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) January 20, 1999
----------------
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 48265-1000
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 January 20, 1999, a news release was issued on the subject of fourth
quarter consolidated earnings for General Motors Corporation (GM). The news
release did not include certain financial statements, related footnotes and
certain other financial information that will be filed with the Securities and
Exchange Commission as part of GM's Annual Report on Form 10-K. Following are
the fourth quarter earnings releases for GM, Hughes Electronics Corporation
(Hughes), and General Motors Acceptance Corporation (GMAC), all dated January
20, 1999.
GM FOURTH-QUARTER 1998 EARNINGS PER SHARE OF $2.64 BEST FOR ANY QUARTER
IN GM HISTORY... EPS TOTALED $3.28 PER SHARE EXCLUDING SPECIAL ITEMS
DETROIT -- Strong vehicle sales and continued aggressive cost cutting
resulted in record-setting financial performance for General Motors Corporation
(GM) in the fourth quarter of 1998, with $2.64 basic earnings per share of GM
$1-2/3 par value common stock the best for any quarter in GM's history. Net
income totaling $1.8 billion was the best for any fourth-quarter period. That
compares with net income of $1.6 billion, or $2.29 per share, in the fourth
quarter of 1997. Excluding special items, GM's income in the fourth quarter of
1998 totaled $2.2 billion, or $3.28 per share (see Special Items).
"We came back strong following the work stoppage in mid-year and we intend
to keep this momentum going in the future," said GM Chairman and Chief Executive
Officer John F. Smith, Jr.
Smith said, "We've been busy since August. We've achieved full production
of GM's new full-size pickup trucks a month ahead of schedule, we announced and
made significant progress toward the separation of Delphi Automotive Systems, we
integrated the worldwide automotive operations into a single global unit, we
restructured the U.S. sales and service field organization, we started up two
new plants in key developing markets -- Poland and China -- and we expanded our
ownership in and partnerships with Isuzu and Suzuki -- all since August."
GM also reported today that its strike-impacted calendar-year-1998 net
income totaled $3.0 billion, or $4.26 per share, compared with $6.3 billion, or
$8.45 per share, in calendar-year 1997. All earnings-per-share amounts are basic
(see Highlights for diluted earnings-per-share amounts).
The corporation's strong fourth quarter primarily reflects the excellent
results for GM North America, which reached an all-time record for any quarter,
with net income totaling $1.6 billion, and a net-profit margin of 5.7 percent.
That beat the previous record high of $841 million in the first quarter of 1998
by more than $700 million.
Consolidated net sales and revenues in the fourth quarter of 1998 totaled
$46.4 billion, and $161 billion for the calendar year, compared with $42.9
billion for the fourth quarter of 1997 and $167 billion in calendar-year 1997,
adjusted to reflect the spin-off of the Hughes defense business.
Cash, marketable securities and assets of the Voluntary Employees'
Beneficiary Association (VEBA) trust invested in fixed-income securities totaled
$14.1 billion at Dec. 31, 1998, compared with $17.5 billion at Dec. 31, 1997,
and $11.5 billion at Sept. 30, 1998. These cash amounts exclude GM's financing
and insurance operations.
- 2 -
"By running our operations full out and effectively containing costs, we
have rebuilt our cash position to exceed the $13 billion necessary to support
capital-spending programs, adequately fund pension plans, continue stockholder
initiatives, and keep us in a strong position in the event of any future
downturn," Smith said.
"With regard to stockholder initiatives, we are planning three steps,"
Smith said. "First, we will reinstate the share-repurchase program during the
first quarter of 1999 with a targeted completion by the end of this calendar
year. Since January 1997, GM has spent $6.3 billion to repurchase approximately
102 million shares of GM $1-2/3 par value common stock or about 13.5 percent of
the total shares outstanding. Secondly, GM plans to redeem its Series B 9-1/8
Preference Stock in the near future. There are currently some 20 million
depositary shares of the preference stock with a face value of more than $500
million. Third, during 1999, we are planning to distribute our entire ownership
interest in Delphi to GM's $1-2/3 stockholders."
Significant factors impacted both the fourth-quarter and
calendar-year-1998 and 1997 financial results (see Special Items, and
Highlights).
Excluding special items, GM's income in the fourth quarter of 1998 totaled
$2.2 billion, or $3.28 per share, which compares with $1.4 billion, or $1.96 per
share in the fourth quarter of 1997.
"We expect strong market conditions to continue in the United States and
Europe in 1999, and fully intend to maintain our momentum in the market and to
further strengthen our financial position," Smith said. "However, the economic
problems and uncertainty in Asia and Latin America will be a continuing
challenge in 1999," Smith cautioned.
Unless otherwise noted, corporate and sector data in the remainder of this
release exclude the above-mentioned special items. (See Highlights for
calendar-year data.)
Following is a summary of income from GM's business sectors in the fourth
quarter of 1998, compared with the prior-year period.
GM Business Sector Fourth Quarter Fourth Quarter
1998 1997
GM Automotive $1.5 billion $831 million
Delphi Automotive Systems $280 million $349 million
General Motors Acceptance $298 million $279 million
Corporation (GMAC)
Hughes Electronics $119 million $70 million
Corporation (Hughes)
GM AUTOMOTIVE
GM Automotive fourth-quarter-1998 income totaled $1.5 billion, compared
with $831 million in the fourth quarter of 1997.
"We're pleased to see the strong results driven by the global automotive
team in the fourth quarter of 1998, our first quarter as a globally integrated
unit," said GM President and Chief Operating Officer G. Richard Wagoner, Jr.
- 3 -
"We came back strong in North America following the work stoppage and
began to pick up momentum in Europe as well," Wagoner said. "Significant
cost-restructuring actions were implemented in South America in response to the
difficult economic and market environments, and we continue our plan to expand
in the Asia-Pacific region despite the current economic weakness there.
"Overall in 1998, we ended on a strong note, and we expect to build on
that momentum in 1999," Wagoner said. "We plan to keep an intense focus on cost
reduction, while introducing many new products around the world."
GM Automotive's net margin was 4.2 percent in the fourth quarter of 1998
- -- up significantly from the net margin of 2.4 percent in the same period last
year.
Following are results from the four regions that comprise GM Automotive:
- Income for GM North America totaled $1.7 billion in the fourth
quarter of 1998, compared with $650 million in the fourth quarter
of 1997. Net-income margin of 6.0 percent in the fourth quarter
of 1998 represents the best performance in recent history.
- GM Europe's income totaled $146 million in the fourth quarter of
1998, compared with $31 million in the fourth quarter of 1997.
- GM Latin America/Africa/Mid-East showed a loss of $161 million in
the fourth quarter of 1998 compared with income of $192 million
in the fourth quarter of 1997.
- GM Asia/Pacific's losses totaled $116 million in the fourth
quarter of 1998, compared with a loss of $27 million in the
prior-year period.
GM vehicle deliveries in the United States totaled 1,154,000 units in
the fourth quarter of 1998, which resulted in a 29.1-percent share of the U.S.
vehicle market.
"Reaching full production of our new full-size pickup trucks a month
ahead of schedule in December of 1998, along with our 14 all-new product entries
in 1999, should set the stage for further improved market and financial
results," Wagoner said.
GM Europe gained market momentum in the fourth quarter of 1998, with
market share reaching 9.9 percent, up 0.5 percentage points from the fourth
quarter of 1997. This improvement resulted from the full availability of the new
Opel/Vauxhall Astra, which was the best-selling product in Europe during the
fourth quarter of 1998.
Both the Asia/Pacific and Latin America/Africa/Mid-East regions
continue to be affected by economic turmoil and uncertainties, which are
expected to continue in early 1999. GM was the market leader in the fourth
quarter of 1998 in the Latin America/Africa/Mid-East region, even though GM's
normally strong Brazilian operations continued to suffer.
GM plans to remain fully committed to both the Asia/Pacific and Latin
American regions, and is positioning itself for the future in both markets due
to their long-term growth potential.
- 4 -
DELPHI AUTOMOTIVE SYSTEMS (DELPHI)
Delphi Automotive Systems' income totaled $280 million in the fourth
quarter of 1998, compared with $349 million in the fourth quarter of 1997.
The net-profit margin was 3.6 percent in the fourth quarter of 1998,
compared with 4.3 percent in the same period of 1997.
"Delphi's fourth-quarter-1998 results reflect the impact of the
economic downturn in Latin America," said Delphi Chairman, Chief Executive
Officer and President J.T. Battenberg III. "But continuing worldwide price
pressures were offset by Delphi's aggressive cost-reduction efforts,
particularly in the areas of manufacturing, material, and engineering."
GENERAL MOTORS ACCEPTANCE CORPORATION (GMAC)
GMAC reported income of $298 million in the fourth quarter of 1998,
compared with income of $279 million in the fourth quarter of 1997. Income from
automotive financing operations increased 8 percent in the fourth quarter of
1998, while earnings from the GMAC Mortgage Group increased 52 percent compared
with the prior-year period.
HUGHES ELECTRONICS CORPORATION (HUGHES)
Income in the fourth quarter of 1998 totaled $119 million, compared
with $70 million in the prior-year period. Hughes' fourth-quarter results
reflect continued record growth in DirectTV subscriptions, as well as increased
sales of commercial satellites. Revenues in the fourth quarter of 1998 increased
5.7 percent to $1.8 billion, compared with $1.7 billion in the same period of
1997.
SPECIAL ITEMS
As a result of GM's continuing studies relating to the competitiveness
of its various automotive assets and operations, the corporation recorded
after-tax charges against income in the fourth quarter of 1998 totaling $420
million, or $0.64 per share. Following are the components of the after-tax
charges:
- $80 million at GM North America, primarily related to
separation programs for employees involved in the
restructuring of the U.S. sales and service field
organization.
- $97 million at GM Asia/Pacific primarily related to the impact of
the weak economic environment on GM's investments in India and
Thailand.
- $51 million at GM Latin America/Africa/Mid-East related to
underperforming assets, and separation programs for employees, as
part of GM's cost-reduction efforts in response to economic
conditions.
- $192 million at Delphi, primarily related to voluntary early
retirements, closing of unprofitable joint ventures, and
underperforming assets.
(See Highlights for previously reported special items)
- 5 -
PROFIT SHARING
As a result of the profits generated in 1998 by GM's operations in the
United States, profit-sharing payments will be made in 1999 to approximately
231,000 of GM's represented employees in the United States. Each full-time
represented employee who worked the entire year should receive approximately
$200. This is the fifth consecutive year that profit-sharing payments have been
made to U.S. employees. Profits generated in 1997 resulted in a profit-sharing
payout of approximately $750.
General Motors also announced today that more than 70,000 eligible
salaried employees in the United States and Canada will receive incentive
payments. The 1998 salaried cash payout is either 1.0 percent of an employee's
base-salary earnings or $200, whichever is higher.
In addition to the cash payout, eligible salaried employees in the United
States and Canada will be granted options to purchase General Motors stock. As a
continuation of the program initiated last year, options covering a total of 5
million shares will be awarded with individual grants covering from 25 to 100
shares, depending upon the level of the employee's responsibility.
FORWARD LOOKING STATEMENTS
This release and related management discussions with securities analysts,
the media and others will contain certain forward-looking statements indicated
by our use of the terms "plans," "expects," "outlook," "forecast" and similar
words.
These forward-looking statements are made in an effort to assist the
market in understanding General Motors and its results. Forward-looking
statements are inherently predictive in nature and GM cannot assure nor
guarantee that actual results will not differ materially from its predictions.
Important risk factors that could cause actual results to differ materially from
those indicated by our predictions are detailed in the corporation's Annual
Report on Form 10-K for the year ended Dec. 31, 1997, in Part II, at page II-64,
under the heading "Forward-Looking Statements."
# # #
HIGHLIGHTS ATTACHED
- 6 -
HIGHLIGHTS - Q4 Financial Results
(Dollars in Millions Except
Per Share Amounts)
Three Months Ended
December 31,
------------------------------------
Adjusted Adjusted
1998 1998(1) 1997 1997(1)
-------- ------- ------- --------
Net sales and revenues (2)
Manufactured products $40,747 $40,747 $37,688 $38,147
Financing and insurance 3,495 3,495 3,199 3,199
Other income 2,124 2,124 6,280 2,100
------ ------ ------ ------
Total net sales and
revenues $46,366 $46,366 $47,167 $43,446
------ ------ ------ ------
Net income (2) $1,772 $2,192 $1,645 $1,415
Net profit margin (2) 3.8% 4.7% 3.5% 3.3%
.............................................................
Earnings Attributable to Common Stocks
$1-2/3 par value $1,725 $1,654
Class H (3) $- $65
Class H (4) $32 $2
.............................................................
Basic Earnings Per Share Attributable to Common Stocks
$1-2/3 par value $2.64 $3.28 $2.36 $1.96
Class H (3) $- $- $0.63
Class H (4)(9) $0.30 $0.30 $0.02 $0.18
.............................................................
Diluted Earnings Per Share Attributable to Common Stocks
$1-2/3 par value $2.61 $3.25 $2.33 $1.93
Class H (3) $- $- $0.63
Class H (4)(9) $0.30 $0.30 $0.02 $0.18
.............................................................
Cash Dividends Per Share of Common Stocks
$1-2/3 par value $0.50 $0.50
Class H (3) $- $0.25
Class H (4) $- $-
.............................................................
Book Value Per Share of Common Stocks
December 31,
----------------------
1998 1997
--------- ---------
$1-2/3 par value $19.90 $22.26
Class H $11.94 $13.36
.............................................................
See footnotes beginning on page 12.
continues
- 7 -
HIGHLIGHTS - Q4 Adjusted for Competitiveness Studies, Hughes
Transactions and Other Adjustments by Sector
(Dollars in Millions)
Three Months Ended
December 31, 1998
----------------------------
(1)
Reported (5) Adjusted
Income Comp. Income
(Loss) Studies (Loss)
------- ------- --------
GM North America
(GMNA) $1,583 $(80) $1,663
GM Europe (GME) 146 - 146
GM Latin America/
Africa/Mid-East
(GMLAAM) (212) (51) (161)
GM Asia/Pacific (GMAP) (213) (97) (116)
Other (5) - (5)
----- ---- -----
Total GM Automotive
(GMA) 1,299 (228) 1,527
Delphi 88 (192) 280
Hughes (9) 119 - 119
Other (53) - (53)
----- ---- -----
Total Automotive,
Electronics and
Other Operations 1,453 (420) 1,873
GMAC 298 - 298
Other 21 - 21
----- ---- -----
Total Financing and
Insurance Operations 319 - 319
----- ---- -----
Consolidated net
income $1,772 $(420) $2,192
===== ==== =====
Three Months Ended
December 31, 1997 (2)
------------------------------------------
(1)
Reported (5) (6) (7) Adjusted
Income Comp. Hughes Other Income
(Loss) Studies Trans. Adjs. (Loss)
------- ------- ------- ------- -------
GMNA $(1,747) $(2,383) $ - (14) $650
GME (457) (488) - - 31
GMLAAM 192 - - - 192
GMAP (196) (170) - 1 (27)
Other (15) - - - (15)
----- ----- ----- ----- -----
Total GMA (2,223) (3,041) - (13) 831
Delphi (508) (870) - 13 349
Hughes 70 - - - 70
Other 4,013 (128) 4,269 - (128)
----- ----- ----- ----- -----
Total Automotive,
Electronics and
Other Operations 1,352 (4,039) 4,269 - 1,122
GMAC 279 - - - 279
Other 14 - - - 14
----- ----- ------ ----- -----
Total Financing and
Insurance Operations 293 - - - 293
----- ----- ----- ----- -----
Consolidated net
income $1,645 $(4,039) $4,269 $ - $1,415
===== ===== ===== ===== =====
See footnotes beginning on page 12.
continues
- 8 -
HIGHLIGHTS - Q4 Automotive Operations and Delphi
Adjusted for Competitiveness Studies, Hughes Transactions
and Other Adjustments
(Dollars in Millions)
Three Months Ended
December 31, 1998
----------------------------------------
GMNA GME GMLAAM GMAP Delphi
------ ----- ------ ------ ------
Reported
--------
Revenue $27,912 $7,185 $1,484 $768 $7,800
------ ----- ----- --- -----
Pre-tax income (loss) 2,403 229 (366) (97) 70
Income tax expense
(benefit) 813 81 (139) 3 5
Equity (loss) income and
minority interests (7) (2) 15 (113) 23
----- ----- ----- --- -----
Net income (loss) $1,583 $146 $(212) $(213) $88
===== ===== ===== === =====
Net profit (loss)
margin 5.7% 2.0% (14.3%) (27.7%) 1.1%
Effective income
tax rate 33.8% 35.4% 38.0% (3.1%) 7.1%
Competitiveness Studies (5)
-----------------------
Revenue $ - $ - $ - $ - $ -
----- ----- ----- --- -----
Pre-tax income (105) - (82) (37) (310)
Income taxes (40) - (31) - (118)
Equity income and
minority interests (15) - - (60) -
----- ----- ----- --- -----
Net income $(80) $ - $(51) $(97) $(192)
===== ===== ===== === =====
Adjusted (1)
--------
Revenue $27,912 $7,185 $1,484 $768 $7,800
------ ----- ----- ----- -----
Pre-tax income (loss) 2,508 229 (284) (60) 380
Income tax expense
(benefit) 853 81 (108) 3 123
Equity income (loss) and
minority interests 8 (2) 15 (53) 23
------ ----- ----- ----- -----
Net income (loss) $1,663 $146 $(161) $(116) $280
====== ===== ===== ===== =====
Net profit (loss)
margin 6.0% 2.0% (10.8%) (15.1%) 3.6%
Effective income
tax rate 34.0% 35.4% 38.0% (5.0%) 32.4%
See footnotes beginning on page 12.
continues
- 9 -
HIGHLIGHTS - Q4 Automotive Operations and Delphi
Adjusted for Competitiveness Studies, Hughes Transactions
and Other Adjustments
(Dollars in Millions)
Three Months Ended
December 31, 1997
----------------------------------------
GMNA GME GMLAAM GMAP Delphi
------ ----- ------ ------ ------
Reported (2)
--------
Revenue $25,527 $6,103 $2,085 $836 $8,079
------ ----- ----- --- -----
Pre-tax (loss) income (2,826) (695) 68 (180) (748)
Income tax benefit (1,132) (261) (33) (14) (257)
Equity (loss) income and
minority interests (53) (23) 91 (30) (17)
----- ----- ----- --- -----
Net (loss) income $(1,747) $(457) $192 $(196) $(508)
===== ===== ===== === =====
Net (loss) profit
margin (6.8%) (7.5%) 9.2% (23.4%) (6.3%)
Effective income
tax rate 40.1% 37.6% (48.5%) 7.8% 34.4%
Competitiveness Studies (5)
-----------------------
Revenue $(450) $- $- $(9) $ -
----- ----- ----- --- -----
Pre-tax income (3,708) (848) - (174) (1,362)
Income taxes (1,396) (360) - (13) (502)
Equity income and
minority interests (71) - - (9) (10)
----- ----- ----- --- -----
Net income $(2,383) $(488) $- $(170) $(870)
===== ===== ===== === =====
Other Adjustments (7)
-----------------
Revenue $- $- $- $- $-
------ ----- ----- --- -----
Pre-tax income (64) - - 1 63
Income taxes (50) - - - 50
Equity income and
minority interests - - - - -
------ ----- ----- --- -----
Net income $(14) $- $- $1 $13
====== ===== ===== === =====
Adjusted (1)
--------
Revenue $25,977 $6,103 $2,085 $845 $8,079
------ ----- ----- --- -----
Pre-tax income (loss) 946 153 68 (7) 551
Income tax expense
(benefit) 314 99 (33) (1) 195
Equity income (loss)
and minority interests 18 (23) 91 (21) (7)
------ ----- ----- --- -----
Net income (loss) $650 $31 $192 $(27) $349
====== ===== ===== === =====
Net profit (loss)
margin 2.5% 0.5% 9.2% (3.2%) 4.3%
Effective income
tax rate 33.2% 64.7% (48.5%) 14.3% 35.4%
See footnotes beginning on page 12.
continues
- 10 -
HIGHLIGHTS - Q4 Operating Information
Three Months Ended
December 31,
----------------------
1998 1997
--------- ----------
Worldwide Wholesale Sales (units in 000s)
United States: Cars 739 699
Trucks 616 599
------ ------
Total United States 1,355 1,298
Canada and Mexico 169 152
------ ------
Total GM North America 1,524 1,450
------ ------
GME 465 469
GMLAAM 131 187
GMAP 91 107
------ ------
Total International 687 763
------ ------
Total Worldwide 2,211 2,213
====== ======
....................................................
Vehicle Unit Deliveries (units in 000s)
United States
Chevrolet - Cars 209 216
- Trucks 383 382
Pontiac 133 132
GMC 112 117
Buick 101 113
Oldsmobile 98 77
Saturn 52 52
Cadillac 57 44
Other 9 5
------ ------
Total United States 1,154 1,138
Canada and Mexico 140 162
------ ------
Total GM North America 1,294 1,300
------ ------
GME 443 419
GMLAAM 131 182
GMAP 94 120
------ ------
Total International 668 721
------ ------
Total Worldwide 1,962 2,021
====== ======
....................................................
Market share
United States
Cars 31.6% 32.2%
Trucks 26.7% 29.0%
Total 29.1% 30.6%
Total North America 28.9% 30.5%
Western Europe 10.9% 11.1%
Latin America 18.1% 19.6%
Asia and Pacific 3.6% 3.9%
Total Worldwide 15.8% 15.7%
.....................................................
U.S. Retail/Fleet Mix
% Fleet Sales - Cars 33.7% 27.0%
% Fleet Sales - Trucks 13.8% 12.4%
Total vehicles 24.6% 20.2%
....................................................
Days Supply of Inventory - U.S.
Cars 93 92
Trucks 89 97
.....................................................
Capacity Utilization %
U.S. and Canada (2-shift rated) 101.2% 100.5%
.....................................................
GMNA
Retail Incentives ($ per unit) $1,161 $1,148
Net Price (%) 1.3% (1.3)%
.....................................................
See footnotes beginning on page 12.
continues
- 11 -
HIGHLIGHTS - Q4 Other Financial Information
(Dollars in Millions Except Per Share Amounts)
Three Months Ended
December 31,
----------------------
1998 1997
--------- ----------
Depreciation and Amortization (8)
Depreciation $1,279 $2,693
Amortization of special tools 885 3,407
Amortization of intangible
assets 35 76
------ -----
Total $2,199 $6,176
====== =====
....................................................
Worldwide Employment at December 31 (in 000s) (2)
GMNA 226 237
GME 84 79
GMLAAM 23 27
GMAP 10 10
Delphi 199 210
Hughes 15 15
GMAC 25 21
Other 13 9
------ ------
Total 595 608
====== ======
....................................................
Worldwide Payrolls (2) $6,644 $7,021
....................................................
(1) Adjusted amounts represent the reported amounts less the effects of
special items (including Competitiveness Studies), Hughes Transactions
and Other Adjustments.
(2) Amounts reported for 1997 have been adjusted to reflect the changes to
GM's organizational structure resulting from the Hughes Transactions.
As such, Delphi reported amounts include Delco and Hughes reported
amounts exclude Delco and Hughes Defense.
(3) Data relates to a period prior to the date on which GM recapitalized
the Class H common stock as part of the Hughes Transactions ("GM's
Recapitalization Date").
(4) Data relates to a period which is subsequent to GM's Recapitalization
Date.
(5) As a result of GM's continuing automotive competitiveness studies,
fourth quarter 1998 results were impacted by charges totaling $534
million ($420 million after-tax or $0.64 per share of $1-2/3 par value
common stock. These studies were performed in conjunction with GM's
current business planning cycle. In the fourth quarter 1997, GM
recorded pre-tax charges against income totaling $6.4 billion ($4.0
billion after-tax or $5.75 per share of $1-2/3 par value common stock).
(6) On December 17, 1997, GM completed the restructuring of its Hughes
Electronics subsidiary (Hughes Transactions), which resulted in a
tax-free gain of $4.3 billion or $6.08 per share of $1-2/3 par value
common stock in the fourth quarter of 1997.
(7) Results have been adjusted for amounts necessary to reflect Delphi's
financial statements on the same basis as contained in their Form S-1
document filed with the Securities and Exchange Commission during the
fourth quarter of 1998, in connection with their anticipated initial
public offering.
(8) Amounts exclude depreciation and amortization charges incurred by the
financing and insurance operations.
(9) 1998 results include the cumulative effect of accounting change of $9
million due to Hughes' adoption of SOP 98-5. Hughes has reported the $9
million change as a restatement of first quarter 1998 results.
continues
- 12 -
HIGHLIGHTS - Year Ended Financial Results
(Dollars in Millions Except
Per Share Amounts)
Year Ended
December 31,
------------------------------------
Adjusted Adjusted
1998 1998 (1) 1997 1997 (1)
-------- ------- ------ -------
Net sales and revenues (2)
Manufactured products $140,433 $140,433 $146,759 $147,218
Financing and insurance 13,585 13,585 12,762 12,762
Other income 7,297 7,297 11,663 6,777
------- ------- ------- -------
Total net sales and
revenues $161,315 $161,315 $171,184 $166,757
------- ------- ------- -------
Net income (2) $2,956 $3,691 $6,314 $5,658
Net profit margin (2) 1.8% 2.3% 3.7% 3.4%
.............................................................
Earnings Attributable to Common Stocks
$1-2/3 par value $2,822 $6,276
Class H (3) $- $322
Class H (4) $72 $2
.............................................................
Basic Earnings Per Share Attributable to Common Stocks
$1-2/3 par value $4.26 $5.38 $8.70 $7.66
Class H (3) $- $- $3.17
Class H (4) $0.68 $0.68 $0.02 $0.38
.............................................................
Diluted Earnings Per Share Attributable to Common Stocks
$1-2/3 par value $4.18 $5.30 $8.62 $7.58
Class H (3) $- $- $3.17
Class H (4) $0.68 $0.68 $0.02 $0.38
.............................................................
Cash Dividends Per Share of Common Stocks
$1-2/3 par value $2.00 $2.00
Class H (3) $- $1.00
Class H (4) $- $-
..............................................................
See footnotes beginning on page 19.
continues
- 13 -
HIGHLIGHTS - Year Ended Adjusted for Competitiveness Studies, Hughes
Transactions, and Other Adjustments By Sector
(Dollars in Millions)
Year Ended
December 31, 1998
----------------------------------
Special (1)
Reported (5) Items(6) Adjusted
Income Comp. & Other Income
(Loss) Studies Adjs.(9) (Loss)
------- ------- -------- -------
GMNA $1,601 $(80) $(34) $1,715
GME 419 - (44) 463
GMLAAM (175) (51) - (124)
GMAP (239) (97) 4 (146)
Other (2) - - (2)
----- ----- ----- -----
Total GM Automotive
(GMA) 1,604 (228) (74) 1,906
Delphi (50) (192) (228) 370
Hughes 272 - - 272
Other (292) - (13) (279)
----- ----- ----- -----
Total Automotive,
Electronics and
Other Operations 1,534 (420) (315) 2,269
GMAC 1,325 - - 1,325
Other 97 - - 97
----- ----- ----- -----
Total Financing and
Insurance Operations 1,422 - - 1,422
----- ----- ----- -----
Consolidated net
income $2,956 $(420) $(315) $3,691
===== ===== ===== =====
Year Ended
December 31, 1997 (2)
----------------------------------
Reported (5) (8)
Income Comp. Hughes Sub-
(Loss) Studies Trans. Total
------ ------- ------ ------
GMNA $(86) $(2,383) $- $2,297
GME (17) (488) - 471
GMLAAM 667 - - 667
GMAP (169) (170) - 1
Other (17) - - (17)
----- ----- ----- -----
Total GM Automotive
(GMA) 378 (3,041) - 3,419
Delphi 286 (870) - 1,156
Hughes 471 - - 471
Other 3,861 (128) 4,269 (280)
----- ----- ----- -----
Total Automotive,
Electronics and
Other Operations 4,996 (4,039) 4,269 4,766
GMAC 1,301 - - 1,301
Other 17 - - 17
----- ----- ------ ------
Total Financing and
Insurance Operations 1,318 - - 1,318
----- ----- ----- -----
Consolidated net
income $6,314 $(4,039) $4,269 $6,084
===== ===== ===== =====
See footnotes beginning on page 19.
continues
- 14 -
HIGHLIGHTS - Year Ended Adjusted for Competitiveness Studies, Hughes
Transactions, and Other Adjustments By Sector
(Dollars in Millions)
Year Ended
December 31, 1997
-------------------------------------
(7) (9) (1)
Other Other Adjusted
Sub- Special Adjust- Income
Total Items ments (loss)
------ ------- ------- -------
GMNA $2,297 $- $(74) $2,371
GME 471 158 - 313
GMLAAM 667 - - 667
GMAP 1 - 3 (2)
Other (17) - - (17)
----- ----- ----- -----
Total GM Automotive
(GMA) 3,419 158 (71) 3,332
Delphi 1,156 (50) 71 1,135
Hughes 471 318 - 153
Other (280) - - (280)
----- ----- ----- -----
Total Automotive,
Electronics and
Other Operations 4,766 426 - 4,340
GMAC 1,301 - - 1,301
Other 17 - - 17
----- ----- ----- -----
Total Financing and
Insurance Operations 1,318 - - 1,318
----- ----- ----- -----
Consolidated net
income $6,084 $426 $- $5,658
===== ===== ===== =====
See footnotes beginning on page 19.
continues
- 15 -
HIGHLIGHTS - Year Ended Automotive Operations and Delphi
Adjusted for Competitiveness Studies, Hughes Transactions,
and Other Adjustments
(Dollars in Millions)
Year Ended
December 31, 1998
----------------------------------------
GMNA GME GMLAAM GMAP Delphi
------ ----- ------ ------ ------
Reported
--------
Revenue $94,201 $25,036 $7,403 $2,923 $28,479
------ ------ ----- ----- ------
Pre-tax income (loss) 2,353 740 (471) (77) (268)
Income tax expense
(benefit) 765 319 (213) 10 (152)
Equity income (loss) and
minority interests 13 (2) 83 (152) 66
----- ----- ----- ----- -----
Net income $1,601 $419 $(175) $(239) $(50)
===== ===== ===== ===== =====
Net profit (loss)
margin 1.7% 1.7% (2.4%) (8.2%) (0.2%)
Effective income
tax rate 32.5% 43.1% 45.2% (13.0%) 56.7%
Competitiveness Studies (5)
-----------------------
Revenue $- $- $- $- $-
----- ----- ----- ----- -----
Pre-tax income (105) - (82) (37) (310)
Income taxes (40) - (31) - (118)
Equity income and
minority interests (15) - - (60) -
----- ----- ----- ----- -----
Net income $(80) $- $(51) $(97) $(192)
===== ===== ===== ===== =====
Special Items (7) and
Other Adjustments (9)
-----------------
Revenue $- $- $- $- $-
----- ----- ----- ----- -----
Pre-tax income (56) (74) - 5 (366)
Income taxes (22) (30) - 1 (138)
Equity income and
minority interests - - - - -
----- ----- ----- ----- -----
Net income $(34) $(44) $- $4 $(228)
===== ===== ===== ===== =====
Adjusted (1)
--------
Revenue $94,201 $25,036 $7,403 $2,923 $28,479
------ ------ ----- ----- ------
Pre-tax income (loss) 2,514 814 (389) (45) 408
Income tax expense
(benefit) 827 349 (182) 9 104
Equity income (loss) and
minority interests 28 (2) 83 (92) 66
----- ----- ----- ----- -----
Net income (loss) $1,715 $463 $(124) $(146) $370
===== ===== ===== ===== =====
Net profit (loss)
margin 1.8% 1.8% (1.7%) (5.0%) 1.3%
Effective income
tax rate 32.9% 42.9% 46.8% (20.0%) 25.5%
See footnotes beginning on page 19.
continues
- 16 -
HIGHLIGHTS - Year Ended Automotive Operations and Delphi
Adjusted for Competitiveness Studies, Hughes Transactions,
and Other Adjustments
(Dollars in Millions)
Year Ended
December 31, 1997
----------------------------------------
GMNA GME GMLAAM GMAP Delphi
------ ----- ------ ------ ------
Reported (2)
--------
Revenue $100,256 $24,106 $8,573 $2,980 $31,447
------- ------ ----- ----- ------
Pre-tax (loss) income (408) 256 536 (231) 379
Income tax (benefit)
expense (357) 121 43 (28) 129
Equity (loss) income and
minority interests (35) (152) 174 34 36
----- ----- ----- ----- -----
Net (loss) income $(86) $(17) $667 $(169) $286
===== ===== ===== ===== =====
Net (loss) profit margin (0.1%) (0.1%) 7.8% (5.7%) 0.9%
Effective income
tax rate 87.5% 47.3% 8.0% 12.1% 34.0%
Competitiveness Studies (5)
-----------------------
Revenue $(450) $- $- $(9) $-
----- ----- ----- ----- -----
Pre-tax income (3,708) (848) - (174) (1,362)
Income taxes (1,396) (360) - (13) (502)
Equity income and
minority interests (71) - - (9) (10)
----- ----- ----- ----- -----
Net income $(2,383) $(488) $- $(170) $(870)
===== ===== ===== ===== =====
Special Items (7)
Other Adjustments (9)
-----------------
Revenue $- $- $- $- $-
----- ----- ----- ----- -----
Pre-tax income (159) 216 - 4 75
Income taxes (85) 58 - 1 54
Equity income and
minority interests - - - - -
----- ----- ----- ----- -----
Net income $(74) $158 $- $3 $21
===== ===== ===== ===== =====
Adjusted (1)
--------
Revenue $100,706 $24,106 $8,573 $2,989 $31,447
------- ------ ----- ----- ------
Pre-tax income (loss) 3,459 888 536 (61) 1,666
Income tax expense
(benefit) 1,124 423 43 (16) 577
Equity income (loss) and
minority interests 36 (152) 174 43 46
----- ----- ----- ----- -----
Net income (loss) $2,371 $313 $667 $(2) $1,135
===== ===== ===== ===== =====
Net profit (loss) margin 2.4% 1.3% 7.8% (0.1%) 3.6%
Effective income
tax rate 32.5% 47.6% 8.0% 26.2% 34.6%
See footnotes beginning on page 19.
continues
- 17 -
HIGHLIGHTS - Years Ended Operating Information
Years Ended
December 31,
----------------------
1998 1997
--------- ----------
Worldwide Wholesale Sales (units in 000s)
United States: Cars 2,389 2,754
Trucks 2,051 2,177
------ ------
Total United States 4,440 4,931
Canada and Mexico 631 618
------ ------
Total GM North America 5,071 5,549
------ ------
GME 2,007 1,850
GMLAAM 652 785
GMAP 419 592
------ ------
Total International 3,078 3,227
------ ------
Total Worldwide 8,149 8,776
====== ======
....................................................
Vehicle Unit Deliveries (units in 000s)
United States
Chevrolet - Cars 876 981
- Trucks 1,551 1,504
Pontiac 536 609
GMC 468 468
Buick 398 438
Oldsmobile 330 305
Saturn 232 251
Cadillac 187 183
Other 31 27
------ ------
Total United States 4,609 4,766
Canada and Mexico 603 594
------ ------
Total GM North America 5,212 5,360
------ ------
GME 1,857 1,833
GMLAAM 653 746
GMAP 443 575
------ ------
Total International 2,953 3,154
------ ------
Total Worldwide 8,165 8,514
====== ======
....................................................
Market Share
United States
Cars 30.0% 32.4%
Trucks 27.6% 28.8%
Total 28.9% 30.8%
Total North America 28.9% 30.8%
Western Europe 10.6% 11.3%
Latin America 20.2% 19.6%
Asia and Pacific 4.1% 4.3%
Total Worldwide 15.7% 16.0%
.....................................................
U.S. Retail/Fleet Mix
% Fleet sales - Cars 26.4% 25.5%
% Fleet sales - Trucks 13.7% 13.0%
Total vehicles 20.5% 20.0%
.....................................................
Capacity Utilization %
U.S. and Canada (2-shift rated) 83.5% 94.4%
.....................................................
GMNA
Retail Incentives ($ per unit) $1,439 $1,027
Net Price (%) (1.2%) (0.6%)
.....................................................
See footnotes beginning on page 19.
continues
- 18 -
HIGHLIGHTS - Years Ended Other Financial Information
(Dollars in Millions Except Per Share Amounts)
Year Ended
December 31,
----------------------
1998 1997
--------- ----------
Depreciation and Amortization (10)
Depreciation $4,501 $5,901
Amortization of special tools 2,661 5,674
Amortization of intangible
assets 119 228
------ ------
Total $7,281 $11,803
====== ======
....................................................
Worldwide Payrolls (2) $26,516 $28,051
....................................................
(1) Adjusted amounts represent the reported amounts less the effects
of special items (including Competitiveness Studies), Hughes
Transactions and Other Adjustments. Adjusted amounts for 1998 and 1997
include the unfavorable effects of strike-related work stoppages. The
unfavorable after-tax impacts of the work stoppages were $2.0 billion
or $2.94 basic per share of $1-2/3 par value common stock in 1998 and
$330 million or $0.45 basic per share in 1997. The unfavorable
after-tax impacts for GMNA and Delphi were approximately $1.5 billion
and $450 million, respectively, in 1998 and $240 million and $90
million, respectively in 1997.
(2) Amounts reported for 1997 have been adjusted to reflect the changes to
GM's organizational structure resulting from the Hughes Transactions.
As such, Delphi reported amounts include Delco and Hughes reported
amounts exclude Delco and Hughes Defense.
(3) Data relates to a period prior to the date on which GM recapitalized
the Class H common stock as part of the Hughes Transactions("GM's
Recapitalization Date").
(4) Data relates to a period which is subsequent to GM's Recapitalization
Date.
(5) As a result of GM's continuing automotive competitiveness studies,
fourth quarter 1998 results were impacted by charges totaling $534
million ($420 million after-tax or $0.64 per share of $1-2/3 par value
common stock). These studies were performed in conjunction with GM's
current business planning cycle. In the fourth quarter 1997, GM
recorded pre-tax charges against income totaling $6.4 billion ($4.0
billion after-tax or $5.59 per share of $1-2/3 par value common stock).
(6) The third quarter 1998 results included a pre-tax loss of $430
million($271 million after-tax, or $0.41 basic per share of $1-2/3 par
value common stock) related to the sale of the Delphi seating, coil
spring and lighting businesses. The second-quarter 1998 results
included a pre-tax charge of $74 million ($44 million after-tax, or
$0.07 basic per share of $1-2/3 par value common stock), related to
work schedule modifications at Opel Belgium.
continues
- 19 -
HIGHLIGHTS - Years Ended Other Financial Information
(Dollars in Millions Except Per Share Amounts)
(7) 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. 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.
The second-quarter 1997 results included a pre-tax gain of $490
million($318 million after-taxes, or $0.33 basic per share of $1-2/3
par value common stock), that resulted from the merger of the satellite
service operations of Hughes and PanAmSat Corporation. The
second-quarter 1997 results also included a pre-tax gain of $128
million ($103 million after-tax, or $0.14 basic per share of $1-2/3 par
value common stock),related to the sale of GM Europe's equity interest
in Avis Europe.
(8) On December 17, 1997, GM completed the restructuring of its Hughes
Electronics subsidiary (Hughes Transactions), which resulted in a gain
of $4.3 billion or $5.91 per share of $1-2/3 par value common stock.
(9) Results have been adjusted for amounts necessary to reflect Delphi's
financial statements on the same basis as contained in their Form S-1
document filed with the Securities and Exchange Commission during the
fourth quarter of 1998, in connection with their anticipated initial
public offering.
(10)Amounts exclude depreciation and amortization charges incurred by the
financing and insurance operations.
continues
- 20 -
HIGHLIGHTS - List of Special Items by Quarter
Impact on Net Income
(Dollars in Millions)
Quarter
List of special items Ended Fav/(Unfav)
- ----------------------- ------- ----------
Competitiveness studies 12/31/98 $(420)
Sale of Delphi's seating, coil
spring and lighting businesses 9/30/98 (271)
Opel Belgium work schedule
modifications 6/30/98 (44)
-----
Total special items for 1998 $(735)
=====
Quarter
List of special items Ended Fav/(Unfav)
- ----------------------- ------- ----------
Competitiveness studies 12/31/97 $(4,039)
Gain from Hughes transactions 12/31/97 4,269
PanAmSat merger 6/30/97 318
Sale of Avis Europe 6/30/97 103
Volkswagen settlement 3/31/97 55
Delphi - Trenton, NJ plant closing 3/31/97 (50)
-----
Total special items for 1997 $656
=====
- 21 -
CONSOLIDATED STATEMENTS OF INCOME
Quarter Ended
December 31,
------------------
1998 1997
---- ----
(Dollars in Millions)
AUTOMOTIVE, ELECTRONICS AND
OTHER OPERATIONS
Manufactured products revenue $40,747 $39,416
Other income 904 5,290
------ ------
Total net sales and revenue 41,651 44,706
------ ------
Cost of sales and other operating charges,
exclusive of items listed below 32,723 34,426
Selling, general, administrative and
other expenses 3,850 3,937
Depreciation and amortization expense 2,199 6,176
------ ------
Total operating costs and expenses 38,772 44,539
------ ------
Other expenses 269 133
Interest expense 278 298
Net (income) from transactions with
Financing and Insurance Operations (35) (13)
------ ------
Income from continuing operations
before income taxes and
minority interests 2,367 (251)
Income tax expense (benefit) 782 (1,773)
Minority interest (2) 16
Earnings (losses) of nonconsolidated
affiliates (130) (94)
------ ------
Net income - Automotive, Electronics
and Other Operations $1,453 $1,444
====== ======
Quarter Ended
December 31,
------------------
1998 1997
---- ----
(Dollars in Millions)
FINANCING AND INSURANCE OPERATIONS
Financing and insurance revenues $3,495 $3,199
Other income 1,220 1,086
------ ------
Total revenues and other income 4,715 4,285
------ ------
Interest expense 1,478 1,346
Depreciation and amortization 1,290 1,244
Operating and other expenses 1,047 796
Provisions for credit losses 140 127
Insurance losses and loss adjustment
expenses 253 295
------ ------
Total costs and expenses 4,208 3,808
------ ------
Net expense from transactions with
Automotive 35 13
------ ------
Income before income taxes 472 464
Income tax expense 149 167
Minority interest (4) (4)
------ ------
Net income - Financing and
Insurance Operations $319 $293
====== ======
- 22 -
CONSOLIDATED STATEMENTS OF INCOME - Continued
Quarter Ended
December 31,
------------------
1998 1997
---- ----
(Dollars in Millions)
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
Manufactured products revenue $40,747 $39,416
Financing and insurance revenues 3,495 3,199
Other income 2,124 6,376
------ ------
Total net sales and revenue 46,366 48,991
------ ------
Cost of sales and other operating charges,
exclusive of items listed below 32,723 34,426
Selling, general, administrative and
other expenses 4,897 4,733
Depreciation and amortization expense 3,489 7,420
Interest expense 1,756 1,644
Other expenses 662 555
------ ------
Total costs and expenses 43,527 48,778
------ ------
Income from continuing operations before
income taxes
and minority interests 2,839 213
Income tax expense 931 (1,606)
Minority interest (6) 12
Earnings (losses) of nonconsolidated
affiliates (130) (94)
------ ------
Net income $1,772 $1,737
------ ------
Premium on exchange of/tender offer for
preference stocks - -
Dividends on preference stocks (15) (16)
------ ------
Earnings on common stocks $1,757 $1,721
====== ======
- 23 -
CONSOLIDATED STATEMENTS OF INCOME
Years Ended December 31,
-------------------------
1998 1997 1996
---- ---- ----
(Dollars in Millions)
AUTOMOTIVE, ELECTRONICS AND
OTHER OPERATIONS
Manufactured products revenue $140,433 $153,683 $145,341
Other income 2,598 8,084 2,849
------- ------- -------
Total net sales and revenue 143,031 161,767 148,190
------- ------- -------
Cost of sales and other operating
charges, exclusive of items
listed below 117,973 130,028 123,195
Selling, general, administrative
and other expenses 13,311 13,386 11,999
Depreciation and amortization expense 7,281 11,803 7,145
------- ------- -------
Total operating costs and expenses 138,565 155,217 142,339
------- ------- -------
Other expenses 782 241 792
Interest expense 1,050 863 771
Net expense (income) from transactions
with Financing and Insurance
Operations 82 (101) (125)
------ ------ ------
Income from continuing operations
before income taxes and minority
interests 2,552 5,547 4,413
Income tax expense 845 155 885
Minority interest 11 66 56
(Losses) earnings of
nonconsolidated affiliates (184) (78) 128
------ ------ ------
Income from continuing operations 1,534 5,380 3,712
Income from discontinued operations - - 10
------ ------ -------
Net income - Automotive, Electronics
and Other Operations $1,534 $5,380 $3,722
====== ====== ======
- 24 -
CONSOLIDATED STATEMENTS OF INCOME - Continued
Years Ended December 31,
-------------------------
1998 1997 1996
---- ---- ----
(Dollars in Millions)
FINANCING AND INSURANCE OPERATIONS
Financing and insurance revenues $13,585 $12,762 $12,674
Other income 4,699 3,723 3,021
------ ------ ------
Total revenues and other income 18,284 16,485 15,695
------ ------ ------
Interest expense 5,843 5,250 4,924
Depreciation and amortization 4,920 4,813 4,695
Operating and other expenses 4,019 2,806 2,581
Provisions for credit losses 463 523 669
Insurance losses and loss
adjustment expenses 1,061 747 622
------ ------ ------
Total costs and expenses 16,306 14,139 13,491
------ ------ ------
Net (income) expense from
transactions with Automotive (82) 101 125
------ ------ ------
Income before income taxes 2,060 2,245 2,079
Income tax expense 618 914 838
Minority interest (20) (13) -
------ ------ ------
Net income - Financing and
Insurance Operations $1,422 $1,318 $1,241
====== ====== ======
- 25 -
CONSOLIDATED STATEMENTS OF INCOME - Continued
Years Ended December 31,
-------------------------
1998 1997 1996
---- ---- ----
(Dollars in Millions
Except Per Share Amounts)
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
Manufactured products revenue $140,433 $153,683 $145,341
Financing and insurance revenues 13,585 12,762 12,674
Other income 7,297 11,807 5,870
------- ------- -------
Total net sales and revenue 161,315 178,252 163,885
------- ------- -------
Cost of sales and other operating
charges, exclusive of items
listed below 117,973 130,028 123,195
Selling, general, administrative
and other expenses 17,330 16,192 14,580
Depreciation and amortization expense 12,201 16,616 11,840
Interest expense 6,893 6,113 5,695
Other expenses 2,306 1,511 2,083
------- ------- -------
Total costs and expenses 156,703 170,460 157,393
------- ------- -------
Income from continuing operations
before income taxes and
minority interests 4,612 7,792 6,492
Income tax expense 1,463 1,069 1,723
Minority interest (9) 53 56
(Losses) earnings of nonconsolidated
affiliates (184) (78) 128
------ ------ ------
Income from continuing operations $2,956 $6,698 $4,953
------ ------ ------
Income from discontinued operations - - 10
------ ------ ------
Net income $2,956 $6,698 $4,963
------ ------ ------
Premium on exchange of/tender
offer for preference stocks - 26 -
Dividends on preference stocks 63 72 81
------ ------ ------
Earnings on common stocks $2,893 $6,600 $4,882
====== ====== ======
- 26 -
CONSOLIDATED STATEMENTS OF INCOME - Continued
Years Ended December 31,
-------------------------
1998 1997 1996
---- ---- ----
(Dollars in Millions
Except Per Share Amounts)
Basic earnings per share
attributable to common stocks
$1-2/3 par value common stock
Continuing operations $4.26 $8.70 $6.07
Discontinued operations - - (0.01)
---- ---- ----
Earnings per share attributable
to $1-2/3 par value $4.26 $8.70 $6.06
==== ==== ====
Income from discontinued operations
attributable to Class E $ - $ - $0.04
==== ==== ====
Earnings per share attributable
to Class H (prior to its
recapitalization on
December 17, 1997) $ - $3.17 $2.88
==== ==== ====
Earnings per share attributable
to Class H (subsequent to its
recapitalization on
December 17, 1997) $0.68 $0.02 $ -
==== ==== ====
Diluted earnings per share
attributable to common stocks
$1-2/3 par value common stock
Continuing operations $4.18 $8.62 $6.03
Discontinued operations - - (0.01)
---- ---- ----
Earnings per share attributable
to $1-2/3 par value $4.18 $8.62 $6.02
==== ==== ====
Income from discontinued operations
attributable to Class E $ - $ - $0.04
==== ==== ====
Earnings per share attributable
to Class H (prior to its
recapitalization on
December 17, 1997) $ - $3.17 $2.88
==== ==== ====
Earnings per share attributable
to Class H (subsequent to its
recapitalization on
December 17, 1997) $0.68 $0.02 $ -
==== ==== ====
* * * * * *
- 27 -
HUGHES 1998 RESULTS PROPELLED BY
RECORD DIRECTV SUBSCRIBER GROWTH
El Segundo, Calif., January 20, 1999--Hughes Electronics Corporation today
reported its fourth quarter and full-year 1998 financial results.
"Our revenues increased 16.3% for 1998," said Michael T. Smith, Hughes
chairman and chief executive officer. "And, excluding one-time items,
earnings increased 50.5%."
Revenues for 1998 were $5,963.9 million compared with $5,128.3 million in
1997. Smith stated that each of Hughes' four primary business segments
contributed to the revenue growth, with the DIRECTV(R) businesses generating the
majority of the increase.
"Our U.S. DIRECTV business achieved its best year ever for subscriber
growth, contributing to a 42% increase in 1998 revenues for the direct-to-home
broadcast segment," Smith said. "Additionally, Hughes Space and Communications
Company (HSC) posted another year of double-digit growth in satellite sales, we
completed the integration of PanAmSat following our 1997 merger, and Hughes
Network Systems (HNS) grew revenues with a four-fold increase in sales of
DIRECTV receiver equipment. In fact, those increased equipment sales were an
important factor in DIRECTV's ability to achieve its record subscriber numbers
in the United States."
Earnings(1) for 1998, excluding one-time items, increased to $165.9
million compared with $110.2 million in 1997, resulting in earnings per share on
the same basis for the full year of $0.41 per share versus pro forma earnings
per share(2) of $0.28 in 1997.
"DIRECTV, HSC and PanAmSat all contributed to this earnings growth," Smith
said, noting that additional earnings were attributable to higher interest
income and lower interest expense, which more than offset lower HNS earnings and
the impact from Hughes' minority share of DIRECTV Japan(TM) start-up losses.
Earnings in 1998 were $271.7 million ($0.68 per share) compared with last
year's $470.7 million ($1.18 per share on a pro forma basis) in 1997.
"The change in our year-over-year earnings is largely attributable to the
one-time after-tax gain of $318.3 million ($0.80 per share) we reported in 1997
arising from the PanAmSat merger," Smith explained.
One-time items included in the 1998 results were a favorable adjustment to
the income tax provision in the fourth quarter of $115.0 million ($0.29 per
share), which resulted from a tax settlement with the Internal Revenue Service
(IRS), and a $9.2 million after-tax charge ($0.02 per share) for the cumulative
effect of an accounting change mandated by the American Institute of Certified
Public Accountants for the write-off of previously capitalized start-up costs.
Additional one-time items included in the 1997 results were a $62.8
million after-tax gain ($0.16 per share) related to the sale of Hughes-Avicom
International, and a $20.6 million after-tax extraordinary charge ($0.05 per
share) associated with PanAmSat's tender offer to retire its high-yield debt
securities.
Operating profit(1) in 1998 was $270.1 million compared with $306.4
million last year. Full-year 1998 operating profit margin on the same basis
was 4.5% versus 6.0% in 1997. Smith said the lower 1998 operating profit and
margin were principally a result of lower sales of wireless telephone systems
and private business networks in the Asia Pacific region, as well as
provisions for estimated losses at HNS associated with uncollectible
amounts from certain wireless customers.
- 28 -
Fourth Quarter Financial Review
Revenues for the fourth quarter increased 5.7% to $1,790.6 million
compared with $1,694.6 million for the same period in 1997. This growth was
primarily the result of record DIRECTV U.S. subscriber growth and higher sales
of commercial satellites.
Fourth quarter operating profit(1) was $40.8 million versus $91.8 million
in 1997. The majority of the decline was due to losses in HNS' international
wireless telephone business, which are attributable to lower sales and a
provision for uncollectible amounts from a customer in the Asia Pacific region.
Also contributing to the operating profit decline in the fourth quarter were
higher operating losses associated with DIRECTV in Latin America, and increased
operating costs related to PanAmSat's satellite fleet expansion. Operating
profit margin, on the same basis, was 2.3% in the quarter compared with 5.4% in
1997. The decline in operating profit margin was also impacted by higher
development costs for HSC's geostationary mobile telephony product line.
Earnings(1) in the fourth quarter of 1998 were $128.2 million compared with
$70.0 million last year. Earnings per share on the same basis were $0.32 in the
quarter versus pro forma earnings per share(2) of $0.18 in 1997. Excluding
one-time items, earnings were $13.2 million compared with $27.8 million in last
year's fourth quarter, resulting in earnings per share of $0.03 in the period
versus $0.07 in 1997.
The 1998 fourth quarter one-time item was the favorable adjustment to the
income tax provision ($115.0 million, $0.29 per share), which resulted from an
IRS tax settlement. One-time items included in the 1997 fourth quarter results
were the after-tax gain related to the sale of Hughes-Avicom International
($62.8 million, $0.16 per share) and the after-tax extraordinary charge related
to PanAmSat's tender offer to retire its high-yield debt securities ($20.6
million, $0.05 per share).
The decline in earnings and earnings per share was principally a result of
the quarter's lower operating profit, as well as higher losses related to the
first full year of service for DIRECTV Japan, a 32% Hughes-owned affiliate.
These reductions to earnings more than offset the improvements resulting from
increased interest income and lower interest expense.
SEGMENT FINANCIAL REVIEW
FULL YEAR AND FOURTH QUARTER 1998
Direct-To-Home Broadcast
Full Year 1998. Revenues for the full year rose 42.2% to $1,816.1 million from
$1,276.9 million in 1997. The increase was driven by record U.S. subscriber
growth, strong average monthly revenue per subscriber and low subscriber churn
rates. As a result of DIRECTV's best-ever year of 1,157,000 net new subscribers
in the United States, domestic DIRECTV revenues rose 45% to $1,604 million. The
company's Latin American DIRECTV subsidiary, Galaxy Latin America(TM) (GLA(TM)),
with 184,000 net new subscribers in 1998, more than doubled its revenues in 1998
to $141 million.
Operating loss in 1998 improved to $228.1 million compared with an
operating loss of $254.6 million in 1997. This was principally due to continued
strong subscriber growth, and the resulting lower operating loss, in the
domestic DIRECTV business--which more than offset higher GLA operating losses
attributable to increased sales and marketing expenditures. The full-year 1998
operating loss for domestic DIRECTV was $100 million compared with $137 million
in 1997. GLA's operating loss was $126 million in 1998 versus $116 million in
1997.
- 29 -
Fourth Quarter 1998. Fourth quarter revenues increased 36.5% to $567.6 million
from $415.9 million in the fourth quarter of 1997. The increase resulted from
continued strong subscriber growth and average monthly revenue per subscriber,
as well as low subscriber churn rates. Domestic DIRECTV propelled this growth
with quarterly revenues of $476 million, a 44% increase over last year's fourth
quarter revenues of $330 million. With 400,000 net new subscribers in the fourth
quarter, total DIRECTV subscribers grew to 4,458,000 in the United States as of
December 31, 1998. GLA had fourth quarter revenues of $41 million compared with
$28 million in 1997. With the addition of 61,000 net new subscribers in the
fourth quarter, total DIRECTV subscribers in Latin America were 484,000 as of
December 31, 1998. In addition, DIRECTV Japan had a total of 231,000 subscribers
by the end of 1998.
The segment operating loss in the fourth quarter was $94.5 million
compared with an operating loss of $95.9 million in the fourth quarter of 1997.
Continued strong subscriber growth resulted in lower fourth quarter 1998
operating losses for the domestic DIRECTV business ($53 million in 1998 compared
with $62 million last year). These were offset by higher GLA fourth quarter
operating losses ($42 million in 1998 compared with $27 million last year),
which were primarily due to the increased cost of the new higher capacity Galaxy
VIII-I satellite, which was deployed in spring of 1998, as well as increased
subscriber acquisition costs.
Satellite Services
Full Year 1998. Full-year 1998 revenues increased 21.8% to $767.3 million
compared with $629.9 million in 1997. The increase was primarily due to the May
1997 PanAmSat merger and increased operating lease revenues, which were
partially offset by a decrease in sales and sales-type lease revenues.
As a result of this revenue growth, operating profit in 1998 rose 8.6% to
$321.6 million versus $296.2 million last year. Operating profit margin for the
year declined to 41.9% from 47.0% in 1997, principally due to a full year of
goodwill amortization associated with the PanAmSat merger.
Fourth Quarter 1998. PanAmSat's fourth quarter 1998 revenues were $196.7 million
compared with $197.9 million in the prior year. This slight change was due
primarily to lower revenues on the PAS-6 satellite due to its reduction in
usable capacity, which was partially offset by revenues associated with new
service agreements, particularly in data and Internet-related services.
PanAmSat's operating profit in the quarter was $82.4 million versus $93.3
million in 1997. Operating profit margin in the fourth quarter was 41.9%
compared with 47.1% one year ago. The decrease was primarily attributable to
increased operating costs associated with the expansion of PanAmSat's worldwide
operations.
Satellite Systems
Full Year 1998. For the full year, revenues were $2,831.1 million, a 13.6%
increase over 1997 revenues of $2,491.9 million. The increase was principally
due to higher commercial satellite sales to customers such as ICO Global
Communications, PanAmSat, Thuraya Satellite Telecommunications Company and
Orion Asia Pacific Corporation.
Driven by this revenue growth, operating profit in 1998 increased 8.8% to
$246.3 million compared with $226.3 million last year. Operating profit margin
declined to 8.7% from 9.1% last year primarily due to higher development costs
for the geostationary mobile telephony and HS 702 satellite product lines.
Fourth Quarter 1998. For the fourth quarter of 1998, revenues increased 13.4% to
$843.1 million from revenues of $743.8 million for the same period in 1997. The
increase was principally due to higher commercial satellite sales to customers
such as ICO Global Communications, PanAmSat, DIRECTV and Thuraya Satellite
Telecommunications Company.
Operating profit in the quarter was $67.4 million compared with $66.6
million in the prior year. Operating profit margin in the quarter declined to
8.0% versus 9.0% last year. The decline in operating profit margin was primarily
due to higher development costs related to the geostationary mobile telephony
and HS 702 satellite product lines.
- 30 -
Network Systems
Full Year 1998. Full-year revenues for Hughes Network Systems (HNS) were
$1,076.7 million compared with $1,011.3 million in 1997. This improvement was
driven primarily by the increase in sales of DIRECTV receiver equipment, which
more than offset lower international sales of wireless telephone systems and
private business networks, primarily in the Asia Pacific region.
HNS operating profit in 1998 was $10.9 million versus $74.1 million last
year. Operating profit margin declined to 1.0% from 7.3% in 1997. The decline in
operating profit and operating profit margin was mostly due to lower
international sales of wireless telephone systems and private business networks,
and provisions for estimated losses related to uncollectible amounts due from
certain wireless customers.
Fourth Quarter 1998. Fourth quarter revenues for HNS were $402.6 million
compared with $401.9 million in the same period last year. Increased sales of
DIRECTV receiver equipment offset the impact from lower international sales of
wireless telephone systems, predominantly in the Asia Pacific region.
HNS operating profit in the quarter was $31.1 million compared with $68.0
million in the fourth quarter of 1997. Operating profit margin declined to 7.7%
compared with 16.9% last year. The decline in operating profit and margin was
principally a result of lower international sales of wireless systems and a
provision for uncollectible amounts due from a wireless telephony customer.
BALANCE SHEET
The cash balance of $1,342.1 million at December 31, 1998, declined
$1,441.7 million from December 31, 1997. This variance consisted primarily of
two items: an additional investment of $851.4 million in PanAmSat in May 1998,
which increased Hughes' ownership from 71.5% to 81.0%, and a $204.7 million cash
payment to General Motors (GM) in connection with the finalization of the
purchase price adjustment amount related to the transfer of Delco Electronics to
GM in December 1997 as part of the Hughes Transactions (the Hughes Transactions
also included the spin-off and subsequent merger of Hughes Defense with Raytheon
Company).
Hughes Electronics Corporation is a unit of General Motors Corp. The
earnings of Hughes Electronics are used to calculate the earnings per share
attributable to GMH (NYSE symbol) common stock.
# # #
- ----------------------
(1)Excludes the effects of purchase accounting adjustments related to General
Motors' (GM) acquisition of Hughes 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.
- 31 -
STATEMENT OF INCOME AND
AVAILABLE SEPARATE CONSOLIDATED NET INCOME
(Dollars in Millions Except Per Share Amounts)
Year Ended
Fourth Quarter December 31,
1998 1997 1998 1997
- ---------------------------------------------------------------------------
Revenues
Product sales $1,032.8 $1,017.7 $3,360.3 $3,143.6
Direct broadcast, leasing and
other services 757.8 676.9 2,603.6 1,984.7
- ----------------------------------------------------------------------------
Total Revenues 1,790.6 1,694.6 5,963.9 5,128.3
- ----------------------------------------------------------------------------
Operating Costs and Expenses
Cost of products sold 844.9 781.9 2,627.3 2,493.3
Broadcast programming and
other costs 375.5 313.9 1,175.7 912.3
Selling, general, and
administrative expenses 404.8 405.9 1,457.0 1,119.9
Depreciation and amortization 124.6 101.1 433.8 296.4
Amortization of GM purchase
accounting adjustments (1) 5.1 5.1 21.0 21.0
- ----------------------------------------------------------------------------
Total Operating Costs and
Expenses 1,754.9 1,607.9 5,714.8 4,842.9
- ----------------------------------------------------------------------------
Operating Profit 35.7 86.7 249.1 285.4
Interest income 23.7 15.0 112.3 33.1
Interest expense (8.0) (32.9) (17.5) (91.0)
Other, net (50.3) (61.9) (153.1) 390.7
- ----------------------------------------------------------------------------
Income from Continuing Operations
Before Income Taxes, Minority
Interests, Extraordinary Item
and Cumulative Effect of
Accounting Change 1.1 6.9 190.8 618.2
Income taxes (116.8) (7.8) (44.7) 236.7
Minority interests in net
losses of subsidiaries 5.2 8.0 24.4 24.8
- ----------------------------------------------------------------------------
Income from continuing operations 123.1 22.7 259.9 406.3
Income from discontinued operations,
net of taxes - - - 1.2
Gain on sale of discontinued
operations, net of taxes - 62.8 - 62.8
- ----------------------------------------------------------------------------
Income before extraordinary item
and cumulative effect of
accounting change 123.1 85.5 259.9 470.3
Extraordinary item, net of taxes - (20.6) - (20.6)
Cumulative effect of accounting
change, net of taxes (3) - - (9.2) -
- ----------------------------------------------------------------------------
Net Income 123.1 64.9 250.7 449.7
Adjustments to exclude the effect
of GM purchase accounting
adjustments (1) 5.1 5.1 21.0 21.0
- ----------------------------------------------------------------------------
Net Earnings Used for Computation
of Available Separate
Consolidated Net Income $128.2 $70.0 $271.7 $470.7
============================================================================
Available Separate Consolidated
Net Income (2) $33.9 $18.0 $71.5 $119.4
============================================================================
Net Earnings Attributable to
General Motors Class H
Common Stock on a Per Share
Basis (2) $0.32 $0.18 $0.68 $1.18
============================================================================
(1)Relates to General Motors' purchase of Hughes 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.
(3)Although Hughes adopted Statement of Position (SOP) 98-5, "Reporting on the
Costs of Start-Up Activities" in the fourth quarter of 1998, the SOP requires
restatement of Hughes' interim period results as if the SOP was adopted as of
the beginning of the year. Accordingly, net income and earnings per share for
the first quarter of 1998 have been restated to reflect reductions of $9.2
million and $0.02, respectively. The impact on the second and third quarters
of 1998 were not significant.
- 32 -
BALANCE SHEET
(Dollars in Millions)
December 31, December 31,
ASSETS 1998 1997
- -----------------------------------------------------------------------------
Current Assets
Cash and cash equivalents $1,342.1 $2,783.8
Accounts and notes receivable 922.4 630.0
Contracts in process 783.5 575.6
Inventories 471.5 486.4
Prepaid expenses, deferred income taxes and other 326.9 297.3
- ----------------------------------------------------------------------------
Total Current Assets 3,846.4 4,773.1
Satellites - Net 3,197.5 2,643.4
Property - Net 1,059.2 889.7
Net Investment in Sales-type Leases 173.4 337.6
Intangible Assets - Net 3,552.2 2,954.8
Investments and Other Assets 1,606.3 1,132.4
- ----------------------------------------------------------------------------
Total Assets $13,435.0 $12,731.0
============================================================================
LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities
Accounts payable $764.1 $472.8
Advances on contracts 291.8 209.8
Deferred revenues 43.8 77.8
Notes payable and current portion of long-term debt 156.1 -
Accrued liabilities 753.7 689.4
- ----------------------------------------------------------------------------
Total Current Liabilities 2,009.5 1,449.8
Long-Term Debt 778.7 637.6
Deferred Gains on Sales and Leasebacks 121.5 191.9
Accrued Operating Leaseback Expense 56.0 100.2
Postretirement Benefits Other Than Pensions 150.7 154.8
Other Liabilities and Deferred Credits 811.1 706.4
Deferred Income Taxes 643.9 570.8
Minority Interests 481.7 607.8
Stockholder's Equity 8,381.9 8,311.7
- ----------------------------------------------------------------------------
Total Liabilities and Stockholder's Equity $13,435.0 $12,731.0
============================================================================
Certain 1997 amounts have been reclassified to conform with the 1998
presentation.
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).
- 33 -
STATEMENT OF CASH FLOWS
(Dollars in Millions)
Years Ended December 31,
------------------------
1998 1997
- ----------------------------------------------------------------------------
Cash Flows from Operating Activities
Net income $250.7 $449.7
Adjustments to reconcile net income to net
cash provided by continuing operations
Income from discontinued operations - (1.2)
Gain on sale of discontinued operations - (62.8)
Extraordinary item, net of taxes - 20.6
Cumulative effect of accounting change,
net of taxes 9.2 -
Depreciation and amortization 433.8 296.4
Amortization of GM purchase accounting
adjustments related to Hughes 21.0 21.0
Net gain on sale of investments and
businesses sold (13.7) (489.7)
Gross profit on sales-type leases - (33.6)
Deferred income taxes and other 153.2 285.5
Change in other operating assets and liabilities
Accounts and notes receivable (97.5) (195.2)
Contracts in process (230.9) (174.2)
Inventories 20.2 (60.7)
Collections of principal on net
investment in sales-type leases 40.6 22.0
Accounts payable 277.3 (184.1)
Advances on contracts 82.0 (95.6)
Deferred revenues (34.0) (65.0)
Accrued liabilities 66.8 217.8
Deferred gains on sales and leasebacks (36.2) (42.9)
Other (67.3) (102.5)
- -----------------------------------------------------------------------------
Net Cash Provided by Continuing Operations 875.2 10.5
Net Cash Used by Discontinued Operations - (15.9)
- -----------------------------------------------------------------------------
Net Cash Provided by (Used in) Operating
Activities 875.2 (5.4)
- -----------------------------------------------------------------------------
Cash Flows from Investing Activities
Investment in companies, net of cash acquired (1,240.3) (1,798.8)
Expenditures for property (343.6) (251.3)
Increase in satellites (945.2) (633.5)
Proceeds from sale of long-term investments - 242.0
Early buy-out of satellite under sale and leaseback (155.5) -
Proceeds from sale of discontinued operations - 155.0
Proceeds from disposal of property 20.0 55.1
Proceeds from disposal of investments 12.4 -
Proceeds from insurance claims 398.9 -
- -----------------------------------------------------------------------------
Net Cash Used in Investing Activities (2,253.3) (2,231.5)
- -----------------------------------------------------------------------------
Cash Flows from Financing Activities
Long-term debt borrowings 1,165.2 2,383.3
Repayment of long-term debt (1,024.1) (2,851.9)
Premium paid to retire debt - (34.4)
Contributions from Parent Company - 1,124.2
Payment to General Motors for Delco post-closing
price adjustment (204.7) -
Capital proceeds resulting from Hughes transactions - 4,392.8
- ----------------------------------------------------------------------------
Net Cash (Used in) Provided by
Financing Activities (63.6) 5,014.0
- ----------------------------------------------------------------------------
Net (decrease) increase in cash and
cash equivalents (1,441.7) 2,777.1
Cash and cash equivalents at beginning of the year 2,783.8 6.7
- ----------------------------------------------------------------------------
Cash and cash equivalents at end of the year $1,342.1 $2,783.8
============================================================================
Certain 1997 amounts have been reclassified to conform with the 1998
presentation.
- 34 -
PRO FORMA SELECTED SEGMENT DATA*
(Dollars in Millions)
Year Ended
Fourth Quarter December 31,
----------------- ----------------
1998 1997 1998 1997
- -------------------------------------------------------------------------
DIRECT-TO-HOME BROADCAST
Total Revenues $567.6 $415.9 $1,816.1 $1,276.9
Operating Loss $(94.5) $(95.9) $(228.1) $(254.6)
Depreciation and Amortization $25.1 $23.6 $102.3 $86.1
Capital Expenditures (1) $100.7 $51.4 $230.8 $105.6
- --------------------------------------------------------------------------
SATELLITE SERVICES
Total Revenues $196.7 $197.9 $767.3 $629.9
Operating Profit $82.4 $93.3 $321.6 $296.2
Operating Profit Margin 41.9% 47.1% 41.9% 47.0%
Depreciation and Amortization $61.9 $50.0 $231.7 $141.9
Capital Expenditures (2) $316.7 $82.0 $921.7 $625.7
- --------------------------------------------------------------------------
SATELLITE SYSTEMS
Total Revenues $843.1 $743.8 $2,831.1 $2,491.9
Operating Profit $67.4 $66.6 $246.3 $226.3
Operating Profit Margin 8.0% 9.0% 8.7% 9.1%
Depreciation and Amortization $14.1 $11.7 $49.2 $39.4
Capital Expenditures $49.2 $45.7 $99.7 $113.9
- --------------------------------------------------------------------------
NETWORK SYSTEMS
Total Revenues $402.6 $401.9 $1,076.7 $1,011.3
Operating Profit $31.1 $68.0 $10.9 $74.1
Operating Profit Margin 7.7% 16.9% 1.0% 7.3%
Depreciation and Amortization $11.9 $10.3 $41.7 $32.0
Capital Expenditures $13.6 $10.1 $40.0 $43.1
- --------------------------------------------------------------------------
ELIMINATIONS and OTHER
Total Revenues $(219.4) $(64.9) $(527.3) $(281.7)
Operating (Loss) $(45.6) $(40.2) $(80.6) $(35.6)
Depreciation and Amortization $11.6 $5.5 $8.9 $(3.0)
Capital Expenditures $21.8 $85.9 $136.3 $(61.7)
- ---------------------------------------------------------------------------
CONSOLIDATED TOTAL
Total Revenues $1,790.6 $1,694.6 $5,963.9 $5,128.3
Operating Profit $40.8 $91.8 $270.1 $306.4
Depreciation and Amortization $124.6 $101.1 $433.8 $296.4
Capital Expenditures $502.0 $275.1 $1,428.5 $826.6
==========================================================================
* The Financial Statements reflect the application of purchase accounting
adjustments related to GM's acquisition of Hughes. 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, are presented.
(1)Includes expenditures related to satellites amounting to $32.2 million and
$70.2 million in the fourth quarter and twelve month period of 1998.
(2)Includes expenditures related to satellites amounting to $304.1 million,
$78.8 million, $726.3 million and $606.1 million, respectively. Also included
in the year ended December 31, 1998 amount is $155.5 million related to the
early buy-out of satellite sale-leasebacks.
- 35 -
GMAC ANNOUNCES YEAR-END EARNINGS
DETROIT -- GMAC (General Motors Acceptance Corporation) reported 1998
consolidated net income of $1,325 million, up 2% from the $1,301 million earned
in 1997, GMAC President John D. Finnegan announced today. These earnings were
the highest recorded by GMAC since 1991 and represent the fourth consecutive
year of increased earnings.
In 1998, net income from automotive financing operations totaled $984
million, up 8% from the $910 million earned in 1997. Earnings were higher due to
retail asset growth, reduced credit losses and a lower effective income tax
rate, partially offset by lower net interest margins and lower wholesale volume
(due to the midsummer General Motors strike).
GMAC Insurance Holdings Inc. generated net income of $226 million in
1998, up slightly from $224 million earned last year.
GMAC Mortgage Group Inc. generated net income of $115 million in 1998,
down from $167 million earned in 1997. Earnings were lower largely reflecting
reduced mortgage asset values due to higher prepayment levels.
Fourth quarter GMAC 1998 results totaled $298 million, up 7% from the $279
million earned in the final quarter of 1997. For the quarter, net income from
automotive financing operations totaled $200 million, up 8% from $186 million
earned a year ago. GMAC Insurance's earnings for the fourth quarter 1998 totaled
$38 million, compared to $54 million earned in the same quarter one year ago.
GMAC Mortgage Group earnings were $60 million, up 52% from one year ago.
- 36 -
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 January 20, 1999
-----------------
By
s/Peter R. Bible
-------------------------------
(Peter R. Bible,
Chief Accounting Officer)
- 37 -
