-----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, EsinVoGboxvq3ot4BxGe6fEA2UB68FzYqo8R9UECY9lhn4/UxTUxZVm+Kofp3B5t fW6KOpanVAGHxuuRUAGVfA== 0000040730-99-000004.txt : 19990121 0000040730-99-000004.hdr.sgml : 19990121 ACCESSION NUMBER: 0000040730-99-000004 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990120 ITEM INFORMATION: FILED AS OF DATE: 19990120 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: 99508641 BUSINESS ADDRESS: STREET 1: 100 RENAISSANCE CTR CITY: DETROIT STATE: MI ZIP: 48265-1000 BUSINESS PHONE: 3135565000 MAIL ADDRESS: STREET 1: 3044 W GRAND BOULEVARD CITY: DETROIT STATE: MI ZIP: 48202-3091 8-K 1 4TH QUARTER PRESS RELEASE 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) January 20, 1999 ---------------- 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 48265-1000 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 January 20, 1999, a news release was issued on the subject of fourth quarter consolidated earnings for General Motors Corporation (GM). The news release did not include certain financial statements, related footnotes and certain other financial information that will be filed with the Securities and Exchange Commission as part of GM's Annual Report on Form 10-K. Following are the fourth quarter earnings releases for GM, Hughes Electronics Corporation (Hughes), and General Motors Acceptance Corporation (GMAC), all dated January 20, 1999. GM FOURTH-QUARTER 1998 EARNINGS PER SHARE OF $2.64 BEST FOR ANY QUARTER IN GM HISTORY... EPS TOTALED $3.28 PER SHARE EXCLUDING SPECIAL ITEMS DETROIT -- Strong vehicle sales and continued aggressive cost cutting resulted in record-setting financial performance for General Motors Corporation (GM) in the fourth quarter of 1998, with $2.64 basic earnings per share of GM $1-2/3 par value common stock the best for any quarter in GM's history. Net income totaling $1.8 billion was the best for any fourth-quarter period. That compares with net income of $1.6 billion, or $2.29 per share, in the fourth quarter of 1997. Excluding special items, GM's income in the fourth quarter of 1998 totaled $2.2 billion, or $3.28 per share (see Special Items). "We came back strong following the work stoppage in mid-year and we intend to keep this momentum going in the future," said GM Chairman and Chief Executive Officer John F. Smith, Jr. Smith said, "We've been busy since August. We've achieved full production of GM's new full-size pickup trucks a month ahead of schedule, we announced and made significant progress toward the separation of Delphi Automotive Systems, we integrated the worldwide automotive operations into a single global unit, we restructured the U.S. sales and service field organization, we started up two new plants in key developing markets -- Poland and China -- and we expanded our ownership in and partnerships with Isuzu and Suzuki -- all since August." GM also reported today that its strike-impacted calendar-year-1998 net income totaled $3.0 billion, or $4.26 per share, compared with $6.3 billion, or $8.45 per share, in calendar-year 1997. All earnings-per-share amounts are basic (see Highlights for diluted earnings-per-share amounts). The corporation's strong fourth quarter primarily reflects the excellent results for GM North America, which reached an all-time record for any quarter, with net income totaling $1.6 billion, and a net-profit margin of 5.7 percent. That beat the previous record high of $841 million in the first quarter of 1998 by more than $700 million. Consolidated net sales and revenues in the fourth quarter of 1998 totaled $46.4 billion, and $161 billion for the calendar year, compared with $42.9 billion for the fourth quarter of 1997 and $167 billion in calendar-year 1997, adjusted to reflect the spin-off of the Hughes defense business. Cash, marketable securities and assets of the Voluntary Employees' Beneficiary Association (VEBA) trust invested in fixed-income securities totaled $14.1 billion at Dec. 31, 1998, compared with $17.5 billion at Dec. 31, 1997, and $11.5 billion at Sept. 30, 1998. These cash amounts exclude GM's financing and insurance operations. - 2 - "By running our operations full out and effectively containing costs, we have rebuilt our cash position to exceed the $13 billion necessary to support capital-spending programs, adequately fund pension plans, continue stockholder initiatives, and keep us in a strong position in the event of any future downturn," Smith said. "With regard to stockholder initiatives, we are planning three steps," Smith said. "First, we will reinstate the share-repurchase program during the first quarter of 1999 with a targeted completion by the end of this calendar year. Since January 1997, GM has spent $6.3 billion to repurchase approximately 102 million shares of GM $1-2/3 par value common stock or about 13.5 percent of the total shares outstanding. Secondly, GM plans to redeem its Series B 9-1/8 Preference Stock in the near future. There are currently some 20 million depositary shares of the preference stock with a face value of more than $500 million. Third, during 1999, we are planning to distribute our entire ownership interest in Delphi to GM's $1-2/3 stockholders." Significant factors impacted both the fourth-quarter and calendar-year-1998 and 1997 financial results (see Special Items, and Highlights). Excluding special items, GM's income in the fourth quarter of 1998 totaled $2.2 billion, or $3.28 per share, which compares with $1.4 billion, or $1.96 per share in the fourth quarter of 1997. "We expect strong market conditions to continue in the United States and Europe in 1999, and fully intend to maintain our momentum in the market and to further strengthen our financial position," Smith said. "However, the economic problems and uncertainty in Asia and Latin America will be a continuing challenge in 1999," Smith cautioned. Unless otherwise noted, corporate and sector data in the remainder of this release exclude the above-mentioned special items. (See Highlights for calendar-year data.) Following is a summary of income from GM's business sectors in the fourth quarter of 1998, compared with the prior-year period. GM Business Sector Fourth Quarter Fourth Quarter 1998 1997 GM Automotive $1.5 billion $831 million Delphi Automotive Systems $280 million $349 million General Motors Acceptance $298 million $279 million Corporation (GMAC) Hughes Electronics $119 million $70 million Corporation (Hughes) GM AUTOMOTIVE GM Automotive fourth-quarter-1998 income totaled $1.5 billion, compared with $831 million in the fourth quarter of 1997. "We're pleased to see the strong results driven by the global automotive team in the fourth quarter of 1998, our first quarter as a globally integrated unit," said GM President and Chief Operating Officer G. Richard Wagoner, Jr. - 3 - "We came back strong in North America following the work stoppage and began to pick up momentum in Europe as well," Wagoner said. "Significant cost-restructuring actions were implemented in South America in response to the difficult economic and market environments, and we continue our plan to expand in the Asia-Pacific region despite the current economic weakness there. "Overall in 1998, we ended on a strong note, and we expect to build on that momentum in 1999," Wagoner said. "We plan to keep an intense focus on cost reduction, while introducing many new products around the world." GM Automotive's net margin was 4.2 percent in the fourth quarter of 1998 - -- up significantly from the net margin of 2.4 percent in the same period last year. Following are results from the four regions that comprise GM Automotive: - Income for GM North America totaled $1.7 billion in the fourth quarter of 1998, compared with $650 million in the fourth quarter of 1997. Net-income margin of 6.0 percent in the fourth quarter of 1998 represents the best performance in recent history. - GM Europe's income totaled $146 million in the fourth quarter of 1998, compared with $31 million in the fourth quarter of 1997. - GM Latin America/Africa/Mid-East showed a loss of $161 million in the fourth quarter of 1998 compared with income of $192 million in the fourth quarter of 1997. - GM Asia/Pacific's losses totaled $116 million in the fourth quarter of 1998, compared with a loss of $27 million in the prior-year period. GM vehicle deliveries in the United States totaled 1,154,000 units in the fourth quarter of 1998, which resulted in a 29.1-percent share of the U.S. vehicle market. "Reaching full production of our new full-size pickup trucks a month ahead of schedule in December of 1998, along with our 14 all-new product entries in 1999, should set the stage for further improved market and financial results," Wagoner said. GM Europe gained market momentum in the fourth quarter of 1998, with market share reaching 9.9 percent, up 0.5 percentage points from the fourth quarter of 1997. This improvement resulted from the full availability of the new Opel/Vauxhall Astra, which was the best-selling product in Europe during the fourth quarter of 1998. Both the Asia/Pacific and Latin America/Africa/Mid-East regions continue to be affected by economic turmoil and uncertainties, which are expected to continue in early 1999. GM was the market leader in the fourth quarter of 1998 in the Latin America/Africa/Mid-East region, even though GM's normally strong Brazilian operations continued to suffer. GM plans to remain fully committed to both the Asia/Pacific and Latin American regions, and is positioning itself for the future in both markets due to their long-term growth potential. - 4 - DELPHI AUTOMOTIVE SYSTEMS (DELPHI) Delphi Automotive Systems' income totaled $280 million in the fourth quarter of 1998, compared with $349 million in the fourth quarter of 1997. The net-profit margin was 3.6 percent in the fourth quarter of 1998, compared with 4.3 percent in the same period of 1997. "Delphi's fourth-quarter-1998 results reflect the impact of the economic downturn in Latin America," said Delphi Chairman, Chief Executive Officer and President J.T. Battenberg III. "But continuing worldwide price pressures were offset by Delphi's aggressive cost-reduction efforts, particularly in the areas of manufacturing, material, and engineering." GENERAL MOTORS ACCEPTANCE CORPORATION (GMAC) GMAC reported income of $298 million in the fourth quarter of 1998, compared with income of $279 million in the fourth quarter of 1997. Income from automotive financing operations increased 8 percent in the fourth quarter of 1998, while earnings from the GMAC Mortgage Group increased 52 percent compared with the prior-year period. HUGHES ELECTRONICS CORPORATION (HUGHES) Income in the fourth quarter of 1998 totaled $119 million, compared with $70 million in the prior-year period. Hughes' fourth-quarter results reflect continued record growth in DirectTV subscriptions, as well as increased sales of commercial satellites. Revenues in the fourth quarter of 1998 increased 5.7 percent to $1.8 billion, compared with $1.7 billion in the same period of 1997. SPECIAL ITEMS As a result of GM's continuing studies relating to the competitiveness of its various automotive assets and operations, the corporation recorded after-tax charges against income in the fourth quarter of 1998 totaling $420 million, or $0.64 per share. Following are the components of the after-tax charges: - $80 million at GM North America, primarily related to separation programs for employees involved in the restructuring of the U.S. sales and service field organization. - $97 million at GM Asia/Pacific primarily related to the impact of the weak economic environment on GM's investments in India and Thailand. - $51 million at GM Latin America/Africa/Mid-East related to underperforming assets, and separation programs for employees, as part of GM's cost-reduction efforts in response to economic conditions. - $192 million at Delphi, primarily related to voluntary early retirements, closing of unprofitable joint ventures, and underperforming assets. (See Highlights for previously reported special items) - 5 - PROFIT SHARING As a result of the profits generated in 1998 by GM's operations in the United States, profit-sharing payments will be made in 1999 to approximately 231,000 of GM's represented employees in the United States. Each full-time represented employee who worked the entire year should receive approximately $200. This is the fifth consecutive year that profit-sharing payments have been made to U.S. employees. Profits generated in 1997 resulted in a profit-sharing payout of approximately $750. General Motors also announced today that more than 70,000 eligible salaried employees in the United States and Canada will receive incentive payments. The 1998 salaried cash payout is either 1.0 percent of an employee's base-salary earnings or $200, whichever is higher. In addition to the cash payout, eligible salaried employees in the United States and Canada will be granted options to purchase General Motors stock. As a continuation of the program initiated last year, options covering a total of 5 million shares will be awarded with individual grants covering from 25 to 100 shares, depending upon the level of the employee's responsibility. FORWARD LOOKING STATEMENTS This release and related management discussions with securities analysts, the media and others will contain certain forward-looking statements indicated by our use of the terms "plans," "expects," "outlook," "forecast" and similar words. These forward-looking statements are made in an effort to assist the market in understanding General Motors and its results. Forward-looking statements are inherently predictive in nature and GM cannot assure nor guarantee that actual results will not differ materially from its predictions. Important risk factors that could cause actual results to differ materially from those indicated by our predictions are detailed in the corporation's Annual Report on Form 10-K for the year ended Dec. 31, 1997, in Part II, at page II-64, under the heading "Forward-Looking Statements." # # # HIGHLIGHTS ATTACHED - 6 - HIGHLIGHTS - Q4 Financial Results (Dollars in Millions Except Per Share Amounts) Three Months Ended December 31, ------------------------------------ Adjusted Adjusted 1998 1998(1) 1997 1997(1) -------- ------- ------- -------- Net sales and revenues (2) Manufactured products $40,747 $40,747 $37,688 $38,147 Financing and insurance 3,495 3,495 3,199 3,199 Other income 2,124 2,124 6,280 2,100 ------ ------ ------ ------ Total net sales and revenues $46,366 $46,366 $47,167 $43,446 ------ ------ ------ ------ Net income (2) $1,772 $2,192 $1,645 $1,415 Net profit margin (2) 3.8% 4.7% 3.5% 3.3% ............................................................. Earnings Attributable to Common Stocks $1-2/3 par value $1,725 $1,654 Class H (3) $- $65 Class H (4) $32 $2 ............................................................. Basic Earnings Per Share Attributable to Common Stocks $1-2/3 par value $2.64 $3.28 $2.36 $1.96 Class H (3) $- $- $0.63 Class H (4)(9) $0.30 $0.30 $0.02 $0.18 ............................................................. Diluted Earnings Per Share Attributable to Common Stocks $1-2/3 par value $2.61 $3.25 $2.33 $1.93 Class H (3) $- $- $0.63 Class H (4)(9) $0.30 $0.30 $0.02 $0.18 ............................................................. Cash Dividends Per Share of Common Stocks $1-2/3 par value $0.50 $0.50 Class H (3) $- $0.25 Class H (4) $- $- ............................................................. Book Value Per Share of Common Stocks December 31, ---------------------- 1998 1997 --------- --------- $1-2/3 par value $19.90 $22.26 Class H $11.94 $13.36 ............................................................. See footnotes beginning on page 12. continues - 7 - HIGHLIGHTS - Q4 Adjusted for Competitiveness Studies, Hughes Transactions and Other Adjustments by Sector (Dollars in Millions) Three Months Ended December 31, 1998 ---------------------------- (1) Reported (5) Adjusted Income Comp. Income (Loss) Studies (Loss) ------- ------- -------- GM North America (GMNA) $1,583 $(80) $1,663 GM Europe (GME) 146 - 146 GM Latin America/ Africa/Mid-East (GMLAAM) (212) (51) (161) GM Asia/Pacific (GMAP) (213) (97) (116) Other (5) - (5) ----- ---- ----- Total GM Automotive (GMA) 1,299 (228) 1,527 Delphi 88 (192) 280 Hughes (9) 119 - 119 Other (53) - (53) ----- ---- ----- Total Automotive, Electronics and Other Operations 1,453 (420) 1,873 GMAC 298 - 298 Other 21 - 21 ----- ---- ----- Total Financing and Insurance Operations 319 - 319 ----- ---- ----- Consolidated net income $1,772 $(420) $2,192 ===== ==== ===== Three Months Ended December 31, 1997 (2) ------------------------------------------ (1) Reported (5) (6) (7) Adjusted Income Comp. Hughes Other Income (Loss) Studies Trans. Adjs. (Loss) ------- ------- ------- ------- ------- GMNA $(1,747) $(2,383) $ - (14) $650 GME (457) (488) - - 31 GMLAAM 192 - - - 192 GMAP (196) (170) - 1 (27) Other (15) - - - (15) ----- ----- ----- ----- ----- Total GMA (2,223) (3,041) - (13) 831 Delphi (508) (870) - 13 349 Hughes 70 - - - 70 Other 4,013 (128) 4,269 - (128) ----- ----- ----- ----- ----- Total Automotive, Electronics and Other Operations 1,352 (4,039) 4,269 - 1,122 GMAC 279 - - - 279 Other 14 - - - 14 ----- ----- ------ ----- ----- Total Financing and Insurance Operations 293 - - - 293 ----- ----- ----- ----- ----- Consolidated net income $1,645 $(4,039) $4,269 $ - $1,415 ===== ===== ===== ===== ===== See footnotes beginning on page 12. continues - 8 - HIGHLIGHTS - Q4 Automotive Operations and Delphi Adjusted for Competitiveness Studies, Hughes Transactions and Other Adjustments (Dollars in Millions) Three Months Ended December 31, 1998 ---------------------------------------- GMNA GME GMLAAM GMAP Delphi ------ ----- ------ ------ ------ Reported -------- Revenue $27,912 $7,185 $1,484 $768 $7,800 ------ ----- ----- --- ----- Pre-tax income (loss) 2,403 229 (366) (97) 70 Income tax expense (benefit) 813 81 (139) 3 5 Equity (loss) income and minority interests (7) (2) 15 (113) 23 ----- ----- ----- --- ----- Net income (loss) $1,583 $146 $(212) $(213) $88 ===== ===== ===== === ===== Net profit (loss) margin 5.7% 2.0% (14.3%) (27.7%) 1.1% Effective income tax rate 33.8% 35.4% 38.0% (3.1%) 7.1% Competitiveness Studies (5) ----------------------- Revenue $ - $ - $ - $ - $ - ----- ----- ----- --- ----- Pre-tax income (105) - (82) (37) (310) Income taxes (40) - (31) - (118) Equity income and minority interests (15) - - (60) - ----- ----- ----- --- ----- Net income $(80) $ - $(51) $(97) $(192) ===== ===== ===== === ===== Adjusted (1) -------- Revenue $27,912 $7,185 $1,484 $768 $7,800 ------ ----- ----- ----- ----- Pre-tax income (loss) 2,508 229 (284) (60) 380 Income tax expense (benefit) 853 81 (108) 3 123 Equity income (loss) and minority interests 8 (2) 15 (53) 23 ------ ----- ----- ----- ----- Net income (loss) $1,663 $146 $(161) $(116) $280 ====== ===== ===== ===== ===== Net profit (loss) margin 6.0% 2.0% (10.8%) (15.1%) 3.6% Effective income tax rate 34.0% 35.4% 38.0% (5.0%) 32.4% See footnotes beginning on page 12. continues - 9 - HIGHLIGHTS - Q4 Automotive Operations and Delphi Adjusted for Competitiveness Studies, Hughes Transactions and Other Adjustments (Dollars in Millions) Three Months Ended December 31, 1997 ---------------------------------------- GMNA GME GMLAAM GMAP Delphi ------ ----- ------ ------ ------ Reported (2) -------- Revenue $25,527 $6,103 $2,085 $836 $8,079 ------ ----- ----- --- ----- Pre-tax (loss) income (2,826) (695) 68 (180) (748) Income tax benefit (1,132) (261) (33) (14) (257) Equity (loss) income and minority interests (53) (23) 91 (30) (17) ----- ----- ----- --- ----- Net (loss) income $(1,747) $(457) $192 $(196) $(508) ===== ===== ===== === ===== Net (loss) profit margin (6.8%) (7.5%) 9.2% (23.4%) (6.3%) Effective income tax rate 40.1% 37.6% (48.5%) 7.8% 34.4% Competitiveness Studies (5) ----------------------- Revenue $(450) $- $- $(9) $ - ----- ----- ----- --- ----- Pre-tax income (3,708) (848) - (174) (1,362) Income taxes (1,396) (360) - (13) (502) Equity income and minority interests (71) - - (9) (10) ----- ----- ----- --- ----- Net income $(2,383) $(488) $- $(170) $(870) ===== ===== ===== === ===== Other Adjustments (7) ----------------- Revenue $- $- $- $- $- ------ ----- ----- --- ----- Pre-tax income (64) - - 1 63 Income taxes (50) - - - 50 Equity income and minority interests - - - - - ------ ----- ----- --- ----- Net income $(14) $- $- $1 $13 ====== ===== ===== === ===== Adjusted (1) -------- Revenue $25,977 $6,103 $2,085 $845 $8,079 ------ ----- ----- --- ----- Pre-tax income (loss) 946 153 68 (7) 551 Income tax expense (benefit) 314 99 (33) (1) 195 Equity income (loss) and minority interests 18 (23) 91 (21) (7) ------ ----- ----- --- ----- Net income (loss) $650 $31 $192 $(27) $349 ====== ===== ===== === ===== Net profit (loss) margin 2.5% 0.5% 9.2% (3.2%) 4.3% Effective income tax rate 33.2% 64.7% (48.5%) 14.3% 35.4% See footnotes beginning on page 12. continues - 10 - HIGHLIGHTS - Q4 Operating Information Three Months Ended December 31, ---------------------- 1998 1997 --------- ---------- Worldwide Wholesale Sales (units in 000s) United States: Cars 739 699 Trucks 616 599 ------ ------ Total United States 1,355 1,298 Canada and Mexico 169 152 ------ ------ Total GM North America 1,524 1,450 ------ ------ GME 465 469 GMLAAM 131 187 GMAP 91 107 ------ ------ Total International 687 763 ------ ------ Total Worldwide 2,211 2,213 ====== ====== .................................................... Vehicle Unit Deliveries (units in 000s) United States Chevrolet - Cars 209 216 - Trucks 383 382 Pontiac 133 132 GMC 112 117 Buick 101 113 Oldsmobile 98 77 Saturn 52 52 Cadillac 57 44 Other 9 5 ------ ------ Total United States 1,154 1,138 Canada and Mexico 140 162 ------ ------ Total GM North America 1,294 1,300 ------ ------ GME 443 419 GMLAAM 131 182 GMAP 94 120 ------ ------ Total International 668 721 ------ ------ Total Worldwide 1,962 2,021 ====== ====== .................................................... Market share United States Cars 31.6% 32.2% Trucks 26.7% 29.0% Total 29.1% 30.6% Total North America 28.9% 30.5% Western Europe 10.9% 11.1% Latin America 18.1% 19.6% Asia and Pacific 3.6% 3.9% Total Worldwide 15.8% 15.7% ..................................................... U.S. Retail/Fleet Mix % Fleet Sales - Cars 33.7% 27.0% % Fleet Sales - Trucks 13.8% 12.4% Total vehicles 24.6% 20.2% .................................................... Days Supply of Inventory - U.S. Cars 93 92 Trucks 89 97 ..................................................... Capacity Utilization % U.S. and Canada (2-shift rated) 101.2% 100.5% ..................................................... GMNA Retail Incentives ($ per unit) $1,161 $1,148 Net Price (%) 1.3% (1.3)% ..................................................... See footnotes beginning on page 12. continues - 11 - HIGHLIGHTS - Q4 Other Financial Information (Dollars in Millions Except Per Share Amounts) Three Months Ended December 31, ---------------------- 1998 1997 --------- ---------- Depreciation and Amortization (8) Depreciation $1,279 $2,693 Amortization of special tools 885 3,407 Amortization of intangible assets 35 76 ------ ----- Total $2,199 $6,176 ====== ===== .................................................... Worldwide Employment at December 31 (in 000s) (2) GMNA 226 237 GME 84 79 GMLAAM 23 27 GMAP 10 10 Delphi 199 210 Hughes 15 15 GMAC 25 21 Other 13 9 ------ ------ Total 595 608 ====== ====== .................................................... Worldwide Payrolls (2) $6,644 $7,021 .................................................... (1) Adjusted amounts represent the reported amounts less the effects of special items (including Competitiveness Studies), Hughes Transactions and Other Adjustments. (2) Amounts reported for 1997 have been adjusted to reflect the changes to GM's organizational structure resulting from the Hughes Transactions. As such, Delphi reported amounts include Delco and Hughes reported amounts exclude Delco and Hughes Defense. (3) Data relates to a period prior to the date on which GM recapitalized the Class H common stock as part of the Hughes Transactions ("GM's Recapitalization Date"). (4) Data relates to a period which is subsequent to GM's Recapitalization Date. (5) As a result of GM's continuing automotive competitiveness studies, fourth quarter 1998 results were impacted by charges totaling $534 million ($420 million after-tax or $0.64 per share of $1-2/3 par value common stock. These studies were performed in conjunction with GM's current business planning cycle. In the fourth quarter 1997, GM recorded pre-tax charges against income totaling $6.4 billion ($4.0 billion after-tax or $5.75 per share of $1-2/3 par value common stock). (6) On December 17, 1997, GM completed the restructuring of its Hughes Electronics subsidiary (Hughes Transactions), which resulted in a tax-free gain of $4.3 billion or $6.08 per share of $1-2/3 par value common stock in the fourth quarter of 1997. (7) Results have been adjusted for amounts necessary to reflect Delphi's financial statements on the same basis as contained in their Form S-1 document filed with the Securities and Exchange Commission during the fourth quarter of 1998, in connection with their anticipated initial public offering. (8) Amounts exclude depreciation and amortization charges incurred by the financing and insurance operations. (9) 1998 results include the cumulative effect of accounting change of $9 million due to Hughes' adoption of SOP 98-5. Hughes has reported the $9 million change as a restatement of first quarter 1998 results. continues - 12 - HIGHLIGHTS - Year Ended Financial Results (Dollars in Millions Except Per Share Amounts) Year Ended December 31, ------------------------------------ Adjusted Adjusted 1998 1998 (1) 1997 1997 (1) -------- ------- ------ ------- Net sales and revenues (2) Manufactured products $140,433 $140,433 $146,759 $147,218 Financing and insurance 13,585 13,585 12,762 12,762 Other income 7,297 7,297 11,663 6,777 ------- ------- ------- ------- Total net sales and revenues $161,315 $161,315 $171,184 $166,757 ------- ------- ------- ------- Net income (2) $2,956 $3,691 $6,314 $5,658 Net profit margin (2) 1.8% 2.3% 3.7% 3.4% ............................................................. Earnings Attributable to Common Stocks $1-2/3 par value $2,822 $6,276 Class H (3) $- $322 Class H (4) $72 $2 ............................................................. Basic Earnings Per Share Attributable to Common Stocks $1-2/3 par value $4.26 $5.38 $8.70 $7.66 Class H (3) $- $- $3.17 Class H (4) $0.68 $0.68 $0.02 $0.38 ............................................................. Diluted Earnings Per Share Attributable to Common Stocks $1-2/3 par value $4.18 $5.30 $8.62 $7.58 Class H (3) $- $- $3.17 Class H (4) $0.68 $0.68 $0.02 $0.38 ............................................................. Cash Dividends Per Share of Common Stocks $1-2/3 par value $2.00 $2.00 Class H (3) $- $1.00 Class H (4) $- $- .............................................................. See footnotes beginning on page 19. continues - 13 - HIGHLIGHTS - Year Ended Adjusted for Competitiveness Studies, Hughes Transactions, and Other Adjustments By Sector (Dollars in Millions) Year Ended December 31, 1998 ---------------------------------- Special (1) Reported (5) Items(6) Adjusted Income Comp. & Other Income (Loss) Studies Adjs.(9) (Loss) ------- ------- -------- ------- GMNA $1,601 $(80) $(34) $1,715 GME 419 - (44) 463 GMLAAM (175) (51) - (124) GMAP (239) (97) 4 (146) Other (2) - - (2) ----- ----- ----- ----- Total GM Automotive (GMA) 1,604 (228) (74) 1,906 Delphi (50) (192) (228) 370 Hughes 272 - - 272 Other (292) - (13) (279) ----- ----- ----- ----- Total Automotive, Electronics and Other Operations 1,534 (420) (315) 2,269 GMAC 1,325 - - 1,325 Other 97 - - 97 ----- ----- ----- ----- Total Financing and Insurance Operations 1,422 - - 1,422 ----- ----- ----- ----- Consolidated net income $2,956 $(420) $(315) $3,691 ===== ===== ===== ===== Year Ended December 31, 1997 (2) ---------------------------------- Reported (5) (8) Income Comp. Hughes Sub- (Loss) Studies Trans. Total ------ ------- ------ ------ GMNA $(86) $(2,383) $- $2,297 GME (17) (488) - 471 GMLAAM 667 - - 667 GMAP (169) (170) - 1 Other (17) - - (17) ----- ----- ----- ----- Total GM Automotive (GMA) 378 (3,041) - 3,419 Delphi 286 (870) - 1,156 Hughes 471 - - 471 Other 3,861 (128) 4,269 (280) ----- ----- ----- ----- Total Automotive, Electronics and Other Operations 4,996 (4,039) 4,269 4,766 GMAC 1,301 - - 1,301 Other 17 - - 17 ----- ----- ------ ------ Total Financing and Insurance Operations 1,318 - - 1,318 ----- ----- ----- ----- Consolidated net income $6,314 $(4,039) $4,269 $6,084 ===== ===== ===== ===== See footnotes beginning on page 19. continues - 14 - HIGHLIGHTS - Year Ended Adjusted for Competitiveness Studies, Hughes Transactions, and Other Adjustments By Sector (Dollars in Millions) Year Ended December 31, 1997 ------------------------------------- (7) (9) (1) Other Other Adjusted Sub- Special Adjust- Income Total Items ments (loss) ------ ------- ------- ------- GMNA $2,297 $- $(74) $2,371 GME 471 158 - 313 GMLAAM 667 - - 667 GMAP 1 - 3 (2) Other (17) - - (17) ----- ----- ----- ----- Total GM Automotive (GMA) 3,419 158 (71) 3,332 Delphi 1,156 (50) 71 1,135 Hughes 471 318 - 153 Other (280) - - (280) ----- ----- ----- ----- Total Automotive, Electronics and Other Operations 4,766 426 - 4,340 GMAC 1,301 - - 1,301 Other 17 - - 17 ----- ----- ----- ----- Total Financing and Insurance Operations 1,318 - - 1,318 ----- ----- ----- ----- Consolidated net income $6,084 $426 $- $5,658 ===== ===== ===== ===== See footnotes beginning on page 19. continues - 15 - HIGHLIGHTS - Year Ended Automotive Operations and Delphi Adjusted for Competitiveness Studies, Hughes Transactions, and Other Adjustments (Dollars in Millions) Year Ended December 31, 1998 ---------------------------------------- GMNA GME GMLAAM GMAP Delphi ------ ----- ------ ------ ------ Reported -------- Revenue $94,201 $25,036 $7,403 $2,923 $28,479 ------ ------ ----- ----- ------ Pre-tax income (loss) 2,353 740 (471) (77) (268) Income tax expense (benefit) 765 319 (213) 10 (152) Equity income (loss) and minority interests 13 (2) 83 (152) 66 ----- ----- ----- ----- ----- Net income $1,601 $419 $(175) $(239) $(50) ===== ===== ===== ===== ===== Net profit (loss) margin 1.7% 1.7% (2.4%) (8.2%) (0.2%) Effective income tax rate 32.5% 43.1% 45.2% (13.0%) 56.7% Competitiveness Studies (5) ----------------------- Revenue $- $- $- $- $- ----- ----- ----- ----- ----- Pre-tax income (105) - (82) (37) (310) Income taxes (40) - (31) - (118) Equity income and minority interests (15) - - (60) - ----- ----- ----- ----- ----- Net income $(80) $- $(51) $(97) $(192) ===== ===== ===== ===== ===== Special Items (7) and Other Adjustments (9) ----------------- Revenue $- $- $- $- $- ----- ----- ----- ----- ----- Pre-tax income (56) (74) - 5 (366) Income taxes (22) (30) - 1 (138) Equity income and minority interests - - - - - ----- ----- ----- ----- ----- Net income $(34) $(44) $- $4 $(228) ===== ===== ===== ===== ===== Adjusted (1) -------- Revenue $94,201 $25,036 $7,403 $2,923 $28,479 ------ ------ ----- ----- ------ Pre-tax income (loss) 2,514 814 (389) (45) 408 Income tax expense (benefit) 827 349 (182) 9 104 Equity income (loss) and minority interests 28 (2) 83 (92) 66 ----- ----- ----- ----- ----- Net income (loss) $1,715 $463 $(124) $(146) $370 ===== ===== ===== ===== ===== Net profit (loss) margin 1.8% 1.8% (1.7%) (5.0%) 1.3% Effective income tax rate 32.9% 42.9% 46.8% (20.0%) 25.5% See footnotes beginning on page 19. continues - 16 - HIGHLIGHTS - Year Ended Automotive Operations and Delphi Adjusted for Competitiveness Studies, Hughes Transactions, and Other Adjustments (Dollars in Millions) Year Ended December 31, 1997 ---------------------------------------- GMNA GME GMLAAM GMAP Delphi ------ ----- ------ ------ ------ Reported (2) -------- Revenue $100,256 $24,106 $8,573 $2,980 $31,447 ------- ------ ----- ----- ------ Pre-tax (loss) income (408) 256 536 (231) 379 Income tax (benefit) expense (357) 121 43 (28) 129 Equity (loss) income and minority interests (35) (152) 174 34 36 ----- ----- ----- ----- ----- Net (loss) income $(86) $(17) $667 $(169) $286 ===== ===== ===== ===== ===== Net (loss) profit margin (0.1%) (0.1%) 7.8% (5.7%) 0.9% Effective income tax rate 87.5% 47.3% 8.0% 12.1% 34.0% Competitiveness Studies (5) ----------------------- Revenue $(450) $- $- $(9) $- ----- ----- ----- ----- ----- Pre-tax income (3,708) (848) - (174) (1,362) Income taxes (1,396) (360) - (13) (502) Equity income and minority interests (71) - - (9) (10) ----- ----- ----- ----- ----- Net income $(2,383) $(488) $- $(170) $(870) ===== ===== ===== ===== ===== Special Items (7) Other Adjustments (9) ----------------- Revenue $- $- $- $- $- ----- ----- ----- ----- ----- Pre-tax income (159) 216 - 4 75 Income taxes (85) 58 - 1 54 Equity income and minority interests - - - - - ----- ----- ----- ----- ----- Net income $(74) $158 $- $3 $21 ===== ===== ===== ===== ===== Adjusted (1) -------- Revenue $100,706 $24,106 $8,573 $2,989 $31,447 ------- ------ ----- ----- ------ Pre-tax income (loss) 3,459 888 536 (61) 1,666 Income tax expense (benefit) 1,124 423 43 (16) 577 Equity income (loss) and minority interests 36 (152) 174 43 46 ----- ----- ----- ----- ----- Net income (loss) $2,371 $313 $667 $(2) $1,135 ===== ===== ===== ===== ===== Net profit (loss) margin 2.4% 1.3% 7.8% (0.1%) 3.6% Effective income tax rate 32.5% 47.6% 8.0% 26.2% 34.6% See footnotes beginning on page 19. continues - 17 - HIGHLIGHTS - Years Ended Operating Information Years Ended December 31, ---------------------- 1998 1997 --------- ---------- Worldwide Wholesale Sales (units in 000s) United States: Cars 2,389 2,754 Trucks 2,051 2,177 ------ ------ Total United States 4,440 4,931 Canada and Mexico 631 618 ------ ------ Total GM North America 5,071 5,549 ------ ------ GME 2,007 1,850 GMLAAM 652 785 GMAP 419 592 ------ ------ Total International 3,078 3,227 ------ ------ Total Worldwide 8,149 8,776 ====== ====== .................................................... Vehicle Unit Deliveries (units in 000s) United States Chevrolet - Cars 876 981 - Trucks 1,551 1,504 Pontiac 536 609 GMC 468 468 Buick 398 438 Oldsmobile 330 305 Saturn 232 251 Cadillac 187 183 Other 31 27 ------ ------ Total United States 4,609 4,766 Canada and Mexico 603 594 ------ ------ Total GM North America 5,212 5,360 ------ ------ GME 1,857 1,833 GMLAAM 653 746 GMAP 443 575 ------ ------ Total International 2,953 3,154 ------ ------ Total Worldwide 8,165 8,514 ====== ====== .................................................... Market Share United States Cars 30.0% 32.4% Trucks 27.6% 28.8% Total 28.9% 30.8% Total North America 28.9% 30.8% Western Europe 10.6% 11.3% Latin America 20.2% 19.6% Asia and Pacific 4.1% 4.3% Total Worldwide 15.7% 16.0% ..................................................... U.S. Retail/Fleet Mix % Fleet sales - Cars 26.4% 25.5% % Fleet sales - Trucks 13.7% 13.0% Total vehicles 20.5% 20.0% ..................................................... Capacity Utilization % U.S. and Canada (2-shift rated) 83.5% 94.4% ..................................................... GMNA Retail Incentives ($ per unit) $1,439 $1,027 Net Price (%) (1.2%) (0.6%) ..................................................... See footnotes beginning on page 19. continues - 18 - HIGHLIGHTS - Years Ended Other Financial Information (Dollars in Millions Except Per Share Amounts) Year Ended December 31, ---------------------- 1998 1997 --------- ---------- Depreciation and Amortization (10) Depreciation $4,501 $5,901 Amortization of special tools 2,661 5,674 Amortization of intangible assets 119 228 ------ ------ Total $7,281 $11,803 ====== ====== .................................................... Worldwide Payrolls (2) $26,516 $28,051 .................................................... (1) Adjusted amounts represent the reported amounts less the effects of special items (including Competitiveness Studies), Hughes Transactions and Other Adjustments. Adjusted amounts for 1998 and 1997 include the unfavorable effects of strike-related work stoppages. The unfavorable after-tax impacts of the work stoppages were $2.0 billion or $2.94 basic per share of $1-2/3 par value common stock in 1998 and $330 million or $0.45 basic per share in 1997. The unfavorable after-tax impacts for GMNA and Delphi were approximately $1.5 billion and $450 million, respectively, in 1998 and $240 million and $90 million, respectively in 1997. (2) Amounts reported for 1997 have been adjusted to reflect the changes to GM's organizational structure resulting from the Hughes Transactions. As such, Delphi reported amounts include Delco and Hughes reported amounts exclude Delco and Hughes Defense. (3) Data relates to a period prior to the date on which GM recapitalized the Class H common stock as part of the Hughes Transactions("GM's Recapitalization Date"). (4) Data relates to a period which is subsequent to GM's Recapitalization Date. (5) As a result of GM's continuing automotive competitiveness studies, fourth quarter 1998 results were impacted by charges totaling $534 million ($420 million after-tax or $0.64 per share of $1-2/3 par value common stock). These studies were performed in conjunction with GM's current business planning cycle. In the fourth quarter 1997, GM recorded pre-tax charges against income totaling $6.4 billion ($4.0 billion after-tax or $5.59 per share of $1-2/3 par value common stock). (6) The third quarter 1998 results included a pre-tax loss of $430 million($271 million after-tax, or $0.41 basic per share of $1-2/3 par value common stock) related to the sale of the Delphi seating, coil spring and lighting businesses. The second-quarter 1998 results included a pre-tax charge of $74 million ($44 million after-tax, or $0.07 basic per share of $1-2/3 par value common stock), related to work schedule modifications at Opel Belgium. continues - 19 - HIGHLIGHTS - Years Ended Other Financial Information (Dollars in Millions Except Per Share Amounts) (7) 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. 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. The second-quarter 1997 results included a pre-tax gain of $490 million($318 million after-taxes, or $0.33 basic per share of $1-2/3 par value common stock), that resulted from the merger of the satellite service operations of Hughes and PanAmSat Corporation. The second-quarter 1997 results also included a pre-tax gain of $128 million ($103 million after-tax, or $0.14 basic per share of $1-2/3 par value common stock),related to the sale of GM Europe's equity interest in Avis Europe. (8) On December 17, 1997, GM completed the restructuring of its Hughes Electronics subsidiary (Hughes Transactions), which resulted in a gain of $4.3 billion or $5.91 per share of $1-2/3 par value common stock. (9) Results have been adjusted for amounts necessary to reflect Delphi's financial statements on the same basis as contained in their Form S-1 document filed with the Securities and Exchange Commission during the fourth quarter of 1998, in connection with their anticipated initial public offering. (10)Amounts exclude depreciation and amortization charges incurred by the financing and insurance operations. continues - 20 - HIGHLIGHTS - List of Special Items by Quarter Impact on Net Income (Dollars in Millions) Quarter List of special items Ended Fav/(Unfav) - ----------------------- ------- ---------- Competitiveness studies 12/31/98 $(420) Sale of Delphi's seating, coil spring and lighting businesses 9/30/98 (271) Opel Belgium work schedule modifications 6/30/98 (44) ----- Total special items for 1998 $(735) ===== Quarter List of special items Ended Fav/(Unfav) - ----------------------- ------- ---------- Competitiveness studies 12/31/97 $(4,039) Gain from Hughes transactions 12/31/97 4,269 PanAmSat merger 6/30/97 318 Sale of Avis Europe 6/30/97 103 Volkswagen settlement 3/31/97 55 Delphi - Trenton, NJ plant closing 3/31/97 (50) ----- Total special items for 1997 $656 ===== - 21 - CONSOLIDATED STATEMENTS OF INCOME Quarter Ended December 31, ------------------ 1998 1997 ---- ---- (Dollars in Millions) AUTOMOTIVE, ELECTRONICS AND OTHER OPERATIONS Manufactured products revenue $40,747 $39,416 Other income 904 5,290 ------ ------ Total net sales and revenue 41,651 44,706 ------ ------ Cost of sales and other operating charges, exclusive of items listed below 32,723 34,426 Selling, general, administrative and other expenses 3,850 3,937 Depreciation and amortization expense 2,199 6,176 ------ ------ Total operating costs and expenses 38,772 44,539 ------ ------ Other expenses 269 133 Interest expense 278 298 Net (income) from transactions with Financing and Insurance Operations (35) (13) ------ ------ Income from continuing operations before income taxes and minority interests 2,367 (251) Income tax expense (benefit) 782 (1,773) Minority interest (2) 16 Earnings (losses) of nonconsolidated affiliates (130) (94) ------ ------ Net income - Automotive, Electronics and Other Operations $1,453 $1,444 ====== ====== Quarter Ended December 31, ------------------ 1998 1997 ---- ---- (Dollars in Millions) FINANCING AND INSURANCE OPERATIONS Financing and insurance revenues $3,495 $3,199 Other income 1,220 1,086 ------ ------ Total revenues and other income 4,715 4,285 ------ ------ Interest expense 1,478 1,346 Depreciation and amortization 1,290 1,244 Operating and other expenses 1,047 796 Provisions for credit losses 140 127 Insurance losses and loss adjustment expenses 253 295 ------ ------ Total costs and expenses 4,208 3,808 ------ ------ Net expense from transactions with Automotive 35 13 ------ ------ Income before income taxes 472 464 Income tax expense 149 167 Minority interest (4) (4) ------ ------ Net income - Financing and Insurance Operations $319 $293 ====== ====== - 22 - CONSOLIDATED STATEMENTS OF INCOME - Continued Quarter Ended December 31, ------------------ 1998 1997 ---- ---- (Dollars in Millions) GENERAL MOTORS CORPORATION AND SUBSIDIARIES Manufactured products revenue $40,747 $39,416 Financing and insurance revenues 3,495 3,199 Other income 2,124 6,376 ------ ------ Total net sales and revenue 46,366 48,991 ------ ------ Cost of sales and other operating charges, exclusive of items listed below 32,723 34,426 Selling, general, administrative and other expenses 4,897 4,733 Depreciation and amortization expense 3,489 7,420 Interest expense 1,756 1,644 Other expenses 662 555 ------ ------ Total costs and expenses 43,527 48,778 ------ ------ Income from continuing operations before income taxes and minority interests 2,839 213 Income tax expense 931 (1,606) Minority interest (6) 12 Earnings (losses) of nonconsolidated affiliates (130) (94) ------ ------ Net income $1,772 $1,737 ------ ------ Premium on exchange of/tender offer for preference stocks - - Dividends on preference stocks (15) (16) ------ ------ Earnings on common stocks $1,757 $1,721 ====== ====== - 23 - CONSOLIDATED STATEMENTS OF INCOME Years Ended December 31, ------------------------- 1998 1997 1996 ---- ---- ---- (Dollars in Millions) AUTOMOTIVE, ELECTRONICS AND OTHER OPERATIONS Manufactured products revenue $140,433 $153,683 $145,341 Other income 2,598 8,084 2,849 ------- ------- ------- Total net sales and revenue 143,031 161,767 148,190 ------- ------- ------- Cost of sales and other operating charges, exclusive of items listed below 117,973 130,028 123,195 Selling, general, administrative and other expenses 13,311 13,386 11,999 Depreciation and amortization expense 7,281 11,803 7,145 ------- ------- ------- Total operating costs and expenses 138,565 155,217 142,339 ------- ------- ------- Other expenses 782 241 792 Interest expense 1,050 863 771 Net expense (income) from transactions with Financing and Insurance Operations 82 (101) (125) ------ ------ ------ Income from continuing operations before income taxes and minority interests 2,552 5,547 4,413 Income tax expense 845 155 885 Minority interest 11 66 56 (Losses) earnings of nonconsolidated affiliates (184) (78) 128 ------ ------ ------ Income from continuing operations 1,534 5,380 3,712 Income from discontinued operations - - 10 ------ ------ ------- Net income - Automotive, Electronics and Other Operations $1,534 $5,380 $3,722 ====== ====== ====== - 24 - CONSOLIDATED STATEMENTS OF INCOME - Continued Years Ended December 31, ------------------------- 1998 1997 1996 ---- ---- ---- (Dollars in Millions) FINANCING AND INSURANCE OPERATIONS Financing and insurance revenues $13,585 $12,762 $12,674 Other income 4,699 3,723 3,021 ------ ------ ------ Total revenues and other income 18,284 16,485 15,695 ------ ------ ------ Interest expense 5,843 5,250 4,924 Depreciation and amortization 4,920 4,813 4,695 Operating and other expenses 4,019 2,806 2,581 Provisions for credit losses 463 523 669 Insurance losses and loss adjustment expenses 1,061 747 622 ------ ------ ------ Total costs and expenses 16,306 14,139 13,491 ------ ------ ------ Net (income) expense from transactions with Automotive (82) 101 125 ------ ------ ------ Income before income taxes 2,060 2,245 2,079 Income tax expense 618 914 838 Minority interest (20) (13) - ------ ------ ------ Net income - Financing and Insurance Operations $1,422 $1,318 $1,241 ====== ====== ====== - 25 - CONSOLIDATED STATEMENTS OF INCOME - Continued Years Ended December 31, ------------------------- 1998 1997 1996 ---- ---- ---- (Dollars in Millions Except Per Share Amounts) GENERAL MOTORS CORPORATION AND SUBSIDIARIES Manufactured products revenue $140,433 $153,683 $145,341 Financing and insurance revenues 13,585 12,762 12,674 Other income 7,297 11,807 5,870 ------- ------- ------- Total net sales and revenue 161,315 178,252 163,885 ------- ------- ------- Cost of sales and other operating charges, exclusive of items listed below 117,973 130,028 123,195 Selling, general, administrative and other expenses 17,330 16,192 14,580 Depreciation and amortization expense 12,201 16,616 11,840 Interest expense 6,893 6,113 5,695 Other expenses 2,306 1,511 2,083 ------- ------- ------- Total costs and expenses 156,703 170,460 157,393 ------- ------- ------- Income from continuing operations before income taxes and minority interests 4,612 7,792 6,492 Income tax expense 1,463 1,069 1,723 Minority interest (9) 53 56 (Losses) earnings of nonconsolidated affiliates (184) (78) 128 ------ ------ ------ Income from continuing operations $2,956 $6,698 $4,953 ------ ------ ------ Income from discontinued operations - - 10 ------ ------ ------ Net income $2,956 $6,698 $4,963 ------ ------ ------ Premium on exchange of/tender offer for preference stocks - 26 - Dividends on preference stocks 63 72 81 ------ ------ ------ Earnings on common stocks $2,893 $6,600 $4,882 ====== ====== ====== - 26 - CONSOLIDATED STATEMENTS OF INCOME - Continued Years Ended December 31, ------------------------- 1998 1997 1996 ---- ---- ---- (Dollars in Millions Except Per Share Amounts) Basic earnings per share attributable to common stocks $1-2/3 par value common stock Continuing operations $4.26 $8.70 $6.07 Discontinued operations - - (0.01) ---- ---- ---- Earnings per share attributable to $1-2/3 par value $4.26 $8.70 $6.06 ==== ==== ==== Income from discontinued operations attributable to Class E $ - $ - $0.04 ==== ==== ==== Earnings per share attributable to Class H (prior to its recapitalization on December 17, 1997) $ - $3.17 $2.88 ==== ==== ==== Earnings per share attributable to Class H (subsequent to its recapitalization on December 17, 1997) $0.68 $0.02 $ - ==== ==== ==== Diluted earnings per share attributable to common stocks $1-2/3 par value common stock Continuing operations $4.18 $8.62 $6.03 Discontinued operations - - (0.01) ---- ---- ---- Earnings per share attributable to $1-2/3 par value $4.18 $8.62 $6.02 ==== ==== ==== Income from discontinued operations attributable to Class E $ - $ - $0.04 ==== ==== ==== Earnings per share attributable to Class H (prior to its recapitalization on December 17, 1997) $ - $3.17 $2.88 ==== ==== ==== Earnings per share attributable to Class H (subsequent to its recapitalization on December 17, 1997) $0.68 $0.02 $ - ==== ==== ==== * * * * * * - 27 - HUGHES 1998 RESULTS PROPELLED BY RECORD DIRECTV SUBSCRIBER GROWTH El Segundo, Calif., January 20, 1999--Hughes Electronics Corporation today reported its fourth quarter and full-year 1998 financial results. "Our revenues increased 16.3% for 1998," said Michael T. Smith, Hughes chairman and chief executive officer. "And, excluding one-time items, earnings increased 50.5%." Revenues for 1998 were $5,963.9 million compared with $5,128.3 million in 1997. Smith stated that each of Hughes' four primary business segments contributed to the revenue growth, with the DIRECTV(R) businesses generating the majority of the increase. "Our U.S. DIRECTV business achieved its best year ever for subscriber growth, contributing to a 42% increase in 1998 revenues for the direct-to-home broadcast segment," Smith said. "Additionally, Hughes Space and Communications Company (HSC) posted another year of double-digit growth in satellite sales, we completed the integration of PanAmSat following our 1997 merger, and Hughes Network Systems (HNS) grew revenues with a four-fold increase in sales of DIRECTV receiver equipment. In fact, those increased equipment sales were an important factor in DIRECTV's ability to achieve its record subscriber numbers in the United States." Earnings(1) for 1998, excluding one-time items, increased to $165.9 million compared with $110.2 million in 1997, resulting in earnings per share on the same basis for the full year of $0.41 per share versus pro forma earnings per share(2) of $0.28 in 1997. "DIRECTV, HSC and PanAmSat all contributed to this earnings growth," Smith said, noting that additional earnings were attributable to higher interest income and lower interest expense, which more than offset lower HNS earnings and the impact from Hughes' minority share of DIRECTV Japan(TM) start-up losses. Earnings in 1998 were $271.7 million ($0.68 per share) compared with last year's $470.7 million ($1.18 per share on a pro forma basis) in 1997. "The change in our year-over-year earnings is largely attributable to the one-time after-tax gain of $318.3 million ($0.80 per share) we reported in 1997 arising from the PanAmSat merger," Smith explained. One-time items included in the 1998 results were a favorable adjustment to the income tax provision in the fourth quarter of $115.0 million ($0.29 per share), which resulted from a tax settlement with the Internal Revenue Service (IRS), and a $9.2 million after-tax charge ($0.02 per share) for the cumulative effect of an accounting change mandated by the American Institute of Certified Public Accountants for the write-off of previously capitalized start-up costs. Additional one-time items included in the 1997 results were a $62.8 million after-tax gain ($0.16 per share) related to the sale of Hughes-Avicom International, and a $20.6 million after-tax extraordinary charge ($0.05 per share) associated with PanAmSat's tender offer to retire its high-yield debt securities. Operating profit(1) in 1998 was $270.1 million compared with $306.4 million last year. Full-year 1998 operating profit margin on the same basis was 4.5% versus 6.0% in 1997. Smith said the lower 1998 operating profit and margin were principally a result of lower sales of wireless telephone systems and private business networks in the Asia Pacific region, as well as provisions for estimated losses at HNS associated with uncollectible amounts from certain wireless customers. - 28 - Fourth Quarter Financial Review Revenues for the fourth quarter increased 5.7% to $1,790.6 million compared with $1,694.6 million for the same period in 1997. This growth was primarily the result of record DIRECTV U.S. subscriber growth and higher sales of commercial satellites. Fourth quarter operating profit(1) was $40.8 million versus $91.8 million in 1997. The majority of the decline was due to losses in HNS' international wireless telephone business, which are attributable to lower sales and a provision for uncollectible amounts from a customer in the Asia Pacific region. Also contributing to the operating profit decline in the fourth quarter were higher operating losses associated with DIRECTV in Latin America, and increased operating costs related to PanAmSat's satellite fleet expansion. Operating profit margin, on the same basis, was 2.3% in the quarter compared with 5.4% in 1997. The decline in operating profit margin was also impacted by higher development costs for HSC's geostationary mobile telephony product line. Earnings(1) in the fourth quarter of 1998 were $128.2 million compared with $70.0 million last year. Earnings per share on the same basis were $0.32 in the quarter versus pro forma earnings per share(2) of $0.18 in 1997. Excluding one-time items, earnings were $13.2 million compared with $27.8 million in last year's fourth quarter, resulting in earnings per share of $0.03 in the period versus $0.07 in 1997. The 1998 fourth quarter one-time item was the favorable adjustment to the income tax provision ($115.0 million, $0.29 per share), which resulted from an IRS tax settlement. One-time items included in the 1997 fourth quarter results were the after-tax gain related to the sale of Hughes-Avicom International ($62.8 million, $0.16 per share) and the after-tax extraordinary charge related to PanAmSat's tender offer to retire its high-yield debt securities ($20.6 million, $0.05 per share). The decline in earnings and earnings per share was principally a result of the quarter's lower operating profit, as well as higher losses related to the first full year of service for DIRECTV Japan, a 32% Hughes-owned affiliate. These reductions to earnings more than offset the improvements resulting from increased interest income and lower interest expense. SEGMENT FINANCIAL REVIEW FULL YEAR AND FOURTH QUARTER 1998 Direct-To-Home Broadcast Full Year 1998. Revenues for the full year rose 42.2% to $1,816.1 million from $1,276.9 million in 1997. The increase was driven by record U.S. subscriber growth, strong average monthly revenue per subscriber and low subscriber churn rates. As a result of DIRECTV's best-ever year of 1,157,000 net new subscribers in the United States, domestic DIRECTV revenues rose 45% to $1,604 million. The company's Latin American DIRECTV subsidiary, Galaxy Latin America(TM) (GLA(TM)), with 184,000 net new subscribers in 1998, more than doubled its revenues in 1998 to $141 million. Operating loss in 1998 improved to $228.1 million compared with an operating loss of $254.6 million in 1997. This was principally due to continued strong subscriber growth, and the resulting lower operating loss, in the domestic DIRECTV business--which more than offset higher GLA operating losses attributable to increased sales and marketing expenditures. The full-year 1998 operating loss for domestic DIRECTV was $100 million compared with $137 million in 1997. GLA's operating loss was $126 million in 1998 versus $116 million in 1997. - 29 - Fourth Quarter 1998. Fourth quarter revenues increased 36.5% to $567.6 million from $415.9 million in the fourth quarter of 1997. The increase resulted from continued strong subscriber growth and average monthly revenue per subscriber, as well as low subscriber churn rates. Domestic DIRECTV propelled this growth with quarterly revenues of $476 million, a 44% increase over last year's fourth quarter revenues of $330 million. With 400,000 net new subscribers in the fourth quarter, total DIRECTV subscribers grew to 4,458,000 in the United States as of December 31, 1998. GLA had fourth quarter revenues of $41 million compared with $28 million in 1997. With the addition of 61,000 net new subscribers in the fourth quarter, total DIRECTV subscribers in Latin America were 484,000 as of December 31, 1998. In addition, DIRECTV Japan had a total of 231,000 subscribers by the end of 1998. The segment operating loss in the fourth quarter was $94.5 million compared with an operating loss of $95.9 million in the fourth quarter of 1997. Continued strong subscriber growth resulted in lower fourth quarter 1998 operating losses for the domestic DIRECTV business ($53 million in 1998 compared with $62 million last year). These were offset by higher GLA fourth quarter operating losses ($42 million in 1998 compared with $27 million last year), which were primarily due to the increased cost of the new higher capacity Galaxy VIII-I satellite, which was deployed in spring of 1998, as well as increased subscriber acquisition costs. Satellite Services Full Year 1998. Full-year 1998 revenues increased 21.8% to $767.3 million compared with $629.9 million in 1997. The increase was primarily due to the May 1997 PanAmSat merger and increased operating lease revenues, which were partially offset by a decrease in sales and sales-type lease revenues. As a result of this revenue growth, operating profit in 1998 rose 8.6% to $321.6 million versus $296.2 million last year. Operating profit margin for the year declined to 41.9% from 47.0% in 1997, principally due to a full year of goodwill amortization associated with the PanAmSat merger. Fourth Quarter 1998. PanAmSat's fourth quarter 1998 revenues were $196.7 million compared with $197.9 million in the prior year. This slight change was due primarily to lower revenues on the PAS-6 satellite due to its reduction in usable capacity, which was partially offset by revenues associated with new service agreements, particularly in data and Internet-related services. PanAmSat's operating profit in the quarter was $82.4 million versus $93.3 million in 1997. Operating profit margin in the fourth quarter was 41.9% compared with 47.1% one year ago. The decrease was primarily attributable to increased operating costs associated with the expansion of PanAmSat's worldwide operations. Satellite Systems Full Year 1998. For the full year, revenues were $2,831.1 million, a 13.6% increase over 1997 revenues of $2,491.9 million. The increase was principally due to higher commercial satellite sales to customers such as ICO Global Communications, PanAmSat, Thuraya Satellite Telecommunications Company and Orion Asia Pacific Corporation. Driven by this revenue growth, operating profit in 1998 increased 8.8% to $246.3 million compared with $226.3 million last year. Operating profit margin declined to 8.7% from 9.1% last year primarily due to higher development costs for the geostationary mobile telephony and HS 702 satellite product lines. Fourth Quarter 1998. For the fourth quarter of 1998, revenues increased 13.4% to $843.1 million from revenues of $743.8 million for the same period in 1997. The increase was principally due to higher commercial satellite sales to customers such as ICO Global Communications, PanAmSat, DIRECTV and Thuraya Satellite Telecommunications Company. Operating profit in the quarter was $67.4 million compared with $66.6 million in the prior year. Operating profit margin in the quarter declined to 8.0% versus 9.0% last year. The decline in operating profit margin was primarily due to higher development costs related to the geostationary mobile telephony and HS 702 satellite product lines. - 30 - Network Systems Full Year 1998. Full-year revenues for Hughes Network Systems (HNS) were $1,076.7 million compared with $1,011.3 million in 1997. This improvement was driven primarily by the increase in sales of DIRECTV receiver equipment, which more than offset lower international sales of wireless telephone systems and private business networks, primarily in the Asia Pacific region. HNS operating profit in 1998 was $10.9 million versus $74.1 million last year. Operating profit margin declined to 1.0% from 7.3% in 1997. The decline in operating profit and operating profit margin was mostly due to lower international sales of wireless telephone systems and private business networks, and provisions for estimated losses related to uncollectible amounts due from certain wireless customers. Fourth Quarter 1998. Fourth quarter revenues for HNS were $402.6 million compared with $401.9 million in the same period last year. Increased sales of DIRECTV receiver equipment offset the impact from lower international sales of wireless telephone systems, predominantly in the Asia Pacific region. HNS operating profit in the quarter was $31.1 million compared with $68.0 million in the fourth quarter of 1997. Operating profit margin declined to 7.7% compared with 16.9% last year. The decline in operating profit and margin was principally a result of lower international sales of wireless systems and a provision for uncollectible amounts due from a wireless telephony customer. BALANCE SHEET The cash balance of $1,342.1 million at December 31, 1998, declined $1,441.7 million from December 31, 1997. This variance consisted primarily of two items: an additional investment of $851.4 million in PanAmSat in May 1998, which increased Hughes' ownership from 71.5% to 81.0%, and a $204.7 million cash payment to General Motors (GM) in connection with the finalization of the purchase price adjustment amount related to the transfer of Delco Electronics to GM in December 1997 as part of the Hughes Transactions (the Hughes Transactions also included the spin-off and subsequent merger of Hughes Defense with Raytheon Company). Hughes Electronics Corporation is a unit of General Motors Corp. The earnings of Hughes Electronics are used to calculate the earnings per share attributable to GMH (NYSE symbol) common stock. # # # - ---------------------- (1)Excludes the effects of purchase accounting adjustments related to General Motors' (GM) acquisition of Hughes 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. - 31 - STATEMENT OF INCOME AND AVAILABLE SEPARATE CONSOLIDATED NET INCOME (Dollars in Millions Except Per Share Amounts) Year Ended Fourth Quarter December 31, 1998 1997 1998 1997 - --------------------------------------------------------------------------- Revenues Product sales $1,032.8 $1,017.7 $3,360.3 $3,143.6 Direct broadcast, leasing and other services 757.8 676.9 2,603.6 1,984.7 - ---------------------------------------------------------------------------- Total Revenues 1,790.6 1,694.6 5,963.9 5,128.3 - ---------------------------------------------------------------------------- Operating Costs and Expenses Cost of products sold 844.9 781.9 2,627.3 2,493.3 Broadcast programming and other costs 375.5 313.9 1,175.7 912.3 Selling, general, and administrative expenses 404.8 405.9 1,457.0 1,119.9 Depreciation and amortization 124.6 101.1 433.8 296.4 Amortization of GM purchase accounting adjustments (1) 5.1 5.1 21.0 21.0 - ---------------------------------------------------------------------------- Total Operating Costs and Expenses 1,754.9 1,607.9 5,714.8 4,842.9 - ---------------------------------------------------------------------------- Operating Profit 35.7 86.7 249.1 285.4 Interest income 23.7 15.0 112.3 33.1 Interest expense (8.0) (32.9) (17.5) (91.0) Other, net (50.3) (61.9) (153.1) 390.7 - ---------------------------------------------------------------------------- Income from Continuing Operations Before Income Taxes, Minority Interests, Extraordinary Item and Cumulative Effect of Accounting Change 1.1 6.9 190.8 618.2 Income taxes (116.8) (7.8) (44.7) 236.7 Minority interests in net losses of subsidiaries 5.2 8.0 24.4 24.8 - ---------------------------------------------------------------------------- Income from continuing operations 123.1 22.7 259.9 406.3 Income from discontinued operations, net of taxes - - - 1.2 Gain on sale of discontinued operations, net of taxes - 62.8 - 62.8 - ---------------------------------------------------------------------------- Income before extraordinary item and cumulative effect of accounting change 123.1 85.5 259.9 470.3 Extraordinary item, net of taxes - (20.6) - (20.6) Cumulative effect of accounting change, net of taxes (3) - - (9.2) - - ---------------------------------------------------------------------------- Net Income 123.1 64.9 250.7 449.7 Adjustments to exclude the effect of GM purchase accounting adjustments (1) 5.1 5.1 21.0 21.0 - ---------------------------------------------------------------------------- Net Earnings Used for Computation of Available Separate Consolidated Net Income $128.2 $70.0 $271.7 $470.7 ============================================================================ Available Separate Consolidated Net Income (2) $33.9 $18.0 $71.5 $119.4 ============================================================================ Net Earnings Attributable to General Motors Class H Common Stock on a Per Share Basis (2) $0.32 $0.18 $0.68 $1.18 ============================================================================ (1)Relates to General Motors' purchase of Hughes 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. (3)Although Hughes adopted Statement of Position (SOP) 98-5, "Reporting on the Costs of Start-Up Activities" in the fourth quarter of 1998, the SOP requires restatement of Hughes' interim period results as if the SOP was adopted as of the beginning of the year. Accordingly, net income and earnings per share for the first quarter of 1998 have been restated to reflect reductions of $9.2 million and $0.02, respectively. The impact on the second and third quarters of 1998 were not significant. - 32 - BALANCE SHEET (Dollars in Millions) December 31, December 31, ASSETS 1998 1997 - ----------------------------------------------------------------------------- Current Assets Cash and cash equivalents $1,342.1 $2,783.8 Accounts and notes receivable 922.4 630.0 Contracts in process 783.5 575.6 Inventories 471.5 486.4 Prepaid expenses, deferred income taxes and other 326.9 297.3 - ---------------------------------------------------------------------------- Total Current Assets 3,846.4 4,773.1 Satellites - Net 3,197.5 2,643.4 Property - Net 1,059.2 889.7 Net Investment in Sales-type Leases 173.4 337.6 Intangible Assets - Net 3,552.2 2,954.8 Investments and Other Assets 1,606.3 1,132.4 - ---------------------------------------------------------------------------- Total Assets $13,435.0 $12,731.0 ============================================================================ LIABILITIES AND STOCKHOLDER'S EQUITY Current Liabilities Accounts payable $764.1 $472.8 Advances on contracts 291.8 209.8 Deferred revenues 43.8 77.8 Notes payable and current portion of long-term debt 156.1 - Accrued liabilities 753.7 689.4 - ---------------------------------------------------------------------------- Total Current Liabilities 2,009.5 1,449.8 Long-Term Debt 778.7 637.6 Deferred Gains on Sales and Leasebacks 121.5 191.9 Accrued Operating Leaseback Expense 56.0 100.2 Postretirement Benefits Other Than Pensions 150.7 154.8 Other Liabilities and Deferred Credits 811.1 706.4 Deferred Income Taxes 643.9 570.8 Minority Interests 481.7 607.8 Stockholder's Equity 8,381.9 8,311.7 - ---------------------------------------------------------------------------- Total Liabilities and Stockholder's Equity $13,435.0 $12,731.0 ============================================================================ Certain 1997 amounts have been reclassified to conform with the 1998 presentation. 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). - 33 - STATEMENT OF CASH FLOWS (Dollars in Millions) Years Ended December 31, ------------------------ 1998 1997 - ---------------------------------------------------------------------------- Cash Flows from Operating Activities Net income $250.7 $449.7 Adjustments to reconcile net income to net cash provided by continuing operations Income from discontinued operations - (1.2) Gain on sale of discontinued operations - (62.8) Extraordinary item, net of taxes - 20.6 Cumulative effect of accounting change, net of taxes 9.2 - Depreciation and amortization 433.8 296.4 Amortization of GM purchase accounting adjustments related to Hughes 21.0 21.0 Net gain on sale of investments and businesses sold (13.7) (489.7) Gross profit on sales-type leases - (33.6) Deferred income taxes and other 153.2 285.5 Change in other operating assets and liabilities Accounts and notes receivable (97.5) (195.2) Contracts in process (230.9) (174.2) Inventories 20.2 (60.7) Collections of principal on net investment in sales-type leases 40.6 22.0 Accounts payable 277.3 (184.1) Advances on contracts 82.0 (95.6) Deferred revenues (34.0) (65.0) Accrued liabilities 66.8 217.8 Deferred gains on sales and leasebacks (36.2) (42.9) Other (67.3) (102.5) - ----------------------------------------------------------------------------- Net Cash Provided by Continuing Operations 875.2 10.5 Net Cash Used by Discontinued Operations - (15.9) - ----------------------------------------------------------------------------- Net Cash Provided by (Used in) Operating Activities 875.2 (5.4) - ----------------------------------------------------------------------------- Cash Flows from Investing Activities Investment in companies, net of cash acquired (1,240.3) (1,798.8) Expenditures for property (343.6) (251.3) Increase in satellites (945.2) (633.5) Proceeds from sale of long-term investments - 242.0 Early buy-out of satellite under sale and leaseback (155.5) - Proceeds from sale of discontinued operations - 155.0 Proceeds from disposal of property 20.0 55.1 Proceeds from disposal of investments 12.4 - Proceeds from insurance claims 398.9 - - ----------------------------------------------------------------------------- Net Cash Used in Investing Activities (2,253.3) (2,231.5) - ----------------------------------------------------------------------------- Cash Flows from Financing Activities Long-term debt borrowings 1,165.2 2,383.3 Repayment of long-term debt (1,024.1) (2,851.9) Premium paid to retire debt - (34.4) Contributions from Parent Company - 1,124.2 Payment to General Motors for Delco post-closing price adjustment (204.7) - Capital proceeds resulting from Hughes transactions - 4,392.8 - ---------------------------------------------------------------------------- Net Cash (Used in) Provided by Financing Activities (63.6) 5,014.0 - ---------------------------------------------------------------------------- Net (decrease) increase in cash and cash equivalents (1,441.7) 2,777.1 Cash and cash equivalents at beginning of the year 2,783.8 6.7 - ---------------------------------------------------------------------------- Cash and cash equivalents at end of the year $1,342.1 $2,783.8 ============================================================================ Certain 1997 amounts have been reclassified to conform with the 1998 presentation. - 34 - PRO FORMA SELECTED SEGMENT DATA* (Dollars in Millions) Year Ended Fourth Quarter December 31, ----------------- ---------------- 1998 1997 1998 1997 - ------------------------------------------------------------------------- DIRECT-TO-HOME BROADCAST Total Revenues $567.6 $415.9 $1,816.1 $1,276.9 Operating Loss $(94.5) $(95.9) $(228.1) $(254.6) Depreciation and Amortization $25.1 $23.6 $102.3 $86.1 Capital Expenditures (1) $100.7 $51.4 $230.8 $105.6 - -------------------------------------------------------------------------- SATELLITE SERVICES Total Revenues $196.7 $197.9 $767.3 $629.9 Operating Profit $82.4 $93.3 $321.6 $296.2 Operating Profit Margin 41.9% 47.1% 41.9% 47.0% Depreciation and Amortization $61.9 $50.0 $231.7 $141.9 Capital Expenditures (2) $316.7 $82.0 $921.7 $625.7 - -------------------------------------------------------------------------- SATELLITE SYSTEMS Total Revenues $843.1 $743.8 $2,831.1 $2,491.9 Operating Profit $67.4 $66.6 $246.3 $226.3 Operating Profit Margin 8.0% 9.0% 8.7% 9.1% Depreciation and Amortization $14.1 $11.7 $49.2 $39.4 Capital Expenditures $49.2 $45.7 $99.7 $113.9 - -------------------------------------------------------------------------- NETWORK SYSTEMS Total Revenues $402.6 $401.9 $1,076.7 $1,011.3 Operating Profit $31.1 $68.0 $10.9 $74.1 Operating Profit Margin 7.7% 16.9% 1.0% 7.3% Depreciation and Amortization $11.9 $10.3 $41.7 $32.0 Capital Expenditures $13.6 $10.1 $40.0 $43.1 - -------------------------------------------------------------------------- ELIMINATIONS and OTHER Total Revenues $(219.4) $(64.9) $(527.3) $(281.7) Operating (Loss) $(45.6) $(40.2) $(80.6) $(35.6) Depreciation and Amortization $11.6 $5.5 $8.9 $(3.0) Capital Expenditures $21.8 $85.9 $136.3 $(61.7) - --------------------------------------------------------------------------- CONSOLIDATED TOTAL Total Revenues $1,790.6 $1,694.6 $5,963.9 $5,128.3 Operating Profit $40.8 $91.8 $270.1 $306.4 Depreciation and Amortization $124.6 $101.1 $433.8 $296.4 Capital Expenditures $502.0 $275.1 $1,428.5 $826.6 ========================================================================== * The Financial Statements reflect the application of purchase accounting adjustments related to GM's acquisition of Hughes. 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, are presented. (1)Includes expenditures related to satellites amounting to $32.2 million and $70.2 million in the fourth quarter and twelve month period of 1998. (2)Includes expenditures related to satellites amounting to $304.1 million, $78.8 million, $726.3 million and $606.1 million, respectively. Also included in the year ended December 31, 1998 amount is $155.5 million related to the early buy-out of satellite sale-leasebacks. - 35 - GMAC ANNOUNCES YEAR-END EARNINGS DETROIT -- GMAC (General Motors Acceptance Corporation) reported 1998 consolidated net income of $1,325 million, up 2% from the $1,301 million earned in 1997, GMAC President John D. Finnegan announced today. These earnings were the highest recorded by GMAC since 1991 and represent the fourth consecutive year of increased earnings. In 1998, net income from automotive financing operations totaled $984 million, up 8% from the $910 million earned in 1997. Earnings were higher due to retail asset growth, reduced credit losses and a lower effective income tax rate, partially offset by lower net interest margins and lower wholesale volume (due to the midsummer General Motors strike). GMAC Insurance Holdings Inc. generated net income of $226 million in 1998, up slightly from $224 million earned last year. GMAC Mortgage Group Inc. generated net income of $115 million in 1998, down from $167 million earned in 1997. Earnings were lower largely reflecting reduced mortgage asset values due to higher prepayment levels. Fourth quarter GMAC 1998 results totaled $298 million, up 7% from the $279 million earned in the final quarter of 1997. For the quarter, net income from automotive financing operations totaled $200 million, up 8% from $186 million earned a year ago. GMAC Insurance's earnings for the fourth quarter 1998 totaled $38 million, compared to $54 million earned in the same quarter one year ago. GMAC Mortgage Group earnings were $60 million, up 52% from one year ago. - 36 - 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 January 20, 1999 ----------------- By s/Peter R. Bible ------------------------------- (Peter R. Bible, Chief Accounting Officer) - 37 - -----END PRIVACY-ENHANCED MESSAGE-----