...I. Case Context Continental Carriers, Inc., (CCI) is known as a regular commodities motor carrier. Since its inception, it has experienced continuous growth in revenues and mastered the strategic reduction of operating costs. It soon became known in the trucking industry as a widely profitable key player. In order to sustain continuous growth in revenues and income, management has decided that key acquisitions need to be made. The top contender, Midland Freight, Inc., a common carrier company would expand CCI’s route system. The prospect company also demonstrated congruence with the type of marketing and cost reduction programs that ushered CCI’s growth. The owners of Midland agreed to sell it for $50 million in cash. Since the stipulation was for cash, the funds would have to be acquired externally so as to prevent cash flow problems that would disrupt operations for CCI. One of the primary considerations was that the pending merger would provide additional $8.4 million annually in Earnings before interest and taxes (EBIT) making it easy for management to seek external funds. Another serious consideration was that CCI has always had a consistent policy of having no long-term debt in its capital structure. In 1988, the current year, the company’s capital structure was purely composed of common stock and surplus. In addition, most of the common stock was being held by management. Furthermore, there is no dominant interest except that of...
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...To: Continental Carriers-Board of Directors Part 1 Continental Carriers, Inc. is a trucking company that works primarily in transporting general commodities. The company was founded in 1952 and operates within the district of the Pacific Coast and from Chicago to various points in Texas. The company avoids long term debt and an overall low debt policy by taking out short term loans. Since the appointment of Mr. Evans as president, Continental has become more profitable through internal growth with an extensive marketing program. In order for the company to continue expanding its revenues, Mr. Evans advocated the acquisition of Midland Freight. External financing of $50 million would be required to accomplish this goal. However, the directors have a difficult challenge with regard to the appropriate method of financing. Through extensive discussion and evaluation the directors identified three distinct options, namely, selling $50 million in bonds at a10% interest rate to a California Insurance Company or issuing 3 million in common stocks at $17.75 per share with a dividend rate of $1.50 per share or issuing 500 000 preference shares at a par of $100 per share and with a dividend rate of $10.50 per share. Part 2 There has been a disagreement within the board over the issuance of new stock to finance this venture. One director argues that the true value of the company had been understated since the book values of the company’s assets were much lower than current replacement...
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...Introduction Continental Carriers Inc is a trucking company which specialises in transporting general commodities. Since its establishment in 1952 the company operates within the district of the Pacific Coast and from Chicago to various points in Texas. It was noted that the company maintains an overall low debt policy, whereby they obtain infrequent short term loans and avoid long term debt. Furthermore with the appointment of Mr. Evans as president, the company became more profitable and experienced internal growth through intensive marketing and computerisation of operations. In order for the company to continue expanding its revenues the president Mr. Evans advocated the acquisition of Midland Freight. External financing of $50 million would be required to accomplish this goal. However, the directors have a difficult challenge with regard to the appropriate method of financing. Through extensive discussion and evaluation the directors identified three distinct options, namely, selling $50 million in bonds at a 10% interest rate to a California Insurance Company or issuing 3 million in common stocks at $17.75 per share with a dividend rate of $1.50 per share or issuing 500 000 preference shares at a par of $100 per share and with a dividend rate of $10.50 per share (See appendix A for case assumptions). Discussion 1. Given the nature of CCI’s business how much debt can it support? Continental Carriers Inc. must possess certain organizational and structural characteristics...
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...The recommendation I have would be to diversify into other lines of business either through mergers or investments of corporate funds in the financial securities instead of continuing with the TriStar project and the production of the TriStar aircrafts. The problem with the TriStar project is that it is not financially profitable because it is based on unrealistic sales forecasts calculated on the hope of capturing maybe 35% to 40% of the total free world market of 775 airbuses. The market was defined by 10% annual growth of air travel. A much more realistic approach would’ve been to have calculated a sales forecast on a 5% growth rate travel, which would lead to 323 aircrafts being built and a sales forecast of 113 TriStars. The second problem with this project would be that the break-even sales are incorrect. Lockheed predicted that the project would break even at between 195 and 205. Instead the break-even is more than twice as high at 450. The third problem with the TriStar project would be the cash flow. Cash flow does not become positive until at least the 50th TriStar has been sold. When considering this and future positive cash flows, these are not high enough to cover the pre-production costs that have been incurred. In conclusion, even under the most favorable conditions that Lockheed could have viewed the TriStar project in 1968, it turns out that the project does not even have a positive return on investment or even a way to recover...
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...Introduction: Seiko Epson Corporation (セイコーエプソン株式会社 Seikō Epuson Kabushiki-gaisha?), commonly known as Epson, is a Japanese electronics company and one of the world's largest manufacturers of computer printers, information and imaging related equipment. Since its inception, Epson has passed down and expanded on its traditional strengths as a manufacturing company. Refining the company's super-micro processing and precision processing technologies in the development of its watches and then expanding those technologies into other fields led to rapid progress. Name : Seiko Epson Corporation (CEO-Seiji Hanaoka) Founded : May 18, 1942 Head office : 3-3-5 Owa, Suwa, Nagano, Japan Parent Company : Seiko Group Types of Product : Inkjet Printer, Dot matrix Printer, Laser printers, Scanners, Desktop Computers, Business and Multimedia Projectors, Large Home Theatre, Televisions, Robots, Industrial automation equipment, Cash registers, Laptops, Integrated circuits, LCD components National decision: Transportation system: Our logistics company Epson Logistics (Nagano Prefecture), with the cooperation of our business partners, is cutting CO2 emissions by adopting hybrid vehicles, using...
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...THE EXECUTIVE POWER 1- THE PRESIDENT OF THE REPUBLIC: Article 49 (As amended by the Constitutional Law of October 17, 1927, And by the constitutional law of may 8, 1929, And by the constitutional law of January 21, 1947 And by the constitutional law of September 21, 1990) The President of the Republic is the head of the state and the symbol of the nation's unity. He shall safeguard the constitution and Lebanon's independence, unity, and territorial integrity. The President shall preside over the Supreme Defense Council and be the Commander-in-Chief of the Armed Forces which fall under the authority of the Council of Ministers. The President of the Republic shall be elected by secret ballot and by a two thirds majority of the Chamber of Deputies. After a first ballot, an absolute majority shall be sufficient. The President's term is six years. He may not be re-elected until six years after the expiration of his last mandate. No one may be elected to the Presidency of the Republic unless he fulfills the conditions of eligibility for the Chamber of Deputies. It is also not possible to elect judges, Grade One civil servants, or their equivalents in all public institutions to the Presidency during their term or office or within two years following the date of their resignation and their effective cessation of service, or following retirement. Article 50 Upon assuming office, the President of the Republic shall take an oath of fidelity before the Parliament, to the Nation...
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...WATERSHIP DOWN by RICHARD ADAMS (1972) [VERSION 1.1 (Apr 29 03). If you find and correct errors in the text, please update the version number by 0.1 and redistribute.] To Juliet and Rosamond, remembering the road to Stratford-on-Avon Note Nuthanger Farm is a real place, like all the other places in the book. But Mr. and Mrs. Cane, their little girl Lucy and their farmhands are fictitious and bear no intentional resemblance to any persons known to me, living or dead. Acknowledgements I acknowledge with gratitude the help I have received not only from my family but also from my friends Reg Sones and Hal Summers, who read the book before publication and made valuable suggestions. I also wish to thank warmly Mrs. Margaret Apps and Miss Miriam Hobbs, who took pains with the typing and helped me very much. I am indebted, for a knowledge of rabbits and their ways, to Mr. R. M. Lockley's remarkable book, The Private Life of the Rabbit. Anyone who wishes to know more about the migrations of yearlings, about pressing chin glands, chewing pellets, the effects of over-crowding in warrens, the phenomenon of re-absorption of fertilized embryos, the capacity of buck rabbits to fight stoats, or any other features of Lapine life, should refer to that definitive work. PART I The Journey 1. The Notice Board CHORUS: Why do you cry out thus, unless at some vision of horror? CASSANDRA: The house reeks of death...
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...Continental Carriers, Inc Continental Carriers, Inc is a regulated general commodities motor carrier who had shipping routes up and down the Pacific Coast and to parts of the Midwest. They sought to acquire Midland Freight, Inc to expand its operations and were deliberating about which method to finance the acquisition. The purchase of Midland Freight, Inc would cost $50 million in cash. CCI would gain $8.4 million to its earnings before interest and tax. There were three options that the board of directors debated over: issuing new common stock, issuing preferred stock or selling bonds. As Ms. Thorp, evaluate the impact of the bond issue and of the stock issue on the EPS. What are the risks in each alternative? The bond alternative arranges to sell $50 million in bonds to a California insurance company with an interest rate of 10 percent at maturity of 15 years. There is $2.5 million sinking fund required which leaves $12.5 million outstanding at maturity. The issues with this method are as follows: Long-term-debt can be burdensome and can stunt or slow growth of the company. The company has to payback what was borrowed plus the interest on the debt. It also puts stockholders and management who are primary holders of stock at risk, because if the company earnings are substantially lower than what was forecasted then the bondholders can virtually gain control of company. The second alternative would be the possibility of issuing new common stock of 3 million...
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...Blue Sky University Student Research FedEx Corporation Tanan Jargalsaikhan Table of Contents Key Information 3 Business Description 4 Industry Overview and Competitive Positioning 5 Porter’s Five Forces model 5 SWOT analysis 7 Financial Analysis 8 Cash Flows 8 Common size statements 9 Evaluating Internal Liquidity 11 Evaluating Operating Performance 12 Valuation 14 Dividend Discount Model 14 Present Value of Free Cash Flow to Equity 15 Present Value of Operating Free Cash Flow 17 Relative Valuation 19 Investment Risks 20 Investment Summary 21 Conclusion 22 * Key Information Company name: FEDEX CORPORATION Exchange: New York Stock Exchange (NYSE) Ticker symbol: FDX Sector: Services Industry: Air Delivery and Freight Services Price: $166.11 (as of 30 January, 2015) Price Target: $189.13 Recommendation: HOLD / BUY * * Business Description FedEx Corporations (“FedEx”) is one of the largest operating delivery service companies within the United States as well as globally. The company was first founded in 1971 and today operates in over 220 countries with its headquarters based in Memphis, Tennessee. The company has over 300,000 employees worldwide. The revenue for 2014 was $45,6 billion and the net income was $2,1 billion. The firm is the prevailing leader within the delivery and freight service industry. This is substantiated through sales, profit, and growth. FedEx’s revenue is one...
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...Marketing Plan United Continental Airline Marketing Plan Rhunda Mitchell BUS620 Instructor Nichols August 1, 2011 The airline industry has continuously been and is steadily the most intensely competitive business segment in all components of its operations (Morrison, 2000). In commission on real narrow margins the decline in passenger traffic which was embraced by airlines due to the events of September 11th, 2001 has had a direct effect on the many domestic and global airline carriers across The United States (Taylor, 2003). The events that occurred that day created governmental intercession by means of loan assurances, recompense for terrorist attack fatalities, and insurance associated with war hazards (Taylor, 2003). The Associate deputy secretary of Transportation stated that the industry is in its worst financial crisis” (Taylor, 2003), since the industry was deregulated in 1978 (Taylor, 2003). It is imperative to recognize the two conflicting forms of airline carriers within existence in the United States (Taylor, 2003). The major airlines are in reference to those with surplus gross revenues of $1 billion dollars yearly. In general these airlines also provide international services, accommodate the business class customers and passengers who anticipate or covet full in flight services like meals and other related amenities (Morrison, 2000). This includes; American Airlines, Delta Air Lines, United Air Lines, U.S. Airways, Continental Airlines and Northwest...
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...Continental Airlines and United Airlines Merger Tony McDougal December 2, 2012 Professor Bates Abstract This paper explains the challenges faced by two major U.S. airlines, United and Continental airlines in an attempt to merge, and form the world's largest airline based in the United States. This consideration is based in relation to the movement of passengers via air traffic. The airline merge occurred in order for each airline to survive and be competitive within the airline industry. The paper explains briefly the reason for this merger, the strategy it used and went through to accomplish the merger. It also explains some pros and cons the merger and management faced. It explains the vision of the newly created company in reference to where they want to be in the future and the profit of revenue they foresee to earn with this merger. This paper outlines the structural change the new United Airlines came up with after the merger took place and how both United and Continental Airlines management, employees, and customers adapted to the merge. Continental Airlines and United Airlines Merger The merger of United and Continental airlines that was under way in 2008 formed the third’s world largest airline. This merge occurred during the decrease of air travel from heightened security measures against terrorism and high fuel costs. During this time, the United States government also tried to help by giving the airline industry monetary...
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...case case Continental Airlines: One Company’s Flight to Success In the last decade, Continental Airlines has had a spotty track record. The airline twice filed for bankruptcy, realized diminished performance culminating in a $613 million loss in 1994, and was ranked dead last in industry indicators such as on-time performance among the major carriers. During these years, employees at Continental had undergone several series of layoffs and withstood both wage cuts and delayed wage increases in an effort to slash Continental’s costs. The result of these efforts was a demoralized workforce and a corporate reputation that put Continental near the top of Fortune’s list of “least admired” companies. Despite this history, things have taken a positive turn for the airline in recent years. Since the arrival of Gordon Bethune, Continental’s new CEO, the company appears to have made a 180-degree turn and is now a highly productive and profitable carrier. Indeed, all indications are that Continental is back on track. For instance, in 1995, the carrier was number 1 in on-time performance for the first time ever and was highly ranked in baggage handling. Customer complaints are down more than 60 percent, and Continental recently gained the distinction of being the number 1 airline in customer satisfaction among the major U.S. carriers for long-distance flights. Just a few years earlier, Continental was last in this category. Moreover, sick leave and on-the-job injuries have decreased...
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...GM 588 6/20/2012 Dr. Kim Hunley INTRODUCTION United Airlines is a major airline based in the United States and one of the world’s largest airlines. It was formed in 1934. It is a subsidiary of United Continental Holdings Inc. Its headquarters are located in Chicago, IL. United is a founding member of the Star Alliance, the largest alliance in the world. On October 1, 2010 United and Continental airlines merged together forming the world’s largest airline in revenue passenger miles and second largest in fleet size and destinations. “The new United will offer customers an enhanced travel experience, combining the best products and services each carrier has to offer,” (The World's Leading Airline, 2012). The airline is supposed to be the airline that customers want to fly, the airline employees want to work for and the airline shareholders want to invest in. The key highlights of the merger are the following: * World’s most comprehensive global network, including world class international gateways to Asia, Europe, Latin America, Africa and Middle East with non-stop or one stop service from virtually anywhere in the United States * Most modern and fuel-efficient fleet and the best new aircraft order book, among U.S. network carriers * Industry-leading frequent flyer program that will provide more opportunities to earn and redeem miles worldwide * Optimal hub locations in 10 cities, including hubs in the four largest cities in the United States ...
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...began to run into problems. Eventually Eastern made a decision that would prove to be disastrous for the airlines-- they sold the company to Frank Lorenzo. Why did Eastern sell to Texas Air? For starters, the 1970's and 80's proved to be a very difficult time for many airline companies. In the late 70’s the Airline Deregulation Act of 1978 was passed. The enactment did provide many new freedoms (freedom to expand their route systems for example), and positive outcomes for airline carriers. One of which was flexibility to develop innovative pricing structures. This flexibility allowed carriers to expand into new markets. Yet with the positive changes of deregulation, came negative consequences for the airlines-- “airfare wars.” Companies now had to compete to remain in the market. They waged airfare wars against their rivals, slashing their own prices to knock off smaller companies. Many airlines struggled tremendously, and had difficulty keeping their doors open. This made many air carriers susceptible to unwanted, hostile takeovers and mergers. In 1985 Eastern was a large airline (three point nine billion in assets, and over four point eight billion in revenues). Eastern was ranked third among all U.S. airlines, followed by United Airlines, and American. However, between 1985 and 1986 Eastern’s performance steadily declined. Eastern Airlines was one of the many airlines struggling to contend with the price wars. The combination of competition, labor unrests, and Eastern’s...
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...Continental Airlines Flies High with its Real-Time Data Warehouse John Paul Barber Schreiner University MKTG 4324, Business Intelligence Dr. Mark D. Woodhull February 16, 2015 Continental Airlines is the fifth-largest carrier in the United States as well as the eleventh largest carrier company in the world. The airline company provides service to 84 domestic and 53 international locations resulting in over 2000 daily flights. This high level of demand creates a large obligation for data and information to be properly stored and organized. Continental Airlines uses business intelligence and data warehousing to help collect their information and develop a system to accelerate decisions and construct flight schedules. Continental Airlines was founded in 1934 with a single-engine aircraft located in the southwestern United States. The company was doing well until 1994; Continental was in dire financial decline. The company had already filed for bankruptcy twice and was on the fast approach to file for the third and maybe final time. The sales of tickets began to fall due to the lack of focus on consumer concerns such as on-time percentages, baggage arrival problems, and constant overbooking. When Gordon Bethune became CEO of Continental in 1994, he initiated this plan. Continental Airlines uses a system called Go Forward that consists of several interrelated, concurrent actions Bethune selected to target the need for improvement in customer needs as well as...
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