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From: ild12/18/2004 11:38:30 AM
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How GM funds its pension plan:

GM Adds 11M XM Satellite Shrs To Retiree Expense Trust

December 17, 2004 6:38 p.m.

WASHINGTON -- General Motors Corp. (GM) said Friday it contributed about 11 million Class A shares of XM Satellite Radio Holdings Inc. (XMSR) to a trust established primarily to pre-fund health-care expenses for the auto maker's U.S. hourly retirees.

The stock was valued by an independent appraiser at about $419 million at the time of the contribution, GM said in a Securities and Exchange Commission filing.

GM said it now holds about 5.6 million shares of XM common stock, including shares convertible into common stock. GM said it will keep a seat on XM's board of directors.

GM said the gain on the stock transaction will be disclosed at a future date, and will be handled as a special item in the company's 2004 financial results.

The trust, the Voluntary Employees' Beneficiary Association, was established to pre-fund part of GM's other postretirement employee benefits liability related primarily to health-care expense. The trust had total assets of about $16 billion at Sept. 30, according to the filing.

GM said the stock contribution to the trust "was determined to be an appropriate and timely opportunity to utilize a GM-held asset to help address the impact of rising health-care costs for retirees."

XM supplies satellite-radio subscription services on some GM models sold in the U.S.

In a separate SEC filing Friday, GM disclosed that its 5.6 million XM shares represent a 3.1% stake in the Washington-based satellite radio company.

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