UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549-1004
FORM 11-K
X ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE
--- ACT OF 1934
For the fiscal year ended December 31, 2004
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OR
TRANSITION REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE
--- ACT OF 1934
For the transition period from to
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Commission file number 2-14960
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GENERAL MOTORS SAVINGS-STOCK PURCHASE PROGRAM
FOR SALARIED EMPLOYEES IN THE UNITED STATES
----------------------------------------------
(Full title of the plan)
General Motors Corporation
300 Renaissance Center, Detroit, Michigan 48265-3000
----------------------------------------------------
(Name of issuer of the securities held pursuant to
the plan and the address of its principal
executive offices)
Registrant's telephone number, including area code (313)-556-5000
Notices and communications from the Securities and Exchange Commission
relative to this report should be forwarded to:
Peter R. Bible
Chief Accounting Officer
General Motors Corporation
300 Renaissance Center.
Detroit, Michigan 48265-3000
1
FINANCIAL STATEMENTS AND EXHIBIT
--------------------------------
(a) FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE Page No.
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General Motors Savings-Stock Purchase
Program for Salaried Employees in the United States:
Report of Independent Registered Public Accounting Firm 3
Statements of Assets Available for Benefits, as of
December 31, 2004 and 2003 4
Statements of Changes in Assets Available for
Benefits for the Years Ended December 31, 2004 and 2003 5
Notes to Financial Statements 6
Supplemental Schedule, Form 5500, Schedule H, Part IV,
Line 4i - Schedule of Assets (Held at End of Year)
as of December 31, 2004 16
All other schedules required by Section 2520.103-10 of the Department of Labor's
Rules and Regulations for Reporting and Disclosure under the Employee Retirement
Income Security Act of 1974 have been omitted because they are not applicable.
(b) EXHIBIT
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Exhibit 23 Consent of Independent Registered Public
Accounting Firm 17
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this annual report to be signed on its behalf by the
undersigned, hereunto duly authorized.
General Motors Savings-Stock
Purchase Program for Salaried
Employees in the United States
-----------------------------
(Name of plan)
Date July 6, 2005 By:
------------
/s/G. Richard Wagoner, Jr.
-----------------------------
(G. Richard Wagoner, Jr.,
Chairman of the
Board of Directors)
2
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Plan Administrator of General Motors Savings-Stock Purchase Program for
Salaried Employees in the United States:
We have audited the accompanying statements of assets available for benefits of
General Motors Savings-Stock Purchase Program for Salaried Employees in the
United States (the "Program") as of December 31, 2004 and 2003, and the related
statements of changes in assets available for benefits for the years then ended.
These financial statements are the responsibility of the Program's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Program is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audits included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Program's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the assets available for benefits of the Program as of December 31,
2004 and 2003, and the changes in assets available for benefits for the years
then ended in conformity with accounting principles generally accepted in the
United States of America.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets (held
at end of year) as of December 31, 2004, is presented for the purpose of
additional analysis and is not a required part of the basic financial
statements, but is supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. This schedule is the responsibility of
the Program's management. Such schedule has been subjected to the auditing
procedures applied in our audit of the basic 2004 financial statements and, in
our opinion, is fairly stated in all material respects when considered in
relation to the basic financial statements taken as a whole.
/s/DELOITTE & TOUCHE LLP
------------------------
DELOITTE & TOUCHE LLP
Detroit, Michigan
June 30, 2005
3
GENERAL MOTORS SAVINGS-STOCK PURCHASE PROGRAM
FOR SALARIED EMPLOYEES IN THE UNITED STATES
STATEMENTS OF ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 2004 AND 2003
2004 2003
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(dollars in thousands)
ASSETS:
Investment in General Motors Savings
Plans Master Trust (Note D):
Investments - at estimated fair value $12,563,086 $12,759,437
Loans 247,486 243,428
Employee contributions receivable 15,339 0
Employer contributions receivable 4,723 0
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Total assets 12,830,634 13,002,865
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ASSETS AVAILABLE FOR BENEFITS $12,830,634 $13,002,865
========== ==========
Reference should be made to the Notes to Financial Statements.
4
GENERAL MOTORS SAVINGS-STOCK PURCHASE PROGRAM
FOR SALARIED EMPLOYEES IN THE UNITED STATES
STATEMENTS OF CHANGES IN ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
2004 2003
--------- ---------
(dollars in thousands)
ADDITIONS:
Net investment gain from General
Motors Savings Plans Master Trust (Note D) $261,194 $2,646,252
Contributions:
Employer 119,114 120,507
Employee 401,323 383,664
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Total contributions 520,437 504,171
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Total additions 781,631 3,150,423
DEDUCTIONS-
Distributions to participants (974,385) (714,052)
NET TRANSFERS IN(OUT) (Note E) 20,523 (571)
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NET (DECREASE)INCREASE (172,231) 2,435,800
ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 13,002,865 10,567,065
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End of year $12,830,634 $13,002,865
========== ==========
Reference should be made to the Notes to Financial Statements.
5
GENERAL MOTORS SAVINGS-STOCK PURCHASE PROGRAM
FOR SALARIED EMPLOYEES IN THE UNITED STATES
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2004 AND 2003
A. THE PROGRAM
GENERAL - General Motors Corporation (the "Corporation" or "GM") has
established the General Motors Savings-Stock Purchase Program for Salaried
Employees in the United States (the "Program"), a defined contribution plan.
Eligibility is restricted to regular employees of the Corporation who have
completed six months of employment and who are compensated fully or partly by
salary and/or commission, but who are not represented by a labor organization
(unless they are eligible through understandings reached between the
Corporation and their collective bargaining representatives). Employees
classified as part-time employees, regular employees, temporary assignment,
flexible service employees, temporary employees, or cooperative student
employees (hired prior to January 1, 1999) are eligible to participate in the
Program upon the completion of six months of employment. Except for purposes
of the investment of Program assets, the Investment Funds Committee of the
Corporation's Board of Directors acts as the Program fiduciary and, along with
various officers, employees, and committees, with authority delegated from the
Program fiduciary, controls and manages the operation and administration of
the Program subject to the provisions of the Employee Retirement Income
Security Act of 1974, as amended (ERISA). The following brief description of
the Program is provided for general information purposes only. Participants
should refer to the Program document and prospectus for a complete description
of the Program's provisions.
PARTICIPANT CONTRIBUTIONS - An eligible participant employed by the
Corporation (an "Employee") may elect to contribute to the Program as follows:
o on an after-tax basis ("Regular Savings"), up to 50% for 2004 and 40% for
2003, of an Employee's eligible salary as defined in the Program.
o on a tax-deferred basis ("Deferred Savings"), an amount of eligible salary
which is the lesser of (1) $13,000 and $12,000 for 2004 and 2003,
respectively or (2) up to 50% for 2004 and 40% for 2003 of the Employee's
eligible salary for a calendar year.
o in lieu of receiving a distribution from The General Motors Enhanced
Variable Pay Plan for Salaried Employees in the United States (the
"Variable Pay Plan"), an Employee may elect to have the Corporation
contribute, as Deferred Savings to the extent permissible under tax law,
up to 100%, in 10% increments, of any such amount, which vests
immediately.
o in lieu of receiving a flexible compensation payment from the Corporation,
an Employee may elect to have the Corporation contribute 100% of the
flexible compensation payment as Deferred Savings until the tax deferral
legal limit is reached and then any remaining portion of such payment will
be contributed as Regular Savings to the extent permissible under tax law.
In addition, an Employee also may elect to combine the first two contribution
methods disclosed above, provided that the sum of these contributions does
not total more than 50% for 2004 and 40% for 2003 of eligible monthly base
salary for any calendar year. The sum of all four of the above-described
methods of contribution may only exceed the above percentages of eligible
salary by an amount equal to the payout under the Variable Pay Plan, the
flexible compensation payment, and the catch-up contributions. As defined in
the Program document, the Corporation's total matching contribution will be
based on the Employee's Basic Savings contribution and is limited to 50% for
calendar year 2004 and 2003. Basic Savings as defined by the Program is
Employee savings up to 6% of an Employee's eligible monthly base salary.
6
GENERAL MOTORS SAVINGS-STOCK PURCHASE PROGRAM
FOR SALARIED EMPLOYEES IN THE UNITED STATES
NOTES TO FINANCIAL STATEMENTS - Continued
An Employee age 50 or older, or who will attain age 50 by the end of the
calendar year, and who is contributing at least 6% of their eligible monthly
base salary to their account, may be eligible to make "catch-up"
contributions to their account. A catch-up contribution may only be made on a
"pre-tax" basis up to the annual limit ($4,000 in 2004) set forth by the
Internal Revenue Service (the "IRS"), and only after a tax law limit has been
reached, such as the 401(k) annual contribution limit ($13,000 in 2004).
EMPLOYER CONTRIBUTIONS - The Corporation's matching contribution is invested
entirely in the GM $1-2/3 Par Value Common Stock Fund and such contributions
must remain invested in this fund during the period January through December
31, of the calendar year in which the contributions were made. This period is
referred to as the ("Required Retention Period").
An Employee hired on or after January 1, 1993 will automatically have a
Corporation contribution amount equal to 1% of the Employee's eligible
monthly base salary credited each pay period to such Employee's account upon
attainment of eligibility. This contribution is provided because such
Employee will receive different post-retirement benefit treatment from the
Corporation than Employees hired prior to January 1, 1993. Such contribution
will be credited to the Employee's account whether or not the Employee elects
to participate in the Program. This contribution is invested in the GM $1-2/3
Par Value Common Stock Fund, and such contribution must remain invested in
this fund during the Required Retention Period.
VESTING - Assets derived from employee contributions and related Corporation
contributions and earnings thereon vest immediately on allocation to the
employee's account except for employees with less than three years of
credited service for whom Corporation contributions and related earnings vest
on January 1 following the calendar year in which such contributions or
earnings are credited. Forfeitures are used to offset future employer
contributions.
FUND EXCHANGES - Participants may exchange funds between investment options
on any business day on which the New York Stock Exchange is open ("Business
Day"). However, employer contributions required to be invested in the GM
$1-2/3 Par Value Common Stock Fund may not be exchanged until completion of
the Required Retention Period.
REDEMPTION FEES-- Effective June 1, 2003, a 1% short-term trading fee on the
Promark International Equity Fund and the Promark Emerging Markets Equity
Fund was instituted. From time to time, certain funds may impose a redemption
fee if an investment is held for less than a stated period. If applicable,
these fees are disclosed in the individual mutual fund prospectuses which
contains additional information about each fund. The redemption fees are paid
to the respective funds and help protect the funds' performance and
shareholders by discouraging frequent trading in response to short-term
market fluctuations.
PARTICIPANT WITHDRAWALS - A participant may withdraw Deferred Savings in
their account at any time after attaining age 59-1/2. Prior to age 59-1/2,
Regular Savings may be withdrawn at any time, however, Deferred Savings may
only be withdrawn because of termination of employment, retirement, death,
total and permanent disability, or financial hardship. Prior to receiving a
withdrawal for financial hardship, a participant previously must have taken
all available asset distributions, withdrawals, and loans under all
applicable plans maintained by the Corporation. The amount that may be
withdrawn for a financial hardship is limited as defined in the Program. The
funds that represent a financial hardship withdrawal must conform to
conditions required by the IRS. A participant who receives a hardship
distribution shall have his or her contributions to the Program suspended for
a period of 12 months following the distribution.
7
GENERAL MOTORS SAVINGS-STOCK PURCHASE PROGRAM
FOR SALARIED EMPLOYEES IN THE UNITED STATES
NOTES TO FINANCIAL STATEMENTS - Continued
The Corporation pays certain costs of Program administration.
INVESTMENT OPTIONS - The Corporation's contributions are invested in the GM
$1-2/3 Par Value Common Stock Fund. One-half of an Employee's Basic Savings
up to 6% is required to be invested in GM $1-2/3 Par Value Common Stock Fund.
The remainder of an Employee's contributions will be invested at the
Employee's direction, in 10% increments, in any of the following investment
options:
o GM $1-2/3 Par Value Common Stock Fund,
o Promark Funds
o Mutual Funds
During 2003, employee contributions could be invested into the GM Class H
Common Stock Fund. Effective December 23, 2003 employee contributions could
no longer be invested into the GM Class H Common Stock Fund.
DESCRIPTION OF INVESTMENT OPTIONS:
General Motors $1-2/3 Par Value Common Stock Fund - Under this investment
option, contributions are invested by the Trustee primarily in General Motors
common stock. Each unit represents a proportionate interest in all of the
assets of the GM $1-2/3 Par Value Common Stock Fund. The number of units
credited to each participant's account within an applicable plan will be
determined by the amount of the participant's contributions and the purchase
price of a unit in the GM $1-2/3 Par Value Common Stock Fund. The value of
each participant's account is determined each Business Day by the number of
units to the participant's credit, multiplied by the current unit value. The
return on a participant's investment is based on the value of units, which,
in turn, is determined by the market price of GM common stock, the amount of
any dividends paid thereon, and by interest earned on short-term investments
held the fund.
Promark Funds - There are Promark funds as investment options for
participants in the Program. These funds have a variety of investment
strategies. Participants should refer to the Plan's Prospectus for further
information about the investment strategy of each fund option, and the risks
associated with each fund option.
Assets invested in the Promark funds are expressed in terms of units. The
number of units credited to a participant's account within an applicable plan
will be determined by the amount of participant's contributions and the
current value of each unit in the respective Promark fund. The value of each
participant's account is determined each Business Day by the number of units
to the participant's credit, multiplied by the current unit value.
Mutual Funds - This investment option is comprised of many different mutual
funds, which are managed by Fidelity Investments, Neuberger Berman Management
Inc., Domini Social Investments LLC, SSgA Funds Management, Inc., and Ariel
Capital Management, Inc. Each mutual fund has a different objective and
investment strategy. To pursue their objectives, the mutual fund managers
invest in a wide variety of investments. Complete information about each
mutual fund's objectives and investments is contained in that fund's
prospectus. Effective November 1, 2004, the following funds were added to the
Program: Ariel Fund, Ariel Appreciation Fund, Fidelity Inflation-Protected
Bond Fund, and Fidelity Strategic Dividend & Income Fund. Also effective
November 1, 2004, the following funds were eliminated from the Program:
Fidelity Trend Fund, Fidelity Disciplined Equity Fund, Fidelity Stock
Selector Fund, Fidelity International Discovery Fund (formerly Fidelity
International Growth & Income Fund), Fidelity Asset Manager, Fidelity Asset
Manager: Income, and Fidelity Asset Manager: Growth.
8
GENERAL MOTORS SAVINGS-STOCK PURCHASE PROGRAM
FOR SALARIED EMPLOYEES IN THE UNITED STATES
NOTES TO FINANCIAL STATEMENTS - Continued
Other Investments:
EDS Common Stock Fund - Effective June 7, 1996, the net assets of Electronic
Data Systems ("EDS") were split off from the net assets of the Corporation.
As a result, the Class E Common Stock Fund was changed to the EDS Common
Stock Fund. No new contributions, loan repayments, or exchanges may be made
into the EDS Common Stock Fund. Dividends, if any, paid on the stock held by
the Program will be invested in the Promark Income Fund investment option.
Assets held in this fund are expressed in terms of units and not shares of
stock. Each unit represents a proportionate interest in all of the assets of
this fund. The value of each participant's account is determined each
Business Day by the number of units to the participant's credit, multiplied
by the current unit value. The return on a participant's investment is based
on the value of units, which, in turn, is determined by the market price of
EDS common stock and by the interest earned on short-term investments held by
the fund.
DIRECTV Group Common Stock Fund - Effective December 23, 2003, GM Class H
stock was replaced with DIRECTV Group common stock and News Corporation
Preferred ADSs at the ratio of 84% and 16% respectively. The DIRECTV Group
Common Stock Fund will remain as an investment option; however, no further
contributions or exchanges from any other investment option into the DIRECTV
Group Common Stock Fund will be permitted during that time. Dividends if any
paid on the stock held by the Program will be invested in the Promark Income
Fund investment option.
Assets held in this fund are expressed in terms of units and not shares of
stock. Each unit represents a proportionate interest in all of the assets of
this fund. The value of each participant's account is determined each
Business Day by the number of units to the participant's credit, multiplied
by the current unit value. The return on a participant's investment is based
on the value of units, which, in turn, is determined by the market price of
DIRECTV Group common stock and by the interest earned on short-term
investments held by the fund.
News Corporation Non-Voting Common Stock Fund - Effective October 26, 2004,
shareholders approved the reorganization of News Corporation. As a result,
the News Corporation Preferred ADS Fund was eliminated and replaced by News
Corporation Non-Voting Common Stock Fund in the Program.
On November 4, 2004, News Corporation Preferred ADSs ceased trading on the
New York Stock Exchange. Holders of Preferred ADSs received in exchange two
shares of News Corporation non-voting common stock for each ADS held.
Accordingly, the News Corporation Preferred ADS Fund was eliminated and the
value of units in the fund were converted into units of a new commingled fund
known as the News Corporation Non-Voting Common Stock Fund. The News
Corporation Non-Voting Common Stock Fund will remain as an investment option;
however, no further contributions or exchanges from any other investment
option into the News Corporation Non-Voting Common Stock Fund will be
permitted during that time. Dividends, if any, paid on the stock held by the
Program will be invested in the Promark Income Fund investment option.
Assets held in this fund are expressed in terms of units and not shares of
stock. Each unit represents a proportionate interest in all of the assets of
this fund. The value of each participant's account is determined each
Business Day by the number of units to the participant's credit, multiplied
by the current unit value. The return on a participant's investment is based
on the value of units, which, in turn, is determined by the market price of
News Corporation Non-Voting Common Stock Fund and by the interest earned on
short-term investments held by the fund.
9
GENERAL MOTORS SAVINGS-STOCK PURCHASE PROGRAM
FOR SALARIED EMPLOYEES IN THE UNITED STATES
NOTES TO FINANCIAL STATEMENTS - Continued
Delphi Common Stock Fund - On May 28, 1999, GM completed the spin-off of
Delphi Corporation (Delphi). In connection with that spin-off, Delphi common
stock was distributed to holders of GM $1-2/3 par value common stock. Such
distribution required the addition of the Delphi Common Stock Fund as an
investment option. The Delphi Common Stock Fund will remain as an investment
option; however, no further contributions or exchanges from any other
investment option into the Delphi Common Stock Fund will be permitted during
that time. Dividends if any paid on the stock held by the Program will be
invested in the Promark Income Fund investment option.
Assets held in this fund are expressed in terms of units and not shares of
stock. Each unit represents a proportionate interest in all of the assets of
this fund. The value of each participant's account is determined each
Business Day by the number of units to the participant's credit, multiplied
by the current unit value. The return on a participant's investment is based
on the value of units, which, in turn, is determined by the market price of
Delphi common stock and by the interest earned on short-term investments held
by the fund.
Raytheon Common Stock Fund - Effective December 17, 1997, GM spun-off the
defense electronics business of Hughes Electronics Corporation, at the time,
a GM subsidiary (Hughes Defense), to holders of GM $1-2/3 par value and GM
Class H common stock, which was immediately followed by the merger of Hughes
Defense with Raytheon Company. In connection with the above transaction,
Raytheon common stock was distributed to holders of GM $1-2/3 par value and
GM Class H common stocks.
Such distribution required the addition of the Raytheon Common Stock Fund as
an investment option. No new contributions or exchanges from any other
investment options into the Raytheon Common Stock Fund are permitted.
Dividends, if any, paid on the stock held by the Program will be invested in
the Promark Income Fund investment option.
Assets held in this fund are expressed in terms of units and not shares of
stock. Each unit represents a proportionate interest in all of the assets of
this fund. The value of each participant's account is determined each
Business Day by the number of units to the participant's credit, multiplied
by the current unit value. The return on a participant's investment is based
on the value of units, which, in turn, is determined by the market price of
Raytheon common stock and by the interest earned on short-term investments
held by the fund.
GM has chosen to invest the General Motors $1-2/3 Par Value Common Stock
Fund, the EDS Common Stock Fund, the Raytheon Common Stock Fund, News
Corporation Non-Voting Common Stock Fund, DIRECTV Group Common Stock Fund and
the Delphi Common Stock Fund in commingled funds managed by State Street Bank
and Trust ("State Street"). State Street is responsible for anticipating
liquidity needs and maintaining sufficient cash levels to process participant
transactions, determining the daily number of shares of each individual
common stock to be purchased or sold, and obtaining the best prices for any
purchases or sales.
PARTICIPANT LOANS - Participants may borrow once per year from both their
Deferred Savings and Regular Savings assets (excluding Corporation
contributions, and earnings thereon subject to the required retention
period). The amount and terms of the loans are limited under the Program. The
loan interest rate will be established once each quarter at a rate equal to
the prime lending rate as of the previous quarter-end as published by the
Wall Street Journal and will apply to all new loans issued. Loan repayments
are generally made through after-tax payroll deductions and are invested in
the same discretionary investment options that the participant originally
selected for their savings contributions. Interest paid on the loans is
credited back to the borrowing employee's account in the Program. Partial and
total prepayment of loans is permitted at any time, without penalty. Loans
not repaid within the loan term are deemed to be distributions from
participants' accounts. Balances of participant loans were $247 million and
$243 million for 2004 and 2003, respectively.
10
GENERAL MOTORS SAVINGS-STOCK PURCHASE PROGRAM
FOR SALARIED EMPLOYEES IN THE UNITED STATES
NOTES TO FINANCIAL STATEMENTS - Continued
B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies followed in the preparation of the
accompanying financial statements are as follows:
o The financial statements of the Program are prepared under accounting
principles generally accepted in the United States of America using the
accrual method of accounting.
o Investments are stated at fair value, except for benefit-responsive
investment contracts, which are stated at contract value which
approximates fair value, and loans to participants, which are stated at
cost which approximates fair value. Fair values are calculated by
reference to published market quotations, where available; where not
available for certain common and collective trusts, various bases, are
used in determining estimates of fair values. Contract value represents
contributions and withdrawals made under the investment contracts, plus
credited earnings, which are net of expenses charged to the synthetic
contract.
o Security transactions are recorded on the trade date.
o Investment income is recognized as earned based on the terms of the
investments and the periods during which the investments are owned by the
Program.
The preparation of financial statements in accordance with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect amounts reported
therein. Due to the inherent uncertainty involved in making estimates, actual
results reported in future periods might differ from those estimates. The
Program utilizes various investment instruments including U.S. Government
Securities, corporate debt instruments, and corporate stocks. Investment
securities, in general, are exposed to various risks, such as interest rate,
credit, and overall market volatility. Due to the level of risk associated
with certain investment securities, it is reasonably possible that changes in
the values of investment securities will occur in the near term and that such
changes could materially affect the amounts reported in the financial
statements.
C. INVESTMENTS
All of the investments in the Program are held in the General Motors Savings
Plans Master Trust (the "Master Trust") as more fully described in Note D.
The investment in the Master Trust is both participant-directed and
non-participant directed.
The synthetic guaranteed investment contracts ("Contracts") owned by the
Program and held in the Master Trust are recorded at contract value and are
fully benefit-responsive in accordance with the American Institute of
Certified Public Accountants' Statement of Position 94-4, "Reporting of
Investment Contracts Held by Health and Welfare Benefit Plans and Defined
Contribution Pension Plans". The Contracts are included in the financial
statements at contract value as reported to the Master Trust by the insurance
company. Contract value represents contributions and withdrawals made under
the contract, plus credited earnings, which are net of expenses charged to a
contract. Participants may ordinarily direct the withdrawal or transfer of
all or a portion of their investment at contract value. Contract value of
such Contracts approximates fair value as of December 31, 2004 and 2003.
Synthetic guaranteed investment contracts operate similarly to a separate
account investment contract, except that the assets are placed in a trust
(with ownership by the Master Trust) rather than a separate account of the
contract issuer.
11
GENERAL MOTORS SAVINGS-STOCK PURCHASE PROGRAM
FOR SALARIED EMPLOYEES IN THE UNITED STATES
NOTES TO FINANCIAL STATEMENTS - Continued
The Contracts provide for prospective crediting interest rate adjustments
based on the interest earnings and fair value of the underlying trust assets.
The crediting interest rates are reset quarterly and the Contracts include
wrappers that provide that the crediting interest rates cannot be less than
zero. The average crediting rate of the synthetic investment contracts as of
December 31, 2004 and 2003 was approximately 4.79% and 5.12%, respectively.
The wrappers are entered into by the Master Trust to stabilize the income
generation of the Fund.
The average yield for the synthetic investment contracts within the Promark
Income Fund was approximately 4.5% and 4.9% for the years ended December 31,
2004 and 2003, respectively. There are no reserves against the contract value
for credit risk of the contract issuer or otherwise.
D. THE MASTER TRUST
The Corporation established the Master Trust pursuant to a trust agreement
among the Corporation, Saturn Corporation, and State Street Bank and Trust,
as trustee of the funds, in order to permit the commingling of trust assets
of several employee benefit plans for investment and administrative purposes.
The assets of the Master Trust are held by State Street Bank and Trust.
Employee benefit plans participating in the Master Trust as of December 31,
2004 include the following:
o General Motors Savings-Stock Purchase Program for Salaried Employees in
the United States
o The General Motors Personal Savings Plan for Hourly-Rate Employees in
the United States ("PSP")
o Saturn Individual Savings Plan for Represented Members, which merged into
the PSP on December 31, 2004
o General Motors Income Security Plan for Hourly-Rate Employees
Each participating employee benefit plan has an undivided interest in the net
assets and changes therein of each of the Master Trust investment options in
which the respective plan participates.
The net investment income of the commingled Master Trust investment funds
(the GM $1-2/3 Par Value Common Stock Fund, the EDS Common Stock Fund, the
Raytheon Common Stock Fund, the Delphi Common Stock Fund, DIRECTV Group
Common Stock Fund, the News Corporation Non-Voting Common Stock Fund, and the
Promark Funds) is allocated by the trustee to each participating plan based
on that plan's interest in each commingled Master Trust investment fund, as
compared with the total interest of all the participating plans, in each
commingled Master Trust investment fund at the beginning of the month. For
all other investment options, the net investment income is separately earned
by the respective employee benefit plan, and is thus recorded separately in
the accounting records of the respective plan.
As of December 31, 2004 and 2003, the Program had approximately 59% and 61%
interest in the Master Trust, respectively.
12
GENERAL MOTORS SAVINGS-STOCK PURCHASE PROGRAM
FOR SALARIED EMPLOYEES IN THE UNITED STATES
NOTES TO FINANCIAL STATEMENTS - Continued
The net assets available for benefits of the Master Trust at December 31,
2004 and 2003 are summarized as follows (dollars in thousands):
ASSETS: 2004 2003
--------- ---------
Investments at fair value:
General Motors Corporation $1-2/3 par
value common stock $3,205,807 $4,145,996
Electronic Data Systems common stock 50,565 62,815
Delphi Corporation common stock 154,272 197,925
DIRECTV Group common stock 369,937 466,099
News Corporation non-voting common stock 90,707 94,723
Raytheon common stock 78,749 69,696
--------- ---------
Total common stock 3,950,037 5,037,254
Mutual funds 7,157,159 6,473,483
Common and collective trusts 3,263,963 2,798,171
Loan funds 673,653 651,348
Other 137,688 143,656
---------- ----------
Total investments at fair value 15,182,500 15,103,912
Investments at contract value -
Guaranteed Investment Contracts 6,542,452 6,383,546
---------- ----------
Total investments 21,724,952 21,487,458
Receivables-
Accrued investment income 81 37
---------- ----------
Total receivables 81 37
---------- ----------
Total assets $21,725,033 $21,487,495
========== ==========
LIABILITIES-
Due to broker for securities purchased 1,590 1,815
---------- ----------
NET ASSETS AVAILABLE FOR BENEFITS $21,723,443 $21,485,680
========== ==========
13
GENERAL MOTORS SAVINGS-STOCK PURCHASE PROGRAM
FOR SALARIED EMPLOYEES IN THE UNITED STATES
NOTES TO FINANCIAL STATEMENTS - Continued
The total net investment income of the Master Trust for the years ended
December 31, 2004 and 2003 are summarized as follows (dollars in thousands):
2004 2003
--------- ---------
Income from guaranteed investment contracts $309,743 $319,210
Interest 33,493 39,236
Dividends 161,992 163,945
Net appreciation (depreciation) in fair
value of investments:
General Motors Corporation $1-2/3 par
value common stock (1,012,430) 1,296,970
Other common stock 17,508 273,135
Mutual funds 779,551 1,393,142
Common and collective trusts 347,378 585,264
--------- ---------
Total net appreciation 132,007 3,548,511
--------- ---------
Total net investment income $637,235 $4,070,902
========= =========
E. TRANSFERS
On April 12, 1999, the GM Board of Directors approved the complete separation
of Delphi by means of a spin-off, which was completed on May 28, 1999. Prior
to the spin-off, GM established the Delphi Savings-Stock Purchase Program
(the "Delphi Program"), modeled after the Program. On May 28, 1999, for those
employees who elected to do so, assets representing Delphi participants'
holdings in the Program were transferred and reinvested under the
corresponding investment options in the Delphi Program. As a result of the
separation, the Delphi Program was separated from the Program, and is now
administered by Delphi as a separate plan. On a very limited basis,
participants may elect to transfer their holdings between the Delphi Program
and the Program.
Effective March 1, 2004 Manual Transmissions of Muncie, LLC Savings Plan for
Salaried Colleagues ("Muncie Plan") merged into the Program. At that time all
assets related to the Muncie Plan transferred into the Promark Income Fund.
Effective December 30, 2004 Saab Cars USA, Inc. 401(k) Long-Term Savings
Plan ("Saab Plan") merged into the Program. At that time all assets related
to the Saab Plan transferred into the Promark Income Fund.
F. TERMINATION OF THE PROGRAM
Although it has not expressed any intent to do so, the Corporation has the
right to terminate the Program subject to the provisions of ERISA. Such
termination of the Program, if any, would not affect a participant's interest
in assets already in the Program.
G. FEDERAL INCOME TAXES
By letter dated April 3, 2000, the IRS has determined and informed the
Corporation that the Program is a tax-qualified employee benefit plan,
meeting the requirements of Sections 401(a), 401(k), and 4975(e)(7)of the
Internal Revenue Code of 1986, as amended (the "Code"), and the Trust
established thereunder was determined to be exempt from United States Federal
income taxes under Section 501(a) of the Code. The Program's fiduciary and
tax counsel believe that the Program is designed and currently being operated
in compliance with the applicable requirements of the Code, and therefore no
provision for income taxes has been included in the Program's financial
statements.
14
GENERAL MOTORS SAVINGS-STOCK PURCHASE PROGRAM
FOR SALARIED EMPLOYEES IN THE UNITED STATES
NOTES TO FINANCIAL STATEMENTS - Concluded
H. RELATED PARTY TRANSACTIONS
The Program and Master Trust enter into certain related party transactions.
These generally include investments with trustees, fund managers, the
Corporation and its subsidiaries. Such transactions are within the scope of
the investment guidelines.
I. SUBSEQUENT EVENTS
Effective April 1, 2005, the Program's employer matching contribution was
reduced from 50 cents to 20 cents for each dollar the employee contributes up
to the first 6% of base salary (referred to in the Program's prospectus as
"matching contributions"). GM's matching contributions continue to be subject
to change at GM's discretion.
15
GENERAL MOTORS SAVINGS-STOCK PURCHASE PROGRAM
FOR SALARIED EMPLOYEES IN THE UNITED STATES
Form 5500, SCHEDULE H, Part IV, Line 4i-
Schedule of Assets (Held at End of Year)
DECEMBER 31, 2004
(dollars in thousands)
Identity of Issuer, Borrower, Lessor or Current
Similar Party Value
* Participant loans, maturing through
December 31, 2009 with rates ranging
from 4.0% and 9.5% $247,486
=======
* Denotes parties-in-interest
16