l:\secfiles\10-Q\3rdqtr94\part-1.doc 26
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549-1004
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OF THE SECURITIES EXCHANGE
- ---
ACT OF 1934
For the quarterly period ended September 30, 1994
------------------
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OF THE SECURITIES EXCHANGE
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ACT OF 1934
For the transition period from to
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Commission file number 1-143
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GENERAL MOTORS CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
STATE OF DELAWARE 38-0572515
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
767 Fifth Avenue, New York, New York 10153-0075
3044 West Grand Boulevard, Detroit, Michigan 48202-3091
- -------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (313)-556-5000
--------------
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days. Yes X . No .
--- ---
As of September 30, 1994, there were outstanding 753,564,673 shares
of the issuer's $1-2/3 par value common stock, 261,466,312 shares of Class E
$0.10 par value common stock and 93,082,758 shares of Class H $0.10 par value
common stock.
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GENERAL MOTORS CORPORATION AND SUBSIDIARIES
Index
Page No.
--------
Part I - Financial Information
Item 1. Financial Statements
Statement of Consolidated Operations 3
Consolidated Balance Sheet 5
Condensed Statement of Consolidated Cash Flows 7
Notes to Financial Statements 7
Item 2. Management's Discussion and Analysis 14
Part II - Other Information
Item 1. Legal Proceedings 31
Item 6. Exhibits and Reports on Form 8-K 32
Signatures 32
Exhibit 11 Computation of Earnings Per Share Attributable
to Common Stocks for the Quarters and Nine Months Ended
September 30, 1994 and 1993 33
Exhibit 12 Computation of Ratios of Earnings to Fixed Charges for
the Nine Months Ended September 30, 1994 and 1993 37
Exhibit 99(a) Electronic Data Systems Corporation and Subsidiaries
Consolidated Financial Statements and Management's Discussion
and Analysis 38
(b) GM Hughes Electronics Corporation and Subsidiaries
Consolidated Financial Statements and Management's Discussion
and Analysis 44
Exhibit 27 Financial Data Schedule (for SEC information only)
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GENERAL MOTORS CORPORATION PART I
AND SUBSIDIARIES ITEM 1. FINANCIAL STATEMENTS
STATEMENT OF CONSOLIDATED OPERATIONS
Nine Months Ended
Third Quarter September 30,
-------------------- --------------------
1994 1993 1994 1993
-------------------- --------------------
(Dollars in Millions)
Net Sales and Revenues
Manufactured products $29,420.8 $25,442.8 $97,774.2 $87,149.4
Financial services 2,351.5 2,187.2 6,819.2 6,674.8
Computer systems services 1,643.3 1,283.0 4,472.1 3,737.5
Other income (Note 2) 1,094.7 1,224.5 3,332.4 3,390.1
-------- -------- --------- ---------
Total Net Sales and Revenues 34,510.3 30,137.5 112,397.9 100,951.8
-------- -------- --------- ---------
Costs and Expenses
Cost of sales and other
operating charges, exclusive
of items listed below 26,954.3 23,516.4 85,176.4 77,956.5
Selling, general, and
administrative expenses 2,962.4 2,724.5 8,691.8 8,281.1
Interest expense 1,377.8 1,365.5 3,930.0 4,345.9
Depreciation of real estate,
plants, and equipment 1,833.2 1,653.0 5,181.1 4,862.2
Amortization of special tools 596.3 518.5 2,121.9 1,845.5
Amortization of intangible
assets 52.1 90.6 175.4 247.1
Other deductions (Note 2) 280.6 308.7 1,129.4 990.3
Special provision for
restructuring (Note 3) - 950.0 - 950.0
-------- -------- --------- --------
Total Costs and Expenses 34,056.7 31,127.2 106,406.0 99,478.6
-------- -------- --------- --------
Income (Loss) before Income Taxes 453.6 (989.7) 5,991.9 1,473.2
United States, foreign, and
other income taxes (credit) (98.4) (876.8) 1,905.3 183.8
-------- -------- --------- --------
Income (Loss) before cumulative
effect of accounting change 552.0 (112.9) 4,086.6 1,289.4
Cumulative effect of accounting
change (Note 5) - - (758.1) -
-------- -------- --------- --------
Net Income (Loss) 552.0 (112.9) 3,328.5 1,289.4
Dividends on preferred
and preference stocks 72.1 86.8 248.6 270.0
-------- -------- --------- --------
Income (Loss) on Common Stocks $479.9 ($199.7) $3,079.9 $1,019.4
======== ======== ========= ========
Certain 1993 amounts were reclassified to conform with 1994 classifications.
Reference should be made to the Notes to Financial Statements.
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GENERAL MOTORS CORPORATION
AND SUBSIDIARIES
Nine Months Ended
Third Quarter September 30,
--------------- -----------------
1994 1993 1994 1993
--------------- -----------------
(Dollars in Millions
Except Per Share Amounts)
Earnings (Loss) Attributable to
Common Stocks (Note 6)
$1-2/3 par value before cumulative
effect of accounting change $306.0 ($347.0)$3,333.4 $615.9
Cumulative effect of accounting change
(Note 5) - - (751.3) -
----- ----- ------- -----
Net earnings (loss) attributable
to $1-2/3 par value $306.0 ($347.0)$2,582.1 $615.9
----- ----- ------- -----
Net earnings attributable to Class E $117.3 $98.4 $315.9 $260.2
----- ---- ----- -----
Class H before cumulative effect
of accounting change $56.6 $48.9 $188.7 $143.3
Cumulative effect of accounting change
(Note 5) - - (6.8) -
---- ---- ----- -----
Net earnings attributable
to Class H $56.6 $48.9 $181.9 $143.3
---- ---- ----- -----
Average number of shares of common stocks
outstanding (in millions)
$1-2/3 par value 752.7 709.6 737.1 708.3
Class E 261.2 246.6 259.7 239.4
Class H 92.7 87.4 91.7 88.5
Earnings (Loss) Per Share Attributable
to Common Stocks (Note 6)
$1-2/3 par value before cumulative
effect of accounting change $0.40 ($0.49) $4.46 $0.85
Cumulative effect of accounting change
(Note 5) - - (1.05) -
---- ---- ---- ----
Net earnings (loss) attributable to
$1-2/3 par value $0.40 ($0.49) $3.41 $0.85
---- ---- ---- ----
Net earnings attributable to Class E $0.45 $0.40 $1.22 $1.09
---- ---- ---- ----
Class H before cumulative effect of
accounting change $0.61 $0.56 $2.06 $1.61
Cumulative effect of accounting change
(Note 5) - - (0.08) -
---- ---- ---- ----
Net earnings attributable to
Class H $0.61 $0.56 $1.98 $1.61
---- ---- ---- ----
Cash Dividends Per Share of Common
Stocks (Note 6)
$1-2/3 par value $0.20 $0.20 $0.60 $0.60
Class E $0.12 $0.10 $0.36 $0.30
Class H $0.20 $0.18 $0.60 $0.54
Reference should be made to the Notes to Financial Statements.
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GENERAL MOTORS CORPORATION
AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET
Sept. 30, Dec. 31, Sept. 30,
ASSETS 1994 1993 1993
- -----------------------------------------------------------------------------
(Dollars in Millions)
Cash and cash equivalents $9,806.1 $13,790.5 $10,452.3
Other marketable securities 4,612.6 4,172.2 4,251.6
--------- --------- ---------
Total cash and marketable securities 14,418.7 17,962.7 14,703.9
--------- --------- ---------
Finance receivables - net 51,093.5 53,874.7 54,083.7
--------- --------- ---------
Accounts and notes receivable (less
allowances) 8,620.7 6,389.2 6,835.1
--------- --------- ---------
Inventories (less allowances) (Note 7) 10,345.4 8,615.1 10,068.2
--------- --------- ---------
Contracts in process (less advances and
progress payments) 2,725.2 2,376.8 2,233.7
--------- --------- ---------
Net equipment on operating leases (less
accumulated depreciation) 18,528.3 13,095.3 12,232.6
--------- --------- ---------
Deferred income taxes 20,983.8 20,798.1 19,263.3
--------- --------- ---------
Other assets (less allowances) 19,942.8 17,757.3 17,953.4
--------- --------- ---------
Property
Real estate, plants, and equipment-at cost 69,611.7 67,966.4 69,420.4
Less accumulated depreciation 43,039.0 41,725.5 42,824.4
--------- --------- ---------
Net real estate, plants, and equipment 26,572.7 26,240.9 26,596.0
Special tools - at cost (less amortization) 7,564.2 7,983.9 8,001.2
--------- --------- ---------
Total property 34,136.9 34,224.8 34,597.2
--------- --------- ---------
Intangible assets - at cost (less
amortization) 13,076.6 13,106.9 9,348.1
--------- --------- ---------
Total Assets $193,871.9 $188,200.9 $181,319.2
========= ========= =========
Certain September 1993 amounts were reclassified to conform with 1994
classifications.
Reference should be made to the Notes to Financial Statements.
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GENERAL MOTORS CORPORATION
AND SUBSIDIARIES
Sept. 30, Dec. 31, Sept. 30,
LIABILITIES AND STOCKHOLDERS' EQUITY 1994 1993 1993
- -----------------------------------------------------------------------------
(Dollars in Millions Except
Per Share Amounts)
Liabilities
Accounts payable $9,597.7 $10,276.5 $9,468.9
Notes and loans payable (Note 8) 69,182.2 70,441.2 69,411.2
United States, foreign, and other income
taxes - deferred and payable 3,329.6 2,409.3 2,953.4
Postretirement benefits other than
pensions (Note 9) 39,389.0 37,920.0 37,258.2
Pensions (Note 10) 20,304.3 22,631.6 14,118.8
Other liabilities and deferred credits 41,999.2 38,474.8 41,072.3
--------- --------- ---------
Total Liabilities 183,802.0 182,153.4 174,282.8
--------- --------- ---------
Stocks Subject to Repurchase (Note 11) 450.0 450.0 450.0
--------- --------- ---------
Stockholders' Equity
Preference stocks (Series A Conversion,
$1.8 at December 1993 and September 1993
(Note 12); Series B 9-1/8% Depositary
Shares, $1.1; Series C Depositary
Shares, $0.3; Series D 7.92% Depositary
Shares, $0.4; and Series G 9.12%
Depositary Shares, $0.6 at September 1994,
December 1993, and September 1993) 2.4 4.2 4.2
Common stocks
$1-2/3 par value (issued, 753,639,264,
720,105,471, and 711,979,982 shares)
(Note 12) 1,256.1 1,200.2 1,186.6
Class E (issued, 267,321,168, 263,089,320,
and 259,636,221 shares) 26.7 26.3 25.9
Class H (issued, 78,190,823, 75,705,433,
and 73,692,010 shares) 7.8 7.6 7.4
Capital surplus (principally additional
paid-in capital) 13,027.0 12,003.4 11,453.6
Net income retained for use in the
business (accumulated deficit)(Note 13) 486.5 (2,002.9) (2,908.2)
--------- --------- ---------
Subtotal 14,806.5 11,238.8 9,769.5
Minimum pension liability adjustment (5,311.2) (5,311.2) (2,925.3)
Accumulated foreign currency translation
adjustments, net unrealized gains (losses)
on marketable equity securities, and effect
of adopting SFAS No. 115 (Notes 5 and 13) 124.6 (330.1) (257.8)
--------- --------- ---------
Total Stockholders' Equity 9,619.9 5,597.5 6,586.4
--------- --------- ---------
Total Liabilities and Stockholders' Equity $193,871.9 $188,200.9 $181,319.2
========= ========= =========
Certain September 1993 amounts were reclassified to conform with 1994
classifications.
Reference should be made to the Notes to Financial Statements.
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GENERAL MOTORS CORPORATION
AND SUBSIDIARIES CONDENSED STATEMENT OF CONSOLIDATED CASH FLOWS
Nine Months Ended Sept. 30,
--------------------------
1994 1993
--------------------------
(Dollars in Millions)
Net Cash Provided by Operating Activities $6,851.4 $9,358.7
-------- --------
Cash Flows from Investing Activities
Expenditures for real estate, plants, and
equipment (3,097.5) (2,523.5)
Expenditures for special tools (1,564.1) (1,899.8)
Other 675.3 106.9
Change in other investing assets
Investments in other marketable securities -
acquisitions (11,299.8) (10,521.3)
Investments in other marketable securities -
liquidations 10,859.4 10,282.4
Finance receivables - acquisitions (114,308.9) (75,017.4)
Finance receivables - liquidations 112,614.9 76,491.4
Finance receivables - other (159.3) 837.8
Proceeds from sales of finance receivables 4,747.0 9,368.7
Operating leases - net (7,655.4) (3,114.7)
-------- --------
Net Cash Provided by (Used in)
Investing Activities (9,188.4) 4,010.5
-------- --------
Cash Flows from Financing Activities
Net decrease in short-term
loans payable (1,761.7) (7,881.8)
Increase in long-term debt 11,519.8 6,471.7
Decrease in long-term debt (11,681.7) (11,531.8)
Proceeds from issuing common stock 1,113.7 327.6
Cash dividends paid to stockholders (839.1) (812.8)
Other - (580.5)
-------- --------
Net Cash Used in
Financing Activities (1,649.0) (14,007.6)
-------- --------
Effect of Exchange Rate Changes on Cash and Cash
Equivalents 1.6 12.1
-------- --------
Net decrease in cash and cash equivalents (3,984.4) (626.3)
Cash and cash equivalents at beginning of
the period 13,790.5 11,078.6
-------- --------
Cash and cash equivalents at end of the period $9,806.1 $10,452.3
======== ========
Certain 1993 amounts were reclassified to conform with 1994 classifications.
Reference should be made to the Notes to Financial Statements. Note 10
describes a non-cash transaction.
NOTES TO FINANCIAL STATEMENTS
In the opinion of management, the interim financial statements reflect all
adjustments, consisting of only normal recurring items (with the exception of
the after-tax increase to the previously announced plant closing reserve in
1993 described in Note 3 and the accounting changes in 1994 to adopt Statement
of Financial Accounting Standards (SFAS) No. 112, Employers' Accounting for
Postemployment Benefits, SFAS No. 114, Accounting by Creditors for Impairment
of a Loan, and SFAS No. 115, Accounting for Certain Investments in Debt and
Equity Securities, as described in Note 5), which are necessary for a fair
presentation of the results for the interim periods presented. The results
for interim periods are not necessarily indicative of results which may be
expected for any other interim period or for the full year. These financial
statements should be read in conjunction with the consolidated financial
statements, the significant accounting policies, and the other notes to the
consolidated financial statements included in the Corporation's 1993 Annual
Report to the SEC on Form 10-K. Certain additional year-end 1993 disclosures
have been included in this report.
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<PAGE>8
GENERAL MOTORS CORPORATION
AND SUBSIDIARIES
Note 1. Significant Accounting Policies - Financial Instruments
The following should be read in conjunction with Note 1 (Significant
Accounting Policies - Financial Instruments) appearing on page II-13 of GM's
Annual Report on Form 10-K for the year ended December 31, 1993.
Foreign exchange forward contracts and options which are entered into in
connection with GM's management of its foreign currency exposures are
accounted for as hedges to the extent they are designated as, and are
effective as, hedges of firm foreign currency commitments. Other such foreign
exchange contracts and options are marked-to-market on a current basis.
The cash flows from interest rate swaps are accounted for as interest
expense. Gains and losses from terminated contracts are deferred and
amortized over the remaining period of the original swap. Open swap positions
are reviewed regularly to ensure that they remain effective. Written options
(including swaptions and interest rate caps and collars) are marked-to-market
on a current basis.
Note 2. Other Income and Other Deductions
Other income and other deductions consist of:
Third Quarter Nine Months
----------------- ------------------
1994 1993 1994 1993
----------------- ------------------
(Dollars in Millions)
Other Income
Insurance premiums $224.3 $225.0 $657.1 $617.7
Interest 411.6 437.1 1,118.0 1,282.6
Equity in earnings (losses)
of associates, net 60.5 (63.5) 108.7 (213.4)
Claims, commissions, and grants 123.4 178.8 317.7 303.8
Gain on the sale of finance receivables 5.2 103.2 25.0 354.0
Mortgage servicing revenue 50.6 95.6 150.1 256.8
Other 219.1 248.3 955.8* 788.6
------- ------- ------- -------
Total Other Income $1,094.7 $1,224.5 $3,332.4 $3,390.1
======= ======= ======= =======
Other Deductions
Insurance losses and loss adjustment
expenses $215.4 $177.8 $556.8 $474.4
Provision for (recovery of)financing
losses (8.5) 116.7 110.4 292.6
Other 73.7 14.2 462.2* 223.3
------- ------- ------- -------
Total Other Deductions $280.6 $308.7 $1,129.4 $990.3
======= ======= ======= =======
* Other includes gains and losses on the sale of assets in the first quarter
of 1994. The net impact of these sales of assets was not material.
Note 3. Special Provision for Scheduled Plant Closings and Other
Restructurings
Third quarter and nine months 1993 operating results include a pre-tax
increase of $950.0 million to the Corporation's previously announced plant
closing reserve ($589.0 million after taxes, or $0.83 per share of $1-2/3 par
value common stock). The increase in the reserve results from changes in
assumptions, primarily regarding the amount and duration of job security and
supplemental unemployment benefits expected to be paid to employees, given the
terms of the Corporation's collective bargaining agreements negotiated in
1993.
Note 4. General Motors Acceptance Corporation and Subsidiaries
Financial data of General Motors Acceptance Corporation (GMAC) and its
subsidiaries were as as shown on the following page:
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<PAGE>9
GENERAL MOTORS CORPORATION
AND SUBSIDIARIES
Third Quarter Nine Months
----------------- ------------------
1994 1993 1994 1993
----------------- ------------------
(Dollars in Millions)
Net financing revenue and other $1,157.3 $1,313.3 $3,470.7 $3,959.2
Net income including the unfavorable
cumulative effect of accounting
change of $7.4 million in
nine months 1994 $244.6 $204.8 $678.2 $774.3
Cash dividends paid to GM $250.0 $500.0 $750.0 $1,000.0
Note 5. Accounting Changes
Effective January 1, 1994, the Corporation adopted SFAS No. 112,
Employers' Accounting for Postemployment Benefits. The Standard requires
accrual of the costs of benefits provided to former or inactive employees
after employment, but before retirement. The unfavorable cumulative effect of
adopting this Standard was $1,220.1 million ($758.1 million after tax), or
$751.3 million ($1.05 per share) attributable to $1-2/3 par value common stock
and $6.8 million ($0.08 per share) attributable to GM Class H common stock.
The effect at Electronic Data Systems Corporation was not material and there
was no effect on GM Class E common stock earnings. The non-cash charge is
primarily related to GM's extended-disability benefit program in the U.S.
which, under the new accounting Standard, will be accrued on a service-driven
basis. The ongoing effect in subsequent periods is not expected to be
material.
The Corporation also adopted SFAS No. 114, Accounting by Creditors for
Impairment of a Loan, effective January 1, 1994. SFAS No. 114 requires a
creditor to evaluate the collectibility of both contractual interest and
principal of all receivables when assessing the need for a loss accrual.
There was no material impact on the consolidated financial position or
results of operations as a result of adoption. The Corporation's loans
primarily consist of large groups of smaller-balance homogeneous loans which
are collectively evaluated for impairment and to which this Standard does not
apply. However, certain loans of the Corporation affected by this Standard
are currently carried at the lower of book value or the fair value of the
collateral. The net book value of such loans at September 30, 1994 was $186.0
million, net of a $174.9 million valuation reserve.
Also effective January 1, 1994, the Corporation adopted SFAS No. 115,
Accounting for Certain Investments in Debt and Equity Securities, which
resulted in a $241.0 million after-tax increase in Stockholders' Equity. This
Standard requires the recording at fair value of debt securities which are not
expected to be held to maturity and equity securities which have a readily
determinable fair value. The primary effect of this Standard for the
Corporation relates to debt securities held by Motors Insurance Corporation
and certain equity securities. The ongoing effect on the third quarter and
nine months ended September 30, 1994 resulted in a $29.9 million and a $183.6
million, respectively, after-tax decrease in Stockholders' Equity. The total
effect of SFAS No. 115 at September 30, 1994 was a net increase of $57.4
million in Stockholders' Equity.
Note 6. Earnings Per Share Attributable to and Dividends on Common Stocks
Earnings per share attributable to common stocks have been determined based
on the relative amounts available for the payment of dividends to holders of
$1-2/3 par value, Class E, and Class H common stocks. The allocation of
earnings attributable to such common stocks and the calculation of the related
amounts per share are computed by considering the weighted average number of
common shares outstanding and common stock equivalents, to the extent the
effect of such equivalents is not antidilutive. Operations of the incentive
plans and the assumed exercise of stock options do not have a material
dilutive effect on earnings per share at this time.
Dividends on the $1-2/3 par value common stock are declared out of the
earnings of GM and its subsidiaries, excluding the Available Separate
Consolidated Net Income of EDS and GMHE. Dividends on the Class E and Class H
common stocks are declared out of the Available Separate Consolidated Net
Income of EDS and GMHE, respectively, since the acquisition by GM.
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<PAGE>10
GENERAL MOTORS CORPORATION
AND SUBSIDIARIES
The Available Separate Consolidated Net Income of EDS and GMHE is determined
quarterly and is equal to the separate consolidated net income of EDS and
GMHE, respectively, excluding the effects of purchase accounting adjustments
arising at the time of acquisition, multiplied by a fraction, the numerator of
which is a number equal to the weighted average number of shares of Class E or
Class H common stock outstanding during the period and the denominator of
which was 481.7 million for Class E stock and 399.9 million for Class H stock
during the third quarter of 1994. Comparable denominators for the third
quarter of 1993 were 480.5 million for Class E stock and 399.9 million for
Class H stock.
The denominators used in determining the Available Separate Consolidated Net
Income of EDS and GMHE are adjusted as deemed appropriate by the Board of
Directors to reflect subdivisions or combinations of the Class E and Class H
common stocks and to reflect certain transfers of capital to or from
EDS and GMHE. In this regard, the Board has generally caused the denominators
to decrease as shares are purchased by EDS or GMHE, and to increase as such
shares are used, at EDS or GMHE expense, for EDS or GMHE employee benefit
plans or acquisitions.
Dividends may be paid on common stocks only when, as, and if declared by the
Board of Directors in its sole discretion. The Board's policy with respect to
$1-2/3 par value common stock is to distribute dividends based on the outlook
and the indicated capital needs of the business. The current policy of the
Board with respect to the Class E and Class H common stocks is to pay cash
dividends approximately equal to 30% and 35% of the Available Separate
Consolidated Net Income of EDS and GMHE, respectively, for the prior year.
Notwithstanding the current dividend policy, the dividends paid and to be paid
on the Class H Common Stock during 1994 and 1993 exceeds 35% of the Available
Separate Consolidated Net Income (Loss) of GMHE for the preceding year
(excluding the effect of the $749.4 million after-tax special restructuring
charge at Hughes in 1992).
Note 7. Major Classes of Inventories
Major classes of inventories are as follows:
Sept. 30, Dec. 31, Sept. 30,
1994 1993 1993
-----------------------------------
(Dollars in Millions)
Productive material, work in process,
and supplies $5,836.8 $4,671.9 $5,618.9
Finished product, service parts, etc. 4,508.6 3,943.2 4,449.3
-------- ------- --------
Total inventories (less allowances) $10,345.4 $8,615.1 $10,068.2
======== ======= ========
Note 8. Notes and Loans Payable
The following should be read in conjunction with Note 14 (Notes and Loans
Payable) appearing on page II-30 of GM's Annual Report on Form 10-K for the
year ended December 31, 1993.
The notes and loans payable at December 31, 1993 include $5.9 billion in
currencies other than the U.S. Dollar, primarily the Canadian Dollar ($1.7
billion) and German Mark ($1.7 billion).
At December 31, 1993 and 1992, notes and loans payable include $62.8 billion
and $74.2 billion of obligations with fixed rates, and $7.6 billion and $8.4
billion of obligations with variable interest rates (predominantly based on
LIBOR), after considering the impact of interest rate swap agreements. To
achieve its desired balance between fixed and variable rate debt, the
Corporation has entered into interest rate swap, interest rate cap, interest
rate collar, and swaption agreements. The notional amounts of such agreements
as of December 31, 1993 were approximately $4,709 million ($3,471 million pay
variable and $1,238 million pay fixed), $5,239 million, zero, and $1,191
million, respectively. The notional amounts of such agreements as of December
31, 1992 were approximately $4,242 million ($3,247 million pay variable and
$995 million pay fixed), $929 million, $3 million, and $1,446 million,
respectively.
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<PAGE>11
GENERAL MOTORS CORPORATION
AND SUBSIDIARIES
Swaps accounted for on a settlement basis relate to specific long-term
corporate debt obligations outstanding over the same (or longer) periods as
the designated swaps.
The balance of the net unamortized gains at December 31, 1993 and 1992
resulting from terminated swaps amounted to $7.9 million and zero,
respectively.
Note 9. Postretirement Benefits Other Than Pensions
The Corporation has disclosed in the financial statements certain amounts
associated with estimated future postretirement benefits other than pensions
and characterized such amounts as "accumulated postretirement benefit
obligations", "liabilities", or "obligations". Notwithstanding the recording
of such amounts and the use of these terms, the Corporation does not admit or
otherwise acknowledge that such amounts or existing postretirement benefit
plans of the Corporation (other than pensions) represent legally enforceable
liabilities of the Corporation.
Note 10. Pensions
In September 1993, 18.8 million shares of $1-2/3 par value common stock were
contributed at a value of $838.1 million to the General Motors Pension Plan
for Salaried Employees. These shares had been sold to the Corporation from
individual employee accounts in various stock savings plans of the
Corporation.
Note 11. Stocks Subject to Repurchase
Stocks Subject to Repurchase at September 30, 1994 consist of 15 million
shares of Class H common stock subject to put options issued to the Howard
Hughes Medical Institute and exercisable under most circumstances at $30 per
share on March 1, 1995. The Corporation holds an option to call the
Institute's shares until February 28, 1995 at $37.50 per share.
Note 12. Preference Stock
General Motors converted all 17,825,000 outstanding shares of its Series A
Conversion Preference Stock (Preference Equity Redemption Cumulative Stock or
PERCS) into shares of GM $1-2/3 par value common stock on June 18, 1994. GM
originally issued this stock in June 1991 at a price of $41.375 per share.
Holders of the Preference Stock received 0.992435 shares of GM $1-2/3 par
value common stock for each share of Preference Stock called for conversion,
plus $0.1655 in cash in payment of the accrued and unpaid dividend (covering
the June 1 to June 18 period). Fractional shares of GM $1-2/3 par value
common stock were paid in cash. When all preference stock has been converted,
a total of 17.7 million shares of GM $1-2/3 par value common stock will have
been issued in this conversion.
The exchange of 0.992435 share of GM $1-2/3 par value common stock for each
PERCS was equivalent to the call price of $53.79 per share divided by $54.20,
which was the average daily closing price on the New York Stock Exchange of
the GM $1-2/3 par value common stock for the five consecutive trading days
ending on the "determination date" of June 1, 1994. The determination date
was the second trading day immediately preceding the "notice of conversion"
date of June 3, 1994.
Note 13. Stockholders' Equity
At September 30, 1994, December 31, 1993, and September 30, 1993,
consolidated net income retained for use in the business (accumulated deficit)
attributable to the common stocks was as follows:
Sept. 30, Dec. 31, Sept. 30,
1994 1993 1993
-----------------------------------
(Dollars in Millions)
$1-2/3 par value ($1,939.9) ($4,080.1) ($4,858.3)
Class E 1,566.7 1,344.3 1,262.6
Class H 859.7 732.9 687.5
------- ------- -------
Total $486.5 ($2,002.9) ($2,908.2)
======= ======= =======
- 11 -
<PAGE>12
GENERAL MOTORS CORPORATION
AND SUBSIDIARIES
The Corporation's capital surplus plus net income retained for use in the
business (less accumulated deficit) at September 30, 1994, December 31, 1993,
and September 30, 1993, as allocated pursuant to GM's Certificate of
Incorporation, was as follows:
Sept. 30, Dec. 31, Sept. 30,
1994 1993 1993
-----------------------------------
(Dollars in Millions)
$1-2/3 par value $7,775.0 $4,870.0 $3,727.3
Class E 3,628.7 3,243.8 3,057.7
Class H 2,109.8 1,886.7 1,760.4
-------- -------- -------
Total $13,513.5 $10,000.5 $8,545.4
======== ======== =======
However, consistent with Delaware law, which governs the amount legally
available for the payment of dividends on the Corporation's common stock, the
Board of Directors has determined that such amount is materially higher than
the Corporation's capital surplus plus net income retained for use in the
business (less accumulated deficit).
At September 30, 1994, December 31, 1993, and September 30, 1993,
accumulated foreign currency translation adjustments, net unrealized gains on
marketable equity securities, and the effect of adopting SFAS No. 115 were as
shown below:
Sept. 30, Dec. 31, Sept. 30,
1994 1993 1993
-----------------------------------
(Dollars in Millions)
Accumulated foreign currency
translation adjustments ($66.1) ($494.4) ($429.2)
------ ------ ------
Net unrealized gains on
marketable equity securities 133.3 164.3 171.4
------ ------ ------
Effect of adopting SFAS No. 115:
Favorable cumulative effect at
January 1, 1994 241.0 - -
Ongoing unfavorable effect for the
1994 nine months (183.6) - -
------ ------ ------
Total SFAS No. 115 effect 57.4 - -
------ ------ -------
Total $124.6 ($330.1) ($257.8)
====== ====== ======
Note 14. Financial Instruments with Off-Balance-Sheet Risk
The following should be read in conjunction with Note 18 (Financial
Instruments with Off-Balance-Sheet Risk) appearing on page II-42 of GM's
Annual Report on Form 10-K for the year ended December 31, 1993.
The Corporation's financing and cash management activities subject it to
market rate risk from exposure to changes in interest rates. To manage these
exposures, the Corporation has entered into various financial instrument
transactions. The Corporation's objective of entering into these transactions
is to minimize interest expense while maintaining the desired level of
exposure to the risk of interest rate fluctuations. To achieve this
objective, the Corporation will at times use written options.
GM is an international corporation with operations in over 50 countries. GM
has foreign currency exposures at these operations related to buying, selling,
and financing in currencies other than the local currency. GM's most
significant foreign currency exposures relate to major North American
countries (Canada and Mexico), Western European countries (primarily Germany,
United Kingdom, Spain, Belgium, and France), Japan, and Brazil. The magnitude
of these exposures significantly varies over time depending upon the strength
of local automotive markets and sourcing decisions.
- 12 -
<PAGE>13
GENERAL MOTORS CORPORATION
AND SUBSIDIARIES
GM and its subsidiaries enter into agreements to manage certain foreign
exchange exposures in accordance with established policy guidelines. These
agreements primarily hedge debt, firm and anticipated commitments involving
vehicles, components, and fixed assets, and subsidiary dividends. As a
general practice, GM has not hedged the foreign exchange exposure related
either to the translation of overseas earnings into U.S. dollars or the
translation of overseas equity positions back to U.S. dollars. GM uses
foreign exchange forward contacts, it purchases foreign exchange options, and
may from time to time write offsetting options at exercise prices which limit
the effect of forward contracts and purchased options.
The fair value of foreign exchange forward contracts is estimated by
obtaining quotes for future contracts with similar terms, adjusted where
necessary for maturity differences. The fair value of such contracts were a
receivable of approximately $54 million and a payable of approximately $52
million at December 31, 1993, and a receivable of approximately $95 million
and a payable of approximately $155 million at December 31, 1992. The fair
value of foreign exchange options is estimated using active exchange
quotations for most options, and pricing models for illiquid options. Fair
value amounts were a receivable of approximately $12 million and a payable of
approximately $11 million at December 31, 1993, and a receivable of
approximately $19 million and a payable of approximately $8 million at
December 31, 1992.
At December 31, 1993 and 1992, the notional amount of interest rate and
mortgage contracts with off-balance-sheet risk was approximately $11,139
million and $6,620 million, respectively. The fair value of such agreements
at December 31, 1993 were a receivable of approximately $179 million and a
payable of approximately $210 million, and at December 31, 1992 a receivable
of approximately $95 million and a payable of approximately $142 million.
Note 15. Contingent Liabilities
The Corporation and its subsidiaries are subject to potential liability
under government regulations and various claims and legal actions which are
pending or may be asserted against them. Some of the pending actions purport
to be class actions. The aggregate ultimate liability of the Corporation and
its subsidiaries under these government regulations, and under these claims
and actions, was not determinable at September 30, 1994. In the opinion of
management, such liability is not expected to have a material adverse effect
on the Corporation's consolidated operations or financial position.
* * * * *
- 13 -
<PAGE>14
GENERAL MOTORS CORPORATION
AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
Results of Operations
The following management's discussion and analysis should be read in
conjunction with the management's discussion and analysis included in the
Corporation's 1993 Annual Report to the SEC on Form 10-K and its Quarterly
Reports on Form 10-Q for the first and second quarters of 1994. The
competitive position and environmental matters discussions included in Part I,
Item 1 of the 1993 Form 10-K are specifically incorporated by reference
herein. Reference should also be made to information disclosed in GM's
Current Reports on Form 8-K.
General Motors Corporation reported improved earnings in the third quarter
of 1994, compared with the same period last year, as overall business
conditions remained strong. GM's consolidated net income totaled $552.0
million, or $0.40 per share of GM $1-2/3 par value common stock, in the third
quarter of 1994. That compares with a reported net loss of $112.9 million, or
a loss of $0.49 per share, in the same period last year, which included
special items amounting to an unfavorable $288.5 million, or a loss of $0.39
per share. These items included an increase of $589.0 million, or an
unfavorable $0.83 per share of $1-2/3 par value common stock, to the
Corporation's plant-closing reserve; and labor-contract-related costs of
$143.8 million, or $0.20 per share; partially offset by the $444.3 million, or
$0.64 per share, favorable impact of an increase in the U.S. corporate income
tax rate.
GM's sales and revenues totaled a record $34,510.3 million in the third
quarter of 1994, an increase of 14.5% compared with the $30,137.5 million in
the third quarter of 1993. Gross-profit margin -- with General Motors
Acceptance Corporation (GMAC) on an equity basis -- was 13.5%, compared with
12.3% in the comparable period last year. The net-profit margin was 1.8% in
the third quarter of 1994, compared with a net-loss margin of 0.4% in the
third quarter last year. While sales were strong, results were adversely
impacted by new-model start-ups, capacity constraints, the lost production
resulting from strikes at two North American facilities, and higher selling,
general, and administrative expenses. The income tax credit in the third
quarter of 1994 is primarily a function of the low level of pre-tax income, a
low effective tax rate for foreign operations, and a favorable adjustment
related to book tax accruals which had been established in prior years. GM's
International Operations (IO) continued to be profitable in the third quarter,
but results were somewhat below last year's unusually high third-quarter
earnings level.
Consolidated net income for the nine-month-1994 period was $3,328.5 million,
or $3.41 per share of GM $1-2/3 par value common stock, including the $758.1
million unfavorable effect of Statement of Financial Accounting Standards
(SFAS) No. 112, Employers' Accounting for Postemployment Benefits, accounting
charge in the first quarter. That compares with reported net income of
$1,289.4 million, or $0.85 per share, for the prior-year nine-month period.
Excluding the impact of the SFAS No. 112 accounting charge, income for the
1994-nine-month period was $4,086.6 million, or $4.46 per share, compared with
$1,577.9 million, or $1.24 per share, in the first nine months of 1993,
excluding the special items enumerated above. Sales and revenues totaled
$112,397.9 million in the 1994 period, an increase of 11.3%, or $11,446.1
million, over 1993 sales and revenues of $100,951.8 million.
After preference stock dividend payments and the apportionment of earnings
attributable to GM Class E and Class H common stock, the income attributable
to $1-2/3 par value common stock in the 1994 third quarter amounted to $306.0
million, or $0.40 per share, compared with a third quarter 1993 loss of $347.0
million, or $0.49 per share. In the nine months of 1994, income attributable
to $1-2/3 par value common stock was $2,582.1 million, or $3.41 per $1-2/3 par
value share, compared with $615.9 million, or $0.85 per share, in the 1993
period. Excluding the first quarter accounting charge, nine-month 1994
earnings amounted to $3,333.4 million, an improvement of $2,717.5 million
($3.61 per $1-2/3 par value share) over the 1993 nine months, excluding the
special items.
- 14 -
<PAGE>15
GENERAL MOTORS CORPORATION
AND SUBSIDIARIES
Third quarter 1994 worldwide wholesale vehicle sales totaled 1,790,000
units, 8.1% more than the 1993 third quarter level of 1,656,000 units,
reflecting higher sales in all regions, as shown in the table below.
Worldwide wholesale vehicle sales of 6,144,000 units during the nine months of
1994 were up 411,000 units, or 7.2%, over the year ago period.
Third Quarter Nine Months
-------------- --------------
1994 1993 1994 1993
-------------- --------------
Worldwide Wholesale Sales (Units in Thousands)
United States
Cars 577 558 2,243 2,135
Trucks 436 362 1,444 1,297
----- ----- ----- -----
Total United States 1,013 920 3,687 3,432
Other North America 96 91 396 361
----- ----- ----- -----
Total North America 1,109 1,011 4,083 3,793
Overseas 681 645 2,061 1,940
----- ----- ----- -----
Total All Sources 1,790 1,656 6,144 5,733
===== ===== ===== =====
During the 1994 third quarter, GM vehicle deliveries of cars and trucks
worldwide were 1,997,000 units, compared with 1,903,000 units in the same
period last year, an increase of 4.9%. Worldwide GM vehicle deliveries of
cars and trucks during the nine months of 1994 were 6,341,000 units, 6.9%
above the 5,931,000 units delivered in the comparable 1993 period.
As shown in the following table, GMAC financed or leased worldwide 444,000
new passenger cars and trucks, a decrease of 8% from the comparable 1993
period.
Nine Months Ended
Units Financed or Leased Third Quarter September 30,
-------------- -----------------
by GMAC Worldwide 1994 1993 1994 1993
-------------- -----------------
(Units in Thousands)
United States 293 350 1,026 1,025
Outside the U.S. 151 133 471 401
---- --- ----- -----
Total GMAC 444 483 1,497 1,426
==== === ===== =====
During the third quarter of 1994, GMAC financed 23% of new General Motors
products delivered in the U.S., a 6 percentage point decrease from the same
period last year, while penetration for the first nine months of 1994
decreased to 25% of new GM deliveries, two percentage points lower than the
comparable 1993 period.
As detailed in the table below, third quarter 1994 worldwide employment
averaged 672,000 men and women, a 1.5% decrease from the 682,000 in the third
quarter of 1993, adjusted to include NCRS. Worldwide payrolls were $7,675.2
million, compared with $7,208.9 million in the comparable 1993 period, due to
increased overtime and increased wages from the 1993 contract. Nine month
average worldwide employment decreased by 26,000 men and women from the 1993
nine-month period, while 1994 worldwide payrolls totaled $23,506.6 million, a
5.2% increase over 1993 payrolls of $22,337.8 million.
Third Quarter Nine Months
------------- -------------
1994 1993 1994 1993
------------- -------------
(in thousands)
Average Worldwide Employment
GM (excluding units listed below) 493 505 512 532
GMAC 18 18 18 18
Electronic Data Systems Corporation (EDS) 78 71 74 72
GM Hughes Electronics Corporation (GMHE) 77 82 77 85
National Car Rental System Inc. (NCRS) 6 6 6 6
--- --- --- ---
Average Number of Employees 672 682 687 713
=== === === ===
- 15 -
<PAGE>16
GENERAL MOTORS CORPORATION
AND SUBSIDIARIES
Selling, general, and administrative expenses, with GMAC on an equity basis,
in the third quarter and nine months of 1994 were $289.6 million and $508.6
million, respectively, above the third quarter and nine-month 1993 amounts,
primarily due to higher advertising expense and higher administrative
expenses, reflecting business growth at EDS. On a percent of sales basis,
selling, general, and administrative expenses were 8.2% in the third quarter
and 7.3% in the nine months of 1994, down from the 8.4% in the third quarter
and 7.6% in the nine-month period of 1993.
Following are highlights of 1994 third-quarter and nine-month financial
performance by GM's major business sectors:
Nine Months Ended
Third Quarter September 30,
----------------- --------------------
Major Business Sector Results 1994 1993(1) 1994 1993(1)
- ------------------------------ ----------------- --------------------
(Dollars in Millions)
NAO Income (Loss) Before Special
Items and Accounting Change ($328.4) ($824.7) $905.2 ($1,027.8)
Reserve Increase - (589.0) - (589.0)
Contract Related - (143.8) - (143.8)
Incremental Tax Change - 457.1 - 457.1
----- ------- ------- -------
Income(Loss) Before Acctg.Change (328.4)(1,100.4) 905.2 (1,303.5)
Cumulative Effect of Acctg.Change - - (707.7) -
----- ------- ------- -------
NAO Income (Loss) (328.4)(1,100.4) 197.5 (1,303.5)
----- ------- ------- -------
I.O. Income 239.5 403.2 1,208.1 849.5
----- ------- ------- -------
GMAC Income Before Special Item
and Accounting Change 244.6 221.2 685.6 790.7
Incremental Tax Change - (16.4) - (16.4)
----- ------- ------- -------
Income Before Accounting Change 244.6 204.8 685.6 774.3
Cumulative Effect of Acctg.Change - - (7.4) -
----- ------- ------- -------
GMAC Income 244.6 204.8 678.2 774.3
----- ------- ------- -------
EDS Earnings Before Special Item 216.4 198.0 585.4 527.5
Incremental Tax Change - (6.4) - (6.4)
----- ------- ------- -------
EDS Earnings 216.4 191.6 585.4 521.1
----- ------- ------- -------
GMHE Earnings Before Special Item
and Accounting Change 244.2 214.0 824.0 635.3
Incremental Tax Change - 10.0 - 10.0
----- ------- ------- -------
Earnings Before Acctg. Change 244.2 224.0 824.0 645.3
Cumulative Effect of Acctg. Change - - (30.4) -
----- ------- ------- -------
GMHE Earnings 244.2 224.0 793.6 645.3
----- ------- ------- -------
Other (2)
Loss Before Accounting Change (64.3) (36.1) (121.7) (197.3)
Cumulative Effect of Acctg. Change - - (12.6) -
----- ------- ------- -------
Other Loss (64.3) (36.1) (134.3)
(197.3)
----- ------- ------- -------
Consolidated Net Income (Loss) $552.0 ($112.9) $3,328.5 $1,289.4
===== ======= ======= =======
CNI Before Special Items
and Accounting Change $552.0 $175.6 $4,086.6 $1,577.9
===== ======= ======= =======
CNI Before Accounting Change $552.0 ($112.9) $4,086.6 $1,289.4
===== ======= ======= =======
(1) Certain amounts for 1993 were reclassified to conform with 1994 sector
structure.
(2) Includes Power Products and Defense and purchase accounting adjustments.
North American Automotive Operations (NAO)
In the third quarter of 1994, NAO reported a loss of $328.4 million. This
compares with a loss of $1,100.4 million in the third quarter of 1993.
Excluding special items, NAO's net loss amounted to $824.7 million in the
- 16 -
<PAGE>17
GENERAL MOTORS CORPORATION
AND SUBSIDIARIES
third quarter of 1993. NAO's net-loss margin was 1.6% in the third quarter of
1994, compared with a reported 6.3% net-loss margin in the prior-year period.
Compared with the third quarter of 1993, NAO's results were favorably impacted
by wholesale vehicle sales that were 98,000 units higher, by continuing
progress in certain cost areas, and an adjustment related to book tax accruals
established in prior years. Partially offsetting these favorable factors were
higher engineering costs associated with GM's aggressive product programs,
increased overtime and premium-transportation costs, some strike-related
losses, and higher selling, general, and administrative expenses.
GM's share of the total U.S. vehicle market in the third quarter of 1994 was
31.5%, compared with 31.2% in the third quarter of 1993. Total U.S. retail
deliveries in the third quarter of 1994 were up 6.1% compared with the same
period last year, as NAO focused on the more-profitable retail vehicle sales.
GM's share of total U.S. car deliveries was 33.4% in the third quarter,
compared with 31.8% in the previous year's third quarter. The Corporation's
share of total U.S. truck deliveries was 28.8%, compared with 30.3% in the
same period last year, primarily due to continued capacity constraints.
September of 1994 marked the conclusion of GM's best U.S. model-year
performance since 1989, with all-time record deliveries of 1.9 million trucks
and more than 3 million passenger cars. 1994-model year deliveries increased
9.3% compared with the 1993 model year. The market remains strong in North
America, and GM's market share increased in both the third quarter of 1994 and
the 1994-model year compared with the previous year, despite intense
competition and capacity constraints that limited production of some key
models.
Nine-month 1994 NAO earnings were $197.5 million, an improvement of $1,501.0
million over the 1993 nine-month loss, despite the unfavorable effect of the
$707.7 million accounting charge in the 1994 first quarter. Excluding the
accounting change in 1994 and special items in 1993, NAO earnings improved
$1,933.0 million period to period. GM is pleased with the market response to
its products in North America and in particular the strong consumer reaction
to the significant number of new vehicles introduced this year. Equally
important, GM's internal measurements show that the 1995-model start-up was
the best ever from a product-quality perspective. The focus on quality is
evident as recent customer surveys give GM all-time-high ratings in sales
satisfaction, and GM is among the best in service, and overall customer
satisfaction. GM is encouraged about the outlook for future sales as GM
brings up to full production new models that are more competitive and more
profitable.
International Automotive Operations (IO)
IO posted net income of $239.5 million in the third quarter of 1994,
compared with 1993's third-quarter earnings of $403.2 million. International
Operations remains a strong contributor to the Corporation, and sales in
Europe and Latin America continue to improve. International Automotive
Operation's net-profit margin was 3.5% in the 1994-third-quarter period, a
deterioration of 3.3 percentage points from the 6.8% net-profit margin in the
year-ago period. These results were affected by an unfavorable sales mix,
costs associated with further employment-separation programs in Europe to
reduce the number of workers, which are part of the continued implementation
of lean-manufacturing strategies, product- and powertrain-development programs
in Europe, and less-favorable tax positions in Europe and Latin America.
GM's Opel/Vauxhall passenger-car market share in Western Europe was 12.1% in
the third quarter of 1994, compared with 13.0% in the third quarter last year.
The overall car market in Western Europe is recovering from last year's sharp
decline, and GM expects a continued increase in new car sales for the balance
of the year. Worldwide retail sales of the Saab lineup increased 20.6% in the
third quarter of 1994, compared with the year earlier period.
- 17 -
<PAGE>18
GENERAL MOTORS CORPORATION
AND SUBSIDIARIES
Nine month 1994 IO income was $1,208.1 million compared to $849.5 million in
the nine months of 1993, with net-profit margins increasing from 4.5% in the
1993 period to 6.0% in the 1994 nine-month period. During the first nine
months of 1994, Opel/Vauxhall models remained number one in the Western Europe
passenger car market, while GM sales in Latin America remained strong despite
continued capacity constraints, with vehicle sales reaching an all-time record
in Brazil.
General Motors Acceptance Corporation
GMAC serves the financing and insurance needs of GM customers. The
Corporation hereby encourages reference to the GMAC Third Quarter 1994
Quarterly Report on Form 10-Q filed with the Securities and Exchange
Commission.
GMAC reported third-quarter 1994 earnings of $244.6 million, compared with
$204.8 million in the prior-year period, including an unfavorable adjustment
of $16.4 million for the incremental tax rate change in 1993. GMAC's results
in the third quarter of 1994, when compared with the same period a year ago,
reflect higher earnings in U.S. auto-financing operations and continued
favorable loan-loss experience. For the nine months of 1994, GMAC's
consolidated net income totaled $678.2 million, including the $7.4 million
unfavorable effect of the first quarter SFAS No. 112 accounting change, $96.1
million below the same period last year, which included the $16.4 million
special item.
Net income from financing operations, including GMAC Mortgage Corporation
(GMACM) results, totaled $211.6 million for the 1994 third quarter. The $45.4
million increase from the same period last year reflects higher earnings in
U.S. auto financing operations largely due to a more favorable funding mix,
resulting from greater investor confidence in GM and GMAC, and continued
favorable loan-loss experience. In addition, the third quarter of 1993 was
unfavorably affected by a cumulative adjustment for the statutory increase in
the U.S. Federal income tax rate effective for the 1993 tax year. For the
first nine months of 1994, net financing income (excluding the cumulative
impact of SFAS No. 112) totaled $589.0 million in comparison to $630.1 million
during the same period in 1993.
During the third quarter of 1994, GMAC financed or leased worldwide 444,000
new passenger cars and trucks, a decrease of 8% from the comparable 1993
period, as shown in the table on page 15. The decrease in retail and lease
unit financing and penetration reflects continued intense competitive
pressures within a robust sales environment.
Net income from insurance operations was $33.0 million for the third quarter
of 1994, a $5.6 million decrease as compared to the third quarter of 1993,
with the year-to-year change primarily reflective of lower underwriting
results due to accelerated amortization of credit insurance policy acquisition
costs. For the first nine months of 1994, net income from insurance
operations (excluding the cumulative impact of SFAS No. 112) was $96.6
million, compared with $144.2 million for the same period in 1993. The
decline in net income reflects non-recurring capital gains recognized in the
first nine months of 1993, only partially offset by lower insurance loss
experience in the 1994 period.
Financing revenue totaled $2,351.5 million and $6,819.2 million for the
third quarter and first nine months of 1994, respectively, $164.3 million
greater than the amount reported for the comparable 1993 quarter and $144.4
million greater than the amount recorded for the 1993 nine month period. The
year-to-year increase is primarily attributable to increases in leasing
revenues, resulting from continued growth in operating lease activity and
greater wholesale revenue due to GMAC's resumption of dealer wholesale
inventory formerly financed by GM. This increase was partially offset by
reduced lease financing revenues due to General Motors' reduction in fleet
sales to daily rental companies.
Interest and discount expense amounted to $1,041.6 million for the third
quarter of 1994, compared with $1,114.1 million for the same period in 1993.
Interest and discount expense totaled $3,096.9 million for the first nine
- 18 -
<PAGE>19
GENERAL MOTORS CORPORATION
AND SUBSIDIARIES
months of 1994, a decrease of 14.8% from the comparable period in 1993. The
average cost of funds worldwide for the third quarter of 1994 declined to
6.63%, a decrease of 32 basis points from a year earlier. The worldwide cost
of funds averaged 6.56% for the first nine months of 1994, down 37 basis
points from a year ago. Total borrowing costs for United States operations
averaged 6.41% for the third quarter and 6.32% for the first nine months of
1994, compared with 6.56% and 6.53%, respectively, for the same 1993 periods.
The decline in borrowing costs reflects a more favorable short-term funding
mix resulting from an increasingly positive perception of GMAC's financial
position by the capital markets.
Depreciation expense on operating leases, primarily GMAC's SmartLease
program, amounted to $861.4 million for the third quarter of 1994, compared
with $692.4 million for the same period in 1993. For the first nine months of
1994, depreciation expense on operating leases totaled $2,315.5 million
compared to $1,980.3 million for the first nine months of 1993, with the
increase attributable to continued successful marketing of the SmartLease
program in the United States and Canada.
Other income, including gains on receivable sales, as well as servicing fees
and other income related to sold finance receivables, amounted to $426.2
million and $1,215.7 million for the third quarter and first nine months of
1994, compared with $631.7 million and $2,042.7 million, respectively, for the
same periods of 1993. The decreases are primarily attributable to a quarter-
to-quarter decrease of $143.8 million and a nine months decrease of $458.1
million due to lower interest and service fees from General Motors as a result
of the termination of the financing agreement whereby GM had previously
assumed some dealer wholesale inventory financing. This reduction is offset
by increased financing revenues on wholesale receivables. Capital gains at
MIC for the nine month period ended September 30, 1994 decreased $129.2
million from the comparable prior year period, primarily reflecting non-
recurring capital gains recognized during the first nine months of 1993.
Other operating expenses, including salaries and benefits and insurance
losses and loss adjustment expenses, totaled $792.2 million for the third
quarter and $2,249.4 million for the first nine months of 1994, $8.9 million
and $47.1 million lower than the respective comparable 1993 periods. The
decrease is primarily attributable to lower losses incurred on commercial
lines and lower commission expenses for originated mortgages, as well as
reduced amortization of purchased mortgage servicing rights.
GMAC has continued to have significantly improved charge-off and recovery
experience. Based on these continued improvements, the Company adjusted its
reserves accordingly which resulted in a provision for losses on finance
receivables of ($8.5) million for the third quarter of 1994, compared to a
provision of $116.7 million in the same period of 1993. For the first nine
months of 1994, the provision for losses on finance receivables totaled $110.4
million as compared to $292.6 million for the first nine months of 1993.
Total net chargeoffs for the third quarter and first nine months of 1994 were
$44.8 million and $149.5 million, respectively, as compared to $93.4 million
and $271.5 million in the third quarter and first nine months of 1993.
Consolidated earning assets totaled $77,390.7 million at September 30, 1994,
up $3,029.2 million from $74,361.5 million at September 30, 1993 and up
$2,606.9 million from the December 31, 1993 level of $74,783.8 million. The
year-to-year increase can be largely attributed to an increase in operating
lease assets due to the continued acceptance and popularity of the SmartLease
program, offset by lower finance receivables. Operating lease assets, net of
depreciation, offered principally under the GMAC SmartLease program, increased
to $16,481.8 million at September 30, 1994 from $11,363.5 million and
$10,755.1 million at December 31, 1993 and September 30, 1993, respectively.
The increase primarily reflects growth in the U.S. and Canadian markets,
driven by continued consumer acceptance of leasing and enhanced manufacturer's
subvented programs.
Wholesale receivables financed by GMAC, primarily dealer vehicle
inventories, were $17,003.0 million at September 30, 1994, compared to
$20,673.6 million at December 31, 1993 and $10,272.2 million at September 30,
- 19 -
<PAGE>20
GENERAL MOTORS CORPORATION
AND SUBSIDIARIES
1993. The level of wholesale receivables at the end of the third quarter of
1994, as compared to the asset levels at September 30, 1993, reflects the
resumption by GMAC of dealer wholesale inventory financing previously financed
by General Motors, offset by lower levels of dealer inventory and sales of
wholesale finance receivables. The Company sold wholesale receivables, which
it also continues to service, totaling $2.2 billion during 1994.
Cash and cash equivalents, which primarily include short term borrowed funds
in excess of requirements invested in short-term marketable securities,
totaled $1,774.4 million at September 30, 1994. This compared to $4,028.1
million at December 31, 1993 and $3,068.7 million at September 30, 1993. The
decrease is due to a strategy that seeks to reduce the liquidity portfolio and
has been undertaken as a direct result of the Company's improved access to the
capital markets. At September 30, 1994, consolidated worldwide retail finance
receivables, net of unearned income, totaled $28.0 billion, unchanged from
September 30, 1993 but up $2.0 billion from year-end 1993. The Company
continues to utilize an asset securitization program as an alternative funding
source and as a result sold retail receivables with principal in the United
States aggregating $2.7 billion and $9.8 billion, respectively, during the
nine month periods ended September 30, 1994 and September 30, 1993.
Consolidated worldwide capital leasing and lease financing receivables, net
of unearned income, at September 30, 1994 were $3,256.8 million, down $522.1
million and $971.7 million from December 31, 1993 and September 30, 1993,
respectively. These reductions are primarily reflective of General Motors'
reduction in fleet sales to daily rental companies and the resultant GMAC
fleet financing reduction.
GMAC's total borrowings were $61,624.9 million at September 30, 1994,
compared with $61,207.2 million at September 30, 1993 and $62,773.2 million at
December 31, 1993. Approximately 79.1% represented funding for operations in
the United States, with the remaining 20.9% of borrowings being allocated
among Canada (6.7%), Germany (6.5%), and other countries (7.7%). Total short-
term debt worldwide at September 30, 1994 amounted to $17,606.9 million, down
from $17,733.8 million at December 31, 1993 and up from $14,882.5 million at
September 30, 1993.
Summary Financial Data - GMAC
Condensed GMAC Consolidated Nine Months Ended
Statement of Income Third Quarter September 30,
---------------- -----------------
1994 1993 1994 1993
---------------- -----------------
(Dollars in Millions)
Financing Revenue
Retail and lease financing $660.7 $959.2 $2,167.2 $2,910.6
Leasing 1,300.4 980.8 3,486.0 2,869.6
Wholesale and term loans 390.4 247.2 1,166.0 894.6
------- ------- ------- -------
Total financing revenue 2,351.5 2,187.2 6,819.2 6,674.8
Interest and discount 1,041.6 1,114.1 3,096.9 3,635.6
Depreciation on operating leases 861.4 692.4 2,315.5 1,980.3
------- ------- ------- -------
Net financing revenue 448.5 380.7 1,406.8 1,058.9
Insurance premiums earned 282.6 300.9 848.2 857.6
Other income 426.2 631.7 1,215.7 2,042.7
------- ------- ------- -------
Net Financing Revenue and Other 1,157.3 1,313.3 3,470.7 3,959.2
Expenses 790.5 960.4 2,399.4 2,693.2
------- ------- ------- -------
Income before income taxes 366.8 352.9 1,071.3 1,266.0
Income taxes 122.2 148.1 385.7 491.7
------- ------- ------- -------
Income before cumulative effect of
accounting change 244.6 204.8 685.6 774.3
Cumulative effect of accounting change - - (7.4)* -
------- ------- ------- -------
Net Income $244.6 $204.8 $678.2 $774.3
======= ======= ======= =======
*Effective January 1, 1994, GMAC adopted SFAS No. 112.
Certain amounts for 1993 have been reclassified to conform with 1994
classifications.
- 20 -
<PAGE>21
GENERAL MOTORS CORPORATION
AND SUBSIDIARIES
Condensed GMAC Consolidated
Balance Sheet Sept. 30, Dec. 31, Sept. 30,
1994 1993 1993
-------------------------------------
(Dollars in Millions)
Cash and cash equivalents $1,774.4 $4,028.1 $3,068.7
Investments in securities 3,513.4 3,449.7 3,477.2
Finance receivables - net 51,567.5 54,134.8 46,036.3
Receivables - General Motors Corporation1,296.4 1,355.5 10,043.2
Other assets 23,057.0 17,782.7 16,901.5
-------- -------- --------
Total Assets $81,208.7 $80,750.8 $79,526.9
======== ======== ========
Short-term debt $30,451.5 $35,084.4 $32,997.4
Accounts payable and other
liabilities (including
GM and affiliates - $2,712.9,
$2,487.5 and $2,113.2) 11,739.5 10,125.3 10,412.6
Long-term debt 31,173.4 27,688.8 28,209.8
Stockholder's equity 7,844.3 7,852.3 7,907.1
-------- -------- --------
Total Liabilities and
Stockholder's Equity $81,208.7 $80,750.8 $79,526.9
======== ======== ========
Certain amounts for September 1993 have been reclassified to conform with 1994
classifications.
Condensed GMAC Consolidated Nine Months Ended
Statement of Cash Flows September 30,
--------------------
1994 1993
--------------------
(Dollars in Millions)
Net Cash Provided by Operating Activities $3,979.9 $3,738.4
-------- --------
Cash Flows from Investing Activities
Finance receivables-acquisitions (114,308.9) (75,017.4)
-liquidations 112,614.9 76,491.4
Notes receivable from General Motors Corporation 59.1 1,520.0
Operating leases-acquisitions (9,742.2) (4,882.1)
-liquidations 2,544.4 1,953.3
Investments in securities-acquisitions (9,707.2) (9,021.9)
-liquidations 9,563.6 8,706.7
Net increase in short-term investments 6.2 -
Proceeds from sales of receivables 4,747.0 9,368.7
Due and deferred from receivable sales 257.7 (195.1)
Other 226.4 677.1
-------- --------
Net Cash Provided by (Used in) Investing Activities (3,739.0) 9,600.7
-------- --------
Cash Flows from Financing Activities
Debt with original maturities 90 days and over
-proceeds 37,791.7 26,666.6
-liquidations (37,803.3) (33,934.8)
Debt with original maturities less than 90 days
-net change (1,764.5) (5,865.3)
Cash dividends paid to GM (750.0) (1,000.0)
Proceeds from issuance of stock 35.0 -
-------- --------
Net Cash Used in Financing Activities (2,491.1) (14,133.5)
-------- --------
Effect of exchange rate changes on cash
and cash equivalents (3.5) (8.0)
-------- --------
Net decrease in cash and cash equivalents (2,253.7) (802.4)
Cash and cash equivalents at beginning of the period 4,028.1 3,871.1
-------- --------
Cash and cash equivalents at end of the period $1,774.4 $3,068.7
======== ========
Certain amounts for 1993 have been reclassified to conform with 1994
classifications.
- 21 -
<PAGE>22
GENERAL MOTORS CORPORATION
AND SUBSIDIARIES
Electronic Data Systems Corporation
EDS reported record earnings for the third quarter of 1994, with net income
totaling $216.4 million, or $0.45 per share of GM Class E common stock. That
compares with earnings of $191.6 million, or $0.40 per share, in the third
quarter of 1993, which included an unfavorable $6.4 million for the
incremental tax rate change. The results reflect continued strong business
growth, particularly in Europe and the Asia/Pacific region. Revenues from
EDS' non-GM business were up 30% over 1993 third-quarter levels. New contract
signings reached $1.38 billion in the third quarter of 1994. Record nine
month EDS earnings of $585.4 million resulted in record earnings per Class E
share of $1.22, compared with $521.1 million, including the unfavorable $6.4
million tax item, or $1.09 per share a year earlier.
Earnings per share attributable to GM Class E common stock are based on
the Available Separate Consolidated Net Income of EDS as described in Note 6
to the Financial Statements. Reference should be made to EDS' Management's
Discussion and Analysis in Exhibit 99(a) which is incorporated herein by
reference.
EDS financial statements do not include the amortization of the $2,179.5
million initial cost to GM of EDS customer contracts, computer software
programs, and other intangible assets, including goodwill, arising from the
acquisition of EDS by GM in 1984. This cost, plus the $343.2 million cost of
contingent notes purchased in 1986, less certain income tax benefits, was
assigned principally to intangible assets, including goodwill, and is being
amortized by GM over the estimated useful lives of the assets acquired. The
costs assigned to customer contracts and computer software programs were fully
amortized prior to 1992. Such amortization is charged against Other Sector
Income.
Summary Financial Data - EDS Nine Months Ended
Third Quarter September 30,
---------------- -----------------
1994 1993 1994 1993
---------------- -----------------
(Dollars in Millions
Except Per Share Amounts)
Revenues
Systems and other contracts
GM and affiliates $879.5 $787.1 $2,577.4 $2,467.8
Outside customers 1,643.3 1,283.0 4,472.1 3,737.5
Interest and other income 42.1 14.2 88.7 42.7
------- ------- ------- -------
Total Revenues 2,564.9 2,084.3 7,138.2 6,248.0
Costs and Expenses 2,226.8 1,784.9 6,223.6 5,433.8
Income Taxes 121.7 107.8 329.2 293.1
------- ------- ------- -------
Separate Consolidated Net Income $216.4 $191.6 $585.4 $521.1
======= ======= ======= =======
Available Separate Consolidated Net Income*
Average number of shares of Class
E common stock outstanding
(in millions) (Numerator) 261.2 246.6 259.7 239.4
Class E dividend base (in millions)
(Denominator) 481.7 480.5 481.6 480.2
Available Separate Consolidated
Net Income $117.3 $98.4 $315.9 $260.2
===== ==== ===== =====
Earnings Attributable to Class E
Common Stock on a Per Share Basis $0.45 $0.40 $1.22 $1.09
==== ==== ==== ====
Cash dividends per share of Class E
common stock $0.12 $0.10 $0.36 $0.30
==== ==== ==== ====
* Available Separate Consolidated Net Income is determined quarterly.
- 22 -
<PAGE>23
GENERAL MOTORS CORPORATION
AND SUBSIDIARIES
GM Hughes Electronics Corporation
GMHE earned $244.2 million in the third quarter of 1994, or $0.61 per share
of GM Class H common stock. That compares with earnings of $224.0 million,
including a favorable $10.0 million for the incremental tax rate change, in
the third quarter of 1993, or $0.56 per share. The third-quarter-1994
financial results reflect improving operating performance as earnings
increased despite nearly flat revenues during the period. Continued strength
in the domestic automotive market was offset primarily by the declining
defense market. For the nine months of 1994, GMHE earnings were $793.6
million, including the $30.4 million unfavorable effect of SFAS No. 112, or
$1.98 per share of GM Class H common stock, on revenues of $10,477.7 million.
In the nine months of 1993, earnings were $645.3 million, including the
favorable $10.0 million tax item, or $1.61 per share of GM Class H common
stock, on revenues of $9,816.5 million.
Earnings per share attributable to GM Class H common stock are based on
the Available Separate Consolidated Net Income of GMHE as described in Note 6
to the Financial Statements. Reference should be made to GMHE's Management's
Discussion and Analysis in Exhibit 99(b) which is incorporated herein by
reference.
Summary Financial Data - GMHE Nine Months Ended
Third Quarter September 30,
------------------ ------------------
1994 1993 1994 1993
------------------ ------------------
(Dollars in Millions
Except Per Share Amounts)
Revenues/Net sales
Outside customers $2,264.1 $2,293.9 $6,760.5 $6,591.9
GM and affiliates 1,056.7 925.8 3,638.9 3,106.8
Other income-net 33.7 100.2 78.3 117.8
------- ------- ------- -------
Total Revenues 3,354.5 3,319.9 10,477.7 9,816.5
Costs and Expenses 2,993.1 2,985.2 9,238.4 8,854.0
Income Taxes 148.2 141.6 508.2 410.0
------- ------- ------- -------
Income before cumulative
effect of accounting change 213.2 193.1 731.1 552.5
Cumulative effect of acctg. change - - (30.4)(1) -
------- ------- ------- -------
Net Income 213.2 193.1 700.7 552.5
Adjustments to exclude the effect
of GM purchase accounting
adjustments related to Hughes(2) 31.0 30.9 92.9 92.8
------- ------- ------- -------
Earnings Used for Computation of Available
Separate Consolidated Net Income $244.2 $224.0 $793.6 $645.3
======= ======= ======= =======
Available Separate Consolidated Net Income (3)
Average number of shares of Class H
common stock outstanding
(in millions) (Numerator) 92.7 87.4 91.7 88.5
Class H dividend base (in millions)
(Denominator) 399.9 399.9 399.9 399.9
Available Separate Consolidated
Net Income $56.6 $48.9 $181.9 $143.3
==== ==== ===== =====
Earnings Attributable to Class H
Common Stock on a Per Share Basis
Before cumulative effect of
accounting change $0.61 $0.56 $2.06 $1.61
Cumulative effect of acctg. change - - (0.08)(1) -
---- ---- ---- ----
Net earnings attributable
to Class H common stock $0.61 $0.56 $1.98 $1.61
==== ==== ==== ====
Cash dividends per share of Class H
common stock $0.20 $0.18 $0.60 $0.54
==== ==== ==== ====
Reference should be made to the notes on the next page.
- 23 -
<PAGE>24
GENERAL MOTORS CORPORATION
AND SUBSIDIARIES
(1) Effective January 1, 1994, GMHE adopted SFAS No. 112 ($30.4 million or
$0.08 per share).
(2) Amortization of intangible assets arising from GM's acquisition of
Hughes.
(3) Available Separate Consolidated Net Income is determined quarterly.
Liquidity and Capital Resources
Cash and cash equivalents, including GMAC, at September 30, 1994 amounted
to $9,806.1 million, compared with $13,790.5 million at December 31, 1993 and
$10,452.3 million at September 30, 1993. The decrease in 1994 was due to an
excess of net cash used in investing and financing activities over the net
cash provided by operating activities. Net cash provided by operating
activities was $6,851.4 million in the nine months of 1994, compared to
$9,358.7 million in the 1993 period, reflecting pension contributions in
excess of pension expense, increases in accounts receivable, inventories,
contracts in process, and other investments and miscellaneous assets,
partially offset by higher net income before the accounting change and higher
income taxes payable.
Net cash used in investing activities in the 1994 period amounted to
$9,188.4 million, consisting primarily of capital expenditures and the net
increase in equipment on operating leases, reflecting the continued acceptance
and popularity of the GMAC SmartLease program. Net cash provided by investing
activities amounted to $4,010.5 million in 1993 primarily due to the net
reduction in finance receivables (resulting from sales of finance receivables)
exceeding capital expenditures and the net increase in equipment on operating
leases. Total capital expenditures were $4,661.6 million in the nine months
of 1994 compared with $4,423.3 million in the 1993 period. Net cash used in
financing activities of $1,649.0 million in the 1994 nine-month period
primarily reflected the net decrease in short-term loans payable of $1,761.7
million and cash dividends paid to stockholders of $839.1 million, offset in
part by $1,113.7 million in proceeds from issuing common stocks, primarily for
employee benefit plans. Net cash used in financing activities of $14,007.6
million in the 1993 period primarily reflected the net decrease in short-term
loans payable of $7,881.8 million and a net decrease in long-term debt of
$5,060.1 million.
During the first nine months of 1994, notes and loans payable decreased
$1,259.0 million to $69,182.2 million at September 30, 1994 from a balance of
$70,441.2 million at December 31, 1993 reflecting primarily a net decrease in
short-term loans payable. GM's fully consolidated ratio of debt to
stockholders' equity (excluding stocks subject to repurchase) was 7.19 to 1 at
September 30, 1994 compared to 12.58 to 1 at December 31, 1993. Refer to Note
1 to the Consolidated Financial Statements for a description of the
Corporation's accounting policies for related financial instruments. Note 8
to the Consolidated Financial Statements contains additional information
regarding GM's notes and loans payable at year end, including the impact of
such financial instruments.
On April 19, 1994, Standard & Poor's Corporation (S&P) revised its ratings
outlook from negative to positive and reaffirmed its ratings of General Motors
Corporation and related entities. S&P currently rates the senior debt of GM,
GMAC, and GMHE as BBB+ within the ten investment grade ratings available for
long-term debt. The commercial paper of GMAC, GMHE, and EDS is currently
rated A-2 within the four investment grade ratings for commercial paper. GM's
preference stock is rated BBB.
A security rating is not a recommendation to buy, sell, or hold securities
and may be subject to revision or withdrawal at any time by the assigning
rating organization. Each rating should be evaluated independently of any
other rating.
GM contributed $3.3 billion to its U.S. pension plans during the third
quarter of 1994 for a total of $5.2 billion in pension contributions during
the first nine months of 1994. Even with the pension contributions, the
Corporation's net liquidity remained strong in the third quarter of 1994.
With GMAC on an equity basis, cash and marketable securities totaled $9,321.9
million at the end of the third quarter, compared with $8,158.0 million at
- 24 -
<PAGE>25
GENERAL MOTORS CORPORATION
AND SUBSIDIARIES
September 30, 1993, and $12,643.4 million at June 30, 1994. GM's cash
position continues to strengthen and GM plans to maintain all-important future
product programs utilizing improved capital-spending efficiencies, while at
the same time improving the balance sheet.
GM and certain of its subsidiaries and affiliates maintain various
syndicated bank credit facilities which in aggregate provide $26.8 billion of
committed credit availability. Of this amount, $3.0 billion is directly
available to the Corporation and the remainder is available to GMAC and its
subsidiaries and affiliates and other GM subsidiaries and affiliates
worldwide.
The Corporation's policy is to distribute dividends on its $1-2/3 par
value common stock based on the outlook and indicated capital needs of the
business. With respect to Class E and Class H common stocks, the
Corporation's current policy is to pay aggregate annual cash dividends
approximately equal to 30% and 35% of the Available Separate Consolidated Net
Income of EDS and GMHE, respectively, for the prior year. In February 1994,
the Board of Directors increased the quarterly dividends on Class E common
stock from $0.10 per share to $0.12 per share and on Class H common stock from
$0.18 per share to $0.20 per share. Notwithstanding the current dividend
policy, the dividends paid and to be paid on the Class H common stock during
1994 and 1993 exceeds 35% of the Available Separate Consolidated Net Income
(Loss) of GMHE for the preceding year (excluding the effect of the $749.4
million after-tax special restructuring charge at Hughes in 1992).
A third quarter cash dividend on $1-2/3 par value common stock of $0.20
per share was paid on September 10, 1994. On November 7, 1994, the Board of
Directors declared a cash dividend of $0.20 per share on $1-2/3 par value
common stock for the fourth quarter of 1994 payable December 10, 1994. The
dividend continues the level established in the fourth quarter of 1992, and
brings 1994 cash dividends to $0.80 per share, the same as in 1993.
A third quarter cash dividend on Class E common stock of $0.12 per share
was paid on September 10, 1994. On November 7, 1994, the Board of Directors
also declared a cash dividend of $0.12 per share on Class E common stock
payable December 10, 1994. This continues the level established in the first
quarter of 1994 and brings 1994 cash dividends to $0.48 per share compared
with $0.40 per share in 1993.
A third quarter cash dividend on Class H common stock of $0.20 per share
was paid on September 10, 1994. On November 7, 1994, the Board of Directors
also declared a cash dividend of $0.20 per share on Class H common stock
payable December 10, 1994. This continues the level in effect since the first
quarter of 1994 and brings 1994 cash dividends to $0.80 per share, compared
with $0.72 per share in 1993.
General Motors converted all 17,825,000 outstanding shares of its Series A
Conversion Preference Stock (Preference Equity Redemption Cumulative Stock or
PERCS) into shares of GM $1-2/3 par value common stock on June 18, 1994. GM
originally issued this stock in June 1991 at a price of $41.375 per share.
Holders of the Preference Stock received 0.992435 shares of GM $1-2/3 par
value common stock for each share of Preference Stock called for conversion,
plus $0.1655 in cash in payment of the accrued and unpaid dividend (covering
the June 1 to June 18 period). Fractional shares of GM $1-2/3 par value
common stock were paid in cash. When all preference stock has been converted,
a total of 17.7 million shares of GM $1-2/3 par value common stock will have
been issued in this conversion.
Book value per share of $1-2/3 par value common stock increased to $7.32
at the end of the 1994 third quarter from $1.65 at the end of 1993. Book
value per share of Class E common stock increased to $0.93 from $0.21 at the
end of 1993 and book value per share of Class H common stock increased to
$3.66 from $0.83 at the end of 1993.
Under SFAS No. 87, Employers' Accounting for Pensions, any year-to-year
movement in the rate of interest on long-term, high-quality corporate bonds
necessitates a change in the discount rate used to calculate the actuarial
- 25 -
<PAGE>26
GENERAL MOTORS CORPORATION
AND SUBSIDIARIES
present value of the plans' obligations. This annual requirement to reset the
discount rate in line with movements in market interest rates can result in
considerable volatility of the discount rate used in this calculation and
consequently in the amount of the plans' obligations under SFAS No. 87. The
Corporation's worldwide unfunded pension liability at December 31, 1993, as
calculated under SFAS No. 87, increased by a net of $8.3 billion from $14.0
billion at December 31, 1992 to $22.3 billion. The single largest cause of
this increase in GM's unfunded liability was the general decline in long-term
interest rates which, at October 1, 1993, in the U.S. were at their lowest
level in approximately 20 years. The approximate 190 basis point increase in
long-term interest rates in the U.S. which has occurred since the last
measurement date of GM's pension plans through November 11, 1994, if
maintained, would decrease GM's reported unfunded pension liabilities at year-
end 1994 by $9.5 billion. Other factors that influence the unfunded pension
liability include the actual pension plan contributions and return on pension
investments during the year, the expected normal growth in the pension
liability, and employee turnover, retirement, and mortality experience.
Additionally, the measurement date on which the Corporation's year-end funded
status is based has been changed from October 1 to December 31 for its
principal U.S. plans. The purpose of this change is to align the SFAS No. 87
measurement date with calendar year financial statement reporting. The impact
of this change on the Corporation's 1994 net income is expected to be
immaterial.
Assuming the foregoing estimated decrease in the unfunded liability
occurs, the Corporation estimates that its minimum pension liability
adjustment to stockholders' equity would decrease by about $2.2 billion at
December 31, 1994, from the $5.3 billion adjustment reported at year-end 1993
to approximately $3.1 billion.
On May 11, 1994, the Corporation reached an agreement with the Pension
Benefit Guaranty Corporation (PBGC) which could lead to incremental cash and
stock contributions of approximately $10 billion to its U.S. hourly pension
plan in the near term. The funding proposal includes $4 billion in cash plus
a contribution of approximately 177 million shares of Class E common stock.
At the November 11 NYSE closing price of $35-1/8, 177 million shares of Class
E common stock would have a value of $6.2 billion. GM has already satisfied
its 1994 Employee Retirement Income Security Act (ERISA) minimum funding
obligation with a cash contribution of $1.9 billion to its U.S. hourly pension
plan in the first quarter of 1994. The funding proposal would be in addition
to this ERISA minimum contribution. In the third quarter, GM contributed $3.3
billion in cash to its U.S. pension plans bringing total cash contributions
for the year to $5.2 billion. Subject to certain approvals, GM may designate
the additional $3.3 billion cash contribution as part of the $4 billion cash
funding required under the PBGC agreement.
GM's ability to make the contribution as planned is contingent upon
receiving approval from the U.S. Department of Labor (DOL), and other
conditions. GM has filed its application with the DOL. The proposed
prohibited transaction exemption has been made available to the public on
November 10, 1994. Under the terms of the agreement with the PBGC, GM will
defer the use of funding credits that would result from the incremental cash
and stock contributions. Consequently, GM will continue to make regular cash
contributions to its pension plans over the next several years. The PBGC
agreement also provides flexibility to GM by granting a release of EDS from
liability, if any, to the PBGC under GM's U.S. pension plans in the event EDS
were to leave the GM corporate group under certain circumstances. In
addition, GM will seek relief from the excise tax that can apply when large
contributions are made to pension plans. The PBGC reform bill (HR3396)
currently pending before Congress proposes this relief. If GM obtains the
necessary government approval, the stock contribution would require approval
by the GM Board of Directors. No assurances can be given at this time that
the approvals will be obtained.
- 26 -
<PAGE>27
GENERAL MOTORS CORPORATION
AND SUBSIDIARIES
The increase in long-term interest rates described above similarly impacts
the calculation of the Corporation's postretirement health care obligations
under SFAS No. 106, Employers' Accounting for Postretirement Benefits Other
Than Pensions. The 165 basis point increase in long-term corporate bond rates
that had occurred for the twelve months ending October 1, 1994 would decrease
GM's accumulated postretirement benefit obligation, which was $45.6 billion at
December 31, 1993, by approximately $8 billion. Further, any change in the
accumulated postretirement benefit obligation would have no impact on GM's
stockholders' equity in 1994 and no cash impact. Although the same interest
rate factors affect the accounting liabilities for pensions and other
postretirement benefits, the estimated decrease related to SFAS No. 106 could
also be affected by future national health care reform initiatives.
Neither the estimated decrease in the Corporation's unfunded pension
obligations under SFAS No. 87 nor the estimated decrease in the Corporation's
postretirement obligations under SFAS No. 106 would have an impact on the
earnings to be reported by the Corporation for 1994. However, in accordance
with applicable accounting standards, any change in these obligations would
impact the Corporation's earnings in 1995 and subsequent years as a result of
their impact on the non-cash expense portions of pension and other
postretirement benefits.
Refer to Note 1 to the Consolidated Financial Statements for a description
of the Corporation's accounting policies regarding foreign exchange financial
instruments. Note 14 to the Consolidated Financial Statements includes
additional information regarding the Corporation's management of foreign
exchange exposures and year-end fair value amounts of such financial
instruments.
- 27 -
<PAGE>28
GENERAL MOTORS CORPORATION
AND SUBSIDIARIES
GENERAL MOTORS OPERATIONS WITH GMAC ON AN EQUITY BASIS
In order to facilitate analysis, the following financial statements
present financial data for the Corporation's manufacturing, wholesale
marketing, defense, electronics, and computer service operations with the
financing and insurance operations reflected on an equity basis. This is the
same basis and format used in years prior to GM's adoption of SFAS No. 94,
Consolidation of All Majority-owned Subsidiaries.
Statement of Nine Months Ended
Consolidated Operations Third Quarter September 30,
-------------------- --------------------
With GMAC on an Equity Basis 1994 1993 1994 1993
-------------------- --------------------
(Dollars in Millions)
Net Sales and Revenues (1)
Manufactured products $29,430.8 $25,451.4 $97,855.6 $87,214.7
Computer systems services 1,710.9 1,350.7 4,675.0 3,935.2
-------- -------- --------- --------
Total Net Sales and Revenues 31,141.7 26,802.1 102,530.6 91,149.9
-------- -------- --------- --------
Costs and Expenses
Cost of sales and other operating
charges, exclusive of items
listed below 26,931.8 23,518.3 85,213.7 78,003.6
Selling, general, and
administrative expenses 2,549.7 2,260.1 7,453.1 6,944.5
Depreciation of real estate,
plants, and equipment 965.7 951.7 2,849.7 2,852.2
Amortization of special tools 596.3 518.5 2,121.9 1,845.5
Amortization of intangible assets 45.2 48.0 135.7 143.0
Special provision for
restructuring(2) - 950.0 - 950.0
-------- -------- -------- --------
Total Costs and Expenses 31,088.7 28,246.6 97,774.1 90,738.8
-------- -------- -------- --------
Operating Income (Loss) 53.0 (1,444.5) 4,756.5 411.1
Other income less income
deductions - net 338.4 571.4 965.6 1,184.2
Interest expense (365.0) (405.8) (910.1) (1,174.6)
-------- -------- -------- --------
Income (Loss) before Income Taxes 26.4 (1,278.9) 4,812.0 420.7
Income taxes (credit) (220.5) (1,024.7) 1,519.7 (307.8)
-------- -------- -------- --------
Income (Loss) after Income Taxes 246.9 (254.2) 3,292.3 728.5
Earnings of nonconsolidated
affiliates 305.1 141.3 786.9 560.9
-------- -------- -------- --------
Income (Loss) before cumulative
effect of accounting change 552.0 (112.9) 4,079.2 1,289.4
Cumulative effect of accounting
change (3) - - (750.7) -
-------- -------- -------- --------
Net Income (Loss) $552.0 ($112.9) $3,328.5 $1,289.4
======== ======== ======== ========
(1) Includes sales to nonconsolidated affiliates of $231.1 million and $245.4
million in the third quarter and $810.5 million and $758.2 million in the
nine months of 1994 and 1993, respectively, including $67.6 million and
$67.7 million in computer systems services revenues for the third quarter
and $202.9 million and $197.7 million for the nine months.
(2) Plant closing reserve increase as discussed previously.
(3) Effective January 1, 1994, the Corporation adopted SFAS No. 112,
Employers' Accounting for Postemployment Benefits. Not included is the
unfavorable cumulative effect on GMAC earnings of $7.4 million of adopting
SFAS No. 112 because the cumulative effect is included in earnings of
nonconsolidated affiliates.
- 28 -
<PAGE>29
GENERAL MOTORS CORPORATION
AND SUBSIDIARIES
Consolidated Balance Sheet
With GMAC on an Equity Basis
Sept. 30, Dec. 31, Sept. 30,
ASSETS 1994 1993 1993
-----------------------------------
(Dollars in Millions)
Current Assets
Cash and cash equivalents $8,222.8 $9,762.5 $7,383.6
Other marketable securities 1,099.1 722.5 774.4
--------- --------- ---------
Total cash and marketable securities 9,321.9 10,485.0 8,158.0
Accounts and notes receivable
Trade 7,584.8 5,563.1 13,559.5
Nonconsolidated affiliates 2,902.5 2,955.2 2,723.0
Inventories 10,345.4 8,615.1 10,068.2
Contracts in process 2,725.2 2,376.8 2,233.7
Prepaid expenses and deferred
income taxes 8,613.2 8,036.3 7,104.8
--------- --------- ---------
Total Current Assets 41,493.0 38,031.5 43,847.2
Equity in Net Assets of
Nonconsolidated Affiliates 8,859.2 8,638.5 8,671.8
Deferred Income Taxes 15,283.6 14,874.1 14,097.1
Other Investments and Miscellaneous
Assets 14,276.5 12,586.4 12,866.8
Property - Net 34,036.7 34,103.9 34,508.0
Intangible Assets 12,713.9 12,746.1 8,955.3
--------- --------- ---------
Total Assets $126,662.9 $120,980.5 $122,946.2
========= ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $8,775.4 $9,546.5 $8,673.6
Loans payable 992.0 1,449.6 1,820.6
Income taxes payable 996.9 389.9 799.3
Accrued liabilities and deferred
income taxes (including current
portion of postretirement benefits
other than pensions) 28,277.1 23,823.3 24,155.2
Stocks subject to repurchase 450.0 - -
--------- --------- ---------
Total Current Liabilities 39,491.4 35,209.3 35,448.7
Long-Term Debt 6,565.4 6,218.4 6,383.4
Payable to GMAC* 1,487.6 1,355.5 10,043.2
Capitalized Leases 154.2 165.2 171.5
Postretirement Benefits Other Than
Pensions 36,863.4 35,423.6 34,823.7
Pensions 15,055.8 20,583.3 12,417.2
Other Liabilities and Deferred
Income Taxes 16,178.7 14,739.7 15,330.0
Deferred Credits 1,246.5 1,238.0 1,292.1
Stocks Subject to Repurchase - 450.0 450.0
Stockholders' Equity 9,619.9 5,597.5 6,586.4
--------- --------- ---------
Total Liabilities and
Stockholders' Equity $126,662.9 $120,980.5 $122,946.2
========= ========= =========
Certain September 1993 amounts were reclassified to conform with 1994
classifications.
* Reference should be made to the note on the next page.
- 29 -
<PAGE>30
GENERAL MOTORS CORPORATION
AND SUBSIDIARIES
* During 1986 through 1993, for marketing and financial reasons, GM assumed
part of the dealer inventory financing previously provided by GMAC. Primarily
to support these receivables, GM entered into a financing agreement with GMAC
which provided that GMAC would extend loans to GM up to a maximum of $17
billion which would bear interest at floating market rates. GMAC serviced
these receivables for GM for a fee. This financing agreement ensured that
GMAC's ongoing funding activities would continue, and returned to GMAC the
approximate amount of interest and fees it would have earned had it retained
the dealer inventory financing business. As of December 1, 1993, GMAC resumed
the financing of wholesale receivables and the amounts previously borrowed
under this agreement with GMAC were repaid. This financing agreement has been
terminated.
Condensed Statement of Consolidated Cash Flows Nine Months Ended
With GMAC on an Equity Basis September 30,
-------------------
1994 1993
-------------------
(Dollars in Millions)
Net Cash Provided by Operating Activities $2,990.5 $5,953.6
-------- -------
Cash Flows from Investing Activities
Expenditures for real estate, plants,
and equipment (3,015.0) (2,457.8)
Expenditures for special tools (1,564.1) (1,899.8)
Change in other investing assets
Investments in other marketable
securities - acquisitions (1,585.0) (1,493.4)
Investments in other marketable
securities - liquidations 1,208.4 1,472.2
Finance receivables - 1,164.4
Other 130.1 (148.0)
-------- -------
Net Cash Used in Investing Activities (4,825.6) (3,362.4)
-------- -------
Cash Flows from Financing Activities
Increase in long-term debt 791.7 898.4
Decrease in long-term debt (444.7) (1,371.5)
Net increase (decrease) in payable to GMAC 132.1 (1,520.0)
Proceeds from issuing common stocks 1,113.7 327.6
Cash dividends paid to stockholders (839.1) (812.8)
Other (463.4) 43.0
-------- -------
Net Cash Provided by (Used in)
Financing Activities 290.3 (2,435.3)
-------- -------
Effect of Exchange Rate Changes on Cash
and Cash Equivalents 5.1 20.1
-------- -------
Net increase (decrease) in cash and
cash equivalents (1,539.7) 176.0
Cash and cash equivalents at beginning of
the period 9,762.5 7,207.6
-------- -------
Cash and cash equivalents at end of the period $8,222.8 $7,383.6
======== =======
Certain 1993 amounts were reclassified to conform with 1994 classifications.
* * * * * * * *
- 30 -
<PAGE>31
GENERAL MOTORS CORPORATION PART II
AND SUBSIDIARIES
ITEM 1. LEGAL PROCEEDINGS
(a) Material pending legal proceedings, other than ordinary routine litigation
incidental to the business, to which the Corporation became, or was, a party
during the quarter ended September 30, 1994 are summarized below.
Other Matters
With respect to the previously reported Government investigation, individual
product liability claims and lawsuits and class actions relating to alleged
safety defects in 1970-1991 Chevrolet and GMC full-size pickup trucks (the
"C/K pickup trucks"), the following developments are reported:
On October 17, 1994, the Secretary of Transportation, Federico Pena,
announced his initial decision that a safety-related defect exists in 1971-91
GM C/K pickup trucks having side-mounted fuel tanks. In his announcement, it
was indicated that his final decision as to whether a safety-related defect
exists or to close the investigation, will be made after a public meeting
scheduled for December 6, 1994. In an October 31, 1994 letter to the
Department, GM offered to treat the Secretary's October 17 decision as his
final decision and order for the purposes of allowing the Department to
proceed directly and promptly to Federal court, in order that the matter may
be resolved in a judicial forum.
GM has consistently maintained that there is no basis for a finding that the
trucks' side-mounted fuel tanks are in violation of Federal safety standards,
or that a safety-related defect exists. Accordingly, GM has urged that the
investigation be closed. The Department of Transportation has not disputed
GM's contention that the trucks comply with the directly relevant Federal
motor vehicle safety standard applicable to fuel system integrity in side
impacts. Indeed, Secretary Pena's statement acknowledges that fact. GM also
believes that Secretary Pena's assertion that the trucks present an
unreasonable risk is contrary to the safety record of the trucks in more than
20 years of service. GM firmly believes that the government's investigative
record does not support the initial decision announced by Secretary Pena. GM
announced on October 17 that it is prepared to go to court to defend the
safety of these trucks.
* * *
On October 24, 1994, a jury sitting in two cases consolidated for trial in
the California Superior Court for the County of Los Angeles, both of which
cases had been brought by individual plaintiffs, JEFFREY LANE V. HUGHES
AIRCRAFT COMPANY and DAVID VILLALPANDO V. HUGHES AIRCRAFT COMPANY, rendered
verdicts resulting in an aggregate award against Hughes in the amount of $89.5
million. $80 million of the award was for punitive damages and the remainder
was for emotional distress and lost wages and benefits. One plaintiff alleged
racial discrimination by Hughes with respect to pay and promotion, and both
plantiffs alleged retaliation by Hughes. Hughes vigorously denies plaintiffs'
allegations and has characterized the awards as irrational, irresponsible and
outrageous. Hughes intends to seek a new trial or other post judgment relief
from the trial court and, if necessary, will appeal.
* * *
Other Pending Legal Proceedings Reported
in Previous 1994 Quarterly and Current Reports
Reference is made to the Registrant's Quarterly Reports on Form 10-Q for the
quarters ended March 31 and June 30, 1994 and the Current Report on Form 8-K
dated May 13, 1994 and filed on August 30, 1994.
* * *
- 31 -
<PAGE>32
GENERAL MOTORS CORPORATION
AND SUBSIDIARIES
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS.
Exhibit Number Exhibit Name Page No.
- -------------- ------------------------------------------------ --------
11 Computation of Earnings Per Share
Attributable to Common Stocks for the
Quarters and Nine Months Ended September 30,
1994 and 1993. 33
12 Computation of Ratios of Earnings to Fixed
Charges for the Nine Months Ended September 30,
1994 and 1993. 37
99(a) Electronic Data Systems Corporation and
Subsidiaries Consolidated Financial
Statements and Management's Discussion
and Analysis. 38
(b) GM Hughes Electronics Corporation and
Subsidiaries Consolidated Financial
Statements and Management's Discussion
and Analysis. 44
27 Financial Data Schedule (for SEC information only)
(b) REPORTS ON FORM 8-K.
One report on Form 8-K dated May 13, 1994, was filed during the quarter
ended September 30, 1994 reporting matters under Item 5, Other Events.
* * * * * *
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
GENERAL MOTORS CORPORATION
-------------------------------
(Registrant)
By
s/Leon J. Krain
-------------------------------
Date November 14, 1994 (Leon J. Krain, Vice President
- ---------------------- and Group Executive)
By
s/Wallace W. Creek
-------------------------------
Date November 14, 1994 (Wallace W. Creek, Comptroller)
- ----------------------
- 32 -
l:\secfiles\10-Q\3rdqtr94\exhib11.doc 4
<PAGE>1
GENERAL MOTORS CORPORATION EXHIBIT 11
AND SUBSIDIARIES COMPUTATION OF EARNINGS PER SHARE
ATTRIBUTABLE TO COMMON STOCKS
Quarter Ended
September 30, 1994
-----------------------------
$1-2/3
Par Value Class E Class H
Common Common Common
Stock Stock Stock
-----------------------------
(Dollars in Millions Except
Per Share Amounts)
Net income attributable to stocks $378.1 $117.3 $56.6
Dividends on preference stocks 72.1 - -
----- ----- ----
Earnings attributable to common stocks 306.0 117.3 56.6
Dividends on common stocks 150.6 31.4 18.5
----- ----- ----
Undistributed earnings 155.4 85.9 38.1
Adjustments
Change in earnings attributable to each
class of common stock related to the
assumed exercise of stock options * (1.3) - 1.3
Dividends on assumed common stock
transactions (0.9) - (0.4)
----- ----- ----
Adjusted earnings attributable to
common stocks $153.2 $85.9 $39.0
===== ===== ====
Weighted average shares outstanding
(in millions) 752.7 261.2 92.7
Adjustment
Assumed exercise of dilutive stock options * 4.5 - 2.1
----- ----- ----
Adjusted weighted average shares outstanding 757.2 261.2 94.8
===== ===== ====
Per Share Data
Earnings per share attributable to
undistributed earnings on common stocks $0.20 $0.33 $0.41
Dividends 0.20 0.12 0.20
---- ---- ----
Earnings per share attributable
to common stocks $0.40 $0.45 $0.61
==== ==== ====
Note: The difference between fully diluted and primary earnings per share is
immaterial.
* The assumed exercise of stock options reflected by these adjustments has
no effect on Class E or Class H common stock earnings per share, because to
the extent that shares of Class E or Class H common stock deemed to be
outstanding would increase, such increased shares would also increase the
numerator of the fraction used to determine Available Separate Consolidated
Net Income.
- 33 -
<PAGE>2
GENERAL MOTORS CORPORATION
AND SUBSIDIARIES COMPUTATION OF EARNINGS PER SHARE
ATTRIBUTABLE TO COMMON STOCKS
Quarter Ended
September 30, 1993
-----------------------------
$1-2/3
Par Value Class E Class H
Common Common Common
Stock Stock Stock
-----------------------------
(Dollars in Millions Except
Per Share Amounts)
Net income (loss) attributable to stocks ($260.2) $98.4 $48.9
Dividends on preference stocks 86.8 - -
----- ---- ----
Earnings (Loss) attributable to common stocks (347.0) 98.4 48.9
Dividends on common stocks 141.9 25.0 15.7
----- ---- ----
Undistributed earnings (loss) (488.9) 73.4 33.2
Adjustments
Change in earnings attributable to each
class of common stock related to the
assumed share transactions * (2.5) 1.0 1.5
Dividends on assumed common stock
transactions (0.9) (0.2) (0.5)
----- ---- ----
Adjusted earnings (loss) attributable to
common stocks ($492.3) $74.2 $34.2
===== ==== ====
Weighted average shares outstanding
(in millions) 709.6 246.6 87.4
Adjustments
Shares issued on assumed conversion of
preference stocks * - 2.4 -
Assumed exercise of dilutive stock options * 4.3 0.1 2.7
----- ----- ----
Adjusted weighted average shares outstanding 713.9 249.1 90.1
===== ===== ====
Per Share Data
Earnings (Loss) per share attributable to
undistributed earnings (loss) on common stocks ($0.69) $0.30 $0.38
Dividends 0.20 0.10 0.18
---- ---- ----
Earnings (Loss) per share attributable to
common stocks ($0.49) $0.40 $0.56
==== ==== ====
Note: The difference between fully diluted and primary earnings per share is
immaterial.
* The assumed conversion of preference stocks and exercise of stock options
reflected by these adjustments has no effect on Class E or Class H common
stock earnings per share, because to the extent that shares of Class E or
Class H common stock deemed to be outstanding would increase, such increased
shares would also increase the numerator of the fraction used to determine
Available Separate Consolidated Net Income.
- 34 -
<PAGE>3
GENERAL MOTORS CORPORATION
AND SUBSIDIARIES COMPUTATION OF EARNINGS PER SHARE
ATTRIBUTABLE TO COMMON STOCKS
Nine Months Ended
September 30, 1994
----------------------------
$1-2/3
Par Value Class E Class H
Common Common Common
Stock Stock Stock
----------------------------
(Dollars in Millions Except
Per Share Amounts)
Net income attributable to stocks (before
cumulative effect of accounting change) $3,582.0 $315.9 $188.7
Dividends on preference stocks 248.6 - -
------- ----- -----
Earnings attributable to common stocks 3,333.4 315.9 188.7
Dividends on common stocks 442.0 93.5 55.0
------- ----- -----
Undistributed earnings 2,891.4 222.4 133.7
Adjustments
Add-back dividends on assumed conversion
of preference stock 32.4 - -
Change in earnings attributable to each
class of common stock related to the
assumed exercise of stock options * (4.3) - 4.3
Dividends on assumed common stock transactions (10.0) - (1.2)
------- ----- -----
Adjusted earnings attributable to
common stocks $2,909.5 $222.4 $136.8
======= ===== =====
Weighted average shares outstanding
(in millions) 737.1 259.7 91.7
Adjustments
Shares issued on assumed conversion
of preference stock 11.0 - -
Assumed exercise of dilutive stock options * 5.7 - 2.1
----- ----- ----
Adjusted weighted average shares outstanding 753.8 259.7 93.8
===== ===== ====
Per Share Data
Earnings per share attributable to
undistributed earnings on common
stocks (before cumulative effect of
accounting change) $3.86 $0.86 $1.46
Cumulative effect of accounting change at
January 1, 1994 (1.05) - (0.08)
Dividends 0.60 0.36 0.60
---- ---- ----
Earnings per share attributable
to common stocks $3.41 $1.22 $1.98
==== ==== ====
Note: The difference between fully diluted and primary earnings per share is
immaterial.
* The assumed exercise of stock options reflected by these adjustments has no
effect on Class E or Class H common stock earnings per share, because to
the extent that shares of Class E or Class H common stock deemed to be
outstanding would increase, such increased shares would also increase the
numerator of the fraction used to determine Available Separate Consolidated
Net Income.
- 35 -
<PAGE>4
GENERAL MOTORS CORPORATION
AND SUBSIDIARIES COMPUTATION OF EARNINGS PER SHARE
ATTRIBUTABLE TO COMMON STOCKS
Nine Months Ended
September 30, 1993
-----------------------------
$1-2/3
Par Value Class E Class H
Common Common Common
Stock Stock Stock
-----------------------------
(Dollars in Millions Except
Per Share Amounts)
Net income attributable to stocks $885.9 $260.2 $143.3
Dividends on preferred and preference stocks 270.0 - -
----- ----- -----
Earnings attributable to common stocks 615.9 260.2 143.3
Dividends on common stocks 425.0 72.1 48.5
----- ----- -----
Undistributed earnings 190.9 188.1 94.8
Adjustments
Add-back dividends on assumed conversion
of preference stocks 4.6 - -
Change in earnings attributable to each
class of common stock related to the
assumed share transactions * (13.6) 10.2 3.4
Dividends on assumed common stock transactions (1.3) (2.8) (1.2)
----- ----- -----
Adjusted earnings attributable to
common stocks $180.6 $195.5 $97.0
===== ===== =====
Weighted average shares outstanding
(in millions) 708.3 239.4 88.5
Adjustments
Shares issued on assumed conversion of
preference stocks * - 9.3 -
Assumed repurchase of common stock subject
to put options - - 0.3
Assumed exercise of dilutive stock options * 2.2 0.1 1.8
----- ----- ----
Adjusted weighted average shares outstanding 710.5 248.8 90.6
===== ===== ====
Per Share Data
Earnings per share attributable to
undistributed earnings on common stocks $0.25 $0.79 $1.07
Dividends 0.60 0.30 0.54
---- ---- ----
Earnings per share attributable to common stocks $0.85 $1.09 $1.61
==== ==== ====
Note: The difference between fully diluted and primary earnings per share is
immaterial.
* The assumed conversion of preference stocks and exercise of stock options
reflected by these adjustments has no effect on Class E or Class H common
stock earnings per share, because to the extent that shares of Class E or
Class H common stock deemed to be outstanding would increase, such increased
shares would also increase the numerator of the fraction used to determine
Available Separate Consolidated Net Income.
- 36 -
l:\secfiles\10-Q\3rdqtr94\exhib12.doc 1
<PAGE>1
GENERAL MOTORS CORPORATION EXHIBIT 12
AND SUBSIDIARIES COMPUTATION OF RATIOS OF EARNINGS
TO FIXED CHARGES
Nine Months Ended
September 30,
---------------------
1994 1993
---------------------
(Dollars in Millions)
Income before cumulative effect of
accounting change $4,086.6 $1,289.4
United States, foreign, and other income taxes 1,905.3 183.8
Equity in (income) losses of associates (9.2) 66.5
Cash dividends received from associates 8.6 4.8
Amortization of capitalized interest 37.7 42.1
-------- -------
Income before income taxes, undistributed
(income) losses of associates, and amortization
of capitalized interest 6,029.0 1,586.6
-------- -------
Fixed charges included in net income
Interest and related charges on debt 3,651.0 4,266.9
Portion of rentals deemed to be interest 334.5 337.1
-------- -------
Total fixed charges included in net income 3,985.5 4,604.0
-------- -------
Earnings available for fixed charges $10,014.5 $6,190.6
======== =======
Fixed charges
Fixed charges included in net income $3,985.5 $4,604.0
Interest capitalized in the period 21.1 30.3
-------- -------
Total fixed charges $4,006.6 $4,634.3
======== =======
Ratios of earnings to fixed charges 2.50 1.34
==== ====
Certain amounts for 1993 have been reclassified to conform with 1994
classifications.
- 37 -
l:\secfiles\10-Q\3rdqtr94\exhib99a.doc 6
<PAGE>1
EXHIBIT 99(a)
ELECTRONIC DATA SYSTEMS CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS AND
MANAGEMENT'S DISCUSSION AND ANALYSIS
- ----------------------------------------------------------------------------
Consolidated Statements of Income
Nine Months Ended
Third Quarter September 30,
----------------- ------------------
1994 1993 1994 1993
----------------- ------------------
(in millions except per share amounts)
Revenues
Systems and other contracts
GM and affiliates $879.5 $787.1 $2,577.4 $2,467.8
Outside customers 1,643.3 1,283.0 4,472.1 3,737.5
Interest and other income 42.1 14.2 88.7 42.7
------- ------- ------- -------
Total revenues 2,564.9 2,084.3 7,138.2 6,248.0
------- ------- ------- -------
Costs and expenses
Cost of revenues 1,920.7 1,545.1 5,356.7 4,688.9
Selling, general, and administrative 288.8 231.7 829.1 719.4
Interest 17.3 8.1 37.8 25.5
------- ------- ------- -------
Total costs and expenses 2,226.8 1,784.9 6,223.6 5,433.8
------- ------- ------- -------
Income before income taxes 338.1 299.4 914.6 814.2
Provision for income taxes 121.7 107.8 329.2 293.1
------- ------- ------- -------
Separate Consolidated Net Income $216.4 $191.6 $585.4 $521.1
======= ======= ======= =======
Available Separate Consolidated Net
Income (Note 1)
Average number of shares of GM
Class E common stock outstanding
(in millions) (Numerator) 261.2 246.6 259.7 239.4
Class E dividend base (in millions)
(Denominator) 481.7 480.5 481.6 480.2
Available Separate Consolidated
Net Income $117.3 $98.4 $315.9 $260.2
===== ===== ===== =====
Earnings Attributable to GM Class E
Common Stock on a Per Share Basis
(Note 1) $0.45 $0.40 $1.22 $1.09
==== ==== ==== ====
See accompanying notes to consolidated financial statements.
- 38 -
<PAGE>2
ELECTRONIC DATA SYSTEMS CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
September 30, December 31,
1994 1993
---------------------------
(in
millions)
Assets
Current assets
Cash and cash equivalents $354.8 $383.4
Marketable securities 241.3 224.1
Accounts receivable 1,785.6 1,412.5
Accounts receivable from GM and affiliates 150.4 112.6
Inventories 188.1 130.7
Prepaids and other 309.8 243.5
------- -------
Total current assets 3,030.0 2,506.8
------- -------
Property and equipment, at cost less accumulated
depreciation of $2,693.8 at September 30, 1994
and $2,405.7 at December 31, 1993
Land 124.8 121.6
Buildings and facilities 549.3 532.0
Computer equipment 1,674.6 1,275.5
Other equipment and furniture 187.9 185.6
------- -------
Total property and equipment, net 2,536.6 2,114.7
------- -------
Operating and other assets
Land held for development, at cost 97.4 94.4
Investment in leases and other 1,266.3 1,159.9
Software, goodwill, and other intangibles, net 1,116.2 1,066.3
------- -------
Total operating and other assets 2,479.9 2,320.6
------- -------
Total Assets $8,046.5 $6,942.1
======= =======
Liabilities and Stockholder's Equity
Current liabilities
Accounts payable $450.5 $359.8
Accrued liabilities 1,156.2 996.0
Deferred revenue 471.8 429.7
Income taxes 204.9 202.2
Notes payable 163.6 172.7
------- -------
Total current liabilities 2,447.0 2,160.4
------- -------
Deferred income taxes 652.8 641.5
------- -------
Notes payable 869.5 522.8
------- -------
Stockholder's equity
Common stock, without par value; authorized
1,000.0 shares. Issued and outstanding 481.7
shares at September 30, 1994 and 480.9 shares
at December 31, 1993 454.8 421.2
Retained earnings 3,622.4 3,196.2
------- -------
Total stockholder's equity 4,077.2 3,617.4
------- -------
Total Liabilities and Stockholder's Equity $8,046.5 $6,942.1
======= =======
See accompanying notes to consolidated financial statements.
- 39 -
<PAGE>3
ELECTRONIC DATA SYSTEMS CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Nine Months Ended
Third Quarter September 30,
--------------- -----------------
1994 1993 1994 1993
--------------- -----------------
(in millions)
Cash Flows from Operating Activities
Net income $216.4 $191.6 $585.4 $521.1
----- ----- ------- -----
Adjustments to reconcile net income
to net cash provided by operating
activities (net of effects of
acquired companies)
Depreciation and amortization 162.1 153.7 505.2 456.3
Increase in accounts receivable (269.5) (74.8) (332.5) (96.6)
Increase in accounts receivable
from GM and affiliates (124.1) (50.5) (33.4) (22.7)
Increase in inventories (14.2) (12.0) (54.5) (38.8)
(Increase) decrease in prepaids
and other 3.0 (22.1) (55.7) (36.6)
Increase (decrease) in accounts
payable and accrued liabilities 123.2 103.6 140.2 (11.4)
Increase in deferred revenue 23.9 46.3 26.3 26.9
Increase (decrease) in income taxes 112.6 32.4 (2.6) (0.4)
Increase (decrease) in deferred
income taxes (64.3) 43.6 15.3 119.3
----- ----- ------- -----
Total adjustments (47.3) 220.2 208.3 396.0
----- ----- ------- -----
Net cash provided by operating activities 169.1 411.8 793.7 917.1
----- ----- ------- -----
Cash Flows from Investing Activities
Payments for purchase of marketable
securities (98.7) (137.6) (220.7) (242.3)
Proceeds from sale of marketable
securities 84.8 110.5 199.2 193.2
Payments related to land held for
development (1.6) (2.0) (3.0) (6.8)
Payments for investment in leases
and other (94.4) (112.1) (404.5) (257.6)
Proceeds from investment in leases
and other 155.5 139.5 301.8 296.1
Payments for purchase of software,
goodwill, and other intangibles 16.4 (31.3) (23.5) (57.5)
Payments for purchase of property and
equipment (358.1) (300.1) (785.4) (652.4)
Payments related to acquisition of
outside companies, net of cash acquired (21.9) 53.2 (70.5) (49.7)
----- ----- ------- -----
Net cash used in investing activities ($318.0)($279.9)($1,006.6) ($777.0)
----- ----- ------- -----
See accompanying notes to consolidated financial statements.
- 40 -
<PAGE>4
ELECTRONIC DATA SYSTEMS CORPORATION AND SUBSIDIARIES
Nine Months Ended
Third Quarter September 30,
--------------- -----------------
1994 1993 1994 1993
--------------- -----------------
(in millions)
Cash Flows from Financing Activities
Net increase (decrease) in current
notes payable with maturities less
than 90 days $10.1 $47.5 ($90.9) $138.3
Payments on notes payable (84.7) (13.2) (138.8) (177.9)
Proceeds from notes payable 47.0 2.2 527.2 53.7
Proceeds from issuance of common stock 0.6 4.2 33.6 46.2
Cash dividends paid to GM (57.8) (48.0) (173.3) (144.0)
----- ----- ----- -----
Net cash provided by (used in)
financing activities (84.8) (7.3) 157.8 (83.7)
----- ----- ----- -----
Effect of Exchange Rate Changes on Cash and
Cash Equivalents 14.1 (2.9) 26.5 (6.2)
----- ----- ----- -----
Net Increase (Decrease) in Cash and Cash
Equivalents (219.6) 121.7 (28.6) 50.2
Cash and Cash Equivalents at Beginning
of Period 574.4 350.4 383.4 421.9
----- ----- ----- -----
Cash and Cash Equivalents at End of Period $354.8 $472.1 $354.8 $472.1
===== ===== ===== =====
See accompanying notes to consolidated financial statements.
Notes to Consolidated Financial Statements
In the opinion of management, the interim consolidated financial statements
reflect all adjustments, consisting of only normal recurring items (with the
exception of the accounting change in 1994 to adopt Statement of Financial
Accounting Standards (SFAS) No. 115, Accounting for Certain Investments in
Debt and Equity Securities, as described in Note 2), which are necessary for a
fair presentation of the results for the interim periods presented. The
results for interim periods are not necessarily indicative of results which
may be expected for any other interim period or for the full year. These
consolidated financial statements should be read in conjunction with the
consolidated financial statements, the summary of significant accounting
policies, and the other notes to the consolidated financial statements
included in General Motors' 1993 Annual Report to the SEC on Form 10-K.
Note 1.
The consolidated financial statements of EDS do not reflect the purchase
accounting adjustments arising as a result of the acquisition of EDS by GM.
Earnings Attributable to GM Class E Common Stock on a Per Share Basis have
been determined based on the relative amounts available for the payment of
dividends to holders of GM Class E common stock. Holders of GM Class E common
stock have no direct rights in the equity or assets of EDS, but rather have
rights in the equity and assets of GM (which includes 100% of the stock of
EDS). Dividends on the GM Class E common stock are declared out of the
Available Separate Consolidated Net Income of EDS earned since the acquisition
of EDS by GM. The Available Separate Consolidated Net Income of EDS is
determined quarterly and is equal to the separate consolidated net
- 41 -
<PAGE>5
ELECTRONIC DATA SYSTEMS CORPORATION AND SUBSIDIARIES
income of EDS, excluding the effects of purchase accounting adjustments
arising from the acquisition of EDS, multiplied by a fraction, the numerator
of which is a number equal to the weighted average number of shares of GM
Class E common stock outstanding during the period and the denominator of
which was 481.7 million during the third quarter of 1994. The comparable
denominator for the third quarter of 1993 was 480.5 million.
The denominator used in determining the Available Separate Consolidated Net
Income of EDS is adjusted as deemed appropriate by the GM Board of Directors
to reflect subdivisions or combinations of the GM Class E common stock and to
reflect certain transfers of capital to or from EDS. In 1988, EDS initiated a
program to repurchase 11.0 million shares of GM Class E common stock in order
to meet certain future requirements of the Company's employee benefit plans.
The GM Board has generally caused the denominator used in calculating the
Available Separate Consolidated Net Income of EDS to decrease as shares are
purchased and to increase as shares are used for the employee benefit plans.
The current GM Board policy is that the cash dividends on the GM Class E
common stock, when, as, and if declared by the GM Board in its sole
discretion, will equal approximately 30% of the Available Separate
Consolidated Net Income of EDS for the prior year.
Consistent with Delaware law, which governs the amount legally available for
the payment of dividends on GM's common stock, the GM Board of Directors has
determined that such amount is materially higher than GM's capital surplus
plus net income retained for use in the business (less accumulated deficit).
Note 2.
EDS adopted SFAS No. 115, Accounting for Certain Investments in Debt and
Equity Securities, on January 1, 1994. This statement requires that certain
investments in debt and equity securities be classified into one of three
categories: held-to-maturity, available-for-sale, or trading. The
implementation of this Standard had an immaterial effect on the consolidated
financial statements.
* * * * *
Management's Discussion and Analysis
Result of Operations
- ---------------------
EDS signed $1.4 billion in new business during the quarter ended September
30, 1994, bringing the total of new business signed for the year to $7.4
billion. This compares to $4.3 billion signed during the first nine months of
1993.
Total revenue for the quarter ended and nine months ended September 30, 1994
rose $480.6 million and $890.2 million, respectively, over the comparable
quarter and nine-month period in the prior year to $2,564.9 million and
$7,138.2 million, respectively. Revenues related to GM and affiliates
amounted to $879.5 million and $787.1 million for the third quarter ended
September 30, 1994 and 1993, respectively, and $2,577.4 million and $2,467.8
million for the nine months ended September 30, 1994 and 1993, respectively.
The growth of non-GM revenue during the third quarter and nine-month period
ending September 30, 1994, when compared to the corresponding periods in 1993,
was 30% and 21%, respectively. This growth results from several new contracts
and improved performance of existing contracts.
GM revenue increased 11.7% and 4.4% during the third quarter and nine-month
period ending September 30, 1994, respectively, when compared with the same
period in 1993. While it is anticipated that GM will continue to contribute a
significant portion of systems revenue, the percentage of revenue from GM and
subsidiaries will continue to decline as non-GM revenues continue to increase.
- 42 -
<PAGE>6
ELECTRONIC DATA SYSTEMS CORPORATION AND SUBSIDIARIES
Total costs and expenses as a percentage of systems and other contracts
revenue remained relatively flat at 88.3% for both the quarter and nine months
ended September 30, 1994, when compared to the corresponding periods in 1993.
For the quarter and nine-month periods ended September 30, 1994, EDS'
separate consolidated net income increased 12.9% to $216.4 million and 12.3%
to $585.4 million, respectively, when compared to net income of $191.6 million
and $521.1 million for the respective periods of last year. Earnings per
share of GM Class E common stock rose from $0.40 to $0.45, or 12.5%, for the
third quarter of 1994 when compared to the third quarter of 1993. Year-to-
date earnings per share increased from $1.09 to $1.22, or 11.9% over 1993.
EDS' effective tax rate remained at 36% for the quarter.
Liquidity and Capital Resources
- -------------------------------
EDS maintained a strong liquidity and capital structure during the third
quarter. The current ratio improved to 1.24-to-1 at September 30, 1994 from
1.16-to-1 at December 31, 1993. Return on assets was 10.6% for the first nine
months of 1994 compared to 10.9% for the same period of 1993. Return on
equity was 20.9% for the first nine months of 1994 compared to 21.7% for the
same period of 1993. The noncurrent debt-to-capital ratio was 18% at
September 30, 1994 and 13% at December 31, 1993. At September 30, 1994, EDS'
capital consisted of $869.5 million in noncurrent notes payable and $4,077.2
million in stockholder's equity.
Total debt was $1,033.1 million at September 30, 1994 and represented a 49%
increase from total debt of $695.5 million at December 31, 1993. Debt, which
consists largely of commercial paper, increased primarily to support specific
working capital needs related to new business during 1994. The total debt-to-
capital ratio (includes current debt as a component of capital) was 20.2% at
September 30, 1994 and 16.1% at December 31, 1993.
EDS continued to maintain a strong cash position. Overall cash and cash
equivalents decreased $28.6 million from the end of 1993 to $354.8 million at
the end of the third quarter. Cash flows from operations decreased from
$917.1 million during the first nine months of 1993 to $793.7 million during
the same period of 1994. Cash flows from operations decreased $242.7 million
during the third quarter of 1994 when compared to the third quarter of 1993.
The changes in cash flows from operations principally reflect the timing of
receipts and disbursements. Cash used in investing activities was $318.0
million and $1,006.6 million for the quarter and first nine months of 1994,
respectively, compared with $279.9 million and $777.0 million, respectively,
for the corresponding periods in 1993. The increased use of cash during the
first nine months of 1994 is due to expenditures supporting the growth of
business. Net cash provided by (used in) financing activities was ($84.8)
million and $157.8 million for the quarter and first nine months of 1994,
respectively, compared to ($7.3) million and ($83.7) million, respectively,
for the same periods last year. The changes in cash flows from financing
activities is principally due to the issuance of long-term debt.
During the quarter, EDS made net additions to property and equipment of
$360.3 million and net additions to software, goodwill, and other intangibles
of $6.5 million. EDS paid cash dividends to GM totaling $57.8 million in the
third quarter and has consistently paid cash dividends since 1974.
* * * * *
- 43 -
l:\secfiles\10-Q\3rdqtr94\exhib99b.doc 4
<PAGE>1
EXHIBIT 99(b)
GM HUGHES ELECTRONICS CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS AND
MANAGEMENT'S DISCUSSION AND ANALYSIS
- ------------------------------------------------------------------------------
Statement of Consolidated Operations and
Available Separate Consolidated Net Income
Nine Months Ended
Third Quarter September 30,
------------------ ------------------
1994 1993 1994 1993
------------------ ------------------
(Dollars in Millions
Except per Share Amounts)
Revenues
Net sales
Outside customers $2,264.1 $2,293.9 $6,760.5 $6,591.9
General Motors and affiliates 1,056.7 925.8 3,638.9 3,106.8
Other income - net (Note 1) 33.7 100.2 78.3 117.8
------- ------- ------- -------
Total Revenues 3,354.5 3,319.9 10,477.7 9,816.5
------- ------- ------- -------
Costs and Expenses
Cost of sales and other operating charges,
exclusive of items listed below 2,599.4 2,585.9 8,103.9 7,698.2
Selling, general, and administrative
expenses 237.6 227.0 678.1 671.3
Depreciation and amortization 119.2 125.1 348.1 356.4
Amortization of GM purchase accounting
adjustments related to Hughes 31.0 30.9 92.9 92.8
Interest expense - net 5.9 16.3 15.4 35.3
------- ------- ------- -------
Total Costs and Expenses 2,993.1 2,985.2 9,238.4 8,854.0
------- ------- ------- -------
Income before Income Taxes 361.4 334.7 1,239.3 962.5
United States, foreign, and other
income taxes 148.2 141.6 508.2 410.0
------- ------- ------- -------
Income before cumulative effect
of accounting change 213.2 193.1 731.1 552.5
Cumulative effect of accounting
change (Note 2) - - (30.4) -
------- ------- ------- -------
Net Income 213.2 193.1 700.7 552.5
Adjustments to exclude the effect of
GM purchase accounting adjustments
related to Hughes (Note 3) 31.0 30.9 92.9 92.8
------- ------- ------- -------
Earnings Used for Computation of Available
Separate Consolidated Net Income $244.2 $224.0 $793.6 $645.3
======= ======= ======= ========
Available Separate Consolidated Net Income (Note 3)
Average number of shares of GM
Class H Common Stock outstanding
(in millions) (Numerator) 92.7 87.4 91.7 88.5
Class H dividend base (in millions)
(Denominator) 399.9 399.9 399.9 399.9
Available Separate Consolidated
Net Income $56.6 $48.9 $181.9 $143.3
======= ======= ======= =======
Earnings Attributable to GM
Class H Common Stock on a
Per Share Basis (Note 3)
Before cumulative effect of
accounting change $0.61 $0.56 $2.06 $1.61
Cumulative effect of accounting
change (Note 2) - - (0.08) -
---- ---- ---- ----
Net earnings attributable to
GM Class H Common Stock $0.61 $0.56 $1.98 $1.61
==== ==== ==== ====
Reference should be made to the Notes to Consolidated Financial Statements.
- 44 -
<PAGE>2
GM HUGHES ELECTRONICS CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheet
September 30, December 31,
ASSETS 1994 1993
---------------------------
(Dollars in Millions
Except Per Share Amount)
Current Assets
Cash and cash equivalents $1,047.1 $1,008.7
Accounts and notes receivable
Trade receivables (less allowances) 750.4 736.7
General Motors and affiliates 132.6 404.1
Contracts in process, less advances and
progress payments 2,725.2 2,376.8
Inventories (less allowances)
Productive material, work in process,
and supplies 1,200.4 957.1
Finished product 115.7 103.3
Prepaid expenses, including deferred income taxes 183.2 127.6
-------- --------
Total Current Assets 6,154.6 5,714.3
Property-Net 2,591.7 2,634.4
Telecommunications and Other Equipment - Net 963.7 767.6
Intangible Assets, net of amortization 3,283.7 3,374.4
Investments and Other Assets, including deferred
income taxes - principally at cost
(less allowances) 1,578.6 1,626.4
-------- --------
Total Assets $14,572.3 $14,117.1
======== ========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities
Accounts payable
Outside $665.5 $717.1
General Motors and affiliates 70.6 117.5
Advances on contracts 590.6 660.6
Notes and loans payable 125.4 77.8
United States, foreign, and other
income taxes payable 74.7 102.1
Accrued liabilities 1,779.4 1,874.0
-------- --------
Total Current Liabilities 3,306.2 3,549.1
-------- --------
Long-Term Debt and Capitalized Leases 356.8 416.8
-------- --------
Postretirement Benefits Other Than Pensions (Note 4) 1,534.5 1,446.3
-------- --------
Other Liabilities, Deferred Income Taxes,
and Deferred Credits 1,589.9 1,376.8
-------- --------
Stockholder's Equity
Capital stock (outstanding, 1,000 shares, $0.10
par value) and additional paid-in capital 6,326.2 6,323.1
Net income retained for use in the business 1,598.9 1,138.2
-------- --------
Subtotal 7,925.1 7,461.3
Minimum pension liability adjustment (120.4) (120.4)
Accumulated foreign currency translation
adjustments (19.8) (12.8)
-------- --------
Total Stockholder's Equity 7,784.9 7,328.1
-------- --------
Total Liabilities and Stockholder's Equity $14,572.3 $14,117.1
======== ========
Reference should be made to the Notes to Consolidated Financial Statements.
- 45 -
<PAGE>3
GM HUGHES ELECTRONICS CORPORATION AND SUBSIDIARIES
Condensed Statement of Consolidated Cash Flows
Nine Months Ended
September 30,
------------------
1994 1993
------------------
(Dollars in Millions)
Net Cash Provided by Operating Activities $565.2 $1,192.7
------- -------
Cash Flows from Investing Activities
Investment in companies, net of cash acquired - (47.2)
Expenditures for property and special tools (292.6) (243.0)
Expenditures for telecommunications
and other equipment (205.3) (76.1)
Proceeds from disposals of property 22.6 47.4
Net collections on notes receivable 200.9 1.2
Other - 1.4
------- -------
Net Cash Used in Investing Activities (274.4) (316.3)
------- -------
Cash Flows from Financing Activities
Net increase (decrease) in notes and
loans payable 47.6 (52.5)
Increase in long-term debt 7.5 73.7
Decrease in long-term debt (67.5) (275.9)
Cash dividends paid to General Motors (240.0) (216.0)
------- -------
Net Cash Used in Financing Activities (252.4) (470.7)
------- -------
Net increase in cash and cash equivalents 38.4 405.7
Cash and cash equivalents at beginning
of the period 1,008.7 702.7
------- -------
Cash and cash equivalents at end of the period $1,047.1 $1,108.4
======= =======
Certain amounts for 1993 have been reclassified to conform with 1994
classifications.
Reference should be made to the Notes to Consolidated Financial Statements.
Notes To Consolidated Financial Statements
In the opinion of management, the interim consolidated financial statements
reflect all adjustments, consisting of only normal recurring items (with the
exception of the accounting change in 1994 to adopt Statement of Financial
Accounting Standards (SFAS) No. 112, Employers' Accounting for Postemployment
Benefits, as described in Note 2), which are necessary for a fair presentation
of the results for the interim periods presented. The results for interim
periods are not necessarily indicative of results which may be expected for
any other interim period or for the full year. These consolidated financial
statements should be read in conjunction with the consolidated financial
statements, the summary of significant accounting policies, and the other
notes to the consolidated financial statements included in General Motors'
1993 Annual Report to the SEC on Form 10-K.
Note 1.
Other income-net for the third quarter of 1993 and nine months ended
September 30, 1993 includes an $89.7 million pre-tax gain on the sale of
GMHE's interest in Japan Communications Satellite Company, Inc. (JCSAT).
Note 2.
Effective January 1, 1994, GMHE adopted SFAS No. 112. The Standard requires
accrual of the costs of benefits provided to former or inactive employees
after employment, but before retirement. The unfavorable cumulative effect of
adopting this Standard was $30.4 million, net of income taxes of $19.2
million, or $0.08 per share of GM Class H common stock. The noncash charge is
primarily related to Delco Electronics Corporation's extended-disability
benefit program in the U.S. which, under the new accounting Standard, will be
accrued on a service-driven basis. The ongoing effect was not material.
- 46 -
<PAGE>4
GM HUGHES ELECTRONICS CORPORATION AND SUBSIDIARIES
Note 3.
Earnings attributable to General Motors Class H common stock on a per share
basis have been determined based on the relative amounts available for the
payment of dividends to holders of the GM Class H common stock. Holders of GM
Class H common stock have no direct rights in the equity or assets of GMHE,
but rather have rights in the equity and assets of GM (which includes 100% of
the stock of GMHE). Dividends on the GM Class H common stock are declared by
GM's Board of Directors out of the Available Separate Consolidated Net Income
of GMHE since the acquisition of Hughes Aircraft Company (Hughes) by GM. The
Available Separate Consolidated Net Income of GMHE is determined quarterly and
is equal to the separate consolidated net income of GMHE, excluding the
effects of GM purchase accounting adjustments arising from the acquisition of
Hughes (Earnings Used for Computation of Available Separate Consolidated Net
Income), multiplied by a fraction, the numerator of which is a number equal to
the weighted average number of shares of GM Class H common stock outstanding
during the period and the denominator of which was 399.9 million during the
third quarters of 1994 and 1993.
The denominator used in determining the Available Separate Consolidated Net
Income of GMHE is adjusted as deemed appropriate by the GM Board of Directors
to reflect subdivisions or combinations of the GM Class H common stock and to
reflect certain transfers of capital to or from GMHE. In this regard, the GM
Board has generally caused the denominator to decrease as shares are purchased
by GMHE and to increase as such shares are used, at GMHE expense, for GMHE
employee benefit plans or acquisitions.
Dividends may be paid on GM Class H common stock only when, as, and if
declared by the GM Board of Directors in its sole discretion. The current
policy of the GM Board with respect to GM Class H common stock is to pay cash
dividends approximately equal to 35% of the Available Separate Consolidated
Net Income of GMHE for the prior year. In February 1994, the GM Board
increased the quarterly dividends on Class H common stock from $0.18 per share
to $0.20 per share. Notwithstanding the current dividend policy, the
dividends paid and to be paid on the GM Class H Common Stock during 1994 and
1993 exceeds 35% of the Available Separate Consolidated Net Income (Loss) of
GMHE for the preceding year. The GM Board determined that 1992 Available
Separate Consolidated Net Income of GMHE used as a basis for 1993 dividends
was calculated without giving effect to the $749.4 million after-tax special
restructuring charge at Hughes.
Consistent with Delaware law, which governs the amount legally available for
the payment of dividends on GM's common stock, the GM Board of Directors has
determined that such amount is materially higher than GM's capital surplus
plus net income retained for use in the business (less accumulated deficit).
Note 4.
GMHE has disclosed in the financial statements certain amounts associated
with estimated future postretirement benefits other than pensions and
characterized such amounts as "accumulated postretirement benefit
obligations", "liabilities", or "obligations". Notwithstanding the recording
of such amounts and the use of these terms, GMHE does not admit or otherwise
acknowledge that such amounts or existing postretirement benefit plans of GMHE
(other than pensions) represent legally enforceable liabilities of GMHE.
Management's Discussion and Analysis*
Results of Operations
- ---------------------
GMHE reported third quarter earnings, before the effect of purchase
accounting adjustments related to General Motors' acquisition of Hughes, of
$244.2 million, a 9.0% increase from the $224.0 million reported in the third
quarter of 1993. Earnings per share of GM Class H common stock, on the same
basis, increased 8.9% to $0.61 per share from $0.56 per share in the
comparable period of 1993.
* The following discussion excludes the purchase accounting adjustments
related to GM's acquisition of Hughes (see Supplemental Data beginning on
page 50).
- 47 -
<PAGE>5
GM HUGHES ELECTRONICS CORPORATION AND SUBSIDIARIES
For the first nine months of 1994, excluding the unfavorable effect of an
accounting change related to postemployment benefits recorded in the first
quarter ($30.4 million after tax, or $0.08 per GM Class H share), earnings
increased 27.7% to $824.0 million, from $645.3 million recorded in the first
nine months of 1993. Earnings per share on the same basis increased 28.0% to
$2.06 from $1.61 per share in the first nine months of 1993.
Revenues for the quarter were $3,354.5 million, a 1.0% increase over the
$3,319.9 million recorded in 1993's third quarter. Revenues for the first
nine months of 1994 increased to $10,477.7 million, a 6.7% increase from the
$9,816.5 million in 1993's first nine months. Costs and expenses as a
percentage of revenues decreased to 88.3% in the quarter from 89.0% in the
third quarter of 1993. For the nine months ended September 30, 1994, costs
and expenses as a percentage of revenues decreased to 87.3% from 89.2% in the
comparable 1993 period. Income taxes were $148.2 million, or 37.8% of income
before income taxes, for the quarter compared with $141.6 million, or 38.7% of
income before income taxes, in the comparable quarter of 1993. For the first
nine months, income taxes, excluding the cumulative effect of the accounting
change, were $508.2 million, or 38.1% of income before taxes, compared with
$410.0 million, or 38.9% of income before taxes, in the comparable 1993
period.
Operating profit was $364.6 million for the third quarter, a 29.4% increase
from the operating profit of $281.7 million posted for the comparable period
of 1993. The operating profit margin improved to 11.0% for the quarter,
compared with 8.7% in the same quarter of 1993. Operating profit for the
first nine months of 1994 was $1,269.3 million, representing an increase of
30.5% over the $972.8 million recorded in the same period of 1993. As a
result, the operating profit margin for the first nine months of 1994
increased to 12.2%, from 10.0% for the first nine months of 1993. Effective
with the first quarter of 1994, calculation of the operating profit margin is
based on net sales rather than revenues. Third quarter and nine month 1993
amounts have been restated on this basis.
Results for the third quarter and nine months ended September 30, 1994
reflected continued success at improving operating performance in three of the
four GMHE business segments. Continued strength in the domestic automotive
market and demand for telecommunications products and services provided by
GMHE offset primarily by the declining defense market resulted in modest
revenue increases. Continuing efforts to improve competitiveness in our
defense and automotive businesses, as well as earnings recognized in the third
quarter of 1994 with respect to a DIRECTV contract with the National Rural
Telecommunications Cooperative (NRTC), increased operating profit margins.
The Automotive Electronics segment reported revenues for the quarter of
$1,141.9 million, an increase of 22.7% from revenues of $931.0 million for the
same period of 1993. The increase reflects a 12.7% increase in GM vehicles
produced in North America, a 7.3% increase in GMHE-supplied electronic content
in these vehicles, from $844 to $906 per vehicle, and a 24.4% increase in
international and non-GM sales, from $131 million to $163 million. Operating
profit increased 36.6% for the quarter to $117.3 million from $85.9 million
for the comparable period last year, reflecting increased production volumes
and continued cost reductions. As a result, the operating profit margin
improved to 10.4% from 9.2% in the third quarter of 1993.
The Telecommunications and Space segment reported revenues for the quarter
of $677.2 million, a decrease of 4.3% from revenues of $707.9 million reported
in the third quarter of 1993. The decline was due primarily to a pre-tax gain
on the sale of GMHE's 30% interest in Japan Communications Satellite Company
of $89.7 million in the third quarter of 1993 with no similar transaction in
1994. The decrease was partially offset by additional sales at Hughes Network
Systems, Inc. (HNS) relating to the BellSouth cellular equipment and services
contract and by DIRECTV revenues relating to the NRTC contract. Operating
profit more than doubled to $135.2 million for the third quarter of 1994 from
$64.5 million for the 1993 third quarter and the operating profit margin
increased to 20.1% from 10.4% in the third quarter of 1993. The increase was
- 48 -
<PAGE>6
GM HUGHES ELECTRONICS CORPORATION AND SUBSIDIARIES
due to earnings recognized by DIRECTV as a result of the NRTC contract, cost
reduction efforts in the satellite manufacturing business and increased
earnings at HNS related to additional sales volume, which were partially
offset by operating losses at DIRECTV related to the start of direct-to-home
broadcast television services.
The Defense Electronics segment reported third quarter revenues of $1,356.2
million, a decrease of 8.1% from revenues of $1,475.6 million for the same
period of 1993. The decline was due to reduced production rates on a variety
of programs including ground radar, shipboard displays, Trident missile
components and low frequency acoustics, plus terminations of the Advanced
Cruise Missile program at the end of 1993 and the Follow-On Early Warning
System earlier this year. Operating profit increased 31.2% to $168.2 million
in the third quarter of 1994, from $128.2 million in the comparable quarter of
1993 and the operating profit margin improved to 12.4% from 8.8%. The
increase was a result of ongoing efforts to reduce costs across GMHE's defense
businesses and continuing benefits from the consolidation of the missile
business.
Commercial Technologies segment revenues were $179.2 million, a decline of
12.8% from the $205.4 million in revenues in the third quarter of 1993. The
decline was due primarily to the sale of Hughes Rediffusion Simulation Limited
and related entities in December 1993 offset by increases in sales from air
traffic control programs. Operating profit decreased from $7.2 million in the
third quarter of 1993 to a loss of $52.0 million in the third quarter of 1994.
The operating loss reflects additional costs related to technical problems
with the Hughes-Avicom International, Inc. in-flight entertainment system and
associated loss of revenues due to delays in aircraft installation.
Liquidity and Capital Resources
- -------------------------------
Cash and cash equivalents at September 30, 1994 amounted to $1,047.1
million, an increase of $38.4 million over December 31, 1993. Net cash
provided by operating activities was $565.2 million for the 1994 nine months,
a decrease of $627.5 million compared to the same period in 1993. The
decrease was due primarily to an increase in working capital associated with
the acquired missile business, the BellSouth digital cellular contract and the
Peace Shield program. Net cash used in investing activities improved $41.9
million to $274.4 million from $316.3 million for the comparable 1993 period
primarily reflecting collection of a $200 million receivable from GM in the
first quarter of 1994 offset by an increase during the nine month period in
capital expenditures of $178.8 million. Net cash used in financing activities
improved $218.3 million to $252.4 million for the 1994 nine months from $470.7
for the comparable 1993 period due primarily to the pre-payment of debt in the
third and fourth quarters of 1993.
As a measure of liquidity, GMHE's current ratio (ratio of current assets to
current liabilities) increased to 1.86 at September 30, 1994 from 1.61 at
December 31, 1993.
Capital expenditures, including expenditures for telecommunications and
other equipment, for the nine months ended September 30, 1994 increased to
$497.9 million from $319.1 million in the comparable period in 1993 primarily
due to expenditures related to satellite and ground equipment for DIRECTV and
continuing efforts to consolidate the missile business in Tuscon.
Long-term debt and capitalized leases decreased $60.0 million from $416.8
million at December 31, 1993 to $356.8 million at September 30, 1994 primarily
reflecting the reclassification of debt from long-term to current during the
third quarter of 1994. The ratio of long-term debt to the total of such debt
and proforma stockholder's equity improved to 7.0% at September 30, 1994 from
9.0% at December 31, 1993.
- 49 -
<PAGE>7
GM HUGHES ELECTRONICS CORPORATION AND SUBSIDIARIES
Supplemental Data
The Consolidated Financial Statements reflect the application of purchase
accounting adjustments as described in Note 3 to the Consolidated Financial
Statements. However, as provided in GM's Certificate of Incorporation, the
earnings attributable to GM Class H common stock for purposes of determining
the amount available for the payment of dividends on GM Class H common stock
specifically excludes such adjustments. More specifically, amortization of
purchase accounting adjustments associated with GM's purchase of Hughes was
$31.0 million and $30.9 million for the third quarters of 1994 and 1993,
respectively. Such amounts were excluded from the earnings available for the
payment of dividends on GM Class H common stock and were charged against the
earnings available for the payment of dividends on GM's $1-2/3 par value
stock. Unamortized purchase accounting adjustments associated with GM's
purchase of Hughes were $3,036.2 million at September 30, 1994 and $3,129.1
million at December 31, 1993.
In order to provide additional analytical data to the users of GMHE's
financial information, supplemental data in the form of unaudited summary pro
forma financial data are provided. Consistent with the basis on which
earnings of GMHE available for the payment of dividends on GM Class H common
stock is determined, the pro forma data exclude the General Motors' purchase
accounting adjustments related to the acquisition of Hughes. Included in the
supplemental data are certain financial ratios which provide measures of
financial returns excluding the impact of purchase accounting adjustments.
The pro forma data are not presented as a measure of GM's total return on its
investment in GMHE.
- 50 -
<PAGE>8
GM HUGHES ELECTRONICS CORPORATION AND SUBSIDIARIES
Summary Pro Forma Financial Data*
Pro Forma Condensed Statement of Consolidated Operations
Nine Months Ended
Third Quarter September 30,
------------------ ------------------
1994 1993 1994 1993
------------------ ------------------
(Dollars in Millions
Except per Share Amounts)
Total Revenues $3,354.5 $3,319.9 $10,477.7 $9,816.5
Total Costs and Expenses 2,962.1 2,954.3 9,145.5 8,761.2
------- ------- ------- -------
Income before Income Taxes 392.4 365.6 1,332.2 1,055.3
United States, foreign, and other
income taxes 148.2 141.6 508.2 410.0
------- ------- ------- -------
Income before cumulative
effect of accounting change 244.2 224.0 824.0 645.3
Cumulative effect of accounting change - - (30.4) -
------- ------- ------- -------
Earnings Used for Computation of
Available Separate Consolidated
Net Income $244.2 $224.0 $793.6 $645.3
======= ======= ======= =======
Earnings Attributable to General
Motors Class H Common Stock on a
Per Share Basis
Before cumulative effect of
accounting change $0.61 $0.56 $2.06 $1.61
Cumulative effect of accounting change - - (0.08) -
---- ---- ---- ----
Net earnings attributable to
General Motors Class H Common Stock $0.61 $0.56 $1.98 $1.61
==== ==== ==== ====
Pro Forma Condensed Consolidated Balance Sheet
September 30, December 31,
ASSETS 1994 1993
---------------------------
(Dollars in Millions)
Total Current Assets $6,154.6 $5,714.3
Property - Net 2,591.7 2,634.4
Telecommunication and Other Equipment - Net 963.7 767.6
Intangible Assets, Investments, and Other Assets 1,826.1 1,871.7
-------- --------
Total Assets $11,536.1 $10,988.0
======== ========
LIABILITIES AND STOCKHOLDER'S EQUITY
Total Current Liabilities $3,306.2 $3,549.1
Long-Term Debt and Capitalized Leases 356.8 416.8
Postretirement Benefits Other Than Pensions,
Other Liabilities, Deferred Income Taxes,
and Deferred Credits 3,124.4 2,823.1
Total Stockholder's Equity** 4,748.7 4,199.0
-------- --------
Total Liabilities and Stockholder's Equity** $11,536.1 $10,988.0
======== ========
* The summary is unaudited and excludes GM purchase accounting adjustments
related to the acquisition of Hughes.
** General Motors' equity in its wholly-owned subsidiary, GMHE. Holders of
GM Class H common stock have no direct rights in the equity or assets of
GMHE, but rather have rights in the equity and assets of General Motors
(which includes 100% of the stock of GMHE).
- 51 -
<PAGE>9
GM HUGHES ELECTRONICS CORPORATION AND SUBSIDIARIES
Summary Pro Forma Financial Data*
Pro Forma Selected Segment Data
Nine Months Ended
Third Quarter September 30,
------------------ -------------------
1994 1993 1994 1993
------------------ -------------------
(Dollars in Millions)
AUTOMOTIVE ELECTRONICS
Revenues
Amount $1,141.9 $931.0 $3,865.1 $3,209.9
As a percentage of GMHE Revenues 34.0% 28.0% 36.9% 32.7%
Net Sales $1,124.2 $936.1 $3,826.3 $3,203.0
Operating Profit (1) $117.3 $85.9 $561.6 $404.7
Operating Profit Margin(2) 10.4% 9.2% 14.7% 12.6%
Depreciation and Amortization $41.0 $41.7 $119.8 $107.1
Capital Expenditures $36.9 $56.6 $89.0 $93.0
TELECOMMUNICATIONS AND SPACE
Revenues
Amount $677.2 $707.9(3)$1,825.6 $1,610.4(3)
As a percentage of GMHE Revenues 20.2% 21.3% 17.4% 16.4%
Net Sales $673.3 $620.4 $1,823.9 $1,519.8
Operating Profit (1) $135.2 $64.5 $271.7 $149.8
Operating Profit Margin(2) 20.1% 10.4% 14.9% 9.9%
Depreciation and Amortization(4) $36.6 $22.9 $91.2 $75.6
Capital Expenditures(5) $111.3 $62.3 $291.9 $157.6
DEFENSE ELECTRONICS
Revenues
Amount $1,356.2 $1,475.6 $4,303.1 $4,454.6
As a percentage of GMHE Revenues 40.4% 44.5% 41.1% 45.4%
Net Sales $1,354.7 $1,460.3 $4,273.2 $4,434.3
Operating Profit (1) $168.2 $128.2 $500.8 $418.0
Operating Profit Margin(2) 12.4% 8.8% 11.7% 9.4%
Depreciation and Amortization(4) $34.0 $49.3 $114.4 $141.2
Capital Expenditures $30.9 $14.0 $97.1 $58.1
COMMERCIAL TECHNOLOGIES
Revenues
Amount $179.2 $205.4 $483.9 $541.6
As a percentage of GMHE Revenues 5.4% 6.2% 4.6% 5.5%
Net Sales $168.6 $202.9 $476.0 $541.6
Operating Profit (Loss)(1) ($52.0) $7.2 ($56.1) $13.6
Operating Profit (Loss) Margin (2) (30.8%) 3.5% (11.8%) 2.5%
Depreciation and Amortization(4) $7.6 $11.2 $22.7 $32.5
Capital Expenditures $8.3 $3.9 $19.9 $10.4
CORPORATE
Operating Loss (1) ($4.1) ($4.1) ($8.7) ($13.3)
Certain amounts for 1993 have been reclassified to conform with 1994
classifications.
* The summary is unaudited and excludes GM purchase accounting adjustments
related to the acquisition of Hughes.
(1) Net Sales less Total Costs and Expenses other than Interest Expense.
(2) Operating Profit (Loss) as a percentage of Net Sales.
(3) Includes $89.7 million pre-tax gain on sale of interest in JCSAT.
(4) Excludes amortization arising from purchase accounting adjustments related
to GM's acquisition of Hughes amounting to $2.7 million, $2.7 million,
$8.1 million, and $8.1 million, respectively, for the Telecommunications
and Space segment; $25.7 million, $25.6 million, $77.1 million, and $77.0
million, respectively, for the Defense Electronics segment; and $2.6
million, $2.6 million, $7.7 million, and $7.7 million, respectively, for
the Commercial Technologies segment.
(5) Includes expenditures related to telecommunications and other equipment
amounting to $70.6 million, $24.6 million, $205.3 million, and $76.1
million, respectively.
- 52 -
<PAGE>10
GM HUGHES ELECTRONICS CORPORATION AND SUBSIDIARIES
Summary Pro Forma Financial Data*
Pro Forma Selected Financial Data
Nine Months Ended
Third Quarter September 30,
------------------ ------------------
1994 1993 1994 1993
------------------ ------------------
(Dollars
in Millions
Except
per Share Amounts)
Operating profit $364.6 $281.7 $1,269.3 $972.8
Income before income
taxes and cumulative effect
of accounting change $392.4 $365.6 $1,332.2 $1,055.3
Earnings used for
computation of available
separate consolidated
net income $244.2 $224.0 $793.6(1) $645.3
Average number of GM Class H
dividend base shares (2) 399.9 399.9 399.9 399.9
Stockholder's Equity $4,748.7 $3,995.8 $4,748.7 $3,995.8
Dividends per share of
GM Class H common stock $0.20 $0.18 $0.60 $0.54
Working capital $2,848.4 $1,995.0 $2,848.4 $1,995.0
Operating profit as a
percent of net sales 11.0% 8.7% 12.2% 10.0%
Pre-tax income as a
percent of revenues 11.7% 11.0% 12.7% 10.8%
Net income as a
percent of revenues 7.3% 6.7% 7.6% 6.6%
* The summary is unaudited and excludes GM purchase accounting adjustments
related to the acquisition of Hughes.
(1) Includes unfavorable cumulative effect of accounting change of
$30.4 million.
(2) Class H dividend base shares is used in calculating earnings attributable
to GM Class H common stock on a per share basis. This is not the same as
the average number of GM Class H shares outstanding, which was 92.7
million for the third quarter of 1994 and 87.4 million for the third
quarter of 1993.
* * * * * * *
- 53 -
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM GENERAL
MOTORS CORPORATION SEPTEMBER 30, 1994 CONSOLIDATED FINANCIAL STATEMENTS AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THIRD QUARTER 1994 FORM 10-Q.
</LEGEND>
<CIK> 0000040730
<NAME> GENERAL MOTORS CORPORATION
<MULTIPLIER> 1,000,000
<CURRENCY> U.S.DOLLAR
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> SEP-30-1994
<EXCHANGE-RATE> 1.0
<CASH> 9,806
<SECURITIES> 4,613
<RECEIVABLES> 59,714
<ALLOWANCES> 0
<INVENTORY> 10,345
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<COMMON> 1,291
0
2
<OTHER-SE> 8,327
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<SALES> 97,774
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