10 unchanged sentences
There are certain shortcomings inherent in the sensitivity analyses presented, primarily due to the assumption that interest rates change in a parallel fashion and that spot exchange rates change instantaneously.
−Removed: In addition, the analyses are unable to reflect the complex market reactions that normally would arise from the market shifts
−Removed: GENERAL MOTORS COMPANY AND SUBSIDIARIES
−Removed: modeled and do not contemplate the effects of correlations between foreign currency exposures and offsetting long-short positions in currency or other exposures, such as interest rates, which may significantly reduce the potential loss in value.
+Added: In addition, the analyses are unable to reflect the complex market reactions that normally would arise from the market shifts modeled and do not contemplate the effects of correlations between foreign currency exposures and offsetting long-short positions in currency or other exposures, such as interest rates, which may significantly reduce the potential loss in value.
Foreign Currency Exchange Rate Risk We have foreign currency exposures related to buying, selling and financing in currencies other than the functional currencies of our operations.
At December 31, 2020, our most significant foreign currency exposures were between the U.S.
−Removed: Dollar and the Canadian Dollar, Korean Won, Euro, Brazilian Real, Australian Dollar, Mexican Peso and Chinese Yuan.
−Removed: Derivative instruments such as foreign currency forwards, swaps and options are primarily used to hedge exposures with respect to forecasted revenues, costs and commitments denominated in foreign currencies.
+Added: Dollar and the Canadian Dollar, Korean Won, Euro, Chinese Yuan, Brazilian Real and Mexican Peso.
+Added: Derivative instruments such as foreign currency forwards, swaps and options are primarily used to hedge
+Added: GENERAL MOTORS COMPANY AND SUBSIDIARIES
+Added: exposures with respect to forecasted revenues, costs and commitments denominated in foreign currencies.
Such contracts had remaining maturities of up to 12 months at December 31, 2020.
13 unchanged sentences
We did not have any interest rate swap positions to manage interest rate exposures in our automotive operations at December 31, 2020 and 2019.
−Removed: The fair value liability of debt and finance leases was $15.9 billion and $13.5 billion at December 31, 2019 and 2018 .
+Added: The fair value of debt and finance leases was $21.6 billion and $15.9 billion at December 31, 2020 and 2019.
The potential increase in fair value resulting from a 10% decrease in quoted interest rates would have been $0.7 billion and $0.6 billion at December 31, 2020 and 2019.
1 unchanged sentence
The potential decrease in fair value from a 50 basis point increase in interest rates would have had an insignificant effect at December 31, 2020 and 2019.
−Removed: Equity Price Risk We are subject to equity price risk due to market price volatility related to our investment in Lyft and PSA warrants.
−Removed: The fair value of investments with exposure to equity price risk was $1.5 billion at December 31, 2019 .
−Removed: In March 2019 Lyft filed for an initial public offering, which significantly increased the volatility in the fair value of our investment in Lyft.
−Removed: Our investment in Lyft is valued based on the quoted market price, and our investment in PSA warrants is valued based on a Black-Scholes formula.
−Removed: We estimate that a 10% adverse change in quoted security prices in Lyft and PSA Group would impact our investments by $0.1 billion.
+Added: Equity Price Risk We are subject to equity price risk due to market price volatility primarily related to our investment in PSA warrants.
+Added: The fair value of investments with exposure to equity price risk was $1.2 billion and $1.5 billion at December 31, 2020 and 2019.
+Added: Our investment in PSA warrants is valued based on a Black-Scholes formula.
+Added: We estimate that a 10% adverse change in quoted security prices in PSA Group would impact our investment by $0.1 billion at December 31, 2020 and 2019.
Automotive Financing - GM Financial
6 unchanged sentences
To help mitigate interest rate risk or mismatched funding, GM Financial may employ hedging.
−Removed: GENERAL MOTORS COMPANY AND SUBSIDIARIES
Quantitative Disclosure GM Financial measures the sensitivity of its net interest income to changes in interest rates by using interest rate scenarios that assume a hypothetical, instantaneous parallel shift of one hundred basis points in all interest rates across all maturities, as well as a base case that assumes that rates perform at the current market forward curve.
However, interest rate changes are rarely instantaneous or parallel and rates could move more or less than the one percentage point assumed in our analysis.
−Removed: Therefore, the actual impact to net interest income could be higher or lower than the results detailed in the table below.
+Added: Therefore, the actual impact to net interest income could be higher or lower than the results detailed in
+Added: GENERAL MOTORS COMPANY AND SUBSIDIARIES
+Added: the table below.
These interest rate scenarios are purely hypothetical and do not represent our view of future interest rate movements.
+Added: At December 31, 2020, GM Financial was asset-sensitive, meaning that more assets than liabilities were expected to re-price within the next twelve months.
+Added: During a period of rising interest rates, the interest earned on assets would increase more than the interest paid on liabilities, which would initially increase net interest income.
+Added: During a period of falling interest rates, net interest income would be expected to initially decrease.
At December 31, 2019, GM Financial was liability-sensitive, meaning that more liabilities than assets were expected to re-price within the next twelve months.
1 unchanged sentence
During a period of falling interest rates, net interest income would be expected to initially increase.
−Removed: At December 31, 2018, GM Financial was asset-sensitive, meaning that more assets than liabilities were expected to re-price within the next twelve months.
−Removed: During a period of rising interest rates, the interest earned on assets would increase more than the interest paid on debt, which would initially increase net interest income.
−Removed: During a period of falling interest rates, net interest income would be expected to initially decrease.
−Removed: GM Financial's net interest income sensitivity continued to decrease in 2019 from 2018 primarily due to GM Financial's strategy of hedging fixed-rate asset originations with pay-fixed interest rate swaps.
+Added: GM Financial's net interest income sensitivity increased in 2020 as compared to 2019 primarily due to an increased proportion of rate sensitive asset exposure relative to rate sensitive liability exposure.
+Added: GM Financial's hedging strategies approved by its global asset liability committee are used to manage interest rate risk within policy guidelines.
The following table presents GM Financial's net interest income sensitivity to interest rate movement:
2 unchanged sentences
One hundred basis points instantaneous decrease in interest rates(a) $ (29.7) $ 4.6
−Removed: Net interest income sensitivity given a one hundred basis point decrease in interest rates requires an assumption of negative interest rates in markets where existing interest rates are below one percent.
+Added: (a) Net interest income sensitivity given a one hundred basis point decrease in interest rates requires an assumption of negative interest rates in markets where existing interest rates are below one percent.
Additional Model Assumptions The sensitivity analysis presented is GM Financial's best estimate of the effect of the hypothetical interest rate scenarios;
7 unchanged sentences
GM Financial primarily finances its receivables and leased assets with debt in the same currency.
−Removed: When a different currency is used GM Financial may use foreign currency swaps to convert substantially all of its foreign currency debt obligations to the local currency of the receivables and lease assets to minimize any impact to earnings.
+Added: When a different currency is used GM Financial may use foreign currency swaps to convert substantially all of its foreign currency debt obligations to the local currency of the receivables and leased assets to minimize any impact to earnings.
+Added: As a result, GM Financial believes its market risk exposure relating to changes in currency exchange rates at December 31, 2020 was insignificant.
GM Financial had foreign currency swaps with notional amounts of $7.6 billion and $6.2 billion at December 31, 2020 and 2019.
−Removed: The fair value of these derivative financial instruments was insignificant at December 31, 2019 and 2018 .
+Added: The net fair value of these derivative financial instruments was an asset of $0.4 billion and an insignificant amount at December 31, 2020 and 2019.
The following table summarizes GM Financial's foreign currency translation and transaction and remeasurement (gains) losses:
1 unchanged sentence
Translation (gains) losses recorded in Accumulated other comprehensive loss $ 82 $ (5)
−Removed: Transaction and remeasurement (gains) losses, net recorded in earnings
+Added: Transaction and remeasurement gains, net recorded in earnings $ (6) $ (8)
* * * * * * *
2 unchanged sentences
Opinion on the Financial Statements
−Removed: We have audited the accompanying consolidated balance sheets of General Motors Company and subsidiaries (the Company) as of December 31, 2019 and 2018, the related consolidated statements of income, comprehensive income, cash flows, and equity for the two years in the period ended December 31, 2019, and the related notes (collectively referred to as the “financial statements”).
−Removed: In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2019, in conformity with U.S.
+Added: We have audited the accompanying consolidated balance sheets of General Motors Company and subsidiaries (the Company) as of December 31, 2020 and 2019, the related consolidated statements of income, comprehensive income, cash flows, and equity for each of the three years in the period ended December 31, 2020, and the related notes (collectively referred to as the “financial statements”).
+Added: In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020, in conformity with U.S.
generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 10, 2021 expressed an unqualified opinion thereon.
−Removed: Adoption of Accounting Standards Update (ASU) No.
−Removed: As discussed in Note 2 to the financial statements, the Company changed its method of accounting for revenue from contracts with customers in 2018 due to the adoption of ASU No.
−Removed: 2014-09, "Revenue from Contracts with Customers," as amended.
Basis for Opinion
14 unchanged sentences
Product warranty and recall campaigns
−Removed: Description of the matter
−Removed: As discussed in Note 12 to the financial statements, the liabilities for product warranty and recall campaigns amount to $7.8 billion at December 31, 2019.
+Added: Description of the matter As discussed in Note 12 to the financial statements, the liabilities for product warranty and recall campaigns amount to $8.2 billion at December 31, 2020.
The Company accrues for costs related to product warranty at the time of vehicle sale and accrues the estimated cost of recall campaigns when they are probable and estimable, which is generally at the time of sale.
−Removed: Auditing these liabilities is complex and involves a high degree of subjectivity in evaluating management’s estimates, due to the size, uncertainties, and potential volatility related to the estimated liabilities.
+Added: Auditing these liabilities involved a high degree of subjectivity in evaluating management’s estimates, due to the size, uncertainties, and potential volatility related to the estimated liabilities.
Management’s estimates consider historical claims experience, including the nature, frequency, and average cost of claims of each vehicle line or each model year of the vehicle line, and the key assumptions of historical data being predictive of future activity and events, in particular, the number of historical periods used and the weighing of historical data in the reserve studies.
−Removed: How we addressed the matter in our audit
−Removed: We evaluated the design and tested the operating effectiveness of internal controls over the Company’s product warranty and recall campaign processes.
+Added: How we addressed the matter in our audit We evaluated the design and tested the operating effectiveness of internal controls over the Company’s product warranty and recall campaign processes.
We tested internal controls over management’s review of the valuation models and significant assumptions for product warranty and recall including the warranty claims forecasted based on the frequency and average cost per warranty claim for product warranty, and the cost estimates related to recall campaigns.
5 unchanged sentences
Sales incentives
−Removed: Description of the matter
−Removed: Automotive sales and revenue represents the amount of consideration to which the Company expects to be entitled in exchange for transferring goods or providing services, which is net of dealer and customer sales incentives the Company expects to pay.
+Added: Description of the matter Automotive sales and revenue represents the amount of consideration to which the Company expects to be entitled in exchange for transferring goods or providing services, which is net of dealer and customer sales incentives the Company expects to pay.
As discussed in Note 2 to the financial statements, provisions for dealer and customer incentives are recorded as a reduction to Automotive net sales and revenue at the time of vehicle sale.
1 unchanged sentence
Auditing the estimate of sales incentives involved a high degree of judgment.
−Removed: Significant factors used by the Company in estimating its liability for retail incentives include forecasted sales volumes, 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.
+Added: Significant factors used by the Company in estimating its liability for retail incentives include type of program, forecasted sales volumes, 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.
The Company’s estimation model reflects the best estimate of the total incentive amount that the Company reasonably expects to pay at the time of sale.
The estimated cost of incentives is forward-looking, and could be materially affected by future economic and market conditions.
−Removed: How we addressed the matter in our audit
−Removed: We evaluated the design and tested the operating effectiveness of internal controls over the Company’s sales incentive process, including management’s review of the estimation model, the significant assumptions (e.g., incentive cost per unit, customer take rate, and market conditions), and the data inputs used in the model.
+Added: How we addressed the matter in our audit We evaluated the design and tested the operating effectiveness of internal controls over the Company’s sales incentive process, including management’s review of the estimation model, the significant assumptions (e.g., incentive cost per unit, customer take rate, and market conditions), and the data inputs used in the model.
Our audit procedures included, among others, the performance of analytical procedures to develop an independent range of the liability for retail incentives as of the balance sheet date.
−Removed: Our independent range was developed for comparison to the Company’s recorded accrual, and is based on historical claims, forecasted spend, and the specific vehicle mix of current dealer stock.
+Added: Our independent range was developed for comparison to the Company’s recorded liability, and is based on historical claims, forecasted spend, and the specific vehicle mix of current dealer stock.
In addition, we performed sensitivity analyses over the cost per unit assumption developed by management to evaluate the impact on the liability resulting from a change in the assumption.
1 unchanged sentence
Valuation of GM Financial Equipment on Operating Leases
−Removed: Description of the matter
−Removed: GM Financial has recorded investments in vehicles leased to retail customers under operating leases.
+Added: Description of the matter GM Financial has recorded investments in vehicles leased to retail customers under operating leases.
As discussed in Note 2 to the financial statements, at the beginning of the lease, management establishes an expected residual value for each vehicle at the end of the lease term.
3 unchanged sentences
Realization of the residual values is dependent on the future ability to market the vehicles under future prevailing market conditions.
−Removed: How we addressed the matter in our audit
−Removed: We obtained an understanding, evaluated the design and tested the operating effectiveness of the Company’s controls over the lease residual estimation process, including controls over management’s review of residual value estimates obtained from the Company’s third-party provider and other significant assumptions.
−Removed: Our procedures also included, among others, independently recalculating depreciation related to equipment on operating lease and performing sensitivity analyses related to significant assumptions.
+Added: How we addressed the matter in our audit We evaluated the design and tested the operating effectiveness of the Company’s controls over the lease residual estimation process, including controls over management’s review of residual value estimates obtained from the Company’s third-party provider and other significant assumptions.
+Added: Our procedures also included, among others, independently recalculating depreciation related to equipment on operating leases and performing sensitivity analyses related to significant assumptions.
We also performed hindsight analyses to assess the propriety of management’s estimate of residual values, as well as tested the completeness and accuracy of data from underlying systems and data warehouses that are used in the estimation models.
8 unchanged sentences
In our opinion, General Motors Company and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on the COSO criteria.
−Removed: We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2019 and 2018, the related consolidated statements of income, comprehensive income, cash flows and equity for the two years in the period ended December 31, 2019, and the related notes and our report dated February 5, 2020 expressed an unqualified opinion thereon.
+Added: We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2020 and 2019, the related consolidated statements of income, comprehensive income, cash flows and equity for each of the three years in the period ended December 31, 2020, and the related notes and our report dated February 10, 2021 expressed an unqualified opinion thereon.
Basis for Opinion
17 unchanged sentences
February 10, 2021
−Removed: REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
−Removed: To the shareholders and the Board of Directors of General Motors Company:
−Removed: Opinion on the Financial Statements
−Removed: We have audited the accompanying Consolidated Statements of Income, Comprehensive Income, Cash Flows, and Equity of General Motors Company and subsidiaries (the "Company") for the year ended December 31, 2017, and the related notes (collectively referred to as the "financial statements").
−Removed: In our opinion, the 2017 financial statements present fairly, in all material respects, the results of the Company's operations and its cash flows for the year ended December 31, 2017, in conformity with accounting principles generally accepted in the United States of America.
−Removed: Basis for Opinion
−Removed: These financial statements are the responsibility of the Company's management.
−Removed: Our responsibility is to express an opinion on the Company's financial statements based on our audit.
−Removed: We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.
−Removed: federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
−Removed: We conducted our audit in accordance with the standards of the PCAOB.
−Removed: Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
−Removed: Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
−Removed: Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
−Removed: Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.
−Removed: We believe that our audit provide a reasonable basis for our opinion.
−Removed: / s / Deloitte & Touche LLP
−Removed: Detroit, Michigan
−Removed: February 6, 2018 (July 25, 2018 as to Note 25, Segment Reporting )
−Removed: We began serving as the Company's auditor in 1918.
−Removed: In 2018 we became the predecessor auditor.
GENERAL MOTORS COMPANY AND SUBSIDIARIES
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.