General Motors 2010 Annual Report Download - page 238

GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Payment Terms Acceleration Agreement
In October 2008 subject to Delphi obtaining an extension or other accommodation of its DIP financing through June 30, 2009, Old
GM agreed to temporarily accelerate payment of North American payables to Delphi in the three months ended June 30, 2009. In
January 2009 Old GM agreed to immediately accelerate $50 million in advances towards the temporary acceleration of North
American payables. Additionally, Old GM agreed to accelerate $150 million and $100 million of North American payables to Delphi
in March and April of 2009 bringing the total amount accelerated to the total agreed upon $300 million. Upon consummation of the
DMDA, we waived our rights to the accelerated payments that became consideration to Delphi and other parties under the DMDA.
Delphi Master Disposition Agreement
In July 2009 we, Delphi and the PBGC negotiated an agreement to be effective upon consummation of the DMDA regarding the
settlement of PBGC’s claims from the termination of the Delphi pension plans and the release of certain liens with the PBGC against
Delphi’s foreign assets. In return, the PBGC received a payment of $70 million from us and was granted a 100% interest in Class C
Membership Interests in New Delphi which provide for the PBGC to participate in predefined equity distributions. We maintain the
obligation to provide the difference between pension benefits paid by the PBGC according to regulation and those originally
guaranteed by Old GM under the Delphi Benefit Guarantee Agreements.
In October 2009 we consummated the transaction contemplated by the DMDA with Delphi, New Delphi, Old GM and other sellers
and other buyers that are party to the DMDA, as more fully described in Note 5. Upon consummation of the DMDA, the MRA was
terminated with limited exceptions, and we and Delphi waived all claims against each other under the GSA. Upon consummation of
the DMDA we settled our commitments to Delphi accrued to date except for the obligation to provide the difference between pension
benefits paid by the PBGC according to regulation and those originally guaranteed by Old GM under the Delphi Benefit Guarantee
Agreements that we continue to maintain. In addition, the DMDA establishes an ongoing commercial relationship with New Delphi.
We also agreed to continue all existing Delphi supply agreements and purchase orders for GMNA to the end of the related product
program, and New Delphi agreed to provide us with access rights designed to allow us to operate specific sites on defined triggering
events to provide us with protection of supply.
Delphi Charges
The following table summarizes charges that have been recorded with respect to the various agreements with Delphi (dollars in
millions):
Successor Predecessor
July 10, 2009
Through
December 31, 2009
January 1, 2009
Through
July 9, 2009
Year Ended
December 31, 2008
Other automotive expenses, net ....................................... $ 8 $184 $4,797
Automotive cost of sales ............................................. 193 142 555
Reorganization gains, net ............................................ — 662 —
Total Delphi charges ................................................ $201 $988 $5,352
These charges reflect the best estimate of obligations associated with the various Delphi agreements, including obligations under
the Delphi Benefit Guarantee Agreements, updated to reflect the DMDA. At July 9, 2009 these charges reflect the obligation to the
PBGC upon consummation of the DMDA, consisting of the estimated fair value of the PBGC Class C Membership Interests in New
Delphi of $317 million and the payment of $70 million due from us. Further, at July 9, 2009 these charges reflect an estimated value
of $966 million pertaining to claims we have against Delphi that were waived upon consummation of the DMDA. The estimated value
of the claims represents the excess after settlement of certain pre-existing commitments to Delphi of the fair value of Nexteer, the four
236 General Motors Company 2010 Annual Report