Bank of America said its tax provision for the fourth quarter of 2011 was $441 million, giving it an effective tax rate of 18.13%. This rate included tax benefits from net reductions in a deferred tax asset valuation allowance and tax reserves. These benefits were partially offset by the impact of a goodwill impairment charge for the quarter of $581 million, which was non-deductible.
Goldman Sachs’s ETR for 2011 went down to 28% from 35.2% in 2010. This was because of an increase in permanent benefits as part of its earnings. Its net income in 2011 was $4.4 billion as against $8.4 billion in 2010
The bank added that, in fact, its ETR in 2010 was 32.7% after the largely non-deductible payments of $465 million for the UK bank payroll tax and $550 million paid over in a SEC settlement were disregarded.
“The effective income tax rate excluding the impact of these items is a non-GAAP measure and may not be comparable to similar non-GAAP measures used by other companies,” the bank said.
Morgan Stanley reported that its ETR for 2011 was 31.5% compared with 28.1% in 2010. This was because its “geographic mix of earnings” changed during the year. Its net income was about $4.2 billion in 2011 and $4.5 billion the year before.
“The income tax provision/(benefit) from continuing operations included discrete tax gains of approximately $500 million and $1 billion for the years ended December 31, 2011 and December 31, 2010, respectively,” the bank said.
BlackRock, the asset management firm, saw its tax rate for 2011 decrease to 25.4%, from 32% the year before. It paid $232 million in tax for the fourth quarter of 2011, or an ETR of 29.5%, down from $309 million – also a tax rate of 32%. Its net income went up from $2.063 billion in 2010 to $2.337 billion last year
The firm’s ETR of 13.7% for the third quarter of 2011 shows an even more striking difference with the fourth quarter.
“Fourth quarter 2011 included $20 million of non-cash benefits associated with revaluation of certain deferred tax liabilities primarily due to tax legislation enacted in Japan, which have been excluded from the as adjusted results,” the firm said. “The third quarter 2011 GAAP tax rate included a $129 million non-cash benefit due to tax legislation enacted in the UK and a state tax election.”
Google’s ETR for the fourth quarter of 2011 was 22%, compared to 19% for the same period in 2010. Its net income was $2.71 billion for the quarter, compared to $2.54 billion in the last quarter of 2010.
A report from the Georgia Tech Financial Analysis Lab at the end of last year found that few companies give details about their tax planning strategies in their financial statements, even though analysts, investors and others would probably find this information helpful.
