88 Understanding the Numbers
EXHIBIT 2.35 Adjustment worksheet for sustainable earnings base:
Baker Hughes Inc., years ended September 30
(in millions).
1995 1996 1997
Reported net income or (loss) $105.4 $176.4 $97.0
Add
Pretax LIFO liquidation losses
Losses on sales of fixed assets
Losses on sales of investments
Losses on sales of “other” assets
Restructuring charges (unusual charge) 39.6 52.1
Investment write-downs
Inventory write-downs (included in cost of sales) 21.9
Other asset write-downs
Foreign currency losses 1.9 11.4
Litigation charges
Losses on patent infringement suits
Exceptional bad debt provisions
Temporary expense increases
Temporary revenue reductions
Other
Other
Other
Subtotal $1.9 $51.0 $74.0
Multiply by
(1 – Combined federal and state tax rates) 58% 58% 58%
Tax-adjusted additions $1.1 $29.6 $42.9
Add
After-tax LIFO liquidation losses
Increases in deferred tax valuation allowances
Other nonrecurring tax charges
Losses on discontinued operations
Extraordinary losses
Losses/cumulative-effect accounting changes 14.6 12.1
Other (acquired in-process R&D) 118.0
Other
Other
Subtotal $14.6 $130.1Total additions $15.7 $29.6 $173.0