General Motors 2012 Annual Report Download - page 33

GENERAL MOTORS COMPANY AND SUBSIDIARIES
Financial; (5) increased revenues from powertrain and parts sales of $1.1 billion due to increased volumes; (6) favorable vehicle mix
of $0.6 billion; and (7) increased revenue of $0.4 billion due to the acquisition of GMS; partially offset by (8) decreased revenue of
$1.0 billion due to the sale of Nexteer in November 2010.
Automotive Cost of Sales
Years Ended December 31,
Year Ended
2012 vs. 2011 Change
Year Ended
2011 vs. 2010 Change
2012 2011 2010 Amount % Amount %
Automotive cost of sales .................. $140,236 $130,386 $118,768 $ 9,850 7.6% $11,618 9.8%
Automotive gross margin ................. $ 10,059 $ 18,480 $ 16,543 $(8,421) (45.6)% $ 1,937 11.7%
The most significant element of our Automotive cost of sales is material cost which makes up approximately two-thirds of the total
amount excluding adjustments. The remaining portion includes labor costs, depreciation and amortization, engineering, and policy,
product warranty and recall campaigns.
In the year ended December 31, 2012 Automotive cost of sales increased by $9.9 billion (or 7.6%) due primarily to: (1) unfavorable
vehicle mix of $4.1 billion; (2) increased employee costs of $4.1 billion including increased pension settlement losses and decreased
net pension and OPEB income and separation costs; (3) impairment charges of $3.7 billion for long-lived assets and intangible assets;
(4) increased manufacturing expense of $1.4 billion due to new launches; (5) increased costs of $0.6 billion related to increased
wholesale volumes; (6) increased policy and product warranty expense of $0.2 billion; partially offset by (7) favorable net foreign
currency effect of $3.3 billion due to the weakening of certain currencies against the U.S. Dollar; (8) decreased engineering expense
of $0.5 billion; (9) decreased costs of $0.3 billion related to powertrain and parts sales; and (10) decreased costs of $0.1 billion due to
the deconsolidation of VMM in June 2011.
In the year ended December 31, 2011 Automotive cost of sales increased by $11.6 billion (or 9.8%), in line with Total net sales and
revenue, due primarily to: (1) increased costs related to wholesale volume increases of $6.3 billion; (2) unfavorable net foreign
currency effect of $2.4 billion due to the strengthening of certain currencies against the U.S. Dollar; (3) unfavorable vehicle mix of
$2.3 billion; (4) increased material, freight and manufacturing costs of $1.7 billion due to higher commodity prices and to support new
vehicle launches; (5) increased costs of $0.8 billion related to powertrain and parts sales; (6) increased engineering costs of
$0.7 billion to support new product development; (7) revisions to restructuring reserves of $0.4 billion related to higher than planned
employee utilization in 2010 which did not recur in 2011; and (8) increased costs of $0.3 billion due to the acquisition of GMS;
partially offset by (9) decreased costs of $0.9 billion due to the sale of Nexteer in November 2010; (10) decreased depreciation and
amortization expense of $0.8 billion related to the amortization of technology intangibles and impairment charges for long-lived
assets; (11) a gain of $0.7 billion related to the settlement of the HCT in 2011; (12) decreased restructuring charges of $0.5 billion
related to our European operations; and (13) increased net pension and OPEB income of $0.3 billion due to plan remeasurements.
Automotive Selling, General and Administrative Expense
Years Ended December 31,
Year Ended
2012 vs. 2011 Change
Year Ended
2011 vs. 2010 Change
2012 2011 2010 Amount % Amount %
Automotive selling, general and administrative
expense ...................................... $13,593 $12,105 $11,446 $1,488 12.3% $659 5.8%
In the year ended December 31, 2012 Automotive selling, general and administrative expense increased by $1.5 billion (or 12.3%)
due primarily to (1) impairment charges for intangibles and long-lived assets of $1.8 billion; partially offset by (2) favorable net
foreign currency effect of $0.3 billion due to the weakening of certain currencies against the U.S. Dollar.
General Motors Company 2012 ANNUAL REPORT30