), dated as of July 21, 2010, with General Motors Holdings LLC (“GM Holdings”), a Delaware limited liability company and a wholly owned subsidiary of General Motors Company (“GM”), and Goalie Texas Holdco Inc., a Texas corporation and a direct wholly owned subsidiary of GM Holdings (“Merger Sub”), GM Holdings completed its acquisition of AmeriCredit Corp. via the merger of Merger Sub with and into AmeriCredit Corp., with AmeriCredit Corp. continuing as the surviving company in the Merger and becoming a wholly-owned subsidiary of GM Holdings. Following the Merger, our name was changed to General Motors Financial Company, Inc.

These financial statements do not reflect the purchase accounting adjustments that will be made as a result of the Merger.

GENERAL

We are an auto finance company specializing in purchasing retail automobile installment sales contracts originated by franchised and select independent dealers in connection with the sale of used and new automobiles. We generate revenue and cash flows primarily through the purchase, retention, subsequent securitization and servicing of finance receivables. As used herein, “loans” include auto finance receivables originated by dealers and purchased by us. To fund the acquisition of receivables prior to securitization, we use available cash and borrowings under our credit facilities. We earn finance charge income on the finance receivables and pay interest expense on borrowings under our credit facilities.

Through wholly-owned subsidiaries, we periodically transfer receivables to securitization trusts (“Trusts”) that issue asset-backed securities to investors. We retain an interest in these securitization transactions in the form of restricted cash accounts and overcollateralization, whereby more receivables are transferred to the Trusts than the amount of asset-backed securities issued by the Trusts, as well as the estimated future excess cash flows expected to be received by us over the life of the securitization. Excess cash flows result from the difference between the finance charges received from the obligors on the receivables and the interest paid to investors in the asset-backed securities, net of credit losses and expenses.

Excess cash flows from the Trusts are initially utilized to fund credit enhancement requirements in order to attain specific credit ratings for the asset-backed securities issued by the Trusts. Once targeted credit enhancement requirements are reached and maintained, excess cash flows are distributed to us or, in a securitization utilizing a senior subordinated structure, may be used to accelerate the repayment of certain subordinated securities. In

addition to excess cash flows, we receive monthly base servicing fees and we collect other fees, such as late charges, as servicer for securitization Trusts. For securitization transactions that involve the purchase of a financial guaranty insurance policy, credit enhancement requirements will increase if specified portfolio performance ratios are exceeded. Excess cash flows otherwise distributable to us from Trusts in which the portfolio performance ratios were exceeded and from other Trusts which may be subject to limited cross-collateralization provisions are accumulated in the Trusts until such higher levels of credit enhancement are reached and maintained. Senior subordinated securitizations typically do not utilize portfolio performance ratios.

We account for our securitization transactions as secured financings. Accordingly, following a securitization, the finance receivables and the related securitization notes payable remain on the consolidated balance sheets. We recognize finance charge and fee income on the receivables and interest expense on the securities issued in the securitization transaction and record a provision for loan losses to cover probable loan losses on the receivables.

RESULTS OF OPERATIONS

Three Months Ended September 30, 2010 as compared to

Three Months Ended September 30, 2009

Changes in Finance Receivables:

A summary of changes in our finance receivables is as follows (in thousands):


	Three Months Ended September 30,
	2010			2009
Balance at beginning of period	$	8,733,518		$	10,927,969
Loans purchased		959,004			229,073
Liquidations and other		(1,016,947	)		(1,136,009	)


Balance at end of period	$	8,675,575		$	10,021,033


Average finance receivables	$	8,718,310		$	10,482,453

The increase in loans purchased during the three months ended September 30, 2010, as compared to the three months ended September 30, 2009, was primarily due to our establishing higher loan origination goals as a result of improved access to the securitization markets, improving portfolio credit trends and stable economic environment. The decrease in liquidations and other resulted primarily from reduced average finance receivables.

The average new loan size increased to $19,065 for the three months ended September 30, 2010, from $16,331 for the three months ended September 30, 2009 resulting from an increase in new car loans financed under the GM subvention program initiated in September 2009. The average annual percentage rate for finance receivables purchased during the three months ended September 30, 2010, decreased to 15.8% from 19.1% during the three months ended September 30, 2009 as a result of lower costs of funds passed through in the form of lower rates as well as lower rates on loans originated under the GM subvention program.

Net Margin:

Net margin is the difference between finance charge and other income earned on our receivables and the cost to fund the receivables as well as the cost of debt incurred for general corporate purposes.

Our net margin as reflected on the consolidated statements of income is as follows (in thousands):


	Three Months Ended September 30,
	2010			2009
Finance charge income	$	342,349		$	389,796
Other income		30,275			23,488
Interest expense		(89,364	)		(130,148	)


Net margin	$	283,260		$	283,136

Net margin as a percentage of average finance receivables is as follows:


	Three Months Ended September 30,
	2010			2009
Finance charge income		15.6	%		14.7	%
Other income		1.4			0.9
Interest expense		(4.1	)		(4.9	)


Net margin as a percentage of average finance receivables		12.9	%		10.7	%

The increase in net margin as a percentage of average finance receivables for the three months ended September 30, 2010, as compared to the three months ended September 30, 2009, was mainly due to higher annual percentage rates for finance receivables purchased in calendar year 2008 and 2009, reduced interest costs as a result of declining leverage and lower interest rates on securitizations completed in fiscal 2010 and the three months ended September 30, 2010.

Revenue:

Finance charge income decreased by 12.2% to $342.3 million for the three months ended September 30, 2010, from $389.8 million for the three months ended September 30, 2009, primarily due to the 16.8% decrease in average finance receivables. The effective yield on our finance receivables increased to 15.6% for the three months ended September 30, 2010, from 14.7% for the three months ended September 30, 2009. The effective yield represents finance charges and fees taken into earnings during the period as a percentage of average finance receivables.

Other income consists of the following (in thousands):


	Three Months Ended September 30,
	2010		2009
Leasing income	$	15,888	$	11,458
Investment income		700		984
Late fees and other income		13,687		11,046

	$	30,275	$	23,488

For the three months ended September 30, 2010 leasing income increased, despite a decline in outstanding leases, as a result of a gain of $8.3 million on the disposition of leased vehicles upon lease termination.

Costs and Expenses:

Operating Expenses

Operating expenses were $68.9 million for the three months ended September 30, 2010 and 2009. Our operating expenses are predominately related to personnel costs that include base salary and wages, performance incentives and benefits as well as related employment taxes. Personnel costs represented 75.5% and 70.1% of total operating expenses for the three months ended September 30, 2010 and 2009, respectively.

Operating expenses as an annualized percentage of average finance receivables were 3.1% for the three months ended September 30, 2010 as compared to 2.6% for the three months ended September 30, 2009. The increase in operating expenses as a percentage of average finance receivables primarily resulted from the impact of a decreasing portfolio on our fixed cost base and higher loan origination staffing to support increased origination levels.

Provision for Loan losses

Provisions for loan losses are charged to income to bring our allowance for loan losses to a level which management considers adequate to absorb probable credit losses inherent in the portfolio of finance receivables. The provision for loan losses recorded for the three months ended September 30, 2010 and 2009 reflects inherent losses on receivables originated during those

quarters and changes in the amount of inherent losses on receivables originated in prior periods. The provision for loan losses decreased to $74.6 million for the three months ended September 30, 2010, from $158.0 million for the three months ended September 30, 2009, as a result of favorable credit performance of loans originated since early calendar 2008, stabilization of economic conditions and improved recovery rates on repossessed collateral. As an annualized percentage of average finance receivables, the provision for loan losses was 3.4% and 6.0% for the three months ended September 30, 2010 and 2009, respectively.

Interest Expense

Interest expense decreased to $89.4 million for the three months ended September 30, 2010, from $130.1 million for the three months ended September 30, 2009. Average debt outstanding was $7.0 billion and $9.2 billion for the three months ended September 30, 2010 and 2009, respectively. Our effective rate of interest on our debt decreased to 5.1% for the three months ended September 30, 2010, compared to 5.6% for the three months ended September 30, 2009, due to lower interest rates on securitizations completed in fiscal 2010 and the three months ended September 30, 2010.

Acquisition Expenses

Acquisition expenses for the three months ended September 30, 2010, primarily represent change of control payments to our executive officers, advisory, legal and professional fees and other costs related to the merger with GM.

Taxes

Our effective income tax rate was 43.4% and 44.3% for the three months ended September 30, 2010 and 2009, respectively. The September 30, 2010 effective tax rate was negatively impacted primarily by the nondeductibility of certain payments to our executive officers related to the Merger with GM. The September 30, 2009 effective tax rate was negatively impacted primarily by state income tax rates and adjustments to state deferred tax assets and liabilities.

Other Comprehensive Income:

Other comprehensive income consisted of the following (in thousands):


	Three Months Ended September 30,
	2010			2009
Unrealized gains on cash flow hedges	$	6,255		$	7,411
Canadian currency translation adjustment		2,055			6,924
Income tax provision		(3,027	)		(5,176	)

	$	5,283		$	9,159

Cash Flow Hedges

Unrealized gains on cash flow hedges consisted of the following (in thousands):


	Three Months Ended September 30,
	2010			2009
Unrealized losses related to changes in fair value	$	(8,218	)	$	(15,833	)
Reclassification of net unrealized losses into earnings		14,473			23,244

	$	6,255		$	7,411

Unrealized losses related to changes in fair value for the three months ended September 30, 2010 and 2009, were due to changes in the fair value of interest rate swap agreements that were designated as cash flow hedges for accounting purposes. The fair value of the interest rate swap agreements fluctuate based upon changes in forward interest rate expectations.

Unrealized gains on cash flow hedges of our floating rate debt are reclassified into earnings when interest rate fluctuations on securitization notes payable or other hedged items affect earnings.

Canadian Currency Translation Adjustment

Canadian currency translation adjustment gains of $2.1 million and $6.9 million for the three months ended September 30, 2010 and 2009, respectively, were included in other comprehensive income. The translation adjustment is due to the change in the value of our Canadian dollar denominated assets related to the change in the U.S. dollar to Canadian dollar conversion rates during the three months ended September 30, 2010 and 2009.

CREDIT QUALITY

We provide financing in relatively high-risk markets, and, therefore, anticipate a corresponding high level of delinquencies and charge-offs.

The following tables present certain data related to the receivables portfolio (dollars in thousands):


	September 30, 2010			June 30, 2010
Principal amount of receivables, net of fees	$	8,675,575		$	8,733,518
Allowance for loan losses		(528,489	)		(573,310	)

Receivables, net	$	8,147,086		$	8,160,208

Number of outstanding contracts		767,180			776,377


Average carrying amount of outstanding contract (in dollars)	$	11,308		$	11,249


Allowance for loan losses as a percentage of receivables		6.1	%		6.6	%

The allowance for loan losses as a percentage of receivables decreased to 6.1% as of September 30, 2010, from 6.6% as of June 30, 2010, as a result of the favorable credit performance of loans originated since early calendar year 2008.

Delinquency

The following is a summary of finance receivables that are (i) more than 30 days delinquent, but not yet in repossession, and (ii) in repossession, but not yet charged off (dollars in thousands):


	September 30, 2010					September 30, 2009
	Amount		Percent			Amount		Percent
Delinquent contracts:
31 to 60 days	$	535,827		6.2	%	$	763,797		7.6	%
Greater-than-60 days		215,583		2.5			382,164		3.8

		751,410		8.7			1,145,961		11.4
In repossession		43,519		0.5			64,876		0.7

	$	794,929		9.2	%	$	1,210,837		12.1	%

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. Delinquencies in our receivables portfolio may vary from period to period based upon the average age or seasoning of the portfolio, seasonality within the calendar year and economic factors. Due to our target customer base, a relatively high percentage of accounts become delinquent at some point in the life of a loan and there is a high rate of account movement between current and delinquent status in the portfolio.

Delinquencies in finance receivables were lower at September 30, 2010, as compared to September 30, 2009, as a result of favorable credit performance of loans originated since early calendar year 2008 and stabilization of economic conditions.

Deferrals

In accordance with our policies and guidelines, we, at times, offer payment deferrals to consumers whereby the consumer is allowed to move up to two delinquent payments to the end of the loan generally by paying a fee (approximately the interest portion of the payment deferred, except where state law provides for a lesser amount). Our policies and guidelines limit the number and frequency of deferments that may be granted. Additionally, we generally limit the granting of deferments on new accounts until a requisite number of payments have been received. Due to the nature of our customer base and policies and guidelines of the deferral program, approximately 50% to 60% of accounts historically comprising the portfolio receive a deferral at some point in the life of the account.

An account for which all delinquent payments are deferred is classified as current at the time the deferment is granted and therefore is not included as a delinquent account. Thereafter, such account is aged based on the timely payment of future installments in the same manner as any other account.

Contracts receiving a payment deferral as an average quarterly percentage of average finance receivables outstanding were 6.1% and 7.9% for the three months ended September 30, 2010 and 2009, respectively. Contracts receiving a payment deferral decreased as a result of favorable credit performance of loans originated since early calendar year 2008 and stabilization of economic conditions.

The following is a summary of deferrals as a percentage of receivables outstanding:


	September 30, 2010			June 30, 2010
Never deferred		70.1	%		67.8	%

Deferred:
1-2 times		20.1			22.4
3-4 times		9.7			9.7
Greater than 4 times		0.1			0.1

Total deferred		29.9			32.2

Total		100.0	%		100.0	%

We evaluate the results of our deferment strategies based upon the amount of cash installments that are collected on accounts after they have been deferred versus the extent to which the collateral underlying the deferred accounts has depreciated over the same period of time. Based on this evaluation, we believe that payment deferrals granted according to our policies and guidelines are an effective portfolio management technique and result in higher ultimate cash collections from the portfolio.

Changes in deferment levels do not have a direct impact on the ultimate amount of finance receivables charged off by us. However, the timing of a charge-off may be affected if the previously deferred account ultimately results in a charge-off. To the extent that deferrals impact the ultimate timing of when an account is charged off, historical charge-off ratios and loss confirmation periods used in the determination of the adequacy of our allowance for loan losses are also impacted. Increased use of deferrals may result in a lengthening of the loss confirmation period, which would increase expectations of credit losses inherent in the loan portfolio and therefore increase the allowance for loan losses and related provision for loan losses. Changes in these ratios and periods are considered in determining the appropriate level of allowance for loan losses and related provision for loan losses.

Charge-offs

The following table presents charge-off data with respect to our finance receivables portfolio (dollars in thousands):


	Three Months Ended September 30,
	2010			2009
Repossession charge-offs	$	211,426		$	367,346
Less: Recoveries		(98,081	)		(156,929	)
Mandatory charge-offs (a)		6,094			12,216

Net charge-offs	$	119,439		$	222,633


Net charge-offs as an annualized percentage of average receivables:		5.4	%		8.4	%


Recoveries as a percentage of gross repossession charge-offs:		46.4	%		42.7	%

(a)

Mandatory charge-offs represent accounts 120 days delinquent that are charged off in full with no recovery amounts realized at time of charge-off net of any subsequent recoveries and the net write-down of finance receivables in repossession to the net realizable value of the repossessed vehicle when the repossessed vehicle is legally available for sale.

Net charge-offs as an annualized percentage of average finance receivables outstanding may vary from period to period based upon the average age or seasoning of the portfolio and economic factors. The decrease in net charge-offs as an annualized percentage of average finance receivables for the three months ended September 30, 2010, as compared to the three months ended September 30, 2009, was a result of the favorable credit performance of loans originated since early calendar year 2008, stabilization of economic conditions and improved recovery rates on repossessed collateral.

LIQUIDITY AND CAPITAL RESOURCES

General

Our primary sources of cash have been finance charge income, servicing fees, distributions from securitization Trusts, borrowings under credit facilities, transfers of finance receivables to Trusts in securitization transactions, collections and recoveries on finance receivables and, to a lesser extent, unsecured debt. Our primary uses of cash have been purchases of finance receivables, repayment of credit facilities and securitization notes payable, funding credit enhancement requirements for securitization transactions and credit facilities, repayment of senior notes and convertible senior notes, operating expenses and income tax payments.

We used cash of $940.8 million and $217.9 million for the purchase of finance receivables during the three months ended September 30, 2010 and 2009, respectively. Generally, these purchases were funded initially utilizing cash and borrowings under credit facilities and subsequently funded in securitization transactions.

Liquidity

Our available liquidity consisted of the following (in thousands):


	September 30, 2010		June 30, 2010
Cash and cash equivalents	$	537,529	$	282,273
Borrowing capacity on unpledged eligible receivables		318,325		489,552

Total	$	855,854	$	771,825

We also have available liquidity under our $300 million unsecured revolving credit facility with GM.

Credit Facilities

In the normal course of business, in addition to using our available cash, we pledge receivables to and borrow under our credit facilities to fund our operations and repay these borrowings as appropriate under our cash management strategy.

As of September 30, 2010, credit facilities consisted of the following (in millions):


Facility Type	Facility Amount		Advances Outstanding
Master/Syndicated warehouse facility (a)	$	1,300.0
GM revolving credit facility (b)		300.0
Medium term note facility (c)			$	543.8
Wachovia funding facilities (d)				73.6

	$	1,600.0	$	617.4

(a)

(b)

On September 30, 2010, we entered into a six month unsecured revolving credit facility with General Motors Holdings LLC.

(c)

(d)

We are required to hold certain funds in restricted cash accounts to provide additional collateral for borrowings under certain of our facilities. Additionally, our funding agreements, other than the GM facility, contain various covenants requiring minimum financial ratios, asset quality and portfolio performance ratios (portfolio net loss and delinquency ratios, and pool level cumulative net loss ratios) as well as limits on deferment levels. Failure to meet any of these covenants could result in an event of default under these agreements. If an event of default occurs under these agreements, the lenders could elect to declare all amounts outstanding under these agreements to be immediately due and payable, enforce their interests against collateral pledged under these agreements or, with respect to the master/syndicated warehouse facility, restrict our ability to obtain additional borrowings. As of September 30, 2010, we were in compliance with all covenants in our credit facilities.

Securitizations

We have completed 72 securitization transactions through September 30, 2010, excluding securitization Trusts entered into by Bay View Acceptance Corporation (“BVAC”) and Long Beach Acceptance Corporation (“LBAC”) prior to their acquisition by us. The proceeds from the transactions were primarily used to repay borrowings outstanding under our credit facilities.

A summary of the active transactions is as follows (in millions):


Transaction	Date		Original Amount		Balance at September 30, 2010
2005-C-F		August 2005	$	1,100.0	$	53.0
2005-D-A		November 2005		1,400.0		93.7
2006-1		March 2006		945.0		68.1
2006-R-M		May 2006		1,200.0		213.9
2006-A-F		July 2006		1,350.0		176.4
2006-B-G		September 2006		1,200.0		194.9
2007-A-X		January 2007		1,200.0		240.6
2007-B-F		April 2007		1,500.0		358.8
2007-1		May 2007		1,000.0		227.3
2007-C-M		July 2007		1,500.0		424.7
2007-D-F		September 2007		1,000.0		308.1
2007-2-M		October 2007		1,000.0		305.5
2008-A-F		May 2008		750.0		305.4
2008-1 (a)		October 2008		500.0		104.4
2008-2		November 2008		500.0		190.6
2009-1		July 2009		725.0		407.0
2009-1 (APART)		October 2009		227.5		146.3
2010-1		February 2010		600.0		454.7
2010-A		March 2010		200.0		166.5
2010-2		May 2010		600.0		521.4
2010-B		August 2010		200.0		194.7
2010-3		September 2010		850.0		849.9
BV2005-LJ-1		February 2005		232.1		8.6
BV2005-LJ-2 (b)		July 2005		185.6		8.8
BV2005-3		December 2005		220.1		18.2
LB2005-A		June 2005		350.0		11.5
LB2005-B		October 2005		350.0		16.4
LB2006-A		May 2006		450.0		38.9
LB2006-B		September 2006		500.0		70.1
LB2007-A		March 2007		486.0		94.8

Total active securitizations			$	22,321.3	$	6,273.2

(a)

Note balance does not include $77.4 million of asset-backed securities pledged to the Wachovia funding facilities, which were consolidated effective July 1, 2010.

(b)

Note balance does not include $1.4 million of asset-backed securities repurchased and retained by us.

We account for our securitization transactions as secured financings. Finance receivables are transferred to a securitization Trust, which is one of our special purpose finance subsidiaries, and the Trusts issue one or more series of asset-backed securities (securitization notes payable). While these Trusts are included in our consolidated financial statements, these Trusts are separate legal entities; thus the finance receivables and other assets held by these Trusts are legally owned by these Trusts, are available to satisfy the related securitization notes payable and are not available to our creditors or our other subsidiaries.

At the time of securitization of finance receivables, we are required to pledge assets equal to a specified percentage of the securitization pool to provide credit enhancement required for specific credit ratings for the asset-backed securities issued by the Trusts.

Since the beginning of fiscal 2009, we have primarily utilized senior subordinated securitization structures which involve the sale of subordinated asset-backed securities to provide credit enhancement for the senior, or highest rated, asset-backed securities. On September 23, 2010, we closed an $850 million senior subordinated securitization transaction, AMCAR 2010-3, that has initial cash deposit and overcollateralization requirements of 10.5% in order to provide credit enhancement for the asset-backed securities sold. The level of credit enhancement in future senior subordinated securitizations will depend, in part, on the net interest margin, collateral characteristics, and credit performance trends of the receivables transferred, as well as our financial condition, the economic environment and our ability to sell subordinated bonds at rates we consider acceptable.

Certain cash flows related to securitization transactions were as follows (in millions):


	Three Months Ended September 30,
	2010		2009

Initial credit enhancement deposits:
Restricted cash	$	23.3	$	19.6
Overcollateralization		114.3		256.1
Distributions from Trusts		110.9		74.6

The agreements with the insurers of our securitization transactions covered by a financial guaranty insurance policy provide that if portfolio performance ratios (delinquency, cumulative default or cumulative net loss) in a Trust’s pool of receivables exceed certain targets, the specified credit enhancement levels would be increased.

We have exceeded certain portfolio performance ratios in several AMCAR and LBAC securitizations. Excess cash flows from Trusts associated with these securitizations have been or are being used to build higher credit enhancement in each respective Trust instead of being distributed to us. We do not expect the trapping of excess cash flows from these Trusts to have a material adverse impact to our liquidity.

The agreements that we have entered into with our financial guaranty insurance providers in connection with securitization transactions insured by them contain additional specified targeted portfolio performance ratios (delinquency, cumulative default and cumulative net loss) that are higher than the limits referred to above. If, at any measurement date, the targeted portfolio performance ratios with respect to any insured Trust were to exceed these additional levels, provisions of the agreements permit the financial guaranty insurance providers to declare the occurrence of an event of default and take steps to terminate our servicing rights to the receivables sold to that Trust. In addition, the servicing agreements on certain insured securitization Trusts are cross-defaulted so that a default declared under one servicing agreement would allow the financial guaranty insurance provider to terminate our servicing rights under all servicing agreements for securitization Trusts in which they issued a financial guaranty insurance policy. Additionally, if these higher targeted portfolio performance levels were exceeded and the financial guaranty insurance providers elect to declare an event of default, the insurance providers may retain all excess cash generated by other securitization transactions insured by them as additional credit enhancement. This, in turn, could result in defaults under our other securitizations and other material indebtedness, including under our senior note and convertible senior note indentures. Although we have never exceeded these additional targeted portfolio performance ratios, and we currently believe it is unlikely that an event of default would be declared and our servicing rights terminated if we were to exceed these higher targeted ratios, there can be no assurance that an event of default will not be declared and our servicing rights will not be terminated if (i) such targeted portfolio performance ratios are breached, (ii) we breach our obligations under the servicing agreements, (iii) the financial guaranty insurance providers are required to make payments under a policy, or (iv) certain bankruptcy or insolvency events were to occur. As of September 30, 2010, no such servicing right termination events have occurred with respect to any of the Trusts formed by us.

INTEREST RATE RISK

Fluctuations in market interest rates impact our credit facilities and securitization transactions. Our gross interest rate spread, which is the difference between interest earned on our finance receivables and interest paid, is affected by changes in interest rates as a result of our dependence upon the issuance of variable rate securities and the incurrence of variable rate debt to fund our purchases of finance receivables.

As a result of the Merger, the holders of the senior notes and the convertible senior notes have the right to require us to repurchase some or all of their notes as provided in the indentures for such notes. The repurchase dates for any notes tendered to us pursuant to procedures previously delivered to holders of senior notes and convertible senior notes are December 3, 2010 with respect to the senior notes, and December 10, 2010, with respect to the convertible senior notes. The purchase price with respect to the senior notes is 101% of the principal amount of the notes repurchased and the purchase price with respect to the convertible senior notes is the principal amount of the notes repurchased plus accrued interest. Also, pursuant to the terms of the convertible senior notes indentures a “make-whole” payment of $0.69 per $1,000 of principal amount of the convertible senior notes due in 2011 and $0.81 per $1,000 of principal amount of the convertible senior notes due in 2013 will be made to those who elect to convert as a result of the Merger.

Credit Facilities

Finance receivables purchased by us and pledged to secure borrowings under our credit facilities bear fixed interest rates. Amounts borrowed under most of our credit facilities bear interest at variable rates that are subject to frequent adjustments to reflect prevailing market interest rates. To protect the interest rate spread within each credit facility, our special purpose finance subsidiaries are contractually required to purchase interest rate cap agreements in connection with borrowings under our credit facilities. The purchaser of the interest rate cap agreement pays a premium in return for the right to receive the difference in the interest cost at any time a specified index of market interest rates rises above the stipulated “cap” rate. The purchaser of the interest rate cap agreement bears no obligation or liability if interest rates fall below the “cap” rate. As part of our interest rate risk management strategy and when economically feasible, we may simultaneously sell a corresponding interest rate cap agreement in order to offset the premium paid by our special purpose finance subsidiary to purchase the interest rate cap agreement and thus retain the interest rate risk. The fair value of the interest rate cap agreement purchased by the special purpose finance subsidiary is included in other assets and the fair value of the interest rate cap agreement sold by us is included in other liabilities on our consolidated balance sheets.

Securitizations

The interest rate demanded by investors in our securitization transactions depends on prevailing market interest rates for comparable transactions and the general interest rate environment. We utilize several strategies to minimize the impact of interest rate fluctuations on our gross interest rate margin, including the use of derivative financial instruments and the regular sale or pledging of auto receivables to securitization Trusts.

In our securitization transactions, we transfer fixed rate finance receivables to Trusts that, in turn, sell either fixed rate or floating rate securities to investors. The fixed rates on securities issued by the Trusts are indexed to market interest rate swap spreads for transactions of similar duration or various LIBOR and do not fluctuate during the term of the securitization. The floating rates on securities issued by the Trusts are indexed to LIBOR and fluctuate periodically based on movements in LIBOR. Derivative financial instruments, such as interest rate swap and cap agreements, are used to manage

the gross interest rate spread on these transactions. We use interest rate swap agreements to convert the variable rate exposures on securities issued by our securitization Trusts to a fixed rate, thereby locking in the gross interest rate spread to be earned by us over the life of a securitization. Interest rate swap agreements purchased by us do not impact the amount of cash flows to be received by holders of the asset-backed securities issued by the Trusts. The interest rate swap agreements serve to offset the impact of increased or decreased interest paid by the Trusts on floating rate asset-backed securities on the cash flows to be received by us from the Trusts. We utilize such arrangements to modify our net interest sensitivity to levels deemed appropriate based on our risk tolerance. In circumstances where the interest rate risk is deemed to be tolerable, usually if the risk is less than one year in term at inception, we may choose not to hedge potential fluctuations in cash flows due to changes in interest rates. Our special purpose finance subsidiaries are contractually required to purchase a derivative financial instrument to protect the net spread in connection with the issuance of floating rate securities even if we choose not to hedge our future cash flows. Although the interest rate cap agreements are purchased by the Trusts, cash outflows from the Trusts ultimately impact our retained interests in the securitization transactions as cash expended by the securitization Trusts will decrease the ultimate amount of cash to be received by us. Therefore, when economically feasible, we may simultaneously sell a corresponding interest rate cap agreement to offset the premium paid by the Trust to purchase the interest rate cap agreement. The fair value of the interest rate cap agreements purchased by the special purpose finance subsidiaries in connection with securitization transactions are included in other assets and the fair value of the interest rate cap agreements sold by us are included in other liabilities on our consolidated balance sheets. Changes in the fair value of the interest rate cap agreements are reflected in interest expense on our consolidated statements of operations and comprehensive operations.

We have entered into interest rate swap agreements to hedge the variability in interest payments on eight of our active securitization transactions. Portions of these interest rate swap agreements are designated and qualify as cash flow hedges. The fair value of interest rate swap agreements designated as hedges is included in liabilities on the consolidated balance sheets. Interest rate swap agreements that are not designated as hedges are included in other assets on the consolidated balance sheets.

FORWARD LOOKING STATEMENTS

The preceding Management’s Discussion and Analysis of Financial Condition and Results of Operations section contains several “forward-looking statements.” Forward-looking statements are those that use words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “may,” “likely,” “should,” “estimate,” “continue,” “future” or other comparable expressions. These words indicate future events and trends. Forward-looking statements are our current views with respect to future events and financial performance. These forward-looking statements are subject to many assumptions, risks and uncertainties that could cause actual results to differ significantly from historical results or from those anticipated by us. The most significant risks are detailed from time to time in our filings and reports with the Securities and Exchange Commission (the “Commission”) including our Annual Report on Form 10-K for the year ended June 30, 2010. It is advisable not to place undue reliance on our forward-looking statements. We undertake no obligation to, and do not, publicly update or revise any forward-looking statements, except as required by federal securities laws, whether as a result of new information, future events or otherwise.

Item 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Because our funding strategy is dependent upon the issuance of interest-bearing securities and the incurrence of debt, fluctuations in interest rates impact our profitability. Therefore, we employ various hedging strategies to minimize the risk of interest rate fluctuations. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Interest Rate Risk” for additional information regarding such market risks.

Item 4.

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports we file under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms. Such controls include those designed to ensure that information for disclosure is communicated to management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate to allow timely decisions regarding required disclosure.

The CEO and CFO, with the participation of management, have evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2010. Based on their evaluation, they have concluded that the disclosure controls and procedures are effective.

Internal Control Over Financial Reporting

There were no changes made in our internal control over financial reporting during the three months ended September 30, 2010, that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

Limitations Inherent in all Controls

Our management, including the CEO and CFO, recognize that the disclosure controls and internal controls (discussed above) cannot prevent all errors or all attempts at fraud. Any controls system, no matter how well crafted and operated, can only provide reasonable, and not absolute, assurance of achieving the desired control objectives, and management was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Because of the inherent limitations in any control system, no evaluation or implementation of a control system can provide complete assurance that all control issues and all possible instances of fraud have been or will be detected.

Part II. OTHER INFORMATION

Item 1.

LEGAL PROCEEDINGS

On July 21, 2010, we entered into the Merger Agreement. The following litigation has been commenced with respect to the proposed Merger:

Item 1A.

RISK FACTORS

In addition to the other information set forth in this report, the factors discussed in Part I, Item 1, “Risk Factors” in our Annual Report on Form 10-K for the year ended June 30, 2010, should be carefully considered as these risk factors could materially affect our business, financial condition or future results. The risks described in our Annual Report on Form 10-K are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may adversely affect our business, financial condition and/or operating results.

Item 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On September 25, 2008, we issued a warrant to Wachovia Investment Holdings, LLC, an affiliate of Wachovia Bank, National Association, pursuant to which the holder or holder of the warrant could purchase 1,000,000 shares of our common stock, on or prior to September 24, 2015 at an exercise price of $13.55 per share. On August 10, 2010, Wachovia exercised the warrant at a price of $24.12 per share in a cashless exercise and received a net settlement of 438,112 shares of our common stock. No underwriters were involved in the foregoing offers and sales of securities. These offers and sales were made in reliance upon an exemption from the registration provisions of the Securities Act of 1933, as amended (the “Securities Act”), set forth in Section 4(2) under the Securities Act. The offers and sales were made only to acquirors with whom we had previous relationships and we did not partake in any general solicitation or advertisement. We previously registered the shares of our common stock issuable upon exercise of this warrant on a registration statement on Form S-3 under the Securities Act to permit the resale of these shares by the selling stockholders from time to time after the date of the prospectus included in the registration statement.

Item 3.

DEFAULTS UPON SENIOR SECURITIES

Not Applicable

Item 4.

REMOVED AND RESERVED

Item 5.

OTHER INFORMATION

Not Applicable

Item 6.

EXHIBITS


31.1*		Officers’ Certifications of Periodic Report pursuant to Section 302 of Sarbanes-Oxley Act of 2002

32.1*		Officers’ Certifications of Periodic Report pursuant to Section 906 of Sarbanes-Oxley Act of 2002

101.INS**		XBRL Instance Document

101.SCH**		XBRL Taxonomy Extension Schema Document

101.CAL**		XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB**		XBRL Taxonomy Extension Label Linkbase Document

101.PRE**		XBRL Taxonomy Presentation Linkbase Document

*	Filed herewith.

**	Furnished with the Company’s Quarterly Report in Form 10-Q for the first fiscal quarter ended September 30, 2010.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		General Motors Financial Company, Inc.
		(Registrant)

Date: November 9, 2010	By:	/S/ CHRIS A. CHOATE
		(Signature)
		Chris A. Choate
		Executive Vice President,
		Chief Financial Officer and Treasurer

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller Reporting Company