-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QvWz9ak8FgWdW/VO26E2woOQHftMh0GznKwj5/kbCwOId3zs1botU2KetjvIXiq3 z7ZqDA2sJnFMnrj4U3nAyw== 0000040730-00-000057.txt : 20000414 0000040730-00-000057.hdr.sgml : 20000414 ACCESSION NUMBER: 0000040730-00-000057 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20000413 ITEM INFORMATION: FILED AS OF DATE: 20000413 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GENERAL MOTORS CORP CENTRAL INDEX KEY: 0000040730 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLES & PASSENGER CAR BODIES [3711] IRS NUMBER: 380572515 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-00143 FILM NUMBER: 600101 BUSINESS ADDRESS: STREET 1: 300 RENAISSANCE CTR CITY: DETROIT STATE: MI ZIP: 48265-3000 BUSINESS PHONE: 3135565000 MAIL ADDRESS: STREET 1: 3044 W GRAND BOULEVARD CITY: DETROIT STATE: MI ZIP: 48202-3091 8-K 1 GM'S 1ST QTR EARNINGS RELEASE SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549-1004 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported) April 13, 2000 ---------------- GENERAL MOTORS CORPORATION ----------------------------------------------------- (Exact name of registrant as specified in its charter) STATE OF DELAWARE 1-143 38-0572515 - ---------------------------- ----------------------- ------------------- (State or other jurisdiction (Commission File Number) (I.R.S. Employer of incorporation) Identification No.) 300 Renaissance Center, Detroit, Michigan 48265-3000 - -------------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (313)-556-5000 -------------- - 1 - ITEM 5. OTHER EVENTS On April 13, 2000, a news release was issued on the subject of first quarter consolidated earnings for General Motors Corporation (GM). The news release did not include certain financial statements, related footnotes and certain other financial information that will be filed with the Securities and Exchange Commission as part of GM's Quarterly Report on Form 10-Q. Following is the first quarter earnings release for GM, and their subsidiary Hughes Electronics Corporation's (Hughes) earnings release dated April 12, 2000. GM'S FIRST-QUARTER 2000 EARNINGS PER SHARE OF $2.80 SET FIRST-QUARTER RECORD DETROIT -- General Motors Corp. (NYSE: GM) today reported an all-time first-quarter record of $2.80 diluted earnings per share of GM $1-2/3 par value common stock in the first quarter of 2000 with continued strong performance by GM's automotive and financial services sectors. That compares with $2.68 earnings per share in the first quarter of 1999, the previous first-quarter record. Following are key data from the first quarter (see Highlights for details): - Net sales and revenues totaled $46.9 billion. - Net income totaled $1.8 billion. - GM's global automotive operations net income totaled $1.5 billion. - General Motors Acceptance Corp. (GMAC) net income totaled $397 million. - Hughes, which continues to invest heavily in the growth of its DIRECTV business, had a net loss of $77 million. "We kept our momentum going in the first quarter," said GM Chairman and Chief Executive Officer John F. Smith, Jr. "Our global automotive operations and GMAC posted increases over the strong results in the same period last year." Smith said, "Record market demand in North America and Europe was accompanied by unrelenting competitive pressures, while economic conditions continued to affect markets in the Latin America and Asia-Pacific regions. We're particularly pleased that GM Europe improved its profitability during the period, and that both GM Latin America/Africa/Middle East and GM Asia Pacific were profitable -- a significant improvement over the first quarter last year." Cash, marketable securities, and assets of the Voluntary Employees' Beneficiary Association (VEBA) trust invested in short-term fixed-income securities totaled $13.4 billion at March 31, 2000, compared with $16.2 billion at March 31, 1999, and $14.4 billion at Dec. 31, 1999. These cash amounts exclude GM's financing and insurance operations. The corporation's 2000 first-quarter return on net assets (RONA) for continuing operations on an annualized basis, excluding Hughes, was 15.9 percent, compared with 15.6 percent in the first quarter of 1999. Following is a summary of income from GM's business segments in the first quarter of 2000, compared with the prior-year period (see "Highlights" for additional information): - 2- First Quarter Income (Loss) ($ in Millions) First Quarter 2000 1999 ------- ------- GM North America $1,290 $1,408 GM Europe $221 $174 GM Latin America/Africa /Mid-East $1 $(25) GM Asia Pacific $7 $(60) Other Automotive $(1) $13 ------- ------- Total Automotive $1,518 $1,510 GMAC $397 $392 Hughes $(77) $78 Other $(55) $(160) ---- ----- Total Income from Continuing Operations $1,783 $1,820 GM Automotive's net margin was 4.0 percent in the first quarter of 2000, compared with a net margin of 4.3 percent in the first quarter of 1999. "GM's North American operations posted strong results, with first-quarter results second only to the record-setting performance in the first quarter of 1999," said GM President and Chief Operating Officer G. Richard Wagoner, Jr. "In addition, GM's three other automotive regions all posted significant profit improvements. Although GM Europe continues to face a fiercely competitive pricing environment, its net income increased 27 percent while unit-sales volume rose about 6 percent," he said. "We're particularly pleased that our Latin America and Asia-Pacific regions moved into profitable positions in the first quarter, compared with the losses each region posted in the first quarter of 1999," Wagoner said. "Significant challenges remain in both regions due to continuing economic pressures, but the teams are continuing to focus on the winning combination of delivering strong products to these key growth markets while aggressively reducing costs." "GMAC's first-quarter-2000 results were up year over year despite the unfavorable impact of interest rate increases," Smith said. "Our North American auto financing operation showed continued strength in a very competitive market." Hughes Electronics' net sales and revenues increased 30 percent to $2.1 billion in the first quarter of 2000, from $1.6 billion in the prior-year period. "The revenue increase was primarily driven by continued growth in the DIRECTV business, which added a record 405,000 net new subscribers during the quarter," Smith said. "DIRECTV continues to be the world's largest direct-to-home provider of digital entertainment programming with more than 8.3 million subscribers worldwide." Hughes' net loss in the first quarter of 2000 was primarily related to investments for future growth opportunities in its communications services, which are expected to result in future increases in revenues and profits. The Hughes results were also affected by restructuring costs related to DIRECTV Japan (see Highlights). # # # - 3 - In this news release, use of the words anticipate, expect, should, believe, plan, intensify, overcome, opportunities and similar words are associated with forward-looking statements that are inherently subject to numerous risks and uncertainties. Accordingly, there can be no assurance that the results described in such forward-looking statements will be realized. The principal risk factors that may cause actual results to differ materially from those expressed in forward-looking statements contained in this news release are described in various documents filed by GM with the U.S. Securities and Exchange Commission, including GM's Annual Report on Form 10-K for the year ended Dec. 31, 1999, filed March 13, 2000, (at page II-20). * * * * * * - 4 - HIGHLIGHTS - Q1 Financial Results (Dollars in Millions Except Per Share Amounts) Three Months Ended March 31, ---------------------- 2000 1999 --------- --------- Net sales and revenues Manufactured products $40,396 $36,620 Financial services 4,075 3,509 Other income 2,387 2,306 -------- -------- Total net sales and revenues $46,858 $42,435 -------- -------- Income from continuing operations $1,783(3) $1,820 Income from discontinued operations - 242 -------- -------- Consolidated net income $1,783(3) $2,062 Net profit margin from continuing operations 3.8% 4.3% ............................................................. Earnings Attributable to Common Stocks $1-2/3 par value Continuing operations $1,786 $1,783 Discontinued operations - 242 -------- -------- $1-2/3 par value $1,786 $2,025 Class H $(32) $21 ............................................................. Basic Earnings Per Share Attributable to Common Stocks $1-2/3 par value Continuing operations $2.88 $2.73 Discontinued operations - 0.37 -------- -------- $1-2/3 par value $2.88 $3.10 Class H $(0.23) $0.20 ............................................................. Diluted Earnings Per Share Attributable to Common Stocks $1-2/3 par value Continuing operations $2.80 $2.68 Discontinued operations - 0.36 -------- -------- $1-2/3 par value $2.80 $3.04 Class H $(0.23) $0.19 ............................................................. Cash Dividends Per Share of Common Stocks $1-2/3 par value $0.50 $0.50 Class H $ - $ - ............................................................. Book Value Per Share of Common Stocks March 31, Dec. 31, March 31, 2000 1999 1999 -------- ------- -------- $1-2/3 par value $29.42 $27.02 $22.40 Class H $17.65 $16.21 $13.44 ............................................................. See footnotes on page 8. Continues - 5 - HIGHLIGHTS - Q1 Net Income by Segment (Dollars in Millions) Income/(Loss) Three Months Ended March 31, ---------------------- 2000 1999 -------- -------- GM North America (GMNA) $1,290 $1,408 GM Europe (GME) 221 174 GM Latin America/Africa/Mid-East (GMLAAM) 1 (25) GM Asia/Pacific (GMAP) 7 (60) Other Automotive (1) 13 ----- ----- Total GM Automotive (GMA) $1,518 $1,510 Hughes (1) (77)(3,5) 78 Other (36) (141) ----- ----- Total Automotive, Communications Services, and Other Operations $1,405(3) $1,447 GMAC $397 $392 Other (19) (19) ----- ----- Total Financing and Insurance Operations $378 $373 ----- ----- Income from continuing operations $1,783(3) $1,820 Income from discontinued operations - 242 ----- ----- Consolidated Net Income $1,783(3) $2,062 ===== ===== Three Months Ended March 31, 2000 -------------------------------- GMNA GME GMLAAM GMAP ----- ------ ------ ------ Reported -------- Total net sales and revenues $30,141 $6,834 $1,390 $863 ------ ----- ----- --- Pre-tax income (loss) $1,922 $349 $(36) $27 Income tax expense (benefit) 615 130 (23) 10 Equity income/(loss) and minority interests (17) 2 14 (10) ----- ----- ----- --- Net income $1,290 $221 $1 $7 ===== ===== ===== === Net profit margin 4.3% 3.2% 0.1% 0.8% Effective income tax rate 32.0% 37.2% 63.9% 37.0% Three Months Ended March 31, 1999 -------------------------------- GMNA GME GMLAAM GMAP ----- ------ ------ ------ Reported -------- Total net sales and revenues $28,068 $6,277 $1,033 $647 ------ ----- ----- --- Pre-tax income (loss) $2,097 $281 $(58) $(25) Income tax expense (benefit) 665 105 (36) (6) Equity income/(loss) and minority interests (24) (2) (3) (41) ----- ---- --- --- Net income (loss) $1,408 $174 $(25) $(60) ===== ==== === === Net profit (loss) margin 5.0% 2.8% (2.4%) (9.3%) Effective income tax rate 31.7% 37.4% 62.1% 24.0% See footnotes on page 8. Continues - 6 - HIGHLIGHTS - Q1 Operating Information Three Months Ended March 31, ---------------------- 2000 1999 --------- ---------- Worldwide Wholesale Sales (units in 000s) United States: Cars 622 671 Trucks 674 637 ------ ------ Total United States 1,296 1,308 Canada and Mexico 193 193 ------ ------ Total GM North America 1,489 1,501 ------ ------ GME 499 470 GMLAAM 135 122 GMAP 116 92 ------ ------ Total International 750 684 ------ ------ Total Worldwide 2,239 2,185 ====== ====== .................................................... Vehicle Unit Deliveries (units in 000s) United States Chevrolet - Cars 233 212 - Trucks 453 376 Pontiac 155 153 GMC 139 121 Buick 103 107 Oldsmobile 77 94 Saturn 64 51 Cadillac 52 39 Other 7 8 ------ ------ Total United States 1,283 1,161 Canada and Mexico 159 153 ------ ------ Total GM North America 1,442 1,314 ------ ------ GME 518 508 GMLAAM 133 125 GMAP 111 112 ------ ------ Total International 762 745 ------ ------ Total Worldwide 2,204 2,059 ====== ====== .................................................... Market Share United States Cars 28.9% 31.3% Trucks 28.3% 26.4% Total 28.6% 28.8% Total North America 28.4% 28.7% Total Europe 9.4% 9.6% Total Latin America(4) 19.7% 19.2% Total Asia and Pacific 3.4% 3.5% Total Worldwide 15.0% 14.9% ..................................................... U.S. Retail/Fleet Mix % Fleet Sales - Cars 29.0% 30.7% % Fleet Sales - Trucks 15.1% 13.8% Total vehicles 22.1% 22.9% .................................................... Days Supply of Inventory - U.S. Cars 82 76 Trucks 86 84 .................................................... Capacity Utilization % U.S. and Canada (2-shift rated) 87.6% 87.5% .................................................... GMNA Net Price (%) (0.7%) (0.8%) .................................................... See footnotes on page 8. Continues - 7 - HIGHLIGHTS - Q1 Other Financial Information (Dollars in Millions Except Per Share Amounts) Three Months Ended March 31, ---------------------- 2000 1999 --------- ---------- Depreciation and Amortization (2) Depreciation $990 $802 Amortization of special tools 654 619 Amortization of intangible assets 71 31 ------ ----- Total $1,715 $1,452 ====== ===== .................................................... Worldwide Employment at March 31 (in 000s) GMNA 214 222 GME 90 81 GMLAAM 23 23 GMAP 11 10 Hughes 18 16 GMAC 26 24 Other 13 11 ------ ------ Total 395 387 ====== ====== .................................................... Worldwide Payrolls $5,543 $5,354 .................................................... (1) Excludes the effects of purchase accounting adjustments related to General Motors' acquisition of Hughes in 1985. (2) Amounts exclude depreciation and amortization charges incurred by the financing and insurance operations. (3) Q1 2000 net income (loss) includes a $13 million net loss at Hughes related to the discontinuation of DIRECTV Japan's operations and migration of its subscribers to SkyPerfecTV. The net loss is comprised of a pre-tax loss of approximately $171 million, partially offset by a $158 million tax benefit associated with DIRECTV Japan's higher tax basis. (4) Latin America excludes the Middle East and Africa. (5) Excludes Hughes Series A Preferred Stock dividends payable to General Motors. - 8 - GENERAL MOTORS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Months Ended March 31, --------- 2000 1999 ---- ---- (Dollars in Millions Except Per Share Amounts) GENERAL MOTORS CORPORATION AND SUBSIDIARIES Manufactured products sales and revenues $40,396 $36,620 Financing revenues 4,075 3,509 Other income 2,387 2,306 ------- ------- Total net sales and revenues 46,858 42,435 ------ ------ Cost of sales and other operating expenses, exclusive of items listed below 33,465 30,666 Selling, general, and administrative expenses 4,786 3,822 Depreciation and amortization expense 3,238 2,724 Interest expense 2,228 1,845 Other expenses 509 438 -------- -------- Total costs and expenses 44,226 39,495 Income from continuing operations before income taxes and minority interests 2,632 2,940 Income tax expense 783 1,029 Minority interests 2 (14) Losses of nonconsolidated associates (68) (77) ------ ------ Income from continuing operations 1,783 1,820 Income from discontinued operations - 242 ------ ------ Net income 1,783 2,062 Dividends on preference stocks (29) (16) ----- ------ Earnings attributable to common stocks $1,754 $2,046 ===== ===== Basic earnings per share attributable to common stocks $1-2/3 par value Continuing operations $2.88 $2.73 Discontinued operations - 0.37 ---- ---- Earnings per share attributable to $1-2/3 par value $2.88 $3.10 ==== ==== Earnings per share attributable to Class H ($0.23) $0.20 ==== ==== Diluted earnings per share attributable to common stocks $1-2/3 par value Continuing operations $2.80 $2.68 Discontinued operations - 0.36 ---- ---- Earnings per share attributable to $1-2/3 par value $2.80 $3.04 ==== ==== Earnings per share attributable to Class H ($0.23) $0.19 ==== ==== - 9 - CONSOLIDATED STATEMENTS OF INCOME - concluded (Unaudited) Three Months Ended March 31, --------- 2000 1999 ---- ---- (Dollars in Millions) AUTOMOTIVE, COMMUNICATIONS SERVICES, AND OTHER OPERATIONS Manufactured products sales and revenues $40,396 $36,620 Other income 799 903 ------ ------ Total net sales and revenues 41,195 37,523 ------ ------ Cost of sales and other operating expenses, exclusive of items listed below 33,465 30,666 Selling, general, and administrative expenses 3,480 2,741 Depreciation and amortization expense 1,715 1,452 ------ ------ Total operating costs and expenses 38,660 34,859 ------ ------ Interest expense 216 194 Other expenses 168 58 Net expense from transactions with Financing and Insurance Operations 139 94 ----- ------ Income from continuing operations before income taxes and minority interests 2,012 2,318 Income tax expense 542 788 Minority interests 3 (6) Losses of nonconsolidated associates (68) (77) ------ ------ Income from continuing operations 1,405 1,447 Income from discontinued operations - 242 ------ ------ Net income - Automotive, Communications Services, and Other Operations $1,405 $1,689 ===== ===== Three Months Ended March 31, --------- 2000 1999 ---- ---- (Dollars in Millions) FINANCING AND INSURANCE OPERATIONS Financing revenues $4,075 $3,509 Insurance, mortgage, and other income 1,588 1,403 ----- ----- Total revenues and other income 5,663 4,912 ----- ----- Interest expense 2,012 1,651 Depreciation and amortization expense 1,523 1,272 Operating and other expenses 1,306 1,081 Provisions for financing losses 107 119 Insurance losses and loss adjustment expenses 234 261 ------ ------ Total costs and expenses 5,182 4,384 ----- ----- Net income from transactions with Automotive, Communications Services, and Other Operations (139) (94) --- ---- Income before income taxes 620 622 Income tax expense 241 241 Minority interests (1) (8) ----- ----- Net income - Financing and Insurance Operations $378 $373 === === - 10 - CONSOLIDATED BALANCE SHEETS Mar. 31, Mar.31, 2000 Dec. 31, 2000 GENERAL MOTORS CORPORATION AND SUBSIDIARIE (Unaudited) 1999 (Unaudited) --------- ---- --------- ASSETS (Dollars in Millions) Automotive, Communications Services, and Other Operations Cash and cash equivalents $8,497 $9,730 $12,081 Marketable securities 1,948 1,698 1,137 ------- ------- ------- Total cash and marketable securities 10,445 11,428 13,218 Accounts and notes receivable (less allowances) 5,552 5,093 4,686 Inventories (less allowances) 12,028 10,638 11,566 Net assets of discontinued operations - - 3,191 Equipment on operating leases (less accumulated depreciation) 5,963 5,744 6,048 Deferred income taxes and other current assets 9,491 9,006 9,537 ------- ------- ------- Total current assets 43,479 41,909 48,246 Equity in net assets of nonconsolidated associates 2,158 1,711 1,659 Property - net 33,177 32,779 31,636 Intangible assets - net 8,808 8,527 10,170 Deferred income taxes 15,100 15,277 15,410 Other assets 25,372 25,358 13,565 -------- -------- -------- Total Automotive, Communications Services, and Other Operations assets 128,094 125,561 120,686 Financing and Insurance Operations Cash and cash equivalents 910 712 502 Investments in securities 9,016 9,110 8,703 Finance receivables - net 84,581 80,627 73,839 Investment in leases and other receivables 37,350 36,407 32,707 Other assets 21,243 21,312 15,400 Net receivable from Automotive, Comm. Serv., and Other Operations 1,407 1,001 339 ----- ----- --- Total Financing and Insurance Operations assets 154,507 149,169 131,490 ------- ------- ------- Total assets $282,601 $274,730 $252,176 ======= ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY Automotive, Communications Services, and Other Operations Accounts payable (principally trade) $17,649 $17,254 $16,162 Loans payable 2,041 1,991 869 Accrued expenses 33,214 32,854 33,210 Net payable to Financing and Insurance Operations 1,407 1,001 339 ------ ------ ------ Total current liabilities 54,311 53,100 50,580 Long-term debt 8,587 7,415 7,011 Postretirement benefits other than pensions 34,532 34,166 34,416 Pensions 3,395 3,339 3,761 Other liabilities and deferred income taxes 17,214 17,426 17,768 -------- -------- ------- Total Automotive, Communications Services and Other Operations liabilities 118,039 115,446 113,536 Financing and Insurance Operations Accounts payable 4,616 4,262 4,405 Debt 124,492 122,282 106,379 Other liabilities and deferred income taxes 12,202 11,282 10,395 -------- -------- ------- Total Financing and Insurance Operations liabilities 141,310 137,826 121,179 Minority interests 621 596 580 General Motors - obligated mandatorily redeemable preferred securities of subsidiary trusts holding solely junior subordinated debentures of General Motors Series D 79 79 79 Series G 139 139 141 Stockholders' equity Preference stocks - - 1 $1-2/3 par value common stock (issued, 621,602,927; 619,412,233 and 649,568,145 shares) 1,036 1,033 1,083 Class H common stock (issued, 138,512,612; 137,115,187 and 106,641,918 shares) 14 14 11 Capital surplus (principally additional paid-in capital) 14,031 13,794 13,276 Retained earnings 8,404 6,961 8,703 ------- ------- ------- Subtotal 23,485 21,802 23,074 Accumulated foreign currency translation adjustments (2,115) (2,033) (1,782) Net unrealized gains on securities 1,164 996 458 Minimum pension liability adjustment (121) (121) (5,089) ------ ------ ----- Accumulated other comprehensive loss (1,072) (1,158) (6,413) ------ ------ ----- Total stockholders' equity 22,413 20,644 16,661 ------- ------- ------- Total liabilities and stockholders' equity $282,601 $274,730 $252,176 ======= ======= ======= - 11 - CONSOLIDATED BALANCE SHEETS - concluded Mar. 31, Mar. 31, 2000 Dec.31, 2000 (Unaudited) 1999 (Unaudited) --------- ---- --------- (Dollars in Millions) AUTOMOTIVE, COMMUNICATIONS SERVICES, AND OTHER OPERATIONS ASSETS Cash and cash equivalents $8,497 $9,730 $12,081 Marketable securities 1,948 1,698 1,137 ------- ------- ------- Total cash and marketable securities 10,445 11,428 13,218 Accounts and notes receivable (less allowances) 5,552 5,093 4,686 Inventories (less allowances) 12,028 10,638 11,566 Net assets of discontinued operations - - 3,191 Equipment on operating leases (less accumulated depreciation) 5,963 5,744 6,048 Deferred income taxes and other current assets 9,491 9,006 9,537 ------ ------ ------ Total current assets 43,479 41,909 48,246 Equity in net assets of nonconsolidated associates 2,158 1,711 1,659 Property - net 33,177 32,779 31,636 Intangible assets - net 8,808 8,527 10,170 Deferred income taxes 15,100 15,277 15,410 Other assets 25,372 25,358 13,565 ------- ------- ------- Total Automotive, Communications Services, and Other Operations assets $128,094 $125,561 $120,686 ======= ======= ======= LIABILITIES AND GM INVESTMENT Accounts payable (principally trade) $17,649 $17,254 $16,162 Loans payable 2,041 1,991 869 Accrued expenses 33,214 32,854 33,210 Net payable to Financing and Insurance Operations 1,407 1,001 339 -------- ------ ------- Total current liabilities 54,311 53,100 50,580 Long-term debt 8,587 7,415 7,011 Postretirement benefits other than pensions 34,532 34,166 34,416 Pensions 3,395 3,339 3,761 Other liabilities and deferred income taxes 17,214 17,426 17,768 -------- -------- ------- Total Automotive, Communications Services, and Other Operations liabilities 118,039 115,446 113,536 Minority interests 595 574 520 GM investment in Automotive, Communications Services, and Other Operations 9,460 9,541 6,630 -------- -------- -------- Total Automotive, Communications Services, and Other Operations liabilities and GM investment $128,094 $125,561 $120,686 ======= ======= ======= Mar. 31, Mar. 31, 2000 Dec.31, 2000 FINANCING AND INSURANCE OPERATIONS (Unaudited) 1999 (Unaudited) --------- ---- --------- (Dollars in Millions) ASSETS Cash and cash equivalents $910 $712 $502 Investments in securities 9,016 9,110 8,703 Finance receivables - net 84,581 80,627 73,839 Investment in leases and other receivables 37,350 36,407 32,707 Other assets 21,243 21,312 15,400 Net receivable from Automotive, Communications Services, and Other Operations 1,407 1,001 339 ------- ------- ------- Total Financing and Insurance Operations assets $154,507 $149,169 $131,490 ======= ======= ======= LIABILITIES AND GM INVESTMENT Accounts payable $4,616 $4,262 $4,405 Debt 124,492 122,282 106,379 Other liabilities and deferred income taxes 12,202 11,282 10,395 ------- ------- ------- Total Financing and Insurance Operations liabilities 141,310 137,826 121,179 Minority interests 26 22 60 GM investment in Financing and Insurance Operations 13,171 11,321 10,251 ------- ------- ------- Total Financing and Insurance Operations liabilities and GM investment $154,507 $149,169 $131,490 ======== ======== ======== - 12 - CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Three Months Ended March 31, ---------------------------- 2000 1999 -------- --------- (Dollars in Millions) GENERAL MOTORS CORPORATION AND SUBSIDIARIES Net cash provided by operating activities $6,104 $15,094 Cash flows from investing activities Expenditures for property (1,805) (1,384) Investments in marketable securities - acquisitions (6,828) (7,553) Investments in marketable securities - liquidations 6,981 6,344 Mortgage servicing rights - acquisitions (178) (327) Mortgage servicing rights - liquidations - - Finance receivables - acquisitions (51,978) (42,969) Finance receivables - liquidations 35,252 31,921 Proceeds from sales of finance receivables 12,248 7,375 Operating leases - acquisitions (6,655) (5,898) Operating leases - liquidations 3,502 3,129 Investments in companies, net of cash acquired (154) (514) Other 146 (170) ----- ------ Net cash used in investing activities (9,469) (10,046) ----- ------ Cash flows from financing activities Net decrease in loans payable (589) (5,231) Long-term debt - borrowings 8,940 7,970 Long-term debt - repayments (5,610) (3,980) Repurchases of common and preference stocks (132) (979) Proceeds from issuing common and preference stocks 156 284 Cash dividends paid to stockholders (339) (343) ----- ----- Net cash provided by (used in) financing activities 2,426 (2,279) ----- ----- Effect of exchange rate changes on cash and cash equivalents (96) (188) ------ ------ Net cash (used in) provided by continuing operations (1,035) 2,581 Net cash provided by discontinued operations - 128 ------ ------ Net (decrease) increase in cash and cash equivalents (1,035) 2,709 Cash and cash equivalents at beginning of the period 10,442 9,874 ------ ------ Cash and cash equivalents at end of the period $9,407 $12,583 ===== ====== - 13 - CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - concluded (Unaudited)
Three Months Ended March 31, ---------------------------- 2000 1999 ---- ---- Automotive, Financing Automotive, Financing Comm.Serv. and Comm.Serv. and and Other Insurance and Other Insurance --------- --------- --------- --------- (Dollars in Millions) Net cash provided by operating activities $2,449 $3,655 $9,188 $5,906 Cash flows from investing activities Expenditures for property (1,702) (103) (1,345) (39) Investments in other marketable securities - acquisitions (970) (5,858) (1,813) (5,740) Investments in other marketable securities - liquidations 720 6,261 1,077 5,267 Mortgage servicing rights - acquisitions - (178) - (327) Mortgage servicing rights - liquidations - - - - Finance receivables - acquisitions - (51,978) - (42,969) Finance receivables - liquidations - 35,252 - 31,921 Proceeds from sales of finance receivables - 12,248 - 7,375 Operating leases - acquisitions (2,174) (4,481) (2,465) (3,433) Operating leases - liquidations 1,763 1,739 1,281 1,848 Investments in companies, net of cash acquired (154) - (514) - Net investing activity with Financing and Insurance Operations (998) - 75 - Other (291) 437 (1,162) 992 ----- ----- ----- ----- Net cash used in investing activities (3,806) (6,661) (4,866) (5,105) ----- ----- ----- ----- Cash flows from financing activities Net decrease in loans payable (25) (564) (485) (4,746) Long-term debt - borrowings 1,186 7,754 411 7,559 Long-term debt - repayments (1,033) (4,577) (320) (3,660) Net financing activity with Automotive, Communications Services, and Other Operations - 998 - (75) Repurchases of common and preference stocks (132) - (979) - Proceeds from issuing common and preference stocks 156 - 284 - Cash dividends paid to stockholders (339) - (343) - --- ----- ----- --- Net cash (used in) provided by financing activities (187) 3,611 (1,432) (922) --- ----- ----- --- Effect of exchange rate changes on cash and cash equivalents (95) (1) (188) - Net transactions with Automotive/ Financing Operations 406 (406) (477) 477 ---- --- ----- --- Net cash (used in) provided by continuing operations (1,233) 198 2,225 356 Net cash provided by discontinued operations - - 128 - ----- --- ----- --- Net (decrease) increase in cash and cash equivalents (1,233) 198 2,353 356 Cash and cash equivalents at beginning of the period 9,730 712 9,728 146 ----- --- ----- --- Cash and cash equivalents at end of the period $8,497 $910 $12,081 $502 ===== === ====== ===
- 14 - HUGHES REPORTS 85% REVENUE GROWTH AND 57% EBITDA GROWTH IN FIRST QUARTER Results Driven by Continued Record Sales of DIRECTV(R)Service and Equipment, ============================================================================ and Expansion of PanAmSat's Satellite Fleet El Segundo, Calif., April 12, 2000 -- Hughes Electronics Corporation (Hughes), the world's leading provider of digital television entertainment, satellite services and wireless systems and services, today reported first quarter 2000 revenues increased 85.4% to $1,703.1 million, compared with $918.4 million in the first quarter of 1999. EBITDA(1) for the quarter increased 57.1% to $142.2 million and EBITDA margin(1) was 8.3%, compared to EBITDA of $90.5 million and EBITDA margin of 9.9% in the first quarter of 1999. "This quarter's results reflect the success of our ongoing strategy to be a services-driven company," explained Michael T. Smith, Hughes chairman and chief executive officer. "Each of our operating segments showed excellent revenue growth, with service revenues generating 84% of our total revenues in the quarter. The primary driver continued to be DIRECTV, where we added over half-a-million new subscribers worldwide, including 405,000 here in the United States. Additionally, Hughes Network Systems (HNS) shipped almost one million DIRECTV receiver systems in the quarter, and PanAmSat had strong revenue growth resulting from the expansion of its satellite fleet. "The EBITDA growth in the quarter was fueled by PanAmSat, as they continued to launch new satellites, sign-up blue-chip customers and achieve EBITDA margins of nearly 70%," Smith concluded. Hughes had a first quarter 2000 loss(2) of $76.6 million, compared to earnings(2) of $78.3 million in the same period for 1999. The decline was due to higher depreciation and amortization expenses related principally to the United States Satellite Broadcasting Company, Inc. (USSB) and PRIMESTAR transactions; an increase in net interest expense; and an increase in Hughes' portion of the operational losses of DIRECTV Japan (reported in "Other, net"). Also contributing to the change was the net effect of two one-time items in 1999 associated with discontinued operations. These were a one-time after-tax gain of $94 million related to the settlement of the Williams patent infringement case(3), which was partially offset by a one-time after-tax charge of $49 million associated with the termination of the Asia Pacific Mobile Telecommunications (APMT) satellite system contract. Also in the first quarter of 2000, Hughes reported a one-time pre-tax charge of $171 million (also reported in "Other, net") related to its previously announced agreement with SkyPerfecTV! and the discontinuation of the DIRECTV Japan business. The after-tax impact of this charge was a loss of $13 million, which includes the tax benefits associated with the write-off of Hughes' historical investments in DIRECTV Japan. - 15 - SEGMENT FINANCIAL REVIEW Direct-To-Home Broadcast First quarter revenues for the segment more than doubled to $1,173.8 million from $556.6 million in the first quarter of 1999. The segment had negative EBITDA of $9.2 million compared with EBITDA of $3.9 million in the first quarter of 1999. United States: DIRECTV reported quarterly revenues of $1,059 million, more than twice last year's first quarter revenues of $474 million. The increase was due to continued strong subscriber growth, as well as additional revenues resulting from the USSB and PRIMESTAR transactions. DIRECTV added a record 405,000 net new subscribers to its high-power DIRECTV service in the quarter, a 33% increase over the 304,000 net new subscribers added in the first quarter of 1999. In addition, 275,000 customers were transitioned from the PRIMESTAR By DIRECTV medium-power service to the high-power service in the quarter. As of March 31, 2000, DIRECTV had more than 8.3 million subscribers, including approximately one million customers subscribing to PRIMESTAR By DIRECTV. By comparison, DIRECTV had about 4.8 million subscribers as of March 31, 1999. EBITDA for the first quarter of 2000 was $31 million compared to EBITDA of $25 million in last year's first quarter. This increase was principally due to EBITDA contributions from the USSB and PRIMESTAR transactions as well as improved EBITDA resulting from the larger high-power subscriber base, which more than offset the higher marketing costs associated with the record subscriber growth in the quarter. Latin America:The DIRECTV business in Latin America generated $114 million in revenues for the quarter compared with $61 million in the first quarter of 1999. This increase was due to continued strong subscriber growth and additional revenues resulting from the consolidation of Galaxy Brasil, Ltda. (GLB)(4) and Grupo Galaxy Mexicana, S.A. de C.V. (GGM)(4). The DIRECTV service in Latin America added 105,000 net new subscribers in the first quarter of 2000, a 50% increase over the 70,000 acquired in the same period last year. The total number of DIRECTV subscribers in Latin America as of March 31, 2000 was 909,000. By comparison, DIRECTV subscribers in Latin America totaled 554,000 as of March 31, 1999. The DIRECTV business in Latin America had negative EBITDA of $38 million compared to negative EBITDA of $20 million for the same period in 1999. The change was primarily due to the impact of the consolidation of GLB and GGM and higher marketing expenses associated with the record subscriber growth. Japan: As part of an agreement announced in March 2000, the 425,000 DIRECTV Japan subscribers (as of March 31, 2000) will have the opportunity to migrate to the SkyPerfecTV! subscriber base and DIRECTV Japan's operations will be discontinued. In addition, Hughes obtained an equity interest in SkyPerfecTV! of approximately 6.6%. As a result of this agreement, Hughes recorded the previously mentioned one-time pre-tax charge of $171 million ($13 million after-tax). Hughes' share of DIRECTV Japan's operating loss was $59 million for the quarter, compared with a loss of $19 million in the first quarter of 1999. This higher loss was due to the increased investment in DIRECTV Japan that Hughes made in the third quarter of 1999, and higher marketing expenses. Hughes will continue to report its share of DIRECTV Japan's losses throughout 2000, at which time the business is expected to be discontinued. - 16 - Satellite Services PanAmSat, which is 81%-owned by Hughes, reported first quarter 2000 revenues of $299.1 million compared with $193.5 million in the prior year's period. The 54.6% increase was driven primarily by several large outright sales and sales-type leases of satellite transponders totaling $94 million for customers on the recently launched Galaxy XR satellite. Revenues from outright sales and sales-type leases represent substantial long term commitments for PanAmSat services and these transactions are subject to greater variation from period to period than are operating lease revenues. EBITDA for the segment in the quarter was $201.0 million, a 37.7% increase over first quarter 1999 EBITDA of $146.0 million. The increase in EBITDA was primarily due to the outright sales and sales-type leases in the first quarter of 2000. EBITDA margin in the first quarter of 2000 was 67.2%, compared to 75.5% in the same period of 1999. This decline was due to lower margins associated with the outright sales and sales-type leases. Excluding sales and sales-type lease activity in the first quarter of 2000, EBITDA was $153 million or 75% of corresponding revenues. Network Systems Hughes Network Systems (HNS) grew first quarter 2000 revenues 57.9% to $364.5 million, versus $230.9 million in the first quarter of 1999 principally due to higher sales of DIRECTV receiver equipment. HNS shipped 980,000 DIRECTV receiver systems in the first quarter of 2000, compared to 190,000 units in the same period last year. In the quarter, HNS attained EBITDA of $11.8 million and EBITDA margin of 3.2%, compared to negative EBITDA of $5.9 million in the first quarter of 1999. The improved EBITDA is primarily attributable to the increased revenue and profit resulting from higher volumes of DIRECTV receiver systems shipped in the current quarter, a one-time first quarter 1999 charge of $11 million associated with the termination of the APMT satellite system contract, and higher margins on sales of private business network systems in the first quarter of 2000. BALANCE SHEET From December 31, 1999 to March 31, 2000, the Company's consolidated cash balance declined $5.7 million to $232.5 million and total debt increased $448.4 million to $2,589.8 million. The principal cash requirements for the first three months of 2000 were related to capital expenditures for property, plant, equipment and satellites. Hughes Electronics Corporation is a unit of General Motors Corporation. The earnings of Hughes Electronics are used to calculate the earnings attributable to the General Motors Class H common stock (NYSE:GMH). NOTE: Hughes Electronics Corporation believes that some of the foregoing statements may constitute forward-looking statements. When used in this report, the words "estimate," "plan," "project," "anticipate," "expect," "intend," "outlook," "believe," and other similar expressions are intended to identify such forward-looking statements and information. Important factors that may cause actual results of Hughes to differ materially from the forward-looking statements in this report are set forth in the Form 10-Ks filed with the SEC by GM and Hughes. - -------------------- (1) EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is the sum of operating profit (loss) and depreciation and amortization. EBITDA margin is calculated by dividing EBITDA by total revenues. (2) Excludes the effects of purchase accounting adjustments related to General Motors' acquisition of Hughes in 1985. (3) Hughes was awarded a final judgement arising from its long-running Williams patent infringement case, which was originally filed by Hughes in 1973. The award resulted from the repeated infringement by the U.S. Government over a span of two decades of a patent that revolutionized communications satellite attitude control and made the geosynchronous satellite practical. A payment of $154.6 million was received in the first quarter of 1999 and the after-tax amount of $94.3 million was recorded in "Income from discontinued operations, net of taxes." (4) Galaxy Brasil, Ltda. (GLB) is the local operating company providing DIRECTV service in Brazil. Grupo Galaxy Mexicana, S.A. de C.V. (GGM) is the local operating company providing DIRECTV service in Mexico. SurFin Ltd., provides financing for DIRECTV receiving equipment in Latin America. As a result of transactions that were completed in July 1999 (GLB), February 1999 (GGM) and November 1998 (SurFin), Hughes now consolidates each of these companies from their respective dates of acquisition. ### - 17 - STATEMENT OF OPERATIONS AND AVAILABLE SEPARATE CONSOLIDATED NET INCOME (LOSS) (Dollars in Millions) Three Months Ended March 31, --------------------- 2000 1999 - ---------------------------------------------------------------------------- Revenues Direct broadcast, leasing and other services $1,432.0 $755.8 Product sales 271.1 162.6 - ---------------------------------------------------------------------------- Total Revenues 1,703.1 918.4 - ---------------------------------------------------------------------------- Operating Costs and Expenses Broadcast programming and other costs 667.8 313.9 Cost of products sold 198.3 136.2 Selling, general, and administrative expenses 694.8 377.8 Depreciation and amortization 204.7 110.9 - ---------------------------------------------------------------------------- Total Operating Costs and Expenses 1,765.6 938.8 - ---------------------------------------------------------------------------- Operating Loss (62.5) (20.4) Interest income 3.9 13.6 Interest expense (44.9) (6.9) Other, net (234.2) (17.3) - ---------------------------------------------------------------------------- Loss from Continuing Operations Before Income Taxes And Minority Interests (337.7) (31.0) Income tax benefit (221.8) (13.4) Minority interests in net losses of subsidiaries 7.6 6.5 - ---------------------------------------------------------------------------- Loss from continuing operations (108.3) (11.1) Income from discontinued operations, net of taxes 26.4 84.1 - ---------------------------------------------------------------------------- Net Income (Loss) (81.9) 73.0 Adjustments to exclude the effect of GM purchase accounting adjustments 5.3 5.3 - ---------------------------------------------------------------------------- Earnings (Loss) Excluding the Effect of GM Purchase Accounting Adjustments (76.6) 78.3 Preferred stock dividends (24.7) - - ---------------------------------------------------------------------------- Earnings (Loss) Used for Computation of Available Separate Consolidated Net Income (Loss) $(101.3) $78.3 ============================================================================ Available Separate Consolidated Net Income (Loss) Average number of shares of General Motors Class H Common Stock outstanding (in millions) (Numerator) 137.8 106.3 Average Class H dividend base (in millions) (Denominator) 431.5 400.2 Available Separate Consolidated Net Income (Loss) $(32.4) $20.8 ============================================================================ - 18 - SELECTED SEGMENT DATA (Dollars in Millions) Three Months Ended March 31, ------------------ 2000 1999 - --------------------------------------------------------------------------- DIRECT-TO-HOME BROADCAST Total Revenues $1,173.8 $556.6 EBITDA (1) (9.2) $3.9 EBITDA Margin (1) N/A 0.7% Operating Loss $(126.0) $(23.4) Depreciation and Amortization $116.8 $27.3 Capital Expenditures (2) $168.0 $77.6 - -------------------------------------------------------------------------- SATELLITE SERVICES Total Revenues $299.1 $193.5 EBITDA (1) 201.0 $146.0 EBITDA Margin (1) 67.2% 75.5% Operating Profit $127.3 $78.3 Operating Profit Margin 42.6% 40.5% Depreciation and Amortization $73.7 $67.7 Capital Expenditures (3) $158.0 $339.8 - -------------------------------------------------------------------------- NETWORK SYSTEMS Total Revenues $364.5 $230.9 EBITDA (1) $11.8 $(5.9) EBITDA Margin (1) 3.2% N/A Operating Profit (Loss) $0.6 $(17.8) Operating Profit Margin 0.2% N/A Depreciation and Amortization $11.2 $11.9 Capital Expenditures (4) $67.6 $2.2 - -------------------------------------------------------------------------- ELIMINATIONS and OTHER Total Revenues $(134.3) $(62.6) EBITDA (1) $(61.4) $(53.5) Operating Loss $(64.4) $(57.5) Depreciation and Amortization $3.0 $4.0 Capital Expenditures $20.7 $(32.2) - -------------------------------------------------------------------------- TOTAL Total Revenues $1,703.1 $918.4 EBITDA (1) $142.2 $90.5 EBITDA Margin (1) 8.3% 9.9% Operating Loss $(62.5) $(20.4) Depreciation and Amortization $204.7 $110.9 Capital Expenditures $414.3 $387.4 ========================================================================== (1) EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is the sum of operating profit (loss) and depreciation and amortization. EBITDA margin is calculated by dividing EBITDA by total revenues. (2) Includes expenditures related to satellites amounting to $11.6 million and $53.0 million in the first quarter of 2000 and 1999, respectively. (3) Includes expenditures related to satellites amounting to $146.0 million and $189.7 million in the first quarter of 2000 and 1999, respectively. Also included in the first quarter of 1999 amount is $141.3 million related to the early buy-out of a satellite sale-leaseback. (4) Includes expenditures related to satellites amounting to $53.7 million in the first quarter of 2000. - 19 - BALANCE SHEET (Dollars in Millions) March 31, December 31, ASSETS 2000 1999 - ------------------------------------------------------------------------------- Current Assets Cash and cash equivalents $232.5 $238.2 Accounts and notes receivable 987.0 960.9 Contracts in process 163.3 155.8 Inventories 319.7 236.1 Net assets of discontinued operations 1,322.4 1,224.6 Deferred income taxes 545.9 254.3 Prepaid expenses and other 969.5 788.1 - ---------------------------------------------------------------------------- Total Current Assets 4,540.3 3,858.0 Satellites - net 4,037.3 3,907.3 Property - net 1,314.6 1,223.0 Net Investment in Sales-type Leases 178.3 146.1 Intangible Assets - net 7,341.8 7,406.0 Investments and Other Assets 2,556.0 2,056.6 - ---------------------------------------------------------------------------- Total Assets $19,968.3 $18,597.0 ============================================================================ LIABILITIES AND STOCKHOLDER'S EQUITY Current Liabilities Accounts payable $1,147.6 $1,062.2 Deferred revenues 132.5 130.5 Short-term borrowings and current portion of long-term debt 732.6 555.4 Accrued liabilities and other 1,281.5 894.0 - ---------------------------------------------------------------------------- Total Current Liabilities 3,294.2 2,642.1 Long-Term Debt 1,857.2 1,586.0 Other Liabilities and Deferred Credits 1,399.8 1,454.2 Deferred Income Taxes 1,042.7 689.1 Commitments and Contingencies Minority Interests 564.2 544.3 Stockholder's Equity 11,810.2 11,681.3 - ---------------------------------------------------------------------------- Total Liabilities and Stockholder's Equity $19,968.3 $18,597.0 ============================================================================ Holders of GM Class H common stock have no direct rights in the equity or assets of Hughes, but rather have rights in the equity and assets of General Motors (which includes 100% of the stock of Hughes). - 20 - SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. GENERAL MOTORS CORPORATION -------------------------- (Registrant) Date April 13, 2000 ----------------- By s/Peter R. Bible ------------------------------- (Peter R. Bible, Chief Accounting Officer) - 21 - -----END PRIVACY-ENHANCED MESSAGE-----