• Feb 24th 2011 at 9:45AM
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General Motors has officially announced earnings for its first full year of business after its emergence from bankruptcy. The automaker brought in $135.6 billion in revenue with a net income of $4.7 billion, which marks GM's first profit since 2004. Additionally, that profit was the largest for The General since 1999. Previously, GM had racked up $100 billion in losses.
Being in the black is good news for the automaker's 50,000 hourly workers who are expected to receive bonuses averaging $4,300 as part of a profit sharing program.

According to CNN Money, the change of pace is thanks largely to three things: strong U.S. sales, a growing auto market in China and a significantly lower cost structure thanks to the automaker's trip through bankruptcy.

GM Shares have inched up on the news, despite the fact that the stock market as a whole has dropped by five percent on blooming oil prices. CNN Money reports that GM shares are up five percent as a whole since the company's IPO last November, but that those shares will need to jump by 50 percent in order for tax payers to recoup the government's investment in the company. Follow the jump for the press release.

[Sources: General Motors, CNN Money]
Show full PR text
GM Announces First Full-Year Results as New Company


GM achieves four consecutive quarters of profitability

Calendar year net income of $4.7 billion, earnings per share of $2.89 on a diluted basis

Calendar year earnings before interest and tax (EBIT) adjusted of $7.0 billion

Material Weakness in Financial Reporting Eliminated

DETROIT – General Motors Company (NYSE: GM) today announced its calendar year 2010 results marked by $4.7 billion of net income attributable to common stockholders for its first full year of operations.

Revenue for the calendar year was $135.6 billion. Automotive cash flow from operating activities was $6.6 billion and automotive free cash flow was $2.4 billion, both reflecting the impact of a $4.0 billion voluntary cash contribution to the company's U.S. pension plans.

"Last year was one of foundation building," said Dan Akerson, chairman and chief executive officer. "Particularly pleasing was that we demonstrated GM's ability to achieve sustainable profitability near the bottom of the U.S. industry cycle, with four consecutive profitable quarters."

GM generated the following results:

Fourth Quarter '10
Calendar Year '10

Revenue (bils.)

Net income attributable to common stockholders (bils.)

- Adjustments and loss on preferred, included above (bils.)

Earnings per share on a fully diluted basis ($/share)

- Adjustments and loss on preferred, included above ($/share)

Earnings before interest and tax (EBIT) adj. (bils.)

Automotive net cash flow from operating activities (bils.)

Automotive free cash flow (bils.)

- Contribution to U.S. pension plans, included above (bils.)

Fourth quarter net income attributable to common stockholders of $0.5 billion includes net charges of $0.4 billion, or a $0.21 reduction to fully diluted earnings per share, as a result of the previously disclosed $0.7 billion loss on the purchase of U.S. Treasury (UST) preferred shares, partially offset by the impact of EBIT adjustments. The company had approximately $0.3 billion in favorable EBIT adjustments including the previously disclosed $0.2 billion gain associated with the repayment of the VEBA Note, and $0.1 billion of cumulative gains on the sale of Nexteer and the purchase of the Strasbourg, France facility.

GM North America (GMNA) had EBIT in the fourth quarter 2010 of $0.8 billion, up from a loss of $3.4 billion in the fourth quarter 2009. GM Europe (GME) had a loss before interest and taxes of $0.6 billion, an improvement from a loss of $0.8 billion in the same quarter a year ago. GM International Operations (GMIO) had EBIT of $0.3 billion, down from $0.4 billion in fourth quarter 2009. GM South America (GMSA) had EBIT of $0.2 billion for the fourth quarter, compared with $0.3 billion in the same quarter a year ago. GM began reporting GMSA results as an operating segment in the fourth quarter, and has revised the segment reporting for prior periods.

Automotive net cash flow from operating activities for the fourth quarter was $(1.7) billion, which reflects a $4.0 billion voluntary cash contribution to the U.S. pension plans. After deducting $1.1 billion of capital expenditures, automotive free cash flow was $(2.8) billion.
As a result of GM's 2010 financial performance, the company will pay profit sharing to approximately 45,000 eligible GM U.S. hourly employees, and approximately 3,000 eligible GM Components Holdings (GMCH) employees. The average payout per employee will be approximately $4,300 for GM employees and $3,200 for GMCH employees.

In addition, GM announced today that after assessing remediation actions that it put in place to address the company's material weakness regarding the financial reporting process, the management team and Audit Committee of the Board of Directors concluded that the material weakness no longer exists as of December 31, 2010.

"Our focus for 2011 is to build on our progress and continue to generate momentum in the marketplace. We expect our first quarter will be a strong start," said Chris Liddell, vice chairman and chief financial officer.

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    • 1 Second Ago
      • 4 Years Ago
      It's good news, however, given the fact they wrote off billions in debt during the bankruptcy and it's hard for me to be that impressed. Ford's success story is way more impressive.

        • 4 Years Ago
        Ford has the goodwill of having done things the way they did. But make no mistake, it's been extremely costly for Ford to do what they did. Ford is far from good stability. As it is working, they will come out smelling like a rose while Chrysler and GM will carry the stigma of the bailout. But make no mistake, GM is performing very well and doing so thanks to having been bailed out and the soft bankruptcy. Chrysler is struggling more but making strides. You can argue all you want about how unethical and wrong the bailouts were, but the financial benefits for the state of Michigan and in turn the entire country cannot be discounted. Letting Detroit die would have been suicide for much more than Detroit or the state of Michigan! It would have been disastrous for the whole country!
        • 4 Years Ago
        If Ford knew what was good they would have gone bankrupt as well and cleared off all their debt! Now they are stuck with a huge ammount of debt.. good luck trying to get out of that and fixing that joke you call Lincoln
        • 4 Years Ago
        We'll see what happens if/when Ford manages to become debt-free.
        • 4 Years Ago
        How many companies the size of Ford are "debt free"? Ford is currently debt neutral and will cut another 3b of debt this quarter (according to news reports).

        Ford posted a 6b profit and paid off 14b of debt in the same year...without going BK.

        When GM does anything remotely close to that, I'll be impressed.
      • 4 Years Ago
      At least America still has a domestic auto industry.
      • 4 Years Ago
      You people are funny -- hypocrites.

      If you actually believe GM is getting such a free ride; you would have been investing in their stock like crazy in order to benefit from that free ride.

      Truth is, since coming out of bankrupsy they have done things very well. You people are critical of GM for doing things which are in their best interest. Good grief; that is how businesses are supposed to operate.

      Go back to acting like old bitties and being annoyed the the "Walmarts" of the world are doing well and trying to make people think Darth Vader is behind it all.
        • 4 Years Ago
        Hey Glenn, businesses doing what is in "their best interest" is the reason why the US economy is in the state it's in, and why everything you see around you is made somewhere else.

        You are sadly mistaken if the average joe-schmo is in their "best interests". Grow some sense.
      • 4 Years Ago
      Enron made really good profits too (if you forget about their debts).
        • 4 Years Ago
        Actually a lot of the profit Enron recorded wasn't even real profit to begin with. Shady accounting where you record future profits in current periods. So they were just saying this could theoretically make us $500 million. So we're just going to show $500 million profit now. Then things wouldn't pan out and they would never actually make a lot of the profits they were claiming.
      • 4 Years Ago
      A company fresh out of bankruptcy makes a profit. Ok. Was it not reported the increase in sales of GM was a result of higher fleet sales? That is not impressive at all.
      • 4 Years Ago
      All the critics of GM'S comeback are real idiots. Get your heads out you --- and realize what this means to America's (your) economy. Unlike airlines, banks, who was bailed out and never paid any money back.....GM IS paying their loan back, and providing the public with an alternative to the soon to be 5.00 a gallon gas by developing the VOLTEC platform that will very soon be available in many GM vehicles besides the VOLT. This was developed by a company that promised it would become reality, even though they were in great financial distress, they still got the job done. The average worker will not use ANY fuel for a daily commute, but still has the flexability to drive across country without stopping should they desire !!, this is exciting news. So say hooray for ford , toyota, or whoever.........I say GREAT JOB GM !!!!!
      • 4 Years Ago
      Good. Put some of that in the pension fund gap, and about half towards getting the Caddy and Buick lines filled out.
        • 4 Years Ago
        John H., don't you mean us, the taxpayers? That's where the Feds got that money from.
        • 4 Years Ago
        BS profit if I ever saw one. I wonder what 20% interest looks like on 20 billion? Because thats the interest they should be paying on the loans, Chrysler pays on theirs and its the only thing holding them back from turning a full profit. (They have paid 1 billion in interest alone so far).

        Yet since the Govt is a majority stake holder in GM they dont pay any interest.
        • 4 Years Ago
        Forget the pension fund - they're the reason GM got in this mess in the first place. They can wait.

        Pay back the Feds first.
        • 4 Years Ago
        you really want to call BS? how about the $$$ the SALARIED employees will be getting that is for some reason not making it's way to the press. My sis in law works at GM, and is one 'grade level' away from being low-level management... she is getting $15,000.
        To compare, her exact same 'grade level' at Ford is getting between $3000-3500.

        to me, that is an absolute outrage. GM has no business paying that much, which means management level folks will be getting even more... silly money is how she put it to me.

        How can you still technically be 1/3 owned by the taxpayers, and pay this kind of money? It doesnt seem right.... when you look at the incentive action they've been taking on their vehicles in Jan/Feb, it makes you wonder if they learned anything.
        • 4 Years Ago
        More like get yourselves on a stronger financial footing because with +$100 a barrel oil there may be a storm coming and nobody is going to be willing to bail you out again.
      • 4 Years Ago
      Is $4.7bn profit on $135.6bn revenue considered good? As CEO of any company (not just GM) would I be happy with this figure? This isn't a facetious question. My maths isn't great and my business savvy is poor but 4.7 is less than 5% of 135.6. Is there an optimum net profit to revenue ratio that all companies strive to achieve?
        • 4 Years Ago
        The way I run my small business is that if I have any money left over after all the bills and operating expenses are paid each year, that money left over is considered "profit". I have to pay taxes. GM does not. So, how much of that profit is due to not having to pay taxes or preferential bail out boosts that do not have to be declared are deferred expenses, and other creative accounting issues? No doubt, if I did not have to pay taxes or received other preferential credits or exemptions, my "profits" would be at least ten times greater than what they are now. It's not how much you make. It's how much you get to keep. That applies equally across the board. Think how much better off Ford would be if it had received the same preferential tax exemptions and creative accounting measures GM is allowed to get away with.
        • 4 Years Ago
        It depends on the industry. There is no set "optimal" profit that can be achieved in business.
        Personally though, if I could be making nearly 5% profit a year after bankruptcy and being beaten down from many sides, I'd be happy. They are certainly on the right track to continue their gains for years to come.
      • 4 Years Ago
      The truth behind the profit at GM. Eliminate experienced people with higher wages and benefits. Bribe those that were not laid off with bonuses derived from the funds saved by the job cuts. What if GM had kept 40,000 people employed and reported an income of only $1.5 billion? (40,000 jobs X $80,000 cost = $3.2 billion). Imagine the positive impact on other jobs, tax receipts, real estate values, and local economies, not to mention families and futures. This proves again money is the root of all evil.
      • 4 Years Ago
      I suppose if I was a UAW member or a government bureaucrat, I'd be really impressed by this.

      But since I'm neither, I'm not.
      • 4 Years Ago
      This is good news and I am excited that the hourly workers will be getting a nice profit sharing check too. Regardless of all the political rhetoric, General Motors needed to be saved. I am just glad to see all the great products that have come out so far and the ones coming down the pipeline :)

      Ok, now it's time to read all the comments from the "government motors" crowd. Exciting!
      • 4 Years Ago
      So what about the $30 billion dollars in taxes that GM doesn't have to pay on its revenue. The taxpayers could really use it in the form of payments for the bailouts.

      Not going to happen though. If GM doesn't have to pay their taxes why do I?

      If GM had to pay its taxes they would have shown a massive loss. You gotta love creative accounting. Almost no fortune 500 company actually makes the money they say they do.
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