Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Basis of Presentation This Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) should be read in conjunction with the accompanying condensed consolidated financial statements and the notes thereto, and the audited consolidated financial statements and notes thereto included in our 2021 Form 10-K.

Forward-looking statements in this MD&A are not guarantees of future performance and may involve risks and uncertainties that could cause actual results to differ materially from those projected. Refer to the "Forward-Looking Statements" section of this MD&A and Part 1, Item 1A. Risk Factors of our 2021 Form 10-K for a discussion of these risks and uncertainties. Except for per share amounts or as otherwise specified, dollar amounts presented within tables are stated in millions. Certain columns and rows may not add due to rounding.

Non-GAAP Measures Our non-GAAP measures include: EBIT-adjusted, presented net of noncontrolling interests; EBT-adjusted for our GM Financial segment; EPS-diluted-adjusted; effective tax rate-adjusted (ETR-adjusted); return on invested capital-adjusted (ROIC-adjusted) and adjusted automotive free cash flow. Our calculation of these non-GAAP measures may not be comparable to similarly titled measures of other companies due to potential differences between companies in the method of calculation. As a result, the use of these non-GAAP measures has limitations and should not be considered superior to, in isolation from, or as a substitute for, related U.S. GAAP measures.

These non-GAAP measures allow management and investors to view operating trends, perform analytical comparisons and benchmark performance between periods and among geographic regions to understand operating performance without regard to items we do not consider a component of our core operating performance. Furthermore, these non-GAAP measures allow investors the opportunity to measure and monitor our performance against our externally communicated targets and evaluate the investment decisions being made by management to improve ROIC-adjusted. Management uses these measures in its financial, investment and operational decision-making processes, for internal reporting and as part of its forecasting and budgeting processes. Further, our Board of Directors uses certain of these and other measures as key metrics to determine management performance under our performance-based compensation plans. For these reasons, we believe these non-GAAP measures are useful for our investors.

EBIT-adjusted EBIT-adjusted is presented net of noncontrolling interests and is used by management and can be used by investors to review our consolidated operating results because it excludes automotive interest income, automotive interest expense and income taxes as well as certain additional adjustments that are not considered part of our core operations. Examples of adjustments to EBIT include, but are not limited to, impairment charges on long-lived assets and other exit costs resulting from strategic shifts in our operations or discrete market and business conditions; costs arising from legal matters; and certain currency devaluations associated with hyperinflationary economies. For EBIT-adjusted and our other non-GAAP measures, once we have made an adjustment in the current period for an item, we will also adjust the related non-GAAP measure in any future periods in which there is an impact from the item. Our corresponding measure for our GM Financial segment is EBT-adjusted because interest income and interest expense are part of operating results when assessing and measuring the operational and financial performance of the segment.

EPS-diluted-adjusted EPS-diluted-adjusted is used by management and can be used by investors to review our consolidated diluted EPS results on a consistent basis. EPS-diluted-adjusted is calculated as net income attributable to common stockholders-diluted less adjustments noted above for EBIT-adjusted and certain income tax adjustments divided by weighted-average common shares outstanding-diluted. Examples of income tax adjustments include the establishment or reversal of significant deferred tax asset valuation allowances.

ETR-adjusted ETR-adjusted is used by management and can be used by investors to review the consolidated effective tax rate for our core operations on a consistent basis. ETR-adjusted is calculated as Income tax expense less the income tax related to the adjustments noted above for EBIT-adjusted and the income tax adjustments noted above for EPS-diluted-adjusted divided by Income before income taxes less adjustments. When we provide an expected adjusted effective tax rate, we do not provide an expected effective tax rate because the U.S. GAAP measure may include significant adjustments that are difficult to predict.

ROIC-adjusted ROIC-adjusted is used by management and can be used by investors to review our investment and capital allocation decisions. We define ROIC-adjusted as EBIT-adjusted for the trailing four quarters divided by ROIC-adjusted average net assets, which is considered to be the average equity balances adjusted for average automotive debt and interest liabilities, exclusive of finance leases; average automotive net pension and OPEB liabilities; and average automotive net income tax assets during the same period.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

Adjusted automotive free cash flow Adjusted automotive free cash flow is used by management and can be used by investors to review the liquidity of our automotive operations and to measure and monitor our performance against our capital allocation program and evaluate our automotive liquidity against the substantial cash requirements of our automotive operations. We measure adjusted automotive free cash flow as automotive operating cash flow from operations less capital expenditures adjusted for management actions. Management actions can include voluntary events such as discretionary contributions to employee benefit plans or nonrecurring specific events such as a closure of a facility that are considered special for EBIT-adjusted purposes. Refer to the "Liquidity and Capital Resources" section of this MD&A for additional information.

The following table reconciles Net income (loss) attributable to stockholders under U.S. GAAP to EBIT (loss)-adjusted:

Three Months Ended
June 30,March 31,December 31,September 30,
20222021202220212021202020212020
Net income (loss) attributable to stockholders$1,692$2,836$2,939$3,022$1,741$2,846$2,420$4,045
Income tax expense (benefit)490971(28)1,177471642152887
Automotive interest expense234243226250227275230327
Automotive interest income(73)(32)(50)(32)(44)(46)(38)(51)
Adjustments
Cruise compensation modifications(a)——1,057—————
Patent royalty matters(b)——(100)—250———
GM Brazil indirect tax matters(c)————194———
Cadillac dealer strategy(d)—17———99158—
GMI restructuring(e)—————26—76
GM Korea wage litigation(f)—82——————
Ignition switch recall and related legal matters(g)—————(130)——
Total adjustments—99957—444(5)15876
EBIT (loss)-adjusted$2,343$4,117$4,044$4,417$2,839$3,712$2,922$5,284

(a)This adjustment was excluded because it relates to the one-time modification of Cruise stock incentive awards.

(b)These adjustments were excluded because they relate to certain royalties accrued with respect to past-year vehicle sales in the three months ended December 31, 2021, and the resolution of substantially all of these matters in the three months ended March 31, 2022.

(c)This adjustment was excluded because it relates to a settlement with third parties in the three months ended December 31, 2021 relating to retrospective recoveries of indirect taxes in Brazil realized in prior periods.

(d)These adjustments were excluded because they relate to strategic activities to transition certain Cadillac dealers from the network as part of Cadillac's electric vehicle (EV) strategy.

(e)These adjustments were excluded because of a strategic decision to rationalize our core operations by exiting or significantly reducing our presence in various international markets to focus resources on opportunities expected to deliver higher returns. These adjustments primarily consist of employee separation charges in the three months ended December 31, 2020 and supplier claims in the three months ended September 30, 2020.

(f)This adjustment was excluded because of the unique events associated with Supreme Court of Korea decisions related to our salaried workers.

(g)This adjustment was excluded because of the unique events associated with the ignition switch recall.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

The following table reconciles diluted earnings (loss) per common share under U.S. GAAP to EPS-diluted-adjusted:

Three Months EndedSix Months Ended
June 30, 2022June 30, 2021June 30, 2022June 30, 2021
AmountPer ShareAmountPer ShareAmountPer ShareAmountPer Share
Diluted earnings per common share$1,666$1.14$2,790$1.90$3,653$2.49$5,767$3.93
Adjustments(a)——990.079570.65990.06
Tax effect on adjustments(b)——(4)—(296)(0.20)(4)—
Tax adjustments(c)————(482)(0.33)3160.22
Deemed dividend adjustment(d)————9090.62——
EPS-diluted-adjusted$1,666$1.14$2,885$1.97$4,741$3.23$6,178$4.21

(a)Refer to the reconciliation of Net income (loss) attributable to stockholders under U.S. GAAP to EBIT (loss)-adjusted within this section of MD&A for the details of each individual adjustment.

(b)The tax effect of each adjustment is determined based on the tax laws and valuation allowance status of the jurisdiction to which the adjustment relates.

(c)These adjustments consist of tax benefit related to the release of a valuation allowance against deferred tax assets that are considered realizable as a result of Cruise tax reconsolidation in the six months ended June 30, 2022, and tax expense related to the establishment of a valuation allowance against deferred tax assets that were considered no longer realizable for Cruise in the six months ended June 30, 2021. These adjustments were excluded because significant impacts of valuation allowances are not considered part of our core operations.

(d)This adjustment consists of a deemed dividend related to the redemption of Cruise preferred shares from SoftBank in the six months ended June 30, 2022.

The following table reconciles our effective tax rate under U.S. GAAP to ETR-adjusted:

Three Months EndedSix Months Ended
June 30, 2022June 30, 2021June 30, 2022June 30, 2021
Income before income taxesIncome tax expense (benefit)Effective tax rateIncome before income taxesIncome tax expense (benefit)Effective tax rateIncome before income taxesIncome tax expense (benefit)Effective tax rateIncome before income taxesIncome tax expense (benefit)Effective tax rate
Effective tax rate$2,132$49023.0%$3,750$97125.9%$4,912$4629.4%$7,941$2,14827.0%
Adjustments(a)——12441,0532961244
Tax adjustments(b)——482(316)
ETR-adjusted$2,132$49023.0%$3,874$97525.2%$5,965$1,24020.8%$8,065$1,83622.8%

(a)Refer to the reconciliation of Net income (loss) attributable to stockholders under U.S. GAAP to EBIT (loss)-adjusted within this section of MD&A for adjustment details. These adjustments include Net income attributable to noncontrolling interests where applicable. The tax effect of each adjustment is determined based on the tax laws and valuation allowance status of the jurisdiction to which the adjustment relates.

(b)Refer to the reconciliation of diluted earnings per common share under U.S. GAAP to EPS-diluted-adjusted within this section of MD&A for adjustment details.

We define return on equity (ROE) as Net income (loss) attributable to stockholders for the trailing four quarters divided by average equity for the same period. Management uses average equity to provide comparable amounts in the calculation of ROE. The following table summarizes the calculation of ROE (dollars in billions):

Four Quarters Ended
June 30, 2022June 30, 2021
Net income (loss) attributable to stockholders$8.8$12.7
Average equity(a)$62.4$49.2
ROE14.1%25.9%

(a)Includes equity of noncontrolling interests where the corresponding earnings (loss) are included in Net income (loss) attributable to stockholders.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

The following table summarizes the calculation of ROIC-adjusted (dollars in billions):

Four Quarters Ended
June 30, 2022June 30, 2021
EBIT (loss)-adjusted(a)$12.1$17.5
Average equity(b)$62.4$49.2
Add: Average automotive debt and interest liabilities (excluding finance leases)16.820.3
Add: Average automotive net pension & OPEB liability12.117.8
Less: Average automotive and other net income tax asset(21.6)(23.2)
ROIC-adjusted average net assets$69.7$64.1
ROIC-adjusted17.4%27.3%

(a)Refer to the reconciliation of Net income (loss) attributable to stockholders under U.S. GAAP to EBIT (loss)-adjusted within this section of MD&A.

(b)Includes equity of noncontrolling interests where the corresponding earnings (loss) are included in EBIT (loss)-adjusted.

Overview Our vision for the future is a world with zero crashes, zero-emissions and zero congestion, which guides our growth-focused strategy to invest in EVs and AVs, software-enabled services and subscriptions and new business opportunities, while strengthening our market position in profitable internal combustion engine vehicles, such as trucks and SUVs. We have committed to an all-electric future with a core focus on zero-emission battery EVs as part of our long-term strategy. We plan to execute our strategy with a diverse team and a steadfast commitment to good citizenship through sustainable operations and a leading health and safety culture.

The automotive industry and GM continue to experience supply chain disruptions, including semiconductor supply shortages, which impact multiple suppliers and our planned production schedules. We will continue prioritizing the production of our most popular and in-demand vehicles, including our full-size trucks, full-size SUVs and EVs. We do not expect these disruptions to impact our long-term growth and EV initiatives. In June 2021, we announced plans to increase our investment in EVs and AVs from $27.0 billion to more than $35.0 billion, through 2025, to accelerate battery and EV assembly capacity.

We continue to monitor the impact of the COVID-19 pandemic, and government actions and measures taken to prevent its spread, and the potential to affect our operations. Refer to Part I, Item 1A. Risk Factors of our 2021 Form 10-K for further discussion of these risks.

We also face continuing market, operating and regulatory challenges in several countries across the globe due to, among other factors, rising interest rates and higher material and service prices driven by inflationary pressures, competitive pressures, our product portfolio offerings, heightened emissions standards, potentially weak economic conditions, labor disruptions, foreign exchange volatility, evolving trade policy and political uncertainty. Refer to Part I, Item 1A. Risk Factors of our 2021 Form 10-K for a discussion of these challenges.

As we continue to assess our performance and the needs of our evolving business, additional restructuring and rationalization actions could be required. These actions could give rise to future asset impairments or other charges, which may have a material impact on our operating results.

For the year ending December 31, 2022, we continue to expect Net income attributable to stockholders of between $9.6 billion and $11.2 billion, EBIT-adjusted of between $13.0 billion and $15.0 billion, EPS-diluted of between $5.76 and $6.76 and EPS-diluted-adjusted of between $6.50 and $7.50. We do not consider the potential impact of future adjustments on our expected financial results.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

The following table reconciles expected Net income attributable to stockholders under U.S. GAAP to expected EBIT-adjusted (dollars in billions):

Year Ending December 31, 2022
Net income attributable to stockholders$ 9.6-11.2
Income tax expense1.6-2.0
Automotive interest expense, net0.8
Adjustments(a)1.0
EBIT-adjusted(b)$ 13.0-15.0

(a)Refer to the reconciliation of Net income (loss) attributable to stockholders under U.S. GAAP to EBIT (loss)-adjusted within the MD&A for the details of each individual adjustment.

(b)We do not consider the potential future impact of adjustments on our expected financial results.

The following table reconciles expected EPS-diluted under U.S. GAAP to expected EPS-diluted-adjusted:

Year Ending December 31, 2022
Diluted earnings per common share$ 5.76-6.76
Adjustments(a)0.74
EPS-diluted-adjusted(b)$ 6.50-7.50

(a)Refer to the reconciliation of diluted earnings (loss) per common share under U.S. GAAP to EPS-diluted-adjusted within the MD&A for the details of each individual adjustment.

(b)We do not consider the potential future impact of adjustments on our expected financial results.

GMNA Industry sales in North America were 8.5 million units in the six months ended June 30, 2022, representing a decrease of 16.0% compared to the corresponding period in 2021. U.S. industry sales were 7.0 million units in the six months ended June 30, 2022, representing a decrease of 18.0% compared to the corresponding period in 2021.

Our total vehicle sales in the U.S., our largest market in North America, were 1.1 million units for market share of 15.7% in the six months ended June 30, 2022, representing an increase of 0.1 percentage points compared to the corresponding period in 2021.

We expect to sustain relatively strong EBIT-adjusted margins in 2022 on the continued strength of favorable vehicle pricing and strong U.S. industry light vehicle demand, partially offset by higher costs associated with commodities, raw materials and logistics. Our outlook is dependent on the pricing environment, continuing improvement of supply chain disruptions and overall economic conditions. As a result of supply chain disruptions, including with respect to semiconductors, we experienced interruptions to our planned production schedules and continue to prioritize production of our most popular and in-demand products, including our full-size trucks, full-size SUVs and EVs. Additionally, we have been manufacturing vehicles without the impacted components and had more than 90,000 of these vehicles in our inventory as of June 30, 2022. We expect that substantially all of these vehicles will be completed and sold to dealers before the end of 2022.

GMI Industry sales in China were 10.8 million units in the six months ended June 30, 2022, representing a decrease of 19.5% compared to the corresponding period in 2021. Our total vehicle sales in China were 1.1 million units for market share of 10.2% in the six months ended June 30, 2022, representing a decrease of 1.3 percentage points compared to the corresponding period in 2021. The ongoing global semiconductor supply shortage, macro-economic impact and local restrictions due to COVID-19 and geopolitical tensions continue to place pressure on China's automotive industry and our vehicle sales in China. Our Automotive China JVs generated equity income of $0.1 billion in the six months ended June 30, 2022. Although price competition, higher costs associated with commodities and raw materials and a more challenging regulatory environment related to emissions, fuel consumption and new energy vehicles will place pressure on our operations in China, we will continue to build upon our strong brands, network, and partnerships in China as well as drive improvements in vehicle mix and cost.

Outside of China, industry sales were 11.3 million units in the six months ended June 30, 2022, representing a decrease of 5.1% compared to the corresponding period in 2021. Our total vehicle sales outside of China were 0.5 million units for a market share of 4.1% in the six months ended June 30, 2022, representing an increase of 0.5 percentage points compared to the corresponding period in 2021.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

We historically operated a small import business in Russia and sold GM-badged vehicles into Russia through GM’s alliance partner in Uzbekistan. GM’s direct and indirect profitability in Russia was insignificant. With Russia’s invasion of Ukraine, western sanctions on Russia have and may continue to progressively increase. In addition, reputational, legal and other concerns have impacted and may continue to impact our ability to operate in Russia. As of the end of February, we suspended our exports into Russia and instructed our Russian sales company to cease selling vehicles within Russia. In April, we took additional actions to extend the suspension of our Russian business, including the cessation of commercial operations. Although we have limited supply chain exposure to Russia and Ukraine, we are working closely with our supply base to mitigate any potential risks. Because of the deteriorating business environment in Russia and ongoing sanctions, our ability to operate in Russia in the future is uncertain. In the event we were to lose control of our Russian sales company or are otherwise unable to operate again in Russia, we would expect to record a non-cash charge of approximately $0.7 billion to write off our investment and release accumulated translation losses. These charges would be considered special for EBIT-adjusted and EPS-diluted-adjusted purposes. In addition, we are monitoring the situation and its macroeconomic impacts on our financial position and results of operations.

Cruise Gated by safety and regulation, Cruise continues to make significant progress towards commercialization of a network of on-demand AVs in the United States and globally. In 2021, Cruise received a driverless test permit from the California Public Utilities Commission (CPUC) to provide unpaid rides to the public in driverless vehicles and received approval of its Autonomous Vehicle Deployment Permit from the California Department of Motor Vehicles to commercially deploy driverless AVs. In June 2022, Cruise received the first ever Driverless Deployment Permit granted by the CPUC, which allows them to charge a fare for the driverless rides they are providing to members of the public in certain parts of San Francisco. Refer to the "Liquidity and Capital Resources" section of this MD&A for information about GM's additional investment in Cruise.

Vehicle Sales The principal factors that determine consumer vehicle preferences in the markets in which we operate include overall vehicle design, price, quality, available options, safety, reliability, fuel economy and functionality. Market leadership in individual countries in which we compete varies widely.

We present both wholesale and total vehicle sales data to assist in the analysis of our revenue and our market share. Wholesale vehicle sales data consists of sales to GM's dealers and distributors as well as sales to the U.S. Government and excludes vehicles sold by our joint ventures. Wholesale vehicle sales data correlates to our revenue recognized from the sale of vehicles, which is the largest component of Automotive net sales and revenue. In the six months ended June 30, 2022, 30.2% of our wholesale vehicle sales volume was generated outside the U.S. The following table summarizes wholesale vehicle sales by automotive segment (vehicles in thousands):

Three Months EndedSix Months Ended
June 30, 2022June 30, 2021June 30, 2022June 30, 2021
GMNA66281.0%64284.4%1,35682.3%1,30682.6%
GMI15519.0%11815.6%29217.7%27517.4%
Total817100.0%760100.0%1,648100.0%1,581100.0%

Total vehicle sales data represents: (1) retail sales (i.e., sales to consumers who purchase new vehicles from dealers or distributors); (2) fleet sales (i.e., sales to large and small businesses, governments, and daily rental car companies); and (3) vehicles used by dealers in their business. Total vehicle sales data for periods presented prior to 2022 reflect courtesy transportation vehicles used by U.S. dealers in their business; beginning in 2022, we stopped including such dealership courtesy transportation vehicles in total vehicle sales until such time as those vehicles were sold to the end customer. Total vehicle sales data includes all sales by joint ventures on a total vehicle basis, not based on our percentage ownership interest in the joint venture. Certain joint venture agreements in China allow for the contractual right to report vehicle sales of non-GM trademarked vehicles by those joint ventures, which are included in the total vehicle sales we report for China. While total vehicle sales data does not correlate directly to the revenue we recognize during a particular period, we believe it is indicative of the underlying demand for our vehicles. Total vehicle sales data represents management's good faith estimate based on sales reported by GM's dealers, distributors, and joint ventures, commercially available data sources such as registration and insurance data, and internal estimates and forecasts when other data is not available.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

The following table summarizes industry and GM total vehicle sales and our related competitive position by geographic region (vehicles in thousands):

Three Months EndedSix Months Ended
June 30, 2022June 30, 2021June 30, 2022June 30, 2021
IndustryGMMarket ShareIndustryGMMarket ShareIndustryGMMarket ShareIndustryGMMarket Share
North America
United States3,59458216.2%4,50868815.3%6,9871,09515.7%8,5191,33015.6%
Other80710513.0%84810612.4%1,50019312.8%1,58421013.2%
Total North America4,40168715.6%5,35679414.8%8,4881,28815.2%10,1031,54015.2%
Asia/Pacific, Middle East and Africa
China(a)5,0164849.7%6,66975111.3%10,7611,09710.2%13,3651,53111.5%
Other4,5081433.2%4,7591252.6%9,5832662.8%10,1142252.2%
Total Asia/Pacific, Middle East and Africa9,5246276.6%11,4288767.7%20,3441,3636.7%23,4791,7567.5%
South America
Brazil5126612.8%546509.1%91711612.6%1,07412511.6%
Other3954210.5%3503810.8%7838210.4%7078111.4%
Total South America90710711.8%896889.8%1,70019711.6%1,78120511.5%
Total in GM markets14,8321,4219.6%17,6811,7579.9%30,5322,8489.3%35,3633,5029.9%
Total Europe3,772——%4,283——%7,2201—%8,2221—%
Total Worldwide(b)(c)18,6041,4227.6%21,9631,7588.0%37,7522,8497.5%43,5853,5028.0%
United States
Cars739567.6%1,023292.9%1,4071037.3%1,877904.8%
Trucks97831332.0%1,09835632.4%1,88360031.9%2,13366331.1%
Crossovers1,87621311.4%2,38730312.7%3,69739210.6%4,50957812.8%
Total United States3,59458216.2%4,50868815.3%6,9871,09515.7%8,5191,33015.6%
China(a)
SGMS205353468700
SGMW279398629831
Total China5,0164849.7%6,66975111.3%10,7611,09710.2%13,3651,53111.5%

(a)Includes sales by the Automotive China JVs: SAIC General Motors Sales Co., Ltd. (SGMS) and SAIC GM Wuling Automobile Co., Ltd. (SGMW).

(b)Cuba, Iran, North Korea, Sudan and Syria are subject to broad economic sanctions. Accordingly, these countries are excluded from industry sales data and corresponding calculation of market share.

(c)As of March 2022, GM is no longer importing vehicles or parts to Russia, Belarus and other sanctioned provinces in Ukraine.

As discussed above, total vehicle sales and market share data provided in the table above includes fleet vehicles. Certain fleet transactions, particularly sales to daily rental car companies, are generally less profitable than retail sales to end customers. The following table summarizes estimated fleet sales and those sales as a percentage of total vehicle sales (vehicles in thousands):

Three Months EndedSix Months Ended
June 30, 2022June 30, 2021June 30, 2022June 30, 2021
GMNA148118290251
GMI8673153133
Total fleet sales234191443384
Fleet sales as a percentage of total vehicle sales16.5%10.9%15.6%11.0%

GENERAL MOTORS COMPANY AND SUBSIDIARIES

GM Financial We believe that offering a comprehensive suite of financing products will generate incremental sales of our vehicles, drive incremental GM Financial earnings and help support our sales throughout various economic cycles. GM Financial's leasing program is exposed to residual values, which are heavily dependent on used vehicle prices. Used vehicle prices were sustained at high levels for the three and six months ended June 30, 2022, primarily due to low new vehicle inventory. The high levels of used vehicle prices also resulted in gains on terminations of leased vehicles of $0.4 billion and $0.7 billion included in GM Financial interest, operating and other expenses for the three and six months ended June 30, 2022, compared to gains of $0.8 billion and $1.2 billion in the corresponding periods in 2021. The decrease in gains is primarily due to higher residual value estimates resulting in decreased depreciation expense as well as fewer vehicles returned for the three and six months ended June 30, 2022 compared to the corresponding periods in 2021. For the remainder of 2022, GM Financial expects used vehicle prices to remain elevated primarily due to sustained low new vehicle inventory, but to decrease relative to 2021 peak levels. The following table summarizes the estimated residual value based on GM Financial's most recent estimates and the number of units included in GM Financial Equipment on operating leases, net by vehicle type (units in thousands):

June 30, 2022December 31, 2021
Residual ValueUnitsPercentageResidual ValueUnitsPercentage
Crossovers$15,46080867.3%$16,69689767.3%
Trucks7,51924820.6%7,88626419.8%
SUVs2,790715.9%3,104805.9%
Cars1,148746.1%1,430937.0%
Total$26,9181,200100.0%$29,1161,334100.0%

GM Financial's penetration of our retail sales in the U.S. was 45% in the six months ended June 30, 2022 and 43% in the corresponding period in 2021. Penetration levels vary depending on incentive financing programs available and competing third-party financing products in the market. GM Financial's prime loan originations as a percentage of total loan originations in North America increased to 79% in the six months ended June 30, 2022 from 71% in the six months ended June 30, 2021. In the six months ended June 30, 2022, GM Financial's revenue consisted of leased vehicle income of 64%, retail finance charge income of 30% and commercial finance charge income of 2%.

Consolidated Results We review changes in our results of operations under five categories: volume, mix, price, cost and other. Volume measures the impact of changes in wholesale vehicle volumes driven by industry volume, market share and changes in dealer stock levels. Mix measures the impact of changes to the regional portfolio due to product, model, trim, country and option penetration in current year wholesale vehicle volumes. Price measures the impact of changes related to Manufacturer’s Suggested Retail Price and various sales allowances. Cost primarily includes: (1) material and freight; (2) manufacturing, engineering, advertising, administrative and selling and warranty expense; and (3) non-vehicle related activity. Other primarily includes foreign exchange and non-vehicle related automotive revenues as well as equity income or loss from our nonconsolidated affiliates. Refer to the regional sections of this MD&A for additional information.

Total Net Sales and Revenue

Three Months EndedFavorable/ (Unfavorable)%Variance Due To
June 30, 2022June 30, 2021VolumeMixPriceOther
(Dollars in billions)
GMNA$28,760$27,932$8283.0%$0.8$(1.6)$1.5$0.1
GMI3,8072,7921,01536.4%$0.7$0.1$0.3$(0.1)
Corporate472126n.m.$—
Automotive32,61430,7451,8696.1%$1.4$(1.5)$1.8$0.1
Cruise2525——%$—
GM Financial3,1463,426(280)(8.2)%$(0.3)
Eliminations/reclassifications(26)(29)310.3%$—
Total net sales and revenue$35,759$34,167$1,5924.7%$1.4$(1.5)$1.8$(0.2)

n.m. = not meaningful

GENERAL MOTORS COMPANY AND SUBSIDIARIES

Six Months EndedFavorable/ (Unfavorable)%Variance Due To
June 30, 2022June 30, 2021VolumeMixPriceOther
(Dollars in billions)
GMNA$58,216$53,889$4,3278.0%$1.8$(1.2)$3.3$0.4
GMI7,1205,8781,24221.1%$0.3$0.4$0.6$(0.1)
Corporate1004060n.m.$0.1
Automotive65,43759,8075,6309.4%$2.1$(0.8)$3.9$0.4
Cruise5155(4)(7.3)%$—
GM Financial6,3026,833(531)(7.8)%$(0.5)
Eliminations/reclassifications(52)(54)23.7%$—
Total net sales and revenue$71,738$66,641$5,0977.6%$2.1$(0.8)$3.9$(0.2)

n.m. = not meaningful

Refer to the regional sections of this MD&A for additional information on volume, mix and price.

Automotive and Other Cost of Sales

Three Months EndedFavorable/ (Unfavorable)%Variance Due To
June 30, 2022June 30, 2021VolumeMixCostOther
(Dollars in billions)
GMNA$25,158$24,061$(1,097)(4.6)%$(0.5)$—$(0.6)$0.1
GMI3,4572,850(607)(21.3)%$(0.5)$0.1$(0.2)$0.1
Corporate15042(108)n.m.$(0.1)$—
Cruise496313(183)(58.5)%$(0.2)
Eliminations(1)—1n.m.$—
Total automotive and other cost of sales$29,261$27,266$(1,995)(7.3)%$(1.1)$—$(1.1)$0.1

n.m. = not meaningful

Six Months EndedFavorable/ (Unfavorable)%Variance Due To
June 30, 2022June 30, 2021VolumeMixCostOther
(Dollars in billions)
GMNA$50,254$46,023$(4,231)(9.2)%$(1.2)$(0.5)$(2.6)$0.1
GMI6,4715,747(724)(12.6)%$(0.3)$(0.1)$(0.3)$—
Corporate26271(191)n.m.$(0.1)$—
Cruise1,628540(1,088)n.m.$(1.1)
Eliminations(1)—1n.m.$—
Total automotive and other cost of sales$58,614$52,381$(6,233)(11.9)%$(1.5)$(0.6)$(4.2)$0.1

n.m. = not meaningful

In the three months ended June 30, 2022, increased Cost was primarily due to: (1) increased material and freight costs of $1.6 billion; (2) increased engineering costs of $0.4 billion primarily related to accelerating our EV portfolio; and (3) increased costs of $0.3 billion primarily related to parts and accessories sales; partially offset by (4) decreased campaigns and other warranty-related costs of $1.1 billion, including the Chevrolet Bolt recall in 2021.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

In the six months ended June 30, 2022, increased Cost was primarily due to: (1) increased material and freight costs of $2.7 billion; (2) increased costs of $0.8 billion related to modification of Cruise stock incentive awards; (3) increased costs of $0.6 billion primarily related to parts and accessories sales; (4) increased engineering costs of $0.6 billion primarily related to accelerating our EV portfolio; and (5) increased manufacturing costs of $0.6 billion; partially offset by (6) decreased campaigns and other warranty-related costs of $1.1 billion, including the Chevrolet Bolt recall in 2021.

Refer to the regional sections of this MD&A for additional information on volume and mix.

Automotive and Other Selling, General and Administrative Expense

Three Months EndedFavorable/ (Unfavorable)Six Months EndedFavorable/ (Unfavorable)
June 30, 2022June 30, 2021%June 30, 2022June 30, 2021%
Automotive and other selling, general and administrative expense$2,293$2,125$(168)(7.9)%$4,797$3,928$(869)(22.1)%

In the three months ended June 30, 2022, Automotive and other selling, general and administrative expense increased primarily due to several insignificant items.

In the six months ended June 30, 2022, Automotive and other selling, general and administrative expense increased primarily due to increased advertising and administrative costs of $0.4 billion and increased costs of $0.3 billion related to modification of Cruise stock incentive awards.

Interest Income and Other Non-operating Income, net

Three Months EndedFavorable/ (Unfavorable)Six Months EndedFavorable/ (Unfavorable)
June 30, 2022June 30, 2021%June 30, 2022June 30, 2021%
Interest income and other non-operating income, net$295$784$(489)(62.4)%$812$1,583$(771)(48.7)%

In the three months ended June 30, 2022, Interest income and other non-operating income, net decreased primarily due to $0.2 billion in losses in the three months ended June 30, 2022 compared to $0.2 billion in gains in the three months ended June 30, 2021 related to Stellantis warrants.

In the six months ended June 30, 2022, Interest income and other non-operating income, net decreased primarily due to $0.4 billion in losses in the six months ended June 30, 2022 compared to $0.4 billion in gains in the six months ended June 30, 2021 related to Stellantis warrants.

Income Tax Expense (Benefit)

Three Months EndedFavorable/ (Unfavorable)Six Months EndedFavorable/ (Unfavorable)
June 30, 2022June 30, 2021%June 30, 2022June 30, 2021%
Income tax expense (benefit)$490$971$48149.5%$462$2,148$1,68678.5%

In the three months ended June 30, 2022, Income tax expense decreased primarily due to lower pre-tax income.

In the six months ended June 30, 2022, Income tax expense decreased primarily due to Cruise valuation allowance adjustments and lower pre-tax income.

For the three and six months ended June 30, 2022, our ETR-adjusted was 23.0% and 20.8%. We expect our adjusted effective tax rate to be approximately 20% for the year ending December 31, 2022.

Refer to Note 15 to our condensed consolidated financial statements for additional information related to Income tax expense (benefit).

GENERAL MOTORS COMPANY AND SUBSIDIARIES

GM North America

Three Months EndedFavorable / (Unfavorable)%Variance Due To
June 30, 2022June 30, 2021VolumeMixPriceCostOther
(Dollars in billions)
Total net sales and revenue$28,760$27,932$8283.0%$0.8$(1.6)$1.5$0.1
EBIT (loss)-adjusted$2,299$2,894$(595)(20.6)%$0.3$(1.6)$1.5$(0.7)$(0.1)
EBIT (loss)-adjusted margin8.0%10.4%(2.4)%
(Vehicles in thousands)
Wholesale vehicle sales662642203.1%
Six Months EndedFavorable / (Unfavorable)%Variance Due To
June 30, 2022June 30, 2021VolumeMixPriceCostOther
(Dollars in billions)
Total net sales and revenue$58,216$53,889$4,3278.0%$1.8$(1.2)$3.3$0.4
EBIT (loss)-adjusted$5,440$6,028$(588)(9.8)%$0.6$(1.7)$3.3$(2.8)$0.1
EBIT (loss)-adjusted margin9.3%11.2%(1.9)%
(Vehicles in thousands)
Wholesale vehicle sales1,3561,306503.8%

GMNA Total Net Sales and Revenue In the three months ended June 30, 2022, Total net sales and revenue increased primarily due to: (1) favorable price as a result of low dealer inventory levels and strong demand for our products; (2) increased net wholesale volumes primarily due to increased sales of passenger cars, vans and crossover vehicles, partially offset by a decrease in sales of full-size pickup trucks and full-size SUVs; and (3) favorable Other due to increased sales of parts and accessories; partially offset by (4) unfavorable mix associated with increased sales of passenger cars, crossover vehicles and vans and decreased sales of full-size SUVs.

In the six months ended June 30, 2022, Total net sales and revenue increased primarily due to: (1) favorable price as a result of low dealer inventory levels and strong demand for our products; (2) increased net wholesale volumes primarily due to increased sales of passenger cars, vans, mid-size pickup trucks and crossover vehicles, partially offset by a decrease in sales of full-size pickup trucks and full-size SUVs; and (3) favorable Other due to increased sales of parts and accessories; partially offset by (4) unfavorable mix associated with increased sales of crossover vehicles, vans and passenger cars and decreased sales of full-size SUVs.

GMNA EBIT (Loss)-Adjusted In the three months ended June 30, 2022, EBIT-adjusted decreased primarily due to: (1) unfavorable mix associated with increased sales of passenger cars, crossover vehicles and vans and decreased sales of full-size SUVs and full-size pickup trucks; and (2) unfavorable Cost primarily due to increased material and freight cost of $1.4 billion and increased engineering cost of $0.2 billion including accelerating our EV portfolio, partially offset by a decrease in campaigns and other warranty-related costs of $1.0 billion, including the Chevrolet Bolt recall in 2021; partially offset by (3) favorable price; and (4) favorable volume.

In the six months ended June 30, 2022, EBIT-adjusted decreased primarily due to: (1) unfavorable Cost primarily due to increased material and freight cost of $2.4 billion, increased manufacturing cost of $0.5 billion, increased selling, general and administrative costs of $0.4 billion and increased engineering cost of $0.3 billion including accelerating our EV portfolio, partially offset by a decrease in campaigns and other warranty-related costs of $1.0 billion, including the Chevrolet Bolt recall in 2021; and (2) unfavorable mix associated with increased sales of passenger cars, decreased sales of full-size pickup trucks and increased sales of crossover vehicles and vans; partially offset by (3) favorable price; and (4) favorable volume.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

GM International

Three Months EndedFavorable / (Unfavorable)Variance Due To
June 30, 2022June 30, 2021%VolumeMixPriceCostOther
(Dollars in billions)
Total net sales and revenue$3,807$2,792$1,01536.4%$0.7$0.1$0.3$(0.1)
EBIT (loss)-adjusted$209$15$194n.m.$0.1$0.1$0.3$(0.2)$(0.2)
EBIT (loss)-adjusted margin5.5%0.5%5.0%
Equity income (loss) — Automotive China$(87)$276$(363)n.m.
EBIT (loss)-adjusted — excluding Equity income$296$(261)$557n.m.
(Vehicles in thousands)
Wholesale vehicle sales1551183731.4%

n.m. = not meaningful

Six Months EndedFavorable / (Unfavorable)Variance Due To
June 30, 2022June 30, 2021%VolumeMixPriceCostOther
(Dollars in billions)
Total net sales and revenue$7,120$5,878$1,24221.1%$0.3$0.4$0.6$(0.1)
EBIT (loss)-adjusted$537$323$21466.3%$0.1$0.3$0.6$(0.3)$(0.4)
EBIT (loss)-adjusted margin7.5%5.5%2.0%
Equity income (loss) — Automotive China$147$584$(437)(74.8)%
EBIT (loss)-adjusted — excluding Equity income$390$(261)$651n.m.
(Vehicles in thousands)
Wholesale vehicle sales292275176.2%

n.m. = not meaningful

The vehicle sales of our Automotive China JVs are not recorded in Total net sales and revenue. The results of our joint ventures are recorded in Equity income (loss), which is included in EBIT (loss)-adjusted above.

GMI Total Net Sales and Revenue In the three months ended June 30, 2022, Total net sales and revenue increased primarily due to: (1) increased net wholesale volumes due to lost production volumes resulting from the shortage of semiconductors in 2021, partially offset by ongoing supply chain constraints; (2) favorable pricing across multiple vehicle lines in South America; and (3) favorable mix in Asia/Pacific and the Middle East, partially offset by unfavorable mix in Brazil; partially offset by (4) unfavorable Other primarily due to the foreign currency effect resulting from the weakening of various currencies against the U.S. Dollar.

In the six months ended June 30, 2022, Total net sales and revenue increased primarily due to: (1) favorable pricing across multiple vehicle lines in South America; (2) favorable mix in South America, Asia/Pacific and the Middle East; and (3) increased net wholesale volumes due to lost production volumes resulting from the shortage of semiconductors in 2021, partially offset by ongoing supply chain constraints; partially offset by (4) unfavorable Other primarily due to the foreign currency effect resulting from the weakening of various currencies against the U.S. dollar, partially offset by increased components, parts and accessories sales.

GMI EBIT (Loss)-Adjusted In the three months ended June 30, 2022, EBIT-adjusted increased primarily due to: (1) favorable price; (2) favorable mix in Asia/Pacific and the Middle East; and (3) increased net wholesale volumes; partially offset by (4) unfavorable Cost primarily due to increased material and logistic costs; and (5) unfavorable Other primarily due to decreased equity income.

In the six months ended June 30, 2022, EBIT-adjusted increased primarily due to: (1) favorable price; (2) favorable mix; and (3) increased net wholesale volumes; partially offset by (4) unfavorable Cost primarily due to increased material and logistic

GENERAL MOTORS COMPANY AND SUBSIDIARIES

costs; and (5) unfavorable Other primarily due to decreased equity income and foreign currency effect resulting from the weakening of various currencies against the U.S. dollar.

We view the Chinese market as important to our global growth strategy and are employing a multi-brand strategy. In the coming years we plan to leverage our global architectures to increase the number of product offerings under the Buick, Chevrolet and Cadillac brands in China and continue to grow our business under the local Baojun and Wuling brands while we are accelerating the development and rollout of EVs across our brands in China in response to our commitment to an all-electric future. We operate in the Chinese market through a number of joint ventures and maintaining strong relationships with our joint venture partners is an important part of our China growth strategy.

The following table summarizes certain key operational and financial data for the Automotive China JVs (vehicles in thousands):

Three Months EndedSix Months Ended
June 30, 2022June 30, 2021June 30, 2022June 30, 2021
Wholesale vehicle sales, including vehicles exported to markets outside of China4736201,0751,295
Total net sales and revenue$6,083$8,954$15,074$18,830
Net income (loss)$(207)$527$298$1,113

Cruise

Three Months EndedFavorable / (Unfavorable)%Six Months EndedFavorable / (Unfavorable)%
June 30, 2022June 30, 2021June 30, 2022June 30, 2021
Total net sales and revenue(a)$25$25$——%$51$55$(4)(7.3)%
EBIT (loss)-adjusted(b)$(543)$(332)$(211)(63.6)%$(868)$(561)$(307)(54.7)%

(a)Primarily reclassified to Interest income and other non-operating income, net in our condensed consolidated income statements in the three and six months ended June 30, 2022 and 2021.

(b)Excludes $1.1 billion in compensation expense in the six months ended June 30, 2022 resulting from modification of the Cruise stock incentive awards.

Cruise EBIT (Loss)-Adjusted In the three and six months ended June 30, 2022, EBIT (loss)-adjusted increased primarily due to an increase in development costs as we progress towards the commercialization of a network of on-demand AVs in the United States and globally.

GM Financial

Three Months EndedIncrease/ (Decrease)%Six Months EndedIncrease/ (Decrease)%
June 30, 2022June 30, 2021June 30, 2022June 30, 2021
Total revenue$3,146$3,426$(280)(8.2)%$6,302$6,833$(531)(7.8)%
Provision for loan losses$198$59$139n.m.$320$33$287n.m.
EBT (loss)-adjusted$1,106$1,581$(475)(30.0)%$2,390$2,763$(373)(13.5)%
Average debt outstanding (dollars in billions)$92.9$94.7$(1.8)(1.9)%$92.9$94.3$(1.4)(1.5)%
Effective rate of interest paid2.8%2.7%0.1%2.6%2.7%(0.1)%

n.m. = not meaningful

GM Financial Revenue In the three months ended June 30, 2022, total revenue decreased primarily due to decreased leased vehicle income of $0.3 billion primarily due to a decrease in the average balance of the leased vehicles portfolio.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

In the six months ended June 30, 2022, total revenue decreased primarily due to decreased leased vehicle income of $0.6 billion primarily due to a decrease in the average balance of the leased vehicles portfolio.

GM Financial EBT-Adjusted In the three months ended June 30, 2022, EBT-adjusted decreased primarily due to: (1) decreased leased vehicle income net of leased vehicle expenses of $0.3 billion primarily due to decreased leased vehicle income primarily due to a decrease in the average balance of the leased vehicles portfolio, decreased lease termination gains associated with higher leased portfolio net book values and fewer vehicles returned to us for remarketing; partially offset by decreased depreciation on leased vehicles resulting from increased residual value estimates and a decrease in the size of the portfolio; and (2) increased provision for loan losses of $0.1 billion primarily due to a reduction in reserve levels recorded in the three months ended June 30, 2021 as a result of actual credit performance that was better than forecast, as well as favorable expectations for future charge-offs and recoveries; in addition, the provision expense recorded in the three months ended June 30, 2022 incorporates economic forecast scenarios weighted more heavily to a weaker outlook.

In the six months ended June 30, 2022, EBT-adjusted decreased primarily due to: (1) increased provision for loan losses of $0.3 billion primarily due to a reduction in reserve levels recorded in the six months ended June 30, 2021 as a result of actual credit performance that was better than forecast, as well as favorable expectations for future charge-offs and recoveries; in addition, the provision expense recorded in the six months ended June 30, 2022 incorporates economic forecast scenarios weighted more heavily to a weaker outlook; (2) decreased leased vehicle income net of leased vehicle expenses of $0.2 billion primarily due to decreased leased vehicle income primarily due to a decrease in the average balance of the lease vehicle portfolio, decreased depreciation on leased vehicles resulting from increased residual value estimates and a decrease in the size of the portfolio; partially offset by decreased lease termination gains associated with higher leased portfolio net book values and fewer vehicles returned for remarketing; and (3) decreased interest expense of $0.1 billion primarily due to decreased effective rate of interest on GM Financial debt, as well as a decrease in the average debt outstanding.

Liquidity and Capital Resources We believe our current levels of cash, cash equivalents, marketable debt securities, available borrowing capacity under our revolving credit facilities and other liquidity actions currently available to us are sufficient to meet our liquidity requirements. We also maintain access to the capital markets and may issue debt or equity securities, which may provide an additional source of liquidity. We have substantial cash requirements going forward, which we plan to fund through our total available liquidity, cash flows from operating activities and additional liquidity measures, if determined to be necessary.

Our known current material uses of cash include, among other possible demands: (1) capital spending and our investments in Ultium Cells LLC, our battery joint venture, of approximately $9.0 billion to $10.0 billion annually over the medium term in addition to payments for engineering and product development activities; (2) payments associated with the previously announced vehicle recalls and any other recall-related contingencies; (3) payments to service debt and other long-term obligations, including discretionary and mandatory contributions to our pension plans; and (4) payments associated with the previously announced liquidity program for holders of equity-based incentive awards issued to employees of Cruise pursuant to Cruise's 2018 Employee Incentive Plan, which we expect to be $1.0 billion to $1.5 billion in 2022, with ongoing expenditures thereafter. Our material future uses of cash, which may vary from time to time based on market conditions and other factors, are focused on the three objectives of our capital allocation program: (1) grow our business at an average target ROIC-adjusted rate of 20% or greater; (2) maintain a strong investment-grade balance sheet, including a target average automotive cash balance of $18 billion; and (3) after the first two objectives are met, return available cash to shareholders. Our senior management evaluates our capital allocation program on an ongoing basis and recommends any modifications to the program to our Board of Directors, not less than once annually.

Our liquidity plans are subject to a number of risks and uncertainties, including those described in the "Forward-Looking Statements" section of this MD&A and Part I, Item 1A. Risk Factors of our 2021 Form 10-K, some of which are outside of our control.

We continue to monitor and evaluate opportunities to strengthen our competitive position over the long term while maintaining a strong investment-grade balance sheet. These actions may include opportunistic payments to reduce our long-term obligations as well as the possibility of acquisitions, dispositions and investments with joint venture partners as well as strategic alliances that we believe would generate significant advantages and substantially strengthen our business.

In July 2022, the U.S. Department of Energy (DOE) announced its conditional commitment through the Advanced Technology Vehicles Manufacturing program to loan $2.5 billion to Ultium Cells LLC, our battery joint venture with LG Energy Solutions. We expect the loan will close in the second half of the year, subject to negotiation of final documentation and satisfaction of certain conditions. Under the anticipated terms of the loan, the DOE will not have recourse on the principal and interest of the loan against General Motors Company or any of its consolidated subsidiaries.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

Cash flows that occur amongst our Automotive, Cruise and GM Financial operations are eliminated when we consolidate our cash flows. Such eliminations include, among other things, collections by Automotive on wholesale accounts receivables financed by dealers through GM Financial, payments between Automotive and GM Financial for accounts receivables transferred by Automotive to GM Financial, loans to Automotive and Cruise from GM Financial, dividends issued by GM Financial to Automotive, tax payments by GM Financial to Automotive and Automotive cash injections in Cruise. The presentation of Automotive liquidity, Cruise liquidity and GM Financial liquidity presented below includes the impact of cash transactions amongst the sectors that are ultimately eliminated in consolidation.

Automotive Liquidity Total available liquidity includes cash, cash equivalents, marketable debt securities and funds available under credit facilities. The amount of available liquidity is subject to seasonal fluctuations and includes balances held by various business units and subsidiaries worldwide that are needed to fund their operations. We have not significantly changed the management of our liquidity, including our allocation of available liquidity, our portfolio composition and our investment guidelines since December 31, 2021. Refer to Part II, Item 7. MD&A of our 2021 Form 10-K.

We use credit facilities as a mechanism to provide additional flexibility in managing our global liquidity. Our Automotive borrowing capacity under credit facilities totaled $15.5 billion at June 30, 2022 and December 31, 2021. Total Automotive borrowing capacity under our credit facilities does not include our 364-day, $2.0 billion facility allocated for exclusive use of GM Financial. We did not have any borrowings against our primary facilities, but had letters of credit outstanding under our sub-facility of $0.4 billion and $0.3 billion at June 30, 2022 and December 31, 2021.

In April 2022, we renewed our 364-day, $2.0 billion revolving credit facility allocated for the exclusive use of GM Financial, which now matures on April 4, 2023. If available capacity permits, GM Financial continues to have access to our automotive credit facilities. GM Financial did not have borrowings outstanding against any of these facilities at June 30, 2022 and December 31, 2021. We had intercompany loans from GM Financial of $0.1 billion and $0.2 billion at June 30, 2022 and December 31, 2021, which primarily consisted of commercial loans to dealers we consolidate. We did not have intercompany loans to GM Financial at June 30, 2022 and December 31, 2021. Refer to Note 5 to our condensed consolidated financial statements for additional information.

Several of our loan facilities, including our revolving credit facilities, require compliance with certain financial and operational covenants as well as regular reporting to lenders. We have reviewed our covenants in effect as of June 30, 2022 and determined we are in compliance and expect to remain in compliance in the future.

In March 2022, under the Share Purchase Agreement, we acquired SoftBank's equity ownership stake in Cruise for $2.1 billion, and separately, we made an additional $1.35 billion investment in Cruise in place of SoftBank. In the three months ended June 30, 2022, we made an additional $0.6 billion investment in Cruise.

GM Financial's Board of Directors declared and paid dividends of $0.8 billion on its common stock in the three and six months ended June 30, 2022 and $0.6 billion and $1.2 billion in the three and six months ended June 30, 2021. In July 2022, approximately $0.4 billion of dividends declared from our nonconsolidated affiliates were paid.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

The following table summarizes our Automotive available liquidity (dollars in billions):

June 30, 2022December 31, 2021
Automotive cash and cash equivalents$9.6$14.5
Marketable debt securities8.37.1
Automotive cash, cash equivalents and marketable debt securities17.921.6
Available under credit facilities(a)15.115.2
Total Automotive available liquidity$33.0$36.8

(a)We had letters of credit outstanding under our sub-facility of $0.4 billion and $0.3 billion at June 30, 2022 and December 31, 2021.

The following table summarizes the changes in our Automotive available liquidity (dollars in billions):

Six Months Ended June 30, 2022
Operating cash flow$5.1
Capital expenditures(3.7)
Purchase of SoftBank's equity stake in Cruise(2.1)
GM investment in Cruise(2.0)
Investment in Ultium Cells LLC(0.4)
Other non-operating(0.7)
Total change in automotive available liquidity$(3.8)

Automotive Cash Flow (dollars in billions)

Six Months EndedChange
June 30, 2022June 30, 2021
Operating Activities
Net income (loss)$3.7$4.7$(1.0)
Depreciation, amortization and impairment charges3.32.80.5
Pension and OPEB activities(1.0)(1.2)0.2
Working capital(1.0)(3.2)2.2
Accrued and other liabilities and income taxes(0.8)(1.2)0.4
Other0.91.0(0.1)
Net automotive cash provided by (used in) operating activities$5.1$2.9$2.2

In the six months ended June 30, 2022, the increase in Net automotive cash provided by operating activities was primarily due to: (1) working capital; partially offset by (2) lower dividends received from GM Financial of $0.5 billion.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

Six Months EndedChange
June 30, 2022June 30, 2021
Investing Activities
Capital expenditures$(3.7)$(2.4)$(1.3)
Acquisitions and liquidations of marketable securities, net(1.5)4.0(5.5)
Other(a)(4.5)(1.3)(3.2)
Net automotive cash provided by (used in) investing activities$(9.7)$0.3$(10.0)

(a)Includes $2.0 billion and $1.0 billion for GM investment in Cruise in the six months ended June 30, 2022 and 2021, $2.1 billion related to the redemption of Cruise preferred shares from SoftBank in the six months ended June 30, 2022, and a $0.4 billion and $0.2 billion investment in Ultium Cells LLC in the six months ended June 30, 2022 and 2021.

In the six months ended June 30, 2022, cash used in acquisitions and liquidations of marketable securities, net increased due to acquisitions of securities and investments compared to liquidations of securities to fund operating activities and investments during the six months ended June 30, 2021.

Six Months EndedChange
June 30, 2022June 30, 2021
Financing Activities
Net proceeds (payments) from short-term debt$—$(0.5)$0.5
Other(0.4)0.1(0.5)
Net automotive cash provided by (used in) financing activities$(0.4)$(0.4)$—

Adjusted Automotive Free Cash Flow We measure adjusted automotive free cash flow as automotive operating cash flow from operations less capital expenditures adjusted for management actions. In the six months ended June 30, 2022, net automotive cash provided by operating activities under U.S. GAAP was $5.1 billion, capital expenditures were $3.7 billion, and adjustments for management actions were insignificant.

In the six months ended June 30, 2021, net automotive cash provided by operating activities under U.S. GAAP was $2.9 billion, capital expenditures were $2.4 billion, and adjustments for management actions were insignificant.

Status of Credit Ratings We receive ratings from four independent credit rating agencies: DBRS Limited (DBRS), Fitch Ratings (Fitch), Moody's Investors Service and Standard & Poor's. All four credit rating agencies currently rate our corporate credit at investment grade. In May 2022, Fitch raised our ratings outlook to positive from stable. In June 2022, DBRS upgraded our Issuer Rating and Revolving Credit Facility rating to BBB (high) from BBB and also changed its outlook to stable from positive. As of July 18, 2022, all other credit ratings remained unchanged since December 31, 2021.

Cruise Liquidity In January 2022, Cruise Holdings met the requirements for commercial deployment under its agreements with SoftBank, which triggered SoftBank's obligation to purchase additional Cruise convertible preferred shares for $1.35 billion. In March 2022, GM made the additional $1.35 billion investment in Cruise in place of SoftBank following GM's acquisition of SoftBank's equity ownership stake in Cruise pursuant to the Share Purchase Agreement.

Additionally, in March 2022, GM and Cruise announced a liquidity program for holders of equity-based incentive awards issued to the employees of Cruise pursuant to Cruise's 2018 Employee Incentive Plan, under which GM will purchase newly issued Cruise Class B Common Shares to fund the withholding tax on vested awards and GM will conduct tender offers for Cruise Class B Common Shares issued to settle vested awards. In the three months ended June 30, 2022, Cruise issued $0.4 billion of Cruise Class B Common Shares, primarily to us, to fund the payment of statutory tax withholding obligations resulting from the settlement or exercise of vested awards. Also, GM conducted a quarterly tender offer and paid $0.2 billion in cash to settle tendered Cruise Class B Common Shares under the announced liquidity program. Refer to Note 16 to our condensed consolidated financial statements for additional information.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

The following table summarizes Cruise's available liquidity (dollars in billions):

June 30, 2022December 31, 2021
Cruise cash and cash equivalents$1.8$1.6
Cruise marketable securities1.81.5
Total Cruise available liquidity(a)$3.7$3.1

(a)Excludes a multi-year credit agreement between Cruise and GM Financial whereby Cruise can request to borrow, over time, up to an aggregate of $5.0 billion, through 2024, to fund exclusively the purchase of AVs from GM.

The following table summarizes the changes in Cruise's available liquidity (dollars in billions):

Six Months Ended June 30, 2022
Operating cash flow(a)$(0.8)
GM investment in Cruise2.0
Employee Incentive Plan(0.5)
Other non-operating(0.2)
Total change in Cruise available liquidity$0.5

(a)Includes $0.1 billion cash outflows related to tendered Cruise Class B Common Shares classified as liabilities.

Cruise Cash Flow (dollars in billions)

Six Months EndedChange
June 30, 2022June 30, 2021
Net cash provided by (used in) operating activities$(0.8)$(0.5)$(0.3)
Net cash provided by (used in) investing activities$(0.4)$(1.2)$0.8
Net cash provided by (used in) financing activities$1.4$2.7$(1.3)

Automotive Financing – GM Financial Liquidity GM Financial's primary sources of cash are finance charge income, leasing income and proceeds from the sale of terminated leased vehicles, net proceeds from credit facilities, securitizations, secured and unsecured borrowings and collections and recoveries on finance receivables. GM Financial's primary uses of cash are purchases and funding of finance receivables and leased vehicles, repayment or repurchases of secured and unsecured debt, funding credit enhancement requirements in connection with securitizations and secured credit facilities, interest costs, operating expenses, income taxes and dividend payments. GM Financial continues to monitor and evaluate opportunities to optimize its liquidity position and the mix of its debt between secured and unsecured debt. The following table summarizes GM Financial's available liquidity (dollars in billions):

June 30, 2022December 31, 2021
Cash and cash equivalents$5.3$4.0
Borrowing capacity on unpledged eligible assets21.919.2
Borrowing capacity on committed unsecured lines of credit0.60.5
Borrowing capacity on revolving credit facility, exclusive to GM Financial2.02.0
Total GM Financial available liquidity$29.7$25.7

At June 30, 2022, GM Financial's available liquidity increased from December 31, 2021 due to increased available borrowing capacity on unpledged eligible assets, resulting from the issuance of securitization transactions and unsecured debt, and increase in cash and cash equivalents. GM Financial structures liquidity to support at least six months of GM Financial's expected net cash flows, including new originations, without access to new debt financing transactions or other capital markets activity.

GM Financial did not have any borrowings outstanding against our credit facility designated for their exclusive use or the remainder of our revolving credit facilities at June 30, 2022 and December 31, 2021. Refer to the Automotive Liquidity section of this MD&A for additional details.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

Credit Facilities In the normal course of business, in addition to using its available cash, GM Financial utilizes borrowings under its credit facilities, which may be secured or unsecured, and GM Financial repays these borrowings as appropriate under its cash management strategy. At June 30, 2022, secured, committed unsecured and uncommitted unsecured credit facilities totaled $26.1 billion, $0.6 billion and $1.3 billion with advances outstanding of $1.3 billion, an insignificant amount and $1.3 billion.

GM Financial Cash Flow (dollars in billions)

Six Months EndedChange
June 30, 2022June 30, 2021
Net cash provided by (used in) operating activities$2.4$3.6$(1.3)
Net cash provided by (used in) investing activities$(3.0)$(3.4)$0.5
Net cash provided by (used in) financing activities$1.5$0.2$1.3

In the six months ended June 30, 2022, Net cash provided by operating activities decreased primarily due to: (1) a decrease in derivative collateral posting activities of $0.7 billion; and (2) a decrease in leased vehicle income of $0.6 billion; partially offset by (3) a decrease in interest paid of $0.2 billion.

In the six months ended June 30, 2022, Net cash used in investing activities decreased primarily due to: (1) a decrease in purchases of leased vehicles of $6.2 billion; partially offset by (2) a decrease in the proceeds from termination of leased vehicles of $3.3 billion; (3) a decrease in collections and recoveries on finance receivables of $1.9 billion; and (4) an increase in purchases and originations of finance receivables of $0.5 billion.

In the six months ended June 30, 2022, Net cash provided by financing activities increased primarily due to: (1) a decrease in debt repayments of $4.3 billion; and (2) a decrease in dividend payments of $0.5 billion; partially offset by (3) a decrease in borrowings of $3.5 billion.

Critical Accounting Estimates The condensed consolidated financial statements are prepared in conformity with U.S. GAAP, which requires the use of estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses in the periods presented. We believe the accounting estimates employed are appropriate and the resulting balances are reasonable; however, due to the inherent uncertainties in developing estimates, actual results could differ from the original estimates, requiring adjustments to these balances in future periods. The critical accounting estimates that affect the condensed consolidated financial statements and the judgments and assumptions used are consistent with those described in the MD&A in our 2021 Form 10-K.

Forward-Looking Statements This report and the other reports filed by us with the SEC from time to time, as well as statements incorporated by reference herein and related comments by our management, may include "forward-looking statements" within the meaning of the U.S. federal securities laws. Forward-looking statements are any statements other than statements of historical fact. Forward-looking statements represent our current judgment about possible future events and are often identified by words like “aim,” “anticipate,” “appears,” “approximately,” “believe,” “continue,” “could,” “designed,” “effect,” “estimate,” “evaluate,” “expect,” “forecast,” “goal,” “initiative,” “intend,” “may,” “objective,” “outlook,” “plan,” “potential,” “priorities,” “project,” “pursue,” “seek,” “should,” “target,” “when,” “will,” “would,” or the negative of any of those words or similar expressions. In making these statements, we rely on assumptions and analysis based on our experience and perception of historical trends, current conditions and expected future developments as well as other factors we consider appropriate under the circumstances. We believe these judgments are reasonable, but these statements are not guarantees of any future events or financial results, and our actual results may differ materially due to a variety of important factors, many of which are beyond our control. These factors, which may be revised or supplemented in subsequent reports we file with the SEC, include, among others, the following: (1) our ability to deliver new products, services, technologies and customer experiences in response to increased competition and changing consumer preferences in the automotive industry; (2) our ability to timely fund and introduce new and improved vehicle models, including EVs, that are able to attract a sufficient number of consumers; (3) our ability to profitably deliver a broad portfolio of EVs that will help drive consumer adoption; (4) the success of our current line of full-size SUVs and full-size pickup trucks; (5) our highly competitive industry, which has been historically characterized by excess manufacturing capacity and the use of incentives, and the introduction of new and improved vehicle models by our competitors; (6) the unique technological, operational, regulatory and competitive risks related to the timing and commercialization of AVs; (7) risks associated with climate change, including increased regulation of greenhouse gas emissions, our transition to EVs and the potential increased impacts of severe weather events; (8) global automobile market sales volume, which can be volatile; (9) prices and uncertain availability of raw materials and commodities used by us and our

GENERAL MOTORS COMPANY AND SUBSIDIARIES

suppliers, and instability in logistics and related costs; (10) our business in China, which is subject to unique operational, competitive, regulatory and economic risks; (11) the success of our ongoing strategic business relationships and of our joint ventures, which we cannot operate solely for our benefit and over which we may have limited control; (12) the international scale and footprint of our operations, which exposes us to a variety of unique political, economic, competitive and regulatory risks, including the risk of changes in government leadership and laws (including labor, trade, tax and other laws), political uncertainty or instability and economic tensions between governments and changes in international trade policies, new barriers to entry and changes to or withdrawals from free trade agreements, changes in foreign exchange rates and interest rates, economic downturns in the countries in which we operate, differing local product preferences and product requirements, changes to and compliance with U.S. and foreign countries' export controls and economic sanctions, differing labor regulations, requirements and union relationships, differing dealer and franchise regulations and relationships, difficulties in obtaining financing in foreign countries, and public health crises, including the occurrence of a contagious disease or illness, such as the COVID-19 pandemic; (13) any significant disruption, including any work stoppages, at any of our manufacturing facilities; (14) the ability of our suppliers to deliver parts, systems and components without disruption and at such times to allow us to meet production schedules; (15) the ongoing COVID-19 pandemic; (16) the success of any restructurings or other cost reduction actions; (17) the possibility that competitors may independently develop products and services similar to ours, or that our intellectual property rights are not sufficient to prevent competitors from developing or selling those products or services; (18) our ability to manage risks related to security breaches and other disruptions to our information technology systems and networked products, including connected vehicles and in-vehicle systems; (19) our ability to comply with increasingly complex, restrictive and punitive regulations relating to our enterprise data practices, including the collection, use, sharing and security of the Personal Identifiable Information of our customers, employees, or suppliers; (20) our ability to comply with extensive laws, regulations and policies applicable to our operations and products, including those relating to fuel economy, emissions and AVs; (21) costs and risks associated with litigation and government investigations; (22) the costs and effect on our reputation of product safety recalls and alleged defects in products and services; (23) any additional tax expense or exposure; (24) our continued ability to develop captive financing capability through GM Financial; and (25) any significant increase in our pension funding requirements. A further list and description of these risks, uncertainties and other factors can be found in our 2021 Form 10-K and our subsequent filings with the SEC.

We caution readers not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update publicly or otherwise revise any forward-looking statements, whether as a result of new information, future events or other factors, except where we are expressly required to do so by law.

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