Item 8. Financial Statements and Supplementary Data

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Item 8. Financial Statements and Supplementary Data

CONSOLIDATED INCOME STATEMENTS

(In millions, except per share amounts)


	Years Ended December 31,
	2021		2020		2019
Net sales and revenue
Automotive	$	113,590	$	108,673	$	122,697
GM Financial	13,414		13,812		14,540
Total net sales and revenue (Note 3)	127,004		122,485		137,237
Costs and expenses
Automotive and other cost of sales	100,544		97,539		110,651
GM Financial interest, operating and other expenses	8,582		11,274		12,614
Automotive and other selling, general and administrative expense	8,554		7,038		8,491

Total costs and expenses	117,680		115,851		131,756
Operating income	9,324		6,634		5,481
Automotive interest expense	950		1,098		782
Interest income and other non-operating income, net (Note 19)	3,041		1,885		1,469

Equity income (Note 8)	1,301		674		1,268
Income before income taxes	12,716		8,095		7,436
Income tax expense (Note 17)	2,771		1,774		769

Net income	9,945		6,321		6,667
Net loss attributable to noncontrolling interests	74		106		65
Net income attributable to stockholders	$	10,019	$	6,427	$	6,732

Net income attributable to common stockholders	$	9,837	$	6,247	$	6,581

Earnings per share (Note 21)
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	$	6.70	$	4.33	$	4.57


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

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions)


	Years Ended December 31,
	2021		2020		2019
Net income	$	9,945	$	6,321	$	6,667
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 income (loss), net of tax	4,206		(2,318)		(2,128)
Comprehensive income	14,151		4,003		4,539
Comprehensive loss attributable to noncontrolling interests	87		92		76
Comprehensive income attributable to stockholders	$	14,238	$	4,095	$	4,615

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

GENERAL MOTORS COMPANY AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In millions, except per share amounts)


	December 31, 2021		December 31, 2020
ASSETS
Current Assets
Cash and cash equivalents	$	20,067	$	19,992
Marketable debt securities (Note 4)	8,609		9,046

Accounts and notes receivable, net of allowance of $192 and $224	7,394		8,035
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
Other current assets (Note 4; Note 11 at VIEs)	6,396		7,407

Total current assets	82,103		80,924
Non-current Assets

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
Property, net (Note 9)	41,115		37,632
Goodwill and intangible assets, net (Note 10)	5,087		5,230

Equipment on operating leases, net (Note 7; Note 11 at VIEs)	37,929		39,819
Deferred income taxes (Note 17)	21,152		24,136
Other assets (Note 4; Note 11 at VIEs)	11,488		7,264

Total non-current assets	162,615		154,270
Total Assets	$	244,718	$	235,194
LIABILITIES AND EQUITY

Current Liabilities
Accounts payable (principally trade)	$	20,391	$	19,928
Short-term debt and current portion of long-term debt (Note 13)
Automotive	463		1,276
GM Financial (Note 11 at VIEs)	33,257		35,637
Accrued liabilities (Note 12)	20,297		23,069

Total current liabilities	74,408		79,910
Non-current Liabilities
Long-term debt (Note 13)
Automotive	16,355		16,193
GM Financial (Note 11 at VIEs)	59,304		56,788
Postretirement benefits other than pensions (Note 15)	5,743		6,277
Pensions (Note 15)	8,008		12,902
Other liabilities (Note 12)	15,085		13,447

Total non-current liabilities	104,495		105,607
Total Liabilities	178,903		185,517
Commitments and contingencies (Note 16)
Equity (Note 20)



Common stock, $0.01 par value	15		14
Additional paid-in capital	27,061		26,542
Retained earnings	41,937		31,962
Accumulated other comprehensive loss	(9,269)		(13,488)
Total stockholders’ equity	59,744		45,030
Noncontrolling interests	6,071		4,647
Total Equity	65,815		49,677
Total Liabilities and Equity	$	244,718	$	235,194

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

GENERAL MOTORS COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)


	Years Ended December 31,
	2021		2020		2019
Cash flows from operating activities
Net income	$	9,945	$	6,321	$	6,667
Depreciation and impairment of Equipment on operating leases, net	6,076		7,178		7,332
Depreciation, amortization and impairment charges on Property, net	5,975		5,637		6,786
Foreign currency remeasurement and transaction (gains) losses	(17)		203		(85)
Undistributed earnings of nonconsolidated affiliates, net	(517)		524		585
Pension contributions and OPEB payments	(838)		(851)		(985)
Pension and OPEB income, net	(1,605)		(765)		(484)
Provision (benefit) for deferred taxes	2,214		925		(133)
Change in other operating assets and liabilities (Note 24)	(3,366)		(399)		(3,789)
Other operating activities	(2,679)		(2,103)		(873)


Net cash provided by operating activities	15,188		16,670		15,021
Cash flows from investing activities
Expenditures for property	(7,509)		(5,300)		(7,592)
Available-for-sale marketable securities, acquisitions	(8,962)		(16,204)		(4,075)

Available-for-sale marketable securities, liquidations	9,347		11,941		6,265


Purchases of finance receivables, net	(33,009)		(30,090)		(24,538)
Principal collections and recoveries on finance receivables	24,622		19,726		22,005
Purchases of leased vehicles, net	(14,602)		(15,233)		(16,404)
Proceeds from termination of leased vehicles	14,393		13,399		13,302
Other investing activities	(635)		(65)		138


Net cash used in investing activities	(16,355)		(21,826)		(10,899)
Cash flows from financing activities
Net increase (decrease) in short-term debt	2,912		277		(312)
Proceeds from issuance of debt (original maturities greater than three months)	45,300		78,527		36,937
Payments on debt (original maturities greater than three months)	(47,806)		(72,663)		(39,156)

Proceeds from issuance of subsidiary preferred and common stock (Note 20)	1,736		492		457
Dividends paid	(186)		(669)		(2,350)
Other financing activities	(212)		(412)		(253)


Net cash provided by (used in) financing activities	1,744		5,552		(4,677)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(152)		(222)		2
Net increase (decrease) in cash, cash equivalents and restricted cash	425		174		(553)

Cash, cash equivalents and restricted cash at beginning of period	23,117		22,943		23,496
Cash, cash equivalents and restricted cash at end of period	$	23,542	$	23,117	$	22,943



Significant Non-cash Investing and Financing Activity
Non-cash property additions	$	4,305	$	2,300	$	2,837

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

GENERAL MOTORS COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

(In millions)


	Common Stockholders’											Noncontrolling Interests		Total Equity
Common Stock			Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Loss
Balance at January 1, 2019	$	14		$	25,563		$	22,322		$	(9,039)	$	3,917	$	42,777
Net income	—			—			6,732			—		(65)		6,667
Other comprehensive loss	—			—			—			(2,117)		(11)		(2,128)
Issuance of subsidiary preferred stock (Note 20)	—			—			—			—		457		457


Stock based compensation	—			409			(34)			—		—		375
Cash dividends paid on common stock	—			—			(2,165)			—		—		(2,165)
Dividends to noncontrolling interests	—			—			—			—		(166)		(166)
Other	—			102			5			—		33		140
Balance at December 31, 2019	14			26,074			26,860			(11,156)		4,165		45,957
Adoption of accounting standards	—			—			(660)			—		—		(660)
Net income	—			—			6,427			—		(106)		6,321
Other comprehensive loss	—			—			—			(2,332)		14		(2,318)
Purchase of common stock	—			(57)			(33)			—		—		(90)
Issuance of subsidiary preferred stock (Note 20)	—			—			—			—		544		544
Stock based compensation	—			525			(10)			—		—		515
Cash dividends paid on common stock	—			—			(545)			—		—		(545)
Dividends to noncontrolling interests	—			—			—			—		(46)		(46)

Other	—			—			(77)			—		76		(1)
Balance at December 31, 2020	14			26,542			31,962			(13,488)		4,647		49,677

Net income	—			—			10,019			—		(74)		9,945
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

Dividends to noncontrolling interests	—			—			—			—		(186)		(186)
Other	1			(7)			(41)			—		(39)		(86)
Balance at December 31, 2021	$	15		$	27,061		$	41,937		$	(9,269)	$	6,071	$	65,815

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

GENERAL MOTORS COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Nature of Operations and Basis of Presentation

General Motors Company was incorporated as a Delaware corporation in 2009. We design, build and sell trucks, crossovers, cars and automobile parts, 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 operations through the following segments: GMNA, GMI, Cruise and GM Financial. Cruise is our global segment responsible for the development and commercialization of AV technology. Nonsegment operations are classified as Corporate. Corporate includes certain centrally recorded income and costs such as interest, income taxes, corporate expenditures and certain nonsegment-specific revenues and expenses. The consolidated financial statements are prepared in conformity with U.S. GAAP. Except for per share amounts or as otherwise specified, amounts presented within tables are stated in millions.

Principles of Consolidation We consolidate entities that we control due to ownership of a majority voting interest and we consolidate variable interest entities (VIEs) when we are the primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation. Our share of earnings or losses of nonconsolidated affiliates is included in our consolidated operating results using the equity method of accounting when we are able to exercise significant influence over the operating and financial decisions of the affiliate.

Use of Estimates in the Preparation of the Financial Statements Accounting estimates are an integral part of the consolidated financial statements. These estimates require the use of judgments and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses in the periods presented. We believe that the accounting estimates employed are appropriate and the resulting balances are reasonable; however, due to the inherent uncertainties in making estimates, actual results could differ from the original estimates, requiring adjustments to these balances in future periods.

GM Financial The amounts presented for GM Financial have been adjusted to 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.

Note 2. Significant Accounting Policies

The accounting policies that follow are utilized by our automotive, automotive financing and Cruise operations, unless otherwise indicated. We adopted Accounting Standards Update (ASU) 2016-13 "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" (ASU 2016-13) on January 1, 2020 on a modified retrospective basis. As such, the comparative information in prior periods was not restated and continues to be reported under the accounting standards in effect for those periods. The accounting policies for Marketable Debt Securities, Accounts and Notes Receivable and GM Financial Receivables that were affected by the adoption of ASU 2016-13 became effective on January 1, 2020.

Revenue Recognition

Automotive Automotive net sales and revenue represents the amount of consideration to which we expect to be entitled in exchange for vehicle, parts and accessories and services and other sales. The consideration recognized represents the amount received, typically shortly after the sale to a customer, net of estimated dealer and customer sales incentives we reasonably expect to pay. Significant factors in determining our estimates of incentives include forecasted sales volume, product mix and the rate of customer acceptance of incentive programs, all of which are estimated based on historical experience and assumptions concerning future customer behavior and market conditions. Subsequent adjustments to incentive estimates are possible as facts and circumstances change over time. A portion of the consideration received is deferred for separate performance obligations, such as maintenance and vehicle connectivity, that will be provided to our customers at a future date. Taxes assessed by various government entities, such as sales, use and value-added taxes, collected at the time of the vehicle sale are excluded from Automotive net sales and revenue. Costs for shipping and handling activities that occur after control of the vehicle transfers to the dealer are recognized at the time of sale and presented in Automotive and other cost of sales.

Vehicle, Parts and Accessories For the majority of vehicle and accessories sales, our customers obtain control and we recognize revenue when the vehicle transfers to the dealer, which generally occurs when the vehicle is released to the carrier responsible for transporting it to a dealer. Revenue, net of estimated returns, is recognized on the sale of parts upon delivery to 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)

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.

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. For those service arrangements that are bundled with a vehicle sale, a portion of the revenue from the sale is allocated to the service component and recognized as deferred revenue within Accrued liabilities or Other liabilities. We recognize revenue for bundled services and services sold separately as services are performed, typically over a period of up to seven years.

Automotive Financing - GM Financial Finance charge income earned on finance receivables is recognized using the effective interest method. Fees and commissions received (including incentive payments) and direct costs of originating loans are deferred and amortized over the term of the related finance receivables using the effective interest method and are removed from the consolidated balance sheets when the related finance receivables are fully charged off or paid in full. Accrual of finance charge income on retail finance receivables is generally suspended on accounts that are more than 60 days delinquent, accounts in bankruptcy and accounts in repossession. Payments received on nonaccrual loans are first applied to any fees due, then to any interest due and then any remaining amounts are applied to principal. Interest accrual generally resumes once an account has received payments bringing the delinquency to less than 60 days past due. Accrual of finance charge income on commercial finance receivables is generally suspended on accounts that are more than 90 days delinquent, upon receipt of a bankruptcy notice from a borrower, or where reasonable doubt exists about the full collectability of contractually agreed upon principal and interest. Payments received on nonaccrual loans are first applied to principal. Interest accrual resumes once an account has received payments bringing the account fully current and collection of contractual principal and interest is reasonably assured (including amounts previously charged off).

Income from operating lease assets, which includes lease origination fees, net of lease origination costs, is recorded as operating lease revenue on a straight-line basis over the term of the lease agreement. Gains or losses realized upon disposition of off-lease assets including any payments received from lessees upon lease termination, are included in GM Financial interest, operating and other.

Advertising and Promotion Expenditures Advertising and promotion expenditures, which are expensed as incurred in Automotive and other selling, general and administrative expense, were $3.3 billion, $2.7 billion and $3.7 billion in the years ended December 31, 2021, 2020 and 2019.

Research and Development Expenditures Research and development expenditures, which are expensed as incurred in Automotive and other cost of sales, were $7.9 billion, $6.2 billion and $6.8 billion in the years ended December 31, 2021, 2020 and 2019. We enter into cost sharing arrangements with third parties or nonconsolidated affiliates for product-related research, engineering, design and development activities. Cost sharing payments and fees related to these arrangements are presented in Automotive and other cost of sales.

Cash Equivalents and Restricted Cash Cash equivalents are defined as short-term, highly-liquid investments with original maturities of 90 days or less. Certain operating agreements require us to post cash as collateral. Cash and cash equivalents subject to contractual restrictions and not readily available are classified as restricted cash. Restricted cash is invested in accordance with the terms of the underlying agreements and include amounts related to various deposits, escrows and other cash collateral. Restricted cash is included in Other current assets and Other assets in the consolidated balance sheets.

Fair Value Measurements A three-level valuation hierarchy, based upon observable and unobservable inputs, is used for fair value measurements. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions based on the best evidence available. These two types of inputs create the following fair value hierarchy: Level 1 – Quoted prices for identical instruments in active markets; Level 2 – Quoted prices for similar instruments

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.

Marketable Debt Securities We generally classify marketable debt securities as available-for-sale. Various factors, including turnover of holdings and investment guidelines, are considered in determining the classification of securities. Available-for-sale debt securities are recorded at fair value with non-credit related unrealized gains and losses recorded in Accumulated other comprehensive loss until realized. 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. 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.

We determine realized gains and losses for all debt securities using the specific identification method and measure the fair value of our marketable debt securities using a market approach where identical or comparable prices are available and an income approach in other cases. If quoted market prices are not available, fair values of securities are determined using prices from a pricing service, pricing models, quoted prices of securities with similar characteristics or discounted cash flow models. These prices represent non-binding quotes. Our pricing service utilizes industry-standard pricing models that consider various inputs. We 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. We evaluate the collectability of receivables each reporting period and record an allowance for doubtful accounts to present the net amount expected to be collected on our receivables. Additions to the allowance are charged to bad debt expense reported in Automotive and other selling, general and administrative expense and were insignificant in the years ended December 31, 2021, 2020 and 2019.

GM Financial Receivables Finance receivables are carried at amortized cost, net of allowance for loan losses. Provisions for loan losses are charged to operations in amounts sufficient to maintain the allowance for loan losses at levels considered adequate to cover expected credit losses on the finance receivables. For retail finance receivables, GM Financial uses static pool modeling techniques to determine the allowance for loan losses expected over the remaining life of the receivables, which is supplemented by management judgment. The modeling techniques incorporate reasonable and supportable forecasts of economic conditions over the expected remaining life of the finance receivables. The economic forecasts incorporate factors which vary by region that GM Financial believes will have the largest impact on expected losses, including unemployment rates, interest rate spreads, disposable personal income and growth rates in gross domestic product.

Troubled debt restructurings (TDRs) are grouped separately for purposes of measuring the allowance. The allowance for TDRs uses static pool modeling techniques like non-TDR retail finance receivables to determine the expected loss amount. The expected cash flows of the receivables are then discounted at the original weighted average effective interest rate of the pool. Factors considered when estimating the allowance for TDRs are based on an evaluation of historical and current information, which may be supplemented by management judgment. Finance charge income from loans classified as TDRs is accounted for in the same manner as other accruing loans. Cash collections on these loans are allocated according to the same payment hierarchy methodology applied to loans that are not classified as TDRs.

Commercial finance receivables are carried at amortized cost, net of allowance for loan losses and amounts held under a cash management program. GM Financial establishes the allowance for loan losses based on historical loss experience, as well as the forecast for industry vehicle sales, which is the economic indicator believed to have the largest impact on expected losses.

Inventories Inventories are stated at the lower of cost or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business less cost to sell, and considers general market and economic conditions, periodic reviews of current profitability of vehicles, product warranty costs and the effect of estimated sales incentives. Net realizable value for off-lease and other vehicles is current auction sales proceeds less disposal and warranty costs. Productive material, supplies, work in process and service parts are reviewed to determine if inventory quantities are in excess of forecasted usage or if they have become obsolete.

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)

forecasted auction proceeds when there is a reliable basis to make such a determination. Realization of the residual values is dependent on the future ability to market the vehicles under prevailing market conditions. The estimate of the residual value is evaluated over the life of the arrangement and adjustments may be made to the extent the expected value of the vehicle changes. Adjustments may be in the form of revisions to the depreciation rate or recognition of an impairment charge. A lease vehicle asset group is determined to be impaired if an impairment indicator exists and the expected future cash flows, which include estimated residual values, are lower than the carrying amount of the vehicle asset group. If the carrying amount is considered impaired an impairment charge is recorded for the amount by which the carrying amount exceeds fair value of the vehicle asset group. Fair value is determined primarily using the anticipated cash flows, including estimated residual values. In our automotive finance operations when a leased vehicle is returned or repossessed the asset is recorded in Other assets at the lower of amortized cost or net realizable value. Upon disposition a gain or loss is recorded in GM Financial interest, operating and other expenses for any difference between the net book value of the leased asset and the proceeds from the disposition of the asset.

Equity Investments When events and circumstances warrant, equity investments accounted for under the equity method of accounting are evaluated for impairment. An impairment charge is recorded whenever a decline in value of an equity investment below its carrying amount is determined to be other-than-temporary. Impairment charges related to equity method investments are recorded in Equity income. Equity investments that are not accounted for under the equity method of accounting are measured at fair value 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. Major improvements that extend the useful life or add functionality are capitalized. The gross amount of assets under finance leases is included in property, plant and equipment. Expenditures for repairs and maintenance are charged to expense as incurred. We depreciate depreciable property using the straight-line method. Leasehold improvements are amortized over the period of lease or the life of the asset, whichever is shorter. The amortization of the assets under finance leases is included in depreciation expense. Upon retirement or disposition of property, plant and equipment, the cost and related accumulated depreciation are eliminated and any resulting gain or loss is recorded in earnings. Impairment charges related to property are recorded in Automotive and other cost of sales, Automotive and other selling, general and administrative expense or GM Financial interest, operating and other expenses.

Special Tools Special tools represent product-specific propulsion and non-propulsion related tools, dies, molds and other items used in the vehicle manufacturing process. Expenditures for special tools are recorded at cost and are capitalized. We amortize special tools over their estimated useful lives using the straight-line method or an accelerated amortization method based on their historical and estimated production volume. Impairment charges related to special tools are recorded in Automotive and other cost of sales.

Goodwill Goodwill is not amortized but rather tested for impairment annually on October 1 and when events warrant such a review. The impairment test entails an assessment of qualitative factors to determine whether it is more likely than not that an impairment exists. If it is more likely than not that an impairment exists, then a quantitative impairment test is performed. Impairment exists when the carrying amount of a reporting unit exceeds its fair value.

Intangible Assets, net Intangible assets, excluding goodwill, primarily include brand names, technology and intellectual property, customer relationships and dealer networks. Intangible assets are amortized on a straight-line or an accelerated method of amortization over their estimated useful lives. An accelerated amortization method reflecting the pattern in which the asset will be consumed is utilized if that pattern can be reliably determined. We consider the period of expected cash flows and underlying data used to measure the fair value of the intangible assets when selecting a useful life. Amortization of developed technology and intellectual property is recorded in Automotive and other cost of sales. Amortization of brand names, customer relationships and our dealer networks is recorded in Automotive and other selling, general and administrative expense or GM Financial interest, operating and other expenses. Impairment charges, if any, related to intangible assets are recorded in Automotive and other selling, general and administrative expense or Automotive and other cost of sales.

Valuation of Long-Lived Assets The carrying amount of long-lived assets and finite-lived intangible assets to be held and used in the business is evaluated for impairment when events and circumstances warrant. If the carrying amount of a long-lived asset group is considered impaired, a loss is recorded based on the amount by which the carrying amount exceeds fair value. Product-specific long-lived asset groups and non-product specific long-lived assets are separately tested for impairment on an asset group basis. Fair value is determined using either the market or sales comparison approach, cost approach or anticipated

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.

Pension and OPEB Plans

Attribution, Methods and Assumptions The cost of benefits provided by defined benefit pension plans is recorded in the period employees provide service. The cost of pension plan amendments that provide for benefits already earned by plan participants is amortized over the expected period of benefit which may be the duration of the applicable collective bargaining agreement specific to the plan, the expected future working lifetime or the life expectancy of the plan participants.

The cost of medical, dental, legal service and life insurance benefits provided through postretirement benefit plans is recorded in the period employees provide service. The cost of postretirement plan amendments that provide for benefits already earned by plan participants is amortized over the expected period of benefit which may be the average period to full eligibility or the average life expectancy of the plan participants.

An expected return on plan asset methodology is utilized to calculate future pension expense for certain significant funded benefit plans. A market-related value of plan assets methodology is also utilized that averages gains and losses on the plan assets over a period of years to determine future pension expense. The methodology recognizes 60% of the difference between the fair value of assets and the expected calculated value in the first year and 10% of that difference over each of the next four years.

The discount rate assumption is established for each of the retirement-related benefit plans at their respective measurement dates. In the U.S., we use a cash flow matching approach that uses projected cash flows matched to spot rates along a high-quality corporate bond yield curve to determine the present value of cash flows to calculate a single equivalent discount rate. We apply individual annual yield curve rates to determine the service cost and interest cost for our pension and OPEB plans to more specifically link the cash flows related to service cost and interest cost to bonds maturing in their year of payment.

The benefit obligation for pension plans in Canada, the U.K. and Germany represents 93% of the non-U.S. pension benefit obligation at December 31, 2021. The discount rates for plans in Canada, the U.K. and Germany are determined using a cash flow matching approach like the U.S.

Plan Asset Valuation Due to the lack of timely available market information for certain investments in the asset classes described below as well as the inherent uncertainty of valuation, reported fair values may differ from fair values that would have been used had timely available market information been available.

Common and Preferred Stock Common and preferred stock for which market prices are readily available at the measurement date are valued at the last reported sale price or official closing price on the primary market or exchange on which they are actively traded and are classified in Level 1. Such equity securities for which the market is not considered to be active are valued via the use of observable inputs, which may include the use of adjusted market prices last available, bids or last available sales prices and/or other observable inputs and are classified in Level 2. Common and preferred stock classified in Level 3 are privately issued securities or other issues that are valued via the use of valuation models using significant unobservable inputs that generally consider aged (stale) pricing, earnings multiples, discounted cash flows and/or other qualitative and quantitative factors.

Debt Securities Valuations for debt securities are based on quotations received from independent pricing services or from dealers who make markets in such securities. Debt securities priced via pricing services that utilize matrix pricing which considers readily observable inputs such as the yield or price of bonds of comparable quality, coupon, maturity and type as well as dealer supplied prices, are classified in Level 2. Debt securities that are typically priced by dealers and pricing services via the use of proprietary pricing models which incorporate significant unobservable inputs are classified in Level 3. These inputs 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)

NAV's are provided by the respective investment sponsors or investment advisers and are subsequently reviewed and approved by management. In the event management concludes a reported NAV does not reflect fair value or is not determined as of the financial reporting measurement date, we will consider whether and when deemed necessary to make an adjustment at the balance sheet date. In determining whether an adjustment to the external valuation is required, we will review material factors that could affect the valuation, such as changes in the composition or performance of the underlying investments or comparable investments, overall market conditions, expected sale prices for private investments which are probable of being sold in the short-term and other economic factors that may possibly have a favorable or unfavorable effect on the reported external valuation.

Stock Incentive Plans Our stock incentive plans include RSUs, Restricted Stock Awards (RSAs), PSUs, stock options and awards that may be settled in our stock, the stock of our subsidiaries or in cash. We measure and record compensation expense based on the fair value of GM or Cruise's common stock on the date of grant for RSUs, RSAs and PSUs and the grant date fair value, determined utilizing a lattice model or the Black-Scholes formula, for stock options and PSUs. We record compensation cost for service-based RSUs, RSAs, PSUs and service-based stock options on a straight-line basis over the entire vesting period, or for retirement eligible employees over the requisite service period. RSUs granted in stock of Cruise vest upon satisfaction of both a service condition and a liquidity condition, defined as a change in control transaction or the consummation of an initial public offering. Compensation costs for RSUs granted in stock of Cruise will be recorded when the liquidity condition is met. Compensation cost for awards that do not have an established accounting grant date, but for which the service inception date has been established, or are settled in cash is based on the fair value of GM or Cruise's common stock at the end of each reporting period. We use the graded vesting method to record compensation cost for stock options with market conditions over the lesser of the vesting period or the time period an employee becomes eligible to retain the award at retirement.

Product Warranty and Recall Campaigns The estimated costs related to product warranties are accrued at the time products are sold and are charged to Automotive and other cost of sales. These estimates are established using historical information on the nature, frequency and average cost of claims of each vehicle line or each model year of the vehicle line and assumptions about future activity and events. Revisions are made when necessary and are based on changes in these factors.

The estimated costs related to recall campaigns are accrued when probable and estimable. In GMNA, we estimate the costs related to recall campaigns by applying a paid loss approach that considers the number of historical recall campaigns and the estimated cost for each recall campaign. The estimated costs associated with recall campaigns in other geographical regions are determined using the estimated costs of repairs and the estimated number of vehicles to be repaired. Costs associated with recall campaigns are charged to Automotive and other cost of sales. Revisions are made when necessary based on changes in these factors.

Income Taxes The liability method is used in accounting for income taxes. Deferred tax assets and liabilities are recorded for temporary differences between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements using the statutory tax rates in effect for the year in which the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax laws or rates is recorded in the results of operations in the period that includes the enactment date under the law. We 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. Deferred income tax assets are evaluated quarterly to determine if valuation allowances are required or should be adjusted. The ability to realize deferred tax assets depends on the ability to generate sufficient taxable income within the carryback or carryforward periods provided for in the tax law for each applicable tax jurisdiction. The assessment regarding whether a valuation allowance is required or should be adjusted also considers all available positive and negative evidence factors. It is difficult to conclude a valuation allowance is not required when there is significant objective and verifiable negative evidence, such as cumulative losses in recent years. We utilize a rolling three years of actual and current year results as the primary measure of cumulative losses in recent years.

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)

Foreign Currency Transactions and Translation The assets and liabilities of foreign subsidiaries that use the local currency as their functional currency are translated to U.S. Dollars based on the current exchange rate prevailing at each balance sheet date and any resulting translation adjustments are included in Accumulated other comprehensive loss. The assets and liabilities of foreign subsidiaries whose local currency is not their functional currency are remeasured from their local currency to their functional currency and then translated to U.S. Dollars. Revenues and expenses are translated into U.S. Dollars using the average exchange rates prevailing for each period presented. The financial statements of any foreign subsidiary that has been identified as having a highly inflationary economy are remeasured as if the functional currency were the U.S. Dollar.

Gains and losses arising from foreign currency transactions and the effects of remeasurements discussed in the preceding paragraph are recorded in Automotive and other cost of sales and GM Financial interest, operating and other expenses unless related to Automotive debt, which are recorded in Interest income and other non-operating income, net. Foreign currency transaction and remeasurement 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. The accounting for changes in the fair value of each derivative financial instrument depends on whether it has been designated and qualifies as an accounting hedge, as well as the type of hedging relationship identified. Derivative instruments are not used for trading or speculative purposes.

Automotive We utilize options, swaps and forward contracts to manage foreign currency and commodity price risk. The change in fair value of option and forward contracts not designated as hedges is recorded in Interest income and other non-operating income, net. Cash flows for all derivative financial instruments are classified in cash flows from operating activities.

We estimate the fair value of the 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. The change in fair value of the derivative instruments not designated as hedges is recorded in GM Financial interest, operating and other expenses. Cash flows for all derivative financial instruments are classified in cash flows from operating activities.

Certain interest rate and foreign currency swap agreements have been designated as fair value hedges. The risk being hedged is the risk of changes in the fair value of the hedged debt attributable to changes in the benchmark interest rate or the risk of changes in fair value attributable to changes in foreign currency exchange rates. If the swap has been designated as a fair value hedge, the changes in the fair value of the hedged item are recorded in GM Financial interest, operating and other expenses. The change in fair value of the related hedge is also recorded in GM Financial interest, operating and other expenses.

Certain interest rate swap and foreign currency swap agreements have been designated as cash flow hedges. The risk being hedged is the interest rate and foreign currency risk related to forecasted transactions. If the contract has been designated as a cash flow hedge, the change in the fair value of the cash flow hedge is deferred in Accumulated other comprehensive loss and is recognized in GM Financial interest, operating and other expenses along with the earnings effect of the hedged item when the hedged item affects earnings. Changes in the fair value of amounts excluded from the assessment of effectiveness are recorded currently in earnings and are presented in the same income statement line as the earnings effect of the hedged item.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Note 3. Revenue

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


	Year Ended December 31, 2021
	GMNA		GMI		Corporate		Total Automotive		Cruise		GM Financial		Eliminations/ Reclassifications		Total
Vehicle, parts and accessories	$	97,515	$	10,956	$	14	$	108,485	$	—	$	—	$	—	$	108,485
Used vehicles	545		49		—		594		—		—		—		594
Services and other	3,248		1,167		90		4,505		106		—		(100)		4,511
Automotive net sales and revenue	101,308		12,172		104		113,584		106		—		(100)		113,590
Leased vehicle income	—		—		—		—		—		9,026		—		9,026
Finance charge income	—		—		—		—		—		4,103		—		4,103
Other income	—		—		—		—		—		290		(5)		285
GM Financial net sales and revenue	—		—		—		—		—		13,419		(5)		13,414
Net sales and revenue	$	101,308	$	12,172	$	104	$	113,584	$	106	$	13,419	$	(105)	$	127,004


	Year Ended December 31, 2020
	GMNA		GMI		Corporate		Total Automotive		Cruise		GM Financial		Eliminations/ Reclassifications		Total
Vehicle, parts and accessories	$	92,749	$	10,593	$	1	$	103,343	$	—	$	—	$	—	$	103,343
Used vehicles	875		115		20		1,010		—		—		—		1,010
Services and other	3,109		878		329		4,316		103		—		(99)		4,320
Automotive net sales and revenue	96,733		11,586		350		108,669		103		—		(99)		108,673
Leased vehicle income	—		—		—		—		—		9,530		—		9,530
Finance charge income	—		—		—		—		—		3,996		(1)		3,995
Other income	—		—		—		—		—		305		(18)		287
GM Financial net sales and revenue	—		—		—		—		—		13,831		(19)		13,812
Net sales and revenue	$	96,733	$	11,586	$	350	$	108,669	$	103	$	13,831	$	(118)	$	122,485


	Year Ended December 31, 2019
	GMNA		GMI		Corporate		Total Automotive		Cruise		GM Financial		Eliminations/ Reclassifications		Total
Vehicle, parts and accessories	$	101,346	$	14,931	$	—	$	116,277	$	—	$	—	$	—	$	116,277
Used vehicles	1,896		123		—		2,019		—		—		—		2,019
Services and other	3,124		1,057		220		4,401		100		—		(100)		4,401
Automotive net sales and revenue	106,366		16,111		220		122,697		100		—		(100)		122,697
Leased vehicle income	—		—		—		—		—		10,032		—		10,032
Finance charge income	—		—		—		—		—		4,071		(7)		4,064
Other income	—		—		—		—		—		451		(7)		444
GM Financial net sales and revenue	—		—		—		—		—		14,554		(14)		14,540
Net sales and revenue	$	106,366	$	16,111	$	220	$	122,697	$	100	$	14,554	$	(114)	$	137,237

Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services. Adjustments to sales incentives for previously recognized sales were insignificant during the years ended December 31, 2021, 2020 and 2019.

Contract liabilities in our Automotive segments primarily consist of maintenance, extended warranty and other service contracts of $2.5 billion and $2.4 billion at December 31, 2021 and 2020, which are included in Accrued liabilities and Other liabilities. We recognized revenue of $1.2 billion and $1.1 billion related to contract liabilities during the years ended December 31, 2021 and 2020. We expect to recognize revenue of $1.2 billion, $498 million and $868 million in the years ending December 31, 2022, 2023 and thereafter related to contract liabilities at December 31, 2021.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Note 4. Marketable and Other Securities

The following table summarizes the fair value of cash equivalents and marketable debt securities, which approximates cost:


	Fair Value Level	December 31, 2021		December 31, 2020
Cash and cash equivalents
Cash and time deposits		$	7,881	$	8,010
Available-for-sale debt securities
U.S. government and agencies	2	722		1,370
Corporate debt	2	5,321		3,476
Sovereign debt	2	2,105		2,051
Total available-for-sale debt securities – cash equivalents		8,148		6,897
Money market funds	1	4,038		5,085
Total cash and cash equivalents(a)		$	20,067	$	19,992
Marketable debt securities
U.S. government and agencies	2	$	2,071	$	1,771
Corporate debt	2	3,396		3,630
Mortgage and asset-backed	2	575		632
Sovereign debt	2	2,567		3,013
Total available-for-sale debt securities – marketable securities(b)		$	8,609	$	9,046
Restricted cash
Cash and cash equivalents		$	466	$	269
Money market funds	1	3,009		2,856
Total restricted cash		$	3,475	$	3,125

Available-for-sale debt securities included above with contractual maturities(c)
Due in one year or less		$	12,003
Due between one and five years		4,130


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

(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.

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same amounts shown in the consolidated statements of cash flows:


	December 31, 2021		December 31, 2020
Cash and cash equivalents	$	20,067	$	19,992
Restricted cash included in Other current assets	2,935		2,581
Restricted cash included in Other assets	540		544
Total	$	23,542	$	23,117

GENERAL MOTORS COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Note 5. GM Financial Receivables and Transactions


	December 31, 2021						December 31, 2020
	Retail		Commercial(a)		Total		Retail		Commercial(a)		Total
GM Financial receivables	$	58,093	$	6,609	$	64,702	$	51,288	$	8,682	$	59,970
Less: allowance for loan losses	(1,839)		(47)		(1,886)		(1,915)		(63)		(1,978)
GM Financial receivables, net	$	56,254	$	6,562	$	62,816	$	49,373	$	8,619	$	57,992

Fair value of GM Financial receivables utilizing Level 2 inputs					$	6,562					$	8,619
Fair value of GM Financial receivables utilizing Level 3 inputs					$	57,613					$	51,645

(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 its floorplan line by making principal payments to GM Financial in advance.


	Years Ended December 31,
	2021		2020		2019
Allowance for loan losses at beginning of period	$	1,978	$	944	$	911
Impact of adoption ASU 2016-13	—		801		—
Provision for loan losses	248		881		726
Charge-offs	(897)		(1,169)		(1,246)
Recoveries	574		542		551
Effect of foreign currency	(17)		(21)		2
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. 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	%
Near-prime – FICO score 620 to 679	3,856		2,388		1,229		648		274		84		8,479		14.6	%
Sub-prime – FICO score less than 620	4,053		2,528		1,777		972		570		295		10,195		17.5	%
Retail finance receivables, net of fees	$	27,638	$	17,324	$	7,084	$	3,918	$	1,607	$	522	$	58,093	100.0	%

GENERAL MOTORS COMPANY AND SUBSIDIARIES

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. A retail account is considered delinquent if a substantial portion of a scheduled payment has not been received by the date the payment was contractually due. Retail finance receivables are collateralized by vehicle titles and, subject to local laws, GM Financial generally has the right to repossess the vehicle in the event the customer defaults on the payment terms of the contract. The accrual of finance charge income had been suspended on delinquent retail finance receivables with contractual amounts due of $602 million and $714 million at December 31, 2021 and 2020. 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	%
31-to-60 days	273		276		230		147		97		60			1,083		1.8	%
Greater-than-60 days	83		93		76		46		30		21			349		0.6	%
Finance receivables more than 30 days delinquent	356		369		306		193		127		81			1,432		2.4	%
In repossession	12		10		6		4		2		1			35		0.1	%
Finance receivables more than 30 days delinquent or in repossession	368		379		312		197		129		82			1,467		2.5	%
Retail finance receivables, net of fees	$	27,638	$	17,324	$	7,084	$	3,918	$	1,607	$	522		$	58,093	100.0	%


	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. 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
I						Performing accounts with strong to acceptable financial metrics with at least satisfactory capacity to meet financial commitments.
II						Performing accounts experiencing potential weakness in financial metrics and repayment prospects resulting in increased monitoring.
III						Non-Performing accounts with inadequate paying capacity for current obligations and have the distinct possibility of creating a loss if deficiencies are not corrected.
IV						Non-Performing accounts with inadequate paying capacity for current obligations and inherent weaknesses that make collection of liquidation in full highly questionable or improbable.

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 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
	Revolving		2021		2020		2019		2018		2017		Prior			Total		Percent
I	$	5,210	$	420	$	396	$	120	$	50	$	50	$	10		$	6,256	94.7	%
II	207		3		16		12		—		3		—			241		3.6	%
III	81		8		15		2		—		2		4			112		1.7	%
IV	—		—		—		—		—		—		—			—		—	%
Commercial finance receivables, net of fees	$	5,498	$	431	$	427	$	134	$	50	$	55	$	14		$	6,609	100.0	%

(a)Floorplan advances comprise 94% of the total revolving balance. 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.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Transactions with GM Financial The following table shows transactions between our Automotive segments and GM Financial. These amounts are presented in GM Financial's consolidated balance sheets and statements of income.


	December 31, 2021		December 31, 2020
Consolidated Balance Sheets(a)
Commercial finance receivables, net due from GM consolidated dealers	$	163	$	398

Subvention receivable(b)	$	282	$	642
Commercial loan funding payable	$	26	$	23


	Years Ended December 31,
	2021		2020		2019
Consolidated Statements of Income
Interest subvention earned on finance receivables	$	820	$	679	$	588
Leased vehicle subvention earned	$	2,702	$	3,042	$	3,273

(a)All balance sheet amounts are eliminated upon consolidation.

(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 $3.5 billion, $800 million and $400 million on its common stock in the years ended December 31, 2021, 2020 and 2019.

Note 6. Inventories


	December 31, 2021		December 31, 2020
Total productive material, supplies and work in process	$	8,240	$	5,117
Finished product, including service parts	4,748		5,118
Total inventories	$	12,988	$	10,235

Note 7. Operating Leases

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.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Equipment on Operating Leases

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


	December 31, 2021		December 31, 2020
Equipment on operating leases	$	47,423	$	50,000
Less: accumulated depreciation	(9,494)		(10,181)
Equipment on operating leases, net	$	37,929	$	39,819

At December 31, 2021, the estimated residual value of our leased assets at the end of the lease term was $29.1 billion.

Depreciation expense related to Equipment on operating leases, net was $6.1 billion, $7.2 billion and $7.3 billion in the years ended December 31, 2021, 2020 and 2019.

The following table summarizes lease payments due to GM Financial on leases to retail customers:


	Years Ending December 31,
	2022		2023		2024		2025		2026		Thereafter		Total
Lease receipts under operating leases	$	5,551	$	3,415	$	1,147	$	103	$	—	$	—	$	10,216

Note 8. Equity in Net Assets of Nonconsolidated Affiliates

Nonconsolidated affiliates are entities in which we maintain an equity ownership interest and for which we use the equity method of accounting due to our ability to exert significant influence over decisions relating to their operating and financial affairs. Revenue and expenses of our joint ventures are not consolidated into our financial statements; rather, our proportionate share of the earnings of each joint venture is reflected as Equity income.


	Years Ended December 31,
	2021		2020		2019
Automotive China equity income	$	1,098	$	512	$	1,132
Other joint ventures equity income	203		162		136
Total Equity income	$	1,301	$	674	$	1,268

Investments in Nonconsolidated Affiliates


	December 31, 2021		December 31, 2020
Automotive China carrying amount	$	7,156	$	6,599
Other investments carrying amount	2,521		1,807
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 $4.3 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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The following table summarizes our direct ownership interests in our China JVs:


	December 31, 2021		December 31, 2020
Automotive China JVs
SAIC General Motors Corp., Ltd. (SGM)	50	%	50	%
Pan Asia Technical Automotive Center Co., Ltd.	50	%	50	%
SAIC General Motors Sales Co., Ltd. (SGMS)	49	%	49	%
SAIC GM Wuling Automobile Co., Ltd. (SGMW)	44	%	44	%
Shanghai OnStar Telematics Co., Ltd. (Shanghai OnStar)	40	%	40	%
SAIC GM (Shenyang) Norsom Motors Co., Ltd. (SGM Norsom)	25	%	25	%
SAIC GM Dong Yue Motors Co., Ltd. (SGM DY)	25	%	25	%
SAIC GM Dong Yue Powertrain Co., Ltd. (SGM DYPT)	25	%	25	%
Other joint ventures
SAIC-GMAC Automotive Finance Company Limited (SAIC-GMAC)	35	%	35	%
SAIC-GMF Leasing Co., Ltd.	35	%	35	%

SGM is a joint venture we established with Shanghai Automotive Industry Corporation (SAIC) (50%). SGM has interests in three other joint ventures in China: SGM Norsom, SGM DY and SGM DYPT. These three joint ventures are jointly held by SGM (50%), SAIC (25%) and ourselves. These four joint ventures are engaged in the production, import and sale of a range of products under the Buick, Chevrolet and Cadillac brands. SGM also has interests in Shanghai OnStar (20%), SAIC-GMAC (20%) and SAIC-GMF Leasing Co., Ltd. (20%). Shanghai Automotive Group Finance Company Ltd., a subsidiary of SAIC, owns 45% of SAIC-GMAC. SAIC Financial Holdings Company, a subsidiary of SAIC, owns 45% of SAIC-GMF Leasing Co., Ltd.

Summarized Financial Data of Nonconsolidated Affiliates


	December 31, 2021						December 31, 2020
	Automotive China JVs		Others		Total		Automotive China JVs		Others		Total
Summarized Balance Sheet Data
Current assets	$	18,176	$	18,166	$	36,342	$	17,604	$	16,844	$	34,448
Non-current assets	13,948		10,042		23,990		14,875		8,634		23,509
Total assets	$	32,124	$	28,208	$	60,332	$	32,479	$	25,478	$	57,957

Current liabilities	$	24,320	$	17,141	$	41,461	$	25,633	$	14,808	$	40,441
Non-current liabilities	1,223		5,607		6,830		1,163		6,654		7,817
Total liabilities	$	25,543	$	22,748	$	48,291	$	26,796	$	21,462	$	48,258

Noncontrolling interests	$	867	$	—	$	867	$	824	$	1	$	825


	Years Ended December 31,
	2021		2020		2019
Summarized Operating Data
Automotive China JVs' net sales	$	42,776	$	38,736	$	39,123
Others' net sales	2,017		1,850		1,815
Total net sales	$	44,793	$	40,586	$	40,938

Automotive China JVs' net income	$	2,109	$	1,239	$	2,258
Others' net income	587		436		477
Total net income	$	2,696	$	1,675	$	2,735

GENERAL MOTORS COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Transactions with Nonconsolidated Affiliates Our nonconsolidated affiliates are involved in various aspects of the development, production and marketing of trucks, crossovers, cars and automobile parts. We enter into transactions with certain nonconsolidated affiliates to purchase and sell component parts and vehicles. The following tables summarize transactions with and balances related to our nonconsolidated affiliates:


	Years Ended December 31,
	2021		2020		2019
Automotive sales and revenue	$	227	$	235	$	199
Automotive purchases, net	$	1,551	$	165	$	1,065
Dividends received	$	783	$	1,198	$	1,852
Operating cash flows	$	(616)	$	1,473	$	913


	December 31, 2021		December 31, 2020
Accounts and notes receivable, net	$	1,004	$	954
Accounts payable	$	555	$	494
Undistributed earnings	$	2,111	$	1,594

Note 9. Property


	Estimated Useful Lives in Years	December 31, 2021		December 31, 2020
Land		$	1,301	$	1,339
Buildings and improvements	5-40	10,542		9,671
Machinery and equipment	3-27	31,444		30,013
Special tools	1-13	23,719		20,851
Construction in progress		5,395		3,581
Total property		72,401		65,455
Less: accumulated depreciation		(31,286)		(27,823)
Total property, net		$	41,115	$	37,632

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.


	Years Ended December 31,
	2021		2020		2019
Depreciation and amortization expense	$	5,829	$	5,354	$	6,541
Impairment charges	$	—	$	86	$	7


Capitalized software amortization expense(a)	$	515	$	457	$	452

(a) Included in depreciation and amortization expense.

Note 10. Goodwill and Intangible Assets

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.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)


	December 31, 2021						December 31, 2020
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Technology and intellectual property	$	764	$	555	$	209	$	762	$	542	$	220
Brands	4,296		1,550		2,746		4,300		1,444		2,856
Dealer network, customer relationships and other	966		748		218		981		737		244
Total intangible assets	$	6,026	$	2,853	$	3,173	$	6,043	$	2,723	$	3,320

Our amortization expense related to intangible assets was $141 million, $144 million and $202 million in the years ended December 31, 2021, 2020 and 2019.

Amortization expense related to intangible assets is estimated to be approximately $165 million in each of the next five years.

Note 11. Variable Interest Entities

Consolidated VIEs

Automotive Financing - GM Financial

GM Financial uses special purpose entities (SPEs) that are considered VIEs to issue variable funding notes to third party bank-sponsored warehouse facilities or asset-backed securities to investors in securitization transactions. The debt issued by these VIEs is backed by finance receivables and leasing-related assets transferred to the VIEs (Securitized Assets). GM Financial determined that it is the primary beneficiary of the SPEs because the servicing responsibilities for the Securitized Assets give GM Financial the power to direct the activities that most significantly impact the performance of the VIEs and the variable interests in the VIEs give GM Financial the obligation to absorb losses and the right to receive residual returns that could potentially be significant. The assets of the VIEs serve as the sole source of repayment for the debt issued by these entities. Investors in the notes issued by the VIEs do not have recourse to GM Financial or its other assets, with the exception of customary representation and warranty repurchase provisions and indemnities that GM Financial provides as the servicer. GM Financial is not required to provide additional financial support to these SPEs. While these subsidiaries are included in GM Financial's consolidated financial statements, they are separate legal entities and their assets are legally owned by them and are not available to GM Financial's creditors.

The following table summarizes the assets and liabilities related to GM Financial's consolidated VIEs:


	December 31, 2021		December 31, 2020
Restricted cash – current	$	2,291	$	2,190
Restricted cash – non-current	$	449	$	449
GM Financial receivables, net of fees – current	$	15,344	$	17,211
GM Financial receivables, net of fees – non-current	$	16,518	$	15,107
GM Financial equipment on operating leases, net	$	16,143	$	16,322
GM Financial short-term debt and current portion of long-term debt	$	19,876	$	20,450
GM Financial long-term debt	$	19,401	$	18,974

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.

Nonconsolidated VIEs

Automotive

Nonconsolidated VIEs principally include automotive related operating entities to which we provided financial support to ensure that our supply needs for production are met or are not disrupted. Our variable interests in these nonconsolidated VIEs include equity investments, accounts and loans receivable, committed financial support and other off-balance sheet arrangements. The carrying amounts of assets were $846 million and liabilities were insignificant related to our

GENERAL MOTORS COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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.

Note 12. Accrued and Other Liabilities


	December 31, 2021		December 31, 2020
Accrued liabilities
Dealer and customer allowances, claims and discounts	$	3,211	$	7,300
Deferred revenue	2,461		3,132
Product warranty and related liabilities	3,769		3,048
Payrolls and employee benefits excluding postemployment benefits	2,937		1,864
Other	7,919		7,725
Total accrued liabilities	$	20,297	$	23,069

Other liabilities
Deferred revenue	$	3,010	$	2,715
Product warranty and related liabilities	6,005		5,193
Operating lease liabilities	1,012		969
Employee benefits excluding postemployment benefits	622		822
Postemployment benefits including facility idling reserves	775		739
Other	3,661		3,009
Total other liabilities	$	15,085	$	13,447


	Years Ended December 31,
	2021		2020		2019
Product Warranty and Related Liabilities
Warranty balance at beginning of period	$	8,242	$	7,798	$	7,590
Warranties issued and assumed in period – recall campaigns	2,820		1,628		745
Warranties issued and assumed in period – product warranty	1,665		1,773		2,001
Payments	(3,249)		(2,986)		(3,012)
Adjustments to pre-existing warranties	315		41		455
Effect of foreign currency and other	(19)		(12)		19
Warranty balance at end of period	9,774		8,242		7,798
Less: 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.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)


	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.

Note 13. Debt

Automotive The following table presents debt in our automotive operations:


	December 31, 2021					December 31, 2020
	Carrying Amount		Fair Value			Carrying Amount		Fair Value
Secured debt	$	192	$	212		$	303	$	332
Unsecured debt(a)	16,277		19,995			16,929		20,988
Finance lease liabilities	349		362			237		256
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(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.

(c)Excludes our 364-day, $2.0 billion facility designated for exclusive use by GM Financial.

(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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

GM Financial The following table presents debt of GM Financial:


	December 31, 2021				December 31, 2020
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Secured debt	$	39,338	$	39,401	$	39,982	$	40,380
Unsecured debt	53,223		54,357		52,443		54,568
Total GM Financial debt	$	92,561	$	93,758	$	92,425	$	94,948

Fair value utilizing Level 2 inputs			$	92,250			$	92,922
Fair value utilizing Level 3 inputs			$	1,508			$	2,026

Secured debt consists of revolving credit facilities and securitization notes payable. Most of the secured debt was issued by VIEs and is repayable only from proceeds related to the underlying pledged assets. Refer to Note 11 for additional information on GM Financial's involvement with VIEs. GM Financial is required to hold certain funds in restricted cash accounts to provide additional collateral for borrowings under certain secured credit facilities. The weighted-average interest rate on secured debt was 1.27% at December 31, 2021. The revolving credit facilities have maturity dates ranging from 2022 to 2027 and securitization notes payable have maturity dates ranging from 2022 to 2034. At the end of the revolving period, if not renewed, the debt of revolving credit facilities will amortize over a defined period. In the year ended December 31, 2021, GM Financial renewed revolving credit facilities with total borrowing capacity of $25.8 billion and issued $23.3 billion in aggregate principal amount of securitization notes payable with an initial weighted average interest rate of 0.79% and maturity dates ranging from 2022 to 2034.

Unsecured debt consists of senior notes, credit facilities and other unsecured debt. Senior notes outstanding at December 31, 2021 have maturity dates ranging from 2022 to 2031 and have a weighted-average interest rate of 2.77%. 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.

Unsecured credit facilities and other unsecured debt have original maturities of up to four years. The weighted-average interest rate on these credit facilities and other unsecured debt was 2.69% at December 31, 2021.


	Years Ended December 31,
	2021		2020		2019
Automotive interest expense	$	950	$	1,098	$	782
Automotive Financing - GM Financial interest expense	2,546		3,023		3,641
Total interest expense	$	3,496	$	4,121	$	4,423

GENERAL MOTORS COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The following table summarizes contractual maturities including finance leases at December 31, 2021:


	Automotive		Automotive Financing		Total
2022	$	463	$	33,333	$	33,796
2023	2,814		20,277		23,091
2024	84		13,317		13,401
2025	2,570		8,658		11,228
2026	57		6,081		6,138
Thereafter	11,342		10,871		22,213
	$	17,330	$	92,537	$	109,867

Compliance with Debt Covenants Several of our loan facilities, including our revolving credit facilities, require compliance with certain financial and operational covenants as well as regular reporting to lenders, including providing certain subsidiary financial statements. Certain of GM Financial’s secured debt agreements also contain various covenants, including maintaining portfolio performance ratios as well as limits on deferment levels. GM Financial’s unsecured debt obligations contain covenants including limitations on GM Financial's ability to incur certain liens. Failure to meet certain of these requirements may result in a covenant violation or an event of default depending on the terms of the agreement. An event of default may allow lenders to declare amounts outstanding under these agreements immediately due and payable, to enforce their interests against collateral pledged under these agreements or restrict our ability or GM Financial's ability to obtain additional borrowings. No technical defaults or covenant violations existed at December 31, 2021.

Note 14. Derivative Financial Instruments

Automotive The following table presents the notional amounts of derivative financial instruments in our automotive operations:


	Fair Value Level	December 31, 2021		December 31, 2020
Derivatives not designated as hedges(a)
Foreign currency	2	$	4,228	$	2,195
Commodity	2	1,549		341
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)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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

GM Financial The following table presents the gross fair value amounts of GM Financial's derivative financial instruments and the associated notional amounts:


	Fair Value Level	December 31, 2021						December 31, 2020
		Notional		Fair Value of Assets		Fair Value of Liabilities		Notional		Fair Value of Assets		Fair Value of Liabilities
Derivatives designated as hedges(a)
Fair value hedges
Interest rate swaps	2	$	15,058	$	74	$	88	$	10,064	$	463	$	13
Foreign currency swaps	2	682		—		59		1,958		128		9
Cash flow hedges
Interest rate swaps	2	611		12		4		921		—		27
Foreign currency swaps	2	7,419		85		201		5,626		278		47
Derivatives not designated as hedges(a)
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

(a)The gains/losses included in our consolidated income statements and statements of comprehensive income for the years ended December 31, 2021, 2020 and 2019 were insignificant, unless otherwise noted. Amounts accrued for interest payments in a net receivable position are included in Other assets. Amounts accrued for interest payments in a net payable position are included in Other liabilities.

(b)GM Financial held $376 million and $728 million of collateral from counterparties available for netting against GM Financial's asset positions, and posted an insignificant amount of collateral to counterparties available for netting against GM Financial's liability positions at December 31, 2021 and 2020.

The fair value for Level 2 instruments was derived using the market approach based on observable market inputs including quoted prices of similar instruments and foreign exchange and interest rate forward curves.

The following amounts were recorded in the consolidated balance sheets related to items designated and qualifying as hedged items in fair value hedging relationships:


	December 31, 2021				December 31, 2020
	Carrying Amount of Hedged Items		Cumulative Amount of Fair Value Hedging Adjustments(a)		Carrying Amount of Hedged Items		Cumulative Amount of Fair Value Hedging Adjustments(a)
Short-term unsecured debt	$	1,338	$	(1)	$	4,858	$	(69)
Long-term unsecured debt	23,626		(225)		18,457		(670)
GM Financial unsecured debt	$	24,964	$	(226)	$	23,315	$	(739)

(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.

Note 15. Pensions and Other Postretirement Benefits

Employee Pension and Other Postretirement Benefit Plans

Defined Benefit Pension Plans Defined benefit pension plans covering eligible U.S. hourly employees (hired prior to October 2007) and Canadian hourly employees (hired prior to October 2016) generally provide benefits of negotiated, stated amounts for each year of service and supplemental benefits for employees who retire with 30 years of service before normal retirement age. The benefits provided by the defined benefit pension plans covering eligible U.S. (hired prior to January 1, 2001) and Canadian salaried employees and employees in certain other non-U.S. locations are generally based on years of service and compensation history. Accrual of defined pension benefits ceased in 2012 for U.S. and Canadian salaried employees. There is also an unfunded nonqualified pension plan primarily covering U.S. executives for service prior to January 1, 2007 and it is based on an “excess plan” for service after that date.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The funding policy for qualified defined benefit pension plans is to contribute annually not less than the minimum required by applicable laws and regulations or to directly pay benefit payments where appropriate. In the year ended December 31, 2021 all legal funding requirements were met. The following table summarizes contributions made to the defined benefit pension plans:


	Years Ended December 31,
	2021		2020		2019
U.S. hourly and salaried	$	67	$	68	$	83
Non-U.S.	371		396		532
Total	$	438	$	464	$	615

We expect to contribute approximately $70 million to our U.S. non-qualified plans and approximately $500 million to our non-U.S. pension plans in 2022.

Based on our current assumptions, over the next five years we expect no significant mandatory contributions to our U.S. qualified pension plans and mandatory contributions totaling $290 million to our U.K. and Canada pension plans.

Other Postretirement Benefit Plans Certain hourly and salaried defined benefit plans provide postretirement medical, dental, legal service and life insurance to eligible U.S. and Canadian retirees and their eligible dependents. Certain other non-U.S. subsidiaries have postretirement benefit plans, although most non-U.S. employees are covered by government sponsored or administered programs. We made contributions to the U.S. OPEB plans of $351 million, $343 million and $326 million in the years ended December 31, 2021, 2020 and 2019. Plan participants' contributions were insignificant in the years ended December 31, 2021, 2020 and 2019.

Defined Contribution Plans We have defined contribution plans for eligible U.S. salaried and hourly employees that provide discretionary matching contributions. Contributions are also made to certain non-U.S. defined contribution plans. We made contributions to our defined contribution plans of $606 million, $573 million and $537 million in the years ended December 31, 2021, 2020 and 2019.

Significant Plan Amendments, Benefit Modifications and Related Events

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

GENERAL MOTORS COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Pension and OPEB Obligations and Plan Assets


	Year Ended December 31, 2021							Year Ended December 31, 2020
	Pension Benefits				Global OPEB Plans			Pension Benefits					Global OPEB Plans
	U.S.		Non-U.S.				U.S.			Non-U.S.
Change in benefit obligations
Beginning benefit obligation	$	66,468	$	20,807	$	6,656		$	64,684		$	21,398	$	6,304
Service cost	187		109		18			177			133		19
Interest cost	1,074		236		123			1,716			362		173


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)
Foreign currency translation adjustments	—		(509)		4			—			870		(3)

Curtailments, settlements and other	(543)		(163)		29			(266)			(2,330)		20
Ending benefit obligation	60,208		18,314		6,124			66,468			20,807		6,656
Change in plan assets
Beginning fair value of plan assets	61,077		13,846		—			59,239			14,961		—
Actual return on plan assets	3,734		602		—			6,635			1,573		—
Employer contributions	67		371		400			68			396		387

Benefits paid	(4,414)		(1,151)		(424)			(4,600)			(1,132)		(408)
Foreign currency translation adjustments	—		10		—			—			389		—


Settlements and other	(543)		(157)		24			(265)			(2,341)		21
Ending fair value of plan assets	59,921		13,521		—			61,077			13,846		—
Ending funded status	$	(287)	$	(4,793)	$	(6,124)		$	(5,391)		$	(6,961)	$	(6,656)
Amounts recorded in the consolidated balance sheets
Non-current assets	$	1,896	$	1,440	$	—		$	—		$	980	$	—
Current liabilities	(70)		(338)		(381)			(66)			(364)		(379)
Non-current liabilities	(2,113)		(5,895)		(5,743)			(5,325)			(7,577)		(6,277)
Net amount recorded	$	(287)	$	(4,793)	$	(6,124)		$	(5,391)		$	(6,961)	$	(6,656)
Amounts recorded in Accumulated other comprehensive loss
Net actuarial loss	$	(13)	$	(3,675)	$	(1,439)		$	(3,256)		$	(5,123)	$	(1,823)
Net prior service (cost) credit	7		(54)		15			11			(60)		20
Total recorded in Accumulated other comprehensive loss	$	(6)	$	(3,729)	$	(1,424)		$	(3,245)		$	(5,183)	$	(1,803)

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The following table summarizes the total accumulated benefit obligations (ABO), the ABO and fair value of plan assets for defined benefit pension plans with ABO in excess of plan assets, and the projected benefit obligation (PBO) and fair value of plan assets for defined benefit pension plans with PBO in excess of plan assets:


	December 31, 2021				December 31, 2020
	U.S.		Non-U.S.		U.S.		Non-U.S.
ABO	$	60,188	$	18,244	$	66,448	$	20,721
Plans with ABO in excess of plan assets
ABO	$	8,396	$	6,464	$	66,448	$	12,042
Fair value of plan assets	$	6,233	$	300	$	61,077	$	4,185
Plans with PBO in excess of plan assets
PBO	$	8,415	$	6,533	$	66,468	$	12,128
Fair value of plan assets	$	6,223	$	300	$	61,077	$	4,186

The following table summarizes the components of net periodic pension and OPEB expense along with the assumptions used to determine benefit obligations:


	Year Ended December 31, 2021										Year Ended December 31, 2020										Year Ended December 31, 2019
	Pension Benefits						Global OPEB Plans				Pension Benefits							Global OPEB Plans			Pension Benefits						Global OPEB Plans
	U.S.			Non-U.S.						U.S.				Non-U.S.				U.S.			Non-U.S.
Components of expense
Service cost	$	260		$	121		$	18			$	251			$	145		$	19		$	393		$	132		$	17
Interest cost	1,074			236			123				1,716				362			173			2,264			456			220
Expected return on plan assets	(3,178)			(610)			—				(3,267)				(675)			—			(3,483)			(786)			—
Amortization of net actuarial losses	26			212			97				16				171			74			11			122			30
Curtailments, settlements and other	15			7			(6)				17				241			(8)			21			142			(23)
Net periodic pension and OPEB (income) expense	$	(1,803)		$	(34)		$	232			$	(1,267)			$	244		$	258		$	(794)		$	66		$	244
Weighted-average assumptions used to determine benefit obligations(a)
Discount rate	2.78		%	2.13		%	2.97		%		2.37		%		1.62		%	2.53		%	3.20		%	2.16		%	3.24		%
Weighted-average assumptions used to determine net expense(a)
Discount rate	1.86		%	2.38		%	2.24		%		2.84		%		2.80		%	3.00		%	3.92		%	3.36		%	4.07		%
Expected rate of return on plan assets	5.63		%	4.67		%	N/A				5.88		%		4.96		%	N/A			6.37		%	5.76		%	N/A

(a) The rate of compensation increase and the cash balance interest crediting rates do not have a significant effect on our U.S. pension and OPEB plans.

The non-service cost components of the net periodic pension and OPEB income are presented in Interest income and other non-operating income, net. Refer to Note 19 for additional information.

U.S. pension plan service cost includes administrative expenses and Pension Benefit Guarantee Corporation premiums were insignificant 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. Non-U.S. pension plan administrative expenses included in service cost were insignificant in the years ended December 31, 2021, 2020 and 2019.

In the three months ended December 31, 2020, we completed a $1.5 billion annuity purchase for salaried retirees in Canada. This resulted in a non-operating pension settlement charge of $130 million.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Assumptions

Investment Strategies and Long-Term Rate of Return Detailed periodic studies are conducted by our internal asset management group as well as outside actuaries and are used to determine the long-term strategic mix among asset classes, risk mitigation strategies and the expected long-term return on asset assumptions for the U.S. pension plans. The U.S. study includes a review of alternative asset allocation and risk mitigation strategies, anticipated future long-term performance and risk of the individual asset classes that comprise the plans' asset mix. Similar studies are performed for the significant non-U.S. pension plans with the assistance of outside actuaries and asset managers. While the studies incorporate data from recent plan performance and historical returns, the expected rate of return on plan assets represents our estimate of long-term prospective rates of return.

We continue to pursue various options to fund and de-risk our pension plans, including continued changes to the pension asset portfolio mix to reduce funded status volatility. The strategic asset mix and risk mitigation strategies for the plans are tailored specifically for each plan. Individual plans have distinct liabilities, liquidity needs and regulatory requirements. Consequently there are different investment policies set by individual plan fiduciaries. Although investment policies and risk mitigation strategies may differ among plans, each investment strategy is considered to be appropriate in the context of the specific factors affecting each plan.

In setting new strategic asset mixes, consideration is given to the likelihood that the selected asset mixes will effectively fund the projected pension plan liabilities, while aligning with the risk tolerance of the plans' fiduciaries. The strategic asset mixes for U.S. defined benefit pension plans are increasingly designed to satisfy the competing objectives of improving funded positions (market value of assets equal to or greater than the present value of the liabilities) and mitigating the possibility of a deterioration in funded status.

Derivatives may be used to provide cost effective solutions for rebalancing investment portfolios, increasing or decreasing exposure to various asset classes and for mitigating risks, primarily interest rate, equity and currency risks. Equity and fixed income managers are permitted to utilize derivatives as efficient substitutes for traditional securities. Interest rate derivatives may be used to adjust portfolio duration to align with a plan's targeted investment policy and equity derivatives may be used to protect equity positions from downside market losses. Alternative investment managers are permitted to employ leverage, including through the use of derivatives, which may alter economic exposure.

In December 2021, an investment policy study was completed for the U.S. pension plans. As a result of changes to our capital market assumptions, the weighted-average long-term rate of return on assets decreased from 5.6% at December 31, 2020 to 5.4% at December 31, 2021. The expected long-term rate of return on plan assets used in determining pension expense for non-U.S. plans is determined in a similar manner to the U.S. plans.

Target Allocation Percentages The following table summarizes the target allocations by asset category for U.S. and non-U.S. defined benefit pension plans:


	December 31, 2021				December 31, 2020
	U.S.		Non-U.S.		U.S.		Non-U.S.
Equity	9	%	14	%	12	%	16	%
Debt	68	%	69	%	64	%	66	%
Other(a)	23	%	17	%	24	%	18	%
Total	100	%	100	%	100	%	100	%

(a) Primarily includes private equity, real estate and absolute return strategies which mainly consist of hedge funds.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Assets and Fair Value Measurements The following tables summarize the fair value of U.S. and non-U.S. defined benefit pension plan assets by asset class:


	December 31, 2021								December 31, 2020
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
U.S. Pension Plan Assets


Common and preferred stocks	$	2,554	$	—	$	—	$	2,554	$	7,429	$	—	$	1	$	7,430
Government and agency debt securities(a)	—		14,924		—		14,924		—		13,231		—		13,231
Corporate and other debt securities	—		26,064		—		26,064		—		26,475		—		26,475



Other investments, net(b)(c)	421		21		246		688		(834)		(8)		427		(415)




Net plan assets subject to leveling	$	2,975	$	41,009	$	246	44,230		$	6,595	$	39,698	$	428	46,721
Plan assets measured at net asset value
Investment funds							7,304								7,534
Private equity and debt investments							4,415								3,137
Real estate investments							3,604								3,061
Total plan assets measured at net asset value							15,323								13,732
Other plan assets, net(d)							368								624
Net plan assets							$	59,921							$	61,077


	December 31, 2021								December 31, 2020
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Non-U.S. Pension Plan Assets


Common and preferred stocks	$	372	$	—	$	—	$	372	$	572	$	—	$	—	$	572
Government and agency debt securities(a)	—		3,084		—		3,084		—		3,178		—		3,178
Corporate and other debt securities	—		3,379		2		3,381		—		2,762		—		2,762



Other investments, net(b)(e)	52		(66)		116		102		31		(79)		127		79




Net plan assets subject to leveling	$	424	$	6,397	$	118	6,939		$	603	$	5,861	$	127	6,591
Plan assets measured at net asset value
Investment funds							4,963								5,870
Private equity and debt investments							593								489
Real estate investments							989								917
Total plan assets measured at net asset value							6,545								7,276
Other plan assets (liabilities), net(d)							37								(21)
Net plan assets							$	13,521							$	13,846

(a)Includes U.S. and sovereign government and agency issues.

(b)Includes net derivative assets (liabilities).

(c)Level 1 Other investments, net includes derivative liabilities approximating $1.0 billion related to equity option and futures contracts at December 31, 2020.

(d)Cash held by the plans, net of amounts receivable/payable for unsettled security transactions and payables for investment manager fees, custody fees and other expenses.

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

The activity attributable to U.S. and non-U.S. Level 3 defined benefit pension plan investments was insignificant in the years ended December 31, 2021 and 2020.

Investment Fund Strategies Investment funds include hedge funds, funds of hedge funds, equity funds and fixed income funds. Hedge funds and funds of hedge funds managers typically seek to achieve their objectives by allocating capital across a broad array of funds and/or investment managers. Equity funds invest in U.S. common and preferred stocks as well as similar equity securities issued by companies incorporated, listed or domiciled in developed and/or emerging market countries. Fixed

GENERAL MOTORS COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

income funds include investments in high quality funds and, to a lesser extent, high yield funds. High quality fixed income funds invest in government securities, investment-grade corporate bonds and mortgage and asset-backed securities. High yield fixed income funds invest in high yield fixed income securities issued by corporations which are rated below investment grade. Other investment funds also included in this category primarily represent multi-strategy funds that invest in broadly diversified portfolios of equity, fixed income and derivative instruments.

Private equity and debt investments primarily consist of investments in private equity and debt funds. These investments provide exposure to and benefit from long-term equity investments in private companies, including leveraged buy-outs, venture capital and distressed debt strategies.

Real estate investments include funds that invest in entities which are primarily engaged in the ownership, acquisition, development, financing, sale and/or management of income-producing real estate properties, both commercial and residential. These funds typically seek long-term growth of capital and current income that is above average relative to public equity funds.

Significant Concentrations of Risk The assets of the pension plans include certain investment funds, private equity and debt investments and real estate investments. Investment managers may be unable to quickly sell or redeem some or all of these investments at an amount close or equal to fair value in order to meet a plan's liquidity requirements or to respond to specific events such as deterioration in the creditworthiness of any particular issuer or counterparty.

Illiquid investments held by the plans are generally long-term investments that complement the long-term nature of pension obligations and are not used to fund benefit payments when currently due. Plan management monitors liquidity risk on an ongoing basis and has procedures in place that are designed to maintain flexibility in addressing plan-specific, broader industry and market liquidity events.

The pension plans may invest in financial instruments denominated in foreign currencies and may be exposed to risks that the foreign currency exchange rates might change in a manner that has an adverse effect on the value of the foreign currency denominated assets or liabilities. Forward currency contracts may be used to manage and mitigate foreign currency risk.

The pension plans may invest in debt securities for which any change in the relevant interest rates for particular securities might result in an investment manager being unable to secure similar returns upon the maturity or the sale of securities. In addition, changes to prevailing interest rates or changes in expectations of future interest rates might result in an increase or decrease in the fair value of the securities held. Interest rate swaps and other financial derivative instruments may be used to manage interest rate risk.

Benefit Payments Benefits for most U.S. pension plans and certain non-U.S. pension plans are paid out of plan assets rather than our Cash and cash equivalents. The following table summarizes net benefit payments expected to be paid in the future, which include assumptions related to estimated future employee service:


	Pension Benefits				Global OPEB Plans
	U.S. Plans		Non-U.S. Plans
2022	$	4,679	$	1,086	$	381
2023	$	4,443	$	1,011	$	365
2024	$	4,335	$	988	$	361
2025	$	4,226	$	972	$	357
2026	$	4,112	$	946	$	354
2027 - 2031	$	18,553	$	4,448	$	1,727

Note 16. Commitments and Contingencies

Litigation-Related Liability and Tax Administrative Matters In the normal course of our business, we are named from time to time as a defendant in various legal actions, including arbitrations, class actions and other litigation. We identify below the material individual proceedings and investigations where we believe a material loss is reasonably possible or probable. We accrue for matters when we believe that losses are probable and can be reasonably estimated. At December 31, 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

GENERAL MOTORS COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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 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 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. We estimate the reasonably possible loss in excess of amounts accrued for other current subcontract workers who may assert similar claims to be approximately $111 million at December 31, 2021. 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 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; employment-related matters; product and workplace safety, vehicle emissions and fuel economy regulations; product warranties; financial services; dealer, supplier and other contractual relationships; government regulations relating to competition issues; tax-related matters not subject to the provision of Accounting Standards Codification 740, Income Taxes (indirect tax-related matters); product design, manufacture and performance; consumer protection laws; and environmental protection laws, including laws regulating air emissions, water discharges, waste management and environmental remediation from stationary sources.

There are several putative class actions pending against GM in federal courts in the U.S. and in the Provincial Courts in Canada alleging that various vehicles sold, including model year 2011-2016 Duramax Diesel Chevrolet Silverado and GMC Sierra vehicles, violate federal, state and foreign emission standards. We are unable to estimate any reasonably possible loss or range of loss that may result from these actions. GM has also faced a series of additional lawsuits in the U.S. based on these allegations, including 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. It is possible that the resolution of one or more of these matters could exceed the amounts accrued in an amount that could be material to our results of operations. We also from time to time receive subpoenas and other inquiries or requests for information from agencies or other representatives of U.S. federal, state and foreign governments on a variety of issues. 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

GENERAL MOTORS COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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, 2021. 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 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 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 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. 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.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

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. 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. These guarantees terminate in years ranging from 2022 to 2026 or upon the occurrence of specific events or are ongoing. We believe that the related potential costs incurred are adequately covered by our recorded accruals, which are insignificant. The maximum future undiscounted payments mainly based on vehicles sold to date were $3.1 billion 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. In some instances certain assets of the party or our payables to the party whose debt or performance we have guaranteed may offset, to some degree, the amount of any potential future payments. We are also exposed to residual value guarantees associated with certain sales to rental car companies.

We periodically enter into agreements that incorporate indemnification provisions in the normal course of business. It is not possible to estimate our maximum exposure under these indemnifications or guarantees due to the conditional nature of these obligations. Insignificant amounts have been recorded for such obligations as the majority of them are not probable or estimable at this time and the fair value of the guarantees at issuance was insignificant. Refer to 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. At December 31, 2021 and 2020, our redemption liability was insignificant, our deferred revenue was $309 million and $252 million, and qualified cardholders had rebates available, net of deferred program revenue, of $1.2 billion and $1.3 billion. Our redemption liability and deferred revenue are recorded in Accrued liabilities and Other liabilities.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Note 17. Income Taxes


	Years Ended December 31,
	2021		2020		2019
U.S. income	$	9,513	$	6,881	$	3,826
Non-U.S. income	1,902		540		2,342
Income before income taxes and equity income	$	11,415	$	7,421	$	6,168


	Years Ended December 31,
	2021		2020		2019
Current income tax expense
U.S. federal	$	20	$	84	$	42
U.S. state and local	142		272		102
Non-U.S.	395		493		758
Total current income tax expense	557		849		902
Deferred income tax expense (benefit)
U.S. federal	1,699		632		(145)
U.S. state and local	229		(15)		3
Non-U.S.	286		308		9
Total deferred income tax expense (benefit)	2,214		925		(133)
Total income tax expense	$	2,771	$	1,774	$	769

Provisions are made for estimated U.S. and non-U.S. income taxes which may be incurred on the reversal of our basis differences in investments in foreign subsidiaries and corporate joint ventures not deemed to be indefinitely reinvested. Taxes have not been provided on basis differences in investments primarily as a result of earnings in foreign subsidiaries which are deemed indefinitely reinvested of $3.2 billion at December 31, 2021 and 2020. 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.


	Years Ended December 31,
	2021		2020		2019
Income tax expense at U.S. federal statutory income tax rate	$	2,397	$	1,558	$	1,295
State and local tax expense	301		219		117
Non-U.S. income taxed at other than the U.S. federal statutory tax rate	36		(1)		166
U.S. tax impact on Non-U.S. income and activities	129		(160)		(197)
Change in valuation allowances	665		370		(233)
Change in tax laws	(93)		—		(122)
General business credits and manufacturing incentives	(492)		(366)		(420)

Settlements of prior year tax matters	11		(18)		—
Realization of basis differences in affiliates	(295)		(12)		—
Foreign currency remeasurement	28		(7)		74
Other adjustments	84		191		89
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. The following table summarizes the components of temporary differences and carryforwards that give rise to deferred tax assets and liabilities:


	December 31, 2021		December 31, 2020
Deferred tax assets
Postretirement benefits other than pensions	$	1,572	$	1,742
Pension and other employee benefit plans	1,540		2,999
Warranties, dealer and customer allowances, claims and discounts	4,253		5,538

U.S. capitalized research expenditures	7,285		6,763
U.S. operating loss and tax credit carryforwards(a)	6,959		7,254
Non-U.S. operating loss and tax credit carryforwards(b)	6,593		7,216
Miscellaneous	3,468		3,479
Total deferred tax assets before valuation allowances	31,670		34,991
Less: valuation allowances	(8,855)		(9,095)
Total deferred tax assets	22,815		25,896
Deferred tax liabilities
Property, plant and equipment	1,775		1,670
Intangible assets	729		744
Total deferred tax liabilities	2,504		2,414
Net deferred tax assets	$	20,311	$	23,482

(a) At December 31, 2021, U.S. operating loss and tax credit carryforwards of $6.5 billion expire by 2041 if not utilized and the remaining balance of $450 million may be carried forward indefinitely.

(b) At December 31, 2021, Non-U.S. 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.

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:


	Years Ended December 31,
	2021		2020		2019
Balance at beginning of period	$	1,086	$	775	$	1,341
Additions to current year tax positions	22		435		18
Additions to prior years' tax positions	46		26		13
Reductions to prior years' tax positions	(473)		(132)		(501)
Reductions in tax positions due to lapse of statutory limitations	(17)		(3)		(8)
Settlements	(26)		(10)		(93)
Other	(4)		(5)		5
Balance at end of period	$	634	$	1,086	$	775

At December 31, 2021 and 2020 there were $411 million and $851 million of unrecognized tax benefits that if recognized would favorably affect our effective tax rate in the future. In the years ended December 31, 2021, 2020 and 2019 income tax related interest and penalties were insignificant. 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.

Other Matters Income tax returns are filed in multiple jurisdictions and are subject to examination by taxing authorities throughout the world. We have open tax years from 2011 to 2021 with various significant tax jurisdictions. Tax authorities may have the ability to review and adjust net operating loss or tax credit carryforwards that were generated prior to these periods if utilized in an open tax year. These open years contain matters that could be subject to differing interpretations of applicable tax laws and regulations as they relate to the amount, character, timing or inclusion of revenue and expenses or the sustainability of income tax credits for a given audit cycle.

Note 18. Restructuring and Other Initiatives

We have executed various restructuring and other initiatives and we may execute additional initiatives in the future, if necessary, to streamline manufacturing capacity and reduce other costs to improve the utilization of remaining facilities. To the extent these programs involve voluntary separations, a liability is generally recorded at the time offers to employees are accepted. To the extent these programs provide separation benefits in accordance with pre-existing agreements, a liability is recorded once the amount is probable and reasonably estimable. If employees are involuntarily terminated, a liability is generally recorded at the communication date. Related charges are recorded in Automotive and other cost of sales and Automotive and other selling, general and administrative expense.

The following table summarizes the reserves and charges related to restructuring and other initiatives, including postemployment benefit reserves and charges:


	Years Ended December 31,
	2021		2020		2019
Balance at beginning of period	$	352	$	564	$	1,122
Additions, interest accretion and other	216		565		629
Payments	(278)		(678)		(1,101)
Revisions to estimates and effect of foreign currency	(5)		(99)		(86)
Balance at end of period	$	285	$	352	$	564

In the year ended December 31, 2020, restructuring and other initiatives primarily included actions in GMI related to the wind-down of Holden sales, design and engineering operations in Australia and New Zealand, the sale of our vehicle and powertrain manufacturing facilities in Thailand and the execution of a binding term sheet to sell our manufacturing facility in India. We recorded charges of $683 million in the year ended December 31, 2020, primarily consisting of $360 million in dealer restructurings, employee separations and supplier claim charges, which are reflected in the table above, and $323 million in property and intangible asset impairments, inventory provisions, sales allowances and other charges, not reflected in the table above. We also recorded a $236 million charge to Income tax expense due to the establishment of a valuation allowance against deferred tax assets in Australia and New Zealand in the year ended December 31, 2020. We incurred $197 million in net cash outflows 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.

In the year ended December 31, 2019, restructuring and other initiatives primarily included actions related to our announced transformation activities, which include unallocation of products to certain manufacturing facilities and other employee separation programs. We recorded charges of $1.8 billion, primarily in GMNA, in the year ended December 31, 2019 consisting of $1.3 billion primarily in non-cash accelerated depreciation and pension curtailment and other charges, not reflected in the table above, and $535 million primarily in supplier-related charges and employee-related separation charges, which are reflected in the table above. These programs have a total cost since inception of $3.1 billion and were complete at December 31, 2019. We incurred $333 million and $1.1 billion in cash outflows resulting from these restructuring actions, primarily for employee separation payments and supplier-related payments in the years ended December 31, 2020 and 2019. The cash outflows were substantially complete at December 31, 2020.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Note 19. Interest Income and Other Non-Operating Income


	Years Ended December 31,
	2021		2020		2019
Non-service pension and OPEB income	$	1,909	$	1,095	$	797
Interest income	146		241		429
Licensing agreements income	195		211		165
Revaluation of investments	571		265		80
Other	220		73		(2)
Total interest income and other non-operating income, net	$	3,041	$	1,885	$	1,469

Note 20. Stockholders’ Equity and Noncontrolling Interests

Preferred and Common Stock We have 2.0 billion shares of preferred stock and 5.0 billion shares of common stock authorized for issuance. 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. 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 not 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)

In 2019, Cruise Holdings issued $1.2 billion of Cruise Class F Preferred Shares, including $687 million to General Motors Holdings LLC. All proceeds related to the Cruise Class F Preferred Shares are designated exclusively for working capital and general corporate purposes of Cruise. The Cruise Class F Preferred Shares participate pari passu with holders of Cruise Holdings common stock in any dividends declared. The Cruise Class F Preferred Shares have the right to vote on the election of one director, who is elected by the vote of a majority of the Cruise Holdings common stock and the Cruise Class F Preferred Shares. Prior to an 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.

GM Financial Preferred Stock In 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, 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 comprehensive loss:


	Years Ended December 31,
	2021		2020		2019
Foreign Currency Translation Adjustments
Balance at beginning of period	$	(2,735)	$	(2,278)	$	(2,250)
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)
Defined Benefit Plans
Balance at beginning of period	$	(10,654)	$	(8,859)	$	(6,737)
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 were 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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Note 21. Earnings Per Share

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,
	2021		2020		2019
Basic earnings per share
Net income attributable to stockholders	$	10,019	$	6,427	$	6,732
Less: cumulative dividends on subsidiary preferred stock	(182)		(180)		(151)


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	$	6.78	$	4.36	$	4.62
Diluted earnings per share


Net income attributable to common stockholders – diluted	$	9,837	$	6,247	$	6,581

Weighted-average common shares outstanding – basic	1,451		1,433		1,424
Dilutive effect of warrants and awards under stock incentive plans	17		9		15
Weighted-average common shares outstanding – diluted	1,468		1,442		1,439



Diluted earnings per common share	$	6.70	$	4.33	$	4.57

Potentially dilutive securities(a)	2		7		7

(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.

Note 22. 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 LTIP and prior to the 2020 LTIP, under our 2017 and 2014 LTIP. The 2020 LTIP was approved by stockholders in June 2020. Any new awards granted after the approval of the 2020 LTIP in June 2020 will be issued under the 2020 LTIP. To the extent any shares remain available for issuance under the 2017 LTIP, the 2016 Equity Incentive Plan, and/or the 2014 LTIP, such shares will only be used to settle outstanding awards that were previously granted under such plans prior to June 2020. Shares awarded under the plans are subject to forfeiture if the participant leaves the company for reasons other than those permitted under the plans such as retirement, death or disability.

RSU awards granted either cliff vest or ratably vest generally over a three-year service period, as defined in the terms of each award. PSU awards vest at the end of a three-year performance period, based on performance criteria determined by the Executive Compensation Committee of the Board of Directors at the time of award. The number of shares earned may equal, exceed or be less than the targeted number of shares depending on whether the performance criteria are met, surpassed or not met. Stock options expire 10 years from the grant date. Our performance-based stock options vest ratably over 55 months based on the performance of our common stock relative to that of a specified peer group. Our service-based stock options vest ratably over 19 months to three years.

In connection with our acquisition of Cruise Automation, Inc. in May 2016, RSAs and PSUs in common shares of GM were granted to employees of Cruise Holdings. The RSAs vest ratably, generally over a three-year service period. The PSUs are contingent upon achievement of specific technology and commercialization milestones.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)


	Shares (in millions)	Weighted-Average Grant Date Fair Value		Weighted-Average Remaining Contractual Term in Years
Units outstanding at January 1, 2021	38.6	$	19.84	0.9
Granted	6.1	$	50.43
Settled	(13.7)	$	19.13
Forfeited or expired	(0.8)	$	38.77
Units outstanding at December 31, 2021(a)	30.2	$	26.14	0.8

(a) Includes the target amount of PSUs.

Our weighted-average assumptions used to value our stock options are a dividend yield of 1.67%, 4.25% and 3.90%, expected volatility of 47.8%, 26.2% and 28.0%, a risk-free interest rate of 0.76%, 1.44% and 2.62%, and an expected option life of 6.00, 5.97 and 6.00 years for options issued during the years ended December 31, 2021, 2020 and 2019. The expected volatility is based on the average of the implied volatility of publicly traded options for our common stock.

Total compensation expense related to the above awards was $391 million, $351 million and $456 million in the years ended December 31, 2021, 2020 and 2019.

At December 31, 2021, the total unrecognized compensation expense for nonvested equity awards granted was $235 million. This expense is expected to be recorded over a weighted-average period of 1.1 years. The total fair value of stock incentive awards vested was $258 million, $275 million and $287 million in the years ended December 31, 2021, 2020 and 2019.

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. 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. Shares awarded under the plan are subject to forfeiture if the participant leaves the company for reasons other than those permitted under the plan. Stock options vest ratably over four to 10 years, as defined in the terms of each award. Stock options expire 10 years from the grant date. RSU awards granted vest upon the satisfaction of both a service condition and a liquidity condition. The service condition for the majority of these awards is satisfied over four years. The liquidity condition is satisfied upon the earlier of the date of a change in control transaction or the consummation of an initial public offering.

Total compensation expense related to Cruise Holdings’ share-based awards was insignificant for the years ended December 31, 2021, 2020 and 2019. 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. The expense related to stock options is expected to be recorded over a weighted-average period of 5.4 years. The timing of the expense related to RSUs will depend upon the date of the satisfaction of the liquidity condition.

Note 23. Segment Reporting

We analyze the results of our business through the following reportable segments: GMNA, GMI, Cruise and GM Financial. The chief operating decision-maker evaluates the operating results and performance of our automotive segments and Cruise through EBIT-adjusted, which is presented net of noncontrolling interests. The chief operating decision-maker evaluates GM Financial through EBT-adjusted because interest income and interest expense are part of operating results when assessing and measuring the operational and financial performance of the segment. Each segment has a manager responsible for executing our strategic initiatives. While not all vehicles within a segment are individually profitable on a fully allocated cost basis, those vehicles attract customers to dealer showrooms and help maintain sales volumes for other, more profitable vehicles and

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. In addition to the products sold to dealers for consumer retail sales, trucks, crossovers and cars are also sold to fleet customers, including daily rental car companies, commercial fleet customers, leasing companies and governments. Fleet sales are completed through the dealer network and in some cases directly with fleet customers. Retail and fleet customers can obtain a wide range of after-sale vehicle services and products through the dealer network, such as maintenance, light repairs, collision repairs, vehicle accessories and extended service warranties.

GMNA meets the demands of customers in North America 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 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, Stellantis warrants and intersegment balances. All intersegment balances and transactions have been eliminated in consolidation.

The following tables summarize key financial information by segment:


	At and For the Year Ended December 31, 2021
	GMNA		GMI		Corporate		Eliminations		Total Automotive		Cruise		GM Financial		Eliminations/Reclassifications		Total
Net sales and revenue	$	101,308	$	12,172	$	104			$	113,584	$	106	$	13,419	$	(105)	$	127,004
Earnings (loss) before interest and taxes-adjusted	$	10,318	$	827	$	(680)			$	10,465	$	(1,196)	$	5,036	$	(10)	$	14,295
Adjustments(a)	$	(425)	$	(276)	$	—			$	(701)	$	—	$	—	$	—	(701)
Automotive interest income																	146
Automotive interest expense																	(950)
Net (loss) attributable to noncontrolling interests																	(74)
Income before income taxes																	12,716
Income tax expense																	(2,771)
Net income																	9,945

Net loss attributable to noncontrolling interests																	74
Net income attributable to stockholders																	$	10,019
Equity in net assets of nonconsolidated affiliates	$	827	$	7,133	$	—	$	—	$	7,960	$	—	$	1,717	$	—	$	9,677
Goodwill and intangibles	$	2,240	$	772	$	—	$	—	$	3,012	$	736	$	1,339	$	—	$	5,087
Total assets	$	121,735	$	22,876	$	40,492	$	(56,936)	$	128,167	$	4,489	$	113,207	$	(1,145)	$	244,718
Expenditures for property	$	6,576	$	783	$	30	$	—	$	7,389	$	89	$	26	$	5	$	7,509
Depreciation and amortization	$	5,298	$	542	$	21	$	—	$	5,861	$	52	$	6,134	$	—	$	12,047
Impairment charges	$	—	$	—	$	—	$	—	$	—	$	4	$	—	$	—	$	4
Equity income	$	8	$	1,092	$	—	$	—	$	1,100	$	—	$	201	$	—	$	1,301

(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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)


	At and For the Year Ended December 31, 2020
	GMNA		GMI		Corporate		Eliminations		Total Automotive		Cruise		GM Financial		Eliminations/Reclassifications		Total
Net sales and revenue	$	96,733	$	11,586	$	350			$	108,669	$	103	$	13,831	$	(118)	$	122,485
Earnings (loss) before interest and taxes-adjusted	$	9,071	$	(528)	$	(634)			$	7,909	$	(887)	$	2,702	$	(14)	$	9,710
Adjustments(a)	$	(99)	$	(683)	$	130			$	(652)	$	—	$	—	$	—	(652)
Automotive interest income																	241
Automotive interest expense																	(1,098)
Net (loss) attributable to noncontrolling interests																	(106)
Income before income taxes																	8,095
Income tax expense																	(1,774)
Net income																	6,321

Net loss attributable to noncontrolling interests																	106
Net income attributable to stockholders																	$	6,427
Equity in net assets of nonconsolidated affiliates	$	242	$	6,583	$	—	$	—	$	6,825	$	—	$	1,581	$	—	$	8,406
Goodwill and intangibles	$	2,346	$	806	$	—	$	—	$	3,152	$	735	$	1,343	$	—	$	5,230
Total assets	$	114,137	$	23,019	$	39,933	$	(57,464)	$	119,625	$	3,625	$	113,410	$	(1,466)	$	235,194
Expenditures for property	$	4,501	$	729	$	21	$	—	$	5,251	$	15	$	34	$	—	$	5,300
Depreciation and amortization	$	4,739	$	624	$	25	$	—	$	5,388	$	43	$	7,245	$	—	$	12,676
Impairment charges	$	20	$	99	$	—	$	—	$	119	$	20	$	—	$	—	$	139
Equity income	$	17	$	510	$	—	$	—	$	527	$	—	$	147	$	—	$	674

(a) Consists of restructuring charges related to Cadillac dealer strategy in GMNA; restructuring and other charges primarily in Australia, New Zealand, Thailand and India in GMI; and ignition switch-related legal matters in Corporate.


	At and For the Year Ended December 31, 2019
	GMNA		GMI		Corporate		Eliminations		Total Automotive		Cruise		GM Financial		Eliminations		Total
Net sales and revenue	$	106,366	$	16,111	$	220			$	122,697	$	100	$	14,554	$	(114)	$	137,237
Earnings (loss) before interest and taxes-adjusted	$	8,204	$	(202)	$	(691)			$	7,311	$	(1,004)	$	2,104	$	(18)	$	8,393
Adjustments(a)	$	(1,618)	$	1,081	$	(2)			$	(539)	$	—	$	—	$	—	(539)
Automotive interest income																	429
Automotive interest expense																	(782)
Net (loss) attributable to noncontrolling interests																	(65)
Income before income taxes																	7,436
Income tax expense																	(769)
Net income																	6,667

Net loss attributable to noncontrolling interests																	65
Net income attributable to stockholders																	$	6,732
Equity in net assets of nonconsolidated affiliates	$	84	$	7,023	$	—	$	—	$	7,107	$	—	$	1,455	$	—	$	8,562
Goodwill and intangibles	$	2,459	$	888	$	1	$	—	$	3,348	$	634	$	1,355	$	—	$	5,337
Total assets	$	109,290	$	24,969	$	32,365	$	(50,244)	$	116,380	$	4,230	$	108,881	$	(1,454)	$	228,037
Expenditures for property	$	6,305	$	1,096	$	84	$	—	$	7,485	$	60	$	47	$	—	$	7,592
Depreciation and amortization	$	6,112	$	533	$	46	$	(2)	$	6,689	$	21	$	7,350	$	—	$	14,060
Impairment charges	$	15	$	7	$	—	$	—	$	22	$	36	$	—	$	—	$	58
Equity income (loss)	$	8	$	1,123	$	(29)	$	—	$	1,102	$	—	$	166	$	—	$	1,268

(a) Consists of restructuring and other charges related to transformation activities of $1.6 billion in GMNA and $115 million in GMI; a benefit 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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Automotive revenue is attributed to geographic areas based on the country of sale. GM Financial revenue is attributed to the geographic area where the financing is originated. The following table summarizes information concerning principal geographic areas:


	At and For the Years Ended December 31,
	2021				2020				2019
	Net Sales and Revenue		Long-Lived Assets		Net Sales and Revenue		Long-Lived Assets		Net Sales and Revenue		Long-Lived Assets
Automotive
U.S.	$	92,771	$	27,192	$	89,204	$	24,932	$	97,887	$	25,401
Non-U.S.	20,819		13,771		19,469		12,516		24,810		13,190
GM Financial
U.S.	11,712		34,452		12,227		36,773		12,727		39,509
Non-U.S.	1,702		3,629		1,585		3,230		1,813		2,772
Total consolidated	$	127,004	$	79,044	$	122,485	$	77,451	$	137,237	$	80,872

No individual country other than the U.S. 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.

Note 24. Supplemental Information for the Consolidated Statements of Cash Flows

The following table summarizes the sources (uses) of cash provided by Change in other operating assets and liabilities and Cash paid for income taxes and interest:


Change in other operating assets and liabilities	Years Ended December 31,
2021			2020			2019
Accounts receivable	$	493		$	(1,341)		$	(563)
Wholesale receivables funded by GM Financial, net	2,854			2,744			663
Inventories	(3,155)			(104)			(761)
Automotive equipment on operating leases	—			53			274
Change in other assets	(1,418)			68			(1,550)
Accounts payable	(1,166)			42			(492)
Income taxes payable	(95)			130			213
Accrued and other liabilities	(879)			(1,991)			(1,573)
Total	$	(3,366)		$	(399)		$	(3,789)

Cash paid for income taxes and interest
Cash paid for income taxes, net	$	652		$	719		$	689
Cash paid for interest (net of amounts capitalized) – Automotive	$	884		$	1,011		$	739
Cash paid for interest (net of amounts capitalized) – GM Financial	2,519			2,947			3,475
Total cash paid for interest (net of amounts capitalized)	$	3,403		$	3,958		$	4,214

GENERAL MOTORS COMPANY AND SUBSIDIARIES

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