Notes to Consolidated Financial Statements. (Dollars in thousands, except per share amounts) NOTE 2.
Notes to Consolidated Financial Statements. 28 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To Tech Squared Inc.: We have audited the accompanying consolidated balance sheets of Tech Squared Inc. (a Minnesota corporation) and Subsidiaries as of December 31, 1998 and 1997, and the related consolidated statements of operations, comprehensive income (loss), stockholders' equity and cash flows for each of the three years in the period ended December 31, 1998. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Tech Squared Inc. and Subsidiaries as of December 31, 1998 and 1997, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 1998, in conformity with generally accepted accounting principles. XXXXXX XXXXXXXX LLP Minneapolis, Minnesota February 19, 1999 XXXX XXXXXXX INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31 1998 1997 ------------ ---------- ASSETS Current Assets: Cash and cash equivalents................................. $ 4,436,276 $ 300 Restricted cash........................................... 229,466 143,623 Available-for-sale securities............................. -- 467,438 Trade accounts receivable, less allowance for doubtful accounts of $365,000 and $180,000, respectively......... 3,387,907 2,727,883 Inventories............................................... 1,783,905 1,890,480 Prepaids and other current assets......................... 416,666 234,936 ------------ ---------- Total current assets.................................. 10,254,220 5,464,660 Property and Equipment, net................................. 499,874 346,419 Receivable From Officer/Stockho...
Notes to Consolidated Financial Statements. 6 Other Financial Information
Notes to Consolidated Financial Statements. (CONTINUED)
Notes to Consolidated Financial Statements. Summary of significant accounting policies (continued) The Company reviews its long-term assets for impairment in accordance with the guidelines of Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of," (SFAS 121). SFAS 121 requires that, when changes in circumstances indicate that the carrying amount of an asset may not be recoverable, the Company should determine if impairment of value exists. Impairment is measured as the amount by which the carrying amount of the asset exceeds the expected future undiscounted cash flows from the use and eventual disposal of the assets under review. Any write-downs are treated as a permanent reduction in the carrying value of the assets. Cash equivalents--For purposes of reporting cash flows, the Company considers ---------------- all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents. Intangible assets and costs in excess of fair value of assets purchased-- ----------------------------------------------------------------------- Intangible assets include purchased intangibles (customer lists, engineering drawings, noncompete agreements, and sales backlog). Such intangible assets and costs in excess of fair value of assets purchased are being amortized over the estimated useful lives of the assets ranging from 5 to 40 years. Income taxes--Deferred income taxes are recognized using the liability ------------ method. Under this method of accounting, deferred income taxes are recorded for the difference between the financial reporting and income tax bases of assets and liabilities using enacted tax rates and laws. Stock-based compensation--The Company generally grants stock options for a ------------------------ fixed number of shares to employees and directors with an exercise price equal to the fair value of the shares at the date of grant. The Company accounts for stock option grants in accordance with Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," and accordingly, recognizes no compensation expense for the stock option grants in which the exercise price is equal to the fair value of the shares granted. Earnings per share--Effective February 28, 1998, the Company adopted ------------------ Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings per Share," which established new standards for computing and discl...
Notes to Consolidated Financial Statements. (Dollars in Millions, Except Per Share Amounts) - ------------------------------------------------------------------------------- total amount of outstanding commitments and guarantees may not represent future cash requirements, as guarantees and commitments may expire without being drawn upon. At December 26, 1997 and December 27, 1996, Xxxxxxx Xxxxx had the following commitments and guarantees: - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- The fair value of the outstanding guarantees was $25 and $24 at December 26, 1997 and December 27, 1996, respectively. - ------------------------------------------------------------------------------- LEASES Xxxxxxx Xxxxx has entered into various noncancelable long-term lease agree- ments for premises and equipment that expire through 2024. During 1996, Mer- rill Xxxxx incurred a pretax charge of $40 million related to the resolution of Olympia & York's bankruptcy that affected Xxxxxxx Xxxxx'x long-term sub- lease agreements in the World Financial Center Headquarters ("WFC"). Xxxxxxx Xxxxx has also entered into various noncancelable short-term lease agreements, which are primarily commitments of less than one year under equipment leases. At December 26, 1997, future minimum rental commitments under noncancelable leases with initial or remaining terms exceeding one year are presented below: - ------------------------------------------------------------------------------- WFC OTHER TOTAL ------ ------ 1998 $ 125 $ 262 $ 387 1999 140 260 400 2000 144 238 382 2001 144 213 357 2002 150 178 328 2003 and thereafter 1,936 726 2,662 ------ ------ ------ Total $2,639 $1,877 $4,516 ====== ====== ====== - ------------------------------------------------------------------------------- The minimum rental commitments shown above have not been reduced by $824 of minimum sublease rentals to be received in the future under noncancelable sub- leases. Certain leases contain renewal or purchase options or escalation clauses providing for increased rental payments based upon maintenance, utili- ty, and tax increases. Net rent expense for each of the last three years is presented below: - ------------------------------------------------------------------------------- 1997 ----- 1996 ----- 1995 ----- Rent expense $ 449 $ 420 $ 399 Sublease revenue Net rent expense (104) ----- $ 345 ===== (48) ----- $ 372 ===== (87) ----- $ 312...
Notes to Consolidated Financial Statements. 4 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations............................................... 7 Item 3. Quantitative and Qualitative Disclosures About Market Risk........................................................ 19 PART II. OTHER INFORMATION Item 1. Legal Proceedings........................................... 20 Item 2. Changes in Securities and Use of Proceeds................... 20 Item 3. Defaults Upon Senior Securities............................. 21 Item 4. Submission of Matters to a Vote of Security Holders......... 21 Item 5. Other Information........................................... 21 Item 6. Exhibits and Reports on Form 8-K............................ 22 SIGNATURE................................................... 23 i 3 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS INTUITIVE SURGICAL, INC. THREE MONTHS ENDED SIX MONTHS ENDED -------------------- -------------------- -------- -------- -------- Sales.............................................. $ 5,127 $ 3,635 $ 8,060 $ 3,635 Cost of sales...................................... 3,503 3,243 6,035 3,243 ------- -------- -------
Notes to Consolidated Financial Statements. 37 REPORT OF ERNSX XXX YOUNG LLP, INDEPENDENT AUDITORS The Board of Directors and Stockholders Heartport, Inc. We have audited the accompanying consolidated balance sheets of Heartport, Inc. as of December 31, 2000 and 1999, and the related consolidated statements of operations, stockholders' equity (net capital deficiency), and cash flows for each of the three years in the period ended December 31, 2000. Our audits also included the financial statement schedule listed in the Index at Item 14(a). These financial statements and schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Heartport, Inc. at December 31, 2000 and 1999, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2000, in conformity with accounting principles generally accepted in the United States. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.
Notes to Consolidated Financial Statements. LOANS (Continued) Credit Risk Management (Continued) Credit quality and trends in the loan portfolio segments are measured and monitored regularly. Detailed reports by product, collateral, accrual status, etc., are reviewed by the Chief Credit Officer, the Officers Loan Committee, and the Directors Loan Committee. The following categories are utilized by management to analyze and manage the credit quality and risk of the loan portfolio: Pass - includes obligations where the probability of default is considered low. Special Mention - includes obligations that exhibit potential credit weaknesses or downward trends deserving management’s close attention. If left uncorrected, these potential weaknesses may result in the deterioration of the repayment prospects or credit position at a future date. These loans are not adversely classified and do not expose the Company to sufficient risk to warrant adverse classification. Substandard - includes obligations with defined weaknesses that jeopardize the orderly liquidation of debt. A substandard loan is inadequately protected by the current sound worth and paying capacity of the borrower or by the collateral pledged, if any. Normal repayment from the borrower is in jeopardy although no loss of principal is envisioned. There is a distinct possibility that a partial loss of interest and/or principal will occur if the deficiencies are not corrected. Loss potential, while existing in the aggregate amount of substandard loans, does not have to exist in individual loans classified substandard. Doubtful - includes obligations with all the weaknesses found in substandard loans with the added provision that the weaknesses make collection of debt in full, based on currently existing facts, conditions, and values, highly questionable and improbable. Serious problems exist to the point where partial loss of principal is likely. The possibility of loss is extremely high, but because of certain important, reasonably specific pending factors that may work to strengthen the loan, the loans’ classification as loss is deferred until a more exact status may be determined. There were no loans with a doubtful rating in the Company’s loan portfolio as of December 31, 2016 and 2015. Loss - includes obligations incapable of repayment or unsecured debt. Such loans are considered uncollectible and of such little value, that continuance as an active asset is not warranted. Loans determined to be a loss are charged-off at the date of ...
Notes to Consolidated Financial Statements. 4 ITEM Management's Discussion and Analysis of Financial Condition 2. and Results of Operations................................. 9 ITEM Quantitative and Qualitative Disclosures about Market 3. Risk...................................................... 17 PART II. OTHER INFORMATION
