General Motors 2011 Annual Report Download - page 82

GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Nature of Operations
General Motors Company was formed in 2009 originally as a Delaware limited liability company, Vehicle Acquisition Holdings
LLC, and subsequently converted to a Delaware corporation, NGMCO, Inc. This company, which on July 10, 2009 acquired
substantially all of the assets and assumed certain liabilities of General Motors Corporation (363 Sale) and changed its name to
General Motors Company, is sometimes referred to in these consolidated financial statements for the periods on or subsequent to
July 10, 2009 as “we,” “our,” “us,” “ourselves,” the “Company,” “General Motors,” or “GM,” and is the successor entity solely for
accounting and financial reporting purposes (Successor). General Motors Corporation is sometimes referred to in these consolidated
financial statements, for the periods on or before July 9, 2009, as “Old GM.” Prior to July 10, 2009 Old GM operated the business of
the Company, and pursuant to the agreement with the Securities and Exchange Commission (SEC), as described in a no-action letter
issued to Old GM by the SEC Staff on July 9, 2009 regarding our filing requirements and those of Motors Liquidation Company
(MLC), the accompanying consolidated financial statements include the financial statements and related information of Old GM as it
is the predecessor entity solely for accounting and financial reporting purposes (Predecessor). On July 10, 2009 in connection with the
363 Sale, General Motors Corporation changed its name to Motors Liquidation Company. On December 15, 2011 MLC was dissolved
and the Motors Liquidation Company GUC Trust (GUC Trust) assumed responsibility for the affairs of and certain claims against
MLC and its debtor subsidiaries that were not concluded prior to MLC’s dissolution. MLC transferred to the GUC Trust all of MLC’s
remaining undistributed shares of our common stock and warrants to acquire our common stock.
We design, build and sell cars, trucks and automobile parts worldwide. We also provide automotive financing services through
General Motors Financial Company, Inc. (GM Financial).
We analyze the results of our business through our five segments: GM North America (GMNA), GM Europe (GME),
GM International Operations (GMIO), GM South America (GMSA) and GM Financial. Nonsegment operations are classified as
Corporate. Corporate includes investments in Ally Financial, Inc. (Ally Financial), certain centrally recorded income and costs, such
as interest, income taxes and corporate expenditures and certain nonsegment specific revenues and expenses.
Note 2. Basis of Presentation
Principles of Consolidation
The consolidated financial statements include our accounts and those of our subsidiaries that we control due to ownership of a
majority voting interest. These also include the accounts of the variable interest entities (VIEs) of which we are the primary
beneficiary. We continually evaluate our involvement with VIEs to determine whether we have variable interests and are the primary
beneficiary of the VIE. When these criteria are met, we are required to consolidate the VIE. Our share of earnings or losses of
nonconsolidated affiliates is included in our consolidated operating results using the equity method of accounting when we are able to
exercise significant influence over the operating and financial decisions of the affiliate. We use the cost method of accounting if we
are not able to exercise significant influence over the operating and financial decisions of the affiliate. All intercompany balances and
transactions have been eliminated in consolidation. Old GM utilized the same principles of consolidation in its consolidated financial
statements.
Use of Estimates in the Preparation of the Financial Statements
The consolidated financial statements are prepared in conformity with U.S. GAAP, which requires the use of estimates, judgments,
and assumptions that affect the amounts of assets and liabilities at the reporting date and the amounts of revenue and expenses in the
periods presented. We believe that the accounting estimates employed are appropriate and the resulting balances are reasonable;
however, due to the inherent uncertainties in making estimates actual results could differ from the original estimates, requiring
adjustments to these balances in future periods.
80 General Motors Company 2011 Annual Report