Here’s GE’s third bullet point:
GE’s industrial tax rate averages well above 20% historically. In 2010, the tax rate for GE’s Industrial businesses was 17%, lower than historical levels due largely to settlements in routine tax audits that reduced our rate by almost 5 points. Excluding the benefit from audit resolutions for previously booked taxes, and restructuring and environmental charges, GE’s Industrial tax rate would have been about 23% — in line with historical averages
Again, this appears to be GE’s global industrial tax rate, not its U.S. one (I’d tell you for sure, but GE has not answered directly when I’ve asked). And it again excludes GE Capital, which was the focus of the Times story. Next:
GE’s tax rate will be higher in 2011. In 2011, we expect a higher tax rate as GE Capital continues to recover, the one-time factors that reduced 2010 are not expected to repeat, and because we expect higher taxes on the sale of NBCU.
That doesn’t have much of anything to do with the Times’s story. Then there’s this:
GE paid almost $2.7 billion in cash taxes in 2010 on a consolidated basis (almost 19% of pretax income from continuing operations).
There they go again. Those cash taxes are how much GE paid globally, not in the U.S. Here’s its cashflow statement on Google Finance, if you want to check it out yourself.
Finally, in the sixth bullet point, GE gets around to responding to the Times on U.S. taxes.
GE paid significant U.S. income tax in 2010 and in total from 2006-2010. Over the past 10 years, GE has paid almost $23 billion of corporate income taxes to governments around the world, making it one of the highest payers of corporate income taxes. As disclosed in the cash flow statements of the 10-K, we paid over $14 billion of income taxes to governments around the world over the past 5 years.
Note how, despite, all the detail we got above on its global consolidated tax rate, the amount of cash the whole company paid—and even what its tax rate would be if you exclude the third of the company that is GE Capital—we get no numbers for U.S. taxes. Meantime, we get a $23 billion number for the amount GE paid globally over 10 years.
Sure, $23 billion is a big number in isolation. But GE has made $159 billion in net profits over the last decade, which would make its global income tax rate just 14 percent, assuming that the $23 billion figure they’re pushing is a net number—a big assumption, as we’ve seen.
More to the point, the fact that GE says it “paid significant U.S. income tax in 2010” can’t be reconciled with the Times report, which said GE’s tax rate was net negative. Either GE is misleading on a technicality (like, say, that it did paid withholding taxes but willl get them refunded) or the Times is wrong. This isn’t a jump ball. I asked GE multiple times to comment on whether the Times was wrong and it declined to answer directly. Until GE requests a correction from the Times or says publicly that it’s wrong, we’re going to assume the paper is correct.
It’s also worth noting that GE spokeswoman Anne Eisele left this comment on Henry Blodget’s post trying to figure out the GE/NYT spat:
We’ve already paid some and we expect a positive U.S. federal tax liability for 2010 when we complete our U.S. income tax filing later this year.
Eisele’s comment led Blodget to declare victory for GE. He reversed course shortly later in an update:
…the NYT sent us an AFP article in which GE spokesperson Anne Eisele—the same spokesperson who wrote the comment below—said the following: “GE did not pay US federal taxes last year because we did not owe any.”