General Motors 2010 Annual Report Download - page 197

GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
In connection with the Chapter 11 Proceedings, Old GM’s $4.5 billion secured revolving credit facility, $1.5 billion U.S. term loan
and $125 million secured credit facility were paid in full on June 30, 2009. Old GM recorded a loss of $958 million in Reorganization
gains, net related to the extinguishments of the debt primarily due to the face value of the U.S. term loan exceeding the carrying
amount.
Contractual interest expense not accrued or recorded on pre-petition debt was $200 million in the period January 1, 2009 through
July 9, 2009 (includes contractual interest expense related to contingent convertible debt of $44 million).
Contingent Convertible Debt
Old GM adopted the provisions of ASC 470-20, “Debt with Conversion and Other Options” (ASC 470-20) in January 2009, with
retrospective application to prior periods. At July 9, 2009 Old GM’s contingent convertible debt outstanding was $7.4 billion,
comprised of principal of $7.9 billion and unamortized discounts of $551 million. Upon adoption of ASC 470-20, the effective
interest rate on Old GM’s outstanding contingent convertible debt ranged from 7.0% to 7.9%. In connection with the 363 Sale, MLC
retained the contingent convertible debt.
The following table summarizes the components of Interest expense related to contingent convertible debt (dollars in millions):
Predecessor
January 1, 2009
Through
July 9, 2009
Year Ended
December 31, 2008
Interest accrued or paid (a) .......................................................... $176 $427
Amortization of discounts ........................................................... 51 136
Interest expense ................................................................... $227 $563
(a) Contractual interest expense not accrued or recorded on pre-petition debt as a result of the Chapter 11 Proceedings totaled $44
million in the period January 1, 2009 through July 9, 2009.
Note 20. Pensions and Other Postretirement Benefits
Consolidated
Employee Pension and Other Postretirement Benefit Plans
Defined Benefit Pension Plans
Defined benefit pension plans covering eligible U.S. hourly employees (hired prior to October 15, 2007) and Canadian hourly
employees generally provide benefits of negotiated, stated amounts for each year of service and supplemental benefits for employees
who retire with 30 years of service before normal retirement age. Non-skilled trades hourly U.S. employees hired after October 15,
2007 participate in a defined benefit cash balance plan. In September 2010 the U.S. hourly defined benefit pension plan was amended
to create a legally separate new defined benefit pension plan for the participants who are covered by the cash balance benefit formula.
The underlying benefits offered to plan participants were unchanged. The benefits provided by the defined benefit pension plans
covering eligible U.S. (hired prior to January 1, 2001) and Canadian salaried employees and employees in certain other non-U.S.
locations are generally based on years of service and compensation history. There is also an unfunded nonqualified pension plan
covering certain U.S. executives for service prior to January 1, 2007, and it is based on an “excess plan” for service after that date.
Defined Contribution Plans
The Savings-Stock Purchase Plan (S-SPP) is a defined contribution retirement savings plan for eligible U.S. salaried employees.
The S-SPP provides discretionary matching contributions up to certain predefined limits based upon eligible base salary. The
matching contribution for the S-SPP was suspended by Old GM in November 2008, and we reinstated the matching contribution for
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