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) October 13, 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 October 14, 1997, a news release was issued on the subject of third
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 third quarter earnings of
Hughes Electronics Corporation (Hughes), dated October 13, 1997, and General
Motors Acceptance Corporation (GMAC), dated October 14, 1997, respectively, were
as follows:
GM NEWS RELEASE
GM REPORTS THIRD-QUARTER NET INCOME OF $1.1 BILLION
NORTH AMERICAN OPERATIONS' THIRD-QUARTER FINANCIAL PERFORMANCE BEST EVER
DETROIT -- General Motors Corp. (GM) reported today that net income for
the third quarter of 1997 totaled $1.1 billion, or $1.35 per share of GM $1-2/3
par value common stock.
That compares with $1.0 billion, or $1.23 per share in the third quarter
of 1996, excluding the favorable effect of a nonrecurring adjustment to the
corporation's plant-closing reserve. Including the adjustment, reported net
income in the third quarter of 1996 was $1.3 billion, or $1.57 per share.
Results for the third quarter of 1997 were the best for any third quarter in
GM's history, excluding that 1996 favorable adjustment.
GM's North American Operations (GM-NAO) reported its best-ever
third-quarter financial performance, with net income totaling $423 million. That
compares with $24 million in the third quarter of 1996, excluding the
above-mentioned favorable plant-closing-reserve adjustment. GM-NAO's reported
net income for the third quarter of 1996 was $277 million.
"The continuing improvement at GM-NAO is a great example of what can be
accomplished when you stay focused on reducing costs, and deliver exciting new
products to customers," said GM Chairman, Chief Executive Officer and President
John F. Smith, Jr.
"The corporation's financial strength in the third quarter, which is
typically the most challenging quarter for our industry, is a strong indication
that our strategies are on target to strengthen GM's leadership position in the
industry," Smith said.
"Our record-setting performance for the year to date dramatically
underscores our ongoing progress, with net income and earnings per share the
highest we've ever reported for the nine-month period," Smith said. "Net income
totaled $5.0 billion, or $6.35 per share, during the first nine months of 1997
- -- an all-time record for the period when you back out EDS from prior years."
Following is a snapshot of third-quarter-1997 results from GM's other
automotive sectors:
- Delphi Automotive Systems (Delphi) reported net income of $55 million
in the third quarter of 1997, compared with $238 million in the third
quarter of 1996.
- GM International Operations (GMIO) reported net income of $137 million
in the third quarter of 1997, compared with $323 million in the
prior-year period.
- 2 -
Highlights of third-quarter-1997 results reported by GM's major subsidiaries
included the following:
- General Motors Acceptance Corporation (GMAC) reported net income of
$312 million for the third quarter of 1997, compared with net income of
$307 million in the third quarter of 1996.
- Hughes Electronics Corporation (Hughes) reported third-quarter-1997
earnings of $240 million, compared with earnings of $252 million in the
prior-year period.
(See additional information in sections detailing GM consolidated
financial data, individual automotive sector results, and "Highlights.")
GM CONSOLIDATED FINANCIAL DATA (with financing & insurance operations on an
equity basis)
Consolidated net income in the third quarter of 1997 totaled $1.1 billion,
or $1.35 per share. That compares with $1.0 billion, or $1.23 per share in the
third quarter of 1996, excluding the favorable effect of a nonrecurring
adjustment to the corporation's plant-closing reserve, which totaled $253
million after taxes, or $0.34 per share. The strength of earnings in the third
quarter of 1997 is even more evident considering the fact that earnings in the
comparable period of 1996 were favorably affected by a substantially lower
effective income-tax rate, which resulted in a benefit of $270 million, or $0.35
per share, compared with the third quarter of 1997.
The corporation's pretax income was $1.0 billion in the third quarter of
1997, compared with $918 million in the third quarter of 1996.
The corporation's after-tax net-profit margin -- reported net income as a
percentage of net sales and revenues -- was 2.9 percent in the third quarter of
1997, compared with 3.7 percent in the third quarter of 1996.
Cash and marketable securities totaled $14.6 billion at Sept. 30, 1997,
compared with $14.5 billion at Sept. 30 1996, and $14.9 billion at June 30,
1997.
Strong cash generation from operations made it possible to support
capital-spending programs, adequately fund pension plans, continue to repurchase
shares of GM common stock, and keep an appropriate level of cash reserves.
Cash contributions to U.S. pension plans during the third quarter of 1997
totaled $1.1 billion. During the first nine months of 1997, cash contributions
to the plans totaled $1.5 billion, which is expected to be adequate to maintain
a fully funded status on an economic basis for the balance of the 1997 calendar
year.
In the third quarter of 1997, GM used approximately $850 million to
acquire 13.7 million shares of GM $1-2/3 par value common stock. These purchases
completed a $2.5 billion repurchase program that concluded July 31, and
represent 14 percent of the second $2.5 billion repurchase program announced in
August. A total of $2.8 billion in cash was used to repurchase 49.2 million
shares under the two programs during the first nine months of 1997.
- 3-
Approval by the GM Board of Directors on October 6 of final terms of a
series of related strategic transactions involving the company's Hughes
Electronics subsidiary, "were another significant step to unlock stockholder
value at GM," Smith said.
Net sales and revenues in the third quarter of 1997 totaled $37.1 billion,
compared with $34.6 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' third-quarter-1997 net income totaled $423
million. That compares with $24 million in the third quarter of 1996, excluding
the favorable effect of the previously mentioned plant-closing-reserve
adjustment. Reported net income in the third quarter of 1996 totaled $277
million.
GM-NAO reported pretax income of $608 million in the third quarter of
1997, compared with $238 million in the prior-year period.
GM-NAO's net-profit margin was 1.8 percent in the third quarter of 1997,
compared with 1.2 percent in the prior-year period.
"By continuing to reduce costs and improve efficiencies, GM-NAO scored
significant improvements in financial performance even with relatively
comparable sales volume," Smith said.
The third-quarter-1997 results were favorably affected by continued
improvement in the cost and profitability of GM's new vehicles, and improvements
in material costs, manufacturing efficiencies, and engineering throughput. These
gains were partially offset by higher incentive costs on carryover models in the
intensely competitive U.S. market.
"We're very pleased with the progress demonstrated by the GM-NAO team, but
further improvements are necessary to meet our financial-performance targets,
and that's why we must continue to grow our brands and increase vehicle sales,"
Smith said.
GM vehicle deliveries in the United States in the third quarter of 1997
totaled 1,253,000 units, which resulted in a 31.7-percent share of the U.S.
vehicle market, compared with 1,182,000 units, and a 30.4-percent share in the
third quarter of 1996. (See additional information in "Highlights.")
The higher market share is due in large part to the increased production
of GM's newest products in North America, in particular new midsize passenger
cars and vans. Sales are expected to remain strong in the remainder of the year
as a result of the growing availability of all-new and redesigned 1998-model
vehicles. These models include the Oldsmobile Intrigue, Buick Century and Regal,
Chevrolet Prizm, and Cadillac Seville passenger cars, as well as Chevrolet
Blazer, GMC Jimmy and Oldsmobile Bravada sport-utility vehicles.
- 4 -
DELPHI AUTOMOTIVE SYSTEMS (DELPHI)
Delphi Automotive Systems reported net income of $55 million in the third
quarter of 1997, compared with $238 million in the third quarter of 1996.
Delphi reported pretax income of $30 million in the third quarter of 1997,
compared with pretax income of $187 million in the prior-year period.
Delphi's net-profit margin was 0.9 percent in the third quarter of 1997,
compared with a net-profit margin of 3.7 percent in the prior-year period.
Delphi's third-quarter-1997 results reflect the impact of price reductions
driven by competitive pressures, and accompanying manufacturing start-up costs
associated with a high level of product turnover in line with OEM new-model
introductions. These factors were partially offset by material- and
structural-cost improvements.
"Delphi continues to expand globally," Smith said. "By refining its
product portfolio, developing new business opportunities, and aggressively
growing through new acquisitions and joint ventures, Delphi is creating a
significant global presence."
Delphi's third-quarter-1997 sales to customers outside the GM-NAO vehicle
groups increased more than $67 million compared with the prior-year period and
represented approximately 39 percent of total sales, including all joint
ventures.
GM INTERNATIONAL OPERATIONS (GMIO)
GM International Operations reported net income of $137 million for the
third quarter of 1997, compared with net income of $323 million in the same
period of 1996.
GMIO reported pretax income of $168 million in the third quarter of 1997,
compared with pretax income of $268 million in the third quarter of 1996.
The net-profit margin for GMIO was 1.6 percent in the third quarter of
1997, compared with 3.9 percent in the prior-year period.
"Third-quarter earnings reflect the intensely competitive market pressures
in Europe, the launch of the Saab 9-5, and expenses related to GM's ambitious
capacity expansion programs in key growth markets -- in particular the Latin
American and the Asia-Pacific regions. The unfavorable impact on earnings from
the capacity-expansion programs was offset somewhat by continued strong
performance in Latin America," Smith said.
GM's automotive operations in Europe reported a net loss of $21 million in
the third quarter of 1997, compared with net income of $75 million in the third
quarter last year.
For the remainder of GM International Operations, which includes the Latin
American and Asia and Pacific Operations, net income totaled $158 million in the
third quarter of 1997, compared with $248 million in the prior-year period.
# # #
- 5 -
HIGHLIGHTS - Q3 Financial Results
(Dollars in Millions Except
Per Share Amounts) Three Months Ended
September 30,
----------------------
1997 1996
---------------------------- --------- ----------
Net sales and revenues
Manufactured products $37,103 $34,590
Financial services 3,162 3,179
Other income 1,625 1,309
-------- --------
Total net sales and revenues $41,890 $39,078
======== ========
.....................................................
Total net sales and revenues(1) $37,125 $34,607
Gross profit margin percentage(1) 15.2% 14.4%
.....................................................
Income from continuing operations
before income taxes(1,2) $1,042 $918
Effective income tax rate(1,3) 27.7% 2.9%
.....................................................
Consolidated net income(2) $1,067 $1,271
Plant closing reserve
adjustment(2) - 253
------ ------
Consolidated net income
- excluding special item $1,067 $1,018
====== ======
.....................................................
Net profit margin(1) 2.9% 3.7%
.....................................................
Earnings Attributable to Common Stocks
$1-2/3 par value(2) $964 $1,188
Class H 61 62
.....................................................
Earnings Per Share Attributable to Common Stocks
$1-2/3 par value(2) $1.35 $1.57
Plant closing reserve
adjustment(2) - 0.34
------ ------
Earnings attributable to
$1-2/3 par value - excluding
special item $1.35 $1.23
===== ======
Class H $0.60 $0.63
.....................................................
Cash Dividends Per Share of Common Stocks
$1-2/3 par value $0.50 $0.40
Class H $0.25 $0.24
.....................................................
Book Value Per Share of Common Stocks
Sept. 30 Dec. 31 Sept. 30
1997 1996 1996
-------- ------- --------
$1-2/3 par value $30.17 $27.95 $25.95
Class H $15.09 $13.97 $12.98
....................................................
See footnotes on page 9.
continues
- 6 -
HIGHLIGHTS - Q3 Financial Results
(Dollars in Millions) Three Months Ended
September 30,
----------------------
1997 1996
---------------------------- --------- ----------
Major Business Sector Results
GM-NAO:
Net sales and revenues $24,047 $22,267
------ ------
Pre-tax income $608 $238
Income tax expense (credit) 172 (35)
Equity income (loss) (13) 4
------ ------
GM-NAO net income(2) $423 $277
====== ======
Delphi:
Net sales and revenues $6,044 $6,370
------ ------
Pre-tax income $30 $187
Income tax credit (6) (35)
Minority interests 2 4
Equity income 17 12
------ ------
Delphi net income $55 $238
====== ======
GMIO:
Net sales and revenues $8,641 $8,260
------ ------
Pre-tax income $168 $268
Income tax expense (credit) 47 (35)
Minority interests 18 (3)
Equity income (loss) (2) 23
------ ------
GMIO net income(4) $137 $323
====== ======
GMAC net income $312 $307
Hughes earnings 240 252
Other(5) (100) (126)
------ ------
Consolidated net income $1,067 $1,271
====== ======
.....................................................
See footnotes on page 9.
continues
- 7 -
HIGHLIGHTS - Q3 Operating Information
Three Months Ended
September 30,
----------------------
1997 1996
--------- ----------
Worldwide Wholesale Sales (Units in 000s)
United States: Cars 651 661
Trucks 489 487
------- -------
Total United States 1,140 1,148
Canada and Mexico 141 105
------- -------
Total North America 1,281 1,253
International 845 752
------- -------
Total Worldwide 2,126 2,005
======= =======
....................................................
Vehicle Unit Deliveries (Units in 000s)
United States
Chevrolet - Cars 260 258
- Trucks 380 361
Pontiac 163 134
GMC 118 110
Buick 120 109
Oldsmobile 82 85
Saturn 70 76
Cadillac 52 39
Other 8 10
------ -----
Total United States 1,253 1,182
Canada and Mexico 149 111
------ ------
Total North America 1,402 1,293
------ ------
International
Europe 463 424
Latin America, Africa, and the
Middle East 218 182
Asia and Pacific 161 164
------ ------
Total International 842 770
------ ------
Total Worldwide 2,244 2,063
====== ======
....................................................
Market Share
United States
Cars 33.7% 32.1%
Trucks 29.2% 28.4%
Total 31.7% 30.4%
Western Europe 11.1% 11.2%
Latin America 19.6% 19.1%
Asia and Pacific 5.0% 4.9%
Total Worldwide 16.6% 16.1%
....................................................
U.S. Retail/Fleet Mix
% Fleet Sales - Cars 22.5% 23.3%
% Fleet Sales - Trucks 10.0% 7.5%
Total Vehicles 17.2% 16.8%
....................................................
Days Supply of Inventory -- U.S.
Gross Landed Stock
Cars 69 77
Trucks 90 99
....................................................
Capacity Utilization %
U.S. and Canada (2-shift rated) 89.9% 88.5%
....................................................
Retail Incentives ($ per unit)
GM-NAO $992 $764
GM Europe $637 $556
....................................................
See footnotes on page 9.
continues
- 8 -
HIGHLIGHTS - Q3 Operating Information
(Dollars in Millions)
Three Months Ended
September 30,
----------------------
1997 1996
--------- ----------
Depreciation and amortization(1)
Depreciation $1,081 $1,066
Amortization of special tools 690 692
Amortization of intangible
assets 59 40
----- -----
$1,830 $1,798
===== =====
....................................................
Worldwide Employment at September 30 (in 000s)
GM-NAO 239 245
Delphi 175 180
GMIO 116 110
GMAC 18 17
Hughes 87 84
Other 11 11
--- ---
Total 646 647
=== ===
....................................................
Worldwide Payrolls $7,464 $7,490
....................................................
(1) Calculated with financing and insurance operations on an
equity basis.
(2) The third quarter 1996 results include a nonrecurring favorable
adjustment of $409 million pretax, which is $253 million after-tax, or
$0.34 per share of GM $1-2/3 par value common stock, reflecting a
reduction to the corporation's plant closing reserve.
(3) The low third quarter 1996 effective income tax rate resulted mainly
from the favorable resolution of items related to GM's tax returns for
prior years, overall foreign tax rates that were lower than the U.S.
statutory rate, and reinstatement of research and experimentation
credits for the last half of 1996.
(4) GMIO Includes: Three Months Ended
September 30,
------------------
1997 1996
---- ----
GM Europe $(21) $75
Other GMIO $158 $248
(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.
- 9 -
HIGHLIGHTS - 9 Months Financial Results
(Dollars in Millions Except
Per Share Amounts) Nine Months Ended
September 30,
----------------------
1997 1996
---------------------------- --------- ----------
Net sales and revenues
Manufactured products $114,267 $109,416
Financial services 9,563 9,483
Other income 5,447 4,201
-------- --------
Total net sales and
revenues $129,277 $123,100
======== ========
.....................................................
Total net sales and revenues(1) $114,323 $109,461
Gross profit margin percentage(1) 16.5% 15.1%
.....................................................
Income from continuing operations
before income taxes(1) $5,798 $4,208
Effective income tax rate(1) 33.3% 27.3%
.....................................................
Income from continuing
operations $4,961 $4,167
Income from discontinued
operations(2) - 10
-------- --------
Consolidated net income $4,961 $4,177
======== ========
Net profit margin(1) 4.3% 3.8%
.....................................................
Earnings Attributable to Common Stocks
$1-2/3 par value(3) $4,622 $3,887
Class E(2) - 15
Class H 257 214
.....................................................
Earnings Per Share Attributable to Common Stocks
$1-2/3 par value(3) $6.35 $5.14
Class E(2) - 0.04
Class H 2.54 2.18
.....................................................
Cash Dividends Per Share of Common Stocks
$1-2/3 par value $1.50 $1.20
Class E - 0.30
Class H 0.75 0.72
.....................................................
See footnotes on page 13.
continues
- 10 -
HIGHLIGHTS - 9 Months Financial Results
(Dollars in Millions) Nine Months Ended
September 30,
----------------------
1997 1996
---------------------------- --------- ----------
Major Business Sector Results
GM-NAO:
Net sales and revenues $74,729 $70,879
------ ------
Pre-tax income $2,418 $795
Income tax expense 775 130
Equity income 18 38
------ ------
GM-NAO net income $1,661 $703
====== ======
Delphi:
Net sales and revenues $19,486 $19,865
------ ------
Pre-tax income $735 $838
Income tax expense 236 197
Minority interests 8 -
Equity income 38 31
------ ------
Delphi net income $545 $672
====== ======
GMIO:
Net sales and revenues $26,635 $26,358
------ ------
Pre-tax income $1,368 $1,477
Income tax expense 444 344
Minority interests 28 (9)
Equity income (loss) (10) 55
------ ------
GMIO net income(4) $942 $1,179
====== ======
GMAC net income $1,022 $966
Hughes earnings 1,017 870
Other(5) (226) (223)
------ ------
Income from continuing
operations 4,961 4,167
------ ------
Income from discontinued
operations(3) - 10
------ ------
Consolidated net income $4,961 $4,177
====== ======
See footnotes on page 13.
continues
- 11 -
<PAGE>
HIGHLIGHTS - 9 Months Operating Information
Nine Months Ended
September 30,
----------------------
1997 1996
--------- ----------
Worldwide Wholesale Sales (Units in 000s)
United States: Cars 2,054 2,066
Trucks 1,579 1,522
------- -------
Total United States 3,633 3,588
Canada and Mexico 465 357
------- -------
Total North America 4,098 3,945
International 2,464 2,332
------- -------
Total Worldwide 6,562 6,277
======= =======
....................................................
Vehicle Unit Deliveries (Units in 000s)
United States
Chevrolet - Cars 765 858
- Trucks 1,122 1,127
Pontiac 477 423
GMC 351 345
Buick 325 334
Oldsmobile 228 256
Saturn 199 217
Cadillac 139 125
Other 22 23
------ -----
Total United States 3,628 3,708
Canada and Mexico 432 345
------ ------
Total North America 4,060 4,053
------ ------
International
Europe 1,421 1,404
Latin America, Africa, and
the Middle East 583 510
Asia and Pacific 455 474
------ ------
Total International 2,459 2,388
------ ------
Total Worldwide 6,519 6,441
====== ======
....................................................
Market Share
United States
Cars 32.5% 33.1%
Trucks 28.8% 28.9%
Total 30.8% 31.3%
Western Europe 11.3% 11.8%
Latin America 19.1% 19.5%
Asia and Pacific 4.5% 4.6%
Total Worldwide 16.0% 16.4%
....................................................
U.S. Retail/Fleet Mix
% Fleet Sales - Cars 25.1% 25.7%
% Fleet Sales - Trucks 13.1% 10.8%
Total Vehicles 20.0% 19.6 %
....................................................
Capacity Utilization %
U.S. and Canada (2-shift rated) 92.5% 83.2%
....................................................
Retail Incentives ($ per unit)
GM-NAO $971 $688
GM Europe $583 $488
....................................................
See footnotes on page 13.
continues
- 12 -
HIGHLIGHTS - 9 Months Operating Information
(Dollars in Millions Except
Per Share Amounts) Nine Months Ended
September 30,
----------------------
1997 1996
--------- ----------
Depreciation and amortization(1)
Depreciation $3,208 $3,055
Amortization of special tools 2,267 2,277
Amortization of intangible
assets 152 103
----- -----
$5,627 $5,435
===== =====
....................................................
Worldwide Payrolls-Continuing
Operations $22,828 $22,462
....................................................
(1) Calculated with financing and insurance operations on an
equity basis.
(2) Through the June 7, 1996 split-off date of EDS.
(3) $1-2/3 par value includes:
Nine Months Ended
September 30,
----------------------
1997 1996
--------- ----------
Earnings (loss) attributable to:
Continuing operations $4,622 $3,892
Discontinued operations - (5)
----- -----
Net earnings $4,622 $3,887
===== =====
Earnings (loss) per share attributable to:
Continuing operations $6.35 $5.15
Discontinued operations - (0.01)
----- -----
Net earnings per share $6.35 $5.14
===== =====
(4) GMIO includes: Nine Months Ended
September 30,
----------------------
1997 1996
--------- ----------
GM Europe $440 $679
Other GMIO $502 $500
(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.
- 13 -
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
1997 1996 1997 1996
------------------ -------------------
(Dollars in Millions Except Per Share Amounts)
Net sales and revenues
Manufactured products $37,103 $34,590 $114,267 $109,416
Financial services 3,162 3,179 9,563 9,483
Other income 1,625 1,309 5,447 4,201
------- ------- -------- --------
Total net sales and revenues 41,890 39,078 129,277 123,100
------ ------ ------- -------
Costs and expenses
Cost of sales and other operating charges,
exclusive of items listed below 31,484 29,624 95,522 92,871
Selling, general, and administrative
expenses 3,884 3,632 11,459 10,280
Depreciation and amortization expenses 3,030 2,927 9,196 8,917
Interest expense 1,508 1,423 4,469 4,258
Plant closing expense (adjustment) - (409) 80 (409)
Other deductions 388 383 956 1,249
------- ------- --------- --------
Total costs and expenses 40,294 37,580 121,682 117,166
------ ------ ------- -------
Income from continuing operations
before income taxes and minority
interests 1,596 1,498 7,595 5,934
Income taxes 533 258 2,675 1,788
Minority interests 4 31 41 21
------- ------ ------- ------
Income from continuing operations 1,067 1,271 4,961 4,167
Income from discontinued operations - - - 10
-------- -------- --------- ------
Net income 1,067 1,271 4,961 4,177
Premium on exchange of preference stocks 26 - 26 -
Dividends on preference stocks 16 21 56 61
------ ------ ------- ------
Earnings on common stocks $1,025 $1,250 $4,879 $4,116
===== ===== ===== =====
Earnings attributable to common stocks
$1-2/3 par value from continuing
operations $964 $1,188 $4,622 $3,892
Loss from discontinued operations - - - (5)
----- -------- ------- --------
Net earnings attributable to
$1-2/3 par value $964 $1,188 $4,622 $3,887
=== ===== ===== =====
Income from discontinued operations
attributable to Class E $ - $ - $ - $15
==== ==== ===== ==
Net earnings attributable to Class H $61 $62 $257 $214
== == === ===
Average number of shares of common
stocks outstanding (in millions)
$1-2/3 par value 713 756 728 756
Class E - - - 470
Class H 102 99 101 98
Earnings per share attributable to
common stocks
$1-2/3 par value from continuing
operations $1.35 $1.57 $6.35 $5.15
Loss from discontinued operations - - - (0.01)
------ ------ ------- ----
Net earnings attributable to
$1-2/3 par value $1.35 $1.57 $6.35 $5.14
==== ==== ==== ====
Income from discontinued operations
attributable to Class E $ - $ - $ - $0.04
====== ====== ====== ====
Net earnings attributable to Class H $0.60 $0.63 $2.54 $2.18
==== ==== ==== ====
Cash dividends per share of common
stocks
$1-2/3 par value $0.50 $0.40 $1.50 $1.20
Class E $ - $ - $ - $0.30
Class H $0.25 $0.24 $0.75 $0.72
- 14 -
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
Sept. 30, Sept. 30,
1997 Dec. 31, 1996
(Unaudited) 1996 (Unaudited)
(Dollars in Millions)
ASSETS
Cash and cash equivalents $10,406 $14,063 $13,399
Other marketable securities 10,490 8,199 6,421
------ ------- -------
Total cash and marketable securities 20,896 22,262 19,820
Finance receivables - net 58,966 57,550 56,495
Accounts and notes receivable (less allowances) 7,223 6,557 7,379
Inventories (less allowances) 12,820 11,898 12,129
Contracts in process (less advances and
progress payments) 2,169 2,187 2,159
Deferred income taxes 19,588 19,510 20,848
Equipment on operating leases (less accumulated
depreciation) 32,964 30,112 30,308
Property
Real estate, plants, and equipment 70,679 69,770 69,127
Less accumulated depreciation (41,287) (41,298) (41,508)
------ ------ ------
Net real estate, plants, and equipment 29,392 28,472 27,619
Special tools - net 9,128 9,032 8,556
------- ------- -------
Total property 38,520 37,504 36,175
Intangible assets - net 14,979 12,691 10,253
Other assets - net 25,010 21,871 20,323
-------- -------- --------
Total assets $233,135 $222,142 $215,889
======= ======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Accounts payable (principally trade) $15,021 $14,221 $13,206
Notes and loans payable 90,914 85,300 81,328
Deferred income taxes 4,712 3,207 3,521
Postretirement benefits other than pensions 44,427 43,190 42,775
Pensions 7,100 7,599 6,691
Other liabilities and deferred credits 46,426 45,115 46,424
-------- -------- -------
Total liabilities 208,600 198,632 193,945
------- ------- -------
Minority interests 735 92 144
General Motors - obligated mandatorily
redeemable preferred securities of
subsidiary trusts holding solely
junior subordinated debentures of
General Motors
Series D 79 - -
Series G 143 - -
Stockholders' equity
Preference stocks 1 1 1
Common stocks
$1-2/3 par value (issued, 707,772,699;
756,619,625; and 756,622,676 shares) 1,180 1,261 1,261
Class H (issued, 102,648,686;
100,075,000 and 99,197,196 shares) 10 10 10
Capital surplus (principally additional
paid-in capital) 16,211 19,189 19,134
Retained earnings 9,846 6,137 5,697
------- ------- ------
Subtotal 27,248 26,598 26,103
Minimum pension liability adjustment (3,490) (3,490) (4,742)
Accumulated foreign currency translation
adjustments (727) (113) 50
Net unrealized gains on investments in
certain debt and equity securities 547 423 389
-------- -------- --------
Total stockholders' equity 23,578 23,418 21,800
-------- ------ ------
Total liabilities and stockholders'
equity $233,135 $222,142 $215,889
======= ======= =======
- 15 -
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended Sept.30,
1997 1996
(Dollars in Millions)
Net cash provided by operating activities $13,123 $14,195
------ ------
Cash flows from investing activities
Expenditures for property (6,958) (6,764)
Investments in companies, net of cash acquired (1,788) (126)
Investments in other marketable securities
- acquisitions (24,790) (16,933)
Investments in other marketable securities
- liquidations 23,547 16,081
Finance receivables - acquisitions (128,300) (118,787)
Finance receivables - liquidations 105,401 92,875
Proceeds from sales of finance receivables 20,512 28,675
Operating leases - acquisitions (16,206) (14,502)
Operating leases - liquidations 10,138 7,745
Special inter-company payment from EDS - 500
Other 721 577
------ ------
Net cash used in investing activities (17,723) (10,659)
------ -------
Cash flows from financing activities
Net increase (decrease) in loans payable 3,162 (3,760)
Increase in long-term debt 11,658 13,497
Decrease in long-term debt (9,340) (9,469)
Proceeds from issuing common stocks 471 211
Repurchases of common stocks (3,353) -
Cash dividends paid to stockholders (1,252) (1,183)
Proceeds from sale of minority interest in
DIRECTV(R) - 138
------ ------
Net cash provided by (used in) financing activities 1,346 (566)
----- ------
Effect of exchange rate changes on cash
and cash equivalents (403) (170)
----- -----
Net cash (used in) provided by continuing
operations (3,657) 2,800
Net cash provided by discontinued operations - 103
--------- ------
Net (decrease) increase in cash and
cash equivalents (3,657) 2,903
Cash and cash equivalents at beginning
of the period 14,063 10,496
------ ------
Cash and cash equivalents at end of the period $10,406 $13,399
====== ======
- 16 -
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
To facilitate analysis, the following financial statements present 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 Nine Months Ended
September 30, September 30,
1997 1996 1997 1996
------------------ ------------------
(Dollars in Millions)
Net sales and revenues $37,125 $34,607 $114,323 $109,461
------ ------ ------- -------
Costs and expenses
Cost of sales and other operating charges,
exclusive of items listed below 31,484 29,627 95,506 92,878
Selling, general, and administrative
expenses 3,157 2,850 9,331 8,253
Depreciation and amortization
expenses 1,830 1,798 5,627 5,435
Plant closing expense (adjustment) - (409) 80 (409)
---------- ------- ---------- ---------
Total costs and expenses 36,471 33,866 110,544 106,157
------ ------ ------- -------
Operating income 654 741 3,779 3,304
Other income less income deductions 613 416 2,682 1,568
Interest expense (225) (239) (663) (664)
------ ------ ------ ------
Income from continuing operations before
income taxes, minority interests,
and earnings of nonconsolidated
affiliates 1,042 918 5,798 4,208
Income taxes 289 27 1,928 1,147
------ ------- ----- -----
Income from continuing operations before
minority interests and earnings of
nonconsolidated affiliates 753 891 3,870 3,061
Minority interests 13 31 50 21
Earnings of nonconsolidated affiliates 301 349 1,041 1,085
------ ------ ----- -----
Income from continuing operations 1,067 1,271 4,961 4,167
Income from discontinued operations - - - 10
-------- -------- --------- -------
Net income $1,067 $1,271 $4,961 $4,177
===== ===== ===== =====
Net profit margin (1) 2.9% 3.7% 4.3% 3.8%
(1) Net profit margin represents net income as a percentage of net sales and
revenues.
- 17 -
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets With Financing and Insurance Operations on an
Equity Basis (Unaudited)
Sept. 30, Dec. 31, Sept. 30,
1997 1996 1996
------------------------------------
(Dollars in Millions)
ASSETS
Cash and cash equivalents $9,930 $13,320 $12,475
Other marketable securities 4,669 3,642 2,068
------ ------- -------
Total cash and marketable securities 14,599 16,962 14,543
Accounts and notes receivable (less allowances)
Trade 5,627 4,909 6,118
Nonconsolidated affiliates 1,722 927 1,452
Inventories (less allowances) 12,820 11,898 12,129
Contracts in process (less advances and
progress payments) 2,169 2,187 2,159
Equipment on operating leases (less
accumulated depreciation) 3,854 3,918 4,081
Deferred income taxes and other 2,820 3,140 5,374
------- ------- -------
Total current assets 43,611 43,941 45,856
Equity in net assets of nonconsolidated
affiliates 10,313 9,855 9,806
Deferred income taxes 20,341 20,075 18,460
Other investments and miscellaneous
assets 13,926 11,712 11,728
Property - net 38,010 37,156 35,888
Intangible assets -net 14,803 12,523 10,080
-------- -------- --------
Total assets $141,004 $135,262 $131,818
======= ======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $11,871 $11,527 $10,679
Loans payable 1,766 1,214 1,202
Accrued liabilities and customer deposits 32,440 29,822 30,193
------ ------ ------
Total current liabilities 46,077 42,563 42,074
Long-term debt 6,002 5,192 5,256
Capitalized leases 184 198 163
Postretirement benefits other than
pensions 41,820 40,578 40,184
Pensions 4,275 5,966 5,104
Other liabilities and deferred
income taxes 16,444 15,650 15,237
Deferred credits 1,697 1,605 1,856
-------- -------- --------
Total liabilities 116,499 111,752 109,874
------- ------- -------
Minority interests 705 92 144
General Motors - obligated mandatorily
redeemable preferred securities
of subsidiary trusts holding solely
junior subordinated debentures of
General Motors
Series D 79 - -
Series G 143 - -
Stockholders' equity 23,578 23,418 21,800
-------- -------- --------
Total liabilities and
stockholders' equity $141,004 $135,262 $131,818
======= ======= =======
- 18 -
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows With Financing and Insurance
Operations on an Equity Basis (Unaudited)
Nine Months Ended
September 30,
1997 1996
-------------------
(Dollars in Millions)
Net cash provided by operating activities $11,254 $11,053
------ ------
Cash flows from investing activities
Expenditures for property (6,648) (6,518)
Investments in companies, net of cash acquired (1,788) (126)
Investments in other marketable securities
- acquisitions (11,083) (8,226)
Investments in other marketable securities
- liquidations 10,056 7,352
Operating leases - acquisitions (3,963) (3,342)
Operating leases - liquidations 2,981 3,142
Special inter-company payment from EDS - 500
Other - 352
------- ------
Net cash used in investing activities (10,445) (6,866)
------ -----
Cash flows from financing activities
Net increase (decrease) in loans payable 552 (985)
Increase in long-term debt 358 1,918
Decrease in long-term debt (568) (788)
Proceeds from issuing common stocks 471 211
Repurchases of common stocks (3,353) -
Cash dividends paid to stockholders (1,252) (1,183)
Proceeds from sale of minority interest in DIRECTV - 138
------ -----
Net cash used in financing activities (3,792) (689)
----- ----
Effect of exchange rate changes on cash and
cash equivalents (407) (173)
----- -----
Net cash (used in) provided by continuing operations (3,390) 3,325
----- -----
Net cash provided by discontinued operations - 103
----- -----
Net (decrease) increase in cash and cash equivalents (3,390) 3,428
Cash and cash equivalents at beginning of the period 13,320 9,047
------ ------
Cash and cash equivalents at end of the period $9,930 $12,475
====== ======
- 19 -
HUGHES NEWS RELEASE
Los Angeles, October 13, 1997 - Hughes Electronics Corporation (Hughes)
today announced third quarter revenues of $4,112.7 million, an increase of 8.0%
over revenues of $3,807.8 million for the same period in 1996.
Third quarter earnings, before the effects of purchase accounting
adjustments related to General Motors' (GM) acquisition of Hughes Aircraft
Company, were $240.2 million, a decrease of 4.7% from the $252.0 million
reported in the third quarter of 1996. Earnings per share decreased 4.8% to
$0.60 per share from $0.63 per share in 1996.
Operating profit (excluding GM purchase accounting adjustments) was $375.8
million for the third quarter, a 3.5% decline from the $389.3 million reported
during the comparable period in 1996. The operating profit margin on the same
basis was 9.1% for the quarter compared with 10.2% in the third quarter of 1996.
C. Michael Armstrong, Hughes Chairman and Chief Executive Officer, said,
"Third quarter financial performance was highlighted by record sales and
operating profit in the Telecommunications and Space segment. Hughes' revenue
growth was mostly due to increased sales resulting from continued DIRECTV(R)
subscriber growth in the United States and Latin America, the 1997 PanAmSat
merger, and build-up of defense information systems and services programs, which
more than offset the decline in Delco Electronics revenues resulting from
reduced electronic content per GM vehicle." Mr. Armstrong further stated that
the improved operating profit in the Telecommunications and Space segment
resulted principally from DIRECTV subscriber growth and the PanAmSat merger, but
that overall Hughes earnings were negatively impacted by lower operating margins
at Delco Electronics caused by continued price reductions.
Nine-Month Financial Review
For the first nine months of 1997, revenues were $13,006.5 million, a
12.2% increase from the $11,590.4 million reported in the first nine months of
1996. Included in 1997 was a $489.7 million pre-tax gain related to the PanAmSat
merger, while 1996 included a $120.3 million pre-tax gain recognized from the
sale of 2.5% of DIRECTV to AT&T. Excluding these one-time gains, revenues
increased 9.1% to $12,516.8 million from $11,470.1 million in the same 1996
period. This growth was primarily the result of increased revenues associated
with the PanAmSat merger, DIRECTV subscriber growth, the build-up of newer
defense programs, and increased sales of commercial satellites.
Operating profit (excluding GM purchase accounting adjustments) for the
first nine months of 1997 was $1,039.7 million compared with $1,224.9 million in
the same period last year. The operating profit margin on the same basis for the
first nine months of 1997 was 8.3% compared with 10.7% in the prior year's
period. This reduction was principally the result of lower margins in the
Automotive Electronics segment mostly due to price reductions, start-up
operating losses related to the DIRECTV service in Latin America, and lower
wireless telecommunications equipment sales and margins.
- 20 -
Earnings (excluding GM purchase accounting adjustments) increased 16.8% to
$1,016.8 million in the first nine months of 1997 compared with $870.3 million
reported during the same period in 1996. Earnings per share increased 16.5% to
$2.54 from $2.18 per share in the first nine months of 1996. Excluding the
one-time gains associated with the PanAmSat merger and the sale of 2.5% of
DIRECTV to AT&T in 1996, earnings decreased 12.6% to $698.5 million from $798.7
million in 1996 and earnings per share decreased 12.5% to $1.75 from $2.00,
primarily due to lower operating profits.
Transactions Update
On October 6, 1997 the General Motors Board of Directors approved final
terms of a series of related strategic transactions involving Hughes. A press
release issued that day discussed, in particular, the spin-off of Hughes Defense
from Hughes and subsequent merger with Raytheon Company, the transfer of Delco
Electronics from Hughes to GM's Delphi Automotive Systems, and the
recapitalization of GM Class H common stock into a new stock tracking the
telecommunications and space business of Hughes.
Segment Financial Review: Third Quarter
TELECOMMUNICATIONS AND SPACE
Revenues for the third quarter were $1,242.2 million, an increase of 25.7%
over revenues of $988.5 million reported in last year's third quarter. This
growth was primarily due to continued expansion of the DIRECTV subscriber base
in the United States and Latin America and increased revenues related to the
PanAmSat merger. DIRECTV subscribers at September 30, 1997 month-end totaled
2,892,000 in the United States and 233,000 in Latin America.
Operating profit in the third quarter increased to $115.0 million compared
with $62.0 million reported in the same period of 1996. This increase was
largely the result of improved performance in the domestic DIRECTV business and
operating profit generated by PanAmSat. Consequently, the third quarter
operating profit margin increased to 9.2% compared with 6.2% last year.
AUTOMOTIVE ELECTRONICS
Revenues for the third quarter decreased 5.1% to $1,209.5 million from
revenues of $1,274.6 million for the same period in 1996. The decline reflects a
9.3% decrease in Delco-supplied electronic content in GM vehicles, from $900 to
$816 per vehicle, which more than offset a 9.8% increase in international and
non-GM sales from $236 million to $259 million.
Operating profit declined to $95.9 million in the quarter from $166.3
million in the comparable 1996 period. The decline was primarily due to price
reductions resulting from competitive pricing in connection with GM's global
sourcing initiative, and the impact from continued international expansion. As a
result, third quarter operating profit margin declined to 8.0% from 13.1% in
1996.
- 21 -
AEROSPACE AND DEFENSE SYSTEMS
Third quarter 1997 revenues were $1,628.4 million, a 6.8% increase over
revenues of $1,524.5 million reported last year. The growth was principally due
to the build-up of several newer programs, particularly information systems and
services programs such as Hughes Air Warfare Center, Desktop V, and Wide Area
Augmentation System, and the acquisition of the Marine Systems Group of Alliant
Techsystems in March 1997.
Operating profit for the period decreased slightly to $165.7 million
compared with $167.1 million for the third quarter of 1996. The 1997 third
quarter operating profit margin was 10.2% compared with 10.9% last year. The
reduced operating profit margin was primarily due to a continued sales mix shift
toward information systems and services programs.
- 22 -
CONSOLIDATED STATEMENT OF INCOME AND
AVAILABLE SEPARATE CONSOLIDATED NET INCOME
(Dollars in Millions Except Per Share Amounts)
Nine Months
Third Quarter Ended September 30,
------------- ------------------
1997 1996 1997 1996
---- ---- ---- -----
Revenues
Net sales
Outside customers $3,040.3 $2,590.8 $8,737.8 $7,560.9
General Motors and affiliates 1,077.2 1,219.3 3,773.5 3,895.4
Other (loss) income - net (4.8) (2.3) 495.2 134.1
----- ----- ----- ------
Total Revenues 4,112.7 3,807.8 13,006.5 11,590.4
------- ------- -------- --------
Costs and Expenses
Cost of sales and other operating charges,
exclusive of items listed below 3,126.2 2,890.5 9,668.0 8,781.6
Selling, general, and administrative
expenses 435.9 383.6 1,312.4 1,041.9
Depreciation and amortization 179.6 146.7 491.2 407.9
Amortization of GM purchase accounting
adjustments related to
Hughes Aircraft Company 30.5 30.5 91.7 91.7
Interest expense - net 14.0 5.1 41.7 11.7
----- ---- ----- -----
Total Costs and Expenses 3,786.2 3,456.4 11,605.0 10,334.8
------- ------- -------- --------
Income before Income Taxes and
Minority Interests 326.5 351.4 1,401.5 1,255.6
Income taxes 112.8 144.7 498.1 508.4
Minority interests in net (income)
losses of subsidiaries (4.0) 14.8 21.7 31.4
Net Income 209.7 221.5 925.1 778.6
Adjustments to exclude the effect
of GM purchase accounting
adjustments related to
Hughes Aircraft Company 30.5 30.5 91.7 91.7
------ ------ ------ ------
Earnings Used for Computation of Available
Separate Consolidated Net Income $240.2 $252.0 $1,016.8 $870.3
===== ===== ======= =====
Available Separate Consolidated
Net Income $61.3 $62.3 $257.1 $213.5
==== ==== ===== =====
Net Earnings Attributable to General
Motors Class H Common Stock on a
Per Share Basis $0.60 $0.63 $2.54 $2.18
==== ==== ==== ====
Certain 1996 amounts have been reclassified to conform with the 1997
presentation.
- 23 -
CONSOLIDATED BALANCE SHEET
(Dollars in Millions)
September 30, December 31,
ASSETS 1997 1996
------------- -----------
Current Assets
Cash and cash equivalents $1,443.1 $1,161.3
Accounts and notes receivable
Trade receivables 1,303.9 1,200.6
General Motors and affiliates 126.1 113.4
Contracts in process 2,169.4 2,186.5
Inventories 1,761.7 1,528.5
Prepaid expenses, including deferred income taxes 694.6 568.1
- ------------------------------------------------- -------- -------
Total Current Assets 7,498.8 6,758.4
Property - Net 2,934.0 2,886.6
Telecommunications and Other Equipment - Net 2,586.4 1,133.5
Intangible Assets - Net 5,757.8 3,466.0
Investments and Other Assets 2,436.1 2,235.6
Total Assets $21,213.1 $16,480.1
- ------------ ---------- ----------
LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities
Accounts payable
Outside $982.3 $896.4
General Motors and affiliates 13.0 27.5
Advances on contracts 753.3 868.9
Notes and loans payable 687.7 248.1
Income taxes payable 218.8 132.9
Accrued liabilities 1,706.2 2,025.8
- ------------------- ------- -------
Total Current Liabilities 4,361.3 4,199.6
Long-Term Debt and Capitalized Leases 2,836.1 34.5
Postretirement Benefits Other Than Pensions 1,692.5 1,658.9
Other Liabilities and Deferred Credits 1,873.8 1,386.4
Minority Interests 639.4 20.8
Total Stockholder's Equity 9,810.0 9,179.9
- -------------------------- -------- --------
Total Liabilities and Stockholder's Equity $21,213.1 $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.
- 24 -
PRO FORMA SELECTED SEGMENT DATA*
(Dollars in Millions)
Nine Months
Third Quarter Ended September 30,
1997 1996 1997 1996
---- ---- ---- ------
TELECOMMUNICATIONS AND SPACE
Revenues
Amount $1,242.2 $988.5 $3,870.3 $2,862.1
As a percentage of Hughes Revenues 30.2% 26.0% 29.8% 24.7%
Net Sales $1,249.9 $993.9 $3,407.0 $2,765.2
Operating Profit (1) $115.0 $62.0 $162.3 $193.5
Operating Profit Margin (2) 9.2% 6.2% 4.8% 7.0%
Depreciation and Amortization (3) $79.0 $53.9 $196.2 $141.8
Capital Expenditures (4) $332.9 $109.3 $551.9 $334.9
- ------------------------ ------- ------- ------- -------
AUTOMOTIVE ELECTRONICS
Revenues
Amount $1,209.5 $1,274.6 $4,116.6 $4,099.1
As a percentage of Hughes Revenues 29.4% 33.5% 31.6% 35.4%
Net Sales $1,205.1 $1,267.6 $4,095.9 $4,068.0
Operating Profit (1) $95.9 $166.3 $375.9 $562.0
Operating Profit Margin (2) 8.0% 13.1% 9.2% 13.8%
Depreciation and Amortization $58.1 $48.2 $169.9 $147.5
Capital Expenditures $36.9 $53.5 $109.2 $155.9
- -------------------- ------ ------ ------- -------
AEROSPACE AND DEFENSE SYSTEMS
Revenues
Amount $1,628.4 $1,524.5 $4,912.6 $4,546.7
As a percentage of Hughes Revenues 39.6% 40.0% 37.8% 39.2%
Net Sales $1,624.8 $1,529.3 $4,904.7 $4,543.5
Operating Profit (1) $165.7 $167.1 $502.0 $486.4
Operating Profit Margin (2) 10.2% 10.9% 10.2% 10.7%
Depreciation and Amortization (3) $39.5 $43.9 $116.0 $109.9
Capital Expenditures $28.5 $50.6 $96.6 $105.7
- -------------------- ------ ------ ------ --------
CORPORATE AND OTHER
Operating Loss (1) $(0.8) $(6.1) $(0.5) $(17.0)
================== ====== ====== ====== =======
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 third quarters and $15.9 million in each of the
nine-month periods for the Telecommunications and Space segment and $25.2
million in each of the third quarters and $75.6 million in each of the
nine-month periods for the Aerospace and Defense Systems segment.
(4)Includes expenditures related to telecommunications and other equipment
amounting to $280.6 million, $38.7 million, $410.2 million, and $142.6
million, respectively.
- 25 -
GMAC ANNOUNCES THIRD-QUARTER EARNINGS
DETROIT -- GMAC (General Motors Acceptance Corporation) reported third
quarter 1997 consolidated net income of $312 million, up 2% from $307 million
earned in the third quarter of 1996, GMAC President John R. Rines announced
today.
In the third quarter of 1997, net income from financing operations, including
the GMAC Mortgage Group, totaled $262 million, up from $252 million earned in
1996. The earnings increase primarily reflects growth in mortgage financing
operations. Earnings from auto financing operations were flat, with reduced net
financing margins offset by reduced operating expenses.
Motors Insurance Corporation, GMAC's insurance subsidiary, generated net
income of $50 million in the quarter, down 9% from the same period last year.
The earnings decrease is due to lower capital gains partially offset by
favorable underwriting results, mostly from automobile insurance and extended
warranty coverages.
GMAC's consolidated third quarter results brought net income for the first
nine months of 1997 to $1,022 million, up 6% from $966 million earned in the
same period of 1996.
* * *
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 October 14, 1997
-----------------
By
s/Peter R. Bible
-------------------------------
(Peter R. Bible,
Chief Accounting Officer)
- 26 -
