GM Reports 2012 Net Income of $4.9 Billion

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Thread: GM Reports 2012 Net Income of $4.9 Billion

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    GM Reports 2012 Net Income of $4.9 Billion

    GM Media



    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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    Re: GM Reports 2012 Net Income of $4.9 Billion

    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.
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    Re: GM Reports 2012 Net Income of $4.9 Billion

    I really don't understand all this financial stuff, it looks like they made money in Europe? 1.8 billion? Is that right?

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    Re: GM Reports 2012 Net Income of $4.9 Billion

    Quote Originally Posted by jzchev28 View Post
    I really don't understand all this financial stuff, it looks like they made money in Europe? 1.8 billion? Is that right?
    Its a loss of $1.8B. () are a financial way of showing negative results.
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    Re: GM Reports 2012 Net Income of $4.9 Billion

    Doesn't it seem that GM more than any other manufacturer incurs "special charges"?
    Time for that merry-go-round to stop. As legitimate as the charges may be, after awhile it just comes off as yet another excuse "why we didn't do better".

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    Re: GM Reports 2012 Net Income of $4.9 Billion

    Quote Originally Posted by ausrutherford View Post
    Its a loss of $1.8B. () are a financial way of showing negative results.
    Ok I see now. Much bigger loss then the year prior, ouch!

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    Re: GM Reports 2012 Net Income of $4.9 Billion

    Two alarming facts; losses in Europe totaled 1.8B in 2012 and the trucks are nearing a 120 day supply.

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    Re: GM Reports 2012 Net Income of $4.9 Billion

    Ford continues to out earn GM but GM has less debt and stronger pension funding. Otherwise they track pretty close to each other. If I am at Chrysler, I have serious bonus envy though.

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    Re: GM Reports 2012 Net Income of $4.9 Billion

    Quote Originally Posted by goatgary View Post
    Doesn't it seem that GM more than any other manufacturer incurs "special charges"?
    Time for that merry-go-round to stop. As legitimate as the charges may be, after awhile it just comes off as yet another excuse "why we didn't do better".
    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.
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    Re: GM Reports 2012 Net Income of $4.9 Billion

    Quote Originally Posted by EcoBustier69 View Post
    Ford continues to out earn GM but GM has less debt and stronger pension funding. Otherwise they track pretty close to each other. If I am at Chrysler, I have serious bonus envy though.
    Yes, but that is changing, and quickly.

    http://ycharts.com/companies/F/chart...t_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.

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    Re: GM Reports 2012 Net Income of $4.9 Billion

    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.
    Last edited by mchicha; 02-14-2013 at 12:31 PM.

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    Re: GM Reports 2012 Net Income of $4.9 Billion

    Quote Originally Posted by goatgary View Post
    Doesn't it seem that GM more than any other manufacturer incurs "special charges"?
    Time for that merry-go-round to stop. As legitimate as the charges may be, after awhile it just comes off as yet another excuse "why we didn't do better".
    Sage advice: When you (GM) find yourself "...in deep hole..." it's time to "...stop digging..."
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    Re: GM Reports 2012 Net Income of $4.9 Billion

    Quote Originally Posted by goatgary View Post
    Doesn't it seem that GM more than any other manufacturer incurs "special charges"?
    Time for that merry-go-round to stop. As legitimate as the charges may be, after awhile it just comes off as yet another excuse "why we didn't do better".
    No - I expect that you'd have a hard time finding any corporation that doesn't have special charges or income. It's just the way accounting works and is normal. You just notice them more with GM because of your interest in all things GM

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    Re: GM Reports 2012 Net Income of $4.9 Billion

    Quote Originally Posted by EcoBustier69 View Post
    Ford continues to out earn GM but GM has less debt and stronger pension funding. Otherwise they track pretty close to each other. If I am at Chrysler, I have serious bonus envy though.
    The K2XX truck need to match or beat the F series in sales and GMNA will out earn Ford NA. Also ATS sales have to atleast match the CTS sales in its heydays for a significant boost in profits, considering the amount of money GM has invested in the revamp of Cadillac..

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    Re: GM Reports 2012 Net Income of $4.9 Billion

    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.
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