8-K 1 q22005earnings072005.txt GENERAL MOTORS EARNINGS RELEASE FOR 2Q 2005 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549-1004 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported) July 20, 2005 GENERAL MOTORS CORPORATION -------------------------- (Exact Name of Registrant as Specified in its Charter) STATE OF DELAWARE 1-143 38-0572515 ----------------- ----- ---------- (State or other jurisdiction of (Commission (I.R.S. Employer Incorporation or Organization) File Number) Identification No.) 300 Renaissance Center, 48265-3000 Detroit, Michigan (Zip Code) ---------------------------------------------------------------------- (Address of Principal Executive Offices) Registrant's telephone number, including area code (313) 556-5000 -------------- ================================================================================ Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITIONS On July 20, 2005, a news release was issued on the subject of second 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. The following is the second quarter earnings release for GM. GM Reports Second-Quarter Financial Results - Adjusted loss $0.56 per share, reported loss $0.51 per share - GM North America posts loss, all other operating units profitable - Global market share 15.2 percent, up 0.5 point DETROIT - General Motors Corp. (NYSE: GM) today reported a loss of $318 million, or $0.56 per diluted share, in the second quarter of 2005, excluding special items and a tax-rate adjustment. These results compare with net income of $1.4 billion, or $2.42 per share, in the second quarter of 2004. Revenue was $48.5 billion, compared with $49.3 billion a year ago. For the second quarter of 2005, GM reported a loss of $286 million, or $0.51 per share, including special items. The special items include a $126-million restructuring charge at GM Europe, and recognition of the recurring tax benefits above those reflected in the 15-percent rate used in GM's adjusted earnings. These items had a net favorable effect of $32 million, or $0.05 per share. "Our second-quarter results reflect a mix of some important pluses and minuses," GM Chairman and Chief Executive Officer Rick Wagoner said. "On the positive side, sales were up in all regions and global market share increased as our new cars and trucks continued to gain traction and show strong customer acceptance. In addition, financial results were positive in four of our operating units, with GMAC and GM Latin America/Africa/Mid-East continuing their recent favorable performance and GM Europe and GM Asia Pacific showing significant improvement from the first quarter. "But, importantly, on the minus side, GM North America's financial performance continued to be very disappointing. While the results reflect a significant reduction in U.S. dealer inventory, with second-quarter inventories down 349,000 units from mid-year 2004 and 224,000 units from the first quarter of 2005, they also re-emphasize the need for us to significantly improve our cost structure in all major areas - material costs, productivity, capacity utilization and especially health care." GM financial results described throughout the remainder of this release exclude special items unless otherwise noted. See Highlights for reconciliation of adjusted results to results based on Generally Accepted Accounting Principles (GAAP). GM Automotive Operations GM's global-automotive operations reported a loss of $948 million in the second quarter of 2005, as profitable results in Europe, Asia and the Latin American/Mid-East region were more than offset by losses in North America. GM's global-automotive operations earned $579 million in the prior-year period. GM's global market share rose to 15.2 percent in the second quarter of 2005, compared with 14.7 percent in the year-ago period, and worldwide deliveries were up more than 10 percent. GM North America (GMNA) reported a loss of $1.2 billion in the second quarter of 2005, compared with earnings of $355 million in the second quarter of 2004. GM's market share in North America rose to 27.3 percent in the second quarter of 2005, up from 26.2 percent in the year-ago quarter. GMNA's second-quarter 2005 results were adversely affected by lower production volumes - down 142,000 units from the year-ago quarter, a less favorable product mix and increased health-care costs. Sales were up as a result of improved acceptance of new products and highly successful marketing programs. The combination of lower production and stronger sales helped to significantly reduce U.S. dealer inventories during the quarter to just over 1 million vehicles. "The inventory reduction in the second quarter is a real positive," Wagoner said. "That, plus the strong sales of our new products like the Chevrolet Cobalt and the Hummer H3 and the favorable results of the recent J.D. Power Initial Quality and Vehicle Dependability reports, are indicators that our intense focus on product excellence is paying dividends. We also continue to progress in the re-tooling of our sales and marketing strategy, including the successful value-based consumer marketing program in June. 2 "Where we are not yet making the progress we need is on the cost side of the business. With the intense competitive conditions and pricing pressures continuing in the North American market, it's clear that we need to move faster in implementing the key cost reduction strategies that I outlined at our recent Annual Meeting -- re-energizing our global sourcing efforts, improving U.S. capacity utilization and achieving fully competitive productivity levels," Wagoner said. "Finally, our health-care cost situation remains an extreme burden on our ability to compete; we continue to work intensely on solutions to this crisis with our labor unions." GM Europe (GME) reported earnings of $37 million in the second quarter of 2005, compared with a loss of $45 million in the year-ago quarter. These results reflect continued improvement in cost reduction and the favorable effects of the company's restructuring efforts. GM's market share in Europe was 9.7 percent in the second quarter of 2005, unchanged from the year-ago period. "We're pleased to achieve our first profitable quarter in five years in Europe, excluding restructuring costs, as GM Europe continues to make significant progress in its turnaround plan," Wagoner said. "The Opel/Vauxhall Astra remains a strong contributor to our overall results in Europe, and we're encouraged by the positive reviews of the new Zafira. We still have work to do in Europe to achieve sustainable profitability, but the improved results so far this year indicate we're on the right track." GM Asia Pacific (GMAP) earned $176 million in the second quarter of 2005, up significantly from the $60 million in the first quarter of this year, but below the $259 million earned in the year-ago quarter. GM's market share in the Asia-Pacific region rose to 6.3 percent in the second quarter from 5.6 percent a year ago, led by gains in China and Thailand. GM continues to turn in a solid performance in China with sales growing 37 percent in the second quarter, compared with an overall industry average of 17 percent. GM's market share in China rose to 11.4 percent in the second quarter of 2005, up from 9.8 percent in the year-ago period. "Our performance in China continues to be encouraging, especially considering our modest presence there just a few years ago," Wagoner said. "Going forward, we intend to capitalize on our momentum in China and take full advantage of the opportunities presented by this large and rapidly growing market. With the rollout of additional new vehicles in the second half of the year and the strength of our current lineup, we anticipate double-digit sales growth to continue in the second half of 2005." GM Daewoo Auto and Technology Co. delivered strong results in the second quarter of 2005, with sales gains in both the domestic and international markets. During the quarter GM increased its stake in GM Daewoo to 50.9 percent from 48.2 percent. As a result, GM has begun to consolidate GM Daewoo's financial results. "GM Daewoo has rapidly become a valuable contributor to the GM family, particularly with its growing role in GM product programs in the Asia Pacific region and around the world," Wagoner said. "Our increased investment is consistent with our strategy to further develop GM Daewoo as a major player in our global product development system." GM Latin America/Africa/Mid-East (GMLAAM) earned $33 million in the second quarter of 2005, compared with net income of $10 million a year ago. The latest results reflect higher sales volumes in most markets and continued progress on cost reduction. GM's market share in the LAAM region rose to 18.3 percent in the second quarter of 2005 from 17.1 percent a year ago. "We're pleased with the overall results in the region, and particularly our performance in the Mid-East and African areas, where GM's market share was up 2.8 percentage points in the second quarter of 2005," Wagoner said. GMAC General Motors Acceptance Corp. (GMAC) reported net income of $816 million in the second quarter of 2005, compared with $846 million in the second quarter of 2004, as lower earnings from financing operations were partially offset by increased earnings from mortgage and insurance operations. "GMAC once again reported impressive earnings despite a difficult funding environment and lower credit ratings," Wagoner said. "During the quarter, Residential Capital Corp., the newly formed holding company for GMAC's residential mortgage businesses, successfully completed its first global funding, raising $4 billion in a private placement. Our ongoing objective for GMAC is to ensure access to ample liquidity on a cost-competitive basis, while maintaining and building the extensive mutual synergies between GMAC and GM." 3 GMAC's financing operations earned $378 million in the second quarter of 2005, down from $452 million a year ago, reflecting lower net interest margins that were partially offset by improved used vehicle prices and favorable credit experience. Mortgage operations earned $338 million in the second quarter of 2005, up from the $319 million in the second quarter of 2004. GMAC's mortgage operations benefited from gains on its investment portfolio and favorable net servicing results. This was partially offset by increased borrowing costs and lower gains on sales of loans. Insurance operations reported earnings of $100 million in the second quarter of 2005, up from the $75 million in the second quarter of 2004. Continued improvement in net underwriting revenue due to favorable loss experience contributed to the increase in earnings quarter over quarter. GMAC continued to maintain adequate liquidity, with a total of $22.2 billion in cash and certain marketable securities as of June 30, 2005. GMAC also provided a significant source of cash flow to GM through the payment of a $500 million dividend in the second quarter, bringing total dividends paid to date in 2005 to $1 billion. Cash and Liquidity Cash, marketable securities, and readily available assets of the Voluntary Employees' Beneficiary Association (VEBA) trust, excluding financing and insurance operations, totaled $20.2 billion at June 30, 2005, up from $19.8 billion on March 31, 2005. During the second quarter, GM withdrew $1 billion from the VEBA trust to pay for retiree health care. On July 1, 2005, GM withdrew an additional $1 billion from the VEBA. # # # In this press release and related comments by General Motors management, our use of the words "expect," "anticipate," "estimate," "project," "forecast," "outlook," "target," "objective," "plan," "goal," "pursue," "on track," and similar expressions is intended to identify forward-looking statements. While these statements represent our current judgment on what the future may hold, and we believe these judgments are reasonable, actual results may differ materially due to numerous important factors that are described in GM's most recent report on SEC Form 10-K (at page II-20) which may be revised or supplemented in subsequent reports on SEC Forms 10-Q and 8-K. Such factors include, among others, the following: changes in economic conditions; currency-exchange rates or political stability; shortages of fuel, labor strikes or work stoppages; market acceptance of the corporation's new products; significant changes in the competitive environment; changes in laws, regulations and tax rates; and, the ability of the corporation to achieve reductions in cost and employment levels to realize production efficiencies and implement capital expenditures at levels and times planned by management. 4 General Motors Corporation List of Special Items - After Tax (dollars in millions except per share amounts) (unaudited) Management believes that the adjusted information set forth herein is useful to investors as it represents how Management views the results of operations and cash of the Corporation and, therefore, is the basis on which internal evaluation metrics are determined. The internal evaluation metrics are those used by the Corporation's Board of Directors to evaluate Management. Three Months Ended Year to Date June 30, 2005 June 30, 2005 --------------- -------------- Net $1-2/3 Net $1-2/3 Income EPS Income EPS ------ ----- ------ ----- REPORTED -------- Net income $(286) $(0.51) $(1,390) $(2.46) === ==== ===== ==== ADJUSTMENTS ----------- Salaried Attrition Program (A) 148 0.26 Plant and Facility Impairments (B) 84 0.15 GME Restructuring Charge (C) 126 0.22 548 0.97 Tax Items (D) (158) (0.27) (547) (0.97) --- ---- --- ---- Subtotal (32) (0.05) 233 0.41 ADJUSTED -------- --- ---- ----- ---- Adjusted Income $(318) $(0.56) $(1,157) $(2.05) === ==== ===== ==== (A) Salaried Attrition Program relates to voluntary early retirement and other separation programs in the U.S. in the first quarter of 2005. (B) Plant and Facility Impairments relates to the first quarter 2005 write-down to fair market value of various plant assets in connection with the cessation of production at the Lansing assembly plant. (C) In the fourth quarter of 2004, GM Europe announced a restructuring plan targeting a reduction in annual structural costs of an estimated $600 million by 2006. A total reduction of 12,000 employees, including 10,000 in Germany, from 2005-2007 through separation programs, early retirements, and selected outsourcing initiatives is expected. The restructuring charge of $126 million in the second quarter of 2005 relates to approximately 500 additional separations in the second quarter, as well as those charges related to previous separations that are required to be amortized over future periods. The year-to-date charge of $548 million also includes a separation cost of $422 million in the first quarter of 2005, which related to approximately 5,650 people. The Corporation's plan is on track and anticipates further separations and associated charges in the remaining two quarters of 2005 and into 2006 and 2007. The amount of such future separation charges will be recognized in the respective periods, and will depend both on the type of separations and associated workforce demographics. (D) Tax Items relate to tax benefits (including the Medicare Part D benefit in the U.S), in excess of GM's previously communicated annual effective tax rate of 15%, which do not vary with the level of pre-tax income. Adjusted loss reflects an effective tax rate of 15%. 5 General Motors Corporation List of Special Items - After Tax (dollars in millions except per share amounts) (unaudited) Restated Restated Three Months Ended Year to Date June 30, 2004 June 30, 2004 --------------- -------------- Net Net Income EPS Income EPS ------ ----- ------ ----- REPORTED -------- Net income $1,377 $2.42 $2,585 $4.54 ===== ==== ===== ==== There were no special items in the three or six months ended June 30, 2004. 6 General Motors Corporation Summary Corporate Financial Results (unaudited) Second Quarter Year to Date -------------- -------------- Restated Restated 2005 2004 2005 2004 ---- ---- ---- ---- (dollars in millions except per share amounts) Total net sales and revenues $48,512 $49,254 $94,285 $97,084 Adjusted $48,512 $49,254 $94,285 $97,084 Net income (loss) $(286) $1,377 $(1,390) $2,585 Adjusted $(318) $1,377 $(1,157) $2,585 Net margin (Net income / Total net sales and revenues) (0.6)% 2.8% (1.5)% 2.7% Adjusted (0.7)% 2.8% (1.2)% 2.7% Earnings (losses) per share - basic $1-2/3 par value $(0.51) $2.44 $(2.46) $4.58 Earnings (losses) per share - diluted $1-2/3 par value $(0.51) $2.42 $(2.46) $4.54 Earnings (losses) per share - adjusted diluted $1-2/3 par value $(0.56)(1) $2.42 $(2.05) $4.54 GM $1-2/3 par value average shares outstanding (Mil's) Basic shares 565 565 565 564 Diluted shares 565 568 565 569 Cash dividends per share of common stocks GM $1-2/3 par value $0.50 $0.50 $1.00 $1.00 See reconciliation of adjusted financial results on pages 9 - 14 and footnotes on page 17. 7 General Motors Corporation Summary Corporate Financial Results (unaudited) Second Quarter Year to Date -------------- -------------- 2005 2004 2005 2004 ---- ---- ---- ---- Book value per share of common stocks at June 30 GM $1-2/3 par value $44.30 $49.11 Auto & Other total cash & marketable securities at June 30 ($Bil's) $16.0 $21.5 Readily-available assets in VEBA $4.2(2) $3.5 ---- ---- Total Auto & Other cash & marketable securities plus readily-available assets in VEBA $20.2 $25.0 ==== ==== Auto & Other Operations ($Mil's) Depreciation $1,292 $1,441 $2,562 $2,589 Amortization of special tools 803 774 1,619 1,500 Amortization of intangible assets 13 9 23 16 ----- ----- ----- ----- Total $2,108 $2,224 $4,204 $4,105 ===== ===== ===== ===== GM's share of nonconsolidated affiliates' net income (loss) ($Mil's) Italy $11 $11 $32 $29 Japan $45 $53 $95 $159 China $99 $148 $132 $310 South Korea $25 $15* $17 $7* * Restated; previously reported amounts for the second quarter and year-to-date 2004 were $(8) and $(16), respectively. See footnotes on page 17. 8 General Motors Corporation Summary Corporate Financial Results (unaudited) Second Quarter 2005 and 2004 -------------- (dollars in millions) Reported Special Items Adjusted -------- ------------- -------- Restated Restated 2005 2004 2005 2004 2005 2004 ---- ---- ---- ---- ---- ---- Total net sales and revenues GMNA $27,125 $29,429 $ - $ - $27,125 $29,429 GME 8,463 8,094 - - 8,463 8,094 GMLAAM 2,935 1,909 - - 2,935 1,909 GMAP 1,922 1,693 - - 1,922 1,693 ------ ------ -- -- ------ ------ Total GMA 40,445 41,125 - - 40,445 41,125 Other(3) (267) 77 - - (267) 77 ------ ------ -- -- ------ ------ Total Auto & Other 40,178 41,202 - - 40,178 41,202 ------ ------ -- -- ------ ------ GMAC 8,363 7,703 - - 8,363 7,703 Other Financing(3) (29) 349 - - (29) 349 ------ ------ -- -- ------ ------ Total FIO 8,334 8,052 - - 8,334 8,052 ------ ------ -- -- ------ ------ Total net sales and revenues $48,512 $49,254 $ - $ - $48,512 $49,254 ====== ====== == == ====== ====== Income (loss) before income taxes, equity income, and minority interests GMNA $(1,414) $444 $ - $ - $(1,414) $444 GME (159) (96) 186 - 27 (96) GMLAAM 52 11 - - 52 11 GMAP - 33 - - - 33 ----- ----- --- -- ----- --- Total GMA (1,521) 392 186 - (1,335) 392 Other (440) (248) - - (440) (248) ----- ----- --- -- ----- --- Total Auto & Other (1,961) 144 186 - (1,775) 144 ----- ----- --- -- ----- ----- GMAC 1,212 1,346 - - 1,212 1,346 Other Financing (15) (24) - - (15) (24) ----- ----- --- -- ----- ----- Total FIO 1,197 1,322 - - 1,197 1,322 ----- ----- --- -- ----- ----- Total income (loss) before income taxes, equity income, and minority interests $(764) $1,466 $186 $ - $(578) $1,466 === ===== === == === ===== See footnotes on page 17. 9 General Motors Corporation Summary Corporate Financial Results (unaudited) Second Quarter 2005 and 2004 -------------- (dollars in millions) Reported Special Items Adjusted -------- ------------- -------- Restated Restated 2005 2004 2005 2004 2005 2004 ---- ---- ---- ---- ---- ---- Net income (loss) GMNA $(1,194) $355 $ - $ - $(1,194) $355 GME (89) (45) 126 - 37 (45) GMLAAM 33 10 - - 33 10 GMAP 176 259 - - 176 259 --- --- -- -- --- --- Total GMA (1,074) 579 126 - (948) 579 Other (20) (34) (158) - (178) (34) --- --- --- -- --- --- Total Auto & Other (1,094) 545 (32) - (1,126) 545 ----- --- -- -- ----- --- GMAC 816 846 - - 816 846 Other Financing (8) (14) - - (8) (14) --- --- -- -- --- --- Total FIO 808 832 - - 808 832 --- ----- -- -- --- ----- Net income (loss) $(286) $1,377 $ (32) $ - $(318) $1,377 === ===== == == === ===== Income tax expense (benefit) GMNA $(244) $67 - - $(244) $67 GME (50) (36) 60 - 10 (36) GMLAAM 21 (2) - - 21 (2) GMAP (4) (1) - - (4) (1) --- --- -- -- --- --- Total GMA (277) 28 60 - (217) 28 Other (417) (216) 158 - (259) (216) --- --- --- -- --- --- Total Auto & Other (694) (188) 218 - (476) (188) --- --- -- -- --- --- GMAC 396 500 - - 396 500 Other Financing (7) (10) - - (7) (10) --- --- --- -- --- --- Total FIO 389 490 - - 389 490 --- --- --- -- --- --- Income tax expense (benefit) $(305) $302 $218 $ - $(87) $302 === === === == === === 10 General Motors Corporation Summary Corporate Financial Results (unaudited) Second Quarter 2005 and 2004 -------------- (dollars in millions) Reported Special Items Adjusted -------- ------------- -------- Restated Restated 2005 2004 2005 2004 2005 2004 ---- ---- ---- ---- ---- ---- Effective tax rate Total GM Corp. 40% 21% 117% - 15% 21% GMNA 17% 15% - - 17% 15% GME 31% 38% 32% - 37% 38% GMAC 33% 37% - - 33% 37% Equity income (loss) and minority interests GMNA $(24) $(22) $ - $ - $(24) $(22) GME 20 15 - - 20 15 GMLAAM 2 (3) - - 2 (3) GMAP 172 225 - - 172 225 --- --- -- -- --- --- Total GMA $170 $215 $ - $ - $170 $215 === === == == === === 11 General Motors Corporation Summary Corporate Financial Results (unaudited) Year to Date 2005 and 2004 -------------- (dollars in millions) Reported Special Items Adjusted -------- ------------- -------- Restated Restated 2005 2004 2005 2004 2005 2004 ---- ---- ---- ---- ---- ---- Total net sales and revenues GMNA $52,503 $58,532 $ - $ - $52,503 $58,532 GME 16,420 15,637 - - 16,420 15,637 GMLAAM 5,234 3,742 - - 5,234 3,742 GMAP 3,616 3,292 - - 3,616 3,292 ------ ------ -- -- ------ ------ Total GMA 77,773 81,203 - - 77,773 81,203 Other (292) 136 - - (292) 136 ------ ------ -- -- ------ ------ Total Auto & Other 77,481 81,339 - - 77,481 81,339 ------ ------ -- -- ------ ------ GMAC 16,584 15,273 - - 16,584 15,273 Other Financing 220 472 - - 220 472 ------ ------ -- -- ------ ------ Total FIO 16,804 15,745 - - 16,804 15,745 ------ ------ -- -- ------ ------ Total net sales and revenues $94,285 $97,084 $ - $ - $94,285 $97,084 ====== ====== == == ====== ====== Income (loss) before income taxes, equity income, and minority interests GMNA $(3,337) $1,019 $ 357 $ - $(2,980) $1,019 GME (1,034) (319) 857 - (177) (319) GMLAAM 119 19 - - 119 19 GMAP (36) 46 - - (36) 46 ----- --- ----- -- ----- --- Total GMA (4,288) 765 1,214 - (3,074) 765 Other (885) (568) 13 - (872) (568) ----- --- ----- -- ----- --- Total Auto & Other (5,173) 197 1,227 - (3,946) 197 ----- ----- ----- -- ----- ----- GMAC 2,318 2,558 - - 2,318 2,558 Other Financing (17) (25) - - (17) (25) ----- ----- ----- -- ----- ----- Total FIO 2,301 2,533 - - 2,301 2,533 ----- ----- ----- -- ----- ----- Total income (loss) before income taxes, equity income, and minority interests $(2,872) $2,730 $1,227 $ - $(1,645) $2,730 ===== ===== ===== == ===== ===== 12 General Motors Corporation Summary Corporate Financial Results (unaudited) Year to Date 2005 and 2004 -------------- (dollars in millions) Reported Special Items Adjusted -------- ------------- -------- Restated Restated 2005 2004 2005 2004 2005 2004 ---- ---- ---- ---- ---- ---- Net income (loss) GMNA $(2,754) $756 $ 224 $ - $(2,530) $756 GME (614) (161) 548 - (66) (161) GMLAAM 79 11 - - 79 11 GMAP 236 534 - - 236 534 ----- ----- --- -- ----- ----- Total GMA (3,053) 1,140 772 - (2,281) 1,140 Other 126 (151) (539) - (413) (151) ----- --- --- -- ----- --- Total Auto & Other (2,927) 989 233 - (2,694) 989 ----- ----- --- -- ----- --- GMAC 1,544 1,610 - - 1,544 1,610 Other Financing (7) (14) - - (7) (14) ----- ----- --- -- ----- ----- Total FIO 1,537 1,596 - - 1,537 1,596 ----- ----- --- -- ----- ----- Net income (loss)$(1,390) $2,585 $ 233 $ - $(1,157) $2,585 ===== ===== === == ===== ===== Income tax expense (benefit) GMNA $(648) $208 $ 133 $ - $(515) $208 GME (377) (121) 309 - (68) (121) GMLAAM 43 3 - - 43 3 GMAP (17) 5 - - (17) 5 --- -- --- -- --- --- Total GMA (999) 95 442 - (557) 95 Other (1,002) (420) 552 - (450) (420) ----- --- --- -- ----- --- Total Auto & Other (2,001) (325) 994 - 1,007 (325) ----- --- --- -- ----- --- GMAC 771 946 - - 771 946 Other Financing (10) (11) - - (10) (11) --- --- -- -- --- --- Total FIO 761 935 - - 761 935 ----- --- --- -- --- --- Income tax expense (benefit) $(1,240) $610 $994 $ - $(246) $610 ===== === === == === === 13 General Motors Corporation Summary Corporate Financial Results (unaudited) Year to Date 2005 and 2004 -------------- (dollars in millions) Reported Special Items Adjusted -------- ------------- -------- Restated Restated 2005 2004 2005 2004 2005 2004 ---- ---- ---- ---- ---- ---- Effective tax rate Total GM Corp. 43% 22% 81% - 15% 22% GMNA 19% 20% 37% - 17% 20% GME 36% 38% 36% - 38% 38% GMAC 33% 37% - - 33% 37% Equity income (loss) and minority interests GMNA $(65) $(55) $ - $ - $(65) $(55) GME 43 37 - - 43 37 GMLAAM 3 (5) - - 3 (5) GMAP 255 493 - - 255 493 --- --- -- -- --- --- Total GMA $236 $470 $ - $ - $236 $470 === === == == === === 14 General Motors Corporation Operating Statistics Second Quarter Year to Date -------------- -------------- 2005 2004 2005 2004 ---- ---- ---- ---- (units in thousands) Worldwide Production Volume GMNA - Cars 458 543 928 1,068 GMNA - Trucks 789 846 1,502 1,666 ----- ----- ----- ----- Total GMNA 1,247 1,389 2,430 2,734 GME 501 503 1,003 976 GMLAAM 196 172 381 331 GMAP 400 337 735 633 ----- ----- ----- ----- Total Worldwide 2,344 2,401 4,549 4,674 ===== ===== ===== ===== Vehicle Unit Deliveries Chevrolet - Cars 244 223 463 437 Chevrolet - Trucks 549 489 946 876 Pontiac 114 135 214 256 GMC 185 153 308 283 Buick 88 84 149 162 Oldsmobile 1 7 1 24 Saturn 56 61 104 113 Cadillac 72 55 122 106 Other 28 22 45 39 ----- ----- ----- ----- Total United States 1,337 1,229 2,352 2,296 Canada, Mexico, and Other 201 185 367 348 ----- ----- ----- ----- Total GMNA 1,538 1,414 2,719 2,644 GME 549 539 1,063 1,040 GMLAAM 226 174 409 333 GMAP 281 226 513 450 ----- ----- ----- ----- Total Worldwide 2,594 2,353 4,704 4,467 ===== ===== ===== ===== Market Share United States - Cars 23.5% 23.5% 23.4% 24.6% United States - Trucks 31.3% 29.4% 29.4% 28.4% Total United States 27.9% 26.7% 26.7% 26.7% Total North America 27.3% 26.2% 26.4% 26.3% Total Europe 9.7% 9.7% 9.7% 9.5% Total LAAM 18.3% 17.1% 17.2% 16.6% Asia and Pacific 6.3% 5.6% 5.6% 5.2% Total Worldwide 15.2% 14.7% 14.3% 14.1% U.S. Retail/Fleet Mix % Fleet Sales - Cars 34.7% 37.6% 36.9% 37.7% % Fleet Sales - Trucks 17.2% 17.9% 17.6% 18.1% Total Vehicles 23.8% 25.7% 25.1% 26.1% GMNA Capacity Utilization (2 shift rated, annualized) 92.4% 91.1% 90.0% 90.6% GMNA Vehicle Revenue Per Unit $18,811 $18,801 15 General Motors Corporation Operating Statistics Second Quarter Year to Date -------------- -------------- 2005 2004 2005 2004 ---- ---- ---- ---- GMAC's Worldwide Cost of Borrowing (4) 4.74% 3.60% 4.51% 3.61% Period End Debt Spreads Over U.S. Treasuries 2 Year 325 bp 130 bp 5 Year 485 bp 195 bp 10 Year 480 bp 230 bp GMAC cash reserve balance ($Bil's) (5) $22.2 $16.6 GMAC Automotive Finance Operations Consumer credit (North America) Net charge-offs as a % of managed receivables 0.90% 0.99% 0.93% 1.11% Retail contracts 30 days delinquent - % of average number of contracts outstanding (6) 1.94% 1.97% 2.02% 2.02% Retail penetration (U.S. only) Total retail contract volume and lease as % of retail sales 37% 38% 44% 39% SmartLease and SmartBuy as % of retail sales 19% 14% 19% 14% Off-lease vehicle remarketing (U.S. only) Average net gain per vehicle $1,261 $587 $1,223 $523 Off-lease vehicles terminated (units in 000s) 84 114 156 232 GMAC Mortgage Operations ($Bil's) Origination volume $50.1 $48.1 $91.9 $83.7 Mortgage servicing rights, net $3.8 $4.3 GMAC Insurance Operations ($Mil's) Premium revenue written $1,038 $989 $2,156 $2,046 Investment portfolio market value $7,526 $6,460 After-tax net unrealized capital gains $528 $408 Worldwide Employment at June 30 (in 000's) United States Hourly 109 114 United States Salary 36 39 --- --- Total United States 145 153 Canada, Mexico, and Other 32 33 --- --- GMNA 177 186 GME 58 62 GMLAAM 30 27 GMAP 14 14 GMAC 34 33 Other 4 5 --- --- Total 317 327 === === Worldwide Payrolls ($Bil's) $5.2 $5.5 $10.5 $11.0 See footnoteson page 17. 16 General Motors Corporation Footnotes: --------- (1) This amount is comparable to First Call analysts' consensus. (2) The increase in readily-available assets results from higher withdrawal capacity from the hourly VEBA trust due to increased other postretirement employee benefit payments, and the addition of withdrawal capacity from the salaried VEBA that was funded in 2004. (3) Other Operations and Other Financing include intercompany eliminations. (4) Calculated by dividing total interest expense (excluding mark to market adjustments) by total debt. (5) Balance at June 30, 2005 comprises $19.7 billion of cash and cash equivalents and $2.5 billion in marketable securities with maturities greater than 90 days. Balance at June 30, 2004 consisted entirely of cash and cash equivalents. (6) Excludes accounts in bankruptcy. 17 GENERAL MOTORS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Months Ended Six Months Ended June 30, June 30, ------------------ ---------------- (As (As restated) restated) 2005 2004 2005 2004 ---- ---- ---- ---- (dollars in millions except per share amounts) Total net sales and revenue $48,512 $49,254 $94,285 $97,084 ------ ------ ------ ------ Cost of sales and other expenses 40,089 39,778 79,402 78,551 Selling, general, and administrative expenses 5,475 5,171 10,364 10,180 Interest expense 3,712 2,839 7,391 5,623 ------ ------ ------ ------ Total costs and expenses 49,276 47,788 97,157 94,354 ------ ------ ------ ------ Income (loss) before income taxes, equity income and minority interests (764) 1,466 (2,872) 2,730 Income tax expense (benefit) (305) 302 (1,240) 610 Equity income (loss) and minority interests 173 213 242 465 --- ------ ------ ----- Net income (loss) $(286) $1,377 $(1,390) $2,585 === ===== ===== ===== Basic earnings (loss) per share attributable to common stock $(0.51) $2.44 $(2.46) $4.58 ==== ==== ==== ==== Earnings (loss) per share attributable to common stock assuming dilution $(0.51) $2.42 $(2.46) $4.54 ==== ==== ==== ==== 18 GENERAL MOTORS CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION TO THE CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Months Ended Six Months Ended June 30, June 30, ------------------ ---------------- (As (As restated) restated) 2005 2004 2005 2004 ---- ---- ---- ---- (dollars in millions) AUTOMOTIVE AND OTHER OPERATIONS Total net sales and revenues $40,178 $41,202 $77,481 $81,339 ------ ------ ------ ------ Cost of sales and other expenses 38,048 37,259 74,954 73,690 Selling, general, and administrative expenses 3,320 3,144 6,157 6,167 ------ ------ ------ ------ Total costs and expenses 41,368 40,403 81,111 79,857 ------ ------ ------ ------ Interest expense 671 596 1,356 1,158 Net expense from transactions with Financing and Insurance Operations 100 59 187 127 ----- --- ----- --- Income (loss) before income taxes, equity income, and minority interests (1,961) 144 (5,173) 197 Income tax (benefit) (694) (188) (2,001) (325) Equity income (loss) and minority interests 173 213 245 467 ------ --- ------ --- Net income (loss) - Automotive and Other Operations $(1,094) $545 $(2,927) $989 ===== === ===== === FINANCING AND INSURANCE OPERATIONS Total revenues $8,334 $8,052 $16,804 $15,745 ----- ----- ------ ------ Interest expense 3,041 2,243 6,035 4,465 Depreciation and amortization expense 1,404 1,333 2,802 2,663 Operating and other expenses 1,995 2,190 4,138 4,109 Provisions for financing and insurance losses 797 1,023 1,715 2,102 ----- ----- ------ ------ Total costs and expenses 7,237 6,789 14,690 13,339 Net income from transactions with Automotive and Other Operations (100) (59) (187) (127) ------ ------ ------ ------ Income before income taxes, equity income, and minority interests 1,197 1,322 2,301 2,533 Income tax expense 389 490 761 935 Equity income (loss) and minority interests - - (3) (2) ----- ----- ----- ----- Net income - Financing and Insurance Operations $808 $832 $1,537 $1,596 === === ===== ===== 19 GENERAL MOTORS CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (As restated) June 30, June 30, 2005 Dec. 31, 2004 (Unaudited) 2004 (Unaudited) ---------- ---- ---------- ASSETS (dollars in millions) Cash and cash equivalents $32,261 $35,993 $29,901 Marketable securities 23,013 21,737 20,816 ------ ------ ------ Total cash and marketable securities 55,274 57,730 50,717 Finance receivables - net 178,137 199,600 192,023 Loans held for sale 26,903 19,934 17,393 Accounts and notes receivable (less allowances) 18,465 21,236 16,989 Inventories (less allowances) 13,350 12,247 12,274 Deferred income taxes 27,640 26,241 27,379 Net equipment on operating leases - (less accumulated depreciation) 36,076 34,214 32,321 Equity in net assets of nonconsolidated affiliates 4,969 6,776 6,381 Property - net 40,325 39,020 37,578 Intangible assets - net 4,947 4,925 4,696 Other assets 60,512 57,680 57,709 ------- ------- ------- Total assets $466,598 $479,603 $455,460 ======= ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable (principally trade) $28,694 $28,830 $26,377 Notes and loans payable 283,621 300,279 277,027 Postretirement benefits other than pensions 30,525 28,111 31,691 Pensions 9,722 9,455 7,559 Deferred income taxes 6,657 7,078 8,101 Accrued expenses and other liabilities 81,425 77,727 76,641 ------- ------- ------- Total liabilities 440,644 451,480 427,396 Minority interests 902 397 328 Stockholders' equity $1-2/3 par value common stock (outstanding, 565,503,422; 565,132,021; and 564,721,304 shares) 943 942 941 Capital surplus (principally additional paid-in capital) 15,255 15,241 15,181 Retained earnings 12,468 14,428 14,772 ------ ------ ------ Subtotal 28,666 30,611 30,894 Accumulated foreign currency translation adjustments (1,645) (1,194) (1,685) Net unrealized gains (losses) on derivatives 331 589 369 Net unrealized gains on securities 687 751 557 Minimum pension liability adjustment (2,987) (3,031) (2,399) ------- ------- ------- Accumulated other comprehensive loss (3,614) (2,885) (3,158) ------- ------- ------- Total stockholders' equity 25,052 27,726 27,736 ------- ------- ------- Total liabilities and stockholders' equity $466,598 $479,603 $455,460 ======= ======= ======= 20 GENERAL MOTORS CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION TO THE CONSOLIDATED BALANCE SHEETS (As restated) June 30, June 30, 2005 Dec. 31, 2004 (Unaudited) 2004 (Unaudited) ---------- ---- ---------- ASSETS (dollars in millions) Automotive and Other Operations Cash and cash equivalents $12,445 $13,148 $13,182 Marketable securities 3,629 6,655 8,319 ------ ------ ------ Total cash and marketable securities 16,074 19,803 21,501 Accounts and notes receivable (less allowances) 8,087 6,713 6,396 Inventories (less allowances) 12,818 11,717 11,576 Net equipment on operating leases - (less accumulated depreciation) 6,723 6,488 6,914 Deferred income taxes and other current assets 10,570 10,794 10,876 ------ ------ ------ Total current assets 54,272 55,515 57,263 Equity in net assets of nonconsolidated affiliates 4,969 6,776 6,381 Property - net 38,480 37,170 35,684 Intangible assets - net 1,658 1,599 1,412 Deferred income taxes 18,976 17,399 18,316 Other assets 41,415 40,844 41,657 ------- ------- ------- Total Automotive and Other Operations assets 159,770 159,303 160,713 Financing and Insurance Operations Cash and cash equivalents 19,816 22,845 16,719 Investments in securities 19,384 15,082 12,497 Finance receivables - net 178,137 199,600 192,023 Loans held for sale 26,903 19,934 17,393 Net equipment on operating leases (less accumulated depreciation) 29,353 27,726 25,407 Other assets 33,235 35,113 30,708 Net receivable from Automotive and Other Operations 2,846 2,426 2,004 ------- ------- ------- Total Financing and Insurance Operations assets 309,674 322,726 296,751 ------- ------- ------- Total assets $469,444 $482,029 $457,464 ======= ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY Automotive and Other Operations Accounts payable (principally trade) $25,361 $24,257 $23,084 Loans payable 1,563 2,062 2,625 Accrued expenses 44,390 46,147 46,726 Net payable to Financing and Insurance Operations 2,846 2,426 2,004 ------- ------- ------ Total current liabilities 74,160 74,892 74,439 Long-term debt 31,043 30,460 29,814 Postretirement benefits other than pensions 25,815 23,406 27,721 Pensions 9,629 9,371 7,489 Other liabilities and deferred income taxes 15,946 15,657 15,467 ------- ------- ------- Total Automotive and Other Operations liabilities 156,593 153,786 154,930 Financing and Insurance Operations Accounts payable 3,333 4,573 3,293 Debt 251,015 267,757 244,588 Other liabilities and deferred income taxes 32,549 27,790 26,589 ------- ------- ------- Total Financing and Insurance Operations liabilities 286,897 300,120 274,470 ------- ------- ------- Total liabilities 443,490 453,906 429,400 Minority interests 902 397 328 Total stockholders' equity 25,052 27,726 27,736 ------- ------- ------- Total liabilities and stockholders' equity $469,444 $482,029 $457,464 ======= ======= ======= 21 GENERAL MOTORS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Six Months Ended June 30, -------------------------- (As restated) 2005 2004 ---- ---- (dollars in millions) Net cash provided by operating activities $2,603 $803 Cash flows from investing activities Expenditures for property (2,944) (3,201) Investments in marketable securities - acquisitions (10,830) (6,466) Investments in marketable securities - liquidations 10,269 7,064 Net originations and purchases of mortgage servicing rights (784) (816) Increase in finance receivables (5,970) (17,800) Proceeds from sales of finance receivables 17,578 9,012 Operating leases - acquisitions (8,378) (7,118) Operating leases - liquidations 3,258 3,992 Investments in companies, net of cash acquired 1,355 (32) Other (2,411) 982 ----- ------ Net cash provided by investing activities 1,143 (14,383) Cash flows from financing activities Net increase in loans payable (8,411) 2,137 Long-term debt - borrowings 30,440 37,784 Long-term debt - repayments (32,144) (30,986) Cash dividends paid to stockholders (570) (564) Other 3,619 2,804 ----- ------ Net cash provided by (used in) financing activities (7,066) 11,175 Effect of exchange rate changes on cash and cash equivalents (412) (248) ------ ------ Net decrease in cash and cash equivalents (3,732) (2,653) Cash and cash equivalents at beginning of the period 35,993 32,554 ------ ------ Cash and cash equivalents at end of the period $32,261 $29,901 ====== ====== 22 GENERAL MOTORS CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION TO THE CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Automotive and Financing and Other Insurance Six Months Ended June 30, ------------------------------------ (As restated) 2005 2004 2005 2004 ---- ---- ---- ---- (dollars in millions) Net cash provided by operating activities $(2,138) $955 $4,741 $(152) Cash flows from investing activities Expenditures for property (2,813) (3,038) (131) (163) Investments in marketable securities - acquisitions (271) (855) (10,559) (5,611) Investments in marketable securities - liquidations 3,137 1,603 7,132 5,461 Net change in mortgage services rights - - (784) (816) Increase in finance receivables - - (5,970) (17,800) Proceeds from sales of finance receivables - - 17,578 9,012 Operating leases - acquisitions - - (8,378) (7,118) Operating leases - liquidations - - 3,258 3,992 Net investing activity with Financing and Insurance Operations 1,000 - - - Investments in companies, net of cash acquired 1,355 (53) - 21 Other (591) 110 (1,820) 872 ----- ----- ----- ------ Net cash provided by (used in) investing activities 1,817 (2,233) 326 (12,150) Cash flows from financing activities Net increase (decrease) in loans payable 46 (437) (8,457) 2,574 Long-term debt - borrowings 25 756 30,415 37,028 Long-term debt - repayments (20) (55) (32,124) (30,931) Net financing activity with Automotive & Other - - (1,000) - Cash dividends paid to stockholders (570) (564) - - Other - - 3,619 2,804 ---- ---- ----- ------ Net cash provided by (used in) financing activities (519) (300) (7,547) 11,475 Effect of exchange rate changes on cash and cash equivalents (283) (176) (129) (72) Net transactions with Automotive/Financing Operations 420 512 (420) (512) --- ----- ----- ----- Net decrease in cash and cash equivalents (703) (1,242) (3,029) (1,411) Cash and cash equivalents at beginning of the period 13,148 14,424 22,845 18,130 ------ ------ ------ ------ Cash and cash equivalents at end of the period $12,445 $13,182 $19,816 $16,719 ====== ====== ====== ====== 23 SIGNATURES 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: July 20, 2005 By: /s/PETER R. BIBLE --- ----------------- (Peter R. Bible, Chief Accounting Officer) 24