-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, N/EaiNNTA99FP6XLVkV0H0bNmdfngRjLk01mhoAOfvAyhdjsngnZezsEtJvm2HX5 cWpmuRA1gb+V3DRJVg+mow== 0000040730-97-000015.txt : 19970415 0000040730-97-000015.hdr.sgml : 19970415 ACCESSION NUMBER: 0000040730-97-000015 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970414 ITEM INFORMATION: Other events FILED AS OF DATE: 19970414 SROS: CSE SROS: NYSE SROS: PHLX SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: GENERAL MOTORS CORP CENTRAL INDEX KEY: 0000040730 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLES & PASSENGER CAR BODIES [3711] IRS NUMBER: 380572515 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-00143 FILM NUMBER: 97580264 BUSINESS ADDRESS: STREET 1: 3044 WEST GRAND BLVD CITY: DETROIT STATE: MI ZIP: 48202-3091 BUSINESS PHONE: 3135565000 8-K 1 L:\secfiles\8-k\1997\release\1stqtrPR.doc SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549-1004 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported) April 14, 1997 ---------------- GENERAL MOTORS CORPORATION ----------------------------------------------------- (Exact name of registrant as specified in its charter) STATE OF DELAWARE 1-143 38-0572515 - ---------------------------- ----------------------- ------------------- (State or other jurisdiction (Commission File Number) (I.R.S. Employer of incorporation) Identification No.) 100 Renaissance Center, Detroit, Michigan 48243-7301 3044 West Grand Boulevard, Detroit, Michigan 48202-3091 - -------------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (313)-556-5000 -------------- - 1 - ITEM 5. OTHER EVENTS On April 14, 1997, a news release was issued on the subject of first quarter consolidated earnings for GM. The news release did not include financial statement footnotes and certain other financial information that will be filed with the Securities and Exchange Commission at a later date. The GM news release and related news releases dated April 14, 1997 for first quarter earnings of Hughes Electronics Corporation (Hughes) and General Motors Acceptance Corporation (GMAC), respectively, were as follows: GM NEWS RELEASE GM REPORTS INCOME OF $1.8 BILLION FOR THE FIRST QUARTER OF 1997 BEST PERFORMANCE FOR NORTH AMERICAN OPERATIONS IN MORE THAN A DECADE DETROIT -- General Motors Corp. (GM) reported today that income from continuing operations for the first quarter of 1997 totaled $1.8 billion, or $2.30 per share of GM $1-2/3 par value common stock, compared with $800 million, or $0.93 per share, in the first quarter of 1996. The first-quarter results in 1997 and 1996 included certain special and unusual items. (See "Special Items," "1996 Strike-Related Impact," and "Highlights" for additional information.) "GM North American Operations' net income of $764 million in the first quarter of 1997 is the best performance for any quarter in more than a decade," GM Chairman and Chief Executive Officer John F. Smith, Jr. said. "This is a clear indication that GM-NAO has regained its basic earning power, continues to build financial strength and is establishing an excellent foundation for the future. "We have demonstrated in our first-quarter results that the trend of improved earnings for General Motors is continuing. It's clear that we are moving in the right direction to further strengthen the corporation's financial performance," he said. "As globalization becomes a business imperative, every year -- indeed, every quarter -- brings new challenges. But GM is ready for those challenges. Our focus on building quality products, competing globally, and hitting our financial targets will sustain the success of this company far into the future," Smith said. "The bottom-line improvements are driven by our very successful new products and continued emphasis on running common and running lean," he explained. "This is evident in the positive year-over-year improvements at our North American Operations (GM-NAO) and Delphi Automotive Systems sectors." Significant highlights of the first-quarter of 1997 from the automotive sectors included the following: - GM North American Operations (GM-NAO) reported net income of $764 million in the first quarter of 1997, compared with a net loss of $279 million in the first quarter of 1996. - Delphi Automotive Systems (Delphi) reported net income of $180 million in the first quarter of 1997, compared with net income of $79 million in the first quarter of 1996. The 1997-first-quarter results included a plant-closing charge of $50 million after taxes. - GM International Operations (GMIO) reported net income of $317 million in the first quarter of 1997, compared with net income of $432 million in the prior-year period. The first-quarter 1997 results included a $55 million after-tax gain related to an agreement with Volkswagen A.G. (VW). - 2 - Highlights of first-quarter 1997 results reported by GM's major subsidiaries included the following: - General Motors Acceptance Corporation (GMAC) reported net income of $372 million for the first quarter of 1997, compared with net income of $309 million in the first quarter of 1996. - Hughes Electronics Corporation (Hughes) reported first-quarter 1997 earnings of $235 million, compared with earnings of $312 million in the prior-year period. The first quarter of 1996 included the favorable impact of a $72-million after-tax gain on the sale of a 2.5-percent equity interest in DIRECTV(R). (See additional information in sections detailing individual automotive sector results, "Special Items," "1996 Strike-Related Impact" and "Highlights.") GM CONSOLIDATED FINANCIAL DATA (with financing & insurance operations on an equity basis) The corporation's pretax income from continuing operations was $2.1 billion in the first quarter of 1997, compared with $684 million in the first quarter of 1996. The corporation's after-tax net-profit margin -- income from continuing operations as a percentage of net sales and revenues -- was 4.8 percent in the first quarter of 1997, compared with 2.3 percent in the first quarter of 1996. The corporation's cash position remained strong during the first quarter of 1997. Cash and marketable securities totaled $14.6 billion at March 31, 1997, compared with $7.6 billion at March 31, 1996, and $17.0 billion Dec. 31, 1996. In the first quarter of 1997, GM used approximately $1.6 billion to acquire more than 27 million shares of GM $1-2/3 par value common stock under the corporation's stock-repurchase program announced in January. Fully consolidated net sales and revenues in the first quarter of 1997 totaled $42.3 billion, compared with $39.2 billion in the same period last year - -- a 7.9-percent increase. Following is a summary of financial performance for GM's automotive business sectors: GM NORTH AMERICAN OPERATIONS (GM-NAO) GM North American Operations' first-quarter-1997 net income of $764 million was the highest in more than 10 years. GM-NAO reported a net loss of $279 million in the first quarter of 1996. GM-NAO reported pretax income of $1.1 billion in the first quarter of 1997, compared with a pretax loss of $517 million in the prior-year period. GM-NAO's net-profit margin was 3.1 percent in the first quarter of 1997, compared with a net-loss margin of 1.3 percent in the prior-year period. "The improved results were driven primarily by the many new models introduced into the marketplace, which are less costly to produce than those they replaced, by continued material-cost reductions, and production efficiencies," Smith said. - 3 - While it's early in the launch cycle, sales of the Pontiac Grand Prix, Buick Park Avenue, and the Saturn SC coupe are all gaining strong consumer acceptance and showing major double-digit increases over the vehicles they replaced. The Cadillac Catera is on track to exceed sales expectations, the all-new Chevrolet Malibu and Oldsmobile Cutlass models are hitting target markets, and the all-new trio of minivans -- the Chevy Venture, Pontiac Transport and Oldsmobile Silhouette -- are gaining market share. As the Corvette, Buick Century and Regal and Oldsmobile Intrigue enter the market in larger numbers additional market-share increases are expected. GM vehicle deliveries in the United States in the first quarter of 1997 totaled 1,123,000 units, which resulted in a 30.2-percent share of the U.S. vehicle market, compared with 1,152,000 units and a 31.2-percent market share in the first quarter of 1996. (See additional information in "Highlights.") DELPHI AUTOMOTIVE SYSTEMS (DELPHI) Delphi Automotive Systems reported net income of $180 million in the first quarter of 1997, compared with net income of $79 million in the first quarter of 1996. The first-quarter-1997 results included a plant-closing charge of $50 million after taxes. Delphi reported pretax income of $238 million in the first quarter of 1997, compared with pretax income of $122 million in the prior-year period. Delphi's net-profit margin was 2.7 percent in the first quarter of 1997, compared with a net-profit margin of 1.3 percent in the prior-year period. Delphi's 1997 first-quarter sales to customers outside the GM-NAO vehicle groups increased compared to the 1996 first quarter and represented approximately 35 percent of total sales. "Delphi is continuing its transformation into a leading global automotive-systems supplier with an emphasis on customer satisfaction through technology leadership, quality, cost control and responsiveness," Smith said. "With approximately 35 percent of total sales in the first quarter of 1997 outside the GM-NAO vehicle groups, Delphi is on track to meet its goal of 50 percent non-GM-NAO sales by the end of 2002." GM INTERNATIONAL OPERATIONS (GMIO) GM International Operations reported net income of $317 million for the first quarter of 1997, compared with net income of $432 million in the same period of 1996. GMIO reported pretax income of $476 million in the first quarter of 1997, compared with pretax income of $577 million in first quarter of 1996. The net-profit margin for GMIO was 3.8 percent in the first quarter of 1997, compared with 4.8 percent in the prior-year period. GM's automotive operations in Europe reported net income of $149 million in the first quarter of 1997, compared with net income of $285 million in the prior-year period. The first-quarter-1997 results included a $55-million after-tax gain related to an agreement with VW. - 4 - "The lower earnings in the first quarter of 1997 were primarily due to reduced volume and higher sales incentives across Europe under intensely competitive market conditions, coupled with lower equity earnings, primarily from Saab as they await the release of their new 9-5 models later in the year," Smith said. For the remainder of GM International Operations, which include the Latin American and Asia and Pacific Operations, net income totaled $168 million in the first quarter of 1997, compared with $147 million in the prior-year period. During the first quarter of 1997, GM and Shanghai Automotive Industry Corp. signed joint venture contracts to manufacture 100,000 Buicks annually in China. GM also announced plans to construct a third assembly facility in Brazil to capitalize on the volume growth in Latin American markets. GMIO volume totaled 788,000 unit deliveries in the first quarter of 1997 resulting in an 8.4-percent market share, compared with first-quarter-1996 deliveries of 807,000 units and a market share of 8.9 percent. SPECIAL ITEMS The first-quarter-1997-results were affected by special items, which included an after-tax gain of $55 million, or $0.07 per share of GM $1-2/3 par value common stock, that resulted from an agreement with Volkswagen settling a civil lawsuit which GM brought against VW. The first-quarter-1997 results were negatively impacted by a pretax plant-closing charge of $80 million ($50 million after taxes, or $0.07 per share of GM $1-2/3 par value common stock) related to the recent announcement that Delphi Interior and Lighting Systems will cease production at its Trenton, N.J., plant during the 1998 calendar year. The first-quarter-1996 results included a $120 million pretax gain ($72 million after taxes, or $0.07 per share of GM $1-2/3 par value common stock) associated with the sale of a 2.5-percent equity interest in DIRECTV(R). 1996 STRIKE-RELATED IMPACT The first-quarter-1996 results also included the $900-million after-tax unfavorable impact ($1.20 per share of GM $1-2/3 par value common stock) related to a 17-day strike at two GM component plants in Dayton, Ohio, that resulted in the temporary shutdown of 26 of 29 GM North American assembly plants and certain automotive component plants during the quarter. Included in the above amount are the following sector-specific after-tax approximate effects of the strike: GM-NAO, $750 million; Delphi, $120 million, and Hughes, $30 million. # # # HIGHLIGHTS (ATTACHED) - 5 - HIGHLIGHTS - Q1 Financial Results (Dollars in Millions Except Per Share Amounts) Three Months Ended March 31, ---------------------- 1997 1996 ---------------------------- --------- ---------- Net sales and revenues Manufactured products $37,440 $34,658 Financial services 3,197 3,179 Other income 1,623 1,403 -------- -------- Total net sales and revenues $42,260 $39,240 -------- -------- Gross profit margin percentage(1) 17.2% 13.1% ..................................................... Income from continuing operations before income taxes(1) $2,129 $684 Effective income tax rate (1) 34.3% 34.4% ..................................................... Income from continuing operations $1,796 $800 Income from discontinued operations - 219 -------- -------- Consolidated net income $1,796 $1,019 ======== ======== Net profit margin on income from continuing operations (1) 4.8% 2.3% ======== ======== ..................................................... Earnings Attributable to Common Stocks $1-2/3 par value(2) $1,717 $714 Class E $ - $209 Class H $ 59 $ 76 ..................................................... Earnings Per Share Attributable to Common Stocks $1-2/3 par value(2) $2.30 $0.94 Class E $ - $0.45 Class H $0.59 $0.78 ..................................................... Cash Dividends Per Share of Common Stocks $1-2/3 par value $0.50 $0.40 Class E $ - $0.15 Class H $0.25 $0.24 ..................................................... Book Value Per Share of Common Stocks March 31 Dec. 31 March 31 1997 1996 1996 -------- ------- -------- $1-2/3 par value $28.10 $27.95 $26.67 Class E $ - $ - $ 3.40 Class H $14.05 $13.97 $13.35 .................................................... See footnotes beginning on page 10. continues - 6 - HIGHLIGHTS - Q1 Financial Results (Dollars in Millions) Three Months Ended March 31, ---------------------- 1997 1996 ---------------------------- --------- ---------- Major Business Sector Results GM-NAO: Net sales and revenues $24,859 $21,683 ====== ====== Pre-tax income (loss) $1,127 $(517) Income tax expense (benefit) 378 (222) Equity income 15 16 ------ ------ GM-NAO net income (loss) $764 $(279) ------ ------ Delphi: Net sales and revenues $6,664 $6,189 ====== ====== Pre-tax income $238 $122 Income tax expense 72 47 Equity income 14 4 ------ ------ Delphi net income $180 $79 ------ ------ GMIO: Net sales and revenues $8,283 $8,997 ====== ====== Pre-tax income $476 $577 Income tax expense 164 170 Equity income 5 25 ------ ------ GMIO net income (3) $317 $432 ------ ------ GMAC net income $372 $309 Hughes earnings 235 312 Other (4) (72) (53) ------ ------ Income from continuing operations 1,796 800 Income from discontinued operations - 219 ------ ------ Consolidated net income $1,796 $1,019 ====== ====== ..................................................... See footnotes beginning on page 10. continues - 7 - HIGHLIGHTS - Q1 Special and Unusual Items (Dollars in Millions Except Per Share Amounts) Three Months Ended March 31, ---------------------- 1997 1996 --------- ---------- Special and Unusual Items Analysis Income from continuing operations $1,796 $800 ------ ------ Special and unusual items VW settlement (5) 55 - Plant closing expense (6) (50) - Work stoppages (7) - (900) Sale of 2.5% of DIRECTV (8) - 72 ------ ------ Total special and unusual items 5 (828) ------ ------ Income from continuing operations -excluding special and unusual items $1,791 $1,628 ====== ====== ..................................................... $1-2/3 EPS Impact of Special and Unusual Items Attributable to continuing operations $2.30 $0.93 ----- ----- Special and unusual items VW settlement (5) 0.07 - Plant closing expense (6) (0.07) - Work stoppages (7) - (1.20) Sale of 2.5% of DIRECTV (8) - 0.07 ----- ------ Total special and unusual items - (1.13) ----- ------ Attributable to continuing operations - excluding special and unusual items $2.30 $2.06 ===== ====== ..................................................... See footnotes beginning on page 10. continues - 8 - HIGHLIGHTS - Q1 Operating Information Three Months Ended March 31, ---------------------- 1997 1996 --------- ---------- Worldwide Wholesale Sales (Units in 000s) United States: Cars 698 591 Trucks 554 461 ------- ------- Total United States 1,252 1,052 Canada and Mexico 150 114 ------- ------- Total North America 1,402 1,166 International 783 792 ------- ------- Total Worldwide 2,185 1,958 ======= ======= .................................................... Vehicle Unit Deliveries (Units in 000s) United States Chevrolet - Cars 251 263 - Trucks 358 372 Pontiac 145 127 GMC 109 109 Buick 87 96 Oldsmobile 65 74 Saturn 60 64 Cadillac 42 41 Other 6 6 ----- ----- Total United States 1,123 1,152 Canada and Mexico 121 103 ------ ------ Total North America 1,244 1,255 ------ ------ International Europe 466 489 Latin America, Africa, and the Middle East 162 160 Asia and Pacific 160 158 ------ ------ Total International 788 807 ------ ------ Total Worldwide 2,032 2,062 ====== ====== .................................................... Market Share United States Cars 31.5% 32.2% Trucks 28.6% 29.9% Total 30.2% 31.2% Western Europe 11.5% 12.0% Latin America 16.0% 17.2% Asia and Pacific 4.2% 4.4% Total Worldwide 15.1% 15.8% .................................................... U.S. Retail/Fleet Mix % Fleet Sales - Cars 26.5% 25.0% % Fleet Sales - Trucks 13.6% 11.3% Total Vehicles 20.9% 19.2% .................................................... Days Supply of Inventory -- U.S. Gross Landed Stock Cars 81 84 Trucks 91 81 .................................................... Capacity Utilization % U.S. and Canada (2-shift rated) 95.3% 69.1% .................................................... Retail Incentives (9)($ per unit) GM-NAO $860 $598 GM Europe $622 $443 .................................................... See footnotes beginning on page 10. continues - 9 - HIGHLIGHTS - Q1 Operating Information (Dollars in Millions Except Per Share Amounts) Three Months Ended March 31, ---------------------- 1997 1996 --------- ---------- Depreciation and amortization (1) Depreciation $1,051 $989 Amortization of special tools 787 761 Amortization of intangible assets 41 38 ----- ----- $1,879 $1,788 ===== ===== .................................................... Worldwide Employment at March 31 (in 000s) GM-NAO 242 252 Delphi 178 178 GMIO 112 109 GMAC 18 17 Hughes 88 83 Other 10 11 --- --- Employees associated with continuing operations 648 650 --- --- .................................................... Worldwide Payrolls-Continuing Operations $7,732 $7,540 .................................................... (1) Calculated with financing and insurance operations on an equity basis. (2) $1-2/3 par value includes: Three Months Ended March 31, ------------------- 1997 1996 ----- ----- Earnings attributable to: Continuing operations $1,717 $704 Discontinued operations - 10 ------- ------- Net earnings $1,717 $714 ======= ======= Earnings per share attributable to: Continuing operations $2.30 $0.93 Discontinued operations - 0.01 ------ ------- Net earnings per share $2.30 $0.94 ====== ======= (3) GMIO Includes: Three Months Ended March 31, ------------------ 1997 1996 ---- ---- GM Europe $149 $285 Other GMIO $168 $147 (4) Includes Allison Transmission Division, GM Locomotive Group, and purchase accounting adjustments, as well as certain tax and foreign exchange items not allocated to any one business sector. (5) The first-quarter 1997 results included a gain of $55 million after taxes, or $0.07 per share of GM $1-2/3 par value common stock, that resulted from an agreement with Volkswagen A.G. (VW) settling a civil lawsuit which GM brought against VW. (6) The first-quarter 1997 results were negatively impacted by a plant closing charge of $50 million after taxes, or $0.07 per share of GM $1-2/3 par value common stock, related to the recent announcement that Delphi Interior and Lighting Systems will cease production at its Trenton, N.J., plant during the 1998 calendar year. - 10 - HIGHLIGHTS - Q1 Operating Information - Concluded (7) Strike-related work stoppages in the first quarter of 1996 had an unfavorable impact of $900 million after taxes, or $1.20 per share of GM $1-2/3 par value common stock. (8) The first-quarter 1996 results also included a gain of $72 million after taxes, or $0.07 per share of GM $1-2/3 par value common stock associated with the sale of a 2.5 percent equity interest in DIRECTV. (9) Amounts reported for 1996 have been restated to reflect the methodology used to calculate Retail Incentives for the 1997 period. - 11 - GENERAL MOTORS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Months Ended March 31, 1997 1996 (Dollars in Millions Except Per Share Amounts) Net sales and revenues Manufactured products $37,440 $34,658 Financial services 3,197 3,179 Other income 1,623 1,403 ------- ------- Total net sales and revenues 42,260 39,240 ------ ------ Costs and expenses Cost of sales and other operating charges, exclusive of items listed below 31,030 30,130 Selling, general, and administrative expenses 3,591 3,070 Depreciation and amortization expenses 3,065 2,972 Interest expense 1,461 1,421 Plant closing expense 80 - Other deductions 248 414 ------- ------- Total costs and expenses 39,475 38,007 ------ ------ Income from continuing operations before income taxes 2,785 1,233 Income taxes 989 433 ------ ------- Income from continuing operations 1,796 800 Income from discontinued operations - 219 --------- ------ Net income 1,796 1,019 Dividends on preference stocks 20 20 ------ ------ Earnings on common stocks $1,776 $999 ===== === Earnings attributable to common stocks $1-2/3 par value from continuing operations $1,717 $704 Income from discontinued operations - 10 ------- ---- Net earnings attributable to $1-2/3 par value $1,717 $714 Income from discontinued operations attributable to Class E $ - $209 ===== === Net earnings attributable to Class H $59 $76 == == Average number of shares of common stocks outstanding (in millions) $1-2/3 par value 747 755 Class E - 463 Class H 100 97 Earnings per share attributable to common stocks $1-2/3 par value from continuing operations $2.30 $0.93 Income from discontinued operations - 0.01 ------ ---- Net earnings attributable to $1-2/3 par value $2.30 $0.94 ==== ==== Income from discontinued operations attributable to Class E $ - $0.45 ===== ==== Net earnings attributable to Class H $0.59 $0.78 ==== ==== Cash dividends per share of common stocks $1-2/3 par value $0.50 $0.40 Class E $ - $0.15 Class H $0.25 $0.24 - 12 - GENERAL MOTORS CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ASSETS March 31, March 31, 1997 Dec. 31, 1996 (Unaudited) 1996 (Unaudited) (Dollars in Millions) Assets Cash and cash equivalents $10,061 $14,063 $7,901 Other marketable securities 10,168 8,199 5,419 ------ ------- ------- Total cash and marketable securities 20,229 22,262 13,320 Finance receivables - net 62,202 57,550 59,092 Accounts and notes receivable (less allowances) 6,976 6,557 6,663 Inventories (less allowances) 12,851 11,898 12,376 Net assets of discontinued operations - - 5,245 Contracts in process (less advances and progress payments) 2,661 2,507 2,709 Deferred income taxes 20,138 19,510 20,164 Equipment on operating leases (less accumulated depreciation) 30,127 30,112 27,771 Property Real estate, plants, and equipment 69,191 69,770 68,097 Less accumulated depreciation (41,037) (41,298) (41,252) ------ ------ ------ Net real estate, plants, and equipment 28,154 28,472 26,845 Special tools - net 8,850 9,032 8,294 ------- ------- ------- Total property 37,004 37,504 35,139 Intangible assets - net 12,737 12,691 10,295 Other assets 21,134 21,551 19,056 -------- -------- -------- Total assets $226,059 $222,142 $211,830 ======= ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities Accounts payable (principally trade) $14,014 $14,221 $11,515 Notes and loans payable 88,111 85,300 80,299 Deferred income taxes 4,119 3,207 3,117 Postretirement benefits other than pensions 43,607 43,190 42,015 Pensions 7,814 7,599 6,203 Other liabilities and deferred credits 45,589 45,207 44,659 -------- -------- -------- Total liabilities 203,254 198,724 187,808 Stockholders' equity Preference stocks 1 1 1 Common stocks $1-2/3 par value (issued, 729,805,298; 756,619,625; and 756,621,525 shares) 1,216 1,261 1,261 Class E (issued, 487,568,555 shares at March 31, 1996) - - 49 Class H (issued, 101,108,669; 100,075,000; and 98,154,411 shares) 10 10 10 Capital surplus (principally additional paid-in capital) 17,689 19,189 19,114 Retained earnings 7,511 6,137 7,782 ------- ------- ------- Subtotal 26,427 26,598 28,217 Minimum pension liability adjustment (3,490) (3,490) (4,742) Accumulated foreign currency translation adjustments (475) (113) 118 Net unrealized gains on investments in certain debt and equity securities 343 423 429 ------- -------- -------- Total stockholders' equity 22,805 23,418 24,022 ------ ------ ------ Total liabilities and stockholders' equity $226,059 $222,142 $211,830 ======= ======= ======= - 13 - GENERAL MOTORS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Three Months Ended March 31, 1997 1996 (Dollars in Millions) Net cash provided by operating activities $4,097 $941 ----- --- Cash flows from investing activities Expenditures for property (1,807) (2,098) Investments in other marketable securities - acquisitions (11,603) (5,107) Investments in other marketable securities - liquidations 10,107 5,220 Finance receivables - acquisitions (37,475) (39,145) Finance receivables - liquidations 26,848 33,812 Proceeds from sales of finance receivables 5,538 5,876 Operating leases - acquisitions (5,527) (4,201) Operating leases - liquidations 4,124 2,744 Other 512 359 ------ ------ Net cash used in investing activities (9,283) (2,540) ----- ----- Cash flows from financing activities Net increase (decrease) loans payable 2,484 (2,343) Increase in long-term debt 4,207 4,307 Decrease in long-term debt (3,329) (2,823) Proceeds from issuing common stocks 206 190 Repurchases of common stocks (1,761) - Cash dividends paid to stockholders (422) (421) Proceeds from the sale of minority interest in DIRECTV - 138 Net cash provided by (used in) financing activities 1,385 (952) ----- ------ Effect of exchange rate changes on cash and cash equivalents (201) (73) ------- ------- Net cash used in continuing operations (4,002) (2,624) Net cash provided by discontinued operations - 29 --------- ------- Net decrease in cash and cash equivalents (4,002) (2,595) Cash and cash equivalents at beginning of the period 14,063 10,496 ------ ------ Cash and cash equivalents at end of the period $10,061 $7,901 ====== ===== - 14 - GENERAL MOTORS CORPORATION AND SUBSIDIARIES To facilitate analysis, the following financial data presents the financial statements for the Corporation's manufacturing, wholesale marketing, defense, and electronics operations with the financing and insurance operations (primarily GMAC) reflected on an equity basis. This is the same basis and format used in years prior to the Corporation's adoption of SFAS No. 94, Consolidation of All Majority-Owned Subsidiaries. Consolidated Statements of Income With Financing and Insurance Operations on an Equity Basis (Unaudited) Three Months Ended March 31, 1997 1996 (Dollars in Millions) Net sales and revenues $37,457 $34,672 ------ ------ Costs and expenses Cost of sales and other operating charges, exclusive of items listed below 31,024 30,123 Selling, general, and administrative expe 2,884 2,448 Depreciation and amortization expenses 1,879 1,788 Plant closing expense 80 - -------- ---------- Total costs and expenses 35,867 34,359 ------ ------ Operating income 1,590 313 Other income less income deductions 758 567 Interest expense 219 196 ----- ------ Income from continuing operations before income 2,129 684 Income taxes 730 235 ------ ------ Income from continuing operations before earnings of nonconsolidated affiliates 1,399 449 Earnings of nonconsolidated affiliates 397 351 ------ ------ Income from continuing operations 1,796 800 Income from discontinued operations - 219 -------- ------ Net income $1,796 $1,019 ===== ===== Net profit margin (1) 4.8% 2.3% (1) Net profit margin represents income from continuing operations as a percentage of net sales and revenues. - 15 - GENERAL MOTORS CORPORATION AND SUBSIDIARIES Condensed Consolidated Balance Sheets With Financing and Insurance Operations on an Equity Basis (Unaudited) March 31, Dec. 31, March 31, 1997 1996 1996 (Dollars in Millions) ASSETS Cash and cash equivalents $9,395 $13,320 $6,539 Other marketable securities 5,233 3,642 1,100 ------- ------- ----- Total cash and marketable securities 14,628 16,962 7,639 Accounts and notes receivable (less allowances) Trade 5,507 4,909 5,290 Nonconsolidated affiliates 1,844 927 2,077 Inventories (less allowances) 12,851 11,898 12,376 Net assets of discontinued operations - - 5,245 Contracts in process - net 2,661 2,507 2,709 Net equipment on operating leases 4,187 3,918 3,909 Deferred income taxes and other 3,483 3,141 5,481 ------- ------- ------ Total current assets 45,161 44,262 44,726 Equity in net assets of nonconsolidated affiliates 9,696 9,855 9,669 Deferred income taxes 20,354 20,075 17,737 Other investments and miscellaneous assets 11,594 11,391 11,844 Property - net 36,634 37,156 35,005 Intangible assets - net 12,573 12,523 10,129 -------- -------- -------- Total assets $136,012 $135,262 $129,110 ======= ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable $11,379 $11,527 $9,123 Loans payable 1,306 1,214 1,779 Accrued liabilities and customer deposits 30,168 29,822 27,569 ------ ------ ------ Total current liabilities 42,853 42,563 38,471 Long-term debt 5,316 5,192 4,510 Capitalized leases 191 198 163 Postretirement benefits other than pensions 40,988 40,578 39,410 Pensions 6,183 5,966 5,102 Other liabilities and deferred income taxes 15,956 15,742 15,829 Deferred credits 1,720 1,605 1,603 --------- --------- --------- Total liabilities 113,207 111,844 105,088 ------- ------- ------- Stockholders' equity 22,805 23,418 24,022 -------- -------- -------- Total liabilities and stockholders' equity $136,012 $135,262 $129,110 ============ ======= ======= - 16 - GENERAL MOTORS CORPORATION AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows With Financing and Insurance Operations on an Equity Basis (Unaudited) Three Months Ended March 31, 1997 1996 (Dollars in Millions) Net cash provided by (used in) operating activities $1,808 $(998) ----- ---- Cash flows from investing activities Expenditures for property (1,724) (2,054) Investments in other marketable securities - acquisitions (6,199) (2,219) Investments in other marketable securities - liquidations 4,608 2,313 Operating leases - acquisitions (1,352) (1,002) Operating leases - liquidations 1,001 1,500 Other (104) 106 ------ ------ Net cash used in investing activities (3,770) (1,356) ----- ------ Cash flows from financing activities Net increase (decrease) in loans payable 93 (407) Increase in long-term debt 154 962 Decrease in long-term debt (30) (570) Proceeds from issuing common stocks 206 190 Repurchases of common stocks (1,761) - Cash dividends paid to stockholders (422) (421) Proceeds from sale of minority interest in DIRECTV - 138 -------- ----- Net cash used in financing activities (1,760) (108) ----- ---- Effect of exchange rate changes on cash and cash equivalents (203) (75) ------ ------- Net cash used in continuing operations (3,925) (2,537) Net cash provided by discontinued operations - 29 --------- ------- Net decrease in cash and cash equivalents (3,925) (2,508) Cash and cash equivalents at beginning of the period 13,320 9,047 ------ ------ Cash and cash equivalents at end of the period $9,395 $6,539 ===== ===== - 17 - HUGHES ELECTRONICS CORPORATION NEWS RELEASE Los Angeles, April 14, 1997 - Hughes Electronics Corporation (Hughes) today reported first quarter earnings, before the effects of purchase accounting adjustments related to General Motors' (GM) acquisition of Hughes Aircraft Company, of $235.2 million, or $0.59 per share of GM Class H common stock. Revenues for the period were $4,152.7 million, an 11.1% increase from the $3,736.7 million reported in the first quarter of 1996. Excluding the 1996 first quarter $71.6 million after-tax gain ($0.18 per share) from the sale of a 2.5% equity interest in DIRECTV to AT&T, earnings for the first quarter of 1997 decreased 2.0% from the $240.1 million and earnings per share decreased $0.01 per share from the $0.60 per share in the year earlier period. This reduction included a change in the amortization period for certain deferred subscriber acquisition costs incurred by DIRECTV, which decreased earnings and earnings per share for the quarter by $23.3 million and $0.06, respectively. Operating profit (excluding GM purchase accounting adjustments) was $324.8 million for the quarter, a 15.7% decrease from the operating profit of $385.2 million reported during the comparable period in 1996. The operating profit margin on the same basis was 7.9% for the quarter compared with 10.7% in the first quarter of 1996. Operating profit was reduced by $35.8 million as a result of the change in the amortization period for certain DIRECTV subscriber acquisition costs. C. Michael Armstrong, Hughes Chairman and Chief Executive Officer, said that each of Hughes' three business segments contributed to the first quarter sales growth. "The Telecommunications and Space segment led the Company's sales increase due to continued DIRECTV subscriber growth and increased sales of commercial and government satellites. The Automotive Electronics segment sales growth was driven by increased production volumes while the Aerospace and Defense Systems segment sales increase was primarily due to build-up of newer programs, particularly in information systems and services." Mr. Armstrong said that the first quarter earnings decline, excluding last year's $71.6 million after-tax gain related to DIRECTV, was principally due to lower Galaxy satellite transponder sales, increased expenses related to the change in the amortization period for certain subscriber acquisition costs incurred by DIRECTV, and lower margins in Automotive Electronics primarily due to price reductions. These factors were offset in part by the favorable impact of a lower effective tax rate in the quarter. On January 16, 1997, GM and Hughes announced a series of transactions designed to address strategic challenges and unlock shareholder value in the three Hughes business segments. The transactions include the tax-free spin-off of the Hughes defense business to holders of GM's $1-2/3 par value and Class H common stock, followed by the tax-free merger of that business with Raytheon Company. At the same time, Delco Electronics will be transferred from Hughes to GM's Delphi Automotive Systems unit. Finally, GM's Class H common stock will be recapitalized into a tracking stock linked to the telecommunications and space business of Hughes. The transactions are expected to be submitted to stockholders for approval in late 1997. - 18 - Segment Financial Review: First Quarter TELECOMMUNICATIONS AND SPACE Revenues for the quarter were $1,023.4 million, an increase of 9.3% over revenues of $936.4 million reported in the prior year's first quarter. Excluding the $120.3 million pre-tax gain recognized from the sale of 2.5% of DIRECTV to AT&T in 1996, revenues increased 25.4%. This growth was primarily due to continued expansion of the DIRECTV subscriber base in the United States and Latin and South America, and increased sales of commercial and government satellites which more than offset the impact from lower Galaxy transponder sales. DIRECTV subscribers at March 1997 month-end totaled 2,470,000 in the United States and 105,000 in Latin and South America. Operating profit in the first quarter was $7.2 million compared with $74.5 million reported in the same period in 1996. First quarter operating profit margin declined to 0.7% in 1997 from 9.1% in 1996. These reductions were largely the result of lower Galaxy transponder sales, start-up operating losses from the Company's Latin and South American DIRECTV subsidiary, Galaxy Latin America, and increased expenses resulting from the change in the amortization period for DIRECTV subscriber acquisition costs related to a consumer rebate and manufacturers' incentive program. Based on recent guidance from the staff of the Securities and Exchange Commission, the period over which such costs are amortized has been reduced from three years to one year. The effect of this change was to reduce operating profit and operating profit margin for the segment by $35.8 million and 3.5 points, respectively. AUTOMOTIVE ELECTRONICS Revenues for the quarter increased 13.8% to $1,447.0 million from revenues of $1,271.8 million for the same period in 1996. The growth was principally due to a 20.5% increase in GM vehicles produced in the United States and Canada (excluding joint ventures) and a 12.2% increase in international and non-GM sales (from $245 million to $275 million) partially offset by a 5.9% decline in Delco-supplied electronic content (from $929 to $874 per GM vehicle produced in the United States and Canada, excluding joint ventures). Last year's first quarter performance was negatively impacted by the 17-day strike at two GM component plants in Dayton, Ohio that resulted in the temporary shutdown of 26 of 29 GM North American assembly plants. Operating profit decreased 8.6% in the first quarter to $145.6 million from $159.3 million in the comparable period in 1996. The decline was primarily due to price reductions resulting from competitive pricing in connection with GM's global sourcing initiative and the impact from continued international expansion which more than offset the increased production volume benefits. The 1996 first quarter results included an operating loss of approximately $50 million related to the work stoppage described above. First quarter operating profit margin declined to 10.2% from 12.6% in 1996. AEROSPACE AND DEFENSE SYSTEMS First quarter 1997 revenues were $1,646.6 million, an 8.9% increase over revenues of $1,512.4 million reported last year. The growth was principally due to additional revenues resulting from the build-up of newer programs, particularly information systems and services programs such as Desktop V, Wide Area Augmentation System, and Hughes Air Warfare Center. Primarily due to these revenue increases, operating profit for the period increased 9.8% to $173.4 million compared with $157.9 million for the first quarter of 1996. The 1997 first quarter operating profit margin remained unchanged at 10.5%, as compared to 1996. - 19 - CONSOLIDATED STATEMENT OF INCOME AND AVAILABLE SEPARATE CONSOLIDATED NET INCOME (Dollars in Millions Except Per Share Amounts) Three Months Ended March 31, 1997 1996 Revenues Net sales Outside customers $2,765.7 $2,438.9 General Motors and affiliates 1,362.5 1,174.7 Other income - net 24.5 123.1 - ------------------ ---- ----- Total Revenues 4,152.7 3,736.7 - -------------- ------- ------- Costs and Expenses Cost of sales and other operating charges, exclusive of items listed below 3,216.8 2,796.5 Selling, general, and administrative expenses 440.5 300.3 Depreciation and amortization 146.1 131.6 Amortization of GM purchase accounting adjustments related to Hughes Aircraft Company 30.6 30.6 Interest expense - net 3.9 5.2 - ---------------------- --- --- Total Costs and Expenses 3,837.9 3,264.2 - ------------------------ ------- ------- Income before Income Taxes 314.8 472.5 Income taxes 110.2 191.4 - ------------ ----- ----- Net Income 204.6 281.1 Adjustments to exclude the effect of GM purchase accounting adjustments related to Hughes Aircraft Company 30.6 30.6 ---------------------------------------------- ---- ---- Earnings Used for Computation of Available Separate Consolidated Net Income $235.2 $311.7 ================================ ====== ====== Available Separate Consolidated Net Income $59.1 $76.0 ========================================== ===== ===== Net Earnings Attributable to General Motors Class H Common Stock on a Per Share Basis $0.59 $0.78 ========================================= ===== ===== - 20 - CONSOLIDATED BALANCE SHEET (Dollars in Millions) March 31, December 31, ASSETS 1997 1996 - ------ -------- ------------ Current Assets Cash and cash equivalents $893.0 $1,161.3 Accounts and notes receivable Trade receivables 1,291.9 1,200.6 General Motors and affiliates 116.8 113.4 Contracts in process 2,661.0 2,507.1 Inventories 1,612.3 1,528.5 Prepaid expenses, including deferred income taxes 737.6 568.1 - ------------------------------------------------- ----- ----- Total Current Assets 7,312.6 7,079.0 Property - Net 2,879.4 2,886.6 Telecommunications and Other Equipment - Net 1,168.4 1,133.5 Intangible Assets - Net 3,522.7 3,466.0 Investments and Other Assets 1,858.7 1,915.0 - ---------------------------- ------- ------- Total Assets $16,741.8 $16,480.1 ============ ========= ========= LIABILITIES AND STOCKHOLDER'S EQUITY Current Liabilities Accounts payable Outside $1,008.9 $896.4 General Motors and affiliates 22.4 27.5 Advances on contracts 850.3 868.9 Notes and loans payable 634.9 248.1 Income taxes payable 189.2 132.9 Accrued liabilities 1,641.8 2,025.8 - ------------------- ------- ------- Total Current Liabilities 4,347.5 4,199.6 Long-Term Debt and Capitalized Leases 31.3 34.5 Postretirement Benefits Other Than Pensions 1,668.4 1,658.9 Other Liabilities and Deferred Credits 1,407.5 1,407.2 Total Stockholder's Equity 9,287.1 9,179.9 - -------------------------- ------- ------- Total Liabilities and Stockholder's Equity $16,741.8 $16,480.1 Holders of GM Class H common stock have no direct rights in the equity or assets of Hughes, but rather have rights in the equity and assets of General Motors (which includes 100% of the stock of Hughes). - 21 - PRO FORMA SELECTED SEGMENT DATA* (Dollars in Millions) Three Months Ended March 31, 1997 1996 TELECOMMUNICATIONS AND SPACE Revenues Amount $1,023.4 $936.4 As a percentage of Hughes Revenues 24.6% 25.1% Net Sales $1,018.8 $821.0 Operating Profit (1) $7.2 $74.5 Operating Profit Margin (2) 0.7% 9.1% Depreciation and Amortization (3) $50.3 $46.2 Capital Expenditures (4) $94.0 $70.3 - ------------------------ ----- ----- AUTOMOTIVE ELECTRONICS Revenues Amount $1,447.0 $1,271.8 As a percentage of Hughes Revenues 34.8% 34.0% Net Sales $1,433.9 $1,260.2 Operating Profit (1) $145.6 $159.3 Operating Profit Margin (2) 10.2% 12.6% Depreciation and Amortization $56.2 $48.8 Capital Expenditures $35.9 $50.3 - -------------------- ----- ----- AEROSPACE AND DEFENSE SYSTEMS Revenues Amount $1,646.6 $1,512.4 As a percentage of Hughes Revenues 39.7% 40.5% Net Sales $1,644.8 $1,502.2 Operating Profit (1) $173.4 $157.9 Operating Profit Margin (2) 10.5% 10.5% Depreciation and Amortization (3) $37.0 $32.7 Capital Expenditures $30.3 $28.5 - -------------------- ------ ----- CORPORATE AND OTHER Operating Loss (1) $(1.4) $(6.5) - ------------------ ------ ------ * The Consolidated Financial Statements reflect the application of purchase accounting adjustments related to GM's acquisition of Hughes Aircraft Company. However, as provided in the General Motors Certificate of Incorporation, the earnings attributable to GM Class H common stock for purposes of determining the amount available for the payment of dividends on GM Class H common stock specifically excludes such adjustments. In order to provide additional analytical data, the above unaudited pro forma selected segment data, which excludes the purchase accounting adjustments related to GM's acquisition of Hughes Aircraft Company, is presented. (1) Net Sales less Total Costs and Expenses other than Interest Expense. (2) Operating Profit as a percentage of Net Sales. (3) Excludes amortization arising from purchase accounting adjustments related to GM's acquisition of Hughes Aircraft Company amounting to $5.3 million for the Telecommunications and Space segment and $25.2 million for the Aerospace and Defense Systems segment in 1997 and 1996. (4) Includes expenditures related to telecommunications and other equipment amounting to $57.6 million and $16.0 million, in 1997 and 1996, respectively. - 22 - GENERAL MOTORS ACCEPTANCE CORPORATION NEWS RELEASE GMAC ANNOUNCES STRONG FIRST-QUARTER EARNINGS DETROIT -- GMAC (General Motors Acceptance Corporation) reported first-quarter 1997 consolidated net income of $372 million, up 20% from $309 million earned in the first quarter of 1996, GMAC President John R. Rines announced today. Excluding the cumulative effect of a favorable accounting change made in 1991, these results were the highest first-quarter earnings in 10 years. In the quarter, net income from financing operations, including the GMAC Mortgage Group, totaled $294 million, up 8% from $272 million earned in the first quarter of 1996. Results for the first three months of 1997 benefited from higher earnings from the mortgage operations and increased net interest margins in the United States and Canada. Motors Insurance Corporation, GMAC's insurance subsidiary, generated net income of $78 million in the first quarter, compared with $37 million earned last year. MIC's earnings increase is principally due to higher capital gains. * * * - 23 - SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. GENERAL MOTORS CORPORATION -------------------------- (Registrant) Date April 14, 1997 ----------------- By s/Peter R. Bible ------------------------------- (Peter R. Bible, Chief Accounting Officer) - 24 - -----END PRIVACY-ENHANCED MESSAGE-----