GM News: GM Announces 2011 Results

[William Maley]

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William Maley

Editor/Reporter - CheersandGears.com

February 16, 2012

Today, General Motors announced their results for 2011 and forth quarter.

The company announced a profit of $7.6 billion for 2011, a large increase from the $4.7 billion profit in 2010.

However, forth quarter results were not as impressive. Net income for the forth quarter was only $472 million, or about the same as Q4 2010. While this makes it eight straight quarters of positive growth, the earnings were weighed down by losses of $562 million in Europe.

There were also a number of one-time events that affected earnings in the fourth quarter. Take those events out and GM says the profit would have been around $900 million.

Press Release is on Page 2

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GM Reports 2011 Net Income of $7.6 Billion

• Full-year EBIT-adjusted of $8.3 billion, up $1.3 billion from 2010
  
• Fourth quarter net income of $0.5 billion and EBIT-adjusted of $1.1 billion
  

DETROIT – General Motors Co. (NYSE: GM) today announced 2011 calendar-year net income attributable to common stockholders of $7.6 billion, or $4.58 per fully diluted share, up from $4.7 billion, or $2.89 per fully diluted share, in 2010.

Revenue increased 11 percent to $150.3 billion, compared with $135.6 billion in 2010. Full-year earnings before interest and tax (EBIT) adjusted was $8.3 billion, compared with $7.0 billion in 2010.

“In our first full year as a public company, we grew the top and bottom lines, advanced our global market share and made strategic investments in our brands around the world,” said Dan Akerson, chairman and CEO. “We will build on these results as we bring more new cars, crossovers and trucks to market, and make GM a far more efficient global team. This includes reducing our break-even level in Europe and South America and driving higher revenues around the world.”

Overview (in billions except for per share amounts)

Q4 2010

Q4 2011

Full-year 2010

Full-year 2011

Revenue

$36.9

$38.0

$135.6

$150.3

Net income attributable to common stockholders

$0.5

$0.5

$4.7

$7.6

Earnings per share

(EPS) fully diluted

$0.31

$0.28

$2.89

$4.58

Impact of special items on EPS fully diluted

$(0.21)

$(0.11)

$(0.14)

$0.70

EBIT-adjusted

$1.0

$1.1

$7.0

$8.3

Automotive net cash flow from operating activities

($1.7)

$1.2

$6.6

$7.4

Automotive

free cash flow

($2.

($0.9)

$2.4

$1.2

Fourth Quarter Results

Revenue in the fourth quarter of 2011 increased 3 percent to $38.0 billion, compared with the fourth quarter of 2010. GM’s fourth quarter 2011 net income attributable to common stockholders was $0.5 billion, or $0.28 per fully diluted share, including a net loss from special items of $0.2 billion or $0.11 per fully diluted share.

In the fourth quarter of 2010, GM’s net income attributable to common stockholders was $0.5 billion, or $0.31 per fully diluted share, including a net loss from special items of $0.4 billion or $0.21 per fully diluted share.

EBIT-adjusted was $1.1 billion in the fourth quarter of 2011, compared with $1.0 billion in the fourth quarter of 2010. Fourth quarter EBIT-adjusted for 2011 includes the impact of restructuring charges of $0.3 billion.

GM’s fourth quarter 2011 special items include impairment charges related to goodwill and GM’s investment in Ally Financial, and gains related to the Canadian Health Care Trust (HCT) settlement, the reversal of deferred tax asset valuation allowances in Australia and the extinguishment of debt.

Regional Results

• GM North America (GMNA) reported EBIT-adjusted of $1.5 billion in the fourth quarter of 2011 compared with $0.8 billion in 2010. Full-year EBIT-adjusted was $7.2 billion in 2011 compared with $5.7 billion in 2010. Based on GMNA’s 2011 financial performance, the company will pay profit sharing of up to $7,000 to approximately 47,500 eligible GM U.S. hourly employees. The full payout will be paid to employees who had 1,850 or more compensated hours in 2011.
  
• GM Europe (GME) reported an EBIT-adjusted loss of $0.6 billion in the fourth quarter of 2011, including $0.2 billion of restructuring costs, matching last year’s results. Full-year EBIT-adjusted was a loss of $0.7 billion in 2011, an improvement of $1.3 billion over 2010.
  
• GM International Operations (GMIO) reported EBIT-adjusted of $0.4 billion in the fourth quarter of 2011 compared with $0.3 billion in 2010. Full-year EBIT-adjusted was $1.9 billion in 2011 compared with $2.3 billion in 2010.
  
• GM South America (GMSA) reported an EBIT-adjusted loss of $0.2 billion in the fourth quarter of 2011, including $0.1 billion in restructuring costs, compared with EBIT-adjusted of $0.2 billion in 2010. Full-year EBIT-adjusted was a loss of $0.1 billion in 2011 compared with EBIT-adjusted of $0.8 billion in 2010.
  

Cash Flow and Liquidity

For the fourth quarter of 2011, automotive cash flow from operating activities was $1.2 billion and automotive free cash flow was $(0.9) billion, which includes the previously announced $0.8 billion contribution to the HCT.

GM ended the year with strong total automotive liquidity of $37.5 billion compared with $33.5 billion in 2010. Automotive cash and marketable securities was $31.6 billion compared with $27.6 billion at the end of 2010.

U.S. Pension Update

GM’s U.S. defined benefit pension plans earned asset returns of 11.1 percent in 2011. They ended the year 88 percent funded, largely unchanged from 89 percent funded a year ago.

The company also announced today that it is taking further steps toward its goals of de-risking and fully funding its U.S. pension plans. Effective Sept. 30, 2012, GM will freeze its defined benefit pension plan for U.S. salaried employees, who instead will receive contributions to a defined contribution plan, or 401(k). This initiative will affect GM's U.S. salaried employees hired prior to Jan. 1, 2001. Salaried employees hired after that date are already covered by a defined contribution plan.

2012 Outlook

Looking forward, GM expects to increase its top-line revenue year-over-year in an expanding global automotive industry. In addition, GM expects continued pricing improvement with cost inflation well contained, while product mix and pension expense are expected to be unfavorable.

Capital spending in 2012 is expected to be in the range of $8 billion as the company continues to aggressively invest in new products and technologies.

“We are executing an aggressive product plan that will give customers around the world even more reasons to purchase a General Motors vehicle,” said Dan Ammann, senior vice president and CFO. “Behind the scenes, we are working hard to eliminate complexity and cost throughout the organization to increase margins in all of our regions, and return Europe and South America to profitability. Overall, we have made good progress and we have more work to do.”

View full article

[G. David Felt]

Over all this is a glowing report. Yet the NEW GM has an ugly issue to deal with.

Socialist Europe and their Unions. GM is bleeding heavy and needs to cut their excessive manufacturing capacity and union costs.

This is the tip of the iceberg that all car companies in Europe will be facing as they go into a recession.

I fear that unless GM can get the Unions to cut their excessive benefits and pay and close unneeded assembly lines that they will be forced to decide if they want to just cut and run, IE close all plants and European companies or continue to fight and hope they can shrink their cost to get them inline with what the European union can handle for manufacturing capacity and reasonable costs.

I think the next 18 months are going to be very rocky for all Auto companies in Europe as they work through the excessive debt country by country and the bubbles that are popping all over.

Edited February 16, 2012 by dfelt

[hyperv6]

The key here is the globaliztion of GM. Lutz and Wagnoner did leave GM in good shape when it comes to their engineering and production of products. GM right now can build and produce nearly any car in any maket it needs to. GM no longer has to build a Cruze at one plant and send them everywhere.

Just look at the Regal it started in Europe and was easily moved to Canada. It also is being built in China.

GM is on he road to recovery but they have yet to complete the full road. There for sure is plenty to do but for once they are makeing progress in many areas that they never have before.

We will see a continued effort to revamp the entire line up of products and better placment of product to move Buick and Cadillac where they need to be. The ATS is the first of the all new product we have seen as the other cars were product they had ready before the chapter 11.

GM is moving to he 401 K system to stem the bleeding in the pensions.

They are working to update the dealer networks and customer service. I have seen more GM people on the forums than I have ever seen. They are offering help to those who have issues and questions. That was not how the old GM did it.

There is still more to come.

The only thing I worry about is the economy. RIght now the Euro issue is far from over and the chance of a attack in the middle east is not a matter of if but when. How will that effect oil prices long term and will it impact truck sales. GM does not need to get a new truck out and have oil prices spike again. We know how that went the last time.

And as pointed out above the union question remains. I suspect as long as the Democrates are in charge the unions will hold back on the companies. They know they can't make the elected officals that they paid to get elected look bad as they will get little in return if they lose their office.

A lot can happen but as of right now GM is doing what they needs and lets hope their luck holds out.

[daves87rs]

The key here is the globaliztion of GM. Lutz and Wagnoner did leave GM in good shape when it comes to their engineering and production of products. GM right now can build and produce nearly any car in any maket it needs to. GM no longer has to build a Cruze at one plant and send them everywhere.

Just look at the Regal it started in Europe and was easily moved to Canada. It also is being built in China.

GM is on he road to recovery but they have yet to complete the full road. There for sure is plenty to do but for once they are makeing progress in many areas that they never have before.

We will see a continued effort to revamp the entire line up of products and better placment of product to move Buick and Cadillac where they need to be. The ATS is the first of the all new product we have seen as the other cars were product they had ready before the chapter 11.

GM is moving to he 401 K system to stem the bleeding in the pensions.

They are working to update the dealer networks and customer service. I have seen more GM people on the forums than I have ever seen. They are offering help to those who have issues and questions. That was not how the old GM did it.

There is still more to come.

The only thing I worry about is the economy. RIght now the Euro issue is far from over and the chance of a attack in the middle east is not a matter of if but when. How will that effect oil prices long term and will it impact truck sales. GM does not need to get a new truck out and have oil prices spike again. We know how that went the last time.

And as pointed out above the union question remains. I suspect as long as the Democrates are in charge the unions will hold back on the companies. They know they can't make the elected officals that they paid to get elected look bad as they will get little in return if they lose their office.

A lot can happen but as of right now GM is doing what they needs and lets hope their luck holds out.

+1