General Motors 2011 Annual Report Download - page 110

GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Interests issued and outstanding. The sale terminated any direct and indirect obligation to loan New Delphi up to $500 million under a
term loan facility established in October 2009 when New Delphi was created and the Class A Membership Interests were issued. New
Delphi had not borrowed under this loan facility. In March 2011 we recorded a gain of $1.6 billion related to the sale in Equity
income, net of tax and gain on disposal of investments. Our existing supply contracts with New Delphi were not affected by this
transaction.
Impairment of Investment in HKJV
In March 2011 there was a change in the local tax regulations which significantly extended the period of time over which GM India
will receive certain value added tax based investment incentives. The delay in recovery of these incentives significantly affected GM
India’s cash flow and earnings before interest and income taxes forecasts, resulting in a decrease in the fair value of HKJV. The fair
value of our investment in HKJV at March 31, 2011 was determined to be $112 million compared to a carrying amount of $151
million. The loss in value was determined to be other than temporary and, therefore, we recorded an impairment charge of $39 million
in the three months ended March 31, 2011. In addition we recorded other charges totaling $67 million related to our investment in the
HKJV in the three months ended March 31, 2011. Refer to Note 4 for additional information related to HKJV.
VMM Deconsolidation
In June 2011 we entered into a new shareholder agreement with Fiat Powertrain Technologies SPA related to VM Motori (VMM)
in Italy. Under the new shareholder agreement, we retain 50% ownership but no longer have control. Accordingly, we removed the
assets and liabilities of VMM, which included allocated goodwill of $36 million from our GME reporting unit, from our consolidated
balance sheets and recorded an equity interest in the amount of $46 million.
Investment in and Summarized Financial Data of Nonconsolidated Affiliates
The following table summarizes the carrying amount of investments in nonconsolidated affiliates (dollars in millions):
Successor
December 31, 2011 December 31, 2010
China JVs ..................................................................... $6,452 $6,133
New Delphi .................................................................... — 2,043
Otherinvestments ............................................................... 338 353
Total equity in net assets of nonconsolidated affiliates .................................. $6,790 $8,529
At December 31, 2011 and 2010 the carrying amount of our investments in certain joint ventures exceeded our share of the
underlying net assets by $3.8 billion. These differences are primarily related to the application of fresh-start reporting, of which $3.3
billion was allocated to goodwill and the remainder was allocated to the underlying assets and liabilities, primarily intangibles, and are
being amortized over their useful lives.
108 General Motors Company 2011 Annual Report