In December 20X4, the Board of Directors of Mead Corporation approved a plan to dispose of the company’s imaging products division. As a result, the company recognized an asset impairment loss before tax totalling $ 77,000,000. The imaging products division had incurred before- tax losses of $ 50,000,000 in 20X3 and $ 41,700,000 in 20X4.

In addition, during 20X4, the company retired an issue of bonds early. These bonds had a carrying value of $ 200,000,000 and were retired at a cost of $ 185,000,000, resulting in a pretax gain of $ 15,000,000. The company had never had such a transaction before.

The tax rate on all the above items is Mead Corporation’s average income tax rate of 20%. Assume that earnings from other sources, before income taxes, were $ 392,500,000 in 20X3 and $ 168,900,000 in 20X4. This does not include the bond retirement transaction. The average number of common shares outstanding was 62.2 million shares in 20X4 and 65.1 million shares in 20X3. Mead Corporation has no preferred shares outstanding.

Required:

Prepare the income statements for Mead Corporation for 20X3 and 20X4, beginning with income from continuing operations. Include earnings per share computations.