General Motors Co., for its first full year of operations, posted $4.7 billion in net income attributable to common stockholders for calendar year 2010. While GM posted $135.6 billion in revenue for the year, its automotive cash flow from operating activities was $6.6 billion and automotive free cash flow was $2.4 billion, which signifies the effect of a $4.0 billion in voluntary cash contributions to the carmaker’s pension plans in the United States.
GM chairman and chief executive Dan Akerson quipped that 2010 was a foundation building year, during which GM demonstrated its ability to achieve sustainable profitability – by posting four straight profitable quarters – even though the US auto industry is currently near bottom of the cycle.
For the fourth quarter of 2010, GM posted $0.5 billion in net income attributable to common stockholders, including net charges of $0.4 billion. This translates to a $0.21 reduction to fully diluted earnings per share, resulting from a previously disclosed $0.7 billion loss emanating from the purchase of US Treasury (UST) preferred shares but partially offset by the impact of EBIT adjustments.
However, GM logged around $0.3 billion in favorable EBIT adjustments, including $0.2 billion in gains relating to the repayment of the VEBA Note as well as $0.1 billion in cumulative gains relating to the sale of Nexteer and the acquisition of the facility in Strasbourg, France. Meanwhile, GM North America (GMNA) posted $0.8 billion in EBIT in the fourth quarter of 2010, rebounding from $3.4 billion in losses in the same period in 2009.
GM Europe (GME), on the other hand, logged $0.6 billion in fourth quarter 2010 losses before interest and taxes, which is better than $0.8 billion in losses in the same quarter a year ago. On the other hand, GM International Operations (GMIO) recorded $0.3 billion in EBIT in the fourth quarter of 2010, a drop from $0.4 billion in the same period a year prior 2009.
GM South America (GMSA) also posted a drop in fourth quarter EBIT from $0.3 billion to of $0.2 billion. GM commenced reporting GMSA results as an operating segment in the fourth quarter, and has adjusted segment reporting for prior periods. Meanwhile, GM’s automotive net cash flow from operating activities in the quarter was negative $1.7 billion, reflecting $4.0 billion in voluntary cash contribution to the US pension plans.
After subtracting $1.1 billion in capital expenditures, automotive free cash flow was pegged at negative $2.8 billion. GM’s fiscal performance in 2010 has prompted the company to decide to pay profit sharing to around 45,000 eligible GM US hourly employees at average payout per employee of $4,300, and around 3,000 eligible GM Components Holdings (GMCH) employees at average payout per employee of $3,200.
On the other hand, GM has completed assessment of the remediation actions taken to address its material weakness regarding the financial reporting process. Following the assessment, GM’s management team and Audit Committee of the Board of Directors concluded that such material weakness has ceased to exist as of December 31, 2010.
GM vice chairman and chief financial officer Chris Liddell remarked that for 2011, the company’s focus is to build on its progress and continue generating momentum in the auto market. Liddell quipped that GM hopes to have a strong start in the first quarter of the year.