General Motors 2013 Annual Report Download - page 21

GENERAL MOTORS COMPANY AND SUBSIDIARIES
restructuring charges; recorded asset impairment charges at General Motors India Private Limited and Chevrolet Sales India Private
Limited (collectively GM India) and impaired our remaining goodwill in GMIO. Refer to the “GM International Operations” section
of MD&A and Notes 9, 10 and 19 to our consolidated financial statements for additional information.
Our GM Korea subsidiary has continuing litigation with more than 10,000 current and former employees over the definition of
ordinary wages. As a result of the recent Supreme Court of the Republic of Korea’s favorable decision on a very similar wage
litigation case involving another company we now believe an unfavorable outcome on our case given the new precedent is no longer
probable and we reversed certain accruals for our cases. Refer to Note 17 to our consolidated financial statements for additional
information.
GMSA
GMSA has sales, manufacturing, distribution and/or financing operations in Brazil, Argentina, Colombia, Ecuador and Venezuela
as well as sales and distribution operations in Bolivia, Chile, Paraguay, Peru and Uruguay. GMSA represented 16.4% of our
wholesale vehicle sales volume in 2013. In 2013 GMSA derived 63.5% of its wholesale vehicle sales volume from Brazil. In 2013 we
estimate we had the number one market share, based upon retail vehicle sales, in South America at 17.5% and the number three
market share, based upon retail vehicle sales, in Brazil at 17.3%. Despite foreign currency pressures and challenging political
environments across the region, our South American operations experienced continued profitability in 2013 that was driven in part by
successful product launches including the Chevrolet Onix, Prisma and Tracker. We have further addressed our cost structure through
restructuring efforts and multi-year labor agreements in Brazil.
Our Venezuelan operations highlight some of the foreign currency and political pressures. In 2013 the Venezuelan government
announced a change in the official fixed exchange rate which resulted in devaluation charges during the year. In addition to currency
controls already in place, the Venezuelan government announced pricing controls that, taken with other initiatives, require us to
closely monitor and consider our ability to manage and control our Venezuelan subsidiaries. Refer to the “GM South America”
section of MD&A for additional information.
Corporate
We continue to focus on strengthening our balance sheet. Initiatives during 2013 included lowering our cost of capital and
increased financial flexibility by issuing $4.5 billion in aggregate principal amount of senior unsecured notes. We used proceeds from
the issuance to prepay notes issued to the Canadian Health Care Trust (HCT) and to purchase 120 million shares of our Series A
Preferred Stock from the New VEBA. Refer to Notes 14 and 21 to our consolidated financial statements for additional information.
As part of an effort to release capital from non-core assets and further enhance our financial flexibility we sold our common equity
ownership in Ally Financial and our seven percent equity interest in Peugeot S.A. (PSA) held by GME. Refer to Notes 5 and 12 to our
consolidated financial statements for additional information.
The United States Treasury divested its remaining ownership stake in our common stock. Also, all of our shares of Series B
Preferred Stock mandatorily converted into 137 million shares of our common stock and will result in future annual cash preferred
stock dividend savings. Refer to Note 21 to our consolidated financial statements for additional information.
Through ongoing discussions with taxing authorities we remeasured an uncertain tax position resulting in a tax benefit that will
reduce future cash taxes.
Our collective actions during 2013 have helped us achieve investment grade status with a rating agency and we were added to the
Standard & Poor’s (S&P) 500.
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