EX-99 2 q405ex99earnings012606.txt GM PRESS RELEASE AND FINANCIAL STATEMENTS EXHIBIT 99.1 DETROIT - General Motors Corp. (NYSE: GM) today reported a 2005 calendar-year loss, excluding special items, of $3.4 billion, or $5.99 per share, compared with net income of $3.6 billion, or $6.37 per share, in 2004. Including special items, GM reported a loss of $8.6 billion, or $15.13 per share for 2005, compared to net income of $2.8 billion, or $4.92 per share in the year-ago period. Revenue was $192.6 billion in 2005, compared to $193.5 billion in 2004. "2005 was one of the most difficult years in GM's history, driven by poor performance in North America," GM Chairman and Chief Executive Officer Rick Wagoner said. "It was a year in which two significant fundamental weaknesses in our North American operations were fully exposed -- our huge legacy cost burden and our inability to adjust structural costs in line with falling revenue. Our results were also dramatically and adversely affected by charges for restructuring and matters associated with Delphi Corp.'s Chapter 11 filing. "In order to improve financial results in 2006 and 2007, we are moving quickly to implement several important actions that will address these weaknesses in North America. And, we have a good line of sight on the steps we need to take to further reduce structural costs on a global basis that will position GM for long-term success," Wagoner added. Fourth Quarter Results GM reported a loss of $1.2 billion, or $2.09 per diluted share in the fourth quarter of 2005, excluding special items. These results compare to adjusted earnings of $726 million, or $1.28 per share in the year ago period. Revenue was $51.2 billion compared to $51.4 billion a year ago. Including special items, GM reported a loss of $4.8 billion, or $8.45 per diluted share in the fourth quarter of 2005, compared to a loss of $99 million, or $0.18 per share in the fourth quarter of 2004. The reported results for the fourth quarter of 2005 include special items totaling $3.6 billion after tax, or $6.36 per diluted share. These items are primarily attributable to an after-tax restructuring charge of $1.3 billion at GM North America and a preliminary after-tax charge of $2.3 billion associated with the UAW/Delphi benefit guarantee. Additional details on the special items are included below and in the "Highlights" section of the press release. GM's results for the fourth quarter of 2005 and the calendar year are preliminary and may be revised prior to the filing of GM's 2005 annual report on Form 10-K in mid-March, depending on changes, if any, to the Delphi related accrual and completion of the previously disclosed supplier credits study. GM financial results described throughout the remainder of this release exclude special items unless otherwise noted (see "Highlights"). GM Automotive Operations GM's automotive operations reported an adjusted loss of $5.3 billion in 2005, compared to adjusted earnings of $1.2 billion in 2004. The decline was principally driven by large losses in North America, partially offset by improved results in Europe and in the Latin America, Africa and Middle East region. In the fourth quarter of 2005 GM's automotive operations reported an adjusted loss of $1.5 billion compared to adjusted earnings of $268 million in the year-ago period. GM sold 9.2 million vehicles worldwide in 2005, the second-largest volume in GM's history, on the strength of increased sales in three of GM's four business regions and all-time sales records in our Asia Pacific and Latin America, Africa and Middle East regions. Vehicle sales in the Asia Pacific region were up 20 percent, the Latin America, Africa and Middle East region increased 19 percent, and Europe posted a 1.3 percent gain in one of the most competitive markets in the world. Unit sales were down 3.1 percent in North America in 2005. As a result, GM's share of the global automotive market was 14.2 percent in 2005, down from 14.4 percent in 2004. GM North America (GMNA) reported an adjusted loss of $5.6 billion in 2005, compared to adjusted earnings of $1.1 billion in 2004, reflecting a weaker sales mix, lower production volumes stemming from a significant reduction in dealer inventories and lower market share, increased material costs including those for product improvements, continuing high health-care costs and increased spending on marketing and advertising. 1 In the fourth quarter of 2005, GMNA reported an adjusted loss of $1.5 billion, compared to adjusted earnings of $449 million in the year-ago period. The loss in the fourth-quarter of 2005 was primarily attributable to lower production of full-sized sport utility vehicles due to the start-up of the all-new next generation vehicles in this category, increased health-care costs, and higher marketing and advertising spending. In addition, there were favorable non-recurring items in the year-ago period. "GM's top priority is to restore our North American operations to profitability and positive cash flow as quickly as possible," Wagoner said. "In 2005, we laid out a comprehensive and integrated strategy to address the structural issues that impede our competitiveness and profitability, and we are focused on rapidly executing all aspects of the turnaround plan." In support of growing revenues, GM continued to invest heavily in revitalizing its product portfolio despite recent financial challenges, with global capital spending up about $1 billion in 2005. Ongoing or upcoming product launches include new full-sized sport utility vehicles and pick-up trucks, additional crossover vehicles, and a significantly expanded line-up at Saturn. In addition, GM has revitalized its marketing strategy in North America by moving to simple, compelling pricing that is expected to result in lower spending on incentives, clearer focus and differentiation of GM's vehicle brands, and enhanced focus on GM's highly competitive new cars and trucks. "There is a cost for implementing these revenue initiatives, but we know that in addition to addressing our cost situation, we need great cars and trucks and strong brands to improve our revenue and our bottom line," Wagoner said. GM expects to reduce its North American structural costs by $6 billion on a running-rate basis by the end of 2006, with more than $4 billion of the reduction coming in calendar year 2006, and to reduce its net material costs by $1 billion. Key elements of the structural cost reduction plan include the health-care agreement with the United Auto Workers union, which accounts for about $3 billion of the annual expense savings (excluding the impact of payments to the defined contribution Voluntary Employees' Beneficiary Association Trust); the capacity utilization initiatives and other manufacturing initiatives, which total about $1.5 billion; and additional productivity and cost efficiencies in other areas of the business especially engineering, advertising, and salaried employment levels and benefits. "The historic agreement we signed with the UAW in October, and the capacity reduction announcements we made in November that give rise to the North American restructuring charge, are important and significant steps on the road to recovery," said Wagoner. "But it's clear that we need to do more, and so we are focused on that with our recently announced objective to reduce global structural costs to 25 percent of automotive revenue by 2010, from the current level of approximately 34 percent." Wagoner said this structural cost target is designed to create a competitive advantage for GM in an intensely competitive environment of excess industry capacity, increasing regulatory costs, and more product entries. "We will be very focused in how we accomplish this," Wagoner said. "For example, we need to continue to lower our overall manufacturing costs, reduce our huge legacy cost disadvantage burden, and improve our sourcing footprint - all areas where we have a cost disadvantage today against the global benchmarks. At the same time, while we continue to drive productivity improvement in product development, research and development, and marketing, it's important that we maintain competitive spending levels in these revenue-driving aspects of our business." In connection with the North American manufacturing capacity actions announced in November, GM recorded an after-tax charge of $1.3 billion in the fourth quarter of 2005 as a special item. This charge includes approximately $800 million associated with the employees at the facilities where GM plans to cease production, and about $500 million for the non-cash write-down of property, plants and equipment. The employee costs principally represent cash payments that will be made to affected employees during the current labor agreement, which expires in September 2007, attributable to the JOBS bank provisions of that agreement. GM is currently in discussions with the UAW on an accelerated attrition program, and the outcome of these discussions could affect the timing and amount of subsequent charges. GM Europe (GME) cut its losses nearly in half in 2005 to an adjusted loss of $375 million from an adjusted loss of $742 million in 2004, as continued improvement in both structural and material costs and higher production volumes were partially offset by negative pricing. GME reported an adjusted loss of $159 million in the fourth quarter of 2005, an improvement from the adjusted loss of $345 million reported in the year-ago quarter. 2 "Our European turnaround plan remains on track and we expect to see more progress in 2006," Wagoner said. "In addition to the continued implementation of our significant cost reduction initiatives, we expect to benefit again this year from the introduction of new products such as the Opel Corsa. And, we'll continue to focus on the rollout of our multi-brand strategy in Europe, and particularly efforts to expand the Chevrolet brand." GM Asia Pacific (GMAP) reported adjusted earnings of $524 million in 2005, compared to $729 million in 2004, reflecting unfavorable volume and shifting sales mix at GM's Holden unit, and higher costs associated with GM's growth initiatives in China. For the fourth quarter of 2005, GMAP reported adjusted earnings of $112 million, down from $117 million in the fourth quarter of 2004. "The fastest growing automotive region on the globe, Asia Pacific, continues to be a positive story for GM. We achieved a number of important milestones in 2005," Wagoner said. "For the first time in our history, we sold more than 1 million vehicles in Asia Pacific, increasing our market share there to 5.8 percent. And importantly, in China, now the second-largest market behind the United States, GM became the leading foreign brand." GM Latin America/Africa/Middle East (GMLAAM) reported adjusted earnings of $124 million in 2005, up from $85 million in 2004. For the fourth quarter of 2005 GMLAAM reported adjusted earnings of $20 million, compared to $47 million in the year-ago quarter, primarily driven by unfavorable foreign exchange rates in Brazil. "GM continues to set sales and market share records in the Latin America/Africa/Middle East region," Wagoner said. "In 2005, GM sold a record 881,000 vehicles in the region, marking our eighth consecutive year of sales and market share leadership. Our focus for 2006 is to continue to leverage our position in South Africa, accelerate our turnaround program in Brazil and build on our strong performance in the Middle East and other Andean regions." GMAC General Motors Acceptance Corporation (GMAC) earned $2.8 billion in 2005, down from record earnings of $2.9 billion in 2004. In the fourth quarter of 2005, GMAC earned $614 million, compared to $683 million in the year-ago period. "GMAC continued to post strong earnings in 2005 despite some very difficult challenges," Wagoner said. "And, despite the significant impact of lower credit ratings, GMAC continued to maintain strong liquidity." GMAC had cash reserve balances at Dec. 31, 2005 of approximately $20 billion, including $15.8 billion in cash and cash equivalents and $4.2 billion in marketable securities. In 2005, GMAC paid a dividend to GM of $2.5 billion, including $1 billion in the fourth quarter of 2005. GMAC's financing operations reported earnings of $1.1 billion in 2005, down from $1.5 billion in 2004. The decrease is primarily due to lower net interest margins as a result of increased borrowing costs. The decline in net interest margins was somewhat mitigated by lower consumer credit provisions, primarily as a result of lower asset levels, and the impact of improved used vehicle prices on terminating leases. Mortgage operations earned a record $1.4 billion, up from $1.1 billion in 2004, reflecting increases in both the residential and commercial mortgage operations. GMAC's residential mortgage businesses benefited from increased loan production, favorable credit experience, improved mortgage servicing results and gains on sales of mortgages. GMAC Commercial Mortgage also experienced an increase in earnings as compared to the prior year largely due to record loan origination volume, higher gains on sales of loans and increases in fee and investment income. GMAC's insurance operations generated record net income of $417 million in 2005, up from $329 million in 2004. The increase reflects a combination of strong results achieved through increased premium revenue, higher capital gains and improved investment portfolio performance. Cash and Liquidity Cash, marketable securities, and readily-available assets of the Voluntary Employees' Beneficiary Association (VEBA) Trust totaled $20.5 billion at Dec. 31, 2005, up from $19.2 billion on Sept. 30, 2005. This excludes GMAC's cash reserve balances of approximately $20 billion at Dec. 31, 2005. GM withdrew approximately $1.2 billion from the VEBA Trust in the fourth quarter of 2005. 3 In October of 2005, GM estimated that its contingent exposure relating to the benefit guarantees for certain former GM U.S. hourly employees who transferred to Delphi, ranged from zero to $12 billion. GM now believes that the range is between $3.6 billion and $12 billion with amounts closer to the low-end of the revised range considered the company's best estimate assuming an agreement is reached between GM, Delphi and its unions. As a result, GM established a reserve of $3.6 billion ($2.3 billion after tax) and this is included as a non-cash charge in the fourth quarter of 2005. The amount of this charge may change between now and when GM files its Form 10-K with the SEC, depending on the status of discussions between GM, Delphi and its unions and other factors. GM is currently unable to estimate the amount of additional charges, if any, that may arise from Delphi's Chapter 11 filing. A consensual agreement to resolve the Delphi matter may cause GM to incur additional costs in exchange for benefits that would accrue to GM over time. Forward-looking Statements In this press release and in related comments by General Motors' and General Motors Acceptance Corporation's management, the use of the words "expect," "anticipate," "estimate," "forecast," "initiative," "objective," "plan," "goal," "project," "outlook," "priorities," "target," "intend," "evaluate," "pursue," "seek," "may," "would," "could," "should," "believe," "potential," "continue," "designed," "impact," or the negative of any of those words or similar expressions is intended to identify forward-looking statements. All statements in this press release and in related comments, other than statements of historical fact, including without limitation, statements about future events and financial performance, are forward-looking statements that involve certain risks and uncertainties. While these statements represent our current judgment on what the future may hold, and we believe these judgments are reasonable, these statements are not guarantees of any events or financial results, and GM's actual results may differ materially due to numerous important factors that are described in GM's most recent report on SEC Form 10-K, which may be revised or supplemented in subsequent reports on SEC Forms 10-Q and 8-K. Such factors include, among others, the following: the ability of GM to realize production efficiencies, to achieve reductions in costs as a result of the turnaround restructuring and health care cost reductions and to implement capital expenditures at levels and times planned by management; the pace of product introductions; market acceptance of the corporation's new products; significant changes in the competitive environment and the effect of competition in the corporation's markets, including on the corporation's pricing policies; our ability to maintain adequate financing sources and an appropriate level of debt; restrictions on GMAC's and Residential Capital Corporation (ResCap)'s ability to pay dividends and prepay subordinated debt obligations to us; changes in the existing, or the adoption of new, laws, regulations, policies or other activities of governments, agencies and similar organizations where such actions may affect the production, licensing, distribution or sale of our products, the cost thereof or applicable tax rates; costs and risks associated with litigation; the final results of investigations by the SEC; changes in our accounting principles, or their application or interpretation, and our ability to make estimates and the assumptions underlying the estimates, which could result in an impact on earnings; changes in relations with unions and employees/retirees and the legal interpretations of the agreements with those unions with regard to employees/retirees; labor strikes or work stoppages at GM or at key suppliers such as Delphi Corp.; additional credit rating downgrades; the impact of a potential sale or other extraordinary transaction involving GMAC on the results of GM's and GMAC's operations and liquidity; other factors impacting financing and insurance operating segments' results of operations and financial condition such as credit ratings, adequate access to the market, changes in the residual value of off-lease vehicles, changes in U.S. government-sponsored mortgage programs or disruptions in the markets in which our mortgage subsidiaries operate, and changes in our contractual servicing rights; shortages of and price increases for fuel; and changes in economic conditions, commodity prices, currency exchange rates or political stability in the markets in which we operate. In addition, GMAC's actual results may differ materially due to numerous important factors that are described in GMAC's most recent report on SEC Form 10-K, which may be revised or supplemented in subsequent reports on SEC Forms 10-Q and 8-K. Such factors include, among others, the following: the ability of GM, to complete a transaction with a strategic investor regarding a controlling interest in GMAC while maintaining a significant stake in GMAC, securing separate credit ratings and low cost funding to sustain growth for GMAC and ResCap and maintaining the mutually beneficial relationship between GMAC and GM; significant changes in the competitive environment and the effect of competition in the corporation's markets, including on the corporation's pricing policies; our ability to maintain adequate financing sources; our ability to maintain an appropriate level of debt; the profitability and financial condition of GM, including changes in production or sales of GM vehicles, risks based on GM's contingent benefit guarantees and the possibility of labor strikes or work stoppages at GM or at key suppliers such as Delphi Corp.; funding obligations under GM and its subsidiaries' qualified U.S. defined benefits pension plans; restrictions on ResCap's ability to pay dividends and prepay subordinated debt obligations to us; changes in the residual value of off-lease vehicles; changes in U.S. government-sponsored mortgage programs or disruptions in the markets in which our mortgage subsidiaries operate; changes in our contractual servicing rights; costs and risks associated with litigation; changes in our accounting assumptions that may require or that result from changes in the accounting rules or their application, which could result in an impact on earnings; changes in the credit ratings of GMAC or GM; the threat of natural calamities; changes in economic conditions, currency exchange rates or political stability in the markets in which we operate; and changes in the existing, or the adoption of new, laws, regulations, policies or other activities of governments, agencies and similar organizations. 4 Investors are cautioned not to place undue reliance on forward-looking statements. GM undertakes no obligation to update publicly or otherwise revise any forward-looking statements, whether as a result of new information, future events or other such factors that affect the subject of these statements, except where expressly required by law. Use of the term "loans" describes products associated with direct and indirect lending activities of GMAC's global operations. The specific products include retail installment sales contracts, loans, lines of credit, leases or other financing products. The term "originate" refers to GMAC's purchase, acquisition or direct origination of various "loan" products. # # # 5 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 Dec. 31, 2005 Dec. 31, 2005 --------------- --------------- Net $1-2/3 Net $1-2/3 Income EPS Income EPS ------ ----- ------ ----- REPORTED Net (loss) $(4,777) $(8.45) $(8,554) $(15.13) ===== ==== ===== ===== ADJUSTMENTS - Special Items North America restructuring charge (A) 1,290 2.28 1,290 2.28 UAW / Delphi benefit guarantee (B) 2,327 4.12 2,327 4.12 U.S. salaried attrition program (C) - - 148 0.26 Plant & facility impairments (D) - - 889 1.57 Adjustments to investment in Fuji Heavy Industries (E) (51) (0.09) 737 1.30 Restructuring charges: GME, GMAP, and Other (F) 97 0.17 701 1.25 Cumulative effect of accounting change (G) 109 0.19 109 0.19 Change in Polish tax law (H) (49) (0.09) (49) (0.09) Tax items (I) (129) (0.22) (987) (1.74) ----- ---- ----- ---- Subtotal 3,594 6.36 5,165 9.14 ADJUSTED ----- ---- ----- ---- Adjusted (loss) $(1,183) $(2.09) $(3,389) $(5.99) ===== ==== ===== ==== (A) In connection with the North American manufacturing capacity actions announced in November, GM recorded an after-tax charge of $1.3 billion in the fourth quarter of 2005. This charge includes $835 million associated with the hourly employees at the facilities GM is idling and $455 million for the non-cash write-down of property, plants and equipment. (B) In October of 2005, GM estimated that its contingent exposure relating to the benefit guarantees for certain former GM U.S. hourly employees who transferred to Delphi, ranged from zero to $12 billion. GM now believes that the range is between $3.6 billion and $12 billion with amounts closer to the low-end of the revised range considered the company's best estimate assuming an agreement is reached between GM, Delphi and its unions. As a result, GM established a reserve of $3.6 billion ($2.3 billion after tax) and this is included as a non-cash charge in the fourth quarter of 2005. The amount of this charge may 6 General Motors Corporation List of Special Items - After Tax (dollars in millions except per share amounts) (unaudited) change between now and when GM files its Form 10-K with the SEC, depending on the status of discussions between GM, Delphi and its unions and other factors. GM is currently unable to estimate the amount of additional charges, if any, that may arise from Delphi's Chapter 11 filing. A consensual agreement to resolve the Delphi matter may cause GM to incur additional costs in exchange for benefits that would accrue to GM over time. (C) Relates to voluntary early retirement and other separation programs in the U.S. in the first quarter of 2005. (D) Year-to-date adjustments include after-tax impairment charges totaling $805 million ($468 million at GMNA, $176 million at GME, $99 million at GMLAAM, and $62 million at GMAP) resulting from third quarter reviews of the carrying value of long-lived assets held and used, other than goodwill and intangible assets with indefinite lives. These impairments consist of $711 million related to product-specific assets and $94 million related to office and production facilities, which were still in service at year-end 2005. Year-to-date results also include an after- tax charge of $84 million, recorded at GMNA in the first quarter 2005, for the write-down to fair market value of various plant assets in connection with the cessation of production at a Lansing assembly plant. (E) Relates to the $788 million after-tax write-down to fair market value, as of June 30, 2005, of GM's investment in approximately 20% of the common stock of Fuji Heavy Industries (FHI). In the fourth quarter, GM completed the sale of its investment in the common stock of FHI and recorded a gain of $71 million (after tax) due the to appreciation of the fair value of such stock after June 30, 2005, the date of the FHI impairment charge. Also in the fourth quarter, GME recorded cancellation charges of $20 million (after tax) related to FHI, resulting in a net adjustment of $(51) million in the fourth quarter. (F) The fourth quarter charge relates to after-tax restructuring charges of $69 million at GME, $21 million at GMAP, and $7 million at Other. 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 fourth quarter GME restructuring charge of $69 million relates to approximately 800 additional separations, as well as charges related to previous separations that are required to be amortized over future periods. The year-to-date GME charge of $673 million also includes costs related to the separation of approximately 6,700 people in the first three quarters. (G) Relates to the adoption of Financial Accounting Standards Board Interpretation No. 47, "Accounting for Conditional Asset Retirement Obligations," as of December 31, 2005. (H) Relates to the effect of changes in Polish tax law at a GM Powertrain joint venture. Amount is included in equity income. (I) Fourth quarter and year-to-date amounts of $746 million and $1.6 billion, respectively, relate to tax benefits, in excess of GM's previously communicated annual effective tax rate of 15%. In addition, the fourth quarter includes recognition of a valuation allowance of $617 million against deferred tax assets at GM do Brasil. Adjusted loss reflects an effective tax rate of 15%. 7 General Motors Corporation List of Special Items - After Tax (dollars in millions except per share amounts) Restated Restated Three Months Ended Year to Date Dec. 31, 2004 (A) Dec. 31, 2004 (A) ---------------- --------------- Net $1-2/3 Net $1-2/3 Income EPS Income EPS ------ ----- ------ ----- REPORTED Net income $(99) $(0.18) $2,789 $4.92 == ==== ===== ==== ADJUSTMENTS - Special Items Gain on sale of XM stock (B) (118) (0.21) (118) (0.21) Plant & facility impairments (C) 78 0.14 78 0.14 Asset impairments (D) 383 0.68 383 0.67 Write down Fiat investment (E) 136 0.24 136 0.24 Fiat settlement (F) 886 1.56 886 1.56 Tax items (G) (540) (0.95) (540) (0.95) --- ---- --- ---- Subtotal 825 1.46 825 1.45 ADJUSTED --- ---- ----- ---- Adjusted income $726 $1.28 $3,614 $6.37 === ==== ===== ==== (A) Reflects restatement associated with ongoing review of accounting for supplier credits. Final restatement amounts have not yet been determined. GM expects to complete review of supplier credits prior to filing GM's Form 10-K for the year ended December 31, 2005. (B) In December 2004, GM contributed 11 million shares of XM Satellite Radio Holdings Inc. Class A common stock valued at $432 million to its Voluntary Employees' Beneficiary Association (VEBA), which resulted in a pre-tax gain of $190 million ($118 million after tax). (C) Includes charges for facilities rationalization actions at GM's Baltimore, MD and Linden, NJ plants. (D) Reflects the results of GM's annual review of the carrying value of its long-lived assets held and used, other than goodwill and intangible assets with indefinite lives. The after-tax impairment charges total $383 million ($118 million at GMNA, $234 million at GME, and $31 million at Other). These impairments consist of $328 million related to product-specific assets and $55 million related to production facilities. (E) Reflects completion of an impairment study of GM's investment in Fiat Auto Holdings, B.V., which resulted in the write-off of the remaining carrying value of $220 million pre-tax ($136 million after tax). (F) On February 13, 2005 GM and Fiat reached a settlement agreement related to various issues that resulted in an after-tax charge to earnings of $886 million. Since the underlying events and disputes giving rise to GM's and Fiat's agreement existed at December 31, 2004, GM recognized this charge in the fourth quarter of 2004. (G) Reflects various adjustments resulting from changes in tax laws both in the U.S. and overseas and capital loss carryforwards. 8 General Motors Corporation Summary Corporate Financial Results (unaudited) Fourth Quarter Year to Date -------------- -------------- Restated Restated 2005 2004(1) 2005 2004(1) ---- ---- ---- ---- (dollars in millions except per share amounts) Total net sales and revenues $51,180 $51,428 $192,604 $193,517 Adjusted $51,102 $51,238 $192,526 $193,327 Net income (loss) $(4,777) $(99) $(8,554) $2,789 Adjusted $(1,183) $726 $(3,389) $3,614 Net margin (Net income / Total net sales and revenues) (9.3)% (0.2)% (4.4)% 1.4% Adjusted (2.3)% 1.4% (1.8)% 1.9% Earnings (losses) per share - basic $1-2/3 par value $(8.45) $(0.18) $(15.13) $4.94 Earnings (losses) per share - diluted $1-2/3 par value $(8.45) $(0.18) $(15.13) $4.92 Earnings (losses) per share - adjusted diluted $1-2/3 par value $(2.09)(2) $1.28 $(5.99) $6.37 GM $1-2/3 par value average shares outstanding (Mil's) Basic shares 566 565 565 565 Diluted shares 566 566 565 567 Cash dividends per share of common stocks $1-2/3 par value $0.50 $0.50 $2.00 $2.00 See reconciliation of adjusted financial results on pages 11 - 16 and footnotes on page 19. 9 General Motors Corporation Summary Corporate Financial Results (unaudited) Fourth Quarter Year to Date -------------- -------------- 2005 2004 2005 2004 ---- ---- ---- ---- Auto & Other total cash & marketable securities at Dec. 31 ($Bil's) $16.7 $19.8 Readily-available assets in VEBA $3.8 $3.5 --- --- Total Auto & Other cash & marketable securities plus readily-available assets in VEBA $20.5 $23.3 ==== ==== Auto & Other Operations ($Mil's) Depreciation $1,684 $1,322 $5,502 $5,028 Amortization of special tools 969 1,325 4,495 3,562 Amortization of intangible assets 39 14 76 39 ----- ----- ------ ----- Total $2,692 $2,661 $10,073 $8,629 ===== ===== ====== ===== GM's share of nonconsolidated affiliates' net income (loss) ($Mil's) Italy* NA $28 $32 $87 Japan $43 $64 $183 $255 China $109 $33 $327 $417 South Korea# NA $(35) $17 $(53) * During the second quarter of 2005, GM and Fiat S.p.A. completed the liquidation and termination of all joint ventures between them in existence at that time. As a result, GM regained complete ownership of all assets it originally contributed to each joint venture. # Effective for the third quarter 2005, the results of GM Daewoo's operations are consolidated by GM. See footnotes on page 19. 10 General Motors Corporation Summary Corporate Financial Results (unaudited) Fourth Quarter 2005 and 2004 -------------- (dollars in millions) Reported Special Items Adjusted -------- ------------- -------- Restated Restated 2005 2004(1) 2005 2004 2005 2004(1) ---- ---- ---- ---- ---- ---- Total net sales and revenues GMNA $27,464 $29,707 $ - $(190) $27,464 $29,517 GME 8,150 8,248 - - 8,150 8,248 GMLAAM 3,520 2,884 - - 3,520 2,884 GMAP 3,525 2,085 $(78) - 3,447 2,085 ------ ------ -- --- ------ ------ Total GMA 42,659 42,924 (78) (190) 42,581 42,734 Other (3) (282) 216 - - (282) 216 ------ ------ -- --- ------ ------ Total Auto & Other 42,377 43,140 (78) (190) 42,299 42,950 ------ ------ -- --- ------ ------ GMAC 8,787 8,118 - - 8,787 8,118 Other Financing(3) 16 170 - - 16 170 ------ ------ -- --- ------ ------ Total FIO 8,803 8,288 - - 8,803 8,288 ------ ------ -- --- ------ ------ Total net sales and revenues $51,180 $51,428 $(78) $(190) $51,102 $51,238 ====== ====== == === ====== ====== Income (loss) before income taxes, equity income, and minority interests GMNA $(3,774) $227 $1,981 $125 $(1,793) $352 GME (384) (975) 125 372 (259) (603) GMLAAM 50 63 - - 50 63 GMAP (23) 24 (49) - (72) 24 ----- ----- ----- ----- ----- --- Total GMA (4,131) (661) 2,057 497 (2,074) (164) Other (4,040) (1,909) 3,591 1,633 (449) (276) ----- ----- ----- ----- ----- --- Total Auto & Other (8,171) (2,570) 5,648 2,130 (2,523) (440) ----- ----- ----- ----- ----- --- GMAC 890 862 - - 890 862 Other Financing (12) (12) - - (12) (12) ----- ----- ----- ----- ----- --- Total FIO 878 850 - - 878 850 ----- ----- ----- ----- ----- --- Total income (loss) before income taxes, equity income, and minority interests $(7,293) $(1,720)$5,648 $2,130 $(1,645) $410 ===== ===== ===== ===== ===== === See footnotes on page 19. 11 General Motors Corporation Summary Corporate Financial Results (unaudited) Fourth Quarter 2005 and 2004 --------------- (dollars in millions) Reported Special Items Adjusted -------- ------------- -------- Restated Restated 2005 2004(1) 2005 2004 2005 2004(1) ---- ---- ---- ---- ---- ---- Net income (loss) GMNA $(2,832) $911 $1,373 $(462) $(1,459) $449 GME (220) (579) 61 234 (159) (345) GMLAAM (599) 47 619 - 20 47 GMAP 159 117 (47) - 112 117 ----- ----- ----- ----- ----- --- Total GMA (3,492) 496 2,006 (228) (1,486) 268 Other (1,874) (1,276) 1,588 1,053 (286) (223) ----- ----- ----- ----- ----- --- Total Auto & Other (5,366) (780) 3,594 825 (1,772) 45 ----- --- ----- --- ----- --- GMAC 614 683 - - 614 683 Other Financing (25) (2) - - (25) (2) ----- --- ----- --- ----- --- Total FIO 589 681 - - 589 681 ----- --- ----- --- ----- --- Net income (loss)$(4,777) $(99)$3,594 $825 $(1,183) $726 ===== == ===== === ===== === Income tax expense (benefit) GMNA $(1,012) $(694) $691 $587 $(321) $(107) GME (133) (367) 36 138 (97) (229) GMLAAM 650 15 (617) - 33 15 GMAP (68) (7) 1 - (67) (7) ----- ----- ----- ----- --- --- Total GMA (563) (1,053) 111 725 (452) (328) Other (2,153) (646) 2,003 580 (150) (66) ----- ----- ----- ----- --- --- Total Auto & Other (2,716) (1,699) 2,114 1,305 (602) (394) ----- ----- ----- ----- --- --- GMAC 331 175 - - 331 175 Other Financing 13 (10) - - 13 (10) ----- ----- ----- ----- --- --- Total FIO 344 165 - - 344 165 ----- ----- ----- ----- --- --- Income tax expense (benefit) $(2,372) $(1,534)$2,114 $1,305 $(258) $(229) ===== ===== ===== ===== === === See footnotes on page 19. 12 General Motors Corporation Summary Corporate Financial Results (unaudited) Fourth Quarter 2005 and 2004 --------------- (dollars in millions) Reported Special Items Adjusted -------- ------------- -------- Restated Restated 2005 2004(1) 2005 2004 2005 2004(1) ---- ---- ---- ---- ---- ---- Effective tax rate Total GM Corp. 33% 89% 37% 61% 16% (56%) GMNA 27% (306%) 35% 470% 18% (30%) GME 35% 38% 29% 37% 38% 38% GMAC 37% 20% - - 37% 20% Equity income (loss) and minority interests GMNA $13 $(10) $ - $ - $13 $(10) GME 52 29 (49) - 3 29 GMLAAM 3 (1) - - 3 (1) GMAP 117 86 - - 117 86 --- --- -- -- --- --- Total GMA $185 $104 $(49) $ - $136 $104 === === == == === === See footnotes on page 19. 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(1) 2005 2004 2005 2004(1) ---- ---- ---- ---- ---- ---- Total net sales and revenues GMNA $104,755 $114,545 $ - $(190)$104,755 $114,355 GME 31,719 30,820 - - 31,719 30,820 GMLAAM 11,745 8,792 - - 11,745 8,792 GMAP 10,893 6,978 (78) - 10,815 6,978 ------- ------- -- --- ------- ------- Total GMA 159,112 161,135 (78) (190) 159,034 160,945 Other (3) (891) 410 - - (891) 410 ------- ------- -- --- ------- ------- Total Auto & Other 158,221 161,545 (78) (190) 158,143 161,355 ------- ------- -- --- ------- ------- GMAC 34,037 31,188 - - 34,037 31,188 Other Financing(3) 346 784 - - 346 784 ------- ------- -- --- ------- ------- Total FIO 34,383 31,972 - - 34,383 31,972 ------- ------- -- --- ------- ------- Total net sales and revenues $192,604 $193,517 $(78) $(190)$192,526 $193,327 ======= ======= == === ======= ======= Income (loss) before income taxes, equity income, and minority interests GMNA $(9,747) $1,029 $3,081 $125 $(6,666) $1,154 GME (2,020) (1,733) 1,330 372 (690) (1,361) GMLAAM 55 127 150 - 205 127 GMAP (879) 52 853 - (26) 52 ------ ----- ----- ----- ----- ----- Total GMA (12,591) (525) 5,414 497 (7,177) (28) Other (5,286) (2,625) 3,604 1,633 (1,682) (992) ------ ----- ----- ----- ----- ----- Total Auto & Other (17,877) (3,150) 9,018 2,130 (8,859) (1,020) ------ ----- ----- ----- ----- ----- GMAC 4,260 4,355 - - 4,260 4,355 Other Financing (30) (39) - - (30) (39) ----- ----- ----- ----- ----- ----- Total FIO 4,230 4,316 - - 4,230 4,316 ----- ----- ----- ----- ----- ----- Total income (loss) before income taxes, equity income, and minority interests $(13,647) $1,166 $9,018 $2,130 $(4,629) $3,296 ====== ===== ===== ===== ===== ===== See footnotes on page 19. 14 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(1) 2005 2004 2005 2004(1) ---- ---- ---- ---- ---- ---- Net income (loss) GMNA $(7,647) $1,567 $2,065 $(462) $(5,582) $1,105 GME (1,216) (976) 841 234 (375) (742) GMLAAM (594) 85 718 - 124 85 GMAP (279) 729 803 - 524 729 ----- ----- ----- ----- ----- ----- Total GMA (9,736) 1,405 4,427 (228) (5,309) 1,177 Other (1,626) (1,510) 738 1,053 (888) (457) ----- ----- ----- ----- ----- ----- Total Auto & Other (11,362) (105) 5,165 825 (6,197) 720 ----- ----- ----- --- ----- ----- GMAC 2,833 2,913 - - 2,833 2,913 Other Financing (25) (19) - - (25) (19) ----- ----- ----- --- ----- ----- Total FIO 2,808 2,894 - - 2,808 2,894 ----- ----- ----- --- ----- ----- Net income (loss)$(8,554) $2,789 $5,165 $825 $(3,389) $3,614 ===== ===== ===== === ===== ===== Income tax expense (benefit) GMNA $(2,253) $(569)$1,099 $587 $(1,154) $18 GME (723) (655) 461 138 (262) (517) GMLAAM 651 31 (566) - 85 31 GMAP (122) (11) 53 - (69) (11) ----- ----- ----- ----- ----- ----- Total GMA (2,447) (1,204) 1,047 725 (1,400) (479) Other (3,633) (1,131) 2,866 580 (767) (551) ----- ----- ----- ----- ----- ----- Total Auto & Other (6,080) (2,335) 3,913 1,305 (2,167) (1,030) ----- ----- ----- ----- ----- ----- GMAC 1,478 1,434 - - 1,478 1,434 Other Financing (5) (20) - - (5) (20) ----- ----- ----- ----- ----- ----- Total FIO 1,473 1,414 - - 1,473 1,414 ----- ----- ----- ----- ----- ----- Income tax expense (benefit) $(4,607) $(921)$3,913 $1,305 $(694) $384 ===== === ===== ===== === === See footnotes on page 19. 15 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(1) 2005 2004 2005 2004(1) ---- ---- ---- ---- ---- ---- Effective tax rate Total GM Corp. 34% (79%) 43% 61% 15% 12% GMNA 23% (55%) 36% 470% 17% 2% GME 36% 38% 35% 37% 38% 38% GMAC 35% 33% - - 35% 33% Equity income (loss) and minority interests GMNA $(70) $(31) $ - $ - $(70) $(31) GME 102 102 (49) - 53 102 GMLAAM 4 (11) - - 4 (11) GMAP 481 666 - - 481 666 --- --- -- -- --- --- Total GMA $517 $726 $(49) $ - $468 $726 === === == == === === See footnotes on page 19. 16 General Motors Corporation Operating Statistics Fourth Quarter Year to Date -------------- -------------- 2005 2004 2005 2004 ---- ---- ---- ---- (units in thousands) Worldwide Production Volume GMNA - Cars 483 466 1,834 1,997 GMNA - Trucks 798 811 3,023 3,223 ----- ----- ----- ----- Total GMNA 1,281 1,277 4,857 5,220 GME 443 442 1,858 1,829 GMLAAM 189 200 775 716 GMAP 482 386 1,624 1,333 ----- ----- ----- ----- Total Worldwide 2,395 2,305 9,114 9,098 ===== ===== ===== ===== Vehicle Unit Deliveries Chevrolet - Cars 186 217 866 918 Chevrolet - Trucks 364 439 1,804 1,845 Pontiac 97 96 438 474 GMC 104 144 566 602 Buick 52 60 282 310 Oldsmobile 0 2 2 29 Saturn 46 41 214 212 Cadillac 52 65 235 234 Other 30 23 111 83 ----- ----- ----- ----- Total United States 931 1,087 4,518 4,707 Canada, Mexico, and Other 180 187 728 705 ----- ----- ----- ----- Total GMNA 1,111 1,274 5,246 5,412 GME 452 455 1,982 1,956 GMLAAM 248 217 881 738 GMAP 290 228 1,064 887 ----- ----- ----- ----- Total Worldwide 2,101 2,174 9,173 8,993 ===== ===== ===== ===== Market Share United States - Cars 21.0% 23.5% 22.6% 24.9% United States - Trucks 26.0% 27.8% 28.5% 29.0% Total United States 23.8% 26.0% 25.9% 27.2% Total North America 23.6% 25.6% 25.5% 26.7% Total Europe 9.2% 9.2% 9.5% 9.4% Total LAAM 19.0% 18.9% 17.7% 17.5% Asia and Pacific 6.3% 5.2% 5.8% 5.2% Total Worldwide 13.6% 14.1% 14.2% 14.4% U.S. Retail/Fleet Mix % Fleet Sales - Cars 39.3% 35.1% 36.8% 36.7% % Fleet Sales - Trucks 21.8% 17.4% 19.0% 16.4% Total Vehicles 28.7% 24.2% 25.9% 24.5% GMNA Capacity Utilization (2 shift rated, annualized) 94.3% 83.0% 89.8% 85.8% GMNA Vehicle Revenue Per Unit $19,769 $20,213 17 General Motors Corporation Operating Statistics Fourth Quarter Year to Date -------------- -------------- 2005 2004 2005 2004 ---- ---- ---- ---- GMAC's Worldwide Cost of Borrowing (4) 5.24% 4.13% 4.79% 3.81% GMAC Period End Debt Spreads Over U.S. Treasuries 2 Year 475 bp 170 bp 5 Year 535 bp 225 bp 10 Year 540 bp 270 bp GMAC Cash Reserve Balance ($Bil's) (5) $20.0 $22.7 GMAC Automotive Finance Operations Consumer Credit (North America) Net charge-offs as a % of managed receivables 0.94% 1.06% 0.99% 1.10% Retail contracts 30 days delinquent - % of average number of contracts outstanding (6) 2.46% 2.20% 2.21% 2.11% Retail Penetration (U.S. only) Total consumer volume (retail and lease) as % of retail sales 32% 66% 39% 46% SmartLease and SmartBuy as % of retail sales 14% 14% 17% 13% Off-lease Vehicle Remarketing (U.S. only) Sales proceeds on scheduled lease terminations (36-month) $14,059 $13,911 $14,392 $14,182 Off-lease vehicles terminated (units in 000s) 58 107 283 414 GMAC Mortgage Operations ($Bil's) Origination volume $55.0 $46.1 $205.5 $169.7 Mortgage servicing rights, net $4.6 $3.9 GMAC Insurance Operations ($Mil's) Combined ratio (7) 92.5% 98.7% 93.8% 95.7% Premium revenue written $941 $988 $4,150 $4,095 Investment portfolio market value $7,664 $7,320 After-tax net unrealized capital gains $573 $563 See footnotes on page 19. 18 General Motors Corporation Fourth Quarter Year to Date -------------- -------------- 2005 2004 2005 2004 ---- ---- ---- ---- Worldwide Employment at December 31 (in 000's) United States Hourly 105 111 United States Salary 36 39 --- --- Total United States 141 150 Canada, Mexico, and Other 32 31 --- --- GMNA 173 181 GME 55 61 GMLAAM 31 29 GMAP (8) 31 15 GMAC 34 34 Other 3 4 --- --- Total 327 324 === === Worldwide Payrolls ($Bil's) $5.3 $5.6 $20.9 $21.5 Footnotes: --------- (1) Reflects restatement associated with ongoing review of accounting for supplier credits. Final restatement amounts have not yet been determined. GM expects to complete review of supplier credits prior to filing GM's Form 10-K for the year ended December 31, 2005. (2) This amount is comparable to First Call analysts' consensus. (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 December 31, 2005 comprises $15.8 billion of cash and cash equivalents and $4.2 billion in marketable securities with maturities greater than 90 days. Balance at December 31, 2004 consisted entirely of cash and cash equivalents. (6) Excludes accounts in bankruptcy. (7) Calculated as the sum of all reported losses and expenses (excluding interest and income tax expense) divided by the total of premiums and service revenues earned and other income. (8) 2005 includes approximately 13,000 employees added as a result of GM Daewoo consolidation. 19 GENERAL MOTORS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Months Ended December 31, ------------------------------ (As restated) 2005 2004 (1) ---- ---- (dollars in millions except per share amounts) Total net sales and revenues $51,180 $51,428 ------ ------ Cost of sales and other expenses 47,928 43,929 Selling, general, and administrative expenses 6,227 5,872 Interest expense 4,318 3,347 ------ ------ Total costs and expenses 58,473 53,148 ------ ------ (Loss) before income taxes, equity income, and minority interests (7,293) (1,720) Income tax (benefit) (2,372) (1,534) Equity income and minority interests 253 87 ------ -- (Loss) before cumulative effect of accounting change (4,668) (99) Cumulative effect of accounting change (109) - ----- -- Net (loss) $(4,777) $(99) ===== == Basic (losses) per share attributable to $1-2/3 par value common stock Before cumulative effect of accounting change $(8.26) $(0.18) Cumulative effect of accounting change (0.19) - ---- ---- Net (loss) $(8.45) $(0.18) ==== ==== (Losses) per share attributable to $1-2/3 par value common stock assuming dilution Before cumulative effect of accounting change $(8.26) $(0.18) Cumulative effect of accounting change (0.19) - ---- ---- Net (loss) $(8.45) $(0.18) ==== ==== See footnotes on page 19. 20 GENERAL MOTORS CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION TO THE CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Months Ended December 31, ------------------------------ (As restated) 2005 2004 (1) ---- ---- (dollars in millions) AUTOMOTIVE AND OTHER OPERATIONS Total net sales and revenues $42,377 $43,140 ------ ------ Cost of sales and other expenses 45,783 41,457 Selling, general, and administrative expenses 3,780 3,484 ------ ------ Total costs and expenses 49,563 44,941 Interest expense 771 700 Net expense from transactions with Financing and Insurance Operations 214 69 ------ ------ (Loss) before income taxes, equity income, and minority interests (8,171) (2,570) Income tax (benefit) (2,716) (1,699) Equity income and minority interests 198 91 ------ ----- (Loss) before cumulative effect of accounting change (5,257) (780) Cumulative effect of accounting change (109) - ----- --- Net (loss) - Automotive and Other Operations $(5,366) $(780) ===== === FINANCING AND INSURANCE OPERATIONS Total revenues $8,803 $8,288 ----- ----- Interest expense 3,547 2,647 Depreciation and amortization expense 1,406 1,409 Operating and other expenses 2,439 2,346 Provisions for financing and insurance losses 747 1,105 ----- ----- Total costs and expenses 8,139 7,507 Net income from transactions with Automotive and Other Operations (214) (69) --- ----- Income before income taxes and minority interests 878 850 Income tax expense 344 165 Equity income (loss) and minority interests 55 (4) --- --- Net income - Financing and Insurance Operations $589 $681 === === See footnotes on page 19. 21 GENERAL MOTORS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME Years Ended December 31, ----------------------------- (As (As restated) restated) 2005 2004 (1) 2003 (1) ---- ---- ---- (dollars in millions except per share amounts) GENERAL MOTORS CORPORATION AND SUBSIDIARIES Total net sales and revenues $192,604 $193,517 $185,837 ------- ------- ------- Cost of sales and other expenses 168,462 159,977 152,429 Selling, general, and administrative expenses 22,021 20,394 20,957 Interest expense 15,768 11,980 9,464 ------- ------- ------- Total costs and expenses 206,251 192,351 182,850 ------- ------- ------- Income (loss) from continuing operations before income taxes, equity income and minority interests (13,647) 1,166 2,987 Income tax (benefit) expense (4,607) (921) 733 Equity income (loss) and minority interests 595 702 612 ------ ----- ----- Income (loss) from continuing operations before cumulative effect of accounting change (8,445) 2,789 2,866 (Loss) from discontinued operations - - (219) Gain on sale of discontinued operations - - 1,179 Cumulative effect of accounting change (109) - - ----- ----- ----- Net income (loss) $(8,554) $2,789 $3,826 ===== ===== ===== Basic earnings (loss) per share attributable to common stocks $1-2/3 par value Continuing operations before cumulative effect of accounting change $(14.94) $4.94 $5.11 Discontinued operations - - 2.14 Cumulative effect of accounting change (0.19) - - ----- ----- ---- Earnings (loss) per share attributable to $1-2/3 par value $(15.13) $4.94 $7.25 ===== ==== ==== (Loss) per share from discontinued operations attributable to Class H $- $- $(0.22) = = ==== Earnings (loss) per share attributable to common stocks assuming dilution $1-2/3 par value Continuing operations before cumulative effect of accounting change $(14.94) $4.92 $5.03 Discontinued operations - - 2.11 Cumulative effect of accounting change (0.19) - - ----- ---- ---- Earnings (loss) per share attributable to $1-2/3 par value $(15.13) $4.92 $7.14 ===== ==== ==== (Loss) per share from discontinued operations attributable to Class H $- $- $(0.22) = = ==== See footnotes on page 19. 22 GENERAL MOTORS CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION TO THE CONSOLIDATED STATEMENTS OF INCOME Years Ended December 31, ----------------------------- (As (As restated) restated) 2005 2004 (1) 2003 (1) ---- ---- ---- (dollars in millions) AUTOMOTIVE AND OTHER OPERATIONS Total net sales and revenues $158,221 $161,545 $155,831 ------- ------- ------- Cost of sales and other expenses 159,506 150,079 143,519 Selling, general, and administrative expenses 13,222 11,863 11,737 ------- ------- ------- Total costs and expenses 172,728 161,942 155,256 Interest expense 2,873 2,480 1,780 Net expense from transactions with Financing and Insurance Operations 497 273 297 ------- ------ ------ (Loss) from continuing operations before income taxes, equity income, and minority interests (17,877) (3,150) (1,502) Income tax (benefit) (6,080) (2,335) (867) Equity income (loss) and minority interests 544 710 674 ------ --- --- Income (loss) from continuing operations before cumulative effect of of accounting change (11,253) (105) 39 (Loss) from discontinued operations - - (219) Gain on sale of discontinued operations - - 1,179 Cumulative effect of accounting change (109) - - ------ --- ----- Net income (loss) - Automotive and Other Operations $(11,362) $(105) $999 ====== === === FINANCING AND INSURANCE OPERATIONS Total revenues $34,383 $31,972 $30,006 ------ ------ ------ Interest expense 12,895 9,500 7,684 Depreciation and amortization expense 5,648 5,523 5,567 Operating and other expenses 8,667 8,591 8,604 Provisions for financing and insurance losses 3,440 4,315 3,959 ------ ------ ------ Total costs and expenses 30,650 27,929 25,814 ------ ------ ------ Net income from transactions with Automotive and Other Operations (497) (273) (297) ------ ------ ------ Income before income taxes, equity income and minority interests 4,230 4,316 4,489 Income tax expense 1,473 1,414 1,600 Equity income (loss) and minority interests 51 (8) (62) ----- ----- ----- Net income - Financing and Insurance Operations $2,808 $2,894 $2,827 ===== ===== ===== See footnotes on page 19. 23 GENERAL MOTORS CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS December 31, ------------------- (As restated) 2005 2004 (1) ---- -------- ASSETS dollars in millions) Cash and cash equivalents $30,884 $35,993 Other marketable securities 19,726 21,737 ------ ------ Total cash and marketable securities 50,610 57,730 Finance receivables - net 180,793 199,600 Loans held for sale 21,865 19,934 Accounts and notes receivable (less allowances) 15,420 21,236 Inventories (less allowances) 14,372 12,247 Assets of Disc. Ops./Held for Sale 19,152 - Deferred income taxes 28,561 26,241 Net equipment on operating leases (less accumulated depreciation) 38,187 34,214 Equity in net assets of nonconsolidated affiliates 3,291 6,776 Property - net 40,214 39,020 Intangible assets - net 4,625 4,925 Other assets 58,194 57,680 ------- ------- Total assets $475,284 $479,603 ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable (principally trade) $29,913 $28,830 Notes and loans payable 285,750 300,279 Liab. Of Disc Ops./Related to Assets for Sale 10,990 - Postretirement benefits other than pensions 33,934 28,111 Pensions 10,918 9,455 Deferred income taxes 4,430 7,078 Accrued expenses and other liabilities 81,576 78,052 ------- ------- Total liabilities 457,511 451,805 Minority interests 1,039 397 Stockholders' equity $1-2/3 par value common stock (outstanding, 565,518,106 and 565,132,021 shares) 943 942 Capital surplus (principally additional paid-in capital) 15,304 15,241 Retained earnings 4,415 14,103 ------ ------ Subtotal 20,662 30,286 Accumulated foreign currency translation adjustments (1,666) (1,194) Net unrealized gains on derivatives 733 589 Net unrealized gains on securities 784 751 Minimum pension liability adjustment (3,779) (3,031) ----- ----- Accumulated other comprehensive loss (3,928) (2,885) ----- ----- Total stockholders' equity 16,734 27,401 ------ ------ Total liabilities and stockholders' equity $475,284 $479,603 ======= ======= See footnotes on page 19. 24 GENERAL MOTORS CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION TO THE CONSOLIDATED BALANCE SHEETS December 31, ------------------- (As restated) 2005 2004 (1) ---- -------- dollars in millions) GENERAL MOTORS CORPORATION AND SUBSIDIARIES ASSETS Automotive and Other Operations Cash and cash equivalents $15,345 $13,148 Marketable securities 1,416 6,655 ------ ------ Total cash and marketable securities 16,761 19,803 Accounts and notes receivable (less allowances) 7,600 6,713 Inventories (less allowances) 13,869 11,717 Net equipment on operating leases (less accumulated depreciation) 6,993 6,488 Deferred income taxes and other current assets 9,457 10,794 ----- ------ Total current assets 54,680 55,515 Equity in net assets of nonconsolidated affiliates 3,291 6,776 Property - net 38,466 37,170 Intangible assets - net 1,500 1,599 Deferred income taxes 21,019 17,399 Other assets 41,103 40,844 ------- ------- Total Automotive and Other Operations assets 160,059 159,303 Financing and Insurance Operations Cash and cash equivalents 15,539 22,845 Investments in securities 18,310 15,082 Finance receivables - net 180,793 199,600 Loans held for sale 21,865 19,934 Assets held for sale 19,152 - Net equipment on operating leases (less accumulated depreciation) 31,194 27,726 Other assets 28,372 35,113 Net receivable from Automotive and Other Operations 4,452 2,426 ------- ------- Total Financing and Insurance Operations assets 319,677 322,726 ------- ------- Total assets $479,736 $482,029 ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY Automotive and Other Operations Accounts payable (principally trade) $26,182 $24,257 Loans payable 1,319 2,062 Accrued expenses 42,322 45,948 Net payable to Financing and Insurance Operations 4,452 2,426 ------ ------ Total current liabilities 74,275 74,693 Long-term debt 31,214 30,460 Postretirement benefits other than pensions 28,927 23,406 Pensions 10,828 9,371 Other liabilities and deferred income taxes 19,520 16,181 ------- ------- Total Automotive and Other Operations liabilities 164,764 154,111 Financing and Insurance Operations Accounts payable 3,731 4,573 Liabilities related to assets held for sale 10,990 - Debt 253,217 267,757 Other liabilities and deferred income taxes 29,261 27,790 ------- ------- Total Financing and Insurance Operations liabilities 297,199 300,120 ------- ------- Total liabilities 461,963 454,231 Minority interests 1,039 397 Total stockholders' equity 16,734 27,401 ------- ------- Total liabilities and stockholders' equity $479,736 $482,029 ======= ======= See footnotes on page 19. 25