What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2022-02-02 compared with 2021-02-10 · 338 added, 439 removed, 1347 unchanged (37% of the section changed)

19 unchanged sentences

Income tax expense (Note 17) 2,771 1,774 769

Income from continuing operations 6,321 6,667 8,075

Loss from discontinued operations, net of tax (Note 22) — — 70

Net income 9,945 6,321 6,667

3 unchanged sentences

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 $ 6.78 $ 4.36 $ 4.62

Weighted-average common shares outstanding – basic 1,451 1,433 1,424

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 $ 6.70 $ 4.33 $ 4.57

5 unchanged sentences

Net income $ 9,945 $ 6,321 $ 6,667

Other comprehensive income, net of tax (Note 20)

Other comprehensive income (loss), net of tax (Note 20)

Foreign currency translation adjustments and other 80 ( 523 ) ( 6 )

Defined benefit plans 4,126 ( 1,795 ) ( 2,122 )

Other comprehensive loss, net of tax ( 2,318 ) ( 2,128 ) ( 936 )

Other comprehensive income (loss), net of tax 4,206 ( 2,318 ) ( 2,128 )

Comprehensive income 14,151 4,003 4,539

10 unchanged sentences

Accounts and notes receivable, net of allowance of $ 192 and $ 224

GM Financial receivables, net (Note 5;

GM Financial receivables, net of allowance of $ 703 and $ 1,002 (Note 5;

Note 11 at VIEs)

26,649 26,209

Inventories (Note 6) 12,988 10,235

3 unchanged sentences

Non-current Assets

GM Financial receivables, net (Note 5;

GM Financial receivables, net of allowance of $ 1,183 and $ 976 (Note 5;

Note 11 at VIEs)

36,167 31,783

Equity in net assets of nonconsolidated affiliates (Note 8) 9,677 8,406

42 unchanged sentences

Cash flows from operating activities

Income from continuing operations $ 6,321 $ 6,667 $ 8,075

Net income $ 9,945 $ 6,321 $ 6,667

Depreciation and impairment of Equipment on operating leases, net 6,076 7,178 7,332

17 unchanged sentences

Other investing activities ( 635 ) ( 65 ) 138

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 ( 16,355 ) ( 21,826 ) ( 10,899 )

( 21,826 ) ( 10,899 ) ( 20,763 )

Cash flows from financing activities

11 unchanged sentences

Significant Non-cash Investing and Financing Activity

Non-cash property additions – continuing operations $ 2,300 $ 2,837 $ 3,813

Non-cash property additions $ 4,305 $ 2,300 $ 2,837

Reference should be made to the notes to consolidated financial statements.

5 unchanged sentences

Balance at January 1, 2019 $ 14 $ 25,563 $ 22,322 $ ( 9,039 ) $ 3,917 $ 42,777

Adoption of accounting standards — — ( 1,046 ) ( 98 ) — ( 1,144 )

Net income — — 6,732 — ( 65 ) 6,667

Other comprehensive loss — — — ( 2,117 ) ( 11 ) ( 2,128 )

Purchase of common stock — ( 91 ) ( 99 ) — — ( 190 )

Issuance of subsidiary preferred and common stock (Note 20) — — — — 2,862 2,862

Issuance of subsidiary preferred stock (Note 20) — — — — 457 457

Stock based compensation — 409 ( 34 ) — — 375

3 unchanged sentences

Balance at December 31, 2019 14 26,074 26,860 ( 11,156 ) 4,165 45,957

Adoption of accounting standards — — ( 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

4 unchanged sentences

Balance at December 31, 2020 14 26,542 31,962 ( 13,488 ) 4,647 49,677

Adoption of accounting standards (Note 2) — — ( 660 ) — — ( 660 )

Net income — — 10,019 — ( 74 ) 9,945

Other comprehensive loss — — — ( 2,332 ) 14 ( 2,318 )

Purchase of common stock — ( 57 ) ( 33 ) — — ( 90 )

Other comprehensive income — — — 4,219 ( 13 ) 4,206

Issuance of subsidiary preferred stock (Note 20) — — — — 1,736 1,736

Stock based compensation — 526 ( 3 ) — — 523

Cash dividends paid on common stock — — ( 545 ) — — ( 545 )

Dividends to noncontrolling interests — — — — ( 186 ) ( 186 )

1 unchanged sentence

Balance at December 31, 2021 $ 15 $ 27,061 $ 41,937 $ ( 9,269 ) $ 6,071 $ 65,815

$ 14 $ 26,542 $ 31,962 $ ( 13,488 ) $ 4,647 $ 49,677

Reference should be made to the notes to consolidated financial statements.

3 unchanged sentences

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 design, build and sell trucks, crossovers, cars and automobile parts, provide software-enabled services worldwide and are investing in and growing an AV business.

We also provide automotive financing services through GM Financial.

We analyze the results of our continuing operations through the following segments:

We analyze the results of our 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.

Cruise is our global segment responsible for the development and commercialization of AV technology.

Nonsegment operations are classified as Corporate.

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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.

GM Financial The amounts presented for GM Financial have been adjusted to reflect the impact on GM Financial's deferred tax positions and provision for income taxes resulting from the inclusion of GM Financial in our consolidated tax return 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.

4 unchanged sentences

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.

The accounting policies 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

7 unchanged sentences

V e hicle, 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

Revenue, net of estimated returns, is recognized on the sale of parts upon delivery to 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.

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.

Typically, 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.

Used Vehicles Proceeds from the auction of 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.

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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.

2 unchanged sentences

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;

Level 2 – Quoted prices for similar instruments

GENERAL MOTORS COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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.

2 unchanged sentences

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.

2 unchanged sentences

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.

We typically review our pricing service quarterly 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.

18 unchanged sentences

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.

Equipment on Operating Leases Equipment on operating leases, net primarily consists of vehicle leases to retail customers with lease terms of two to five years .

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

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.

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.

4 unchanged sentences

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.

3 unchanged sentences

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.

Equity investments that are not accounted for under the equity method of accounting are measured at fair value or in certain cases adjusted to fair value upon an observable price change, 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.

22 unchanged sentences

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.

1 unchanged sentence

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.

Fair value is determined using either the market or sales comparison approach, cost approach or anticipated

GENERAL MOTORS COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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.

8 unchanged sentences

The discount rate assumption is established for each of the retirement-related benefit plans at their respective measurement dates.

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.

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.

11 unchanged sentences

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 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.

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.

NAV's are provided by the respective investment sponsors or investment advisers and are subsequently reviewed and approved by management.

11 unchanged sentences

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.

The estimated costs related to recall campaigns are accrued when probable and estimable.

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.

5 unchanged sentences

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 record Global Intangible Low Tax Income (GILTI) as a current period expense when incurred.

We establish valuation allowances for deferred tax assets based on a more likely than not standard.

4 unchanged sentences

We utilize a rolling three years of actual and current year results as the primary measure of cumulative losses in recent years.

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.

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 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.

5 unchanged sentences

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.

Foreign currency transaction and remeasurement gains were $ 17 million, losses of $ 203 million and gains of $ 85 million in the years ended December 31, 2021, 2020 and 2019.

Derivative Financial Instruments Derivative financial instruments are recognized as either assets or liabilities at fair value.

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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.

We estimate the fair value of the Stellantis warrants using a Black-Scholes formula.

The significant inputs to the model include the Stellantis stock price and the estimated dividend yield.

We are entitled to receive any dividends declared by Stellantis through the conversion date upon exercise of the warrants.

Gains or losses as a result of the change in the fair value of the Stellantis 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.

11 unchanged sentences

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.

The following table disaggregates our revenue by major source for revenue generating segments :

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Net sales and revenue $ 96,733 $ 11,586 $ 350 $ 108,669 $ 103 $ 13,831 $ ( 118 ) $ 122,485

GENERAL MOTORS COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Year Ended December 31, 2019

GMNA GMI Corporate Total Automotive GM Financial Eliminations Total

GMNA GMI Corporate Total Automotive Cruise GM Financial Eliminations/ Reclassifications Total

Vehicle, parts and accessories $ 101,346 $ 14,931 $ — $ 116,277 $ — $ — $ — $ 116,277

18 unchanged sentences

Cash and cash equivalents

Cash and time deposits(a) $ 8,010 $ 6,828

Cash and time deposits $ 7,881 $ 8,010

Available-for-sale debt securities

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Money market funds 1 4,038 5,085

Total cash and cash equivalents(b) $ 19,992 $ 19,069

Total cash and cash equivalents(a) $ 20,067 $ 19,992

Marketable debt securities

3 unchanged sentences

Sovereign debt 2 2,567 3,013

Total available-for-sale debt securities – marketable securities(c) $ 9,046 $ 4,174

Total available-for-sale debt securities – marketable securities(b) $ 8,609 $ 9,046

Restricted cash

2 unchanged sentences

Total restricted cash $ 3,475 $ 3,125

Available-for-sale debt securities included above with contractual maturities(d)

Available-for-sale debt securities included above with contractual maturities(c)

Due in one year or less $ 12,003

1 unchanged sentence

Total available-for-sale debt securities with contractual maturities $ 16,133

(a) Include s $ 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.

(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.

(a) Includes $ 1.6 billion and $ 761 million in Cruise at December 31, 2021 and 2020.

(b) Includes $ 1.5 billion and $ 943 million in Cruise at December 31, 2021 and 2020.

(c) Excludes mortgage and asset-backed securities of $ 575 million at December 31, 2021 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 in the years ended December 31, 2021 and 2020 and $ 4.5 billion in the year ended December 31, 2019.

Net unrealized gains and losses on available-for-sale debt securities were insignificant in the years ended December 31, 2021, 2020 and 2019.

Cumulative unrealized gains and losses on available-for-sale debt securities were insignificant at December 31, 2021 and 2020.

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:

4 unchanged sentences

Total $ 23,542 $ 23,117

GENERAL MOTORS COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

GM Financial Receivables and Transactions

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(a) Net of dealer cash management balances of $ 1.0 billion and $ 1.4 billion at December 31, 2021 and 2020.

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.

Under the cash management program, subject to certain conditions, a dealer may choose to reduce the amount of interest on its floorplan line by making principal payments to GM Financial in advance.

Years Ended December 31,

1 unchanged sentence

Allowance for loan losses at beginning of period $ 1,978 $ 944 $ 911

Impact of adoption ASU 2016-13 (Note 2) 801 — —

Impact of adoption ASU 2016-13

Provision for loan losses 248 881 726

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Allowance for loan losses at end of period $ 1,886 $ 1,978 $ 944

The decrease in the allowance for loan losses as of December 31, 2021 compared to December 31, 2020 was primarily due to a reduction in the reserve levels established at the onset of the COVID-19 pandemic.

This reduction was a result of actual credit performance that was better than forecasted and favorable expectations for future charge-offs and recoveries, reflecting improved economic conditions.

These decreases in the reserve levels were partially offset by reserves established for loans originated during the year ended December 31, 2021.

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

The following tables are consolidated summaries 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, 2021 and 2020:

Year of Origination December 31, 2021

2021 2020 2019 2018 2017 Prior Total Percent

Prime – FICO score 680 and greater $ 19,729 $ 12,408 $ 4,078 $ 2,298 $ 763 $ 143 $ 39,419 67.9 %

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Year of Origination December 31, 2020

2020 2019 2018 2017 2016 Prior Total Percent

Prime – FICO score 680 and greater $ 18,685 $ 7,033 $ 4,491 $ 1,917 $ 555 $ 119 $ 32,800 64.0 %

Near-prime – FICO score 620 to 679 3,695 2,097 1,232 603 225 83 7,935 15.4 %

Sub-prime – FICO score less than 620 3,803 2,920 1,740 1,173 610 307 10,553 20.6 %

Retail finance receivables, net of fees $ 26,183 $ 12,050 $ 7,463 $ 3,693 $ 1,390 $ 509 $ 51,288 100.0 %

GM Financial reviews the ongoing credit quality of retail finance receivables based on customer payment activity.

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The accrual of finance charge income had been suspended on delinquent retail finance receivables with contractual amounts due of $ 602 million and $ 714 million at December 31, 2021 and 2020.

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

The following tables are consolidated summaries of the delinquency status of the outstanding amortized cost of retail finance receivables for each vintage of the portfolio at December 31, 2021 and 2020:

Year of Origination December 31, 2021

2021 2020 2019 2018 2017 Prior Total Percent

0-to-30 days $ 27,270 $ 16,945 $ 6,772 $ 3,721 $ 1,478 $ 440 $ 56,626 97.5 %

5 unchanged sentences

Retail finance receivables, net of fees $ 27,638 $ 17,324 $ 7,084 $ 3,918 $ 1,607 $ 522 $ 58,093 100.0 %

(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.

Year of Origination December 31, 2020

2020 2019 2018 2017 2016 Prior Total 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 %

Greater-than-60 days 72 123 90 64 37 26 412 0.8 %

Finance receivables more than 30 days delinquent 282 448 325 234 139 87 1,515 2.9 %

In repossession 7 11 7 5 2 1 33 0.1 %

Finance receivables more than 30 days delinquent or in repossession 289 459 332 239 141 88 1,548 3.0 %

Retail finance receivables, net of fees $ 26,183 $ 12,050 $ 7,463 $ 3,693 $ 1,390 $ 509 $ 51,288 100.0 %

The outstanding amortized cost of retail finance receivables that are considered TDRs was $ 1.9 billion and $ 2.2 billion, including $ 219 million and $ 301 million in nonaccrual loans at December 31, 2021 and 2020.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Commercial Finance Receivables GM Financial's commercial finance receivables consist of dealer financings, primarily for dealer 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:

There were no commercial finance receivables on nonaccrual status at December 31, 2021 and an insignificant amount at December 31, 2020.

GM Financial's commercial risk model and risk rating categories are as follows:

Rating Description

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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.

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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:

The following tables summarize the credit risk profile by dealer risk rating of commercial finance receivables at December 31, 2021 and 2020:

Year of Origination(a) December 31, 2021

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Dealer term loans are presented by year of origination.

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.

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Transactions with GM Financial The following table shows transactions between our Automotive segments and GM Financial.

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(b) Our Automotive segments made cash payments to GM Financial for subvention of $ 3.3 billion, $ 3.9 billion and $ 4.1 billion in the years ended December 31, 2021, 2020 and 2019.

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.

GM Financial's Board of Directors declared and paid dividends of $ 3.5 billion, $ 800 million and $ 400 million on its common stock in the years ended December 31, 2021, 2020 and 2019.

December 31, 2021 December 31, 2020

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Total inventories $ 12,988 $ 10,235

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.

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 $ 294 million, $ 317 million and $ 354 million in the years ended December 31, 2021, 2020 and 2019.

Variable lease costs were insignificant in the years ended December 31, 2021, 2020 and 2019.

At December 31, 2021 and 2020, operating lease right of use assets in Other assets were $ 1.1 billion and $ 1.0 billion, operating lease liabilities in Accrued liabilities were $ 204 million and $ 209 million and non-current operating lease liabilities in Other liabilities were $ 1.0 billion and $ 969 million.

Operating lease right of use assets obtained in exchange for lease obligations were $ 328 million and $ 222 million in the years ended December 31, 2021 and 2020.

Our undiscounted future lease obligations related to operating leases having initial terms in excess of one year are $ 243 million, $ 226 million, $ 198 million, $ 163 million, $ 135 million and $ 409 million for the years 2022, 2023, 2024, 2025, 2026 and thereafter, with imputed interest of $ 159 million as of December 31, 2021.

The weighted average discount rate was 3.5 % and 4.0 % and the weighted-average remaining lease term was 7.1 years and 7.4 years at December 31, 2021 and 2020.

Payments for operating leases included in Net cash provided by (used in) operating activities were $ 301 million, $ 309 million and $ 337 million in the years ended December 31, 2021, 2020 and 2019.

Lease agreements that have not yet commenced were $ 215 million at December 31, 2021.

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Equipment on Operating Leases

Equipment on operating leases primarily consists of leases to retail customers of GM Financial.

December 31, 2021 December 31, 2020

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Total equity in net assets of nonconsolidated affiliates $ 9,677 $ 8,406

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.

The carrying amount of our investments in certain joint ventures exceeded our share of the underlying net assets by $ 4.3 billion and $ 4.2 billion at December 31, 2021 and 2020 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

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SAIC General Motors Sales Co., Ltd.

(SGMS) 49 % 49 %

SAIC GM Wuling Automobile Co., Ltd.

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Total property, net $ 41,115 $ 37,632

The amount of capitalized software included in Property, net was $ 1.3 billion at December 31, 2020 and 2019.

The amount of capitalized software included in Property, net was $ 1.4 billion and $ 1.3 billion at December 31, 2021 and 2020.

The amount of interest capitalized and excluded from Automotive interest expense related to Property, net was insignificant in the years ended December 31, 2021, 2020 and 2019.

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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.

Goodwill of $ 1.9 billion consisted of $ 1.3 billion in GM Financial and $ 574 million and $ 567 million in Cruise at December 31, 2021 and 2020.

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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, 2021 December 31, 2020

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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.

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Nonconsolidated VIEs

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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.

The carrying amounts of assets were $ 846 million and liabilities were insignificant related to our

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nonconsolidated VIEs at December 31, 2021.

The carrying amounts of assets and liabilities related to our nonconsolidated VIEs were insignificant at December 31, 2020.

Our maximum exposure to loss as a result of our involvement with these VIEs was $ 2.1 billion and $ 1.2 billion, inclusive of $ 1.2 billion and $ 776 million in committed capital contributions to Ultium Cells LLC at December 31, 2021 and 2020.

We currently lack the power through voting or similar rights to direct the activities of these entities that most significantly affect their economic performance.

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Warranty balance at end of period 9,774 8,242 7,798

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.

Supplier recoveries balance at end of period(a)

2,039 224 241

Warranty balance, net of supplier recoveries at end of period $ 7,735 $ 8,018 $ 7,557

(a) The current portion of supplier recoveries is recorded in Accounts and notes receivable, net of allowance and the non-current portion is recorded in Other assets.

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Years Ended December 31,

2021 2020 2019

Product warranty expense, net of recoveries

Warranties issued and assumed in period $ 4,485 $ 3,401 $ 2,746

Supplier recoveries accrued in period

( 2,175 ) ( 322 ) ( 433 )

Adjustments and other 296 29 474

Warranty expense, net of supplier recoveries

$ 2,606 $ 3,108 $ 2,787

In the year ended December 31, 2021, we recorded warranty recall campaign accruals of $ 2.8 billion, of which $ 2.0 billion related to the Chevrolet Bolt recall.

In addition, we reached an agreement with LG Electronics, Inc.

(LG) under which LG will reimburse GM for costs and expenses associated with the recall, which substantially offsets the warranty charges we recognized in connection with the recall.

Refer to Note 16 to our consolidated financial statements for more details on the Chevrolet Bolt recall and associated supplier recovery.

We estimate our reasonably possible loss in excess of amounts accrued for recall campaigns to be insignificant at December 31, 2021.

Automotive The following table presents debt in our automotive operations:

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Secured debt $ 192 $ 212 $ 303 $ 332

Unsecured debt 16,929 20,988 13,909 15,247

Unsecured debt(a) 16,277 19,995 16,929 20,988

Finance lease liabilities 349 362 237 256

Total automotive debt(a) $ 17,469 $ 21,576 $ 14,386 $ 15,928

Total automotive debt(b) $ 16,818 $ 20,569 $ 17,469 $ 21,576

Fair value utilizing Level 1 inputs $ 19,085 $ 19,826

Fair value utilizing Level 2 inputs $ 1,484 $ 1,750

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.

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.

Available under credit facility agreements(c) $ 15,208 $ 18,222

Weighted-average interest rate on outstanding short-term debt(d) 9.8 % 3.8 %

Weighted-average interest rate on outstanding long-term debt(d) 5.8 % 5.6 %

(a) Primarily consists of senior notes.

(b) Includes net discount and debt issuance costs of $ 512 million and $ 540 million at December 31, 2021 and 2020.

(d) Includes coupon rates on debt denominated in various foreign currencies and interest free loans.

In April 2021, we increased the total borrowing capacity of our five-year , $ 10.5 billion facility to $ 11.2 billion and extended the termination date for a $ 9.9 billion portion of the five-year facility by three years , now set to mature on April 18, 2026.

The termination date of April 18, 2023 for the remaining portion of the five-year facility remains unchanged.

We also renewed and increased the total borrowing capacity of our three-year , $ 4.0 billion facility to $ 4.3 billion, which now matures on April 7, 2024, and renewed our 364 -day, $ 2.0 billion facility allocated for exclusive use by GM Financial, which now matures on April 6, 2022.

We also terminated a separate 364 -day, $ 2.0 billion revolving credit facility, entered into in May 2020.

Additionally, the prior restrictions on share repurchases and dividends on our common shares were removed upon entrance into the renewed three-year , $ 4.3 billion facility.

In September 2021, we repaid $ 450 million of our floating rate senior unsecured debt upon maturity.

In December 2021, we terminated our three-year , $ 2.0 billion transformation facility that was scheduled to mature in January 2022.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

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In the year ended December 31, 2021, GM Financial issued $ 12.2 billion in aggregate principal amount of senior notes with an initial weighted average interest rate of 1.62 % and maturity dates ranging from 2024 to 2031.

In September 2021, GM Financial redeemed $ 1.5 billion in aggregate principal amount of 5.2 % senior notes due in 2023.

The redemption resulted in a $ 105 million loss on the early extinguishment of debt.

The loss is included in GM Financial interest, operating and other expenses.

In January 2022, GM Financial issued $ 2.6 billion in senior notes with a weighted average interest rate of 2.57 % and maturity dates ranging from 2027 to 2032.

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 .

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Commodity 2 1,549 341

PSA Warrants(b) 2 49 45

Stellantis warrants, formerly known as PSA warrants(b) 2 45 49

Total derivative financial instruments $ 5,822 $ 2,585

(a) The fair value of these derivative instruments at December 31, 2021 and 2020 and the gains/losses included in our consolidated income statements for the years ended December 31, 2021, 2020 and 2019 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.

(b) As a result of the merger of Peugeot, S.A.

(PSA Group) and Fiat Chrysler Automobiles N.V.

on January 16, 2021, our 39.7 million warrants in Stellantis will convert into 69.2 million common shares of Stellantis upon exercise, subject to the original contractual lockup period of five years .

These warrants will continue to be governed by the same terms and conditions that were applicable prior to the merger.

The fair value of these warrants, located in Other assets, was $ 1.4 billion and $ 1.1 billion at December 31, 2021 and 2020.

We recorded gains in Interest income and other non-operating income, net of $ 316 million, $ 139 million and $ 154 million for the years ended December 31, 2021, 2020 and 2019.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

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Interest rate contracts 2 110,053 846 339 110,997 954 576

Foreign currency contracts 2 148 — — — — —

Total derivative financial instruments(b) $ 133,971 $ 1,017 $ 691 $ 129,566 $ 1,823 $ 672

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GM Financial unsecured debt $ 24,964 $ ( 226 ) $ 23,315 $ ( 739 )

(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.

(a) Includes $ 246 million and $ 200 million of unamortized gains remaining on hedged items for which hedge accounting has been discontinued at December 31, 2021 and 2020.

Pensions and Other Postretirement Benefits

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hourly and salaried $ 67 $ 68 $ 83

396 532 1,624

Total $ 438 $ 464 $ 615

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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.

Other Remeasurements The SOA issued mortality improvement tables in the three months ended December 31, 2021 and December 31, 2020.

We reviewed our recent mortality experience and we determined our current mortality assumptions are appropriate to measure our U.S.

pension and OPEB plans obligations as of December 31, 2021.

In 2020, we incorporated the 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 $ 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.

The change in these assumptions decreased U.S.

pension and OPEB plans’ obligations by $ 686 million as of December 31, 2020.

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Interest cost 1,074 236 123 1,716 362 173

Actuarial losses 4,757 1,506 551 6,444 1,653 641

Actuarial (gains) losses ( 2,564 ) ( 1,015 ) ( 282 ) 4,757 1,506 551

Benefits paid ( 4,414 ) ( 1,151 ) ( 424 ) ( 4,600 ) ( 1,132 ) ( 408 )

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Total recorded in Accumulated other comprehensive loss $ ( 6 ) $ ( 3,729 ) $ ( 1,424 ) $ ( 3,245 ) $ ( 5,183 ) $ ( 1,803 )

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.

In the year ended December 31, 2021, the decrease in benefit plan obligations was primarily due to a decrease in actuarial losses experienced by all plans as a result of an increase in discount rates.

In the year ended December 31, 2020, the increase in benefit plan obligations was primarily due to an increase in actuarial losses experienced by all plans as a result of a decrease in discount rates.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

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Refer to Note 19 for additional information.

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.

pension plan service cost includes administrative expenses and Pension Benefit Guarantee Corporation premiums were insignificant for the years ended December 31, 2021 and 2020 and $ 214 million for the year ended December 31, 2019.

Weighted-average assumptions used to determine net expense are determined at the beginning of the period and updated for remeasurements.

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(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.

(e) Level 2 Other investments, net includes Canadian repurchase agreements.

The activity attributable to U.S.

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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.

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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.

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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.

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Private equity and debt investments primarily consist of investments in private equity and debt funds.

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At December 31, 2021 and 2020, we had accruals of $ 1.4 billion and $ 1.2 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

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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

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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.

In many matters, it is inherently

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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.

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.

GM Korea Wage Litigation GM Korea Company (GM Korea) is party to litigation with current and former salaried employees over whether to include fixed bonuses in the calculation of Ordinary Wages due under Korean regulations.

In 2017, the Seoul High Court (an intermediate-level appellate court) held that certain workers are not barred from filing retroactive wage claims.

GM Korea appealed this ruling to the Korea Supreme Court.

In June 2021, the Korea Supreme Court affirmed the adverse rulings of the Seoul High Court.

Accordingly, as of December 31, 2021, our total accrual relating to this matter was insignificant and we estimate our reasonably possible loss in excess of amounts accrued to be insignificant.

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.

GM Korea appealed the May 2018 and September 2020 orders.

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.

GM Korea has appealed this decision to the Korea Supreme Court.

At December 31, 2021, our accrual covering certain asserted claims and claims that we believe are probable of assertion and for which liability is probable was approximately $ 281 million.

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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 receipt s 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 i n 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.

GM Brazil Indirect Tax Claim In 2019, the Superior Court of Brazil rendered favorable decisions on three cases brought by GM Brazil that granted the Company the right to recover certain tax overpayments collected by the government.

As a result, GM Brazil recorded pre-tax recoveries of $ 1.4 billion in the year ended December 31, 2019.

GM Brazil is currently realizing those recoveries as there are federal tax liabilities eligible for offset.

On August 12, 2021, the Brazilian Supreme Court published its final decision on a Motion of Clarification filed by the Brazilian IRS in a related case that confirmed GM Brazil's right to recover the tax overpayments retroactively.

GM is also engaged in settlement negotiations with certain third parties who have asserted entitlement to some or all of the tax recoveries recognized by GM Brazil.

Accordingly, we recorded an accrual of $ 194 million in the three months ended December 31, 2021.

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;

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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.

based on these allegations, including a shareholder demand lawsuit that remains pending.

We believe that appropriate accruals have been established for losses that are probable and can be reasonably estimated.

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federal, state and foreign governments on a variety of issues.

Beyond the class action litigations disclosed, we have several other class action litigations pending at any given time.

Historically, relatively few classes have been certified in these types of cases.

Therefore, we will generally only disclose specific class actions if a class is certified and we believe there is a reasonably possible material exposure to the company.

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

labor-related matters include claims from current and

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

probable and can be reasonably estimated.

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.

We believe that appropriate accruals have been established for losses that are 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 $ 900 million at December 31, 2021.

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.

Takata Matters In November 2020, the NHTSA directed that we replace the airbag inflators in our GMT900 vehicles, which are full-size pickup trucks and SUVs, and we 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.

Accordingly, in the year ended December 31, 2020, we recorded a warranty accrual of $ 1.1 billion for the expected costs of complying with the recall remedy, and we believe the currently accrued amount remains reasonable.

GM has recalled certain vehicles sold outside of the U.S.

to replace Takata inflators in those vehicles.

to replace Takata Corporation (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.

Any additional recalls relating to these inflators could be material to our results of operations and cash flows.

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, 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.

Chevrolet Bolt Recall In July 2021, we initiated a voluntary recall for certain 2017-2019 model year Chevrolet Bolt EVs due to the risk that two manufacturing defects present in the same battery cell could cause a high voltage battery fire in certain of these vehicles.

Accordingly, in the three months ended June 30, 2021, we recorded a warranty accrual of $ 812 million.

After further investigation into the manufacturing processes at our battery supplier, LG, and disassembling battery packs, we determined that the risk of battery cell defects was not confined to the initial recall population.

As a result, in August 2021, we expanded the recall to include all 2017-2022 model year Chevrolet Bolt EV and EUVs and recorded an additional warranty accrual of $ 1.2 billion in the three months ended September 30, 2021.

In October 2021, we reached an agreement with LG, under which LG will reimburse GM for costs and expenses associated with the recall.

As a result, in the three months ended September 30, 2021, we recognized a receivable of $ 1.9 billion, which substantially offsets the warranty charges we recognized in connection with the recall.

These charges reflect our current best estimate for the cost of the recall remedy.

The actual costs of the recall and GM's associated recovery from LG could be higher or lower.

For 2017-2019 model year vehicles, the recall remedy will be to replace the high voltage battery modules in these vehicles with new modules.

For 2020-2022 model year vehicles, the recall remedy will be to replace any defective high voltage battery modules in these vehicles with new modules.

In addition, putative class actions have been filed against GM in federal courts in the U.S.

and in the Provincial Courts in Canada alleging that the batteries contained in the Bolt EVs included in the recall population are defective.

At this stage of these proceedings, we are unable to provide an estimate of the amounts or range of possible loss.

Opel/Vauxhall Sale In 2017, we sold the Opel/Vauxhall Business to PSA Group (now Stellantis) under a Master Agreement (the Agreement).

We also sold the European financing subsidiaries and branches (together with the Opel/Vauxhall Business, the European Business) to Banque PSA Finance S.A.

and BNP Paribas Personal Finance S.A.

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.

Our wholly owned subsidiary (the Seller) agreed to indemnify Stellantis 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.

Currently, various consumer lawsuits have been filed against the Seller and Stellantis in Germany, the United Kingdom, and the Netherlands alleging that Opel and Vauxhall vehicles sold by the Seller violated applicable emission standards.

We are unable to estimate any reasonably possible loss or range of loss that may result from these actions either directly or through an indemnification claim from Stellantis.

The Company entered into a guarantee for the benefit of Stellantis and pursuant to which the Company agreed to guarantee the Seller's obligation to indemnify Stellantis.

Certain of these indemnification obligations are subject to time limitations, thresholds and/or caps as to the amount of required payments.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

We continue to purchase from and supply to Stellantis 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,

2021 2020 2019

Net sales and revenue $ 114 $ 144 $ 1,129

Purchases and expenses $ 121 $ 392 $ 825

Cash payments(a) $ 226 $ 630 $ 975

Cash receipts(a) $ 146 $ 252 $ 1,408

(a) Included in Net cash provided by operating activities.

Patent Royalty Matters Several owners of patents are seeking past royalties from various automotive manufacturers, including GM, for the use of certain technologies.

Accordingly, in the three months ended December 31, 2021, we accrued approximately $ 290 million relating to these matters.

As of December 31, 2021, our total accrual relating to these matters was approximately $ 300 million and we estimate our reasonably possible loss in excess of amounts accrued to be insignificant.

Product Liability We recorded liabilities of $ 587 million and $ 589 million in Accrued liabilities and Other liabilities at December 31, 2021 and 2020, 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.

We believe that any judgment against us involving our 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.

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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.

The maximum future undiscounted payments mainly based on vehicles sold to date were $ 3.1 billion for these guarantees at December 31, 2021 and 2020, the majority of which relates to the indemnification agreements.

We provide payment guarantees on commercial loans outstanding with third parties such as dealers.

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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)

Refer to the Opel/Vauxhall Sale section of this note for additional information on our indemnification obligations to Stellantis under the Agreement.

Credit Cards Credit card programs offer rebates that can be applied primarily against the purchase or lease of our vehicles.

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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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Years Ended December 31,

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2021 2020 2019

Current income tax expense (benefit)

Current income tax expense

federal $ 20 $ 84 $ 42

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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, 2021 and 2020.

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.

We have indefinitely reinvested basis differences related to investments in non-consolidated China JVs of $ 3.4 billion at December 31, 2021 and 2020 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,

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General business credits and manufacturing incentives ( 492 ) ( 366 ) ( 420 )

Capital loss expiration — — 107

Settlements of prior year tax matters 11 ( 18 ) —

Realization of basis differences in affiliates ( 295 ) ( 12 ) —

German statutory approval of net operating losses — — ( 990 )

Foreign currency remeasurement 28 ( 7 ) 74

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Total income tax expense $ 2,771 $ 1,774 $ 769

GENERAL MOTORS COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Deferred Income Tax Assets and Liabilities Deferred income tax assets and liabilities at December 31, 2021 and 2020 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.

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operating loss and tax credit carryforwards of $ 1.2 billion expire by 2041 if not utilized and the remaining balance of $ 5.4 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.

Valuation Allowances During the years ended December 31, 2021 and 2020, valuation allowances against deferred tax assets of $ 8.9 billion and $ 9.1 billion were comprised of cumulative losses, credits and other timing differences, primarily in Germany, Spain, South Korea and the U.S.

Uncertain Tax Positions The following table summarizes activity of the total amounts of unrecognized tax benefits:

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At December 31, 2021 and 2020 we had liabilities of $ 86 million and $ 92 million for income tax related interest and penalties.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

At December 31, 2021 it is not possible to reasonably estimate the expected change to the total amount of unrecognized tax benefits in the next twelve months.

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Balance at end of period $ 285 $ 352 $ 564

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.

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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.

We incurred $ 197 million in net cash outflows in the year ended December 31, 2020 and $ 254 million in net cash outflows since program inception 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.

Holden and Thailand programs were substantially complete at December 31, 2020.

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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.

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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.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Interest Income and Other Non-Operating Income

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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.

We had no shares of preferred stock issued and outstanding at December 31, 2021 and 2020.

We had 1.5 billion and 1.4 billion shares of common stock issued and outstanding at December 31, 2021 and 2020.

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.

Dividends were not declared or paid on our common stock for the year ended December 31, 2021.

Our dividends declared per common share were $ 0.38 and $ 1.52 and our total dividends paid on common stock were $ 545 million and $ 2.2 billion for the years ended December 31, 2020 and 2019.

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.

We did no t purchase any shares of our outstanding common stock in the years ended December 31, 2021 and 2019.

We purchased three million shares of our outstanding common stock for $ 90 million in the year ended December 31, 2020.

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.

Cruise Preferred Shares In 2021, Cruise Holdings issued $ 2.7 billion of Cruise Class G Preferred Shares to Microsoft, Walmart and other investors, including $ 1.0 billion to General Motors Holdings LLC.

All proceeds related to the Cruise Class G Preferred Shares are designated exclusively for working capital and general corporate purposes of Cruise Holdings.

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 public cloud provider.

The Cruise Class G Preferred Shares participate pari passu with holders of Cruise Holdings common stock and Class F Preferred Shares (Cruise Class F Preferred Shares) in any dividends declared.

Each Cruise Class G Preferred Share is entitled to one vote per Cruise Class G Preferred Share on all matters submitted for vote by or consent of the Cruise Holdings members.

The holders of Cruise Class G Preferred Shares are restricted from transferring the Cruise Class G Preferred Shares for four years , without the written consent of both us and Cruise Holdings' Board of Directors.

The Cruise Class G Preferred Shares convert into the class of shares to be issued to the public in an initial public offering (IPO) at specified exchange ratios.

No covenants or other events of default exist that can trigger redemption of the Cruise Class G Preferred Shares.

The Cruise Class G 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, and are classified as noncontrolling interests in our consolidated financial statements.

Consistent with the Cruise Class G Preferred Shares, the Class A-1 Preferred Shares issued to SoftBank in 2018 (Cruise Class A-1 Preferred Shares) and Cruise Class F Preferred Shares convert into the class of shares to be issued to the public in an IPO at specified exchange ratios.

Beginning on June 28, 2025, SoftBank has the option to convert all of the Cruise Class A-1 Preferred Shares into our common stock at a conversion ratio that is indexed to the fair value of Cruise Holdings at the time of conversion.

In the event SoftBank exercises such option, we have the option to settle the conversion feature with our common shares or cash, and in certain situations with nonredeemable, nonconvertible preferred shares.

The Cruise Class A-1 Preferred Shares and 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.

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.

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.

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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.

Prior to an IPO, 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 IPO.

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 I n 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)

GM Financial Preferred Stock In 2020, GM Financial issued $ 500 million of Fixed-R ate 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, which started March 30, 2021 at a fixed rate of 5.70 %.

The preferred stock is classified as noncontrolling interests in our consolidated financial statements.

The following table summarizes the significant components of Accumulated other comprehensi ve loss:

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Balance at beginning of period $ ( 2,735 ) $ ( 2,278 ) $ ( 2,250 )

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 )

Other comprehensive income (loss) and noncontrolling interests, net of reclassification adjustment and tax(a)(b)(c) 81 ( 457 ) ( 28 )

Balance at end of period $ ( 2,654 ) $ ( 2,735 ) $ ( 2,278 )

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Balance at beginning of period $ ( 10,654 ) $ ( 8,859 ) $ ( 6,737 )

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.

Other comprehensive income (loss) and noncontrolling interests before reclassification adjustment(a) 4,714 ( 2,661 ) ( 2,769 )

Tax benefit (expense) ( 906 ) 444 463

Other comprehensive income (loss) and noncontrolling interests before reclassification adjustment, net of tax(a) 3,808 ( 2,217 ) ( 2,306 )

Reclassification adjustment, net of tax(c) 318 422 184

Other comprehensive income (loss), net of tax 4,126 ( 1,795 ) ( 2,122 )

Balance at end of period(d) $ ( 6,528 ) $ ( 10,654 ) $ ( 8,859 )

(a) The noncontrolling interests wer e insignificant in the years ended December 31, 2021, 2020 and 2019.

(b) The reclassification adjustment was insignificant in the years ended December 31, 2021, 2020 and 2019.

(d) Primarily consists of unamortized actuarial loss on our defined benefit plans.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

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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.

Basic and diluted earnings per share are computed by dividing Net income attributable to common stockholders by the weighted-average common shares outstanding in the period.

Diluted earnings per share is computed by giving effect to all potentially dilutive securities that are outstanding.

Years Ended December 31,

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Basic earnings per share

Income from continuing operations $ 6,427 $ 6,732 $ 8,084

Net income attributable to stockholders $ 10,019 $ 6,427 $ 6,732

cumulative dividends on subsidiary preferred stock ( 182 ) ( 180 ) ( 151 )

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 $ 9,837 $ 6,247 $ 6,581

Weighted-average common shares outstanding 1,451 1,433 1,424

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 $ 6.78 $ 4.36 $ 4.62

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 $ 9,837 $ 6,247 $ 6,581

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Weighted-average common shares outstanding – diluted 1,468 1,442 1,439

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 $ 6.70 $ 4.33 $ 4.57

Potentially dilutive securities(a) 2 7 7

(a) Potentially dilutive securities attributable t o outstanding stock options and RSUs were excluded from the computation of diluted EPS because the securities would have had an antidilutive effect.

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.

(a) Potentially dilutive securities attributable to outstanding stock options at December 31, 2021, 2020 and 2019 and RSUs at December 31, 2020, were excluded from the computation of diluted EPS because the securities would have had an antidilutive effect.

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.

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 LTIP and prior to the 2020 LTIP, under our 2017 and 2014 LTIP.

The 2020 LTIP was approved by stockholders in June 2020.

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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, 2021, 2020 and 2019.

During the year ending December 31, 2021, we granted 29.4 million RSUs with a weighted average grant date fair value of $ 25.15 to Cruise employees.

Stock options were granted in common shares of Cruise Holdings in the years ended December 31, 2021 and 2019.

There were no Cruise stock options granted in the year ended December 31, 2020.

During the year ending December 31, 2021, we granted 3.3 million stock options with a weighted average grant date fair value of $ 13.54 to Cruise employees.

These awards were granted under the 2018 Employee Incentive Plan approved by Cruise Holdings' Board of Directors in August 2018.

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Total compensation expense related to Cruise Holdings’ share-based awards was insignificant for the years ended December 31, 2021, 2020 and 2019.

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.

Cash paid to settle share-based awards was insignificant for the year ended December 31, 2021.

No share-based compensation expense had been recognized for the outstanding RSUs because the liquidity condition described above was not met at December 31, 2021, 2020 and 2019.

Total unrecognized compensation expense for Cruise Holdings’ nonvested equity awards granted was $ 1.3 billion at December 31, 2021, which was primarily comprised of 66.2 million units of RSUs for which the liquidity condition had not been met.

Total units outstanding were 90.0 million at December 31, 2021.

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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.

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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)

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.

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.

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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.

GMNA meets the demands of customers in North America and GMI primarily meets the demands of customers outside North America, with vehicles developed, manufactured and/or marketed under the Buick, Cadillac, Chevrolet and GMC 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.

Cruise is our global segment responsible for the development and commercialization of AV technology, and includes AV-related engineering and other costs.

We provide automotive financing services through our GM Financial segment.

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.

Corporate assets primarily consist of cash and cash equivalents, marketable debt securities, Stellantis warrants and intersegment balances.

All intersegment balances and transactions have been eliminated in consolidation.

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Income tax expense ( 2,771 )

Income from continuing operations 6,321

Loss from discontinued operations, net of tax —

Net income 9,945

Net loss attributable to noncontrolling interests 74

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Equity income $ 8 $ 1,092 $ — $ — $ 1,100 $ — $ 201 $ — $ 1,301

(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.

(a) Consists of potential royalties accrued with respect to past-year sales and charges related to Cadillac dealer strategy in GMNA;

and a potential settlement with certain third parties relating to retrospective recoveries of indirect taxes and an adjustment related to the unique events associated with recent Korea Supreme Court decisions related to our salaried workers in GMI.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

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Income tax expense ( 1,774 )

Income from continuing operations 6,667

Loss from discontinued operations, net of tax —

Net income 6,321

Net loss attributable to noncontrolling interests 106

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Impairment charges $ 20 $ 99 $ — $ — $ 119 $ 20 $ — $ — $ 139

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.

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.

At and For the Year Ended December 31, 2019

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Income tax expense ( 769 )

Income from continuing operations 8,075

Loss from discontinued operations, net of tax

Net income 6,667

Net loss attributable to noncontrolling interests 65

Net loss attributable to stockholders $ 8,014

Net income attributable to stockholders $ 6,732

Equity in net assets of nonconsolidated affiliates

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Impairment charges $ 15 $ 7 $ — $ — $ 22 $ 36 $ — $ — $ 58

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.

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 related to the retrospective recoveries of indirect taxes in GMI;

partially offset by losses related to the FAW-GM divestiture in GMI.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

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No individual country other than the U.S.

represented more than 10% of our total net sales and revenue or long-lived assets.

represented more than 10% of our total net sales and revenue or long-lived assets, other than Mexico, whose long-lived assets are approximately 10% of our total long-lived assets.

Supplemental Information for the Consolidated Statements of Cash Flows

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Total cash paid for interest (net of amounts capitalized) $ 3,403 $ 3,958 $ 4,214

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.

* * * * * * *

GENERAL MOTORS COMPANY AND SUBSIDIARIES

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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.

What changed 10-K

Item 8. Financial Statements and Supplementary Data