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deciphering financial statements general motors in 1993 general motors paid cash div 692557

Deciphering Financial Statements (General Motors)

In 1993, General Motors paid cash dividends on 11 different classes of capital stock. Those classes of stock were as follows:

 

Dividends

Total Dividends

 

per Share

(in millions)

Preferred stock, $500 series                                    

$168

$ 26

Preferred stock, $375 series                                   

126

10

Preferred stock, E I series                                     

142

46

Preferred stock, Series A Conversion                            

331

590

Depositary Shares, Series B                                    

228

1011

Depositary Shares, Series C                                   

325

1036

Depositary Shares, Series D                                   

198

311

Depositary Shares, Series G                                    

234

538

$1 2/3 par value common stock                                

080

5658

Class E common stock                                       

040

972

Class H common stock                                       

072

641

Total                                                   

 

$1,0839

1. The January 1, 1993, balance in General Motors’ retained earnings was a negative $3.354 billion. The December 31, 1993, balance was a negative $2.003 billion. How is it possible that General Motors was able to pay cash dividends during 1993?

2. This question will require a little research. What is the difference in stockholder rights between General Motors’ $12/3 common stock and the Class E and Class H common shares? How did the Class E and Class H shares come into existence?

3. In May 1993, General Motors redeemed all of the $5.00 series and $3.75 series preferred stock. The board of directors stated that the redemption of these preferred shares would give the company more financial flexibility by eliminating certain covenants associated with the shares. Get a copy of GM’s most recent annual report and find out how many of the 11 issues of General Motors’ capital stock outstanding in 1993 are still outstanding.

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