-----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, O50CtZbRvq3er/TJfNpypO8wUNyWAPpLonv5QxWBNHD/L1ZVolk1c2w9iDKKhCo/ tEZynMb0yZ0Snb9whJNDcQ== 0000040730-98-000025.txt : 19980420 0000040730-98-000025.hdr.sgml : 19980420 ACCESSION NUMBER: 0000040730-98-000025 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980417 ITEM INFORMATION: FILED AS OF DATE: 19980417 SROS: CSE SROS: NYSE SROS: PHLX SROS: PCX FILER: COMPANY DATA: COMPANY CONFORMED NAME: GENERAL MOTORS CORP CENTRAL INDEX KEY: 0000040730 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLES & PASSENGER CAR BODIES [3711] IRS NUMBER: 380572515 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-00143 FILM NUMBER: 98596505 BUSINESS ADDRESS: STREET 1: 100 RENAISSANCE CTR STREET 2: 3044 W GRAND BLVD CITY: DETROIT STATE: MI ZIP: 48243-7301 BUSINESS PHONE: 3135565000 8-K 1 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 16, 1998 ---------------- 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 17, 1998, 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 for first quarter earnings of Hughes Electronics Corporation (Hughes) dated April 16, 1998 and General Motors Acceptance Corporation (GMAC) dated April 17, 1998, respectively, were as follows: GM NEWS RELEASE GM REPORTS FIRST-QUARTER NET INCOME OF $1.6 BILLION NORTH AMERICAN OPERATIONS' QUARTERLY PERFORMANCE BEST EVER DETROIT -- General Motors Corp. (GM) reported today that net income for the first quarter of 1998 totaled $1.6 billion, or $2.31 per share of GM $1-2/3 par value common stock. That compares with $1.7 billion, or $2.23 per share, for the comparable period in 1997, adjusted to reflect the effect of the Hughes Transactions, which took place in December of 1997. Reported first-quarter-1997 net income totaled $1.8 billion, or $2.30 per share. All earnings-per-share amounts are basic (see Highlights for diluted earnings-per-share amounts). Consolidated net sales and revenues in the first quarter of 1998 totaled $41.6 billion, compared with $40.5 billion in the same period last year, adjusted for the effect of the Hughes Transactions. GM's North American Operations (GM-NAO) reported net income totaling $826 million in the first quarter of 1998 -- the best ever for any quarter, and an improvement of $62 million over the same period last year when net income totaled $764 million, the previous quarterly record. "GM-NAO's continued focus on reducing costs, streamlining processes and delivering exciting new products to customers is more important than ever in this fierce competitive environment," said GM Chairman, Chief Executive Officer and President John F. Smith, Jr. "Our continued aggressive cost-cutting initiatives, and increased sales of higher-profit trucks drove improvements in GM-NAO's financial performance in the first quarter," Smith said. "We're on track to meet our $4 billion corporate cost-reduction goal for 1998, with first-quarter-1998 cost reductions totaling slightly more than $1.2 billion. We must continue to cut costs in order to improve our competitive position because price and incentive pressures are unrelenting." Corporate and sector data in the remainder of this release reflect adjustments to 1997 reported results to acknowledge changes to GM's organizational structure resulting from the conclusion of the Hughes Transactions in December of 1997. Delphi results include Delco Electronics, while the 1997 results from Hughes' defense business has been eliminated. In addition, 1997 data has been adjusted to exclude special items (see Highlights and Special Items). - 2 - Following is a summary of results from the GM business sectors in the first quarter of 1998: - GM North American Operations income totaled $826 million in the first quarter of 1998, compared with $764 million in the first quarter of 1997. - Delphi Automotive Systems (Delphi) reported income of $263 million in the first quarter of 1998, compared with $314 million in the same quarter of 1997. - GM International Operations (GMIO) reported income of $160 million in the first quarter of 1998, compared with $262 million in the prior-year period. Highlights of first-quarter-1998 results reported by GM's major subsidiaries included the following: - General Motors Acceptance Corporation (GMAC) reported income of $349 million for the first quarter of 1998, compared with income of $372 million in the first quarter of 1997. - Hughes Electronics Corporation (Hughes) reported first-quarter-1998 earnings of $54 million, compared with earnings of $24 million in the prior-year period. GM CONSOLIDATED FINANCIAL DATA (with financing & insurance operations on an equity basis) Consolidated income in the first quarter of 1998 totaled $1.6 billion, or $2.31 per share. That compares with $1.7 billion, or $2.23 per share in the first quarter of 1997. The corporation's pretax income totaled $1.9 billion in the first quarter of 1998. Pretax income in the first quarter of 1997 was a comparable $1.9 billion. The corporation's after-tax net-profit margin -- income as a percentage of net sales and revenues -- was 4.4 percent in the first quarter of 1998, compared with 4.7 percent in the first quarter of 1997. Cash and marketable securities totaled $13.6 billion at March 31, 1998, compared with $14.5 billion at Dec. 31,1997, and $14.6 billion at March 31, 1997. In the first quarter of 1998, GM used $1.6 billion to acquire about 24 million shares of GM $1-2/3 par value common stock. These purchases completed a $2.5 billion repurchase program announced in August 1997, and represent approximately 8.0 percent of a $4 billion repurchase program that began in March of 1998. Since January 1997, GM's stock repurchases total approximately $5.3 billion or about 12 percent of the outstanding shares of GM $1-2/3 par value common stock. Following is a summary of financial performance for GM's automotive business sectors (see Highlights for additional information.) - 3 - GM NORTH AMERICAN OPERATIONS (GM-NAO) GM North American Operations' first-quarter-1998 income totaled $826 million. That compares with $764 million in the first quarter of 1997, and represents the best performance for any quarter since GM-NAO was formed. GM-NAO's pretax income totaled $1.2 billion in the first quarter of 1998, compared with $1.1 billion in the prior-year period. GM-NAO's net-profit margin was 3.2 percent in the first quarter of 1998, compared with 3.1 percent in the prior-year period. "An extremely tough pricing environment, along with our lower wholesale-production volumes, combined to make the first quarter pretty challenging," said G. Richard Wagoner, Jr., General Motors executive vice president and president of GM North American Operations. "Fortunately, our NAO team did a real good job in eliminating waste and reducing costs in line with our 1998-calendar-year cost-reduction target of $3 billion. We also benefited from strong sales of our truck and van products." The first-quarter-1998 results were positively affected by significant material-cost improvements -- despite added equipment and design costs -- strong year-over-year gains in manufacturing efficiency, and by the favorable vehicle mix. GM vehicle deliveries in the United States in the first quarter of 1998 totaled 1,094,000 units, which resulted in a 30.2-percent share of the U.S. vehicle market, compared with 1,123,000 units, and a similar 30.2-percent share in the first quarter of 1997. (See additional information in Highlights.) "We were pleased to see the stronger sales of GM cars and trucks in March, following somewhat of a slow start in January and February, which was driven largely by the heavy price competition in the marketplace," Wagoner said. "March was GM's best-ever month for truck sales -- in fact for any manufacturer anytime, anywhere in the world -- and the fifth straight month of sales increases for trucks. Car sales in March show our new mid-size models are providing the growth we had expected." DELPHI AUTOMOTIVE SYSTEMS (DELPHI) Delphi Automotive Systems reported income of $263 million in the first quarter of 1998, compared with $314 million in the first quarter of 1997. Delphi reported pretax income of $376 million in the first quarter of 1998, compared with pretax income of $451 million in the prior-year period. Delphi's net-profit margin was 3.5 percent in the first quarter of 1998, compared with a net-profit margin of 3.9 percent in the prior-year period. Compared with the first quarter of 1997, Delphi's first quarter 1998 results reflect the impact of the Latin American and Asia-Pacific economic downturn, along with a year-to-year decrease in production volume by GM's North American Operations. These adverse factors were partially offset by material-cost reductions, and improved manufacturing efficiencies. "While the Asian and Latin American environments are challenging today, we believe these markets offer long-term potential," said J.T. Battenberg III, General Motors executive vice president and president of Delphi Automotive Systems. "Delphi is continuing to integrate the expertise of Delphi Delco Electronics Systems into our products and processes, taking aggressive steps to position ourselves as the global leader in electronically-enhanced, integrated automotive systems. The integration will also improve structural costs and keep future component costs competitive, enabling Delphi to further grow our sales." - 4 - Delphi's first-quarter-1998 sales to customers outside the GM-NAO vehicle groups represented approximately 34 percent of total sales including all joint ventures, an increase of about 2 percentage points compared with the same quarter in 1997. GM INTERNATIONAL OPERATIONS (GMIO) GM International Operations reported income of $160 million for the first quarter of 1998, compared with income of $262 million in the same period of 1997. GMIO reported pretax income of $213 million in the first quarter of 1998, compared with pretax income of $385 million in the first quarter of 1997. The net-profit margin for GMIO was 2.0 percent in the first quarter of 1998, compared with 3.2 percent in the prior-year period. "First-quarter earnings reflect the intensely competitive environment across all of our operations, and costs associated with the successful start-up for the new Astra," said Louis R. Hughes, General Motors executive vice president and president of GM International Operations. Income from GM's automotive operations in Europe totaled $99 million in the first quarter of 1998, compared with income of $94 million in the first quarter last year. "We're very excited about our new Astra. It has received favorable reviews from international automotive journalists and is also being well received by our dealers and customers," Hughes said. "So far, the Astra has been launched initially in 15 markets, but it has already logged more than 130,000 orders, the largest order intake at such an early stage for any new car in Opel/Vauxhall history. The car is currently being produced in three European plants with plans to begin production at a fourth plant later this year." For the remainder of GM International Operations, which includes the Latin American and Asia and Pacific Operations, income totaled $61 million in the first quarter of 1998, compared with $168 million in the prior-year period. "As expected, our operations in Brazil and the Far East have been hurt by the adverse economic conditions in both regions," Hughes said. SPECIAL ITEMS While the 1998-first-quarter results had no significant special items, the 1997-first-quarter results were affected by two special items: - 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 (VW) settling a civil lawsuit which GM brought against VW. - An after-tax charge of $50 million, or $0.07 per share of GM $1-2/3 par value common stock, related to the announcement that Delphi Interior and Lighting Systems would cease production at its Trenton, N.J., facility. # # # HIGHLIGHTS ATTACHED - 5 - HIGHLIGHTS - Q1 Financial Results (Dollars in Millions Except Per Share Amounts) Three Months Ended March 31, -------------------------------- Adjusted 1998 1997 1997 ---------------------------- --------- ---------- -------- Net sales and revenues Manufactured products $36,560 $37,440 $35,823 Financial services 3,161 3,197 3,197 Other income 1,850 1,604 1,511 -------- -------- --------- Total net sales and revenues $41,571 $42,241 $40,531 -------- -------- --------- Total net sales and revenues(1) $36,427 $37,457 $35,840 Gross profit margin percentage(1) 16.8% 17.0% 17.1% ............................................................... Income before income taxes and minority interests (1) $1,888 $2,110 $1,938 Effective income tax rate (1) 34.0% 34.6% 34.3% ............................................................... Consolidated net income $1,604 $1,796 $1,689 Net profit margin(1) 4.4% 4.8% 4.7% ............................................................... Earnings Attributable to Common Stocks $1-2/3 par value $1,574 $1,717 Class H (2) $- $59 Class H (3) $14 $- ............................................................... Basic Earnings Per Share Attributable to Common Stocks $1-2/3 par value $2.31 $2.30 $2.23 Class H (2) $- $0.59 Class H (3) $0.13 $- $0.06 ............................................................... Diluted Earnings Per Share Attributable to Common Stocks $1-2/3 par value $2.27 $2.28 $2.21 Class H (2) $- $0.59 Class H (3) $0.13 $- $0.06 ............................................................... Cash Dividends Per Share of Common Stocks $1-2/3 par value $0.50 $0.50 Class H (2) $- $0.25 Class H (3) $- $- ............................................................... Book Value Per Share of Common Stocks March 31, Dec. 31, March 31, 1998 1997 1997 -------- ------- -------- $1-2/3 par value $22.00 $22.26 $28.10 Class H $13.20 $13.36 $14.05 ................................................................ See footnotes beginning on page 13. continues - 6 - HIGHLIGHTS - Q1 Adjusted for Hughes Transactions and Special Items - with Financing and Insurance Operations on an Equity Basis (Dollars in Millions Except Per Share Amounts) Three Months Ended March 31, ---------------------- Adjusted 1998 1997 --------- ---------- Net sales and revenues $36,427 $35,840 ------ ------ Costs and expenses: Cost of sales 30,323 29,719 Selling, general, and admin. expenses 2,860 2,818 Depreciation and amort. expenses 1,683 1,818 ------ ------ Total costs and expenses 34,866 34,355 ------ ------ Operating income 1,561 1,485 Other income less income deductions 582 646 Interest expense 255 193 ------ ------ Income before income taxes and minority interests 1,888 1,938 Income tax expense 641 665 ------ ------ Income after income taxes 1,247 1,273 Minority interests (4) 19 Earnings of nonconsolidated affiliates 361 397 ------ ------ Net income $1,604 $1,689 ====== ====== $1-2/3 par value EPS from continuing operations Basic $2.31 $2.23 Diluted $2.27 $2.21 Gross profit margin 16.8% 17.1% Effective income tax rate 34.0% 34.3% Net profit margin 4.4% 4.7% See footnotes beginning on page 13. continues - 7 - HIGHLIGHTS - Q1 Adjusted for Hughes Transactions and Special Items - with Financing and Insurance Operations on an Equity Basis (Dollars in Millions Except Per Share Amounts) Three Months Ended March 31, 1997 ------------------------------------ Hughes Special Trans- Items Reported actions (4)(5) Adjusted -------- ------- ------- -------- Net sales and revenues $37,457 $1,617 $ - $35,840 ------ ------ ------ ------ Costs and expenses: Cost of sales 31,104 1,305 80 29,719 Selling, general, and admin.expenses 2,884 66 - 2,818 Depreciation and amort. expenses 1,879 61 - 1,818 ------ ------ ------ ------ Total costs and expenses 35,867 1,432 80 34,355 ------ ------ ------ ------ Operating income (loss) 1,590 185 (80) 1,485 Other income less income deductions 739 5 88 646 Interest expense 219 26 - 193 ------ ------ ------ ------ Income before income taxes and minority interests 2,110 164 8 1,938 Income tax expense 730 62 3 665 ------ ------ ------ ------ Income after income taxes 1,380 102 5 1,273 Minority interests 19 - - 19 Earnings of noncons. affiliates 397 - - 397 ------ ------ ------ ------ Net income $1,796 $102 $5 $1,689 ====== ====== ====== ====== $1-2/3 par value EPS from continuing operations Basic $2.30 $2.23 Diluted $2.28 $2.21 Gross profit margin 17.0% 17.1% Effective income tax rate 34.6% 34.3% Net profit margin 4.8% 4.7% See footnotes beginning on page 13. continues - 8 - HIGHLIGHTS - Q1 Adjusted for Hughes Transactions and Special Items By Sector (Dollars in Millions) Three Months Ended March 31, ---------------------- Adjusted 1998 1997 --------- ---------- GM-NAO $826 $764 Delphi 263 314 GMIO(6) 160 262 Hughes 54 24 GMAC 349 372 Other(7) (48) (47) ----- ----- Consolidated income $1,604 $1,689 ===== ===== Three Months Ended March 31, 1997 ----------------------------------- Hughes Trans- Special Reported actions Items Adjusted -------- ------- ------- -------- GM-NAO $764 $- $- $764 Delphi 180 84 50 (4) 314 GMIO(6) 317 - (55)(5) 262 Hughes 235 (211) - 24 GMAC 372 - - 372 Other(7) (72) 25 - (47) --- --- -- --- Consolidated income $1,796 $(102) $(5) $1,689 ===== === == ===== See footnotes beginning on page 13. continues - 9 - HIGHLIGHTS - Q1 Automotive Sectors (Dollars in Millions) Three Months Ended March 31, 1998 ------------------------------ GM-NAO Delphi GMIO ------ ------ ------- Reported Net sales and revenues $25,889 $7,623 $8,150 ------ ----- ----- Pre-tax income 1,202 376 213 Income tax expense 379 120 72 Equity income and minority interests 3 7 19 ------ ----- ----- Net income $826 $263 $160 ====== ===== ===== Net profit margin 3.2% 3.5% 2.0% Effective income tax rate 31.5% 31.9% 33.8% See footnotes beginning on page 13. continues - 10 - HIGHLIGHTS - Q1 Automotive Sectors Adjusted for Hughes Transactions and Special Items (Dollars in Millions) Three Months Ended March 31, 1997 ------------------------------- GM-NAO Delphi GMIO ------- ------- ------- Reported -------- Net sales and revenues $24,859 $6,664 $8,283 ------ ------ ------ Pre-tax income 1,127 237 473 Income tax expense 378 72 164 Equity income and minority interests 15 15 8 ------ ------ ------ Net income $764 $180 $317 ====== ====== ====== Net profit margin 3.1% 2.7% 3.8% Effective income tax rate 33.5% 30.4% 34.7% Hughes Transactions ------------------- Net sales and revenues $- $1,331 $- ------ ------ ------ Pre-tax income - 134 - Income tax expense - 51 - Equity income and minority interests - 1 - ------ ------ ------ Net income $- $84 $- ====== ====== ====== Special Items ------------- Net sales and revenues $- $- $- ------ ------ ------ Pre-tax income (loss) - 80 (88) Income tax expense (credit) - 30 (33) Equity income and minority interests - - - ------ ------ ------ Net income (loss) $- $50 $(55) ====== ====== ====== Adjusted -------- Net sales and revenues $24,859 $7,995 $8,283 ------ ------ ------ Pre-tax income 1,127 451 385 Income tax expense 378 153 131 Equity income and minority interests 15 16 8 ------ ------ ------ Net income $764 $314 $262 ====== ====== ====== Net profit margin 3.1% 3.9% 3.2% Effective income tax rate 33.5% 33.9% 34.0% See footnotes beginning on page 13. continues - 11 - HIGHLIGHTS - Q1 Operating Information Three Months Ended March 31, ---------------------- 1998 1997 --------- ---------- Worldwide Wholesale Sales (Units in 000s) United States: Cars 574 698 Trucks 592 554 ------- ------- Total United States 1,166 1,252 Canada and Mexico 171 150 ------- ------- Total North America 1,337 1,402 International 722 783 ------- ------- Total Worldwide 2,059 2,185 ======= ======= .................................................... Vehicle Unit Deliveries (Units in 000s) United States Chevrolet - Cars 208 251 - Trucks 378 358 Pontiac 123 145 GMC 117 109 Buick 96 87 Oldsmobile 72 65 Saturn 51 60 Cadillac 43 42 Other 6 6 ----- ----- Total United States 1,094 1,123 Canada and Mexico 129 121 ------ ------ Total North America 1,223 1,244 ------ ------ International Europe 492 465 Latin America, Africa, and the Middle East 186 169 Asia and Pacific 119 181 ------ ------ Total International 797 815 ------ ------ Total Worldwide 2,020 2,059 ====== ====== .................................................... Market Share United States Cars 30.5% 31.5% Trucks 29.9% 28.6% Total 30.2% 30.2% Western Europe 10.8% 11.4% Latin America 21.7% 18.9% Asia and Pacific 4.0% 4.7% Total Worldwide 15.5% 15.4% .................................................... U.S. Retail/Fleet Mix % Fleet Sales - Cars 26.1% 26.5% % Fleet Sales - Trucks 16.2% 13.6% Total Vehicles 21.3% 20.9% .................................................... Days Supply of Inventory -- U.S. Gross Landed Stock Cars 83 81 Trucks 94 91 .................................................... Capacity Utilization % U.S. and Canada (2-shift rated) 89.0% 95.3% .................................................... Retail Incentives($ per unit) GM-NAO $1,305 $860 .................................................... See footnotes beginning on page 13. continues - 12 - HIGHLIGHTS - Q1 Operating Information (Dollars in Millions Except Per Share Amounts) Three Months Ended March 31, ---------------------- 1998 1997 --------- ---------- Depreciation and amortization (1) Depreciation $1,043 $1,051 Amortization of special tools 613 787 Amortization of intangible assets 27 41 ----- ----- $1,683 $1,879 ===== ===== .................................................... Worldwide Employment at March 31 (in 000s) GM-NAO 233 242 Delphi 206 178 GMIO 116 112 GMAC 22 18 Hughes 15 88 Other 10 10 --- --- Total 602 648 --- --- .................................................... Worldwide Payrolls $7,025 $7,732 .................................................... (1) Calculated with financing and insurance operations on an equity basis. (2) Data relates to a period prior to the date on which GM recapitalized the Class H common stock ("GM's Recapitalization Date"). (3) Data relates to a period which is subsequent to GM's Recapitalization Date. (4) The first-quarter 1997 results included a pre-tax gain of $88 million,($55 million after taxes, or $0.07 basic per share of $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. (5) The first-quarter 1997 results were negatively impacted by a pre-tax plant closing charge of $80 million,($50 million after taxes, or $0.07 basic per share of $1-2/3 par value common stock), related to the announcement that Delphi Interior and Lighting Systems would cease production at its Trenton, N.J., plant during the 1998 calendar year. (6) GMIO Includes: Three Months Ended March 31, ------------------ 1998 1997 ---- ---- GM Europe $99 $94 Other GMIO $61 $168 (7) 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. - 13 - GENERAL MOTORS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Months Ended March 31, 1998 1997 (Dollars in Millions Except Per Share Amounts) Net sales and revenues Manufactured products $36,560 $37,440 Financial services 3,161 3,197 Other income 1,850 1,604 ------- ------- Total net sales and revenues 41,571 42,241 ------ ------ Costs and expenses Cost of sales and other operating charges, exclusive of items listed below 30,357 31,110 Selling, general and administrative expenses 3,742 3,591 Depreciation and amortization expenses 2,907 3,065 Interest expense 1,630 1,461 Other deductions 513 248 ------- ------- Total costs and expenses 39,149 39,475 ------ ------ Income before income taxes and minority interests 2,422 2,766 Income taxes 808 989 Minority interests (10) 19 ------ ------ Net income 1,604 1,796 Dividends on preference stocks 16 20 ------ ------ Earnings on common stocks $1,588 $1,776 ===== ===== Basic earnings per share attributable to common stocks Earnings per share attributable to $1-2/3 par value $2.31 $2.30 Earnings per share attributable to Class H (prior to its recapitalization on December 17, 1997) $- $0.59 Earnings per share attributable to Class H (subsequent to its recapitalization on December 17, 1997) $0.13 $- Diluted earnings per share attributable to common stocks Earnings per share attributable to $1-2/3 par value $2.27 $2.28 Earnings per share attributable to Class H (prior to its recapitalization on December 17, 1997) $- $0.59 Earnings per share attributable to Class H (subsequent to its recapitalization on December 17, 1997) $0.13 $- - 14 - GENERAL MOTORS CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS March 31, March 31, 1998 Dec. 31, 1997 (Unaudited) 1997 (Unaudited) (Dollars in Millions) ASSETS Cash and cash equivalents $11,498 $11,262 $10,061 Other marketable securities 10,216 11,722 10,387 ------ ------ ------ Total cash and marketable securities 21,714 22,984 20,448 Finance receivables - net 63,288 58,870 62,202 Accounts and notes receivable (less allowances) 9,553 7,493 6,976 Inventories (less allowances) 12,923 12,102 12,851 Deferred income taxes 22,493 22,478 20,138 Equipment on operating leases (less accumulated depreciation) 33,772 33,302 30,127 Property - net 35,240 34,567 37,004 Intangible assets - net 11,457 11,469 12,737 Other assets - net 25,593 25,623 23,576 -------- -------- -------- Total assets $236,033 $228,888 $226,059 ======= ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities Accounts payable (principally trade) $16,426 $15,782 $14,014 Notes and loans payable 98,262 93,027 88,111 Deferred income taxes 3,131 2,923 3,686 Postretirement benefits other than pensions 41,532 41,168 43,607 Pensions 7,324 7,043 7,814 Accrued expenses and other liabilities 51,606 50,490 45,918 -------- -------- -------- Total liabilities 218,281 210,433 203,150 ------- ------- ------- Minority interests 740 727 104 General Motors - obligated mandatorily redeemable preferred securities of subsidiary trusts holding solely junior subordinated debentures of General Motors Series D 79 79 - Series G 143 143 - Stockholders' equity Preference stocks Common stocks 1 1 1 $1-2/3 par value (issued, 669,314,625; 693,456,394; and 729,805,298 shares) 1,116 1,156 1,216 Class H (issued, 101,108,669 shares) - - 10 Class H (issued, 104,769,861, and 103,885,803 shares) 10 10 - Capital surplus (principally additional paid-in capital) 13,786 15,369 17,689 Retained earnings 6,664 5,416 7,511 ------- ------- ------- Subtotal 21,577 21,952 26,427 Minimum pension liability adjustment (4,062) (4,062) (3,490) Accumulated foreign currency translation adjustments (1,264) (888) (475) Net unrealized gains on securities 539 504 343 ------ ------ ------ Total stockholders' equity 16,790 17,506 22,805 ------ ------ ------ Total liabilities and stockholders' equity $236,033 $228,888 $226,059 ======= ======= ======= - 15 - GENERAL MOTORS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Three Months Ended March 31, 1998 1997 (Dollars in Millions) Net cash provided by operating activities $5,973 $4,097 ----- ----- Cash flows from investing activities Expenditures for property (2,327) (1,807) Investments in other marketable securities - acquisitions (5,758) (11,603) Investments in other marketable securities - liquidations 7,300 10,107 Finance receivables - acquisitions (41,800) (37,475) Finance receivables - liquidations 32,544 26,848 Proceeds from sales of finance receivables 5,143 5,538 Operating leases - acquisitions (5,127) (5,527) Operating leases - liquidations 3,493 4,124 Other (905) 512 ------ ------ Net cash used in investing activities (7,437) (9,283) ----- ----- Cash flows from financing activities Net increase in loans payable 1,526 2,484 Increase in long-term debt 6,428 4,207 Decrease in long-term debt (4,127) (3,329) Proceeds from issuing common stocks 233 206 Repurchases of common stocks (1,911) (1,761) Cash dividends paid to stockholders (357) (422) ------ ------ Net cash provided by financing activities 1,792 1,385 ----- ----- Effect of exchange rate changes on cash and cash equivalents (92) (201) ---- ------ Net increase (decrease) in cash and cash equivalents 236 (4,002) Cash and cash equivalents at beginning of the period 11,262 14,063 ------ ------ Cash and cash equivalents at end of the period $11,498 $10,061 ====== ====== - 16 - GENERAL MOTORS CORPORATION AND SUBSIDIARIES To facilitate analysis, the following financial statements GM's financial statements with its financing and insurance operations (primarily GMAC) reflected on an equity basis. Consolidated Statements of Income With Financing and Insurance Operations on an Equity Basis (Unaudited) Three Months Ended March 31, 1998 1997 (Dollars in Millions) Net sales and revenues $36,427 $37,457 ------ ------ Costs and expenses Cost of sales and other operating charges, exclusive of items listed below 30,323 31,104 Selling, general, and administrative expenses 2,860 2,884 Depreciation and amortization expenses 1,683 1,879 ------ ------ Total costs and expenses 34,866 35,867 ------ ------ Operating income 1,561 1,590 Other income less income deductions 582 739 Interest expense 255 219 ------ ----- Income before income taxes, minority interests, and earnings of nonconsolidated affiliates 1,888 2,110 Income taxes 641 730 ------ ------ Income before minority interests and earnings of nonconsolidated affiliates 1,247 1,380 Minority interests (4) 19 Earnings of nonconsolidated affiliates 361 397 ------ ------ Net income $1,604 $1,796 ===== ===== Net profit margin (1) 4.4% 4.8% (1) Net profit margin represents net income as a percentage of net sales and revenues. - 17 - GENERAL MOTORS CORPORATION AND SUBSIDIARIES Consolidated Balance Sheets With Financing and Insurance Operations on an Equity Basis (Unaudited) March 31, Dec. 31, March 31, 1998 1997 1997 (Dollars in Millions) ASSETS Cash and cash equivalents $11,015 $10,685 $9,395 Other marketable securities 2,557 3,826 5,233 ------- ------- ------- Total cash and marketable securities 13,572 14,511 14,628 Accounts and notes receivable (less allowances) Trade 5,047 5,164 5,507 Nonconsolidated affiliates 2,096 836 1,844 Inventories (less allowances) 11,895 12,102 12,851 Equipment on operating leases (less accumulated depreciation) 4,554 4,677 4,187 Deferred income taxes and other 6,362 6,278 5,771 ------- ------- ------- Total current assets 43,526 43,568 44,788 Equity in net assets of nonconsolidated affiliates 10,665 10,164 9,696 Deferred income taxes 20,678 20,721 20,354 Other investments and miscellaneous assets 13,843 13,564 11,967 Property - net 34,598 33,914 36,634 Intangible assets - net 10,740 10,752 12,573 -------- -------- -------- Total assets $134,050 $132,683 $136,012 ======= ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable $12,499 $12,474 $11,379 Loans payable 1,219 656 1,306 Accrued expenses and customer deposits 32,591 33,459 30,168 ------ ------ ------ Total current liabilities 46,309 46,589 42,853 Long-term debt 5,788 5,491 5,316 Capitalized leases 183 185 191 Postretirement benefits other than pensions 38,724 38,388 40,988 Pensions 5,165 4,271 6,183 Other liabilities and deferred income taxes 20,171 19,336 17,572 -------- -------- -------- Total liabilities 116,340 114,260 113,103 ------- ------- ------- Minority interests 698 695 104 General Motors - obligated mandatorily redeemable preferred securities of subsidiary trusts holding solely junior subordinated debentures of General Motors Series D 79 79 - Series G 143 143 - Stockholders' equity 16,790 17,506 22,805 -------- -------- -------- Total liabilities and stockholders' equity $134,050 $132,683 $136,012 ======= ======= ======= - 18 - Condensed Consolidated Statements of Cash Flows With Financing and Insurance Operations on an Equity Basis (Unaudited) Three Months Ended March 31, 1998 1997 (Dollars in Millions) Net cash provided by operating activities $2,896 $1,808 ----- ----- Cash flows from investing activities Expenditures for property (2,267) (1,724) Investments in other marketable securities - acquisitions (2,220) (6,199) Investments in other marketable securities - liquidations 3,490 4,608 Operating leases - acquisitions (1,413) (1,352) Operating leases - liquidations 1,385 1,001 Other (272) (104) ------ ------ Net cash used in investing activities (1,297) (3,770) ----- ----- Cash flows from financing activities Net increase in loans payable 564 93 Increase in long-term debt 915 154 Decrease in long-term debt (619) (30) Proceeds from issuing common stocks 233 206 Repurchases of common stocks (1,911) (1,761) Cash dividends paid to stockholders (357) (422) ------ ------ Net cash used in financing activities (1,175) (1,760) ------ ----- Effect of exchange rate changes on cash and cash equivalents (94) (203) --- ----- Net increase (decrease) in cash and cash equivalents 330 (3,925) Cash and cash equivalents at beginning of the period 10,685 13,320 ------ ------ Cash and cash equivalents at end of the period $11,015 $9,395 ====== ===== - 19 - Hughes Electronics Corporation Earnings Release Los Angeles, April 16, 1998 - Hughes Electronics Corporation (Hughes) today reported that first quarter 1998 revenues increased 26.1% to $1,291.0 million compared with $1,024.0 million in the first quarter of 1997. First quarter earnings(1) more than doubled to $53.7 million from $23.9 million in the first quarter of 1997. Earnings per share on the same basis for the first quarter were $0.13 per share versus pro forma earnings per share(2) of $0.06 in 1997. Operating profit(1) also rose sharply in the quarter to $83.6 million compared with $33.1 million in the first quarter of 1997. First quarter operating profit margin on the same basis increased to 6.5% in 1998 from 3.2% in 1997. "This is an impressive report card for Hughes' first full quarter of operations as a satellite and wireless communications company. It demonstrates continued growth in each of our four principal business segments," said Michael T. Smith, Hughes chairman and chief executive officer. "The increases in revenues, operating profit and earnings were driven by another record quarter of DIRECTV(R) subscriber growth, continued strong performance in our satellite services segment resulting from the PanAmSat merger, and higher commercial satellite sales." SEGMENT FINANCIAL REVIEW: FIRST QUARTER 1998 Direct-To-Home Broadcast For the quarter, revenues increased 64.6% to $387.9 million from $235.6 million in the first quarter of 1997. The increase resulted from continued record subscriber growth, strong average monthly revenue per subscriber, and low subscriber churn rates. Domestic DIRECTV propelled this growth with quarterly revenues of $353 million, a 55% increase over last year's first quarter revenues of $228 million. With its best-ever first quarter of 227,000 net new subscribers, total DIRECTV subscribers grew to 3,528,000 in the United States as of March 31, 1998. The Company's Latin American DIRECTV subsidiary, Galaxy Latin America (GLA), had first quarter revenues of $31 million compared with $8 million in 1997. With the addition of 38,000 net new subscribers in the first quarter, cumulative DIRECTV subscribers in Latin America were 338,000 as of March 31, 1998. The operating loss in the quarter was $31.6 million compared with an operating loss of $67.5 million in the first quarter of 1997. The lower operating loss in 1998 was principally due to increased subscriber revenues that more than offset higher sales and marketing expenditures. The first quarter 1998 operating loss in the domestic DIRECTV business was $10 million compared with $38 million last year, and GLA's first quarter operating loss was $22 million compared with $30 million last year. Satellite Services First quarter 1998 revenues were up 51.3% to $193.0 million compared with $127.6 million in the prior year. Operating profit in the quarter rose 25.5% to $85.7 million from $68.3 million in 1997. The revenue and operating profit growth were primarily due to the May 1997 PanAmSat merger and increased operating lease revenues for both video distribution and business communications services. Operating profit margin in the period declined to 44.4% from 53.6% in the same period last year primarily from goodwill amortization associated with the PanAmSat merger. - 20 - Satellite Manufacturing For the first quarter of 1998, revenues increased 11.6% to $624.3 million from revenues of $559.3 million for the same period in 1997. Operating profit in the quarter increased 4.4% to $55.1 million from $52.8 million in the prior year. The increases in revenue and operating profit were principally due to higher commercial satellite sales to customers such as ICO Global Communications, Thuraya Satellite Telecommunications Company and PanAmSat Corporation. Operating profit margin in the quarter declined to 8.8% from 9.4% last year primarily due to increased costs related to the completion of certain satellite component contracts. Network Systems First quarter revenues for Hughes Network Systems (HNS) were $184.7 million compared with $182.5 million in the same period last year. Increased sales of private business networks and satellite-based mobile telephony equipment were mostly offset by lower sales of international wireless local loop telephone systems. The operating loss in the quarter was $11.9 million compared with an operating loss of $15.3 million in the first quarter of 1997. The lower operating loss in the first quarter of 1998 was primarily due to higher revenues and profits on satellite-based mobile telephony equipment. BALANCE SHEET The cash balance of $2,499.5 million at March 31, 1998 reflected a $284.3 million decline during the quarter primarily due to expenditures for PanAmSat satellites and general working capital requirements. During the first quarter of 1998, long-term debt increased $150.0 million to $787.6 million reflecting an increase in PanAmSat's long-term debt. In January 1998, PanAmSat issued $750.0 million of privately-placed debt securities with maturities between five and 30 years at interest rates ranging between 6% and 7%. The net proceeds were used to repay $600.0 million of existing bank loans, exercise an early buy-out option on a satellite sale-leaseback agreement, and for general corporate purposes. - --------------------- (1) Excludes the effects of purchase accounting adjustments related to General Motors' (GM) acquisition of Hughes Aircraft Company in 1985. (2) 1997 earnings per share are presented on a pro forma basis. Historically, such earnings per share amounts were calculated based on the financial performance of former Hughes, which consisted of the defense electronics, automotive electronics, and telecommunications and space businesses. Since these financial statements relate only to the telecommunications and space businesses of former Hughes, the pro forma presentation is used to present the earnings per share that would have been achieved relative to the GM Class H common stock had it been calculated based upon only such telecommunications and space businesses. - 21 - STATEMENT OF INCOME AND AVAILABLE SEPARATE CONSOLIDATED NET INCOME (Dollars in Millions Except Per Share Amounts) Three Months Ended March 31, 1998 1997 Revenues Product sales $692.1 $683.2 Direct broadcast, leasing and other services 598.9 340.8 - ---------------------------------------------------------------------------- Total Revenues 1,291.0 1,024.0 - ---------------------------------------------------------------------------- Operating Costs and Expenses Cost of products sold 542.3 468.9 Broadcast programming and other costs 264.8 249.7 Selling, general, and administrative expenses 302.6 222.0 Depreciation and amortization 97.7 50.3 Amortization of GM purchase accounting adjustments (1) 5.3 5.3 - ---------------------------------------------------------------------------- Total Operating Costs and Expenses 1,212.7 996.2 - ---------------------------------------------------------------------------- Operating Profit 78.3 27.8 Interest income 37.5 2.0 Interest expense (3.0) (15.1) Other, net (34.3) (9.1) - ----------------------------------------------------------------------------- Income from Continuing Operations Before Income Taxes and Minority Interests 78.5 5.6 Income taxes 31.4 2.2 Minority interests in net losses of subsidiaries 1.3 14.2 - ---------------------------------------------------------------------------- Income from continuing operations 48.4 17.6 Income from discontinued operations, net of taxes - 1.0 - ---------------------------------------------------------------------------- Net Income $48.4 $18.6 Adjustments to exclude the effect of GM purchase accounting adjustments (1) 5.3 5.3 - ---------------------------------------------------------------------------- Net Earnings Used for Computation of Available Separate Consolidated Net Income (2) $53.7 $23.9 ============================================================================ Available Separate Consolidated Net Income (2) $14.0 $6.0 ============================================================================ Net Earnings Attributable to General Motors Class H Common Stock on a Per Share Basis (2) $0.13 $0.06 ============================================================================ (1)Relates to General Motors' purchase of Hughes Aircraft Company in 1985. (2)1997 amounts are presented on a pro forma basis. Historically, such amounts were calculated based on the financial performance of former Hughes, which consisted of the defense electronics, automotive electronics and telecommunications and space businesses. Since these financial statements relate only to the telecommunications and space businesses of former Hughes, the pro forma presentation is used to present the results that would have been achieved relative to the GM Class H common stock had the results been calculated based only upon such telecommunications and space businesses. - 22 - PRO FORMA SELECTED SEGMENT DATA* (Dollars in Millions) Three Months Ended March 31, 1998 1997 DIRECT-TO-HOME BROADCAST Total Revenues $387.9 $235.6 Operating Loss $(31.6) $(67.5) Depreciation and Amortization $22.5 $18.3 Capital Expenditures $13.7 $11.4 - -------------------------------------------------------------------------- SATELLITE SERVICES Total Revenues $193.0 $127.6 Operating Profit $85.7 $68.3 Operating Profit Margin 44.4% 53.6% Depreciation and Amortization $54.5 $13.8 Capital Expenditures (1) $249.6 $334.6 - -------------------------------------------------------------------------- SATELLITE MANUFACTURING Total Revenues $624.3 $559.3 Operating Profit $55.1 $52.8 Operating Profit Margin 8.8% 9.4% Depreciation and Amortization $10.7 $8.7 Capital Expenditures $10.7 $15.6 - -------------------------------------------------------------------------- NETWORK SYSTEMS Total Revenues $184.7 $182.5 Operating Loss $(11.9) $(15.3) Depreciation and Amortization $8.5 $7.2 Capital Expenditures $4.8 $6.9 - -------------------------------------------------------------------------- ELIMINATIONS and OTHER Total Revenues $(98.9) $(81.0) Operating Loss $(13.7) $(5.2) Depreciation and Amortization $1.5 $2.3 Capital Expenditures $125.9 $(274.5) =========================================================================== * The 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' Restated 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 exclude the purchase accounting adjustments related to GM's acquisition of Hughes Aircraft Company, are presented. (1)Includes expenditures related to satellites amounting to $145.6 million in 1998 and $332.1 million in 1997. Also included in 1998 is $96.6 million related to the early buy-out of a satellite sale-leaseback. - 23 - BALANCE SHEET (Dollars in Millions) March 31, December 31, ASSETS 1998 1997 - ---------------------------------------------------------------------------- Current Assets Cash and cash equivalents $2,499.5 $2,783.8 Accounts and notes receivable 740.9 662.8 Contracts in process 623.1 575.6 Inventories 511.6 486.4 Prepaid expenses, deferred income taxes and other 326.2 297.3 - ---------------------------------------------------------------------------- Total Current Assets 4,701.3 4,805.9 Satellites - Net 2,921.3 2,643.4 Property - Net 885.0 889.7 Net Investment in Sales-type Leases 302.4 337.6 Intangible Assets - Net 2,932.9 2,954.8 Investments and Other Assets 1,160.7 1,132.4 - ---------------------------------------------------------------------------- Total Assets $12,903.6 $12,763.8 ============================================================================ LIABILITIES AND STOCKHOLDER'S EQUITY Current Liabilities Accounts payable $510.4 $472.8 Advances on contracts 222.8 209.8 Deferred revenues 112.9 110.6 Accrued liabilities 597.4 689.4 - ---------------------------------------------------------------------------- Total Current Liabilities 1,443.5 1,482.6 Long-Term Debt and Capitalized Leases 787.6 637.6 Deferred Gains on Sales and Leasebacks 161.2 191.9 Accrued Operating Leaseback Expense 54.5 100.2 Postretirement Benefits Other Than Pensions 155.2 154.8 Other Liabilities and Deferred Credits 722.3 706.4 Deferred Income Taxes 612.2 570.8 Minority Interests 605.1 607.8 Stockholder's Equity 8,362.0 8,311.7 - ---------------------------------------------------------------------------- Total Liabilities and Stockholder's Equity $12,903.6 $12,763.8 ============================================================================ 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). - 24 - GMAC ANNOUNCES 1998 FIRST QUARTER EARNINGS DETROIT -- General Motors Acceptance Corporation (GMAC) reported first quarter 1998 consolidated net income of $349 million, down 6% from $372 million earned in the first quarter of 1997, GMAC President John D. Finnegan announced today. For the quarter, net income from automotive financing operations totaled $246 million, down 4% from $257 million earned in the first quarter of 1997. Earnings were lower due to reduced net financing margins partially offset by reduced credit losses and operating expenses and a lower effective income tax rate. GMAC Insurance Holdings, Inc. generated net income of $80 million in the first quarter of 1998, up 3% from $78 million earned last year. The increase reflects improved underwriting results from existing lines of business and the inclusion of Integon Corporation, partially offset by lower capital gains. GMAC Mortgage Group, Inc. generated net income of $23 million in the first quarter of 1998, down 38% from $37 million earned last year. Mortgage Group earnings were lower due to the effect of accelerated prepayment experience on first and second mortgages, resulting from lower interest rates. * * * 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 17, 1998 ----------------- By s/Peter R. Bible ------------------------------- (Peter R. Bible, Chief Accounting Officer) - 25 - -----END PRIVACY-ENHANCED MESSAGE-----