General Motors 2010 Annual Report Download - page 162

GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
our application of fresh-start reporting, the amount of our implied goodwill can decline. Prior to the adoption of ASU 2010-28, any
such decline does not result in recognition of an impairment loss as long as Step 1 of the goodwill impairment test is passed (as was
the case at our October 1, 2010 annual testing date). However, proceeding directly to Step 2 of the goodwill impairment test as
required in this circumstance upon adoption of ASU 2010-28 would result in recognition of any such impairment.
We are currently in the process of valuing the amount of the implied goodwill as of January 1, 2011 for GME, and estimate the high
end of the range of possible adjustment to be approximately $1.3 billion. Our estimate represents the net decrease, from July 10, 2009
through January 1, 2011, in the fair-value-to-U.S. GAAP differences attributable to those assets and liabilities that gave rise to
goodwill upon our application of fresh-start reporting resulting primarily from an overall improvement in our incremental borrowing
rate and corresponding decrease in our nonperformance risk since July 10, 2009. The actual goodwill impairment determination can
also be affected by other factors in the Step 2 impairment test which we have not yet finalized. As a result, the actual adjustment may
be different than our current estimate upon the finalization of our valuation procedures and determination of our implied goodwill for
GME at January 1, 2011.
Note 5. Acquisition and Disposal of Businesses
Acquisition of AmeriCredit Corp.
On October 1, 2010 we acquired 100% of the outstanding equity interests of AmeriCredit, an automotive finance company,
renamed General Motors Financial Company, Inc., for cash of approximately $3.5 billion. The acquisition of AmeriCredit will allow
us to provide a more complete range of financing options to our customers across the U.S. and Canada, specifically focusing on
providing additional capabilities in leasing and sub-prime vehicle financing options.
The following table summarizes the consideration paid, acquisition-related costs, and the assets acquired and liabilities assumed
recognized at the acquisition date in connection with the acquisition of AmeriCredit (dollars in millions, except per share amounts):
Successor
October 1, 2010
Consideration
Cash paid to AmeriCredit common shareholders of $24.50 per share ........................................ $3,327
Cash paid to cancel outstanding stock warrants ......................................................... 94
Cash paid to settle equity-based compensation awards ................................................... 33
Total consideration ............................................................................... $3,454
Acquisition-related costs (a) ........................................................................ $ 43
Assets acquired and liabilities assumed
Cash ........................................................................................... $ 538
Restricted cash ................................................................................... 1,136
Finance receivables (b) ............................................................................ 8,231
Other assets, including identifiable intangible assets ..................................................... 200
Securitization notes payable and other borrowings (c) .................................................... (7,564)
Other liabilities .................................................................................. (352)
Identifiable net assets acquired ...................................................................... 2,189
Goodwill resulting from the acquisition of AmeriCredit .................................................. 1,265
$ 3,454
(a) Acquisition-related costs of $43 million were expensed as incurred. The acquisition related costs include $27 million recorded in
Automotive selling, general and administrative expense and $16 million recorded in GM Financial operating expenses and other.
160 General Motors Company 2010 Annual Report