Comparative income statements for Thesaurus Inc. are as follows:

                 ...................................................2012                         2011

Operating revenues............................$500,000.................$200,000

Operating expenses..............................120,000...................100,000

Operating income..............................$380,000.................$100,000

Gain on the sale of subsidiary ............................-...................400,000

Net income......................................$380,000.................$500,000

Required

The president and management believe that the company performed better in 2012 than it did in

2011. Write the president's letter to be included in the 2012 annual report. Explain why the company is financially sound and why shareholders should not be alarmed by the reduction in income in a year when operating revenues increased significantly.