56 Understanding the Numbers
Interpreting Information in the Operating
Activities Section
The statement of cash f lows is an important additional source of information
on nonrecurring items. It enables one to detect items that are not disclosed sep-
arately in the income statement but appear in the statement of cash f lows
because of either their noncash or nonoperating character. To realize the diag-
nostic value of the statement of cash f lows, one must determine which items in
the operating activities section of the statement of cash f lows are nonrecur-
ring. The appearance in the statement of cash f lows as merely an addition to
or deduction from net income or loss does not signify that the item is nonre-
curring. Some entries in this section simply ref lect the noncash character of
EXHIBIT 2.15 Disclosure of nonrecurring items in both the income
statement and operating activities section of the
statement of cash f lows.
Company Nonrecurring Item
Separately disclosed in both the income statement and statement of cash f lows
Advanced Micro Devices Inc. (1999) Gain on sale of Vantis
Air T Inc. (2000) Loss on the sale of assets
AmSouth Bancorporation (1999) Merger-related costs
Armstrong World Industries Inc. (1999) Charge for asbestos liability
Baycorp Holdings Ltd. (1999) Unrealized loss on energy trading contracts
Callon Petroleum Company (1999) Impairment of oil and gas properties
Corning Inc. (1999) Nonoperating gains
Delta Air Lines Inc. (2000) Asset write-downs and other special charges
The Fairchild Corporation (2000) Restructuring charges
Gerber Scientific Inc. (2000) Nonrecurring special charges
Hercules Inc. (1999) Charge for acquired in-process R&D
Raven Industries Inc. (2000) Gain on sale of investment in affiliate
Separately disclosed only in the statement of cash f low
Advanced Micro Devices Inc. (1999) Charge for settlement of litigation
Brush Wellman Inc. (1999) Impairment of fixed assets and related intangibles
Chiquita Brands International Inc. (1999) Write-down of banana production assets, net
Dal-Tile International Inc. (1999) Impairment of assets and foreign-currency gain
Evans & Sutherland Computer Inventory write-downs
Corporation (1998)
M.A. Hanna Company (1999) Provision for loss on sale of assets
H.J. Heinz Company (1999) Gain on sale of bakery products unit
JLG Industries Inc. (2000) Restructuring charges
Kulicke & Soffa Industries Inc. (1999) Provision for impairment of goodwill
Petroleum Helicopters Inc. (1999) Gain on asset dispositions
Schnitzer Steel Industries Inc. (1999) Environmental reserve reversal
Synthetech Inc. (2000) Realized gain on sale of securities
SOURCES: Companies’ annual reports. The year following each company name designates the annual re-
port from which the example was drawn.