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) April 16, 1998
----------------
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 April 17, 1998, a news release was issued on the subject of first
quarter consolidated earnings for 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 first quarter earnings of Hughes Electronics
Corporation (Hughes) dated April 16, 1998 and General Motors Acceptance
Corporation (GMAC) dated April 17, 1998, respectively, were as follows:
GM NEWS RELEASE
GM REPORTS FIRST-QUARTER NET INCOME OF $1.6 BILLION
NORTH AMERICAN OPERATIONS' QUARTERLY PERFORMANCE BEST EVER
DETROIT -- General Motors Corp. (GM) reported today that net income for
the first quarter of 1998 totaled $1.6 billion, or $2.31 per share of GM $1-2/3
par value common stock.
That compares with $1.7 billion, or $2.23 per share, for the comparable
period in 1997, adjusted to reflect the effect of the Hughes Transactions, which
took place in December of 1997. Reported first-quarter-1997 net income totaled
$1.8 billion, or $2.30 per share. All earnings-per-share amounts are basic (see
Highlights for diluted earnings-per-share amounts).
Consolidated net sales and revenues in the first quarter of 1998 totaled
$41.6 billion, compared with $40.5 billion in the same period last year,
adjusted for the effect of the Hughes Transactions.
GM's North American Operations (GM-NAO) reported net income totaling $826
million in the first quarter of 1998 -- the best ever for any quarter, and an
improvement of $62 million over the same period last year when net income
totaled $764 million, the previous quarterly record.
"GM-NAO's continued focus on reducing costs, streamlining processes and
delivering exciting new products to customers is more important than ever in
this fierce competitive environment," said GM Chairman, Chief Executive Officer
and President John F. Smith, Jr.
"Our continued aggressive cost-cutting initiatives, and increased sales of
higher-profit trucks drove improvements in GM-NAO's financial performance in the
first quarter," Smith said. "We're on track to meet our $4 billion corporate
cost-reduction goal for 1998, with first-quarter-1998 cost reductions totaling
slightly more than $1.2 billion. We must continue to cut costs in order to
improve our competitive position because price and incentive pressures are
unrelenting."
Corporate and sector data in the remainder of this release reflect
adjustments to 1997 reported results to acknowledge changes to GM's
organizational structure resulting from the conclusion of the Hughes
Transactions in December of 1997. Delphi results include Delco Electronics,
while the 1997 results from Hughes' defense business has been eliminated. In
addition, 1997 data has been adjusted to exclude special items (see Highlights
and Special Items).
- 2 -
Following is a summary of results from the GM business sectors in the
first quarter of 1998:
- GM North American Operations income totaled $826 million in the first
quarter of 1998, compared with $764 million in the first quarter of
1997.
- Delphi Automotive Systems (Delphi) reported income of $263 million in
the first quarter of 1998, compared with $314 million in the same
quarter of 1997.
- GM International Operations (GMIO) reported income of $160 million in
the first quarter of 1998, compared with $262 million in the prior-year
period.
Highlights of first-quarter-1998 results reported by GM's major
subsidiaries included the following:
- General Motors Acceptance Corporation (GMAC) reported income of $349
million for the first quarter of 1998, compared with income of $372
million in the first quarter of 1997.
- Hughes Electronics Corporation (Hughes) reported first-quarter-1998
earnings of $54 million, compared with earnings of $24 million in the
prior-year period.
GM CONSOLIDATED FINANCIAL DATA (with financing & insurance operations on an
equity basis)
Consolidated income in the first quarter of 1998 totaled $1.6 billion, or
$2.31 per share. That compares with $1.7 billion, or $2.23 per share in the
first quarter of 1997.
The corporation's pretax income totaled $1.9 billion in the first quarter
of 1998. Pretax income in the first quarter of 1997 was a comparable $1.9
billion.
The corporation's after-tax net-profit margin -- income as a percentage of
net sales and revenues -- was 4.4 percent in the first quarter of 1998, compared
with 4.7 percent in the first quarter of 1997.
Cash and marketable securities totaled $13.6 billion at March 31, 1998,
compared with $14.5 billion at Dec. 31,1997, and $14.6 billion at March 31,
1997.
In the first quarter of 1998, GM used $1.6 billion to acquire about 24
million shares of GM $1-2/3 par value common stock. These purchases completed a
$2.5 billion repurchase program announced in August 1997, and represent
approximately 8.0 percent of a $4 billion repurchase program that began in March
of 1998. Since January 1997, GM's stock repurchases total approximately $5.3
billion or about 12 percent of the outstanding shares of GM $1-2/3 par value
common stock.
Following is a summary of financial performance for GM's automotive
business sectors (see Highlights for additional information.)
- 3 -
GM NORTH AMERICAN OPERATIONS (GM-NAO)
GM North American Operations' first-quarter-1998 income totaled $826
million. That compares with $764 million in the first quarter of 1997, and
represents the best performance for any quarter since GM-NAO was formed.
GM-NAO's pretax income totaled $1.2 billion in the first quarter of 1998,
compared with $1.1 billion in the prior-year period.
GM-NAO's net-profit margin was 3.2 percent in the first quarter of 1998,
compared with 3.1 percent in the prior-year period.
"An extremely tough pricing environment, along with our lower
wholesale-production volumes, combined to make the first quarter pretty
challenging," said G. Richard Wagoner, Jr., General Motors executive vice
president and president of GM North American Operations. "Fortunately, our NAO
team did a real good job in eliminating waste and reducing costs in line with
our 1998-calendar-year cost-reduction target of $3 billion. We also benefited
from strong sales of our truck and van products."
The first-quarter-1998 results were positively affected by significant
material-cost improvements -- despite added equipment and design costs -- strong
year-over-year gains in manufacturing efficiency, and by the favorable vehicle
mix.
GM vehicle deliveries in the United States in the first quarter of 1998
totaled 1,094,000 units, which resulted in a 30.2-percent share of the U.S.
vehicle market, compared with 1,123,000 units, and a similar 30.2-percent share
in the first quarter of 1997. (See additional information in Highlights.)
"We were pleased to see the stronger sales of GM cars and trucks in March,
following somewhat of a slow start in January and February, which was driven
largely by the heavy price competition in the marketplace," Wagoner said. "March
was GM's best-ever month for truck sales -- in fact for any manufacturer
anytime, anywhere in the world -- and the fifth straight month of sales
increases for trucks. Car sales in March show our new mid-size models are
providing the growth we had expected."
DELPHI AUTOMOTIVE SYSTEMS (DELPHI)
Delphi Automotive Systems reported income of $263 million in the first
quarter of 1998, compared with $314 million in the first quarter of 1997.
Delphi reported pretax income of $376 million in the first quarter of
1998, compared with pretax income of $451 million in the prior-year period.
Delphi's net-profit margin was 3.5 percent in the first quarter of 1998,
compared with a net-profit margin of 3.9 percent in the prior-year period.
Compared with the first quarter of 1997, Delphi's first quarter 1998
results reflect the impact of the Latin American and Asia-Pacific economic
downturn, along with a year-to-year decrease in production volume by GM's North
American Operations. These adverse factors were partially offset by
material-cost reductions, and improved manufacturing efficiencies.
"While the Asian and Latin American environments are challenging today, we
believe these markets offer long-term potential," said J.T. Battenberg III,
General Motors executive vice president and president of Delphi Automotive
Systems. "Delphi is continuing to integrate the expertise of Delphi Delco
Electronics Systems into our products and processes, taking aggressive steps to
position ourselves as the global leader in electronically-enhanced, integrated
automotive systems. The integration will also improve structural costs and keep
future component costs competitive, enabling Delphi to further grow our sales."
- 4 -
Delphi's first-quarter-1998 sales to customers outside the GM-NAO vehicle
groups represented approximately 34 percent of total sales including all joint
ventures, an increase of about 2 percentage points compared with the same
quarter in 1997.
GM INTERNATIONAL OPERATIONS (GMIO)
GM International Operations reported income of $160 million for the first
quarter of 1998, compared with income of $262 million in the same period of
1997.
GMIO reported pretax income of $213 million in the first quarter of 1998,
compared with pretax income of $385 million in the first quarter of 1997.
The net-profit margin for GMIO was 2.0 percent in the first quarter of
1998, compared with 3.2 percent in the prior-year period.
"First-quarter earnings reflect the intensely competitive environment
across all of our operations, and costs associated with the successful start-up
for the new Astra," said Louis R. Hughes, General Motors executive vice
president and president of GM International Operations.
Income from GM's automotive operations in Europe totaled $99 million in
the first quarter of 1998, compared with income of $94 million in the first
quarter last year.
"We're very excited about our new Astra. It has received favorable reviews
from international automotive journalists and is also being well received by our
dealers and customers," Hughes said. "So far, the Astra has been launched
initially in 15 markets, but it has already logged more than 130,000 orders, the
largest order intake at such an early stage for any new car in Opel/Vauxhall
history. The car is currently being produced in three European plants with plans
to begin production at a fourth plant later this year."
For the remainder of GM International Operations, which includes the Latin
American and Asia and Pacific Operations, income totaled $61 million in the
first quarter of 1998, compared with $168 million in the prior-year period.
"As expected, our operations in Brazil and the Far East have been hurt by
the adverse economic conditions in both regions," Hughes said.
SPECIAL ITEMS
While the 1998-first-quarter results had no significant special items, the
1997-first-quarter results were affected by two special items:
- An after-tax gain of $55 million, or $0.07 per share of GM $1-2/3 par
value common stock, that resulted from an agreement with Volkswagen
(VW) settling a civil lawsuit which GM brought against VW.
- An after-tax charge of $50 million, or $0.07 per share of GM $1-2/3 par
value common stock, related to the announcement that Delphi Interior
and Lighting Systems would cease production at its Trenton, N.J.,
facility.
# # #
HIGHLIGHTS ATTACHED
- 5 -
HIGHLIGHTS - Q1 Financial Results
(Dollars in Millions Except
Per Share Amounts)
Three Months Ended
March 31,
--------------------------------
Adjusted
1998 1997 1997
---------------------------- --------- ---------- --------
Net sales and revenues
Manufactured products $36,560 $37,440 $35,823
Financial services 3,161 3,197 3,197
Other income 1,850 1,604 1,511
-------- -------- ---------
Total net sales and revenues $41,571 $42,241 $40,531
-------- -------- ---------
Total net sales and revenues(1) $36,427 $37,457 $35,840
Gross profit margin percentage(1) 16.8% 17.0% 17.1%
...............................................................
Income before income taxes and
minority interests (1) $1,888 $2,110 $1,938
Effective income tax rate (1) 34.0% 34.6% 34.3%
...............................................................
Consolidated net income $1,604 $1,796 $1,689
Net profit margin(1) 4.4% 4.8% 4.7%
...............................................................
Earnings Attributable to Common Stocks
$1-2/3 par value $1,574 $1,717
Class H (2) $- $59
Class H (3) $14 $-
...............................................................
Basic Earnings Per Share Attributable to Common Stocks
$1-2/3 par value $2.31 $2.30 $2.23
Class H (2) $- $0.59
Class H (3) $0.13 $- $0.06
...............................................................
Diluted Earnings Per Share Attributable to Common Stocks
$1-2/3 par value $2.27 $2.28 $2.21
Class H (2) $- $0.59
Class H (3) $0.13 $- $0.06
...............................................................
Cash Dividends Per Share of Common Stocks
$1-2/3 par value $0.50 $0.50
Class H (2) $- $0.25
Class H (3) $- $-
...............................................................
Book Value Per Share of Common Stocks
March 31, Dec. 31, March 31,
1998 1997 1997
-------- ------- --------
$1-2/3 par value $22.00 $22.26 $28.10
Class H $13.20 $13.36 $14.05
................................................................
See footnotes beginning on page 13.
continues
- 6 -
HIGHLIGHTS - Q1 Adjusted for Hughes Transactions
and Special Items - with Financing and Insurance
Operations on an Equity Basis
(Dollars in Millions Except Per Share Amounts)
Three Months Ended
March 31,
----------------------
Adjusted
1998 1997
--------- ----------
Net sales and revenues $36,427 $35,840
------ ------
Costs and expenses:
Cost of sales 30,323 29,719
Selling, general,
and admin. expenses 2,860 2,818
Depreciation and
amort. expenses 1,683 1,818
------ ------
Total costs and
expenses 34,866 34,355
------ ------
Operating income 1,561 1,485
Other income less
income deductions 582 646
Interest expense 255 193
------ ------
Income before
income taxes and
minority interests 1,888 1,938
Income tax expense 641 665
------ ------
Income after income taxes 1,247 1,273
Minority interests (4) 19
Earnings of nonconsolidated
affiliates 361 397
------ ------
Net income $1,604 $1,689
====== ======
$1-2/3 par value EPS
from continuing operations
Basic $2.31 $2.23
Diluted $2.27 $2.21
Gross profit margin 16.8% 17.1%
Effective income tax rate 34.0% 34.3%
Net profit margin 4.4% 4.7%
See footnotes beginning on page 13.
continues
- 7 -
HIGHLIGHTS - Q1 Adjusted for Hughes Transactions
and Special Items - with Financing and Insurance
Operations on an Equity Basis
(Dollars in Millions Except Per Share Amounts)
Three Months Ended
March 31, 1997
------------------------------------
Hughes Special
Trans- Items
Reported actions (4)(5) Adjusted
-------- ------- ------- --------
Net sales and revenues $37,457 $1,617 $ - $35,840
------ ------ ------ ------
Costs and expenses:
Cost of sales 31,104 1,305 80 29,719
Selling, general,
and admin.expenses 2,884 66 - 2,818
Depreciation and
amort. expenses 1,879 61 - 1,818
------ ------ ------ ------
Total costs and
expenses 35,867 1,432 80 34,355
------ ------ ------ ------
Operating income (loss) 1,590 185 (80) 1,485
Other income less
income deductions 739 5 88 646
Interest expense 219 26 - 193
------ ------ ------ ------
Income before
income taxes and
minority interests 2,110 164 8 1,938
Income tax expense 730 62 3 665
------ ------ ------ ------
Income after income
taxes 1,380 102 5 1,273
Minority interests 19 - - 19
Earnings of noncons.
affiliates 397 - - 397
------ ------ ------ ------
Net income $1,796 $102 $5 $1,689
====== ====== ====== ======
$1-2/3 par value EPS
from continuing
operations
Basic $2.30 $2.23
Diluted $2.28 $2.21
Gross profit margin 17.0% 17.1%
Effective income tax rate 34.6% 34.3%
Net profit margin 4.8% 4.7%
See footnotes beginning on page 13.
continues
- 8 -
HIGHLIGHTS - Q1 Adjusted for Hughes Transactions
and Special Items By Sector
(Dollars in Millions)
Three Months Ended
March 31,
----------------------
Adjusted
1998 1997
--------- ----------
GM-NAO $826 $764
Delphi 263 314
GMIO(6) 160 262
Hughes 54 24
GMAC 349 372
Other(7) (48) (47)
----- -----
Consolidated income $1,604 $1,689
===== =====
Three Months Ended
March 31, 1997
-----------------------------------
Hughes
Trans- Special
Reported actions Items Adjusted
-------- ------- ------- --------
GM-NAO $764 $- $- $764
Delphi 180 84 50 (4) 314
GMIO(6) 317 - (55)(5) 262
Hughes 235 (211) - 24
GMAC 372 - - 372
Other(7) (72) 25 - (47)
--- --- -- ---
Consolidated income $1,796 $(102) $(5) $1,689
===== === == =====
See footnotes beginning on page 13.
continues
- 9 -
HIGHLIGHTS - Q1 Automotive Sectors
(Dollars in Millions)
Three Months Ended
March 31, 1998
------------------------------
GM-NAO Delphi GMIO
------ ------ -------
Reported
Net sales and revenues $25,889 $7,623 $8,150
------ ----- -----
Pre-tax income 1,202 376 213
Income tax expense 379 120 72
Equity income and
minority interests 3 7 19
------ ----- -----
Net income $826 $263 $160
====== ===== =====
Net profit margin 3.2% 3.5% 2.0%
Effective income tax rate 31.5% 31.9% 33.8%
See footnotes beginning on page 13.
continues
- 10 -
HIGHLIGHTS - Q1 Automotive Sectors
Adjusted for Hughes Transactions and Special Items
(Dollars in Millions)
Three Months Ended
March 31, 1997
-------------------------------
GM-NAO Delphi GMIO
------- ------- -------
Reported
--------
Net sales and revenues $24,859 $6,664 $8,283
------ ------ ------
Pre-tax income 1,127 237 473
Income tax expense 378 72 164
Equity income and
minority interests 15 15 8
------ ------ ------
Net income $764 $180 $317
====== ====== ======
Net profit margin 3.1% 2.7% 3.8%
Effective income tax rate 33.5% 30.4% 34.7%
Hughes Transactions
-------------------
Net sales and revenues $- $1,331 $-
------ ------ ------
Pre-tax income - 134 -
Income tax expense - 51 -
Equity income and
minority interests - 1 -
------ ------ ------
Net income $- $84 $-
====== ====== ======
Special Items
-------------
Net sales and revenues $- $- $-
------ ------ ------
Pre-tax income (loss) - 80 (88)
Income tax expense (credit) - 30 (33)
Equity income and
minority interests - - -
------ ------ ------
Net income (loss) $- $50 $(55)
====== ====== ======
Adjusted
--------
Net sales and revenues $24,859 $7,995 $8,283
------ ------ ------
Pre-tax income 1,127 451 385
Income tax expense 378 153 131
Equity income and
minority interests 15 16 8
------ ------ ------
Net income $764 $314 $262
====== ====== ======
Net profit margin 3.1% 3.9% 3.2%
Effective income tax rate 33.5% 33.9% 34.0%
See footnotes beginning on page 13.
continues
- 11 -
HIGHLIGHTS - Q1 Operating Information
Three Months Ended
March 31,
----------------------
1998 1997
--------- ----------
Worldwide Wholesale Sales (Units in 000s)
United States: Cars 574 698
Trucks 592 554
------- -------
Total United States 1,166 1,252
Canada and Mexico 171 150
------- -------
Total North America 1,337 1,402
International 722 783
------- -------
Total Worldwide 2,059 2,185
======= =======
....................................................
Vehicle Unit Deliveries (Units in 000s)
United States
Chevrolet - Cars 208 251
- Trucks 378 358
Pontiac 123 145
GMC 117 109
Buick 96 87
Oldsmobile 72 65
Saturn 51 60
Cadillac 43 42
Other 6 6
----- -----
Total United States 1,094 1,123
Canada and Mexico 129 121
------ ------
Total North America 1,223 1,244
------ ------
International
Europe 492 465
Latin America, Africa, and the
Middle East 186 169
Asia and Pacific 119 181
------ ------
Total International 797 815
------ ------
Total Worldwide 2,020 2,059
====== ======
....................................................
Market Share
United States
Cars 30.5% 31.5%
Trucks 29.9% 28.6%
Total 30.2% 30.2%
Western Europe 10.8% 11.4%
Latin America 21.7% 18.9%
Asia and Pacific 4.0% 4.7%
Total Worldwide 15.5% 15.4%
....................................................
U.S. Retail/Fleet Mix
% Fleet Sales - Cars 26.1% 26.5%
% Fleet Sales - Trucks 16.2% 13.6%
Total Vehicles 21.3% 20.9%
....................................................
Days Supply of Inventory -- U.S.
Gross Landed Stock
Cars 83 81
Trucks 94 91
....................................................
Capacity Utilization %
U.S. and Canada (2-shift rated) 89.0% 95.3%
....................................................
Retail Incentives($ per unit)
GM-NAO $1,305 $860
....................................................
See footnotes beginning on page 13.
continues
- 12 -
HIGHLIGHTS - Q1 Operating Information
(Dollars in Millions Except
Per Share Amounts)
Three Months Ended
March 31,
----------------------
1998 1997
--------- ----------
Depreciation and amortization (1)
Depreciation $1,043 $1,051
Amortization of special tools 613 787
Amortization of intangible assets 27 41
----- -----
$1,683 $1,879
===== =====
....................................................
Worldwide Employment at March 31 (in 000s)
GM-NAO 233 242
Delphi 206 178
GMIO 116 112
GMAC 22 18
Hughes 15 88
Other 10 10
--- ---
Total 602 648
--- ---
....................................................
Worldwide Payrolls $7,025 $7,732
....................................................
(1) Calculated with financing and insurance operations on an equity
basis.
(2) Data relates to a period prior to the date on which GM recapitalized
the Class H common stock ("GM's Recapitalization Date").
(3) Data relates to a period which is subsequent to GM's Recapitalization
Date.
(4) The first-quarter 1997 results included a pre-tax gain of $88
million,($55 million after taxes, or $0.07 basic per share of $1-2/3
par value common stock), that resulted from an agreement with
Volkswagen A.G. (VW) settling a civil lawsuit which GM brought against
VW.
(5) The first-quarter 1997 results were negatively impacted by a pre-tax
plant closing charge of $80 million,($50 million after taxes, or $0.07
basic per share of $1-2/3 par value common stock), related to the
announcement that Delphi Interior and Lighting Systems would cease
production at its Trenton, N.J., plant during the 1998 calendar year.
(6) GMIO Includes: Three Months Ended
March 31,
------------------
1998 1997
---- ----
GM Europe $99 $94
Other GMIO $61 $168
(7) 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
March 31,
1998 1997
(Dollars in Millions
Except Per Share Amounts)
Net sales and revenues
Manufactured products $36,560 $37,440
Financial services 3,161 3,197
Other income 1,850 1,604
------- -------
Total net sales and revenues 41,571 42,241
------ ------
Costs and expenses
Cost of sales and other operating charges,
exclusive of items listed below 30,357 31,110
Selling, general and administrative expenses 3,742 3,591
Depreciation and amortization expenses 2,907 3,065
Interest expense 1,630 1,461
Other deductions 513 248
------- -------
Total costs and expenses 39,149 39,475
------ ------
Income before income taxes and minority interests 2,422 2,766
Income taxes 808 989
Minority interests (10) 19
------ ------
Net income 1,604 1,796
Dividends on preference stocks 16 20
------ ------
Earnings on common stocks $1,588 $1,776
===== =====
Basic earnings per share attributable to common stocks
Earnings per share attributable to $1-2/3 par value $2.31 $2.30
Earnings per share attributable to Class H (prior
to its recapitalization on December 17, 1997) $- $0.59
Earnings per share attributable to Class H (subsequent
to its recapitalization on December 17, 1997) $0.13 $-
Diluted earnings per share attributable to common stocks
Earnings per share attributable to $1-2/3 par value $2.27 $2.28
Earnings per share attributable to Class H (prior
to its recapitalization on December 17, 1997) $- $0.59
Earnings per share attributable to Class H (subsequent
to its recapitalization on December 17, 1997) $0.13 $-
- 14 -
<PAGE>
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31, March 31,
1998 Dec. 31, 1997
(Unaudited) 1997 (Unaudited)
(Dollars in Millions)
ASSETS
Cash and cash equivalents $11,498 $11,262 $10,061
Other marketable securities 10,216 11,722 10,387
------ ------ ------
Total cash and marketable securities 21,714 22,984 20,448
Finance receivables - net 63,288 58,870 62,202
Accounts and notes receivable
(less allowances) 9,553 7,493 6,976
Inventories (less allowances) 12,923 12,102 12,851
Deferred income taxes 22,493 22,478 20,138
Equipment on operating leases (less
accumulated depreciation) 33,772 33,302 30,127
Property - net 35,240 34,567 37,004
Intangible assets - net 11,457 11,469 12,737
Other assets - net 25,593 25,623 23,576
-------- -------- --------
Total assets $236,033 $228,888 $226,059
======= ======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Accounts payable (principally trade) $16,426 $15,782 $14,014
Notes and loans payable 98,262 93,027 88,111
Deferred income taxes 3,131 2,923 3,686
Postretirement benefits other than pensions 41,532 41,168 43,607
Pensions 7,324 7,043 7,814
Accrued expenses and other liabilities 51,606 50,490 45,918
-------- -------- --------
Total liabilities 218,281 210,433 203,150
------- ------- -------
Minority interests 740 727 104
General Motors - obligated mandatorily
redeemable preferred securities of
subsidiary trusts holding solely
junior subordinated debentures of
General Motors
Series D 79 79 -
Series G 143 143 -
Stockholders' equity
Preference stocks
Common stocks 1 1 1
$1-2/3 par value (issued, 669,314,625;
693,456,394; and 729,805,298 shares) 1,116 1,156 1,216
Class H (issued, 101,108,669 shares) - - 10
Class H (issued, 104,769,861, and
103,885,803 shares) 10 10 -
Capital surplus (principally additional
paid-in capital) 13,786 15,369 17,689
Retained earnings 6,664 5,416 7,511
------- ------- -------
Subtotal 21,577 21,952 26,427
Minimum pension liability adjustment (4,062) (4,062) (3,490)
Accumulated foreign currency translation
adjustments (1,264) (888) (475)
Net unrealized gains on securities 539 504 343
------ ------ ------
Total stockholders' equity 16,790 17,506 22,805
------ ------ ------
Total liabilities and stockholders'
equity $236,033 $228,888 $226,059
======= ======= =======
- 15 -
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
March 31,
1998 1997
(Dollars in Millions)
Net cash provided by operating activities $5,973 $4,097
----- -----
Cash flows from investing activities
Expenditures for property (2,327) (1,807)
Investments in other marketable securities -
acquisitions (5,758) (11,603)
Investments in other marketable securities -
liquidations 7,300 10,107
Finance receivables - acquisitions (41,800) (37,475)
Finance receivables - liquidations 32,544 26,848
Proceeds from sales of finance receivables 5,143 5,538
Operating leases - acquisitions (5,127) (5,527)
Operating leases - liquidations 3,493 4,124
Other (905) 512
------ ------
Net cash used in investing activities (7,437) (9,283)
----- -----
Cash flows from financing activities
Net increase in loans payable 1,526 2,484
Increase in long-term debt 6,428 4,207
Decrease in long-term debt (4,127) (3,329)
Proceeds from issuing common stocks 233 206
Repurchases of common stocks (1,911) (1,761)
Cash dividends paid to stockholders (357) (422)
------ ------
Net cash provided by financing activities 1,792 1,385
----- -----
Effect of exchange rate changes on cash and
cash equivalents (92) (201)
---- ------
Net increase (decrease) in cash and cash equivalents 236 (4,002)
Cash and cash equivalents at beginning of the period 11,262 14,063
------ ------
Cash and cash equivalents at end of the period $11,498 $10,061
====== ======
- 16 -
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
To facilitate analysis, the following financial statements GM's financial
statements with its financing and insurance operations (primarily GMAC)
reflected on an equity basis.
Consolidated Statements of Income With Financing and Insurance Operations on
an Equity Basis (Unaudited)
Three Months Ended
March 31,
1998 1997
(Dollars in Millions)
Net sales and revenues $36,427 $37,457
------ ------
Costs and expenses
Cost of sales and other operating charges,
exclusive of items listed below 30,323 31,104
Selling, general, and administrative expenses 2,860 2,884
Depreciation and amortization expenses 1,683 1,879
------ ------
Total costs and expenses 34,866 35,867
------ ------
Operating income 1,561 1,590
Other income less income deductions 582 739
Interest expense 255 219
------ -----
Income before income taxes, minority interests, and
earnings of nonconsolidated affiliates 1,888 2,110
Income taxes 641 730
------ ------
Income before minority interests and earnings of
nonconsolidated affiliates 1,247 1,380
Minority interests (4) 19
Earnings of nonconsolidated affiliates 361 397
------ ------
Net income $1,604 $1,796
===== =====
Net profit margin (1) 4.4% 4.8%
(1) Net profit margin represents net income as a percentage of net sales and
revenues.
- 17 -
<PAGE>
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets With Financing and Insurance Operations on an
Equity Basis (Unaudited)
March 31, Dec. 31, March 31,
1998 1997 1997
(Dollars in Millions)
ASSETS
Cash and cash equivalents $11,015 $10,685 $9,395
Other marketable securities 2,557 3,826 5,233
------- ------- -------
Total cash and marketable securities 13,572 14,511 14,628
Accounts and notes receivable
(less allowances)
Trade 5,047 5,164 5,507
Nonconsolidated affiliates 2,096 836 1,844
Inventories (less allowances) 11,895 12,102 12,851
Equipment on operating leases
(less accumulated depreciation) 4,554 4,677 4,187
Deferred income taxes and other 6,362 6,278 5,771
------- ------- -------
Total current assets 43,526 43,568 44,788
Equity in net assets of
nonconsolidated affiliates 10,665 10,164 9,696
Deferred income taxes 20,678 20,721 20,354
Other investments and miscellaneous
assets 13,843 13,564 11,967
Property - net 34,598 33,914 36,634
Intangible assets - net 10,740 10,752 12,573
-------- -------- --------
Total assets $134,050 $132,683 $136,012
======= ======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $12,499 $12,474 $11,379
Loans payable 1,219 656 1,306
Accrued expenses and customer deposits 32,591 33,459 30,168
------ ------ ------
Total current liabilities 46,309 46,589 42,853
Long-term debt 5,788 5,491 5,316
Capitalized leases 183 185 191
Postretirement benefits other than
pensions 38,724 38,388 40,988
Pensions 5,165 4,271 6,183
Other liabilities and deferred income
taxes 20,171 19,336 17,572
-------- -------- --------
Total liabilities 116,340 114,260 113,103
------- ------- -------
Minority interests 698 695 104
General Motors - obligated mandatorily
redeemable preferred securities of
subsidiary trusts holding solely
junior subordinated debentures of
General Motors
Series D 79 79 -
Series G 143 143 -
Stockholders' equity 16,790 17,506 22,805
-------- -------- --------
Total liabilities and
stockholders' equity $134,050 $132,683 $136,012
======= ======= =======
- 18 -
Condensed Consolidated Statements of Cash Flows With Financing and Insurance
Operations on an Equity Basis (Unaudited)
Three Months Ended
March 31,
1998 1997
(Dollars in Millions)
Net cash provided by operating activities $2,896 $1,808
----- -----
Cash flows from investing activities
Expenditures for property (2,267) (1,724)
Investments in other marketable securities -
acquisitions (2,220) (6,199)
Investments in other marketable securities -
liquidations 3,490 4,608
Operating leases - acquisitions (1,413) (1,352)
Operating leases - liquidations 1,385 1,001
Other (272) (104)
------ ------
Net cash used in investing activities (1,297) (3,770)
----- -----
Cash flows from financing activities
Net increase in loans payable 564 93
Increase in long-term debt 915 154
Decrease in long-term debt (619) (30)
Proceeds from issuing common stocks 233 206
Repurchases of common stocks (1,911) (1,761)
Cash dividends paid to stockholders (357) (422)
------ ------
Net cash used in financing activities (1,175) (1,760)
------ -----
Effect of exchange rate changes on cash and
cash equivalents (94) (203)
--- -----
Net increase (decrease) in cash and cash equivalents 330 (3,925)
Cash and cash equivalents at beginning of the period 10,685 13,320
------ ------
Cash and cash equivalents at end of the period $11,015 $9,395
====== =====
- 19 -
Hughes Electronics Corporation Earnings Release
Los Angeles, April 16, 1998 - Hughes Electronics Corporation (Hughes)
today reported that first quarter 1998 revenues increased 26.1% to $1,291.0
million compared with $1,024.0 million in the first quarter of 1997.
First quarter earnings(1) more than doubled to $53.7 million from $23.9
million in the first quarter of 1997. Earnings per share on the same basis for
the first quarter were $0.13 per share versus pro forma earnings per share(2) of
$0.06 in 1997.
Operating profit(1) also rose sharply in the quarter to $83.6 million
compared with $33.1 million in the first quarter of 1997. First quarter
operating profit margin on the same basis increased to 6.5% in 1998 from 3.2% in
1997.
"This is an impressive report card for Hughes' first full quarter of
operations as a satellite and wireless communications company. It demonstrates
continued growth in each of our four principal business segments," said Michael
T. Smith, Hughes chairman and chief executive officer. "The increases in
revenues, operating profit and earnings were driven by another record quarter of
DIRECTV(R) subscriber growth, continued strong performance in our satellite
services segment resulting from the PanAmSat merger, and higher commercial
satellite sales."
SEGMENT FINANCIAL REVIEW: FIRST QUARTER 1998
Direct-To-Home Broadcast
For the quarter, revenues increased 64.6% to $387.9 million from $235.6
million in the first quarter of 1997. The increase resulted from continued
record subscriber growth, strong average monthly revenue per subscriber, and low
subscriber churn rates. Domestic DIRECTV propelled this growth with quarterly
revenues of $353 million, a 55% increase over last year's first quarter revenues
of $228 million. With its best-ever first quarter of 227,000 net new
subscribers, total DIRECTV subscribers grew to 3,528,000 in the United States as
of March 31, 1998. The Company's Latin American DIRECTV subsidiary, Galaxy Latin
America (GLA), had first quarter revenues of $31 million compared with $8
million in 1997. With the addition of 38,000 net new subscribers in the first
quarter, cumulative DIRECTV subscribers in Latin America were 338,000 as of
March 31, 1998.
The operating loss in the quarter was $31.6 million compared with an
operating loss of $67.5 million in the first quarter of 1997. The lower
operating loss in 1998 was principally due to increased subscriber revenues that
more than offset higher sales and marketing expenditures. The first quarter 1998
operating loss in the domestic DIRECTV business was $10 million compared with
$38 million last year, and GLA's first quarter operating loss was $22 million
compared with $30 million last year.
Satellite Services
First quarter 1998 revenues were up 51.3% to $193.0 million compared with
$127.6 million in the prior year. Operating profit in the quarter rose 25.5% to
$85.7 million from $68.3 million in 1997. The revenue and operating profit
growth were primarily due to the May 1997 PanAmSat merger and increased
operating lease revenues for both video distribution and business communications
services. Operating profit margin in the period declined to 44.4% from 53.6% in
the same period last year primarily from goodwill amortization associated with
the PanAmSat merger.
- 20 -
Satellite Manufacturing
For the first quarter of 1998, revenues increased 11.6% to $624.3 million
from revenues of $559.3 million for the same period in 1997. Operating profit in
the quarter increased 4.4% to $55.1 million from $52.8 million in the prior
year. The increases in revenue and operating profit were principally due to
higher commercial satellite sales to customers such as ICO Global
Communications, Thuraya Satellite Telecommunications Company and PanAmSat
Corporation. Operating profit margin in the quarter declined to 8.8% from 9.4%
last year primarily due to increased costs related to the completion of certain
satellite component contracts.
Network Systems
First quarter revenues for Hughes Network Systems (HNS) were $184.7
million compared with $182.5 million in the same period last year. Increased
sales of private business networks and satellite-based mobile telephony
equipment were mostly offset by lower sales of international wireless local loop
telephone systems.
The operating loss in the quarter was $11.9 million compared with an
operating loss of $15.3 million in the first quarter of 1997. The lower
operating loss in the first quarter of 1998 was primarily due to higher revenues
and profits on satellite-based mobile telephony equipment.
BALANCE SHEET
The cash balance of $2,499.5 million at March 31, 1998 reflected a $284.3
million decline during the quarter primarily due to expenditures for PanAmSat
satellites and general working capital requirements.
During the first quarter of 1998, long-term debt increased $150.0 million
to $787.6 million reflecting an increase in PanAmSat's long-term debt. In
January 1998, PanAmSat issued $750.0 million of privately-placed debt securities
with maturities between five and 30 years at interest rates ranging between 6%
and 7%. The net proceeds were used to repay $600.0 million of existing bank
loans, exercise an early buy-out option on a satellite sale-leaseback agreement,
and for general corporate purposes.
- ---------------------
(1) Excludes the effects of purchase accounting adjustments related to General
Motors' (GM) acquisition of Hughes Aircraft Company in 1985.
(2) 1997 earnings per share are presented on a pro forma basis. Historically,
such earnings per share amounts were calculated based on the financial
performance of former Hughes, which consisted of the defense electronics,
automotive electronics, and telecommunications and space businesses. Since
these financial statements relate only to the telecommunications and space
businesses of former Hughes, the pro forma presentation is used to present
the earnings per share that would have been achieved relative to the GM
Class H common stock had it been calculated based upon only such
telecommunications and space businesses.
- 21 -
STATEMENT OF INCOME AND
AVAILABLE SEPARATE CONSOLIDATED NET INCOME
(Dollars in Millions Except Per Share Amounts)
Three Months Ended
March 31,
1998 1997
Revenues
Product sales $692.1 $683.2
Direct broadcast, leasing and other services 598.9 340.8
- ----------------------------------------------------------------------------
Total Revenues 1,291.0 1,024.0
- ----------------------------------------------------------------------------
Operating Costs and Expenses
Cost of products sold 542.3 468.9
Broadcast programming and other costs 264.8 249.7
Selling, general, and administrative expenses 302.6 222.0
Depreciation and amortization 97.7 50.3
Amortization of GM purchase accounting adjustments (1) 5.3 5.3
- ----------------------------------------------------------------------------
Total Operating Costs and Expenses 1,212.7 996.2
- ----------------------------------------------------------------------------
Operating Profit 78.3 27.8
Interest income 37.5 2.0
Interest expense (3.0) (15.1)
Other, net (34.3) (9.1)
- -----------------------------------------------------------------------------
Income from Continuing Operations Before
Income Taxes and Minority Interests 78.5 5.6
Income taxes 31.4 2.2
Minority interests in net losses of subsidiaries 1.3 14.2
- ----------------------------------------------------------------------------
Income from continuing operations 48.4 17.6
Income from discontinued operations, net of taxes - 1.0
- ----------------------------------------------------------------------------
Net Income $48.4 $18.6
Adjustments to exclude the effect of GM
purchase accounting adjustments (1) 5.3 5.3
- ----------------------------------------------------------------------------
Net Earnings Used for Computation of Available
Separate Consolidated Net Income (2) $53.7 $23.9
============================================================================
Available Separate Consolidated Net Income (2) $14.0 $6.0
============================================================================
Net Earnings Attributable to General Motors
Class H Common Stock on a Per Share Basis (2) $0.13 $0.06
============================================================================
(1)Relates to General Motors' purchase of Hughes Aircraft Company in 1985.
(2)1997 amounts are presented on a pro forma basis. Historically, such amounts
were calculated based on the financial performance of former Hughes, which
consisted of the defense electronics, automotive electronics and
telecommunications and space businesses. Since these financial statements
relate only to the telecommunications and space businesses of former
Hughes, the pro forma presentation is used to present the results that
would have been achieved relative to the GM Class H common stock had the
results been calculated based only upon such telecommunications and space
businesses.
- 22 -
PRO FORMA SELECTED SEGMENT DATA*
(Dollars in Millions)
Three Months Ended
March 31,
1998 1997
DIRECT-TO-HOME BROADCAST
Total Revenues $387.9 $235.6
Operating Loss $(31.6) $(67.5)
Depreciation and Amortization $22.5 $18.3
Capital Expenditures $13.7 $11.4
- --------------------------------------------------------------------------
SATELLITE SERVICES
Total Revenues $193.0 $127.6
Operating Profit $85.7 $68.3
Operating Profit Margin 44.4% 53.6%
Depreciation and Amortization $54.5 $13.8
Capital Expenditures (1) $249.6 $334.6
- --------------------------------------------------------------------------
SATELLITE MANUFACTURING
Total Revenues $624.3 $559.3
Operating Profit $55.1 $52.8
Operating Profit Margin 8.8% 9.4%
Depreciation and Amortization $10.7 $8.7
Capital Expenditures $10.7 $15.6
- --------------------------------------------------------------------------
NETWORK SYSTEMS
Total Revenues $184.7 $182.5
Operating Loss $(11.9) $(15.3)
Depreciation and Amortization $8.5 $7.2
Capital Expenditures $4.8 $6.9
- --------------------------------------------------------------------------
ELIMINATIONS and OTHER
Total Revenues $(98.9) $(81.0)
Operating Loss $(13.7) $(5.2)
Depreciation and Amortization $1.5 $2.3
Capital Expenditures $125.9 $(274.5)
===========================================================================
* The 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' Restated 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 exclude the purchase accounting
adjustments related to GM's acquisition of Hughes Aircraft Company, are
presented.
(1)Includes expenditures related to satellites amounting to $145.6 million in
1998 and $332.1 million in 1997. Also included in 1998 is $96.6 million
related to the early buy-out of a satellite sale-leaseback.
- 23 -
BALANCE SHEET
(Dollars in Millions)
March 31, December 31,
ASSETS 1998 1997
- ----------------------------------------------------------------------------
Current Assets
Cash and cash equivalents $2,499.5 $2,783.8
Accounts and notes receivable 740.9 662.8
Contracts in process 623.1 575.6
Inventories 511.6 486.4
Prepaid expenses, deferred income taxes and other 326.2 297.3
- ----------------------------------------------------------------------------
Total Current Assets 4,701.3 4,805.9
Satellites - Net 2,921.3 2,643.4
Property - Net 885.0 889.7
Net Investment in Sales-type Leases 302.4 337.6
Intangible Assets - Net 2,932.9 2,954.8
Investments and Other Assets 1,160.7 1,132.4
- ----------------------------------------------------------------------------
Total Assets $12,903.6 $12,763.8
============================================================================
LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities
Accounts payable $510.4 $472.8
Advances on contracts 222.8 209.8
Deferred revenues 112.9 110.6
Accrued liabilities 597.4 689.4
- ----------------------------------------------------------------------------
Total Current Liabilities 1,443.5 1,482.6
Long-Term Debt and Capitalized Leases 787.6 637.6
Deferred Gains on Sales and Leasebacks 161.2 191.9
Accrued Operating Leaseback Expense 54.5 100.2
Postretirement Benefits Other Than Pensions 155.2 154.8
Other Liabilities and Deferred Credits 722.3 706.4
Deferred Income Taxes 612.2 570.8
Minority Interests 605.1 607.8
Stockholder's Equity 8,362.0 8,311.7
- ----------------------------------------------------------------------------
Total Liabilities and Stockholder's Equity $12,903.6 $12,763.8
============================================================================
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).
- 24 -
<PAGE>
GMAC ANNOUNCES 1998 FIRST QUARTER EARNINGS
DETROIT -- General Motors Acceptance Corporation (GMAC) reported first quarter
1998 consolidated net income of $349 million, down 6% from $372 million earned
in the first quarter of 1997, GMAC President John D. Finnegan announced today.
For the quarter, net income from automotive financing operations totaled
$246 million, down 4% from $257 million earned in the first quarter of 1997.
Earnings were lower due to reduced net financing margins partially offset by
reduced credit losses and operating expenses and a lower effective income tax
rate.
GMAC Insurance Holdings, Inc. generated net income of $80 million in the
first quarter of 1998, up 3% from $78 million earned last year. The increase
reflects improved underwriting results from existing lines of business and the
inclusion of Integon Corporation, partially offset by lower capital gains.
GMAC Mortgage Group, Inc. generated net income of $23 million in the first
quarter of 1998, down 38% from $37 million earned last year. Mortgage Group
earnings were lower due to the effect of accelerated prepayment experience on
first and second mortgages, resulting from lower interest rates.
* * *
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 April 17, 1998
-----------------
By
s/Peter R. Bible
-------------------------------
(Peter R. Bible,
Chief Accounting Officer)
- 25 -
