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, 2000
----------------
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.)
300 Renaissance Center, Detroit, Michigan 48265-3000
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, 2000, 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 is the
fourth quarter earnings release for GM, and their subsidiary Hughes Electronics
Corporation's (Hughes) earnings release dated January 19, 2000.
GM REPORTS RECORD ANNUAL REVENUES OF $176.6 BILLION FOR 1999
REVENUE GROWTH DRIVES RECORD ANNUAL EARNINGS OF $8.53 PER SHARE
DETROIT -- Record calendar-year revenues and earnings were reported today
by General Motors Corp. (NYSE: GM) on continued strong performance by its
automotive operations and record earnings at General Motors Acceptance Corp.
(GMAC).
- GM's consolidated net sales and revenues totaled a record $176.6 billion
in calendar-year 1999, an increase of 13.6 percent compared with the
prior year when revenues were $155.4 billion.
- The revenue growth in 1999 helped drive a record $8.53 diluted earnings
per share of GM $1-2/3 par value common stock for the calendar year,
compared with $4.32 per share in 1998.
- Income during 1999 totaled $5.6 billion, compared with $3.0 billion in
the prior year.
- Excluding special items (see "Highlights" for details), 1999 income
totaled a record $5.7 billion, or $8.62 per share.
- GM's global automotive operations generated record income of $5.0
billion in 1999, driven by GM North America's record income of $4.8
billion.
- GMAC had record income totaling $1.5 billion in 1999.
- GM's fourth-quarter-1999 revenues totaled $46.3 billion, compared with
$44.6 billion in 1998.
- Income for the fourth quarter of 1999 totaled $1.1 billion, or $1.86 per
share, compared with $1.7 billion, or $2.48 per share, in the prior-year
period.
"We're pleased that our financial performance remained on track even as we
faced unceasing competitive pressures," said GM Chairman and Chief Executive
Officer John F. Smith, Jr. "Record market demand in North America and Europe
fueled increased sales of GM vehicles in these intensely competitive markets,
while we continued to be affected by economic pressures in Latin America and the
Asia-Pacific region. We're particularly gratified by the record performance of
our automotive operations in North America, and GMAC," he said.
"As we close the books on the decade of the 90s, we feel we've taken a
number of important steps to secure the future of General Motors," Smith said.
"Very significant among these were our strong financial turnaround; the
restructuring of the corporation with the separation of Delphi Automotive
Systems, Hughes Defense, and Electronic Data Systems; the global integration of
our automotive operations and expansion of our strategic global alliances; and
our aggressive move into e-commerce, including the establishment of e-GM and GM
TradeXchange.
- 2 -
"We enter the 21st century with a strong foundation," Smith said, "and
we'll need to be even stronger as we face the tough challenges and boundless
opportunities ahead of us. We are implementing our plans to make General Motors
a faster, leaner, more innovative and customer-focused enterprise."
Cash, marketable securities, and assets of the Voluntary Employees'
Beneficiary Association (VEBA) trust invested in short-term fixed-income
securities totaled $14.4 billion at Dec. 31, 1999, compared with $13.1 billion
at Dec. 31, 1998, and $16.7 billion at Sept. 30, 1999. These cash amounts
exclude GM's financing and insurance operations.
"The strength of our cash position allowed us to complete our latest $4
billion stock-repurchase program, and take advantage of growth opportunities by
expanding and strengthening our global automotive partnerships, along with
funding our strong commitment to new products," Smith said.
During the fourth quarter of 1999, GM repurchased 23.3 million shares of
its $1-2/3 par value common stock worth $1.6 billion. Since January 1997, GM has
repurchased approximately 140 million shares of GM $1-2/3 par value common stock
worth $9.0 billion, or more than 18 percent of the total shares outstanding.
The corporation's 1999-calendar-year return on net assets (RONA), excluding
Hughes, was 14.0 percent. "RONA performance in 1999 was well above our
12.5-percent target," Smith said. "We are focused on further improving this
performance to maintain our financial strength and provide a superior return to
our shareholders."
Unless otherwise noted, corporate and sector data in the remainder of this
release exclude special items (see "Highlights" for fourth-quarter and
calendar-year data).
GM's 1999-calendar-year results were driven by strong year-over-year
increases at GM North America (GMNA) and GMAC. After adjusting both years for
the above-mentioned special items, and excluding the $1.5 billion strike-related
unfavorable impact in 1998, GM North America posted a 42-percent improvement in
income in 1999 over the prior year. In establishing its new calendar-year-record
results, GMAC generated over 16 percent more income in 1999 than during the
prior year.
"These strong GMNA and GMAC results and improvements in Latin America
reflect our emphasis on reducing structural costs and growing the business. This
performance offset reduced earnings and losses in other areas of our business,
again demonstrating the advantages of operating as a globally integrated
enterprise," Smith said.
GM's fourth-quarter-1999 results primarily reflected lower production and
unfavorable mix due to the full-size utility truck startups in North America and
lower production in Europe. In addition, all the automotive regions face
continuing competitive pressures, while Hughes has incurred further costs
associated with the rapid acceleration of its DIRECTV operations.
Following is a summary of income from GM's business segments in the 1999
fourth quarter and calendar year, compared with the prior-year period. These
results are adjusted to exclude special items. Calendar-year-1998 results
include the previously mentioned unfavorable strike impact. (see "Highlights"
for additional information):
- 3 -
Adjusted Fourth Quarter and Calendar Year Income (Loss) ($ in Millions)
Fourth Quarter Calendar Year
1999 1998 1999 1998
----------------------------------------
GM North America $1,013 $1,663 $4,565 $1,715
GM Europe $30 $146 $423 $463
GM Latin America/Africa
/Mid-East $18 ($161) ($81) ($124)
GM Asia Pacific ($23) ($116) ($218) ($146)
Other Automotive $12 ($5) $35 ($2)
--- ---- --- ----
Total Automotive $1,050 $1,527 $4,724 $1,906
GMAC $367 $298 $1,543 $1,325
Hughes ($61) $119 ($105) $272
Other ($101) ($32) ($476) ($182)
------ ----- ------ ------
Total Income from
Continuing Operations $1,255 $1,912 $5,686 $3,321
GM Automotive's net margin was 2.8 percent in the fourth quarter of 1999,
and 3.2 percent for the calendar year, compared with a net margin of 4.1 percent
in the fourth quarter of 1998, and 1.5 percent for calendar-year 1998. GM North
America's net margin was 3.4 percent in the fourth quarter of 1999, and 4.0
percent for the calendar year, compared with 5.8 percent in the fourth quarter
of 1998 and 1.8 percent for the 1998 calendar year.
"Taking advantage of a record market, GM North America had a strong year,"
said GM President and Chief Operating Officer G. Richard Wagoner, Jr. "We're
extremely pleased with the reaction of customers to our 14 new products,
especially our new full-size pickups. In fact, these models contributed heavily
to our all-time-high truck sales in 1999."
GM's global automotive operations were strengthened during 1999 with the
enhancement and expansion of major partnerships and alliances. "We strengthened
our alliances with Isuzu and Suzuki, forged a new partnership with Fuji Heavy
Industries, and we recently announced that we will take full ownership of Saab.
We also strengthened our collaboration with Toyota, and in December announced
joint activities with Honda," Wagoner said.
"Our alliance strategy is an innovative way to achieve growth that takes
advantage of unique opportunities in geographic regions, product segments, and
technology. It's a big departure from the industry's historic 'go-it-alone'
approach, but we think it's right for today's world," Wagoner said.
"While industry sales in Europe were at record levels once again, the
competitive environment continued to heat up," Wagoner said. "GM Europe (GME)
had record vehicle deliveries of 1,979,000 units in 1999, resulting in a market
share of 9.8 percent, an improvement of 0.2 percentage points over 1998. And
importantly, GME was profitable in all four quarters of 1999. For 2000, we're
accelerating our focus on improving financial performance and growing sales with
a strong array of new products," he said.
"Although the Latin America/Africa/Mid-East region continued to be affected
by poor economic conditions, we were pleased that we moved into a profitable
position in the fourth quarter of 1999, a notable turnaround from the prior-year
period," Wagoner said. "Operating efficiencies continued to improve, and we
strengthened our position in the region, growing our market share in 1999 by 0.9
percentage points to 16.6 percent."
- 4 -
The Asia-Pacific region significantly reduced its fourth-quarter losses
compared with the prior-year period. "This was largely due to the strong startup
of our Shanghai GM joint venture in China, and Holden's excellent sales and
financial performance in Australia," Wagoner said. "We continue to better
position ourselves for future growth in the region through expanded and enhanced
strategic partnerships and alliances."
GMAC's improved financial performance in both the fourth quarter of 1999
and the calendar year was led by strong improvements at its core North American
automotive-financing operations. For the calendar year, earnings from mortgage
operations more than doubled from the previous year.
"GMAC's earnings for 1999 were a record and represented the fifth straight
year of increasing earnings. While our North American auto finance and mortgage
operations posted the biggest improvements, continued investments in insurance
and international operations plus our recent expansion in commercial finance
have paved the way for continued growth in overall financial-services income,"
Smith said.
Hughes Electronics' net sales and revenues increased 25 percent to $7.6
billion in 1999, from $6.1 billion in 1998. "The revenue increase was primarily
driven by continued growth in the DIRECTV business, which added a record 1.6
million net new subscribers in 1999," Smith said. "DIRECTV continues to be the
world's largest direct-to-home provider of digital entertainment programming
with more than 9 million subscribers worldwide."
Hughes' net loss in 1999's fourth quarter and calendar year was primarily
related to investments in growth opportunities, which are expected to result in
increased revenues and profits in the future.
Hughes last week announced major changes in its corporate structure and
business mix that are designed to sharply focus the company's resources and
management attention on its high-growth entertainment, information, and business
communications services. Actions included the sale of Hughes' satellite systems
operations, and a strategy to discontinue certain wireless manufacturing
activities and focus on wireless broadband opportunities.
In this news release, use of the words anticipate, expect, should, believe,
plan, intensify, overcome and similar words are associated with forward-looking
statements that are inherently subject to numerous risks and uncertainties.
Accordingly, there can be no assurance that the results described in such
forward-looking statements will be realized. The principal risk factors that may
cause actual results to differ materially from those expressed in
forward-looking statements contained in this news release are described in
various documents filed by GM with the U.S. Securities and Exchange Commission,
including GM's Current Reports on Form 8-K dated April 12, 1999, and filed on
April 15, 1999, and April 21, 1999.
# # #
- 5 -
HIGHLIGHTS - Q4 Financial Results
(Dollars in Millions Except
Per Share Amounts)
Three Months Ended
December 31,
------------------------------------
Adjusted Adjusted
1999 1999(1) 1998 1998(1)
-------- ------- ------- --------
Net sales and revenues
Manufactured products $40,006 $40,006 $39,074 $39,074
Financial services 3,929 3,929 3,495 3,495
Other income 2,327 2,327 2,055 2,055
------ ------ ------ ------
Total net sales and
revenues $46,262 $46,262 $44,624 $44,624
------ ------ ------ ------
Income from continuing
operations $1,145 $1,255 $1,684 $1,912
Income from discontinued
operations - - 88 N/A
------ ------ ------ ------
Consolidated net income $1,145 $1,255 $1,772 N/A
Net profit margin from
continuing operations 2.5% 2.7% 3.8% 4.3%
.............................................................
Earnings Attributable to Common Stocks
$1-2/3 par value
Continuing operations $1,196 $1,253 $1,637 $1,865
Discontinued operations - - 88 N/A
------ ------ ------ ------
$1-2/3 par value $1,196 $1,253 $1,725 N/A
Class H (4) $(80) $(27) $32 $32
.............................................................
Basic Earnings Per Share Attributable to Common Stocks
$1-2/3 par value
Continuing operations $1.90 $1.99 $2.51 $2.86
Discontinued operations - - 0.13 N/A
------ ------ ------ ------
$1-2/3 par value $1.90 $1.99 $2.64 N/A
Class H (4) $(0.58) $(0.20) $0.30 $0.30
.............................................................
Diluted Earnings Per Share Attributable to Common Stocks
$1-2/3 par value
Continuing operations $1.86 $1.95 $2.48 $2.82
Discontinued operations - - 0.13 N/A
------ ------ ------ ------
$1-2/3 par value $1.86 $1.95 $2.61 N/A
Class H (4) $(0.58) $(0.20) $0.30 $0.30
.............................................................
Cash Dividends Per Share of Common Stocks
$1-2/3 par value $0.50 $0.50
Class H $- $-
.............................................................
Book Value Per Share of Common Stocks
December 31,
----------------------
1999 1998
--------- ---------
$1-2/3 par value $26.19 $20.00
Class H $15.71 $12.00
.............................................................
See footnotes beginning on page 12.
Continues
- 6 -
HIGHLIGHTS - Q4 Adjusted for Special Items by Segment
(Dollars in Millions)
Three Months Ended
December 31, 1999
----------------------------
(1)
Reported (7) Adjusted
Income Special Income
(Loss) Items (Loss)
------- ------- --------
GM North America
(GMNA) $1,270 $257 $1,013
GM Europe (GME) 30 - 30
GM Latin America/
Africa/Mid-East
(GMLAAM) 18 - 18
GM Asia/Pacific (GMAP) (23) - (23)
Other Automotive 12 - 12
----- ---- -----
Total GM Automotive
(GMA) $1,307 $257 $1,050
Hughes (6) (226) (165) (61)
Other (282) (186) (96)
----- ---- -----
Total Automotive,
Electronics and
Other Operations $799 $(94) $893
GMAC $351 $(16) $367
Other (5) - (5)
----- ---- -----
Total Financing and
Insurance Operations $346 $(16) $362
----- ---- -----
Income (loss) from
continuing operations $1,145 $(110) $1,255
Income (loss) from
discontinued operations - - -
----- ---- -----
Consolidated Net
Income (Loss) $1,145 $(110) $1,255
===== ==== =====
See footnotes beginning on page 12.
Continues
- 7 -
HIGHLIGHTS - Q4 Adjusted for Special Items by Segment
(Dollars in Millions)
Three Months Ended
December 31, 1998
----------------------------
(1)
Reported (2) Adjusted
Income Special Income
(Loss) Items (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 Automotive (5) - (5)
----- ---- -----
Total GM Automotive
(GMA) $1,299 $(228) $1,527
Hughes (4)(6) 119 - 119
Other (53) - (53)
----- ---- -----
Total Automotive,
Electronics and
Other Operations $1,365 $(228) $1,593
GMAC $298 $- $298
Other 21 - 21
----- ---- -----
Total Financing and
Insurance Operations $319 $- $319
----- ---- -----
Income (loss) from
continuing operations $1,684 $(228) $1,912
Income from discontinued
operations 88 N/A N/A
----- ---- -----
Consolidated Net
Income $1,772 N/A N/A
===== ==== =====
See footnotes beginning on page 12.
Continues
- 8 -
HIGHLIGHTS - Q4 Adjusted for Special Items by Region
(Dollars in Millions)
Three Months Ended
December 31, 1999
-------------------------------
GMNA GME GMLAAM GMAP
----- ------ ------ ------
Reported
--------
Total net sales and revenues $29,948 $6,556 $ 1,261 $ 941
------ ----- ----- ---
Pre-tax income (loss) $1,964 $37 $(42) $(27)
Income tax expense (benefit) 668 12 (50) 1
Equity income/(loss) and
minority interests (26) 5 10 5
----- ----- ----- ---
Net income (loss) $1,270 $30 $18 $(23)
===== ===== ===== ===
Net profit (loss) margin 4.2% 0.5% 1.4% (2.4%)
Effective income tax rate 34.0% 32.4% 119.0% (3.7%)
LESS: Special Items (7)
-------------------
Total net sales and revenues $- $ - $ - $ -
----- ----- ----- ---
Pre-tax income $415 $- $- $-
Income tax expense 158 - - -
Equity income/(loss) and
minority interests - - - -
----- ----- ----- ---
Net income $257 $- $- $-
===== ===== ===== ===
Adjusted (1)
--------
Total net sales and revenues $29,948 $6,556 $1,261 $941
------ ----- ----- ---
Pre-tax income (loss) $1,549 $37 $(42) $(27)
Income tax expense (benefit) 510 12 (50) 1
Equity income/(loss) and
minority interests (26) 5 10 5
----- ----- ----- ---
Net income (loss) $1,013 $30 $18 $(23)
===== ===== ===== ===
Net profit (loss) margin 3.4% 0.5% 1.4% (2.4%)
Effective income tax rate 32.9% 32.4% 119.0% (3.7%)
See footnotes beginning on page 12.
Continues
- 9 -
HIGHLIGHTS - Q4 Adjusted for Special Items by Region
(Dollars in Millions)
Three Months Ended
December 31, 1998
-------------------------------
GMNA GME GMLAAM GMAP
----- ------ ------ ------
Reported
--------
Total net sales and revenues $28,578 $7,493 $1,437 $850
------ ----- ----- ---
Pre-tax income (loss) $2,403 $229 $(366) $(97)
Income tax expense (benefit) 813 81 (139) 3
Equity income/(loss) and
minority interests (7) (2) 15 (113)
----- ----- ----- ---
Net income (loss) $1,583 $146 $(212) $(213)
===== ===== ===== ===
Net profit (loss) margin 5.5% 1.9% (14.8%) (25.1%)
Effective income tax rate 33.8% 35.4% 38.0% (3.1%)
LESS: Special Items (2)
-------------------
Total net sales and revenues $ - $ - $ - $ -
----- ----- ----- ---
Pre-tax loss $(105) $ - $(82) $(37)
Income tax benefit (40) - (31) -
Equity income/(loss) and
minority interests (15) - - (60)
----- ----- ----- ---
Net (loss) income $(80) $ - $(51) $(97)
===== ===== ===== ===
Adjusted (1)
--------
Total net sales and revenues $28,578 $7,493 $1,437 $850
------ ----- ----- ---
Pre-tax income (loss) $2,508 $229 $(284) $(60)
Income tax expense (benefit) 853 81 (108) 3
Equity income/(loss) and
minority interests 8 (2) 15 (53)
----- ----- ----- ---
Net income (loss) $1,663 $146 $(161) $(116)
===== ===== ===== ===
Net profit (loss) margin 5.8% 1.9% (11.2%) (13.6%)
Effective income tax rate 34.0% 35.4% 38.0% (5.0%)
See footnotes beginning on page 12.
Continues
- 10 -
HIGHLIGHTS - Q4 Operating Information
Three Months Ended
December 31,
---------------------
1999 1998
------- -------
Worldwide Wholesale Sales (units in 000s)
United States: Cars 704 739
Trucks 633 616
------ ------
Total United States 1,337 1,355
Canada and Mexico 157 169
------ ------
Total GM North America 1,494 1,524
------ ------
GME 497 525
GMLAAM 124 131
GMAP 109 91
------ ------
Total International 730 747
------ ------
Total Worldwide 2,224 2,271
====== ======
....................................................
Vehicle Unit Deliveries (units in 000s)
United States
Chevrolet - Cars 202 209
- Trucks 427 382
Pontiac 132 134
GMC 134 112
Buick 89 102
Oldsmobile 70 98
Saturn 54 52
Cadillac 45 52
Other 8 9
------ ------
Total United States 1,161 1,150
Canada and Mexico 172 148
------ ------
Total GM North America 1,333 1,298
------ ------
GME 445 443
GMLAAM 136 144
GMAP 119 107
------ ------
Total International 700 694
------ ------
Total Worldwide 2,033 1,992
====== ======
....................................................
Market share
United States
Cars 27.9% 31.7%
Trucks 27.9% 26.5%
Total 27.9% 29.1%
Total North America 27.5% 28.5%
Total Europe 9.8% 10.0%
Total Latin America 20.7% 19.7%
Total Asia and Pacific 4.0% 4.0%
Total Worldwide 15.4% 15.7%
.....................................................
U.S. Retail/Fleet Mix
% Fleet Sales - Cars 28.1% 32.8%
% Fleet Sales - Trucks 12.8% 13.4%
Total vehicles 20.2% 23.8%
....................................................
Days Supply of Inventory - U.S.
Cars 93 83
Trucks 85 76
.....................................................
Capacity Utilization %
U.S. and Canada (2-shift rated)(5)96.6% N/A
.....................................................
GMNA
Net Price (%) (0.3%) 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,
----------------------
1999 1998
--------- ----------
Depreciation and Amortization (3)
Depreciation $1,080 $1,032
Amortization of special tools 603 767
Amortization of intangible
assets 69 29
------ -----
Total $1,752 $1,828
====== =====
....................................................
Worldwide Employment at December 31 (in 000s)
GMNA 217 226
GME 81 84
GMLAAM 23 24
GMAP 10 10
Hughes 18 15
GMAC 28 24
Other 11 13
------ ------
Total 388 396
====== ======
....................................................
Worldwide Payrolls $5,546 $5,065
....................................................
(1) Adjusted amounts represent the reported amounts less the effects of
special items (see page 24 for a breakout of the special items for each
respective year). Reported amounts for discontinued operations have not
been adjusted for special items.
(2) As a result of GM's Competitiveness Studies, fourth quarter 1998
continuing operations were impacted by charges totaling $224 million
($228 million after-tax or $0.34 diluted earnings per share of $1-2/3
par value common stock). These studies were performed in conjunction
with GM's business planning cycle.
(3) Amounts exclude depreciation and amortization charges incurred by the
financing and insurance operations.
(4) 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.
(5) GM changed its method of calculating capacity utilization from mass
relief to tag relief in 1999. Quarterly 1998 figures are not available,
however, capacity utilization for Calendar Year 1998 was 77.2% using
the new methodology.
(6) Excludes the effects of purchase accounting adjustments related to
General Motors' acquisition of Hughes in 1985, and in 1999 also
excludes Hughes Series A Preferred Stock dividends payable to General
Motors.
(7) Special items for fourth quarter 1999 are as follows (all earnings per
share amounts are reported as diluted):
A favorable adjustment of $892 million ($553 million after-tax or
$0.86 per share of $1-2/3 par value common stock) related to the
reversal of a liability for benefits payable to excess U.S. hourly
employees. For a number of reasons, including a stronger than expected
market, higher attrition caused by the separation of Delphi and
provisions of the 1999 agreement with the UAW, a substantial number of
excess U.S. hourly workers have been placed into the active workforce.
The culmination of these events in the fourth quarter of 1999 made it
clear that this liability required adjustment;
continues
- 12 -
HIGHLIGHTS - Q4 Other Financial Information
(7) continued
A charge of $658 million ($408 million after-tax or $0.63 per share
of $1-2/3 par value common stock) related to the benefit increase
granted to hourly retirees in connection with the 1999 UAW agreement.
Consistent with past practice, GM expenses this benefit in the period
that the contract with the UAW is ratified;
A charge of $147 million ($90 million after-tax or $0.14 per share
of $1-2/3 par value common stock) related to a U.S. salaried early
retirement program. Approximately 1,700 (100 executives) people elected
participation in this program; and
A charge of $272 million ($165 million after-tax or $0.18 per share
of $1-2/3 par value common stock and $0.38 per share of GM Class H
common stock) related to Hughes' decision to discontinue certain of its
wireless manufacturing operations at Hughes Network Systems.
- 13 -
HIGHLIGHTS - Year Ended Financial Results
(Dollars in Millions Except
Per Share Amounts)
Year Ended
December 31,
----------------------------------------
Adjusted Adjusted
1999 1999(1) 1998 1998(1)
-------- ------- ------- --------
Net sales and revenues
Manufactured products $152,635 $152,635 $134,276 $134,276
Financial services 14,734 14,734 13,585 13,585
Other income 9,189 9,189 7,584 7,584
------- ------- ------- -------
Total net sales and
revenues $176,558 $176,558 $155,445 $155,445
------- ------- ------- -------
Income from continuing
operations $5,576 $5,686 $3,049 $3,321
Income (loss) from
discontinued operations 426 426 (93) N/A
------ ------ ------ ------
Consolidated net income $6,002 $6,112 $2,956 N/A
Net profit margin from
continuing operations 3.2% 3.2% 2.0% 2.1%
...............................................................
Earnings Attributable to Common Stocks
$1-2/3 par value
Continuing operations $5,592 $5,653 $2,914 $3,186
Discontinued operations 426 426 (93) N/A
------ ------ ------ ------
$1-2/3 par value $6,018 $6,079 $2,821 N/A
Class H (4) $(96) $(47) $72 $72
...............................................................
Basic Earnings Per Share Attributable to Common Stocks
$1-2/3 par value
Continuing operations $8.70 $8.79 $4.40 $4.82
Discontinued operations 0.66 0.66 (0.14) N/A
------ ------ ------ ------
$1-2/3 par value $9.36 $9.45 $4.26 N/A
Class H (4) $(0.77) $(0.38) $0.68 $0.68
...............................................................
Diluted Earnings Per Share Attributable to Common Stocks
$1-2/3 par value
Continuing operations $8.53 $8.62 $4.32 $4.72
Discontinued operations 0.65 0.65 (0.14) N/A
------ ------ ------ ------
$1-2/3 par value $9.18 $9.27 $4.18 N/A
Class H (4) $(0.77) $(0.38) $0.68 $0.68
...............................................................
Cash Dividends Per Share of Common Stocks
$1-2/3 par value $2.00 $2.00
Class H $- $-
..............................................................
See footnotes beginning on page 20.
Continues
- 14 -
HIGHLIGHTS - Year Ended Adjusted for Special Items by Segment
(Dollars in Millions)
Year Ended
December 31, 1999
----------------------------
(1)
Reported (3) Adjusted
Income Special Income
(Loss) Items (Loss)
------- ------- --------
GM North America
(GMNA) $4,822 $257 $4,565
GM Europe (GME) 423 - 423
GM Latin America/
Africa/Mid-East
(GMLAAM) (81) - (81)
GM Asia/Pacific (GMAP) (218) - (218)
Other Automotive 35 - 35
----- ---- -----
Total GM Automotive
(GMA) $4,981 $257 $4,724
Hughes (6) (270) (165) (105)
Other (669) (186) (483)
----- ---- -----
Total Automotive,
Electronics and
Other Operations $4,042 $(94) $4,136
GMAC $1,527 $(16) $1,543
Other 7 - 7
----- ---- -----
Total Financing and
Insurance Operations $1,534 $(16) $1,550
----- ---- -----
Income (loss) from
continuing operations $5,576 $(110) $5,686
Income from discontinued
operations 426 - 426
----- ---- -----
Consolidated Net
Income (Loss) $6,002 $(110) $6,112
===== ==== =====
See footnotes beginning on page 20.
Continues
- 15 -
HIGHLIGHTS - Year Ended Adjusted for Special Items by Segment
(Dollars in Millions)
Year Ended
December 31, 1998
------------------------------
(1)
Reported (2) Adjusted
Income Special Income
(Loss) Items (Loss)
------- ------- --------
GMNA $1,635 $(80) $1,715
GME 419 (44) 463
GMLAAM (175) (51) (124)
GMAP (243) (97) (146)
Other Automotive (2) - (2)
----- ----- -----
Total GM Automotive
(GMA) $1,634 $(272) $1,906
Hughes (4)(6) 272 - 272
Other (279) - (279)
----- ----- -----
Total Automotive,
Electronics and
Other Operations $1,627 $(272) $1,899
GMAC $1,325 $- $1,325
Other 97 - 97
----- ----- -----
Total Financing and
Insurance Operations $1,422 $- $1,422
----- ----- -----
Income (loss) from
continuing
operations $3,049 $(272) $3,321
(Loss) income from
discontinued
operations (93) N/A N/A
----- ----- -----
Consolidated Net
Income (Loss) $2,956 N/A N/A
===== ===== =====
See footnotes beginning on page 20.
Continues
- 16 -
HIGHLIGHTS - Year Ended Adjusted for Special Items by Region
(Dollars in Millions)
Year Ended
December 31, 1999
-------------------------------
GMNA GME GMLAAM GMAP
----- ------ ------ ------
Reported
--------
Total net sales and revenues $115,132 $26,225 $4,709 $3,187
------- ------ ----- -----
Pre-tax income (loss) $7,192 $642 $(266) $(76)
Income tax expense (benefit) 2,339 220 (156) (7)
Equity income/(loss) and
minority interests (31) 1 29 (149)
----- ----- ----- ---
Net income (loss) $4,822 $423 $(81) $(218)
===== ===== ===== ===
Net profit (loss) margin 4.2% 1.6% (1.7%) (6.8%)
Effective income tax rate 32.5% 34.3% 58.6% 9.2%
LESS: Special Items (3)
-------------------
Total net sales and revenues $ - $ - $ - $ -
----- ----- ----- ---
Pre-tax income $415 $- $- $-
Income tax expense 158 - - -
Equity income/(loss) and
minority interests - - - -
----- ----- ----- ---
Net income $257 $- $- $-
===== ===== ===== ===
Adjusted (1)
--------
Total net sales and revenues $115,132 $26,225 $4,709 $3,187
------- ------ ----- -----
Pre-tax income (loss) $6,777 $642 $(266) $(76)
Income tax expense (benefit) 2,181 220 (156) (7)
Equity income/(loss) and
minority interests (31) 1 29 (149)
----- ----- ----- ---
Net income (loss) $4,565 $423 $(81) $(218)
===== ===== ===== ===
Net profit (loss) margin 4.0% 1.6% (1.7%) (6.8%)
Effective income tax rate 32.2% 34.3% 58.6% 9.2%
See footnotes beginning on page 20.
Continues
- 17 -
HIGHLIGHTS - Year Ended Adjusted for Special Items by Region
(Dollars in Millions)
Year Ended
December 31, 1998
-------------------------------
GMNA GME GMLAAM GMAP
----- ------ ------ ------
Reported
--------
Total net sales and revenues $96,497 $25,840 $7,553 $3,044
------ ----- ----- -----
Pre-tax income (loss) $2,409 $740 $(471) $(82)
Income tax expense (benefit) 787 319 (213) 9
Equity income/(loss) and
minority interests 13 (2) 83 (152)
----- ---- ----- -----
Net income (loss) $1,635 $419 $(175) $(243)
===== ==== ===== =====
Net profit (loss) margin 1.7% 1.6% (2.3%) (8.0%)
Effective income tax rate 32.7% 43.1% 45.2% (11.0%)
LESS: Special Items (2)
-------------------
Total net sales and revenues $- $ - $ - $ -
------ ----- ----- ---
Pre-tax loss $(105) $(74) $(82) $(37)
Income tax benefit (40) (30) (31) -
Equity income/(loss) and
minority interests (15) - - (60)
----- ----- ----- ---
Net loss $(80) $(44) $(51) $(97)
===== ===== ===== ===
Adjusted (1)
--------
Total net sales and revenues $96,497 $25,840 $7,553 $3,044
------- ------ ----- -----
Pre-tax income (loss) $2,514 $814 $(389) $(45)
Income tax expense (benefit) 827 349 (182) 9
Equity income/(loss) and
minority interests 28 (2) 83 (92)
----- ----- ----- -----
Net income (loss) $1,715 $463 $(124) $(146)
===== ===== ===== =====
Net profit (loss) margin 1.8% 1.8% (1.6%) (4.8%)
Effective income tax rate 32.9% 42.9% 46.8% (20.0%)
See footnotes beginning on page 20.
Continues
- 18 -
HIGHLIGHTS - Year Ended Operating Information
Year Ended
December 31,
----------------------
1999 1998
--------- ----------
Worldwide Wholesale Sales (units in 000s)
United States: Cars 2,620 2,389
Trucks 2,587 2,051
------ ------
Total United States 5,207 4,440
Canada and Mexico 667 631
------ ------
Total GM North America 5,874 5,071
------ ------
GME 1,968 1,882
GMLAAM 523 652
GMAP 421 419
------ ------
Total International 2,912 2,953
------ ------
Total Worldwide 8,786 8,024
====== ======
....................................................
Vehicle Unit Deliveries (units in 000s)
United States
Chevrolet - Cars 885 876
- Trucks 1,725 1,550
Pontiac 616 536
GMC 542 468
Buick 446 398
Oldsmobile 352 330
Saturn 233 232
Cadillac 179 183
Other 39 31
------ ------
Total United States 5,017 4,604
Canada and Mexico 689 639
------ ------
Total GM North America 5,706 5,243
------ ------
GME 1,979 1,849
GMLAAM 536 654
GMAP 457 452
------ ------
Total International 2,972 2,955
------ ------
Total Worldwide 8,678 8,198
====== ======
....................................................
Market share
United States
Cars 29.8% 30.2%
Trucks 27.8% 27.4%
Total 28.8% 28.8%
Total North America 28.6% 28.5%
Total Europe 9.8% 9.6%
Total Latin America 20.0% 19.7%
Total Asia and Pacific 3.9% 4.1%
Total Worldwide 15.8% 15.6%
.....................................................
U.S. Retail/Fleet Mix
% Fleet Sales - Cars 26.4% 26.2%
% Fleet Sales - Trucks 13.2% 13.6%
Total vehicles 20.0% 20.3%
.....................................................
Capacity Utilization %
U.S. and Canada (2-shift rated)(5)91.9% 77.2%
.....................................................
See footnotes beginning on page 20.
Continues
- 19 -
HIGHLIGHTS - Year Ended Other Financial Information
(Dollars in Millions Except Per Share Amounts)
Year Ended
December 31,
----------------------
1999 1998
--------- ----------
Depreciation and Amortization (7)
Depreciation $4,155 $3,772
Amortization of special tools 2,492 2,350
Amortization of intangible
assets 226 105
----- -----
Total $6,873 $6,227
===== =====
....................................................
Worldwide Payrolls $21,997 $20,360
....................................................
(1) Adjusted amounts represent the reported amounts less the effects of
special items (see page 24 for a breakout of the special items for each
respective year). Adjusted amounts for 1998 include the unfavorable
effects of strike-related work stoppages. The unfavorable after-tax
impacts of the work stoppages were $1.5 billion or $2.22 per share of
$1-2/3 par value common stock. Reported amounts for discontinued
operations have not been adjusted for special items.
(2) Special items for 1998 are as follows (all earnings per share amounts
are reported as diluted): The second-quarter 1998 results included a
pre-tax charge of $74 million ($44 million after-tax, or $0.06 per
share of $1-2/3 par value common stock), related to work schedule
modifications at Opel Belgium.
As a result of GM's Competitiveness Studies, fourth quarter 1998
continuing operations were impacted by charges totaling $224 million
($228 million after-tax or $0.34 per share of $1-2/3 par value common
stock). These studies were performed in conjunction with GM's business
planning cycle.
(3) Special items for 1999 are as follows (all earnings per share amounts
are reported as diluted):
A favorable adjustment of $892 million ($553 million after-tax or
$0.84 per share of $1-2/3 par value common stock) related to the
reversal of a liability for benefits payable to excess U.S. hourly
employees. For a number of reasons, including a stronger than expected
market, higher attrition caused by the separation of Delphi and
provisions of the 1999 agreement with the UAW, a substantial number of
excess U.S. hourly workers have been placed into the active workforce.
The culmination of these events in the fourth quarter of 1999 made it
clear that this liability required adjustment;
A charge of $658 million ($408 million after-tax or $0.62 per share
of $1-2/3 par value common stock) related to the benefit increase
granted to hourly retirees in connection with the 1999 UAW agreement.
Consistent with past practice, GM expenses this benefit in the period
that the contract with the UAW is ratified;
Continues
- 20 -
HIGHLIGHTS - Year Ended Other Financial Information
(3) continued
A charge of $147 million ($90 million after-tax or $0.14 per share of
$1-2/3 par value common stock) related to a U.S. salaried early
retirement program. Approximately 1,700 (100 executives) people elected
participation in this program; and
A charge of $272 million ($165 million after-tax or $0.17 per share
of $1-2/3 par value common stock and $0.39 per share of GM Class H
common stock) related to Hughes' decision to discontinue certain of its
wireless manufacturing operations at Hughes Network Systems.
(4) 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 and GM
had reported the $9 million change in fourth quarter 1998 results.
(5) GM changed its method of calculating capacity utilization from mass
relief to tag relief in 1999. Capacity utilization for Calendar Year
1998 was calculated using the new methodology.
(6) Excludes the effects of purchase accounting adjustments related to
General Motors' acquisition of Hughes in 1985, and in 1999 also
excludes Hughes Series A Preferred Stock dividends payable to General
Motors.
(7) Amounts exclude depreciation and amortization charges incurred by the
financing and insurance operations.
Note: Total cash of $14.4 billion referenced to in the press release
includes $11.4 billion of cash and marketable securities as well as
$3.0 billion invested in fixed income securities of the Corporation's
$6.3 billion Voluntary Employees' Beneficiary Association Trust.
- 21 -
HIGHLIGHTS - List of Special Items by Quarter
Impact on Net Income
(Dollars in Millions)
Quarter
List of special items Ended Fav/(Unfav)
----------------------- ------- ----------
Continuing Operations:
Postemployment Benefits 12/31/99 $553
Hourly Retiree Benefits 12/31/99 (408)
Termination Benefits 12/31/99 (90)
Hughes Wireless Business 12/31/99 (165)
-----
Total special items for 1999 continuing operations $(110)
=====
Quarter
List of special items Ended Fav/(Unfav)
----------------------- ------- ----------
Continuing Operations:
Competitiveness studies 12/31/98 (228)
Opel Belgium work schedule
modifications 6/30/98 (44)
-----
Total special items for 1998 continuing operations $(272)
=====
- 22 -
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended
December 31,
------------
1999 1998
---- ----
(Dollars in Millions Except Per Share Amounts)
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
Manufactured products sales and revenues $40,006 $39,074
Financing revenues 3,929 3,495
Other income 2,327 2,055
------- -------
Total net sales and revenues 46,262 44,624
------ ------
Cost of sales and other operating expenses,
exclusive of items listed below 32,798 31,935
Selling, general and administrative expenses 5,818 4,458
Depreciation and amortization expense 3,279 3,118
Interest expense 2,126 1,678
Other expenses 436 666
------ -------
Total costs and expenses 44,457 41,855
------ ------
Income from continuing operations
before income taxes
and minority interests 1,805 2,769
Income tax expense 580 926
Minority interests - (9)
Losses of nonconsolidated associates (80) (150)
------- ------
Income from continuing operations $1,145 $1,684
Income from discontinued operations - 88
------- ------
Net income $1,145 $1,772
Dividends on preference stocks 29 15
------- -------
Earnings attributable to common stocks $1,116 $1,757
===== =====
Basic earnings (losses) per share
attributable to common stocks
$1-2/3 par value common stock
Continuing operations $1.90 $2.51
Discontinued operations - 0.13
------ ----
Earnings per share attributable
to $1-2/3 par value $1.90 $2.64
==== ====
Earnings per share attributable to Class H $(0.58) $0.30
==== ====
Diluted earnings (losses) per share
attributable to common stocks
$1-2/3 par value common stock
Continuing operations $1.86 $2.48
Discontinued operations - 0.13
------ ----
Earnings per share attributable
to $1-2/3 par value $1.86 $2.61
==== ====
Earnings per share attributable to Class H $(0.58) $0.30
==== ====
- 23 -
CONSOLIDATED STATEMENTS OF INCOME - Continued
Three Months Ended
December 31,
------------
1999 1998
---- ----
(Dollars in Millions)
AUTOMOTIVE, ELECTRONICS AND OTHER OPERATIONS
Manufactured products sales and revenues $40,006 $39,074
Other income 915 835
-------- --------
Total net sales and revenues 40,921 39,909
------ ------
Cost of sales and other operating expenses,
exclusive of items listed below 32,798 31,935
Selling, general and administrative expenses 4,652 3,399
Depreciation and amortization expense 1,752 1,828
------- -------
Total operating costs and expenses 39,202 37,162
Interest expense 231 200
Other expenses 181 285
Net expense (income) from transactions
with Financing and Insurance Operations 63 (35)
-- ---
Income from continuing operations
before income taxes
and minority interests 1,244 2,297
Income tax expense 368 777
Minority interests 3 (5)
Losses of nonconsolidated associates (80) (150)
---- ------
Income from continuing operations $799 $1,365
Income from discontinued operations - 88
------ ------
Net income - Automotive, Electronics and
Other Operations $799 $1,453
=== =====
Three Months Ended
December 31,
------------
1999 1998
---- ----
(Dollars in Millions)
FINANCING AND INSURANCE OPERATIONS
Financing revenues $3,929 $3,495
Insurance, mortgage and other income 1,412 1,220
----- -----
Total revenues and other income 5,341 4,715
----- -----
Interest expense 1,895 1,478
Depreciation and amortization expense 1,527 1,290
Operating and other expenses 1,166 1,059
Provisions for financing losses 76 140
Insurance losses and loss adjustment expenses 179 241
------ ------
Total costs and expenses 4,843 4,208
----- -----
Net (income) expense from
transactions with Automotive,
Electronics and Other Operations (63) 35
---- ----
Income before income taxes 561 472
Income tax expense 212 149
Minority interests (3) (4)
----- -----
Net income - Financing and Insurance
Operations $346 $319
=== ===
- 24 -
CONSOLIDATED STATEMENTS OF INCOME - Continued
Years Ended December 31,
------------------------
1999 1998 1997
---- ---- ----
(Dollars in Millions Except Per Share Amounts)
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
Manufactured products sales
and revenues $152,635 $134,276 $148,143
Financing revenues 14,734 13,585 12,762
Other income 9,189 7,584 11,675
--------- --------- --------
Total net sales and revenues 176,558 155,445 172,580
Cost of sales and other
operating expenses, exclusive
of items listed below 126,809 114,542 128,225
Selling, general and
administrative expenses 18,845 15,915 14,777
Depreciation and amortization expense 12,318 11,147 14,646
Interest expense 7,750 6,629 5,883
Other expenses 1,789 2,268 1,480
------- -------- -------
Total costs and expenses 167,511 150,501 165,011
------- ------- -------
Income from continuing
operations before income taxes
and minority interests 9,047 4,944 7,569
Income tax expense 3,118 1,636 1,025
Minority interests (28) (20) 44
Losses of nonconsolidated associates (325) (239) (105)
------ ------ ------
Income from continuing operations $5,576 $3,049 $6,483
Income (loss) from discontinued
operations 426 (93) 215
------ ------- ------
Net income $6,002 $2,956 $6,698
----- ----- -----
Premium on exchange of preference stocks - - 26
Dividends on preference stocks 80 63 72
------- ------- -------
Earnings attributable to common stocks $5,922 $2,893 $6,600
===== ===== =====
Basic earnings (losses) per share
attributable to common stocks
$1-2/3 par value common stock
Continuing operations $8.70 $4.40 $8.52
Discontinued operations 0.66 (0.14) 0.18
---- ---- ----
Earnings per share attributable
to $1-2/3 par value $9.36 $4.26 $8.70
==== ==== ====
Class H (prior to its recapitalization
on December 17, 1997)
Continuing operations $ - $ - $2.30
Discontinued operations - - 0.87
----- ------ ----
Earnings per share attributable
to Class H (prior to its
recapitalization on December 17, 1997) $ - $ - $3.17
===== ===== ====
Earnings per share attributable
to Class H (subsequent
to its recapitalization
on December 17, 1997) $(0.77) $0.68 $0.02
==== ==== ====
Diluted earnings (losses) per
share attributable to common stocks
$1-2/3 par value common stock
Continuing operations $8.53 $4.32 $8.45
Discontinued operations 0.65 (0.14) 0.17
---- ---- ----
Earnings per share attributable
to $1-2/3 par value $9.18 $4.18 $8.62
==== ==== ====
Class H (prior to its recapitalization
on December 17, 1997)
Continuing operations $ - $ - $2.30
Discontinued operations - - 0.87
------ ------ ----
Earnings per share attributable
to Class H (prior to its
recapitalization on December 17, 1997) $ - $ - $3.17
====== ====== ====
Earnings per share attributable
to Class H (subsequent
to its recapitalization
on December 17, 1997) $(0.77) $0.68 $0.02
==== ==== ====
- 25 -
CONSOLIDATED STATEMENTS OF INCOME - Concluded
Years Ended December 31,
------------------------
1999 1998 1997
---- ---- ----
(Dollars in Millions)
AUTOMOTIVE, ELECTRONICS AND OTHER OPERATIONS
Manufactured products sales
and revenues $152,635 $134,276 $148,143
Other income 3,472 2,885 7,952
--------- --------- ---------
Total net sales and revenues 156,107 137,161 156,095
------- ------- -------
Cost of sales and other operating
expenses, exclusive of
items listed below 126,809 114,542 128,225
Selling, general and administrative
expenses 14,250 11,848 11,971
Depreciation and amortization expense 6,873 6,227 9,833
--------- -------- --------
Total operating costs and expenses 147,932 132,617 150,029
------- ------- -------
Interest expense 828 786 633
Other expenses 503 792 210
Net expense (income) from
transactions with Financing and
Insurance Operations 308 82 (101)
------ ------- ------
Income from continuing operations
before income taxes
and minority interests 6,536 2,884 5,324
Income tax expense 2,167 1,018 111
Minority interests (2) - 57
Losses of nonconsolidated associates (325) (239) (105)
----- ----- -----
Income from continuing operations 4,042 1,627 5,165
Income (loss) from discontinued operations 426 (93) 215
----- ------ -----
Net income - Automotive, Electronics
and Other Operations $4,468 $1,534 $5,380
===== ===== =====
Years Ended December 31,
------------------------
1999 1998 1997
---- ---- ----
(Dollars in Millions)
FINANCING AND INSURANCE OPERATIONS
Financing revenues $14,734 $13,585 $12,762
Insurance, mortgage and other income 5,717 4,699 3,723
------- ------- -------
Total revenues and other income 20,451 18,284 16,485
------ ------ ------
Interest expense 6,922 5,843 5,250
Depreciation and amortization expense 5,445 4,920 4,813
Operating and other expenses 4,595 4,067 2,806
Provisions for financing losses 404 463 523
Insurance losses and loss
adjustment expenses 882 1,013 747
-------- ------- --------
Total costs and expenses 18,248 16,306 14,139
------ ------ ------
Net (income) expense from
transactions with Automotive,
Electronics and Other Operations (308) (82) 101
------- -------- --------
Income before income taxes 2,511 2,060 2,245
Income tax expense 951 618 914
Minority interests (26) (20) (13)
------ ------ ------
Net income - Financing and
Insurance Operations $1,534 $1,422 $1,318
===== ===== =====
- 26 -
<PAGE>
CONSOLIDATED BALANCE SHEETS
December 31,
------------
GENERAL MOTORS CORPORATION AND SUBSIDIARIES 1999 1998
---- ----
ASSETS (Dollars in Millions)
Automotive, Electronics and Other Operations
Cash and cash equivalents $9,730 $9,728
Marketable securities 1,698 402
------- -------
Total cash and marketable securities 11,428 10,130
Accounts and notes receivable (less allowances) 5,093 4,750
Inventories (less allowances) 10,638 10,437
Net assets of discontinued operations - 77
Equipment on operating leases
(less accumulated depreciation) 5,744 4,954
Deferred income taxes and other current assets 9,006 10,051
----- ------
Total current assets 41,909 40,399
Equity in net assets of nonconsolidated associates 1,711 950
Property - net 32,779 32,222
Intangible assets - net 8,527 9,994
Deferred income taxes 14,692 14,967
Other assets 25,134 16,062
-------- --------
Total Automotive , Electronics and
Other Operations assets 124,752 114,594
Financing and Insurance Operations
Cash and cash equivalents 712 146
Investments in securities 9,110 8,748
Finance receivables - net 80,627 70,436
Investment in leases and other receivables 36,407 32,798
Other assets 21,312 19,150
Net receivable from Automotive, Electronics
and Other Operations 1,001 816
------- --------
Total Financing and Insurance Operations assets 149,169 132,094
------- -------
Total assets $273,921 $246,688
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Automotive, Electronics and Other Operations
Accounts payable (principally trade) $17,254 $13,542
Loans payable 1,991 1,204
Accrued expenses 32,854 30,548
Net payable to Financing and Insurance Operations 1,001 816
------- --------
Total current liabilities 53,100 46,110
Long-term debt 7,415 7,118
Postretirement benefits other than pensions 34,166 33,503
Pensions 3,115 4,410
Other liabilities and deferred income taxes 17,426 17,807
-------- --------
Total Automotive, Electronics and
Other Operations liabilities 115,222 108,948
Financing and Insurance Operations
Accounts payable 4,262 4,148
Debt 122,282 107,753
Deferred income taxes and other liabilities 11,282 10,004
-------- --------
Total Financing and Insurance Operations liabilities 137,826 121,905
Minority interests 596 563
General Motors - obligated mandatorily
redeemable preferred securities of subsidiary
trusts holding solely junior subordinated
debentures of General Motors
Series D 79 79
Series G 139 141
Stockholders' equity
Preference stocks - 1
$1-2/3 par value common stock
(issued, 619,412,233 and 655,008,344 shares) 1,033 1,092
Class H common stock (issued, 137,115,187
and 106,159,776 shares) 14 11
Capital surplus (principally additional
paid-in capital) 13,794 12,661
Retained earnings 6,376 6,984
----- -----
Subtotal 21,217 20,749
Accumulated foreign currency translation adjustments (2,033) (1,089)
Net unrealized gains on securities 996 481
Minimum pension liability adjustment (121) (5,089)
-------- --------
Accumulated other comprehensive loss (1,158) (5,697)
-------- --------
Total stockholders' equity 20,059 15,052
-------- --------
Total liabilities and stockholders' equity $273,921 $246,688
======= =======
- 27 -
CONSOLIDATED BALANCE SHEETS - Concluded
December 31,
------------
AUTOMOTIVE, ELECTRONICS AND OTHER OPERATIONS 1999 1998
---- ----
(Dollars in Millions)
ASSETS
Cash and cash equivalents $9,730 $9,728
Marketable securities 1,698 402
------- --------
Total cash and marketable securities 11,428 10,130
Accounts and notes receivable (less allowances) 5,093 4,750
Inventories (less allowances) 10,638 10,437
Net assets of discontinued operations - 77
Equipment on operating leases
(less accumulated depreciation) 5,744 4,954
Deferred income taxes and other current assets 9,006 10,051
----- ------
Total current assets 41,909 40,399
Equity in net assets of nonconsolidated associates 1,711 950
Property - net 32,779 32,222
Intangible assets - net 8,527 9,994
Deferred income taxes 14,692 14,967
Other assets 25,134 16,062
-------- --------
Total Automotive, Electronics and
Other Operations assets $124,752 $114,594
LIABILITIES AND GM INVESTMENT
Accounts payable (principally trade) $17,254 $13,542
Loans payable 1,991 1,204
Accrued expenses 32,854 30,548
Net payable to Financing and Insurance Operations 1,001 816
-------- --------
Total current liabilities 53,100 46,110
Long-term debt 7,415 7,118
Postretirement benefits other than pensions 34,166 33,503
Pensions 3,115 4,410
Other liabilities and deferred income taxes 17,426 17,807
-------- --------
Total Automotive, Electronics and
Other Operations liabilities 115,222 108,948
Minority interests 574 511
GM investment in Automotive, Electronics
and Other Operations 8,956 5,135
----- -----
Total Automotive, Electronics and Other
Operations liabilities and GM investment $124,752 $114,594
======== ========
December 31,
------------
FINANCING AND INSURANCE OPERATIONS 1999 1998
---- ----
(Dollars in Millions)
ASSETS
Cash and cash equivalents $712 $146
Investments in securities 9,110 8,748
Finance receivables - net 80,627 70,436
Investment in leases and other receivables 36,407 32,798
Other assets 21,312 19,150
Net receivable from Automotive, Electronics
and Other Operations 1,001 816
------- -------
Total Financing and Insurance Operations assets $149,169 $132,094
======= =======
LIABILITIES AND GM INVESTMENT
Accounts payable $4,262 $4,148
Debt 122,282 107,753
Deferred income taxes and other liabilities 11,282 10,004
-------- --------
Total Financing and Insurance Operations liabilities 137,826 121,905
Minority interests 22 52
GM investment in Financing and Insurance Operations 11,321 10,137
------ ------
Total Financing and Insurance Operations
liabilities and GM investment $149,169 $132,094
======= =======
- 28 -
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
For The Years Ended December 31,
--------------------------------
1999 1998 1997
---- ---- ----
(Dollars in Millions)
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
Cash flows from operating activities
Income from continuing operations $5,576 $3,049 $6,483
Adjustments to reconcile income
from continuing operations to
net cash provided by operating
activities
Depreciation and amortization
expense 12,318 11,147 14,646
Gain on Hughes Defense spin-off - - (4,269)
Postretirement benefits
other than pensions,
net of payments and
VEBA contributions (1,036) 188 (874)
Pension expense, net of
contributions (808) 223 269
Originations and purchases
of mortgage loans (52,874) 54,433) (30,878)
Proceeds on sales of
mortgage loans 55,777 51,582 28,543
Originations and purchases
of mortgage securities (1,309) (2,237) (2,516)
Proceeds on sales of
mortgage securities 1,545 849 1,449
Change in other investments
and miscellaneous assets 263 770 1,457
Change in other operating assets
and liabilities 7,500 1,558 (1,552)
Other 78 1,647 826
------ ------ ------
Net cash provided by operating
activities 27,030 14,343 13,584
------ ------ ------
Cash flows from investing activities
Expenditures for property (7,384) (8,231) (8,647)
Investments in marketable securities
- acquisitions (25,406) (34,162) (30,594)
Investments in marketable securities
- liquidations 23,479 37,960 28,958
Mortgage servicing rights
- acquisitions (1,424) (1,862) (479)
Mortgage servicing rights
- liquidations 35 80 23
Finance receivables - acquisitions (186,379) (155,613) (163,614)
Finance receivables - liquidations 130,293 114,662 129,615
Proceeds from sales of
finance receivables 48,178 27,681 31,191
Operating leases - acquisitions (23,165) (23,525) (21,073)
Operating leases - liquidations 12,079 15,386 12,187
Proceeds from borrowings of
Hughes Defense prior to
the Hughes Defense spin-off - - 4,006
Investments in companies,
net of cash acquired (5,108) (1,144) (2,272)
Other (192) (1,131) 765
---- ------ ---
Net cash used in investing activitie (34,994) (29,899) (19,934)
------ ------ ------
Cash flows from financing activities
Net increase in loans payable (2,360) 8,186 5,346
Long-term debt - borrowing 35,561 24,035 14,971
Long-term debt - repayments (21,359) (12,869) (12,500)
Repurchases of common and
preference stocks (3,870) (3,089) (4,365)
Proceeds from issuing common
and preference stocks 2,005 343 614
Cash dividends paid to stockholders (1,367) (1,388) (1,620)
----- ----- -----
Net cash provided by financing
activities 8,610 15,218 2,446
----- ------ -----
Effect of exchange rate changes
on cash and cash equivalents (206) 317 (482)
--- --- ------
Net cash provided by (used in)
continuing operations 440 (21) (4,386)
Net cash provided by (used in)
discontinued operations 128 (378) 1,567
--- ---- -----
Net increase (decrease) in cash
and cash equivalents 568 (399) (2,819)
Cash and cash equivalents at
beginning of the year 9,874 10,273 13,092
----- ------ ------
Cash and cash equivalents at
end of the year $10,442 $9,874 $10,273
======= ====== =======
- 29 -
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS - Concluded
<CAPTION>
For The Years Ended December 31,
--------------------------------
1999 1998 1997
---- ---- ----
Automotive, Financing Automotive, Financing Automotive, Financing
Electronics and Electronics and Electronics and
and Other Insurance and Other Insurance and Other Insurance
--------- --------- --------- --------- --------- ---------
Cash flows from operating activities (Dollars in Millions)
<S> <C> <C> <C> <C> <C> <C>
Income from continuing operations $4,042 $1,534 $1,627 $1,422 $5,165 $1,318
Adjustments to reconcile income
from continuing operations to
net cash provided by operating
activities
Depreciation and amortization
expenses 6,873 5,445 6,227 4,920 9,833 4,813
Gain on Hughes Defense spin-off - - - - (4,269) -
Postretirement benefits other
than pensions, net of payments
and VEBA contributions (1,057) 21 157 31 (900) 26
Pension expense, net of
contributions (808) - 223 - 269 -
Originations and purchases
of mortgage loans - (52,874) - (54,433) - (30,878)
Proceeds on sales of
mortgage loans - 55,777 - 51,582 - 28,543
Originations and purchases
of mortgage securities - (1,309) - (2,237) - (2,516)
Proceeds on sales of
mortgages securities - 1,545 - 849 - 1,449
Change in other investments and
miscellaneous assets 522 (259) (162) 932 (51) 1,508
Change in other operating
assets and liabilities 7,523 (23) 90 1,468 (993) (559)
Other (866) 944 581 1,066 563 263
---- --- --- ----- --- ---
Net cash provided by operating
activities 16,229 10,801 8,743 5,600 9,617 3,967
------ ------ ----- ----- ----- -----
Cash flows from investing activities
Expenditures for property (7,061) (323) (7,952) (279) (8,409) (238)
Investments in marketable
securities - acquisitions (4,149) (21,257) (13,010) (21,152) (12,864) (17,730)
Investments in marketable
securities - liquidations 2,886 20,593 16,272 21,688 12,663 16,295
Mortgage servicing rights
- acquisitions - (1,424) - (1,862) - (479)
Mortgage servicing rights
- liquidations - 35 - 80 - 23
Finance receivables - acquisitions - (186,379) - (155,613) - (163,614)
Finance receivables - liquidations - 130,293 - 114,662 - 129,615
Proceeds from sales of finance
receivables - 48,178 - 27,681 - 31,191
Operating leases - acquisitions (6,415) (16,750) (6,397) (17,128) (5,680) (15,393)
Operating leases - liquidations 4,243 7,836 5,609 9,777 3,711 8,476
Proceeds from borrowings of
Hughes Defense prior to the
Hughes Defense spin-off - - - - 4,006 -
Investments in companies,
net of cash acquired (2,706) (2,402) (971) (173) (1,850) (422)
Net investing activity with
Financing and Insurance Operations 75 - 338 - 750 -
Other (924) 732 (889) (242) 554 211
---- --- ---- ---- --- ---
Net cash used in investing
activities (14,051) (20,868 (7,000) (22,561) (7,119) (12,065)
------- ------- ------ ------- ------ -------
Cash flows from financing activities
Net increase (decrease) in
loans payable 140 (2,500) (94) 8,280 (398) 5,744
Long-term debt - borrowings 9,090 26,471 2,937 21,098 384 14,587
Long-term debt - repayments (8,281) (13,078) (1,492) (11,377) (1,189) (11,311)
Net financing activity with
Automotive, Electronics
and Other Operations - (75) - (338) - (750)
Repurchases of common and
preference stocks (3,870) - (3,089) - (4,365) -
Proceeds from issuing common
and preference stocks 2,005 - 343 - 614 -
Cash dividends paid to stockholders (1,367) - (1,388) - (1,620) -
------ ----- ------ ----- ------ -----
Net cash (used in) provided by
financing activities (2,283) 10,818 (2,783) 17,663 (6,574) 8,270
------ ------ ------ ------ ------ -----
Effect of exchange rate changes
on cash and cash equivalents (206) - 315 2 (482) -
Net transactions with
Automotive/Financing Operations 185 (185) 1,135 (1,135) 338 (338)
--- ---- ----- ------ --- ----
Net cash (used in) provided by
continuing operations (126) 566 410 (431) (4,220) (166)
Net cash provided by (used in)
discontinued operations 128 - (378) - 1,567 -
--- ---- --- ----- ----- ----
Net increase (decrease) in cash
and cash equivalents 2 566 32 (431) (2,653) (166)
Cash and cash equivalents at
beginning of the year 9,728 146 9,696 577 12,349 743
----- --- ----- --- ------ ---
Cash and cash equivalents at
end of the year $9,730 $712 $9,728 $146 $9,696 $577
====== ==== ====== ==== ====== ====
</TABLE>
* * * * * * * * * *
- 30 -
Hughes' Release
New Services-Focused Hughes Reports
54-Percent Revenue Growth In Fourth Quarter 1999
Record Subscriber Growth Attained in Both
U.S. and Latin American DIRECTV(R) Services
El Segundo, Calif., January 19, 2000 -- Hughes Electronics Corporation,
reflecting last week's announcement of major changes in its corporate focus,
today reported that fourth quarter 1999 revenues increased 53.6% to $1,698.0
million compared with $1,105.2 million in the fourth quarter of 1998. These are
the company's first financial results following the announcement that it would
sell its satellite manufacturing businesses to The Boeing Company in an all-cash
transaction valued at $3.75 billion, refocus its wireless businesses, and
realign Hughes into two market-driven sectors.
"We've begun the new century as a company that is sharply focused on our
high-value, high-growth entertainment and business communications services,"
said Michael T. Smith, Hughes chairman and chief executive officer. "This
quarter's results reflect the bright future of our new company."
As required by applicable accounting standards, the financial results of
Hughes' satellite manufacturing businesses are treated as discontinued
operations to reflect the impact of the announced transaction with Boeing.
Consequently, revenues, EBITDA(1) and other operating results for Hughes'
satellite manufacturing businesses are excluded from Hughes' operating results
for all periods presented(2).
"Once again, revenue growth in the quarter was driven by our DIRECTV(R)
businesses," explained Smith. "The momentum in the United States just keeps
building. DIRECTV U.S. had yet another quarter of record subscriber growth while
more than doubling its revenues. And as we expand the availability of local
programming and introduce new interactive services, we expect 2000 to be our
best year ever."
Smith added that the DIRECTV business in Latin America also achieved its
best quarter ever, gaining more than twice as many net new subscribers as were
added during its previous best quarter. "With the completion of our recent
strategic initiatives in Latin America, we feel that DIRECTV is now in a
position to reach its full potential in that region," Smith said.
EBITDA for the fourth quarter of 1999 was negative $174.4 million compared
to EBITDA of $69.2 million in the same period of 1998. The decline was primarily
due to a previously announced fourth quarter 1999 pre-tax charge of $272 million
related to the discontinuation of certain wireless businesses at Hughes Network
Systems (HNS).
Excluding the charge, EBITDA increased 41.0% to $97.6 million, primarily
due to improved EBITDA at DIRECTV U.S. related to the United States Satellite
Broadcasting Company, Inc. (USSB) and PRIMESTAR transactions, and the larger
subscriber base. PanAmSat also contributed a solid EBITDA performance,
principally due to its lower leaseback expense resulting from the exercise of
certain early buy-out options under satellite sale-leaseback agreements.
- 31 -
In the fourth quarter of 1999, Hughes incurred a loss(3) of $226.7 million
and a loss per share, including the effect of preferred stock dividends, of
$0.58, compared to earnings(3) of $128.2 million and earnings per share (EPS) of
$0.32 for the same period in 1998. The declines were primarily due to the
wireless charge, higher depreciation and amortization expenses related
principally to the USSB and PRIMESTAR transactions and increased PanAmSat
satellite expenditures, an increase in net interest expense, and a $115 million
fourth quarter 1998 favorable adjustment to the income tax provision resulting
from a tax settlement with the Internal Revenue Service (IRS).
FULL-YEAR 1999 FINANCIAL REVIEW
Year-end 1999 revenues increased 59.8% to $5,560.3 million, compared with
$3,480.6 million in 1998. This was primarily due to record subscriber growth in
the Company's U.S. and Latin American DIRECTV businesses, as well as additional
revenues resulting from the USSB and PRIMESTAR transactions. HNS also
contributed to the revenue growth, primarily through its record sales of DIRECTV
receiving equipment.
EBITDA for the year was $222.7 million and EBITDA margin was 4.0%,
compared to EBITDA of $341.7 million and EBITDA margin of 9.8% in 1998. The
declines were principally due to the fourth quarter 1999 charge related to the
discontinuation of certain HNS wireless businesses, which more than offset
EBITDA gains at DIRECTV U.S. and PanAmSat. Excluding the charge, 1999 EBITDA
increased 44.8% to $494.7 million due to EBITDA gains at DIRECTV, PanAmSat and
HNS.
In 1999, Hughes incurred a loss of $270.3 million and a loss per share,
including the effect of preferred stock dividends, of $0.77, compared to
earnings of $271.7 million and EPS of $0.68 in 1998. The declines were primarily
attributable to the reduced EBITDA, a second quarter 1999 pre-tax charge of
$125.0 million related to increased development costs and schedule delays
associated with several new product lines at Hughes Space and Communications, a
first quarter 1999 pre-tax charge of $92.0 million resulting from the
termination of the contract for the Asia-Pacific Mobile Telecommunications
(APMT) satellite system due to export licenses not being issued, higher
depreciation and amortization expenses related principally to the USSB and
PRIMESTAR transactions and increased PanAmSat satellite expenditures, an
increase in net interest expense, and the 1998 favorable adjustment to the tax
provision. These declines were partially offset by a first quarter 1999
after-tax gain of $94.3 million ($154.6 million pre-tax) related to the
settlement of the Williams patent infringement case(4).
SEGMENT FINANCIAL REVIEW
FOURTH QUARTER 1999
Direct-To-Home Broadcast
Fourth quarter revenues for the segment more than doubled to $1,213.6
million from $567.6 million in the fourth quarter of 1998. The segment had
negative EBITDA of $24.9 million compared with negative EBITDA of $69.4 million
in the fourth quarter of 1998.
United States: DIRECTV reported quarterly revenues of $1,100 million, more
than twice last year's fourth quarter revenues of $476 million. The increase was
due to strong subscriber growth, as well as additional revenues resulting from
the USSB and PRIMESTAR transactions.
- 32 -
In December 1999, DIRECTV became the first U.S. direct broadcast satellite
service to add more than 200,000 net new subscribers in a single month,
contributing to its all-time high quarter of 515,000 new subscribers. This
represented a 29% increase over the 400,000 new subscribers added in the fourth
quarter of 1998. In addition, 241,000 customers were transitioned from the
PRIMESTAR By DIRECTV medium-power service to the high-power service in the
quarter.
For the full-year 1999, DIRECTV added 1,606,000 net new high-power
subscribers, a 39% increase over the 1,157,000 new subscribers added in 1998. In
addition, DIRECTV converted 470,000 customers from PRIMESTAR By DIRECTV in 1999.
As of December 31, 1999, DIRECTV served more than 8 million U.S. customers,
including approximately 1.4 million customers subscribing to PRIMESTAR By
DIRECTV.
EBITDA for the fourth quarter of 1999 was $27 million compared to negative
EBITDA of $32 million in the preceding year's fourth quarter. This improvement
was principally due to contributions from the USSB and PRIMESTAR transactions,
as well as improved EBITDA resulting from the larger high-power subscriber base.
Latin America and Japan: The DIRECTV business in Latin America generated
$102 million in revenues for the quarter compared with $73 million in the fourth
quarter of 1998. This increase was due to the record subscriber growth and
additional revenues resulting from the consolidation of Galaxy Brasil, Ltda.
(GLB)(5), Grupo Galaxy Mexicana , S.A. de C.V. (GGM)(5), and SurFin, Ltd.(5).
In the fourth quarter, the DIRECTV service in Latin America had three
consecutive months of record subscriber growth, adding 136,000 net new
subscribers, which is more than twice as many as the 61,000 acquired in the same
period last year. The total number of DIRECTV subscribers in Latin America as of
December 31, 1999 was 804,000.
The DIRECTV business in Latin America had negative EBITDA of $42 million
compared to negative EBITDA of $30 million for the same period in 1998. The
change was primarily due to the impact of the consolidation of GLB and GGM, and
higher marketing expenses in the region.
In addition, DIRECTV Japan, of which Hughes currently owns 42%, reported a
total of 386,000 subscribers at the end of the fourth quarter of 1999. Hughes'
share of DIRECTV Japan's losses was $74 million for the quarter, compared with
$36 million in the fourth quarter of 1998. The higher loss was primarily due to
increased marketing expenses in the region, as well as the recording of a higher
portion of equity losses resulting from an increase in Hughes' investment in
DIRECTV Japan. These losses are reported in "Other, net" in the Statement of
Income (Loss) and Available Separate Consolidated Net Income (Loss).
Satellite Services
PanAmSat, which is 81% owned by Hughes, generated revenues of $206.0
million in the fourth quarter of 1999, compared with $196.7 million in the prior
year's period. The increase was primarily due to new service agreements on
satellites placed in service in 1999 as well as continued growth in special
events service revenues. During the fourth quarter of 1999, telecommunications
services revenues increased 19% to $49 million while total video services
revenues increased 2% to $146 million compared to the prior year's fourth
quarter.
- 33 -
EBITDA for the quarter was $152.9 million compared to fourth quarter 1998
EBITDA of $144.3 million. EBITDA margin in the fourth quarter of 1999 was 74.2%,
compared to 73.4% in the same period of 1998. The increases in EBITDA and EBITDA
margin resulted primarily from lower leaseback expense due to the exercise of
certain early buy-out options under satellite sale-leaseback agreements, and
increased operating lease revenues.
Network Systems
HNS revenues in the fourth quarter of 1999 were $386.5 million, compared
to $402.6 million in the fourth quarter of 1998. This decline was principally
due to reduced sales of its wireless telecommunications systems and
international private business network systems. These declines more than offset
higher sales of DIRECTV receiving equipment. HNS shipped 715,000 DIRECTV
receiving systems in the fourth quarter of 1999 compared to 300,000 in the same
year-ago period.
HNS recorded negative EBITDA of $241.5 million in the quarter compared to
EBITDA of $43.0 million in the fourth quarter of 1998. This reduction was
primarily due to the previously announced pre-tax charge of $272 million related
to the discontinuation of certain wireless businesses, and reduced sales of
international private business network systems. HNS' wireless business will now
focus on its leading broadband wireless access (point-to-multipoint) product
line and will discontinue its mobile cellular and narrowband local loop product
lines. HNS will fulfill its outstanding contractual obligations for these
discontinued product lines.
BALANCE SHEET
From December 31, 1998 to December 31, 1999, the Company's cash balance
declined $1,103.8 million to $238.2 million and total debt increased $1,206.6
million to $2,141.4 million. The principal cash requirements for the year were
the USSB and PRIMESTAR transactions, purchase of the Tempo high-power satellite
assets, early buy-out of certain PanAmSat satellite sale-leaseback agreements,
increased investment in the DIRECTV businesses in Latin America and Japan,
capital expenditures and general working capital requirements. These
requirements were partially offset by a $1.5 billion investment by America
Online, Inc. (AOL).
Hughes is the world's leading provider of digital television
entertainment, satellite services, and satellite-based private business
networks. The earnings of Hughes, a unit of General Motors Corporation, are used
to calculate the earnings per share attributable to the General Motors Class H
common stock (NYSE:GMH).
NOTE: Hughes Electronics Corporation believes that certain statements in
this press release may constitute forward-looking statements within the meaning
of The Private Securities Litigation Reform Act of 1995. When used in this press
release, the words "estimate," "plan," "project," "anticipate," "expect,"
"intend," "outlook," "believe," and other similar expressions are intended to
identify forward-looking statements and information. Actual results of Hughes
may differ materially from anticipated results as a result of certain risks and
uncertainties, which include but are not limited to those associated with:
economic conditions; demand for products and services, and market acceptance;
government action; local political or economic developments in or affecting
countries where we have international operations; our ability to obtain export
licenses; competition; our ability to achieve cost reductions; technological
risks; our ability to address the year 2000 issue; interruptions to production
attributable to causes outside our control; limitations on access to
distribution channels; the success and timelines of satellite launches; the
in-orbit performance of satellites; the ability of our customers to obtain
financing; and our ability to access capital to maintain our financial
flexibility. Hughes cautions that these important factors are not exclusive.
- 34 -
- ----------------------
1) EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is
the sum of operating profit (loss) and depreciation and amortization.
EBITDA margin is calculated by dividing EBITDA by total revenues.
2) For all periods presented, net income generated by the satellite
manufacturing businesses (previously referred to as the "Satellite Systems"
segment) is reported as "Income from discontinued operations, net of taxes"
on the Statement of Income (Loss) and Available Separate Consolidated Net
Income (Loss). Similarly, all assets and liabilities of those businesses
are reported as "Net assets of discontinued operations" on the Balance
Sheet.
3) Excludes the effects of purchase accounting adjustments related to General
Motors' acquisition of Hughes in 1985.
4) Hughes was awarded a final judgement arising from its long-running Williams
patent infringement case, which was originally filed by Hughes in 1973. The
award resulted from the repeated infringement by the U.S. Government over a
span of two decades of a patent that revolutionized communications
satellite attitude control and made the geosynchronous satellite practical.
A payment of $154.6 million was received in the first quarter of 1999 and
is recorded in "Income from discontinued operations, net of taxes."
5) Galaxy Brasil, Ltda. (GLB) is the local operating company providing DIRECTV
service in Brazil. Grupo Galaxy Mexicana, S.A. de C.V. (GGM) is the local
operating company providing DIRECTV service in Mexico. SurFin Ltd.,
provides financing for DIRECTV receiving equipment in Latin America. As a
result of transactions that were completed in July 1999 (GLB), February
1999 (GGM) and November 1998 (SurFin), Hughes owns a majority position in
each company.
###
- 35 -
STATEMENT OF INCOME (LOSS) AND
AVAILABLE SEPARATE CONSOLIDATED NET INCOME
(Dollars in Millions Except Per Share Amounts)
Year Ended
Fourth Quarter December 31,
-------------- ------------
1999 1998 1999 1998
- -----------------------------------------------------------------------------
Revenues
Direct broadcast, leasing and
other services $1,394.1 $757.8 $4,489.3 $2,603.6
Product sales 303.9 347.4 1,071.0 877.0
- ----------------------------------------------------------------------------
Total Revenues 1,698.0 1,105.2 5,560.3 3,480.6
- ----------------------------------------------------------------------------
Operating Costs and Expenses
Cost of products sold 366.1 286.6 1,028.3 643.0
Broadcast programming and
other costs 657.6 375.2 2,001.4 1,175.0
Selling, general, and
administrative expenses 848.7 374.2 2,307.9 1,320.9
Depreciation and amortization 189.5 110.5 647.4 384.6
Amortization of GM purchase
accounting adjustments (1) 0.8 0.8 3.3 3.3
- ----------------------------------------------------------------------------
Total Operating Costs
and Expenses 2,062.7 1,147.3 5,988.3 3,526.8
- ----------------------------------------------------------------------------
Operating Loss (364.7) (42.1) (428.0) (46.2)
Interest income 6.2 23.7 27.0 112.3
Interest expense (51.7) (8.0) (122.7) (17.5)
Other, net (60.6) (50.6) (136.3) (151.8)
- ----------------------------------------------------------------------------
Loss From Continuing Operations
Before Income Taxes, Minority
Interests and Cumulative
Effect of Accounting Change (470.8) (77.0) (660.0) (103.2)
Income tax benefit (177.2) (143.0) (236.9) (142.3)
Minority interests in net
losses of subsidiaries 9.9 5.2 32.0 24.4
- ----------------------------------------------------------------------------
Income (Loss) from continuing
operations before cumulative
effect of accounting change (283.7) 71.2 (391.1) 63.5
Income from discontinued
operations, net of taxes 51.9 51.9 99.8 196.4
- ----------------------------------------------------------------------------
Income (Loss) before cumulative
effect of accounting change (231.8) 123.1 (291.3) 259.9
Cumulative effect of accounting
change, net of taxes - - - (9.2)
- ----------------------------------------------------------------------------
Net Income (Loss) (231.8) 123.1 (291.3) 250.7
Adjustments to exclude
the effect of GM purchase
accounting adjustments (1) 5.1 5.1 21.0 21.0
- ----------------------------------------------------------------------------
Earnings (Loss) Excluding the
Effect of GM Purchase
Accounting Adjustments (226.7) 128.2 (270.3) 271.7
Preferred stock dividends (24.6) - (50.9) -
- ----------------------------------------------------------------------------
Earnings (Loss) Used for
Computation of Available
Separate Consolidated
Net Income (Loss) $(251.3) $128.2 $(321.2) $271.7
============================================================================
Available Separate Consolidated
Net Income (Loss)
Average number of shares of
General Motors Class H
Common Stock outstanding
(in millions) (Numerator) 136.3 105.9 124.7 105.3
Average Class H dividend base
(in millions)(Denominator) 430.1 399.9 418.5 399.9
Available Separate Consolidated
Net Income (Loss) $(79.6) $33.9 $(95.7) $71.5
============================================================================
Earnings (Loss) Attributable to
General Motors Class H Common
Stock on a Per Share Basis
Income (Loss) from continuing
operations before cumulative
effect of accounting change $(0.71) $0.18 $(1.05) $0.17
Income from discontinued
operations, net of taxes $0.13 $0.14 $0.28 $0.53
Cumulative effect of
accounting change,
net of taxes - - - $(0.02)
- ----------------------------------------------------------------------------
Earnings (Loss) Attributable
to General Motors Class H
Common Stock on a Per Share
Basis - Basic and Diluted $(0.58) $0.32 $(0.77) $0.68
============================================================================
(1)Relates to General Motors' purchase of Hughes in 1985.
- 36 -
BALANCE SHEET
(Dollars in Millions)
December 31, December 31,
ASSETS 1999 1998
- ----------------------------------------------------------------------------
Current Assets
Cash and cash equivalents $238.2 $1,342.0
Accounts and notes receivable 960.9 764.6
Contracts in process 155.8 179.0
Inventories 236.1 286.6
Net assets of discontinued operations 1,159.5 972.4
Prepaid expenses, deferred income taxes and other 788.2 321.1
- ----------------------------------------------------------------------------
Total Current Assets 3,538.7 3,865.7
Satellites - net 3,907.3 3,197.5
Property - net 1,223.0 683.0
Net Investment in Sales-type Leases 146.1 173.4
Intangible Assets, net 7,406.0 3,185.9
Investments and Other Assets 2,039.9 1,302.4
- ----------------------------------------------------------------------------
Total Assets $18,261.0 $12,407.9
============================================================================
LIABILITIES AND STOCKHOLDER'S EQUITY
- ----------------------------------------------------------------------------
Current Liabilities
Accounts payable $1,062.2 $691.8
Advances on contracts 23.0 20.1
Deferred revenues 130.5 43.8
Current portion of long-term debt 555.4 156.1
Accrued liabilities 618.8 257.0
- ----------------------------------------------------------------------------
Total Current Liabilities 2,389.9 1,168.8
Long-Term Debt 1,586.0 778.7
Postretirement Benefits Other Than Pensions 19.7 20.4
Other Liabilities and Deferred Credits 1,433.3 935.3
Deferred Income Taxes 672.5 641.1
Commitments and Contingencies
Minority Interests 544.3 481.7
Stockholder's Equity 11,615.3 8,381.9
- ----------------------------------------------------------------------------
Total Liabilities and Stockholder's Equity $18,261.0 $12,407.9
============================================================================
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).
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PRO FORMA SELECTED SEGMENT DATA*
(Dollars in Millions)
Year Ended
Fourth Quarter December 31,
-------------- ----------------
1999 1998 1999 1998
- --------------------------------------------------------------------------
DIRECT-TO-HOME BROADCAST
Total Revenues $1,213.6 $567.6 $3,785.0 $1,816.1
EBITDA (1) $(24.9) $(69.4) $19.9 $(125.8)
EBITDA Margin (1) N/A N/A 0.5% N/A
Operating Loss $(132.7) $(94.5) $(292.1) $(228.1)
Depreciation and Amortization $107.8 $25.1 $312.0 $102.3
Capital Expenditures (2) $263.5 $100.7 $516.9 $230.8
- --------------------------------------------------------------------------
SATELLITE SERVICES
Total Revenues $206.0 $196.7 $810.6 $767.3
EBITDA (1) $152.9 $144.3 $618.8 $553.3
EBITDA Margin (1) 74.2% 73.4% 76.3% 72.1%
Operating Profit $80.2 $82.4 $341.6 $321.6
Operating Profit Margin 38.9% 41.9% 42.1% 41.9%
Depreciation and Amortization $72.7 $61.9 $277.2 $231.7
Capital Expenditures (3) $133.4 $316.7 $956.4 $921.7
- --------------------------------------------------------------------------
NETWORK SYSTEMS
Total Revenues $386.5 $402.6 $1,384.7 $1,076.7
EBITDA (1) $(241.5) $43.0 $(178.1) $52.6
EBITDA Margin (1) N/A 10.7% N/A 4.9%
Operating Profit (Loss) $(253.0) $31.1 $(227.3) $10.9
Operating Profit Margin N/A 7.7% N/A 1.0%
Depreciation and Amortization $11.5 $11.9 $49.2 $41.7
Capital Expenditures $11.9 $13.6 $35.0 $40.0
- --------------------------------------------------------------------------
ELIMINATIONS and OTHER
Total Revenues $(108.1) $(61.7) $(420.0) $(179.5)
EBITDA (1) $(60.9) $(48.7) $(237.9) $(138.4)
Operating Loss $(58.4) $(60.3) $(246.9) $(147.3)
Depreciation and Amortization $(2.5) $11.6 $9.0 $8.9
Capital Expenditures $111.1 $21.8 $157.0 $136.3
- --------------------------------------------------------------------------
TOTAL
Total Revenues $1,698.0 $1,105.2 $5,560.3 $3,480.6
EBITDA (1) $(174.4) $69.2 $222.7 $341.7
EBITDA Margin (1) N/A 6.3% 4.0% 9.8%
Operating Loss $(363.9) $(41.3) $(424.7) $(42.9)
Depreciation and Amortization $189.5 $110.5 $647.4 $384.6
Capital Expenditures $519.9 $452.8 $1,665.3 $1,328.8
* 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 exclude 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)EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is
the sum of operating profit (loss) and depreciation and amortization. EBITDA
margin is calculated by dividing EBITDA by total revenues.
(2)Includes satellite expenditures amounting to $46.9 million, $32.2 million,
$136.0 million and $70.2 million, respectively.
(3)Includes satellite expenditures amounting to $124.0 million, $304.1 million,
$532.8 million and $726.3 million, respectively. Also included are
expenditures related to the early buy-out of satellite sale-leasebacks
totaling $369.5 million and $155.5 million for the years ended December 31,
1999 and 1998, respectively.
* * * * * *
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
GENERAL MOTORS CORPORATION
--------------------------
(Registrant)
Date January 20, 2000
-----------------
By
s/Peter R. Bible
-------------------------------
(Peter R. Bible,
Chief Accounting Officer)
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