1st Quarter Results
General Motors Corp (IRS)
26 June 2001
Contact: Mark A.Tanner
(313)665-3146
Catherine Dunsby
(212)418-6385
GM EARNS $225 MILLION, OR $0.50 PER SHARE, IN FIRST QUARTER
DETROIT - General Motors Corp. (NYSE: GM) today reported that it earned $225
million, or $0.50 diluted earnings per share, in the first quarter of 2001
-excluding special items - on revenues of $42.6 billion. The results exclude
the $12 million, or $0.03 per share, favorable effect of the initial adoption of
an accounting change (SFAS No. 133) relating to the treatment of derivatives.
Including the accounting change, GM's first-quarter 2001 income totaled $237
million, or $0.53 per share.
GM's first-quarter performance, although better than expected, was down
significantly from the record $2.80 per share in the first quarter of 2000 on
net income of $1.8 billion and revenues totaling $46.9 billion.
GM financial results described throughout the remainder of this release exclude
the special item relating to SFAS No. 133 unless otherwise noted.
'Our first-quarter performance was better than expected, considering
significantly reduced production volumes in North America,' said GM Chairman
Jack Smith. 'While the economic and competitive environment is challenging, we
remain focused on our key customer and business priorities.'
GM President and Chief Executive Officer Rick Wagoner said, 'The entire GM
organization is moving fast to bring new products to market, grow our business,
and improve our financial performance. We are committed to doing even better by
aggressively attacking costs while we focus on bringing innovative new products
and services to markets around the world.'
Strong first-quarter earnings at General Motors Acceptance Corp. (GMAC) and
lower costs in the North American automotive business only partially offset the
effect of lower vehicle sales and intense pricing pressures in North America and
Europe.
GMAC earnings of $431 million in the first quarter reflected lower interest
rates and increased wholesale business, partially offset by weaker
vehicle-residual values. Mortgage operations also continued to perform very
strongly in this period.
The significant decline in automotive earnings versus last year's first quarter
are attributable primarily to North America and Europe. GM North America's
(GMNA) income was $120 million in the first quarter of 2001, down more than $1.1
billion from the same period last year, as net price fell 1.0 percent and
vehicle sales to dealers fell by more than 300,000 units, reflecting significant
first-quarter production cuts designed to reduce dealer inventories.
'Continued progress in reducing costs helped offset the nearly 20-percent
reduction in North American production volume. Our dealer inventory levels are
much improved compared with levels at the end of last year,' Wagoner said. 'Our
U.S. and North American market share was stable in the first quarter and up from
the fourth quarter of 2000. While the North American industry volume is down
compared with the record highs of last year, we are still seeing a lot of
underlying strength in demand. As we continue to roll out new products and
expand industry-leading services such as OnStar, we are focused on growing our
market share and our revenue base.'
GM Europe (GME) lost $86 million during the first quarter, down significantly
from a profit of $221 million in the same quarter last year. Results were
primarily affected by lower volume, continued pricing pressures, particularly in
the United Kingdom, a shift in demand to smaller, lower-profit vehicles, and
unfavorable country mix. While vehicle deliveries were down in line with the
overall industry, GME's market share increased slightly during the quarter, and
Opel/Vauxhall was the number-one brand for passenger-car sales in Western and
Central Europe in the month of March. 'We've taken tough actions to restructure
our European operations, but the market is proving to be weaker than expected.
We are focusing intensely on our new product introductions to strengthen our
brands, and we are pushing even harder to reduce costs to meet the pricing
challenges in this demanding market,' Wagoner said.
GM's Latin America/Africa/Mid-East (GMLAAM) region increased its profitability
to $6 million in the first quarter of 2001, primarily from improved volume. The
Asia Pacific (GMAP) region had a loss of $20 million in the first quarter, which
was more than accounted for by losses at GM's affiliate Isuzu.
Hughes' net loss of $96 million in the first quarter of 2001 was related
primarily to the continued growth of DIRECTV. Hughes added 441,000 net new
DIRECTV subscribers in the first quarter, bringing the total subscriber base to
11.2 million.
LOOKING AHEAD
General Motors continues to expect that total U.S. vehicle sales in
calendar-year 2001 will be about 16.5 million units.
While there are considerable uncertainties in the economic environment, the
present consensus among automotive analysts that GM is expected to earn
approximately $0.95 per share for the second quarter of 2001 is consistent with
GM's internal expectations.
'We have a number of major vehicle introductions this year in key market
segments throughout the world as we continue to strengthen our global
portfolio,' Wagoner said.
Key new products in North America include the Chevrolet Avalanche; the Chevrolet
Trailblazer, GMC Envoy and Oldsmobile Bravada midsize sport utilities; the
Cadillac Escalade and Escalade EXT; Buick Rendezvous, and the Saturn VUE.
In Europe, the new Corsa and Zafira offerings, Astra convertible, Speedster,
Vivaro commercial van, and improved availability of diesel engines are important
for building market momentum.
In Latin America, the Chevrolet Zafira and Grand Vitara are new entries, joining
the Celta, which was introduced last year.
The Buick Sail, the third distinct model from the Shanghai GM joint venture, and
the Chevrolet Blazer and the S-10 crewcab pickups, which will be produced by the
Jinbei GM joint venture, are important entries in this key growth market.
The Zafira was recently introduced in Asia and is produced at GM's Thailand
plant. GM will begin production in September of a small Chevrolet 4X4 lifestyle
vehicle at Suzuki's Kosai plant in Japan. That vehicle will initially be sold in
Japan and Australia.
£ £ £
In this press release and related comments by General Motors management, our use
of the words 'expect,' 'anticipate,' 'estimate,' 'forecast,' 'objective,'
'plan,' 'goal' and similar expressions is intended to identify forward looking
statements. While these statements represent our current judgment on what the
future may hold, and we believe these judgments are reasonable, actual results
may differ materially due to numerous important factors that are described in
GM's most recent report on SEC Form 10-K (at page 11-10,11) which may be revised
or supplemented in subsequent reports on SEC Forms 10-Q and 8-K. Such factors
include, among others, the following: changes in economic conditions, currency
exchange rates or political stability; shortages of fuel, labor strikes or work
stoppages; market acceptance of the corporation's new products; significant
changes in the competitive environment; changes in laws, regulations and tax
rates; and, the ability of the corporation to achieve reductions in cost and
employment levels to realize production efficiencies and implement capital
expenditures at levels and times planned by management.
- 4 -
General Motors Corporation
Adjusted Corporate Financial Results
First Quarter
-------------
2001(1) 2000
---- ----
Total net sales and
revenues ($Mil's) $42,623 $46,858
Consolidated net income ($Mil's) $225 $1,783
Net margin from consolidated
net income 0.5% 3.8%
GM $1-2/3 par value earnings
per share
Basic EPS $0.51 $2.88
Diluted EPS $0.50 $2.80
GM Class H earnings per share (2)
Basic EPS $(0.09) $(0.08)
Diluted EPS $(0.09) $(0.08)
Return on net assets (RONA) for
continuing operations
excluding Hughes 5.1% 15.9%
Earnings attributable to GM $1-2/3 par
value ($Mil's)
Consolidated net income $225 $1,783
Preferred dividends (28) (29)
Losses attributable to GM Class H 81 32
--- -----
Total earnings attributable to
GM $1-2/3 par value $278 $1,786
=== =====
GM $1-2/3 par value average shares
outstanding (Mil's)
Basic shares 548 620
Diluted shares 554 637
Cash dividends per share of
common stocks
GM $1-2/3 par value $0.50 $0.50
GM Class H - -
Book value per share of common
stocks at March 31
GM $1-2/3 par value $38.23 $29.42
GM Class H (2) $7.65 $5.88
Total cash at March 31 ($Bil's) (3) $10.9 $13.4
Automotive, Communications Services,
and Other Operations ($Mil's)
Depreciation $1,031 $990
Amortization of special tools 565 654
Amortization of intangible assets 73 71
----- -----
Total $1,669 $1,715
===== =====
See footnotes on page 8.
- 5 -
General Motors Corporation
Adjusted Segment Financial Results
First Quarter
-------------
2001(1) 2000
---- ----
(Dollars in millions)
Total net sales and revenues
GMNA $25,106 $29,244
GME 6,268 6,834
GMLAAM 1,395 1,390
GMAP 1,010 863
------ ------
Total GMA 33,779 38,331
Hughes 1,917 2,118
Other 468 746
------ ------
Total ACO 36,164 41,195
------ ------
GMAC 6,377 5,621
Other Financing 82 42
------ ------
Total FIO 6,459 5,663
------ ------
Consolidated net sales
and revenues $42,623 $46,858
====== ======
Pre-tax income (loss)
GMNA $216 $1,923
GME (153) 349
GMLAAM 8 (36)
GMAP - 27
--- -----
Total GMA 71 2,263
Hughes (4) (152) (208)
Other (146) (43)
--- -----
Total ACO (227) 2,012
--- -----
GMAC 718 632
Other Financing (14) (12)
---- -----
Total FIO 704 620
---- -----
Consolidated pre-tax income $477 $2,632
=== =====
Net income (loss)
GMNA $120 $1,289
GME (86) 221
GMLAAM 6 1
GMAP (20) 7
-- -----
Total GMA 20 1,518
Hughes (4)(5) (96) (77)
Other (119) (36)
--- -----
Total ACO (195) 1,405
--- -----
GMAC 431 397
Other Financing (11) (19)
--- -----
Total FIO 420 378
--- -----
Consolidated net income $225 $1,783
=== =====
See footnotes on page 8.
- 6 -
General Motors Corporation
Supplementary Adjusted Segment Financial Results
First Quarter
-------------
2001(1) 2000
---- ----
(Dollars in millions)
Income tax expense (benefit)
GMNA $65 $615
GME (64) 130
GMLAAM 2 (23)
GMAP (2) 10
-- ---
Total GMA $1 $732
= ===
Equity income (loss) and
minority interests
GMNA $(31) $(19)
GME 3 2
GMLAAM - 14
GMAP (22) (10)
-- --
Total GMA $(50) $(13)
=== ===
Effective income tax rate
GMNA 30.1% 32.0%
GME 41.8% 37.2%
GMLAAM 25.0% 63.9%
GMAP N/A 37.0%
Net margins
GMNA 0.5% 4.4%
GME (1.4%) 3.2%
GMLAAM 0.4% 0.1%
GMAP (2.0%) 0.8%
Total GMA 0.1% 4.0%
Hughes (5.0%) (3.6%)
Total ACO (0.5%) 3.4%
GMAC 6.8% 7.1%
Consolidated net income 0.5% 3.8%
See footnotes on page 8.
- 7 -
General Motors Corporation
Operating Statistics
First Quarter
-------------
2001 2000
---- ----
(units in thousands)
Worldwide Wholesale Sales
United States - Cars 507 622
United States - Trucks 567 674
----- -----
Total United States 1,074 1,296
Canada, Mexico, and Other 151 193
----- -----
Total GMNA 1,225 1,489
GME 468 499
GMLAAM 159 135
GMAP 139 116
----- -----
Total Worldwide 1,991 2,239
===== =====
Vehicle Unit Deliveries
Chevrolet - Cars 232 233
Chevrolet - Trucks 422 453
Pontiac 138 155
GMC 125 139
Buick 86 103
Oldsmobile 77 77
Saturn 66 64
Cadillac 38 52
Other 12 7
----- -----
Total United States 1,196 1,283
Canada, Mexico, and Other 164 157
----- -----
Total GMNA 1,360 1,440
GME 496 522
GMLAAM 163 138
GMAP 125 111
----- -----
Total Worldwide 2,144 2,211
===== =====
Market Share
United States - Cars 28.9% 28.9%
United States - Trucks 28.0% 28.2%
Total United States 28.4% 28.6%
Total North America 28.0% 28.1%
Total Europe 9.6% 9.4%
Latin America (6) 21.5% 19.5%
Asia and Pacific 3.8% 3.3%
Total Worldwide 14.9% 14.8%
U.S. Retail/Fleet Mix
% Fleet Sales - Cars 33.0% 29.0%
% Fleet Sales - Trucks 14.0% 15.1%
Total Vehicles 23.6% 22.1%
Retail Lease as % of Retail Sales
Total Smartlease and Smartbuy 16.5% 28.5%
Days Supply of Inventory at March 31
United States - Cars 75 82
United States - Trucks 100 86
Capacity Utilization
U.S. and Canada (2 shift rated) 69.6% 87.9%
GMNA Net Price (1.0%) (0.7%)
See footnotes on page 8.
- 8 -
General Motors Corporation
Operating Statistics
First Quarter
-------------
2001 2000
---- ----
GMAC's U.S. Cost of Borrowing 6.36% 6.32%
Current Debt Spreads Over U.S.
Treasuries
2 Year 145 bp 79 bp
5 Year 180 bp 122 bp
10 Year 210 bp 169 bp
Worldwide Employment at
March 31 (in 000's)
United States Hourly 130 135
United States Salary 43 44
--- ---
Total United States 173 179
Canada, Mexico, and Other 35 35
--- ---
GMNA 208 214
GME 79 90
GMLAAM 23 23
GMAP 11 11
Hughes 10 18
GMAC 28 26
Other 13 13
--- ---
Total 372 395
=== ===
Worldwide Payrolls ($Mil's) $5,002 $5,543
Footnotes:
---------
(1) The Q1 2001 adjusted amounts represent the reported amounts less the net
impact from initially adopting SFAS No. 133, Accounting for Derivatives and
Hedging Activities as follows ($Mil's):
Income (Expense)
Pre-Tax After-Tax
------- ---------
GMNA $(23) $(14)
GME 4 2
GMLAAM (2) (1)
GMAP (1) (1)
-- --
Total GMA (22) (14)
Hughes (13) (8)
-- --
Total ACO (35) (22)
GMAC 62 34
-- --
Total Consolidated $27 $12
== ==
(2) The 2000 GM Class H common stock earnings per share and book value per
share amounts have been adjusted to reflect the three-for-one stock split, in
the form of a 200% stock dividend, paid on June 30, 2000.
(3) Represents total cash for Automotive, Communications Services, and Other
Operations which includes cash and marketable securities, as well as $3.0
billion invested in short-term fixed income securities of the Corporation's
Voluntary Employees' Beneficiary Association Trust.
(4) Excludes the effects of purchase accounting adjustments related to
General Motors' acquisition of Hughes in 1985.
(5) Excludes Hughes Series A Preferred Stock dividends payable to General
Motors.
(6) Latin America excludes the Middle East and Africa.
- 9 -
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended
March 31,
2001 2000
(dollars in millions
except per share amounts)
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
Total net sales and revenues $42,615 $46,858
Cost of sales and other expenses 34,510 37,141
Selling, general, and administrative expenses 5,390 4,857
Interest expense 2,211 2,228
Total costs and expenses 42,111 44,226
Income before income taxes and minority interests 504 2,632
Income tax expense 208 783
Equity income/(loss) and minority interests (59) (66)
Net income 237 1,783
Dividends on preference stocks (28) (29)
Earnings attributable to common stocks $209 $1,754
Basic earnings (losses) per share attributable to common stocks
Earnings per share
attributable to $1-2/3 par value $0.54 $2.88
Earnings per share
attributable to Class H $(0.10) $(0.08)
Earnings (losses) per share attributable to common stocks
assuming dilution
Earnings per share
attributable to $1-2/3 par value $0.53 $2.80
Earnings per share
attributable to Class H $(0.10) $(0.08)
- 10 -
CONSOLIDATED STATEMENTS OF INCOME - concluded
(Unaudited)
Three Months Ended
March 31,
2001 2000
(dollars in millions)
AUTOMOTIVE, COMMUNICATIONS SERVICES,
AND OTHER OPERATIONS
Total net sales and revenues $36,164 $41,195
Cost of sales and other expenses 32,494 35,321
Selling, general, and administrative expenses 3,639 3,507
Total costs and expenses 36,133 38,828
Interest expense 162 216
Net expense from transactions with
Financing and Insurance Operations 131 139
Income/(loss) before income taxes
and minority interests (262) 2,012
Income tax (benefit) expense (81) 542
Equity income/(loss) and minority interests (36) (65)
Net income/(loss) - Automotive,
Communications Services,
and Other Operations $(217) $1,405
Three Months Ended
March 31,
2001 2000
(dollars in millions)
FINANCING AND INSURANCE OPERATIONS
Total revenues $6,451 $5,663
Interest expense 2,049 2,012
Depreciation and amortization expense 1,509 1,523
Operating and other expenses 1,717 1,306
Provisions for financing and insurance losses 541 341
Total costs and expenses 5,816 5,182
Net income from transactions with Automotive,
Communications Services, and Other Operations (131) (139)
Income before income taxes and minority interests 766 620
Income tax expense 289 241
Equity income/(loss) and minority interests (23) (1)
Net income - Financing
and Insurance Operations $454 $378
- 11 -
CONSOLIDATED BALANCE SHEETS
Mar. 31, 2001 Dec. 31, Mar. 31, 2000
GENERAL MOTORS CORPORATION (Unaudited) 2000 (Unaudited)
AND SUBSIDIARIES (dollars in millions)
ASSETS
Automotive, Communications Services,
and Other Operations
Cash and cash equivalents $7,445 $9,119 $8,497
Marketable securities 455 1,161 1,948
Total cash and marketable securities 7,900 10,280 10,445
Accounts and notes receivable (less allowances) 6,264 5,835 5,552
Inventories (less allowances) 11,885 10,945 12,028
Equipment on operating leases
(less accumulated depreciation) 5,365 5,699 5,963
Deferred income taxes and other current assets 8,421 8,388 9,491
Total current assets 39,835 41,147 43,479
Equity in net assets of
nonconsolidated associates 4,271 3,497 2,158
Property - net 34,081 33,977 33,177
Intangible assets - net 7,563 7,622 8,808
Deferred income taxes 14,806 14,870 15,100
Other assets 31,290 32,243 25,372
Total Automotive, Communications Services,
and Other Operations assets 131,846 133,356 128,094
Financing and Insurance Operations
Cash and cash equivalents 6,209 1,165 910
Investments in securities 10,107 9,595 9,016
Finance receivables - net 87,845 92,415 84,581
Investment in leases and other receivables 36,386 36,752 37,350
Other assets 29,041 27,846 21,243
Net receivable from Automotive, Communications
Services, and Other Operations 1,380 1,971 1,407
Total Financing and
Insurance Operations assets 170,968 169,744 154,507
Total assets $302,814 $303,100 $282,601
LIABILITIES AND STOCKHOLDERS' EQUITY
Automotive, Communications Services,
and Other Operations
Accounts payable (principally trade) $18,587 $18,309 $17,649
Loans payable 2,052 2,208 2,041
Accrued expenses 33,861 33,252 33,214
Net payable to Financing
and Insurance Operations 1,380 1,971 1,407
Total current liabilities 55,880 55,740 54,311
Long-term debt 8,510 7,410 8,587
Postretirement benefits other than pensions 33,416 34,306 34,532
Pensions 3,386 3,480 3,395
Other liabilities and deferred income taxes 15,109 15,768 17,214
Total Automotive, Communications Services,
and Other Operations liabilities 116,301 116,704 118,039
Financing and Insurance Operations
Accounts payable 6,669 7,416 4,616
Debt 135,334 135,037 124,492
Other liabilities and deferred income taxes 14,366 12,922 12,202
Total Financing and
Insurance Operations liabilities 156,369 155,375 141,310
Minority interests 702 707 621
General Motors - obligated mandatorily
redeemable preferred securities of
subsidiary trusts holding solely junior
subordinated debentures of General Motors
Series D - - 79
Series G 139 139 139
Stockholders' equity
$1-2/3 par value common stock
(issued, 548,924,480; 548,181,757;
and 621,602,927 shares) 915 914 1,036
Class H common stock
(issued, 875,728,294; 875,286,559;
and 415,537,836 shares) 88 88 14
Capital surplus (principally additional
paid-in capital) 21,105 21,020 14,031
Retained earnings 10,053 10,119 8,404
Subtotal 32,161 32,141 23,485
Accumulated foreign currency
translation adjustments (2,992) (2,502) (2,115)
Net loss on derivatives (121) - -
Net unrealized gains on securities 300 581 1,164
Minimum pension liability adjustment (45) (45) (121)
Accumulated other comprehensive loss (2,858) (1,966) (1,072)
Total stockholders' equity 29,303 30,175 22,413
Total liabilities and stockholders' equity $302,814 $303,100 $282,601
- 12 -
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended March 31,
2001 2000
Automotive, Financing Automotive, Financing
Comm.Serv. and Comm.Serv. and
and Other Insurance and Other Insurance
(dollars in millions)
Net cash provided by
(used in) operating
activities $873 $(153) $2,449 $3,655
Cash flows from investing
activities
Expenditures for property (2,078) (19) (1,702) (103)
Investments in marketable
securities - acquisitions (279) (7,225) (970) (5,858)
Investments in marketable
securities - liquidations 985 6,713 720 6,261
Mortgage servicing rights
- acquisitions - (447) - (178)
Mortgage servicing rights
- liquidations - - - -
Finance receivables
- acquisitions - (50,804) - (51,978)
Finance receivables
- liquidations - 34,521 - 35,252
Proceeds from sales of
finance receivables - 19,968 - 12,248
Operating leases
- acquisitions (1,748) (2,850) (2,174) (4,481)
Operating leases
- liquidations 1,925 2,481 1,763 1,739
Investments in companies,
net of cash acquired (548) (116) (154) -
Net investing activity with
Financing and
Insurance Operations - - (998) -
Other (824) 503 (291) 437
Net cash (used in) provided
by investing activities (2,567) 2,725 (3,806) (6,661)
Cash flows from financing
activities
Net decrease in loans
payable (156) (16,857) (25) (564)
Long-term debt - borrowings 2,041 22,518 1,186 7,754
Long-term debt - repayments (947) (3,770) (1,033) (4,577)
Net financing activity with
Automotive, Communications
Services, and Other Operations - - - 998
Repurchases of common stocks - - (132) -
Proceeds from issuing
common stocks 33 - 156 -
Cash dividends paid to
stockholders (301) - (339) -
Net cash provided by
(used in) financing
activities 670 1,891 (187) 3,611
Effect of exchange rate
changes on cash and
cash equivalents (59) (10) (95) (1)
Net transactions with
Automotive/Financing
Operations (591) 591 406 (406)
Net (decrease) increase in
cash and cash equivalents (1,674) 5,044 (1,233) 198
Cash and cash equivalents at
beginning of the period 9,119 1,165 9,730 712
Cash and cash equivalents
at end of the period $7,445 $6,209 $8,497 $910
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