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 156 million and 276 million shares of Series A Preferred Stock issued and outstanding at December 31, 2013 and 2012. There were no shares of Series B Preferred Stock issued and outstanding at December 31, 2013 and 100 million shares issued and outstanding at December 31, 2012. We had 1.5 billion and 1.4 billion shares of common stock issued and outstanding at December 31, 2013 and 2012.
Preferred Stock
The following table summarizes significant features relating to our preferred stock (dollars in millions, except for per share amounts):
|
| | | | | | | | | | | | | | | | | | |
| Liquidation Preference Per Share | | Dividend Rate Per Annum | | Dividends Paid |
Years Ended December 31, |
2013 | | 2012 | | 2011 |
Series A Preferred Stock | $ | 25.00 |
| | 9.00 | % | | $ | 1,370 |
| | $ | 621 |
| | $ | 621 |
|
Series B Preferred Stock | $ | 50.00 |
| | 4.75 | % | | $ | 237 |
| | $ | 238 |
| | $ | 243 |
|
Series A Preferred Stock
The Series A Preferred Stock ranks senior with respect to liquidation preference and dividend rights to our common stock and Series B Preferred Stock and any other class or series of stock that we may issue. In the event of any voluntary or involuntary liquidation, dissolution or winding-up of our affairs, a holder of Series A Preferred Stock will be entitled to be paid, before any distribution or payment may be made to any holders of common stock or other series of stock, the liquidation amount and the amount of any accrued and unpaid dividends, if any, whether or not declared, prior to such distribution or payment date. On or after December 31, 2014, the Series A Preferred Stock may be redeemed, in whole or in part, for cash at a price per share equal to the $25.00 per share liquidation amount, plus any accrued and unpaid dividends. Upon a redemption or purchase of any or all Series A Preferred Stock, the difference, if any, between the recorded amount of the Series A Preferred Stock being redeemed or purchased and the consideration paid would be recorded as a charge to Net income attributable to common stockholders.
In September 2013 we purchased 120 million shares (or 43.5% of the total shares outstanding) of our Series A Preferred Stock held by the New VEBA at a price equal to 108.1% of the aggregate liquidation amount for $3.2 billion. We recorded a loss for the difference between the carrying amount of the Series A Preferred Stock purchased and the consideration paid, which reduced Net income attributable to common stockholders by $816 million. If all of the remaining Series A Preferred Stock were redeemed or purchased at its par value, Net income available to common stockholders would be reduced by a charge of $800 million.
Series B Preferred Stock
On December 1, 2013 each of the 100 million shares of our Series B Preferred Stock outstanding automatically converted into 1.3736 shares of our common stock for a total of 137 million common shares. The number of shares of our common stock issued upon mandatory conversion of each share of Series B Preferred Stock was determined based on the average of the closing prices of our common stock over the 40 consecutive trading day period ended November 26, 2013.
Common Stock
Holders of our common stock are entitled to dividends at the sole discretion of our Board of Directors. However, the terms of the Series A Preferred Stock prohibit, subject to exceptions, the payment of dividends on our common stock unless all accrued and unpaid dividends on the Series A Preferred Stock are paid in full. 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 Series A Preferred Stock, if any such shares are then outstanding.
In December 2012 we purchased 200 million shares of our common stock from the UST at a price of $27.50 per share for a total of $5.5 billion. The purchase price represented a premium to the prior day's closing price of $25.49. We allocated the purchase price between a direct reduction to shareholder's equity of $5.1 billion and a charge to Automotive selling, general and administrative expense of $402 million representing the premium. These shares were retired and returned to authorized but unissued status. In the year ended December 31, 2012 we issued 1.3 million shares of common stock for the settlement of restricted stock and salary stock awards and 400,000 shares for exercised warrants. Refer to Note 23 for additional information on our stock incentive plans.
Warrants
In connection with the 363 Sale we issued two tranches of warrants, each to acquire 136 million shares of common stock, to MLC which have all been distributed to creditors of Old GM and to the GUC Trust by MLC and one tranche of warrants to acquire 46 million shares of common stock to the New VEBA. The first tranche of MLC warrants is exercisable at any time prior to July 10, 2016 at an exercise price of $10.00 per share and the second tranche of MLC warrants is exercisable at any time prior to July 10, 2019 at an exercise price of $18.33 per share. The New VEBA warrants, which were subsequently sold by the New VEBA, are exercisable at any time prior to December 31, 2015 at an exercise price of $42.31 per share. Upon exercise of the warrants, the shares issued will be included in the number of basic shares outstanding used in the computation of earnings per share. The number of shares of common stock underlying each of the warrants and the per share exercise price are subject to adjustment as a result of certain events, including stock splits, reverse stock splits and stock dividends. The outstanding balance of warrants was 293 million and 313 million at December 31, 2013 and 2012.
Accumulated Other Comprehensive Loss
The following table summarizes the components of Accumulated other comprehensive loss (dollars in millions):
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Years Ended December 31, |
| 2013 | | 2012 | | 2011 |
| Pre-tax Amount | | Tax Expense (Benefit) | | Net Amount | | Pre-tax Amount | | Tax Expense(Benefit) | | Net Amount | | Pre-tax Amount | | Tax Expense (Benefit) | | Net Amount |
Foreign currency translation adjustments | | | | | | | | | | | | | | | | | |
Balance at beginning of period | $ | 112 |
| | $ | 11 |
| | $ | 101 |
| | $ | 226 |
| | $ | 11 |
| | $ | 215 |
| | $ | 405 |
| | $ | 11 |
| | $ | 394 |
|
Other comprehensive income (loss) | (722 | ) | | 11 |
| | (733 | ) | | (103 | ) | | — |
| | (103 | ) | | (183 | ) | | — |
| | (183 | ) |
Purchase of noncontrolling interest shares | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | (6 | ) | | — |
| | (6 | ) |
Other comprehensive income (loss) attributable to noncontrolling interests | 18 |
| | — |
| | 18 |
| | (11 | ) | | — |
| | (11 | ) | | 10 |
| | — |
| | 10 |
|
Balance at end of period | $ | (592 | ) | | $ | 22 |
| | $ | (614 | ) | | $ | 112 |
| | $ | 11 |
| | $ | 101 |
| | $ | 226 |
| | $ | 11 |
| | $ | 215 |
|
Cash flow hedging gains (losses), net | | | | | | | | | | | | | | | | | |
Balance at beginning of period | $ | — |
| | $ | — |
| | $ | — |
| | $ | 2 |
| | $ | — |
| | $ | 2 |
| | $ | (23 | ) | | $ | — |
| | $ | (23 | ) |
Other comprehensive income before reclassification adjustment | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 25 |
| | — |
| | 25 |
|
Reclassification adjustment | — |
| | — |
| | — |
| | (2 | ) | | — |
| | (2 | ) | | — |
| | — |
| | — |
|
Other comprehensive income (loss) | — |
| | — |
| | — |
| | (2 | ) | | — |
| | (2 | ) | | 25 |
| | — |
| | 25 |
|
Balance at end of period | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 2 |
| | $ | — |
| | $ | 2 |
|
Unrealized gain (loss) on securities, net | | | | | | | | | | | | | | | | | |
Balance at beginning of period | $ | 63 |
| | $ | 22 |
| | $ | 41 |
| | $ | 1 |
| | $ | 5 |
| | $ | (4 | ) | | $ | — |
| | $ | 5 |
| | $ | (5 | ) |
Other comprehensive income (loss) before reclassification adjustment | 133 |
| | (6 | ) | | 139 |
| | (140 | ) | | 22 |
| | (162 | ) | | 1 |
| | — |
| | 1 |
|
Reclassification adjustment | (185 | ) | | (7 | ) | | (178 | ) | | 202 |
| | (5 | ) | | 207 |
| | — |
| | — |
| | — |
|
Other comprehensive income (loss) | (52 | ) | | (13 | ) | | (39 | ) | | 62 |
| | 17 |
| | 45 |
| | 1 |
| | — |
| | 1 |
|
Balance at end of period | $ | 11 |
| | $ | 9 |
| | $ | 2 |
| | $ | 63 |
| | $ | 22 |
| | $ | 41 |
| | $ | 1 |
| | $ | 5 |
| | $ | (4 | ) |
Defined benefit plans, net | | | | | | | | | | | | | | | | | |
Balance at beginning of period | $ | (7,794 | ) | | $ | 400 |
| | $ | (8,194 | ) | | $ | (4,665 | ) | | $ | 1,409 |
| | $ | (6,074 | ) | | $ | 2,298 |
| | $ | 1,413 |
| | $ | 885 |
|
Other comprehensive income before reclassification adjustment - prior service cost (credit) | 6 |
| | (4 | ) | | 10 |
| | (53 | ) | | (95 | ) | | 42 |
| | 302 |
| | 1 |
| | 301 |
|
Other comprehensive income (loss) before reclassification adjustment - actuarial gain (loss) | 8,673 |
| | 3,091 |
| | 5,582 |
| | (3,180 | ) | | (926 | ) | | (2,254 | ) | | (7,578 | ) | | (10 | ) | | (7,568 | ) |
Reclassification adjustment - prior service cost (credit)(a) | (128 | ) | | (44 | ) | | (84 | ) | | (125 | ) | | (5 | ) | | (120 | ) | | (52 | ) | | — |
| | (52 | ) |
Reclassification adjustment - actuarial gain (loss)(a) | 178 |
| | (7 | ) | | 185 |
| | 229 |
| | 17 |
| | 212 |
| | 366 |
| | 5 |
| | 361 |
|
Other comprehensive income (loss) | 8,729 |
| | 3,036 |
| | 5,693 |
| | (3,129 | ) | | (1,009 | ) | | (2,120 | ) | | (6,962 | ) | | (4 | ) | | (6,958 | ) |
Purchase of noncontrolling interest shares | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | (1 | ) | | — |
| | (1 | ) |
Balance at end of period | $ | 935 |
| | $ | 3,436 |
| | $ | (2,501 | ) | | $ | (7,794 | ) | | $ | 400 |
| | $ | (8,194 | ) | | $ | (4,665 | ) | | $ | 1,409 |
| | $ | (6,074 | ) |
Accumulated Other Comprehensive Loss | | | | | | | | | | | | | | | | | |
Balance at beginning of period | $ | (7,619 | ) | | $ | 433 |
| | $ | (8,052 | ) | | $ | (4,436 | ) | | $ | 1,425 |
| | $ | (5,861 | ) | | $ | 2,680 |
| | $ | 1,429 |
| | $ | 1,251 |
|
Other comprehensive income (loss) before reclassification adjustment | 8,090 |
| | 3,092 |
| | 4,998 |
| | (3,476 | ) | | (999 | ) | | (2,477 | ) | | (7,433 | ) | | (9 | ) | | (7,424 | ) |
Reclassification adjustment | (135 | ) | | (58 | ) | | (77 | ) | | 304 |
| | 7 |
| | 297 |
| | 314 |
| | 5 |
| | 309 |
|
Other comprehensive income (loss) | 7,955 |
| | 3,034 |
| | 4,921 |
| | (3,172 | ) | | (992 | ) | | (2,180 | ) | | (7,119 | ) | | (4 | ) | | (7,115 | ) |
Purchase of noncontrolling interest shares | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | (7 | ) | | — |
| | (7 | ) |
Other comprehensive income (loss) attributable to noncontrolling interests | 18 |
| | — |
| | 18 |
| | (11 | ) | | — |
| | (11 | ) | | 10 |
| | — |
| | 10 |
|
Balance at end of period | $ | 354 |
| | $ | 3,467 |
| | $ | (3,113 | ) | | $ | (7,619 | ) | | $ | 433 |
| | $ | (8,052 | ) | | $ | (4,436 | ) | | $ | 1,425 |
| | $ | (5,861 | ) |
__________
| |
(a) | Included in the computation of net periodic pension and OPEB (income) expense. Refer to Note 15 for additional information. |
