A fire destroyed your firms ending balance sheet and income statement after the year end but before the financial statements are released. However, you have been successful in obtaining the numbers for the beginning balance sheet and the statement of cash flows, which are provided to you in Excel format. Fields representing the missing balance sheet and income statement are highlighted in yellow in the Excel sheet.
Required: Submit a written report that estimates the income statement and the ending balance sheet in good form, and most importantly, explains in detail how you estimate the income statement and balance sheet. a. The report should also list and explain: i. Any additional information that you believe is necessary to complete the assignment properly, and ii. Any resulting assumptions that you need to make in order to complete the assignment. b. Each number provided on the income statement and ending balance sheet should be neatly referenced to a schedule that details the calculation that arrives at the number.
End of year 2 End of year 1 1 CONSOLIDATED BALANCE SHEETS (USD $) 2 In Millions, unless otherwise specified 3 Current assets: 4 Cash and cash equivalents 5 Restricted cash and cash equivalents 6 Accounts receivable, net 7 Inventories 8 Deferred income taxes, net 9 Prepaid expenses and other 10 Total current assets 11 Property and equipment, net 12 Deferred financing costs, net 13 Restricted cash and cash equivalents 14 Deferred income taxes, net 15 Leasehold interests in land, net 16 Intangible assets, net 17 Other assets, net 18 Total assets 19 Current liabilities: 20 Accounts payable 21 Construction payables 22 Accrued interest payable 23 Other accrued liabilities 24 Deferred income taxes 25 Income taxes payable 26 Current maturities of long-term debt 27 Total current liabilities 28 Other long-term liabilities 29 Deferred income taxes Deferred proceeds from sale of The Shoppes at The Palazzo $ 2,512.7660 $ 4.5210 $ 1,819.2600 $ 43.8750 $ 2.2990 $ 94.7930 $ 4,477.5140 $ 15,766.7480 $ 214.4650 $ 1.9380 $ 43.2800 $ 1,458.7410 $ 70.6180 $ 130.3480 $ 22,163.6520 $ 106.4980 $ 343.3720 $ 15.5420 $ 1,895.4830 $ $ 164.1260 $ 97.8020 $ 2,622.8230 $ 133.9360 $ 185.9450 30 $ 267.9560 $ 43.8800 $ 118.4350 $ 10,132.2650 $ 13,505.2400 31 Deferred gain on sale of The Grand Canal Shoppes 32 Deferred rent from mall sale transactions 33 Long-term debt 34 Total liabilities 35 Commitments and contingencies (Note 13) 36 Equity: Common stock, $0.001 par value, 1,000,000,000 shares authorized, 827,273,217 and 824,297,756 shares issued, and 818,702,936 and 824,297,756 shares outstanding 37 38 Treasury stock, at cost, 8,570,281 and zero shares 39 Capital in excess of par value 40 Accumulated other comprehensive income 41 Retained earnings 42 Noncontrolling interests 43 Total equity 44 Total liabilities and equity 45 $ 0.8240 $ $ 6,237.4880 $ 263.0780 $ 560.4520 $ 1,596.5700 $ 8,658.4120 $ 22,163.6520 12 Months Ended End of year 2 47 45 46 CONSOLIDATED STATEMENT OF OPERATIONS (USD $) In Millions, except Per Share data, unless otherwise specified 48 Income Statement [Abstract] 49 Net sales 50 Selling, general and administrative 51 Depreciation and amortization 52 Amortization of leasehold interests in land 53 Loss on disposal of assets 54 Operating income 55 Other income (expense): 56 Interest income 57 Interest expense, net of amounts capitalized 58 Other income (expense) 59 Loss on modification or early retirement of debt 60 Income before income taxes 61 Income tax expense 62 Net income 63 Year 2 $2,954.6760 $1,007.4680 $40.3520 $56.7920 ($4.9440) $1.3760 $3.2550 $11.1560 $53.3770 $237.7860 ($13.0290) ($4.2450) 63 64 CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) 65 In Millions, unless otherwise specified 66 Cash flows from operating activities: 67 Net income 68 Adjustments to reconcile net income to net cash generated from operating activities: 69 Depreciation and amortization 70 Amortization of leasehold interests in land 71 Amortization of deferred financing costs and original issue discount 72 Amortization of deferred gain and rent 73 Non-cash change in deferred proceeds from sale of real estate 74 Non-cash change in deferred proceeds from sale of real estate 75 Impairment and loss on disposal of assets 76 Stock-based compensation expense 77 Provision for doubtful accounts 78 Foreign exchange gain 79 Deferred income taxes 80 Changes in operating assets and liabilities: 81 Accounts receivable 82 Inventories 83 Prepaid expenses and other 84 Leasehold interests in land 85 Accounts payable 86 Accrued interest payable 87 Income taxes payable 88 Other accrued liabilities 89 Net cash generated from operating activities 90 Cash flows from investing activities: 91 Change in restricted cash and cash equivalents 92 Capital expenditures 93 Proceeds from disposal of property and equipment 94 Acquisition of intangible assets 95 Net cash used in investing activities 96 Cash flows from financing activities: 97 Proceeds from exercise of stock options 98 Repurchase of common stock 99 Proceeds from exercise of warrants 100 Dividends paid 101 Distributions to noncontrolling interests 102 Deemed distribution to Principal Stockholder 103 Proceeds from long-term debt (Note 8) 104 Repayments of long-term debt (Note 8) 105 Repurchases and redemption of preferred stock 106 Payments of preferred stock inducement premium 107 Payments of deferred financing costs 108 Net cash used in financing activities 109 Effect of exchange rate on cash 110 Increase (decrease) in cash and cash equivalents 111 Cash and cash equivalents at beginning of year 112 Cash and cash equivalents at end of year 113 ($209.0550) $1.1130 ($1.1340) ($47.9060) $13.7770 ($8.6080) $18.9110 $328.2940 $4,439.4120 ($0.3820) ($898.1110) $32.1550 ($45.8710) ($912.2090) $69.5960 ($561.1500) $0.3500 ($1,564.0490) ($11.8580) $0.0000 $3,183.1070 ($3,513.0320) $0.0000 $0.0000 ($35.4140) ($2,432.4500) ($7.1050) $1,087.6480 $2,512.7660 $3,600.4140 $208.2420 $173.2760 ($101.8120) $0.9410 113 114 Supplemental disclosure of cash flow information: 115 Cash payments for interest, net of amounts capitalized 116 Cash payments for taxes, net of refunds 117 Changes in construction payables 118 119 Non-cash investing and financing activities: 120 Capitalized stock-based compensation costs Change in dividends payable on unvested restricted stock and stock units included in 121 other accrued liabilities 122 Property and equipment acquired under capital lease 123 Repurchase of common stock included in other accrued liabilities 124 Minority Interest Decrease From Redemptions Noncash Activity 125 Disposition of interest in majority owned subsidiary Accretion to redemption value of preferred stock issued to Principal Stockholders 126 family 127 Warrants exercised and settled through tendering of preferred stock $0.4200 $2.7610 $9.3700 $0.0000 $0.0000 $0.0000 End of year 2 End of year 1 1 CONSOLIDATED BALANCE SHEETS (USD $) 2 In Millions, unless otherwise specified 3 Current assets: 4 Cash and cash equivalents 5 Restricted cash and cash equivalents 6 Accounts receivable, net 7 Inventories 8 Deferred income taxes, net 9 Prepaid expenses and other 10 Total current assets 11 Property and equipment, net 12 Deferred financing costs, net 13 Restricted cash and cash equivalents 14 Deferred income taxes, net 15 Leasehold interests in land, net 16 Intangible assets, net 17 Other assets, net 18 Total assets 19 Current liabilities: 20 Accounts payable 21 Construction payables 22 Accrued interest payable 23 Other accrued liabilities 24 Deferred income taxes 25 Income taxes payable 26 Current maturities of long-term debt 27 Total current liabilities 28 Other long-term liabilities 29 Deferred income taxes Deferred proceeds from sale of The Shoppes at The Palazzo $ 2,512.7660 $ 4.5210 $ 1,819.2600 $ 43.8750 $ 2.2990 $ 94.7930 $ 4,477.5140 $ 15,766.7480 $ 214.4650 $ 1.9380 $ 43.2800 $ 1,458.7410 $ 70.6180 $ 130.3480 $ 22,163.6520 $ 106.4980 $ 343.3720 $ 15.5420 $ 1,895.4830 $ $ 164.1260 $ 97.8020 $ 2,622.8230 $ 133.9360 $ 185.9450 30 $ 267.9560 $ 43.8800 $ 118.4350 $ 10,132.2650 $ 13,505.2400 31 Deferred gain on sale of The Grand Canal Shoppes 32 Deferred rent from mall sale transactions 33 Long-term debt 34 Total liabilities 35 Commitments and contingencies (Note 13) 36 Equity: Common stock, $0.001 par value, 1,000,000,000 shares authorized, 827,273,217 and 824,297,756 shares issued, and 818,702,936 and 824,297,756 shares outstanding 37 38 Treasury stock, at cost, 8,570,281 and zero shares 39 Capital in excess of par value 40 Accumulated other comprehensive income 41 Retained earnings 42 Noncontrolling interests 43 Total equity 44 Total liabilities and equity 45 $ 0.8240 $ $ 6,237.4880 $ 263.0780 $ 560.4520 $ 1,596.5700 $ 8,658.4120 $ 22,163.6520 12 Months Ended End of year 2 47 45 46 CONSOLIDATED STATEMENT OF OPERATIONS (USD $) In Millions, except Per Share data, unless otherwise specified 48 Income Statement [Abstract] 49 Net sales 50 Selling, general and administrative 51 Depreciation and amortization 52 Amortization of leasehold interests in land 53 Loss on disposal of assets 54 Operating income 55 Other income (expense): 56 Interest income 57 Interest expense, net of amounts capitalized 58 Other income (expense) 59 Loss on modification or early retirement of debt 60 Income before income taxes 61 Income tax expense 62 Net income 63 Year 2 $2,954.6760 $1,007.4680 $40.3520 $56.7920 ($4.9440) $1.3760 $3.2550 $11.1560 $53.3770 $237.7860 ($13.0290) ($4.2450) 63 64 CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) 65 In Millions, unless otherwise specified 66 Cash flows from operating activities: 67 Net income 68 Adjustments to reconcile net income to net cash generated from operating activities: 69 Depreciation and amortization 70 Amortization of leasehold interests in land 71 Amortization of deferred financing costs and original issue discount 72 Amortization of deferred gain and rent 73 Non-cash change in deferred proceeds from sale of real estate 74 Non-cash change in deferred proceeds from sale of real estate 75 Impairment and loss on disposal of assets 76 Stock-based compensation expense 77 Provision for doubtful accounts 78 Foreign exchange gain 79 Deferred income taxes 80 Changes in operating assets and liabilities: 81 Accounts receivable 82 Inventories 83 Prepaid expenses and other 84 Leasehold interests in land 85 Accounts payable 86 Accrued interest payable 87 Income taxes payable 88 Other accrued liabilities 89 Net cash generated from operating activities 90 Cash flows from investing activities: 91 Change in restricted cash and cash equivalents 92 Capital expenditures 93 Proceeds from disposal of property and equipment 94 Acquisition of intangible assets 95 Net cash used in investing activities 96 Cash flows from financing activities: 97 Proceeds from exercise of stock options 98 Repurchase of common stock 99 Proceeds from exercise of warrants 100 Dividends paid 101 Distributions to noncontrolling interests 102 Deemed distribution to Principal Stockholder 103 Proceeds from long-term debt (Note 8) 104 Repayments of long-term debt (Note 8) 105 Repurchases and redemption of preferred stock 106 Payments of preferred stock inducement premium 107 Payments of deferred financing costs 108 Net cash used in financing activities 109 Effect of exchange rate on cash 110 Increase (decrease) in cash and cash equivalents 111 Cash and cash equivalents at beginning of year 112 Cash and cash equivalents at end of year 113 ($209.0550) $1.1130 ($1.1340) ($47.9060) $13.7770 ($8.6080) $18.9110 $328.2940 $4,439.4120 ($0.3820) ($898.1110) $32.1550 ($45.8710) ($912.2090) $69.5960 ($561.1500) $0.3500 ($1,564.0490) ($11.8580) $0.0000 $3,183.1070 ($3,513.0320) $0.0000 $0.0000 ($35.4140) ($2,432.4500) ($7.1050) $1,087.6480 $2,512.7660 $3,600.4140 $208.2420 $173.2760 ($101.8120) $0.9410 113 114 Supplemental disclosure of cash flow information: 115 Cash payments for interest, net of amounts capitalized 116 Cash payments for taxes, net of refunds 117 Changes in construction payables 118 119 Non-cash investing and financing activities: 120 Capitalized stock-based compensation costs Change in dividends payable on unvested restricted stock and stock units included in 121 other accrued liabilities 122 Property and equipment acquired under capital lease 123 Repurchase of common stock included in other accrued liabilities 124 Minority Interest Decrease From Redemptions Noncash Activity 125 Disposition of interest in majority owned subsidiary Accretion to redemption value of preferred stock issued to Principal Stockholders 126 family 127 Warrants exercised and settled through tendering of preferred stock $0.4200 $2.7610 $9.3700 $0.0000 $0.0000 $0.0000
