In deriving Pretax Income, I start with Pretax Income under Generally Accepted Accounting Principles (GAAP), and then exclude several clearly unusual very large items relative to Pretax Income, such as Asset Impairments, Gains and Losses on Debt Retirements, Gains and Losses on Asset Dispositions, and Special Litigation Gains and Losses.
These 37 very fine Connecticut Corps had Total Pretax Income in 2011 of $46.8 bil, up a robust 28% over 2010, and up an even more robust 95% over 2009.
General Electric dominates the Connecticut corporate landscape. It generated Pretax Income in 2011 of $20.0 bil, up an incredible 43% over 2010, and more than doubling to an even more incredible 104% over 2009.
Seventeen of these 37 Connecticut Corps, or 46%, had their 2011 Pretax Income more than double in the past two years.
Clearly, the Obama Administration has created an economic environment in the past two years that has permitted these Connecticut Corporations to flat out flourish. Connecticut citizens should be very proud of the operating performance in the most recent two years of their superb Connecticut Corporations.
For this fine earnings growth to continue in 2012 at a bit short of the very robust pace of that in 2011, especially for Connecticut’s manufacturing companies, it would be necessary for both the 100% first-year tax expensing of equipment purchases to be extended for these investments made in the remainder of 2012, and for the Research and Experimentation Tax Credit to be made permanent, somewhat expanded, and much simplified, starting in 2012.
For this 2011 robust earnings growth to continue for at least the next three to five years, along with the critically needed US job creation, some wise very targeted tax incentives are needed, most of them being part of President Obama’s wisely reasoned Framework for Business Tax Reform.
First, it would be necessary to enact highly incentivized first-year tax depreciation on all new building and building remodeling investments made in the remainder of 2012, and with somewhat lower, but still highly incentivized, first-year tax depreciation on all new building and building remodeling investments made in 2013.
Second, for 2013 and going forward, it would be necessary to close many of the Corporate Tax Loopholes, and use the money to bring down markedly the corporate tax rate, with a particular focus on reducing substantially the tax rate on the lower amounts of the business income of C Corps and the business income, taxed at the individual level, related to all pass through entities.
Third, the Domestic Production Activities Tax Deduction for truly Manufacturing companies should be made much more robust, and even more so than that included in the President’s Framework for Business Tax Reform.
Fourth, a wisely designed minimum tax on foreign earnings should be enacted.
And fifth, it would be necessary to enact wise measures, many included in the President’s Framework for Business Tax Reform, which would substantially reduce the present huge US Multinational Corps’ shifting of income from the US to low taxed foreign tax havens.
Below here is the Pretax Income (PTI) and Pretax Loss (PTL) of these 37 Connecticut Corporations for each of the most recent three years, with the most recent fiscal year ends ranging from June 2011 to December 2011.
| Obama | |||||
| Bump | |||||
| PTI(L) | PTI(L) | ||||
| 1 Year | 2 Year | ||||
| PTI(L) | PTI(L) | PTI(L) | % | % | |
| 2011 | 2010 | 2009 | Change | Change | |
| mils $s | mils $s | mils $s | |||
| Connecticut | |||||
| General Electric | 20,098 | 14,085 | 9,864 | 43% | 104% |
| United Technologies | 7,605 | 6,538 | 5,760 | 16% | 32% |
| Aetna | 3,078 | 2,644 | 1,901 | 16% | 62% |
| Praxair | 2,323 | 1,964 | 1,442 | 18% | 61% |
| Cigna | 2,204 | 1,925 | 1,594 | 14% | 38% |
| Xerox | 1,565 | 815 | 627 | 92% | 150% |
| Priceline | 1,368 | 746 | 442 | 83% | 210% |
| Stanley Black & Decker | 780 | 240 | 239 | 225% | 226% |
| Interactive Brokers | 741 | 337 | 538 | 120% | 38% |
| Amphenol | 717 | 664 | 447 | 8% | 60% |
| Pitney Bowes | 544 | 535 | 693 | 2% | -22% |
| WR Berkley | 518 | 603 | 382 | -14% | 36% |
| Hubbell | 390 | 320 | 262 | 22% | 49% |
| ING Life Insurance US | 340 | 578 | 404 | -41% | -16% |
| People's United Financial | 296 | 127 | 144 | 133% | 106% |
| Crane | 292 | 211 | 185 | 38% | 58% |
| Silgan Holdings | 290 | 222 | 248 | 31% | 17% |
| Frontier Communications | 246 | 271 | 193 | -9% | 27% |
| Factset Research | 239 | 222 | 212 | 8% | 13% |
| Hartford Financial Services | 230 | 2,356 | (1,721) | -90% | 113% |
| Alexion Pharmaceuticals | 230 | 149 | 83 | 54% | 177% |
| Webster Financial | 207 | 85 | (131) | 144% | 258% |
| Gartner | 202 | 134 | 116 | 51% | 74% |
| Emcor Group | 201 | 218 | 247 | -8% | -19% |
| Hexcel | 176 | 100 | 78 | 76% | 126% |
| United Rentals | 164 | (63) | (107) | 360% | 253% |
| Harman Industries | 160 | 49 | (211) | 227% | 176% |
| Genesee & Wyoming | 158 | 109 | 76 | 45% | 108% |
| Chemtura | 137 | (102) | (80) | 234% | 271% |
| Aircastle Ltd | 132 | 72 | 111 | 83% | 19% |
| United Natural Foods | 126 | 112 | 100 | 13% | 26% |
| Barnes Group | 117 | 64 | 43 | 83% | 172% |
| Terex Corp | (83) | (238) | (524) | 65% | 84% |
| Total all 33 | 45,791 | 36,092 | 23,657 | 27% | 94% |
| Late Additions | |||||
| Starwood Hotels & Resorts | 493 | 299 | 174 | 65% | 183% |
| Northern Tier Energy | 324 | 170 | 90 | 91% | 260% |
| Starwood Property Trust | 121 | 59 | (3) | 105% | 4133% |
| Mohegan Tribal Gaming Authority | 112 | 65 | 109 | 72% | 3% |
| Grand Total all 37 | 46,841 | 36,685 | 24,027 | 28% | 95% |
