Stockholders' Equity and Noncontrolling Interests

9 Months Ended

Sep. 30, 2019

Stockholders' Equity Note [Abstract]

Stockholders' Equity and Noncontrolling Interests

We had 2.0 billion shares of preferred stock and 5.0 billion shares of common stock authorized for issuance, and no shares of preferred stock and 1.4 billion shares of common stock issued and outstanding at September 30, 2019 and December 31, 2018.

Warrants At December 31, 2018 we had 15 million warrants outstanding that we issued in July 2009. The warrants were exercisable at any time prior to July 10, 2019 at an exercise price of $18.33 per share. Outstanding warrants expired on July 10, 2019.

In September 2018 GM Financial issued $500 million of Fixed-to-Floating Rate Cumulative Perpetual Stock, Series B, $0.01 par value, with liquidation preference of $1,000 per share. The preferred stock is classified as noncontrolling interests on our condensed consolidated financial statements. Dividends are paid semi-annually and began March 30, 2019 at a fixed rate of 6.50%.

Cruise Preferred Shares In May 2019, GM Cruise Holdings LLC (Cruise Holdings), our subsidiary, entered into a Purchase Agreement with SoftBank Vision Fund (AIV M2), L.P. (The Vision Fund), General Motors Holdings LLC, Honda Motor Co., Ltd. (Honda), and certain other investors pursuant to which Cruise Holdings received $1.1 billion in exchange for issuing Class F Preferred Shares (Cruise Class F Preferred Shares), including $687 million from General Motors Holdings LLC. In July 2019, regulatory approval was received resulting in an additional insignificant amount received from, and Cruise Class F Preferred Shares issued to, The Vision Fund in August 2019. Total proceeds from the issuance of Cruise Class F Preferred Shares were $1.2 billion, representing approximately 6.6% of the fully diluted equity of Cruise Holdings. All proceeds related to the Cruise Class F Preferred Shares are designated exclusively for working capital and general corporate purposes of Cruise. The Cruise Class F Preferred Shares participate pari passu with holders of Cruise Holdings common stock in any dividends declared. The Cruise Class F Preferred Shares have the right to vote on the election of one director, who is elected by the vote of a majority of the Cruise Holdings common stock and the Cruise Class F Preferred Shares. Prior to an initial public offering, the holders of Cruise Class F Preferred Shares are restricted from transferring the Cruise Class F Preferred Shares until May 7, 2023. The Cruise Class F Preferred Shares only convert into common stock of Cruise Holdings at specified exchange ratios upon occurrence of an initial public offering. No covenants or other events of default that can trigger redemption of the Class F Preferred Shares exist. 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 condensed consolidated financial statements. At September 30, 2019, external investors held 17.3% of the fully diluted equity in Cruise Holdings.

In June 2018, Cruise Holdings issued $900 million of convertible preferred shares (Cruise Preferred Shares) to an affiliate of The Vision Fund, which subsequently assigned such shares to The Vision Fund. Immediately prior to the issuance of the Cruise Preferred Shares, we invested $1.1 billion in Cruise Holdings. When Cruise's autonomous vehicles are ready for commercial deployment, The Vision Fund is obligated to purchase additional Cruise Preferred Shares for $1.35 billion. All proceeds are designated exclusively for working capital and general corporate purposes of Cruise. Dividends are cumulative and accrue at an annual rate of 7% and are payable quarterly in cash or in-kind, at Cruise's discretion. The Cruise Preferred Shares are also entitled to participate in Cruise dividends above a defined threshold. Prior to an initial public offering, The Vision Fund is restricted from transferring the Cruise Preferred Shares until June 28, 2025. The Cruise Preferred Shares are classified as noncontrolling interests in our condensed consolidated financial statements.

GM Korea Preferred Shares In May 2018, the Korea Development Bank (KDB) agreed to purchase approximately $750 million of GM Korea’s Class B Preferred Shares from GM Korea (GM Korea Preferred Shares), $361 million of which was received in June 2018 with the remainder received in the three months ended December 31, 2018. Dividends on the GM Korea Preferred Shares are cumulative and accrue at an annual rate of 1%. GM Korea can call the preferred shares at their original issue price six years from the date of issuance and once called, the preferred shares can be converted into common shares of GM Korea at the option of the holder. The KDB investment can only be used for purposes of funding capital expenditures in GM Korea. The GM Korea Preferred Shares are classified as noncontrolling interests in our condensed consolidated financial statements. In conjunction with the GM Korea Preferred Share issuance we agreed to provide GM Korea future funding, if needed, not to exceed $2.8 billion through December 31, 2027, inclusive of $2.0 billion of planned capital expenditures through 2027.

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



	Three Months Ended						Nine Months Ended
	September 30, 2019			September 30, 2018			September 30, 2019			September 30, 2018
Foreign Currency Translation Adjustments
Balance at beginning of period	$	(2,078	)	$	(1,826	)	$	(2,250	)	$	(1,606	)
Other comprehensive loss and noncontrolling interests, net of reclassification adjustment, tax and impact of adoption of accounting standards(a)(b)(c)	(341		)	(215		)	(169		)	(435		)
Balance at end of period	$	(2,419	)	$	(2,041	)	$	(2,419	)	$	(2,041	)

Defined Benefit Plans
Balance at beginning of period	$	(6,695	)	$	(6,290	)	$	(6,737	)	$	(6,398	)
Other comprehensive income (loss) before reclassification adjustment, net of tax and impact of adoption of accounting standards(b)(c)	80			(4		)	51			16
Reclassification adjustment, net of tax(b)	40			63			111			151
Other comprehensive income, net of tax and impact of adoption of accounting standards(b)(c)	120			59			162			167
Balance at end of period(d)	$	(6,575	)	$	(6,231	)	$	(6,575	)	$	(6,231	)

__________


(a)	The noncontrolling interests and reclassification adjustment were insignificant in the three and nine months ended September 30, 2019 and 2018.


(b)	The income tax effect was insignificant in the three and nine months ended September 30, 2019 and 2018.


(c)	Refer to our 2018 Form 10-K for additional information on adoption of accounting standards in 2018.

(d)

Primarily consists of unamortized actuarial loss on our defined benefit plans. Refer to the critical accounting estimates section of our 2018 Form 10-K for additional information.