Crash Course in Accounting and Financial Statement Analysis, Second Edition

Discontinued Operations

Discontinued Operations represent physically and operationally distinct segments or assets that a company has sold or is in the process of divesting in the current year.

Discontinued operations are reported net of taxes on a separate line called “Income (Loss) from Discontinued Operations” to distinguish it from core earnings “Income (Loss) from Continuing Operations” (Exhibit 5.8), and disclosed on the income statement after income from continuing operations, but before extraordinary items.

Exhibit 5.8. Income From Discontinued Operations is Reported Net of Taxes and Separately From Income Stemming From Continuing Operations

			Year ended December 31
			2004	2003	2002
REVENUES AND OTHER INCOME
	Sales and other operating revenues 1,2		$150,865	$119,575	$ 98,340
	Income (loss) from equity affiliates		2,582	1,029	(25)
	Other income		1,853	308	222
	Gain from exchange of Dynegy preferred stock		–	365	–
TOTAL REVENUES AND OTHER INCOME			155,300	121,277	98,537
COSTS AND OTHER DEDUCTIONS
	Purchased crude oil and products 2		94,419	71,310	57,051
	Operating expenses		9,832	8,500	7,795
	Selling, general and administrative expenses		4,557	4,440	4,155
	Exploration expenses		697	570	591
	Depreciation, depletion and amortization		4,935	5,326	5,169
	Taxes other than on income 1		19,818	17,901	16,682
	Interest and debt expense		406	474	565
	Minority interests		85	80	57
	Write-down of investments in Dynegy Inc.		–	–	1,796
	Merger-related expenses		–	–	576
TOTAL COSTS AND OTHER DEDUCTIONS			134,749	108,601	94,437
INCOME FROM CONTINUING OPERATIONS BEFORE ...