Caring For The Human Body - 1748 Words

Holistic care is being concerned about a complete system, rather than individual parts (Webster, 2014). Because this type of medical care does not focus on a single specialized area, many factors must be taken into consideration. Caring for the human body requires caring for it as a whole; this includes the body, the mind and inevitably, the spirit. According to Maslow’s hierarchy of needs, self-actualization includes spiritual well-being (Potter Perry, 2013). Although it is assumed that our basic physiological needs are the most important, some would argue that without spiritual health, a positive outlook, support from loved ones, and freedom from personal harm, holistic care would cease to exist (Fortinash Worret, 2013). When†¦show more content†¦Impact of the Issue There are multiple circumstances surrounding Death with Dignity. Throughout most of our education; nurses and all other healthcare workers are taught to practice nonmaleficence, an ethical principle that means to do no harm (Cherry Jacob, 2014). To medically assist a patient in death seems to contradict everything we are taught about medical practice and this particular ethical standard. There are treatment facilities for those who merely threaten suicide. Those at risk for suicide in the hospital setting are protected by the National Patient Safety Goals (Cherry Jacob, 2014), but physicians are now allowed to medically assist someone in death? No Federal Laws are in place for Death with Dignity because it is governed at the state level. As of 2011, only three states had death with dignity laws (Friend, 2011); Oregon was the first. This number has since been on the rise according to the blog that caught national attention about a young lady by the name of Brittany Maynard. Brittany Maynard, a 29 year old suffering from Glioblastoma Multiform, decided to end her own life. She openly wanted to share her story and advocate for patients in other states who desire to die with dignity. The article that went viral via Facebook was enough to catch national media attention. Brittany was once a resident of California,

The Party of Life Free Essays

The party of life Life is a challenge that we all must take and overcome. Like a never ending obstacle course, we must jump through the hurtles of work, run through the pain of tragedy, and climb up the ropes of solitude. Life never goes the way we plan it to but that is why I follow the most important law of life: It may not be the party we hoped for, but while we’re here, we should dance. We will write a custom essay sample on The Party of Life or any similar topic only for you Order Now When life goes wrong and pushes you down, it’s our job to pick ourselves up, brush ourselves off and keep on going with a wide smile and broad shoulders. We have all found ourselves in situations, where all we wish for is to leave, and for it to be over. There are times where we question, why things happen to us, and why we must suffer. I believe that this law of life is the perfect solutions for these situations and questions. This law of life means that no matter what situation you are in, you should still try to enjoy yourself and make the best of everything that is given to you. I chose this quote because I believe if you be positive in a rough position, then you can withstand anything that life launches at you. These are the moments that keep us waking up in the mornings, and going to bed at night. Living by this quote means we should go out with an optimistic attitude, with our heads held high, and ready to enjoy everything the world has to give to us no matter what has happened. I remember when I was younger; I flew to Russia and saw one of my old family friends. She showed me the town I used to live in and I was baffled to see how much things changed. I was surrounded by poverty and alarming conditions, but what surprised me the most was how the people reacted. They were not sulking and sobbing like I thought they would be, instead, they were enjoying themselves. Children ran around with their friends playing with a worn out soccer ball in their tattered clothing giggling and with jubilant looks on their faces. They didn’t care that their clothes weren’t as expensive or new, they were just grateful that they were with friends that cared for them and would help them out in their time of need, and family that would risk anything just to make them safe and happy. They might not have gotten the riches or money, but since they were alive and with loved ones, they relished what they had and were truly content. When we were young we all had our dreams. â€Å"I want to be a doctor! † someone would say. â€Å"I want to live in a big house and have a nice car! † another would reply. These thoughts are simply contagious as a human being so when I saw the families in my old town I thought to myself â€Å"This isn’t what they wished for but they still found a way to make it work†. Their lives weren’t the â€Å"parties† they hoped for but they still had a great time â€Å"dancing†. So when life jumps out of the bushes and scares us, we shouldn’t shriek and run, instead, we should turn around and laugh. When we trip and fall, we shouldn’t hope no one saw us and walk off embarrassed. Preferably, we should get back up on our feet and embrace the moment and enjoy every seconded of it. Life will never be what we predict it to be, but that’s just what makes it fun and more entertaining to dance to. How to cite The Party of Life, Essay examples

Polaroid free essay sample

In late March 1996, Ralph Norwood, the recently appointed treasurer of Polaroid Corporation, reflected on several matters of concern about the firm’s debt policy that would require his attention in the coming months. One immediate concern was Polaroid’s outstanding $150 million, 7. 25 percent notes, which were due to mature in January 1997. Investment bankers, keenly interested in garnering advisory and underwriting business from Polaroid, had sought to present proposals for refunding the issue. However, Norwood felt that any refunding decision should be part of a larger review of the firm’s financial policies. Accordingly he undertook a review of the firm’s overall debt policy, focusing primarily on the mix of debt and equity and on the maturity structure of the debt. He also sought to consider issues of control, the establishment of any special advisory relationships, and the use of new financial instruments. In recent years Polaroid’s share price had traded in a narrow range, reflecting small sales and earnings growth. However, a new plan to exploit aggressively the existing Polaroid brand, introduce product extensions, and enter new emerging markets (such as Russia) had been proposed to spur the firm’s performance. The restructuring plan was spearheaded by Gary T. DiCamillo, the first outsider appointed chief executive officer (CEO) in the firm’s history. DiCamillo had only recently joined the firm in November 1995. Norwood believed the plan would reinvigorate the company without materially increasing its operating risk. With important changes in the works, Norwood felt it essential that his financial policies afford Polaroid the necessary funding and flexibility to pursue the initiatives of the new CEO. This case was written by Professors Robert Bruner and Susan Chaplinsky as a basis for class discussion rather than to illustrate effective or ineffective handling of an administrative situation. Copyright  © 1997 by the University of Virginia Darden School Foundation, Charlottesville, VA. All rights reserved. To order copies, send an email to [emailprotected] edu. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of the Darden School Foundation. Rev. 12/01. Version 1. 7. 405 Bruner: Case Studies in Finance: Managing for Corporate Value Creation, 4/e 406 VI. Management of the Corporate Capital Structure 31. Polaroid Corporation, 1996  © The McGraw? Hill Companies, 2003 Case 31: Polaroid Corporation, 1996 THE EARLY YEARS Polaroid Corporation was founded in 1937 by Edwin Land, who had dropped out of Harvard College to pursue ideas on the polarization of light. The early years of Polaroid reflected the characteristics of Land: inventive, determined, and single-minded. The first instant camera was produced in 1948 and from that moment 90 percent of the company’s efforts were dedicated to the development of the field. Within four decades, sales of the firm grew from $142,000 to over $1 billion, largely on the basis of Land’s interest and oversight of the research effort in instant photography. Significant breakthroughs included instant black-and-white film (1954), instant color film (1960), and the SX-70 camera and film (1972) which freed the user from having to coat the developing picture. In 1977 the firm’s sales exceeded $1 billion for the first time, though this achievement was offset by increasing pressures from the sales force for new sources of growth, in the form of cheaper products. Internally there had been major efforts to develop products beyond instant photography: document copiers, and an instant movie camera and film. The movie project debuted in 1977 as Polavision, an instant motion picture technology. Unfortunately, sales languished largely because of the advent of video-camera technology. In 1979, the directors wrote off the inventory of Polavision products and effectively exited from the business. In 1980, Edwin Land stepped down as CEO of the firm; he retired from the board in 1982 and a year later sold his Polaroid stock in a public offering. RECENT FINANCIAL PERFORMANCE The two most notable events of the past decade were prompted by the actions of others. In 1976 Eastman Kodak Company introduced an instant camera and film product that threatened Polaroid’s dominance of the instant-photography field. Polaroid sued Kodak for patent infringement, and 10 years later in 1986 was awarded the largest patent judgment in history, some $900 million. Meanwhile, few significant new products were developed during this time. In 1988, with no large shareholder like Edwin Land to protect the firm and expecting the proceeds from the Kodak patent judgment, Polaroid received an unsolicited tender offer from Shamrock Holdings. Shamrock proposed to pay the shareholders an extraordinary dividend from the Kodak proceeds, and to manage the company more tightly. Polaroid’s management wanted to reinvest the proceeds in the business. To fend off the takeover threat, the firm conducted a leveraged recapitalization which involved the innovative use of an employee stock ownership plan (ESOP). The leveraged recap dramatically increased the firm’s debt to capital ratio from zero in 1988 to 56 percent in 1989. Shortly thereafter, the firm began a program of steady share repurchases. Despite the repurchase program, long-term debt to capital fell to 42 percent by 1995. Exhibit 1 gives a 10-year summary of the financial characteristics of the firm. Over the past 10 years, the firm’s share price growth had lagged the growth in the broad market indexes. From 1986 to 1995, Polaroid’s compound annual sales growth rate was 3. 6 percent in nominal terms, and after adjusting for inflation, virtually zero. Earnings losses appeared in 1988, 1993, and 1995, and were associated with both declines in operating Bruner: Case Studies in Finance: Managing for Corporate Value Creation, 4/e VI. Management of the Corporate Capital Structure 31. Polaroid Corporation, 1996  © The McGraw? Hill Companies, 2003 Recent Financial Performance 407 profit, and restructuring costs (consisting of both severance payments and write-offs). The sales and earnings results reflected the growing maturity of the instant photography market in the United States and the absence of major new-product introductions. Consistent with the perceived maturity of their market segment, Polaroid’s price-earnings (P/E) ratio of 12. 1 fell well below the market’s P/E of 15. 2 in 1995. The concerns over profitability and the lack of strong sales growth in cameras and film were also echoed in the comments of analysts following the firm. One analyst described Polaroid’s challenge: Instant photography is a razor blade business. Cameras are sold at low margins to encourage film sales. The company’s instant film sales are its primary margin product. Expanding the â€Å"installed base† of camera enhances the opportunities to sell film. The â€Å"burn rate† of film on newly purchased cameras, as might be expected, is highest and trails off in a reasonable predictable pattern thereafter. This correlation allows the company to make reasonable estimates of film unit sales volume. It also, obviously, means that there is a strong emphasis on selling cameras. 1 The patents the company held protected it from any significant competition domestically in the field of instant photography. In international markets, Polaroid’s only competitor was Fuji, who had a film and instant-camera product it marketed in Europe and Japan. However, even in Japan, Polaroid enjoyed a dominant market share. Thus, in the consumer market, Polaroid’s strength for instant photography was unrivaled. In the commercial market, Polaroid’s sales derived primarily from the use of instant photography for identification purposes (e. g. , ID badges), and other applications in medicine and law enforcement. Increasingly the expansion of digital imaging threatened to erode the firm’s base of users, as customers shifted from instant photography to digital solutions. In recent years, Polaroid’s Commercial Group accounted for approximately half of its total sales and one-third of instant-film sales. 2 In the digital area, Polaroid faced stiff competition from many wellcapitalized technology companies, such as Xerox, 3M, and Sony. To date, Polaroid’s development efforts in digital imaging had entailed heavy start-up costs. Norwood acknowledged many of the same concerns, but felt that the analyst community had taken a shortsighted view of Polaroid’s potential. Echoing its past, the firm continued to be â€Å"engaged primarily in one line of business, the design, manufacture, and sale of instant photographic imaging products worldwide,†3 with photographic products accounting for 90 percent of the firm’s revenues in 1995. Norwood said, â€Å"The basic business is low growth; but it’s an incredible annuity. † Second, sales to international markets had strong growth potential. In many emerging-market countries, no infrastructure existed to develop 35-mm film. With rising standards of living worldwide, there was a large untapped market for instant photography, and Polaroid’s cameras were in high demand. Exhibit 2 illuminates the growth in international revenues. The percentage mix of U. S. versus international sales had almost precisely reversed from 1993 to 1995. This reversal reflected steady growth in the international segment of between 3 and 8 percent per year. In contrast, sales 1 Duff Phelps Credit Rating Report, Polaroid Corporation, Duff Phelps, Inc. , November 18, 1996, page 2. Polaroid—Company Report, Prudential Securities, December, 4, 1996, page 4. 3 Polaroid Annual Report 1995, page 44. 2 Bruner: Case Studies in Finance: Managing for Corporate Value Creation, 4/e 408 VI. Management of the Corporate Capital Structure 31. Polaroid Corporation, 1996  © The McGraw? Hill Companies, 2003 Case 31: Polaroid Corporation, 1996 in the United States had fallen 2 percent in 1994 and 12 percent in 1995. Sales to Russia alone accounted for 9 percent of total sales in 1995. Exhibits 3 and 4 give the latest year’s income statement and balance sheet for Polaroid. CURRENT FINANCING AND FUTURE OUTLOOK Against this backdrop, Norwood assessed the current and future financing requirements of the firm. One important issue for consideration was the extent to which the financing of the firm would be impacted by the plans of the new CEO. Gary DiCamillo was appointed Polaroid’s chairman and CEO following a successful term as president of Black Decker’s PowerTools unit. At Black Decker, DiCamillo was viewed as an energetic leader, whose efforts were instrumental in developing a line of new products that helped to revive Black Decker’s brand name. DiCamillo brought similar energy and plans to Polaroid. Shortly after his arrival, he announced a major restructuring of the firm, to reduce the workforce by some 2,500 positions (roughly 20 percent), and to reduce expenses by more than $150 million annually. In particular, he terminated the production of the Captiva camera, and curtailed several major research and engineering programs, emphasizing instead projects having the greatest potential for commercialization. Finally, he sharply reduced corporate overhead costs. The effect of this restructuring was to trigger a special charge to earnings in 1995 of $247 million caused by the severance and early retirement programs, and by the write-down of equipment and inventory. As a result, Polaroid reported a net loss of $140. 2 million, compared with 1994 earnings of $117. 2 million. In February 1996, DiCamillo announced a new management structure built around three core areas: Consumer, Commercial, and New Business. The purpose of the new structure was to focus the organization more effectively on customers’ imaging needs, and to integrate product development responsibilities within each group. DiCamillo wrote: Both the restructuring and reorganization reflect my conviction that we can grow our core photographic and emerging electronic imaging businesses. I believe we can leverage our considerable brand power, technological expertise, and global distribution reach to create new growth opportunities and revitalize our instant photography business. 4 To meet its various financing needs, Polaroid maintained a five-year $150 million working capital line of credit to be used for general purposes. This line was to expire in 1999. In 1994 and 1995 there had been no borrowings under this line. The company maintained international lines of credit to support the firm’s foreign currency balance sheet exposure. At the end of 1995, borrowings outside the United States were $160. 4 million. Additional unused borrowings under these lines of credit were $160 million. Polaroid’s long-term debt outstanding consisted of three issues: †¢ Notes: $150 million, 7. 25 percent notes due January 15, 1997, had been issued at a discount (to yield 7. 42 percent); $200 million, 8 percent notes were due March 15, 1999, 4 Quoted from Letter to Shareholders, Polaroid Annual Report 1995, page 3. Bruner: Case Studies in Finance: Managing for Corporate Value Creation, 4/e VI. Management of the Corporate Capital Structure 31. Polaroid Corporation, 1996  © The McGraw? Hill Companies, 2003 Current Financing and Future Outlook 409 and had been issued with a discount to yield 8. 18 percent. Both issues of notes were noncallable. †¢ ESOP Loan: The loan had been drawn in 1988 to establish Polaroid’s leveraged employee stock ownership plan (ESOP), as part of the leveraged recapitalization of the firm. Scheduled principal payments were made semiannually through 1997 when a final payment of $37. 7 million was due. The weighted average interest rate on the loan was 5. 2 percent, 4. 4 percent, and 3. 6 percent during 1995, 1994, and 1993 respectively. Special tax benefits to providers of ESOP loans accounted for the unusually low interest rates. †¢ Convertible Subordinated Debentures: $140 million, 8 percent convertibles due in 2001. These carried an annual interest rate of 8 percent, and were convertible to common stock at $32. 50 per share. These were redeemable by the company after September 30, 1998, or sooner if the stock price exceeded $48. 75 per share for 20 of 30 consecutive trading days. All of the debentures were held by Corporate Partners. 5 Virtually all of the firm’s debt was due within six years. As Ralph Norwood commented, â€Å"The weighted average maturity structure of our debt was about four years. All our borrowings would need to be repaid or refinanced in a relatively short time. † Exhibit 5 illustrates the estimation of Polaroid’s weighted average maturity of its debt. In addition to the scheduled debt repayments, Ralph Norwood reviewed other possible demands on the firm’s resources. He believed that capital expenditures would about equal depreciation for the next few years. Also, though sales might grow, working capital turns should decline, resulting in a reduction in net working capital in the first year, followed by increases later. Both of these effects reflected the tight asset management under the new CEO. While cash dividends would be held constant for the foreseeable future, the firm would continue with its program of opportunistic share repurchases, which had varied between $20 and $60 million per year. Exhibit 1 summarizes the firm’s share repurchase activity in recent years. Exhibit 6 gives a five-year forecast of Polaroid’s income statement and balance sheet. This forecast was consistent with the lower end of analysts’ projections for revenue growth and realization of the benefits of DiCamillo’s restructuring program. It assumed that the existing debt would be refinanced with similar debt. Major share repurchases were not presumed in the forecast. The forecast would need to be revised to reflect the impact of any recommended changes in financial policy. CONSIDERATIONS IN ASSESSING FINANCIAL POLICY In addition to assessing the firm’s internal financing requirements, Norwood also recognized that his policy recommendation would have an important role in shaping the perceptions of the firm by the bond-rating agencies and investors. 5 If the rights were fully exercised, the resulting stock would represent approximately a 9 percent stake in Polaroid. The company was currently attempting to negotiate the repurchase of the conversion rights from Corporate Partners. On March 29, 1996, Polaroid’s share price closed at $44. 00. The annualized volatility or â€Å"sigma† of returns on Polaroid’s shares over the previous 100 days was 17. 7 percent. The yield on six-year U. S. Treasury Notes was 6. 05 percent. Bruner: Case Studies in Finance: Managing for Corporate Value Creation, 4/e 410 VI. Management of the Corporate Capital Structure 31. Polaroid Corporation, 1996  © The McGraw? Hill Companies, 2003 Case 31: Polaroid Corporation, 1996 †¢ Bond Rating. Polaroid currently had a â€Å"split† rating where Standard Poor’s rated the firm’s senior6 long-term debt BBB and Moody’s rated it Baa3, (roughly equivalent to a BBB? in the Standard Poor’s system). Exhibit 7 presents the bond-rating definitions for this and other rating categories. BBB/Baa3 was an â€Å"investment-grade† rating, whereas the next rating grade lower (BB/Ba) was â€Å"noninvestment grade† and often referred to as â€Å"high yield or junk debt. † Some large investors (such as pension funds and charitable trusts) were barred from investing in noninvestment-grade debt. Many individual investors shunned it as well. For that reason, the yields on noninvestment-grade debt over U. S. Treasury securities (i. e. , spreads) were typically considerably higher than the spreads for investment-grade issues. Also, the ability to issue noninvestment-grade debt depended to a much greater degree on the strength of the economy, and on favorable credit market conditions than did investment-grade debt. Norwood said: You don’t pay much of a penalty in yield as you go from A to BBB. There’s a range over which the risk you take for more leverage is de minimus. But you pay a big penalty as you go from BBB to BB. The penalty is not only in the form of higher costs, but also in the form of possible damage to the Polaroid brand. We don’t want the brand to be sullied by the association with junk debt. For these reasons, Ralph Norwood sought to preserve an investment-grade rating for Polaroid. But where in the investment grade range should Polaroid be positioned? Exhibit 8 summarizes the bond ratings for a sample of Polaroid’s peer firms, which Norwood described as â€Å"large global consumer technology products companies,† and for a large sample of firms in general. Exhibit 9 gives financial ratios associated with the various rating categories. Although Norwood knew the ratings agencies looked closely at the debt to capital ratio (â€Å"debt capitalization†), he believed that the EBIT Coverage ratio was also a good measure of credit quality. Exhibit 10 gives Polaroid’s EBIT coverage ratios for the past 10 years. Norwood’s decision would require him to first choose a target bond rating. Thereafter, he would have to determine the minimum and maximum amounts of debt that Polaroid could carry to achieve the desired rating. Flexibility. Norwood was also aware that choosing a target debt level based on an analy†¢ sis of industry peers might not fully capture the flexibility Polaroid would need to meet its own possible future adversities. Norwood said: Flexibility is how much debt you can issue before you lose the investment-grade bond rating. I want flexibility, and yet I want to take advantage of the fact that with more debt, you have lower cost capital. I am very comfortable with our strategy and internal financial forecasts for our business; if anything, I believe the forecasts probably underestimate, rather than overestimate our cash flows. But let’s suppose that a two-sigma adverse outcome would be an EBIT equal to $150 million—I can’t imagine in the worst of times an EBIT less than that. Accordingly, Norwood’s final decision on the target bond rating would have to be one that maintained reasonable reserves against Polaroid’s worst-case scenario. 6 The convention in finance is that the â€Å"firm’s bond rating† refers to the rating on the firm’s senior debt, with the understanding that any subordinated debt issued by the firm will ordinarily have a lower bond rating. For instance, Polaroid’s senior debt had the split BBB/Baa3 rating, while its subordinated convertible bonds were rated BB/Ba. Bruner: Case Studies in Finance: Managing for Corporate Value Creation, 4/e VI. Management of the Corporate Capital Structure 31. Polaroid Corporation, 1996  © The McGraw? Hill Companies, 2003 Considerations in Assessing Financial Policy 411 †¢ Cost of Capital. Consistent with management’s emphasis on value creation, Norwood believed that choosing a financial policy that minimized the cost of capital was important. He understood that exploitation of debt tax shields could create value for shareholders—up to a reasonable limit, and that beyond the limit, costs of financial distress would become material, and cause the cost of capital to rise. One investment bank, Hudson Guaranty, presented Norwood with estimates of the pretax cost of debt and cost of equity by rating category. These estimates are given in Exhibit 11. The cost of debt was estimated by averaging the current yield-to-maturity of bonds within each rating category. The cost of equity (ke) was estimated by Hudson Guaranty using the Capital Asset Pricing Model. The cost of equity was computed for each firm using its beta and other capital market data. The individual estimates of ke were then averaged within each bondrating category. Norwood remarked on the relatively flat trend in the cost of equity within the investment-grade range. Hudson Guaranty replied that â€Å"changes in leverage within the investment-grade range are not regarded as material to investors. † It remained for Norwood to determine which rating category provided the lowest costs of capital. Current Capital-Market Conditions. Any policy recommendations would need to ac†¢ knowledge the feasibility of implementing those policies today as well as in the future. Exhibit 12 presents information about current yields in the U. S. debt markets. The current situation in the debt markets was favorable as the U. S. economy continued in its fifth year of economic expansion. The equity markets seemed to be pausing after a phenomenal advance in prices in 1995. The outlook for interest rates was stable, though any sign of inflation might cause the Federal Reserve Board to lift interest rates. Major changes in taxes and regulations were in abeyance, at least until the outcome of the presidential elections to be held in November 1996. CONCLUSION Ralph Norwood leafed through the analyses and financial data he had gathered for his recommendations. He reflected on the competing goals of value creation, flexibility, and bond rating. His plan would have to afford Polaroid low costs and continued access to capital under a variety of operating scenarios. This would require him to test the possible effect of downside scenarios on Polaroid’s coverage and capitalization ratios under alternative debt policies. He aimed to recommend a financial policy that would balance these goals and provide guidance to the directors and the financial staff regarding the target mix of capital and the maturity structure of the company’s debt. With so many competing factors to weigh, Norwood felt it unlikely that his plan would be a â€Å"perfect plan. † But then he remembered one of Gary DiCamillo’s favorite sayings: â€Å"If you wait until you have a 99 percent solution, you’ll never act; go with an 80 percent solution. † 412 167. 9 $132. 7 42. 3% 19. 6% $47. 38 615. 93 12. 1 15. 2 3. 01 1. 05 6. 88% 5. 49% 33. 00% Addns. to property plant and equip. Depreciation Book value LT debt/capital Market value LT debt/capital Selected Valuation Information (at years’ ends) Polaroid stock price SP 500 Index Polaroid average P/E (1) SP Industrials Average P/E (1) Polaroid market/book ratio Polaroid beta Yield on 30-Year T-bonds Yield on 90-day T-bills Total annual return on large co. stocks $32. 50 459. 27 13. 3 15. 5 1. 73 1. 05 7. 37% 4. 25% 1. 30% 146. 7 $118. 2 39. 6% 27. 5% $ 886. 8 747. 3 2,316. 7 566. 0 0. 0 864. 4 $2. 49 $0. 60 $33. 50 466. 25 15. 6 18. 4 2. 04 1. 15 6. 59% 3. 00% 9. 90% 165. 6 $100. 3 44. 0% 27. 8% $ 833. 6 718. 2 2,212. 3 602. 3 0. 0 767. 3 -$1. 10 $0. 60 46,806 0 $0. 0 138 $1,178. 8 1,066. 1 2,244. 9 2,059. 5 185. 4 44. 0 47. 9 -51. 3 1993 $31. 13 435. 71 14. 2 19. 8 1. 80 1. 15 7. 67% 3. 43% 7. 67% 201. 5 $89. 1 44. 1% 30. 5% $ 789. 0 657. 3 2,008. 1 637. 4 0. 0 808. 9 $2. 06 $0. 60 46,668 2,258 $63. 4 7 $1,145. 7 1,006. 6 2,152. 3 1,938. 5 213. 8 0. 0 58. 5 99. 0 1992 $26. 63 417. 09 12. 2 19 1. 69 1. 20 8. 14% 5. 38% 30. 55% 175. 8 $85. 5 37. 9% 26. 6% $ 695. 3 549. 4 1,889. 3 471. 8 0. 0 772. 9 $12. 54 $0. 60 48,919 1,151 $30. 6 0 $1,113. 6 957. 0 2,070. 6 1,824. 0 246. 6 0. 0 58. 4 683. 7 1991 $23. 38 330. 22 15. 6 14. 4 5. 63 1. 25 8. 61% 7. 50% -3. 17% 120. 9 $87. 2 48. 0% 25. 3% $ 609. 1 461. 0 1,701. 3 513. 8 348. 6 207. 7 $2. 20 $0. 60 50,070 2,040 $55. 6 0 $1,058. 3 913. 4 1,971. 7 1,687. 4 284. 3 0. 0 81. 3 151. 0 1990 $22. 88 353. 40 21. 8 12. 6 8. 01 1. 25 8. 45% 8. 11% 31. 49% 94. 5 $87. 4 56. 1% 28. 5% $ 642. 0 430. 9 1,776. 7 602. 2 321. 9 148. 8 $1. 96 $0. 60 52,110 19,525 $950. 6 0 $1,091. 8 812. 9 1,904. 7 1,600. 5 304. 2 40. 5 86. 2 145. 0 1989 $18. 38 277. 72 NMF 10. 8 1. 30 1. 25 8. 96% 6. 67% 18. 81% 127. 0 $81. 9 28. 5% 23. 4% $ 980. 0 433. 8 1,957. 2 402. 3 0. 0 1,011. 5 -$0. 34 $0. 60 71,635 0 $0. 0 9,717 $1,048. 3 814. 6 1,862. 9 1,689. 1 173. 8 151. 9 29. 0 -22. 6 1988 $11. 88 247. 08 14. 7 15. 3 0. 70 1. 20 8. 59% 5. 78% 5. 23% 116. 6 $75. 7 0. 0% 0. 0% $ 652. 6 359. 6 1,599. 4 0. 0 0. 0 1,048. 2 $2. 02 $0. 60 61,918 0 $0. 0 0 $1,009. 3 754. 6 1,763. 9 1,610. 1 153. 8 0. 0 15. 0 125. 2 1987 $33. 25 242. 17 16. 6 17. 5 2. 14 1. 10 7. 80% 5. 97% 18. 47% 82. 9 $71. 2 0. 0% 0. 0% $ 602. 4 357. 7 1,444. 6 0. 0 0. 0 960. 1 $1. 75 $0. 50 61,918 0 $0. 0 0 $964. 3 664. 9 1,629. 2 1,493. 5 135. 7 0. 0 18. 6 108. 2 1986 31. Polaroid Corporation, 1996 Notes: 1. P/E ratios are computed on earnings before restructuring charges, litigation award, and other extraordinary items. Sources: Polaroid Annual Report 1995, Value Line Investment Survey, Federal Reserve Bulletin, Standard Poor’s Current Statistics, Ibbotson Associates Stocks, Bonds Bills, Inflation 1995. $ 738. 5 691. 0 2,261. 8 526. 7 0. 0 717. 7 -$3. 09 $0. 60 Earnings per share Dividend per share 45,998 941 $30. 6 133 $1,160. 3 1,152. 2 2,312. 5 2,112. 2 200. 3 0. 0 46. 6 117. 2 1994 VI. Management of the Corporate Capital Structure Selected Balance Sheet Information Working capital Net property, plant equipment Total assets Long-term debt (LTD) Redeemable preferred stock Common stockholders’ equity 45,533 1,218 $40. 2 753 $1,019. 0 1,217. 9 2,236. 9 2,147. 7 89. 2 247. 0 52. 1 -140. 2 1995 Common shares, end of year (000s) Common shares repurchased (000s) Repurchase outlay ($ millions) Common shares issued (000s) Selected Income Statement Information Net sales U. S. International Total Operating expenses Profit from opns. before restructuring exp. Restructuring expense Interest expense Net earnings At fiscal year ended December 31 EXHIBIT 1 Ten-Year Financial Summary (in U. S. $ millions except per-share values and numbers of shares) Bruner: Case Studies in Finance: Managing for Corporate Value Creation, 4/e  © The McGraw? Hill Companies, 2003 Bruner: Case Studies in Finance: Managing for Corporate Value Creation, 4/e VI. Management of the Corporate Capital Structure  © The McGraw? Hill Companies, 2003 31. Polaroid Corporation, 1996 Conclusion 413 EXHIBIT 2 Information on International Revenues Mix of Polaroid Revenues (U. S. versus International) Percent of Total Sales 60 55 50 45 40 35 1986 1990 1995 U. S. Revenues (%) International Revenues (%) Source of graph data: Polaroid Annual Report 1995, pp. 48–49. Estimated Quarterly Polaroid Sales to Russia ($ millions) 1993 1994 1995 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Full Year 0 0 $10 m 10 $20 m $22 m 24 51 57 $154 m $38 m 35 74 49 $196 m Source: B. L. Landry, â€Å"Polaroid—Company Report† Morgan Stanley Co. October 25, 1996 Performance by Geographic Segment ($ millions, eliminations of interregional amounts not shown) 1993 1994 1995 Sales: U. S. Europe Asia Pacific, Canada, Latin and South America $1,609. 6 945. 2 524. 7 $1,656. 6 1,051. 7 531. 1 $1,498. 4 1,106. 9 602. 4 Profits/(loss): U. S. Europe Asia Pacific, Canada, Latin and South America $ 44. 1 43. 7 56. 8 $ 100. 8 81. 8 45. 2 $ (179. 4) 20. 6 24. 4 Assets: U. S. Europe Asia Pacific, Canada, Latin and South America $1,532. 7 556. 0 216. 9 $1,480. 5 613. 8 248. 1 $1,526. 1 669. 9 258. 4 Source: Polaroid Annual Report 1995, page 45. Bruner: Case Studies in Finance: Managing for Corporate Value Creation, 4/e 414 VI. Management of the Corporate Capital Structure  © The McGraw? Hill Companies, 2003 31. Polaroid Corporation, 1996 Case 31: Polaroid Corporation, 1996 EXHIBIT 3 Income Statement: Consolidated Statement of Earnings (in $ millions) Years Ended December 31 1995 Net sales United States International Total net sales 1994 $1,019. 0 1,217. 9 2,236. 9 $1,160. 3 1,152. 2 2,312. 5 Cost of goods sold Marketing, research, admin. Restructuring other. Total costs Profit/(loss) from operations 1,298. 6 849. 1 247. 0 2,394. 7 (157. 8) 1,324. 2 788. 0 0. 0 2,122. 2 200. 3 Interest income Other income Interest expense Earnings/(loss) before taxes Tax expense Net earnings/(loss) 8. 7 (0. 2) 52. 1 (201. 4) (61. 2) (140. 2) Source: Polaroid Annual Report 1995. 9. 7 (2. 7) 46. 6 160. 7 43. 5 117. 2 Bruner: Case Studies in Finance: Managing for Corporate Value Creation, 4/e VI. Management of the Corporate Capital Structure  © The McGraw? Hill Companies, 2003 31. Polaroid Corporation, 1996 Conclusion 415 EXHIBIT 4 Balance Sheet (in $ millions) 1995 Assets Current assets Cash and cash equivalents Short-term investments Receivables, less allowances Inventories Prepaid expenses and other Total current assets Gross property, plant, and equipment Less accumulated depreciation Net property, plant, and equipment Prepaid taxes—non-current Total assets Liabilities and Stockholders’ Equity Current liabilities Short-term debt Current portion of long-term debt Payables and acrruals Compensation benefits Taxes payable Total current liabilities Long-term debt Accrued postretirement benefits Accrued postemployment benefits Total liabilities Preferred stock Common stockholders’ equity Common Stock Additional paid-in capital Retained earnings Less treasury stock, at cost Less deferred compensation Total common stockholders equity Total liabilities and stockholders’ equity Source: Polaroid Annual Report 1995. 1994 $ 73. 3 9. 8 550. 4 615. 5 208. 5 1,457. 5 2,164. 4 1,473. 4 691. 0 113. 3 $2,261. 8 $ 143. 3 85. 6 541. 0 577. 4 141. 4 1,488. 7 2,043. 4 1,296. 1 747. 3 80. 7 $2,316. 7 $ 160. 4 39. 7 274. 9 197. 4 46. 6 719. 0 526. 7 257. 2 41. 2 $1,544. 1 0. 0 $ 117. 1 35. 9 275. 7 121. 4 51. 8 601. 9 566. 0 247. 2 37. 2 $1,452. 3 0. 0 $ $ 75. 4 401. 9 1,525. 8 1,205. 4 80. 0 717. 7 $2,261. 8 75. 4 387. 2 1,692. 1 1,174. 5 115. 8 864. 4 $2,316. 7 Bruner: Case Studies in Finance: Managing for Corporate Value Creation, 4/e VI. Management of the Corporate Capital Structure  © The McGraw? Hill Companies, 2003 31. Polaroid Corporation, 1996 EXHIBIT 5 Maturity Structure of Debt Debt Repayment ($ millions) 1996 1997 1998 1999 2000 2001 Total Debt Repayment (% of total) $ 39. 7 187. 8 0 200. 0 0 140. 0 $567. 5 Maturity (years) 7. 0% 33. 0 0 35. 0 0 25. 0 100%