L:\secfiles\8-k\1997\release\2ndqtrPR.doc
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) July 14, 1997
----------------
GENERAL MOTORS CORPORATION
-----------------------------------------------------
(Exact name of registrant as specified in its charter)
STATE OF DELAWARE 1-143 38-0572515
- ---------------------------- ----------------------- -------------------
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
100 Renaissance Center, Detroit, Michigan 48243-7301
3044 West Grand Boulevard, Detroit, Michigan 48202-3091
- -------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (313)-556-5000
--------------
- 1 -
ITEM 5. OTHER EVENTS
On July 16, 1997, a news release was issued on the subject of second
quarter consolidated earnings for General Motors (GM). The news release did not
include financial statement footnotes and certain other financial information
that will be filed with the Securities and Exchange Commission at a later date.
The GM news release and related news releases for second quarter earnings of
Hughes Electronics Corporation (Hughes), dated July 15, 1997, and General Motors
Acceptance Corporation (GMAC), dated July 16, 1997, respectively, were as
follows:
GM NEWS RELEASE
GM REPORTS ALL-TIME-RECORD QUARTERLY EARNINGS PER SHARE OF $2.68
FOR THE SECOND QUARTER OF 1997. CONSOLIDATED NET INCOME TOTALED $2.1 BILLION.
DETROIT -- General Motors Corporation reported today that earnings per
share of GM $1-2/3 par value common stock totaled $2.68 in the second quarter of
1997 -- the highest for any quarter in the corporation's history. Consolidated
net income for the period totaled $2.1 billion. That compares with $1.9 billion,
or $2.63 per share, in the year-ago period. Excluding the $490 million after-tax
unfavorable impact of strike-related production losses in the second quarter of
1997, and the favorable impact of special items (see "Special Items")
consolidated income would have totaled $2.2 billion, or $2.88 per share.
"GM's results on both a reported and adjusted basis are a further
indication of our operating and financial strength," GM Chairman and Chief
Executive Officer John F. Smith, Jr., said.
"It's significant that, even though strike-related losses hit the bottom
line pretty hard in the second quarter, we still earned a substantial amount of
money during the period," he said.
"I wish we could have avoided the strikes," Smith said, "but we have to
make GM competitive, and we need local labor agreements that are consistent with
that objective. We think that's really the only way we can provide the long-term
prosperity for our people and the unions that represent them, as well as our
shareholders."
Smith cited GM's strong cash position -- $14.9 billion at the end of the
second quarter -- as another sign of GM's financial strength. "The continued
strong cash generation of our operations made it possible to fund our
capital-spending programs and acquisition activities during the quarter, keep an
appropriate level of cash reserves, and at the same time continue to repurchase
shares of GM common stock during the second quarter." (See "GM Consolidated
Financial Data.")
Significant highlights for the second-quarter of 1997 from the automotive
sectors included the following:
- GM North American Operations (GM-NAO) reported net income of $474
million in the second quarter of 1997, compared with net income of $705
million in the second quarter of 1996. The 1997-second-quarter results
included an unfavorable $375 million after-tax impact due to
strike-related production losses.
- 2 -
- Delphi Automotive Systems (Delphi) reported net income of $310 million
in the second quarter of 1997, compared with net income of $355 million
in the second quarter of 1996. The 1997-second-quarter results included
an unfavorable $85 million after-tax impact stemming from
strike-related production losses.
- GM International Operations (GMIO) reported net income of $488 million
in the second quarter of 1997, compared with net income of $424 million
in the prior-year period. The second-quarter-1997 results included a
favorable $103 million after-tax gain related to the sale of GM
Europe's share of Avis Europe.
Highlights of second-quarter-1997 results reported by GM's major
subsidiaries included the following:
- General Motors Acceptance Corporation (GMAC) reported net income of
$338 million for the second quarter of 1997, compared with net income
of $350 million in the second quarter of 1996.
- Hughes Electronics Corporation (Hughes) reported second-quarter-1997
earnings of $542 million, compared with earnings of $306 million in the
prior-year period. The second quarter of 1997 included a $318 million
after-tax gain related to the merger of the satellite service
operations of Hughes and PanAmSat Corporation, and an unfavorable $30
million after-tax effect of the strike-related production losses at
Hughes' Delco Electronics unit.
(See additional information in sections detailing individual automotive
sector results, "Special Items," "Strike-Related Impact," "Update on Hughes
Transactions," and "Highlights.")
GM CONSOLIDATED FINANCIAL DATA (with financing & insurance operations on an
equity basis)
The corporation's pretax income was $2.646 billion in the second quarter
of 1997, compared with $2.605 billion in the second quarter of 1996.
The corporation's after-tax net-profit margin -- net income as a
percentage of net sales and revenues -- was 5.3 percent in the second quarter of
1997, compared with 4.7 percent in the second quarter of 1996. Excluding both
the unfavorable strike-related impact and the favorable special items, the
second-quarter-1997 net-profit margin would have been 5.2 percent.
GM's cash position remained strong during the second quarter of 1997. Cash
and marketable securities totaled $14.9 billion at June 30, 1997, compared with
$13.0 billion at June 30, 1996, and $14.6 billion at March 31, 1997.
In the second quarter of 1997, GM used approximately $469 million to
acquire more than 8.3 million shares of GM $1-2/3 par value common stock under
the corporation's stock-repurchase program announced in January. A total of $2.0
billion in cash was used to repurchase 35.5 million shares during the first half
of 1997, completing 80 percent of the $2.5 billion repurchase program.
- 3 -
Net sales and revenues in the second quarter of 1997 totaled $39.7
billion, compared with $40.2 billion in the same period last year.
Following is a summary of financial performance for GM's automotive
business sectors (see "Highlights" for additional information):
GM NORTH AMERICAN OPERATIONS (GM-NAO)
GM North American Operations' second-quarter-1997 net income totaled $474
million, compared with $705 million in the second quarter of 1996.
Excluding the $375 million after-tax unfavorable impact of strike-related
production losses in the second quarter of 1997, net income would have totaled
$849 million.
GM-NAO reported pretax income of $683 million in the second quarter of
1997, compared with $1.1 billion in the prior-year period.
GM-NAO's net-profit margin was 1.8 percent in the second quarter of 1997,
compared with 2.6 percent in the prior-year period. Excluding the unfavorable
strike-related impact, the second-quarter-1997 net-profit margin would have been
3.1 percent.
"Second quarter earnings were significantly impacted by the strike-related
work stoppages at the Oklahoma City and Pontiac East assembly plants, as well as
an increase in vehicle incentives," Smith said. "But to put the quarter into
perspective, without the impact of the work stoppages, GM-NAO's second-quarter
earnings would have been its best performance for any quarter in more than 10
years."
The second-quarter results were favorably affected by the improved
profitability of GM's new vehicles and better manufacturing and engineering
efficiencies.
Smith said, "GM-NAO continues to build basic earnings power, increase its
financial strength, and is establishing an excellent foundation for the future."
GM vehicle deliveries in the United States in the second quarter of 1997
totaled 1,252,000 units, which resulted in a 30.5-percent share of the U.S.
vehicle market, compared with 1,374,000 units, and a 32.0-percent share in the
second quarter of 1996. (See additional information in "Highlights."). Although
the market share is down compared with the second quarter of 1996, even with the
impact of the strikes that resulted in the loss of 96,000 units of production,
the second-quarter-1997 penetration represented a slight increase over the
30.2-percent market share in the first quarter of 1997.
Increased market penetration is anticipated in the second half of 1997
with improved inventory of GM's newest products in North America, including the
Pontiac Grand Prix, Buick Park Avenue and Century, Cadillac Catera, Chevrolet
Malibu and Venture, Oldsmobile Cutlass and Silhouette, and Pontiac Trans Sport,
which continue to gain share in their respective market segments.
DELPHI AUTOMOTIVE SYSTEMS (DELPHI)
Delphi Automotive Systems reported net income of $310 million in the
second quarter of 1997, compared with net income of $355 million in the second
quarter of 1996. The second-quarter-1997 results would have totaled $395
million, excluding the $85 million after-tax unfavorable strike-related impact.
- 4 -
Delphi reported pretax income of $468 million in the second quarter of
1997, compared with pretax income of $528 million in the prior-year period.
Delphi's net-profit margin was 4.6 percent in the second quarter of 1997,
compared with a net-profit margin of 4.9 percent in the prior-year period.
Excluding the unfavorable strike-related impact, the second-quarter-1997
net-profit margin would have been 5.6 percent.
Delphi's second-quarter sales to customers outside the GM-NAO vehicle
groups increased more than $170 million compared with the prior-year period and
represented approximately 37 percent of total sales, including all joint
ventures.
During the second quarter of 1997, Delphi continued its drive to
strategically grow its operations worldwide through various activities,
including acquisitions, alliances and joint ventures in Central and Eastern
Europe, Asia and the United States.
Smith said Delphi's global growth is well planned. "Delphi has long been
committed to being the leader in all of its product lines as well as following
its customers around the world. They continue to effectively implement this
strategy and as a result, Delphi is becoming an even stronger sector."
GM INTERNATIONAL OPERATIONS (GMIO)
GM International Operations reported net income of $488 million for the
second quarter of 1997, compared with net income of $424 million in the same
period of 1996.
The second-quarter-1997 results included a $103 million after-tax gain
related to the sale of GM Europe's share of Avis Europe (see "Special Items").
GMIO reported pretax income of $727 million in the second quarter of 1997,
compared with pretax income of $629 million in the second quarter of 1996.
The net-profit margin for GMIO was 5.0 percent in the second quarter of
1997, compared with 4.7 percent in the prior-year period. Excluding the
favorable impact of the above-mentioned sale of interest in Avis Europe, the
second-quarter-1997 net-profit margin would have been 4.0 percent.
Including the favorable impact of the Avis Europe transaction, GM's
automotive operations in Europe reported net income of $312 million in the
second quarter of 1997, compared with net income of $319 million in the second
quarter of 1996.
"Continuing the trend from the first quarter, the lower second-quarter
earnings reflect higher sales incentives and increased advertising expenditures
associated with intensely competitive market conditions," Smith said.
For the remainder of GM International Operations, which include the Latin
American and Asia and Pacific Operations, net income totaled $176 million in the
second quarter of 1997, compared with $105 million in the prior-year period. The
increased earnings in the second quarter of 1997 were primarily due to increased
volume in Latin America.
- 5 -
SPECIAL ITEMS
The second-quarter-1997-results were affected by special items, which
included:
- $318 million after-tax gain, or $0.33 per share of GM $1-2/3 par value
common stock, and $0.80 per share of GM Class H common stock, related
to the merger of the satellite service operations of Hughes and
PanAmSat Corporation.
- $103 million after-tax gain, or $0.14 per share of GM $1-2/3 par value
common stock, related to the sale of GM Europe's equity interest in
Avis Europe.
STRIKE-RELATED IMPACT
The second-quarter-1997 results also included the $490 million after-tax
unfavorable impact ($0.67 per share of GM $1-2/3 par value common stock) of
strike-related production losses at two key assembly plants.
A strike by local union members in Oklahoma City, Okla., halted production
of Chevrolet Malibu and Oldsmobile Cutlass models between April 4, 1997, and May
27, 1997. A separate strike by workers at a Pontiac, Mich., truck-assembly
plant, shut down operations there beginning April 22, 1997.
The work stoppages resulted in an estimated loss of 96,000 units of
production during the second quarter of 1997, with the following sector-specific
after-tax approximate effects: GM-NAO, $375 million; Delphi, $85 million, and
the Delco Electronics unit of Hughes, $30 million.
The estimated unfavorable impact does not take into account the effect of
possible recoveries that may occur through truck-production increases that GM is
likely to pursue at various facilities in future periods.
UPDATE ON HUGHES TRANSACTIONS
General Motors received a ruling from the Internal Revenue Service on July
14, 1997, that GM's contemplated spin-off of the defense business of Hughes
Electronics would be tax-free to GM and its stockholders.
The spin-off of the Hughes defense business to holders of GM $1-2/3 par
value, and GM Class H common stocks, and its subsequent merger with Raytheon
Company, are part of a series of related transactions announced by GM and Hughes
in January 1997. The other related elements include the transfer of Delco
Electronics from Hughes Electronics to GM's Delphi Automotive Systems, and the
recapitalization of GM Class H common stock into a GM tracking stock linked to
the telecommunications and space business of Hughes Electronics.
The planned transactions must be approved by holders of GM $1-2/3 par
value and Class H common stocks, among a number of other conditions. In
addition, the merger of the Hughes defense business and Raytheon is subject to
antitrust clearance and approval by Raytheon stockholders. GM expects to solicit
stockholder approval for these transactions during the fourth quarter of 1997.
# # #
- 6 -
HIGHLIGHTS - Q2 Financial Results
(Dollars in Millions Except
Per Share Amounts) Three Months Ended
June 30,
----------------------
1997 1996
---------------------------- --------- ----------
Net sales and revenues
Manufactured products $39,724 $40,169
Financial services 3,204 3,125
Other income 2,218 1,486
-------- --------
Total net sales and revenues $45,146 $44,780
-------- --------
.....................................................
Total net sales and revenues(1) $39,741 $40,182
Gross profit margin percentage(1) 17.0% 17.6%
.....................................................
Income from continuing operations
before income taxes(1) $2,646 $2,605
Effective income tax rate(1) 34.4% 34.0%
.....................................................
Income from continuing
operations $2,098 $2,096
Loss from discontinued
operations - (209)
-------- --------
Consolidated net income $2,098 $1,887
======== ========
Net profit margin(1) 5.3% 4.7%
======== ========
.....................................................
Earnings (Loss) Attributable to Common Stocks
$1-2/3 par value(2) $1,941 $1,986
Class E - (194)(3)
Class H 137 75
.....................................................
Earnings (Loss) Per Share Attributable to Common Stocks
$1-2/3 par value(2) $2.68 $2.63
Class E - (0.41)(3)
Class H 1.35 0.77
.....................................................
Cash Dividends Per Share of Common Stocks
$1-2/3 par value $0.50 $0.40
Class E - 0.15
Class H 0.25 0.24
.....................................................
Book Value Per Share of Common Stocks
June 30 Dec. 31 June 30
1997 1996 1996
-------- ------- --------
$1-2/3 par value $29.99 $27.95 $24.79
Class H $14.99 $13.97 $12.40
....................................................
See footnotes beginning on page 11.
continues
- 7 -
HIGHLIGHTS - Q2 Financial Results
(Dollars in Millions) Three Months Ended
June 30,
----------------------
1997 1996
---------------------------- --------- ----------
Major Business Sector Results
GM-NAO:
Net sales and revenues $25,823 $26,929
====== ======
Pre-tax income $683 $1,074
Income tax expense 225 387
Equity income 16 18
------ ------
GM-NAO net income $474 $705
------ ------
Delphi:
Net sales and revenues $6,778 $7,307
====== ======
Pre-tax income $468 $528
Income tax expense 170 184
Minority interests 5 (5)
Equity income 7 16
------ ------
Delphi net income $310 $355
------ ------
GMIO:
Net sales and revenues $9,711 $9,101
====== ======
Pre-tax income $727 $629
Income tax expense 233 209
Minority interests 7 (3)
Equity income (loss) (13) 7
------ ------
GMIO net income(4) $488 $424
------ ------
GMAC net income $338 $350
Hughes earnings 542 306
Other(5) (54) (44)
------ ------
Income from continuing
operations 2,098 2,096
------ ------
Loss from discontinued
operations - (209)
------ ------
Consolidated net income $2,098 $1,887
====== ======
.....................................................
See footnotes beginning on page 11.
continues
- 8 -
HIGHLIGHTS - Q2 Strike-Related and Special Items
(Dollars in Millions Except
Per Share Amounts)
Three Months Ended
June 30,
----------------------
1997 1996
--------- ----------
Strike-Related and Special Items Analysis
Income from continuing
operations $2,098 $2,096
Work stoppages (6) (490) -
------ ------
Subtotal 2,588 2,096
PanAmSat merger (7) 318 -
Avis Europe (8) 103 -
------ ------
Income from continuing operations
-excluding strike-related
and special items $2,167 $2,096
====== ======
.....................................................
$1-2/3 EPS Impact of Strike-Related and Special Items
Attributable to continuing
operations $2.68 $2.65
Work stoppages (6) (0.67) -
------ ------
Subtotal 3.35 2.65
PanAmSat merger (7) 0.33 -
Avis Europe (8) 0.14 -
----- ------
Attributable to continuing
operations - excluding
strike-related and special
items $2.88 $2.65
===== ======
.....................................................
See footnotes beginning on page 11.
continues
- 9 -
HIGHLIGHTS - Q2 Operating Information
Three Months Ended
June 30,
----------------------
1997 1996
--------- ----------
Worldwide Wholesale Sales (Units in 000s)
United States: Cars 705 814
Trucks 536 575
------- -------
Total United States 1,241 1,389
Canada and Mexico 174 137
------- -------
Total North America 1,415 1,526
International 836 788
------- -------
Total Worldwide 2,251 2,314
======= =======
....................................................
Vehicle Unit Deliveries (Units in 000s)
United States
Chevrolet - Cars 254 337
- Trucks 384 394
Pontiac 169 162
GMC 124 126
Buick 118 129
Oldsmobile 81 97
Saturn 69 77
Cadillac 45 45
Other 8 7
------ -----
Total United States 1,252 1,374
Canada and Mexico 162 131
------ ------
Total North America 1,414 1,505
------ ------
International
Europe 492 491
Latin America, Africa, and the
Middle East 203 168
Asia and Pacific 134 152
------ ------
Total International 829 811
------ ------
Total Worldwide 2,243 2,316
====== ======
....................................................
Market Share
United States
Cars 32.2% 34.7%
Trucks 28.5% 28.5%
Total 30.5% 32.0%
Western Europe 11.5% 11.1%
Latin America 19.2% 19.7%
Asia and Pacific 4.3% 4.6%
Total Worldwide 16.4% 17.3%
....................................................
U.S. Retail/Fleet Mix
% Fleet Sales - Cars 26.4% 28.3%
% Fleet Sales - Trucks 15.8% 13.3%
Total Vehicles 21.8% 22.5%
....................................................
Days Supply of Inventory -- U.S.
Gross Landed Stock
Cars 84 70
Trucks 105 88
....................................................
Capacity Utilization %
U.S. and Canada (2-shift rated) 91.9% 93.3%
....................................................
Retail Incentives (9)($ per unit)
GM-NAO $1,060 $695
GM Europe $554 $495
....................................................
See footnotes beginning on page 11.
continues
- 10 -
HIGHLIGHTS - Q2 Operating Information
(Dollars in Millions Except
Per Share Amounts) Three Months Ended
June 30,
----------------------
1997 1996
--------- ----------
Depreciation and amortization(1)
Depreciation $1,076 $1,000
Amortization of special tools 790 824
Amortization of intangible
assets 52 25
----- -----
$1,918 $1,849
===== =====
....................................................
Worldwide Employment at June 30 (in 000s)
GM-NAO 243 256
Delphi 176 179
GMIO 114 109
GMAC 18 17
Hughes 88 84
Other 10 11
--- ---
Employees associated with
continuing operations 649 656
--- ---
....................................................
Worldwide Payrolls-Continuing
Operations $7,631 $7,432
....................................................
(1) Calculated with financing and insurance operations on an
equity basis.
(2) $1-2/3 par value includes:
Three Months Ended
June 30,
-------------------
1997 1996
----- -----
Earnings (loss) attributable to:
Continuing operations $1,941 $2,001
Discontinued operations - (15)
------- -------
Net earnings $1,941 $1,986
======= =======
Earnings (loss) per share attributable to:
Continuing operations $2.68 $2.65
Discontinued operations - (0.02)
------ -------
Net earnings per share $2.68 $2.63
====== =======
(3) Through the June 7, 1996 split-off date.
(4) GMIO Includes: Three Months Ended
June 30,
------------------
1997 1996
---- ----
GM Europe $312 $319
Other GMIO $176 $105
(5) Includes Allison Transmission Division, GM Locomotive Group, and
purchase accounting adjustments, as well as certain tax and foreign
exchange items not allocated to any one business sector.
(6) Strike-related work stoppages had an unfavorable effect of $490 million
after taxes, or $0.67 per share of GM $1-2/3 par value common stock on
the second quarter 1997 results.
(7) Second quarter 1997 included a gain of $318 million after taxes, or
$0.33 per share of GM $1-2/3 par value common stock, related to the
merger of the satellite service operations of Hughes and PanAmSat
Corporation.
(8) Second quarter 1997 results included a gain of $103 million after
taxes, or $0.14 per share of GM $1-2/3 par value common stock, related
to the sale of GM Europe's equity interest in Avis Europe.
(9) Amounts reported for 1996 have been restated to reflect the methodology
used to calculate Retail Incentives for the 1997 period.
- 11 -
HIGHLIGHTS - 6 Months Financial Results
(Dollars in Millions Except
Per Share Amounts) Six Months Ended
June 30,
----------------------
1997 1996
---------------------------- --------- ----------
Net sales and revenues
Manufactured products $77,164 $74,826
Financial services 6,401 6,304
Other income 3,822 2,892
-------- --------
Total net sales and
revenues $87,387 $84,022
-------- --------
.....................................................
Total net sales and revenues(1) $77,198 $74,854
Gross profit margin percentage(1) 17.1% 15.5%
.....................................................
Income from continuing operations
before income taxes(1) $4,756 $3,290
Effective income tax rate(1) 34.5% 34.0%
.....................................................
Income from continuing
operations $3,894 $2,896
Income from discontinued
operations - 10
-------- --------
Consolidated net income $3,894 $2,906
======== ========
Net profit margin(1) 5.0% 3.9%
======== ========
.....................................................
Earnings Attributable to Common Stocks
$1-2/3 par value(2) $3,658 $2,700
Class E - 15(3)
Class H 196 151
.....................................................
Earnings Per Share Attributable to Common Stocks
$1-2/3 par value(2) $4.98 $3.57
Class E - 0.04(3)
Class H 1.94 1.55
.....................................................
Cash Dividends Per Share of Common Stocks
$1-2/3 par value $1.00 $0.80
Class E - 0.30
Class H 0.50 0.48
.....................................................
See footnotes on page 15.
continues
- 12 -
HIGHLIGHTS - 6 Months Financial Results
(Dollars in Millions) Six Months Ended
June 30,
----------------------
1997 1996
---------------------------- --------- ----------
Major Business Sector Results
GM-NAO:
Net sales and revenues $50,682 $48,612
====== ======
Pre-tax income $1,810 $557
Income tax expense 603 165
Equity income 31 34
------ ------
GM-NAO net income $1,238 $426
------ ------
Delphi:
Net sales and revenues $13,442 $13,496
====== ======
Pre-tax income $705 $649
Income tax expense 242 231
Minority interests 6 (4)
Equity income 21 20
------ ------
Delphi net income $490 $434
------ ------
GMIO:
Net sales and revenues $17,994 $18,098
====== ======
Pre-tax income $1,200 $1,209
Income tax expense 397 379
Minority interests 10 (6)
Equity income (loss) (8) 32
------ ------
GMIO net income(4) $805 $856
------ ------
GMAC net income $710 $659
Hughes earnings 777 618
Other(5) (126) (97)
------ ------
Income from continuing
operations 3,894 2,896
------ ------
Income from discontinued
operations - 10
------ ------
Consolidated net income $3,894 $2,906
====== ======
See footnotes on page 15.
continues
- 13 -
HIGHLIGHTS - 6 Months Operating Information
Six Months Ended
June 30,
----------------------
1997 1996
--------- ----------
Worldwide Wholesale Sales (Units in 000s)
United States: Cars 1,403 1,405
Trucks 1,090 1,035
------- -------
Total United States 2,493 2,440
Canada and Mexico 324 252
------- -------
Total North America 2,817 2,692
International 1,619 1,580
------- -------
Total Worldwide 4,436 4,272
======= =======
....................................................
Vehicle Unit Deliveries (Units in 000s)
United States
Chevrolet - Cars 505 600
- Trucks 742 766
Pontiac 314 289
GMC 233 235
Buick 205 225
Oldsmobile 146 171
Saturn 129 141
Cadillac 87 86
Other 14 13
------ -----
Total United States 2,375 2,526
Canada and Mexico 283 234
------ ------
Total North America 2,658 2,760
------ ------
International
Europe 958 980
Latin America, Africa, and
the Middle East 365 328
Asia and Pacific 294 310
------ ------
Total International 1,617 1,618
------ ------
Total Worldwide 4,275 4,378
====== ======
....................................................
Market Share
United States
Cars 31.9% 33.6%
Trucks 28.6% 29.2%
Total 30.4% 31.6%
Western Europe 11.5% 12.1%
Latin America 18.8% 19.8%
Asia and Pacific 4.2% 4.5%
Total Worldwide 15.7% 16.6%
....................................................
U.S. Retail/Fleet Mix
% Fleet Sales - Cars 26.4% 26.8%
% Fleet Sales - Trucks 14.8% 12.4%
Total Vehicles 21.4% 21.0%
....................................................
Capacity Utilization %
U.S. and Canada (2-shift rated) 93.6% 81.0%
....................................................
Retail Incentives(6)($ per unit)
GM-NAO $962 $652
GM Europe $556 $460
....................................................
See footnotes on page 15.
continues
- 14 -
HIGHLIGHTS - 6 Months Operating Information
(Dollars in Millions Except
Per Share Amounts) Six Months Ended
June 30,
----------------------
1997 1996
--------- ----------
Depreciation and amortization(1)
Depreciation $2,127 $1,989
Amortization of special tools 1,577 1,585
Amortization of intangible
assets 93 63
----- -----
$3,797 $3,637
===== =====
....................................................
Worldwide Payrolls-Continuing
Operations $15,364 $14,972
....................................................
(1) Calculated with financing and insurance operations on an
equity basis.
(2) $1-2/3 par value includes:
Six Months Ended
June 30,
----------------------
1997 1996
--------- ----------
Earnings (loss) attributable to:
Continuing operations $3,658 $2,705
Discontinued operations - (5)
----- -----
Net earnings $3,658 $2,700
===== =====
Earnings (loss) per share attributable to:
Continuing operations $4.98 $3.58
Discontinued operations - (0.01)
----- -----
Net earnings per share $4.98 $3.57
===== =====
(3) Through the June 7, 1996 split-off date.
(4) GMIO includes: Six Months Ended
June 30,
----------------------
1997 1996
--------- ----------
GM Europe $461 $604
Other GMIO $344 $252
(5) Includes Allison Transmission Division, GM Locomotive Group, and
purchase accounting adjustments, as well as certain tax and foreign
exchange items not allocated to any one business sector.
(6) Amounts reported for 1996 have been restated to reflect the methodology
used to calculate Retail Incentives for the 1997 period.
- 15 -
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
1997 1996 1997 1996
------- ------- ------ ------
(Dollars in Millions Except Per Share Amounts)
Net sales and revenues
Manufactured products $39,724 $40,169 $77,164 $74,826
Financial services 3,204 3,125 6,401 6,304
Other income 2,218 1,486 3,822 2,892
------- ------- ------- -------
Total net sales and revenues 45,146 44,780 87,387 84,022
------ ------ ------ ------
Costs and expenses
Cost of sales and other operating charges,
exclusive of items listed below 33,008 33,116 64,038 63,247
Selling, general, and administrative
expenses 3,984 3,578 7,575 6,648
Depreciation and amortization expenses 3,101 3,018 6,166 5,990
Interest expense 1,500 1,414 2,961 2,835
Plant closing expense - - 80 -
Other deductions 320 452 568 866
-------- -------- -------- -------
Total costs and expenses 41,913 41,578 81,388 79,586
------ ------ ------ ------
Income from continuing operations
before income taxes and minority
interests 3,233 3,202 5,999 4,436
Income taxes 1,153 1,098 2,142 1,530
Minority interests 18 (8) 37 (10)
------- --------- ------- ---------
Income from continuing operations 2,098 2,096 3,894 2,896
Income (loss) from discontinued
operations - (209) - 10
------- -------- --------- --------
Net income 2,098 1,887 3,894 2,906
Dividends on preference stocks 20 20 40 40
------- ------- ------- -------
Earnings on common stocks $2,078 $1,867 $3,854 $2,866
===== ===== ===== =====
Earnings attributable to common stocks
$1-2/3 par value from continuing
operations $1,941 $2,001 $3,658 $2,705
Loss from discontinued operations - (15) - (5)
------ ------- --------- -------
Net earnings attributable to
$1-2/3 par value $1,941 $1,986 $3,658 $2,700
====== ====== ====== ======
Income (loss) from discontinued operations
attributable to Class E $ - $(194) $ - $ 15
===== === ===== ====
Net earnings attributable to Class H $137 $75 $196 $151
=== == === ===
Average number of shares of common
stocks outstanding (in millions)
$1-2/3 par value 724 756 736 756
Class E - 479 - 470
Class H 101 98 101 98
Earnings per share attributable to common
stocks
$1-2/3 par value from continuing
operations $2.68 $2.65 $4.98 $3.58
Loss from discontinued operations - (0.02) - (0.01)
------- ---- ------- ----
Net earnings attributable to
$1-2/3 par value $2.68 $2.63 $4.98 $3.57
===== ===== ===== =====
Income (loss) from discontinued operations
attributable to Class E $ - $(0.41) $ - $0.04
======= ==== ======= ====
Net earnings attributable to Class H $1.35 $0.77 $1.94 $1.55
==== ==== ==== ====
Cash dividends per share of common
stocks
$1-2/3 par value $0.50 $0.40 $1.00 $0.80
Class E $ - $0.15 $ - $0.30
Class H $0.25 $0.24 $0.50 $0.48
- 16 -
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
June 30, June 30,
1997 Dec. 31, 1996
(Unaudited) 1996 Unaudited)
(Dollars in Millions)
ASSETS
Cash and cash equivalents $11,674 $14,063 $12,461
Other marketable securities 9,343 8,199 5,903
------- ------- -------
Total cash and marketable securities 21,017 22,262 18,364
Finance receivables - net 60,357 57,550 58,432
Accounts and notes receivable (less allowances) 7,461 6,557 7,249
Inventories (less allowances) 13,528 11,898 11,755
Contracts in process (less advances and
progress payments) 2,264 2,187 2,440
Deferred income taxes 19,291 19,510 20,415
Equipment on operating leases (less accumulated
depreciation) 32,300 30,112 28,944
Property
Real estate, plants, and equipment 69,671 69,770 68,386
Less accumulated depreciation (40,911) (41,298) (41,299)
------ ------ ------
Net real estate, plants, and equipment 28,760 28,472 27,087
Special tools - net 8,893 9,032 8,324
------- ------- -------
Total property 37,653 37,504 35,411
Intangible assets - net 15,029 12,691 10,282
Other assets - net 23,005 21,871 19,605
-------- -------- --------
Total assets $231,905 $222,142 $212,897
======= ======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Accounts payable (principally trade) $14,197 $14,221 $13,231
Notes and loans payable 89,918 85,300 80,756
Deferred income taxes 4,199 3,207 3,424
Postretirement benefits other than pensions 44,007 43,190 42,393
Pensions 7,774 7,599 6,442
Other liabilities and deferred credits 46,661 45,115 45,628
-------- -------- -------
Total liabilities 206,756 198,632 191,874
------- ------- -------
Minority interests 716 92 163
Redeemable preferred stock of subsidiary 402 - -
Stockholders' equity
Preference stocks 1 1 1
Common stocks
$1-2/3 par value (issued, 721,480,932;
756,619,625; and 756,619,913 shares) 1,202 1,261 1,261
Class H (issued, 101,641,092;
100,075,000 and 98,853,477 shares) 10 10 10
Capital surplus (principally additional
paid-in capital) 17,250 19,189 19,080
Retained earnings 9,201 6,137 4,773
------- ------- ------
Subtotal 27,664 26,598 25,125
Minimum pension liability adjustment (3,490) (3,490) (4,742)
Accumulated foreign currency translation
adjustments (642) (113) 44
Net unrealized gains on investments in certain
debt and equity securities 499 423 433
------- ------- --------
Total stockholders' equity 24,031 23,418 20,860
------ ------ ------
Total liabilities and stockholders'
equity $231,905 $222,142 $212,897
======= ======= =======
- 17 -
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended June 30,
1997 1996
(Dollars in Millions)
Net cash provided by operating activities $9,670 $9,583
------ -----
Cash flows from investing activities
Expenditures for property (4,268) (4,313)
Investments in companies, net of cash acquired (1,509) (54)
Investments in other marketable securities
- acquisitions (18,147) (10,177)
Investments in other marketable securities
- liquidations 17,595 9,862
Finance receivables - acquisitions (79,997) (73,871)
Finance receivables - liquidations 63,304 56,095
Proceeds from sales of finance receivables 12,930 18,466
Operating leases - acquisitions (10,649) (9,724)
Operating leases - liquidations 6,227 5,701
Special inter-company payment from EDS - 500
Other 914 798
Net cash used in investing activities (13,600) (6,717)
------ ------
Cash flows from financing activities
Net increase (decrease) in loans payable 3,269 (3,610)
Increase in long-term debt 8,485 10,155
Decrease in long-term debt (7,061) (6,862)
Proceeds from issuing common stocks 281 191
Repurchases of common stocks (2,292) -
Cash dividends paid to stockholders (829) (837)
Proceeds from sale of minority interest in DIRECTV(R) - 138
------ ------
Net cash provided by (used in) financing activities 1,853 (825)
----- ------
Effect of exchange rate changes on cash and
cash equivalents (312) (179)
----- -----
Net cash (used in) provided by continuing operations (2,389) 1,862
Net cash provided by discontinued operations - 103
----- ------
Net (decrease) increase in cash and cash equivalents (2,389) 1,965
Cash and cash equivalents at beginning of the period 14,063 10,496
------ ------
Cash and cash equivalents at end of the period $11,674 $12,461
====== ======
- 18
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
To facilitate analysis, the following sections present the financial
statements for the Corporation's manufacturing, wholesale marketing, defense,
and electronics operations with the financing and insurance operations
(primarily GMAC) reflected on an equity basis. This is the same basis and format
used in years prior to the Corporation's adoption of SFAS No. 94, Consolidation
of All Majority-Owned Subsidiaries.
Consolidated Statements of Income With Financing and Insurance Operations on
an Equity Basis (Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
1997 1996 1997 1996
------------------ ------------------
(Dollars in Millions)
Net sales and revenues $39,741 $40,182 $77,198 $74,854
------ ------ ------ ------
Costs and expenses
Cost of sales and other operating charges,
exclusive of items listed below 32,998 33,127 64,022 63,251
Selling, general, and administrative
expenses 3,290 2,955 6,174 5,403
Depreciation and amortization expenses 1,918 1,849 3,797 3,637
Plant closing expense - - 80 -
------ ------ ------ ------
Total costs and expenses 38,206 37,931 74,073 72,291
------ ------ ------ ------
Operating income 1,535 2,251 3,125 2,563
Other income less income deductions 1,330 583 2,069 1,152
Interest expense (219) (229) (438) (425)
------ ------ ------ ------
Income from continuing operations before
income taxes, minority interests, and earnings
of nonconsolidated affiliates 2,646 2,605 4,756 3,290
Income taxes 909 886 1,639 1,120
------ ------ ----- -----
Income from continuing operations before
minority interests and earnings of
nonconsolidated affiliates 1,737 1,719 3,117 2,170
Minority interests 18 (8) 37 (10)
Earnings of nonconsolidated affiliates 343 385 740 736
------ ------ ------ ------
Income from continuing operations 2,098 2,096 3,894 2,896
Income (loss) from discontinued
operations - (209) - 10
------ ------ ------ ------
Net income $2,098 $1,887 $3,894 $2,906
===== ===== ===== =====
Net profit margin (1) 5.3% 4.7% 5.0% 3.9%
(1) Net profit margin represents net income as a percentage of net sales and
revenues.
- 19 -
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets With Financing and Insurance Operations on an
Equity Basis
(Unaudited)
June 30, Dec. 31, June 30,
1997 1996 1996
---------- --------- --------
(Dollars in Millions)
ASSETS
Cash and cash equivalents $10,855 $13,320 $11,501
Other marketable securities 4,062 3,642 1,538
------- ------- -------
Total cash and marketable securities 14,917 16,962 13,039
Accounts and notes receivable (less allowances)
Trade 5,887 4,909 5,846
Nonconsolidated affiliates 1,478 927 2,413
Inventories (less allowances) 13,528 11,898 11,755
Contracts in process (less advances and
progress payments) 2,264 2,187 2,440
Equipment on operating leases (less accumulated
depreciation) 4,047 3,918 3,747
Deferred income taxes and other 3,161 3,140 5,412
------- ------- -------
Total current assets 45,282 43,941 44,652
Equity in net assets of nonconsolidated
affiliates 10,061 9,855 9,761
Deferred income taxes 19,692 20,075 17,981
Other investments and miscellaneous assets 13,586 11,712 12,225
Property - net 37,211 37,156 35,200
Intangible assets -net 14,864 12,523 10,116
-------- -------- --------
Total assets $140,696 $135,262 $129,935
======= ======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $11,235 $11,527 $10,559
Loans payable 1,281 1,214 1,155
Accrued liabilities and customer deposits 31,431 29,822 29,011
------ ------ ------
Total current liabilities 43,947 42,563 40,725
Long-term debt 5,967 5,192 5,264
Capitalized leases 188 198 175
Postretirement benefits other than pensions41,393 40,578 39,791
Pensions 5,822 5,966 5,349
Other liabilities and deferred income taxes16,385 15,650 15,959
Deferred credits 1,845 1,605 1,649
-------- -------- --------
Total liabilities 115,547 111,752 108,912
------- ------- -------
Minority interests 716 92 163
Redeemable preferred stock of subsidiary 402 - -
Stockholders' equity 24,031 23,418 20,860
-------- -------- --------
Total liabilities and stockholders'
equity $140,696 $135,262 $129,935
======= ======= =======
- 20 -
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows With Financing and Insurance
Operations on an Equity Basis (Unaudited)
Six Months Ended
June 30,
1997 1996
(Dollars in Millions)
Net cash provided by operating activities $7,479 $6,048
----- -----
Cash flows from investing activities
Expenditures for property (4,070) (4,176)
Investments in companies, net of cash acquired (1,509) (54)
Investments in other marketable securities - acquisitions(7,963) (5,261)
Investments in other marketable securities - liquidations 7,543 4,917
Operating leases - acquisitions (2,610) (2,065)
Operating leases - liquidations 1,667 2,826
Special inter-company payment from EDS - 500
Other (69) 202
------- ------
Net cash used in investing activities (7,011) (3,111)
----- -----
Cash flows from financing activities
Net increase (decrease) in loans payable 66 (1,034)
Increase in long-term debt 195 1,898
Decrease in long-term debt (37) (760)
Proceeds from issuing common stocks 281 191
Repurchases of common stocks (2,292) -
Cash dividends paid to stockholders (829) (837)
Proceeds from sale of minority interest in DIRECTV - 138
-------- ----
Net cash used in financing activities (2,616) (404)
----- ----
Effect of exchange rate changes on cash and cash
equivalents (317) (182)
Net cash (used in) provided by continuing operations (2,465) 2,351
Net cash provided by discontinued operations - 103
Net (decrease) increase in cash and cash equivalents (2,465) 2,454
Cash and cash equivalents at beginning of the period 13,320 9,047
Cash and cash equivalents at end of the period $10,855 $11,501
- 21 -
HUGHES ELECTRONICS CORPORATION
NEWS RELEASE
Los Angeles, July 15, 1997 - Hughes Electronics Corporation (Hughes) today
announced second quarter revenues of $4,755.7 million, an increase of 17.4% over
revenues of $4,050.6 million for the same period in 1996. The 1997 second
quarter revenues included a $489.7 million pre-tax gain related to the recently
completed PanAmSat merger.
Second quarter earnings, before the effects of purchase accounting
adjustments related to General Motors' (GM) acquisition of Hughes Aircraft
Company, were $541.4 million, an increase of 76.6% from the $306.6 million
reported in the second quarter of 1996. Earnings per share increased 75.3% to
$1.35 per share from $0.77 per share in 1996. The 1997 second quarter earnings
included a $318.3 million after-tax gain ($0.80 per share) recognized in
connection with the PanAmSat merger.
Operating profit (excluding GM purchase accounting adjustments) was $339.1
million for the second quarter, a 24.7% decline from the $450.4 million reported
during the comparable period in 1996. The operating profit margin on the same
basis was 8.0% for the quarter compared with 11.2% in the second quarter of
1996.
C. Michael Armstrong, Hughes Chairman and Chief Executive Officer, said
the second quarter sales increase was primarily attributable to "continued
DIRECTV(R) subscriber growth in the United States and Latin America, and
increased sales in newer defense information systems and services programs,
which more than offset the decline in Delco Electronics revenues due to
strike-related production losses at two key GM assembly plants." Mr. Armstrong
further stated that earnings, excluding the gain recognized in connection with
the PanAmSat merger, declined principally due to lower operating margins at
Delco Electronics as a result of reduced GM production volumes related to the
work stoppages, and continued price reductions.
Six-Month Financial Review
For the first six months of 1997, revenues were $8,893.8 million, a 14.3%
increase from the $7,782.6 million reported in the first half of 1996. This
growth was primarily the result of the gain recognized in connection with the
PanAmSat merger, DIRECTV subscriber growth, the build-up of newer defense
programs, and increased sales of commercial satellites which more than offset
the first quarter 1996 gain related to the sale of 2.5% of DIRECTV to AT&T.
Operating profit (excluding GM purchase accounting adjustments) for the
first six months of 1997 was $663.9 million compared with $835.6 million in the
same period last year. The operating profit margin on the same basis for the
first six months of 1997 was 7.9% compared with 10.9% in the prior year's
period. These reductions were principally the result of lower margins in the
Automotive Electronics segment mostly due to price reductions, increased DIRECTV
expenses resulting from the change in the amortization period adopted in the
first quarter of 1997 for certain subscriber acquisition costs in the United
States, start-up operating losses related to the DIRECTV service in Latin
America, and lower wireless telecommunications equipment sales and margins.
- 22 -
Earnings (excluding GM purchase accounting adjustments) increased 25.6% to
$776.6 million in the first six months of 1997 compared with $618.3 million
reported during the same period in 1996. Earnings per share increased 25.2% to
$1.94 from $1.55 per share in the first six months of 1996. The earnings
increase was principally due to the gain recognized upon completion of the
PanAmSat merger which more than offset the reduced operating profit and first
quarter 1996 gain from the sale of 2.5% of DIRECTV to AT&T.
Transactions Update
General Motors received a ruling from the Internal Revenue Service on July
14, 1997 that GM's contemplated spin-off of the Hughes defense business would be
tax-free to GM and its stockholders.
The spin-off of the Hughes defense business to holders of GM $1-2/3 par
value, and GM Class H common stocks, and its subsequent merger with Raytheon
Company, are part of a series of related transactions announced by GM and Hughes
in January 1997. The other related elements include the transfer of Delco
Electronics from Hughes to GM's Delphi Automotive Systems, and the
recapitalization of GM Class H common stock into a GM tracking stock linked to
the telecommunications and space businesses of Hughes.
The planned transactions must be approved by holders of GM $1-2/3 par
value and Class H common stocks, among a number of other conditions. In
addition, the merger of the Hughes defense business and Raytheon is subject to
antitrust clearance and approval by Raytheon stockholders. GM expects to solicit
stockholder approval for these transactions during the fourth quarter of 1997.
Segment Financial Review: Second Quarter
TELECOMMUNICATIONS AND SPACE
Revenues for the quarter were $1,618.8 million, an increase of 72.1% over
revenues of $940.8 million reported in last year's second quarter. Excluding the
$489.7 million pre-tax gain related to the PanAmSat merger, revenues increased
20.0%. This growth was primarily due to continued expansion of the DIRECTV
subscriber base in the United States and Latin America, partially offset by
lower sales of wireless telecommunications equipment particularly related to the
BellSouth Cellular Corp. contract. DIRECTV subscribers at June 1997 month-end
totaled 2,639,000 in the United States and 162,000 in Latin America.
Operating profit in the second quarter was $40.2 million compared with
$57.0 million reported in the same period of 1996. This decline was largely the
result of lower wireless telecommunications equipment sales and margins, and
start-up operating losses from the Company's Latin American DIRECTV subsidiary,
Galaxy Latin America. As a result, second quarter operating profit margin
declined to 3.5% compared with 6.0% last year.
- 23 -
AUTOMOTIVE ELECTRONICS
Revenues for the second quarter decreased 6.0% to $1,460.6 million from
revenues of $1,553.8 million for the same period in 1996. The decline reflects a
6.9% decrease in GM vehicles produced in the United States and Canada (excluding
joint ventures) primarily related to work stoppages at two key GM assembly
plants which resulted in an estimated loss of 96,000 units of production. Also
contributing to reduced revenues was a 2.2% decline in Delco-supplied electronic
content in these vehicles from $896 to $876 per vehicle. Partially offsetting
these reductions was a 10.8% increase in international and non-GM sales to $287
million.
Operating profit declined to $134.4 million in the quarter from $236.4
million in the comparable 1996 period. The decline was primarily due to lower
production volumes, price reductions resulting from competitive pricing in
connection with GM's global sourcing initiative, and the impact from continued
international expansion. As a result, second quarter operating profit margin
declined to 9.2% from 15.3% in 1996.
AEROSPACE AND DEFENSE SYSTEMS
Second quarter 1997 revenues were $1,637.6 million, an 8.5% increase over
revenues of $1,509.8 million reported last year. The growth was principally due
to additional revenues resulting from the build-up of several newer programs,
particularly information systems and services programs such as Desktop V, Wide
Area Augmentation System, and Hughes Air Warfare Center, and the acquisition in
March 1997 of the Marine Systems Group of Alliant Techsystems.
Operating profit for the period increased to $162.8 million compared with
$161.4 million for the second quarter of 1996. The 1997 second quarter operating
profit margin was 10.0% compared with 10.7% last year. The reduced operating
profit margin was primarily due to provisions taken on certain air traffic
control and training contracts offset in part by strong performance on several
radar programs.
- 24 -
CONSOLIDATED STATEMENT OF INCOME AND
AVAILABLE SEPARATE CONSOLIDATED NET INCOME
(Dollars in Millions Except Per Share Amounts)
Six Months
Second Quarter Ended June 30,
1997 1996 1997 1996
-------- ------- ------- -------
Revenues
Net sales
Outside customers $2,931.8 $2,531.2 $5,697.5 $4,970.1
General Motors and affiliates 1,333.8 1,501.4 2,696.3 2,676.1
Other income - net 490.1 18.0 500.0 136.4
Total Revenues 4,755.7 4,050.6 8,893.8 7,782.6
Costs and Expenses
Cost of sales and other operating charges,
exclusive of items listed below 3,325.0 3,094.6 6,541.8 5,891.1
Selling, general, and administrative
expenses 436.0 358.0 876.5 658.3
Depreciation and amortization 165.5 129.6 311.6 261.2
Amortization of GM purchase accounting adjustments
related to Hughes Aircraft Company 30.6 30.6 61.2 61.2
Interest expense - net 23.8 1.4 27.7 6.6
Total Costs and Expenses 3,980.9 3,614.2 7,818.8 6,878.4
Income before Income Taxes and
Minority Interests 774.8 436.4 1,075.0 904.2
Income taxes 275.1 172.3 385.3 363.7
Minority interests in net losses of
subsidiaries 11.1 11.9 25.7 16.6
Net Income 510.8 276.0 715.4 557.1
Adjustments to exclude the effect of GM
purchase accounting adjustments
related to Hughes Aircraft Company 30.6 30.6 61.2 61.2
Earnings Used for Computation of Available
Separate Consolidated Net Income $541.4 $306.6 $776.6 $618.3
Available Separate Consolidated Net
Income $136.7 $75.2 $195.8 $151.2
Net Earnings Attributable to General
Motors Class H Common Stock on a Per
Share Basis $1.35 $0.77 $1.94 $1.55
Certain 1996 amounts have been reclassified to conform with the 1997
presentation.
- 25 -
CONSOLIDATED BALANCE SHEET
(Dollars in Millions)
June 30, December 31,
ASSETS 1997 1996
- ------ ------ -----------
Current Assets
Cash and cash equivalents $1,308.5 $1,161.3
Accounts and notes receivable
Trade receivables 1,366.8 1,200.6
General Motors and affiliates 106.2 113.4
Contracts in process 2,264.0 2,186.5
Inventories 1,779.8 1,528.5
Prepaid expenses, including deferred income
taxes 704.9 568.1
Total Current Assets 7,530.2 6,758.4
Property - Net 2,940.9 2,886.6
Telecommunications and Other Equipment - Net 2,289.9 1,133.5
Intangible Assets - Net 5,820.1 3,466.0
Investments and Other Assets 2,564.1 2,235.6
Total Assets $21,145.2 $16,480.1
============ ========== ==========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities
Accounts payable
Outside $983.9 $896.4
General Motors and affiliates 13.4 27.5
Advances on contracts 711.0 868.9
Notes and loans payable 801.4 248.1
Income taxes payable 216.1 132.9
Accrued liabilities 1,799.6 2,025.8
Total Current Liabilities 4,525.4 4,199.6
Long-Term Debt and Capitalized Leases 2,405.8 34.5
Postretirement Benefits Other Than Pensions 1,680.8 1,658.9
Other Liabilities and Deferred Credits 1,788.1 1,386.4
Minority Interests 644.0 20.8
Redeemable Preferred Stock of Subsidiary 401.5 -
Total Stockholder's Equity 9,699.6 9,179.9
- -------------------------- -------- --------
Total Liabilities and Stockholder's Equity $21,145.2 $16,480.1
========================================== ========== ==========
Holders of GM Class H common stock have no direct rights in the equity or assets
of Hughes, but rather have rights in the equity and assets of General Motors
(which includes 100% of the stock of Hughes).
Certain 1996 amounts have been reclassified to conform with the 1997
presentation.
- 26 -
PRO FORMA SELECTED SEGMENT DATA*
(Dollars in Millions)
Six Months
Second Quarter Ended June 30,
1997 1996 1997 1996
---- ---- ---- ----
TELECOMMUNICATIONS AND SPACE
Revenues
Amount $1,618.8 $940.8 $2,628.1 $1,873.6
As a percentage of Hughes Revenues 34.1% 23.2% 29.6% 24.1%
Net Sales $1,138.3 $950.3 $2,157.1 $1,771.3
Operating Profit (1) $40.2 $57.0 $47.3 $131.5
Operating Profit Margin (2) 3.5% 6.0% 2.2% 7.4%
Depreciation and Amortization (3) $66.9 $41.7 $117.2 $87.9
Capital Expenditures (4) $125.0 $165.3 $219.0 $235.6
AUTOMOTIVE ELECTRONICS
Revenues
Amount $1,460.6 $1,553.8 $2,907.1 $2,824.5
As a percentage of Hughes Revenues 30.7% 38.4% 32.7% 36.3%
Net Sales $1,456.9 $1,540.2 $2,890.8 $2,800.4
Operating Profit (1) $134.4 $236.4 $280.0 $395.7
Operating Profit Margin (2) 9.2% 15.3% 9.7% 14.1%
Depreciation and Amortization $55.6 $50.5 $111.8 $99.3
Capital Expenditures $36.5 $52.1 $72.3 $102.4
AEROSPACE AND DEFENSE SYSTEMS
Revenues
Amount $1,637.6 $1,509.8 $3,284.2 $3,022.2
As a percentage of Hughes Revenues 34.4% 37.3% 36.9% 38.8%
Net Sales $1,635.1 $1,512.0 $3,279.9 $3,014.2
Operating Profit (1) $162.8 $161.4 $336.3 $319.3
Operating Profit Margin (2) 10.0% 10.7% 10.3% 10.6%
Depreciation and Amortization (3) $39.5 $33.3 $76.5 $66.0
Capital Expenditures $37.7 $26.6 $68.1 $55.1
CORPORATE AND OTHER
Operating Profit (Loss) (1) $1.7 $(4.4) $0.3 $(10.9)
=========================== ===== ====== ===== =======
Certain 1996 amounts have been reclassified to conform with the 1997
presentation.
* The Consolidated Financial Statements reflect the application of purchase
accounting adjustments related to GM's acquisition of Hughes Aircraft
Company. However, as provided in the General Motors Certificate of
Incorporation, the earnings attributable to GM Class H common stock for
purposes of determining the amount available for the payment of dividends on
GM Class H common stock specifically excludes such adjustments. In order to
provide additional analytical data, the above unaudited pro forma selected
segment data, which excludes the purchase accounting adjustments related to
GM's acquisition of Hughes Aircraft Company, is presented.
(1)Net Sales less Total Costs and Expenses other than Interest Expense.
(2)Operating Profit as a percentage of Net Sales.
(3)Excludes amortization arising from purchase accounting adjustments
related to GM's acquisition of Hughes Aircraft Company amounting to $5.3
million in each of the second quarters and $10.6 million in each of the
six-month periods for the Telecommunications and Space segment and $25.2
million in each of the second quarters and $50.4 million in each of the
six-month periods for the Aerospace and Defense Systems segment.
(4)Includes expenditures related to telecommunications and other equipment
amounting to $72.0 million, $87.9 million, $129.6 million, and $103.9
million, respectively.
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GENERAL MOTORS ACCEPTANCE CORPORATION
NEWS RELEASE
DETROIT -- GMAC (General Motors Acceptance Corporation) reported second-quarter
1997 consolidated net income of $338 million, down 3% from $350 million earned
in the second quarter of 1996, GMAC President John R. Rines announced today.
GMAC's consolidated second quarter results brought net income for the first six
months of 1997 to $710 million, up 8% from $659 million earned in the same
period last year.
In the quarter, net income from financing operations, including the GMAC
Mortgage Group, totaled $296 million, compared with $318 million earned in the
second quarter of 1996. Earnings were lower from one year ago for GMAC's auto
financing operation, primarily due to reduced net financing margins.
GMAC's insurance subsidiary, Motors Insurance Corporation (MIC), generated
net income of $42 million in the second quarter of 1997, compared with $32
million earned one year ago. MIC's earnings increase was primarily due to
favorable claims experience in commercial and extended warranty coverages.
* * *
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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 July 16, 1997
-----------------
By
s/Peter R. Bible
-------------------------------
(Peter R. Bible,
Chief Accounting Officer)
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