General Motors 2010 Annual Report Download - page 37

GENERAL MOTORS COMPANY AND SUBSIDIARIES
Proceedings were recorded in Reorganization gains, net. Expenses and gains and losses directly related to the reorganization do not
constitute an element of operating loss due to their nature and due to the requirement of ASC 852 that they be reported separately. Old
GM’s balance sheet prior to the 363 Sale distinguished prepetition liabilities subject to compromise from prepetition liabilities not
subject to compromise and from postpetition liabilities.
Specific Management Initiatives
The execution of certain management initiatives is critical to achieving our goal of sustained future profitability. The following
provides a summary of these management initiatives and significant results and events.
Repayment of Debt and Reduction of Financial Leverage
Purchase of Series A Preferred Stock from the UST
In December 2010 we purchased 84 million shares of Series A Preferred Stock, held by the UST, at a price equal to 102% of the
aggregate liquidation amount, for $2.1 billion. The purchase of the UST’s Series A Preferred Stock resulted in a charge of $0.7
billion.
Contribution of Cash and Common Stock to U.S. Hourly and Salaried Pension Plans
In October 2010 we announced our intention to contribute $6.0 billion to our U.S. hourly and salaried pension plans, consisting of
$4.0 billion of cash and $2.0 billion of our common stock. In December 2010 we made the $4.0 billion cash contribution to our U.S.
hourly and salaried pension plans consisting of a $2.7 billion contribution to the U.S. hourly pension plan and a $1.3 billion
contribution to the U.S. salaried pension plan. In January 2011 we contributed 61 million shares of our common stock to our U.S.
hourly and salaried pension plans valued at $2.2 billion for funding purposes. We contributed 41 million shares of our common stock
to the U.S. hourly pension plan and 20 million shares of our common stock to the U.S. salaried pension plan.
Repayment of GM Daewoo Credit Facility
In December 2010 GM Daewoo terminated its $1.2 billion credit facility following the repayment of the remaining $1.0 billion
under the facility.
Repayment of VEBA Notes
On July 10, 2009 we entered into the VEBA Note Agreement and issued the VEBA Notes in the principal amount of $2.5 billion to
the New VEBA. In October 2010 we repaid in full the outstanding amount (together with accreted interest thereon) of the VEBA
Notes of $2.8 billion.
Repayment of UST Loans and Canadian Loan
Proceeds from the DIP Facility were necessary in order to provide sufficient capital for Old GM to operate pending the closing of
the 363 Sale. In connection with the 363 Sale, we assumed the UST Loans and Canadian Loan, which Old GM incurred under the DIP
Facility. One of our key priorities was to repay the outstanding balances from these loans prior to maturity. We also plan to use excess
cash to repay debt and reduce our financial leverage.
In April 2010, we used funds from our escrow account (described below) to repay in full the then-outstanding amount of the UST
Loans of $4.7 billion and GMCL repaid in full the then-outstanding amount of the Canadian Loan of $1.1 billion. Both loans were
repaid prior to maturity.
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