##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, DC 20549-1004
 FORM 10-Q/A
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2005
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OF THE SECURITIES EXCHANGE
ACT OF 1934
 For
the transition period from 
to
 Commission
file number 1-143
 GENERAL MOTORS CORPORATION
  STATE OF DELAWARE
    
    38-0572515(State or other jurisdiction of
Incorporation or Organization)
    
    (I.R.S. Employer
Identification No.)300 Renaissance Center, Detroit, Michigan
    
    48265-3000(Address of Principal Executive Offices)
    
    (Zip Code)
 (313) 556-5000
 þ o
  þ o o
 o þ
   www.gm.com




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##### 



GENERAL MOTORS CORPORATION AND SUBSIDIARIES
 INDEX
 Page No.Explanatory Note
    
    
    3Part I  Financial InformationItem 1.
    
    Condensed
Consolidated Financial Statements (Unaudited)Condensed
Consolidated Statements of Income for the Three Months and Six Months Ended June 30, 2005 (as restated) and 2004 (as restated)
    
    
    4Supplemental
Information to the Condensed Consolidated Statements of Income for the Three Months and Six Months Ended June 30, 2005 (as restated) and 2004 (as
restated)
    
    
    5Condensed
Consolidated Balance Sheets as of June 30, 2005 (as restated), December 31, 2004, and June 30, 2004 (as restated)
    
    
    6Supplemental
Information to the Condensed Consolidated Balance Sheets as of June 30, 2005 (as restated), December 31, 2004, and June 30, 2004 (as
restated)
    
    
    7Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2005 (as restated) and 2004 (as restated)
    
    
    8Supplemental Information to the Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2005 (as restated) and 2004 (as
restated)
    
    
    9Notes
to Condensed Consolidated Financial Statements
    
    
    10Item 2.
    

Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    31Item 4.
    
    Controls and Procedures
    
    
    48Part II  Other InformationItem 6.
    
    Exhibits
    
    
    50Signatures
    
    
    
    
    51CertificationsSection 302 Certification of the Chief Executive OfficerSection 302 Certification of the Chief Financial OfficerCertification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350
  2




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GENERAL MOTORS CORPORATION AND SUBSIDIARIES
 
 EXPLANATORY NOTE
  3




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PART I
 GENERAL MOTORS CORPORATION AND SUBSIDIARIES
 
 ITEM
1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
 CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,(As restated,
    
    
    (As restated,
    
    
    (As restated,
    
    
    (As restated,see Note 1)
    
    
    see Note 1)
    
    
    see Note 1)
    
    
    see Note 1)2005
    
    
    2004
    
    
    2005
    
    
    2004(dollars in millions except per share amounts)Total net sales and revenues
    
    $
    48,469
    
    
    $
    49,293
    
    
    $
    94,242
    
    
    $
    97,155Cost of sales and other expenses
    
    
    40,730
    
    
    
    39,793
    
    
    
    80,229
    
    
    
    78,667Selling, general, and administrative expenses
    
    
    5,432
    
    
    
    5,212
    
    
    
    10,321
    
    
    
    10,200Interest expense
    
    
    3,712
    
    
    
    2,839
    
    
    
    7,391
    
    
    
    5,623Total costs and expenses
    
    
    49,874
    
    
    
    47,844
    
    
    
    97,941
    
    
    
    94,490Income (loss) before income taxes, equity income
and minority interests
    
    
    (1,405
    )
    
    
    1,449
    
    
    
    (3,699
    )
    
    
    2,665Income tax expense (benefit)
    
    
    (245
    )
    
    
    223
    
    
    
    (1,217
    )
    
    
    466Equity income (loss) and minority interests
    
    
    173
    
    
    
    213
    
    
    
    242
    
    
    
    465Net income (loss)
    
    $
    (987
    )
    
    $
    1,439
    
    
    $
    (2,240
    )
    
    $
    2,664Basic earnings (loss) per share attributable to
common stock(Note 9)
    
    $
    (1.75
    )
    
    $
    2.55
    
    
    $
    (3.96
    )
    
    $
    4.72Earnings (loss) per share attributable to
common stock assuming dilution(Note 9)
    
    $
    (1.75
    )
    
    $
    2.53
    
    
    $
    (3.96
    )
    
    $
    4.68
  4




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GENERAL MOTORS CORPORATION AND SUBSIDIARIES
 
 SUPPLEMENTAL
INFORMATION TO THE CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,(As restated, see
    
    
    (As restated,
    
    
    (As restated,
    
    
    (As restated,Note 1)
    
    
    see Note 1)
    
    
    see Note 1)
    
    
    see Note 1)2005
    
    
    2004
    
    
    2005
    
    
    2004(dollars in millions)AUTOMOTIVE AND OTHER OPERATIONSTotal net sales and revenues
    
    $
    40,178
    
    
    $
    41,202
    
    
    $
    77,481
    
    
    $
    81,339Cost of sales and other expenses
    
    
    38,720
    
    
    
    37,231
    
    
    
    75,866
    
    
    
    73,725Selling, general, and administrative expenses
    
    
    3,320
    
    
    
    3,144
    
    
    
    6,157
    
    
    
    6,167Total costs and expenses
    
    
    42,040
    
    
    
    40,375
    
    
    
    82,023
    
    
    
    79,892Interest expense
    
    
    671
    
    
    
    596
    
    
    
    1,356
    
    
    
    1,158Net expense from transactions with
Financing and Insurance Operations
    
    
    100
    
    
    
    59
    
    
    
    187
    
    
    
    127Income (loss) before income taxes,
equity income, and minority interests
    
    
    (2,633
    )
    
    
    172
    
    
    
    (6,085
    )
    
    
    162Income tax (benefit)
    
    
    (665
    )
    
    
    (255
    )
    
    
    (2,063
    )
    
    
    (479
    )Equity income (loss) and minority interests
    
    
    173
    
    
    
    213
    
    
    
    245
    
    
    
    467Net income (loss)  Automotive and Other
Operations
    
    $
    (1,795
    )
    
    $
    640
    
    
    $
    (3,777
    )
    
    $
    1,108FINANCING AND INSURANCE OPERATIONSTotal revenues
    
    $
    8,291
    
    
    $
    8,091
    
    
    $
    16,761
    
    
    $
    15,816Interest expense
    
    
    3,041
    
    
    
    2,243
    
    
    
    6,035
    
    
    
    4,465Depreciation and amortization expense
    
    
    1,404
    
    
    
    1,331
    
    
    
    2,802
    
    
    
    2,722Operating and other expenses
    
    
    1,921
    
    
    
    2,276
    
    
    
    4,010
    
    
    
    4,159Provisions for financing and insurance losses
    
    
    797
    
    
    
    1,023
    
    
    
    1,715
    
    
    
    2,094Total costs and expenses
    
    
    7,163
    
    
    
    6,873
    
    
    
    14,562
    
    
    
    13,440Net income from transactions with Automotive
and Other Operations
    
    
    (100
    )
    
    
    (59
    )
    
    
    (187
    )
    
    
    (127
    )Income before income taxes, equity income,
and minority interests
    
    
    1,228
    
    
    
    1,277
    
    
    
    2,386
    
    
    
    2,503Income tax expense
    
    
    420
    
    
    
    478
    
    
    
    846
    
    
    
    945Equity income (loss) and minority interests
    
    
    
    
    
    
    
    
    
    
    (3
    )
    
    
    (2
    )Net income  Financing and Insurance
Operations
    
    $
    808
    
    
    $
    799
    
    
    $
    1,537
    
    
    $
    1,556
   5




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GENERAL MOTORS CORPORATION AND SUBSIDIARIES
 
 CONDENSED
CONSOLIDATED BALANCE SHEETS(Unaudited)
 (As restated,
    
    
    
    
    
    
    (As restated,see Note 1)
    
    
    Dec. 31,
    
    
    see Note 1)June 30, 2005
    
    
    2004
    
    
    June 30, 2004(dollars in millions)ASSETSCash and cash equivalents
    
    $
    32,261
    
    
    $
    35,993
    
    
    $
    29,901Marketable securities
    
    
    23,013
    
    
    
    21,737
    
    
    
    20,816Total cash and marketable securities
    
    
    55,274
    
    
    
    57,730
    
    
    
    50,717Finance receivables  net
    
    
    178,137
    
    
    
    199,600
    
    
    
    191,563Loans held for sale
    
    
    26,903
    
    
    
    19,934
    
    
    
    17,393Accounts and notes receivable (less allowances)
    
    
    18,465
    
    
    
    21,236
    
    
    
    16,990Inventories (less allowances) (Note 3)
    
    
    13,350
    
    
    
    12,247
    
    
    
    12,274Deferred income taxes
    
    
    27,910
    
    
    
    26,559
    
    
    
    27,835Net equipment on operating leases (less accumulated depreciation)
    
    
    36,076
    
    
    
    34,214
    
    
    
    32,800Equity in net assets of nonconsolidated affiliates
    
    
    4,156
    
    
    
    6,776
    
    
    
    6,381Property  net
    
    
    40,325
    
    
    
    39,020
    
    
    
    37,578Intangible assets  net (Note 4)
    
    
    4,947
    
    
    
    4,925
    
    
    
    4,696Other assets
    
    
    60,458
    
    
    
    57,680
    
    
    
    57,709Total assets
    
    $
    466,001
    
    
    $
    479,921
    
    
    $
    455,936LIABILITIES AND STOCKHOLDERS EQUITYAccounts payable (principally trade)
    
    $
    28,694
    
    
    $
    28,830
    
    
    $
    26,377Notes and loans payable
    
    
    283,621
    
    
    
    300,279
    
    
    
    277,027Postretirement benefits other than pensions
    
    
    30,592
    
    
    
    28,182
    
    
    
    31,767Pensions
    
    
    9,712
    
    
    
    9,455
    
    
    
    7,559Deferred income taxes
    
    
    6,632
    
    
    
    7,078
    
    
    
    8,101Accrued expenses and other liabilities
    
    
    82,002
    
    
    
    78,340
    
    
    
    77,326Total liabilities
    
    
    441,253
    
    
    
    452,164
    
    
    
    428,157Minority interests
    
    
    902
    
    
    
    397
    
    
    
    328Stockholders equity$1-2/3 par value common stock (outstanding, 565,503,422;
565,132,021; and 564,721,304 shares)
    
    
    943
    
    
    
    942
    
    
    
    941Capital surplus (principally additional paid-in capital)
    
    
    15,255
    
    
    
    15,241
    
    
    
    15,181Retained earnings
    
    
    11,252
    
    
    
    14,062
    
    
    
    14,487Subtotal
    
    
    27,450
    
    
    
    30,245
    
    
    
    30,609Accumulated foreign currency translation adjustments
    
    
    (1,645
    )
    
    
    (1,194
    )
    
    
    (1,685
    )Net unrealized gains on derivatives
    
    
    331
    
    
    
    589
    
    
    
    369Net unrealized gains on securities
    
    
    687
    
    
    
    751
    
    
    
    557Minimum pension liability adjustment
    
    
    (2,977
    )
    
    
    (3,031
    )
    
    
    (2,399
    )Accumulated other comprehensive loss
    
    
    (3,604
    )
    
    
    (2,885
    )
    
    
    (3,158
    )Total stockholders equity
    
    
    23,846
    
    
    
    27,360
    
    
    
    27,451Total liabilities and stockholders equity
    
    $
    466,001
    
    
    $
    479,921
    
    
    $
    455,936
  6




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##### Table of Contents



GENERAL MOTORS CORPORATION AND SUBSIDIARIES
 
 SUPPLEMENTAL
INFORMATION TO THE CONDENSED CONSOLIDATED BALANCE
SHEETS(Unaudited)
 (As restated,
    
    
    
    
    
    
    (As restated,see Note 1)
    
    
    Dec. 31,
    
    
    see Note 1)June 30, 2005
    
    
    2004
    
    
    June 30, 2004(dollars in millions)ASSETSAutomotive and Other OperationsCash and cash equivalents
    
    $
    12,445
    
    
    $
    13,148
    
    
    $
    13,182Marketable securities
    
    
    3,629
    
    
    
    6,655
    
    
    
    8,319Total cash and marketable securities
    
    
    16,074
    
    
    
    19,803
    
    
    
    21,501Accounts and notes receivable (less allowances)
    
    
    8,087
    
    
    
    6,713
    
    
    
    6,396Inventories (less allowances) (Note 3)
    
    
    12,818
    
    
    
    11,717
    
    
    
    11,576Net equipment on operating leases (less accumulated depreciation)
    
    
    6,723
    
    
    
    6,488
    
    
    
    6,914Deferred income taxes and other current assets
    
    
    10,516
    
    
    
    10,794
    
    
    
    10,876Total current assets
    
    
    54,218
    
    
    
    55,515
    
    
    
    57,263Equity in net assets of nonconsolidated affiliates
    
    
    4,156
    
    
    
    6,776
    
    
    
    6,381Property  net
    
    
    38,480
    
    
    
    37,170
    
    
    
    35,684Intangible assets  net (Note 4)
    
    
    1,658
    
    
    
    1,599
    
    
    
    1,412Deferred income taxes
    
    
    19,253
    
    
    
    17,639
    
    
    
    18,595Other assets
    
    
    41,415
    
    
    
    40,844
    
    
    
    41,657Total Automotive and Other Operations assets
    
    
    159,180
    
    
    
    159,543
    
    
    
    160,992Financing and Insurance OperationsCash and cash equivalents
    
    
    19,816
    
    
    
    22,845
    
    
    
    16,719Investments in securities
    
    
    19,384
    
    
    
    15,082
    
    
    
    12,497Finance receivables  net
    
    
    178,137
    
    
    
    199,600
    
    
    
    191,563Loans held for sale
    
    
    26,903
    
    
    
    19,934
    
    
    
    17,393Net equipment on operating leases (less accumulated depreciation)
    
    
    29,353
    
    
    
    27,726
    
    
    
    25,886Other assets
    
    
    33,228
    
    
    
    35,191
    
    
    
    30,886Net receivable from Automotive and Other Operations
    
    
    2,846
    
    
    
    2,426
    
    
    
    2,004Total Financing and Insurance Operations assets
    
    
    309,667
    
    
    
    322,804
    
    
    
    296,948Total assets
    
    $
    468,847
    
    
    $
    482,347
    
    
    $
    457,940LIABILITIES AND STOCKHOLDERS EQUITYAutomotive and Other OperationsAccounts payable (principally trade)
    
    $
    25,361
    
    
    $
    24,257
    
    
    $
    23,084Loans payable
    
    
    1,563
    
    
    
    2,062
    
    
    
    2,625Accrued expenses
    
    
    44,517
    
    
    
    46,202
    
    
    
    46,655Net payable to Financing and Insurance Operations
    
    
    2,846
    
    
    
    2,426
    
    
    
    2,004Total current liabilities
    
    
    74,287
    
    
    
    74,947
    
    
    
    74,368Long-term debt
    
    
    31,043
    
    
    
    30,460
    
    
    
    29,814Postretirement benefits other than pensions
    
    
    25,882
    
    
    
    23,477
    
    
    
    27,797Pensions
    
    
    9,619
    
    
    
    9,371
    
    
    
    7,489Other liabilities and deferred income taxes
    
    
    16,447
    
    
    
    16,206
    
    
    
    16,000Total Automotive and Other Operations liabilities
    
    
    157,278
    
    
    
    154,461
    
    
    
    155,468Financing and Insurance OperationsAccounts payable
    
    
    3,333
    
    
    
    4,573
    
    
    
    3,293Debt
    
    
    251,015
    
    
    
    267,757
    
    
    
    244,588Other liabilities and deferred income taxes
    
    
    32,473
    
    
    
    27,799
    
    
    
    26,812Total Financing and Insurance Operations liabilities
    
    
    286,821
    
    
    
    300,129
    
    
    
    274,693Total liabilities
    
    
    444,099
    
    
    
    454,590
    
    
    
    430,161Minority interests
    
    
    902
    
    
    
    397
    
    
    
    328Total stockholders equity
    
    
    23,846
    
    
    
    27,360
    
    
    
    27,451Total liabilities and stockholders equity
    
    $
    468,847
    
    
    $
    482,347
    
    
    $
    457,940
   7




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##### Table of Contents



GENERAL MOTORS CORPORATION AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 Six Months Ended June 30,(As restated,
    
    
    (As restated,see Note 1)
    
    
    see Note 1)2005
    
    
    2004(dollars in millions)Net cash
used in operating activities(Note 1)
    
    $
    (1,781
    )
    
    $
    (282
    )Cash flows from investing activitiesExpenditures for property
    
    
    (2,944
    )
    
    
    (3,201
    )Investments in marketable securities  acquisitions
    
    
    (10,830
    )
    
    
    (6,466
    )Investments in marketable securities  liquidations
    
    
    10,269
    
    
    
    7,064Net change in mortgage servicing rights
    
    
    (185
    )
    
    
    (176
    )Increase in finance receivables
    
    
    (2,569
    )
    
    
    (17,486
    )Proceeds from sales of finance receivables
    
    
    17,692
    
    
    
    9,012Operating leases  acquisitions
    
    
    (8,378
    )
    
    
    (7,118
    )Operating leases  liquidations
    
    
    3,258
    
    
    
    3,992Investments in companies, net of cash acquired
    
    
    1,355
    
    
    
    (32
    )Other
    
    
    (2,141
    )
    
    
    1,113Net cash provided by (used in) investing activities(Note 1)
    
    
    5,527
    
    
    
    (13,298
    )Cash flows from financing activitiesNet (decrease) increase in loans payable
    
    
    (8,411
    )
    
    
    2,137Long-term debt  borrowings
    
    
    30,440
    
    
    
    37,784Long-term debt  repayments
    
    
    (32,144
    )
    
    
    (30,986
    )Cash dividends paid to stockholders
    
    
    (570
    )
    
    
    (564
    )Other
    
    
    3,619
    
    
    
    2,804Net cash (used in) provided by financing activities
    
    
    (7,066
    )
    
    
    11,175Effect of exchange rate changes on cash and cash equivalents
    
    
    (412
    )
    
    
    (248
    )Net decrease in cash and cash equivalents
    
    
    (3,732
    )
    
    
    (2,653
    )Cash and cash equivalents at beginning of the period
    
    
    35,993
    
    
    
    32,554Cash and cash equivalents at end of the period
    
    $
    32,261
    
    
    $
    29,901
  8




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##### Table of Contents



GENERAL MOTORS CORPORATION AND SUBSIDIARIES
 
 SUPPLEMENTAL INFORMATION TO THE CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 Automotive and
    
    

    
    

    
    

    Financing andOther
    
    

    
    

    
    

    InsuranceSix Months Ended June 30,(As restated, see
    
    
    (As restated, see
    
    
    
    
    
    
    (As restated, see
    
    
    (As restated, seeNote 1)
    
    
    Note 1)
    
    
    
    
    

    
    Note 1)
    
    
    Note 1)2005
    
    
    2004
    

    
    
    
    
    
    2005
    
    
    2004(dollars in millions)Net cash (used in) provided by operating activities(Note 1)
    
    $
    (2,138
    )
    
    $
    955
    
    
    
    
    
    
    $
    357
    
    
    $
    (1,237
    )Cash flows from investing activitiesExpenditures for property
    
    
    (2,813
    )
    
    
    (3,038
    )
    
    
    
    
    
    
    (131
    )
    
    
    (163
    )Investments in marketable securities  acquisitions
    
    
    (271
    )
    
    
    (855
    )
    
    
    
    
    
    
    (10,559
    )
    
    
    (5,611
    )Investments in marketable securities  liquidations
    
    
    3,137
    
    
    
    1,603
    
    
    
    
    
    
    
    7,132
    
    
    
    5,461Net change
in mortgage servicing rights
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (185
    )
    
    
    (176
    )Increase in finance receivables
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,569
    )
    
    
    (17,486
    )Proceeds from sales of finance receivables
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,692
    
    
    
    9,012Operating leases  acquisitions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8,378
    )
    
    
    (7,118
    )Operating leases  liquidations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,258
    
    
    
    3,992Net investing activity with Financing and Insurance Operations
    
    
    1,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Investments in companies, net of cash acquired
    
    
    1,355
    
    
    
    (53
    )
    
    
    
    
    
    
    
    
    
    
    21Other
    
    
    (591
    )
    
    
    110
    
    
    
    
    
    
    
    (1,550
    )
    
    
    1,003Net cash provided by (used in) investing activities(Note 1)
    
    
    1,817
    
    
    
    (2,233
    )
    
    
    
    
    
    
    4,710
    
    
    
    (11,065
    )Cash flows from financing activitiesNet increase (decrease) in loans payable
    
    
    46
    
    
    
    (437
    )
    
    
    
    
    
    
    (8,457
    )
    
    
    2,574Long-term debt  borrowings
    
    
    25
    
    
    
    756
    
    
    
    
    
    
    
    30,415
    
    
    
    37,028Long-term debt  repayments
    
    
    (20
    )
    
    
    (55
    )
    
    
    
    
    
    
    (32,124
    )
    
    
    (30,931
    )Net financing activity with Automotive & Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,000
    )
    
    
    Cash dividends paid to stockholders
    
    
    (570
    )
    
    
    (564
    )
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,619
    
    
    
    2,804Net cash (used in) provided by financing activities
    
    
    (519
    )
    
    
    (300
    )
    
    
    
    
    
    
    (7,547
    )
    
    
    11,475Effect of exchange rate changes on cash and
cash equivalents
    
    
    (283
    )
    
    
    (176
    )
    
    
    
    
    
    
    (129
    )
    
    
    (72
    )Net transactions with Automotive/Financing Operations
    
    
    420
    
    
    
    512
    
    
    
    
    
    
    
    (420
    )
    
    
    (512
    )Net decrease in cash and cash equivalents
    
    
    (703
    )
    
    
    (1,242
    )
    
    
    
    
    
    
    (3,029
    )
    
    
    (1,411
    )Cash and cash equivalents at beginning of the period
    
    
    13,148
    
    
    
    14,424
    
    
    
    
    
    
    
    22,845
    
    
    
    18,130Cash and cash equivalents at end of the period
    
    $
    12,445
    
    
    $
    13,182
    
    
    
    
    
    
    $
    19,816
    
    
    $
    16,719
   9




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##### Table of Contents



GENERAL MOTORS CORPORATION AND SUBSIDIARIES
 
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 NOTE 1. Financial Statement Presentation
    Restatement of Financial Statements
 Results of Operations
  Net income (loss) for the
    
    
    Net income (loss) for the sixthree months ended June 30,
    
    
    months ended June 30,2005
    
    
    2004
    
    
    2005
    
    
    2004(dollars in millions)As originally reported
    
    $
    (286
    )
    
    $
    1,341
    
    
    $
    (1,390
    )
    
    $
    2,621Out of
period adjustments (a)
    
    
    
    
    
    
    36
    
    
    
    
    
    
    
    (36
    )Impairment
of Fuji Heavy Industries (b)
    
    
    (788
    )
    
    
    
    
    
    
    (788
    )
    
    
    As previously reported
    
    $
    (1,074
    )
    
    $
    1,377
    
    
    $
    (2,178
    )
    
    $
    2,585Adjustments, net of tax, for:Supplier
credits (c)
    
    
    11
    
    
    
    (4
    )
    
    
    15
    
    
    
    (8
    )Disposal loss adjustment (d)
    
    
    49
    
    
    
    30
    
    
    
    (58
    )
    
    
    Benefit plans economic
assumptions (e)
    
    
    (16
    )
    
    
    1
    
    
    
    (32
    )
    
    
    2Other, net of tax (f)
    
    
    43
    
    
    
    35
    
    
    
    13
    
    
    
    85Total of above adjustments
    
    
    87
    
    
    
    62
    
    
    
    (62
    )
    
    
    79As restated
    
    $
    (987
    )
    
    $
    1,439
    
    
    $
    (2,240
    )
    
    $
    2,664
 10




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##### Table of Contents



GENERAL MOTORS CORPORATION AND SUBSIDIARIES
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  continued
(Unaudited)
 NOTE 1. Financial Statement Presentation (continued)
 Restatement
of Financial Statements (continued)
 (a)
    
    As described in our Annual Report on Form 10-K for
the year ended December 31, 2004, as amended, during the fourth quarter of 2004, internal controls that had been
put into place in connection with GM's Sarbanes-Oxley Section 404
program at GMAC's residential mortgage businesses identified certain
out-of-period adjustments. The majority of these amounts resulted
from items detected and recorded in the fourth quarter of 2004 that
relate to prior 2004 quarters. As a result, GM has restated its 2004
quarterly and year-to-date financial statements. The most significant
of these restatement adjustments relate to: (1) the estimation of fair
values of certain interests in securitized assets, (2) the accounting
for deferred income taxes related to certain secured financing
transactions; and (3) the income statement effects of consolidating
certain mortgage transfers previously recognized as sales.Upon identification of these out-of-period adjustments, GM analyzed
their effect, together with the effect of out-of-period adjustments
related to Auto & Other that had been previously considered immaterial
to GM on a consolidated basis, and concluded that, in the aggregate,
they were significant enough to warrant restatement of GM's 2004
quarterly results. The most significant of the Auto & Other
out-of-period adjustments relates to GM's accounting for the Medicare
Prescription Drug, Improvement and Modernization Act of 2003, which
was initially reported in the first quarter of 2004 pursuant to FASB
Staff Position (FSP) No. FAS 106-1, "Accounting and Disclosure
Requirements Related to the Medicare Prescription Drug, Improvement
and Modernization Act of 2003." FSP 106-1 permitted companies to
recognize the effect of the Act beginning with its enactment date
(December 8, 2003), or defer recognition until the issuance of final
rules by the FASB. In the second quarter of 2004, FSP 106-2 was
issued which superseded FSP 106-1 and clarified how to account for
the effect of the Act under circumstances where a company's other
postretirement employee benefits (OPEB) plan has a plan year-end that
is different from the company's fiscal year-end. This second quarter
clarification provided guidance on the accounting for the effect of
the Act in a manner different than GM had applied prior to
restatement.
 (b)
    
    As described in our Quarterly Report on Form 10-Q for
the quarter ended June 30, 2005, as amended, investments in equity
securities as of June 30, 2005, include GMs
20.1% investment in the common stock of Fuji Heavy Industries, Ltd.
(FHI), which then had a book value of $1.5 billion. GM uses the equity
method of accounting for its investment in FHI. At the time of GM's
initial investment in FHI and through the first quarter of 2005, the
book value of the FHI shares had been in excess of the value of the
underlying shares of common stock of FHI, as determined by trades on
the Tokyo Stock Exchange. However, the carrying value amount had been
considered recoverable based on GMs periodic estimates of fair value
that comprehended FHI's future business plans and financial
prospects. In May 2005, management of FHI formulated a new business
plan, which indicated FHIs expectation of a decline in revenues,
profits and cash flows in the near term from those levels comprehended
in previous plans.GM has determined that, as of the second quarter, the value of the
common stock of FHI
was other than temporarily impaired and that the carrying value of
the common stock FHI
 should have been reduced to fair value of
approximately $650 million, based on the closing price of FHI stock
on the Tokyo Stock Exchange on June 30, 2005. GM believes that the
closing price of FHI stock on June 30, 2005 represents the best
indicator of fair market value and that it would not be appropriate
to consider subsequent recovery in the price of FHI stock in
determining the second quarter impairment. This correction had no
effect on GMs originally reported amounts of cash flows from
operating activities or the net increase (decrease) in cash
equivalents.
 (c)
    
    GM erroneously recorded as a reduction to cost of sales certain payments and credits received
from suppliers prior to completion of the earnings process. GM has concluded that the payments and
credits received were associated with agreements for the award of future services or products
or other rights and privileges and should be recognized when subsequently earned.
 (d)
    
    GMs portfolio of vehicles on operating lease with daily rental car entities, which was
impaired at lease inception, was prematurely revalued in 2005 to reflect increased anticipated
proceeds upon disposal.(e)
    
    GM originally estimated its discount rate for the U.S. Hourly pension plan referencing
certain indicators which, in view of evolving guidance, did not provide the best estimate to
defease the pension liability. The above adjustments to 2005 results
include the amounts,
net of tax, to correct the original accounting estimates. Also, GM erroneously calculated the
anticipated effect of cost reduction initiatives on its expected healthcare cost trend rate
for 2002 and, as a result, understated that rate. The above
adjustments to 2005 and 2004 results
reflect the subsequent increase in accrued expense related to the 2001 calculation.(f)
    
    For periods covered by this filing, GM has recorded other accounting adjustments it has
identified that were not recorded in the proper period. These out-of-period adjustments were
not material to the financial statements as originally reported; however, as part of the
restatement, they are being recognized in the period in which the underlying transactions
occurred. The effect of these adjustments, net-of-tax, was
$43 million and $35 million for the
three months ended June 30, 2005 and 2004, respectively, and $13 million and $85 million for
the six months ended June 30, 2005 and 2004, respectively. The significant out-of-period
adjustments were related to the following matters: (1) Engineering and facility-related
expenses recorded in improper periods; (2)
Reconciliation of prior year tax provisions to actual tax returns.
 11




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##### Table of Contents



Statements of Cash Flows
 Restatements 
 Reclassifications 
   Six Months Ended June 30,2005
    
    
    2004Financing
    
    
    
    
    
    
    Financingand
    
    
    
    
    
    
    andConsolidated
    
    
    Insurance
    
    
    Consolidated
    
    
    InsuranceNet cash used in operating
activitiesAs originally reported
    
    $
    2,489
    
    
    $
    4,627
    
    
    $
    7,599
    
    
    $
    6,644Reclassification
 wholesale loans
    
    
    
    
    
    
    
    
    
    
    (7,040
    )
    
    
    (7,040
    )As
previously reported
    
    $
    2,489
    
    
    $
    4,627
    
    
    $
    559
    
    
    $
    (396
    )Restatement
 mortgage related activities
    
    
    (4,270
    )
    
    
    (4,270
    )
    
    
    (841
    )
    
    
    (841
    )As restated
    
    $
    (1,781
    )
    
    $
    357
    
    
    $
    (282
    )
    
    $
    (1,237
    )Net cash provided by (used
in) investing
activitiesAs originally reported
    
    $
    1,257
    
    
    $
    440
    
    
    $
    (21,179
    )
    
    $
    (18,946
    )Reclassification  wholesale
loans
    
    
    
    
    
    
    
    
    
    
    7,040
    
    
    
    7,040As
previously reported
    
    $
    1,257
    
    
    $
    440
    
    
    $
    (14,139
    )
    
    $
    (11,906
    )Restatement
 mortgage related activities
    
    
    4,270
    
    
    
    4,270
    
    
    
    841
    
    
    
    841As restated
    
    $
    5,527
    
    
    $
    4,710
    
    
    $
    (13,298
    )
    
    $
    (11,065
    )
 12




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##### Table of Contents



GENERAL MOTORS CORPORATION AND SUBSIDIARIES
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  continued
 (Unaudited)
 NOTE 1. Financial Statement Presentation (continued)
 Restatement of Financial Statements (continued)
  CONDENSED CONSOLIDATED STATEMENTS OF INCOME
 Three Months Ended June 30,2005
    
    
    2004Previously
    
    
    
    
    
    
    Previouslyreported
    
    
    Restated
    
    
    reported
    
    
    Restated(dollars in millions except per share amounts)GENERAL MOTORS CORPORATION AND SUBSIDIARIESTotal net sales and revenues
    
    $
    48,469
    
    
    $
    48,469
    
    
    $
    49,254
    
    
    $
    49,293Cost of sales and other expenses
    
    
    40,902
    
    
    
    40,730
    
    
    
    39,778
    
    
    
    39,793Selling, general, and administrative expenses
    
    
    5,432
    
    
    
    5,432
    
    
    
    5,171
    
    
    
    5,212Interest expense
    
    
    3,712
    
    
    
    3,712
    
    
    
    2,839
    
    
    
    2,839Total costs and expenses
    
    
    50,046
    
    
    
    49,874
    
    
    
    47,788
    
    
    
    47,844Income
(loss) before income taxes, equity income and minority
interests
    
    
    (1,577
    )
    
    
    (1,405
    )
    
    
    1,466
    
    
    
    1,449Income tax (benefit) expense
    
    
    (330
    )
    
    
    (245
    )
    
    
    302
    
    
    
    223Equity income (loss) and minority interests
    
    
    173
    
    
    
    173
    
    
    
    213
    
    
    
    213Net
income (loss)
    
    $
    (1,074
    )
    
    $
    (987
    )
    
    $
    1,377
    
    
    $
    1,439Basic earnings (loss) per share attributable to
common stock
    
    $
    (1.90
    )
    
    $
    (1.75
    )
    
    $
    2.44
    
    
    $
    2.55Earnings (loss) per share attributable to common
stock assuming dilution
    
    $
    (1.90
    )
    
    $
    (1.75
    )
    
    $
    2.42
    
    
    $
    2.53
 Six Months Ended June 30,2005
    
    
    2004Previously
    
    
    
    
    
    
    Previouslyreported
    
    
    Restated
    
    
    reported
    
    
    Restated(dollars in millions except per share amounts)GENERAL MOTORS CORPORATION AND SUBSIDIARIESTotal net sales and revenues
    
    $
    94,242
    
    
    $
    94,242
    
    
    $
    97,084
    
    
    $
    97,155Cost of sales and other expenses
    
    
    80,215
    
    
    
    80,229
    
    
    
    78,551
    
    
    
    78,667Selling, general, and administrative expenses
    
    
    10,321
    
    
    
    10,321
    
    
    
    10,180
    
    
    
    10,200Interest expense
    
    
    7,391
    
    
    
    7,391
    
    
    
    5,623
    
    
    
    5,623Total costs and expenses
    
    
    97,927
    
    
    
    97,941
    
    
    
    94,354
    
    
    
    94,490Income
(loss) before income taxes, equity income and minority
interests
    
    
    (3,685
    )
    
    
    (3,699
    )
    
    
    2,730
    
    
    
    2,665Income tax (benefit) expense
    
    
    (1,265
    )
    
    
    (1,217
    )
    
    
    610
    
    
    
    466Equity income (loss) and minority interests
    
    
    242
    
    
    
    242
    
    
    
    465
    
    
    
    465Net
income (loss)
    
    $
    (2,178
    )
    
    $
    (2,240
    )
    
    $
    2,585
    
    
    $
    2,664Basic earnings (loss) per share attributable to
common stock
    
    $
    (3.85
    )
    
    $
    (3.96
    )
    
    $
    4.58
    
    
    $
    4.72Earnings (loss) per share attributable to common
stock assuming dilution
    
    $
    (3.85
    )
    
    $
    (3.96
    )
    
    $
    4.54
    
    
    $
    4.68
 13




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##### Table of Contents



GENERAL MOTORS CORPORATION AND SUBSIDIARIES
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  continued (Unaudited)
 NOTE 1. Financial Statement Presentation (continued)
 Restatement of Financial Statements (continued)
 SUPPLEMENTAL INFORMATION TO THE CONDENSED CONSOLIDATED STATEMENTS OF INCOME
 Three Months Ended June 30,2005
    
    
    2004Previously
    
    
    
    
    
    
    Previouslyreported
    
    
    Restated
    
    
    reported
    
    
    Restated(dollars in millions)AUTOMOTIVE AND OTHER OPERATIONSTotal net sales and revenues
    
    $
    40,178
    
    
    $
    40,178
    
    
    $
    41,202
    
    
    $
    41,202Cost of sales and other expenses
    
    
    38,861
    
    
    
    38,720
    
    
    
    37,259
    
    
    
    37,231Selling, general, and administrative expenses
    
    
    3,320
    
    
    
    3,320
    
    
    
    3,144
    
    
    
    3,144Total costs and expenses
    
    
    42,181
    
    
    
    42,040
    
    
    
    40,403
    
    
    
    40,375Interest expense
    
    
    671
    
    
    
    671
    
    
    
    596
    
    
    
    596Net expense from transactions with Financing and
Insurance Operations
    
    
    100
    
    
    
    100
    
    
    
    59
    
    
    
    59Income (loss) before income taxes, equity income, and
minority interests
    
    
    (2,774
    )
    
    
    (2,633
    )
    
    
    144
    
    
    
    172Income tax (benefit)
    
    
    (719
    )
    
    
    (665
    )
    
    
    (188
    )
    
    
    (255
    )Equity income (loss) and minority interests
    
    
    173
    
    
    
    173
    
    
    
    213
    
    
    
    213Net income (loss)  Automotive and Other
Operations
    
    $
    (1,882
    )
    
    $
    (1,795
    )
    
    $
    545
    
    
    $
    640FINANCING AND INSURANCE OPERATIONSTotal revenues
    
    $
    8,291
    
    
    $
    8,291
    
    
    $
    8,052
    
    
    $
    8,091Interest expense
    
    
    3,041
    
    
    
    3,041
    
    
    
    2,243
    
    
    
    2,243Depreciation and amortization expense
    
    
    1,404
    
    
    
    1,404
    
    
    
    1,333
    
    
    
    1,331Operating and other expenses
    
    
    1,952
    
    
    
    1,921
    
    
    
    2,190
    
    
    
    2,276Provisions for financing and insurance losses
    
    
    797
    
    
    
    797
    
    
    
    1,023
    
    
    
    1,023Total costs and expenses
    
    
    7,194
    
    
    
    7,163
    
    
    
    6,789
    
    
    
    6,873Net income from transactions with Automotive and Other
Operations
    
    
    (100
    )
    
    
    (100
    )
    
    
    (59
    )
    
    
    (59
    )Income before income taxes, equity income and minority
interests
    
    
    1,197
    
    
    
    1,228
    
    
    
    1,322
    
    
    
    1,277Income tax expense
    
    
    389
    
    
    
    420
    
    
    
    490
    
    
    
    478Equity income (loss) and minority interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net income  Financing and Insurance Operations
    
    $
    808
    
    
    $
    808
    
    
    $
    832
    
    
    $
    799Net income (loss) by reportable operating segment / regionAutomotive and Other OperationsGM North America (GMNA)
    
    $
    (1,194
    )
    
    $
    (1,121
    )
    
    $
    355
    
    
    $
    366GM Europe (GME)
    
    
    (89
    )
    
    
    (112
    )
    
    
    (45
    )
    
    
    (62
    )GM Latin America/Africa/Mid-East (GMLAAM)
    
    
    33
    
    
    
    25
    
    
    
    10
    
    
    
    18GM Asia Pacific (GMAP)
    
    
    (612
    )
    
    
    (605
    )
    
    
    259
    
    
    
    253Other Operations
    
    
    (20
    )
    
    
    18
    
    
    
    (34
    )
    
    
    65Net income
(loss)  Automotive and Other Operations
    
    
    (1,882
    )
    
    
    (1,795
    )
    
    
    545
    
    
    
    640Financing and Insurance OperationsNet income  Financing and Insurance Operations
    
    
    808
    
    
    
    808
    
    
    
    832
    
    
    
    799Net income
(loss)
    
    $
    (1,074
    )
    
    $
    (987
    )
    
    $
    1,377
    
    
    $
    1,439
 14




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##### Table of Contents



GENERAL MOTORS CORPORATION AND SUBSIDIARIES
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  continued(Unaudited)
 NOTE 1. Financial Statement Presentation (continued)
 Restatement of Financial Statements (continued)
 SUPPLEMENTAL INFORMATION TO THE CONDENSED CONSOLIDATED STATEMENTS OF INCOME
 Six Months Ended June 30,2005
    
    
    2004Previously
    
    
    
    
    
    
    Previouslyreported
    
    
    Restated
    
    
    reported
    
    
    Restated(dollars in millions)AUTOMOTIVE AND OTHER OPERATIONSTotal net sales and revenues
    
    $
    77,481
    
    
    $
    77,481
    
    
    $
    81,339
    
    
    $
    81,339Cost of sales and other expenses
    
    
    75,767
    
    
    
    75,866
    
    
    
    73,690
    
    
    
    73,725Selling, general, and administrative expenses
    
    
    6,157
    
    
    
    6,157
    
    
    
    6,167
    
    
    
    6,167Total costs and expenses
    
    
    81,924
    
    
    
    82,023
    
    
    
    79,857
    
    
    
    79,892Interest expense
    
    
    1,356
    
    
    
    1,356
    
    
    
    1,158
    
    
    
    1,158Net expense from transactions with Financing and
Insurance Operations
    
    
    187
    
    
    
    187
    
    
    
    127
    
    
    
    127Income (loss) before income taxes, equity income, and
minority interests
    
    
    (5,986
    )
    
    
    (6,085
    )
    
    
    197
    
    
    
    162Income tax (benefit)
    
    
    (2,026
    )
    
    
    (2,063
    )
    
    
    (325
    )
    
    
    (479
    )Equity income (loss) and minority interests
    
    
    245
    
    
    
    245
    
    
    
    467
    
    
    
    467Net income (loss)  Automotive and Other
Operations
    
    $
    (3,715
    )
    
    $
    (3,777
    )
    
    $
    989
    
    
    $
    1,108FINANCING AND INSURANCE OPERATIONSTotal revenues
    
    $
    16,761
    
    
    $
    16,761
    
    
    $
    15,745
    
    
    $
    15,816Interest expense
    
    
    6,035
    
    
    
    6,035
    
    
    
    4,465
    
    
    
    4,465Depreciation and amortization expense
    
    
    2,802
    
    
    
    2,802
    
    
    
    2,663
    
    
    
    2,722Operating and other expenses
    
    
    4,095
    
    
    
    4,010
    
    
    
    4,109
    
    
    
    4,159Provisions for financing and insurance losses
    
    
    1,715
    
    
    
    1,715
    
    
    
    2,102
    
    
    
    2,094Total costs and expenses
    
    
    14,647
    
    
    
    14,562
    
    
    
    13,339
    
    
    
    13,440Net income from transactions with Automotive and Other
Operations
    
    
    (187
    )
    
    
    (187
    )
    
    
    (127
    )
    
    
    (127
    )Income before income taxes, equity income and minority
interests
    
    
    2,301
    
    
    
    2,386
    
    
    
    2,533
    
    
    
    2,503Income tax expense
    
    
    761
    
    
    
    846
    
    
    
    935
    
    
    
    945Equity income (loss) and minority interests
    
    
    (3
    )
    
    
    (3
    )
    
    
    (2
    )
    
    
    (2
    )Net
income  Financing and Insurance Operations
    
    $
    1,537
    
    
    $
    1,537
    
    
    $
    1,596
    
    
    $
    1,556Net income (loss) by reportable operating segment / regionAutomotive and Other OperationsGM North America (GMNA)
    
    $
    (2,754
    )
    
    $
    (2,825
    )
    
    $
    756
    
    
    $
    710GM Europe (GME)
    
    
    (614
    )
    
    
    (659
    )
    
    
    (161
    )
    
    
    (171
    )GM Latin America/Africa/Mid-East (GMLAAM)
    
    
    79
    
    
    
    56
    
    
    
    11
    
    
    
    1GM Asia Pacific (GMAP)
    
    
    (552
    )
    
    
    (535
    )
    
    
    534
    
    
    
    525Other Operations
    
    
    126
    
    
    
    186
    
    
    
    (151
    )
    
    
    43Net income
(loss)  Automotive and Other Operations
    
    
    (3,715
    )
    
    
    (3,777
    )
    
    
    989
    
    
    
    1,108Financing and Insurance OperationsNet income  Financing and Insurance Operations
    
    
    1,537
    
    
    
    1,537
    
    
    
    1,596
    
    
    
    1,556Net income
(loss)
    
    $
    (2,178
    )
    
    $
    (2,240
    )
    
    $
    2,585
    
    
    $
    2,664
 15




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##### Table of Contents



GENERAL MOTORS CORPORATION AND SUBSIDIARIES
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  continued(Unaudited)
 NOTE 1. Financial Statement Presentation (continued)
 Restatement of Financial Statements (continued)
 CONDENSED CONSOLIDATED BALANCE SHEETS
 June 30,2005
    
    
    2004Previously
    
    
    
    
    
    
    Previouslyreported
    
    
    Restated
    
    
    reported
    
    
    Restated(dollars in millions)ASSETSCash and cash equivalents
    
    $
    32,261
    
    
    $
    32,261
    
    
    $
    29,901
    
    
    $
    29,901Marketable securities
    
    
    23,013
    
    
    
    23,013
    
    
    
    20,816
    
    
    
    20,816Total cash and marketable securities
    
    
    55,274
    
    
    
    55,274
    
    
    
    50,717
    
    
    
    50,717Finance receivables  net
    
    
    178,137
    
    
    
    178,137
    
    
    
    192,023
    
    
    
    191,563Loans held for sale
    
    
    26,903
    
    
    
    26,903
    
    
    
    17,393
    
    
    
    17,393Accounts and notes receivable (less allowances)
    
    
    18,465
    
    
    
    18,465
    
    
    
    16,989
    
    
    
    16,990Inventories (less allowances)
    
    
    13,350
    
    
    
    13,350
    
    
    
    12,274
    
    
    
    12,274Deferred income taxes
    
    
    27,640
    
    
    
    27,910
    
    
    
    27,379
    
    
    
    27,835Net equipment on operating leases
(less accumulated depreciation)
    
    
    36,076
    
    
    
    36,076
    
    
    
    32,321
    
    
    
    32,800Equity in net assets of nonconsolidated affiliates
    
    
    4,156
    
    
    
    4,156
    
    
    
    6,381
    
    
    
    6,381Property  net
    
    
    40,325
    
    
    
    40,325
    
    
    
    37,578
    
    
    
    37,578Intangible assets  net
    
    
    4,947
    
    
    
    4,947
    
    
    
    4,696
    
    
    
    4,696Other assets
    
    
    60,512
    
    
    
    60,458
    
    
    
    57,709
    
    
    
    57,709Total assets
    
    $
    465,785
    
    
    $
    466,001
    
    
    $
    455,460
    
    
    $
    455,936LIABILITIES AND STOCKHOLDERS EQUITYAccounts payable (principally trade)
    
    $
    28,694
    
    
    $
    28,694
    
    
    $
    26,377
    
    
    $
    26,377Notes and loans payable
    
    
    283,621
    
    
    
    283,621
    
    
    
    277,027
    
    
    
    277,027Postretirement benefits other than pensions
    
    
    30,525
    
    
    
    30,592
    
    
    
    31,691
    
    
    
    31,767Pensions
    
    
    9,722
    
    
    
    9,712
    
    
    
    7,559
    
    
    
    7,559Deferred income taxes
    
    
    6,632
    
    
    
    6,632
    
    
    
    8,101
    
    
    
    8,101Accrued expenses and other liabilities
    
    
    81,425
    
    
    
    82,002
    
    
    
    76,641
    
    
    
    77,326Total liabilities
    
    
    440,619
    
    
    
    441,253
    
    
    
    427,396
    
    
    
    428,157Minority interests
    
    
    902
    
    
    
    902
    
    
    
    328
    
    
    
    328Stockholders equity$1-2/3 par
value common stock (outstanding, 565,503,422 and
564,721,304 shares)
    
    
    943
    
    
    
    943
    
    
    
    941
    
    
    
    941Capital surplus (principally additional paid-in capital)
    
    
    15,255
    
    
    
    15,255
    
    
    
    15,181
    
    
    
    15,181Retained earnings
    
    
    11,680
    
    
    
    11,252
    
    
    
    14,772
    
    
    
    14,487Subtotal
    
    
    27,878
    
    
    
    27,450
    
    
    
    30,894
    
    
    
    30,609Accumulated foreign currency translation adjustments
    
    
    (1,645
    )
    
    
    (1,645
    )
    
    
    (1,685
    )
    
    
    (1,685
    )Net unrealized gains on derivatives
    
    
    331
    
    
    
    331
    
    
    
    369
    
    
    
    369Net unrealized gains on securities
    
    
    687
    
    
    
    687
    
    
    
    557
    
    
    
    557Minimum pension liability adjustment
    
    
    (2,987
    )
    
    
    (2,977
    )
    
    
    (2,399
    )
    
    
    (2,399
    )Accumulated other comprehensive loss
    
    
    (3,614
    )
    
    
    (3,604
    )
    
    
    (3,158
    )
    
    
    (3,158
    )Total stockholders equity
    
    
    24,264
    
    
    
    23,846
    
    
    
    27,736
    
    
    
    27,451Total liabilities and stockholders equity
    
    $
    465,785
    
    
    $
    466,001
    
    
    $
    455,460
    
    
    $
    455,936
 16




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##### Table of Contents



GENERAL MOTORS CORPORATION AND SUBSIDIARIES
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  continued(Unaudited)
 NOTE 1. Financial Statement Presentation (continued)
 Restatement of Financial Statements (continued)
 SUPPLEMENTAL INFORMATION TO THE CONDENSED CONSOLIDATED BALANCE SHEETS
 June 30,2005
    
    
    2004Previously
    
    
    
    
    
    
    Previouslyreported
    
    
    Restated
    
    
    reported
    
    
    Restated(dollars in millions)ASSETSAutomotive and Other OperationsCash and cash equivalents
    
    $
    12,445
    
    
    $
    12,445
    
    
    $
    13,182
    
    
    $
    13,182Marketable securities
    
    
    3,629
    
    
    
    3,629
    
    
    
    8,319
    
    
    
    8,319Total cash and marketable securities
    
    
    16,074
    
    
    
    16,074
    
    
    
    21,501
    
    
    
    21,501Accounts and notes receivable (less allowances)
    
    
    8,087
    
    
    
    8,087
    
    
    
    6,396
    
    
    
    6,396Inventories (less allowances)
    
    
    12,818
    
    
    
    12,818
    
    
    
    11,576
    
    
    
    11,576Net equipment on operating leases (less accumulated depreciation)
    
    
    6,723
    
    
    
    6,723
    
    
    
    6,914
    
    
    
    6,914Deferred income taxes and other current assets
    
    
    10,570
    
    
    
    10,516
    
    
    
    10,876
    
    
    
    10,876Total current assets
    
    
    54,272
    
    
    
    54,218
    
    
    
    57,263
    
    
    
    57,263Equity in net assets of nonconsolidated affiliates
    
    
    4,156
    
    
    
    4,156
    
    
    
    6,381
    
    
    
    6,381Property  net
    
    
    38,480
    
    
    
    38,480
    
    
    
    35,684
    
    
    
    35,684Intangible assets  net
    
    
    1,658
    
    
    
    1,658
    
    
    
    1,412
    
    
    
    1,412Deferred income taxes
    
    
    18,976
    
    
    
    19,253
    
    
    
    18,316
    
    
    
    18,595Other assets
    
    
    41,415
    
    
    
    41,415
    
    
    
    41,657
    
    
    
    41,657Total Automotive and Other Operations assets
    
    
    158,957
    
    
    
    159,180
    
    
    
    160,713
    
    
    
    160,992Financing and Insurance OperationsCash and cash equivalents
    
    
    19,816
    
    
    
    19,816
    
    
    
    16,719
    
    
    
    16,719Investments in securities
    
    
    19,384
    
    
    
    19,384
    
    
    
    12,497
    
    
    
    12,497Finance receivables  net
    
    
    178,137
    
    
    
    178,137
    
    
    
    192,023
    
    
    
    191,563Loans held for sale
    
    
    26,903
    
    
    
    26,903
    
    
    
    17,393
    
    
    
    17,393Net equipment on operating leases (less accumulated depreciation)
    
    
    29,353
    
    
    
    29,353
    
    
    
    25,407
    
    
    
    25,886Other assets
    
    
    33,235
    
    
    
    33,228
    
    
    
    30,708
    
    
    
    30,886Net receivable from Automotive and Other Operations
    
    
    2,846
    
    
    
    2,846
    
    
    
    2,004
    
    
    
    2,004Total Financing and Insurance Operations assets
    
    
    309,674
    
    
    
    309,667
    
    
    
    296,751
    
    
    
    296,948Total assets
    
    $
    468,631
    
    
    $
    468,847
    
    
    $
    457,464
    
    
    $
    457,940LIABILITIES AND STOCKHOLDERS EQUITYAutomotive and Other OperationsAccounts payable (principally trade)
    
    $
    25,361
    
    
    $
    25,361
    
    
    $
    23,084
    
    
    $
    23,084Loans payable
    
    
    1,563
    
    
    
    1,563
    
    
    
    2,625
    
    
    
    2,625Accrued expenses
    
    
    44,390
    
    
    
    44,517
    
    
    
    46,726
    
    
    
    46,655Net payable to Financing and Insurance Operations
    
    
    2,846
    
    
    
    2,846
    
    
    
    2,004
    
    
    
    2,004Total current liabilities
    
    
    74,160
    
    
    
    74,287
    
    
    
    74,439
    
    
    
    74,368Long-term debt
    
    
    31,043
    
    
    
    31,043
    
    
    
    29,814
    
    
    
    29,814Postretirement benefits other than pensions
    
    
    25,815
    
    
    
    25,882
    
    
    
    27,721
    
    
    
    27,797Pensions
    
    
    9,629
    
    
    
    9,619
    
    
    
    7,489
    
    
    
    7,489Other liabilities and deferred income taxes
    
    
    15,921
    
    
    
    16,447
    
    
    
    15,467
    
    
    
    16,000Total Automotive and Other Operations liabilities
    
    
    156,568
    
    
    
    157,278
    
    
    
    154,930
    
    
    
    155,468Financing and Insurance OperationsAccounts payable
    
    
    3,333
    
    
    
    3,333
    
    
    
    3,293
    
    
    
    3,293Debt
    
    
    251,015
    
    
    
    251,015
    
    
    
    244,588
    
    
    
    244,588Other liabilities and deferred income taxes
    
    
    32,549
    
    
    
    32,473
    
    
    
    26,589
    
    
    
    26,812Total Financing and Insurance Operations liabilities
    
    
    286,897
    
    
    
    286,821
    
    
    
    274,470
    
    
    
    274,693Total liabilities
    
    
    443,465
    
    
    
    444,099
    
    
    
    429,400
    
    
    
    430,161Minority interests
    
    
    902
    
    
    
    902
    
    
    
    328
    
    
    
    328Total stockholders equity
    
    
    24,264
    
    
    
    23,846
    
    
    
    27,736
    
    
    
    27,451Total liabilities and stockholders equity
    
    $
    468,631
    
    
    $
    468,847
    
    
    $
    457,464
    
    
    $
    457,940
 17




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##### Table of Contents



GENERAL MOTORS CORPORATION AND SUBSIDIARIES
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  continued(Unaudited)
 NOTE 1. Financial Statement Presentation (continued)
 Restatement of Financial Statements (continued)
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 For The Six Months Ended June 30,2005
    
    
    2004Previously
    
    
    
    
    
    
    Previouslyreported
    
    
    Restated
    
    
    reported
    
    
    Restated(dollars in millions)Net cash
provided by (used in) operating activities
    
    $
    2,489
    
    
    $
    (1,781
    )


    

    $
    559
    
    
    $
    (282
    )Cash flows from investing activitiesExpenditures for property
    
    
    (2,944
    )
    
    
    (2,944
    )
    
     
    (3,201
    )
    
    
    (3,201
    )Investments in marketable securities  acquisitions
    
    
    (10,830
    )
    
    
    (10,830
    )
    
    
    (6,466
    )
    
    
    (6,466
    )Investments in marketable securities  liquidations
    
    
    10,269
    
    

    
    10,269
    
    
    
    7,064

    
    
    
    7,064Net change in mortgage servicing rights
    
    
    (784
    )
    
    
    (185
    )
    
    
    (816
    )
    
    
    (176
    )Increase in finance receivables
    
    
    (5,970
    )
    
    
    (2,569
    )

    
    
    (17,556
    )
    
    
    (17,486
    )Proceeds from sales of finance receivables
    
    
    17,692

    
    
    
    17,692

    
    
    
    9,012

        
    
    9,012Operating leases  acquisitions
    
    
    (8,378
    )
    
    
    (8,378
    )


    
    
    (7,118
    )
    
    
    (7,118
    )Operating leases  liquidations
    
    
    3,258

    

    
    
    3,258

    
    
    
    3,992

    
    
    
    3,992Investments in companies, net of cash acquired
    
    
    1,355

    
    
    
    1,355

    
    
    
    (32
    )
    
    
    (32
    )Other
    
    
    (2,411
    )
    

    
    (2,141
    )
    
    
    982

    
    
    
    1,113Net cash
provided by (used in) investing activities
    
    
    1,257
    
    
    
    5,527
    
    
    
    (14,139
    )
    
    
    (13,298
    )Cash flows from financing activitiesNet increase
(decrease) in loans payable
    
    
    (8,411
    )    
    
    (8,411
    )
    
    
    2,137
    
    
    

    2,137Long-term debt  borrowings
    
    
    30,440
    
    
    
    30,440

    
    
    
    37,784
    
    
    
    37,784Long-term debt  repayments
    
    
    (32,144
    )
    
    
    (32,144
    )
    
    
    (30,986
    )
    
    
    (30,986
    )Cash dividends paid to stockholders
    
    
    (570
    )
    
    
    (570
    )
    
    
    (564
    )
    
    
    (564
    )Other
    
    
    3,619
    
    
    
    3,619
    
    
    
    2,804
    
    
    
    2,804Net cash provided by (used in) financing activities
    
    
    (7,066
    )    
    
    (7,066
    )
    
    
    11,175
    
    
    
    11,175Effect of exchange rate changes on cash and cash equivalents
    
    
    (412
    )
    
    
    (412
    )
    
    
    (248
    )
    
    
    (248
    )Net decrease in cash and cash equivalents
    
    
    (3,732
    )
    
    
    (3,732
    )
    
    
    (2,653
    )
    
    
    (2,653
    )Cash and cash equivalents at beginning of the period
    
    
    35,993
    
    
    
    35,993
    
    
    
    32,554
    
    
    
    32,554Cash and cash equivalents at end of the period
    
    $
    32,261
    
    
    $
    32,261
    
    
    $
    29,901
    
    
    $
    29,901
 18




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##### Table of Contents



GENERAL MOTORS CORPORATION AND SUBSIDIARIES
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  continued(Unaudited)
 NOTE 1. Financial Statement Presentation (continued)
 Restatement of Financial Statements (continued)
 SUPPLEMENTAL INFORMATION TO THE CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 For The Six Months Ended June 30, 2005Automotiveand Other Operations
    
    
    Financing and InsurancePreviously
    
    
    
    
    
    
    Previouslyreported
    
    
    Restated
    
    
    reported
    
    
    Restated(dollars in millions)Net cash provided by (used in) operating activities
    
    $
    (2,138
    )
    
    $
    (2,138
    )
    
    $
    4,627
    
    
    $
    357Cash flows from investing activitiesExpenditures for property
    
    
    (2,813
    )
    
    
    (2,813
    )
    
    
    (131
    )
    
    
    (131
    )Investments in marketable securities  acquisitions
    
    
    (271
    )
    
    
    (271
    )
    
    
    (10,559
    )
    
    
    (10,559
    )Investments in marketable securities  liquidations
    
    
    3,137
    
    
    
    3,137
    
    
    
    7,132
    
    
    
    7,132Net change
in mortgage servicing rights
    
    
    
    
    
    
    
    
    
    
    (784
    )
    
    
    (185
    )Increase in finance receivables
    
    
    
    
    
    
    
    
    
    
    (5,970
    )
    
    
    (2,569
    )Proceeds from sales of finance receivables
    
    
    
    
    
    
    
    
    
    
    17,692
    
    
    
    17,692Operating leases  acquisitions
    
    
    
    
    
    
    
    
    
    
    (8,378
    )
    
    
    (8,378
    )Operating leases  liquidations
    
    
    
    
    
    
    
    
    
    
    3,258
    
    
    
    3,258Net investing activity with Financing and
Insurance Operations
    
    
    1,000
    
    
    
    1,000
    
    
    
    
    
    
    
    Investments in companies, net of cash acquired
    
    
    1,355
    
    
    
    1,355
    
    
    
    
    
    
    
    Other
    
    
    (591
    )
    
    
    (591
    )
    
    
    (1,820
    )
    
    
    (1,550
    )Net cash provided by (used in) investing activities
    
    
    1,817
    
    
    
    1,817
    
    
    
    440
    
    
    
    4,710Cash flows from financing activitiesNet increase
(decrease) in loans payable
    
    
    46
    
    
    
    46
    
    
    
    (8,457
    )
    
    
    (8,457
    )Long-term debt  borrowings
    
    
    25
    
    
    
    25
    
    
    
    30,415
    
    
    
    30,415Long-term debt  repayments
    
    
    (20
    )
    
    
    (20
    )
    
    
    (32,124
    )
    
    
    (32,124
    )Net financing activity with Automotive and Other
Operations
    
    
    
    
    
    
    
    
    
    
    (1,000
    )
    
    
    (1,000
    )Cash dividends paid to stockholders
    
    
    (570
    )
    
    
    (570
    )
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    
    
    
    
    3,619
    
    
    
    3,619Net cash provided by (used in) financing activities
    
    
    (519
    )
    
    
    (519
    )
    
    
    (7,547
    )
    
    
    (7,547
    )Effect of exchange rate changes on cash and cash
equivalents
    
    
    (283
    )
    
    
    (283
    )
    
    
    (129
    )
    
    
    (129
    )Net transactions with Automotive/Financing
Operations
    
    
    420
    
    
    
    420
    
    
    
    (420
    )
    
    
    (420
    )Net increase (decrease) in cash and cash
equivalents
    
    
    (703
    )
    
    
    (703
    )
    
    
    (3,029
    )
    
    
    (3,029
    )Cash and cash equivalents at beginning of the year
    
    
    13,148
    
    
    
    13,148
    
    
    
    22,845
    
    
    
    22,845Cash and cash equivalents at end of the year
    
    $
    12,445
    
    
    $
    12,445
    
    
    $
    19,816
    
    
    $
    19,816
 19




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##### Table of Contents



GENERAL MOTORS CORPORATION AND SUBSIDIARIES
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  continued(Unaudited)
 NOTE 1. Financial Statement Presentation (continued)
 Restatement of Financial Statements (continued)
 SUPPLEMENTAL INFORMATION TO THE CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 For The Six Months Ended June 30, 2004Automotiveand Other Operations
    
    
    Financing and InsurancePreviously
    
    
    
    
    
    
    Previouslyreported
    
    
    Restated
    
    
    reported
    
    
    Restated(dollars in millions)Net cash provided by (used in) operating activities
    
    $
    955
    
    
    $
    955
    
    
    $
    (396
    )
    
    $
    (1,237
    )Cash flows from investing activitiesExpenditures for property
    
    
    (3,038
    )
    
    
    (3,038
    )
    
    
    (163
    )
    
    
    (163
    )Investments in marketable securities  acquisitions
    
    
    (855
    )
    
    
    (855
    )
    
    
    (5,611
    )
    
    
    (5,611
    )Investments in marketable securities  liquidations
    
    
    1,603
    
    
    
    1,603
    
    
    
    5,461
    
    
    
    5,461Net change
in mortgage servicing rights
    
    
    
    
    
    
    
    
    
    
    (816
    )
    
    
    (176
    )Increase in finance receivables
    
    
    
    
    
    
    
    
    
    
    (17,556
    )
    
    
    (17,486
    )Proceeds from sales of finance receivables
    
    
    
    
    
    
    
    
    
    
    9,012
    
    
    
    9,012Operating leases  acquisitions
    
    
    
    
    
    
    
    
    
    
    (7,118
    )
    
    
    (7,118
    )Operating leases  liquidations
    
    
    
    
    
    
    
    
    
    
    3,992
    
    
    
    3,992Net investing activity with Financing and Insurance
Operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Investments in companies, net of cash acquired
    
    
    (53
    )
    
    
    (53
    )
    
    
    21
    
    
    
    21Other
    
    
    110
    
    
    
    110
    
    
    
    872
    
    
    
    1,003Net cash provided by (used in) investing activities
    
    
    (2,233
    )
    
    
    (2,233
    )
    
    
    (11,906
    )
    
    
    (11,065
    )Cash flows from financing activitiesNet
increase (decrease) in loans payable
    
    
    (437
    )
    
    
    (437
    )
    
    
    2,574
    
    
    
    2,574Long-term debt  borrowings
    
    
    756
    
    
    
    756
    
    
    
    37,028
    
    
    
    37,028Long-term debt  repayments
    
    
    (55
    )
    
    
    (55
    )
    
    
    (30,931
    )
    
    
    (30,931
    )Net financing activity with Automotive and Other
Operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Cash dividends paid to stockholders
    
    
    (564
    )
    
    
    (564
    )
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    
    
    
    
    2,804
    
    
    
    2,804Net cash provided by (used in) financing activities
    
    
    (300
    )
    
    
    (300
    )
    
    
    11,475
    
    
    
    11,475Effect of exchange rate changes on cash and cash
equivalents
    
    
    (176
    )
    
    
    (176
    )
    
    
    (72
    )
    
    
    (72
    )Net transactions with Automotive/Financing
Operations
    
    
    512
    
    
    
    512
    
    
    
    (512
    )
    
    
    (512
    )Net increase (decrease) in cash and cash equivalents
    
    
    (1,242
    )
    
    
    (1,242
    )
    
    
    (1,411
    )
    
    
    (1,411
    )Cash and cash equivalents at beginning of the year
    
    
    14,424
    
    
    
    14,424
    
    
    
    18,130
    
    
    
    18,130Cash and cash equivalents at end of the year
    
    $
    13,182
    
    
    $
    13,182
    
    
    $
    16,719
    
    
    $
    16,719
 Presentation of Delphi Receivable
  20




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##### Table of Contents



GENERAL MOTORS CORPORATION AND SUBSIDIARIES
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  continued
(Unaudited)
 NOTE 1. Financial Statement Presentation (concluded)
 New Accounting Standards
   NOTE 2. Acquisition and Disposal of Businesses
   21




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##### Table of Contents



GENERAL MOTORS CORPORATION AND SUBSIDIARIES
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  continued
(Unaudited)
 NOTE 2. Acquisition and Disposal of Businesses (concluded)
 Pro-forma
    
    Pro-formaThree Months Ended
    
    Six Months EndedJune 30,
    
    June 302005
    
    2004
    
    2005
    
    2004Total net sales and revenues
    
    $
    1,497
    
    
    $
    1,047
    
    
    $
    2,668
    
    
    $
    2,039Income (loss) before income
taxes, equity income and
minority interests
    
    $
    59
    
    
    $
    34
    
    
    $
    43
    
    
    $
    18
   NOTE 3. Inventories
  June 30,
    
    
    Dec. 31,
    
    
    June 30,2005
    
    
    2004
    
    
    2004Automotive and Other OperationsProductive material, work in process, and supplies
    
    $
    5,364
    
    
    $
    4,838
    
    
    $
    5,324Finished product, service parts, etc.
    
    
    8,757
    
    
    
    8,321
    
    
    
    7,838Total inventories at FIFO
    
    
    14,121
    
    
    
    13,159
    
    
    
    13,162Less LIFO allowance
    
    
    (1,303
    )
    
    
    (1,442
    )
    
    
    (1,586
    )Total inventories (less allowances)
    
    $
    12,818
    
    
    $
    11,717
    
    
    $
    11,576Financing and Insurance OperationsOff-lease vehicles
    
    
    532
    
    
    
    530
    
    
    
    698Total consolidated inventories (less allowances)
    
    $
    13,350
    
    
    $
    12,247
    
    
    $
    12,274
 22




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##### Table of Contents



GENERAL MOTORS CORPORATION AND SUBSIDIARIES
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  continued
(Unaudited)
 NOTE 4. Goodwill and Acquired Intangible Assets
  Gross Carrying
    
    
    Accumulated
    
    
    Net CarryingAmount
    
    
    Amortization
    
    
    AmountJune 30, 2005Automotive and Other OperationsAmortizing intangible assets:Patents and intellectual property rights
    
    $
    510
    
    
    $
    93
    
    
    $
    417Non-amortizing intangible assets:Goodwill
    
    
    
    
    
    
    
    
    
    
    526Pension intangible asset
    
    
    
    
    
    
    
    
    
    
    715Total goodwill and intangible assets
    
    
    
    
    
    
    
    
    
    $
    1,658Financing and Insurance OperationsAmortizing intangible assets:Customer lists and contracts
    
    $
    74
    
    
    $
    45
    
    
    
    29Trademarks and other
    
    
    40
    
    
    
    22
    
    
    
    18Covenants not to compete
    
    
    18
    
    
    
    18
    
    
    
    Total
    
    $
    132
    
    
    $
    85
    
    
    $
    47Non-amortizing intangible assets:Goodwill
    
    
    
    
    
    
    
    
    
    
    3,242Total goodwill and intangible assets
    
    
    
    
    
    
    
    
    
    
    3,289Total consolidated goodwill and intangible assets
    
    
    
    
    
    
    
    
    
    $
    4,947
 Gross Carrying
    
    
    Accumulated
    
    
    Net CarryingAmount
    
    
    Amortization
    
    
    AmountJune 30, 2004Automotive and Other OperationsAmortizing intangible assets:Patents and intellectual property rights
    
    $
    303
    
    
    $
    50
    
    
    $
    253Non-amortizing intangible assets:Goodwill
    
    
    
    
    
    
    
    
    
    
    540Pension intangible asset
    
    
    
    
    
    
    
    
    
    
    619Total goodwill and intangible assets
    
    
    
    
    
    
    
    
    
    $
    1,412Financing and Insurance OperationsAmortizing intangible assets:Customer lists and contracts
    
    $
    65
    
    
    $
    35
    
    
    
    30Trademarks and other
    
    
    40
    
    
    
    18
    
    
    
    22Covenants not to compete
    
    
    18
    
    
    
    18
    
    
    
    Total
    
    $
    123
    
    
    $
    71
    
    
    $
    52Non-amortizing intangible assets:Goodwill
    
    
    
    
    
    
    
    
    
    
    3,232Total goodwill and intangible assets
    
    
    
    
    
    
    
    
    
    
    3,284Total consolidated goodwill and intangible assets
    
    
    
    
    
    
    
    
    
    $
    4,696
  23




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##### Table of Contents



GENERAL MOTORS CORPORATION AND SUBSIDIARIES
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  continued
(Unaudited)
 NOTE 4. Goodwill and Acquired Intangible Assets (concluded)
  TotalAuto &GMNA
    
    
    GME
    
    
    Other
    
    
    GMAC
    
    
    Total GMBalance as of December 31, 2004
    
    $
    154
    
    
    $
    446
    
    
    $
    600
    
    
    $
    3,274
    
    
    $
    3,874Goodwill acquired during the period
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3
    
    
    
    3Effect of foreign currency translation
    
    
    (7
    )
    
    
    (67
    )
    
    
    (74
    )
    
    
    (35
    )
    
    
    (109
    )Balance as of June 30, 2005
    
    $
    147
    
    
    $
    379
    
    
    $
    526
    
    
    $
    3,242
    
    
    $
    3,768Balance as of December 31, 2003
    
    $
    154
    
    
    $
    413
    
    
    $
    567
    
    
    $
    3,223
    
    
    $
    3,790Goodwill acquired during the period
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5
    
    
    
    5Effect of foreign currency translation
    
    
    (2
    )
    
    
    (20
    )
    
    
    (22
    )
    
    
    4
    
    
    
    (18
    )Other
    
    
    (5
    )
    
    
    
    
    
    
    (5
    )
    
    
    
    
    
    
    (5
    )Balance as of June 30, 2004
    
    $
    147
    
    
    $
    393
    
    
    $
    540
    
    
    $
    3,232
    
    
    $
    3,772
 NOTE 5. Investment in Nonconsolidated Affiliates
   Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2005
    
    2004
    
    2005
    
    2004Italy
    
    $
    11
    
    
    $
    11
    
    
    $
    32
    
    
    $
    29Japan
    
    $
    45
    
    
    $
    53
    
    
    $
    95
    
    
    $
    159China
    
    $
    99
    
    
    $
    148
    
    
    $
    132
    
    
    $
    310Korea
    
    $
    25
    
    
    $
    15
    
    
    $
    17
    
    
    $
    7
   24




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##### Table of Contents



GENERAL MOTORS CORPORATION AND SUBSIDIARIES
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  continued
(Unaudited)
 NOTE 6. Product Warranty Liability
  Six Months
    
    
    Twelve Months
    
    
    Six MonthsEnded
    
    
    Ended
    
    
    EndedJune 30, 2005
    
    
    Dec. 31, 2004
    
    
    June 30, 2004Beginning balance
    
    $
    9,315
    
    
    $
    8,832
    
    
    $
    8,832Payments
    
    
    (2,366
    )
    
    
    (4,669
    )
    
    
    (2,290
    )Increase in liability (warranties issued during
period)
    
    
    2,867
    
    
    
    5,065
    
    
    
    2,794Adjustments to liability (pre-existing warranties)
    
    
    (264
    )
    
    
    (85
    )
    
    
    (157
    )Effect of foreign currency translation and other
adjustments
    
    
    (263
    )
    
    
    _ 172
    
    
    
    (23
    )Ending balance
    
    $
    9,289
    
    
    $
    9,315
    
    
    $
    9,156
  NOTE 7. Commitments and Contingent Matters
 Commitments
       Contingent Matters
  25




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##### Table of Contents



GENERAL MOTORS CORPORATION AND SUBSIDIARIES
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  continued
(Unaudited)
 NOTE 7. Commitments and Contingent Matters (concluded)
  NOTE 8. Comprehensive Income (Loss)
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 302005
    
    
    2004
    
    
    2005
    
    
    2004Net income (loss)
    
    $
    (987
    )
    
    $
    1,439
    
    
    $
    (2,240
    )
    
    $
    2,664Other comprehensive income (loss)
    
    
    7
    
    
    
    302
    
    
    
    (719
    )
    
    
    448Total
    
    $
    (980
    )
    
    $
    1,741
    
    
    $
    (2,959
    )
    
    $
    3,112
 NOTE 9. Earnings Per Share Attributable to Common Stock
  $1-2/3 Par Value Common StockIncome
    
    
    
    
    
    
    Per Share(Loss)
    
    
    Shares
    
    
    AmountThree Months Ended June 30, 2005Basic EPS(Losses) attributable to common stock
    
    $
    (987
    )
    
    
    565
    
    
    $
    (1.75
    )Effect of Dilutive SecuritiesAssumed exercise of dilutive stock options
    
    
    
    
    
    
    
    
    
    
    Diluted EPSAdjusted (losses) attributable to common stock
    
    $
    (987
    )
    
    
    565
    
    
    $
    (1.75
    )Three Months Ended June 30, 2004Basic EPSEarnings attributable to common stock
    
    $
    1,439
    
    
    
    565
    
    
    $
    2.55Effect of Dilutive SecuritiesAssumed exercise of dilutive stock options
    
    
    
    
    
    
    3
    
    
    
    (0.02
    )Diluted EPSAdjusted earnings attributable to common stock
    
    $
    1,439
    
    
    
    568
    
    
    $
    2.53
 26




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##### Table of Contents



GENERAL MOTORS CORPORATION AND SUBSIDIARIES
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  continued
(Unaudited)
 NOTE 9. Earnings Per Share Attributable to Common Stock (concluded)
 $1-2/3 Par Value Common StockIncome
    
    
    
    
    
    
    Per Share(Loss)
    
    
    Shares
    
    
    AmountSix Months Ended June 30, 2005Basic EPS(Losses) attributable to common stock
    
    $
    (2,240
    )
    
    
    565
    
    
    $
    (3.96
    )Effect of Dilutive SecuritiesAssumed exercise of dilutive stock options
    
    
    
    
    
    
    
    
    
    
    Diluted EPSAdjusted (losses) attributable to common stock
    
    $
    (2,240
    )
    
    
    565
    
    
    $
    (3.96
    )Six Months Ended June 30, 2004Basic EPSEarnings attributable to common stock
    
    $
    2,664
    
    
    
    565
    
    
    $
    4.72Effect of Dilutive SecuritiesAssumed exercise of dilutive stock options
    
    
    
    
    
    
    4
    
    
    
    (0.04
    )Diluted EPSAdjusted earnings attributable to common stock
    
    $
    2,664
    
    
    
    569
    
    
    $
    4.68
  NOTE 10. Depreciation and Amortization
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Depreciation
    
    $
    1,292
    
    
    $
    1,441
    
    
    $
    2,562
    
    
    $
    2,589Amortization of special tools
    
    
    803
    
    
    
    774
    
    
    
    1,619
    
    
    
    1,500Amortization of intangible assets
    
    
    13
    
    
    
    9
    
    
    
    23
    
    
    
    16Total
    
    $
    2,108
    
    
    $
    2,224
    
    
    $
    4,204
    
    
    $
    4,105
 27




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##### Table of Contents



GENERAL MOTORS CORPORATION AND SUBSIDIARIES
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  continued
(Unaudited)
 NOTE 11. Pensions and Other Postretirement Benefits
 U.S. Plans
    
    
    Non-U.S. PlansPension Benefits
    
    
    Pension Benefits
    
    
    Other BenefitsThree Months Ended
    
    
    Three Months Ended
    
    
    Three Months EndedJune 30,
    
    
    June 30,
    
    
    June 30,2005
    
    
    2004
    
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004(dollars in millions)Components of expenseService cost
    
    $
    279
    
    
    $
    275
    
    
    $
    70
    
    
    $
    60
    
    
    $
    188
    
    
    $
    149Interest cost
    
    
    1,221
    
    
    
    1,263
    
    
    
    235
    
    
    
    216
    
    
    
    1,079
    
    
    
    967Expected return on plan assets
    
    
    (1,974
    )
    
    
    (1,955
    )
    
    
    (182
    )
    
    
    (163
    )
    
    
    (421
    )
    
    
    (274
    )Amortization of prior service cost
    
    
    291
    
    
    
    319
    
    
    
    26
    
    
    
    23
    
    
    
    (15
    )
    
    
    (20
    )Recognized net actuarial loss
    
    
    517
    
    
    
    464
    
    
    
    69
    
    
    
    47
    
    
    
    584
    
    
    
    276Curtailments, settlements, and other
    
    
    21
    
    
    
    
    
    
    
    25
    
    
    
    1
    
    
    
    2
    
    
    
    Net expense
    
    $
    355
    
    
    $
    366
    
    
    $
    243
    
    
    $
    184
    
    
    $
    1,417
    
    
    $
    1,098
 Six Months Ended
    
    
    Six Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,
    
    
    June 30,2005
    
    
    2004
    
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004(dollars in millions)Components of expenseService cost
    
    $
    559
    
    
    $
    548
    
    
    $
    142
    
    
    $
    122
    
    
    $
    376
    
    
    $
    306Interest cost
    
    
    2,442
    
    
    
    2,523
    
    
    
    476
    
    
    
    439
    
    
    
    2,160
    
    
    
    1,984Expected return on plan assets
    
    
    (3,948
    )
    
    
    (3,908
    )
    
    
    (367
    )
    
    
    (326
    )
    
    
    (842
    )
    
    
    (547
    )Amortization of prior service cost
    
    
    582
    
    
    
    638
    
    
    
    53
    
    
    
    47
    
    
    
    (31
    )
    
    
    (40
    )Recognized net actuarial loss
    
    
    1,033
    
    
    
    928
    
    
    
    138
    
    
    
    95
    
    
    
    1,168
    
    
    
    648Curtailments, settlements, and other
    
    
    112
    
    
    
    34
    
    
    
    84
    
    
    
    8
    
    
    
    2
    
    
    
    Net expense
    
    $
    780
    
    
    $
    763
    
    
    $
    526
    
    
    $
    385
    
    
    $
    2,833
    
    
    $
    2,351
  NOTE 12. 2005 Initiatives
    28




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##### Table of Contents



GENERAL MOTORS CORPORATION AND SUBSIDIARIES
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  continued
(Unaudited)
 NOTE 13. Segment Reporting
 Total
    
    
    
    
    
    
    Auto &
    
    
    
    
    
    
    Other
    
    
    TotalGMNA
    
    
    GME
    
    
    GMLAAM
    
    
    GMAP
    
    
    GMA
    
    
    Other
    
    
    Other
    
    
    GMAC
    
    
    Financing
    
    
    Financing(dollars in millions)For the Three Months Ended
June 30, 2005Manufactured products sales and revenues:External customers
    
    $
    28,038
    
    
    $
    8,025
    
    
    $
    2,742
    
    
    $
    1,640
    
    
    $
    40,445
    
    
    $
    (267
    )
    
    $
    40,178
    
    
    $
    8,319
    
    
    $
    (28
    )
    
    $
    8,291Intersegment
    
    
    (913
    )
    
    
    438
    
    
    
    193
    
    
    
    282
    
    
    
    
    
    
    
    _  -
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total manufactured products
    
    $
    27,125
    
    
    $
    8,463
    
    
    $
    2,935
    
    
    $
    1,922
    
    
    $
    40,445
    
    
    $
    (267
    )
    
    $
    40,178
    
    
    $
    8,319
    
    
    $
    (28
    )
    
    $
    8,291Interest income (a)
    
    $
    318
    
    
    $
    112
    
    
    $
    10
    
    
    $
    2
    
    
    $
    442
    
    
    $
    (252
    )
    
    $
    190
    
    
    $
    432
    
    
    $
    (70
    )
    
    $
    362Interest expense
    
    $
    755
    
    
    $
    132
    
    
    $
    38
    
    
    $
    9
    
    
    $
    934
    
    
    $
    (263
    )
    
    $
    671
    
    
    $
    3,050
    
    
    $
    (9
    )
    
    $
    3,041Net income (loss)
    
    $
    (1,121
    )
    
    $
    (112
    )
    
    $
    25
    
    
    $
    (605
    )
    
    $
    (1,813
    )
    
    $
    18
    
    
    $
    (1,795
    )
    
    $
    816
    
    
    $
    (8
    )
    
    $
    808Segment assets
    
    $
    124,324
    
    
    $
    24,211
    
    
    $
    4,869
    
    
    $
    9,356
    
    
    $
    162,760
    
    
    $
    (3,580
    )
    
    $
    159,180
    
    
    $
    309,984
    
    
    $
    (317
    )
    
    $
    309,667For the Three Months Ended
June 30, 2004Manufactured products sales and revenues:External customers
    
    $
    29,988
    
    
    $
    7,917
    
    
    $
    1,764
    
    
    $
    1,456
    
    
    $
    41,125
    
    
    $
    77
    
    
    $
    41,202
    
    
    $
    7,742
    
    
    $
    349
    
    
    $
    8,091Intersegment
    
    
    (559
    )
    
    
    177
    
    
    
    145
    
    
    
    237
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total manufactured products
    
    $
    29,429
    
    
    $
    8,094
    
    
    $
    1,909
    
    
    $
    1,693
    
    
    $
    41,125
    
    
    $
    77
    
    
    $
    41,202
    
    
    $
    7,742
    
    
    $
    349
    
    
    $
    8,091Interest income (a)
    
    $
    212
    
    
    $
    92
    
    
    $
    (3
    )
    
    $
    4
    
    
    $
    305
    
    
    $
    (170
    )
    
    $
    135
    
    
    $
    329
    
    
    $
    (68
    )
    
    $
    261Interest expense
    
    $
    655
    
    
    $
    88
    
    
    $
    16
    
    
    $
    5
    
    
    $
    764
    
    
    $
    (168
    )
    
    $
    596
    
    
    $
    2,253
    
    
    $
    (10
    )
    
    $
    2,243Net income (loss)
    
    $
    366
    
    
    $
    (62
    )
    
    $
    18
    
    
    $
    253
    
    
    $
    575
    
    
    $
    65
    
    
    $
    640
    
    
    $
    813
    
    
    $
    (14
    )
    
    $
    799Segment assets
    
    $
    129,986
    
    
    $
    24,956
    
    
    $
    3,666
    
    
    $
    3,879
    
    
    $
    162,487
    
    
    $
    (1,495
    )
    
    $
    160,992
    
    
    $
    297,165
    
    
    $
    (217
    )
    
    $
    296,948For the Six Months Ended
June 30, 2005Manufactured products sales and revenues:External customers
    
    $
    54,123
    
    
    $
    15,598
    
    
    $
    4,876
    
    
    $
    3,175
    
    
    $
    77,772
    
    
    $
    (291
    )
    
    $
    77,481
    
    
    $
    16,540
    
    
    $
    221
    
    
    $
    16,761Intersegment
    
    
    (1,620
    )
    
    
    822
    
    
    
    358
    
    
    
    441
    
    
    
    1
    
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total manufactured products
    
    $
    52,503
    
    
    $
    16,420
    
    
    $
    5,234
    
    
    $
    3,616
    
    
    $
    77,773
    
    
    $
    (292
    )
    
    $
    77,481
    
    
    $
    16,540
    
    
    $
    221
    
    
    $
    16,761Interest income (a)
    
    $
    614
    
    
    $
    203
    
    
    $
    29
    
    
    $
    5
    
    
    $
    851
    
    
    $
    (452
    )
    
    $
    399
    
    
    $
    909
    
    
    $
    (164
    )
    
    $
    745Interest expense
    
    $
    1,513
    
    
    $
    243
    
    
    $
    62
    
    
    $
    16
    
    
    $
    1,834
    
    
    $
    (478
    )
    
    $
    1,356
    
    
    $
    6,051
    
    
    $
    (16
    )
    
    $
    6,035Net income (loss)
    
    $
    (2,825
    )
    
    $
    (659
    )
    
    $
    56
    
    
    $
    (535
    )
    
    $
    (3,963
    )
    
    $
    186
    
    
    $
    (3,777
    )
    
    $
    1,544
    
    
    $
    (7
    )
    
    $
    1,537For the Six Months Ended
June 30, 2004Manufactured products sales and revenues:External customers
    
    $
    59,631
    
    
    $
    15,195
    
    
    $
    3,493
    
    
    $
    2,884
    
    
    $
    81,203
    
    
    $
    136
    
    
    $
    81,339
    
    
    $
    15,344
    
    
    $
    472
    
    
    $
    15,816Intersegment
    
    
    (1,099
    )
    
    
    442
    
    
    
    249
    
    
    
    408
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total manufactured products
    
    $
    58,532
    
    
    $
    15,637
    
    
    $
    3,742
    
    
    $
    3,292
    
    
    $
    81,203
    
    
    $
    136
    
    
    $
    81,339
    
    
    $
    15,344
    
    
    $
    472
    
    
    $
    15,816Interest income (a)
    
    $
    398
    
    
    $
    173
    
    
    $
    8
    
    
    $
    6
    
    
    $
    585
    
    
    $
    (293
    )
    
    $
    292
    
    
    $
    662
    
    
    $
    (137
    )
    
    $
    525Interest expense
    
    $
    1,294
    
    
    $
    175
    
    
    $
    10
    
    
    $
    12
    
    
    $
    1,491
    
    
    $
    (333
    )
    
    $
    1,158
    
    
    $
    4,476
    
    
    $
    (11
    )
    
    $
    4,465Net income (loss)
    
    $
    710
    
    
    $
    (171
    )
    
    $
    1
    
    
    $
    525
    
    
    $
    1,065
    
    
    $
    43
    
    
    $
    1,108
    
    
    $
    1,570
    
    
    $
    (14
    )
    
    $
    1,556
 
 (a)
    
    Interest income is included in net sales and revenues from external customers. 29




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GENERAL MOTORS CORPORATION AND SUBSIDIARIES
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  concluded
(Unaudited)
 Note 14. Subsequent Event
  30




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GENERAL MOTORS CORPORATION AND SUBSIDIARIES
 
 ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
   
    
    Automotive and Other Operations (Auto & Other); and
    
    Financing and Insurance Operations (FIO).
  
    
    GMs four automotive regions: GM North America (GMNA), GM Europe (GME), GM Latin
America/Africa/Mid-East (GMLAAM), and GM Asia Pacific (GMAP), which constitute GM
Automotive (GMA); and
    
    Other, which includes the elimination of intersegment transactions, certain
non-segment specific revenues and expenditures, including legacy costs related to
postretirement benefits for certain Delphi and other retirees, and certain corporate
activities.
     31




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GENERAL MOTORS CORPORATION AND SUBSIDIARIES
 RESULTS OF OPERATIONS
 Consolidated Results
 Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2005
    
    2004
    
    2005
    
    2004(dollars in millions)Consolidated:Total net sales and revenues
    
    $
    48,469
    
    
    $
    49,293
    
    
    $
    94,242
    
    
    $
    97,155Net income (loss)
    
    $
    (987
    )
    
    $
    1,439
    
    
    $
    (2,240
    )
    
    $
    2,664Net margin
    
    
    (2.0
    )%
    
    
    2.9
    %
    
    
    (2.4
    )%
    
    
    2.7
    %Automotive and Other Operations:Total net sales and revenues
    
    $
    40,178
    
    
    $
    41,202
    
    
    $
    77,481
    
    
    $
    81,339Net income (loss)
    
    $
    (1,795
    )
    
    $
    640
    
    
    $
    (3,777
    )
    
    $
    1,108Financing and Insurance Operations:Total revenues
    
    $
    8,291
    
    
    $
    8,091
    
    
    $
    16,761
    
    
    $
    15,816Net income
    
    $
    808
    
    
    $
    799
    
    
    $
    1,537
    
    
    $
    1,556
      
    
    Global automotive market share increased 0.5 percentage point to 15.2%;
 
    
    GMNA incurred a significant loss due to lower volumes, unfavorable mix, material cost
pressure, and increased health-care expense;
 
    
    GME achieved improved operating results, which were more than offset by a restructuring
charge related to ongoing initiatives;
 
    
    GMLAAM was profitable for the fifth consecutive quarter;
 
    
    GMAP incurred a net loss primarily as a result of a one-time write down of the investment
in Fuji Heavy Industries Ltd. (FHI) due to FHIs declining financial performance and the
downward adjustments in their business plan in May 2005. In addition to the write down,
operating results of GMAP were lower than 2004 because of conditions in China and lower
income at GM Holden;
 
    
    GMAC earned significant net income despite a lower net interest margin environment.
 32




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GENERAL MOTORS CORPORATION AND SUBSIDIARIES
 GM Automotive and Other Operations Financial Review
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2005
    
    
    2004
    
    
    2005
    
    
    2004(dollars in millions)Auto & Other:Total net sales and revenues
    
    $
    40,178
    
    
    $
    41,202
    
    
    $
    77,481
    
    
    $
    81,339Net income (loss)
    
    $
    (1,795
    )
    
    $
    640
    
    
    $
    (3,777
    )
    
    $
    1,108GMA net income (loss) by region:GMNA
    
    $
    (1,121
    )
    
    $
    366
    
    
    $
    (2,825
    )
    
    $
    710GME
    
    
    (112
    )
    
    
    (62
    )
    
    
    (659
    )
    
    
    (171
    )GMLAAM
    
    
    25
    
    
    
    18
    
    
    
    56
    
    
    
    1GMAP
    
    
    (605
    )
    
    
    253
    
    
    
    (535
    )
    
    
    525Net income (loss)
    
    $
    (1,813
    )
    
    $
    575
    
    
    $
    (3,963
    )
    
    $
    1,065Net margin
    
    
    (4.5
    )%
    
    
    1.4
    %
    
    
    (5.1
    )%
    
    
    1.3
    %GM global automotive market share
    
    
    15.2
    %
    
    
    14.7
    %
    
    
    14.3
    %
    
    
    14.1
    %Other:Net income (loss)
    
    $
    18
    
    
    $
    65
    
    
    $
    186
    
    
    $
    43
     33




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##### Table of Contents



GENERAL MOTORS CORPORATION AND SUBSIDIARIES
 GM Automotive and Other Operations Financial Review (continued)
 GM Automotive Regional Results
 GM North America
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2005
    
    
    2004
    
    
    2005
    
    
    2004(dollars in millions)GMNA:Net income (loss)
    
    $
    (1,121
    )
    
    $
    366
    
    
    $
    (2,825
    )
    
    $
    710Net margin
    
    
    (4.1
    )%
    
    
    1.2
    %
    
    
    (5.4
    )%
    
    
    1.2
    %Production volume
    
    (volume in thousands)Cars
    
    
    458
    
    
    
    543
    
    
    
    928
    
    
    
    1,068Trucks
    
    
    789
    
    
    
    846
    
    
    
    1,502
    
    
    
    1,666Total GMNA
    
    
    1,247
    
    
    
    1,389
    
    
    
    2,430
    
    
    
    2,734Vehicle unit salesIndustry  North America
    
    
    5,631
    
    
    
    5,393
    
    
    
    10,318
    
    
    
    10,068GM as a percentage of industry
    
    
    27.3
    %
    
    
    26.2
    %
    
    
    26.4
    %
    
    
    26.3
    %Industry  U.S.
    
    
    4,801
    
    
    
    4,598
    
    
    
    8,801
    
    
    
    8,592GM as a percentage of industry
    
    
    27.9
    %
    
    
    26.7
    %
    
    
    26.7
    %
    
    
    26.7
    %GM cars
    
    
    23.5
    %
    
    
    23.5
    %
    
    
    23.4
    %
    
    
    24.6
    %GM trucks
    
    
    31.3
    %
    
    
    29.4
    %
    
    
    29.4
    %
    
    
    28.4
    %
     34




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##### Table of Contents



GENERAL MOTORS CORPORATION AND SUBSIDIARIES
 GM Automotive and Other Operations Financial Review (continued)
  GM North America Recovery Plan
  
    
    Execution of new products:
 o
    
    Increasing capital spending concentrated on new products;o
    
    Advancing the timing of several high volume, high profit programs, including
large pick-ups and mid- and large-utilities;o
    
    Achieving strong sales of recently launched products, such as the Cobalt and
H3, ando
    
    Launching additional products in the near term, including the Chevrolet HHR,
Pontiac Solstice, and Cadillac DTS.
 
    
    Retool sales and marketing strategy:
 o
    
    Clarifying, focusing, and differentiating the role of each North American brand;o
    
    Increasing advertising to support new products;o
    
    Implementing pricing and/or content changes on approximately half of 2006 model
year products, emphasizing total value to customers, and decreasing reliance on sales
incentives;o
    
    Focusing on improving GMs sales performance in major metropolitan markets; ando
    
    Improving the retail distribution network.
 
    
    Reduce cost and improve quality:
 o
    
    Continuing the improvements in quality and productivity that have been
recognized in recent surveys by J.D. Power and the Harbour Report;o
    
    Continuing to implement capacity reductions; ando
    
    Continuing efforts to reduce material costs through global sourcing efforts.
 
    
    Address health care cost burden:
 o
    
    GM is engaged in discussions with the UAW and other unions, focused on a
cooperative approach to significantly reduce GMs health care cost disadvantage.
 35




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##### Table of Contents



GENERAL MOTORS CORPORATION AND SUBSIDIARIES
 GM Automotive and Other Operations Financial Review (continued)
 Delphi Matters
     36




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##### Table of Contents



GENERAL MOTORS CORPORATION AND SUBSIDIARIES
 GM Automotive and Other Operations Financial Review (continued)
 GM Europe
 Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2005
    
    2004
    
    2005
    
    2004(dollars in millions)GME net loss
    
    $
    (112
    )
    
    $
    (62
    )
    
    $
    (659
    )
    
    $
    (171
    )GME net margin
    
    
    (1.3
    )%
    
    
    (0.8
    )%
    
    
    (4.0
    )%
    
    
    (1.1
    )%(volume in thousands)Production volume
    
    
    501
    
    
    
    503
    
    
    
    1,003
    
    
    
    976Vehicle unit salesIndustry
    
    
    5,673
    
    
    
    5,576
    
    
    
    10,945
    
    
    
    10,929GM as a percentage of industry
    
    
    9.7
    %
    
    
    9.7
    %
    
    
    9.7
    %
    
    
    9.5
    %GM market share  Germany
    
    
    11.1
    %
    
    
    10.8
    %
    
    
    11.0
    %
    
    
    10.7
    %GM market share  United Kingdom
    
    
    15.5
    %
    
    
    13.9
    %
    
    
    15.2
    %
    
    
    14.0
    %
     37




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GENERAL MOTORS CORPORATION AND SUBSIDIARIES
 GM Automotive and Other Operations Financial Review (continued)
 GM Latin America/Africa/Mid-East
 Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2005
    
    2004
    
    2005
    
    2004(dollars in millions)GMLAAM net income
    
    $
    25
    
    
    $
    18
    
    
    $
    56
    
    
    $
    1GMLAAM net margin
    
    
    0.9
    %
    
    
    0.9
    %
    
    
    1.1
    %
    
    
    0.0
    %(volume in thousands)Production volume
    
    
    196
    
    
    
    172
    
    
    
    381
    
    
    
    331Vehicle unit salesIndustry
    
    
    1,237
    
    
    
    1,020
    
    
    
    2,381
    
    
    
    2,004GM as a percentage of industry
    
    
    18.3
    %
    
    
    17.1
    %
    
    
    17.2
    %
    
    
    16.6
    %GM market share  Brazil
    
    
    21.9
    %
    
    
    23.5
    %
    
    
    20.6
    %
    
    
    23.5
    %
     GM Asia Pacific
 Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2005
    
    2004
    
    2005
    
    2004(dollars in millions)GMAP net income
    
    $
    (605
    )
    
    $
    253
    
    
    $
    (535
    )
    
    $
    525GMAP net margin
    
    
    (31.5
    )%
    
    
    14.9
    %
    
    
    (14.8
    )%
    
    
    15.9
    %(volume in thousands)Production volume
    
    
    400
    
    
    
    337
    
    
    
    735
    
    
    
    633Vehicle unit salesIndustry
    
    
    4,500
    
    
    
    4,048
    
    
    
    9,142
    
    
    
    8,620GM as a percentage of industry
    
    
    6.3
    %
    
    
    5.6
    %
    
    
    5.6
    %
    
    
    5.2
    %GM market share  Australia
    
    
    18.0
    %
    
    
    19.3
    %
    
    
    18.2
    %
    
    
    19.7
    %GM market share  China
    
    
    11.4
    %
    
    
    9.8
    %
    
    
    10.9
    %
    
    
    9.8
    %
 38




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##### Table of Contents



GENERAL MOTORS CORPORATION AND SUBSIDIARIES
 GM Automotive and Other Operations Financial Review (concluded)
 GM Asia Pacific (concluded)
     Other Operations
 Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2005
    
    2004
    
    2005
    
    2004(dollars in millions)Other:Total net sales, revenues, and eliminations
    
    $
    (267
    )
    
    $
    77
    
    
    $
    (292
    )
    
    $
    136Net income (loss)
    
    $
    18
    
    
    $
    65
    
    
    $
    186
    
    
    $
    43
   39




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##### Table of Contents



GENERAL MOTORS CORPORATION AND SUBSIDIARIES
 Health-Care Costs
    GMAC Financial Review
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2005
    
    
    2004
    
    
    2005
    
    
    2004(dollars in millions)Financing operations
    
    $
    378
    
    
    $
    422
    
    
    $
    594
    
    
    $
    849Mortgage operations
    
    
    343
    
    
    
    316
    
    
    
    761
    
    
    
    560Insurance operations
    
    
    95
    
    
    
    75
    
    
    
    189
    
    
    
    161Net income
    
    $
    816
    
    
    $
    813
    
    
    $
    1,544
    
    
    $
    1,570
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##### Table of Contents



GENERAL MOTORS CORPORATION AND SUBSIDIARIES
 GMAC Financial Review (concluded)
   LIQUIDITY AND CAPITAL RESOURCES
 Statements
of Cash Flows Restatements and Reclassifications
    Automotive and Other Operations
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GENERAL MOTORS CORPORATION AND SUBSIDIARIES
 LIQUIDITY AND CAPITAL RESOURCES (continued)
 Automotive and Other Operations (concluded)
    Financing and Insurance Operations
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##### Table of Contents



GENERAL MOTORS CORPORATION AND SUBSIDIARIES
 LIQUIDITY AND CAPITAL RESOURCES (concluded)
 Financing and Insurance Operations (concluded)
   Off-Balance Sheet Arrangements
     June 30,
    
    
    Dec. 31,
    
    
    June 30,2005
    
    
    2004
    
    
    2004Automotive and Other OperationsAssets leased under operating leases
    
    $
    2,455
    
    
    $
    2,553
    
    
    $
    2,293Trade receivables sold (1)
    
    
    1,090
    
    
    
    1,210
    
    
    
    910Total
    
    $
    3,545
    
    
    $
    3,763
    
    
    $
    3,203Financing and Insurance OperationsReceivables sold or securitized:- Mortgage loans
    
    $
    90,309
    
    
    $
    79,389
    
    
    $
    82,852- Retail finance receivables
    
    
    7,675
    
    
    
    5,615
    
    
    
    7,112- Wholesale finance receivables
    
    
    21,396
    
    
    
    21,291
    
    
    
    17,231Total
    
    $
    119,380
    
    
    $
    106,295
    
    
    $
    107,195
 
 (1)
    
    In addition, trade receivables sold to GMAC were $590 million, $549 million and $456
million for the periods ended June 30, 2005, December 31, 2004, and June 30, 2004,
respectively. BOOK VALUE PER SHARE
     43




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##### Table of Contents



GENERAL MOTORS CORPORATION AND SUBSIDIARIES
 EMPLOYMENT AND PAYROLLS
 Worldwide employment for GM and its wholly-owned subsidiariesat June 30, (in thousands)
    
    2005
    
    
    2004GMNA
    
    
    177
    
    
    
    186GME
    
    
    58
    
    
    
    62GMLAAM
    
    
    32
    
    
    
    27GMAP
    
    
    14
    
    
    
    14GMAC
    
    
    34
    
    
    
    33Other
    
    
    4
    
    
    
    5Total employees
    
    
    319
    
    
    
    327
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Worldwide payrolls  (in billions)
    
    $
    5.2
    
    
    $
    5.5
    
    
    $
    10.5
    
    
    $
    11.0
 CRITICAL ACCOUNTING ESTIMATES
  Equipment
on operating lease
  Pension and Other Postretirement Employee Benefits (OPEB)
  44




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##### Table of Contents



GENERAL MOTORS CORPORATION AND SUBSIDIARIES
 NEW ACCOUNTING STANDARDS
   FORWARD-LOOKING STATEMENTS
  
    
    The ability of GM to realize production efficiencies, to achieve reductions in costs as
a result of the turnaround restructuring and health care cost reductions and to implement
capital expenditures at levels and times planned by management;
    
    The pace of product introductions;
    
    Market acceptance of the Corporations new products;
    
    Significant changes in the competitive environment and the effect of competition in the
Corporations markets, including on the Corporations pricing policies;
    
    Our ability to maintain adequate financing sources and an appropriate level of debt;
    
    Restrictions on GMACs and ResCaps ability to pay dividends and prepay subordinated
debt obligations to us;
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##### Table of Contents



GENERAL MOTORS CORPORATION AND SUBSIDIARIES
 FORWARD-LOOKING
STATEMENTS (continued)
 
    
    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;
    
    Costs and risks associated with litigation;
    
    The final results of investigations and inquiries by the SEC;
    
    Changes in our accounting principles, or their application or interpretation, and our
ability to make estimates and the assumptions underlying the estimates, including the range
of estimates for the Delphi pension benefit guarantees, which could result in an impact on
earnings;
    
    Changes in relations with unions and employees/retirees and the legal interpretations of
the agreements with those unions with regard to employees/retirees;
    
    Negotiations and bankruptcy court actions with respect to Delphis obligations to GM,
negotiations with respect to GMs obligations under the pension benefit guarantees to
Delphi employees, and GMs ability to recover any indemnity claims against Delphi;
    
    Labor strikes or work stoppages at GM or at key suppliers such as Delphi;
    
    Additional credit rating downgrades and the effects thereof;
    
    The effect of a potential sale or other extraordinary transaction involving GMAC on the
results of GMs and GMACs operations and liquidity;
    
    Other factors affecting financing and insurance operating segments results of
operations and financial condition such as credit ratings, adequate access to the market,
changes in the residual value of off-lease vehicles, changes in U.S. government-sponsored
mortgage programs or disruptions in the markets in which our mortgage subsidiaries operate,
and changes in our contractual servicing rights;
    
    Shortages of and price increases for fuel; and
    
    Changes in economic conditions, commodity prices, currency exchange rates or political
stability in the markets in which we operate.
  
    
    The ability of GM to complete a transaction regarding a controlling interest in GMAC
while maintaining a significant stake in GMAC, securing separate credit ratings and low
cost funding to sustain growth for GMAC and ResCap, and maintaining the mutually beneficial
relationship between GMAC and GM;
    
    Significant changes in the competitive environment and the effect of competition in the
Corporations markets, including on the Corporations pricing policies;
    
    Our ability to maintain adequate financing sources;
    
    Our ability to maintain an appropriate level of debt;
    
    The profitability and financial condition of GM, including changes in production or
sales of GM vehicles, risks based on GMs contingent benefit guarantees and the possibility
of labor strikes or work stoppages at GM or at key suppliers such as Delphi;
    
    Funding obligations under GM and its subsidiaries qualified U.S. defined benefits pension plans;
    
    Restrictions on ResCaps ability to pay dividends and prepay subordinated debt obligations to us;
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GENERAL MOTORS CORPORATION AND SUBSIDIARIES
 FORWARD-LOOKING STATEMENTS (concluded)
 
    
    Changes in the residual value of off-lease vehicles;
    
    Changes in U.S. government-sponsored mortgage programs or disruptions in the markets in
which our mortgage subsidiaries operate;
    
    Changes in our contractual servicing rights;
    
    Costs and risks associated with litigation;
    
    Changes in our accounting assumptions that may require or that result from changes in
the accounting rules or their application, which could result in an impact on earnings;
    
    Changes in the credit ratings of GMAC or GM;
    
    The threat of natural calamities;
    
    Changes in economic conditions, currency exchange rates or political stability in the
markets in which we operate; and
    
    Changes in the existing, or the adoption of new, laws, regulations, policies or other
activities of governments, agencies and similar organizations.
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##### Table of Contents



GENERAL MOTORS CORPORATION AND SUBSIDIARIES
 
 ITEM 4. Controls and Procedures
     Statement of Cash Flows -
Exemption of Certain Enterprises and Classification of Cash Flows from Certain Securities Acquired for
Resale
    48




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##### Table of Contents



Limitations on the Effectiveness
of Controls
  49




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GENERAL MOTORS CORPORATION AND SUBSIDIARIES
 PART
II
 
 ITEM 6. Exhibits
 ExhibitNumber
    
    Exhibit Name31.1
    
    Section 302 Certification of the Chief Executive Officer31.2
    
    Section 302 Certification of the Chief Financial Officer32.1
    
    Certification of the Chief Executive Officer Pursuant to 18 U.S.C.
Section 1350, As Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 200232.2
    
    Certification of the Chief Financial Officer Pursuant to 18 U.S.C.
Section 1350, As Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
  50




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##### Table of Contents



SIGNATURES
  GENERAL MOTORS CORPORATION
(Registrant)Date:  March 28, 2006
    By:

/s/ PETER R. BIBLE(Peter R. Bible, Chief Accounting Officer) 51