Monday, December 11, 2017

Trump Tax Bill Forgives a Substantial Amount of Debt of Foreign Corporations With US Subsidiaries

The Trump Tax Bill doesn't just forgive the debts of US Corps, but also forgives the debt of US Corp Subsidiaries of Foreign Corporations.

How big a deal is this?

Well, it's huge.

Just think of all of these Foreign Corporations which have purchased US Companies.  These acquisitions have been growing like flies and a lot of them are Manufacturing Companies, which get substantial debt forgiveness with the Trump Tax Bill due to their large Deferred Income Tax Liabilities caused by their huge amount of Property Plant and Equipment which have tons of US accelerated tax depreciation.

But it's not just US Manufacturing Corp Subsidiaries of Foreign Corps getting this huge amount of debt forgiveness with the Trump Tax Bill.

I did a very quick review of Foreign Corps filing their US Subsidiary financial statements with the US SEC.

Two quickly appeared that are familiar with a large number of US Citizens.

American Honda Finance Corp headquartered in Torrance, California had on its balance sheet US$35.9 Bil of Finance Receivables and another US$31.3 Bil in Investment in Operating Leases, both at March 31, 2017.  Because of very favorable US tax rules on Leasing, American Honda Finance Corp had U$8.8 Bil of Deferred Income Tax Liabilities.  And a review of its income taxation footnote revealed that the portion of this Deferred Income Tax Liability related to Leasing totalled US$9.2 Bil.  Whew!

Similarly, Toyota Motor Credit Corp headquartered in Plano, Texas had on its balance sheet US$68.5 Bil of Finance Receivables and another US$38.2 Bil in Investment in Operating Leases, both at March 31, 2017.  Also because of very favorable US tax rules on Leasing, Toyota Motor Credit Corp had U$7.9 Bil of Deferred Income Tax Liabilities.  And a review of its income taxation footnote revealed that the portion of this Deferred Income Tax Liability related to Leasing totals US$7.6 Bil.  Another Whew!

I have to wonder what General Motors and Ford Motor think about the fairness of both America Honda Finance Corp and Toyota Motor Credit Corp getting billions of dollars of their debt forgiven due to the Trump Tax Bill when at the same time, General Motors and Ford Motor both have to write down their Deferred Income Tax Assets by billions of dollars due to the same Trump Tax Bill?

Sunday, December 10, 2017

Trump Tax Bill Overwhelmingly Favors US Non-Technology Companies Over US Technology Companies ...................................................................................... It's Clearly a Viciously Vindictive Attack on the Younger US Technology Industry and on Millennials ...................................................................................... US Corp Individual Net Deferred Income Tax Liabilities Drive the Massive Trump Tax Bill Debt Forgiveness and Also Drive the Resultant 4Q 2017 Huge Regular US GAAP Earnings Increases ...................................................................................... There Were Only 9 US Technology Companies With Stock Market Caps Above $40 Bil With Net Deferred Income Tax Liabilities Which Totalled $47.5 Bil in Their Most Recent Annual Report SEC Filing and That Was All Due to the Unremitted Foreign Earnings of Apple and Broadcom: Also, There Were 17 Largest US Techs With Net Deferred Income Tax Assets, Which Drive 4Q 2017 Earnings Declines ...................................................................................... On the Other Hand, There Were 75 US Non-Technology Companies With Stock Market Caps Above $40 Bil With Net Deferred Income Tax Liabilities Which Totalled a Massive $613 Bil in Their Most Recent Annual Report SEC Filing ...................................................................................... And This More Than a $1 Trillion of Immediate Debt Forgiveness When Donald Trump Signs This Tax Bill Does Nothing to Stimulate the US Economy, Instead It Just Rewards Companies For Past Actions: It is Clearly Just a Throw Away of US Taxpayer Money ...................................................................................... US Corps With Stock Market Caps Below $40 Bil Show Even Much More Pronounced Net Deferred Income Tax Liabilities Gaps, Thus Also Much Higher US Corp Debt Forgiveness Gaps and Also Much Higher US Corp 4Q 2017 Earnings Gaps Between the US Techs and the US Non-Techs: My Preliminary Amounts Here Should Make Millennials Angry

From a review of income tax and other footnotes in their most recent audited annual financial statements in their SEC filings, below here are the audited Net Deferred Income Tax (Liabilities) Assets mostly at December 31, 2016, along with other related income tax disclosures for the 26 largest US Technology Companies and the 119 largest US Non-Technology Companies with stock market caps above $40 Bil recently.



Deferred  Deferred  Deferred 


Net Income Income Income


Deferred  Tax  Tax  Tax 


Income (Liabilities) Assets Assets


Tax  Related To Related To Related To


Assets Unremitted Pensions & Unused


(Liabilities) Earnings of Other Post Tax 
US Technology Companies State Mostly Foreign Retirement Credits
Stock Market Caps Above $40 Bil HQs 12-31-16 Subs Benefits C/Fs


bils $s bils $s bils $s bils $s
Cos With Net Deferred Income Tax Liabilities




Apple CA          (27.588)          (36.355)

Broadcom CA            (9.979)          (10.954)

Visa CA            (5.899)


Paypal CA            (1.194)            (1.246)

salesforce.com CA            (0.907)

         0.241
Intel CA            (0.823)


Priceline Group CT            (0.799)


Adobe Systems CA            (0.218)            (0.293)
         0.063
Nvidia CA            (0.134)            (0.827)
         0.728






Total all 9
         (47.541)          (49.675)                    -            1.032






Cos With Net Deferred Income Tax Assets




Alphabet CA              0.062            (3.468)
         0.503
Amazon WA              0.082

         0.041
Intuit CA              0.125


Mastercard NY              0.226

         0.041
Netflix CA              0.227

         0.107
Activision Blizzard CA              0.239

         0.071
Texas Instruments TX              0.341                    -                0.082
Applied Materials CA              0.371            (0.042)

Cognizant Technology NJ              0.419

         0.274
VMware CA              0.462


Micron Technology ID              0.749            (0.123)

Facebook CA              0.854            (0.357)
         0.268
Microsoft WA              1.881            (1.107)

Accenture IL              2.078
             0.295          1.420
Qualcomm CA              2.667

         1.798
Cisco Systems CA              3.968


IBM NY              4.799
             4.265






Total all 17
           19.550            (5.097)              4.642          4.523






Total all 26 US Techs With Market Caps > $40 Bil
         (27.991)          (54.772)              4.642          5.555








Deferred  Deferred  Deferred 


Net Income Income Income Deferred 


Deferred  Tax  Tax  Tax  Income


Income (Liabilities) Assets Assets Tax 


Tax  Related To Related To Related To (Liabilities)


Assets Unremitted Pensions & Unused Related To


(Liabilities) Earnings of Other Post Tax  Unrealized
US Non-Technology Companies State Mostly Foreign Retirement Credits Investsment
Stock Market Caps Above $40 Bil HQs 12-31-16 Subs Benefits C/Fs Appreciation


bils $s bils $s bils $s bils $s bils $s
Cos With Net Deferred Income Tax Liabilities





Berkshire Hathaway NE          (76.959)


      (27.669)
AT&T TX          (58.717)
                   -  

Verizon NY          (45.964)



Comcast PA          (34.813)



Pfizer NY          (30.099)          (23.108)              3.282

Exxon Mobil TX          (29.921)
             6.053

Charter Communications CT          (26.665)



Kraft Heinz PA          (20.795)
             1.025

Exelon Corp IL          (17.457)                    -                2.287          0.446                -  
Union Pacific NE          (15.996)
             0.222          0.145
Duke Energy NC          (14.155)
             0.561          3.153
Southern Co GA          (14.092)
             1.131          1.974
Chevron CA          (12.867)
             4.392        10.970
Allergan NJ          (12.736)



Prudential Financial NJ          (10.795)            (0.380)

      (10.551)
Next Era Energy FL          (10.640)
           (0.309)          3.059
Reynolds America NC            (9.607)
             0.759

CSX Corp FL            (9.596)
             0.125

Metlife NY            (9.367)
                   -            1.574
Dominion Energy VA            (8.554)
             0.087          1.087
ConocoPhillips TX            (8.549)
             1.280

Altria Group VA            (8.064)
             1.282

CME Group IL            (7.291)



Wells Fargo CA            (7.051)



AbbVie IL            (6.665)
             0.665

Phillips 66 TX            (6.651)
                   -            0.148
Procter & Gamble OH            (6.104)
             1.775

EOG Resources TX            (5.012)            (0.280)
         0.758
T-Mobile US WA            (4.938)

         0.284
BlackRock NY            (4.820)

         0.118
Merck NJ            (4.531)            (2.044)              0.727

PepsiCo NY            (4.434)
             0.735

Mondelez Intl IL            (4.363)
             0.584

Walt Disney CA            (4.311)



CVS Health RI            (4.214)
             0.065

Coca Cola GA            (4.039)
             1.112

Freeport-McMoran AZ            (3.765)            (0.779)              0.403          2.538
InterContinental Exchange GA            (2.954)
             0.089          0.064                -  
Danaher DC            (2.852)
             0.392

Bank of NY Mellon NY            (2.851)



Anthem IN            (2.780)
             0.096

Wal-Mart AR            (2.768)



UnitedHealth Group MN            (2.761)



Time Warner NY            (2.553)



Amgen CA            (2.383)



PNC Financial PA            (2.366)



Walgreens Boots Alliance IL            (2.274)
             0.134

Thermo Fisher Scientific MA            (2.175)            (0.156)


LyondellBasell Industries TX            (2.139)



Schlumberger TX            (1.880)



FedEx TN            (1.810)



Medtronic MN            (1.631)
             0.456

Occidental Petroleum TX            (1.132)
             0.342          2.458
Constellation Brands NY            (1.132)            (0.229)


Phillip Morris NY            (1.038)            (0.636)              0.543

Praxair CT            (1.024)
             0.352

Boeing WA            (1.006)
           10.878

Chubb Ltd PA            (0.988)            (2.001)
         2.115
Marriott MD            (0.904)

         0.079
McDonalds IL            (0.828)



Becton Dickinson NJ            (0.776)



American Tower MA            (0.582)



Biogen MA            (0.490)

         0.201
US Bancorp MN            (0.479)
             0.394

TJX Cos MA            (0.308)            (0.214)


Kimberly Clark TX            (0.298)
             0.499

Eli Lilly IN            (0.216)            (0.674)              0.861          0.459
JPMorgan Chase NY            (0.205)
             2.911

Home Depot GA            (0.205)



Las Vegas Sands NV            (0.200)

         3.953
Honeywell NJ            (0.139)
             0.673

Automatic Data Processing NJ            (0.070)
           (0.125)          0.050
Costco WA            (0.058)

         0.036
United Technologies CT            (0.035)
             2.382          0.873
Aetna CT            (0.004)
             0.196








Total all 75
       (612.891)          (30.501)            49.316        36.542       (38.220)







Simon Property Group IN                    -  



Carnival FL                    -  










Cos With Net Deferred Income Tax Assets





S&P Global NY              0.013
             0.105

Tesla CA              0.026

         0.315
Crown Castle TX              0.036



General Dynamics VA              0.037
             1.461

Colgate-Palmolive NY              0.055
             0.599

Boston Scientific MA              0.062



Celgene NJ              0.138            (0.317)
         0.014
Charles Schwab CA              0.143



Intuitive Surgical CA              0.150

         0.016                -  
Lowe's NC              0.200



Stryker MI              0.247            (0.050)


3M MN              0.277
             1.217

Cigna CT              0.304
             0.481

Illinois Tool Works IL              0.315
             0.025          0.006
Estee Lauder NY              0.322
             0.124

Monsanto MO              0.372



United Parcel Service GA              0.479
             4.236

Raytheon MA              0.746
             2.477

Starbucks WA              0.789



Regeneron Pharmaceuticals NY              0.825



Marsh & McLennan NY              0.897
             0.629

Nike OR              1.024              0.173
         0.208
Gilead Sciences CA              1.255

         0.147
Northrop Grumman VA              1.462
             2.814

Abbott Labs IL              1.670



General Electric MA              1.833
           15.193

Dow Chemical MI              2.156
             3.640

American Express NY              2.255



Caterpillar IL              2.446            (0.285)              3.205

Deere & Co IL              2.798            (0.030)              2.897

DuPont DE              2.877
             4.119

Bristol-Myers Squibb NY              2.949
             0.358

Johnson & Johnson NJ              3.238
             2.958

Goldman Sachs NY              3.680
             0.757

Capital One Financial VA              4.310



Morgan Stanley NY              4.767



Lockheed Martin MD              6.589
             5.499

Ford Motor MI            11.007
             6.620          6.456
Bank of America NC            19.226
             2.677          3.125
American Intl Group NY            20.712

         4.917
General Motors MI            34.588
             8.421

Citigroup NY            46.668              9.311              3.798        14.200







Total all 42
         183.943              8.802            74.310        29.404                -  







Total all 119 US Non-Techs With Market Caps > $40 Bil
       (428.948)          (21.699)          123.626        65.946       (38.220)