General Motors 2010 Annual Report Download - page 112

GENERAL MOTORS COMPANY AND SUBSIDIARIES
We are and Old GM was exposed to foreign currency risk due to the translation of the results of certain international operations into
U.S. Dollars as part of the consolidation process. Fluctuations in foreign currency exchange rates can therefore create volatility in the
results of operations and may adversely affect our financial position.
The following table summarizes the amounts of automotive foreign currency translation and transaction gains (losses) (dollars in
millions):
Successor Predecessor
Year Ended
December 31, 2010
July 10, 2009
Through
December 31, 2009
January 1,
2009
Through
July 9, 2009
Foreign currency translation gain (loss) recorded in accumulated other
comprehensive income (loss) ......................................... $235 $157 $ 232
Foreign currency transaction gain (loss) recorded in earnings .................. $(209) $(755) $(1,077)
Interest Rate Risk
We are and Old GM was subject to market risk from exposure to changes in interest rates related to certain financial instruments,
primarily debt, capital lease obligations and certain marketable securities.
Interest rate risk in Old GM was managed primarily with interest rate swaps. The interest rate swaps Old GM entered into usually
involved the exchange of fixed for variable rate interest payments to effectively convert fixed rate debt into variable rate debt in order
to achieve a target range of variable rate debt. At December 31, 2010 we did not have any interest rate swap derivative positions to
manage interest rate exposures in our automotive operations.
The following table summarizes our automotive debt by fixed rate and variable rate (dollars in millions):
Successor
December 31, 2010 December 31, 2009
Short-term debt — fixed rate ...................................................... $ 305 $ 592
Short-term debt — variable rate .................................................... 1,311 9,629
Total short-term debt ............................................................. $1,616 $10,221
Short-term debt — fixed rate denominated in U.S. dollars ............................... $ 96 $ 232
Short-term debt — fixed rate denominated in foreign currency ............................ 209 360
Total short-term debt — fixed rate .................................................. $ 305 $ 592
Short-term debt — variable rate denominated in U.S. dollars ............................. $ 347 $ 6,253
Short-term debt — variable rate denominated in foreign currency ......................... 964 3,376
Total short-term debt — variable rate ................................................ $1,311 $ 9,629
Long-term debt — fixed rate ...................................................... $2,519 $ 4,689
Long-term debt — variable rate .................................................... 495 873
Total long-term debt ............................................................. $3,014 $ 5,562
Long-term debt — fixed rate denominated in U.S. dollars ................................ $ 601 $ 3,401
Long-term debt — fixed rate denominated in foreign currency ............................ 1,918 1,288
Total long-term debt – fixed rate ................................................... $2,519 $ 4,689
Long-term debt — variable rate denominated in U.S. dollars ............................. $ 287 $ 551
Long-term debt — variable rate denominated in foreign currency ......................... 208 322
Total long-term debt — variable rate ................................................ $ 495 $ 873
110 General Motors Company 2010 Annual Report