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Exhibit 1 Consolidated Statements of Earnings and Earnings Retained (Dollars in
millions except per share amounts)
1984 1983 1982
Net Sales $12,974 $12,312 $10,160
Costs and expenses:
Cost of products sold 8,282 8,226 6,719
Selling, advertising, administrative, and
general expenses 3,073 2,689 2,219
Earnings from continuing operations 1,619 1,397 1,222
Interest and debt expense (net of capitalized
amounts of $29, $9, and $4 respectively) (187) (196) (186)
Other income (expense), net 120 87 61
Earnings from continuing operations before
provisions for income taxes 1,552 1,288 1,097
Provision for income taxes 709 586 513
Earnings after taxes 843 702 584
Extraordinary items 311 117 250
Net earnings applicable to common stock 1,154 819 834
Earnings retained at beginning of year 4,461 3,987 3,457
Less:
Cash dividends on common stock 360 345 304
Distribution of Sea-Land stock 540 -- --
Retirement of common stock 681 -- --
Earnings retained at end of year $4,034 $4,461 $3,987
Net earnings per common share:
Continuing operations $7.00 $5.66 $5.14
Discontinued operations 3.27 1.59 2.68
$10.27 $7.25 $7.82
Average number of common shares outstanding
(in thousands) 112,375 112,997 106,706
Exhibit 2 Consolidated Balance Sheets—December 31 (Dollars in
millions)
1984 1983
ASSETS
Current assets:
Cash and short-term investments $1,323 $ 363
Accounts and notes receivable (net) 1,226 1,344
Inventories 2,493 2,69
Prepaid expenses 72 64
Total current assets $5,114 $4,461
Property, plant, and equipment—at cost $3,760 $3,001
Less depreciation and amortization (944) (794)
Net property, plant, and equipment 2,816 2,207
Other assets 1,342 2,549
Total Assets $9,272 $9,217
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable $ 101 $ 132
Accounts payable and accrued accounts 1,459 1,205
Current maturities of long-term debt 227 38
Income taxes accrued 463 124
Total current liabilities $2,250 $1,499
Long-term debt (less current maturities) 1,257 1,42
Other noncurrent liabilities 265 168
Deferred income taxes 523 276
Redeemable preferred stocks 499 631
Common stockholders' equity
Common stock 255 280
Paid-in capital 344 585
Cumulative translation adjustments (155) (103)
Earnings retained 4,034 4,461
Total common stockholders' equity 4,478 5,223
Total liabilities and stockholders' equity $9,272 $9,217
Exhibit 3 R.J. Reynolds Geographic Data (Dollars in millions)
Assets:
United States $1,730 $1,659 $1,541
Canada 373 376 415
Europe 791 822 819
Latin America 197 191 259
Asia/Pacific 119 136 120
Corporate 551 442 770
Consolidated assets $3,761 $3,626 $3,924
Exhibit 7 Summary of Five-Year Eurobond Terms Available to R.J.
Reynolds
Yen/Dollar Dual
Dollar Yen Currency
Eurobonds Eurobonds Eurobonds
Face value $100 million ¥25 billion ¥25 billion
Price 100.125% 100.250% 101.500%
Fees 1.875% 1.875% 1.875%
Coupon (paid annually) 10.125% 6.375% 7.750%
Final Redemption Par Par $115.956 million
Exhibit 8 Long-Dated Yen/Dollar
Forward Exchange Rates (Forwards
Arranged by Nikko Securities)
Outright Rates
Year Bid Offer
0 236.80a 236.90
1 231.30 231.70
2 223.90 225.90
3 215.60 218.70
4 207.10 211.20
5 197.60 202.70
a
Bid and offer rates are quoted from the
perspective of the market-making dealer. For
example, a dealer bank would buy a dollar
from a corporation in exchange for selling to it
236.80 yen. Similarly, the bank would sell a
dollar to a corporation in exchange for buying
from it 236.90 yen.
Exhibit 9 Currency and Interest Rate Swap Indications (All rates are against six-month dollar
LIBOR)
Semiannual Benchma Semiannual Fixed Annual Fixed
Quotations rk U.S. Rates Against 6- Rates Against 6-
Treasury Month Dollar Month Dollar
Pay Receive Pay LIBOR
a
Receive PayLIBOR
Receive
5-Year Dollar Ratesb T+60 T+76 9.88% 10.48% 10.64% 10.75% 10.92%
5-Year Yen Rates 6.98% 7.22% 7.10% 7.35%
a
AII rates are quoted from the perspective of the bank offering the swap—that is, a bank would agree to pay semiannual
fixed dollars at 10.48% against receiving semiannual six-month dollar LIBOR. Similarly, the bank would agree to receive
semiannual fixed dollars at 10.64% against paying semiannual six-month dollar LIBOR.
b
T represents the semiannual yield on five-year U.S. Treasury securities.