With the horrible jobless recovery, Illinois financial coffers are severely suffering, as are many State citizens in Illinois.
However, I think it would be wise to get an update on how Illinois Big Corps have fared very recently, so we can better assess where Illinois Big Corps stand now financially, as compared with the present financial status of Illinois citizens.
With this update, I think we can get a better insight on what should constitute a fair sharing of the financial burden to balance the State Budget between Illinois Big Corps and Illinois citizens. And frankly, Big Corps outside of Illinois, including foreign-owned Big Corps, that do business in Illinois, should also be included in this mix of a fair sharing of this very expensive financial burden to balance the State Budget of Illinois.
Let me show you below just how Illinois' 38 largest publicly-held Corps did as was disclosed in either their most recent annual Fiscal Year Ended (FYE) 2010 earnings releases or in their most recent SEC annual report filings:
Illinois 38 Largest Publicly-Held Corps Most Recent Annual Pretax Earnings (PTI)
...................................................................................Increase....
.........................................FYE.....PTI(L).....PTI(L)....(Decrease)...
Illinois Big Corp..............2010......2010......2009.....Amount...%..
.......................................................(millions of dollars)......
McDonalds……………….......Dec…...7,000.....6,487........513.......8%
Abbott Labs(1)………….......Dec…...6,027.....6,279.......(252)...(4)%
Exelon…………………...........Dec…...4,221......4,419.......(198)....(4)%
Caterpillar………………........Dec…...3,750........569......3,181...559%
Kraft Foods…………….........Dec…...3,642.....3,946........(304)...(8)%
Walgreens………………........Aug…...3,373.....3,164.........209.......7%
Deere(2)…………………........Oct…...3,025.....1,628.......1,397.....86%
Accenture plc…………........Aug…..2,914.....2,678.........236.......9%
ArcherDanielsMidland(3).Jun…...2,544.....1,698.........846......50%
Baxter(4)……………….........Dec…...2,478.....2,734........(256)...(9)%
Illinois Tool Works(5)…....Dec…...2,212.....1,320.........892......68%
State Farm Insurance(6)...Dec…...1,800.......777......1,023....132%
CME Group……………..........Dec…...1,722.....1,438........284.....20%
Discover Fincl Svcs(7)......Nov…...1,269.......229......1,040....454%
Allstate…………………….......Dec…...1,126.....1,248........(122)..(10)%
CNA Financial…………........Dec…...1,112........540........572....106%
AON……………………............Dec…...1,059.......949.........110......12%
Northern Trust………….......Dec….....990.....1,255.......(265)...(21)%
WW Grainger……………........Dec….....854.......707........147.......21%
Sara Lee(8)………………........Jun….....795.......672.........123......18%
CF Industries…………….......Dec….....688........696...........(8).....(1)%
Motorola Solutions…….......Dec…....677......(503)......1,180...235%
Fortune Brands………….......Dec….....588.......283.........305....108%
CNH Global NV………..........Dec….....416.......(93).........509....547%
Devry……………………..........Jun….....413........237.........176.....74%
Hospira…………………..........Dec….....392........385............7.......2%
Integrys Energy(9)…….......Dec….....372.......304..........68......22%
RR Donnelley…………..........Dec….....323.........93........230.....247%
Nalco Holding………….........Dec….....305.......136........169.....124%
Navistar Intl……………........Oct…......290.......359........(69)....(19)%
Telephone&DataSyst….......Dec….....281........381.......(100)...(26)%
United Continental…….......Dec….....250......(672).......922....137%
United States Cellular….....Dec…......235.......345.......(110)...(32)%
Sears Holding…………......Jan 11.......186........420......(234)....(56)%
Old Republic…………..........Dec….......28.......(274).......302.....110%
Motorola Mobility………....Dec….......(4)....(1,335)......1,331...100%
Brunswick………………........Dec…......(85)......(685)........600.....88%
USG……………………............Dec….....(439).......337......(776)...230%
Total of 38 IL Big Corps...............56,829...43,151...13,678....32%
(1) Abbott Labs PTI excludes In Process R&D Charges in both 2010 and 2009, and also excludes large Gain on Derecognition of Contingent Liability and Litigation Gain, both in 2009.
(2) Deere 2009 PTI excludes Goodwill lmpairment Charge.
(3) ArcherDanielsMidland numbers are for the 12 months ended December.
(4) Baxter 2010 PTI excludes large Infusion Pump Charge.
(5) Illinois Tool Works 2009 PTI excludes Goodwill Impairment Charge.
(6) State Farm Insurance is a Mutual Company. Its Earnings numbers used here are its Net Income.
(7) Discover Financial Services 2009 PTI excludes huge Litigation Settlement Gain.
(8) Sara Lee 2009 PTI excludes Asset Impairment Charges.
(9) Integrys Energy 2009 PTI excludes Goodwill Impairment Charge.
Yeah, Illinois' 38 largest Corps registered a very strong 32% increase in Total Pretax Income, which was up $13.7 bil in 2010 to $56.8 bil.
I think it is helpful to see how these Illinois Big Corps have weathered the Great Recession.
Below here is the Pretax Income for each of these Illinois Big Corps for each of the past 5 years. I have excluded both large In Process R&D Charges and large Asset Impairment Charges in deriving Pretax Income. There are 37 Corps because I combined Motorola Mobility and Mobility Solutions together.
......................................................Pretax Income(Loss).............
.........................................2010...2009.....2008.....2007....2006
.......................................(all amounts are in millions of dollars)
All Big Corps But Ppty/Casualty Insurance Cos
McDonalds...................7,000...6,487...6,158....5,242...4,154
Abbott Labs....................6,027....6,279....5,856....4,470....4,290
Exelon.............................4,221....4,419....4,034....4,172....3,572
Caterpillar.......................3,750......569....4,501....4,953....4,861
Kraft Foods.....................3,642....3,946....2,336....3,362....4,068
Walgreens.......................3,373....3,164....3,430....3,189....2,754
Deere..............................3,025....1,628....3,125....2,676....2,174
Accenture plc.................2,914....2,678....3,108....2,619....1,924
ArcherDanielsMidland....2,544....1,698....2,594....3,154....1,855
Baxter.............................2,478...2,734....2,462....2,114....1,746
Illinois Tool Works..........2,212....1,320....2,352....2,405....2,214
CME Group...................1,722...1,438...1,248....1,096......672
Discover Fincl Svcs.........1,269.......229......794....1,526....1,668
AON................................1,059.......949......879....1,010......728
Northern Trust..................990....1,255....1,276....1,061....1,024
WW Grainger.....................854.......707......773......682.......603
Sara Lee............................795.......672......695......429........189
CF Industries....................688.......696....1,175......626.........66
Motorola..........................673...(1,838).(3,156)....(376)...4,610
Fortune Brands.................588.......283......974....1,120....1,179
CNH Global NV.................416.......(93)....1,156......830.......417
Devry..............................413.......237......172.....105........57
Hospira.............................392.......385......408......188.......325
Integrys Energy.................372......304......176.....267.......197
RR Donnelley.....................323.......93........856.....843.......601
Nalco Holding....................305......136.......264.....207......166
Navistar Intl......................290......359.......549.....(73)......395
Telephone&DataSystems....281......381.......566......685.......323
United Continental.............250....(672)..(3,150)....695.......(45)
United States Cellular.........235......345......453......547.......313
Sears Holding.....................186......420......486....1,452....2,471
Old Republic........................28....(274).....(819).....378......680
Brunswick..........................(85)...(685).....(121)........93......310
USG..................................(439).....337....(355)........88......490
Total All Big Corps But
..Non-Ppty/Cas Ins Cos.52,791..40,586..45,255..51,835..51,051
Property/Casualty Insurance Cos
State Farm Insurance.......1,800......777.....(542)...5,460....5,320
Allstate............................1,126....1,248...(3,025)...6,653....7,178
CNA Financial..................1,112.......540.....(562)....1,222....1,650
Total Property/Casualty
..Insurance Cos...............4,038...2,565..(4,129)..13,335..14,148
Total all 37 Big Corps...56,829..43,151...41,126...65,170...65,199
As you can see in the Total columns just above, here is the five-year Total Annual Pretax Income, as well as the Annual Percentage Change from the immediately preceding year, for these 37 Illinois Big Corps.
.....2006 Pretax Income...$65.2 bil
.....2007 Pretax Income...$65.2 bil...Precisely Even
.....2008 Pretax Income...$41.1 bil...Down a Staggering 37%
.....2009 Pretax Income...$43.2 bil...Up 5%
.....2010 Pretax Income...$56.8 bil...Up 32%
So yeah, Illinois Big Corps were just crushed in 2008. And they still haven't recovered from 2006 and 2007. In fact, their Total Earnings in 2010 of $56.8 bil are $8.4 bil below that earned in both of their 2006 and 2007 peak earnings years of $65.2 bil.
But you need to analyze this further, because there is a major cause of the massive 37% profit decline in 2008, at the peak of the Great Recession.
It's the large Property and Casualty Insurance Corps. Illinois has three: Allstate, State Farm Insurance and CNA Financial.
Let me lay out the annual Total Pretax Income numbers and Percentage Changes from the immediately preceding year again, but this time I will remove the three Big Property and Casualty Insurance Companies.
.....2006 Pretax Income...$51.1 bil
.....2007 Pretax Income...$51.8 bil...Up 2%
.....2008 Pretax Income...$45.3 bil...Down by a much less 13%
.....2009 Pretax Income...$40.6 bil...Down 10%
.....2010 Pretax Income...$52.8 bil...Up 30%
So yeah, sans the Property and Casualty Insurance companies, Illinois Big Corps were hurt by the Great Recession, but not nearly as much. And by excluding the Property and Casualty Insurance companies, the Illinois Big Corps have now recovered from 2006 and 2007. In fact, their Total Earnings in 2010 of $52.8 bil are $1.0 bil above the peak earnings in 2007 of $51.8 bil.
When you examine the individual Illinois Big Corps, there are only three which powered through the Great Recession, with solid earnings growth in each year: McDonald's, CME Group, and Devry, which are all shown in Bold in the five-year Earnings Chart above.
The above research, where I found 38 Illinois Big Corps, which had total 2010 earnings growth of 32%, was performed through the end of March 2011. Since then, in April and May 2011, I extended this research, and I found 13 additional Illinois Big Corps, all of which had double-digit or higher percentage earnings growth, which in total more than tripled that 32% earnings growth, and are shown here below.
..........................................2010.......2009.........Increase
...........................................Core........Core........(Decrease)
.......State..........................PTI(L)......PTI(L).....Amount.....%
..............................................(millions of dollars)....
Late Big Corp Additions
Illinois (13)
Molex(1)...............................364.........(80)..........444....555%
Stericycle.............................332.........278.............54......19%
Career Education(2)..............319.........230.............89......39%
Corn Products Intl(3)............275.........239.............36......15%
LKQ Corp..............................270.........205.............65......32%
Unitrin..................................261.........230.............31......13%
IDEX Corp.............................232.........169.............63......37%
Ventas(4)..............................228..........194.............34......18%
Alberto Culver......................218..........186.............32......17%
Anixter Intl(5).......................211..........117.............94......80%
Jones Lang LaSalle................203.............3............200.....NM
CNA Surety...........................197..........169.............28......17%
HSBC Finance Corp(6).......(2,906).....(7,466).......4,560.....61%
Total 13 IL Late Additions....204......(5,526)........5,730...104%
(1) Molex earnings numbers are for the 12 months ended December, and exclude Asset Impairment charges.
(2) Career Education 2010 PTI excludes Asset Impairment charge.
(3) Corn Products Intl 2009 PTI exludes Asset Impairment charge.
(4) Ventas is an REIT.
(5) Anixter Intl 2010 PTI excludes Loss on Debt Extinguishment. Its 2009 PTI excludes Goodwill Impairment charge.
(6) HSBC Finance Corporation 2009 PTI excludes Intangible Asset Impairment charges.
