2nd Aug 2006 07:00
GM Revises Reported Second Quarter Financial Results DETROIT, Aug. 2 / -- General Motors Corporation (NYSE: GM) today said that itis revising its previously reported results for the second quarter of 2006because of a change in the estimated tax provision relating to an expected losson the pending sale of 51 percent interest in GMAC. Its previously announcedadjusted earnings are not affected by this change. GM also said today that it and GMAC are working with the purchasers of 51percent of GMAC equity to try to avoid any delay in closing the GMACtransaction because of a recent moratorium by federal regulators on approval ofcertain bank transactions. On July 26, 2006, GM reported a net loss of $3.2 billion or $5.62 per share,and adjusted earnings, excluding special items, of $1.2 billion or $2.03 pershare, a significant improvement from the year-ago adjusted loss of $231million or $0.41 per share. GM's reported net loss for the quarter has been increased by $200 million, or$0.35 per share, to $3.4 billion or $5.97 per share. The increase in thereported net loss is attributable to the estimated tax provision related to theloss from the announced sale of 51 percent of GM's interest in GMAC to aconsortium of investors. The previously estimated after-tax charge of $490million has been increased to $690 million as the tax provision from the GMACtransaction was adjusted to reflect differences in book value and tax basis atseveral GMAC subsidiaries. The tax increase does not result in a current cash expense to either GM orGMAC. General Motors may adjust the estimated loss on sale from the GMACtransaction each quarter until closing due to potential changes in the othercomprehensive income adjustment, such as mark-to-market valuation, as well asother factors. Separately, on July 28, 2006, the Federal Deposit Insurance Corporation (FDIC)announced a six-month moratorium on the acceptance of, or final decisions on,notices filed under the Change in Bank Control Act with regard to industrialloan companies (ILC). In connection with the GMAC transaction, the consortiumand its members have submitted such notices with respect to GMAC's ILC, GMACAutomotive Bank. GM and GMAC are currently evaluating the effect of the FDIC'saction on these pending notices, but it appears that the timing of any approvalof the notices is likely to be affected by the moratorium. Since FDIC approvalof the Change in Bank Control Act notices with regard to GMAC Automotive Bankis a condition to closing the GMAC Transaction, GM and GMAC are now workingwith the consortium to consider ways to try to avoid delaying the targetedclosing date until 2007.SOURCE General Motors Corporation 08/02/2006 P/NOTE TO EDITORS: For additional media information visit http://media.gm.com .//CONTACT: Toni Simonetti of General Motors Corporation, +1-212-418-6380//Web site: http://media.gm.com http://www.gm.com /(GM)ENDGENERAL MOTORS CORPRelated Shares:
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