Form 8-K General Motors Co For: Aug 01

August 1, 2019 9:34 AM




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) August 1, 2019
___________________
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))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock
GM
New York Stock Exchange
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 August 1, 2019 General Motors Company (GM) issued a news release and supplemental materials on the subject of its 2019 second 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 2019 second 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: August 1, 2019
 
Christopher T. Hatto, Vice President, Controller and Chief Accounting Officer




Exhibit 99.1 SECOND-QUARTER 2019 EARNINGS GM Reports Income of $2.4 Billion and EBIT-adjusted of $3.0 Billion • Strong North America EBIT-adj. margin of 10.7%, driven by the successful rollout of full-size light-duty pickup trucks. • GM’s all-new heavy-duty pickups began shipping at the end of Q2 with growth potential throughout Q3 and Q4. • Significant progress on transformational cost initiatives with $1.1 billion in savings achieved year-to-date. Q2 2019 RESULTS OVERVIEW Net Revenue Income Auto Operating Cash Flow EPS-Diluted GAAP $36.1 B $2.4 B $3.8 B $1.66 vs. Q2 2018 (1.9)% 1.6% $(0.2) B Equal EBIT-adj. Margin EBIT-adj. Adj. Auto FCF EPS-Diluted-adj. Non-GAAP 8.4% $3.0 B $2.5 B $1.64 vs. Q2 2018 (0.3) pts (5.6)% $(0.1) B (9.4)% EPS-diluted and EPS-diluted-adj. includes $(0.01) from Lyft and PSA revaluations. Our results demonstrate the earnings power of our full-size truck franchise, with more upside to come. We will continue operating our business with discipline, and the vision needed to deliver a stronger future for our employees, customers and shareholders.” – Mary Barra, Chairman and CEO PICKUP“ TRUCKS: LIGHT-DUTY LEADERSHIP GM’s cadenced full-size pickup truck launch remains on track, with sales of the all-new Chevrolet Silverado and GMC Sierra light-duty crew cabs up double digits year- over-year for the second straight quarter. Overall, GM’s light-duty pickups gained nearly 3 percentage points of retail share from Q1 to Q2, and remained the retail market share leader in the segment (J.D. Power). Full production of all cab styles—including more afordable 2020 Chevrolet Corvette Stingray was revealed July 18. regular and double cabs—started in March, helping normalize availability of the entire lineup. ALL-NEW 2020 MID-ENGINE CORVETTE DEBUTS In July, GM unveiled the 2020 Chevrolet Corvette GM’s all-new heavy-duty pickups launched in June, Stingray, the company’s frst-ever production mid- with early production focused on HD crew cab models, engine Corvette, to a global audience of nearly similar to the light-duty launch cadence. With the 300,000 in 157 countries. The Stingray incorporates previously announced 40,000 unit additional capacity new technologies, such as GM’s all-new digital vehicle at Flint Assembly, the company is poised for signifcant platform, that the company will use for future vehicles. growth in this proftable segment. In anticipation of strong customer demand, the company is increasing production of the new model, adding a second shift and more than 400 hourly jobs at its Bowling Green Assembly plant in Kentucky. Since 2011, GM has invested more than $900 million in this facility. The Corvette will start under $60,000, making it the frst afordable V-8 mid-engine supercar. Corvettes will The all-new 2020 Chevrolet Silverado 2500 HD Z71. begin arriving at dealerships late in the fourth quarter.


 
“ SEGMENT RESULTS (EBIT-ADJUSTED - $B) North America International GM Cruise GM Financial (EBT) Q2 19 Q2 18 Q2 19 Q2 18 Q2 19 Q2 18 Q2 19 Q2 18 3.0 2.7 (0.0) 0.1 (0.3) (0.2) 0.5 0.5 GM’s all-new light-duty Lower earnings due to a Completed new funding Revenue of $3.6 billion in the trucks, crossovers and $400-million decline in round and announced second quarter was a record. transformational cost China income from a record plans to launch in San Continued portfolio growth savings drove a strong Q2 2018, partially ofset by Francisco (see below). Since contributed to EBT results. 10.7% EBIT-adj. margin. better performance outside 2016, Cruise has increased of China. its staf from 40 to 1,500. We had a solid second quarter, and expect the second half of the year to be stronger than the frst half. Our confdence in our full-year outlook is based on our strong full-size truck rollout, other key launches and ongoing cost savings.” – Dhivya Suryadevara, CFO Q2“ SALES HIGHLIGHTS CRUISE UPDATE GM delivered 747,000 vehicles in the U.S., led by After a new equity raise in May of $1.15 billion which crossover sales which set a Q2 record with a 17-percent raised its valuation to $19 billion, in July Cruise increase year-over-year. The Chevrolet Equinox and announced actions to advance its plans toward launch Traverse set Q2 records; every Buick crossover was up in San Francisco.  To deploy at large scale, Cruise will year-over-year; the GMC Acadia posted its best frst signifcantly increase its testing and validation miles half ever; and the all-new Cadillac XT4 continued to over the balance of 2019; increase community lead its segment. U.S. retail market share is estimated engagement through advertising and live events; to be fat compared to a year ago, with trucks and and continue work on the development of a purpose- crossovers ofsetting lower passenger car sales.  built autonomous vehicle – the efort of hundreds of  talented Cruise, GM and Honda engineers. This vehicle GM China sold 754,000 vehicles in the second quarter, will completely re-imagine the customer about 100,000 fewer than the previous year’s quarter, experience from the ground up. due to an overall market decline, segment shifts and lower demand for outgoing models. For details on U.S. INVESTMENTS IN PLANTS AND PEOPLE GM’s global sales, click here. In June, GM announced investments at its Fort Wayne, Flint and Arlington plants to support production expansion for its full-size truck and SUV facilities, bringing investment totals to more than $4.2 billion to prepare for its next-generation truck launches. GM’s new trucks are also driving investments at plants in Moraine, Ohio to expand diesel engine output and in Toledo, Ohio to expand 10- speed transmission production. These investments The Cadillac XT5 remains Cadillac’s best-selling vehicle globally. support more than 15,000 hourly jobs at these plants. CHINA INDUSTRY EXPECTED TO REMAIN WEAK To date, 1,700 of 2,800 hourly employees impacted by Due to China’s economic slowdown, China industry transformation actions have been placed in new jobs. unit sales are expected to remain weak through the Positions are available for all impacted hourly workers second half of the year, with industry deliveries at plants supporting growth segments. projected to be down for the full year. SUPER CRUISE EXPANDS HIGHWAY NETWORK GM China expects to beneft from about 20 new In June, Cadillac announced the expansion of Super vehicle launches, the majority of which will go on sale Cruise to an additional 70,000 miles of compatible later in the year. Nearly two thirds of the launches in highways in the U.S. and Canada. By year end, it will the second half are SUVs. However, GM expects equity be available on more than 200,000 total miles of income in the second half of the year to be generally compatible highways. More than 3 million miles have in line with the frst half, due to ongoing headwinds. been driven by customers using Super Cruise since its introduction.


 
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 business, can be found at gm.com. Cautionary Note on Forward-Looking Statements: This press release may include “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. We caution readers not to place undue reliance on forward-looking statements. Statements including words such as “anticipate,” “appears,” “approximately,” “believe,” “continue,” “could,” “designed,” “efect,” “estimate,” “evaluate,” “expect,” “forecast,” “goal,” “initiative,” “intend,” “may,” “objective,” “outlook,” “plan,” “potential,” “priorities,” “project,” “pursue,” “seek,” “should,” “target,” “when,” “will,” “would,” or the negative of any of those words or similar expressions to identify forward-looking statements represent our current judgment about possible future events. In making these statements we rely upon assumptions and analysis based on our experience and perception of historical trends, current conditions and expected future developments, as well as other factors we consider appropriate under the circumstances. These statements are not guarantees of future performance; they involve risks and uncertainties and actual events or results may difer materially from these statements. Factors that might cause such diferences include, but are not limited to, a variety of economic, competitive and regulatory factors, many of which are beyond our control and are described in our Annual Report on Form 10-K for the year ended December 31, 2018, as well as additional factors we may describe from time to time in other flings with the U.S. Securities and Exchange Commission. We undertake no obligation to update publicly or otherwise revise any forward-looking statements, whether as a result of new information, future events or other factors that afect the subject of these statements, except where we are expressly required to do so by law. 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 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; earnings before income taxes (EBT)-adjusted for our General Motors Financial Company, Inc. (GM Financial) segment; 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; costs arising from the ignition switch recall and related legal matters; and certain currency devaluations associated with hyperinflationary economies. 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 an impact from the item. Our corresponding measure for our GM Financial segment is EBT-adjusted.

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 other postretirement benefits (OPEB) liabilities; and average automotive 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 closure of a facility 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 attributable to stockholders under U.S. GAAP (dollars in millions):
 
Three Months Ended
 
Six Months Ended
 
June 30, 2019
 
June 30, 2018
 
June 30, 2019
 
June 30, 2018
Operating segments
 
 
 
 
 
 
 
GM North America (GMNA)
$
3,022

 
$
2,670


$
4,918


$
4,903

GM International (GMI)
(48
)
 
143


(17
)

332

GM Cruise
(279
)

(154
)

(448
)

(320
)
GM Financial(a)
536

 
536


895


979

Total operating segments
3,231

 
3,195


5,348


5,894

Corporate and eliminations(b)
(219
)
 
(3
)

(26
)

(92
)
EBIT-adjusted
3,012

 
3,192


5,322

 
5,802

Adjustments
 
 


 
 
 
Transformation activities(c)
(361
)


 
(1,151
)
 

GM Brazil indirect tax recoveries(d)
380



 
1,237

 

GMI restructuring(e)

 
(196
)



(1,138
)
Total adjustments
19

 
(196
)

86


(1,138
)
Automotive interest income
106

 
72


204


136

Automotive interest expense
(195
)
 
(159
)

(376
)

(309
)
Income tax expense
(524
)
 
(519
)

(661
)

(985
)
Income from continuing operations(f)
2,418

 
2,390


4,575


3,506

Loss from discontinued operations, net of tax(g)

 




70

Net income attributable to stockholders
$
2,418


$
2,390


$
4,575


$
3,436

__________
(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 accelerate our transformation for the future to strengthen our core business, capitalize on the future of personal mobility and drive significant cost efficiencies. The adjustments primarily consist of supplier-related charges and accelerated depreciation in the three months ended June 30, 2019 and accelerated depreciation and supplier-related charges in the six months ended June 30, 2019.
(d)
These adjustments were excluded because of the unique events associated with decisions rendered by the Superior Judicial Court of Brazil resulting in retrospective recoveries of indirect taxes.
(e)
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 primarily consist of employee separation charges and asset impairments in Korea.
(f)
Net of Net 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
 
June 30,
 
March 31,
 
December 31,
 
September 30,
 
2019

2018

2019

2018

2018

2017

2018

2017
Net income (loss) attributable to stockholders
$
2,418


$
2,390


$
2,157


$
1,046


$
2,044


$
(5,151
)

$
2,534


$
(2,981
)
Loss from discontinued operations, net of tax






70




277




3,096

Income tax expense (benefit)
524


519


137


466


(611
)

7,896


100


2,316

Automotive interest expense
195


159


181


150


185


145


161


151

Automotive interest income
(106
)

(72
)

(98
)

(64
)

(117
)

(82
)

(82
)

(59
)
Adjustments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Transformation activities(a)
361

 

 
790

 

 
1,327

 

 

 

GM Brazil indirect tax recoveries(b)
(380
)



(857
)










GMI restructuring(c)


196




942









Ignition switch recall and related legal matters(d)












440



Total adjustments
(19
)
 
196

 
(67
)
 
942

 
1,327

 

 
440

 

EBIT-adjusted
$
3,012

 
$
3,192

 
$
2,310

 
$
2,610

 
$
2,828

 
$
3,085

 
$
3,153

 
$
2,523

________
(a)
These adjustments were excluded because of a strategic decision to accelerate our transformation for the future to strengthen our core business, capitalize on the future of personal mobility and drive significant cost efficiencies. The adjustments primarily consist of supplier-related charges and accelerated depreciation in the three months ended June 30, 2019, accelerated depreciation in the three months ended March 31, 2019 and employee separation charges and accelerated depreciation in the three months ended December 31, 2018.
(b)
These adjustments were excluded because of the unique events associated with decisions rendered by the Superior Judicial Court of Brazil resulting in retrospective recoveries of indirect taxes.
(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 primarily consist of employee separation charges and asset impairments in Korea.
(d)
This adjustment was excluded because of the unique events associated with the ignition switch recall, which included various investigations, inquiries and complaints from constituents.

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

Six Months Ended
 
June 30, 2019

June 30, 2018

June 30, 2019

June 30, 2018
 
Amount

Per Share

Amount

Per Share

Amount
 
Per Share
 
Amount
 
Per Share
Diluted earnings per common share
$
2,381

 
$
1.66

 
$
2,375

 
$
1.66

 
$
4,500

 
$
3.13

 
$
3,407

 
$
2.38

Diluted loss per common share – discontinued operations

 

 

 

 

 

 
70

 
0.05

Adjustments(a)
(19
)
 
(0.01
)
 
196

 
0.14

 
(86
)
 
(0.06
)
 
1,138

 
0.80

Tax effect on adjustment(b)
(9
)
 
(0.01
)
 
20

 
0.01

 
(41
)
 
(0.03
)
 
20

 
0.01

EPS-diluted-adjusted
$
2,353

 
$
1.64

 
$
2,591

 
$
1.81

 
$
4,373

 
$
3.04

 
$
4,635

 
$
3.24

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


3





General Motors Company and Subsidiaries
Supplemental Material
(Unaudited)

The following table reconciles our effective tax rate under U.S. GAAP to ETR-adjusted (dollars in millions):
 
Three Months Ended
 
Six Months Ended
 
June 30, 2019
 
June 30, 2018
 
June 30, 2019

June 30, 2018
 
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
$
2,927


$
524


17.9
%
 
$
2,885


$
519


18.0
%
 
$
5,209

 
$
661

 
12.7
%
 
$
4,461

 
$
985

 
22.1
%
Adjustments(a)
(16
)

9



 
237


(20
)


 
(83
)
 
41

 

 
1,179

 
(20
)
 

ETR-adjusted
$
2,911


$
533


18.3
%
 
$
3,122


$
499


16.0
%
 
$
5,126

 
$
702

 
13.7
%
 
$
5,640

 
$
965

 
17.1
%
________
(a)
Refer to the reconciliation of segment profit (loss) to Net income attributable to stockholders under U.S. GAAP for adjustment details. Net income attributable to noncontrolling interests included for these adjustments is insignificant in the three and six months ended June 30, 2019 and $41 million in the three and six months ended June 30, 2018. 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.

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
 
June 30, 2019
 
June 30, 2018
Net income (loss) attributable to stockholders
$
9.2

 
$
(4.7
)
Average equity(a)
$
41.1

 
$
37.2

ROE
22.3
%
 
(12.6
)%
________
(a)
Includes equity of noncontrolling interests where the corresponding earnings (loss) are included in Net income (loss) attributable to stockholders.

The following table summarizes the calculation of ROIC-adjusted (dollars in billions):
 
Four Quarters Ended
 
June 30, 2019
 
June 30, 2018
EBIT-adjusted(a)
$
11.3


$
11.4

Average equity(b)
$
41.1


$
37.2

Add: Average automotive debt and interest liabilities (excluding finance leases)
14.9


13.5

Add: Average automotive net pension & OPEB liability
16.9


19.9

Less: Average automotive and other net income tax asset
(23.1
)

(24.5
)
ROIC-adjusted average net assets
$
49.8


$
46.1

ROIC-adjusted
22.7
%

24.7
%
________
(a)
Refer to the reconciliation of Net income (loss) attributable to stockholders under U.S. GAAP to EBIT-adjusted.
(b)
Includes equity of noncontrolling interests where the corresponding earnings (loss) are included in EBIT-adjusted.


4





General Motors Company and Subsidiaries
Supplemental Material
(Unaudited)

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
 
Six Months Ended
 
June 30, 2019

June 30, 2018
 
June 30, 2019
 
June 30, 2018
Net automotive cash provided by operating activities
$
3,813

 
$
3,986

 
$
1,606


$
2,923

Less: Capital expenditures
(1,435
)
 
(2,065
)
 
(3,428
)

(4,305
)
Add: Transformation activities
172

 

 
487

 

Add: GMI restructuring

 
676

 
9


676

Less: GM Brazil indirect tax recoveries
(16
)
 

 
(16
)
 

Adjusted automotive free cash flow
$
2,534

 
$
2,597

 
$
(1,342
)

$
(706
)

The following tables summarize key financial information by segment (dollars in millions):
 
GMNA
 
GMI
 
Corporate
 
Eliminations
 
Total
Automotive
 
GM Cruise
 
GM
Financial
 
Reclassifications/Eliminations
 
Total
Three Months Ended June 30, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net sales and revenue
$
28,324


$
4,047


$
54


 

$
32,425


$
25


$
3,639


$
(29
)

$
36,060

Expenditures for property
$
1,268


$
166


$
1


$


$
1,435


$
19


$
8


$


$
1,462

Depreciation and amortization
$
1,409


$
119


$
13


$


$
1,541


$
7


$
1,848


$


$
3,396

Impairment charges
$
8


$
3


$


$


$
11


$


$


$


$
11

Equity income(a)
$
2


$
233


$
(6
)

$


$
229


$


$
42


$


$
271

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GMNA
 
GMI
 
Corporate
 
Eliminations
 
Total
Automotive
 
GM Cruise
 
GM
Financial
 
Eliminations
 
Total
Three Months Ended June 30, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net sales and revenue
$
28,501


$
4,758


$
50


 

$
33,309


$


$
3,488


$
(37
)

$
36,760

Expenditures for property
$
1,835


$
229


$
2


$
(1
)

$
2,065


$


$
14


$


$
2,079

Depreciation and amortization
$
1,114


$
137


$
13


$


$
1,264


$
2


$
1,833


$


$
3,099

Impairment charges
$
28


$
2


$


$


$
30


$


$


$


$
30

Equity income(a)
$
3

 
$
589

 
$

 
$


$
592


$


$
45


$


$
637

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GMNA
 
GMI
 
Corporate
 
Eliminations
 
Total
Automotive
 
GM Cruise
 
GM
Financial
 
Reclassifications/Eliminations
 
Total
Six Months Ended June 30, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net sales and revenue
$
55,689


$
7,897


$
100


 

$
63,686


$
50


$
7,259


$
(57
)

$
70,938

Expenditures for property
$
2,969


$
458


$
1


$


$
3,428


$
23


$
25


$


$
3,476

Depreciation and amortization
$
3,478


$
246


$
25


$


$
3,749


$
9


$
3,747


$


$
7,505

Impairment charges
$
15


$
3


$


$


$
18


$


$


$


$
18

Equity income(a)
$
4


$
607


$
(13
)

$


$
598


$


$
87


$


$
685

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GMNA
 
GMI
 
Corporate
 
Eliminations
 
Total
Automotive
 
GM Cruise
 
GM
Financial
 
Eliminations
 
Total
Six Months Ended June 30, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net sales and revenue
$
56,319


$
9,606


$
99


 

$
66,024


$


$
6,899


$
(64
)

$
72,859

Expenditures for property
$
3,899


$
391


$
16


$
(1
)

$
4,305


$
12


$
34


$


$
4,351

Depreciation and amortization
$
2,223


$
290


$
24


$


$
2,537


$
3


$
3,656


$


$
6,196

Impairment charges
$
53


$
461


$


$


$
514


$


$


$


$
514

Equity income(a)
$
5


$
1,183


$


$


$
1,188


$


$
97


$


$
1,285

________
(a)
Includes Automotive China equity income of $235 million and $592 million in the three months ended June 30, 2019 and 2018 and $611 million and $1.2 billion in the six months ended June 30, 2019 and 2018.




5





General Motors Company and Subsidiaries
Supplemental Material
(Unaudited)

Vehicle Sales

GM presents both wholesale and total vehicle sales data to assist in the analysis of our revenue and our market share. Cuba, Iran, North Korea, Sudan and Syria are subject to broad economic sanctions. Accordingly these countries are excluded from industry sales data and the corresponding calculation of GM's market share.

Wholesale vehicle sales data consists of sales to GM's dealers and distributors as well as sales to the U.S. Government and excludes vehicles sold by our joint ventures. Wholesale vehicle sales data correlates to GM's revenue recognized from the sale of vehicles, which is the largest component of Automotive net sales and revenue. In the six months ended June 30, 2019, 34.1% of our wholesale vehicle sales volume was generated outside the U.S. The following table summarizes wholesale vehicle sales by automotive segment (vehicles in thousands):
 
Three Months Ended

Six Months Ended
 
June 30, 2019

June 30, 2018

June 30, 2019

June 30, 2018
GMNA
870


923


1,729


1,816

GMI
259


281


495


547

Total
1,129


1,204


2,224


2,363






6





General Motors Company and Subsidiaries
Supplemental Material
(Unaudited)

Total vehicle sales data represents: (1) retail sales (i.e., sales to consumers who purchase new vehicles from dealers or distributors); (2) fleet sales, such as sales to large and small businesses, governments, and daily rental car companies; and (3) vehicles used by dealers in their businesses, including courtesy transportation vehicles. Total vehicle sales data includes all sales by joint ventures on a total vehicle basis, not based on our percentage ownership interest 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, which are included in the total vehicle sales we report for China. While total vehicle sales data does not correlate directly to the revenue GM recognizes during a particular period, we believe it is indicative of the underlying demand for GM vehicles. Total vehicle sales data represents management's good faith estimate based on sales reported by GM's dealers, distributors, and joint ventures, commercially available data sources such as registration and insurance data, and internal estimates and forecasts when other data is not available.

The following table summarizes total vehicle sales by geographic region (vehicles in thousands):
 
Three Months Ended

Six Months Ended
 
June 30, 2019

June 30, 2018

June 30, 2019

June 30, 2018
United States
 
 
 
 
 
 
 
Chevrolet – Cars
90

 
126

 
190

 
247

Chevrolet – Trucks
248

 
261

 
446

 
484

Chevrolet – Crossovers
161

 
141

 
316

 
288

Cadillac
40

 
39

 
76

 
76

Buick
55

 
53

 
107

 
110

GMC
153

 
138

 
277

 
269

Total United States
747

 
758

 
1,412

 
1,474

Canada, Mexico and Other
129

 
154

 
239

 
265

Total North America
876

 
912

 
1,651

 
1,739

Asia/Pacific, Middle East and Africa
 
 
 
 
 
 
 
Chevrolet
225

 
230

 
445

 
447

Wuling
251

 
252

 
517

 
541

Buick
198

 
230

 
423

 
502

Baojun
136

 
199

 
305

 
443

Cadillac
68

 
51

 
114

 
108

Other
22

 
27

 
43

 
51

Total Asia/Pacific, Middle East and Africa
900

 
989

 
1,847

 
2,092

South America(a)
163

 
164

 
318

 
331

Total in GM markets
1,939

 
2,065

 
3,816

 
4,162

Total Europe
1

 
1

 
2

 
2

Total Worldwide
1,940

 
2,066

 
3,818

 
4,164

_______
(a)
Primarily Chevrolet.

7





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 the preceding vehicle sales table (vehicles in thousands):    
 
Three Months Ended
 
Six Months Ended
 
June 30, 2019
 
June 30, 2018
 
June 30, 2019
 
June 30, 2018
SAIC General Motors Sales Co., Ltd.
372


411


754


868

SAIC GM Wuling Automobile Co., Ltd. and FAW-GM Light Duty Commercial Vehicle Co., Ltd.
382


447


814


976


 
Three Months Ended
 
Six Months Ended
 
June 30, 2019
 
June 30, 2018
 
June 30, 2019
 
June 30, 2018
Market Share
 
 
 
 
 
 
 
United States – Cars
8.1
%
 
10.3
%
 
8.8
%
 
10.6
%
United States – Trucks(a)
30.1
%
 
33.6
%
 
29.2
%
 
32.8
%
United States – Crossovers(a)
13.7
%
 
11.7
%
 
14.1
%
 
12.9
%
Total United States
16.3
%

16.5
%

16.3
%

16.7
%
Total North America
15.8
%

16.1
%

15.7
%

16.2
%
Total Asia/Pacific, Middle East and Africa
7.8
%

8.4
%

7.9
%

8.7
%
Total South America
15.1
%

14.5
%

15.3
%

15.0
%
Total GM Market
10.7
%

11.1
%

10.6
%

11.3
%
Total Worldwide
8.3
%

8.6
%

8.3
%

8.8
%
 
 
 
 
 
 
 
 
United States fleet sales as a percentage of retail vehicle sales
23.1
%
 
22.1
%
 
24.0
%
 
22.5
%
 
 
 
 
 
 
 
 
North America capacity two shift utilization
98.1
%
 
102.8
%
 
96.8
%
 
100.9
%
________
(a)
Certain industry vehicles have been reclassified between these vehicle segments. GM vehicles were not impacted by this change. The prior period has been recast to reflect the changes.



8





General Motors Company and Subsidiaries

Combining Income Statement Information
(In millions) (Unaudited)
 
Three Months Ended June 30, 2019

Three Months Ended June 30, 2018
 
Automotive

GM Cruise
 
GM Financial

Reclassifications/Eliminations

Combined

Automotive

GM Cruise
 
GM Financial

Eliminations

Combined
Net sales and revenue
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Automotive
$
32,425


$
25

 
$


$
(25
)

$
32,425


$
33,309


$

 
$


$
(34
)

$
33,275

GM Financial



 
3,639


(4
)

3,635





 
3,488


(3
)

3,485

Total net sales and revenue
32,425


25

 
3,639


(29
)

36,060


33,309



 
3,488


(37
)

36,760

Costs and expenses
 
 

 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
Automotive and other cost of sales
28,036


292

 


(1
)

28,327


29,948


157

 


(34
)

30,071

GM Financial interest, operating and other expenses



 
3,145


(1
)

3,144





 
2,997


(1
)

2,996

Automotive and other selling, general and administrative expense
2,055


47

 




2,102


2,219


(3
)
 




2,216

Total costs and expenses
30,091


339

 
3,145


(2
)

33,573


32,167


154

 
2,997


(35
)

35,283

Operating income (loss)
2,334


(314
)
 
494


(27
)

2,487


1,142


(154
)
 
491


(2
)

1,477

Automotive interest expense
195



 




195


161


1

 


(3
)

159

Interest income and other non-operating income, net
320


21

 


23


364


931



 


(1
)

930

Equity income
229



 
42




271


592



 
45




637

Income (loss) before income taxes
$
2,688


$
(293
)
 
$
536


$
(4
)

2,927


$
2,504


$
(155
)
 
$
536


$


2,885

Income tax expense
 
 
 
 
 
 
 

524


 

 
 
 

 

519

Income from continuing operations
 
 
 
 
 
 
 

2,403


 
 
 
 
 
 
 

2,366

Loss from discontinued operations, net of tax
 
 
 
 
 
 
 



 
 
 
 
 
 
 


Net income
 
 
 
 
 
 
 

2,403


 
 
 
 
 
 
 

2,366

Net loss attributable to noncontrolling interests
 
 
 
 
 
 
 

15


 
 
 
 
 
 
 

24

Net income attributable to stockholders
 
 
 
 
 
 
 

$
2,418


 
 
 
 
 
 
 

$
2,390

 



 
 









 
 
 
 
 
 
 
 
 
Net income attributable to common stockholders
 
 
 
 
 
 
 

$
2,381


 
 
 
 
 
 
 

$
2,375

 
Six Months Ended June 30, 2019
 
Six Months Ended June 30, 2018
 
Automotive
 
GM Cruise
 
GM Financial
 
Reclassifications/Eliminations
 
Combined
 
Automotive
 
GM Cruise
 
GM Financial
 
Eliminations
 
Combined
Net sales and revenue
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Automotive
$
63,686


$
50

 
$


$
(50
)

$
63,686


$
66,024


$


$


$
(58
)

$
65,966

GM Financial



 
7,259


(7
)

7,252






6,899


(6
)

6,893

Total net sales and revenue
63,686


50

 
7,259


(57
)

70,938


66,024




6,899


(64
)

72,859

Costs and expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Automotive and other cost of sales
56,071


487

 


(2
)

56,556


60,009


305




(59
)

60,255

GM Financial interest, operating and other expenses



 
6,451


(1
)

6,450






6,017


(7
)

6,010

Automotive and other selling, general and administrative expense
4,135


66

 




4,201


4,573


15






4,588

Total costs and expenses
60,206


553

 
6,451


(3
)

67,207


64,582


320


6,017


(66
)

70,853

Operating income (loss)
3,480


(503
)
 
808


(54
)

3,731


1,442


(320
)

882


2


2,006

Automotive interest expense
379



 


(3
)

376


313


1




(5
)

309

Interest income and other non-operating income, net
1,088


45

 


36


1,169


1,480






(1
)

1,479

Equity income
598



 
87




685


1,188




97




1,285

Income (loss) before income taxes
$
4,787


$
(458
)
 
$
895


$
(15
)

5,209


$
3,797


$
(321
)

$
979


$
6


4,461

Income tax expense
 
 
 
 
 
 
 

661


 
 
 
 
 
 
 

985

Income from continuing operations
 
 
 
 
 
 
 

4,548


 
 
 
 
 
 
 

3,476

Loss from discontinued operations, net of tax
 
 
 
 
 
 
 



 
 
 
 
 
 
 

70

Net income
 
 
 
 
 
 
 

4,548


 
 
 
 
 
 
 

3,406

Net loss attributable to noncontrolling interests
 
 
 
 
 
 
 

27


 
 
 
 
 
 
 

30

Net income attributable to stockholders
 
 
 
 
 
 
 

$
4,575


 
 
 
 
 
 
 

$
3,436

 



 
 














 








Net income attributable to common stockholders



 
 






$
4,500







 






$
3,407


9





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

Six Months Ended

June 30, 2019

June 30, 2018

June 30, 2019

June 30, 2018
Basic earnings per share







Income from continuing operations(a)
$
2,418


$
2,390


$
4,575


$
3,506

Less: cumulative dividends on subsidiary preferred stock
(37
)

(15
)

(75
)

(29
)
Income from continuing operations attributable to common stockholders
2,381


2,375


4,500


3,477

Loss from discontinued operations, net of tax






70

Net income attributable to common stockholders
$
2,381


$
2,375


$
4,500


$
3,407









Weighted-average common shares outstanding
1,420


1,410


1,419


1,409








 



Basic earnings per common share – continuing operations
$
1.68


$
1.68


$
3.17


$
2.47

Basic loss per common share – discontinued operations
$


$


$


$
0.05

Basic earnings per common share
$
1.68


$
1.68


$
3.17


$
2.42

Diluted earnings per share







Income from continuing operations attributable to common stockholders – diluted(a)
$
2,381


$
2,375


$
4,500


$
3,477

Loss from discontinued operations, net of tax – diluted
$


$


$


$
70

Net income attributable to common stockholders – diluted
$
2,381


$
2,375


$
4,500


$
3,407













Weighted-average common shares outstanding – diluted
1,438


1,431


1,437


1,430













Diluted earnings per common share – continuing operations
$
1.66


$
1.66


$
3.13


$
2.43

Diluted loss per common share – discontinued operations
$


$


$


$
0.05

Diluted earnings per common share
$
1.66


$
1.66


$
3.13


$
2.38

Potentially dilutive securities(b)
7


4


7


4

__________
(a)
Net of Net loss attributable to noncontrolling interests.
(b)
Potentially dilutive securities attributable to outstanding stock options and Restricted Stock Units were excluded from the computation of diluted EPS because the securities would have had an antidilutive effect.














10





General Motors Company and Subsidiaries

Combining Balance Sheet Information
(In millions, except per share amounts) (Unaudited)(a)
 
June 30, 2019
 
December 31, 2018
 
Automotive
 
GM Cruise
 
GM Financial
 
Reclassifications/Eliminations
 
Combined
 
Automotive
 
GM Cruise
 
GM Financial
 
Reclassifications/Eliminations
 
Combined
ASSETS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current Assets
 
 
 
 
 </