10-QPeriod: Q3 FY2009

General Motors Co Quarterly Report for Q3 Ended Sep 30, 2009

Filed April 7, 2010For Securities:GM

Summary

General Motors Company (GM) filed its Form 10-Q for the quarterly period ended September 30, 2009, detailing its emergence from Chapter 11 bankruptcy. The "Successor" entity, General Motors Company, officially began operations on July 10, 2009, acquiring substantially all assets and assuming certain liabilities of the "Old GM." This filing represents the first post-restructuring quarterly report, and as such, direct period-over-period financial comparisons are challenging due to the significant "fresh-start" accounting applied. The company reported a net loss of $858 million for the successor period (July 10 to September 30, 2009), with total net sales and revenue of $25.1 billion for the quarter. Key financial highlights include a substantial increase in cash and cash equivalents, a significant reduction in total liabilities, and the recognition of substantial goodwill and intangible assets due to the fresh-start accounting. The report emphasizes the company's strategic shift to focus on four core North American brands (Chevrolet, Cadillac, Buick, and GMC), rationalization of its brand portfolio, and restructuring of its operational and dealer networks. The company's liquidity position improved significantly due to strong cash generation from operations and financing activities, including substantial government funding received during the restructuring. The company faces ongoing challenges related to market conditions, brand rationalization, and managing its significant debt obligations and pension liabilities.

Financial Highlights

11 data points
Beta

Revenue

$47.12B

-18.5% Gross Margin

Net Income

$109.12B

231.6% Net Margin
Financial Statements
Beta
Revenue$47.12B
Cost of Revenue$55.81B
Gross Profit-$8.70B
R&D Expenses$3.02B
Operating Expenses$63.21B
Operating Income-$16.09B
Net Income$109.12B

Key Highlights

  • 1General Motors Company (Successor) reported a net loss of $858 million for the quarter ended September 30, 2009, on total net sales and revenue of $25.1 billion.
  • 2The company substantially reduced its total liabilities from $176.1 billion at December 31, 2008, to $123.4 billion at September 30, 2009, reflecting the impact of the Chapter 11 restructuring and the "363 Sale."
  • 3Cash and cash equivalents increased significantly from $14.1 billion at December 31, 2008, to $25.1 billion at September 30, 2009, bolstered by government funding and improved operational cash flow.
  • 4Following the "fresh-start" accounting applied due to the bankruptcy emergence, the company recorded $30.6 billion in Goodwill and $15.4 billion in Intangible Assets.
  • 5GM confirmed its strategic focus on four core North American brands: Chevrolet, Cadillac, Buick, and GMC, with plans to phase out Pontiac, Saturn, and HUMMER.
  • 6The company's debt levels were significantly reduced, with long-term debt decreasing from $29.0 billion at December 31, 2008, to $2.7 billion at September 30, 2009.
  • 7Significant restructuring charges and related adjustments were recorded, reflecting ongoing workforce reductions, plant consolidations, and dealer network rationalization.

Frequently Asked Questions

The application of "fresh-start" accounting upon emerging from bankruptcy has materially altered the company's balance sheet. It resulted in the revaluation of assets and liabilities to fair value as of July 10, 2009, leading to the recognition of substantial goodwill ($30.6 billion) and intangible assets ($15.4 billion) which reflect the difference between the fair value of net assets acquired and the fair value of identifiable net assets. This also means that historical financial statements of 'Old GM' are not directly comparable to the 'Successor' entity's statements.

GM has significantly reduced its debt burden. Long-term debt decreased from $29.0 billion at the end of 2008 to $2.7 billion at September 30, 2009. This was primarily achieved through the conversion of debt into equity and the assumption of new, government-backed loans (UST Loans and Canadian Loan) which replaced much of the old debt. The company is also actively making principal repayments on these new loans.

GM's liquidity has significantly improved. As of September 30, 2009, the company reported $25.1 billion in cash, cash equivalents, and marketable securities. This is in addition to substantial restricted cash and escrowed funds of $19.0 billion related to government financing. This strong liquidity position is a result of operational cash generation and significant government financial support during the restructuring process.

GM is focusing its North American operations on four core brands: Chevrolet, Cadillac, Buick, and GMC, aiming to streamline resources and improve product focus. The company is also phasing out the Pontiac, Saturn, and HUMMER brands. Operationally, GM has revised its structure to be more agile, consolidating international operations and streamlining its executive decision-making processes.