General Motors Q3 2006 Earnings Call Transcript

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2006-10-25 12:05:48.0

Tags: General Motors Corp.

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from Scott Merlis - Thomas Weisel Partners.

Scott Merlis - Thomas Weisel Partners

Good morning, everybody. Just if we go back to the cash flow statement on page 23, the $2.9 billion for accrued expenses in other, is there any more granularity you can give us? For example, this 72-month sale and I assume the outlook for that type of number in the fourth quarter would be a little bit lower, but still meaningfully negative?

Fritz Henderson

A couple of things, Scott. We are not inclined to provide any more details beyond what we see here. What we tried to do is show both the quarter as well as the calendar year result, so you get a sense of what is happening across the calendar year as opposed to, let's say, June 30 to what is happening end of July. These numbers can bounce around. We would typically expect to see the third quarter being our toughest quarter from a cash perspective, and that is what happened.

In terms of the projections going into the fourth quarter and the calendar year, at this point, I'm not in a position to really talk about it.

Scott Merlis - Thomas Weisel Partners

Out of the $2.9 billion, any more granularity? The 72-hour sale, was it a large part of it or just immaterial?

Fritz Henderson

A lot goes on in this category -- a lot. But if you look at it, as we looked at what was happening, particularly in the third quarter, at the end of the second quarter, this number move more favorably than we would have thought. Frankly, it was largely the 72-hour sale, which we paid for in the month of July. So therefore, you end up having a reduction in the accrued expenses in other as a use of cash.

Scott Merlis - Thomas Weisel Partners

Right. My last question would be an update on the truck changeover and the SUV changeover. How is it going and where are the costs and cash flow effects? More in the fourth quarter or third quarter?

Fritz Henderson

I would say the impact in the third quarter is minimal, Scott. So in terms of the financial impact, none. I will let Paul talk about the startup.

Paul Ballew

The acceleration is going well, Scott. We are on plan, maybe slightly better than plan in the full-size pickup. And on the SUV startup we are on track.

 

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