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Item 7. Management’s Discussion and Analysis

2024-01-30 compared with 2023-01-31 · 377 added, 383 removed, 384 unchanged (66% of the section changed)

6 unchanged sentences

Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2022 is incorporated by reference into this MD&A.

Non-GAAP Measures Our non-GAAP measures include:

earnings before interest and taxes (EBIT)-adjusted, presented net of noncontrolling interests;

earnings before income taxes (EBT)-adjusted for our GM Financial segment;

earnings per share (EPS)-diluted-adjusted;

effective tax rate-adjusted (ETR-adjusted);

return on invested capital-adjusted (ROIC-adjusted) and adjusted automotive free cash flow.

Our calculation of these non-GAAP measures may not be comparable to similarly titled measures of other companies due to potential differences between companies in the method of calculation.

As a result, the use of these non-GAAP measures has limitations and should not be considered superior to, in isolation from, or as a substitute for, related U.S.

GAAP measures.

These non-GAAP measures allow management and investors to view operating trends, perform analytical comparisons and benchmark performance between periods and among geographic regions to understand operating performance without regard to items we do not consider a component of our core operating performance.

Furthermore, these non-GAAP measures allow investors the opportunity to measure and monitor our performance against our externally communicated targets and evaluate the investment decisions being made by management to improve ROIC-adjusted.

Management uses these measures in its financial, investment and operational decision-making processes, for internal reporting and as part of its forecasting and budgeting processes.

Further, our Board of Directors uses certain of these and other measures as key metrics to determine management performance under our performance-based compensation plans.

For these reasons, we believe these non-GAAP measures are useful for our investors.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

EBIT-adjusted EBIT-adjusted is presented net of noncontrolling interests and is used by management and can be used by investors to review our consolidated operating results because it excludes automotive interest income, automotive interest expense and income taxes as well as certain additional adjustments that are not considered part of our core operations.

Examples of adjustments to EBIT include, but are not limited to, impairment charges on long-lived assets and other exit costs resulting from strategic shifts in our operations or discrete market and business conditions, and certain costs arising from legal matters.

For EBIT-adjusted and our other non-GAAP measures, once we have made an adjustment in the current period for an item, we will also adjust the related non-GAAP measure in any future periods in which there is an impact from the item.

Our corresponding measure for our GM Financial segment is EBT-adjusted because interest income and interest expense are part of operating results when assessing and measuring the operational and financial performance of the segment.

EPS-diluted-adjusted EPS-diluted-adjusted is used by management and can be used by investors to review our consolidated diluted EPS results on a consistent basis.

EPS-diluted-adjusted is calculated as net income attributable to common stockholders-diluted less adjustments noted above for EBIT-adjusted and certain income tax adjustments divided by weighted-average common shares outstanding-diluted.

Examples of income tax adjustments include the establishment or reversal of significant deferred tax asset valuation allowances.

ETR-adjusted ETR-adjusted is used by management and can be used by investors to review the consolidated effective tax rate for our core operations on a consistent basis.

ETR-adjusted is calculated as Income tax expense less the income tax related to the adjustments noted above for EBIT-adjusted and the income tax adjustments noted above for EPS-diluted-adjusted divided by Income before income taxes less adjustments.

When we provide an expected adjusted effective tax rate, we do not provide an expected effective tax rate because the U.S.

GAAP measure may include significant adjustments that are difficult to predict.

ROIC-adjusted ROIC-adjusted is used by management and can be used by investors to review our investment and capital allocation decisions.

We define ROIC-adjusted as EBIT-adjusted for the trailing four quarters divided by ROIC-adjusted average net assets, which is considered to be the average equity balances adjusted for average automotive debt and interest liabilities, exclusive of finance leases;

average automotive net pension and other postretirement benefits (OPEB) liabilities;

and average automotive net income tax assets during the same period.

Adjusted automotive free cash flow Adjusted automotive free cash flow is used by management and can be used by investors to review the liquidity of our automotive operations and to measure and monitor our performance against our capital allocation program and evaluate our automotive liquidity against the substantial cash requirements of our automotive operations.

We measure adjusted automotive free cash flow as automotive operating cash flow from operations less capital expenditures adjusted for management actions.

Management actions can include voluntary events such as discretionary contributions to employee benefit plans or nonrecurring specific events such as a closure of a facility that are considered special for EBIT-adjusted purposes.

Refer to the “Liquidity and Capital Resources” section of this MD&A for additional information.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

The following table reconciles Net income attributable to stockholders under U.S.

GAAP to EBIT-adjusted:

Years Ended December 31,

2022 2021 2020

Net income attributable to stockholders $ 9,934 $ 10,019 $ 6,427

Income tax expense 1,888 2,771 1,774

Automotive interest expense 987 950 1,098

Automotive interest income (460) (146) (241)

Cruise compensation modifications(a) 1,057 — —

Russia exit(b) 657 — —

Buick dealer strategy(c) 511 — —

Patent royalty matters(d) (100) 250 —

GM Brazil indirect tax matters(e) — 194 —

Cadillac dealer strategy(f) — 175 99

GM Korea wage litigation(g) — 82 —

GMI restructuring(h) — — 683

Ignition switch recall and related legal matters(i) — — (130)

Total adjustments 2,125 701 652

EBIT-adjusted $ 14,474 $ 14,295 $ 9,710

(a) This adjustment was excluded because it relates to the one-time modification of Cruise stock incentive awards.

(b) This adjustment was excluded because it relates to the shutdown of our Russia business including the write off of our net investment and release of accumulated translation losses into earnings.

(c) This adjustment was excluded because it relates to strategic activities to transition certain Buick dealers out of our dealer network as part of Buick’s EV strategy.

In 2023, we expect to incur additional charges as we continue to optimize our Buick dealer network.

The ultimate amount of any future charges will depend on negotiations with our dealers.

(d) These adjustments were excluded because they relate to certain royalties accrued with respect to past-year vehicle sales in 2021 and the resolution of substantially all of these matters in 2022.

(e) This adjustment was excluded because it relates to a settlement with third parties relating to retrospective recoveries of indirect taxes in Brazil realized in prior periods.

(f) These adjustments were excluded because they relate to strategic activities to transition certain Cadillac dealers out of our dealer network as part of Cadillac's EV strategy.

(g) This adjustment was excluded because of the unique events associated with Supreme Court of the Republic of Korea (Korea Supreme Court) decisions related to our salaried workers.

(h) This adjustment was excluded because of a strategic decision to rationalize our core operations by exiting or significantly reducing our presence in various international markets to focus resources on opportunities expected to deliver higher returns.

The adjustments primarily consist of dealer restructurings, asset impairments, inventory provisions and employee separation charges in Australia, New Zealand, Thailand and India.

(i) This adjustment was excluded because of the unique events associated with the ignition switch recall.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

The following table reconciles diluted earnings per common share under U.S.

GAAP to EPS-diluted-adjusted:

Years Ended December 31,

2022 2021 2020

Amount Per Share Amount Per Share Amount Per Share

Diluted earnings per common share $ 8,915 $ 6.13 $ 9,837 $ 6.70 $ 6,247 $ 4.33

Adjustments(a) 2,125 1.46 701 0.47 652 0.46

Tax effect on adjustments(b) (423) (0.29) (105) (0.07) (70) (0.05)

Tax adjustments(c) (482) (0.33) (51) (0.03) 236 0.16

Deemed dividend adjustment(d) 909 0.63 — — — —

EPS-diluted-adjusted $ 11,044 $ 7.59 $ 10,382 $ 7.07 $ 7,065 $ 4.90

(a) Refer to the reconciliation of Net income attributable to stockholders under U.S.

GAAP to EBIT-adjusted within this section of the MD&A for adjustment details.

(b) The tax effect of each adjustment is determined based on the tax laws and valuation allowance status of the jurisdiction to which the adjustment relates.

(c) In the year ended December 31, 2022, the adjustment consists of tax benefit related to the release of a valuation allowance against deferred tax assets considered realizable as a result of Cruise tax reconsolidation.

In the year ended December 31, 2021, the adjustments consist of tax benefits related to a deduction for an investment in a subsidiary and resolution of uncertainty relating to an indirect tax refund claim in Brazil, partially offset by tax expense related to the establishment of a valuation allowance against Cruise deferred tax assets.

In the year ended December 31, 2020, the adjustment consists of tax expense related to the establishment of a valuation allowance against deferred tax assets in Australia and New Zealand.

This adjustment was excluded because significant impacts of valuation allowances are not considered part of our core operations.

(d) This adjustment consists of a deemed dividend related to the redemption of Cruise preferred shares from SoftBank Vision Fund (AIV M2) L.P.

(SoftBank) in the year ended December 31, 2022.

The following table reconciles our effective tax rate under U.S.

GAAP to ETR-adjusted:

Years Ended December 31,

2022 2021 2020

Income before income taxes Income tax expense Effective tax rate Income before income taxes Income tax expense Effective tax rate Income before income taxes Income tax expense Effective tax rate

Effective tax rate $ 11,597 $ 1,888 16.3 % $ 12,716 $ 2,771 21.8 % $ 8,095 $ 1,774 21.9 %

Adjustments(a) 2,221 423 726 105 652 70

Tax adjustments(b) 482 51 (236)

ETR-adjusted $ 13,818 $ 2,793 20.2 % $ 13,442 $ 2,927 21.8 % $ 8,747 $ 1,608 18.4 %

(a) Refer to the reconciliation of Net income attributable to stockholders under U.S.

GAAP to EBIT-adjusted within this section of the MD&A for adjustment details.

Net income attributable to noncontrolling interests for these adjustments is included in the years ended December 31, 2022 and 2021.

The tax effect of each adjustment is determined based on the tax laws and valuation allowance status of the jurisdiction to which the adjustment relates.

(b) Refer to the reconciliation of diluted earnings per common share under U.S.

GAAP to EPS-diluted-adjusted within this section of the MD&A for adjustment details.

We define return on equity (ROE) as Net income attributable to stockholders for the trailing four quarters divided by average equity for the same period.

Management uses average equity to provide comparable amounts in the calculation of ROE.

The following table summarizes the calculation of ROE (dollars in billions):

Years Ended December 31,

2022 2021 2020

Net income attributable to stockholders $ 9.9 $ 10.0 $ 6.4

Average equity(a) $ 66.6 $ 56.5 $ 43.3

ROE 14.9 % 17.7 % 14.9 %

(a) Includes equity of noncontrolling interests where the corresponding earnings (loss) are included in Net income attributable to stockholders.

Overview Our vision for the future is a world with zero crashes, zero emissions and zero congestion.

We will adapt to customer preferences while executing our growth-focused strategy to invest in EVs, hybrids, AVs, software-enabled services and other new business opportunities.

To support strong margins and cash flow during this transition, we are strengthening our market position in profitable ICE vehicles, such as trucks and SUVs.

We plan to execute our strategy with a steadfast commitment to good corporate citizenship through more sustainable operations and a leading health and safety culture.

Our financial performance in 2023 was driven by the success of high-margin products like full-size pick-ups and SUVs, despite several headwinds, including higher interest rates and inflationary pressures, supply chain and logistics challenges, and work stoppages associated with recent labor negotiations.

This performance was due to the strength of our vehicle portfolio, strong consumer demand and execution of our core business strategy, focused on fixed cost reduction and pricing discipline.

In January 2023, we announced our intention to implement a cost reduction program to reduce automotive fixed costs by $2.0 billion on an annual run rate basis by the end of 2024.

This goal includes the impact of higher expected depreciation and amortization expense and inflationary cost increases on fixed cost but excludes changes in our pension income.

In March 2023,

GENERAL MOTORS COMPANY AND SUBSIDIARIES

The following table summarizes the calculation of ROIC-adjusted (dollars in billions):

Years Ended December 31,

2022 2021 2020

EBIT-adjusted(a) $ 14.5 $ 14.3 $ 9.7

Average equity(b) $ 66.6 $ 56.5 $ 43.3

Average automotive debt and interest liabilities (excluding finance leases) 17.6 17.1 27.8

Average automotive net pension & OPEB liability 9.4 15.8 17.6

Average automotive net income tax asset (21.2) (22.2) (24.0)

ROIC-adjusted average net assets $ 72.3 $ 67.2 $ 64.7

ROIC-adjusted 20.0 % 21.3 % 15.0 %

(a) Refer to the reconciliation of Net income attributable to stockholders under U.S.

GAAP to EBIT-adjusted within this section of the MD&A.

(b) Includes equity of noncontrolling interests where the corresponding earnings (loss) are included in EBIT-adjusted.

Overview Our vision for the future is a world with zero crashes, zero emissions and zero congestion, which guides our growth-focused strategy to invest in EVs and AVs, software-enabled services and subscriptions and new business opportunities, while strengthening our market position in profitable ICE vehicles, such as trucks and SUVs.

We will execute our strategy with a diverse team and a steadfast commitment to good citizenship through sustainable operations and a leading health and safety culture.

The automotive industry and GM continue to experience supply chain and logistics disruptions from multiple suppliers that have impacted, and may continue to impact, our planned production schedules.

Despite these challenges, in the second half of 2022, we experienced improved parts availability that enabled us to increase production and improve dealer inventory levels for certain vehicles.

In addition, we faced significant inflationary pressure in 2022 that resulted in approximately $5.5 billion in higher commodity and logistics costs.

These increases were more than offset by strong product pricing.

While we anticipate incentives to increase from the low levels in 2022, we expect product pricing to remain strong in 2023, particularly for our full-size SUVs, full-size trucks and expected new launches.

We also expect commodity and logistics cost to improve, but be partially offset by costs we expect to incur as we strategically localize our battery raw materials supply chain in North America.

Refer to the Consolidated Results and regional analysis sections of this MD&A for additional information.

In 2022, the Board of Governors of the Federal Reserve System raised interest rates to lower the rate of inflation.

The higher interest rate environment did not have a material impact on our 2022 financial results, but we expect it will have an approximately $1.0 billion unfavorable impact on our results of operations in 2023, as a result of lower forecasted pension income.

Refer to the Critical Accounting Estimates section of this MD&A for additional information including our interest rate sensitivity analysis.

We expect higher interest rates to have an immaterial impact on our Automotive interest expense in 2023, as substantially all of our debt instruments are fixed rate.

For a discussion of the net interest income sensitivity of GM Financial, see Item 7A.

Quantitative and Qualitative Disclosures About Market Risk.

Furthermore, holding other factors constant, the higher interest rate environment may decrease the affordability of our vehicles for customers who rely on financing to purchase a vehicle.

We also face continuing market, operating and regulatory challenges in several countries across the globe due to, among other factors, competitive pressures, our product portfolio offerings, heightened emission standards, potentially weakening economic conditions, labor disruptions, foreign exchange volatility, evolving trade policy and political uncertainty.

we announced performance-based exits and a voluntary separation program (VSP) in an effort to accelerate attrition, which we believe will result in approximately $1.0 billion towards this target on an annual run rate basis.

In addition to people costs, we are reducing our marketing and advertising expenses, streamlining our engineering expense by reducing complexity across the vehicle portfolio, adjusting the cadence of our EV launches due to customer demand, reducing launch-related expenses in the near-term, reprioritizing growth initiatives and reducing our overall overhead and discretionary costs.

As we continue to assess our performance and the needs of our evolving business, additional restructuring and rationalization actions could be required.

These actions could give rise to future asset impairments or other charges, which may have a material impact on our operating results.

Refer to the Consolidated Results and regional sections of this MD&A for additional information.

Our collective bargaining agreement with the UAW, which was ratified in October 2019, expired on September 14, 2023.

On September 15, 2023, the UAW initiated a strike at certain of our U.S.

facilities and intermittently expanded the strike to additional facilities, causing stoppages to some vehicle production and parts distribution activities across our U.S.

We estimate that the lost vehicle production volumes and parts sales due to the UAW strike had an unfavorable impact of approximately $0.8 billion on Net income attributable to stockholders and $1.1 billion on our GMNA EBIT-adjusted in the year ended December 31, 2023.

On November 16, 2023, the UAW ratified a new collective bargaining agreement (the Labor Agreement).

The Labor Agreement, which continues through April 30, 2028, covers the wages, hours, benefits and other terms and conditions of employment for our UAW-represented employees.

The key terms and provisions of the Labor Agreement are:

• General wage increases of 11% upon ratification in 2023, 3% in September each of 2024, 2025 and 2026, and 5% in September 2027;

• Consolidation of applicable wage classifications for in-progression, temporary and other employees – with employees reaching the top classification rate upon the completion of 156 weeks of active service;

• The re-establishment of a cost-of-living allowance;

• Lump sum ratification bonus payments of $5,000 paid to eligible employees in the three months ended December 31, 2023;

• For members currently employed and enrolled in the Employees’ Pension Plan, an increase of $5.00 to the monthly basic benefit for past and future service provided;

• A 3.6% increase in company contributions to eligible employees' defined contribution retirement accounts;

• Annual contribution of $500 to eligible retirees or surviving spouses.

Beginning in 2024 and through the end of the term of the Labor Agreement, GM will offer three separate cash severance incentive programs to UAW-represented employees that meet the normal or early retirement eligibility requirements.

On August 16, 2022, the IRA was enacted.

The IRA modified climate and clean energy tax provisions and added new corporate tax credits for commercial EV purchases and investments in clean energy production, supply chains and manufacturing facilities.

IRA benefits, including credits and lower material costs, are expected to materially affect net income in the future.

We will continue to evaluate the IRA impacts on our financial results as additional regulatory guidance is issued.

We face continuing market, operating and regulatory challenges in several countries across the globe due to, among other factors, competitive pressures, our product portfolio offerings, heightened emission standards, labor disruptions, foreign exchange volatility, evolving trade policy and political uncertainty.

Refer to Part I, Item 1A.

Risk Factors for a discussion of these challenges.

We also continue to monitor the impact of the COVID-19 pandemic, and government actions and measures taken to prevent its spread, and the potential to affect our operations.

Refer to Part I, Item 1A.

Risk Factors for further discussion of these risks.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

A s we continue to assess our performance and the needs of our evolving business, additional restructuring and rationalization acti ons could be required.

These actions could give rise to future asset impairments or other charges, which may have a material impact on our operating results.

On August 16, 2022, the Inflation Reduction Act of 2022 (the “Act”) was signed into law.

The Act implements a new 15% corporate minimum tax based on modified U.S.

financial statement net income that is effective beginning in 2023.

The new corporate minimum tax is not expected to have a significant impact on our net earnings or cash flow in 2023.

The Act also modified climate and clean energy corporate tax provisions, including the consumer credit for EV purchases, and beginning in 2023, new tax credits for commercial EV purchases and investments in clean energy production, supply chains and manufacturing facilities became effective.

We expect to generate commercial EV tax credits and credits from our production of battery components that will increase net income and impact income tax cash payments.

While waiting on pending Department of Treasury regulatory guidance, we are continuing to evaluate the ultimate impact of the tax credits on our financial results, including our net earnings and cash flow.

For the year ending December 31, 2024, we expect EPS-diluted and EPS-diluted-adjusted of between $8.50 and $9.50, Net income attributable to stockholders of between $9.8 billion and $11.2 billion and EBIT-adjusted of between $12.0 billion and $14.0 billion.

We do not consider the potential impact of future adjustments on our expected financial results.

These expected financial results do not include the potential impact of future adjustments related to special items.

Refer to the "Non-GAAP Measures" section of this MD&A for additional information.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

The following table reconciles expected Net income attributable to stockholders under U.S.

GAAP to expected EBIT-adjusted (dollars in billions):

generally accepted accounting principles (GAAP) to expected EBIT-adjusted (dollars in billions):

Year Ending December 31, 2024

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(a) We do not consider the potential future impact of adjustments on our expected financial results.

GMNA Industry sales in North America were 17.3 million units in the year ended December 31, 2022, representing a decrease of 6.6% compared to the corresponding period in 2021.

industry sales were 14.2 million units in the year ended December 31, 2022, representing a decrease of 7.9% compared to the corresponding period in 2021.

The COVID-19 pandemic originally resulted in a contraction of total North America industry volumes in 2020 that continued through 2022.

Dealer inventory remains constrained for several critical vehicles, including our full-size SUVs.

GMNA Industry sales in North America were 19.6 million units in the year ended December 31, 2023, representing an increase of 13.1% compared to the corresponding period in 2022.

industry sales were 16.0 million units in the year ended December 31, 2023, representing an increase of 12.2% compared to the corresponding period in 2022.

Our total vehicle sales in the U.S., our largest market in North America, were 2.6 million units for a market share of 16.2% in the year ended December 31, 2023, representing an increase of 0.3 percentage points compared to the corresponding period in 2022.

We expect to sustain relatively strong EBIT-adjusted margins in 2023 on the continued strength of vehicle pricing and healthy U.S.

industry light vehicle demand, partially offset by elevated costs associated with commodities, raw materials and logistics.

Our outlook is dependent on the pricing environment, continuing improvement of supply chain availability and overall economic conditions.

As a result of supply chain disruptions in 2022, we experienced interruptions to our planned production schedules and prioritized production of our most popular and in-demand products, including our full-size trucks, full-size SUVs and EVs.

In 2023, our collective bargaining agreements with the UAW in the United States and Unifor in Canada, as well as collective bargaining agreements in Mexico, will expire, which will require negotiation of new agreements.

Refer to Part I, Item 1A.

Risk Factors for a discussion of the risks related to any significant disruption at one of our manufacturing facilities.

GMI Industry sales in China were 23.5 million units in the year ended December 31, 2022, representing a decrease of 9.2% compared to the corresponding period in 2021.

We expect to sustain relatively strong EBIT-adjusted margins in 2024 on the continued strength of our product portfolio, improved EV margins and ongoing fixed cost reduction efforts, partially offset by pricing moderation with increased incentives.

While we expect EV margins to improve in 2024, it is possible that we will continue to recognize losses to adjust inventory to net realizable value.

Our outlook is dependent on the resiliency of the U.S.

economy, continuing improvement of supply chain availability, EV-related cost reduction and overall economic conditions.

GMI Industry sales in China were 25.0 million units in the year ended December 31, 2023, representing an increase of 6.3% compared to the corresponding period in 2022.

Our total vehicle sales in China were 2.1 million units resulting in a market share of 8.4% in the year ended December 31, 2023, representing a decrease of 1.4 percentage points compared to the corresponding period in 2022.

The ongoing supply chain disruptions, macro-economic impact of COVID-19 and geopolitical tensions continue to place pressure on China's automotive industry and our vehicle sales in China.

Our Automotive China JVs

GENERAL MOTORS COMPANY AND SUBSIDIARIES

generated equity income of $0.7 billion in the year ended December 31, 2022.

Although price competition, higher costs associated with commodities and raw materials, and a more challenging regulatory environment related to emissions, fuel consumption and NEV requirements will place pressure on our operations in China, we will continue to build upon our strong brands, network, and partnerships in China as well as drive improvements in vehicle mix and cost.

The ongoing supply chain disruptions, global macro-economic conditions and geopolitical tensions continue to place pressure on China's automotive industry and our vehicle sales in China.

Our Automotive China JVs generated equity income of $0.4 billion in the year ended December 31, 2023.

Price competition, growing customer acceptance of domestic brands and demand for NEVs, and a more challenging regulatory environment related to emissions, fuel consumption and NEVs have and will continue to place pressure on our operations in China.

Outside of China, industry sales were 25.7 million units in the year ended December 31, 2023, representing an increase of 7.3% compared to the corresponding period in 2022.

Our total vehicle sales outside of China were 1.0 million units for a market share of 4.0% in the year ended December 31, 2022, representing an increase of 0.4 percentage points compared to the corresponding period in 2021.

We historically operated a small import business in Russia and sold GM-badged vehicles into Russia through GM’s alliance partner in Uzbekistan.

GM’s direct and indirect profitability in Russia was insignificant.

With Russia’s invasion of Ukraine, western sanctions on Russia have and may continue to progressively increase.

In addition, reputational, legal and other concerns impacted our ability to continue to operate in Russia.

In February 2022, we suspended our exports into Russia and instructed our Russian sales company to cease selling vehicles within Russia.

In April 2022, we took additional actions to extend the suspension of our Russian business, including the cessation of commercial operations.

In November 2022, we shut down our Russia business and recorded a $0.7 billion charge to write off our net investment and release accumulated translation losses into earnings.

The predominately non-cash charge associated with our exit is considered special for EBIT-adjusted, adjusted automotive free cash flow and EPS-diluted-adjusted purposes.

Currently, we do not believe any loss contingencies arising from our exit are probable and we are unable to estimate any reasonably possible losses that may result from claims that may be asserted against us by third parties, including retail customers or government authorities in Russia.

We continue to monitor the situation and its macroeconomic impacts on our financial position and results of operations.

Although we have limited supply chain exposure to Russia and Ukraine, we are working closely with our supply base to mitigate any potential risks.

Cruise Gated by safety and regulation, Cruise continues to make significant progress towards commercialization of a network of on-demand AVs in the United States and globally.

In 2021, Cruise received a driverless test permit from the California Public Utilities Commission (CPUC) to provide unpaid rides to the public in driverless vehicles and received approval of its Autonomous Vehicle Deployment Permit from the California Department of Motor Vehicles to commercially deploy driverless AVs.

In June 2022, Cruise received the first ever Driverless Deployment Permit granted by the CPUC, which allows them to charge a fare for the driverless rides they are providing to members of the public in certain parts of San Francisco.

Additionally, in September 2022, Cruise acquired regulatory permits to operate driverless ride hail services in Phoenix, Arizona and began pursuing ride hail operations in Austin, Texas.

GM and Cruise are also awaiting a decision on an exemption petition that was filed with NHTSA seeking regulatory approval for the deployment of the Cruise Origin.

Refer to the "Liquidity and Capital Resources" section of this MD&A for information about GM's additional investment in Cruise.

Our total vehicle sales outside of China were 1.0 million units for a market share of 4.0% in the year ended December 31, 2023, which is comparable to the corresponding period in 2022.

Cruise Cruise Holdings, our majority-owned subsidiary, is pursuing the development and commercialization of AV technology.

In October 2023, a hit-and-run accident involving a pedestrian and a third-party vehicle occurred, which resulted in the pedestrian being thrown into the path of a Cruise AV.

During the resulting investigation, regulators perceived that Cruise representatives were not explicit about a secondary movement of the Cruise AV and, as a result, the California DMV suspended Cruise's permits to operate AVs in California without a safety driver.

Shortly thereafter, Cruise voluntarily paused all of its driverless, supervised and manual AV operations in the U.S.

while it examines its processes, systems and tools.

This orderly pause is designed to rebuild public trust while Cruise undertakes a comprehensive safety review.

In addition, certain federal and state agencies, including the California DMV, the California Public Utilities Commission, NHTSA, the U.S.

Department of Justice and the SEC, have opened investigations or made inquiries in connection with the incident.

We and Cruise are investigating these matters internally and intend to cooperate with all government regulators and agencies in connection with these matters.

At this time, we are not able to predict when Cruise will resume driverless testing or commercial AV operations.

Refer to Part I, Item 1A.

Risk Factors for a further discussion of the risks associated with our AV strategy.

In connection with the pause in operations and Cruise's refocused operational strategy, we recorded restructuring charges of $0.5 billion in the three months ended December 31, 2023, and also expect reductions of approximately $1.0 billion in Cruise expenses in 2024.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

Automotive Financing - GM Financial Summary and Outlook We believe that offering a comprehensive suite of financing products will generate incremental sales of our vehicles, drive incremental GM Financial earnings and help support our sales throughout various economic cycles.

GM Financial's penetration of our retail sales in the U.S.

was 42% in the year ended December 31, 2023 and 43% in the corresponding period in 2022.

Penetration levels vary depending on incentive financing programs available and competing third-party financing products in the market.

GM Financial's prime loan originations as a percentage of total loan originations in North America was 82% in the year ended December 31, 2023 and 80% in the corresponding period in 2022.

In the year ended December 31, 2023, GM Financial's revenue consisted of leased vehicle income of 51%, retail finance charge income of 37% and commercial finance charge income of 7%.

GM Financial's leasing program is exposed to residual values, which are heavily dependent on used vehicle prices.

Used vehicle prices were generally higher than contractual residual values in 2022, primarily due to low new vehicle inventory.

In 2023, we expect used vehicle prices to continue moderating through the year as market prices on used vehicles fall below contractual residual values.

The increase in used vehicle prices resulted in gains on terminations of leased vehicles of $1.2 billion in GM Financial interest, operating and other expenses for the year ended December 31, 2022, and $2.0 billion in the corresponding period in 2021.

Gains on terminations of leased vehicles of $0.9 billion and $1.2 billion were included in GM Financial interest, operating and other expenses in the years ended December 31, 2023 and 2022.

The decrease in gains is primarily due to higher leased portfolio net book values at termination and fewer terminated leases in 2023 compared to 2022.

The following table summarizes the estimated residual value based on GM Financial's most recent estimates and the number of units included in GM Financial Equipment on operating leases, net by vehicle type (units in thousands):

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Total $ 22,661 960 100.0 % $ 24,727 1,092 100.0 %

GENERAL MOTORS COMPANY AND SUBSIDIARIES

GM Financial's penetration of our retail sales in the U.S.

was 43% in the year ended December 31, 2022 and 44% in the corresponding period in 2021.

Penetration levels vary depending on incentive financing programs available and competing third-party financing products in the market.

GM Financial's prime loan originations as a percentage of total loan originations in North America was 80% in the year ended December 31, 2022 and 73% in the corresponding period in 2021.

In the year ended December 31, 2022, GM Financial's revenue consisted of leased vehicle income of 61%, retail finance charge income of 32% and commercial finance charge income of 3%.

Consolidated Results We review changes in our results of operations under five categories:

21 unchanged sentences

Total net sales and revenue $ 171,842 $ 156,735 $ 15,108 9.6 % $ 7.8 $ 1.2 $ 4.3 $ 1.8

Refer to the regional sections of this MD&A for additional information on volume, mix and price.

Refer to the regional sections of this MD&A for additional information on Volume, Mix, Price and Other.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

Automotive and Other Cost of Sales

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GMI 14,164 14,166 2 — % $ 0.5 $ (0.3) $ (0.3) $ 0.1

Corporate 500 200 (300) n.m.

$ — $ (0.3) $ —

Cruise 2,576 1,124 (1,452) n.m.

Corporate 513 500 (13) (2.6) % $ — $ (0.1) $ 0.1

Cruise 3,088 2,576 (512) (19.9) % $ — $ (0.5)

Eliminations (12) (2) 10 n.m.

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Variable profit is a key indicator of product profitability.

Variable profit is defined as

GENERAL MOTORS COMPANY AND SUBSIDIARIES

revenue less material cost, freight, the variable component of manufacturing expense and warranty and recall-related costs.

Variable profit is defined as revenue less material cost, freight, the variable component of manufacturing expense and warranty and recall-related costs.

Vehicles with higher selling prices generally have higher variable profit.

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In the year ended December 31, 2023, increased Cost was primarily due to:

(1) increased material and freight costs of $5.5 billion;

(2) increased costs of $1.1 billion primarily related to parts and accessories;

(1) increased campaigns and other warranty-related costs of $2.1 billion;

(2) increased EV-related charges of $2.0 billion, primarily due to $1.7 billion in inventory adjustments to reflect the net realizable value at period end;

(3) increased manufacturing costs of $0.9 billion;

(4) increased engineering costs of $1.0 billion primarily related to accelerating our EV portfolio and an increase in development costs as Cruise progresses towards the commercialization of a network of on-demand AVs in the United States and globally;

and (5) increased costs of $0.8 billion related to modification of Cruise stock incentive awards;

partially offset by (6) decreased campaigns and other warranty-related costs of $0.4 billion;

and (7) a decrease of $0.4 billion related to the resolution of substantially all patent royalty matters accrued with respect to past-year vehicle sales.

In the year ended December 31, 2022, favorable Other was due to the weakening of the Korean Won and other currencies against the U.S.

Dollar, partially offset by the strengthening of the Brazilian Real and other currencies against the U.S.

(4) charges of $0.7 billion related to the VSP;

(5) increased engineering costs of $0.5 billion, driven primarily by $0.8 billion increase in AV engineering costs;

partially offset by $0.4 billion decrease in Automotive engineering cost (6) charges of $0.5 billion related to Cruise restructuring;

and (7) increased material and freight costs of $0.3 billion;

partially offset by (8) decrease of $0.8 billion due to absence of the charge for the modification of Cruise stock incentive awards in 2022.

In the year ended December 31, 2023, favorable Other was due to the weakening of the Canadian dollar and other currencies against the U.S.

dollar, partially offset by the strengthening of the Mexican peso and other currencies against the U.S.

Automotive and Other Selling, General and Administrative Expense

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Automotive and other selling, general and administrative expense $ 9,840 $ 10,667 $ 8,554 $ 827 7.8 %

In the year ended December 31, 2022, Automotive and other selling, general and administrative expense increased primarily due to:

(1) increased advertising, selling, and administrative costs of $1.3 billion;

(2) charges of $0.5 billion for strategic activities related to Buick dealerships;

and (3) increased costs of $0.3 billion related to modification of Cruise stock incentive awards.

In the year ended December 31, 2023, Automotive and other selling, general and administrative expense decreased primarily due to:

(1) decreased advertising, selling, and administrative costs of $0.7 billion;

and (2) decrease of $0.3 billion due to the absence of the charge for the modification of Cruise stock incentive awards in 2022;

partially offset by (3) charges of $0.2 billion related to the VSP.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

Interest Income and Other Non-operating Income, net

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Interest income and other non-operating income, net $ 1,537 $ 1,432 $ 3,041 $ 105 7.3 %

In the year ended December 31, 2022, Interest income and other non-operating income, net decreased primarily due to:

(1) $0.4 billion in losses in 2022 compared to $0.3 billion in gains in 2021 related to Stellantis N.V.

In the year ended December 31, 2023, Interest income and other non-operating income, net increased primarily due to:

(1) the absence of $0.7 billion loss related to the shutdown of our Russia business;

(2) $0.6 billion increase in interest income;

and (3) the absence of $0.4 billion in losses related to Stellantis N.V.

(Stellantis) warrants;

and (2) $0.7 billion related to the shutdown of our Russia business.

partially offset by (4) $1.3 billion decrease in non-service pension income primarily due to higher interest cost and lower expected return on assets (ROA);

and (5) the absence of $0.3 billion in gains related to revaluation of investments.

Income Tax Expense

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Income tax expense $ 563 $ 1,888 $ 2,771 $ 1,325 70.2 %

In the year ended December 31, 2022, Income tax expense decreased primarily due to Cruise valuation allowance adjustments, lower effective tax rate as a result of Cruise reconsolidation and lower pre-tax income.

The decrease was partially offset by absence of tax benefit related to a deduction for an investment in a subsidiary, which occurred in the year ended December 31, 2021.

In the year ended December 31, 2023, Income tax expense decreased primarily due to jurisdictional mix of earnings, valuation allowance adjustments and lower pre-tax income.

For the year ended December 31, 2023 our ETR-adjusted was 15.7%.

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Refer to Note 17 to our consolidated financial statements for additional information related to Income tax expense.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

GM North America

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GMNA Total Net Sales and Revenue In the year ended December 31, 2023, Total net sales and revenue increased primarily due to:

(1) increased net wholesale volumes primarily due to increased sales of crossover vehicles, passenger cars, full-size pickup trucks, vans, mid-size pickup trucks and full-size SUVs due to improved parts availability that allowed us to increase production in 2022;

(1) increased net wholesale volumes primarily due to increased sales of crossover vehicles and full-size pickup trucks, partially offset by decreased sales of mid-size pickup trucks;

(2) favorable Price as a result of low dealer inventory levels and strong demand for our products;

and (3) favorable Other due to increased sales of parts and accessories, partially offset by the foreign currency effect resulting from the weakening of the Canadian Dollar against the U.S.

partially offset by (4) unfavorable mix associated with increased sales of crossover vehicles, passenger cars, vans and mid-size pickup trucks, partially offset by increased sales of full-size pickup trucks and full-size SUVs.

(3) favorable Mix associated with increased sales of full-size pickup trucks and full-size SUVs and decreased sales of vans, passenger cars and mid-size pickup trucks, partially offset by increased sales of crossover vehicles;

and (4) favorable Other due to increased sales of parts and accessories.

GMNA EBIT-Adjusted The most significant factors that influence profitability are industry volume and market share.

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Trucks, crossovers and cars sold currently have a variable profit of approximately 170%, 40% and 50% of our GMNA portfolio on a weighted-average basis.

In the year ended December 31, 2022, EBIT-adjusted increased primarily due to:

(1) favorable volume;

and (2) favorable price;

partially offset by (3) increased Cost primarily due to increased material and freight cost of $4.7 billion, increased selling, general and administrative costs of $1.2 billion, increased manufacturing cost of $0.8 billion and increased engineering cost of $0.4 billion including accelerating our EV portfolio, partially offset by a decrease in campaigns and other warranty-related costs of $0.4 billion;

and (4) unfavorable mix.

In the year ended December 31, 2023, EBIT-adjusted decreased primarily due to:

(1) increased Cost primarily due to increased campaigns and other warranty-related costs of $2.0 billion, increased EV-related charges of $1.9 billion primarily due to $1.6 billion in inventory adjustments to reflect the net realizable value at period end, decreased non-service pension income of $1.1 billion and increased manufacturing costs of $0.9 billion, partially offset by decreased advertising, selling and administrative costs of $1.1 billion;

and (2) unfavorable Mix associated with increased sales of crossover vehicles partially

GENERAL MOTORS COMPANY AND SUBSIDIARIES

offset by decreased sales of mid-size pickup trucks and passengers cars and increased sales of full-size SUVs;

partially offset by (3) favorable Price;

and (4) favorable Volume.

GM International

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$ 446 $ 677 $ (231) (34.1) %

EBIT (loss)-adjusted — excluding Equity income $ 466 $ (271) $ 737 n.m.

EBIT-adjusted — excluding Equity income $ 764 $ 466 $ 298 63.9 %

(Vehicles in thousands)

Wholesale vehicle sales 621 653 (32) (4.9) %

= not meaningful

The vehicle sales of our Automotive China JVs are not recorded in Total net sales and revenue.

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GMI Total Net Sales and Revenue In the year ended December 31, 2023, Total net sales and revenue increased primarily due to:

(1) increased net wholesale volumes due to improved parts availability that allowed us to increase production in 2022;

(2) favorable pricing across multiple vehicle lines in South America and the Middle East;

and (3) favorable mix in the Middle East and Asia/Pacific, partially offset by unfavorable mix in South America;

partially offset by (4) unfavorable Other primarily due to the foreign currency effect resulting from the weakening of various currencies against the U.S.

(1) favorable pricing across multiple vehicle lines in Argentina, Brazil and the Middle East;

and (2) favorable Mix primarily in Asia/Pacific and the Middle East;

partially offset by (3) decreased net wholesale volumes in Egypt, Colombia and Chile primarily due to industry downturn, partially offset by increased volumes in Brazil due to a new vehicle launch;

and (4) unfavorable Other primarily due to the foreign currency effect resulting from the weakening of the Argentine peso against the U.S.

dollar, partially offset by increased components, parts and accessories sales.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

GMI EBIT-Adjusted In the year ended December 31, 2023, EBIT-adjusted increased primarily due to:

(1) favorable Price;

(2) increased net wholesale volumes;

and (2) favorable Mix;

partially offset by (4) unfavorable Cost primarily due to increased material and logistic costs;

and (5) unfavorable Other primarily due to foreign currency effect resulting from the weakening of various currencies against the U.S.

partially offset by (3) unfavorable Cost primarily due to increased material, logistic and warranty-related costs and other costs to support a new vehicle launch in South America, partially offset by favorable impact due to an asset sale in Korea;

(4) decreased net wholesale volumes;

and (5) unfavorable Other primarily due to foreign currency effect resulting from the weakening of Argentine peso against the U.S.

dollar and decreased equity income.

We view the Chinese market as important to our global growth strategy and are employing a multi-brand strategy.

In the coming years, we plan to leverage our global architectures to increase the number of product offerings under the Buick, Chevrolet and Cadillac brands in China and continue to grow our business under the local Baojun and Wuling brands while we are accelerating the development and rollout of EVs across our brands in China in response to our commitment to an all-electric future.

In the coming years, we plan to leverage our global architectures to introduce a number of new product offerings under the Buick, Chevrolet and Cadillac brands in China and continue to grow our business under the local Baojun and Wuling brands while we are accelerating the development and rollout of EVs across our brands in China as part of our commitment to an all-electric future.

We operate in the Chinese market through a number of joint ventures and maintaining strong relationships with our joint venture partners is an important part of our China growth strategy.

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Debt $ 202 $ 197

GENERAL MOTORS COMPANY AND SUBSIDIARIES

Years Ended December 31, 2023 vs.

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Total net sales and revenue(a) $ 102 $ 102 $ 106 $ — — %

EBIT (loss)-adjusted(b) $ (1,890) $ (1,196) $ (887) $ (694) (58.0) %

EBIT (loss)-adjusted $ (2,695) $ (1,890) $ (1,196) $ (805) (42.6) %

(a) Primarily reclassified to Interest income and other non-operating income, net in our consolidated income statements in each of the years ended December 31, 2023, 2022 and 2021.

(b) Excludes $1.1 billion in compensation expense in the year ended December 31, 2022 resulting from modification of the Cruise stock incentive awards.

Cruise EBIT (Loss)-Adjusted In the year ended December 31, 2022, EBIT (loss)-adjusted increased primarily due to an increase in development costs as we progress towards the commercialization of a network of on-demand rideshare and delivery AVs in the U.S.

Cruise EBIT (Loss)-Adjusted In the year ended December 31, 2023, EBIT (loss)-adjusted increased primarily due to an increase in development costs as we pursue the development and commercialization of AV technology in the U.S.

and globally.

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Total revenue $ 14,225 $ 12,766 $ 13,419 $ 1,459 11.4 %

Provision for loan losses $ 654 $ 248 $ 881 $ 406 n.m.

Provision for loan losses $ 826 $ 654 $ 248 $ 172 26.3 %

EBT-adjusted $ 2,985 $ 4,076 $ 5,036 $ (1,091) (26.8) %

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Effective rate of interest paid 4.7 % 3.1 % 2.7 % 1.6 %

= not meaningful

GM Financial Revenue In the year ended December 31, 2022, Total revenue decreased primarily due to decreased leased vehicle income of $1.2 billion primarily due to a decrease in the average balance of the leased vehicles portfolio;

partially offset

GENERAL MOTORS COMPANY AND SUBSIDIARIES

by increased finance charge income of $0.4 billion primarily due to growth in the retail finance receivables portfolio, partially offset by a decrease in the effective yield due to increased lending to borrowers with prime credit;

and an increase in the effective yield on commercial finance receivables as a result of higher benchmark rates, as well as an increase in the size of the portfolio.

GM Financial Revenue In the year ended December 31, 2023, Total revenue increased primarily due to:

(1) increased finance charge income of $1.7 billion primarily due to an increase in the effective yield resulting from higher benchmark interest rates and growth in the size of the portfolio;

(2) increased investment income of $0.3 billion primarily due to an increase in benchmark interest rates;

partially offset by (3) decreased leased vehicle income of $0.5 billion primarily due to a decrease in the average balance of the leased vehicles portfolio.

GM Financial EBT-Adjusted In the year ended December 31, 2023, EBT-adjusted decreased primarily due to:

(1) decreased leased vehicle income net of leased vehicle expenses of $0.7 billion primarily due to decreased depreciation on leased vehicles resulting from increased residual value estimates and a decrease in the size of the portfolio, decreased lease vehicle income primarily due to a decrease in the average balance of the leased vehicles portfolio, and decreased lease termination gains;

(2) increased provision for loan losses of $0.4 billion primarily due to increased loan origination volume in 2022, and the reduction in reserve levels recorded in 2021 as a result of actual credit performance that was better than forecast and favorable expectations for future charge-offs and recoveries, as well as an economic forecast weighted more heavily to a weaker outlook as of December 31, 2022;

and (3) increased interest expense of $0.3 billion primarily due to an increased effective rate of interest on our debt;

partially offset by (4) increased finance charge income of $0.4 billion primarily due to growth in the retail finance receivables portfolio, partially offset by a decrease in the effective yield due to increased lending to borrowers with prime credit;

and an increase in the effective yield on commercial finance receivables as a result of higher benchmark rates, as well as an increase in the size of the portfolio.

Liquidity and Capital Resources We believe our current levels of cash, cash equivalents, marketable debt securities, available borrowing capacity under our revolving credit facilities and other liquidity actions currently available to us are sufficient to meet our liquidity requirements.

(1) increased interest expense of $1.8 billion primarily due to an increased effective rate of interest on debt, resulting from higher benchmark interest rates, as well as an increase in average debt outstanding;

(2) decreased leased vehicle income net of leased vehicle expenses of $0.9 billion primarily due to a decrease in the average balance of the leased vehicles portfolio and decreased lease termination gains due to higher leased portfolio net book values at termination and fewer terminated leases;

(3) increased provision for loan losses of $0.2 billion due to lower recovery rates in 2023, as well as moderating credit performance;

partially offset by (4) increased finance charge income of $1.7 billion primarily due to an increase in the effective yield resulting from higher benchmark interest rates and growth in the size of the portfolio;

and (5) increased investment income of $0.3 billion primarily due to an increase in benchmark interest rates.

Liquidity and Capital Resources We believe our current levels of cash, cash equivalents, marketable debt securities, available borrowing capacity under our credit facilities and other liquidity actions currently available to us are sufficient to meet our liquidity requirements in the short- and long-term.

We also maintain access to the capital markets and may issue debt or equity securities, which may provide an additional source of liquidity.

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Our known current material uses of cash include, among other possible demands:

(1) capital spending and our investments in our battery cell manufacturing joint ventures of approximately $11.0 billion to $13.0 billion per year through 2025;

(2) payments for engineering and product development activities;

(1) capital spending and our investments in our battery cell manufacturing joint ventures of approximately $10.5 billion to $11.5 billion in 2024;

(2) payments for engineering and product development activities , including investing in the development and commercialization of AV technology by Cruise;

(3) payments associated with previously announced vehicle recalls and any other recall-related contingencies;

(4) payments to service debt and other long-term obligations, including discretionary and mandatory contributions to our pension plans;

(5) payments associated with the liquidity program for holders of equity-based incentive awards issued to employees of Cruise;

(5) dividend payments on our common stock that are declared by our Board of Directors;

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Refer to Note 7, Note 13 and Note 15 to our consolidated financial statements for additional funding requirements for our operating leases, debt and pension plans.

Our material future uses of cash, which may vary from time to time based on market conditions and other factors, are focused on the three objectives of our capital allocation program:

Our material future uses of cash, which may vary from time to time based on market conditions and other factors, are

GENERAL MOTORS COMPANY AND SUBSIDIARIES

focused on the three objectives of our capital allocation program:

(1) grow our business at an average target ROIC-adjusted rate of 20% or greater;

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Risk Factors, some of which are outside of our control.

In August 2022, our Board of Directors increased the capacity under our previously announced common stock repurchase program to $5.0 billion from the $3.3 billion that remained under the program as of June 30, 2022.

During the year ended December 31, 2022, we completed $2.5 billion of repurchases under the program and retired approximately 64 million shares of our common stock.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

In September 2022, we reinstated a quarterly dividend of $0.09 per share of our common stock.

In November 2023, our Board of Directors increased the capacity under our previously announced common stock repurchase program by $10.0 billion to $11.4 billion and approved a $10.0 billion ASR program.

On December 1, 2023, we advanced $10.0 billion under the ASR program and received approximately 215 million shares of common stock with a value of $6.8 billion, which were immediately retired.

The final settlement of the transactions contemplated under the ASR Agreements is expected to occur no later than the three months ending December 31, 2024.

Also, during the year ended December 31, 2023, we completed $1.1 billion of open market repurchases under the program and retired approximately 30 million shares of our common stock.

We have $1.4 billion in capacity remaining under our common stock repurchase program as of December 31, 2023, with no expiration date.

During the year ended December 31, 2023, we paid dividends of $0.5 billion to holders of our common stock.

In November 2022, Ultium Cells LLC, a wholly owned subsidiary of Ultium Cells Holding LLC, entered into a loan agreement with the U.S.

Department of Energy (DOE) through the Advanced Technology Vehicles Manufacturing program, pursuant to which Ultium Cells LLC may borrow up to $2.5 billion.

The proceeds of the loans will be used to finance the construction of new battery cell manufacturing facilities in the U.S.

Under the terms of the loan agreement, the DOE will not have recourse on the principal and interest of the loan against General Motors Company or any of its consolidated subsidiaries.

In December 2022, we early redeemed our $1.0 billion 5.40% senior unsecured notes with a maturity date of October 2023 and recorded an insignificant loss.

Additionally, during 2022, we paid, prior to maturity, $0.5 billion of unsecured term loans in GMI.

In January 2023, we gave notice to early redeem our $1.5 billion 4.875% senior unsecured notes with a maturity date of October 2023.

The settlement of the early redemption of these senior unsecured notes is expected to occur during the first quarter of 2023 and is expected to have an immaterial impact on our 2023 results.

We anticipate that we will continue to declare and pay dividends on our common stock quarterly.

Cash flows that occur amongst our Automotive, Cruise and GM Financial operations are eliminated when we consolidate our cash flows.

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The majority of our current investments in debt securities are with A/A2 or better rated issuers.

In March 2023, we redeemed our $1.5 billion, 4.875% senior unsecured notes with a maturity date of October 2023 and recorded an insignificant loss.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

Also, in March 2023, we renewed and reduced the total borrowing capacity of our five-year, $11.2 billion facility to $10.0 billion, which now matures March 31, 2028.

We also renewed and reduced the total borrowing capacity of our three-year, $4.3 billion facility to $4.1 billion, which now matures March 31, 2026, and renewed our 364-day, $2.0 billion revolving credit facility allocated for the exclusive use of GM Financial, which now matures March 30, 2024.

In October 2023, we entered into a new 364-day unsecured revolving credit facility with a borrowing capacity of $6.0 billion, which we terminated on November 24, 2023.

In November 2023, the Company entered an unsecured 364-day delayed draw term loan credit agreement that permits the Company to borrow up to $3.0 billion in the form of four term loans during an availability period that ends June 28, 2024.

Amounts drawn and repaid may not be reborrowed and the final maturity date for any loans outstanding under the delayed draw credit agreement is November 27, 2024.

We use credit facilities as a mechanism to provide additional flexibility in managing our global liquidity.

Our Automotive borrowing capacity under credit facilities totaled $15.5 billion at December 31, 2022 and 2021, which consisted primarily of two credit facilities.

Our Automotive borrowing capacity under credit facilities totaled $17.1 billion at December 31, 2023, which consisted primarily of three credit facilities, and $15.5 billion at December 31, 2022, which consisted primarily of two credit facilities.

Total Automotive borrowing capacity under our credit facilities does not include our 364-day, $2.0 billion facility allocated for exclusive use of GM Financial.

We did not have any borrowings against our primary facilities, but had letters of credit outstanding under our sub-facility of $0.7 billion and $0.4 billion at December 31, 2023 and 2022.

In April 2022, we renewed our 364-day, $2.0 billion revolving credit facility allocated for the exclusive use of GM Financial, which now matures on April 4, 2023.

If available capacity permits, GM Financial continues to have access to our automotive credit facilities.

If available capacity permits, GM Financial continues to have access to our five-year, $10.0 billion and three-year, $4.1 billion credit facilities.

GM Financial did not have borrowings outstanding against any of these facilities at December 31, 2023 and 2022.

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Refer to Note 5 to our consolidated financial statements for additional information.

In August 2022, we issued $2.25 billion in aggregate principal amount of senior unsecured notes under our new Sustainable Finance Framework with a weighted average interest rate of 5.51% and maturity dates in 2029 and 2032.

We intend to allocate an amount equal to the net proceeds from these senior unsecured notes to finance or refinance, in whole or in part, new or existing green projects, assets or activities undertaken or owned by the Company that meet one or more eligibility criteria outlined in our Sustainable Finance Framework.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

Several of our loan facilities, including our revolving credit facilities, require compliance with certain financial and operational covenants as well as regular reporting to lenders.

Several of our loan facilities, including our credit facilities, require compliance with certain financial and operational covenants as well as regular reporting to lenders.

We have reviewed our covenants in effect as of December 31, 2023 and determined we are in compliance and expect to remain in compliance in the future.

In March 2022, under the Share Purchase Agreement, we acquired SoftBank's equity ownership stake in Cruise for $2.1 billion and, separately, we made an additional $1.35 billion investment in Cruise in place of SoftBank.

During the year ended December 31, 2022, we made additional investments in Cruise of $1.1 billion.

In September 2022, we exercised our 39.7 million warrants in Stellantis.

Upon exercise, the warrants converted into 69.1 million common shares of Stellantis, which we immediately sold back to Stellantis.

Total net pre-tax proceeds, including dividends received, in connection with this transaction were approximately $1.1 billion.

GM Financial's Board of Directors declared and paid dividends of $1.7 billion, $3.5 billion, and $0.8 billion on its common stock in 2022, 2021, and 2020.

GM Financial's Board of Directors declared and paid dividends of $1.8 billion, $1.7 billion and $3.5 billion on its common stock in the years ended December 31, 2023, 2022 and 2021.

Future dividends from GM Financial will depend on several factors including business and economic conditions, its financial condition, earnings, liquidity requirements and leverage ratio.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

The following table summarizes our Automotive available liquidity (dollars in billions):

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Capital expenditures (10.7)

ASR program (10.0)

Dividends paid and payments to purchase common stock (1.6)

GM investment in Cruise (2.4)

Purchase of SoftBank's equity stake in Cruise (2.1)

Issuance of senior unsecured notes 2.2

Net proceeds from sale of Stellantis common shares(a) 0.9

Payment of senior unsecured note (1.5)

Investment in Ultium Cells Holdings LLC (0.7)

Payment of GMI unsecured term debt (0.5)

GM investment in Cruise (0.5)

Investment in Lithium Americas (0.3)

Other non-operating (0.1)

Increase in available credit facilities 1.4

Total change in automotive available liquidity $ (3.2)

(a) Excludes dividends received and tax withholding.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

Automotive Cash Flow (Dollars in billions)

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Accrued and other liabilities and income taxes 4.1 3.1 0.9 1.0

Other 2.7 1.5 1.7 1.2

Net automotive cash provided by (used in) operating activities $ 19.1 $ 9.7 $ 7.5 $ 9.4

In the year ended December 31, 2022, the increase in Net automotive cash provided by operating activities was primarily due to:

(1) lower sales incentive payments of $4.7 billion;

and (2) working capital;

partially offset by (3) lower dividends received from GM Financial of $1.8 billion.

Other(a) 1.2 2.7 1.5 (1.5)

Net automotive cash provided by (used in) operating activities(b) $ 20.8 $ 19.1 $ 9.7 $ 1.7

(a) Includes $1.8 billion, $1.7 billion and $3.5 billion in dividends received from GM Financial in the years ended December 31, 2023, 2022 and 2021, partially offset by non-cash changes in other assets and liabilities.

(b) Includes $4.8 billion, $6.7 billion and $0.6 billion in the years ended December 31, 2023, 2022 and 2021 which are eliminated within the consolidated statements of cash flows.

Amounts eliminated primarily relate to purchases of, and collections on, wholesale finance receivables provided by GM Financial to our dealers and dividends issued by GM Financial to us.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

Years Ended December 31, 2023 vs.

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Capital expenditures $ (10.7) $ (9.0) $ (7.4) $ (1.7)

Acquisitions and liquidations of marketable securities, net(a) (3.9) 1.0 (3.6) (4.9)

Other(b) (4.5) (1.8) 0.1 (2.7)

Net automotive cash provided by (used in) investing activities $ (17.5) $ (8.2) $ (8.8) $ (9.3)

(a) Amount includes $0.6 billion of proceeds for the sale of our share in Lyft, Inc.

in the year ended December 31, 2020.

(b) Includes $2.4 billion and $1.0 billion for GM's investment in Cruise in the years ended December 31, 2022 and 2021, $2.1 billion related to the redemption of Cruise preferred shares from SoftBank in the year ended December 31, 2022, $0.9 billion related to the sale of Stellantis common shares, excluding dividends received and tax withholding, in the year ended December 31, 2022, and a $0.8 billion and $0.5 billion investment in Ultium Cells Holdings LLC in the years ended December 31, 2022 and 2021.

In the year ended December 31, 2022, cash used in acquisitions and liquidations of marketable securities, net increased due to acquisitions of securities and investments compared to liquidations of securities to fund operating activities and investments during the year ended December 31, 2021.

Acquisitions and liquidations of marketable securities, net 3.5 (3.9) 1.0 7.4

Other(a) (1.5) (4.5) (1.8) 3.0

Net automotive cash provided by (used in) investing activities(b) $ (8.7) $ (17.5) $ (8.2) $ 8.8

(a) Includes $0.7 billion, $0.8 billion and $0.5 billion of GM's investment in Ultium Cells Holdings LLC in the years ended December 31, 2023, 2022 and 2021, $0.5 billion, $2.4 billion and $1.0 billion of GM's investment in Cruise in the years ended December 31, 2023, 2022 and 2021, $0.3 billion of GM's investment in Lithium Americas in the year ended December 31, 2023, $2.1 billion for the purchase of Cruise preferred shares from SoftBank Vision Fund (AIV M2) L.P.

(SoftBank) in the year ended December 31, 2022 and $0.9 billion related to the sale of Stellantis common shares, excluding dividends received and tax withholding, in the year ended December 31, 2022.

(b) The investments in Cruise are eliminated within the consolidated statements of cash flows.

The redemption of Cruise preferred shares from SoftBank in 2022 are reclassified to financing activities within the consolidated statements of cash flows.

Years Ended December 31, 2023 vs.

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Net automotive cash provided by (used in) financing activities $ (13.6) $ (2.5) $ (0.9) $ (11.1)

(a) Includes $2.8 billion and $0.6 billion for dividends paid and payments to purchase common stock in the years ended December 31, 2022 and December 31, 2020, and $0.5 billion for repayments of senior unsecured notes for the years ended December 31, 2021 and 2020.

(a) Includes $10.0 billion in advances against accelerated share repurchases in the year ended December 31, 2023, $1.1 billion and $2.5 billion for payments to purchase common stock in the years ended December 31, 2023 and 2022, $0.5 billion and $0.3 billion for dividends paid in the years ended December 31, 2023 and 2022 and $0.5 billion for repayments of senior unsecured notes for the year ended December 31, 2021.

Adjusted Automotive Free Cash Flow We measure adjusted automotive free cash flow as automotive operating cash flow from operations less capital expenditures adjusted for management actions.

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GAAP was $19.1 billion, capital expenditures were $9.0 billion and adjustments for management actions were $0.4 billion.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

Refer to the "Non-GAAP Measures" section of this MD&A for additional information.

Status of Credit Ratings We receive ratings from four independent credit rating agencies:

DBRS Limited (DBRS), Fitch Ratings (Fitch), Moody's Investor Service (Moody's) and Standard & Poor's (S&P).

DBRS Limited (DBRS), Fitch Ratings (Fitch), Moody's Investor Service (Moody's) and S&P.

All four credit rating agencies currently rate our corporate credit at investment grade.

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DBRS BBB (high) BBB (high) N/A Stable

Fitch BBB- BBB- BBB- Positive

Fitch BBB BBB BBB Stable

Moody's Investment Grade Baa2 Baa2 Stable

S&P BBB BBB BBB Stable

Cruise Liquidity In January 2022, Cruise Holdings met the requirements for commercial deployment under its agreements with SoftBank, which triggered SoftBank's obligation to purchase additional Cruise convertible preferred shares for $1.35 billion.

In March 2022, GM made the additional $1.35 billion investment in Cruise in place of SoftBank following GM's acquisition of SoftBank's equity ownership stake in Cruise pursuant to the Share Purchase Agreement.

Additionally, in March 2022, GM and Cruise announced a liquidity program for holders of equity-based incentive awards issued to the employees of Cruise pursuant to C ruise's 2018 Employee Incentive Pl an, under which GM will purchase newly i ssued Cruise Class B Common Shares to fund the tax withholding on vested awards and GM will conduct tender offers for Cruise Class B Common Shares issued to settle vested awards.

During the year ended December 31, 2022, Cruise issued approximately $0.5 billion of Cruise Class B Common Shares, primarily to us, to fund the payment of statutory tax withholding obligations resulting from the settlement or exercise of vested awards.

Also, GM conducted quarterly tender offers, and paid approximately $0.6 billion in cash to settle tendered Cruise Class B Common Shares under the announced liquidity program during the year ended December 31, 2022.

Refer to Note 20 to our consolidated financial statements for additional information.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

Cruise Liquidity

The following table summarizes Cruise's available liquidity (dollars in billions):

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Cruise marketable securities — 1.4

Total Cruise available liquidity(a) $ 2.9 $ 3.1

(a) Excludes a multi-year credit agreement between Cruise and GM Financial whereby Cruise can request to borrow, over time, up to an additional aggregate of $4.5 billion, through 2024, to fund exclusively the purchase of AVs from GM.

Total Cruise available liquidity(a)(b) $ 1.3 $ 2.9

(a) Excludes a multi-year credit agreement with GM Financial whereby Cruise can borrow, over time, up to an additional aggregate of $3.4 billion, through 2024, to fund the purchase of AVs from GM and all accessories, attachments, parts and other equipment acquired in connection with or otherwise relating to any AV.

As of December 31, 2023, Cruise had total borrowings of $0.3 billion on previously expired lines under this agreement.

(b) Excludes a multi-year framework agreement with us whereby Cruise can defer invoices received through June 2028, up to $0.8 billion, related to engineering and capital spending incurred by us on behalf of Cruise.

As of December 31, 2023, Cruise deferred $0.5 billion under this agreement.

The following table summarizes the changes in Cruise's available liquidity (dollars in billions):

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GM investment in Cruise 0.5

Employee Incentive Plan (0.6)

Other non-operating (0.1)

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Net cash provided by (used in) operating activities $ (1.9) $ (1.8) $ (1.2) $ (0.1)

Net cash provided by (used in) investing activities $ — $ (0.7) $ (0.7) $ 0.7

Net cash provided by (used in) financing activities $ 1.8 $ 2.6 $ — $ (0.8)

Net cash provided by (used in) investing activities(a) $ 1.3 $ — $ (0.7) $ 1.4

Net cash provided by (used in) financing activities(b) $ 0.4 $ 1.8 $ 2.6 $ (1.4)

(a) Includes $1.4 billion of net proceeds from the liquidation of marketable securities in the year ended December 31, 2023.

(b) Includes $0.5 billion, $2.4 billion and $1.0 billion in the years ended December 31, 2023, 2022 and 2021 related to investments from GM which are eliminated within the consolidated statements of cash flows and $2.1 billion in the year ended December 31, 2022 related to the purchase of Softbank’s shares in Cruise by Automotive which is reclassified to financing activities within the consolidated statements of cash flows.

We expect the orderly pause of operations, associated restructuring actions, and Cruise’s refocused operational strategy will significantly reduce Cruise’s liquidity needs in 2024.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

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Total GM Financial available liquidity $ 29.9 $ 28.5

In the year ended December 31, 2022, GM Financial's available liquidity increased primarily due to increased available borrowing capacity on unpledged eligible assets, resulting from the issuance of securitization transactions and unsecured debt.

GM Financial structures liquidity to support at least six months of GM Financial's expected net cash flows, including new originations, without access to new debt financing transactions or other capital markets activity.

GM Financial has access to $15.5 billion of our revolving credit facilities with exclusive access to the 364-day, $2.0 billion facility.

At December 31, 2023, available liquidity exceeded GM Financial's liquidity targets.

GM Financial did not have any borrowings outstanding against our credit facility designated for their exclusive use or the remainder of our revolving credit facilities at December 31, 2023 and 2022.

Refer to the "Automotive Liquidity" section of this MD&A for additional details.

We have a support agreement with GM Financial which, among other things, establishes commitments of funding from us to GM Financial.

This agreement also provides that we will continue to own all of GM Financial’s outstanding voting shares so long as any unsecured debt securities remain outstanding at GM Financial.

In addition, we are required to use our commercially reasonable efforts to ensure GM Financial remains a subsidiary borrower under our corporate revolving credit facilities.

Credit Facilities In the normal course of business, in addition to using its available cash, GM Financial utilizes borrowings under its credit facilities, which may be secured or unsecured, and GM Financial repays these borrowings as appropriate under its cash management strategy.

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Net cash provided by (used in) operating activities $ 6.7 $ 5.5 $ 7.3 $ 1.2

Net cash provided by (used in) investing activities $ (10.0) $ (5.5) $ (9.3) $ (4.5)

Net cash provided by (used in) financing activities $ 4.0 $ (2.6) $ 2.4 $ 6.6

In the year ended December 31, 2022, Net cash provided by operating activities decreased primarily due to:

(1) a decrease in leased vehicle income of $1.2 billion;

and (2) a net increase in cash used in counterparty derivative collateral posting activities of $0.9 billion.

Net cash provided by (used in) investing activities(a) $ (10.9) $ (10.0) $ (5.5) $ (0.9)

Net cash provided by (used in) financing activities(b) $ 5.7 $ 4.0 $ (2.6) $ 1.7

(a) Includes $(3.0) billion, $(5.0) billion and $2.9 billion in the years ended December 31, 2023, 2022 and 2021 for purchases of, and collections on, wholesale finance receivables and intercompany loans to GM which are eliminated within the consolidated statements of cash flows.

(b) Includes $(1.8) billion, $(1.7) billion and $(3.5) billion in the years ended December 31, 2023, 2022 and 2021 for dividends to GM which are eliminated within the consolidated statements of cash flows.

In the year ended December 31, 2023, Net cash provided by operating activities increased primarily due to:

(1) an increase in finance charge income of $1.7 billion;

(2) a net increase in cash provided by counterparty derivative collateral posting activities of $1.3 billion;

(3) and a decrease in taxes paid to GM of $0.6 billion;

partially offset by (4) an increase in interest paid of $2.0 billion and (5) a decrease in leased vehicle income of $0.5 billion.

In the year ended December 31, 2023, Net cash used in investing activities increased primarily due to:

(1) an increase in purchases and originations of finance receivables of $6.1 billion;

(2) a decrease in collections and recoveries on finance receivables of $0.7 billion;

and (3) a decrease in the proceeds from termination of leased vehicles of $0.2 billion;

partially offset by (4) a decrease in purchases of leased vehicles of $2.7 billion.

In the year ended December 31, 2022, Net cash provided by financing activities increased primarily due to:

(1) a decrease in debt repayments of $8.8 billion;

and (2) a decrease in dividend payments of $1.8 billion;

partially offset by (3) a decrease in borrowings of $4.0 billion.

(1) an increase in purchases of leased vehicles of $1.7 billion;

(2) a decrease in the proceeds from termination of leased vehicles of $1.2 billion partially offset by (3) an increase in collections and recoveries on finance receivables of $1.3 billion;

(4) and a decrease in purchases and originations of finance receivables of $0.5 billion.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

LIBOR Transition As discussed in Part I, Item 1A.

Risk Factors, banks will no longer be persuaded or compelled to submit rates for the calculation of LIBOR.

GM Financial established a LIBOR transition initiative in 2019 to evaluate the potential impacts of the transition, and continues to implement strategies to mitigate the risks associated with the LIBOR discontinuation such as amending existing LIBOR-based transactions where feasible.

GM Financial has only a limited amount of LIBOR-based debt outstanding that is currently scheduled to mature after June 30, 2023 and if not amendable, would utilize the Alternative Reference Rates Committee fallback process where applicable.

Furthermore, GM Financial has adhered to the International Swaps and Derivatives Association’s Fallbacks Protocol and is transitioning its existing LIBOR-based derivative exposure in advance of the June 30, 2023 date when applicable LIBOR will no longer be published.

For any residual exposure after the end of 2022, GM Financial expects to leverage relevant contractual and statutory solutions to transition such exposure.

In the year ended December 31, 2023, Net cash provided by financing activities increased primarily due to:

(1) a net increase in borrowings of $6.9 billion;

partially offset by (2) an increase in debt repayments of $5.1 billion;

and (3) an increase in dividend payments of $0.1 billion.

LIBOR Transition The International Swaps and Derivatives Association launched its Interbank Offered Rate (IBOR) Fallbacks Supplement and IBOR Fallbacks Protocol, which came into effect on January 25, 2021.

The supplement incorporates fallbacks for new derivatives linked to LIBOR, and the protocol enables market participants to incorporate fallbacks for certain legacy derivatives linked to LIBOR.

GM Financial adhered to the protocol prior to the June 30, 2023 cessation date and has transitioned all of its LIBOR-based derivative exposure.

On March 15, 2022, Congress enacted the Adjustable Interest Rate (LIBOR) Act to address “tough legacy" contracts that lack adequate fallback provisions for determining a benchmark replacement to LIBOR.

GM Financial expects to leverage the safe harbors and protections provided by the LIBOR Act and its implementing regulations to transition its limited LIBOR exposure remaining after the cessation date.

Critical Accounting Estimates The consolidated financial statements are prepared in conformity with U.S.

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A change in any of these factors affecting the estimate could have a significant effect on recorded sales incentives.

A 10% increase in the cost of incentives would increase the sales incentive liability by an insignificant amount.

Subsequent adjustments to incentive estimates are possible as facts and circumstances change over time, which could affect the revenue previously recognized in Automotive net sales and revenue.

A 10% increase in the cost of incentives would increase the sales

GENERAL MOTORS COMPANY AND SUBSIDIARIES

incentive liability by approximately $0.2 billion.

Subsequent adjustments to incentive estimates are possible as facts and circumstances change over time, which could affect the revenue previously recognized in Automotive net sales and revenue.

GM Financial Allowance for Loan Losses The GM Financial retail finance receivables portfolio consists of smaller-balance, homogeneous loans that are carried at amortized cost, net of allowance for loan losses.

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At December 31, 2023, the weightings applied to the economic forecast scenarios considered resulted in an allowance for loan losses on the retail finance receivables portfolio of $2.3 billion.

If the forecast economic conditions were based entirely on the weakest scenario considered, the allowance for loan losses would increase by $74 million.

If the forecast economic conditions were based entirely on the weakest scenario considered, the allowance for loan losses would increase by $0.1 billion.

Actual economic data and recovery rates that are lower than those forecasted by GM Financial could result in an increase to the allowance for loan losses.

The GM Financial commercial finance receivables portfolio consists of floorplan financing as well as dealer loans, which are loans to finance improvements to dealership facilities, to provide working capital, or to purchase and/or finance dealership real estate.

The allowance for loan losses on commercial finance receivables is based on historical loss experience for the consolidated portfolio, in addition to forecasted industry vehicle sales.

The GM Financial commercial finance receivables portfolio consists of financing products for dealers and other businesses.

GM Financial provides commercial lending products to its dealer customers th at include floorplan financing, also known as wholesale or inventory financing, which is lending to finance vehicle inventory.

GM Financial also provides dealer loans, which are loans to finance improvements to dealership facilities, to provide working capital, or to purchase and/or finance dealership real estate.

Additionally, GM Financial provides lending products to commercial vehicle upfitters and advances to certain of our subsidiaries.

The allowance for loan losses on commercial finance receivables is based on historical loss experience for the consolidated portfolio, in addition to forecasted industry conditions.

There can be no assurance that the ultimate charge-off amount will not exceed such estimates or that GM Financial's credit loss assumptions will not increase.

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Each leased asset in the portfolio represents a vehicle that GM Financial owns and has leased to a customer.

At lease inception, an estimate is made of the expected residual value for the vehicle at the end of the lease term, which typically ranges from two to five years.

At the inception of a lease, an estimate is made of the expected residual value for the vehicle at the end of the lease term, which typically ranges from two to five years.

GM Financial estimates the expected residual value based on third-party data that considers various data points and assumptions, including, but not limited to, recent auction values, the expected future volume of returning leased vehicles, significant liquidation of rental or fleet inventory, used vehicle prices, manufacturer incentive programs and fuel prices.

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The customer is obligated to make payments during the lease term for the difference between the purchase price and the contract residual value plus a money factor.

However, since the customer is not obligated to purchase the vehicle at the end of the contract, GM Financial is exposed to a risk of loss to the extent the customer returns the vehicle prior to or at the end of the lease term and the proceeds GM Financial receives on the disposition of the vehicle are lower than the residual value estimated at lease inception.

Realization of the residual values is dependent on GM Financial's future ability to market the vehicles under prevailing market conditions.

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If a decrease in residual values is concentrated among specific asset groups, the decrease could result in an immediate impairment charge.

GM Financial reviewed the leased vehicle portfolio for indicators of impairment and determined that no impairment indicators were present at December 31, 2022 and 2021.

Used vehicle prices decreased since the end of 2021 due to normalization of supply and demand;

however, prices remain above pre-pandemic levels.

In 2023, GM Financial expects used vehicle prices to continue moderating through the year.

GM Financial reviewed the leased vehicle portfolio for indicators of impairment and determined that no impairment indicators were present at December 31, 2023 or 2022.

Pension and OPEB Plans Our defined benefit pension plans are accounted for on an actuarial basis, which requires the selection of various assumptions, including an expected long-term rate of return on plan assets, a discount rate, mortality rates of participants and expectation of mortality improvement.

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pension plans.

As a result of changes to our capital market assumptions, the weighted-average long-term rate of return on assets increased from 5.4% at December 31, 2021 to 6.3% at December 31, 2022.

As a result, the weighted-average long-term rate of ROA remains unchanged at 6.3% at December 31, 2023 and 2022.

The expected long-term rate of return on plan assets used in determining pension expense for non-U.S.

plans is determined in a similar manner to the U.S.

Another key assumption in determining net pension and OPEB expense is the assumed discount rate used to discount plan obligations.

Another key assumption in determining net pension and other postretirement benefits (OPEB) expense is the assumed discount rate used to discount plan obligations.

We estimate the assumed discount rate for U.S.

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The unamortized pre-tax actuarial loss on our pension plans was $5.9 billion and $3.3 billion at December 31, 2023 and 2022.

The year-over-year change is primarily due to an increase in discount rates partially offset by lower than expected asset returns.

The year-over-year change is primarily due to a decrease in discount rates and lower than expected asset returns.

The funded status of the U.S.

pension plans improved in the year ended December 31, 2022 to $0.1 billion overfunded status from $0.3 billion underfunded status primarily due to:

(1) the favorable effect of an increase in discount rates of $11.9 billion;

and (2) changes in actuarial assumptions, demographic data updates and contributions of $0.3 billion;

partially offset by (3) the unfavorable effect of negative actual returns on plan assets of $10.3 billion;

and (4) service and interest costs of $1.5 billion.

pension plans deteriorated in the year ended December 31, 2023 to $2.2 billion underfunded status from $0.1 billion overfunded status primarily due to:

(1) service and interest costs of $2.4 billion;

(2) the unfavorable effect of a decrease in discount rates of $1.3 billion;

and (3) the unfavorable effect of plan amendments of $0.8 billion;

partially offset by (4) the favorable effect of actual returns on plan assets of $1.8 billion;

and (5) contributions of $0.4 billion.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

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25 basis point increase in discount rate +$53 -$872 +$6 -$299

25 basis point decrease in expected rate of return on assets +$116 N/A +$25 N/A

25 basis point increase in expected rate of return on assets -$116 N/A -$25 N/A

25 basis point decrease in expected rate of ROA +$109 N/A +$25 N/A

25 basis point increase in expected rate of ROA -$109 N/A -$25 N/A

(a) The sensitivity does not include the effects of the individual annual yield curve rates applied for the calculation of the service and interest cost.

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Changes in our current estimates, due to unanticipated market conditions, governmental legislative actions or events, could have a material effect on our ability to utilize deferred tax assets.

Refer to Note 17 to our consolidated financial statements for additional information on the composition of valuation allowances.

At December 31, 2023, valuation allowances against deferred tax assets were $7.0 billion.

Refer to Note 17 to our consolidated financial statements for additional information on the composition of these valuation allowances and information on the $870 million income tax benefit resulting from the release of valuation allowances against deferred tax assets in Korea.

Non-GAAP Measures We use both GAAP and non-GAAP financial measures for operational and financial decision making, and to assess Company and segment business performance.

Our non-GAAP measures include:

earnings before interest and taxes (EBIT)-adjusted, presented net of noncontrolling interests;

earnings before income taxes (EBT)-adjusted for our GM Financial segment;

earnings per share (EPS)-diluted-adjusted;

effective tax rate-adjusted (ETR-adjusted);

return on invested capital-adjusted (ROIC-adjusted) and adjusted automotive free cash flow.

Our calculation of these non-GAAP measures may not be comparable to similarly titled measures of other companies due to potential differences between companies in the method of calculation.

As a result, the use of these non-GAAP measures has limitations and should not be considered superior to, in isolation from, or as a substitute for, related U.S.

GAAP measures.

Management uses these measures in its financial, investment and operational decision-making processes, for internal reporting and as part of its forecasting and budgeting processes.

Further, our Board of Directors uses certain of these and other measures as key metrics to determine management performance under our performance-based compensation plans.

For these reasons, we believe these non-GAAP measures are useful for our investors.

EBIT-adjusted (Most comparable GAAP measure:

Net income attributable to stockholders) EBIT-adjusted is presented net of noncontrolling interests and is used by management and can be used by investors to review our consolidated operating results because it excludes automotive interest income, automotive interest expense and income taxes as well as certain additional adjustments that are not considered part of our core operations.

For EBIT-adjusted and our other non-

GENERAL MOTORS COMPANY AND SUBSIDIARIES

GAAP measures, once we have made an adjustment in the current period for an item, we will also adjust the related non-GAAP measure in any future periods in which there is an impact from the item.

EPS-diluted-adjusted (Most comparable GAAP measure:

Diluted earnings per common share) EPS-diluted-adjusted is used by management and can be used by investors to review our consolidated diluted EPS results on a consistent basis.

Examples of income tax adjustments include the establishment or release of significant deferred tax asset valuation allowances.

ETR-adjusted (Most comparable GAAP measure:

Effective tax rate) ETR-adjusted is used by management and can be used by investors to review the consolidated effective tax rate for our core operations on a consistent basis.

When we provide an expected adjusted effective tax rate, we do not provide an expected effective tax rate because the U.S.

GAAP measure may include significant adjustments that are difficult to predict.

ROIC-adjusted (Most comparable GAAP measure:

Return on equity) ROIC-adjusted is used by management and can be used by investors to review our investment and capital allocation decisions.

average automotive net pension and OPEB liabilities;

and average automotive net income tax assets during the same period.

Adjusted automotive free cash flow (Most comparable GAAP measure:

Net automotive cash provided by operating activities) Adjusted automotive free cash flow is used by management and can be used by investors to review the liquidity of our automotive operations and to measure and monitor our performance against our capital allocation program and evaluate our automotive liquidity against the substantial cash requirements of our automotive operations.

We measure adjusted automotive free cash flow as automotive operating cash flow from operations less capital expenditures adjusted for management actions.

Refer to the “Liquidity and Capital Resources” section of this MD&A for additional information.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

The following table reconciles Net income attributable to stockholders under U.S.

GAAP to EBIT-adjusted:

Years Ended December 31,

2023 2022 2021

Net income attributable to stockholders $ 10,127 $ 9,934 $ 10,019

Income tax expense 563 1,888 2,771

Automotive interest expense 911 987 950

Automotive interest income (1,109) (460) (146)

Voluntary separation program(a) 1,035 — —

Buick dealer strategy(b) 569 511 —

Cruise restructuring(c) 478 — —

GM Korea wage litigation(d) (106) — 82

India asset sales(e) (111) — —

Cruise compensation modifications(f) — 1,057 —

Russia exit(g) — 657 —

Patent royalty matters(h) — (100) 250

GM Brazil indirect tax matters(i) — — 194

Cadillac dealer strategy(j) — — 175

Total adjustments 1,865 2,125 701

EBIT-adjusted $ 12,357 $ 14,474 $ 14,295

(a) These adjustments were excluded because they relate to the acceleration of attrition as part of the cost reduction program announced in January 2023, primarily in the U.S.

(b) These adjustments were excluded because they relate to strategic activities to transition certain Buick dealers out of our dealer network as part of Buick’s EV strategy.

(c) These adjustments were excluded because they relate to restructuring costs resulting from Cruise voluntarily pausing its driverless, supervised and manual AV operations in the U.S.

while it examines its processes, systems and tools.

The adjustments primarily consist of non-cash restructuring charges, supplier related charges and employee separation charges.

(d) These adjustments were excluded because of the unique events associated with Supreme Court of the Republic of Korea (Korea Supreme Court) decisions related to our salaried workers in 2021 and partial resolution of subcontractor matters in 2023.

(e) These adjustments were excluded because they relate to an asset sale resulting from our strategic decision in 2020 to exit India.

(f) This adjustment was excluded because it relates to the one-time modification of Cruise stock incentive awards.

(g) This adjustment was excluded because it relates to the shutdown of our Russia business including the write off of our net investment and release of accumulated translation losses into earnings.

(h) These adjustments were excluded because they relate to certain royalties accrued with respect to past-year vehicle sales in 2021 and the resolution of substantially all of these matters in 2022.

(i) This adjustment was excluded because it relates to a settlement with third parties relating to retrospective recoveries of indirect taxes in Brazil realized in prior periods.

(j) This adjustment was excluded because it relates to strategic activities to transition certain Cadillac dealers out of our dealer network as part of Cadillac's EV strategy.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

The following table reconciles diluted earnings per common share under U.S.

GAAP to EPS-diluted-adjusted:

Years Ended December 31,

2023 2022 2021

Amount Per Share Amount Per Share Amount Per Share

Diluted earnings per common share $ 10,022 $ 7.32 $ 8,915 $ 6.13 $ 9,837 $ 6.70

Adjustments(a) 1,865 1.36 2,125 1.46 701 0.47

Tax effect on adjustments(b) (504) (0.37) (423) (0.29) (105) (0.07)

Tax adjustments(c) (870) (0.64) (482) (0.33) (51) (0.03)

Deemed dividend adjustment(d) — — 909 0.63 — —

EPS-diluted-adjusted $ 10,513 $ 7.68 $ 11,044 $ 7.59 $ 10,382 $ 7.07

(a) Refer to the reconciliation of Net income attributable to stockholders under U.S.

GAAP to EBIT-adjusted within this section of the MD&A for adjustment details.

(b) The tax effect of each adjustment is determined based on the tax laws and valuation allowance status of the jurisdiction to which the adjustment relates.

(c) In the year ended December 31, 2023, the adjustment consists of tax benefit related to the release of a valuation allowance against deferred tax assets considered realizable in Korea.

In the year ended December 31, 2022, the adjustment consists of tax benefit related to the release of a valuation allowance against deferred tax assets considered realizable as a result of Cruise tax reconsolidation.

These adjustments were excluded because significant impacts of valuation allowances are not considered part of our core operations.

(d) This adjustment consists of a deemed dividend related to the redemption of Cruise preferred shares from SoftBank in the year ended December 31, 2022.

The following table reconciles our effective tax rate under U.S.

GAAP to ETR-adjusted:

Years Ended December 31,

2023 2022 2021

Income before income taxes Income tax expense Effective tax rate Income before income taxes Income tax expense Effective tax rate Income before income taxes Income tax expense Effective tax rate

Effective tax rate $ 10,403 $ 563 5.4 % $ 11,597 $ 1,888 16.3 % $ 12,716 $ 2,771 21.8 %

Adjustments(a) 1,916 504 2,221 423 726 105

Tax adjustments(b) 870 482 51

ETR-adjusted $ 12,319 $ 1,937 15.7 % $ 13,818 $ 2,793 20.2 % $ 13,442 $ 2,927 21.8 %

(a) Refer to the reconciliation of Net income attributable to stockholders under U.S.

GAAP to EBIT-adjusted within this section of the MD&A for adjustment details.

Net income attributable to noncontrolling interests for these adjustments is included in the years ended December 31, 2023, 2022 and 2021.

The tax effect of each adjustment is determined based on the tax laws and valuation allowance status of the jurisdiction to which the adjustment relates.

(b) Refer to the reconciliation of diluted earnings per common share under U.S.

GAAP to EPS-diluted-adjusted within this section of the MD&A for adjustment details.

We define return on equity (ROE) as Net income attributable to stockholders for the trailing four quarters divided by average equity for the same period.

Management uses average equity to provide comparable amounts in the calculation of ROE.

The following table summarizes the calculation of ROE (dollars in billions):

Years Ended December 31,

2023 2022 2021

Net income attributable to stockholders $ 10.1 $ 9.9 $ 10.0

Average equity(a) $ 72.0 $ 66.6 $ 56.5

ROE 14.1 % 14.9 % 17.7 %

(a) Includes equity of noncontrolling interests where the corresponding earnings (loss) are included in Net income attributable to stockholders.

GENERAL MOTORS COMPANY AND SUBSIDIARIES

The following table summarizes the calculation of ROIC-adjusted (dollars in billions):

Years Ended December 31,

2023 2022 2021

EBIT-adjusted(a) $ 12.4 $ 14.5 $ 14.3

Average equity(b) $ 72.0 $ 66.6 $ 56.5

Average automotive debt and interest liabilities (excluding finance leases) 16.2 17.6 17.1

Average automotive net pension & OPEB liability 8.1 9.4 15.8

Average automotive net income tax asset (21.1) (21.2) (22.2)

ROIC-adjusted average net assets $ 75.2 $ 72.3 $ 67.2

ROIC-adjusted 16.4 % 20.0 % 21.3 %

(a) Refer to the reconciliation of Net income attributable to stockholders under U.S.

GAAP to EBIT-adjusted within this section of the MD&A.

(b) Includes equity of noncontrolling interests where the corresponding earnings (loss) are included in EBIT-adjusted.

Forward-Looking Statements This report and the other reports filed by us with the SEC from time to time, as well as statements incorporated by reference herein and related comments by our management, may include "forward-looking statements" within the meaning of the U.S.

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These factors, which may be revised or supplemented in subsequent reports we file with the SEC, include, among others, the following:

(1) our ability to deliver new products, services, technologies and customer experiences in response to increased competition and changing consumer preferences in the automotive industry;

(1) our ability to deliver new products, services, technologies and customer experiences in response to increased competition and changing consumer needs and preferences;

(2) our ability to timely fund and introduce new and improved vehicle models, including electric vehicles, that are able to attract a sufficient number of consumers;

(3) our ability to profitably deliver a broad portfolio of electric vehicles that will help drive consumer adoption;

(4) the success of our current line of full-size SUVs and full-size pickup trucks;

(3) our ability to profitably deliver a strategic portfolio of electric vehicles that will help drive consumer adoption;

(4) the success of our current line of ICE vehicles, particularly our full-size SUVs and full-size pickup trucks;

(5) our highly competitive industry, which has been historically characterized by excess manufacturing capacity and the use of incentives, and the introduction of new and improved vehicle models by our competitors;

(6) the unique technological, operational, regulatory and competitive risks related to the timing and commercialization of autonomous vehicles;

(6) the unique technological, operational, regulatory and competitive risks related to the timing and commercialization of AVs, including the various regulatory approvals and permits required for operating driverless AVs in multiple markets;

(7) risks associated with climate change, including increased regulation of GHG emissions, our transition to electric vehicles and the potential increased impacts of severe weather events;

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(10) our business in China, which is subject to unique operational, competitive, regulatory and economic risks;

(11) the success of our ongoing strategic business relationships and of our joint ventures, which we cannot operate solely for our benefit and over which we may have limited control;

GENERAL MOTORS COMPANY AND SUBSIDIARIES

and laws (including labor, trade, tax and other laws), political uncertainty or instability and economic tensions between governments and changes in international trade policies, new barriers to entry and changes to or withdrawals from free trade agreements, changes in foreign exchange rates and interest rates, economic downturns in the countries in which we operate, differing local product preferences and product requirements, changes to and compliance with U.S.

and foreign countries' export controls and economic sanctions, differing labor regulations, requirements and union relationships, differing dealer and franchise regulations and relationships, difficulties in obtaining financing in foreign countries, and public health crises, including the occurrence of a contagious disease or illness, such as the COVID-19 pandemic;

(11) the success of our ongoing strategic business relationships, particularly with respect to facilitating access to raw materials necessary for the production of EVs, and of our joint ventures, which we cannot operate solely for our benefit and over which we may have limited control;

(12) the international scale and footprint of our operations, which exposes us to a variety of unique political, economic, competitive and regulatory risks, including the risk of changes in government leadership and laws (including labor, trade, tax and other laws), political uncertainty or instability and economic tensions between governments and changes in international trade policies, new barriers to entry and changes to or withdrawals from free trade agreements, changes in foreign exchange rates and interest rates, economic downturns in the countries in which we operate, differing local product preferences and product requirements, changes to and compliance with U.S.

(13) any significant disruption, including any work stoppages, at any of our manufacturing facilities;

(14) the ability of our suppliers to deliver parts, systems and components without disruption and at such times to allow us to meet production schedules;

(15) pandemics, epidemics, disease outbreaks and other public health crises, including the COVID-19 pandemic;

(16) the possibility that competitors may independently develop products and services similar to ours, or that our intellectual property rights are not sufficient to prevent competitors from developing or selling those products or services;

(17) our ability to manage risks related to security breaches and other disruptions to our information technology systems and networked products, including connected vehicles and in-vehicle systems;

(18) our ability to comply with increasingly complex, restrictive and punitive regulations relating to our enterprise data practices, including the collection, use, sharing and security of the Personal Identifiable Information of our customers, employees, or suppliers;

(15) pandemics, epidemics, disease outbreaks and other public health crises;

GENERAL MOTORS COMPANY AND SUBSIDIARIES

possibility that competitors may independently develop products and services similar to ours, or that our intellectual property rights are not sufficient to prevent competitors from developing or selling those products or services;

(17) our ability to manage risks related to security breaches, cyberattacks and other disruptions to our information technology systems and networked products, including connected vehicles and in-vehicle systems;

(18) our ability to comply with increasingly complex, restrictive and punitive regulations relating to our enterprise data practices, including the collection, use, sharing and security of the personal information of our customers, employees, or suppliers;

(19) our ability to comply with extensive laws, regulations and policies applicable to our operations and products, including those relating to fuel economy, emissions and autonomous vehicles;

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What changed 10-K

Item 7. Management’s Discussion and Analysis