How can they have earnings of 16 cents per share, but a loss of $144 million in the same quarter?
I wonder what Twitter does to have expenses around a few billion a year. The free food and bean-bag chairs can't cost that much.
What's two plus two? Bad accountant: 3. Normal accountant: 4. Good accountant: "what do you want it to be?"
Very easy. (I am not an accountant and don't play oen on TV, but I do my own business taxes.) The earnings are from their real sales of whatever it is Twitter sells, I guess advertising. The loss is something that they are claiming to the IRS so they don't have to pay taxes on ther net. And, you can deduct a whole RANGE of crazy stuff like depreciation of the value of your "goodwill". Or, at least, if you have an inventive accountant, you can try to deduct that stuff.
Jon
Really bright accountant: "-18527, and I can get you a nice loss carry-forward for the next, oh, 10 years or so"
:-)
Bookmarked :)
Movie stars will accept payment in terms of a share of the movie's gross receipts, but not its profit.
Why? Because Hollywood accountants are adept at ensuring no movie ever make a profit - because that could be taxed.
The only definition of money that I've ever been able to understand is that, as it says on my banknotes, a "promise". Believe the promise, and all is well. Don't believe it and the edifice resembles Zimbabwe. Money is a useful fiction.
That's not exactly right. If the movie owes payments on profits then they will make the profit in any of the many service companies that the studio owns rather than the movie itself making the money. Taxes have to be paid by someone if there is profit. If there is no profit, there's not much reason to be in business. The only question is who makes the profit and who pays the taxes.
unless one of those service companies happen to be located in a place where there are no taxes
No time to read your link, John, but maybe they're deferring the loss til the next tax year for tax planning purposes?
Accounting tricks. They are using non-gaap for the +.16 per share. From the share holder letter:
GAAP net loss in the quarter was $167 million, resulting in GAAP diluted EPS of ($0.23). Non-GAAP net income was $119 million and non-GAAP diluted EPS was $0.16.
Oh, OK, they are cheating.
Long term, you can't hide running out of money.
They are doing non-GAAP to take away stock based compensation and such. +0.16 is for the investors, -0.23 is for the IRS. If you are so inclined they have a section in the stockhoder news letter explaining their non-gaap methods.
Internet infrastructure for a billion bust users? Phone-system access fees? International ditto?
Ahh, but profit comes AFTER salaries are paid. Looks like you're going to make a big profit on something? Quick, raise your salary! Voila, no more "profit".
Jon
No, then it's *income* which not only requires taxes, but FICA!
But salary is only taxed once. That's why tax lawyers make the big bux. The tax law is so convoluted that it takes a lawyer to even try to sort it all out.
That's what LLCs and S-Corps are for. It's just C-Corps that have the double-taxation problem.
Cheers
Phil Hobbs
Sure but the point of them is that the corporation and the individual are the same. They're quite limited and I doubt many movie companies are S-Corps.
Just federal income tax, state income tax, FICA, workman's comp, and a few other things heaped on that salary.
A big company 401K contribution, or a giant pizza order, is a better way to dump profits. Deductable to the company, no increase in employees taxes.
Only on dividends. Salaries, bonuses, health care, 401K, educational stipends are all expenses.
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