General Motors has reported full-year 2014 net income of $2.8 billion, or $1.65 per diluted share attributable to common stockholders on net revenue of $155.9 billion.
Core automotive operating performance improved in 2014, but results were more than offset by incremental recall and restructuring costs, and a net loss from special items. The special items during the calendar year impacted full-year net income to common stockholders unfavorably by $(2.4) billion, or $(1.40) per diluted share, compared to an unfavorable $(1.3) billion impact in 2013, or $(0.80) per diluted share.
General Motors Calendar Year 2014 Financial ResultsAll figures in billions except for per share amounts
|METRIC||2014||2013||2014 - 2013||% CHANGE 2014 / 2013|
|NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS||$2.80||$3.80||-1.00||-26.32%|
|EARNINGS PER SHARE (EPS FULLY DILUTED)||$1.65||$2.38||-0.73||-30.67%|
|IMPACT OF SPECIAL ITEMS ON EPS FULLY DILUTED||($1.40)||($0.80)||-0.60||-75%|
|AUTOMOTIVE NET CASH FLOW FROM OPERATING ACTIVITIES||$10.10||$11.00||-0.90||-8.18%|
|ADJUSTED AUTOMOTIVE FREE CASH FLOW||$3.10||$3.70||-0.60||-16.22%|
Revenue, Net Income, Earnings Per Share, EBIT
In 2014, revenue increased $0.5 billion to $155.9 billion, compared with $155.4 billion in 2013.
Full-year net income attributable to common stockholders dropped $1.0 billion to $2.8 billion, compared with $3.8 billion in 2013. In 2014, full-year net income was also impacted unfavorably by recall-related pre-tax costs of $2.8 billion, or $(1.07) per diluted share. Income tax expense in 2014 was favorably impacted by recall-related costs and special items.
The drop in net income caused earnings per share diluted to drop $0.73 to $1.65 from $2.38.
Full-year EBIT-adjusted was down $2.10 billion to $6.5 billion, compared with $8.6 billion in 2013. For 2014, full-year EBIT-adjusted includes the impact of $2.8 billion for recall-related costs and restructuring charges of $1.0 billion.
Based on GM’s continued strong results, and consistent with its stated strategy of a strong and growing dividend, the company intends to increase the second quarter dividend on its common stock by 20 percent to 36 cents per share. The decision on whether or not to increase the dividend will be made by the GM Board of Directors as part of the regularly-scheduled second quarter dividend declaration procedure.
“Our intention to increase the dividend is consistent with our balanced capital allocation strategy and reflects the confidence we have in the growing strength of our business,” said GM CEO Mary Barra. “Our goal is to maximize long-term shareholder value through both stock price appreciation and return of capital.”
Regional Division Results
- GM North America (GMNA) reported EBIT-adjusted of $6.6 billion in 2014, which included the impact of $2.4 billion in recall-related costs in 2014. This compares to EBIT-adjusted of $7.5 billion in 2013. Based on GMNA’s 2014 financial performance, the company will award variable pay of up to $9,000 to approximately 48,400 eligible GM U.S. hourly employees.
- GM Europe (GME) reported EBIT-adjusted of $(1.4) billion in 2014, which includes $0.7 billion in restructuring costs. This compares with EBIT-adjusted of $(0.9) billion in 2013, which included $0.2 billion in restructuring costs.
- GM International Operations (GMIO) reported EBIT-adjusted of $1.2 billion in 2014, compared with $1.3 billion in 2013. Included in the consolidated results for GMIO, GM China equity income during the fourth quarter of 2014 was $0.5 billion, compared to $0.4 billion in 2013. Full-year equity income for GM China was $2.1 billion, compared to $1.8 billion in 2013.
- GM South America (GMSA) reported EBIT-adjusted of $(0.2) billion in 2014, compared with EBIT-adjusted of $0.3 billion in 2013.
- GM Financial reported earnings before taxes (EBT) adjusted of $0.8 billion in 2014, compared to $0.9 billion in 2013.
Cash Flow and Liquidity
For the full year, adjusted automotive free cash flow was $4.8 billion excluding the effect of $1.6 billion in recall-related cash payments. Including the effect of the recall-related cash payments brings automotive free cash flow to $3.2 billion. Adjusted automotive free cash flow was $3.7 billion in 2013.
GM ended 2014 with strong total automotive liquidity of $37.2 billion, compared with $38.3 billion at year-end in 2013. Automotive cash and marketable securities was $25.2 billion at the end of 2014, compared with $27.9 billion a year earlier.
GM’s year-end global pension obligations of $104.6 billion were approximately 77 percent funded at the end of 2014. The year-end underfunded position was $24.1 billion, up from $19.9 billion at the end of 2013.
GM’s U.S. defined benefit pension plan obligations of $76.7 billion ended the year approximately 86 percent funded. The year-end underfunded position was $10.9 billion, up from $7.3 billion the year prior. For 2014, the return on U.S. defined benefit pension plan assets was approximately 12 percent.
Under current economic conditions, GM expects no significant, mandatory contributions to U.S. defined benefit pension plans for at least five years. While the company will continue to evaluate opportunities to make voluntary cash contributions, it has no current plans to do so in 2015.