Scores by kind of claim
Each kind of claim is scored on its own, out of 100: the share that held up, with the range it likely falls in. Fewer resolved claims give a wider range.
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Factual claims
Statements about the present or the past, checked against the record: did they hold up?
85 79 91 -
Predictions
Statements about events outside the person's control, checked once they fell due: did they come true?
78 65 89 -
Promises
Commitments to the person's or organisation's own future action, with something to deliver: was it delivered?
72 57 85 -
Guidance
A company's own figures for its results over a period, checked against what it then reported.
Insufficient record: 1 guidance claim resolved, 5 needed for a score.
All types combined: 82 (likely 76 to 87, high confidence), from 77 claims: 51 factual claims, 14 predictions, 12 promises. It mixes kinds of claim in different proportions for different people, so compare people kind by kind.
Warren Buffett's claims
14 claims
“Its reported earnings should also increase considerably in 2002 given that the company has been shouldering a large charge for the amortization of goodwill”
Warren Buffett, chairman, in shareholder letter 28 February 2002 Chairman's Letter (2001) (Berkshire Hathaway)
MidAmerican Energy's reported earnings should increase considerably in 2002 because the goodwill amortization charge will disappear under new GAAP rules.
Mostly true True in substance, wrong in a detail.
The second judge would not resolve this claim; the verdict shown is the first judge's.
Said for an organisation they lead or work for; it counts on both records.
What would count as true or false
Test: MidAmerican Energy Holdings' reported net income for 2002 compared with 2001, from its 2002 Form 10-K or Berkshire's 2002 annual report. True: earnings rose by at least 15%. Mostly true: earnings rose by 10–15%, or rose by at least 15% mainly for reasons other than the end of goodwill amortization. Mostly false: earnings rose by less than 10%. False: earnings were flat or fell.
Evidence
- 2002ar.pdf Berkshire Hathaway Inc. Own record
“Goodwill amortization for the years ending December 31, 2001 and 2000 includes $78 million and $65 million, respectively, related to Berkshire’s equity method investment in MidAmerican Energy Holdings Company.”
- 2002ar.pdf Berkshire Hathaway Inc. Own record
““Purchase-Accounting Adjustments” dropped sharply in 2002, the reason being that GAAP rules changed then, no longer requiring the amortization of goodwill. This change increases our reported earnings, but has no effect on our economic earnings.”
- 2002ar.pdf Berkshire Hathaway Inc. Own record
“Net earnings ....................................................................................... $ 4,286”
- Berkshire Hathaway Inc. 2002 Annual Report Berkshire Hathaway Inc. · 2003 Own record
“MidAmerican Energy’s earnings grew in 2002 and will likely do so again this year.”
- Berkshire Hathaway Inc. 2002 Annual Report Berkshire Hathaway Inc. · 2003 Own record
“Most of the increase, both present and expected, results from the acquisitions described earlier.”
- Berkshire Hathaway Inc. 2002 Annual Report Berkshire Hathaway Inc. · 2003 Own record
“Goodwill amortization for the years ending December 31, 2001 and 2000 includes $78 million and $65 million, respectively, related to Berkshire’s equity method investment in MidAmerican Energy Holdings Company.”
- midamerican energy holdings company U.S. Securities and Exchange Commission (Form 10-K filed by MidAmerican Energy Holdings Company)
“Reported net income available to common and preferred stockholders | | | | $ | 415,618 | | | $ | 380,043 | | | $ | 142,669 |”
- midamerican energy holdings company U.S. Securities and Exchange Commission (Form 10-K filed by MidAmerican Energy Holdings Company)
“Adjusted net income available to common and preferred stockholders | | | | $ | 415,618 | | | $ | 380,043 | | | $ | 237,069 |”
- midamerican energy holdings company U.S. Securities and Exchange Commission (Form 10-K filed by MidAmerican Energy Holdings Company)
“On January 1, 2002, the Company adopted SFAS No. 142, "Goodwill and Other Intangible Assets" ("SFAS 142"), which establishes the accounting for acquired goodwill and other intangible assets, and provides that goodwill and indefinite-lived intangible assets will not be amortized”
Reasoning
The MidAmerican 10-K adopted SFAS 142 on January 1, 2002 and stopped amortizing goodwill (E10). Its reported net income row shows $380.0M and $142.7M in the columns that, going by the adjusted-income row, are 2002 and 2001 (E7, E8). The only column that changes when goodwill amortization is added back is the earlier one, where the 2001 figure becomes $237.1M. If the columns are read as 2003, 2002 and 2001, the reported 2002 increase is well above 15%. About $94M of the roughly $237M rise comes from removing goodwill amortization, so most of it came from other causes; Berkshire's annual report says most of the growth came from acquisitions (E4, E5). Under the criteria, a rise of at least 15% mainly for reasons other than the end of goodwill amortization is mostly true. The verdict relies on reading the unlabelled year columns this way.
Cite this claim
Warren Buffett, “MidAmerican Energy's reported earnings should increase considerably in 2002 because the goodwill amortization charge will disappear under new GAAP rules.” (said 28 February 2002). Verdict: mostly true. Reliability API, claim c_34dacceea72e, method 0.1.0+28da144b. https://epistacklabs.com/claims/c_34dacceea72e
Claims without a verdict
- Unresolvable 141
- Not yet due 14
- Own records only 48
- Not researched 240
- Not checkable 1,035
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