01—Abstract
Summary
Summary of the 10-K filed February 6, 2018. Cited figures are marked; the original filing is the authoritative source.
General Motors Co. (GM) reported its 2017 full-year financial results, highlighted by a significant strategic divestiture: the sale of its Opel and Vauxhall businesses in Europe.
This transaction, which closed in stages during 2017, was presented as a discontinued operation, impacting the reported financial statements. The company also refined its segment reporting, combining GM South America and GM International Operations into a single GM International (GMI) segment. Operationally, GM experienced a slight decrease in total net sales and revenue compared to 2016, driven primarily by lower wholesale volumes in its North America segment.
However, the company maintained strong EBIT-adjusted margins in GMNA. GM Financial continued its growth trajectory, showing a significant increase in revenue and earnings before income taxes-adjusted, driven by expanded leasing and prime lending programs. Looking ahead, GM remains focused on its long-term strategy of transforming into a leader in future mobility, emphasizing zero crashes, zero emissions, and zero congestion, while also aiming for 10%a core EBIT-adjusted margins.
02—Key points
Key Highlights
- GM completed the sale of its European Opel/Vauxhall businesses to PSA Group, presenting these as discontinued operations.
- The company reorganized its reporting segments, combining GM South America and GM International Operations into a single GM International (GMI) segment.
- Total net sales and revenue decreased by 2.4% year-over-year, largely due to lower wholesale volumes in the North American segment.
- GM North America (GMNA) maintained strong EBIT-adjusted margins of 10.7%, with expectations to sustain 10% in 2018.
- GM Financial showed substantial growth, with revenue increasing 35.3% and adjusted earnings before income taxes increasing 56.7% year-over-year.
- The company's investment in autonomous technology and future mobility solutions continued, with testing of autonomous vehicles on public roads.
- GM returned $6.7 billion to shareholders through dividends and share repurchases in 2017.
03—One dollar
Follow one dollar
For each $1.00 of revenue in FY2017, General Motors Co lost $0.03.
- Revenue$145.59B100.0%
- Cost of revenue−$116.23B79.8%
- Gross profit$29.36B20.2%
- Operating costs−$20.70B14.2%
- Operating income$8.66B5.9%
- Interest, other & tax−$12.53B8.6%
- Net income−$3.86B2.7%
Where FY2017 revenue went
$145.59B- Cost of revenue: $116.23B, 80% of revenue
- Operating income: $8.66B, 5.9% of revenue
- SG&A: $9.57B, 6.6% of revenue
- Other operating costs: $11.13B, 7.6% of revenue
Kept 5.9% as operating incomeOperating income $8.66B · 5.9%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2017filed February 6, 2018Financial Statements
FY2017 against FY2016
| Line item | FY2017FY2016 | Change |
|---|---|---|
| Revenue | $145.59B$149.18B | −2.4% |
| Cost of Revenue | $116.23B$121.78B | −4.6% |
| Gross Profit | $29.36B$27.40B | +7.1% |
| SG&A Expenses | $9.57B$10.35B | −7.5% |
| Operating Expenses | $136.93B$139.22B | −1.6% |
| Operating Income | $8.66B$8.69B | −0.3% |
| Interest Expense | $3.14B$2.54B | +23.9% |
| Net Income | -$3.86B$9.43B | −141.0% |
| EPS (Basic) | $-2.65$6.12 | −143.3% |
| EPS (Diluted) | $-2.60$6.00 | −143.3% |
| Shares Outstanding (Basic) | 1.47B1.54B | −4.9% |
| Shares Outstanding (Diluted) | 1.49B1.57B | −5.0% |
05—Questions
Frequently Asked Questions
What was the financial impact of selling the European business (Opel/Vauxhall)?
The sale of the European business was a significant event, resulting in a total charge of $6.2 billion, net of tax. This included $3.9 billion recorded in discontinued operations and $2.3 billion related to income tax expense, largely due to the inability to realize deferred tax assets and pension-related costs.
How did GM's sales performance compare to the previous year?
Total net sales and revenue decreased by 2.4% to $145.6 billion in 2017 from $149.2 billion in 2016. This decline was primarily driven by a 4.7% decrease in automotive net sales and revenue, mainly due to lower wholesale volumes in the GM North America segment.
What is the outlook for GM Financial?
GM Financial demonstrated strong performance, with revenue up 35.3% and adjusted earnings before income taxes up 56.7% year-over-year. The company expects its pre-tax income to double from 2014 earnings once full captive penetration levels are achieved, driven by expanded leasing and prime lending programs.
What are GM's strategic priorities moving forward?
GM's strategic plan is focused on transforming into the world's most valued automotive company, emphasizing a vision of 'zero crashes, zero emissions, zero congestion.' Key initiatives include leading in technology and innovation (electrification, autonomous vehicles), growing its brands, making strategic market and product decisions, and building profitable adjacent businesses with a target of 10% core EBIT-adjusted margins.
06—Continue