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 2021 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 2021 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. Certain columns and rows may not add due to rounding. 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 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
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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, 2022 2021 2021 2020 2021 2020 2021 2020 Net income (loss) attributable to stockholders$ 2,939 $ 3,022 $ 1,741
1,177 471 642 152 887 971
(112)
Automotive interest expense 226 250 227 275 230 327 243
303
Automotive interest income (50) (32) (44) (46) (38) (51) (32) (61) Adjustments Cruise compensation modification(a) 1,057 - - - - - - - Patent royalty matters(b) (100) - 250 - - - - - GMBrazil indirect tax matters(c) - - 194 - - - - - Cadillac dealer strategy(d) - - - 99 158 - 17 - GMI restructuring(e) - - - 26 - 76 - 92 GM Korea wage litigation(f) - - - - - - 82 - Ignition switch recall and related legal matters(g) - - - (130) - - - - Total adjustments 957 - 444 (5) 158 76 99 92 EBIT (loss)-adjusted$ 4,044 $ 4,417 $ 2,839 $ 3,712 $ 2,922 $ 5,284 $ 4,117 $ (536) _________ (a)This adjustment was excluded because it relates to the one-time modification of Cruise stock incentive awards. (b)These adjustments were excluded because they relate to potential royalties accrued with respect to past-year vehicle sales in the three months endedDecember 31, 2021 , and the resolution of substantially all of these matters in the three months endedMarch 31, 2022 . (c)This adjustment was excluded because it relates to a potential settlement with third parties in the three months endedDecember 31, 2021 relating to retrospective recoveries of indirect taxes inBrazil realized in prior periods. (d)These adjustments were excluded because they relate to strategic activities to transition certainCadillac dealers from the network as part ofCadillac's electric vehicle (EV) strategy. (e)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 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 . (f)This adjustment was excluded because of the unique events associated with recentSupreme Court of Korea decisions related to our salaried workers. (g)This adjustment was excluded because of the unique events associated with the ignition switch recall. 25
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The following table reconciles diluted earnings (loss) per common share under
Three Months Ended March 31, 2022 March 31, 2021 Amount Per Share Amount Per Share Diluted earnings (loss) per common share$ 1,987 $ 1.35 $ 2,976 $ 2.03 Adjustments(a) 957 0.65 - - Tax effect on adjustments(b) (296) (0.20) - - Tax adjustments(c) (482) (0.33) 316 0.22 Deemed dividend adjustment(d) 909 0.62 - - EPS-diluted-adjusted$ 3,075 $ 2.09 $ 3,292 $ 2.25 __________ (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 benefit related to the release of a valuation allowance against deferred tax assets that are considered realizable as a result of Cruise tax reconsolidation in the three months endedMarch 31, 2022 , and tax expense related to the establishment of a valuation allowance against deferred tax assets that were considered no longer realizable for Cruise in the three months endedMarch 31, 2021 . These adjustments were excluded because significant impacts of valuation allowances are not considered part of our core operations. (d)This adjustment consists of a deemed dividend related to the redemption of Cruise preferred shares from SoftBank in the three months endedMarch 31, 2022 . The following table reconciles our effective tax rate underU.S. GAAP to ETR-adjusted: Three Months Ended March 31, 2022 March 31, 2021 Income tax Income before Income tax Income before expense income taxes expense (benefit) Effective tax rate income taxes (benefit) Effective tax rate Effective tax rate$ 2,779 $ (28) (1.0) %$ 4,191 $ 1,177 28.1 % Adjustments(a) 1,053 296 - - Tax adjustment(b) 482 (316) ETR-adjusted$ 3,832 $ 750 19.6 %$ 4,191 $ 861 20.5 % __________ (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. These adjustments include Net income attributable to noncontrolling interests where applicable. 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, 2022 March 31, 2021 Net income (loss) attributable to stockholders $ 9.9 $ 9.2 Average equity(a) $ 59.6 $ 45.7 ROE 16.7 % 20.0 % __________
(a)Includes equity of noncontrolling interests where the corresponding earnings (loss) are included in Net income (loss) attributable to stockholders.
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GENERAL MOTORS COMPANY AND SUBSIDIARIES The following table summarizes the calculation of ROIC-adjusted (dollars in billions): Four Quarters Ended March 31, 2022 March 31, 2021 EBIT (loss)-adjusted(a) $ 13.9 $ 12.9 Average equity(b) $ 59.6 $ 45.7
Add: Average automotive debt and interest liabilities (excluding finance leases)
16.9 24.7 Add: Average automotive net pension & OPEB liability 14.0 17.8 Less: Average automotive and other net income tax asset (21.8) (23.8) ROIC-adjusted average net assets $ 68.8 $ 64.4 ROIC-adjusted 20.2 % 20.0 % __________ (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 strategy to invest in EVs and AVs, software-enabled services and subscriptions and new business opportunities, while strengthening our market position in profitable internal combustion engine vehicles, such as trucks and SUVs. We have committed to an all-electric future with a core focus on zero-emission battery EVs as part of our long-term strategy. We plan to 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 automotive industry andGM are currently experiencing supply chain challenges, including the continuing global semiconductor supply shortage, which continues to impact multiple suppliers. We will continue prioritizing our most popular and in-demand vehicles, including our full-size trucks, full-size SUVs and EVs. We do not expect these challenges to impact our long-term growth and EV initiatives. InJune 2021 , we announced plans to increase our investment in EVs and AVs from$27.0 billion to more than$35.0 billion , through 2025, to accelerate battery and EV assembly capacity. We continue to monitor the impact of the COVID-19 pandemic, and government actions and measures taken to prevent its spread, and the potential to affect our operations. Refer to Part I, Item 1A. Risk Factors of our 2021 Form 10-K for further discussion of these risks. 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 and services prices driven by inflationary pressures, evolving trade policy and political uncertainty. Refer to Part I, Item 1A. Risk Factors of our 2021 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.
For the year ending
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The following table reconciles expected Net income attributable to stockholders
under
Year EndingDecember 31 ,
2022
Net income attributable to stockholders $
9.6-11.2
Income tax expense
1.6-2.0
Automotive interest expense, net 0.8 Adjustments(a) 1.0 EBIT-adjusted(b)$ 13.0-15.0 ________ (a)Refer to the reconciliation of Net income (loss) attributable to stockholders underU.S. GAAP to EBIT (loss)-adjusted within the MD&A for the details of each individual adjustment. (b)We do not consider the potential future impact of adjustments on our expected financial results.
The following table reconciles expected EPS-diluted under
Year EndingDecember 31, 2022 Diluted earnings per common share$ 5.76-6.76 Adjustments(a) 0.74 EPS-diluted-adjusted(b)$ 6.50-7.50 ________ (a)Refer to the reconciliation of diluted earnings (loss) per common share underU.S. GAAP to EPS-diluted-adjusted within the MD&A for the details of each individual adjustment. (b)We do not consider the potential future impact of adjustments on our expected financial results. GMNA Industry sales inNorth America were 4.1 million units in the three months endedMarch 31, 2022 , representing a decrease of 14.3% compared to the corresponding period in 2021.U.S. industry sales were 3.4 million units in the three months endedMarch 31, 2022 , representing a decrease of 15.7% compared to the corresponding period in 2021. Our total vehicle sales in theU.S. , our largest market inNorth America , were 0.5 million units for market share of 15.2% in the three months endedMarch 31, 2022 , representing a decrease of 0.8 percentage points compared to the corresponding period in 2021. We expect to sustain relatively strong EBIT-adjusted margins in 2022 on the continued strength of favorable vehicle pricing and strongU.S. industry light vehicle demand, partially offset by higher costs associated with commodities, raw materials and logistics. Our outlook is dependent on the pricing environment, continuing improvement of supply chain challenges and overall economic conditions. As a result of supply chain challenges, we experienced interruptions to our planned production schedules and continue to prioritize production of our most popular and in-demand products, including our full-size trucks, full-size SUVs and EVs. Additionally, we have been manufacturing vehicles without the impacted components and expect to hold these vehicles in our inventory until they are completed and sold to our dealers. GMI Industry sales inChina were 5.8 million units in the three months endedMarch 31, 2022 , representing a decrease of 13.4% compared to the corresponding period in 2021. Our total vehicle sales inChina were 0.6 million units for market share of 10.6% in the three months endedMarch 31, 2022 , representing a decrease of 1.1 percentage points compared to the corresponding period in 2021, reflecting the impact of the semiconductor shortage and COVID-19 restrictions on global original equipment manufacturers. The ongoing global semiconductor supply shortage, macro-economic impact and local restrictions due to COVID-19 and geopolitical tensions continue to place pressure onChina's automotive industry and our vehicle sales inChina . Our Automotive China JVs generated equity income of$0.2 billion in the three months endedMarch 31, 2022 . 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 upon our strong brands, network, and partnerships inChina as well as drive improvements in vehicle mix and cost. Outside ofChina , industry sales were 5.8 million units in the three months endedMarch 31, 2022 , representing a decrease of 6.9% compared to the corresponding period in 2021. Our total vehicle sales outside ofChina were 0.2 million units for a market share of 3.7% in the three months endedMarch 31, 2022 , representing an increase of 0.2 percentage points compared to the corresponding period in 2021. 28
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Table of Contents GENERAL MOTORS COMPANY AND SUBSIDIARIES We historically operated a small import business inRussia and soldGM -badged vehicles intoRussia throughGM's alliance partner inUzbekistan .GM's current direct and indirect profitability inRussia is insignificant. WithRussia's recent invasion ofUkraine , western sanctions onRussia have and may continue to progressively increase. In addition, reputational, legal and other concerns may impact our ability to operate inRussia . As of the end of February, we suspended our exports intoRussia and instructed our Russian sales company to cease selling vehicles withinRussia . In April, we took additional actions to extend the suspension of our Russian business, including the cessation of commercial operations. We continue to monitor the evolving situation. Because of the deteriorating business environment inRussia and ongoing sanctions, our ability to operate inRussia in the future is uncertain. In the event we were to lose control of our Russian sales company or are otherwise unable to operate again inRussia , we would expect to record a non-cash charge of approximately$0.6 billion to write off our investment and release accumulated translation losses. These charges would be considered special for EBIT-adjusted and EPS-diluted-adjusted purposes. We also expect to incur insignificant cash charges for employee severance and other local obligations. In addition, we are monitoring the situation and its macroeconomic impacts on our financial position and results of operations. Cruise Gated by safety and regulation, Cruise continues to make significant progress towards commercialization of a network of on-demand AVs inthe United States and globally. In 2021, Cruise received a driverless test permit from theCalifornia Public Utilities Commission (CPUC) to provide unpaid rides to the public in driverless vehicles and received approval of its Autonomous Vehicle Deployment Permit from theCalifornia Department of Motor Vehicles to commercially deploy driverless AVs. Cruise will need one additional permit from the CPUC to charge the public for driverless rides inCalifornia . Refer to the "Liquidity and Capital Resources" section of this MD&A for information aboutGM's additional investment in Cruise. 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, 2022 , 28.4% 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, 2022 March 31, 2021 GMNA 694 83.5 % 664 80.9 % GMI 137 16.5 % 157 19.1 % Total 831 100.0 % 821 100.0 % 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 business. Total vehicle sales data for periods presented prior to 2022 reflect courtesy transportation vehicles used byU.S. dealers in their business; beginning in 2022, we stopped including such dealership courtesy transportation vehicles in total vehicle sales until such time as those vehicles were sold to the end customer. 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
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The following table summarizes industry and
Three Months Ended March 31, 2022 March 31, 2021 IndustryGM Market Share IndustryGM Market ShareNorth America United States 3,383 513 15.2 % 4,014 642 16.0 % Other 687 88 12.8 % 735 104 14.2 %Total North America 4,070 601 14.8 % 4,749 746 15.7 %Asia/Pacific ,Middle East and AfricaChina (a) 5,796 613 10.6 % 6,696 780 11.7 % Other 5,016 122 2.4 % 5,357 100 1.9 % TotalAsia/Pacific ,Middle East andAfrica 10,811 735 6.8 % 12,053 880 7.3 %South America Brazil 405 50 12.4 % 528 75 14.2 % Other 388 40 10.3 % 357 43 12.0 % TotalSouth America 793 90 11.4 % 885 118 13.3 % Total inGM markets 15,675 1,426 9.1 % 17,688 1,744 9.9 % TotalEurope 3,742 - - % 3,939 - - % Total Worldwide(b)(c) 19,416 1,427 7.3 % 21,627 1,744 8.1 %United States Cars 670 47 7.0 % 857 61 7.1 % Trucks 883 287 32.5 % 1,059 307 29.0 % Crossovers 1,830 179 9.8 % 2,098 274 13.1 % TotalUnited States 3,383 513 15.2 % 4,014 642 16.0 %China (a) SGMS 263 347 SGMW 350 433 TotalChina 5,796 613 10.6 % 6,696 780 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. (c)As of March 2022, GM is no longer importing vehicles or parts toRussia ,Belarus and other sanctioned provinces inUkraine . 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, 2022 March 31, 2021 GMNA 142 133 GMI 67 60 Total fleet sales 209 193 Fleet sales as a percentage of total vehicle sales 14.7 % 11.1 % 30
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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 were sustained at high levels for the three months endedMarch 31, 2022 , primarily due to low new vehicle inventory. The high levels of used vehicle prices also resulted in gains on terminations of leased vehicles of$0.4 billion included in GM Financial interest, operating and other expenses for the three months endedMarch 31, 2022 and 2021. For the remainder of 2022, GM Financial expects used vehicle prices to decrease relative to 2021 levels, but to remain above pre-pandemic levels, primarily due to sustained low new vehicle inventory. The following table summarizes the estimated residual value based on GM Financial's most recent estimates and the number of units included in GM Financial Equipment on operating leases, net by vehicle type (units in thousands):March 31, 2022
Residual Value Units Percentage Residual Value Units Percentage Crossovers$ 16,134 850 67.2 % $ 16,696 897 67.3 % Trucks 7,741 256 20.3 % 7,886 264 19.8 % SUVs 2,952 75 5.9 % 3,104 80 5.9 % Cars 1,278 83 6.5 % 1,430 93 7.0 % Total$ 28,105 1,264 100.0 % $ 29,116 1,334 100.0 % GM Financial's penetration of our retail sales in theU.S. was 46% in the three months endedMarch 31, 2022 and 44% in the corresponding period in 2021. 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 79% in the three months endedMarch 31, 2022 from 72% in the three months endedMarch 31, 2021 . In the three months endedMarch 31, 2022 ,GM Financial's revenue consisted of leased vehicle income of 65%, retail finance charge income of 30% 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, 2022 March 31, 2021 (Unfavorable) % Volume Mix Price Other (Dollars in billions) GMNA$ 29,456 $ 25,957 $ 3,499 13.5 %$ 1.0 $ 0.4 $ 1.8 $ 0.3 GMI 3,313 3,086 227 7.4 %$ (0.3) $ 0.3 $ 0.2 $ - Corporate 53 19 34 n.m. $ - $ - Automotive 32,823 29,062 3,761 12.9 %$ 0.7 $ 0.7 $ 2.1 $ 0.3 Cruise 26 30 (4) (13.3) % $ - GM Financial 3,156 3,407 (251) (7.4) %$ (0.3) Eliminations/reclassifications (26) (25) (1) 4.0 % $ - $ -
Total net sales and revenue
$ 3,505 10.8 %$ 0.7 $ 0.7 $ 2.1 $ - __________ n.m. = not meaningful
Refer to the regional sections of this MD&A for additional information on volume, mix and price.
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Automotive and Other Cost of Sales
Three Months Ended Variance Due To March 31, Favorable/ March 31, 2022 2021 (Unfavorable) % Volume Mix Cost Other (Dollars in billions) GMNA$ 25,096 $ 21,962 $ (3,134) (14.3) %$ (0.7) $ (0.5) $ (2.0) $ - GMI 3,015 2,897 (118) (4.1) %$ 0.3 $ (0.2) $ (0.1) $ - Corporate 112 29 (83) n.m. $ -$ (0.1) $ - Cruise 1,132 227 (905) n.m.$ (0.9) Eliminations - - - - % $ - $ - Total automotive and other cost of sales$ 29,353 $ 25,115 $ (4,238) (16.9) %$ (0.5) $ (0.7) $ (3.1) $ - __________ n.m. = not meaningful In the three months endedMarch 31, 2022 , increased Cost was primarily due to: (1) increased material and freight costs of$1.1 billion ; (2) increased costs of$0.8 billion related to modification of Cruise stock incentive awards; (3) increased manufacturing costs of$0.5 billion ; (4) increased costs of$0.3 billion primarily related to parts and accessories sales; and (5) increased engineering costs of$0.2 billion primarily related to accelerating our EV portfolio.
Refer to the regional sections of this MD&A for additional information on volume and mix.
Automotive and Other Selling, General and Administrative Expense
Three Months Ended Favorable/ March 31, 2022 March 31, 2021 (Unfavorable) % Automotive and other selling, general and administrative expense$ 2,504 $ 1,803$ (701) (38.9) % In the three months endedMarch 31, 2022 , Automotive and other selling, general and administrative expense increased primarily due to increased costs of$0.3 billion related to modification of Cruise stock incentive awards and several insignificant items.
Interest Income and Other Non-operating Income, net
Three Months Ended Favorable/ March 31, 2022 March 31, 2021 (Unfavorable) % Interest income and other non-operating income, net$ 517 $ 799$ (282) (35.3) % Interest income and other non-operating income, net decreased primarily due to$0.2 billion in losses in the three months endedMarch 31, 2022 compared to$0.2 billion in gains in the three months endedMarch 31, 2021 related to Stellantis warrants.
Income Tax Expense (Benefit)
Three Months Ended Favorable/ March 31, 2022 March 31, 2021 (Unfavorable) % Income tax expense (benefit)$ (28) $ 1,177$ 1,205 n.m. _________ n.m. = not meaningful
In the three months ended
For the three months ended
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Refer to Note 15 to our condensed consolidated financial statements for additional information related to Income tax expense (benefit).
GM North America Three Months Ended Favorable / Variance Due ToMarch 31, 2022 March 31, 2021 (Unfavorable) % Volume Mix Price Cost Other (Dollars in billions) Total net sales and revenue$ 29,456 $ 25,957 $ 3,499 13.5 %$ 1.0 $ 0.4 $ 1.8 $ 0.3 EBIT (loss)-adjusted$ 3,141 $ 3,134 $ 7 0.2 %$ 0.3 $ (0.1) $ 1.8 $ (2.2) $ 0.1 EBIT (loss)-adjusted margin 10.7 % 12.1 % (1.4) % (Vehicles in thousands) Wholesale vehicle sales 694 664 30 4.5 % GMNA TotalNet Sales and Revenue In the three months endedMarch 31, 2022 , Total net sales and revenue increased primarily due to: (1) favorable price primarily due to lower incentives as a result of low dealer inventory levels; (2) increased net wholesale volumes primarily due to increased sales of full-size pickup trucks and full-size SUVs; (3) favorable mix associated with increased sales of full-size SUVs and full-size pickup trucks, and lower sales of certain passenger cars, partially offset by increased sales of crossover vehicles. GMNA EBIT (Loss)-Adjusted In the three months endedMarch 31, 2022 , EBIT-adjusted was consistent with the three months endedMarch 31, 2021 primarily due to: (1) favorable price; and (2) increased net wholesale volumes; offset by (3) unfavorable Cost primarily due to increased material and freight cost of$1.0 billion , increased manufacturing cost of$0.4 billion , increased selling, general and administrative costs of$0.2 billion and increased engineering cost including accelerating our EV portfolio.GM International Three Months Ended Favorable / Variance Due To March 31, 2022 March 31, 2021 (Unfavorable) % Volume Mix Price Cost Other
(Dollars in billions)
Total net sales and revenue
7.4 %$ (0.3) $ 0.3 $ 0.2 $ -
EBIT (loss)-adjusted $ 328 $ 308 $
20 6.5 %$ (0.1) $ 0.1 $ 0.2 $ (0.1) $ (0.2) EBIT (loss)-adjusted margin 9.9 % 10.0 % (0.1) % Equity income (loss) - Automotive China $ 234 $ 308 $ (74) (24.0) % EBIT (loss)-adjusted - excluding Equity income $ 94 $ - $ 94 n.m. (Vehicles in thousands) Wholesale vehicle sales 137 157 (20) (12.7) % __________ 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, 2022 , Total net sales and revenue increased primarily due to: (1) favorable mix inSouth America ,Asia/Pacific and theMiddle East ; and (2) favorable pricing across multiple vehicle lines inSouth America ; partially offset by (3) decreased wholesale volumes due to supply chain constraints, including the semiconductor shortage. 33
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GENERAL MOTORS COMPANY AND SUBSIDIARIES GMI EBIT (Loss)-Adjusted In the three months endedMarch 31, 2022 , EBIT-adjusted increased primarily due to: (1) favorable price; and (2) favorable mix; partially offset by (3) decreased wholesale volumes; (4) unfavorable Cost primarily due to increased material costs; and (5) unfavorable Other primarily due to decreased equity income and foreign currency effect resulting from the weakening of various currencies against theU.S. dollar. 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 while we are accelerating the development and rollout of EVs across our brands inChina in response to our commitment to an all-electric future. 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, 2022 March 31, 2021 Wholesale vehicle sales, including vehicles exported to markets outside of China 602 675 Total net sales and revenue$ 8,992 $ 9,875 Net income (loss) $ 505 $ 586 Cruise Three Months Ended March Favorable / 31, 2022 March 31, 2021 (Unfavorable) % Total net sales and revenue(a) $ 26 $ 30$ (4) (13.3) % EBIT (loss)-adjusted(b) $ (325) $ (229)$ (96) (41.9) % __________ (a)Primarily reclassified to Interest income and other non-operating income, net in our condensed consolidated income statements in the three months endedMarch 31, 2022 and 2021. (b)Excludes$1.1 billion in compensation expense in the three months endedMarch 31, 2022 resulting from modification of the Cruise stock incentive awards. Cruise EBIT (Loss)-Adjusted In the three months endedMarch 31, 2022 , EBIT (loss)-adjusted increased primarily due to an increase in development costs as we progress towards the commercialization of a network of on-demand AVs inthe United States and globally. GM Financial Three Months Ended Increase/ March 31, 2022 March 31, 2021 (Decrease) % Total revenue$ 3,156 $ 3,407 $ (251) (7.4) % Provision for loan losses $ 122 $ (26)$ 148 n.m. EBT (loss)-adjusted$ 1,284 $ 1,182 $ 102 8.6 %
Average debt outstanding (dollars in billions)
93.9$ (1.1) (1.2) % Effective rate of interest paid 2.5 % 2.8 % (0.3) % __________ n.m. = not meaningful
GM Financial Revenue In the three months ended
GM Financial EBT-Adjusted In the three months endedMarch 31, 2022 , EBT-adjusted increased primarily due to: (1) increased leased vehicle income net of leased vehicle expenses of$0.1 billion primarily due to decreased depreciation on leased vehicles resulting from increased residual value estimates and a decrease in the size of the portfolio, partially offset by a decrease in lease termination gains; (2) decreased interest expense of$0.1 billion primarily due to decreased credit spreads on GM Financial debt, as well as a decrease in the average debt outstanding; partially offset by (3) increased provision for loan 34
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GENERAL MOTORS COMPANY AND SUBSIDIARIES losses of$0.1 billion primarily due to a reduction in reserve levels recorded in the three months endedMarch 31, 2021 as a result of actual credit performance that was better than forecast, as well as favorable expectations for charge-offs and recoveries to reflect improved forecast economic conditions. 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 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 spending and our investments inUltium Cells LLC , our battery joint venture, of approximately$9.0 billion to$10.0 billion annually over the medium term in addition to payments for engineering and product development activities; (2) payments associated with the previously announced vehicle recalls and any other recall-related contingencies; (3) payments to service debt and other long-term obligations, including discretionary and mandatory contributions to our pension plans; and (4) payments associated with the previously announced liquidity program for holders of equity-based incentive awards issued to employees of Cruise pursuant to Cruise's 2018 Equity Incentive Plan, which we expect to be$1.0 billion to$1.5 billion in 2022, with ongoing expenditures thereafter. 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 2021 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 that occur amongst our Automotive, Cruise and GM Financial operations 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, 2021 . Refer to Part II, Item 7. MD&A of our 2021 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$15.5 billion atMarch 31, 2022 andDecember 31, 2021 .Total Automotive borrowing capacity under our credit facilities does not include our 364-day,$2.0 billion facility allocated for exclusive use of 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, 2022 andDecember 31, 2021 . InApril 2022 , we renewed our 364-day,$2.0 billion revolving credit facility allocated for the exclusive use of GM Financial, which now matures onApril 4, 2023 . If available capacity permits, GM Financial continues to have access to our automotive credit facilities. GM Financial did not have borrowings outstanding against any of these facilities atMarch 31, 2022 andDecember 31, 2021 . We had intercompany loans from GM Financial of$0.1 billion and$0.2 billion atMarch 31, 2022 andDecember 31, 2021 , which primarily consisted of commercial loans to dealers we consolidate. We did not have intercompany 35
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GENERAL MOTORS COMPANY AND SUBSIDIARIES
loans to GM Financial at
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, 2022 and determined we are in compliance and expect to remain in compliance in the future.
In
The following table summarizes our Automotive available liquidity (dollars in billions): March 31, 2022 December 31, 2021 Automotive cash and cash equivalents $ 9.3 $ 14.5 Marketable debt securities 8.4 7.1
Automotive cash, cash equivalents and marketable debt securities
17.7 21.6 Available under credit facilities(a) 15.2 15.2Total Automotive available liquidity $ 32.9 $ 36.8
__________
(a)We had letters of credit outstanding under our sub-facility of
The following table summarizes the changes in our Automotive available liquidity (dollars in billions): Three Months Ended March 31, 2022 Operating cash flow $ 1.6 Capital expenditures (1.6) Purchase of SoftBank's equity stake in Cruise (2.1) GM investment in Cruise (1.4) Investment in Ultium Cells LLC (0.2) Other non-operating (0.3) Total change in automotive available liquidity $ (4.0)
Automotive Cash Flow (dollars in billions)
Three Months Ended March 31, 2022 March 31, 2021 Change Operating Activities Net income (loss)$ 2.6 $ 2.7$ (0.1) Depreciation, amortization and impairment charges 1.6 1.3 0.3 Pension and OPEB activities (0.5) (0.6) 0.1 Working capital (0.9) (3.3) 2.4 Accrued and other liabilities and income taxes (1.0) (1.5) 0.5 Other (0.2) 0.3 (0.5) Net automotive cash provided by (used in) operating activities$ 1.6 $ (1.1)$ 2.7 In the three months endedMarch 31, 2022 , the increase in Net automotive cash provided by (used in) operating activities was primarily due to working capital; partially offset by lower dividends received from GM Financial of$0.6 billion . 36
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Table of Contents GENERAL MOTORS COMPANY AND SUBSIDIARIES Three Months Ended March 31, 2022 March 31, 2021 Change Investing Activities Capital expenditures$ (1.6) $ (0.9)$ (0.7) Acquisitions and liquidations of marketable securities, net (1.5) 2.2 (3.7) GM investment in Cruise (1.4) (1.0) (0.4) Investment in Ultium Cells LLC (0.2) - (0.2) Other(a) (2.1) (0.1) (2.0) Net automotive cash provided by (used in) investing activities$ (6.8) $ 0.2$ (7.0) __________
(a)Includes
In the three months ended
Three Months Ended March 31, 2022 March 31, 2021 Change Financing Activities
Net proceeds (payments) from short-term debt $ -
$ (0.2)
Other (0.2) 0.2 (0.4) Net automotive cash provided by (used in) financing activities$ (0.2) $ -$ (0.2) 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, 2022 , net automotive cash provided by operating activities underU.S. GAAP was$1.6 billion , capital expenditures were$1.6 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 Investors Service andStandard & Poor's . All four credit rating agencies currently rate our corporate credit at investment grade. All credit ratings remained unchanged sinceDecember 31, 2021 .
Cruise Liquidity In
Additionally, inMarch 2022 ,GM and Cruise announced a liquidity program for holders of equity-based incentive awards issued to the employees of Cruise pursuant to Cruise's 2018 Equity Incentive Plan, under whichGM will purchase newly issued Cruise common stock to fund the withholding tax on vested awards andGM will conduct tender offers for Cruise common stock issued to settle vested awards. Refer to Note 16 to our condensed consolidated financial statements for additional information. 37
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The following table summarizes Cruise's available liquidity (dollars in billions):
March 31, 2022 December 31 ,
2021
Cruise cash and cash equivalents $ 2.6 $
1.6
Cruise marketable securities 1.5
1.5
Total Cruise available liquidity(a) $ 4.1 $
3.1
__________
(a)Excludes a multi-year credit agreement between Cruise and GM Financial
whereby Cruise can request to borrow, over time, up to an aggregate of
The following table summarizes the changes in Cruise's available liquidity (dollars in billions): Three Months Ended March 31, 2022 Operating cash flow $ (0.3) GM investment in Cruise 1.4 Total change in Cruise available liquidity $
1.0
Cruise Cash Flow (dollars in billions)
Three
Months Ended
March 31, 2022 March 31, 2021 Change
Net cash provided by (used in) operating activities
$ (0.2)$ (0.1) Net cash provided by (used in) investing activities $ - $ (0.9)$ 0.9 Net cash provided by (used in) financing activities$ 1.3 $ 2.5$ (1.2) 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 proceeds 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, 2022 December 31, 2021 Cash and cash equivalents $ 4.5 $ 4.0 Borrowing capacity on unpledged eligible assets 21.8 19.2 Borrowing capacity on committed unsecured lines of credit 0.6 0.5
Borrowing capacity on revolving credit facility, exclusive to GM Financial
2.0 2.0 Total GM Financial available liquidity $ 29.0 $ 25.7 AtMarch 31, 2022 , GM Financial's available liquidity increased fromDecember 31, 2021 due to increased available borrowing capacity on unpledged eligible assets, resulting from the issuance of securitization transactions and unsecured debt, and increase in cash and cash equivalents. 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, 2022 , secured, committed unsecured and uncommitted unsecured credit facilities totaled$26.2 billion ,$0.7 billion and$1.2 billion with advances outstanding of$1.6 billion , an insignificant amount and$1.2 billion . 38
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GM Financial Cash Flow (dollars in billions)
Three
Months Ended
March 31, 2022 March 31, 2021 Change
Net cash provided by (used in) operating activities
$ 1.5$ (0.3)
Net cash provided by (used in) investing activities
$ (1.6)$ 0.6 Net cash provided by (used in) financing activities$ 0.5 $ 1.4$ (0.9) In the three months endedMarch 31, 2022 , Net cash provided by operating activities decreased primarily due to: (1) a decrease in leased vehicle income of$0.3 billion ; and (2) a decrease in derivative collateral posting activities of$0.2 billion ; partially offset by (3) a decrease in interest paid of$0.2 billion . In the three months endedMarch 31, 2022 , Net cash used in investing activities decreased primarily due to: (1) a decrease in purchases of leased vehicles of$3.1 billion ; partially offset by (2) a decrease in the proceeds from termination of leased vehicles of$1.2 billion ; (3) a decrease in collections and recoveries on finance receivables of$0.9 billion ; and (4) an increase in purchases and originations of finance receivables of$0.4 billion .
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 2021 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, technologies 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 EVs, that are able to attract a sufficient number of consumers; (3) our ability to profitably deliver a broad portfolio of EVs that will help drive consumer adoption; (4) the success of our current line of full-size SUVs and full-size pickup trucks; (5) our highly competitive industry, which has been historically characterized by excess manufacturing capacity and the use of incentives, and the introduction of new and improved vehicle models by our competitors; (6) the unique technological, operational, regulatory and competitive risks related to the timing and commercialization of AVs; (7) risks associated with climate change, including increased regulation of greenhouse gas emissions, our transition to EVs and the potential increased impacts of severe weather events; (8) global automobile market sales volume, which can be volatile; (9) prices and uncertain availability of raw materials and commodities used by us and our suppliers, and instability in logistics and related costs; (10) our business inChina , which is subject to unique operational, competitive, regulatory and economic risks; (11) the success of our ongoing strategic business relationships and of our joint ventures, which we cannot operate solely for our benefit and over which we may have limited control; (12) 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, trade, tax and other laws), political 39
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GENERAL MOTORS COMPANY AND SUBSIDIARIES uncertainty or 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, 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, difficulties in obtaining financing in foreign countries, and public health crises, including the occurrence of a contagious disease or illness, such as the COVID-19 pandemic; (13) any significant disruption, including any work stoppages, at any of our manufacturing facilities; (14) the ability of our suppliers to deliver parts, systems and components without disruption and at such times to allow us to meet production schedules; (15) the ongoing COVID-19 pandemic; (16) the success of any restructurings or other cost reduction actions; (17) 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; (18) 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; (19) 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; (20) our ability to comply with extensive laws, regulations and policies applicable to our operations and products, including those relating to fuel economy, emissions and AVs; (21) costs and risks associated with litigation and government investigations; (22) the costs and effect on our reputation of product safety recalls and alleged defects in products and services; (23) any additional tax expense or exposure; (24) our continued ability to develop captive financing capability through GM Financial; and (25) 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 2021 Form 10-K and our subsequent filings with theSEC .
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.
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