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SunOpta Inc. (NASDAQ:STKL) is a leading global organic food company. Excerpts from SunOptas 10-K for the year ended December 31, 2016 (fiscal 2016) are attached.
Additional information:
1. Assume the company did not enter into any non-cash investing and financing activities during 2016.
2. Ignore taxes.
Question:
1a. What is the net book value of SunOpta's PP&E at the end of 2016?
1b. How much depreciation did SunOpta recognize in 2016 related to PP &E (including both depreciation expensed in SG&A and depreciation capitalized into inventory)?
1c. What percentage of SunOpta's gross PP&E has been depreciated as the end of 2016?
1d. What amount of SunOpta's gross PP&E is not subject to depreciation as of the end of 2016?
2a. How much PP&E did SunOpta purchase for cash during 2016?
2b. What is the net book value of the PP&E sold during 2016?
2c. Provide the journal entry to record any impairment to long-lived assets(other than goodwill) during 2016.
2d. If SunOpta had not recorded any impairments to long-lived assets(other than goodwill), how much higher or lower would cash flow from operations have been.
SunOpta Inc. Consolidated Balance Sheets As at December 31, 2016 and January 2, 2016 (All dollar amounts expressed in thousands of U.S. dollars) Jan. 2, Dec. 31, 2016 2016 ASSETS Current assets Cash and cash equivalents 1,251 2,274 Accounts receivable (note 6) 157,369 117,412 Inventories (note 7) 368,482 371,223 Prepaid expenses and other current assets 19,794 20,088 Current income taxes recoverable 2,801 21,728 Current assets held for sale (note 3) 64,330 Total current assets 549,697 597,055 Property, plant and equipment (note 8) 162,239 176,513 Goodwill (note 9) 223,611 241,690 Intangible assets (note 9) 183,524 195,008 Deferred income taxes (note 17) 1,045 958 Other assets 9,442 7,979 Total assets 1,129,558 1,219,203 LIABILITIES Current liabilities Bank indebtedness (note 11) 201,494 159,773 Accounts payable and accrued liabilities (note 10) 173,745 151,831 Customer and other deposits 2,543 5,322 Income taxes payable 5,661 1,720 Other current liabilities 1,016 1,521 Current portion of long-term debt (note 11) 2,079 1,773 Current portion of long-term liabilities 5,500 5,243 Current liabilities held for sale (note 3) 52,486 Total current liabilities 392,038 379,669 Long-term debt (note 11) 229,008 321,222 Long-term liabilities 15,354 17,809 Deferred income taxes (note 17) 44,561 74,324 Total liabilities 680,961 793,024 Series A Preferred Stock (note 12) 79,184 EQUITY SunOpta Inc. shareholders' equity Common shares, no par value, unlimited shares authorized, 85,743,958 shares issued (January 2, 2016 - 85,417,849) 300,426 297,987 Additional paid-in capital 25,522 22,327 Retained earnings 53,838 106,838 Accumulated other comprehensive loss (13,104 ) (6,113 ) 366,682 421,039 Non-controlling interests 2,731 5,140 Total equity 369,413 426,179 Total equity and liabilities 1,129,558 1,219,203 SunOpta Inc. Consolidated Statements of Operations For the years ended December 31, 2016, January 2, 2016 and January 3, 2015 (All dollar amounts expressed in thousands of U.S. dollars, except per share amounts) Dec. 31, 2016 1,346,731 Jan. 2, 2016 1,145,134 Jan. 3, 2015 1,102,745 Revenues Cost of goods sold 980,640 1,220,779 1,034,772 Gross profit 125,952 110,362 122,105 98,681 85,754 Selling, general and administrative expenses 80,365 Intangible asset amortization 11,282 Other expense (income), net (note 15) 4,951 2,036 28,292 12,151 (2,220 Goodwill write-down (note 9) Foreign exchange loss (gain) 17,540 1,243 (1,641) (1,993) Earnings (loss) from continuing operations before the following (31,086 ) 9,147 43,917 Interest expense, net (note 11) Loss on investments (note 16) 43,275 15,669 3,943 8,441 Earnings (loss) from continuing operations before income taxes (74,361 ) (6,522) 31,533 Provision for (recovery of) income taxes (note 17) 12,043 (23,797 ) (3,390) Earnings (loss) from continuing operations 19,490 (50,564 ) (3,132) Discontinued operations (note 3) Loss from discontinued operations Gain (loss) on classification as held for sale (1,993) 560 (17,377 ) (10,515 ) (15,993 ) Gain on sale of discontinued operation 2,888 Recovery of (provision for) income taxes 599 (402 ) 2,000 8,819 4,911 Loss from discontinued operations attributable to non-controlling interests 264 Loss from discontinued operations attributable to SunOpta Inc. (570 ) (19,475 ) (6,194 ) Earnings (loss) (51,134 ) (22,607 ) 13,296 54 (136 Earnings (loss) attributable to non-controlling interests 195 ) SunOpta Inc. Consolidated Statements of Cash Flows For the years ended December 31, 2016, January 2, 2016 and January 3, 2015 (All dollar amounts expressed in thousands of U.S. dollars) Dec. 31, 2016 Jan. 2, 2016 Jan. 3, 2015 CASH PROVIDED BY (USED IN) Operating activities Earnings (loss) Loss from discontinued operations attributable to SunOpta Inc. (51,134) (22,607) 13,296 (570) (19,475 ) (6,194 ) Earnings (loss) from continuing operations (50,564 ) (3,132 ) 19,490 34,150 21,007 15,641 Items not affecting cash: Depreciation and amortization Acquisition accounting adjustment on inventory sold (note 2) 15,000 4,000 Amortization and write-off of debt issuance costs (note 11) 11,301 5,895 375 Deferred income taxes (29,850 ) (4,038 ) (3,489 ) Stock-based compensation 4,148 4,366 3,906 (547) 143 176 Unrealized loss (gain) on derivative instruments (note 5) Fair value of contingent consideration (note 15) Impairment of long-lived assets (note 15) (1,158 ) 884 (1,373 ) 13,257 Goodwill write-down (note 9) 17,540 Loss on investments (note 16) 8,441 Loss (gain) on disposal of property and equipment 145 251 (1,386 ) Other 190 739 27 (12,891 ) (3,685 ) (24,318 ) Changes in non-cash working capital, net of businesses acquired Net cash flows from operating activities - continuing operations 721 26,430 17,490 Net cash flows from operating activities - discontinued operations 758 4,814 7,325 1,479 31,244 24,815 Investing activities (22,560 ) (31,186 ) (17,671 ) Purchases of property, plant and equipment Acquisition of businesses, net of cash acquired Proceeds from sale of property and equipment (490,715 ) 254 1,138 5,833 Other 700 (822 ) 188 Net cash flows from investing activities - continuing operations (21,606 ) (521,585 ) (11,650 ) Net cash flows from investing activities - discontinued operations 1,754 (1,235 ) 34,538 (19,852 ) (522,820 ) 22,888 SunOpta Inc. Consolidated Balance Sheets As at December 31, 2016 and January 2, 2016 (All dollar amounts expressed in thousands of U.S. dollars) Dec. 31, 2016 Jan. 2. 2016 ASSETS 1,251 2,274 117,412 157,369 368,482 371,223 19,794 20.088 2,801 21,728 Current assets Cash and cash equivalents Accounts receivable (note 6) Inventories (note 7) Prepaid expenses and other current assets Current income taxes recoverable Current assets held for sale (note 3) Total current assets Property, plant and equipment (note 8) Goodwill note 9) Intangible assets (109) Deferred income taxes (note 17) Other assets 64,330 549,697 597,055 162,239 176,513 223,611 241,690 183,524 195,008 1,045 958 9.442 7,979 Total assets 1,129,558 1,219,203 201,494 159,773 LIABILITIES Current liabilities Bank indebtedness (note 11) Accounts payable and accrued liabilities (note 10) Customer and other deposits Income taxes payable 173,745 151,831 2,543 5.322 5,661 1.720 1,016 1,521 2,079 1,773 5,500 5,243 52,486 Other current liabilities Current portion of long-term debt (note 11) Current portion of long-term liabilities Current liabilities held for sale (note 3) Total current liabilities Long-term debt (note 11) Long-term liabilities Deferred income taxes (note 17) Total liabilities 392,038 379,669 229,008 321,222 15,354 17,809 44,561 74,324 680,961 793,024 Series A Preferred Stock (note 12) 79,184 EQUITY 300,426 297,987 SunOpta Inc. shareholders' equity Common shares, no par value, unlimited shares authorized 85,743,958 shares issued (January 2, 2016 - 85,417,849) Additional paid-in capital Retained carnings Accumulated other comprehensive loss 25,522 22,327 53,838 106,838 (6,113) (13,104) 366,682 421,039 2,731 5,140 Non-controlling interests Total equity 369,413 426,179 Total equity and liabilities 1,129,558 1,219,203 SunOpta Inc. Consolidated Statements of Operations For the years ended December 31, 2016, January 2, 2016 and January 3, 2015 (All dollar amounts expressed in thousands of U.S. dollars, except per share amounts) Dec 31, 2016 Jan. 2, 2016 Revenues 1,346,731 1,145,134 Jan 3, 2015 1,102,745 (1,641) Cost of goods sold 1,220,779 1,034,772 980,640 Gross profit 125,952 110,362 122,105 Selling, general and administrative expenses 98,681 85,754 80,365 Intangible asset amortization 11,282 4,951 2,036 Other expense (income), net (note 15) 28,292 12,151 (2,220 ) Goodwill write-down (note 9) 17,540 Foreign exchange loss (gain) 1,243 (1,993) Earnings (loss) from continuing operations before the following (31,086 ) 9,147 43,917 Interest expense, net (note 11) 43,275 15,669 3,943 Loss on investments (note 16) 8,441 Earnings (loss) from continuing operations before income taxes (74,361 ) (6,522) 31,533 Provision for (recovery of) income taxes (note 17) (23,797) (3,390) 12,043 Earnings (loss) from continuing operations (50,564 ) (3,132) 19,490 Discontinued operations (note 3) Loss from discontinued operations (1,993) (17,377 ) (15,993 ) Gain (loss) on classification as held for sale 560 (10,515 ) Gain on sale of discontinued operation 2,888 Recovery of (provision for) income taxes 599 (402 > 2,000 Loss from discontinued operations attributable to non-controlling interests 264 8,819 4,911 Loss from discontinued operations attributable to SunOpta Inc. (570) (19,475 ) (6,194 ) Earnings (loss) (51,134 ) (22,607 13,296 Earnings (loss) attributable to non-controlling interests 54 (136 ) 195 SunOpta Inc. Consolidated Statements of Cash Flows For the years ended December 31, 2016, January 2, 2016 and January 3, 2015 (All dollar amounts expressed in thousands of U.S. dollars) Dec. 31. 2016 Jan. 2. 2016 Jan. 3, 2015 CASH PROVIDED BY (USED IN) (51,134 ) (22,607) 13.296 Operating activities Earnings (loss) Loss from discontinued operations attributable to SunOpta Inc. Earnings (loss) from continuing operations (570) (50,564 ) (19.475 ) (3,132 ) (6,194 ) 19.490 34,150 21,007 15,641 15,000 4,000 11,301 5,895 375 (29,850) (4,038 ) 4,366 (3,489 ) 3,906 4,148 143 176 (547) (1,158 ) 884 (1,373) Items not affecting cash: Depreciation and amortization Acquisition accounting adjustment on inventory sold (note 2) Amortization and write-off of debt issuance costs (note 11) Deferred income taxes Stock-based compensation Unrealized loss (gain) on derivative instruments (note 5) Fair value of contingent consideration (note 15) Impairment of long-lived assets (note 15) Goodwill write-down (note 9) Loss on investments (note 16) Loss (gain) on disposal of property and equipment Other Changes in non-cash working capital, net of businesses acquired Net cash flows from operating activities - continuing operations Net cash flows from operating activities - discontinued operations 13,257 17,540 8,441 145 251 (1,386 ) 27 190 739 (12,891 ) (3,685 ) (24318 ) 721 26,430 17,490 758 4,814 7,325 1,479 31.244 24,815 Investing activities (22,560 ) (17,671 ) (31,186 ) (490,715 ) 1,138 254 Purchases of property, plant and equipment Acquisition of businesses, net of cash acquired Proceeds from sale of property and equipment Other Net cash flows from investing activities - continuing operations Net cash flows from investing activities - discontinued operations 5,833 188 700 (822) (21,606) (521,585 ) (11,650 ) 1,754 (1,235) (522,820) 34,538 22,888 (19,852 ) SunOpta Inc. Consolidated Balance Sheets As at December 31, 2016 and January 2, 2016 (All dollar amounts expressed in thousands of U.S. dollars) Jan. 2, Dec. 31, 2016 2016 ASSETS Current assets Cash and cash equivalents 1,251 2,274 Accounts receivable (note 6) 157,369 117,412 Inventories (note 7) 368,482 371,223 Prepaid expenses and other current assets 19,794 20,088 Current income taxes recoverable 2,801 21,728 Current assets held for sale (note 3) 64,330 Total current assets 549,697 597,055 Property, plant and equipment (note 8) 162,239 176,513 Goodwill (note 9) 223,611 241,690 Intangible assets (note 9) 183,524 195,008 Deferred income taxes (note 17) 1,045 958 Other assets 9,442 7,979 Total assets 1,129,558 1,219,203 LIABILITIES Current liabilities Bank indebtedness (note 11) 201,494 159,773 Accounts payable and accrued liabilities (note 10) 173,745 151,831 Customer and other deposits 2,543 5,322 Income taxes payable 5,661 1,720 Other current liabilities 1,016 1,521 Current portion of long-term debt (note 11) 2,079 1,773 Current portion of long-term liabilities 5,500 5,243 Current liabilities held for sale (note 3) 52,486 Total current liabilities 392,038 379,669 Long-term debt (note 11) 229,008 321,222 Long-term liabilities 15,354 17,809 Deferred income taxes (note 17) 44,561 74,324 Total liabilities 680,961 793,024 Series A Preferred Stock (note 12) 79,184 EQUITY SunOpta Inc. shareholders' equity Common shares, no par value, unlimited shares authorized, 85,743,958 shares issued (January 2, 2016 - 85,417,849) 300,426 297,987 Additional paid-in capital 25,522 22,327 Retained earnings 53,838 106,838 Accumulated other comprehensive loss (13,104 ) (6,113 ) 366,682 421,039 Non-controlling interests 2,731 5,140 Total equity 369,413 426,179 Total equity and liabilities 1,129,558 1,219,203 SunOpta Inc. Consolidated Statements of Operations For the years ended December 31, 2016, January 2, 2016 and January 3, 2015 (All dollar amounts expressed in thousands of U.S. dollars, except per share amounts) Dec. 31, 2016 1,346,731 Jan. 2, 2016 1,145,134 Jan. 3, 2015 1,102,745 Revenues Cost of goods sold 980,640 1,220,779 1,034,772 Gross profit 125,952 110,362 122,105 98,681 85,754 Selling, general and administrative expenses 80,365 Intangible asset amortization 11,282 Other expense (income), net (note 15) 4,951 2,036 28,292 12,151 (2,220 Goodwill write-down (note 9) Foreign exchange loss (gain) 17,540 1,243 (1,641) (1,993) Earnings (loss) from continuing operations before the following (31,086 ) 9,147 43,917 Interest expense, net (note 11) Loss on investments (note 16) 43,275 15,669 3,943 8,441 Earnings (loss) from continuing operations before income taxes (74,361 ) (6,522) 31,533 Provision for (recovery of) income taxes (note 17) 12,043 (23,797 ) (3,390) Earnings (loss) from continuing operations 19,490 (50,564 ) (3,132) Discontinued operations (note 3) Loss from discontinued operations Gain (loss) on classification as held for sale (1,993) 560 (17,377 ) (10,515 ) (15,993 ) Gain on sale of discontinued operation 2,888 Recovery of (provision for) income taxes 599 (402 ) 2,000 8,819 4,911 Loss from discontinued operations attributable to non-controlling interests 264 Loss from discontinued operations attributable to SunOpta Inc. (570 ) (19,475 ) (6,194 ) Earnings (loss) (51,134 ) (22,607 ) 13,296 54 (136 Earnings (loss) attributable to non-controlling interests 195 ) SunOpta Inc. Consolidated Statements of Cash Flows For the years ended December 31, 2016, January 2, 2016 and January 3, 2015 (All dollar amounts expressed in thousands of U.S. dollars) Dec. 31, 2016 Jan. 2, 2016 Jan. 3, 2015 CASH PROVIDED BY (USED IN) Operating activities Earnings (loss) Loss from discontinued operations attributable to SunOpta Inc. (51,134) (22,607) 13,296 (570) (19,475 ) (6,194 ) Earnings (loss) from continuing operations (50,564 ) (3,132 ) 19,490 34,150 21,007 15,641 Items not affecting cash: Depreciation and amortization Acquisition accounting adjustment on inventory sold (note 2) 15,000 4,000 Amortization and write-off of debt issuance costs (note 11) 11,301 5,895 375 Deferred income taxes (29,850 ) (4,038 ) (3,489 ) Stock-based compensation 4,148 4,366 3,906 (547) 143 176 Unrealized loss (gain) on derivative instruments (note 5) Fair value of contingent consideration (note 15) Impairment of long-lived assets (note 15) (1,158 ) 884 (1,373 ) 13,257 Goodwill write-down (note 9) 17,540 Loss on investments (note 16) 8,441 Loss (gain) on disposal of property and equipment 145 251 (1,386 ) Other 190 739 27 (12,891 ) (3,685 ) (24,318 ) Changes in non-cash working capital, net of businesses acquired Net cash flows from operating activities - continuing operations 721 26,430 17,490 Net cash flows from operating activities - discontinued operations 758 4,814 7,325 1,479 31,244 24,815 Investing activities (22,560 ) (31,186 ) (17,671 ) Purchases of property, plant and equipment Acquisition of businesses, net of cash acquired Proceeds from sale of property and equipment (490,715 ) 254 1,138 5,833 Other 700 (822 ) 188 Net cash flows from investing activities - continuing operations (21,606 ) (521,585 ) (11,650 ) Net cash flows from investing activities - discontinued operations 1,754 (1,235 ) 34,538 (19,852 ) (522,820 ) 22,888 SunOpta Inc. Consolidated Balance Sheets As at December 31, 2016 and January 2, 2016 (All dollar amounts expressed in thousands of U.S. dollars) Dec. 31, 2016 Jan. 2. 2016 ASSETS 1,251 2,274 117,412 157,369 368,482 371,223 19,794 20.088 2,801 21,728 Current assets Cash and cash equivalents Accounts receivable (note 6) Inventories (note 7) Prepaid expenses and other current assets Current income taxes recoverable Current assets held for sale (note 3) Total current assets Property, plant and equipment (note 8) Goodwill note 9) Intangible assets (109) Deferred income taxes (note 17) Other assets 64,330 549,697 597,055 162,239 176,513 223,611 241,690 183,524 195,008 1,045 958 9.442 7,979 Total assets 1,129,558 1,219,203 201,494 159,773 LIABILITIES Current liabilities Bank indebtedness (note 11) Accounts payable and accrued liabilities (note 10) Customer and other deposits Income taxes payable 173,745 151,831 2,543 5.322 5,661 1.720 1,016 1,521 2,079 1,773 5,500 5,243 52,486 Other current liabilities Current portion of long-term debt (note 11) Current portion of long-term liabilities Current liabilities held for sale (note 3) Total current liabilities Long-term debt (note 11) Long-term liabilities Deferred income taxes (note 17) Total liabilities 392,038 379,669 229,008 321,222 15,354 17,809 44,561 74,324 680,961 793,024 Series A Preferred Stock (note 12) 79,184 EQUITY 300,426 297,987 SunOpta Inc. shareholders' equity Common shares, no par value, unlimited shares authorized 85,743,958 shares issued (January 2, 2016 - 85,417,849) Additional paid-in capital Retained carnings Accumulated other comprehensive loss 25,522 22,327 53,838 106,838 (6,113) (13,104) 366,682 421,039 2,731 5,140 Non-controlling interests Total equity 369,413 426,179 Total equity and liabilities 1,129,558 1,219,203 SunOpta Inc. Consolidated Statements of Operations For the years ended December 31, 2016, January 2, 2016 and January 3, 2015 (All dollar amounts expressed in thousands of U.S. dollars, except per share amounts) Dec 31, 2016 Jan. 2, 2016 Revenues 1,346,731 1,145,134 Jan 3, 2015 1,102,745 (1,641) Cost of goods sold 1,220,779 1,034,772 980,640 Gross profit 125,952 110,362 122,105 Selling, general and administrative expenses 98,681 85,754 80,365 Intangible asset amortization 11,282 4,951 2,036 Other expense (income), net (note 15) 28,292 12,151 (2,220 ) Goodwill write-down (note 9) 17,540 Foreign exchange loss (gain) 1,243 (1,993) Earnings (loss) from continuing operations before the following (31,086 ) 9,147 43,917 Interest expense, net (note 11) 43,275 15,669 3,943 Loss on investments (note 16) 8,441 Earnings (loss) from continuing operations before income taxes (74,361 ) (6,522) 31,533 Provision for (recovery of) income taxes (note 17) (23,797) (3,390) 12,043 Earnings (loss) from continuing operations (50,564 ) (3,132) 19,490 Discontinued operations (note 3) Loss from discontinued operations (1,993) (17,377 ) (15,993 ) Gain (loss) on classification as held for sale 560 (10,515 ) Gain on sale of discontinued operation 2,888 Recovery of (provision for) income taxes 599 (402 > 2,000 Loss from discontinued operations attributable to non-controlling interests 264 8,819 4,911 Loss from discontinued operations attributable to SunOpta Inc. (570) (19,475 ) (6,194 ) Earnings (loss) (51,134 ) (22,607 13,296 Earnings (loss) attributable to non-controlling interests 54 (136 ) 195 SunOpta Inc. Consolidated Statements of Cash Flows For the years ended December 31, 2016, January 2, 2016 and January 3, 2015 (All dollar amounts expressed in thousands of U.S. dollars) Dec. 31. 2016 Jan. 2. 2016 Jan. 3, 2015 CASH PROVIDED BY (USED IN) (51,134 ) (22,607) 13.296 Operating activities Earnings (loss) Loss from discontinued operations attributable to SunOpta Inc. Earnings (loss) from continuing operations (570) (50,564 ) (19.475 ) (3,132 ) (6,194 ) 19.490 34,150 21,007 15,641 15,000 4,000 11,301 5,895 375 (29,850) (4,038 ) 4,366 (3,489 ) 3,906 4,148 143 176 (547) (1,158 ) 884 (1,373) Items not affecting cash: Depreciation and amortization Acquisition accounting adjustment on inventory sold (note 2) Amortization and write-off of debt issuance costs (note 11) Deferred income taxes Stock-based compensation Unrealized loss (gain) on derivative instruments (note 5) Fair value of contingent consideration (note 15) Impairment of long-lived assets (note 15) Goodwill write-down (note 9) Loss on investments (note 16) Loss (gain) on disposal of property and equipment Other Changes in non-cash working capital, net of businesses acquired Net cash flows from operating activities - continuing operations Net cash flows from operating activities - discontinued operations 13,257 17,540 8,441 145 251 (1,386 ) 27 190 739 (12,891 ) (3,685 ) (24318 ) 721 26,430 17,490 758 4,814 7,325 1,479 31.244 24,815 Investing activities (22,560 ) (17,671 ) (31,186 ) (490,715 ) 1,138 254 Purchases of property, plant and equipment Acquisition of businesses, net of cash acquired Proceeds from sale of property and equipment Other Net cash flows from investing activities - continuing operations Net cash flows from investing activities - discontinued operations 5,833 188 700 (822) (21,606) (521,585 ) (11,650 ) 1,754 (1,235) (522,820) 34,538 22,888 (19,852 )
