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It's All About Berkshire Hathaway (BH) and the New FASB Requirement That Changes in the Market Value of all Stock and Other Equity Investments, Both Realized and Unrealized, Be Reflected in Quarterly Earnings in the Quarter These Changes in Market Value Occur
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BH's Pretax Loss in the December 2018 Quarter Was $32.7 Bil, a Pretax Earnings Deterioration of $39.1 Bil From the Pretax Earnings of $6.4 Bil in the December 2017 Quarter
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This $39.1 Bil of Pretax Earnings Deterioration ..... and Yeah, Also of Substantial Economic Deterioration ..... in Just One Quarter to a Company Run by Clearly the Brightest Financial Mind in the World Has Three Components
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First, on the Positive Side Was an Increase in the Excess of Total Revenues Over Total Costs and Expenses Which Caused a Pretax Earnings Improvement of $1.9 Bil, for a Very Nice Increase of 45%
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Second, on the Negative Side, BH's Total Investment and Derivative Losses Were a Massive $35.5 Bil in the December 2018 Quarter, an Earnings Deterioration of $35.7 Bil From the $0.2 Bil of Total Investment and Derivative Gains in the December 2017 Quarter
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And Third, Also on the Negative Side, BH's Equity Method Losses Were $3.2 Bil in the December 2018 Quarter, an Earnings Deterioration of $5.3 Bil From the $2.1 Bil of Equity Method Earnings in the December 2017 Quarter
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And There's a Very Interesting Story Behind Each of the Above Three Components
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From a review of company SEC filings and of MSN Money individual company common stock information, I found 3 Nebraska Companies with stock market caps sometime in 2018 of more than $10 Bil and with December 2018 Quarter Ends.
My Focus is on Pretax Income rather than on After-Tax Net Income because Corporate Income Taxes are simply a transfer of financial wealth between US Corporations and the US Federal, US State and Foreign Governments. It has nothing whatsoever to do with Company Operating Performance.
| US | US | US | US | US | US | US | US | ||||||||
| GAAP | GAAP | GAAP | GAAP | GAAP | GAAP | GAAP | GAAP | ||||||||
| Pretax | Pretax | Pretax | Pretax | Pretax | Pretax | Pretax | Pretax | ||||||||
| Income | Income | Income | Income | Income | Income | Income | Income | ||||||||
| (Loss) | (Loss) | (Loss) | (Loss) | (Loss) | (Loss) | (Loss) | (Loss) | ||||||||
| Nebraska Companies | Dec | Dec | Better | Sept | Sept | Better | June | June | Better | March | March | Better | |||
| Stock Market Caps > $10 Bil | 2018 | 2017 | (Worse) | 2018 | 2017 | (Worse) | 2018 | 2017 | (Worse) | 2018 | 2017 | (Worse) | |||
| December 2018 Qtr Earnings | Quarter | Quarter | % | Quarter | Quarter | % | Quarter | Quarter | % | Quarter | Quarter | % | |||
| Released By February 23, 2019 | End | End | Change | End | End | Change | End | End | Change | End | End | Change | |||
| mils $ | mils $ | mils $ | mils $ | mils $ | mils $ | mils $ | mils $ | ||||||||
| Berkshire Hathaway | (32,721) | 6,391 | -612% | 23,147 | 5,630 | 311% | 15,098 | 6,129 | 146% | (1,523) | 5,688 | -127% | |||
| Union Pacific Corp | 2,016 | 2,092 | -4% | 2,076 | 1,983 | 5% | 1,938 | 1,869 | 4% | 1,711 | 1,688 | 1% | |||
| TD Ameritrade | 778 | 303 | 157% | 609 | 338 | 80% | 603 | 373 | 62% | 372 | 344 | 8% | |||
| Total all 3 Nebraska Cos | (29,927) | 8,786 | -441% | 25,832 | 7,951 | 225% | 17,639 | 8,371 | 111% | 560 | 7,720 | -93% |
