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Welcome to the GM third quarter 2010 earnings results conference call.

During the presentation, participants will be in a listen-only mode.

As a reminder, this conference is being recorded Wednesday, November 10, 2010.

I would now like to turn the call over to Randy Arickx, Executive Director, GM Investor Relations and Communications.

Please go ahead, Randy.

Thanks, operator.

Good morning and thank you for joining us as we review our 2010 third quarter results.

As you know, our press release was issued earlier this morning and conference call materials are available on the Investor Relations website.

I would also like to highlight that GM is broadcasting this call live via the internet.

Before we begin, I would like to direct your attention to the legend regarding forward-looking statements on the first page of the chart set.

As always, the content of our call will be governed by this language.

This morning, Dan Akerson, CEO of General Motors, will provide opening remarks and a summary of our third quarter results followed by a more detailed review with Chris Liddell, Vice Chairman and CFO and then Dan Akerson will provide closing remarks.

Due to SEC guidelines, we will be limiting our comment to our third quarter results only.

We will be unable to take your questions but we will return to a normal format next quarter.

With that, I'll turn the call over to Dan Akerson.

Thanks, Randy and thank you, ladies and gentlemen, for joining us today on our call.

This morning, I'll provide a summary of our third quarter results and then Chris, our Vice Chairman and CFO will provide you with a more detailed review followed by my closing remarks as Randy noted.

I'm pleased to report that General Motors recorded a net income attributable to common shareholders of $2 billion.

Earnings before interest and taxes of $2.3 billion and free cash flow of $1.4 billion for the third quarter of 2010.

This marks our third consecutive quarter of solidly profitable results and positive cash flow for the Company.

We have significantly lowered our cost base and restructured General Motors North America to breakeven near the bottom of the cycle.

We have the number one market share and position in the combined BRIC markets -- Brazil, Russia, India, and China.

In fact, we just announced last week that we became the first global automaker to sell two million vehicles annually in China.

We have much improved balance sheet and we've recently announced $11 billion in actions to further reduce leverage.

Finally, the Company is focused on a clear, simple vision to design, build and sell the world's best vehicles.

We know we have much more work to do.

We still need to fix Europe.

We continue to be vigilant in reducing costs in the enterprise and we have just started doing a better job in marketing our brands to consumers.

I also want to ensure that we appropriately set expectations and let you know that while we expect to generate positive EBIT in the fourth quarter, it will be significantly lower than the run rate for each of the first three quarters of this year.

Having said that, this is for reasons we anticipated and will still cap off a very good first year for the new GM.

If you would go to slide two, and the summary of the third quarter 2010 results.

For the third quarter of 2010, net revenue was $34.1 billion, up $900 million from the second quarter.

Operating income was $1.9 billion, a $100 million improvement over the second quarter and net income attributable to common stock holders was $2 billion in line with preliminary results we released last week of $1.9 billion to $2.1 billion and a $700 million improvement versus the second quarter.

On a fully diluted basis and adjusted for the three-to-one stock split, GM's earnings per share were $1.20 for the third quarter.

Moving to the non-GAAP metrics in the bottom portion of the slide.

EBIT less adjusted was $2.3 billion for the third quarter, an increase of $300 million from the second quarter and also in line with the preliminary results we released last week.

Free cash flow was $1.4 billion for the third quarter.

Now I'd like to turn it over to Chris.

Thanks, Dan, and good morning everyone.

Slide three provides a look from our third quarter operating income to earnings before interest and taxes, that's EBIT, and EBIT Adjusted.

As previously reviewed, operating income was $1.9 billion for the third quarter.

We reported $400 million of equity income which is our proportionate share of income earned by our equity method investees, primarily our joint ventures in China.

Non-controlling interest was $100 million deduction for the third quarter.

This is related to the non-GM owned proportionate share of consolidated entities primarily GM/Daewoo.

Non-operating income was $100 million for the quarter primarily related to [rental] income and derivative gains.

This works down to a third quarter earnings before interest and tax or EBIT of $2.3 billion.

We had no adjustments in the third quarter so EBIT and EBIT Adjusted are the same at $2.3 billion.

Slide four shows the composition of third quarter EBIT by region.

I'll cover each region in more detail in the following slides but as you can see, GM North America and GM International posted solid EBIT of $2.1 billion and $600 million respectively.

GM Europe recorded a loss of $600 million on an EBIT basis and the corporate sector and eliminations totaled $100 million positive, primarily related to derivative gains.

After adjusting for rounding, this adds up to earnings before interest and tax of $2.3 billion for the third quarter.

Finally, as I mentioned we have no adjustments in the third quarter so our EBIT Adjusted is also $2.3 billion.

Slide five provides a summary of our global vehicle deliveries, and market share for the first three quarters of this year.

This includes vehicles sold around the world under GM and joint venture brands.

The third quarter of 2010, our global deliveries were approximately 2.1 million units, a decrease of 90,000 units versus the second quarter.

The decrease in deliveries is primarily attributable to a reduction in global industry volume.

The global industry was down approximately 600,000 units from the second quarter, 17.9 million units.

This reduction is related to a typical slowdown over the summer period.

On a seasonally adjusted annual rate, the third quarter came in at approximately 73.1 million units, up 1.5 million units versus the second quarter.

Our global share was 11.5% from the third quarter of 2010, down approximately 0.1 percentage point from the second quarter.

This reduction is primarily driven by our share reduction in GM North America, primarily offset by gains in GM Europe.

We will cover these in more detail in the following slides.

Turning to slide six, GM North America deliveries were 661,000 units for the third quarter, down 55,000 units from the second quarter.

The decrease was driven by a one percentage point reduction in market share to 17.7% and a 91,000 unit decrease in the North American vehicle industry.

As noted within the bars on the slide, Chevrolet, Buick, GMC and Cadillac deliveries totaled 658,000 units for the third quarter.

Non-core brand deliveries were only 3,000 units and would expect these deliveries, to be minimal going forward as US as non-core dealer inventories were less than a 1,000 units at the end of the third quarter.

US share for our four brands, Chevrolet, Buick, GMC and Cadillac, was 18.3% in the third quarter down one percentage point from the second quarter.

This decline was mainly attributable to planned reductions in fleet volume.

In the third quarter, fleet accounted for approximately 26% of our four brand sales to be at 34% in the second quarter.

In the fourth quarter we expect fleet penetrations to remain close to third quarter levels and range between 25% to 28% for the entire year.

Slide seven provides what we believe are important key performance indicators in North America and is a slide that we've shared with you for the last three quarters.

To briefly summarize the information here, the top line of the graph provides total US market share for GM, while the second line shows combined market share for our four brands, Chevrolet, Buick, GMC and Cadillac.

The bars at GM's average US retail incentives for our four brands based on JD Power PIN data.

We also provide GM's average four brand retail incentive as a percentage of ATP, and compare that to the industry average at the bottom of the slide.

To provide a little commentary on some of the underlying trends you'll notice that our top two lines, US total and US four brand share have converged as our discontinued brands now have minimal sales volume.

Also, you'll notice that our US four brand share has declined a bit during the third quarter and has since improved to approximately 19% for the month of October.

The third quarter decline was primarily attributable to reduced fleet sales as I previously mentioned.

Our US retail share was fairly stable at 16.2% for the third quarter versus 16.3% in the second quarter.

Our retail share improved to 17.5% in the month of October.

Moving to GM's average four brand retail incentives you'll notice these have trended down significantly during the course of the third quarter.

This is largely related to progress we've made in the sell down of our 2010 model year inventory.

At the end of the third quarter, approximately 75% of our US dealer inventory has made the transition to 2011 model year compared to only 12% at the end of the second quarter.

I'd also like to note that while we grew our share from 17.7% in September to 19% in October, we maintained our US four brand incentives at the low level of approximately $3,000.

Moving to the bottom of the slide we have GM's average four brand retail incentive as a percentage of ATP, that's average transaction prices, and compared to the industry average.

We feel this metric is important when looking at incentives as it adjusts for the mix of vehicles we sell that traditionally transact at higher prices and sometimes have higher corresponding incentives.

As you will note, our incentive percentage of average transaction price has decreased substantially over the last year from 12.9% in the third quarter of last year to 11% in the third quarter of this year.

Looking at the last two months of the third quarter, we were at industry levels and have maintained this in October despite growing share.

Turning to slide eight, GM North America net revenue was $21.5 billion for the third quarter.

The $1.2 billion increase in revenue versus the second quarter is primarily attributable to the favorable impact of pricing and mix.

The favorable mix is mainly driven by lower compact car volume as well as increased full-sized pickup volume.

As we prepared for the launch of the Cruze, compact cars only represented 1.2% of production in the third quarter versus 6.4% in the second quarter.

Additionally, full-size pickups represented approximately 27% of the production in the third quarter, up from 22.5% in the second as we work to stock dealers with 2011 model year vehicles.

US dealer inventory was 478,000 units at the end of the third quarter, an increase of 40,000 units over the second quarter.

Day supply was 83 at the end of the third quarter, up from 67 at the end of the second quarter.

However it's important to note that this calculation is based on the previous 30-day selling rate and is influenced by seasonal selling differences.

Looking at the increase in day supply, about 10 days is related to the reduced selling rate due to seasonality and lower fleet volume and the remainder is related to our inventory build.

Slide nine provides GM North America's EBIT for the first three quarters of 2010.

Third quarter EBIT was $2.1 billion, up $500 million from the second quarter.

We will review the key drivers for the sequential improvement on the next page.

However before I move on I just wanted to mention that despite the depressed US industry volumes that have run between 11.2 million to 11.8 million units on a seasonally adjusted basis for the first three quarters, GM North America has been solidly profitable.

Slide 10 walks the major components of the $500 million EBIT improvement from the second quarter to the third quarter.

Approximately $300 million of the improvement was related to the impact of volume and mix.

The net volume impact was negative $100 million which includes the negative impact of reduced industry volume and share of $300 million, partially offset by the favorable impact of dealer inventory builds of $200 million.

Mix was approximately $400 million favorable.

Price was favorable approximately $600 million due to lower incentive spending on the model year 2011 vehicles as well as lower fleet volumes.

Cost performance was essentially flat in the third quarter versus the second quarter.

Other was unfavorable approximately $400 million and this includes $200 million related to the absence of favorable lease residual adjustments that occurred in the second quarter, $300 million of unfavorable exchange related to the strengthening Canadian Dollar and our net liability position there, partially offset by $100 million of reserve adjustments.

Turning to slide 11, GM Europe deliveries for the third quarter totaled 391,000 units, down 52,000 units from the second quarter.

The reduction was primarily due to a 700,000 unit reduction in the European industry partially offset by a 0.1 percentage point increase in GM Europe's market share.

The magnitude of the European industry reduction is fairly normal for the summer season as evidenced by the third quarter seasonally adjusted selling rate of 18.2 million units versus 18.5 million in the second quarter.

The 0.1 percentage point increase in Europe market -- GM Europe market share in the third quarter is primarily attributable to gains in Germany.

Our share in Germany increased 0.5 percentage point to 8.5% primarily due to the strength in recent launch products including the Opel Meriva and Chevrolet Spark.

However this is partially offset by 1.2 percentage point drop in UK market share to 12.6% due to competitive pressures in the fleet and rental business.

On a marketing basis, Chevrolet deliveries were 119,000 units for the third quarter, down 10,000 units from the second.

GM Europe deliveries, excluding Chevrolet were 273,000 units, down 42,000 units for the second quarter.

As previously discussed, this is attributable to reductions in industry volume as Opel and Vauxhall's market share held stable in the third quarter at 6.2% and Chevrolet market share was up 2.2 percentage points versus the second quarter to 2.7%.

On slide 12, we have GM Europe revenue and production for the first three quarters of 2010.

GM Europe revenue was $5.7 billion for the third quarter, down $300 million from the second quarter.

The decline in revenue was primarily driven by the impact of a 45,000 unit reduction and production volume partially offset by the favorable impact of foreign exchange.

As seen on slide 13, GM Europe earnings before interest and tax was a loss of $600 million for the quarter.

This is a decline of $400 million from the second quarter and I'll just review those declines on the following slide.

On slide 14 provides the details of the $400 million reduction from the third quarter results to the second quarter.

The EBIT impact of volume and mix was unfavorable $200 million and that's mostly attributable to the decline in industry volumes associated with normal seasonality.

Pricing was in line with the second quarter.

Costs were also in line with the second quarter but include the favorable impact of $100 million in lower restructuring reserve adjustments and $100 million in lower production volume offset by a number of small items including increases in warranty reserves and increased intellectual property amortization.

There was unfavorable $200 million driven by the impact of unfavorable foreign exchange mainly due to a weaker British Pound.

Turning to slide 15, we had GM international operations deliveries for the third quarter of approximately one million units, up 18,000 units from the second quarter.

This increase was primarily attributable to the overall increase in the GM International industry which was up 130,000 units over the second quarter.

Total GM IO market share was flat at 10.3%.

Focusing on China, deliveries were 567,000 units, down 19,000 units in the second quarter.

This decline was mostly driven by seasonal decline in industry volume, partially offset by an increase in market share.

Our share in China was 13.6%, up 0.5% from the second quarter and part due to the strong performance of the new Chevrolet new sale in Cruze.

Our market share in Brazil declined 0.1 percentage point to 18.3% and in India, our share declined one percentage point to 3%.

The decline in India is primarily attributable to the high level of wholesale volumes in the first half of the year to stop the distribution network and support the of the launch of the Chevrolet Beat.

On a year-over-year basis, our share in China has been stable at approximately 3%.

However, due to the strength in the market and success of products like the Beat, our volume has increased approximately 28%.

Longer term, we are working to introduce new vehicles to the market with a start-up of a new joint venture with SAIC, a partner we've had tremendous success within China.

Slide 16 provides GM IO net revenue which was $8.7 billion for the third quarter, an increase of $100 million from the second quarter.

This improvement is primarily related to the impact of foreign -- favorable foreign currency exchange.

Turning to slide 17, GM IO's EBIT was $600 million for the quarter, down $100 million in round numbers from the second quarter.

However, one number is rounded up and the other is rounded down and the actual difference is a decline of just $26 million.

Equity income primarily related to our Shanghai-GM and SAIC-GM-Wuling joint ventures was $328 million for the third quarter, a decline of $37 million from the second quarter.

Slide 18 provides the work of GM IO's EBIT from the second quarter to the third quarter.

As I mentioned on the prior slide, GM IO's EBIT declined $26 million from $672 million in the second quarter to $646 million in the third quarter.

This was a result of a number of small items.

Turning to slide 19, we have the work from net income attributable to common shareholders to free cash flow.

For the third quarter, our net income attributable to common stock holders was $2 billion.

Operating add-back non-controlling interest as well as preferred dividends, net income was $2.2 billion.

Non-cash depreciation and amortization expenses totaled $1.7 billion for the third quarter and exceeded our capital expenditures by approximately $500 million.

Working capital was $500 million unfavorable to cash flows.

We built productive inventory to support the launch of the Cruze in North America as well as finished vehicle inventory in preparation for overseas shipments.

Pension, OPEB and other was unfavorable $800 million and this includes the impact of $250 million related to pension payments in excess of the accrual, $300 million related to non-cash equity income, and $250 million related to other accruals.

This walks us down to a net cash provided by operating activities of $2.6 billion for the third quarter.

After deducting our capital expenditures of $1.2 billion, free cash flow was $1.4 billion for the third quarter.

We expect capital expenditures to continue to accelerate in the fourth quarter in support of our launch products and total approximately $5 billion for the year.

Slide 20 provides what we view as our key balance sheet metrics.

Focusing on the third quarter, we maintain a strong liquidity position and had an ending cash and marketable security balance of $34.5 billion and $35.8 billion including available credit facilities.

Total debt had a face value of $10.3 billion or $8.6 billion book value in the third quarter.

The $400 million increase in book value versus the second quarter is primarily related to the impact of foreign currency.

Preferred stock issued to the UAW VEBA Trust and the United States and Canadian governments was unchanged at $7 billion book value or $9 billion face value.

Global underfunded pensions was $29.4 billion in the third quarter, $3 billion increase is primarily attributable to a remeasurement of our US Hourly Defined Benefit Pension Plan.

This remeasurement Incorporated a discount rate of 4.56% versus the 5.49% that we previously used as of December 31, 2009.

The impact of the lower discount rate was partially offset by higher than expected SS returns.

OPEB obligations were valued at $9.4 billion at the end of the third quarter, $100 million increase in the second quarter was primarily attributed to the impact of foreign currency.

As you know, we announced on October 28, $11 billion in capital actions to further reduce financial leverage and improve our pension funding position.

Of these announced actions, we've already completed the repayment of $2.8 billion VEBA note and established a $5 billion, five-year revolving credit facility.

We expect to record a $200 million non-cash gain related to the note repayment as the note was carried on our books at a value above par.

We currently don't see the revolving credit facility being drawn, however it does provide a source of back up liquidity if ever required.

Looking forward, we have three additional actions we have implemented conditional on the completion of our IPO.

First, we plan to purchase 2.1 billion of Series A preferred stock held by the United States Treasury.

Given the Series A preferred has recorded a discount for par in our books, we expect to record a non-cash loss related to this purchase of approximately $700 million.

Next, we plan to make voluntary contributions of $4 billion in cash and $2 billion in common stock to our US hourly and salary pension plans.

The stock contribution is contingent upon the Department of Labor approval which we expect to receive in the near term.

It will be valued as a plan asset for pension funding purposes at the time of contribution and for accounting purposes when the shares become fully transferable which we expect at a later date.

Finally upon completion of the IPO, we plan to terminate our wholesale advance agreement which provides for accelerated receipt of payments made by a financial institution on behalf of GM's US dealers.

This action will result in a nearly $2 billion increase in GM's accounts receivable balance on average depending on sales volumes and other factors but we will eliminate related costs.

In terms of how these $11 billion in actions will impact the September 30 key balance sheet items, our cash balance will reduce by approximately $11 billion, $2.8 billion for the repayment of the VEBA note, $2.1 billion for the purchase of US Treasuries Series A preferred, $4 billion for the cash US pension plan contribution, and $2 billion for the termination of the wholesale advance agreement.

This would put cash at approximately $23.5 billion but would expect an additional outflow of $3.5 billion related to the acquisition of GM Financial.

Adjusting for this we would still maintain a healthy cash balance of approximately $20 billion.

The revolver would add an additional $5 billion to available credit facilities to total $6.3 billion and our available liquidity would be a very healthy $26.3 billion.

Our debt and key preferred key obligations would be reduced by $3 billion for the book value of the VEBA note and $1.5 billion for the book value of the US Treasury Series A preferred and will total $5.6 billion and $5.5 billion respectively.

Our pension obligations would be reduced for the $4 billion in cash contributions and $2 billion in stock contributions and will total $23.4 million.

However, as I previously indicated the $2 billion in stock contributions for the pension funding will require Department of Labor approval and will not be counted as a planned asset for accounting purposes until the shares become fully transferable which we expect at a later date.

Turning to slide 21, I just wanted to take a moment and provide some color on outlook for the fourth quarter.

While we expect to post positive EBIT for the fourth quarter, we believe our results will be at a significantly lower run rate than each of the first three quarters.

This is due to business factors we anticipate including production mix in the fourth quarter and it is different from the first three quarters and new vehicle launch costs including those related to the introduction of the Chevrolet Cruze and Vault in the US and increased engineering expense in support of future products.

Also, additionally as I previously mentioned, we expect to record a non-cash charge of $700 million related to the purchase of the Series A preferred stock held by the United States Department of Treasury.

While we don't anticipate this will impact EBIT, it will impact net income attributable to common stockholders.

So with those comments, now I'd like to turn it back over to Dan for his summary and closing remarks.

Thanks, Chris.

I'd now like to close with slide 22.

I think the results of the third quarter clearly point to the amount of progress that GM has made that marks the third consecutive quarter of profitability and positive cash flow.

We expect to post solidly profitable results for the calendar year even though we anticipate our fourth quarter results will moderate significantly from the run rate of the first three quarters.

Although we are a different Company, it's worth recalling that the last time the old GM reported, a profitable calendar year was 2004.

We've arrived here because we continue to deliver on our major business objectives.

We've increased our global market share relative to the first quarter and on a year-to-date basis we have sold more vehicles in the US with four brands than we did last year with eight brands.

We've just launched the Chevrolet Cruze compact in the US in September and production of the Chevy Vault will begin as scheduled this month with vehicles arriving at US dealers later this year.

We continue to maintain our cost discipline and our focusing on executing our European restructuring plan.

Finally, we have recently announced actions to reduce leverage by $11 billion, improving the health of our balance sheet.

That about wraps up my remarks.

Thank you everyone for joining us today.

Ladies and gentlemen, this does conclude the conference call for today.

We thank you all for your participation and kindly ask that you please disconnect your lines.

Have a great day everyone.