GM Reports Preliminary Second Quarter 2007 Financial Results
 |
-Record automotive revenue of $45.9 billion
-Reported net income of $891 million, adjusted net income of $1.4 billion
-Adjusted automotive operating cash flow of $1.1 billion
-Improved liquidity position of $27.2 billion
DETROIT, July 31 -- General Motors Corp. today released its preliminary financial results for the 2007 second quarter, marked by record automotive revenue driven by strong sales in key growth markets, improved net income, and solid operating cash flow.
"We again saw improved results in sales, income and cash flow this quarter, driven by the continued successful implementation of our business strategies," said Rick Wagoner, GM chairman and chief executive officer. "In particular, our heavy commitment to key growth markets around the world really paid off in strong growth and earnings. In North America we continue to make progress with our focus on great new products, a disciplined sales and marketing strategy, and structural cost reduction, although profitability remains close to breakeven."
GM reported net income of $891 million, or $1.56 per diluted share, for the second quarter of 2007, an improvement of $4.3 billion compared with a reported net loss of $3.4 billion, or $5.98 per diluted share, in the year-ago quarter.
The results for the second quarter 2007 included $520 million, or $.92 per diluted share, in net special items, including $374 million in charges associated with GM's support of the bankruptcy and reorganization of Delphi and various GM North America (GMNA) restructuring-related charges. Details on the special charges are included in the "Highlights" section of this news release.
GM posted 2007 second-quarter adjusted net income, excluding special items, of $1.4 billion, or $2.48 per diluted share, compared to $1.1 billion, or $2.03 per diluted share, in the year-ago quarter.
GM Automotive Operations
GM's global automotive net income from continuing operations totaled $764 million on an adjusted basis in the second quarter of 2007 (reported net income from continuing operations of $618 million), compared to an adjusted net income of $367 million (reported net loss from continuing operations of $3.48 billion) in the second quarter 2006. Results for GM's automotive operations, specifically GMNA, exclude Allison Transmission which is now classified as a discontinued operation and an asset held for sale, pending the close of the previously-announced sale transaction.
GM's global sales volume surpassed 2.4 million units in the second quarter, up marginally from the same quarter a year ago. Global market share was down slightly at 13.3 percent, compared to 13.7 percent in the year-ago period, driven by a softer U.S. market, a reduction in fleet sales, and a disciplined incentive strategy. GM market share outside of North America increased to 9.4 percent in the second quarter 2007, compared to 9.2 percent in the second quarter 2006.
GMNA had adjusted net income from continuing operations of $78 million in the second quarter 2007 (reported net loss from continuing operations of $39 million), compared to adjusted net loss of $94 million from continuing operations (reported net loss from continuing operations of $3.95 billion) in the second quarter 2006. The net income improvements reflect favorable mix and reduced structural costs. These savings were partially offset by lower volume, favorable policy and warranty (P&W) adjustments in the prior-year period and unfavorable foreign exchange.
"It's true that our North America team has made huge improvements, and we appreciate everyone's hard work. But our current earnings clearly demonstrate we've got more to do," Wagoner said.
"We remain focused on growing revenue in North America by introducing great new cars and trucks, and enhancing our revitalized sales and marketing strategy. At the same time, we must continue to address our key areas of cost disadvantage such as healthcare. Going forward, we need to generate adequate profitability and cash flow to fund new product and key technology investments, like bio-fuel and hybrid-powered vehicles, to better position our business for sustainable growth," Wagoner added.
GM Europe (GME) posted adjusted net income of $236 million for the quarter (reported net income of $217 million), compared to $143 million in the second quarter of 2006 (reported net loss of $39 million). The results mark the best quarterly performance for GME since the second quarter of 1996. The improved earnings were driven by favorable pricing, combined with solid structural cost performance associated with the region's ongoing restructuring.
Despite industry pressures in Germany, Europe's largest vehicle market, GME set a quarterly sales record of 574,000 units, up five percent over the second quarter 2006. The new Opel Corsa small car and the Chevrolet Captiva compact SUV continued to perform especially well. In addition, GME's multi- brand strategy continues to gain momentum. Chevrolet had record sales of 115,000 units, up 34 percent. GME growth in key Eastern European markets was strong, especially in Russia, where unit sales were up 106 percent over the second quarter 2006, and share was up 3.9 percentage points.
GM Asia Pacific (GMAP) recorded adjusted net income of $237 million in the second quarter (reported net income of $227 million), which marks a second- quarter net income record for the region, and compares with $164 million in the same quarter a year ago (reported net income of $376 million, which included $212 million from the sale of GM's equity interest in Isuzu). The improvements were largely driven by strong performance at GM Daewoo and GM China. GM enjoyed eight percent sales growth in the Asia Pacific region, and GM China set a new volume record with 234,000 units in the quarter, up over six percent year-over-year. GM sales in South Korea were up 20 percent, and India was up 46 percent aided by the success of the newly-introduced Chevrolet Spark.
GM Latin America, Africa and Middle East (GMLAAM) continued to leverage explosive regional growth and its traditionally strong position in the region. GMLAAM posted its best quarterly net income in a decade with adjusted earnings of $213 million (reported net income also $213 million), compared to $155 million in the same quarter last year (reported net income of $139 million). Improvements in net income were driven primarily by volume growth and favorable pricing. GMLAAM set a volume record for the quarter, selling over 293,000 units, up 20 percent year-over-year. GM sales performance was highlighted by an all-time sales record in Venezuela, and second quarter records in Argentina, Brazil, Chile, Colombia, Egypt, and the Middle East Operations.
"As we head into the second half of the year, we're optimistic about continued growth prospects in key emerging markets. In the U.S., the economy and auto market outlook remains challenging, but we'll continue our future product and technology investments, while staying focused on growing our revenue and improving our cost competitiveness," Wagoner said. "We look forward to the U.A.W. negotiations as an opportunity to continue to address issues that are important to the company, the union and our employees."
In addition to strong year-over-year performance in automotive operations, GM also recognized adjusted net income of $401 million in Corporate Other and Other Financing (reported net income of $27 million). This represents a $517 million improvement over the second quarter 2006, principally related to reductions in income tax contingencies.
GMAC
As a standalone company, GMAC Financial Services reported net income of $293 million for the second quarter 2007, compared to $787 million in the second quarter 2006 which included a one-time gain on the sale of a regional homebuilder of $259 million. GM recognized $139 million in net income attributable to GMAC as a result of its 49 percent equity interest as well as accrued preferred dividends. Financial performance at GMAC represents a $598 million improvement over the first quarter 2007, which was significantly affected by pressures in the U.S. nonprime mortgage market.
"We're pleased that GMAC returned to profitability in the second quarter, with significantly better results than the first quarter. GMAC's auto financing and insurance businesses continues to post strong results while the company continues to progress in addressing the challenging conditions in the residential mortgage market," Wagoner said.
GMAC's automotive finance, insurance and other operations (excluding Residential Capital, LLC (ResCap)) generated more than twice the net income of these same operations in the year-ago period. Despite continued challenges in the residential mortgage industry, ResCap significantly reduced losses in the second quarter.
Cash and Liquidity
GM generated adjusted operating cash flow of $1.1 billion in the second quarter of 2007, up from $600 million in the year-ago quarter, and continues to maintain a strong liquidity position.
Cash, marketable securities, and readily-available assets of the Voluntary Employees' Beneficiary Association (VEBA) trust totaled $27.2 billion as of June 30, 2007, up from $24.7 billion on March 31, 2007. The balance includes $1.4 billion net cash raised through a convertible debt offering in May 2007, which replaced $1.1 billion in convertible debt that was redeemed in March 2007.
As announced in June 2007, the sale of the Allison Transmission business will further bolster GM's liquidity, with proceeds of approximately $5.6 billion. The sale is expected to close in the third quarter 2007.
General Motors Corporation
List of Special Items -
After Tax
(Dollars in millions except per share amounts)
(Unaudited)
Three Months Ended Year to Date
June 30, 2007 June 30, 2007
Net Net
Income EPS Income EPS
--------- ---------- ---------- ---------
REPORTED
Income from continuing
operations $784 $1.38 $742 $1.31
Income from
discontinued operations 107 0.19 211 0.37
----- ----- ---- -----
Net income
income $891 $1.57 $953 $1.68
ADJUSTMENTS
Restructuring Charges (A) 88 0.15 153 0.26
Plant Closures (B) (4) (0.01) (31) (0.05)
Special Attrition
Program (C) (4) (0.01) (15) (0.03)
Impairment Charges (D) 66 0.12 71 0.13
Delphi (E) 374 0.67 374 0.67
----- ----- ----- -----
Subtotal 520 0.92 552 0.98
ADJUSTED
Income from
continuing operations $1,304 $2.30 $1,294 $2.29
Income from
discontinued operations 107 0.19 211 0.37
------ ----- ------ -----
Adjusted Income - Basic $1,411 $2.49 $1,505 $2.66
====== ===== ====== =====
Adjusted Income - Diluted $2.48 $2.65
===== =====
(A) Relates to various restructuring initiatives, as follows
(after-tax basis):
- For the three and six months ended June 30 2007, after-tax
restructuring charges of $63 million and $62 million,
respectively, were recognized at GMNA relating to a plant
closing reserve.
- For the three and six months ended June 30, 2007,
restructuring charges of $19 million and $56 million,
respectively, were recognized at GME for separation programs
primarily in Germany and Sweden.
- For the three and six months ended June 30 2007,
restructuring charges of $6 million and $35 million,
respectively, were recognized at GMAP that relate to
separation programs at its Australian facilities.
General Motors Corporation
List of Special Items - After Tax
(Dollars in millions except per share amounts)
(Unaudited)
(B) For the three and six months ended June 30, 2007, after-tax
curtailment gains and a favorable after-tax adjustments of $4
million and $31 million, respectively, were recognized by GMNA
relating to the closure of two former component plants.
(C) Relates to a favorable curtailment and true-up adjustment
relating to the Special Attrition Program for GMNA.
(D) For the three and six months ended June 30, 2007, after-tax
impairment charges of $66 million and $71 million, respectively,
were recognized. The impairments relate primarily to product
specific assets at GMNA and GMAP.
(E) In June 2007, the United Auto Workers union, Delphi Corporation
and GM entered into a Memorandum of Understanding. For the
three and six months ended June 30, 2007, GM recorded an
after-tax charge of $374 million. This charge consists of
incremental Delphi retiree health care costs, reimbursement of
labor costs at certain Delphi facilities and reimbursement of
certain pension obligations for Delphi employees.
General Motors Corporation
List of Special Items - After Tax
(Dollars in millions except per share amounts)
(Unaudited)
Three Months Ended Year to Date
June 30, 2006 June 30, 2006
-------------------- -------------------
Restated Restated
Net Net
Income EPS Income EPS
--------- ---------- ---------- ---------
REPORTED
--------
Loss from
continuing operations $(3,494) $(6.18) $(3,001) $(5.31)
Income from
discontinued operations 111 0.20 220 0.39
------ ------ ------- ------
Net loss $(3,383) $(5.98) $(2,781) $(4.92)
ADJUSTMENTS
-----------
Special Attrition
Program (A) 3,659 6.47 3,659 6.47
Sale of GMAC (B) 690 1.22 690 1.22
Restructuring charges (C) 198 0.35 341 0.60
Impairment charges (D) 197 0.35 197 0.35
Sale of
Suzuki investment (E) - - (395) (0.70)*
Sale of
Isuzu investment (F) (212) (0.38) (212) (0.37)
------ ------ ------ ------
Subtotal 4,532 8.01 4,280 7.57
ADJUSTED
--------
Income from
continuing operations $1,038 $1.83 $1,279 $2.26
Income from
discontinued operations 111 0.20 220 0.39
------ ------ ------ ------
Adjusted Income - Basic $1,149 $2.03 $1,499 $2.65*
====== ====== ====== ======
Adjusted Income - Diluted $2.03 $2.65*
====== ======
* Adjusted EPS has been changed from $2.69 per share to $2.65 per
share to reflect a revision to the special item related to the
gain on sale of our Suzuki investment from $372 million,
after-tax, to $395 million, after-tax.
(A) 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).
General Motors Corporation
List of Special Items - After Tax
(Dollars in millions except per share amounts)
(Unaudited)
(B) Relates to the sale of a 51% controlling interest in GMAC,
which closed in the fourth quarter of 2006.
- Approximately $281 million after tax ($433 million pre-tax)
is attributable to differences between tangible book value
to be paid by the consortium of investors and GMAC's actual
book value, partially offset by 51% of the effects of
previously unrecognized net gains reflected in GMAC's
accumulated other comprehensive income. The pretax portion
is recorded as part of the "Other expenses" line item of
the consolidated statement of operations, whereas the tax
benefit of $152 million is recorded in the "Income tax
benefit" line of the consolidated statement of operations.
- Approximately $209 million, after tax, associated with
incremental tax costs created by book to tax basis
differences recognized due to the sale. The tax expense
of $209 million is recorded in the "Income tax benefit"
line of the consolidated statement of operations. The
consolidated statement of operations reflects a pretax
loss to date of $1.2 billion in the "Other expenses" line
item. The line item includes the $433 million pretax
amount noted above, as well as a remaining pretax loss of
$775 million attributable to GMAC operating lease assets
classified as held for sale. Pursuant to the requirements
of Statement of Financial Accounting Standards No. 144,
"Accounting for the Impairment or Disposal of Long-Lived
Assets," the company is required to cease depreciation on
long-lived assets classified as held for sale. Accordingly,
pretax income in the second quarter was higher by $775
million as reported in the "Financial services and insurance
expense" line item of the consolidate statement of
operations. However, because that amount is the sales
price, a corresponding increase of $775 million was
recorded in the "Other expenses" line item during the
quarter, reducing the carrying value of operating lease
assets held for sale.
General Motors Corporation
List of Special Items - After Tax
(Dollars in millions except per share amounts)
(Unaudited)
Relates to various restructuring initiatives and other matters,
as follows:
Second quarter of 2006:
(C) - Charges totaling $182 million were recognized at GME,
primarily 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. Second quarter GME charges also
include other product-related asset impairments and
separation charges.
- Other restructuring charge of $16 million at GMLAAM.
Year-to-date totals include the following charges recognized
in the first quarter of 2006:
- Estimated charges of $65 million related to separations
of salaried employees at GMNA.
- Curtailment charges associated with modifications to the
U.S. Retirement Program for Salaried Employees announced
in the first quarter of 2006. GMNA and Corporate & Other
Operations recognized charges of $12 million and $3 million,
respectively, associated with these modifications.
- A favorable adjustment of $88 million for higher than
anticipated headcount reductions associated with previously
announced GMNA plant idling activities.
- A charge of $52 million for certain components of the
hourly attrition program related to retroactive lump-sum
payments, recognized at GMNA.
- Other restructuring charges of $72 million and $27 million,
recognized at GME and GMLAAM, respectively.
(D) A charge of $197 million, after tax ($303 million pretax), for
the write down of product-related assets at GMNA.
(E) Relates to the sale of 92.36 million shares of GM's investment
in Suzuki for approximately $2 billion in cash, reducing GM's
equity stake to approximately 3.7% (16.3 million shares).
The after-tax gain of $395 million was recognized at GMAP.
(F) Relates to the sale of GM's entire investment in Isuzu Motors,
Ltd. for an after-tax gain of $212 million. The gain was
recognized at GMAP.
General Motors Corporation
Summary Corporate Financial Results
(Dollars in millions except per share amounts)
(Unaudited)
Second Quarter Year to Date
-------------- ------------
2007 2006 2007 2006
Restated Restated
--------- --------- --------- --------
Total net sales
and revenue $46,812 $53,899 $90,128 $105,742
Adjusted $46,812 $53,899 $90,128 $105,742
Income (loss) from
continuing
operations $784 $(3,494) $742 $(3,001)
Adjusted $1,304 $1,038 $1,294 $1,279
Income from
discontinued
operations $107 $111 $211 $220
Adjusted $107 $111 $211 $220
Net income (loss) $891 $(3,383) $953 $(2,781)
Adjusted $1,411 $1,149 $1,505 $1,499
Net margin from
continuing operations
(Income from continuing
(operations / Total net
sales and revenue) 1.7% (6.5)% 0.8% (2.8)%
Adjusted 2.8% 1.9% 1.4% 1.2%
Earnings (loss)
per share - basic
Continuing operations $1.38 $(6.18) $1.31 $(5.31)
Discontinued
operations $0.19 $0.20 $0.37 $0.39
Total $1.57 $(5.98) $1.68 $(4.92)
Earnings (loss)
per share - diluted
Continuing operations $1.37 $(6.18) $1.30 $(5.31)
Discontinued
operations $0.19 $0.20 $0.37 $0.39
Total $1.56 $(5.98) $1.67 $(4.92)
Earnings per share -
adjusted diluted $2.48 $2.03 $2.65 $2.65
GM $1-2/3 par value
average shares
outstanding (Mil's)
Basic shares 566 566 566 566
Diluted Shares 569 566 569 566
Cash dividends per share
of common stocks $0.25 $0.25 $0.50 $0.50
See reconciliation of adjusted financial results.
General Motors Corporation
Summary Corporate Financial Results
(Unaudited)
Second Quarter Year to Date
-------------- ------------
2007 2006 2007 2006
Restated Restated
--------- --------- --------- --------
Automotive total
cash & marketable
securities at
June 30
($Bil's) $23.6 $20.1
Readily-available
assets in VEBA 3.6 2.8
Total Automotive cash
& marketable
securities plus
readily-available ----- -----
assets in VEBA $27.2 $22.9
===== =====
Automotive Operations
($Mil's)
Depreciation $1,231 $1,058 $2,488 $2,160
Amortization of
special tools 858 1,108 1,583 1,843
Amortization of
intangible assets 18 18 35 35
------ ------ ------ ------
Total $2,107 $2,184 $4,106 $4,038
====== ====== ====== ======
GM's share of
nonconsolidated
affiliates' net
income (loss)
(Mil's)
GMAC $118 $ - $(65) $ -
Shanghai GM and
SAIC-GM-Wuling 117 85 233 157
Other + 52 122 92 176
----- ----- ----- -----
$287 $207 $260 $333
===== ===== ===== =====
+ 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.
General Motors Corporation
Summary Corporate Financial Results
(Dollars in millions)
(Unaudited)
Second Quarter
2007 and 2006
--------------
Reported Special Items Adjusted
-------- ------------- --------
2007 2006 2007 2006 2007 2006
Restated Restated
---- -------- ---- ---- ---- --------
Total net sales
and revenue
GMNA $29,574 $30,850 $ - $ - $29,574 $30,850
GME 9,558 8,740 - - 9,558 8,740
GMLAAM 4,330 3,829 - - 4,330 3,829
GMAP 5,446 3,782 - - 5,446 3,782
Auto
Eliminations (1) (3,012) (2,337) - - (3,012) (2,337)
------ ------- --- --- ------- -------
Total GMA 45,896 44,864 - - 45,896 44,864
Corporate &
Other (1) 22 (52) - - 22 (52)
------ ------- --- --- ------- -------
Total Auto and
Other 45,918 44,812 - - 45,918 44,812
------ ------- --- --- ------- -------
GMAC - 9,048 - - - 9,048
Other Financing (1) 894 39 - - 894 39
------ ------- --- --- ------- -------
Total Financing 894 9,087 - - 894 9,087
------ ------- --- --- ------- -------
Total net sales
and revenue $46,812 $53,899 $ - $ - $46,812 $53,899
======= ======= === === ======= =======
Income (loss) from
continuing operations
before income
taxes, other equity
income and
minority interests
GMNA $(98) $(6,172) $180 $5,932 $82 $(240)
GME 312 (54) 30 274 342 220
GMLAAM 295 168 - 16 295 184
GMAP 282 392 14 (311) 296 81
Auto Eliminations (1) (1) - - (1) (1)
------ ------- --- ----- ----- ------
Total GMA 790 (5,667) 224 5,911 1,014 244
Corporate & Other (579) (425) 575 - (4) (425)
------ ------- --- ----- ----- ------
Total Auto and
Other 211 (6,092) 799 5,911 1,010 (181)
------ ------- --- ----- ----- ------
GMAC 154 1,152 - - 154 1,152
Other Financing 86 (428) - 433 86 5
------ ------- --- ----- ----- ------
Total Financing 240 724 - 433 240 1,157
------ ------- --- ----- ----- ------
Total income (loss)
from continuing
operations before
income taxes, other
equity income and
minority
interests $451 $(5,368) $799 $6,344 $1,250 $976
====== ======= === ====== ====== ======
See footnotes.
General Motors Corporation
Summary Corporate Financial Results
(Dollars in millions)
(Unaudited)
Second Quarter
2007 and 2006
--------------
Reported Special Items Adjusted
-------- ------------- --------
2007 2006 2007 2006 2007 2006
Restated Restated
---- -------- ---- ---- ------ --------
Income (loss) from
continuing
operations
GMNA $(39) $(3,950) $117 $3,856 $78 $(94)
GME 217 (39) 19 182 236 143
GMLAAM 213 139 - 16 213 155
GMAP 227 376 10 (212) 237 164
Auto Eliminations - (1) - - - (1)
------ ------- --- ----- ----- ------
Total GMA 618 (3,475) 146 3,842 764 367
Corporate & Other (30) (119) 374 - 344 (119)
------ ------- --- ----- ----- ------
Total Auto and
Other 588 (3,594) 520 3,842 1,108 248
------ ------- --- ----- ----- ------
GMAC 139 787 - - 139 787
Other Financing 57 (687) - 690 57 3
------ ------- --- ----- ----- ------
Total Financing 196 100 - 690 196 790
------ ------- --- ----- ----- ------
Total income (loss)
from continuing
operations $784 $(3,494) $520 $4,532 $1,304 $1,038
Income from
discontinued
operations 107 111 - - 107 111
------ ------- --- ------ ------ ------
Net income (loss) $891 $(3,383) $520 $4,532 $1,411 $1,149
====== ======= === ====== ====== ======
Income tax expense
(benefit)
GMNA $(49) $(2,151) $63 $2,076 $14 $(75)
GME 98 (9) 11 92 109 83
GMLAAM 83 28 - - 83 28
GMAP 53 104 4 (99) 57 5
Auto Eliminations - - - - - -
------ ------- --- ----- ----- ------
Total GMA 185 (2,028) 78 2,069 263 41
Corporate & Other (549) (307) 201 - (348) (307)
------ ------- --- ----- ----- ------
Total Auto and
Other (364) (2,335) 279 2,069 (85) (266)
------ ------- --- ----- ----- ------
GMAC 15 361 - - 15 361
Other Financing 29 259 - (257) 29 2
------ ------- --- ----- ----- ------
Total Financing 44 620 - (257) 44 363
------ ------- --- ----- ----- ------
Income tax expense
(benefit) $(320) $(1,715) $279 $1,812 $(41) $97
====== ======= === ====== ====== ======
General Motors Corporation
Summary Corporate Financial Results
(Dollars in millions)
(Unaudited)
Second Quarter
2007 and 2006
--------------
Reported Special Items Adjusted
-------- ------------- --------
2007 2006 2007 2006 2007 2006
Restated Restated
---- -------- ---- ---- ------ --------
Effective Tax Rate
Total GM Corp. (71)% 32% 35% 29% (3)% 10%
GMNA 50% 35% 35% 35% 17% 31%
GME 31% 17% 37% 34% 32% 38%
GMAC 10% 31% -% -% 10% 31%
Equity income (loss)
and minority
interests
GMNA $10 $71 $ - $ - $10 $71
GME 3 6 - - 3 6
GMLAAM 1 (1) - - 1 (1)
GMAP (2) 88 - - (2) 88
Auto Eliminations 1 - - - 1 -
------ ------- --- ----- ----- ------
Total GMA $13 $164 $ - $ - $13 $164
====== ======= === ===== ====== ======
General Motors Corporation
Summary Corporate Financial Results
(Dollars in millions)
(Unaudited)
Year to Date
2007 and 2006
--------------
Reported Special Items Adjusted
-------- ------------- --------
2007 2006 2007 2006 2007 2006
Restated Restated
---- -------- ---- ---- ------ --------
Total net sales
and revenue
GMNA $57,537 $61,172 $ - $ - $57,537 $61,172
GME 18,043 16,795 - - 18,043 16,795
GMLAAM 7,903 6,990 - - 7,903 6,990
GMAP 10,005 7,168 - - 10,005 7,168
Auto
Eliminations (1) (5,235) (4,218) - - (5,235) (4,218)
------ ------- --- ----- ------- ------
Total GMA 88,253 87,907 - - 88,253 87,907
Corporate &
Other (1) 45 (99) - - 45 (99)
------ ------- --- ----- ------- ------
Total Auto and
Other 88,298 87,808 - - 88,298 87,808
------ ------- --- ----- ------- ------
GMAC - 17,861 - - - 17,861
Other Financing (1)1,830 73 - - 1,830 73
------ ------- --- ----- ----- ------
Total Financing 1,830 17,934 - - 1,830 17,934
------ ------- --- ----- ----- ------
Total net sales
and revenue $90,128 $105,742 $ - $ - $90,128 $105,742
====== ======= === ===== ====== ======
Income (loss) from
continuing
operations before
income taxes, other
equity income and
minority interests
GMNA $(309) $(6,653) $119 $5,995 $(190) $(658)
GME 314 38 87 389 401 427
GMLAAM 550 266 - 43 550 309
GMAP 376 1,073 63 (977) 439 96
Auto
Eliminations (1) (9) (7) - - (9) (7)
------ ------- --- ----- ----- ------
Total GMA 922 (5,283) 269 5,450 1,191 167
Corporate & Other (788) (938) 575 4 (213) (934)
------ ------- --- ----- ----- ------
Total Auto and
Other 134 (6,221) 844 5,454 978 (767)
------ ------- --- ----- ----- ------
GMAC 20 1,858 - - 20 1,858
Other Financing 140 (426) - 433 140 7
------ ------- --- ----- ----- ------
Total Financing 160 1,432 - 433 160 1,865
------ ------- --- ----- ----- ------
Total income (loss)
from continuing
operations
before income
taxes, other
equity income and
minority
interests $294 $(4,789) $844 $5,887 $1,138 $1,098
====== ======= === ===== ====== ======
See footnotes.
General Motors Corporation
Summary Corporate Financial Results
(Dollars in millions)
(Unaudited)
Year to Date
2007 and 2006
--------------
Reported Special Items Adjusted
-------- ------------- --------
2007 2006 2007 2006 2007 2006
Restated Restated
---- -------- ---- ---- ------ --------
Income (loss) from
continuing
operations
GMNA $(221) $(4,351) $78 $3,897 $(143) $(454)
GME 222 20 56 254 278 274
GMLAAM 414 179 - 43 414 222
GMAP 343 868 44 (607) 387 261
Auto Eliminations (4) (5) - - (4) (5)
------ ------- --- ----- ----- ------
Total GMA 754 (3,289) 178 3,587 932 298
Corporate & Other (122) (309) 374 3 252 (306)
------ ------- --- ----- ----- ------
Total Auto and
Other 632 (3,598) 552 3,590 1,184 (8)
------ ------- --- ----- ----- ------
GMAC 24 1,282 - - 24 1,282
Other Financing 86 (685) - 690 86 5
------ ------- --- ----- ----- ------
Total Financing 110 597 - 690 110 1,287
------ ------- --- ----- ----- ------
Total income (loss)
from continuing
operations $742 $(3,001) $552 $4,280 $1,294 $1,279
Income from
discontinued
operations 211 220 - - 211 220
------ ------- --- ----- ----- ------
Net income (loss) $953 $(2,781) $552 $4,280 $1,505 $1,499
====== ======= === ===== ====== ======
Income tax expense
(benefit)
GMNA $(75) $(2,225) $41 $2,098 $(34) $(127)
GME 97 26 31 135 128 161
GMLAAM 136 85 - - 136 85
GMAP 80 356 19 (370) 99 (14)
Auto Eliminations (3) (2) - - (3) (2)
------ ------- --- ----- ----- ------
Total GMA 235 (1,760) 91 1,863 326 103
Corporate & Other (666) (628) 201 1 (465) (627)
------ ------- --- ----- ----- ------
Total Auto and
Other (431) (2,388) 292 1,864 (139) (524)
------ ------- --- ----- ----- ------
GMAC (4) 583 - - (4) 583
Other Financing 54 259 - (257) 54 2
------ ------- --- ----- ----- ------
Total Financing 50 842 - (257) 50 585
------ ------- --- ----- ----- ------
Income tax expense
(benefit) $(381) $(1,546) $292 $1,607 $(89) $61
====== ======= === ===== ====== ======
General Motors Corporation
Summary Corporate Financial Results
(Dollars in millions)
(Unaudited)
Year to Date
2007 and 2006
--------------
Reported Special Items Adjusted
-------- ------------- --------
2007 2006 2007 2006 2007 2006
Restated Restated
---- -------- ---- ---- ------ --------
Effective Tax Rate
Total GM Corp. (130)% 32% 35% 27% (8)% 6%
GMNA 24% 33% 34% 35% 18% 19%
GME 31% 68% 36% 35% 32% 38%
GMAC (20)% 31% -% -% (20)% 31%
Equity income (loss)
and minority
interests
GMNA $13 $77 $ - $ - $13 $77
GME 5 8 - - 5 8
GMLAAM - (2) - - - (2)
GMAP 47 151 - - 47 151
Auto
Eliminations (1) 2 - - - 2 -
------ ------- --- ----- ----- ------
Total GMA $67 $234 $ - $ - $67 $234
====== ======= === ===== ===== ======
General Motors Corporation
Operating Statistics
(Unaudited)
Second Quarter Year to Date
-------------- -------------
(Units in thousands) 2007 2006 2007 2006
------ ------ ------ ------
Worldwide Production
Volume
GMNA - Cars 402 462 801 958
GMNA - Trucks 740 775 1,404 1,534
----- ----- ----- -----
Total GMNA 1,142 1,237 2,205 2,492
GME 464 495 975 989
GMLAAM 233 206 455 400
GMAP 571 482 1,115 954
----- ----- ----- -----
Total Worldwide 2,410 2,420 4,750 4,835
===== ===== ===== =====
Vehicle Unit Deliveries
Chevrolet - Cars 218 227 405 422
Chevrolet - Trucks 376 434 737 810
Pontiac 96 105 175 204
GMC 131 129 241 234
Buick 47 63 90 125
Saturn 69 56 126 103
Cadillac 51 60 98 111
Other 26 30 51 58
----- ----- ----- -----
Total United States 1,014 1,104 1,923 2,067
Canada, Mexico, and
Other 186 186 333 346
----- ----- ----- -----
Total GMNA 1,200 1,290 2,256 2,413
GME 574 548 1,128 1,071
GMLAAM 293 245 564 475
GMAP * 338 312 726 635
----- ----- ----- -----
Total Worldwide 2,405 2,395 4,674 4,594
===== ===== ===== =====
Market Share
United States- Cars 19.2% 20.0% 19.2% 20.3%
United States -
Trucks 26.2% 27.9% 26.0% 27.1%
Total United States 22.8% 24.1% 22.8% 24.0%
Total North America 22.6% 23.9% 22.6% 23.7%
Total Europe 9.5% 9.2% 9.6% 9.3%
Total LAAM 17.0% 16.8% 16.9% 16.4%
Asia and Pac 6.7% 6.7% 7.0% 6.5%
Total Worldwide 13.3% 13.7% 13.1% 13.4%
U.S. Retail/Fleet Mix
% Fleet Sales - Cars 33.2% 33.7% 34.8% 37.4%
% Fleet Sales -
Trucks 22.3% 24.4% 20.4% 23.5%
Total Vehicles 26.7% 28.1% 26.1% 29.0%
GMNA Capacity Utilization
(2 shift rated) 94.7% 98.5% 91.4% 99.5%
* GMAP sales volume includes Wuling sales in China.
General Motors Corporation
Operating Statistics
(Unaudited)
Second Quarter Year to Date
2007 2006 2007 2006
------ ------ ------ ------
GM's Worldwide Cost of
Borrowing (2) 6.23% 5.84% 6.19% 5.67%
GMAC Period End Debt Spreads
Over U.S. Treasuries
2 Year 209 bp 300 bp
5 Year 273 bp 370 bp
10 Year 315 bp 390 bp
GMAC Automotive
Finance Operations
Consumer Credit
(North America)
Net charge-offs
as a % of managed
receivables 1.03% 1.07% 1.16% 1.13%
Retail contracts
30 days delinquent
- % of average number
of contracts
outstanding (3) 2.37% 2.38% 2.44% 2.35%
Share of GM retail sales
(U.S. only)
Total consumer volume
(retail and lease)
as % of retail sale 45% 44% 46% 46%
Smartlease as % of
retail sales 18% 18% 18% 20%
Worldwide Employment
at June 30 (in 000's)
United States Hourly 83 103
United States Salary 33 34
--- ---
Total United States 116 137
Canada, Mexico, and
Other 30 30
--- ---
GMNA 146 167
GME 59 63
GMLAAM 33 32
GMAP 33 34
GMAC - 31
Other 3 2
--- ---
Total United States 274 329
=== ===
Worldwide Payrolls
($Bil's) $4.4 $5.4 $8.9 $10.7
See footnotes.
General Motors Corporation
Footnotes:
(1) Auto Eliminations, Corporate & Other and
Other Financing include intercompany eliminations.
(2) Calculated by dividing total interest expense
(Excluding mark to market adjustments) by total debt.
(3) Excludes accounts in bankruptcy.
General Motors Corporation
Use of Non-GAAP Financial Measures
This press release and the accompanying tables include the
following non-GAAP financial measures: (a) adjusted net income,
(b) managerial cash flow, and (c) GM North America vehicle revenue
per unit. Each of these financial measures excludes the impact of
certain items and therefore has not been calculated in accordance
with U.S. generally accepted accounting principles, or GAAP.
Adjusted Net Income
Adjusted net income excludes charges for the special attrition
program, restructuring and impairments charges, and gains on the
sale of business interests. Each of the adjustments is described
in more detail below. This press release also contains a
reconciliation of each of these non-GAAP measures to its most
comparable GAAP financial measure.
Management believes that these non-GAAP financial measures
provide meaningful supplemental information regarding our operating
results because they exclude amounts that GM management does not
consider part of operating results when assessing the performance
of the organization and measuring the results of GM's performance.
In addition, GM has historically reported similar non-GAAP financial
measures. GM believes that inclusion of these non-GAAP financial
measures provides consistency and comparability with past earnings
releases. GM management uses these non-GAAP financial measures to
evaluate GM's performance and believes these measures allow GM
management to readily view operating trends, perform analytical
comparisons, benchmark performance among geographic regions and
assess whether the GM North American structural cost turnaround
plan is on target. Also, GM management uses adjusted net income
for forecasting purposes, and in determining its future capital
investment allocations. Also, adjusted net income is a key variable
in determining management incentive compensation. Accordingly, GM
believes these non-GAAP financial measures are useful to investors
in allowing for greater transparency of supplemental information
used by management in its financial and operational decision-making.
While GM believes that these non-GAAP financial measures
provide useful supplemental information, there are limitations
associated with the use of these non-GAAP financial measures. These
non-GAAP financial measures are not prepared in accordance with
GAAP, do not reflect a comprehensive system of accounting and may
not be completely comparable to similarly titled measures of other
companies due to potential differences in the exact method of
calculation between companies. Items such as the special
attrition program agreement and restructuring charges that are
excluded from GM's non-GAAP financial measures can have a material
impact on net earnings. As a result, these non-GAAP financial
measures have limitations and should not be considered in isolation
from, or as a substitute for, net earnings, cash flow from
operations or other measures of performance prepared in accordance
with GAAP. GM compensates for these limitations by using these
non-GAAP financial measures as supplements to GAAP financial
measures and by reviewing the reconciliations of the non-GAAP
financial measures to their most comparable GAAP financial measure.
Investors are encouraged to review the reconciliations of these
non-GAAP financial measures to their most comparable GAAP financial
measures that are included elsewhere in this press release.
General Motors Corporation
Use of Non-GAAP Financial Measures (Continued)
The following is a discussion of the adjustments to the comparable
GAAP financial measure that produces our non-GAAP financial measures:
- Special attrition program charges. Our non-GAAP financial measures
exclude the estimated charge associated with the special attrition
program agreement among the UAW, GM and Delphi. Management
believes it is useful in evaluating the performance of GM and
its management teams and business units during a particular
time period to exclude charges associated with the special
attrition program, because the charge occurs irregularly and is
generally associated with one-time structural changes to GM's
North America business. Accordingly, management does not
consider these costs as part of its core earnings for purposes
of evaluating the performance of the business, and excludes
such costs when evaluating the performance of the Corporation,
its business units and its management teams and when making
decisions to allocate resources among GM's business units.
- Restructuring and impairment charges. Our non-GAAP financial
measures exclude exit costs and related charges, primarily
consisting of severance costs and lease abandonment costs, and
any subsequent changes in estimates related to exit activities
as they relate to GM's significant restructurings, which involved
significant layoffs. Management believes the exclusion of
restructuring and impairment charges from adjusted net income
is useful because management does not consider these costs
part of GM's core earnings in evaluating GM's operational
managers and the exclusion permits investors to evaluate the
performance of our management the same way management does.
Additionally, management excludes restructuring and impairment
charges in its determinations regarding the allocation of
resources, such as capital investment, among the Corporation's
business units and as part of its forecasting and budgeting.
- Gains on the sale of business interests. The gains on the sale
of business interests are excluded from adjusted net income.
While GM is involved in sales of its business interests from
time to time and the Corporation may have significant gains or
losses from such sales in the future, such events have
historically occurred sporadically. Management excludes the
charges associated with these events when it evaluates the
Corporation's operations and for internal reporting, forecasting
purposes and allocation of additional resources.
- Delphi charges. Our non-GAAP financial measures exclude the
estimated charges associated with the restructuring of Delphi's
operations. Accordingly, management does not consider these
costs as part of its core earnings for purposes of evaluating
the performance of the business, and excludes such costs when
evaluating the performance of the Corporation, its business
units and its management teams and when making decisions to
allocate resources among GM's business units.
General Motors Corporation
Use of Non-GAAP Financial Measures (Concluded)
Managerial Cash Flow
GM also reports 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
GM's core business, before funding non-operating-related obligations
including debt maturities, dividends and other non-operating items.
Management uses this non-GAAP financial measure to assess its
automotive cash flow when evaluating the performance of GM, its
business units and its management teams and when making decisions
to allocate resources among GM's business units.
GM North America Vehicle Revenue per Unit
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 vehicles 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
on the GM credit card. Management also includes sales to daily
car rental companies in revenue per vehicle, although they are
not treated as sales under GAAP reporting because of GM's
repurchase obligations.
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in millions, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
2007 2006 2007 2006
--------- --------- --------- -------
(Unaudited)
(As restated) (As restated)
Net sales and revenue
Automotive sales........... $ 45,918 $ 44,812 $ 88,298 $ 87,808
Financial services and
insurance revenue.......... 894 9,087 1,830 17,934
-------- --------- --------- ---------
Total net sales and revenue. 46,812 53,899 90,128 105,742
-------- --------- --------- ---------
Costs and expenses
Automotive cost of sales... 41,674 47,406 80,407 87,177
Selling, general, and
administrative expense.... 3,293 3,219 6,604 6,585
Financial services and
insurance expense......... 811 7,727 1,694 16,012
Other expenses............. 575 1,208 575 1,208
-------- --------- --------- ---------
Total costs and expenses.... 46,353 59,560 89,280 110,982
-------- --------- --------- ---------
Operating income (loss).... 459 (5,661) 848 (5,240)
Equity in income (loss) of
GMAC LLC................... 118 -- (65) --
Automotive and other
interest expense........... (681) (694) (1,480) (1,332)
Automotive interest income
and other non-operating
income..................... 555 987 991 1,783
-------- --------- --------- ---------
Income (loss) from continuing
operations before income
taxes, other equity income
and minority interests..... 451 (5,368) 294 (4,789)
Income tax benefit.......... (320) (1,715) (381) (1,546)
Equity income and minority
interests, net of tax...... 13 159 67 242
-------- --------- --------- ---------
Income (loss) from
continuing operations..... 784 (3,494) 742 (3,001)
Income from discontinued
operations, net of tax (see
Note 3) ................... 107 111 211 220
-------- --------- --------- ---------
Net income (loss).......... $ 891 $ (3,383)$ 953 $ (2,781)
======== ========= ========= =========
Basic earnings (loss) per
share:
Continuing operations...... $ 1.38 $ (6.18)$ 1.31 $ (5.31)
Discontinued operations.... .19 .20 .37 .39
--------- --------- --------- ---------
Total....................... $ 1.57 $ (5.98)$ 1.68 $ (4.92)
========= ========= ========= =========
Weighted average common
shares outstanding, basic
(millions)................. 566 566 566 566
======== ========= ========= =========
Diluted earnings (loss) per
share:
Continuing operations...... $ 1.37 $ (6.18)$ 1.30 $ (5.31)
Discontinued operations.... .19 .20 .37 .39
--------- --------- --------- ---------
Total....................... $ 1.56 $ (5.98)$ 1.67 $ (4.92)
========= ========= ========= =========
Weighted average common
shares outstanding, diluted
(millions)................. 569 566 569 566
======== ========= ========= =========
Cash dividends per share.... $ .25 $ .25 $ .50 $ .50
======== ========= ========= =========
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in millions)
June 30, December 31, June 30,
2007 2006 2006
----------- ----------- --------
(Unaudited) (Unaudited)
(As restated)
ASSETS
Current Assets
Cash and cash equivalents........ $ 22,040 $ 23,774 $ 19,997
Marketable securities............ 1,573 138 115
--------- -------- --------
Total cash and marketable
securities..................... 23,613 23,912 20,112
Accounts and notes receivable, net 10,233 8,216 7,572
Inventories...................... 15,073 13,921 14,496
Assets held for sale............. 683 -- --
Equipment on operating leases, net 5,889 6,125 6,891
Deferred income taxes and other
current assets.................. 11,518 11,957 10,376
--------- ---------- ----------
Total current assets............ 67,009 64,131 59,447
Financing and Insurance
Operations Assets
Cash and cash equivalents........ 258 349 2,848
Assets held for sale............. -- -- 274,267
Equipment on operating leases, net 9,145 11,794 16,533
Investment in GMAC LLC........... 7,555 7,523 --
Other assets..................... 3,011 2,457 5,857
--------- -------- --------
Total Financing and Insurance
Operations Assets.............. 19,969 22,123 299,505
Non-Current Assets
Property, net.................... 41,404 41,934 38,639
Deferred income taxes............ 32,337 32,967 24,382
Prepaid pension.................. 18,305 17,366 37,480
Other assets..................... 7,503 7,671 9,538
--------- -------- --------
Total non-current assets........ 99,549 99,938 110,039
--------- -------- --------
Total Assets..................... $ 186,527 $186,192 $468,991
========= ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts payable (principally
trade).......................... $ 30,742 $ 26,931 $ 27,930
Short-term borrowings and current
portion of long-term debt....... 5,150 5,666 1,340
Liabilities related to assets
held for sale................... 526 -- --
Accrued expenses................. 35,487 35,225 48,516
--------- --------- ---------
Total current liabilities....... 71,905 67,822 77,786
Financing and Insurance
Operations Liabilities
Liabilities related to assets
held for sale................... -- -- 267,925
Debt............................. 7,133 9,438 12,849
Other liabilities and deferred
income taxes.................... 855 2,139 2,278
--------- -------- --------
Total Financing and Insurance
Operations Liabilities......... 7,988 11,577 283,052
Non-Current Liabilities
Long-term debt................... 34,134 33,067 32,946
Postretirement benefits other
than pensions................... 48,030 50,086 30,668
Pensions......................... 11,654 11,934 11,498
Other liabilities and deferred
income taxes.................... 15,106 15,957 20,014
--------- -------- --------
Total non-current liabilities... 108,924 111,044 95,126
--------- -------- --------
Total liabilities................ 188,817 190,443 455,964
Minority interests............... 1,268 1,190 1,084
Stockholders' Equity (Deficit)
Preferred stock, no par value,
authorized 6,000,000, no shares
issued and outstanding.......... -- -- --
$1 2/3 par value common stock
(2,000,000,000 shares authorized,
756,637,541 and 565,864,695 shares
issued and outstanding at June 30,
2007, respectively 756,637,541 and
565,670,254 shares issued and
outstanding at December 31, 2006,
respectively and 756,637,541 and
565,607,779 shares issued and
outstanding at June 30, 2006,
respectively)................... 943 943 943
Capital surplus (principally
additional paid-in capital)..... 15,255 15,336 15,306
Retained earnings (deficit)...... 788 406 (117)
Accumulated other comprehensive
loss............................ (20,544) (22,126) (4,189)
--------- -------- --------
Total stockholders' equity
(deficit)..................... (3,558) (5,441) 11,943
--------- -------- --------
Total Liabilities, Minority
Interests, and Stockholders'
Equity (Deficit)................ $ 186,527 $186,192 $468,991
========= ======== ========