GM Finalizes First-Quarter Results

GM Finalizes First-Quarter Financial Results

    *  Q1 Reported Net Income Revised to $445 million, or $0.78 Per Share
    *  GM North America Adjusted Loss Reduced to $462 Million
    *  Health-Care Settlement Costs to Be Recognized Over 7 Years

    DETROIT, May 9  -- General Motors Corp. (NYSE: GM) today announced that it had finalized its first-
quarter 2006 financial results to reflect final determination of the first-quarter accounting treatment for the 
recently approved retiree health-care settlement agreement and other adjustments.  
    As a result, GM earned $445 million, or $0.78 per diluted share of common stock, in the first quarter.  
These results compare with a preliminary loss for the period of $323 million, or $0.57 a share.  GM reported 
a loss of $1.3 billion, or $2.22 per share in the first quarter of 2005.  
    The difference between the preliminary and final results primarily reflects a change in the way GM will 
account for the health-care settlement agreement between GM and the United Auto Workers union.  As part 
of the agreement, GM will make contributions to a new independent Voluntary Employees' Beneficiary 
Association trust (VEBA) of $1 billion in each of 2006, 2007, and 2011.  GM will also make supplemental 
contributions to this VEBA related to events like profit-sharing payments, wage deferrals from active 
employees, and increases in the value of GM stock.  
    After discussions with the U.S. Securities and Exchange Commission on the proper accounting treatment 
for the settlement agreement, GM has determined that it will recognize the impact of the contributions over 
approximately 7 years, beginning in the third quarter of 2006 when the health-care changes are scheduled to 
take effect.  
    Excluding special items, GM reported adjusted net income of $184 million, or $0.32 per diluted share in 
the first quarter of 2006, compared with a preliminary adjusted loss for the period of $529 million, or $0.94 
per share.  In the year-ago quarter, GM reported an adjusted loss before special items of $988 million, or 
$1.75 per share. 
    The following table describes the effects of the accounting treatment, and the adjustment in GMAC's 
profitability as noted below, on adjusted net income, which excludes special items.

                 GM First Quarter Adjusted Net Income (loss)
               (Dollars in millions except per share amounts)

                        Preliminary Q1-2006    Final Q1-2006     Q1-2005

 GMNA                     $(946)              $(462)        $(1,513)
 Total Automotive          (721)               (237)         (1,504)
 Other                     (413)               (216)           (212)
 GMAC                       605                 637             728
 Total GM                 $(529)               $184           $(988)
 Earnings (loss) per share 
  - diluted              $(0.94)              $0.32          $(1.75)

    The reported results for the first quarter of 2006 include special items totaling a favorable $261 million 
after tax, or $0.46 per diluted share.  These results include a gain of $372 million from the sale of most of 
GM's stake in Suzuki.  This gain was increased by $55 million to reflect finalization of the foreign exchange 
treatment for the transaction.  The gain was partially offset by restructuring charges totaling $111 million, 
or $0.19 per share, at GM North America, GM Europe and GM Latin America/Africa/Middle East.  
    GM is also revising its first-quarter financial results for General Motors Acceptance Corporation (GMAC) 
to reflect finalization of the tax effect of the sale of GMAC Commercial Mortgage, which closed late in March.  
As a result, GMAC earned $637 million in the first quarter of 2006, compared to the previously reported 
preliminary first-quarter net income of $605 million.  GMAC earned $728 million in the year-ago period.
    GM remains committed to reducing structural costs in North America by $7 billion on a running rate 
basis by the end of 2006.  Running rate basis refers to the average annualized cost savings into the 
foreseeable future anticipated to result from cost savings actions when fully implemented.  
    Due to the change in the accounting treatment of the UAW health-care settlement, GM now expects 
approximately $4.5 billion of structural cost reductions to be realized during calendar year 2006, compared 
with $4 billion previously estimated for calendar year 2006. 
    GM plans to file a complete set of revised financial results when it files its 10-Q report with the 
Securities and Exchange Commission later this week.

    Forward-Looking Statements
    In this press release and in related comments by General Motors' and GMAC's management, the use of 
the words "expect," "anticipate," "intend," "commit," "may," "would," "could," "should," or the negative of any 
of those words or similar expressions is intended to identify forward-looking statements. Other than 
statements of historical fact, all statements in this press release and in related comments, including without 
limitation, statements about future events and financial performance, are forward-looking statements that 
involve certain risks and uncertainties. While these statements represent our current judgment on possible 
future events, and we believe that when we made these judgments they were reasonable, these statements 
are not guarantees of any events or financial results, and GM's actual results may differ materially due to 
numerous important factors that may be revised or supplemented in subsequent reports on SEC Forms 10-K, 
10-Q and 8-K. 
    Such factors include, among others, the following: the ability of GM to realize production efficiencies, to 
achieve reductions in costs as a result of the turnaround restructuring, health care cost reductions and an 
accelerated attrition program and to implement capital expenditures at levels and times planned by 
management; the pace of product introductions; market acceptance of the Corporation's new products; 
significant changes in the competitive environment and the effect of competition in the Corporation's 
markets, including on GM's pricing policies; our ability to maintain adequate liquidity and financing sources 
and an appropriate level of debt; costs and risks associated with litigation; changes in our accounting 
principles, or their application or interpretation, and our ability to make estimates and the assumptions 
underlying the estimates, which could result in an impact on earnings; changes in relations with unions and 
employees/retirees and the legal interpretations of the agreements with those unions with regard to 
employees/retirees; shortages of and price increases for fuel; and changes in economic conditions, commodity 
prices, currency exchange rates or political stability in the markets in which we operate. 
    In addition, GMAC's actual results may differ materially due to numerous important factors that are 
described in GMAC's most recent report on SEC Form 10-K, which may be revised or supplemented in 
subsequent reports on SEC Forms  10-Q and 8-K. Such factors include, among others, the following: the 
ability of GM to complete the sale of a 51-percent controlling interest in GMAC; significant changes in the 
competitive environment and the effect of competition in GMAC's and GM's markets, including on GMAC's 
and GM's pricing policies; and GMAC's ability to maintain adequate financing sources and an appropriate 
level of debt. 
    Investors are cautioned not to place undue reliance on forward-looking statements. GM undertakes no 
obligation to update publicly or otherwise revise any forward-looking statements, whether as a result of new 
information, future events or other such factors that affect the subject of these statements, except where 
expressly required by law.


SOURCE  General Motors Corporation
    -0-                             05/09/2006 P
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                http://www.gm.com /
    (GM)


 
 
 
 


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