General Motors 2010 Annual Report Download - page 137

GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(a) Liabilities owed to the UST under the UST Loan Agreement of $20.6 billion, with accrued interest of $251 million, and under
the DIP Facility of $30.9 billion with accrued interest of $54 million and borrowings related to the warranty program of $361
million were extinguished in connection with the 363 Sale through the assumption of the UST Loans of $7.1 billion and the
issuance of 912 million shares of our common stock with a fair value of $12.1 billion and 84 million shares of Series A Preferred
Stock with a fair value of $1.5 billion.
(b) Liabilities owed to Canada Holdings under the EDC Loan Facility of $2.6 billion and under the DIP Facility of $3.4 billion were
extinguished in connection with the 363 Sale through the assumption of the Canadian Loan of CAD $1.5 billion (equivalent of
$1.3 billion when entered into) and the issuance of 175 million shares of our common stock with a fair value of $2.3 billion and
16 million shares of Series A Preferred Stock with a fair value of $279 million. In addition, we recorded an increase in Accounts
and notes receivable, net of $3.9 billion at July 10, 2010 for amounts to be received from the EDC in exchange for the equity
Canada Holdings received in connection with the 363 Sale.
(c) As a result of modifications to the UAW hourly retiree medical plan that became effective upon the 363 Sale, we recorded a
reorganization gain of $7.7 billion that represented the difference between the carrying amount of our $19.7 billion plan
obligation at July 9, 2009 and the July 10, 2009 actuarially determined value of $12.0 billion for our modified plan based on the
revised terms of the 2009 UAW Retiree Settlement Agreement. Our obligation to the UAW hourly retiree medical plan was
settled on December 31, 2009. Prior to the December 31, 2009 settlement, the VEBA Notes, Series A Preferred Stock, common
stock and warrants contributed to the New VEBA were not considered outstanding. Refer to Note 20 for additional information
on the 2009 UAW Retiree Settlement Agreement.
(d) As a result of modifications to benefit plans that became effective upon the 363 Sale, we recorded a reorganization gain of $4.6
billion, which represented the difference between the carrying amount of our obligations under certain plans at July 9, 2009, and
our new actuarially determined obligations at July 10, 2009. Major changes include:
• For the non-UAW hourly retiree healthcare plan, we recorded a $2.7 billion gain resulting from elimination of post 65 benefits
and placing a cap on pre 65 benefits;
• For retiree life insurance we recorded a $923 million gain, resulting from capping benefits at $10,000 for non-UAW hourly
retirees and future retirees, capping benefits at $10,000 for existing salaried retirees, reducing benefits for future salaried
retirees, and elimination of executive benefits;
• For the U.S. supplemental executive retirement plan, we recorded a $221 million gain from the elimination of a portion of
nonqualified benefits; and
• For the U.S. hourly defined benefit pension plan, we recorded a $675 million gain, representing the net of a $3.3 billion
obligation decrease resulting from the elimination of the flat monthly special lifetime benefit that was to commence on
January 1, 2010, offset by an obligation increase of $2.6 billion from a discount rate decrease from 6.25% to 5.83% and other
assumption changes.
(e) Represents the net liabilities MLC retained in connection with the 363 Sale, primarily consisting of Old GM’s unsecured debt
and amounts owed to the UST under the DIP Facility of $1.2 billion. These net liabilities were settled in exchange for assets
retained by MLC with a carrying amount of $1.8 billion and a fair value of $2.0 billion, 150 million shares of our common stock
with a fair value of $2.0 billion, warrants to acquire an additional 273 million shares of our common stock with a fair value of
$2.4 billion and the right to contingently receive the Adjustment Shares. We increased Other liabilities and deferred income taxes
to reflect the estimated fair value of $113 million for our obligation to issue the Adjustment Shares to MLC.
General Motors Company 2010 Annual Report 135