GM Delays Annual Report Filing for Two Weeks

“Fresh Start” accounting requires a huge and time consuming restatement of values. Old GM results are irrelevant anyway.

by on Mar.29, 2010

It's the new numbers, not the old ones that matter.

General Motors Company is unable to file its Annual Report on Form 10-K for the fiscal year ended December 31, 2009, by March 31, 2010, as required by U.S. Security and Exchange Commission regulations.

The delay is because it is still finalizing so-called “fresh start” adjustments, as required by Generally Accepted Accounting Principles, GM said this morning.

Under GAAP, GM must restate the value of all the assets acquired and liabilities assumed from General Motors Corporation, or the “Old GM,” in connection with Old GM’s sale of assets to GM Company under Section 363 of the United States Bankruptcy Code.

A GM spokesperson told me that the filing should be finished sometime during the next two weeks. This is ultimately a non-news story, as the numbers of a now bankrupt GM corporation are irrelevant. Financial results for the new GM’s Q1 2010 are expected in May.

Daniel Ammann has been appointed GM vice president finance and treasurer.

Daniel Ammann is now GM's treasurer.

GM’s annual report is expected to depict breathtaking losses in 2009 of old GM, leading to the bankruptcy last year that was forced on it by President Obama and his advisers at the U.S. Treasury Department.

However, the restatement of values will likely increase the strength of the new Company’s balance sheet. This is a necessary prelude to a successful offering of public stock. (See GM Has a Chance of Being Profitable In 2010 by right clicking on it.)

GM Company was formed by the United States Department of the Treasury in 2009 and the 2009 Form 10-K will include financial statements for the Company at and for the period from July 10, 2009 (the date of completion of the 363 Sale) through December 31, 2009, and for no other periods for GM Company.

Because the new GM Company is a new reporting entity, its financial statements will not be comparable to the financial statements of Old GM.

In a separate development, Walter Borst was named a GM vice president and Promark Global Advisors, Inc. chief executive officer, reporting to General Motors Vice Chairman and Chief Financial Officer Chris Liddell, effective May 1, 2010.

Promark is a wholly-owned asset management subsidiary of GM focused primarily on the management of retirement plan assets, including GM’s pension plans assets. Borst, 48, will also continue as chair of the Adam Opel GmbH Supervisory Board. Opel is GM’s principal European automotive subsidiary, located in Germany. Borst was most recently GM vice president and treasurer, a post he has held since 2003.

“Walter has done an outstanding job as treasurer,” said Liddell. “He is a great fit to lead the team managing a crucial part of GM, the $115 billion in assets at Promark.”

During his 29 year GM career, Borst spent six years in Europe, and served as chief financial officer of Opel. Additionally, he held a number of assignments in the Treasurer’s Office in New York and the Controller’s Staff in Detroit.

Borst succeeds Nancy Everett, who has announced her intention to leave the company June 1, 2010, and who will assist with the transition.

Everett, 55, joined Promark Global Advisors as chief investment officer in 2005. She assumed the additional responsibility of chief executive officer in January 2006. In 2007, Everett restructured the portfolio to hedge against volatility that ultimately helped GM’s pension fund withstand the negative market impact of 2008.

Daniel Ammann has been appointed GM vice president finance and treasurer, reporting to Liddell, effective May 1, 2010. Ammann, 37, was most recently managing director and head of Industrials Investment Banking for Morgan Stanley, a position he held since 2004.

“Dan brings a broad base of financial experience to this position,” said Liddell. “It is a critical time in this company’s history and Dan’s depth of knowledge of the financial community and our business will be invaluable.”

Ammann will lead the GM Treasurer’s Office, based in New York, with additional operations in Detroit, Shanghai, and Zurich. The global treasury operations include capital markets activities, capital planning, business development, risk management, worldwide pension funding, worldwide banking, and overseas and domestic finance.

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