General Motors Company · NYSE:GM
General Motors — Q3 2006 Earnings Presentation
35 slides from General Motors's earnings presentation, Oct 25, 2006
Slide 1: Preliminary 2006 Third Quarter Results
Preliminary 2006 Third Quarter Results
Slide 2: Forward Looking Statements
Forward Looking Statements 1 In this chart presentation and in related comments by General Motors' management, we will use words like "expect," "anticipate," "estimate," "forecast," "initiative," "objective," "plan," "goal," "project," "outlook," "priorities," "target," "intend," "evaluate," "pursue
Slide 3: 2006 Third Quarter Highlights
2006 Third Quarter Highlights Record Q3 revenue of $48.8B GAAP EPS ($0.20), ($115) million Net Loss represents a $1,549 million improvement vs. Q3 '05 reported results Adjusted EPS $0.93, $529 million Adjusted Net Income represents $1,643 million improvement vs. Q3 '05 Adjusted results GMNA improved
Slide 4: Third Quarter Adjusted Results - Net Income
Third Quarter Adjusted Results - Net Income 3 Refer to Supplemental Chart 1 for reconciliation to GAAP figures Refer to Supplemental Chart 1 for reconciliation to GAAP figures
Slide 5: Corporate Other Results
Corporate Other Results 4 Favorable results in Corporate Other largely driven by reduced legacy costs and significant tax benefits realized in the quarter Legacy costs reduced about $120 million after-tax Numerous discrete tax items totaling about $340 million after-tax Tax items included in adjuste
Slide 6: Third Quarter Adjustments to Income
Third Quarter Adjustments to Income 5 Exclusion of special items useful for: - Management to measure operations - Comparisons between reporting periods - Investors to measure and assess company performance - Investors to measure and assess company performance - Investors to measure and assess compan
Slide 7: GMAC Impairment / Loss on Sale
GMAC Impairment / Loss on Sale 6 $373 million after-tax charge largely comprised of GMAC goodwill impairment related to commercial finance business Q4 2005 charge to partially impair goodwill related to this business; GMAC has determined all remaining goodwill should also be impaired Results in Q3 c
Slide 8: Delphi Charge
Delphi Charge 7 In Q4 2005, GM estimated its contingent liability related to the Delphi bankruptcy ranged from $5.5B - $12B (pre-tax), with amounts near the lower end of the range considered more likely Charge of $5.5B (pre-tax) taken at that time Based on current status of discussions, incremental
Slide 9: North America Third Quarter Adjusted Results
North America Third Quarter Adjusted Results 8 8
Slide 10: GMNA Vehicle Revenue Per Unit
GMNA Vehicle Revenue Per Unit Calendar Year Third Quarter Net Revenue Gross Revenue Less Sales Incentives Memo: Vehicle Revenue per Unit excludes such items as impact of daily rental acctg., Service Parts, other outside sales and OnStar GAAP Rev/Unit 20,899 20,321 20,777 20,875 20,449 21,131 20,557
Slide 11: North America Adjusted Net Income Q3 and YTD 2005 vs. 2006
North America Adjusted Net Income Q3 and YTD 2005 vs. Q3 and YTD 2006 Q3 YTD Q3 2005 Net Income ($1.7)B ($4.3)B Volume / Mix (0.4) 0.2 Other Contribution Margin (0.1) 0.3 Pension / OPEB 1.0 1.3 Capacity / Attrition / Other 0.8 1.6 Q3 2006 Net Income ($0.4)B ($0.9)B 10
Slide 12: GMNA Contribution Margin Q3 2005 To Q3 2006
GMNA Contribution Margin Q3 2005 To Q3 2006 11 Launch vehicles delivering net favorable contribution margins Favorable pricing due to market reception of new products offsetting increases in contribution costs related to: Additional content to maintain/improve competitive position Increasing costs o
Slide 13: Structural Cost Reduction in North America
Structural Cost Reduction in North America* 2006 CY 12 * Includes North American costs accounted for in Corp Sector 2006 CY pre-tax Savings of $6B ($ Billion) 1H06 about $1.5B 2H06 about $4.5B 2H06 about $4.5B Average Annual Run-rate of $9B by end of 2006 Q1 Q2 Q3 Q4
Slide 14: Europe Third Quarter Adjusted Results
Europe Third Quarter Adjusted Results 13 13
Slide 15: Latin America, Africa & Middle East Third Quarter Adjusted Results
Latin America, Africa & Middle East Third Quarter Adjusted Results 14 14
Slide 16: Asia Pacific Third Quarter Adjusted Results
Asia Pacific Third Quarter Adjusted Results 15 Q3 2006 Results reflect full consolidation of GM-DAT revenue and income. Q3 2006 Results reflect full consolidation of GM-DAT revenue and income.
Slide 17: GMAC Third Quarter Adjusted Results
GMAC Third Quarter Adjusted Results 16 16
Slide 18: GMAC Third Quarter Operating Review
GMAC Third Quarter Operating Review Auto Finance net income essentially flat year-over-year Operating performance trending well despite some weakness in credit, offset by over $130 million after-tax expense related to debt tender offer ResCap year-over-year net income decline of over $200 million Ma
Slide 19: GMAC Global Liquidity
GMAC Global Liquidity GMAC continues to have access to large liquidity cushion Cash balance of $14.1 billion* at September 30, 2006 Prudently reducing high excess levels of cash to more moderate levels as access to funding improves and borrowing spreads continue to narrow Completed successful debt t
Slide 20: GMAC Outlook
GMAC Outlook Overall 2006 outlook is mixed with expected strong results for automotive finance and insurance ResCap results continue to be impacted by softness in the mortgage market which has resulted in both margin and credit pressures Making good operational progress to prepare for stand-alone GM
Slide 21: GMAC Transaction Closing Status
GMAC Transaction Closing Status A number of key milestones required by Closing have already been achieved: Antitrust approval from U.S. FTC and European Union PBGC agreement acceptable to Consortium Significant progress in obtaining numerous regulatory approvals, third party consents, and converting
Slide 22: GM Liquidity Position
GM Liquidity Position Gross liquidity position remains strong at $20.4 B1 Additional $14.4B VEBA assets available to fund healthcare costs GM remains committed to preserving strong liquidity position In Q3 completed amendment and restatement of GM's revolving credit facility, which provides $4.6B of
Slide 23: Gross / Net Liquidity
Q4'00 Q4'01 Q1'02 Q2'02 Q3'02 Q4'02 Q1'03 Q2'03 Q3'03 Q4'03 Q1'04 Q2'04 Q3'04 Q4'04 Q1'05 Q2 '05 Q3 '05 Q4 '05 Q1 '06 Q2 '06 Q3 '06 Net Liquidity 5.2 4.8 4.8 3.5 -0.7 0.8 1.8 2.5 1.1 4.2 6.5 -2.4 -5.5 -8.9 -7.4 -8.2 -9.2 -12.5 -12.375 -13.2 -12.1 -10.6 -9.6 -12.4 Gross Cash 13.2 13 13.3 11.8 11.5 17
Slide 24: Automotive Cash Flow Summary
Automotive Cash Flow Summary Refer to Supplemental Chart 5 for reconciliation to GAAP Operating Cash Flow 23
Slide 25: Pension & OPEB Accounting Changes SFAS 158
Pension & OPEB Accounting Changes SFAS 158 24 In September 2006, the FASB issued Statement No. 158 which covers changes in pension and OPEB accounting SFAS 158 requires an employer to include additional net assets and/or liabilities on the balance sheet to reflect the funded status of its pension an
Slide 26: Pension & OPEB Accounting Changes SFAS 158
Pension & OPEB Accounting Changes SFAS 158 25 Adoption of SFAS 158 expected to result in additional deferred tax assets of approximately $4-5B and reduction of deferred tax liabilities of approximately $6-9B Estimated impact to shareholders equity is before assessing GM's ability to realize this def
Slide 27: Renault-Nissan Alliance Conclusion
Renault-Nissan Alliance Conclusion 26 Teams in agreement over potential synergies in seven of eight areas Estimates differed on Purchasing -- but consensus that synergies accrued predominantly to Renault-Nissan Would result in improved competitive position for Nissan Renault-Nissan unwilling to make
Slide 28: Summary
Summary Automotive operations improved by over $1.5B on an adjusted basis, on strength of cost actions in GMNA and continued momentum in other regions On track to achieve $9B structural cost target on a running rate basis by the end of 2006 - and continuing to work on goal to reduce to 25% of revenu
Slide 29: Supplemental Charts
Supplemental Charts The following supplemental charts are provided to reconcile adjusted financial data comprehended in the primary chart set with GAAP-based data (per GM's financial statements) and/or provide clarification with regard to definition of non-GAAP terminology
Slide 30: Reconciliation to Adjusted Net Income / EPS Q3 - 2005 & 2006
Reconciliation to Adjusted Net Income / EPS Q3 - 2005 & 2006 S1 S1
Slide 31: Reconciliation of GMAC Loss on Sale / Goodwill Impairment Q3 2006
Reconciliation of GMAC Loss on Sale / Goodwill Impairment Q3 2006 (a) - For GAAP reporting purposes, impairment on operating lease assets included as part of overall Loss on sale of controlling interest in GMAC. Pursuant to Statement of Financial Accounting Standards No. 144 , the company is require
Slide 32: Reconciliation of GMNA Revenue Per Unit Calendar Year
Reconciliation of GMNA Revenue Per Unit Calendar Year S3 a). For GAAP reporting purposes, sales to other GM regions are eliminated whereas they are retained for managerial vehicle analysis b). Includes SPO parts, Powertrain engines, MSP, and Onstar service outside sales- excluded from managerial veh
Slide 33: Reconciliation of GMNA Revenue Per Unit Third Quarter
Reconciliation of GMNA Revenue Per Unit Third Quarter S4 a). For GAAP reporting purposes, sales to other GM regions are eliminated whereas they are retained for managerial vehicle analysis b). Includes SPO parts, Powertrain engines, MSP, and Onstar service outside sales- excluded from managerial veh
Slide 34: Reconciliation of Automotive Cash Flow
Reconciliation of Automotive Cash Flow Q3 - 2005 & 2006, CYTD - 2005 & 2006 S5
Slide 35: Automotive Cash Flow Explanation of Accrued Expenses & Other
Automotive Cash Flow Explanation of Accrued Expenses & Other S6 In response to questions received on the General Motors earnings conference call on October 25, 2006, General Motors wants to provide further clarity regarding the Accrued Expenses and Other line item on the Automotive Cash Flow Summary