General Motors 2012 Annual Report Download - page 16

General Motors Company 2012 ANNUAL REPORT 13
general motors company and subsidiaries
reconciliation of non-gaap measures
The accompanying Letter to Stockholders includes earnings before interest and taxes adjusted for special items (EBIT-adjusted) and
Adjusted automotive free cash flow which are not prepared in accordance with Accounting Principles Generally Accepted in the United
States of America (U.S. GAAP) and have not been audited or reviewed by GM’s independent auditors. EBIT-adjusted and Adjusted
automotive free cash flow are considered non-GAAP measures.
Management believes these non-GAAP measures provide meaningful supplemental information regarding GM’s operating results
and liquidity because they exclude amounts that management does not consider when assessing and measuring operational
and financial performance. Management believes these measures allow it to readily view operating trends, perform analytical
comparisons and benchmark performance between periods and among geographic regions. GM believes these non-GAAP measures
are useful in allowing for greater transparency of GM’s core operations and they are therefore used by management in its financial
and operational decision-making.
While management believes that these non-GAAP measures provide useful information, they are not operating measures under
U.S. GAAP, and there are limitations associated with their use. GM’s calculation of these non-GAAP measures may not be completely
comparable to similarly titled measures of other companies due to potential differences between companies in their method of
calculation. As a result, the use of these non-GAAP measures has limitations and should not be considered in isolation from, or as a
substitute for, other measures such as Net income or Net income attributable to common stockholders. Due to these limitations, these
non-GAAP measures are used as a supplement to U.S. GAAP measures.
The following table summarizes the reconciliation of EBIT-adjusted to its most comparable U.S. GAAP measure (dollars in millions):
2011 2012
Operating segments
GMNA(a) $7,194 $6,953
GME(a) (747) (1,797)
GMIO(a) 1,897 2,191
GMSA(a) (122) 271
GM Financial(b) 622 744
Total operating segments(b) 8,844 8,362
Corporate and eliminations (540) (503)
EBIT-adjusted(b) 8,304 7,859
Special items 861 (36,106)
Interest income 455 343
Automotive interest expense 540 489
Loss on extinguishment of debt - 250
Income tax benefit (110) (34,831)
Net income attributable to stockholders $9,190 $6,188
(a) Interest and income taxes are recorded centrally in Corporate and therefore are not reconciling items for GM’s automotive operating segments between EBIT-adjusted and Net income (loss)
attributable to stockholders.
(b)GM Financial amounts represent income before income taxes.
The following summarizes the adjustments for voluntary management actions for Adjusted automotive free cash flow in the year ended December 31, 2011. Adjustments for voluntary management
actions included the following:
• Increase in accounts receivable of $1.1 billion resulting from the termination of an in-transit wholesale advance agreement; and
• Contribution to Canadian Health Care Trust of $0.8 billion.
In the year ended December 31, 2012, adjustments for voluntary management actions for Adjusted automotive free cash flow included the following:
• Voluntary contributions to a pension plan of $2.3 billion; and
• The premium paid to purchase our common stock from the United States Treasury of $0.4 billion.
The following summarizes the special items for EBIT-adjusted in the year ended December 31, 2011. Special items included the following:
• Gain of $1.6 billion in GMNA on the sale of GM’s Class A Membership Interests in Delphi Automotive LLP;
• Goodwill impairment charges of $1.0 billion in GME and $258 million in GMIO;
• Gain of $749 million in GMNA related to Canadian Health Care Trust settlement;
• Impairment charges of $555 million in Corporate related to GM’s investments in Ally Financial, Inc. common stock;
• Gain of $339 million in Corporate related to the sale of 100% of the Ally Financial, Inc. preferred stock;
• Charge of $106 million in GMIO related to GM’s India joint venture; and
• Gain of $63 million in GMSA related to extinguishment of debt.
In the year ended December 31, 2012, special items for EBIT-adjusted included the following:
• Goodwill impairment charges of $26.4 billion in GMNA, $590 million in GME and $132 million in GMIO;
• Pension settlement charges of $2.7 billion in GMNA;
• Income related to various insurance recoveries of $155 million in GMNA, GME, GMIO and GMSA;
• Property impairment charges of $3.7 billion in GME;
• Intangible assets impairment charges of $1.8 billion in GME;
• Impairment charges related to the investment in PSA of $220 million in GME;
• A charge of $119 million in GME to record GM Strasbourg assets and liabilities to estimated fair value;
• GM Korea hourly wage litigation charge of $336 million in GMIO;
• Noncontrolling interests of $68 million in GMIO related to redemption of the GM Korea mandatorily redeemable preferred shares; and
• A charge of $402 million in Corporate which represents the premium paid to purchase our common stock from the UST.