General Motors 2013 Annual Report Download - page 49

GENERAL MOTORS COMPANY AND SUBSIDIARIES
dealer inventory eligible for the incentive program is determined and a reduction of Automotive net sales and revenue or increase to
Automotive cost of sales is recorded in the period in which the program is announced. If the actual number of affected vehicles differs
from this estimate, or if a different mix of incentives is actually paid, the reduction in Automotive net sales and revenue or increase to
Automotive cost of sales for sales incentives could be affected. There are a multitude of inputs affecting the calculation of the estimate
for sales incentives, and an increase or decrease of any of these variables could have a significant effect on recorded sales incentives.
Policy, Product Warranty and Recall Campaigns
The estimated costs related to policy and product warranties are accrued at the time products are sold. Estimated costs related to
product recalls based on a formal campaign soliciting return of that product are accrued when they are deemed to be probable and can
be reasonably estimated. These estimates are established using historical information on the nature, frequency and average cost of
claims of each vehicle line or each model year of the vehicle line and assumptions about future activity and events. However where
little or no claims experience exists for a model year or a vehicle line, the estimate is based on comparable models. Revisions are
made when necessary based on changes in these factors. These estimates are re-evaluated on an ongoing basis. We actively study
trends of claims and take action to improve vehicle quality and minimize claims. Actual experience could differ from the amounts
estimated requiring adjustments to these liabilities in future periods. Due to the uncertainty and potential volatility of the factors
contributing to developing estimates, changes in our assumptions could materially affect our results of operations.
Accounting Standards Not Yet Adopted
Accounting standards not yet adopted are discussed in Note 2 to our consolidated financial statements.
Forward-Looking Statements
In this report and in reports we subsequently file and have previously filed with the SEC on Forms 10-K and 10-Q and file or
furnish on Form 8-K, and in related comments by our management, we use words like “anticipate,” “approximately,” “believe,”
“continue,” “could,” “designed,” “effect,” “estimate,” “evaluate,” “expect,” “forecast,” “goal,” “initiative,” “intend,” “may,”
“objective,” “outlook,” “plan,” “potential,” “priorities,” “project,” “pursue,” “seek,” “should,” “target,” “when,” “would,” or the
negative of any of those words or similar expressions to identify forward-looking statements that represent our current judgment about
possible future events. In making these statements we rely on assumptions and analyses based on our experience and perception of
historical trends, current conditions and expected future developments as well as other factors we consider appropriate under the
circumstances. We believe these judgments are reasonable, but these statements are not guarantees of any events or financial results,
and our actual results may differ materially due to a variety of important factors, both positive and negative. These factors, which may
be revised or supplemented in subsequent reports on SEC Forms 10-Q and 8-K, include among others the following:
• Our ability to realize production efficiencies and to achieve reductions in costs as a result of our restructuring initiatives and
labor modifications;
• Our ability to maintain quality control over our vehicles and avoid material vehicle recalls;
• Our ability to maintain adequate liquidity and financing sources including as required to fund our planned significant
investment in new technology;
• Our ability to realize successful vehicle applications of new technology;
• Shortages of and increases or volatility in the price of oil, including as a result of political instability in the Middle East and
African nations;
• Our ability to continue to attract customers, particularly for our new products, including cars and crossover vehicles;
• Availability of adequate financing on acceptable terms to our customers, dealers, distributors and suppliers to enable them to
continue their business relationships with us;
47