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GM Delays Annual Report Filing for Two Weeks

“Fresh Start” accounting requires a huge and time consuming restatement of values. Old GM results are irrelevant anyway.

by on Mar.29, 2010

It's the new numbers, not the old ones that matter.

General Motors Company is unable to file its Annual Report on Form 10-K for the fiscal year ended December 31, 2009, by March 31, 2010, as required by U.S. Security and Exchange Commission regulations.

The delay is because it is still finalizing so-called “fresh start” adjustments, as required by Generally Accepted Accounting Principles, GM said this morning.

Under GAAP, GM must restate the value of all the assets acquired and liabilities assumed from General Motors Corporation, or the “Old GM,” in connection with Old GM’s sale of assets to GM Company under Section 363 of the United States Bankruptcy Code.

A GM spokesperson told me that the filing should be finished sometime during the next two weeks. This is ultimately a non-news story, as the numbers of a now bankrupt GM corporation are irrelevant. Financial results for the new GM’s Q1 2010 are expected in May.

Daniel Ammann has been appointed GM vice president finance and treasurer.

Daniel Ammann is now GM's treasurer.

GM’s annual report is expected to depict breathtaking losses in 2009 of old GM, leading to the bankruptcy last year that was forced on it by President Obama and his advisers at the U.S. Treasury Department.

However, the restatement of values will likely increase the strength of the new Company’s balance sheet. This is a necessary prelude to a successful offering of public stock. (See GM Has a Chance of Being Profitable In 2010 by right clicking on it.)

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GM Has a Chance of Being Profitable In 2010

CFO says “anti-halo” effect biased Feds against finance staff.

by on Mar.17, 2010

Liddell drove a Ferrari California to work at Microsoft. Now he's in a Cadillac.

The new  Chief Financial Officer of General Motors Company, Chris Liddell, says the maker has  a “reasonable chance” of returning to profitability this year.

If it happens – this would end an earnings drought that has totaled $88 billion in losses from 2005 through last year’s first quarter.

Liddell, a New Zealander, came to GM after serving as Microsoft’s Chief Financial Officer since May of 2005.

His background is relatively diverse by Detroit standards, and includes a stint as CFO of International Paper Company. Prior to that, Liddell served as CEO of Carter Holt Harvey, which was, at the time, one of New Zealand’s largest publicly traded firms.

Liddell replaced Ray Young in January, who became GM’s vice president of international operations the next month. His immediate, 13-hour a day, job is pulling together “fresh start accounting,” for the loss-making and newly reorganized company.

This gargantuan task, Liddell says, will result in financial statements that are “thorough, structured and competent.” GM is also supplying regular reports to the U.S. government, and he is not sure if  this is more onerous than reports required from publicly traded companies.

Liddell observed, tongue firmly in cheek, that of all the options he was considering last fall when he was recruited,  including becoming the head of a company, GM was “the hardest job, with the least amount of pay and probably the toughest situation of all the ones I was looking at. But other than that the decision was an entirely rational one.”

GM raided Microsoft for its long-awaited new CFO.

Liddell’s compensation  package includes not only $750,000 in annual salary, but also nearly $5.5 million more in stock. Of course, that depends on GM pulling off  an initial public offering (IPO), which would list the company on a major exchange, allowing it to trade stock.

As to when publicly traded becomes applicable again, GM needs to be profitable to undertake an IPO, which is “possible in the second half,”  of 2010 said Liddell, who was meeting with media for the first time during a breakfast at GM headquarters in Detroit.

However, the affable Kiwi qualified his comments on IPO timing with carefully chosen observations that included the strength of GM vehicle sales and their future prospects at the time of the offering.

The strength of the financial markets and their ability to absorb what will be a large public offering of  the company are also big factors. GM is more than 60% owned by U.S. and Canadian taxpayers,

“I wouldn’t go further than possible… the timing has to be right,” Liddell says.

One area where Liddell did not hedge, though, was countering the claims by ex U.S. Treasury official, Steven Rattner,  who claimed that GM’s financial staff was incompetent. (Click Here.)   (more…)