1st Quarter Results

GM Reports Preliminary Q1 Financial Results * Reported Net Loss $323 Million, About $1 Billion Improvement From 2005 * Record Quarterly Revenue of $52.2 Billion * $567 Million GMNA Improvement Despite $484 Million Health-Care Charge * Automotive Liquidity Stronger at $21.6 Billion DETROIT, April 20 -- General Motors Corp. (NYSE: GM) today reported significantly improved financial results for the first quarter of 2006, with operations from every automotive region in the world contributing to the turnaround efforts. "The first quarter represented an important milestone in GM and GM North America's turnaround," said GM Chairman and Chief Executive Officer Rick Wagoner. "Not only did we see significant improvement in the financial results of all our automotive units, we also announced numerous additional actions to improve our North American competitiveness and liquidity. And, we made significant progress in implementing those and previously announced initiatives, such as the UAW health-care agreement and the North American capacity plan. "We're pleased to see the significant progress in our first-quarter results and in the implementation of all four elements of our North American turnaround plan," Wagoner continued. "And we remain focused on accelerating our return to profitability and cash generation." GM reported a preliminary net loss of $323 million, or $0.57 per share, in the first quarter of 2006, including special items. This was more than accounted for by the inclusion of a $681 million after-tax charge, or $1.20 per share, related to the recently approved health-care settlement agreement for U.S. hourly retirees. These first-quarter results represent a significant improvement from the year-ago loss of $1.3 billion, or $2.22 per share. Reported revenue rose 14.1 percent to a record $52.2 billion in the first quarter of 2006. Excluding special items but including the effect of the $681 million health-care charge ($1 billion pretax), GM reported a preliminary adjusted loss of $529 million, or $0.94 per share in the first quarter of 2006. In the year-ago quarter, GM reported an adjusted loss before special items of $988 million, or $1.75 per share. The reported results for the first quarter of 2006 include special items totaling a favorable $206 million after tax, or $0.37 per diluted share. These results include a gain of $317 million, or $0.56 per share, from the sale of most of GM's stake in Suzuki, partially offset by restructuring charges totaling $111 million, or $0.19 per share, at GM North America (GMNA), GM Europe (GME) and GM Latin America/Africa/Middle East (GMLAAM). Additional details on the special items are included in the "Highlights" section of this press release. GM's results for the first quarter of 2006 are preliminary and may be revised prior to the filing of GM's first quarter report on Form 10-Q in early May, depending on factors such as the final determination of the accounting treatment for the retiree health-care settlement agreement. Health Care Agreement to Reduce Liability by $15 billion The unprecedented health-care settlement between GM and its largest labor union, the United Auto Workers, was approved by the U.S. District Court on March 31, 2006. "The health-care agreement is expected to result in an immediate 25-percent reduction in GM's hourly retiree health-care liability, or about $15 billion," Wagoner said. "The court approval is an important milestone, enabling us to implement this on the schedule we had anticipated." As part of the agreement, GM will make contributions to a new independent Defined Contribution Voluntary Employees' Beneficiary Association (DC VEBA) of $1 billion in each of 2006, 2007, and 2011. GM will also make supplemental contributions to the DC VEBA related to events like profit-sharing payments and increases in the value of GM stock. Because the settlement received final court approval on March 31, the first $1 billion DC VEBA contribution is being recorded in the first quarter of 2006 even though the cost savings will not be realized until the second half of the year. Beginning July 1, the pretax savings associated with the health-care agreement will be approximately $750 million per quarter through 2011. According to the accounting treatment that GM believes is appropriate under U.S. Generally Accepted Accounting Principles, the obligation to make the contributions would be recognized in each of the three periods in which they become due and payable. Other possible accounting treatments include recognizing the present value of all three payments as expense on March 31, 2006, which would significantly increase the amount of the first-quarter charge and eliminate any future charges. GM is currently in discussions with the U.S. Securities and Exchange Commission to determine the final accounting treatment and expects the issue to be resolved before it files its Form 10-Q. GM financial results described throughout the remainder of this release exclude special items unless otherwise noted (see "Highlights"). GM Automotive Operations GM's automotive operations reported an adjusted loss of $721 million in 2006, including the health-care charge, halving the year-ago adjusted loss of $1.5 billion. All of the company's automotive units reported progress in the quarter, with three out of the four units posting profitable results. Global automotive sales rose 4.4 percent to 2.2 million units as strong sales in GM's Asia Pacific and Latin American regions were partially offset by declines in the United States and Canada. Global market share was down slightly to 13.2 percent from 13.3 percent a year ago. GM North America Shows Improvement GM North America reported an adjusted loss of $946 million in the first quarter of 2006, including $484 million of the retiree health-care settlement charge. This compares to an adjusted loss of $1.5 billion a year ago. Higher production volumes, improved mix and better net pricing contributed $1.1 billion of improvement to GMNA operating earnings, offset in part by the health-care charge. Revenue per unit sold in GMNA was significantly higher in the quarter versus a year ago, mostly attributable to better pricing and richer mix. U.S. dealer inventories ended the quarter at 1,169,000 vehicles, down 74,000 units from the year-ago period, and well positioned for the spring selling season. GM recently increased its structural cost reduction target in North America by more than $1 billion, to $7.5 billion on a running rate basis by the end of 2006, excluding the cost of the three $1 billion DC VEBA contributions in 2006, 2007 and 2011. Approximately $4 billion of this reduction will be cash savings. GM also continues to focus on achieving the previously reported $1 billion target of material cost savings in 2006, which is under pressure due to high raw material and commodity prices. GM remains committed to revitalizing its product portfolio through an aggressive product spending program. In 2006, GM expects capital spending to total approximately $8.7 billion. This represents an increase of approximately $800 million over 2005 levels. "We are very pleased with the market's reaction to our launch products," Wagoner said. "In the first three months of the year, our new products accounted for about 30 percent of our total sales -- more than double where we were a couple of years ago. We're especially encouraged by the early sales of the Chevrolet Tahoe, GMC Yukon, and Cadillac Escalade. And we're pleased with the reaction last week to the new Saturn Sky and Aura at the New York Auto Show." GM is revitalizing its sales and marketing strategy by focusing on the strength of its products, emphasizing their great value and features in relation to the competition. GM is focused on improving the mix and quality of its share by reducing incentives and the volume of sales to daily rental car companies. While this may result in short-term declines in sales and market share, it also is expected to result in improved retail sales and financial performance over time. "Despite even higher incentives by many of our competitors, we think our new product-focused marketing strategy is the right one, and early results are in line with our expectations," Wagoner said. GM Europe Posts Profitable Quarter GM Europe reported adjusted earnings of $88 million in the first quarter of 2006, a significant improvement from the year-ago loss of $92 million, reflecting improved pricing, continued progress in reducing structural and material costs, better mix and lower warranty and policy costs. In addition, Saab showed significant financial improvement and sold more than 34,000 vehicles worldwide, an all-time first-quarter record. "Our European turnaround plan moved into high gear in the first quarter," Wagoner said. "Looking forward, we'll continue to focus on that, as well as growing our multi-brand strategy in Europe and on important vehicle launches. The Cadillac BLS is arriving in dealerships now, followed by the Chevrolet Epica in June and the Opel Corsa and Chevrolet Captiva in the third quarter." GM Asia Pacific Reports Improved Results GM Asia Pacific (GMAP) reported adjusted earnings of $81 million in the first quarter of 2006, up from $70 million a year ago, reflecting improved sales volumes in China and higher sales volumes from GM Daewoo. "Asia Pacific continues to be a very positive story for GM," Wagoner said. "GM vehicle sales in China were up 76 percent during the quarter, and our steady commitment to expanding our product line-up continues to pay dividends. Likewise, our investment in GM Daewoo continues to pay returns, with domestic sales and export shipments rising 60 percent in the first quarter." GM Latin America/Africa/Middle East GM Latin America/Africa/Middle East reported adjusted earnings of $56 million in the first quarter of 2006, up from $31 million in the same period last year. This reflects a significant improvement in Brazil. "GM continues to set sales and market share records in the Latin America/Africa/Middle East region," Wagoner said. "In the first quarter, LAAM achieved an all-time first quarter sales record of 230,100 units, up 26 percent from the year-ago period. Of the 11 major markets in the region, four set all-time quarterly GM sales records and another four set first-quarter sales records." GMAC General Motors Acceptance Corporation (GMAC) earned $605 million in the first quarter of 2006, compared to $728 million in the year-ago period, reflecting improved earnings from financing operations and insurance, offset by lower mortgage earnings. "GMAC continued to post strong earnings despite lower credit ratings and higher borrowing costs," Wagoner said. "The agreement that we announced earlier this month to sell a 51-percent controlling interest in GMAC to a consortium of investors led by Cerberus Capital Management is expected to close later this year. Once implemented, the new ownership structure should strengthen GMAC's ability to support GM's automotive operations, improve GMAC's access to cost-effective funding and provide $14 billion in liquidity to GM over the next three years." GMAC had cash reserve balances at March 31, 2006 of approximately $22.1 billion, including $17.3 billion in cash and cash equivalents and $4.8 billion in marketable securities. This compares with cash balances of approximately $20 billion at Dec. 31, 2005. GMAC's financing operations reported earnings of $270 million in the first quarter of 2006, compared to $216 million a year ago. The increase is largely due to the effect of lower consumer credit provisions, primarily as a result of automotive whole loan activity and favorable international credit performance. ResCap earnings were $197 million in the first quarter 2006, down from the $351 million earned in the year-ago period. While revenues were strong from higher asset levels, results were negatively affected by lower net margins resulting from both pricing pressures and higher funding costs. In addition, gains on sales of loans were down due to a significant gain in the year-ago quarter from the sale of a portfolio of distressed mortgage loans. Mortgage originations were $41.6 billion for the latest quarter, representing an increase from the $36.4 billion in the year-ago period. GMAC completed the sale of approximately 78 percent of its equity in GMAC Commercial Mortgage on March 23, 2006, for approximately $1.5 billion in cash. At the closing, GMAC Commercial Mortgage, now named CapMark Financial Group Inc., also repaid to GMAC approximately $7.3 billion in intercompany loans, bringing the total cash proceeds from the transaction to $8.8 billion. GMAC earnings related to Commercial Mortgage were $9 million, representing operating income of $50 million and a loss on sale of $41 million, after closing costs. GMAC's insurance operations generated net income of $129 million in the first quarter of 2006, up from $94 million in the same period a year ago primarily reflecting the impact of strong underwriting results. In addition, first quarter results also benefited from the strategic acquisition of MEEMIC Insurance Co., a personal lines business that offers automobile and homeowners insurance in the Midwest. Cash and Liquidity Cash, marketable securities, and readily-available assets of the Voluntary Employees' Beneficiary Association (VEBA) trust totaled $21.6 billion at March 31, 2006, up from $20.4 billion on Dec. 31, 2005 and $19.8 billion on March 31, 2005. GM withdrew approximately $2 billion from the VEBA trust in the first quarter of 2006, including $1 billion from the short-term VEBA. Liquidity remains a key focus of the corporation. GM sold most of its 20-percent stake in Suzuki during the first quarter, generating approximately $2 billion in cash. Also, GM recently announced the sale of its stake in Isuzu which generated approximately $300 million in proceeds in the second quarter of 2006. In February, GM reduced its common stock dividend by 50 percent, which is expected to save approximately $565 million annually. Finally, the planned sale of 51-percent of GMAC is expected to provide GM with up-front cash proceeds of about $10 billion and significant ongoing cash flow from retained assets and GMAC distributions over time. Outlook GM has made significant progress to turn around its North American operations, including the UAW retiree health-care agreement, the manufacturing capacity actions, the changes to GM's U.S. salaried retiree health-care benefits and salaried pension plan benefits and the hourly accelerated attrition program. "While we are encouraged by the speed and scale of the changes we're implementing, there is clearly more work to be done," Wagoner said. "Our next key priority is to reach a consensual agreement with Delphi and its unions that makes sense for all of the parties. The agreement we recently reached with the UAW on the attrition program is a significant step in achieving this objective, but there is more important work to do." Forward-Looking Statements In this press release and in related comments by General Motors' and General Motors Acceptance Corporation's management, the use of the words "expect," "anticipate," "estimate," "forecast," "initiative," "objective," "plan," "goal," "project," "outlook," "priorities," "target," "intend," "evaluate," "pursue," "seek," "may," "would," "could," "should," "believe," "potential," "continue," "designed," "impact," or the negative of any of those words or similar expressions is intended to identify forward-looking statements. Other than statements of historical fact, all statements in this press release and in related comments, including without limitation, statements about future events and financial performance, are forward-looking statements that involve certain risks and uncertainties. While these statements represent our current judgment on possible future events, and we believe that when we made these judgments they were reasonable, these statements are not guarantees of any events or financial results, and GM's actual results may differ materially due to numerous important factors that may be revised or supplemented in subsequent reports on SEC Forms 10-Q and 8-K. Such factors include, among others, the following: the ability of GM to realize production efficiencies, to achieve reductions in costs as a result of the turnaround restructuring, health care cost reductions and an accelerated attrition program and to implement capital expenditures at levels and times planned by management; the pace of product introductions; market acceptance of the Corporation's new products; significant changes in the competitive environment and the effect of competition in the Corporation's markets, including on GM's pricing policies; our ability to maintain adequate liquidity and financing sources and an appropriate level of debt; restrictions on GMAC's and ResCap's ability to pay dividends and prepay subordinated debt obligations to us; changes in the existing, or the adoption of new, laws, regulations, policies or other activities of governments, agencies and similar organizations where such actions may affect the production, licensing, distribution or sale of our products, the cost thereof or applicable tax rates; costs and risks associated with litigation; the final results of investigations and inquiries by the SEC; changes in our accounting principles, or their application or interpretation, and our ability to make estimates and the assumptions underlying the estimates, including the range of estimates for the Delphi pension benefit guarantees, which could result in an impact on earnings; changes in relations with unions and employees/retirees and the legal interpretations of the agreements with those unions with regard to employees/retirees; negotiations and bankruptcy court actions with respect to Delphi's obligations to GM, negotiations with respect to GM's obligations under the pension benefit guarantees to Delphi employees, and GM's ability to recover any indemnity claims against Delphi; labor strikes or work stoppages at GM or its key suppliers such as Delphi or financial difficulties at GM's key suppliers such as Delphi; additional credit rating downgrades and the effects thereof; our ability to complete the sale of a 51-percent controlling interest in GMAC and the effect of that sale on the results of GM's and GMAC's operations and liquidity; other factors affecting financing and insurance operating segments' results of operations and financial condition such as credit ratings, adequate access to the market, changes in the residual value of off-lease vehicles, changes in U.S. government-sponsored mortgage programs or disruptions in the markets in which its mortgage subsidiaries operate, and changes in its contractual servicing rights; shortages of and price increases for fuel; and changes in economic conditions, commodity prices, currency exchange rates or political stability in the markets in which we operate. In addition, GMAC's actual results may differ materially due to numerous important factors that are described in GMAC's most recent report on SEC Form 10-K, which may be revised or supplemented in subsequent reports on SEC Forms 10-Q and 8-K. Such factors include, among others, the following: the ability of GM to complete the sale of a 51-percent controlling interest in GMAC; significant changes in the competitive environment and the effect of competition in GMAC's and GM's markets, including on GMAC's and GM's pricing policies; GMAC's ability to maintain adequate financing sources and an appropriate level of debt; the profitability and financial condition of GM, including changes in production or sales of GM vehicles, risks based on GM's contingent benefit guarantees and the possibility of labor strikes or work stoppages at GM or at key suppliers such as Delphi; funding obligations under GM and its subsidiaries' qualified U.S. defined benefits pension plans; restrictions on ResCap's ability to pay dividends and prepay subordinated debt obligations to GMAC; changes in the residual value of off-lease vehicles; changes in U.S. government-sponsored mortgage programs or disruptions in the markets in which GMAC's mortgage subsidiaries operate; changes in GMAC's contractual servicing rights; costs and risks associated with litigation; changes in GMAC's accounting assumptions that may require or that result from changes in the accounting rules or their application, which could result in an impact on earnings; changes in the credit ratings of GMAC or GM; the threat of natural calamities; changes in economic conditions, currency exchange rates or political stability in the markets in which we operate; and changes in the existing, or the adoption of new, laws, regulations, policies or other activities of governments, agencies and similar organizations. Investors are cautioned not to place undue reliance on forward-looking statements. GM undertakes no obligation to update publicly or otherwise revise any forward-looking statements, whether as a result of new information, future events or other such factors that affect the subject of these statements, except where expressly required by law. General Motors Corporation Non-GAAP Disclosure GM includes the use of non-GAAP adjusted net income (loss) in its earnings releases and charts for securities analysts. GM management evaluates its business and makes certain operating decisions (e.g., budgeting, forecasting, employee compensation, asset management and resource allocation) using adjusted net income. Management believes that because this measure provides it with useful supplemental information for evaluating and operating the business, investors would find it beneficial to have the opportunity to view the business in the same manner. Adjusted net income is a measure that focuses on the Corporation's core business operations and facilitates comparison of those businesses from period to period on a consistent basis. Management also believes it is appropriate in evaluating the Corporation's operations to exclude restructuring charges and any gain or losses from one-time items because these costs vary in size and frequency among the four geographic regions, since inclusion of these events would make results less comparable between periods and between regions. GM also includes the use of non-GAAP managerial automotive operating cash flow in its earnings releases and charts for securities analysts. Management believes that providing managerial automotive operating cash flow furnishes it and investors with useful information by representing the cash flow generated or consumed by its automotive operations, including cash consumed by automotive capital expenditures and equity investments in companies related to our core business and cash generated by sales of automotive operating assets and equity investments in companies related to our core business, before funding non-operating-related obligations including debt maturities, dividends and other non-operating items. GM's earnings releases and charts for securities analysts also include the use of non-GAAP measures of revenue per vehicle and the GM North American structural cost reduction target. Management uses revenue per vehicle to track operating efficiency and to facilitate comparisons between periods and between manufacturers, and believes that it would provide valuable information to investors who are interested in identifying trends and comparing different companies. Revenue per vehicle includes certain sales to other GM regions that are excluded from GAAP reporting, and excludes non-vehicle sales such as service parts and operations and OnStar service and other income that GM does not derive from the sale of vehicles such as interest or the GM credit card. Management also includes sales to daily car rental companies in revenue per vehicle, although they are excluded from GAAP reporting because of GM's repurchase obligations. GM North America's structural cost reduction target excludes the cost of the three $1 billion DC VEBA contributions in 2006, 2007, and 2011. Management uses this measure to track the structural cost reduction target on a running rate basis since a significant portion of the benefit of the health-care Settlement Agreement related to hourly employees is anticipated to extend well beyond the periods in which the expense related to the contributions will be incurred. Management believes that this measure is useful to investors as it allows them to evaluate the ongoing effects of GM's structural cost reduction initiatives. Non-GAAP measures should not be considered as a substitute for measures of financial performance prepared in accordance with GAAP. Investors and potential investors are encouraged to review the reconciliation of non-GAAP financial measures contained within the attached press release with their most directly comparable GAAP financial results. General Motors Corporation List of Special Items - After Tax (Dollars in millions except per share amounts) (Unaudited) Three Months Ended March 31, 2006 ------------------ Net $1-2/3 Income EPS ------ ----- REPORTED -------- Net (loss) $(323) $(0.57) ADJUSTMENTS ----------- Restructuring (A) 111 0.19 Sale of Suzuki investment (B) (317) (0.56) --- ---- Subtotal (206) (0.37) ADJUSTED -------- --- ---- Adjusted income $(529) $(0.94) === ==== (A) Relates to various restructuring initiatives, as follows (all amounts after tax): o Estimated charges of $65 million related to separations of salaried employees at GMNA. o Curtailment charges associated with modifications to the U.S. Retirement Program for Salaried Employees announced in the first quarter of 2006. GMNA and Other Operations recognized charges of $12 million and $3 million respectively associated with these modifications. o A favorable adjustment of $88 million for higher than anticipated headcount reductions associated with previously announced GMNA plant idling activities, o A charge of $52 million for certain components of the hourly attrition program related to retroactive lump-sum payments, recognized at GMNA. o Other restructuring charges of $40 million and $27 million, recognized at GME and GMLAAM, respectively. (B) Relates to the sale of 92.36 million shares of GM's investment in Suzuki for approximately $2.0 billion in cash, reducing GM's equity stake in Suzuki from 20.4% to approximately 3.7% (16.3 million shares). The after-tax gain of $317 million was recognized at GMAP. General Motors Corporation List of Special Items - After Tax (Dollars in millions except per share amounts) (Unaudited) Three Months Ended March 31, 2005 ------------------ Net $1-2/3 Income EPS ------ ----- REPORTED -------- Net (loss) $(1,253) $(2.22) ADJUSTMENTS ----------- Salaried Attrition Program (A) 148 0.26 Plant and Facility Impairments (B) 84 0.15 GME Restructuring Charge (C) 422 0.75 Tax Items (D) (389) (0.69) --- ---- Subtotal 265 0.47 ADJUSTED -------- --- ---- Adjusted (loss) $(988) $(1.75) === ==== (A) Salaried Attrition Program relates to voluntary early retirement and other separation programs in the U.S. in the first quarter of 2005. (B) Plant and Facility Impairments relates to the write-down to fair market value of various plant assets in connection with the discontinuance of production at the Lansing assembly plant during the second quarter of 2005. (C) In the fourth quarter of 2004, GM Europe announced a restructuring plan targeting a reduction in annual structural costs of an estimated $600 million by 2006. A total reduction of 12,000 employees, including 10,000 in Germany, from 2005-2007 through separation programs, early retirements, and selected outsourcing initiatives is expected. The after-tax separation cost of $422 million in the first quarter of 2005 covers approximately 5,650 people, of whom 4,900 are in Germany. (D) Tax Items relate to tax benefits (including the Medicare Part D benefit in the U.S.), in excess of GM's previously communicated annual effective tax rate of 15%, which do not vary with the level of pre-tax income. Adjusted loss reflects an effective tax rate of 15%. General Motors Corporation Summary Corporate Financial Results (Unaudited) First Quarter -------------- 2006 2005 ---- ---- (Dollars in millions except per share amounts) Total net sales and revenues $52,245 $45,773 Adjusted $51,706 $45,773 Net income (loss) $(323) $(1,253) Adjusted $(529) $(988) Net margin (Net income /Total net sales and revenues) (0.6)% (2.7%) Adjusted (1.0)% (2.2%) Earnings (losses) per share - basic $1-2/3 par value $(0.57) $(2.22) Earnings (losses) per share - diluted $1-2/3 par value $(0.57) $(2.22) Earnings (losses) per share - adjusted diluted $1-2/3 par value $(0.94) $(1.75) GM $1-2/3 par value average shares outstanding (Mil's) Basic shares 566 565 Diluted shares 566 565 Cash dividends per share of common stocks GM $1-2/3 par value $0.25 $0.50 See reconciliation of adjusted financial results. General Motors Corporation Summary Corporate Financial Results (Unaudited) First Quarter -------------- 2006 2005 ---- ---- Book value per share of common stocks at March 31 GM $1-2/3 par value $26.02 $44.37 Auto & Other total cash & marketable securities at March 31 ($Bil's) $18.8 $15.6 Readily-available assets in VEBA 2.8 4.2 ---- ---- Total Auto & Other cash & marketable securities plus readily-available assets in VEBA $21.6 $19.8 ==== ==== Auto & Other Operations ($Mil's) Depreciation $1,114 $1,270 Amortization of special tools 733 816 Amortization of intangible assets 14 10 ----- ----- Total $1,861 $2,096 ===== ===== GM's share of nonconsolidated affiliates' net income (loss) ($Mil's) Italy * NA $21 Japan $21 $50 China $70 $33 South Korea # NA $(8) * During the second quarter of 2005, GM and Fiat S.p.A. completed the liquidation and termination of all joint ventures between them in existence at that time. As a result, GM regained complete ownership of all assets it originally contributed to each joint venture. # Effective for the third quarter 2005, the results of GM Daewoo's operations are consolidated by GM. General Motors Corporation Summary Corporate Financial Results (Unaudited) First Quarter 2006 and 2005 -------------- (Dollars in millions) Reported Special Items Adjusted -------- ------------- -------- 2006 2005 2006 2005 2006 2005 ---- ---- ---- ---- ---- ---- Total net sales and revenues GMNA(1) $28,531 $25,227 $ - $ - $28,531 $25,227 GME(1) 8,091 8,108 - - 8,091 8,108 GMLAAM 3,140 2,299 - - 3,140 2,299 GMAP 3,933 1,694 (539) - 3,394 1,694 ------ ------ --- -- ------ ------ Total GMA 43,695 37,328 (539) - 43,156 37,328 Other(2) (305) (25) - - (305) (25) ------ ------ --- -- ------ ------ Total Auto & Other 43,390 37,303 (539) - 42,851 37,303 ------ ------ --- -- ------ ------ GMAC 8,822 8,221 - - 8,822 8,221 Other Financing(2) 33 249 - - 33 249 ----- ----- -- -- ----- ----- Total FIO 8,855 8,470 - - 8,855 8,470 ------ ------ --- -- ------ ------ Total net sales and revenues $52,245 $45,773 $(539) $ - $51,706 $45,773 ====== ====== === == ====== ====== Income (loss) before income taxes, equity income and minority interests GMNA $(1,364) $(2,212) $64 $357 $(1,300) $(1,855) GME 75 (860) 63 671 138 (189) GMLAAM 80 55 27 - 107 55 GMAP 579 (23) (575) - 4 (23) --- ----- --- ----- ----- ----- Total GMA (630) (3,040) (421) 1,028 (1,051) (2,012) Other (827) (412) 4 13 (823) (399) --- ----- --- ----- ----- ----- Total Auto & Other (1,457) (3,452) (417) 1,041 (1,874) (2,411) ----- ----- --- ----- ----- ----- GMAC 924 1,160 - - 924 1,160 Other Financing 2 (2) - - 2 (2) --- ----- -- -- --- ----- Total FIO 926 1,158 - - 926 1,158 --- ----- --- ----- --- ----- Total income (loss) before income taxes, equity income and minority interests $(531) $(2,294) $(417) $1,041 $(948) $(1,253) === ===== === ===== === ===== See footnotes. General Motors Corporation Summary Corporate Financial Results (Unaudited) First Quarter 2006 and 2005 ------------- (Dollars in millions) Reported Special Items Adjusted -------- ------------- -------- 2006 2005 2006 2005 2006 2005 ---- ---- ---- ---- ---- ---- Net income (loss) GMNA(1) $(987) $(1,737) $41 $224 $(946) $(1,513) GME(1) 48 (514) 40 422 88 (92) GMLAAM 29 31 27 - 56 31 GMAP 398 70 (317) - 81 70 --- ----- --- --- --- ----- Total GMA (512) (2,150) (209) 646 (721) (1,504) Other (417) 168 3 (381) (414) (213) --- ----- --- --- ----- ----- Total Auto & Other (929) (1,982) (206) 265 (1,135) (1,717) --- ----- --- --- ----- ----- GMAC 605 728 - - 605 728 Other Financing 1 1 - - 1 1 --- --- -- -- --- --- Total FIO 606 729 - - 606 729 --- ----- --- --- --- --- Net income (loss) $(323) $(1,253) $(206) $265 $(529) $(988) === ===== === === === === Income tax expense (benefit) GMNA $(379) $(506) $23 $133 $(356) $(373) GME 29 (333) 23 249 52 (84) GMLAAM 50 25 - - 50 25 GMAP 237 (10) (258) - (21) (10) --- --- --- --- --- --- Total GMA (63) (824) (212) 382 (275) (442) Other (409) (574) 1 394 (408) (180) --- ----- --- --- --- --- Total Auto & Other (472) (1,398) (211) 776 (683) (622) --- ----- --- --- --- --- GMAC 330 429 - - 330 429 Other Financing 1 (3) - - 1 (3) --- --- -- -- --- --- Total FIO 331 426 - - 331 426 --- --- --- --- --- --- Income tax expense (benefit) $(141) $(972) $(211) $776 $(352) $(196) === === === === === === See footnotes. General Motors Corporation Summary Corporate Financial Results (Unaudited) First Quarter 2006 and 2005 -------------- (Dollars in millions) Reported Special Items Adjusted -------- ------------- -------- 2006 2005 2006 2005 2006 2005 ---- ---- ---- ---- ---- ---- Effective tax rate Total GM Corp. 27% 42% 51% 75% 37% 16% GMNA 28% 23% 36% 37% 27% 20% GME 39% 39% 37% 37% 38% 44% GMAC 36% 37% - - 36% 37% Equity income (loss) and minority interests GMNA $(2) $(31) $ - $ - $(2) $(31) GME 2 13 - - 2 13 GMLAAM (1) 1 - - (1) 1 GMAP 56 83 - - 56 83 -- -- -- -- -- -- Total GMA $55 $66 $ - $ - $55 $66 == == == == == == General Motors Corporation Operating Statistics First Quarter ---------------- 2006 2005 ---- ---- (Units in thousands) Worldwide Production Volume GMNA - Cars 496 470 GMNA - Trucks 759 712 ----- ----- Total GMNA 1,255 1,182 GME 494 502 GMLAAM 194 185 GMAP 468 335 ----- ----- Total Worldwide 2,411 2,204 ===== ===== Vehicle Unit Deliveries Chevrolet - Cars 195 218 Chevrolet - Trucks 376 397 Pontiac 99 100 GMC 105 123 Buick 62 61 Oldsmobile - 1 Saturn 47 48 Cadillac 51 50 Other 28 17 ----- ----- Total United States 963 1,015 Canada, Mexico, and Other 163 167 ----- ----- Total GMNA 1,126 1,182 GME 522 514 GMLAAM 230 183 GMAP 323 231 ----- ----- Total Worldwide 2,201 2,110 ===== ===== Market Share United States - Cars 20.7% 23.3% United States - Trucks 26.4% 27.1% Total United States 23.8% 25.4% Total North America 23.7% 25.2% Total Europe 9.5% 9.7% Total LAAM 16.9% 15.4% Asia Pacific 6.4% 5.0% Total Worldwide 13.2% 13.3% U.S. Retail/Fleet Mix % Fleet Sales - Cars 41.6% 39.5% % Fleet Sales - Trucks 22.4% 18.1% Total Vehicles 30.0% 26.9% GMNA Capacity Utilization (2 shift rated) 98.8% 87.6% General Motors Corporation Operating Statistics First Quarter ---------------- 2006 2005 ---- ---- GMAC's Worldwide Cost of Borrowing (3) 5.41% 4.30% GMAC Period End Debt Spreads Over U.S. Treasuries 2 Year 445 bp 350 bp 5 Year 449 bp 465 bp 10 Year 474 bp 460 bp GMAC Cash Reserve Balance ($Bil's)(4) $22.1 $18.5 GMAC Automotive Finance Operations Consumer Credit (North America) Net charge-offs as a % of managed receivables 1.14% 0.96% Retail contracts 30 days delinquent - % of average number of contracts outstanding (5) 2.34% 2.09% Share of GM retail sales (U.S. only) Total consumer volume (retail and lease) as % of retail sales 45% 54% SmartLease as % of retail sales 22% 17% Off-lease vehicle remarketing (U.S. only) Sales proceeds on scheduled lease terminations (36-month) per vehicle $13,579 $13,724 Off-lease vehicles terminated (units in 000s) 69 72 ResCap Originations ($ Bil's) $41.6 $36.4 Mortgage servicing rights, net ($Bil's) $4.5 $3.7 GMAC Insurance Operations ($Mil's) Combined ratio (6) 91.3% 93.8% Premiums/revenue written $1,101 $1,118 Investment portfolio market value $7,900 $7,322 After-tax net unrealized capital gains $622 $463 Worldwide Employment at March 31 (in 000's) United States Hourly 102 109 United States Salary 36 39 --- --- Total United States 138 148 Canada, Mexico, and Other 31 31 --- --- GMNA 169 179 GME (7) 64 58 GMLAAM 31 30 GMAP (8) 32 15 GMAC 31 34 Other 2 5 --- --- Total 329 321 === === Worldwide Payrolls ($Bil's) $5.3 $5.3 See footnotes. General Motors Corporation Footnotes: --------- (1) Effective January 1, 2006, four powertrain entities were transferred from GMNA to GME for management reporting. Accordingly, first quarter 2005 amounts have been revised for comparability by reclassifying $151 million of revenue and $33 million of net income from GMNA to GME. (2) Other Operations and Other Financing include intercompany eliminations. (3) Calculated by dividing total interest expense (excluding mark to market adjustments) by total debt. (4) Balance at March 31, 2006 comprises $17.3 billion of cash and cash equivalents and $4.8 billion in marketable securities with maturities greater than 90 days. Balance at March 31, 2005 comprises $16.1 billion of cash and cash equivalents and $2.4 billion in marketable securities with maturities greater than 90 days. (5) Excludes accounts in bankruptcy. (6) Calculated as the sum of all reported losses and expenses (excluding interest and income tax expense) divided by the total of premiums and service revenues earned and other income. (7) Approximately 7,000 employees were added in the fourth quarter of 2005 from a former powertrain joint venture with Fiat. (8) Approximately 13,000 employees were added as a result of the GM Daewoo consolidation in the third quarter of 2005. GENERAL MOTORS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Months Ended March 31, ------------------ 2006 2005 -------- -------- (dollars in millions except per share amounts) Total net sales and revenues $52,245 $45,773 ------ ------- Cost of sales and other expenses 43,013 39,499 Selling, general, and administrative expenses 5,534 4,889 Interest expense 4,229 3,679 ------ ------ Total costs and expenses 52,776 48,067 ------ ------ Income (loss) before income taxes, equity income and minority interests (531) (2,294) Income tax expense (benefit) (141) (972) Equity income (loss) and minority interests 67 69 ------ ------ Net income (loss) $ (323) $(1,253) ====== ====== Basic earnings (loss) per share attributable to common stock $ (0.57) $ (2.22) ====== ====== Earnings (loss) per share attributable to common stock assuming dilution $ (0.57) $ (2.22) ====== ====== GENERAL MOTORS CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION TO THE CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Months Ended March 31, ------------------ 2006 2005 -------- -------- (dollars in millions) AUTOMOTIVE AND OTHER OPERATIONS Total net sales and revenues $43,390 $37,303 ------- ------- Cost of sales and other expenses 40,615 37,146 Selling, general, and administrative expenses 3,402 2,837 ------- ------- Total costs and expenses 44,017 39,983 Interest expense 684 685 Net expense from transactions with Financing and Insurance Operations 146 87 ------- ------- Income (loss) before income taxes, equity income, and minority interests (1,457) (3,452) Income tax (benefit) (472) (1,398) Equity income (loss) and minority interests 56 72 ------- ------- Net income (loss) -- Automotive and Other Operations $ (929) $(1,982) ======= ======= FINANCING AND INSURANCE OPERATIONS Total revenues $ 8,855 $ 8,470 ------- ------- Interest expense 3,545 2,994 Depreciation and amortization expense 1,511 1,398 Operating and other expenses 2,287 2,089 Provisions for financing and insurance losses 732 918 ------- ------- Total costs and expenses 8,075 7,399 Net income from transactions with Automotive and Other Operations (146) (87) ------- ------- Income before income taxes, equity income, and minority interests 926 1,158 Income tax expense 331 426 Equity income (loss) and minority interests 11 (3) ------- ------- Net income -- Financing and Insurance Operations $ 606 $ 729 ====== ====== GENERAL MOTORS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) Mar. 31, Dec. 31, Mar. 31, 2006 2005 2005 -------- -------- -------- (dollars in millions) ASSETS Cash and cash equivalents $34,868 $ 30,726 $26,389 Marketable securities 19,839 19,726 26,256 ------- -------- ------- Total cash and marketable securities 54,707 50,452 52,645 Finance receivables -- net 180,161 180,793 190,646 Loans held for sale 18,171 21,865 22,569 Accounts and notes receivable (less allowances) 16,801 15,578 18,001 Inventories (less allowances) 15,519 14,354 13,189 Assets held for sale - 19,030 - Deferred income taxes 29,495 29,889 26,967 Net equipment on operating leases -- (less accumulated depreciation) 39,787 38,187 34,371 Equity in net assets of nonconsolidated affiliates 1,830 3,291 6,500 Property -- net 40,235 40,214 38,106 Intangible assets -- net 4,458 4,339 4,864 Other assets 62,835 58,086 60,239 ------- ------- ------- Total assets $463,999 $476,078 $468,097 ======= ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable (principally trade) $30,210 $ 29,913 $28,519 Notes and loans payable 277,007 285,750 291,831 Liabilities related to assets held for sale - 10,941 - Postretirement benefits other than pensions 36,445 33,997 28,462 Pensions 11,723 11,304 9,295 Deferred income taxes 5,275 4,477 6,709 Accrued expenses and other liabilities 87,544 84,060 77,774 ------- -------- ------- Total liabilities 448,204 460,442 442,590 Minority interests 1,075 1,039 416 Stockholders' equity $1-2/3 par value common stock (outstanding, 565,559,329; 565,518,106; and 565,470,511 shares) 943 943 942 Capital surplus (principally additional paid-in capital) 15,296 15,285 15,234 Retained earnings 1,884 2,361 12,526 ------- -------- ------- Subtotal 18,123 18,589 28,702 Accumulated foreign currency translation adjustments (1,639) (1,722) (1,784) Net unrealized gains (losses) on derivatives 1,109 733 612 Net unrealized gains on securities 956 786 535 Minimum pension liability adjustment (3,829) (3,789) (2,974) ------- -------- ------- Accumulated other comprehensive loss (3,403) (3,992) (3,611) ------- -------- ------- Total stockholders' equity 14,720 14,597 25,091 ------- -------- ------- Total liabilities and stockholders' equity $463,999 $476,078 $468,097 ======= ======= ======= GENERAL MOTORS CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION TO THE CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) Mar. 31, Dec. 31, Mar. 31, 2006 2005 2005 -------- -------- -------- (dollars in millions) ASSETS Automotive and Other Operations Cash and cash equivalents $17,427 $15,187 $10,205 Marketable securities 1,396 1,416 5,447 ------- ------- ------- Total cash and marketable securities 18,823 16,603 15,652 Accounts and notes receivable (less allowances) 9,440 7,758 6,493 Inventories (less allowances) 14,862 13,851 12,736 Net equipment on operating leases -- (less accumulated depreciation) 7,217 6,993 6,329 Deferred income taxes and other current assets 10,032 8,877 10,975 ------- ------- ------- Total current assets 60,374 54,082 52,185 Equity in net assets of nonconsolidated affiliates 1,830 3,291 6,500 Property -- net 38,457 38,466 36,265 Intangible assets -- net 1,851 1,862 1,550 Deferred income taxes 21,401 22,849 18,093 Other assets 41,724 41,103 40,405 ------- ------- ------- Total Automotive and Other Operations assets 165,637 161,653 154,998 Financing and Insurance Operations Cash and cash equivalents 17,441 15,539 16,184 Investments in securities 18,443 18,310 20,809 Finance receivables -- net 180,161 180,793 190,646 Loans held for sale 18,171 21,865 22,569 Assets held for sale - 19,030 - Net equipment on operating leases (less accumulated depreciation) 32,570 31,194 28,042 Other assets 31,576 27,694 34,849 Net receivable from Automotive and Other Operations 4,609 4,452 2,300 ------- ------- ------- Total Financing and Insurance Operations assets 302,971 318,877 315,399 ------- ------- ------- Total assets $468,608 $480,530 $470,397 ======= ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY Automotive and Other Operations Accounts payable (principally trade) $26,614 $26,182 $24,168 Loans payable 1,207 1,519 2,446 Accrued expenses 44,350 42,665 44,544 Net payable to Financing and Insurance Operations 4,609 4,452 2,300 ------- ------- ------- Total current liabilities 76,780 74,818 73,458 Long-term debt 31,021 31,014 29,879 Postretirement benefits other than pensions 31,431 28,990 23,754 Pensions 11,568 11,214 9,204 Other liabilities and deferred income taxes 21,714 22,023 15,924 ------- ------- ------- Total Automotive and Other Operations liabilities 172,514 168,059 152,219 Financing and Insurance Operations Accounts payable 3,596 3,731 4,351 Liabilities related to assets held for sale - 10,941 - Debt 244,779 253,217 259,506 Other liabilities and deferred income taxes 31,924 28,946 28,814 ------- ------- ------- Total Financing and Insurance Operations liabilities 280,299 296,835 292,671 ------- ------- ------- Total liabilities 452,813 464,894 444,890 Minority interests 1,075 1,039 416 Total stockholders' equity 14,720 14,597 25,091 ------- ------- ------- Total liabilities and stockholders' equity $468,608 $480,530 $470,397 ======= ======= ======= SOURCE General Motors Corporation -0- 04/20/2006 P NOTE TO EDITORS: For additional media information visit http://media.gm.com . CONTACT: Toni Simonetti, +1-212-418-6380, Mobile: +1-917-822-3392, or Jerry Dubrowski, +1-212-418-6261, Mobile: +1-917-544-4885, both of General Motors Corporation Web site: http://media.gm.com http://www.gm.com (GM)

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