General Motors 2012 Annual Report Download - page 147

GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
In some instances certain assets of the party whose debt or performance we have guaranteed may offset, to some degree, the cost of
the guarantee. The offset of certain of our payables to guaranteed parties may also offset certain guarantees, if triggered. At
December 31, 2012 any proceeds we would receive from collateral would be approximately $60 million.
In connection with certain divestitures of assets or operating businesses, we have entered into agreements indemnifying certain
buyers and other parties with respect to environmental conditions and other closure costs pertaining to real property we owned. We
periodically enter into agreements that incorporate indemnification provisions in the normal course of business. It is not possible to
estimate our maximum exposure under these indemnifications or guarantees due to the conditional nature of these obligations.
Immaterial amounts have been recorded for such obligations as the majority of them are not probable or estimable at this time and the
fair value of the guarantees at issuance was insignificant.
In addition to the guarantees and indemnifying agreements previously discussed, we indemnify dealers for certain product liability
related claims as subsequently discussed.
With respect to other product-related claims involving products manufactured by certain joint ventures, we believe that costs
incurred are adequately covered by recorded accruals. These guarantees terminate in years ranging from 2020 to 2026.
Credit Card Programs
Credit card programs offer rebates that can be applied primarily against the purchase or lease of our vehicles.
Environmental Liability
Automotive operations, like operations of other companies engaged in similar businesses, are subject to a wide range of
environmental protection laws, including laws regulating air emissions, water discharges, waste management and environmental
remediation. We are in various stages of investigation or remediation for sites where contamination has been alleged. We are involved
in a number of actions to remediate hazardous wastes as required by federal and state laws. Such statutes require that responsible
parties fund remediation actions regardless of fault, legality of original disposal or ownership of a disposal site.
The future effect of environmental matters, including potential liabilities, is often difficult to estimate. An environmental reserve is
recorded when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated. This
practice is followed whether the claims are asserted or unasserted. Recorded liabilities are not reduced for possible recoveries from
insurance carriers or other parties. Liabilities have been recorded for the expected costs to be paid over the periods of remediation for
the applicable sites, which typically range from five to 30 years.
For many sites, the remediation costs and other damages for which we ultimately may be responsible may vary because of
uncertainties with respect to factors such as the connection to the site or to materials there, the involvement of other potentially
responsible parties, the application of laws and other standards or regulations, site conditions and the nature and scope of
investigations, studies and remediation to be undertaken (including the technologies to be required and the extent, duration and
success of remediation).
The final outcome of environmental matters cannot be predicted with certainty at this time. Subsequent adjustments to initial
estimates are recorded as necessary based upon additional information obtained. In future periods, new laws or regulations, advances
in remediation technologies and additional information about the ultimate remediation methodology to be used could significantly
change our estimates. It is possible that the resolution of one or more environmental matters could exceed the amounts accrued in an
amount that could be material to our financial condition, results of operations and cash flows. At December 31, 2012 we estimate the
remediation losses could range from $130 million to $250 million.
General Motors Company 2012 ANNUAL REPORT144