10-KPeriod: FY2017

General Motors Co Annual Report, Year Ended Dec 31, 2017

Filed February 6, 2018For Securities:GM

Summary

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% core EBIT-adjusted margins.

Financial Highlights

53 data points
Beta

Revenue

$145.59B

20.2% Gross Margin

Net Income

-$3.86B

-2.7% Net Margin

EPS (Diluted)

$-2.60

Total Assets

$212.48B

Cash & Equivalents

$15.51B

Free Cash Flow

$8.88B

Financial Statements
Beta
Revenue$145.59B
Cost of Revenue$116.23B
Gross Profit$29.36B
SG&A Expenses$9.57B
Operating Expenses$136.93B
Operating Income$8.66B
Interest Expense$3.14B
Net Income-$3.86B
EPS (Basic)$-2.65
EPS (Diluted)$-2.60
Shares Outstanding (Basic)1.47B
Shares Outstanding (Diluted)1.49B

Key Highlights

  • 1GM completed the sale of its European Opel/Vauxhall businesses to PSA Group, presenting these as discontinued operations.
  • 2The company reorganized its reporting segments, combining GM South America and GM International Operations into a single GM International (GMI) segment.
  • 3Total net sales and revenue decreased by 2.4% year-over-year, largely due to lower wholesale volumes in the North American segment.
  • 4GM North America (GMNA) maintained strong EBIT-adjusted margins of 10.7%, with expectations to sustain 10% in 2018.
  • 5GM Financial showed substantial growth, with revenue increasing 35.3% and adjusted earnings before income taxes increasing 56.7% year-over-year.
  • 6The company's investment in autonomous technology and future mobility solutions continued, with testing of autonomous vehicles on public roads.
  • 7GM returned $6.7 billion to shareholders through dividends and share repurchases in 2017.

Frequently Asked Questions

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.

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.

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.

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.