Discontinued Operations

12 Months Ended

Dec. 31, 2019

Discontinued Operations and Disposal Groups [Abstract]

On July 31, 2017, we closed the sale of our Opel/Vauxhall Business to PSA Group. On October 31, 2017, we closed the sale of the Fincos to Banque PSA Finance S.A. and BNP Paribas Personal Finance S.A.

The net consideration paid at closing for the European Business was $2.5 billion, inclusive of $808 million in warrants in PSA Group. The total charge from the sale of the European Business during the year ended December 31, 2017 was $6.2 billion, net of tax, of which $3.9 billion was recorded in Loss from discontinued operations, net of tax, and $2.3 billion was recorded in Income tax expense. PSA Group assumed approximately $3.1 billion of net underfunded pension liabilities primarily with respect to active employees of the Opel/Vauxhall Business, and during the year ended December 31, 2017 our wholly-owned subsidiary (the Seller) made payments to PSA Group, or one or more pension funding vehicles, of $3.4 billion in respect of these assumed liabilities.

The Seller agreed to indemnify PSA Group for certain losses resulting from any inaccuracy of the representations and warranties or breaches of our covenants included in the Agreement and for certain other liabilities including certain emissions and product liabilities. The Company entered into a guarantee for the benefit of PSA Group and pursuant to which the Company agreed to

guarantee the Seller's obligation to indemnify PSA Group. Certain of these indemnification obligations are subject to time limitations, thresholds and/or caps as to the amount of required payments.

Although the sale reduced our new vehicle presence in Europe, we may still be impacted by actions taken by regulators related to vehicles sold before the sale. In Germany, the Kraftfahrt-Bundesamt (KBA) issued an order in November 2019, which converted a voluntary recall initiated by Opel in 2017 and 2018 into a mandatory recall for allegedly failing to comply with certain emissions regulations. However, because the overwhelming majority of vehicles have already received KBA-approved software calibration updates pursuant to the voluntary recall, the number of vehicles subject to the mandatory recall is insignificant. The Seller may also be obligated to indemnify PSA Group or otherwise absorb costs and expenses resulting from the foregoing as well as certain related potential litigation costs, settlements, judgments and potential fines. In addition, at the KBA's request, the German authorities re-opened a separate criminal investigation related to this matter that had previously been closed with no action. We are unable to estimate any reasonably possible loss or range of loss that may result from this matter.

We continue to purchase from and supply to PSA Group certain vehicles, parts and engineering services for a period of time following closing. The following table summarizes transactions with the Opel/Vauxhall Business:



	Years Ended December 31,
	2019		2018		2017
Net sales and revenue(a)	$	1,129	$	1,939	$	853
Purchases and expenses(a)	$	825	$	1,422	$	218
Cash payments(b)	$	975	$	1,849	$	242
Cash receipts(b)	$	1,408	$	2,310	$	1,161

__________


(a)	Included in Income from continuing operations.


(b)	Included in Net cash provided by operating activities – continuing operations.

The following table summarizes the results of the European Business operations:



	Years Ended December 31,
	2019		2018		2017
Automotive net sales and revenue	$	—	$	—	$	11,257
GM Financial net sales and revenue	—		—		466
Total net sales and revenue	—		—		11,723
Automotive and other cost of sales	—		—		11,049
GM Financial interest, operating and other expenses	—		—		342
Automotive and other selling, general, and administrative expense	—		—		813
Other expense items	—		—		(72		)
Loss from discontinued operations before taxes	—		—		553
Loss on sale of discontinued operations before taxes(a)(b)	—		70		2,176
Total loss from discontinued operations before taxes	—		70		2,729
Income tax expense(b)(c)	—		—		1,483
Loss from discontinued operations, net of tax	$	—	$	70	$	4,212

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(a)	Includes contract cancellation charges associated with the disposal for the year ended December 31, 2017.


(b)	Total loss on sale of discontinued operations, net of tax was $3.9 billion for the year ended December 31, 2017.

(c)

Includes $2.0 billion of deferred tax assets that transferred to PSA Group in the year ended December 31, 2017.