General Motors posts $898M net profit in 4Q
In the fourth quarter, GM returned roughly $35 billion in U.S. and Canadian tax credits to its books. Under accounting rules, the company must book the credits because it's likely to use them to offset income taxes. GM has been solidly in the black for three years. But the gain largely was offset by removal of goodwill, devaluation of assets in Europe, the cost of shifting its white-collar pension plan to an insurance company annuity and the cost of buying back $5.5 billion worth of shares from the U.S. government.
Still, putting the tax credits back on the books was good news for the company because it's a sign of good prospects, Chief Financial Officer Dan Ammann said.
"We've established a clear track record of profitability over the last three years,'' he said. ``It's a reflection of our confidence in the fact that we're going to generate significant profitability in the North American market going forward.''
But the change means that GM will return to a 35 percent tax rate, up from the mid-teens last year. It still won't pay U.S. federal income taxes for many years due to the write-offs.
GM also announced that its union workers would each get $6,750 in profit-sharing checks next month because of the strong performance in North America. In
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