SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report
(Date of earliest event reported) June 4, 2002
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GENERAL MOTORS CORPORATION
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(Exact name of registrant as specified in its charter)
STATE OF DELAWARE 1-143 38-0572515
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(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
300 Renaissance Center, Detroit, Michigan 48265-3000
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (313)-556-5000
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ITEM 5. OTHER EVENTS
On June 4, 2002, an agreement between General Motors Corporation's (GM)
subsidiary Hughes Electronics Corporation (Hughes) and General Electric
Capital Corporation ("GECC") was settled for $180 million, which will result
in Hughes recording a second quarter 2002 pre-tax charge, primarily related
to interest expense, of about $37 million. The settlement is as follows:
General Electric Capital Corporation ("GECC") and DIRECTV entered into a
contract on July 31, 1995, in which GECC agreed to establish and manage a
private label consumer credit program for consumer purchases of hardware and
related DIRECTV(R) programming. Under the contract, GECC also agreed to provide
certain related services to DIRECTV, including credit risk scoring, billing and
collections services. DIRECTV agreed to act as a surety for loans complying with
the terms of the contract. Hughes guaranteed DIRECTV's performance under the
contract. A trial commenced on June 12, 2000 regarding the contract and on July
21, 2000, the jury returned a verdict in favor of GECC and awarded contract
damages in the amount of $133.0 million, which included pre-judgment interest,
and the trial judge issued an order granting GECC $48.5 million in interest
under Connecticut's offer-of-judgment statute. With this order, the total
judgment entered in GECC's favor was $181.5 million. Hughes and DIRECTV appealed
the judgment and while the appeal was pending, post-judgment interest on the
total judgment was accruing at a rate of 6.241% per year, compounded annually,
from the date judgment was entered in October 2000. As previously disclosed in
our Quarterly Report on Form 10-Q for the quarter ended March 31, 2002, Hughes
entered into settlement negotiations with GECC during the first quarter of 2002
and based on the status of those settlement negotiations at that time, Hughes
increased its provision for loss on this matter by $83 million. This increase
resulted in a charge to "Selling, general and administrative expenses" of $56
million for contract damages and a charge to "Interest expense" of $27 million
for the amount of pre-judgment interest. On June 4, 2002, the parties executed
an agreement to settle the matter for $180 million, which will result in Hughes
recording a second quarter 2002 pre-tax charge, primarily related to interest
expense, of about $37 million. The settlement will be paid to GECC in June 2002.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
GENERAL MOTORS CORPORATION
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(Registrant)
Date June 4, 2002
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By
s/Peter R. Bible
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(Peter R. Bible,
Chief Accounting Officer)
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