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GMHE REPORTS FOURTH QUARTER EARNINGS

 LOS ANGELES, Feb. 10 /PRNewswire/ -- GM Hughes Electronics Corp. (GMHE) reported fourth quarter earnings, prior to purchase accounting adjustments related to General Motors' acquisition of Hughes Aircraft Co. of $234.8 million, or $0.59 per share of GM class H common stock. Excluding the unfavorable ongoing effect of an accounting change related to retiree health-care benefits (SFAS No. 106) of $12.1 million, fourth quarter earnings were $246.9 million, or $0.61 per share.
 Operating results for GMHE for the full year of 1992 were a loss of $921.6 million, or $2.29 per share. Before adjustments for the unfavorable effects of a previously announced restructuring charge ($749.4 million), the accounting change related to revenue recognition for certain commercial businesses ($40.0 million), and the one-time ($832.1 million) and ongoing ($48.2 million) effects related to the change in accounting for retiree health-care benefits, earnings for 1992 were $748.1 million, or $1.87 per share. These results, when compared to per share earnings for 1991 excluding accounting changes, represent a decline of 4.7 percent ($0.61 vs. $0.64) for the fourth quarter and an increase of 48.4 percent ($1.87 vs. $1.26) for the calendar year.
 Revenues for the fourth quarter were $3.46 billion, a 10.0 percent increase over fourth quarter 1991, and $12.30 billion for calendar year 1992, a 6.6 percent increase over the prior year.
 Operating profit before the Hughes purchase accounting adjustments, the restructuring charge and the ongoing effect of SFAS No. 106, was $411.3 million for the fourth quarter and $1.12 billion for the full year 1992. Operating margins on that basis improved to 9.1 percent for 1992, compared with 6.9 percent during 1991.
 GMHE Chairman and Chief Executive Officer C. Michael Armstrong noted that 1992 operating results reflect improvements in each of GMHE's four business segments. Armstrong stated that increased revenues resulted largely from continued growth in GMHE-supplied automotive electronics, the acquisition of General Dynamics' missile business and increased sales of commercial satellites and related telecommunications equipment and services. Armstrong further commented that the improved operating margins reflect the results of ongoing efforts to reduce costs across all of the company's businesses.
 "GMHE's revenue and earnings improvements reflect the initial success of our efforts to build shareholder value by re-establishing GMHE's growth and improving profitability," Armstrong said. "Our company successfully met significant challenges in 1992 and we believe GMHE is well-positioned in each of its businesses for continued growth in 1993."
 GMHE Segments: Fourth Quarter and Calendar Year Highlights
 Automotive Electronics
 Financial Review:
 Revenues for the quarter were $1,082 million, up slightly from the $1,055 million for the same period in 1991. The increase resulted from an increase in GMHE-supplied electronic content in GM vehicles produced in North America, from $749 in the fourth quarter of 1991 to $784 in the fourth quarter of 1992, which largely offset a 5.7 percent decline in GM's production of those vehicles, and increased sales of automotive electronics to international and non-GM customers. Operating profit of $167 million, excluding the ongoing effect of SFAS No. 106, was up 14.4 percent over the same period last year, reflecting continued cost reductions and improved performance in automotive electronics manufacturing.
 For the full year of 1992, revenues were $3,978 million, up 8.7 percent from 1991 levels. This increase was attributed to a 2 percent increase in GM North American vehicle production, coupled with a 6 percent increase in GMHE-suppled average electronic content to $760 per GM North American-produced vehicle from $717 in 1991. Also contributing to increased revenues were international and non-GM automotive electronics sales which increased during the year to $484 million, or 15 percent, over 1991. The 1992 operating profit was $516 million, excluding the ongoing effect of SFAS No. 106, an increase of $243 million. The significant increase included the benefits of higher vehicle volumes, increased electronic content per vehicle, and continuing stringent cost controls, which yielded 9 percent in cost savings.
 Fourth Quarter Business Highlights:
 -- Gary W. Dickinson was appointed executive vice president of GMHE and president and chief executive officer of Delco Electronics Corp. He succeeded Donald J. Almquist, who elected to retire after a career of 41 years with General Motors and GMHE.
 -- Indiana became the first state to approve GMHE's Forewarn, an electronic detection system for school buses. Forewarn alerts school bus drivers if moving objects are in certain areas in front of, to the side of, or underneath the bus whenever the stop arm is extended and the bus is stopped.
 -- The use of Head-Up Display technology, developed for use in military aircraft, was demonstrated in police cars at the International Association of Chiefs of Police Conference. The system provides officers with crucial information from a police vehicle's computer or mobile data terminal on a combiner mounted on the windshield where the officers can read it without taking their eyes off the road.
 Telecommunications and Space
 Financial Review:
 Revenues for the fourth quarter were $582 million, a 3.3 percent decrease from the same period in 1991, due primarily to declining government program revenues. Operating profit for the quarter was $101 million, excluding the ongoing effect of SFAS No. 106, an increase of 3.6 percent over the comparable period in 1991. This improvement was due largely to improved efficiency in the production of HS-601 satellites.
 Revenues for the full year were $2,206 million, a $358 million, or a 19.4 percent increase over 1991. The increase primarily reflects increased sales of satellites to commercial customers worldwide and the U.S. Navy, higher revenues from satellite transponder sales and operations of GMHE's fleet of Galaxy spacecraft and increased sales of private business networks, which were partially offset by a reduction in lease revenues from a Leasat satellite that was purchased by the U.S. Navy during the year. Excluding the restructuring charge and the ongoing effect of SFAS No. 106, operating profit for 1992 increased to $261 million, a 12.7 percent increase over 1991.
 Fourth Quarter Business Highlights:
 -- Societe Europeenne des Satellites selected GMHE to provide an HS-601 satellite, the third 601 to be ordered by the Luxembourg-based company, for television broadcasting throughout Europe.
 -- GMHE's Galaxy VII communications satellite, the first company- owned and operated HS-601 to go into service, was launched on an Ariane rocket from French Guiana. The spacecraft will provide service to broadcast-television companies and business networks in the United States.
 -- DirecTv, a subsidiary of GMHE, passed a major milestone in its development of direct-to-home broadcasting when it successfully demonstrated hardware that will be used to provide compressed digital signal processing. The proof-of-concept test for DirecTv was completed more than one year prior to the planned start of service.
 Defense Electronics
 Financial Review:
 Fourth quarter revenues were $1,623 million, a 24.1 percent increase from the same quarter of the prior year. The increase was principally because of the missile business acquired from General Dynamics. Operating profit for the period was $126 million, excluding the ongoing effect of SFAS No. 106, a 13.8 percent decrease from the fourth quarter of 1991. The operating profit decline was largely attributable to non-recurring items that had a favorable effect in 1991.
 Revenues for 1992 were $5,353 million, compared with $5,325 million for the prior year, and included $435 million of revenues from the acquired missile business. Operating profit for 1992 was $409 million, excluding the restructuring charge and the ongoing effect of SFAS No. 106, an increase of 8.1 percent from the prior year. The improved operating performance largely reflects the earnings of the acquired missile business.
 Fourth Quarter Business Highlights:
 -- GMHE was part of a TRW-led team that won a $223.5 million contract to provide a sensor payload and on-board signal and data processing system for the demonstration/validation phase of Brilliant Eyes, a constellation of lightweight satellites that will perform surveillance, tracking and discrimination of ballistic missiles throughout their flight trajectory in support of the Strategic Defense Initiative Organization (SDIO).
 -- Kuwait selected GMHE for a $92 million contract to build a ground-based Preliminary Early Warning System that will enable military commanders to detect aircraft entering the nation's airspace and keep track of their own aircraft.
 -- GMHE won a U.S. Navy competition to become the sole producer of Phalanx close-in weapon systems. The initial award was for 15 systems valued at $64 million, with options for additional systems that could bring the total value to $190 million over three years.
 -- Deliveries were begun for a new M1A2 Abrams sight stabilization system that will enable tank gunners to shoot on-the- move with improved accuracy, and the newest version of the Tube- Launched, Optically Tracked, Wire-Guided (TOW) missile entered service with the U.S. Army. TOW 2B is the first TOW to fire down on a target's more vulnerable top section instead of flying into the more heavily armored side of the target.
 Commercial Technologies
 Financial Review:
 Revenues for the fourth quarter were $177 million, a decline of 3.2 percent from the like period of 1991. A $22 million operating profit was posted during the quarter, excluding the ongoing effect of SFAS No. 106, compared with a $24 million operating profit in the fourth quarter of 1991. Revenues for 1992, including other income totaling $63 million related to the settlement of certain patent litigation and a gain recorded as a result of the formation of the Hughes-JVC Technology joint venture, were $761 million, 7.6 percent increase over 1991. Operating profit, excluding the restructuring charge, the ongoing effect of SFAS No. 106, and other income was a $43 million loss in 1992, compared to a $58 million loss in 1991. The reduced loss reflects actions taken to downsize and improve the profitability of the commercial airline simulator business, which continues to experience weak market demand. In addition, the electronic components business continues to be adversely affected by the weak economy.
 Fourth Quarter Business Highlights:
 -- A $120 million contract to provide the key sensing instruments for the Landsat 7 earth resources monitoring satellite was received from the U.S. Air Force and NASA. Landsat images are used for agricultural, forest, water and mineral resource management; mapping and land-use planning, and environmental monitoring.
 -- Continuing to expand its training and simulation capabilities into leisure applications, the company introduced MIRAGE, a multiseat capsule that enables players to travel through and interact with a simulated world filled with adventure and, for the first time ever in a simulation-based attraction, to compete against each other.
 -- A major milestone was passed in the development of Canada's Automated Air Traffic System when GMHE received approval for final development of more than 1 million lines of software code that will be at the heart of the air traffic control system.
 GM HUGHES ELECTRONICS CORP.
 Statement of Consolidated Income and
 Available Separate Consolidated Net Income
 (Dollars in millions except per share amounts)
 Fourth quarter Years ended Dec. 31,
 1992 1991 1992 1991
 Revenues
 Net sales
 Outside customers $2,397.4 $2,090.2 $8,267.6 $7,906.9
 General Motors and
 affiliates 1,054.9 1,064.8 3,901.4 3,573.6
 Other income-net 12.0 (6.9) 128.1 60.1
 Total revenues 3,464.3 3,148.1 12,297.1 11,540.6
 Costs and expenses
 Cost of sales and other
 operating charges,
 exclusive of items
 listed below 2,599.1 2,276.1 9,326.5 8,933.1
 Selling, general and
 administrative
 expenses 339.7 333.8 1,312.6 1,246.1
 Depreciation and
 amortization 121.9 141.4 487.1 501.1
 Amortization of GM
 purchase accounting
 adjustments related
 to Hughes 31.0 31.1 123.8 123.9
 Interest expense 21.1 12.8 60.6 65.1
 Special provision for
 restructuring --- --- 1,237.0(A) ---
 Total costs and
 expenses 3,112.8 2,795.2 12,547.6 10,869.3
 Income (loss) before
 income taxes 351.5 352.9 (250.5) 671.3
 United States, foreign
 and other income
 taxes (credit) 147.7 128.3 (77.2) 290.2
 Income (loss) before
 cumulative effect of
 accounting changes 203.8 224.6 (173.3) 381.1
 Cumulative effect of
 accounting changes --- --- (872.1)(B) 54.4(C)
 Net income (loss) 203.8 224.6 (1,045.4) 435.5
 Adjustments to exclude
 the effect of GM
 purchase accounting
 adjustments related
 to Hughes 31.0 31.1 123.8 123.9
 Earnings (loss) used
 for computation of
 available separate
 consolidated net
 income (loss) $234.8 $255.7 ($921.6) $559.4
 Available separate
 consolidated net
 income (loss) $54.5 $45.8 ($142.3) $104.6
 Earnings (loss)
 attributable to
 General Motors Class H
 common stock on a per
 share basis
 Before cumulative
 effect of
 accounting changes $0.59 $0.64 ($0.11) $1.26
 Cumulative effect of
 accounting changes --- --- (2.18) 0.13
 Net earnings (loss)
 attributable to
 General Motors Class H
 common stock $0.59 $0.64 ($2.29) $1.39
 (A) The one-time after-tax restructuring charge of $749.4 million, or $1.87 per share of GM Class H common stock, is primarily attributable to redundant facilities and related employment costs at Hughes.
 (B) Effective Jan. 1, 1992, the corporation adopted Statement of Financial Accounting Standards (SFAS) No. 106, Employers' Accounting for Postretirement Benefits Other Than Pensions ($832.1 million), and Hughes changed its revenue recognition policy for certain commercial businesses from the percentage-of-completion method to the units-of- delivery method ($40.0 million).
 (C) Effective Jan. 1, 1991, accounting procedures at Delco Electronics were changed to include in inventory general purpose spare parts previously charged directly to expense, $17.0 million, and the corporation adopted SFAS No. 109, Accounting for Income Taxes, $37.4 million.
 CONSOLIDATED BALANCE SHEET
 (Dollars in millions except per share amount)
 Dec. 31,
 1992 1991
 Assets
 Current assets
 Cash and cash equivalents $702.7 $348.3
 Accounts and notes receivable
 Trade receivables (less allowances) 795.3 705.0
 General Motors and affiliates 207.6 375.6
 Contracts in process, less advances
 and progress payments
 of $4,026.4 and $2,500.9 2,456.4 2,283.1
 Inventories (less allowances) 1,199.6 1,033.8
 Prepaid expenses (includes deferred
 income taxes of $87.2 million in 1992) 185.2 88.0
 Total current assets 5,546.8 4,833.8
 Net equipment on operating leases 582.7 466.4
 Property - net 2,866.9 2,943.1
 Intangible assets 3,620.8 3,766.9
 Investments and other assets -
 principally at cost (less allowances) 1,403.3 920.6
 Total assets $14,020.5 $12,930.8
 Liabilities and Stockholder's Equity
 Current liabilities
 Accounts payable
 Outside $718.0 $548.4
 General Motors and affiliates 89.6 106.7
 Advances on contracts 585.7 493.2
 Notes and loans payable 267.2 703.2
 United States, foreign and
 other income taxes, including
 deferred amounts of $7.7 and $100.2 79.7 226.7
 Accrued liabilities 2,114.2 1,206.8
 Total current liabilities 3,854.4 3,285.0
 Long-term debt and capitalized leases 711.0 147.1
 Liability for postretirement benefits 1,352.3 ---
 Other liabilities, deferred income taxes,
 and deferred credits 1,287.8 1,280.5
 Stockholder's Equity
 Capital stock (outstanding,
 1,000 shares, $0.10 par value)
 and additional paid-in capital 6,314.7 6,365.9
 Net income retained for use in the business 628.4 1,961.8
 Subtotal 6,943.1 8,327.7
 Minimum pension liability adjustment (104.3) (101.8)
 Accumulated foreign currency
 translation adjustmen ? (23.8) (7.7)
 Total stockholders' equity 6,815.0 8,218.2
 Total liabilities and stockholders'
 equity $14,020.5 $12,930.8
 Certain amounts for 1991 have been reclassified to conform with 1992 classifications.
 Holders of GM Class H common stock have no direct rights in the equity or assets of GMHE, but rather have rights in the equity and assets of General Motors (which includes 100 percent of the stock of GMHE).
 GM HUGHES ELECTRONICS CORP.
 Statement of Consolidated Cash Flows
 (Dollars in millions)
 Year Ended Dec. 31,
 1992 1991
 Cash Flows from Operating Activities
 Income (loss) before cumulative effect
 of accounting changes ($173.3) $381.1
 Adjustments to reconcile income (loss)
 before cumulative effect of accounting
 changes to net cash provided by
 operating activities
 Depreciation and amortization 487.1 501.1
 Amortization of GM purchase accounting
 adjustments related to Hughes 123.8 123.9
 Special provision for restructuring 1,237.0 ---
 Pension credit, net of cash
 contributions (137.7) (66.0)
 Net (gain) loss on sale of property (18.0) 17.2
 Change in deferred income taxes
 and other(a) (367.7) 86.5
 Change in other operating assets
 and liabilities
 Accounts receivable 161.9 (90.0)
 Contracts in process(a) 46.6 65.7
 Inventories(a) 26.8 (142.9)
 Prepaid expenses (10.0) 9.7
 Accounts payable 63.2 83.0
 Income taxes(a) (54.5) (65.1)
 Accrued and other liabilities(a) (49.2) (34.7)
 Other(a) (136.6) (47.5)
 Net cash provided by operating activities 1,199.4 822.0
 Cash Flows from Investing Activities
 Investment in companies, net of
 cash acquired (69.9) (26.7)
 Expenditures for property and
 special tools (456.9) (593.0)
 Change in net equipment on
 operating leases (71.6) (87.1)
 Proceeds from disposals of property 108.4 8.0
 Proceeds from sale and leaseback of
 satellite transponders 314.8 204.7
 Increase in notes receivable (45.2) (13.1)
 Net cash used in investing activities (220.4) (507.2)
 Cash Flows from Financing Activities
 Net decrease in notes and loans payable (525.8) (7.8)
 Increase in long-term debt 236.0 6.5
 Decrease in long-term debt (46.8) (130.1)
 Cash dividends paid to General Motors (288.0) (288.0)
 Net cash used in financing activities (624.6) (419.4)
 Net increase (decrease) in cash and
 cash equivalents 354.4 (104.6)
 Cash and cash equivalents
 at beginning of the year 348.3 452.9
 Cash and cash equivalents at end
 of the year $702.7 $348.3
 Certain amounts for 1991 have been reclassified to conform with 1992 classifications.
 (a) Excluding effect of accounting changes.
 PRO FORMA SELECTED SEGMENT DATA(1)
 (Dollars in millions)
 As of and for the
 Fourth Quarter Years Ended Dec. 31,
 1992 1991 1992 1991
 Automotive Electronics
 Revenues
 Amount $1,082.2 $1,055.4 $3,977.5 $3,660.4
 As a percentage of
 GMHE revenues (pct) 31.2 33.5 32.4 31.7
 Incremental ongoing
 SFAS No. 106 $13.6 --- $54.4 ---
 Operating profit(a) $153.4 $146.0 $461.9 $273.6
 Operating profit
 margin(b) (pct) 14.2 13.8 11.6 7.5
 Depreciation and
 amortization $33.8 $27.1 $124.1 $115.2
 Capital expenditures $66.0 $74.6 $266.1 $281.6
 Telecommunications and Space
 Revenues
 Amount $581.7 $601.4 $2,205.6 $1,847.3
 As a percentage of
 GMHE revenues (pct) 16.8 19.1 17.9 16.0
 Incremental ongoing
 SFAS No. 106 $1.6 --- $6.3 ---
 Restructuring
 charge(c) --- --- $195.3 ---
 Operating profit(a) $99.7 $97.8 $59.7 $231.9
 Operating profit
 margin(b) (pct) 17.1 16.3 2.7 12.6
 Depreciation and
 a
 Defense Electronics
 Revenues
 Amount $1,623.1 $1,308.1 $5,352.6 $5,325.1
 As a percentage of
 GMHE revenues (pct) 46.9 41.6 43.5 46.2
 Incremental ongoing
 SFAS No. 106 $3.9 --- $15.5 ---
 Restructuring
 charge(c) --- --- $911.8 ---
 Operating profit
 (loss)(a) $122.1 $146.2 ($518.0) $378.6
 Operating profit (loss)
 margin(b) (pct) 7.5 11.2 (9.7) 7.1
 Depreciation and
 amortization(d) $52.4 $67.7 $204.6 $229.5
 Capital expenditures $29.6 $39.2 $99.4 $146.5
 Commercial Technologies
 Revenues
 Amount $177.3 $183.2 $761.4 $707.8
 As a percentage of
 GMHE revenues (pct) 5.1 5.8 6.2 6.1
 Incremental ongoing
 SFAS No. 106 $0.6 --- $2.5 ---
 Restructuring
 charge(c) --- --- $129.9 ---
 Operating profit
 (loss)(a) $21.8 $23.6 ($175.7) ($58.1)
 Operating profit
 (loss) margin(b)
 (pct) 12.3 12.9 (23.1) (8.2)
 Depreciation and
 amortization(d) $4.0 $13.2 $40.4 $39.5
 Capital expenditures $1.2 $14.5 $18.6 $40.3
 Corporate
 Operating (loss)(a) ($5.4) ($9.9) ($22.1) ($25.8)
 (1) The GMHE Consolidated Financial Statements reflect the application of purchase accounting adjustments related to the acquisition of Hughes by GM. However, as provided in the General Motors Certificate of Incorporation, the earnings attributable to Class H common stock for purposes of determining the amount available for the payment of dividends on Class H common stock specifically excludes such adjustments. In order to provide additional analytical data, the above GMHE unaudited supplemental pro forma financial data, which excludes the purchase accounting adjustments related to the acquisition of Hughes by GM, is presented.
 (a) Net sales less total costs and expenses other than interest expense.
 (b) Operating profit (loss) as a percentage of revenues.
 (c) Recorded in the second quarter of 1992.
 (d) Excludes amortization arising from purchase accounting adjustments related to GM's acquisition of Hughes amounting to $2.7, $2.7, $10.8 and $10.8 million, respectively, for the Telecommunications and Space segment; $25.7, $25.8, $102.7 and $102.8 million, respectively, for the Defense Electronics segment; and $2.6, $2.6, $10.3 and $10.3 million, respectively, for the Commercial Technologies segment.
 -0- 2/10/93
 /CONTACT: Ray Silvius of GM Hughes Electronics, 310-568-6327/


CO: GM Hughes Electronics Corp. ST: California IN: AUT ARO CPR SU: ERN

JL-KJ -- LA029 -- 5379 02/10/93 17:12 EST
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