10-QPeriod: Q2 FY2010

General Motors Co Quarterly Report for Q2 Ended Jun 30, 2010

Filed August 16, 2010For Securities:GM

Summary

General Motors Company (GM) reported strong financial results for the second quarter of 2010, a significant turnaround from the previous year. Net sales and revenue reached $33.17 billion, a substantial increase from $23.05 billion in the same period of 2009. This growth was driven by higher wholesale volumes across all segments, particularly in North America, and a favorable vehicle mix. The company also benefited from favorable pricing and reduced sales allowances. GM reported an operating income of $1.75 billion, a dramatic improvement from an operating loss of $9.44 billion in the prior year, indicating effective cost management and recovery in demand. Financially, GM demonstrated improved liquidity, with cash and cash equivalents and marketable securities totaling $31.5 billion at June 30, 2010. Debt levels also decreased, reflecting successful repayment of certain government-backed loans. The company's focus remains on product portfolio improvement, global market expansion, and maintaining a competitive cost structure to drive long-term profitability.

Financial Highlights

19 data points
Beta

Revenue

$33.17B

13.8% Gross Margin

Net Income

$1.54B

4.6% Net Margin

EPS (Diluted)

$0.85

Free Cash Flow

$5.70B

Financial Statements
Beta
Revenue$33.17B
Cost of Revenue$28.61B
Gross Profit$4.57B
SG&A Expenses$2.62B
Operating Expenses$31.27B
Operating Income$1.90B
Interest Expense$250.00M
Net Income$1.54B
EPS (Basic)$0.89
EPS (Diluted)$0.85
Shares Outstanding (Basic)1.50B
Shares Outstanding (Diluted)1.57B

Key Highlights

  • 1Net sales and revenue increased by 43.9% year-over-year to $33.17 billion for Q2 2010.
  • 2Operating income improved significantly to $1.75 billion, compared to an operating loss of $9.44 billion in Q2 2009.
  • 3Net income attributable to common stockholders was $1.33 billion ($2.67 per diluted share), a substantial improvement from a net loss of $12.91 billion ($21.12 per diluted share) in Q2 2009.
  • 4Total liquidity (cash, cash equivalents, and marketable securities) stood at $31.5 billion, providing strong financial flexibility.
  • 5The company repaid significant government-backed loans, including the full outstanding amount of UST Loans ($4.7 billion) and Canadian Loan ($1.1 billion) in April 2010.
  • 6GM continued its dealer network consolidation, reducing the number of U.S. dealers by approximately 700 in the first half of 2010.
  • 7The company announced its definitive agreement to acquire AmeriCredit Corp. for approximately $3.5 billion in cash, expected to close in Q4 2010, to enhance financing options.

Frequently Asked Questions

General Motors reported a significant improvement in its financial performance. Net sales and revenue increased by 43.9% year-over-year to $33.17 billion. The company swung from a substantial operating loss in Q2 2009 to an operating income of $1.75 billion in Q2 2010. Net income attributable to common stockholders was $1.33 billion, a dramatic turnaround from a net loss of $12.91 billion in the prior year's quarter.

GM improved its liquidity position, ending Q2 2010 with $31.5 billion in cash, cash equivalents, and marketable securities. The company also made significant progress in debt reduction by fully repaying the outstanding UST Loans ($4.7 billion) and Canadian Loan ($1.1 billion) in April 2010, ahead of their maturities. These actions, along with other debt paydowns, led to a decrease in total debt.

GM's strategic initiatives include delivering a portfolio of high-quality vehicles, expanding sales globally by targeting developed and emerging markets, improving revenue realization and maintaining a competitive cost structure, and maintaining a strong balance sheet. Specific actions mentioned include the ongoing restructuring of Opel/Vauxhall operations, the planned acquisition of AmeriCredit to enhance financing capabilities, and focusing on the growth potential of the Chinese market.

GM acknowledged that its disclosure controls and procedures and internal controls over financial reporting were not effective at the time, citing a material weakness in the period-end financial reporting process. This was attributed to challenges in ensuring timely and accurate accounting estimates and reconciliations, partly due to the complexity of fresh-start adjustments. Regarding legal proceedings, GM was involved in several class action lawsuits, including those related to OnStar equipment and unintended acceleration claims, and noted new litigation concerning the proposed AmeriCredit acquisition.