General Motors 2010 Annual Report Download - page 228

GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Cash Flow Hedges
Old GM previously designated certain financial instruments as cash flow hedges to manage its exposure to certain foreign currency
exchange risks. For foreign currency transactions, Old GM typically hedged forecasted exposures for up to three years in the future.
For foreign currency exposure on long-term debt, Old GM typically hedged exposures for the life of the debt.
On October 1, 2008 Old GM ceased hedge accounting treatment for derivatives that were previously designated as qualifying cash
flow hedges. Subsequent to that date Old GM recorded gains and losses arising from changes in the fair value of the derivative
instruments in earnings, resulting in a net gain of $157 million in the three months ended December 31, 2008. This gain was recorded
in Automotive sales and Automotive cost of sales in the amounts of $127 million and $30 million.
The following table summarizes financial statement classification and amounts reclassified from Accumulated other comprehensive
income (loss) into earnings related to effective cash flow hedging relationships (dollars in millions):
Predecessor
Gain (Loss) Reclassified Gain (Loss) Reclassified
January 1, 2009
Through
July, 9, 2009
Year Ended
December 31, 2008
Automotive sales ........................................................... $(351) $198
Automotive cost of sales ..................................................... 19 205
Reorganization gains, net .................................................... 247 —
Total gains (losses) reclassified from accumulated other comprehensive income (loss) .... $ (85) $403
Hedge ineffectiveness related to instruments designated as cash flow hedges was insignificant in the year ended December 31,
2008.
In connection with the Chapter 11 Proceedings, at June 1, 2009 Accumulated other comprehensive income (loss) balances of
$247 million associated with previously designated financial instruments were reclassified into Reorganization gains, net because the
underlying forecasted debt and interest payments were probable not to occur.
The following table summarizes gains and (losses) that were reclassified from Accumulated other comprehensive income (loss) for
cash flow hedges associated with previously forecasted transactions that subsequently became probable not to occur (dollars in
millions):
Predecessor
Gain (Loss) Reclassified
January 1, 2009
Through
July 9, 2009
Automotive sales ........................................................................... $(182)
Reorganization gains, net ..................................................................... 247
Total gains (losses) reclassified from accumulated other comprehensive income (loss) .................... $ 65
226 General Motors Company 2010 Annual Report