The financial strength of all US Non-Profit Hospital Organizations, which hold an extensive treasure chest of investments in equity and debt securities, was just devastated in 2008 by the financial meltdown of the US economy.
And just like the financial strength of the Catholic Hospitals being resurrected in the past two years, the financial strength of the non-Catholic, Non-Profit Hospitals have likewise been resurrected in the past two years, and even more so.
This financial turnaround was due mainly to many wise actions by the Obama Administration, by the Fed, and by the US Congress, which created a US economic infrastructure which permitted US large businesses to flourish, with the resultant substantial rise in stock prices of Big Corps in the past two years.
Frankly, I was surprised at just how robust the growth in Net Assets (i.e. Excess of Total Assets over Total Liabilities) of Catholic Hospital Organizations was in the most recent two years….29% is monster growth, particularly when considered in light of the Net Assets amounts two years earlier being predominately the result of untaxed hospital operating earnings and untaxed investment portfolio returns, both accumulated over decades and decades.
But guess what? The Big non-Catholic, Non-Profit Hospitals generated substantially higher growth in their Net Assets in the most recent two years than did the Catholic Hospitals. In just the past two years, these Big Non-Profit Hospitals registered an increase in their Net Assets of a remarkable 39%. No, that’s not a misprint.
From an extensive review of the financial statements of non-Catholic, Non-Profit Hospitals, I found 134 of them with Net Assets (i.e. Excess of Total Assets over Total Liabilities) of at least $500 mil each. These financial statements were found mainly in two very fine Internet sources: DAC Bond and EMMA (i.e. Electronic Municipal Market Access of the Municipal Securities Rulemaking Board).
Of these 134 Big Non-Profit Hospital Organizations, I could find very recent (1Q 2011) Net Assets amounts for 120 of them. Thus, I could derive reliable Net Asset growth for roughly the most recent two years for just these 120.
These 120 Big Non-Profit Hospital Organizations had total Net Assets of $191.5 bil at the most recent balance sheet date, which was March 31, 2011 for the overwhelming majority of them.
In comparison, the total Net Assets of these same 120 Non-Profit Hospital Organizations were $138.2 bil at their respective closest fiscal year ends two years earlier.
Thus, the Net Assets of these 120 Non-Profit Hospital Organizations increased by $53.3 bil, or by a remarkable 39%, in just the most recent two years.
Clearly, the executives of Non-Profit Hospitals, all employees of Non-Profit Hospitals, the Board of Directors of Non-Profit Hospitals, and the bondholders of these Non-Profit Hospitals have to all be elated with what has happened with the financial strength of their Non-Profit Hospitals during the Obama Administration.
Let me illustrate what drives the growth in a hospital organization’s Net Assets by focusing on one of the largest Non-Profit Hospital Organizations, the highly-respected Cleveland Clinic.
On December 31, 2008, Cleveland Clinic had total Net Assets of $2.7 bil. At its most recent March 31, 2011 balance sheet, twenty seven months later, its total Net Assets have grown to $4.5 bil, or an increase of $1.8 bil, or 65%.
Let me lay out the key components of this $1.8 bil increase in Cleveland Clinic’s Net Assets.
For the most recent 27 Months, Cleveland Clinic generated:
…Net Hospital Operating Income of…………........$652 mil
…Non-operating Investment Returns of.............$837 mil
…Gifts and Bequests…………………………................$211 mil
…Other-net……………………………………………...........$73 mil
= Total increase in Net Assets……………............$1,773 mil
Yeah, that’s right, due mainly to the substantial strengthening of the US economy in the past 27 months, Cleveland Clinic’s total Investment Returns of $837 mil, were much higher than its Net Operating Income from its hospital operations of $652 mil over the same period.
To provide more insight, let me look closer at the balance sheet of the largest of these Non-Profit Hospitals: Kaiser Permanente (KP).
At March 31, 2011, KP’s total Investments, both short-term and long-term, totaled $21.1 bil, 52% higher than its Net Assets balance of $13.9 bil. It's easy to see why KP generates huge investment returns, given the mega amount of its investments.
With KP having such a high total investment balance of $21.1 bil, coupled with total Property, plant, equipment, and software of $18.4 bil, it must have tons of interest-bearing debt? Actually, it doesn’t. Its total interest-bearing debt is only $5.7 bil.
So, what is the main missing link to balance KP’s balance sheet? Well, it’s KP’s gargantuan pension and other retirement liabilities, which total $13.2 bil.
When pundits focus on the huge health care cost problem that the country has, I hear no one talk about the massive amounts of health care cost added by the massive amounts of pension and other retirement liabilities on the books of Non-Profit Hospital Organizations. Given that KP’s total retirement liabilities are $13.2 bil, the total for all Non-Profit Organizations must be off-the-charts.
Softening somewhat the severe blow here was the Obama Administration-driven upward explosion of the stock market in the most recent two years, which resulted in the buttressing of pension plans assets of all organizations, Non-Profit Hospitals as well as Commercial Enterprises, from their financially desperate status at the end of 2008.
Anyway, here are these 120 non-Catholic, Non-Profit Hospital Organizations:
......................................................................Balance Sheet
................................................................................2 Years
.......................................................................Most...Earlier
..Hospital Organization...........HQs..........FYE..Recent...FYE
Kaiser Permanente...........Oakland,CA.....Dec..Mar11..Dec08
Sutter Health....................Sacramnto,CA.Dec..Mar11..Dec08
Partners Healthcare Sys....Boston,MA......Sep..Mar11..Sep09
Mayo Clinic.......................Rochester,MN.Dec..Mar11..Dec08
Adventist Health System...Wntr Prk,FL....Dec..Mar11..Dec08
Cleveland Clinic Hlth Sys...Cleveland,OH..Dec..Mar11..Dec08
BJC Healthcare...................St Louis,MO...Dec..Mar11..Dec08
Mem Sloan-Kttrng Canc Ctr.NY,NY..........Dec..Mar11..Dec08
UPMC.................................Pittsburgh.....Jun..Mar11..Jun09
Advocate HlthCare Ntwrk...Oak Brook,IL.Dec..Mar11..Dec08
The Methodist Hospital Sys.Houston,TX...Dec..Mar11..Dec08
NY and Presbyterian Hosp.NY,NY...........Dec..Mar11..Dec08
Banner Health.....................Phoenix,AZ...Dec..Mar11..Dec08
Inova Health System..........Northern VA..Dec..Mar11..Dec08
Baylor Health Care System.Dallas,TX........Jun..Mar11..Jun09
Carolinas Health Care Sys....Charlotte,NC..Dec..Dec10..Dec08
Texas Health Resources.......Dallas,TX......Dec..Mar11..Dec08
Indiana University Health...Indianapolis..Dec..Mar11..Dec08
Texas Children's Hospital....Houston,TX....Sep..Mar11..Sep09
Johns Hopkins Hlth Sys......Baltimore,MD.Jun..Mar11..Jun09
Baycare Health System........Tampa,FL......Dec..Mar11..Dec08
Children's Hosp Philly..........Philadelphia..Jun..Dec10..Jun09
Sentara Health Care.............Norfolk,VA....Dec..Mar11..Dec08
Nrthwstern Mem Hlth Care..Chicago,IL....Aug..Feb11..Aug09
Children's Healthcare..........Atlanta,GA....Dec..Mar11..Dec08
Jefferson Health System......Radnor,PA....Jun..Mar11..Jun09
Baptist Health South FL.......Miami,FL.......Sep..Mar11..Sep09
Novant Health..................Winston-Salem.Dec..Mar11..Dec08
Duke University Hlth Sys....Durham,NC.....Jun..Mar11..Jun09
Meml Hermann HC Sys.......Houston,TX....Jun...Mar11..Jun09
Scripps Health....................San Diego,CA..Sep..Mar11..Sep09
OhioHealth........................Columbus,OH..Jun..Mar11..Jun09
North Shore Univ Hlth Syst.Evanston,IL...Sep..Mar11..Sep09
Iowa Health System............Des Moines....Dec..Mar11..Dec08
Univ Penn Health System....Philadelphia...Jun..Mar11..Jun09
Sanford...............................Sioux Falls....Jun..Mar11..Jun09
ProMedica Health Care........Toledo,OH.....Dec..Dec10..Dec08
Spectrum Health System.....Grand Rapids.Jun..Mar11..Jun09
Henry Ford Health System...Detroit,MI....Dec..Mar11..Dec08
Seattle Children's Healthcare.Seattle.........Sep..Mar11..Sep09
Allina Health System...........Minneapolis...Dec..Mar11..Dec08
Premier Health Partners......Dayton,OH.....Dec..Dec10..Dec08
LifeSpan..............................Providence....Sep..Mar11..Sep09
Univ Hospitals Health Sys....Cleveland......Dec..Mar11..Dec08
Rush Univ Medical Center....Chicago,IL....Jun..Mar11..Jun09
Presbytrian Hlth Care Svcs..Albuquerque..Dec..Mar11..Dec08
Adventist Health West.........Rosevlle,CA...Dec..Mar11..Dec08
Children's Medical Center.....Dallas,TX......Dec..Mar11..Dec08
NoShre Lng Isl Jewish Hlth...NY,NY.........Dec..Mar11..Dec08
South Broward Hosp Distr.....Hollywd,FL..Apr..Jan11..Apr09
Children's Memrial Med Ctr...Chicago,IL....Aug..Feb11..Aug09
Univ Maryland Medical Sys...Baltimore.....Jun..Mar11..Jun09
Christiana Care Hlth Svcs......Wilmington...Jun..Mar11..Jun09
CareGroup Hlth Care System..Boston,MA...Sep..Mar11..Sep09
St Lukes Episcopl Hlth Sys.....Houston,TX...Dec..Mar11..Dec08
Stanford Hosp & Clinics.........Palo Alto,CA..Aug..Feb11..Aug09
Cook Children's Health..........Dallas,TX........Sep..Mar11..Sep09
University Chicago Med Ctr..Chicago,IL......Jun..Mar11..Jun09
Sharp Health Care.................San Diego,CA...Sep..Mar11..Sep09
Medical College Wisconsin....Milwaukee,WI.Jun..Mar11..Jun09
Dallas County Parkland Hsp...Dallas,TX........Sep..Dec10..Sep08
Cone Health...........................Grnsboro,NC..Sep..Mar11..Sep09
Froedtert&Community Hlth...Milwaukee....Jun....Mar11..Jun09
Orlando Health......................Orlando,FL....Sep..Mar11..Sep09
Baylor College Medicine........Houston,TX....Jun..Mar11..Jun09
Children's Hospital LA...........Los Angeles...Jun..Mar11..Jun09
Alegent Health......................Omaha,NE......Jun..Mar11..Jun09
Aurora Health Care...............Milwaukee,WI.Dec..Mar11..Dec08
MedStar Health.....................Columbia,MD..Jun..Mar11..Jun09
Mt Sinai School Medicine.......NY,NY...........Dec..Dec10..Dec08
No Carolina Baptist Hosp.......Wnston-Salem.Jun..Mar11..Jun09
Central Georgia Hlth Sys........Macon,GA......Sep..Mar11..Sep09
Legacy Health System............Portland,OR...Mar..Mar11..Mar09
West VA United Hlth Sys........Fairmont,WV..Dec..Mar11..Dec08
Scott & White Healthcare........Central TX.....Aug..Feb11..Aug09
Queens Health Systems..........Honolulu,HI...Jun..Mar11..Jun09
Virtua Health.........................South NJ........Dec..Mar11..Dec08
Reading Hospital...................Reading,PA.....Jun..Mar11..Jun09
Parkview Health System.........Ft Wayne,IN...Dec..Mar11..Dec08
Integris Health......................Oklahoma,OK..Jun..Mar11..Jun09
Mount Sinai Hospital..............NY,NY...........Dec..Mar11..Dec08
Greenville Hospital System....Greenville,SC..Sep..Mar11..Sep09
Lehigh Valley Health Ntwrk..Allentown,PA..Jun..Mar11..Jun09
McLaren Health Care..............Flint,MI.........Sep..Mar11..Sep09
Children's Health Care WI.......Milwaukee.....Dec..Mar11..Dec08
Community Health Network...Indianapolis...Dec..Mar11..Dec08
Methodist Health System.......Dallas,TX........Sep..Mar11..Sep09
Piedmont Health Care............Atlanta,GA.....Jun..Mar11..Jun09
Palmetto Health....................Columbia,SC....Sep..Mar11..Sep09
University Colorado Hosp.....Aurora,CO......Jun..Dec10..Jun09
St. George Corporation..........Chicago..........Dec..Mar11..Dec08
Essentia Health......................Duluth,MN.....Jun..Mar11..Jun09
Shands Teach Hosp&Clinics....Gainesvlle,FL.Jun..Mar11..Jun09
Norton Health Care................Louisville,KY.Dec..Mar11..Dec08
McLeod Health......................Florence,SC....Sep..Mar11..Sep09
Valley Health System.............Wnchestr,VA.Dec..Mar11..Dec08
Kettering Health Network.......Dayton,OH.....Dec..Mar11..Dec08
RobrtWJohnson Univ Hosp.NewBrnswck,NJ.Dec..Mar11..Dec08
Lee Memorial Health System..Ft Myers,FL....Sep..Mar11..Sep09
Abington Health.....................Philly.............Jun..Mar11..Jun09
Huntington Memrl Hosp........Pasadena,CA....Dec..Mar11..Dec08
Sarasota Co Public Hosp..........Sarasota,FL....Sep..Mar11..Sep09
Wake Forest Univ Hlth Sci......Winston-Salem.Jun..Mar11..Jun09
Rady Children's Hospital........San Diego,CA...Jun..Mar11..Jun09
All Children's Hospital...........Tampa,FL........Sep..Mar11..Sep09
Sparrow Health System..........Lansing,MI.....Dec..Mar11..Dec08
Ochsner Health System..........New Orleans....Dec..Mar11..Dec08
Health First...........................Rockledge,FL...Sep..Mar11..Jun09
Virginia Hospital Center........Arlington,VA...Dec..Mar11..Dec08
Montefiore Medical Ctr..........Bronx,NY.......Dec..Mar11..Dec08
First Health Carolinas............Pinehurst,NC...Sep..Mar11..Sep09
Univ of Kansas Hospital.........KC,KS.............Jun..Mar11..Jun09
Children's Health Care...........Minneapolis....Dec..Mar11..Dec08
MidMichigan Health..............Midland,MI....Jun..Mar11..Jun09
Spartanburg Reg HC Syst.......Sprtnburg,SC..Sep..Mar11..Sep09
Guthrie Health......................No PA&So NY..Jun..Mar11..Jun09
ProHealth Care.....................Milwaukee.......Sep..Mar11..Sep09
Lma Lnda Univ Med Ctr........Loma Linda,CA.Dec..Mar11..Dec08
Baystate Medical Center........Sprngfield,MA..Sep..Mar11..Sep09
Hackensck Univ Med Ctr.......Hackensack,NJ.Dec..Mar11..Dec08
And below here are these 120 Non-Profit Hospital Organizations’ Net Asset amounts, and their increases over roughly the most recent two years.
..............................................Net Assets..Net Assets
....................................................Most........Two
...................................................Recent......Years.....Increase..
...Hospital Organization................Date.......Earlier..Amount...%
.....................................................(millions of dollars)...
Kaiser Permanente.....................13,912.....11,431....2,481....22%
Sutter Health...............................6,619......4,298.....2,321....54%
Partners Healthcare System........6,047......4,975....1,072....22%
Mayo Clinic.................................5,081......2,326....2,755...118%
Adventist Health System.............4,861......3,407....1,454....43%
Cleveland Clinic Health System....4,488......2,715....1,773....65%
BJC Healthcare............................4,175......2,705....1,470....54%
Memor Sloan-Kttring Cancer Ctr..4,003......3,224......779....24%
UPMC..........................................3,844......2,756....1,088....39%
Advocate HealthCare Network.....3,610......1,842....1,768....96%
Methodist Hospital System...........3,419......2,375....1,044....44%
NY and Presbyterian Hospital......3,227......2,333......894....38%
Banner Health..............................3,097......1,669....1,428....86%
Inova Health System....................2,973......1,885....1,088....58%
Baylor Health Care System............2,860......2,166......694....32%
Carolinas Health Care System.......2,745......2,087......658....32%
Texas Health Resources................2,696......1,921......775....40%
Indiana University Health.............2,633......1,434....1,199....84%
Texas Children's Hospital...............2,447......2,088......359....17%
Johns Hopkins Health System........2,400.....1,273....1,127....89%
Baycare Health System..................2,375......1,523......852....56%
Children's Hospital Philadelphia.....2,344......1,938......406....21%
Sentara Health Care.......................2,315......1,489......826....55%
Northwestern Memrl Hlth Care......2,259......1,642......617....38%
Children's Healthcare Atlanta.........2,257......1,482......775....52%
Jefferson Health System.................2,178......1,860......318....17%
Baptist Health South Florida...........2,089......1,571......518....33%
Novant Health................................2,006.....1,557......449....29%
Duke Univ Health System...............1,999......1,392......607....44%
Memorial Hermann Hlthcre Sys.....1,831......1,509......322....21%
Scripps Health................................1,817......1,354......463....34%
OhioHealth.....................................1,743......1,259......484....38%
North Shore Univ Health Sys..........1,690......1,443......247....17%
Iowa Health System........................1,629......1,067......562....53%
Univ Penn Health System................1,604......1,163......441....38%
Sanford...........................................1,574......1,242......332....27%
ProMedica Health Care....................1,561......1,042......519....50%
Spectrum Health System.................1,457......1,128......329....29%
Henry Ford Health System..............1,421......1,053......368....35%
Seattle Children's Healthcare...........1,379......1,195......184....15%
Allina Health System......................1,370........804......566....70%
Premier Health Partners.................1,368......1,111......257....23%
LifeSpan.........................................1,356......1,225......131....11%
University Hospitals Health Sys......1,342......1,078......264....24%
Rush Univ Medical Center..............1,313......1,073......240....22%
Presbyterian Health Care Svcs........1,297........706......591....84%
Adventist Health West....................1,283........969......314....32%
Children's Medical Center Dallas.....1,225........821......404....49%
NoShore Long Island Jewish Hlth....1,223........614......609....99%
South Broward Hospital..................1,218......1,011......207....20%
Children's Memorial Medical Ctr......1,209......1,051......158....15%
Univ Maryland Medical Sys.............1,176........904......272....30%
Christiana Care Health Services.......1,154........881......273....31%
CareGroup Health Care System.......1,142........978......164....17%
St Luke's Episcopal Health Sys........1,138........692......446....64%
Stanford Hospital & Clinics.............1,131........807......324....40%
Cook Children's Health...................1,123........840......283....34%
University Chicago Medical Ctr......1,112........823......289....35%
Sharp Health Care..........................1,083........806......277....34%
Medical College of Wisconsin..........1,076........808......268....33%
Dallas County Parkland Hosp.........1,074........854......220....26%
Cone Health...................................1,063........894......169....19%
Froedtert & Community Health......1,050........824......226....27%
Orlando Health..............................1,049........875......174....20%
Baylor College of Medicine.............1,025........965.......60.....6%
Children's Hospital LA....................1,019........758......261....34%
Alegent Health.................................970........835......135....16%
Aurora Health Care..........................952........546......406....74%
MedStar Health................................944........647......297....46%
Mount Sinai School Medicine............937........765......172....22%
North Carolina Baptist Hosp.............916........715......201....28%
Central Georgia Health Sys...............902........789......113....14%
Legacy Health System......................895........618......277....45%
West VA United Hlth Sys..................883........608......275....45%
Scott & White Healthcare..................879........686......193....28%
Queens Health Systems.....................859........548......311....57%
Virtua Health...................................857........566......291....51%
Reading Hospital..............................849........730......119....16%
Parkview Health System...................846........543......303....56%
Integris Health.................................844........774.......70......9%
Mount Sinai Hospital........................842........477......365....77%
Greenville Hospital System...............830........802........28......3%
Lehigh Valley Health Network...........825........590......235....40%
McLaren Health Care........................825........682......143....21%
Children's Health Care WI..................821........460......361....78%
Community Health Network..............778........482......296....61%
Methodist Health System...................778........627......151....24%
Piedmont Health Care.......................775........608......167....27%
Palmetto Health................................762........593......169....28%
University of Colorado Hosp.............746........471......275....58%
St. George Corporation......................710........491......219....45%
Essentia Health.................................706........519......187....36%
Shands Teaching Hosps&Clinics.........704........569......135....24%
Norton Health Care...........................698........399......299....75%
McLeod Health.................................689........533......156....29%
Valley Health System........................660........434......226....52%
Kettering Health Network.................656........340......316....93%
Robert W Johnson Univ Hosp...........649........457......192....42%
Lee Memorial Health System............643........576.......67....12%
Abington Health...............................637........518......119....23%
Huntington Memorl Hosp.................628........446......182....41%
Sarasota County Public Hosp............623........542.......81....15%
Wake Forest Univ Health Sci.............604........510.......94....18%
Rady Children's Hospital...................594........387......207....53%
All Children's Hospital......................578........516.......62....12%
Sparrow Health System.....................571........318......253....80%
Ochsner Health System.....................550........321......229....71%
Health First......................................549........481.......68....14%
Virginia Hospital Center...................548........351......197....56%
Montefiore Medical Center...............545........320......225....70%
First Health Carolinas......................540........458.......82....18%
Univ of Kansas Hospital...................535........422......113....27%
Children's Health Care.....................529........370......159....43%
MidMichigan Health........................525........414......111....27%
Spartanburg Regional HC Sys..........521........487.......34.....7%
Guthrie Health................................517........375......142....38%
ProHealth Care................................516........423.......93....22%
Loma Linda Univ Medical Ctr..........516........415......101....24%
Baystate Medical Center..................501........361......140....39%
Hackensack Univ Medical Ctr..........500........297......203....68%
Total 120 Big Non-Profit
.....Hospital Organizations.........191,541..138,203..53,338...39%
Yeah, that's right, all 120 Non-Profit Hospital Organizations registered increases in their Net Assets in the past two years. And all of these increases were very healthy, and many of them, were just spectacular.
Here are the additional 14 Non-Profit Hospital Organizations I found, with Net Assets above $500 mil each, which haven’t disclosed a recent 1Q 2011 Net Asset amount:
...............................................................................Balance Sheet
..............................................................................Most..One Year
.....Hospital Organization..............HQs...........FYE...Recent..Earlier
St. Jude Children's Res Hosp....Memphis..........Jun..Jun10..Jun09
Cedars-Sinai Medical Ctr.........Los Angeles......Jun..Jun10..Jun09
Oregon Health&Science Univ..Portland,OR......Jun..Jun10..Jun09
Baptist Memorl Hlth Care........Memphis...........Sep..Sep10..Sep09
Univ Mich Hosps&Health Ctrs.Ann Arbor,MI...Jun..Jun10..Jun09
Univ No Carolina Hlthcre Sys..Chapel Hill........Jun..Jun10..Jun09
UCLA Medical Center..............Los Angeles......Jun..Jun10..Jun-09
Hoag Memorl Hosp Presbyter.Newport Beach..Sep..Sep10..Sep09
NYU Langone Medical Ctr.......New York.........Aug..Aug10..Aug09
Univ Iowa Hosp & Clinics........Iowa City,IA......Jun..Jun10..Jun09
Univ California San Fran.........San Fran............Jun..Jun10..Jun09
Baptist Health System.............Jacksonville......Sep..Sep10..Sep09
North Mississippi Hlth Svcs....Tupelo,MS.........Sep..Sep10..Sep09
Yale-New Haven Hospital.......New Haven,CT...Sep..Sep10..Sep09
And below here are these 14 Non-Profit Hospital Organizations’ Net Asset amounts, and their one-year increase in their Net Assets amount:
................................................Net Assets..Net Assets
.....................................................Most........One
....................................................Recent......Year...Increase.....
.....................................................Date......Earlier...Amount....%
.......................................................(millions of dollars)...
St. Jude Children's Res Hosp..........2,123......1,907.......216.....11%
Cedars-Sinai Medical Center..........1,697......1,517.......180.....12%
Oregon Health & Science Univ........1,696......1,565.......131......8%
Baptist Memorial Health Care........1,659......1,501.......158.....11%
Univ Mich Hospitals&Health Ctrs...1,602......1,537........65.......4%
Univ North Carolina Hlthcr Syst....1,489......1,327.......162.....12%
UCLA Medical Center....................1,483......1,350.......133.....10%
Hoag Memorl Hosp Presbyterian...1,465......1,375........90......7%
NYU Langone Medical Center........1,290......1,277........13......1%
University Iowa Hosp&Clinics.......1,021.........969........52......5%
Univ California San Fran...................932.........761.......171.....22%
Baptist Health System.......................814.........687.......127.....18%
North Mississippi Hlth Svcs..............694.........668........26......4%
Yale-New Haven Hospital.................642.........588........54......9%
Total 14 Big Non-Profit
.....Hospital Organizations..........18,607.....17,029.....1,578.....9%
In my next three posts, I’ll be analyzing the Operating Results of Hospital Organizations.
The first of these will be the key, highly relevant parts of a post regarding Hospital Profits I made several years ago, when the Health Care legislation was being debated.
The second of these will focus on updated Operating Results of the Catholic Hospital Organizations in the most recent three years.
And the third of these will be an update on Operating Results of the non-Catholic, Non-Profit Hospital Organizations in the most recent three years.
But the question that I think has to be answered....In all fairness, just like Health Insurance Corps should, shouldn't all Hospital Organizations also be reducing their stiff prices in order to both patriotically and compassionately help reduce total US health care costs, to help suffering US individual hospital patients, to ease the health care burdens on US businesses, and to soften both the crushing US Federal Deficit and the many State Government severely-stressed Budgets?
Thursday, June 23, 2011
Tuesday, June 21, 2011
To Catholic Hospitals, It’s St. Barack and St. Ben, Patron Saints of Financial Strength
The financial strength of US Catholic Hospital Organizations, which hold an extensive treasure chest of investments in common stocks and bonds, was just devastated in 2008 by the financial meltdown of the US economy.
However, in near miraculous fashion, this financial strength of these Catholic Hospitals has been resurrected in the past two years, due mainly to many wise actions by the Obama Administration, by the Fed, and by the US Congress, which created a US economic infrastructure which permitted US large businesses to flourish.
From an extensive review of the financial statements of Catholic Hospitals, I found 22 of them with Net Assets (i.e. Excess of Total Assets over Total Liabilities) of more than $800 mil each. These financial statements were found mainly in two very fine Internet sources: DAC Bond and EMMA (i.e. Electronic Municipal Market Access of the Municipal Securities Rulemaking Board).
These 22 Catholic Hospital Organizations had total Net Assets of $63.55 bil at the most recent balance sheet date, which was March 31, 2011 for most of them.
In comparison, the total Net Assets of these same 22 Catholic Hospital Organization was $49.33 bil at their respective fiscal year ends of the closest date to two years earlier.
Thus, the Net Assets of these 22 Catholic Hospital Organizations increased by $14.22 bil, or by 29%, in the most recent two years.
When you think about it, that 29% Net Asset growth in only two years is just incredible. The overwhelming majority of the Net Assets balance at any time is the cumulative tax-free profits, both from hospital operations and from investments, since the inception of the hospital organizations.
In just the most recent two years, these 22 Catholic Hospital Organizations generated a 29% profit growth on their Net Asset balance of two years ago, which was accumulated over decades and decades of hospital operations and investment returns.
Clearly, the executives of Catholic Hospitals, all employees of Catholic Hospitals, the Board of Directors of Catholic Hospitals, and the bondholders of these Catholic Hospitals have to all be elated with what has happened with the financial strength of their Catholic Hospitals during the Obama Administration.
Let me illustrate what drives the growth in a hospital organization’s Net Assets by focusing on the largest Catholic Hospital Organization, Ascension Health.
At the end of its 2009 fiscal year, on June 30, 2009, Ascension Health had total Net Assets of $8.3 bil. At its most recent March 31, 2011 balance sheet, twenty one months later, its total Net Assets have grown to $11.1 bil, or an increase of $2.8 bil.
Let me lay out the key components of this $2.8 bil increase in Ascension Health’s Net Assets.
For the most recent 21 Months, Ascension Health generated:
…Net Hospital Operating Income of…………........ $950 mil
…Non-operating Investment Returns of..........$1,783 mil
…Other items-net of…………………………………..........$64 mil
= Total increase in Net Assets……………............$2,797 mil
Yeah, that’s right, due mainly to the substantial strengthening of the US economy in the past 21 months, Ascension Health’s total Investment Returns of $1,783 mil, were nearly double its Net Operating Income from its hospital operations of $950 mil over the same period.
Here are these 22 Catholic Hospital Organizations:
.........Hospital Organization...............HQs.....Fiscal Year End(FYE)
Ascension Health.....................St Louis, MO..............June
Catholic Health Initiatives........Denver, CO...............June
Providence Health....................Seattle, WA...............Dec
Trinity Health...........................Novi, MI..................June
Catholic Healthcare West..........San Fran, CA.............June
Catholic Health East..................Newton Square, PA...Dec
Sisters Charity Leavenworth......Lenexa, KS...............Dec
Sisters of Mercy Health System..St Louis, MO.............June
Christus Health.........................Houston, TX..............June
Marian Health System...............Tulsa, OK...................Dec
Catholic Health Partners...........Cincinnati, OH...........Dec
St Joseph Health System...........Orange, CA................June
Hospital Sisters Services...........Springfield, IL...........June
Franciscan Alliance..................Mishawaka, IN...........Dec
SSM Health Care........................St Louis, MO..............Dec
Saint Francis Health System......Tulsa, OK..................June
PeaceHealth.............................Bellevue, WA.............June
Via Christi Health.....................Wichita, KS................Sep
OSF Healthcare System.............Peoria, IL..................Sep
Ministry Health Care................Milwaukee, WI...........Sep
Catholic Health Services...........Long Island, NY.........Dec
Bon Secours Health System.......Baltimore, MD..........Aug
And below here are these 22 Catholic Hospital Organizations’ Net Asset amounts, and their increases over roughly the most recent two years.
...............................................................Two Years
...................................Most Recent........Earlier FYE
..................................Balance Sheet......Balance Sheet
...............................................Net.....................Net......Increase
Hospital Group..........Date....Assets......Date....Assets..Amount..%
...........................................mils of $s.................mils of $s....
Ascension Health.....Mar 11..11,072....Jun 09..8,275...2,797..34%
Cath Hlth Initives.....Mar 11....7,121....Jun 09..5,505....1,616..29%
Providence Health....Mar 11...5,254.....Dec 08..3,911...1,343..34%
Trinity Health...........Mar 11...4,992.....Jun 09..4,030.....962..24%
Cath Hlthcare West...Mar 11...4,937.....Jun 09..3,622...1,315..36%
Cath Health East.......Mar 11...2,847.....Dec 08..1,978......869..44%
Sistrs Char Lvnwrth..Mar 11...2,784.....Dec 08..2,571......213...8%
Sistrs Mrcy Hlth Sys.Dec 10...2,507.....Jun 09..2,118......389..18%
Christus Health.........Mar 11...2,434.....Jun 09..2,119......315..15%
Marian Health Syst...Dec 10...2,337.....Dec 08..2,103......234..11%
Cath Hlth Partners....Mar 11...2,314.....Dec 08...1,614.....700..43%
St Joseph Hlth Sys....Mar 11...2,676.....Jun 09..2,076.....600..29%
Hospital Ssters Svcs..Mar 11...2,016.....Jun 09..1,697.....319..19%
Franciscan Alliance...Mar 11...1,985.....Dec 08..1,463.....522..36%
SSM Health Care........Mar 11...1,501.....Dec 08.....942.....559..59%
St Francis Hlth Syst...Mar 11...1,230.....Jun 09.....946.....284..30%
PeaceHealth..............Mar 11...1,019.....Jun 09.....897.....122..14%
Via Christi Health......Mar 11......990.....Sep 09.....846.....144..17%
OSF Hlthcare System.Mar 11......954.....Sep 09.....684.....270..39%
Ministry Health Care.Mar 11......880.....Sep 08.....674.....206..31%
Cath Hlth Services.....Mar 11......852.....Dec 08.....561.....291..52%
Bon Secours Hlth Sys.Feb 11......851.....Aug 09.....703.....148..21%
Total 22 Hospital
.....Organizations.................63,553................49,335..14,218.29%
Yeah, that's right, all 22 Catholic Hospital Groups registered increases in their Net Assets in the past two years. And all of these increases were very healthy.
In my next post, I’ll do a similar analysis of Net Assets in the past two years of many of the numerous huge Non-Catholic, Non-Profit Hospital Organizations.
And then in later posts, I’ll be analyzing the Operating Results of both Big Catholic Hospital and many Big non-Catholic Hospital Organizations in the most recent three years.
But the question that I think has to be answered....In all fairness, just like Health Insurance Corps should, shouldn't Hospital Organizations also be reducing their stiff prices in order to both patriotically and compassionately help reduce total US health care costs, to help suffering US individual hospital patients, to ease the health care burdens on US businesses, and to soften both the crushing US Federal Deficit and the many State Government severely-stressed Budgets?
However, in near miraculous fashion, this financial strength of these Catholic Hospitals has been resurrected in the past two years, due mainly to many wise actions by the Obama Administration, by the Fed, and by the US Congress, which created a US economic infrastructure which permitted US large businesses to flourish.
From an extensive review of the financial statements of Catholic Hospitals, I found 22 of them with Net Assets (i.e. Excess of Total Assets over Total Liabilities) of more than $800 mil each. These financial statements were found mainly in two very fine Internet sources: DAC Bond and EMMA (i.e. Electronic Municipal Market Access of the Municipal Securities Rulemaking Board).
These 22 Catholic Hospital Organizations had total Net Assets of $63.55 bil at the most recent balance sheet date, which was March 31, 2011 for most of them.
In comparison, the total Net Assets of these same 22 Catholic Hospital Organization was $49.33 bil at their respective fiscal year ends of the closest date to two years earlier.
Thus, the Net Assets of these 22 Catholic Hospital Organizations increased by $14.22 bil, or by 29%, in the most recent two years.
When you think about it, that 29% Net Asset growth in only two years is just incredible. The overwhelming majority of the Net Assets balance at any time is the cumulative tax-free profits, both from hospital operations and from investments, since the inception of the hospital organizations.
In just the most recent two years, these 22 Catholic Hospital Organizations generated a 29% profit growth on their Net Asset balance of two years ago, which was accumulated over decades and decades of hospital operations and investment returns.
Clearly, the executives of Catholic Hospitals, all employees of Catholic Hospitals, the Board of Directors of Catholic Hospitals, and the bondholders of these Catholic Hospitals have to all be elated with what has happened with the financial strength of their Catholic Hospitals during the Obama Administration.
Let me illustrate what drives the growth in a hospital organization’s Net Assets by focusing on the largest Catholic Hospital Organization, Ascension Health.
At the end of its 2009 fiscal year, on June 30, 2009, Ascension Health had total Net Assets of $8.3 bil. At its most recent March 31, 2011 balance sheet, twenty one months later, its total Net Assets have grown to $11.1 bil, or an increase of $2.8 bil.
Let me lay out the key components of this $2.8 bil increase in Ascension Health’s Net Assets.
For the most recent 21 Months, Ascension Health generated:
…Net Hospital Operating Income of…………........ $950 mil
…Non-operating Investment Returns of..........$1,783 mil
…Other items-net of…………………………………..........$64 mil
= Total increase in Net Assets……………............$2,797 mil
Yeah, that’s right, due mainly to the substantial strengthening of the US economy in the past 21 months, Ascension Health’s total Investment Returns of $1,783 mil, were nearly double its Net Operating Income from its hospital operations of $950 mil over the same period.
Here are these 22 Catholic Hospital Organizations:
.........Hospital Organization...............HQs.....Fiscal Year End(FYE)
Ascension Health.....................St Louis, MO..............June
Catholic Health Initiatives........Denver, CO...............June
Providence Health....................Seattle, WA...............Dec
Trinity Health...........................Novi, MI..................June
Catholic Healthcare West..........San Fran, CA.............June
Catholic Health East..................Newton Square, PA...Dec
Sisters Charity Leavenworth......Lenexa, KS...............Dec
Sisters of Mercy Health System..St Louis, MO.............June
Christus Health.........................Houston, TX..............June
Marian Health System...............Tulsa, OK...................Dec
Catholic Health Partners...........Cincinnati, OH...........Dec
St Joseph Health System...........Orange, CA................June
Hospital Sisters Services...........Springfield, IL...........June
Franciscan Alliance..................Mishawaka, IN...........Dec
SSM Health Care........................St Louis, MO..............Dec
Saint Francis Health System......Tulsa, OK..................June
PeaceHealth.............................Bellevue, WA.............June
Via Christi Health.....................Wichita, KS................Sep
OSF Healthcare System.............Peoria, IL..................Sep
Ministry Health Care................Milwaukee, WI...........Sep
Catholic Health Services...........Long Island, NY.........Dec
Bon Secours Health System.......Baltimore, MD..........Aug
And below here are these 22 Catholic Hospital Organizations’ Net Asset amounts, and their increases over roughly the most recent two years.
...............................................................Two Years
...................................Most Recent........Earlier FYE
..................................Balance Sheet......Balance Sheet
...............................................Net.....................Net......Increase
Hospital Group..........Date....Assets......Date....Assets..Amount..%
...........................................mils of $s.................mils of $s....
Ascension Health.....Mar 11..11,072....Jun 09..8,275...2,797..34%
Cath Hlth Initives.....Mar 11....7,121....Jun 09..5,505....1,616..29%
Providence Health....Mar 11...5,254.....Dec 08..3,911...1,343..34%
Trinity Health...........Mar 11...4,992.....Jun 09..4,030.....962..24%
Cath Hlthcare West...Mar 11...4,937.....Jun 09..3,622...1,315..36%
Cath Health East.......Mar 11...2,847.....Dec 08..1,978......869..44%
Sistrs Char Lvnwrth..Mar 11...2,784.....Dec 08..2,571......213...8%
Sistrs Mrcy Hlth Sys.Dec 10...2,507.....Jun 09..2,118......389..18%
Christus Health.........Mar 11...2,434.....Jun 09..2,119......315..15%
Marian Health Syst...Dec 10...2,337.....Dec 08..2,103......234..11%
Cath Hlth Partners....Mar 11...2,314.....Dec 08...1,614.....700..43%
St Joseph Hlth Sys....Mar 11...2,676.....Jun 09..2,076.....600..29%
Hospital Ssters Svcs..Mar 11...2,016.....Jun 09..1,697.....319..19%
Franciscan Alliance...Mar 11...1,985.....Dec 08..1,463.....522..36%
SSM Health Care........Mar 11...1,501.....Dec 08.....942.....559..59%
St Francis Hlth Syst...Mar 11...1,230.....Jun 09.....946.....284..30%
PeaceHealth..............Mar 11...1,019.....Jun 09.....897.....122..14%
Via Christi Health......Mar 11......990.....Sep 09.....846.....144..17%
OSF Hlthcare System.Mar 11......954.....Sep 09.....684.....270..39%
Ministry Health Care.Mar 11......880.....Sep 08.....674.....206..31%
Cath Hlth Services.....Mar 11......852.....Dec 08.....561.....291..52%
Bon Secours Hlth Sys.Feb 11......851.....Aug 09.....703.....148..21%
Total 22 Hospital
.....Organizations.................63,553................49,335..14,218.29%
Yeah, that's right, all 22 Catholic Hospital Groups registered increases in their Net Assets in the past two years. And all of these increases were very healthy.
In my next post, I’ll do a similar analysis of Net Assets in the past two years of many of the numerous huge Non-Catholic, Non-Profit Hospital Organizations.
And then in later posts, I’ll be analyzing the Operating Results of both Big Catholic Hospital and many Big non-Catholic Hospital Organizations in the most recent three years.
But the question that I think has to be answered....In all fairness, just like Health Insurance Corps should, shouldn't Hospital Organizations also be reducing their stiff prices in order to both patriotically and compassionately help reduce total US health care costs, to help suffering US individual hospital patients, to ease the health care burdens on US businesses, and to soften both the crushing US Federal Deficit and the many State Government severely-stressed Budgets?
Monday, June 6, 2011
Publicly-held Big Hospital Profits Increase Sharply in Most Recent Three Years
In the present US Deficit debate, the focus has principally been on reducing the staggering health care costs. The Republican Plan is to eventually kill Medicare as it presently works for many elderly US citizens, and to require these older Americans to instead obtain and pay for a good chunk of their own private health insurance.
In an earlier post on Big Health Insurance Corps, I showed how unwise this Republican plan is because these older Americans, after they retire, would be paying health insurance premiums to Big Health Insurance Corps that have generated clearly windfall profits for many years.
And in that same past post, I also showed that total health care costs could be reduced by roughly $2.0 trillion over the next 20 years, if the US went to a single-payer system, where the estimated total profits of all Health Insurance Corps would be eliminated, and thus future health care costs would be reduced by a like amount.
And in that same past post, I further showed that roughly half of that $2 trillion in future estimated total health care costs over the next 20 years could be eliminated if the US kept the current Affordable Health Care Plan, but the US Government and State Governments, as well as the State Insurance Bodies, adopted wise initiatives which would cut in half the present Health Insurance Industry 12% annual profit increase, which equates to a clearly windfall 22% annual EPS increase. This 50% annual profit growth cut for the Health Insurance Industry from 12% to 6% would eliminate roughly $1 trillion in future health care costs over the next 20 years.
But to wisely take cuts in future health care costs to a completely different level, it is necessary to study thoroughly the past financial statements of all US hospital systems….the For-Profit Publicly Held Ones, the For-Profit Private Ones, the Governmental Ones, and by far the largest hospital types of them all: the “Non-Profit” Ones.
The salient questions that need to be answered are…
…..Just how profitable have each of these hospital organization types been?
…..What has been the profit trend?
…..How will these past profits change in the future, once the Affordable Health Care Plan totally kicks in?
.....And just how financially strong are these hospital organizations?
If designed wisely, any excessive profits eliminated from any of these hospital organizations should directly reduce US future health care costs. This will not only dramatically reduce the US Deficit, but will also boost US economic growth, and thus private sector job creation.
In this first post on hospital profits, I am studying the publicly-held, For-profit Hospitals, which file with the SEC.
Here are the 7 hospital organizations, which are publicly-held:
…………………………………………….…………...............# of
……………………………………………...............HQs…Hospitals.
Hospital Corp of America (HCA)……….....TN……..164(1)
Community Health Systems (CHS)………..TN……..130
Health Management Associates (HMA)….FL……….59
Lifepoint Hospitals (LPT)………………….....TN……....52
Tenet Healthcare (THC)…………………........TX……….49
Universal Health Services (UHS)…………...PA………32(2)
Iasis Healthcare (IHC)…………………….......TN……….16
Total Number of Hospitals………………………….......502
(1) In addition, HCA also operates 106 free-standing Surgical Centers.
(2) In addition, UHS also operates 206 Behavioral Health Centers.
Here’s the Total Core Pretax Income for all seven of these hospital organizations for the most recent four years:
2010…..$4,207 mil, up 16% over 2009, and up 141% over 2007
2009…..$3,642 mil, up 59% over 2008
2008…..$2,285 mil, up 31% over 2007
2007…..$1,749 mil
Yeah…..just an incredibly strong earnings track record.
And here’s the Total Operating Revenues for all seven of these hospital organizations for the most recent four years:
2010…..$69,341 mil, up 5% over 2009, and up 26% over 2007
2009…..$66,258 mil, up 7% over 2008
2008…..$61,969 mil, up 12% over 2007
2007…..$55,240 mil
And here’s the resultant Core Pretax Income Margin Percentages in these four years (i.e. Total Core Pretax Income divided by Total Revenues):
2010…..6.07%
2009…..5.52%
2008…..3.69%
2007…..3.17%
When you review the above three charts, you have to conclude the following….just an incredibly strong operating trend.
But on the downside, a very significant portion of the Total Revenues of these hospitals came from two customers: Medicare and Medicaid, with both of these government programs being under severe financial pressure, and adding much to the US Debt load.
But you need to look further in these financial statements.
All seven of these hospital organizations are aggressive aquirors of other hospital organizations. Thus, they have a lot of Goodwill on their balance sheets, as well as an incredibly high amount of Total Interest-bearing Debt.
In fact, the Total Interest-bearing Debt Level of these seven hospital organizations is $50.9 bil. And their Total Equity is a negative $1.6 bil. Also, their Total Property, Plant and Equipment is $30.7 bil, yeah that is only 60% of their Total Interest-bearing Debt. So clearly, these are highly leveraged hospitals, nothing like the huge “Non-profit” hospital category.
These 7 hospitals organizations generated a strong $4,207 mil in Total Core Pretax Income in 2010, despite an imbedded burdensome interest expense of $3,638 mil. Just think what their earnings will look like when they get to a much more modest Debt/Equity mix.
They also generate substantial cash flow from operations, which totaled $6,319 mil in 2010, or precisely 50% more than their 2010 Total Core Pretax Income. These hospital organizations can use this very healthy amount of cash flow from operations to reduce their high level of debt, and thus future interest expense, to modernize their hospital infrastructure, and/or to grow their hospital organization, and their future earnings, by making additional prudent hospital acquisitions.
Bad Debt Expense of a massive $6,794 mil is imbedded in their 2010 Core Pretax Income as a charge. Thus Bad Debt Expense is 61% higher than their 2010 Core Pretax Income. And this Bad Debt Expense doesn’t include Charity Care and Uninsured Discounts they granted, which are also both substantial in amount.
When the Affordable Health Care Plan totally kicks in, many of the presently uninsured will get insurance. Thus, a very significant portion of these Bad Debt Expenses will be eliminated from the income statement. Also, the amount of Revenues generated will be increased significantly by the current Charity Care given and the Uninsured Discounts granted, where presently, in both cases, the revenue is foregone.
Thus, I think there will be a significant uptick in future earnings for all hospital organizations due to much lower Bad Debt Expenses, and the reduction of Charity Care and Uninsured Discounts.
In addition, there will be a significant uptick in future earnings for all hospital organizations due to the increase in the number of hospital patients, who will have insurance when the new Affordable Health Care Plan totally kicks in.
Granted, the hospital industry agreed to pony in some money in its highly successful negotiations with the Obama Administration and the US Congress over health care. But I think it was a mere pittance in comparison to its above earnings enhancers.
Here’s the individual hospital organization Core Pretax Income (PTI) for the most recent four years:
…………………..Core Pretax Income (Loss)…........Three Year
……………...2010……2009…..2008……2007…....% Increase
………….………(millions of dollars)………..
HCA (1)…..2,354….2,002…..1,170……927………....154%
CHS (2)……..508……..446……..359…….134………....279%
UHS (3)……..481……..475……..357…….319…………...51%
HMA(4)…….287……..228……..147…….192…………...49%
LPT ….……...241……..222……..209…….202…………...19%
THC (5)……..215……..139……...(44)……(96)………....324%
IHC (6)……...121……..130……….87……...71…………...70%
Total……...4,207….3,642…..2,285….1,749………....141%
(1) HCA 2010 Core PTI excludes asset impairment charges. Its 2007 Core PTI excludes gains on sales of facilities.
(2) CHS 2007 Core PTI excludes loss on debt extinguishment.
(3) UHS 2010 Core PTI excludes transaction cost charges.
(4) HMA 2009 Core PTI excludes gain on debt extinguishment. Its 2008 Core PTI excludes both gain on asset sales and gain on debt extinguishment.
(5) THC 2010 Core PTI excludes loss on debt extinguishment. Its 2009 Core PTI excludes both gain on debt extinguishment and litigation charges. And its 2008 Core PTL excludes both gain on sale of investments and litigation charges.
(6) IHC 2009 Core PTI excludes goodwill impairment charge.
Five of the seven hospital organizations disclosed all of their Uncompensated Care items: Charity Care Given and Uninsured Discounts Granted, and Bad Debt Expense. Here is the Total Uncompensated Care (TUC) amounts, and as a percentage of Total Core Pretax Income (PTI), for these five hospital organizations for the most recent four years:
………..Charity Care
…………....Plus…………...Bad………....Total…………...TUC
………...Uninsured……..Debt…Uncompensated…as % of
………....Discounts…...Expense….Care (TUC)………PTI
…………......……(millions of dollars)
2010……10,203……….6,152….…....16,355………..425%
2009……..7,873……….6,498…….....14,371………..437%
2008……..6,368………..6,214…….....12,582………..633%
2007……..5,336……….5,480…….....10,816………..733%
The reduction in Bad Debt Expense in 2010 is due to HCA granting much higher uninsured discounts in 2010. This policy change significantly increased uninsured discounts, while at the same time, lowering Bad Debt Expense.
These five hospital corps increased their Total Core Pretax Income by 161% in the last three years (from 2007 to 2010), while they also increased their Total Uncompensated Care (TUC) by 51% over the same period. When the new Affordable Health Care Plan totally kicks in, rather than increasing, as it has in the past, the Total Uncompensated Care should decline sharply.
Frankly, it just doesn’t seem right to me for these publicly-held, for-profit hospitals to have already increased their earnings so sharply in the most recent three years, and to also be able to increase them even more sharply, after the new Affordable Health Care Plan totally kicks in, while at the same time, their main customers, Medicare and Medicaid, are suffering so severely.
I think the fair thing for the US Government to do is to remove the excessive profits on the books of all hospitals by requiring a like amount of lower Medicare and Medicaid fees to be charged by all hospitals.
Just how much excessive hospital profit is there over the next 20 years? I think it’s much more than the roughly $1 trillion of excessive profits of the Health Insurance Industry in the next 20 years, that I explained in my past post on the Health Insurance Industry robust profits.
Next I will be studying the gargantuan Hospital organization category called “Non-profit”. This study will take awhile, because there are so many of them, and also because their audited financial statements aren’t that easy to find. The State of Indiana is way ahead of the curve here on audited financial statement disclosures of its hospitals. The rest of the country, including the US Government, would be wise to follow Indiana’s prescient lead here.
From my quick review so far of some of their most recent financial statements, that “Non-profit” label is clearly inaccurate…..and many of them have boosted their operating earnings substantially in the most recent year or in the most recent two years.
Also, mostly due to wise Obama Administration and also wise Fed actions, which have created a US economic environment that permits businesses to flourish, the “Net Assets” of these Non-profit hospitals have truly gone to the moon, from where they were only two years ago. This recent upward jolt of "Net Assets" results from the recent superb return on the massive treasure chest of Investments held by Non-profit Hospitals, which were accumulated primarily from decades of untaxed investment and operating earnings.
And when the Affordable Health Care Plan totally kicks in, just like the Health Insurance companies, the operating earnings of the “Non-profit” Hospitals will also increase even more markedly.
But I have to ask…..why all of this government action to make the already financially strong Health Insurance and Hospital Industries both so much financially stronger…..especially since it is all done on the backs of US citizens, on the backs of all US non-health care businesses, and on the back of the US Debt level?
In an earlier post on Big Health Insurance Corps, I showed how unwise this Republican plan is because these older Americans, after they retire, would be paying health insurance premiums to Big Health Insurance Corps that have generated clearly windfall profits for many years.
And in that same past post, I also showed that total health care costs could be reduced by roughly $2.0 trillion over the next 20 years, if the US went to a single-payer system, where the estimated total profits of all Health Insurance Corps would be eliminated, and thus future health care costs would be reduced by a like amount.
And in that same past post, I further showed that roughly half of that $2 trillion in future estimated total health care costs over the next 20 years could be eliminated if the US kept the current Affordable Health Care Plan, but the US Government and State Governments, as well as the State Insurance Bodies, adopted wise initiatives which would cut in half the present Health Insurance Industry 12% annual profit increase, which equates to a clearly windfall 22% annual EPS increase. This 50% annual profit growth cut for the Health Insurance Industry from 12% to 6% would eliminate roughly $1 trillion in future health care costs over the next 20 years.
But to wisely take cuts in future health care costs to a completely different level, it is necessary to study thoroughly the past financial statements of all US hospital systems….the For-Profit Publicly Held Ones, the For-Profit Private Ones, the Governmental Ones, and by far the largest hospital types of them all: the “Non-Profit” Ones.
The salient questions that need to be answered are…
…..Just how profitable have each of these hospital organization types been?
…..What has been the profit trend?
…..How will these past profits change in the future, once the Affordable Health Care Plan totally kicks in?
.....And just how financially strong are these hospital organizations?
If designed wisely, any excessive profits eliminated from any of these hospital organizations should directly reduce US future health care costs. This will not only dramatically reduce the US Deficit, but will also boost US economic growth, and thus private sector job creation.
In this first post on hospital profits, I am studying the publicly-held, For-profit Hospitals, which file with the SEC.
Here are the 7 hospital organizations, which are publicly-held:
…………………………………………….…………...............# of
……………………………………………...............HQs…Hospitals.
Hospital Corp of America (HCA)……….....TN……..164(1)
Community Health Systems (CHS)………..TN……..130
Health Management Associates (HMA)….FL……….59
Lifepoint Hospitals (LPT)………………….....TN……....52
Tenet Healthcare (THC)…………………........TX……….49
Universal Health Services (UHS)…………...PA………32(2)
Iasis Healthcare (IHC)…………………….......TN……….16
Total Number of Hospitals………………………….......502
(1) In addition, HCA also operates 106 free-standing Surgical Centers.
(2) In addition, UHS also operates 206 Behavioral Health Centers.
Here’s the Total Core Pretax Income for all seven of these hospital organizations for the most recent four years:
2010…..$4,207 mil, up 16% over 2009, and up 141% over 2007
2009…..$3,642 mil, up 59% over 2008
2008…..$2,285 mil, up 31% over 2007
2007…..$1,749 mil
Yeah…..just an incredibly strong earnings track record.
And here’s the Total Operating Revenues for all seven of these hospital organizations for the most recent four years:
2010…..$69,341 mil, up 5% over 2009, and up 26% over 2007
2009…..$66,258 mil, up 7% over 2008
2008…..$61,969 mil, up 12% over 2007
2007…..$55,240 mil
And here’s the resultant Core Pretax Income Margin Percentages in these four years (i.e. Total Core Pretax Income divided by Total Revenues):
2010…..6.07%
2009…..5.52%
2008…..3.69%
2007…..3.17%
When you review the above three charts, you have to conclude the following….just an incredibly strong operating trend.
But on the downside, a very significant portion of the Total Revenues of these hospitals came from two customers: Medicare and Medicaid, with both of these government programs being under severe financial pressure, and adding much to the US Debt load.
But you need to look further in these financial statements.
All seven of these hospital organizations are aggressive aquirors of other hospital organizations. Thus, they have a lot of Goodwill on their balance sheets, as well as an incredibly high amount of Total Interest-bearing Debt.
In fact, the Total Interest-bearing Debt Level of these seven hospital organizations is $50.9 bil. And their Total Equity is a negative $1.6 bil. Also, their Total Property, Plant and Equipment is $30.7 bil, yeah that is only 60% of their Total Interest-bearing Debt. So clearly, these are highly leveraged hospitals, nothing like the huge “Non-profit” hospital category.
These 7 hospitals organizations generated a strong $4,207 mil in Total Core Pretax Income in 2010, despite an imbedded burdensome interest expense of $3,638 mil. Just think what their earnings will look like when they get to a much more modest Debt/Equity mix.
They also generate substantial cash flow from operations, which totaled $6,319 mil in 2010, or precisely 50% more than their 2010 Total Core Pretax Income. These hospital organizations can use this very healthy amount of cash flow from operations to reduce their high level of debt, and thus future interest expense, to modernize their hospital infrastructure, and/or to grow their hospital organization, and their future earnings, by making additional prudent hospital acquisitions.
Bad Debt Expense of a massive $6,794 mil is imbedded in their 2010 Core Pretax Income as a charge. Thus Bad Debt Expense is 61% higher than their 2010 Core Pretax Income. And this Bad Debt Expense doesn’t include Charity Care and Uninsured Discounts they granted, which are also both substantial in amount.
When the Affordable Health Care Plan totally kicks in, many of the presently uninsured will get insurance. Thus, a very significant portion of these Bad Debt Expenses will be eliminated from the income statement. Also, the amount of Revenues generated will be increased significantly by the current Charity Care given and the Uninsured Discounts granted, where presently, in both cases, the revenue is foregone.
Thus, I think there will be a significant uptick in future earnings for all hospital organizations due to much lower Bad Debt Expenses, and the reduction of Charity Care and Uninsured Discounts.
In addition, there will be a significant uptick in future earnings for all hospital organizations due to the increase in the number of hospital patients, who will have insurance when the new Affordable Health Care Plan totally kicks in.
Granted, the hospital industry agreed to pony in some money in its highly successful negotiations with the Obama Administration and the US Congress over health care. But I think it was a mere pittance in comparison to its above earnings enhancers.
Here’s the individual hospital organization Core Pretax Income (PTI) for the most recent four years:
…………………..Core Pretax Income (Loss)…........Three Year
……………...2010……2009…..2008……2007…....% Increase
………….………(millions of dollars)………..
HCA (1)…..2,354….2,002…..1,170……927………....154%
CHS (2)……..508……..446……..359…….134………....279%
UHS (3)……..481……..475……..357…….319…………...51%
HMA(4)…….287……..228……..147…….192…………...49%
LPT ….……...241……..222……..209…….202…………...19%
THC (5)……..215……..139……...(44)……(96)………....324%
IHC (6)……...121……..130……….87……...71…………...70%
Total……...4,207….3,642…..2,285….1,749………....141%
(1) HCA 2010 Core PTI excludes asset impairment charges. Its 2007 Core PTI excludes gains on sales of facilities.
(2) CHS 2007 Core PTI excludes loss on debt extinguishment.
(3) UHS 2010 Core PTI excludes transaction cost charges.
(4) HMA 2009 Core PTI excludes gain on debt extinguishment. Its 2008 Core PTI excludes both gain on asset sales and gain on debt extinguishment.
(5) THC 2010 Core PTI excludes loss on debt extinguishment. Its 2009 Core PTI excludes both gain on debt extinguishment and litigation charges. And its 2008 Core PTL excludes both gain on sale of investments and litigation charges.
(6) IHC 2009 Core PTI excludes goodwill impairment charge.
Five of the seven hospital organizations disclosed all of their Uncompensated Care items: Charity Care Given and Uninsured Discounts Granted, and Bad Debt Expense. Here is the Total Uncompensated Care (TUC) amounts, and as a percentage of Total Core Pretax Income (PTI), for these five hospital organizations for the most recent four years:
………..Charity Care
…………....Plus…………...Bad………....Total…………...TUC
………...Uninsured……..Debt…Uncompensated…as % of
………....Discounts…...Expense….Care (TUC)………PTI
…………......……(millions of dollars)
2010……10,203……….6,152….…....16,355………..425%
2009……..7,873……….6,498…….....14,371………..437%
2008……..6,368………..6,214…….....12,582………..633%
2007……..5,336……….5,480…….....10,816………..733%
The reduction in Bad Debt Expense in 2010 is due to HCA granting much higher uninsured discounts in 2010. This policy change significantly increased uninsured discounts, while at the same time, lowering Bad Debt Expense.
These five hospital corps increased their Total Core Pretax Income by 161% in the last three years (from 2007 to 2010), while they also increased their Total Uncompensated Care (TUC) by 51% over the same period. When the new Affordable Health Care Plan totally kicks in, rather than increasing, as it has in the past, the Total Uncompensated Care should decline sharply.
Frankly, it just doesn’t seem right to me for these publicly-held, for-profit hospitals to have already increased their earnings so sharply in the most recent three years, and to also be able to increase them even more sharply, after the new Affordable Health Care Plan totally kicks in, while at the same time, their main customers, Medicare and Medicaid, are suffering so severely.
I think the fair thing for the US Government to do is to remove the excessive profits on the books of all hospitals by requiring a like amount of lower Medicare and Medicaid fees to be charged by all hospitals.
Just how much excessive hospital profit is there over the next 20 years? I think it’s much more than the roughly $1 trillion of excessive profits of the Health Insurance Industry in the next 20 years, that I explained in my past post on the Health Insurance Industry robust profits.
Next I will be studying the gargantuan Hospital organization category called “Non-profit”. This study will take awhile, because there are so many of them, and also because their audited financial statements aren’t that easy to find. The State of Indiana is way ahead of the curve here on audited financial statement disclosures of its hospitals. The rest of the country, including the US Government, would be wise to follow Indiana’s prescient lead here.
From my quick review so far of some of their most recent financial statements, that “Non-profit” label is clearly inaccurate…..and many of them have boosted their operating earnings substantially in the most recent year or in the most recent two years.
Also, mostly due to wise Obama Administration and also wise Fed actions, which have created a US economic environment that permits businesses to flourish, the “Net Assets” of these Non-profit hospitals have truly gone to the moon, from where they were only two years ago. This recent upward jolt of "Net Assets" results from the recent superb return on the massive treasure chest of Investments held by Non-profit Hospitals, which were accumulated primarily from decades of untaxed investment and operating earnings.
And when the Affordable Health Care Plan totally kicks in, just like the Health Insurance companies, the operating earnings of the “Non-profit” Hospitals will also increase even more markedly.
But I have to ask…..why all of this government action to make the already financially strong Health Insurance and Hospital Industries both so much financially stronger…..especially since it is all done on the backs of US citizens, on the backs of all US non-health care businesses, and on the back of the US Debt level?
Wednesday, June 1, 2011
Big Health Insurance Corps in the 2000s: Blistering Profit Growth
From a review of SEC filings, here are the 12 publicly-held Health Insurance Corps with Core Pretax Income (PTI) above $100 mil in 2010:
……………………………...............2010
……………………………................PTI……..Mix
……………………...........HQs..(mils of $s)
UnitedHealth……….....MN…..7,383…..34.5%
WellPoint…………........IN…….4,354…..20.4%
Aetna………………........CT….…2,644…..12.4%
Cigna……………….........PA……1,870…....8.7%
Humana…………….......KY……1,750…....8.2%
Coventry(1).......………MD……..965……..4.5%
Assurant(2)......……….NY……..912……..4.3%
Amerigroup…............VA……..437……..2.0%
Health Net………….......CA……..331……..1.5%
HealthSpring………......TN……..309……..1.4%
Caremark Ulysses(3)..NY……..274……..1.3%
Centene……………........MO……..154……..0.7%
Total of all 12…………………..21,283…100.0%
(1) Coventry 2010 PTI excludes Provider Class Action Charge of $278 mil.
(2) Assurant 2010 PTI excludes Goodwill Impairment Charge of $306 mil.
(3) Caremark Ulysses was previously named Universal American.
As you can see from the above chart, just a few health insurance companies dominate the industry, with the Big 3 (UnitedHealth, WellPoint and Aetna) generating 67% of the total industry’s earnings in 2010 of the 12 largest health insurance corps. And when you also add in the next Big 4 (Cigna, Humana, Coventry, and Assurant), these Big 7 generated 93% of the total of the 12 largest health insurance corps.
For all 12 combined, here are the Total Core Pretax Income, Total Revenues, and Pretax Margin Percentage (PTI divided by Revenues) for the 2000s, by year:
…………...........Core………………….....Pretax
…………............PTI…...Revenues…Margin %
………….............(mils of dollars)
2000…..........4,000…..106,879…….3.8%
2001……........3,914…...108,809…….3.6%
2002……........4,122…...111,058…….3.7%
2003……........8,118…...120,568…….6.7%
2004…..........11,791…..137,738…….8.6%
2005…..........15,471…..175,958…….8.8%
2006…..........19,489…..227,818…….8.6%
2007…..........21,163…..250,994…….8.4%
2008…..........13,973…..272,115…….5.1%
2009…..........16,834…..287,751…….5.9%
2010…..........21,383…..295,107…….7.2%
Total for all
...11 Years…140,258…2,093,795…...6.7%
The above chart points to one of the key reasons that businesses and individuals have both been just devastated by very burdensome health care costs….they are both financing the profligate profits of the Big Health Insurance Corps.
As you can see from the above chart, the profits of the Health Insurance Corps were very reasonable at the end of the Clinton Administration in 2000, and also in the first two years of the Bush II Administration, in 2001 and in 2002.
But starting in 2003, these profits just started going to the moon, and continued their rapid ascent until the Great Recession hit in 2008.
For the 7 years from 2000 to 2007, the total profits of the publicly-held Health Insurance Industry increased by an incredible 421%, going from $4.0 bil in 2000 to $21.2 bil in 2007. This was more than 3 times these companies’ comparable period Total Revenue growth of 137%.
More saliently, this 421% pretax earnings growth of the Health Insurance Industry was 5.6 times the 75% growth of the 30 pristine Dow Industrials total pretax profits over the same 7 year period.
What about the core pretax earnings of individual companies from 2000 to 2007?
Let me leave out Cigna, because it also had a huge employee retirement and investment services business, as well as a life insurance business, and a re-insurance runoff business, all back then in the earlier part of the 2000s decade.
Well, all of the remaining Big 6 had just monster increases in earnings for that 7 year period from 2000 to 2007. Here are the percentage increases:
…..WellPoint…...+1,493%
…..Humana……..+1,031%
…..Aetna(1)……....+932%
…..Coventry……...+875%
…..UnitedHealth..+532%
…..Assurant……....+421%
(1) Aetna’s 2000 starting point Core PTI excludes Goodwill Write-off Charge of $310 mil.
Whoa, no wonder businesses and individuals have kept complaining about their sky high health insurance costs...so much of it was a massive transfer of wealth to the Big Health Insurance Corp as windfall profits.
And no wonder entrepreneurs pass on starting new businesses, or in expanding their existing businesses, given these incredibly high health care insurance costs. With both the rapidly and continually rising health care costs and energy costs, the risk/reward for starting or expanding a business has clearly turned from reward trumping risk a decade ago to way too much risk presently.
These windfall profits in the Big Health Insurance Industry during the heart of the Bush II Administration were consistent with the windfall profits in the Big Oil and Big US Defense Contractor industries during the same period. There just was so little US Government oversight of the profligate profits in these 3 industries. And the US Government financial coffers, all other US businesses, and US citizens are all now paying the severe price for this lack of US Government oversight.
So what’s happened after the peak earnings of this health care industry in 2007?
Well, first there was a substantial drop in the windfall profits in the start of the Great Recession in 2008.
Thereafter, despite much success in reining in some of the nosebleed premium increases of Big Health Insurance companies by diligent, very competent Health and Human Services Secretary Kathleen Sebelius, this powerful health insurance industry, which controls much of the US Congress and State legislatures, has still been able to successfully recharge its high profits, with its 2009 total profits up 20%, and with 2010 total profits up another 27%.
Thus, 2010 total profits for the Health Insurance industry even surpassed its previous peak industry profits of 2007.
Let me now focus on the Big 7 Health Insurance Corps from the time the Health Insurance industry hit its previous earnings peak in 2007. The total industry profits are up from 2007 to 2010, but only 3 of the Big 7 had Core Pretax Income increases from 2007 to 2010.
But what happened with EPS over the same period? EPS and EPS growth are what drive stock prices.
Well, all 7 of the Big 7 had nice EPS increases from 2007 to 2010.
How can that be? Well, it’s mainly due to the huge stock buyback programs in nearly all of these companies, including in all of the Big 3 (UnitedHealth, WellPoint, and Aetna).
Now let be even more specific in laying out what has happened to earnings in the Big Health Insurance Industry since there has been a change in Administration, beginning in 2009.
Here are the Core Pretax Income increases for each of the Big 7 Health Insurance Corps for the 2 years from 2008 to 2010:
…………….......Core Pretax Income….%
…………………....2010… ..2008…Increase
………………..........(mils of $s)
UnitedHealth..7,383.....4,624……60%
WellPoint….....4,354……3,122……39%
Aetna…………..2,644……2,174……22%
Cigna(1).………1,870……1,072……74%
Humana……….1,750………993……76%
Coventry………...965………572......69%
Assurant…….…..912…….…563…...62%
Total all 7.….19,878.....13,120……52%
(1) Cigna above 2008 Core PTI excludes Fair Value Guaranteed Minimum Business Adjustment Loss of $690 mil.
No, I’m not kidding, after these Big 7 Health Insurance Corps had a 437% increase in Total Core Pretax Income for the 7 years from 2000 to 2007, they piled on by generating a 52% Total Core Pretax Income increase for the most recent 2 years...2009 and 2010.
But that’s not even the total profit story here.
In comparison to this 52% Total Core Pretax Income increase, the after-tax Total Core Net Income of this industry for the most recent 2 years was a slightly higher 53%....that’s not much of a difference.
But just check out these differences between the after-tax Core Net Income and EPS percentage increases for the most recent 2 years:
..........................% Increase for 2 Years….....% Lower Average
.............................from 2008 to 2010………...Common Shares
………………......Core NI……EPS….Difference….Outstanding
UnitedHealth……56%.......71%.......+15%................9%
WellPoint(1)…….44%........81%.......+37%..............20%
Aetna……………...28%.......48%.......+20%...............13%
Assurant………….72%.......83%.......+11%.................6%
(1) WellPoint 2008 Core Net Income excludes a $481 mil tax benefit from a favorable audit settlement.
And this isn’t just a very recent 2 year financial engineering massive stock buyback strategy. It’s been going on for 4 or 5 years.
Below here is the Growth in Core Net Income, Growth in EPS, the Difference between the 2, and the % of Lower Average Common Shares Outstanding for the most recent 4 or 5 years for some of these Big Health Care Insurance Corps. This period includes in its center, the Great Recession.
…….…...............% Increase (Decrease)………...% Lower Average
…….............For 4 Years from 2006 to 2010...Common Shares
………………....Core NI……EPS……Difference….Outstanding
UnitedHealth….11%........38%.......+27%................19%
WellPoint………(7)%........44%.......+51%................35%
Coventry………..9%.........20%.......+11%..................9%
…………............% Increase (Decrease)……………% Lower Average
……............For 5 Years from 2005 to 2010……Common Shares
………………....Core NI……EPS……Difference……Outstanding
Aetna……………12%........61%.......+49%..................30%
Cigna……………..6%........49%.......+43%..................29%
Assurant……….32%........62%......+30%..................19%
The key point here is that in determining fair insurance premium prices for Big Health Insurance Corps to charge, they should be viewed in light of the percentage increase in EPS the health care insurance company is generating, not in light of the percentage increase in reported Pretax Income or increase in reported after-tax Net Income which the health care insurance company is generating. CEOs work for their stockholders, and thus EPS, and EPS growth, which drive stock prices, are the relevant measures of performance. CEOs also are huge stockholders of the company. Further, all corporate executives, and many other company employees, hold many stock options, and thus stock price, and EPS and EPS growth, are critically important to them, as well.
I think it would be very beneficial if the US Senate Committee, that handles Health Care, would now call in the CEOs of the Big 3 Health Insurance Corps for a public committee hearing, similar to what was done very effectively with the Big 5 Oil Corps, when tax subsidies were being studied, which proved to be very informative to the public.
I further think that this US Senate Committee should specifically request a very simple schedule from each of these CEOs, which shows for each year from 2003 to 2010, the actual annual percentage premium rate overall increase, and the percentage change from the previous year in the company’s Reported Pretax Income and also in its Core Pretax Income, in its Reported After-tax Net Income and also in its Core After-tax Net Income, and much more importantly, in its Reported Diluted EPS and also in its Core Diluted EPS.
And then each Big 3 Big Health Insurance CEO should explain publicly in this Senate Hearing how he/she justified each year’s overall premium rate increases, given the company’s profit situation in that year and in the immediately preceding year.
OK, so certainly these Big Health Insurance Corps have finally seen the light, and have priced out their new insurance premiums in light of their EPS growth in the first quarter of 2011. Actually, just the opposite….they have continued their unreasonably high premium pricing, and over a very inflated prior year base.
In the first quarter of 2011, the 7 Big Health Insurance Corps generated Total Pretax Earnings growth of 12%, which precisely matched their Total after-tax Net Income growth of 12%. But in their clearly more relevant EPS growth, these 7 Big Health Insurance Corps generated Total weighted EPS growth in the first quarter of 2011 of a much higher 22%, which is a massive 10% higher than their 12% earnings growth.
When inflation is exceedingly low, and these companies are generating 22% earnings growth over an already windfall profit first quarter 2010 earnings base, there is no way these Big Health Insurance Corps should be allowed to generate earnings like these, when health care costs are putting such severe financial pressure on US citizens, on US businesses, and on the US government, with its massive debt.
Here is a breakdown by each individual Big 7 Health Insurance Corps of Net Income growth vs. EPS growth in the first quarter of 2011.
% Increase (Decrease) for
First quarter 2011 over 2010:
………………......Core NI……EPS……Difference
UnitedHealth……13%........18%.........+5%
WellPoint…………..6%........24%.......+18%
Aetna…………….....4%........17%.......+13%
Cigna…………….....51%.......54%.........+3%
Humana…………...22%.......22%...........0%
Coventry…………..13%.......12%..........(1)%
Assurant………...(10)%........4%........+14%
Total of all 7……..12%.......22%........+10%
That 10% Difference spread is due to the substantial stock buybacks of many of these Big Health Insurance Corps. A substantial portion of the cash inflow from their windfall profits earned by most of these Big Health Insurance Corps are being transferred to their stockholders in stock buybacks, which has the add-on benefit of substantially growing their EPS, which further drives their stock prices higher…..Incredible creative financial engineering, but it’s a pyrrhic victory to the Big Health Insurance Corps, because it’s earned at the clear detriment to, and thus on the backs of, US citizens, US businesses, and the US Government.
In reviewing all of the above numbers, I have to conclude that there is no way these Health Care Insurance Corps could have possibly been able to justify their insurance premium increases in any year since 2003, given the outsized increases in their profits, and in their incredible EPS growth.
Frankly, I think US citizens and US businesses paying these clearly unreasonable insurance premiums should be demanding an insurance premium rollback in the prices they were charged.
Pundits keep talking about what the US debt, and what Medicare will look like in ten years and in twenty years. Well, check the following out.
In 2010, these 12 Big Health Insurance Corps generated pretax profits of $21.4 bil. If you grow that at 12% per year, which is what their earnings grew by in the first quarter of 2011, these 12 Big Health Insurance Corps will generate $66.4 bil of pretax profits in ten years, in just the year 2020, and will generate $206.3 bil of pretax profits in twenty years, in just the year 2030. And when you add all of the next twenty years from 2011 to 2030, the total profits of these 12 Big Health Insurance Corps would come to an incredible $1.726 trillion.
I think the best way to reduce this $1.726 trillion of projected health care costs over the next twenty years is to switch to a single-payer system, which if designed properly, should remove all $1.726 trillion of these unnecessary Health Insurance Corp profits.
I think the next best thing to do is to at least remove the excessive, windfall profits of Big Health Insurance Corps. For several reasons, my hunch is that any reasonable computation would conclude that at least $1.0 trillion of this $1.726 trillion of projected Big Health Insurance total profits are excessive, windfall profits.
First, if the US and State governments designed wise, effective initiatives which would cut that 12% annual earnings growth of these 12 Big Health Insurance Corps in half from 12% to 6%, the total profits of these health care insurance companies over the next 20 years would come to $834 bil, $892 bil less than what they would come to by using a 12% annual growth rate. And in all fairness, even when you bring down the annual earnings growth rate of these 12 Big Health Insurance Corps to 6%, that still equates to annual EPS growth of 16%, with the 10% add-on growth rate due to the substantial stock buybacks. Nearly all stockholders would be extremely happy investing in a company which generates annual EPS growth of 16%.
Second, with the new health care legislation, there will be a substantial growth in the insured starting in 2014, if I remember the date correctly. This will substantially boost that annual earnings growth rate in 2014 and 2015, and thus also boost the difference over the 20 year period.
Third, there is already substantial unreasonable windfall inflation in the 2010 health insurance company earnings starting point. In all fairness, a good chunk of this inflation should be removed, by staggering in this removal over time, through wise, effective initiatives of the US and State Governments.
And fourth, there are many more insurance corps than these 12 publicly-held Big Health Insurance Corps, which will elevate all of the numbers, and thus also the differences. There are not just many more smaller publicly-held corps in this industry, but there are also many private health insurance corps of all sizes, and even some "non-profit" ones which generate very nice profits.
And lastly, to bring down the US debt level, I think that just like other industries should do, the Health Insurance industry should be ponying in here in the tax area. I would consider closing the tax loopholes the Health Insurance industry presently gets in the timing of when they include their insurance premiums in taxable income, and in the timing of when they are able to deduct insurance claims that are not yet settled. These two are optimal tax changes to the Health Insurance industry because accounting-wise, there is no hit to reported earnings, since these two are both viewed as temporary tax differences under GAAP….the Health Insurance Corp pays the same amount of tax either way, it’s just the year the tax is paid that changes. But yet the CBO properly scores this tax change as a substantial tax inflow to the US government, which keeps growing in amount each year, to infinity.
Next to study…..hospitals, another very fertile area to reduce health care costs.
……………………………...............2010
……………………………................PTI……..Mix
……………………...........HQs..(mils of $s)
UnitedHealth……….....MN…..7,383…..34.5%
WellPoint…………........IN…….4,354…..20.4%
Aetna………………........CT….…2,644…..12.4%
Cigna……………….........PA……1,870…....8.7%
Humana…………….......KY……1,750…....8.2%
Coventry(1).......………MD……..965……..4.5%
Assurant(2)......……….NY……..912……..4.3%
Amerigroup…............VA……..437……..2.0%
Health Net………….......CA……..331……..1.5%
HealthSpring………......TN……..309……..1.4%
Caremark Ulysses(3)..NY……..274……..1.3%
Centene……………........MO……..154……..0.7%
Total of all 12…………………..21,283…100.0%
(1) Coventry 2010 PTI excludes Provider Class Action Charge of $278 mil.
(2) Assurant 2010 PTI excludes Goodwill Impairment Charge of $306 mil.
(3) Caremark Ulysses was previously named Universal American.
As you can see from the above chart, just a few health insurance companies dominate the industry, with the Big 3 (UnitedHealth, WellPoint and Aetna) generating 67% of the total industry’s earnings in 2010 of the 12 largest health insurance corps. And when you also add in the next Big 4 (Cigna, Humana, Coventry, and Assurant), these Big 7 generated 93% of the total of the 12 largest health insurance corps.
For all 12 combined, here are the Total Core Pretax Income, Total Revenues, and Pretax Margin Percentage (PTI divided by Revenues) for the 2000s, by year:
…………...........Core………………….....Pretax
…………............PTI…...Revenues…Margin %
………….............(mils of dollars)
2000…..........4,000…..106,879…….3.8%
2001……........3,914…...108,809…….3.6%
2002……........4,122…...111,058…….3.7%
2003……........8,118…...120,568…….6.7%
2004…..........11,791…..137,738…….8.6%
2005…..........15,471…..175,958…….8.8%
2006…..........19,489…..227,818…….8.6%
2007…..........21,163…..250,994…….8.4%
2008…..........13,973…..272,115…….5.1%
2009…..........16,834…..287,751…….5.9%
2010…..........21,383…..295,107…….7.2%
Total for all
...11 Years…140,258…2,093,795…...6.7%
The above chart points to one of the key reasons that businesses and individuals have both been just devastated by very burdensome health care costs….they are both financing the profligate profits of the Big Health Insurance Corps.
As you can see from the above chart, the profits of the Health Insurance Corps were very reasonable at the end of the Clinton Administration in 2000, and also in the first two years of the Bush II Administration, in 2001 and in 2002.
But starting in 2003, these profits just started going to the moon, and continued their rapid ascent until the Great Recession hit in 2008.
For the 7 years from 2000 to 2007, the total profits of the publicly-held Health Insurance Industry increased by an incredible 421%, going from $4.0 bil in 2000 to $21.2 bil in 2007. This was more than 3 times these companies’ comparable period Total Revenue growth of 137%.
More saliently, this 421% pretax earnings growth of the Health Insurance Industry was 5.6 times the 75% growth of the 30 pristine Dow Industrials total pretax profits over the same 7 year period.
What about the core pretax earnings of individual companies from 2000 to 2007?
Let me leave out Cigna, because it also had a huge employee retirement and investment services business, as well as a life insurance business, and a re-insurance runoff business, all back then in the earlier part of the 2000s decade.
Well, all of the remaining Big 6 had just monster increases in earnings for that 7 year period from 2000 to 2007. Here are the percentage increases:
…..WellPoint…...+1,493%
…..Humana……..+1,031%
…..Aetna(1)……....+932%
…..Coventry……...+875%
…..UnitedHealth..+532%
…..Assurant……....+421%
(1) Aetna’s 2000 starting point Core PTI excludes Goodwill Write-off Charge of $310 mil.
Whoa, no wonder businesses and individuals have kept complaining about their sky high health insurance costs...so much of it was a massive transfer of wealth to the Big Health Insurance Corp as windfall profits.
And no wonder entrepreneurs pass on starting new businesses, or in expanding their existing businesses, given these incredibly high health care insurance costs. With both the rapidly and continually rising health care costs and energy costs, the risk/reward for starting or expanding a business has clearly turned from reward trumping risk a decade ago to way too much risk presently.
These windfall profits in the Big Health Insurance Industry during the heart of the Bush II Administration were consistent with the windfall profits in the Big Oil and Big US Defense Contractor industries during the same period. There just was so little US Government oversight of the profligate profits in these 3 industries. And the US Government financial coffers, all other US businesses, and US citizens are all now paying the severe price for this lack of US Government oversight.
So what’s happened after the peak earnings of this health care industry in 2007?
Well, first there was a substantial drop in the windfall profits in the start of the Great Recession in 2008.
Thereafter, despite much success in reining in some of the nosebleed premium increases of Big Health Insurance companies by diligent, very competent Health and Human Services Secretary Kathleen Sebelius, this powerful health insurance industry, which controls much of the US Congress and State legislatures, has still been able to successfully recharge its high profits, with its 2009 total profits up 20%, and with 2010 total profits up another 27%.
Thus, 2010 total profits for the Health Insurance industry even surpassed its previous peak industry profits of 2007.
Let me now focus on the Big 7 Health Insurance Corps from the time the Health Insurance industry hit its previous earnings peak in 2007. The total industry profits are up from 2007 to 2010, but only 3 of the Big 7 had Core Pretax Income increases from 2007 to 2010.
But what happened with EPS over the same period? EPS and EPS growth are what drive stock prices.
Well, all 7 of the Big 7 had nice EPS increases from 2007 to 2010.
How can that be? Well, it’s mainly due to the huge stock buyback programs in nearly all of these companies, including in all of the Big 3 (UnitedHealth, WellPoint, and Aetna).
Now let be even more specific in laying out what has happened to earnings in the Big Health Insurance Industry since there has been a change in Administration, beginning in 2009.
Here are the Core Pretax Income increases for each of the Big 7 Health Insurance Corps for the 2 years from 2008 to 2010:
…………….......Core Pretax Income….%
…………………....2010… ..2008…Increase
………………..........(mils of $s)
UnitedHealth..7,383.....4,624……60%
WellPoint….....4,354……3,122……39%
Aetna…………..2,644……2,174……22%
Cigna(1).………1,870……1,072……74%
Humana……….1,750………993……76%
Coventry………...965………572......69%
Assurant…….…..912…….…563…...62%
Total all 7.….19,878.....13,120……52%
(1) Cigna above 2008 Core PTI excludes Fair Value Guaranteed Minimum Business Adjustment Loss of $690 mil.
No, I’m not kidding, after these Big 7 Health Insurance Corps had a 437% increase in Total Core Pretax Income for the 7 years from 2000 to 2007, they piled on by generating a 52% Total Core Pretax Income increase for the most recent 2 years...2009 and 2010.
But that’s not even the total profit story here.
In comparison to this 52% Total Core Pretax Income increase, the after-tax Total Core Net Income of this industry for the most recent 2 years was a slightly higher 53%....that’s not much of a difference.
But just check out these differences between the after-tax Core Net Income and EPS percentage increases for the most recent 2 years:
..........................% Increase for 2 Years….....% Lower Average
.............................from 2008 to 2010………...Common Shares
………………......Core NI……EPS….Difference….Outstanding
UnitedHealth……56%.......71%.......+15%................9%
WellPoint(1)…….44%........81%.......+37%..............20%
Aetna……………...28%.......48%.......+20%...............13%
Assurant………….72%.......83%.......+11%.................6%
(1) WellPoint 2008 Core Net Income excludes a $481 mil tax benefit from a favorable audit settlement.
And this isn’t just a very recent 2 year financial engineering massive stock buyback strategy. It’s been going on for 4 or 5 years.
Below here is the Growth in Core Net Income, Growth in EPS, the Difference between the 2, and the % of Lower Average Common Shares Outstanding for the most recent 4 or 5 years for some of these Big Health Care Insurance Corps. This period includes in its center, the Great Recession.
…….…...............% Increase (Decrease)………...% Lower Average
…….............For 4 Years from 2006 to 2010...Common Shares
………………....Core NI……EPS……Difference….Outstanding
UnitedHealth….11%........38%.......+27%................19%
WellPoint………(7)%........44%.......+51%................35%
Coventry………..9%.........20%.......+11%..................9%
…………............% Increase (Decrease)……………% Lower Average
……............For 5 Years from 2005 to 2010……Common Shares
………………....Core NI……EPS……Difference……Outstanding
Aetna……………12%........61%.......+49%..................30%
Cigna……………..6%........49%.......+43%..................29%
Assurant……….32%........62%......+30%..................19%
The key point here is that in determining fair insurance premium prices for Big Health Insurance Corps to charge, they should be viewed in light of the percentage increase in EPS the health care insurance company is generating, not in light of the percentage increase in reported Pretax Income or increase in reported after-tax Net Income which the health care insurance company is generating. CEOs work for their stockholders, and thus EPS, and EPS growth, which drive stock prices, are the relevant measures of performance. CEOs also are huge stockholders of the company. Further, all corporate executives, and many other company employees, hold many stock options, and thus stock price, and EPS and EPS growth, are critically important to them, as well.
I think it would be very beneficial if the US Senate Committee, that handles Health Care, would now call in the CEOs of the Big 3 Health Insurance Corps for a public committee hearing, similar to what was done very effectively with the Big 5 Oil Corps, when tax subsidies were being studied, which proved to be very informative to the public.
I further think that this US Senate Committee should specifically request a very simple schedule from each of these CEOs, which shows for each year from 2003 to 2010, the actual annual percentage premium rate overall increase, and the percentage change from the previous year in the company’s Reported Pretax Income and also in its Core Pretax Income, in its Reported After-tax Net Income and also in its Core After-tax Net Income, and much more importantly, in its Reported Diluted EPS and also in its Core Diluted EPS.
And then each Big 3 Big Health Insurance CEO should explain publicly in this Senate Hearing how he/she justified each year’s overall premium rate increases, given the company’s profit situation in that year and in the immediately preceding year.
OK, so certainly these Big Health Insurance Corps have finally seen the light, and have priced out their new insurance premiums in light of their EPS growth in the first quarter of 2011. Actually, just the opposite….they have continued their unreasonably high premium pricing, and over a very inflated prior year base.
In the first quarter of 2011, the 7 Big Health Insurance Corps generated Total Pretax Earnings growth of 12%, which precisely matched their Total after-tax Net Income growth of 12%. But in their clearly more relevant EPS growth, these 7 Big Health Insurance Corps generated Total weighted EPS growth in the first quarter of 2011 of a much higher 22%, which is a massive 10% higher than their 12% earnings growth.
When inflation is exceedingly low, and these companies are generating 22% earnings growth over an already windfall profit first quarter 2010 earnings base, there is no way these Big Health Insurance Corps should be allowed to generate earnings like these, when health care costs are putting such severe financial pressure on US citizens, on US businesses, and on the US government, with its massive debt.
Here is a breakdown by each individual Big 7 Health Insurance Corps of Net Income growth vs. EPS growth in the first quarter of 2011.
% Increase (Decrease) for
First quarter 2011 over 2010:
………………......Core NI……EPS……Difference
UnitedHealth……13%........18%.........+5%
WellPoint…………..6%........24%.......+18%
Aetna…………….....4%........17%.......+13%
Cigna…………….....51%.......54%.........+3%
Humana…………...22%.......22%...........0%
Coventry…………..13%.......12%..........(1)%
Assurant………...(10)%........4%........+14%
Total of all 7……..12%.......22%........+10%
That 10% Difference spread is due to the substantial stock buybacks of many of these Big Health Insurance Corps. A substantial portion of the cash inflow from their windfall profits earned by most of these Big Health Insurance Corps are being transferred to their stockholders in stock buybacks, which has the add-on benefit of substantially growing their EPS, which further drives their stock prices higher…..Incredible creative financial engineering, but it’s a pyrrhic victory to the Big Health Insurance Corps, because it’s earned at the clear detriment to, and thus on the backs of, US citizens, US businesses, and the US Government.
In reviewing all of the above numbers, I have to conclude that there is no way these Health Care Insurance Corps could have possibly been able to justify their insurance premium increases in any year since 2003, given the outsized increases in their profits, and in their incredible EPS growth.
Frankly, I think US citizens and US businesses paying these clearly unreasonable insurance premiums should be demanding an insurance premium rollback in the prices they were charged.
Pundits keep talking about what the US debt, and what Medicare will look like in ten years and in twenty years. Well, check the following out.
In 2010, these 12 Big Health Insurance Corps generated pretax profits of $21.4 bil. If you grow that at 12% per year, which is what their earnings grew by in the first quarter of 2011, these 12 Big Health Insurance Corps will generate $66.4 bil of pretax profits in ten years, in just the year 2020, and will generate $206.3 bil of pretax profits in twenty years, in just the year 2030. And when you add all of the next twenty years from 2011 to 2030, the total profits of these 12 Big Health Insurance Corps would come to an incredible $1.726 trillion.
I think the best way to reduce this $1.726 trillion of projected health care costs over the next twenty years is to switch to a single-payer system, which if designed properly, should remove all $1.726 trillion of these unnecessary Health Insurance Corp profits.
I think the next best thing to do is to at least remove the excessive, windfall profits of Big Health Insurance Corps. For several reasons, my hunch is that any reasonable computation would conclude that at least $1.0 trillion of this $1.726 trillion of projected Big Health Insurance total profits are excessive, windfall profits.
First, if the US and State governments designed wise, effective initiatives which would cut that 12% annual earnings growth of these 12 Big Health Insurance Corps in half from 12% to 6%, the total profits of these health care insurance companies over the next 20 years would come to $834 bil, $892 bil less than what they would come to by using a 12% annual growth rate. And in all fairness, even when you bring down the annual earnings growth rate of these 12 Big Health Insurance Corps to 6%, that still equates to annual EPS growth of 16%, with the 10% add-on growth rate due to the substantial stock buybacks. Nearly all stockholders would be extremely happy investing in a company which generates annual EPS growth of 16%.
Second, with the new health care legislation, there will be a substantial growth in the insured starting in 2014, if I remember the date correctly. This will substantially boost that annual earnings growth rate in 2014 and 2015, and thus also boost the difference over the 20 year period.
Third, there is already substantial unreasonable windfall inflation in the 2010 health insurance company earnings starting point. In all fairness, a good chunk of this inflation should be removed, by staggering in this removal over time, through wise, effective initiatives of the US and State Governments.
And fourth, there are many more insurance corps than these 12 publicly-held Big Health Insurance Corps, which will elevate all of the numbers, and thus also the differences. There are not just many more smaller publicly-held corps in this industry, but there are also many private health insurance corps of all sizes, and even some "non-profit" ones which generate very nice profits.
And lastly, to bring down the US debt level, I think that just like other industries should do, the Health Insurance industry should be ponying in here in the tax area. I would consider closing the tax loopholes the Health Insurance industry presently gets in the timing of when they include their insurance premiums in taxable income, and in the timing of when they are able to deduct insurance claims that are not yet settled. These two are optimal tax changes to the Health Insurance industry because accounting-wise, there is no hit to reported earnings, since these two are both viewed as temporary tax differences under GAAP….the Health Insurance Corp pays the same amount of tax either way, it’s just the year the tax is paid that changes. But yet the CBO properly scores this tax change as a substantial tax inflow to the US government, which keeps growing in amount each year, to infinity.
Next to study…..hospitals, another very fertile area to reduce health care costs.
Saturday, May 21, 2011
Publicly-held, US Mid-sized Corp Earnings Continue to Sizzle in 1Q 2011
In an earlier post, I found that the 902 largest publicly-held US Corps, with either Core Pretax Earnings or Losses of at least $200 mil in either 2010 or in 2009, registered Total Core Pretax Earnings growth of a torrid 77% in 2010.
And in a subsequent post, I found that the largest 450 publicly-held US Corps, with Core Pretax Earnings or Losses of at least $150 mil in either the first quarter of 2011 or in the first quarter of 2010, generated Total Core Pretax Earnings growth of another 33% in the 1Q 2011.
I think the 33% earnings growth in the 1Q 2011 is just as significant of an accomplishment, and perhaps even more so, as the 77% earnings growth in 2010, because the 2010 earnings base was elevated so substantially by the 77% earnings growth in 2010.
This post extends the 1Q 2011 earnings research by focusing on the 153 mid-sized, publicly-held US Corps with Core Pretax Earnings or Losses of at least $90 mil, but also less than $150 mil, in either the first quarter of 2011 or in the first quarter of 2010.
These 153 mid-sized US Corps, by registering Total Core Pretax Earnings growth of 33% in the 1Q 2011, precisely matched the 33% earnings growth of the 450 larger US Big Corps.
To show how broad scale this 1Q 2011 earnings growth was, 79% of the 153 publicly-held, Mid-sized US Corps had their core earnings increase in the 1Q 2011, whereas a slightly lower 78% of the 450 publicly-held US Big Corps had their core earnings increase in the 1Q 2011.
What all of this tells me is that wise actions taken by the Obama Administration, the Fed, and the US Congress, have created a robust economic environment in which publicly-held firms of all sizes can flourish.
These spectacular corporate earnings of the past 15 months have also spurred higher State Tax Receipts for several reasons.
The resultant higher corporate taxable income generates higher State Corporate Income Tax Receipts.
But more importantly, the higher corporate taxable income results in higher State Individual Income Tax Receipts. When corporations have much higher earnings, they tend to give higher bonuses, higher raises, more robust stock option grants, and they should also eventually do more hiring. Also, these much higher company earnings drive much higher stock prices. Thus, there are much higher State Individual Taxable Capital Gains from the higher stock prices. Furthermore, there are much higher State Taxable W-2 compensation earnings from the increased number and amount of stock option exercises by company employees.
In addition, there are much higher State Sales Tax Receipts from the higher after-tax cash in the hands of corporate employees.
On the downside, a recession crater like we had, and the resultant substantial drop in company earnings, negatively feeds upon itself, and results in substantial State Tax Collection reductions.
On the other hand, when the sharp recession turns around, like it has in the past 15 months, and companies substantially increase their earnings, this positively feeds upon itself, and results in substantial State Tax Collection increases. The key to keeping these State Tax Collections pouring in is for the US Government to keep providing the robust economic environment that permits companies' profits to flourish.
Companies have started hiring. If they think these robust earnings will continue, they will do a lot more hiring.
But one critical missing link to the much-needed robust job creation is that there is way too much risk for someone to start, or to expand, a business. The energy costs are too high, and much too volatile. And further, since there has been more than a decade of continuing substantial energy cost increases, many prospective business owners or business expanders make the economic assessment that the risk/reward is overwhelmingly weighted on the risk side of the equation, particularly when focusing on the substantial risk of future much higher energy costs.
What the US government needs to do is to creatively design incentive programs for business start-ups, and for smaller and medium-sized businesses, that substantially reduces their energy costs, and also substantially reduces the risk of much higher future energy costs.
This energy problem is so severe, I think I would even consider some bold US government initiatives like the following two.
First, when oil prices continue above some highly undesirable predetermined high level for some predetermined period of time, then that would automatically trigger a requirement that the CEOs of the Big 5 Oil Companies, operating heavily in the US (i.e. Exxon Mobil, Chevron, ConocoPhillips, Royal Dutch Shell, and BP), appear before the Senate Finance Committee or some other Senate Committee, and address the unreasonably high oil and gas prices, like they recently did when they gave their perspectives on the issue of Oil company tax subsidies. I think this Senate Finance Committee hearing on Oil Company tax subsidies was exceptionally informative and educational to the US public.
And second, I think consideration should be given to have the US government enter into some wise long-term hedging oil price contracts in order to moderate, at least to some extent, the devastating economic risk of much higher future energy costs on US businesses and on US individuals.
When oil prices move up precipitously, with the resultant US government economic hedging gains, these hedging gains by the US government should be shared in some reasonable way with US individuals paying the high energy costs and as economic incentives to both US small business start-ups in the US, and to US small and medium-sized business expansions in the US.
In the much more unlikely event that oil prices move down precipitously, the resultant US government hedging losses would be substantially trumped by the additional federal government tax receipts from the much stronger US economy resulting from the much lower energy cost environment.
Anyway, from a thorough review of 1Q 2011 earnings releases and 1Q 2011 10-Q SEC filings, below here are the first quarter 2011 Core Pretax Earnings of these 153 publicly-held, US Mid-sized Corps. In defining Core Pretax Income, I have excluded large Fixed Asset Impairments, particularly those related to Intangible Assets, large Acquired In Process R&D Charges, large Gains and Losses on Debt Extinguishment, and clearly one-time, and clearly unusual large Charges or Credits.
...........................................................................Increase
.......................................Pretax Income(Loss)..(Decrease)...
..........................................1Q 2011..1Q 2010....Amount...%.
...................................................(millions of dollars)....
Mid-sized Tech
BMC Software........................144..........117..........27......23%
Priceline.com........................141............81..........60......74%
Alliance Data Systems...........140...........75..........65......87%
Nvidia(1)...............................129..........139........(10)....(7)%
Dolby Labs............................122..........134........(12).....(9)%
Microchip Technology...........120...........84..........36......43%
Vishay Intertechnology.........118...........63..........55......87%
Jabil Circuit(2).......................117...........41..........76.....185%
Novellus Systems...................113...........51..........62.....122%
Verisk Analytics.....................110...........98..........12......12%
Tech Data...............................109...........87..........22......25%
Alliant Techsystems(3)..........108..........129........(21)...(16)%
Amdocs(4).............................107..........102...........5........5%
Intuit.....................................102..........126........(24)...(19)%
Netflix.....................................98............54..........44......81%
Varian Semiconductor.............96............44..........52.....118%
Allegheny Technologies...........94............33..........61.....185%
Teradata..................................90............86............4........5%
Garmin(5)................................85............92..........(7)....(8)%
Ingram Micro...........................81............97........(16)...(16)%
Expedia(6)...............................74............92........(18)...(20)%
Total 21 Mid-sized Tech.......2,298.......1,825........473......26%
Mid-sized Oil&Gas
Continental Resources(7).......148............91..........57......63%
Holly Corp..............................140..........(40).......180.....450%
Pioneer Natural Resources(8).126..........136........(10).....(7)%
Nabors Industries...................123............52..........71.....137%
QEP Resources........................117..........125..........(8).....(6)%
Patterson UTI Energy..............114.............7........107...1529%
FMC Technologies...................108..........149........(41)...(28)%
RPC.........................................106............22..........84.....382%
Plains Exploration&Prod(9).....102............90..........12......13%
Enbridge Energy Prtnrs LP(10)..99..........128.........(29)...(23)%
Ultra Petroleum(11)...................97..........138.........(41)...(30)%
Magellan Midstream Prtnrs LP...91............65..........26......40%
Atwood Oceanics.......................90............77..........13......17%
Boardwlk Ppln Prtrs LP(12)........90............90............0........0%
Rowan Companies.....................37............94.........(57)...(61)%
Pride Intl...................................34............95.........(61)...(64)%
Total 16 Mid-sized Oil&Gas....1,622........1,319........303......23%
Mid-sized Finance
Genworth Financial..................146..........119..........27......23%
First Republic Bank..................143..........120..........23......19%
Comerica.................................138............30........108.....360%
Alliance Bernstein LP...............138...........144..........(6).....(4)%
American Capital Agency.........134............53..........81.....153%
General Motors Financial.........130............86..........44......51%
Raymond James Financial........124............94..........30......32%
Jones Financial........................118............77..........41......53%
Affiliated Managers..................116............65..........51......78%
Amerigroup.............................113............68..........45......66%
Republic Bancorp(KY)..............110............69..........41......59%
Protective Life..........................109..........111...........(2)......(2)%
BOK Financial...........................104............91..........13......14%
Newcastle Investment(13)..........99............92............7........8%
SVB Financial.............................96............41..........55.....134%
Equifax.......................................96............90............6........7%
KKR Financial(14).......................95............90............5........6%
American Financial Group..........95..........147........(52)...(35)%
Eaton Vance...............................93............82..........11......13%
SEI Investments.........................92............96..........(4)....(4)%
Zions Bancorp............................90...........(92).......182.....198%
Alleghany...................................90............74..........16......22%
Lender Processing Services........90...........117........(27)...(23)%
HCC Insurance...........................63...........103........(40)...(39)%
Total 24 Mid-sized Finance....2,622........1,967........655.....33%
Mid-sized Health Care
Community Health Systems......135..........127............8........6%
Herbalife Ltd.............................121............62..........59......95%
Henry Schein............................120............98..........22.....22%
Life Technologies(15)................115..........118...........(3)....(3)%
Perrigo......................................113............85..........28......33%
Waters.......................................113............90..........23......26%
CareFusion(16)..........................112............59..........53......90%
Endo Pharmaceuticals...............102............97............5........5%
Watson Pharmaceuticals(17).....100............84..........16......19%
Health Management Associates...98............84..........14......17%
Cerner.........................................96............77..........19......25%
Kinetic Concepts..........................94............75..........19......25%
Dentsply Intl................................94............83..........11......13%
Omnicare.....................................80............92.........(12)...(13)%
Total 14 Mid-sized Health Care.1,493........1,231........262......21%
Mid-sized Retail
Abercrombie & Fitch..................144............94..........50......53%
Dicks Sporting Goods..................144..........113..........31......27%
Whole Foods Market...................143..........119..........24......20%
CarMax.......................................141..........122..........19......16%
Amerigas Partners LP(18)...........138..........149........(11).....(7)%
Petsmart.....................................135..........119..........16......13%
American Eagle Outfitters...........135..........128............7........5%
Urban Outfitters..........................121..........119............2........2%
Foot Locker.................................90............39..........51.....131%
BJs Wholesale Club.......................60............93........(33)...(35)%
Total 10 Mid-sized Retail..........1,251........1,095.......156......14%
Mid-sized Other
Joy Global..................................149...........113..........36......32%
Seaboard....................................149............77..........72......94%
FMC Corp...................................146..........127............19......15%
Coca-Cola Enterprises.................144..........146...........(2).....(1)%
Corn Products Intl(19)................143............67..........76.....113%
ITT Educations Services..............141..........143...........(2).....(1)%
Reliance Steel..............................140............66..........74.....112%
KBR.............................................139............93..........46......49%
Windstream(20)..........................138..........124..........14......11%
Ecolab.........................................138..........139...........(1)....(1)%
Devry..........................................137..........122..........15......12%
Natural Fuel Gas(21)....................137..........130............7........5%
Albemarle....................................133............71..........62......87%
Ametek........................................133............85..........48......56%
Del Monte Foods..........................132............91..........41......45%
Church & Dwight..........................132..........125............7........6%
Flowserve....................................131..........112..........19......17%
Ralcorp(22).................................130............95..........35......37%
Westlake Chemicals......................129............27........102.....378%
Wyndham WW(23).......................129............82..........47......57%
Fastenal.......................................129............91..........38......42%
URS..............................................127..........116..........11........9%
Roper Industries..........................126............85..........41......48%
Jacobs Engineering......................126..........121............5........4%
Constellation Brands(24)..............124............33..........91.....276%
Fortune Brands(25)......................123..........103..........20......19%
Alaska Air.....................................121............10.........111...1110%
Airgas(26).....................................120............90.........30......33%
Rockwood Holdings(27)................118............48..........70....146%
Weight Watchers Intl.....................118............72..........46......64%
Walter Energy................................116............67..........49......73%
Intl Flavors & Fragrances..............116............89..........27......30%
Career Education...........................115............89..........26......29%
Autonation.....................................115............97..........18......19%
Crown Holdings(28).......................113..........106............7........7%
Education Management..................113..........109............4........4%
Sauer-Danfoss................................111............33..........78...236%
Questar...........................................111..........114..........(3)....(3)%
Intl Game Technology(29).............108............94..........14......15%
Westvaco.......................................107............28.........79....282%
Newell Rubbermaid(30)................107............98............9.......9%
Owens Illinois................................105..........123.........(18)...(15)%
Pall Corp........................................104............72..........32.....44%
Huntsman(31)................................102..........(38).......140....368%
Green Mountain Coffee Roasters....102............39..........63...162%
AGCO............................................101..............2..........99...4950%
LKQ Corp(32).................................101............83..........18......22%
Kansas City Southern(33)..............100...........73..........27......37%
Molson Coors...................................99...........75..........24......32%
McCormick......................................99............89..........10......11%
Molex..............................................98............57..........41......72%
Cintas..............................................97............73..........24.....33%
Sherwin Williams.............................95............59..........36......61%
McDermott......................................95............72..........23......32%
Frontier Communications...............93............76..........17......22%
Royal Caribbean(34)........................92..............1..........91......NM
WABCO Holdings(35).......................92............41..........51.....124%
Stericycle........................................91............77..........14.....18%
METROPCS Communications...........90............38..........52....137%
Iron Mountain.................................90...........67..........23......34%
Telephone & Data Systems...............81..........100........(19)...(19)%
Energizer Holdings..........................61..........128........(67)...(52)%
H&R Block......................................(17)..........97.......(114).(118)%
Terex(36)........................................(36).......(114)........78......68%
Host Hotels & Resorts......................(80).......(102)........22......22%
USG................................................(108).......(127)........19......15%
US Airways(37)..............................(114)........(94).......(20)...(21)%
Vulcan Materials(38)......................(128).......(127)........(1).....(1)%
Total 68 Mid-sized Other................6,719......4,568.....2,151....47%
Total 153 in all Sectors...............16,005.....12,005....4,000...33%
(1) Nvidia 2011 PTI excludes legal settlement gain.
(2) Jabil Circuit 2011 PTI excludes both loss on dispositions and settlement of receivable charges.
(3) Alliant Techsystems 2010 PTI excludes intangible asset impairment charge.
(4) Amdocs 2010 PTI excludes asset impairment charge.
(5) Garmin excludes foreign currency gains and losses.
(6) Expedia 2011 PTI includes strategic investment in technology and international expansion, which are required to be immediately charged to earnings under GAAP.
(7) Continental Resources exclude gains and losses on derivatives.
(8) Pioneer Natural Resources exclude gains and losses on derivatives.
(9) Plains Exploration & Production 2011 PTI exclude both losses on derivatives and gains on fair value changes in investments. Its 2010 PTI exclude both gains on derivatives and legal recovery gains.
(10) Enbridge Energy Partners LP 2011 PTI excludes insurance recovery gains.
(11) Ultra Petroleum exclude gains on derivatives.
(12) Boardwalk Pipeline Partners LP 2011 PTI excludes loss on debt extinguishment.
(13) Newcastle Investment exclude gains on debt extinguishment.
(14) KKR Financial 2010 PTI excludes gain on debt restructuring.
(15) Life Technologies 2010 PTI excludes both loss on debt retirement and gain on divestiture.
(16) CareFusion 2011 PTI excludes gain on sale of assets.
(17) Watson Pharmaceuticals 2011 PTI excludes losses on asset sales and impairments. Its 2010 PTI excludes gain on sale of securities.
(18) Amerigas Partners LP 2011 PTI excludes loss on debt extinguishment. Its 2010 PTI excludes loss on interest rate hedges.
(19) Corn Products Intl 2011 PTI excludes gain from litigation settlement award.
(20) Windstream 2011 PTI excludes loss on debt extinguishment.
(21) Natural Fuel Gas 2011 PTI excludes gain on sale of unconsolidated subsidiary.
(22) Ralcorp 2010 PTI exclude intangible asset impairment charge.
(23) Wyndham Worldwide 2011 PTI excludes asset impairment charge.
(24) Constellation Brands exclude intangible asset charges.
(25) Fortune Brands 2011 PTI excludes business separation cost charges.
(26) Airgas 2011 PTI excludes charges for unsolicited takeover costs. Its 2010 PTI exclude both loss on debt extinguishment and charges for unsolicited takeover costs.
(27) Rockwood Holdings 2011 PTI excludes loss on debt extinguishment.
(28) Crown Holdings 2011 PTI excludes loss from debt retirement.
(29) Intl Game Technology 2010 PTI excludes asset impairment charge.
(30) Newell Rubbermaid 2011 PTI excludes loss on debt retirement.
(31) Huntsman 2010 PTI loss on debt extinguishment.
(32) LKQ Corp 2011 PTI excludes loss on debt retirement.
(33) Kansas City Southern 2010 PTI excludes loss on debt retirement.
(34) Royal Caribbean 2010 PTI excludes gain on legal settlement.
(35) WABCO Holdings 2011 PTI excludes gain from indemnification and other settlements.
(36) Terex 2011 PTI excludes both gain on sale of stock and loss on debt retirement.
(37) US Airways 2010 PTI excludes gain on sale of investments.
(38) Vulcan Materials 2011 PTL excludes legal settlement recovery gains. Its 2010 PTI excludes gains of sales of property, plant and equipment and gains on sales of businesses.
And in a subsequent post, I found that the largest 450 publicly-held US Corps, with Core Pretax Earnings or Losses of at least $150 mil in either the first quarter of 2011 or in the first quarter of 2010, generated Total Core Pretax Earnings growth of another 33% in the 1Q 2011.
I think the 33% earnings growth in the 1Q 2011 is just as significant of an accomplishment, and perhaps even more so, as the 77% earnings growth in 2010, because the 2010 earnings base was elevated so substantially by the 77% earnings growth in 2010.
This post extends the 1Q 2011 earnings research by focusing on the 153 mid-sized, publicly-held US Corps with Core Pretax Earnings or Losses of at least $90 mil, but also less than $150 mil, in either the first quarter of 2011 or in the first quarter of 2010.
These 153 mid-sized US Corps, by registering Total Core Pretax Earnings growth of 33% in the 1Q 2011, precisely matched the 33% earnings growth of the 450 larger US Big Corps.
To show how broad scale this 1Q 2011 earnings growth was, 79% of the 153 publicly-held, Mid-sized US Corps had their core earnings increase in the 1Q 2011, whereas a slightly lower 78% of the 450 publicly-held US Big Corps had their core earnings increase in the 1Q 2011.
What all of this tells me is that wise actions taken by the Obama Administration, the Fed, and the US Congress, have created a robust economic environment in which publicly-held firms of all sizes can flourish.
These spectacular corporate earnings of the past 15 months have also spurred higher State Tax Receipts for several reasons.
The resultant higher corporate taxable income generates higher State Corporate Income Tax Receipts.
But more importantly, the higher corporate taxable income results in higher State Individual Income Tax Receipts. When corporations have much higher earnings, they tend to give higher bonuses, higher raises, more robust stock option grants, and they should also eventually do more hiring. Also, these much higher company earnings drive much higher stock prices. Thus, there are much higher State Individual Taxable Capital Gains from the higher stock prices. Furthermore, there are much higher State Taxable W-2 compensation earnings from the increased number and amount of stock option exercises by company employees.
In addition, there are much higher State Sales Tax Receipts from the higher after-tax cash in the hands of corporate employees.
On the downside, a recession crater like we had, and the resultant substantial drop in company earnings, negatively feeds upon itself, and results in substantial State Tax Collection reductions.
On the other hand, when the sharp recession turns around, like it has in the past 15 months, and companies substantially increase their earnings, this positively feeds upon itself, and results in substantial State Tax Collection increases. The key to keeping these State Tax Collections pouring in is for the US Government to keep providing the robust economic environment that permits companies' profits to flourish.
Companies have started hiring. If they think these robust earnings will continue, they will do a lot more hiring.
But one critical missing link to the much-needed robust job creation is that there is way too much risk for someone to start, or to expand, a business. The energy costs are too high, and much too volatile. And further, since there has been more than a decade of continuing substantial energy cost increases, many prospective business owners or business expanders make the economic assessment that the risk/reward is overwhelmingly weighted on the risk side of the equation, particularly when focusing on the substantial risk of future much higher energy costs.
What the US government needs to do is to creatively design incentive programs for business start-ups, and for smaller and medium-sized businesses, that substantially reduces their energy costs, and also substantially reduces the risk of much higher future energy costs.
This energy problem is so severe, I think I would even consider some bold US government initiatives like the following two.
First, when oil prices continue above some highly undesirable predetermined high level for some predetermined period of time, then that would automatically trigger a requirement that the CEOs of the Big 5 Oil Companies, operating heavily in the US (i.e. Exxon Mobil, Chevron, ConocoPhillips, Royal Dutch Shell, and BP), appear before the Senate Finance Committee or some other Senate Committee, and address the unreasonably high oil and gas prices, like they recently did when they gave their perspectives on the issue of Oil company tax subsidies. I think this Senate Finance Committee hearing on Oil Company tax subsidies was exceptionally informative and educational to the US public.
And second, I think consideration should be given to have the US government enter into some wise long-term hedging oil price contracts in order to moderate, at least to some extent, the devastating economic risk of much higher future energy costs on US businesses and on US individuals.
When oil prices move up precipitously, with the resultant US government economic hedging gains, these hedging gains by the US government should be shared in some reasonable way with US individuals paying the high energy costs and as economic incentives to both US small business start-ups in the US, and to US small and medium-sized business expansions in the US.
In the much more unlikely event that oil prices move down precipitously, the resultant US government hedging losses would be substantially trumped by the additional federal government tax receipts from the much stronger US economy resulting from the much lower energy cost environment.
Anyway, from a thorough review of 1Q 2011 earnings releases and 1Q 2011 10-Q SEC filings, below here are the first quarter 2011 Core Pretax Earnings of these 153 publicly-held, US Mid-sized Corps. In defining Core Pretax Income, I have excluded large Fixed Asset Impairments, particularly those related to Intangible Assets, large Acquired In Process R&D Charges, large Gains and Losses on Debt Extinguishment, and clearly one-time, and clearly unusual large Charges or Credits.
...........................................................................Increase
.......................................Pretax Income(Loss)..(Decrease)...
..........................................1Q 2011..1Q 2010....Amount...%.
...................................................(millions of dollars)....
Mid-sized Tech
BMC Software........................144..........117..........27......23%
Priceline.com........................141............81..........60......74%
Alliance Data Systems...........140...........75..........65......87%
Nvidia(1)...............................129..........139........(10)....(7)%
Dolby Labs............................122..........134........(12).....(9)%
Microchip Technology...........120...........84..........36......43%
Vishay Intertechnology.........118...........63..........55......87%
Jabil Circuit(2).......................117...........41..........76.....185%
Novellus Systems...................113...........51..........62.....122%
Verisk Analytics.....................110...........98..........12......12%
Tech Data...............................109...........87..........22......25%
Alliant Techsystems(3)..........108..........129........(21)...(16)%
Amdocs(4).............................107..........102...........5........5%
Intuit.....................................102..........126........(24)...(19)%
Netflix.....................................98............54..........44......81%
Varian Semiconductor.............96............44..........52.....118%
Allegheny Technologies...........94............33..........61.....185%
Teradata..................................90............86............4........5%
Garmin(5)................................85............92..........(7)....(8)%
Ingram Micro...........................81............97........(16)...(16)%
Expedia(6)...............................74............92........(18)...(20)%
Total 21 Mid-sized Tech.......2,298.......1,825........473......26%
Mid-sized Oil&Gas
Continental Resources(7).......148............91..........57......63%
Holly Corp..............................140..........(40).......180.....450%
Pioneer Natural Resources(8).126..........136........(10).....(7)%
Nabors Industries...................123............52..........71.....137%
QEP Resources........................117..........125..........(8).....(6)%
Patterson UTI Energy..............114.............7........107...1529%
FMC Technologies...................108..........149........(41)...(28)%
RPC.........................................106............22..........84.....382%
Plains Exploration&Prod(9).....102............90..........12......13%
Enbridge Energy Prtnrs LP(10)..99..........128.........(29)...(23)%
Ultra Petroleum(11)...................97..........138.........(41)...(30)%
Magellan Midstream Prtnrs LP...91............65..........26......40%
Atwood Oceanics.......................90............77..........13......17%
Boardwlk Ppln Prtrs LP(12)........90............90............0........0%
Rowan Companies.....................37............94.........(57)...(61)%
Pride Intl...................................34............95.........(61)...(64)%
Total 16 Mid-sized Oil&Gas....1,622........1,319........303......23%
Mid-sized Finance
Genworth Financial..................146..........119..........27......23%
First Republic Bank..................143..........120..........23......19%
Comerica.................................138............30........108.....360%
Alliance Bernstein LP...............138...........144..........(6).....(4)%
American Capital Agency.........134............53..........81.....153%
General Motors Financial.........130............86..........44......51%
Raymond James Financial........124............94..........30......32%
Jones Financial........................118............77..........41......53%
Affiliated Managers..................116............65..........51......78%
Amerigroup.............................113............68..........45......66%
Republic Bancorp(KY)..............110............69..........41......59%
Protective Life..........................109..........111...........(2)......(2)%
BOK Financial...........................104............91..........13......14%
Newcastle Investment(13)..........99............92............7........8%
SVB Financial.............................96............41..........55.....134%
Equifax.......................................96............90............6........7%
KKR Financial(14).......................95............90............5........6%
American Financial Group..........95..........147........(52)...(35)%
Eaton Vance...............................93............82..........11......13%
SEI Investments.........................92............96..........(4)....(4)%
Zions Bancorp............................90...........(92).......182.....198%
Alleghany...................................90............74..........16......22%
Lender Processing Services........90...........117........(27)...(23)%
HCC Insurance...........................63...........103........(40)...(39)%
Total 24 Mid-sized Finance....2,622........1,967........655.....33%
Mid-sized Health Care
Community Health Systems......135..........127............8........6%
Herbalife Ltd.............................121............62..........59......95%
Henry Schein............................120............98..........22.....22%
Life Technologies(15)................115..........118...........(3)....(3)%
Perrigo......................................113............85..........28......33%
Waters.......................................113............90..........23......26%
CareFusion(16)..........................112............59..........53......90%
Endo Pharmaceuticals...............102............97............5........5%
Watson Pharmaceuticals(17).....100............84..........16......19%
Health Management Associates...98............84..........14......17%
Cerner.........................................96............77..........19......25%
Kinetic Concepts..........................94............75..........19......25%
Dentsply Intl................................94............83..........11......13%
Omnicare.....................................80............92.........(12)...(13)%
Total 14 Mid-sized Health Care.1,493........1,231........262......21%
Mid-sized Retail
Abercrombie & Fitch..................144............94..........50......53%
Dicks Sporting Goods..................144..........113..........31......27%
Whole Foods Market...................143..........119..........24......20%
CarMax.......................................141..........122..........19......16%
Amerigas Partners LP(18)...........138..........149........(11).....(7)%
Petsmart.....................................135..........119..........16......13%
American Eagle Outfitters...........135..........128............7........5%
Urban Outfitters..........................121..........119............2........2%
Foot Locker.................................90............39..........51.....131%
BJs Wholesale Club.......................60............93........(33)...(35)%
Total 10 Mid-sized Retail..........1,251........1,095.......156......14%
Mid-sized Other
Joy Global..................................149...........113..........36......32%
Seaboard....................................149............77..........72......94%
FMC Corp...................................146..........127............19......15%
Coca-Cola Enterprises.................144..........146...........(2).....(1)%
Corn Products Intl(19)................143............67..........76.....113%
ITT Educations Services..............141..........143...........(2).....(1)%
Reliance Steel..............................140............66..........74.....112%
KBR.............................................139............93..........46......49%
Windstream(20)..........................138..........124..........14......11%
Ecolab.........................................138..........139...........(1)....(1)%
Devry..........................................137..........122..........15......12%
Natural Fuel Gas(21)....................137..........130............7........5%
Albemarle....................................133............71..........62......87%
Ametek........................................133............85..........48......56%
Del Monte Foods..........................132............91..........41......45%
Church & Dwight..........................132..........125............7........6%
Flowserve....................................131..........112..........19......17%
Ralcorp(22).................................130............95..........35......37%
Westlake Chemicals......................129............27........102.....378%
Wyndham WW(23).......................129............82..........47......57%
Fastenal.......................................129............91..........38......42%
URS..............................................127..........116..........11........9%
Roper Industries..........................126............85..........41......48%
Jacobs Engineering......................126..........121............5........4%
Constellation Brands(24)..............124............33..........91.....276%
Fortune Brands(25)......................123..........103..........20......19%
Alaska Air.....................................121............10.........111...1110%
Airgas(26).....................................120............90.........30......33%
Rockwood Holdings(27)................118............48..........70....146%
Weight Watchers Intl.....................118............72..........46......64%
Walter Energy................................116............67..........49......73%
Intl Flavors & Fragrances..............116............89..........27......30%
Career Education...........................115............89..........26......29%
Autonation.....................................115............97..........18......19%
Crown Holdings(28).......................113..........106............7........7%
Education Management..................113..........109............4........4%
Sauer-Danfoss................................111............33..........78...236%
Questar...........................................111..........114..........(3)....(3)%
Intl Game Technology(29).............108............94..........14......15%
Westvaco.......................................107............28.........79....282%
Newell Rubbermaid(30)................107............98............9.......9%
Owens Illinois................................105..........123.........(18)...(15)%
Pall Corp........................................104............72..........32.....44%
Huntsman(31)................................102..........(38).......140....368%
Green Mountain Coffee Roasters....102............39..........63...162%
AGCO............................................101..............2..........99...4950%
LKQ Corp(32).................................101............83..........18......22%
Kansas City Southern(33)..............100...........73..........27......37%
Molson Coors...................................99...........75..........24......32%
McCormick......................................99............89..........10......11%
Molex..............................................98............57..........41......72%
Cintas..............................................97............73..........24.....33%
Sherwin Williams.............................95............59..........36......61%
McDermott......................................95............72..........23......32%
Frontier Communications...............93............76..........17......22%
Royal Caribbean(34)........................92..............1..........91......NM
WABCO Holdings(35).......................92............41..........51.....124%
Stericycle........................................91............77..........14.....18%
METROPCS Communications...........90............38..........52....137%
Iron Mountain.................................90...........67..........23......34%
Telephone & Data Systems...............81..........100........(19)...(19)%
Energizer Holdings..........................61..........128........(67)...(52)%
H&R Block......................................(17)..........97.......(114).(118)%
Terex(36)........................................(36).......(114)........78......68%
Host Hotels & Resorts......................(80).......(102)........22......22%
USG................................................(108).......(127)........19......15%
US Airways(37)..............................(114)........(94).......(20)...(21)%
Vulcan Materials(38)......................(128).......(127)........(1).....(1)%
Total 68 Mid-sized Other................6,719......4,568.....2,151....47%
Total 153 in all Sectors...............16,005.....12,005....4,000...33%
(1) Nvidia 2011 PTI excludes legal settlement gain.
(2) Jabil Circuit 2011 PTI excludes both loss on dispositions and settlement of receivable charges.
(3) Alliant Techsystems 2010 PTI excludes intangible asset impairment charge.
(4) Amdocs 2010 PTI excludes asset impairment charge.
(5) Garmin excludes foreign currency gains and losses.
(6) Expedia 2011 PTI includes strategic investment in technology and international expansion, which are required to be immediately charged to earnings under GAAP.
(7) Continental Resources exclude gains and losses on derivatives.
(8) Pioneer Natural Resources exclude gains and losses on derivatives.
(9) Plains Exploration & Production 2011 PTI exclude both losses on derivatives and gains on fair value changes in investments. Its 2010 PTI exclude both gains on derivatives and legal recovery gains.
(10) Enbridge Energy Partners LP 2011 PTI excludes insurance recovery gains.
(11) Ultra Petroleum exclude gains on derivatives.
(12) Boardwalk Pipeline Partners LP 2011 PTI excludes loss on debt extinguishment.
(13) Newcastle Investment exclude gains on debt extinguishment.
(14) KKR Financial 2010 PTI excludes gain on debt restructuring.
(15) Life Technologies 2010 PTI excludes both loss on debt retirement and gain on divestiture.
(16) CareFusion 2011 PTI excludes gain on sale of assets.
(17) Watson Pharmaceuticals 2011 PTI excludes losses on asset sales and impairments. Its 2010 PTI excludes gain on sale of securities.
(18) Amerigas Partners LP 2011 PTI excludes loss on debt extinguishment. Its 2010 PTI excludes loss on interest rate hedges.
(19) Corn Products Intl 2011 PTI excludes gain from litigation settlement award.
(20) Windstream 2011 PTI excludes loss on debt extinguishment.
(21) Natural Fuel Gas 2011 PTI excludes gain on sale of unconsolidated subsidiary.
(22) Ralcorp 2010 PTI exclude intangible asset impairment charge.
(23) Wyndham Worldwide 2011 PTI excludes asset impairment charge.
(24) Constellation Brands exclude intangible asset charges.
(25) Fortune Brands 2011 PTI excludes business separation cost charges.
(26) Airgas 2011 PTI excludes charges for unsolicited takeover costs. Its 2010 PTI exclude both loss on debt extinguishment and charges for unsolicited takeover costs.
(27) Rockwood Holdings 2011 PTI excludes loss on debt extinguishment.
(28) Crown Holdings 2011 PTI excludes loss from debt retirement.
(29) Intl Game Technology 2010 PTI excludes asset impairment charge.
(30) Newell Rubbermaid 2011 PTI excludes loss on debt retirement.
(31) Huntsman 2010 PTI loss on debt extinguishment.
(32) LKQ Corp 2011 PTI excludes loss on debt retirement.
(33) Kansas City Southern 2010 PTI excludes loss on debt retirement.
(34) Royal Caribbean 2010 PTI excludes gain on legal settlement.
(35) WABCO Holdings 2011 PTI excludes gain from indemnification and other settlements.
(36) Terex 2011 PTI excludes both gain on sale of stock and loss on debt retirement.
(37) US Airways 2010 PTI excludes gain on sale of investments.
(38) Vulcan Materials 2011 PTL excludes legal settlement recovery gains. Its 2010 PTI excludes gains of sales of property, plant and equipment and gains on sales of businesses.
Friday, April 29, 2011
US Big Corp 2010 Torrid Earnings Growth Continues in 1Q 2011...Including a May Update
In an earlier post about a month ago, I found that the 768 largest US Corps, with either Core Pretax Earnings or Losses of at least $200 mil in 2010 or in 2009, registered Total Pretax Earnings growth of a torrid 72% in 2010.
The above research, where I found 768 US Big Corps, was performed through the end of March 2011. Since then, in April and May 2011, I extended this research, and I found 134 additional US Big Corps. These 134 US Big Corp Late Additions, which were shown as an update at the bottom of my earlier post, had Total Core Pretax Income growth in 2010 of a blistering 4039%, more than 50 times the torrid 72% earnings growth of the 768 US Big Corps I researched earlier. These late additions step up the Total Core Pretax Income growth in 2010 for these 902 US Big Corps to a superlative 77%.
Since the 2010 Earnings base has increased so much due to this soaring earnings growth in 2010, it only makes sense that Earnings growth should substantially moderate in 2011.
But guess what? Core Pretax Earnings Growth of US Big Corps continued to explode upwardly in the first quarter of 2011. And this happened despite real US GDP growth of only 1.8% in the 1Q 2011, despite the disastrous Japanese earthquake and tsunami, despite energy prices going through the roof, despite the US Economic Stimulus winding down, despite still sky-high US unemployment and underemployment rates, despite the horrible US housing crisis continuing unabated, despite a Federal Government Debt level north of $14 trillion, and despite nearly all State Budgets continuing to be under extreme financial pressure.
And about half of the country still thinks the Obama Administration hasn’t helped the absolutely horrible US economy it inherited, which was clearly headed for an almost certain depression. And these same people, including many in business, still think the Obama Administration has not helped businesses of any size, and has severely harmed US Big Business.
My gosh, the US stock market has doubled in the past two years, driven by these substantially higher US Big Business earnings. The Obama Administration, along with wise actions by Ben Barnanke and the Fed, have propped up this extremely weak financial infrastructure, creating a US economic environment which permits US Big Corps to flourish.
Clearly, many more very bold US government actions are needed to bring down US unemployment and underemployment, to help spur small business growth, to bring down US gas prices, to make the US much more energy independent, to turn around the horrible US housing crisis, and to reduce the US Government annual deficit and projected long-term debt level. But for someone to assert that the US economy hasn't improved in the past two years, that is as crazy as still asserting that President Obama was born in Kenya or in Indonesia.
Anyway, from a thorough review of their most recent quarterly earnings releases, later below here are the US Big Corps that have reported their quarterly earnings in the first quarter of 2011.
I have defined US Big Corps here as ones that generated either Core Pretax Earnings or Losses of at least $150 mil in either the first quarter of 2011 or in the first quarter of 2010.
I have defined Core Pretax Income as excluding certain items. Most companies exclude many more items than I do in deriving their Core Pretax Income, or a similar term.
The items I exclude are large Fixed Asset Impairments, particularly those related to Intangible Assets, large Acquired In Process R&D Charges, large Gains and Losses on Debt Extinguishment, and clearly one-time, and clearly unusual large Charges or Credits.
I don't think it makes any sense to exclude Restructuring Charges and Merger and Related Costs because these frequently end up being recurring items.
I also don't think it makes any sense to exclude Amortization of Purchased Intangible Assets, since this is a continuing cost of making acquisitions.
I further think it's crazy to exclude items such as Amortization of Inventory Acquired in an acquisition. Many companies do, particularly drug companies. It's like saying a company they bought had Inventory on its books at $10, but when they bought the company, they paid $14 for the inventory. Now assume the inventory is later sold for $16. These companies are very aggressively saying that their true profit on this inventory is $6, not the $2 recorded under GAAP. Pure aggressive make believe, in my book!
I also think Stock-based Compensation is a necessary ongoing employee benefit cost, and thus should not be excluded from Pretax Income in deriving Core Pretax Income.
And I use Pretax Income rather than After-tax Net Income. When I want to find out how US businesses are thriving economically, I don't think creative tax strategies should come into play in making this economic assessment. I find that so many companies magically institute these tax strategies to make up for quarterly and annual Pretax Earnings shortfalls. Their huge Tax Reserves create a lot of opportunities for this fine-tuning of reported earnings.
And because of these creative tax measures, the growth in US Big Corps after-tax Net Income is significantly higher than their growth in Pretax Income.
Let me just cite a couple of the many large firms benefiting from huge tax breaks here.
Procter & Gamble's first quarter 2011 Pretax Income declined 3% from last year's first quarter. So what happened to its After-tax Net Income in the first quarter 2011? It amazingly increased by 11%.
And Microsoft's March 2011 Pretax Income increased 13% over last year. How did it's After-tax Net Income do? Well, it increased by a substantially higher 31%.
Further, these US Big Corps' EPS growth is even much higher than their growth in after-tax Net Income, due to many US Big Corps being very aggressive in their stock buybacks, which reduces the denominator in the EPS computation.
Let me cite a couple of the many large firms benefiting dramatically from huge stock buyback programs.
IBM's Net Income increased by 10% in the first quarter 2011. It's Earnings Per Share(EPS) increased by a substantially higher 17% in the first quarter 2011.
Procter and Gamble's Net Income increased by 11% in the first quarter 2011. It's EPS increased by a much higher 16%.
Health Insurer UnitedHealth Group's Net Income increased by 14% in the first quarter 2011. It's EPS increased by a much higher 18%.
But taking the cake with this financial engineering was Health Insurer WellPoint, whose Net Income increased 6% in the first quarter 2011. What happened with its EPS? It grew by an absolutely amazing 25% in the first quarter. This huge span between Net Income growth and EPS growth was caused by WellPoint spending $5.1 bil in just the past 15 months to buy back its own stock.
The problem with these massive stock buybacks is that the US economy would be so much more robust now if these massive amounts of money were instead invested by these large US Corps on growing their domestic businesses.....on US capital expenditures, on US research and development, and on hiring workers in the US.
Perhaps what is needed here is a wisely-designed disincentive for companies having clearly excessive stock buyback programs. I think it might make sense for companies using such a strategy to pay an annual financial fee to the US government for clearly excess stock buybacks.
Also, excessive stock buybacks have an additional risk to the country and its citizens....they substantially reduce the financial strength of businesses. The TARP 1 and TARP 2 bailouts would have been substantially less costly to the US Government if the financial companies bailed out would not have previously had substantial stock buyback programs.
Further, in the case of industries like Big Oil and Big Health Insurance, when you follow the money, just where did the massive amount of clearly windfall profits end up? In the hands of stockholders of firms like Exxon Mobil, WellPoint and UnitedHealth Group due to these companies' very huge stock buyback programs.....a bit of Robin Hood in Reverse. To show the magnitude of these numbers, in the most recent six years, Exxon Mobil returned $150 bil to its stockholders in stock buybacks.
Anyway, there were 66 of these Non-Utility US Big Corps with either January or February 2011 quarter ends. The Total Core Pretax Earnings of these 66 US Big Corps increased by a very healthy 20% in the first quarter 2011. Leading this hot earnings growth were the 14 Technology Big Corps, which registered strong earnings growth of 29%, after registering earnings growth of more than double that in 2010. Whew!
Getting more real time, I have found 256 similarly-defined Non-Utility US Big Corps that have March 2011 quarter ends, which have released, in the month of April 2011, their first quarter 2011 earnings.
How did they do? Well, the first quarter 2011 earnings growth totaled an incredible 29%. And this torrid first quarter earnings growth was after the even more torrid earnings growth in 2010.
What drove this strong first quarter earnings growth of these March quarter end US Big Corps?
As expected, US Big Oil was the main driver, registering total Pretax Earnings growth in the March 2011 quarter of a massive 47%. I included both BP and Royal Dutch Shell with the US Big Oil group, since they have such massive operations in Houston, and also since they make substantial sales to US customers.
Something clearly needs to be done here with these windfall profits of Big Oil, which have just devastated the entire US economy in the past decade.
Clearly, it would be wise to have very healthy energy tax credit incentives for businesses to make commercial building green retrofit investments. For multinational corps, this could be wisely paid for by providing a somewhat discounted federal income tax rate on a like amount of foreign earnings repatriated by businesses making these green investments. And the energy tax credits for purely domestic businesses of all sizes making these green investments can be fairly paid for by closing Big Oil tax loopholes and by instituting a windfall profits tax on Big Oil.
Just like 100% first-year tax expensing of equipment has worked so well in spurring US economic growth, this commercial building green retrofit investments proposal will do likewise. And the added benefits of the latter proposal is that it will create a lot of jobs in the very troubled construction industry, help prop up the very troubled commercial real estate market, and most important of all, make significant progress toward the key goal of US energy independence.
I think I would even go so far as to consider something really bold as either breaking up, or perhaps even nationalizing, Exxon Mobil, Chevron, and ConocoPhillips. When US Big Oil companies are only interested in maximizing their already windfall profits, while the rest of the country suffers so much, the US government must act in the best interests of all of its citizens.
Right behind US Big Oil in really strong first quarter 2011 earnings growth were the 36 US Technology Big Corps, whose total earnings growth in the March 2011 quarter was a very impressive 28%. And this strong growth occurred on top of earnings growth of more than double that in 2010. Also, this strong growth occurred despite many US technology companies having severe supply disruptions caused by the Japan earthquake and tsunami.
Next came the 55 US Big Financial Corps, whose total earnings in the March 2011 quarter increased by a very strong 29%. On the downside here, a substantial portion of this earnings growth was due to much lower Loan Loss Provisions. Something needs to be done to spur loan growth by these financial institutions to small businesses. And much bolder action is needed to get large financial institutions to write down underwater first and second home mortgages.
How did the late reporting March 2011 Quarter End Big Corps do?
Well, those releasing their March 2011 quarter earnings in the month of May 2011 did substantially better than those reporting their March quarterly earnings in the month of April 2011. This exceptionally strong earnings performance was driven in large part by the Big Financial Corps.
The month of May earnings reporters registered a blistering earnings growth of 69% in the March 2011 quarter, bringing the total March 2011 Quarter End earnings increase to a very strong 35%, which was on the back of a torrent 77% total annual earnings increase in the year 2010 over 2009. Whoa!...now that is 15 months of spectacular earnings growth.
Here is a summary of all first quarter 2011 earnings reported by US Big Corps:
......................................# of
......................................Big............1Q...........1Q........Increase.
.....................................Corps.......2011.......2010.....Amount..%
........................................................millions of dollars
Jan/Feb QTR Ends...........66.......43,486.....36,244.....7,242..20%
March QTR Ends:
..April Releases..............256.....255,517...197,556...57,961..29%
..May Releases...............128.......51,912.....30,798....21,114..69%
..= All March QTR Ends..384....307,429...228,354...79,075..35%
All 1Q Ends....................450.....350,915...264,598...86,317...33%
First, here are the March 2011 Quarter End 256 US Big Corps, which have released their first quarter 2011 earnings by the end of the month of April 2011.
................................................................................Increase
........................................Pretax Income(Loss)......(Decrease)...
..........................................1Q 2011...1Q 2010......Amount.....%.
...................................................(millions of dollars)....
March 2011 Quarter Ends
Month of April Releases
Big Oil&Gas
Exxon Mobil.......................18,917.....12,068.........6,849.....57%
Royal Dutch Shell................16,423......9,966.........6,457.....65%
BP (1)..................................11,268......9,378..........1,890.....20%
Chevron..............................11,122......7,650.........3,472.....45%
ConocoPhillips.....................5,796......3,990..........1,806.....45%
Occidental Petroleum (2)......2,622......1,867.............755.....40%
Apache.................................1,927......1,207............720.....60%
Hess......................................1,485.........966.............519.....54%
Schlumberger.......................1,238.........888.............350.....39%
Halliburton..............................741.........333............408....123%
Valero Energy (3)....................686........(112)............798....713%
Natl Oilwell Varco....................593.........616.............(23).....(4)%
Baker Hughes...........................588.........194.............394....203%
Kinder Morgan Egy Prtnrs LP...347........228.............119......52%
Noble Energy (4)......................323.........198.............125......63%
Diamond Offshore....................297.........406...........(109)...(27)%
Southwestern Energy...............226.........282.............(56)...(20)%
Whiting Petroleum (5)..............166.........125...............41......33%
Helmerich & Payne...................159..........98...............61......62%
Newfield Exploration (6)..........155..........151................4........3%
Cameron Intl............................140.........161..............(21)...(13)%
Ensco Intl...................................83.........197............(114)...(58)%
Noble Corp.................................70.........426............(356)...(84)%
Total 23 Oil&Gas..................75,372.....51,283.........24,089....47%
Big Technology
Apple....................................7,900......4,029..........3,871.....96%
Microsoft...............................6,025......5,341.............684.....13%
Intel.......................................4,371......3,446............925.....27%
IBM........................................3,817......3,515............302.......9%
Google....................................2,892......2,506............386.....15%
Qualcomm (7)........................1,372.........965............407.....42%
Honeywell................................975.........702............273.....39%
Texas Instruments (8)...............918.........957.............(39).....(4)%
Corning (9)...............................862..........861................1......0%
EMC..........................................624.........483.............141.....29%
Ebay.........................................568.........495...............73.....15%
Danaher....................................562.........393.............169.....43%
Johnson Controls.....................475.........384..............91......24%
Xerox.......................................350..........(10)...........360.....NM
Sandisk.....................................331..........323................8......2%
Amazon (10).............................307.........401.............(94)...(23)%
KLA Tencor...............................302..........80.............222....278%
Goodrich...................................260.........181..............79.....44%
Altera........................................245.........160..............85.....53%
Broadcom..................................232.........212..............20......9%
Lam Research............................199.........151..............48.....32%
Yahoo........................................195.........274............(79)...(29)%
Fiserv........................................176.........193.............(17)....(9)%
Motorola Solutions....................173.........109.............64......59%
Juniper Networks.......................171.........162..............9.......6%
Linear Technology......................171.........138.............33....24%
Xilinx..........................................169.........162..............7.......4%
Maxim Integrated Prods (11)......162.........130.............32.....25%
Western Digital (12).....................159........440..........(281)...(64)%
VMware.......................................156.........98............58......59%
Flextronics..................................154.........66............88.....133%
CheckPoint Software....................152........123............29......24%
Seagate Technology (12)..............122........522.........(400)...(77)%
Lexmark.....................................106.........126..........(20)...(16)%
Motorola Mobility.......................(51).......(199).........148.....74%
Freescale Semicond (13)............(151).......(214)...........63.....29%
..Total 36 Technology............35,451.....27,705.......7,746....28%
Big Financial
JP Morgan Chase (14)...............8,057......4,537........3,520.....78%
Wells Fargo..............................5,386......4,001.........1,385.....35%
Citigroup.................................5,285......4,216..........1,069.....25%
Goldman Sachs........................4,040......5,159........(1,119)..(22)%
Bank of America......................2,780......4,389........(1,609)..(37)%
GE Fincl Services (15)..............2,251.........165..........2,086....NM
American Express...................1,732......1,252............480.....38%
Morgan Stanley (16)................1,527......2,515...........(988)...(39)%
US Bancorp..............................1,395........824............571.....69%
Capital One Fincl......................1,386........964............422.....44%
PNC Financial...........................1,140........899............241.....27%
Travelers....................................969........857............112.....13%
Bank NY Mellon..........................949........884..............65.......7%
BlackRock..................................813........656.............157.....24%
Allstate......................................734........107............627...586%
Chubb........................................685........604..............81.....13%
Franklin Resources....................679........508............171.....34%
State Street................................660........702............(42)...(6)%
AFLAC (17)...............................600........974...........(374)..(38)%
Progressive...............................545........439............106.....24%
CME Group................................512........399.............113.....28%
Lincoln National.......................469........349.............120.....34%
Charles Schwab (18)..................394........209.............185.....89%
KeyCorp....................................393.......(123)............516...420%
Fifth Third Bancorp...................382.........(18)............400....NM
AON..........................................356.........247............109.....44%
T Rowe Price Group...................315.........244..............71.....29%
M&T Bank...................................309........220.............89.....40%
BB&T.........................................287.........242.............45.....19%
SLM..........................................276.........406...........(130)..(32)%
TD Ameritrade..........................275.........217.............58.....27%
Ameriprise Financial.................271.........361............(90)...(25)%
Hudson City Bancorp (19).........253.........248...............5.......2%
Reinsurance Group...................242.........193.............49.....25%
Arch Capital Group Ltd(20).......239.........185.............54.....29%
Moodys.....................................235........183.............52.....28%
Northern Trust..........................230........238.............(8)....(3)%
Transatlantic Hldgs (21).............224..........19...........205....NM
Interactive Brokers...................222..........65............157....242%
SunTrust Banks..........................220.......(353)..........573....162%
NYSE Euronext..........................213........173.............40.....23%
Torchmark (22).........................194..........189..............5.......3%
NY Community Bank..................189.........193............(4).....(2)%
Invesco Ltd...............................175.........265...........(90)...(34)%
Huntington Bancshares..............161............2............159..7950%
WR Berkley................................160.........161.............(1).....(1)%
Everest Re Group Ltd (23)...........153.........(10)..........163....NM
Nasdaq OMX Group....................152..........89............63......71%
CIT Group..................................136.........189...........(53)...(28)%
Blackstone Group.......................117........(228)..........345....151%
Regions Financial.........................57........(357)..........414....116%
CapitalSource...............................14........(198)..........212....107%
MGIC Investment.......................(32)........(151)...........119....79%
Synovus Financial.......................(80).......(275)..........195.....71%
Marshall & Ilsley........................(212).......(199)..........(13)...(7)%
Total 55 Financial...................49,114...38,026.......11,088....29%
Big Health Care
JNJ (24)...................................4,856......4,783...........73.......2%
Merck (25)...............................2,397........616........1,781....289%
UnitedHealth Group.................2,103......1,891..........212.....11%
Bristol Myers Squibb................1,767......1,452..........315.....22%
Eli Lilly (26).............................1,662......1,758..........(96)....(5)%
Wellpoint.................................1,427......1,335...........92.......7%
Abbott Labs (27)......................1,382......1,437..........(55).....(4)%
Amgen.....................................1,306......1,420.........(114).....(8)%
Aetna (28)..................................898........731...........167.....23%
Gilead Sciences...........................875......1,160........(285)...(25)%
Baxter (29).................................731........700...........31........4%
Covidien.....................................570........529...........41........8%
Medco Health Sols......................556........532...........24........5%
Express Scripts...........................513........414...........99......24%
Becton Dickinson........................428........411...........17........4%
Biogen IDEC (30)........................426........335...........91......27%
Cardinal Health..........................425........363...........62......17%
Stryker.......................................412........446..........(34).....(8)%
Forest Labs (31).........................408........315..........93......30%
Amerisource Bergen...................346........292..........54......18%
Celgene (32)...............................299........288..........11........4%
Thermo Fisher Scien...................299........260..........39......15%
St Jude Medical..........................296........326.........(30).....(9)%
Zimmer Holdings........................286........280............6........2%
Quest Diagnostics........................239........277.........(38)....(14)%
Assurant.....................................215........248.........(33)....(13)%
Lab Corp of America...................214........223..........(9)......(4)%
Boston Scientific (33)..................210.........83..........127.....153%
Universal Health Svcs.................204........128...........76......59%
CR Bard.......................................184........175............9........5%
Coventry Healthcare...................171........155...........16......10%
Intuitive Surgical.........................154........134...........20......15%
Varian Medical Sys.......................151........135...........16......12%
Hospira........................................143........185..........(42)...(23)%
Total 34 Health Care................26,553...23,817......2,736......11%
Big Other Sectors
AT&T........................................5,270......5,401........(131).....(2)%
GE (34).....................................4,235......2,807........1,428.....51%
Verizon....................................3,881......3,940.........(59)......(1)%
Procter & Gamble.....................3,641......3,762........(121).....(3)%
Freeport McMoran...................2,841.....1,888..........953.....50%
Philip Morris Intl......................2,794.....2,492..........302.....12%
Ford.........................................2,776.....2,135..........641.....30%
Coca Cola..................................2,511.....2,179..........332.....15%
DuPont (35)..............................1,845.....1,557..........288.....18%
Caterpillar................................1,763.......469........1,294....276%
McDonalds...............................1,699.....1,557..........142.......9%
United Technologies.................1,630.....1,352..........278.....21%
PepsiCo (36).............................1,563.....1,401..........162.....12%
3M............................................1,545.....1,403..........142.....10%
Altria Group.............................1,450.....1,281..........169.....13%
United Parcel Service................1,352.......953..........399.....42%
Dow Chemical (37)....................1,313.......655..........658....100%
Union Pacific.............................1,011.......834..........177.....21%
Newmont Mining.........................973.......886...........87......10%
Colgate Palmolive (38).................899.......933..........(34).....(4)%
General Dynamics........................896.......874..........22.........3%
Boeing (39)..................................883.....1,050.........(167)...(16)%
Lockheed Martin..........................786.......879..........(93)....(11)%
Northrop Grumman.....................758.......609..........149.....24%
Southern Copper..........................718.......588..........130.....22%
Viacom (40).................................666.......463..........203.....44%
Illinois Tool Works.......................644.......502..........142.....28%
CSX..............................................638.......501..........137.....27%
Time Warner Cable.......................582.......488...........94......19%
Cliff's Natural Resources...............562.......147..........415....282%
Praxair........................................556.......447..........109.....24%
Raytheon.....................................553.......681.........(128).....(19)%
Reynolds American......................525.......512...........13.......3%
Cummins......................................522.......257..........265....103%
Norfolk Southern..........................515.......456...........59......13%
Alcoa (41)....................................505.........41..........464...1132%
Kimberly Clark.............................484.......609.........(125)...(21)%
Air Prods & Chems........................422.......343...........79.....23%
Lorillard.......................................394.......373...........21.......6%
Parker Hannifin.............................390.......206..........184.....89%
Starbucks......................................389.......337...........52.....15%
Tyco Intl.......................................377.......361...........16.......4%
TE Connectivity Ltd (42)...............374.......377..........(3)......(1)%
International Paper (43)................368.........29..........339..1169%
Yum Brands..................................358.......323...........35.....11%
PPG Industries..............................351.......206..........145.....70%
Eaton............................................335.......187..........148.....79%
Discovery Comm (44)....................322.......220..........102.....46%
L-3 Communications......................311.......350..........(39)....(11)%
Waste Management........................306.......302............4........1%
Omincom Group............................290.......267...........23........9%
Paccar...........................................286.........96..........190....198%
Coach (45).....................................279.......251...........28.....11%
Bunge Ltd......................................278.........89..........189....212%
Western Union..............................275.......276..........(1).......0%
Eastman Chemical.........................271.......157..........114.....73%
Nucor............................................266........64..........202....316%
WW Grainger.................................261.......181...........80.....44%
Republic Services (46)..................260.......248...........12.......5%
VF Corp........................................258.......210...........48.....23%
Lubrizol........................................255.......252............3........1%
Hershey........................................252.......230...........22.....10%
CONSOL Energy.............................251.......142..........109.....77%
Peabody Energy............................247.......193...........54.....28%
Dover............................................241.......177...........64.....36%
Wynn Resorts Ltd..........................228........63..........165....262%
Simon Property Group..................219.......186...........33.....18%
Rockwell Collins............................219.......196...........23.....12%
Avnet............................................213.......157...........56.....36%
Mead Johnson Nutritional.............210.......186...........24.....13%
NII Holdings..................................204.......103..........101...98%
Rockwell Automation....................204.......134...........70.....52%
Lear..............................................203........80..........123....154%
CNH Global NV..............................198........69..........129....187%
Arrow Electronics.........................196.......127...........69.....54%
McGraw-Hill.................................195.......168...........27.....16%
EQT..............................................194.......138...........56.....41%
OReilly Automotive (47)...............192.......158...........34.....22%
Genuine Parts...............................192.......162...........30.....19%
Goodyear.....................................186.........29..........157...541%
Harley Davidson...........................183.......130...........53.....41%
Stanley Black & Decker..................182......(107)........289...270%
Cooper Industries.........................181.......147...........34.....23%
Celanese (48)................................180.........65..........115...177%
Dr Pepper Snapple........................178.......157..........21......13%
Amphenol....................................178.......135..........43......32%
ITT...............................................171.......219.........(48)...(22)%
Timken.........................................171.........75...........96....128%
Borg Warner.................................170.......102...........68.....67%
Ingersoll-Rand.............................169.........74...........95....128%
Steel Dynamics.............................167.........98...........69.....70%
Sigma Aldrich...............................165.......145...........20.....14%
Ball Corp (49)...............................159.........99...........60.....61%
Safeway........................................157.......148............9.......6%
CH Robinson WW..........................157........136...........21.....15%
Whirlpool (50)..............................155........217..........(62)...(29)%
Energen........................................152........183..........(31)...(17)%
Marriott.......................................152........129...........23.....18%
Gannett........................................137........174..........(37)...(21)%
Pitney Bowes................................134........160..........(26)...(16)%
Oshkosh.......................................112........450........(338)..(75)%
US Steel........................................(70)......(165)..........95.....58%
Hertz Global Holdings(50A).........(107).....(158)..........51.....32%
United Continental.......................(211).......(82)........(129).(157)%
Eastman Kodak (51).....................(273).......347......(620)..(179)%
Delta Air Lines.............................(389)......(246).......(143)..(58)%
Sprint Nextel...............................(402)......(794).......392.....49%
AMR............................................(436)......(505)..........69.....14%
Total 108 in Other Sectors........69,027....56,725....12,302....22%
Total 256 Big US Corps...........255,517..197,556....57,961....29%
And then, here are the March 2011 Quarter End 128 US Big Corps, which have released their first quarter 2011 earnings in the month of May 2011.
................................................................................Increase
........................................Pretax Income(Loss)......(Decrease)...
..........................................1Q 2011...1Q 2010......Amount.....%.
...................................................(millions of dollars)....
March 2011 Quarter Ends
Month of May Releases
Big Oil&Gas
Marathon Oil(52)..................2,038..........591.........1,447....245%
Anadarko Petroleum(53).........759..........657...........102......16%
Devon Energy(54)...................748..........968..........(220)....(23)%
Spectra Energy........................514..........459.............55......12%
Murphy Oil..............................460..........286...........174......61%
Entrprse Prods Partners LP.....442..........401..............41......10%
Chesapeake Energy(55)...........428..........486............(58)....(12)%
Williams Cos(56)......................386..........364.............22.......6%
EOG Resources(57)..................310..........267.............43......16%
El Paso Corp(58)......................305..........352............(47)....(13)%
OneOK.....................................284..........284.................0......0%
Energy Transfer Partners LP....258..........246...............12.......5%
Transocean..............................245..........830..........(585)...(70)%
Frontier Oil..............................220..........(65)...........285....438%
Energy Transfer Equity LP.......209..........209...............0........0%
Atmos Energy..........................206..........185.............21.......11%
Cimarex Energy(59).................205..........270...........(65)...(24)%
Plains All American Ppln LP.....198...........151.............47.....31%
Tesoro......................................177.........(239)..........416....174%
Denbury Resources(60)...........164............34............130....382%
El Paso Ppln Partners LP...........163..........187............(24)...(13)%
Concho Resources(61)..............154............88.............66.....75%
Total 22 Big Oil&Gas..............8,873........7,011........1,862.....27%
Big Technology
Activision Blizzard...................676...........511...........165.....32%
CA Technologies......................289..........217.............72.....33%
CSC..........................................282...........298...........(16)....(5)%
Cognizant Technology..............281..........179............102.....57%
Symantec(61A)........................233..........209.............24.....11%
Scripps Ntwks Inter..................209..........141.............68.....48%
Harris Corp..............................206...........246...........(40)...(16)%
Electronic Arts(62)..................157.............80............77.....96%
First Solar................................133...........195...........(62)...(32)%
Total 9 Big Technology..........2,466.......2,076............390.....19%
Big Financial
Berkshire Hathaway(63).......4,043.......3,369...........674.....20%
KKR......................................2,348.......2,407...........(59)....(2)%
AIG(64)................................1,815.......1,309............506.....39%
MetLife.................................1,483.......1,185............298.....25%
Visa.......................................1,377.......1,113...........264.....24%
Mastercard...............................836.........695............141.....20%
Loews.......................................761.........896...........(135)...(15)%
Annaly Capital Mgt(65).............712.........288...........424....147%
Prudential Financial.................704.......1,009.........(305)...(30)%
Merrill Lynch(66).....................621........3,223......(2,602)...(81)%
ACE Ltd(67)..............................603.........879.........(276)...(31)%
Freddie Mac...........................602....(6,792)......7,394...109%
HSBC USA..................................562........858..........(296)...(34)%
Santander Holdings USA............494........135............359....266%
Marsh & McLennan....................447........377.............70.....19%
Erie Indemnity..........................412.........228............184.....81%
Hartford Fincl Svcs....................410.........535...........(125)..(23)%
CNA Financial............................335.........357............(22)....(6)%
Unum Group..............................330.........361............(31)....(9)%
Principal Financial.....................319.........288.............31.....11%
Apollo Global Management........260.........(69)..........329....477%
IntercontinentalExchange..........196.........157............39.....25%
Assured Guaranty Ltd................192.........437..........(245)..(56)%
ING Life Insur&Annuity.............171.........105............66.....63%
Chimera Investment...................164.........126............38.....30%
XL Capital Group(68)..................155.........141.............14.....10%
Fidelity Natl Info Svcs................149.........154.............(5)....(3)%
Ally Financial(69).......................141.........305.........(164)...(54)%
Radian Group.............................100........(497).........597....120%
Sun Life Assurance (US)...............25..........164.........(139)...(85)%
PMI Group.................................(126).......(246).........120......49%
HSBC Finance Corp.....................(212).......(998).........786......79%
Fortress Investment Group........(234)......(260)...........26.....10%
First Data...................................(332)......(347)...........15.......4%
AXA Financial............................(415).......269.........(684)..(254)%
AXA Equitable Life Ins..............(887).......444.......(1,331)..(300)%
MBIA......................................(1,556)....(2,259)........703.....31%
Fannie Mae.............................(6,469)...(11,596)......5,127....44%
Total 38 Big Financial.............10,536.....(1,250)....11,786...943%
Big Health Care
Pfizer(70)...............................3,747.........3,291.........456.....14%
CVS Caremark.........................1,177.........1,282........(105)....(8)%
HCA(71)....................................698............685............13.......2%
Cigna.........................................600............422.........178.....42%
McKesson..................................558............532............26.......5%
Humana.....................................497............417...........80.....19%
Allergan(72)..............................291............275...........16.......6%
Cephalon(73).............................179............149...........30.....20%
Davita........................................178............199..........(21)...(11)%
Mylan Labs(74)..........................155............126...........29.....23%
Tenet Healthcare(74A)...............153.............93...........60.....65%
Total 11 Big Health Care..........8,233.........7,471........762.....10%
Big Corps in Other Sectors
General Motors(75)................2,110..........1,582........528.....33%
Comcast..................................1,635..........1,470........165.....11%
Disney.....................................1,568..........1,535.........33......2%
Kraft Foods(76).......................1,200.............881........319.....36%
NewsCorp(77).........................1,064..........1,156........(92)....(8)%
DIRECTV(78)...........................1,032............858........174.....20%
Time Warner..............................982...........1,114.......(132)...(12)%
Burlington No Santa Fe(79)........965.............853........112.....13%
LyondellBasell NV......................925............(187).....1,112...595%
Emerson Electric........................833..............601........232.....39%
Archer Daniels Midland..............791.............534........257.....48%
AES(80).....................................670.............605.........65.....11%
Liberty Media(81)......................611................77........534....694%
Publix Super Markets.................604..............554.........50.......9%
DISH Network(82).....................540..............354........186.....53%
Kellogg......................................505..............573........(68)...(12)%
CF Industries(82A)...................450..............(26).......476...1831%
Sysco(83)..................................441..............403.........38.......9%
Las Vegas Sands.........................410...............61........349....572%
Precision Castparts....................400..............358.........42.....12%
CenturyLink...............................375..............450........(75)..(17)%
Qwest Comm(84)........................357..............289.........68.....24%
TRW Automotive........................347..............263.........84.....32%
CBS.............................................338.................6........332....NM%
Vornado Realty Trust.................318..............248.........70.....28%
Fluor..........................................241..............233..........8.......3%
Tyson Foods...............................241..............249.........(8)....(3)%
Scott's Miracle-Grow..................232..............183.........49.....27%
Estee Lauder(85)........................229..............108........121....112%
Avon Products...........................225..............126.........99.....79%
Clorox........................................219..............209.........10.......5%
Liberty Global(85A)...................213...............24........189....788%
AGL Resources...........................210..............227........(17)....(7)%
Sara Lee.....................................197..............197..........0.......0%
National Fuel Gas.......................188..............130.........58.....45%
Cablevision Systems...................182..............145.........37.....26%
Public Storage(86).....................180..............164.........16.....10%
Advance Auto Parts...................176..............177.........(1)....(1)%
American Tower........................163..............125.........38.....30%
Chrysler....................................160.............(162).......322....199%
Expeditors Intl Wash.................150..............103.........47.....46%
Polo Ralph Lauren.....................112...............167........(55)..(33)%
NewPage....................................(87)............(175)........88 .....50%
YRC Worldwide........................(107)............(276).......169.....61%
MGM Resorts(87).....................(144)............(213)........69.....32%
Avaya(87A).............................(167)...........(300).......133.....44%
Clear Channel Comm(88)..........(224)............(311)........87.....28%
Caesars Entertain(89)...............(256)............(252)........(4)....(2)%
Total 48 in Other Sectors.......21,804..........15,490...6,314.....41%
Total 128 Big Corps................51,912..........30,798..21,114....69%
And below here are the 66 US Big Corps with either January or February 2011 quarter ends.
.................................................................................Increase
.........................................Pretax Income(Loss)......(Decrease)...
............................................1Q 2011...1Q 2010......Amount.....%.
...................................................(millions of dollars)....
Jan and Feb 2011 Quarter Ends
Technology
Hewlett Packard....................3,297........2,804............493.....18%
Oracle...................................2,799........1,582..........1,217.....77%
Cisco Systems.......................1,730........2,355...........(625)..(27)%
Dell.......................................1,127..........469.............658....140%
Accenture...............................774..........639.............135.....21%
Applied Materials...................680...........119..............561....471%
Adobe Systems.......................286...........166.............120.....72%
Analog Devices.......................259...........148.............111.....75%
Marvell Technology................226...........216..............10.......5%
Paychex.................................200...........169..............31.....18%
Agilent Technologies..............198.............83.............115....139%
SAIC.......................................195...........191................4.......2%
NetApp..................................190...........118...............72.....61%
Micron Technology................158...........370...........(212)...(57)%
Total 14 Technology...........12,119.......9,429..........2,690....29%
Retail
Walmart..............................7,472........6,989............483.......7%
Target..................................1,588........1,409............179.....13%
Walgreens............................1,189........1,064............125.....12%
Macy's (90)..........................1,026..........850............176.....21%
Best Buy...............................1,000.......1,273..........(273)....(21)%
Home Depot (91).....................950..........569............381.....67%
Kohls......................................788..........691..............97.....14%
TJX (92)..................................675..........633.............42.......7%
Limited Brands (93)................666..........536............130.....24%
GAP........................................597..........587.............10.......2%
Costco....................................573..........474.............99.....21%
Sears Holding..........................569..........678..........(109)...(16)%
Bed Bath & Beyond..................463..........371.............92.....25%
Lowes.....................................456..........322............134.....42%
Kroger....................................449..........388.............61.....32%
JC Penney...............................400..........318.............82.....26%
Staples....................................374..........365...............9.......2%
Nordstrom..............................373..........277.............96.....35%
GameStop...............................370..........338.............32.......9%
Dollar General (94)..................343..........258.............85.....33%
Tiffany....................................267..........210.............57.....27%
Ross Stores.............................261..........229.............32.....14%
Dollar Tree..............................258..........217.............41.....19%
Autozone................................232..........194.............38.....20%
Darden Restaurants.................199..........175.............24.....14%
Family Dollar Stores................196..........178.............18.....10%
Williams Sonoma.....................184..........141.............43.....30%
Big Lots...................................176..........169..............7.......4%
Dillards....................................163..........116.............47.....41%
Guess?......................................151..........125.............26.....21%
Aeropostale.............................144..........159............(15)....(9)%
Supervalu (95).........................129..........156............(27)...(17)%
Rite Aid..................................(204)........(187)..........(17)....(9)%
Total 33 Retail.....................22,477.....20,272........2,205......11%
Other Sectors
Monsanto..............................1,454........1,249...........205.....16%
Medtronic.............................1,013........1,063...........(50)....(5)%
Deere.......................................746..........364............382....105%
Mosaic.....................................723..........357............366....103%
Discover Fincl Svcs..................720.........(171)...........891....521%
Nike.........................................707..........662.............45.......7%
General Mills............................570..........467...........103.....22%
HJ Heinz...................................374..........366..............8.......2%
FedEx.......................................360..........381...........(21)....(6)%
Campbell Soup..........................328..........365...........(37)...(10)%
ConAgra Foods.........................326..........321..............5.......2%
Hormel Foods...........................230..........170............60.....35%
Brown Forman..........................219..........167............52.....31%
CHS...........................................214...........93............121...130%
JM Smucker (96).......................213..........207.............6.......3%
Apollo Group (97).....................196..........215...........(19)....(9)%
Smithfield Foods (98)................177...........29............148...510%
Jefferies Group..........................163..........122.............41.....34%
Carnival (99).............................157..........116.............41....35%
Total 19 in Other Sectors........8,890.......6,543.......2,347....36%
Total 66 Jan/Feb Qtr Ends...43,486......36,244.......7,242....20%
(1) BP PTI exclude non-operating items, which include Gulf of Mexico oil spill Charges, impairments and gains of sale of businesses and fixed assets, and FMV gains and losses from embedded derivatives.
(2) Occidental Petroleum 2011 PTI excludes loss on debt extinguishment.
(3) Valero Energy 2011 PTI excludes loss on derivative contracts.
(4) Noble Energy PTI exclude gains and losses on commodity derivative instruments.
(5) Whiting Petroleum PTI exclude derivative gains and losses.
(6) Newfield Exploration PTI exclude derivative gains and losses.
(7) Qualcomm 2011 PTI excludes Goodwill impairment charge.
(8) Texas Instrument 2011 PTI was negatively impacted by Japanese Earthquake and Tsunami.
(9) Corning 2010 PTI excludes asbestos credit.
(10) Amazon 2011 PTI includes much higher infrastructure investment charges, which GAAP requires to be charged to expense when incurred.
(11) Maxim Integrated Products 2010 PTI includes various one-time charges.
(12) 2011 PTI for both Western Digital and Seagate Technology were negatively impacted by severe supply chain disruptions from the Japanese Earthquake and Tsunami.
(13) Freescale Semiconductor 2010 PTI excludes loss on debt extinguishment.
(14) JP Morgan Chase PTI includes litigation charges. If these were excluded in both years, JP Morgan Chase's 1Q 2011 earnings growth would be 24%.
(15) GE Financial Services are shown here above separately, even though they are included in GE's consolidated income statement.
(16) Morgan Stanley 2011 PTI excludes loss from its 40% stake in a Japanese joint venture.
(17) AFLAC 2011 PTI includes large asset impairments/losses on sale of its investments in three Greek financial institutions.
(18) Charles Schwab 2010 PTI excludes class action litigation charge.
(19) Hudson City Bancorp 2011 PTI excludes huge loss on debt extinguishment.
(20) Arch Capital Group Limited 2010 PTI excludes catastrophe losses from the Japan and New Zealand Earthquakes, and from Australian Floods. Also, both years PTI exclude foreign exchange gains and losses.
(21) Transatlantic Holdings 2011 PTI excludes catastrophe charges related to the Japan Earthquake, the New Zealand Earthquake, and the Australian Floods.
(22) Torchmark PTI in both years are its reported Pretax Operating Income.
(23) Everest Re Group 2011 PTI excludes catastrophe charges related to the Japanese Earthquake and Tsunami, and to the New Zealand Earthquake.
(24) JNJ PTI in both years exclude Litigation Expense(Income). Its 2011 PTI also excludes DePuy hip recall charges.
(25) Merck 2011 PTI excludes JNJ arbitration charges, In Process R&D impairment charges, and gains on sale of assets.
(26) Eli Lilly PTI excludes Acquired In Process R&D charges.
(27) Abbott Labs 2011 PTI excludes Acquired In Process R&D charge, Litigation Reserve charges, and charges from change to a calendar year for its international operations. Its 2010 PTI excludes Devaluation of the Venezuela bolivar charge.
(28) Aetna 2010 PTI excludes litigation insurance gain.
(29) Baxter 2010 PTI excludes large Colleague infusion pump charges.
(30) Biogen IDEC 2010 PTI excludes Acquired In Process R&D charge.
(31) Forest Labs 2010 PTI excludes Acquired In Process R&D charge.
(32) Celgene 2011 PTI excludes Acquired In Process R&D impairment charge and Acquisition Gain.
(33) Boston Scientific 2011 PTI excludes Goodwill Impairment charge and gains on divestitures. Its 2010 PTI excludes Intangible asset impairment charges and Acquisition milestone credit.
(34) GE 2011 PTI excludes huge NBCU pretax gain.
(35) DuPont PTI excludes Pretax exchange gains and losses.
(36) PepsiCo PTI includes many unusual charges and credits, which pretty much net out.
(37) Dow Chemical 2011 PTI excludes loss on debt extinguishment.
(38) Colgate Palmolive 2010 PTI excludes Venezuela hyperinflation transition charge.
(39) Boeing 2011 PTI includes much higher pension expense charge.
(40) Viacom 2011 PTI excludes loss on debt extinguishment. Its 2010 PTI excludes asset impairment charges.
(41) Alcoa 2010 PTI excludes asset impairment charges.
(42) TE Connectivity Ltd, formerly Tyco Electronics Ltd, 2010 PTI excludes tax credit adjustments included in Other Income.
(43) International Paper 2010 PTI excludes plant shutdown costs.
(44) Discovery Communications 2011 PTI excludes gains on dispositions.
(45) Coach 2011 PTI exclude charitable contribution charge.
(46) Republic Services 2010 PTI excludes loss on debt extinguishment.
(47) OReilly Automotive 2011 PTI excludes debt extinguishment charges.
(48) Celanese 2010 PTI excludes asset impairment charges.
(49) Ball Corp 2011 PTI excludes asset writeoffs.
(50) Whirlpool 2010 PTI excludes supplier quality-related issue accrual and Other Post-retirement Benefit curtailment gain.
(50A) Hertz Global Holdings 2011 PTL excludes loss on debt extinguishment.
(51) Eastman Kodak 2010 PTI excludes loss on debt extinguishment.
(52) Marathon Oil 2011 PTI excludes loss on debt extinguishment. Its 2010 PTI excludes both gains on asset disposals and asset impairments.
(53) Anadarko Petroleum excludes derivative gains and losses.
(54) Devon Energy excludes derivative gains and losses.
(55) Chesapeake Energy excludes hedging gains and losses.
(56) Williams Companies 2010 PTI excludes loss on debt extinguishment.
(57) EOG Resources 2011 PTI excludes gain on property dispositions, losses on derivatives, and asset impairment charges. Its 2010 PTI excludes asset impairment charges.
(58) El Paso Corp excludes derivative gains and losses. Its 2011 PTI also excludes loss on debt extinguishment.
(59) Cimarex Energy excludes derivative gains and losses.
(60) Denbury Resources 2011 PTI excludes both derivative losses and loss on debt extinguishment. Its 2010 PTI excludes both derivative gains and gain on sale of Genesis.
(61) Concho Resources excludes derivative gains and losses.
(61A) Symantec 2011 PTI excludes intangible asset impairment.
(62) Electronic Arts 2011 PTI excludes acquisition related contingent consideration charge.
(63) Berkshire Hathaway
..............................................................1Q 2011.....1Q 2010
................................................................millions of dollars
Pretax Income as Reported......................2,234.......5,098
Catastrophe Charges (Japan and
....New Zealand Earthquakes and
....Australia Floods)..................................1,673
Investment Gains........................................(99)......(1,318)*
Derivative Gains........................................(271)........(411)
Investment Impairment Charges
....Reclassified from Other Comprehensive
....Income to Regular Income Statement.....506
=Core Pretax Income...............................4,043........3,369
* Includes Holding Gain on Investment in Burlington No Sante Fe
(64) AIG
..............................................................1Q 2011.....1Q 2010
................................................................millions of dollars
Pretax Income(Loss) as Reported...........(1,380).......1,641
Loss on Debt Extinguishment....................3,313
Catastrophe Charges (Japan and
....New Zealand Earthquakes and
....Australia Floods)..................................1,688
Change in Fair Value of AIA Securities.....(1,062)
Change in Fair Value of Investment
....in Maiden Lane......................................(744)
Bargain Purchase Gain...............................................(332)
=Core Pretax Income...............................1,815........1,309
(65) Annaly Capital Management includes unrealized gains and losses from interest rate swaps.
(66) Merrill Lynch is owned by Bank of America and its earnings numbers are embedded in Bank of America's numbers. It reports its separate results with the SEC.
(67) ACE Ltd 2011 PTI excludes catastrophe charges from the Japan earthquake and tsunami.
(68) XL Capital Group 2011 PTI excludes catastrophe charges from the Japan earthquake and tsunami, the New Zealand earthquake and the Australian floods. Both years also exclude foreign currency gains and losses.
(69) Ally Financial excludes losses on debt extinguishment.
(70) Pfizer 2011 PTI excludes both certain legal charges and In Process R&D charges. Its 2010 PTI excludes certain legal charges.
(71) HCA 2011 PTI excludes termination of management agreement charge.
(72) Allergan 2011 PTI excludes upfront collaboration and co-promotion fee charge. Its 2010 PTI excludes upfront licensing fee charge.
(73) Cephalon 2011 PTI excludes change in fair value of investments and acquired In Process R&D charges.
(74) Mylan Labs 2011 PTI excludes litigation settlement charge.
(74A) Tenet Healthcare 2011 PTI excludes litigation settlement charge.
(75) General Motors
...............................................................1Q 2011.....1Q 2010
.................................................................millions of dollars
Pretax Income as Reported......................3,548.......1,705
Gain on Sale of Delphi Auto.....................(1,600)
Gain on Sale of Ally Fincl Preferred Stock...(339)
Goodwill Impairment Charge......................395
Impairment of Investment in India JV........106
Gain on Sale of SAAB Auto..........................................(123)
=Core Pretax Income................................2,110........1,582
(76) Kraft Foods 2010 PTI excludes both transaction related fees and acquisition financing fees.
(77) NewsCorp 2011 PTI excludes litigation settlement charge.
(78) DIRECTV 2010 PTI excludes Liberty transaction and related gains.
(79) Burlington Northern Santa Fe is owned by Berkshire Hathaway and its earnings numbers are embedded in Berkshire's numbers. It reports its separate results with the SEC.
(80) AES excludes foreign currency gains and losses.
(81) Liberty Media excludes gains on financial instruments. Its 2010 PTI also excludes gains on dispositions.
(82) DISH Network 2011 PTI excludes litigation income.
(82A) CF Industries earnings exclude gains on sales of assets.
(83) Sysco 2011 PTI excludes pension plan withdrawal charge.
(84) Qwest Communications
(85) Estee Lauder 2011 PTI excludes intangible asset impairment charge.
(85A) Liberty Global excludes derivative losses, foreign currency gains and losses, and gains and losses on changes in the fair value of investments and debt.
(86) Public Storage excludes foreign currency gains and losses.
(87) MGM Resorts 2010 PTI excludes both gain on debt extinguishment and asset impairment charges.
(87A) Avaya 2011 PTL excludes loss on debt extinguishment.
(88) Clear Channel Communications 2010 excludes gain on debt extinguishment.
(89) Caesars Entertainment excludes gains and losses on debt extinguishment.
(90) Macy's 2010 PTI excludes asset impairment charges.
(91) Home Depot 2010 PTI excludes Investment in HD Supply impairment charge.
(92) TJX 2011 PTI excludes AJ Wright Division charges.
(93) Limited Brands excludes gain related to Express.
(94) Dollar General 2010 PTI excludes loss on debt retirement and sponsor advisory agreement termination charge.
(95) Supervalu 2011 PTI excludes intangible asset impairment charge.
(96) JM Smucker PTI excludes asset impairment charges.
(97) Apollo Group 2011 PTI excludes intangible asset charges. Its 2010 PTI excludes litigation loss.
(98) Smithfield Foods 2011 PTI excludes gain on fire insurance recovery.
(99) Carnival 2010 PTI excludes gain from sale of P&O Cruise Artemis.
The above research, where I found 768 US Big Corps, was performed through the end of March 2011. Since then, in April and May 2011, I extended this research, and I found 134 additional US Big Corps. These 134 US Big Corp Late Additions, which were shown as an update at the bottom of my earlier post, had Total Core Pretax Income growth in 2010 of a blistering 4039%, more than 50 times the torrid 72% earnings growth of the 768 US Big Corps I researched earlier. These late additions step up the Total Core Pretax Income growth in 2010 for these 902 US Big Corps to a superlative 77%.
Since the 2010 Earnings base has increased so much due to this soaring earnings growth in 2010, it only makes sense that Earnings growth should substantially moderate in 2011.
But guess what? Core Pretax Earnings Growth of US Big Corps continued to explode upwardly in the first quarter of 2011. And this happened despite real US GDP growth of only 1.8% in the 1Q 2011, despite the disastrous Japanese earthquake and tsunami, despite energy prices going through the roof, despite the US Economic Stimulus winding down, despite still sky-high US unemployment and underemployment rates, despite the horrible US housing crisis continuing unabated, despite a Federal Government Debt level north of $14 trillion, and despite nearly all State Budgets continuing to be under extreme financial pressure.
And about half of the country still thinks the Obama Administration hasn’t helped the absolutely horrible US economy it inherited, which was clearly headed for an almost certain depression. And these same people, including many in business, still think the Obama Administration has not helped businesses of any size, and has severely harmed US Big Business.
My gosh, the US stock market has doubled in the past two years, driven by these substantially higher US Big Business earnings. The Obama Administration, along with wise actions by Ben Barnanke and the Fed, have propped up this extremely weak financial infrastructure, creating a US economic environment which permits US Big Corps to flourish.
Clearly, many more very bold US government actions are needed to bring down US unemployment and underemployment, to help spur small business growth, to bring down US gas prices, to make the US much more energy independent, to turn around the horrible US housing crisis, and to reduce the US Government annual deficit and projected long-term debt level. But for someone to assert that the US economy hasn't improved in the past two years, that is as crazy as still asserting that President Obama was born in Kenya or in Indonesia.
Anyway, from a thorough review of their most recent quarterly earnings releases, later below here are the US Big Corps that have reported their quarterly earnings in the first quarter of 2011.
I have defined US Big Corps here as ones that generated either Core Pretax Earnings or Losses of at least $150 mil in either the first quarter of 2011 or in the first quarter of 2010.
I have defined Core Pretax Income as excluding certain items. Most companies exclude many more items than I do in deriving their Core Pretax Income, or a similar term.
The items I exclude are large Fixed Asset Impairments, particularly those related to Intangible Assets, large Acquired In Process R&D Charges, large Gains and Losses on Debt Extinguishment, and clearly one-time, and clearly unusual large Charges or Credits.
I don't think it makes any sense to exclude Restructuring Charges and Merger and Related Costs because these frequently end up being recurring items.
I also don't think it makes any sense to exclude Amortization of Purchased Intangible Assets, since this is a continuing cost of making acquisitions.
I further think it's crazy to exclude items such as Amortization of Inventory Acquired in an acquisition. Many companies do, particularly drug companies. It's like saying a company they bought had Inventory on its books at $10, but when they bought the company, they paid $14 for the inventory. Now assume the inventory is later sold for $16. These companies are very aggressively saying that their true profit on this inventory is $6, not the $2 recorded under GAAP. Pure aggressive make believe, in my book!
I also think Stock-based Compensation is a necessary ongoing employee benefit cost, and thus should not be excluded from Pretax Income in deriving Core Pretax Income.
And I use Pretax Income rather than After-tax Net Income. When I want to find out how US businesses are thriving economically, I don't think creative tax strategies should come into play in making this economic assessment. I find that so many companies magically institute these tax strategies to make up for quarterly and annual Pretax Earnings shortfalls. Their huge Tax Reserves create a lot of opportunities for this fine-tuning of reported earnings.
And because of these creative tax measures, the growth in US Big Corps after-tax Net Income is significantly higher than their growth in Pretax Income.
Let me just cite a couple of the many large firms benefiting from huge tax breaks here.
Procter & Gamble's first quarter 2011 Pretax Income declined 3% from last year's first quarter. So what happened to its After-tax Net Income in the first quarter 2011? It amazingly increased by 11%.
And Microsoft's March 2011 Pretax Income increased 13% over last year. How did it's After-tax Net Income do? Well, it increased by a substantially higher 31%.
Further, these US Big Corps' EPS growth is even much higher than their growth in after-tax Net Income, due to many US Big Corps being very aggressive in their stock buybacks, which reduces the denominator in the EPS computation.
Let me cite a couple of the many large firms benefiting dramatically from huge stock buyback programs.
IBM's Net Income increased by 10% in the first quarter 2011. It's Earnings Per Share(EPS) increased by a substantially higher 17% in the first quarter 2011.
Procter and Gamble's Net Income increased by 11% in the first quarter 2011. It's EPS increased by a much higher 16%.
Health Insurer UnitedHealth Group's Net Income increased by 14% in the first quarter 2011. It's EPS increased by a much higher 18%.
But taking the cake with this financial engineering was Health Insurer WellPoint, whose Net Income increased 6% in the first quarter 2011. What happened with its EPS? It grew by an absolutely amazing 25% in the first quarter. This huge span between Net Income growth and EPS growth was caused by WellPoint spending $5.1 bil in just the past 15 months to buy back its own stock.
The problem with these massive stock buybacks is that the US economy would be so much more robust now if these massive amounts of money were instead invested by these large US Corps on growing their domestic businesses.....on US capital expenditures, on US research and development, and on hiring workers in the US.
Perhaps what is needed here is a wisely-designed disincentive for companies having clearly excessive stock buyback programs. I think it might make sense for companies using such a strategy to pay an annual financial fee to the US government for clearly excess stock buybacks.
Also, excessive stock buybacks have an additional risk to the country and its citizens....they substantially reduce the financial strength of businesses. The TARP 1 and TARP 2 bailouts would have been substantially less costly to the US Government if the financial companies bailed out would not have previously had substantial stock buyback programs.
Further, in the case of industries like Big Oil and Big Health Insurance, when you follow the money, just where did the massive amount of clearly windfall profits end up? In the hands of stockholders of firms like Exxon Mobil, WellPoint and UnitedHealth Group due to these companies' very huge stock buyback programs.....a bit of Robin Hood in Reverse. To show the magnitude of these numbers, in the most recent six years, Exxon Mobil returned $150 bil to its stockholders in stock buybacks.
Anyway, there were 66 of these Non-Utility US Big Corps with either January or February 2011 quarter ends. The Total Core Pretax Earnings of these 66 US Big Corps increased by a very healthy 20% in the first quarter 2011. Leading this hot earnings growth were the 14 Technology Big Corps, which registered strong earnings growth of 29%, after registering earnings growth of more than double that in 2010. Whew!
Getting more real time, I have found 256 similarly-defined Non-Utility US Big Corps that have March 2011 quarter ends, which have released, in the month of April 2011, their first quarter 2011 earnings.
How did they do? Well, the first quarter 2011 earnings growth totaled an incredible 29%. And this torrid first quarter earnings growth was after the even more torrid earnings growth in 2010.
What drove this strong first quarter earnings growth of these March quarter end US Big Corps?
As expected, US Big Oil was the main driver, registering total Pretax Earnings growth in the March 2011 quarter of a massive 47%. I included both BP and Royal Dutch Shell with the US Big Oil group, since they have such massive operations in Houston, and also since they make substantial sales to US customers.
Something clearly needs to be done here with these windfall profits of Big Oil, which have just devastated the entire US economy in the past decade.
Clearly, it would be wise to have very healthy energy tax credit incentives for businesses to make commercial building green retrofit investments. For multinational corps, this could be wisely paid for by providing a somewhat discounted federal income tax rate on a like amount of foreign earnings repatriated by businesses making these green investments. And the energy tax credits for purely domestic businesses of all sizes making these green investments can be fairly paid for by closing Big Oil tax loopholes and by instituting a windfall profits tax on Big Oil.
Just like 100% first-year tax expensing of equipment has worked so well in spurring US economic growth, this commercial building green retrofit investments proposal will do likewise. And the added benefits of the latter proposal is that it will create a lot of jobs in the very troubled construction industry, help prop up the very troubled commercial real estate market, and most important of all, make significant progress toward the key goal of US energy independence.
I think I would even go so far as to consider something really bold as either breaking up, or perhaps even nationalizing, Exxon Mobil, Chevron, and ConocoPhillips. When US Big Oil companies are only interested in maximizing their already windfall profits, while the rest of the country suffers so much, the US government must act in the best interests of all of its citizens.
Right behind US Big Oil in really strong first quarter 2011 earnings growth were the 36 US Technology Big Corps, whose total earnings growth in the March 2011 quarter was a very impressive 28%. And this strong growth occurred on top of earnings growth of more than double that in 2010. Also, this strong growth occurred despite many US technology companies having severe supply disruptions caused by the Japan earthquake and tsunami.
Next came the 55 US Big Financial Corps, whose total earnings in the March 2011 quarter increased by a very strong 29%. On the downside here, a substantial portion of this earnings growth was due to much lower Loan Loss Provisions. Something needs to be done to spur loan growth by these financial institutions to small businesses. And much bolder action is needed to get large financial institutions to write down underwater first and second home mortgages.
How did the late reporting March 2011 Quarter End Big Corps do?
Well, those releasing their March 2011 quarter earnings in the month of May 2011 did substantially better than those reporting their March quarterly earnings in the month of April 2011. This exceptionally strong earnings performance was driven in large part by the Big Financial Corps.
The month of May earnings reporters registered a blistering earnings growth of 69% in the March 2011 quarter, bringing the total March 2011 Quarter End earnings increase to a very strong 35%, which was on the back of a torrent 77% total annual earnings increase in the year 2010 over 2009. Whoa!...now that is 15 months of spectacular earnings growth.
Here is a summary of all first quarter 2011 earnings reported by US Big Corps:
......................................# of
......................................Big............1Q...........1Q........Increase.
.....................................Corps.......2011.......2010.....Amount..%
........................................................millions of dollars
Jan/Feb QTR Ends...........66.......43,486.....36,244.....7,242..20%
March QTR Ends:
..April Releases..............256.....255,517...197,556...57,961..29%
..May Releases...............128.......51,912.....30,798....21,114..69%
..= All March QTR Ends..384....307,429...228,354...79,075..35%
All 1Q Ends....................450.....350,915...264,598...86,317...33%
First, here are the March 2011 Quarter End 256 US Big Corps, which have released their first quarter 2011 earnings by the end of the month of April 2011.
................................................................................Increase
........................................Pretax Income(Loss)......(Decrease)...
..........................................1Q 2011...1Q 2010......Amount.....%.
...................................................(millions of dollars)....
March 2011 Quarter Ends
Month of April Releases
Big Oil&Gas
Exxon Mobil.......................18,917.....12,068.........6,849.....57%
Royal Dutch Shell................16,423......9,966.........6,457.....65%
BP (1)..................................11,268......9,378..........1,890.....20%
Chevron..............................11,122......7,650.........3,472.....45%
ConocoPhillips.....................5,796......3,990..........1,806.....45%
Occidental Petroleum (2)......2,622......1,867.............755.....40%
Apache.................................1,927......1,207............720.....60%
Hess......................................1,485.........966.............519.....54%
Schlumberger.......................1,238.........888.............350.....39%
Halliburton..............................741.........333............408....123%
Valero Energy (3)....................686........(112)............798....713%
Natl Oilwell Varco....................593.........616.............(23).....(4)%
Baker Hughes...........................588.........194.............394....203%
Kinder Morgan Egy Prtnrs LP...347........228.............119......52%
Noble Energy (4)......................323.........198.............125......63%
Diamond Offshore....................297.........406...........(109)...(27)%
Southwestern Energy...............226.........282.............(56)...(20)%
Whiting Petroleum (5)..............166.........125...............41......33%
Helmerich & Payne...................159..........98...............61......62%
Newfield Exploration (6)..........155..........151................4........3%
Cameron Intl............................140.........161..............(21)...(13)%
Ensco Intl...................................83.........197............(114)...(58)%
Noble Corp.................................70.........426............(356)...(84)%
Total 23 Oil&Gas..................75,372.....51,283.........24,089....47%
Big Technology
Apple....................................7,900......4,029..........3,871.....96%
Microsoft...............................6,025......5,341.............684.....13%
Intel.......................................4,371......3,446............925.....27%
IBM........................................3,817......3,515............302.......9%
Google....................................2,892......2,506............386.....15%
Qualcomm (7)........................1,372.........965............407.....42%
Honeywell................................975.........702............273.....39%
Texas Instruments (8)...............918.........957.............(39).....(4)%
Corning (9)...............................862..........861................1......0%
EMC..........................................624.........483.............141.....29%
Ebay.........................................568.........495...............73.....15%
Danaher....................................562.........393.............169.....43%
Johnson Controls.....................475.........384..............91......24%
Xerox.......................................350..........(10)...........360.....NM
Sandisk.....................................331..........323................8......2%
Amazon (10).............................307.........401.............(94)...(23)%
KLA Tencor...............................302..........80.............222....278%
Goodrich...................................260.........181..............79.....44%
Altera........................................245.........160..............85.....53%
Broadcom..................................232.........212..............20......9%
Lam Research............................199.........151..............48.....32%
Yahoo........................................195.........274............(79)...(29)%
Fiserv........................................176.........193.............(17)....(9)%
Motorola Solutions....................173.........109.............64......59%
Juniper Networks.......................171.........162..............9.......6%
Linear Technology......................171.........138.............33....24%
Xilinx..........................................169.........162..............7.......4%
Maxim Integrated Prods (11)......162.........130.............32.....25%
Western Digital (12).....................159........440..........(281)...(64)%
VMware.......................................156.........98............58......59%
Flextronics..................................154.........66............88.....133%
CheckPoint Software....................152........123............29......24%
Seagate Technology (12)..............122........522.........(400)...(77)%
Lexmark.....................................106.........126..........(20)...(16)%
Motorola Mobility.......................(51).......(199).........148.....74%
Freescale Semicond (13)............(151).......(214)...........63.....29%
..Total 36 Technology............35,451.....27,705.......7,746....28%
Big Financial
JP Morgan Chase (14)...............8,057......4,537........3,520.....78%
Wells Fargo..............................5,386......4,001.........1,385.....35%
Citigroup.................................5,285......4,216..........1,069.....25%
Goldman Sachs........................4,040......5,159........(1,119)..(22)%
Bank of America......................2,780......4,389........(1,609)..(37)%
GE Fincl Services (15)..............2,251.........165..........2,086....NM
American Express...................1,732......1,252............480.....38%
Morgan Stanley (16)................1,527......2,515...........(988)...(39)%
US Bancorp..............................1,395........824............571.....69%
Capital One Fincl......................1,386........964............422.....44%
PNC Financial...........................1,140........899............241.....27%
Travelers....................................969........857............112.....13%
Bank NY Mellon..........................949........884..............65.......7%
BlackRock..................................813........656.............157.....24%
Allstate......................................734........107............627...586%
Chubb........................................685........604..............81.....13%
Franklin Resources....................679........508............171.....34%
State Street................................660........702............(42)...(6)%
AFLAC (17)...............................600........974...........(374)..(38)%
Progressive...............................545........439............106.....24%
CME Group................................512........399.............113.....28%
Lincoln National.......................469........349.............120.....34%
Charles Schwab (18)..................394........209.............185.....89%
KeyCorp....................................393.......(123)............516...420%
Fifth Third Bancorp...................382.........(18)............400....NM
AON..........................................356.........247............109.....44%
T Rowe Price Group...................315.........244..............71.....29%
M&T Bank...................................309........220.............89.....40%
BB&T.........................................287.........242.............45.....19%
SLM..........................................276.........406...........(130)..(32)%
TD Ameritrade..........................275.........217.............58.....27%
Ameriprise Financial.................271.........361............(90)...(25)%
Hudson City Bancorp (19).........253.........248...............5.......2%
Reinsurance Group...................242.........193.............49.....25%
Arch Capital Group Ltd(20).......239.........185.............54.....29%
Moodys.....................................235........183.............52.....28%
Northern Trust..........................230........238.............(8)....(3)%
Transatlantic Hldgs (21).............224..........19...........205....NM
Interactive Brokers...................222..........65............157....242%
SunTrust Banks..........................220.......(353)..........573....162%
NYSE Euronext..........................213........173.............40.....23%
Torchmark (22).........................194..........189..............5.......3%
NY Community Bank..................189.........193............(4).....(2)%
Invesco Ltd...............................175.........265...........(90)...(34)%
Huntington Bancshares..............161............2............159..7950%
WR Berkley................................160.........161.............(1).....(1)%
Everest Re Group Ltd (23)...........153.........(10)..........163....NM
Nasdaq OMX Group....................152..........89............63......71%
CIT Group..................................136.........189...........(53)...(28)%
Blackstone Group.......................117........(228)..........345....151%
Regions Financial.........................57........(357)..........414....116%
CapitalSource...............................14........(198)..........212....107%
MGIC Investment.......................(32)........(151)...........119....79%
Synovus Financial.......................(80).......(275)..........195.....71%
Marshall & Ilsley........................(212).......(199)..........(13)...(7)%
Total 55 Financial...................49,114...38,026.......11,088....29%
Big Health Care
JNJ (24)...................................4,856......4,783...........73.......2%
Merck (25)...............................2,397........616........1,781....289%
UnitedHealth Group.................2,103......1,891..........212.....11%
Bristol Myers Squibb................1,767......1,452..........315.....22%
Eli Lilly (26).............................1,662......1,758..........(96)....(5)%
Wellpoint.................................1,427......1,335...........92.......7%
Abbott Labs (27)......................1,382......1,437..........(55).....(4)%
Amgen.....................................1,306......1,420.........(114).....(8)%
Aetna (28)..................................898........731...........167.....23%
Gilead Sciences...........................875......1,160........(285)...(25)%
Baxter (29).................................731........700...........31........4%
Covidien.....................................570........529...........41........8%
Medco Health Sols......................556........532...........24........5%
Express Scripts...........................513........414...........99......24%
Becton Dickinson........................428........411...........17........4%
Biogen IDEC (30)........................426........335...........91......27%
Cardinal Health..........................425........363...........62......17%
Stryker.......................................412........446..........(34).....(8)%
Forest Labs (31).........................408........315..........93......30%
Amerisource Bergen...................346........292..........54......18%
Celgene (32)...............................299........288..........11........4%
Thermo Fisher Scien...................299........260..........39......15%
St Jude Medical..........................296........326.........(30).....(9)%
Zimmer Holdings........................286........280............6........2%
Quest Diagnostics........................239........277.........(38)....(14)%
Assurant.....................................215........248.........(33)....(13)%
Lab Corp of America...................214........223..........(9)......(4)%
Boston Scientific (33)..................210.........83..........127.....153%
Universal Health Svcs.................204........128...........76......59%
CR Bard.......................................184........175............9........5%
Coventry Healthcare...................171........155...........16......10%
Intuitive Surgical.........................154........134...........20......15%
Varian Medical Sys.......................151........135...........16......12%
Hospira........................................143........185..........(42)...(23)%
Total 34 Health Care................26,553...23,817......2,736......11%
Big Other Sectors
AT&T........................................5,270......5,401........(131).....(2)%
GE (34).....................................4,235......2,807........1,428.....51%
Verizon....................................3,881......3,940.........(59)......(1)%
Procter & Gamble.....................3,641......3,762........(121).....(3)%
Freeport McMoran...................2,841.....1,888..........953.....50%
Philip Morris Intl......................2,794.....2,492..........302.....12%
Ford.........................................2,776.....2,135..........641.....30%
Coca Cola..................................2,511.....2,179..........332.....15%
DuPont (35)..............................1,845.....1,557..........288.....18%
Caterpillar................................1,763.......469........1,294....276%
McDonalds...............................1,699.....1,557..........142.......9%
United Technologies.................1,630.....1,352..........278.....21%
PepsiCo (36).............................1,563.....1,401..........162.....12%
3M............................................1,545.....1,403..........142.....10%
Altria Group.............................1,450.....1,281..........169.....13%
United Parcel Service................1,352.......953..........399.....42%
Dow Chemical (37)....................1,313.......655..........658....100%
Union Pacific.............................1,011.......834..........177.....21%
Newmont Mining.........................973.......886...........87......10%
Colgate Palmolive (38).................899.......933..........(34).....(4)%
General Dynamics........................896.......874..........22.........3%
Boeing (39)..................................883.....1,050.........(167)...(16)%
Lockheed Martin..........................786.......879..........(93)....(11)%
Northrop Grumman.....................758.......609..........149.....24%
Southern Copper..........................718.......588..........130.....22%
Viacom (40).................................666.......463..........203.....44%
Illinois Tool Works.......................644.......502..........142.....28%
CSX..............................................638.......501..........137.....27%
Time Warner Cable.......................582.......488...........94......19%
Cliff's Natural Resources...............562.......147..........415....282%
Praxair........................................556.......447..........109.....24%
Raytheon.....................................553.......681.........(128).....(19)%
Reynolds American......................525.......512...........13.......3%
Cummins......................................522.......257..........265....103%
Norfolk Southern..........................515.......456...........59......13%
Alcoa (41)....................................505.........41..........464...1132%
Kimberly Clark.............................484.......609.........(125)...(21)%
Air Prods & Chems........................422.......343...........79.....23%
Lorillard.......................................394.......373...........21.......6%
Parker Hannifin.............................390.......206..........184.....89%
Starbucks......................................389.......337...........52.....15%
Tyco Intl.......................................377.......361...........16.......4%
TE Connectivity Ltd (42)...............374.......377..........(3)......(1)%
International Paper (43)................368.........29..........339..1169%
Yum Brands..................................358.......323...........35.....11%
PPG Industries..............................351.......206..........145.....70%
Eaton............................................335.......187..........148.....79%
Discovery Comm (44)....................322.......220..........102.....46%
L-3 Communications......................311.......350..........(39)....(11)%
Waste Management........................306.......302............4........1%
Omincom Group............................290.......267...........23........9%
Paccar...........................................286.........96..........190....198%
Coach (45).....................................279.......251...........28.....11%
Bunge Ltd......................................278.........89..........189....212%
Western Union..............................275.......276..........(1).......0%
Eastman Chemical.........................271.......157..........114.....73%
Nucor............................................266........64..........202....316%
WW Grainger.................................261.......181...........80.....44%
Republic Services (46)..................260.......248...........12.......5%
VF Corp........................................258.......210...........48.....23%
Lubrizol........................................255.......252............3........1%
Hershey........................................252.......230...........22.....10%
CONSOL Energy.............................251.......142..........109.....77%
Peabody Energy............................247.......193...........54.....28%
Dover............................................241.......177...........64.....36%
Wynn Resorts Ltd..........................228........63..........165....262%
Simon Property Group..................219.......186...........33.....18%
Rockwell Collins............................219.......196...........23.....12%
Avnet............................................213.......157...........56.....36%
Mead Johnson Nutritional.............210.......186...........24.....13%
NII Holdings..................................204.......103..........101...98%
Rockwell Automation....................204.......134...........70.....52%
Lear..............................................203........80..........123....154%
CNH Global NV..............................198........69..........129....187%
Arrow Electronics.........................196.......127...........69.....54%
McGraw-Hill.................................195.......168...........27.....16%
EQT..............................................194.......138...........56.....41%
OReilly Automotive (47)...............192.......158...........34.....22%
Genuine Parts...............................192.......162...........30.....19%
Goodyear.....................................186.........29..........157...541%
Harley Davidson...........................183.......130...........53.....41%
Stanley Black & Decker..................182......(107)........289...270%
Cooper Industries.........................181.......147...........34.....23%
Celanese (48)................................180.........65..........115...177%
Dr Pepper Snapple........................178.......157..........21......13%
Amphenol....................................178.......135..........43......32%
ITT...............................................171.......219.........(48)...(22)%
Timken.........................................171.........75...........96....128%
Borg Warner.................................170.......102...........68.....67%
Ingersoll-Rand.............................169.........74...........95....128%
Steel Dynamics.............................167.........98...........69.....70%
Sigma Aldrich...............................165.......145...........20.....14%
Ball Corp (49)...............................159.........99...........60.....61%
Safeway........................................157.......148............9.......6%
CH Robinson WW..........................157........136...........21.....15%
Whirlpool (50)..............................155........217..........(62)...(29)%
Energen........................................152........183..........(31)...(17)%
Marriott.......................................152........129...........23.....18%
Gannett........................................137........174..........(37)...(21)%
Pitney Bowes................................134........160..........(26)...(16)%
Oshkosh.......................................112........450........(338)..(75)%
US Steel........................................(70)......(165)..........95.....58%
Hertz Global Holdings(50A).........(107).....(158)..........51.....32%
United Continental.......................(211).......(82)........(129).(157)%
Eastman Kodak (51).....................(273).......347......(620)..(179)%
Delta Air Lines.............................(389)......(246).......(143)..(58)%
Sprint Nextel...............................(402)......(794).......392.....49%
AMR............................................(436)......(505)..........69.....14%
Total 108 in Other Sectors........69,027....56,725....12,302....22%
Total 256 Big US Corps...........255,517..197,556....57,961....29%
And then, here are the March 2011 Quarter End 128 US Big Corps, which have released their first quarter 2011 earnings in the month of May 2011.
................................................................................Increase
........................................Pretax Income(Loss)......(Decrease)...
..........................................1Q 2011...1Q 2010......Amount.....%.
...................................................(millions of dollars)....
March 2011 Quarter Ends
Month of May Releases
Big Oil&Gas
Marathon Oil(52)..................2,038..........591.........1,447....245%
Anadarko Petroleum(53).........759..........657...........102......16%
Devon Energy(54)...................748..........968..........(220)....(23)%
Spectra Energy........................514..........459.............55......12%
Murphy Oil..............................460..........286...........174......61%
Entrprse Prods Partners LP.....442..........401..............41......10%
Chesapeake Energy(55)...........428..........486............(58)....(12)%
Williams Cos(56)......................386..........364.............22.......6%
EOG Resources(57)..................310..........267.............43......16%
El Paso Corp(58)......................305..........352............(47)....(13)%
OneOK.....................................284..........284.................0......0%
Energy Transfer Partners LP....258..........246...............12.......5%
Transocean..............................245..........830..........(585)...(70)%
Frontier Oil..............................220..........(65)...........285....438%
Energy Transfer Equity LP.......209..........209...............0........0%
Atmos Energy..........................206..........185.............21.......11%
Cimarex Energy(59).................205..........270...........(65)...(24)%
Plains All American Ppln LP.....198...........151.............47.....31%
Tesoro......................................177.........(239)..........416....174%
Denbury Resources(60)...........164............34............130....382%
El Paso Ppln Partners LP...........163..........187............(24)...(13)%
Concho Resources(61)..............154............88.............66.....75%
Total 22 Big Oil&Gas..............8,873........7,011........1,862.....27%
Big Technology
Activision Blizzard...................676...........511...........165.....32%
CA Technologies......................289..........217.............72.....33%
CSC..........................................282...........298...........(16)....(5)%
Cognizant Technology..............281..........179............102.....57%
Symantec(61A)........................233..........209.............24.....11%
Scripps Ntwks Inter..................209..........141.............68.....48%
Harris Corp..............................206...........246...........(40)...(16)%
Electronic Arts(62)..................157.............80............77.....96%
First Solar................................133...........195...........(62)...(32)%
Total 9 Big Technology..........2,466.......2,076............390.....19%
Big Financial
Berkshire Hathaway(63).......4,043.......3,369...........674.....20%
KKR......................................2,348.......2,407...........(59)....(2)%
AIG(64)................................1,815.......1,309............506.....39%
MetLife.................................1,483.......1,185............298.....25%
Visa.......................................1,377.......1,113...........264.....24%
Mastercard...............................836.........695............141.....20%
Loews.......................................761.........896...........(135)...(15)%
Annaly Capital Mgt(65).............712.........288...........424....147%
Prudential Financial.................704.......1,009.........(305)...(30)%
Merrill Lynch(66).....................621........3,223......(2,602)...(81)%
ACE Ltd(67)..............................603.........879.........(276)...(31)%
Freddie Mac...........................602....(6,792)......7,394...109%
HSBC USA..................................562........858..........(296)...(34)%
Santander Holdings USA............494........135............359....266%
Marsh & McLennan....................447........377.............70.....19%
Erie Indemnity..........................412.........228............184.....81%
Hartford Fincl Svcs....................410.........535...........(125)..(23)%
CNA Financial............................335.........357............(22)....(6)%
Unum Group..............................330.........361............(31)....(9)%
Principal Financial.....................319.........288.............31.....11%
Apollo Global Management........260.........(69)..........329....477%
IntercontinentalExchange..........196.........157............39.....25%
Assured Guaranty Ltd................192.........437..........(245)..(56)%
ING Life Insur&Annuity.............171.........105............66.....63%
Chimera Investment...................164.........126............38.....30%
XL Capital Group(68)..................155.........141.............14.....10%
Fidelity Natl Info Svcs................149.........154.............(5)....(3)%
Ally Financial(69).......................141.........305.........(164)...(54)%
Radian Group.............................100........(497).........597....120%
Sun Life Assurance (US)...............25..........164.........(139)...(85)%
PMI Group.................................(126).......(246).........120......49%
HSBC Finance Corp.....................(212).......(998).........786......79%
Fortress Investment Group........(234)......(260)...........26.....10%
First Data...................................(332)......(347)...........15.......4%
AXA Financial............................(415).......269.........(684)..(254)%
AXA Equitable Life Ins..............(887).......444.......(1,331)..(300)%
MBIA......................................(1,556)....(2,259)........703.....31%
Fannie Mae.............................(6,469)...(11,596)......5,127....44%
Total 38 Big Financial.............10,536.....(1,250)....11,786...943%
Big Health Care
Pfizer(70)...............................3,747.........3,291.........456.....14%
CVS Caremark.........................1,177.........1,282........(105)....(8)%
HCA(71)....................................698............685............13.......2%
Cigna.........................................600............422.........178.....42%
McKesson..................................558............532............26.......5%
Humana.....................................497............417...........80.....19%
Allergan(72)..............................291............275...........16.......6%
Cephalon(73).............................179............149...........30.....20%
Davita........................................178............199..........(21)...(11)%
Mylan Labs(74)..........................155............126...........29.....23%
Tenet Healthcare(74A)...............153.............93...........60.....65%
Total 11 Big Health Care..........8,233.........7,471........762.....10%
Big Corps in Other Sectors
General Motors(75)................2,110..........1,582........528.....33%
Comcast..................................1,635..........1,470........165.....11%
Disney.....................................1,568..........1,535.........33......2%
Kraft Foods(76).......................1,200.............881........319.....36%
NewsCorp(77).........................1,064..........1,156........(92)....(8)%
DIRECTV(78)...........................1,032............858........174.....20%
Time Warner..............................982...........1,114.......(132)...(12)%
Burlington No Santa Fe(79)........965.............853........112.....13%
LyondellBasell NV......................925............(187).....1,112...595%
Emerson Electric........................833..............601........232.....39%
Archer Daniels Midland..............791.............534........257.....48%
AES(80).....................................670.............605.........65.....11%
Liberty Media(81)......................611................77........534....694%
Publix Super Markets.................604..............554.........50.......9%
DISH Network(82).....................540..............354........186.....53%
Kellogg......................................505..............573........(68)...(12)%
CF Industries(82A)...................450..............(26).......476...1831%
Sysco(83)..................................441..............403.........38.......9%
Las Vegas Sands.........................410...............61........349....572%
Precision Castparts....................400..............358.........42.....12%
CenturyLink...............................375..............450........(75)..(17)%
Qwest Comm(84)........................357..............289.........68.....24%
TRW Automotive........................347..............263.........84.....32%
CBS.............................................338.................6........332....NM%
Vornado Realty Trust.................318..............248.........70.....28%
Fluor..........................................241..............233..........8.......3%
Tyson Foods...............................241..............249.........(8)....(3)%
Scott's Miracle-Grow..................232..............183.........49.....27%
Estee Lauder(85)........................229..............108........121....112%
Avon Products...........................225..............126.........99.....79%
Clorox........................................219..............209.........10.......5%
Liberty Global(85A)...................213...............24........189....788%
AGL Resources...........................210..............227........(17)....(7)%
Sara Lee.....................................197..............197..........0.......0%
National Fuel Gas.......................188..............130.........58.....45%
Cablevision Systems...................182..............145.........37.....26%
Public Storage(86).....................180..............164.........16.....10%
Advance Auto Parts...................176..............177.........(1)....(1)%
American Tower........................163..............125.........38.....30%
Chrysler....................................160.............(162).......322....199%
Expeditors Intl Wash.................150..............103.........47.....46%
Polo Ralph Lauren.....................112...............167........(55)..(33)%
NewPage....................................(87)............(175)........88 .....50%
YRC Worldwide........................(107)............(276).......169.....61%
MGM Resorts(87).....................(144)............(213)........69.....32%
Avaya(87A).............................(167)...........(300).......133.....44%
Clear Channel Comm(88)..........(224)............(311)........87.....28%
Caesars Entertain(89)...............(256)............(252)........(4)....(2)%
Total 48 in Other Sectors.......21,804..........15,490...6,314.....41%
Total 128 Big Corps................51,912..........30,798..21,114....69%
And below here are the 66 US Big Corps with either January or February 2011 quarter ends.
.................................................................................Increase
.........................................Pretax Income(Loss)......(Decrease)...
............................................1Q 2011...1Q 2010......Amount.....%.
...................................................(millions of dollars)....
Jan and Feb 2011 Quarter Ends
Technology
Hewlett Packard....................3,297........2,804............493.....18%
Oracle...................................2,799........1,582..........1,217.....77%
Cisco Systems.......................1,730........2,355...........(625)..(27)%
Dell.......................................1,127..........469.............658....140%
Accenture...............................774..........639.............135.....21%
Applied Materials...................680...........119..............561....471%
Adobe Systems.......................286...........166.............120.....72%
Analog Devices.......................259...........148.............111.....75%
Marvell Technology................226...........216..............10.......5%
Paychex.................................200...........169..............31.....18%
Agilent Technologies..............198.............83.............115....139%
SAIC.......................................195...........191................4.......2%
NetApp..................................190...........118...............72.....61%
Micron Technology................158...........370...........(212)...(57)%
Total 14 Technology...........12,119.......9,429..........2,690....29%
Retail
Walmart..............................7,472........6,989............483.......7%
Target..................................1,588........1,409............179.....13%
Walgreens............................1,189........1,064............125.....12%
Macy's (90)..........................1,026..........850............176.....21%
Best Buy...............................1,000.......1,273..........(273)....(21)%
Home Depot (91).....................950..........569............381.....67%
Kohls......................................788..........691..............97.....14%
TJX (92)..................................675..........633.............42.......7%
Limited Brands (93)................666..........536............130.....24%
GAP........................................597..........587.............10.......2%
Costco....................................573..........474.............99.....21%
Sears Holding..........................569..........678..........(109)...(16)%
Bed Bath & Beyond..................463..........371.............92.....25%
Lowes.....................................456..........322............134.....42%
Kroger....................................449..........388.............61.....32%
JC Penney...............................400..........318.............82.....26%
Staples....................................374..........365...............9.......2%
Nordstrom..............................373..........277.............96.....35%
GameStop...............................370..........338.............32.......9%
Dollar General (94)..................343..........258.............85.....33%
Tiffany....................................267..........210.............57.....27%
Ross Stores.............................261..........229.............32.....14%
Dollar Tree..............................258..........217.............41.....19%
Autozone................................232..........194.............38.....20%
Darden Restaurants.................199..........175.............24.....14%
Family Dollar Stores................196..........178.............18.....10%
Williams Sonoma.....................184..........141.............43.....30%
Big Lots...................................176..........169..............7.......4%
Dillards....................................163..........116.............47.....41%
Guess?......................................151..........125.............26.....21%
Aeropostale.............................144..........159............(15)....(9)%
Supervalu (95).........................129..........156............(27)...(17)%
Rite Aid..................................(204)........(187)..........(17)....(9)%
Total 33 Retail.....................22,477.....20,272........2,205......11%
Other Sectors
Monsanto..............................1,454........1,249...........205.....16%
Medtronic.............................1,013........1,063...........(50)....(5)%
Deere.......................................746..........364............382....105%
Mosaic.....................................723..........357............366....103%
Discover Fincl Svcs..................720.........(171)...........891....521%
Nike.........................................707..........662.............45.......7%
General Mills............................570..........467...........103.....22%
HJ Heinz...................................374..........366..............8.......2%
FedEx.......................................360..........381...........(21)....(6)%
Campbell Soup..........................328..........365...........(37)...(10)%
ConAgra Foods.........................326..........321..............5.......2%
Hormel Foods...........................230..........170............60.....35%
Brown Forman..........................219..........167............52.....31%
CHS...........................................214...........93............121...130%
JM Smucker (96).......................213..........207.............6.......3%
Apollo Group (97).....................196..........215...........(19)....(9)%
Smithfield Foods (98)................177...........29............148...510%
Jefferies Group..........................163..........122.............41.....34%
Carnival (99).............................157..........116.............41....35%
Total 19 in Other Sectors........8,890.......6,543.......2,347....36%
Total 66 Jan/Feb Qtr Ends...43,486......36,244.......7,242....20%
(1) BP PTI exclude non-operating items, which include Gulf of Mexico oil spill Charges, impairments and gains of sale of businesses and fixed assets, and FMV gains and losses from embedded derivatives.
(2) Occidental Petroleum 2011 PTI excludes loss on debt extinguishment.
(3) Valero Energy 2011 PTI excludes loss on derivative contracts.
(4) Noble Energy PTI exclude gains and losses on commodity derivative instruments.
(5) Whiting Petroleum PTI exclude derivative gains and losses.
(6) Newfield Exploration PTI exclude derivative gains and losses.
(7) Qualcomm 2011 PTI excludes Goodwill impairment charge.
(8) Texas Instrument 2011 PTI was negatively impacted by Japanese Earthquake and Tsunami.
(9) Corning 2010 PTI excludes asbestos credit.
(10) Amazon 2011 PTI includes much higher infrastructure investment charges, which GAAP requires to be charged to expense when incurred.
(11) Maxim Integrated Products 2010 PTI includes various one-time charges.
(12) 2011 PTI for both Western Digital and Seagate Technology were negatively impacted by severe supply chain disruptions from the Japanese Earthquake and Tsunami.
(13) Freescale Semiconductor 2010 PTI excludes loss on debt extinguishment.
(14) JP Morgan Chase PTI includes litigation charges. If these were excluded in both years, JP Morgan Chase's 1Q 2011 earnings growth would be 24%.
(15) GE Financial Services are shown here above separately, even though they are included in GE's consolidated income statement.
(16) Morgan Stanley 2011 PTI excludes loss from its 40% stake in a Japanese joint venture.
(17) AFLAC 2011 PTI includes large asset impairments/losses on sale of its investments in three Greek financial institutions.
(18) Charles Schwab 2010 PTI excludes class action litigation charge.
(19) Hudson City Bancorp 2011 PTI excludes huge loss on debt extinguishment.
(20) Arch Capital Group Limited 2010 PTI excludes catastrophe losses from the Japan and New Zealand Earthquakes, and from Australian Floods. Also, both years PTI exclude foreign exchange gains and losses.
(21) Transatlantic Holdings 2011 PTI excludes catastrophe charges related to the Japan Earthquake, the New Zealand Earthquake, and the Australian Floods.
(22) Torchmark PTI in both years are its reported Pretax Operating Income.
(23) Everest Re Group 2011 PTI excludes catastrophe charges related to the Japanese Earthquake and Tsunami, and to the New Zealand Earthquake.
(24) JNJ PTI in both years exclude Litigation Expense(Income). Its 2011 PTI also excludes DePuy hip recall charges.
(25) Merck 2011 PTI excludes JNJ arbitration charges, In Process R&D impairment charges, and gains on sale of assets.
(26) Eli Lilly PTI excludes Acquired In Process R&D charges.
(27) Abbott Labs 2011 PTI excludes Acquired In Process R&D charge, Litigation Reserve charges, and charges from change to a calendar year for its international operations. Its 2010 PTI excludes Devaluation of the Venezuela bolivar charge.
(28) Aetna 2010 PTI excludes litigation insurance gain.
(29) Baxter 2010 PTI excludes large Colleague infusion pump charges.
(30) Biogen IDEC 2010 PTI excludes Acquired In Process R&D charge.
(31) Forest Labs 2010 PTI excludes Acquired In Process R&D charge.
(32) Celgene 2011 PTI excludes Acquired In Process R&D impairment charge and Acquisition Gain.
(33) Boston Scientific 2011 PTI excludes Goodwill Impairment charge and gains on divestitures. Its 2010 PTI excludes Intangible asset impairment charges and Acquisition milestone credit.
(34) GE 2011 PTI excludes huge NBCU pretax gain.
(35) DuPont PTI excludes Pretax exchange gains and losses.
(36) PepsiCo PTI includes many unusual charges and credits, which pretty much net out.
(37) Dow Chemical 2011 PTI excludes loss on debt extinguishment.
(38) Colgate Palmolive 2010 PTI excludes Venezuela hyperinflation transition charge.
(39) Boeing 2011 PTI includes much higher pension expense charge.
(40) Viacom 2011 PTI excludes loss on debt extinguishment. Its 2010 PTI excludes asset impairment charges.
(41) Alcoa 2010 PTI excludes asset impairment charges.
(42) TE Connectivity Ltd, formerly Tyco Electronics Ltd, 2010 PTI excludes tax credit adjustments included in Other Income.
(43) International Paper 2010 PTI excludes plant shutdown costs.
(44) Discovery Communications 2011 PTI excludes gains on dispositions.
(45) Coach 2011 PTI exclude charitable contribution charge.
(46) Republic Services 2010 PTI excludes loss on debt extinguishment.
(47) OReilly Automotive 2011 PTI excludes debt extinguishment charges.
(48) Celanese 2010 PTI excludes asset impairment charges.
(49) Ball Corp 2011 PTI excludes asset writeoffs.
(50) Whirlpool 2010 PTI excludes supplier quality-related issue accrual and Other Post-retirement Benefit curtailment gain.
(50A) Hertz Global Holdings 2011 PTL excludes loss on debt extinguishment.
(51) Eastman Kodak 2010 PTI excludes loss on debt extinguishment.
(52) Marathon Oil 2011 PTI excludes loss on debt extinguishment. Its 2010 PTI excludes both gains on asset disposals and asset impairments.
(53) Anadarko Petroleum excludes derivative gains and losses.
(54) Devon Energy excludes derivative gains and losses.
(55) Chesapeake Energy excludes hedging gains and losses.
(56) Williams Companies 2010 PTI excludes loss on debt extinguishment.
(57) EOG Resources 2011 PTI excludes gain on property dispositions, losses on derivatives, and asset impairment charges. Its 2010 PTI excludes asset impairment charges.
(58) El Paso Corp excludes derivative gains and losses. Its 2011 PTI also excludes loss on debt extinguishment.
(59) Cimarex Energy excludes derivative gains and losses.
(60) Denbury Resources 2011 PTI excludes both derivative losses and loss on debt extinguishment. Its 2010 PTI excludes both derivative gains and gain on sale of Genesis.
(61) Concho Resources excludes derivative gains and losses.
(61A) Symantec 2011 PTI excludes intangible asset impairment.
(62) Electronic Arts 2011 PTI excludes acquisition related contingent consideration charge.
(63) Berkshire Hathaway
..............................................................1Q 2011.....1Q 2010
................................................................millions of dollars
Pretax Income as Reported......................2,234.......5,098
Catastrophe Charges (Japan and
....New Zealand Earthquakes and
....Australia Floods)..................................1,673
Investment Gains........................................(99)......(1,318)*
Derivative Gains........................................(271)........(411)
Investment Impairment Charges
....Reclassified from Other Comprehensive
....Income to Regular Income Statement.....506
=Core Pretax Income...............................4,043........3,369
* Includes Holding Gain on Investment in Burlington No Sante Fe
(64) AIG
..............................................................1Q 2011.....1Q 2010
................................................................millions of dollars
Pretax Income(Loss) as Reported...........(1,380).......1,641
Loss on Debt Extinguishment....................3,313
Catastrophe Charges (Japan and
....New Zealand Earthquakes and
....Australia Floods)..................................1,688
Change in Fair Value of AIA Securities.....(1,062)
Change in Fair Value of Investment
....in Maiden Lane......................................(744)
Bargain Purchase Gain...............................................(332)
=Core Pretax Income...............................1,815........1,309
(65) Annaly Capital Management includes unrealized gains and losses from interest rate swaps.
(66) Merrill Lynch is owned by Bank of America and its earnings numbers are embedded in Bank of America's numbers. It reports its separate results with the SEC.
(67) ACE Ltd 2011 PTI excludes catastrophe charges from the Japan earthquake and tsunami.
(68) XL Capital Group 2011 PTI excludes catastrophe charges from the Japan earthquake and tsunami, the New Zealand earthquake and the Australian floods. Both years also exclude foreign currency gains and losses.
(69) Ally Financial excludes losses on debt extinguishment.
(70) Pfizer 2011 PTI excludes both certain legal charges and In Process R&D charges. Its 2010 PTI excludes certain legal charges.
(71) HCA 2011 PTI excludes termination of management agreement charge.
(72) Allergan 2011 PTI excludes upfront collaboration and co-promotion fee charge. Its 2010 PTI excludes upfront licensing fee charge.
(73) Cephalon 2011 PTI excludes change in fair value of investments and acquired In Process R&D charges.
(74) Mylan Labs 2011 PTI excludes litigation settlement charge.
(74A) Tenet Healthcare 2011 PTI excludes litigation settlement charge.
(75) General Motors
...............................................................1Q 2011.....1Q 2010
.................................................................millions of dollars
Pretax Income as Reported......................3,548.......1,705
Gain on Sale of Delphi Auto.....................(1,600)
Gain on Sale of Ally Fincl Preferred Stock...(339)
Goodwill Impairment Charge......................395
Impairment of Investment in India JV........106
Gain on Sale of SAAB Auto..........................................(123)
=Core Pretax Income................................2,110........1,582
(76) Kraft Foods 2010 PTI excludes both transaction related fees and acquisition financing fees.
(77) NewsCorp 2011 PTI excludes litigation settlement charge.
(78) DIRECTV 2010 PTI excludes Liberty transaction and related gains.
(79) Burlington Northern Santa Fe is owned by Berkshire Hathaway and its earnings numbers are embedded in Berkshire's numbers. It reports its separate results with the SEC.
(80) AES excludes foreign currency gains and losses.
(81) Liberty Media excludes gains on financial instruments. Its 2010 PTI also excludes gains on dispositions.
(82) DISH Network 2011 PTI excludes litigation income.
(82A) CF Industries earnings exclude gains on sales of assets.
(83) Sysco 2011 PTI excludes pension plan withdrawal charge.
(84) Qwest Communications
(85) Estee Lauder 2011 PTI excludes intangible asset impairment charge.
(85A) Liberty Global excludes derivative losses, foreign currency gains and losses, and gains and losses on changes in the fair value of investments and debt.
(86) Public Storage excludes foreign currency gains and losses.
(87) MGM Resorts 2010 PTI excludes both gain on debt extinguishment and asset impairment charges.
(87A) Avaya 2011 PTL excludes loss on debt extinguishment.
(88) Clear Channel Communications 2010 excludes gain on debt extinguishment.
(89) Caesars Entertainment excludes gains and losses on debt extinguishment.
(90) Macy's 2010 PTI excludes asset impairment charges.
(91) Home Depot 2010 PTI excludes Investment in HD Supply impairment charge.
(92) TJX 2011 PTI excludes AJ Wright Division charges.
(93) Limited Brands excludes gain related to Express.
(94) Dollar General 2010 PTI excludes loss on debt retirement and sponsor advisory agreement termination charge.
(95) Supervalu 2011 PTI excludes intangible asset impairment charge.
(96) JM Smucker PTI excludes asset impairment charges.
(97) Apollo Group 2011 PTI excludes intangible asset charges. Its 2010 PTI excludes litigation loss.
(98) Smithfield Foods 2011 PTI excludes gain on fire insurance recovery.
(99) Carnival 2010 PTI excludes gain from sale of P&O Cruise Artemis.
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