Slide 1: Preliminary 2008 Third Quarter Results
Preliminary 2008 Third Quarter Results
Slide 2: Forward Looking Statements
Forward Looking Statements 1 In this presentation and in related comments by our management, our use of the words "expect," "anticipate," "estimate," "goal," "target," "believe," "improve," "intend," "potential," "continue," "designed," "opportunity," "risk," "may," "would," "could," "should," "proj
Slide 3: Agenda
Agenda Global Economic Outlook Incremental Liquidity Initiatives Third Quarter Results 2
Slide 4: Global Economic Outlook
Global Economic Outlook Experiencing worst financial/credit crisis in more than 70 years Financial market turmoil has spilled over to the broader global economy, leading to significant uncertainty and volatility U.S. economic downturn, declining employment, falling real income Western Europe downtur
Slide 5: Global Economic Outlook (Continued)
Global Economic Outlook (Continued) What We Know Credit markets frozen Consumer confidence at historically low levels U.S. housing market has not bottomed out Governments determined to avoid systemic collapse Oil and commodity prices falling What We Don't Long-term consequences of this crisis Impact
Slide 6: Global Industry Sales
Global Industry Sales Six years of consecutive record global vehicle sales, rising 24% to nearly 71M units in 2007 Global sales peaked in January, now expect 2008 global sales below 69M (~3% lower than 2007 levels) Sales in North America and Western Europe below replacement rates, similar to downtur
Slide 7: Using Conservative Industry Outlook
Using Conservative Industry Outlook In light of ongoing global credit crisis, GM planning conservatively Expect U.S. industry volumes significantly below trend for several years Continuing to plan for gradually higher oil/energy cost environment 6 (1) Note: In millions of units; U.S. Light Industry
Slide 8: Further Actions Announced Today
Further Actions Announced Today 7 July 15th Announced Liquidity Actions GMNA Structural Cost ~$2.5B On-Track Salaried Employment Savings ~$1.5B Largely Complete Capital Expenditure Reductions ~$1.5B On-Track Working Capital Improvements ~$2.0B On-Track UAW VEBA Deferrals ~$1.7B Complete Dividend Sus
Slide 9: Capital Expenditure Reductions (~$2.5B)
Capital Expenditure Reductions (~$2.5B) 8 July 15 Plan ~$1.5B Reduction From Prior Plan Delayed next gen. large pickup & SUV programs Delayed V8 engine development / capacity Reductions in non-product spending Additional Actions ~$2.5B Reduction From July 15 Plan CY 2009 capital spending reduced fro
Slide 10: GMNA Structural Cost Reductions (~$1.5B)
GMNA Structural Cost Reductions (~$1.5B) July 15 Plan ~$2.5B Reduction From Prior Plan Pull-ahead production cessation; other shift & line-rate reductions Increased percentage of Tier 2 employees Reduced promotional & advertising spend Engineering reductions Lower travel, non-core IT project & consu
Slide 11: Working Capital Improvements (~$0.5B)
Working Capital Improvements (~$0.5B) 10 July 15 Plan ~$2B Reduction From Prior Plan 70% precious metal inventory reduction Reduced export inventory levels Lower work-in-process & buffer stock inventory levels Additional Actions ~$0.5B Reduction From July 15 Plan Additional inventory reductions Emph
Slide 12: Salaried Employment Costs (~$0.5B)
Salaried Employment Costs (~$0.5B) July 15 Plan >20% Reduction in Salaried Employment Cash Costs Overachieved headcount reduction targets Eliminated U.S. Post-65 retiree healthcare Eliminated base compensation increases Elimination of executive bonuses Additional Actions ~$0.5B Reduction From July 1
Slide 13: Asset Sales & Capital Markets
Asset Sales & Capital Markets 12 Asset Sales HUMMER Preparing to provide offering materials to interested parties Named CEO to build management and lead next stage of strategic review Strasbourg Offering materials prepared and provided to appropriate parties ACDelco Preparing to provide offering mat
Slide 14: Future Product Portfolio
Future Product Portfolio 13 China & Germany United States
Slide 15: Third Quarter Financial Highlights
Third Quarter Financial Highlights GAAP net loss of $(2.5)B, $(4.45) EPS including special items of $1.7B Adjusted net loss of $(4.2)B, $(7.35) EPS, excluding special items Adjusted automotive earnings before tax (EBT) of $(2.8)B, down $2.9B vs. Q3 2007 (excluding discontinued operations) on signifi
Slide 16: Third Quarter Adjusted Results
Third Quarter Adjusted Results 15 Refer to Supplemental Charts for reconciliation to GAAP figures Refer to Supplemental Charts for reconciliation to GAAP figures
Slide 17: Third Quarter Adjustments to Income
Third Quarter Adjustments to Income 16 Exclusion of special items useful for: Management to measure operations Comparisons between reporting periods Investors to measure and assess company's core performance
Slide 18: UAW VEBA Curtailment
17 UAW VEBA Curtailment Settlement Agreement became effective in September, requiring remeasurement of UAW Hourly Medical and Mitigation Plan obligations, as well as hourly pension plan Resulted in ~$13B reduction to UAW Hourly Medical Plan obligation, reflected as actuarial gain in Other Comprehens
Slide 19: Salaried Health Care Plan Related
18 Salaried Health Care Plan Related As part of operating actions outlined July 15th to improve liquidity, GM eliminated Post-65 U.S. salaried retiree healthcare effective January 1, 2009 Pension benefit increase from U.S. salaried plan partially offsets participant cost Consequently, U.S. salaried
Slide 20: Delphi Related
19 Delphi Related GM-Delphi Settlement Agreements implemented in Q3 GM paid $1.2B to Delphi related to accrued support payments 414(l) hourly pension transfer from Delphi to GM of $2.1B net liability GM received release from Delphi and $1.6B administrative claim Upon emergence, remainder of Delphi h
Slide 21: Total Auto Adjusted EBT - Q3 2008 vs. Q3 2007
Total Auto Adjusted EBT - Q3 2008 vs. Q3 2007 20 2007 excludes results from Allison Transmission, recorded as Discontinued Operations Key Drivers 2007 Earnings Before Tax $ 0.1 Volume (1.0) Mix (1.5) Price 0.2 Cost Factors 0.4 Hedging / Exchange / Other (1.0) 2008 Earnings Before Tax $ (2.8) $ Billi
Slide 22: Overview Of Commodity & FX Hedging
Overview Of Commodity & FX Hedging GM uses passive hedging program to manage economic exposure to market fluctuations in commodity prices and foreign currencies Hedge programs are rolling and generally vary by size of exposure, depth of market and ability to forecast underlying exposure Generally, u
Slide 23: GMNA Third Quarter Adjusted Results
GMNA Third Quarter Adjusted Results 22 22 2007 excludes results from Allison Transmission, recorded as Discontinued Operations
Slide 24: GMNA Adjusted EBT - Q3 2008 vs. Q3 2007
GMNA Adjusted EBT - Q3 2008 vs. Q3 2007 23 2007 excludes results from Allison Transmission, recorded as Discontinued Operations (1.3) Industry decline 0.8 Inventory related (0.3) Segment mix related (1.0) Commodity hedging 0.3 Exchange related 0.1 Other 0.4 Manufacturing/attrition 0.2 Pension/OPEB (
Slide 25: GME Third Quarter Adjusted Results
GME Third Quarter Adjusted Results 24
Slide 26: GME Adjusted EBT - Q3 2008 vs. Q3 2007
GME Adjusted EBT - Q3 2008 vs. Q3 2007 25 Key Drivers 2007 Earnings Before Tax $ (0.1) Volume/Mix (0.4) Price (0.1) Cost Factors 0.1 Hedging / Exchange / Other (0.5) 2008 Earnings Before Tax $ (1.0) $ Billions - Continuing Operations Only Q3 (0.3) Exchange related (0.1) Commodity/FX hedging (0.1) Al
Slide 27: GMLAAM Third Quarter Adjusted Results
GMLAAM Third Quarter Adjusted Results 26
Slide 28: GMLAAM Adjusted EBT - Q3 2008 vs. Q3 2007
GMLAAM Adjusted EBT - Q3 2008 vs. Q3 2007 27 2007 Earnings Before Tax $ 0.4 Volume/Mix 0.1 Price 0.1 Hedging / Exchange / Other (0.1) 2008 Earnings Before Tax $ 0.5 $ Billions - Continuing Operations Only Q3
Slide 29: GMAP Third Quarter Adjusted Results
GMAP Third Quarter Adjusted Results 28
Slide 30: GMAP Adjusted EBT - Q3 2008 vs. Q3 2007
GMAP Adjusted EBT - Q3 2008 vs. Q3 2007 29 Key Drivers 2007 Earnings Before Tax $ 0.2 Volume/Mix (0.1) Price (0.1) Hedging / Exchange / Other 0.0 2008 Earnings Before Tax $ (0.0) $ Billions - Continuing Operations Only Q3 (0.2) FX hedging 0.2 Exchange / Other
Slide 31: GMAC Third Quarter Overview
GMAC Third Quarter Overview On a standalone basis, GMAC reported $(2.5)B net loss, a deterioration of $0.9B vs. Q3 2007 North America Auto Finance negatively impacted by increase in provisions and weak economic conditions Residual values in Canada continue to be under pressure, leading to additional
Slide 32: GMAC Third Quarter Business Line Results
GMAC Third Quarter Business Line Results 31 31
Slide 33: GMAC Impact to GM
GMAC Impact to GM Significant credit market deterioration impacts GMAC funding ability Effects being felt globally, as well as in U.S. Results in reduced GMAC lending capacity and commensurate tightening of lending policies APR originations reduced 50-60% Reduced capital availability for lease origi
Slide 34: VEBA Accounting Post Q3
33 VEBA Accounting Post Q3 Settlement Agreement became effective September 2008 and will be accounted for as settlement instead of negative plan amendment Q4 2008 through Q4 2009: GM will continue to recognize service costs for UAW Hourly Medical Plan participants and amortize remaining net prior se
Slide 35: Pension Funding
Pension Funding GM's U.S. pension funded status has declined due to recent initiatives: 2008 Special Attrition Program for U.S. hourly employees Flat pension benefit in lieu of healthcare coverage for post-65 salaried retirees effective January 2009 Salaried retirement window program Delphi 414(L) t
Slide 36: GM Liquidity Position
GM Liquidity Position Liquidity position of $16.2B at September 30, 2008 Includes $0.3B of readily-available VEBA assets Represents decrease of $(4.8)B from prior quarter Additionally had access to about $0.4B of undrawn, committed U.S. credit facilities at September 30, 2008 Represents decrease of
Slide 37: Automotive Gross / Net Liquidity
Automotive Gross / Net Liquidity 1 Q4 2005 - Q3 2006 Net Liquidity figures exclude GMAC related debt 2 Including readily available VEBA assets 36 Q4'00 YE '01 Q4 '05 Q1 '06 Q2 '06 Q3 '06 Q4 '06 Q1 '07 Q2 '07 Q3 '07 Q4'07 Q1'08 Q2'08 Q3'08 Net Liquidity 5.2 4.8 4.8 3.5 -0.7 -13.833 -12.303 -11.394 -1
Slide 38: Automotive Cash Flow Summary
Automotive Cash Flow Summary Refer to Supplemental Charts for reconciliation to GAAP figures 37 * Includes $39.1 billion Q3 2007 tax asset write-off ** Earnings before Tax from Continuing Operations on a GAAP basis
Slide 39: Key Cash Flow Variance Explanations
Key Cash Flow Variance Explanations Q3 Pension/OPEB expense (net of payments) mainly driven by one-time items UAW VEBA curtailment gain partially offset by salaried Post-65 OPEB settlement loss Accrued Expenses and Other reflects timing of cash flows vs. accruals Sales Allowances are one of the main
Slide 40: Adjusted OCF Drivers For Q4
39 Adjusted OCF Drivers For Q4 Adjusted Operating Cash Flow Drivers Sales Allowance Reserves ~$0.3B net outlays on dealer stock reduction; expect Q4 source of funds Working capital impact of incentive strategy change (cash vs. APR) $0.4B pre-payment to GMAC was one-time -- and unwinds over time Sale
Slide 41: Summary
Summary Liquidity is top priority of company Taking tough actions to generate and preserve liquidity Q3 results clearly reflect challenges facing U.S. and global economies and difficult credit market conditions Q3 cash burn rate not indicative -- significant improvement expected in Q4 Challenging ne
Slide 42: Backup Charts
Backup Charts B-0
Slide 43: GMNA Vehicle Revenue Per Unit
GMNA Vehicle Revenue Per Unit GMNA Vehicle Revenue Per Unit Calendar Year Third Quarter Net Revenue Gross Revenue less Sales Incentives Vehicle revenue per unit excludes items such as daily rental accounting impact, Service Parts, OnStar, other outside sales B-1 Adjusted to remove Allison. Refer to
Slide 44: GMNA Adjusted EBT - YTD 2008 vs. YTD 2007
GMNA Adjusted EBT - YTD 2008 vs. YTD 2007 B-2 2007 excludes results from Allison Transmission, recorded as Discontinued Operations Key Drivers 2007 Earnings Before Tax $ (0.5) Volume (3.9) Mix (2.9) Price (1.9) Net Material 0.1 Pension / OPEB / Manufacturing 1.6 Hedging / Exchange / Other 0.2 2008 E
Slide 45: Reconciliation to Adjusted Net Income / EPS Q3 2008
Reconciliation to Adjusted Net Income / EPS Q3 2008 S-1
Slide 46: Reconciliation to Adjusted Net Income / EPS Q3 2007
Reconciliation to Adjusted Net Income / EPS Q3 2007 S-2
Slide 47: Reconciliation of GMNA Revenue Per Unit (Q3)
Reconciliation of GMNA Revenue Per Unit (Q3) S-3
Slide 48: Reconciliation of GMNA Revenue Per Unit (CY)
Reconciliation of GMNA Revenue Per Unit (CY) S-4
Slide 49: Reconciliation of Automotive & Corp/Other Cash Flow Third Quarter and CYTD
Reconciliation of Automotive & Corp/Other Cash Flow Third Quarter and CYTD S-5