Dear Stockholders: Our company is in a crucial period in its nearly 100-year history. I’m pleased to report that, in 2006, the entire GM team rose up to meet the collective challenges we face, and we stand today in a much better position than we did 12 months ago. Our focus now is to accelerate our momentum and truly transform our company for a second century of success.

Consider the progress we made in 2006:

• Excluding special items, adjusted net income improved by $5.4 billion to a profi t of $2.2 billion, or $3.88 per share fully diluted, on record revenue of $207 billion. Including restructuring and other charges, GM had a net loss in 2006 of $2 billion, which was an $8.4 billion improvement versus 2005.

• GM’s automotive business posted consistently improved results, including record global revenue, in all four quarters. Excluding special items, net income from automotive operations improved by more than $5.7 billion, totaling $422 million on an adjusted basis (reported net loss of $3.2 billion, an improvement of $6.9 billion).

• GM North America posted a $5-billion earnings improvement in 2006, with an adjusted net loss of $779 million (reported net loss of $4.6 billion). In the fourth quarter of 2006, GMNA recorded its fourth consecutive quarter of more than $1 billion improvement in adjusted earnings.

• And GM’s share price made a signifi cant recovery, leading the Dow Jones Industrial Average with a 60 percent increase in value for 2006.

Does this mean GM’s turnaround is complete? Not at all. Rest assured, nobody at GM is declaring victory. We all know there’s a lot more work to do to achieve our business goals of steady growth, solid profitability and positive cash generation. And yet, we improved further and faster in 2006 than many people thought possible.

We firmly believe that GM is headed in the right direction, with growing momentum – and that raises a critical point.

Returning GM to profitability is obviously very important, and we’re working intently to achieve that goal. But our objective is not just to change GM’s bottom line from red to black. Our fundamental goal is to transform General Motors for the long haul, to structure it for sustained profitability and growth, to set us up to be successful for years to come in the evermore-global auto business.

To achieve this goal, we have a very straightforward strategy: great cars and trucks that build strong brands, supported by industry-leading technology. Students of GM and the industry know this is not a new strategy. It’s the one that made GM number one more than 75 years ago; now, it’s re-making GM all over again, all over the world. ...

Investing in the Future

The most important element of our future success will always be great cars and trucks. To support that, and despite our financial challenges, we continue to raise spending on new products. In 2007 and 2008, we plan to spend $8.5 billion to $9 billion on capital investments, an increase of nearly $1 billion from 2005 and 2006. Last year, nearly 30 percent of our U.S. retail sales volume came from newly launched products, up from about 20 percent in 2005. In 2007, that number will grow.

In North America, we’ll launch a number of important new vehicles, including the 2008 Chevrolet Malibu family sedan and second-generation Cadillac CTS luxury sedan. Both won widespread praise at this year’s Detroit auto show for their compelling exterior designs, well-crafted interiors, improved fuel effi ciency and innovative features.

Of course, we’ll launch many other exciting cars and trucks throughout the world this year, including the Opel GT and Cadillac BLS wagon in Europe, the new Buick Park Avenue in China, the Chevrolet Matiz in India, the Chevrolet Captiva throughout our Latin America, Africa and Middle East region, and the Chevrolet HHR, which will be expanded into Europe and throughout the Asia Pacifi c region.

Only by introducing stylish, segment-leading cars and trucks will we improve the image and value of our brands and stand out among the many choices in the marketplace. That’s why we’re committed to ensuring that GM cars and trucks are design leaders, inside and out – cars like the Chevy Camaro convertible pictured on pages 20 and 21 of this year’s report.

The benefi ts of GM’s global product development system are increasingly evident – crisper product execution, shorter life cycles, better quality, lower cost and a real focus on making GM, once again, a design-driven company.

From Turnaround to Transformation

At GM, we made a lot of progress last year. Our performance was validation that we have the right strategy, and it’s working. Now we need to take it a lot further, as fast as we can.

Our goal is to fundamentally transform GM, into a globallyintegrated automaker that creates great cars and trucks, with outstanding design and the best technology, building strong brands – a company that is truly global, not just in terms of where we build and sell, but in our mindset.

As important as 2006 was for General Motors, 2007 will be equally critical, as we make continued progress and position your company for long-term, sustainable success.

We appreciate your continued support as we move rapidly on this important journey.

Rick Wagoner
Chairman and Chief Executive Offi cer
Detroit, Michigan

Read General Motors Corporation, 2006 Annual Report Online

There’s a major turnaround under way at GM.

We made broad and signifi cant progress in 2006. We accomplished more than people expected, and in many cases, we even surpassed our goals, on or ahead of schedule. We’re not fi nished. There’s much more to do.

But our growing confi dence and excitement is rooted in the fact that we’re not just fi xing problems. We’re transforming GM for fundamental, sustainable, long-term success.

Download General Motors Corporation, 2006 Annual Report

PDF format, 6MB, 132Pages.

Contents
3 Letter to Stockholders
4 Financial Highlights
10 Design Transformation
22 Global Transformation
28 Technology Transformation
36 People Transformation
42 At a Glance
44 Management’s Discussion and Analysis
67 Disclosure Controls and Procedures
68 Management’s Report on Internal Control over Financial Reporting
70 Report of Independent Registered Public Accounting Firm
72 Consolidated Financial Statements
76 Notes to Consolidated Financial Statements
125 Selected Financial Data
126 Board of Directors and Committees
128 Senior Leadership Group
Inside Back Cover
General Information

Visit General Motors Official Website

General Motors Corporation (GM) is engaged in the worldwide development, production and marketing of cars, trucks and parts. The Company develops, manufactures and markets vehicles worldwide through its four automotive regions: GM North America (GMNA), GM Europe (GME), GM Latin America/Africa/Mid-East (GMLAAM) and GM Asia Pacific (GMAP). Also, its finance and insurance operations are primarily conducted through GMAC LLC, the successor to General Motors Acceptance Corporation (GMAC LLC and General Motors Acceptance Corporation, or GMAC).

GMAC was a wholly owned subsidiary until November 30, 2006, when GM sold a 51% controlling ownership interest in GMAC to a consortium of investors (GMAC Transaction). GMAC provides a range of financial services, including consumer vehicle financing, automotive dealership and other commercial financing, residential mortgage services, automobile service contracts, personal automobile insurance coverage and selected commercial insurance coverage. (Google Finance)

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