GM Reports Net Loss of $115 Million in Preliminary Third-Quarter 2006 Financial Results
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- Reported net loss of $115 million, or $0.20 per share - Adjusted net income of $529 million, or $0.93 per share diluted - Record third-quarter revenue of $48.8 billion - Upper end of estimated Delphi exposure reduced by $4.5 billion
DETROIT, Oct. 25 -- General Motors Corp. today reported significantly improved preliminary financial results for the third quarter of 2006. The company posted a profit on an adjusted basis, excluding special items, and generated its third consecutive quarter of record revenue.
GM reported a net loss of $115 million, or $0.20 per share, for the third quarter of 2006, compared with a loss of $1.7 billion, or $2.94 per share, for the year-ago quarter. The net loss for this year's third quarter included $644 million, or $1.13 per share, in charges for special items, including goodwill impairment at GMAC and an increase to the charge associated with Delphi's reorganization.
GM reported 2006 third-quarter adjusted net income, excluding special items, of $529 million, or $0.93 per share diluted, on revenue of $48.8 billion. These results represent a $1.6 billion improvement from the year-ago loss of $1.1 billion. GM's global automotive operations almost fully accounted for the improvement, while lower GMAC results were more than offset by benefits associated with certain tax matters.
As a result of progress in ongoing discussions regarding the bankruptcy filing by Delphi Corp. and updated estimates related to certain benefit guarantees, GM has significantly narrowed the range of its estimated potential exposure related to this filing. The new range is between $6.0 and $7.5 billion pre-tax, as compared to a previously disclosed range of $5.5 to $12 billion. GM believes the more likely amount of the liability is at the lower end of this new range. Reflecting these updated estimates, GM has also increased the reserve for its contingent liability for Delphi by $500 million in the third quarter, bringing the total charges taken to date to $6 billion pre-tax. In addition to these charges, the final agreement with Delphi may result in GM agreeing to reimburse Delphi for certain labor expenses to be incurred upon and after Delphi's emergence from bankruptcy. The initial payment in 2007 is not expected to exceed approximately $400 million pre-tax, and the ongoing expenses would be of limited duration and estimated to average less than $100 million pre-tax annually. GM expects these payments to be far exceeded by anticipated reductions in Delphi material cost premiums.
"Our third quarter results again reflect significant progress in our fast- paced initiatives to turn around our business and create a company that is leaner, faster and positioned for long-term sustainable growth," said Chairman and Chief Executive Officer Rick Wagoner. "Our turnaround efforts in North America and Europe are well underway, and having a large impact on the bottom line, as evidenced by the $1.6 billion improvement for the quarter. This improvement in North America and Europe, combined with the strong sales growth and earnings performance we see in Asia and Latin America, confirm that our plan is on track. We have more work to do, and we remain focused on continuing progress in the quarters to come.
"In addition to the automotive turnaround, our near-term priorities include the successful resolution of the Delphi negotiations and closing the GMAC transaction," said Wagoner. "While a number of important issues still remain to be resolved, we are encouraged by the progress we have made on Delphi, and remain optimistic that we can achieve a consensual agreement. Regarding GMAC, we have completed several key milestones in the process and continue to work toward a fourth-quarter close."
GM Automotive Operations
Net income from global automotive operations improved by $1.5 billion year-over-year, posting a loss of $116 million on an adjusted basis, excluding special items (reported net loss of $62 million). This improvement is due primarily to significant improvement in North America, along with continued strong performance in other regions.
GM's global market share in the third quarter was 13.9 percent, up slightly from the second quarter market share of 13.7 percent, but down from 14.4 percent in the third quarter of 2005. The change in market share is largely attributable to the company's strategy of reducing sales of low-margin daily rental vehicles in North America and Europe. GM share in the U.S., however, set a stronger pace in the third quarter at 25.1 percent, its highest quarterly result in 2006.
GM North America posted an adjusted net loss of $367 million in the third quarter of 2006 (reported net loss of $374 million), a $1.3 billion improvement year-over-year, despite a decrease in production of 96,000 units. This significant progress largely reflects improvements in structural costs, as the company executes the pension, health care and manufacturing cost reduction initiatives related to its North American turnaround plan. The structural cost reductions, which are on track to total $6 billion in 2006, far offset the impact of the lower production for the quarter.
"There continues to be excellent progress in North America, with over $3.4 billion of net income improvement in the first nine months of the year. We are encouraged by the results, but we recognize that there is still more work to be done," Wagoner said. "We are on track to meet the structural cost reduction target of $9 billion on an average annual running rate basis by the end of 2006. Just as important, our aggressive new product launch program, a result of our increased capital spending, continues this fall with the introduction of our all-new Chevrolet Silverado and GMC Sierra pickups and the Saturn Outlook and GMC Acadia crossovers."
GM Europe posted an adjusted net loss for the quarter of $16 million (reported net loss of $103 million) reflecting an improvement of $105 million from the prior year's loss of $121 million. The results reflect continued execution of the GME restructuring plan, emphasizing both structural cost reductions and improved quality of sales.
"Our turnaround in Europe is in full gear. The region continues to make strides in cost reduction, augmented by pricing improvements arising from a focused sales and marketing strategy including lower rental fleet volume," Wagoner said. "We are seeing strong results from our Chevrolet brand, which posted record sales in Europe for the quarter. And, the newly launched Opel/Vauxhall Corsa is on track to exceed its 2006 objectives, with approximately 130,000 orders already placed in Europe."
GM Asia Pacific posted adjusted net earnings of $83 million for the third quarter (reported net earnings of $231 million), down from last year's earnings of $188 million. The difference primarily reflects the loss of income from Suzuki following the reduction in GM's equity interest in Suzuki and costs associated with launching the important all-new Holden Commodore and Statesman models in Australia. Strong sales performance in the region continued as market share increased to 6.2 percent from 5.9 percent, driven primarily by growth in Korea and China. GM products continue to gain strong acceptance in the fast-growing China market, with record third quarter sales of 192,000 units, up 17 percent over the same period last year. GM's global sales of GM Daewoo products exceeded 276,000 units in the third quarter, up 21 percent over third quarter 2005.
GM Latin America, Africa and Middle East posted strong adjusted and reported net earnings of $184 million for the third quarter, which reflects an improvement of $153 million from the year-ago period. The results primarily reflect an increase in volume generated by new product launches throughout the region. Market share in the region increased to 17.3 percent from 16.7 percent in the year-ago period as a result of strong sales in Brazil, South Africa, Colombia and the Middle East.
"Our Latin America, Africa and Middle East region posted their best quarterly financial results in nine years," said Wagoner. "We are seeing strong performance and growth in virtually every market in the region -- a great example of leveraging our global product portfolio in key growth markets."
GMAC
GMAC Financial Services earned adjusted net income of $346 million in the third quarter of 2006, as compared to record net income in the year-ago period of $654 million. GMAC's reported net loss for the quarter totaled $349 million, which included non-cash goodwill impairment charges of $695 million after-tax related to GMAC's Commercial Finance business.
GMAC's financing operations earned $136 million for the third quarter, as compared to $139 million earned in the year-ago period. These results include an expense of $135 million related to GMAC's successful third quarter offer to repurchase $1 billion worth of certain zero coupon bonds, which will result in improved earnings in future quarters. Auto Finance results otherwise benefited from an increase in net financing revenue as a result of strong retail financing penetration as well as lower provisions for credit losses.
ResCap's net income was $76 million in the third quarter of 2006, down from $282 million earned in the third quarter of 2005. The decrease in earnings was attributable to the challenging U.S. mortgage market which has negatively impacted margins and credit performance despite year-over-year increases in production. Mortgage originations totaled $51.5 billion for the quarter, representing a slight increase from $51.3 billion in the same period in the prior year.
GMAC's Insurance operations generated record quarterly net income of $191 million in the third quarter, up $102 million from earnings of $89 million in the year-ago period, primarily attributable to a combination of favorable loss performance and higher capital gains.
Excluding the goodwill impairment charge, GMAC's Other segment, which includes the Commercial Finance business unit and GMAC's equity investment of approximately 22 percent in Capmark Financial Group Inc. (Capmark), incurred an adjusted loss of $57 million (reported net loss of $752 million including the goodwill impairment charge), compared to $144 million earned in the same period last year. This decline results partially from GMAC's reduction in ownership interest of Capmark as a result of the first quarter sale. In addition, it includes the negative impact of higher credit provisions at Commercial Finance.
GMAC paid GM a $500 million dividend in the third quarter, resulting in 2006 year-to-date cash dividends of $1.9 billion.
GMAC continues to maintain adequate liquidity, while prudently reducing its excess levels of cash to more moderate levels with cash reserve balances at Sept. 30, 2006 of $14.1 billion, including $9.1 billion in cash and cash equivalents and $5.0 billion invested in marketable securities. This compares with cash balances of approximately $23 billion at June 30, 2006.
Cash and Liquidity
Cash, marketable securities, and readily-available assets of the Voluntary Employees' Beneficiary Association (VEBA) trust totaled $20.4 billion at Sept. 30, 2006, down from $22.9 billion on June 30, 2006, but up from $19.2 billion on Sept. 30, 2005. GM withdrew $2 billion from the VEBA trust in the third quarter to fund health care.
Forward-Looking Statements
In this release and in related comments by General Motors' management, we will use words like "expect," "anticipate," "estimate," "forecast," "initiative," "objective," "plan," "goal," "project," "outlook," "priorities," "target," "intend," "evaluate," "pursue," "seek," "may," "would," "could," "should," "believe," "potential," "continue," "designed," or "impact" to identify forward-looking statements that represent our current judgments about possible future events. We believe these judgments are reasonable, but GM's actual results may differ materially due to a variety of important factors.
Among other items, such factors include: our ability to achieve reductions in costs as a result of the turnaround restructuring, health care cost reductions and accelerated attrition programs, to realize production efficiencies and to implement capital expenditures at levels and times planned by management; the pace of product introductions and market acceptance of our new products; changes in the competitive environment and the effect of competition in our markets, including on our pricing policies; our ability to maintain adequate liquidity and financing sources and an appropriate level of debt; restrictions on GMAC's and ResCap's ability to pay dividends and prepay subordinated debt obligations to us; the final results of investigations and inquiries by the SEC and other government agencies; changes in relations with unions and employees/retirees and the legal interpretations of the agreements with those unions with regard to employees/retirees; our ability to complete the timely sale of a 51-percent controlling interest in GMAC and the effect of that sale on the results of GM's and GMAC's operations and liquidity and their respective credit ratings; labor strikes or work stoppages at GM or its key suppliers such as Delphi Corporation or financial difficulties at those key suppliers; negotiations and bankruptcy court actions with respect to our relationship with Delphi, particularly GM's ability to obtain a consensual resolution of its issues with Delphi on acceptable terms; and potential increases in our product warranty costs and costs associated with product recalls or product liability.
Other factors are the effects of transactions or alliances entered into by one or more of our competitors; additional credit rating downgrades and their effects; costs and risks associated with litigation; new or amended laws, regulations, policies or other activities of governments, agencies and similar organizations; price increases or shortages of fuel; changes in economic conditions, commodity prices, currency exchange rates or political stability in the markets in which we operate; and other factors affecting financing and insurance operating segments' results of operations and financial condition such as credit ratings, adequate access to the market, changes in the residual value of off-lease vehicles, changes in U.S. government-sponsored mortgage programs or disruptions in the markets in which its mortgage subsidiaries operate, and changes in its contractual servicing rights.
In addition to these factors, a variety of other factors may materially affect GMAC's actual results, including: changes in the competitive environment and the effect of competition in GMAC's markets, including GMAC's pricing policies; GMAC's ability to maintain adequate financing sources and an appropriate level of debt; the profitability and financial condition of GM, including changes in production or sales of GM vehicles and risks based on GM's contingent benefit guarantees; changes in GMAC's accounting assumptions that may require or that result from changes in the accounting rules or their application, which could result in an impact on earnings; and the threat of natural calamities.
The most recent annual reports on Form 10-K and quarterly reports on Form 10-Q filed by GM and GMAC provide information about these factors, which may be revised or supplemented in future reports to the SEC on those forms or on Form 8-K. We caution investors not to place undue reliance on forward-looking statements, and do not undertake any obligation to update publicly or otherwise revise any forward-looking statements, whether as a result of new information, future events or other such factors that affect the subject of these statements, except where expressly required by law.
General Motors Corporation
Non-GAAP Disclosure
GM includes the use of non-GAAP adjusted net income (loss) in its
earnings releases and charts for securities analysts. GM management
evaluates its business and makes certain operating decisions (e.g.,
budgeting, forecasting, employee compensation, asset management and
resource allocation) using adjusted net income. Management believes
that because this measure provides it with useful supplemental
information for evaluating and operating the business, investors
would find it beneficial to have the opportunity to view the business
in the same manner. Adjusted net income is a measure that focuses
on the Corporation's core business operations and facilitates
comparison of those businesses from period to period on a consistent
basis. Management also believes it is appropriate in evaluating the
Corporation's operations to exclude restructuring charges and any
gain or losses from one-time items because these costs vary in size
and frequency among the four geographic regions, since inclusion of
these events would make results less comparable between periods and
between regions.
GM also includes the use of non-GAAP managerial automotive
operating cash flow in its earnings releases and charts for securities
analysts. Management believes that providing managerial automotive
operating cash flow furnishes it and investors with useful information
by representing the cash flow generated or consumed by its automotive
operations, including cash consumed by automotive capital expenditures
and equity investments in companies related to our core business and
cash generated by sales of automotive operating assets and equity
investments in companies related to our core business, before funding
non-operating-related obligations including debt maturities,
dividends and other non-operating items.
GM's earnings releases and charts for securities analysts also
include the use of non-GAAP measures of revenue per vehicle.
Management uses revenue per vehicle to track operating efficiency
and to facilitate comparisons between periods and between manufacturers,
and believes that it would provide valuable information to investors
who are interested in identifying trends and comparing different
companies. Revenue per vehicle includes certain sales to other GM
regions that are excluded from GAAP reporting, and excludes non-vehicle
sales such as service parts and operations and OnStar service and
other income that GM does not derive from the sale of vehicles such
as interest or the GM credit card. Management also includes sales
to daily car rental companies in revenue per vehicle, although they
are excluded from GAAP reporting because of GM's repurchase obligations.
Non-GAAP measures should not be considered as a substitute for
measures of financial performance prepared in accordance with GAAP.
Investors and potential investors are encouraged to review the
reconciliation of non-GAAP financial measures contained within the
attached press release with their most directly comparable GAAP
financial results.
General Motors Corporation
List of Special Items - After Tax
(Dollars in millions except per share amounts)
(Unaudited)
Three Months Ended Year to Date
Sept. 30, 2006 Sept. 30, 2006
--------------- ---------------
Net $1-2/3 Net $1-2/3
Income EPS Income EPS
------ ----- ------ -----
REPORTED
--------
Net Loss $(115) $(0.20) $(3,049) $(5.39)
=== ==== ===== ====
ADJUSTMENTS
-----------
Delphi (A) 325 0.57 325 0.57
GMAC Commercial Finance
Goodwill Impairment (B) 695 1.23 695 1.23
Held for Sale Adjustment for
GMAC (C) (322) (0.57) 368 0.65
Special Attrition Program (D) (105) (0.18) 3,554 6.28
Restructuring (E) 87 0.15 396 0.70
Product Impairments (F) 112 0.20 309 0.55
Tax related items (G) (148) (0.26) (148) (0.26)
Sale of Investments (H) - - (584) (1.03)
--- ---- ----- ----
Subtotal 644 1.14 4,915 8.69
ADJUSTED
--------
--- ---- ----- ----
Adjusted Income - Basic EPS $529 $0.94 $1,866 $3.30
=== ==== ===== ====
Adjusted EPS - Fully Diluted $0.93 $3.29
==== ====
(A) Based on current available data and ongoing discussions with
Delphi and other stakeholders, GM increased its contingent
liability by $325 million after-tax ($500 million pre-tax).
GM recorded a charge of $3.6 billion after-tax ($5.5 billion
pre-tax) in the fourth quarter of December 2005. GM's current
estimate of the range of reasonably possible outcomes are
between $6 billion and $7.5 billion. GM believes the more likely
amount of the liability is at the lower end of this new range.
We may incur a payment in 2007 not expected to exceed $400
million pre-tax and additional ongoing expenses on a limited
duration estimated to be less than $100 million (pre-tax) annually.
(B) During the third quarter GMAC's commercial finance business
recognized a goodwill impairment charge of $695 million after
tax ($839 million pre-tax). The charge was the result of a
decision made by new management to eliminate certain low margin
product lines in its commercial finance business.
(C) An adjustment was made in the third quarter to reflect the net
assets held for sale at September 30, 2006 at their net
realizable value as required by SFAS 144. GM recognized a
reversal of losses previously recognized due to the fact that
an impairment charge was recorded by GMAC's commercial finance
business.
Year to date results include losses previously taken on the
pending sale of a 51% interest in GMAC.
General Motors Corporation
List of Special Items - After Tax
(Unaudited)
(D) Favorable adjustments of $105 million after tax to adjust
other personnel related accruals as a result of the GMNA hourly
attrition plan.
Year-to-date relates to the results of the GM-UAW-Delphi
Special Attrition Program, primarily for payments to employees
(approximately $1.4 billion) and for the curtailment charges
associated with GM's U.S. hourly pension plan as a result of
the attrition program (approximately $2.9 billion). The charge
also includes a favorable revision of the accrual taken in the
fourth quarter of 2005 for the North American plant capacity
actions (approximately $600 million).
(E) Relates to various restructuring initiatives and other matters,
as follows:
o For the third quarter of 2006:
o Charges recognized at GME, primarily related to the
elimination of a shift at the Ellesmere Port plant
in the U. K. as well as the continuing separation
activities related to the closure of the Azambuja plant.
o Year-to-date totals include the following :
o Charges totaling $182 million were recognized at GME,
related to the announced closure in December 2006 of the
GM assembly plant in Azambuja, Portugal, which includes
amounts for the writedown to fair market value of plant
assets, employee separation costs, and contract
cancellation charges.
o Other restructuring charges of $42 million at GMLAAM.
o Estimated charges of $65 million related to separations
of salaried employees at GMNA.
(F) In the third quarter GMNA recorded impairment charges of
$112 million after-tax related to product specific assets and
write down of plant assets in connection with the planned
stoppage of production at the Doraville, Georgia assembly plant.
(G) Primarily reflects the reversal of a deferred tax asset valuation
allowance at GM Daewoo.
(H) Year-to-date results include an after-tax gain of $212 million
from the sale of GM's entire investment in Isuzu Motors, Ltd.
Additionally, year-to-date results include an after-tax gain of
$372 million from the sale of 92.36 million shares of GM's
investment in Suzuki Motor Corp.(Suzuki) for approximately
$2 billion in cash, reducing GM's equity stake in Suzuki from
20.4% to approximately 3.7% (16.3 million shares). The gains
were recognized at GMAP.
General Motors Corporation
List of Special Items - After Tax
(Dollars in millions except per share amounts)
(Unaudited)
Three Months Ended Year to Date
Sept. 30, 2005 Sept. 30, 2005
-------------- --------------
Net $1-2/3 Net $1-2/3
Income EPS Income EPS
------ ----- ------ -----
REPORTED
--------
Net Loss $(1,664) $(2.94) $(3,904) $(6.90)
===== ==== ===== ====
ADJUSTMENTS
-----------
Salaried Attrition Program (A) - - 148 0.26
Plant and facility
Impairments (B) 805 1.42 889 1.57
Impairment of Investment
in FHI(C) - - 788 1.39
GME Restructuring Charge (D) 56 0.10 604 1.07
Tax Items (E) (311) (0.55) (858) (1.52)
--- ---- ----- ----
Subtotal 550 0.97 1,571 2.77
ADJUSTED
--------
----- ---- ----- ----
Adjusted Loss $(1,114) $(1.97) $(2,333) $(4.13)
===== ==== ===== ====
(A) Relates to voluntary early retirement and other separation
programs in the U.S. in the first quarter of 2005.
(B) The third quarter charge of $805 million ($468 million at GMNA,
$176 million at GME, $99 million at GMLAAM, and $62 million
at GMAP) reflects the results of third quarter reviews of the
carrying value of long-lived assets held and used, other than
goodwill and intangible assets with indefinite lives. The
impairments consist of $672 million, after tax, related to
product-specific assets that were written down and $116 million,
after tax, related to office and production facilities, which
were still in service at year-end 2005. There were no employee
idling or separation costs and no lease contracts were
terminated. The year-to-date charge also includes $84 million,
after tax, for the first quarter 2005 write-down to fair market
value of various plant assets in connection with the cessation
of production at the Lansing assembly plant.
(C) Relates to the write-down to fair market value, as of June 30,
2005, of GM's investment in approximately 20% of the common
stock of Fuji Heavy Industries (FHI).
(D) In the fourth quarter of 2004, GM Europe announced a
restructuring plan targeting a reduction in annual structural
costs of an estimated $600 million by 2006. The restructuring
charge of $56 million in the third quarter of 2005 relates to
approximately 500 separations in the third quarter, as well as
charges related to previous separations that are required to
be amortized over future periods. The year-to-date charge of
$604 million also includes costs related to the separation
of approximately 6,200 people in the first two quarters.
(E) Relates to tax benefits (including the Medicare Part D benefit
in the U.S.), in excess of GM's previously communicated annual
effective tax rate of 15%, which do not vary with the level
of pre-tax income. Adjusted loss reflects an effective tax
rate of 15%.
General Motors Corporation
Summary Corporate Financial Results
(Unaudited)
Third Quarter Year to Date
--------------- --------------
2006 2005 2006 2005
---- ---- ---- ----
(Dollars in millions except per share amounts)
Total net sales and
revenues $48,821 $47,182 $155,461 $141,424
Adjusted $48,821 $47,182 $154,520 $141,424
Net income (loss) $(115) $(1,664) $(3,049) $(3,904)
Adjusted $529 $(1,114) $1,866 $(2,333)
Net margin
(Net income / Total net
sales and revenues) (0.2)% (3.5)% (2.0)% (2.8)%
Adjusted 1.1% (2.4)% 1.2% (1.6)%
Earnings (losses) per share
- basic
$1-2/3 par value $(0.20) $(2.94) $(5.39) $(6.90)
Earnings (losses) per share
- diluted
$1-2/3 par value $(0.20) $(2.94) $(5.39) $(6.90)
Earnings (losses) per share
- adjusted diluted
$1-2/3 par value $0.93(1) $(1.97) $3.29 $(4.13)
GM $1-2/3 par value average
shares outstanding (Mil's)
Basic shares 566 566 566 565
Diluted shares 567 566 567 565
Cash dividends per share
of common stock
GM $1-2/3 par value $0.25 $0.50 $0.75 $1.50
See reconciliation of adjusted financial results and footnotes.
General Motors Corporation
Summary Corporate Financial Results
(Unaudited)
Third Quarter Year to Date
--------------- --------------
2006 2005 2006 2005
---- ---- ---- ----
Book value per share of
common stocks at Sept. 30
GM $1-2/3 par value $19.66 $38.87
Auto & Other total cash
& marketable securities
at Sept. 30 ($Bil's) $17.9 $15.1
Readily-available assets
in VEBA $2.5 $4.1
---- ----
Total Auto & Other cash
& marketable securities
plus readily-available
assets in VEBA $20.4 $19.2
==== ====
Auto & Other Operations
($Mil's)
Depreciation $1,075 $1,256 $3,266 $3,818
Amortization of special
tools 837 1,907 2,682 3,526
Amortization of intangible
assets 16 14 45 37
----- ----- ----- -----
Total $1,928 $3,177 $5,993 $7,381
===== ===== ===== =====
GM's share of nonconsolidated
affiliates' net income (loss)
($Mil's)
Italy * NA NA 0 $32
Japan + 0 $45 $21 $140
China $87 $86 $257 $218
South Korea # 0 NA 0 $17
* During the second quarter of 2005, GM and Fiat S.p.A. completed
the liquidation and termination of all joint ventures between
them in existence at that time. As a result, GM regained
complete ownership of all assets it originally contributed to
each joint venture.
+ GM sold its investment in FHI in the fourth quarter of 2005.
GM sold most of its investment in Suzuki in the first quarter
of 2006, and consequently now accounts for its remaining
investment as an equity security, and no longer records income
on the equity basis.
# Effective for the second quarter 2005, the results of GM Daewoo's
operations are consolidated by GM.
General Motors Corporation
Summary Corporate Financial Results
(Unaudited)
Third Quarter
2006 and 2005
--------------
(Dollars in millions) Reported Special Items Adjusted
-------- ------------- --------
2006 2005 2006 2005 2006 2005
---- ---- ---- ---- ---- ----
Total net sales
and revenues
GMNA(2) $24,897 $24,685 $ - $ - $24,897 $24,685
GME (2) 7,487 7,252 - - 7,487 7,252
GMLAAM 3,636 2,991 - - 3,636 2,991
GMAP 3,851 3,752 - - 3,851 3,752
------ ------ -- -- ------ ------
Total GMA 39,871 38,680 - - 39,871 38,680
Other(3) (347) (317) - - (347) (317)
------ ------ -- -- ------ ------
Total Auto &
Other 39,524 38,363 - - 39,524 38,363
------ ------ -- -- ------ ------
GMAC 9,299 8,710 - - 9,299 8,710
Other Financing(3) (2) 109 - - (2) 109
------ ------ -- -- ------ ------
Total Financing 9,297 8,819 - - 9,297 8,819
------ ------ -- -- ------ ------
Total net sales
and revenues $48,821 $47,182 $ - $ - $48,821 $47,182
====== ====== == == ====== ======
Income (loss)
before income
taxes, equity
income, and
minority interests
GMNA $(453) $(2,890) $11 $743 $(442) $(2,147)
GME (163) (556) 123 348 (40) (208)
GMLAAM 188 (108) - 150 188 42
GMAP 27 9 - 89 27 98
----- ----- ----- ----- ----- -----
Total GMA (401) (3,545) 134 1,330 (267) (2,215)
Other (645) (349) 501 - (144) (349)
----- ----- ----- ----- ----- -----
Total Auto &
Other (1,046) (3,894) 635 1,330 (411) (2,564)
----- ----- ----- ----- ----- -----
GMAC (308) 1,024 839 - 531 1,024
Other Financing 398 (1) (393) - 5 (1)
Total Financing 90 1,023 446 - 536 1,023
----- ----- ----- ----- ----- -----
Total income (loss)
before income
taxes, equity
income, and
minority
interests $(956) $(2,871) $1,081 $1,330 $125 $(1,541)
===== ===== ===== ===== ===== =====
See footnotes.
General Motors Corporation
Summary Corporate Financial Results
(Unaudited)
Third Quarter
2006 and 2005
--------------
(Dollars in millions) Reported Special Items Adjusted
-------- ------------- --------
2006 2005 2006 2005 2006 2005
---- ---- ---- ---- ---- ----
Net income (loss)
GMNA(2) $(374) $(2,175) $7 $468 $(367) $(1,707)
GME (2) (103) (353) 87 232 (16) (121)
GMLAAM 184 (68) - 99 184 31
GMAP 231 126 (148) 62 83 188
----- ----- --- --- --- -----
Total GMA (62) (2,470) (54) 861 (116) (1,609)
Other (25) 145 325 (311) 300 (166)
----- ----- --- --- --- -----
Total Auto &
Other (87) (2,325) 271 550 184 (1,775)
----- ----- --- --- --- -----
GMAC (349) 654 695 - 346 654
Other Financing 321 7 (322) - (1) 7
----- ----- --- --- ----- -----
Total Financing (28) 661 373 - 345 661
----- ----- --- --- --- -----
Net income (loss) $(115) $(1,664) $644 $550 $529 $(1,114)
===== ===== === === === =====
Income tax expense
(benefit)
GMNA $(89) $(729) $4 $275 $(85) $(454)
GME (52) (200) 36 116 (16) (84)
GMLAAM (5) (42) - 51 (5) 9
GMAP (249) (8) 253 27 4 19
--- ----- --- --- --- ---
Total GMA (395) (979) 293 469 (102) (510)
Other (617) (489) 176 311 (441) (178)
--- ----- --- --- --- ---
Total Auto &
Other (1,012) (1,468) 469 780 (543) (688)
----- ----- --- --- --- ---
GMAC 35 369 144 - 179 369
Other Financing 77 (8) (71) - 6 (8)
--- ----- --- --- --- ---
Total Financing 112 361 73 - 185 361
--- ----- --- --- --- ---
Income tax expense
(benefit) $(900) $(1,107) $542 $780 $(358) $(327)
=== ===== === === === ===
See footnotes.
General Motors Corporation
Summary Corporate Financial Results
(Unaudited)
Third Quarter
2006 and 2005
--------------
(Dollars in millions) Reported Special Items Adjusted
-------- ------------- --------
2006 2005 2006 2005 2006 2005
---- ---- ---- ---- ---- ----
Effective tax rate
Total GM Corp. 94% 39% 50% 59% (286)% 21%
GMNA 20% 25% 36% 37% 19% 21%
GME 32% 36% 29% 33% 40% 40%
GMAC (11)% 36% 17% - 34% 36%
Equity income (loss)
and minority interests
GMNA $(10) $(14) $ - $ - $(10) $(14)
GME 8 3 - - 8 3
GMLAAM (9) (2) - - (9) (2)
GMAP (45) 109 105 - 60 109
-- --- --- -- -- ---
Total GMA $(56) $96 $105 $ - $49 $96
== == === == == ==
General Motors Corporation
Summary Corporate Financial Results
(Unaudited)
Year to Date
2006 and 2005
--------------
(Dollars in millions) Reported Special Items Adjusted
-------- ------------- --------
2006 2005 2006 2005 2006 2005
---- ---- ---- ---- ---- ----
Total net sales
and revenues
GMNA(2) $82,018 $76,911 $ - $ - $82,018 $76,911
GME (2) 24,321 23,949 - - 24,321 23,949
GMLAAM 10,596 8,225 - - 10,596 8,225
GMAP 11,875 7,368 (941) - 10,934 7,368
------- ------- --- -- ------- -------
Total GMA 128,810 116,453 (941) - 127,869 116,453
Other (983) (609) - - (983) (609)
------- ------- --- -- ------- -------
Total Auto &
Other 127,827 115,844 (941) - 126,886 115,844
------- ------- --- -- ------- -------
GMAC 27,563 25,250 - - 27,563 25,250
Other Financing 71 330 - - 71 330
------- ------ --- -- ------- -------
Total Financing 27,634 25,580 - - 27,634 25,580
------- ------ --- -- ------- -------
Total net sales
and revenues $155,461 $141,424 $(941) $ - $154,520 $141,424
======= ======= === == ======= =======
Income (loss)
before income
taxes, equity
income, and
minority interests
GMNA $(7,237) $(6,436)$6,007 $1,100 $(1,230) $(5,336)
GME (171) (1,576) 460 1,205 289 (371)
GMLAAM 426 (6) 43 150 469 144
GMAP 1,057 (819) (941) 902 116 83
----- ----- ----- ----- ----- -----
Total GMA (5,925) (8,837) 5,569 3,357 (356) (5,480)
Other (1,577) (1,142) 505 13 (1,072) (1,129)
----- ----- ----- ----- ----- -----
Total Auto &
Other (7,502) (9,979) 6,074 3,370 (1,428) (6,609)
----- ----- ----- ----- ----- -----
GMAC 1,947 3,427 839 - 2,786 3,427
Other Financing (31) (18) 40 - 9 (18)
----- ----- --- ----- ----- -----
Total Financing 1,916 3,409 879 - 2,795 3,409
----- ----- --- ----- ----- -----
Total income (loss)
before income
taxes, equity
income, and
minority
interests $(5,586) $(6,570)$6,953 $3,370 $1,367 $(3,200)
===== ===== ===== ===== ===== =====
See footnotes.
General Motors Corporation
Summary Corporate Financial Results
(Unaudited)
Year to Date
2006 and 2005
--------------
(Dollars in millions) Reported Special Items Adjusted
-------- ------------- --------
2006 2005 2006 2005 2006 2005
---- ---- ---- ---- ---- ----
Net income (loss)
GMNA $(4,818) $(5,049)$3,904 $692 $(914) $(4,357)
GME (113) (963) 309 780 196 (183)
GMLAAM 353 (12) 43 99 396 87
GMAP 1,063 (409) (732) 850 331 441
----- ----- ----- ----- ----- -----
Total GMA (3,515) (6,433) 3,524 2,421 9 (4,012)
Other (353) 331 328 (850) (25) (519)
----- ----- ----- ----- ----- -----
Total Auto &
Other (3,868) (6,102) 3,852 1,571 (16) (4,531)
----- ----- ----- ----- ----- -----
GMAC 1,186 2,198 695 - 1,881 2,198
Other Financing (367) - 368 - 1 -
----- ----- ----- ----- ----- -----
Total Financing 819 2,198 1,063 - 1,882 2,198
----- ----- ----- ----- ----- -----
Net income (loss)$(3,049) $(3,904)$4,915 $1,571 $1,866 $(2,333)
===== ===== ===== ===== ===== =====
Income tax expense
(benefit)
GMNA(2) $(2,353) $(1,447)$2,103 $408 $(250) $(1,039)
GME (2) (42) (586) 151 425 109 (161)
GMLAAM 62 7 - 51 62 58
GMAP 93 (46) (104) 52 (11) 6
----- ----- ----- ----- ----- -----
Total GMA (2,240) (2,072) 2,150 936 (90) (1,136)
Other (1,219) (1,459) 177 863 (1,042) (596)
----- ----- ----- ----- ----- -----
Total Auto &
Other (3,459) (3,531) 2,327 1,799 (1,132) (1,732)
----- ----- ----- ----- ----- -----
GMAC 762 1,225 144 - 906 1,225
Other Financing 336 (18) (328) - 8 (18)
----- ----- ----- ----- ----- -----
Total Financing 1,098 1,207 (184) - 914 1,207
----- ----- ----- ----- ----- -----
Income tax expense
(benefit) $(2,361) $(2,324)$2,143 $1,799 $(218) $(525)
===== ===== ===== ===== === ===
See footnotes.
General Motors Corporation
Summary Corporate Financial Results
(Unaudited)
Year to Date
2006 and 2005
--------------
(Dollars in millions) Reported Special Items Adjusted
-------- ------------- --------
2006 2005 2006 2005 2006 2005
---- ---- ---- ---- ---- ----
Effective tax rate
Total GM Corp. 42% 35% 31% 53% (16)% 16%
GMNA 32% 23% 35% 37% 20% 20%
GME 25% 37% 33% 35% 38% 43%
GMAC 39% 36% 17% - 32% 36%
Equity income (loss)
and minority interests
GMNA $66 $(60) $ - $ - $66 $(60)
GME 16 27 - - 16 27
GMLAAM (11) 1 - - (11) 1
GMAP 99 364 105 - 204 364
--- --- -- -- --- ---
Total GMA $170 $332 $105 $ - $275 $332
=== === === == === ===
General Motors Corporation
Operating Statistics
Third Quarter Year to Date
--------------- --------------
2006 2005 2006 2005
---- ---- ---- ----
(Units in thousands)
Worldwide Production Volume
GMNA - Cars 417 424 1,375 1,352
GMNA - Trucks 633 722 2,167 2,224
----- ----- ----- -----
Total GMNA 1,050 1,146 3,542 3,576
GME 374 412 1,363 1,415
GMLAAM 216 207 616 587
GMAP 430 409 1,384 1,142
----- ----- ----- -----
Total Worldwide 2,070 2,174 6,905 6,720
===== ===== ===== =====
Vehicle Unit Deliveries
Chevrolet - Cars 216 218 638 680
Chevrolet - Trucks 430 494 1,240 1,440
Pontiac 118 128 322 341
GMC 129 154 363 463
Buick 66 82 191 231
Oldsmobile 0 0 0 2
Saturn 65 63 168 168
Cadillac 59 61 170 183
Other 34 34 92 79
----- ----- ----- -----
Total United States 1,117 1,234 3,184 3,587
Canada, Mexico, and Other 168 181 514 548
----- ----- ----- -----
Total GMNA 1,285 1,415 3,698 4,135
GME 456 463 1,527 1,531
GMLAAM 271 224 746 632
GMAP * 285 261 923 774
----- ----- ----- -----
Total Worldwide 2,297 2,363 6,894 7,072
===== ===== ===== =====
Market Share
United States - Cars 21.8% 22.5% 20.8% 23.1%
United States - Trucks 27.9% 28.8% 27.4% 29.2%
Total United States 25.1% 26.0% 24.3% 26.5%
Total North America 24.5% 25.6% 24.0% 26.1%
Total Europe 9.0% 9.1% 9.2% 9.5%
Total LAAM 17.3% 16.7% 16.8% 16.4%
Asia and Pacific 6.2% 5.9% 6.4% 5.7%
Total Worldwide 13.9% 14.4% 13.5% 14.3%
U.S. Retail/Fleet Mix
% Fleet Sales - Cars 33.9% 34.6% 36.1% 36.1%
% Fleet Sales - Trucks 17.3% 19.4% 21.3% 18.2%
Total Vehicles 24.0% 25.2% 27.2% 25.1%
GMNA Capacity Utilization
(2 shift rated, annualized) 83.3% 85.1% 93.5% 88.4%
* GMAP sales volume includes Wuling sales in China.
General Motors Corporation
Operating Statistics
Third Quarter Year to Date
-------------- --------------
2006 2005 2006 2005
---- ---- ---- ----
GMAC's Worldwide Cost of
Borrowing (4) 6.17% 5.01% 5.79% 4.63%
GMAC Period End Debt Spreads
Over U.S. Treasuries (bps)
2 Year 200 bp 310 bp
5 Year 250 bp 535 bp
10 Year 290 bp 550 bp
GMAC Cash Reserve Balance
($Bil's) (5) $14.1 $24.3
GMAC Automotive Finance
Operations Consumer
credit (North America)
Net charge-offs as a % of
managed receivables 0.98% 1.12% 0.99% 0.99%
Retail contracts 30 days
delinquent - % of average
number of contracts
outstanding (6) 2.68% 2.40% 2.46% 2.14%
Share of GM retail sales
(U.S. only)
Total consumer volume (retail
and lease) as % of retail sales 58% 33% 48% 40%
SmartLease as % of retail sales 16% 16% 18% 18%
Off-lease vehicle remarketing
(U.S. only)
Sales proceeds on scheduled lease
terminations (36-month)
per vehicle (7) $12,569 $12,975 $13,267 $13,482
Off-lease vehicles
terminated (units in 000s) 68 69 206 225
ResCap ($Bils)
Origination volume
($ billions) $51.5 $51.3 $140.1 $130.3
Mortgage servicing rights, net $4.8 $3.8
GMAC Insurance Operations
($Mil's)
Combined ratio (8) 89.4% 94.6% 92.3% 94.3%
Premiums / revenue written $1,037 $1,053 $3,168 $3,209
Investment portfolio
market value $8,006 $7,800
After-tax net unrealized
capital gains $604 $563
See footnotes.
General Motors Corporation
2006 2005 Year-To-Date
---- ---- --------------
Worldwide Employment
at Sept. 30 (in 000's)
United States Hourly 92 106
United States Salary 33 36
--- ---
Total United States 125 142
Canada, Mexico, and Other 31 31
--- ---
GMNA 156 173
GME (9) 62 56
GMLAAM 32 32
GMAP (10) 34 27
GMAC 31 34
Other 3 3
--- ---
Total 318 325
=== ===
Worldwide Payrolls ($Bil's) $6.0 $5.2 $16.7 $15.6
Footnotes:
---------
(1) This amount is comparable to First Call analysts' consensus.
(2) Effective January 1, 2006, four powertrain entities were
transferred from GMNA to GME for management reporting.
Accordingly, third quarter 2005 amounts have been revised for
comparability by reclassifying $103 million of revenue and
$10 million of net income from GMNA to GME. Year to date 2005
amounts have been revised by reclassifying $381 million of
revenue and $59 million of net income from GMNA to GME.
(3) Other Operations and Other Financing include intercompany
eliminations.
(4) Calculated by dividing total interest expense (excluding
mark to market adjustments) by total debt.
(5) Balance at September 30, 2006 comprises $9.1 billion of cash
and cash equivalents and $5.0 billion in marketable securities
with maturities greater than 90 days. Balance at September 30,
2005 comprises $21.8 billion of cash and cash equivalents and
$2.5 billion in marketable securities with maturities greater
than 90 days.
(6) Excludes accounts in bankruptcy.
(7) Prior period amounts based on current vehicle mix, in order to
be comparable.
(8) Calculated as the sum of all reported losses and expenses
(excluding interest and income tax expense) divided by the total
of premiums and service revenues earned and other income.
(9) Approximately 7,000 employees were added in the fourth quarter
of 2005 from a former powertrain joint venture with Fiat.
(10) Approximately 13,000 employees were added as a result of the
GM Daewoo consolidation in the third quarter of 2005.
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
2006 2005 2006 2005
------------------ -----------------
(Dollars in millions
except per share amounts)
Net sales and revenues
Automotive sales $39,524 $38,363 $126,886 $115,844
Financial services and insurance
revenues 9,297 8,819 27,219 25,580
Other income - - 1,356 -
------ ------ ------- -------
Total net sales and revenues $48,821 $47,182 $155,461 $141,424
------ ------ ------- -------
Costs and expenses
Automotive cost of sales 36,576 38,131 122,941 113,184
Selling, general, and
administrative expenses 6,678 6,885 19,945 19,855
Interest expense 4,853 4,059 13,613 11,450
Provisions for financing and
insurance operations credit and
insurance losses 1,055 978 2,725 2,693
Other expenses 615 -- 1,823 812
------ ------ ------- -------
Total costs and expenses 49,777 50,053 161,047 147,994
------ ------ ------- -------
Loss before income tax benefit,
equity income (loss) and minority
interests (956) (2,871) (5,586) (6,570)
Income tax benefit (900) (1,107) (2,361) (2,324)
Equity income (loss) and minority
interests (59) 100 176 342
--- ----- ----- -----
Net loss $(115) $(1,664) $(3,049) $(3,904)
=== ===== ===== =====
Loss per share attributable to
common stock, basic and diluted $(0.20) $(2.94) $(5.39) $(6.90)
==== ==== ==== ====
Weighted average common shares
outstanding -- basic and diluted
(millions) 566 566 566 565
=== ==== === ===
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
Sept. 30, Dec. 31, Sept 30,
2006 2005 2005
-------- ------- -------
(Dollars in millions,
except share information)
ASSETS
Current Assets
Cash and cash equivalents $17,802 $15,187 $13,695
Marketable securities 107 1,416 1,437
------ ------ ------
Total cash and marketable securities 17,909 16,603 15,132
Accounts and notes receivable (less
allowances) 9,022 7,758 7,800
Inventories (less allowances) 14,825 13,851 13,755
Net equipment on operating leases --
(less accumulated depreciation) 6,569 6,993 7,302
Deferred income taxes and other current
assets 10,698 8,877 9,778
------ ------ ------
Total current assets 59,023 54,082 53,767
Financing and Insurance Operations
Cash and cash equivalents 3,089 15,539 21,394
Investments in securities 80 18,310 16,575
Finance receivables -- net 117 180,793 177,082
Loans held for sale - 21,865 17,581
Assets held for sale (less allowance) 282,925 19,030 18,748
Net equipment on operating leases (less
accumulated depreciation) 13,325 31,194 30,670
Other assets 4,181 27,694 27,975
------- ------- -------
Total Financing and Insurance Operations
assets 303,717 314,425 310,025
Non-Current Assets
Equity in net assets of nonconsolidated
affiliates 2,030 3,291 4,260
Property -- net 38,893 38,466 37,860
Intangible assets -- net 1,649 1,862 1,674
Deferred income taxes 23,496 22,849 20,731
Other assets 40,740 41,103 41,101
------- ------- -------
Total non-current assets 106,808 107,571 105,626
------- ------- -------
Total assets $469,548 $476,078 $469,418
======= ======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable (principally trade) $27,113 $26,182 $26,784
Loans payable 1,346 1,519 1,509
Accrued expenses 40,183 42,665 43,280
------ ------ ------
Total current liabilities 68,642 70,366 71,573
Financing and Insurance Operations
Liabilities
Accounts payable 32 3,731 3,102
Liabilities related to assets held for sale 272,719 10,941 12,319
Debt 10,073 253,217 245,794
Other liabilities and deferred income taxes 4,762 28,946 29,298
------- ------- -------
Total Financing and Insurance Operations
liabilities 287,586 296,835 290,513
Non-Current Liabilities
Long-term debt 31,414 31,014 30,929
Postretirement benefits other than pensions 34,211 28,990 27,445
Pensions 15,937 11,214 9,877
Other liabilities and deferred income taxes 19,426 22,023 16,273
------- ------ ------
Total non-current liabilities 100,988 93,241 84,524
------- ------ ------
Total liabilities 457,216 460,442 446,610
Minority interests 1,212 1,039 829
Stockholders' equity
$1 2/3 par value common stock
(outstanding, 565,611,157; 565,518,106;
and 565,504,852 shares) 943 943 943
Capital surplus (principally additional
paid-in capital) 15,316 15,285 15,281
Retained earnings (accumulated deficit) (1,125) 2,361 9,295
Accumulated other comprehensive loss (4,014) (3,992) (3,540)
------ ------ ------
Total stockholders' equity 11,120 14,597 21,979
------- ------- -------
Total liabilities and stockholders' equity $469,548 $476,078 $469,418
======= ======= =======