Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
This MD&A should be read in conjunction with the accompanying audited consolidated financial statements and notes. Forward-looking statements in this MD&A are not guarantees of future performance and may involve risks and uncertainties that could cause actual results to differ materially from those projected. Refer to the "Forward-Looking Statements" section of this MD&A and Part I, Item 1A. Risk Factors for a discussion of these risks and uncertainties. The discussion of our financial condition and results of operations for the year ended December 31, 2018 included in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2019 is incorporated by reference into this MD&A.
Non-GAAP Measures Unless otherwise indicated, our non-GAAP measures discussed in this MD&A are related to our continuing operations and not our discontinued operations. Our non-GAAP measures include: earnings before interest and taxes (EBIT)-adjusted, presented net of noncontrolling interests; earnings before income taxes (EBT)-adjusted for our GM Financial segment; earnings per share (EPS)-diluted-adjusted; effective tax rate-adjusted (ETR-adjusted); return on invested capital-adjusted (ROIC-adjusted) and adjusted automotive free cash flow. Our calculation of these non-GAAP measures may not be comparable to similarly titled measures of other companies due to potential differences between companies in the method of calculation. As a result, the use of these non-GAAP measures has limitations and should not be considered superior to, in isolation from, or as a substitute for, related U.S. GAAP measures.
These non-GAAP measures allow management and investors to view operating trends, perform analytical comparisons and benchmark performance between periods and among geographic regions to understand operating performance without regard to items we do not consider a component of our core operating performance. Furthermore, these non-GAAP measures allow investors the opportunity to measure and monitor our performance against our externally communicated targets and evaluate the investment decisions being made by management to improve ROIC-adjusted. Management uses these measures in its financial, investment and operational decision-making processes, for internal reporting and as part of its forecasting and budgeting processes. Further, our Board of Directors uses certain of these and other measures as key metrics to determine management performance under our performance-based compensation plans. For these reasons we believe these non-GAAP measures are useful for our investors.
GENERAL MOTORS COMPANY AND SUBSIDIARIES
EBIT-adjusted EBIT-adjusted is presented net of noncontrolling interests and is used by management and can be used by investors to review our consolidated operating results because it excludes automotive interest income, automotive interest expense and income taxes as well as certain additional adjustments that are not considered part of our core operations. Examples of adjustments to EBIT include but are not limited to impairment charges on long-lived assets and other exit costs resulting from strategic shifts in our operations or discrete market and business conditions; costs arising from the ignition switch recall and related legal matters; and certain currency devaluations associated with hyperinflationary economies. For EBIT-adjusted and our other non-GAAP measures, once we have made an adjustment in the current period for an item, we will also adjust the related non-GAAP measure in any future periods in which there is an impact from the item. Our corresponding measure for our GM Financial segment is EBT-adjusted because interest income and interest expense are part of operating results when assessing and measuring the operational and financial performance of the segment.
EPS-diluted-adjusted EPS-diluted-adjusted is used by management and can be used by investors to review our consolidated diluted EPS results on a consistent basis. EPS-diluted-adjusted is calculated as net income attributable to common stockholders-diluted less income (loss) from discontinued operations on an after-tax basis, adjustments noted above for EBIT-adjusted and certain income tax adjustments divided by weighted-average common shares outstanding-diluted. Examples of income tax adjustments include the establishment or reversal of significant deferred tax asset valuation allowances.
ETR-adjusted ETR-adjusted is used by management and can be used by investors to review the consolidated effective tax rate for our core operations on a consistent basis. ETR-adjusted is calculated as Income tax expense less the income tax related to the adjustments noted above for EBIT-adjusted and the income tax adjustments noted above for EPS-diluted-adjusted divided by Income before income taxes less adjustments. When we provide an expected adjusted effective tax rate, we do not provide an expected effective tax rate because the U.S. GAAP measure may include significant adjustments that are difficult to predict.
ROIC-adjusted ROIC-adjusted is used by management and can be used by investors to review our investment and capital allocation decisions. We define ROIC-adjusted as EBIT-adjusted for the trailing four quarters divided by ROIC-adjusted average net assets, which is considered to be the average equity balances adjusted for average automotive debt and interest liabilities, exclusive of finance leases; average automotive net pension and other postretirement benefits (OPEB) liabilities; and average automotive net income tax assets during the same period.
Adjusted automotive free cash flow Adjusted automotive free cash flow is used by management and can be used by investors to review the liquidity of our automotive operations and to measure and monitor our performance against our capital allocation program and evaluate our automotive liquidity against the substantial cash requirements of our automotive operations. We measure adjusted automotive free cash flow as automotive operating cash flow from continuing operations less capital expenditures adjusted for management actions. Management actions can include voluntary events such as discretionary contributions to employee benefit plans or nonrecurring specific events such as a closure of a facility that are considered special for EBIT-adjusted purposes. Refer to the “Liquidity and Capital Resources” section of this MD&A for additional information.
GENERAL MOTORS COMPANY AND SUBSIDIARIES
The following table reconciles Net income attributable to stockholders under U.S. GAAP to EBIT-adjusted:
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|
|
|
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|
|
Years Ended December 31,
|
|
2020
|
|
2019
|
|
2018
|
Net income attributable to stockholders
|
$
|
6,427
|
|
|
$
|
6,732
|
|
|
$
|
8,014
|
|
Loss from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
70
|
|
Income tax expense
|
1,774
|
|
|
769
|
|
|
474
|
|
|
|
|
|
|
|
Automotive interest expense
|
1,098
|
|
|
782
|
|
|
655
|
|
Automotive interest income
|
(241)
|
|
|
(429)
|
|
|
(335)
|
|
Adjustments
|
|
|
|
|
|
GMI restructuring(a)
|
683
|
|
|
—
|
|
|
1,138
|
|
Ignition switch recall and related legal matters(b)
|
(130)
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|
|
—
|
|
|
440
|
|
Cadillac dealer strategy(c)
|
99
|
|
|
—
|
|
|
—
|
|
Transformation activities(d)
|
—
|
|
|
1,735
|
|
|
1,327
|
|
GM Brazil indirect tax recoveries(e)
|
—
|
|
|
(1,360)
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|
|
—
|
|
FAW-GM divestiture(f)
|
—
|
|
|
164
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|
|
—
|
|
|
|
|
|
|
|
Total adjustments
|
652
|
|
|
539
|
|
|
2,905
|
|
EBIT-adjusted
|
$
|
9,710
|
|
|
$
|
8,393
|
|
|
$
|
11,783
|
|
________
(a)These adjustments were excluded because of a strategic decision to rationalize our core operations by exiting or significantly reducing our presence in various international markets to focus resources on opportunities expected to deliver higher returns. The adjustments primarily consist of dealer restructurings, asset impairments, inventory provisions and employee separation charges in Australia, New Zealand, Thailand and India in the year ended December 31, 2020 and employee separation charges, asset impairments and supplier claims in Korea in the year ended December 31, 2018.
(b)These adjustments were excluded because of the unique events associated with the ignition switch recall, which included various investigations, inquiries and complaints from constituents.
(c)This adjustment was excluded because it relates to strategic activities to transition certain Cadillac dealers from the network as part of Cadillac's electric vehicle strategy.
(d)These adjustments were excluded because of a strategic decision to accelerate our transformation for the future to strengthen our core business, capitalize on the future of personal mobility, and drive significant cost efficiencies. The adjustments primarily consist of accelerated depreciation, supplier-related charges, pension and other curtailment charges and employee-related separation charges in the year ended December 31, 2019 and primarily employee separation charges and accelerated depreciation in the year ended December 31, 2018.
(e)This adjustment was excluded because of the unique events associated with decisions rendered by the Superior Judicial Court of Brazil resulting in retrospective recoveries of indirect taxes.
(f)This adjustment was excluded because we divested our joint venture FAW-GM Light Duty Commercial Vehicle Co., Ltd. (FAW-GM), as a result of a strategic decision by both shareholders, allowing us to focus our resources on opportunities expected to deliver higher returns.
GENERAL MOTORS COMPANY AND SUBSIDIARIES
The following table reconciles diluted earnings per common share under U.S. GAAP to EPS-diluted-adjusted:
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|
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|
|
|
|
|
|
Years Ended December 31,
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|
2020
|
|
2019
|
|
2018
|
|
Amount
|
|
Per Share
|
|
Amount
|
|
Per Share
|
|
Amount
|
|
Per Share
|
Diluted earnings per common share
|
$
|
6,247
|
|
|
$
|
4.33
|
|
|
$
|
6,581
|
|
|
$
|
4.57
|
|
|
$
|
7,916
|
|
|
$
|
5.53
|
|
Diluted loss per common share – discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
70
|
|
|
0.05
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments(a)
|
652
|
|
|
0.46
|
|
|
539
|
|
|
0.38
|
|
|
2,905
|
|
|
2.03
|
|
Tax effect on adjustments(b)
|
(70)
|
|
|
(0.05)
|
|
|
(188)
|
|
|
(0.13)
|
|
|
(416)
|
|
|
(0.29)
|
|
Tax adjustments(c)
|
236
|
|
|
0.16
|
|
|
—
|
|
|
—
|
|
|
(1,111)
|
|
|
(0.78)
|
|
EPS-diluted-adjusted
|
$
|
7,065
|
|
|
$
|
4.90
|
|
|
$
|
6,932
|
|
|
$
|
4.82
|
|
|
$
|
9,364
|
|
|
$
|
6.54
|
|
________
(a) Refer to the reconciliation of Net income attributable to stockholders under U.S. GAAP to EBIT-adjusted within this section of the MD&A for adjustment details.
(b) The tax effect of each adjustment is determined based on the tax laws and valuation allowance status of the jurisdiction to which the adjustment relates.
(c) In the year ended December 31, 2020, the adjustment consists of tax expense related to the establishment of a valuation allowance against deferred tax assets in Australia and New Zealand. This adjustment was excluded because significant impacts of valuation allowances are not considered part of our core operations. In the year ended December 31, 2018, the adjustment consists of: (1) a non-recurring tax benefit related to foreign earnings; and (2) tax effects related to U.S. tax reform legislation.
The following table reconciles our effective tax rate under U.S. GAAP to ETR-adjusted:
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|
|
|
|
|
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|
|
|
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|
|
|
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|
|
Years Ended December 31,
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|
2020
|
|
2019
|
|
2018
|
|
Income before income taxes
|
|
Income tax expense
|
|
Effective tax rate
|
|
Income before income taxes
|
|
Income tax expense
|
|
Effective tax rate
|
|
Income before income taxes
|
|
Income tax expense
|
|
Effective tax rate
|
Effective tax rate
|
$
|
8,095
|
|
|
$
|
1,774
|
|
|
21.9
|
%
|
|
$
|
7,436
|
|
|
$
|
769
|
|
|
10.3
|
%
|
|
$
|
8,549
|
|
|
$
|
474
|
|
|
5.5
|
%
|
Adjustments(a)
|
652
|
|
|
70
|
|
|
|
|
545
|
|
|
188
|
|
|
|
|
2,946
|
|
|
416
|
|
|
|
Tax adjustments(b)
|
|
|
(236)
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
1,111
|
|
|
|
ETR-adjusted
|
$
|
8,747
|
|
|
$
|
1,608
|
|
|
18.4
|
%
|
|
$
|
7,981
|
|
|
$
|
957
|
|
|
12.0
|
%
|
|
$
|
11,495
|
|
|
$
|
2,001
|
|
|
17.4
|
%
|
__________
(a) Refer to the reconciliation of Net income attributable to stockholders under U.S. GAAP to EBIT-adjusted within this section of the MD&A for adjustment details. Net income attributable to noncontrolling interests for these adjustments is included in the years ended December 31, 2019 and 2018. The tax effect of each adjustment is determined based on the tax laws and valuation allowance status of the jurisdiction to which the adjustment relates.
(b) Refer to the reconciliation of diluted earnings per common share under U.S. GAAP to EPS-diluted-adjusted within this section of the MD&A for adjustment details.
We define return on equity (ROE) as Net income (loss) attributable to stockholders for the trailing four quarters divided by average equity for the same period. Management uses average equity to provide comparable amounts in the calculation of ROE. The following table summarizes the calculation of ROE (dollars in billions):
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
2020
|
|
2019
|
|
2018
|
Net income (loss) attributable to stockholders
|
$
|
6.4
|
|
|
$
|
6.7
|
|
|
$
|
8.0
|
|
Average equity(a)
|
$
|
43.3
|
|
|
$
|
43.7
|
|
|
$
|
37.4
|
|
ROE
|
14.9
|
%
|
|
15.4
|
%
|
|
21.4
|
%
|
_______
(a) Includes equity of noncontrolling interests where the corresponding earnings (loss) are included in Net income (loss) attributable to stockholders.
GENERAL MOTORS COMPANY AND SUBSIDIARIES
The following table summarizes the calculation of ROIC-adjusted (dollars in billions):
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
2020
|
|
2019
|
|
2018
|
EBIT-adjusted(a)
|
$
|
9.7
|
|
|
$
|
8.4
|
|
|
$
|
11.8
|
|
Average equity(b)
|
$
|
43.3
|
|
|
$
|
43.7
|
|
|
$
|
37.4
|
|
Add: Average automotive debt and interest liabilities (excluding finance leases)
|
27.8
|
|
|
14.9
|
|
|
14.4
|
|
Add: Average automotive net pension & OPEB liability
|
17.6
|
|
|
16.7
|
|
|
18.3
|
|
Less: Average automotive net income tax asset
|
(24.0)
|
|
|
(23.5)
|
|
|
(22.7)
|
|
ROIC-adjusted average net assets
|
$
|
64.7
|
|
|
$
|
51.8
|
|
|
$
|
47.4
|
|
ROIC-adjusted
|
15.0
|
%
|
|
16.2
|
%
|
|
24.9
|
%
|
________
(a) Refer to the reconciliation of Net income attributable to stockholders under U.S. GAAP to EBIT-adjusted within this section of the MD&A.
(b) Includes equity of noncontrolling interests where the corresponding earnings (loss) are included in EBIT-adjusted.
Overview Our vision for the future is a world with zero crashes, zero emissions and zero congestion, which guides our growth-focused investment in electrification, self-driving vehicles and new products and services. The all-electric future we are building integrates our technology, scale and manufacturing expertise to drive growth, profitability and deliver world-class customer interactions. Our strategy includes product leadership in electric vehicles and autonomous vehicles, continued leadership in trucks and SUVs, and developing and monetizing new software and services. We will execute our strategy with a diverse team and a steadfast commitment to good citizenship through sustainable operations and a leading health and safety culture.
The COVID-19 pandemic and government actions and measures taken to prevent its spread continue to affect our operations. In response to COVID-19, we previously suspended the majority of our global manufacturing operations and our Automotive China JVs’ manufacturing operations. By May 2020, we had resumed our global manufacturing operations. Government-imposed restrictions on businesses, operations and travel and the related economic uncertainty have impacted demand for our vehicles in most of our global markets. During the first half of 2020, we executed a number of austerity measures, including aggressive actions to reduce costs and preserve liquidity, such as limiting advertising and other third-party spending, suspending our dividend on common shares, deferring salaried employee compensation and delaying non-critical projects, including certain future product programs. As production has returned to normal levels, the majority of the austerity measures we put into place have normalized. The extent of COVID-19’s impact on our future operations, liquidity and the demand for our products will depend upon, among other things, the duration and severity of the outbreak or subsequent outbreaks, related government responses, such as required physical distancing or restrictions on business operations and travel, the pace of recovery of economic activity and the impact to consumers, the effectiveness of available vaccines and any potential supply disruptions, all of which are uncertain and difficult to predict in light of the rapidly evolving landscape. Refer to Part I, Item 1A. Risk Factors for a full discussion of the risks associated with the COVID-19 pandemic.
The automotive industry and GM are currently experiencing a global semiconductor supply shortage. The supply shortage has impacted multiple suppliers that incorporate semiconductors into the parts they supply to us. We expect the semiconductor supply shortage will have a short-term impact on our business. We do not expect this shortage to impact our growth and electric vehicle initiatives, we will continue prioritizing full-size trucks, SUVs and electric vehicles. Refer to Part I, Item 1A. Risk Factors for further discussion of these risks.
For the year ending December 31, 2021, we expect EPS-diluted and EPS-diluted-adjusted of between $4.50 and $5.25, Net income attributable to stockholders of between $6.8 billion and $7.6 billion and EBIT-adjusted of between $10.0 billion and $11.0 billion, inclusive of the impact of the semiconductor supply shortage. We do not consider the potential future impact of adjustments on our expected financial results. We estimate the short-term semiconductor supply shortage to have a net EBIT-adjusted impact of approximately $1.5 billion to $2.0 billion in the year ending December 31, 2021.
GENERAL MOTORS COMPANY AND SUBSIDIARIES
The following table reconciles expected Net income attributable to stockholders under U.S. GAAP to expected EBIT-adjusted (dollars in billions):
|
|
|
|
|
|
|
Year Ending December 31, 2021
|
Net income attributable to stockholders
|
$ 6.8-7.6
|
Income tax expense
|
2.2-2.4
|
|
|
Automotive interest expense, net
|
1.0
|
|
EBIT-adjusted(a)
|
$ 10.0-11.0
|
________
(a)We do not consider the potential future impact of adjustments on our expected financial results.
We also face continuing market, operating and regulatory challenges in several countries across the globe due to, among other factors, weak economic conditions, competitive pressures, our product portfolio offerings, heightened emissions standards, labor disruptions, foreign exchange volatility, rising material prices, evolving trade policy and political uncertainty. Refer to Part I, Item 1A. Risk Factors for a discussion of these challenges.
In November 2018, we announced plans to accelerate steps to improve our overall business performance, including the reorganization of global product development staffs, the realignment of manufacturing capacity in response to market-related volume declines in passenger cars and a reduction of our salaried workforce. We achieved $4.5 billion in cost savings primarily from reductions in Automotive and other cost of sales and Automotive and other selling, general and administrative expense in our consolidated financial statements, inclusive of $0.2 billion of savings related to the wind-down of Holden sales, design and engineering operations and sale of our vehicle and powertrain manufacturing facilities in Thailand. We previously announced plans to reduce capital expenditures from approximately $8.5 billion to approximately $7.0 billion on a normalized run-rate basis. As a result of re-timing 2020 spending due to pandemic-related austerity measures into 2021 and a strategic decision to accelerate investments in our all-electric future beginning in 2021, we expect that our annual capital expenditures will exceed $7.0 billion through at least 2023. As we continue to assess our performance and the needs of our evolving business, additional restructuring and rationalization actions could be required. These actions could give rise to future asset impairments or other charges, which may have a material impact on our operating results.
GMNA Industry sales in North America were 17.7 million units in the year ended December 31, 2020, representing a decrease of 16.2% compared to the corresponding period in 2019. U.S. industry sales were 14.9 million units in the year ended December 31, 2020, representing a decrease of 14.7% compared to the corresponding period in 2019. As described above, the COVID-19 pandemic has resulted in a contraction of total North America industry volumes in 2020. Dealer inventory remains constrained for several critical vehicles, including our full-size trucks.
Our total vehicle sales in the U.S., our largest market in North America, were 2.5 million units for a market share of 17.1% in the year ended December 31, 2020, representing an increase of 0.6 percentage points compared to the corresponding period in 2019. We continue to lead the U.S. industry in market share.
As discussed above, in response to COVID-19, we suspended production across our manufacturing facilities in March 2020. By May 2020, we had resumed critical manufacturing operations and reached normalized production levels in June 2020. We continue to follow physical distancing guidance, enhanced deep cleaning procedures and provide personal protective equipment to protect our employees.
We estimate GMNA's breakeven point at the U.S. industry level to be in the range of 10.0 to 11.0 million units. The extent of COVID-19's impact on industry volumes in 2021 will ultimately depend upon, among other things, the duration and severity of the outbreak or subsequent outbreaks, related government responses, the pace of recovery of economic activity and the impact to consumers, the effectiveness of available vaccines and any potential supply disruptions, all of which are uncertain and difficult to predict in light of the rapidly evolving landscape.
GMI Industry sales in China were 24.9 million units in the year ended December 31, 2020, representing a decrease of 1.9% compared to the corresponding period in 2019. Our total vehicle sales in China were 2.9 million units for a market share of 11.6% in the year ended December 31, 2020, representing a decrease of 0.5 percentage points compared to the corresponding period in 2019. While we have observed a recovery of the market as the impact of the COVID-19 pandemic in China subsides, the ongoing global macro-economic impact of COVID-19 and geopolitical tensions may continue to place pressure on China's
GENERAL MOTORS COMPANY AND SUBSIDIARIES
automotive industry. Our Automotive China JVs generated equity income of $0.5 billion in the year ended December 31, 2020. Although a continuation of a competitive industry, pricing pressures and a more challenging regulatory environment related to emissions, fuel consumption and new energy vehicles will continue to place pressure on our operations in China, we will continue to build upon our strong brands, network, and partnerships in China as well as continue to drive improvements in vehicle mix and cost.
Outside of China, industry sales were 21.1 million units in the year ended December 31, 2020, representing a decrease of 18.0% compared to the corresponding period in 2019, primarily due to the global macroeconomic impact of COVID-19. Our total vehicle sales were 1.0 million units for a market share of 4.7% in the year ended December 31, 2020, representing a decrease of 0.1 percentage points compared to the corresponding period in 2019.
In the year ended December 31, 2020, restructuring actions in GMI were related to the wind-down of Holden sales, design and engineering operations in Australia and New Zealand, with cessation of Holden vehicle sales by 2021, the sale of our vehicle and powertrain manufacturing facilities in Thailand, and the execution of a binding term sheet to sell our manufacturing facilities in India. These actions were taken to strengthen the Company's core business and focus investment on other opportunities that will derive the greatest returns for shareholders and support investment in future technologies. We recorded charges of $0.7 billion in the year ended December 31, 2020. We also recorded deferred tax charges of $0.2 billion in the year ended December 31, 2020. The charges were primarily considered special for EBIT-adjusted, EPS-diluted-adjusted and adjusted automotive free cash flow purposes. We intend to continue to provide servicing and spare parts to customers for an extended period of time in Australia, New Zealand, Thailand and India. Refer to Note 18 to our consolidated financial statements for additional information related to these restructuring actions.
Cruise We are actively testing our autonomous vehicles in the U.S. Gated by safety and regulation, we continue to make significant progress towards commercialization of a network of on-demand autonomous vehicles in the U.S.
Automotive Financing - GM Financial Summary and Outlook We believe that offering a comprehensive suite of financing products will generate incremental sales of our vehicles, drive incremental GM Financial earnings and help support our sales throughout various economic cycles. GM Financial's leasing program is exposed to residual values, which are heavily dependent on used vehicle prices. Used vehicle prices increased approximately 3% in 2020 compared to 2019, primarily due to low new vehicle inventory, largely driven by the suspension of manufacturing operations as a result of the COVID-19 pandemic, creating strong demand for used vehicles, which resulted in gains on terminations of leased vehicles of $1.3 billion in GM Financial interest, operating and other expenses in the year ended December 31, 2020, compared to gains of $0.7 billion in the corresponding period in 2019. Further, vehicles sold during 2020 were carried at lower net book values, resulting from increased depreciation rates recorded in anticipation of reduced residual values throughout 2020. In 2021, GM Financial expects used vehicle prices to decline by an amount in the low single digits on a percentage basis as compared to 2020 levels as supply and demand dynamics normalize. The following table summarizes the estimated residual value based on GM Financial's most recent estimates and the number of units included in GM Financial Equipment on operating leases, net by vehicle type (units in thousands):
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|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
|
December 31, 2019
|
|
Residual Value
|
|
Units
|
|
Percentage
|
|
Residual Value
|
|
Units
|
|
Percentage
|
Crossovers
|
$
|
16,334
|
|
|
964
|
|
|
65.5
|
%
|
|
$
|
15,950
|
|
|
972
|
|
|
60.5
|
%
|
Trucks
|
7,455
|
|
|
275
|
|
|
18.7
|
%
|
|
7,256
|
|
|
288
|
|
|
18.0
|
%
|
SUVs
|
3,435
|
|
|
92
|
|
|
6.3
|
%
|
|
3,917
|
|
|
108
|
|
|
6.7
|
%
|
Cars
|
1,949
|
|
|
140
|
|
|
9.5
|
%
|
|
3,276
|
|
|
238
|
|
|
14.8
|
%
|
Total
|
$
|
29,173
|
|
|
1,471
|
|
|
100.0
|
%
|
|
$
|
30,399
|
|
|
1,606
|
|
|
100.0
|
%
|
GM Financial's penetration of our retail sales in the U.S. increased to 45% in the year ended December 31, 2020 from 43% in 2019. Penetration levels vary depending on incentive financing programs available and competing third-party financing products in the market. GM Financial's prime loan originations as a percentage of total loan originations in North America increased to 73% in 2020 from 68% in 2019. In the year ended December 31, 2020, GM Financial's revenue consisted of leased vehicle income of 69%, retail finance charge income of 26%, and commercial finance charge income of 3%.
Consolidated Results We review changes in our results of operations under five categories: volume, mix, price, cost and other. Volume measures the impact of changes in wholesale vehicle volumes driven by industry volume, market share and changes in dealer stock levels. Mix measures the impact of changes to the regional portfolio due to product, model, trim,
GENERAL MOTORS COMPANY AND SUBSIDIARIES
country and option penetration in current year wholesale vehicle volumes. Price measures the impact of changes related to Manufacturer’s Suggested Retail Price and various sales allowances. Cost primarily includes: (1) material and freight; (2) manufacturing, engineering, advertising, administrative and selling and warranty expense; and (3) non-vehicle related activity. Other primarily includes foreign exchange and non-vehicle related automotive revenues as well as equity income or loss from our nonconsolidated affiliates. Refer to the regional sections of this MD&A for additional information.
Total Net Sales and Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
Favorable/ (Unfavorable)
|
|
|
|
|
Variance Due To
|
2020
|
|
2019
|
|
|
%
|
|
|
Volume
|
|
Mix
|
|
Price
|
|
Other
|
|
|
|
|
|
|
|
(Dollars in billions)
|
GMNA
|
$
|
96,733
|
|
|
$
|
106,366
|
|
|
$
|
(9,633)
|
|
|
(9.1)
|
%
|
|
|
$
|
(15.1)
|
|
|
$
|
2.7
|
|
|
$
|
3.3
|
|
|
$
|
(0.5)
|
|
|
GMI
|
11,586
|
|
|
16,111
|
|
|
(4,525)
|
|
|
(28.1)
|
%
|
|
|
$
|
(4.4)
|
|
|
$
|
1.2
|
|
|
$
|
0.5
|
|
|
$
|
(1.8)
|
|
|
Corporate
|
350
|
|
|
220
|
|
|
130
|
|
|
59.1
|
%
|
|
|
|
|
|
|
|
|
$
|
0.1
|
|
|
Automotive
|
108,669
|
|
|
122,697
|
|
|
(14,028)
|
|
|
(11.4)
|
%
|
|
|
$
|
(19.6)
|
|
|
$
|
3.9
|
|
|
$
|
3.8
|
|
|
$
|
(2.2)
|
|
|
Cruise
|
103
|
|
|
100
|
|
|
3
|
|
|
3.0
|
%
|
|
|
|
|
|
|
|
|
$
|
—
|
|
|
GM Financial
|
13,831
|
|
|
14,554
|
|
|
(723)
|
|
|
(5.0)
|
%
|
|
|
|
|
|
|
|
|
$
|
(0.7)
|
|
|
Eliminations/reclassifications
|
(118)
|
|
|
(114)
|
|
|
(4)
|
|
|
(3.5)
|
%
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
Total net sales and revenue
|
$
|
122,485
|
|
|
$
|
137,237
|
|
|
$
|
(14,752)
|
|
|
(10.7)
|
%
|
|
|
$
|
(19.6)
|
|
|
$
|
3.9
|
|
|
$
|
3.8
|
|
|
$
|
(2.9)
|
|
|
Refer to the regional sections of this MD&A for additional information on volume, mix and price.
Automotive and Other Cost of Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
Favorable/ (Unfavorable)
|
|
|
|
|
Variance Due To
|
|
2020
|
|
2019
|
|
|
%
|
|
|
Volume
|
|
Mix
|
|
Cost
|
|
Other
|
|
|
|
|
|
|
(Dollars in billions)
|
GMNA
|
$
|
83,886
|
|
|
$
|
94,582
|
|
|
$
|
10,696
|
|
|
11.3
|
%
|
|
|
$
|
11.0
|
|
|
$
|
(2.2)
|
|
|
$
|
1.8
|
|
|
$
|
—
|
|
GMI
|
12,515
|
|
|
14,967
|
|
|
2,452
|
|
|
16.4
|
%
|
|
|
$
|
4.0
|
|
|
$
|
(0.9)
|
|
|
$
|
(1.6)
|
|
|
$
|
1.0
|
|
Corporate
|
310
|
|
|
81
|
|
|
(229)
|
|
|
n.m.
|
|
|
|
|
|
|
$
|
(0.2)
|
|
|
$
|
—
|
|
Cruise
|
829
|
|
|
1,026
|
|
|
197
|
|
|
19.2
|
%
|
|
|
|
|
|
|
$
|
0.2
|
|
|
|
Eliminations
|
(1)
|
|
|
(5)
|
|
|
(4)
|
|
|
(80.0)
|
%
|
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Total automotive and other cost of sales
|
$
|
97,539
|
|
|
$
|
110,651
|
|
|
$
|
13,112
|
|
|
11.8
|
%
|
|
|
$
|
15.0
|
|
|
$
|
(3.1)
|
|
|
$
|
0.2
|
|
|
$
|
1.0
|
|
________
n.m. = not meaningful
The most significant element of our Automotive and other cost of sales is material cost, which makes up approximately two-thirds of the total amount. The remaining portion includes labor costs, depreciation and amortization, engineering, freight and product warranty and recall campaigns.
Factors that most significantly influence a region's profitability are industry volume, market share, and the relative mix of vehicles (trucks, crossovers, cars) sold. Variable profit is a key indicator of product profitability. Variable profit is defined as revenue less material cost, freight, the variable component of manufacturing expense and warranty and recall-related costs. Vehicles with higher selling prices generally have higher variable profit. Refer to the regional sections of this MD&A for additional information on volume and mix.
In the year ended December 31, 2020, favorable Cost was primarily due to: (1) charges of $1.7 billion primarily related to accelerated depreciation and supplier-related charges resulting from transformation activities in 2019; (2) favorable cost of $1.5 billion primarily due to the impact of COVID-19, inclusive of the suspension of production and austerity measures as well as cost savings associated with transformation activities and savings related to the wind-down of Holden sales, design and engineering operations and sale of our vehicle and powertrain manufacturing facilities in Thailand; and (3) decreased costs of $0.3 billion related to parts and accessories sales; partially offset by (4) a benefit of $1.4 billion related to the retrospective recoveries of indirect taxes in Brazil in 2019; (5) increased material and freight costs of $0.9 billion; (6) charges of $0.7 billion
GENERAL MOTORS COMPANY AND SUBSIDIARIES
primarily related to dealer restructuring charges, property and intangible asset impairments, inventory provisions and employee separation charges in Australia, New Zealand, Thailand and India; and (7) increased costs of $0.4 billion primarily due to the Takata Corporation (Takata) recall of $1.1 billion partially offset by decreased other campaign and warranty-related costs. In the year ended December 31, 2020 favorable Other was due to the foreign currency effect resulting from the weakening of the Brazilian Real and other currencies against the U.S. Dollar.
Automotive and Other Selling, General and Administrative Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
Year Ended
2020 vs. 2019 Change
|
|
|
|
|
|
|
2020
|
|
2019
|
|
2018
|
|
Favorable/ (Unfavorable)
|
|
%
|
|
|
|
|
Automotive and other selling, general and administrative expense
|
$
|
7,038
|
|
|
$
|
8,491
|
|
|
$
|
9,650
|
|
|
$
|
1,453
|
|
|
17.1
|
%
|
|
|
|
|
In the year ended December 31, 2020, Automotive and other selling, general and administrative expense decreased primarily due to decreased advertising and other costs of $1.4 billion primarily related to the impact of COVID-19, inclusive of austerity measures and cost savings associated with transformation activities.
Interest Income and Other Non-operating Income, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
Year Ended
2020 vs. 2019 Change
|
|
|
|
2020
|
|
2019
|
|
2018
|
|
Favorable/ (Unfavorable)
|
|
%
|
Interest income and other non-operating income, net
|
$
|
1,885
|
|
|
$
|
1,469
|
|
|
$
|
2,596
|
|
|
$
|
416
|
|
|
28.3
|
%
|
In the year ended December 31, 2020, Interest income and other non-operating income, net increased primarily due to increased non-service pension income of $0.3 billion.
Income Tax Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
Year Ended
2020 vs. 2019 Change
|
|
|
|
2020
|
|
2019
|
|
2018
|
|
Favorable/ (Unfavorable)
|
|
%
|
Income tax expense
|
$
|
1,774
|
|
|
$
|
769
|
|
|
$
|
474
|
|
|
$
|
(1,005)
|
|
|
n.m.
|
________
n.m. = not meaningful
In the year ended December 31, 2020, Income tax expense increased primarily due to changes in valuation allowance, an increase in pre-tax income, and the absence of U.S. tax benefits from foreign activity.
For the year ended December 31, 2020 our ETR-adjusted was 18.4%. We expect our adjusted effective tax rate to be approximately 24% for the year ending December 31, 2021.
Refer to Note 17 to our consolidated financial statements for additional information related to Income tax expense.
GM North America
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
Favorable/ (Unfavorable)
|
|
|
|
|
Variance Due To
|
|
2020
|
|
2019
|
|
|
%
|
|
|
Volume
|
|
Mix
|
|
Price
|
|
Cost
|
|
Other
|
|
|
|
|
|
|
(Dollars in billions)
|
Total net sales and revenue
|
$
|
96,733
|
|
|
$
|
106,366
|
|
|
$
|
(9,633)
|
|
|
(9.1)
|
%
|
|
|
$
|
(15.1)
|
|
|
$
|
2.7
|
|
|
$
|
3.3
|
|
|
|
|
$
|
(0.5)
|
|
EBIT-adjusted
|
$
|
9,071
|
|
|
$
|
8,204
|
|
|
$
|
867
|
|
|
10.6
|
%
|
|
|
$
|
(4.1)
|
|
|
$
|
0.5
|
|
|
$
|
3.3
|
|
|
$
|
1.3
|
|
|
$
|
(0.1)
|
|
EBIT-adjusted margin
|
9.4
|
%
|
|
7.7
|
%
|
|
1.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Vehicles in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholesale vehicle sales
|
2,707
|
|
|
3,214
|
|
|
(507)
|
|
|
(15.8)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
GENERAL MOTORS COMPANY AND SUBSIDIARIES
GMNA Total Net Sales and Revenue In the year ended December 31, 2020, Total net sales and revenue decreased primarily due to: (1) decreased net wholesale volumes across most vehicle lines as a result of suspending production due to the COVID-19 pandemic, partially offset by lost production volumes associated with the UAW strike in 2019; and (2) unfavorable Other primarily due to decreased sales of parts and accessories due to the COVID-19 pandemic and foreign currency effect resulting from the weakening of the Mexican Peso against the U.S. Dollar; partially offset by (3) favorable price primarily due to full-size SUVs, pickup trucks and crossover vehicles; and (4) favorable mix associated with decreased sales of passenger cars and crossover vehicles, improved mix associated with our new full-size pickup trucks, partially offset by decreased sales of full-size SUVs.
GMNA EBIT-Adjusted The most significant factors that influence profitability are industry volume and market share. While not as significant as industry volume and market share, another factor affecting profitability is the relative mix of vehicles sold. Trucks, crossovers and cars sold currently have a variable profit of approximately 160%, 60% and 30% of our GMNA portfolio on a weighted-average basis.
In the year ended December 31, 2020, EBIT-adjusted increased primarily due to: (1) favorable price; (2) favorable Cost due to savings in advertising, manufacturing, engineering and other administrative and selling of $2.1 billion, inclusive of the suspension of production and austerity measures in response to the COVID-19 pandemic as well as transformation activities; partially offset by increased material and freight cost of $0.7 billion, and increased costs of $0.4 billion primarily due to the Takata recall of $1.1 billion partially offset by decreased other campaigns and warranty-related costs; and (3) favorable mix; partially offset by (4) decreased net wholesale volumes.
GM International
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
Favorable/ (Unfavorable)
|
|
|
|
|
Variance Due To
|
|
2020
|
|
2019
|
|
|
%
|
|
|
Volume
|
|
Mix
|
|
Price
|
|
Cost
|
|
Other
|
|
|
|
|
|
|
(Dollars in billions)
|
Total net sales and revenue
|
$
|
11,586
|
|
|
$
|
16,111
|
|
|
$
|
(4,525)
|
|
|
(28.1)
|
%
|
|
|
$
|
(4.4)
|
|
|
$
|
1.2
|
|
|
$
|
0.5
|
|
|
|
|
$
|
(1.8)
|
|
EBIT (loss)-adjusted
|
$
|
(528)
|
|
|
$
|
(202)
|
|
|
$
|
(326)
|
|
|
n.m.
|
|
|
$
|
(0.5)
|
|
|
$
|
0.3
|
|
|
$
|
0.6
|
|
|
$
|
0.2
|
|
|
$
|
(0.9)
|
|
EBIT (loss)-adjusted margin
|
(4.6)
|
%
|
|
(1.3)
|
%
|
|
(3.3)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity income — Automotive China
|
$
|
512
|
|
|
$
|
1,132
|
|
|
$
|
(620)
|
|
|
(54.8)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
EBIT (loss)-adjusted — excluding Equity income
|
$
|
(1,040)
|
|
|
$
|
(1,334)
|
|
|
$
|
294
|
|
|
22.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
(Vehicles in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholesale vehicle sales
|
663
|
|
|
995
|
|
|
(332)
|
|
|
(33.4)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
________
n.m. = not meaningful
The vehicle sales of our Automotive China JVs are not recorded in Total net sales and revenue. The results of our joint ventures are recorded in Equity income, which is included in EBIT (loss)-adjusted above.
GMI Total Net Sales and Revenue In the year ended December 31, 2020, Total net sales and revenue decreased primarily due to: (1) decreased wholesale volumes primarily due to lower industry volumes due to the COVID-19 pandemic primarily in South America and lower volumes in Asia/Pacific inclusive of the wind-down of our vehicle sales operations in Australia, New Zealand and Thailand; (2) unfavorable Other primarily due to the foreign currency effect resulting from the weakening of the Brazilian Real and Argentine Peso against the U.S. Dollar and decreased components, parts and accessories sales; partially offset by (3) favorable mix primarily in Brazil; and (4) favorable pricing across multiple vehicle lines in Argentina and Brazil.
GMI EBIT (loss)-Adjusted In the year ended December 31, 2020, EBIT (loss)-adjusted increased primarily due to: (1) unfavorable volume; (2) unfavorable Other primarily due to decreased equity income and the foreign currency effect resulting from the weakening of the Brazilian Real and Argentine Peso against the U.S. Dollar; partially offset by (3) favorable pricing; (4) favorable mix primarily in Brazil and Asia/Pacific; and (5) favorable Cost primarily due to decreased advertising and engineering expenses, inclusive of savings related to the wind-down of Holden sales, design and engineering operations and sale of our vehicle and powertrain manufacturing facilities in Thailand, partially offset by increased material cost.
GENERAL MOTORS COMPANY AND SUBSIDIARIES
We view the Chinese market as important to our global growth strategy and are employing a multi-brand strategy. In the coming years we plan to leverage our global architectures to increase the number of product offerings under the Buick, Chevrolet and Cadillac brands in China and continue to grow our business under the local Baojun and Wuling brands. We operate in the Chinese market through a number of joint ventures and maintaining strong relationships with our joint venture partners is an important part of our China growth strategy.
The following table summarizes certain key operational and financial data for the Automotive China JVs (vehicles in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
2020
|
|
2019
|
|
2018
|
Wholesale vehicle sales including vehicles exported to markets outside of China
|
3,029
|
|
|
3,244
|
|
|
4,030
|
|
Total net sales and revenue
|
$
|
38,736
|
|
|
$
|
39,123
|
|
|
$
|
50,316
|
|
Net income
|
$
|
1,239
|
|
|
$
|
2,258
|
|
|
$
|
3,992
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
|
December 31, 2019
|
Cash and cash equivalents
|
$
|
8,980
|
|
|
$
|
6,257
|
|
Debt
|
$
|
313
|
|
|
$
|
109
|
|
Cruise
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
2020 vs. 2019 Change
|
|
|
|
2020
|
|
2019
|
|
2018
|
|
Favorable/ (Unfavorable)
|
|
%
|
|
|
|
|
Total net sales and revenue(a)
|
$
|
103
|
|
|
$
|
100
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
3.0
|
%
|
|
|
|
|
EBIT (loss)-adjusted
|
$
|
(887)
|
|
|
$
|
(1,004)
|
|
|
$
|
(728)
|
|
|
$
|
117
|
|
|
11.6
|
%
|
|
|
|
|
________
(a) Reclassified to Interest income and other non-operating income, net in our consolidated income statement in each of the years ended December 31, 2020 and 2019.
Cruise EBIT (Loss)-Adjusted In the year ended December 31, 2020, EBIT (loss)-adjusted decreased primarily due to a reduction in developmental costs as we progress towards the commercialization of a network of on-demand autonomous vehicles in the U.S., partially offset by an increase in administrative expense.
GM Financial
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
2020 vs. 2019 Change
|
|
|
|
2020
|
|
2019
|
|
2018
|
|
Amount
|
|
%
|
|
|
|
|
Total revenue
|
$
|
13,831
|
|
|
$
|
14,554
|
|
|
$
|
14,016
|
|
|
$
|
(723)
|
|
|
(5.0)
|
%
|
|
|
|
|
Provision for loan losses
|
$
|
881
|
|
|
$
|
726
|
|
|
$
|
642
|
|
|
$
|
155
|
|
|
21.3
|
%
|
|
|
|
|
EBT-adjusted
|
$
|
2,702
|
|
|
$
|
2,104
|
|
|
$
|
1,893
|
|
|
$
|
598
|
|
|
28.4
|
%
|
|
|
|
|
Average debt outstanding (dollars in billions)
|
$
|
91.4
|
|
|
$
|
91.2
|
|
|
$
|
85.1
|
|
|
$
|
0.2
|
|
|
0.2
|
%
|
|
|
|
|
Effective rate of interest paid
|
3.3
|
%
|
|
4.0
|
%
|
|
3.8
|
%
|
|
(0.7)
|
%
|
|
|
|
|
|
|
GM Financial Revenue In the year ended December 31, 2020, Total revenue decreased primarily due to decreased leased vehicle income of $0.5 billion primarily due to a decrease in the size of the leased vehicle portfolio and decreased investment income of $0.1 billion resulting from a decline in benchmark interest rates.
GM Financial EBT-Adjusted In the year ended December 31, 2020, EBT-adjusted increased primarily due to: (1) decreased interest expense of $0.6 billion due to a lower effective rate of interest on debt resulting from a decline in benchmark interest rates; (2) decreased leased vehicle expenses net of decreased leased vehicle income of $0.3 billion primarily due to increased leased vehicle termination gains, due to the outperformance of used vehicle prices compared to residual value estimates and a decrease in the size of the leased vehicle portfolio; partially offset by (3) increased provision for loan losses of $0.2 billion primarily due to increased expected charge-offs as a result of the forecasted economic impact of the COVID-19 pandemic, inclusive of new CECL standard impacts.
GENERAL MOTORS COMPANY AND SUBSIDIARIES
Liquidity and Capital Resources As described in the “Overview” section of this MD&A, the COVID-19 pandemic has had a material impact on our financial results and it may have a material impact on future periods, including our cash flows from operating activities and liquidity. The extent of the impact of COVID-19 on our liquidity will depend upon, among other things, the duration and severity of the outbreak or subsequent outbreaks, related government responses, such as required physical distancing or restrictions on business operations and travel, the pace of recovery of economic activity and the impact to consumers, the effectiveness of available vaccines and any potential supply disruptions, all of which are uncertain and difficult to predict. Refer to Part I, Item 1A. Risk Factors for a full discussion of the risks associated with the COVID-19 pandemic.
During 2020, to preserve financial flexibility in light of the uncertainty in global markets resulting from the COVID-19 pandemic, we borrowed $15.9 billion under our revolving credit facilities, extended a portion of our revolving credit facilities for an additional year, issued $4.0 billion in senior unsecured notes and entered into a new unsecured 364-day, $2.0 billion revolving credit facility. We repaid all amounts drawn under the revolving credit facilities as of December 31, 2020. See the "Automotive Liquidity" section of this MD&A for additional information on these liquidity actions.
Despite the uncertainty resulting from the COVID-19 pandemic, we believe our current levels of cash, cash equivalents, and marketable debt securities, available borrowing capacity under our revolving credit facilities and other liquidity actions currently available to us are sufficient to meet our liquidity requirements. We also maintain access to the capital markets and may issue debt or equity securities, which may provide an additional source of liquidity. We have substantial cash requirements going forward, which we plan to fund through our total available liquidity, cash flows from operating activities and additional liquidity measures, if determined to be necessary.
The following summarizes aggregated information about our material short and long-term cash requirements from our known contractual and other obligations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments Due by Period
|
|
2021
|
|
2022-2023
|
|
2024-2025
|
|
2026 and after
|
|
Total
|
Automotive debt
|
$
|
1,199
|
|
|
$
|
2,619
|
|
|
$
|
2,618
|
|
|
11,260
|
|
|
17,696
|
|
Automotive Financing debt
|
35,742
|
|
|
34,579
|
|
|
14,417
|
|
|
7,277
|
|
|
92,015
|
|
|
|
|
|
|
|
|
|
|
|
Automotive interest payments(a)
|
947
|
|
|
1,807
|
|
|
1,532
|
|
|
8,439
|
|
|
12,725
|
|
Automotive Financing interest payments(b)
|
2,072
|
|
|
2,329
|
|
|
955
|
|
|
443
|
|
|
5,799
|
|
|
|
|
|
|
|
|
|
|
|
Operating lease obligations
|
266
|
|
|
436
|
|
|
312
|
|
|
498
|
|
|
1,512
|
|
|
|
|
|
|
|
|
|
|
|
Material
|
2,496
|
|
|
1,593
|
|
|
71
|
|
|
18
|
|
|
4,178
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
__________
(a)Amounts include automotive interest payments based on contractual terms and current interest rates on our debt and finance lease obligations. Automotive interest payments based on variable interest rates were determined using the interest rate in effect at December 31, 2020.
(b)GM Financial interest payments were determined using the interest rate in effect at December 31, 2020 for floating rate debt and the contractual rates for fixed rate debt. GM Financial interest payments on floating rate tranches of the securitization notes payable were converted to a fixed rate based on the floating rate plus any expected hedge payments.
Our known current material uses of cash include, among other possible demands: (1) capital expenditures of approximately $9.0 billion to $10.0 billion in 2021 in addition to payments for engineering and product development activities; (2) payments associated with previously announced vehicle recalls, the settlements of the multi-district litigation and any other recall-related contingencies; and (3) payments to service debt and other long-term obligations, including discretionary and mandatory contributions to our pension plans. Our material future uses of cash, which may vary from time to time based on market conditions and other factors, are focused on the three objectives of our capital allocation program: (1) grow our business at an average target ROIC-adjusted rate of 20% or greater; (2) maintain a strong investment-grade balance sheet, including a target average automotive cash balance of $18 billion; and (3) after the first two objectives are met, return available cash to shareholders. Our senior management evaluates our capital allocation program on an ongoing basis and recommends any modifications to the program to our Board of Directors, not less than once annually.
Our liquidity plans are subject to a number of risks and uncertainties, including those described in the "Forward-Looking Statements" section of this MD&A and Part I, Item 1A. Risk Factors, some of which are outside of our control.
GENERAL MOTORS COMPANY AND SUBSIDIARIES
We continue to monitor and evaluate opportunities to strengthen our competitive position over the long term while maintaining a strong investment-grade balance sheet. These actions may include opportunistic payments to reduce our long-term obligations, as well as the possibility of acquisitions, dispositions, investments with joint venture partners and strategic alliances that we believe would generate significant advantages and substantially strengthen our business.
In January 2017, we announced that our Board of Directors had authorized the purchase of up to $5.0 billion of our common stock with no expiration date, as part of our common stock repurchase program. We have completed $1.7 billion of the $5.0 billion program through December 31, 2020.
Cash flows occur amongst our Automotive, Cruise and GM Financial operations that are eliminated when we consolidate our cash flows. Such eliminations include, among other things, collections by Automotive on wholesale accounts receivables financed by dealers through GM Financial, payments between Automotive and GM Financial for accounts receivables transferred by Automotive to GM Financial, loans to Automotive from GM Financial, dividends issued by GM Financial to Automotive and Automotive cash injections in Cruise. The presentation of Automotive liquidity, Cruise liquidity and GM Financial liquidity presented below includes the impact of cash transactions amongst the sectors that are ultimately eliminated in consolidation.
Automotive Liquidity Total available liquidity includes cash, cash equivalents, marketable debt securities and funds available under credit facilities. The amount of available liquidity is subject to seasonal fluctuations and includes balances held by various business units and subsidiaries worldwide that are needed to fund their operations.
We manage our liquidity primarily at our treasury centers as well as at certain of our significant consolidated overseas subsidiaries. Over 90% of our cash and marketable debt securities were managed within North America and at our regional treasury centers at December 31, 2020. We have used and will continue to use other methods including intercompany loans to utilize these funds across our global operations as needed.
Our cash equivalents and marketable debt securities balances are primarily denominated in U.S. Dollars and include investments in U.S. government and agency obligations, foreign government securities, time deposits, corporate debt securities and mortgage and asset-backed securities. Our investment guidelines, which we may change from time to time, prescribe certain minimum credit worthiness thresholds and limit our exposures to any particular sector, asset class, issuance or security type. The majority of our current investments in debt securities are with A/A2 or better rated issuers.
We use credit facilities as a mechanism to provide additional flexibility in managing our global liquidity. At December 31, 2019, the total size of our credit facilities was $17.5 billion, which consisted principally of three revolving credit facilities. In May 2020, as an additional source of available liquidity, we entered into a fourth facility, increasing the size of our credit facilities to $18.5 billion. These facilities consist of a three-year, $4.0 billion facility that includes a letter of credit sub-facility of $1.1 billion, a five-year, $10.5 billion facility, a three-year, $2.0 billion transformation facility and a 364-day, $2.0 billion revolving credit facility entered into in May 2020. Total borrowing capacity under our automotive credit facilities does not include a 364-day, $2.0 billion facility designated for exclusive use by GM Financial.
In April 2020, we renewed our 364-day, $2.0 billion facility designated for exclusive use by GM Financial for an additional 364-day term and extended $3.6 billion of the three-year, $4.0 billion facility for an additional year expiring in April 2022. The remaining portion will expire in April 2021, unless extended. As part of the extension of the three-year, $4.0 billion facility, we agreed not to execute any share repurchases while we have any outstanding borrowings under the revolving credit facilities, except for the three-year, $2.0 billion transformation facility. In addition, we are restricted from paying dividends on our common shares if outstanding borrowings under the revolving credit facilities exceed $5.0 billion, with the exception of the three-year, $2.0 billion transformation facility.
In 2020, we borrowed $3.4 billion against our three-year, $4.0 billion facility, $2.0 billion against our three-year, $2.0 billion transformation facility and $10.5 billion against our five-year, $10.5 billion facility. We repaid all amounts drawn under the revolving credit facilities as of December 31, 2020. We had letters of credit outstanding under our sub-facility of $0.3 billion and $0.2 billion at December 31, 2020 and 2019.
If available capacity permits, GM Financial has access to our revolving credit facilities, except for the three-year, $2.0 billion transformation facility and the new 364-day $2.0 billion facility. GM Financial did not have borrowings outstanding against our revolving credit facilities at December 31, 2020 and 2019. Refer to Note 13 to our consolidated financial statements for additional information on credit facilities. We had intercompany loans from GM Financial of $0.4 billion and $0.5 billion at
GENERAL MOTORS COMPANY AND SUBSIDIARIES
December 31, 2020 and 2019, which primarily consisted of commercial loans to dealers we consolidate, and we had no intercompany loans to GM Financial. Refer to Note 5 of our consolidated financial statements for additional information.
In May 2020, we issued $4.0 billion in aggregate principal amount of senior unsecured notes with a weighted average interest rate of 6.11% and maturity dates ranging from 2023 to 2027. The notes are governed by a sixth supplemental indenture and the same base indenture that governs our existing notes, which contains terms and covenants customary for these types of securities, including a limitation on the amount of certain secured debt we may incur. The net proceeds from the issuance of these senior unsecured notes provide additional financial flexibility and will be used for general corporate purposes. In August 2020, we repaid $0.5 billion of our floating rate senior unsecured debt upon maturity.
Several of our loan facilities, including our revolving credit facilities, require compliance with certain financial and operational covenants as well as regular reporting to lenders. We have reviewed our covenants in effect as of December 31, 2020 and determined we are in compliance and expect to remain in compliance in the future.
GM Financial's Board of Directors declared and paid dividends of $0.8 billion and $0.4 billion on its common stock in 2020 and 2019. Future dividends from GM Financial will depend on a number of factors including business and economic conditions, its financial condition, earnings, liquidity requirements and leverage ratio.
The following table summarizes our available liquidity (dollars in billions):
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
|
December 31, 2019
|
Automotive cash and cash equivalents
|
$
|
14.2
|
|
|
$
|
13.4
|
|
Marketable debt securities
|
8.1
|
|
|
3.9
|
|
Automotive cash, cash equivalents and marketable debt securities
|
22.3
|
|
|
17.3
|
|
Cruise cash and cash equivalents(a)
|
0.8
|
|
|
2.3
|
|
Cruise marketable debt securities(a)
|
0.9
|
|
|
0.3
|
|
Available liquidity
|
24.0
|
|
|
19.9
|
|
Available under credit facilities
|
18.2
|
|
|
17.3
|
|
Total available liquidity
|
$
|
42.2
|
|
|
$
|
37.2
|
|
__________
(a)Amounts are designated exclusively for the use of Cruise. Refer to Note 20 to our consolidated financial statements for further details.
The following table summarizes the changes in our Automotive available liquidity (excluding Cruise, dollars in billions):
|
|
|
|
|
|
|
Year Ended December 31, 2020
|
Operating cash flow
|
$
|
7.5
|
|
Capital expenditures
|
(5.3)
|
|
Dividends paid and payments to purchase common stock
|
(0.6)
|
|
Issuance of senior unsecured notes
|
4.0
|
|
Repayment of senior unsecured notes
|
(0.5)
|
|
|
|
Other non-operating(a)
|
(0.1)
|
|
Increase in available credit facilities
|
0.9
|
|
Total change in automotive available liquidity
|
$
|
5.9
|
|
__________
(a)Amount includes $0.5 billion of net payments on other debt including finance leases and several other insignificant items, partially offset by $0.6 billion of proceeds from the sale of our remaining shares in Lyft.
GENERAL MOTORS COMPANY AND SUBSIDIARIES
Automotive Cash Flow (Dollars in billions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
2020 vs. 2019 Change
|
|
2020
|
|
2019
|
|
2018
|
|
Operating Activities
|
|
|
|
|
|
|
|
Income from continuing operations
|
$
|
5.0
|
|
|
$
|
5.8
|
|
|
$
|
7.1
|
|
|
$
|
(0.8)
|
|
Depreciation, amortization and impairment charges
|
5.5
|
|
|
6.7
|
|
|
6.1
|
|
|
(1.2)
|
|
Pension and OPEB activities
|
(1.6)
|
|
|
(1.5)
|
|
|
(3.4)
|
|
|
(0.1)
|
|
Working capital
|
(1.7)
|
|
|
(2.2)
|
|
|
0.7
|
|
|
0.5
|
|
Accrued and other liabilities and income taxes
|
(1.4)
|
|
|
(1.5)
|
|
|
1.9
|
|
|
0.1
|
|
Other
|
1.7
|
|
|
0.1
|
|
|
(0.7)
|
|
|
1.6
|
|
Net automotive cash provided by operating activities
|
$
|
7.5
|
|
|
$
|
7.4
|
|
|
$
|
11.7
|
|
|
$
|
0.1
|
|
In the year ended December 31, 2020, the increase in Net automotive cash provided by operating activities was primarily due to: (1) payments of $1.1 billion in the prior year related to transformation activities; (2) working capital; (3) higher dividends received from GM Financial of $0.4 billion; and (4) several other insignificant items; partially offset by (5) unwind of sales incentives of $1.8 billion; and (6) lower dividends received from our nonconsolidated affiliates of $0.7 billion.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
2020 vs. 2019 Change
|
|
|
|
2020
|
|
2019
|
|
2018
|
|
|
Investing Activities
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
$
|
(5.3)
|
|
|
$
|
(7.5)
|
|
|
$
|
(8.7)
|
|
|
$
|
2.2
|
|
|
|
Acquisitions and liquidations of marketable securities, net(a)
|
(3.6)
|
|
|
2.4
|
|
|
2.3
|
|
|
(6.0)
|
|
|
|
GM investment in Cruise
|
—
|
|
|
(0.7)
|
|
|
(1.1)
|
|
|
0.7
|
|
|
|
Other
|
0.1
|
|
|
0.2
|
|
|
(0.2)
|
|
|
(0.1)
|
|
|
|
Net automotive cash used in investing activities
|
$
|
(8.8)
|
|
|
$
|
(5.6)
|
|
|
$
|
(7.7)
|
|
|
$
|
(3.2)
|
|
|
|
__________
(a)Amount includes $0.6 billion and $0.3 billion of proceeds from the sale of our shares in Lyft in the year ended December 31, 2020 and 2019.
In the year ended December 31, 2020, capital expenditures decreased primarily due to the delay of non-critical projects, including certain future product programs, in response to the COVID-19 pandemic. Cash used in acquisitions and liquidations of marketable securities, net increased due to the increased purchases of marketable securities with proceeds from the issuance of debt in response to the COVID-19 pandemic and increased liquidations of marketable securities for strike-related liquidity needs during 2019.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
2020 vs. 2019 Change
|
|
2020
|
|
2019
|
|
2018
|
|
Financing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net proceeds (payments) from short-term debt
|
$
|
(0.5)
|
|
|
$
|
0.5
|
|
|
$
|
(1.4)
|
|
|
$
|
(1.0)
|
|
Issuance of senior unsecured notes
|
4.0
|
|
|
—
|
|
|
2.1
|
|
|
4.0
|
|
Repayment of senior unsecured notes
|
(0.5)
|
|
|
—
|
|
|
—
|
|
|
(0.5)
|
|
Dividends paid and payments to purchase common stock
|
(0.6)
|
|
|
(2.2)
|
|
|
(2.3)
|
|
|
1.6
|
|
Proceeds from KDB investment in GM Korea
|
—
|
|
|
—
|
|
|
0.7
|
|
|
—
|
|
Other
|
(0.3)
|
|
|
(0.4)
|
|
|
(0.6)
|
|
|
0.1
|
|
Net automotive cash provided by (used in) financing activities
|
$
|
2.1
|
|
|
$
|
(2.1)
|
|
|
$
|
(1.5)
|
|
|
$
|
4.2
|
|
|
|
|
|
|
|
|
|
GENERAL MOTORS COMPANY AND SUBSIDIARIES
Adjusted Automotive Free Cash Flow We measure adjusted automotive free cash flow as automotive operating cash flow from continuing operations less capital expenditures adjusted for management actions. For the year ended December 31, 2020, net automotive cash provided by operating activities under U.S. GAAP was $7.5 billion, capital expenditures were $5.3 billion and adjustments for management actions, primarily related to GMI restructuring, were $0.3 billion. For the year ended December 31, 2019, net automotive cash provided by operating activities under U.S. GAAP was $7.4 billion, capital expenditures were $7.5 billion and adjustments for management actions, primarily related to transformation activities, were $1.2 billion.
Status of Credit Ratings We receive ratings from four independent credit rating agencies: DBRS Limited (DBRS), Fitch Ratings (Fitch), Moody's Investor Service (Moody's) and Standard & Poor's (S&P). All four credit rating agencies currently rate our corporate credit at investment grade. The following table summarizes our credit ratings at January 29, 2021:
|
|
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|
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate
|
|
Revolving Credit Facilities
|
|
Senior Unsecured
|
|
Outlook
|
DBRS
|
BBB
|
|
BBB
|
|
N/A
|
|
Negative
|
Fitch
|
BBB-
|
|
BBB-
|
|
BBB-
|
|
Stable
|
Moody's
|
Investment Grade
|
|
Baa2
|
|
Baa3
|
|
Negative
|
S&P
|
BBB
|
|
BBB
|
|
BBB
|
|
Negative
|
Cruise Liquidity
The changes in our Cruise available liquidity in the year ended December 31, 2020 were primarily driven by operating cash flow. In January 2021, Cruise Holdings issued Class G Preferred Shares in exchange for $2.2 billion from Microsoft and other investors, including $1.0 billion from General Motors Holdings LLC. Refer to Note 26 to our consolidated financial statements for additional information. When Cruise's autonomous vehicles are ready for commercial deployment, Softbank Vision Fund (AIV M2), L.P. (The Vision Fund) is obligated to purchase additional convertible preferred shares (Cruise Preferred Shares) for $1.35 billion.
Cruise Cash Flow (Dollars in billions)
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
2020 vs. 2019 Change
|
|
|
|
2020
|
|
2019
|
|
2018
|
|
|
Net cash used in operating activities
|
$
|
(0.8)
|
|
|
$
|
(0.8)
|
|
|
$
|
(0.6)
|
|
|
$
|
—
|
|
|
|
Net cash used in investing activities
|
$
|
(0.7)
|
|
|
$
|
(0.3)
|
|
|
$
|
(0.1)
|
|
|
$
|
(0.4)
|
|
|
|
Net cash provided by financing activities
|
$
|
—
|
|
|
$
|
1.1
|
|
|
$
|
3.0
|
|
|
$
|
(1.1)
|
|
|
|
In the year ended December 31, 2020, Net cash provided by financing activities decreased primarily due to a reduction in the issuance of preferred shares.
Automotive Financing – GM Financial Liquidity GM Financial's primary sources of cash are finance charge income, leasing income and proceeds from the sale of terminated leased vehicles, net distributions from credit facilities, securitizations, secured and unsecured borrowings and collections and recoveries on finance receivables. GM Financial's primary uses of cash are purchases of retail finance receivables and leased vehicles, the funding of commercial finance receivables, repayment or repurchases of secured and unsecured debt, funding credit enhancement requirements in connection with securitizations and secured credit facilities, interest costs, operating expenses and dividend payments. The following table summarizes GM Financial's available liquidity (dollars in billions):
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
|
December 31, 2019
|
Cash and cash equivalents
|
$
|
5.1
|
|
|
$
|
3.3
|
|
Borrowing capacity on unpledged eligible assets
|
19.0
|
|
|
17.5
|
|
Borrowing capacity on committed unsecured lines of credit
|
0.5
|
|
|
0.3
|
|
Borrowing capacity on revolving credit facility, exclusive to GM Financial
|
2.0
|
|
|
2.0
|
|
Total GM Financial available liquidity
|
$
|
26.6
|
|
|
$
|
23.1
|
|
GENERAL MOTORS COMPANY AND SUBSIDIARIES
In the year ended December 31, 2020, available liquidity increased primarily due to an increase in cash and cash equivalents and available borrowing capacity on unpledged eligible assets, resulting from the issuance of securitization transactions, unsecured debt and preferred stock. GM Financial structures liquidity to support at least six months of GM Financial's expected net cash outflows, including new originations, without access to new debt financing transactions or other capital markets activity.
GM Financial has access to $16.5 billion of our revolving credit facilities with exclusive access to the 364-day, $2.0 billion facility. Refer to the "Automotive Liquidity" section of this MD&A for additional details. We have a support agreement with GM Financial which, among other things, establishes commitments of funding from us to GM Financial. This agreement also provides that we will continue to own all of GM Financial’s outstanding voting shares so long as any unsecured debt securities remain outstanding at GM Financial. In addition, we are required to use our commercially reasonable efforts to ensure GM Financial remains a subsidiary borrower under our corporate revolving credit facilities.
Credit Facilities In the normal course of business, in addition to using its available cash, GM Financial utilizes borrowings under its credit facilities, which may be secured or unsecured, and GM Financial repays these borrowings as appropriate under its cash management strategy. At December 31, 2020, secured, committed unsecured and uncommitted unsecured credit facilities totaled $26.2 billion, $0.5 billion and $1.5 billion with advances outstanding of $3.7 billion, an insignificant amount and $1.5 billion.
GM Financial Cash Flow (Dollars in billions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
2020 vs. 2019 Change
|
|
|
|
2020
|
|
2019
|
|
2018
|
|
|
Net cash provided by operating activities
|
$
|
8.0
|
|
|
$
|
8.1
|
|
|
$
|
7.4
|
|
|
$
|
(0.1)
|
|
|
|
Net cash used in investing activities
|
$
|
(9.3)
|
|
|
$
|
(5.0)
|
|
|
$
|
(17.5)
|
|
|
$
|
(4.3)
|
|
|
|
Net cash provided by (used in) financing activities
|
$
|
2.4
|
|
|
$
|
(3.5)
|
|
|
$
|
11.1
|
|
|
$
|
5.9
|
|
|
|
In the year ended December 31, 2020, Net cash provided by operating activities decreased primarily due to: (1) a decrease in leased vehicle income of $0.5 billion; and (2) a decrease in derivative collateral posting activities of $0.1 billion; partially offset by (3) a decrease in interest paid of $0.5 billion.
In the year ended December 31, 2020, Net cash used in investing activities increased primarily due to: (1) increased purchases of finance receivables of $4.9 billion; and (2) decreased collections and recoveries on finance receivables of $0.7 billion; partially offset by (3) decreased purchases of leased vehicles of $1.2 billion.
In the year ended December 31, 2020, Net cash provided by financing activities increased primarily due to: (1) an increase in borrowings of $22.2 billion; and (2) issuance of preferred stock of $0.5 billion; partially offset by (3) an increase in debt repayments of $16.4 billion; and (4) an increase in dividend payments of $0.4 billion.
Off-Balance Sheet Arrangements
Not applicable.
Contractual Obligations and Other Long-Term Liabilities
Not applicable.
Critical Accounting Estimates The consolidated financial statements are prepared in conformity with U.S. GAAP, which requires 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 the accounting estimates employed are appropriate and the resulting balances are reasonable; however, due to the inherent uncertainties in developing estimates, actual results could differ from the original estimates, requiring adjustments to these balances in future periods. Refer to Note 2 to our consolidated financial statements for our significant accounting policies related to our critical accounting estimates.
GENERAL MOTORS COMPANY AND SUBSIDIARIES
Product Warranty and Recall Campaigns The estimates related to product warranties 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. When little or no claims experience exists for a model year or a vehicle line, the estimate is based on comparable models.
We accrue the costs related to product warranty at the time of vehicle sale and we accrue the estimated cost of recall campaigns when they are probable and estimable, which is generally at the time of sale.
The estimates related to recall campaigns accrued at the time of vehicle sale are established by applying a paid loss approach that considers the number of historical recall campaigns and the estimated cost for each recall campaign. These estimates consider the nature, frequency and magnitude of historical recall campaigns, and use key assumptions including the number of historical periods and the weighting of historical data in the reserve studies. Costs associated with recall campaigns not accrued at the time of vehicle sale are estimated based on the estimated cost of repairs and the estimated vehicles to be repaired. Depending on part availability and time to complete repairs we may, from time to time, offer courtesy transportation at no cost to our customers. These estimates are re-evaluated on an ongoing basis and based on the best available information. Revisions are made when necessary based on changes in these factors.
The estimated amount accrued for recall campaigns at the time of vehicle sale is most sensitive to the estimated number of recall events, the number of vehicles per recall event, the assumed number of vehicles that will be brought in by customers for repair (take rate) and the cost per vehicle for each recall event. The estimated cost of a recall campaign that is accrued on an individual basis is most sensitive to our estimated assumed take rate that is primarily developed based on our historical take rate experience. A 10% increase in the estimated take rate for all recall campaigns would increase the estimated cost by approximately $0.4 billion.
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.
Sales Incentives The estimated effect of sales incentives offered to dealers and end customers is recorded as a reduction of Automotive net sales and revenue at the time of sale. There may be numerous types of incentives available at any particular time. Incentive programs are generally specific to brand, model or sales region and are for specified time periods, which may be extended. Significant factors used in estimating the cost of incentives include type of program, forecasted sales volume, product mix, and the rate of customer acceptance of incentive programs, all of which are estimated based on historical experience and assumptions concerning future customer behavior and market conditions. A change in any of these factors affecting the estimate could have a significant effect on recorded sales incentives. A 10% increase in the cost of incentives would increase the sales incentive liability by approximately $0.3 billion. Subsequent adjustments to incentive estimates are possible as facts and circumstances change over time, which could affect the revenue previously recognized in Automotive net sales and revenue.
GM Financial Allowance for Loan Losses The GM Financial retail finance receivables portfolio consists of smaller-balance, homogeneous loans that are carried at amortized cost, net of allowance for loan losses. The allowance for loan losses on retail finance receivables reflects net credit losses expected to be incurred over the remaining life of the retail finance receivables, which have a weighted average remaining life of approximately two years. We forecast net credit losses based on relevant information about past events, current conditions and forecast economic performance. We believe that the allowance is adequate to cover expected credit losses on the retail finance receivables; however, because the allowance for loan losses is based on estimates, there can be no assurance that the ultimate charge-off amount will not exceed such estimates or that our credit loss assumptions will not increase.
GM Financial incorporates assumptions about forecast charge-off recovery rates and overall economic performance in its allowance estimate. Used vehicle prices rebounded in the second half of 2020 after decreasing in March and April 2020, and recoveries outperformed the forecast. Therefore, GM Financial increased its recovery rate forecast as of December 31, 2020. Each 5% relative decrease/increase in the forecast recovery rates could increase/decrease our allowance for loan losses by approximately $0.1 billion.
GM Financial updated its forecast of economic performance in March 2020, following the onset of the COVID-19 pandemic, and has continued to monitor and update the forecast through December 31, 2020. At December 31, 2020, the weightings applied to the economic forecast scenarios considered resulted in an allowance for loan losses on the retail finance receivables portfolio of $1.9 billion. Using different possible weightings that GM Financial could apply to the economic forecast scenarios
GENERAL MOTORS COMPANY AND SUBSIDIARIES
result in an allowance for loan losses ranging from $1.8 billion to $2.0 billion. Actual economic data and recovery rates that are lower than those forecasted by GM Financial could result in an increase to the allowance for loan losses.
The GM Financial commercial finance receivables portfolio consists of floorplan financing as well as dealer loans, which are loans to finance improvements to dealership facilities, to provide working capital, and to purchase and/or finance dealership real estate. The allowance for loan losses on commercial finance receivables is also based on estimates that, effective January 1, 2020, include historical loss experience for the consolidated portfolio, as well as the forecast for industry vehicle sales. There can be no assurance that the ultimate charge-off amount will not exceed such estimates or that GM Financial's credit loss assumptions will not increase.
Valuation of GM Financial Equipment on Operating Lease Assets and Residuals GM Financial has investments in leased vehicles recorded as operating leases, which relate to vehicle leases to retail customers with lease terms that typically range from two to five years. At lease inception an estimate is made of the expected residual value at the end of the lease term. The expected residual value is based on third-party data that considers various data points and assumptions, including, but not limited to, recent auction values, the expected future volume of returning leased vehicles, used vehicle prices, manufacturer incentive programs and fuel prices. Realization of the residual values is dependent on the future ability to market the vehicles under prevailing market conditions. The customer is obligated to make payments during the lease term for the difference between the purchase price and the contract residual value plus a money factor. However, since the customer is not obligated to purchase the vehicle at the end of the contract, GM Financial is exposed to a risk of loss to the extent the customer returns the vehicle prior to or at the end of the lease term and the value of the vehicle is lower than the residual value estimated at lease inception.
The following table summarizes vehicles included in GM Financial equipment on operating leases, net (vehicles in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
|
December 31, 2019
|
Crossovers
|
964
|
|
|
972
|
|
Trucks
|
275
|
|
|
288
|
|
SUVs
|
92
|
|
|
108
|
|
Cars
|
140
|
|
|
238
|
|
Total
|
1,471
|
|
|
1,606
|
|
At December 31, 2020, the estimated residual value of GM Financial's leased vehicles was $29.2 billion. Depreciation reduces the carrying value of each leased asset in GM Financial's operating lease portfolio over time from its original acquisition value to its expected residual value at the end of the lease term.
GM Financial updated the residual value estimates on the operating lease portfolio to reflect the decrease in forecasted used vehicle prices in March 2020, following the onset of the COVID-19 pandemic, and has continued to monitor and update the residual value estimates through December 31, 2020. Used vehicle prices rebounded in the second half of 2020 after decreasing in March and April 2020, and sales proceeds on terminated leased vehicles outperformed the residual value estimates during the year ended December 31, 2020. Accordingly, GM Financial increased the residual value estimates at December 31, 2020, which will result in a prospective decrease in the depreciation rate over the remaining term of the leased vehicle portfolio. If used vehicle prices decrease, GM Financial would increase depreciation expense and/or record an impairment charge on the lease portfolio. If an impairment exists, GM Financial would determine any shortfall in recoverability of the leased vehicle asset groups by year, make and model. Recoverability is calculated as the excess of: (1) the sum of remaining lease payments plus estimated residual value; over (2) leased vehicles, net less deferred revenue. Alternatively, if used vehicle prices outperform GM Financial's latest estimates, it may record gains on sales of off-lease vehicles and/or decreased depreciation expense.
GENERAL MOTORS COMPANY AND SUBSIDIARIES
The following table illustrates the effect of a 1% relative change in the estimated residual values at December 31, 2020, which could increase or decrease depreciation expense over the remaining term of the leased vehicle portfolio, holding all other assumptions constant (dollars in millions):
|
|
|
|
|
|
|
|
|
Impact to Depreciation Expense
|
|
|
2021
|
$
|
198
|
|
|
|
2022
|
72
|
|
|
|
2023
|
21
|
|
|
|
2024 and thereafter
|
1
|
|
|
|
Total
|
$
|
292
|
|
|
|
Changes to residual values are rarely simultaneous across all maturities and segments, and also may impact return rates. If a decrease in residual values is concentrated among specific asset groups, the decrease could result in an immediate impairment charge. GM Financial reviewed the leased vehicle portfolio for indicators of impairment and determined that no impairment indicators were present at December 31, 2020 and 2019.
Used vehicle prices increased approximately 3% in 2020 compared to 2019, primarily due to low new vehicle inventory, largely driven by the suspension of manufacturing operations as a result of the COVID-19 pandemic, creating strong demand for used vehicles. In 2021, GM Financial expects used vehicle prices to decline by an amount in the low single digits on a percentage basis compared to 2020 levels as supply and demand dynamics normalize.
Pension and OPEB Plans Our 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, a discount rate, mortality rates of participants and expectation of mortality improvement. Our pension obligations include Korean statutory pension payments that are valued on a walk away basis. The expected long-term rate of 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 the asset classes that comprise the plans' asset mix. While the studies give appropriate consideration to recent plan performance and historical returns, the assumptions are primarily long-term, prospective rates of return.
In December 2020, an investment policy study was completed for the U.S. pension plans. As a result of changes to our capital market assumptions, the weighted-average long-term rate of return on assets decreased from 5.9% at December 31, 2019 to 5.6% at December 31, 2020. The expected long-term rate of return on plan assets used in determining pension expense for non-U.S. plans is determined in a similar manner to the U.S. plans.
Another key assumption in determining net pension and OPEB expense is the assumed discount rate used to discount plan obligations. We estimate the assumed discount rate for U.S. plans using a cash flow matching approach, which uses projected cash flows matched to spot rates along a high quality corporate bond yield curve to determine the weighted-average discount rate for the calculation of the present value of cash flows. We apply the individual annual yield curve rates instead of the assumed discount rate to determine the service cost and interest cost, which more specifically links the cash flows related to service cost and interest cost to bonds maturing in their year of payment.
The Society of Actuaries (SOA) issued mortality improvement tables in the three months ended December 31, 2020. We incorporated these SOA mortality improvement tables into our December 31, 2020 measurement of U.S. pension and OPEB plans' benefit obligations. The change in these assumptions decreased the December 31, 2020 U.S. pension and OPEB plans’ obligations by $0.7 billion.
Significant differences in actual experience or significant changes in assumptions may materially affect the pension obligations. The effects of actual results differing from assumptions and the changing of assumptions are included in unamortized net actuarial gains and losses that are subject to amortization to pension expense over future periods. The unamortized pre-tax actuarial loss on our pension plans was $8.4 billion and $6.7 billion at December 31, 2020 and 2019. The year-over-year change is primarily due to a decrease in discount rates partially offset by higher than expected asset returns.
GENERAL MOTORS COMPANY AND SUBSIDIARIES
The underfunded status of the U.S. pension plans remained unchanged in the year ended December 31, 2020 at $5.4 billion primarily due to: (1) the unfavorable effect of a decrease in discount rates of $5.6 billion; and (2) service and interest costs of $1.9 billion; partially offset by (3) a favorable effect of actual returns on plan assets of $6.6 billion; and (4) changes in mortality improvement assumptions and demographic gains of $0.9 billion.
The following table illustrates the sensitivity to a change in certain assumptions for the pension plans, holding all other assumptions constant:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Plans(a)
|
|
Non-U.S. Plans(a)
|
|
Effect on 2021 Pension Expense
|
|
Effect on December 31, 2020 PBO
|
|
Effect on 2021 Pension Expense
|
|
Effect on December 31, 2020 PBO
|
25 basis point decrease in discount rate
|
-$81
|
|
+$1,707
|
|
-$1
|
|
+$669
|
25 basis point increase in discount rate
|
+$103
|
|
-$1,634
|
|
+$1
|
|
-$634
|
25 basis point decrease in expected rate of return on assets
|
+$142
|
|
N/A
|
|
+$32
|
|
N/A
|
25 basis point increase in expected rate of return on assets
|
-$142
|
|
N/A
|
|
-$32
|
|
N/A
|
__________
(a)The sensitivity does not include the effects of the individual annual yield curve rates applied for the calculation of the service and interest cost.
Refer to Note 15 to our consolidated financial statements for additional information on pension contributions, investment strategies, assumptions, the change in benefit obligations and related plan assets, pension funding requirements and future net benefit payments. Refer to Note 2 to our consolidated financial statements for a discussion of the inputs used to determine fair value for each significant asset class or category.
Valuation of Deferred Tax Assets The ability to realize deferred tax assets depends on the ability to generate sufficient taxable income within the carryback or carryforward periods provided for in the tax law for each applicable tax jurisdiction. The assessment regarding whether a valuation allowance is required or should be adjusted is based on an evaluation of possible sources of taxable income and also considers all available positive and negative evidence factors. Our accounting for the valuation of deferred tax assets represents our best estimate of future events. Changes in our current estimates due to unanticipated market conditions and governmental legislative actions or events, could have a material effect on our ability to utilize deferred tax assets. Refer to Note 17 to our consolidated financial statements for additional information on the composition of valuation allowances.
Forward-Looking Statements This report and the other reports filed by us with the SEC from time to time, as well as statements incorporated by reference herein and related comments by our management, may include "forward-looking statements" within the meaning of the U.S. federal securities laws. Forward-looking statements are any statements other than statements of historical fact. Forward-looking statements represent our current judgment about possible future events and are often identified by words like “aim,” “anticipate,” “appears,” “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,” “will,” “would,” or the negative of any of those words or similar expressions. In making these statements, we rely on assumptions and analysis 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 future events or financial results, and our actual results may differ materially due to a variety of important factors, many of which are beyond our control. These factors, which may be revised or supplemented in subsequent reports we file with the SEC, include, among others, the following: (1) our ability to deliver new products, services and customer experiences in response to increased competition and changing consumer preferences in the automotive industry; (2) our ability to timely fund and introduce new and improved vehicle models, including electric vehicles, that are able to attract a sufficient number of consumers; (3) the success of our crossovers, SUVs and full-size pickup trucks; (4) our highly competitive industry, which is characterized by excess manufacturing capacity and the use of incentives, and the introduction of new and improved vehicle models by our competitors; (5) our ability to deliver a broad portfolio of electric vehicles and drive increased consumer adoption; (6) the unique technological, operational, regulatory and competitive risks related to the timing and commercialization of autonomous vehicles; (7) the ongoing COVID-19 pandemic; (8) global automobile market sales volume, which can be volatile; (9) our significant business in China, which is subject to unique operational, competitive, regulatory and economic risks; (10) our joint ventures, which we cannot operate solely for our benefit and over which we may have limited control; (11) the international scale and footprint of our operations, which exposes us to a variety of unique political, economic,
GENERAL MOTORS COMPANY AND SUBSIDIARIES
competitive and regulatory risks, including the risk of changes in government leadership and laws (including labor, tax and other laws), political instability and economic tensions between governments and changes in international trade policies, new barriers to entry and changes to or withdrawals from free trade agreements, public health crises, including the occurrence of a contagious disease or illness, such as the COVID-19 pandemic, changes in foreign exchange rates and interest rates, economic downturns in the countries in which we operate, differing local product preferences and product requirements, changes to and compliance with U.S. and foreign countries' export controls and economic sanctions, differing labor regulations, requirements and union relationships, differing dealer and franchise regulations and relationships, and difficulties in obtaining financing in foreign countries; (12) any significant disruption, including any work stoppages, at any of our manufacturing facilities; (13) the ability of our suppliers to deliver parts, systems and components without disruption and at such times to allow us to meet production schedules; (14) prices of raw materials used by us and our suppliers; (15) our ability to successfully and cost-effectively restructure our operations in the U.S. and various other countries and initiate additional cost reduction actions with minimal disruption; (16) the possibility that competitors may independently develop products and services similar to ours, or that our intellectual property rights are not sufficient to prevent competitors from developing or selling those products or services; (17) our ability to manage risks related to security breaches and other disruptions to our information technology systems and networked products, including connected vehicles and in-vehicle systems; (18) our ability to comply with increasingly complex, restrictive and punitive regulations relating to our enterprise data practices, including the collection, use, sharing and security of the Personal Identifiable Information of our customers, employees, or suppliers; (19) our ability to comply with extensive laws, regulations and policies applicable to our operations and products, including those relating to fuel economy and emissions and autonomous vehicles; (20) costs and risks associated with litigation and government investigations; (21) the costs and effect on our reputation of product safety recalls and alleged defects in products and services; (22) any additional tax expense or exposure; (23) our continued ability to develop captive financing capability through GM Financial; and (24) any significant increase in our pension funding requirements. For a further discussion of these and other risks and uncertainties, refer to Part I, Item 1A. Risk Factors.
We caution readers not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update publicly or otherwise revise any forward-looking statements, whether as a result of new information, future events or other factors, except where we are expressly required to do so by law.
* * * * * * *
Item 8. Financial Statements and Supplementary Data
CONSOLIDATED INCOME STATEMENTS
(In millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
2020
|
|
2019
|
|
2018
|
Net sales and revenue
|
|
|
|
|
|
Automotive
|
$
|
108,673
|
|
|
$
|
122,697
|
|
|
$
|
133,045
|
|
GM Financial
|
13,812
|
|
|
14,540
|
|
|
14,004
|
|
Total net sales and revenue (Note 3)
|
122,485
|
|
|
137,237
|
|
|
147,049
|
|
Costs and expenses
|
|
|
|
|
|
Automotive and other cost of sales
|
97,539
|
|
|
110,651
|
|
|
120,656
|
|
GM Financial interest, operating and other expenses
|
11,274
|
|
|
12,614
|
|
|
12,298
|
|
Automotive and other selling, general and administrative expense
|
7,038
|
|
|
8,491
|
|
|
9,650
|
|
|
|
|
|
|
|
Total costs and expenses
|
115,851
|
|
|
131,756
|
|
|
142,604
|
|
Operating income
|
6,634
|
|
|
5,481
|
|
|
4,445
|
|
Automotive interest expense
|
1,098
|
|
|
782
|
|
|
655
|
|
Interest income and other non-operating income, net (Note 19)
|
1,885
|
|
|
1,469
|
|
|
2,596
|
|
|
|
|
|
|
|
Equity income (Note 8)
|
674
|
|
|
1,268
|
|
|
2,163
|
|
Income before income taxes
|
8,095
|
|
|
7,436
|
|
|
8,549
|
|
Income tax expense (Note 17)
|
1,774
|
|
|
769
|
|
|
474
|
|
Income from continuing operations
|
6,321
|
|
|
6,667
|
|
|
8,075
|
|
Loss from discontinued operations, net of tax (Note 22)
|
—
|
|
|
—
|
|
|
70
|
|
Net income
|
6,321
|
|
|
6,667
|
|
|
8,005
|
|
Net loss attributable to noncontrolling interests
|
106
|
|
|
65
|
|
|
9
|
|
Net income attributable to stockholders
|
$
|
6,427
|
|
|
$
|
6,732
|
|
|
$
|
8,014
|
|
|
|
|
|
|
|
Net income attributable to common stockholders
|
$
|
6,247
|
|
|
$
|
6,581
|
|
|
$
|
7,916
|
|
|
|
|
|
|
|
Earnings per share (Note 21)
|
|
|
|
|
|
Basic earnings per common share – continuing operations
|
$
|
4.36
|
|
|
$
|
4.62
|
|
|
$
|
5.66
|
|
Basic loss per common share – discontinued operations
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.05
|
|
Basic earnings per common share
|
$
|
4.36
|
|
|
$
|
4.62
|
|
|
$
|
5.61
|
|
Weighted-average common shares outstanding – basic
|
1,433
|
|
|
1,424
|
|
|
1,411
|
|
|
|
|
|
|
|
Diluted earnings per common share – continuing operations
|
$
|
4.33
|
|
|
$
|
4.57
|
|
|
$
|
5.58
|
|
Diluted loss per common share – discontinued operations
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.05
|
|
Diluted earnings per common share
|
$
|
4.33
|
|
|
$
|
4.57
|
|
|
$
|
5.53
|
|
Weighted-average common shares outstanding – diluted
|
1,442
|
|
|
1,439
|
|
|
1,431
|
|
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
2020
|
|
2019
|
|
2018
|
Net income
|
$
|
6,321
|
|
|
$
|
6,667
|
|
|
$
|
8,005
|
|
Other comprehensive income, net of tax (Note 20)
|
|
|
|
|
|
Foreign currency translation adjustments and other
|
(523)
|
|
|
(6)
|
|
|
(715)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Defined benefit plans
|
(1,795)
|
|
|
(2,122)
|
|
|
(221)
|
|
|
|
|
|
|
|
Other comprehensive loss, net of tax
|
(2,318)
|
|
|
(2,128)
|
|
|
(936)
|
|
Comprehensive income
|
4,003
|
|
|
4,539
|
|
|
7,069
|
|
Comprehensive loss attributable to noncontrolling interests
|
92
|
|
|
76
|
|
|
15
|
|
Comprehensive income attributable to stockholders
|
$
|
4,095
|
|
|
$
|
4,615
|
|
|
$
|
7,084
|
|
Reference should be made to the notes to consolidated financial statements.
GENERAL MOTORS COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
|
December 31, 2019
|
ASSETS
|
|
|
|
Current Assets
|
|
|
|
Cash and cash equivalents
|
$
|
19,992
|
|
|
$
|
19,069
|
|
Marketable debt securities (Note 4)
|
9,046
|
|
|
4,174
|
|
|
|
|
|
Accounts and notes receivable (net of allowance of $224 and $201)
|
8,035
|
|
|
6,797
|
|
GM Financial receivables, net (Note 5; Note 11 at VIEs)
|
26,209
|
|
|
26,601
|
|
Inventories (Note 6)
|
10,235
|
|
|
10,398
|
|
Other current assets (Note 4; Note 11 at VIEs)
|
7,407
|
|
|
7,953
|
|
|
|
|
|
Total current assets
|
80,924
|
|
|
74,992
|
|
Non-current Assets
|
|
|
|
|
|
|
|
GM Financial receivables, net (Note 5; Note 11 at VIEs)
|
31,783
|
|
|
26,355
|
|
Equity in net assets of nonconsolidated affiliates (Note 8)
|
8,406
|
|
|
8,562
|
|
Property, net (Note 9)
|
37,632
|
|
|
38,750
|
|
Goodwill and intangible assets, net (Note 10)
|
5,230
|
|
|
5,337
|
|
|
|
|
|
Equipment on operating leases, net (Note 7; Note 11 at VIEs)
|
39,819
|
|
|
42,055
|
|
Deferred income taxes (Note 17)
|
24,136
|
|
|
24,640
|
|
Other assets (Note 4; Note 11 at VIEs)
|
7,264
|
|
|
7,346
|
|
|
|
|
|
Total non-current assets
|
154,270
|
|
|
153,045
|
|
Total Assets
|
$
|
235,194
|
|
|
$
|
228,037
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
Accounts payable (principally trade)
|
$
|
19,928
|
|
|
$
|
21,018
|
|
Short-term debt and current portion of long-term debt (Note 13)
|
|
|
|
Automotive
|
1,276
|
|
|
1,897
|
|
GM Financial (Note 11 at VIEs)
|
35,637
|
|
|
35,503
|
|
Accrued liabilities (Note 12)
|
23,069
|
|
|
26,487
|
|
|
|
|
|
Total current liabilities
|
79,910
|
|
|
84,905
|
|
Non-current Liabilities
|
|
|
|
Long-term debt (Note 13)
|
|
|
|
Automotive
|
16,193
|
|
|
12,489
|
|
GM Financial (Note 11 at VIEs)
|
56,788
|
|
|
53,435
|
|
Postretirement benefits other than pensions (Note 15)
|
6,277
|
|
|
5,935
|
|
Pensions (Note 15)
|
12,902
|
|
|
12,170
|
|
Other liabilities (Note 12)
|
13,447
|
|
|
13,146
|
|
|
|
|
|
Total non-current liabilities
|
105,607
|
|
|
97,175
|
|
Total Liabilities
|
185,517
|
|
|
182,080
|
|
Commitments and contingencies (Note 16)
|
|
|
|
Equity (Note 20)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock, $0.01 par value
|
14
|
|
|
14
|
|
Additional paid-in capital
|
26,542
|
|
|
26,074
|
|
Retained earnings
|
31,962
|
|
|
26,860
|
|
Accumulated other comprehensive loss
|
(13,488)
|
|
|
(11,156)
|
|
Total stockholders’ equity
|
45,030
|
|
|
41,792
|
|
Noncontrolling interests
|
4,647
|
|
|
4,165
|
|
Total Equity
|
49,677
|
|
|
45,957
|
|
Total Liabilities and Equity
|
$
|
235,194
|
|
|
$
|
228,037
|
|
Reference should be made to the notes to consolidated financial statements.
GENERAL MOTORS COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
2020
|
|
2019
|
|
2018
|
Cash flows from operating activities
|
|
|
|
|
|
Income from continuing operations
|
$
|
6,321
|
|
|
$
|
6,667
|
|
|
$
|
8,075
|
|
Depreciation and impairment of Equipment on operating leases, net
|
7,178
|
|
|
7,332
|
|
|
7,604
|
|
Depreciation, amortization and impairment charges on Property, net
|
5,637
|
|
|
6,786
|
|
|
6,065
|
|
Foreign currency remeasurement and transaction (gains) losses
|
203
|
|
|
(85)
|
|
|
168
|
|
Undistributed earnings of nonconsolidated affiliates, net
|
524
|
|
|
585
|
|
|
(141)
|
|
Pension contributions and OPEB payments
|
(851)
|
|
|
(985)
|
|
|
(2,069)
|
|
Pension and OPEB income, net
|
(765)
|
|
|
(484)
|
|
|
(1,280)
|
|
Provision (benefit) for deferred taxes
|
925
|
|
|
(133)
|
|
|
(112)
|
|
Change in other operating assets and liabilities (Note 25)
|
(399)
|
|
|
(3,789)
|
|
|
(1,376)
|
|
Other operating activities
|
(2,103)
|
|
|
(873)
|
|
|
(1,678)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
16,670
|
|
|
15,021
|
|
|
15,256
|
|
Cash flows from investing activities
|
|
|
|
|
|
Expenditures for property
|
(5,300)
|
|
|
(7,592)
|
|
|
(8,761)
|
|
Available-for-sale marketable securities, acquisitions
|
(16,204)
|
|
|
(4,075)
|
|
|
(2,820)
|
|
|
|
|
|
|
|
Available-for-sale marketable securities, liquidations
|
11,941
|
|
|
6,265
|
|
|
5,108
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of finance receivables, net
|
(30,090)
|
|
|
(24,538)
|
|
|
(25,671)
|
|
Principal collections and recoveries on finance receivables
|
19,726
|
|
|
22,005
|
|
|
17,048
|
|
Purchases of leased vehicles, net
|
(15,233)
|
|
|
(16,404)
|
|
|
(16,736)
|
|
Proceeds from termination of leased vehicles
|
13,399
|
|
|
13,302
|
|
|
10,864
|
|
Other investing activities
|
(65)
|
|
|
138
|
|
|
39
|
|
Net cash used in investing activities – continuing operations
|
(21,826)
|
|
|
(10,899)
|
|
|
(20,929)
|
|
Net cash provided by investing activities – discontinued operations (Note 22)
|
—
|
|
|
—
|
|
|
166
|
|
Net cash used in investing activities
|
(21,826)
|
|
|
(10,899)
|
|
|
(20,763)
|
|
Cash flows from financing activities
|
|
|
|
|
|
Net increase (decrease) in short-term debt
|
277
|
|
|
(312)
|
|
|
1,186
|
|
Proceeds from issuance of debt (original maturities greater than three months)
|
78,527
|
|
|
36,937
|
|
|
43,801
|
|
Payments on debt (original maturities greater than three months)
|
(72,663)
|
|
|
(39,156)
|
|
|
(33,323)
|
|
|
|
|
|
|
|
Proceeds from issuance of subsidiary preferred and common stock (Note 20)
|
492
|
|
|
457
|
|
|
2,862
|
|
Dividends paid
|
(669)
|
|
|
(2,350)
|
|
|
(2,242)
|
|
Other financing activities
|
(412)
|
|
|
(253)
|
|
|
(830)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities
|
5,552
|
|
|
(4,677)
|
|
|
11,454
|
|
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(222)
|
|
|
2
|
|
|
(299)
|
|
Net increase (decrease) in cash, cash equivalents and restricted cash
|
174
|
|
|
(553)
|
|
|
5,648
|
|
|
|
|
|
|
|
Cash, cash equivalents and restricted cash at beginning of period
|
22,943
|
|
|
23,496
|
|
|
17,848
|
|
Cash, cash equivalents and restricted cash at end of period
|
$
|
23,117
|
|
|
$
|
22,943
|
|
|
$
|
23,496
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Significant Non-cash Investing and Financing Activity
|
|
|
|
|
|
Non-cash property additions – continuing operations
|
$
|
2,300
|
|
|
$
|
2,837
|
|
|
$
|
3,813
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reference should be made to the notes to consolidated financial statements.
GENERAL MOTORS COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EQUITY
(In millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stockholders’
|
|
Noncontrolling Interests
|
|
Total Equity
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Loss
|
|
Balance at January 1, 2018
|
$
|
14
|
|
|
$
|
25,371
|
|
|
$
|
17,627
|
|
|
$
|
(8,011)
|
|
|
$
|
1,199
|
|
|
$
|
36,200
|
|
Adoption of accounting standards
|
—
|
|
|
—
|
|
|
(1,046)
|
|
|
(98)
|
|
|
—
|
|
|
(1,144)
|
|
Net income
|
—
|
|
|
—
|
|
|
8,014
|
|
|
—
|
|
|
(9)
|
|
|
8,005
|
|
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(930)
|
|
|
(6)
|
|
|
(936)
|
|
Purchase of common stock
|
—
|
|
|
(91)
|
|
|
(99)
|
|
|
—
|
|
|
—
|
|
|
(190)
|
|
Issuance of subsidiary preferred and common stock (Note 20)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,862
|
|
|
2,862
|
|
Stock based compensation
|
—
|
|
|
287
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
287
|
|
Cash dividends paid on common stock
|
—
|
|
|
—
|
|
|
(2,144)
|
|
|
—
|
|
|
—
|
|
|
(2,144)
|
|
Dividends to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(169)
|
|
|
(169)
|
|
Other
|
—
|
|
|
(4)
|
|
|
(30)
|
|
|
—
|
|
|
40
|
|
|
6
|
|
Balance at December 31, 2018
|
14
|
|
|
25,563
|
|
|
22,322
|
|
|
(9,039)
|
|
|
3,917
|
|
|
42,777
|
|
Net income
|
—
|
|
|
—
|
|
|
6,732
|
|
|
—
|
|
|
(65)
|
|
|
6,667
|
|
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,117)
|
|
|
(11)
|
|
|
(2,128)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of subsidiary preferred stock (Note 20)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
457
|
|
|
457
|
|
Stock based compensation
|
—
|
|
|
409
|
|
|
(34)
|
|
|
—
|
|
|
—
|
|
|
375
|
|
Cash dividends paid on common stock
|
—
|
|
|
—
|
|
|
(2,165)
|
|
|
—
|
|
|
—
|
|
|
(2,165)
|
|
Dividends to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(166)
|
|
|
(166)
|
|
Other
|
—
|
|
|
102
|
|
|
5
|
|
|
—
|
|
|
33
|
|
|
140
|
|
Balance at December 31, 2019
|
14
|
|
|
26,074
|
|
|
26,860
|
|
|
(11,156)
|
|
|
4,165
|
|
|
45,957
|
|
Adoption of accounting standards (Note 2)
|
—
|
|
|
—
|
|
|
(660)
|
|
|
—
|
|
|
—
|
|
|
(660)
|
|
Net income
|
—
|
|
|
—
|
|
|
6,427
|
|
|
—
|
|
|
(106)
|
|
|
6,321
|
|
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,332)
|
|
|
14
|
|
|
(2,318)
|
|
Purchase of common stock
|
—
|
|
|
(57)
|
|
|
(33)
|
|
|
—
|
|
|
—
|
|
|
(90)
|
|
Issuance of subsidiary preferred stock (Note 20)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
544
|
|
|
544
|
|
Stock based compensation
|
—
|
|
|
525
|
|
|
(10)
|
|
|
—
|
|
|
—
|
|
|
515
|
|
Cash dividends paid on common stock
|
—
|
|
|
—
|
|
|
(545)
|
|
|
—
|
|
|
—
|
|
|
(545)
|
|
Dividends to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(46)
|
|
|
(46)
|
|
Other
|
—
|
|
|
—
|
|
|
(77)
|
|
|
—
|
|
|
76
|
|
|
(1)
|
|
Balance at December 31, 2020
|
$
|
14
|
|
|
$
|
26,542
|
|
|
$
|
31,962
|
|
|
$
|
(13,488)
|
|
|
$
|
4,647
|
|
|
$
|
49,677
|
|
Reference should be made to the notes to consolidated financial statements.
GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Nature of Operations and Basis of Presentation
General Motors Company was incorporated as a Delaware corporation in 2009. We design, build and sell trucks, crossovers, cars and automobile parts worldwide and are investing in and growing an autonomous vehicle business. We also provide automotive financing services through GM Financial. We analyze the results of our continuing operations through the following segments: GMNA, GMI, Cruise and GM Financial. Cruise is our global segment responsible for the development and commercialization of autonomous vehicle technology. Nonsegment operations are classified as Corporate. Corporate includes certain centrally recorded income and costs such as interest, income taxes, corporate expenditures and certain nonsegment-specific revenues and expenses. The consolidated financial statements are prepared in conformity with U.S. GAAP. Except for per share amounts or as otherwise specified, amounts presented within tables are stated in millions.
Principles of Consolidation We consolidate entities that we control due to ownership of a majority voting interest and we consolidate variable interest entities (VIEs) when we are the primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation. 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.
Use of Estimates in the Preparation of the Financial Statements Accounting estimates are an integral part of the consolidated financial statements. These estimates require the use of 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 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.
GM Financial The amounts presented for GM Financial have been adjusted to include the effect of our tax attributes on GM Financial's deferred tax positions and provision for income taxes, which are not applicable to GM Financial on a stand-alone basis, and to eliminate the effect of transactions between GM Financial and the other members of the consolidated group. Accordingly, the amounts presented will differ from those presented by GM Financial on a stand-alone basis.
Note 2. Significant Accounting Policies
The accounting policies that follow are utilized by our automotive, automotive financing and Cruise operations, unless otherwise indicated. We adopted Accounting Standards Update (ASU) 2016-13 "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" (ASU 2016-13) on January 1, 2020 on a modified retrospective basis. As such, the comparative information in prior periods was not restated and continues to be reported under the accounting standards in effect for those periods. The accounting policies that follow for Marketable Debt Securities, Accounts and Notes Receivable and GM Financial Receivables that were affected by the adoption of ASU 2016-13 became effective on January 1, 2020.
Revenue Recognition
Automotive Automotive net sales and revenue represents the amount of consideration to which we expect to be entitled in exchange for vehicle, parts and accessories and services and other sales. The consideration recognized represents the amount received, typically shortly after the sale to a customer, net of estimated dealer and customer sales incentives we reasonably expect to pay. Significant factors in determining our estimates of incentives include forecasted sales volume, product mix and the rate of customer acceptance of incentive programs, all of which are estimated based on historical experience and assumptions concerning future customer behavior and market conditions. Subsequent adjustments to incentive estimates are possible as facts and circumstances change over time. A portion of the consideration received is deferred for separate performance obligations, such as maintenance and vehicle connectivity, that will be provided to our customers at a future date. Taxes assessed by various government entities, such as sales, use and value-added taxes, collected at the time of the vehicle sale are excluded from Automotive net sales and revenue. Costs for shipping and handling activities that occur after control of the vehicle transfers to the dealer are recognized at the time of sale and presented in Automotive and other cost of sales.
Vehicle, Parts and Accessories For the majority of vehicle and accessories sales, our customers obtain control and we recognize revenue when the vehicle transfers to the dealer, which generally occurs when the vehicle is released to the carrier responsible for transporting it to a dealer. Revenue, net of estimated returns, is recognized on the sale of parts upon delivery to
GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
the customer. When our customers have a right to return eligible parts and accessories, we consider the returns in our estimation of the transaction price.
Transfers to daily rental companies are accounted for as sales, with revenue recognized at the time of transfer. We defer revenue for remarketing obligations, record a residual value guarantee and reflect a liability for amounts expected to be paid once the remarketing services are complete at the time of certain transfers and recognize deferred revenue in earnings upon completion of the remarketing service. Transfers containing a substantive repurchase obligation are accounted for as operating leases and rental income is recognized over the estimated term of the lease. Our total exposure to vehicle repurchase obligations is reduced to the extent vehicles are able to be resold to a third party.
Used Vehicles Proceeds from the auction of vehicles returned from daily rental car companies and vehicles utilized by our employees are recognized in Automotive net sales and revenue upon transfer of control of the vehicle to the customer and the related vehicle carrying value is recognized in Automotive and other cost of sales.
Services and Other Services and other revenue primarily consists of revenue from vehicle-related service arrangements and after-sale services such as maintenance, OnStar, vehicle connectivity and extended service warranties. For those service arrangements that are bundled with a vehicle sale, a portion of the revenue from the sale is allocated to the service component and recognized as deferred revenue within Accrued liabilities or Other liabilities. We recognize revenue for bundled services and services sold separately as services are performed, typically over a period of up to seven years.
Automotive Financing - GM Financial Finance charge income earned on finance receivables is recognized using the effective interest method. Fees and commissions received (including incentive payments) and direct costs of originating loans are deferred and amortized over the term of the related finance receivables using the effective interest method and are removed from the consolidated balance sheets when the related finance receivables are fully charged off or paid in full. Accrual of finance charge income on retail finance receivables is generally suspended on accounts that are more than 60 days delinquent, accounts in bankruptcy and accounts in repossession. Payments received on nonaccrual loans are first applied to any fees due, then to any interest due and then any remaining amounts are applied to principal. Interest accrual generally resumes once an account has received payments bringing the delinquency to less than 60 days past due. Accrual of finance charge income on commercial finance receivables is generally suspended on accounts that are more than 90 days delinquent, upon receipt of a bankruptcy notice from a borrower, or where reasonable doubt exists about the full collectability of contractually agreed upon principal and interest. Payments received on nonaccrual loans are first applied to principal. Interest accrual resumes once an account has received payments bringing the account fully current and collection of contractual principal and interest is reasonably assured (including amounts previously charged off).
Income from operating lease assets, which includes lease origination fees, net of lease origination costs, is recorded as operating lease revenue on a straight-line basis over the term of the lease agreement. Gains or losses realized upon disposition of off-lease assets including any payments received from lessees upon lease termination, are included in GM Financial interest, operating and other.
Advertising and Promotion Expenditures Advertising and promotion expenditures, which are expensed as incurred in Automotive and other selling, general and administrative expense, were $2.7 billion, $3.7 billion and $4.0 billion in the years ended December 31, 2020, 2019 and 2018.
Research and Development Expenditures Research and development expenditures, which are expensed as incurred in Automotive and other cost of sales, were $6.2 billion, $6.8 billion and $7.8 billion in the years ended December 31, 2020, 2019 and 2018. We enter into cost sharing arrangements with third parties or nonconsolidated affiliates for product-related research, engineering, design and development activities. Cost sharing payments and fees related to these arrangements are presented in Automotive and other cost of sales.
Cash Equivalents and Restricted Cash Cash equivalents are defined as short-term, highly-liquid investments with original maturities of 90 days or less. Certain operating agreements require us to post cash as collateral. Cash and cash equivalents subject to contractual restrictions and not readily available are classified as restricted cash. Restricted cash is invested in accordance with the terms of the underlying agreements and include amounts related to various deposits, escrows and other cash collateral. Restricted cash is included in Other current assets and Other assets in the consolidated balance sheets.
GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Fair Value Measurements A three-level valuation hierarchy, based upon observable and unobservable inputs, is used for fair value measurements. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions based on the best evidence available. These two types of inputs create the following fair value hierarchy: Level 1 – Quoted prices for identical instruments in active markets; Level 2 – Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations whose significant inputs are observable; and Level 3 – Instruments whose significant inputs are unobservable.
Marketable Debt Securities We generally classify marketable debt securities as available-for-sale. Various factors, including turnover of holdings and investment guidelines, are considered in determining the classification of securities. Available-for-sale debt securities are recorded at fair value with non-credit related unrealized gains and losses recorded in Accumulated other comprehensive loss until realized. Non-credit related unrealized losses are reclassified to Interest income and other non-operating income, net if we intend to sell the security or it is more likely than not that we will be required to sell the security before the recovery of the unrealized loss. Credit losses are recorded in Interest income and other non-operating income, net. An evaluation is made quarterly to determine if any portion of unrealized losses recorded in Accumulated other comprehensive loss needs to be reclassified.
We determine realized gains and losses for all debt securities using the specific identification method and measure the fair value of our marketable debt securities using a market approach where identical or comparable prices are available and an income approach in other cases. If quoted market prices are not available, fair values of securities are determined using prices from a pricing service, pricing models, quoted prices of securities with similar characteristics or discounted cash flow models. These prices represent non-binding quotes. Our pricing service utilizes industry-standard pricing models that consider various inputs. We conduct an annual review of our pricing service and believe the prices received from our pricing service are a reliable representation of exit prices.
Accounts and Notes Receivable Accounts and notes receivable primarily consists of amounts that are due and payable from our customers for the sale of vehicles, parts, and accessories. We evaluate the collectability of receivables each reporting period and record an allowance for doubtful accounts to present the net amount expected to be collected on our receivables. Additions to the allowance are charged to bad debt expense reported in Automotive and other selling, general and administrative expense and were insignificant in the years ended December 31, 2020, 2019 and 2018.
GM Financial Receivables Finance receivables are carried at amortized cost, net of allowance for loan losses. Provisions for loan losses are charged to operations in amounts sufficient to maintain the allowance for loan losses at levels considered adequate to cover expected credit losses on the finance receivables. For retail finance receivables, GM Financial uses static pool modeling techniques to determine the allowance for loan losses expected over the remaining life of the receivables, which is supplemented by management judgment. The modeling techniques incorporate reasonable and supportable forecasts of economic conditions over the expected remaining life of the finance receivables. The economic forecasts incorporate factors which vary by region that GM Financial believes will have the largest impact on expected losses, including unemployment rates, interest rate spreads, disposable personal income and growth rates in gross domestic product.
Troubled debt restructurings (TDRs) are grouped separately for purposes of measuring the allowance. The allowance for TDRs uses static pool modeling techniques like non-TDR retail finance receivables to determine the expected loss amount. The expected cash flows of the receivables are then discounted at the original weighted average effective interest rate of the pool. Factors considered when estimating the allowance for TDRs are based on an evaluation of historical and current information, which may be supplemented by management judgment. Finance charge income from loans classified as TDRs is accounted for in the same manner as other accruing loans. Cash collections on these loans are allocated according to the same payment hierarchy methodology applied to loans that are not classified as TDRs.
Commercial finance receivables are carried at amortized cost, net of allowance for loan losses and amounts held under a cash management program. GM Financial establishes the allowance for loan losses based on historical loss experience, as well as the forecast for industry vehicle sales, which is the economic indicator believed to have the largest impact on expected losses.
Inventories Inventories are stated at the lower of cost or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business less cost to sell, and considers general market and economic conditions, periodic reviews of current profitability of vehicles, product warranty costs and the effect of estimated sales incentives. Net realizable value for off-lease and other vehicles is current auction sales proceeds less disposal and warranty costs. Productive material, supplies, work in process and service parts are reviewed to determine if inventory quantities are in excess of forecasted usage or if they have become obsolete.
GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Equipment on Operating Leases Equipment on operating leases, net consists of vehicle leases to retail customers with lease terms of two to five years and vehicle sales to rental car companies that are expected to be repurchased in an average of seven months. We are exposed to changes in the residual values of these assets. The residual values represent estimates of the values of the leased vehicles at the end of the lease agreements and are determined based on forecasted auction proceeds when there is a reliable basis to make such a determination. Realization of the residual values is dependent on the future ability to market the vehicles under prevailing market conditions. The estimate of the residual value is evaluated over the life of the arrangement and adjustments may be made to the extent the expected value of the vehicle changes. Adjustments may be in the form of revisions to the depreciation rate or recognition of an impairment charge. A lease vehicle asset group is determined to be impaired if an impairment indicator exists and the expected future cash flows, which include estimated residual values, are lower than the carrying amount of the vehicle asset group. If the carrying amount is considered impaired an impairment charge is recorded for the amount by which the carrying amount exceeds fair value of the vehicle asset group. Fair value is determined primarily using the anticipated cash flows, including estimated residual values. In our automotive operations when a vehicle that is accounted for as a lease is returned the asset is reclassified from Equipment on operating leases, net to Inventories at the lower of cost or net realizable value. Upon disposition, proceeds are recorded in Automotive net sales and revenue and costs are recorded in Automotive and other cost of sales. In our automotive finance operations when a leased vehicle is returned or repossessed the asset is recorded in Other assets at the lower of amortized cost or net realizable value. Upon disposition a gain or loss is recorded in GM Financial interest, operating and other expenses for any difference between the net book value of the leased asset and the proceeds from the disposition of the asset.
Equity Investments When events and circumstances warrant, equity investments accounted for under the equity method of accounting are evaluated for impairment. An impairment charge is recorded whenever a decline in value of an equity investment below its carrying amount is determined to be other-than-temporary. Impairment charges related to equity method investments are recorded in Equity income. Equity investments that are not accounted for under the equity method of accounting are measured at fair value with changes in fair value recorded in Interest income and other non-operating income, net.
Property, net Property, plant and equipment, including internal use software, is recorded at cost. Major improvements that extend the useful life or add functionality are capitalized. The gross amount of assets under finance leases is included in property, plant and equipment. Expenditures for repairs and maintenance are charged to expense as incurred. We depreciate depreciable property using the straight-line method. Leasehold improvements are amortized over the period of lease or the life of the asset, whichever is shorter. The amortization of the assets under finance leases is included in depreciation expense. Upon retirement or disposition of property, plant and equipment, the cost and related accumulated depreciation are eliminated and any resulting gain or loss is recorded in earnings. Impairment charges related to property are recorded in Automotive and other cost of sales, Automotive and other selling, general and administrative expense or GM Financial interest, operating and other expenses.
Special Tools Special tools represent product-specific propulsion and non-propulsion related tools, dies, molds and other items used in the vehicle manufacturing process. Expenditures for special tools are recorded at cost and are capitalized. We amortize special tools over their estimated useful lives using the straight-line method or an accelerated amortization method based on their historical and estimated production volume. Impairment charges related to special tools are recorded in Automotive and other cost of sales.
Goodwill Goodwill is not amortized but rather tested for impairment annually on October 1 and when events warrant such a review. The impairment test entails an assessment of qualitative factors to determine whether it is more likely than not that an impairment exists. If it is more likely than not that an impairment exists, then a quantitative impairment test is performed. Impairment exists when the carrying amount of a reporting unit exceeds its fair value.
Intangible Assets, net Intangible assets, excluding goodwill, primarily include brand names, technology and intellectual property, customer relationships and dealer networks. Intangible assets are amortized on a straight-line or an accelerated method of amortization over their estimated useful lives. An accelerated amortization method reflecting the pattern in which the asset will be consumed is utilized if that pattern can be reliably determined. We consider the period of expected cash flows and underlying data used to measure the fair value of the intangible assets when selecting a useful life. Amortization of developed technology and intellectual property is recorded in Automotive and other cost of sales. Amortization of brand names, customer relationships and our dealer networks is recorded in Automotive and other selling, general and administrative expense or GM Financial interest, operating and other expenses. Impairment charges, if any, related to intangible assets are recorded in Automotive and other selling, general and administrative expense or Automotive and other cost of sales.
GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Valuation of Long-Lived Assets The carrying amount of long-lived assets and finite-lived intangible assets to be held and used in the business is evaluated for impairment when events and circumstances warrant. If the carrying amount of a long-lived asset group is considered impaired, a loss is recorded based on the amount by which the carrying amount exceeds fair value. Product-specific long-lived asset groups and non-product specific long-lived assets are separately tested for impairment on an asset group basis. Fair value is determined using either the market or sales comparison approach, cost approach or anticipated cash flows discounted at a rate commensurate with the risk involved. Long-lived assets to be disposed of other than by sale are considered held for use until disposition.
Pension and OPEB Plans
Attribution, Methods and Assumptions The cost of benefits provided by defined benefit pension plans is recorded in the period employees provide service. The cost of pension plan amendments that provide for benefits already earned by plan participants is amortized over the expected period of benefit which may be the duration of the applicable collective bargaining agreement specific to the plan, the expected future working lifetime or the life expectancy of the plan participants.
The cost of medical, dental, legal service and life insurance benefits provided through postretirement benefit plans is recorded in the period employees provide service. The cost of postretirement plan amendments that provide for benefits already earned by plan participants is amortized over the expected period of benefit which may be the average period to full eligibility or the average life expectancy of the plan participants.
An expected return on plan asset methodology is utilized to calculate future pension expense for certain significant funded benefit plans. A market-related value of plan assets methodology is also utilized that averages gains and losses on the plan assets over a period of years to determine future pension expense. The methodology recognizes 60% of the difference between the fair value of assets and the expected calculated value in the first year and 10% of that difference over each of the next four years.
The discount rate assumption is established for each of the retirement-related benefit plans at their respective measurement dates. In the U.S. we use a cash flow matching approach that uses projected cash flows matched to spot rates along a high-quality corporate bond yield curve to determine the present value of cash flows to calculate a single equivalent discount rate. We apply individual annual yield curve rates to determine the service cost and interest cost for our pension and OPEB plans to more specifically link the cash flows related to service cost and interest cost to bonds maturing in their year of payment.
The benefit obligation for pension plans in Canada, the U.K. and Germany represents 93% of the non-U.S. pension benefit obligation at December 31, 2020. The discount rates for plans in Canada, the U.K. and Germany are determined using a cash flow matching approach like the U.S.
Plan Asset Valuation Due to the lack of timely available market information for certain investments in the asset classes described below as well as the inherent uncertainty of valuation, reported fair values may differ from fair values that would have been used had timely available market information been available.
Common and Preferred Stock Common and preferred stock for which market prices are readily available at the measurement date are valued at the last reported sale price or official closing price on the primary market or exchange on which they are actively traded and are classified in Level 1. Such equity securities for which the market is not considered to be active are valued via the use of observable inputs, which may include the use of adjusted market prices last available, bids or last available sales prices and/or other observable inputs and are classified in Level 2. Common and preferred stock classified in Level 3 are privately issued securities or other issues that are valued via the use of valuation models using significant unobservable inputs that generally consider aged (stale) pricing, earnings multiples, discounted cash flows and/or other qualitative and quantitative factors.
Debt Securities Valuations for debt securities are based on quotations received from independent pricing services or from dealers who make markets in such securities. Debt securities priced via pricing services that utilize matrix pricing which considers readily observable inputs such as the yield or price of bonds of comparable quality, coupon, maturity and type as well as dealer supplied prices, are classified in Level 2. Debt securities that are typically priced by dealers and pricing services via the use of proprietary pricing models which incorporate significant unobservable inputs are classified in Level 3. These inputs
GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
primarily consist of yield and credit spread assumptions, discount rates, prepayment curves, default assumptions and recovery rates.
Investment Funds, Private Equity and Debt Investments and Real Estate Investments Investment funds, private equity and debt investments and real estate investments are valued based on the Net Asset Value (NAV) per Share (or its equivalent) as a practical expedient to estimate fair value due to the absence of readily available market prices.
NAV's are provided by the respective investment sponsors or investment advisers and are subsequently reviewed and approved by management. In the event management concludes a reported NAV does not reflect fair value or is not determined as of the financial reporting measurement date, we will consider whether and when deemed necessary to make an adjustment at the balance sheet date. In determining whether an adjustment to the external valuation is required, we will review material factors that could affect the valuation, such as changes in the composition or performance of the underlying investments or comparable investments, overall market conditions, expected sale prices for private investments which are probable of being sold in the short-term and other economic factors that may possibly have a favorable or unfavorable effect on the reported external valuation.
Stock Incentive Plans Our stock incentive plans include RSUs, Restricted Stock Awards (RSAs), PSUs, stock options and awards that may be settled in our stock, the stock of our subsidiaries or in cash. We measure and record compensation expense based on the fair value of GM or Cruise's common stock on the date of grant for RSUs, RSAs and PSUs and the grant date fair value, determined utilizing a lattice model or the Black-Scholes formula, for stock options and PSUs. We record compensation cost for service-based RSUs, RSAs, PSUs and service-based stock options on a straight-line basis over the entire vesting period, or for retirement eligible employees over the requisite service period. RSUs granted in stock of Cruise vest upon satisfaction of both a service condition and a liquidity condition, defined as a change in control transaction or the consummation of an initial public offering. Compensation costs for RSUs granted in stock of Cruise will be recorded when the liquidity condition is met. Compensation cost for awards that do not have an established accounting grant date, but for which the service inception date has been established, or are settled in cash is based on the fair value of GM or Cruise's common stock at the end of each reporting period. We use the graded vesting method to record compensation cost for stock options with market conditions over the lesser of the vesting period or the time period an employee becomes eligible to retain the award at retirement.
Product Warranty and Recall Campaigns The estimated costs related to product warranties are accrued at the time products are sold and are charged to Automotive and other cost of sales. 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. Revisions are made when necessary and are based on changes in these factors.
The estimated costs related to recall campaigns are accrued when probable and estimable, which is generally at the time of vehicle sale. In GMNA, we estimate the costs related to recall campaigns by applying a paid loss approach that considers the number of historical recall campaigns and the estimated cost for each recall campaign. The estimated costs associated with recall campaigns in other geographical regions are determined using the estimated costs of repairs and the estimated number of vehicles to be repaired. Costs associated with recall campaigns are charged to Automotive and other cost of sales. Revisions are made when necessary based on changes in these factors.
Income Taxes The liability method is used in accounting for income taxes. Deferred tax assets and liabilities are recorded for temporary differences between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements using the statutory tax rates in effect for the year in which the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax laws or rates is recorded in the results of operations in the period that includes the enactment date under the law.
We establish valuation allowances for deferred tax assets based on a more likely than not standard. Deferred income tax assets are evaluated quarterly to determine if valuation allowances are required or should be adjusted. The ability to realize deferred tax assets depends on the ability to generate sufficient taxable income within the carryback or carryforward periods provided for in the tax law for each applicable tax jurisdiction. The assessment regarding whether a valuation allowance is required or should be adjusted also considers all available positive and negative evidence factors. It is difficult to conclude a valuation allowance is not required when there is significant objective and verifiable negative evidence, such as cumulative losses in recent years. We utilize a rolling three years of actual and current year results as the primary measure of cumulative losses in recent years.
GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Income tax expense (benefit) for the year is allocated between continuing operations and other categories of income such as Other comprehensive income (loss). In periods in which there is a pre-tax loss from continuing operations and pre-tax income in another income category, the tax benefit allocated to continuing operations is determined by taking into account the pre-tax income of other categories. We record Global Intangible Low Tax Income (GILTI) as a current period expense when incurred.
We record uncertain tax positions on the basis of a two-step process whereby we determine whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position, and for those tax positions that meet the more likely than not criteria, we recognize the largest amount of tax benefit that is greater than 50% likely to be realized upon ultimate settlement with the related tax authority. We record interest and penalties on uncertain tax positions in Income tax expense (benefit).
Foreign Currency Transactions and Translation The assets and liabilities of foreign subsidiaries that use the local currency as their functional currency are translated to U.S. Dollars based on the current exchange rate prevailing at each balance sheet date and any resulting translation adjustments are included in Accumulated other comprehensive loss. The assets and liabilities of foreign subsidiaries whose local currency is not their functional currency are remeasured from their local currency to their functional currency and then translated to U.S. Dollars. Revenues and expenses are translated into U.S. Dollars using the average exchange rates prevailing for each period presented. The financial statements of any foreign subsidiary that has been identified as having a highly inflationary economy are remeasured as if the functional currency were the U.S. Dollar.
Gains and losses arising from foreign currency transactions and the effects of remeasurements discussed in the preceding paragraph are recorded in Automotive and other cost of sales and GM Financial interest, operating and other expenses unless related to Automotive debt, which are recorded in Interest income and other non-operating income, net. Foreign currency transaction and remeasurement losses were $203 million, gains of $85 million and losses of $168 million in the years ended December 31, 2020, 2019 and 2018.
Derivative Financial Instruments Derivative financial instruments are recognized as either assets or liabilities at fair value. The accounting for changes in the fair value of each derivative financial instrument depends on whether it has been designated and qualifies as an accounting hedge, as well as the type of hedging relationship identified. Derivative instruments are not used for trading or speculative purposes.
Automotive We utilize options, swaps and forward contracts to manage foreign currency and commodity price risk. The change in fair value of option and forward contracts not designated as hedges is recorded in Interest income and other non-operating income, net. Cash flows for all derivative financial instruments are classified in cash flows from operating activities.
We estimate the fair value of the PSA warrants using a Black-Scholes formula. The significant inputs to the model include the PSA stock price and the estimated dividend yield. We are entitled to receive any dividends declared by PSA through the conversion date upon exercise of the warrants. Gains or losses as a result of the change in the fair value of the PSA warrants are recorded in Interest income and other non-operating income, net.
Automotive Financing - GM Financial GM Financial utilizes interest rate derivative instruments to manage interest rate risk and foreign currency derivative instruments to manage foreign currency risk. The change in fair value of the derivative instruments not designated as hedges is recorded in GM Financial interest, operating and other expenses. Cash flows for all derivative financial instruments are classified in cash flows from operating activities.
Certain interest rate and foreign currency swap agreements have been designated as fair value hedges. The risk being hedged is the risk of changes in the fair value of the hedged debt attributable to changes in the benchmark interest rate or the risk of changes in fair value attributable to changes in foreign currency exchange rates. If the swap has been designated as a fair value hedge, the changes in the fair value of the hedged item are recorded in GM Financial interest, operating and other expenses. The change in fair value of the related hedge is also recorded in GM Financial interest, operating and other expenses.
Certain interest rate swap and foreign currency swap agreements have been designated as cash flow hedges. The risk being hedged is the interest rate and foreign currency risk related to forecasted transactions. If the contract has been designated as a cash flow hedge, the change in the fair value of the cash flow hedge is deferred in Accumulated other comprehensive loss and is recognized in GM Financial interest, operating and other expenses along with the earnings effect of the hedged item when the hedged item affects earnings. Changes in the fair value of amounts excluded from the assessment of effectiveness are recorded currently in earnings and are presented in the same income statement line as the earnings effect of the hedged item.
GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Recently Adopted Accounting Standards Effective January 1, 2020, we adopted ASU 2016-13, which requires entities to use a new impairment model based on current expected credit losses (CECL) rather than incurred losses. Estimated credit losses under CECL consider relevant information about past events, current conditions and reasonable and supportable forecasts that affect the collectability of financial assets, resulting in recognition of lifetime expected credit losses at initial recognition of the related asset. We adopted ASU 2016-13 on a modified retrospective basis by recognizing an after-tax cumulative-effect adjustment to the opening balance of Retained earnings of $660 million, inclusive of $643 million related to GM Financial. The application of ASU 2016-13 increased our allowance for loan losses related to GM Financial receivables, net by $801 million and had an insignificant impact to our allowance for credit losses for Accounts and notes receivable and no adoption impact to Marketable debt securities on our consolidated balance sheets.
Effective July 1, 2020, we adopted ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (ASU 2020-04), which provides optional expedients and exceptions for applying U.S. GAAP if certain criteria are met to contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued, on a prospective basis. We do not believe the discontinuance of LIBOR will be a significant event for our Automotive arrangements. A substantial portion of GM Financial’s indebtedness bears interest at variable interest rates, primarily based on USD-LIBOR. The adoption of, and future elections under, ASU 2020-04 are not expected to have a material impact on our consolidated financial statements as the standard will ease, if warranted, the requirements for accounting for the future effects of the rate reform. We continue to monitor the impact the discontinuance of LIBOR or another reference rate will have on GM Financial's contracts, hedging relationships and other transactions.
Note 3. Revenue
The following table disaggregates our revenue by major source for revenue generating segments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2020
|
|
GMNA
|
|
GMI
|
|
Corporate
|
|
Total Automotive
|
|
Cruise
|
|
GM Financial
|
|
Eliminations/ Reclassifications
|
|
Total
|
Vehicle, parts and accessories
|
$
|
92,749
|
|
|
$
|
10,593
|
|
|
$
|
1
|
|
|
$
|
103,343
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
103,343
|
|
Used vehicles
|
875
|
|
|
115
|
|
|
20
|
|
|
1,010
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,010
|
|
Services and other
|
3,109
|
|
|
878
|
|
|
329
|
|
|
4,316
|
|
|
103
|
|
|
—
|
|
|
(99)
|
|
|
4,320
|
|
Automotive net sales and revenue
|
96,733
|
|
|
11,586
|
|
|
350
|
|
|
108,669
|
|
|
103
|
|
|
—
|
|
|
(99)
|
|
|
108,673
|
|
Leased vehicle income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,530
|
|
|
—
|
|
|
9,530
|
|
Finance charge income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,996
|
|
|
(1)
|
|
|
3,995
|
|
Other income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
305
|
|
|
(18)
|
|
|
287
|
|
GM Financial net sales and revenue
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,831
|
|
|
(19)
|
|
|
13,812
|
|
Net sales and revenue
|
$
|
96,733
|
|
|
$
|
11,586
|
|
|
$
|
350
|
|
|
$
|
108,669
|
|
|
$
|
103
|
|
|
$
|
13,831
|
|
|
$
|
(118)
|
|
|
$
|
122,485
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2019
|
|
GMNA
|
|
GMI
|
|
Corporate
|
|
Total Automotive
|
|
Cruise
|
|
GM Financial
|
|
Eliminations/ Reclassifications
|
|
Total
|
Vehicle, parts and accessories
|
$
|
101,346
|
|
|
$
|
14,931
|
|
|
$
|
—
|
|
|
$
|
116,277
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
116,277
|
|
Used vehicles
|
1,896
|
|
|
123
|
|
|
—
|
|
|
2,019
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,019
|
|
Services and other
|
3,124
|
|
|
1,057
|
|
|
220
|
|
|
4,401
|
|
|
100
|
|
|
—
|
|
|
(100)
|
|
|
4,401
|
|
Automotive net sales and revenue
|
106,366
|
|
|
16,111
|
|
|
220
|
|
|
122,697
|
|
|
100
|
|
|
—
|
|
|
(100)
|
|
|
122,697
|
|
Leased vehicle income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,032
|
|
|
—
|
|
|
10,032
|
|
Finance charge income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,071
|
|
|
(7)
|
|
|
4,064
|
|
Other income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
451
|
|
|
(7)
|
|
|
444
|
|
GM Financial net sales and revenue
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,554
|
|
|
(14)
|
|
|
14,540
|
|
Net sales and revenue
|
$
|
106,366
|
|
|
$
|
16,111
|
|
|
$
|
220
|
|
|
$
|
122,697
|
|
|
$
|
100
|
|
|
$
|
14,554
|
|
|
$
|
(114)
|
|
|
$
|
137,237
|
|
GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2018
|
|
GMNA
|
|
GMI
|
|
Corporate
|
|
Total Automotive
|
|
|
|
GM Financial
|
|
Eliminations
|
|
Total
|
Vehicle, parts and accessories
|
$
|
107,217
|
|
|
$
|
17,980
|
|
|
$
|
20
|
|
|
$
|
125,217
|
|
|
|
|
$
|
—
|
|
|
$
|
(62)
|
|
|
$
|
125,155
|
|
Used vehicles
|
3,215
|
|
|
175
|
|
|
—
|
|
|
3,390
|
|
|
|
|
—
|
|
|
(36)
|
|
|
3,354
|
|
Services and other
|
3,360
|
|
|
993
|
|
|
183
|
|
|
4,536
|
|
|
|
|
—
|
|
|
—
|
|
|
4,536
|
|
Automotive net sales and revenue
|
113,792
|
|
|
19,148
|
|
|
203
|
|
|
133,143
|
|
|
|
|
—
|
|
|
(98)
|
|
|
133,045
|
|
Leased vehicle income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
9,963
|
|
|
—
|
|
|
9,963
|
|
Finance charge income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
3,629
|
|
|
(8)
|
|
|
3,621
|
|
Other income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
424
|
|
|
(4)
|
|
|
420
|
|
GM Financial net sales and revenue
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
14,016
|
|
|
(12)
|
|
|
14,004
|
|
Net sales and revenue
|
$
|
113,792
|
|
|
$
|
19,148
|
|
|
$
|
203
|
|
|
$
|
133,143
|
|
|
|
|
$
|
14,016
|
|
|
$
|
(110)
|
|
|
$
|
147,049
|
|
Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services. Adjustments to sales incentives for previously recognized sales were insignificant during the years ended December 31, 2020, 2019 and 2018.
Contract liabilities in our Automotive segments primarily consist of maintenance, extended warranty and other service contracts of $2.4 billion and $2.2 billion at December 31, 2020 and 2019, which are included in Accrued liabilities and Other liabilities. We recognized revenue of $1.1 billion and $1.5 billion related to contract liabilities during the years ended December 31, 2020 and 2019. We expect to recognize revenue of $1.2 billion, $503 million and $759 million in the years ending December 31, 2021, 2022 and thereafter related to contract liabilities at December 31, 2020.
GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Note 4. Marketable and Other Securities
The following table summarizes the fair value of cash equivalents and marketable debt securities, which approximates cost:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Level
|
|
December 31, 2020
|
|
December 31, 2019
|
Cash and cash equivalents
|
|
|
|
|
|
Cash and time deposits(a)
|
|
|
$
|
8,010
|
|
|
$
|
6,828
|
|
Available-for-sale debt securities
|
|
|
|
|
|
U.S. government and agencies
|
2
|
|
1,370
|
|
|
1,484
|
|
Corporate debt
|
2
|
|
3,476
|
|
|
5,863
|
|
Sovereign debt
|
2
|
|
2,051
|
|
|
2,123
|
|
Total available-for-sale debt securities – cash equivalents
|
|
|
6,897
|
|
|
9,470
|
|
Money market funds
|
1
|
|
5,085
|
|
|
2,771
|
|
Total cash and cash equivalents(b)
|
|
|
$
|
19,992
|
|
|
$
|
19,069
|
|
Marketable debt securities
|
|
|
|
|
|
U.S. government and agencies
|
2
|
|
$
|
1,771
|
|
|
$
|
226
|
|
Corporate debt
|
2
|
|
3,630
|
|
|
2,932
|
|
Mortgage and asset-backed
|
2
|
|
632
|
|
|
681
|
|
Sovereign debt
|
2
|
|
3,013
|
|
|
335
|
|
Total available-for-sale debt securities – marketable securities(c)
|
|
|
$
|
9,046
|
|
|
$
|
4,174
|
|
Restricted cash
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
269
|
|
|
$
|
292
|
|
Money market funds
|
1
|
|
2,856
|
|
|
3,582
|
|
Total restricted cash
|
|
|
$
|
3,125
|
|
|
$
|
3,874
|
|
|
|
|
|
|
|
Available-for-sale debt securities included above with contractual maturities(d)
|
|
|
|
|
|
Due in one year or less
|
|
|
$
|
12,533
|
|
|
|
Due between one and five years
|
|
|
2,778
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total available-for-sale debt securities with contractual maturities
|
|
|
$
|
15,311
|
|
|
|
__________
(a) Includes $248 million that is designated exclusively to fund capital expenditures in GM Korea Company (GM Korea) at December 31, 2019. No amount was designated exclusively to fund GM Korea capital expenditures at December 31, 2020.
(b) Includes $761 million and $2.3 billion in Cruise at December 31, 2020 and 2019.
(c) Includes $943 million and $266 million in Cruise at December 31, 2020 and 2019.
(d) Excludes mortgage- and asset-backed securities of $632 million at December 31, 2020 as these securities are not due at a single maturity date.
Proceeds from the sale of available-for-sale debt securities sold prior to maturity were $1.9 billion, $4.5 billion and $4.3 billion in the years ended December 31, 2020, 2019 and 2018. Net unrealized gains and losses on available-for-sale debt securities were insignificant in the years ended December 31, 2020, 2019 and 2018. Cumulative unrealized gains and losses on available-for-sale debt securities were insignificant at December 31, 2020 and 2019.
We liquidated our remaining shares in Lyft in the six months ended June 30, 2020. We recorded an insignificant unrealized loss in the years ended December 31, 2020 and 2019, and an unrealized gain of $142 million in Interest income and other non-operating income, net in the year ended December 31, 2018.
GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same amounts shown in the consolidated statements of cash flows:
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
|
December 31, 2019
|
Cash and cash equivalents
|
$
|
19,992
|
|
|
$
|
19,069
|
|
Restricted cash included in Other current assets
|
2,581
|
|
|
3,352
|
|
Restricted cash included in Other assets
|
544
|
|
|
522
|
|
Total
|
$
|
23,117
|
|
|
$
|
22,943
|
|
Note 5. GM Financial Receivables and Transactions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
|
December 31, 2019
|
|
Retail
|
|
Commercial(a)
|
|
Total
|
|
Retail
|
|
Commercial(a)
|
|
Total
|
GM Financial receivables
|
$
|
51,288
|
|
|
$
|
8,682
|
|
|
$
|
59,970
|
|
|
$
|
42,229
|
|
|
$
|
11,671
|
|
|
$
|
53,900
|
|
Less: allowance for loan losses
|
(1,915)
|
|
|
(63)
|
|
|
(1,978)
|
|
|
(866)
|
|
|
(78)
|
|
|
(944)
|
|
GM Financial receivables, net
|
$
|
49,373
|
|
|
$
|
8,619
|
|
|
$
|
57,992
|
|
|
$
|
41,363
|
|
|
$
|
11,593
|
|
|
$
|
52,956
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value of GM Financial receivables utilizing Level 2 inputs
|
|
|
|
|
$
|
8,619
|
|
|
|
|
|
|
$
|
11,593
|
|
Fair value of GM Financial receivables utilizing Level 3 inputs
|
|
|
|
|
$
|
51,645
|
|
|
|
|
|
|
$
|
41,973
|
|
__________
(a)Net of dealer cash management balances of $1.4 billion and $1.2 billion at December 31, 2020 and 2019. Under the cash management program, subject to certain conditions, a dealer may choose to reduce the amount of interest on their floorplan line by making principal payments to GM Financial in advance.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
2020
|
|
2019
|
|
2018
|
Allowance for loan losses at beginning of period
|
$
|
944
|
|
|
$
|
911
|
|
|
$
|
942
|
|
Impact of adoption ASU 2016-13 (Note 2)
|
801
|
|
|
—
|
|
|
—
|
|
Provision for loan losses
|
881
|
|
|
726
|
|
|
642
|
|
Charge-offs
|
(1,169)
|
|
|
(1,246)
|
|
|
(1,199)
|
|
Recoveries
|
542
|
|
|
551
|
|
|
536
|
|
Effect of foreign currency
|
(21)
|
|
|
2
|
|
|
(10)
|
|
Allowance for loan losses at end of period
|
$
|
1,978
|
|
|
$
|
944
|
|
|
$
|
911
|
|
Retail Finance Receivables GM Financial's retail finance receivable portfolio includes loans made to consumers and businesses to finance the purchase of vehicles for personal and commercial use. A summary of the amortized cost of the retail finance receivables by FICO score or its equivalent, determined at origination, for each vintage of the retail finance receivables portfolio at December 31, 2020 is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year of Origination
|
|
|
|
December 31, 2020
|
|
December 31, 2019
|
|
2020
|
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
Prior
|
|
|
|
Total
|
|
Percent
|
|
Total
|
|
Percent
|
Prime – FICO score 680 and greater
|
$
|
18,685
|
|
|
$
|
7,033
|
|
|
$
|
4,491
|
|
|
$
|
1,917
|
|
|
$
|
555
|
|
|
$
|
119
|
|
|
|
|
$
|
32,800
|
|
|
64.0
|
%
|
|
$
|
25,400
|
|
|
60.1
|
%
|
Near-prime – FICO score 620 to 679
|
3,695
|
|
|
2,097
|
|
|
1,232
|
|
|
603
|
|
|
225
|
|
|
83
|
|
|
|
|
7,935
|
|
|
15.4
|
%
|
|
6,862
|
|
|
16.3
|
%
|
Sub-prime – FICO score less than 620
|
3,803
|
|
|
2,920
|
|
|
1,740
|
|
|
1,173
|
|
|
610
|
|
|
307
|
|
|
|
|
10,553
|
|
|
20.6
|
%
|
|
9,967
|
|
|
23.6
|
%
|
Retail finance receivables, net of fees
|
$
|
26,183
|
|
|
$
|
12,050
|
|
|
$
|
7,463
|
|
|
$
|
3,693
|
|
|
$
|
1,390
|
|
|
$
|
509
|
|
|
|
|
$
|
51,288
|
|
|
100.0
|
%
|
|
$
|
42,229
|
|
|
100.0
|
%
|
GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
GM Financial reviews the ongoing credit quality of retail finance receivables based on customer payment activity. A retail account is considered delinquent if a substantial portion of a scheduled payment has not been received by the date the payment was contractually due. Retail finance receivables are collateralized by vehicle titles and, subject to local laws, GM Financial generally has the right to repossess the vehicle in the event the customer defaults on the payment terms of the contract. The accrual of finance charge income had been suspended on delinquent retail finance receivables with contractual amounts due of $714 million and $875 million at December 31, 2020 and 2019. The following table is a consolidated summary of the delinquency status of the outstanding amortized cost of retail finance receivables for each vintage of the portfolio at December 31, 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year of Origination
|
|
December 31, 2020
|
|
December 31, 2019
|
|
2020
|
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
Prior
|
|
|
|
Total
|
|
Percent
|
|
Total(a)
|
|
Percent
|
0-to-30 days
|
$
|
25,894
|
|
|
$
|
11,591
|
|
|
$
|
7,131
|
|
|
$
|
3,454
|
|
|
$
|
1,249
|
|
|
$
|
421
|
|
|
|
|
$
|
49,740
|
|
|
97.0
|
%
|
|
|
|
|
31-to-60 days
|
210
|
|
|
325
|
|
|
235
|
|
|
170
|
|
|
102
|
|
|
61
|
|
|
|
|
1,103
|
|
|
2.1
|
%
|
|
$
|
1,354
|
|
|
3.2
|
%
|
Greater-than-60 days
|
72
|
|
|
123
|
|
|
90
|
|
|
64
|
|
|
37
|
|
|
26
|
|
|
|
|
412
|
|
|
0.8
|
%
|
|
542
|
|
|
1.3
|
%
|
Finance receivables more than 30 days delinquent
|
282
|
|
|
448
|
|
|
325
|
|
|
234
|
|
|
139
|
|
|
87
|
|
|
|
|
1,515
|
|
|
2.9
|
%
|
|
1,896
|
|
|
4.5
|
%
|
In repossession
|
7
|
|
|
11
|
|
|
7
|
|
|
5
|
|
|
2
|
|
|
1
|
|
|
|
|
33
|
|
|
0.1
|
%
|
|
44
|
|
|
0.1
|
%
|
Finance receivables more than 30 days delinquent or in repossession
|
289
|
|
|
459
|
|
|
332
|
|
|
239
|
|
|
141
|
|
|
88
|
|
|
|
|
1,548
|
|
|
3.0
|
%
|
|
$
|
1,940
|
|
|
4.6
|
%
|
Retail finance receivables, net of fees
|
$
|
26,183
|
|
|
$
|
12,050
|
|
|
$
|
7,463
|
|
|
$
|
3,693
|
|
|
$
|
1,390
|
|
|
$
|
509
|
|
|
|
|
$
|
51,288
|
|
|
100.0
|
%
|
|
|
|
|
__________
(a)Represents the contractual amounts of delinquent retail finance receivables, which is not significantly different than the outstanding amortized cost for such receivables.
The outstanding amortized cost of retail finance receivables that are considered TDRs was $2.2 billion at December 31, 2020, including $301 million in nonaccrual loans.
Commercial Finance Receivables GM Financial's commercial finance receivables consist of dealer financings, primarily for inventory purchases. Proprietary models are used to assign a risk rating to each dealer. GM Financial performs periodic credit reviews of each dealership and adjusts the dealership's risk rating, if necessary. The commercial finance receivables on nonaccrual status were insignificant at December 31, 2020.
Prior to January 1, 2020, GM Financial estimated the allowance for loan losses based on an analysis of the experience of comparable commercial lenders. Effective January 1, 2020, GM Financial establishes the allowance for loan losses based on historical loss experience for the consolidated portfolio, in addition to forecast for industry vehicle sales. The updated risk rating categories are as follows:
|
|
|
|
|
|
|
|
|
Rating
|
|
Description
|
I
|
|
Performing accounts with strong to acceptable financial metrics with at least satisfactory capacity to meet financial commitments.
|
II
|
|
Performing accounts experiencing potential weakness in financial metrics and repayment prospects resulting in increased monitoring.
|
III
|
|
Non-Performing accounts with inadequate paying capacity for current obligations and have the distinct possibility of creating a loss if deficiencies are not corrected.
|
IV
|
|
Non-Performing accounts with inadequate paying capacity for current obligations and inherent weaknesses that make collection of liquidation in full highly questionable or improbable.
|
GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Dealers with III and IV risk ratings are subject to additional monitoring and restrictions on funding, including suspension of lines of credit and liquidation of assets. The following table summarizes the credit risk profile by dealer risk rating of commercial finance receivables at December 31, 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year of Origination(a)
|
|
December 31, 2020
|
|
|
|
Revolving
|
|
2020
|
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
Prior
|
|
|
|
Total
|
|
Percent
|
|
|
|
|
I
|
$
|
6,968
|
|
|
$
|
510
|
|
|
$
|
159
|
|
|
$
|
63
|
|
|
$
|
95
|
|
|
$
|
43
|
|
|
$
|
19
|
|
|
|
|
$
|
7,857
|
|
|
90.5
|
%
|
|
|
|
|
II
|
491
|
|
|
2
|
|
|
18
|
|
|
2
|
|
|
3
|
|
|
18
|
|
|
34
|
|
|
|
|
568
|
|
|
6.5
|
%
|
|
|
|
|
III
|
203
|
|
|
—
|
|
|
8
|
|
|
29
|
|
|
2
|
|
|
11
|
|
|
—
|
|
|
|
|
253
|
|
|
2.9
|
%
|
|
|
|
|
IV
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
|
|
4
|
|
|
0.1
|
%
|
|
|
|
|
Commercial finance receivables, net of fees
|
$
|
7,662
|
|
|
$
|
512
|
|
|
$
|
185
|
|
|
$
|
94
|
|
|
$
|
100
|
|
|
$
|
72
|
|
|
$
|
57
|
|
|
|
|
$
|
8,682
|
|
|
100.0
|
%
|
|
|
|
|
_________
(a)Floorplan advances comprise 97% of the total revolving balance. Dealer term loans are presented by year of origination.
Transactions with GM Financial The following table shows transactions between our Automotive segments and GM Financial. These amounts are presented in GM Financial's consolidated balance sheets and statements of income.
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
|
December 31, 2019
|
Consolidated Balance Sheets(a)
|
|
|
|
Commercial finance receivables, net due from GM consolidated dealers
|
$
|
398
|
|
|
$
|
478
|
|
|
|
|
|
Subvention receivable(b)
|
$
|
642
|
|
|
$
|
676
|
|
Commercial loan funding payable
|
$
|
23
|
|
|
$
|
74
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
2020
|
|
2019
|
|
2018
|
Consolidated Statements of Income
|
|
|
|
|
|
Interest subvention earned on finance receivables
|
$
|
679
|
|
|
$
|
588
|
|
|
$
|
554
|
|
Leased vehicle subvention earned
|
$
|
3,042
|
|
|
$
|
3,273
|
|
|
$
|
3,274
|
|
__________
(a)All balance sheet amounts are eliminated upon consolidation.
(b)Our Automotive segments made cash payments to GM Financial for subvention of $3.9 billion, $4.1 billion, and $3.8 billion in the years ended December 31, 2020, 2019 and 2018.
GM Financial's Board of Directors declared and paid dividends of $800 million, $400 million and $375 million on its common stock in the years ended December 31, 2020, 2019 and 2018.
Note 6. Inventories
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
|
December 31, 2019
|
Total productive material, supplies and work in process
|
$
|
5,117
|
|
|
$
|
4,713
|
|
Finished product, including service parts
|
5,118
|
|
|
5,685
|
|
Total inventories
|
$
|
10,235
|
|
|
$
|
10,398
|
|
Note 7. Equipment on Operating Leases
Equipment on operating leases primarily consists of leases to retail customers of GM Financial. The current portion of net equipment on operating leases is included in Other current assets.
GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
|
December 31, 2019
|
Equipment on operating leases
|
$
|
50,000
|
|
|
$
|
53,081
|
|
Less: accumulated depreciation
|
(10,181)
|
|
|
(10,989)
|
|
Equipment on operating leases, net
|
$
|
39,819
|
|
|
$
|
42,092
|
|
At December 31, 2020, the estimated residual value of our leased assets at the end of the lease term was $29.2 billion.
Depreciation expense related to Equipment on operating leases, net was $7.2 billion, $7.3 billion and $7.5 billion in the years ended December 31, 2020, 2019 and 2018.
The following table summarizes lease payments due to GM Financial on leases to retail customers:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ending December 31,
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
2025
|
|
Thereafter
|
|
Total
|
Lease receipts under operating leases
|
$
|
6,142
|
|
|
$
|
3,783
|
|
|
$
|
1,441
|
|
|
$
|
112
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
11,480
|
|
Note 8. Equity in Net Assets of Nonconsolidated Affiliates
Nonconsolidated affiliates are entities in which we maintain an equity ownership interest and for which we use the equity method of accounting due to our ability to exert significant influence over decisions relating to their operating and financial affairs. Revenue and expenses of our joint ventures are not consolidated into our financial statements; rather, our proportionate share of the earnings of each joint venture is reflected as Equity income.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
2020
|
|
2019
|
|
2018
|
Automotive China equity income
|
$
|
512
|
|
|
$
|
1,132
|
|
|
$
|
1,981
|
|
Other joint ventures equity income
|
162
|
|
|
136
|
|
|
182
|
|
Total Equity income
|
$
|
674
|
|
|
$
|
1,268
|
|
|
$
|
2,163
|
|
Investments in Nonconsolidated Affiliates
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
|
December 31, 2019
|
Automotive China carrying amount
|
$
|
6,599
|
|
|
$
|
7,044
|
|
Other investments carrying amount
|
1,807
|
|
|
1,518
|
|
Total equity in net assets of nonconsolidated affiliates
|
$
|
8,406
|
|
|
$
|
8,562
|
|
The carrying amount of our investments in certain joint ventures exceeded our share of the underlying net assets by $4.2 billion at December 31, 2020 and 2019 primarily due to goodwill from the application of fresh-start reporting and the purchase of additional interests in nonconsolidated affiliates.
GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
The following table summarizes our direct ownership interests in our China JVs:
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
|
December 31, 2019
|
Automotive China JVs
|
|
|
|
SAIC General Motors Corp., Ltd. (SGM)
|
50
|
%
|
|
50
|
%
|
Pan Asia Technical Automotive Center Co., Ltd.
|
50
|
%
|
|
50
|
%
|
SAIC General Motors Sales Co., Ltd.
|
49
|
%
|
|
49
|
%
|
SAIC GM Wuling Automobile Co., Ltd. (SGMW)
|
44
|
%
|
|
44
|
%
|
Shanghai OnStar Telematics Co., Ltd. (Shanghai OnStar)
|
40
|
%
|
|
40
|
%
|
SAIC GM (Shenyang) Norsom Motors Co., Ltd. (SGM Norsom)
|
25
|
%
|
|
25
|
%
|
SAIC GM Dong Yue Motors Co., Ltd. (SGM DY)
|
25
|
%
|
|
25
|
%
|
SAIC GM Dong Yue Powertrain Co., Ltd. (SGM DYPT)
|
25
|
%
|
|
25
|
%
|
Other joint ventures
|
|
|
|
SAIC-GMAC Automotive Finance Company Limited (SAIC-GMAC)
|
35
|
%
|
|
35
|
%
|
SAIC-GMF Leasing Co., Ltd.
|
35
|
%
|
|
35
|
%
|
SGM is a joint venture we established with Shanghai Automotive Industry Corporation (SAIC) (50%). SGM has interests in three other joint ventures in China: SGM Norsom, SGM DY and SGM DYPT. These three joint ventures are jointly held by SGM (50%), SAIC (25%) and ourselves. These four joint ventures are engaged in the production, import and sale of a range of products under the Buick, Chevrolet and Cadillac brands. SGM also has interests in Shanghai OnStar (20%), SAIC-GMAC (20%) and SAIC-GMF Leasing Co., Ltd. (20%). Shanghai Automotive Group Finance Company Ltd., a subsidiary of SAIC, owns 45% of SAIC-GMAC. SAIC Financial Holdings Company, a subsidiary of SAIC, owns 45% of SAIC-GMF Leasing Co., Ltd.
Summarized Financial Data of Nonconsolidated Affiliates
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
|
December 31, 2019
|
|
Automotive China JVs
|
|
Others
|
|
Total
|
|
Automotive China JVs
|
|
Others
|
|
Total
|
Summarized Balance Sheet Data
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
$
|
17,604
|
|
|
$
|
16,844
|
|
|
$
|
34,448
|
|
|
$
|
14,035
|
|
|
$
|
13,319
|
|
|
$
|
27,354
|
|
Non-current assets
|
14,875
|
|
|
8,634
|
|
|
23,509
|
|
|
14,484
|
|
|
6,680
|
|
|
21,164
|
|
Total assets
|
$
|
32,479
|
|
|
$
|
25,478
|
|
|
$
|
57,957
|
|
|
$
|
28,519
|
|
|
$
|
19,999
|
|
|
$
|
48,518
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
$
|
25,633
|
|
|
$
|
14,808
|
|
|
$
|
40,441
|
|
|
$
|
21,256
|
|
|
$
|
11,588
|
|
|
$
|
32,844
|
|
Non-current liabilities
|
1,163
|
|
|
6,654
|
|
|
7,817
|
|
|
968
|
|
|
5,017
|
|
|
5,985
|
|
Total liabilities
|
$
|
26,796
|
|
|
$
|
21,462
|
|
|
$
|
48,258
|
|
|
$
|
22,224
|
|
|
$
|
16,605
|
|
|
$
|
38,829
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling interests
|
$
|
824
|
|
|
$
|
1
|
|
|
$
|
825
|
|
|
$
|
847
|
|
|
$
|
1
|
|
|
$
|
848
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
2020
|
|
2019
|
|
2018
|
Summarized Operating Data
|
|
|
|
|
|
Automotive China JVs' net sales
|
$
|
38,736
|
|
|
$
|
39,123
|
|
|
$
|
50,316
|
|
Others' net sales
|
1,850
|
|
|
1,815
|
|
|
1,721
|
|
Total net sales
|
$
|
40,586
|
|
|
$
|
40,938
|
|
|
$
|
52,037
|
|
|
|
|
|
|
|
Automotive China JVs' net income
|
$
|
1,239
|
|
|
$
|
2,258
|
|
|
$
|
3,992
|
|
Others' net income
|
436
|
|
|
477
|
|
|
536
|
|
Total net income
|
$
|
1,675
|
|
|
$
|
2,735
|
|
|
$
|
4,528
|
|
GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Transactions with Nonconsolidated Affiliates Our nonconsolidated affiliates are involved in various aspects of the development, production and marketing of trucks, crossovers, cars and automobile parts. We enter into transactions with certain nonconsolidated affiliates to purchase and sell component parts and vehicles. The following tables summarize transactions with and balances related to our nonconsolidated affiliates:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
2020
|
|
2019
|
|
2018
|
Automotive sales and revenue
|
$
|
235
|
|
|
$
|
199
|
|
|
$
|
406
|
|
Automotive purchases, net
|
$
|
165
|
|
|
$
|
1,065
|
|
|
$
|
1,155
|
|
Dividends received
|
$
|
1,198
|
|
|
$
|
1,852
|
|
|
$
|
2,022
|
|
Operating cash flows
|
$
|
1,473
|
|
|
$
|
913
|
|
|
$
|
657
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
|
December 31, 2019
|
Accounts and notes receivable, net
|
$
|
954
|
|
|
$
|
1,007
|
|
Accounts payable
|
$
|
494
|
|
|
$
|
369
|
|
Undistributed earnings
|
$
|
1,594
|
|
|
$
|
2,118
|
|
Note 9. Property
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Useful Lives in Years
|
|
December 31, 2020
|
|
December 31, 2019
|
Land
|
|
|
$
|
1,339
|
|
|
$
|
1,302
|
|
Buildings and improvements
|
5-40
|
|
9,671
|
|
|
9,705
|
|
Machinery and equipment
|
3-27
|
|
30,013
|
|
|
29,814
|
|
Special tools
|
1-13
|
|
20,851
|
|
|
23,586
|
|
Construction in progress
|
|
|
3,581
|
|
|
3,042
|
|
Total property
|
|
|
65,455
|
|
|
67,449
|
|
Less: accumulated depreciation
|
|
|
(27,823)
|
|
|
(28,699)
|
|
Total property, net
|
|
|
$
|
37,632
|
|
|
$
|
38,750
|
|
The amount of capitalized software included in Property, net was $1.3 billion at December 31, 2020 and 2019. The amount of interest capitalized and excluded from Automotive interest expense related to Property, net was insignificant in the years ended December 31, 2020, 2019 and 2018.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
2020
|
|
2019
|
|
2018
|
Depreciation and amortization expense
|
$
|
5,354
|
|
|
$
|
6,541
|
|
|
$
|
5,347
|
|
Impairment charges
|
$
|
86
|
|
|
$
|
7
|
|
|
$
|
466
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capitalized software amortization expense(a)
|
$
|
457
|
|
|
$
|
452
|
|
|
$
|
424
|
|
__________
(a) Included in depreciation and amortization expense.
Note 10. Goodwill and Intangible Assets
Goodwill of $1.9 billion consisted of $1.3 billion and $1.4 billion recorded in GM Financial, primarily related to its North America reporting unit, and $567 million and $504 million included in Cruise at December 31, 2020 and 2019. The COVID-19 pandemic has caused material disruption to businesses, resulting in an economic slowdown. The economic and social uncertainty resulting from the COVID-19 pandemic indicated that it was more likely than not that a goodwill impairment existed at March 31, 2020 for GM Financial's North America reporting unit. Therefore, at March 31, 2020, we performed an event-driven goodwill impairment test for GM Financial's North America reporting unit and determined no goodwill impairment existed.
GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
The fair value of GM Financial's North America reporting unit at March 31, 2020 was determined based on valuation techniques using the best available information, primarily discounted cash flow projections. We make significant assumptions and estimates about the extent and timing of future cash flows. There can be no assurance that anticipated financial results will be achieved. Under multiple scenarios, including fully weighting the downside cash flow scenario, the estimated fair value of GM Financial's North America reporting unit at March 31, 2020 exceeded its carrying amount. Since our goodwill impairment analysis at March 31, 2020, we performed a qualitative assessment of goodwill impairment by evaluating our economic performance, outlook and other events and circumstances and noted no indicators that would warrant further quantitative testing of goodwill impairment.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
|
December 31, 2019
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
Technology and intellectual property
|
$
|
762
|
|
|
$
|
542
|
|
|
$
|
220
|
|
|
$
|
734
|
|
|
$
|
533
|
|
|
$
|
201
|
|
Brands
|
4,300
|
|
|
1,444
|
|
|
2,856
|
|
|
4,298
|
|
|
1,285
|
|
|
3,013
|
|
Dealer network, customer relationships and other
|
981
|
|
|
737
|
|
|
244
|
|
|
966
|
|
|
702
|
|
|
264
|
|
Total intangible assets
|
$
|
6,043
|
|
|
$
|
2,723
|
|
|
$
|
3,320
|
|
|
$
|
5,998
|
|
|
$
|
2,520
|
|
|
$
|
3,478
|
|
Our amortization expense related to intangible assets was $144 million, $202 million, and $247 million in the years ended December 31, 2020, 2019 and 2018.
Amortization expense related to intangible assets is estimated to be approximately $160 million in each of the next five years.
Note 11. Variable Interest Entities
Consolidated VIEs
Automotive Financing - GM Financial
GM Financial uses special purpose entities (SPEs) that are considered VIEs to issue variable funding notes to third party bank-sponsored warehouse facilities or asset-backed securities to investors in securitization transactions. The debt issued by these VIEs is backed by finance receivables and leasing-related assets transferred to the VIEs (Securitized Assets). GM Financial determined that it is the primary beneficiary of the SPEs because the servicing responsibilities for the Securitized Assets give GM Financial the power to direct the activities that most significantly impact the performance of the VIEs and the variable interests in the VIEs give GM Financial the obligation to absorb losses and the right to receive residual returns that could potentially be significant. The assets of the VIEs serve as the sole source of repayment for the debt issued by these entities. Investors in the notes issued by the VIEs do not have recourse to GM Financial or its other assets, with the exception of customary representation and warranty repurchase provisions and indemnities that GM Financial provides as the servicer. GM Financial is not required to provide additional financial support to these SPEs. While these subsidiaries are included in GM Financial's consolidated financial statements, they are separate legal entities and their assets are legally owned by them and are not available to GM Financial's creditors.
The following table summarizes the assets and liabilities related to GM Financial's consolidated VIEs:
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
|
December 31, 2019
|
Restricted cash – current
|
$
|
2,190
|
|
|
$
|
2,202
|
|
Restricted cash – non-current
|
$
|
449
|
|
|
$
|
441
|
|
GM Financial receivables, net of fees – current
|
$
|
17,211
|
|
|
$
|
19,081
|
|
GM Financial receivables, net of fees – non-current
|
$
|
15,107
|
|
|
$
|
15,921
|
|
GM Financial equipment on operating leases, net
|
$
|
16,322
|
|
|
$
|
14,464
|
|
GM Financial short-term debt and current portion of long-term debt
|
$
|
20,450
|
|
|
$
|
23,952
|
|
GM Financial long-term debt
|
$
|
18,974
|
|
|
$
|
15,819
|
|
|
|
|
|
GM Financial recognizes finance charge, leased vehicle and fee income on the Securitized Assets and interest expense on the secured debt issued in a securitization transaction and records a provision for loan losses to recognize loan losses expected over the remaining life of the finance receivables.
GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Nonconsolidated VIEs
Automotive
Nonconsolidated VIEs principally include automotive related operating entities to which we provided financial support to ensure that our supply needs for production are met or are not disrupted. Our variable interests in these nonconsolidated VIEs include equity investments, accounts and loans receivable, committed financial support and other off-balance sheet arrangements. The carrying amounts of assets and liabilities related to our nonconsolidated VIEs were insignificant at December 31, 2020 and 2019. Our maximum exposure to loss as a result of our involvement with these VIEs was $1.2 billion, inclusive of $776 million in committed capital contributions to Ultium Cells LLC at December 31, 2020, and an insignificant amount at December 31, 2019. We currently lack the power through voting or similar rights to direct the activities of these entities that most significantly affect their economic performance.
Note 12. Accrued and Other Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
|
December 31, 2019
|
Accrued liabilities
|
|
|
|
Dealer and customer allowances, claims and discounts
|
$
|
7,300
|
|
|
$
|
10,402
|
|
Deferred revenue
|
3,132
|
|
|
3,234
|
|
Product warranty and related liabilities
|
3,048
|
|
|
2,987
|
|
Payrolls and employee benefits excluding postemployment benefits
|
1,864
|
|
|
1,969
|
|
Other
|
7,725
|
|
|
7,895
|
|
Total accrued liabilities
|
$
|
23,069
|
|
|
$
|
26,487
|
|
|
|
|
|
Other liabilities
|
|
|
|
Deferred revenue
|
$
|
2,715
|
|
|
$
|
2,962
|
|
Product warranty and related liabilities
|
5,193
|
|
|
4,811
|
|
Operating lease liabilities
|
969
|
|
|
1,010
|
|
Employee benefits excluding postemployment benefits
|
822
|
|
|
704
|
|
Postemployment benefits including facility idling reserves
|
739
|
|
|
633
|
|
Other
|
3,009
|
|
|
3,026
|
|
Total other liabilities
|
$
|
13,447
|
|
|
$
|
13,146
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
2020
|
|
2019
|
|
2018
|
Product Warranty and Related Liabilities
|
|
|
|
|
|
Warranty balance at beginning of period
|
$
|
7,798
|
|
|
$
|
7,590
|
|
|
$
|
8,332
|
|
Warranties issued and assumed in period – recall campaigns
|
1,628
|
|
|
745
|
|
|
665
|
|
Warranties issued and assumed in period – product warranty
|
1,773
|
|
|
2,001
|
|
|
2,143
|
|
Payments
|
(2,986)
|
|
|
(3,012)
|
|
|
(2,903)
|
|
Adjustments to pre-existing warranties
|
41
|
|
|
455
|
|
|
(464)
|
|
Effect of foreign currency and other
|
(12)
|
|
|
19
|
|
|
(183)
|
|
Warranty balance at end of period
|
$
|
8,242
|
|
|
$
|
7,798
|
|
|
$
|
7,590
|
|
In the three months ended December 31, 2020, we recorded an accrual of $1.1 billion, which represents our current estimate of the expected costs of complying with the recall related to the Takata passenger-side inflators in certain GMT900 vehicles, which are full-size pickup trucks and SUVs. This accrual is reflected in Warranties issued and assumed in period – recall campaigns in the table above. Refer to Note 16 for additional information on Takata matters.
GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Note 13. Debt
Automotive The following table presents debt in our automotive operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
|
December 31, 2019
|
|
Carrying Amount
|
|
Fair Value
|
|
Carrying Amount
|
|
Fair Value
|
Secured debt
|
$
|
303
|
|
|
$
|
332
|
|
|
$
|
167
|
|
|
$
|
165
|
|
Unsecured debt
|
16,929
|
|
|
20,988
|
|
|
13,909
|
|
|
15,247
|
|
Finance lease liabilities
|
237
|
|
|
256
|
|
|
310
|
|
|
516
|
|
Total automotive debt(a)
|
$
|
17,469
|
|
|
$
|
21,576
|
|
|
$
|
14,386
|
|
|
$
|
15,928
|
|
|
|
|
|
|
|
|
|
Fair value utilizing Level 1 inputs
|
|
|
$
|
19,826
|
|
|
|
|
$
|
13,628
|
|
Fair value utilizing Level 2 inputs
|
|
|
$
|
1,750
|
|
|
|
|
$
|
2,300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available under credit facility agreements(b)
|
|
|
$
|
18,222
|
|
|
|
|
$
|
17,285
|
|
Weighted-average interest rate on outstanding short-term debt(c)
|
|
|
3.8
|
%
|
|
|
|
4.9
|
%
|
Weighted-average interest rate on outstanding long-term debt(c)
|
|
|
5.6
|
%
|
|
|
|
5.4
|
%
|
__________
(a)Includes net discount and debt issuance costs of $540 million at December 31, 2020 and 2019.
(b)Excludes our 364-day, $2.0 billion facility designated for exclusive use by GM Financial.
(c)Includes coupon rates on debt denominated in various foreign currencies and interest free loans.
Unsecured debt primarily consists of revolving credit facilities and senior notes. In March 2020, we borrowed: (1) $3.4 billion against our three-year, $4.0 billion facility; (2) $2.0 billion against our three-year, $3.0 billion facility, which reduced to $2.0 billion in May 2020 (three-year, $2.0 billion transformation facility); and (3) $10.5 billion against our five-year, $10.5 billion facility with maturity dates ranging from 2021 to 2023. We repaid all amounts drawn under the revolving credit facilities as of December 31, 2020. We did not have any borrowings against our revolving credit facilities at December 31, 2019.
In April 2020, we renewed our 364-day, $2.0 billion facility dedicated for exclusive use by GM Financial for an additional 364-day term and extended $3.6 billion of the three-year, $4.0 billion facility for an additional year expiring in April 2022. The remaining portion will expire in April 2021, unless extended. As part of the extension of the three-year, $4.0 billion facility, we agreed not to execute any share repurchases while we have any outstanding borrowings under the revolving credit facilities, except for the three-year, $2.0 billion transformation facility. In addition, we are restricted from paying dividends on our common shares if outstanding borrowings under the revolving credit facilities exceed $5.0 billion, with the exception of the three-year, $2.0 billion transformation facility.
In May 2020, we issued $4.0 billion in aggregate principal amount of senior unsecured notes with a weighted average interest rate of 6.11% and maturity dates ranging from 2023 to 2027. The notes are governed by a sixth supplemental indenture and the same base indenture that governs our existing notes, which contains terms and covenants customary to these types of securities, including a limitation on the amount of certain secured debt we may incur. The net proceeds from the issuance of these senior unsecured notes provide additional financial flexibility and will be used for general corporate purposes. In May 2020, we entered into a new unsecured 364-day, $2.0 billion revolving credit facility as an additional source of available liquidity. In August 2020, we repaid $500 million of our floating rate senior unsecured debt upon maturity.
GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
GM Financial The following table presents debt of GM Financial:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
|
December 31, 2019
|
|
Carrying Amount
|
|
Fair Value
|
|
Carrying Amount
|
|
Fair Value
|
Secured debt
|
$
|
39,982
|
|
|
$
|
40,380
|
|
|
$
|
39,959
|
|
|
$
|
40,160
|
|
Unsecured debt
|
52,443
|
|
|
54,568
|
|
|
48,979
|
|
|
50,239
|
|
Total GM Financial debt
|
$
|
92,425
|
|
|
$
|
94,948
|
|
|
$
|
88,938
|
|
|
$
|
90,399
|
|
|
|
|
|
|
|
|
|
Fair value utilizing Level 2 inputs
|
|
|
$
|
92,922
|
|
|
|
|
$
|
88,481
|
|
Fair value utilizing Level 3 inputs
|
|
|
$
|
2,026
|
|
|
|
|
$
|
1,918
|
|
Secured debt consists of revolving credit facilities and securitization notes payable. Most of the secured debt was issued by VIEs and is repayable only from proceeds related to the underlying pledged assets. Refer to Note 11 for additional information on GM Financial's involvement with VIEs. GM Financial is required to hold certain funds in restricted cash accounts to provide additional collateral for borrowings under certain secured credit facilities. The weighted-average interest rate on secured debt was 1.89% at December 31, 2020. The revolving credit facilities have maturity dates ranging from 2021 to 2026 and securitization notes payable have maturity dates ranging from 2021 to 2028. At the end of the revolving period, if not renewed, the debt of revolving credit facilities will amortize over a defined period. In the year ended December 31, 2020, GM Financial renewed revolving credit facilities with total borrowing capacity of $21.1 billion and issued $24.6 billion in aggregate principal amount of securitization notes payable with an initial weighted average interest rate of 1.17% and maturity dates ranging from 2021 to 2028.
Unsecured debt consists of senior notes, credit facilities and other unsecured debt. Senior notes outstanding at December 31, 2020 have maturity dates ranging from 2021 to 2030 and have a weighted-average interest rate of 3.25%. In the year ended December 31, 2020, GM Financial issued $9.2 billion in aggregate principal amount of senior notes with an initial weighted average interest rate of 2.93% and maturity dates ranging from 2023 to 2030.
In January 2021, GM Financial issued $2.5 billion in senior notes with a weighted average interest rate of 1.69% and maturity dates ranging from 2026 to 2031. In January 2021, GM Financial issued CAD $500 million in senior notes with an interest rate of 1.75% due in 2026.
Unsecured credit facilities and other unsecured debt have original maturities of up to four years. The weighted-average interest rate on these credit facilities and other unsecured debt was 2.47% at December 31, 2020.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
2020
|
|
2019
|
|
2018
|
Automotive interest expense
|
$
|
1,098
|
|
|
$
|
782
|
|
|
$
|
655
|
|
Automotive Financing - GM Financial interest expense
|
3,023
|
|
|
3,641
|
|
|
3,225
|
|
Total interest expense
|
$
|
4,121
|
|
|
$
|
4,423
|
|
|
$
|
3,880
|
|
GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
The following table summarizes contractual maturities including finance leases at December 31, 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Automotive
|
|
Automotive Financing
|
|
Total
|
2021
|
$
|
1,276
|
|
|
$
|
35,742
|
|
|
$
|
37,018
|
|
2022
|
137
|
|
|
19,312
|
|
|
19,449
|
|
2023
|
2,593
|
|
|
15,267
|
|
|
17,860
|
|
2024
|
86
|
|
|
7,808
|
|
|
7,894
|
|
2025
|
2,578
|
|
|
6,609
|
|
|
9,187
|
|
Thereafter
|
11,339
|
|
|
7,277
|
|
|
18,616
|
|
|
$
|
18,009
|
|
|
$
|
92,015
|
|
|
$
|
110,024
|
|
Compliance with Debt Covenants Several of our loan facilities, including our revolving credit facilities, require compliance with certain financial and operational covenants as well as regular reporting to lenders, including providing certain subsidiary financial statements. Certain of GM Financial’s secured debt agreements also contain various covenants, including maintaining portfolio performance ratios as well as limits on deferment levels. GM Financial’s unsecured debt obligations contain covenants including limitations on GM Financial's ability to incur certain liens. Failure to meet certain of these requirements may result in a covenant violation or an event of default depending on the terms of the agreement. An event of default may allow lenders to declare amounts outstanding under these agreements immediately due and payable, to enforce their interests against collateral pledged under these agreements or restrict our ability or GM Financial's ability to obtain additional borrowings. No technical defaults or covenant violations existed at December 31, 2020.
Note 14. Derivative Financial Instruments
Automotive The following table presents the notional amounts of derivative financial instruments in our automotive operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Level
|
|
December 31, 2020
|
|
December 31, 2019
|
Derivatives not designated as hedges(a)
|
|
|
|
|
|
Foreign currency
|
2
|
|
$
|
2,195
|
|
|
$
|
5,075
|
|
Commodity
|
2
|
|
341
|
|
|
806
|
|
PSA Warrants(b)
|
2
|
|
49
|
|
|
45
|
|
Total derivative financial instruments
|
|
|
$
|
2,585
|
|
|
$
|
5,926
|
|
__________
(a)The fair value of these derivative instruments at December 31, 2020 and 2019 and the gains/losses included in our consolidated income statements for the years ended December 31, 2020, 2019 and 2018 were insignificant, unless otherwise noted.
(b)The fair value of the PSA warrants located in Other assets was $1.1 billion and $964 million at December 31, 2020 and 2019. We recorded gains in Interest income and other non-operating income, net of $139 million, $154 million and $116 million for the years ended December 31, 2020, 2019 and 2018. As a result of the merger of PSA Group and Fiat Chrysler Automobiles N.V. on January 16, 2021, our 39.7 million warrants in PSA Group will convert into 69.2 million common shares of Stellantis N.V. upon exercise. These warrants will continue to be governed by the same terms and conditions that were applicable prior to the merger.
GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
GM Financial The following table presents the gross fair value amounts of GM Financial's derivative financial instruments and the associated notional amounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Level
|
|
December 31, 2020
|
|
December 31, 2019
|
|
|
|
|
Notional
|
|
Fair Value of Assets
|
|
Fair Value of Liabilities
|
|
Notional
|
|
Fair Value of Assets
|
|
Fair Value of Liabilities
|
Derivatives designated as hedges(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value hedges
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate swaps
|
|
2
|
|
$
|
10,064
|
|
|
$
|
463
|
|
|
$
|
13
|
|
|
$
|
9,458
|
|
|
$
|
234
|
|
|
$
|
23
|
|
Foreign currency swaps
|
|
2
|
|
1,958
|
|
|
128
|
|
|
9
|
|
|
1,796
|
|
|
22
|
|
|
71
|
|
Cash flow hedges
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate swaps
|
|
2
|
|
921
|
|
|
—
|
|
|
27
|
|
|
590
|
|
|
—
|
|
|
6
|
|
Foreign currency swaps
|
|
2
|
|
5,626
|
|
|
278
|
|
|
47
|
|
|
4,429
|
|
|
40
|
|
|
119
|
|
Derivatives not designated as hedges(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate contracts
|
|
2
|
|
110,997
|
|
|
954
|
|
|
576
|
|
|
92,400
|
|
|
340
|
|
|
300
|
|
Total derivative financial instruments(b)
|
|
|
|
$
|
129,566
|
|
|
$
|
1,823
|
|
|
$
|
672
|
|
|
$
|
108,673
|
|
|
$
|
636
|
|
|
$
|
519
|
|
__________
(a)The gains/losses included in our consolidated income statements and statements of comprehensive income for the years ended December 31, 2020, 2019 and 2018 were insignificant, unless otherwise noted. Amounts accrued for interest payments in a net receivable position are included in Other assets. Amounts accrued for interest payments in a net payable position are included in Other liabilities.
(b)GM Financial held $728 million and $210 million of collateral from counterparties available for netting against GM Financial's asset positions, and posted an insignificant amount of collateral to counterparties available for netting against GM Financial's liability positions at December 31, 2020 and 2019.
The fair value for Level 2 instruments was derived using the market approach based on observable market inputs including quoted prices of similar instruments and foreign exchange and interest rate forward curves.
The following amounts were recorded in the consolidated balance sheets related to items designated and qualifying as hedged items in fair value hedging relationships:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
|
December 31, 2019
|
|
Carrying Amount of Hedged Items
|
|
Cumulative Amount of Fair Value Hedging Adjustments(a)
|
|
Carrying Amount of Hedged Items
|
|
Cumulative Amount of Fair Value Hedging Adjustments(a)
|
Short-term unsecured debt
|
$
|
4,858
|
|
|
$
|
(69)
|
|
|
$
|
996
|
|
|
$
|
4
|
|
Long-term unsecured debt
|
18,457
|
|
|
(670)
|
|
|
19,401
|
|
|
(81)
|
|
GM Financial unsecured debt
|
$
|
23,315
|
|
|
$
|
(739)
|
|
|
$
|
20,397
|
|
|
$
|
(77)
|
|
__________
(a)Includes $200 million of unamortized gains and an insignificant amount of amortization remaining on hedged items for which hedge accounting has been discontinued at December 31, 2020 and 2019.
Note 15. Pensions and Other Postretirement Benefits
Employee Pension and Other Postretirement Benefit Plans
Defined Benefit Pension Plans Defined benefit pension plans covering eligible U.S. hourly employees (hired prior to October 2007) and Canadian hourly employees (hired prior to October 2016) generally provide benefits of negotiated, stated amounts for each year of service and supplemental benefits for employees who retire with 30 years of service before normal retirement age. The benefits provided by the defined benefit pension plans covering eligible U.S. (hired prior to January 1, 2001) and Canadian salaried employees and employees in certain other non-U.S. locations are generally based on years of service and compensation history. Accrual of defined pension benefits ceased in 2012 for U.S. and Canadian salaried employees. There is also an unfunded nonqualified pension plan primarily covering U.S. executives for service prior to January 1, 2007 and it is based on an “excess plan” for service after that date.
GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
The funding policy for qualified defined benefit pension plans is to contribute annually not less than the minimum required by applicable laws and regulations or to directly pay benefit payments where appropriate. In the year ended December 31, 2020 all legal funding requirements were met. The following table summarizes contributions made to the defined benefit pension plans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
2020
|
|
2019
|
|
2018
|
U.S. hourly and salaried
|
$
|
68
|
|
|
$
|
83
|
|
|
$
|
76
|
|
Non-U.S.
|
396
|
|
|
532
|
|
|
1,624
|
|
Total
|
$
|
464
|
|
|
$
|
615
|
|
|
$
|
1,700
|
|
We expect to contribute approximately $70 million to our U.S. non-qualified plans and approximately $500 million to our non-U.S. pension plans in 2021.
Based on our current assumptions, over the next five years we expect no significant mandatory contributions to our U.S. qualified pension plans and mandatory contributions totaling $366 million to our U.K. and Canada pension plans.
Other Postretirement Benefit Plans Certain hourly and salaried defined benefit plans provide postretirement medical, dental, legal service and life insurance to eligible U.S. and Canadian retirees and their eligible dependents. Certain other non-U.S. subsidiaries have postretirement benefit plans, although most non-U.S. employees are covered by government sponsored or administered programs. We made contributions to the U.S. OPEB plans of $343 million, $326 million and $325 million in the years ended December 31, 2020, 2019 and 2018. Plan participants' contributions were insignificant in the years ended December 31, 2020, 2019 and 2018.
Defined Contribution Plans We have defined contribution plans for eligible U.S. salaried and hourly employees that provide discretionary matching contributions. Contributions are also made to certain non-U.S. defined contribution plans. We made contributions to our defined contribution plans of $573 million, $537 million and $617 million in the years ended December 31, 2020, 2019 and 2018.
Significant Plan Amendments, Benefit Modifications and Related Events
Other Remeasurements The SOA issued mortality improvement tables in the three months ended December 31, 2020. We incorporated these SOA mortality improvement tables into the December 31, 2020 measurement of our U.S. pension and OPEB plans' benefit obligations. The change in these assumptions decreased the December 31, 2020 U.S. pension and OPEB plans' obligations by $686 million. We incorporated the mortality improvement tables issued by the SOA in the three months ended December 31, 2018, and updated our base mortality assumptions in the U.S. This change in assumption decreased the December 31, 2018 U.S. pension and OPEB plans' obligations by $264 million.
GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Pension and OPEB Obligations and Plan Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2020
|
|
Year Ended December 31, 2019
|
|
Pension Benefits
|
|
Global OPEB Plans
|
|
Pension Benefits
|
|
Global OPEB Plans
|
|
U.S.
|
|
Non-U.S.
|
|
|
U.S.
|
|
Non-U.S.
|
|
Change in benefit obligations
|
|
|
|
|
|
|
|
|
|
|
|
Beginning benefit obligation
|
$
|
64,684
|
|
|
$
|
21,398
|
|
|
$
|
6,304
|
|
|
$
|
61,190
|
|
|
$
|
19,904
|
|
|
$
|
5,744
|
|
Service cost
|
177
|
|
|
133
|
|
|
19
|
|
|
179
|
|
|
120
|
|
|
17
|
|
Interest cost
|
1,716
|
|
|
362
|
|
|
173
|
|
|
2,264
|
|
|
456
|
|
|
220
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Actuarial losses
|
4,757
|
|
|
1,506
|
|
|
551
|
|
|
6,444
|
|
|
1,653
|
|
|
641
|
|
Benefits paid
|
(4,600)
|
|
|
(1,132)
|
|
|
(408)
|
|
|
(4,753)
|
|
|
(1,234)
|
|
|
(395)
|
|
Foreign currency translation adjustments
|
—
|
|
|
870
|
|
|
(3)
|
|
|
—
|
|
|
561
|
|
|
54
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Curtailments, settlements and other
|
(266)
|
|
|
(2,330)
|
|
|
20
|
|
|
(640)
|
|
|
(62)
|
|
|
23
|
|
Ending benefit obligation
|
66,468
|
|
|
20,807
|
|
|
6,656
|
|
|
64,684
|
|
|
21,398
|
|
|
6,304
|
|
Change in plan assets
|
|
|
|
|
|
|
|
|
|
|
|
Beginning fair value of plan assets
|
59,239
|
|
|
14,961
|
|
|
—
|
|
|
56,102
|
|
|
13,528
|
|
|
—
|
|
Actual return on plan assets
|
6,635
|
|
|
1,573
|
|
|
—
|
|
|
8,454
|
|
|
1,669
|
|
|
—
|
|
Employer contributions
|
68
|
|
|
396
|
|
|
387
|
|
|
83
|
|
|
532
|
|
|
370
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefits paid
|
(4,600)
|
|
|
(1,132)
|
|
|
(408)
|
|
|
(4,753)
|
|
|
(1,234)
|
|
|
(395)
|
|
Foreign currency translation adjustments
|
—
|
|
|
389
|
|
|
—
|
|
|
—
|
|
|
668
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Settlements and other
|
(265)
|
|
|
(2,341)
|
|
|
21
|
|
|
(647)
|
|
|
(202)
|
|
|
25
|
|
Ending fair value of plan assets
|
61,077
|
|
|
13,846
|
|
|
—
|
|
|
59,239
|
|
|
14,961
|
|
|
—
|
|
Ending funded status
|
$
|
(5,391)
|
|
|
$
|
(6,961)
|
|
|
$
|
(6,656)
|
|
|
$
|
(5,445)
|
|
|
$
|
(6,437)
|
|
|
$
|
(6,304)
|
|
Amounts recorded in the consolidated balance sheets
|
|
|
|
|
|
|
|
|
|
|
|
Non-current assets
|
$
|
—
|
|
|
$
|
980
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
698
|
|
|
$
|
—
|
|
Current liabilities
|
(66)
|
|
|
(364)
|
|
|
(379)
|
|
|
(68)
|
|
|
(342)
|
|
|
(369)
|
|
Non-current liabilities
|
(5,325)
|
|
|
(7,577)
|
|
|
(6,277)
|
|
|
(5,377)
|
|
|
(6,793)
|
|
|
(5,935)
|
|
Net amount recorded
|
$
|
(5,391)
|
|
|
$
|
(6,961)
|
|
|
$
|
(6,656)
|
|
|
$
|
(5,445)
|
|
|
$
|
(6,437)
|
|
|
$
|
(6,304)
|
|
Amounts recorded in Accumulated other comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
Net actuarial loss
|
$
|
(3,256)
|
|
|
$
|
(5,123)
|
|
|
$
|
(1,823)
|
|
|
$
|
(1,980)
|
|
|
$
|
(4,688)
|
|
|
$
|
(1,364)
|
|
Net prior service (cost) credit
|
11
|
|
|
(60)
|
|
|
20
|
|
|
14
|
|
|
(78)
|
|
|
27
|
|
Total recorded in Accumulated other comprehensive loss
|
$
|
(3,245)
|
|
|
$
|
(5,183)
|
|
|
$
|
(1,803)
|
|
|
$
|
(1,966)
|
|
|
$
|
(4,766)
|
|
|
$
|
(1,337)
|
|
In the years ended December 31, 2020 and 2019, the actuarial losses on the benefit obligations were primarily due to decreases in discount rates for all plans.
GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
The following table summarizes the total accumulated benefit obligations (ABO), the ABO and fair value of plan assets for defined benefit pension plans with ABO in excess of plan assets, and the projected benefit obligation (PBO) and fair value of plan assets for defined benefit pension plans with PBO in excess of plan assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
|
December 31, 2019
|
|
U.S.
|
|
Non-U.S.
|
|
U.S.
|
|
Non-U.S.
|
ABO
|
$
|
66,448
|
|
|
$
|
20,721
|
|
|
$
|
64,669
|
|
|
$
|
21,319
|
|
Plans with ABO in excess of plan assets
|
|
|
|
|
|
|
|
ABO
|
$
|
66,448
|
|
|
$
|
12,042
|
|
|
$
|
64,669
|
|
|
$
|
10,996
|
|
Fair value of plan assets
|
$
|
61,077
|
|
|
$
|
4,185
|
|
|
$
|
59,239
|
|
|
$
|
3,940
|
|
Plans with PBO in excess of plan assets
|
|
|
|
|
|
|
|
PBO
|
$
|
66,468
|
|
|
$
|
12,128
|
|
|
$
|
64,684
|
|
|
$
|
11,079
|
|
Fair value of plan assets
|
$
|
61,077
|
|
|
$
|
4,186
|
|
|
$
|
59,239
|
|
|
$
|
3,940
|
|
The following table summarizes the components of net periodic pension and OPEB expense along with the assumptions used to determine benefit obligations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2020
|
|
Year Ended December 31, 2019
|
|
Year Ended December 31, 2018
|
|
Pension Benefits
|
|
Global OPEB Plans
|
|
Pension Benefits
|
|
Global OPEB Plans
|
|
Pension Benefits
|
|
Global OPEB Plans
|
|
U.S.
|
|
Non-U.S.
|
|
|
U.S.
|
|
Non-U.S.
|
|
|
U.S.
|
|
Non-U.S.
|
|
Components of expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service cost
|
$
|
251
|
|
|
$
|
145
|
|
|
$
|
19
|
|
|
$
|
393
|
|
|
$
|
132
|
|
|
$
|
17
|
|
|
$
|
330
|
|
|
$
|
163
|
|
|
$
|
20
|
|
Interest cost
|
1,716
|
|
|
362
|
|
|
173
|
|
|
2,264
|
|
|
456
|
|
|
220
|
|
|
2,050
|
|
|
464
|
|
|
195
|
|
Expected return on plan assets
|
(3,267)
|
|
|
(675)
|
|
|
—
|
|
|
(3,483)
|
|
|
(786)
|
|
|
—
|
|
|
(3,890)
|
|
|
(825)
|
|
|
—
|
|
Amortization of net actuarial losses
|
16
|
|
|
171
|
|
|
74
|
|
|
11
|
|
|
122
|
|
|
30
|
|
|
10
|
|
|
144
|
|
|
54
|
|
Curtailments, settlements and other
|
17
|
|
|
241
|
|
|
(8)
|
|
|
21
|
|
|
142
|
|
|
(23)
|
|
|
(19)
|
|
|
43
|
|
|
(19)
|
|
Net periodic pension and OPEB (income) expense
|
$
|
(1,267)
|
|
|
$
|
244
|
|
|
$
|
258
|
|
|
$
|
(794)
|
|
|
$
|
66
|
|
|
$
|
244
|
|
|
$
|
(1,519)
|
|
|
$
|
(11)
|
|
|
$
|
250
|
|
Weighted-average assumptions used to determine benefit obligations(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discount rate
|
2.37
|
%
|
|
1.62
|
%
|
|
2.53
|
%
|
|
3.20
|
%
|
|
2.16
|
%
|
|
3.24
|
%
|
|
4.22
|
%
|
|
2.86
|
%
|
|
4.19
|
%
|
Weighted-average assumptions used to determine net expense(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discount rate
|
2.84
|
%
|
|
2.80
|
%
|
|
3.00
|
%
|
|
3.92
|
%
|
|
3.36
|
%
|
|
4.07
|
%
|
|
3.19
|
%
|
|
2.99
|
%
|
|
3.29
|
%
|
Expected rate of return on plan assets
|
5.88
|
%
|
|
4.96
|
%
|
|
N/A
|
|
6.37
|
%
|
|
5.76
|
%
|
|
N/A
|
|
6.61
|
%
|
|
6.09
|
%
|
|
N/A
|
_________
(a) The rate of compensation increase and the cash balance interest crediting rates do not have a significant effect on our U.S. pension and OPEB plans.
The non-service cost components of the net periodic pension and OPEB income are presented in Interest income and other non-operating income, net. Refer to Note 19 for additional information.
U.S. pension plan service cost includes administrative expenses and Pension Benefit Guarantee Corporation premiums were insignificant, $214 million and $121 million for the years ended December 31, 2020, 2019 and 2018. Weighted-average assumptions used to determine net expense are determined at the beginning of the period and updated for remeasurements. Non-U.S. pension plan administrative expenses included in service cost were insignificant in the years ended December 31, 2020, 2019 and 2018.
In the three months ended December 31, 2020, we completed a $1.5 billion annuity purchase for salaried retirees in Canada. This resulted in a non-operating pension settlement charge of $130 million.
GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Assumptions
Investment Strategies and Long-Term Rate of Return Detailed periodic studies are conducted by our internal asset management group as well as outside actuaries and are used to determine the long-term strategic mix among asset classes, risk mitigation strategies and the expected long-term return on asset assumptions for the U.S. pension plans. The U.S. study includes a review of alternative asset allocation and risk mitigation strategies, anticipated future long-term performance and risk of the individual asset classes that comprise the plans' asset mix. Similar studies are performed for the significant non-U.S. pension plans with the assistance of outside actuaries and asset managers. While the studies incorporate data from recent plan performance and historical returns, the expected rate of return on plan assets represents our estimate of long-term prospective rates of return.
We continue to pursue various options to fund and de-risk our pension plans, including continued changes to the pension asset portfolio mix to reduce funded status volatility. The strategic asset mix and risk mitigation strategies for the plans are tailored specifically for each plan. Individual plans have distinct liabilities, liquidity needs and regulatory requirements. Consequently there are different investment policies set by individual plan fiduciaries. Although investment policies and risk mitigation strategies may differ among plans, each investment strategy is considered to be appropriate in the context of the specific factors affecting each plan.
In setting new strategic asset mixes, consideration is given to the likelihood that the selected asset mixes will effectively fund the projected pension plan liabilities, while aligning with the risk tolerance of the plans' fiduciaries. The strategic asset mixes for U.S. defined benefit pension plans are increasingly designed to satisfy the competing objectives of improving funded positions (market value of assets equal to or greater than the present value of the liabilities) and mitigating the possibility of a deterioration in funded status.
Derivatives may be used to provide cost effective solutions for rebalancing investment portfolios, increasing or decreasing exposure to various asset classes and for mitigating risks, primarily interest rate, equity and currency risks. Equity and fixed income managers are permitted to utilize derivatives as efficient substitutes for traditional securities. Interest rate derivatives may be used to adjust portfolio duration to align with a plan's targeted investment policy and equity derivatives may be used to protect equity positions from downside market losses. Alternative investment managers are permitted to employ leverage, including through the use of derivatives, which may alter economic exposure.
In December 2020, an investment policy study was completed for the U.S. pension plans. As a result of changes to our capital market assumptions, the weighted-average long-term rate of return on assets decreased from 5.9% at December 31, 2019 to 5.6% at December 31, 2020. The expected long-term rate of return on plan assets used in determining pension expense for non-U.S. plans is determined in a similar manner to the U.S. plans.
Target Allocation Percentages The following table summarizes the target allocations by asset category for U.S. and non-U.S. defined benefit pension plans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
|
December 31, 2019
|
|
U.S.
|
|
Non-U.S.
|
|
U.S.
|
|
Non-U.S.
|
Equity
|
12
|
%
|
|
16
|
%
|
|
12
|
%
|
|
14
|
%
|
Debt
|
64
|
%
|
|
66
|
%
|
|
64
|
%
|
|
67
|
%
|
Other(a)
|
24
|
%
|
|
18
|
%
|
|
24
|
%
|
|
19
|
%
|
Total
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
__________
(a) Primarily includes private equity, real estate and absolute return strategies which mainly consist of hedge funds.
GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Assets and Fair Value Measurements The following tables summarize the fair value of U.S. and non-U.S. defined benefit pension plan assets by asset class:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
|
December 31, 2019
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
U.S. Pension Plan Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common and preferred stocks
|
$
|
7,429
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
7,430
|
|
|
$
|
6,232
|
|
|
$
|
19
|
|
|
$
|
1
|
|
|
$
|
6,252
|
|
Government and agency debt securities(a)
|
—
|
|
|
13,231
|
|
|
—
|
|
|
13,231
|
|
|
—
|
|
|
13,843
|
|
|
—
|
|
|
13,843
|
|
Corporate and other debt securities
|
—
|
|
|
26,475
|
|
|
—
|
|
|
26,475
|
|
|
—
|
|
|
24,809
|
|
|
—
|
|
|
24,809
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other investments, net(b)(c)
|
(834)
|
|
|
(8)
|
|
|
427
|
|
|
(415)
|
|
|
(47)
|
|
|
25
|
|
|
401
|
|
|
379
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net plan assets subject to leveling
|
$
|
6,595
|
|
|
$
|
39,698
|
|
|
$
|
428
|
|
|
46,721
|
|
|
$
|
6,185
|
|
|
$
|
38,696
|
|
|
$
|
402
|
|
|
45,283
|
|
Plan assets measured at net asset value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment funds
|
|
|
|
|
|
|
7,534
|
|
|
|
|
|
|
|
|
7,031
|
|
Private equity and debt investments
|
|
|
|
|
|
|
3,137
|
|
|
|
|
|
|
|
|
2,951
|
|
Real estate investments
|
|
|
|
|
|
|
3,061
|
|
|
|
|
|
|
|
|
3,484
|
|
Total plan assets measured at net asset value
|
|
|
|
|
|
|
13,732
|
|
|
|
|
|
|
|
|
13,466
|
|
Other plan assets, net(d)
|
|
|
|
|
|
|
624
|
|
|
|
|
|
|
|
|
490
|
|
Net plan assets
|
|
|
|
|
|
|
$
|
61,077
|
|
|
|
|
|
|
|
|
$
|
59,239
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
|
December 31, 2019
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
Non-U.S. Pension Plan Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common and preferred stocks
|
$
|
572
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
572
|
|
|
$
|
489
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
490
|
|
Government and agency debt securities(a)
|
—
|
|
|
3,178
|
|
|
—
|
|
|
3,178
|
|
|
—
|
|
|
3,927
|
|
|
—
|
|
|
3,927
|
|
Corporate and other debt securities
|
—
|
|
|
2,762
|
|
|
—
|
|
|
2,762
|
|
|
—
|
|
|
3,230
|
|
|
—
|
|
|
3,230
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other investments, net(b)(e)
|
31
|
|
|
(79)
|
|
|
127
|
|
|
79
|
|
|
(5)
|
|
|
(107)
|
|
|
248
|
|
|
136
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net plan assets subject to leveling
|
$
|
603
|
|
|
$
|
5,861
|
|
|
$
|
127
|
|
|
6,591
|
|
|
$
|
484
|
|
|
$
|
7,051
|
|
|
$
|
248
|
|
|
7,783
|
|
Plan assets measured at net asset value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment funds
|
|
|
|
|
|
|
5,870
|
|
|
|
|
|
|
|
|
5,608
|
|
Private equity and debt investments
|
|
|
|
|
|
|
489
|
|
|
|
|
|
|
|
|
511
|
|
Real estate investments
|
|
|
|
|
|
|
917
|
|
|
|
|
|
|
|
|
982
|
|
Total plan assets measured at net asset value
|
|
|
|
|
|
|
7,276
|
|
|
|
|
|
|
|
|
7,101
|
|
Other plan assets (liabilities), net(d)
|
|
|
|
|
|
|
(21)
|
|
|
|
|
|
|
|
|
77
|
|
Net plan assets
|
|
|
|
|
|
|
$
|
13,846
|
|
|
|
|
|
|
|
|
$
|
14,961
|
|
__________
(a)Includes U.S. and sovereign government and agency issues.
(b)Includes net derivative assets (liabilities).
(c)Level 1 Other investments, net includes derivative liabilities approximating $1.0 billion related to equity option and futures contracts at December 31, 2020.
(d)Cash held by the plans, net of amounts receivable/payable for unsettled security transactions and payables for investment manager fees, custody fees and other expenses.
(e)Level 2 Other investments, net includes Canadian reverse repurchase agreements.
The activity attributable to U.S. and non-U.S. Level 3 defined benefit pension plan investments was insignificant in the years ended December 31, 2020 and 2019.
Investment Fund Strategies Investment funds include hedge funds, funds of hedge funds, equity funds and fixed income funds. Hedge funds and funds of hedge funds managers typically seek to achieve their objectives by allocating capital across a broad array of funds and/or investment managers. Equity funds invest in U.S. common and preferred stocks as well as similar equity securities issued by companies incorporated, listed or domiciled in developed and/or emerging market countries. Fixed income funds include investments in high quality funds and, to a lesser extent, high yield funds. High quality fixed income funds invest in government securities, investment-grade corporate bonds and mortgage and asset-backed securities. High yield fixed income funds invest in high yield fixed income securities issued by corporations which are rated below investment grade. Other investment funds also included in this category primarily represent multi-strategy funds that invest in broadly diversified portfolios of equity, fixed income and derivative instruments.
GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Private equity and debt investments primarily consist of investments in private equity and debt funds. These investments provide exposure to and benefit from long-term equity investments in private companies, including leveraged buy-outs, venture capital and distressed debt strategies.
Real estate investments include funds that invest in entities which are primarily engaged in the ownership, acquisition, development, financing, sale and/or management of income-producing real estate properties, both commercial and residential. These funds typically seek long-term growth of capital and current income that is above average relative to public equity funds.
Significant Concentrations of Risk The assets of the pension plans include certain investment funds, private equity and debt investments and real estate investments. Investment managers may be unable to quickly sell or redeem some or all of these investments at an amount close or equal to fair value in order to meet a plan's liquidity requirements or to respond to specific events such as deterioration in the creditworthiness of any particular issuer or counterparty.
Illiquid investments held by the plans are generally long-term investments that complement the long-term nature of pension obligations and are not used to fund benefit payments when currently due. Plan management monitors liquidity risk on an ongoing basis and has procedures in place that are designed to maintain flexibility in addressing plan-specific, broader industry and market liquidity events.
The pension plans may invest in financial instruments denominated in foreign currencies and may be exposed to risks that the foreign currency exchange rates might change in a manner that has an adverse effect on the value of the foreign currency denominated assets or liabilities. Forward currency contracts may be used to manage and mitigate foreign currency risk.
The pension plans may invest in debt securities for which any change in the relevant interest rates for particular securities might result in an investment manager being unable to secure similar returns upon the maturity or the sale of securities. In addition, changes to prevailing interest rates or changes in expectations of future interest rates might result in an increase or decrease in the fair value of the securities held. Interest rate swaps and other financial derivative instruments may be used to manage interest rate risk.
Benefit Payments Benefits for most U.S. pension plans and certain non-U.S. pension plans are paid out of plan assets rather than our Cash and cash equivalents. The following table summarizes net benefit payments expected to be paid in the future, which include assumptions related to estimated future employee service:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Benefits
|
|
Global OPEB Plans
|
|
U.S. Plans
|
|
Non-U.S. Plans
|
|
2021
|
$
|
4,821
|
|
|
$
|
1,172
|
|
|
$
|
379
|
|
2022
|
$
|
4,614
|
|
|
$
|
1,070
|
|
|
$
|
374
|
|
2023
|
$
|
4,495
|
|
|
$
|
1,038
|
|
|
$
|
369
|
|
2024
|
$
|
4,387
|
|
|
$
|
1,015
|
|
|
$
|
364
|
|
2025
|
$
|
4,278
|
|
|
$
|
1,000
|
|
|
$
|
361
|
|
2026 - 2030
|
$
|
19,469
|
|
|
$
|
4,673
|
|
|
$
|
1,761
|
|
Note 16. Commitments and Contingencies
Litigation-Related Liability and Tax Administrative Matters In the normal course of our business, we are named from time to time as a defendant in various legal actions, including arbitrations, class actions and other litigation. We identify below the material individual proceedings and investigations where we believe a material loss is reasonably possible or probable. We accrue for matters when we believe that losses are probable and can be reasonably estimated. At December 31, 2020 and 2019, we had accruals of $1.2 billion and $1.3 billion in Accrued liabilities and Other liabilities. In many matters, it is inherently difficult to determine whether loss is probable or reasonably possible or to estimate the size or range of the possible loss. Accordingly adverse outcomes from such proceedings could exceed the amounts accrued by an amount that could be material to our results of operations or cash flows in any particular reporting period.
Proceedings Related to Ignition Switch Recall and Other Recalls In 2014 we announced various recalls relating to safety and other matters. Those recalls included recalls to repair ignition switches that could under certain circumstances
GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
unintentionally move from the “run” position to the “accessory” or “off” position with a corresponding loss of power, which could in turn prevent airbags from deploying in the event of a crash.
Appellate Litigation Regarding Successor Liability Ignition Switch Claims In 2016, the U.S. Court of Appeals for the Second Circuit held that the 2009 order of the United States Bankruptcy Court for the Southern District of New York (Bankruptcy Court) approving the sale of substantially all of the assets of Motors Liquidation Company (MLC) to GM free and clear of, among other things, claims asserting successor liability for obligations owed by MLC could not be enforced to bar claims against GM asserted by either plaintiffs who purchased used vehicles after the sale or against purchasers who asserted claims relating to the ignition switch defect, including pre-sale personal injury claims and economic-loss claims.
Economic-Loss Claims We are aware of over 100 putative class actions that were filed against GM in U.S. and Canadian courts alleging that consumers who purchased or leased vehicles manufactured by GM or MLC had been economically harmed by one or more of the 2014 recalls and/or the underlying vehicle conditions associated with those recalls (economic-loss cases). In general, these economic-loss cases seek recovery for purported compensatory damages, such as alleged benefit-of-the-bargain damages or damages related to alleged diminution in value of the vehicles, as well as punitive damages, injunctive relief and other relief.
Many of the pending U.S. economic-loss claims have been transferred to, and consolidated in, a single federal court, the U.S. District Court for the Southern District of New York (Southern District). These plaintiffs have asserted economic-loss claims under federal and state laws, including claims relating to recalled vehicles manufactured by GM and claims asserting successor liability relating to certain recalled vehicles manufactured by MLC.
In August 2017, the Southern District granted our motion to dismiss the successor liability claims of plaintiffs in seven of the sixteen states at issue on the motion and called for additional briefing to decide whether plaintiffs' claims can proceed in the other nine states. In December 2017, the Southern District granted GM's motion and dismissed the plaintiffs' successor liability claims in an additional state, but found that there are genuine issues of material fact that prevent summary judgment for GM in eight other states. In January 2018, GM moved for reconsideration of certain portions of the Southern District's December 2017 summary judgment ruling. That motion was granted in April 2018, dismissing plaintiffs' successor liability claims in any state where New York law applies.
In September 2018, the Southern District granted our motion to dismiss claims for lost personal time (in 41 out of 47 jurisdictions) and certain unjust enrichment claims, but denied our motion to dismiss plaintiffs' economic loss claims in 27 jurisdictions under the "manifest defect" rule.
In August 2019, the Southern District granted our motion for summary judgment on plaintiffs’ economic loss “benefit of the bargain” damage claims (the August 2019 Opinion). The Southern District held that plaintiffs’ conjoint analysis-based damages model failed to establish that plaintiffs suffered difference-in-value damages and without such evidence, plaintiffs’ difference-in-value damage claims fail under the laws of all three bellwether states: California, Missouri and Texas. Later in August 2019, the bellwether plaintiffs filed a motion requesting that the Southern District reconsider its summary judgment decision or allow an interlocutory appeal if reconsideration is denied. In December 2019, the Southern District denied plaintiffs' motion for reconsideration of the August 2019 Opinion, but granted the plaintiffs' motion for certification of an interlocutory appeal. On April 1, 2020, the Second Circuit Court of Appeals (the Second Circuit) granted the bellwether plaintiffs' petition seeking leave to appeal the August 2019 Opinion. On April 15, 2020, the bellwether plaintiffs and GM filed a Stipulation to withdraw the appeal from the Second Circuit based on the class settlement agreement described below.
In September 2019, GM filed an updated motion for summary judgment on plaintiffs’ remaining economic loss claims that were not addressed in the Southern District’s August 2019 Opinion and renewed its evidentiary motion seeking to strike the opinions of plaintiff’s expert on plaintiffs’ alleged “lost time” damages associated with having the recall repairs performed.
In March 2020, GM, plaintiffs and the MLC GUC Trust (GUC Trust) reached a settlement agreement (Class Settlement Agreement) to resolve on a national basis the economic loss claims of the proposed settlement class and proposed sub-classes, consisting of consumers who purchased or leased GM vehicles covered by the seven 2014 safety recalls at issue in the Southern District and the Bankruptcy Court. The proposed Class Settlement Agreement provides a common fund of approximately $120 million for settlement class members, of which GM will fund approximately $70 million and the GUC Trust will fund the remaining $50 million. GM will also pay attorneys’ fees and costs that may be awarded by the Southern District to plaintiffs’ counsel up to a maximum of $35 million. In April 2020, the Avoidance Action Trust (AAT), GM and plaintiffs reached a
GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
tentative settlement under which the AAT will pay an insignificant amount and will be added as a settling party to the Class Settlement Agreement. During April and May 2020, the Southern District entered orders granting preliminary approval of the Class Settlement Agreement.
In December 2020, the Southern District conducted a final fairness hearing and issued an order granting final approval of the Class Settlement Agreement in its entirety. The order granting final approval became final, effective and binding in January 2021. The deadline for class members to file claims is April 2021.
Contingently Issuable Shares Under the Amended and Restated Master Sale and Purchase Agreement between GM and MLC, GM was obligated to issue Adjustment Shares of our common stock if allowed general unsecured claims against the GUC Trust, as estimated by the Bankruptcy Court, exceed $35.0 billion.
In March 2020, in conjunction with the Class Settlement Agreement, the GUC Trust filed a motion in the Bankruptcy Court seeking approval to enter into and take actions necessary to execute the Class Settlement Agreement, and seeking Bankruptcy Court authorization permitting the GUC Trust to distribute $300 million of GUC Trust assets to its unitholders and entry into a mutual release agreement with GM that would release GM from any and all claims, including any that would require GM to issue any Adjustment Shares. Bankruptcy Court approval of the GUC Trust motion is a condition precedent to preliminary approval of the Class Settlement Agreement by the Southern District. In April 2020, the Bankruptcy Court entered an order approving the GUC Trust's motion in its entirety. In May 2020, the approval and the mutual release agreement became binding and enforceable and GM was fully released from its potential Adjustment Shares obligation.
Personal Injury Claims We also are aware of less than one hundred active personal injury actions, exclusive of matters subject to settlements in principal, pending in various courts in the U.S. and Canada alleging injury or death as a result of defects that may be the subject of the 2014 recalls. In general, these cases seek recovery for purported compensatory damages, punitive damages and/or other relief. Since 2016, several bellwether trials of these cases have taken place in the Southern District and in a Texas state court, which is administering a Texas state multi-district litigation. None of these trials resulted in a finding of liability against GM.
Government Matters In connection with the 2014 recalls, we have from time to time received subpoenas and other requests for information related to investigations by agencies or other representatives of U.S. federal, state and the Canadian governments. GM is cooperating with all reasonable pending requests for information. Any existing governmental matters or investigations could in the future result in the imposition of damages, fines, civil consent orders, civil and criminal penalties or other remedies.
The total amount accrued for the 2014 recalls at December 31, 2020, reflects amounts for a combination of settled but unpaid matters, and for the remaining unsettled investigations, claims and/or lawsuits relating to the ignition switch recalls and other related recalls to the extent that such matters are probable and can be reasonably estimated. The amounts accrued for those unsettled investigations, claims, and/or lawsuits represent a combination of our best single point estimates where determinable and, where no such single point estimate is determinable, our estimate of the low end of the range of probable loss with regard to such matters, if that is determinable. We will continue to consider resolution of pending matters involving ignition switch recalls and other recalls where it makes sense to do so.
GM Korea Wage Litigation GM Korea is party to litigation with current and former hourly employees in the appellate court and Incheon District Court in Incheon, Korea. The group actions, which in the aggregate involve more than 10,000 employees, allege that GM Korea failed to include bonuses and certain allowances in its calculation of Ordinary Wages due under Korean regulations. In 2012 the Seoul High Court (an intermediate-level appellate court) affirmed a decision in one of these group actions involving five GM Korea employees which was contrary to GM Korea's position. GM Korea appealed to the Supreme Court of the Republic of Korea (Korean Supreme Court). In 2014 the Korean Supreme Court largely agreed with GM Korea's legal arguments and remanded the case to the Seoul High Court for consideration consistent with earlier Korean Supreme Court precedent holding that while fixed bonuses should be included in the calculation of Ordinary Wages, claims for retroactive application of this rule would be barred under certain circumstances. In 2015, on reconsideration, the Seoul High Court held in GM Korea's favor, after which the plaintiffs appealed to the Korean Supreme Court. In July 2020, the Korean Supreme Court held in GM Korea's favor. In light of this decision, we believe the probability that we will incur a material loss is remote and we estimate our loss in excess of amounts accrued is insignificant at December 31, 2020.
GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
GM Korea is also party to litigation with current and former salaried employees over allegations relating to Ordinary Wages regulation and whether to include fixed bonuses in the calculation of Ordinary Wages. In 2017, the Seoul High Court held that certain workers are not barred from filing retroactive wage claims. GM Korea appealed this ruling to the Korean Supreme Court. The Korean Supreme Court has not yet rendered a decision. We estimate our reasonably possible loss in excess of amounts accrued to be approximately $190 million at December 31, 2020. Both the scope of claims asserted and GM Korea's assessment of any or all of the individual claim elements may change if new information becomes available or the legal or regulatory frameworks change.
GM Korea is also party to litigation with current and former subcontract workers over allegations that they are entitled to the same wages and benefits provided to full-time employees, and to be hired as full-time employees. In May 2018 and September 2020, the Korean labor authorities issued adverse administrative orders finding that GM Korea must hire certain current subcontract workers as full-time employees. GM Korea appealed the May 2018 order and plans to appeal the September 2020 order. In June 2020, the Seoul High Court ruled against GM Korea in one of the subcontract worker claims. GM Korea has appealed this decision to the Korean Supreme Court. At December 31, 2020, our accrual covering certain asserted claims and claims that we believe are probable of assertion and for which liability is probable was approximately $240 million. We estimate the reasonably possible loss in excess of amounts accrued for other current subcontract workers who may assert similar claims to be approximately $120 million at December 31, 2020. We are currently unable to estimate any possible loss or range of loss that may result from additional claims that may be asserted by former subcontract workers.
GM Brazil Indirect Tax Claim In 2019, the Superior Court of Brazil rendered favorable decisions on three cases brought by GM Brazil challenging whether a certain state value-added tax should be included in the calculation of federal gross receipts taxes. Those decisions granted the Company the right to recover, through offset of federal tax liabilities, certain amounts collected by the government between August 2001 and February 2017. As a result, GM Brazil recorded pre-tax recoveries of $1.4 billion in Automotive and other cost of sales in the year ended December 31, 2019. Realization of these recoveries depends on the timing of administrative approvals and generation of federal tax liabilities eligible for offset. The Brazilian IRS has filed a Motion of Clarification on this matter with the Brazilian Supreme Court, which motion is awaiting decision. In addition, we expect third parties to make claims on some or all of the pre-tax recoveries, against which GM intends to defend.
Other Litigation-Related Liability and Tax Administrative Matters Various other legal actions, including class actions, governmental investigations, claims and proceedings, are pending against us or our related companies or joint ventures, including matters arising out of alleged product defects; employment-related matters; product and workplace safety, vehicle emissions and fuel economy regulations; product warranties; financial services; dealer, supplier and other contractual relationships; government regulations relating to competition issues; tax-related matters not subject to the provision of Accounting Standards Codification 740, Income Taxes (indirect tax-related matters); product design, manufacture and performance; consumer protection laws; and environmental protection laws, including laws regulating air emissions, water discharges, waste management and environmental remediation from stationary sources.
There are several putative class actions pending against GM in federal courts in the U.S. and in the Provincial Courts in Canada alleging that various vehicles sold, including model year 2011-2016 Duramax Diesel Chevrolet Silverado and GMC Sierra vehicles, violate federal, state and foreign emission standards. We are unable to estimate any reasonably possible loss or range of loss that may result from these actions. GM has also faced a series of additional lawsuits in the U.S. based on these allegations, including putative shareholder class actions claiming violations of federal securities law and a shareholder demand lawsuit. The securities lawsuits have been voluntarily dismissed by the plaintiffs in those actions.
We believe that appropriate accruals have been established for losses that are probable and can be reasonably estimated. It is possible that the resolution of one or more of these matters could exceed the amounts accrued in an amount that could be material to our results of operations. We also from time to time receive subpoenas and other inquiries or requests for information from agencies or other representatives of U.S. federal, state and foreign governments on a variety of issues.
Indirect tax-related matters are being litigated globally pertaining to value added taxes, customs, duties, sales, property taxes and other non-income tax related tax exposures. The various non-U.S. labor-related matters include claims from current and former employees related to alleged unpaid wage, benefit, severance and other compensation matters. Certain administrative proceedings are indirect tax-related and may require that we deposit funds in escrow or provide an alternative form of security. Some of the matters may involve compensatory, punitive or other treble damage claims, environmental remediation programs or sanctions that, if granted, could require us to pay damages or make other expenditures in amounts that could not be reasonably estimated at December 31, 2020. We believe that appropriate accruals have been established for losses that are
GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
probable and can be reasonably estimated. For indirect tax-related matters we estimate our reasonably possible loss in excess of amounts accrued to be up to approximately $750 million at December 31, 2020.
Takata Matters In May 2016, NHTSA issued an amended consent order requiring Takata to file defect information reports (DIRs) for previously unrecalled front airbag inflators that contain phased-stabilized ammonium nitrate-based propellant without a moisture absorbing desiccant on a multi-year, risk-based schedule through 2019 impacting tens of millions of vehicles produced by numerous automotive manufacturers. NHTSA concluded that the likely root cause of the rupturing of the airbag inflators is a function of time, temperature cycling and environmental moisture.
In cooperation with NHTSA we filed Preliminary DIRs covering certain of our GMT900 vehicles, which are full-size pickup trucks and SUVs, and petitions for inconsequentiality with respect to the vehicles subject to those Preliminary DIRs.
In November 2020, NHTSA denied GM's petitions for inconsequentiality relating to the Takata passenger-side inflators in certain GMT900 vehicles. NHTSA has directed that we replace the airbag inflators in the vehicles in question, and we have decided not to contest NHTSA's decision. While we have already begun the process of executing the recall, given the number of vehicles in this population, the recall will take several years to be completed.
Accordingly, in the three months ended December 31, 2020, we recorded a warranty accrual of $1.1 billion for the expected costs of complying with the recall remedy.
GM has recalled certain vehicles sold outside of the U.S. to replace Takata inflators in those vehicles. There are significant differences in vehicle and inflator design between the relevant vehicles sold internationally and those sold in the U.S. We continue to gather and analyze evidence about these inflators and to share our findings with regulators. Additional recalls, if any, could be material to our results of operations and cash flows. We continue to monitor the international situation.
There are several putative class actions that have been filed against GM, including in the federal courts in the U.S., in the Provincial Courts in Canada, and in Mexico and Israel, arising out of allegations that airbag inflators manufactured by Takata are defective. At this stage of these proceedings, we are unable to provide an estimate of the amounts or range of possible loss.
Product Liability We recorded liabilities of $589 million and $544 million in Accrued liabilities and Other liabilities at December 31, 2020 and 2019, for the expected cost of all known product liability claims, plus an estimate of the expected cost for product liability claims that have already been incurred and are expected to be filed in the future for which we are self-insured. It is reasonably possible that our accruals for product liability claims may increase in future periods in material amounts, although we cannot estimate a reasonable range of incremental loss based on currently available information. Other than claims relating to the ignition switch recalls discussed above, we believe that any judgment against us involving our and MLC products for actual damages will be adequately covered by our recorded accruals and, where applicable, excess liability insurance coverage.
Guarantees We enter into indemnification agreements for liability claims involving products manufactured primarily by certain joint ventures. These guarantees terminate in years ranging from 2021 to 2026 or upon the occurrence of specific events or are ongoing. We believe that the related potential costs incurred are adequately covered by our recorded accruals, which are insignificant. The maximum future undiscounted payments mainly based on vehicles sold to date were $3.1 billion and $2.6 billion for these guarantees at December 31, 2020 and 2019, the majority of which relates to the indemnification agreements.
We provide payment guarantees on commercial loans outstanding with third parties such as dealers. In some instances certain assets of the party or our payables to the party whose debt or performance we have guaranteed may offset, to some degree, the amount of any potential future payments. We are also exposed to residual value guarantees associated with certain sales to rental car companies.
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. Insignificant 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. Refer to Note 22 for additional information on our indemnification obligations to PSA Group under the Master Agreement (the Agreement).
GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Credit Cards Credit card programs offer rebates that can be applied primarily against the purchase or lease of our vehicles. At December 31, 2020 and 2019, our redemption liability was insignificant, our deferred revenue was $252 million and $253 million, and qualified cardholders had rebates available, net of deferred program revenue, of $1.3 billion and $1.4 billion. Our redemption liability and deferred revenue are recorded in Accrued liabilities and Other liabilities.
Operating Leases Our portfolio of leases primarily consists of real estate office space, manufacturing and warehousing facilities, land and equipment. Certain leases contain escalation clauses and renewal or purchase options, and generally our leases have no residual value guarantees or material covenants. We exclude leases with a term of one year or less from our balance sheet, and do not separate non-lease components from our real estate leases.
Rent expense under operating leases was $317 million and $354 million in the years ended December 31, 2020 and 2019. Prior to adoption of ASU 2016-02, "Leases", rent expense under operating leases was $300 million in the year ended December 31, 2018. Variable lease costs were insignificant in the years ended December 31, 2020 and 2019. At December 31, 2020 and 2019, operating lease right of use assets in Other assets were $1.0 billion and $1.1 billion, operating lease liabilities in Accrued liabilities were $209 million and $239 million and non-current operating lease liabilities in Other liabilities were $969 million and $1.0 billion. Operating lease right of use assets obtained in exchange for lease obligations were $222 million and $497 million in the years ended December 31, 2020 and 2019. Our undiscounted future lease obligations related to operating leases having initial terms in excess of one year are $251 million, $205 million, $196 million, $151 million, $122 million and $437 million for the years 2021, 2022, 2023, 2024, 2025 and thereafter, with imputed interest of $184 million as of December 31, 2020. The weighted average discount rate was 4.0% and 4.2% and the weighted-average remaining lease term was 7.4 years and 7.2 years at December 31, 2020 and 2019. Payments for operating leases included in Net cash provided by (used in) operating activities were $309 million and $337 million in the years ended December 31, 2020 and 2019. Lease agreements that have not yet commenced were $150 million at December 31, 2020.
Note 17. Income Taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
2020
|
|
2019
|
|
2018
|
U.S. income
|
$
|
6,881
|
|
|
$
|
3,826
|
|
|
$
|
4,433
|
|
Non-U.S. income
|
540
|
|
|
2,342
|
|
|
1,953
|
|
Income before income taxes and equity income
|
$
|
7,421
|
|
|
$
|
6,168
|
|
|
$
|
6,386
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
2020
|
|
2019
|
|
2018
|
Current income tax expense (benefit)
|
|
|
|
|
|
U.S. federal
|
$
|
84
|
|
|
$
|
42
|
|
|
$
|
(104)
|
|
U.S. state and local
|
272
|
|
|
102
|
|
|
113
|
|
Non-U.S.
|
493
|
|
|
758
|
|
|
577
|
|
Total current income tax expense
|
849
|
|
|
902
|
|
|
586
|
|
Deferred income tax expense (benefit)
|
|
|
|
|
|
U.S. federal
|
632
|
|
|
(145)
|
|
|
(578)
|
|
U.S. state and local
|
(15)
|
|
|
3
|
|
|
250
|
|
Non-U.S.
|
308
|
|
|
9
|
|
|
216
|
|
Total deferred income tax expense (benefit)
|
925
|
|
|
(133)
|
|
|
(112)
|
|
Total income tax expense
|
$
|
1,774
|
|
|
$
|
769
|
|
|
$
|
474
|
|
Provisions are made for estimated U.S. and non-U.S. income taxes which may be incurred on the reversal of our basis differences in investments in foreign subsidiaries and corporate joint ventures not deemed to be indefinitely reinvested. Taxes have not been provided on basis differences in investments primarily as a result of earnings in foreign subsidiaries which are deemed indefinitely reinvested of $3.2 billion at December 31, 2020 and 2019. Additional basis differences related to investments in nonconsolidated China JVs exist of $4.1 billion at December 31, 2020 and 2019 as a result of fresh-start reporting. Quantification of the deferred tax liability, if any, associated with indefinitely reinvested basis differences is not practicable.
GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
2020
|
|
2019
|
|
2018
|
Income tax expense at U.S. federal statutory income tax rate
|
$
|
1,558
|
|
|
$
|
1,295
|
|
|
$
|
1,341
|
|
State and local tax expense
|
219
|
|
|
117
|
|
|
282
|
|
Non-U.S. income taxed at other than the U.S. federal statutory tax rate
|
(1)
|
|
|
166
|
|
|
90
|
|
U.S. tax impact on Non-U.S. income and activities
|
(160)
|
|
|
(197)
|
|
|
(822)
|
|
Change in valuation allowances
|
370
|
|
|
(233)
|
|
|
1,695
|
|
Change in tax laws
|
—
|
|
|
(122)
|
|
|
(134)
|
|
General business credits and manufacturing incentives
|
(366)
|
|
|
(420)
|
|
|
(695)
|
|
Capital loss expiration
|
—
|
|
|
—
|
|
|
107
|
|
Settlements of prior year tax matters
|
(18)
|
|
|
—
|
|
|
(188)
|
|
Realization of basis differences in affiliates
|
(12)
|
|
|
—
|
|
|
(59)
|
|
German statutory approval of net operating losses
|
—
|
|
|
—
|
|
|
(990)
|
|
Foreign currency remeasurement
|
(7)
|
|
|
74
|
|
|
19
|
|
Other adjustments
|
191
|
|
|
89
|
|
|
(172)
|
|
Total income tax expense
|
$
|
1,774
|
|
|
$
|
769
|
|
|
$
|
474
|
|
Deferred Income Tax Assets and Liabilities Deferred income tax assets and liabilities at December 31, 2020 and 2019 reflect the effect of temporary differences between amounts of assets, liabilities and equity for financial reporting purposes and the bases of such assets, liabilities and equity as measured based on tax laws, as well as tax loss and tax credit carryforwards. The following table summarizes the components of temporary differences and carryforwards that give rise to deferred tax assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
|
December 31, 2019
|
Deferred tax assets
|
|
|
|
Postretirement benefits other than pensions
|
$
|
1,742
|
|
|
$
|
1,695
|
|
Pension and other employee benefit plans
|
2,999
|
|
|
2,968
|
|
Warranties, dealer and customer allowances, claims and discounts
|
5,538
|
|
|
6,299
|
|
|
|
|
|
U.S. capitalized research expenditures
|
6,763
|
|
|
6,035
|
|
U.S. operating loss and tax credit carryforwards(a)
|
7,254
|
|
|
8,686
|
|
Non-U.S. operating loss and tax credit carryforwards(b)
|
7,216
|
|
|
6,731
|
|
Miscellaneous
|
3,479
|
|
|
1,965
|
|
Total deferred tax assets before valuation allowances
|
34,991
|
|
|
34,379
|
|
Less: valuation allowances
|
(9,095)
|
|
|
(8,135)
|
|
Total deferred tax assets
|
25,896
|
|
|
26,244
|
|
Deferred tax liabilities
|
|
|
|
Property, plant and equipment
|
1,670
|
|
|
1,565
|
|
Intangible assets
|
744
|
|
|
763
|
|
Total deferred tax liabilities
|
2,414
|
|
|
2,328
|
|
Net deferred tax assets
|
$
|
23,482
|
|
|
$
|
23,916
|
|
_________
(a) At December 31, 2020, U.S. operating loss and tax credit carryforwards of $7.1 billion expire by 2040 if not utilized and the remaining balance of $137 million may be carried forward indefinitely.
(b) At December 31, 2020, Non-U.S. operating loss and tax credit carryforwards of $1.3 billion expire by 2040 if not utilized and the remaining balance of $5.9 billion may be carried forward indefinitely.
GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Valuation Allowances During the years ended December 31, 2020 and 2019, valuation allowances against deferred tax assets of $9.1 billion and $8.1 billion were comprised of cumulative losses, credits and other timing differences, primarily in Germany, Spain and South Korea.
Uncertain Tax Positions The following table summarizes activity of the total amounts of unrecognized tax benefits:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
2020
|
|
2019
|
|
2018
|
Balance at beginning of period
|
$
|
775
|
|
|
$
|
1,341
|
|
|
$
|
1,557
|
|
Additions to current year tax positions
|
435
|
|
|
18
|
|
|
292
|
|
Additions to prior years' tax positions
|
26
|
|
|
13
|
|
|
264
|
|
Reductions to prior years' tax positions
|
(132)
|
|
|
(501)
|
|
|
(244)
|
|
Reductions in tax positions due to lapse of statutory limitations
|
(3)
|
|
|
(8)
|
|
|
(38)
|
|
Settlements
|
(10)
|
|
|
(93)
|
|
|
(450)
|
|
Other
|
(5)
|
|
|
5
|
|
|
(40)
|
|
Balance at end of period
|
$
|
1,086
|
|
|
$
|
775
|
|
|
$
|
1,341
|
|
At December 31, 2020 and 2019 there were $851 million and $539 million of unrecognized tax benefits that if recognized would favorably affect our effective tax rate in the future. In the years ended December 31, 2020, 2019 and 2018 income tax related interest and penalties were insignificant. At December 31, 2020 and 2019 we had liabilities of $92 million and $117 million for income tax related interest and penalties.
At December 31, 2020 it is not possible to reasonably estimate the expected change to the total amount of unrecognized tax benefits in the next twelve months.
Other Matters Income tax returns are filed in multiple jurisdictions and are subject to examination by taxing authorities throughout the world. We have open tax years from 2011 to 2020 with various significant tax jurisdictions. Tax authorities may have the ability to review and adjust net operating loss or tax credit carryforwards that were generated prior to these periods if utilized in an open tax year. These open years contain matters that could be subject to differing interpretations of applicable tax laws and regulations as they relate to the amount, character, timing or inclusion of revenue and expenses or the sustainability of income tax credits for a given audit cycle.
Note 18. Restructuring and Other Initiatives
We have executed various restructuring and other initiatives and we may execute additional initiatives in the future, if necessary, to streamline manufacturing capacity and reduce other costs to improve the utilization of remaining facilities. To the extent these programs involve voluntary separations, a liability is generally recorded at the time offers to employees are accepted. To the extent these programs provide separation benefits in accordance with pre-existing agreements, a liability is recorded once the amount is probable and reasonably estimable. If employees are involuntarily terminated, a liability is generally recorded at the communication date. Related charges are recorded in Automotive and other cost of sales and Automotive and other selling, general and administrative expense.
The following table summarizes the reserves and charges related to restructuring and other initiatives, including postemployment benefit reserves and charges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
2020
|
|
2019
|
|
2018
|
Balance at beginning of period
|
$
|
564
|
|
|
$
|
1,122
|
|
|
$
|
227
|
|
Additions, interest accretion and other
|
565
|
|
|
629
|
|
|
1,637
|
|
Payments
|
(678)
|
|
|
(1,101)
|
|
|
(600)
|
|
Revisions to estimates and effect of foreign currency
|
(99)
|
|
|
(86)
|
|
|
(142)
|
|
Balance at end of period
|
$
|
352
|
|
|
$
|
564
|
|
|
$
|
1,122
|
|
GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
In the year ended December 31, 2020, restructuring and other initiatives primarily included actions in GMI related to the wind-down of Holden sales, design and engineering operations in Australia and New Zealand, the sale of our vehicle and powertrain manufacturing facilities in Thailand and the execution of a binding term sheet to sell our manufacturing facility in India. We recorded charges of $683 million in the year ended December 31, 2020, primarily consisting of $360 million in dealer restructurings, employee separations and supplier claim charges, which are reflected in the table above, and $323 million in property and intangible asset impairments, inventory provisions, sales allowances and other charges, not reflected in the table above. We also recorded a $236 million charge to Income tax expense due to the establishment of a valuation allowance against deferred tax assets in Australia and New Zealand in the year ended December 31, 2020. We incurred $197 million in net cash outflows resulting from these restructuring actions primarily for dealer restructuring payments and employee separation payments, which includes proceeds of $143 million from the sale of our manufacturing facilities in Thailand, in the year ended December 31, 2020. Holden and Thailand programs were substantially complete at December 31, 2020.
In the year ended December 31, 2019, restructuring and other initiatives primarily included actions related to our announced transformation activities, which include unallocation of products to certain manufacturing facilities and other employee separation programs. We recorded charges of $1.8 billion, primarily in GMNA, in the year ended December 31, 2019 consisting of $1.3 billion primarily in non-cash accelerated depreciation and pension curtailment and other charges, not reflected in the table above, and $535 million primarily in supplier-related charges and employee-related separation charges, which are reflected in the table above. We recorded charges of $1.3 billion, primarily in GMNA, in the year ended December 31, 2018 consisting of $1.0 billion in employee separations and other charges, which are reflected in the table above, and $301 million primarily in non-cash accelerated depreciation, not reflected in the table above. These programs have a total cost since inception of $3.1 billion and were complete at December 31, 2019. We incurred $333 million and $1.1 billion in cash outflows resulting from these restructuring actions, primarily for employee separation payments and supplier-related payments in the years ended December 31, 2020 and 2019. The cash outflows were substantially complete at December 31, 2020.
In the year ended December 31, 2018, restructuring and other initiatives in GMI primarily included the closure of a facility and other restructuring actions in Korea and employee separation programs. We recorded charges of $1.0 billion related to Korea, net of noncontrolling interests. These charges consisted of $537 million in non-cash asset impairments and other charges, not reflected in the table above, and $495 million in employee separation charges, which are reflected in the table above. We incurred $775 million in cash outflows resulting from these Korea restructuring actions, primarily for employee separations and statutory pension payments in the year ended December 31, 2018. These programs were substantially complete at December 31, 2018.
Note 19. Interest Income and Other Non-Operating Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
2020
|
|
2019
|
|
2018
|
Non-service pension and OPEB income
|
$
|
1,095
|
|
|
$
|
797
|
|
|
$
|
1,665
|
|
Interest income
|
241
|
|
|
429
|
|
|
335
|
|
Licensing agreements income
|
211
|
|
|
165
|
|
|
296
|
|
Revaluation of investments
|
265
|
|
|
80
|
|
|
258
|
|
Other
|
73
|
|
|
(2)
|
|
|
42
|
|
Total interest income and other non-operating income, net
|
$
|
1,885
|
|
|
$
|
1,469
|
|
|
$
|
2,596
|
|
Note 20. Stockholders’ Equity and Noncontrolling Interests
Preferred and Common Stock We have 2.0 billion shares of preferred stock and 5.0 billion shares of common stock authorized for issuance. At December 31, 2020 and 2019 we had no shares of preferred stock and 1.4 billion shares of common stock issued and outstanding.
Common Stock Holders of our common stock are entitled to dividends at the sole discretion of our Board of Directors. Our dividends declared per common share were $0.38, $1.52 and $1.52 and our total dividends paid on common stock were $545 million, $2.2 billion and $2.1 billion for the years ended December 31, 2020, 2019 and 2018. Holders of common stock are entitled to one vote per share on all matters submitted to our stockholders for a vote. The liquidation rights of holders of our common stock are secondary to the payment or provision for payment of all our debts and liabilities and to holders of our preferred stock, if any such shares are then outstanding.
GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
We purchased three million shares of our outstanding common stock for $90 million and $100 million in the years ended December 31, 2020 and 2018. We did not purchase shares of our outstanding common stock in the year ended December 31, 2019. Shares repurchased were part of the common stock repurchase program announced in March 2015, which our Board of Directors increased and extended in January 2016 and January 2017.
Warrants At December 31, 2018 we had 15 million warrants outstanding that we issued in July 2009. The warrants have expired but were exercisable at any time prior to July 10, 2019 at an exercise price of $18.33 per share.
GM Financial Preferred Stock In September 2020, GM Financial issued $500 million of Fixed-Rate Reset Cumulative Perpetual Preferred Stock, Series C, $0.01 par value, with a liquidation preference of $1,000 per share. Dividends will be paid semi-annually when declared starting March 30, 2021 at a fixed rate of 5.70%. The preferred stock is classified as noncontrolling interests in our consolidated financial statements.
In 2018, GM Financial issued $500 million of Fixed-to-Floating Rate Cumulative Perpetual Preferred Stock, Series B, $0.01 par value, with a liquidation preference of $1,000 per share. Dividends are paid semi-annually when declared, which started March 30, 2019 at a fixed rate of 6.50%. The preferred stock is classified as noncontrolling interests in our consolidated financial statements.
Cruise Preferred Shares In 2019, Cruise Holdings issued $1.2 billion of Cruise Class F Preferred Shares, including $687 million to General Motors Holdings LLC. All proceeds related to the Cruise Class F Preferred Shares are designated exclusively for working capital and general corporate purposes of Cruise. The Cruise Class F Preferred Shares participate pari passu with holders of Cruise Holdings common stock in any dividends declared. The Cruise Class F Preferred Shares have the right to vote on the election of one director, who is elected by the vote of a majority of the Cruise Holdings common stock and the Cruise Class F Preferred Shares. Prior to an initial public offering, the holders of Cruise Class F Preferred Shares are restricted from transferring the Cruise Class F Preferred Shares until May 7, 2023. The Cruise Class F Preferred Shares convert into common stock of Cruise Holdings, at specified exchange ratios, upon occurrence of an initial public offering. The Cruise Class F Preferred Shares are entitled to receive the greater of their carrying value or a pro-rata share of any proceeds or distributions upon the occurrence of a merger, sale, liquidation, or dissolution of Cruise Holdings. The Cruise Class F Preferred Shares are classified as noncontrolling interests in our consolidated financial statements.
In 2018, Cruise Holdings issued $900 million of Cruise Preferred Shares to an affiliate of The Vision Fund which subsequently assigned such shares to The Vision Fund. Immediately prior to the issuance of the Cruise Preferred Shares, we invested $1.1 billion in Cruise Holdings. When Cruise's autonomous vehicles are ready for commercial deployment, The Vision Fund is obligated to purchase additional Cruise Preferred Shares for $1.35 billion. All proceeds are designated exclusively for working capital and general corporate purposes of Cruise. Dividends are cumulative and accrue at an annual rate of 7.0% and are payable quarterly in cash or in-kind, at Cruise's discretion. The Cruise Preferred Shares are also entitled to participate in Cruise dividends above a defined threshold. Prior to an initial public offering, The Vision Fund is restricted from transferring the Cruise Preferred Shares until June 28, 2025. The Cruise Preferred Shares are classified as noncontrolling interests in our consolidated financial statements.
Cruise Common Shares In 2018, Cruise Holdings issued $750 million of Class E Common Shares to Honda. All proceeds are designated exclusively for working capital and general corporate purposes of Cruise. At the later of October 3, 2025 or the termination of the commercial agreements between Cruise Holdings and Honda, Cruise Holdings can call all, but not less than all of the Class E Common Shares at an amount equal to the then fair value of Cruise Holdings. The Class E Common Shares are classified as noncontrolling interests in our consolidated financial statements.
GM Korea Preferred Shares In 2018, the Korea Development Bank (KDB) purchased $720 million of GM Korea's Class B Preferred Shares (GM Korea Preferred Shares). Dividends on the GM Korea Preferred Shares are cumulative and accrue at an annual rate of 1.0%. GM Korea can call the preferred shares at their original issue price six years from the date of issuance and once called, the preferred shares can be converted into common shares of GM Korea at the option of the holder. The GM Korea Preferred Shares are classified as noncontrolling interests in our consolidated financial statements. The KDB investment proceeds can only be used for purposes of funding capital expenditures in GM Korea. In conjunction with the GM Korea Preferred Share issuance we agreed to provide GM Korea future funding, if needed, not to exceed $2.8 billion through December 31, 2027, inclusive of $2.0 billion of planned capital expenditures through 2027.
GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
The following table summarizes the significant components of Accumulated other comprehensive loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
2020
|
|
2019
|
|
2018
|
Foreign Currency Translation Adjustments
|
|
|
|
|
|
Balance at beginning of period
|
$
|
(2,278)
|
|
|
$
|
(2,250)
|
|
|
$
|
(1,606)
|
|
Other comprehensive loss and noncontrolling interests before reclassification adjustment, net of tax and impact of adoption of accounting standards(a)(b)
|
(480)
|
|
|
(56)
|
|
|
(664)
|
|
Reclassification adjustment, net of tax(a)
|
23
|
|
|
28
|
|
|
20
|
|
Other comprehensive loss, net of tax(a)
|
(457)
|
|
|
(28)
|
|
|
(644)
|
|
Balance at end of period
|
$
|
(2,735)
|
|
|
$
|
(2,278)
|
|
|
$
|
(2,250)
|
|
Defined Benefit Plans
|
|
|
|
|
|
Balance at beginning of period
|
$
|
(8,859)
|
|
|
$
|
(6,737)
|
|
|
$
|
(6,398)
|
|
Other comprehensive loss and noncontrolling interests before reclassification adjustment, net of impact of adoption of accounting standards(b)
|
(2,661)
|
|
|
(2,769)
|
|
|
(580)
|
|
Tax benefit
|
444
|
|
|
463
|
|
|
100
|
|
Other comprehensive loss and noncontrolling interests before reclassification adjustment, net of tax and impact of adoption of accounting standards(b)
|
(2,217)
|
|
|
(2,306)
|
|
|
(480)
|
|
Reclassification adjustment, net of tax(a)
|
422
|
|
|
184
|
|
|
141
|
|
Other comprehensive loss, net of tax
|
(1,795)
|
|
|
(2,122)
|
|
|
(339)
|
|
Balance at end of period(c)
|
$
|
(10,654)
|
|
|
$
|
(8,859)
|
|
|
$
|
(6,737)
|
|
__________
(a) The income tax effect was insignificant in the years ended December 31, 2020, 2019 and 2018.
(b) The noncontrolling interests are insignificant in the years ended December 31, 2020, 2019 and 2018.
(c) Primarily consists of unamortized actuarial loss on our defined benefit plans.
GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Note 21. Earnings Per Share
Basic and diluted earnings (loss) per share are computed by dividing Net income attributable to common stockholders by the weighted-average common shares outstanding in the period. Diluted earnings (loss) per share is computed by giving effect to all potentially dilutive securities that are outstanding.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
2020
|
|
2019
|
|
2018
|
Basic earnings per share
|
|
|
|
|
|
Income from continuing operations
|
$
|
6,427
|
|
|
$
|
6,732
|
|
|
$
|
8,084
|
|
Less: cumulative dividends on subsidiary preferred stock
|
(180)
|
|
|
(151)
|
|
|
(98)
|
|
Income from continuing operations attributable to common stockholders
|
6,247
|
|
|
6,581
|
|
|
7,986
|
|
Loss from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
70
|
|
Net income attributable to common stockholders
|
$
|
6,247
|
|
|
$
|
6,581
|
|
|
$
|
7,916
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding
|
1,433
|
|
|
1,424
|
|
|
1,411
|
|
|
|
|
|
|
|
Basic earnings per common share – continuing operations
|
$
|
4.36
|
|
|
$
|
4.62
|
|
|
$
|
5.66
|
|
Basic loss per common share – discontinued operations
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.05
|
|
Basic earnings per common share
|
$
|
4.36
|
|
|
$
|
4.62
|
|
|
$
|
5.61
|
|
Diluted earnings per share
|
|
|
|
|
|
Income from continuing operations attributable to common stockholders – diluted
|
$
|
6,247
|
|
|
$
|
6,581
|
|
|
$
|
7,986
|
|
Loss from discontinued operations, net of tax – diluted
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
70
|
|
Net income attributable to common stockholders – diluted
|
$
|
6,247
|
|
|
$
|
6,581
|
|
|
$
|
7,916
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding – basic
|
1,433
|
|
|
1,424
|
|
|
1,411
|
|
Dilutive effect of warrants and awards under stock incentive plans
|
9
|
|
|
15
|
|
|
20
|
|
Weighted-average common shares outstanding – diluted
|
1,442
|
|
|
1,439
|
|
|
1,431
|
|
|
|
|
|
|
|
Diluted earnings per common share – continuing operations
|
$
|
4.33
|
|
|
$
|
4.57
|
|
|
$
|
5.58
|
|
Diluted loss per common share – discontinued operations
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.05
|
|
Diluted earnings per common share
|
$
|
4.33
|
|
|
$
|
4.57
|
|
|
$
|
5.53
|
|
|
|
|
|
|
|
Potentially dilutive securities(a)
|
7
|
|
|
7
|
|
|
9
|
|
__________
(a) Potentially dilutive securities attributable to outstanding stock options and RSUs were excluded from the computation of diluted EPS because the securities would have had an antidilutive effect.
Note 22. Discontinued Operations
In 2017, we sold the Opel/Vauxhall Business to PSA Group. We also sold the Fincos to Banque PSA Finance S.A. and BNP Paribas Personal Finance S.A.
Our wholly owned subsidiary (The Seller) agreed to indemnify PSA Group for certain losses resulting from any inaccuracy of the representations and warranties or breaches of our covenants included in the Agreement and for certain other liabilities, including certain emissions and product liabilities. We entered into a guarantee for the benefit of PSA Group and pursuant to which we agreed to guarantee the Seller's obligation to indemnify PSA Group. Certain of these indemnification obligations are subject to time limitations, thresholds and/or caps as to the amount of required payments.
Although the sale reduced our new vehicle presence in Europe, we may still be impacted by actions taken by regulators related to vehicles sold before the sale. In Germany, the Kraftfahrt-Bundesamt (KBA) issued an order in November 2019, which converted a voluntary recall initiated by Opel in 2017 and 2018 into a mandatory recall for allegedly failing to comply with certain emissions regulations. However, because the overwhelming majority of vehicles have already received KBA-approved software calibration updates pursuant to the voluntary recall, the number of vehicles subject to the mandatory recall is insignificant. The Seller may also be obligated to indemnify PSA Group or otherwise absorb costs and expenses resulting from
GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
the foregoing as well as certain related potential litigation costs, settlements, judgments and potential fines. In addition, at the KBA's request, the German authorities re-opened a separate criminal investigation related to this matter that had previously been closed with no action. At December 31, 2020, we have accrued an insignificant amount relating to these matters.
The results of the European Business operations recorded in Loss from discontinued operations, net were $70 million in the year ended December 31, 2018. There was no income or loss from discontinued operations in the years ended December 31, 2020 and 2019.
We continue to purchase from and supply to PSA Group certain vehicles, parts and engineering services for a period of time following the sale. The following table summarizes transactions with the Opel/Vauxhall Business:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
2020
|
|
2019
|
|
2018
|
Net sales and revenue(a)
|
$
|
144
|
|
|
$
|
1,129
|
|
|
$
|
1,939
|
|
Purchases and expenses(a)
|
$
|
392
|
|
|
$
|
825
|
|
|
$
|
1,422
|
|
Cash payments(b)
|
$
|
630
|
|
|
$
|
975
|
|
|
$
|
1,849
|
|
Cash receipts(b)
|
$
|
252
|
|
|
$
|
1,408
|
|
|
$
|
2,310
|
|
__________
(a) Included in Income from continuing operations.
(b) Included in Net cash provided by operating activities.
Note 23. Stock Incentive Plans
GM Stock Incentive Awards We grant to certain employees RSUs, RSAs, PSUs and stock options (collectively, stock incentive awards) under our 2016 Equity Incentive Plan and 2020 Long-Term Incentive Plan (LTIP) and prior to the 2020 LTIP, under our 2017 and 2014 LTIP. The 2020 LTIP was approved by stockholders in June 2020. Any new awards granted after the approval of the 2020 LTIP in June 2020 will be issued under the 2020 LTIP. To the extent any shares remain available for issuance under the 2017 LTIP, the 2016 Equity Incentive Plan, and/or the 2014 LTIP, such shares will only be used to settle outstanding awards that were previously granted under such plans prior to June 2020. Shares awarded under the plans are subject to forfeiture if the participant leaves the company for reasons other than those permitted under the plans such as retirement, death or disability.
RSU awards granted either cliff vest or ratably vest generally over a three-year service period, as defined in the terms of each award. PSU awards vest at the end of a three-year performance period, based on performance criteria determined by the Executive Compensation Committee of the Board of Directors at the time of award. The number of shares earned may equal, exceed or be less than the targeted number of shares depending on whether the performance criteria are met, surpassed or not met. Stock options expire 10 years from the grant date. Our performance-based stock options vest ratably over 55 months based on the performance of our common stock relative to that of a specified peer group. Our service-based stock options vest ratably over 19 months to three years.
In connection with our acquisition of Cruise Automation, Inc. in May 2016, RSAs and PSUs in common shares of GM were granted to employees of Cruise Holdings. The RSAs vest ratably, generally over a three-year service period. The PSUs are contingent upon achievement of specific technology and commercialization milestones.
GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
(in millions)
|
|
Weighted-Average Grant Date Fair Value
|
|
Weighted-Average Remaining Contractual Term in Years
|
Units outstanding at January 1, 2020
|
41.5
|
|
|
$
|
19.17
|
|
|
0.9
|
Granted
|
13.3
|
|
|
$
|
22.50
|
|
|
|
Settled
|
(13.5)
|
|
|
$
|
19.31
|
|
|
|
Forfeited or expired
|
(2.7)
|
|
|
$
|
27.23
|
|
|
|
Units outstanding at December 31, 2020(a)
|
38.6
|
|
|
$
|
19.84
|
|
|
0.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
__________
(a) Includes the target amount of PSUs.
Our weighted-average assumptions used to value our stock options are a dividend yield of 4.25%, 3.90% and 3.69%, expected volatility of 26.2%, 28.0% and 28.0%, a risk-free interest rate of 1.44%, 2.62% and 2.73%, and an expected option life of 5.97, 6.00 and 5.98 years for options issued during the years ended December 31, 2020, 2019 and 2018. The expected volatility is based on the average of the implied volatility of publicly traded options for our common stock.
Total compensation expense related to the above awards was $351 million, $456 million and $316 million in the years ended December 31, 2020, 2019 and 2018.
At December 31, 2020, the total unrecognized compensation expense for nonvested equity awards granted was $213 million. This expense is expected to be recorded over a weighted-average period of 1.3 years. The total fair value of stock incentive awards vested was $275 million, $287 million and $317 million in the years ended December 31, 2020, 2019 and 2018.
Cruise Stock Incentive Awards In addition to the awards noted above, RSUs were granted to Cruise employees in common shares of Cruise Holdings in the years ended December 31, 2020, 2019 and 2018. Stock options were granted in common shares of Cruise Holdings in the years ended December 31, 2019 and 2018. There were no Cruise stock options granted in the year ended December 31, 2020. These awards were granted under the 2018 Employee Incentive Plan approved by Cruise Holdings' Board of Directors in August 2018. Shares awarded under the plan are subject to forfeiture if the participant leaves the company for reasons other than those permitted under the plan. Stock options vest ratably over four to 10 years, as defined in the terms of each award. Stock options expire 10 years from the grant date. RSU awards granted vest upon the satisfaction of both a service condition and a liquidity condition. The service condition for the majority of these awards is satisfied over four years. The liquidity condition is satisfied upon the earlier of the date of a change in control transaction or the consummation of an initial public offering.
Total compensation expense related to Cruise Holdings’ share-based awards was insignificant for the years ended December 31, 2020, 2019 and 2018. No share-based compensation expense had been recognized for the RSUs because the liquidity condition described above was not met at December 31, 2020, 2019 and 2018. Total unrecognized compensation expense for Cruise Holdings’ nonvested equity awards granted was $863 million at December 31, 2020, which was primarily comprised of the RSUs for which the liquidity condition had not been met. Total units outstanding were 79.3 million at December 31, 2020. The expense related to stock options is expected to be recorded over a weighted-average period of 7.1 years. The timing of the expense related to RSUs will depend upon the date of the satisfaction of the liquidity condition.
Note 24. Segment Reporting
We analyze the results of our business through the following reportable segments: GMNA, GMI, Cruise and GM Financial. The European Business is presented as discontinued operations and is excluded from our segment results for all periods presented. The European Business was previously reported as our GM Europe segment and part of GM Financial. The chief operating decision-maker evaluates the operating results and performance of our automotive segments and Cruise through EBIT-adjusted, which is presented net of noncontrolling interests. The chief operating decision-maker evaluates GM Financial through EBT-adjusted because interest income and interest expense are part of operating results when assessing and measuring the operational and financial performance of the segment. Each segment has a manager responsible for executing our strategic initiatives. While not all vehicles within a segment are individually profitable on a fully allocated cost basis, those vehicles attract customers to dealer showrooms and help maintain sales volumes for other, more profitable vehicles and contribute towards meeting required fuel efficiency standards. As a result of these and other factors, we do not manage our business on an individual brand or vehicle basis.
GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Substantially all of the trucks, crossovers, cars and automobile parts produced are marketed through retail dealers in North America and through distributors and dealers outside of North America, the substantial majority of which are independently owned. In addition to the products sold to dealers for consumer retail sales, trucks, crossovers and cars are also sold to fleet customers, including daily rental car companies, commercial fleet customers, leasing companies and governments. Fleet sales are completed through the dealer network and in some cases directly with fleet customers. Retail and fleet customers can obtain a wide range of after-sale vehicle services and products through the dealer network, such as maintenance, light repairs, collision repairs, vehicle accessories and extended service warranties.
GMNA meets the demands of customers in North America with vehicles developed, manufactured and/or marketed under the Buick, Cadillac, Chevrolet and GMC brands. GMI primarily meets the demands of customers outside North America with vehicles developed, manufactured and/or marketed under the Buick, Cadillac, Chevrolet, GMC, and Holden brands. We also have equity ownership stakes in entities that meet the demands of customers in other countries, primarily China, with vehicles developed, manufactured and/or marketed under the Baojun, Buick, Cadillac, Chevrolet and Wuling brands. Cruise is our global segment responsible for the development and commercialization of autonomous vehicle technology, and includes autonomous vehicle-related engineering and other costs.
Our automotive interest income and interest expense, legacy costs from the Opel/Vauxhall Business (primarily pension costs), corporate expenditures and certain nonsegment specific revenues and expenses are recorded centrally in Corporate. Corporate assets primarily consist of cash and cash equivalents, marketable debt securities, PSA warrants and intercompany balances. Retained net underfunded pension liabilities related to the European Business are also recorded in Corporate. All intersegment balances and transactions have been eliminated in consolidation.
The following tables summarize key financial information by segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At and For the Year Ended December 31, 2020
|
|
GMNA
|
|
GMI
|
|
Corporate
|
|
Eliminations
|
|
Total Automotive
|
|
Cruise
|
|
GM Financial
|
|
Eliminations/Reclassifications
|
|
Total
|
Net sales and revenue
|
$
|
96,733
|
|
|
$
|
11,586
|
|
|
$
|
350
|
|
|
|
|
$
|
108,669
|
|
|
$
|
103
|
|
|
$
|
13,831
|
|
|
$
|
(118)
|
|
|
$
|
122,485
|
|
Earnings (loss) before interest and taxes-adjusted
|
$
|
9,071
|
|
|
$
|
(528)
|
|
|
$
|
(634)
|
|
|
|
|
$
|
7,909
|
|
|
$
|
(887)
|
|
|
$
|
2,702
|
|
|
$
|
(14)
|
|
|
$
|
9,710
|
|
Adjustments(a)
|
$
|
(99)
|
|
|
$
|
(683)
|
|
|
$
|
130
|
|
|
|
|
$
|
(652)
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
(652)
|
|
Automotive interest income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
241
|
|
Automotive interest expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,098)
|
|
Net (loss) attributable to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(106)
|
|
Income before income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,095
|
|
Income tax expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,774)
|
|
Income from continuing operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,321
|
|
Loss from discontinued operations, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
Net loss attributable to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
106
|
|
Net income attributable to stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
6,427
|
|
Equity in net assets of nonconsolidated affiliates
|
$
|
242
|
|
|
$
|
6,583
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,825
|
|
|
$
|
—
|
|
|
$
|
1,581
|
|
|
$
|
—
|
|
|
$
|
8,406
|
|
Goodwill and intangibles
|
$
|
2,346
|
|
|
$
|
806
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,152
|
|
|
$
|
735
|
|
|
$
|
1,343
|
|
|
$
|
—
|
|
|
$
|
5,230
|
|
Total assets
|
$
|
114,137
|
|
|
$
|
23,019
|
|
|
$
|
39,933
|
|
|
$
|
(57,464)
|
|
|
$
|
119,625
|
|
|
$
|
3,625
|
|
|
$
|
113,410
|
|
|
$
|
(1,466)
|
|
|
$
|
235,194
|
|
Expenditures for property
|
$
|
4,501
|
|
|
$
|
729
|
|
|
$
|
21
|
|
|
$
|
—
|
|
|
$
|
5,251
|
|
|
$
|
15
|
|
|
$
|
34
|
|
|
$
|
—
|
|
|
$
|
5,300
|
|
Depreciation and amortization
|
$
|
4,739
|
|
|
$
|
624
|
|
|
$
|
25
|
|
|
$
|
—
|
|
|
$
|
5,388
|
|
|
$
|
43
|
|
|
$
|
7,245
|
|
|
$
|
—
|
|
|
$
|
12,676
|
|
Impairment charges
|
$
|
20
|
|
|
$
|
99
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
119
|
|
|
$
|
20
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
139
|
|
Equity income
|
$
|
17
|
|
|
$
|
510
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
527
|
|
|
$
|
—
|
|
|
$
|
147
|
|
|
$
|
—
|
|
|
$
|
674
|
|
__________
(a) Consists of restructuring charges related to Cadillac dealer strategy in GMNA; restructuring and other charges primarily in Australia, New Zealand, Thailand and India in GMI; and ignition switch-related legal matters in Corporate.
GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At and For the Year Ended December 31, 2019
|
|
GMNA
|
|
GMI
|
|
Corporate
|
|
Eliminations
|
|
Total Automotive
|
|
Cruise
|
|
GM Financial
|
|
Eliminations/Reclassifications
|
|
Total
|
Net sales and revenue
|
$
|
106,366
|
|
|
$
|
16,111
|
|
|
$
|
220
|
|
|
|
|
$
|
122,697
|
|
|
$
|
100
|
|
|
$
|
14,554
|
|
|
$
|
(114)
|
|
|
$
|
137,237
|
|
Earnings (loss) before interest and taxes-adjusted
|
$
|
8,204
|
|
|
$
|
(202)
|
|
|
$
|
(691)
|
|
|
|
|
$
|
7,311
|
|
|
$
|
(1,004)
|
|
|
$
|
2,104
|
|
|
$
|
(18)
|
|
|
$
|
8,393
|
|
Adjustments(a)
|
$
|
(1,618)
|
|
|
$
|
1,081
|
|
|
$
|
(2)
|
|
|
|
|
$
|
(539)
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
(539)
|
|
Automotive interest income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
429
|
|
Automotive interest expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(782)
|
|
Net (loss) attributable to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(65)
|
|
Income before income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,436
|
|
Income tax expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(769)
|
|
Income from continuing operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,667
|
|
Loss from discontinued operations, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
Net loss attributable to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
65
|
|
Net income attributable to stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
6,732
|
|
Equity in net assets of nonconsolidated affiliates
|
$
|
84
|
|
|
$
|
7,023
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,107
|
|
|
$
|
—
|
|
|
$
|
1,455
|
|
|
$
|
—
|
|
|
$
|
8,562
|
|
Goodwill and intangibles
|
$
|
2,459
|
|
|
$
|
888
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
3,348
|
|
|
$
|
634
|
|
|
$
|
1,355
|
|
|
$
|
—
|
|
|
$
|
5,337
|
|
Total assets
|
$
|
109,290
|
|
|
$
|
24,969
|
|
|
$
|
32,365
|
|
|
$
|
(50,244)
|
|
|
$
|
116,380
|
|
|
$
|
4,230
|
|
|
$
|
108,881
|
|
|
$
|
(1,454)
|
|
|
$
|
228,037
|
|
Expenditures for property
|
$
|
6,305
|
|
|
$
|
1,096
|
|
|
$
|
84
|
|
|
$
|
—
|
|
|
$
|
7,485
|
|
|
$
|
60
|
|
|
$
|
47
|
|
|
$
|
—
|
|
|
$
|
7,592
|
|
Depreciation and amortization
|
$
|
6,112
|
|
|
$
|
533
|
|
|
$
|
46
|
|
|
$
|
(2)
|
|
|
$
|
6,689
|
|
|
$
|
21
|
|
|
$
|
7,350
|
|
|
$
|
—
|
|
|
$
|
14,060
|
|
Impairment charges
|
$
|
15
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
22
|
|
|
$
|
36
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
58
|
|
Equity income (loss)
|
$
|
8
|
|
|
$
|
1,123
|
|
|
$
|
(29)
|
|
|
$
|
—
|
|
|
$
|
1,102
|
|
|
$
|
—
|
|
|
$
|
166
|
|
|
$
|
—
|
|
|
$
|
1,268
|
|
__________
(a) Consists of restructuring and other charges related to transformation activities of $1.6 billion in GMNA and $115 million in GMI; a benefit of $1.4 billion related to the retrospective recoveries of indirect taxes in Brazil; partially offset by losses of $164 million related to the FAW-GM divestiture in GMI.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At and For the Year Ended December 31, 2018
|
|
GMNA
|
|
GMI
|
|
Corporate
|
|
Eliminations
|
|
Total Automotive
|
|
Cruise
|
|
GM Financial
|
|
Eliminations
|
|
Total
|
Net sales and revenue
|
$
|
113,792
|
|
|
$
|
19,148
|
|
|
$
|
203
|
|
|
|
|
$
|
133,143
|
|
|
$
|
—
|
|
|
$
|
14,016
|
|
|
$
|
(110)
|
|
|
$
|
147,049
|
|
Earnings (loss) before interest and taxes-adjusted
|
$
|
10,769
|
|
|
$
|
423
|
|
|
$
|
(570)
|
|
|
|
|
$
|
10,622
|
|
|
$
|
(728)
|
|
|
$
|
1,893
|
|
|
$
|
(4)
|
|
|
$
|
11,783
|
|
Adjustments(a)
|
$
|
(1,236)
|
|
|
$
|
(1,212)
|
|
|
$
|
(457)
|
|
|
|
|
$
|
(2,905)
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
(2,905)
|
|
Automotive interest income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
335
|
|
Automotive interest expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(655)
|
|
Net (loss) attributable to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(9)
|
|
Income before income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,549
|
|
Income tax expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(474)
|
|
Income from continuing operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,075
|
|
Loss from discontinued operations, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(70)
|
|
Net loss attributable to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9
|
|
Net loss attributable to stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
8,014
|
|
Equity in net assets of nonconsolidated affiliates
|
$
|
75
|
|
|
$
|
7,761
|
|
|
$
|
24
|
|
|
$
|
—
|
|
|
$
|
7,860
|
|
|
$
|
—
|
|
|
$
|
1,355
|
|
|
$
|
—
|
|
|
$
|
9,215
|
|
Goodwill and intangibles
|
$
|
2,623
|
|
|
$
|
928
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
3,552
|
|
|
$
|
671
|
|
|
$
|
1,356
|
|
|
$
|
—
|
|
|
$
|
5,579
|
|
Total assets
|
$
|
109,763
|
|
|
$
|
24,911
|
|
|
$
|
31,694
|
|
|
$
|
(50,690)
|
|
|
$
|
115,678
|
|
|
$
|
3,195
|
|
|
$
|
109,953
|
|
|
$
|
(1,487)
|
|
|
$
|
227,339
|
|
Expenditures for property
|
$
|
7,784
|
|
|
$
|
883
|
|
|
$
|
21
|
|
|
$
|
(2)
|
|
|
$
|
8,686
|
|
|
$
|
15
|
|
|
$
|
60
|
|
|
$
|
—
|
|
|
$
|
8,761
|
|
Depreciation and amortization
|
$
|
4,995
|
|
|
$
|
562
|
|
|
$
|
50
|
|
|
$
|
(3)
|
|
|
$
|
5,604
|
|
|
$
|
7
|
|
|
$
|
7,531
|
|
|
$
|
—
|
|
|
$
|
13,142
|
|
Impairment charges
|
$
|
55
|
|
|
$
|
466
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
527
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
527
|
|
Equity income
|
$
|
8
|
|
|
$
|
1,972
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,980
|
|
|
$
|
—
|
|
|
$
|
183
|
|
|
$
|
—
|
|
|
$
|
2,163
|
|
__________
(a) Consists of restructuring and other charges related to transformation activities of $1.2 billion in GMNA; charges of $1.2 billion related to restructuring actions in Korea and other countries in GMI; and of $440 million for ignition switch-related legal matters and other insignificant charges in Corporate.
GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Automotive revenue is attributed to geographic areas based on the country of sale. GM Financial revenue is attributed to the geographic area where the financing is originated. The following table summarizes information concerning principal geographic areas:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At and For the Years Ended December 31,
|
|
2020
|
|
2019
|
|
2018
|
|
Net Sales and Revenue
|
|
Long-Lived Assets
|
|
Net Sales and Revenue
|
|
Long-Lived Assets
|
|
Net Sales and Revenue
|
|
Long-Lived Assets
|
Automotive
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
|
$
|
89,204
|
|
|
$
|
24,932
|
|
|
$
|
97,887
|
|
|
$
|
25,401
|
|
|
$
|
104,413
|
|
|
$
|
25,625
|
|
Non-U.S.
|
19,469
|
|
|
12,516
|
|
|
24,810
|
|
|
13,190
|
|
|
28,632
|
|
|
13,263
|
|
GM Financial
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
|
12,227
|
|
|
36,773
|
|
|
12,727
|
|
|
39,509
|
|
|
12,169
|
|
|
41,334
|
|
Non-U.S.
|
1,585
|
|
|
3,230
|
|
|
1,813
|
|
|
2,772
|
|
|
1,835
|
|
|
2,476
|
|
Total consolidated
|
$
|
122,485
|
|
|
$
|
77,451
|
|
|
$
|
137,237
|
|
|
$
|
80,872
|
|
|
$
|
147,049
|
|
|
$
|
82,698
|
|
No individual country other than the U.S. represented more than 10% of our total net sales and revenue or long-lived assets.
Note 25. Supplemental Information for the Consolidated Statements of Cash Flows
The following table summarizes the sources (uses) of cash provided by Change in other operating assets and liabilities and Cash paid for income taxes and interest:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in other operating assets and liabilities
|
Years Ended December 31,
|
2020
|
|
2019
|
|
2018
|
Accounts receivable
|
$
|
(1,341)
|
|
|
$
|
(563)
|
|
|
$
|
492
|
|
Wholesale receivables funded by GM Financial, net
|
2,744
|
|
|
663
|
|
|
(2,606)
|
|
Inventories
|
(104)
|
|
|
(761)
|
|
|
399
|
|
Automotive equipment on operating leases
|
53
|
|
|
274
|
|
|
748
|
|
Change in other assets
|
68
|
|
|
(1,550)
|
|
|
(529)
|
|
Accounts payable
|
42
|
|
|
(492)
|
|
|
(537)
|
|
Income taxes payable
|
130
|
|
|
213
|
|
|
(75)
|
|
Accrued and other liabilities
|
(1,991)
|
|
|
(1,573)
|
|
|
732
|
|
Total
|
$
|
(399)
|
|
|
$
|
(3,789)
|
|
|
$
|
(1,376)
|
|
|
|
|
|
|
|
Cash paid for income taxes and interest
|
|
|
|
|
|
Cash paid for income taxes, net
|
$
|
719
|
|
|
$
|
689
|
|
|
$
|
660
|
|
Cash paid for interest (net of amounts capitalized) – Automotive
|
$
|
1,011
|
|
|
$
|
739
|
|
|
$
|
656
|
|
Cash paid for interest (net of amounts capitalized) – GM Financial
|
2,947
|
|
|
3,475
|
|
|
2,941
|
|
Total cash paid for interest (net of amounts capitalized)
|
$
|
3,958
|
|
|
$
|
4,214
|
|
|
$
|
3,597
|
|
Note 26. Subsequent Event
In January 2021, Cruise Holdings issued Class G Preferred Shares in exchange for $2.2 billion from Microsoft and other investors, including $1.0 billion from General Motors Holdings LLC. As a result, Cruise Holdings has fallen below the ownership threshold required for inclusion in our U.S. consolidated income tax returns. In the three months ended March 31, 2021, we will establish a valuation allowance of approximately $350 million against deferred tax assets that may not be realizable. In addition, we, Cruise Holdings and Microsoft entered into a long-term strategic relationship to accelerate the commercialization of self-driving vehicles with Microsoft being the preferred cloud provider.
* * * * * * *
GENERAL MOTORS COMPANY AND SUBSIDIARIES