General Motors Corp · 10-K · For 12/31/03

Filed On 3/11/04 12:24pm ET   ·   SEC File 1-00043   ·   Accession Number 40730-4-48

Annual Report   ·   Form 10-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K        General Motors Corporation Form 10-K for 2003         93    558K 
 2: EX-3        Exhibit 3.I Restated Certificate of Incorporation     10     42K 
 3: EX-3        Exhibit 3.Ii Bylaws                                   22     94K 
 4: EX-12       Exhibit 12 Ratio of Earnings to Fixed Charges          2±     7K 
 5: EX-21       Exhibit 21 Subsidiaries of the Registrant              5     35K 
 6: EX-23       Exhibit 23 Consent of Independent Auditors             2±    10K 
 7: EX-31       Exhibit 31.1 Chairman and Ceo Certification            2±    10K 
 8: EX-31       Exhibit 31.2 Vice Chairman and Cfo Certification       2±    10K 
 9: EX-32       Exhibit 32.1 Chairman and Ceo Certification            1      7K 
10: EX-32       Exhibit 32.2 Vice Chairman and Cfo Certification       1      7K 

10-K   ·   General Motors Corporation Form 10-K for 2003
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, DC 20549-1004
 FORM 10-K

X   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE  
---  ACT OF 1934                                                                

 For the fiscal year ended December 31, 2003

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES   
---- EXCHANGE ACT OF 1934                                                       

 For the transition period from to

Commission file number 1-143

GENERAL MOTORS CORPORATION
(Exact Name of Registrant as Specified in its Charter)

STATE OF DELAWARE                                  38-0572515   
-----------------                                  ----------   
(State or other jurisdiction of                     (I.R.S. Employer    
Incorporation or Organization)                    Identification No.)   

300 Renaissance Center, Detroit, Michigan                  48265-3000           
-----------------------------------------                  ----------           
(Address of Principal Executive Offices)                   (Zip Code)           

 Registrant's telephone number, including area code (313) 556-5000
                                                    --------------

           Securities registered pursuant to Section 12(b) of the Act:

                                          Name of Each Exchange on
Title of Each Class                          Which Registered     
----------------------------                 -----------------------------  
Common, $1-2/3 par value                       New York Stock Exchange, Inc.    

Note:  The $1-2/3 par value common stock of the Registrant is also listed for   
trading or traded on the following exchanges:                     

Chicago Stock Exchange, Inc.               Chicago, Illinois        
Pacific Exchange, Inc.                     San Francisco, California
 Philadelphia Stock Exchange, Inc.          Philadelphia, Pennsylvania
Toronto Stock Exchange                     Toronto, Ontario, Canada 
 Frankfurter Wertpapierborse                Frankfurt am Main, Germany
Borse Dusseldorf                           Dusseldorf, Germany      
Bourse de Bruxelles                        Brussels, Belgium        
Euronext Paris                             Paris, France            
The London Stock Exchange                  London, England          

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements   
for the past 90 days. Yes X.  No      .                                         
-----         

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405  
of Regulation S-K is not contained herein, and will not be contained, to the    
best of registrant's knowledge, in definitive proxy or information statements   
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. Yes X No     .                                                       
----                                      

Indicate by check mark whether the registrant is an accelerated filer (as       
defined in Exchange Act Rule 12b-2). Yes X No     .                             
              ----

As of June 30, 2003, the aggregate market value of General Motors Corporation   
(GM) $1-2/3 par value common stock held by nonaffiliates of GM was              
approximately $20.2 billion.  The closing price on June 30, 2003 as reported on 
the New York Stock Exchange was $36.00 per share.  As of June 30, 2003, the     
number of shares outstanding of GM $1-2/3 par value common stock was            
560,712,564 shares.                                                             

Documents incorporated by reference are as follows:                             

                                           Part and Item Number of
                                        Form 10-K into Which
Document                                         Incorporated                 
--------------                                    -------------------------     

General Motors Notice of Annual Meeting of                                      
Stockholders and Proxy Statement for the                                  
Annual Meeting of Stockholders to be                                      
  to be held June 2, 2004                        Part III, Items 10 through 13

Website Access to Company's Reports                                             

General Motor's (GM's) internet website address is www.gm.com. Our annual       
reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form   
8-K, and amendments to those reports filed or furnished pursuant to section     
13(a) or 15(d) of the Exchange Act are available free of charge through our     
website as soon as reasonably practicable after they are electronically filed   
with, or furnished to, the Securities and Exchange Commission.                  

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PART I

 GENERAL MOTORS CORPORATION AND SUBSIDIARIES

 THE CORPORATION

  General Motors Corporation, incorporated in 1916 under the laws of the State
of Delaware, is hereinafter sometimes referred to as the "Registrant", the      
"Corporation", "General Motors", or "GM."                                       

ITEM 1.  Business                                                               

General                                                                         

The following information is incorporated herein by reference to the      
indicated pages in Part II:                                                     

Item                                                 Page(s)        
----                                                 ------------   

  Wholesale Sales                                      II-6 through II-8
Employment and Payrolls                              II-15          
Note 26 to the GM Consolidated Financial                            
      Statements (Segment Reporting)                     II-68 through II-71

GM presents separate supplemental financial information for the following 
businesses:                                                                     
o   Automotive and Other Operations                                       
o   Financing and Insurance Operations                                    

GM participates in the automotive industry through the activities of its  
 automotive business operating segment General Motors Automotive (GMA) which
is comprised of four regions:                                             
o   GM North America (GMNA),                                              
o   GM Europe (GME),                                                      
o   GM Latin America/Africa/Mid-East (GMLAAM), and                        
o   GM Asia Pacific (GMAP)                                                

GMNA designs, manufactures, and/or markets vehicles primarily in North    
America under the following nameplates: Chevrolet, Pontiac, GMC, Oldsmobile,    
Buick, Cadillac, Saturn, and HUMMER.                                            
 GME, GMLAAM, and GMAP primarily meet the demands of customers outside North
America with vehicles designed, manufactured, and/or marketed under the         
following nameplates: Opel, Vauxhall, Holden, Saab, Buick, Chevrolet, GMC, and  
Cadillac. GM's automotive regions also have equity ownership in Fiat Auto       
Holdings (FAH), Fuji Heavy Industries Ltd., Suzuki Motor Corporation (Suzuki),  
Isuzu Motors Ltd., Shanghai General Motors Corporation (SGM), SAIC-GM-Wuling    
Automobile Company Ltd., and GM Daewoo Auto & Technology Company (GM Daewoo).   
These investees design, manufacturer and market vehicles under the following    
nameplates: Fiat, Lancia, Alfa Romeo, Subaru, Suzuki, Isuzu, Buick, Wuling,     
Daewoo, and Chevrolet.                                                          
GM's other operations include the design, manufacturing and marketing of  
locomotives, the elimination of intersegment transactions, certain non-segment  
specific revenues and expenditures, and certain corporate activities.           
GM's Financing and Insurance Operations primarily relate to General Motors
Acceptance Corporation (GMAC). GMAC provides a broad range of financial         
services, including consumer vehicle financing, automotive dealership and other 
commercial financing, residential and commercial mortgage services, automobile  
service contracts, personal automobile insurance coverage and selected          
commercial insurance coverage. See related business discussion in GMAC's Form   
10-K, Item 1, which is incorporated herein by reference.  GMAC's Form 10-K is   
filed separately with the Securities and Exchange Commission (SEC).             
Until its split-off on December 22, 2003, GM's business included Hughes   
Electronics Corporation. Hughes' activities included digital entertainment,     
information and communication services, and satellite-based private business    
networks.                                                                       
Substantially all automotive-related products are marketed through retail 
dealers and distributors in the United States, Canada, and Mexico, and through  
distributors and dealers overseas. At December 31, 2003, there were             
approximately 7,700 GM vehicle dealers in the United States, 800 in Canada, and 
260 in Mexico. Additionally, there were a total of approximately 15,500 outlets 
overseas which include dealers and authorized sales, service, and parts outlets.

Raw Materials and Services                                                      

  GM purchases materials, parts, supplies, freight transportation, energy, and
other services from numerous unaffiliated firms. Interruptions in production or 
delivery of these goods or services could adversely affect GM.                  

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Backlog of Orders                                                               

Shipments of GM automotive products are made as promptly as possible after
receipt of firm sales orders; therefore, no significant backlog of unfilled     
orders accumulates.                                                             

Competitive Position                                                            

  GM's principal competitors in passenger cars and trucks in the United States
and Canada include Ford Motor Company, DaimlerChrysler Corporation, Toyota      
Corporation (Toyota), Nissan Motor Corporation, Ltd., Honda Motor Company, Ltd.,
Mazda Motor Corporation, Mitsubishi Motors Corporation, Volkswagen A.G.         
(Volkswagen), Hyundai Motor Company, Ltd. (Hyundai), and Bayerische Motoren     
Werke AG (BMW). All but Volkswagen and Hyundai currently operate vehicle        
manufacturing facilities in the United States or Canada. Toyota and GM operate  
the New United Motor Manufacturing, Inc. facility in Fremont, California as a   
joint venture which currently builds passenger cars and light-duty trucks.      
Suzuki and GM operate CAMI Automotive Inc. in Ingersoll, Ontario as a joint     
venture which currently builds light-duty trucks. Wholesale unit sales of GM    
passenger cars and trucks during the three years ended December 31, 2003 are    
summarized in Management's Discussion and Analysis of Financial Condition and   
Results of Operations in Part II.                                               
Total industry new motor vehicle (passenger cars, trucks, and buses) unit 
sales of domestic and foreign makes and GM's competitive position during the    
years ended December 31, 2003, 2002, and 2001 were as follows:                  

Vehicle Unit Sales (1)                                                          

                                                        [Enlarge/Download Table]



                                                Years Ended December 31,                             
                          2003                          2002                         2001            
                 ----------------------------------------------------------------------------------- 
                                    GM as                        GM as                        GM as  
                                    a % of                       a % of                       a % of 
                 Industry   GM     Industry   Industry   GM     Industry   Industry   GM     Industry
                 --------   --     --------   --------   --     --------   --------   --     --------
United States                                   (units in thousands)                                 
                                                                                                     
  Cars            7,630   1,961      25.7%     8,131   2,069      25.4%     8,455   2,272      26.9% 
  Trucks          9,336   2,796      29.9%     9,013   2,790      31.0%     9,020   2,633      29.2% 
                  -----   -----                -----   -----                -----   -----            
  Total United   16,966   4,757      28.0%    17,144   4,859      28.3%    17,475   4,905      28.1% 
States                                                                                               
Canada, Mexico,                                                                                      
and Other         2,855     683      23.9%     2,974     762      25.6%     2,775     686      24.7% 
                  -----     ---                -----   -----                -----   -----            
  Total GMNA     19,821   5,440      27.4%    20,118   5,621      27.9%    20,250   5,591      27.6% 
  GME            19,468   1,821       9.4%    19,172   1,765       9.1%    19,705   1,800       9.1% 
  GMLAAM          3,570     570      16.0%     3,673     565      15.7%     4,009     665      16.6% 
  GMAP           15,720     764       4.9%    14,373     674       4.6%    13,101     524       4.0% 
                 ------   -----               ------   -----               ------   -----            

Total Worldwide  58,579   8,595      14.7%    57,336   8,625      15.0%    57,065   8,580      15.0% 

(1) GM vehicle unit sales primarily represent vehicles manufactured by GM or    
manufactured by GM's investees and sold either under a GM nameplate or  
   through a GM-owned distribution network. Consistent with industry practice,
vehicle unit sales information employs estimates of sales in certain    
countries where public reporting is not legally required or otherwise   
available on a consistent basis.                                        

Research and Development                                                        

In 2003, GM spent $5.7 billion for research, manufacturing engineering,   
product engineering, and development activities related primarily to the        
development of new products or services or the improvement of existing products 
or services, including activities related to vehicle emissions control, improved
fuel economy, and the safety of persons using GM products. Comparably, $5.7     
billion and $6.1 billion were spent on company-sponsored research and other     
product development activities in 2002 and 2001, respectively.                  

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Environmental Matters                                                           

Automotive Emissions Control                                                    
 Both the U.S. Federal and California governments currently impose stringent
emission control requirements on motor vehicles sold in their respective        
jurisdictions. These requirements include pre-production testing of vehicles,   
testing of vehicles after assembly, the imposition of emission defect and       
performance warranties, and the obligation to recall and repair customer-owned  
vehicles determined to be non-compliant with emissions requirements.            
Both the U.S. Environmental Protection Agency (EPA) and the California Air
Resources Board (CARB) continue to place great emphasis on compliance testing of
customer-owned vehicles. Failure to comply with the emission standards or       
defective emission control systems or components discovered during such testing,
or discovered during government required defect reporting, can lead to          
substantial cost for General Motors related to emissions recalls. New CARB and  
Federal requirements will increase the time and mileage periods over which      
manufacturers are responsible for a vehicle's emission performance.             
Both the EPA and the CARB emission requirements will become even more     
stringent in the future. A new tier of exhaust emission standards for cars and  
light-duty trucks, the "Low-Emission Vehicles (LEV) II" standards, began phasing
in for California vehicles in the 2004 model year. Similar federal "Tier 2"     
standards will also start in 2004. In addition, both the CARB and the EPA have  
adopted more stringent standards applicable to future heavy-duty trucks.        
California requires that a specified percentage of cars and certain       
light-duty trucks be zero emission vehicles (ZEVs), such as electric vehicles or
hydrogen fuel cell vehicles. This requirement starts at 10% in model year 2003  
and increases in future years. Manufacturers have the option of meeting a       
portion of this requirement with partial ZEV credits, which are vehicles that   
meet very stringent emission standards and have extended emission system        
warranties. An additional portion of the ZEV requirement can be met with        
vehicles that meet these partial ZEV requirements and incorporate advanced      
technology, such as a hybrid electric propulsion system meeting specified       
criteria. Currently California is in the process of further amending its ZEV    
regulations, including delaying its start date until 2005. California is likely 
to finalize these amendments sometime in the first quarter of 2004.             
   The Clean Air Act permits states that have areas with air quality problems to
adopt the California car and truck emission standards in lieu of the federal    
requirements, and four states (New York, Massachusetts, Maine and Vermont) have 
done so. Additional states could adopt the California standards in the future.  
To provide states an alternative to the adoption of California standards, GM and
other auto manufacturers began selling LEVs in the remaining 45 states in 2001, 
under the provisions of the National Low Emission Vehicle Program.              
In addition to the above-mentioned exhaust emission programs, onboard     
diagnostic (OBD) devices, used to diagnose problems with emission control       
systems, were required both Federally and in California effective with the 1996 
model year. This system has the potential of increasing warranty costs and the  
chance for recall. OBD requirements become more challenging each year as        
vehicles meet lower emission standards, and new diagnostics are required.       
California has adopted more stringent OBD requirements beginning in the 2004    
model year, including new design requirements and more stringent enforcement    
procedures.                                                                     
New evaporative emission control requirements for cars and trucks began   
phasing in with the 1995 model year in California and the 1996 model year       
Federally. Systems are being further modified to accommodate Federal onboard    
refueling vapor recovery (ORVR) control standards. ORVR was phased-in on        
passenger cars in the 1998 through 2000 model years, and is phasing-in on       
light-duty trucks in the 2001 through 2006 model years. Beginning with the 2004 
model year, even more stringent evaporative emission standards apply in         
California, as well as Federally.                                               
   Starting in the 2001 model year, the test procedure for exhaust emissions has
become more complex with vehicles required to meet two additional test          
requirements: 1) measuring exhaust emissions over a new test cycle with the air 
conditioner operating; and 2) measuring exhaust emissions over a new high speed 
(80 mph) and high load cycle.                                                   

Industrial Environmental Control                                                
 GM is subject to various laws relating to the protection of the environment
including laws regulating air emissions, water discharges, waste management, and
environmental cleanup.                                                          

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Industrial Environmental Control (concluded)                                    
GM is in various stages of investigation or remediation for sites where   
contamination has been alleged, and recorded a liability of $226 million at     
December 31, 2003 and $219 million at December 31, 2002 for worldwide           
environmental investigation and remediation as summarized below:                

  .   GM has been identified as a potentially responsible party at sites
identified by the EPA and state regulatory agencies for     
       investigation and remediation under the Comprehensive Environmental
        Response, Compensation, and Liability Act (CERCLA) and similar state
  statutes.  GM voluntarily and actively participates in cleanup
 activity where such involvement has been verified.  The total
       liability for sites involving GM was estimated to be $85 million at
      December 31, 2003.  This compares with $86 million at December 31,
2002.                                                       

      .   For closed plants owned by the Corporation, an estimated liability for
          environmental investigation and remediation is typically recognized at
          the time of the closure decision. Such liability, which is based on an
        environmental assessment of the plant property, was estimated at $22
   million at December 31, 2003. This compares with $38 million at
December 31, 2002.                                          

.   GM is involved in investigation and remediation activities at   
 additional locations worldwide with an estimated liability of
       approximately $119 million at December 31, 2003. This compares with
$95 million at December 31, 2002.                           

 The cost impact of the Clean Air Act Amendments under Title V is the annual
emission fees of approximately $9 million per year. Additional programs under   
the Clean Air Act, including Hazardous Air Pollutant standards, and Compliance  
Assurance Monitoring and periodic monitoring requirements are estimated to cost 
$300 million to $500 million in aggregate through the year 2007.                
 The Corporation currently estimates that future expenditures for industrial
environmental control facilities through 2007 will be approximately $125        
million. Specific environmental expenses are difficult to isolate since         
expenditures may be made for more than one purpose, making precise              
classification difficult.                                                       

Vehicular Noise Control                                                         
Passenger cars and light-duty trucks are subject to state and local motor 
vehicle noise regulations. General Motors Corporation is committed to designing 
and developing all its products to meet these noise requirements. Addressing    
specific vehicle noise regulations for all state and local regulations however, 
is not practical or possible. The Corporation therefore compiles the most       
stringent requirement for all regulated markets and validates to the composite  
requirement. In instances where a state or local noise regulation is more       
stringent than the composite requirement, a waiver of the requirement is        
requested.                                                                      
   Medium to heavy-duty trucks are regulated at the Federal level. Federal truck
regulations preempt all state/local noise regulations for trucks over 10,000    
lbs. gross vehicle weight rating (GVWR).                                        

Automotive Fuel Economy                                                         
The Energy Policy and Conservation Act passed in 1975 provided for        
production-weighted average fuel economy standards for passenger cars for 1978  
and thereafter. Based on EPA combined city-highway test data, the GM 2003 model 
year domestic passenger car fleet is projected to attain a Corporate Average    
Fuel Economy (CAFE) of 28.7 miles per gallon (mpg) versus the standard of 27.5  
mpg. GM's CAFE estimate for 2004 model year domestic passenger cars is projected
at 28.8 mpg versus the standard of 27.5 mpg.                                    
   For GM's imported passenger cars, 2003 model year CAFE is projected to attain
28.2 mpg versus a standard of 27.5 mpg. The CAFE estimate for 2004 model year   
import passenger cars is 29.3 mpg versus the standard of 27.5 mpg.              
Fuel economy standards for light-duty trucks became effective in 1979.    
General Motors' light truck CAFE fleet average for the 2003 model year is       
projected at 21.1 mpg versus a standard of 20.7 mpg. GM's 2004 model year truck 
CAFE is projected at 21.2 mpg versus a standard of 20.7 mpg.                    
   GM's ability to meet increased CAFE standards is contingent on various future
economic, consumer, legislative, and regulatory factors that GM cannot control  
and cannot predict with certainty. If GM could not comply with any new CAFE     
standards, GM could be subject to sizeable civil penalties and could have to    
severely restrict product offerings or close plants to remain in compliance.    

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End of Life Vehicles                                                            
 During September 2000, the European parliament passed a directive requiring
member states to adopt legislation regarding end-of-life vehicles and the       
responsibility of manufacturers for dismantling and recycling vehicles they have
sold. European Union member states are required to transform the concepts       
detailed in the directive into national law. Under the directive, manufacturers 
are financially responsible for at least a portion of the cost of the take-back 
of vehicles placed in service after July 2002 and all vehicles placed in service
prior to July 2002 that are still in operation in January 2007. The laws        
developed in the individual national legislatures throughout Europe will effect 
the amount ultimately paid by the manufacturers for this issue. GM does not     
expect this legislation to have a material effect on its financial position,    
cash flow or results of operations.                                             

Seasonal Nature of Business                                                     

   In the automotive business, there are retail sales fluctuations of a seasonal
nature, and production varies from month to month. Certain changeovers occur    
throughout the year for reasons such as new market entries and new vehicle      
changes; however, the changeover period related to the annual new model         
introduction has traditionally occurred in the third quarter of each year.      
Production is typically lower during the third quarter due to these annual      
product changeovers and the fact that annual plant shutdowns are planned during 
this time to facilitate product changes. For this reason, third quarter         
operating results are, in general, less favorable than those in the other three 
quarters of the year. The degree to which the third quarter results are         
affected depends on the magnitude of the changeover needed to commence          
production of new models incorporating, for example, design modifications       
related to more fuel-efficient vehicle packaging, stricter government standards 
for safety and emission controls, and consumer-oriented improvements in         
performance, comfort, convenience, and style.                                   

Segment Reporting Data                                                          

   Operating segment and principal geographic area data for 2003, 2002, and 2001
are summarized in Note 26 to the GM Consolidated Financial Statements in Part   
II.                                                                             

 * * * * * *

The Registrant makes no attempt herein to predict the future trend of its 
business and earnings or the effect thereon of the results of changes in general
economic, industrial, regulatory, and international conditions.                 

ITEM 2.  Properties                                                             

The Corporation, excluding its Financing and Insurance Operations, has    
approximately 370 locations operating in approximately 40 states and            
approximately 210 cities in the United States. Of these, approximately 20 are   
engaged in the final assembly of GM cars and trucks; approximately 60 are       
service parts operations responsible for distribution or warehousing; and the   
remainder are offices or involved primarily in the testing of vehicles or the   
manufacturing of automotive components and power products. In addition, the     
Corporation has approximately 20 locations in Canada and assembly,              
manufacturing, distribution, or warehousing operations in approximately 50 other
countries, including equity interests in associated companies which conduct     
assembly, manufacturing, or distribution operations. The major facilities       
outside the United States and Canada, which are principally vehicle             
manufacturing and assembly operations, are located in Germany, the United       
Kingdom, Brazil, Mexico, Australia, Sweden, Belgium, Spain, China, Thailand,    
Argentina, Portugal, Poland and Korea.                                          
Most facilities are owned by the Corporation or its subsidiaries. Leased  
properties consist primarily of warehouses and administration, engineering, and 
sales offices. The leases for warehouses generally provide for an initial period
of five years and contain renewal options. Leases for sales offices are         
generally for shorter periods.                                                  
 Properties of the Registrant and its subsidiaries include facilities which,
in the opinion of management, are suitable and adequate for the manufacture,    
assembly, and distribution of their products.                                   
Additional information regarding worldwide expenditures for plants and    
equipment is presented in Note 26 to the GM Consolidated Financial Statements in
Part II.                                                                        

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ITEM 3.  Legal Proceedings                                                      

(a)    Material pending legal proceedings, other than ordinary routine          
     litigation incidental to the business, to which the Corporation became,
    or was, a party during the year ended December 31, 2003, or subsequent
 thereto, but before the filing of this report are summarized below:

Environmental Matters                                                           

In March 2003, the Michigan Department of Environmental Quality (MDEQ)    
asserted a claim for penalties in excess of $100,000 relating to various alleged
violations of air discharge regulations at the GM-Powertrain Saginaw Metal      
Castings Plant. Officials of GM and the MDEQ continue to discuss resolution of  
these matters.                                                                  

 * * *

 The US EPA Region V filed an Administrative complaint against three General
Motor's facilities on October 17, 2003. The three GM assembly facilities named  
in the complaint are Moraine, Ohio, Pontiac, Michigan, and Orion, Michigan. The 
complaint alleges multiple violations of the hazardous waste rules as applied to
GM's painting and purge operations. EPA seeks unspecified penalties. GM believes
that the lawsuit is without merit because the purge material in question is not 
a "waste" but instead is being used as intended in enclosed systems to clean,   
suspend paint solids, and transport fluids. The purge material is thereafter    
captured, reclaimed and reused by GM in its processes. The position being taken 
by EPA Regional V is the subject of a lawsuit filed by GM on August 2, 2002 in  
the DC Circuit Court of Appeals seeking an order by the Court declaring the     
position an unlawful "rulemaking" by US EPA.                                    

 * * *

Other Matters                                                                   

Six putative nationwide and statewide class actions are pending against   
General Motors in state and federal courts alleging that the paint or paint     
application process used on some GM vehicles was defective due to the omission  
of a primer surfacer layer. Generally, plaintiffs allege that GM's failure to   
disclose the alleged paint defect is a fraudulent omission and a violation of   
various states' consumer protection laws. No determination has been made that   
any case may proceed as a class action.                                         

With respect to the suits relating to the primer surfacer issue described 
above: Christian Amedee and Louis Fuxan v. General Motors Corporation, et al.,  
Civil District Court for the Parish of New Orleans, State of Louisiana filed    
March 24, 1995, Cherise Miller, et al., v. General Motors Corporation, United   
States District Court for the Northern District of Illinois, filed on April 8,  
1998 (the court determined that plaintiffs had not demonstrated that they could 
meet the requirements for certification of a nationwide class ), and Rose Ann   
Hayes v. General Motors Corporation et al. filed on May 22, 2001 in the Circuit 
Court for Madison County Illinois are purported nationwide class actions; Eddie 
Glorioso v. General Motors Corporation and Scott Arnold v. General Motors       
Corporation, consolidated in Superior Court for the City and County of San      
Francisco, California, both filed in July 1998, are purported California        
statewide class actions; Scott Haverdink v. General Motors Corporation, Court of
Common Pleas of Philadelphia County, Pennsylvania, filed on May 16, 1999, is a  
putative Pennsylvania statewide class action. Darryl Oshanek v. General Motors  
Corporation and General Motors of Canada, Limited, filed in the Supreme Court of
British Columbia, Canada, on June 2, 1999, is a putative class action on behalf 
of residents of British Columbia, has been dismissed. GM intends to vigorously  
oppose class certification and defend these cases.                              

 * * *

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Seventy-nine purported class actions on behalf of all purchasers of new   
motors vehicles in the United States since January 1, 2001, have been filed in  
various state and federal courts against General Motors Corporation, General    
Motors of Canada Ltd. and Ford, Daimler Chrysler, Toyota, Honda, Nissan and BMW 
and their Canadian affiliates, the National Automobile Dealers Association and  
the Canadian Automobile Dealers Association. The federal court actions have been
consolidated for coordinated pretrial proceedings in federal court in Main and  
the more than 30 California cases have been consolidated in state court in San  
Francisco.                                                                      
   The nearly identical complaints allege that the manufacture defendants, aided
by the association defendants, conspired among themselves and with their dealers
to prevent the sale to United States citizens of vehicles produced for the      
Canadian market and sold by dealers in Canada. The complaints allege that new   
vehicle prices in Canada are ten to thirty percent lower than those in the      
United States and that preventing the sale of these vehicles to United States   
citizens resulted in the payment of supracompetitive prices by United States    
consumers. The complaints seek treble damages under the antitrust laws, but do  
not specify damages. No determination has been made to certify any of these     
cases as a class action. General Motors believes its actions have been lawful   
and intends to vigorously defend these cases.                                   

 * * *

On April 11 and 14, 2003, two purported class actions (Young v. Pearce, et
al.; Silverstein v. Pearce, et al.) were filed in Delaware Chancery Court on    
behalf of owners of GM Class H shares against Hughes Electronics Corporation,   
General Motors Corporation, News Corporation and the Hughes directors. On April 
11 and 15, 2003, two purported class actions (Matcovsky, et al., v. Hughes      
Electronics Corporation, et al.; Brody v. Hughes Electronics Corporation, et    
al.) were filed in Superior Court in Los Angeles, California, against Hughes, GM
and the Hughes and GM directors. Two purported stockholder class actions which  
name only General Motors and the GM directors have been brought in Delaware     
Chancery Court challenging the recently announced agreements with News Corp.,   
Wyser-Pratte Management Company v. General Motors Corporation, et al., which was
filed April 18, 2003, and Robert LaMarche v. General Motors Corporation, et al.,
which was filed April 28, 2003. The Delaware cases have been consolidated in the
Delaware Chancery Court and the California cases have been consolidated in state
court in Los Angeles and plaintiffs in both cases have filed consolidated       
complaints.                                                                     
  The Delaware cases allege that GM and the GM directors performed ultra vires
acts and that the GM directors breached their fiduciary duties by approving a   
transaction that is more favorable to the holders of GM $1-2/3 par value common 
stock than the holders of GM Class H Common stock. They claim that the holders  
of GM Class H Common Stock will be treated unfairly because (i) GM will receive 
mostly cash for its shares while the holders of GM Class H Common Stock will    
receive News Corp. American Depositary Shares (ADSs) that may fluctuate in      
value, (ii) GM will be receiving a $275 million payment from Hughes, (iii) a    
substantial number of shares of GM Class H Common Stock were contributed to     
various GM employee benefit plans prior to announcement of the deal to improve  
the prospects of shareholder approval, and (iv) the transaction was announced   
just prior to the announcement of improved financial results at Hughes and      
PanAmSat to make it appear that holders of GM Class H Common Stock would receive
a premium that would exceed the 20 percent recapitalization premium provided    
for in the GM Restated Certificate of Incorporation, as amended. The California 
cases allege that the proposed transactions involving News Corp.'s acquisition  
of a 34% interest in Hughes provides benefits to GM not available to all GM     
Class H shareholders, in violation of fiduciary duties. The new consolidated    
complaints are similar to the original complaints, except that the Delaware     
complaint adds allegations challenging the adequacy of the disclosures in the   
Consent Solicitation and only names GM and members of the GM board of directors 
as defendants. Plaintiffs in both cases seek unspecified damages. GM has moved  
to dismiss the Delaware cases and plaintiffs are seeking to amend their         
complaint. In the California cases, the claims against directors without any    
connection to California have been dismissed and the consolidated case has been 
stayed pending a ruling on the motion to dismiss the Delaware consolidated      
complaint. GM, Hughes and the director defendants believe these actions are     
without merit and intend to vigorously defend the lawsuits.                     

(b)    Previously reported legal proceedings which have been terminated, either 
 during the year ended December 31, 2003, or subsequent thereto, but
before the filing of this report are summarized below:            

On January 20, 2003, the Georgia Department of Natural Resources (GDNR)   
delivered a proposed consent order with respect to alleged violations of        
hazardous waste regulations at GM's plant in Doraville, Georgia seeking fines in
excess of $100,000. GM denies the alleged violations, but amicably resolved them
by entering into and administrative consent order No. EPD-HW-1534 with the GDNR.
A $50,000 settlement was paid by GM to the State of Georgia under this consent  
order, effective October 23, 2003.                                              

 * * * * * * * * *

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ITEM 4.  Submission of Matters to a Vote of Security Holders                    

NONE                                                                            

ITEM 4A.  Executive Officers of the Registrant                                  

The names and ages of all executive officers of the Registrant and their  
positions and offices with the Registrant are as follows:                       

Name and (Age)                          Positions and Offices                   
-------------                           ---------------------                   

G. Richard Wagoner, Jr. (51)            Chairman and Chief Executive Officer    

John M. Devine (59)                     Vice Chairman and Chief Financial       
             Officer

Robert A. Lutz (72)                     Vice Chairman of Product Development,   
                                   Chairman of GM North America,
                                    Interim President of GM Europe

Thomas A. Gottschalk (61)               Executive Vice President, Law and       
                   Public Policy

The following information pertains to all other officers of the Registrant
who file reports pursuant to Section 16(b) of the Securities Exchange Act of    
1934, as amended:                                                               

Name and (Age)                          Positions and Offices                   
-------------                           ---------------------                   

Troy A. Clarke (48)                     Group Vice President, Manufacturing and 
                     Labor Relations

Gary Cowger (56)                        Group Vice President and President,     
                      GM North America

Eric A. Feldstein (44)                  Group Vice President and Chairman,      
                               General Motors Acceptance
                 Corporation

Frederick A. Henderson (45)             Group Vice President and President,     
                     GM Asia Pacific

Maureen Kempston-Darkes (55)            Group Vice President and President,     
                                  GM Latin America, Africa and
                 Middle East

Thomas G. Stephens (55)                 Group Vice President, GM Powertrain     

Ralph J. Szygenda (55)                  Group Vice President,                   
                              Information Systems, and
                               Chief Information Officer

Kathleen S. Barclay (49)                Vice President, Global Human Resources  

Lawrence D. Burns (52)                  Vice President, Research & Development  
                  and Planning

Thomas J. Kowaleski (52)                Vice President, Communications          

Peter R. Bible (45)                     Chief Accounting Officer                

Walter G. Borst (42)                    Treasurer                               

Paul W. Schmidt (59)                    Controller                              

There are no family relationships, as defined, between any of the officers
named above, and there is no arrangement or understanding between any of the    
officers named above and any other person pursuant to which he or she was       
selected as an officer. Each of the officers named above was elected by the     
Board of Directors to hold office until the next annual election of officers and
until his or her successor is elected and qualified or until his or her earlier 
resignation or removal. The Board of Directors elects the officers in           
conjunction with each annual meeting of the stockholders.                       

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ITEM 4A.  Executive Officers of the Registrant - continued                      

Mr. G. Richard Wagoner, Jr. has been associated with General Motors since 
1977. Mr. Wagoner was elected Vice President in charge of finance for General   
Motors Europe in June 1989. In July 1991, he was elected President and Managing 
Director of General Motors do Brasil. In November 1992, he was elected Executive
Vice President and Chief Financial Officer of General Motors. In July 1994, he  
was named President of North American Operations. In October 1998, he was       
elected a director, President and Chief Operating Officer of General Motors. On 
June 1, 2000, Mr. Wagoner was named Chief Executive Officer and became Chairman 
of the Board of Directors on May 1, 2003. Mr. Wagoner is Chairman of the        
Automotive Strategy Board.                                                      

Mr. John M. Devine was named Vice Chairman and Chief Financial Officer of 
General Motors Corporation, effective January 1, 2001. He has responsibility for
GM's Worldwide Financial Operations and GM Asset Management. He is a member of  
the GM Automotive Strategy Board and serves as its global process leader for    
finance. Mr. Devine was Chairman and Chief Executive Officer of Fluid Ventures, 
LLC, immediately prior to his GM appointment. He retired from Ford Motor Company
in October 1999, after a 32 year career, as the company's Executive Vice        
President and Chief Financial Officer.                                          

  Mr. Robert A. Lutz was named Vice Chairman of Product Development of General
Motors Corporation, effective September 1, 2001. He was named Chairman of GM    
North America on November 13, 2001, and was appointed interim president of GM   
Europe on March 1, 2004 until June 1, 2004. He serves as global process leader  
for Product Development and is a member of the Automotive Strategy Board and the
North America Strategy Board. Mr. Lutz was Chairman and Chief Executive Officer 
of Exide Technologies, immediately prior to his GM appointment. He continues to 
serve as a member of Exide's board of directors. He also has held a number of   
executive positions with Ford Motor Company until 1986 and the former Chrysler  
Corporation from which he retired in 1998.                                      

  Mr. Thomas A. Gottschalk has been associated with General Motors since 1994.
He previously held the position of Senior Vice President and General Counsel. He
was elected to the position of Executive Vice President of General Motors with  
primary responsibility for Law and Public Policy on May 25, 2001. He retains the
General Counsel responsibility in his current position and is also responsible  
for the Office of the Secretary. He is a member of the Automotive Strategy Board
and is the global process leader for Law and Public Policy. Prior to General    
Motors, he was a partner and member of the management committee of the law firm 
of Kirkland & Ellis in Washington, D.C.                                         

Mr. Troy A. Clarke was appointed Group Vice President and Executive Vice  
President, GM Asia Pacific on February 4, 2004, and President of GM Asia        
Pacific, effective June 1, 2004. Mr. Clarke was named GM group vice president of
manufacturing and labor relations in June 2002. Mr. Clarke had been vice        
president of labor relations since January 2001 and was appointed president and 
managing director of GM de Mexico and a GM corporate vice president in December 
1997, after having served as director of manufacturing for GM de Mexico since   
June 1997. Mr. Clarke is a member of the Automotive Strategy Board.             

Mr. Gary L. Cowger has been associated with General Motors since 1965. Mr.
Cowger was elected a Vice President of General Motors Corporation, effective    
October 1, 1994. On September 1, 1994, he was appointed President and Managing  
Director of General Motors de Mexico. Mr. Cowger was then named Vice President, 
Manufacturing, General Motors Europe, on January 1, 1998 and Chairman and       
Managing Director of Adam Opel AG effective June 19, 1998. Mr. Cowger became    
Group Vice President - Labor Relations, on November 1, 1998 and Group Vice      
President in charge of GM Manufacturing and Labor Relations on January 1, 2001. 
He was named GM Group Vice President and President of General Motors North      
America on November 13, 2001. He is a member of the Automotive Strategy Board,  
global process leader for Manufacturing, and Chairman of the North America      
Strategy Board.                                                                 

   Mr. Eric A. Feldstein has been associated with General Motors since 1981. Mr.
Feldstein was named GM Vice President and Treasurer in 1997 and GM Vice         
President of Finance and Treasurer in 2001. He was named GM Group Vice President
and Chairman of General Motors Acceptance Corporation (GMAC) in November 2002.  
He is a member of the Automotive Strategy Board and Chairman and President of   
the GMAC Mortgage Group.                                                        

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ITEM 4A.  Executive Officers of the Registrant - concluded                      

Mr. Frederick A. Henderson has been associated with General Motors since  
1984. From 1997 to 2000, Mr. Henderson was GM Vice President and Managing       
Director of GM do Brasil, and from June 1, 2000 served as Group Vice President  
and President of the GM Latin America, Africa and Middle East (LAAM) region. He 
was named GM Group Vice President and President of General Motors Asia Pacific  
effective January 1, 2002. Effective June 1, 2004, he was appointed Group Vice  
President and President of GM Europe. He is currently a member of the Automotive
Strategy Board and Chairman of the Asia Pacific Strategy Board.                 

Ms. Maureen Kempston-Darkes has been associated with General Motors since 
1975. Ms. Kempston-Darkes was GM Vice President and President and General       
Manager of General Motors of Canada Limited from 1994 to 2001. She was named GM 
Group Vice President and President of GM LAAM effective January 1, 2002. She is 
a member of the Automotive Strategy Board and Chairman of the Latin America,    
Africa, and Middle East Strategy Board.                                         

Mr. Thomas G. Stephens is the Group Vice President responsible for GM     
Powertrain. He is a member of the Automotive Strategy Board and Chairman of GM's
Energy and Environmental Strategy Board. From May 1996 through December 2000,   
Mr. Stephens was GM vice president and group director of engineering operations 
for the GM Truck Group. He was appointed vice president of vehicle integration  
in January 2001 and held this position prior to being named group vice president
for GM Powertrain in 2001.                                                      

Mr. Ralph J. Szygenda was named Group Vice President and Chief Information
Officer on January 7, 2000. He is a member of the Automotive Strategy Board and 
is responsible for the Information Systems & Services organization. Mr. Szygenda
is a member of the board of directors of the Handleman Company. He joined GM in 
1996 as Vice President and Chief Information Officer.                           

 Ms. Kathleen S. Barclay has been associated with General Motors since 1985.
She was elected Vice President in charge of global human resources and General  
Motors University in 1998. Prior to that she was general director of human      
resource management at GM North America Operations since 1996. She is a member  
of the Automotive Strategy Board.                                               

  Mr. Lawrence D. Burns has been associated with General Motors since 1969. He
was named Vice President of Research & Development and Planning in May 1998. He 
is a member of the Automotive Strategy Board and serves as global process leader
for R&D and Planning.                                                           

Mr. Thomas J. Kowaleski was elected Vice President in charge of global GM 
communications, effective January 1, 2004. He is a member of the GM Automotive  
Strategy Board and directs GM's corporate, product, brand, and internal         
communications around the world. Mr. Kowaleski joined General Motors in March   
1999 as executive director product and brand communications. He became GM North 
America vice president of communications in June 2001. He is a member of the    
Automotive Strategy Board.                                                      

Mr. Peter R. Bible joined General Motors as Chief Accounting Officer in   
December 1996. He is responsible for worldwide accounting, financial reporting  
and forecasting; Securities and Exchange Commission (SEC) reporting; financial  
controls; financial systems development; and government contract accounting.    

  Mr. Walter G. Borst assumed the role of General Motors Treasurer in February
2003. Prior to that assignment, Mr. Borst was executive director of finance and 
chief financial officer for GM's German subsidiary, Adam Opel AG. Borst was     
named chief financial officer of Adam Opel AG, based in Russelsheim, Germany, in
October 2000. Prior to that, he served as assistant treasurer in the GM         
Treasurer's Office from 1997 to 2000.                                           

Mr. Paul W. Schmidt has been associated with General Motors since 1969. He
was named Controller in 2002. Mr. Schmidt had been executive-in-charge of GM's  
investor relations since August 2001. Prior to that, he was executive-in-charge 
of GM North America Finance since 1994.                                         

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ITEM 5.  Market for the Registrant's Common Equity and Related Stockholder      
Matters                                                       

 General Motors (GM) lists its common stock on the stock exchanges specified
on the cover page of this Form 10-K under the trading symbol "GM". On December  
22, 2003, General Motors completed the split-off of Hughes by distributing      
Hughes common stock to the holders of GM Class H (GMH)common stock in exchange  
for all the outstanding shares of GM Class H common stock. Simultaneously,      
GM sold its 19.8 percent economic interest in Hughes to News Corporation in     
exchange for cash and News Corporation Preferred American Depositary Shares     
(Preferred ADSs).                                                               

All GMH stock ceased to be outstanding and accordingly was delisted from  
exchanges specified on the cover page of this report. GM's Dividend Policy is   
described in the Management's Discussion and Analysis (MD&A) in Part II. As of  
December 31, 2003, there were 418,540 holders of record of GM $1-2/3 par value  
common stock and no shares of GMH. As of December 31, 2002, there were          
429,767 holders of record of GM $1-2/3 par value common stock and 177,355       
holders of record of GM Class H common stock. The following table sets forth the
high and low sale prices of GM's common stocks as reported on the Composite Tape
and the quarterly dividends declared for the last two years.                    

                                           2003 Quarters
                                           -------------
                                           1st       2nd       3rd       4th
                                           ---       ---       ---       ---
Cash dividends per share of common stocks                                       
 $1-2/3 par value                         $0.50     $0.50     $0.50    $0.50
Class H                                  $-        $-        $-       $-  

Price range of common stocks                                                    
$1-2/3 par value (1): High               $41.12    $39.50    $43.23   $54.39
                      Low                $29.75    $32.84    $35.00   $40.04
Class H (1):          High               $12.41    $13.56    $15.10   $16.72
                      Low                 $9.40    $10.17    $12.74   $14.25

                                           2002 Quarters
                                           -------------
                                           1st       2nd       3rd       4th
                                           ---       ---       ---       ---
Cash dividends per share of common stocks                                       
 $1-2/3 par value                         $0.50     $0.50     $0.50    $0.50
Class H                                  $-        $-        $-       $-  

Price range of common stocks                                                    
$1-2/3 par value (1): High               $62.01    $68.17    $54.08   $41.50
                      Low                $47.92    $50.00    $38.11   $30.80
Class H (1):          High               $17.55    $17.00    $11.25   $12.00
                      Low                $12.50     $8.49     $8.35    $8.00

--------------------                                                          
(1) The principal market is the New York Stock Exchange, and prices are based on
the Composite Tape.                                                     

   The table below contains information about securities authorized for issuance
under equity compensation plans. The features of these plans are described      
further in Note 23 to the Consolidated Financial Statements in Part II.         

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ITEM 5.  Market for the Registrant's Common Equity and Related Stockholder      
Matters (concluded)                                           

                         Number of                           Number of
                      securities to be  Weighted average      securities
                        issued upon     exercise price       remaining
                          exercise of     of outstanding     available for
Plan Category                outstanding        options,       future issuance  
                           options,        warrants and       under equity
                         warrants and         rights          compensation
                          rights                             plans (1)
------------------------------------------------------------------------------- 
Equity compensation plans                                                       
approved by security                                                        
holders:                                                                    
GMSIP                     74,485,566         $54.38            17,194,942   

Equity compensation plans                                                       
not approved by security                                                    
holders (2):                                                                
GMSSOP                    24,390,056         $55.33             3,626,225   
------------------------------------------------------------------------------- 
Total                       98,875,622         $54.61            20,821,167     
------------------------------------------------------------------------------- 

(1) Excludes securities reflected in the first column, "Number of securities to 
be issued upon exercise of outstanding options, warrants and rights."   
(2) All equity compensation plans except the GMSSOP were approved by the        
  shareholders. The GMSSOP was adopted by the Board of Directors in 1998 and
expires December 31, 2007. The purpose of the plans is to recognize the 
  importance and contribution of GM employees in the creation of stockholder
 value, to further align compensation with business success and to provide
 employees with the opportunity for long-term capital accumulation through
the grant of options to acquire shares of General Motors common stock.  

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ITEM 6.  Selected Financial Data                                                

                            Years Ended  December 31
                             2003      2002      2001       2000      1999
                             ----      ----      ----       ----      ----
                              (dollars in millions except per share amounts)

Total net sales and revenues $185,524  $177,324  $169,051   $173,943  $168,964  
                            =======   =======   =======    =======   =======

Income from continuing                                                          
operations                   $2,862    $1,975    $1,222     $3,639    $5,867
Income (loss) from                                                              
discontinued                                                                
operations                     (219)     (239)     (621)       813       135
Gain from sale of                                                               
discontinued operations       1,179         -         -          -         -
                              -----     -----       ---      -----     -----
Net income (1)               $3,822    $1,736      $601     $4,452    $6,002
                              =====     =====       ===      =====     =====

$1-2/3 par value common stock                                                   
Basic earnings per share                                                    
(EPS) from continuing                                                     
 operations                   $5.10     $3.53     $2.21      $6.23     $9.08
Basic earnings (losses) per                                                 
share from discontinued                                                   
 operations                   $2.14    $(0.16)   $(0.42)     $0.59     $0.29
Diluted EPS from continuing                                                 
 operations                   $5.03     $3.51     $2.20      $6.12     $8.91
Diluted earnings (losses)                                                   
per share from discontinued                                               
 operations                   $2.11    $(0.16)   $(0.43)     $0.58     $0.28
Cash dividends declared per                                                 
 share                        $2.00     $2.00     $2.00      $2.00     $2.00

Class H common stock (2)                                                        
Basic earnings (losses) per                                                 
share from discontinued                                                   
  operations                  $(0.22)   $(0.21)   $(0.55)     $0.55    $(0.27)
Diluted earnings (losses)                                                   
per share from                                                            
  discontinued operations     $(0.22)   $(0.21)   $(0.55)     $0.54    $(0.27)
Cash dividends declared per                                                 
 share                         $  -      $  -      $  -       $  -      $  -

Total assets                 $448,507  $369,053  $322,412   $301,129  $273,729  
Notes and loans payable      $271,756  $200,168  $165,361   $144,783  $129,547  
GM-obligated mandatorily                                                        
redeemable preferred                                                        
securities of                                                               
subsidiary trusts              $  -      $  -      $  -       $139      $218

Stockholders' equity          $25,268    $6,814   $19,707    $30,175   $20,644  

-----------------                                                             
Reference should be made to the notes to GM's consolidated financial statements 
and Management's Discussion and Analysis of Financial Condition and Results of  
Operations.                                                                     

(1) On January 1, 2002, the Corporation implemented Statement of Financial      
   Accounting Standards (SFAS) No. 142 "Goodwill and Other Intangible Assets,"
   which ceased the amortization method of accounting for goodwill and changed
    to an impairment only approach. Accordingly, goodwill is no longer amortized
and is tested for impairment at least annually.                         
(2) Adjusted to reflect the three-for-one stock split of the GM Class H common  
stock, in the form of a 200% stock dividend, paid on June 30, 2000.     

 * * * * * *

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ITEM 7.  Management's Discussion and Analysis of Financial Condition and        
Results of Operations                                         

   The following management's discussion and analysis of financial condition and
results of operations (MD&A) should be read in conjunction with the General     
Motors Acceptance Corporation (GMAC) Annual Report on Form 10-K for the period  
ended December 31, 2003, filed separately with the Securities and Exchange      
Commission (SEC). All earnings per share amounts included in the MD&A are       
reported on a fully diluted basis.                                              
GM presents separate supplemental financial information for the following 
businesses: Automotive and Other Operations (Auto & Other) and Financing and    
Insurance Operations (FIO).                                                     
 GM's reportable operating segments within its Auto & Other business consist
of:                                                                             

  -  GM Automotive (GMA), which is comprised of four regions: GM North America
      (GMNA), GM Europe (GME), GM Latin America/Africa/Mid-East (GMLAAM), and GM
Asia Pacific (GMAP); and                                            
-  Other, which includes the design, manufacturing and marketing of       
locomotives, the elimination of intersegment transactions, certain  
 non-segment specific revenues and expenditures, and certain corporate
activities.                                                         

GM's reportable operating segments within its FIO business consist of GMAC
and Other Financing, which includes financing entities that are not consolidated
by GMAC.                                                                        
The disaggregated financial results for GMA have been prepared using a    
management approach, which is consistent with the basis and manner in which GM  
management internally disaggregates financial information for the purpose of    
assisting in making internal operating decisions. In this regard, certain common
expenses were allocated among regions less precisely than would be required for 
stand-alone financial information prepared in accordance with accounting        
principles generally accepted in the U.S. (GAAP). The financial results         
represent the historical information used by management for internal            
decision-making purposes; therefore, other data prepared to represent the way in
which the business will operate in the future, or data prepared in accordance   
with GAAP, may be materially different.                                         

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RESULTS OF OPERATIONS                                                           

Consolidated Results                                                            

GM's total net sales and revenues were $186 billion, $177 billion and $169
billion for 2003, 2002 and 2001, respectively, and GM's net income was $3.8     
billion, $1.7 billion and $601 million for 2003, 2002 and 2001, respectively.   

                                          Years Ended December 31,
                                           ---------------------------------
                                          2003       2002       2001
                                          ----       ----       ----
                                         (dollars in millions)

Total net sales and revenues                 $185,524   $177,324   $169,051     
Income from continuing operations              $2,862     $1,975     $1,222     
Net income                                     $3,822     $1,736       $601     
Net margin from continuing operations             1.5%       1.1%       0.7%    

The increase in 2003 total net sales and revenues, compared with 2002, was
due to increases in GMA revenue of $5.2 billion, despite lower GMNA and global  
volumes and worldwide pricing competitiveness, and increases in FIO revenue of  
$2.6 billion. The increase in 2002 total net sales and revenues, compared with  
2001, was largely due to an increase in wholesale sales at GMA.                 
Despite increased revenues, cost savings, and strong equity income in 2003
compared to 2002, continued automotive pricing pressures, higher pension and    
other postretirement employee benefit (OPEB) expenses in the U.S., and          
unfavorable foreign currency exchange resulted in GMA net income decreasing in  
2003 compared to 2002. GMAC had record net income of $2.8 billion in 2003,      
compared to $1.9 billion in the prior year, due primarily to income growth from 
GMAC's mortgage operations. The increase in 2002 net income compared to 2001 was
primarily due to increased volumes at GMA offset partially by pricing pressures 
in North America and Europe.                                                    

2003 highlights included:                                                 
o Market share increased in three of four automotive regions;             
o Strong cash flow was generated;                                         
o GM fully funded the combined U.S. hourly and salaried pension plans     
with $18.5 billion in total contributions;                            
o Pension plans earned an approximate 22% return on assets;               
o Completed the Hughes transactions (1);                                  
o GMAC and GMAP each generated strong net income; and                     
o GM completed the sale of its defense business                           

(1)In the Hughes transactions, GM split off Hughes by distributing Hughes       
common stock to the holders of GM Class H common stock in exchange for all
the outstanding shares of GM Class H common stock. Simultaneously, GM sold
  its 19.8 percent economic interest in Hughes to News Corporation in exchange
   for cash and News Corporation Preferred American Depositary Shares (Preferred
ADSs).                                                                    

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GM Automotive Financial Review                                                  

 GMA's total net sales and revenues were $155 billion, $149 billion and $142
billion for 2003, 2002 and 2001, respectively, and GMA's net income was $553    
million, $2.0 billion and $445 million for 2003, 2002 and 2001, respectively.   

                                        Years Ended December 31,
                                         -------------------------------
                                        2003      2002      2001
                                        ----      ----      ----
                                       (dollars in millions)

GMA total net sales and revenues             $154,513   $149,355  $141,939      
GMA net income                                   $553     $1,988      $445      
GMA net margin                                    0.4%       1.3%      0.3%     

Net income (loss) by region                                                     
GMNA                                             $811     $2,992    $1,348      
GME                                              (504)    (1,011)     (765)     
GMLAAM                                           (331)      (181)      (81)     
GMAP                                              577        188       (57)     
                                           ----     ------      ----
Net income                                  $553     $1,988      $445 
                                            ===      =====       ===

GM global market share                           14.7%      15.0%     15.0%     

The increase in 2003 total net sales and revenues, compared with 2002, was
largely due to favorable product mix and a weaker U.S. dollar, partially offset 
by unfavorable pricing pressures in North America and Europe and lower wholesale
volumes. The increase in 2002 total net sales and revenues, compared with 2001, 
was largely due to an increase in wholesale sales volumes partially offset by   
unfavorable pricing pressures in North America and Europe. GM's global market   
share was 14.7% and 15.0% for the years ended 2003, and 2002, respectively.     
Market share gains were recognized in three out of four automotive regions (see 
discussion below under each region) with GMNA posting a 0.5 percentage point    
decline, to 27.4%. As GM introduces several new models for 2004 and overall     
economic conditions improve, GM's goal is to achieve market share growth in all 
regions during 2004.                                                            
The decrease in GMA's 2003 net income compared with 2002 was a result of  
lower wholesale sales, continued pricing pressures in North America and Europe, 
increased pension and OPEB expense in the U.S., and unfavorable foreign         
exchange, partially offset by continued strong product mix, material cost       
savings and strong equity results at GMAP. The increase in 2002 net income,     
compared with 2001, was primarily due to an increase in wholesale sales volume, 
favorable product mix, and reduced structural and material costs. These         
favorable conditions more than offset the unfavorable effect of pricing         
pressures experienced in North America and Europe.                              

GM Automotive Regional Results.                                           

GM North America                                                                
                            Years Ended December 31,
                              ----------------------------------
                            2003       2002       2001
                            ----       ----       ----
GMNA:                                       (dollars in millions)               
Net income                              $811     $2,992     $1,348          
Net margin                               0.7%       2.6%       1.2%         

Wholesale sales                            (volumes in thousands)               
Cars                                   2,340      2,547      2,441          
Trucks                                 3,267      3,174      2,746          
                             -----      -----      -----
Total GMNA                            5,607      5,721      5,187         

Vehicle unit sales                                                              
Industry - North America              19,821     20,118     20,250          
GM as a percentage of industry          27.4%      27.9%      27.6%         

Industry - U.S.                       16,966     17,144     17,475          
GM as a percentage of industry          28.0%      28.3%      28.1%         
GM cars                                 25.7%      25.4%      26.9%         
GM trucks                               29.9%      31.0%      29.2%         

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GM Automotive Financial Review (continued)                                      

GM North America (continued)                                                    
North American industry vehicle unit sales decreased to 19.8 million units
during 2003. With this decrease in industry sales, GMNA's market share decreased
by 0.5 percentage points. GMNA ended the year with a market share of 27.4% for  
2003, compared to 27.9% for 2002.                                               
During 2003, industry vehicle unit sales in the United States decreased   
slightly to 17.0 million units. In conjunction with this slight decrease in     
industry volume, GM's U.S. market share decreased by 0.3 percentage points. GM  
ended the year with a market share of 28.0% for 2003, versus 28.3% for 2002.    
U.S. car market share rose modestly by 0.3 percentage points to 25.7%, while    
U.S. truck market share ended the year at 29.9%, down 1.1 percentage points,    
contributing to the slight decline in overall U.S. market share. As GM          
introduces several new models in North America during 2004, GM anticipates      
increasing market share in the United States and North America during 2004.     
  Net income from GMNA totaled $811 million, $3.0 billion, and $1.3 billion in
2003, 2002, and 2001, respectively. The decrease in GMNA's 2003 net income from 
2002 was primarily due to unfavorable pricing, increased pension and OPEB       
expense in the U.S., and higher currency-exchange losses. During 2003, GMNA     
incurred charges of $448 million, after tax, related to the October 2003        
contract with the United Auto Workers, which provided for lump-sum payments and 
vehicle discount vouchers for retirees and adjusted a previously established    
reserve for idled workers, primarily related to the Janesville, Wisconsin plant,
resulting in $103 million of income, after tax. Also, GMNA incurred various     
structural cost adjustments, asset impairment and other charges, favorable      
interest income from settlements of prior year tax matters, and income related  
to the market valuation of XM Satellite Radio warrants. These items netted to   
approximately $90 million of income for the year.                               
Vehicle revenue per unit was $18,992 for 2003, compared with $18,698 for  
2002. Even though trucks as a percent of total sales were flat, mix remained    
strong during 2003, as customers continued to buy upgraded vehicles which       
resulted in revenue per unit growth of $294.                                    
   The increase in 2002 net income from 2001 was primarily due to an increase in
wholesale sales volume, improved product mix, material and structural costs     
reductions, and interest income from the resolution of certain prior tax years, 
partially offset by an increase in pension expense, OPEB expense and unfavorable
price. In addition, during 2002, GMNA incurred charges of $116 million, after   
tax, primarily related to costs associated with the transfer of commercial truck
production from Janesville, Wisconsin, to Flint, Michigan.                      

GM Europe                                                                       
                              Years Ended December 31,
                                ----------------------------------
                              2003       2002       2001
                              ----       ----       ----
                               (dollars in millions)
GME net loss                              $(504)   $(1,011)     $(765)          
GME net margin                             (1.8%)     (4.2%)     (3.2%)         

Wholesale sales                             (volumes in thousands)              
Cars                                    1,563      1,545      1,666         
Trucks                                     94        100         94         
                              ------     ------     ------
Total GME                              1,657      1,645      1,760        

Vehicle unit sales                                                              
Industry                               19,468     19,172     19,705         
GM as a percentage of industry            9.4%       9.1%       9.1%        

GM market share - Germany                  10.5%      10.3%      11.4%          
GM market share - United Kingdom           13.7%      13.1%      12.7%          

 While industry vehicle unit sales remained relatively flat in Europe during
2003 (an increase of approximately 300,000 units over 2002), GME increased its  
total market share to 9.4%, up 0.3 percentage points from 2002. In two of GM's  
largest markets in Europe, GM continued to perform well with increased market   
share gain: market share increased to 10.5% in Germany, a 0.2 percentage point  
increase over 2002, and 13.7% in the United Kingdom, an increase of 0.6         
percentage points over 2002.                                                    

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GM Automotive Financial Review (continued)                                      

GM Europe (concluded)                                                           
Net loss from GME totaled $504 million, $1.0 billion, and $765 million in 
2003, 2002, and 2001, respectively. The decrease in GME's 2003 net loss from    
2002 was primarily due to favorable product mix, and reduced material and       
structural costs. These favorable conditions were partially offset by           
unfavorable pricing and foreign currency translation as the euro and Swedish    
krona strengthened relative to the U.S. dollar during 2003. GME's net loss      
included a restructuring charge in 2003 of $218 million, after tax, related to  
an initiative to improve the competitiveness of GM's automotive operations in   
Europe (see Note 25 to the Consolidated Financial Statements).                  
   The increase in GME's 2002 net loss from 2001 was primarily due to a decrease
in wholesale sales volumes driven by a weak European industry, continuing       
competitive pricing pressures and a restructuring initiative implemented in the 
first quarter of 2002, which resulted in a charge of $407 million, after tax.   
These decreases were partially offset by improved material and structural cost  
performance.                                                                    

GM Latin America/Africa/Mid-East                                                
                              Years Ended December 31,
                               -----------------------------------
                             2003       2002        2001
                             ----       ----        ----
                             (dollars in millions)
GMLAAM net loss                         $(331)     $(181)      $(81)            
GMLAAM net margin                        (6.1%)     (3.5%)     (1.4%)           

Wholesale sales                             (volumes in thousands)              
Cars                                    438        443        463           
Trucks                                  123        197        203           
                            ----       ----       ----
Total GMLAAM                           561        640        666          

Vehicle unit sales                                                              
Industry                              3,570      3,673      4,009           
GM as a percentage of industry         16.0%      15.7%      16.6%          

GM market share - Brazil                 23.3%      23.0%      22.6%            

Despite unfavorable economic conditions in Latin America, GM was able to  
increase overall GMLAAM vehicle market share to 16.0% in 2003.                  
 Net loss from GMLAAM totaled $331 million, $181 million, and $81 million in
2003, 2002, and 2001, respectively. The increase in GMLAAM's 2003 net loss from 
2002 was primarily due to continued economic weakness in the region as industry 
vehicle sales decreased 100,000 units to 3.6 million for 2003. In 2003, GMLAAM  
incurred asset impairment charges and unfavorable exchange impacts, which were  
partially offset by net price increases. The increase in GMLAAM's 2002 net loss 
from 2001 was primarily due to political unrest and economic uncertainty in     
Argentina, Brazil, and Venezuela, which caused a significant deterioration in   
the industry for the region.                                                    

GM Asia Pacific                                                                 
                            Years Ended December 31,
                              ----------------------------------
                            2003       2002       2001
                            ----       ----       ----
                             (dollars in millions)
GMAP net income (loss)                   $577       $188       $(57)            
GMAP net margin                          10.8%       4.2%      (1.4%)           

Wholesale sales                            (volumes in thousands)               
Cars                                    203        185        202           
Trucks                                   70        220        258           
                            ----       ----       ----
Total GMAP                             273        405        460          

Vehicle unit sales                                                              
Industry                             15,720     14,373     13,101           
GM as a percentage of industry          4.9%       4.6%       4.0%          

GM market share  - Australia             20.4%      23.1%      22.4%            
GM market share  - China                  8.5%       7.8%       4.1%            

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GM Automotive Financial Review (concluded)                                      

GM Asia Pacific (concluded)                                                     
  GMAP increased its total market share to 4.9%, up 0.3 percentage points from
2002 and GM's market share in China increased to 8.5%, an increase of 0.7       
percentage points over 2002. China is now the third largest automotive market in
the world and is GM's fourth largest market.                                    
Net income (loss) from GMAP totaled $577 million, $188 million, and $(57) 
million in 2003, 2002, and 2001, respectively. The increase in GMAP's net       
income, compared with 2002, was primarily due to strong equity earnings from    
Shanghai GM and other equity investees, as well as earnings at Holden in        
Australia. The increase in GMAP's 2002 net income, compared with 2001, was      
primarily due to equity income improvements from several joint ventures, led by 
significantly improved results at Shanghai GM. Results from equity investments  
in 2001 included a restructuring charge of $133 million, after tax, with respect
to GM's portion of severance payments and asset impairments that were part of   
the restructuring of its affiliate Isuzu Motors, Ltd. In 2002, these            
improvements were partially offset by a decrease in wholesale sales volumes and 
increases in structural and other costs.                                        

Other Operations                                                                

Other Operations' total net sales and revenues include a pre-tax gain of  
approximately $814 million, or approximately $505 million after-tax ($0.90 per  
diluted share), related to the sale of GM's Defense operations (light armored   
vehicle business) to General Dynamics Corporation on March 1, 2003. The sale    
generated net proceeds of approximately $1.1 billion in cash.                   
   Also, Other Operations' includes charges of approximately $277 million ($0.49
per diluted share) related to the October 2003 contract with the UAW which      
provided for lump-sum payments and vehicle vouchers for Delphi retirees, as well
as net interest expense of approximately $200 million related to 2003 debt      
issuances.                                                                      
In 2002, GM completed a review of the carrying value of its investment in 
Fiat Auto S.p.A. (Fiat Auto) which resulted in a non-cash impairment charge of  
$2.2 billion ($1.4 billion, after-tax), recorded in cost of sales. The          
write-down decreased the carrying value of GM's investment in Fiat Auto         
Holdings, B.V. (FAH) from $2.4 billion to $220 million with the remaining $220  
million being attributable to the investment of FAH in certain joint ventures   
with GME.                                                                       

Discontinued Operations                                                         

As of the completion of the Hughes transactions on December 22, 2003, the 
results of operations, cash flows, and the assets and liabilities of Hughes     
Electronics Corporation were classified as discontinued operations for all      
periods presented in GM's consolidated financial statements. The transactions   
resulted in an after-tax gain of approximately $1.2 billion which is classified 
as gain on sale of discontinued operations in GM's consolidated statement of    
income for the year ended December 31, 2003. See Note 2 to the Consolidated     
Financial Statements for further discussion.                                    

GMAC Financial Review                                                           

  GMAC's net income was $2.8 billion, $1.9 billion, and $1.8 billion for 2003,
2002 and 2001 respectively.                                                     
                                      Years Ended December 31,
                                      ----------------------------------------
                                      2003          2002          2001
                                      ----          ----          ----
                                       (dollars in millions)
Financing operations                      $1,360        $1,239        $1,254    
Mortgage operations                        1,254           544           331    
Insurance operations                         179            87           201    
                                       -----        ------        ------
Net income                             $2,793        $1,870        $1,786 
                                       =====         =====         =====

  Net income from financing operations totaled $1.4 billion, $1.2 billion, and
$1.3 billion in 2003, 2002, and 2001, respectively. The increase in net income  
in 2003, compared with 2002, was primarily due to lower credit loss provisions  
and increased revenues from higher asset levels, which more than offset the     
unfavorable effect of lower net interest margins. The decrease in 2002 net      
income compared with 2001 was due to a combination of higher credit loss        
provisions and wider borrowings spreads which was offset by income from higher  
asset levels. In addition, 2001 results reflect a favorable impact from the     
cumulative effect of adopting SFAS 133.                                         

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GMAC Financial Review (continued)                                               

 Net income from mortgage operations totaled $1.3 billion, $544 million, and
$331 million in 2003, 2002, and 2001, respectively. The increase in net income  
in 2003, compared with 2002, was primarily due to higher production and         
securitization volumes in both the residential and commercial mortgage sectors. 
The increase in net income in 2002, compared with 2001, was primarily due to    
increased loan production volumes, higher servicing levels, and improved hedging
results, which was partially offset by a decrease in the value of mortgage      
servicing rights.                                                               
 Net income from insurance operations totaled $179 million, $87 million, and
$201 million in 2003, 2002, and 2001, respectively. The increase in net income  
in 2003, compared with 2002, primarily relates to increased underwriting volume 
and increased investment income resulting from reduced levels of impairments in 
2003, as compared to 2002, related to the Insurance Group's investment          
portfolio. The decrease in net income in 2002, compared with 2001, reflects a   
write-down of certain investment securities primarily due to the prolonged      
decline in equity markets, partially offset by improved underwriting results and
a favorable tax settlement.                                                     

2004 Priorities/Targets                                                         

For 2004, GM has established certain operating priorities and financial   
targets including:                                                              
o Attaining earnings per share between $6.00 and $6.50 at current dilution
levels;                                                               
o Generating $5.0 billion of operating cash flow;                         
o Increasing automotive market share in all regions;                      
o Reducing structural and material costs;                                 
o Capital spending of $7.0 billion; and                                   
o Regional/sector income targets, as follows:                             

Income target       
-------------       
(dollars in       
millions)       

GMNA                    $1,000  - $1,400                                
GME                         $0  - $ 100                                 
GMLAAM                  $ (200) - $ (100)                               
GMAP                    $  700  - $ 800                                 
GMAC                   Greater than $2,000                              

Cash flow, cost savings and regional income targets are formulated using a  
management approach which is consistent with the basis and manner in which GM   
management internally disaggregates financial information for the purposes of   
assisting in making internal operating decisions.                               

LIQUIDITY AND CAPITAL RESOURCES                                                 

Financing Structure                                                             

   In 2003, GM and GMAC experienced adequate access to the capital markets as GM
and GMAC were able to issue various securities to raise capital and extend      
borrowing terms consistent with GM's need for financial flexibility. On June 13,
2003, Moody's lowered GM's long-term rating to Baa1 from A3 and GMAC's to A3    
from A2 with a rating outlook of negative. Moody's also reduced GMAC's          
short-term rating to Prime-2 from Prime-1 and reaffirmed GM's short-term rating 
at Prime-2. On October 21, 2003 Standard & Poor's affirmed GM and GMAC's        
long-term ratings at BBB and short-term ratings at A2, with a rating outlook of 
negative. On November 14, 2003 Fitch affirmed GM and GMAC's long-term ratings at
BBB+ and the commercial paper ratings at F2 with a rating outlook of negative.  
On December 10, 2003 Dominion Bond Rating Service (DBRS) confirmed GM and GMAC's
senior debt ratings at A (low) and the commercial paper ratings at R1 (low) with
a stable outlook. These rating actions are not expected to have a significant   
adverse effect on GM's and GMAC's ability to obtain bank credit or to sell      
asset-backed securities. The table below summarizes GM's and GMAC's credit      
ratings as of December 31, 2003.                                                

               GM       GMAC    GM        GMAC     GM       GMAC
                    ------------------------------------------------------
Rating Agency            Senior Debt    Commercial Paper       Outlook          
-------------          ------------------------------------------------------   
DBRS                   A (low)  A (low) R1 (low)  R1 (low) Stable   Stable      
Fitch                  BBB+     BBB+    F2        F2       Negative Negative    
Moody's                Baa1     A3      Prime-2   Prime-2  Negative Negative    
S&P                    BBB      BBB     A2        A2       Negative Negative    

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Financing Structure (concluded)                                                 

   GM's and GMAC's access to the capital markets remained sufficient to meet the
Corporation's capital needs. In the second quarter of 2003, GM issued           
approximately $1.5 billion of senior notes. In the beginning of the third       
quarter of 2003, in a combined single event financing, GM issued approximately  
$13.5 billion of GM senior notes and convertible debentures and GMAC issued     
approximately $4.4 billion of short-term senior notes and debt. In addition, GM 
and GMAC expect that they will continue to have adequate access to the capital  
markets sufficient to meet the corporation's needs for financial flexibility.   
 In 2003, GM contributed to its Voluntary Employees' Beneficiary Association
(VEBA) trust a total $3.3 billion (including $0.3 billion in GM Class H common  
stock) and $18.5 billion (including $0.9 billion in GM Class H common stock) to 
its U.S. pension plans. At December 22, 2003, under terms of the Hughes         
transactions, the shares of GM H common stock contributed to the VEBA trust in  
2003 were converted into or were exchanged for approximately 34 million shares  
of Hughes Electronics Corporation common stock and approximately 4 million News 
Corporation Preferred ADSs. Similarly, the shares of GM Class H common stock    
contributed to the pension plans in 2003 were converted into or were exchanged  
for approximately 89 million shares of Hughes Electronics Corporation common    
stock and approximately 10 million News Corporation Preferred ADSs.             
Pension plan assets for GM's U.S. hourly and salaried pension plans earned
returns of approximately 22% in 2003. In addition, as a result of the $18.5     
billion 2003 pension contributions, the combined U.S. hourly and salaried       
pension plans were $0.3 billion overfunded at year-end 2003 using a 6.00%       
discount rate.                                                                  
 As an additional source of funds, GM currently has unrestricted access to a
$5.6 billion line of credit with a syndicate of banks which is committed through
June 2008. GM also has an additional $0.8 billion in undrawn committed          
facilities with various maturities and undrawn uncommitted lines of credit of   
$1.7 billion. Similarly, GMAC currently has a $4.2 billion syndicated line of   
credit committed through June 2004, $4.3 billion committed through June 2008,   
$4.7 billion of bilateral committed lines with various maturities, and          
uncommitted lines of credit of $18.0 billion. In addition, New Center Asset     
Trust (NCAT) has $19.2 billion of liquidity facilities committed through June   
2004. Mortgage Interest Networking Trust (MINT) has $3.4 billion of liquidity   
facilities committed through April 2004. NCAT and MINT are non-consolidated     
qualified special purpose entities administered by GMAC for the purpose of      
purchasing assets as part of GMAC's securitization and mortgage warehouse       
funding programs. These entities fund the purchases of assets through the       
issuance of asset-backed commercial paper and represent an important source of  
liquidity to the Corporation.                                                   
Stockholders' equity increased to $25.3 billion at December 31, 2003 from 
$6.8 billion at December 31, 2002. This increase was primarily due to the       
decrease in the minimum pension liability adjustment that was favorably effected
by the much improved funded status of the pension plans recorded as of December 
31, 2003 and partly offset by the split-off of Hughes. (See Note 19 to the      
Consolidated Financial Statements).                                             

Automotive and Other Operations                                                 

   At December 31, 2003, cash, marketable securities, and $3.4 billion of assets
of the Voluntary Employees' Beneficiary Association (VEBA) trust invested in    
fixed-income securities totaled $26.9 billion, compared with cash, marketable   
securities, and $3.0 billion of assets of the VEBA trust invested in            
fixed-income securities totaling $17.3 billion at December 31, 2002. The        
increase of approximately 55% from December 31, 2002 was primarily due to strong
cash flow from operations, proceeds from the Hughes transactions and sale of the
GM Defense business in the aggregate amount of $5.3 billion, and net proceeds   
from debt issuances totaling $14.5 billion offset by U.S. hourly and salaried   
pension and VEBA cash contributions of $20.6 billion in 2003 by GM. Total assets
in the VEBA trust used to pre-fund part of GM's other postretirement benefits   
liability approximated $10.0 billion at December 31, 2003, compared with $5.8   
billion at December 31, 2002, an increase of approximately 72%. Strong cash     
flows from operations during 2003 enabled GM to make a cash contribution of $3.0
billion to its VEBA trust in August 2003, which was in addition to the $0.3     
billion of Class H stock contributed to the VEBA in March 2003. These           
contributions to the VEBA trust were converted into or exchanged for            
approximately 34 million shares of Hughes Electronics Corporation common stock  
and approximately 4 million News Corporation Preferred ADSs.                    
Long-term debt was $29.6 billion at December 31, 2003, compared with $14.3
billion at December 31, 2002. As mentioned above, the proceeds from the issuance
of debt securities were used to fund GM's U.S. hourly and salaried pension      
plans. The ratio of long-term debt to the total of long-term debt and GM's net  
assets of Automotive and Other Operations was 85.2% at December 31, 2003,       
compared with 433.2% at December 31, 2002. The ratio of long-term debt and      
short-term loans payable to the total of this debt and GM's net assets of       
Automotive and Other Operations was 86.4% at December 31, 2003,                 

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Automotive and Other Operations (concluded)                                     

compared with 307.5% at December 31, 2002. The decrease in these ratios was due 
to the improvement in GM's net asset position resulting from the improved funded
status of GM's U.S. hourly and salaried pension plans.                          
   Net liquidity, calculated as cash, marketable securities, and $3.4 billion of
assets of the VEBA trust invested in fixed-income securities less the total of  
loans payable and long-term debt, was a negative $5.5 billion at December 31,   
2003, compared with $1.1 billion, including $3.0 billion of assets of the VEBA, 
at December 31, 2002.                                                           
In order to provide financial flexibility to GM and its suppliers, GM     
maintains a trade payables program through GECC under which GECC pays           
participating GM suppliers the amount due to them from GM in advance of their   
contractual original due dates. In exchange for the early payment, these        
suppliers accept a discounted payment. On the original due date of the payables,
GM pays GECC the full amount. At December 31, 2003 and 2002, GM owed            
approximately $1.2 billion, to GECC under this program, which is classified as  
short-term debt in GM's consolidated financial statements. In addition, GM has  
the right under the agreement to defer payment to GECC with respect to all or a 
portion of receivables which it has paid on behalf of GM. The permissible       
deferral periods range from 10 days to 40 days and would also be classified as  
short-term debt in GM's financial statements. Deferred payments are subject to  
interest during the deferral period. As of December 31, 2003, GM had elected    
not to defer payment on any such payables. The maximum amount permitted under   
both parts of the program is $2.0 billion. If any of GM's long-term unsecured   
debt obligations become subject to a rating by S&P of BBB-, with a negative     
outlook (GM's current rating is BBB, with a negative outlook) or below BBB-, or 
a rating by Moody's of Baa3, with a negative outlook (GM's current rating is    
Baa1, with a negative outlook) or below Baa3, GECC would be permitted to        
immediately terminate continued access to the program by GM and its suppliers.  
GM does not anticipate that discontinuance of the future availability of the    
GECC program would result in a material disruption to the supply of parts and   
materials to GM, nor would it have a material adverse effect on GM's financial  
position, results of operations or cash flows.                                  

Financing and Insurance Operations                                              

GMAC's consolidated assets totaled $288.2 billion at December 31, 2003,   
representing a 26.6% increase from the $227.7 billion outstanding at December   
31, 2002. The increase in total assets was primarily due to an increase in      
finance receivables and loans, from $134.1 billion at December 31, 2002 to      
$172.7 billion at December 31, 2003. The increased use of securitizations       
structured as financing transactions (primarily in mortgage operations) combined
with the continued use of GM sponsored special rate financing programs,         
resulted in an increase in consumer finance receivables and loans. Additional   
asset growth was the result of an increase in wholesale receivables outstanding 
due to higher dealer inventories.                                               
 Consistent with the growth in assets, GMAC's total debt increased to $238.9
billion at December 31, 2003, as compared to $183.2 billion at December 31,     
2002. GMAC's 2003 year-end ratio of total debt to total stockholder's equity was
11.8:1 compared to 10.3:1 at December 31, 2002. GMAC's liquidity, as well as its
ability to profit from ongoing activity, is in large part dependent upon its    
timely access to capital and the costs associated with raising funds in         
different segments of the capital markets. Liquidity is managed to preserve     
stable, reliable and cost effective sources of cash to meet all current and     
future obligations. GMAC's strategy in managing liquidity risk has been to      
develop diversified funding sources across a global investor base. In 2003, GMAC
continued to experience a difficult funding environment caused by high funding  
requirements (due to continued growth in assets levels), negative credit rating 
agency activity, and general instability in the corporate bond markets. The     
challenges presented by this environment resulted in GMAC's funding effort      
continuing to reach beyond traditional unsecured debt sources and increase the  
emphasis on securitization (including transactions accounted for as secured     
financings) and retail debt programs. Management expects that based on the      
Corporation's current financial position, its funding strategy and diversified  
financing sources will provide sufficient access to the capital markets to meet 
the Corporations' funding needs.                                                

Investment in Fiat Auto Holdings                                                

At the April 23, 2003, Annual General Shareholders Meeting of FAH, FAH    
adopted a euro 5 billion recapitalization plan that provides shareholders the   
option to make pro-rata capital contributions over the eighteen months following
adoption of the plan. When the plan was adopted, Fiat held 80% of FAH and GM    
20%. Fiat participated in the recapitalization by making a euro 3 billion       
contribution, which FAH used to repay inter-company debts owed to Fiat or its   
affiliates. Currently, GM does not plan to participate. Due to Fiat's           
participation in the recapitalization, and GM's non-participation, Fiat has     
reported that GM's interest in FAH has been reduced from 20% to 10%.            

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Investment in Fiat Auto Holdings (concluded)                                    

As discussed in GM's Annual Report on Form 10-K for the period ended      
December 31, 2002, the Master Agreement provides that, from January 24, 2004 to 
July 24, 2009, Fiat may seek to exercise a put option (the "Put") to require GM 
to purchase Fiat's FAH shares at their fair market value. Whether and when Fiat 
may seek to exercise the Put is unknown, although Fiat stated in its 2002 Annual
Report on Form 20F, filed with the U.S. Securities and Exchange Commission, that
it views the exercise of the Put only as a secondary possibility. Fiat also     
stated in its Form 20F that it believes that the put is enforceable in          
accordance with the terms of the Master Agreement. GM has, however, asserted to 
Fiat that the sale of certain assets of the financing business of Fiat Auto and 
the recapitalization of FAH represent material breaches of the Master Agreement,
with the result that the Master Agreement, including the Put, is terminable by  
GM. Notwithstanding these different views, GM is continuing to build on the     
cooperation the parties have worked on for the past several years in the joint  
ventures and other cooperative contractual arrangements they have entered into  
which are independent of the Master Agreement, and is pursuing a resolution of  
these different views. Towards that end, Fiat and GM entered into a standstill  
agreement on October 26, 2003, the provisions of which enable GM to defer until 
December 15, 2004, the necessity of electing the remedy of termination of the   
Master Agreement, and with it the Put, without such deferral prejudicing the    
right of GM to elect that remedy after December 15, 2004. On October 26, 2003,  
Fiat and GM also entered into an amendment to the Master Agreement that shifts  
the Put period by one year, so that it begins on January 24, 2005 and runs to   
July 24, 2010.                                                                  
If the Put were implemented, the fair market value of FAH shares would be 
determined by the averaging of the three closest of four valuations that would  
be prepared by four investment banks after conducting due diligence under       
procedures set forth in the Master Agreement and based upon terms and conditions
to be incorporated in a purchase agreement which, at this time, the parties have
not prepared. Unless such a process and valuation is completed, the amount, if  
any, that GM might have to pay for Fiat's FAH shares if there were to be a valid
exercise of the Put, is not quantifiable.                                       
If there were a valid exercise of the Put, GM would have the option to pay
for Fiat's FAH shares entirely in shares of GM $1-2/3 par value common stock,   
entirely in cash, or in whatever combination thereof GM may choose. Under such  
circumstances, if and to the extent GM chose to pay in cash, that portion of the
purchase price could be paid to Fiat in four installments over a three-year     
period and GM would expect to fund any such payments from normal operating cash 
flows or financing activities.                                                  
If and when GM were to acquire Fiat's FAH shares, and thus become the sole
owner of FAH, GM would decide what, if any, additional capitalization would     
then be appropriate for FAH and Fiat Auto. Specifically, if Fiat Auto were to   
need additional funding, GM would have to decide whether or not to provide such 
funding and under what conditions it might do so.                               
Unless FAH or Fiat Auto were subject to liquidation or insolvency, FAH's  
consolidated financial statements would be required for financial reporting     
purposes to be consolidated with those of GM. Any indebtedness, losses and      
capital needs of FAH and Fiat Auto after their acquisition by GM are not        
presently determinable, but they could have a material adverse effect on GM if  
GM chooses to fund such needs or allows the consolidation of GM's financial     
statements with those of FAH and Fiat Auto.                                     
   GM has discussed with Fiat potential alternatives to the Master Agreement and
expects to have further discussions regarding the relationship between the      
parties.                                                                        

Off-Balance Sheet Arrangements                                                  

  GM and GMAC use off-balance sheet arrangements where the economics and sound
business principles warrant their use. GM's principal use of off-balance sheet  
arrangements occurs in connection with the securitization and sale of financial 
assets generated or acquired in the ordinary course of business by GMAC and its 
subsidiaries and, to a lesser extent, by GM. The assets securitized and sold by 
GMAC and its subsidiaries consist principally of mortgages, and wholesale and   
retail loans secured by vehicles sold through GM's dealer network. The assets   
sold by GM consist principally of trade receivables.                            
In addition, GM leases real estate and equipment from various off-balance 
sheet entities that have been established to facilitate the financing of those  
assets for GM by nationally prominent lessors that GM believes are creditworthy.
These assets consist principally of office buildings, warehouses, and machinery 
and equipment. The use of such entities allows the parties providing the        
financing to isolate particular assets in a single entity and thereby syndicate 
the financing to multiple third parties. This is a conventional financing       
technique used to lower the cost of borrowing and, thus, the lease cost to a    
lessee such as GM.                                                              
 There is a well-established market in which institutions participate in the
financing of such property through their purchase of ownership interests in     
these entities and each is owned by institutions that are independent of, and   
not affiliated with, GM. GM believes that no officers, directors or employees of
GM, GMAC, or their affiliates hold any direct or indirect equity interests in   
such entities.                                                                  

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Off-Balance Sheet Arrangements (concluded)                                      

   The amounts outstanding in off-balance sheet facilities used by the Financing
and Insurance Operations have decreased since December 31, 2002 as GMAC         
continues to use securitization transactions that, while similar in legal       
structure to off-balance sheet securitizations, are accounted for as secured    
financings and are recorded as receivables and debt on the balance sheet.       

Assets in off-balance sheet entities were as follows (dollars in millions):     

                                 December 31
                                 -----------
Automotive and Other Operations                  2003      2002                 
-------------------------------                  ----      ----                 
Assets leased under operating leases            $2,287    $2,126                
Trade receivables sold (1)                         759       725                
                                -------   ------
Total                                     $3,046    $2,851          
                                 =====     =====

Financing and Insurance Operations                                              
----------------------------------                                              
Receivables sold or securitized:                                                
- Mortgage loans                         $80,798  $106,520          
- Retail finance receivables               9,548    16,164          
- Wholesale finance receivables           21,142    17,415          
                               -------   -------
Total                                   $111,488  $140,099          
                               =======   =======

(1) In addition, trade receivables were sold to GMAC for $553 million in 2003   
and $434 million in 2002.                                               

Contractual Obligations and Other Long-Term Liabilities                         

GM has the following minimum commitments under contractual obligations,   
including purchase obligations, as defined by the U.S. Securities and Exchange  
Commission. A "purchase obligation" is defined as an agreement to purchase goods
or services that is enforceable and legally binding on GM and that specifies all
significant terms, including: fixed or minimum quantities to be purchased;      
fixed, minimum or variable price provisions; and the approximate timing of the  
transaction. Other long-term liabilities are defined as long-term liabilities   
that are reflected on GM's balance sheet under GAAP. Based on this definition,  
the tables below include only those contracts, which include fixed or minimum   
obligations. It does not include normal purchases, which are made in the        
ordinary course of business.                                                    
The following table provides aggregated information about Auto & Other    
outstanding contractual obligations and other long-term liabilities as of       
December 31, 2003.                                                              

                            Payments due by period
                           ---------------------------------------------------
                                                2009 and
(in millions)                 2004    2005-2006  2007-2008    after      Total  
------------------------------------------------------------------------------- 
Debt                           $1,090     $1,116    $1,798    $26,800  $30,804  
Capital lease obligations         105        205       459        649    1,418  
Operating lease obligations       668      1,191     1,638      1,763    5,260  
Contractual commitments for                                                     
 capital expenditures         1,223        137         -          -    1,360
Other contractual                                                               
commitments:                                                              
 Postretirement benefits(1)   3,005      6,459     3,416          -   12,880
    Less:  VEBA assets (2)    (3,005)    (6,459)     (534)         -   (9,998)
                              -----      -----     -----             -------
 Net                              -          -     2,882          -    2,882
 Material                       901      1,613     1,447        605    4,566
 Information technology         161        147        11          -      319
 Marketing                      171        181         8          3      363
 Facilities                     201        270        99        396      966
 Rental car repurchases       8,204          -         -          -    8,204
Policy, product warranty                                                  
and recall campaigns                                                  
   liability                  3,593      3,837       825        419    8,674
                             ------      -----     -----     ------   ------
Total contractual                                                               
 commitments                $16,317     $8,697    $9,167    $30,635  $64,816
                             ======      =====     =====     ======   ======
Remaining balance                                                               
 postretirement benefits       $734     $1,527    $5,170    $43,154  $50,585
                                ===      =====     =====     ======   ======

(1)Amounts include postretirement benefits under the current contractual labor  
agreements in North America. The remainder of the estimated liability, for
  benefits beyond the current labor agreement and for essentially all salaried
  employees, is classified under remaining balance of postretirement benefits.
(2)Total VEBA assets were allocated based on projected spending requirements.   

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Contractual Obligations and Other Long-Term Liabilities (concluded)             

The combined U.S. hourly and salaried pension plans were $0.3 billion     
overfunded at year-end 2003. GM does not expect any contribution to its U.S.    
hourly and salaried pension plans until the next decade to meet ERISA (legal)   
Minimum funding requirements or to avoid Variable Rate Premiums to the Pension  
Benefit Guaranty Corporation.                                                   
The following table provides aggregated information about FIO outstanding 
contractual obligations and other long-term liabilities as of December 31, 2003.

                            Payments due by period
                           ---------------------------------------------------
                                                2009 and
(in millions)                 2004    2005-2006  2007-2008    after      Total  
------------------------------------------------------------------------------- 
Debt                         $77,424   $64,555    $19,996    $75,455  $237,430  
Operating lease                                                                 
 obligations                   142       220        136        184       682
Mortgage purchase and sale                                                      
 commitments                16,021     3,057          -          -    19,078
Lending commitments           13,496     1,222        954      5,206    20,878  
Commitments to provide                                                          
capital to equity                                                         
 method investees              109         2         16         28       155
Purchase obligations              49        46         19          1       115  
                           -------    ------     ------     ------   -------
Total contractural                                                        
   commitments            $107,241   $69,102    $21,121    $80,874  $278,338
                           =======    ======     ======     ======   =======

BOOK VALUE PER SHARE                                                            

Book value per share was determined based on the liquidation rights of the
common stockholders. Book value per share of GM $1-2/3 par value common stock   
increased to $44.96 at December 31, 2003, from $9.06 at December 31, 2002.      

DIVIDENDS                                                                       

  Dividends may be paid on common stock only when, as, and if declared by GM's
Board of Directors in its sole discretion. At December 31, 2003, the amount     
available for the payment of dividends on GM $1-2/3 par value was $27.9 billion.
GM's policy is to distribute dividends on its $1-2/3 par value common stock     
based on the outlook and indicated capital needs of the business. Cash dividends
per share of GM $1-2/3 par value common stock were $2.00 in 2003, 2002, and     
2001.                                                                           

EMPLOYMENT AND PAYROLLS                                                         

Worldwide employment at December 31,                                            
(in thousands)                                  2003     2002     2001    
                                            ----     ----     ----
GMNA                                              190      198      207     
GME                                                62       66       73     
GMLAAM                                             23       24       24     
GMAP                                               14       11       11     
GMAC                                               32       32       29     
Other                                               5        7        8     
                                             ---      ---      ---
Total employees                                  326      338      352    
                                             ===      ===      ===

Worldwide payrolls (in billions)                $20.9    $20.4    $19.1     
U.S. hourly payrolls (in billions) (1)           $8.9     $9.1     $8.5     
Average labor cost per active hour                                          
worked U.S. hourly (2)                        $78.39   $62.78   $57.76    

----------------------                                                          
(1)Includes employees "at work" (excludes laid-off employees receiving          
benefits).                                                                
(2)Includes U.S. hourly wages and benefits divided by the number of             
hours worked.                                                             

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CRITICAL ACCOUNTING ESTIMATES                                                   

   Accounting policies are integral to understanding this MD&A. The consolidated
financial statements of GM are prepared in conformity with GAAP, which requires 
the use of estimates, judgments, and assumptions that affect the reported       
amounts of assets and liabilities at the date of the financial statements and   
the reported amounts of revenues and expenses during the periods presented. GM's
accounting policies are described in Note 1 to the Consolidated Financial       
Statements. Critical accounting estimates are described in this section. An     
accounting estimate is considered critical if: the estimate requires management 
to make assumptions about matters that were highly uncertain at the time the    
estimate was made; different estimates reasonably could have been used; or if   
changes in the estimate that would have a material impact on the Corporation's  
financial condition or results of operations are reasonably likely to occur from
period to period. Management believes that the accounting estimates employed are
appropriate and resulting balances are reasonable; however, actual results could
differ from the original estimates, requiring adjustments to these balances in  
future periods. The Corporation has discussed the development, selection and    
disclosures of these critical accounting estimates with the Audit Committee of  
GM's Board of Directors, and the Audit Committee has reviewed the Corporation's 
disclosures relating to these estimates.                                        

Sales Allowances                                                                
At the later of the time of sale or the time an incentive is announced to 
dealers (applies to vehicles sold by GM and in dealer inventory), GM records as 
a reduction of revenue the estimated impact of sales allowances in the form of  
dealer and customer incentives. There may be numerous types of incentives       
available at any particular time. Some factors used in estimating the cost of   
incentives include the volume of vehicles that will be affected by the incentive
programs offered by product and the rate of customer acceptance of any incentive
program. If the actual number of vehicles differs from this estimate, or if a   
different mix of incentives occurs, the sales allowances could be affected.     

Policy and Warranty                                                             
 Provisions for estimated expenses related to product warranties are made at
the time products are sold. These estimates are established using historical    
information on the nature, frequency, and average cost of warranty claims.      
Management actively studies trends of warranty claims and takes action to       
improve vehicle quality and minimize warranty claims.                           

Impairment of Long-Lived Assets                                                 
  GM periodically reviews the carrying value of its long-lived assets held and
used, other than goodwill and intangible assets with indefinite lives, and      
assets to be disposed of when events and circumstances warrant such a review.   
This review is performed using estimates of future cash flows. If the carrying  
value of a long-lived asset is considered impaired, an impairment charge is     
recorded for the amount by which the carrying value of the long-lived asset     
exceeds its fair value.                                                         

Pension and Other Postretirement Employee Benefits (OPEB)                       
 Pension and OPEB costs and obligations are dependent on assumptions used in
calculating such amounts. These assumptions include discount rates, health care 
cost trend rates, benefits earned, interest cost, expected return on plan       
assets, mortality rates, and other factors. In accordance with GAAP, actual     
results that differ from the assumptions are accumulated and amortized over     
future periods and, therefore, generally affect recognized expense and the      
recorded obligation in future periods. While management believes that the       
assumptions used are appropriate, differences in actual experience or changes in
assumptions may affect GM's pension and other postretirement obligations and    
future expense.                                                                 
GM has established for its U.S. pension plans a discount rate of 6.00% for
year-end 2003, which represents a 75 basis point reduction from the 6.75%       
discount rate used at year-end 2002. GM's U.S. pre-tax pension expense is       
forecasted to decrease from approximately $2.6 billion in 2003, excluding       
curtailments and settlements, to approximately $1.4 billion in 2004 due to the  
$18.5 billion 2003 pension contribution and the approximately 22% 2003 actual   
return on assets, partially offset by a lower 2003 year-end discount rate.      
  The following information illustrates the sensitivity to a change in certain
assumptions for U.S. pension plans (as of December 31, 2003 the Projected       
Benefit Obligation (PBO) for U.S. pension plans was $87 billion and the minimum 
pension liability charged to equity with respect to U.S. pension plans was $125 
million net of tax):                                                            

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CRITICAL ACCOUNTING ESTIMATES (continued)                                       

                                           Effect on
                    Effect on 2004         December 31, 2003
Change in Assumption      Pre-Tax Pension Expense           PBO                 
--------------------------------------------------------------------------      

25 basis point decrease                                                         
in discount rate            +$150 million           +$2.1 billion         

25 basis point increase                                                         
in discount rate            -$150 million           -$2.1 billion         

25 basis point decrease                                                         
in expected return on                                                     
assets                      +$220 million                 -               

25 basis point increase                                                         
in expected return on                                                     
assets                      -$220 million                 -               

The above sensitivities reflect the impact of changing one assumption at a
time. It should be noted that economic factors and conditions often affect      
multiple assumptions simultaneously and the effects of changes in key           
assumptions are not necessarily linear.                                         
These changes in assumptions would have no effect on GM's funding         
requirements. In addition, at December 31, 2003, a 25 basis point decrease in   
the discount rate would decrease stockholders' equity by $14.0 billion, net of  
tax; a 25 basis point increase in the discount rate would increase stockholders'
equity by $20.0 million, net of tax. With a 25 basis point decrease in the      
discount rate, certain pension plans would become Accumulated Benefit Obligation
(ABO) underfunded resulting in a significantly larger impact on equity compared 
to a 25 basis point increase in the discount rate. In addition, the impact of   
greater than a 25 basis point decrease in discount rate would not be            
proportional to the first 25 basis point decrease in the discount rate.         
GM has established for its U.S. OPEB plans a discount rate of 6.25% for   
year-end 2003, which represents a 50 basis point reduction from the 6.75%       
discount rate used at year-end 2002.                                            
 The following table illustrates the sensitivity to a change in the discount
rate assumption related to GM's U.S. OPEB plans (the U.S. Accumulated           
Postretirement Benefit Obligation [APBO] was a significant portion of GM's      
worldwide APBO of $67.5 billion as of December 31, 2003):                       

                          Effect on 2004               Effect on
                               Pre-Tax OPEB            December 31, 2003
Change in Assumption                 Expense                     APBO           
------------------------------------------------------------------------------- 

25 basis point decrease in                                                      
discount rate                +$170 million              +$1.9 billion     

25 basis point increase in                                                      
discount rate                -$170 million              -$1.9 billion     

The above sensitivities reflect the impact of changing one assumption at a
time. It should be noted that economic factors and conditions often affect      
multiple assumptions simultaneously and the effects of changes in key           
assumptions are not necessarily linear.                                         

Postemployment Benefits                                                         
GM establishes reserves for termination and other postemployment benefit  
liabilities to be paid pursuant to union or other contractual agreements in     
connection with closed plants. The reserve is based on a comprehensive study    
that considers the impact of the annual production and labor forecast           
assumptions as well as redeployment scenarios.                                  

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CRITICAL ACCOUNTING ESTIMATES (concluded)                                       

Allowance for Credit Losses                                                     
 The allowance for credit losses is management's estimate of incurred losses
in GMAC's consumer and commercial finance receivable and loan portfolios held   
for investment. Management periodically performs detailed reviews of these      
portfolios to determine if impairment has occurred and to assess the adequacy of
the allowance for credit losses, based on historical and anticipated trends and 
other factors affecting credit quality. These factors include the historical    
trends of repossessions, charge-offs, recoveries, and credit losses; the careful
monitoring of portfolio credit quality, including the impact of acquisitions;   
and current and projected economic and market conditions. Different assumptions 
or changes in economic circumstances could result in changes to the allowance   
for credit losses.                                                              

Investments in Operating Leases                                                 
 GMAC's investments in residual values of its leasing portfolio represent an
estimate of the values of the assets at the end of the lease contract and are   
initially recorded based on appraisals and estimates. Management reviews        
residual values periodically to determine that recorded amounts are appropriate 
and the operating lease assets have not been impaired. GMAC actively manages the
remarketing of off-lease vehicles to maximize the realization of their value.   
Changes in the value of the residuals or other external factors impacting GMAC's
future ability to market the vehicles under prevailing market conditions may    
impact the realization of residual values.                                      

Mortgage Servicing Rights                                                       
The Corporation capitalizes mortgage servicing rights associated with loans 
sold with servicing retained and servicing rights acquired through bulk and flow
purchase transactions. The Corporation capitalizes the cost of originated       
mortgage servicing rights based upon the relative fair market value of the      
underlying mortgage loans and mortgage servicing rights at the time of sale of  
the underlying mortgage loan. The Corporation capitalizes purchased mortgage    
servicing rights at cost, an amount not exceeding the estimated fair market     
value of those purchased mortgage servicing rights.                             

Accounting for Derivatives and Other Contracts at Fair Value                    
 The Corporation uses derivatives in the normal course of business to manage
its exposure to fluctuations in commodity prices and interest and foreign       
currency rates. Effective January 1, 2001, the Corporation accounts for its     
derivatives on the Consolidated Balance Sheet as assets or liabilities at fair  
value in accordance with SFAS No. 133, "Accounting for Derivative Instruments   
and Hedging Activities." Such accounting is complex, evidenced by significant   
interpretations of the primary accounting standard, which continues to evolve,  
as well as the significant judgments and estimates involved in the estimating of
fair values in the absence of quoted market prices.                             

NEW ACCOUNTING STANDARDS                                                        

Beginning January 1, 2003, the Corporation began expensing the fair market
value of newly granted stock options and other stock based compensation awards  
to employees pursuant to Statement of Financial Accounting Standards (SFAS) No. 
123, "Accounting for Stock-Based Compensation." The fair value of stock option  
grants are estimated on the date of grant using the Black-Scholes option-pricing
model. The fair value of other stock compensation awards is determined by the   
market price of GM $1-2/3 common stock on the date of grant. The total expense  
for 2003 was $229 million ($142 million net of tax), recorded in cost of sales  
and other expenses. For 2002, as permitted by SFAS No. 123, GM applied the      
intrinsic value method of recognition and measurement under Accounting          
Principles Board Opinion No. 25 (APB No. 25), "Accounting for Stock Issued to   
Employees," to its stock options and other stock-based employee compensation    
awards. No compensation expense related to employee stock options is reflected  
in net income for these periods, as all options granted had an exercise price   
equal to the market value of the underlying common stock on the date of the     
grant. Refer to Note 1 to the Consolidated Financial Statements for the effect  
on net income and earnings per share if compensation cost for all outstanding   
and unvested stock options and other stock-based employee compensation awards   
had been determined based on their fair values at the grant date.               
In December 2002, the Financial Accounting Standards Board (FASB) issued  
Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements for  
Guarantees, Including Indirect Guarantees of Indebtedness of Others" (FIN 45).  
FIN 45 requires that at the time a company issues a guarantee, the company must 
recognize an initial liability for the fair value of the obligations it assumes 
under that guarantee. This interpretation is applicable on a prospective basis  
to guarantees issued or modified after December 31, 2002. FIN 45 also contains  
disclosure provisions surrounding existing guarantees, which are effective for  
financial statements of interim or annual periods ending after December 15,     
2002. See Note 18 to the Consolidated Financial Statements.                     

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NEW ACCOUNTING STANDARDS (concluded)                                            

In January 2003, the FASB issued Interpretation No. 46, "Consolidation of 
Variable Interest Entities" (FIN 46), which requires the consolidation of       
certain entities considered to be variable interest entities (VIEs). An entity  
is considered to be a VIE when it has equity investors who lack the             
characteristics of having a controlling financial interest, or its capital is   
insufficient to permit it to finance its activities without additional          
subordinated financial support. Consolidation of a VIE by an investor is        
required when it is determined that the investor will absorb a majority of the  
VIE's expected losses or residual returns if they occur. FIN 46 provides certain
exceptions to these rules, relating to qualifying special purpose entities      
(QSPEs) subject to the requirements of SFAS No. 140. Upon its original issuance,
FIN 46 required that VIEs created after January 31, 2003 would be consolidated  
immediately, while VIEs created prior to February 1, 2003 were to be            
consolidated as of July 1, 2003.                                                
In October 2003, the FASB deferred the effective date for consolidation of
VIEs created prior to February 1, 2003 to December 31, 2003 for calendar        
year-end companies, with earlier application encouraged. GM adopted FIN 46 as of
its original effective date of July 1, 2003 for entities created prior to       
February 1, 2003. The application of the consolidation provisions of FIN 46     
resulted in an increase in assets and debt of approximately $4.6 billion ($917  
million in Auto & Other, and $3.7 billion in FIO), and a cumulative effect of   
accounting change recorded in cost of sales of $27 million after-tax, related to
Auto & Other and no net income impact at FIO. Refer to Note 7 to the            
Consolidated Financial Statements for further discussion of GM's involvement in 
variable interest entities.                                                     
In December 2003, the FASB published a revision to FIN 46 (FIN 46R) to    
clarify some of the provisions of the original interpretation and to exempt     
certain entities from its requirements. FIN 46R provides special effective date 
provisions to enterprises that fully or partially applied FIN 46 prior to the   
issuance of the revised interpretation. In particular, entities that have       
already adopted FIN 46 are not required to adopt FIN 46R until the quarterly    
reporting period ended March 31, 2004. The Corporation is currently reviewing   
the provisions of FIN 46R and will adopt FIN 46R for the quarterly reporting    
period ending March 31, 2004.                                                   
  In April 2003, the FASB issued SFAS No. 149, "Amendments of Statement 133 on
Derivative Instruments and Hedging Activities." SFAS No. 149 amends and         
clarifies accounting for derivative instruments, including certain derivative   
instruments embedded in other contracts, and hedging activities. The Statement  
is effective for contracts entered into or modified after June 30, 2003 and for 
hedging relationships designated after June 30, 2003. The adoption of this      
standard did not have a material effect on the Corporation's financial condition
or results of operations.                                                       
  In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity," which provides
standards for how an issuer classifies and measures certain financial           
instruments with characteristics of both liabilities and equity. The Statement  
is effective for financial instruments entered into or modified after May 31,   
2003 and for pre-existing instruments as of the beginning of the first interim  
period beginning after June 15, 2003. The adoption of this standard did not have
a material effect on the Corporation's financial condition or results of        
operations.                                                                     
In December 2003, the FASB issued SFAS No. 132 (revised 2003), "Employers'
Disclosures about Pensions and Other Postretirement Benefits." The revisions to 
SFAS 132 are intended to improve financial statement disclosures for defined    
benefit plans and was initiated in 2003 in response to concerns raised by       
investors and other users of financial statements about the need for greater    
transparency of pension information. In particular the standard requires that   
companies provide more details about their plan assets, benefit obligations,    
cash flows, benefit costs and other relevant quantitative and qualitative       
information. The guidance is effective for fiscal years ending after December   
15, 2003. Refer to Note 17 to the Consolidated Financial Statements for further 
discussion of GM's pension and other postretirement benefits obligations.       

ADDITIONAL MATTERS                                                              

Like most domestic and foreign automobile manufacturers, over the years GM
has used some brake products each of which incorporated small amounts of        
encapsulated asbestos. These products, generally brake linings, are known as    
asbestos-containing friction products. There is a significant body of scientific
data demonstrating that these asbestos-containing friction products are not     
unsafe and do not create an increased risk of asbestos-related disease. GM      
believes that the use of asbestos in these products was appropriate.            

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ADDITIONAL MATTERS (concluded)                                                  

 As with other companies that have used asbestos, there has been an increase
in the number of claims against GM related to allegations concerning the use of 
asbestos-containing friction products in recent years. A growing number of auto 
mechanics are filing suit seeking recovery based on their alleged exposure to   
the small amount of asbestos used in brake components. These claims almost      
always identify numerous other potential sources for the claimant's alleged     
exposure to asbestos which do not involve GM or even asbestos-containing        
friction products and many of these other potential sources would place users at
much greater risk. The vast majority of these claimants do not have an          
asbestos-related illness and may never develop one. This is consistent with the 
experience reported by other automotive manufacturers and other end users of    
asbestos.                                                                       
Two other types of claims related to alleged asbestos exposure are being  
asserted against GM, representing a significantly lower exposure than the       
automotive friction product claims. Like other locomotive manufacturers, GM used
a limited amount of asbestos in locomotive brakes and in the insulation used in 
the manufacturing of some locomotives. These uses have been the basis of        
lawsuits being filed against GM by railroad workers seeking relief based on     
their alleged exposure to asbestos. These claims almost always identify numerous
other potential sources for the claimant's alleged exposure to asbestos, which  
do not involve GM or even locomotives. Many of these claimants do not have an   
asbestos-related illness and may never develop one. In addition, like many other
manufacturers, a relatively small number of claims are brought by contractors   
who are seeking recovery based on alleged exposure to asbestos-containing       
products while working on premises owned by GM. These claims almost always      
identify numerous other potential sources for the claimant's alleged exposure to
asbestos which do not involve GM. The vast majority of these claimants do not   
have an asbestos-related illness and may never develop one.                     
While General Motors has resolved many of these cases over the years and  
continues to do so for conventional strategic litigation reasons (avoiding      
defense costs and possible exposure to runaway verdicts), GM, as stated above,  
believes the vast majority of such claims against GM are without merit. Only a  
small percentage of the claims pending against GM allege the contraction of a   
malignant disease associated with asbestos exposure. The vast majority of       
claimants do not have an asbestos-related illness and may never develop one. In 
addition, GM believes that it has very strong defenses based upon a number of   
published epidemiological studies prepared by highly respected scientists.      
Indeed, GM believes there is compelling evidence warranting the dismissal of    
virtually all of these claims against GM. GM will vigorously press this evidence
before judges and juries whenever possible. The West Virginia Supreme Court and 
an Ohio trial court have ruled that Federal law preempts asbestos tort claims   
asserted on behalf of railroad workers. Such preemption means that Federal law  
entirely eliminates the possibility that railroad workers could maintain claims 
against GM.                                                                     
  GM's annual expenditures associated with the resolution of these claims have
increased in nonmaterial amounts in recent years, but the amount expended in any
year is highly dependent on the number of claims filed, the amount of pretrial  
proceedings conducted, and the number of trials and settlements which occur     
during the period. While over time GM anticipates annual expenditures relating  
to these claims may increase somewhat as a function of the number of claims     
increasing, it is management's belief, based upon consultation with legal       
counsel, that the claims will not result in a material adverse effect upon the  
financial condition or results of operations of GM.                             

FORWARD-LOOKING STATEMENTS                                                      

   In this report, in reports subsequently filed by GM with the SEC on Form 10-Q
and filed or furnished on Form 8-K, and in related comments by management of GM 
our use of the words "expect," "anticipate," "estimate," "forecast,"            
"objective," "plan," "goal," "project," "priorities/targets," and similar       
expressions is intended to identify forward-looking statements. While these     
statements represent our current judgment on what the future may hold, and we   
believe these judgments are reasonable, actual results may differ materially due
to numerous important factors that are described below and other factors that   
may be described in subsequent reports which GM may file with the SEC on Form   
10-Q and filed or furnished on Form 8-K:                                        
. Changes in economic conditions, currency exchange rates or political    
stability;                                                            
. Shortages of and price increase for fuel, labor strikes or work         
stoppages, market acceptance of the Corporation's new products;       
. Significant changes in the competitive environment                      
. Changes in the laws, regulations, and tax rates; and                    
   . The ability of the Corporation to achieve reductions in cost and employment
levels, to realize production efficiencies, and to implement capital  
expenditures, all at the levels and times planned by management.      

 * * * * * *

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ITEM 7A.  Quantitative and Qualitative Disclosures About Market Risk            

   GM is exposed to market risk from changes in foreign currency exchange rates,
interest rates, and certain commodity and equity security prices. GM enters into
a variety of foreign exchange, interest rate, and commodity forward contracts   
and options, primarily to maintain the desired level of exposure arising from   
these risks. A risk management control system is utilized to monitor foreign    
exchange, interest rate, commodity and equity price risks, and related hedge    
positions.                                                                      
   A discussion of GM's accounting policies for derivative financial instruments
is included in Note 1 to the GM Consolidated Financial Statements. Further      
information on GM's exposure to market risk is included in Notes 19 and 21 to   
the Consolidated Financial Statements.                                          
The following analyses provide quantitative information regarding GM's    
exposure to foreign currency exchange rate risk, interest rate risk, and        
commodity and equity price risk. GM uses a model to evaluate the sensitivity of 
the fair value of financial instruments with exposure to market risk that       
assumes instantaneous, parallel shifts in exchange rates, interest rate yield   
curves, and commodity and equity prices. For options and instruments with       
nonlinear returns, models appropriate to the instrument are utilized to         
determine the impact of market shifts. There are certain shortcomings inherent  
in the sensitivity analyses presented, primarily due to the assumption that     
exchange rates change in a parallel fashion and that interest rates change      
instantaneously. In addition, the analyses are unable to reflect the complex    
market reactions that normally would arise from the market shifts modeled.      

Foreign Exchange Rate Risk                                                      
 GM has foreign currency exposures related to buying, selling, and financing
in currencies other than the local currencies in which it operates. More        
specifically, GM is exposed to foreign currency risk related to the uncertainty 
to which future earnings or asset and liability values are exposed as the result
of operating cash flows and various financial instruments that are denominated  
in foreign currencies. At December 31, 2003, the net fair value liability of    
financial instruments with exposure to foreign currency risk was approximately  
$3.2 billion compared to a net fair value asset of $4.1 billion at December 31, 
2002. The potential loss in fair value for such financial instruments from a 10%
adverse change in quoted foreign currency exchange rates would be approximately 
$323 million and $411 million for 2003 and 2002, respectively.                  

Interest Rate Risk                                                              
 GM is subject to market risk from exposure to changes in interest rates due
to its financing, investing, and cash management activities. More specifically, 
the Corporation is exposed to interest rate risk associated with long-term debt 
and contracts to provide commercial and retail financing, retained mortgage     
servicing rights, and retained assets related to mortgage securitizations. In   
addition, GM is exposed to prepayment risk associated with its capitalized      
mortgage servicing rights and its retained assets. This risk is managed with    
U.S. Treasury options and futures, exposing GM to basis risk since the          
derivative instruments do not have identical characteristics to the underlying  
mortgage servicing rights. At December 31, 2003 and 2002, the net fair value    
liability of financial instruments held for purposes other than trading with    
exposure to interest rate risk was approximately $51.5 billion and $26.6        
billion, respectively. The potential loss in fair value resulting from a 10%    
adverse shift in quoted interest rates would be approximately $2.7 billion and  
$1.6 billion for 2003 and 2002, respectively. At December 31, 2003 and 2002, the
net fair value asset of financial instruments held for trading purposes with    
exposure to interest rate risk was approximately $4.1 billion and $4.4 billion, 
respectively. The potential loss in fair value resulting from a 10% adverse     
shift in quoted interest rates would be approximately $11 million and $26       
million for 2003 and 2002, respectively. This analysis excludes GM's operating  
lease portfolio. A fair value change in the debt that funds this portfolio would
potentially have a different impact on the fair value of the portfolio itself.  
As such, the overall effect to the fair value of financial instruments from a   
hypothetical change in interest rates may be overstated.                        

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ITEM 7A.  Quantitative and Qualitative Disclosures About Market Risk (concluded)

Commodity Price Risk                                                            
GM is exposed to changes in prices of commodities used in its Automotive  
business, primarily associated with various non-ferrous metals used in the      
manufacturing of automotive components. GM enters into commodity forward and    
option contracts to offset such exposure. At December 31, 2003 the net fair     
value asset of such contracts was approximately $194 million. At December 31,   
2002 the net fair value liability of such contracts was $40 million. The        
potential loss in fair value resulting from a 10% adverse change in the         
underlying commodity prices would be approximately $190 million and $189 million
for 2003 and 2002, respectively. This amount excludes the offsetting impact of  
the price risk inherent in the physical purchase of the underlying commodities. 

Equity Price Risk                                                               
GM is exposed to changes in prices of various available-for-sale equity   
securities in which it invests. At December 31, 2003 and 2002, the fair value of
such investments was approximately $2.2 billion and $1.6 billion, respectively. 
The potential loss in fair value resulting from a 10% adverse change in equity  
prices would be approximately $216 million and $157 million for 2003 and 2002,  
respectively.                                                                   

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Independent Auditors' Report                                                    

General Motors Corporation, its Directors, and Stockholders:                    

We have audited the accompanying Consolidated Balance Sheets of General Motors  
Corporation and subsidiaries (the Corporation) as of December 31, 2003 and 2002,
and the related Consolidated Statements of Income, Cash Flows, and Stockholders'
Equity for each of the three years in the period ended December 31, 2003. Our   
audits also included the Supplemental Information to the Consolidated Balance   
Sheets and Consolidated Statements of Income and Cash Flows and the financial   
statement schedule listed at Item 15 (collectively, the financial statement     
schedules). These financial statements and financial statement schedules are the
responsibility of the Corporation's management. Our responsibility is to express
an opinion on these financial statements and financial statement schedules based
on our audits.                                                                  

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and       
perform the audit to obtain reasonable assurance about whether the financial    
statements are free of material misstatement. An audit includes examining, on a 
test basis, evidence supporting the amounts and disclosures in the financial    
statements. An audit also includes assessing the accounting principles used and 
significant estimates made by management, as well as evaluating the overall     
financial statement presentation. We believe that our audits provide a          
reasonable basis for our opinion.                                               

In our opinion, such consolidated financial statements present fairly, in all   
material respects, the financial position of General Motors Corporation and     
subsidiaries at December 31, 2003 and 2002, and the results of their operations 
and their cash flows for each of the three years in the period ended December   
31, 2003, in conformity with accounting principles generally accepted in the    
United States of America. Also, in our opinion, such financial statement        
schedules, when considered in relation to the basic consolidated financial      
statements taken as a whole, present fairly, in all material respects, the      
information set forth therein.                                                  

As discussed in Note 1 to the Consolidated Financial Statements, the            
Corporation: (1) effective July 1, 2003, began consolidating certain variable   
interest entities to conform to FASB Interpretation No. 46, "Consolidation of   
Variable Interest Entities," (2) effective January 1, 2003, began expensing the 
fair market value of newly granted stock options and other stock-based          
compensation awards issued to employees to conform to Statement of Financial    
Accounting Standards (SFAS) No. 123, "Accounting for Stock-Based Compensation"  
and (3) effective January 1, 2002, changed its method of accounting for         
goodwill and other intangible assets to conform to SFAS No. 142, "Goodwill and  
Other Intangible Assets."                                                       

/s/DELOITTE & TOUCHE LLP                                                        
------------------------                                                        
DELOITTE & TOUCHE LLP                                                           

Detroit, Michigan                                                               
March 10, 2004                                                                  

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ITEM 8                                                                          

 GENERAL MOTORS CORPORATION AND SUBSIDIARIES

 CONSOLIDATED STATEMENTS OF INCOME

                                              Years Ended December 31,
                                              ------------------------
                                                2003      2002        2001
                                                ----      ----        ----
                                               (dollars in millions except
                                                per share amounts)
GENERAL MOTORS CORPORATION AND SUBSIDIARIES                                     
Total net sales and revenues (Notes 1 and 24)  $185,524  $177,324    $169,051   
                                             -------   -------     -------
Cost of sales and other expenses (Note 5)       152,071   146,793     138,847   
Selling, general, and administrative expenses    21,008    20,690      19,433   
Interest expense (Note 16)                        9,464     7,503       8,317   
                                             -------   -------     -------
Total costs and expenses                      182,543   174,986     166,597 
                                             -------   -------     -------
Income from continuing operations before                                        
income taxes, equity income                                                 
and minority interests                          2,981     2,338       2,454 
Income tax expense (Note 11)                        731       644       1,094   
Equity income (loss) and minority interests         612       281        (138)  
                                               -----     -----       -----
Income from continuing operations                 2,862     1,975       1,222   
Loss from discontinued operations (Note 2)         (219)     (239)       (621)  
Gain on sale of discontinued operations           1,179         -           -   
                                               -----     -----       -----
Net income                                      3,822     1,736         601 
Dividends on preference stocks                        -       (46)        (99)  
                                               -----     -----       -----
Earnings attributable to common stocks                                      
 (Note 20)                                    $3,822    $1,690        $502
                                               =====     =====         ===

Basic earnings (loss) per share attributable to                                 
common stocks                                                               
$1-2/3 par value                                                                
Continuing operations                           $5.10     $3.53       $2.21 
Discontinued operations                         $2.14    $(0.16)     $(0.42)
                                                ----      ----        ----
Earnings per share attributable to                                              
$1-2/3 par value                                $7.24     $3.37       $1.79 
                                                ====      ====        ====
Losses per share from discontinued operations                                   
attributable to Class H                        $(0.22)   $(0.21)     $(0.55)
                                                ====      ====        ====

Earnings (loss) per share attributable to                                       
common stocks assuming dilution                                             
$1-2/3 par value                                                                
Continuing operations                           $5.03     $3.51       $2.20 
Discontinued operations                         $2.11    $(0.16)     $(0.43)
                                                ----      ----        ----
Earnings per share attributable to $1-2/3                                       
par value                                       $7.14     $3.35       $1.77 
                                                ====      ====        ====
Losses per share from discontinued operations                                   
attributable to Class H                        $(0.22)   $(0.21)     $(0.55)
                                                ====      ====        ====

Reference should be made to the notes to consolidated financial statements.     

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 SUPPLEMENTAL INFORMATION TO THE CONSOLIDATED STATEMENTS OF INCOME

                                                Years Ended December 31,
                                                ------------------------
                                                2003      2002        2001
                                                ----      ----        ----
                                                 (dollars in millions)
AUTOMOTIVE AND OTHER OPERATIONS                                                 
Total net sales and revenues (Notes 1 and 24)  $155,831  $150,250    $143,173   
                                             -------   -------     -------
Cost of sales and other expenses (Note 5)       143,464   138,359     130,158   
Selling, general, and administrative expenses    11,863    11,749      12,430   
                                             -------   -------     -------
Total costs and expenses                      155,327   150,108     142,588 
                                             -------   -------     -------
Interest expense (Note 16)                        1,780       479         572   
Net expense from transactions with                                              
Financing and Insurance Operations (Note 1)       232       296         435 
                                                 ---       ---         ---
(Loss) from continuing operations before                                        
income taxes, equity income,                                                
and minority interests                         (1,508)     (633)       (422)
Income tax (benefit) expense (Note 11)             (869)     (378)         56   
Equity income (loss) and minority interests         674       348         (68)  
                                                 ---       ---       -----
Income (loss) from continuing operations             35        93        (546)  
(Loss) from discontinued operations (Note 2)       (219)     (239)       (621)  
Gain on sale of discontinued operations           1,179         -           -   
                                               -----       ---       -----
Net income (loss) - Automotive and Other                                    
  Operations                                     $995     $(146)    $(1,167)
                                                 ===       ===       =====

FINANCING AND INSURANCE OPERATIONS                                              

Total revenues                                  $29,693   $27,074     $25,878   
                                              ------    ------      ------

Interest expense (Note 16)                        7,684     7,024       7,745   
Depreciation and amortization expense (Note 12)   6,032     5,541       5,857   
Operating and other expenses                      8,529     8,306       7,308   
Provisions for financing and insurance losses                                   
(Note 1)                                        3,191     3,528       2,527 
                                              ------    ------      ------
Total costs and expenses                       25,436    24,399      23,437 
                                              ------    ------      ------
Net income from transactions with Automotive                                    
and Other Operations (Note 1)                    (232)     (296)       (435)
                                               -----     -----       -----
Income before income taxes, equity income and                                   
minority interests                              4,489     2,971       2,876 
Income tax expense (Note 11)                      1,600     1,022       1,038   
Equity income (loss) and minority interests         (62)      (67)        (70)  
                                               -----     -----       -----
Net income - Financing and Insurance                                        
 Operations                                   $2,827    $1,882      $1,768
                                               =====     =====       =====

The above Supplemental Information is intended to facilitate analysis of        
General Motors Corporation's businesses:  (1) Automotive and Other              
Operations; and (2) Financing and Insurance Operations.                         

Reference should be made to the notes to consolidated financial statements.     

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CONSOLIDATED BALANCE SHEETS   

                                                        December 31,
                                                        ------------
                                                         2003     2002
                          ASSETS                         (dollars in millions)

Cash and cash equivalents (Note 1)                         $32,554    $20,320   
Other marketable securities  (Note 6)                       22,215     16,825   
                                                         ------     ------
Total cash and marketable securities                      54,769     37,145 
Finance receivables - net (Note 8)                         173,137    134,643   
Loans held for sale                                         19,609     15,720   
Accounts and notes receivable (less allowances)             20,532     16,337   
Inventories (less allowances) (Note 9)                      10,960      9,737   
Assets of discontinued operations                                -     18,653   
Deferred income taxes (Note 11)                             27,190     39,767   
Net equipment on operating leases                                               
(less accumulated depreciation) (Note 10)                 34,383     31,026 
Equity in net assets of nonconsolidated affiliates           6,032      5,097   
Property - net (Note 12)                                    38,211     35,956   
Intangible assets - net (Notes 1 and 13)                     4,760     10,796   
Other assets (Note 14)                                      58,924     14,176   
                                                        -------    -------
Total assets                                            $448,507   $369,053 
                                                        =======    =======

LIABILITIES AND STOCKHOLDERS' EQUITY                    

Accounts payable (principally trade)                       $25,422    $21,138   
Notes and loans payable (Note 16)                          271,756    200,168   
Liabilities of discontinued operations                           -      7,956   
Postretirement benefits other than pensions (Note 17)       36,292     38,152   
Pensions (Note 17)                                           8,024     22,679   
Deferred income taxes (Notes 11 and 15)                      7,508      6,523   
Accrued expenses and other liabilities (Note 15)            73,930     65,344   
                                                        -------    -------
Total liabilities                                        422,932    361,960 
Minority interests                                             307        279   
Stockholders' equity (Note 19)                                                  
$1-2/3 par value common stock (outstanding,                                     
561,997,725 and  560,447,797 shares)                         937        936 
Class H common stock (outstanding,                                              
958,284,272 shares in  2002)                                   -         96 
Capital surplus (principally additional paid-in capital)    15,185     21,583   
Retained earnings                                           12,752     10,031   
                                                         ------     ------
Subtotal                                                 28,874     32,646
Accumulated foreign currency translation adjustments        (1,815)    (2,784)  
Net unrealized gains (losses) on derivatives                    51       (205)  
Net unrealized gains on securities                             618        372   
Minimum pension liability adjustment                        (2,460)   (23,215)  
                                                          -----     ------
Accumulated other comprehensive loss                      (3,606)   (25,832)
                                                          -----     ------
  Total stockholders' equity                             25,268      6,814
                                                        -------    -------
Total liabilities and stockholders' equity                $448,507   $369,053   
                                                        =======    =======

Reference should be made to the notes to consolidated financial statements.     

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 SUPPLEMENTAL INFORMATION TO THE CONSOLIDATED BALANCE SHEETS

                                                            December 31,
GENERAL MOTORS CORPORATION AND SUBSIDIARIES                   2003       2002   
                                                           ----       ----
                           ASSETS                        (dollars in millions)
Automotive and Other Operations                                                 
Cash and cash equivalents (Note 1)                         $14,424    $12,162   
Marketable securities (Note 6)                               9,067      2,174   
                                                         ------     ------
Total cash and marketable securities                      23,491     14,336 
Accounts and notes receivable (less allowances)              5,380      4,735   
Inventories (less allowances) (Note 9)                      10,960      9,737   
Assets of discontinued operations                                -     18,653   
Net equipment on operating leases (less accumulated                             
depreciation) (Note 10)                                    7,173      5,305 
Deferred income taxes and other current assets (Note 11)    10,851      9,631   
                                                         ------     ------
Total current assets                                      57,855     62,397 
Equity in net assets of nonconsolidated affiliates           6,032      5,097   
Property - net (Note 12)                                    36,071     34,135   
Intangible assets - net (Notes 1 and 13)                     1,479      7,453   
Deferred income taxes (Note 11)                             18,086     31,431   
Other assets (Note 14)                                      42,262      1,461   
                                                        -------     ------
Total Automotive and Other Operations assets             161,785    141,974 
Financing and Insurance Operations                                              
Cash and cash equivalents (Note 1)                          18,130      8,158   
Investments in securities (Note 6)                          13,148     14,651   
Finance receivables - net (Note 8)                         173,137    134,643   
Loans held for sale                                         19,609     15,720   
Net equipment on operating leases (less accumulated                             
depreciation) (Note 10)                                   27,210     25,721 
Other assets (Note 14)                                      35,488     28,186   
Net receivable from Automotive and Other Operations                             
(Note 1)                                                   1,492      1,089 
                                                        -------    -------
Total Financing and Insurance Operations assets          288,214    228,168 
                                                        -------    -------
Total assets                                              $449,999   $370,142   
                                                        =======    =======

LIABILITIES AND STOCKHOLDERS' EQUITY                  

Automotive and Other Operations                                                 
Accounts payable (principally trade)                       $21,542    $17,919   
Loans payable (Note 16)                                      2,813      1,994   
Liabilities of discontinued operations                           -      7,956   
Accrued expenses (Note 15)                                  45,417     39,113   
Net payable to Financing and Insurance Operations (Note 1)   1,492      1,089   
                                                         ------     ------
Total current liabilities                                 71,264     68,071 
Long-term debt (Note 16)                                    29,593     14,261   
Postretirement benefits other than pensions (Note 17)       32,285     34,244   
Pensions (Note 17)                                           7,952     22,633   
Other liabilities and deferred income taxes                                     
(Notes 11 and 15)                                         15,567     13,734 
                                                        -------    -------
Total Automotive and Other Operations liabilities        156,661    152,943 
Financing and Insurance Operations                                              
Accounts payable                                             3,880      3,219   
Debt (Note 16)                                             239,350    183,913   
Other liabilities and deferred income taxes                                     
(Note 11 and 15)                                          24,533     22,974 
                                                        -------    -------
Total Financing and Insurance Operations liabilities     267,763    210,106 
                                                        -------    -------
Total liabilities                                       424,424    363,049
Minority interests                                             307        279   
Total stockholders' equity                                25,268      6,814 
                                                        -------    -------
Total liabilities and stockholders' equity                $449,999   $370,142   
                                                        =======    =======

The above Supplemental Information is intended to facilitate analysis of        
General Motors Corporation's businesses:  (1) Automotive and Other              
Operations; and (2) Financing and Insurance Operations.                         

Reference should be made to the notes to consolidated financial statements.     

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CONSOLIDATED STATEMENTS OF CASH FLOWS         

                                          For The Years Ended December 31,
                                           2003        2002         2001
                                           ----        ----         ----
Cash flows from operating activities               (dollars in millions)        
Income from continuing operations            $2,862      $1,975       $1,222    
Adjustments to reconcile income from                                            
continuing operations to net  cash                                          
provided by operating activities                                            
Depreciation and amortization expenses    13,978      11,865       11,764 
Mortgage servicing rights                                                 
amortization                              1,602       3,871          948
Provision for financing losses             1,608       2,028        1,472 
Other postretirement employee benefit                                     
(OPEB) expense                            4,599       4,108        3,720
OPEB payments                             (3,536)     (3,334)      (3,120)
VEBA (contributions)/ withdrawls          (3,000)     (1,000)       1,300 
Pension expense                            3,412       1,780          540 
Pension contributions                    (18,168)     (5,156)        (317)
Retiree lump sum and vehicle voucher                                      
 expense, net of payments                    923        (254)        (136)
Net change in mortgage loans                 456      (4,715)      (4,615)
Net change in mortgage securities            236        (656)        (777)
Change in other investments and                                           
miscellaneous assets                      1,741       1,335          180
Change in other operating assets and                                      
 liabilities (Note 1)                        792       4,477         (234)
Other                                         95        (842)         233 
                                          -----      ------       ------
Net cash provided by operating activities    $7,600     $15,482      $12,180    
                                          -----      ------       ------

Cash flows from investing activities                                            
Expenditures for property                    (7,330)     (6,871)      (7,832)   
Investments in marketable securities -                                          
acquisitions                              (28,660)    (39,386)     (38,248) 
Investments in marketable securities -                                          
liquidations                               24,253      35,688       37,560  
Net change in mortgage servicing rights      (2,557)     (1,711)      (2,075)   
Increase in finance receivables            (149,419)   (143,024)    (107,566)   
Proceeds from sale of finance receivables   107,505     117,276       95,949    
Proceeds from sale of business units          4,148           -            -    
Operating leases - acquisitions             (11,761)    (16,624)     (12,938)   
Operating leases - liquidations               9,952      13,994       11,892    
Investments in companies, net of cash                                           
acquired (Note 1)                            (201)       (870)      (1,283) 
Other                                        (1,422)      1,004          126    
                                         ------     -------      -------
Net cash used in investing activities       (55,492)   (40,524)     (24,415)    
                                         ------     -------      -------

Cash flows from financing activities                                            
Net increase (decrease) in loans payable        235         770      (21,740)   
Long-term debt - borrowings                  97,391      51,411       62,956    
Long-term debt - repayments                 (38,963)    (24,365)     (19,789)   
Repurchases of common and preference stocks       -         (97)        (264)   
Proceeds from issuing common stocks               -          62          100    
Proceeds from sales of treasury stocks           60          19          418    
Cash dividends paid to stockholders          (1,121)     (1,121)      (1,105)   
Other                                         1,320         333          924    
                                         ------      ------       ------
Net cash provided by financing activities    58,922      27,012       21,500    
                                         ------      ------       ------

Net cash provided by discontinued operations    275           -            -    

Effect of exchange rate changes on                                              
cash and cash equivalents                     929         495          (96) 
                                         ------      ------       ------

Net increase in cash and cash equivalents    12,234       2,465        9,169    
Cash and cash equivalents at beginning of                                       
the year                                   20,320      17,855        8,686  
                                         ------      ------       ------

Cash and cash equivalents at end                                                
of the year                               $32,554     $20,320      $17,855  
                                         ======      ======       ======

Reference should be made to the notes to consolidated financial statements.     

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                   GENERAL MOTORS CORPORATION AND SUBSIDIARIES                                                 
      SUPPLEMENTAL INFORMATION TO THE CONSOLIDATED STATEMENTS OF CASH FLOWS                                    


                                          For The Years Ended December 31,                                     

                                               2003                   2002                      2001           
                                      -------------------------------------------------------------------------

                                      Automotive  Financing   Automotive    Financing    Automotive   Financing
                                      and Other      and      and Other        and       and Other       and   
                                      Operations  Insurance   Operations    Insurance    Operations   Insurance
                                      ----------  ---------   ----------    ---------    ----------   ---------
Cash flows from operating                                     (dollars in millions)                            
  activities                                                                                                   
                                                                                                               
Income (loss) from continuing                                                                                  
  operations                               $35    $2,827           $93      $1,882         $(546)     $1,768   
Adjustments to reconcile income                                                                                
  (loss) from continuing                                                                                       
  operations to net cash provided                                                                              
  by operating activities                                                                                      
   Depreciation and amortization                                                                               
    expenses                             7,946     6,032         6,324       5,541          5,907       5,857  
   Mortgage servicing rights                                                                                   
    amortization                             -     1,602             -       3,871              -         948  
   Provision for financing losses            -     1,608             -       2,028              -       1,472  
   Postretirement benefits other                                                                               
    than pensions,                                                                                             
    net of payments and VEBA                                                                                   
    contributions                       (1,957)       20          (241)         15          1,893           7  
   Pension expense, net of                                                                                     
    contributions                      (13,869)       36        (3,639)          9             74          13  
   Net change in mortgage loans              -       456             -      (4,715)             -      (4,615) 
   Net change in mortgage                                                                                      
    securities                               -       236             -        (656)             -        (777) 
   Change in other investments                                                                                 
     and miscellaneous assets             (200)    1,941         2,064        (729)           591        (411) 
   Change in other operating                                                                                   
    assets and liabilities (Note 1)      3,067    (2,275)        3,808         669         (1,152)        918  
   Other                                  (348)      443          (398)       (444)         1,020        (787) 
                                         ------    ------       ------      ------          -----       -----  
Net cash (used in) provided by                                                                                 
  operating activities                 $(5,326)  $12,926        $8,011      $7,471         $7,787      $4,393  
                                         -----    ------         -----       -----          -----       -----  
Cash flows from investing                                                                                      
  activities                                                                                                   
Expenditures for property               (6,616)     (714)       (6,414)       (457)        (7,812)        (20) 
Investments in marketable                                                                                      
  securities - acquisitions            (13,138)  (15,522)       (2,228)    (37,158)          (767)    (37,481) 
Investments in marketable                                                                                      
  securities - liquidations              7,109    17,144           873      34,815          1,228      36,332  
Net change in mortgage servicing                                                                               
  rights                                     -    (2,557)            -      (1,711)             -      (2,075) 
Increase in finance receivables              -  (149,419)            -    (143,024)             -    (107,566) 
Proceeds from sales of finance                                                                                 
  receivables                                -   107,505             -     117,276              -      95,949  
Proceeds from sale of business                                                                                 
  units                                  4,148         -             -           -              -           -  
Operating leases - acquisitions              -   (11,761)            -     (16,624)             -     (12,938) 
Operating leases - liquidations              -     9,952             -      13,994              -      11,892  
Investments in companies, net of                                                                               
  cash acquired  (Note 1)                  (57)     (144)         (688)       (182)          (741)       (542) 
Net investing activity with                                                                                    
  Financing and Insurance Operations     1,000         -           400           -           (500)          -  
Other                                      332    (1,754)        1,513        (509)           244        (118) 
                                         -----     -----         -----      ------          -----      ------  
Net cash provided by in                                                                                        
  investing activities                  (7,222)  (47,270)       (6,544)    (33,580)        (8,348)    (16,567) 
                                         -----    ------         -----      ------          -----      ------  
Cash flows from financing                                                                                      
  activities                                                                                                   
Net (decrease) increase in loans                                                                               
  payable                                 (234)      469          (335)      1,105         (1,440)    (20,300) 
Long-term debt - borrowings             14,785    82,606         4,562      46,849          4,435      58,521  
Long-term debt - repayments                (19)  (38,944)         (145)    (24,220)          (884)    (18,905) 
Net financing activity with                                                                                    
Automotive and Other                                                                                           
  Operations                                 -    (1,000)            -        (400)             -         500  
Repurchases of common and                                                                                      
  preference stocks                          -         -           (97)          -           (264)          -  
Proceeds from issuing common                                                                                   
  stocks                                     -         -            62           -            100           -  
Proceeds from sales of treasury                                                                                
  stocks                                    60         -            19           -            418           -  
Cash dividends paid to                                                                                         
  stockholders                          (1,121)        -        (1,121)          -         (1,105)          -  
Other                                        -     1,320             -         333              -         924  
                                        ------    ------         -----      ------          -----      ------  
Net cash provided by financing                                                                                 
  activities                            13,471    44,451         2,945      23,667          1,260      20,740  
                                        ------    ------         -----      ------          -----      ------  
Net cash provided by                                                                                           
  discontinued operations                  275         -             -           -              -           -  
Effect of exchange rate changes                                                                                
  on cash and cash equivalents             661       268           485          10            (74)        (22) 
Net transactions with                                                                                          
  Automotive/Financing                                                                                         
  Operations                               403      (403)         (467)        467           (414)        414  
                                        ------     -----        ------      ------            ---       -----  
Net increase (decrease) in cash                                                                                
  and cash equivalents                   2,262     9,972         4,430      (1,965)           211       8,958  
Cash and cash equivalents at                                                                                   
  beginning of the year                 12,162     8,158         7,732      10,123          7,521       1,165  
                                        ------    ------        ------      ------          -----      ------  
Cash and cash equivalents at end                                                                               
  of the year                          $14,424   $18,130       $12,162      $8,158         $7,732     $10,123  
                                        ======    ======        ======       =====          =====      ======  

The above Supplemental Information is intended to facilitate analysis of        
General Motors Corporation's businesses:  (1) Automotive and Other              
Operations; and (2) Financing and Insurance Operations.                         

Reference should be made to the notes to consolidated financial statements.     

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                   GENERAL MOTORS CORPORATION AND SUBSIDIARIES                                                 

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY                                               
              FOR THE YEARS ENDED DECEMBER 31, 2003, 2002, and 2001                                            


                                                                                   Accumulated                 
                                         Total                                         Other        Total      
                                       Capital   Capital  Comprehensive  Retained  Comprehensive  Stockholders'
                                         Stock   Surplus  Income (Loss)  Earnings       Loss         Equity    
                                         -----   -------  -------------  --------       ----         ------    
                                                               (dollars in millions)                           
                                                                                                               
Balance at January 1, 2001              $1,002   $21,020                   $10,119    $(1,966)       $30,175   
Shares reacquired                            -      (125)                        -          -           (125)  
Shares issued                              18        624                         -          -            642   
Comprehensive income:                                                                                          
   Net income                                -         -          $601         601          -            601   
                                                                   ---                                         
  Other comprehensive income (loss):                                                                           
   Foreign currency translation                                                                                
    adjustments                              -         -          (417)          -          -              -   
   Unrealized losses on derivatives          -         -          (307)          -          -              -   
   Unrealized losses on securities           -         -           (69)          -          -              -   
   Minimum pension liability                                                                                   
    adjustment                               -         -        (9,536)          -          -              -   
                                                                 -----                                         
    Other comprehensive loss                 -         -       (10,329)               (10,329)       (10,329)  
                                                                ------                                         
      Comprehensive loss                     -         -       $(9,728)          -          -              -   
                                                                 =====                                         
Delphi spin-off adjustment (a)               -         -                       (56)         -            (56)  
Cash dividends                               -         -                    (1,201)         -         (1,201)  
                                         -----    ------                     -----     ------         ------   
Balance at December 31, 2001             1,020    21,519                     9,463    (12,295)        19,707   
Shares reacquired                            -    (2,086)                        -          -         (2,086)  
Shares issued                               12     2,150                         -          -          2,162   
Comprehensive income:                                                                                          
  Net income                                 -         -        $1,736       1,736          -          1,736   
                                                                 -----                                         
  Other comprehensive income (loss):                                                                           
   Foreign currency translation                                                                                
    adjustments                              -         -           135           -          -              -   
   Unrealized gains on derivatives           -         -           102           -          -              -   
   Unrealized losses on securities           -         -          (140)          -          -              -   
   Minimum pension liability                                                                                   
    adjustment                               -         -       (13,634)          -          -              -   
                                                                ------                                         
    Other comprehensive loss                 -         -       (13,537)          -    (13,537)       (13,537)  
                                                                ------                                         
      Comprehensive loss                     -         -      $(11,801)          -          -              -   
                                                                ======                                         
Cash dividends                               -         -                    (1,168)         -         (1,168)  
                                         -----    ------                    ------     ------          -----   
Balance at December 31, 2002            $1,032   $21,583                   $10,031   $(25,832)        $6,814   
Shares issued                               16     1,324                         -          -          1,340   
Comprehensive income:                                                                                          
  Net income                                 -         -        $3,822       3,822          -          3,822   
                                                                 -----                                         
  Other comprehensive income:                                                                                  
   Foreign currency translation                                                                                
    adjustments                              -         -           969           -          -              -   
   Unrealized gains on derivatives           -         -           256           -          -              -   
   Unrealized losses on securities           -         -           246           -          -              -   
   Minimum pension liability                                                                                   
    adjustment                               -         -        20,755           -          -              -   
                                                                ------                                         
    Other comprehensive income               -         -        22,226           -     22,226         22,226   
                                                                ------                                         
      Comprehensive income                   -         -       $26,048           -          -              -   
                                                                ======                                         
Effect of Hughes transactions                                                                                  
  (Note 2)                                (111)   (8,056)                                             (8,167)  
Stock Options                                        334                                                 334   
Delphi spin-off adjustment (b)               -         -                        20          -             20   
Cash dividends                               -         -                    (1,121)         -         (1,121)  
                                           ---    ------                    ------      -----         ------   
 Balance at December 31, 2003             $937   $15,185                   $12,752    $(3,606)       $25,268   
                                           ===    ======                    ======      =====         ======   

(a) Resolution of workers' compensation, pension, and other postemployment      
 liabilities owed to GM by Delphi Automotive Systems, which GM spun off in
1999.                                                                   
(b) Write off deferred taxes related to the 1999 spin-off of Delphi             
Automotive Systems.                                                     

Reference should be made to the notes to consolidated financial statements.     

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.  Significant Accounting Policies                                        

Principles of Consolidation                                                     
  The consolidated financial statements include the accounts of General Motors
Corporation and domestic and foreign subsidiaries that are more than 50% owned, 
principally General Motors Acceptance Corporation and Subsidiaries (GMAC),      
(collectively referred to as the "Corporation," "General Motors" or "GM"). In   
addition, GM consolidates variable interest entities (VIEs) for which it is     
deemed to be the primary beneficiary. General Motors' share of earnings or      
losses of associates, in which at least 20% of the voting securities is owned,  
is included in the consolidated operating results using the equity method of    
accounting, except for investments where GM is not able to exercise significant 
influence over the operating and financial decisions of the investee, in which  
case, the cost method of accounting is used. GM encourages reference to the GMAC
Annual Report on Form 10-K for the period ended December 31, 2003, filed        
separately with the U.S. Securities and Exchange Commission (SEC).              
  Certain amounts for 2002 and 2001 have been reclassified to conform with the
2003 classifications.                                                           

Nature of Operations, Financial Statement Presentation, and Supplemental        
Information                                                                     
 GM presents its primary financial statements on a fully consolidated basis.
Transactions between businesses have been eliminated in the Corporation's       
consolidated financial statements. These transactions consist principally of    
borrowings and other financial services provided by Financing and Insurance     
Operations (FIO) to Automotive and Other Operations (Auto & Other).             
To facilitate analysis, GM presents supplemental information to the       
statements of income, balance sheets, and statements of cash flows for the      
following businesses: (1) Auto & Other, which consists of the design,           
manufacturing, and marketing of cars, trucks, locomotives, and related parts and
accessories; and (2) FIO, which consists primarily of GMAC. GMAC provides a     
broad range of financial services, including consumer vehicle financing,        
full-service leasing and fleet leasing, dealer financing, car and truck extended
service contracts, residential and commercial mortgage services, vehicle and    
homeowners' insurance, and asset-based lending.                                 

Use of Estimates in the Preparation of the Financial Statements                 
The preparation of financial statements in conformity with accounting     
principles generally accepted in the United States requires management to make  
estimates and assumptions that affect amounts reported therein. Due to the      
inherent uncertainties involved in making estimates, actual results reported in 
future periods may differ from those estimates.                                 

Revenue Recognition                                                             
  Sales generally are recorded when products are shipped (when title and risks
and rewards of ownership have passed), or when services are rendered to         
independent dealers or other third parties. Provisions for dealer and customer  
sales incentives, allowances, and rebates are made at the time of vehicle sales.
Incentives, allowances, and rebates related to vehicles previously sold are     
recognized as reductions of sales when announced.                               
Financing revenue is recorded over the terms of the receivables using the 
interest method. Income from operating lease assets is recognized on a          
straight-line basis over the scheduled lease terms.                             
Insurance premiums are earned on a basis related to coverage provided over
the terms of the policies. Commissions, premium taxes, and other costs incurred 
in acquiring new business are deferred and amortized over the terms of the      
related policies on the same basis as premiums are earned.                      

Advertising and Research and Development                                        
Advertising, research and development, and other product-related costs are
charged to expense as incurred. Advertising expense was $4.7 billion in 2003,   
$4.4 billion in 2002, and $4.1 billion in 2001. Research and development expense
was $5.7 billion in 2003 and 2002, and $6.1 billion in 2001.                    

Depreciation and Amortization                                                   
Expenditures for special tools placed in service after January 1, 2002 are
amortized using the straight-line method over their estimated useful lives.     
Expenditures for special tools placed in service prior to January 1, 2002, are  
amortized over their estimated useful lives, primarily using the units of       
production method. Replacements of special tools for reasons other than changes 
in products are charged directly to cost of sales. As of January 1, 2001, the   
Corporation adopted the straight-line method of depreciation for real estate,   
plants, and equipment placed in service after that date. Assets placed in       
service before January 1, 2001, continue generally to be depreciated using      
accelerated methods. The accelerated methods accumulate depreciation of         
approximately two-thirds of the depreciable cost during the first half          

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.  Significant Accounting Policies (continued)                            

Depreciation and Amortization (concluded)                                       
of the estimated useful lives of property groups as compared to the             
straight-line method, which allocates depreciable costs equally over the        
estimated useful lives of property groups. Management believes the adoption of  
the straight-line amortization/depreciation method for special tools placed into
service after January 1, 2002, and real estate, plants, and equipment placed    
into service after January 1, 2001, better reflects the consistent use of these 
assets over their useful lives.                                                 
 Equipment on operating leases is depreciated using the straight-line method
over the term of the lease agreement. The difference between the net book value 
and the proceeds of sale or salvage on items disposed of is accounted for as a  
charge against or credit to the provision for depreciation.                     

Valuation of Long-Lived Assets                                                  
  GM periodically evaluates the carrying value of long-lived assets to be held
and used in the business, other than goodwill and intangible assets with        
indefinite lives, and assets held for sale when events and circumstances        
warrant, generally in conjunction with the annual business planning cycle. If   
the carrying value of a long-lived asset is considered impaired, a loss is      
recognized based on the amount by which the carrying value exceeds the fair     
market value for assets to be held and used. For assets held for sale, such loss
is further increased by costs to sell. Fair market value is determined primarily
using the anticipated cash flows discounted at a rate commensurate with the risk
involved. Long-lived assets to be disposed of other than by sale are considered 
held and used until disposed of.                                                

Goodwill and Other Intangible Assets                                            
Prior to January 1, 2002, goodwill was amortized using the straight-line  
method over 20 to 40 year periods. On January 1, 2002, the Corporation          
implemented Statement of Financial Accounting Standards (SFAS) No. 142,         
"Goodwill and Other Intangible Assets," which ceased the amortization method of 
accounting for goodwill and changed to an impairment-only approach. Accordingly,
goodwill is no longer amortized and is tested for impairment at least annually. 
GM's reported income and earnings per share from continuing operations    
information, exclusive of amortization expense recognized related to goodwill   
required under previous accounting standards on an after-tax basis, is as       
follows (dollars in millions except per share amounts):                         

                                        Years-Ended December 31,
                                        ----------------------------
                                        2003      2002      2001
                                        ----      ----      ----

Net Income from continuing operations, as                                       
reported                                   $2,862    $1,975    $1,222     
Add:                                                                            
Goodwill amortization                              -         -       107        
                                        -----     -----     ------
Adjusted net income                         $2,862    $1,975    $1,329      
Basic earnings per share from continuing                                        
operations attributable to GM $1-2/3 par                                  
value                                                                     
Reported                                    $5.10     $3.53     $2.21     
Adjusted                                    $5.10     $3.53     $2.41     

Earnings per share from continuing                                              
operations attributable to GM $1-2/3 par                                  
value assuming dilution                                                   
Reported                                    $5.03     $3.51     $2.20     
Adjusted                                    $5.03     $3.51     $2.39     

Foreign Currency Transactions and Translation                                   
 Foreign currency exchange transaction and translation losses, including the
effect of derivatives, net of taxes, included in consolidated net income in     
2003, 2002, and 2001, pursuant to SFAS No. 52, "Foreign Currency Translation,"  
amounted to $122 million, $103 million, and $129 million, respectively.         

Policy and Warranty                                                             
 Provisions for estimated expenses related to product warranties are made at
the time products are sold. These estimates are established using historical    
information on the nature, frequency, and average cost of warranty claims.      
Management actively studies trends of warranty claims and takes action to       
improve vehicle quality and minimize warranty claims. (See Note 15.)            

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.  Significant Accounting Policies (continued)                            

Cash and Cash Equivalents                                                       
Cash equivalents are defined as short-term, highly-liquid investments with
original maturities of 90 days or less.                                         

Statements of Cash Flows Supplementary Information                              
                                                  Years Ended December 31,
                                                 -----------------------------
Automotive and Other Operations                      2003      2002      2001   
-------------------------------                      ----      ----      ----   
                                                 (dollars in millions)
Increase (decrease) in cash due to changes in                                   
other operating assets and liabilities was as                             
follows:                                                                  
 Accounts receivable                              $(575)      $(93)      $76
  Prepaid expenses and other deferred charges       (578)       268       (93)
 Inventories                                       (518)       221       545
 Accounts payable                                 2,400      1,053       545
  Deferred taxes and income taxes payable          2,219     (1,825)   (1,404)
  Accrued expenses and other liabilities           3,049      5,517    (1,384)
  Fleet rental - acquisitions                     (7,761)    (5,595)   (4,997)
 Fleet rental - liquidations                      4,831      4,262     5,560
                                                  -----      -----     -----
    Total                                         $3,067     $3,808   $(1,152)
                                                  =====      =====     =====

Cash paid for interest                             $1,398     $1,033      $700  

During 2003, Auto & Other made investments in companies, net of cash      
acquired, of approximately $60 million.                                         
During 2002, Auto & Other made investments in companies, net of cash      
acquired, of approximately $700 million. This amount consists primarily of GM's 
purchase of a 44.6% equity interest in GM Daewoo Auto & Technology Company (GM  
Daewoo) for approximately $251 million and GM's investments in Isuzu-related    
entities for $180 million.                                                      
 During 2001, the majority of the $740 million of investments made by Auto &
Other consisted of GM's purchase of an additional 10% ownership in Suzuki Motor 
Corporation (Suzuki) for approximately $520 million.                            

                                                  Years Ended December 31,
                                                ----------------------------
Financing and Insurance Operations                   2003      2002      2001   
----------------------------------                   ----      ----      ----   
                                                 (dollars in millions)
Increase (decrease) in cash due to changes in                                   
other                                                                     
Operating assets and liabilities was as follows:                            
  Other receivables                              $(1,050)     $(278)    $(736)
 Accounts payable and other liabilities             733        264     1,306
 Deferred taxes and income taxes payable         (1,958)       683       348
                                                  -----        ---       ---
   Total                                        $(2,275)      $669      $918
                                                  =====        ===       ===

Cash paid for interest                             $6,965     $6,333    $6,932  

FIO made investments in companies, net of cash acquired, of approximately 
$140 million, $180 million, and $540 million, in 2003, 2002, and 2001,          
respectively. The 2001 investments were primarily for a mortgage warehouse      
lending business.                                                               

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.  Significant Accounting Policies (continued)                            

Derivative Instruments                                                          
GM is party to a variety of foreign exchange rate, interest rate and      
commodity forward contracts, and options entered into in connection with the    
management of its exposure to fluctuations in foreign exchange rates, interest  
rates, and certain commodity prices. These financial exposures are managed in   
accordance with corporate policies and procedures.                              
   All derivatives are recorded at fair value on the consolidated balance sheet.
Effective changes in fair value of derivatives designated as cash flow hedges   
and hedges of a net investment in a foreign operation are recorded in net       
unrealized gain / (loss) on derivatives, a separate component of other income   
(loss). Amounts are reclassified from accumulated other comprehensive loss when 
the underlying hedged item affects earnings and all ineffective changes in fair 
value are recorded currently in earnings. Changes in fair value of derivatives  
designated as fair value hedges are recorded currently in earnings offset to the
extent the derivative was effective by changes in fair value of the hedged item.
Changes in fair value of derivatives not designated as hedging instruments are  
recorded currently in earnings.                                                 

New Accounting Standards                                                        

Beginning January 1, 2003, the Corporation began expensing the fair market
value of newly granted stock options and other stock based compensation awards  
to employees pursuant to SFAS No. 123, "Accounting for Stock-Based              
Compensation." The fair value of stock option grants are estimated on the date  
of grant using the Black-Scholes option-pricing model. The fair value of other  
stock compensation awards is determined by the market price of GM $1-2/3 common 
stock on the date of grant. The total expense for 2003 was $229 million ($142   
million net of tax), recorded in cost of sales and other expenses. For 2002 and 
prior years, as permitted by SFAS No. 123, GM applied the intrinsic value method
of recognition and measurement under Accounting Principles Board Opinion No. 25 
(APB No. 25), "Accounting for Stock Issued to Employees," to its stock options  
and other stock-based employee compensation awards. No compensation expense     
related to employee stock options is reflected in net income for these periods, 
as all options granted had an exercise price equal to the market value of the   
underlying common stock on the date of the grant.                               
 In accordance with the disclosure requirements of SFAS No. 148, "Accounting
for Stock-Based Compensation - Transition and Disclosure," since GM adopted the 
fair value based method of accounting for stock-based employee compensation     
pursuant to SFAS No. 123 effective January 1, 2003 for newly granted stock based
compensation awards only, the following table illustrates the effect on net     
income and earnings per share if compensation cost for all outstanding and      
unvested stock options and other stock-based employee compensation awards had   
been determined based on their fair values at the grant date (dollars in        
millions except per share amounts):                                             
                                         Year-Ended December 31,
                                         -----------------------
                                          2003      2002      2001
                                          ----      ----      ----
Net income from continuing operations, as                                       
reported                                    $2,862    $1,975    $1,222    

Add: stock-based compensation expense,                                          
included in reported net income, net of                                   
related tax effects                            142        44        18    
Deduct: total stock-based compensation                                          
expense determined under fair value based                                 
method for all awards, net of related tax                                 
effects                                       (195)     (187)     (156)   
                                         -----     -----     -----
Pro forma net income from continuing                                            
operations                                  $2,809    $1,832    $1,084    
                                         =====     =====     =====

Earnings from continuing operations                                         
attributable to                                                           
GM $1-2/3 par value common stock                                          
          - as reported                 $2,862    $1,975    $1,220
          - pro forma                   $2,809    $1,832    $1,082

Basic earnings per share from continuing                                    
operations attributable to                                                
GM $1-2/3 par value                                                       
          - as reported                  $5.10     $3.53     $2.21
          - pro forma                    $5.01     $3.27     $1.96

Diluted earnings per share from continuing                                  
operations attributable to                                                
GM $1-2/3 par value                                                       
          - as reported                  $5.03     $3.51     $2.20
          - pro forma                    $4.93     $3.26     $1.95

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NOTE 1.  Significant Accounting Policies (continued)                            

New Accounting Standards (continued)                                            

In December 2002, the Financial Accounting Standards Board (FASB) issued  
Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements for  
Guarantees, Including Indirect Guarantees of Indebtedness of Others" (FIN 45).  
FIN 45 requires that at the time a company issues a guarantee, the company must 
recognize an initial liability for the fair value of the obligations it assumes 
under that guarantee. This interpretation is applicable on a prospective basis  
to guarantees issued or modified after December 31, 2002. FIN 45 also contains  
disclosure provisions surrounding existing guarantees, which are effective for  
financial statements of interim or annual periods ending after December 15,     
2002. See Note 18.                                                              
In January 2003, the FASB issued Interpretation No. 46, "Consolidation of 
Variable Interest Entities" (FIN 46), which requires the consolidation of       
certain entities considered to be variable interest entities (VIEs). An entity  
is considered to be a VIE when it has equity investors who lack the             
characteristics of having a controlling financial interest, or its capital is   
insufficient to permit it to finance its activities without additional          
subordinated financial support. Consolidation of a VIE by an investor is        
required when it is determined that the investor will absorb a majority of the  
VIE's expected losses or residual returns if they occur. FIN 46 provides certain
exceptions to these rules, relating to qualifying special purpose entities      
(QSPEs) subject to the requirements of SFAS No. 140. Upon its original issuance,
FIN 46 required that VIEs created after January 31, 2003 would be consolidated  
immediately, while VIEs created prior to February 1, 2003 were to be            
consolidated as of July 1, 2003.                                                
In October 2003, the FASB deferred the effective date for consolidation of
VIEs created prior to February 1, 2003 to December 31, 2003 for calendar        
year-end companies, with earlier application encouraged. GM adopted FIN 46 as of
its original effective date of July 1, 2003 for entities created prior to       
February 1, 2003. The application of the consolidation provisions of FIN 46     
resulted in an increase in assets and debt of approximately $4.6 billion ($917  
million in Auto & Other, and $3.7 billion in FIO), and a cumulative effect of   
accounting change recorded in cost of sales of $27 million after-tax, related to
Auto & Other and no net income effect at FIO. Refer to Note 7 for further       
discussion of GM's involvement in variable interest entities.                   
In December 2003, the FASB published a revision to FIN 46 (FIN 46R) to    
clarify some of the provisions of the original interpretation and to exempt     
certain entities from its requirements. FIN 46R provides special effective date 
provisions to enterprises that fully or partially applied FIN 46 prior to the   
issuance of the revised interpretation. In particular, entities that have       
already adopted FIN 46 are not required to adopt FIN 46R until the quarterly    
reporting period ended March 31, 2004. The Corporation is currently reviewing   
the provisions of FIN 46R and will adopt FIN 46R for the quarterly reporting    
period ending March 31, 2004.                                                   
  In April 2003, the FASB issued SFAS No. 149, "Amendments of Statement 133 on
Derivative Instruments and Hedging Activities." SFAS No. 149 amends and         
clarifies accounting for derivative instruments, including certain derivative   
instruments embedded in other contracts, and hedging activities. The Statement  
is effective for contracts entered into or modified after June 30, 2003 and for 
hedging relationships designated after June 30, 2003. The adoption of this      
standard did not have a material effect on the Corporation's financial condition
or results of operations.                                                       
  In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity," which provides
standards for how an issuer classifies and measures certain financial           
instruments with characteristics of both liabilities and equity. The Statement  
is effective for financial instruments entered into or modified after May 31,   
2003 and for pre-existing instruments as of the beginning of the first interim  
period beginning after June 15, 2003. The adoption of this standard did not have
a material effect on the Corporation's financial condition or results of        
operations.                                                                     
In December 2003, the FASB issued SFAS No. 132 (revised 2003),"Employers' 
Disclosures about Pensions and Other Postretirement Benefits." The revisions to 
SFAS 132 are intended to improve financial statement disclosures for defined    
benefit plans and was initiated in 2003 in response to concerns raised by       
investors and other users of financial statements about the need for greater    
transparency of pension information. In particular the standard requires that   
companies provide more details about their plan assets, benefit obligations,    
cash flows, benefit costs and other relevant quantitative and qualitative       
information. The guidance is effective for fiscal years ending after December   
15, 2003. Refer to Note 17 for further discussion of GM's pension and other     
postretirement benefits obligations.                                            

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NOTE 1.  Significant Accounting Policies (concluded)                            

Labor Force                                                                     
GM, on a worldwide basis, has a concentration of its labor supply in      
employees working under union collective bargaining agreements, of which certain
contracts expired in 2003.                                                      
  The 2003 United Auto Workers (UAW) labor contract was ratified on October 6,
2003 covering a four-year term from 2003-2007. The contract included a $3,000   
lump sum payment per UAW employee paid in October 2003, and a 3% performance    
bonus per UAW employee to be paid in October 2004. GM will amortize these       
payments over the 12-month period following the respective payment dates. UAW   
employees will receive a gross wage increase of 2% in 2005 and 3% in 2006.      
Active UAW employees were also granted pension benefit increases. There were no 
pension benefit increases granted to current retirees and surviving spouses.    
However, the contract does provide for four lump sum payments and two vehicle   
discount vouchers for current retirees and surviving spouses. The retiree lump  
sum payments and vehicle discount vouchers resulted in a charge to GM's 2003    
fourth quarter cost of sales of approximately $1.2 billion ($725 million        
after-tax).                                                                     

NOTE 2.  Discontinued Operations                                                

 On December 22, 2003 GM completed a series of transactions that resulted in
the split-off of Hughes from GM and the simultaneous sale of GM's approximately 
19.8 percent economic interest in Hughes to the News Corporation, Ltd. (News    
Corporation).                                                                   
  In the transactions, GM split-off Hughes by distributing Hughes common stock
to the holders of GM Class H common stock in exchange for all outstanding shares
of GM Class H common stock. Simultaneously, GM sold its 19.8 percent economic   
interest in Hughes to News Corporation in exchange for cash and News Corporation
Preferred American Depositary Shares (Preferred ADSs). All shares of GM Class H 
common stock were then cancelled. News Corporation then acquired from the former
GM Class H common stockholders an additional 14.2 percent of the outstanding    
shares of Hughes common stock in exchange for News Corporation Preferred ADSs.  
 GM sold 80 percent of its 19.8 percent retained economic interest in Hughes
to News Corporation for a total of approximately $3.1 billion in cash. GM sold  
the remaining 20 percent of its retained economic interest in Hughes to News    
Corporation for approximately 28.6 million News Corporation Preferred ADSs,     
valued at $819 million at December 22, 2003. Including Hughes' transaction      
expenses of approximately $90 million, GM recorded a net gain of $1.2 billion   
from the sale of GM's approximately 19.8% economic interest in Hughes, reported 
as gain on sale of discontinued operations in GM's Consolidated Statement of    
Income for 2003. In addition, as a result of the transactions, there was a net  
reduction to GM's stockholders' equity of approximately $7.0 billion.           
All News Corporation Preferred ADSs were sold by GM in January 2004.      
  The financial data related to GM's investment in Hughes through December 22,
2003 is classified as discontinued operations for all periods presented. The    
financial data of Hughes reflect the historical results of operations and cash  
flows of the businesses that were considered part of the Hughes business        
segment of GM during each respective period, and the assets and liabilities of  
Hughes as of the respective dates.                                              
   Hughes' net sales included in discontinued operations were $9.8 billion, $9.5
billion and $8.3 billion for 2003, 2002 and 2001, respectively, and Hughes' net 
losses from discontinued operations were $219 million, $239 million and $621    
million for 2003, 2002 and 2001, respectively.                                  
The Hughes amounts reported as assets and liabilities of discontinued     
operations were as follows (in millions):                                       

          December 31,
          2002
          ----
Current assets                           $3,670                                 
Property and equipment - net              1,558                                 
Intangible assets -net                    7,158                                 
Other assets                              6,267                                 
        ------
Assets of discontinued operations       $18,653                                 
        ======

Current liabilities                      $3,177                                 
Long-term debt                            2,390                                 
Other liabilities                         2,389                                 
         -----
Liabilities of discontinued                                                     
operations                            $7,956                              
         =====

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NOTE 3.  Asset Impairments                                                      

GM recorded pre-tax charges against income for asset impairments of $835  
million ($533 million after-tax, or $0.94 per diluted share) in 2003, $254      
million ($158 million after-tax, or $0.28 per diluted share) in 2002 and $140   
million ($90 million after-tax, or $0.16 per diluted share) in 2001. These      
charges were recorded in cost of sales and other expenses in the income         
statement.                                                                      
In 2003, the pre-tax charges were comprised of $767 million ($491 million 
after-tax) related to special tools and other assets related to product lines   
and $68 million ($42 million after-tax) related to real estate.                 
  In 2002 the charges were related to production facilities and special tools.
The 2001 charges related to the write-down of equipment as a result of the
announcement of the closing of the Ste. Therese, Quebec, assembly plant in 2002 
and the write-down of certain equipment on operating leases that was determined 
to be impaired in GMNA.                                                         

NOTE 4.  Investment in Nonconsolidated Affiliates                               

Nonconsolidated affiliates are those investees of GM for which GM uses the
equity method of accounting, because GM has the ability to exert significant    
influence over the operating and financial decisions of the affiliate. GM's     
significant affiliates and GM's ownership percentage include the following:     
Italy - GM-Fiat Powertrain (50% in 2003, 2002, 2001); Japan - Fuji Heavy        
Industries Ltd. (20% in 2003, 21% in 2002, 2001), Suzuki Motor Corporation      
(20.1%, 20.2% and 20.3% in 2003, 2002, 2001, respectively); China - Shanghai    
General Motors Corporation (50% in 2003, 2002, 2001); Korea - GM Daewoo (44.6%  
in 2003 and 2002, 0% in 2001).                                                  
Further information regarding the book value of GM's investments and its  
share of income for all affiliates, as well as the total assets and liabilities 
of the above significant affiliates, is included in the table below:            

2003                                   Italy   Japan   China   Korea            
----                                                                            
                             ---------------------------------
Book value of GM's investments in                                               
affiliates                           $946   $2,781    $964    $200        
GM's share of affiliates' net income                                            
(loss)                                $95     $196    $437    $(74)       

Total assets of significant                                                     
affiliates (1)                     $7,939  $29,622  $2,723  $3,263        
Total liabilities of significant                                                
affiliates (1)                     $5,309  $17,764  $1,175  $2,892        

2002                                                                            
----                                                                            
Book value of GM's investments in                                               
affiliates                           $753   $2,322    $659    $252        
GM's share of affiliates' net income                                            
(loss)                                $80     $133    $142    $(45)       

Total assets of significant                                                     
affiliates (1)                     $6,589  $24,579  $1,698  $2,277        
Total liabilities of significant                                                
affiliates (1)                     $4,479  $14,966    $634  $1,771        

2001                                                                            
----                                                                            
Book value of GM's investment in                                                
affiliates                           $699   $2,214    $486      $0        
GM's share of affiliates' net income                                            
(loss)                                $32    $(102)    $38      $0        

Total assets of significant                                                     
affiliates (1)                     $5,361  $23,960  $1,374      $0        
Total liabilities of significant                                                
affiliates (1)                     $3,936  $14,911    $530      $0        

(1) As defined above.                                                           

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NOTE 5.  Postemployment Benefit Costs                                           

  GM records liabilities for termination and other post-employment benefits to
be paid pursuant to the union or other contractual agreements in connection with
closed plants in North America. GM reviews the adequacy and continuing need for 
these liabilities on an annual basis in conjunction with its year-end production
and labor forecasts. Furthermore, GM reviews the reasonableness of these        
liabilities on a quarterly basis.                                               
The liability for post-employment benefits as of December 31, 2003 totals 
approximately $384 million relating to 9 plants and approximately 2,900         
employees, with anticipated spending of approximately 96% over the next three   
years. The liability for post-employment benefits was $613 million relating to  
11 plants and approximately 3,400 employees as of December 31, 2002. The        
liability for post-employment benefits was $626 million relating to 12 plants   
and approximately 5,800 employees as of December 31, 2001. The following table  
summarizes the activity from December 31, 2001 through December 31, 2003 for    
this liability (dollars in millions):                                           

Balance at December 31, 2001                     $626                         
Spending                                       (182)                      
Interest accretion                               47                       
Additions                                       281                       
Adjustments                                    (159)                      
                         ---
Balance at December 31, 2002                     $613                         
Spending                                       (189)                      
Interest accretion                               31                       
Additions                                         -                       
Adjustments                                     (71)                      
                         ---
Balance at December 31, 2003                     $384                         
                         ===

In 2003, GM recognized adjustments of $71 million to reduce the liability 
balance of existing closed plants ($44 million after tax, or $0.08 per share of 
GM $1-2/3 par value common stock), recorded in cost of sales. The adjustments   
are primarily the result of the reversal of the remaining post-employment       
liabilities for employees at the Janesville, Wisconsin plant location, a        
reduction of the respective liabilities for employees at the Oklahoma City,     
Oklahoma plant, and an increase to the respective liabilities at the Wilmington,
Delaware plant. The Janesville charge was established in 2002, relating to 772  
employees impacted by the transfer of commercial truck production from          
Janesville, to Flint, Michigan. The reversal is primarily due to earlier than   
anticipated retirements of 479 employees. The adjustments also include a        
reduction in the reserve for the Oklahoma City plant, as employees have been    
absorbed into the continuing workforce due to increased manpower requirements.  
The Wilmington plant reserve is increased to account for increased duration that
employees will not be absorbed into the continuing workforce due to a change in 
the production plan.                                                            
In 2002, GM recognized post-employment benefit liabilities of $281 million
($174 million after tax, or $0.31 per share of GM $1-2/3 par value common stock)
primarily related to the transfer of commercial truck production from           
Janesville, to Flint. The Janesville charge related to 772 employees and was    
included in cost of sales. The adjustments of $159 million ($99 million after   
tax of $0.18 per share of GM $1-2/3 par value common stock), recorded in cost of
sales, are primarily the result of a reversal of post-employment benefit        
liabilities for employees at the Spring Hill, Tennessee, plant. This reversal   
was recorded due to approximately 400 employees, who had been included in the   
planned production capacity reduction but were instead absorbed into the        
continuing workforce due to a change in the plan.                               

NOTE 6.  Marketable Securities                                                  

   Marketable securities held by GM are classified as available-for-sale, except
for certain mortgage-related securities, which are classified as                
held-to-maturity or trading securities, and News Corporation ADSs, which are    
classified as trading securities. Unrealized gains and losses, net of related   
income taxes, for available-for-sale and held-to-maturity securities are        
included as a separate component of stockholders' equity. Unrealized gains and  
losses for trading securities are included in income on a current basis. GM     
determines cost on the specific identification basis.                           

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NOTE 6.  Marketable Securities (continued)                                      

Automotive and Other Operations                                                 
-------------------------------                                                 

 Investments in marketable securities were as follows (dollars in millions):

                                            Book/Fair  Unrealized Unrealized
                                  Cost      Value      Gains      Losses
                                  ----      -----      -----      ------
                                     December 31, 2003
                                  ------------------------------------------
Type of security                                                                
Corporate debt securities and other  $5,246     $5,246        $9         $9     
U.S. government and agencies          2,865      2,867         9          7     
Mortgage backed securities               90         90         -          -     
            -----      -----
Total debt securities available                                                 
for sale                           8,201      8,203         -          -  
News Corporation ADSs                   819        864         -          -     
                                 -----      -----        --         --
Total marketable securities          $9,020     $9,067       $18        $16     
                                 =====      =====        ==         ==

                                   December 31, 2002
                                   -------------------------------------------
Type of security                                                                
Corporate debt securities and other  $1,456     $1,469       $18         $5     
U.S. government and agencies            606        612         6          -     
Mortgage backed securities               93         93         -          -     
                                 -----      -----        --         --
Total marketable securities          $2,155     $2,174       $24         $5     
                                 =====      =====        ==          =

   Debt securities totaling $752 million mature within one year and $7.1 billion
mature after one through five years, $79 million mature after five through ten  
years and $247 million mature after ten years. Proceeds from sales of marketable
securities totaled $7.1 billion in 2003, $4.7 billion in 2002, and $373 million 
in 2001. The gross gains related to sales of marketable securities were $7      
million, $3 million, and $3 million in 2003, 2002, and 2001, respectively. The  
gross losses related to sales of marketable securities were $11 million in 2003,
$1 million in 2002 and $7 million in 2001.                                      

Financing and Insurance Operations                                              
----------------------------------                                              

 Investments in marketable securities were as follows (dollars in millions):

                                            Book/Fair  Unrealized Unrealized
                                  Cost      Value      Gains      Losses
                                  ----      -----      -----      ------
                                     December 31, 2003
                                  ------------------------------------------
Type of security                                                                
Bonds, notes, and other securities                                              
United States government and                                              
agencies                          $716       $722        $7         $1
States and municipalities            595        647        52          -  
Foreign government securities        543        550         8          1  
Mortgage and asset-backed                                                 
securities                       1,806      1,949       150          7
Corporate debt securities                                                 
and other                        3,078      3,200       129          7
                                 -----      -----       ---          -
Total debt securities                                                           
available-for-sale                 6,738      7,068       346         16  
Mortgage-backed securities                                                      
held-to-maturity                     240        240         -          -  
Mortgage-backed securities held for                                             
trading purposes                   4,483      4,142         -        341  
                                ------     ------       ---        ---
Total debt securities                11,461     11,450       346        357     
Equity securities                     1,185      1,698       522          9     
                                ------     ------       ---        ---
Total investment in marketable                                            
securities                     $12,646    $13,148      $868       $366
                                ======     ======       ===        ===

Total consolidated other                                                        
marketable securities            $21,666    $22,215      $886       $382  
                                ======     ======       ===        ===

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NOTE 6.  Marketable Securities (concluded)                                      

                                          Book/Fair  Unrealized Unrealized
                                  Cost      Value      Gains      Losses
                                  ----      -----      -----      ------
                                     December 31, 2002
                                  ------------------------------------------
Type of security                                                                
Bonds, notes, and other securities                                              
United States government and                                              
agencies                        $2,836     $2,875       $39         $-
States and municipalities            599        650        52          1  
Foreign government securities        479        497        19          1  
Mortgage and asset-backed                                                 
securities                       2,529      2,761       296         64
Corporate debt securities                                                 
and other                        1,836      1,933       106          9
                                 -----      -----       ---          -
Total debt securities                                                           
available-for-sale                 8,279      8,716       512         75  
Mortgage-backed securities                                                      
held-to-maturity                     305        305         -          -  
Mortgage-backed securities held for                                             
trading purposes                   5,176      4,378         -        798  
                                ------     ------       ---        ---
Total debt securities                13,760     13,399       512        873     
Equity securities                     1,224      1,252       163        135     
                                ------     ------       ---      -----
Total investment in marketable                                            
securities                     $14,984    $14,651      $675     $1,008
                                ======     ======       ===      =====

Total consolidated other                                                        
marketable securities            $17,139    $16,825      $699     $1,013  
                                ======     ======       ===      =====

Debt securities available-for-sale totaling $1.1 billion mature within one
year, $2.0 billion mature after one through five years, $1.6 billion mature     
after five years through 10 years, and $2.4 billion mature after 10 years.      
Proceeds from sales of marketable securities totaled $7.6 billion in 2003, $12.8
billion in 2002, and $5.1 billion in 2001. The gross gains related to sales of  
marketable securities were $270 million, $402 million, and $228 million in 2003,
2002, and 2001, respectively. The gross losses related to sales of marketable   
securities were $202 million, $121 million and $145 million in 2003, 2002, and  
2001, respectively.                                                             

NOTE 7.  Variable Interest Entities                                             

 As discussed in Note 1, GM applied the provisions of FIN 46 to all variable
interest entities beginning July 1, 2003. In connection with the application of 
FIN 46, GM is providing information below concerning variable interest entities 
that: (1) are consolidated by GM because GM is deemed to be the primary         
beneficiary and (2) those entities that GM does not consolidate because,        
although GM has significant interests in such variable interest entities, GM is 
not the primary beneficiary.                                                    

Automotive and Other Operations                                                 

  Synthetic Leases -- GM leases real estate and equipment from various special
purpose entities (SPEs) that have been established to facilitate the financing  
of those assets for GM by nationally prominent, creditworthy lessors. These     
assets consist principally of office buildings, warehouses, and machinery and   
equipment. The use of SPEs allows the parties providing the financing to isolate
particular assets in a single entity and thereby syndicate the financing to     
multiple third parties. This is a conventional financing technique used to lower
the cost of borrowing and, thus, the lease cost to a lessee such as GM. There is
a well-established market in which institutions participate in the financing of 
such property through their purchase of interests in these SPEs. Certain of     
these SPEs were determined to be VIEs under FIN 46. For those leases where GM   
provides a residual value guarantee of the leased property and is considered the
primary beneficiary under FIN 46, GM consolidated these entities as of July 1,  
2003. This resulted, for Auto & Other, in an initial increase in assets and debt
of $917 million and a cumulative effect of accounting change recorded in cost of
sales of $27 million after-tax. As of December 31, 2003, the carrying amount of 
assets and liabilities consolidated under FIN 46 amounted to $878 million and   
$945 million respectively. Assets consolidated are classified as "Property" in  
GM's consolidated financial statements. GM's maximum exposure to loss related to
consolidated VIEs amounts to $795 million. For other such lease arrangements    
involving VIEs, GM holds significant variable interests but is not considered   
the primary beneficiary under FIN 46. GM's maximum exposure to loss related to  
VIE's where GM has a significant variable interest, but does not consolidate the
entity, amounts to $557 million.                                                

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NOTE 7.  Variable Interest Entities (concluded)                                 

Financing and Insurance Operations                                              

  Mortgage warehouse funding -- GMAC's Mortgage operations sell commercial and
residential mortgage loans through various structured finance arrangements in   
order to provide funds for the origination and purchase of future loans. These  
structured finance arrangements include sales to off-balance sheet warehouse    
funding entities, including GMAC- and bank-sponsored commercial paper conduits. 
Transfers of assets from GMAC into each facility are accounted for as sales     
based on the provisions of SFAS 140 and as such creditors of these facilities   
have no recourse to the general credit of GMAC. Some of these warehouse funding 
entities represent variable interest entities under FIN 46. For certain mortgage
warehouse entities, management determined that GMAC does not have the majority  
of the expected losses or returns and, as such, consolidation is not appropriate
under FIN 46. The assets in these entities totaled $2.4 billion, of which $0.8  
billion represents GMAC's maximum exposure to loss. The maximum exposure would  
only occur in the unlikely event that there was a complete loss on the          
underlying assets of the entities. In other entities, GMAC was considered the   
primary beneficiary, and the activities of these entities were either terminated
prior to July 1, 2003 or GMAC consolidated these entities pursuant to FIN 46. As
of December 31, 2003 the consolidated entities had no assets remaining and had  
been terminated.                                                                
Interests in Real Estate Partnerships -- The Corporation's Mortgage       
operations syndicate investments in real estate partnerships to unaffiliated    
investors and, in certain partnerships, guarantee the timely payment of a       
specified return to those investors. Returns to investors in the partnerships   
syndicated by the Corporation are derived from tax credits and tax losses       
generated by underlying operating partnership entities that develop, own, and   
operate affordable housing properties throughout the United States. Syndicated  
tax credit partnerships that contain a guarantee are reflected in the           
Corporation's financial statements under the financing method. In addition, the 
Corporation has variable interests in the underlying operating partnerships     
(primarily in the form of limited partnership interests). The results of the    
Corporation's variable interest analysis indicated that GMAC is not the primary 
beneficiary of these partnerships and, as a result, is not required to          
consolidate these entities under FIN 46. Assets outstanding in these            
partnerships approximated $3 billion at December 31, 2003. GMAC's exposure to   
loss at such time was $675 million, representing the amount payable to investors
in the event of liquidation of the partnerships. The Corporation's exposure to  
loss increases as unaffiliated investors place additional guaranteed commitments
with the Corporation. Considering such committed amounts, the Corporation's     
exposure to loss in future periods is not expected to exceed $1.2 billion.      
   Collateralized debt obligations (CDOs) -- GMAC's Mortgage operations sponsor,
purchase subordinate and equity interests in, and serve as collateral manager   
for CDOs. Under CDO transactions, a trust is established that purchases a       
portfolio of securities and issues debt and equity certificates, representing   
interests in the portfolio of assets. In addition to receiving variable         
compensation for managing the portfolio, the Corporation sometimes retains      
equity investments in the CDOs. The majority of the CDOs sponsored by the       
Corporation were initially structured or have been restructured (with approval  
by the senior beneficial interest holders) as qualifying special purpose        
entities, and are therefore exempt from FIN 46. For the Corporation's remaining 
CDOs, the results of the primary beneficiary analysis support the conclusion    
that consolidation is not appropriate under FIN 46 because GMAC does not have   
the majority of the expected losses or returns. The assets in these CDOs totaled
$2.0 billion of which GMAC's maximum exposure to loss is $40 million,           
representing GMAC's retained interests in these entities. The maximum exposure  
to loss would only occur in the unlikely event that there was a complete loss on
the underlying assets of the entities.                                          
Automotive Finance Receivables -- In certain securitization transactions, 
GMAC securitizes consumer and commercial finance receivables into bank-sponsored
multi-seller commercial paper conduits. These conduits provide a funding source 
to GMAC (as well as other sellers into the conduit) as they fund the purchase of
the receivables through the issuance of commercial paper. Total assets          
outstanding in these bank-sponsored conduits approximated $13 billion as of     
December 31, 2003. While GMAC has a variable interest in these conduits, the    
Corporation is not deemed to be the primary beneficiary, as GMAC does not retain
the majority of the expected losses or returns. GMAC's maximum exposure to loss 
as a result of its involvement with these non-consolidated variable interest    
entities is $179 million and would only be realized in the event of a complete  
loss on the assets that GMAC sold.                                              

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

NOTE 8.  Finance Receivables and Securitizations                                

Finance Receivables - Net                                                       

Finance receivables - net included the following (dollars in millions):   
                                      December 31,
                                       -----------------------
Consumer:                                          2003        2002             
                                      ----        ----
Retail automotive                              $87,163     $78,857          
Residential mortgages                           46,307      15,238          
                                     -------      ------
Total consumer                                   133,470      94,095            
Commercial:                                                                     
Automotive:                                                                 
Wholesale                                      25,517      21,459         
Leasing and lease financing                     1,465       5,910         
Term loans to dealers and others                3,912       4,190         
Commercial and industrial                        9,783       9,464          
Commercial real estate:                                                     
Commercial mortgage                               180         621         
Construction                                    2,053       1,963         
                                     -------     -------
Total commercial                                  42,910      43,607            
                                     -------     -------
Total finance receivables and loans              176,380     137,702            
Allowance for financing losses                    (3,243)     (3,059)           
                                     -------     -------
Total consolidated finance receivables -                                        
net  (1)                                     $173,137    $134,643         
                                     =======     =======

(1) Net of unearned income of $7.2 billion and $6.5 billion at December 31, 2003
and 2002, respectively.                                                 

Finance receivables that originated outside the United States were $29.1  
billion and $23.1 billion at December 31, 2003 and 2002, respectively. The      
aggregate amounts of total finance receivables maturing in each of the five     
years following December 31, 2003, is as follows: 2004-$64.0 billion; 2005-$25.6
billion; 2006-$22.0 billion; 2007-$15.0 billion; 2008-$7.3 billion; and 2009 and
thereafter-$49.1 billion. Actual maturities may differ from those scheduled due 
to prepayments.                                                                 

Securitizations of Finance Receivables and Mortgage Loans                       

The Corporation securitizes automotive and mortgage financial assets as a 
funding source. GMAC sells retail finance receivables, wholesale loans,         
residential mortgage loans, commercial mortgage loans and commercial investment 
securities.                                                                     
   The Corporation retains servicing responsibilities and subordinated interests
for all of its securitizations of retail finance receivables and wholesale      
loans. Servicing responsibilities are retained for the majority of its          
residential and commercial mortgage loan securitizations and the Corporation may
retain subordinated interests in some of these securitizations. GMAC also holds 
subordinated interests and acts as collateral manager in the securitizations of 
its commercial investment securities. As of December 31, 2003, the weighted     
average servicing fees for GM's primary servicing activities were 200 basis     
points, 100 basis points, 27 basis points and 8 basis points of the outstanding 
principal balance for sold retail finance receivables, wholesale loans,         
residential mortgage loans and commercial mortgage loans, respectively.         
Additionally, the Corporation retains the rights to cash flows remaining after  
the investors in most securitization trusts have received their contractual     
payments.                                                                       
  The Corporation maintains cash reserve accounts at predetermined amounts for
certain securitization activities in the unlikely event that deficiencies occur 
in cash flows owed to the investors. The amounts available in such cash reserve 
accounts totaled $162 million, $1.2 billion, $6 million, $5 million, and $70    
million as of December 31, 2003 related to securitizations of retail finance    
receivables, wholesale loans, residential mortgage loans, commercial mortgage   
loans and commercial investment securities, respectively, and $280 million, $937
million, $21 million, $4 million and $20 million as of December 31, 2002,       
respectively.                                                                   

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

NOTE 8.  Finance Receivables and Securitizations (continued)                    

 The following table summarizes pre-tax gains on securitizations and certain
cash flows received from and paid to securitization trusts for sales of finance 
receivables and loans that were completed during 2003, 2002 and 2001:           

                2003
                    --------------------------------------------------
                  Retail                      Mortgage loans
Year ended December 31,     finance     Wholesale  ------------------------     
(in millions)            receivables     loans     Residential  Commercial      
-------------            -----------     -----     -----------  ----------      
Pre-tax gains on                                                                
securitizations              $37         $ -         $522         $75       
Cash flow information:                                                          
Proceeds from new                                                               
securitizations            1,604       3,625       29,566       3,342       
Servicing fees received        228         164          250          20         
Other cash flows received                                                       
on retained interests        753         174          955         317       
Purchases of delinquent                                                         
or foreclosed assets        (275)          -         (262)         (5)      
Pool buyback cash flows       (885)          -       (1,953)          -         
Servicing advances            (118)          -       (1,944)       (117)        
Repayments of servicing                                                         
advances                     114           -        2,017         116       
Proceeds from collections                                                       
reinvested in revolving                                                     
securitizations              862      97,829            -           5       

                2002
                    --------------------------------------------------
                  Retail                      Mortgage loans
Year ended December 31,     finance     Wholesale  ------------------------     
(in millions)            receivables     loans     Residential  Commercial      
-------------            -----------     -----     -----------  ----------      
Pre-tax gains on                                                                
securitizations             $239         $ -         $562         $30       
Cash flow information:                                                          
Proceeds from new                                                               
securitizations            9,982       2,327       28,241       1,848       
Servicing fees received        247         146          201          17         
Other cash flows received                                                       
on retained interests      1,361         318        1,044          86       
Purchases of delinquent                                                         
or foreclosed assets        (299)          -         (504)          -       
Pool buyback cash flows       (289)        (55)        (216)          -         
Servicing advances            (117)          -       (1,582)       (122)        
Repayments of servicing                                                         
advances                     117           -        1,447         116       
Proceeds from collections                                                       
reinvested in revolving                                                     
securitizations              482     104,485            -           -       

                2001
                    --------------------------------------------------
                  Retail                      Mortgage loans
Year ended December 31,     finance     Wholesale  ------------------------     
(in millions)            receivables     loans     Residential  Commercial      
-------------            -----------     -----     -----------  ----------      
Pre-tax gains on                                                                
securitizations             $210         $ -         $966         $24       
Cash flow information:                                                          
Proceeds from new                                                               
securitizations            7,331       7,055       35,137       2,934       
Servicing fees received        168         124          256          16         
Other cash flows received                                                       
on retained interests      1,282         417          844          60       
Purchases of delinquent                                                         
or forecloed assets         (240)          -          (34)          -       
Pool buyback cash flows       (270)          -         (390)          -         
Servicing advances             (88)          -       (1,861)        (95)        
Repayments of servicing                                                         
advances                      66           -        1,817          71       
Proceeds from collections                                                       
reinvested in revolving                                                     
securitizations                -      81,563          364           -       
--------------------------------------------------------------------------------

In addition to the information presented in the preceding table, pre-tax  
gains recognized on commercial investment securities were $14 million, $18      
million and $17 million for the years ended December 31, 2003, 2002 and 2001,   
respectively. Cash proceeds from new securitizations of commercial investment   
securities were $1.9 billion, $439 million and $643 million for the years ended 
December 31, 2003, 2002 and 2001, respectively. In addition, cash flows received
on retained interests of commercial investment securities aggregated $69        
million, $37 million and $16 million for the years ended December 31, 2003, 2002
and 2001, respectively.                                                         
Key economic assumptions used in measuring the estimated fair value of    
retained interests of sales completed during 2003 and 2002, as of the dates of  
such sales, were as follows:                                                    

                2003
                       -----------------------------------------------------
                          Retail          Mortgage loans          Commercial
Year ended December 31,     finance      -----------------------    investment  
                      receivables(a)  Residential(b) Commercial   securities
----------------------   -----------     -----------   -----------  ----------  
Key assumptions (c)                                                             
(rates per annum):                                                          
Annual prepayment rate (d)     0.9%       3.1-59.9%    0.0-50.0%      0.0%      
Weighted average life                                                           
(in years)                   1.6        1.7-5.9      1.4-6.2      2.5-25.1  
Expected credit losses         (e)        0.0-7.3%     0.0-0.8%     0.0-1.6%    
Discount rate                  9.5%       6.5-14.5%    2.6-10.8%    8.6-10.0%   

                2002
                       -----------------------------------------------------
                          Retail          Mortgage loans          Commercial
Year ended December 31,     finance      -----------------------    investment  
                      receivables(a)  Residential(b) Commercial   securities
----------------------   -----------     -----------   -----------  ----------  
Key assumptions (c)                                                             
(rates per annum):                                                          
Annual prepayment rate (d)  0.8-1.3%      6.6-54.7%    0.0-50.0%    0.0-90.0%   
Weighted average life                                                           
(in years)                1.5-2.6       1.3-4.5      1.0-7.8      3.0-36.0  
Expected credit losses         (e)        0.0-24.8%    0.0-1.5%     0.0-0.9%    
Discount rate              9.5-12.0%      6.5-13.5%    2.8-20.1%    3.6-12.7%   
------------------------------------------------------------------------------  

(a)The fair value of retained interests in wholesale securitizations            
approximates cost because of the short-term and floating rate nature of   
wholesale loans.                                                          
(b)Included within residential mortgage loans are home equity loans and lines,  
high loan-to-value loans and residential first and second mortgage loans. 
(c)The assumptions used to measure the expected yield on variable rate          
retained interests are based on a benchmark interest rate yield curve,    
plus a contractual spread, as appropriate.  The actual yield curve utlized
varies depending on the specific retained interests.                      
(d)Based on the weighted average maturity (WAM) for finance receivables and     
 constant prepayment rate (CPR) for mortgage loans and commercial investment
securities.                                                               
(e)A reserve totaling $83 million and $127 million at December 31, 2003 and     
2002, respectively, has been established for expected credit losses on    
finance receivables securitized in off-balance sheet transactions.        

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

NOTE 8.  Finance Receivables and Securitizations (continued)                    

  The table below outlines the key economic assumptions and the sensitivity of
the estimated fair value of retained interests at December 31, 2003 to immediate
10% and 20% adverse changes in those assumptions.                               

                       -----------------------------------------------------
                          Retail          Mortgage loans          Commercial
($ in millions)            finance      -----------------------    investment   
                      receivables(a)  Residential(b) Commercial   securities
------------------------------------------------------------------------------- 
Carrying value/fair                                                             
value of retained                                                           
interests                $1,045 (b)      $1,171        $620          $318   
Weighted average life                                                           
(in years)                0.1-1.0       1.1-5.9      0.1-18.4      0.5-25.1 
Annual prepayment rate  0.7-1.6% WAM  7.0-65.0%CPR 0.0-50.0% CPR  0.0-37.0% CPR 
Impact of 10% adverse                                                       
change                    $--          $(69)         $(2)          $(2) 
Impact of 20% adverse                                                       
change                    (1)          (132)          (3)           (3) 
------------------------------------------------------------------------------- 
Loss assumption               (b)       0.0-26.1%     0.0-6.6%     0.9-33.7%    
Impact of 10% adverse                                                       
change                   $(8)         $(123)        $(5)         $(10)  
Impact of 20% adverse                                                       
change                   (17)          (252)        (10)          (19)  
------------------------------------------------------------------------------- 
Discount rate              9.5-12.0%    6.5-14.5%     2.5-20.1%    3.6-13.2%    
Impact of 10% adverse                                                       
change                   $(5)         $(31)         $(8)         $(18)  
Impact of 20% adverse                                                       
change                   (10)          (61)         (16)          (34)  
------------------------------------------------------------------------------- 
Market rate (d)            2.1-3.2%        (c)           (c)          (c)       
Impact of 10% adverse                                                       
change                   $(6)         $(19)          $--          $--   
Impact of 20% adverse                                                       
change                   (11)          (39)           --           --   
------------------------------------------------------------------------------- 
(a)The fair value of retained interests in wholesale securitizations            
approximates cost because of the short-term and floating rate nature of   
wholesale receivables.                                                    
(b The fair value of retained interests in securitizations is net of a reserve  
for expected credit losses totaling $83 million at December 31, 2003.     
(c)Forward benchmark interest rate yield curve plus contractual spread.         
(d)Represents the rate of return paid to the investors.                         

  These sensitivities are hypothetical and should be used with caution. As the
figures indicate, changes in fair value based on a 10% variation in assumptions 
generally cannot be extrapolated because the relationship of the change in      
assumption to the change in fair value may not be linear. Also, in this table,  
the effect of a variation in a particular assumption on the fair value of the   
retained interest is calculated without changing any other assumption. In       
reality, changes in one factor may result in changes in another, which may      
magnify or counteract the sensitivities. Additionally, the Corporation hedges   
interest rate and prepayment risks associated with certain of the retained      
interests; the effects of such hedge strategies have not been considered herein.
Expected static pool net credit losses include actual incurred losses plus
projected net credit losses divided by the original balance of the outstandings 
comprising the securitization pool. The table below displays the expected static
pool net credit losses based on securitizations completed each year.            

Loans securitized in                              
(a)                             
------------------------------------------------  
December 31,              2003          2002           2001                     
---------------------------------------------------------------                 
Retail automotive         0.4%           0.6%           0.7%                    
Residential mortgage    0.0-26.0%      0.0-24.8%      0.0-22.9%                 
Commercial mortgage     0.0-6.6%       0.0-4.1%       0.0-2.3%                  
Commercial investment                                                           
securities           0.9-33.7%      0.3-36.8%      0.0-17.0%              
---------------------------------------------------------------                 

(a) Static pool losses not applicable to wholesale finance receivable           
securitizations because of their short-term nature.                       

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

NOTE 8.  Finance Receivables and Securitizations (concluded)                    

 The following table presents components of securitized financial assets and
other assets managed, along with quantitative information about delinquencies 
and net credit losses.                                                        

                                                                [Download Table]


                             Total finance      Amount 60 days                      
                            receivables and          or                             
                                 loans          more past due      Net credit losses
                           ---------------------------------------------------------
December 31, (in millions)    2003     2002      2003     2002      2003     2002   
------------------------------------------------------------------------------------
                                                                                    
Retail automotive           $99,196   $93,848     $749     $637    $1,179     $844  
Residential mortgage        104,378    93,955    4,974    3,973       682      644  
------------------------------------------------------------------------------------
  Total consumer            203,574   187,803    5,723    4,610     1,861    1,488  
------------------------------------------------------------------------------------
Wholesale                    46,644    38,722       46       88         5      (15) 
Commercial mortgage          22,621    19,513      652      350        66        8  
Other automotive and                                                                
   commercial                17,364    21,678      167      317       194      176  
------------------------------------------------------------------------------------
  Total commercial           86,629    79,913      865      755       265      169  
------------------------------------------------------------------------------------
Total managed portfolio (a) 290,203   267,716   $6,588   $5,365    $2,126   $1,657  
                                               =====================================
  Securitized finance                                                               
   receivables and loans    (94,622) (114,767)                                      
  Loans held for sale                                                               
   (unpaid principal)       (19,609)  (15,756)                                      
----------------------------------------------                                      
Total finance receivables                                                           
   and loans               $175,972  $137,193                                       
==============================================                                      

(a)Managed portfolio represents finance receivables and loans on the balance    
sheet or that have been securitized, excluding securitized finance        
receivables and loans that GMAC continues to service but has no other     
continuing involvement (i.e., in which GMAC retains an interest or risk of
loss in the underlying receivables).                                      

NOTE 9.  Inventories                                                            

Inventories included the following for Automotive and Other Operations    
(dollars in millions):                                                          
                                                    December 31,
                                                    --------------------
                                                      2003        2002
                                                      ----        ----
Productive material, work in process, and supplies       $4,899      $4,803     
Finished product, service parts, etc.                     7,642       6,741     
                                                    ------      ------
Total inventories at FIFO                              12,541      11,544   
Less LIFO allowance                                    1,581       1,807  
                                                    ------       -----
Total inventories (less allowances)                $10,960      $9,737
                                                    ======       =====

 Inventories are stated generally at cost, which is not in excess of market.
The cost of approximately 92% of U.S. inventories is determined by the last-in, 
first-out (LIFO) method. Generally, the cost of all other inventories is        
determined by either the first-in, first-out (FIFO) or average cost methods.    
During 2003, U.S. LIFO eligible inventory quantities were reduced. This   
reduction resulted in a liquidation of LIFO inventory quantities carried at     
lower costs prevailing in prior years as compared with the cost of 2003         
purchases, the effect of which decreased cost of goods sold by approximately    
$200 million, pre-tax.                                                          

NOTE 10.  Equipment on Operating Leases                                         

The Corporation has significant investments in the residual values of its 
leasing portfolios. The residual values represent the estimate of the values of 
the assets at the end of the lease contracts and are initially recorded based on
appraisals and estimates. Realization of the residual values is dependent on the
Corporation's future ability to market the vehicles under then prevailing market
conditions. Management reviews residual values periodically to determine that   
recorded amounts are appropriate.                                               

Automotive and Other Operations                                                 
-------------------------------                                                 

Equipment on operating leases and accumulated depreciation was as follows 
(dollars in millions):                                                          

                            December 31,
                             ---------------------
                              2003      2002
                              ----      ----
Equipment on operating leases               $7,994    $5,729                
Less accumulated depreciation                 (821)     (424)               
                            ------    ------
Net book value                             $7,173    $5,305               
                             =====     =====

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

NOTE 10.  Equipment on Operating Leases (concluded)                             

Financing and Insurance Operations                                              
----------------------------------                                              

Equipment on operating leases and accumulated depreciation was as follows 
(dollars in millions):                                                          

                            December 31,
                             ---------------------
                             2003       2002
                             ----       ----
Equipment on operating leases              $35,800    $33,422               
Less accumulated depreciation               (8,590)    (7,701)              
                             ------     ------
Net book value                            $27,210    $25,721              
                             ======     ======

Total consolidated net book value          $34,383    $31,026               
                             ======     ======

The lease payments to be received related to equipment on operating leases
maturing in each of the five years following December 31, 2003, are as follows: 
Auto & Other - none, as the payment is received upfront and the income is       
deferred over the lease period; FIO - 2004 $6.4 billion; 2005-$4.3 billion; 2006
- $2.4 billion; 2007 - $711 million; and 2007-$54 million. There are no leases  
maturing after 2008.                                                            

NOTE 11.  Income Taxes                                                          

  Income from continuing operations before income taxes and minority interests
included the following (dollars in millions):                                   

                                        Years Ended December 31,
                                         -----------------------------
                                        2003      2002      2001
                                        ----      ----      ----
U.S. income (loss)                             $1,786     $126     $(329)       
Foreign income                                  1,195    2,212     2,783        
                                        -----    -----     -----
Total                                        $2,981   $2,338    $2,454      
                                        =====    =====     =====

The provision for income taxes was estimated as follows (dollars in       
millions):                                                                      

                                        Years Ended December 31,
                                        ----------------------------
                                        2003      2002      2001
                                        ----      ----      ----
Income taxes estimated to be payable                                            
currently                                                                 
U.S. federal                                   $123      $48       $34      
Foreign                                       1,701    1,394     1,292      
U.S. state and local                            414      325        45      
                                        -----    -----     -----
Total payable currently                      2,238    1,767     1,371     
                                        -----    -----     -----
Deferred income tax expense (credit) - net                                      
U.S. federal                                    239       81        86      
Foreign                                      (1,712)    (958)     (400)     
U.S. state and local                            (34)    (246)        37     
                                         -----    -----     ------
Total deferred                              (1,507)  (1,123)     (277)    
                                        -----    -----     -----

Total income taxes                         $731     $644    $1,094  
                                          ===      ===     =====

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

NOTE 11.  Income Taxes (continued)                                              

Annual tax provisions include amounts considered sufficient to pay        
assessments that may result from examination of prior year tax returns. Cash    
paid for income taxes in 2003, 2002, and 2001 was $1.7 billion, $2.2 billion,   
and $2.1 billion, respectively.                                                 
Provisions are made for estimated U.S. and foreign income taxes, less     
available tax credits and deductions, which may be incurred on the remittance of
the Corporation's share of subsidiaries' undistributed earnings not deemed to be
permanently reinvested. Taxes have not been provided on foreign subsidiaries'   
earnings, which are deemed permanently reinvested, of $11.6 billion at December 
31, 2003, and $11.8 billion at December 31, 2002. Quantification of the deferred
tax liability, if any, associated with permanently reinvested earnings is not   
practicable.                                                                    
  A reconciliation of the provision for income taxes compared with the amounts
at the U.S. federal statutory rate was as follows (dollars in millions):        

                                      Years Ended December 31,
                                        ----------------------------
                                         2003      2002     2001
                                         ----      ----     ----
Tax at U.S. federal statutory income tax rate  $1,043      $818     $859        
State and local tax expense                       261        91       56        
Foreign rates other than 35%                      (31)       16      131        
Taxes on unremitted earnings of subsidiaries        6       (13)      29        
Tax credits                                       (52)      (82)     (57)       
Raytheon settlement (1)                             -         -      180        
Settlement of prior year tax matters             (194)       18        -        
ESOP dividend deduction (2)                       (53)      (85)       -        
Stock contribution to pension plans (3)           (87)        -        -        
Other adjustments                                (162)     (119)    (104)       
                                          ---       ---    -----

Total income tax                              $731      $644   $1,094     
                                          ===       ===    =====

(1) Non-tax deductible settlement with the Raytheon Company on a purchase       
price adjustment related to Raytheon's 1997 merger with Hughes Defense. 
(2) Deduction for dividends paid on GM $1-2/3 par value common stock held       
under the employee stock ownership portion of the GM Savings Plans,     
  pursuant to the Economic Growth and Tax Relief Reconciliation Act of 2001.
(3) Additional tax benefit related to the GM Class H Common Stock contribution  
to the pension and VEBA plans.                                          

Deferred income tax assets and liabilities for 2003 and 2002 reflect the  
effect of temporary differences between amounts of assets, liabilities, and     
equity for financial reporting purposes and the bases of such assets,           
liabilities, and equity as measured by tax laws, as well as tax loss and tax    
credit carryforwards.                                                           
   Temporary differences and carryforwards that gave rise to deferred tax assets
and liabilities included the following (dollars in millions):                   

                                December 31,
                                --------------------------------------
                                  2003                2002
                                  Deferred Tax        Deferred Tax
                                  ------------        ------------
                                    Assets   Liabilities  Assets   Liabilities
                                    ------   -----------  ------   -----------
Postretirement benefits other                                                   
than pensions                    $15,280       $ -     $14,945       $ -  
Pension and other employee                                                      
benefit plans                      4,060    12,521       8,009       461  
Warranties, dealer and customer                                                 
allowances, claims,                                                       
and discounts                      6,541       108       6,047         -  
Depreciation and amortization         3,901     2,832       2,386     2,967     
Tax carryforwards                     3,313         -       3,707         -     
Lease transactions                       10     4,297           -     4,732     
Miscellaneous foreign                 6,363     2,602       5,165     2,007     
Other                                 7,136     2,885       8,277     3,942     
                                ------    ------      ------    ------
Subtotal                           46,604    25,245      48,536    14,109   
Valuation allowances                 (1,677)        -      (1,183)        -     
                                ------    ------      ------    ------
Total deferred taxes              $44,927   $25,245     $47,353   $14,109   
                                ------    ------      ------    ------

Net deferred tax assets           $19,682               $33,244             
                      ======                ======

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

NOTE 11.  Income Taxes (concluded)                                              

 Deferred tax detail above is included in the consolidated balance sheet and
supplemental information as follows:                                            

                                    2003        2002
                                    ----        ----

Current deferred tax assets                   $9,104      $8,336          
Current deferred tax liabilities              (5,671)     (5,348)         
Non-current deferred tax assets               18,086      31,431          
Non-current deferred tax liabilities          (1,837)     (1,175)         
                                    ------      ------
Total                                      $19,682     $33,244        
                                    ======      ======

Of the tax carryforwards, approximately 17.2% relates to the alternative  
minimum tax credit (which can be carried forward indefinitely) and approximately
17.7% relates to the U.S. state net operating loss carryforwards, which will    
expire in the years 2004-2022 if not used. However, a substantial portion of the
U.S. state net operating loss carryforwards will not expire until after the year
2006. The other tax credit carryforwards, consisting primarily of research and  
experimentation credits, will expire in the years 2019-2022 if not used. The    
valuation allowance principally relates to U.S. state and certain foreign       
operating loss carryforwards.                                                   

NOTE 12.  Property - Net                                                        

Property - net was as follows (dollars in millions):                      

                                    Estimated       December 31,
                                     Useful       --------------
                                  Lives (Years)    2003       2002
                                 --------------   --------------
Automotive and Other Operations                                                 
-------------------------------                                                 
Land                                          -        $1,004      $913     
Buildings and land improvements             2-40       15,272    13,912     
Machinery and equipment                     3-30       44,851    41,500     
Construction in progress                      -         2,722     2,757     
                                                  ------    ------
Real estate, plants, and equipment                    63,849    59,082    
Less accumulated depreciation                        (37,535)  (34,182)   
                                                  ------    ------
Real estate, plants, and equipment - net            26,314    24,900  
Special tools - net                                  9,757     9,235  
                                                  ------    ------
Total property - net                              $36,071   $34,135 
                                                  ------    ------

Financing and Insurance Operations                                              
----------------------------------                                              
Equipment and other                         2-10       $3,160    $2,329     
Less accumulated depreciation                         (1,020)     (508)   
                                                   -----    ------
Total property - net                               $2,140    $1,821 
                                                   -----     -----

Total consolidated property - net                       $38,211   $35,956       
                                                  ======    ======

 Depreciation and amortization expense was as follows (dollars in millions):

                                              Years Ended December 31,
                                               ---------------------------
Automotive and Other Operations                     2003      2002     2001     
-------------------------------                     ----      ----     ----     
Depreciation                                   $4,526    $3,675   $3,533  
Amortization of special tools                   3,391     2,648    2,360  
Amortization of intangible assets                  29         1       14  
                                              -----     -----    -----
Total                                        $7,946    $6,324   $5,907
                                              =====     =====    =====

Financing and Insurance Operations                                              
----------------------------------                                              
Depreciation                                   $6,021    $5,522   $5,684  
Amortization of intangible assets                  11        19      173  
                                              -----     -----    -----
Total                                        $6,032    $5,541   $5,857
                                              =====     =====    =====

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

NOTE 13. Goodwill and Intangible Assets                                         

   The components of the Corporation's intangible assets as of December 31, 2003
and 2002 were as follows (dollars in millions):                                 

                                           Gross     Accumulated     Net
December 31, 2003                             Carrying   Amortization Carrying  
                                            Amount                  Amount
                                           -----------------------------------
Automotive and Other Operations                                                 
-------------------------------                                                 
Amortizing intangible assets:                                                   
Patents and intellectual property rights      $303         $31        $272
Non-amortizing intangible assets:                                               
Goodwill                                                               567
Prepaid pension asset (Note 17)                                        640
                                                                     -----
   Total goodwill and intangible assets                             $1,479
                                                                     -----

Financing and Insurance Operations                                              
----------------------------------                                              
Amortizing intangible assets:                                                   
Customer lists and contracts                   $65         $31         $34
Trademarks and other                            40          16          24
Covenants not to compete                        18          18           -
                                               ---          --          --
   Total                                      $123         $65         $58
                                   ===          ==
Non-amortizing intangible assets:                                               
Goodwill                                                             3,223
                                                                     -----
   Total goodwill and intangible assets                              3,281
                                                                     -----
Total consolidated goodwill and intangible assets                      $4,760   
                                                                     =====

December 31, 2002                                                               
Automotive and Other Operations                                                 
-------------------------------                                                 
Amortizing intangible assets:                                                   
Patents and intellectual property rights      $305         $28        $277
Non-amortizing intangible assets:                                               
Goodwill                                                               477
Prepaid pension asset (Note 17)                                      6,699
                                                                     -----
   Total goodwill and intangible assets                             $7,453
                                                                     -----

Financing and Insurance Operations                                              
----------------------------------                                              
Amortizing intangible assets:                                                   
Customer lists and contracts                   $67         $24         $43
Trademarks and other                            39          12          27
Covenants not to compete                        18          18           -
                                               ---          --          --
   Total                                      $124         $54         $70
                                   ===          ==
Non-amortizing intangible assets:                                               
Goodwill                                                             3,273
                                                                     -----
   Total goodwill and intangible assets                              3,343
                                                                     -----
Total consolidated goodwill and intangible assets                     $10,796   
                                                                    ======

   Aggregate amortization expense on existing acquired intangible assets was $37
million for the year ended December 31, 2003. Estimated amortization expense in 
each of the next five years is as follows: 2004 - $38 million; 2005 - $38       
million; 2006 - $37 million; 2007 - $37 million; and 2008 - $34 million.        

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

NOTE 13. Goodwill and Intangible Assets (concluded)                             

 The changes in the carrying amounts of goodwill for the year ended December
31, 2003, were as follows (dollars in millions):                                

                                   Total
                                  Auto &
                                     GMNA     GME     Other    GMAC   Total GM
                                     ----     ---     -----    ----   --------
Balance as of December 31, 2001        $29     $283     $312  $3,144   $3,456   
Goodwill acquired during the period    118        -      118      96      214   
Goodwill written off related to                                                 
 sale of business units               (8)       -       (8)    (9)      (17)
Effect of foreign currency               -       55       55      42       97   
                                    ---      ---      ---   -----    -----
translation                                                                     
Balance as of December 31, 2002        139      338      477   3,273    3,750   
Goodwill acquired during the period      -        -        -      18       18   
Goodwill written off related to                                                 
 sale of business units               (4)       -       (4)     -        (4)
Effect of foreign currency                                                      
translation                           6       75       81      51      132
Impairment/Other                        13        -       13    (119)(1) (106)  
                                    ---      ---      ---   -----    -----
Balance as of December 31, 2003       $154     $413     $567  $3,223   $3,790   
                                    ===      ===      ===   =====    =====

(1)In September 2003, GMAC received $110 million related to a settlement of a   
   claim involving the 1999 acquisition of the asset-based lending and factoring
  business of The Bank of New York. Of the settlement amount, $109 million was
considered a purchase price adjustment, reducing the related goodwill; the
remainder represented a reimbursement of tax claims paid on behalf of The 
Bank of New York.                                                         

NOTE 14.  Other Assets                                                          

Automotive and Other Operations                                                 

Other assets included the following (dollars in millions):                
                                                  December 31,
                                                   -----------------------
                                                 2003           2002
                                                 ----           ----

Investments in equity securities                        $470          $334      
U.S. prepaid pension benefit cost (Note 17)           39,904             -      
Other                                                  1,888         1,127      
                                               -------         -----
Total other assets                                 $42,262        $1,461    
                                                ======         =====

 Investments in equity securities at December 31, 2003 and 2002 includes the
fair value of investments in equity securities classified as available-for-sale 
for all periods presented. It is GM's intent to hold these securities for longer
than one year. Balances include historical costs of $114 million and $60 million
with unrealized gains of $142 million and $75 million and unrealized losses of  
$6 million and $21 million at December 31, 2003 and 2002, respectively.         
 Also included in investments in equity securities is GM's investment in the
common stock of Fiat Auto Holdings B.V. (FAH), the entity that is the sole      
shareholder of Fiat Auto S.p.A. (Fiat Auto), acquired for $2.4 billion in 2000. 
Subsequent to that acquisition, unfavorable European market conditions and other
factors led to deterioration in the performance of Fiat Auto. Accordingly, GM   
commenced a review of the appropriate carrying value of GM's investment in FAH, 
completed in the third quarter of 2002, which resulted in a non-cash charge of  
$2.2 billion ($1.4 billion after-tax), recorded in cost of sales and other      
expenses in the Other segment of Auto & Other. This write-down brought the      
carrying value of GM's investment in FAH from $2.4 billion to $220 million. The 
carrying value is based on GM's interest in the estimated market value of FAH   
equity, which comprises FAH's ownership of Fiat Auto, including 50% ownership   
interests in the purchasing and powertrain joint ventures between GM and Fiat   
Auto. GM's investment in FAH was reduced from 20% to 10% when Fiat recapitalized
FAH in 2003.                                                                    

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NOTE 14.  Other Assets (concluded)                                              

Financing and Insurance Operations                                              

Other assets included the following (dollars in millions):                
                                                          December 31,
                                                          --------------------
                                                           2003       2002
                                                           ----       ----
Mortgage servicing rights                                   $3,720     $2,683   
Premiums and other insurance receivables                     1,960      1,742   
Deferred policy acquisition costs                            1,038        584   
Derivative assets                                           10,026      7,185   
Repossessed and foreclosed assets, net                         786        418   
Equity investments                                           1,560        587   
Intangible assets (Note 13)                                  3,281      3,343   
Property (Note 12)                                           2,140      1,821   
Cash deposits held for securitization trusts                 1,922      1,481   
Restricted cash collections for securitization trusts        2,291      1,244   
Accrued interest and rent receivable                           767        673   
Real estate investments                                        788        819   
Debt issuance costs                                            716        508   
Servicer advances                                              946        838   
Other                                                        3,547      4,260   
                                                         ------     ------
Total other assets                                       $35,488    $28,186 
                                                         ======     ======

Reclassification for Consolidated Balance Sheet Presentation                    
                                                          December 31,
                                                          --------------------
                                                           2003       2002
                                                           ----       ----
AO -  other assets, as detailed above                      $42,262     $1,461   
FIO  - other assets, as detailed    above                   35,488     28,186   
                                                         ------     ------
Subtotal                                                  77,750     29,647 
                                                         ------     ------
Prepaid assets and other                                     1,747      1,295   
Accounts and notes receivable                              (15,152)   (11,602)  
Intangible assets (Note 13)                                 (3,281)    (3,343)  
Property (Note 12)                                          (2,140)    (1,821)  
                                                         ------     ------
Total consolidated other assets                          $58,924    $14,176 
                                                         ======     ======

NOTE 15.  Accrued Expenses, Other Liabilities, and Deferred Income Taxes        

Automotive and Other Operations                                                 
-------------------------------                                                 
 Accrued expenses, other liabilities, and deferred income taxes included the
following (dollars in millions):                                                
                                                          December 31,
                                                          --------------------
                                                           2003       2002
                                                           ----       ----
Dealer and customer allowances, claims, and discounts      $11,145    $10,388   
Deferred revenue, principally sales of vehicles to rental                       
companies                                                13,157     10,311
Policy, product warranty, and recall campaigns               8,674      8,850   
Payrolls and employee benefits (excludes postemployment)     5,081      4,283   
Unpaid losses under self-insurance programs                  2,027      1,990   
Taxes                                                        3,437      1,670   
Interest                                                       932        669   
Postemployment benefits (including extended disability                          
benefits)                                                 1,212      1,251
Other                                                        8,492      7,576   
                                                         ------     ------
Total accrued expenses and other liabilities             $54,157    $46,988 

Pensions                                                        72         46   
Postretirement benefits                                      3,210      3,142   
Deferred income taxes                                        3,545      2,671   
                                                         ------     ------

Total accrued expenses, other liabilities, and deferred                     
 income taxes                                           $60,984    $52,847
                                                         ======     ======

Current                                                  $45,417     $39,113
Non-current                                               15,567      13,734
                                                          ------      ------
Total accrued expenses, other liabilities, and deferred                     
   income taxes                                          $60,984     $52,847
                                                          ======      ======

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NOTE 15.  Accrued Expenses, Other Liabilities, and Deferred Income Taxes        
(continued)                                                 

Automotive and Other Operations (concluded)                                     
-------------------------------------------                                     
                                                          December 31,
                                                           -----------------
                                                           2003       2002
                                                           ----       ----
Policy, product warranty and recall campaigns liability                         
Beginning balance                                           $8,850     $8,171   
Payments                                                    (4,435)    (4,182)  
Increase in liability (warranties issued during period)      4,390      4,418   
Adjustments to liability (pre-existing warranties)            (367)       323   
Effect of foreign currency translation                         236        120   
                                                          -----      -----
Ending balance                                              $8,674     $8,850   
                                                          =====      =====

Financing and Insurance Operations                                              
----------------------------------                                              

 Other liabilities and deferred income taxes included the following (dollars
in millions):                                                                   

                                                          December 31,
                                                          --------------------
                                                           2003       2002
                                                           ----       ----
Unpaid insurance losses, loss adjustment expenses, and                          
unearned insurance premiums                              $6,568     $5,637

Income taxes                                                   139      1,659   
Interest                                                     3,135      2,741   
Deposits                                                     5,074      3,732   
Interest rate derivatives                                    1,121        843   
Other                                                        3,736      3,744   
                                                         ------     ------
Total other liabilities                                  $19,773    $18,356 

Postretirement benefits                                        797        766   
Deferred income taxes                                        3,963      3,852   
                                                         ------     ------

Total other liabilities and deferred income taxes        $24,533    $22,974 
                                                         ======     ======

Total consolidated accrued expenses and other                               
 liabilities                                            $73,930    $65,344
                                                         ======     ======
Total consolidated deferred income tax liability                            
 (Note 11)                                               $7,508     $6,523
                                                          =====      =====

NOTE 16.  Long-Term Debt and Loans Payable                                      

Automotive and Other Operations                                                 
-------------------------------                                                 

Long-term debt and loans payable were as follows (dollars in millions):     

                      Weighted-Average
                                       Interest Rate      December 31,
                                       -------------      ------------
                                        2003      2002     2003     2002
                                        ----      ----     ----     ----
Long-term debt and loans payable                                                
Payable within one year                                                     
Current portion of long-term debt (1)      1.4%     3.8%   $1,090     $424
All other                                  3.3%     2.9%    1,723    1,570
                                                            -----    -----
  Total loans payable                                       2,813    1,994
Payable beyond one year (1)                 6.8%     6.0%   29,632   14,234 
Unamortized discount                                          (108)     (21)
Mark to market adjustment (2)                                   69       48 
                                                          ------   -----
   Total long-term debt and loans payable                 $32,406  $16,255

(1) The weighted-average interest rates include the impact of interest rate swap
agreements.                                                             
(2) Effective January 1, 2001, the Corporation began recording its hedged debt  
   at fair market value on the balance sheet due to the implementation of SFAS
No. 133, "Accounting for Derivative Instruments and Hedging Activities".

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NOTE 16.  Long-Term Debt and Loans Payable (continued)                          

Long-term debt payable beyond one year at December 31, 2003 included      
maturities as follows: 2005 - $575 million; 2006 - $541 million; 2007 - $198    
million; 2008 - $1.6 billion; 2009 and after - $26.8 billion.                   
  To protect against foreign exchange risk, GM has entered into cross currency
swap agreements. The notional amounts of such agreements as of December 31, 2003
for Auto & Other were approximately $2.4 billion. The notional amounts of such  
agreements as of December 31, 2002 for Auto & Other were approximately $238     
million.                                                                        
Amounts payable beyond one year after cross currency swaps at December 31,
2003 included $2.3 billion in currencies other than the U.S. dollar, primarily  
the euro ($1.9 billion), the Brazilian real ($197 million) and the Australian   
dollar ($186 million)                                                           
At December 31, 2003 and 2002, long-term debt and loans payable for Auto &
Other included $27.4 billion and $14.8 billion, respectively, of obligations    
with fixed interest rates and $5.0 billion and $1.5 billion, respectively, of   
obligations with variable interest rates (predominantly LIBOR), after interest  
rate swap agreements.                                                           
 To achieve its desired balance between fixed and variable rate debt, GM has
entered into interest rate swap and swaption agreements. The notional amount of 
pay variable swap agreements as of December 31, 2003 for Auto & Other was       
approximately $ 3.5 billion. There were no such swaption agreements as of       
December 31, 2003. The notional amount of such agreements as of December 31,    
2002 for Auto & Other was approximately $745 million ($645 million pay variable 
swap agreements and $100 million relating to pay variable swaption agreements). 
   GM's Auto & Other business maintains substantial lines of credit with various
banks that totaled $8.6 billion at December 31, 2003, of which $2.6 billion     
represented short-term credit facilities and $6.0 billion represented long-term 
credit facilities. At December 31, 2002, bank lines of credit totaled $8.5      
billion, of which $2.6 billion represented short-term credit facilities and $5.9
billion represented long-term credit facilities. The unused short-term and      
long-term portions of the credit lines totaled $2.1 billion and $5.9 billion at 
December 31, 2003, compared with $1.8 billion and $5.8 billion at December 31,  
2002. Certain bank lines of credit contain covenants with which the Corporation 
and applicable subsidiaries were in compliance throughout the year ended        
December 31, 2003.                                                              

Financing and Insurance Operations                                              
----------------------------------                                              

Debt was as follows (dollars in millions):                                  

                      Weighted-Average
                                        Interest Rate       December 31,
                                        -------------       ------------
                                         2003      2002     2003      2002
                                         ----      ----     ----      ----
Debt                                                                            
Payable within one year                                                     
 Current portion of long-term debt (1)     3.1%      3.5%  $34,284   $27,344
 Commercial paper (1)                      2.1%      2.5%   13,182    13,425
 All other                                 2.6%      3.0%   30,344    22,063
                                                            ------    ------
   Total loans payable                                      77,810    62,832
Payable beyond one year (1)                5.0%      5.1%  160,108   118,678
 Unamortized discount                                          (679)     (717)
Mark to market adjustment (2)                                2,111     3,120
                                                           -------   -------
    Total debt                                            $239,350  $183,913
                                                           -------   -------

Total consolidated notes and loans payable                  $271,756  $200,168  
                                                           =======   =======
---------------------                                                           
(1) The weighted-average interest rates include the impact of interest rate     
swap agreements.                                                        
(2) Effective January 1, 2001, the Corporation began recording its hedged debt  
at fair market value on the balance sheet due to the implementation of  
SFAS No. 133, "Accounting for Derivative Instruments and Hedging        
Activities."                                                            

Debt payable beyond one year at December 31, 2003 included maturities as  
follows: 2005 - $33.6 billion; 2006 - $30.9 billion; 2007 - $11.9 billion; 2008 
- $8.1 billion; 2009 and after - $75.6 billion. Amounts payable beyond one year 
after consideration of foreign currency swaps at December 31, 2003 included     
$19.6 billion in currencies other than the U.S. dollar, primarily the Canadian  
dollar ($8.7 billion), the euro ($3.9 billion), the U.K. pound sterling ($3.8   
billion), and the Australian dollar ($1.3 billion).                             

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NOTE 16.  Long-Term Debt and Loans Payable (concluded)                          

  At December 31, 2003 and 2002, debt for FIO included $96.9 billion and $71.5
billion, respectively, of obligations with fixed interest rates and $142.5      
billion and $112.4 billion, respectively, of obligations with variable interest 
rates (predominantly LIBOR), after considering the impact of interest rate swap 
agreements.                                                                     
 To achieve its desired balance between fixed and variable rate debt, GM has
entered into interest rate swap, cap, and floor agreements. The notional amounts
of such agreements as of December 31, 2003 for FIO were approximately $94.4     
billion relating to swap agreements ($70.9 billion pay variable and $23.5       
billion pay fixed). The notional amounts of such agreements as of December 31,  
2002 for FIO were approximately $56.4 billion relating to swap agreements ($53.7
billion pay variable and $2.7 billion pay fixed).                               
GM's FIO business maintains substantial lines of credit with various banks
that totaled $54.4 billion at December 31, 2003, of which $18.5 billion         
represented short-term credit facilities and $35.9 billion represented long-term
credit facilities. At December 31, 2002, bank lines of credit totaled $53.0     
billion, of which $17.8 billion represented short-term credit facilities and    
$35.2 billion represented long-term credit facilities. The unused short-term and
long-term portions of the credit lines totaled $6 billion and $35.2 billion at  
December 31, 2003 compared with $7.4 billion and $34.7 billion at December 31,  
2002. Certain bank lines of credit contain covenants with which the Corporation 
and applicable subsidiaries were in compliance throughout the year ended        
December 31, 2003.                                                              

NOTE 17.  Pensions and Other Postretirement Benefits                            

  GM sponsors a number of defined benefit pension plans covering substantially
all U.S. and Canadian employees. Plans covering U.S. and Canadian represented   
employees generally provide benefits of negotiated, stated amounts for each year
of service as well as significant supplemental benefits for employees who retire
with 30 years of service before normal retirement age. The benefits provided by 
the plans covering U.S. and Canadian salaried employees and employees in certain
foreign locations are generally based on years of service and compensation      
history. GM also has certain nonqualified pension plans covering executives that
are based on targeted wage replacement percentages and are unfunded.            
GM's funding policy with respect to its qualified pension plans is to     
contribute annually not less than the minimum required by applicable law and    
regulations. GM made pension contributions to the U.S. hourly and salaried      
pension plans of $18.5 billion in 2003, $4.8 billion in 2002, and no pension    
contributions in 2001. In addition, GM made pension contributions to all other  
U.S. plans of $117 million, $98 million, and $93 million in 2003, 2002, and     
2001, respectively. GM does not have any contributions due in 2004 for its U.S. 
hourly and salaried pension plans to meet ERISA minimum funding requirements or 
to avoid paying variable rate premiums to the Pension Benefit Guaranty          
Corporation. It also does not anticipate any discretionary contributions to its 
U.S. hourly and salaried pension plans. GM expects to contribute approximately  
$120 million to its other U.S. pension plans during 2004.                       
Additionally, GM maintains hourly and salaried benefit plans that provide 
postretirement medical, dental, vision, and life insurance to most U.S. retirees
and eligible dependents. The cost of such benefits is recognized in the         
consolidated financial statements during the period employees provide service to
GM. Certain of the Corporation's non-U.S. subsidiaries have postretirement      
benefit plans, although most participants are covered by government-sponsored or
administered programs. The cost of such programs generally is not significant to
GM. GM has contributed $3.3 billion and $1.0 billion to its Voluntary Employees'
Beneficiary Association (VEBA) trust for other postretirement employee benefit  
plans (OPEB) during 2003 and 2002, respectively, and made no contributions in   
2001. GM has also contributed $5.0 billion to its VEBA trust in the first       
quarter of 2004. Contributions by participants to the other OPEB plans were $84 
million and $55 million for the years ended December 31, 2003, and 2002,        
respectively.                                                                   

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NOTE 17.  Pensions and Other Postretirement Benefits (continued)                

GM uses a December 31 measurement date for the majority of its U.S.       
pension plans and a September 30 measurement date for U.S. OPEB plans.          

          U.S. Plans      Non-U.S. Plans
                        Pension Benefits  Pension Benefits  Other Benefits
                         ---------------------------------------------------
                           2003     2002    2003    2002     2003     2002
                           ----     ----    ----    ----     ----     ----
Change in benefit                        (dollars in millions)                  
obligations                                                                 
Benefit obligation at                                                           
beginning of year        $79,617  $75,927 $12,129  $9,950  $57,195  $52,461 
Service cost                   919      864     228     194      537      505   
Interest cost                5,162    5,273     803     700    3,798    3,686   
Plan participants'                                                              
contributions                 22       23      23      25       84       55 
Amendments                   2,244       83       -      31        -        -   
Actuarial losses             5,684    3,652     222   1,040    9,026    3,796   
Benefits paid               (6,501)  (6,420)   (732)   (641)  (3,621)  (3,389)  
Exchange rate movements          -        -   2,398     776        -        -   
Curtailments,                                                                   
settlements, and other       138      215      17      54      523       81 
                         ------   ------  ------  ------   ------   ------
Benefit obligation at                                                           
end of year               87,285   79,617  15,088  12,129   67,542   57,195 
                         ------   ------  ------  ------   ------   ------

Change in plan assets                                                           
Fair value of plan assets                                                       
at beginning of  year     60,498   66,906   5,943   6,340    5,794    4,944 
Actual return on plan                                                           
assets                    13,452   (4,911)    703    (329)     865     (150)
Employer contributions      18,621    4,898     442     258    3,339    1,000   
Plan participants'                                                              
contributions                 22       23      23      25        -        - 
Benefits paid               (6,501)  (6,420)   (732)   (641)       -        -   
Exchange rate movements          -        -   1,181     259        -        -   
Curtailments,                                                                   
settlements, and other        77        3       -      31        -        - 
                         ------   ------   -----   -----    -----   ------
Fair value of plan                                                          
 assets at end of year   86,169   60,499   7,560   5,943    9,998    5,794
                         ------   ------   -----   -----   ------   ------
Funded status (1)           (1,116) (19,118) (7,528) (6,186) (57,544) (51,401)  
Unrecognized actuarial                                                          
loss                      32,997   36,105   4,401   3,802   21,821   13,542 
Unrecognized prior                                                              
service cost               7,087    5,981     694     691     (569)    (293)
Unrecognized transition                                                         
obligation                     -        -      43      46        -        - 
                         ------   ------   -----   -----   ------   ------
Net amount recognized      $38,968  $22,968 $(2,390)$(1,647)$(36,292)$(38,152)  
                         ======   ======   =====   =====   ======   ======
Amounts recognized in the                                                       
consolidated balance                                                        
sheets consist of:                                                          
Prepaid benefit cost    $39,904     $  -    $344    $218     $  -     $  -
Accrued benefit                                                           
   liability              (1,139) (17,163) (6,885) (5,525) (36,292) (38,152)
Intangible asset              1    6,009     639     690        -        -
Accumulated other                                                         
  comprehensive income      202   34,122   3,512   2,970        -        -
                         ------   ------   -----   -----   ------   ------
Net amount recognized    $38,968  $22,968 $(2,390)$(1,647)$(36,292)$(38,152)
                         ======   ======   =====   =====   ======   ======

(1)Includes overfunded status of the combined U.S. hourly and salaried pension  
plans of $0.3 billion as of December 31, 2003.                            

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

NOTE 17.  Pensions and Other Postretirement Benefits (continued)                

 The accumulated benefit obligation for all pension plans was $99 billion as
of December 31, 2003 and $89 billion as of December 31, 2002. The accumulated   
benefit obligation and fair value of plan assets for pension plans with         
accumulated benefit obligations in excess of plan assets were $15 billion and $7
billion respectively as of December 31, 2003, and $89 billion and $66 billion   
respectively as of December 31, 2002. The projected benefit obligation and fair 
value of plan assets for pension plans with projected benefit obligations in    
excess of plan assets were $45 billion and $35 billion respectively as of       
December 31, 2003, and $91 billion and $66 billion respectively as of December  
31, 2002.                                                                       

                                                        [Enlarge/Download Table]



                                 U.S. Plans        Non-U.S. Plans                          
                              Pension Benefits     Pension Benefits    Other Benefits      
                            -------------------------------------------------------------- 
                             2003   2002   2001   2003   2002  2001   2003   2002   2001   
                            -------------------------------------------------------------- 
Components of expense                           (dollars in millions)                      
                                                                                           
Service cost                  $919   $864    $885 $228   $194   $176   $537    $505   $480 
Interest cost                5,162  5,273   5,261  803    700    638  3,798  $3,686  3,731 
Expected return on plan                                                                    
  assets                    (6,374)(7,096) (7,480)(573)  (580)  (605)  (444)   (390)  (542)
Amortization of prior                                                                      
  service cost               1,148  1,253   1,323  101     93     93    (12)    (14)   (45)
Amortization of transition                                                                 
  obligation/(asset)             -      -       -   11     25      3      -       -      - 
Recognized net actuarial                                                                   
  loss/(gain)                1,744    730      82  167     62     (1)   717     321     96 
Curtailments, settlements,                                                                 
  and other                     27    211      65   49     51    100      3       -      - 
                             -----  -----     ---  ---    ---    ---  -----   -----  ----- 
Net expense                 $2,626 $1,235    $136 $786   $545   $404 $4,599  $4,108 $3,720 
                             =====  =====     ===  ===    ===    ===  =====   =====  ===== 

Weighted-average                                                                           
  assumptions used to                                                                      
  determine benefit                                                                        
  obligations at December 31(1)                                                            
Discount rate                6.00%  6.75%   7.25% 6.12% 6.23%  6.81%  6.25%   6.75%  7.25% 
Rate of compensation                                                                       
  increase                   5.0%   5.0%    5.0%  3.4%  3.4%   3.8%   4.1%    4.3%   4.7%  

Weighted-average                                                                           
  assumptions used to                                                                      
  determine net expense for                                                                
  years ended December 31 (2)                                                              
Discount rate                6.75%  7.25%   7.25% 6.23% 6.81%  7.06%  6.75%   7.25%  7.75% 
Expected return on plan                                                                    
  assets                     9.0%  10.0%   10.0%  8.5%  8.8%   8.9%   7.0%    7.9%   8.1%  
Rate of compensation                                                                       
  increase                   5.0%   5.0%    5.0%  3.4%  3.8%   4.0%   4.3%    4.7%   4.3%  

(1) Determined as of end of year                                                
(2) Determined as of beginning of year                                          

GM sets the discount rate assumption annually for each of its             
retirement-related benefit plans at their respective measurement dates to       
reflect the yield of a portfolio of high quality, fixed-income debt instruments 
matched against the timing and amounts of projected future benefits.            

Assumed Health Care Trend Rates at December 31       2003        2002           
---------------------------------------------------------------------           
Initial Health Care Cost Trend Rate                  8.5%        7.2%           
Ultimate Health Care Cost Trend Rate                 5.0%        5.0%           
Number of Years to Ultimate Trend Rate               6           6              

 A one percentage point increase in the assumed health care trend rate would
have increased the Accumulated Postretirement Benefit Obligation (APBO) by $7.6 
billion at December 31, 2003 and the aggregate service and interest cost        
components of non-pension postretirement benefit expense for 2003 by $539       
million. A one percentage point decrease would have decreased the APBO by $6.4  
billion and the aggregate service and interest cost components of non-pension   
postretirement benefit expense for 2003 by $444 million.                        
   GM's expected return on assets assumption is derived from a detailed periodic
study conducted by GM's actuaries and GM's asset management group. The study    
includes a review of the asset allocation strategy, anticipated future long-term
performance of individual asset classes, risks (standard deviations) and        
correlations for each of the asset classes that comprise the funds' asset mix.  
While the study gives appropriate consideration to recent fund performance and  
historical returns, the assumption is primarily a long-term, prospective rate.  

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

NOTE 17.  Pensions and Other Postretirement Benefits (concluded)                

  Based on a study performed in 2002, GM revised its expected long-term return
assumption for its U.S. plans effective January 1, 2003 to 9%, a reduction from 
its previous level of 10%. In anticipation of 2003 contributions, GM's asset    
management group in conjunction with GM's actuaries, studied alternatives to    
lower asset return volatility of U.S. pension plans. As a result of the study,  
the GM U.S. pension plans have approved and commenced implementation of certain 
changes in the long-run strategic allocations of the pension funds in the second
half of 2003. In setting the strategic mix, the ability of the selected mix to  
fund the pension plan liabilities effectively, meet the long-term asset return  
target of 9% and align the selected mix with the risk tolerance of the plans'   
fiduciaries were taken into account.                                            
The current strategic mix for U.S. pension plans has reduced exposure to  
equity market risks and increased allocation to asset classes which are not     
highly correlated as well as asset classes where active management has          
historically generated excess returns and places greater emphasis on manager    
skills to produce excess return while employing various risk mitigation         
strategies to reduce volatility. When fully implemented, GM pension assets will 
have the following allocations: global equity: 41%-49%, global bonds: 32%-36%,  
real estate: 8%-12%, and alternatives: 9%-13%. Overall, the current strategic   
policy mix is expected to result in comparable but less volatile returns than   
GM's prior asset mix.                                                           
VEBA assets are managed with a short-term portion, which is intended to   
maintain adequate liquidity for benefit payments, and a long-term portion, which
targets achieving long-term asset returns through following investment          
strategies similar to the U.S. pension plans. Based on the asset allocation to  
short-term and long-term portion, the blended expected return on assets         
assumption for the VEBA was 7.0% in 2003.                                       
   U.S. pension plans and OPEB plans have the following asset allocations, as of
their respective measurement dates in 2002 and 2003:                            

Plan Assets                 
     U.S. Pension Plans     Plan Assets OPEB
   ---------------------------------------------
    Actual Percentage of    Actual Percentage of
    Plan Assets at            Plan Assets at
    December 31,             September 30,
   ---------------------------------------------
Asset Category       2003       2002          2003        2002                  
--------------       ----       ----          ----        ----                  
Equity Securities     49%        55%           38%         23%                  
Debt Securities       31%        34%           58%         71%                  
Real Estate            8%        10%            1%          2%                  
Other                 12%         1%            3%          4%                  
  ---        ---           ---         ---
Total             100%       100%          100%        100%               
  ===        ===           ===         ===

   Equity securities include GM common stock in the amounts of $41 million (less
than 1% of total pension plan assets) and $30 million (less than 1% of total    
pension plan assets) at December 31, 2003, and 2002, respectively.              
   On December 8, 2003, President Bush signed into law the Medicare Prescription
Drug Improvement and Modernization Act of 2003. The Act introduces a            
prescription drug benefit beginning in 2006 under Medicare (Medicare Part D) as 
well as a federal subsidy to sponsors of retiree health care benefit plans that 
provide a benefit that is at least actuarially equivalent to Medicare Part D.   
Due to the levels of benefits provided under GM's U.S. health care plans,       
management has concluded that GM's U.S. health care plans are at least          
actuarially equivalent to Medicare Part D.                                      
GM has elected not to defer accounting for the effects of the Act and has 
remeasured GM's postretirement benefit obligation as of December 8, 2003. The   
remeasurement will reduce GM's APBO by approximately 6% to $63.4 billion,       
increase plan assets by $0.4 billion, and decrease the unrecognized actuarial   
loss by $4.3 billion. The impact of this remeasurement will be amortized over   
the average working life of GM's employees eligible for postretirement benefits 
beginning January 1, 2004. Despite this favorable impact, GM expects 2004 OPEB  
expense to be consistent with 2003 expense due to changes in the discount rate  
and healthcare trend rate.                                                      
  In accordance with GAAP, the impact of the Act is not reflected in the table
above. Specific authoritative guidance on the accounting for the Act is pending 
and guidance, when issued, could result in an adjustment to the accounting      
treatment described above.                                                      

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

NOTE 18.  Commitments and Contingent Matters                                    

Commitments                                                                     
 GM had the following minimum commitments under noncancelable capital leases
having remaining terms in excess of one year, primarily for property            
(dollars in millions):                                                          

                                                  2009
            2004   2005   2006   2007    2008    and after
             ----   ----   ----   ----    ----    ----------
Minimum commitments    $119   $117   $116   $121    $366       $816             
Sublease income         (14)   (14)   (14)   (14)    (14)      (167)            
          ----------------------------------------------
Net minimum                                                                     
commitments          $105   $103   $102   $107    $352       $649           
          ==============================================

   GM had the following minimum commitments under noncancelable operating leases
having remaining terms in excess of one year, primarily for property            
(dollars in millions):                                                          

                                                  2009
            2004   2005   2006   2007    2008    and after
             ----   ----   ----   ----    ----    ----------
Minimum commitments    $918   $850   $811   $778  $1,326     $4,628             
Sublease income        (250)  (235)  (235)  (233)   (233)    (2,865)            
          ----------------------------------------------
Net minimum                                                                     
commitments          $668   $615   $576   $545  $1,093     $1,763           
          ==============================================

   Certain of these minimum commitments fund the obligations of non-consolidated
SPEs. Certain of the leases contain escalation clauses and renewal or purchase  
options. Rental expenses under operating leases were $926 million, $985 million,
and $849 million in 2003, 2002, and 2001, respectively.                         
   GM sponsors a credit card program, entitled the GM Card program, which offers
rebates that can be applied primarily against the purchase or lease of GM       
vehicles. The amount of rebates available to qualified cardholders (net of      
deferred program income) was $4.1 billion, $4.0 billion, and $3.9 billion at    
December 31, 2003, 2002 and 2001, respectively.                                 
GM has guarantees related to its performance under operating lease        
arrangements and the residual value of leased assets totaling $604 million.     
Expiration dates vary, and certain leases contain renewal options. The fair     
value of the underlying assets is expected to fully mitigate GM's obligations   
under these guarantees. Accordingly, no liabilities were recorded with respect  
to such guarantees.                                                             
  The Corporation has guaranteed certain amounts related to the securitization
of mortgage loans. In addition, GMAC issues financial standby letters of credit 
as part of their financing and mortgage operations. At December 31, 2003        
approximately $51 million was recorded with respect to these guarantees, the    
maximum exposure under which is approximately $2.9 billion.                     
In connection with certain divestitures prior to January 1, 2003, GM has  
provided guarantees with respect to benefits for former GM employees relating to
income protection, pensions, postretirement healthcare and life insurance. Due  
to the nature of these indemnities, the maximum exposure under these agreements 
cannot be estimated. No amounts have been recorded for such indemnities as the  
Corporation's obligations under them are not probable and estimable.            
In addition to guarantees, GM has entered into agreements indemnifying    
certain parties with respect to environmental conditions pertaining to ongoing  
or sold GM properties. Due to the nature of the indemnifications, GM's maximum  
exposure under these agreements cannot be estimated. No amounts have been       
recorded for such indemnities as the Corporation's obligations under them are   
not probable and estimable.                                                     
In addition to the above, in the normal course of business GM periodically
enters into agreements that incorporate indemnification provisions. While the   
maximum amount to which GM may be exposed under such agreements cannot be       
estimated, it is the opinion of management that these guarantees and            
indemnifications are not expected to have a material adverse effect on the      
Corporation's consolidated financial position or results of operations.         

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NOTE 18.  Commitments and Contingent Matters (concluded)                        

Contingent Matters                                                              
Litigation is subject to uncertainties and the outcome of individual      
litigated matters is not predictable with assurance. Various legal actions,     
governmental investigations, claims, and proceedings are pending against the    
Corporation, including those arising out of alleged product defects;            
employment-related matters; governmental regulations relating to safety,        
emissions, and fuel economy; product warranties; financial services; dealer,    
supplier, and other contractual relationships; and environmental matters.       
  GM has established reserves for matters in which losses are probable and can
be reasonably estimated. Some of the matters may involve compensatory, punitive,
or other treble damage claims, or demands for recall campaigns, environmental   
remediation programs, or sanctions, that if granted, could require the          
Corporation to pay damages or make other expenditures in amounts that could not 
be estimated at December 31, 2003. After discussion with counsel, it is the     
opinion of management that such liability is not expected to have a material    
adverse effect on the Corporation's consolidated financial condition or results 
of operations.                                                                  

Investment in Fiat Auto Holdings                                                
At the April 23, 2003, Annual General Shareholders Meeting of FAH, FAH    
adopted a euro 5 billion recapitalization plan that provides shareholders the   
option to make pro-rata capital contributions over the eighteen months following
adoption of the plan. When the plan was adopted, Fiat S.p.A. (Fiat) held 80% of 
FAH and GM 20%. Fiat participated in the recapitalization by making a euro 3    
billion contribution, which FAH used to repay inter-company debts owed to Fiat  
or its affiliates. Currently, GM does not plan to participate. Due to Fiat's    
participation in the recapitalization, and GM's non-participation, Fiat has     
reported that GM's interest in FAH has been reduced from 20% to 10%.            
As discussed in GM's Annual Report on Form 10-K for the period ended      
December 31, 2002, the Master Agreement provides that, from January 24, 2004 to 
July 24, 2009, Fiat may seek to exercise a put option (the "Put") to require GM 
to purchase Fiat's FAH shares at their fair market value. Whether and when Fiat 
may seek to exercise the Put is unknown, although Fiat stated in its 2002 Annual
Report on Form 20F, filed with the U.S. Securities and Exchange Commission, that
it views the exercise of the Put only as a secondary possibility. Fiat also     
stated in its Form 20F that it believes that the Put is enforceable in          
accordance with the terms of the Master Agreement. GM has, however, asserted to 
Fiat that the sale of certain assets of the financing business of Fiat Auto and 
the recapitalization of FAH represent material breaches of the Master Agreement,
with the result that the Master Agreement, including the Put, is terminable by  
GM. Notwithstanding these different views, GM is continuing to build on the     
cooperation the parties have worked on for the past several years in the joint  
ventures and other cooperative contractual arrangements they have entered into  
which are independent of the Master Agreement, and is pursuing a resolution of  
these different views. Towards that end, Fiat and GM entered into a standstill  
agreement on October 26, 2003, the provisions of which enable GM to defer until 
December 15, 2004, the necessity of electing the remedy of termination of the   
Master Agreement, and with it the Put, without such deferral prejudicing the    
right of GM to elect that remedy after December 15, 2004. On October 26, 2003,  
Fiat and GM also entered into an amendment to the Master Agreement that shifts  
the Put period by one year, so that it begins on January 24, 2005 and runs to   
July 24, 2010.                                                                  
If the Put were implemented, the fair market value of FAH shares would be 
determined by the averaging of the three closest of four valuations that would  
be prepared by four investment banks after conducting due diligence under       
procedures set forth in the Master Agreement and based upon terms and conditions
to be incorporated in a purchase agreement which, at this time, the parties have
not prepared. Unless such a process and valuation is completed, the amount, if  
any, that GM might have to pay for Fiat's FAH shares if there were to be a valid
exercise of the Put, is not quantifiable.                                       
If there were a valid exercise of the Put, GM would have the option to pay
for Fiat's FAH shares entirely in shares of GM $1-2/3 par value common stock,   
entirely in cash, or in whatever combination thereof GM may choose. Under such  
circumstances, if and to the extent GM chose to pay in cash, that portion of the
purchase price could be paid to Fiat in four installments over a three-year     
period and GM would expect to fund any such payments from normal operating cash 
flows or financing activities.                                                  
If and when GM were to acquire Fiat's FAH shares, and thus become the sole
owner of FAH, GM would decide what, if any, additional capitalization would then
be appropriate for FAH and Fiat Auto. Specifically, if Fiat Auto were to need   
additional funding, GM would have to decide whether or not to provide such      
funding and under what conditions it might do so.                               
Unless FAH or Fiat Auto were subject to liquidation or insolvency, FAH's  
consolidated financial statements would be required for financial reporting     
purposes to be consolidated with those of GM. Any indebtedness, losses and      
capital needs of FAH and Fiat Auto after their acquisition by GM are not        
presently determinable, but they could have a material adverse effect on GM if  
GM chooses to fund such needs or allows the consolidation of GM's financial     
statements with those of FAH and Fiat Auto.                                     
   GM has discussed with Fiat potential alternatives to the Master Agreement and
expects to have further discussions regarding the relationship between the      
parties.                                                                        

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NOTE 19.  Stockholders' Equity                                                  

The following table presents changes in capital stock for the period from 
January 1, 2001 to December 31, 2003 (dollars in millions):                     

           Common Stocks
                    -----------------    Total
                     $1-2/3              Capital
                  Par Value    Class H   Stock
                  ---------    -------   -----

Balance at January 1, 2001              $914       $88   $1,002                 
Shares issued                          18         -       18              
                        ---       ---    -----

Balance at December 31, 2001             932        88    1,020                 
Shares issued                           4         8       12              
                        ---       ---    -----

Balance at December 31, 2002             936        96    1,032                 
Shares issued                           1        15       16              
Hughes split-off                        -      (111)    (111)             
                        ---       ---    -----

Balance at December 31, 2003            $937      $  -     $937                 
                        ===       ===      ===

  GM split off Hughes by distributing Hughes common stock to the holders of GM
Class H common stock in exchange for all outstanding shares of GM Class H common
stock. All shares of GM Class H common stock were then cancelled.               

Preference Stock                                                                
On June 24, 2002, approximately 2.7 million shares of GM Series H 6.25%   
Automatically Convertible Preference Stock held by AOL Time Warner (AOL)        
mandatorily converted into approximately 80 million shares of GM Class H common 
stock as provided for pursuant to the terms of the preference stock. GM         
originally issued the shares of preference stock to AOL in 1999 in connection   
with AOL's $1.5 billion investment in, and its strategic alliance with, Hughes. 
The preference stock accrued quarterly dividends at a rate of 6.25% per year. No
GM preference stock has been issued or outstanding since.                       

Common Stocks                                                                   
   The liquidation rights of the GM $1-2/3 par value common stock are subject to
certain adjustments if outstanding common stock is subdivided, by stock split or
otherwise.                                                                      

Convertible Debentures                                                          
   As of December 31, 2003, GM had $8.1 billion of convertible senior debentures
of outstanding, including $1.2 billion principal amount of 4.5% Series A        
convertible senior debentures (Series A) due 2032, $2.6 billion principal amount
of 5.25% Series B convertible senior debentures (Series B) due 2032 and $4.3    
billion principal amount of GM 6.25% Series C convertible senior debentures     
(Series C) due 2033. The securities are convertible into shares of GM's $1-2/3  
par value common stock, at investors' option, under any of the following        
circumstances:                                                                  
(1)  The closing sale price of GM's $1-2/3 par value common stock exceeds       
120% of the conversion price ($70.20 for Series A, $64.90 for Series  
B, and $47.62 for Series C, respectively) for at least 20 trading     
days in the 30 consecutive trading days ending on the last trading    
day of the preceding fiscal quarter; or                               
(2)  During the five business day period after any nine consecutive             
trading day period in which the trading price of the debentures for   
each day of such period was less than 95% of the product of the       
closing sale price of GM's $1-2/3 par value common stock multiplied   
by the number of shares issuable upon conversion of $25.00 principal  
amount of the debentures; or                                          
(3)  The debentures have been called for redemption; or                         
(4)  Upon the occurrence of specified corporate events.                         
The number of shares potentially convertible is 16,380,600 for Series A,  
40,060,800 for Series B, and 90,300,000 for Series C. The contingently          
convertible shares are not included in diluted earnings per share as of December
31, 2003 as they have not met the requirements for conversion.                  

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

NOTE 19.  Stockholders' Equity (concluded)                                      

Other Comprehensive Income                                                      
The changes in the components of other comprehensive income (loss) are    
reported net of income taxes, as follows (dollars in millions):                 

                                                        [Enlarge/Download Table]



                                                     Years Ended December 31,                               
                        ----------------------------------------------------------------------------------- 
                                   2003                        2002                   2001                  
                        ----------------------------------------------------------------------------------- 
                        Pre-tax  Tax Exp.   Net     Pre-tax   Tax Exp.    Net   Pre-tax   Tax Epx.     Net  
                        Amount   (Credit)  Amount    Amount   (Credit)   Amount  Amount   (Credit)   Amount 
                        ------    ------   ------    ------    ------    ------  ------    ------    ------ 
Foreign currency                                                                                            
  translation                                                                                               
                                                                                                            
  adjustments           $1,642     $673     $969       $67      $(18)      $85     $(504)   $(148)    $(356)
Unrealized (loss) gain                                                                                      
  on securities:                                                                                            
  Unrealized holding                                                                                        
   (loss) gain             465      166      299      (501)     (166)     (335)      162       56       106 
  Reclassification                                                                                          
   adjustment              (84)     (31)     (53)      611       220       391      (176)     (66)     (110)
                           ---      ---      ---       ---       ---       ---       ---       --       --- 
Net unrealized                                                                                              
  (loss) gain              381      135      246       110        54        56       (14)     (10)       (4)
Minimum pension                                                                                             
  liability adjustment  33,378   12,623   20,755   (21,746)   (8,127)  (13,619)  (15,317)  (5,783)   (9,534)
Net unrealized gain                                                                                         
  (loss) on derivatives    329       73      256       151        49       102      (387)     (80)     (307)
Amounts attributable to                                                                                     
  Hughes                     -        -        -      (300)     (139)     (161)     (172)     (44)     (128)
                        ------   ------   ------    ------     -----    ------    ------    -----    ------ 
Other comprehensive                                                                                         
  (loss) income        $35,730  $13,504  $22,226  $(21,718)  $(8,181) $(13,537) $(16,394) $(6,065) $(10,329)
                        ======   ======   ======    ======     =====    ======    ======    =====    ====== 

NOTE 20.  Earnings Per Share Attributable to Common Stocks                      

Earnings per share (EPS) attributable to each class of GM common stock was
determined based on the attribution of earnings to each such class of common    
stock for the period divided by the weighted-average number of common shares for
each such class outstanding during the period. Diluted EPS attributable to each 
class of GM common stock considers the effect of potential common shares, unless
the inclusion of the potential common shares would have an antidilutive effect. 
The attribution of earnings to each class of GM common stock was as follows     
(dollars in millions):                                                          

                                                Years Ended December 31,
                                                ----------------------------
                                                2003      2002      2001
                                                ----      ----      ----
Earnings attributable to common stocks                                          
$1-2/3 par value                                                            
 Continuing operations                         $2,862    $1,975   $1,220
  Discontinued operations                          (48)      (90)    (234)
 Gain on sale of discontinued operations        1,249         -        -
                                                -----     -----    -----
Earnings attributable to $1-2/3 par value        $4,063    $1,885     $986  

Earnings from discontinued operations                                       
 attributable to Class H                         $(241)    $(195)   $(484)
                                                  ---       ---      ---

Total earnings attributable to common stocks     $3,822    $1,690     $502  
                                                =====     =====      ===

Earnings attributable to GM $1-2/3 par value common stock for each period 
represent the earnings attributable to all GM common stocks, reduced by the     
Available Separate Consolidated Net Income (ASCNI) of Hughes for the respective 
period.                                                                         
In 2001 and prior years, losses attributable to GM Class H common stock   
represent the ASCNI of Hughes, reduced by the amount of dividends accrued on the
Series A Preferred Stock of Hughes (as an equivalent measure of the effect that 
GM's payment of dividends on the GM Series H 6.25% Automatically Convertible    
Preference Stock would have if paid by Hughes).                                 

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NOTE 20.  Earnings Per Share Attributable to Common Stocks (concluded)          

The calculated losses used for computation of the ASCNI of Hughes are then
multiplied by a fraction, the numerator of which is equal to the                
weighted-average number of shares of GM Class H common stock outstanding (1.1   
billion as of December 22, 2003, 920 million as of December 31, 2002, and 876   
million as of December 31, 2001) and the denominator of which is a number equal 
to the weighted-average number of shares of GM Class H common stock which if    
issued and outstanding would represent a 100% interest in the earnings of Hughes
(the "Average Class H dividend base"). The Average Class H dividend base was 1.4
billion at December 22, 2003 and 1.3 billion as of December 31, 2002 and 2001.  
  The reconciliation of the amounts used in the basic and diluted earnings per
share computations for income from continuing operations was as follows (dollars
in millions except per share amounts):                                          

                                         $1-2/3 Par Value Common Stock
                                           -------------------------------
                                                             Per Share
                                        Income    Shares    Amount
                                        ------    ------    ------
Year ended December 31, 2003                                                    
Basic EPS                                                                       
Income from continuing operations                                           
attributable to common stocks               $2,862       561       $5.10  
                                                                  ====
Effect of Dilutive Securities                                                   
Assumed exercise of dilutive stock options        -        8                
                              -----       --
Diluted EPS                                                                     
Adjusted income attributable to common                                      
stocks                                      $2,862       569       $5.03  
                                           =====       ===        ====

Year ended December 31, 2002                                                    
Basic EPS                                                                       
Income from continuing operations                                           
attributable to  common stocks              $1,975       560       $3.53  
                                                                  ====
Effect of Dilutive Securities                                                   
Assumed exercise of dilutive stock options        -         2               
                               -----       ---
Diluted EPS                                                                     
Adjusted income attributable to common                                      
stocks                                      $1,975       562       $3.51  
                                           =====       ===        ====

Year ended December 31, 2001                                                    
Income from continuing operations            $1,222                         
Less:  Dividends on preference stocks             2                         
                     -----
Basic EPS                                                                       
Income from continuing operations                                           
attributable to common stocks               $1,220       551       $2.21  
                                                                  ====
Effect of Dilutive Securities                                                   
Assumed exercise of dilutive stock options        -         5               
                               -----       ---
Diluted EPS                                                                     
Adjusted income attributable to common                                      
stocks                                      $1,220       556       $2.20  
                                           =====       ===        ====

Certain stock options and convertible securities were not included in the 
computation of diluted earnings per share for the periods presented since the   
instruments' underlying exercise prices were greater than the average market    
prices of GM $1-2/3 par value common stock and inclusion would be antidilutive. 
Such shares not included in the computation of diluted earnings per share were  
176 million, 66 million, and 29 million as of December 31, 2003, 2002 and 2001, 
respectively.                                                                   

NOTE 21.  Derivative Financial Instruments and Risk Management                  

Effective January 1, 2001, GM adopted SFAS No. 133, "Accounting for       
Derivative Instruments and Hedging Activities," as amended and interpreted,     
which requires that all derivatives be recorded at fair value on the balance    
sheet and establishes criteria for designation and effectiveness of derivative  
transactions for which hedge accounting is applied. GM assesses the initial and 
ongoing effectiveness of its hedging relationships in accordance with its       
documented policies. As a result of the adoption of this standard as of January 
1, 2001, GM recorded a transition adjustment representing a one-time after-tax  
charge to income totaling $15 million, as well as an after-tax unrealized gain  
of $4 million to other comprehensive income.                                    

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NOTE 21.  Derivative Financial Instruments and Risk Management (concluded)      

   GM is exposed to market risk from changes in foreign currency exchange rates,
interest rates, and certain commodity and equity security prices. In the normal 
course of business, GM enters into a variety of foreign exchange, interest rate,
and commodity forward contracts, swaps, and options, with the objective of      
minimizing exposure arising from these risks. A risk management control system  
is utilized to monitor foreign exchange, interest rate, commodity and equity    
price risks, and related hedge positions.                                       

Cash Flow Hedges                                                                
GM uses financial instruments designated as cash flow hedges to hedge the 
Corporation's exposure to foreign currency exchange risk associated with buying,
selling, and financing in currencies other than the local currencies in which it
operates, and to variability in cash flows related to floating rate debt, and   
its exposure to commodity price risk associated with changes in prices of       
commodities used in its automotive business, primarily non ferrous metals used  
in the manufacture of automotive components. For transactions denominated in    
foreign currencies, GM typically hedges forecasted and firm commitment exposure 
up to one year in the future. For commodities, GM hedges exposures up to five   
years in the future. For the year ended December 31, 2003, hedge ineffectiveness
associated with instruments designated as cash flow hedges decreased cost of    
sales and other expenses by $50 million. For the year ended December 31, 2002,  
hedge ineffectiveness associated with instruments designated as cash flow hedges
increased cost of sales and other expenses by $0.1 million; changes in time     
value of the instruments (which are excluded from the assessment of hedge       
effectiveness and exclude transition adjustment) increased cost of sales and    
other expenses by $30 million and $19 million, respectively. Derivative gains   
and losses included in other comprehensive income are reclassified into earnings
at the time that the associated hedged transactions impact the income statement.
For the year ended December 31, 2003, net derivative gains of $245 million were 
reclassified to cost of sales and other expenses. For the year ended December   
31, 2002, net derivative losses of $65 million were likewise reclassified. These
net losses/gains were offset by net gains/losses on the transactions being      
hedged. Approximately $91 million of net derivative gains included in other     
comprehensive income at December 31, 2003, will be reclassified into earnings   
within 12 months from that date.                                                

Fair Value Hedges                                                               
GM uses financial instruments designated as fair value hedges to manage   
certain of the Corporation's exposure to interest rate risk. GM is subject to   
market risk from exposures to changes in interest rates due to its financing,   
investing, and cash management activities. A variety of instruments is used to  
hedge GM's exposure associated with its fixed rate debt and mortgage servicing  
rights (MSR's). For the year ended December 31, 2003, hedge ineffectiveness     
associated with instruments designated as fair value hedges, primarily due to   
hedging of MSRs, decreased selling, general, and administrative expenses by $390
million and increased selling, general, and administrative expenses by $458     
million in 2002. Changes in time value of the instruments (which are excluded   
from the assessment of hedge effectiveness) decreased selling, general, and     
administrative expenses by $175 million in 2003 and $212 million in 2002.       

Undesignated Derivative Instruments                                             
Forward contracts and options not designated as hedging instruments under 
SFAS No. 133 are also used to hedge certain foreign currency, commodity, and    
interest rate exposures. Unrealized gains and losses on such instruments are    
recognized currently in earnings.                                               

NOTE 22.  Fair Value of Financial Instruments                                   

 The estimated fair value of financial instruments has been determined using
available market information or other appropriate valuation methodologies.      
However, considerable judgment is required in interpreting market data to       
develop estimates of fair value; therefore, the estimates are not necessarily   
indicative of the amounts that could be realized or would be paid in a current  
market exchange. The effect of using different market assumptions and/or        
estimation methodologies may be material to the estimated fair value amounts.   

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NOTE 22.  Fair Value of Financial Instruments (concluded)                       

Book and estimated fair values of financial instruments, for which it is  
practicable to estimate fair value, were as follows (dollars in millions):      

                              December 31,
                               ---------------------------------------------
                             2003                   2002
                               ---------------------------------------------

Automotive and Other Operations  Book Value  Fair Value  Book Value  Fair Value 
-------------------------------  ----------  ----------  ----------  ---------- 
Assets                                                                          
Other assets (1)                   $771        $500        $496        $327 
Derivative assets                $1,234      $1,234        $364        $364 
Liabilities                                                                     
Long-term debt (2)              $29,593     $31,859     $14,261     $13,832 
Other liabilities (1)              $528        $571        $531        $580 
Derivative liabilities             $356        $356        $298        $298 

Financing and Insurance Operations                                              
----------------------------------                                              
Assets                                                                          
Finance receivables - net (3)  $172,423    $174,547    $133,964    $135,890 
Derivative assets               $10,026     $10,026      $7,185      $7,185 
Liabilities                                                                     
Debt  (2)                      $239,350    $244,642    $183,913    $186,360 
Derivative liabilities           $1,196      $1,196        $843        $843 

(1) Other assets include various financial instruments (e.g., long-term         
receivables and certain investments) that have fair values based on     
 discounted cash flows, market quotations, and other appropriate valuation
techniques. The fair values of retained subordinated interests in trusts
and excess servicing assets (net of deferred costs) were derived by     
discounting expected cash flows using current market rates. Estimated   
values of Industrial Development Bonds, included in other liabilities,  
were based on quoted market prices for the same or similar issues.      
(2) Long-term debt has an estimated fair value based on quoted market prices    
for the same or similar issues or based on the current rates offered to 
GM for debt of similar remaining maturities.                            
(3) The fair value was estimated by discounting the future cash flows using     
applicable spreads to approximate current rates applicable to each      
category of finance receivables.                                        

Due to their short-term nature, the book value approximates fair value for
cash and marketable securities, accounts and notes receivable (less allowances),
accounts payable (principally trade), Auto & Other loans payable and FIO debt   
payable within one year for the periods ending December 31, 2003 and 2002.      

NOTE 23.  Stock Incentive Plans                                                 

   GM's stock incentive plans consist of the General Motors 2002 Stock Incentive
Plan, formerly the 1997 General Motors Amended Stock Incentive Plan (GMSIP), the
General Motors 1998 Salaried Stock Option Plan (GMSSOP), the General Motors 1997
Performance Achievement Plan (GMPAP), and the General Motors 2002 Long Term     
Incentive Plan (GMLTIP). The GMSIP, the GMPAP, and the GMLTIP are administered  
by the Executive Compensation Committee of the GM Board. The GMSSOP is          
administered by the Vice President of Global Human Resources.                   
  Under the GMSIP, 27.4 million shares of GM $1-2/3 par value common stock may
be granted from June 1, 2002, through May 31, 2007, of which approximately 17.2 
million were available for grants at December 31, 2003. Any shares granted and  
undelivered under the GMSIP, due primarily to expiration or termination, become 
again available for grant. Options granted prior to 1997 under the GMSIP        
generally are exercisable one-half after one year and one-half after two years  
from the dates of grant. Stock option grants awarded since 1997 vest ratably    
over three years from the date of grant. Option prices are 100% of fair market  
value on the dates of grant and the options generally expire 10 years from the  
dates of grant, subject to earlier termination under certain conditions.        

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NOTE 23.  Stock Incentive Plans (continued)                                     

   Under the GMSSOP, which commenced January 1, 1998 and ends December 31, 2007,
the number of shares of GM $1-2/3 par value common stock that may be granted    
each year is determined by management. Approximately 3.6 million shares of GM   
$1-2/3 par value common stock were available for grants at December 31, 2003.   
Stock options vest one year following the date of grant and are exercisable two 
years from the date of grant. Option prices are 100% of fair market value on the
dates of grant and the options generally expire 10 years and two days from the  
dates of grant subject to earlier termination under certain conditions.         
The GMPAP and the GMLTIP consist of award opportunities granted to        
participants that are based on the achievement of specific corporate business   
criteria. The target number of shares of GM $1 2/3 par value common stock that  
may be granted each year is determined by management. These grants are subject  
to a two- or three-year performance period and the final award payout may vary  
based on the achievement of those criteria. As of December 31, 2003, a total of 
3.8 million shares had been granted as award opportunities under the GMPAP and  
the GMLTIP. This is the targeted number of shares that would finally be granted 
should all corporate business criteria be achieved.                             

                         Number of                           Number of
                      securities to be  Weighted average      securities
                        issued upon     exercise price       remaining
                          exercise of     of outstanding     available for
Plan Category                outstanding        options,       future issuance  
                           options,        warrants and       under equity
                         warrants and         rights          compensation
                          rights                             plans (1)
------------------------------------------------------------------------------- 
Equity compensation plans                                                       
approved by security                                                        
holders:                                                                    
GMSIP                        74,485,566         $54.38         17,194,942   

Equity compensation plans                                                       
not approved by security                                                    
holders (2):                                                                
GMSSOP                       24,390,056         $55.33          3,626,225   
------------------------------------------------------------------------------- 
Total                          98,875,622         $54.61         20,821,167     
------------------------------------------------------------------------------- 

(1)Excludes securities reflected in the first column, "Number of securities to  
be issued upon exercise of outstanding options, warrants and rights."     
(2)All equity compensation plans except the GMSSOP were approved by the         
shareholders. The GMSSOP was adopted by the Board of Directors in 1998 and
expires December 31, 2007. The purpose of the plans is to recognize the   
importance and contribution of GM employees in the creation of stockholder
value, to further align compensation with business success and to provide 
   employees with the opportunity for long-term capital accumulation through the
grant of options to acquire shares of General Motors common stock.        

 The fair value of each option grant is estimated on the date of grant using
the Black-Scholes option-pricing model with the following weighted-average      
assumptions:                                                                    

            2003              2002              2001
              ------------------------------------------------------
             GM       GM       GM       GM       GM       GM
             SIP      SSOP     SIP      SSOP     SIP      SSOP
             ---      ----     ---      ----     ---      ----

Interest rate          2.9%     2.9%     4.3%     4.3%     4.6%     4.6%        
Expected life                                                                   
(years)              5.0      5.0      5.0      5.0      5.0      5.0       
Expected volatility   35.4%    35.4%    34.6%    34.6%    31.2%    31.1%        
Dividend yield         5.0%     5.0%     4.0%     4.0%     3.8%     3.8%        

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NOTE 23.  Stock Incentive Plans (concluded)                                     

Changes in the status of outstanding options were as follows:             

                               GMSIP                  GMSSOP
                             $1-2/3 Par Value       $1-2/3 Par Value
                              Common                  Common
                               -----------------------------------------------
                                           Weighted-               Weighted-
                               Shares      Average     Shares      Average
                                under     Exercise      under     Exercise
                              Option       Price      Option       Price
------------------------------------------------------------------------------- 
Options outstanding at                                                          
January 1, 2001                43,125,106      $58.49   10,367,464     $67.30   
------------------------------------------------------------------------------- 
Granted                        13,141,725      $52.49    3,902,862     $52.35   
Exercised                       1,682,731      $39.66       37,655     $46.59   
Terminated                      1,641,974      $61.08      154,690     $66.27   
------------------------------------------------------------------------------- 
Options outstanding at                                                          
December 31, 2001              52,942,126      $57.52   14,077,981     $63.22   
------------------------------------------------------------------------------- 
Granted                        17,294,937      $50.53    5,015,553     $50.46   
Exercised                       2,729,511      $40.46       71,663     $46.59   
Terminated                      1,685,392      $55.28       64,672     $62.39   
------------------------------------------------------------------------------- 
Options outstanding at                                                          
December 31, 2002              65,822,160      $56.45   18,957,199     $59.91   
Granted                        11,148,605      $40.06    5,666,127     $40.05   
------------------------------------------------------------------------------- 
Exercised                       1,489,170      $42.28            -          -   
------------------------------------------------------------------------------- 
Terminated                        996,029      $55.06      233,270     $56.92   
------------------------------------------------------------------------------- 
Options outstanding at                                                          
December 31, 2003              74,485,566      $54.38   24,390,056     $55.33   
=============================================================================== 
------------------------------------------------------------------------------- 
Options exercisable at                                                          
December 31, 2001              29,890,175      $53.93    6,148,695     $61.97   
------------------------------------------------------------------------------- 
December 31, 2002              38,094,946      $58.18   10,098,994     $67.48   
------------------------------------------------------------------------------- 
December 31, 2003              48,932,216      $58.56   13,825,058     $63.29   
------------------------------------------------------------------------------- 

 The following table summarizes information about GM's stock option plans at
December 31, 2003:                                                              

Weighted-       
                   Average    Weighted-    Weighted-
                Remaining     Average    Average
 Range of       Options     Contractual   Exercise    Options     Exercise
Exercise Prices  Outstanding  Life (yrs.)     Price   Exercisable    Price    
------------------------------------------------------------------------------- 
GMSIP $1-2/3 Par Value Common                                                   
$21.00 to $39.99     886,116       2.0         $33.51      804,179    $33.24    
40.00 to 49.99  24,860,743       5.9         $42.80   13,971,139    $44.93  
50.00 to 59.99  28,259,174       7.6         $51.42   13,696,365    $51.78  
60.00 to 83.50  20,479,533       5.5         $73.40   20,460,533    $73.41  
------------------------------------------------------------------------------- 
$21.00 to $83.50  74,485,566       6.4         $54.38   48,932,216    $58.56    
------------------------------------------------------------------------------- 
GMSSOP $1-2/3 Par Value Common                                                  
 $40.05        5,631,365       9.1         $40.05            -        $-
  46.59        2,264,335       4.0         $46.59    2,264,335    $46.59
  50.46        4,933,633       8.0         $50.46            -        $-
  52.35        3,824,905       7.0         $52.35    3,824,905    $52.35
  71.53        3,739,403       5.0         $71.53    3,739,403    $71.53
  75.50        3,996,415       6.0         $75.50    3,996,415    $75.50
------------------------------------------------------------------------------- 
$40.05 to $75.50  24,390,056       6.9         $55.33   13,825,058    $63.29    
------------------------------------------------------------------------------- 

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NOTE 24.  Other Income                                                          

Other income (included in total net sales and revenues) consisted of the  
following (dollars in millions):                                                

                                          Years Ended December 31,
                                        --------------------------
                                        2003     2002     2001
                                        ----     ----     ----
Automotive and Other Operations                                                 
Other income                                                                    
Interest income                              $1,389     $905     $714       
Rental car lease revenue                      1,460    1,214    1,424       
Claims, commissions, and grants                 916      846      767       
Gain on sale of GM Defense                      814        -        -       
Other                                           400      239      369       
                                       -----    -----    -----
Total other income                          $4,979   $3,204   $3,274      
                                       =====    =====    =====

                                          Years Ended December 31,
                                        --------------------------
                                        2003     2002     2001
                                        ----     ----     ----
Financing and Insurance Operations                                              
Other income                                                                    
Interest income                                $684   $2,951   $2,269       
Insurance premiums                            2,544    2,188    1,524       
Mortgage banking income                       2,696    2,064    1,862       
Automotive securitization income              1,057    1,357    1,183       
Other                                         3,419    3,034    2,840       
                                      ------   ------    -----
Total other income                         $10,400  $11,594   $9,678      
                                      ======   ======    =====

NOTE 25.  European Matters                                                      

During 2001, GM Europe announced its plan to turn around its business with
the implementation of Project Olympia. The initial stages of Project Olympia    
sought to identify initiatives that could deliver:                              
. Solid and profitable business performance as of 2003                      
. A strengthened and optimized sales structure                              
. A revitalized Opel/Vauxhall brand                                         
. Further market growth opportunities                                       
. Continuous improvement by refocusing the organizational structure         
The project identified several initiatives which aim to address the goals 
mentioned above. These initiatives include, among other things, reducing GME's  
manufacturing capacity, restructuring the dealer network in Germany, and        
redefining the way vehicles are marketed. These initiatives resulted in a       
decrease to GM's pre-tax earnings and were recorded in the GME region in the    
first quarter of 2002 as follows: (1) $298 million related to employee          
separation costs for approximately 4,000 employees; (2) $235 million related to 
asset write-downs; and (3) $108 million related to the dealer network           
restructuring in Germany. The net income impact of these charges in the first   
quarter of 2002 was $407 million, or $0.72 per diluted share of GM $1-2/3 par   
value common stock ($553 million included in cost of sales and other expenses;  
$88 million included in selling, general, and administrative expenses; and      
$(234) million included in income tax expense).                                 
  In 2003, GME recorded a $311 million pre-tax ($218 million after-tax) charge
to improve the competitiveness of GM's automotive operations in Europe. This    
charge was comprised of the following: $207 million related to employee         
separation costs for approximately 2,900 employees; and $104 million related to 
asset write-downs and other costs. These charges were recorded in cost of sales 
and other expenses.                                                             

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NOTE 26: Segment Reporting                                                      

SFAS No. 131, "Disclosures about Segments of an Enterprise and Related    
Information", established standards for reporting information about operating   
segments in financial statements. Operating segments are defined as components  
of an enterprise about which separate financial information is available that is
evaluated regularly by the chief operating decision maker, or decision making   
group, in deciding how to allocate resources and in assessing performance. GM's 
chief operating decision maker is the Chief Executive Officer. The operating    
segments are managed separately because each operating segment represents a     
strategic business unit that offers different products and serves different     
markets.                                                                        
 GM's reportable operating segments within its Auto & Other business consist
of General Motors Automotive (GMA) (which is comprised of four regions: GMNA,   
GME, GMLAAM, GMAP), and Other. GMNA designs, manufactures, and/or markets       
vehicles primarily in North America under the following nameplates: Chevrolet,  
Pontiac, GMC, Oldsmobile, Buick, Cadillac, Saturn, and HUMMER. GME, GMLAAM, and 
GMAP primarily meet the demands of customers outside North America with vehicles
designed, manufactured, and marketed under the following nameplates: Opel,      
Vauxhall, Holden, Saab, Buick, Chevrolet, GMC, and Cadillac. The Other segment  
includes the design, manufacturing, and marketing of locomotives, the           
elimination of intersegment transactions, certain non-segment specific revenues 
and expenditures, and certain corporate activities. GM's reportable operating   
segments within its FIO business consist of GMAC and Other. GMAC provides a     
broad range of financial services, including consumer vehicle financing,        
full-service leasing and fleet leasing, dealer financing, car and truck extended
service contracts, residential and commercial mortgage services, commercial and 
vehicle insurance, and asset-based lending. The Financing and Insurance         
Operations' Other segment includes financing entities that are not consolidated 
by GMAC.                                                                        
The accounting policies of the operating segments are the same as those   
described in the summary of significant accounting policies except that the     
disaggregated financial results have been prepared using a management approach, 
which is consistent with the basis and manner in which GM management internally 
disaggregates financial information for the purposes of assisting in making     
internal operating decisions. GM evaluates performance based on stand-alone     
operating segment net income and generally accounts for intersegment sales and  
transfers as if the sales or transfers were to third parties, that is, at       
current market prices. Revenues are attributed to geographic areas based on the 
location of the assets producing the revenues.                                  

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NOTE 26.  Segment Reporting (continued)                                         

                                                        [Enlarge/Download Table]


                                                                                      Auto &               Other     Total    
                                   GMNA     GME    GMLAAM   GMAP     GMA     Other    Other         GMAC  Financing  Financing
                                   ----     ---    ------   ----     ---      ----    -----         ----  ---------  ---------
2003                                                             (dollars in millions)                                        
Manufactured products sales and revenues:                                                                                     
                                                                                                                              
  External customers            $114,756  $25,960  $4,755  $4,578  $150,049     $803 $150,852         $ -      $ -       $ -  
  Intersegment                    (2,044)     946     555     543         -       -         -           -        -         -  
                                 -------   ------   -----   -----   -------      ---  -------          --       --        --  
   Total manufactured products   112,712   26,906   5,310   5,121   150,049     803   150,852           -        -         -  
Financing revenue                      -        -       -       -         -       -         -      18,663      630    19,293  
Other income                       3,598      572      77     217     4,464     515     4,979      10,962     (562)   10,400  
                                 -------   ------   -----   -----   -------   -----   -------      ------      ---    ------  
Total net sales and revenues    $116,310  $27,478  $5,387  $5,338  $154,513  $1,318  $155,831     $29,625      $68   $29,693  
                                 =======   ======   =====   =====   =======   =====   =======      ======      ===    ======  
Depreciation and amortization     $6,199   $1,211    $248    $233    $7,891     $55    $7,946      $5,744     $288    $6,032  
Interest income (a)               $1,445     $375     $36      $4    $1,860   $(471)   $1,389        $937    $(253)     $684  
Interest expense                  $1,762     $343    $119     $11    $2,235   $(455)   $1,780      $7,564     $120    $7,684  
Income tax expense (benefit)        $171    $(303)  $(149)    $44     $(237)  $(632)    $(869)     $1,591       $9    $1,600  
Earnings (losses) of                                                                                                          
  nonconsolidated associates        $113     $102      $7    $560      $782    $(48)     $734         $(3)     $(4)      $(7) 
Net income (loss) from                                                                                                        
  continuing operations             $811    $(504)  $(331)   $577      $553   $(518)      $35      $2,793      $34    $2,827  
Investments in nonconsolidated                                                                                                
  affiliates                        $462   $1,139    $431  $3,944    $5,976     $56    $6,032         $50     $(50)        -  
Segment assets                  $130,279  $23,835  $3,039  $3,349  $160,502  $1,283  $161,785    $288,163      $51  $288,214  
Expenditures for property         $4,650   $1,202    $110    $576    $6,538     $78    $6,616        $712       $2      $714  

2002                                                                                                                          
Manufactured products sales and revenues:                                                                                     
  External customers            $115,041  $22,409  $4,698  $3,663  $145,811  $1,253  $147,064         $ -      $ -      $ -   
  Intersegment                    (2,038)   1,057     327     654         -     (18)      (18)          -        -        -   
                                 -------   ------   -----   -----   -------   -----   -------       -----      ---    ------  
   Total manufactured products   113,003   23,466   5,025   4,317   145,811   1,235   147,046           -        -         -  
Financing revenue                      -        -       -       -         -       -         -      14,758      726    15,484  
Other income                       2,806      446      85     207     3,544    (340)    3,204      12,083     (493)   11,590  
                                 -------   ------   -----   -----   -------   -----   -------       -----      ---    ------  
Total net sales and revenues    $115,809  $23,912  $5,110  $4,524  $149,355    $895  $150,250     $26,841     $233   $27,074  
                                 =======   ======   =====   =====   =======     ===   =======      ======      ===    ======  
Depreciation and amortization     $4,853   $1,080    $178    $143    $6,254     $70    $6,324      $5,136     $405    $5,541  
Interest income (a)               $1,003     $316     $24     $12    $1,355   $(450)     $905      $3,221    $(270)   $2,951  
Interest expense                    $738     $304    $145      $8    $1,195   $(716)     $479      $