Cp 3-2
Essay by 24 • April 10, 2011 • 1,116 Words (5 Pages) • 1,565 Views
CP 3-2. Sun Microsystems is a leading supplier of computer related products, including servers, workstations, storage devices, and network switches.
In the letter to stockholders as part of the 2001 annual report, President and CEO Scott G. McNealy offered the following remarks?
Fiscal 2001 was clearly a mixed bag for Sun, the industry, and the economy as a whole. Still, we finished with revenue growth of 16 percent--and that's significant. We believe it's a good indication that Sun continued to pull away from the pack and gain market share. For that, we owe a debt of gratitude to our employees worldwide, who aggressively brought costs down--even as they continued to bring exciting new products to market.
The statement would not appear to be telling you enough. For example, McNealy says the year was a mixed bag with revenue growth of 16 percent. But what about earnings? You can delve further by examining the income statement in Figure 1. Also, for additional analysis of other factors, consolidated balance sheet(s) are presented in Figure 1.
Sun Microsystems, Inc.
Summary Consolidated Statement of Income (in millions)
2001
Dollars 2000
Dollars 1999 Dollars 1998 Dollars
Net revenues $18,250 $15,721 $11,806 $9,862
Costs and expenses:
Cost of sales 10,041 7,549 5,670 4,713
Research and development 2,016 1,630 1,280 1,029
Selling, general and administrative 4,544 4,072 3,196 2,826
Goodwill amortization 261 65 19 4
In-process research and development 77 12 121 176
Total costs and expenses 16,939 13,328 10,286 8,748
Operating income 1,311 2,393 1,520 1,114
Gain (loss) on strategic investments (90) 208 -- --
Interest income, net 363 170 85 48
Litigation settlement -- -- -- --
Income before taxes 1,584 2,771 1,605 1,162
Provision for income taxes 603 917 575 407
Cumulative effect of change in
Accounting principle, net
(54)
--
--
--
Net income $ 927 $ 1,854 $ 1,030 $ 755
Net income per common share--
Diluted
$ 0.27
$ 0.55
$ 0.31
$ 0.24
Shares used in the calculation of
Net income per common share--
Diluted
3,417
3,379
3,282
3,180
CP 3-2. Continued
Sun Microsystems, Inc.
Consolidated Balance Sheets (in millions)
2001 2000
Assets
Current assets:
Cash and cash equivalents $ 1,472 $ 1,849
Short-term investments 387 626
Accounts receivable, net of allowances of $410 in 2001
and $534 in 2000
2,955
2,690
Inventories 1,049 557
Deferred tax assets 1,102 673
Prepaids and other current assets 969 482
Total current assets 7,934 6,877
Property, plant and equipment, net 2,697 2,095
Long-term investments 4,677 4,496
Goodwill, net of accumulated amortization of $349 in 2001
and $88 in 2000
2,041
163
Other assets, net 832 521
$18,181 $14,152
Liabilities and Stockholders' Equity
Current liabilities:
Short-term borrowings $ 3 $ 7
Accounts payable 1,050 924
Accrued payroll-related liabilities 488 751
Accrued liabilities and other 1,374 1,155
Deferred revenues and customer deposits 1,827 1,289
Warranty reserve 314 211
Income taxes payable 90 209
Total current liabilities 5,146 4,546
Deferred income taxes 744 577
Long-term debt and other obligations 1,705 1,720
Total debt $ 7,595 $ 6,843
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.001 par value, 10 shares authorized
(1 share which has been designated as Series A Preferred
participating stock); no shares issued and outstanding
--
--
Common stock and additional paid-in-capital, $0.00067
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