Basis of Presentation This Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) should be read in conjunction with the accompanying condensed consolidated financial statements and the notes thereto, and the audited consolidated financial statements and notes thereto included in our 2020 Form 10-K. Forward -looking statements in this MD&A are not guarantees of future performance and may involve risks and uncertainties that could cause actual results to differ materially from those projected. Refer to the "Forward-Looking Statements" section of this MD&A and Part 1, Item 1A. Risk Factors of our 2020 Form 10-K for a discussion of these risks and uncertainties. Except for per share amounts or as otherwise specified, dollar amounts presented within tables are stated in millions. Non-GAAP Measures Our non-GAAP measures include: EBIT-adjusted, presented net of noncontrolling interests; EBT-adjusted for our GM Financial segment; EPS-diluted-adjusted; effective tax rate-adjusted (ETR-adjusted); return on invested capital-adjusted (ROIC-adjusted) and adjusted automotive free cash flow. Our calculation of these non-GAAP measures may not be comparable to similarly titled measures of other companies due to potential differences between companies in the method of calculation. As a result, the use of these non-GAAP measures has limitations and should not be considered superior to, in isolation from, or as a substitute for, relatedU.S. GAAP measures. These non-GAAP measures allow management and investors to view operating trends, perform analytical comparisons and benchmark performance between periods and among geographic regions to understand operating performance without regard to items we do not consider a component of our core operating performance. Furthermore, these non-GAAP measures allow investors the opportunity to measure and monitor our performance against our externally communicated targets and evaluate the investment decisions being made by management to improve ROIC-adjusted. Management uses these measures in its financial, investment and operational decision-making processes, for internal reporting and as part of its forecasting and budgeting processes. Further, our Board of Directors uses certain of these and other measures as key metrics to determine management performance under our performance-based compensation plans. For these reasons, we believe these non-GAAP measures are useful for our investors. EBIT-adjusted EBIT-adjusted is presented net of noncontrolling interests and is used by management and can be used by investors to review our consolidated operating results because it excludes automotive interest income, automotive interest expense and income taxes as well as certain additional adjustments that are not considered part of our core operations. Examples of adjustments to EBIT include, but are not limited to, impairment charges on long-lived assets and other exit costs resulting from strategic shifts in our operations or discrete market and business conditions; costs arising from the ignition switch recall and related legal matters; and certain currency devaluations associated with hyperinflationary economies. For EBIT-adjusted and our other non-GAAP measures, once we have made an adjustment in the current period for an item, we will also adjust the related non-GAAP measure in any future periods in which there is an impact from the item. Our corresponding measure for our GM Financial segment is EBT-adjusted because interest income and interest expense are part of operating results when assessing and measuring the operational and financial performance of the segment. EPS-diluted-adjusted EPS-diluted-adjusted is used by management and can be used by investors to review our consolidated diluted EPS results on a consistent basis. EPS-diluted-adjusted is calculated as net income attributable to common stockholders-diluted less adjustments noted above for EBIT-adjusted and certain income tax adjustments divided by weighted-average common shares outstanding-diluted. Examples of income tax adjustments include the establishment or reversal of significant deferred tax asset valuation allowances. ETR-adjusted ETR-adjusted is used by management and can be used by investors to review the consolidated effective tax rate for our core operations on a consistent basis. ETR-adjusted is calculated as Income tax expense less the income tax related to the adjustments noted above for EBIT-adjusted and the income tax adjustments noted above for EPS-diluted-adjusted divided by Income before income taxes less adjustments. When we provide an expected adjusted effective tax rate, we do not provide an expected effective tax rate because theU.S. GAAP measure may include significant adjustments that are difficult to predict. ROIC-adjusted ROIC-adjusted is used by management and can be used by investors to review our investment and capital allocation decisions. We define ROIC-adjusted as EBIT-adjusted for the trailing four quarters divided by ROIC-adjusted average net assets, which is considered to be the average equity balances adjusted for average automotive debt and interest liabilities, exclusive of finance leases; average automotive net pension and OPEB liabilities; and average automotive net income tax assets during the same period. 24
--------------------------------------------------------------------------------
Table of Contents
GENERAL MOTORS COMPANY AND SUBSIDIARIES Adjusted automotive free cash flow Adjusted automotive free cash flow is used by management and can be used by investors to review the liquidity of our automotive operations and to measure and monitor our performance against our capital allocation program and evaluate our automotive liquidity against the substantial cash requirements of our automotive operations. We measure adjusted automotive free cash flow as automotive operating cash flow from operations less capital expenditures adjusted for management actions. Management actions can include voluntary events such as discretionary contributions to employee benefit plans or nonrecurring specific events such as a closure of a facility that are considered special for EBIT-adjusted purposes. Refer to the "Liquidity and Capital Resources" section of this MD&A for additional information.
The following table reconciles Net income (loss) attributable to stockholders
under
Three Months Ended March 31, December 31, September 30, June 30, 2021 2020 2020 2019 2020 2019 2020
2019
Net income (loss) attributable to stockholders$ 3,022 $ 294 $ 2,846
357 642 (163) 887 271 (112)
524
Automotive interest expense 250 193 275 200 327 206 303
195
Automotive interest income (32) (83) (46) (96) (51) (129) (61) (106) Adjustments GMI restructuring(a) - 489 26 - 76 - 92 - Cadillac dealer strategy(b) - - 99 - - - -
-
Ignition switch recall and related legal matters(c) - - (130) - - - -
-
Transformation activities(d) - - - 194 - 390 - 361 GMBrazil indirect tax recoveries(e) - - - - - (123) - (380) FAW-GM divestiture(f) - - - 164 - - - - Total adjustments - 489 (5) 358 76 267 92 (19) EBIT (loss)-adjusted$ 4,417 $ 1,250 $ 3,712
$ 105 $ 5,284 $ 2,966 $ (536) $ 3,012 _________ (a)These adjustments were excluded because of a strategic decision to rationalize our core operations by exiting or significantly reducing our presence in various international markets to focus resources on opportunities expected to deliver higher returns. These adjustments primarily consist of asset impairments, dealer restructurings, employee separation charges and sales allowances inAustralia ,New Zealand andThailand in the three months endedMarch 31, 2020 , employee separation charges in the three months endedDecember 31, 2020 , supplier claims in the three months endedSeptember 30, 2020 and inventory provisions in the three months endedJune 30, 2020 . (b)This adjustment was excluded because it relates to strategic activities to transition certainCadillac dealers from the network as part ofCadillac's electric vehicle strategy. (c)This adjustment was excluded because of the unique events associated with the ignition switch recall, which included various investigations, inquiries and complaints from constituents. (d)These adjustments were excluded because of a strategic decision to accelerate our transformation for the future to strengthen our core business, capitalize on the future of personal mobility and drive significant cost efficiencies. The adjustments primarily consist of accelerated depreciation and employee separation charges in the three months endedDecember 31, 2019 , supplier-related charges and pension curtailment and other charges in the three months endedSeptember 30, 2019 and supplier-related charges and accelerated depreciation in the three months endedJune 30, 2019 . (e)These adjustments were excluded because of the unique events associated with decisions rendered by theSuperior Judicial Court of Brazil resulting in retrospective recoveries of indirect taxes. (f)This adjustment was excluded because we divested our joint ventureFAW-GM Light Duty Commercial Vehicle Co., Ltd. (FAW-GM), as a result of a strategic decision by both shareholders, allowing us to focus our resources on opportunities expected to deliver higher returns. 25
--------------------------------------------------------------------------------
Table of Contents
GENERAL MOTORS COMPANY AND SUBSIDIARIES The following table reconciles diluted earnings per common share underU.S. GAAP to EPS-diluted-adjusted: Three Months Ended March 31, 2021 March 31, 2020 Amount Per Share Amount Per Share
Diluted earnings per common share
Adjustments(a) - - 489 0.34 Tax effect on adjustment(b) - -
(73) (0.05) Tax adjustment(c) 316 0.22 236 0.16 EPS-diluted-adjusted$ 3,292 $ 2.25 $ 899 $ 0.62 ________ (a)Refer to the reconciliation of Net income (loss) attributable to stockholders underU.S. GAAP to EBIT (loss)-adjusted within this section of MD&A for the details of each individual adjustment. (b)The tax effect of each adjustment is determined based on the tax laws and valuation allowance status of the jurisdiction to which the adjustment relates. (c)These adjustments consist of tax expense related to the establishment of a valuation allowance against deferred tax assets that are considered no longer realizable for Cruise in the three months endedMarch 31, 2021 and forGM inAustralia and New Zealand for the three months endedMarch 31, 2020 . These adjustments were excluded because significant impacts of valuation allowances are not considered part of our core operations.
The following table reconciles our effective tax rate under
Three Months Ended March 31, 2021 March 31, 2020 Income before Income before Income tax Effective tax income Income tax Effective tax income taxes expense rate taxes expense rate Effective tax rate$ 4,191 $ 1,177 28.1 %$ 643 $ 357 55.5 % Adjustments(a) - - 489 73 Tax adjustment(b) (316) (236) ETR-adjusted$ 4,191 $ 861 20.5 %$ 1,132 $ 194 17.1 % ________ (a)Refer to the reconciliation of Net income (loss) attributable to stockholders underU.S. GAAP to EBIT (loss)-adjusted within this section of MD&A for adjustment details. The tax effect of each adjustment is determined based on the tax laws and valuation allowance status of the jurisdiction to which the adjustment relates. (b)Refer to the reconciliation of diluted earnings per common share underU.S. GAAP to EPS-diluted-adjusted within this section of MD&A for adjustment details. We define return on equity (ROE) as Net income (loss) attributable to stockholders for the trailing four quarters divided by average equity for the same period. Management uses average equity to provide comparable amounts in the calculation of ROE. The following table summarizes the calculation of ROE (dollars in billions):
Four Quarters Ended
March 31, 2021 March 31, 2020 Net income (loss) attributable to stockholders $ 9.2$ 4.9 Average equity(a)$ 45.7 $ 43.6 ROE 20.0 % 11.2 % __________
(a)Includes equity of noncontrolling interests where the corresponding earnings (loss) are included in Net income (loss) attributable to stockholders.
26
--------------------------------------------------------------------------------
Table of Contents
GENERAL MOTORS COMPANY AND SUBSIDIARIES
The following table summarizes the calculation of ROIC-adjusted (dollars in billions):
Four Quarters Ended
March 31, 2021 March 31, 2020 EBIT (loss)-adjusted(a)$ 12.9 $ 7.3 Average equity(b)$ 45.7 $ 43.6
Add: Average automotive debt and interest liabilities (excluding finance leases)
24.7 18.8 Add: Average automotive net pension & OPEB liability 17.8 16.9 Less: Average automotive and other net income tax asset (23.8) (23.7) ROIC-adjusted average net assets$ 64.4 $ 55.6 ROIC-adjusted 20.0 % 13.2 % __________ (a)Refer to the reconciliation of Net income (loss) attributable to stockholders underU.S. GAAP to EBIT (loss)-adjusted within this section of MD&A. (b)Includes equity of noncontrolling interests where the corresponding earnings (loss) are included in EBIT (loss)-adjusted. Overview Our vision for the future is a world with zero crashes, zero emissions and zero congestion, which guides our growth-focused investment in electrification, self-driving vehicles and new products and services. The all-electric future we are building integrates our technology, scale and manufacturing expertise to drive growth, profitability and deliver world-class customer interactions. Our strategy includes product leadership in electric vehicles and autonomous vehicles, continued leadership in trucks and SUVs, and developing and monetizing new software and services. We will execute our strategy with a diverse team and a steadfast commitment to good citizenship through sustainable operations and a leading health and safety culture. The COVID-19 pandemic and government actions and measures taken to prevent its spread continue to affect our operations. Government-imposed restrictions on businesses, operations and travel and the related economic uncertainty have impacted demand for our vehicles in most of our global markets. The extent of COVID-19's impact on our future operations, liquidity and the demand for our products will depend upon, among other things, the duration and severity of the outbreak or subsequent outbreaks, related government responses, such as required physical distancing or restrictions on business operations and travel, the pace of recovery of economic activity and the impact to consumers, the effectiveness of available vaccines and any potential supply disruptions, all of which are uncertain and difficult to predict in light of the rapidly evolving landscape. Refer to Part I, Item 1A. Risk Factors of our 2020 Form 10-K for a full discussion of the risks associated with the COVID-19 pandemic. The automotive industry andGM are currently experiencing a global semiconductor supply shortage. The supply shortage has impacted multiple suppliers that incorporate semiconductors into the parts they supply to us. We expect the semiconductor supply shortage will have a temporary impact on our business. We do not expect this shortage to impact our growth and electric vehicle initiatives. We will continue prioritizing our most popular and in-demand vehicles, including our highly profitable full-size trucks and full-size SUVs, and electric vehicles. Refer to Part I, Item 1A. Risk Factors of our 2020 Form 10-K for further discussion of these risks. For the year endingDecember 31, 2021 , we expect EPS-diluted of between$4.28 and$5.03 , EPS-diluted-adjusted of between$4.50 and$5.25 , Net income attributable to stockholders of between$6.8 billion and$7.6 billion and EBIT-adjusted at the high end of a$10.0 billion and$11.0 billion range. For the six months endingJune 30, 2021 , we expect Net income attributable to stockholders of approximately$3.5 billion and EBIT-adjusted of approximately$5.5 billion . We expect the six months endingDecember 31, 2021 to be slightly better than the six months endingJune 30, 2021 . Both the six months endingJune 30, 2021 and year endingDecember 31, 2021 guidance are inclusive of the impact of the semiconductor supply shortage. We estimate the temporary semiconductor supply shortage to have a net EBIT-adjusted impact of approximately$1.5 billion to$2.0 billion in the year endingDecember 31, 2021 . We do not consider the potential impact of future adjustments on our expected financial results. 27
--------------------------------------------------------------------------------
Table of Contents
GENERAL MOTORS COMPANY AND SUBSIDIARIES
The following table reconciles expected Net income attributable to stockholders
under
Six Months Ending June
Year Ending
30, 2021 2021 Net income attributable to stockholders $ ~3.5$ 6.8-7.6 Income tax expense ~1.5 2.2-2.4 Automotive interest expense, net ~0.5 1.0 EBIT-adjusted(a) $ ~5.5$ 10.0-11.0 ________
(a)We do not consider the potential future impact of adjustments on our expected financial results.
The following table reconciles expected EPS-diluted underU.S. GAAP to expected EPS-diluted-adjusted: Year EndingDecember 31, 2021 Diluted earnings per common share$ 4.28-5.03 Adjustment - Cruise deferred income tax valuation allowance 0.22 EPS-diluted-adjusted(a)$ 4.50-5.25 ________
(a)We do not consider the potential future impact of adjustments on our expected financial results.
We also face continuing market, operating and regulatory challenges in several countries across the globe due to, among other factors, weak economic conditions, competitive pressures, our product portfolio offerings, heightened emissions standards, labor disruptions, foreign exchange volatility, rising material prices, evolving trade policy and political uncertainty. Refer to Part I, Item 1A. Risk Factors of our 2020 Form 10-K for a discussion of these challenges. As we continue to assess our performance and the needs of our evolving business, additional restructuring and rationalization actions could be required. These actions could give rise to future asset impairments or other charges, which may have a material impact on our operating results. GMNA Industry sales inNorth America were 4.7 million units in the three months endedMarch 31, 2021 , representing an increase of 9.5% compared to the corresponding period in 2020.U.S. industry sales were 4.0 million units in the three months endedMarch 31, 2021 , representing an increase of 10.9% compared to the corresponding period in 2020. Our total vehicle sales in theU.S. , our largest market inNorth America , were 0.6 million units for market share of 16.2% in the three months endedMarch 31, 2021 , representing a decrease of 1.1 percentage points compared to the corresponding period in 2020. We continue to lead theU.S. industry in market share. We expect to sustain relatively strong EBIT-adjusted margins in 2021 on the continued strength of favorable vehicle pricing and strongU.S. industry light vehicle sales, partially offset by higher costs associated with commodities and raw materials. Our outlook is dependent on the economic impact of the COVID-19 pandemic and the global shortage of semiconductors, both of which continue to evolve. As a result of the shortage of semiconductors, we have experienced interruptions to our planned production schedules and temporarily suspended certain manufacturing sites to prioritize production of our most popular and in-demand products, including our highly profitable full-size trucks and full-size SUVs. Additionally, we have been manufacturing vehicles, without the impacted components, representing an inventory carrying value of approximately$1.2 billion atMarch 31, 2021 . We will hold these vehicles in our inventory until they are completed and sold to our dealers. GMI Industry sales inChina were 6.7 million units in the three months endedMarch 31, 2021 , representing an increase of 68.8% compared to the corresponding period in 2020, which was adversely impacted by the COVID-19 pandemic. Our total vehicle sales inChina were 0.8 million units for market share of 11.7% in the three months endedMarch 31, 2021 , which was relatively flat compared to the corresponding period in 2020. The ongoing global semiconductor supply shortage, macro-economic impact of COVID-19 and geopolitical tensions may place pressure onChina's automotive industry. Our Automotive China JVs generated equity income of$0.3 billion in the three months endedMarch 31, 2021 . Although price competition, higher costs associated with commodities and raw materials and a more challenging regulatory environment related to emissions, fuel consumption and new energy vehicles will place pressure on our operations inChina , we will continue to build on our strong brands, network, and partnerships inChina as well as drive improvements in vehicle mix and cost.
Outside of
28
--------------------------------------------------------------------------------
Table of Contents
GENERAL MOTORS COMPANY AND SUBSIDIARIES
share of 3.7% in the three months ended
Cruise We are actively testing our autonomous vehicles in the
In the three months endedMarch 31, 2021 ,Cruise Holdings issued Cruise Class G Preferred Shares in exchange for$2.5 billion from Microsoft and other investors, including$1.0 billion fromGeneral Motors Holdings LLC . All proceeds related to the Cruise Class G Preferred Shares are designated exclusively for working capital and general corporate purposes ofCruise Holdings . In addition,Cruise Holdings ,General Motors Holdings LLC and Microsoft entered into a long-term strategic relationship to accelerate the commercialization of self-driving vehicles with Microsoft being the preferred public cloud provider. Refer to Note 16 to our condensed consolidated financial statements for further details. Vehicle Sales The principal factors that determine consumer vehicle preferences in the markets in which we operate include overall vehicle design, price, quality, available options, safety, reliability, fuel economy and functionality. Market leadership in individual countries in which we compete varies widely. We present both wholesale and total vehicle sales data to assist in the analysis of our revenue and our market share. Wholesale vehicle sales data consists of sales toGM's dealers and distributors as well as sales to theU.S. Government and excludes vehicles sold by our joint ventures. Wholesale vehicle sales data correlates to our revenue recognized from the sale of vehicles, which is the largest component of Automotive net sales and revenue. In the three months endedMarch 31, 2021 , 29.5% of our wholesale vehicle sales volume was generated outside theU.S. The following table summarizes wholesale vehicle sales by automotive segment (vehicles in thousands): Three Months Ended March 31, 2021 March 31, 2020 GMNA 664 80.9 % 775 80.3 % GMI 157 19.1 % 191 19.7 % Total 821 100.0 % 966 100.0 % Total vehicle sales data represents: (1) retail sales (i.e., sales to consumers who purchase new vehicles from dealers or distributors); (2) fleet sales (i.e., sales to large and small businesses, governments, and daily rental car companies); and (3) vehicles used by dealers in their businesses, including courtesy transportation vehicles. Total vehicle sales data includes all sales by joint ventures on a total vehicle basis, not based on our percentage ownership interest in the joint venture. Certain joint venture agreements inChina allow for the contractual right to report vehicle sales of non-GM trademarked vehicles by those joint ventures, which are included in the total vehicle sales we report forChina . While total vehicle sales data does not correlate directly to the revenue we recognize during a particular period, we believe it is indicative of the underlying demand for our vehicles. Total vehicle sales data represents management's good faith estimate based on sales reported byGM's dealers, distributors, and joint ventures, commercially available data sources such as registration and insurance data, and internal estimates and forecasts when other data is not available. 29
--------------------------------------------------------------------------------
Table of Contents
GENERAL MOTORS COMPANY AND SUBSIDIARIES
The following table summarizes industry and
Three Months Ended March 31, 2021 March 31, 2020 Industry GM Market Share Industry GM Market ShareNorth America United States 3,968 642 16.2 % 3,579 618 17.3 % Other 724 104 14.4 % 706 101 14.3 %Total North America 4,692 746 15.9 % 4,285 719 16.8 %Asia/Pacific ,Middle East andAfrica China(a) 6,661 780 11.7 % 3,946 462 11.7 % Other 5,006 100 2.0 % 4,909 143 2.9 % TotalAsia/Pacific ,Middle East and Africa 11,667 880 7.5 % 8,855 605 6.8 % South America Brazil 528 75 14.2 % 558 95 17.0 % Other 355 43 12.1 % 311 37 12.1 % Total South America 883 118 13.3 % 869 132 15.2 % Total in GM markets 17,242 1,744 10.1 % 14,009 1,456 10.4 % Total Europe 3,887 - - % 3,712 - - % Total Worldwide(b) 21,129 1,744 8.3 % 17,721 1,456 8.2 % United States Cars 846 61 7.2 % 891 72 8.1 % Trucks 1,048 307 29.3 % 946 292 30.8 % Crossovers 2,074 274 13.2 % 1,742 254 14.6 % Total United States 3,968 642 16.2 % 3,579 618 17.3 % China(a) SGMS 347 207 SGMW 433 255 Total China 6,661 780 11.7 % 3,946 462 11.7 % __________ (a)Includes sales by the Automotive China JVs:SAIC General Motors Sales Co., Ltd. (SGMS) andSAIC GM Wuling Automobile Co., Ltd. (SGMW). (b)Cuba ,Iran ,North Korea ,Sudan andSyria are subject to broad economic sanctions. Accordingly, these countries are excluded from industry sales data and corresponding calculation of market share.
In the three months ended
As discussed above, total vehicle sales and market share data provided in the table above includes fleet vehicles. Certain fleet transactions, particularly sales to daily rental car companies, are generally less profitable than retail sales to end customers. The following table summarizes estimated fleet sales and those sales as a percentage of total vehicle sales (vehicles in thousands):
Three Months Ended
March 31, 2021 March 31, 2020 GMNA 133 199 GMI 60 79 Total fleet sales 193 278 Fleet sales as a percentage of total vehicle sales 11.1 % 19.1 % 30
--------------------------------------------------------------------------------
Table of Contents
GENERAL MOTORS COMPANY AND SUBSIDIARIES GM Financial We believe that offering a comprehensive suite of financing products will generate incremental sales of our vehicles, drive incrementalGM Financial earnings and help support our sales throughout various economic cycles. GM Financial's leasing program is exposed to residual values, which are heavily dependent on used vehicle prices. Used vehicle prices increased approximately 11% for the three months endedMarch 31, 2021 , compared to the same period in 2020, primarily due to continued low new vehicle inventory compounded by the global semiconductor supply shortage impacting automotive production, and strong demand for new and used vehicles driven by economic recovery and government stimulus. In 2021, GM Financial expects used vehicle prices to increase by an amount in the low to mid single digits on a percentage basis, as compared to 2020 levels, primarily due to sustained low new vehicle inventory and continued strong demand. The increase in used vehicle prices resulted in gains on terminations of leased vehicles of$0.4 billion inGM Financial interest, operating and other expenses for the three months endedMarch 31, 2021 , compared to gains of$0.1 billion in the corresponding period in 2020. The following table summarizes the estimated residual value based onGM Financial's most recent estimates and the number of units included inGM Financial Equipment on operating leases, net by vehicle type (units in thousands):March 31, 2021
Residual Value Units Percentage Residual Value Units Percentage Crossovers$ 16,632 965 65.9 % $ 16,334 964 65.5 % Trucks 7,838 279 19.1 % 7,455 275 18.7 % SUVs 3,459 91 6.2 % 3,435 92 6.3 % Cars 1,865 129 8.8 % 1,949 140 9.5 % Total$ 29,794 1,464 100.0 % $ 29,173 1,471 100.0 % GM Financial's penetration of our retail sales in theU.S. was 44% in the three months endedMarch 31, 2021 and 45% in the corresponding period in 2020. Penetration levels vary depending on incentive financing programs available and competing third-party financing products in the market. GM Financial's prime loan originations as a percentage of total loan originations inNorth America increased to 72% in the three months endedMarch 31, 2021 from 65% in the three months endedMarch 31, 2020 . In the three months endedMarch 31, 2021 ,GM Financial's revenue consisted of leased vehicle income of 68%, retail finance charge income of 28% and commercial finance charge income of 2%. Consolidated Results We review changes in our results of operations under five categories: volume, mix, price, cost and other. Volume measures the impact of changes in wholesale vehicle volumes driven by industry volume, market share and changes in dealer stock levels. Mix measures the impact of changes to the regional portfolio due to product, model, trim, country and option penetration in current year wholesale vehicle volumes. Price measures the impact of changes related to Manufacturer's Suggested Retail Price and various sales allowances. Cost primarily includes: (1) material and freight; (2) manufacturing, engineering, advertising, administrative and selling and warranty expense; and (3) non-vehicle related activity. Other primarily includes foreign exchange and non-vehicle related automotive revenues as well as equity income or loss from our nonconsolidated affiliates. Refer to the regional sections of this MD&A for additional information.
Total
Three Months Ended Favorable/ Variance Due To March 31, 2021 March 31, 2020 (Unfavorable) % Volume Mix Price Other (Dollars in billions) GMNA$ 25,957 $ 25,831 $ 126 0.5 %$ (3.3) $ 1.6 $ 1.7 $ 0.1 GMI 3,086 3,280 (194) (5.9) %$ (0.5) $ 0.2 $ 0.3 $ (0.2) Corporate 19 38 (19) (50.0) % $ - Automotive 29,062 29,149 (87) (0.3) %$ (3.8) $ 1.8 $ 2.0 $ (0.1) Cruise 30 25 5 20.0 % $ - GM Financial 3,407 3,561 (154) (4.3) %$ (0.2) Eliminations/reclassifications (25) (26) 1 3.8 % $ - $ -
Total net sales and revenue
$ (235) (0.7) %$ (3.8) $ 1.8 $ 2.0 $ (0.3)
Refer to the regional sections of this MD&A for additional information on volume, mix and price.
31
--------------------------------------------------------------------------------
Table of Contents
GENERAL MOTORS COMPANY AND SUBSIDIARIES
Automotive and Other Cost of Sales
Three Months Ended Favorable/ Variance Due To March 31, 2021 March 31, 2020 (Unfavorable) % Volume Mix Cost Other (Dollars in billions) GMNA$ 21,962 $ 22,553 $ 591 2.6 %$ 2.5 $ (0.6) $ (1.3) $ - GMI 2,897 3,883 986 25.4 %$ 0.4 $ -$ 0.3 $ 0.2 Corporate 29 107 78 72.9 % $ -$ 0.1 Cruise 227 183 (44) (24.0) % $ - Eliminations - - - - % $ - $ - Total automotive and other cost of sales$ 25,115 $ 26,726 $ 1,611 6.0 %$ 2.9 $ (0.6)
$ (1.0) $ 0.3 In the three months endedMarch 31, 2021 , increased Cost was primarily due to: (1) increased material and freight costs of$1.0 billion ; and (2) increased engineering costs of$0.2 billion primarily related to accelerating our electric vehicle portfolio; partially offset by (3) charges of$0.4 billion in asset impairments and dealer restructuring charges inAustralia ,New Zealand , andThailand in 2020. In the three months endedMarch 31, 2021 , favorable Other was primarily due to the foreign currency effect resulting from the weakening of the Brazilian Real against theU.S. Dollar.
Refer to the regional sections of this MD&A for additional information on volume and mix.
Automotive and other selling, general and administrative expense
Three Months Ended Favorable/ March 31, 2021 March 31, 2020 (Unfavorable) % Automotive and other selling, general and administrative expense$ 1,803 $ 1,970 $ 167 8.5 %
In the three months ended
Interest Income and Other Non-operating Income, net
Three Months Ended Favorable/ March 31, 2021 March 31, 2020 (Unfavorable) % Interest income and other non-operating income, net$ 799 $ 311 $ 488 n.m. ________ n.m. = not meaningful Interest income and other non-operating, net increased primarily due to$0.2 billion in gains in the three months endedMarch 31, 2021 compared to$0.4 billion in losses in the three months endedMarch 31, 2020 related to Stellantis warrants. Income Tax Expense Three Months Ended March 31, 2021 March 31, 2020
Favorable/ (Unfavorable) % Income tax expense$ 1,177 $ 357 $ (820) n.m. ________ n.m. = not meaningful
In the three months ended
For the three months ended
Refer to Note 14 to our condensed consolidated financial statements for additional information related to Income tax expense.
32
--------------------------------------------------------------------------------
Table of Contents
GENERAL MOTORS COMPANY AND SUBSIDIARIES GM North America Three Months Ended Favorable / Variance Due To March 31, 2021 March 31, 2020 (Unfavorable) % Volume Mix Price Cost Other (Dollars in billions) Total net sales and revenue$ 25,957 $ 25,831 $ 126 0.5 %$ (3.3) $ 1.6 $ 1.7 $ 0.1 EBIT-adjusted$ 3,134 $ 2,194 $ 940 42.8 %$ (0.9) $ 1.0 $ 1.7 $ (1.1) $ 0.1
EBIT-adjusted margin 12.1 % 8.5 % 3.6 % (Vehicles in thousands) Wholesale vehicle sales 664 775 (111) (14.3) % GMNA TotalNet Sales and Revenue In the three months endedMarch 31, 2021 , Total net sales and revenue increased primarily due to: (1) favorable price primarily due to the launch of our new full-size SUVs and lower incentives due to decreased dealer inventory levels; and (2) favorable mix associated with decreased sales of passenger cars and crossover vehicles and improved mix associated with our full-size pickup trucks; partially offset by (3) decreased net wholesale volumes across most vehicle lines due to lost production volumes resulting from the shortage of semiconductors in 2021, partially offset by lost production as a result of COVID-19 related shutdowns in 2020. GMNA EBIT-Adjusted In the three months endedMarch 31, 2021 , EBIT-adjusted increased primarily due to: (1) favorable price; and (2) favorable mix; partially offset by (3) increased Cost due to increased material and freight cost of$1.0 billion and increased engineering cost primarily related to accelerating our electric vehicle portfolio of$0.2 billion ; and (4) decreased net wholesale volumes. GM International Three Months Ended Favorable / Variance Due To March 31, 2021 March 31, 2020 (Unfavorable) % Volume Mix Price Cost Other
(Dollars in billions)
Total net sales and revenue
(5.9) %$ (0.5) $ 0.2 $ 0.3 $ (0.2)
EBIT (loss)-adjusted $ 308
n.m. $ -$ 0.2 $ 0.3 $ (0.1) $ 0.5 EBIT (loss)-adjusted margin 10.0 % (16.8) % 26.8 % Equity income (loss) - Automotive China $ 308$ (167) $ 475 n.m. EBIT (loss)-adjusted - excluding Equity income $ -$ (384) $ 384 n.m. (Vehicles in thousands) Wholesale vehicle sales 157 191 (34) (17.8) % __________ n.m. = not meaningful
The vehicle sales of our Automotive China JVs are not recorded in Total net sales and revenue. The results of our joint ventures are recorded in Equity income, which is included in EBIT (loss)-adjusted above.
GMI TotalNet Sales and Revenue In the three months endedMarch 31, 2021 , Total net sales and revenue decreased primarily due to: (1) decreased net wholesale volumes due to lost production volumes resulting from the shortage of semiconductors in 2021 and the wind-down of our vehicle sales operations inAustralia ,New Zealand andThailand ; and (2) unfavorable Other primarily due to the foreign currency effect resulting from the weakening of the Brazilian Real and Argentinian Peso against theU.S. Dollar; partially offset by (3) favorable pricing across multiple vehicle lines inBrazil andArgentina ; and (4) favorable mix inBrazil . GMI EBIT (Loss)-Adjusted In the three months endedMarch 31, 2021 , EBIT-adjusted increased primarily due to: (1) favorable pricing; (2) favorable mix primarily inBrazil andAsia/Pacific ; and (3) favorable Other primarily due to increased equity income; partially offset by (4) unfavorable Cost primarily due to increased material costs, partially offset by decreased advertising expenses inclusive of savings related to the wind-down of our vehicle sales operations inAustralia ,New Zealand andThailand . 33
--------------------------------------------------------------------------------
Table of Contents
GENERAL MOTORS COMPANY AND SUBSIDIARIES We view the Chinese market as important to our global growth strategy and are employing a multi-brand strategy. In the coming years we plan to leverage our global architectures to increase the number of product offerings under the Buick, Chevrolet and Cadillac brands inChina and continue to grow our business under the local Baojun and Wuling brands. We operate in the Chinese market through a number of joint ventures and maintaining strong relationships with our joint venture partners is an important part of ourChina growth strategy.
The following table summarizes certain key operational and financial data for the Automotive China JVs (vehicles in thousands):
Three Months Ended
March 31, 2021 March 31, 2020 Wholesale vehicle sales, including vehicles exported to markets outside of China 675 341 Total net sales and revenue$ 9,875 $ 4,321 Net income (loss)$ 586 $ (348) Cruise Three Months Ended Favorable / March 31, 2021 March 31, 2020 (Unfavorable) % Total net sales and revenue(a)$ 30 $ 25 $ 5 20.0 % EBIT (loss)-adjusted$ (229) $ (228) $ (1) (0.4) % __________ (a)Partially reclassified to Interest income and other non-operating income, net in our condensed consolidated income statements in the three months endedMarch 31, 2021 and 2020. GM Financial Three Months Ended Increase/ March 31, 2021 March 31, 2020 (Decrease) % Total revenue$ 3,407 $ 3,561 $ (154) (4.3) % Provision for loan losses $ (26) $ 466$ (492) n.m. EBT-adjusted$ 1,182 $ 230$ 952 n.m.
Average debt outstanding (dollars in billions)
88.8$ 5.1 5.7 % Effective rate of interest paid 2.8 % 3.8 % (1.0) % __________ n.m. = not meaningful GM Financial Revenue In the three months endedMarch 31, 2021 , total revenue decreased primarily due to decreased leased vehicle income of$0.1 billion primarily due to a decrease in the leased vehicles portfolio, as terminations of leases exceeded purchases. GM Financial EBT-Adjusted In the three months endedMarch 31, 2021 , EBT-adjusted increased primarily due to: (1) decreased provision for loan losses of$0.5 billion primarily due to a reduction in the reserve levels established atMarch 31, 2020 at the onset of the COVID-19 pandemic, as a result of actual credit performance that was better than forecast; and favorable expectations for future charge-offs and recoveries, reflecting improved forecast economic conditions; (2) decreased leased vehicle expenses net of leased vehicle income of$0.3 billion primarily due to increased lease termination gains, due to the increase in used vehicle prices for the three months endedMarch 31, 2021 compared to the same period in 2020; and (3) decreased interest expense of$0.2 billion due to a decrease in the effective rate of interest on debt. Liquidity and Capital Resources We believe our current levels of cash, cash equivalents, marketable debt securities, available borrowing capacity under our revolving credit facilities and other liquidity actions currently available to us are sufficient to meet our liquidity requirements. We also maintain access to the capital markets and may issue debt or equity securities, which may provide an additional source of liquidity. We have substantial cash requirements going forward, which 34
--------------------------------------------------------------------------------
Table of Contents
GENERAL MOTORS COMPANY AND SUBSIDIARIES
we plan to fund through our total available liquidity, cash flows from operating activities and additional liquidity measures, if determined to be necessary.
Our known current material uses of cash include, among other possible demands: (1) capital expenditures of approximately$9.0 billion to$10.0 billion in 2021 in addition to payments for engineering and product development activities; (2) payments associated with previously announced vehicle recalls, the settlements of the multi-district litigation and any other recall-related contingencies; and (3) payments to service debt and other long-term obligations, including discretionary and mandatory contributions to our pension plans. Our material future uses of cash, which may vary from time to time based on market conditions and other factors, are focused on the three objectives of our capital allocation program: (1) grow our business at an average target ROIC-adjusted rate of 20% or greater; (2) maintain a strong investment-grade balance sheet, including a target average automotive cash balance of$18 billion ; and (3) after the first two objectives are met, return available cash to shareholders. Our senior management evaluates our capital allocation program on an ongoing basis and recommends any modifications to the program to our Board of Directors, not less than once annually. Our liquidity plans are subject to a number of risks and uncertainties, including those described in the "Forward-Looking Statements" section of this MD&A and Part I, Item 1A. Risk Factors of our 2020 Form 10-K, some of which are outside of our control. We continue to monitor and evaluate opportunities to strengthen our competitive position over the long term while maintaining a strong investment-grade balance sheet. These actions may include opportunistic payments to reduce our long-term obligations as well as the possibility of acquisitions, dispositions and investments with joint venture partners as well as strategic alliances that we believe would generate significant advantages and substantially strengthen our business. Cash flows occur amongst our Automotive, Cruise and GM Financial operations that are eliminated when we consolidate our cash flows. Such eliminations include, among other things, collections by Automotive on wholesale accounts receivables financed by dealers through GM Financial, payments between Automotive andGM Financial for accounts receivables transferred by Automotive to GM Financial, loans to Automotive from GM Financial, dividends issued by GM Financial to Automotive, tax payments by GM Financial to Automotive and Automotive cash injections in Cruise. The presentation of Automotive liquidity, Cruise liquidity and GM Financial liquidity presented below includes the impact of cash transactions amongst the sectors that are ultimately eliminated in consolidation. Automotive Liquidity Total available liquidity includes cash, cash equivalents, marketable debt securities and funds available under credit facilities. The amount of available liquidity is subject to seasonal fluctuations and includes balances held by various business units and subsidiaries worldwide that are needed to fund their operations. We have not significantly changed the management of our liquidity, including our allocation of available liquidity, our portfolio composition and our investment guidelines sinceDecember 31, 2020 . Refer to Part II, Item 7. MD&A of our 2020 Form 10-K. We use credit facilities as a mechanism to provide additional flexibility in managing our global liquidity. Our Automotive borrowing capacity under credit facilities totaled$18.5 billion atMarch 31, 2021 andDecember 31, 2020 .Total Automotive borrowing capacity under our credit facilities does not include our 364-day,$2.0 billion facility allocated for exclusive use by GM Financial. We did not have any borrowings against our primary facilities, but had letters of credit outstanding under our sub-facility of$0.3 billion atMarch 31, 2021 andDecember 31, 2020 . InApril 2021 , we increased the total borrowing capacity of our five-year,$10.5 billion facility to$11.2 billion and extended the termination date for a$9.9 billion portion of the five-year facility by three years, now set to mature onApril 18, 2026 . The termination date ofApril 18, 2023 for the remaining portion of the five-year facility remains unchanged. We also renewed and increased the total borrowing capacity of our three-year,$4.0 billion facility to$4.3 billion , which now matures onApril 7, 2024 , and renewed our 364-day,$2.0 billion facility allocated for exclusive use by GM Financial, which now matures onApril 6, 2022 . We also terminated our 364-day,$2.0 billion revolving credit facility, entered into inMay 2020 . Additionally, the prior restrictions on share repurchases and dividends on our common shares were removed upon entrance into the renewed three-year,$4.3 billion facility. If available capacity permits, GM Financial continues to have access to our automotive credit facilities, except for the three-year,$2.0 billion transformation facility and the 364-day,$2.0 billion facility that we terminated inApril 2021 . GM Financial did not have borrowings outstanding against any of these facilities atMarch 31, 2021 andDecember 31, 2020 . We had intercompany loans from GM Financial of$0.3 billion and$0.4 billion atMarch 31, 2021 andDecember 31, 2020 , which primarily consisted of commercial loans to dealers we consolidate. We did not have intercompany loans to GM Financial atMarch 31, 2021 andDecember 31, 2020 . Refer to Note 4 to our condensed consolidated financial statements for additional information. 35
--------------------------------------------------------------------------------
Table of Contents
GENERAL MOTORS COMPANY AND SUBSIDIARIES GM Financial's Board of Directors declared and paid dividends of$0.6 billion and$0.4 billion on its common stock in the three months endedMarch 31, 2021 and 2020. Future dividends from GM Financial will depend on several factors including business and economic conditions, its financial condition, earnings, liquidity requirements and leverage ratio. In addition, we expect to continue to receive dividends from our Automotive China JVs on a normal cadence. InApril 2021 , our China JV nonconsolidated affiliates declared dividends of$0.6 billion toGM . Several of our loan facilities, including our revolving credit facilities, require compliance with certain financial and operational covenants as well as regular reporting to lenders. We have reviewed our covenants in effect as ofMarch 31, 2021 and determined we are in compliance and expect to remain in compliance in the future.
The following table summarizes our available liquidity (dollars in billions):
March 31, 2021 December 31, 2020 Automotive cash and cash equivalents $ 13.1 $ 14.2 Marketable debt securities 5.9 8.1
Automotive cash, cash equivalents and marketable debt securities
19.0 22.3 Cruise cash and cash equivalents(a) 2.2 0.8 Cruise marketable debt securities(a) 1.9 0.9 Available liquidity(b) 23.0 24.0 Available under credit facilities 18.2 18.2 Total available liquidity(b) $ 41.2 $ 42.2
__________
(a)Amounts are designated exclusively for the use of Cruise. (b)Amounts may not sum due to rounding.
The following table summarizes the changes in our Automotive available liquidity (excluding Cruise, dollars in billions):
Three Months Ended March 31, 2021 Operating cash flow $ (1.1) GM investment in Cruise (1.0) Capital expenditures (0.9) Other non-operating (0.3) Total change in automotive available liquidity $ (3.3)
Automotive Cash Flow (dollars in billions)
Three Months Ended March 31, 2021 March 31, 2020 Change Operating Activities Net income$ 2.7 $ 0.3$ 2.4 Depreciation, amortization and impairment charges 1.3 1.5 (0.2) Pension and OPEB activities (0.6) (0.5) (0.1) Working capital (3.3) (0.7) (2.6) Accrued and other liabilities and income taxes (1.5) (0.9) (0.6) Other 0.3 0.6 (0.3) Net automotive cash provided by (used in) operating activities$ (1.1) $ 0.3$ (1.4) In the three months endedMarch 31, 2021 , the decrease in Net automotive cash provided by (used in) operating activities was primarily due to: (1) unfavorable accounts receivable of$1.2 billion and inventory of$1.0 billion ; partially offset by (2) lower sales incentive payments of$1.0 billion ; and (3) higher dividends received from GM Financial of$0.2 billion . 36
--------------------------------------------------------------------------------
Table of Contents GENERAL MOTORS COMPANY AND SUBSIDIARIES Three Months Ended March 31, 2021 March 31, 2020 Change Investing Activities Capital expenditures$ (0.9) $ (1.2)$ 0.3 Acquisitions and liquidations of marketable securities, net(a) 2.2 (2.4) 4.6 GM investment in Cruise (1.0) - (1.0) Other (0.1) - (0.1) Net automotive cash provided by (used in) investing activities$ 0.2 $ (3.6)$ 3.8 __________
(a)Amount includes
In the three months ended
Three Months Ended March 31, 2021 March 31, 2020 Change Financing Activities Borrowings against credit facilities $ - $ 15.9$ (15.9) Net proceeds (payments) from short-term debt (0.2) 0.3 (0.5) Dividends paid and payments to purchase common stock - (0.6) 0.6 Other 0.2 (0.1) 0.3
Net automotive cash provided by financing activities $ - $ 15.5
Adjusted Automotive Free Cash Flow We measure adjusted automotive free cash flow as automotive operating cash flow from operations less capital expenditures adjusted for management actions. In the three months endedMarch 31, 2021 , net automotive cash used in operating activities underU.S. GAAP was$1.1 billion , capital expenditures were$0.9 billion , and adjustments for management actions were insignificant.
In the three months ended
Status of Credit Ratings We receive ratings from four independent credit rating agencies:DBRS Limited , Fitch Ratings, Moody's Investor Service andStandard & Poor's . All four credit rating agencies currently rate our corporate credit at investment grade. InMarch 2021 ,Moody's Investor Services affirmed our investment-grade credit ratings and raised our ratings outlook to stable. As ofApril 19, 2021 , all other credit ratings remained unchanged sinceDecember 31, 2020 . Cruise Liquidity In the three months endedMarch 31, 2021 ,Cruise Holdings issued Cruise Class G Preferred Shares in exchange for$2.5 billion from Microsoft and certain other investors, including$1.0 billion fromGeneral Motors Holdings LLC . Refer to Note 16 to our condensed consolidated financial statements for additional information. When Cruise's autonomous vehicles are ready for commercial deployment,Softbank Vision Fund (AIV M2), L.P. is obligated to purchase additional Cruise convertible preferred shares for$1.35 billion . The following table summarizes the changes in our Cruise available liquidity (dollars in billions): Three Months Ended March 31, 2021 Operating cash flow $ (0.2) Issuance of Cruise Preferred Shares
1.5
GM investment in Cruise
1.0
Total change in Cruise available liquidity $ 2.3 37
--------------------------------------------------------------------------------
Table of Contents
GENERAL MOTORS COMPANY AND SUBSIDIARIES
Cruise Cash Flow (dollars in billions)
Three Months Ended March 31, 2021 March 31, 2020 Change Net cash used in operating activities$ (0.2) $ (0.2) $ - Net cash used in investing activities$ (0.9) $ (0.6)$ (0.3) Net cash provided by financing activities$ 2.5 $
-
Automotive Financing - GM Financial Liquidity GM Financial's primary sources of cash are finance charge income, leasing income and proceeds from the sale of terminated leased vehicles, net distributions from credit facilities, securitizations, secured and unsecured borrowings and collections and recoveries on finance receivables. GM Financial's primary uses of cash are purchases and funding of finance receivables and leased vehicles, repayment or repurchases of secured and unsecured debt, funding credit enhancement requirements in connection with securitizations and secured credit facilities, interest costs, operating expenses, income taxes and dividend payments. GM Financial continues to monitor and evaluate opportunities to optimize its liquidity position and the mix of its debt between secured and unsecured debt. The following table summarizes GM Financial's available liquidity (dollars in billions): March 31, 2021 December 31, 2020 Cash and cash equivalents $ 6.3 $ 5.1 Borrowing capacity on unpledged eligible assets 20.4 19.0 Borrowing capacity on committed unsecured lines of credit 0.5 0.5
Borrowing capacity on revolving credit facility, exclusive to GM Financial
2.0 2.0 Total GM Financial available liquidity $ 29.2 $ 26.6 AtMarch 31, 2021 , GM Financial's available liquidity increased fromDecember 31, 2020 due to an increase in cash and cash equivalents and available borrowing capacity on unpledged eligible assets, resulting from the issuance of securitization transactions and unsecured debt. GM Financial structures liquidity to support at least six months of GM Financial's expected net cash flows, including new originations, without access to new debt financing transactions or other capital markets activity.
GM Financial did not have any borrowings outstanding against our credit facility
designated for their exclusive use or the remainder of our revolving credit
facilities at
Credit Facilities In the normal course of business, in addition to using its available cash, GM Financial utilizes borrowings under its credit facilities, which may be secured or unsecured, and GM Financial repays these borrowings as appropriate under its cash management strategy. AtMarch 31, 2021 secured, committed unsecured and uncommitted unsecured credit facilities totaled$26.2 billion ,$0.5 billion and$1.3 billion with advances outstanding of$1.6 billion , an insignificant amount and$1.3 billion .
GM Financial Cash Flow (dollars in billions)
Three Months Ended March 31, 2021 March 31, 2020 Change Net cash provided by operating activities$ 1.5 $ 2.2$ (0.7) Net cash used in investing activities$ (1.6) $ (2.7)$ 1.1 Net cash provided by financing activities$ 1.4 $
7.8
In the three months endedMarch 31, 2021 , Net cash provided by operating activities decreased primarily due to: (1) a decrease in derivative collateral posting activities of$0.6 billion ; and (2) a decrease in leased vehicle income of$0.1 billion ; partially offset by (3) a decrease in interest paid of$0.1 billion . In the three months endedMarch 31, 2021 , Net cash used in investing activities decreased primarily due to: (1) increased collections and recoveries on finance receivables of$2.9 billion ; (2) increased proceeds from terminated vehicles of$1.8 billion ; partially offset by (3) an increase in purchases of leased vehicles of$2.3 billion ; and (4) increased purchases of finance receivables of$1.3 billion . 38
--------------------------------------------------------------------------------
Table of Contents
GENERAL MOTORS COMPANY AND SUBSIDIARIES
In the three months ended
Critical Accounting Estimates The condensed consolidated financial statements are prepared in conformity withU.S. GAAP, which requires the use of estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses in the periods presented. We believe the accounting estimates employed are appropriate and the resulting balances are reasonable; however, due to the inherent uncertainties in developing estimates, actual results could differ from the original estimates, requiring adjustments to these balances in future periods. The critical accounting estimates that affect the condensed consolidated financial statements and the judgments and assumptions used are consistent with those described in the MD&A in our 2020 Form 10-K. Forward-Looking Statements This report and the other reports filed by us with theSEC from time to time, as well as statements incorporated by reference herein and related comments by our management, may include "forward-looking statements" within the meaning of theU.S. federal securities laws. Forward-looking statements are any statements other than statements of historical fact. Forward-looking statements represent our current judgment about possible future events and are often identified by words like "aim," "anticipate," "appears," "approximately," "believe," "continue," "could," "designed," "effect," "estimate," "evaluate," "expect," "forecast," "goal," "initiative," "intend," "may," "objective," "outlook," "plan," "potential," "priorities," "project," "pursue," "seek," "should," "target," "when," "will," "would," or the negative of any of those words or similar expressions. In making these statements, we rely on assumptions and analysis based on our experience and perception of historical trends, current conditions and expected future developments as well as other factors we consider appropriate under the circumstances. We believe these judgments are reasonable, but these statements are not guarantees of any future events or financial results, and our actual results may differ materially due to a variety of important factors, many of which are beyond our control. These factors, which may be revised or supplemented in subsequent reports we file with theSEC , include, among others, the following: (1) our ability to deliver new products, services and customer experiences in response to increased competition and changing consumer preferences in the automotive industry; (2) our ability to timely fund and introduce new and improved vehicle models, including electric vehicles, that are able to attract a sufficient number of consumers; (3) the success of our crossovers, SUVs and full-size pickup trucks; (4) our highly competitive industry, which is characterized by excess manufacturing capacity and the use of incentives, and the introduction of new and improved vehicle models by our competitors; (5) our ability to deliver a broad portfolio of electric vehicles and drive increased consumer adoption; (6) the unique technological, operational, regulatory and competitive risks related to the timing and commercialization of autonomous vehicles; (7) the ongoing COVID-19 pandemic; (8) global automobile market sales volume, which can be volatile; (9) our significant business inChina , which is subject to unique operational, competitive, regulatory and economic risks; (10) our joint ventures, which we cannot operate solely for our benefit and over which we may have limited control; (11) the international scale and footprint of our operations, which exposes us to a variety of unique political, economic, competitive and regulatory risks, including the risk of changes in government leadership and laws (including labor, tax and other laws), political instability and economic tensions between governments and changes in international trade policies, new barriers to entry and changes to or withdrawals from free trade agreements, public health crises, including the occurrence of a contagious disease or illness, such as the COVID-19 pandemic, changes in foreign exchange rates and interest rates, economic downturns in the countries in which we operate, differing local product preferences and product requirements, changes to and compliance withU.S. and foreign countries' export controls and economic sanctions, differing labor regulations, requirements and union relationships, differing dealer and franchise regulations and relationships, and difficulties in obtaining financing in foreign countries; (12) any significant disruption, including any work stoppages, at any of our manufacturing facilities; (13) the ability of our suppliers to deliver parts, systems and components without disruption and at such times to allow us to meet production schedules; (14) prices of raw materials used by us and our suppliers; (15) our ability to successfully and cost-effectively restructure our operations in theU.S. and various other countries and initiate additional cost reduction actions with minimal disruption; (16) the possibility that competitors may independently develop products and services similar to ours, or that our intellectual property rights are not sufficient to prevent competitors from developing or selling those products or services; (17) our ability to manage risks related to security breaches and other disruptions to our information technology systems and networked products, including connected vehicles and in-vehicle systems; (18) our ability to comply with increasingly complex, restrictive and punitive regulations relating to our enterprise data practices, including the collection, use, sharing and security of the Personal Identifiable Information of our customers, employees, or suppliers; (19) our ability to comply with extensive laws, regulations and policies applicable to our operations and products, including those relating to fuel economy and emissions and autonomous vehicles; (20) costs and risks associated with litigation and government investigations; (21) the costs and effect on our reputation of product safety recalls and alleged defects in products and services; (22) any additional tax expense or exposure; (23) our continued ability to develop captive financing capability through GM Financial; 39
--------------------------------------------------------------------------------
Table of Contents
GENERAL MOTORS COMPANY AND SUBSIDIARIES
and (24) any significant increase in our pension funding requirements. A further
list and description of these risks, uncertainties and other factors can be
found in our 2020 Form 10-K and our subsequent filings with the
We caution readers not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update publicly or otherwise revise any forward-looking statements, whether as a result of new information, future events or other factors, except where we are expressly required to do so by law.
* * * * * * *
© Edgar Online, source