01—Abstract
Summary
Summary of the 10-K filed February 7, 2017. Cited figures are marked; the original filing is the authoritative source.
General Motors Company's (GM) 2016 10-K filing reveals a company on an upward trajectory, driven by strong performance in its North American (GMNA) segment, which saw significant sales and EBIT-adjusted margin growth.
The company's strategic focus on technology and innovation, including investments in autonomous vehicles and ride-sharing services like Maven and Lyft, highlights a forward-looking approach to mobility. Financially, GM demonstrated robust profitability, with a substantial increase in net income and earnings per share compared to the previous year, partly due to a favorable reversal of deferred tax asset valuation allowances in Europe.
The company also continued its capital allocation program, returning value to shareholders through share repurchases and dividends. However, the company faces ongoing challenges, including increased R&D spending for future technologies, potential impacts from Brexit on its European operations, and the persistent complexities of global regulatory environments concerning emissions and fuel economy standards.
02—Key points
Key Highlights
- General Motors (GM) reported a strong financial performance in 2016, with increased net sales and revenue, driven primarily by the North America segment (GMNA).
- EBIT-adjusted margins in GMNA reached 10.1%, with the company expecting to sustain this level in 2017.
- GM Financial experienced significant revenue growth (48.1% year-over-year), driven by an expanding lease portfolio.
- The company continued its strategic investments in future mobility, including the acquisition of Cruise Automation for autonomous vehicle technology and a significant investment in Lyft.
- GM continued its share repurchase program, returning substantial capital to shareholders, with over $6 billion in share repurchases completed by early February 2017.
- The company faced challenges related to the Brexit vote, which resulted in a $0.3 billion unfavorable impact due to currency fluctuations.
- Research and development expenses increased to $8.1 billion in 2016, reflecting GM's commitment to innovation in areas like electrification and autonomous driving.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2016, General Motors Co kept $0.06.
- Revenue$149.18B100.0%
- Cost of revenue−$121.78B81.6%
- Gross profit$27.40B18.4%
- Operating costs−$18.71B12.5%
- Operating income$8.69B5.8%
- Interest, other & tax$741.0M0.5%
- Net income$9.43B6.3%
Where FY2016 revenue went
$149.18B- Cost of revenue: $121.78B, 82% of revenue
- Operating income: $8.69B, 5.8% of revenue
- SG&A: $10.35B, 6.9% of revenue
- Other operating costs: $8.37B, 5.6% of revenue
Kept 5.8% as operating incomeOperating income $8.69B · 5.8%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2016filed February 7, 2017Financial Statements
FY2016 against FY2015
| Line item | FY2016FY2015 | Change |
|---|---|---|
| Revenue | $149.18B$135.72B | +9.9% |
| Cost of Revenue | $121.78B$113.00B | +7.8% |
| Gross Profit | $27.40B$22.73B | +20.5% |
| SG&A Expenses | $10.35B$11.89B | −13.0% |
| Operating Expenses | $139.22B$130.19B | +6.9% |
| Operating Income | $8.69B$5.54B | +56.8% |
| Interest Expense | $2.54B$1.88B | +34.6% |
| Net Income | $9.43B$9.62B | −2.0% |
| EPS (Basic) | $6.12$6.11 | +0.2% |
| EPS (Diluted) | $6.00$5.91 | +1.5% |
| Shares Outstanding (Basic) | 1.54B1.59B | −2.9% |
| Shares Outstanding (Diluted) | 1.57B1.64B | −4.3% |
05—Questions
Frequently Asked Questions
What was General Motors' overall financial performance in 2016?
General Motors reported a strong financial performance in 2016. Total net sales and revenue increased by 9.2% to $166.4 billion. Net income attributable to stockholders was $9.4 billion, a slight decrease from $9.7 billion in 2015, but diluted earnings per share rose to $6.00 from $5.91 in the prior year. The company also saw robust EBIT-adjusted margins, particularly in its North American segment.
How did GM's different geographic segments perform?
The North America segment (GMNA) was a key driver of performance, with a 11.6% increase in net sales and revenue and maintained EBIT-adjusted margins of 10.1%. The Europe segment (GME) saw flat revenue, but an improvement in EBIT-adjusted loss. The International Operations (GMIO) segment experienced a 6.9% decrease in net sales and revenue, mainly due to weaker economies and currency fluctuations in regions outside China, although its China joint ventures contributed significantly to equity income. The South America segment (GMSA) continued to face challenges due to weak economic conditions, resulting in a 7.6% decrease in net sales and revenue.
What are GM's key strategic initiatives and investments for the future?
GM is heavily investing in future mobility trends. This includes significant spending on research and development ($8.1 billion in 2016) for areas like electrification, autonomous vehicles, and connected car technology. Notably, GM acquired Cruise Automation to accelerate its autonomous vehicle development and expanded its ride-sharing initiatives with Maven and an investment in Lyft. The company also aims to grow its Cadillac brand, particularly in China, and expand its captive finance arm, GM Financial.
What are the major risks and challenges facing General Motors?
GM faces several risks, including intense competition in the global automotive market, potential disruptions in its global supply chain, and the significant costs associated with extensive regulations regarding fuel economy and emissions. The company is also exposed to geopolitical and economic risks in international markets, such as the impact of Brexit on its European operations and economic challenges in South America and parts of Asia. Furthermore, GM faces ongoing legal and regulatory scrutiny, particularly related to past recalls, and must manage the complexities of its joint venture operations, especially in China.
06—Continue