A Chevy Bolt equipped with self-driving technology cruises the streets of San Francisco.
Helena Price Photography
By Dan Primack
July 21, 2016

When General Motors announced in March that it was buying Cruise Automation, Fortune reported that the undisclosed purchase price was just over $1 billion. Today GM chief financial officer Chuck Stevens said in an earnings call that it only paid out $581 million (split between cash and stock).

In other words, we seem to have a pretty substantial discrepancy.

From what we can tell, the delta here is because GM (GM) is being very narrow in how it describes the deal value. The $581 million (or $600 million, whichever you prefer) is the cash and stock that actually went out the Detroit doors during GM’s second fiscal quarter. Not included were a variety of other things, including cash still being held in escrow, expected earn-out payments, employee retention packages and other expected employee compensation (particularly for those with unvested shares at the time of acquisition).

This is probably what Stevens was referring to when he said:

The deal consideration at closing was approximately $600 million with $300 million paid in cash during the quarter and the remaining $300 million paid through the issuance of new common stock. Additionally, we entered into other agreements associated with retention of key employees and performance based awards contingent on continued employment and or reaching certain milestones from a technology and a commercialization perspective.

Fortune has spoken with multiple sources this morning that we spoke with back in March, one of whom asked us to wait while he pulled out the deal documentation to double-check, and they reiterated the $1 billion purchase price.

A GM spokesman declined to get into specific numbers, but said that any payouts above the $581 million ― including earn-outs related to commercial or technological milestones ― are being considered by the company to be employment costs instead of acquisition costs.


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