General Motors Co. in Detroit today announced a $10 billion accelerated share repurchase (ASR) program and its intention to increase its common stock dividend by 33 percent beginning with the January 2024 declaration.
In connection with GM’s ASR program, the company will advance a total of $10.0 billion to the executing banks and will immediately receive and retire $6.8 billion worth of GM’s common stock. GM had approximately 1.37 billion shares of common stock outstanding prior to the ASR.
The total number of shares ultimately repurchased under the ASR program will be determined upon final settlement and will be based on the average of the daily volume-weighted average prices of GM’s common stock during the term of the ASR program. The ASR program is expected to conclude in the fourth quarter of 2024. The ASR program will be executed by Bank of America, N.A., Goldman Sachs & Co. LLC, Barclays Bank PLC and Citibank, N.A.
Outside of the ASR program, GM will have $1.4 billion of capacity remaining under its share repurchase authorization for additional, opportunistic share repurchases.
GM has also canceled the $6.0 billion revolving credit facility it entered in October and plans to enter into a new 364-day $3.0 billion committed credit facility with the banks executing the ASR acting as lenders.
GM also expects to increase its common stock dividend by three cents per quarter to 12 cents beginning in 2024.
“GM will deliver very strong profits in 2023 thanks to an exceptional portfolio of vehicles that customers love and our operating discipline,” says Mary Barra CEO and chair of GM. “We are finalizing a 2024 budget that will fully offset the incremental costs of our new labor agreements and the long-term plan we are executing includes reducing the capital intensity of the business, developing products even more efficiently, and further reducing our fixed and variable costs. With this clear path forward, and our strong balance sheet, we will return significant capital to shareholders.”
Company officials also stated that GM is reinstating its full-year 2023 earnings guidance. During 2023, GM twice raised its full-year earnings guidance before withdrawing it in the third quarter due to labor disruptions. GM’s reinstated guidance includes an estimated $1.1 billion EBIT-adjusted impact from the UAW strike, primarily from lost production.
GM now anticipates full-year 2023 capital spending to be $11 billion-$11.5 billion, which is at the low end of its prior guidance range of $11 billion-$12 billion, driven by the previously announced retiming of certain product programs and more capital-efficient investment.
Details released by GM today include:
- Net income attributable to stockholders of $9.1 billion-$9.7 billion, compared to the previous outlook of $9.3 billion-$10.7 billion.
- EBIT-adjusted of $11.7 billion-$12.7 billion, compared to the previous outlook of $12.0 billion-$14.0 billion.
- EPS-diluted in the $6.52-$7.02 range, including the estimated impact of the ASR, compared to the previous outlook of $6.54-$7.54.
- EPS-diluted-adjusted in the $7.20-$7.70 range including the estimated impact of the ASR, compared to the previous outlook of $7.15-$8.15.
- Net automotive cash provided by operating activities of $19.5 billion-$21.0 billion, compared to the previous outlook of $17.4 billion-$20.4 billion.
Adjusted automotive free cash flow of $10.5 billion-$11.5 billion, compared to the previous outlook of $7.0 billion-$9.0 billion.
