5. The Hartford Financial Services Group, Inc.
> Income tax expense: -$494 million
> Earnings before taxes: -$527 million
> Revenue: $26.4 billion
> 1-yr. share price change: +48.9%
> Industry: Insurance
The Hartford is one of the nation’s largest property and casualty insurance companies in the U.S., and it traces its history back to 1810, when current subsidiary, Hartford Fire Insurance Company, was founded. In fiscal 2012, the company lost more than $500 million before taxes. The combination of tax breaks from past operating losses, in conjunction with the company’s continued weak bottom line, helped The Hartford avoid an income tax expense. Yet, although it recorded an income tax benefit of $494 million, after accounting for discontinued operations and preferred shareholders, stock owners were left with a loss of $80 million — or $0.17 per share.
4. AMR Corporation
> Income tax expense: -$569 million
> Earnings before taxes: -$2.4 billion
> Revenue: $24.9 billion
> 1-yr. share price change: n/a
> Industry: Airlines
AMR Corporation, the former holding company for American Airlines, filed for Chapter 11 bankruptcy in 2011. In 2012, AMR reported a loss of nearly $2.5 billion before taxes. Not surprisingly, the company owed no taxes to the government, receiving a benefit of nearly $570 million. At the end of 2013, AMR received approval from a judge to exit bankruptcy through its merger with U.S. Airways. The new company, American Airlines Group, Inc, has just started the process of integrating services between the two airlines.
3. Verizon Communications Inc.
> Income tax expense: -$660 million
> Earnings before taxes: $9.9 billion
> Revenue: $115.8 billion
> 1-yr. share price change: +10.29%
> Industry: Telecommunications
Although Verizon recorded a $660 million tax benefit, the company has contended it is untrue that it does not pay taxes. Strictly speaking, the company is correct: in its most recent fiscal year it paid roughly $3.4 billion in cash taxes, although most of this was in property and payroll taxes, not in income taxes. The company’s earnings — and possibly its tax bill — would have potentially been higher in past years had it not had to pay Vodafone, former 45% owner of Verizon Wireless, $9.7 billion of its $10.6 billion fiscal 2012 profits. After Verizon bought the rest of Verizon Wireless for $130 billion, the U.K. -based company faced a tax controversy of its own. It was reported that, since its stake was held by a Dutch subsidiary, it would not pay any taxes in Britain.
2. Bank of America Corporation
> Income tax expense: -$1.1 billion
> Earnings before taxes: $3.1 billion
> Revenue: $75.2 billion
> 1-yr. share price change: +38.6%
> Industry: Banking
Bank of America reported more than $3 billion in income before taxes in its most recent fiscal year. However, the banking giant received a tax benefit of more than $1.1 billion that year. Helping the company save money were a combination of tax-exempt income, U.S. tax credits and, especially, a whopping $1.7 billion in foreign tax credits received by the bank. Overall, Bank of America’s shares are up over 36% in the last 12 months, as the company pursues its goals to cut costs and leave its legal problems behind. While the company is still liable for some actions committed by home lender Countrywide Financial, it appears the largest fines incurred through its acquisition of the troubled mortgage lender may be in the past.
1. General Motors Company
> Income tax expense: -$34.8 billion
> Earnings before taxes: -$28.7 billion
> Revenue: $152.3 billion
> 1-yr. share price change: +38.1%
> Industry: Automobile manufacturing
General Motors received bailouts from the U.S. government totaling some $50.7 billion in 2008 and 2009, more than any other company except for Fannie Mae, Freddie Mac, and AIG, according to ProPublica. In fiscal 2012, the carmaker lost $28.7 billion before taxes were considered. Much of the loss was the result of one-time charges the company took as part of its broad overhaul of its global businesses. In all, GM reported a nearly $35 billion tax benefit for the fiscal year. The company, which emerged from bankruptcy in 2009, continues to recover and improve its business. In 2014, the federal government sold its last remaining GM shares, and the automaker appointed longtime employee Mary Barra as CEO.