Document




UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549-1004
___________________

FORM 8-K
___________________

CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) October 31, 2018
___________________
GENERAL MOTORS COMPANY
(Exact name of registrant as specified in its charter)
___________________
DELAWARE
(State or other jurisdiction of
incorporation)
001-34960
(Commission File Number)
27-0756180
(I.R.S. Employer
Identification No.)

300 Renaissance Center, Detroit, Michigan
(Address of principal executive offices)

48265-3000
(Zip Code)

(313) 667-1500
(Registrant's telephone number, including area code)

Not Applicable
(Former name or former address, if changed since last report)
__________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
 
 
¨
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
 
¨
 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17-CFR 240.14a-12)
 
 
 
¨
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 
 
¨
 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company  ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐







ITEM 2.02 Results of Operations and Financial Condition

On October 31, 2018 General Motors Company (GM) issued a news release and supplemental materials on the subject of its 2018 third quarter earnings. The news release and supplemental materials are attached as Exhibit 99.1 and Exhibit 99.2.

Charts furnished to securities analysts in connection with GM's 2018 third quarter earnings release are available on GM's website at www.gm.com/investors/earnings-releases.html.

ITEM 9.01 Financial Statements and Exhibits

EXHIBIT

Exhibit
Description
 
 
Exhibit 99.1
Exhibit 99.2







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 COMPANY (Registrant)


 
By:
/s/ CHRISTOPHER T. HATTO
Date: October 31, 2018
 
Christopher T. Hatto, Vice President, Controller and Chief Accounting Officer




q32018earnings103118
Exhibit 99.1 THIRD-QUARTER 2018 EARNINGS GM Reports Income of $2.5 Billion and EBIT-adjusted of $3.2 Billion • Strong EPS diluted of $1.75; record third-quarter EPS diluted-adjusted of $1.87. • Strong results in North America driven by all-new full-size trucks, and crossovers. • Third-quarter records for GM China equity income and GM Financial EBT; record quarter for GM Financial revenue. Q3 2018 RESULTS OVERVIEW Net Revenue Income Auto Operating Cash Flow EPS Diluted GAAP $35.8 B $2.5 B $2.5 B $1.75 vs. Q3 2017 + 6.4% + 2,123% + $1.3 B + 2,088% EBIT-adj. Margin EBIT-adj. Adj. Auto FCF EPS Diluted-adj. Non-GAAP 8.8% $3.2 B $0.4 B $1.87 vs. Q3 2017 + 1.3 pts + 25.0% + $1.3 B + 41.7% Our third-quarter performance demonstrates our determination to manage risks and deliver strong business results while continuing to advance the future of mobility.”  – Mary Barra, Chairman and CEO NORTH“ AMERICA HIGHLIGHTS GM North America posted strong margins of 10.2 percent in the third quarter, driven by an increase in average transaction prices that rose to record Q3 highs. The frst light-duty 2019 Chevrolet Silverados and GMC Sierras began arriving in dealerships in August. Customer deliveries of the Silverado LTZ and High Country and the GMC Sierra SLT, Denali and AT4 crew- cab models have exceeded expectations as production ramps up to meet expected demand. GM expects to 2019 GMC Sierra Denali ship about 120,000 of the new trucks in the second half GM FINANCIAL GROWTH of 2018. Production of the all-new Chevrolet Blazer will GM Financial delivered an all-time record for revenue begin late in the fourth quarter. and third-quarter record EBT of $0.5 billion, resulting from portfolio growth and stable credit. HONDA JOINS GM CRUISE In October, GM announced that Honda will join Cruise CHINA PERFORMANCE and GM to build a new autonomous vehicle. The Despite challenging market conditions, GM China purpose-built AV will serve a wide variety of use cases achieved record third-quarter equity income, driven by and be manufactured at high volume for global a strong mix of vehicles in popular segments, led by deployment. record Cadillac sales and strong Chevrolet deliveries. GM China is introducing 10 new or refreshed models in In addition to its $750 million equity investment in the second half of 2018. Cruise, Honda committed another $2 billion to Cruise, including development costs for the purpose-built AV. The Baojun E200 launched in September. Along with With this transaction, Cruise has now attracted $5 the Buick VELITE 6 unveiled earlier this year, these are billion in external capital and is valued at $14.6 billion. the frst in a wave of electric vehicles launching in China in the next several years.


 
“ SEGMENT RESULTS (EBIT-ADJUSTED - $B) North America International GM Cruise GM Financial (EBT) Q3 18 Q3 17 Q3 18 Q3 17 Q3 18 Q3 17 Q3 18 Q3 17 2.8 2.1 0.1 0.4 (0.2) (0.2) 0.5 0.3 EBIT-adj. margin of 10.2% Results include record Q3 Based on the current rate of Continued strong EBT and due to all-new full-size China equity income of iteration, Cruise continues revenue growth; GMF to pay trucks, continued crossover $0.5 billion, ofset by to target commercialization a d i v i d e n d t o G M performance and overall continued weakness of in 2019 in a dense urban commencing in the fourth favorable pricing. South American currencies. environment. quarter. Our disciplined approach to the U.S. market, combined with strength in China and further growth of GM Financial, drove a very strong quarter. We will continue to take actions to mitigate headwinds including foreign currency volatility and commodity costs.” “ – Dhivya Suryadevara, Chief Financial Ofcer Q3 VEHICLE SALES CADILLAC GAINING MOMENTUM GM delivered nearly 700,000 vehicles in the U.S. in the Cadillac’s frst-ever XT4 compact luxury SUV began third quarter. Average transaction prices rose to a arriving in showrooms in the U.S., Canada and China in third-quarter record of more than $36,000, up about the third quarter. Cadillac will introduce a new model $800 per unit year over year and $4,000 above every six months through 2020, continuing next with industry average. the three-row XT6. Sales of the Chevrolet Tahoe, Suburban and GMC Super Cruise received the top spot in Consumer Yukon full-size SUVs were up approximately 12 percent Reports’ ranking of partially automated driving year over year. The Chevrolet Colorado and GMC systems. Earlier this year, Cadillac announced Super Canyon posted the best third-quarter midsize pickup Cruise technology will become available on every sales since 2004. model starting in 2020. GM China delivered nearly 836,000 vehicles in the third quarter. Chevrolet gained momentum as year- to-date sales were up 10 percent, led by higher- content crossovers including the Equinox, which saw 29 percent growth compared to a year ago. Cadillac sales in China set a third-quarter record, up 4 percent year over year and up 20 percent year to date. The brand is capitalizing on the country's luxury trend, and sales are expected to grow for the full year. For details on GM’s global sales, click here. 2019 Cadillac XT4 PROGRESS IN ELECTRIC VEHICLES As previously announced, GM is increasing production LIQUIDITY ($B) (excludes GM Financial) of the Bolt EV in the fourth quarter by 20 percent to meet growing demand. Q3 18 Q4 17 Cash and Current Marketable Securities GM has partnered with Delta Electronics to develop (includes GM Cruise) 19.8 19.6 faster EV charging technology. GM will deliver a prototype vehicle capable of a 180-mile range with Total Liquidity 33.9 33.6 less than 10 minutes of charging.


 
MEDIA CONTACT INVESTOR CONTACT Tom Henderson Michael Heifler GM Finance Communications GM Investor Relations Media Investors 313-410-2704 313-418-0220 tom.e.henderson@gm.com michael.heifler@gm.com General Motors (NYSE:GM) is committed to delivering safer, better and more sustainable ways for people to get around. General Motors, its subsidiaries and its joint venture entities sell vehicles under the Cadillac, Chevrolet, Baojun, Buick, GMC, Holden, Jiefang and Wuling brands. More information on the company and its subsidiaries, including OnStar, a global leader in vehicle safety and security services, Maven, its personal mobility brand, and Cruise, its autonomous vehicle ridesharing company, can be found at gm.com. Cautionary Note on Forward-Looking Statements. This presentation and related comments by management may include forward-looking statements. These statements are based on current expectations about possible future events and thus are inherently uncertain. Our actual results may difer materially from forward-looking statements due to a variety of factors, including: (1) our ability to deliver new products, services and experiences that attract new, and are desired by existing, customers and to efectively compete in autonomous, ride-sharing and transportation as a service; (2) sales of crossovers, SUVs and full-size pickup trucks; (3) our ability to reduce the costs associated with the manufacture and sale of electric vehicles; (4) the volatility of global sales and operations; (5) our signifcant business in China which subjects us to unique operational, competitive and regulatory risks; (6) our joint ventures, which we cannot operate solely for our beneft and over which we may have limited control; (7) changes in government leadership and laws (including tax laws and regulations), economic tensions between governments and changes in international trade policies, new barriers to entry and changes to or withdrawals from free trade agreements, changes in foreign exchange rates, economic downturns in foreign countries, difering local product preferences and product requirements, compliance with U.S. and foreign countries' export controls and economic sanctions, difering labor laws and regulations and difculties in obtaining fnancing in foreign countries; (8) our dependence on our manufacturing facilities; (9) the ability of suppliers to deliver parts, systems and components without disruption and on schedule; (10) prices of raw materials; (11) our highly competitive industry; (12) the possibility that competitors may independently develop products and services similar to ours despite our intellectual property rights; (13) security breaches and other disruptions to our vehicles, information technology networks and systems; (14) compliance with laws and regulations applicable to our industry, including those regarding fuel economy and emissions; (15) costs and risks associated with litigation and government investigations; (16) the cost and efect on our reputation of product safety recalls and alleged defects in products and services; (17) our ability to successfully and cost-efciently restructure operations in various countries, including Korea, with minimal disruption to our supply chain and operations, globally; (18) our ability to realize production efciencies and to achieve reductions in costs; (19) our ability to develop captive fnancing capability through GM Financial; and (20) signifcant increases in pension expense or projected pension contributions. A further list and description of these risks, uncertainties and other factors can be found in our Annual Report on Form 10-K for the fscal year ended December 31, 2017, and our subsequent flings with the U.S. Securities and Exchange Commission. GM cautions readers not to place undue reliance on forward-looking statements. GM undertakes no obligation to update publicly or otherwise revise any forward-looking statements. Basis of Presentation The fnancial and operational information included in this press release relate to our continuing operations and not our discontinued operations, which consist of the Opel and Vauxhall businesses and certain other assets in Europe and the European fnancing subsidiaries and branches that were sold in 2017.


 
Exhibit
Exhibit 99.2

General Motors Company and Subsidiaries
Supplemental Material
(Unaudited)

Unless otherwise indicated, General Motors Company's (GM) non-GAAP measures are related to our continuing operations and not our discontinued operations. GM's non-GAAP measures include earnings before interest and taxes (EBIT)-adjusted, presented net of noncontrolling interests, Core EBIT-adjusted, earnings per share (EPS)-diluted-adjusted, effective tax rate-adjusted (ETR-adjusted), return on invested capital-adjusted (ROIC-adjusted) and adjusted automotive free cash flow. GM's calculation of these non-GAAP measures may not be comparable to similarly titled measures of other companies due to potential differences between companies in the method of calculation. As a result, the use of these non-GAAP measures has limitations and should not be considered superior to, in isolation from, or as a substitute for, related U.S. GAAP measures.

These non-GAAP measures allow management and investors to view operating trends, perform analytical comparisons and benchmark performance between periods and among geographic regions to understand operating performance without regard to items we do not consider a component of our core operating performance. Furthermore, these non-GAAP measures allow investors the opportunity to measure and monitor our performance against our externally communicated targets and evaluate the investment decisions being made by management to improve ROIC-adjusted. Management uses these measures in its financial, investment and operational decision-making processes, for internal reporting and as part of its forecasting and budgeting processes. Further, our Board of Directors uses certain of these and other measures as key metrics to determine management performance under our performance-based compensation plans. For these reasons we believe these non-GAAP measures are useful for our investors.

EBIT-adjusted EBIT-adjusted is presented net of noncontrolling interests and is used by management and can be used by investors to review our consolidated operating results because it excludes automotive interest income, automotive interest expense and income taxes as well as certain additional adjustments that are not considered part of our core operations. Examples of adjustments to EBIT include but are not limited to impairment charges on long-lived assets and other exit costs resulting from strategic shifts in our operations or discrete market and business conditions and costs arising from the ignition switch recall and related legal matters. For EBIT-adjusted and our other non-GAAP measures, once we have made an adjustment in the current period for an item, we will also adjust the related non-GAAP measure in any future periods in which there is a significant impact from the item.

Core EBIT-adjusted Core EBIT-adjusted is used by management and can be used by investors to review our core consolidated operating results. Core EBIT-adjusted begins with EBIT-adjusted and excludes the EBIT-adjusted results of GM Cruise. Prior to the three months ended June 30, 2018, Core EBIT-adjusted excluded the EBIT-adjusted results of autonomous vehicle operations, including GM Cruise, Maven and our investment in Lyft. The measure was changed to align with segment reporting. All periods presented have been recast to reflect the changes.

EPS-diluted-adjusted EPS-diluted-adjusted is used by management and can be used by investors to review our consolidated diluted EPS results on a consistent basis. EPS-diluted-adjusted is calculated as net income attributable to common stockholders-diluted less income (loss) from discontinued operations on an after-tax basis, adjustments noted above for EBIT-adjusted and certain income tax adjustments divided by weighted-average common shares outstanding-diluted. Examples of income tax adjustments include the establishment or reversal of significant deferred tax asset valuation allowances.

ETR-adjusted ETR-adjusted is used by management and can be used by investors to review the consolidated effective tax rate for our core operations on a consistent basis. ETR-adjusted is calculated as Income tax expense less the income tax related to the adjustments noted above for EBIT-adjusted and the income tax adjustments noted above for EPS-diluted-adjusted divided by Income before income taxes less adjustments.

ROIC-adjusted ROIC-adjusted is used by management and can be used by investors to review our investment and capital allocation decisions. We define ROIC-adjusted as EBIT-adjusted for the trailing four quarters divided by ROIC-adjusted average net assets, which is considered to be the average equity balances adjusted for average automotive debt and interest liabilities, exclusive of capital leases; average net pension and OPEB liabilities; and average automotive and other net income tax assets during the same period. Adjustments to the average equity balances exclude assets and liabilities classified as either assets held for sale or liabilities held for sale.

Adjusted automotive free cash flow Adjusted automotive free cash flow is used by management and can be used by investors to review the liquidity of our automotive operations and to measure and monitor our performance against our capital allocation program and evaluate our automotive liquidity against the substantial cash requirements of our automotive operations. We measure adjusted automotive free cash flow as automotive operating cash flow from continuing operations less capital expenditures adjusted for management actions. Management actions can include voluntary events such as discretionary contributions to employee benefit plans or nonrecurring specific events such as a plant closure that are considered special for EBIT-adjusted purposes.


     1




General Motors Company and Subsidiaries
Supplemental Material
(Unaudited)

The following table reconciles segment profit (loss) to Net income (loss) attributable to stockholders under U.S. GAAP (dollars in millions):
 
Three Months Ended
 
Nine Months Ended
 
September 30, 2018
 
September 30, 2017
 
September 30, 2018
 
September 30, 2017
Operating segments
 
 
 
 
 
 
 
GM North America (GMNA)
$
2,825

 
$
2,068


$
7,728


$
9,014

GM International (GMI)
139

 
389


471


884

GM Cruise
(214
)

(165
)

(534
)

(455
)
General Motors Financial Company, Inc. (GM Financial)(a)
498

 
310


1,477


895

Total operating segments
3,248

 
2,602


9,142


10,338

Corporate and eliminations(b)
(95
)
 
(79
)

(187
)

(579
)
EBIT-adjusted
3,153

 
2,523


8,955

 
9,759

Adjustments
 
 


 
 
 
GMI restructuring(c)

 


(1,138
)

(540
)
Ignition switch recall and related legal matters(d)
(440
)
 


(440
)

(114
)
Total adjustments
(440
)
 


(1,578
)

(654
)
Automotive interest income
82

 
59


218


184

Automotive interest expense
(161
)
 
(151
)

(470
)

(430
)
Income tax expense(e)
(100
)
 
(2,316
)

(1,085
)

(3,637
)
Income from continuing operations(f)
2,534

 
115


6,040


5,222

Loss from discontinued operations, net of tax(g)

 
3,096


70


3,935

Net income (loss) attributable to stockholders
$
2,534


$
(2,981
)

$
5,970


$
1,287

__________
(a)
GM Financial amounts represent earnings before income taxes-adjusted.
(b)
GM's automotive operations' interest income and interest expense, Maven, legacy costs from the Opel and Vauxhall businesses and certain other assets in Europe (the Opel/Vauxhall Business), which are primarily pension costs, corporate expenditures and certain nonsegment specific revenues and expenses are recorded centrally in Corporate.
(c)
These adjustments were excluded because of a strategic decision to rationalize our core operations by exiting or significantly reducing our presence in various international markets to focus resources on opportunities expected to deliver higher returns. The adjustments in the nine months ended September 30, 2018 primarily consist of non-cash asset impairments, employee separation and other charges related to restructuring in Korea. The adjustment in the nine months ended September 30, 2017 primarily consists of asset impairments and other restructuring actions in India, South Africa and Venezuela.
(d)
These adjustments were excluded because of the unique events associated with the ignition switch recall. These events included various investigations, inquiries, and complaints from constituents.
(e)
Income tax expense includes an adjustment of $157 million in tax benefit in the three and nine months ended September 30, 2018 related to U.S. tax reform and $1.8 billion in the three and nine months ended September 30, 2017 related to the establishment of a valuation allowance on deferred tax assets that will no longer be realizable as a result of the sale of the Opel/Vauxhall Business, partially offset by tax benefits related to tax settlements.
(f)
Net of Net (income) loss attributable to noncontrolling interests.
(g)
Represents the results of the Opel/Vauxhall Business and our European financing subsidiaries and branches (the Fincos, and together with the Opel/Vauxhall Business, the European Business).



     2




General Motors Company and Subsidiaries
Supplemental Material
(Unaudited)

The following table reconciles Net income (loss) attributable to stockholders under U.S. GAAP to EBIT-adjusted (dollars in millions):
 
Three Months Ended
 
September 30,
 
June 30,
 
March 31,
 
December 31,
 
2018

2017

2018

2017

2018

2017

2017

2016
Net income (loss) attributable to stockholders
$
2,534


$
(2,981
)

$
2,390


$
1,660


$
1,046


$
2,608


$
(5,151
)

$
1,835

Loss from discontinued operations, net of tax


3,096




770


70


69


277


120

Income tax expense
100


2,316


519


534


466


787


7,896


303

Automotive interest expense
161


151


159


132


150


147


145


150

Automotive interest income
(82
)

(59
)

(72
)

(68
)

(64
)

(57
)

(82
)

(45
)
Adjustments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GMI restructuring(a)




196


540


942







Ignition switch recall and related legal matters(a)
440






114








235

Total adjustments
440

 

 
196

 
654

 
942

 

 

 
235

EBIT-adjusted
$
3,153

 
$
2,523

 
$
3,192

 
$
3,682

 
$
2,610

 
$
3,554

 
$
3,085

 
$
2,598

________
(a)
Refer to the reconciliation of segment profit (loss) to Net income (loss) attributable to stockholders under U.S. GAAP within the previous section for the details of the adjustments.


The following table reconciles EBIT-adjusted to Core EBIT-adjusted:
 
Three Months Ended
 
Nine Months Ended
 
September 30, 2018
 
September 30, 2017
 
September 30, 2018
 
September 30, 2017
EBIT-adjusted(a)
$
3,153

 
$
2,523

 
$
8,955

 
$
9,759

EBIT loss-adjusted – GM Cruise
214

 
165

 
534

 
455

Core EBIT-adjusted
$
3,367

 
$
2,688

 
$
9,489

 
$
10,214

________
(a)
Refer to the reconciliation of Net income (loss) attributable to stockholders under U.S. GAAP to EBIT-adjusted.


















     3




General Motors Company and Subsidiaries
Supplemental Material
(Unaudited)

The following table reconciles diluted earnings (loss) per common share under U.S. GAAP to EPS-diluted-adjusted (dollars in millions):
 
Three Months Ended

Nine Months Ended
 
September 30, 2018

September 30, 2017

September 30, 2018

September 30, 2017
 
Amount

Per Share

Amount

Per Share

Amount
 
Per Share
 
Amount
 
Per Share
Diluted earnings (loss) per common share
$
2,503

 
$
1.75

 
$
(2,983
)
 
$
(2.03
)
 
$
5,910

 
$
4.13

 
$
1,285

 
$
0.85

Diluted loss per common share – discontinued operations

 

 
3,096

 
2.11

 
70

 
0.05

 
3,935

 
2.61

Adjustments(a)
440

 
0.31

 

 

 
1,578

 
1.10

 
654

 
0.43

Tax effect on adjustment(b)
(109
)
 
(0.08
)
 

 

 
(89
)
 
(0.06
)
 
(208
)
 
(0.14
)
Tax adjustment(c)
(157
)
 
(0.11
)
 
1,828

 
1.24

 
(157
)
 
(0.11
)
 
1,828

 
1.22

EPS-diluted-adjusted
$
2,677

 
$
1.87

 
$
1,941

 
$
1.32

 
$
7,312

 
$
5.11

 
$
7,494

 
$
4.97

________
(a)
Refer to the reconciliation of segment profit (loss) to Net income (loss) attributable to stockholders under U.S. GAAP within the previous section for the details of the adjustments.
(b)
The tax effect of each adjustment is determined based on the tax laws and valuation allowance status of the jurisdiction to which the adjustment relates.
(c)
In the three and nine months ended September 30, 2018, this adjustment consists of a tax benefit related to U.S. tax reform. In the three and nine months ended September 30, 2017, these adjustments consist of a tax expense related to the establishment of a valuation allowance on deferred tax assets that will no longer be realizable as a result of the sale of the Opel/Vauxhall Business, partially offset by tax benefits related to tax settlements.

The following table reconciles our effective tax rate under U.S. GAAP to ETR-adjusted (dollars in millions):
 
Three Months Ended
 
Nine Months Ended
 
September 30, 2018
 
September 30, 2017
 
September 30, 2018

September 30, 2017
 
Income before income taxes
 
Income tax expense
 
Effective tax rate
 
Income before income taxes
 
Income tax expense
 
Effective tax rate
 
Income before income taxes
 
Income tax expense
 
Effective tax rate
 
Income before income taxes
 
Income tax expense
 
Effective tax rate
Effective tax rate
$
2,630


$
100


3.8
%
 
$
2,430


$
2,316


95.3
%
 
$
7,091

 
$
1,085

 
15.3
%
 
$
8,870

 
$
3,637

 
41.0
%
Adjustments(a)(b)
440


109



 





 
1,619

 
89

 

 
654

 
208

 

Tax adjustment(c)


157






(1,828
)





157






(1,828
)


ETR-adjusted
$
3,070


$
366


11.9
%
 
$
2,430


$
488


20.1
%
 
$
8,710

 
$
1,331

 
15.3
%
 
$
9,524

 
$
2,017

 
21.2
%
________
(a)
Refer to the reconciliation of Net income (loss) attributable to stockholders under U.S. GAAP to EBIT-adjusted within the previous section for details of the adjustments. Net income attributable to noncontrolling interests for these adjustments of $41 million are included in the nine months ended September 30, 2018.
(b)
The tax effect of each adjustment is determined based on the tax laws and valuation allowance status of the jurisdiction to which the adjustment relates.
(c)
Refer to the reconciliation of diluted earnings (loss) per common share under U.S. GAAP to EPS-diluted-adjusted within the previous section for adjustment details. We are assessing potential material tax benefits that may arise in the three months ending December 31, 2018 as a result of operational considerations and tax reform guidance.





     4




General Motors Company and Subsidiaries
Supplemental Material
(Unaudited)

We define return on equity (ROE) as Net income (loss) attributable to stockholders for the trailing four quarters divided by average equity for the same period. Management uses average equity to provide comparable amounts in the calculation of ROE. The following table summarizes the calculation of ROE (dollars in billions):
 
Four Quarters Ended
 
September 30, 2018
 
September 30, 2017
Net income (loss) attributable to stockholders
$
0.8

 
$
3.1

Average equity(a)
$
36.3

 
$
44.5

ROE
2.3
%
 
7.0
%
________
(a)
Includes equity of noncontrolling interests where the corresponding earnings (loss) are included in EBIT-adjusted.


The following table summarizes the calculation of ROIC-adjusted (dollars in billions):
 
Four Quarters Ended
 
September 30, 2018
 
September 30, 2017
EBIT-adjusted(a)
$
12.0


$
12.4

Average equity(b)
$
36.3


$
44.5

Add: Average automotive debt and interest liabilities (excluding capital leases)
14.2


10.8

Add: Average automotive net pension & OPEB liability
19.1


21.2

Less: Average automotive and other net income tax asset
(22.5
)

(31.7
)
ROIC-adjusted average net assets
$
47.1


$
44.8

ROIC-adjusted
25.6
%

27.6
%
________
(a)
Refer to the reconciliation of Net income (loss) attributable to stockholders under U.S. GAAP to EBIT-adjusted within a previous section.
(b)
Includes equity of noncontrolling interests where the corresponding earnings (loss) are included in EBIT-adjusted.



The following table reconciles Net automotive cash provided by operating activities from continuing operations under U.S. GAAP to adjusted automotive free cash flow (dollars in millions):
 
Three Months Ended
 
Nine Months Ended
 
September 30, 2018

September 30, 2017
 
September 30, 2018
 
September 30, 2017
Net automotive cash provided by operating activities – continuing operations
$
2,515

 
$
1,214

 
$
5,438


$
7,583

Less: Capital expenditures – continuing operations
(2,191
)
 
(2,140
)
 
(6,496
)

(6,276
)
Add: Adjustment for Korea restructuring
72

 

 
748



Adjusted automotive free cash flow – continuing operations
396

 
(926
)
 
(310
)

1,307

Net automotive cash provided by (used in) operating activities – discontinued operations

 
(116
)
 


15

Less: capital expenditures – discontinued operations

 
(137
)
 


(653
)
Adjusted automotive free cash flow
$
396

 
$
(1,179
)
 
$
(310
)

$
669





     5




General Motors Company and Subsidiaries
Supplemental Material
(Unaudited)

The following tables summarize key financial information by segment (dollars in millions):
 
GMNA
 
GMI
 
Corporate
 
Eliminations
 
Total
Automotive
 
GM Cruise
 
GM
Financial
 
Eliminations
 
Total
Three Months Ended September 30, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net sales and revenue
$
27,650


$
4,582


$
56


 

$
32,288


$


$
3,518


$
(15
)

$
35,791

Expenditures for property
$
1,943


$
249


$
1


$
(2
)

$
2,191


$
3


$
17


$


$
2,211

Depreciation and amortization
$
1,251


$
136


$
12


$


$
1,399


$
2


$
1,904


$


$
3,305

Impairment charges
$


$
2


$
6


$


$
8


$


$


$


$
8

Equity income(a)
$
2


$
484


$


$


$
486


$


$
44


$


$
530

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GMNA
 
GMI
 
Corporate
 
Eliminations
 
Total
Automotive
 
GM Cruise
 
GM
Financial
 
Eliminations
 
Total
Three Months Ended September 30, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net sales and revenue
$
24,819


$
5,576


$
80


 

$
30,475


$


$
3,161


$
(13
)

$
33,623

Expenditures for property
$
2,023


$
115


$
1


$
1


$
2,140


$
8


$
19


$


$
2,167

Depreciation and amortization
$
1,210


$
166


$
11


$


$
1,387


$


$
1,743


$


$
3,130

Impairment charges
$
10


$
7


$


$


$
17


$


$


$


$
17

Equity income(a)
$
2

 
$
457

 
$

 
$


$
459


$


$
41


$


$
500

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GMNA
 
GMI
 
Corporate
 
Eliminations
 
Total
Automotive
 
GM Cruise
 
GM
Financial
 
Eliminations
 
Total
Nine Months Ended September 30, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net sales and revenue
$
83,969


$
14,188


$
155


 

$
98,312


$


$
10,417


$
(79
)

$
108,650

Expenditures for property
$
5,842


$
640


$
17


$
(3
)

$
6,496


$
15


$
51


$


$
6,562

Depreciation and amortization
$
3,474


$
426


$
36


$


$
3,936


$
5


$
5,560


$


$
9,501

Impairment charges
$
53


$
463


$
6


$


$
522


$


$


$


$
522

Equity income(a)
$
7


$
1,667


$


$


$
1,674


$


$
141


$


$
1,815

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GMNA
 
GMI
 
Corporate
 
Eliminations
 
Total
Automotive
 
GM Cruise
 
GM
Financial
 
Eliminations
 
Total
Nine Months Ended September 30, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net sales and revenue
$
82,594


$
16,226


$
306


 

$
99,126


$


$
8,899


$
(152
)

$
107,873

Expenditures for property
$
5,858


$
412


$
6


$


$
6,276


$
11


$
66


$


$
6,353

Depreciation and amortization
$
3,499


$
535


$
22


$
(1
)

$
4,055


$
1


$
4,757


$


$
8,813

Impairment charges
$
59


$
207


$
5


$


$
271


$


$


$


$
271

Equity income(a)
$
8


$
1,448


$


$


$
1,456


$


$
129


$


$
1,585

________
(a)
Includes Automotive China equity income of $485 million and $459 million in the three months ended September 30, 2018 and 2017 and $1.7 billion and $1.5 billion in the nine months ended September 30, 2018 and 2017.




     6




General Motors Company and Subsidiaries
Supplemental Material
(Unaudited)

Vehicle Sales

GM presents both wholesale and retail vehicle sales data to assist in the analysis of our revenue and our market share. GM does not currently export vehicles to Cuba, Iran, North Korea, Sudan, or Syria. Accordingly these countries are excluded from industry sales data and corresponding calculation of GM's market share.

Wholesale vehicle sales data, which represents sales directly to dealers and others, including sales to fleet customers, is the measure that correlates to GM's revenue from the sale of vehicles, which is the largest component of Automotive net sales and revenue. Wholesale vehicle sales exclude vehicles sold by joint ventures. In the nine months ended September 30, 2018, 35.4% of our wholesale vehicle sales volume was generated outside the U.S. The following table summarizes total wholesale vehicle sales of new vehicles by automotive segment (vehicles in thousands):
 
Three Months Ended

Nine Months Ended
 
September 30, 2018

September 30, 2017

September 30, 2018

September 30, 2017
GMNA(a)
843


762


2,659


2,596

GMI(b)
289


321


836


939

Total
1,132


1,083


3,495


3,535

 











Discontinued operations


90




696


__________
(a)
Wholesale vehicle sales related to transactions with the European Business were insignificant for all periods presented.
(b)
Wholesale vehicle sales include 37 and 131 vehicles related to transactions with the European Business for the three and nine months ended September 30, 2017.



     7




General Motors Company and Subsidiaries
Supplemental Material
(Unaudited)

Retail vehicle sales data, which represents sales to end customers based upon the good faith estimates of management, including sales to fleet customers, does not correlate directly to the revenue GM recognizes during the period. However retail vehicle sales data is indicative of the underlying demand for GM vehicles. Market share information is based primarily on retail vehicle sales volume. In countries where retail vehicle sales data is not readily available, other data sources such as wholesale or forecast volumes are used to estimate retail vehicle sales to end customers.

Retail vehicle sales data includes all sales by joint ventures on a total vehicle basis, not based on the percentage of ownership in the joint venture. Certain joint venture agreements in China allow for the contractual right to report vehicle sales of non-GM trademarked vehicles by those joint ventures. Retail vehicle sales data includes vehicles used by dealers under courtesy transportation programs. Certain fleet sales that are accounted for as operating leases are included in retail vehicle sales at the time of delivery to daily rental car companies. The following table summarizes total retail sales, or estimated sales where retail sales volume is not available, by geographic region (vehicles in thousands):
 
Three Months Ended

Nine Months Ended
 
September 30, 2018

September 30, 2017

September 30, 2018

September 30, 2017
United States
 
 
 
 
 
 
 
Chevrolet – Cars
118

 
159

 
365

 
471

Chevrolet – Trucks
231

 
246

 
715

 
665

Chevrolet – Crossovers
136

 
142

 
424

 
380

Cadillac
37

 
42

 
113

 
114

Buick
46

 
50

 
156

 
160

GMC
127

 
142

 
396

 
406

Total United States
695

 
781

 
2,169

 
2,196

Canada, Mexico and Other
139

 
144

 
404

 
423

Total North America(a)
834

 
925

 
2,573

 
2,619

Asia/Pacific, Middle East and Africa
 
 
 
 
 
 
 
Chevrolet
224

 
243

 
672

 
671

Wuling
235

 
237

 
776

 
801

Buick
252

 
311

 
754

 
836

Baojun
189

 
249

 
632

 
640

Cadillac
48

 
46

 
155

 
131

Other
20

 
45

 
70

 
137

Total Asia/Pacific, Middle East and Africa(a)(b)
968

 
1,131

 
3,059

 
3,216

South America(a)(c)
174

 
180

 
506

 
488

Total in GM markets
1,976

 
2,236

 
6,138

 
6,323

Total Europe
1

 
83

 
3

 
684

Total Worldwide
1,977

 
2,319

 
6,141

 
7,007

_______
(a)
Sales of Opel/Vauxhall outside of Europe were insignificant in the three and nine months ended September 30, 2018 and 2017.
(b)
Includes Industry and GM sales in India and South Africa. As of December 31, 2017 we have ceased sales of Chevrolet for the domestic markets in India and South Africa.
(c)
Primarily Chevrolet.

     8




General Motors Company and Subsidiaries
Supplemental Material
(Unaudited)


The vehicle sales at GM's China joint ventures presented in the following table are included in GM's retail vehicle sales on the preceding page (vehicles in thousands):    
 
Three Months Ended
 
Nine Months Ended
 
September 30, 2018
 
September 30, 2017
 
September 30, 2018
 
September 30, 2017
SAIC General Motors Sales Co., Ltd.
416


497


1,284


1,307

SAIC GM Wuling Automobile Co., Ltd. and FAW-GM Light Duty Commercial Vehicle Co., Ltd.
420


485


1,396


1,441


 
Three Months Ended
 
Nine Months Ended
 
September 30, 2018
 
September 30, 2017
 
September 30, 2018
 
September 30, 2017
Market Share
 
 
 
 
 
 
 
United States – Cars
10.6
%
 
11.4
%
 
10.6
%
 
11.5
%
United States – Trucks
24.1
%
 
27.2
%
 
25.1
%
 
25.6
%
United States – Crossovers
13.3
%
 
15.4
%
 
14.4
%
 
15.0
%
Total United States
15.8
%

17.3
%

16.4
%

16.7
%
Total North America
15.5
%

16.7
%

16.0
%

16.3
%
Total Asia/Pacific, Middle East and Africa
8.2
%

9.2
%

8.5
%

9.1
%
Total South America
15.2
%

16.1
%

15.1
%

15.9
%
Total GM Market
10.8
%

11.8
%

11.1
%

11.6
%
Total Europe
%

1.9
%

%

4.7
%
Total Worldwide
8.6
%

10.0
%

8.7
%

10.2
%
 
 
 
 
 
 
 
 
United States fleet sales as a percentage of retail vehicle sales
20.5
%
 
17.4
%
 
21.9
%
 
19.0
%
 
 
 
 
 
 
 
 
North America capacity two shift utilization
92.9
%
 
86.2
%
 
98.2
%
 
98.6
%
    








     9


General Motors Company and Subsidiaries

Combining Income Statement Information
(In millions) (Unaudited)
 
Three Months Ended September 30, 2018

Three Months Ended September 30, 2017
 
Automotive

GM Cruise
 
GM Financial

Eliminations

Combined

Automotive

GM Cruise
 
GM Financial

Eliminations

Combined
Net sales and revenue
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Automotive
$
32,288


$

 
$


$
(12
)

$
32,276


$
30,475


$

 
$


$
(9
)

$
30,466

GM Financial



 
3,518


(3
)

3,515





 
3,161


(4
)

3,157

Total net sales and revenue
32,288



 
3,518


(15
)

35,791


30,475



 
3,161


(13
)

33,623

Costs and expenses
 
 

 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
Automotive and other cost of sales
28,337


209

 


(13
)

28,533


26,704


159

 


(11
)

26,852

GM Financial interest, operating and other expenses



 
3,064




3,064





 
2,892




2,892

Automotive and other selling, general and administrative expense
2,579


5

 




2,584


2,297


6

 




2,303

Total costs and expenses
30,916


214

 
3,064


(13
)

34,181


29,001


165

 
2,892


(11
)

32,047

Operating income (loss)
1,372


(214
)
 
454


(2
)

1,610


1,474


(165
)
 
269


(2
)

1,576

Automotive interest expense
162



 


(1
)

161


153



 


(2
)

151

Interest income and other non-operating income, net
641


9

 


1


651


505



 




505

Equity income
486



 
44




530


459



 
41




500

Income (loss) before income taxes
$
2,337


$
(205
)
 
$
498


$


2,630


$
2,285


$
(165
)
 
$
310


$


2,430

Income tax expense
 
 
 
 
 
 
 

100


 

 
 
 

 

2,316

Income from continuing operations
 
 
 
 
 
 
 

2,530


 
 
 
 
 
 
 

114

Loss from discontinued operations, net of tax
 
 
 
 
 
 
 



 
 
 
 
 
 
 

3,096

Net income (loss)
 
 
 
 
 
 
 

2,530


 
 
 
 
 
 
 

(2,982
)
Net loss attributable to noncontrolling interests
 
 
 
 
 
 
 

4


 
 
 
 
 
 
 

1

Net income (loss) attributable to stockholders
 
 
 
 
 
 
 

$
2,534


 
 
 
 
 
 
 

$
(2,981
)
 



 
 









 
 
 
 
 
 
 
 
 
Net income (loss) attributable to common stockholders
 
 
 
 
 
 
 

$
2,503


 
 
 
 
 
 
 

$
(2,983
)
 
Nine Months Ended September 30, 2018
 
Nine Months Ended September 30, 2017
 
Automotive
 
GM Cruise
 
GM Financial
 
Eliminations
 
Combined
 
Automotive
 
GM Cruise
 
GM Financial
 
Eliminations
 
Combined
Net sales and revenue
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Automotive
$
98,312


$

 
$


$
(70
)

$
98,242


$
99,126


$


$


$
(143
)

$
98,983

GM Financial



 
10,417


(9
)

10,408






8,899


(9
)

8,890

Total net sales and revenue
98,312



 
10,417


(79
)

108,650


99,126




8,899


(152
)

107,873

Costs and expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Automotive and other cost of sales
88,346


514

 


(72
)

88,788


85,856


439




(147
)

86,148

GM Financial interest, operating and other expenses



 
9,081


(7
)

9,074






8,133




8,133

Automotive and other selling, general and administrative expense
7,152


20

 




7,172


7,120


16






7,136

Total costs and expenses
95,498


534

 
9,081


(79
)

105,034


92,976


455


8,133


(147
)

101,417

Operating income (loss)
2,814


(534
)
 
1,336




3,616


6,150


(455
)

766


(5
)

6,456

Automotive interest expense
475


1

 


(6
)

470


435






(5
)

430

Interest income and other non-operating income, net
2,121


9

 




2,130


1,259








1,259

Equity income
1,674



 
141




1,815


1,456




129




1,585

Income (loss) before income taxes
$
6,134


$
(526
)
 
$
1,477


$
6


7,091


$
8,430


$
(455
)

$
895


$


8,870

Income tax expense
 
 
 
 
 
 
 

1,085


 
 
 
 
 
 
 

3,637

Income from continuing operations
 
 
 
 
 
 
 

6,006


 
 
 
 
 
 
 

5,233

Loss from discontinued operations, net of tax
 
 
 
 
 
 
 

70


 
 
 
 
 
 
 

3,935

Net income
 
 
 
 
 
 
 

5,936


 
 
 
 
 
 
 

1,298

Net (income) loss attributable to noncontrolling interests
 
 
 
 
 
 
 

34


 
 
 
 
 
 
 

(11
)
Net income attributable to stockholders
 
 
 
 
 
 
 

$
5,970


 
 
 
 
 
 
 

$
1,287

 



 
 














 








Net income attributable to common stockholders



 
 






$
5,910







 






$
1,285


     10


General Motors Company and Subsidiaries

Basic and Diluted Earnings per Share
(Unaudited)

The following table summarizes basic and diluted earnings (loss) per share (in millions, except per share amounts):

Three Months Ended

Nine Months Ended

September 30, 2018

September 30, 2017

September 30, 2018

September 30, 2017
Basic earnings per share







Income from continuing operations(a)
$
2,534


$
115


$
6,040


$
5,222

Less: cumulative dividends on subsidiary preferred stock
(31
)

(2
)

(60
)

(2
)
Income from continuing operations attributable to common stockholders
2,503


113


5,980


5,220

Loss from discontinued operations, net of tax


3,096


70


3,935

Net income (loss) attributable to common stockholders
$
2,503


$
(2,983
)

$
5,910


$
1,285









Weighted-average common shares outstanding
1,412


1,445


1,410


1,483













Basic earnings per common share – continuing operations
$
1.77


$
0.08


$
4.24


$
3.52

Basic loss per common share – discontinued operations
$


$
2.14


$
0.05


$
2.65

Basic earnings (loss) per common share
$
1.77


$
(2.06
)

$
4.19


$
0.87

Diluted earnings per share







Income from continuing operations attributable to common stockholders – diluted(a)
$
2,503


$
113


$
5,980


$
5,220

Loss from discontinued operations, net of tax – diluted
$


$
3,096


$
70


$
3,935

Net income (loss) attributable to common stockholders – diluted
$
2,503


$
(2,983
)

$
5,910


$
1,285