<PAGE> 1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-1004
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT
(DATE OF EARLIEST EVENT REPORTED)
FEBRUARY 26, 1996
GENERAL MOTORS CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
STATE OF DELAWARE
(STATE OR OTHER JURISDICTION
OF INCORPORATION)
1-143
(COMMISSION FILE NUMBER)
38-0572515
(I.R.S. EMPLOYER
IDENTIFICATION NO.)
767 FIFTH AVENUE, NEW YORK, NEW YORK
3044 WEST GRAND BOULEVARD, DETROIT, MICHIGAN
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
10153-0075
48202-3091
(ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (313)-556-5000
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<PAGE> 2
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements of Business Acquired
None.
(b) Pro Forma Financial Information
None.
(c) Exhibits
Exhibit 23 Consent of Independent Auditors
Exhibit 99 Audited Consolidated Financial Statements of General Motors
Corporation as of December 31, 1995 and 1994 and for each of the three years in
the period ended December 31, 1995 and Supplementary Information (Unaudited)
relating to Selected Quarterly Data and Selected Financial Data.
Exhibit 27 Financial Data Schedule (for SEC information only).
2
<PAGE> 3
SIGNATURE
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)
Date: February 26, 1996
By: /s/ WALLACE W. CREEK
------------------------------------
(Wallace W. Creek, Comptroller)
3
<PAGE> 1
EXHIBIT 23
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
CONSENT OF INDEPENDENT AUDITORS
GENERAL MOTORS CORPORATION:
We consent to the incorporation by reference of our report dated January
29, 1996 appearing in this Current Report on Form 8-K of General Motors
Corporation in the following Registration Statements:
<TABLE>
<CAPTION>
REGISTRATION
FORM STATEMENT NO. DESCRIPTION
- ----- --------------------- ----------------------------------------------------------------
<C> <S> <C>
S-3 33-41557 General Motors Corporation Debt Securities
S-3 33-64229 General Motors Corporation Debt Securities
S-3 33-47343 General Motors Corporation $1 2/3 Par Value Common Stock
(Post-Effective
Amendment No. 1)
S-3 33-49035 General Motors Corporation $1 2/3 Par Value Common Stock
(Amendment No. 1)
S-3 33-56671 General Motors Corporation $1 2/3 Par Value Common Stock
(Amendment No. 1)
S-3 33-49309 General Motors Corporation Dividend Reinvestment Plan
S-8 33-56753 The General Motors Personal Savings Plan for Hourly-Rate
Employees in the United States
S-8 33-54841 General Motors Amended 1987 Stock Incentive Plan
S-8 33-64197 General Motors Savings-Stock Purchase Program for Salaried
Employees in the United States
S-8 2-94690 1984 Electronic Data Systems Corporation Stock Purchase Plan
(Post-Effective
Amendment No. 1)
S-8 2-94691 1984 Electronic Data Systems Corporation Stock Incentive Plan
(Post-Effective
Amendment No. 1)
S-8 33-64681 EDS Deferred Compensation Plan
S-8 33-54833 EDS Puerto Rico Savings Plan
S-8 33-32322 Hughes Aircraft Company Salaried Employees' Thrift and Savings
Plan
Hughes Aircraft Company Tucson Bargaining Employees' Thrift and
Savings Plan
Hughes Aircraft Company California Hourly Employees' Thrift and
Savings Plan
Hughes Thrift and Savings Plan
S-8 33-54835 The GMAC Mortgage Corporation Savings Incentive Plan
S-8 33-64199 Hughes Electronics Corporation Incentive Plan
S-8 33-64691 Saturn Individual Savings Plan for Represented Members
S-8 33-64693 Saturn Personal Choices Savings Plan for Non-Represented Members
S-8 33-28714 Marketing & Systems Development Corporation 1985 Incentive Stock
Option Plan
</TABLE>
/s/DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
Detroit, Michigan
February 23, 1996
4
<PAGE> 1
EXHIBIT 99
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
RESPONSIBILITIES FOR CONSOLIDATED FINANCIAL STATEMENTS
The following consolidated financial statements of General Motors
Corporation and subsidiaries were prepared by management which is responsible
for their integrity and objectivity. The statements have been prepared in
conformity with generally accepted accounting principles and, as such, include
amounts based on judgments of management. Financial information elsewhere in
this Annual Report is consistent with that in the consolidated financial
statements.
Management is further responsible for maintaining a system of internal
accounting controls, designed to provide reasonable assurance that the books and
records reflect the transactions of the companies and that its established
policies and procedures are carefully followed. From a stockholder's point of
view, perhaps the most important feature in the system of control is that it is
continually reviewed for its effectiveness and is augmented by written policies
and guidelines, the careful selection and training of qualified personnel, and a
strong program of internal audit.
Deloitte & Touche LLP, an independent auditing firm, is engaged to audit
the consolidated financial statements of General Motors Corporation and its
subsidiaries and issue reports thereon. The audit is conducted in accordance
with generally accepted auditing standards which comprehend the consideration of
internal accounting controls and tests of transactions to the extent necessary
to form an independent opinion on the financial statements prepared by
management. The Independent Auditors' Report appears on the next page.
The Board of Directors, through the Audit Committee (composed entirely of
non-employee Directors), is responsible for assuring that management fulfills
its responsibilities in the preparation of the consolidated financial
statements. The Committee selects the independent auditors annually in advance
of the Annual Meeting of Stockholders and submits the selection for ratification
at the Meeting. In addition, the Committee reviews the scope of the audits and
the accounting principles being applied in financial reporting. The independent
auditors, representatives of management, and the internal auditors meet
regularly (separately and jointly) with the Committee to review the activities
of each, to ensure that each is properly discharging its responsibilities, and
to assess the effectiveness of the system of internal accounting controls. It is
management's conclusion that the system of internal accounting controls at
December 31, 1995 provides reasonable assurance that the books and records
reflect the transactions of the companies and that its established policies and
procedures are complied with. To ensure complete independence, Deloitte & Touche
LLP has full and free access to meet with the Committee, without management
representatives present, to discuss the results of the audit, the adequacy of
internal accounting controls, and the quality of the financial reporting.
<TABLE>
<S> <C>
/s/ JOHN F. SMITH, JR. /s/ J. MICHAEL LOSH
- ------------------------------------- -------------------------------------
John F. Smith, Jr. J. Michael Losh
Chairman, Chief Executive Officer, Chief Financial Officer
and President
</TABLE>
1
<PAGE> 2
INDEPENDENT AUDITORS' REPORT
General Motors Corporation, its Directors, and Stockholders:
We have audited the Consolidated Balance Sheets of General Motors
Corporation and subsidiaries as of December 31, 1995 and 1994 and the related
Consolidated Statements of Income and Cash Flows for each of the three years in
the period ended December 31, 1995. These financial statements are the
responsibility of the Corporation's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of General Motors Corporation and subsidiaries
at December 31, 1995 and 1994 and the results of their operations and their cash
flows for each of the three years in the period ended December 31, 1995 in
conformity with generally accepted accounting principles.
As discussed in Note 1 to the financial statements, effective January 1,
1995 the Corporation changed its method of accounting for sales to daily rental
car companies. Also, as discussed in Note 1 to the financial statements,
effective January 1, 1994 the Corporation changed its methods of accounting for
postemployment benefits and certain investments in debt and equity securities.
/s/DELOITTE & TOUCHE LLP
- -------------------------------------
DELOITTE & TOUCHE LLP
Detroit, Michigan
January 29, 1996
2
<PAGE> 3
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------
1995 1994 1993
---------- ---------- ----------
(DOLLARS IN MILLIONS
EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C>
NET SALES AND REVENUES (NOTE 1)
Manufactured products.............................................. $143,666.1 $134,759.8 $119,686.3
Financial services................................................. 11,664.0 9,418.8 8,752.0
Computer systems services.......................................... 8,531.0 6,412.9 5,183.6
Other income (Note 3).............................................. 4,967.5 4,359.7 4,597.6
---------- ---------- ----------
TOTAL NET SALES AND REVENUES................................... 168,828.6 154,951.2 138,219.5
---------- ---------- ----------
COSTS AND EXPENSES
Cost of sales and other operating charges, exclusive of items
listed below..................................................... 126,535.3 117,220.5 106,421.9
Selling, general, and administrative expenses...................... 13,514.7 12,233.7 11,531.9
Interest expense (Note 9).......................................... 5,302.2 5,431.9 5,673.7
Depreciation of real estate, plants, and equipment (Note 1)........ 8,554.4 7,124.4 6,576.3
Amortization of special tools (Note 1)............................. 3,212.0 2,900.7 2,535.3
Amortization of intangible assets (Notes 1 and 8).................. 255.3 226.2 330.4
Other deductions (Note 3).......................................... 1,678.4 1,460.5 1,624.7
Special provision for scheduled plant closings (Note 15)........... -- -- 950.0
---------- ---------- ----------
TOTAL COSTS AND EXPENSES....................................... 159,052.3 146,597.9 135,644.2
---------- ---------- ----------
INCOME BEFORE INCOME TAXES......................................... 9,776.3 8,353.3 2,575.3
United States, foreign, and other income taxes (Note 6)............ 2,843.8 2,694.6 109.5
---------- ---------- ----------
Income before cumulative effect of accounting changes.............. 6,932.5 5,658.7 2,465.8
Cumulative effect of accounting changes (Note 1)................... (51.8) (758.1) --
---------- ---------- ----------
NET INCOME..................................................... 6,880.7 4,900.6 2,465.8
Preference shares tender offer premium (Note 17)................... 153.4 -- --
Dividends on preferred and preference stocks (Note 17)............. 210.2 320.7 356.8
---------- ---------- ----------
INCOME ON COMMON STOCKS........................................ $ 6,517.1 $ 4,579.9 $ 2,109.0
========== ========== ==========
EARNINGS ATTRIBUTABLE TO COMMON STOCKS
$1 2/3 par value before cumulative effect of accounting
changes........................................................ $ 5,508.8 $ 4,645.2 $ 1,537.3
Cumulative effect of accounting changes (Note 1)................. (51.8) (751.3) --
---------- ---------- ----------
Net earnings attributable to $1 2/3 par value.................... $ 5,457.0 $ 3,893.9 $ 1,537.3
========== ========== ==========
Net earnings attributable to Class E............................. $ 795.5 $ 444.4 $ 367.2
========== ========== ==========
Class H before cumulative effect of accounting change............ $ 264.6 $ 248.4 $ 204.5
Cumulative effect of accounting change (Note 1).................. -- (6.8) --
---------- ---------- ----------
Net earnings attributable to Class H............................. $ 264.6 $ 241.6 $ 204.5
========== ========== ==========
Average number of shares of common stocks outstanding (in millions)
$1 2/3 par value................................................. 749.7 741.3 710.2
Class E.......................................................... 404.6 260.3 243.0
Class H.......................................................... 95.5 92.1 88.6
EARNINGS PER SHARE ATTRIBUTABLE TO COMMON STOCKS (NOTE 18)
$1 2/3 par value before cumulative effect of accounting
changes........................................................ $7.28 $6.20 $2.13
Cumulative effect of accounting changes (Note 1)................. (0.07) (1.05) --
========== ========== ==========
Net earnings attributable to $1 2/3 par value.................... $7.21 $5.15 $2.13
========== ========== ==========
Net earnings attributable to Class E............................. $1.96 $1.71 $1.51
========== ========== ==========
Class H before cumulative effect of accounting change............ $2.77 $2.70 $2.30
Cumulative effect of accounting change (Note 1).................. -- (0.08) --
========== ========== ==========
Net earnings attributable to Class H............................. $2.77 $2.62 $2.30
========== ========== ==========
</TABLE>
Reference should be made to the Notes to Financial Statements.
3
<PAGE> 4
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------
1995 1994
---------- ----------
(DOLLARS IN MILLIONS EXCEPT
PER SHARE AMOUNTS)
<S> <C> <C>
ASSETS
Cash and cash equivalents (Note 1)........................................... $ 11,044.3 $ 10,939.0
Other marketable securities.................................................. 5,598.6 5,136.6
---------- ----------
Total cash and marketable securities................................... 16,642.9 16,075.6
Finance receivables -- net (Note 4).......................................... 58,732.0 54,077.3
Accounts and notes receivable (less allowances).............................. 9,988.4 8,977.8
Inventories (less allowances) (Note 5)....................................... 11,529.5 10,127.8
Contracts in process (less advances and progress payments of $1,327.2 and
$2,311.2) (Note 1)......................................................... 2,469.2 2,265.4
Net equipment on operating leases (less accumulated depreciation of $7,224.5
and $5,374.7) (Note 7)..................................................... 27,702.3 20,061.6
Deferred income taxes (Note 6)............................................... 19,028.3 19,693.3
Property (Note 1)
Real estate, plants, and equipment -- at cost (Note 7)..................... 73,652.3 69,807.9
Less accumulated depreciation.............................................. 44,083.2 42,586.4
---------- ----------
Net real estate, plants, and equipment................................... 29,569.1 27,221.5
Special tools -- at cost (less amortization)............................... 8,170.7 7,559.1
---------- ----------
Total property......................................................... 37,739.8 34,780.6
Intangible assets -- at cost (less amortization) (Notes 1 and 8)............. 11,898.9 11,913.8
Other assets (less allowances)............................................... 21,392.1 20,625.5
---------- ----------
TOTAL ASSETS........................................................... $217,123.4 $198,598.7
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Accounts payable (principally trade)......................................... $ 11,898.8 $ 11,635.0
Notes and loans payable (Note 9)............................................. 83,323.5 73,730.2
United States, foreign, and other income taxes -- deferred and payable (Note
6)......................................................................... 3,231.6 2,721.0
Postretirement benefits other than pensions (Note 12)........................ 41,595.1 40,018.2
Pensions (Note 13)........................................................... 6,842.3 14,353.2
Other liabilities and deferred credits (Note 14)............................. 46,886.6 42,867.3
---------- ----------
TOTAL LIABILITIES...................................................... 193,777.9 185,324.9
---------- ----------
STOCKS SUBJECT TO REPURCHASE (NOTE 17)....................................... -- 450.0
---------- ----------
STOCKHOLDERS' EQUITY (NOTES 17 AND 20)
Preference stocks............................................................ 1.2 2.4
Common stocks
$1 2/3 par value (issued, 753,008,273 and 754,345,782 shares).............. 1,255.0 1,257.2
Class E (issued, 442,812,166 and 268,125,255 shares)....................... 44.3 26.8
Class H (issued, 97,152,014 and 78,720,022 shares)......................... 9.7 7.9
Capital surplus (principally additional paid-in capital)..................... 18,870.9 13,149.4
Net income retained for use in the business.................................. 7,185.4 1,785.8
---------- ----------
Subtotal............................................................... 27,366.5 16,229.5
Minimum pension liability adjustment (Note 13)............................... (4,736.3) (3,548.4)
Accumulated foreign currency translation adjustments......................... 222.5 (100.4)
Net unrealized gains on investments in certain debt and equity securities
(Note 1)................................................................... 492.8 243.1
---------- ----------
TOTAL STOCKHOLDERS' EQUITY............................................. 23,345.5 12,823.8
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY............................. $217,123.4 $198,598.7
========== ==========
</TABLE>
Reference should be made to the Notes to Financial Statements.
4
<PAGE> 5
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------
1995 1994 1993
------------ ------------ ------------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Income before cumulative effect of accounting
changes....................................... $ 6,932.5 $ 5,658.7 $ 2,465.8
Adjustments to reconcile income before cumulative
effect of accounting changes to net cash
provided by operating activities
Depreciation of real estate, plants, and
equipment................................... 4,062.1 3,688.7 3,682.7
Depreciation of equipment on operating
leases...................................... 4,492.3 3,435.7 2,893.6
Amortization of special tools................. 3,212.0 2,900.7 2,535.3
Amortization of intangible assets............. 255.3 226.2 330.4
Amortization of discount and issuance costs on
debt issues................................. 77.6 71.3 90.5
Provision for financing losses................ 448.8 177.3 300.8
Special provision for scheduled plant
closings.................................... -- -- 950.0
Provision for inventory allowances............ 77.5 53.1 44.1
Pension expense, net of cash contributions.... (2,983.9) (5,096.1) (1,548.2)
Pre-tax (gain) loss on sales of various
assets...................................... 116.1 (17.6) 305.6
Provision for ongoing postretirement benefits
other than pensions, net of cash payments... 1,684.1 2,252.6 2,396.7
Origination and purchase of mortgage loans.... (12,085.6) (10,135.7) (21,583.7)
Proceeds on sale of mortgage loans............ 11,132.7 10,719.2 22,309.5
Change in other investments, miscellaneous
assets, deferred credits, etc. ............. 367.5 (1,628.2) 340.2
Change in other operating assets and
liabilities
Accounts receivable......................... (733.1) (2,582.1) (480.9)
Inventories................................. (1,487.0) (1,750.3) 240.3
Prepaid expenses and other deferred
charges.................................. (661.6) (725.5) 60.2
Deferred taxes and income taxes payable*.... 1,945.2 903.8 (1,512.8)
Other liabilities*.......................... 438.8 2,683.5 (189.3)
Other....................................... (867.8) 1,113.4 1,115.6
----------- ----------- -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES.......... $ 16,423.5 $ 11,948.7 $ 14,746.4
----------- ----------- -----------
</TABLE>
- -------------------------------------------
* Excluding effect of accounting changes.
Reference should be made to the Notes to Financial Statements.
5
<PAGE> 6
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS -- CONCLUDED
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------
1995 1994 1993
------------ ------------ ------------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C>
CASH FLOWS FROM INVESTING ACTIVITIES
Investment in companies, net of cash acquired.... $ (616.3) $ (246.6) $ (232.4)
Expenditures for real estate, plants, and
equipment..................................... (6,351.4) (4,883.7) (3,822.1)
Expenditures for special tools................... (3,725.9) (2,341.4) (2,648.6)
Proceeds from disposals of real estate, plants,
and equipment................................. 540.8 351.0 534.9
Proceeds from the sale of various assets......... 183.2 518.4 231.5
Expenditures related to the sale of NCRS' net
assets........................................ (197.0) -- --
Change in other investing assets
Investments in other marketable securities --
acquisitions................................ (18,410.1) (14,482.3) (13,545.4)
Investments in other marketable securities --
liquidations................................ 17,947.4 13,906.0 13,377.0
Finance receivables -- acquisitions........... (163,033.3) (156,579.8) (103,396.3)
Finance receivables -- liquidations........... 133,766.2 137,598.4 92,808.6
Finance receivables -- other.................. 244.3 610.6 8,528.3
Proceeds from sales of finance receivables.... 25,982.5 18,800.0 13,072.2
Operating leases -- net*...................... (8,856.7) (10,239.8) (4,887.7)
Other......................................... (13.0) (510.6) 346.8
----------- ----------- -----------
NET CASH PROVIDED BY (USED IN) INVESTING
ACTIVITIES....................................... (22,539.3) (17,499.8) 366.8
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in short-term loans
payable....................................... 6,087.6 3,877.7 (4,278.3)
Increase in long-term debt....................... 12,129.8 12,997.4 9,634.7
Decrease in long-term debt....................... (9,636.3) (14,259.9) (17,029.6)
Redemption of HHMI put options................... -- -- (315.0)
Repurchases of common, preferred, and preference
stocks........................................ (1,680.7) -- (265.6)
Proceeds from issuing common stocks.............. 504.8 1,184.9 860.2
Cash dividends paid to stockholders.............. (1,327.7) (1,111.9) (1,083.9)
----------- ----------- -----------
NET CASH PROVIDED BY (USED IN) FINANCING
ACTIVITIES....................................... 6,077.5 2,688.2 (12,477.5)
----------- ----------- -----------
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH
EQUIVALENTS...................................... 143.6 11.4 76.2
----------- ----------- -----------
Net increase (decrease) in cash and cash
equivalents...................................... 105.3 (2,851.5) 2,711.9
Cash and cash equivalents at beginning of the
year............................................. 10,939.0 13,790.5 11,078.6
----------- ----------- -----------
Cash and cash equivalents at end of the year....... $ 11,044.3 $ 10,939.0 $ 13,790.5
=========== =========== ===========
</TABLE>
- -------------------------------------------
* Excluding effect of accounting changes.
Reference should be made to the Notes to Financial Statements.
6
<PAGE> 7
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The consolidated financial statements include the accounts of General
Motors Corporation (hereinafter referred to as the Corporation) and domestic and
foreign subsidiaries which are more than 50% owned, principally General Motors
Acceptance Corporation and Subsidiaries (GMAC), Electronic Data Systems
Corporation and Subsidiaries (EDS), and Hughes Electronics Corporation and
Subsidiaries (Hughes) (collectively referred to as General Motors). General
Motors' share of earnings or losses of associates in which at least 20% of the
voting securities is owned is included in consolidated operating results under
the equity method of accounting (see Note 3).
Certain amounts for 1994 and 1993 have been reclassified to conform with
the 1995 classifications.
Use of Estimates in the Preparation of the Financial Statements
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect amounts reported therein. Due to the inherent
uncertainty involved in making estimates, actual results reported in future
periods may be based upon amounts which differ from those estimates.
Revenue Recognition
Sales are generally recorded when products are shipped to independent
dealers. Provisions for normal dealer sales incentives, returns and allowances,
and GM Card rebates are made at the time of vehicle sale. Costs related to
special sales incentive programs are recognized as reductions to sales when
determinable.
Certain sales under long-term contracts, primarily in the defense business,
are recorded using the percentage-of-completion (cost-to-cost) method of
accounting. Hughes Aircraft Company, a subsidiary of Hughes, recognizes revenues
for certain commercial long-term contracts using the units-of-delivery method.
Profits expected to be realized on contracts are based on estimates of total
sales value and costs at completion. These estimates are reviewed and revised
periodically throughout the lives of the contracts, and adjustments to profits
resulting from such revisions are recorded in the accounting period in which the
revisions are made. Estimated losses on contracts are recorded in the period in
which they are identified.
In the case of finance receivables in which the face amount includes the
finance charge (principally retail financing), earnings are recorded in income
over the terms of the receivables using the interest method. On finance
receivables in which the face amount represents the principal (principally
wholesale, interest-bearing financing, and fleet leasing), the interest is
reported as income when earned. Certain loan origination costs are deferred and
amortized to financing revenue over the life of the related loans using the
interest method. Income from operating lease assets is recognized as scheduled
payments become due.
Insurance premiums are earned on a basis related to coverage provided over
the terms of the policies. Commission costs and premium taxes incurred in
acquiring new business are deferred and amortized over the terms of the related
policies on the same basis as premiums are earned. The liability for losses
includes a provision for unreported losses, based on past experience, net of the
estimated salvage and subrogation recoverable.
Product-Related Expenses
Expenditures for advertising and sales promotion and for other
product-related expenses are charged to costs and expenses as incurred;
provisions for estimated costs related to product warranty are made at the time
the products are sold. Expenditures for advertising amounted to $3,139.5 million
in 1995, $2,805.9 million in 1994, and $2,574.4 million in 1993. Expenditures
for research and development are charged to costs and
7
<PAGE> 8
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
expenses as incurred and amounted to $8,387.9 million in 1995, $7,035.8 million
in 1994, and $6,029.9 million in 1993.
Depreciation and Amortization
Depreciation is provided based on estimated useful lives of groups of
property generally using accelerated methods, which accumulate depreciation of
approximately two-thirds of the depreciable cost during the first half of the
estimated useful lives.
The cost of each leasehold improvement is amortized over the period of the
lease or the life of the property, whichever is shorter, with the amortization
applied directly to the asset account and charged to costs and expenses.
Depreciation on capitalized leases with a term of five years or less is provided
using the straight-line method; leases with a term in excess of five years are
depreciated using the foregoing accelerated methods.
Expenditures for special tools are amortized over their estimated useful
lives, primarily using the units of production method. Amortization is applied
directly to the asset account. Replacement of special tools for reasons other
than changes in products is charged directly to cost of sales.
Depreciation of vehicles and other equipment on operating leases or in
General Motors' use is provided generally on a straight-line basis. The
difference between the net book value and the proceeds of sale or salvage on
items disposed of is included in income as a charge against or credit to the
provision for depreciation.
Certain purchased software is being amortized over five to eight years.
Foreign Currency Translation
Exchange and translation gains (losses) on an after-tax basis included in
consolidated operating results in 1995, 1994, and 1993 amounted to ($380.7)
million, $206.9 million, and $189.0 million, respectively.
Cash and Cash Equivalents
Cash equivalents are defined as short-term, highly liquid investments with
original maturities of 90 days or less.
Supplemental disclosure of cash flow information is as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------
1995 1994 1993
-------- -------- --------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C>
Cash paid during the years for
Interest....................................... $6,056.9 $5,499.3 $5,938.0
Income taxes................................... $ 930.5 $2,045.8 $1,545.7
</TABLE>
With respect to noncash transactions, 173.2 million shares of Class E
common stock (Note 13) and 18.8 million shares of $1 2/3 par value common stock
were contributed to the U.S. pension plans in 1995 and 1993, respectively. The
1993 contribution of $1 2/3 par value shares consisted of shares sold to the
Corporation from individual employee accounts in various stock savings plans of
General Motors. Also, General Motors entered into capital lease agreements
totaling $22.3 million, $25.0 million, and $13.7 million, in 1995, 1994, and
1993, respectively.
Allowance for Financing Losses
An allowance for credit losses is generally established during the period
in which receivables are acquired and is maintained in amounts considered by
management to be appropriate in relation to receivables outstanding.
8
<PAGE> 9
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
Losses arising from repossession of the collateral supporting doubtful
accounts are recognized upon repossession of the collateral. Repossessed
collateral is recorded at estimated realizable value in other assets and
adjustments to the related valuation allowance are included in operating
expense. Where repossession has not been effected, losses are charged off as
soon as it is determined that the collateral cannot be repossessed, generally
not more than 150 days after default.
Nonretail finance receivables are reduced to the estimated fair value of
collateral when determined to be impaired or uncollectible.
Contracts in Process
Contracts in process are stated at costs incurred plus estimated profit,
less amounts billed to customers and advances and progress payments applied.
Engineering, tooling, manufacturing, and applicable overhead costs, including
administrative, research and development, and selling expenses, are charged to
costs and expenses when incurred. Contracts in process also include estimates
relating to claims, requests for equitable adjustments, and amounts withheld
pending negotiation or settlement with customers. Under certain contracts with
the U.S. Government, progress payments are received based on costs incurred on
the respective contracts. Title to the inventories related to such contracts
(included in contracts in process) vests with the U.S. Government.
Intangible Assets
General Motors periodically evaluates the recoverability of goodwill and
other intangible assets by assessing whether the unamortized intangible asset
can be recovered over its remaining life through undiscounted cash flows
generated by underlying tangible assets.
Derivative Instruments
General Motors is party to a variety of foreign exchange, interest rate and
commodity forward contracts and options entered into in connection with the
management of its exposure to fluctuations in foreign exchange rates, interest
rates, and certain commodities prices. These financial exposures are monitored
and managed in accordance with Corporate policies and procedures.
Foreign exchange-forward contracts 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.
Interest rate forward contracts designated and effective as a hedge of an
underlying debt obligation are not marked to market, but are used to adjust
interest expense recognized over the life of the underlying debt agreement.
Gains and losses from terminated contracts are deferred and amortized over the
remaining period of the original contract. Open interest rate forward contracts
are reviewed regularly to ensure that they remain effective as hedges of
interest rate exposure. Written options (including swaptions and interest rate
caps and collars) are marked to market on a current basis.
General Motors also enters into commodity forward and options contracts.
Since General Motors has the discretion to settle these transactions either in
cash or by taking physical delivery, these contracts are not considered
financial instruments. Commodity forward contracts and options are accounted for
as hedges to the extent they are designated as, and are effective as, hedges of
firm or anticipated commodity purchase contracts.
9
<PAGE> 10
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
Environmental Liabilities
General Motors recognizes environmental liabilities when a loss is probable
and can be reasonably estimated. Such liabilities are generally not subject to
insurance coverage.
The cost of each environmental liability is estimated by engineering,
financial, and legal specialists within General Motors based on current law and
existing technologies. Such estimates are based primarily upon the estimated
cost of investigation and remediation required and the likelihood that other
potentially responsible parties (PRPs) will be able to fulfill their commitments
at the sites where General Motors may be jointly and severally liable. At sites
being addressed under the U.S. Comprehensive Environmental Response,
Compensation, and Liability Act or similar state laws (the "Superfund Sites"),
General Motors typically recognizes a loss once it has been named as a PRP and
has determined that some liability loss is probable. The Superfund Sites are
primarily multi-PRP sites not owned or operated by General Motors. For General
Motors' operating plants, an estimated liability is typically recognized either
upon completion of an environmental assessment or when General Motors proposes
an agreement with the appropriate regulatory agency to take action at a site.
For closed or closing plants owned by General Motors and properties being sold,
an estimated liability is typically recognized at the time the closure decision
is made or sale is recorded and is based on an environmental assessment of the
plant property.
General Motors' estimates for environmental obligations are dependent
primarily on the nature and extent of historical information and physical data
relating to a contaminated site, the complexity of the site, uncertainty as to
what remedy and technology will be required, the outcome of discussions with
regulatory agencies and other PRPs at multi-party sites, the number and
financial viability of other PRPs, and the timing of expenditures; accordingly,
such estimates could change materially as General Motors periodically evaluates
and revises such estimates based on expenditures against established reserves
and the availability of additional information.
Accounting Changes
The Emerging Issues Task Force (EITF) of the Financial Accounting Standards
Board (FASB) reached a consensus in November 1995 on Issue No. 95-1, Revenue
Recognition on Sales with a Guaranteed Minimum Resale Value, and concluded that
a manufacturer must account for the sale of equipment as an operating lease if
it guarantees the resale value of the equipment to the purchaser. Accordingly,
the Corporation has modified its revenue recognition policy on sales to daily
rental car companies to conform to the consensus. Adoption of this consensus,
effective January 1, 1995, resulted in an unfavorable cumulative effect of $51.8
million after-tax ($0.07 per share) attributable to $1 2/3 par value common
stock, and increases at December 31, 1995 in net equipment on operating leases
of $4.4 billion and other liabilities and deferred credits of $4.6 billion. The
effect on future periods is not expected to be material.
Statement of Financial Accounting Standards (SFAS) No. 121, Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of,
which becomes effective for General Motors as of January 1, 1996, establishes
accounting standards for determining and calculating the impairment of
long-lived assets, certain identifiable intangible assets, and goodwill related
to those assets. General Motors will adopt SFAS No. 121 and calculate its impact
on General Motors during the first quarter of 1996.
As permitted by SFAS No. 123, Accounting for Stock-Based Compensation,
which becomes effective for General Motors as of January 1, 1996, and which
encourages companies to record expense for stock options and other stock-based
employee compensation awards based on their fair value at date of grant, General
Motors will continue to apply its current accounting policy under Accounting
Principles Board Opinion No. 25 and will include the necessary disclosures in
its 1996 financial statements.
10
<PAGE> 11
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
Effective January 1, 1994, General Motors adopted SFAS No. 112, Employers'
Accounting for Postemployment Benefits. SFAS No. 112 requires accrual of the
costs of benefits provided to former or inactive employees after employment, but
before retirement. The unfavorable cumulative effect of adopting SFAS No. 112,
determined on a discounted basis, 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 non-cash charge is primarily related to General Motors'
extended-disability benefit program in the U.S. which, under SFAS No. 112, will
be accrued on a service-driven basis.
Also effective January 1, 1994, General Motors 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. SFAS No. 115
requires the recording at fair value of debt securities that are not expected to
be held to maturity and equity securities that have a readily determinable fair
value. The primary effect of SFAS No. 115 on General Motors relates to debt
securities held by a subsidiary of GMAC and certain equity securities.
Marketable securities, other than certain securities held by GMAC and its
subsidiaries (and described in Note 22), are considered available for sale;
$812.6 million mature within one year, $417.2 million mature in two to five
years, and a substantial amount of the remaining $40.6 million matures after 10
years.
Labor Force
General Motors, on a worldwide basis, has a concentration of labor supply
in employees working under union collective bargaining agreements, which
represent approximately 86% of its hourly workforce and 8% of its salaried
workforce. Of these represented employees, 86% of hourly and 37% of salaried
employees are working under agreements that will expire in 1996.
NOTE 2. EDS SPLIT-OFF
The Corporation has previously announced its intention to pursue a
split-off of EDS to the Corporation's Class E stockholders by an exchange of EDS
common stock for Class E stock in a transaction that is tax-free for U.S.
Federal income tax purposes and fair to all classes of the Corporation's common
stockholders. The Corporation also announced in December 1995 that it had
received a ruling from the U.S. Internal Revenue Service to the effect that a
split-off as contemplated by the Corporation would be tax-free to the
Corporation and its common stockholders for U.S. Federal income tax purposes.
The Corporation would not record a gain or loss on the transaction.
The Corporation and EDS management are working to develop specific terms
for such a transaction to present to the Corporation's Board of Directors. Among
other matters being addressed, the managements are in the process of developing
terms for a long-term information technology agreement between the companies to
be effective upon a split-off.
Management of the Corporation and EDS are also addressing the amount of any
special payment that should be made by EDS to the Corporation prior to a
split-off in order to ensure that the split-off is fair to all of the
Corporation's common stockholders. Any such payment will not exceed one billion
dollars and could well be substantially less.
Substantial progress is being made in developing a specific split-off
proposal, although significant matters still remain to be resolved before a
definitive proposal can be presented to the Corporation's Board of Directors for
its consideration. Any such transaction will be subject to approval by the
Corporation's common stockholders. No assurances can be given that a split-off
of EDS will be proposed to the Corporation's common stockholders or, if
proposed, approved by them. However, management of both the Corporation and EDS
and the Corporation's Board of Directors continue to expect that such a
transaction will be accomplished.
11
<PAGE> 12
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
If a split-off of EDS is not completed, EDS would continue as a
wholly-owned subsidiary of the Corporation. Under such circumstances, the
existing contractual arrangements between the Corporation and EDS respecting
information technology would continue with any changes that the Corporation's
Board of Directors may consider fair to all classes of the Corporation's common
stockholders and appropriate in light of the evolving competitive market for
information technology services.
NOTE 3. OTHER INCOME AND OTHER DEDUCTIONS
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------
1995 1994 1993
-------- -------- --------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C>
Other Income
Nonfinancing interest........................................ $1,672.2 $1,507.7 $1,886.2
Insurance premiums........................................... 867.0 873.8 799.3
Claims, commissions, and grants.............................. 603.9 467.4 489.7
Equity in earnings (losses) of associates, net............... 252.9 205.5 (172.5)
Gain on the sale of finance receivables...................... 38.2 30.8 436.4
Other........................................................ 1,533.3 1,274.5 1,158.5
-------- -------- --------
Total other income...................................... $4,967.5 $4,359.7 $4,597.6
======= ======= =======
Other Deductions
Insurance losses and loss adjustment expenses................ $ 620.8 $ 749.7 $ 614.4
Provision for financing losses............................... 448.8 177.3 300.8
Loss on sale of NCRS' net assets*............................ 147.8 -- --
Loss on the sale of Allison Gas Turbine Division (AGT)....... -- -- 305.6
Other........................................................ 461.0 533.5 403.9
-------- -------- --------
Total other deductions.................................. $1,678.4 $1,460.5 $1,624.7
======= ======= =======
</TABLE>
- -------------------------
* The Corporation sold National Car Rental System's (NCRS) net assets, resulting
in $162.6 million of net income, or $0.22 per share of $1 2/3 par value common
stock. The 1995 net income reflects $310.4 million of tax benefits related to
the restructuring for NCRS in 1992. The tax benefits were not previously
recorded due to the uncertainty of ultimate realization.
12
<PAGE> 13
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
NOTE 4. FINANCE RECEIVABLES -- NET
The composition of finance receivables outstanding is summarized as
follows:
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------
1995 1994
--------- ---------
(DOLLARS IN MILLIONS)
<S> <C> <C>
U.S.
Retail............................................................ $26,979.9 $23,486.8
Wholesale......................................................... 15,187.2 14,560.9
Leasing and lease financing....................................... 1,296.0 1,613.4
Term loans to dealers and others.................................. 3,656.4 3,670.0
--------- ---------
Total U.S...................................................... 47,119.5 43,331.1
--------- ---------
Canada, Mexico, and International
Retail............................................................ 8,651.3 7,747.9
Wholesale......................................................... 5,465.3 4,850.6
Leasing and lease financing....................................... 1,733.0 1,666.7
Term loans to dealers and others.................................. 493.3 484.2
--------- ---------
Total Canada, Mexico, and International........................ 16,342.9 14,749.4
--------- ---------
Total finance receivables................................. 63,462.4 58,080.5
Less -- Unearned income............................................. (3,922.5) (3,309.9)
-- Allowance for financing losses.............................. (807.9) (693.3)
--------- ---------
Total finance receivables -- net.......................... $58,732.0 $54,077.3
========= =========
</TABLE>
Retail, lease financing, and leasing receivable installments past due over
30 days amounted to $90.2 million and $55.5 million at December 31, 1995 and
1994, respectively. Installments on term loans to dealers and others past due
over 30 days aggregated $85.2 million at December 31, 1995 and $70.7 million at
December 31, 1994.
The aggregate amount of total finance receivables maturing in each of the
five years following December 31, 1995 is as follows: 1996 - $36,568.1 million;
1997 - $11,315.2 million; 1998 - $8,168.2 million; 1999 - $4,528.4 million; 2000
- - $2,244.2 million; and 2001 and thereafter - $638.3 million.
The following table presents an analysis of the allowance for financing
losses.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER
31,
---------------------
1995 1994
------- -------
(DOLLARS IN MILLIONS)
<S> <C> <C>
Allowance for financing losses at beginning of the year............... $ 693.3 $ 748.0
------- -------
Charge-offs
U.S................................................................. (372.2) (310.7)
Other countries..................................................... (50.2) (50.3)
------- -------
Total charge-offs................................................ (422.4) (361.0)
Recoveries and other.................................................. 104.5 116.0
Transfers (to) from sold receivables allowance........................ (16.3) 13.0
Provisions charged to income.......................................... 448.8 177.3
------- -------
Allowance for financing losses at end of the year................ $ 807.9 $ 693.3
======= =======
</TABLE>
GMAC participates in various sales of receivables programs and has sold
retail finance receivables through special purpose subsidiaries with principal
aggregating $3.6 billion in 1995 and $3.7 billion in 1994.
13
<PAGE> 14
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
These subsidiaries generally retain a subordinated investment of no greater than
9% of the total receivables pool and market the remaining portion. These
subordinated investments absorb losses related to sold receivables to the extent
that such losses are greater than the excess cash flows from those receivables
and cash reserves related to the sale transaction. Pre-tax gains relating to
such sales recorded in other income (excluding limited recourse loss provisions
which generally have been provided at the time the contracts were originally
acquired) amounted to $38.2 million in 1995, $30.8 million in 1994, and $436.4
million in 1993. GMAC continues to service these receivables for a fee and earns
other related ongoing income. GMAC's retail finance receivable servicing
portfolio amounted to $6.6 billion and $9.9 billion at December 31, 1995 and
1994, respectively.
GMAC has also sold wholesale receivables, resulting in decreases in its
wholesale receivables outstanding of $4.7 billion and $2.6 billion at December
31, 1995 and 1994, respectively. GMAC continues to service these receivables for
a fee, and is committed to sell eligible wholesale receivables arising in
certain dealer accounts.
NOTE 5. INVENTORIES
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------
1995 1994
--------- ---------
(DOLLARS IN MILLIONS)
<S> <C> <C>
Major Classes of Inventories
Productive material, work in process, and supplies..................... $ 6,570.4 $ 5,478.3
Finished product, service parts, etc................................... 4,959.1 4,649.5
--------- ---------
Total............................................................. $11,529.5 $10,127.8
========= =========
Memo: Increase in LIFO inventories if valued at FIFO................... $ 2,424.4 $ 2,535.9
</TABLE>
Inventories are stated generally at cost, which is not in excess of market.
The cost of substantially all U.S. inventories other than the inventories of
Saturn Corporation (Saturn) and Hughes is determined by the last-in, first-out
(LIFO) method. The cost of non-U.S., Saturn, and Hughes inventories is
determined generally by the first-in, first-out (FIFO) or average cost methods.
As a result of decreases in U.S. inventories, certain inventory quantities
carried at lower LIFO costs prevailing in prior years, as compared with current
purchases, were liquidated in 1993. This inventory adjustment improved pre-tax
operating results by approximately $134.4 million in 1993, primarily from the
sale of AGT.
14
<PAGE> 15
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
NOTE 6. UNITED STATES, FOREIGN, AND OTHER INCOME TAXES -- DEFERRED AND PAYABLE
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------
1995 1994 1993
-------- -------- -------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C>
Taxes estimated to be payable (refundable) currently
U.S. Federal.................................................. $ (689.7) $ 544.7 $(230.5)
Foreign....................................................... 1,431.2 1,029.9 783.8
U.S. state and local.......................................... 51.1 69.7 188.9
--------- --------- -------
Total...................................................... 792.6 1,644.3 742.2
--------- --------- -------
Deferred tax (benefits) liabilities -- net
U.S. Federal.................................................. 2,051.6 576.0 (86.2)
Increase in U.S. corporate income tax rate.................... -- -- (444.3)
Foreign....................................................... (67.1) 421.7 (28.3)
U.S. state and local.......................................... 135.6 108.5 (5.3)
--------- --------- -------
Total...................................................... 2,120.1 1,106.2 (564.1)
--------- --------- -------
Investment tax credits amortized -- net
U.S. Federal.................................................. (62.1) (48.1) (58.6)
Foreign....................................................... (6.8) (7.8) (10.0)
--------- --------- -------
Total...................................................... (68.9) (55.9) (68.6)
--------- --------- -------
Total taxes........................................... $2,843.8* $2,694.6* $ 109.5
========= ========= =======
</TABLE>
- --------------------------------------------
* Excluding effect of accounting changes.
Deferred income tax assets and liabilities for 1995 and 1994 reflect the
impact of temporary differences between amounts of assets and liabilities for
financial reporting purposes and the bases of such assets and liabilities as
measured by tax laws. The net deferred tax asset in the U.S. was $17,550.0
million and $18,171.0 million at December 31, 1995 and 1994, respectively.
Realization of the net deferred tax assets is dependent on future reversals
of existing taxable temporary differences and future taxable income exclusive of
reversing temporary differences and carryforwards. Although realization is not
assured, management believes that it is more likely than not that the net
deferred tax assets will be realized. The amount of the net deferred tax assets
considered realizable, however, could be reduced in the near term if actual
future taxable income is lower than estimated, or if there are differences in
the timing or amount of future reversals of existing taxable temporary
differences. The valuation allowance increased by $153.8 million and $46.8
million in 1995 and 1994, respectively. Annual tax provisions include amounts
considered sufficient to pay assessments that may result from examination of
prior year tax returns; however, the amount ultimately paid upon resolution of
issues raised may differ materially from the amount accrued. The alternative
minimum tax credit can be carried forward indefinitely. The U.S. state net
operating loss carryforwards will expire in years 1997 - 2010 if not utilized;
however, a substantial portion will not expire until after the year 2000. The
tax credit carryforwards will expire in the years 2000 - 2010 if not utilized.
15
<PAGE> 16
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
Temporary differences and carryforwards which give rise to deferred tax
assets and liabilities are shown as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------------------------------------
1995 1994
------------------------- -------------------------
DEFERRED TAX DEFERRED TAX
------------------------- -------------------------
ASSETS LIABILITIES ASSETS LIABILITIES
--------- ----------- --------- -----------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C>
Postretirement benefits other than pensions... $15,811.7 $ -- $15,184.7 $ --
Minimum pension liability adjustment.......... 2,926.8 -- 2,213.4 --
Benefit plans................................. 2,056.0 6,621.1 1,606.3 3,757.4
Policy and warranty........................... 2,085.4 -- 2,041.9 --
Sales and product allowances.................. 1,548.5 143.2 1,615.2 241.3
Special provision for scheduled plant
closings.................................... 961.7 -- 1,135.8 --
Miscellaneous foreign......................... 1,140.6 318.1 1,422.2 638.3
Profits on long-term contracts................ 514.4 450.3 387.7 632.4
Alternative minimum tax credit
carryforwards............................... 730.4 -- 741.2 --
Depreciation.................................. 606.7 5,034.0 465.3 4,915.6
Capitalized research and experimentation...... 571.1 -- 780.3 --
U.S. state net operating loss carryforwards... 478.4 -- 314.2 --
Financing losses.............................. 298.5 -- 253.2 --
Tax credit carryforwards...................... 536.5 -- 130.0 --
Lease transactions............................ -- 2,741.5 -- 2,321.3
Tax on unremitted profits..................... -- 467.8 -- 353.1
All other..................................... 6,357.6 3,222.0 5,461.3 2,681.7
--------- --------- --------- ---------
Subtotal.................................... 36,624.3 18,998.0 33,752.7 15,541.1
Valuation allowance........................... (1,228.2) -- (1,074.4) --
--------- --------- --------- ---------
Total deferred taxes..................... $35,396.1 $ 18,998.0 $32,678.3 $ 15,541.1
========= ========= ========= =========
</TABLE>
Provisions are made for estimated U.S. and foreign income taxes, less
available tax credits and deductions, which may be incurred on the remittance of
the Corporation's share of subsidiaries' undistributed earnings not deemed to be
permanently invested. Taxes have not been provided on foreign subsidiaries'
earnings which are deemed essentially permanently reinvested of approximately
$7.3 billion at December 31, 1995 and $5.8 billion at December 31, 1994.
Quantification of the deferred tax liability, if any, associated with
permanently reinvested earnings is not practicable.
Income before income taxes included the following components:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------------
1995 1994 1993
-------- -------- --------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C>
U.S. income (loss)......................................... $4,712.6 $3,152.1 $ (512.7)
Foreign income............................................. 5,063.7 5,201.2 3,088.0
-------- -------- --------
Total................................................. $9,776.3 $8,353.3 $2,575.3
======== ======== ========
</TABLE>
16
<PAGE> 17
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
The consolidated income tax was different than the amount computed using
the 35% U.S. Federal statutory income tax rate for the reasons set forth in the
table below:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------------
1995 1994 1993
-------- -------- --------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C>
Tax at U.S. statutory income tax rate...................... $3,421.7 $2,923.7 $ 901.4
U.S. net operating loss carryback.......................... (190.0) -- --
U.S. state and local income taxes.......................... 135.7 130.8 129.7
Deferred tax impact of Federal rate increase............... -- -- (444.3)
Investment tax credits amortized........................... (68.9) (55.9) (68.6)
U.S. tax effect of foreign earnings and dividends.......... 292.2 126.5 80.9
Foreign rates other than 35%............................... (215.8) (453.6) (433.4)
Taxes on unremitted earnings of subsidiaries............... 139.4 123.5 54.3
Equity effect in pre-tax income............................ (88.5) (71.9) 60.4
Sale of NCRS' net assets................................... (258.7) -- --
Other adjustments.......................................... (323.3) (28.5) (170.9)
-------- -------- -------
Consolidated income tax............................... $2,843.8* $2,694.6* $ 109.5
======== ======== =======
</TABLE>
- -------------------------------------------
* Excluding effect of accounting changes.
NOTE 7. PROPERTY AND NET EQUIPMENT ON OPERATING LEASES
<TABLE>
<CAPTION>
ESTIMATED DECEMBER 31,
USEFUL ----------------------
LIVES (YEARS) 1995 1994
------------- --------- ---------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C>
Real estate, plants, and equipment
Land..................................................... -- $ 797.8 $ 799.1
Land improvements........................................ 20-31 1,910.7 1,849.7
Leasehold improvements -- less amortization.............. 8-10 320.7 306.8
Buildings................................................ 29-40 13,921.5 13,651.6
Machinery and equipment.................................. 5-27 45,753.3 43,890.2
Furniture and office equipment........................... 8-20 6,235.3 5,306.7
Capitalized leases....................................... 5-40 1,402.9 1,199.7
Construction in progress................................. -- 3,310.1 2,804.1
--------- ---------
Total................................................. $73,652.3 $69,807.9
========= =========
</TABLE>
The value of General Motors' net equipment on operating leases is based on
estimated residual values of the leased equipment, which are calculated at the
lease inception date. Realization of the residual values is dependent on General
Motors' future ability to market the equipment under then prevailing market
conditions. Although realization is not assured, management believes it is more
likely than not that the estimated residual values will be realized.
The lease payments to be received relate to equipment on operating leases
maturing in each of the five years following December 31, 1995 and are as
follows: 1996-$5,302.4 million; 1997-$3,373.9 million; 1998-$1,361.6 million;
1999-$200.9 million; and 2000-$82.8 million.
17
<PAGE> 18
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
NOTE 8. INTANGIBLE ASSETS
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------
1995 1994
--------- ---------
(DOLLARS IN MILLIONS)
<S> <C> <C>
Pensions (Note 13)..................................................... $ 6,500.9 $ 7,373.8
Intangible assets relating to acquisition of Hughes.................... 2,845.8 3,005.3
Goodwill relating to all other acquisitions............................ 2,025.4 1,214.1
Mortgage servicing rights.............................................. 470.3 222.3
All other.............................................................. 56.5 98.3
--------- ---------
Total................................................................ $11,898.9 $11,913.8
========= =========
</TABLE>
Intangible assets arising from the acquisition of Hughes relate to patents
and related technology and other intangible assets which were originally
recorded in 1985 and are principally being amortized over 40 years.
Goodwill resulting from other acquisitions is being amortized over periods
of eight to 40 years.
Mortgage servicing rights are being amortized over periods that generally
match future net mortgage servicing revenues.
NOTE 9. NOTES AND LOANS PAYABLE
<TABLE>
<CAPTION>
DECEMBER 31,
WEIGHTED AVERAGE ----------------------
INTEREST RATE(1) 1995 1994
---------------- --------- ---------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C>
Notes, loans, and debentures
Payable within one year
Current portion of long-term debt.................. 7.4% $13,117.4 $ 8,381.8
Commercial paper(2)................................ 5.9% 21,913.7 18,644.4
All other(2)....................................... 6.6% 11,617.8 9,213.9
Payable beyond one year
1996............................................... -- -- 11,953.4
1997............................................... 7.0% 11,858.0 10,158.8
1998............................................... 6.9% 6,477.9 2,795.6
1999............................................... 7.1% 4,551.9 4,151.2
2000............................................... 7.5% 4,957.9 2,191.6
2001 and after..................................... 7.7% 9,958.4 7,176.0
Unamortized discount.................................. (1,129.5) (936.5)
--------- ---------
Total............................................ $83,323.5 $73,730.2
========= =========
</TABLE>
- --------------------------------------------------------------------------------
(1) The weighted average interest rate for 1995 includes the impact of interest
rate swap agreements.
(2) The weighted average interest rate for commercial paper and all other
short-term borrowings was 6.1% and 6.5%, respectively, at December 31, 1994.
After consideration of foreign currency swaps, the above 1995 maturities,
payable beyond one year, include $6.1 billion in currencies other than the U.S.
Dollar, primarily the Canadian Dollar ($1.7 billion), German Mark ($1.7
billion), and the British Pound ($1.5 billion).
18
<PAGE> 19
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
At December 31, 1995 and 1994, notes and loans payable include $68.8
billion and $62.0 billion of obligations with fixed rates, and $14.5 billion and
$11.7 billion of obligations with variable interest rates (predominantly based
on the London Interbank Offering Rate or LIBOR), after considering the impact of
interest rate swap agreements.
To achieve its desired balance, within prescribed limits, between fixed and
variable rate debt, General Motors 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, 1995 were approximately $7,105 million
($3,568 million pay variable and $3,537 million pay fixed), $340 million, $50
million, and $270 million, respectively. The notional amounts of such agreements
as of December 31, 1994 were approximately $5,482 million ($4,195 million pay
variable and $1,287 million pay fixed), $440 million, $50 million, and $741
million, respectively.
General Motors maintains, or otherwise has available through asset
securitization programs, various syndicated bank credit facilities which in
aggregate provide $30.3 billion of committed bank credit availability. The terms
of the facilities range from one to five years, with a weighted average term of
approximately three years. Facility and commitment fees on the syndicated credit
facilities average 0.11% per annum over the term of the various agreements based
on current credit ratings. The facilities contain certain covenants. The
Corporation and applicable subsidiaries were in compliance with these covenants
at December 31, 1995.
Certain subsidiaries maintain other bank lines of credit, some of which are
supported by bank commitment fees and compensating balances. Compensating
balances, which are not subject to withdrawal restrictions, are maintained at a
level required to provide the same income that a fee would generate. Total
commitment and facilities fees incurred by the Corporation's subsidiaries
amounted to $43.7 million in 1995, $60.0 million in 1994, and $44.5 million in
1993. Total compensating balances maintained by the Corporation's subsidiaries
in lieu of commitment fees averaged $12.4 million in 1995 and $23.5 million in
1994.
At December 31, 1995, unused short-term credit facilities totaled
approximately $22.6 billion and unused long-term credit facilities totaled
approximately $20.1 billion.
Total interest cost incurred in 1995, 1994, and 1993 amounted to $5,352.0
million, $5,465.8 million, and $5,717.8 million, respectively, of which $49.8
million, $33.9 million, and $44.1 million, related to certain real estate,
plants, and equipment acquired in those years, was capitalized.
NOTE 10. DERIVATIVE FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
General Motors is a party to financial instruments with off-balance-sheet
risk which it uses in the normal course of business to manage its exposure to
fluctuations in interest rates and foreign exchange rates, and to meet the
financing needs of its customers.
The primary classes of derivatives used by General Motors are foreign
exchange-forward contracts and options, interest rate forward contracts and
options, and forward contracts to purchase or sell mortgages or mortgage-backed
securities. Those instruments involve, to varying degrees, elements of credit
risk in the event a counter-party should default, and market risk as the
instruments are subject to rate and price fluctuations. Credit risk is managed
through the approval and periodic monitoring of financially sound
counterparties.
Derivative transactions are entered into to hedge underlying business
exposures. Market risk in these instruments is more than offset by opposite
movements in the underlying exposure since General Motors does not hedge 100% of
all such exposures. Cash receipts or payments on these contracts normally occur
at maturity, or for interest rate swap agreements, at periodic contractually
defined intervals.
19
<PAGE> 20
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
Foreign Exchange-Forward Contracts and Options
General Motors is an international corporation with operations in over 50
countries. General Motors has foreign currency exposures at these operations
related to buying, selling, and financing in currencies other than the local
currency. General Motors' 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.
General Motors enters into agreements by which it seeks to manage certain
of its foreign exchange exposures in accordance with established policy
guidelines. These agreements primarily hedge cash flows such as debt, firm
commitments and anticipated transactions involving vehicles, components and
fixed assets and subsidiary dividends. As a general practice, General Motors 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. General Motors uses foreign exchange-forward
contracts as well as purchased and written foreign exchange options. Foreign
exchange-forward contracts are legal agreements between two parties to purchase
and sell a foreign currency, for a price specified at the contract date, with
delivery and settlement in the future. Cross-currency swaps are included in this
category and relate to interest rate swaps in which the underlying notional
principal amounts are in different currencies.
At December 31, 1995 and 1994, General Motors held foreign exchange-forward
contracts of approximately $11,602 million and $9,030 million (including
cross-currency swaps of $1,290 million and $1,161 million), respectively. At
December 31, 1995 and 1994, General Motors had entered into foreign exchange
options of approximately $3,833 million and $2,637 million, respectively.
Deferred hedging gains on outstanding contracts hedging firm commitments to
purchase inventory or fixed assets totaled $1 million and $12 million at
December 31, 1995 and 1994, respectively. Such amounts are deferred and will be
included in the cost of such assets when purchased, to be recognized in
operations as part of the basis of these assets. All other foreign
exchange-forward contracts and options are marked to market, and recognized with
other gains or losses on foreign exchange transactions in the Consolidated
Statement of Income. General Motors' firm commitments typically extend for
periods of up to three years.
Interest Rate Forward Contracts and Options
General Motors' financing and cash management activities subject it to
market risk from exposure to changes in interest rates. To manage these
exposures, General Motors has entered into various financial instrument
transactions. General Motors' objective of entering into these transactions is
to maintain the desired level of exposure to the risk of interest rate
fluctuations and minimize interest expense. To achieve this objective, General
Motors will at times use written options.
In a limited number of cases, GMAC swaps, matched to specific portfolios of
wholesale assets or debt, are executed on a portfolio basis to achieve specific
interest rate management objectives. The differential paid or received on such
swaps is recorded as an adjustment to interest expense or income over the term
of the underlying debt agreement or matched portfolio.
Interest rate forward contracts are contractual agreements between General
Motors and another party to exchange fixed and floating interest rate payments
periodically over the life of the agreements without the exchange of underlying
principal amounts. Interest rate options, including swaptions, and interest rate
caps and floors may result in the future exchange of interest payments if market
interest rates reach certain levels. At December 31, 1995 and 1994, the total
notional amount of such agreements with off-balance-sheet risk was approximately
$15,942 million and $14,080 million, respectively.
20
<PAGE> 21
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
Interest rate forward contracts used to hedge an underlying debt obligation
are not marked to market, but are used to adjust interest expense recognized
over the life of the underlying debt agreement. Gains and losses on terminated
interest rate forward contracts are deferred and recognized as a yield
adjustment on the underlying debt. Unamortized net losses on interest rate
forward contracts totaled approximately $36 million and $24 million at December
31, 1995 and 1994, respectively. Written options, including those embedded in
interest rate forward agreements, written interest rate caps, written swaptions,
and interest rate forward contracts that do not meet settlement accounting
criteria are marked to market with related gains and losses recognized in income
on a current basis.
Mortgage Contracts
GMAC has also entered into contracts to purchase and sell mortgages at
specific future dates and has entered into certain exchange traded futures and
option contracts to reduce exposure to interest rate risk. At December 31, 1995
and 1994, commitments to sell mortgage loans totaled $2,154 million and $694
million, respectively, and commitments to purchase or originate mortgage loans
totaled $2,896 million and $690 million, respectively. GMAC's exchange traded
futures and option contracts, which are used to hedge mortgage loans held for
sale, have notional values of $100 million and $4,954 million at December 31,
1995 and 1994, respectively. Gains and losses on derivatives, including exchange
traded futures and option contracts, used to hedge interest rate risk associated
with rate locked funding commitments and mortgage loans held for sale are
deferred, and considered in the reporting of the underlying mortgages on a lower
of cost or market basis.
The notional values of derivatives used to hedge price and interest rate
risk associated with mortgage related securities totaled $66 million and $667
million at December 31, 1995 and 1994, respectively. Gains and losses associated
with these instruments are recognized in the current period on a mark to market
basis. Derivatives used to hedge purchased mortgage servicing rights have
notional values of $5,022 million and $482 million at December 31, 1995 and
1994, respectively; gains and losses on such contracts are recorded as an
adjustment to amortization expense.
GMAC has also entered into interest rate swap contracts in an effort to
stabilize short-term borrowing costs and to maintain a minimum return on certain
mortgage loans held for investment. Amounts received or paid under such interest
rate swap contracts are recorded as an adjustment to interest expense. At
December 31, 1995 and 1994, the notional values of such instruments totaled $133
million and $461 million, respectively.
Credit Risk
The forward contracts, options, and lines of credit previously discussed
contain an element of risk that the counterparties may be unable to meet the
terms of the agreements. However, General Motors minimizes such risk exposure
for forward contracts and options by limiting the counterparties to major
international banks and financial institutions. Management also reduces its
credit risk for unused lines of credit by applying the same credit policies in
making commitments as it does for extending loans. Management does not expect to
record any losses as a result of counterparty default. General Motors does not
require or place collateral for these financial instruments, except for the
lines of credit.
General Motors has business activities with customers, dealers, and
associates around the world, and its receivables from and guarantees to such
parties are well diversified and, in many cases, secured by collateral.
Consequently, in management's opinion, no significant concentration of credit
risk exists for General Motors.
21
<PAGE> 22
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
NOTE 11. FAIR VALUE OF FINANCIAL INSTRUMENTS
In accordance with the requirements of SFAS No. 107, Disclosures about Fair
Value of Financial Instruments, and SFAS No. 119, Disclosures about Derivative
Financial Instruments and Fair Value of Financial Instruments, General Motors
has provided the following fair value estimates and information about valuation
methodologies. The estimated fair value amounts have been determined using
available market information or other appropriate valuation methodologies.
However, considerable judgment is required in interpreting market data to
develop estimates of fair value; therefore, the estimates are not necessarily
indicative of the amounts that could be realized or would be paid in a current
market exchange. The effect of using different market assumptions and/or
estimation methodologies may be material to the estimated fair value amounts.
Fair value information presented herein is based on information available
at December 31, 1995 and 1994. Although management is not aware of any factors
that would significantly affect the estimated fair value amounts, such amounts
have not been updated since those dates and, therefore, the current estimates of
fair value at dates subsequent to December 31, 1995 and 1994 may differ
significantly from these amounts. The estimated fair value of financial
instruments held by General Motors, for which it is practicable to estimate that
value, are set forth below:
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------------------------------
1995 1994
------------------------ ------------------------
BOOK FAIR BOOK FAIR
VALUE VALUE VALUE VALUE
---------- ---------- ---------- ----------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C>
Assets
Cash and Marketable Securities.............. $ 16,642.9 $ 16,642.9 $ 16,075.6 $ 16,075.6
Finance Receivables -- net.................. 58,714.8 59,095.9 54,048.4 53,869.8
Accounts and Notes Receivable -- net........ 9,946.2 9,946.2 8,742.5 8,742.5
Other Assets................................ 6,349.8 6,474.2 7,591.6 7,801.4
Liabilities
Accounts Payable............................ (11,898.8) (11,898.8) (11,635.0) (11,635.0)
Notes and Loans Payable
Payable within one year.................. (46,305.1) (46,381.6) (36,108.5) (36,097.4)
Payable beyond one year.................. (37,018.4) (41,016.0) (37,621.7) (38,138.9)
Other Liabilities........................... (623.0) (639.5) (632.9) (622.8)
Stocks Subject to Repurchase.................. -- -- (450.0) (445.4)
</TABLE>
22
<PAGE> 23
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
The prior table excludes the book value and fair value of financial
instrument derivatives which are as follows:
<TABLE>
<CAPTION>
FAIR VALUE OF OPEN CONTRACTS(1) AT:
DECEMBER 31,
--------------------------------------------
1995 1994
-------------------- --------------------
ASSET LIABILITY ASSET LIABILITY
POSITION POSITION POSITION POSITION
-------- -------- -------- --------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C>
Foreign Exchange-Forward Contracts(2)...................... $290 $ (174) $241 $ (63)
Foreign Exchange Options................................... 28 (29) 2 (1)
Interest Rate Forward Contracts............................ 181 (133) 48 (296)
Interest Rate Options...................................... -- (42) -- (126)
Mortgage Contracts......................................... 46 (43) 9 (7)
- ----------------------------------------------------------------------------------------------------------
</TABLE>
(1) The related asset (liability) recorded on the balance sheet for foreign
exchange-forward contracts, foreign exchange options, interest rate forward
contracts, and interest rate options totaled $64 million, ($1) million,
($21) million, and ($46) million, respectively, at December 31, 1995, and
$42 million, $1 million, ($78) million, and ($137) million, respectively, at
December 31, 1994. The related asset recorded on the balance sheet for
mortgage contracts was $5 million and $1 million at December 31, 1995 and
1994, respectively.
(2) Foreign exchange contracts include certain derivatives with both foreign
exchange and interest rate exposures which had a fair value of $75 million
at December 31, 1995 and $77 million at December 31, 1994.
The following methods and assumptions were used to estimate the fair value
of each class of financial instrument:
Cash and Marketable Securities
The fair value of cash equivalents and marketable securities is determined
principally based on quoted market prices.
Finance Receivables
The fair value is estimated by discounting the future cash flows using
applicable spreads to approximate current rates applicable to each category of
finance receivables. The carrying value of wholesale receivables and other
receivables whose interest rates adjust on a short-term basis with applicable
market indices (generally the prime rate) are assumed to approximate fair value
either due to their short maturities or due to the interest rate adjustment
feature.
Accounts and Notes Receivable and Accounts Payable
For receivables and payables with short maturities, the book values
approximate market value.
Other Assets and Other Liabilities
Other assets reported at December 31, 1995 and 1994 include various
financial instruments (e.g., long-term receivables and certain investments)
having a fair value based on discounted cash flows, market quotations, and other
appropriate valuation techniques. The fair values of retained subordinated
interests in trusts and excess servicing assets (net of deferred costs) are
derived by discounting expected cash flows using current market rates. Estimated
values of Industrial Development Bonds, included in other liabilities and
deferred credits, are based on quoted market prices for the same or similar
issues.
23
<PAGE> 24
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
Notes and Loans Payable
The fair value of the debt payable within one year is determined by using
quoted market prices, if available, or calculating the estimated value of each
bank loan, note, or debenture in the portfolio at the applicable rate in effect.
Commercial paper, master notes, and demand notes have an original term of less
than 90 days and, therefore, the carrying amount of these liabilities is
considered fair value. Debt payable beyond one year has an estimated fair value
based on quoted market prices for the same or similar issues or based on the
current rates offered to General Motors for debt of similar remaining
maturities.
Stocks Subject to Repurchase
At December 31, 1994, the fair value of the Corporation's repurchase
obligation was based on discounted cash flows assuming redemption by the Howard
Hughes Medical Institute (HHMI) at the specified exercise date. At the closing
Class H common stock price on December 31, 1994, the shares subject to
repurchase would have been valued at $523 million.
Foreign Exchange-Forward Contracts and Options
The fair value of foreign exchange-forward contracts is estimated by
obtaining quotes for futures contracts with similar terms, adjusted where
necessary for maturity differences. The fair value of foreign exchange options
is estimated using active exchange quotations for most options, and pricing
models for illiquid options.
Interest Rate Forward Contracts and Options
The fair value of interest rate forward contracts, including contracts with
optionality, is estimated using pricing models based upon current market
interest rates. Exchange traded futures are valued at quoted market prices.
Mortgage Contracts
The fair value of such contracts is estimated based upon the amount that
would be received or paid to terminate the contracts based on market prices of
similar financial instruments and current rates for mortgage loans.
Unused Lines of Credit
Because loans extended under these commitments are at market interest
rates, there is no significant fair value position related to the outstanding
commitments.
NOTE 12. POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
General Motors maintains hourly and salaried benefit plans that provide
postretirement medical, dental, vision, and life insurance to most U.S. retirees
and eligible dependents. These benefits are funded as incurred from the general
assets of General Motors. SFAS No. 106, Employers' Accounting for Postretirement
Benefits Other Than Pensions, requires that the cost of such benefits be
recognized in the financial statements during the period employees provide
service to General Motors.
The medical, dental, vision, and life insurance costs for active employees
during active service are not covered by SFAS No. 106 and are charged directly
to expense on a pay-as-you-go basis.
24
<PAGE> 25
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
Certain of the Corporation's subsidiaries outside of the U.S. have
postretirement plans, although most participants are covered by government
sponsored or administered programs, and the postretirement cost of such
programs generally is not significant to General Motors.
The components of non-pension postretirement benefit cost are set forth
below:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------
1995 1994 1993
-------- -------- --------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C>
Benefits earned during the year................................ $ 617.2 $ 955.4 $ 811.5
Interest accrued on benefits earned in prior years............. 3,120.0 3,114.2 3,177.5
Termination, curtailment, and settlement benefits.............. 26.4 (233.0) 174.4
Amortization of net actuarial (gains)/losses................... (7.4) 407.4 --
Amortization of prior service costs due to plan changes........ (115.9) (121.7) --
-------- -------- --------
Total non-pension postretirement benefit cost................ $3,640.3 $4,122.3 $4,163.4
======== ======== ========
</TABLE>
The table below displays the components of General Motors' net
postretirement benefit obligation, as recognized in the Consolidated Balance
Sheet:
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------
1995 1994
--------- ---------
(DOLLARS IN MILLIONS)
<S> <C> <C>
Accumulated postretirement benefit obligation (APBO)
Current retirees.................................................. $23,155.1 $21,562.3
Fully eligible active plan participants........................... 5,295.6 3,984.7
Other active plan participants.................................... 12,411.1 11,196.1
--------- ---------
APBO................................................................ 40,861.8 36,743.1
Unamortized prior service costs due to plan changes................. 795.4 958.3
Unamortized net amount resulting from changes in plan experience and
actuarial assumptions............................................. (62.1) 2,316.8
--------- ---------
Net obligation recognized in the Consolidated Balance Sheet....... $41,595.1 $40,018.2
========= =========
</TABLE>
The following table summarizes the principal assumptions used in
determining the actuarial value of the APBO:
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Weighted average discount rate.............................................. 7.5% 8.8%
Weighted average rate of increase in future compensation levels related to
pay-related life insurance................................................ 4.3% 4.2%
Base weighted average health-care cost trend rate (a)
1995...................................................................... 8.7%
1996...................................................................... 6.5%
Ultimate sustained weighted average health-care cost trend rate in 2002..... 5.0%(b) 5.5%
</TABLE>
(a) Current year trend rate assumed at beginning of year is adjusted to actual
in determining year-end obligations.
(b) Rate remains at 6.5% through 1999, and then decreases on a linear basis
through 2002, to the ultimate weighted average trend rate of 5.0%.
25
<PAGE> 26
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
The following decreases would result from a one percentage point increase
in the weighted average discount rates:
<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------
1995 1994
------ ------
(DOLLARS IN MILLIONS)
<S> <C> <C>
APBO................................................................. $4,500 $3,800
</TABLE>
The following increases would result from a one percentage point increase
in the weighted average health-care cost trend rates:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER
31,
-----------------------
1995 1994
------ ------
(DOLLARS IN MILLIONS)
<S> <C> <C>
APBO................................................................. $5,000 $3,950
Service and interest components of postretirement expense............ $ 470 $ 600
</TABLE>
General Motors 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, General Motors does not admit or otherwise
acknowledge that such amounts or existing postretirement benefit plans of
General Motors (other than pensions) represent legally enforceable liabilities
of General Motors.
NOTE 13. PENSIONS
General Motors has a number of defined benefit pension plans covering
substantially all employees. Plans covering U.S. and Canadian represented
employees generally provide benefits of negotiated stated amounts for each year
of service as well as significant supplemental benefits for employees who retire
with 30 years of service before normal retirement age. The benefits provided by
the plans covering U.S. and Canadian salaried employees, and employees in
certain foreign locations, are generally based on years of service and the
employee's salary history. General Motors also has certain nonqualified pension
plans covering executives which are based on targeted wage replacement
percentages and are unfunded.
In March 1995, the Corporation contributed to the General Motors
Hourly-Rate Employees Pension Plan (Hourly Plan) 173,163,187 shares of Class E
common stock, having an aggregate fair market value of approximately $6.3
billion (determined by an independent valuation expert retained by the Trustee)
at the time of contribution. The contribution was made under the terms of an
agreement between the Corporation and the Pension Benefit Guaranty Corporation
(the PBGC). Subject to the terms of the agreement, the Corporation will defer
the use of the funding credits that would otherwise result from such cash and
stock contributions. Consequently, the Corporation will continue to make regular
cash contributions to the Hourly Plan over the next several years. The agreement
with the PBGC also provides flexibility to the Corporation by granting a release
of EDS from liability, if any, under Title IV of the Employee Retirement Income
Security Act (ERISA) for the Corporation's U.S. pension plans, in the event EDS
were to leave the Corporation's control group under certain circumstances (Note
2). In addition, in connection with the contribution of the shares of Class E
common stock, the U.S. Department of Labor granted an exemption with respect to,
among other things, limits otherwise applicable under ERISA on the amount of
Class E common stock that could legally be held by the Hourly Plan.
The measurement date used for the Corporation's principal U.S. plans was
changed in 1994 from October 1 to December 31, primarily to align the
measurement date with the year-end financial statement date. The measurement
dates for the EDS and Hughes U.S. plans are October 1 and December 1,
respectively. For non-U.S. plans, the measurement dates used are October 1 for
certain foreign plans and December 1 for Canadian plans.
26
<PAGE> 27
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
Plan assets are primarily invested in U.S. Government obligations, equity
and fixed income securities, commingled pension trust funds, insurance
contracts, and the Corporation's $1 2/3 par value and Class E common stocks
(valued as of the 1995 measurement date at $1,414.4 million and $7,464.5
million, respectively). General Motors' funding policy with respect to its
qualified plans is to contribute annually not less than the minimum required by
applicable law and regulation. General Motors made pension contributions to the
U.S. plans of $10,364.6 million in 1995, $7,655.6 million in 1994, and $4,387.9
million in 1993.
Total pension expense for General Motors amounted to $2,103.0 million in
1995, $3,677.4 million in 1994, and $2,684.9 million in 1993. Programs for early
retirement were offered to certain employees during 1995, 1994, and 1993. The
pension related cost of these programs was $67.0 million, $88.9 million, and
$659.3 million, respectively, of which $67.0 million, $88.9 million, and $229.4
million was expensed during 1995, 1994, and 1993, respectively. In 1993, the
remaining cost of $429.9 million was offset against certain training fund
accruals, based upon an agreement with represented hourly employees.
Net periodic pension cost and total pension expense of U.S. plans and plans
of subsidiaries outside the United States included the following components:
<TABLE>
<CAPTION>
NON-
U.S. PLANS U.S. PLANS
---------- ----------
(DOLLARS IN MILLIONS)
<S> <C> <C>
YEAR ENDED DECEMBER 31, 1995
Benefits earned during the year....................................... $ 989.2 $ 187.0
Interest accrued on benefits earned in prior years.................... 4,916.4 684.0
Return on assets
Actual gain......................................................... (12,156.3) (675.8)
Less deferred gain.................................................. 6,624.7 213.4
Net amortization...................................................... 1,054.0 117.7
---------- ----------
Net periodic pension cost............................................. 1,428.0 526.3
Termination, curtailment, and settlement benefits..................... 50.5 25.1
Other-primarily minor pension plans................................... 9.3 63.8
---------- ----------
Total pension expense.......................................... $ 1,487.8 $ 615.2
========= ========
YEAR ENDED DECEMBER 31, 1994
Benefits earned during the year....................................... $ 1,207.0 $ 223.7
Interest accrued on benefits earned in prior years.................... 4,466.6 617.7
Return on assets
Actual gain......................................................... (1,161.3) (105.0)
Plus deferred loss.................................................. (3,312.0) (285.2)
Net amortization...................................................... 1,323.5 174.0
---------- ----------
Net periodic pension cost............................................. 2,523.8 625.2
Termination, curtailment, and settlement benefits..................... 399.6 61.4
Other-primarily minor pension plans................................... 12.9 54.5
---------- ----------
Total pension expense.......................................... $ 2,936.3 $ 741.1
========= ========
YEAR ENDED DECEMBER 31, 1993
Benefits earned during the year....................................... $ 939.9 $ 133.1
Interest accrued on benefits earned in prior years.................... 4,258.9 473.9
Return on assets
Actual gain......................................................... (7,159.0) (775.6)
Less deferred gain.................................................. 3,329.1 453.1
Net amortization...................................................... 647.7 67.7
---------- ----------
Net periodic pension cost............................................. 2,016.6 352.2
Termination, curtailment, and settlement benefits..................... 202.8 26.6
Other-primarily minor pension plans................................... 12.1 74.6
---------- ----------
Total pension expense.......................................... $ 2,231.5 $ 453.4
========= ========
</TABLE>
27
<PAGE> 28
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
The tables below reconcile the funded status of General Motors' U.S. and
non-U.S. plans for which SFAS No. 87, Employers' Accounting for Pensions, has
been adopted with amounts recognized in the Consolidated Balance Sheet.
<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------------------------------
1995 1994
---------------------- -----------------------
ASSETS ACCUM. ASSETS ACCUM.
EXCEED BENEFITS EXCEED BENEFITS
ACCUM. EXCEED ACCUM. EXCEED
BENEFITS ASSETS BENEFITS ASSETS
--------- --------- --------- ----------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C>
U.S. PLANS
Actuarial present value of benefits based on
service to date and present pay levels
Vested......................................... $24,557.6 $34,327.4 $20,631.9 $ 28,799.4
Nonvested...................................... 1,826.1 7,600.4 1,654.7 6,488.0
--------- --------- --------- ----------
Accumulated benefit obligation................... 26,383.7 41,927.8 22,286.6 35,287.4
Additional amounts related to projected pay
increases...................................... 2,734.3 238.3 1,985.5 192.4
--------- --------- --------- ----------
Total projected benefit obligation (PBO) based on
service to date................................ 29,118.0 42,166.1 24,272.1 35,479.8
Plan assets at fair value........................ 29,699.8 38,581.5 25,827.9 24,579.7
--------- --------- --------- ----------
PBO (in excess of) less than plan assets......... 581.8 (3,584.6) 1,555.8 (10,900.1)
Unamortized net amount resulting from changes in
plan experience and actuarial assumptions...... 5,891.0 7,269.1 4,180.1 5,567.4
Unamortized prior service cost................... 1,276.2 5,166.4 1,357.5 5,887.2
Unamortized net obligation (asset) at date of
adoption....................................... (844.0) 519.6 (1,035.7) 624.3
Adjustment for unfunded pension liabilities...... -- (12,716.8) -- (11,886.5)
--------- --------- --------- ----------
Net prepaid pension cost (accrued
liability) recognized in the
Consolidated Balance Sheet............. $ 6,905.0 $(3,346.3) $ 6,057.7 $(10,707.7)
========= ========= ========= ==========
NON-U.S. PLANS
Actuarial present value of benefits based on
service to date and present pay levels
Vested......................................... $ 2,278.2 $ 5,546.2 $ 1,945.8 $ 4,535.9
Nonvested...................................... 78.6 167.9 68.8 148.0
--------- --------- --------- ----------
Accumulated benefit obligation................... 2,356.8 5,714.1 2,014.6 4,683.9
Additional amounts related to projected pay
increases...................................... 361.1 574.5 316.6 425.4
--------- --------- --------- ----------
Total PBO based on service to date............... 2,717.9 6,288.6 2,331.2 5,109.3
Plan assets at fair value........................ 3,023.7 2,415.3 2,673.3 1,543.1
--------- --------- --------- ----------
PBO (in excess of) less than plan assets......... 305.8 (3,873.3) 342.1 (3,566.2)
Unamortized net amount resulting from changes in
plan experience and actuarial assumptions...... 550.6 786.8 455.4 394.7
Unamortized prior service cost................... 175.8 911.4 192.1 962.1
Unamortized net obligation (asset) at date of
adoption....................................... (167.1) 226.1 (218.6) 229.9
Adjustment for unfunded pension liabilities...... -- (1,411.0) -- (1,206.7)
--------- --------- --------- ----------
Net prepaid pension cost (accrued
liability) recognized in the
Consolidated Balance Sheet............. $ 865.1 $(3,360.0) $ 771.0 $ (3,186.2)
========= ========= ========= ==========
</TABLE>
28
<PAGE> 29
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
The assumptions for non-U.S. plans were developed on a basis consistent
with that for U.S. plans, adjusted to reflect prevailing economic conditions and
interest rate environments. Assumptions used to determine the pension expense
and the actuarial value of the PBO were as shown below:
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
-------------
1995 1994
---- ----
<S> <C> <C>
Weighted average discount rate
U.S. plans.................................................................. 7.0% 8.5%
Non-U.S. plans.............................................................. 8.0 9.0
Rate of increase in future compensation levels*
U.S. plans.................................................................. 5.1 5.2
Non-U.S. plans.............................................................. 4.5 4.8
Expected long-term rate of return on plan assets
U.S. plans.................................................................. 10.0 10.0
Non-U.S. plans.............................................................. 9.9 9.8
- ----------------------------------------------------------------------------------------------
</TABLE>
* Benefits under the hourly plans are generally not based on wages and therefore
no benefit escalation beyond existing negotiated or anticipated increases was
included.
NOTE 14. OTHER LIABILITIES AND DEFERRED CREDITS
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------
1995 1994
--------- ---------
(DOLLARS IN MILLIONS)
<S> <C> <C>
Warranties, dealer and customer allowances, claims, discounts, etc. ... $10,508.8 $11,598.1
Customer deposits...................................................... 7,325.1 2,022.2
Unpaid insurance losses, loss adjustment expenses, and unearned
insurance premiums................................................... 2,921.6 2,985.6
Plant closings (excludes environmental)................................ 2,612.3 3,103.6
Environmental cleanup.................................................. 691.9 693.7
Employee benefits (excludes postemployment)............................ 2,376.8 2,437.0
Postemployment benefits................................................ 2,219.4 2,193.8
Governmental and other contract related................................ 970.3 777.8
Payrolls............................................................... 2,034.7 1,844.4
Taxes, other than income taxes......................................... 1,498.1 1,569.8
Deferred credits....................................................... 1,496.2 1,666.3
Insurance.............................................................. 1,199.7 1,022.9
Interest............................................................... 2,277.3 3,023.2
Industrial Development Bonds........................................... 623.0 632.9
Other.................................................................. 8,131.4 7,296.0
--------- ---------
Total............................................................. $46,886.6 $42,867.3
========= =========
</TABLE>
NOTE 15. SPECIAL PROVISION FOR SCHEDULED PLANT CLOSINGS
General Motors previously established a plant closing reserve to provide
for estimates of costs related to plant closures, including employee job
security and supplemental unemployment compensation benefits. The 1993 operating
results reflect a pre-tax increase of $950 million to the plant closing reserve
($589 million after taxes, or $0.83 per share of $1 2/3 par value common stock).
The 1993 increase to the reserve resulted from changes in assumptions, primarily
regarding the amount and duration of job security and supplemental
29
<PAGE> 30
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
unemployment benefits expected to be paid to employees, given the terms of the
Corporation's 1993 collective bargaining agreements.
Hughes maintains a restructuring reserve that was established in 1992 to
provide for a reduction of Hughes' worldwide employment, a major facilities
consolidation, and a reevaluation of certain non-strategic businesses. In 1994
and 1993, the Hughes restructuring reserve was increased by $35 million and $78
million, respectively, primarily due to changes in the estimated loss on
disposition of two subsidiaries.
During 1995, 1994, and 1993, a total of $712.6 million, $727.1 million, and
$1,127.2 million, respectively, was charged against the reserves, primarily
related to employee job security costs. Included in the charges to the reserves
were $5.9 million, $4.5 million, and $12.6 million of environmental costs in
1995, 1994, and 1993, respectively. In 1994, the plant closing reserve was
decreased to reflect a $401.9 million discount for only the postemployment
benefits portion of the reserve due to the Corporation's use of discounting in
its method of adoption of SFAS No. 112. In 1995, the plant closing reserve was
increased by $215.4 million for the effects of accretion and a change in the
interest rate used to discount the postemployment benefits. The plant closing
reserve includes estimates of costs related to plant disposals and for employee
job security and supplemental unemployment benefits which are subject to change
in the near term (although not currently anticipated) due to changes in
assumptions and the period over which such costs are expected to be incurred.
NOTE 16. COMMITMENTS AND CONTINGENT LIABILITIES
Minimum future commitments under operating leases having noncancellable
lease terms in excess of one year, primarily for real property, aggregating
$6,475.5 million, are payable $1,002.4 million in 1996, $799.1 million in 1997,
$677.8 million in 1998, $638.4 million in 1999, $599.1 million in 2000, and
$2,758.7 million in 2001 and thereafter. Certain of the leases contain
escalation clauses and renewal or purchase options. Rental expenses under
operating leases were $1,751.9 million in 1995, $1,560.9 million in 1994, and
$1,472.4 million in 1993.
In 1973, Hughes Aircraft Company filed a lawsuit against the U.S.
Government in the U.S. Court of Claims for infringement of a patent utilized in
the design of satellites ("the Williams Patent"). In late 1983, the U.S. Court
of Appeals ruled that the patent was valid and that the Government had infringed
the patent. In June 1994, the U.S. Court of Claims issued a decision awarding
Hughes damages of $114 million. Both parties to the lawsuit have appealed the
judgment, with Hughes asserting that the award did not adequately compensate it
for damages suffered. In the opinion of the management of Hughes, there is a
reasonable possibility that this matter could be resolved in the near term.
While no amount has been recorded in Hughes' financial statements pending the
outcome of the case, resolution could result in a gain that would be material to
the earnings of General Motors attributable to Class H common stock.
General Motors is 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 General Motors under these government
regulations, and under these claims and actions, was not determinable at
December 31, 1995. 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.
NOTE 17. STOCKHOLDERS' EQUITY
Holders of $1 2/3 par value, Class E, and Class H common stocks are
entitled to one, one-eighth, and one-half vote per share, respectively, on all
matters submitted to the stockholders for a vote. The liquidation rights of
common stockholders are based on per-share liquidation units of the various
classes and are subject to certain adjustments if outstanding common stock is
subdivided, by stock split or otherwise, or if shares of one class of common
stock are issued as a dividend to holders of another class of common stock.
30
<PAGE> 31
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
At December 31, 1995, each share of $1 2/3 par value, Class E, and Class H
common stocks was entitled to a liquidation unit of the same as the vote per
share. Holders of Class E and Class H common stocks have no direct rights in the
equity or assets of EDS or Hughes, but rather have rights in the equity and
assets of General Motors (which includes 100% of the stock of EDS and Hughes).
The Corporation's Certificate of Incorporation provides, generally, that if
at any time the Corporation should sell, liquidate, or otherwise dispose of
substantially all of EDS, Hughes Aircraft Company, or the other businesses of
Hughes, shares of the Corporation's $1 2/3 par value common stock will
automatically be exchanged for Class E or Class H common stock, respectively.
After December 31, 1995, the Board may exchange $1 2/3 par value common
stock for Class E or Class H common stock, respectively, if the Board has
declared and paid certain minimum cash dividends during each of the last five
years preceding the exchange. Based on the dividends paid on the Class E and
Class H common stock in 1991 through 1995, the dividend condition described
above would be satisfied in 1996.
In the event any of the aforementioned exchanges were to occur, the
Corporation's Certificate of Incorporation provides that the Class E or Class H
common stockholders would receive $1 2/3 par value common stock having a market
value at the time of the exchange equal to 120% of the market value of the Class
E or Class H common stock exchanged (see Note 2).
The Corporation held an option to call 15 million shares of Class H common
stock subject to put options issued to the HHMI. In March 1995, the put and call
rights expired unexercised. As a result, $1.5 million was reclassified to Class
H common stock and $448.5 million was reclassified to capital surplus.
Holders of Series C Depositary Shares are entitled to receive cumulative
preferential dividends from the date of issue at the quarterly rate of $0.8125
per share. The Series C Depositary Shares are convertible at any time at the
option of the holder into shares of Class E common stock. On February 5, 1996,
the Corporation announced that the Board had authorized the redemption on
February 22, 1996 of all of the Corporation's outstanding Series C Preference
Shares, which are represented by Series C Depositary Shares. The redemption
price will be $51.95 per Series C Depositary Share, plus accrued and unpaid
dividends of $0.47, for a total redemption price of $52.42 per Series C
Depositary Share.
In May 1995, the Corporation concluded a tender offer, which began in April
1995, under which it purchased for $1.3 billion of cash (i) 24.3 million
depositary shares, each representing one-fourth of a share of its Series B
9 1/8% Preference Stock, at a purchase price of $27.50 per depositary share,
(ii) 9.6 million depositary shares, each representing one-fourth of a share of
its Series D 7.92% Preference Stock, at a purchase price of $26.375 per
depositary share, and (iii) 12.9 million depositary shares, each representing
one-fourth of a share of its Series G 9.12% Preference Stock, at a purchase
price of $28.25 per depositary share. The repurchase had an unfavorable impact
of $0.22 per share of $1 2/3 par value common stock. This was comprised of
tender offer expenses of $13.5 million after-tax, or $0.02 per share, that were
charged against income and the purchase price in excess of the carrying amount
of the preference shares amounting to $153.4 million, or $0.20 per share, that
was not charged against income but reduced earnings attributable to $1 2/3 par
value common stock.
In June 1994, the Corporation converted all 17,825,000 outstanding shares
of its Series A Conversion Preference Stock (Preference Equity Redemption
Cumulative Stock or PERCS) into shares of $1 2/3 par value common stock. The
Corporation 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 $1 2/3 par
value common stock for each share of Preference Stock called for conversion,
plus $0.1655 in cash as consideration for the accrued and unpaid
31
<PAGE> 32
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
dividend. Fractional shares of $1 2/3 par value common stock were paid in cash.
A total of 17.7 million shares of $1 2/3 par value common stock were issued in
this conversion.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------------
1995 1994 1993
--------- --------- ---------
(DOLLARS IN MILLIONS
EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C>
CAPITAL STOCK
PREFERRED STOCK, without par value, cumulative dividends (authorized,
6,000,000 shares)
$5.00 series, stated value $100 per share, redeemable at
Corporation option at $120 per share
Outstanding at beginning of the year............................ $ -- $ -- $ 153.0
Redeemed by the Corporation during the year..................... -- -- (153.0)
--------- --------- ---------
Outstanding at end of the year.................................. -- -- --
--------- --------- ---------
$3.75 series, stated value $100 per share, redeemable at
Corporation option at $100 per share
Outstanding at beginning of the year............................ -- -- 81.4
Redeemed by the Corporation during the year..................... -- -- (81.4)
--------- --------- ---------
Outstanding at end of the year.................................. -- -- --
--------- --------- ---------
PREFERENCE STOCK, $0.10 par value (authorized, 100,000,000 shares)
E series, convertible one-for-four at fixed dates into Class E
common stock
Issued at beginning of the year................................. -- -- 0.3
Converted into shares of Class E common stock................... -- -- (0.3)
--------- --------- ---------
Issued at end of the year....................................... -- -- --
--------- --------- ---------
Series A Conversion, mandatorily convertible one-for-one on July
1, 1994 into $1 2/3 par value common stock
Issued at beginning of the year (17,825,000 shares)............. -- 1.8 1.8
Converted into shares of $1 2/3 par value common stock
(17,825,000 shares).......................................... -- (1.8) --
--------- --------- ---------
Issued at end of the year (17,825,000 shares in 1993)........... -- -- 1.8
--------- --------- ---------
Series B 9 1/8% Depositary Shares, stated value $25 per share,
redeemable at Corporation option on or after January 1, 1999
Issued at beginning of the year (44,300,000 shares)............. 1.1 1.1 1.1
Reacquired under tender offer (24,279,414 shares)............... (0.6) -- --
--------- --------- ---------
Issued at end of the year (20,020,586 shares, equivalent to
5,005,147 shares of nonconvertible Series B 9 1/8% Preference
Stock, stated value $100 per share).......................... 0.5 1.1 1.1
--------- --------- ---------
Series C Depositary Shares, liquidation preference $50 per share,
convertible one for 1.4078 into Class E common stock, callable at
Corporation option on or after February 19, 1996
Issued at beginning of the year (31,880,600 shares)............. 0.3 0.3 0.3
Converted into shares of Class E common stock (91,497 shares)... -- -- --
--------- --------- ---------
Issued at end of the year (31,789,103 shares, equivalent to
3,178,910 shares of Series C Convertible Preference Stock)... 0.3 0.3 0.3
--------- --------- ---------
Series D 7.92% Depositary Shares, stated value $25 per share,
redeemable at Corporation option on or after August 1, 1999
Issued at beginning of the year (15,700,000 shares)............. 0.4 0.4 0.4
Reacquired under tender offer (9,630,091 shares)................ (0.3) -- --
--------- --------- ---------
Issued at end of the year (6,069,909 shares, equivalent to
1,517,477 shares of Series D 7.92% Preference Stock)......... 0.1 0.4 0.4
--------- --------- ---------
Series G 9.12% Depositary Shares, stated value $25 per share,
redeemable at Corporation option on or after January 1, 2001
Issued at beginning of the year (23,000,000 shares)............. 0.6 0.6 0.6
Reacquired under tender offer (12,920,101 shares)............... (0.3) -- --
--------- --------- ---------
Issued at end of the year (10,079,899 shares, equivalent to
2,519,975 shares of Series G 9.12% Preference Stock)......... 0.3 0.6 0.6
--------- --------- ---------
Total Preference Stocks.................................... $ 1.2 $ 2.4 $ 4.2
--------- --------- ---------
</TABLE>
32
<PAGE> 33
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------------
1995 1994 1993
--------- --------- ---------
(DOLLARS IN MILLIONS
EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C>
COMMON STOCK, $1 2/3 par value (authorized, 2,000,000,000 shares)
Issued at beginning of the year (754,345,782 shares in 1995)...... $ 1,257.2 $ 1,200.2 $ 1,178.1
Reacquired on the open market (9,510,687 shares in 1995).......... (15.8) -- --
Issued during the year (8,163,237 shares in 1995)................. 13.6 27.6 22.1
Series A conversion (9,941 shares in 1995)........................ -- 29.4 --
--------- --------- ---------
Issued at end of the year (753,008,273 shares in 1995, 754,345,782
in 1994, and 720,105,471 in 1993)............................... 1,255.0 1,257.2 1,200.2
--------- --------- ---------
CLASS E COMMON STOCK, $0.10 par value (authorized, 1,000,000,000
shares)
Issued at beginning of the year (268,125,255 shares in 1995)...... 26.8 26.3 24.2
Reacquired on the open market (25,950 shares in 1995)............. -- -- --
Issued during the year (1,420,872 shares in 1995)................. 0.2 0.5 2.1
Issued in conjunction with U.S. Hourly-Rate Employees Pension Plan
contribution (173,163,187 shares in 1995)....................... 17.3 -- --
Series C conversion (128,802 shares in 1995)...................... -- -- --
--------- --------- ---------
Issued at end of the year (442,812,166 shares in 1995, 268,125,255
in 1994, and 263,089,320 in 1993)............................... 44.3 26.8 26.3
--------- --------- ---------
CLASS H COMMON STOCK, $0.10 par value (authorized, 600,000,000
shares)
Issued at beginning of the year (78,720,022 shares in 1995)....... 7.9 7.6 7.0
Issued during the year (3,431,992 shares in 1995)................. 0.3 0.3 0.6
Reclassification of shares formerly subject to repurchase from
HHMI (15,000,000 shares in 1995)................................ 1.5 -- --
--------- --------- ---------
Issued at end of the year (97,152,014 shares in 1995, 78,720,022
in 1994, and 75,705,433 in 1993)................................ 9.7 7.9 7.6
--------- --------- ---------
Total capital stock at end of the year..................... $ 1,310.2 $ 1,294.3 $ 1,238.3
========= ========= =========
CAPITAL SURPLUS (principally additional paid-in capital)
Balance at beginning of the year.................................. $13,149.4 $12,003.4 $10,971.2
Preference stock
Amounts in excess of par value of
Depositary shares reacquired under tender offer.............. (1,132.2) -- --
Series E shares converted.................................... -- -- (171.2)
Series A shares converted.................................... -- (720.5) --
Series C shares converted.................................... (4.5) -- --
$1 2/3 par value common stock
Amounts in excess of par value of
Shares issued................................................ 342.9 870.2 612.6
Shares reacquired on the open market......................... (378.1) -- --
Series A shares converted.................................... -- 692.8 --
Class E common stock
Amounts in excess of par value of
Series C shares converted.................................... 4.5 -- --
Series E shares converted.................................... -- -- 170.2
Shares issued during the year................................ 85.1 188.7 257.2
Shares reacquired on the open market......................... (1.3) -- --
Shares contributed to the U.S. Hourly-Rate Employees Pension
Plan....................................................... 6,241.5 -- --
Class H common stock
Amounts in excess of par value of
Shares issued................................................ 115.1 114.8 164.0
Reclassification of shares formerly subject to repurchase
from HHMI.................................................. 448.5 -- --
Shares reacquired on the open market......................... -- -- (0.6)
--------- --------- ---------
Balance at end of the year................................... $18,870.9 $13,149.4 $12,003.4
========= ========= =========
</TABLE>
33
<PAGE> 34
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------------
1995 1994 1993
--------- --------- ---------
(DOLLARS IN MILLIONS
EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C>
NET INCOME RETAINED FOR USE IN THE BUSINESS
(ACCUMULATED DEFICIT)
Balance at beginning of the year.................................... $ 1,785.8 $(2,002.9) $(3,354.2)
--------- --------- ---------
Income before cumulative effect of accounting changes............... 6,932.5 5,658.7 2,465.8
Cumulative effect of accounting changes............................. (51.8) (758.1) --
--------- --------- ---------
Net income.......................................................... 6,880.7 4,900.6 2,465.8
--------- --------- ---------
Total........................................................ 8,666.5 2,897.7 (888.4)
--------- --------- ---------
Cash dividends
Preferred stock, $5.00 series, $1.68 per share in 1993............ -- -- 2.6
Preferred stock, $3.75 series, $1.26 per share in 1993............ -- -- 1.0
Preference stock, E-I series, $1.42 per share in 1993............. -- -- 4.6
Preference stock, Series A Conversion, $1.66 per share in 1994 and
$3.31 in 1993................................................... -- 32.5 59.0
Depositary Shares, Series B, $2.28 per share in 1995, 1994, and
1993............................................................ 59.5 101.1 101.1
Depositary Shares, Series C, $3.25 per share in 1995, 1994, and
1993............................................................ 103.5 103.6 103.6
Depositary Shares, Series D, $1.98 per share in 1995, 1994, and
1993............................................................ 16.8 31.1 31.1
Depositary Shares, Series G, $2.28 per share in 1995 and 1994 and
$2.34 in 1993................................................... 30.4 52.4 53.8
$1 2/3 par value common stock, $1.10 per share in 1995 and $0.80
in 1994 and 1993................................................ 824.2 592.6 565.8
Class E common stock, $0.52 per share in 1995, $0.48 in 1994, and
$0.40 in 1993................................................... 205.4 124.8 97.2
Class H common stock, $0.92 per share in 1995, $0.80 in 1994, and
$0.72 in 1993................................................... 87.9 73.8 64.1
--------- --------- ---------
Total cash dividends......................................... 1,327.7 1,111.9 1,083.9
--------- --------- ---------
Less redemption price of preference and preferred stock in excess of
stated value...................................................... 153.4 -- 30.6
--------- --------- ---------
Balance at end of the year................................. 7,185.4 1,785.8 (2,002.9)
========= ========= =========
MINIMUM PENSION LIABILITY ADJUSTMENT (Note 13)
Balance at beginning of the year.................................... (3,548.4) (5,311.2) (2,925.3)
Change during the year.............................................. (1,187.9) 1,762.8 (2,385.9)
--------- --------- ---------
Balance at end of the year................................. (4,736.3) (3,548.4) (5,311.2)
========= ========= =========
ACCUMULATED FOREIGN CURRENCY TRANSLATION ADJUSTMENTS
Balance at beginning of the year.................................... (100.4) (494.4) (155.9)
Changes during the year -- net of tax (benefit) of $215.9, $263.8,
and $(210.0), respectively........................................ 322.9 394.0 (338.5)
--------- --------- ---------
Balance at end of the year................................. 222.5 (100.4) (494.4)
========= ========= =========
NET UNREALIZED GAINS (LOSSES) ON INVESTMENTS IN CERTAIN DEBT AND
EQUITY SECURITIES
Balance at beginning of the year.................................... 243.1 164.3 241.6
Cumulative effect of adopting SFAS No. 115.......................... -- 241.0 --
Changes during the year............................................. 249.7 (162.2) (77.3)
--------- --------- ---------
Balance at end of the year................................. 492.8 243.1 164.3
========= ========= =========
TOTAL STOCKHOLDERS' EQUITY............................................ $23,345.5 $12,823.8 $ 5,597.5
========= ========= =========
Memo: Retained earnings (accumulated deficit) attributable to:
$1 2/3 par value common stock..................................... $ 3,854.0 $ (778.8) $(4,080.1)
Class E common stock.............................................. 2,254.1 1,663.9 1,344.3
Class H common stock.............................................. 1,077.3 900.7 732.9
--------- --------- ---------
Total........................................................ $ 7,185.4 $ 1,785.8 $(2,002.9)
========= ========= =========
</TABLE>
34
<PAGE> 35
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
NOTE 18. 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 General Motors, excluding the Available Separate Consolidated Net
Income of EDS and Hughes. Dividends on the Class E and Class H common stocks are
declared out of the Available Separate Consolidated Net Income of EDS and
Hughes, respectively, earned since the acquisition by the Corporation.
The Available Separate Consolidated Net Income of EDS and Hughes is
determined quarterly and is equal to the separate consolidated net income of EDS
and Hughes, respectively, excluding the effects of purchase accounting
adjustments arising at the time of the respective acquisition, multiplied by a
fraction, the numerator of which is a number equal to the weighted average
number of shares of Class E (438.9 million during the fourth quarter of 1995) or
Class H (96.5 million during the fourth quarter of 1995) common stock
outstanding during the period and the denominator of which is 483.7 million for
Class E stock and 399.9 million for Class H stock during the fourth quarter of
1995. Comparable numerators for the fourth quarters of 1994 and 1993 were 261.9
million and 253.5 million for Class E stock and 93.3 million and 88.7 million
for Class H stock. Comparable denominators for the fourth quarters of 1994 and
1993 were 481.7 million and 480.6 million, respectively, for Class E stock and
399.9 million for Class H stock in the fourth quarters of both years.
The denominators used in determining the Available Separate Consolidated
Net Income of EDS and Hughes are adjusted as deemed appropriate by the Board 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 Hughes. The
Board's discretion to make such adjustments is limited by criteria set forth in
the Corporation's Certificate of Incorporation. In this regard, the Board has
generally caused the denominators to decrease as shares are purchased by EDS or
Hughes, and to increase as such shares are used, at EDS or Hughes expense, for
EDS or Hughes employee benefit plans or acquisitions.
Dividends may be paid on common stocks only when, as, and if declared by
the Board 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 Hughes, respectively, for the prior year. Notwithstanding the
current dividend policy, the Board declared a dividend on the Class H common
stock for each of the quarters of 1995, 1994, and 1993, which was based on an
annual rate higher than 35% of the Available Separate Consolidated Net Income of
Hughes for the preceding year.
NOTE 19. PROFIT SHARING PLANS
The profit sharing formula for most U.S. employees provides a range of
percentage payouts when the Corporation's manufacturing, wholesale marketing,
defense, electronics, and computer service operations U.S. income before income
taxes with the financing and insurance operations reflected on an equity basis
exceeds various minimum annual returns on U.S. sales and revenues. Both the
percentage payout and the minimum returns are as agreed to by General Motors and
eligible U.S. employees. General Motors' pre-tax income from U.S. operations in
1995 and 1994 resulted in a profit sharing payout of approximately $250 million
and $185
35
<PAGE> 36
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
million, respectively. General Motors' pre-tax loss from U.S. operations in 1993
precluded a payment under the profit sharing formula.
NOTE 20. STOCK INCENTIVE PLANS
General Motors' stock incentive plans consist of the General Motors Amended
1987 Stock Incentive Plan (the "GMSIP"), the 1984 Electronic Data Systems
Corporation Stock Incentive Plan (the "EDS Plan"), and the Hughes Electronics
Corporation Incentive Plan (the "Hughes Plan"). The GMSIP is administered by the
Executive Compensation Committee of the Board.
Under the GMSIP, 39.8 million shares of $1 2/3 par value, 12.2 million
shares of Class E, and 5.9 million shares of Class H common stock may be granted
from June 1, 1992 through May 31, 1997, of which 17.0 million, 10.7 million, and
3.6 million shares, respectively, were available for grants at December 31,
1995. Option prices are 100% of fair market value on the dates of grant, and the
options generally expire 10 years from the dates of grant, subject to earlier
termination under certain conditions.
Under the EDS Plan, EDS may grant shares and rights or options to acquire
up to 160 million shares of Class E common stock through October 17, 2004, of
which 93.3 million shares were available for grants at December 31, 1995. No
options were outstanding as of December 31, 1995, 1994, or 1993. Under the EDS
Plan, approximately 55.3 million shares of Class E common stock have also been
granted to key employees at stock prices up to $0.025 per share. Such shares
generally vest over a 10-year period from the date of grant. Approximately 19.8
million shares were not yet vested at December 31, 1995.
Under the Hughes Plan, Hughes may grant shares, rights, or options to
acquire up to 20 million shares of Class H common stock through May 31, 1997, of
which 3.9 million shares were available for grant at December 31, 1995. Option
prices are 100% of fair market value on the dates of grant, and the options
generally expire 10 years from the dates of grant, subject to earlier
termination under certain conditions.
Changes in the status of outstanding options under the GMSIP and the Hughes
Plan were as follows:
<TABLE>
<CAPTION>
GMSIP OPTION SHARES UNDER
$1 2/3 PAR VALUE COMMON PRICES OPTION
- ------------------------------------------------------------------ ------------- ------------
<S> <C> <C>
Outstanding at January 1, 1993.................................... $33.97-$48.07 22,068,746
Granted........................................................... 33.88- 44.00 5,526,855
Exercised......................................................... 33.97- 48.07 (4,303,326)
Terminated........................................................ 33.88- 48.07 (531,218)
----------
Outstanding at December 31, 1993................................ 33.88- 48.07 22,761,057
Granted........................................................... 37.32- 59.07 6,159,395
Exercised......................................................... 33.88- 48.07 (3,305,513)
Terminated........................................................ 33.88- 59.07 (340,161)
----------
Outstanding at December 31, 1994................................ 33.88- 59.07 25,274,778
Granted........................................................... 39.25- 47.50 6,600,115
Exercised......................................................... 33.88- 48.07 (2,248,627)
Terminated........................................................ 33.88- 59.07 (346,140)
----------
Outstanding at December 31, 1995................................ $33.88-$59.07 29,280,126
==========
Memo:
Options exercisable at December 31, 1995.......................... 19,963,479
==========
</TABLE>
36
<PAGE> 37
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
<TABLE>
<CAPTION>
HUGHES PLAN OPTION SHARES UNDER
CLASS H COMMON PRICES OPTION
- ------------------------------------------------------------------ ------------- ------------
<S> <C> <C>
Outstanding at January 1, 1993.................................... $17.07-$30.25 6,516,755
Granted........................................................... 28.00- 28.56 2,027,260
Exercised......................................................... 17.07- 30.25 (1,960,162)
Terminated........................................................ 17.07- 30.25 (217,845)
----------
Outstanding at December 31, 1993................................ 17.07- 30.25 6,366,008
Granted........................................................... 36.75 1,612,640
Exercised......................................................... 17.07- 30.25 (712,107)
Terminated........................................................ 17.07- 36.75 (202,220)
----------
Outstanding at December 31, 1994................................ 17.07- 36.75 7,064,321
Granted........................................................... 39.94 1,537,350
Exercised......................................................... 17.07- 36.75 (1,929,393)
Terminated........................................................ 28.00- 36.75 (14,425)
----------
Outstanding at December 31, 1995................................ $17.07-$39.94 6,657,853
==========
Memo:
Options exercisable at December 31, 1995.......................... 4,422,618
==========
</TABLE>
NOTE 21. SEGMENT REPORTING
INDUSTRY SEGMENTS
While the major portion of General Motors' operations is derived from the
automotive products industry segment, General Motors also has financing and
insurance and information technology industry segments, and produces products
and provides services in other industry segments. The automotive products
segment consists of the design, manufacture, assembly, and sale of automobiles,
trucks, and related parts and accessories. The financing and insurance
operations assist in the merchandising of General Motors' products as well as
other products. GMAC offers financial services and certain types of insurance to
dealers and customers. In addition, GMAC is engaged in mortgage banking and
investment services. The information technology operations relate to the design,
installation, and operation of business information systems. The other products
segment consists of military vehicles, radar and weapon control systems, guided
missile systems, and defense and commercial satellites; the design,
installation, and operation of telecommunication systems; as well as the design,
development, and manufacture of locomotives. Because of the high degree of
integration, substantial interdivisional and intersegment transfers of materials
and services are made. Intersegment sales and revenues are made at negotiated
selling prices.
Substantially all of the products in the automotive segment are marketed
through retail dealers and through distributors and jobbers in the United
States, Canada, and Mexico, and through distributors and dealers overseas.
37
<PAGE> 38
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
Information concerning operations by industry segment as of and for each of
the three years ended December 31, follows:
<TABLE>
<CAPTION>
FINANCING &
AUTOMOTIVE INSURANCE INFORMATION OTHER
PRODUCTS OPERATIONS TECHNOLOGY PRODUCTS TOTAL
---------- ----------- ---------- --------- ----------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C>
1995
NET SALES AND REVENUES
Outside........................... $132,159.0 $11,664.0 $ 8,531.0 $11,507.1 $163,861.1
Intersegment...................... 102.8 -- 3,891.1 -- --
---------- --------- --------- --------- ----------
Total(1)....................... $132,261.8 $11,664.0 $ 12,422.1 $11,507.1 $163,861.1
OPERATING PROFIT.................... $ 6,101.4 N/A(2) $ 1,529.0 $ 538.0 $ 8,168.4
---------- --------- --------- --------- ----------
IDENTIFIABLE ASSETS AT YEAR-END..... $ 91,162.0 $94,469.4 $ 10,908.9 $17,371.8 $213,912.1
---------- --------- --------- --------- ----------
DEPRECIATION AND AMORTIZATION....... $ 5,990.0 $ 4,426.9 $ 1,107.8 $ 497.0 $ 12,021.7
---------- --------- --------- --------- ----------
CAPITAL EXPENDITURES................ $ 8,215.8 $ 133.0 $ 1,261.5 $ 467.0 $ 10,077.3
========== ========= ========= ========= ==========
1994
NET SALES AND REVENUES
Outside........................... $123,253.4 $ 9,418.8 $ 6,412.9 $11,506.4 $150,591.5
Intersegment...................... 416.9 -- 3,547.2 -- --
---------- --------- --------- --------- ----------
Total(1)....................... $123,670.3 $ 9,418.8 $ 9,960.1 $11,506.4 $150,591.5
---------- --------- --------- --------- ----------
OPERATING PROFIT.................... $ 6,116.0 N/A(2) $ 1,214.5 $ 890.8 $ 8,221.3
---------- --------- --------- --------- ----------
IDENTIFIABLE ASSETS AT YEAR-END..... $ 88,064.5 $84,554.6 $ 8,901.7 $13,879.1 $195,399.9
---------- --------- --------- --------- ----------
DEPRECIATION AND AMORTIZATION....... $ 5,655.2 $ 3,301.5 $ 800.2 $ 494.4 $ 10,251.3
---------- --------- --------- --------- ----------
CAPITAL EXPENDITURES................ $ 5,545.4 $ 132.8 $ 1,186.0 $ 360.9 $ 7,225.1
========== ========= ========= ========= ==========
1993
NET SALES AND REVENUES
Outside........................... $107,908.5 $ 8,752.0 $ 5,183.6 $11,777.8 $133,621.9
Intersegment...................... 118.7 -- 3,323.7 0.2 --
---------- --------- --------- --------- ----------
Total(1)....................... $108,027.2 $ 8,752.0 $ 8,507.3 $11,778.0 $133,621.9
---------- --------- --------- --------- ----------
OPERATING PROFIT.................... $ 1,625.7 N/A(2) $ 1,076.4 $ (171.7) $ 2,530.4
---------- --------- --------- --------- ----------
IDENTIFIABLE ASSETS AT YEAR-END..... $ 81,009.0 $79,352.3 $ 7,086.4 $16,454.7 $183,902.4
---------- --------- --------- --------- ----------
DEPRECIATION AND AMORTIZATION....... $ 5,281.9 $ 2,892.6 $ 661.7 $ 605.8 $ 9,442.0
---------- --------- --------- --------- ----------
CAPITAL EXPENDITURES................ $ 5,164.8 $ 118.5 $ 816.4 $ 371.0 $ 6,470.7
========== ========= ========= ========= ==========
</TABLE>
- ----------------------------------------------------------------------------
(1) After elimination of intersegment transactions.
(2) Financing and Insurance Operations do not report Operating Profit.
38
<PAGE> 39
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
A reconciliation of outside net sales and revenues to Total Net Sales and
Revenues, and of operating profit to Income before Income Taxes detailed in the
Consolidated Statement of Income and a reconciliation of identifiable assets to
Total Assets displayed in the Consolidated Balance Sheet follow:
<TABLE>
<CAPTION>
AS OF AND FOR THE YEARS ENDED DECEMBER 31,
------------------------------------------
1995 1994 1993
---------- ---------- ----------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C>
Outside Net Sales and Revenues reported on the
previous page...................................... $163,861.1 $150,591.5 $133,621.9
Other Income......................................... 4,967.5 4,359.7 4,597.6
---------- ---------- ----------
TOTAL NET SALES AND REVENUES.................... $168,828.6 $154,951.2 $138,219.5
========== ========== ==========
Total Operating Profit reported on the previous
page............................................... $ 8,168.4 $ 8,221.3 $ 2,530.4
Financing and Insurance Operations................... 1,783.2 1,439.8 1,572.8
Other Corporate Income and Expenses Less Intersegment
Transactions....................................... (175.3) (1,307.8) (1,527.9)
---------- ---------- ----------
INCOME BEFORE INCOME TAXES...................... $ 9,776.3 $ 8,353.3 $ 2,575.3
========== ========== ==========
Identifiable Assets reported on the previous page.... $213,912.1 $195,399.9 $183,902.4
---------- ---------- ----------
Corporate Assets..................................... 5,687.9 5,648.2 7,207.9
---------- ----------
Eliminations......................................... (2,476.6) (2,449.4) (2,909.4)
---------- ---------- ----------
TOTAL ASSETS.................................... $217,123.4 $198,598.7 $188,200.9
========== ========== ==========
</TABLE>
GEOGRAPHIC SEGMENTS
Net sales and revenues, income before cumulative effect of accounting
change, net income, total and net assets, and average number of employees in the
U.S., Other North America (Canada and Mexico), and in locations outside North
America are summarized below and on the next page. Income before cumulative
effect of accounting change and net income are after provisions for deferred
income taxes applicable to that portion of the undistributed earnings deemed to
be not permanently invested, less available tax credits and deductions, and
appropriate consolidating adjustments. Interarea sales and revenues are made at
negotiated selling prices. Average number of employees for 1995 includes NCRS
employees through May.
<TABLE>
<CAPTION>
AS OF AND FOR THE YEARS ENDED DECEMBER 31,
---------------------------------------------------------------------
OTHER
UNITED NORTH LATIN ALL
STATES AMERICA EUROPE AMERICA OTHER TOTAL*
---------- --------- --------- -------- -------- ----------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
1995
NET SALES AND REVENUES
Outside (excluding GMAC)....... $107,999.8 $ 7,214.6 $29,205.9 $6,014.6 $1,762.2 $152,197.1
GMAC and related operations.... 8,124.8 985.8 2,191.5 118.9 243.0 11,664.0
Other income................... 3,688.8 120.5 638.8 330.6 188.8 4,967.5
---------- --------- --------- -------- -------- ----------
Subtotal outside............ 119,813.4 8,320.9 32,036.2 6,464.1 2,194.0 168,828.6
Interarea...................... 12,781.0 17,997.6 1,054.7 621.2 59.0 --
---------- --------- --------- -------- -------- ----------
Total....................... $132,594.4 $26,318.5 $33,090.9 $7,085.3 $2,253.0 $168,828.6
========== ========= ========= ======== ======== ==========
</TABLE>
- -----------------------------------------------
* After elimination of interarea transactions.
39
<PAGE> 40
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
<TABLE>
<CAPTION>
AS OF AND FOR THE YEARS ENDED DECEMBER 31,
---------------------------------------------------------------------
OTHER
UNITED NORTH LATIN ALL
STATES AMERICA EUROPE AMERICA OTHER TOTAL*
---------- --------- --------- -------- -------- ----------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
1995 (CONCLUDED)
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE........... $ 3,134.7 $ 1,148.2 $ 1,579.0 $ 713.5 $ 297.5 $ 6,932.5
---------- --------- --------- -------- -------- ----------
NET INCOME....................... $ 3,082.9 $ 1,148.2 $ 1,579.0 $ 713.5 $ 297.5 $ 6,880.7
---------- --------- --------- -------- -------- ----------
TOTAL ASSETS..................... $163,065.0 $14,151.9 $34,792.1 $4,883.2 $4,479.9 $217,123.4
---------- --------- --------- -------- -------- ----------
NET ASSETS....................... $ 6,450.1 $ 4,638.4 $ 8,540.1 $3,028.5 $1,550.1 $ 23,345.5
---------- --------- --------- -------- -------- ----------
AVERAGE NUMBER OF EMPLOYEES (in
thousands)..................... 437 108 129 29 6 709
========== ========= ========= ======== ======== ==========
1994
NET SALES AND REVENUES
Outside (excluding GMAC)....... $101,185.6 $ 8,376.7 $24,849.5 $5,304.6 $1,456.4 $141,172.8
GMAC and related operations.... 6,531.2 781.0 1,894.2 57.2 155.2 9,418.8
Other income................... 3,193.5 177.7 483.5 354.8 150.1 4,359.6
---------- --------- --------- -------- -------- ----------
Subtotal outside............ 110,910.3 9,335.4 27,227.2 5,716.6 1,761.7 154,951.2
Interarea...................... 11,476.9 13,607.4 753.7 90.2 59.2 --
---------- --------- --------- -------- -------- ----------
Total....................... $122,387.2 $22,942.8 $27,980.9 $5,806.8 $1,820.9 $154,951.2
========== ========= ========= ======== ======== ==========
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE........... $ 2,075.5 $ 1,177.3 $ 1,337.1 $ 828.5 $ 256.9 $ 5,658.7
---------- --------- --------- -------- -------- ----------
NET INCOME....................... $ 1,361.9 $ 1,132.8 $ 1,337.1 $ 828.5 $ 256.9 $ 4,900.6
---------- --------- --------- -------- -------- ----------
TOTAL ASSETS..................... $154,175.7 $13,765.9 $29,523.6 $4,023.6 $3,463.4 $198,598.7
---------- --------- --------- -------- -------- ----------
NET ASSETS....................... $ (1,178.2) $ 4,724.0 $ 6,719.3 $2,178.2 $1,065.3 $ 12,823.8
---------- --------- --------- -------- -------- ----------
AVERAGE NUMBER OF EMPLOYEES (in
thousands)..................... 437 101 126 27 6 697
========== ========= ========= ======== ======== ==========
1993
NET SALES AND REVENUES
Outside (excluding GMAC)....... $ 89,868.0 $ 7,311.5 $21,847.3 $4,595.0 $1,248.1 $124,869.9
GMAC and related operations.... 5,921.7 682.0 1,947.6 52.5 148.2 8,752.0
Other income................... 3,783.5 210.0 345.2 191.3 67.6 4,597.6
---------- --------- --------- -------- -------- ----------
Subtotal outside............ 99,573.2 8,203.5 24,140.1 4,838.8 1,463.9 138,219.5
Interarea...................... 10,094.7 13,416.4 433.9 166.9 30.8 --
---------- --------- --------- -------- -------- ----------
Total....................... $109,667.9 $21,619.9 $24,574.0 $5,005.7 $1,494.7 $138,219.5
========== ========= ========= ======== ======== ==========
NET INCOME....................... $ 190.1 680.8 $ 604.7 $ 798.0 $ 160.4 $ 2,465.8
---------- --------- --------- -------- -------- ----------
TOTAL ASSETS..................... $151,343.5 $10,963.7 $23,395.0 $3,113.4 $2,672.8 $188,200.9
---------- --------- --------- -------- -------- ----------
NET ASSETS....................... $ (7,315.6) $ 4,516.3 $ 5,967.3 $2,054.9 $1,001.2 $ 5,597.5
---------- --------- --------- -------- -------- ----------
AVERAGE NUMBER OF EMPLOYEES (in
thousands)..................... 448 99 131 27 6 711
========== ========= ========= ======== ======== ==========
</TABLE>
- -----------------------------------------------
* After elimination of interarea transactions.
40
<PAGE> 41
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
NOTE 22. GENERAL MOTORS ACCEPTANCE CORPORATION AND SUBSIDIARIES
CONDENSED GMAC CONSOLIDATED STATEMENT OF INCOME
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------
1995 1994 1993
-------- -------- --------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C>
Financing Revenue
Retail and lease financing.................................. $3,291.6 $2,955.0 $3,673.4
Operating leases............................................ 6,285.0 4,855.7 3,870.9
Wholesale and term loans.................................... 2,087.4 1,608.1 1,207.7
--------- -------- --------
Total financing revenue.................................. 11,664.0 9,418.8 8,752.0
Interest and discount......................................... 4,936.3 4,230.9 4,721.2
Depreciation on operating leases.............................. 4,304.8 3,233.8 2,702.0
--------- -------- --------
Net financing revenue.................................... 2,422.9 1,954.1 1,328.8
Insurance premiums earned..................................... 1,082.4 1,127.6 1,107.2
Other income.................................................. 2,116.8 1,598.6 2,624.3
--------- -------- --------
Net Financing Revenue and Other.......................... 5,622.1 4,680.3 5,060.3
Expenses...................................................... 3,838.9 3,240.5 3,487.5
--------- -------- --------
Income before income taxes............................... 1,783.2 1,439.8 1,572.8
Income taxes.................................................. 752.2 512.7 591.7
--------- -------- --------
Income before cumulative effect of accounting change..... 1,031.0 927.1 981.1
Cumulative effect of accounting change........................ -- (7.4)* --
--------- -------- --------
Net Income............................................. $1,031.0 $ 919.7 $ 981.1
========= ======== ========
Cash dividends paid to General Motors......................... $ 950.0 $ 875.0 $1,250.0
========= ======== ========
</TABLE>
- ----------------------------------------------------------------
* GMAC adopted SFAS No. 112 effective January 1, 1994.
CONDENSED GMAC CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------
1995 1994
--------- ---------
(DOLLARS IN MILLIONS)
<S> <C> <C>
Cash and cash equivalents............................................. $ 1,448.6 $ 1,339.5
Investments in securities............................................. 4,328.2 3,891.7
Finance receivables -- net............................................ 59,330.4 54,625.1
Net investment in operating leases.................................... 22,134.9 17,809.2
Notes receivable from General Motors.................................. -- 1,080.5
Other assets.......................................................... 7,330.9 6,791.4
--------- ---------
Total Assets..................................................... $94,573.0 $85,537.4
========= =========
Short-term debt....................................................... $43,871.8 $35,114.8
Accounts payable and other liabilities (including General Motors --
$1,787.6 and $1,867.3).............................................. 11,381.3 10,989.3
Long-term debt........................................................ 31,050.6 31,539.6
Stockholder's equity.................................................. 8,269.3 7,893.7
--------- ---------
Total Liabilities and Stockholder's Equity....................... $94,573.0 $85,537.4
========= =========
</TABLE>
41
<PAGE> 42
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
CONDENSED GMAC CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------------------
1995 1994 1993
----------- ----------- -----------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C>
Net Cash Provided by Operating Activities.............. $ 4,998.7 $ 4,735.8 $ 4,901.8
----------- ----------- -----------
Cash Flows from Investing Activities
Finance receivables -- acquisitions.................... (163,033.3) (156,579.8) (103,396.3)
Finance receivables -- liquidations.................... 132,242.6 137,598.4 92,808.6
Notes receivable from General Motors................... 1,080.5 275.0 10,207.7
Operating leases -- acquisitions....................... (14,034.6) (13,086.8) (6,971.3)
Operating leases -- liquidations....................... 5,642.5 3,569.5 2,572.7
Investments in securities -- acquisitions.............. (12,723.0) (11,715.3) (10,976.1)
Investments in securities -- liquidations.............. 12,397.3 11,495.2 10,676.7
Proceeds from sales of receivables -- wholesale........ 20,718.2 13,098.9 --
Proceeds from sales of receivables -- retail........... 5,264.3 5,701.1 13,072.2
Due and deferred from receivable sales................. 231.9 322.9 (618.4)
Other.................................................. 579.4 (612.5) 449.1
----------- ----------- -----------
Net Cash Provided by (Used in) Investing
Activities...................................... (11,634.2) (9,933.4) 7,824.9
----------- ----------- -----------
Cash Flows from Financing Activities
Debt with original maturities 90 days and over
-- proceeds........ 47,807.0 46,348.0 38,577.4
-- liquidations.... (44,138.7) (46,541.3) (45,148.0)
Debt with original maturities less than 90 days -- net
change............................................... 4,026.5 3,540.8 (4,744.0)
Cash dividends paid to General Motors.................. (950.0) (875.0) (1,250.0)
Proceeds from issuance of stock to General Motors...... -- 35.0 --
----------- ----------- -----------
Net Cash Provided by (Used in) Financing
Activities...................................... 6,744.8 2,507.5 (12,564.6)
----------- ----------- -----------
Effect of exchange rate changes on cash and cash
equivalents.......................................... (0.2) 1.5 (5.1)
----------- ----------- -----------
Net increase (decrease) in cash and cash equivalents... 109.1 (2,688.6) 157.0
Cash and cash equivalents at beginning of the year..... 1,339.5 4,028.1 3,871.1
----------- ----------- -----------
Cash and cash equivalents at end of the year...... $ 1,448.6 $ 1,339.5 $ 4,028.1
=========== =========== ===========
SUPPLEMENTARY CASH FLOW INFORMATION
Interest paid........................................ $ 4,783.3 $ 4,223.7 $ 4,819.1
Income taxes paid (refundable)....................... $ 210.9 $ (16.0) $ 430.5
</TABLE>
INVESTMENTS IN SECURITIES
GMAC's bonds, equity securities, notes, certificates of deposit, other
investments, and preferred stocks with mandatory redemption terms are carried at
fair value.
<TABLE>
<CAPTION>
DECEMBER 31, 1995
------------------------------------------------
FAIR UNREALIZED UNREALIZED
COST VALUE GAINS LOSSES
-------- -------- ---------- ----------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C>
Type of Security --
Bonds, notes, and other securities
United States Government and governmental agencies
and authorities................................. $ 268.0 $ 279.4 $ 11.5 $ (0.1)
States, municipalities, and political
subdivisions.................................... 1,720.8 1,825.0 112.7 (8.5)
Other.............................................. 1,621.3 1,674.1 54.5 (1.7)
-------- -------- ------ ------
Total debt securities................................ 3,610.1 3,778.5 178.7 (10.3)
Equity securities.................................... 280.0 549.7 284.6 (14.9)
-------- -------- ------ ------
Total investments in securities................. $3,890.1 $4,328.2 $463.3 $(25.2)
======== ======== ====== ======
</TABLE>
42
<PAGE> 43
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONCLUDED
<TABLE>
<CAPTION>
DECEMBER 31, 1994
------------------------------------------------
FAIR UNREALIZED UNREALIZED
COST VALUE GAINS LOSSES
-------- -------- ---------- ----------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C>
Type of Security --
Bonds, notes, and other securities
United States Government and governmental agencies
and authorities................................. $ 298.5 $ 285.0 $ 0.3 $ (13.8)
States, municipalities, and political
subdivisions.................................... 1,813.3 1,747.4 38.0 (103.9)
Other.............................................. 1,417.0 1,387.3 4.2 (33.9)
-------- -------- ------ -------
Total debt securities................................ 3,528.8 3,419.7 42.5 (151.6)
Equity securities.................................... 280.9 472.0 203.2 (12.1)
-------- -------- ------ -------
Total investments in securities............... $3,809.7 $3,891.7 $245.7 $ (163.7)
======== ======== ====== =======
</TABLE>
The distribution of maturities of GMAC's debt securities is summarized
below:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------------------
1995 1994
-------------------- --------------------
FAIR FAIR
COST VALUE COST VALUE
-------- -------- -------- --------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C>
Maturity --
Due in one year or less............................... $ 265.5 $ 269.6 $ 177.6 $ 179.0
Due after one year through five years................. 900.8 935.2 637.9 631.5
Due after five years through 10 years................. 1,020.4 1,084.5 997.9 968.8
Due after 10 years.................................... 861.9 925.7 1,094.3 1,027.4
Mortgage-backed securities............................ 561.5 563.5 621.1 613.0
-------- -------- -------- --------
Total debt securities.......................... $3,610.1 $3,778.5 $3,528.8 $3,419.7
======== ======== ======== ========
</TABLE>
The following table summarizes proceeds, gains, and losses realized from
the sale of investment securities:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------
1995 1994 1993
-------- -------- --------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C>
Debt Securities
Sale Proceeds................................................ $1,370.9 $1,036.4 $2,093.4
Gross Realized Gains......................................... 21.4 15.0 58.6
Gross Realized Losses........................................ 15.5 18.9 13.3
Equity Securities
Sale Proceeds................................................ $ 202.7 $ 185.1 $ 258.6
Gross Realized Gains......................................... 87.4 80.5 160.5
Gross Realized Losses........................................ 6.9 11.9 2.3
</TABLE>
* * *
43
<PAGE> 44
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
SUPPLEMENTARY INFORMATION
SELECTED QUARTERLY DATA (UNAUDITED)
<TABLE>
<CAPTION>
1995 QUARTERS
-----------------------------------------------------
1ST 2ND 3RD 4TH
--------- --------- --------- ---------
(DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C>
Net sales and revenues................................. $43,285.0 $44,146.2 $37,462.9 $43,934.5
========= ========= ========= =========
Income before income taxes............................. $ 3,479.7 $ 3,217.2 $ 803.4 $ 2,276.0(1)
U.S., foreign, and other income taxes.................. 1,325.7 947.1 161.0(2) 410.0(1)
--------- --------- --------- ---------
Income before cumulative effect of accounting
change............................................. 2,154.0 2,270.1 642.4 1,866.0
Cumulative effect of accounting change................. (51.8)(3) -- -- --
--------- --------- --------- ---------
Net income........................................... 2,102.2 2,270.1 642.4 1,866.0
Dividends on preference stocks......................... 72.0 199.5(4) 41.4 50.7
--------- --------- --------- ---------
Income on common stocks.............................. $ 2,030.2 $ 2,070.6 $ 601.0 $ 1,815.3
========= ========= ========= =========
Earnings attributable to common stocks
$1 2/3 par value before cumulative effect of
accounting change.................................. $ 1,896.3 $ 1,796.0 $ 316.7 $ 1,499.8
Cumulative effect of accounting change............... (51.8)(3) -- -- --
--------- --------- --------- ---------
Net earnings attributable to $1 2/3 par value........ $ 1,844.5 $ 1,796.0 $ 316.7 $ 1,499.8
========= ========= ========= =========
Net earnings attributable to Class E................. $ 122.4 $ 205.8 $ 222.9 $ 244.4
========= ========= ========= =========
Net earnings attributable to Class H................. $ 63.3 $ 68.8 $ 61.4 $ 71.1
========= ========= ========= =========
Average number of shares of common stocks outstanding
(in millions)
$1 2/3 par value..................................... 752.6 746.3 748.2 751.5
Class E.............................................. 300.0 438.7(5) 438.8 438.9
Class H.............................................. 94.2 95.4 95.9 96.5
Earnings per share attributable to common stocks
$1 2/3 par value before cumulative effect of
accounting change.................................. $2.51 $2.39 $0.42 $1.98
Cumulative effect of accounting change............... (0.07)(3) -- -- --
----- ----- ----- -----
Net earnings attributable to $1 2/3 par value........ $2.44 $2.39 $0.42 $1.98
===== ===== ===== =====
Net earnings attributable to Class E................. $0.42 $0.47 $0.51 $0.56
===== ===== ===== =====
Net earnings attributable to Class H................. $0.67 $0.72 $0.64 $0.74
===== ===== ===== =====
Cash dividends per share of common stocks
$1 2/3 par value..................................... $0.20 $0.30 $0.30 $0.30
Class E.............................................. 0.13 0.13 0.13 0.13
Class H.............................................. 0.23 0.23 0.23 0.23
Price range of common stocks
$1 2/3 par value(6): High............................ $45.63 $49.00 $51.88 $53.13
Low............................... 37.25 42.38 45.38 43.38
Class E(6): High.............................. 41.38 45.25 47.50 52.63
Low............................... 36.88 38.38 41.50 43.88
Class H(6): High.............................. 41.75 41.63 42.75 50.00
Low............................... 33.25 37.75 39.13 39.50
</TABLE>
- --------------------------------------------------------------------------------
(1) Income taxes and interest expense in the fourth quarter reflect benefits
related to the resolution of worldwide prior year income tax issues. Income
taxes also reflects the benefit of a U.S. net operating loss carryback --
for tax purposes only -- to years with higher tax rates.
(2) The effective income tax rate in the third quarter reflects tax benefits
from the mix of foreign income and foreign income taxes.
(3) In November 1995, the Corporation adopted, retroactive to January 1, 1995,
the provisions of the EITF consensus on Issue No. 95-1. The unfavorable
cumulative effect of this accounting change was $51.8 million, or $0.07 per
share of $1 2/3 par value common stock. Previously reported first quarter
results have been restated to reflect the effects of adoption. The effect on
other 1995 quarters was not material.
(4) Includes a $153.4 million tender offer premium associated with the
repurchase of a portion of the Series B, D, and G preference stock.
(5) Reflects Class E common stock contribution to the U.S. Hourly Pension Plan.
(6) The principal market is the New York Stock Exchange and prices are based on
the Composite Tape. $1 2/3 par value common stock is also listed on the
Chicago, Pacific, and Philadelphia stock exchanges. As of December 31, 1995,
there were 625,652 holders of record of $1 2/3 par value common stock,
272,096 holders of record of Class E common stock, and 267,052 holders of
record of Class H common stock.
44
<PAGE> 45
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
SUPPLEMENTARY INFORMATION -- CONTINUED
SELECTED QUARTERLY DATA (UNAUDITED) -- CONCLUDED
<TABLE>
<CAPTION>
1994 QUARTERS
-------------------------------------------------------
1ST 2ND 3RD 4TH
--------- --------- --------- ---------
(DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C>
Net sales and revenues.............................. $37,495.4 $40,392.2 $34,510.3 $42,553.3
========= ========= ========= =========
Income before income taxes.......................... $ 2,452.1 $ 3,086.2 $ 453.6 $ 2,361.4
U.S., foreign, and other income taxes (credit)...... 840.3 1,163.4 (98.4)(1) 789.3
--------- --------- --------- ---------
Income before cumulative effect of accounting
change.......................................... 1,611.8 1,922.8 552.0 1,572.1
Cumulative effect of accounting change.............. (758.1)(2) -- -- --
--------- --------- --------- ---------
Net income...................................... 853.7 1,922.8 552.0 1,572.1
Dividends on preference stocks...................... 86.8 89.7 72.1 72.1
--------- --------- --------- ---------
Income on common stocks......................... $ 766.9 $ 1,833.1 $ 479.9 $ 1,500.0
========= ========= ========= =========
Earnings attributable to common stocks
$1 2/3 par value before cumulative effect of
accounting change............................. $ 1,362.1 $ 1,665.3 $ 306.0 $ 1,311.8
Cumulative effect of accounting change.......... (751.3)(2) -- -- --
--------- --------- --------- ---------
Net earnings attributable to $1 2/3 par value... $ 610.8 $ 1,665.3 $ 306.0 $ 1,311.8
========= ========= ========= =========
Net earnings attributable to Class E............ $ 92.1 $ 106.5 $ 117.3 $ 128.5
========= ========= ========= =========
Class H before cumulative effect of accounting
change........................................ $ 70.8 $ 61.3 $ 56.6 $ 59.7
Cumulative effect of accounting change.......... (6.8)(2) -- -- --
--------- --------- --------- ---------
Net earnings attributable to Class H............ $ 64.0 $ 61.3 $ 56.6 $ 59.7
========= ========= ========= =========
Average number of shares of common stocks
outstanding
(in millions)
$1 2/3 par value................................ 725.3 733.1 752.7 753.7
Class E......................................... 257.9 260.1 261.2 261.9
Class H......................................... 90.6 91.7 92.7 93.3
Earnings per share attributable to common stocks
$1 2/3 par value before cumulative effect of
accounting change............................. $1.86 $2.23 $0.40 $1.74
Cumulative effect of accounting change.......... (1.05)(2) -- -- --
----- ----- ----- -----
Net earnings attributable to $1 2/3 par value... $0.81 $2.23 $0.40 $1.74
===== ===== ===== =====
Net earnings attributable to Class E............ $0.36 $0.41 $0.45 $0.49
===== ===== ===== =====
Class H before cumulative effect of accounting
change........................................ $0.78 $0.67 $0.61 $0.64
Cumulative effect of accounting change.......... (0.08)(2) -- -- --
----- ----- ----- -----
Net earnings attributable to Class H............ $0.70 $0.67 $0.61 $0.64
===== ===== ===== =====
Cash dividends per share of common stocks
$1 2/3 par value................................ $0.20 $0.20 $0.20 $0.20
Class E......................................... 0.12 0.12 0.12 0.12
Class H......................................... 0.20 0.20 0.20 0.20
Price range of common stocks
$1 2/3 par value: High............................ $65.38 $60.13 $53.38 $48.38
Low............................. 52.00 49.75 46.25 36.13
Class E: High............................ 36.88 38.00 38.50 39.50
Low............................. 27.50 32.88 33.00 34.75
Class H: High............................ 40.38 38.75 38.00 37.75
Low............................. 32.63 31.75 34.63 31.00
</TABLE>
- --------------------------------------------------------------------------------
(1) The income tax credit in the third quarter is primarily a function of the
low level of pre-tax income, a low effect tax rate for foreign operations,
and a favorable adjustment related to book tax accruals which had been
established in prior years.
(2) Effective January 1, 1994, General Motors adopted SFAS No. 112. The
unfavorable cumulative effect of adopting SFAS No. 112 was $758.1 million,
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 Class H common
stock.
45
<PAGE> 46
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
SUPPLEMENTARY INFORMATION -- CONTINUED
SELECTED FINANCIAL DATA (UNAUDITED)
<TABLE>
<CAPTION>
AS OF AND FOR THE YEARS ENDED DECEMBER 31,
--------------------------------------------
1995 1994 1993
---------- ---------- ----------
(DOLLARS IN MILLIONS EXCEPT PER SHARE
AMOUNTS)
<S> <C> <C> <C>
Net sales and revenues............................ $168,828.6 $154,951.2 $138,219.5
Income before income taxes........................ $ 9,776.3 $ 8,353.3 $ 2,575.3
Percentage of sales and revenues.................. 5.8% 5.4% 1.9%
========== ========== ==========
Net income........................................ $ 6,880.7(1) $ 4,900.6 $ 2,465.8
Income on common stocks........................... $ 6,517.1 $ 4,579.9 $ 2,109.0
Rate of return on average common stockholders'
equity.......................................... 54.2%(2) 79.9%(2) 104.2%(2)
========== ========== ==========
$1 2/3 par value common stock
Earnings attributable to........................ $ 5,457.0(1) $ 3,893.9(3) $ 1,537.3
Cash dividends.................................. 824.2 592.6 565.8
---------- ---------- ----------
Net income retained............................. $ 4,632.8 $ 3,301.3 $ 971.5
========== ========== ==========
Earnings per share.............................. $7.21(1) $5.15(3) $2.13
Cash dividends per share........................ 1.10 0.80 0.80
---------- ---------- ----------
Net income retained per share................... $6.11 $4.35 $1.33
========== ========== ==========
Class E common stock
Earnings attributable to........................ $ 795.5 $ 444.4 $ 367.2
Cash dividends.................................. 205.4 124.8 97.2
---------- ---------- ----------
Net income retained............................. $ 590.1 $ 319.6 $ 270.0
========== ========== ==========
Earnings per share.............................. $1.96 $1.71 $1.51
Cash dividends per share........................ 0.52 0.48 0.40
---------- ---------- ----------
Net income retained per share................... $1.44 $1.23 $1.11
========== ========== ==========
Class H common stock
Earnings attributable to........................ $ 264.6 $ 241.6(3) $ 204.5
Cash dividends.................................. 87.9 73.8 64.1
---------- ---------- ----------
Net income retained............................. $ 176.7 $ 167.8 $ 140.4
========== ========== ==========
Earnings per share.............................. $2.77 $2.62(3) $2.30
Cash dividends per share........................ 0.92 0.80 0.72
----- ----- -----
Net income retained per share................... $1.85 $1.82 $1.58
===== ===== =====
Average number of shares of common stocks
outstanding (in millions)
$1 2/3 par value................................ 749.7 741.3 710.2
Class E......................................... 404.6 260.3 243.0
Class H......................................... 95.5 92.1 88.6
Cash dividends on capital stocks as a % of net
income.......................................... 19.3% 22.7% 44.0%
Expenditures for real estate, plants, and
equipment....................................... $ 6,351.4 $ 4,883.7 $ 3,822.1
Expenditures for special tools.................... $ 3,725.9 $ 2,341.4 $ 2,648.6
Cash and marketable securities.................... $ 16,642.9 $ 16,075.6 $ 17,962.7
Working capital (with GMAC on an equity basis).... $ 2,390.5 $ 700.9 $ 2,822.2
Current ratio (with GMAC on an equity basis)...... 1.06 1.02 1.08
Total assets...................................... $217,123.4 $198,598.7 $188,200.9
Long-term debt and capitalized leases (with GMAC
on an equity basis)............................. $ 6,134.0 $ 6,218.7 $ 6,383.6
</TABLE>
- ----------------------
See notes on page 48.
46
<PAGE> 47
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
SUPPLEMENTARY INFORMATION -- CONTINUED
SELECTED FINANCIAL DATA (UNAUDITED) -- CONTINUED
<TABLE>
<CAPTION>
AS OF AND FOR THE
YEARS ENDED DECEMBER 31,
-----------------------------
1992 1991
---------- ----------
(DOLLARS IN MILLIONS EXCEPT
PER SHARE AMOUNTS)
<S> <C> <C>
Net sales and revenues........................................ $132,242.2 $123,108.8
Loss before income taxes...................................... $ (3,333.1) $ (5,892.3)
Percentage of sales and revenues.............................. (2.5)% (4.8)%
========== ==========
Net loss...................................................... $(23,498.3) $ (4,452.8)
Loss on common stocks......................................... $(23,804.6) $ (4,523.2)
Rate of return on average common stockholders' equity......... (169.3)%(2) (15.9)%
========== ==========
$1 2/3 par value common stock
Loss attributable to........................................ $(23,940.7) (4) $ (4,851.4) (5)
Cash dividends.............................................. 945.4 983.4
---------- ----------
Net loss accumulated........................................ $(24,886.1) $ (5,834.8)
========== ==========
Loss per share.............................................. $(38.28) (4) $(7.97) (5)
Cash dividends per share.................................... 1.40 1.60
------- ------
Net loss accumulated per share.............................. $(39.68) $(9.57)
======= ======
Class E common stock
Earnings attributable to.................................... $ 278.4 $ 223.6(5)
Cash dividends.............................................. 76.1 62.5
---------- ----------
Net income retained......................................... $ 202.3 $ 161.1
========== ==========
Earnings per share.......................................... $1.33 $1.14(5)
Cash dividends per share.................................... 0.36 0.32
----- -----
Net income retained per share............................... $0.97 $0.82
===== =====
Class H common stock
Earnings (Loss) attributable to............................. $ (142.3) (4) $ 104.6(5)
Cash dividends.............................................. 53.3 54.3
---------- ----------
Net income retained (loss accumulated)...................... $ (195.6) $ 50.3
========== ==========
Earnings (Loss) per share................................... $(2.29) (4) $1.39(5)
Cash dividends per share.................................... 0.72 0.72
------ -----
Net income retained (loss accumulated) per share............ $(3.01) $0.67
====== =====
Average number of shares of common stocks outstanding (in
millions)
$1 2/3 par value............................................ 670.5 614.6
Class E..................................................... 209.1 195.3
Class H..................................................... 75.3 73.7
Cash dividends on capital stocks as a % of net income......... N/A N/A
Expenditures for real estate, plants, and equipment........... $ 4,336.7 $ 4,255.1
Expenditures for special tools................................ $ 2,252.9 $ 2,956.8
Cash and marketable securities................................ $ 15,107.7 $ 10,192.4
Working capital (with GMAC on an equity basis)................ $ 10,938.6 $ 10,807.1
Current ratio (with GMAC on an equity basis).................. 1.32 1.36
Total assets.................................................. $190,196.0 $184,074.6
Long-term debt and capitalized leases (with GMAC on an equity
basis)...................................................... $ 7,055.4 $ 6,699.1
</TABLE>
- ----------------------
See notes on page 48.
47
<PAGE> 48
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
SUPPLEMENTARY INFORMATION -- CONCLUDED
SELECTED FINANCIAL DATA (UNAUDITED) -- CONCLUDED
- --------------------------------------------------------------------------------
(1) In November 1995, the Corporation adopted, retroactive to January 1, 1995,
the provisions of the EITF consensus on Issue No. 95-1. The unfavorable
effect of this accounting change was $51.8 million, or $0.07 per share of
$1 2/3 par value common stock.
(2) The high returns in 1995, 1994, and 1993 compared to the large negative
return in 1992 reflect the adoption of SFAS No. 106 and its impact on
lowering average common stockholders' equity.
(3) General Motors adopted SFAS No. 112, Employers' Accounting for
Postemployment Benefits, effective January 1, 1994. The unfavorable
cumulative effect of adopting SFAS No. 112 was $751.3 million or $1.05 per
share of $1 2/3 par value and $6.8 million or $0.08 per share of Class H
common stock.
(4) General Motors adopted SFAS No. 106, Employers' Accounting for
Postretirement Benefits Other Than Pensions, effective January 1, 1992. The
unfavorable cumulative effect of adopting SFAS No. 106 was $20,687.3 million
or $33.38 per share of $1 2/3 par value and $150.4 million or $2.08 per
share of Class H common stock. Also effective January 1, 1992, Hughes
changed its revenue recognition policy for certain commercial businesses.
The unfavorable effect of this change on 1992 earnings was $32.8 million or
$0.05 per share of $1 2/3 par value and $7.2 million or $0.10 per share of
Class H common stock.
(5) Effective January 1, 1991, accounting procedures were changed to include in
inventory general purpose spare parts previously charged directly to
expense. The effect of this change on 1991 earnings was a favorable
adjustment of $302.7 million or $0.50 per share of $1 2/3 par value and $3.8
million or $0.04 per share of Class H common stock. Also, General Motors
adopted SFAS No. 109, Accounting for Income Taxes, effective January 1,
1991. The favorable (unfavorable) cumulative effect of adopting SFAS No. 109
was $230.5 million or $0.38 per share of $1 2/3 par value, ($6.1) million or
($0.03) per share of Class E, and $8.3 million or $0.09 per share of Class H
common stock.
48
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM GENERAL
MOTORS CORPORATION DECEMBER 31, 1995 CONSOLIDATED FINANCIAL STATEMENTS AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO 1995 FORM 10-K.
</LEGEND>
<CIK> 0000040730
<NAME> GENERAL MOTORS CORPORATION
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 11,044
<SECURITIES> 5,599
<RECEIVABLES> 68,720
<ALLOWANCES> 0
<INVENTORY> 11,530
<CURRENT-ASSETS> 0
<PP&E> 81,823
<DEPRECIATION> 44,083
<TOTAL-ASSETS> 217,123
<CURRENT-LIABILITIES> 0
<BONDS> 83,324
0
1
<COMMON> 1,309
<OTHER-SE> 22,035
<TOTAL-LIABILITY-AND-EQUITY> 217,123
<SALES> 143,666
<TOTAL-REVENUES> 168,829
<CGS> 126,535
<TOTAL-COSTS> 138,302
<OTHER-EXPENSES> 255
<LOSS-PROVISION> 449
<INTEREST-EXPENSE> 5,302
<INCOME-PRETAX> 9,776
<INCOME-TAX> 2,844
<INCOME-CONTINUING> 6,933
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> (52)
<NET-INCOME> 6,881
<EPS-PRIMARY> 7.21
<EPS-DILUTED> 0
</TABLE>
