General Motors 2011 Annual Report Download - page 129

GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(a) GM Financial credit facilities and securitization notes payable are based on expected payoff date. Senior notes and convertible
senior notes principal amounts are based on maturity.
At December 31, 2011 future interest payments on automotive capital lease obligations were $755 million. GM Financial does not
have capital lease obligations at December 31, 2011.
Old GM
Secured Revolving Credit Facility, U.S. Term Loan and Secured Credit Facility
In March 2009 Old GM entered into an agreement to amend its $1.5 billion U.S. term loan. Because the terms of the amended U.S.
term loan were substantially different than the original terms, due primarily to the revised borrowing rate, Old GM accounted for the
amendment as a debt extinguishment. As a result, Old GM recorded the amended U.S. term loan at fair value and recorded a gain on
the extinguishment of the original loan facility of $906 million in the period January 1, 2009 through July 9, 2009.
In connection with the relief sought under U.S. bankruptcy laws (Chapter 11 Proceedings), Old GM’s $4.5 billion secured
revolving credit facility, $1.5 billion U.S. term loan and $125 million secured credit facility were paid in full on June 30, 2009. Old
GM recorded a loss of $958 million in Reorganization gains, net related to the extinguishments of the debt due primarily to the face
value of the U.S. term loan exceeding the carrying amount.
Contractual interest expense not accrued or recorded on pre-petition debt was $200 million in the period January 1, 2009 through
July 9, 2009 (includes contractual interest expense related to contingent convertible debt of $44 million).
Contingent Convertible Debt
Old GM adopted the provisions of ASC 470-20, “Debt with Conversion and Other Options” (ASC 470-20) in January 2009, with
retrospective application to prior periods. At July 9, 2009 Old GM’s contingent convertible debt outstanding was $7.4 billion,
comprised of principal of $7.9 billion and unamortized discounts of $551 million. Upon adoption of ASC 470-20, the effective
interest rate on Old GM’s outstanding contingent convertible debt ranged from 7.0% to 7.9%. In connection with the 363 Sale, MLC
retained the contingent convertible debt.
The following table summarizes the components of interest expense related to contingent convertible debt (dollars in millions):
Predecessor
January 1, 2009
Through
July 9, 2009
Interest accrued or paid (a) ......................................................................... $176
Amortizationofdiscounts.......................................................................... 51
Interest expense .................................................................................. $227
(a) Contractual interest expense not accrued or recorded on pre-petition debt as a result of the Chapter 11 Proceedings totaled $44
million in the period January 1, 2009 through July 9, 2009.
General Motors Company 2011 Annual Report 127