From: Richard Kahn

From: Richard Kahn Sent: Tuesday, February 7, 2017 2:40 PM To: jeffrey E. Subject: Fwd: GM US: General Motors Company - GM produces solid 4Q16, taxes drive beat, constructive outlook maintained — first take - NEUTRAL - United States General Motors Co =nbsp; purchase =ate—> 12/9/10 97,525 shares Cost basis 36.77 Dividend yield 4.13% stock at 9:38am =nbsp;35.45 unrealized loss (128,686) Richard =ahn HBRK Associates Inc. 575 Lexington =venue 4th Floor New York NY 10022 Begin forwarded message: From: =/b>"Ens, Amanda" <[email protected]> Subject: =/b>GM US: General =otors Company - GM produces solid 4Q16, taxes drive beat, constructive =utlook maintained — first take - NEUTRAL - United States Date: =/b>February 7, 2017 at 8:36:31 AM =ST To: =/b>"Rich Kahn"<[email protected]> Reply-To: =/b>"Ens, Amanda" <[email protected]> EFTA_R1_01328859 EFTA02350939 Rich, as an update in case =ou still hold Global Research General Motors Company GM produces solid 4Q16, taxes drive beat, =onstructive outlook maintained — first take Maintain Rating: NEUTRAL PO: 42.00 USD I Price: 36.83 USD Equity I 07 February =017 Key takeaways • =/span>GM reported 4Q16 op EPS of $1.28, =ell ahead of expectations. The majority of the beat was the result of a =ow tax rate. =/span>On an operating basis all regions =n the auto business were just ahead of our estimates while GM Financial =as just below. =/span>GM reiterated its 2017 EPS outlook =f $6.00-$6.50, which, at the midpoint, is a 2% increase =oY. 2 EFTA_R1_01328860 EFTA02350940 FULL REPORT 4Q16 operating results =argely in-line GM reported 4Q16 operating EPS of =1.28, well above our $1.01 estimate and the Bloomberg consensus of =1.17. The majority of the bottom line beat was the result of a very low =ax rate of just 13.5% (BofAMLe 31.8% =amp; YTD -28%), but on an operating basis all regions in the auto =usiness were just ahead of our estimates. Specifically, GMNA EBIT of =2.6bn (BofAMLe $2.56bn) and a good 8.4% =BIT margin (BofAMLe 9.0%) were driven by =olume on new models, slightly offset by increased product costs and =ix. Europe was also slightly better, printing EBIT of $(246)mm versus =ur $(355)mm estimate, largely driven by a continued focus on cost. =nternational ops EBIT of $316mm (BofAMLe =187mm) was above our estimate due to a similar focus on cost, while =MSA EBIT loss of $(65)mm (BofAMLe =$152mm) benefited from price actions (Table 1). GM Financial EBIT of =193mm was just below our $218mm forecast. We continue to expect GM's =uto results to be led by North America in the next few quarters, driven =y solid volumes, product launches, and the company's go-to-market =trategy, while macro volatility in Europe (i.e. Brexit), continued weakness in South America, =nd the tail risk of an eventual slowdown in China remain risks that, so mar, are being well managed and mitigated by management execution. =/span> 2017 outlook reiterated; =PS of $6.00-$6.50 Consistent with its commentary at =vents over the past few months, GM expects total company earnings to =mprove YoY in 2017. Specifically, GM expects to record 2017 EPS of =6.00-$6.50, which, at the midpoint, is a $0.13/sh increase from the 2016 level, or about 2% =oY. The midpoint of GM's range is also above our estimate of $6.00 and =he Bloomberg consensus of $6.06. Other aspects of GM's 2017 outlook =nclude: (i) higher YoY total revenue, (ii) greater than or equal to YoY =djusted EBIT and EBIT margin, (iii) adjusted auto free cash flow of =$6bn, and (iv) cash returned to shareholders (via dividends, share =epurchases, etc. ) to be greater than the 2016 level. GM did not =rovide an explicit outlook by region, but we expect more color on the =onference call this morning. Balance sheet stalwart; =apital allocation encouraging GM generated $1.7bn of auto free cash =low in 4Q16, which was solid, driven by strong earnings and working =apital. At the end of 4Q GM had gross cash and marketable securities =f $21.6bn and total liquidity of $35.6bn, while net cash stood at a =olid $10.8bn. We would note that the underfunded status of GM's US =ension improved to $7.2bn at the end of 2016 ($10.4bn at year-end 2015) =elped by discretionary contributions and apparently good asset returns. =or full year 2016, GM repurchased $2.5bn of common shares ($1bn in 4Q), =hich was solid. At the Detroit Auto Show earlier this month, GM =nnounced a new $5bn share repurchase program, bringing the total =utstanding authorization to $8bn, or almost 15% of the company's =urrent market cap. In aggregate, we believe management remains =isciplined in its overall capital allocation strategy, and will likely =ontinue to enhance shareholder value via dividends, buybacks, and =&A. However, we believe a more prudent course of actions may be to =uild a bigger cash cushion, so as to further 3 EFTA_R1_01328861 EFTA02350941 ensure its dividend, =olster liquidity, and enhance its ability to invest in =roduction/technology through the next downturn. John Murphy, CFA Research Analyst MLPF&S </=able> This report is intended for [email protected] =o:p class=""> Click here to access the =esearch Library Read the research report, available through the link above, =or complete information including important disclosures and analyst =ertification(s). The research report and the link to such report are for the =se of Bank of America Merrill Lynch customers only and all copying, =edistribution, retransmission, publication, and any other dissemination =r use of the contents thereof are prohibited. There may be more recent =nformation available. Please visit one of the electronic venues that =arry BofA Merrill Lynch Global Research reports or contact your Bank of =merica Merrill Lynch representative for further information. "Bank of =merica Merrill Lynch" is the marketing name for the global banking and =lobal markets businesses of Bank of America Corporation. Click here to stop or =odify the delivery of Research via Emails. Publication: 60362967-11708784.pdf 4 EFTA_R1_01328862 EFTA02350942 Recipient: [email protected] <mailto:[email protected]> http://rsch.baml.com/r?q=WOXIfclnwJj4XrLObsc5nxg&e=richa=dkahn12%,40gmail.com&h=u9a81Q This message, and any attachments, is for the intended =ecipient(s) only, may contain information that is privileged, =onfidential and/or proprietary and subject to important terms and =onditions available at http://www.bankofamerica.com/emaildisclaimer. If you are =ot the intended recipient, please delete this message. 2223572 5 EFTA_R1_01328863 EFTA02350943