CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in millions, except per share amounts) Item 8.

Financial Statements and Supplementary Data

2008

2007

2006

Net sales and revenue Automotive sales Financial services and insurance revenue Total net sales and revenue Costs and expenses Automotive cost of sales Selling, general and administrative expense Financial services and insurance expense Other expenses Total costs and expenses Operating loss Equity in loss of GMAC LLC (Note 9) Automotive and other interest expense Automotive interest income and other non-operating income, net Loss from continuing operations before income taxes, equity income and minority interests Income tax expense (benefit) Equity income, net of tax Minority interests, net of tax Loss from continuing operations Discontinued operations (Note 4) Income from discontinued operations, net of tax Gain on sale of discontinued operations, net of tax

147,732 1,247 148,979

177,594 2,390 179,984

170,651 33,816 204,467

149,311 14,253 1,292 5,407 170,263 -21,284 -6,183 -2,345 424

165,573 14,412 2,209 2,099 184,293 -4,309 -1,245 -2,983 2,284

163,214 13,650 29,188 4,238 210,290 -5,823 ) -5 ) -2,642 ) 2,812

-29,388 1,766 186 108 -30,860

-6,253 37,162 524 -406 -43,297

-5,658 ) -3,046 ) 513 -324 ) -2,423 )

-30,860

256 4,309 4,565 -38,732

445 445 -1,978 )

Income from discontinued operations Net loss Earnings (loss) per share, basic and diluted Continuing operations Discontinued operations

-53.32

-76.52 8.07

-4.29 ) 0.79

Net loss per share basic and diluted Weighted-average common shares outstanding, basic and diluted (millions) Cash dividends per share

-53.32

-68.45

-3.5 )

579 0.5

566 1

566 1

GENERAL MOTORS CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in millions)

2008 ASSETS Current Assets Cash and cash equivalents Marketable securities 13,953 13

2007

2006

24,549 2,139

23,774 138

Total cash and marketable securities Accounts and notes receivable, net Inventories Equipment on operating leases, net Other current assets and deferred income taxes

13,966 7,711 13,042 3,363 3,142

26,688 9,659 14,939 5,283 3,566

23,912 8,216 13,921 6,125 12,982

Total current assets Financing and Insurance Operations Assets Cash and cash equivalents Investments in securities Equipment on operating leases, net Equity in net assets of GMAC LLC Other assets

41,224

60,135

65,156

0
100 128 2,221 491 1,567 268 215 6,712 7,079 2,715 349 188 11,794 7,523 2,269

Total Financing and Insurance Operations assets Non-Current Assets Equity in net assets of nonconsolidated affiliates Property, net Goodwill and intangible assets, net Deferred income taxes Prepaid pension Other assets

4,507

16,989

22,123

0
1,655 39,656 265 98 109 3,533 1,919 43,017 1,066 2,116 20,175 3,466 1,969 41,934 1,118 33,079 17,366 3,559

Prepaid Pension Prepaid pension decreased $20.1 b

Total non-current assets

45,316

71,759

99,025

Total assets

91,047

148,883

186,304

LIABILITIES AND STOCKHOLDERS DEFICIT Current Liabilities Accounts payable (principally trade) Short-term borrowings and current portion of long-term debt Accrued expenses 22,236 15,754 35,921 29,439 6,047 34,024

0 0
26,931 5,666 34,120

Total current liabilities

73,911

69,510

66,717

Financing and Insurance Operations Liabilities Accounts payable Debt Other liabilities and deferred income taxes 23 1,192 607 30 4,908 875

0
192 9,438 1947

Total Financing and Insurance Operations liabilities Non-Current Liabilities Long-term debt Postretirement benefits other than pensions Pensions Other liabilities and deferred income taxes

1,822

5,813

11,577

0
29,594 28,919 25,178 16,963 33,384 47,375 11,381 16,900 33,067 50,409 11,934 17,062

Total non-current liabilities

100,654

109,040

112,472

Total liabilities Commitments and contingencies (Note 18) Minority interests Stockholders Deficit Preferred stock, no par value, authorized 6,000,000 shares, no shares issued and outstanding Preference stock, $0.10 par value, authorized 100,000,000 shares, no shares issued and outstanding $1 2/3 par value common stock (2,000,000,000 shares authorized, 800,937,541 and 610,483,231 shares issued and outstanding at December 31, 2008, respectively, and 756,637,541 and 566,059,249 shares issued and outstanding at December 31, 2007, respectively) Capital surplus (principally additional paid-in capital) Accumulated deficit Accumulated other comprehensive loss

176,387

184,363

190,766

814

1,614

1,190

0
0

1,017 15,755 -70,610 -32,316

943 15,319 -39,392 -13,964

943 15,336 195 -22,126

Total stockholders deficit

-86,154

-37,094

-5,652

Total liabilities, minority interests, and stockholders deficit

91,047

148,883

186,304

Prepaid Pension Prepaid pension decreased $20.1 billion (or 99.5%) to $0.1 billion at December 31, 2008 from $20.2 billion at December 31, 2007. This decrease is prim

ember 31, 2007. This decrease is primarily due to a combination of actual losses on plan assets, the transfer of the Delphi pension liability and other curtail

lphi pension liability and other curtailments and amendments. These factors also resulted in a significant increase in the Noncurrent Pension liability.

the Noncurrent Pension liability.

GENERAL MOTORS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in millions)

2008

2007

Cash flows from operating activities Net loss Less income from discontinued operations Loss from continuing operations Adjustments to reconcile loss from continuing operations to net cash provided by (used in) continuing operating activities Depreciation, impairments and amortization expense Mortgage servicing rights and premium amortization Goodwill impairment Delphi related charges Foreign currency (gain)/loss Loss on sale of 51% interest in GMAC Impairment of investments in GMAC Common and Preferred Membership Interests Undistributed earnings of nonconsolidated affiliates Provision for credit financing losses Net gains on sale of credit receivables Net gains on sale of investment securities OPEB expense OPEB payments VEBA/401(h) withdrawals Pension expense Pension contributions Retiree lump sum and vehicle voucher expense, net of payments Net change in mortgage loans Net change in mortgage securities Provisions for deferred taxes Change in other investments and miscellaneous assets Change in other operating assets and liabilities, net of acquisitions and disposals Other Net cash provided by (used in) continuing operating activities Cash provided by discontinued operating activities Net cash provided by (used in) operating activities

-30,860 -30,860

-38,732 4,565 -43,297

10,014 610 4,797 -1,705 8,100 -727 -2,115 -3,831 1,355 4,862 -1,067 1,163 -366 94 -2,389 -12,065 -12,065

9,513 1,547 661 293 2,362 -3,751 1,694 1,799 -937 36,977 663 -3,412 3,395 7,507 224 7,731

Cash flows from investing activities

Expenditures for property Investments in marketable securities, acquisitions Investments in marketable securities, liquidations Operating leases, acquisitions Operating leases, liquidations Net change in mortgage servicing rights Increase in finance receivables Proceeds from sale of finance receivables Proceeds from sale of 51% interest in GMAC Proceeds from sale of discontinued operations Proceeds from sale of business units/equity investments Proceeds from sale of real estate, plants, and equipment Capital contribution to GMAC Investments in companies, net of cash acquired Change in notes receivable Change in restricted cash Other Net cash provided by (used in) continuing investing activities Cash used in discontinued investing activities Net cash provided by (used in) investing activities Cash flows from financing activities Net increase (decrease) in short-term borrowings Borrowings on the UST Loan Facility Borrowings of long-term debt Payments made on long-term debt Cash dividends paid to stockholders Other Net cash provided by (used in) continuing financing activities Cash provided by (used in) discontinued financing activities Net cash provided by (used in) financing activities Effect of exchange rate changes on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents retained by GMAC upon disposal Cash and cash equivalents at beginning of the year Cash and cash equivalents at end of the year

-7,530 -3,771 5,866 3,610 232 347 -1 -430 -87 -1,764 -1,764 -4,100 4,000 5,928 -1,702 -283 3,843 3,843 -778 -10,764 24,817 14,053

-7,542 -10,155 8,119 3,165 5,354 332 -1,022 -46 34 23 -1,738 -22 -1,760 -5,749 2,131 -1,403 -567 -5,588 -5 -5,593 316 694 24,123 24,817

2006

-1,978 ) 445 -2,423 )

10,885 1,021 828 500 337 2,910 -135 1,799 -1,256 -1,006 3,567 -3,802 3,061 4,911 -1,032 -325 -21,578 427 -4,166 -477

) ) ) )

) ) ) ) )

-8,512 ) 2,116 -12,350 ) 591 -11,759 )

-7,902 -28,062 31,081 -17,070 7,039 -61 -1,160 18,374 7,353 10,506 546 -357 -36 -530 5

) ) ) ) )

) ) )

19,726 -31 ) 19,695 7,030 79,566 -92,290 ) -563 ) 2,487 -3,770 ) 3 -3,767 ) 365 4,534 -11,137 ) 30,726 24,123

SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS

Description

For the Year Ended December 31, 2008 Allowances Deducted from Assets Accounts and notes receivable (for doubtful receivables) Inventories (including rental car returns and company vehicles) Other investments and miscellaneous assets (receivables and other) For the Year Ended December 31, 2007 Allowances Deducted from Assets Accounts and notes receivable (for doubtful receivables) Inventories (including rental car returns and company vehicles) Other investments and miscellaneous assets (receivables and other) For the Year Ended December 31, 2006 Allowances Deducted from Assets Allowance for credit losses (a) Accounts and notes receivable (for doubtful receivables) Inventories (including rental car returns and company vehicles) Other investments and miscellaneous assets (receivables and other) Miscellaneous allowances (mortgage and other) (a) (a)

YING ACCOUNTS

Reflects allowances removed as a result of sale of 51% controlling interest in GMAC. At the time of the sale GMAC had an allowance for credit loss balance and miscellaneous allowance balance of $3.5 billion and $123 million, respectively.

Balance at Beginning of Year

Additions Charged to Costs and Expenses

Additions Charged to Other Accounts (Dollars in millions) Deductions

$ $ $

338 549 14

157 577

1 29

73 442

$ $ $

397 687 17

353

11

70 491 3

$ $ $ $ $

3,085 353 783 17 84

1,799 56 459 62

4,884 12 555 146

Balance at End of Year

$ $ $

422 685 43

$ $ $

338 549 14

$ $ $ $ $

397 687 17

December 31, 2008 (Dollars in millions)

Automotive and Other Current

Dealer and customer allowances, claims and discounts

$ Deposits from rental car companies

8,939

6,142 Deferred revenue

1,493 Policy, product warranty and recall campaigns

3,792 Delphi contingent liability

150 Payrolls and employee benefits excluding postemployment benefits

1,591 Self-insurance reserves

355 Taxes (other than income taxes)

1,276 Derivative liability

2,718 Postemployment benefits including facility idling reserves

1,727 Interest

775 Pensions

430

Postretirement benefits

4,002 Deferred income taxes

87 Other 2,444

Total accrued expenses $ 35,921

Automotive and Other Noncurrent

Dealer and customer allowances, claims and discounts

$ Deferred revenue

1,578

1,260 Policy, product warranty and recall campaigns

4,699 Delphi contingent liability

1,570 Payrolls and employee benefits excluding postemployment benefits

2,314 Self-insurance reserves

1,324 Derivative liability

817

Postemployment benefits including facility idling reserves

1,626 Deferred income taxes

563 Other 1,212

Total other liabilities and deferred income taxes $ 16,963

The following table summarizes activity for policy, product warranty, recall campaigns and certified used vehicle warranty liabilities:

2008

(Dollars in millions)

Balance at January 1

$ Warranties issued in period

9,615

4,277 Payments

(5,068

Adjustments to pre-existing warranties

294 Effect of foreign currency translation

(627 Liabilities transferred in the sale of Allison (Note 4)

Balance at December 31

8,491

December 31, 2007 (Dollars in millions)

9,833

7,758

1,242

4,655

924

1,680

351

1,421

587

901

812

446

335

116

2,963

34,024

912

1,933

4,960

1,870

2,082

1,483

264

1,145

1,034

1,217

16,900

sed vehicle warranty liabilities:

2007

(Dollars in millions)

9,064

5,135

(4,539 )

(165 )

223

(103 )

9,615

AutomotiveCurrent Dealer and customer allowances, claims and discounts

$ 10,631

$ 10,057

Deposits from rental car companies

7,758

9,112

Deferred revenue

1,242

906

Policy, product warranty, and recall campaigns

4,655

4,389

Delphi contingent liability

924

Payrolls and employee benefits excluding postemployment benefits

2,146

2,116

Self-insurance reserves

351

361

Taxes

1,421

1,761

Derivative liability

587

462

Postemploymentbenefitsplantidling

476

956

Postemploymentbenefitsextendeddisabilitybenefits

122

146

Interest

812

827

Pensions

446

335

Postretirement benefits

335

275

Deferred income taxes

116

11

Other

2,800

2,406

Total accrued expenses

$ 34,822

$ 34,120

AutomotiveNoncurrent

Deferred revenue

$ 1,933

$ 2,109

Policy, product warranty, and recall campaigns

4,960

4,675

Delphi contingent liability

1,870

1,451

Payrolls and employee benefits excluding postemployment benefits

2,082

1,897

Self-insurance reserves

1,483

1,557

Derivative liability 264 454 Postemploymentbenefitsplantidling 382 313 Postemploymentbenefitsextendeddisabilitybenefits 631 849 Deferred income taxes 1,034 722 Other 1,463 3,035 Total other liabilities and deferred income taxes $ 16,102 $ 17,062

The following table summarizes the components of temporary differences and carryforwards that give rise to deferred tax assets and liabilitie

2008 Deferred Tax Assets

Postretirement benefits other than pensions Pension and other employee benefit plans Warranties, dealer and customer allowances, claims and discounts Depreciation and amortization Tax carryforwards Lease transactions Miscellaneous U.S. Miscellaneous non-U.S. Subtotal Valuation allowances Total deferred taxes Net deferred tax assets (liabilities)

11,610 16,171 6,682 7,432 18,080 9 9,115 3,485 72,584 -60,002 ) 12,582

-414

12,996 Postretirement benefits other than pensions $17,726$$18,721$ Pension and other employee benefit plans 2,582 6,618 5,044 6,137 Warranties, dealer and customer allowances, claims and discounts 4,148 54 4,070 47 Depreciation and amortization 7,108 4,536 6,098 2,008 Tax carryforwards 14,14813,293 Lease transactions 136199 Miscellaneous U.S. 7,799 1,556 8,240 2,194 Miscellaneous non-U.S. 2,598 37 2,992 40 Subtotal 56,109 12,937 58,458 10,625 Valuation allowances (42,489)(6,523)

Total deferred taxes 13,620 $ 12,937 51,935 Net deferred tax assets $ 683 $ 41,310

$ 10,625

o deferred tax assets and liabilities:

December 31, 2007 Deferred Tax Liabilities (Dollars in millions) Assets Liabilities

08

ed Tax

8,648 90 3,089 144 288 737 12,996

17,726 2,582 4,148 7,108 14,148 7,799 2,598 56,109 -42,489 ) 13,620

6,618 54 4,536 136 1,556 37 12,937

12,996 $

12,937

683