Consolidated net income for 2004, including special items, totaled $3.7 billion, or $6.51 per share, compared with $3.8 billion, or $7.14 per share, in 2003.
GM's adjusted earnings from continuing operations totaled $569 million, or $1.01 per share in the fourth quarter of 2004, down from $838 million, or $1.47 per share in the fourth quarter of 2003. Including special items and discontinued operations, GM reported net income of $630 million, or $1.11 per share in the fourth quarter of 2004, down from $1.0 billion, or $2.13 per share in the year- ago period. Adjusted revenue rose 4.7 percent to $51.2 billion.
The results for the fourth quarter of 2004 include special items with a net favorable effect of $61 million, or $0.10 per share (see "Highlights"). The results for the fourth quarter of 2003 include net-favorable special items totaling $339 million, or $0.72 per share.
GM financial results described throughout the remainder of this release exclude special items unless otherwise noted (see "Highlights").
GMAC earned a record $2.9 billion in 2004, up from $2.8 billion in 2003. In the fourth quarter of 2004, GMAC earned $611 million, down slightly from record earnings of $630 million in the fourth quarter of 2003.
GMAC's financing operations reported net income of $1.5 billion in calendar-year 2004, up from $1.4 billion in 2003. The increase reflects considerable improvement in earnings from international operations, lower credit-loss provisions, improved proceeds from the sale of off-lease vehicles in North America, and the impact of favorable tax settlements, partially offset by lower net-interest margins.
Mortgage operations earned $1.1 billion in 2004, a decline from record net income of $1.3 billion in 2003 as residential-mortgage industry volumes declined by approximately 30 percent. Despite the lower industry volumes, GMAC's mortgage operations experienced market-share gains, asset growth, improved mortgage-servicing results and an increase in fee-based revenue.
GMAC's insurance operations generated record net income of $329 million in 2004, up from $179 million in 2003. The increase reflects a combination of strong results achieved through increased premium revenue, favorable loss experience, and improved investment-portfolio performance. GM Automotive Operations
GM's automotive operations earned $1.2 billion in 2004, up from $1.1 billion in 2003. Worldwide production totaled 9.1 million units in 2004, up from 8.8 million in 2003. GM's global automotive business reported earnings of $235 million in the fourth quarter of 2004, down from $396 million in the year-ago quarter. The latest fourth-quarter results reflect a significant improvement at GM's Latin America/Africa/Mid-East (GMLAAM) region and improved earnings at GM North America (GMNA), offset by losses at GM Europe (GME) and reduced earnings at GM Asia Pacific (GMAP).
GM reported market-share gains in three out of four automotive regions in 2004. GM ended 2004 with a global market share of 14.5 percent, down slightly from 14.6 percent in 2003.
GMNA earned $1.2 billion in 2004, in line with 2003 results. GM's market share in North America declined to 26.7 percent in 2004 from 27.4 percent in 2003. GMNA earned $416 million in the fourth quarter of 2004, up from $397 million in the fourth quarter of 2003, as continued cost reduction and favorable tax settlements were partially offset by lower production volumes and unfavorable product mix.
Among the highlights for 2004:
GM set U.S. industry records in total truck and sport-utility-vehicle sales for the fourth-consecutive year and once again sold more full-size pickups than any other manufacturer.
Chevrolet sold more passenger cars in the United States than any other brand and had its best sales year since 1988.
Cadillac's U.S. sales rose 8.4 percent in 2004, marking its best annual sales performance since 1990.
GMC sold a record 602,064 vehicles in 2004, the eleventh time in a dozen years that GMC has established a new sales record.
GME posted a loss of $742 million in 2004, compared with a loss of $286 million in 2003. In the fourth quarter of 2004, GME reported a loss of $345 million, compared with a loss of $66 million in the year-ago quarter.
GMAP reported record net income of $729 million in 2004, up from $577 million in 2003. The region's market share rose to 5.2 percent in 2004, up from 4.9 percent in 2003. GMAP earned $117 million in the fourth quarter of 2004, compared with earnings of $177 million in the year-ago quarter.
GMLAAM earned $85 million in 2004, a significant improvement from the year-ago loss of $331 million. GMLAAM's market share rose to 17.4 percent in 2004 from 16.3 percent in 2003. GMLAAM earned $47 million in the fourth quarter of 2004, compared with a year-ago loss of $112 million.
Cash and Liquidity
Cash, marketable securities, and short-term assets of the Voluntary Employees' Beneficiary Association (VEBA) Trust totaled $23.3 billion at Dec. 31, 2004, excluding financing and insurance operations, down from $24.5 billion on Sept. 30, 2004. During the fourth quarter of 2004, GM pre-funded its retiree-health-care obligation by an additional $4 billion, bringing the year-end funding balance for retiree-health-care obligations to approximately $20 billion. Automotive operating cash flow for the year ended Dec. 31, 2004 totaled $4.2 billion.
GM's U.S. hourly and salaried pension plans were $3 billion over-funded at the end of 2004, a significant improvement from the previous year when the plans were $300 million over-funded. Asset returns of approximately 14 percent more than offset a decline in the discount rate to 5.75 percent at the end of 2004 from 6.00 percent at the end of 2003.
Approximately 119,000 hourly employees in the United States will receive a profit-sharing payment in 2005. A typical U.S. hourly employee, eligible under the profit-sharing program, would qualify for a payment of approximately $195.
GM expects solid, worldwide economic growth in 2005 with global industry sales surpassing 62 million units. GM expects North American industry sales of approximately 20 million units, about flat with 2004 results. Industry sales in Europe are expected to total approximately 20 million units, on par with 2004, while industry sales in the Asia-Pacific region are expected to rise to approximately 17.7 million units. Industry sales in the GMLAAM region are expected to increase to approximately 4.4 million units in 2005.
GM expects 2005 earnings to be approximately $4.00 to $5.00 per share, excluding any special items and at current dilution levels. GM expects to increase global sales volumes, generate $2 billion in operating cash flow and increase capital expenditures to approximately $8 billion in 2005. GM estimates break-even or better results in the first quarter of 2005, excluding any special items, reflecting lower production volumes and less-favorable product mix.
(Jan 19, 2005)