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GM Reports 2012 Net Income of $4.9 Billion

3K views 25 replies 22 participants last post by  TruckMan 
#1 ·
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Company posts third consecutive year of strong earnings
Fourth quarter net income of $0.9 billion, up from $0.5 billion last year
EBIT-adjusted of $1.2 billion in the fourth quarter, up from $1.1 billion last year
DETROIT – General Motors Co. (NYSE: GM) today announced 2012 calendar-year net income attributable to common stockholders of $4.9 billion, or $2.92 per fully diluted share, down from $7.6 billion, or $4.58 per fully diluted share in 2011, due primarily to unfavorable special items.

Special items during the calendar year impacted full-year net income to common stockholders unfavorably, $(0.5) billion, or $(0.32) per share, compared to a favorable $1.2 billion impact in 2011, or $0.70 per share.

Revenue increased 1 percent to $152.3 billion, compared with $150.3 billion in 2011. Full-year earnings before interest and tax (EBIT) adjusted was $7.9 billion, compared with $8.3 billion in 2011. Full-year EBIT-adjusted for 2012 includes the impact of restructuring charges of $(0.4) billion.

“We recorded another solid year in 2012 as we grew the business, delivered a third straight year of profitability and took significant actions to put the company on a solid path for future growth,” said Dan Akerson, chairman and CEO. “This year our priorities will be executing flawless new vehicle launches, controlling costs and delivering more vehicles to our customers at outstanding value.”

Fourth Quarter Results

Revenue in the fourth quarter of 2012 increased 3 percent to $39.3 billion, compared with the fourth quarter of 2011. GM’s fourth quarter 2012 net income attributable to common stockholders was $0.9 billion, or $0.54 per fully diluted share, including a net gain from special items of $0.1 billion or $0.06 per fully diluted share.

In the fourth quarter of 2011, GM’s net income attributable to common stockholders was $0.5 billion, or $0.28 per fully diluted share, including a net loss from special items of $(0.2) billion, or $(0.11) per fully diluted share.

EBIT-adjusted was $1.2 billion in the fourth quarter of 2012, compared with $1.1 billion in the fourth quarter of 2011. Fourth quarter EBIT-adjusted for 2012 includes the impact of restructuring charges of $(0.2) billion.

GM’s fourth quarter 2012 special items impact to net income of $0.1 billion includes a $34.9 billion non-cash benefit from the release of the majority of the company’s valuation allowances on U.S. and Canada deferred tax assets and an associated $(26.2) billion non-cash goodwill impairment charge; a $(5.2) billion non-cash impairment of GM Europe long-lived assets; and a $(2.2) billion charge related to U.S. salaried pension plan actions announced earlier this year, among other smaller items.

The non-cash impairment of GM Europe long-lived assets does not reflect any change to the company’s objective to break even in its European operations by mid-decade.

Segment Results

GM North America (GMNA) reported EBIT-adjusted of $1.4 billion in the fourth quarter of 2012 compared with $1.5 billion in 2011. Full-year EBIT-adjusted was $7.0 billion in 2012 compared to $7.2 billion in 2011. Based on GMNA’s 2012 financial performance, the company will pay profit sharing of up to $6,750 to approximately 49,000 eligible GM U.S. hourly employees.
GM Europe (GME) reported EBIT-adjusted of $(0.7) billion in the fourth quarter of 2012, compared to $(0.6) billion in 2011. Full-year EBIT-adjusted was $(1.8) billion in 2012, compared with $(0.7) billion in 2011.
GM International Operations (GMIO) reported EBIT-adjusted of $0.5 billion in the fourth quarter of 2012 compared with $0.4 billion in 2011. Full-year EBIT-adjusted was $2.2 billion in 2012 compared with $1.9 billion in 2011.
GM South America (GMSA) reported EBIT-adjusted of $0.1 billion in the fourth quarter of 2012, compared with $(0.2) billion in 2011. Full-year EBIT-adjusted was $0.3 billion in 2012 compared with EBIT-adjusted of $(0.1) billion in 2011.
GM Financial reported earnings before taxes (EBT) of $0.1 billion in the fourth quarter of 2012, compared with $0.2 billion in 2011. Full-year EBT was $0.7 billion, compared to $0.6 billion in 2011.
Cash Flow and Liquidity

For the fourth quarter of 2012, automotive cash flow from operating activities was $0.5 billion, compared to $1.2 billion in 2011. In the fourth quarter of 2012, adjusted automotive free cash flow was $1.1 billion, compared to $(0.2) billion in 2011. For the year, adjusted automotive free cash flow was $4.3 billion, compared to $3.0 billion a year ago.

GM ended 2012 with strong total automotive liquidity of $37.2 billion compared with $37.0 billion at year-end in 2011. Automotive cash and marketable securities was $26.1 billion at the end of 2012, compared with $31.6 billion a year earlier.

GM expects capital expenditures for 2013 to be similar to 2012.

U.S. Pension Update

GM’s U.S. defined benefit pension plans earned asset returns of 11.6 percent in 2012 and ended the year 84 percent funded. The underfunded position stood at $13.1 billion, slightly improved from the prior year. As previously announced, during 2012 GM settled approximately $28 billion of its U.S. salaried pension liability through a combination of lump sum offers and annuitizations.

Under current economic conditions, GM expects no mandatory contributions to U.S. defined benefit pension plans for at least five years. While the company will continue to evaluate opportunities to make voluntary cash contributions, it has no current plans to do so in 2013.

“We’re pleased with our fourth quarter results, as the business generated strong adjusted free cash flow and we took significant steps to strengthen our fortress balance sheet,” said Dan Ammann, senior vice president and CFO. “Our aggressive vehicle launch cadence and focus on improving the topline, combined with rigorous cost discipline will help us continue to generate strong business results moving forward.”
 
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#2 ·
Will watch the stock today to see the reaction.

Recommendation: How difficult would it be for GMI to post the major auto-stocks to the Homepage? Would be nice to get that info each time you visit the site.
 
#9 ·
GM reports under US GAAP (generally accepted accounting principles) and that methodology is fraught with reasons to restate or classifications of certain actions as "special charges". The more regulated your industry is, the more of these will filter through in financial statements.

Most of the other countries in the world use IFRS for reporting asnd the US is moving towards that standard. The biggest issue in moving to IFRS is the disclosures are much less than in GAAP. Some countries use a modified IFRS to increase the rigor of the reporting. Japan is one of them, but Japan also has a different view of how to report controlling interests, off book assets, and certain financial transactions that are non-monetary. In looking at public Japanese automakers, I'd say that the GM and Ford presentation is more open and honest to an average investor than the Japanese presentations.
 
#10 ·
Yes, but that is changing, and quickly.

http://ycharts.com/companies/F/chart#series=type:company,id:F,calc:debt_equity_ratio

http://ycharts.com/companies/GM/debt_equity_ratio

GM really needs to find a way to increase their ROI or, gradually, they'll begin to fall behind the major players in the segment in terms of ability to fund new product development. The PSA-Opel tie up and the focus on Cadillac are pretty obviously intended to do exactly that, I'm curious to see if either works. Certainly, GM is showing that they aren't afraid to gamble.
 
#11 ·
And yes! Ford has already taken the financial writeoffs for most of the European situation whereas Government Motors has done nothing to improve Europe and to right-size itself. Ford's 2012 earning were impacted by the european writeoffs whereas Government Motors is still whistling into the wind hoping no one will notice how bad things are.

It is easy to have no debt when you screwed your prior bond and stock holders and creditors and then mooched off the taxpayers.
 
#12 · (Edited)
While all the reasons given here are valid as to why GM needs to fix its financial results, we also have to take into account that the easiest way to sink an automaker is to focus on quater by quater results in an otherwise capital intensive industry that requires long term visions and plans.

What I would recomend GM do is have the flixibility to fix problem products like the Regal and Malibu Quickly if the market does not receive them well. Lastly, there has to be a way to give Opel credit for products sold by Buick in China and United States that are developed by Opel. I beleive GM is mistating its financial statements if these products are not credited back to Europe, for they are European products.


I have never seen a good explanation as to why the Regal and Verano do not give Opel any income.
 
#16 ·
Decent year except Europe. The financial crisis has been going on long enough in Europe, GM needs to cut plants and staff. A 3% loss for the stock today is generous, considering the nonsense in Europe.
 
#17 ·
It is time for stage 2 of GM's renaissance, and for the K2XX trucks to start earning their keep with the other new or significantly revised products.
 
#19 ·
Sadly, it would never occur to GM to throw some money to US treasure and the American taxpayer
who made it all possible. Somehow it doesn't seem right that some make embarrassing bucket loads
of cash while taxpayers have a near $20 billion bill..

I'll leave the GM fans to celebrate success and a great financial year and wish GM well,
I just wish they (GM) would see the big picture....
 
#21 ·
AMERICA123, you must REALLY get upset by this stuff. I was enjoying your post until about half way down when it became less and less readable! By the last three or four paragraphs came, I had no idea what you were saying but I'm pretty sure I got it that you are well and truely pissed off!!!

I hope you don't have an aneurism, mate.
 
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