General Motors 2010 Annual Report Download - page 224

GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Refer to Note 24 for additional information on the fair value measurements of our derivative instruments. Refer to Note 4 for
additional information on our derivatives accounting policy.
Counterparty Credit Risk
Derivative financial instruments contain an element of credit risk attributable to the counterparties’ ability to meet the terms of the
agreements. Since August 2010 we executed new agreements with counterparties that will require, under certain circumstances, that
the counterparty post collateral with us for net asset positions. At December 31, 2010 we held collateral of $74 million from
counterparties and recorded the related obligation in Accrued liabilities. The maximum amount of loss due to credit risk that we
would incur if the counterparties to the derivative instruments failed completely to perform according to the terms of the contract was
$143 million at December 31, 2010. Agreements are entered into with counterparties that allow the set-off of certain exposures in
order to manage the risk. At December 31, 2010 the total net derivative asset position for all counterparties with which we were in a
net asset position, less the collateral we held, was $108 million.
At December 31, 2010 a majority of all derivative counterparty exposures were with counterparties that were rated A or higher.
Credit Risk Related Contingent Features
Certain of our agreements with counterparties require that we provide cash collateral for net liability positions that we may have
with such counterparty. At December 31, 2010 no collateral was posted related to derivative instruments, and we did not have any
agreements with counterparties to derivative instruments containing covenants requiring the maintenance of certain credit rating levels
or credit risk ratios that would require the posting of collateral in the event that such covenants are violated.
Fair Value of Derivatives
The following table summarizes the fair value of our derivative instruments (dollars in millions):
Successor
December 31, 2010 December 31, 2009
Asset
Derivatives (a)(b)
Liability
Derivatives (c)(d)
Asset
Derivatives (a)(b)
Liability
Derivatives (c)(d)
Derivative Instruments
Current Portion
Foreign currency exchange .................................. $ 80 $113 $104 $568
Commodity .............................................. 93 2 11 —
Total current portion ....................................... $173 $115 $115 $568
Non-Current Portion
Foreign currency exchange .................................. $ — $ — $ 19 $146
Commodity .............................................. — 7 — —
Warrants ................................................. 44 — 25 —
Total non-current portion .................................... $ 44 $ 7 $ 44 $146
(a) Current portion recorded in Other current assets and deferred income taxes
(b) Non-current portion recorded in Other assets.
(c) Current portion recorded in Accrued liabilities.
(d) Non-current portion recorded in Other liabilities and deferred income taxes.
222 General Motors Company 2010 Annual Report