General Motors Company (NYSE:GM.WSB) Q3 2016 Earnings Conference Call - Preliminary Transcript

Oct 25, 2016 • 10:00 am ET


General Motors Company (NYSE:GM.WSB) Q3 2016 Earnings Conference Call - Preliminary Transcript


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Ladies and gentlemen, thank you for standing by. Welcome to the General Motors Company Third Quarter 2016 Earnings Conference Call. During the opening remarks, all participants will be in a listen-only mode. After the opening remarks, we will conduct a question-and-answer session.

[Operator Instructions] As a reminder, this conference call is being recorded Tuesday, October 25, 2016. I would now like to turn the call over to Randy Arickx, Vice President of Corporate Communications and Investor Relations. Please go ahead, sir.

Randy Arickx

Thanks, operator. Good morning and thank you for joining us as we review GM's financial results for the third quarter of 2016. Our press release was issued this morning and the conference call materials are available on the GM Investor Relations website. We are also broadcasting this call via webcast. Included in the chart set materials published this morning, we've included key takeaways from each chart in the notes pages in order to provide color on the results.

This morning, Mary Barra, General Motors Chairman and Chief Executive Officer, will provide brief opening remarks followed by Chuck Stevens, GM's Executive VP and CFO, and then we'll open the line for questions from the analyst community. Before we begin, I would like to direct your attention to the legend regarding forward-looking statements on the first page of the chart set. The content of our call will be governed by this language.

In the room today we also have Tom Timko, Vice President, Controller and Chief Accounting Officer and Dhivya Suryadevara, Vice President, Treasurer and Chief Investment Officer to assist in answering your questions. Now, I'll turn the call over to Mary Barra.

Mary Barra

Thanks, Randy, and good morning, everyone. Thank you very much for joining. GM delivered strong earnings and achieved several third quarter records that included net income, EBIT-adjusted, EBIT-adjusted margins, EPS diluted-adjusted and adjusted automotive free cash flow.

Here are just a few of the year-over-year highlights. Net income increased 104% to $2.8 billion as net revenue rose 10% to a $42.8 billion, which is an all-time record. EBIT-adjusted was up 14% to $3.5 billion. EBIT-adjusted margin was 8.3%, up 0.3 percentage points and EPS diluted-adjusted was up nearly 15% to $1.72.

Adjusted automotive free cash flow was $3.8 billion, up from $0.8 billion last year and ROIC adjusted of 30.6% on a trailing four-quarter basis was an all-time record continuing the positive impact of our disciplined capital allocation framework. Given our outstanding performance this year, we are on track to deliver a record 2016 on top of a record 2015 and a very strong 2014.

In addition, we expect to be at the high end of our full-year EPS diluted adjusted guidance of $5.50 to $6 per share. We also completed our initial $5 billion share buyback commitment a quarter early and we'll be purchasing additional shares in the fourth quarter. We had very strong performances in North America and China. So let me cover a few of the highlights.

In North America, our disciplined retail-focused strategy is paying