General Motors Co 10-K

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations This MD&A should be read in conjunction with the accompanying audited consolidated financial statements and notes. Forward-looking statements in this MD&A are not guarantees of future performance and may involve risks and uncertainties that could cause actual results to differ materially from those projected. Refer to the "Forward-Looking Statements" section of this MD&A and Part I, Item 1A. Risk Factors for a discussion of these risks and uncertainties. The discussion of our financial condition and results of operations for the year ended December 31, 2022 included in Item 7. 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, 2023 is incorporated by reference into this MD&A. 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, personal AV technology, 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 26 Table of Contents GENERAL MOTORS COMPANY AND SUBSIDIARIES with a steadfast commitment to good corporate citizenship through more sustainable operations and a leading health and safety culture. Our financial performance in 2024 was driven by the strength of our vehicle portfolio including high margin full-size pickup trucks and SUVs, strong consumer demand for our products and the execution of our core business strategy. We remain focused on maintaining an efficient cost structure and pricing discipline. We are monitoring industry pricing pressures, changing interest rates, inflation, warranty claims, consumer demand trends and potential changes in the regulatory environment. We continue to prioritize driving down costs and building scale in our EV portfolio to improve profitability. 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. 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. For the year ending December 31, 2025, we expect earnings per share (EPS)-diluted and EPS-diluted-adjusted of between $11.00 and $12.00, Net income attributable to stockholders of between $11.2 billion and $12.5 billion and earnings before interest and taxes (EBIT)-adjusted of between $13.7 billion and $15.7 billion. 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. The following table reconciles expected Net income attributable to stockholders under U.S. generally accepted accounting principles (GAAP) to expected EBIT-adjusted (dollars in billions): Year Ending December 31, 2025 Net income attributable to stockholders $ 11.2-12.5 Income tax expense 2.5-3.2 Automotive interest income, net (0.0) EBIT-adjusted(a) $ 13.7-15.7 __________ (a) We do not consider the potential future impact of adjustments on our expected financial results. GMNA Industry sales in North America were 20.3 million units in the year ended December 31, 2024, representing an increase of 3.5% compared to the corresponding period in 2023. U.S. industry sales were 16.4 million units in the year ended December 31, 2024, representing an increase of 2.3% compared to the corresponding period in 2023. Our total vehicle sales in the U.S., our largest market in North America, were 2.7 million units for a market share of 16.5% in the year ended December 31, 2024, representing an increase of 0.3 percentage points compared to the corresponding period in 2023. We expect to sustain relatively strong EBIT-adjusted margins in 2025 on the continuing strength of our product portfolio, improving EV margins and continuing cost discipline, partially offset by pricing moderation with increased incentives and higher depreciation expense. While we expect EV margins to improve in 2025, we may continue to recognize losses to adjust inventory to net realizable value. Our outlook is dependent on continued supply chain availability, EV-related cost reduction and the resiliency of the U.S. economy and overall economic conditions, including the potential imposition of tariffs or other trade restrictions by the U.S. or its trading partners. GMI Industry sales in China were 26.6 million units in the year ended December 31, 2024, representing an increase of 6.4% compared to the corresponding period in 2023. Our total vehicle sales in China were 1.8 million units resulting in a market share of 6.9% in the year ended December 31, 2024, representing a decrease of 1.5 percentage points compared to the corresponding period in 2023. Intense price competition with significant excess capacity from both new market entrants and established competitors offering vehicles at lower prices and an increasingly challenging regulatory environment related to emissions, fuel consumption and NEVs continue to negatively impact the profitability of our operations in China. Additionally, 27 Table of Contents GENERAL MOTORS COMPANY AND SUBSIDIARIES we believe independent, Chinese automakers are expanding market share and prioritizing production volumes over profitability, with the ability to produce vehicles at costs well below foreign automakers, including our Automotive China JVs. These factors are impacting our China JVs’ ability to grow vehicle sales in China and our ability to generate sustainable equity income from our China JVs. We are in the late stages of finalizing details with our JV partners on an agreement regarding certain restructuring actions, which include plant closures and portfolio optimization to address continuing market challenges and competitive conditions, and updated business forecasts. Based on the updated forecast, we determined that the material loss in value of our equity interests in SAIC General Motors Corporation Limited (SGM), SAIC GM (Shenyang) Norsom Motors Co., Ltd. (SGM Norsom), SAIC GM Dong Yue Motors Co., Ltd. (SGM DY) and SAIC GM Dong Yue Powertrain Co., Ltd. (SGM DYPT) was other than temporary. As a result, we recorded an other-than-temporary impairment of our equity interests of $2.1 billion in the year ended December 31, 2024 which is included in equity income (loss). Our Automotive China JVs' equity losses also includes non-cash charges of $2.0 billion resulting from the implementation of the restructuring plan. We expect additional restructuring charges are likely to be incurred in 2025. Going forward, we will continue to assess our strategy in the Chinese market to maintain presence while prioritizing profitability. In addition, GM Financial also concluded that a $0.3 billion other-than-temporary impairment of its equity interest in SAIC-GMAC Automotive Finance Company Limited (SAIC-GMAC) existed. Refer to the "Automotive Financing – GM Financial Summary and Outlook” section of this MD&A for discussion of GM Financial’s other-than-temporary impairment of its equity interest in SAIC-GMAC. Outside of China, industry sales were 25.7 million units in the year ended December 31, 2024, representing a decrease of 0.3% compared to the corresponding period in 2023. Our total vehicle sales outside of China were 0.9 million units for a market share of 3.7% in the year ended December 31, 2024, representing a decrease of 0.3 percentage points compared to the corresponding period in 2023. Cruise Cruise Holdings, our majority-owned subsidiary, has been pursuing the development and commercialization of AV technology for deployment in a robotaxi application. In June 2024, Cruise indefinitely delayed development work on the Cruise Origin and recorded restructuring charges of $0.6 billion primarily related to non-cash write-offs of Origin assets. In December 2024, we announced plans to refocus our autonomous driving strategy on personal vehicles and that we would no longer fund Cruise's robotaxi development work. Refer to Part I, Item 1. Business for a further discussion on Cruise. In conjunction with our announcement to no longer fund Cruise’s robotaxi development work and our plans to combine the Cruise and GM technical efforts to advance autonomous and assisted driving, Cruise recorded net charges of $0.5 billion. These charges primarily relate to anticipated headcount reductions and impairments of real estate lease assets and certain intangible assets. 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 39% in the year ended December 31, 2024 and 42% in the corresponding period in 2023. 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 81% in the year ended December 31, 2024 and 82% in the corresponding period in 2023. In the year ended December 31, 2024, GM Financial's revenue consisted of leased vehicle income of 46%, retail finance charge income of 40% and commercial finance charge income of 8%. GM Financial's leasing program is exposed to residual values, which are heavily dependent on used vehicle prices. Gains on terminations of leased vehicles of $0.8 billion and $0.9 billion were included in GM Financial interest, operating and other expenses in the years ended December 31, 2024 and 2023. The decrease in gains is primarily due to fewer terminated leases in 2024 compared to 2023. The following table summarizes the estimated residual value based on GM Financial's most recent 28 Table of Contents GENERAL MOTORS COMPANY AND SUBSIDIARIES estimates and the number of units included in GM Financial Equipment on operating leases, net by vehicle type (units in thousands): December 31, 2024 December 31, 2023 Residual Value Units Percentage Residual Value Units Percentage Crossovers $ 13,184 635 67.3 % $ 12,830 648 67.5 % Trucks 7,458 224 23.7 % 6,793 210 21.9 % SUVs 2,260 53 5.6 % 2,304 58 6.0 % Cars 590 31 3.3 % 734 44 4.6 % Total $ 23,492 943 100.0 % $ 22,661 960 100.0 % As a result of the market challenges and competitive conditions in China, GM Financial recorded a $0.3 billion other-than-temporary impairment charge to write down its SAIC-GMAC investment to its fair value. Refer to the "Overview – GMI" section of this MD&A for discussion of the China market and associated restructuring actions being taken. Consolidated Results We review changes in our results of operations under five categories: Volume, Mix, Price, Cost and Other. Volume measures the impact of changes in wholesale vehicle volumes driven by industry volume, market share and changes in dealer stock levels. Mix measures the impact of changes to the regional portfolio due to product, model, trim, country and option penetration in current year wholesale vehicle volumes. Price measures the impact of changes related to Manufacturer’s Suggested Retail Price and various sales allowances. Cost primarily includes: (1) material and freight; (2) manufacturing, engineering, advertising, administrative and selling and warranty expense; and (3) non-vehicle related activity. Other primarily includes foreign exchange and non-vehicle related automotive revenues as well as equity income or loss from our nonconsolidated affiliates. Refer to the regional sections of this MD&A for additional information. Total Net Sales and Revenue Years Ended December 31, Favorable/ (Unfavorable) Variance Due To 2024 2023 % Volume Mix Price Other (Dollars in billions) GMNA $ 157,509 $ 141,445 $ 16,064 11.4 % $ 12.8 $ 2.5 $ 0.7 $ — GMI 13,890 15,949 (2,059) (12.9) % $ (1.6) $ 0.4 $ 0.2 $ (1.1) Corporate 206 273 (67) (24.5) % $ — $ (0.1) Automotive 171,605 157,667 13,938 8.8 % $ 11.2 $ 2.9 $ 0.9 $ (1.1) Cruise 257 102 155 n.m. $ — $ 0.2 GM Financial 15,875 14,225 1,650 11.6 % $ 1.7 Eliminations/reclassifications (296) (151) (145) (96.0) % $ — $ (0.1) Total net sales and revenue $ 187,442 $ 171,842 $ 15,598 9.1 % $ 11.2 $ 2.9 $ 0.9 $ 0.6 __________ n.m. = not meaningful Refer to the regional sections of this MD&A for additional information on Volume, Mix, Price and Other. 29 Table of Contents GENERAL MOTORS COMPANY AND SUBSIDIARIES Automotive and Other Cost of Sales Years Ended December 31, Favorable/ (Unfavorable) Variance Due To 2024 2023 % Volume Mix Cost Other (Dollars in billions) GMNA $ 135,818 $ 123,577 $ (12,241) (9.9) % $ (8.9) $ (5.5) $ 2.2 $ 0.1 GMI 12,552 14,164 1,612 11.4 % $ 1.2 $ (0.3) $ (0.2) $ 0.8 Corporate 132 513 381 74.3 % $ — $ 0.4 $ — Cruise 2,566 3,088 522 16.9 % $ — $ 0.5 Eliminations (3) (12) (9) (75.0) % $ — $ — Total automotive and other cost of sales $ 151,065 $ 141,330 $ (9,735) (6.9) % $ (7.7) $ (5.8) $ 2.9 $ 0.9 The most significant element of our Automotive and other cost of sales is material cost, which makes up approximately two-thirds of the total amount. The remaining portion includes labor costs, depreciation and amortization, engineering, freight and product warranty and recall campaigns. Factors that most significantly influence a region's profitability are industry volume, market share and the relative mix of vehicles (trucks, crossovers, cars) sold. Variable profit is a key indicator of product profitability. 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. Refer to the regional sections of this MD&A for additional information on Volume and Mix. In the year ended December 31, 2024, decreased Cost was primarily due to: (1) decreased inventory adjustments of $2.2 billion, primarily EV-related, to reflect the net realizable value at period end; (2) the absence of charges related to the voluntary separation program (VSP) of $0.7 billion; (3) decreased engineering costs of $0.7 billion, driven primarily by lower AV engineering costs; (4) increased equity earnings related to Ultium Cells Holdings LLC of $0.7 billion; (5) decreased material and freight costs of $0.3 billion; partially offset by (6) increased other employee-related costs of $0.6 billion; (7) increased charges of $0.5 billion related to restructuring costs resulting from the plan to realign Cruise with our existing GM technical teams to develop personal AV technology; (8) increased warranty-related costs of $0.4 billion; and (9) increased information technology costs of $0.3 billion. In the year ended December 31, 2024, favorable Other was primarily due to net foreign currency changes in the Brazilian real and the Korean won. Automotive and Other Selling, General and Administrative Expense Years Ended December 31, Year Ended 2024 vs. 2023 Change 2024 2023 2022 Favorable/ (Unfavorable) % Automotive and other selling, general and administrative expense $ 10,621 $ 9,840 $ 10,667 $ (781) (7.9) % In the year ended December 31, 2024, Automotive and other selling, general and administrative expense increased primarily due to: (1) increased charges of $0.4 billion related to strategic activities to transition certain Buick dealerships; and (2) increased advertising, selling and administrative costs of $0.3 billion. 30 Table of Contents GENERAL MOTORS COMPANY AND SUBSIDIARIES Interest Income and Other Non-operating Income, net Years Ended December 31, Year Ended 2024 vs. 2023 Change 2024 2023 2022 Favorable/ (Unfavorable) % Interest income and other non-operating income, net $ 1,257 $ 1,537 $ 1,432 $ (280) (18.2) % In the year ended December 31, 2024, Interest income and other non-operating income, net decreased primarily due to several insignificant items. Income Tax Expense Years Ended December 31, Year Ended 2024 vs. 2023 Change 2024 2023 2022 Favorable/ (Unfavorable) % Income tax expense $ 2,556 $ 563 $ 1,888 $ (1,993) n.m. __________ n.m. = not meaningful In the year ended December 31, 2024, Income tax expense increased primarily d ue to jurisdictional mix of earnings and valuation allowance adjustments that occurred in the year ended December 31, 2023 . For the year ended December 31, 2024, our effective tax rate-adjusted (ETR-adjusted) was 20.1%. We expect our adjusted effective tax rate to be between 18% and 20% for the year ending December 31, 2025. Refer to Note 17 to our consolidated financial statements for additional information related to Income tax expense. GM North America Years Ended December 31, Favorable/ (Unfavorable) Variance Due To 2024 2023 % Volume Mix Price Cost Other (Dollars in billions) Total net sales and revenue $ 157,509 $ 141,445 $ 16,064 11.4 % $ 12.8 $ 2.5 $ 0.7 $ — EBIT-adjusted $ 14,528 $ 12,306 $ 2,222 18.1 % $ 3.9 $ (3.1) $ 0.7 $ 1.3 $ (0.6) EBIT-adjusted margin 9.2 % 8.7 % 0.5 % (Vehicles in thousands) Wholesale vehicle sales 3,464 3,147 317 10.1 % GMNA Total Net Sales and Revenue In the year ended December 31, 2024, Total net sales and revenue increased primarily due to: (1) increased net wholesale volumes primarily due to increased sales of full-size pickup trucks, mid-size pickup trucks and other vehicles; (2) favorable Mix associated with increased sales of full-size pickup trucks and full-size SUVs, partially offset by increased sales of crossover vehicles; and (3) favorable Price as a result of stable dealer inventory levels and strong demand for our products. GMNA EBIT-Adjusted The most significant factors that influence profitability are industry volume and market share. While not as significant as industry volume and market share, another factor affecting profitability is the relative mix of vehicles sold. Trucks, crossovers and cars sold currently have a variable profit of approximately 160%, 40% and 50% of our GMNA portfolio on a weighted-average basis. In the year ended December 31, 2024, EBIT-adjusted increased primarily due to: (1) increased net wholesale volumes primarily due to increased sales of full-size pickup trucks, mid-size pickup trucks and crossover vehicles; (2) favorable Cost primarily due to decreased inventory adjustments of $2.1 billion, primarily EV-related, to reflect the net realizable value at period end, increased equity earnings related to Ultium Cells Holdings LLC of $0.7 billion and decreased material and freight costs of $0.6 billion, partially offset by increased other employee-related costs of $0.7 billion, increased engineering costs of $0.5 billion, primarily due to a decrease in cost sharing arrangements with our Automotive China JVs, increased warranty- 31 Table of Contents GENERAL MOTORS COMPANY AND SUBSIDIARIES related costs of $0.4 billion, increased information technology costs of $0.3 billion and increased other cost of sales of $0.3 billion; and (3) favorable Price; partially offset by (4) unfavorable Mix associated with increased sales of crossover vehicles and EVs; and (5) unfavorable Other due to net foreign currency changes primarily in the Mexican peso. GM International Years Ended December 31, Favorable/ (Unfavorable) Variance Due To 2024 2023 % Volume Mix Price Cost Other (Dollars in billions) Total net sales and revenue $ 13,890 $ 15,949 $ (2,059) (12.9) % $ (1.6) $ 0.4 $ 0.2 $ (1.1) EBIT-adjusted $ 303 $ 1,210 $ (907) (75.0) % $ (0.4) $ 0.1 $ 0.2 $ (0.2) $ (0.7) EBIT-adjusted margin 2.2 % 7.6 % (5.4) % Equity income (loss) — Automotive China $ (4,407) $ 446 $ (4,853) n.m. EBIT-adjusted — excluding Equity income (loss)(a) $ 633 $ 764 $ (131) (17.1) % (Vehicles in thousands) Wholesale vehicle sales 547 621 (74) (11.9) % __________ n.m. = not meaningful (a) Excludes adjustments related to Automotive China JVs restructuring recorded in GMI. Refer to the "Overview – GMI" section of this MD&A for discussion of these adjustments. The vehicle sales of our Automotive China JVs are not recorded in Total net sales and revenue. The results of our joint ventures are recorded in Equity income (loss), which is included in EBIT-adjusted above. GMI Total Net Sales and Revenue In the year ended December 31, 2024, Total net sales and revenue decreased primarily due to: (1) decreased net wholesale volumes in South America, in Asia/Pacific and in the Middle East primarily due to decreased sales of passenger cars and crossover vehicles, partially offset by higher sales of trucks; and (2) unfavorable Other primarily due to the foreign currency effect resulting from the weakening of the Brazilian real and Egyptian pound against the U.S. dollar and decreased components sales; partially offset by (3) favorable Mix primarily in Brazil and in the Middle East; and (4) favorable pricing across multiple vehicle lines in the Middle East and in Brazil. GMI EBIT-Adjusted In the year ended December 31, 2024, EBIT-adjusted decreased primarily due to: (1) unfavorable Other primarily due to decreased Automotive China JVs equity income (loss); (2) decreased net wholesale volumes; and (3) unfavorable Cost primarily due to increased material costs and unfavorable impact due to nonrecurring asset sale in Korea, partially offset by favorable fixed cost; partially offset by (4) favorable Price; and (5) favorable Mix in South America. Our Automotive China JVs’ ability to grow vehicle sales in China and generate sustainable equity income continues to be a challenge due to intense competition from our domestic competitors in the Chinese market. In the year ended December 31, 2024, we recognized equity losses of $4.4 billion driven primarily by impairment and restructuring charges of $4.1 billion for certain of our Automotive China JVs. Refer to Note 8 to our consolidated financial statements for additional information. The following table summarizes certain key operational and financial data for the Automotive China JVs (vehicles in thousands): Years Ended December 31, 2024 2023 2022 Wholesale vehicle sales including vehicles exported to markets outside of China 1,843 2,334 2,639 Total net sales and revenue $ 21,740 $ 31,435 $ 35,857 Net income (loss) $ (4,466) $ 1,122 $ 1,407 December 31, 2024 December 31, 2023 Cash and cash equivalents $ 6,389 $ 6,875 Debt $ 104 $ 202 32 Table of Contents GENERAL MOTORS COMPANY AND SUBSIDIARIES Cruise Years Ended December 31, 2024 vs. 2023 Change 2024 2023 2022 Favorable/ (Unfavorable) % Total net sales and revenue(a) $ 257 $ 102 $ 102 $ 155 n.m. EBIT (loss)-adjusted $ (1,701) $ (2,695) $ (1,890) $ 994 36.9 % __________ n.m. = not meaningful (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, 2024 , 2023 and 2022 . Cruise EBIT (Loss)-Adjusted In the year ended December 31, 2024, EBIT (loss)-adjusted decreased primarily due to the restructuring actions taken in the year ended December 31, 2023 that resulted in a decrease in the development costs associated with Cruise's refocused operating strategy. Following the acquisition of the noncontrolling interests and subject to the approval of the Cruise Board of Directors, we expect that the plans to combine the Cruise and GM technical efforts to advance autonomous and assisted driving will reduce Cruise's costs going forward. GM Financial Years Ended December 31, 2024 vs. 2023 Change 2024 2023 2022 Amount % Total revenue $ 15,875 $ 14,225 $ 12,766 $ 1,650 11.6 % Provision for loan losses $ 1,029 $ 826 $ 654 $ 203 24.6 % EBT-adjusted $ 2,965 $ 2,985 $ 4,076 $ (20) (0.7) % Average debt outstanding (dollars in billions) $ 109.0 $ 100.4 $ 93.8 $ 8.6 8.6 % Effective rate of interest paid 5.5 % 4.7 % 3.1 % 0.8 % GM Financial Revenue In the year ended December 31, 2024, total revenue increased primarily due to: (1) increased finance charge income of $1.5 billion primarily due to an increase in the effective yield resulting from higher average interest rates on new loans and growth in the size of the portfolio; and (2) increased other income of $0.2 billion primarily due to higher investment income resulting from an increase in the average investment balance and growth in vehicle protection contracts. GM Financial EBT-Adjusted In the year ended December 31, 2024, earnings before income taxes-adjusted (EBT-adjusted) decreased primarily due to: (1) increased interest expense of $1.3 billion primarily due to an increased effective rate of interest on debt, resulting from higher benchmark interest rates on new issuances relative to maturing debt, as well as an increase in average debt outstanding; (2) increased provision for loan losses of $0.2 billion primarily due to increased loan origination volume and moderating credit performance and recovery rates; and (3) decreased equity income of $0.1 billion primarily due to lower earning asset levels at its joint ventures in China; partially offset by (4) increased finance charge income of $1.5 billion primarily due to an increase in the effective yield resulting from higher average interest rates on new loans and growth in the size of the portfolio; and (5) increased other income of $0.2 billion primarily due to higher investment income resulting from an increase in the average investment balance and growth in vehicle protection contracts. 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. We have substantial cash requirements going forward, which we plan to fund through our total available liquidity, cash flows from operating activities and additional liquidity measures, if determined to be necessary. Our known current material uses of cash include, among other possible demands: (1) capital spending and our investments in our battery cell manufacturing joint ventures of approximately $10.0 billion to $11.0 billion in 2025; (2) payments for engineering and product development activities , including the development of AV technology and software-enabled services; (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) dividend payments on our common stock that are declared by our Board of Directors; (6) payments to purchase shares of our 33 Table of Contents GENERAL MOTORS COMPANY AND SUBSIDIARIES common stock authorized by our Board of Directors; and (7) payments of emissions-related regulatory compliance costs. 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: (1) grow our business at an average target return on invested capital-adjusted (ROIC-adjusted) rate of 20% or greater; (2) maintain a strong investment-grade balance sheet, including a target average automotive cash balance of $18.0 billion; and (3) after the first two objectives are met, return available cash to shareholders. Our senior management evaluates our capital allocation program on an ongoing basis and recommends any modifications to the program to our Board of Directors not less than once annually. We continue to monitor and evaluate opportunities to strengthen our competitive position over the long term while maintaining a strong investment-grade balance sheet. These actions may include opportunistic payments to reduce our long-term obligations, as well as the possibility of acquisitions, dispositions and investments with joint venture partners, as well as strategic alliances that we believe would generate significant advantages and substantially strengthen our business. To support our transition to EVs, we anticipate making investments in suppliers or providing funding towards the execution of strategic, multi-year supply agreements to secure critical materials. In addition, we have entered, and plan to continue to enter, into offtake agreements that generally obligate us to purchase defined quantities of output. These arrangements could have a short-term adverse impact on our cash and increase our inventory. Our liquidity plans are subject to a number of risks and uncertainties, including those described in the "Forward-Looking Statements" section of this MD&A and Part I, Item 1A. Risk Factors, some of which are outside of our control. In November 2023, our Board of Directors increased the capacity under our previously announced share repurchase program by $10.0 billion to an aggregate of $11.4 billion and approved a $10.0 billion ASR program. In December 2023, pursuant to the agreements entered into in connection with the ASR, we advanced $10.0 billion and received approximately 215 million shares of common stock with a value of $6.8 billion, which were immediately retired. In the year ended December 31, 2024, we received and retired approximately 29 million additional shares upon settlement of the transactions contemplated under the ASR Agreements. The final number of shares received was based on the average of the daily volume-weighted average prices of our common stock during the term of the ASR Agreements, less a discount pursuant to the terms and conditions of the ASR Agreements. In June 2024, our Board of Directors approved a new share repurchase authorization to repurchase up to an additional $6.0 billion of our outstanding common stock. In the year ended December 31, 2024, in addition to shares received under the ASR program, we purchased approximately 140 million shares of our outstanding common stock for $7.1 billion. We have $0.3 billion in capacity remaining under our share repurchase program as of December 31, 2024, with no expiration date. During the year ended December 31, 2024, we paid dividends of $0.5 billion to holders of our common stock. 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. Such eliminations include, among other things, collections by Automotive on wholesale accounts receivables financed by dealers through GM Financial, payments between Automotive and GM Financial for accounts receivables transferred by Automotive to GM Financial, loans to Automotive and Cruise from GM Financial, dividends issued by GM Financial to Automotive, tax payments by GM Financial to Automotive and Automotive cash injections in Cruise. The presentation of Automotive liquidity, Cruise liquidity and GM Financial liquidity presented below includes the impact of cash transactions amongst the sectors that are ultimately eliminated in consolidation. Automotive Liquidity Total available liquidity includes cash, cash equivalents, marketable debt securities and funds available under credit facilities. The amount of available liquidity is subject to seasonal fluctuations and includes balances held by various business units and subsidiaries worldwide that are needed to fund their operations. We manage our liquidity primarily at our treasury centers as well as at certain of our significant consolidated overseas subsidiaries. Over 83% of our cash and marketable debt securities were managed within North America and at our regional treasury centers at December 31, 2024. We have used, and will continue to use, other methods including intercompany loans to utilize these funds across our global operations as needed. 34 Table of Contents GENERAL MOTORS COMPANY AND SUBSIDIARIES Our cash equivalents and marketable debt securities balances are primarily denominated in U.S. dollars and include investments in U.S. government and agency obligations, foreign government securities, time deposits, corporate debt securities and mortgage and asset-backed securities. Our investment guidelines, which we may change from time to time, prescribe certain minimum credit worthiness thresholds and limit our exposures to any particular sector, asset class, issuance or security type. The majority of our current investments in debt securities are with A/A2 or better rated issuers. In March 2024, we renewed our 364-day, $2.0 billion revolving credit facility allocated for the exclusive use of GM Financial, which now matures March 27, 2025. Interest rates on obligations under the renewed credit facility are based on Term SOFR. In March 2024, we terminated our unsecured 364-day delayed draw term loan credit agreement that permitted the Company to borrow up to $3.0 billion executed in November 2023, resulting in an insignificant loss. We use credit facilities as a mechanism to provide additional flexibility in managing our global liquidity. Our Automotive borrowing capacity under credit facilities totaled $14.3 billion at December 31, 2024, which consisted primarily of two credit facilities, and $17.1 billion at December 31, 2023, which consisted primarily of three 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 $0.5 billion and $0.7 billion at December 31, 2024 and 2023. If available capacity permits, GM Financial continues to have access to our automotive credit facilities. GM Financial did not have borrowings outstanding against any of these facilities at December 31, 2024 and 2023. We had intercompany loans from GM Financial of $0.3 billion and $0.2 billion at December 31, 2024 and 2023, which primarily consisted of commercial loans to dealers we consolidate. We did not have intercompany loans to GM Financial at December 31, 2024 and 2023. Refer to Note 5 to our consolidated financial statements for additional information. 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, 2024 and determined we are in compliance and expect to remain in compliance in the future. In December 2024, we exercised the make-whole provision on a portion of our $2.0 billion senior unsecured notes with a maturity date of October 2025, redeeming $750 million in aggregate principal amount. Upon settlement in December 2024, we recorded an insignificant early extinguishment of debt loss. GM Financial's Board of Directors declared and paid dividends on its common stock of $1.8 billion in the years ended December 31, 2024 and 2023 and $1.7 billion in the year ended December 31, 2022. Future dividends from GM Financial will depend on several factors including business and economic conditions, its financial condition, earnings, liquidity requirements and leverage ratio. The following table summarizes our Automotive available liquidity (dollars in billions): December 31, 2024 December 31, 2023 Automotive cash and cash equivalents $ 14.5 $ 12.2 Marketable debt securities 7.3 7.6 Automotive cash, cash equivalents and marketable debt securities 21.7 19.8 Available under credit facilities(a) 13.8 16.4 Total Automotive available liquidity $ 35.5 $ 36.3 __________ (a) We had letters of credit outstanding under our sub-facility of $0.5 billion and $0.7 billion at December 31, 2024 and 2023. 35 Table of Contents GENERAL MOTORS COMPANY AND SUBSIDIARIES The following table summarizes the changes in our Automotive available liquidity (dollars in billions): Year Ended December 31, 2024 Operating cash flow $ 23.9 Capital expenditures (10.7) Dividends paid and payments to purchase common stock (7.6) GM investment in Cruise (1.3) Payment of senior unsecured note (0.8) Investment in Ultium Cells Holdings LLC (0.7) Investment in Lithium Americas (0.3) Other non-operating (0.7) Decrease in available credit facilities (2.7) Total change in automotive available liquidity $ (0.8) Automotive Cash Flow (Dollars in billions) Years Ended December 31, 2024 vs. 2023 Change 2024 2023 2022 Operating Activities Net income $ 6.6 $ 10.1 $ 8.5 $ (3.5) Depreciation, amortization and impairment charges 6.5 6.8 6.3 (0.3) Pension and OPEB activities (1.4) (1.0) (2.0) (0.4) Working capital 1.5 (0.4) 0.5 1.9 Accrued and other liabilities and income taxes 6.3 4.1 3.1 2.2 Other(a) 4.4 1.2 2.7 3.2 Net automotive cash provided by (used in) operating activities(b) $ 23.9 $ 20.8 $ 19.1 $ 3.1 __________ (a) Includes $4.1 billion for the Automotive China JVs impairment and restructuring-related equity losses in the year ended December 31, 2024; $1.8 billion in dividends received from GM Financial in the years ended December 31, 2024 and 2023 and $1.7 billion in dividends received from GM Financial in the year ended December 31, 2022; partially offset by non-cash changes in other assets and liabilities. (b) Includes $8.2 billion, $4.8 billion and $6.7 billion in the years ended December 31, 2024, 2023 and 2022 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. 36 Table of Contents GENERAL MOTORS COMPANY AND SUBSIDIARIES Years Ended December 31, 2024 vs. 2023 Change 2024 2023 2022 Investing Activities Capital expenditures $ (10.7) $ (10.7) $ (9.0) $ — Acquisitions and liquidations of marketable securities, net 0.3 3.5 (3.9) (3.2) Other(a) (2.4) (1.5) (4.5) (0.9) Net automotive cash provided by (used in) investing activities(b) $ (12.8) $ (8.7) $ (17.5) $ (4.1) __________ (a) Includes $1.3 billion, $0.5 billion and $2.4 billion of GM's investment in Cruise in the years ended December 31, 2024, 2023 and 2022, which is inclusive of a $0.9 billion convertible note issued by Cruise to us in the year ended December 31, 2024; $0.7 billion of GM's investment in Ultium Cells Holdings LLC in the years ended December 31, 2024 and 2023 and $0.8 billion of GM's investment in Ultium Cells Holdings LLC in the year ended December 31, 2022; $0.3 billion of GM's investment in Lithium Americas in the years ended December 31, 2024 and 2023; $0.1 billion and $2.1 billion for the purchase of Cruise common and preferred shares from noncontrolling shareholders in the years ended December 31, 2024 and 2022; and $0.9 billion related to the sale of Stellantis N.V. (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 common and preferred shares from noncontrolling shareholders in 2024 and 2022 are reclassified to financing activities within the consolidated statements of cash flows. Years Ended December 31, 2024 vs. 2023 Change 2024 2023 2022 Financing Activities Net proceeds (payments) from short-term debt $ (0.7) $ (1.5) $ (1.4) $ 0.8 Issuance of senior notes — — 2.3 — Other(a) (7.8) (12.1) (3.3) 4.3 Net automotive cash provided by (used in) financing activities $ (8.5) $ (13.6) $ (2.5) $ 5.1 __________ (a) Includes $7.1 billion, $1.1 billion and $2.5 billion for payments to purchase common stock in the years ended December 31, 2024, 2023 and 2022; $0.5 billion for dividends paid in the years ended December 31, 2024 and 2023; $0.3 billion for dividends paid in the year ended December 31, 2022; and $10.0 billion in connection with the ASR in the year ended December 31, 2023. 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. For the year ended December 31, 2024, net automotive cash provided by operating activities under U.S. GAAP was $23.9 billion, capital expenditures were $10.7 billion and adjustments for management actions were $0.8 billion. For the year ended December 31, 2023, net automotive cash provided by operating activities under U.S. GAAP was $20.8 billion, capital expenditures were $10.7 billion and adjustments for management actions were $1.5 billion. 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 S&P. All four credit rating agencies currently rate our corporate credit at investment grade. The following table summarizes our credit ratings at January 16, 2025: Corporate Revolving Credit Facilities Senior Unsecured Outlook DBRS BBB (high) BBB (high) N/A Stable Fitch BBB BBB BBB Positive Moody's Investment Grade Baa2 Baa2 Stable S&P BBB BBB BBB Stable Fitch: Revised their outlook to Positive from Stable in October 2024. Cruise Liquidity Cruise available liquidity of $0.3 billion and $1.3 billion at December 31, 2024 and 2023 consists primarily of cash and cash equivalents. In June 2024, Cruise issued to us a convertible note in the amount of $0.9 billion. This note is convertible into certain Cruise equity interests. At December 31, 2024, Cruise had total borrowings of $0.4 billion with GM 37 Table of Contents GENERAL MOTORS COMPANY AND SUBSIDIARIES Financial under a multi-year credit agreement to fund the purchase of AVs from GM. Cruise available liquidity also excludes a multi-year framework agreement with us whereby Cruise can defer payments until June 2028 on up to $0.8 billion of invoices, which are related to engineering and capital spending incurred by us on behalf of Cruise, and an agreement with us whereby Cruise can defer reimbursing us for amounts we paid related to its restructuring actions that commenced in October 2023. At December 31, 2024, Cruise deferred $1.3 billion under these agreements. In December 2024, GM announced it will no longer fund Cruise's robotaxi development work given the considerable time and resources that would be needed to scale the business, along with an increasingly competitive robotaxi market. Refer to Note 18 to our consolidated financial statements for additional information related to Cruise's restructuring actions. The following table summarizes the changes in Cruise's available liquidity (dollars in billions): Year Ended December 31, 2024 Operating cash flow(a) $ (2.2) GM investment in Cruise 1.3 Other non-operating (0.1) Total change in Cruise available liquidity $ (1.0) __________ (a) Includes $0.1 billion cash outflows related to tendered Cruise Class B Common Shares classified as liabilities. Cruise Cash Flow (Dollars in billions) Years Ended December 31, 2024 vs. 2023 Change 2024 2023 2022 Net cash provided by (used in) operating activities $ (2.2) $ (1.9) $ (1.8) $ (0.3) Net cash provided by (used in) investing activities(a) $ — $ 1.3 $ — $ (1.4) Net cash provided by (used in) financing activities(b) $ 1.2 $ 0.4 $ 1.8 $ 0.8 __________ (a) Includes $1.4 billion of net proceeds from the liquidation of marketable securities in the year ended December 31, 2023. (b) Includes $1.3 billion, $0.5 billion and $2.4 billion in the years ended December 31, 2024, 2023 and 2022 related to investments from GM which are eliminated within the consolidated statements of cash flows. Following the acquisition of the noncontrolling interests and subject to the approval of the Cruise Board of Directors, we expect that the plans to combine the Cruise and GM technical efforts to advance autonomous and assisted driving will significantly reduce Cruise's liquidity needs going forward. Automotive Financing – GM Financial Liquidity GM Financial's primary sources of cash are finance charge income, leasing income and proceeds from the sale of terminated leased vehicles, net distributions from credit facilities, securitizations, secured and unsecured borrowings and collections and recoveries on finance receivables. GM Financial's primary uses of cash are purchases and funding of finance receivables and leased vehicles, repayment or repurchases of secured and unsecured debt, funding credit enhancement requirements in connection with securitizations and secured credit facilities, interest costs, operating expenses, income taxes and dividend payments. GM Financial continues to monitor and evaluate opportunities to optimize its liquidity position and the mix of its debt between secured and unsecured debt. The following table summarizes GM Financial's available liquidity (dollars in billions): December 31, 2024 December 31, 2023 Cash and cash equivalents $ 5.1 $ 5.3 Borrowing capacity on unpledged eligible assets 21.5 21.9 Borrowing capacity on committed unsecured lines of credit 0.7 0.7 Borrowing capacity on revolving credit facility, exclusive to GM Financial 2.0 2.0 Total GM Financial available liquidity $ 29.3 $ 29.9 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. At December 31, 2024, available liquidity exceeded GM Financial's liquidity targets. 38 Table of Contents GENERAL MOTORS COMPANY AND SUBSIDIARIES 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, 2024 and 2023. Refer to the "Automotive Liquidity" section of this MD&A for additional details. 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. At December 31, 2024, secured, committed unsecured and uncommitted unsecured credit facilities totaled $27.1 billion, $0.7 billion and $2.1 billion with advances outstanding of $5.4 billion, an insignificant amount and $2.1 billion. GM Financial Cash Flow (Dollars in billions) Years Ended December 31, 2024 vs. 2023 Change 2024 2023 2022 Net cash provided by (used in) operating activities $ 6.4 $ 6.7 $ 5.5 $ (0.3) Net cash provided by (used in) investing activities(a) $ (15.4) $ (10.9) $ (10.0) $ (4.5) Net cash provided by (used in) financing activities(b) $ 8.9 $ 5.7 $ 4.0 $ 3.2 __________ (a) Includes $6.4 billion, $3.0 billion and $5.0 billion in the years ended December 31, 2024, 2023 and 2022 for purchases of, and collections on, wholesale finance receivables from GM which are eliminated within the consolidated statements of cash flows. (b) Includes $1.8 billion in the years ended December 31, 2024 and 2023 and $1.7 billion in the year ended December 31, 2022 for dividends to GM which are eliminated within the consolidated statements of cash flows. In the year ended December 31, 2024, net cash provided by operating activities decreased primarily due to an increase in interest paid, a net decrease in cash provided by counterparty derivative collateral posting activities and an increase in acquisition costs related to vehicle protection contracts, partially offset by an increase in finance charge income. Critical Accounting Estimates The consolidated financial statements are prepared in conformity with U.S. GAAP, which requires the use of estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses in the periods presented. We believe the accounting estimates employed are appropriate and the resulting balances are reasonable; however, due to the inherent uncertainties in developing estimates, actual results could differ from the original estimates, requiring adjustments to these balances in future periods. Refer to Note 2 to our consolidated financial statements for our significant accounting policies related to our critical accounting estimates. Product Warranty and Recall Campaigns The estimates related to product warranties are established using historical information on the nature, frequency and average cost of claims of each vehicle line or each model year of the vehicle line and assumptions about future activity and events. When little or no claims experience exists for a model year or a vehicle line, the estimate is based on comparable models. We accrue the costs related to product warranty at the time of vehicle sale and we accrue the estimated cost of recall campaigns when they are probable and estimable. The estimates related to recall campaigns accrued at the time of vehicle sale are established by applying a paid loss approach that considers the number of historical recall campaigns and the estimated cost for each recall campaign. These estimates consider the nature, frequency and magnitude of historical recall campaigns, and use key assumptions including the number of historical periods and the weighting of historical data in the reserve studies. Costs associated with recall campaigns not accrued at the time of vehicle sale are estimated based on the estimated cost of repairs and the estimated vehicles to be repaired. Depending on part availability and time to complete repairs we may, from time to time, offer courtesy transportation at no cost to our customers. These estimates are re-evaluated on an ongoing basis and based on the best available information. Revisions are made when necessary based on changes in these factors. The estimated amount accrued for recall campaigns at the time of vehicle sale is most sensitive to the estimated number of recall events, the number of vehicles per recall event, the assumed number of vehicles that will be brought in by customers for repair (take rate) and the cost per vehicle for each recall event. The estimated cost of a recall campaign that is accrued on an individual basis is most sensitive to our estimated assumed take rate that is primarily developed based on our historical take rate 39 Table of Contents GENERAL MOTORS COMPANY AND SUBSIDIARIES experience. A 10% increase in the estimated take rate for all recall campaigns would increase the estimated cost by approximately $0.4 billion. Actual experience could differ from the amounts estimated requiring adjustments to these liabilities in future periods. Due to the uncertainty and potential volatility of the factors contributing to developing estimates, changes in our assumptions could materially affect our results of operations. Sales Incentives The estimated effect of sales incentives offered to dealers and end customers is recorded as a reduction of Automotive net sales and revenue at the time of sale. There may be numerous types of incentives available at any particular time. Incentive programs are generally specific to brand, model or sales region and are for specified time periods, which may be extended. Significant factors used in estimating the cost of incentives include type of program, forecasted sales volume, product mix, and the rate of customer acceptance of incentive programs, all of which are estimated based on historical experience and assumptions concerning future customer behavior and market conditions. 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 approximately $0.4 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. The allowance for loan losses on retail finance receivables reflects net credit losses expected to be incurred over the remaining life of the retail finance receivables, which have a weighted-average remaining life of approximately two years. GM Financial forecasts net credit losses based on relevant information about past events, current conditions and forecast economic performance. GM Financial believes that the allowance is adequate to cover expected credit losses on the retail finance receivables; however, because the allowance for loan losses is based on estimates, there can be no assurance that the ultimate charge-off amount will not exceed such estimates or that our credit loss assumptions will not increase. GM Financial incorporates its outlook on forecast recovery rates and overall economic performance in its allowance estimate. Each 5% relative decrease/increase in the forecast recovery rates would increase/decrease the allowance for loan losses by $0.1 billion. At December 31, 2024, the weightings applied to the economic forecast scenarios considered resulted in an allowance for loan losses on the U.S. retail finance receivables portfolio of $2.1 billion. If the forecast economic conditions were based entirely on the weakest scenario considered, the allowance for loan losses would increase by $0.2 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 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. Valuation of GM Financial Equipment on Operating Lease Assets and Residuals GM Financial has investments in leased vehicles recorded as operating leases. Each leased asset in the portfolio represents a vehicle that GM Financial owns and has leased to a customer. 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 one 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. During the term of a lease, GM Financial periodically evaluates the estimated residual value and may adjust the value downward, which increases the prospective depreciation, or upward (limited to the contractual residual value), which decreases the prospective depreciation. 40 Table of Contents GENERAL MOTORS COMPANY AND SUBSIDIARIES 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 the inception of the lease. Realization of the residual values is dependent on GM Financial's future ability to market the vehicles under prevailing market conditions. At December 31, 2024, the estimated residual value of GM Financial's leased vehicles was $23.5 billion. Depreciation reduces the carrying value of each leased asset in GM Financial's operating lease portfolio over time from its original acquisition value to its expected residual value at the end of the lease term. If used vehicle prices weaken compared to estimates, GM Financial would increase depreciation expense and/or record an impairment charge on the lease portfolio. If an impairment exists, GM Financial would determine any shortfall in recoverability of the leased vehicle asset groups by year, make and model. Recoverability is calculated as the excess of: (1) the sum of remaining lease payments plus estimated residual value; over (2) leased vehicles, net less deferred revenue. Alternatively, if used vehicle prices outperform GM Financial's latest estimates, it may record gains on sales of off-lease vehicles and/or decreased depreciation expense. The following table illustrates the effect of a 1% relative change in the estimated residual values at December 31, 2024, which could increase or decrease depreciation expense over the remaining term of the leased vehicle portfolio, holding all other assumptions constant (dollars in millions): Impact to Depreciation Expense 2025 $ 158 2026 60 2027 16 2028 and thereafter 1 Total $ 235 Changes to residual values are rarely simultaneous across all maturities and segments, and also may impact return rates. 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 material impairment indicators were present at December 31, 2024 or 2023. 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. Our pension obligations include Korean statutory pension payments that are valued on a walk away basis. The expected long-term rate of return on U.S. plan assets that is utilized in determining pension expense is derived from periodic studies, which include a review of asset allocation strategies, anticipated future long-term performance of individual asset classes, risks using standard deviations and correlations of returns among the asset classes that comprise the plans' asset mix. While the studies give appropriate consideration to recent plan performance and historical returns, the assumptions are primarily long-term, prospective rates of return. In December 2024, an investment policy study was completed for the U.S. pension plans. As a result, the weighted-average long-term rate of Return on Assets (ROA) increased to 6.5% at December 31, 2024 from 6.3% at December 31, 2023. 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. plans. 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. plans using a cash flow matching approach, which uses projected cash flows matched to spot rates along a high quality corporate bond yield curve to determine the weighted-average discount rate for the calculation of the present value of cash flows. We apply the individual annual yield curve rates instead of the assumed discount rate to determine the service cost and interest cost, which more specifically links the cash flows related to service cost and interest cost to bonds maturing in their year of payment. Significant differences in actual experience or significant changes in assumptions may materially affect the pension obligations. The effects of actual results differing from assumptions and the changing of assumptions are included in 41 Table of Contents GENERAL MOTORS COMPANY AND SUBSIDIARIES unamortized net actuarial gains and losses that are subject to amortization to pension expense over future periods. The unamortized pre-tax actuarial loss on our pension plans was $6.2 billion and $5.9 billion at December 31, 2024 and 2023. The year-over-year change is primarily due to lower than expected asset returns partially offset by an increase in discount rates. The funded status of the U.S. pension plans improved in the year ended December 31, 2024 to $1.8 billion underfunded status from $2.2 billion underfunded status primarily due to: (1) favorable effect of an increase in discount rates of $1.4 billion; (2) contributions of $0.5 billion; and (3) favorable effect of actual return on plan assets of $0.5 billion; partially offset by (4) service and interest costs of $2.2 billion. The following table illustrates the sensitivity to a change in certain assumptions for the pension plans, holding all other assumptions constant: U.S. Plans(a) Non-U.S. Plans(a) Effect on 2025 Pension Expense Effect on December 31, 2024 PBO Effect on 2025 Pension Expense Effect on December 31, 2024 PBO 25 basis point decrease in discount rate -$50 +$767 -$4 +$256 25 basis point increase in discount rate +$47 -$741 +$7 -$245 25 basis point decrease in expected rate of ROA +$99 N/A +$23 N/A 25 basis point increase in expected rate of ROA -$99 N/A -$23 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. Refer to Note 15 to our consolidated financial statements for additional information on pension contributions, investment strategies, assumptions, the change in benefit obligations and related plan assets, pension funding requirements and future net benefit payments. Refer to Note 2 to our consolidated financial statements for a discussion of the inputs used to determine fair value for each significant asset class or category. Valuation of Deferred Tax Assets The ability to realize deferred tax assets depends on the ability to generate sufficient taxable income within the carryback or carryforward periods provided for in the tax law for each applicable tax jurisdiction. The assessment regarding whether a valuation allowance is required or should be adjusted is based on an evaluation of possible sources of taxable income and also considers all available positive and negative evidence factors. Our accounting for the valuation of deferred tax assets represents our best estimate of future events. 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. At December 31, 2024, valuation allowances against deferred tax assets were $6.5 billion. Refer to Note 17 to our consolidated financial statements for additional information on the composition of these valuation allowances. 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: EBIT-adjusted, presented net of noncontrolling interests; EBT-adjusted for our GM Financial segment; EPS-diluted-adjusted; ETR-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. 42 Table of Contents GENERAL MOTORS COMPANY AND SUBSIDIARIES 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. 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 (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. 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 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. 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 (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. We define ROIC-adjusted as EBIT-adjusted for the trailing four quarters divided by ROIC-adjusted average net assets, which is considered to be the average equity balances adjusted for average automotive debt and interest liabilities, exclusive of finance leases; average automotive net pension and OPEB liabilities; and average automotive net income tax assets during the same period. 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. 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. 43 Table of Contents 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, 2024 2023 2022 Net income attributable to stockholders $ 6,008 $ 10,127 $ 9,934 Income tax expense 2,556 563 1,888 Automotive interest expense 846 911 987 Automotive interest income (967) (1,109) (460) Adjustments China JV restructuring actions(a) 4,010 — — Cruise restructuring(b) 1,103 478 — Buick dealer strategy(c) 964 569 511 Restructuring actions(d) 200 — — GMI plant wind down(e) 150 — — Headquarters relocation(f) 64 — — Voluntary separation program(g) — 1,035 — GM Korea wage litigation(h) — (106) — India asset sales(i) — (111) — Cruise compensation modifications(j) — — 1,057 Russia exit(k) — — 657 Patent royalty matters(l) — — (100) Total adjustments 6,491 1,865 2,125 EBIT-adjusted $ 14,934 $ 12,357 $ 14,474 __________ (a) These adjustments were excluded because they relate to the other-than-temporary impairment and our portion of restructuring charges recorded in equity earnings associated with our restructuring actions of Automotive China JVs. (b) These adjustments were excluded because they relate to restructuring charges resulting from the plan to combine the Cruise and GM technical efforts to advance autonomous and assisted driving, the indefinite delay of the Cruise Origin and the voluntarily pausing in 2023 of Cruise's driverless, supervised and manual AV operations in the U.S. The adjustments primarily consist of non-cash restructuring charges, supplier-related charges and employee separation costs. (c) 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. (d) These adjustments were excluded because they relate to employee separation charges primarily in North America. (e) These adjustments were excluded because they relate to the wind down of our manufacturing operations in Colombia and Ecuador. (f) These adjustments were excluded because they relate to the GM headquarters relocation, primarily consisting of accelerated depreciation. (g) 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. (h) These adjustments were excluded because they relate to the partial resolution of subcontractor matters in Korea. (i) These adjustments were excluded because they relate to an asset sale resulting from our strategic decision in 2020 to exit India. (j) This adjustment was excluded because it relates to the one-time modification of Cruise stock incentive awards. (k) 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. (l) 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. 44 Table of Contents 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, 2024 2023 2022 Amount Per Share Amount Per Share Amount Per Share Diluted earnings per common share $ 7,189 $ 6.37 $ 10,022 $ 7.32 $ 8,915 $ 6.13 Adjustments(a) 6,491 5.75 1,865 1.36 2,125 1.46 Tax effect on adjustments(b) (477) (0.42) (504) (0.37) (423) (0.29) Tax adjustments(c) — — (870) (0.64) (482) (0.33) Return to (return from) preferred shareholders(d) (1,239) (1.10) — — 909 0.63 EPS-diluted-adjusted $ 11,963 $ 10.60 $ 10,513 $ 7.68 $ 11,044 $ 7.59 __________ (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 return to (return from) the preferred shareholders related to the redemption of Cruise preferred shares from noncontrolling interest holders in the years ended December 31, 2024 and 2022. The following table reconciles our effective tax rate under U.S. GAAP to ETR-adjusted: Years Ended December 31, 2024 2023 2022 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 $ 8,519 $ 2,556 30.0 % $ 10,403 $ 563 5.4 % $ 11,597 $ 1,888 16.3 % Adjustments(a) 6,564 477 1,916 504 2,221 423 Tax adjustments(b) — 870 482 ETR-adjusted $ 15,083 $ 3,033 20.1 % $ 12,319 $ 1,937 15.7 % $ 13,818 $ 2,793 20.2 % __________ (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, 2024, 2023 and 2022. 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, 2024 2023 2022 Net income attributable to stockholders $ 6.0 $ 10.1 $ 9.9 Average equity(a) $ 68.9 $ 72.0 $ 66.6 ROE 8.7 % 14.1 % 14.9 % __________ (a) Includes equity of noncontrolling interests where the corresponding earnings (loss) are included in Net income attributable to stockholders. 45 Table of Contents GENERAL MOTORS COMPANY AND SUBSIDIARIES The following table summarizes the calculation of ROIC-adjusted (dollars in billions): Years Ended December 31, 2024 2023 2022 EBIT-adjusted(a) $ 14.9 $ 12.4 $ 14.5 Average equity(b) $ 68.9 $ 72.0 $ 66.6 Add: Average automotive debt and interest liabilities (excluding finance leases) 16.1 16.2 17.6 Add: Average automotive net pension and OPEB liability 9.4 8.1 9.4 Less: Average automotive net income tax asset (22.7) (21.1) (21.2) ROIC-adjusted average net assets $ 71.8 $ 75.2 $ 72.3 ROIC-adjusted 20.8 % 16.4 % 20.0 % __________ (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. 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. federal securities laws. Forward-looking statements are any statements other than statements of historical fact. Forward-looking statements represent our current judgment about possible future events and are often identified by words like “aim,” “anticipate,” “appears,” “approximately,” “believe,” “continue,” “could,” “designed,” “effect,” “estimate,” “evaluate,” “expect,” “forecast,” “goal,” “initiative,” “intend,” “may,” “objective,” “outlook,” “plan,” “potential,” “priorities,” “project,” “pursue,” “seek,” “should,” “target,” “when,” “will,” “would,” or the negative of any of those words or similar expressions. In making these statements, we rely on assumptions and analysis based on our experience and perception of historical trends, current conditions and expected future developments as well as other factors we consider appropriate under the circumstances. We believe these judgments are reasonable, but these statements are not guarantees of any future events or financial results, and our actual results may differ materially due to a variety of important factors, many of which are beyond our control. These factors, which may be revised or supplemented in subsequent reports we file with 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 needs and preferences; (2) our ability to attract and retain talented and highly skilled employees; (3) our ability to timely fund and introduce new and improved vehicle models, including EVs, that are able to attract a sufficient number of consumers; (4) our ability to profitably deliver a strategic portfolio of EVs; (5) our long-term strategy is dependent on consumer adoptions of EVs; (6) the success of our current line of ICE vehicles, particularly our full-size SUVs and full-size pickup trucks; (7) 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; (8) the unique technological, operational, regulatory and competitive risks related to our recently announced plans to refocus our AV strategy on personal vehicles; (9) risks associated with climate change, including increased regulation of GHG emissions, our transition to EVs and the potential increased impacts of severe weather events; (10) global automobile market sales volume, which can be volatile; (11) inflationary pressures and persistently high prices and uncertain availability of raw materials and commodities used by us and our suppliers, and instability in logistics and related costs; (12) our business in China, which is subject to unique operational, competitive, regulatory and economic risks; (13) 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; (14) the international scale and footprint of our operations, which expose 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. 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; (15) any significant disruption, including any work stoppages, at any of our manufacturing facilities; (16) the ability of our suppliers to deliver parts, systems and components without disruption and at such times to allow us to meet production schedules; (17) pandemics, epidemics, disease outbreaks and other public health crises; (18) the possibility that competitors may independently develop products and services similar to ours, or that our intellectual property 46 Table of Contents GENERAL MOTORS COMPANY AND SUBSIDIARIES rights are not sufficient to prevent competitors from developing or selling those products or services; (19) our ability to manage risks related to security breaches, cyberattacks and other disruptions to our information technology systems and networked products, including connected vehicles; (20) our ability to manage security breaches and other disruptions to our in-vehicle systems; (21) 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; (22) our ability to comply with extensive laws, regulations and policies applicable to our operations and products, including those relating to fuel economy, emissions and AVs; (23) costs and risks associated with litigation and government investigations; (24) the costs and effect on our reputation of product safety recalls and alleged defects in products and services; (25) any additional tax expense or exposure or failure to fully realize available tax incentives; (26) our continued ability to develop captive financing capability through GM Financial; and (27) any significant increase in our pension funding requirements. For a further discussion of these and other risks and uncertainties, refer to Part I, Item 1A. Risk Factors. We caution readers not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update publicly or otherwise revise any forward-looking statements, whether as a result of new information, future events or other factors, except where we are expressly required to do so by law. * * * * * * *