General Motors Company · NYSE:GM
General Motors — Q4 2016 Earnings Presentation
43 slides from General Motors's earnings presentation, Feb 7, 2017
Slide 1: Q4 2016 Results
GENERAL MOTORS Q4 2016 Results February 7, 2017 == @ onc eas HY @ © FW’ &© GENERAL MOTORS
Slide 2: Forward-Looking Statements
Forward-Looking Statements In this presentation and in reports we subsequenty fle and have previously filed with the SEC on Forms 10.K and 10-Q and file or fumish on Form 8-K and in related comments by our management. we use words Ike “anticipate,” “appears,” ‘approximately, "believe," continue,” “c
Slide 3: GM Is a Compelling Investment Opportunity
GM Is a Compelling Investment Opportunity Earnings|Growth Disciplined Robust Downside 9 Capital Allocation Protection Continued EPS Disciplined Enables growth trajectory reinvestment and sustained expected returning cash to performance shareholders through the cycle GENERAL MOTORS 3
Slide 4: Q4 2016 global deliveries and results summary
Q4 2016 global deliveries up 0.1 million units year-over-year (Y-O-Y), a 3.3% increase. Volume gains primarily in North America and China, offset by reductions in International Operations (excluding China). Q4 2016 market share increased 10 bps Y-O-Y, driven primarily by an increase in North America
Slide 5: 2016 Highlights
2016 Highlights Earn Customers For Life Chevrolet Bolt EV earned top honors with the 2017 Motor Trend Car of the Year Award and Green Car Journal’s Car of the Year. see Chevrolet earned more 2016 J.D. Power Initial Quality awards than any other brand (s) (o) GM recognized by IHS Markit as the compan
Slide 6: 2016 Highlights (Cont.)
2016 Highlights (Cont.) Lead in Technology and Innovation GM's Cruise Automation expanded testing of self-driving car technology to Metro-Detroit. GM partnered with IBM to bring OnStar and Watson together for unparalleled connectivity experience. Maven car-sharing customersin 16 U.S. markets have tr
Slide 7: Consolidated net revenue increased $4.3 billion
Consolidated net revenue increased $4.3 billion. Key drivers include: • Volume - $3.8 billion favorable primarily due to increased wholesales in North America (137,000 units). North American wholesales were driven primarily by new launch products such as the Chevrolet Cruze and Malibu, GMC Acadia an
Slide 8: Q4 2016 EPS-diluted was $1.19 per share
Q4 2016 EPS-diluted was $1.19 per share. Special items consisting of legal related matters related to the ignition switch recall had a net unfavorable after-tax impact of $0.1 billion or $0.09 per share on reported net income to common stockholders during Q4 2016. Q4 2016 EPS-diluted-adjusted was $1
Slide 9: Consolidated Q4 2016 EBIT-adjusted decreased $0.4 billion
Consolidated Q4 2016 EBIT-adjusted decreased $0.4 billion Y-O-Y to $2.4 billion due to unfavorable mix, cost and $0.5 billion impact of foreign currency exchange, partially offset by favorable volume and price. Record CY 2016 consolidated EBIT-adjusted and EBIT-adjusted margins of $12.5 billion and
Slide 10: Q4 2016 EBIT-adjusted key drivers
Q4 2016 consolidated EBIT-adjusted decreased approximately $0.4 billion Y-O-Y. Key drivers included: • Volume – favorable impact from increased wholesales in North America primarily driven by the recently launched Chevrolet Cruze and Malibu, GMC Acadia and Buick Envision, partially offset by a reduc
Slide 11: Strong Q4 2016 results by region
Strong Q4 2016 results with consolidated EBIT-adjusted of $2.4 billion. • GMNA Q4 EBIT-adjusted of $2.6 billion, a decrease of $0.2 billion Y-O-Y. • GME improved Q4 results despite the impact of Brexit, an improvement of $0.1 billion Y-O-Y. • GMIO performance is down $0.1 billion with difficult macr
Slide 12: CY 2016 EBIT-adjusted key drivers
CY 2016 consolidated EBIT-adjusted increased approximately $1.7 billion Y-O-Y. Key drivers included: • Volume – favorable impact from increased wholesales in North America driven by strong retail demand for full-size trucks and SUVs and successful launch vehicles such as the Chevrolet Malibu and Spa
Slide 13: Record CY 2016 EBIT-adjusted by region
Record CY 2016 consolidated EBIT-adjusted of $12.5 billion with record CY 2016 EBIT-adjusted margin of 7.5%. All regions except GMIO posted improved Y-O-Y EBIT-adjusted performance. GMNA achieved CY 2016 record EBIT-adjusted of $12.0 billion and strong EBIT-adjusted margins of 10.1%, demonstrating c
Slide 14: U.S. market share and incentive spending
Market share in the U.S. was 18.4% during Q4, an increase of 110 bps Y-O-Y. • Retail market share increased 60 bps to 17.4% in Q4 2016. GM’s incentive spending as a percent of ATP was near the industry average for Q4 (1.06) and YTD (1.03) and significantly below that of domestic competitors for the
Slide 15: North America Q4 2016 EBIT-adjusted
North America Q4 2016 EBIT-adjusted decreased to $2.6 billion for the quarter, down $0.2 billion Y-O-Y. EBIT-adjusted margins decreased to 8.4% in Q4 2016. • Record CY 2016 GMNA EBIT-adjusted of $12.0 billion delivered an EBIT-adjusted margin of 10.1% and achieved our target of 10%+. • U.S. dealer i
Slide 16: Drivers of North America EBIT-adjusted
Drivers of North America EBIT-adjusted include: • Volume – favorable due to 137,000 unit increase in wholesales primarily driven by the recently launched Chevrolet Cruze and Malibu, GMC Acadia and Buick Envision, partially offset by a reduction of off-lease daily rental car sales. • Mix – unfavorabl
Slide 17: GME EBIT-adjusted improved despite Brexit
GME EBIT-adjusted improved $0.1B Y-O-Y despite the impacts of Brexit. • Revenue was down Y-O-Y primarily due to the foreign currency impacts of Brexit. • Wholesale volume and market share are approximately flat on a Y-O-Y basis. GM Europe has made substantial progress towards its plan to break-even
Slide 18: Drivers of GME's EBIT-adjusted improvement
Drivers of GME’s EBIT-adjusted improvement: • Volume – total volume is flat while products such as the Opel Astra continue to be very well received in their local markets. • Mix – unfavorable primarily due to country and channel mix as a result of Brexit. • Cost – favorable Y-O-Y due to carryover ma
Slide 19: GMIO EBIT-adjusted
GMIO EBIT-adjusted was $0.3 billion, a decrease of $0.1 billion Y-O-Y. • China equity income is relatively flat Y-O-Y at $0.5 billion: • Retail sales are up 33,000 units due to a strong market and the strength of the Baojun, Buick and Cadillac brands. SUVs and luxury vehicles continue to be strong,
Slide 20: Drivers of GMIO's EBIT-adjusted performance
Drivers of GMIO’s EBIT-adjusted performance: • Mix - unfavorable due to selling fewer full-size trucks and SUVs in the Middle East. • Cost – favorable due primarily to fixed cost improvement. • Other – unfavorable FX due to the Egyptian Pound. 20
Slide 21: South America remains challenged
South America remains challenged from macro-economic and political standpoints. • Q4 2016 EBIT-adjusted decreased $0.1 billion due primarily to the impact of foreign currency, primarily the Argentine Peso. • Q4 2016 wholesales were flat Y-O-Y while the industry was down 4%. • Q4 2016 share increased
Slide 22: Drivers of GMSA's EBIT-adjusted performance
Drivers of GMSA’s EBIT-adjusted performance: • Price – favorable impact driven by improved pricing in Brazil and pricing actions in Argentina to offset foreign currency. • Other – unfavorable FX continues to be a headwind for the region while Q4 2016 impact driven primarily by the Argentine Peso. 22
Slide 23: GM Financial expands captive presence
GM Financial continued to expand its captive presence with GM customers and dealers and increased its penetration of GM’s retail sales on a calendar year basis. Net revenue increased to $2.7 billion in Q4 2016 and $9.6 billion for CY 2016, both records, as it continues to execute on its full captive
Slide 24: Adjusted automotive free cash flow
Q4 2016 adjusted automotive free cash flow was $1.7 billion, up $2.0 billion Y-O-Y driven primarily by favorable rental car activity and sales incentive timing. Record CY 2016 adjusted automotive free cash flow of $6.9 billion, up $4.7 billion Y-O-Y driven primarily by higher EBIT-adjusted, lower re
Slide 25: Year-end available liquidity
Year-end available liquidity remains strong at $35.6 billion, up $3.1 billion from year-end 2015. The cash balance of $21.6 billion is in line with GM’s average cash balance commitment of approximately $20 billion for the calendar year. GM expects to continue to follow its capital allocation program
Slide 26: Global pension obligation
• Global pension obligation decreased approximately $2 billion to $93 billion, with an underfunded level of $18 billion, improved $3 billion from December 2015. • U.S. pension obligation decreased approximately $2 billion to $69 billion, with an underfunded level of $7 billion, improved $3 billion f
Slide 27: Summary
Summary GM delivered strong operating performance in 2016: + Record’ EPS-diluted-adjusted of $6.12. + Record! consolidated revenue of $166.4 billion. + Record" consolidated EBIT-adjusted of $12.5 billion and EBIT-adjusted margin of 7.5%. + Record’ adjusted automotive free cash flow of $6.9 billion.
Slide 28: GM Is a Compelling Investment Opportunity
GM Is a Compelling Investment Opportunity Eamings Growth Disciplined Robust Downside 9 Capital Allocation Protection Continued EPS Disciplined Enables growth trajectory reinvestment and sustained expected returning cash to performance shareholders through the cycle GENERAL MOTORS 28
Slide 29: Select Supplemental Financial Information
GENERAL MOTORS Select Supplemental Financial Information GENERAL MOTORS 29
Slide 30: Non-GAAP Measures
Non-GAAP Measures See our Form 10-K and Form 10-Q reports filed with the U.S. Securities and Exchange Commission for a description of certain non-GAAP measures used by GM, including EBIT-adjusted, EPS-diluted-adjusted, ROIC-adjusted and adjusted automotive free cash flow, along with a description of
Slide 31: Global Deliveries
Global Deliveries (000's) Q42015 Q12016 Q22016 Q32016 Q42016 North America 927 799 910 919 1,001 3,613 3,630 US. 783 684 755 773 830 3,082 3,043 Europe 275 316 332 283 276 1,176 1,207 UK. 68 85 69 a 54 312 269 Germany 61 63 74 61 62 248 260 International Operations 1,359 1,132 1,012 1,036 1,408 4,52
Slide 32: Global Market Share
Global Market Share Q4 201 Q1 201 Q2 201 Q3 201 Q4 2016 2015 CY 2016 North America 16.9% 15.9% 15.9% 16.5% 18.0% 16.8% 16.6% US. 17.3% 16.4% 16.3% 17.0% 18.4% 17.3% 17.0% Europe 5.7% 6.2% 6.1% 6.0% 5.6% 6.1% 6.0% UK 10.7% 9.6% 9.1% 9.6% 8.5% 10.2% 9.3% Germany 6.9% 7.2% 7.1% 6.8% 7.0% 6.9% 7.0% Inte
Slide 33: Reconciliation of EBIT-adjusted
Reconciliation of EBIT-adjusted Net income attributable to stockholders Subtract: Automotive interest expense (0.2) (0.1) Automotive interest income - - Gain on extinguishment of debt _— 0.4 Income tax benefit (expense) (0.2) a2 Add Back Special Items’: Ignition switch recall and related legal matte
Slide 34: Aggregate Impact of Special Items on GAAP Reported Earnings
Aggregate Impact of Special Items on GAAP Reported Earnings Q4 2016 Q4 2015 Special Adjusted Special Adjusted Reported items (Non-GAAP)|Reported items (Non-GAAP) Net sales and revenue 39 — 439 7 395 396 Costs and expenses Automotive cost of sales 36.5 = 36.5 33.0 _ 33.0 GM Financial operating and ot
Slide 35: Aggregate Impact of Special Items on GAAP (CY)
Aggregate Impact of Special Items on GAAP Reported Earnings (cont'd) CY 2016 CY 2015 Special Adjusted Special Adjusted Reported Items (Non-GAAP) |Reported Items (Non-GAAP) Net sales and revenue Total net sales and revenues 166.4 _ 166.4 1524 017? 152.5 Costs and expenses Automotive cost of sales 136
Slide 36: Calculation of ROIC-adjusted
Calculation of ROIC-adjusted Four Quarters Ended ($B) Q4 2016 Q4 201 Numerator: EBIT-adjusted 125 10.8 Denominator: Average equity 43.6 37.0 Add: Average automotive debt and interest liabilities (excluding capital leases) 10.0 8.1 Add: Average automotive net pension & OPEB liability 24.5 28.3 Less:
Slide 37: Reconciliation of EBIT-adjusted used in ROIC
Reconciliation of EBIT-adjusted used in Net income attributable to stockholders so4 $97 Income tax expense (benefit) 24 (1.9) Gain on extinguishment of debt = (0.4) Automotive interest expense 06 o4 Automotive interest income (0.2) (02) Adjustments Ignition switch recall and related legal matters(a)
Slide 38: Effective Tax Rate-adjusted
Effective Tax Rate-adjusted Q4 cy ($M) 2016 2015 2016 2015 EBIT-adjusted 2,385 2,765 12,530 10,814 Less: Noncontrolling interests 60 28 159 15 Less: Net interest expense 105 Tax expense 210 (3,168) 2,416 (1,897) Impact of special items’ 3,636 114 4,202 Tax expense-adjusted Poo ae | 2,530 2,305 Effec
Slide 39: Restructuring (not included in special items)
Restructuring (not included in special items) GMNA ($B) 2016 2015 2016 2015 (0.0) (0.2) GME (0.0) (0.0) (0.0) (0.0) GMlo (0.0) (0.0) (0.1) (0.2) GMSA (0.0 0 0. I 03 UAW Labor Modification? (GMNA) CY 2016 restructuring $0.4 billion Expecting CY 2017 restructuringto be ~$0.4 billion 1es $109Min pensio
Slide 40: GM Financial - Key Metrics
GM Financial - Key Metrics (29) Q4 2016 Q4 2015 Earnings Before Tax 0.2 0.2 Total Loan and Lease Originations 10.6 9.8 GM as % of GM Financial Loan and Lease Originations 87% 88% Commercial Finance Receivables’ 10.7 8.2 Retail Finance Receivables 32.9 29.1 Ending Earning Assets? 78.6 STATE Retail Fi
Slide 41: EPS-diluted-adjusted Reconciliation
GENERAL MOTORS EPS-diluted-adjusted Reconciliation Diluted earnings per common share $1.19 $3.92 $6.00 $5.91 Adjustments* 0.15 (0.25) 0.19 1.68 Tax effect on adjustments (0.06) 0.08 (0.07) (0.13) Tax adjustments _ (2.36) _ (2.44) EPS-diluted-adjusted $128 $1.39 | $612 $5.02 | 3s S4-S5 for operating
Slide 42: Guidance Reconciliation
Guidance Reconciliation Year Ending Dec. 31, 2017 Diluted earnings per common share $ 6.00-6.50 Adjustments* Tax effect on adjustments EPS-diluted-adjusted $ 6.00-6.50 Year Ending (SB except where noted) 31, 2017 Automotive net cash provided by operating activities ~$15 Less: expected capital expend
Slide 43: For additional information please visit
For additional information please visit: GENERAL MOTORS http://www.gm.com/investors [email protected] ou | | GM FINANCIAL https://www.gmfinancial.com/investors-information.aspx [email protected] = @ oc eo @ SD ” GENERAL MOTORS These materials are the intellectual property of GM andior
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