General Motors 2010 Annual Report Download - page 78

GENERAL MOTORS COMPANY AND SUBSIDIARIES
consistent with good business judgment and the intent of the commitment. This covenant survived our repayment of the UST Loans and
remains in effect through December 31, 2014 unless the UST receives total proceeds from debt repayments, dividends, interest, preferred
stock redemptions and common stock sales equal to the total dollar amount of all UST invested capital.
UST invested capital totaled $49.5 billion, representing the cumulative amount of cash received by Old GM from the UST under
the UST Loan Agreement and the DIP Facility, excluding $361 million which the UST loaned to Old GM under the warranty program
and which was repaid on July 10, 2009. This balance also did not include amounts advanced under the UST Ally Financial Loan as
the UST exercised its option to convert this loan into Ally Financial Preferred Membership Interests previously held by Old GM in
May 2009. At December 31, 2010 the UST had received cumulative proceeds of $23.1 billion from debt repayments, interest
payments, Series A Preferred Stock dividends, sales of our common stock and Series A Preferred Stock redemption. The UST’s
invested capital less proceeds received totals $26.4 billion.
To the extent we fail to comply with any of the covenants in the UST Credit Agreement that continue to apply to us, the UST is
entitled to seek specific performance and the appointment of a court-ordered monitor acceptable to the UST (at our sole expense) to
ensure compliance with those covenants.
Refer to Note 19 to our consolidated financial statements for additional details on the UST Loans.
Canadian Loan
On July 10, 2009, through our wholly-owned subsidiary GMCL, we entered into the Canadian Loan Agreement and assumed a
CAD $1.5 billion (equivalent to $1.3 billion when entered into) term loan maturing on July 10, 2015. In November 2009 we signed an
amendment to the Canadian Loan Agreement to provide for quarterly repayments of the Canadian Loan. Under this amendment, we
agreed to make quarterly repayments of $192 million to EDC. In December 2009 and March 2010 we made quarterly payments of
$192 million and $194 million on the Canadian Loan. In April 2010, GMCL repaid in full the outstanding amount of the Canadian
Loan of $1.1 billion. The Canadian Loan was repaid prior to maturity. GMCL cannot reborrow under the Canadian Loan Agreement.
The Canadian Loan accrued interest at the greater of the three-month Canadian Dealer Offered Rate or 2.0%, plus 5.0% per annum.
Accrued interest was payable quarterly. At December 31, 2009 the Canadian Loan accrued interest at 7.0%.
The Canadian Loan Agreement and related agreements include certain covenants requiring GMCL to meet certain annual Canadian
production volumes expressed as ratios to total overall production volumes in the U.S. and Canada and to overall production volumes
in the North American Free Trade Agreement (NAFTA) region. The targets cover vehicles and specified engine and transmission
production in Canada. These agreements also include covenants on annual GMCL capital expenditures and research and development
expenses. In the event a material adverse change occurs that makes the fulfillment of these covenants non-economic (other than a
material adverse change caused by the actions or inactions of GMCL), the lender will consider adjustments to mitigate the business
effect of the material adverse change. These covenants survive GMCL’s repayment of the loans and certain of the covenants have
effect through December 31, 2016.
Refer to Note 19 to our consolidated financial statements for additional details on the Canadian Loan.
The following table summarizes the total funding and funding commitments we repaid to the U.S. and Canadian governments in the
year ended December 31, 2010 (dollars in millions):
Successor
January 1, 2010
Beginning
Balance
Change in Funding
and Funding
Commitments (a)
December 31, 2010
Total Obligation
Description of Funding Commitment
UST Loan ........................................................ $5,712 $(5,712) $—
Canadian Loan .................................................... 1,233 (1,233) —
Total ............................................................ $6,945 $(6,945) $—
(a) Includes an increase due to a foreign currency exchange loss on the Canadian loan of $56 million.
76 General Motors Company 2010 Annual Report