General Motors Company · NYSE:GM
General Motors — Q2 2006 Earnings Presentation
31 slides from General Motors's earnings presentation, Jul 26, 2006
Slide 1: Preliminary 2006 Second Quarter Results
Preliminary 2006 Second 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: Second Quarter Adjusted Results - Net Income
Second 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 4: Second Quarter Adjustments to Income
Second Quarter Adjustments to Income 4 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 compa
Slide 5: GMAC Loss on Sale
GMAC Loss on Sale 5 When GM announced sale of 51% controlling interest in GMAC, transaction expected to generate $1.1 - 1.3B pre-tax loss on sale Represents writedown of 51% of goodwill since transaction based on tangible book value Q2 special item of $490 million after-tax includes the effect of Ot
Slide 6: Special Attrition Program Impact
Special Attrition Program Impact 6 GM/UAW/Delphi special attrition program announced March 22 Retirement/separation incentives offered to all UAW hourly employees Similar provisions offered to IUE-CWA represented workers Initial GM results of 35,000 acceptances announced June 26 Final results now av
Slide 7: Special Attrition Program Impact: Pension/OPEB Remeasurements
Special Attrition Program Impact Pension/OPEB Remeasurements 7 GM remeasured its U.S. hourly pension plan as of April 30, 2006 as a result of the accelerated attrition program As a result of this remeasurement, CY06 pension expense reduced by $0.7B Drivers of pension expense change following remeasu
Slide 8: Other Pension/OPEB Remeasurements
Other Pension/OPEB Remeasurements 8 GM is also remeasuring its U.S. hourly health care plan due to the attrition program and, as previously disclosed, several of its U.S. pension and OPEB plans due to plan amendments: Total pension/OPEB savings, including impact of the special attrition program, is
Slide 9: North America Second Quarter Adjusted Results
North America Second Quarter Adjusted Results 9 9
Slide 10: GMNA Vehicle Revenue Per Unit
GMNA Vehicle Revenue Per Unit Calendar Year Second 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 Reported Rev/Unit 20,899 20,321 20,777 20,875 20,540 20,632 19
Slide 11: Steady cadence of turnaround actions
Steady cadence of turnaround actions Oct 2005: GM/UAW Retiree Health Care Agreement reached Nov 2005: Manufacturing Capacity Actions announced Feb 2006: U.S. Salaried Retiree Health Care revisions Feb 2006: Shared Sacrifice actions Mar 2006: U.S. Salaried Pension Plan revisions Mar 2006: GM/UAW/Delp
Slide 12: Structural Cost Reduction in North America
Structural Cost Reduction in North America* 2006 CY 13 * Includes North American costs accounted for in Corp Sector * Includes North American costs accounted for in Corp Sector 2006 CY pre-tax Savings of about $6B ($ Billion) Q1 Average Annual Run-rate of about $9B by end of 2006 Q2 Q3 Q4 1H06 about
Slide 13: Europe Second Quarter Adjusted Results
Europe Second Quarter Adjusted Results 14 14
Slide 14: Latin America, Africa & Middle East Second Quarter Adjusted Results
Latin America, Africa & Middle East Second Quarter Adjusted Results 15 15
Slide 15: Asia Pacific Second Quarter Adjusted Results
Asia Pacific Second Quarter Adjusted Results 16 2006 Results reflect full consolidation of GM-DAT revenue and income. 2006 Results reflect full consolidation of GM-DAT revenue and income.
Slide 16: GMAC Second Quarter Net Income
GMAC Second Quarter Net Income 17 Note: Amounts are presented on the basis reported by GM, which may differ from those reported by GMAC during the comparable periods reported by GMAC during the comparable periods reported by GMAC during the comparable periods reported by GMAC during the comparable p
Slide 17: GMAC Global Liquidity
GMAC Global Liquidity GMAC continues to have access to large liquidity cushion Cash balance of $22.7B* at June 30, 2006 Over $50B of unutilized bank lines and conduit capacity Renewed two global syndicated bank facilities totaling more than $21B Multi-year committed auto whole loan facilities with B
Slide 18: GMAC Outlook
GMAC Outlook Following the closing of the transaction, GMAC anticipates improved access to lower-cost capital to support profitable growth initiatives Expand auto financing activities to non-GM dealerships Increase used vehicle financing volume Further expand ResCap and Insurance international opera
Slide 19: GMAC Transaction Closing Status
GMAC Transaction Closing Status 20 Continue to expect the sale of a 51% controlling interest in GMAC to the Cerberus-led consortium will close in the 4th Quarter 2006 A number of key closing conditions have now been satisfied The consortium has advised that the PBGC condition has been satisfied Cerb
Slide 20: GM Liquidity Position
GM Liquidity Position Automotive liquidity improved to $22.9B* Additionally, $15.6B VEBA assets available to fund healthcare costs Additionally, recently completed capital markets transactions further enhance GM's available liquidity position Completed amendment and restatement of GM's revolving cre
Slide 21: 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 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 Gross Cash 13.2 13 13.3 11.8 11.5 17.3 17.6 18.2
Slide 22: Automotive Cash Flow Summary
Automotive Cash Flow Summary Refer to Supplemental Chart 4 for reconciliation to GAAP Operating Cash Flow 23
Slide 23: Summary
Summary Record quarterly revenue of $54.4B Automotive operations profitable, including over $1B improvement in GMNA results Positive cashflow in Q2, with automotive liquidity improved further to $22.9B Additional turnaround milestones achieved in Q2: Better than expected results achieved for GM attr
Slide 24: What's Next
What's Next Support successful resolution of Delphi Execute implementation of accelerated special attrition program Continue toward successful closure of GMAC transaction Maintain improving trends in earnings, cash flow, and liquidity Reduce structural cost from approximately 34% of automotive reven
Slide 25: 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 26: Reconciliation to Adjusted Net Revenue, Net Income / EPS
Reconciliation to Adjusted Net Revenue, Net Income / EPS Q2 - 2005 & 2006 S1 S1
Slide 27: Reconciliation of GMNA Revenue Per Unit Q2 2006
Reconciliation of GMNA Revenue Per Unit Q2 2006 S2 S2 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 vehicl
Slide 28: Reconciliation of GMAC Loss on Sale Q2 2006
Reconciliation of GMAC Loss on Sale Q2 2006 S3 (a) - For GAAP reporting purposes, impairment on operating lease assets included as part of overall Loss on controlling interest in GMAC held for sale. Pursuant to Statement of Financial Accounting Standards No. 144 , the company is required to cease de
Slide 29: Reconciliation of Automotive Cashflow
Reconciliation of Automotive Cashflow Q2 - 2005 & 2006, CYTD - 2005 & 2006 S4
Slide 30: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures The preceding charts include the following non-GAAP financial measures: (a) adjusted net income, (b) GMAC loss on sale, (c) GM North America vehicle revenue per unit, and (d) automotive cash flow. Each of these financial measures excludes the impact of certain item
Slide 31: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures Restructuring and impairment charges. Our non-GAAP financial measures exclude exit costs and related charges, primarily consisting of severance costs and lease abandonment costs, and any subsequent changes in estimates related to exit activities as they relate to G