General Motors Company

Good morning and welcome to the General Motors Company fourth quarter and calendar year 2024 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. We are asking analysts to limit their questions to one and a brief follow-up. To ask a question, press star then one on your telephone keypad to join the queue. To withdraw your question, press star then two. As a reminder, this conference call is being recorded Tuesday, January 28th, 2025. I would now like to turn the conference over to Ashish Kohli, GM's Vice President of Investor Relations.

Thanks, Amanda, and good morning, everyone. We appreciate you joining us as we review GM's financial results for the fourth quarter and calendar year 2024. Our conference call materials were issued this morning and are available on GM's Investor Relations website. We are also broadcasting this call via webcast. Joining us today are Mary Barra, GM's Chair and CEO, and Paul Jacobson, GM's Executive Vice President and CFO. Dan Burse, President and CEO of GM Financial, will also be joining us for the Q&A portion. On today's call, management will make forward-looking statements about our expectations. These statements are subject to risks and uncertainties that could cause our actual results to differ materially. These risks and uncertainties include the factors identified in our filings with the SEC. Please review the Safe Harbor Statement on the first page of our presentation as the content of our call will be governed by this language. And with that, I'm delighted to turn the call over to Mary.

Thanks, Ashish, and good morning. I'd like to begin by thanking our employees, dealers, and suppliers for helping us deliver another outstanding year. A year ago on this call, I said that we were optimistic about 2024, given the choice we would offer customers, including industry-leading full-size pickups, new and redesigned SUVs, and an expanding portfolio of EVs. And I stressed that we would be focused on execution and profitability. I'm proud to say that our full-year revenue grew by 9% last year. We were number one in the U.S. in retail, fleet, and total sales, We grew our market share, and we distanced ourselves from the industry's pricing incentives and inventory pressures. In our growing EV business, we produced and wholesaled 189,000 vehicles in North America. We doubled our market share over the course of the year as we scaled production, and our portfolio became variable profit positive in the fourth quarter. This combination of compelling vehicles and high volume and growing segments, strong execution and discipline led to record EBIT adjusted, record adjusted automotive free cash flow, and record EPS diluted adjusted. At the same time, we continued to allocate capital consistently and in a balanced manner. We invested to drive the business forward, and we improved our balance sheet. Our employees and owners are all sharing in our success. I'm pleased to share that our global salary team earned strong performance bonuses, and our U.S. hourly employees once again earned the industry's highest profit sharing, totaling more than $640 million. That's a record payout of up to $14,500 per person, equal to more than two months of extra pay for average UAW-represented team members. Investors in GM also earned a 50% total return, and we ended the year with fewer than 1 billion shares outstanding, a goal we reached ahead of plan. Throughout the year, we also addressed challenges with resolve. In China, we have been working with our JV partners to drive better performance in the market by right-sizing the businesses, launching new products, reducing dealer inventory, and building to demand. We are making good progress and reported positive equity income for the fourth quarter before restructuring costs. To improve year-over-year results and make SGM sustainably profitable, they will be implementing a wide range of restructuring initiatives this year that include reducing capacity to operate within utilization levels of about 80% or better. We are in the process of finalizing details with our partner. Importantly, we believe SGM has the resources to complete its restructuring without additional capital from GM. As you know, we also stopped funding robo-taxi development at Cruise. We have a proposed restructuring plan that will refocus our autonomous driving strategy on personal vehicles. We expect to see a run rate savings of about a billion dollars on an annualized basis by ending robo-taxi development, and we look forward to acquiring the small number of Cruise shares we don't own and finalizing the restructuring plan later this quarter. The momentum we have in both ICE vehicles and EVs will drive our results once again in 2025. For example, the redesigned Chevrolet and GMC full-size SUVs that we launched late last year are supporting even stronger ATPs than the outgoing models thanks to their refined exteriors, all-new interiors, and new models like our GMC Yukon AT4 Ultimate. We also have a full year of our new compact and midsize ICE SUVs, which include some of our highest volume nameplates like the Chevrolet Equinox, Chevrolet Traverse, and GMC Acadia. They are great examples of our strategy to pair bold designs to drive higher ATPs with discipline and capital efficiency to drive better profitability. As Mark shared at Investor Day, we're seeing EBIT improvements in the 10 percentage point range on some of these vehicles. Cadillac is also very well positioned. Last year, Cadillac had its best full-year sales since 2016, thanks to the ongoing success of the Escalade, with its refined exterior and stunning new interior, a high-performance V-Series and Blackwing models, and the Lyric, which is now the country's best-selling midsize luxury electric SUV, according to S&P Global Mobility. This year, we expect the Escalade IQ, Optic, and Vistic to further grow GM's share of the luxury EV market. EV adoption has been higher in luxury segments. We are being guided by the customer and will continue to be, and these new Cadillacs stand out with their beautiful designs, advanced technology, and customer-focused innovation. Here are just a few examples. The Optic, which is scaling now, and the 7-passenger Vistic, which launches in the spring, will be the first Cadillacs to offer AKG audio systems with Dolby Atmos that reveal more depth, detail, and clarity in the customer's favorite music. All Cadillac EVs now come equipped with vehicle-to-home capability, allowing them to power a home during outages using a GM energy power shift charger and our vehicle-to-home equipment package. And with the VSTIC, Cadillac will be the first GM brand to roll out a new 8S feature that builds on adaptive cruise control and lane centering. The new feature allows an attentive driver to engage the system and travel on millions of miles of roads with a light hand on the wheel. Then there's the Cadillac Escalade IQ. With its presence, range, performance, comfort, and technology, it's really in a class of its own. One of our New York area Cadillac dealers who has decades of experience with other luxury franchises says it's the most impressive vehicle he has ever driven. Customers are noticing. Since production began late last year, we've sold more than 1,500 Escalade IQs. 2025 will also be a year of rapid growth for Super Cruise across all of our brands. Our customer-focused strategy with Super Cruise is to continuously refine and expand its capabilities to make it indispensable. This is how we are setting the stage for recurring high-margin revenue streams from subscriptions. Since we launched Super Cruise, we have added hundreds of thousands of miles of new roads to its network and introduced features like automatic lane change and hands-free towing. This has helped make about 60% of our roughly 360,000 Super Cruise customers regular users. This year, we expect our Super Cruise equipped fleet to roughly double in size. Subscription revenue is becoming an increasingly important part of the Super Cruise opportunity, now that our first customers have completed their three-year trial. Last year, we saw subscription attach rates of about 20% off of a base of roughly 18,000 vehicles. This year, an additional 33,000 vehicles will end their trial periods, and we target to more than double subscription revenue. Within five years, we expect to approach about $2 billion in total annual revenue from Super Cruise. These are just a few of the many exciting opportunities ahead of us, and we look forward to sharing more details with you as we go forward. Before I turn the call over to Paul, I'd like to mention the projects we're pursuing with Hyundai. As Hyundai has shared, our teams are moving quickly to finalize the first of several product and purchasing agreements that are designed to help us move faster, lower cost, and become more capital efficient. The collaborations will be global in nature, targeting specific segments and areas of the business, and we'll be sharing more details very soon. I would also like to address the uncertainty around public policy, trade, and regulation. It remains to be seen how things will evolve, so our 2025 guidance Paul will share in his remarks does not take into account future policy changes. We have been both proactive with Congress and the administration, and in our conversations, we have stressed the importance of a strong manufacturing sector and American leadership in advanced technologies. It's clear that we share a lot of common ground, and we have appreciated the dialogue. We believe the President wants to use policy and regulations in ways that will strengthen, not harm, domestic manufacturers like GM. We look forward to continuing to work with the President and his team as they consider how to strike the right balance on these important issues. With respect to possible tariffs, we are working across our supply chain, logistics network, and assembly plants so that we are prepared to mitigate near-term impacts. Many of these actions are no cost or low cost. What we won't do is spend large amount of capital without clarity. Whatever happens on these fronts, we have a very broad and deep portfolio of ICE vehicles and EVs that are both growing market share and will be agile and execute as efficiently as possible. With that, I'd like to invite Paul to walk you through our results and 2025 financial guidance, and then we'll move to Q&A. Thank you.