General Motors 2011 Annual Report Download - page 50

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GENERAL MOTORS COMPANY AND SUBSIDIARIES
(3) proceeds from the EDC Loan Facility of $2.4 billion; (4) proceeds from the German Facility of $1.0 billion; (5) proceeds from the
issuance of long-term debt of $0.3 billion; (6) proceeds from the Receivables Program of $0.3 billion; partially offset by (7) payments
on other debt of $6.1 billion; (8) a net decrease in short-term debt of $2.4 billion; and (9) cash of $1.2 billion MLC retained as part of
the 363 Sale.
Free Cash Flow
Management believes free cash flow provides meaningful supplemental information regarding the liquidity of our automotive
operations and its ability to generate sufficient cash flow above those required in our business to sustain our operations. We measure
free cash flow as cash flow from operations adjusted for capital expenditures. While management believes that free cash flow
provides useful information, it is not an operating measure under U.S. GAAP, and there are limitations associated with its use. Our
calculation of free cash flow may not be completely comparable to similarly titled measures of other companies due to potential
differences between companies in the method of calculation. As a result the use of free cash flow has limitations and should not be
considered in isolation from, or as a substitute for, other measures such as cash flows from operating activities. Due to these
limitations, free cash flow is used as a supplement to U.S. GAAP measures. The following table summarizes free cash flow (dollars in
millions):
Successor
Year Ended
December 31, 2011
Year Ended
December 31, 2010
Operating cash flow ............................................................. $7,429 $ 6,589
Less: capital expenditures ......................................................... (6,241) (4,200)
Free cash flow .................................................................. $1,188 $ 2,389
Other Liquidity Issues
Status of Credit Ratings
We have been assigned initial ratings by four independent credit rating agencies: Dominion Bond Rating Services (DBRS), Fitch,
Moody’s and S&P.
DBRS, Moody’s, Fitch and S&P currently rate our corporate credit at non-investment grade. The following table summarizes our
credit ratings at February 15, 2012:
Rating Agency Corporate
Secured Revolving
Credit Facility
Senior
Unsecured Outlook
DBRS . . . . . . . . . . . . . . . . BB (high) BBB (low) N/A Stable
Fitch . . . . . . . . . . . . . . . . . BB BBB- N/A Positive
Moody’s . . . . . . . . . . . . . . Ba1 Baa2 N/A Positive
S&P . . . . . . . . . . . . . . . . . BB+ BBB N/A Stable
Rating actions taken by each of the credit rating agencies from January 1, 2011 through February 15, 2012 were as follows:
DBRS: November 2011 — Upgraded corporate rating to BB (high) from BB.
Fitch: October 2011 — Upgraded corporate rating to BB from BB- and upgraded secured revolving credit facility rating to BBB-
from BB+. Outlook revised to positive from stable.
Moody’s: October 2011 — Upgraded corporate rating to Ba1 from Ba2 and upgraded secured revolving credit facility rating to
Baa2 from Baa3. Outlook revised to positive from stable.
48 General Motors Company 2011 Annual Report