-----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, EHFWsVaz3WSocygotuYXvXGiBTcP++xG+OYF31vbE5eySkSKXnTpUOsxp5Vz8VX0 kRgff7idkukqezASxKG+2w== 0000040730-97-000025.txt : 19970717 0000040730-97-000025.hdr.sgml : 19970717 ACCESSION NUMBER: 0000040730-97-000025 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970714 ITEM INFORMATION: Other events FILED AS OF DATE: 19970716 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: 97641456 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\2ndqtrPR.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) July 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 July 16, 1997, a news release was issued on the subject of second quarter consolidated earnings for General Motors (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 for second quarter earnings of Hughes Electronics Corporation (Hughes), dated July 15, 1997, and General Motors Acceptance Corporation (GMAC), dated July 16, 1997, respectively, were as follows: GM NEWS RELEASE GM REPORTS ALL-TIME-RECORD QUARTERLY EARNINGS PER SHARE OF $2.68 FOR THE SECOND QUARTER OF 1997. CONSOLIDATED NET INCOME TOTALED $2.1 BILLION. DETROIT -- General Motors Corporation reported today that earnings per share of GM $1-2/3 par value common stock totaled $2.68 in the second quarter of 1997 -- the highest for any quarter in the corporation's history. Consolidated net income for the period totaled $2.1 billion. That compares with $1.9 billion, or $2.63 per share, in the year-ago period. Excluding the $490 million after-tax unfavorable impact of strike-related production losses in the second quarter of 1997, and the favorable impact of special items (see "Special Items") consolidated income would have totaled $2.2 billion, or $2.88 per share. "GM's results on both a reported and adjusted basis are a further indication of our operating and financial strength," GM Chairman and Chief Executive Officer John F. Smith, Jr., said. "It's significant that, even though strike-related losses hit the bottom line pretty hard in the second quarter, we still earned a substantial amount of money during the period," he said. "I wish we could have avoided the strikes," Smith said, "but we have to make GM competitive, and we need local labor agreements that are consistent with that objective. We think that's really the only way we can provide the long-term prosperity for our people and the unions that represent them, as well as our shareholders." Smith cited GM's strong cash position -- $14.9 billion at the end of the second quarter -- as another sign of GM's financial strength. "The continued strong cash generation of our operations made it possible to fund our capital-spending programs and acquisition activities during the quarter, keep an appropriate level of cash reserves, and at the same time continue to repurchase shares of GM common stock during the second quarter." (See "GM Consolidated Financial Data.") Significant highlights for the second-quarter of 1997 from the automotive sectors included the following: - GM North American Operations (GM-NAO) reported net income of $474 million in the second quarter of 1997, compared with net income of $705 million in the second quarter of 1996. The 1997-second-quarter results included an unfavorable $375 million after-tax impact due to strike-related production losses. - 2 - - Delphi Automotive Systems (Delphi) reported net income of $310 million in the second quarter of 1997, compared with net income of $355 million in the second quarter of 1996. The 1997-second-quarter results included an unfavorable $85 million after-tax impact stemming from strike-related production losses. - GM International Operations (GMIO) reported net income of $488 million in the second quarter of 1997, compared with net income of $424 million in the prior-year period. The second-quarter-1997 results included a favorable $103 million after-tax gain related to the sale of GM Europe's share of Avis Europe. Highlights of second-quarter-1997 results reported by GM's major subsidiaries included the following: - General Motors Acceptance Corporation (GMAC) reported net income of $338 million for the second quarter of 1997, compared with net income of $350 million in the second quarter of 1996. - Hughes Electronics Corporation (Hughes) reported second-quarter-1997 earnings of $542 million, compared with earnings of $306 million in the prior-year period. The second quarter of 1997 included a $318 million after-tax gain related to the merger of the satellite service operations of Hughes and PanAmSat Corporation, and an unfavorable $30 million after-tax effect of the strike-related production losses at Hughes' Delco Electronics unit. (See additional information in sections detailing individual automotive sector results, "Special Items," "Strike-Related Impact," "Update on Hughes Transactions," and "Highlights.") GM CONSOLIDATED FINANCIAL DATA (with financing & insurance operations on an equity basis) The corporation's pretax income was $2.646 billion in the second quarter of 1997, compared with $2.605 billion in the second quarter of 1996. The corporation's after-tax net-profit margin -- net income as a percentage of net sales and revenues -- was 5.3 percent in the second quarter of 1997, compared with 4.7 percent in the second quarter of 1996. Excluding both the unfavorable strike-related impact and the favorable special items, the second-quarter-1997 net-profit margin would have been 5.2 percent. GM's cash position remained strong during the second quarter of 1997. Cash and marketable securities totaled $14.9 billion at June 30, 1997, compared with $13.0 billion at June 30, 1996, and $14.6 billion at March 31, 1997. In the second quarter of 1997, GM used approximately $469 million to acquire more than 8.3 million shares of GM $1-2/3 par value common stock under the corporation's stock-repurchase program announced in January. A total of $2.0 billion in cash was used to repurchase 35.5 million shares during the first half of 1997, completing 80 percent of the $2.5 billion repurchase program. - 3 - Net sales and revenues in the second quarter of 1997 totaled $39.7 billion, compared with $40.2 billion in the same period last year. Following is a summary of financial performance for GM's automotive business sectors (see "Highlights" for additional information): GM NORTH AMERICAN OPERATIONS (GM-NAO) GM North American Operations' second-quarter-1997 net income totaled $474 million, compared with $705 million in the second quarter of 1996. Excluding the $375 million after-tax unfavorable impact of strike-related production losses in the second quarter of 1997, net income would have totaled $849 million. GM-NAO reported pretax income of $683 million in the second quarter of 1997, compared with $1.1 billion in the prior-year period. GM-NAO's net-profit margin was 1.8 percent in the second quarter of 1997, compared with 2.6 percent in the prior-year period. Excluding the unfavorable strike-related impact, the second-quarter-1997 net-profit margin would have been 3.1 percent. "Second quarter earnings were significantly impacted by the strike-related work stoppages at the Oklahoma City and Pontiac East assembly plants, as well as an increase in vehicle incentives," Smith said. "But to put the quarter into perspective, without the impact of the work stoppages, GM-NAO's second-quarter earnings would have been its best performance for any quarter in more than 10 years." The second-quarter results were favorably affected by the improved profitability of GM's new vehicles and better manufacturing and engineering efficiencies. Smith said, "GM-NAO continues to build basic earnings power, increase its financial strength, and is establishing an excellent foundation for the future." GM vehicle deliveries in the United States in the second quarter of 1997 totaled 1,252,000 units, which resulted in a 30.5-percent share of the U.S. vehicle market, compared with 1,374,000 units, and a 32.0-percent share in the second quarter of 1996. (See additional information in "Highlights."). Although the market share is down compared with the second quarter of 1996, even with the impact of the strikes that resulted in the loss of 96,000 units of production, the second-quarter-1997 penetration represented a slight increase over the 30.2-percent market share in the first quarter of 1997. Increased market penetration is anticipated in the second half of 1997 with improved inventory of GM's newest products in North America, including the Pontiac Grand Prix, Buick Park Avenue and Century, Cadillac Catera, Chevrolet Malibu and Venture, Oldsmobile Cutlass and Silhouette, and Pontiac Trans Sport, which continue to gain share in their respective market segments. DELPHI AUTOMOTIVE SYSTEMS (DELPHI) Delphi Automotive Systems reported net income of $310 million in the second quarter of 1997, compared with net income of $355 million in the second quarter of 1996. The second-quarter-1997 results would have totaled $395 million, excluding the $85 million after-tax unfavorable strike-related impact. - 4 - Delphi reported pretax income of $468 million in the second quarter of 1997, compared with pretax income of $528 million in the prior-year period. Delphi's net-profit margin was 4.6 percent in the second quarter of 1997, compared with a net-profit margin of 4.9 percent in the prior-year period. Excluding the unfavorable strike-related impact, the second-quarter-1997 net-profit margin would have been 5.6 percent. Delphi's second-quarter sales to customers outside the GM-NAO vehicle groups increased more than $170 million compared with the prior-year period and represented approximately 37 percent of total sales, including all joint ventures. During the second quarter of 1997, Delphi continued its drive to strategically grow its operations worldwide through various activities, including acquisitions, alliances and joint ventures in Central and Eastern Europe, Asia and the United States. Smith said Delphi's global growth is well planned. "Delphi has long been committed to being the leader in all of its product lines as well as following its customers around the world. They continue to effectively implement this strategy and as a result, Delphi is becoming an even stronger sector." GM INTERNATIONAL OPERATIONS (GMIO) GM International Operations reported net income of $488 million for the second quarter of 1997, compared with net income of $424 million in the same period of 1996. The second-quarter-1997 results included a $103 million after-tax gain related to the sale of GM Europe's share of Avis Europe (see "Special Items"). GMIO reported pretax income of $727 million in the second quarter of 1997, compared with pretax income of $629 million in the second quarter of 1996. The net-profit margin for GMIO was 5.0 percent in the second quarter of 1997, compared with 4.7 percent in the prior-year period. Excluding the favorable impact of the above-mentioned sale of interest in Avis Europe, the second-quarter-1997 net-profit margin would have been 4.0 percent. Including the favorable impact of the Avis Europe transaction, GM's automotive operations in Europe reported net income of $312 million in the second quarter of 1997, compared with net income of $319 million in the second quarter of 1996. "Continuing the trend from the first quarter, the lower second-quarter earnings reflect higher sales incentives and increased advertising expenditures associated with intensely competitive market conditions," Smith said. For the remainder of GM International Operations, which include the Latin American and Asia and Pacific Operations, net income totaled $176 million in the second quarter of 1997, compared with $105 million in the prior-year period. The increased earnings in the second quarter of 1997 were primarily due to increased volume in Latin America. - 5 - SPECIAL ITEMS The second-quarter-1997-results were affected by special items, which included: - $318 million after-tax gain, or $0.33 per share of GM $1-2/3 par value common stock, and $0.80 per share of GM Class H common stock, related to the merger of the satellite service operations of Hughes and PanAmSat Corporation. - $103 million after-tax gain, or $0.14 per share of GM $1-2/3 par value common stock, related to the sale of GM Europe's equity interest in Avis Europe. STRIKE-RELATED IMPACT The second-quarter-1997 results also included the $490 million after-tax unfavorable impact ($0.67 per share of GM $1-2/3 par value common stock) of strike-related production losses at two key assembly plants. A strike by local union members in Oklahoma City, Okla., halted production of Chevrolet Malibu and Oldsmobile Cutlass models between April 4, 1997, and May 27, 1997. A separate strike by workers at a Pontiac, Mich., truck-assembly plant, shut down operations there beginning April 22, 1997. The work stoppages resulted in an estimated loss of 96,000 units of production during the second quarter of 1997, with the following sector-specific after-tax approximate effects: GM-NAO, $375 million; Delphi, $85 million, and the Delco Electronics unit of Hughes, $30 million. The estimated unfavorable impact does not take into account the effect of possible recoveries that may occur through truck-production increases that GM is likely to pursue at various facilities in future periods. UPDATE ON HUGHES TRANSACTIONS General Motors received a ruling from the Internal Revenue Service on July 14, 1997, that GM's contemplated spin-off of the defense business of Hughes Electronics would be tax-free to GM and its stockholders. The spin-off of the Hughes defense business to holders of GM $1-2/3 par value, and GM Class H common stocks, and its subsequent merger with Raytheon Company, are part of a series of related transactions announced by GM and Hughes in January 1997. The other related elements include the transfer of Delco Electronics from Hughes Electronics to GM's Delphi Automotive Systems, and the recapitalization of GM Class H common stock into a GM tracking stock linked to the telecommunications and space business of Hughes Electronics. The planned transactions must be approved by holders of GM $1-2/3 par value and Class H common stocks, among a number of other conditions. In addition, the merger of the Hughes defense business and Raytheon is subject to antitrust clearance and approval by Raytheon stockholders. GM expects to solicit stockholder approval for these transactions during the fourth quarter of 1997. # # # - 6 - HIGHLIGHTS - Q2 Financial Results (Dollars in Millions Except Per Share Amounts) Three Months Ended June 30, ---------------------- 1997 1996 ---------------------------- --------- ---------- Net sales and revenues Manufactured products $39,724 $40,169 Financial services 3,204 3,125 Other income 2,218 1,486 -------- -------- Total net sales and revenues $45,146 $44,780 -------- -------- ..................................................... Total net sales and revenues(1) $39,741 $40,182 Gross profit margin percentage(1) 17.0% 17.6% ..................................................... Income from continuing operations before income taxes(1) $2,646 $2,605 Effective income tax rate(1) 34.4% 34.0% ..................................................... Income from continuing operations $2,098 $2,096 Loss from discontinued operations - (209) -------- -------- Consolidated net income $2,098 $1,887 ======== ======== Net profit margin(1) 5.3% 4.7% ======== ======== ..................................................... Earnings (Loss) Attributable to Common Stocks $1-2/3 par value(2) $1,941 $1,986 Class E - (194)(3) Class H 137 75 ..................................................... Earnings (Loss) Per Share Attributable to Common Stocks $1-2/3 par value(2) $2.68 $2.63 Class E - (0.41)(3) Class H 1.35 0.77 ..................................................... 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 June 30 Dec. 31 June 30 1997 1996 1996 -------- ------- -------- $1-2/3 par value $29.99 $27.95 $24.79 Class H $14.99 $13.97 $12.40 .................................................... See footnotes beginning on page 11. continues - 7 - HIGHLIGHTS - Q2 Financial Results (Dollars in Millions) Three Months Ended June 30, ---------------------- 1997 1996 ---------------------------- --------- ---------- Major Business Sector Results GM-NAO: Net sales and revenues $25,823 $26,929 ====== ====== Pre-tax income $683 $1,074 Income tax expense 225 387 Equity income 16 18 ------ ------ GM-NAO net income $474 $705 ------ ------ Delphi: Net sales and revenues $6,778 $7,307 ====== ====== Pre-tax income $468 $528 Income tax expense 170 184 Minority interests 5 (5) Equity income 7 16 ------ ------ Delphi net income $310 $355 ------ ------ GMIO: Net sales and revenues $9,711 $9,101 ====== ====== Pre-tax income $727 $629 Income tax expense 233 209 Minority interests 7 (3) Equity income (loss) (13) 7 ------ ------ GMIO net income(4) $488 $424 ------ ------ GMAC net income $338 $350 Hughes earnings 542 306 Other(5) (54) (44) ------ ------ Income from continuing operations 2,098 2,096 ------ ------ Loss from discontinued operations - (209) ------ ------ Consolidated net income $2,098 $1,887 ====== ====== ..................................................... See footnotes beginning on page 11. continues - 8 - HIGHLIGHTS - Q2 Strike-Related and Special Items (Dollars in Millions Except Per Share Amounts) Three Months Ended June 30, ---------------------- 1997 1996 --------- ---------- Strike-Related and Special Items Analysis Income from continuing operations $2,098 $2,096 Work stoppages (6) (490) - ------ ------ Subtotal 2,588 2,096 PanAmSat merger (7) 318 - Avis Europe (8) 103 - ------ ------ Income from continuing operations -excluding strike-related and special items $2,167 $2,096 ====== ====== ..................................................... $1-2/3 EPS Impact of Strike-Related and Special Items Attributable to continuing operations $2.68 $2.65 Work stoppages (6) (0.67) - ------ ------ Subtotal 3.35 2.65 PanAmSat merger (7) 0.33 - Avis Europe (8) 0.14 - ----- ------ Attributable to continuing operations - excluding strike-related and special items $2.88 $2.65 ===== ====== ..................................................... See footnotes beginning on page 11. continues - 9 - HIGHLIGHTS - Q2 Operating Information Three Months Ended June 30, ---------------------- 1997 1996 --------- ---------- Worldwide Wholesale Sales (Units in 000s) United States: Cars 705 814 Trucks 536 575 ------- ------- Total United States 1,241 1,389 Canada and Mexico 174 137 ------- ------- Total North America 1,415 1,526 International 836 788 ------- ------- Total Worldwide 2,251 2,314 ======= ======= .................................................... Vehicle Unit Deliveries (Units in 000s) United States Chevrolet - Cars 254 337 - Trucks 384 394 Pontiac 169 162 GMC 124 126 Buick 118 129 Oldsmobile 81 97 Saturn 69 77 Cadillac 45 45 Other 8 7 ------ ----- Total United States 1,252 1,374 Canada and Mexico 162 131 ------ ------ Total North America 1,414 1,505 ------ ------ International Europe 492 491 Latin America, Africa, and the Middle East 203 168 Asia and Pacific 134 152 ------ ------ Total International 829 811 ------ ------ Total Worldwide 2,243 2,316 ====== ====== .................................................... Market Share United States Cars 32.2% 34.7% Trucks 28.5% 28.5% Total 30.5% 32.0% Western Europe 11.5% 11.1% Latin America 19.2% 19.7% Asia and Pacific 4.3% 4.6% Total Worldwide 16.4% 17.3% .................................................... U.S. Retail/Fleet Mix % Fleet Sales - Cars 26.4% 28.3% % Fleet Sales - Trucks 15.8% 13.3% Total Vehicles 21.8% 22.5% .................................................... Days Supply of Inventory -- U.S. Gross Landed Stock Cars 84 70 Trucks 105 88 .................................................... Capacity Utilization % U.S. and Canada (2-shift rated) 91.9% 93.3% .................................................... Retail Incentives (9)($ per unit) GM-NAO $1,060 $695 GM Europe $554 $495 .................................................... See footnotes beginning on page 11. continues - 10 - HIGHLIGHTS - Q2 Operating Information (Dollars in Millions Except Per Share Amounts) Three Months Ended June 30, ---------------------- 1997 1996 --------- ---------- Depreciation and amortization(1) Depreciation $1,076 $1,000 Amortization of special tools 790 824 Amortization of intangible assets 52 25 ----- ----- $1,918 $1,849 ===== ===== .................................................... Worldwide Employment at June 30 (in 000s) GM-NAO 243 256 Delphi 176 179 GMIO 114 109 GMAC 18 17 Hughes 88 84 Other 10 11 --- --- Employees associated with continuing operations 649 656 --- --- .................................................... Worldwide Payrolls-Continuing Operations $7,631 $7,432 .................................................... (1) Calculated with financing and insurance operations on an equity basis. (2) $1-2/3 par value includes: Three Months Ended June 30, ------------------- 1997 1996 ----- ----- Earnings (loss) attributable to: Continuing operations $1,941 $2,001 Discontinued operations - (15) ------- ------- Net earnings $1,941 $1,986 ======= ======= Earnings (loss) per share attributable to: Continuing operations $2.68 $2.65 Discontinued operations - (0.02) ------ ------- Net earnings per share $2.68 $2.63 ====== ======= (3) Through the June 7, 1996 split-off date. (4) GMIO Includes: Three Months Ended June 30, ------------------ 1997 1996 ---- ---- GM Europe $312 $319 Other GMIO $176 $105 (5) 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. (6) Strike-related work stoppages had an unfavorable effect of $490 million after taxes, or $0.67 per share of GM $1-2/3 par value common stock on the second quarter 1997 results. (7) Second quarter 1997 included a gain of $318 million after taxes, or $0.33 per share of GM $1-2/3 par value common stock, related to the merger of the satellite service operations of Hughes and PanAmSat Corporation. (8) Second quarter 1997 results included a gain of $103 million after taxes, or $0.14 per share of GM $1-2/3 par value common stock, related to the sale of GM Europe's equity interest in Avis Europe. (9) Amounts reported for 1996 have been restated to reflect the methodology used to calculate Retail Incentives for the 1997 period. - 11 - HIGHLIGHTS - 6 Months Financial Results (Dollars in Millions Except Per Share Amounts) Six Months Ended June 30, ---------------------- 1997 1996 ---------------------------- --------- ---------- Net sales and revenues Manufactured products $77,164 $74,826 Financial services 6,401 6,304 Other income 3,822 2,892 -------- -------- Total net sales and revenues $87,387 $84,022 -------- -------- ..................................................... Total net sales and revenues(1) $77,198 $74,854 Gross profit margin percentage(1) 17.1% 15.5% ..................................................... Income from continuing operations before income taxes(1) $4,756 $3,290 Effective income tax rate(1) 34.5% 34.0% ..................................................... Income from continuing operations $3,894 $2,896 Income from discontinued operations - 10 -------- -------- Consolidated net income $3,894 $2,906 ======== ======== Net profit margin(1) 5.0% 3.9% ======== ======== ..................................................... Earnings Attributable to Common Stocks $1-2/3 par value(2) $3,658 $2,700 Class E - 15(3) Class H 196 151 ..................................................... Earnings Per Share Attributable to Common Stocks $1-2/3 par value(2) $4.98 $3.57 Class E - 0.04(3) Class H 1.94 1.55 ..................................................... Cash Dividends Per Share of Common Stocks $1-2/3 par value $1.00 $0.80 Class E - 0.30 Class H 0.50 0.48 ..................................................... See footnotes on page 15. continues - 12 - HIGHLIGHTS - 6 Months Financial Results (Dollars in Millions) Six Months Ended June 30, ---------------------- 1997 1996 ---------------------------- --------- ---------- Major Business Sector Results GM-NAO: Net sales and revenues $50,682 $48,612 ====== ====== Pre-tax income $1,810 $557 Income tax expense 603 165 Equity income 31 34 ------ ------ GM-NAO net income $1,238 $426 ------ ------ Delphi: Net sales and revenues $13,442 $13,496 ====== ====== Pre-tax income $705 $649 Income tax expense 242 231 Minority interests 6 (4) Equity income 21 20 ------ ------ Delphi net income $490 $434 ------ ------ GMIO: Net sales and revenues $17,994 $18,098 ====== ====== Pre-tax income $1,200 $1,209 Income tax expense 397 379 Minority interests 10 (6) Equity income (loss) (8) 32 ------ ------ GMIO net income(4) $805 $856 ------ ------ GMAC net income $710 $659 Hughes earnings 777 618 Other(5) (126) (97) ------ ------ Income from continuing operations 3,894 2,896 ------ ------ Income from discontinued operations - 10 ------ ------ Consolidated net income $3,894 $2,906 ====== ====== See footnotes on page 15. continues - 13 - HIGHLIGHTS - 6 Months Operating Information Six Months Ended June 30, ---------------------- 1997 1996 --------- ---------- Worldwide Wholesale Sales (Units in 000s) United States: Cars 1,403 1,405 Trucks 1,090 1,035 ------- ------- Total United States 2,493 2,440 Canada and Mexico 324 252 ------- ------- Total North America 2,817 2,692 International 1,619 1,580 ------- ------- Total Worldwide 4,436 4,272 ======= ======= .................................................... Vehicle Unit Deliveries (Units in 000s) United States Chevrolet - Cars 505 600 - Trucks 742 766 Pontiac 314 289 GMC 233 235 Buick 205 225 Oldsmobile 146 171 Saturn 129 141 Cadillac 87 86 Other 14 13 ------ ----- Total United States 2,375 2,526 Canada and Mexico 283 234 ------ ------ Total North America 2,658 2,760 ------ ------ International Europe 958 980 Latin America, Africa, and the Middle East 365 328 Asia and Pacific 294 310 ------ ------ Total International 1,617 1,618 ------ ------ Total Worldwide 4,275 4,378 ====== ====== .................................................... Market Share United States Cars 31.9% 33.6% Trucks 28.6% 29.2% Total 30.4% 31.6% Western Europe 11.5% 12.1% Latin America 18.8% 19.8% Asia and Pacific 4.2% 4.5% Total Worldwide 15.7% 16.6% .................................................... U.S. Retail/Fleet Mix % Fleet Sales - Cars 26.4% 26.8% % Fleet Sales - Trucks 14.8% 12.4% Total Vehicles 21.4% 21.0% .................................................... Capacity Utilization % U.S. and Canada (2-shift rated) 93.6% 81.0% .................................................... Retail Incentives(6)($ per unit) GM-NAO $962 $652 GM Europe $556 $460 .................................................... See footnotes on page 15. continues - 14 - HIGHLIGHTS - 6 Months Operating Information (Dollars in Millions Except Per Share Amounts) Six Months Ended June 30, ---------------------- 1997 1996 --------- ---------- Depreciation and amortization(1) Depreciation $2,127 $1,989 Amortization of special tools 1,577 1,585 Amortization of intangible assets 93 63 ----- ----- $3,797 $3,637 ===== ===== .................................................... Worldwide Payrolls-Continuing Operations $15,364 $14,972 .................................................... (1) Calculated with financing and insurance operations on an equity basis. (2) $1-2/3 par value includes: Six Months Ended June 30, ---------------------- 1997 1996 --------- ---------- Earnings (loss) attributable to: Continuing operations $3,658 $2,705 Discontinued operations - (5) ----- ----- Net earnings $3,658 $2,700 ===== ===== Earnings (loss) per share attributable to: Continuing operations $4.98 $3.58 Discontinued operations - (0.01) ----- ----- Net earnings per share $4.98 $3.57 ===== ===== (3) Through the June 7, 1996 split-off date. (4) GMIO includes: Six Months Ended June 30, ---------------------- 1997 1996 --------- ---------- GM Europe $461 $604 Other GMIO $344 $252 (5) 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. (6) Amounts reported for 1996 have been restated to reflect the methodology used to calculate Retail Incentives for the 1997 period. - 15 - GENERAL MOTORS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Months Ended Six Months Ended June 30, June 30, 1997 1996 1997 1996 ------- ------- ------ ------ (Dollars in Millions Except Per Share Amounts) Net sales and revenues Manufactured products $39,724 $40,169 $77,164 $74,826 Financial services 3,204 3,125 6,401 6,304 Other income 2,218 1,486 3,822 2,892 ------- ------- ------- ------- Total net sales and revenues 45,146 44,780 87,387 84,022 ------ ------ ------ ------ Costs and expenses Cost of sales and other operating charges, exclusive of items listed below 33,008 33,116 64,038 63,247 Selling, general, and administrative expenses 3,984 3,578 7,575 6,648 Depreciation and amortization expenses 3,101 3,018 6,166 5,990 Interest expense 1,500 1,414 2,961 2,835 Plant closing expense - - 80 - Other deductions 320 452 568 866 -------- -------- -------- ------- Total costs and expenses 41,913 41,578 81,388 79,586 ------ ------ ------ ------ Income from continuing operations before income taxes and minority interests 3,233 3,202 5,999 4,436 Income taxes 1,153 1,098 2,142 1,530 Minority interests 18 (8) 37 (10) ------- --------- ------- --------- Income from continuing operations 2,098 2,096 3,894 2,896 Income (loss) from discontinued operations - (209) - 10 ------- -------- --------- -------- Net income 2,098 1,887 3,894 2,906 Dividends on preference stocks 20 20 40 40 ------- ------- ------- ------- Earnings on common stocks $2,078 $1,867 $3,854 $2,866 ===== ===== ===== ===== Earnings attributable to common stocks $1-2/3 par value from continuing operations $1,941 $2,001 $3,658 $2,705 Loss from discontinued operations - (15) - (5) ------ ------- --------- ------- Net earnings attributable to $1-2/3 par value $1,941 $1,986 $3,658 $2,700 ====== ====== ====== ====== Income (loss) from discontinued operations attributable to Class E $ - $(194) $ - $ 15 ===== === ===== ==== Net earnings attributable to Class H $137 $75 $196 $151 === == === === Average number of shares of common stocks outstanding (in millions) $1-2/3 par value 724 756 736 756 Class E - 479 - 470 Class H 101 98 101 98 Earnings per share attributable to common stocks $1-2/3 par value from continuing operations $2.68 $2.65 $4.98 $3.58 Loss from discontinued operations - (0.02) - (0.01) ------- ---- ------- ---- Net earnings attributable to $1-2/3 par value $2.68 $2.63 $4.98 $3.57 ===== ===== ===== ===== Income (loss) from discontinued operations attributable to Class E $ - $(0.41) $ - $0.04 ======= ==== ======= ==== Net earnings attributable to Class H $1.35 $0.77 $1.94 $1.55 ==== ==== ==== ==== Cash dividends per share of common stocks $1-2/3 par value $0.50 $0.40 $1.00 $0.80 Class E $ - $0.15 $ - $0.30 Class H $0.25 $0.24 $0.50 $0.48 - 16 - GENERAL MOTORS CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS June 30, June 30, 1997 Dec. 31, 1996 (Unaudited) 1996 Unaudited) (Dollars in Millions) ASSETS Cash and cash equivalents $11,674 $14,063 $12,461 Other marketable securities 9,343 8,199 5,903 ------- ------- ------- Total cash and marketable securities 21,017 22,262 18,364 Finance receivables - net 60,357 57,550 58,432 Accounts and notes receivable (less allowances) 7,461 6,557 7,249 Inventories (less allowances) 13,528 11,898 11,755 Contracts in process (less advances and progress payments) 2,264 2,187 2,440 Deferred income taxes 19,291 19,510 20,415 Equipment on operating leases (less accumulated depreciation) 32,300 30,112 28,944 Property Real estate, plants, and equipment 69,671 69,770 68,386 Less accumulated depreciation (40,911) (41,298) (41,299) ------ ------ ------ Net real estate, plants, and equipment 28,760 28,472 27,087 Special tools - net 8,893 9,032 8,324 ------- ------- ------- Total property 37,653 37,504 35,411 Intangible assets - net 15,029 12,691 10,282 Other assets - net 23,005 21,871 19,605 -------- -------- -------- Total assets $231,905 $222,142 $212,897 ======= ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities Accounts payable (principally trade) $14,197 $14,221 $13,231 Notes and loans payable 89,918 85,300 80,756 Deferred income taxes 4,199 3,207 3,424 Postretirement benefits other than pensions 44,007 43,190 42,393 Pensions 7,774 7,599 6,442 Other liabilities and deferred credits 46,661 45,115 45,628 -------- -------- ------- Total liabilities 206,756 198,632 191,874 ------- ------- ------- Minority interests 716 92 163 Redeemable preferred stock of subsidiary 402 - - Stockholders' equity Preference stocks 1 1 1 Common stocks $1-2/3 par value (issued, 721,480,932; 756,619,625; and 756,619,913 shares) 1,202 1,261 1,261 Class H (issued, 101,641,092; 100,075,000 and 98,853,477 shares) 10 10 10 Capital surplus (principally additional paid-in capital) 17,250 19,189 19,080 Retained earnings 9,201 6,137 4,773 ------- ------- ------ Subtotal 27,664 26,598 25,125 Minimum pension liability adjustment (3,490) (3,490) (4,742) Accumulated foreign currency translation adjustments (642) (113) 44 Net unrealized gains on investments in certain debt and equity securities 499 423 433 ------- ------- -------- Total stockholders' equity 24,031 23,418 20,860 ------ ------ ------ Total liabilities and stockholders' equity $231,905 $222,142 $212,897 ======= ======= ======= - 17 - GENERAL MOTORS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Six Months Ended June 30, 1997 1996 (Dollars in Millions) Net cash provided by operating activities $9,670 $9,583 ------ ----- Cash flows from investing activities Expenditures for property (4,268) (4,313) Investments in companies, net of cash acquired (1,509) (54) Investments in other marketable securities - acquisitions (18,147) (10,177) Investments in other marketable securities - liquidations 17,595 9,862 Finance receivables - acquisitions (79,997) (73,871) Finance receivables - liquidations 63,304 56,095 Proceeds from sales of finance receivables 12,930 18,466 Operating leases - acquisitions (10,649) (9,724) Operating leases - liquidations 6,227 5,701 Special inter-company payment from EDS - 500 Other 914 798 Net cash used in investing activities (13,600) (6,717) ------ ------ Cash flows from financing activities Net increase (decrease) in loans payable 3,269 (3,610) Increase in long-term debt 8,485 10,155 Decrease in long-term debt (7,061) (6,862) Proceeds from issuing common stocks 281 191 Repurchases of common stocks (2,292) - Cash dividends paid to stockholders (829) (837) Proceeds from sale of minority interest in DIRECTV(R) - 138 ------ ------ Net cash provided by (used in) financing activities 1,853 (825) ----- ------ Effect of exchange rate changes on cash and cash equivalents (312) (179) ----- ----- Net cash (used in) provided by continuing operations (2,389) 1,862 Net cash provided by discontinued operations - 103 ----- ------ Net (decrease) increase in cash and cash equivalents (2,389) 1,965 Cash and cash equivalents at beginning of the period 14,063 10,496 ------ ------ Cash and cash equivalents at end of the period $11,674 $12,461 ====== ====== - 18 GENERAL MOTORS CORPORATION AND SUBSIDIARIES To facilitate analysis, the following sections present 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 Six Months Ended June 30, June 30, 1997 1996 1997 1996 ------------------ ------------------ (Dollars in Millions) Net sales and revenues $39,741 $40,182 $77,198 $74,854 ------ ------ ------ ------ Costs and expenses Cost of sales and other operating charges, exclusive of items listed below 32,998 33,127 64,022 63,251 Selling, general, and administrative expenses 3,290 2,955 6,174 5,403 Depreciation and amortization expenses 1,918 1,849 3,797 3,637 Plant closing expense - - 80 - ------ ------ ------ ------ Total costs and expenses 38,206 37,931 74,073 72,291 ------ ------ ------ ------ Operating income 1,535 2,251 3,125 2,563 Other income less income deductions 1,330 583 2,069 1,152 Interest expense (219) (229) (438) (425) ------ ------ ------ ------ Income from continuing operations before income taxes, minority interests, and earnings of nonconsolidated affiliates 2,646 2,605 4,756 3,290 Income taxes 909 886 1,639 1,120 ------ ------ ----- ----- Income from continuing operations before minority interests and earnings of nonconsolidated affiliates 1,737 1,719 3,117 2,170 Minority interests 18 (8) 37 (10) Earnings of nonconsolidated affiliates 343 385 740 736 ------ ------ ------ ------ Income from continuing operations 2,098 2,096 3,894 2,896 Income (loss) from discontinued operations - (209) - 10 ------ ------ ------ ------ Net income $2,098 $1,887 $3,894 $2,906 ===== ===== ===== ===== Net profit margin (1) 5.3% 4.7% 5.0% 3.9% (1) Net profit margin represents net income as a percentage of net sales and revenues. - 19 - GENERAL MOTORS CORPORATION AND SUBSIDIARIES Consolidated Balance Sheets With Financing and Insurance Operations on an Equity Basis (Unaudited) June 30, Dec. 31, June 30, 1997 1996 1996 ---------- --------- -------- (Dollars in Millions) ASSETS Cash and cash equivalents $10,855 $13,320 $11,501 Other marketable securities 4,062 3,642 1,538 ------- ------- ------- Total cash and marketable securities 14,917 16,962 13,039 Accounts and notes receivable (less allowances) Trade 5,887 4,909 5,846 Nonconsolidated affiliates 1,478 927 2,413 Inventories (less allowances) 13,528 11,898 11,755 Contracts in process (less advances and progress payments) 2,264 2,187 2,440 Equipment on operating leases (less accumulated depreciation) 4,047 3,918 3,747 Deferred income taxes and other 3,161 3,140 5,412 ------- ------- ------- Total current assets 45,282 43,941 44,652 Equity in net assets of nonconsolidated affiliates 10,061 9,855 9,761 Deferred income taxes 19,692 20,075 17,981 Other investments and miscellaneous assets 13,586 11,712 12,225 Property - net 37,211 37,156 35,200 Intangible assets -net 14,864 12,523 10,116 -------- -------- -------- Total assets $140,696 $135,262 $129,935 ======= ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable $11,235 $11,527 $10,559 Loans payable 1,281 1,214 1,155 Accrued liabilities and customer deposits 31,431 29,822 29,011 ------ ------ ------ Total current liabilities 43,947 42,563 40,725 Long-term debt 5,967 5,192 5,264 Capitalized leases 188 198 175 Postretirement benefits other than pensions41,393 40,578 39,791 Pensions 5,822 5,966 5,349 Other liabilities and deferred income taxes16,385 15,650 15,959 Deferred credits 1,845 1,605 1,649 -------- -------- -------- Total liabilities 115,547 111,752 108,912 ------- ------- ------- Minority interests 716 92 163 Redeemable preferred stock of subsidiary 402 - - Stockholders' equity 24,031 23,418 20,860 -------- -------- -------- Total liabilities and stockholders' equity $140,696 $135,262 $129,935 ======= ======= ======= - 20 - GENERAL MOTORS CORPORATION AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows With Financing and Insurance Operations on an Equity Basis (Unaudited) Six Months Ended June 30, 1997 1996 (Dollars in Millions) Net cash provided by operating activities $7,479 $6,048 ----- ----- Cash flows from investing activities Expenditures for property (4,070) (4,176) Investments in companies, net of cash acquired (1,509) (54) Investments in other marketable securities - acquisitions(7,963) (5,261) Investments in other marketable securities - liquidations 7,543 4,917 Operating leases - acquisitions (2,610) (2,065) Operating leases - liquidations 1,667 2,826 Special inter-company payment from EDS - 500 Other (69) 202 ------- ------ Net cash used in investing activities (7,011) (3,111) ----- ----- Cash flows from financing activities Net increase (decrease) in loans payable 66 (1,034) Increase in long-term debt 195 1,898 Decrease in long-term debt (37) (760) Proceeds from issuing common stocks 281 191 Repurchases of common stocks (2,292) - Cash dividends paid to stockholders (829) (837) Proceeds from sale of minority interest in DIRECTV - 138 -------- ---- Net cash used in financing activities (2,616) (404) ----- ---- Effect of exchange rate changes on cash and cash equivalents (317) (182) Net cash (used in) provided by continuing operations (2,465) 2,351 Net cash provided by discontinued operations - 103 Net (decrease) increase in cash and cash equivalents (2,465) 2,454 Cash and cash equivalents at beginning of the period 13,320 9,047 Cash and cash equivalents at end of the period $10,855 $11,501 - 21 - HUGHES ELECTRONICS CORPORATION NEWS RELEASE Los Angeles, July 15, 1997 - Hughes Electronics Corporation (Hughes) today announced second quarter revenues of $4,755.7 million, an increase of 17.4% over revenues of $4,050.6 million for the same period in 1996. The 1997 second quarter revenues included a $489.7 million pre-tax gain related to the recently completed PanAmSat merger. Second quarter earnings, before the effects of purchase accounting adjustments related to General Motors' (GM) acquisition of Hughes Aircraft Company, were $541.4 million, an increase of 76.6% from the $306.6 million reported in the second quarter of 1996. Earnings per share increased 75.3% to $1.35 per share from $0.77 per share in 1996. The 1997 second quarter earnings included a $318.3 million after-tax gain ($0.80 per share) recognized in connection with the PanAmSat merger. Operating profit (excluding GM purchase accounting adjustments) was $339.1 million for the second quarter, a 24.7% decline from the $450.4 million reported during the comparable period in 1996. The operating profit margin on the same basis was 8.0% for the quarter compared with 11.2% in the second quarter of 1996. C. Michael Armstrong, Hughes Chairman and Chief Executive Officer, said the second quarter sales increase was primarily attributable to "continued DIRECTV(R) subscriber growth in the United States and Latin America, and increased sales in newer defense information systems and services programs, which more than offset the decline in Delco Electronics revenues due to strike-related production losses at two key GM assembly plants." Mr. Armstrong further stated that earnings, excluding the gain recognized in connection with the PanAmSat merger, declined principally due to lower operating margins at Delco Electronics as a result of reduced GM production volumes related to the work stoppages, and continued price reductions. Six-Month Financial Review For the first six months of 1997, revenues were $8,893.8 million, a 14.3% increase from the $7,782.6 million reported in the first half of 1996. This growth was primarily the result of the gain recognized in connection with the PanAmSat merger, DIRECTV subscriber growth, the build-up of newer defense programs, and increased sales of commercial satellites which more than offset the first quarter 1996 gain related to the sale of 2.5% of DIRECTV to AT&T. Operating profit (excluding GM purchase accounting adjustments) for the first six months of 1997 was $663.9 million compared with $835.6 million in the same period last year. The operating profit margin on the same basis for the first six months of 1997 was 7.9% compared with 10.9% in the prior year's period. These reductions were principally the result of lower margins in the Automotive Electronics segment mostly due to price reductions, increased DIRECTV expenses resulting from the change in the amortization period adopted in the first quarter of 1997 for certain subscriber acquisition costs in the United States, start-up operating losses related to the DIRECTV service in Latin America, and lower wireless telecommunications equipment sales and margins. - 22 - Earnings (excluding GM purchase accounting adjustments) increased 25.6% to $776.6 million in the first six months of 1997 compared with $618.3 million reported during the same period in 1996. Earnings per share increased 25.2% to $1.94 from $1.55 per share in the first six months of 1996. The earnings increase was principally due to the gain recognized upon completion of the PanAmSat merger which more than offset the reduced operating profit and first quarter 1996 gain from the sale of 2.5% of DIRECTV to AT&T. Transactions Update General Motors received a ruling from the Internal Revenue Service on July 14, 1997 that GM's contemplated spin-off of the Hughes defense business would be tax-free to GM and its stockholders. The spin-off of the Hughes defense business to holders of GM $1-2/3 par value, and GM Class H common stocks, and its subsequent merger with Raytheon Company, are part of a series of related transactions announced by GM and Hughes in January 1997. The other related elements include the transfer of Delco Electronics from Hughes to GM's Delphi Automotive Systems, and the recapitalization of GM Class H common stock into a GM tracking stock linked to the telecommunications and space businesses of Hughes. The planned transactions must be approved by holders of GM $1-2/3 par value and Class H common stocks, among a number of other conditions. In addition, the merger of the Hughes defense business and Raytheon is subject to antitrust clearance and approval by Raytheon stockholders. GM expects to solicit stockholder approval for these transactions during the fourth quarter of 1997. Segment Financial Review: Second Quarter TELECOMMUNICATIONS AND SPACE Revenues for the quarter were $1,618.8 million, an increase of 72.1% over revenues of $940.8 million reported in last year's second quarter. Excluding the $489.7 million pre-tax gain related to the PanAmSat merger, revenues increased 20.0%. This growth was primarily due to continued expansion of the DIRECTV subscriber base in the United States and Latin America, partially offset by lower sales of wireless telecommunications equipment particularly related to the BellSouth Cellular Corp. contract. DIRECTV subscribers at June 1997 month-end totaled 2,639,000 in the United States and 162,000 in Latin America. Operating profit in the second quarter was $40.2 million compared with $57.0 million reported in the same period of 1996. This decline was largely the result of lower wireless telecommunications equipment sales and margins, and start-up operating losses from the Company's Latin American DIRECTV subsidiary, Galaxy Latin America. As a result, second quarter operating profit margin declined to 3.5% compared with 6.0% last year. - 23 - AUTOMOTIVE ELECTRONICS Revenues for the second quarter decreased 6.0% to $1,460.6 million from revenues of $1,553.8 million for the same period in 1996. The decline reflects a 6.9% decrease in GM vehicles produced in the United States and Canada (excluding joint ventures) primarily related to work stoppages at two key GM assembly plants which resulted in an estimated loss of 96,000 units of production. Also contributing to reduced revenues was a 2.2% decline in Delco-supplied electronic content in these vehicles from $896 to $876 per vehicle. Partially offsetting these reductions was a 10.8% increase in international and non-GM sales to $287 million. Operating profit declined to $134.4 million in the quarter from $236.4 million in the comparable 1996 period. The decline was primarily due to lower production volumes, price reductions resulting from competitive pricing in connection with GM's global sourcing initiative, and the impact from continued international expansion. As a result, second quarter operating profit margin declined to 9.2% from 15.3% in 1996. AEROSPACE AND DEFENSE SYSTEMS Second quarter 1997 revenues were $1,637.6 million, an 8.5% increase over revenues of $1,509.8 million reported last year. The growth was principally due to additional revenues resulting from the build-up of several newer programs, particularly information systems and services programs such as Desktop V, Wide Area Augmentation System, and Hughes Air Warfare Center, and the acquisition in March 1997 of the Marine Systems Group of Alliant Techsystems. Operating profit for the period increased to $162.8 million compared with $161.4 million for the second quarter of 1996. The 1997 second quarter operating profit margin was 10.0% compared with 10.7% last year. The reduced operating profit margin was primarily due to provisions taken on certain air traffic control and training contracts offset in part by strong performance on several radar programs. - 24 - CONSOLIDATED STATEMENT OF INCOME AND AVAILABLE SEPARATE CONSOLIDATED NET INCOME (Dollars in Millions Except Per Share Amounts) Six Months Second Quarter Ended June 30, 1997 1996 1997 1996 -------- ------- ------- ------- Revenues Net sales Outside customers $2,931.8 $2,531.2 $5,697.5 $4,970.1 General Motors and affiliates 1,333.8 1,501.4 2,696.3 2,676.1 Other income - net 490.1 18.0 500.0 136.4 Total Revenues 4,755.7 4,050.6 8,893.8 7,782.6 Costs and Expenses Cost of sales and other operating charges, exclusive of items listed below 3,325.0 3,094.6 6,541.8 5,891.1 Selling, general, and administrative expenses 436.0 358.0 876.5 658.3 Depreciation and amortization 165.5 129.6 311.6 261.2 Amortization of GM purchase accounting adjustments related to Hughes Aircraft Company 30.6 30.6 61.2 61.2 Interest expense - net 23.8 1.4 27.7 6.6 Total Costs and Expenses 3,980.9 3,614.2 7,818.8 6,878.4 Income before Income Taxes and Minority Interests 774.8 436.4 1,075.0 904.2 Income taxes 275.1 172.3 385.3 363.7 Minority interests in net losses of subsidiaries 11.1 11.9 25.7 16.6 Net Income 510.8 276.0 715.4 557.1 Adjustments to exclude the effect of GM purchase accounting adjustments related to Hughes Aircraft Company 30.6 30.6 61.2 61.2 Earnings Used for Computation of Available Separate Consolidated Net Income $541.4 $306.6 $776.6 $618.3 Available Separate Consolidated Net Income $136.7 $75.2 $195.8 $151.2 Net Earnings Attributable to General Motors Class H Common Stock on a Per Share Basis $1.35 $0.77 $1.94 $1.55 Certain 1996 amounts have been reclassified to conform with the 1997 presentation. - 25 - CONSOLIDATED BALANCE SHEET (Dollars in Millions) June 30, December 31, ASSETS 1997 1996 - ------ ------ ----------- Current Assets Cash and cash equivalents $1,308.5 $1,161.3 Accounts and notes receivable Trade receivables 1,366.8 1,200.6 General Motors and affiliates 106.2 113.4 Contracts in process 2,264.0 2,186.5 Inventories 1,779.8 1,528.5 Prepaid expenses, including deferred income taxes 704.9 568.1 Total Current Assets 7,530.2 6,758.4 Property - Net 2,940.9 2,886.6 Telecommunications and Other Equipment - Net 2,289.9 1,133.5 Intangible Assets - Net 5,820.1 3,466.0 Investments and Other Assets 2,564.1 2,235.6 Total Assets $21,145.2 $16,480.1 ============ ========== ========== LIABILITIES AND STOCKHOLDER'S EQUITY Current Liabilities Accounts payable Outside $983.9 $896.4 General Motors and affiliates 13.4 27.5 Advances on contracts 711.0 868.9 Notes and loans payable 801.4 248.1 Income taxes payable 216.1 132.9 Accrued liabilities 1,799.6 2,025.8 Total Current Liabilities 4,525.4 4,199.6 Long-Term Debt and Capitalized Leases 2,405.8 34.5 Postretirement Benefits Other Than Pensions 1,680.8 1,658.9 Other Liabilities and Deferred Credits 1,788.1 1,386.4 Minority Interests 644.0 20.8 Redeemable Preferred Stock of Subsidiary 401.5 - Total Stockholder's Equity 9,699.6 9,179.9 - -------------------------- -------- -------- Total Liabilities and Stockholder's Equity $21,145.2 $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). Certain 1996 amounts have been reclassified to conform with the 1997 presentation. - 26 - PRO FORMA SELECTED SEGMENT DATA* (Dollars in Millions) Six Months Second Quarter Ended June 30, 1997 1996 1997 1996 ---- ---- ---- ---- TELECOMMUNICATIONS AND SPACE Revenues Amount $1,618.8 $940.8 $2,628.1 $1,873.6 As a percentage of Hughes Revenues 34.1% 23.2% 29.6% 24.1% Net Sales $1,138.3 $950.3 $2,157.1 $1,771.3 Operating Profit (1) $40.2 $57.0 $47.3 $131.5 Operating Profit Margin (2) 3.5% 6.0% 2.2% 7.4% Depreciation and Amortization (3) $66.9 $41.7 $117.2 $87.9 Capital Expenditures (4) $125.0 $165.3 $219.0 $235.6 AUTOMOTIVE ELECTRONICS Revenues Amount $1,460.6 $1,553.8 $2,907.1 $2,824.5 As a percentage of Hughes Revenues 30.7% 38.4% 32.7% 36.3% Net Sales $1,456.9 $1,540.2 $2,890.8 $2,800.4 Operating Profit (1) $134.4 $236.4 $280.0 $395.7 Operating Profit Margin (2) 9.2% 15.3% 9.7% 14.1% Depreciation and Amortization $55.6 $50.5 $111.8 $99.3 Capital Expenditures $36.5 $52.1 $72.3 $102.4 AEROSPACE AND DEFENSE SYSTEMS Revenues Amount $1,637.6 $1,509.8 $3,284.2 $3,022.2 As a percentage of Hughes Revenues 34.4% 37.3% 36.9% 38.8% Net Sales $1,635.1 $1,512.0 $3,279.9 $3,014.2 Operating Profit (1) $162.8 $161.4 $336.3 $319.3 Operating Profit Margin (2) 10.0% 10.7% 10.3% 10.6% Depreciation and Amortization (3) $39.5 $33.3 $76.5 $66.0 Capital Expenditures $37.7 $26.6 $68.1 $55.1 CORPORATE AND OTHER Operating Profit (Loss) (1) $1.7 $(4.4) $0.3 $(10.9) =========================== ===== ====== ===== ======= Certain 1996 amounts have been reclassified to conform with the 1997 presentation. * 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 in each of the second quarters and $10.6 million in each of the six-month periods for the Telecommunications and Space segment and $25.2 million in each of the second quarters and $50.4 million in each of the six-month periods for the Aerospace and Defense Systems segment. (4)Includes expenditures related to telecommunications and other equipment amounting to $72.0 million, $87.9 million, $129.6 million, and $103.9 million, respectively. - 27 - GENERAL MOTORS ACCEPTANCE CORPORATION NEWS RELEASE DETROIT -- GMAC (General Motors Acceptance Corporation) reported second-quarter 1997 consolidated net income of $338 million, down 3% from $350 million earned in the second quarter of 1996, GMAC President John R. Rines announced today. GMAC's consolidated second quarter results brought net income for the first six months of 1997 to $710 million, up 8% from $659 million earned in the same period last year. In the quarter, net income from financing operations, including the GMAC Mortgage Group, totaled $296 million, compared with $318 million earned in the second quarter of 1996. Earnings were lower from one year ago for GMAC's auto financing operation, primarily due to reduced net financing margins. GMAC's insurance subsidiary, Motors Insurance Corporation (MIC), generated net income of $42 million in the second quarter of 1997, compared with $32 million earned one year ago. MIC's earnings increase was primarily due to favorable claims experience in commercial and extended warranty coverages. * * * - 28 - 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 July 16, 1997 ----------------- By s/Peter R. Bible ------------------------------- (Peter R. Bible, Chief Accounting Officer) - 29 - -----END PRIVACY-ENHANCED MESSAGE-----