Example research essay topic: Federal Income Tax Shareholders' Equity - 1,765 words

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OGDEN CORPORATION AND SUBSIDIARIES SELECTED FINANCIAL DATA DECEMBER 31 1988 1987 ( ) 1986 ( ) (In thousands of dollars, except per-share amounts) Net sales and service revenues $ 1, 087, 785 $ 902, 565 $ 819, 629 INCOME (LOSS) FROM: Continuing operations 57, 780 47, 802 35, 109 Discontinued operations 80, 920 Net income (loss) 57, 780 47, 802 116, 029 EARNINGS (LOSS) PER COMMON SHARE: Continuing operations 1. 44 1. 19. 89 Discontinued operations 2. 09 Total 1. 44 1. 19 2. 98 EARNINGS (LOSS) PER COMMON SHARE-ASSUMING FULL DILUTION: Continuing operations 1. 41 1. 17. 88 Discontinued operations 2. 00 Total 1. 41 1. 17 2. 88 Total assets 2, 201, 745 1, 759, 496 1, 642, 634 LONG-TERM OBLIGATIONS: Operations other than resource-recovery 251, 855 183, 740 110, 315 Resource-recovery operation 1, 163, 565 795, 195 772, 754 SHAREHOLDERS' EQUITY 425, 754 406, 576 392, 639 SHAREHOLDERS' EQUITY PER COMMON SHARE 10. 70 10. 32 10. 09 CASH DIVIDENDS DECLARED PER COMMON SHARE 1. 10 1. 00. 90 (TABLE CONTINUED) DECEMBER 31 1985 ( ) 1984 ( ) (In thousands of dollars, except per-share amounts) Net sales and service revenues $ 743, 963 $ 688, 669 INCOME (LOSS) FROM: Continuing operations 14, 375 24, 591 Discontinued operations (35, 675) 15, 150 Net income (loss) (21, 300) 39, 741 EARNINGS (LOSS) PER COMMON SHARE: Continuing operations. 36. 63 Discontinued operations (. 94). 40 Total (. 58) 1. 03 EARNINGS (LOSS) PER COMMON SHARE-ASSUMING FULL DILUTION: Continuing operations. 36. 62 Discontinued operations (. 94). 38 Total (. 58) 1. 00 Total assets 1, 465, 023 837, 445 LONG-TERM OBLIGATIONS: Operations other than resource-recovery 228, 103 261, 567 Resource-recovery operation 597, 945 SHAREHOLDERS' EQUITY 308, 833 361, 098 SHAREHOLDERS' EQUITY PER COMMON SHARE 7. 19 9. 38 CASH DIVIDENDS DECLARED PER COMMON SHARE. 90. 90 ( ) Restated - See Note 1 to Consolidated Financial Statements. [ 37 ] [HARDCOPY PAGE 37 ] Ogden Corporation and Subsidiaries MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED OPERATIONS The accompanying financial statements for prior years have been restated to reflect the consolidation of Ogden's leasing and financing subsidiaries and a captive insurance company previously included on the equity method of accounting, as well as the previously off-balance sheet financing assets, liabilities, and related revenues and costs of resource-recovery facilities. (See Note 1 to the Consolidated Financial Statements. ) OPERATIONS: Sales and service revenues for 1988 increased by $ 185, 200, 000, or 20. 5 %, over 1987. Operating Services revenues were $ 108, 600, 000 higher, primarily reflecting increased revenues of $ 62, 500, 000 and $ 40, 000, 000 in the Building Services and Aviation Services groups, respectively, chiefly associated with new accounts and increased customer activity. The other areas of Operating Services also had increased revenues, which were partially offset by reduced revenues in Leisure Services of $ 20, 400, 000, due primarily to the loss of certain theatre concession accounts in 1987. Environmental Services started commercial operations in 1988 and had revenues of $ 7, 500, 000 for the year.

Resource-recovery operations had increased revenues of $ 69, 000, 000. Service revenues increased $ 37, 000, 000 over 1987, reflecting eight facilities in operation in 1988 having a per-day capacity of 7, 762 tons, compared with five facilities in operation in 1987 having a per-day capacity of 3, 200 tons. Construction revenues were $ 32, 000, 000 higher, reflecting three projects under construction in 1988, only one of which reaching more than 25 % completion in 1988, compared with two plants under construction and one completed in 1987. Income from operations for 1988 increased $ 6, 000, 000 over 1987. Operating Services income increased $ 4, 400, 000, reflecting increased earnings in Aviation and Leisure Services and the Abatement and Decontamination groups, which were partially offset by a reduction in other income of $ 1, 000, 000, reflecting a gain on the sale of Wheeling Downs racetrack in 1988 of $ 8, 500, 000 and the gain of $ 9, 500, 000 on a pension reversion in 1987. Environmental Services had an increase of $ 4, 000, 000 in income, reflecting income from operations of $ 49, 000, compared with a loss of $ 3, 950, 000 in 1987.

Commercial operations for this group commenced in 1988. Financial Services income, consisting primarily of net interest and dividends, was $ 7, 000, 000 less than 1987, primarily reflecting a reduction of $ 5, 200, 000 in dividends received from Avondale Industries, Inc. , and increased [ 38 ] [HARDCOPY PAGE 38 ] interest expenses. Resource-recovery operations income was $ 4, 600, 000 higher than 1987, chiefly associated with three additional facilities in operation during 1988, which more than doubled the capacity of the five plants operating in 1987. The effective income tax rate for 1988 was 7. 2 %, compared with a 12. 8 % rate for 1987. This decrease of 5. 6 % is chiefly associated with a 6 % lower Federal income tax rate and the release of deferred income tax liabilities no longer required, partially offset by lower investment tax credits. Note 7 to the Consolidated Financial Statements contains a more detailed reconciliation of the variance from the statutory Federal income tax rate.

Sales and service revenues for 1987 increased by $ 82, 900, 000, or 10. 1 %, over 1986. Operating Services revenues were $ 59, 700, 000 higher, primarily reflecting increased revenues of $ 44, 100, 000 and $ 31, 800, 000 in the Building Services and Aviation Services groups, respectively, chiefly associated with new accounts and increased customer activity. These increases were partially offset by reduced revenues of $ 16, 740, 000 in the Leisure Services group due to the sale of Suffolk Downs in 1986 and Waterford Park in 1987. Resource-recovery operations revenues increased $ 22, 800, 000.

Services revenues increased $ 46, 000, 000 over 1986, chiefly associated with five facilities with a per-day capacity of 3, 200 tons in operation during 1987, compared with one facility with a 750 -ton-per-day operating capacity in 1986. Construction revenues were $ 23, 200, 000 lower, reflecting construction revenues on two facilities in 1987 of $ 19, 600, 000, compared with revenues of $ 42, 800, 000 on one facility in 1986. Income from operations for 1987 increased $ 16, 000, 000 over 1986, chiefly associated with the earnings of the Financial Services group, which were $ 21, 000, 000. This increase consisted principally of net interest and dividends due primarily to the investment of proceeds from the sale of discontinued operations. Similar income in 1986 amounted to $ 3, 500, 000 and is shown as Other Income. Operating Services income decreased by $ 2, 500, 000, primarily reflecting a reduction of $ 5, 500, 000 in the gain recognized in 1986 and 1987 on the replacement of a defined benefit pension plan with a defined contribution plan.

Building Services income was comparable with 1986, and Aviation Services income was lower. Both groups had increased revenues, which were offset by higher marketing costs and lower margins. The Leisure Services group income increased in 1987 and included the sale of a racetrack and a long-term lease. Environmental Services, formed in December, 1986, had a loss of $ 3, 900, 000, reflecting research, development, and start-up costs. [ 39 ] [HARDCOPY PAGE 39 ] Resource-recovery income was $ 1, 400, 000 higher than 1986, chiefly associated with the operation of four additional facilities in 1987, which increased the per-day capacity from 750 tons to 3, 200 tons and increased construction income by $ 1, 800, 000.

These increases were partially offset by an increase of $ 3, 000, 000 for the write-off of unsuccessful bid proposal costs. The effective income tax rate for 1987 was 12. 8 %, compared with a 24 % rate for 1986 based upon the aggregate amounts included in continuing and discontinued operations. The decrease is chiefly associated with a 6 % lower Federal income tax rate and higher investment tax credits. 7 to the Consolidated Financial Statements contains a more detailed reconciliation of the variance from the statutory Federal income tax rate. The Financial Accounting Standards Board Statement, 'Accounting for Income Taxes, ' was issued in December, 1987, and amended in September, 1988. This Statement establishes financial accounting and reporting standards for the effects of income taxes that result from activities during the current and preceding years, using an asset and liability approach.

This Statement requires Ogden to adjust its deferred tax balances for changes in tax rates, effective for years beginning after December 15, 1989. The effect of Statement 96 on Ogden's future results of operations and financial position is not expected to be significant. CAPITAL INVESTMENTS, COMMITMENTS, AND LIQUIDITY: During 1988, capital investments amounted to $ 304, 900, 000, of which $ 268, 800, 000, inclusive of restricted funds transferred from funds held in trust, was for resource-recovery operations; $ 25, 500, 000 for normal replacement and growth in the Operating Services groups; $ 9, 700, 000 primarily for two plants under construction for Environmental Services; and $ 900, 000 for Financial Services and corporate equipment. As of December 31, 1988, capital commitments amounted to $ 77, 100, 000, which includes commitments for equity investments (over and above funds provided by revenue bonds issued by municipalities) of $ 33, 700, 000 for resource-recovery facilities; $ 32, 200, 000 for normal replacement, modernization and growth in Resource-Recovery Operations and Operating Services; and $ 11, 200, 000 for plant and equipment for Environmental Services. With resource-recovery projects financed to a large degree by revenue bonds issued by the municipalities and restricted funds held in trust as a result of revenue bonds issued for facility construction, capital commitments are expected to be satisfied from cash flow from operations; available funds, including short-term investments; as well as the Corporation's unused credit facilities to the extent needed.

At December 31, 1988, the Corporation had $ 179, 105, 000 in cash and short-term investments and an unused $ 50, 000, 000 revolving credit facility. [ 40 ] [HARDCOPY PAGE 40 ] OGDEN CORPORATION AND SUBSIDIARIES STATEMENTS OF CONSOLIDATED INCOME FOR THE YEARS ENDED DECEMBER 31 1988 1987 1986 OPERATIONS OTHER THAN RESOURCE RECOVERY: Net sales $ 400, 506, 000 $ 404, 226, 000 $ 373, 807, 000 Service revenues 545, 853, 000 426, 035, 000 396, 728, 000 Total net sales and service revenues 946, 359, 000 830, 261, 000 770, 535, 000 Interest income 21, 792, 000 23, 215, 000 17, 813, 000 Other income 15, 808, 000 26, 111, 000...

Research essay sample on Federal Income Tax Shareholders Equity