General Motors 2010 Annual Report Download - page 226

GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Other Derivatives
In September 2009 in connection with an agreement with American Axle, we received warrants to purchase 4 million shares of
American Axle common stock exercisable at $2.76 per share. Gains and losses related to these warrants were recorded in Interest
income and other non-operating income, net. At December 31, 2010 the fair value of these warrants was $44 million. In February
2011 we exercised the warrants and sold the shares and received proceeds of $48 million.
In connection with our investment in New Delphi, which we account for using the equity method, we record our share of New
Delphi’s Other comprehensive income (loss) in Accumulated other comprehensive income (loss). In the years ended December 31,
2010 and 2009 we recorded cash flow hedge losses of $22 million and $1 million related to our share of New Delphi’s hedging losses.
Automotive Financing
GM Financial is exposed to market risks arising from adverse changes in interest rates due to floating interest rate exposure on its
credit facilities and on certain securitization notes payable.
The effect of derivative instruments on earnings and Accumulated other comprehensive income was insignificant for the three
months ended December 31, 2010.
The following table summarizes interest rate swaps, caps and foreign currency exchange derivatives (dollars in millions):
Successor
December 31, 2010
Notional Fair Value
Assets (a)
Interest rate swaps ........................................................................... $1,227 $23
Interest rate caps ............................................................................. 946 8
Total assets ................................................................................. $2,173 $31
Liabilities (b)
Interest rate swaps ........................................................................... $1,227 $47
Interest rate caps ............................................................................. 832 8
Foreign currency exchange (c) .................................................................. 49 2
Total liabilities .............................................................................. $2,108 $57
(a) Recorded in GM Financial Other assets.
(b) Recorded in GM Financial Other liabilities.
(c) Notional has been translated from Canadian dollars to U.S. dollars at the December 31, 2010 rate.
Credit Risk Related Contingent Features
Under the terms of our derivative financial instruments, GM Financial is required to pledge certain funds to be held in restricted
cash accounts as collateral for the outstanding derivative transactions. As of December 31, 2010, these restricted cash accounts totaled
$33 million and are included in GM Financial Restricted cash.
224 General Motors Company 2010 Annual Report