GM Reports Net Income of $3.2 Billion

[Drew Dowdell]

GM Reports Net Income of $3.2 Billion

Net income of $1.77 per share including a net gain from special items of $0.82 per share

EBIT of $3.5 billion and EBIT-adjusted of $2.0 billion

GM Europe achieves breakeven results on an EBIT-adjusted basis

DETROIT – General Motors Company (NYSE: GM) today announced first quarter net income attributable to common stockholders of $3.2 billion, or $1.77 per fully-diluted share, marking the company's fifth consecutive profitable quarter. Revenue increased $4.7 billion to $36.2 billion, compared with the first quarter of 2010.

"We are on plan," said Dan Akerson, chairman and CEO. "GM has delivered five consecutive profitable quarters, thanks to strong customer demand for our new fuel-efficient vehicles and a competitive cost structure that allows us to leverage our strong brands around the world and focus on driving profitable automotive growth."

Net income attributable to common stockholders includes gains of $1.6 billion and $0.3 billion respectively related to the sales of the company's ownership interest in Delphi Automotive LLP and Ally Financial Inc. preferred stock. It also includes a $0.4 billion goodwill impairment charge at GM Europe (GME) resulting from a change in accounting standards and charges totaling $0.1 billion at GM International Operations (GMIO) related to revised tax regulations affecting the company's India joint venture. Combined, these special items increased net income attributable to common stockholders by $1.5 billion or $0.82 per fully-diluted share.

Earnings before interest and tax (EBIT) were $3.5 billion. EBIT adjusted to exclude special items was $2.0 billion compared with $1.7 billion in the first quarter of 2010.

GM Results Overview (in billions except for per share amounts)

Q1 2010 Q1 2011 Revenue $31.5 $36.2 Net income attributable to common stockholders $0.9 $3.2 Earnings per share (EPS) diluted $0.55 $1.77 EBIT $1.8 $3.5 Less special items $0.1 $1.5 EBIT – adjusted $1.7 $2.0 Impact of special items on EPS diluted $0.08 $0.82 Automotive net cash flow from operating activities $1.9 $(0.6)* Automotive free cash flow $1.0 $(1.9)* * Includes $2.5 billion negative impact related to wholesale advance financing agreement termination

GM North America (GMNA) reported EBIT of $2.9 billion compared with $1.2 billion in the first quarter of 2010. On an EBIT-adjusted basis, GMNA increased its earnings by $0.1 billion to $1.3 billion compared with the first quarter of 2010. The company expects GMNA's quarterly EBIT-adjusted results to improve on average for the remainder of the year compared with the first quarter as better pricing and improved fixed cost should more than offset commodity cost increases and unfavorable mix.

GME reported EBIT of $(0.4) billion. GME's results improved by $0.6 billion on an EBIT-adjusted basis compared with the first quarter of 2010 and it achieved a significant milestone by delivering breakeven results on that basis. Based on current plans, GME is targeting to achieve breakeven results on an EBIT-adjusted basis before restructuring for the entire year.

GMIO reported EBIT of $0.5 billion compared with $0.9 billion in the first quarter of 2010. On an EBIT-adjusted basis, GMIO earned $0.6 billion in the first quarter, a decline of $0.3 billion compared with the first quarter of 2010.

GM South America (GMSA) reported EBIT of $0.1 billion, down $0.2 billion from the first quarter of 2010. There were no adjustments in either period.

GM expects that full-year 2011 EBIT-adjusted results will show solid improvement over 2010. GM continues to expect no material impact on full-year results from the Japan crisis.

For the quarter, automotive cash flow from operating activities was $(0.6) billion and automotive free cash flow was $(1.9) billion. Both figures include the $2.5 billion cash impact of GM's decision, announced in October 2010, to end a wholesale advance agreement with Ally Financial.

GM ended the quarter with very strong total liquidity of $36.5 billion. Automotive cash and marketable securities, including Canadian Health Care Trust restricted cash, was $30.6 billion compared with $27.6 billion at the end of the fourth quarter of 2010.

"GM has great potential to deliver profitable growth around the world as the recovery continues," said Dan Ammann, senior vice president and CFO. "While we're encouraged, we keenly recognize we have more opportunities to leverage our scale, improve spending and investment efficiencies, and optimize our strong balance sheet."

[smk4565]

So nearly half the profit were from one time sales, but still, making money is far better than losing money. GM is on track and going the right direction, but I'd still like to see the government paid off and a couple years of profit.

[ZL-1]

So nearly half the profit were from one time sales, but still, making money is far better than losing money. GM is on track and going the right direction, but I'd still like to see the government paid off and a couple years of profit.

Removing the one-time items they did better (2.0 billion versus 1.7 billion) on the operating side, i.e. before interest and tax, than in Q1 2010. GM did lose money looking at cash from operations, which was negative, but it was due to the termination of in-transit financing agreements (does this mean that dealers now have to finance in-transit inventory?) which represented a USD 2.5 billion outflow (a one-time item). GM seems to at least (and at last!) have achieved some stability; even GME was essentially at breakeven; I'd say Q1 2011 was a good quarter.

[67impss]

I' like to see what Holden brought to the table It'd be nice to see that they were healthy also

[G. David Felt]

Sweet, I like everyone has questions, but they do seem to be going in the right direction!

[CSpec]

The stock is down over 15% this year in a strong market.

[MyerShift]

Sweet, I like everyone has questions, but they do seem to be going in the right direction!

Questions including the one you posed for Chrysler's profit of if it was just an accounting trick, right?

[FUTURE_OF_GM]

"GM is back!"

Ummm... No....