3-Step Earnings Filing & Footnote Checklist: Reconciling One-Time Tariff Refunds, Non-Operating Gains & Share Buybacks
Accounting FootnotesSEC 10-Q AuditTeslaSK Hynix
As of 2026.10.29 | Research & Disclosure Note: This article is a personal research memo written by the author of Deep Growth Investing based on the official earnings releases and regulatory filings cited inline (figures calculated by the author from primary tables are labeled Author calculation). As of the writing date, I do not hold shares or positions in any of the companies discussed. This post is for informational and personal record-keeping purposes only and does not constitute investment advice or a solicitation to buy or sell any security.
Headline earnings summaries rarely tell you whether a margin beat came from recurring unit economics or a one-time regulatory credit, why net income fell sequentially when operating profit jumped, or how much of an announced share buyback actually reduces share count. Using the 3Q26 disclosures from Tesla, SK Hynix, and TSMC [2][3][6], here is the three-step filing checklist I run every quarter.
3-Line Summary (As of 2026.10.29):
- Step 1 — Strip Out One-Time Footnote Credits from Gross Margin: In Tesla's 3Q26 Form 10-Q Note 11, IEEPA tariff refunds reduced Automotive COGS by $260M and Energy COGS by $526M (with a $339M customer refund deducted from Energy revenue); stripping these out lowers ex-credit Auto GM from 18.1% to ~16.8% and Energy GM from 33.1% to ~23.8% (Author calculation).
- Step 2 — Reconcile Operating Profit vs. Net Income & OCF vs. FCF: SK Hynix's 3Q26 operating profit rose +38% QoQ to 83.3338T KRW (80% OPM) while net profit fell -58% QoQ to 39.7756T KRW because 2Q26 net profit (93.9226T KRW) included large non-operating gains. Meanwhile, TSMC generated NT$919.77B in OCF and spent NT$443.21B on CapEx (NT$476.56B FCF), whereas Tesla generated $6.263B in OCF and spent $4.732B on CapEx (+$1.531B FCF).
- Step 3 — Separate Share Cancellation from Employee Compensation in Buybacks: Of SK Hynix's newly resolved 20 trillion KRW treasury share buyback in 3Q26, exactly 10T KRW is designated for cancellation (counted in shareholder returns) and 10T KRW is for employee compensation (excluded from shareholder return totals).
Checklist Summary Table (3Q26 Filing Examples)
| Checklist Step | Headline Figure | Footnote / Cash-Flow Reality |
|---|---|---|
| 1. Gross Margin Footnote Check (Tesla 3Q26 10-Q Note 11) [2] | Total GM 19.6%; Ex-credit Auto GM 18.1%; Energy GM 33.1% | Ex-IEEPA tariff refund: Auto GM ~16.8% ($260M COGS credit); Energy GM ~23.8% ($526M COGS credit, -$339M rev. refund). GAAP OPM is 2.6% ($718M OP) after $4.776B OpEx. |
| 2. Operating Profit vs. Net Profit & FCF Bridge (SK Hynix & TSMC) [3][6] | SK Hynix OP 83.3338T KRW (+38% QoQ) vs. Net Profit 39.7756T KRW (-58% QoQ) | 2Q26 Net Profit (93.9226T) exceeded OP (60.5426T) due to non-operating items; 3Q26 NetCash still surged +29.3T QoQ to 98.7T KRW. TSMC 3Q26 OCF NT$919.77B − CapEx NT$443.21B = NT$476.56B FCF. |
| 3. Shareholder Return Purpose Split (SK Hynix 3Q26 Board) [3] | 14T KRW dividend (20,000 KRW/sh) + 20T KRW treasury stock acquisition | 20,000 KRW/sh = 10,000 base + 10,000 Kioxia special dividend. 20T buyback = 10T cancellation (in return total) + 10T employee comp (excluded). |