GM Stock: GM Reports Third Quarter Financial Results DETROIT, Nov. 7 /PRNewswire/ -- -- Unprecedented economic and credit market turmoil dramatically impacts auto industry and GM results -- Market volatility results in $1.5 billion i
DETROIT, Nov. 7 /PRNewswire/ --
-- Unprecedented economic and credit market turmoil dramatically impacts auto industry and GM results -- Market volatility results in $1.5 billion in non-cash charges for commodity and currency hedging -- Company anticipates soft U.S. market for remainder of 2008 and into 2009 -- Emerging markets beginning to show impact of credit crisis
Third Quarter 2008 2007* O/(U) 2007
Revenue (bils.): $37.9 $43.7 $(5.8) Adjusted automotive earnings before tax (bils.): $(2.8) $0.1 $(2.9) Reported automotive earnings before tax (bils.): $(.95) $(1.6) $.65 Adjusted net income (bils.): $(4.2) $(1.6) $(2.6) Reported net income (bils.): $(2.5) $(42.5) $40.0 Reported earnings per share: $(4.45) $(75.12) $70.67 Adjusted operating cash flow (bils): $(6.9) $(2.5) $(4.4) * 2007 figures reflect continuing operations
General Motors (NYSE: GM) today announced its financial results for the
third quarter of 2008, reflecting rapidly deteriorating market conditions in
the U.S., slowdowns in other mature markets around the world, and continued
losses at GMAC Financial Services (GMAC).
During the third quarter the turmoil in the global credit markets resulted
in the worst financial crisis in more than 70 years. The upheaval has had a
dramatic impact on the auto business in particular, especially in the U.S. and
Western Europe.
Tight credit, rising unemployment, declining income, falling stock
markets, and continuing deterioration in the housing market in the U.S.,
resulted in an abrupt halt in consumer spending, with most consumers exiting
the vehicle market. Many of those still intending to purchase vehicles were
denied financing, or found the cost of financing prohibitive.
'The third quarter was especially challenging for the auto industry.
Consumer spending, which represents close to 70 percent of the U.S. economy,
fell dramatically, and the abrupt closure of credit markets created a downward
spiral in vehicle sales,' said Rick Wagoner, Chairman and Chief Executive
Officer. 'The U.S. government's actions to help stabilize the credit markets
and eventually ease the credit crunch are an essential first step to the
economy's and the auto industry's recovery, but further strong action is
required.'
GM reported a net loss of $2.5 billion or $4.45 per share for the third
quarter, including special items. That compares with a net loss from
continuing operations of $42.5 billion or $75.12 per share in the third
quarter of 2007, which included a non-cash charge of $38.3 billion to
establish a valuation allowance against some of the company's net deferred tax
assets.
On an adjusted basis, GM posted a net loss of $4.2 billion or $7.35 per
share, compared with a net loss from continuing operations of $1.6 billion or
$2.86 per share in the same period last year.
Revenue for the third quarter was $37.9 billion, down from $43.7 billion
in the year-ago quarter, reflecting dramatic sales declines across the
industry driven by unstable market conditions, instability in the credit
markets and dramatic retraction in consumer demand, especially in North
America and Europe.
GM recorded net favorable charges of $1.7 billion for special items in the
third quarter. Included in the charges was a curtailment gain of $4.9 billion
resulting from the UAW Settlement Agreement becoming effective. The
curtailment represents the accelerated recognition of net prior service
credits, largely relating to the 2005 GM UAW healthcare agreement, scheduled
for amortization after January 1, 2010.
The curtailment was recorded because GM's UAW retiree health plan will not
exist after January 1, 2010, and therefore no further basis for deferring
unamortized prior service credits exists beyond that date. The $4.9 billion
curtailment gain was partially offset by a non-cash $1.7 billion settlement
charge related to the elimination of post-65 salaried retiree healthcare
coverage, including the cost of increased pension benefits that were announced
in July as part of GM's operating actions to improve liquidity as well as the
recognition of accumulated deferred losses related to the healthcare plan.
In addition, GM reported charges of $652 million relating to its
commitments as part of Delphi's bankruptcy proceedings, $251 million for
impairment of investments in GMAC, and $641 million in restructuring-related
and other charges. Details on these and all other special items are in the
financial highlights section of this release.
GM Automotive Operations
GM reports its automotive operations and regional results on an earnings-
before-tax basis, with taxes reported on a total corporate basis.
GM recorded an adjusted automotive loss of $2.8 billion ($947 million
reported loss) in the third quarter 2008. The loss compares with adjusted
automotive earnings from continuing operations of $98 million in the third
quarter of 2007 (reported net loss of $1.6 billion).
The results reflect losses in GM North America (GMNA) driven largely by
the U.S. industry volume decline of nearly 20 percent, and shifts in product
mix. In addition, Europe saw rapid auto market contraction, leading to
sharply lower GM Europe (GME) sales volume in the third quarter. GM Asia
Pacific (GMAP) results were down due to commodity hedging charges and
moderating demand in key markets including China, Australia and India. These
losses were partially offset by very strong results in the GM Latin America,
Africa and Middle East (GMLAAM) region.
GM's automotive results in the third quarter include $1.5 billion of expenses
related to mark-to-market changes in the value of GM's commodity and foreign
exchange hedging contracts, due almost entirely to falling commodity prices.
GM sold 2.1 million vehicles worldwide in the third quarter, down 11
percent year over year. Sales in GMNA were down 19 percent compared to third
quarter 2007. GM global market share was 13 percent, down 0.7 percentage
points compared with the third quarter of 2007, due largely to weakness in
North America and Western Europe.
GMNA Third Quarter 2008 2007 '08 O/(U) '07
Revenue (bils.) $22.5 $26.6 $(4.1) Adjusted Earnings Before Tax $(2.3) bil. $(298) mil. $(2.0) bil. Reported Earnings Before Tax $(395) mil. $(1.8) bil. $1.4 bil. GM Market Share 23.4% 24.4% (1.0) p.p.
GMNA revenue and earnings in the third quarter reflect dramatic industry
deterioration and a sharp fall in consumer spending driven by the weak U.S.
economy and a very harsh credit environment. Earnings were impacted by lower
volumes, rapid shifts among U.S. consumers away from trucks and SUVs toward
smaller cars, and unfavorable mark-to-market adjustments on commodity hedging.
GME Third Quarter 2008 2007 '08 O/(U) '07
Revenue (bils.) $7.5 $8.8 $(1.3) Adjusted Earnings Before Tax (mils.) $(974) $(136) $(838) Reported Earnings Before Tax $(1.0) bil. $(398) mil. $(602) mil. GM Market Share 8.9% 9.5% (0.6) p.p.
GME revenue was down 15 percent in the third quarter amid industry-wide
volume declines ranging from 10 to 35 percent in certain major markets
including the U.K., Spain and Italy. Overall GME sales volume was down 12.3
percent year over year, while up 10 percent in Eastern Europe. Earnings were
largely impacted by the lower volumes, and unfavorable mix and negative
pricing. In addition, unfavorable foreign exchange relating to the weakening
of the British pound and the mark-to-market of commodity hedges negatively
impacted earnings. Results were partially offset by favorable structural cost
performance.
Results in GMAP were impacted primarily by unfavorable mix and negative
pricing. In addition, GMAP results were impacted by unfavorable hedging,
which was largely offset by the favorable foreign exchange impact of exports.
Industry sales for the region were down by 134,000 units or 2.7 percent in
the third quarter. Despite the slowdown, GM reported a 2.6 percent increase
in sales volume, and modest gain in market share. Markets in the GMAP region
are expected to remain soft through the fourth quarter, with further slow
downs anticipated in Australia, China, South Korea and India as the contagion
of the faltering U.S. economy and tightening credit conditions expand to other
regions around the world.
GMLAAM saw double-digit revenue growth, up 15 percent, and earnings, up 37
percent, in the third quarter, fueled by strong demand for Chevrolet and
Cadillac products. GMLAAM sales volume was up more than 3 percent compared to
the same period last year. Sales were especially strong in key South America
markets, including Brazil, Chile, Ecuador and Peru, each setting all-time GM
quarterly sales records. The region is on track for another year of record
sales, although the effects of the global economic slowdown on credit
availability and consumer behavior are likely to result in some moderation of
demand in the fourth quarter.
GMAC
On a standalone basis, GMAC reported a net loss of $2.5 billion for the
third quarter 2008, down $900 million from the year-ago quarter. GM reported
an adjusted loss of $1.2 billion for the quarter attributable to GMAC, as a
result of its 49 percent equity interest.
GMAC's automotive finance operation experienced pressure from lower used
vehicle prices and weaker consumer and dealer credit performance. GMAC's
ResCap operations reported further losses as a result of adverse market
conditions, which drove high credit-related provisions and weak revenue.
GMAC's Insurance business remained profitable.
Cash and Liquidity
Cash, marketable securities, and readily-available assets of the Voluntary
Employees' Beneficiary Association (VEBA) trust totaled $16.2 billion on
September 30, 2008, down from $21.0 billion on June 30, 2008.
The change in liquidity reflects negative adjusted operating cash flow of
$6.9 billion in the third quarter 2008, driven by the industry-wide slowdown
in vehicle demand and compounding credit crisis, especially in North America
and Europe. During the quarter, GM drew the remaining $3.5 billion of its
secured revolving credit facility and made $1.2 billion in payments to Delphi
as required by agreements between the companies as part of Delphi's bankruptcy
proceedings.
GM expects adjusted operating cash flow in the fourth quarter to be much
improved versus the third quarter, and more consistent with the first half of
the year. Improvements in fourth quarter cash flow are largely driven by
anticipated improvements in working capital in North America relating to sales
allowances, and lower fourth quarter finished vehicle inventory in Europe.
Improving its liquidity position remains a top priority for the company.
In response to deteriorating market conditions, GM announced today that in
addition to the $15 billion in liquidity initiatives it outlined in July 2008,
it has identified $5 billion of incremental liquidity actions. Cumulatively,
GM has announced actions aimed at improving liquidity by $20 billion through
2009. To date, $10 billion in internal operating actions have either already
been completed or are on track for full execution by the end of 2009.
Even if GM implements the planned operating actions that are substantially
within its control, GM's estimated liquidity during the remainder of 2008 will
approach the minimum amount necessary to operate its business. Looking into
the first two quarters of 2009, even with its planned actions, the company's
estimated liquidity will fall significantly short of that amount unless
economic and automotive industry conditions significantly improve, it receives
substantial proceeds from asset sales, takes more aggressive working capital
initiatives, gains access to capital markets and other private sources of
funding, receives government funding under one or more current or future
programs, or some combination of the foregoing. The success of GM's plans
necessarily depends on other factors, including global economic conditions and
the level of automotive sales, particularly in the United States and Western
Europe.
Further detail on the additional liquidity actions and GM's current
liquidity position and outlook will be disclosed in a Form 8-K filing with the
Securities and Exchange (SEC) later today.
Forward Looking Statements
In these and following presentations and in related comments by General
Motors management, we will use words like 'expect,' 'anticipate,' 'estimate,'
'forecast,' 'objective,' 'plan,' 'goal,' 'project,' 'outlook,' 'targets,' and
similar expressions to identify forward looking statements that represent our
current judgments about possible future events. We believe these judgments
are reasonable, but actual results may differ materially due to a variety of
important factors.
Among other items, such factors include: our ability to maintain adequate
liquidity and financing sources and an appropriate level of debt; continued
economic instability or poor economic conditions in the U.S. and global
markets, including the credit markets, or changes in economic conditions,
commodity prices, housing prices, currency exchange rates or political
stability in the markets in which we operate; our ability to realize
production efficiencies, to reduce costs and implement capital expenditures at
levels and times planned by management; market acceptance of our products
including cars and crossovers; shortages of and price increases for fuel; the
ability of our customers, dealers, distributors and suppliers to obtain
adequate financing on acceptable terms to continue their business
relationships with us; significant changes in the competitive environment,
including as a result of industry consolidation, and the effect of competition
on our markets, including on our pricing policies or use of incentives;
changes in the existing, or the adoption of new laws, regulations, policies or
other activities of governments, agencies and similar organizations where such
actions may affect the production, licensing, distribution or sale of our
products, the cost thereof or applicable tax rates; the effectiveness of
recent or future actions by the U.S. federal government, including the $25
billion loan program for automobile manufacturers and suppliers and recently
enacted legislation relating to mortgage assets; costs and risks associated
with litigation; the final results of investigations and inquiries by the SEC;
changes in accounting principles, or their application or interpretation, and
our ability to make estimates and the assumptions underlying the estimates,
including the estimates for the Delphi pension benefit guarantees, which could
result in an effect on earnings; negotiations and bankruptcy court actions
with respect to obligations owed to us by Delphi Corporation, a key supplier
and our obligations to Delphi; negotiations with respect to our obligations
under the benefit guarantees to Delphi employees and our ability to recover
any indemnity claims against Delphi; labor strikes or work stoppages at our
facilities or our key suppliers such as Delphi or financial difficulties at
our key suppliers such as Delphi; additional credit rating downgrades and the
effects thereof; changes in relations with unions and employees/retirees and
the legal interpretations of the agreements with those unions with regard to
employees/retirees, including the negotiation of new collective bargaining
agreements with unions representing our employees in the United States other
than the UAW; possible downgrades for GMAC or ResCap by rating agencies;
GMAC's ability to maintain adequate financing sources; developments in the
residential mortgage market, especially the nonprime sector; and changes in
the competitive markets in which GMAC operates, including increased
competition in the automotive financing, mortgage and/or insurance markets or
generally in the markets for securitizations or asset sales.
GM's most recent annual report on Form 10-K and quarterly report on Form
10-Q provide information about these factors, which we may revise or
supplement in future reports to the SEC on Form 10-Q or 8-K.
General Motors Corporation
Use of Non-GAAP Financial Measures
This press release, the accompanying tables and the charts for securities analysts include the following financial measures, which are not prepared in accordance with Accounting Principles Generally Accepted in the United States of America (GAAP): (1) adjusted net income; (2) adjusted earnings before tax; (3) managerial cash flow; and (4) GM North America vehicle revenue per unit. Each of these financial measures is therefore considered a non-GAAP financial measure. This press release and the charts for securities analysts also contain a reconciliation of each non-GAAP financial measure to its most comparable GAAP financial measure.
Management believes these non-GAAP financial measures provide meaningful supplemental information regarding GM's operating results because they exclude amounts that GM management does not consider part of operating results when assessing and measuring the operational and financial performance of the organization. In addition, GM has historically reported similar non-GAAP financial measures and believes that inclusion of these non-GAAP financial measures provides consistency and comparability with past earnings releases. GM management believes these measures allow it to readily view operating trends, perform analytical comparisons, benchmark performance among geographic regions and assess whether the GM North American structural cost turnaround plan is on target. Also, GM management uses adjusted net income and adjusted earnings before tax for forecasting purposes and in determining future capital investment allocations. Accordingly, GM believes these non-GAAP financial measures are useful to investors in allowing for greater transparency of supplemental information used by management in its financial and operational decision-making.
While GM believes that these non-GAAP financial measures provide useful supplemental information, there are limitations associated with the use of these non-GAAP financial measures. These non-GAAP financial measures are not prepared in accordance with GAAP, do not reflect a comprehensive system of accounting and may not be comparable to similarly titled measures of other companies due to potential differences in the method of calculation between companies. Costs such as the special attrition programs and restructuring charges that are excluded from GM's non-GAAP financial measures can have a material effect on net earnings. As a result, these non-GAAP financial measures have limitations and should not be considered in isolation from, or as a substitute for, net earnings, cash flow from operations, or other measures of performance or liquidity prepared in accordance with GAAP. GM compensates for these limitations by using these non-GAAP financial measures as supplements to GAAP financial measures and by providing the reconciliations of the non- GAAP financial measures to their most comparable GAAP financial measures. Investors are encouraged to review the reconciliations of these non-GAAP financial measures to their most comparable GAAP financial measures that are included elsewhere in this press release.
Adjusted Net Income and Adjusted Earnings Before Tax
Adjusted net income excludes charges for certain tax related items, gains and losses on the sale of business units and business interests, charges associated with accounting changes, restructuring, plant closure and impairment charges, charges associated with Delphi Corporation (Delphi), special attrition program charges, and other gains and losses which management excludes when assessing the internal performance of the organization.
Adjusted earnings before tax begins with adjusted net income and is adjusted to remove any remaining tax expense or benefit.
General Motors Corporation
Use of Non-GAAP Financial Measures (Continued)
The following is a discussion of each adjustment to net income or loss determined in accordance with GAAP to arrive at adjusted net income and adjusted earnings before tax, as applicable:
- Tax charges. Charges associated with establishing valuation allowances on GM's deferred tax assets are excluded from adjusted net income. In addition, other tax related items may be periodically excluded from adjusted net income. Management believes the exclusion of these tax charges from adjusted net income is useful because management does not consider these charges part of GM's core earnings in evaluating the performance of the business and excludes these costs when evaluating the performance of the Corporation, its business units and its management team and when making decisions to allocate resources among GM's business units.
- Gains and losses on the sale of business units and business interests. The gains and losses on the sale of business units and business interests are excluded from adjusted net income and adjusted earnings before tax. While GM is involved in sales of its business units and business interests from time to time and may have significant gains or losses from such sales in the future, such events have historically occurred sporadically. Management excludes the gains and losses associated with these events when it evaluates the Corporation's operations and for internal reporting and forecasting purposes and for allocation of additional resources.
- Changes in accounting. Non-GAAP financial measures exclude charges associated with changes in accounting. Management believes the exclusion of changes in accounting from adjusted net income and adjusted earnings before tax is useful because management does not consider these non-recurring charges part of GM's core earnings. Accordingly, management excludes such costs when evaluating the performance of the Corporation, its business units and its management teams and when making decisions to allocate resources among GM's business units.
- Restructuring, plant closure charges and impairments. Non-GAAP financial measures exclude exit costs and related charges, primarily consisting of severance costs, lease abandonment costs, product specific asset impairments, any subsequent changes in estimates related to exit activities and goodwill and other asset impairment charges. Management believes the exclusion of restructuring and impairment charges from adjusted net income and adjusted earnings before tax is useful because management does not consider these costs part of GM's core earnings in evaluating GM's management teams and the exclusion permits investors to evaluate the performance of GM's management the same way management does. Additionally, management excludes restructuring and impairment charges in determining the allocation of resources, such as capital investments, among the Corporation's business units and as part of its forecasting and budgeting.
- Delphi charges. Non-GAAP financial measures exclude the estimated charges associated with the benefit guarantees and comprehensive settlement agreements entered into with Delphi in connection with the restructuring of Delphi's operations. Management does not consider these costs as part of its core earnings for purposes of evaluating the performance of the business, and excludes such costs when evaluating the performance of the Corporation, its business units and its management teams and when making decisions to allocate resources among GM's business units.
- Special attrition program charges. Non-GAAP financial measures exclude the estimated charges associated with: (1) the 2008 special attrition program agreements between GM and the International Union, United Automobile, Aerospace and Agricultural Workers of America (UAW) and GM and the International Union of Electronic, Electrical, Salaried, Machine and Furniture Workers (IUE-CWA) (collectively, 2008 Special Attrition Programs); and (2) the 2006 special attrition program agreement among GM, the UAW and Delphi (2006 Special Attrition Program). Management believes it is useful in evaluating the performance of GM, its management teams and its business units during a particular time period to exclude charges associated with special attrition programs. Accordingly, management does not consider these costs as part of its core earnings, and excludes such costs when evaluating the performance of the Corporation, its business units and its management teams and when making decisions to allocate resources among GM's business units.
- Salaried post-65 healthcare settlements. Non-GAAP financial measures exclude the settlement loss associated with the increased pension benefit and elimination of healthcare coverage for U.S. salaried retirees over the age of 65 beginning January 1, 2009. Management does not consider these costs as part of its core earnings and excludes such costs when evaluating the performance of the Corporation, its business units and its management teams and when making decisions to allocate resources among GM's business units.
- UAW VEBA curtailments. Non-GAAP financial measures exclude the curtailment gain associated with the accelerated recognition of unamortized net prior service credits due to the Settlement Agreement for the UAW hourly medical plan. Management does not consider this gain as part of its core earnings for purposes of evaluating the performance of the business, and excludes such gains when evaluating the performance of the Corporation, its business units and its management teams and when making decisions to allocate resources among GM's business units.
Managerial Cash Flow
GM also reports non-GAAP managerial automotive operating cash flow in its earnings releases and charts for securities analysts. Management believes that providing managerial automotive operating cash flow furnishes it and investors with useful information by representing the cash flow generated or consumed by its automotive operations, including cash consumed by automotive capital expenditures and equity investments in companies related to GM's core business and cash generated by sales of automotive operating assets and equity investments in companies related to GM's core business, before funding non-operating-related obligations including debt maturities, dividends and other non-operating items. Management uses this non-GAAP financial measure to assess its automotive cash flow when evaluating the performance of GM, its business units and its management teams and when making decisions to allocate resources among GM's business units.
GM North America Vehicle Revenue per Unit
GM's charts for securities analysts also include the use of a non-GAAP measure of revenue per vehicle. Management uses revenue per vehicle to track operating efficiency and to facilitate comparisons between periods and between manufacturers, and believes that it provides valuable information to investors who are interested in identifying trends and comparing different companies. Revenue per vehicle includes certain vehicle sales to other GM regions that are excluded from GAAP reporting, and excludes non-vehicle sales such as service parts and operations and OnStar service, and other income that GM does not derive from the sale of vehicles, such as fees on the GM credit card. Also, while they are not treated as sales under GAAP reporting because of GM's repurchase obligations, management includes sales to daily car rental companies in revenue per vehicle.
General Motors Corporation List of Special Items 2008
(Dollars in millions except per share amounts) (Unaudited)
Third Quarter 2008 Year to Date 2008 ------------------- ------------------ Earnings EPS Earnings EPS REPORTED Net Loss - Basic and Diluted * $(2,542) $(4.45) $(21,264) $(37.44)
ADJUSTMENTS Pre-Tax Adjustments: Restructuring and 2008 Special Attrition Programs (A) $642 $5,517 Delphi (B) 652 4,136 Impairment charges related to investment in GMAC LLC (C) 251 3,037 Canadian Auto Workers labor contract (D) -- 340 American Axle (E) -- 197 Gain on sale of investment (F) -- (50) Salaried post-65 healthcare settlement (G) 1,704 1,704 UAW VEBA curtailment gain (H) (4,901) (4,901) Salaried window retirement program (I) 47 47 Gain on sale of Oklahoma City facility (J) (48) (48) ------- ------- (1,653) 9,979 ------- ------- Tax related: Valuation allowance on net deferred tax assets (K) -- 394 ------- -------
Total Adjustments $(1,653) $(2.90) $10,373 $18.26 ======= ====== ======= ======
ADJUSTED Adjusted Loss - Basic and Diluted * $(4,195) $(7.35) $(10,891) $(19.18) ======= ====== ======== =======
* See average shares outstanding.
General Motors Corporation List of Special Items 2008
(Unaudited)
(A) Relates to various restructuring initiatives and the 2008 Special Attrition Programs. Charges recorded by region are as follows:
GMNA: Third quarter charges of $22 million were recorded for the 2008 Special Attrition Programs. We have recorded year to date charges of $3.5 billion for preretirement and retirement pension and benefit incentives and cash buyouts for employees leaving under the 2008 Special Attrition Programs.
During the third quarter and year to date, we also recorded charges of $591 million and $1.7 billion, respectively, for additional wage and benefit costs related to the recently announced capacity actions and plant idlings in the U.S. and Canada.
GME: Third quarter charges of $29 million and year to date charges of $231 million were recorded for separation programs, primarily in Belgium, France, Germany and the United Kingdom.
GMAP: Year to date charges of $98 million were recorded for the closure of the Family II engine plant at GM Holden, Ltd. (GM Holden), which was announced in June 2008.
(B) Third quarter charges of $652 million and year to date charges of $4.1 billion were recorded for increased liabilities under the Delphi-GM Settlement Agreements, primarily due to expectations of increased obligations and lower estimates of the expected amount of recoveries associated with the Delphi Benefit Guarantee Agreements, updated to reflect certain conditions related to the credit markets and challenges in the auto industry.
(C) Third quarter charges of $251 million and year to date charges of $3.0 billion to record impairments of GM's investment in Common and
Preferred Membership Interests of GMAC LLC.
(D) Relates to a change in the estimate of the amortization period for pension prior service costs related to the hourly defined benefit pension plan in Canada. In conjunction with the 2008 Canadian Auto Workers (CAW) labor agreement, we determined that the three year contractual life of the labor agreement is a better reflection of the period of future economic benefit received from pension plan amendments for the collectively bargained hourly pension plans. We recorded a year to date charge of $340 million for additional pension expense related to the unamortized prior service costs from prior CAW labor contracts.
(E) Relates to GM's agreement to provide upfront support to American Axle to end the work stoppage that affected approximately 30 GM plants in North America. GM's support partially funds American Axle's costs associated with UAW employee buyouts, early retirements and buydowns.
(F) Relates to a year to date gain of $50 million on the sale of GM's common equity interest in Electro-Motive Diesel, Inc.
(G) Relates to the recognition of a settlement loss associated with the elimination of healthcare coverage for U.S. salaried retirees over age 65 beginning January 1, 2009. The settlement loss was recorded for participants over age 65 at January 1, 2009 and considers the cost of the increased pension benefit provided to those affected participants to help offset the cost of Medicare and supplemental coverage.
(H) Relates to the recognition of a net curtailment gain specific to the accelerated recognition of unamortized net prior service credits due to the Settlement Agreement for the UAW hourly medical plan becoming effective in the third quarter.
(I) Third quarter charges of $47 million were recorded related to the 600 salaried employees who have irrevocably accepted an offer under the Salaried Window Retirement Program as of September 30, 2008.
(J) Relates to a gain on the sale of GM's Oklahoma City facility, which was sold in the third quarter 2008.
(K) Relates to a first quarter net charge for a valuation allowance on GM's net deferred tax assets in Spain and the United Kingdom.
