GM Revises Reported Second Quarter Financial Re...
GM Revises Reported Second Quarter Financial Results
DETROIT, Aug. 2 / -- General Motors Corporation (NYSE: GM) today said that it
is revising its previously reported results for the second quarter of 2006
because of a change in the estimated tax provision relating to an expected loss
on the pending sale of 51 percent interest in GMAC. Its previously announced
adjusted earnings are not affected by this change.
GM also said today that it and GMAC are working with the purchasers of 51
percent of GMAC equity to try to avoid any delay in closing the GMAC
transaction because of a recent moratorium by federal regulators on approval of
certain bank transactions.
On July 26, 2006, GM reported a net loss of $3.2 billion or $5.62 per share,
and adjusted earnings, excluding special items, of $1.2 billion or $2.03 per
share, a significant improvement from the year-ago adjusted loss of $231
million or $0.41 per share.
GM's reported net loss for the quarter has been increased by $200 million, or
$0.35 per share, to $3.4 billion or $5.97 per share. The increase in the
reported net loss is attributable to the estimated tax provision related to the
loss from the announced sale of 51 percent of GM's interest in GMAC to a
consortium of investors. The previously estimated after-tax charge of $490
million has been increased to $690 million as the tax provision from the GMAC
transaction was adjusted to reflect differences in book value and tax basis at
several GMAC subsidiaries.
The tax increase does not result in a current cash expense to either GM or
GMAC. General Motors may adjust the estimated loss on sale from the GMAC
transaction each quarter until closing due to potential changes in the other
comprehensive income adjustment, such as mark-to-market valuation, as well as
other factors.
Separately, on July 28, 2006, the Federal Deposit Insurance Corporation (FDIC)
announced a six-month moratorium on the acceptance of, or final decisions on,
notices filed under the Change in Bank Control Act with regard to industrial
loan companies (ILC). In connection with the GMAC transaction, the consortium
and its members have submitted such notices with respect to GMAC's ILC, GMAC
Automotive Bank. GM and GMAC are currently evaluating the effect of the FDIC's
action on these pending notices, but it appears that the timing of any approval
of the notices is likely to be affected by the moratorium. Since FDIC approval
of the Change in Bank Control Act notices with regard to GMAC Automotive Bank
is a condition to closing the GMAC Transaction, GM and GMAC are now working
with the consortium to consider ways to try to avoid delaying the targeted
closing date until 2007.
SOURCE General Motors Corporation
-0- 08/02/2006 P
/NOTE TO EDITORS: For additional media information visit http://media.gm.com ./
/CONTACT: Toni Simonetti of General Motors Corporation, +1-212-418-6380/
/Web site: http://media.gm.com
http://www.gm.com /
(GM)
Latest directors dealings
- 47 seconds ago Imperial Brands
- 3 minutes ago Unilever
- 22 minutes ago Morgan Sindall Group
- 32 minutes ago Taylor Wimpey
- 34 minutes ago HSBC Holdings