General Motors 2012 Annual Report Download - page 58

GENERAL MOTORS COMPANY AND SUBSIDIARIES
Dividends
The declaration of any dividend on our common stock is a matter to be acted upon by our Board of Directors in its sole discretion.
Since our formation we have not paid any dividends on our common stock and have no current plans to pay any dividends on our
common stock. Our payment of dividends on our common stock in the future, if any, will be determined by our Board of Directors in
its sole discretion out of funds legally available for that purpose and will depend on business conditions, our financial condition,
earnings, liquidity and capital requirements, the covenants in our debt instruments and other factors.
So long as any share of our Series A or B Preferred Stock remains outstanding, no dividend or distribution may be declared or paid
on our common stock unless all accrued and unpaid dividends have been paid on our Series A and B Preferred Stock, subject to
exceptions, such as dividends on our common stock payable solely in shares of our common stock. Our secured revolving credit
facilities contain certain restrictions on our ability to pay dividends, subject to exceptions, such as dividends payable solely in shares
of our common stock. So long as any share of our Series A Preferred Stock remains outstanding, no dividend or distribution may be
declared or paid on our Series B Preferred Stock unless all accrued and unpaid dividends have been paid on our Series A Preferred
Stock, subject to exceptions, such as dividends on our Series B Preferred Stock solely in shares of our common stock.
The following table summarizes dividends paid on our Series A and B Preferred Stock (dollars in millions):
Years Ended December 31,
2012 2011 2010
Series A Preferred Stock (a) ....................................................... $621 $621 $810
Series B Preferred Stock (b) ....................................................... 238 243 —
Total Preferred Stock dividends paid ................................................ $859 $864 $810
(a) Does not include the $677 million charge related to the purchase of 84 million shares of Series A Preferred Stock from the UST
in the year ended December 31, 2010.
(b) Cumulative unpaid dividends on our Series B Preferred Stock was $20 million, $20 million and $25 million at December 31,
2012, 2011 and 2010.
Critical Accounting Estimates
The consolidated financial statements are prepared in conformity with U.S. GAAP, which require the use of estimates, judgments
and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date
of the financial statements, and the reported amounts of revenues and expenses in the periods presented. We believe that the
accounting estimates employed are appropriate and resulting balances are reasonable; however, due to inherent uncertainties in
making estimates actual results could differ from the original estimates, requiring adjustments to these balances in future periods. We
have discussed the development, selection and disclosures of our critical accounting estimates with the Audit Committee of the Board
of Directors, and the Audit Committee has reviewed the disclosures relating to these estimates.
The critical accounting estimates that affect the consolidated financial statements and that use judgments and assumptions are listed
below. In addition the likelihood that materially different amounts could be reported under varied conditions and assumptions is
discussed.
Pensions
The defined benefit pension plans are accounted for on an actuarial basis, which requires the selection of various assumptions,
including an expected long-term rate of return on plan assets and a discount rate. The expected return on U.S. plan assets that is
utilized in determining pension expense is derived from periodic studies, which include a review of asset allocation strategies,
anticipated future long-term performance of individual asset classes, risks using standard deviations and correlations of returns among
General Motors Company 2012 ANNUAL REPORT 55