plz answer both (for year 16 and 15)
Prior to Year 14, Borden, Inc derived approximately 75 percent of its revenues from branded food products and 25 percent from packaging and industrial products. The geographical sales mix was comprised of approximately 67 percent in the United States and 33 percent from other countries, although interestingly, the firm's manufacturing and processing facilities were equally split between the United States and other countries. In Year 14 and Year 15, Borden was acquired by a firm that specialized in takeovers and buyouts of established firms. As a result, the firm experienced substantial business realignments and financial restructuring during this period. The data file for this exam presents income statements for Borden for Year 14, Year 15. and Year 16. The notes to the financial statements reveal the following additional information: Restructuring Charges and Discontinued Operations. For years, Borden reported continually increasing sales while maintaining a profit margin of approximately 4 percent. Borden regularly purchased branded food products companies and other businesses with the cash flows generated by its mature food products business. Sales and earnings started declining in Year 10, however, brought on by deteriorating market positions in certain branded food products segments and difficulties in managing the diverse set of businesses in which Borden competed. As a result, Borden embarked on a major restructuring program in Year 10. The restructuring program involved both organizational changes and divestiture of its North American snacks, seafood, jams, and jellies, and other businesses. Four years later, Borden embarked on another restructuring brought on by factors similar to those identified in Year 10. The firm reported no restructuring charges in Year 11. Year 12. or Year 13.) The restructuring charges/credits in Year 14 Year 15, and Year 16 related to streamlining operations and the charges involved employee severances and relocations and plant closings, part of which Borden included in continuing operations and part of which it included in income from discontinued operations. The loss on disposal recognized in Year 14 represented a pre-tax charge of $637 million ($490 million after taxes) to provide for the expected future disposal of the North American businesses described above. The charges and credits in Year 15 and Year 16 related to these businesses as well Loss/Gain on Divestitures, In Year 16, the firm redesigned its operating structure and made the decision to divest additional businesses. The firm recorded a $245 million charge related to the estimated losses on the disposal or consolidation of these businesses. The firm indicated that a large portion of the charge related to the excess of net book values over expected proceeds Impairment Losses. In Year 15, Borden wrote down goodwill, plant, and equipment totaling $293 million. The firm concluded that ongoing and projected operating losses reported by the businesses represented by these assets indicated that the carrying values of the assets were not expected to be recovered by their future cash flows. The firm stated that the future cash flow projections were measured at the business level, which is the level at which the business is managed. A similar write down of 58 million was recorded in Year 16. Borden, Inc. Income Statement amounts in millions) Year 16 Year 15 Year 14 $5,944 (18) 4.136) (1,811) 11 (245) (8) (140) (15) (24) (S442) $6,261 (138) (4.240) (1,963) (15) 59 (293) (143) (41) $6,226 35 (4,083) (2,045) (115) 15 0 (53) (140) (41) 51 ($97) ($566) Continuing Operations Sales Other Income (Expense)-Net Cost of Goods Sold Selling and Administrative Restructuring Expense 1 Gain on Divestitures 2 Impairment Losses 3 Interest 4 Interest 5 Income Taxes 6 Income (Loss) from Continuing Operations 7 Discontinued Operations (net of tax effects) 8 Income (Loss) from Operations 9 (Loss) on Disposal o Gain (Loss) from Discontinued Operations 1 2 Accounting Changes (net of tax effect) 3 Postretirement Benefits Other than Pensions 4 Net Income (Loss) 5 -6 Borden, Inc. -7 Statement of Cash Flows (amounts in millions) (Problem 6.5) 8 -9 -0 Operations 51 Net Income (Loss) 2 Depreciation and Amortization 3 Loss on Disposal-Discontinued Operations 4 Restructuring $9 67 $76 $27 (59) (532) (526) (490) (5516) (5366) (5598) -18 (5631) Year 16 Year 15 Year 14 (5366) 157 243 -53 ($598) 193 95 -57 -631 224 637 53 Year 16 Year 15 Year 14 (5366) 157 245 -53 8 ($598) 193 95 -57 293 -41 44 50 24 7 10 -27 9 92 82 26 Borden, Inc. 27 Statement of Cash Flows (amounts in millions) (Problem 6.5) 28 29 30 Operations 31 Net Income (Loss) 32 Depreciation and Amortization 33 Loss on Disposal-Discontinued Operations 34 Restructuring 35 Impairment Losses 36 (Increase) Decrease in Accounts Receivable 37 (Increase) Decrease in Inventories 38 Increase (Decrease) in Accounts Payable 39 Increase (Decrease) in Current and Deferred Taxes 40 Other Changes in Working Capital Accounts 41 Cash Flow from Operations 42 43 Investing 44 Capital Expenditures 45 Divestiture of Businesses and Sale of Securities 46 Purchase of Businesses 47 Cash Flow from Investing 48 Financing 49 Increase in Long-term Debt 50 Issuance of Capital Stock 51 Reduction in Long-term Debt 52 Dividends 53 Other 54 Cash Flow from Financing 55 Change in Cash 56. Cash-Beginning of Year 57 Cash-End of Year 59 -631 224 637 53 0 61 30 3 -242 17 152 -7 -92 & (S203) 289 6 $ 80 ($192) 998 (436) (43) (472) ($142) 20 125 $ 145 ($130) 409 0 $ 259 (5 85) 616 6 (493) (36) (150) ($142) 25 100 $ 125 ($177) 53 (9) -S 133 (5536) 275 12 (129) (127) 400 ($105) -86 186 $ 100 Click to see additional instructions Assume for this part that you have decided to eliminate both of these items. The income tax rate is 35 percent for all years. The change in net income for year 16 as a result of removing the restructuring charge, rounded to the nearest whole number, equals $ million. If this change is negative be sure to include the minus sign. Click to see additional instructions Assume for this part that you have decided to eliminate both of these items. The income tax rate is 35 percent for all years. The change in net income for year 15 as a result of removing the impairment, rounded to the nearest whole number, equalss million. If this change is negative be sure to include the minus sign Prior to Year 14, Borden, Inc derived approximately 75 percent of its revenues from branded food products and 25 percent from packaging and industrial products. The geographical sales mix was comprised of approximately 67 percent in the United States and 33 percent from other countries, although interestingly, the firm's manufacturing and processing facilities were equally split between the United States and other countries. In Year 14 and Year 15, Borden was acquired by a firm that specialized in takeovers and buyouts of established firms. As a result, the firm experienced substantial business realignments and financial restructuring during this period. The data file for this exam presents income statements for Borden for Year 14, Year 15. and Year 16. The notes to the financial statements reveal the following additional information: Restructuring Charges and Discontinued Operations. For years, Borden reported continually increasing sales while maintaining a profit margin of approximately 4 percent. Borden regularly purchased branded food products companies and other businesses with the cash flows generated by its mature food products business. Sales and earnings started declining in Year 10, however, brought on by deteriorating market positions in certain branded food products segments and difficulties in managing the diverse set of businesses in which Borden competed. As a result, Borden embarked on a major restructuring program in Year 10. The restructuring program involved both organizational changes and divestiture of its North American snacks, seafood, jams, and jellies, and other businesses. Four years later, Borden embarked on another restructuring brought on by factors similar to those identified in Year 10. The firm reported no restructuring charges in Year 11. Year 12. or Year 13.) The restructuring charges/credits in Year 14 Year 15, and Year 16 related to streamlining operations and the charges involved employee severances and relocations and plant closings, part of which Borden included in continuing operations and part of which it included in income from discontinued operations. The loss on disposal recognized in Year 14 represented a pre-tax charge of $637 million ($490 million after taxes) to provide for the expected future disposal of the North American businesses described above. The charges and credits in Year 15 and Year 16 related to these businesses as well Loss/Gain on Divestitures, In Year 16, the firm redesigned its operating structure and made the decision to divest additional businesses. The firm recorded a $245 million charge related to the estimated losses on the disposal or consolidation of these businesses. The firm indicated that a large portion of the charge related to the excess of net book values over expected proceeds Impairment Losses. In Year 15, Borden wrote down goodwill, plant, and equipment totaling $293 million. The firm concluded that ongoing and projected operating losses reported by the businesses represented by these assets indicated that the carrying values of the assets were not expected to be recovered by their future cash flows. The firm stated that the future cash flow projections were measured at the business level, which is the level at which the business is managed. A similar write down of 58 million was recorded in Year 16. Borden, Inc. Income Statement amounts in millions) Year 16 Year 15 Year 14 $5,944 (18) 4.136) (1,811) 11 (245) (8) (140) (15) (24) (S442) $6,261 (138) (4.240) (1,963) (15) 59 (293) (143) (41) $6,226 35 (4,083) (2,045) (115) 15 0 (53) (140) (41) 51 ($97) ($566) Continuing Operations Sales Other Income (Expense)-Net Cost of Goods Sold Selling and Administrative Restructuring Expense 1 Gain on Divestitures 2 Impairment Losses 3 Interest 4 Interest 5 Income Taxes 6 Income (Loss) from Continuing Operations 7 Discontinued Operations (net of tax effects) 8 Income (Loss) from Operations 9 (Loss) on Disposal o Gain (Loss) from Discontinued Operations 1 2 Accounting Changes (net of tax effect) 3 Postretirement Benefits Other than Pensions 4 Net Income (Loss) 5 -6 Borden, Inc. -7 Statement of Cash Flows (amounts in millions) (Problem 6.5) 8 -9 -0 Operations 51 Net Income (Loss) 2 Depreciation and Amortization 3 Loss on Disposal-Discontinued Operations 4 Restructuring $9 67 $76 $27 (59) (532) (526) (490) (5516) (5366) (5598) -18 (5631) Year 16 Year 15 Year 14 (5366) 157 243 -53 ($598) 193 95 -57 -631 224 637 53 Year 16 Year 15 Year 14 (5366) 157 245 -53 8 ($598) 193 95 -57 293 -41 44 50 24 7 10 -27 9 92 82 26 Borden, Inc. 27 Statement of Cash Flows (amounts in millions) (Problem 6.5) 28 29 30 Operations 31 Net Income (Loss) 32 Depreciation and Amortization 33 Loss on Disposal-Discontinued Operations 34 Restructuring 35 Impairment Losses 36 (Increase) Decrease in Accounts Receivable 37 (Increase) Decrease in Inventories 38 Increase (Decrease) in Accounts Payable 39 Increase (Decrease) in Current and Deferred Taxes 40 Other Changes in Working Capital Accounts 41 Cash Flow from Operations 42 43 Investing 44 Capital Expenditures 45 Divestiture of Businesses and Sale of Securities 46 Purchase of Businesses 47 Cash Flow from Investing 48 Financing 49 Increase in Long-term Debt 50 Issuance of Capital Stock 51 Reduction in Long-term Debt 52 Dividends 53 Other 54 Cash Flow from Financing 55 Change in Cash 56. Cash-Beginning of Year 57 Cash-End of Year 59 -631 224 637 53 0 61 30 3 -242 17 152 -7 -92 & (S203) 289 6 $ 80 ($192) 998 (436) (43) (472) ($142) 20 125 $ 145 ($130) 409 0 $ 259 (5 85) 616 6 (493) (36) (150) ($142) 25 100 $ 125 ($177) 53 (9) -S 133 (5536) 275 12 (129) (127) 400 ($105) -86 186 $ 100 Click to see additional instructions Assume for this part that you have decided to eliminate both of these items. The income tax rate is 35 percent for all years. The change in net income for year 16 as a result of removing the restructuring charge, rounded to the nearest whole number, equals $ million. If this change is negative be sure to include the minus sign. Click to see additional instructions Assume for this part that you have decided to eliminate both of these items. The income tax rate is 35 percent for all years. The change in net income for year 15 as a result of removing the impairment, rounded to the nearest whole number, equalss million. If this change is negative be sure to include the minus sign
