Nagy Corporation reported the following income statement in 20X1, along with a comparable income statement for 20X0, its first year of operations:

In its Form 10-K, Nagy also provided a non-GAAP metric, earnings before depreciation and one-time charges, which was a pre-tax earnings measure that excluded depreciation expense and the one-time fixed-asset impairment charge in 20X1. Nagy reported that its earnings before depreciation and one-time charges was $38 million in 20X1 versus a $4 million loss in 20X1.

Required:

Provide the reconciliation (for both 20X1 and 20X0) to the nearest GAAP counterpart that Nagy must include with its non-GAAP metric.

Transcribed Image Text:

Income Statement, 20X1 and 20xo ($in millions) 20X1 20X0 $ 350 $ 280 ( 170) (38) (22) Sales Cost of goods sold Depreciation expense Interest expense Fixed asset impairment ( 188) (40) (25) (30) (99) Other operating expenses (92) Loss before income tax benefit (32) 7 (42) 9 Income tax benefit Net income $ (25) $ (33)