will continue to get bigger and better for the rest of the decade." We are surprised to hear so many negative views.
"We believe many pessimistic views on new supply are inaccurate. "On the whole, we see strong demand and reasonable-to-low inventories," said Lipton. Meanwhile, Lipton said world polyethylene markets remain strong, particularly in Asia, where the company has made recent shipments. In breaking down its finances, Nova said its fourth-quarter loss from operations, excluding the restructuring charge, was $12 million, against a net profit of $83 million in the 2006 third quarter. "Our major bankers see the writedown as a positive move and support the direction we have taken, said Larry MacDonald, the company's senior vice-president and CFO.
WRITEDOWN IN PREMIUM FULL
dollars, said three-month revenues rose to US$1.6 billion from about $1.4 billion.įor the full year, the company reported a net loss of $703 million, nearly seven times its loss of $101 million for 2005. The latest red ink compares with a net loss of $66 million or 80 cents a share for the 2005 fourth quarter. The maker of styrene and olefins – the building blocks of numerous plastic products – reported early Wednesday it lost $9.46 a share for the three months ended Dec. He said the board of the Canadian-American chemical and plastics producer approved the non-cash, after-tax charge Tuesday night. We've stopped the bleeding," president and CEO Jeff Lipton told analysts on a conference call Tuesday.
(TSX: NCX) has posted a huge US$781-million loss in the fourth quarter after taking a $772-million restructuring writedown. When write-downs occurred, many financial firms needed to raise capital from other sources to maintain their minimum capital obligations.Īs a result, companies that could not raise money by selling stock, new debt, or assets, were forced into bankruptcy or forced mergers when their assets could no longer cover their liabilities.PITTSBURGH – After seeing its styrenics business unit melt away, beleaguered Nova Chemicals Corp. Thus a real estate write-down, in our example, can be caused by either a negative change in the overall macro environment, or a micro economic occurrence such as building deterioration.Ĭhanges in book values caused by write-downs were at the heart of financial company failures caused by the sub-prime crisis. If market conditions change, the firm writes down the book value of the holding to adjust the value to current market conditions. When preparing quarterly financial updates, insurance firms reevaluate the value of their real estate holdings. For illiquid investments such as real estate, book value is calculated by analyzing current market conditions, taking into consideration rental rates, the values of similar buildings, as well as current interest rates. Insurance companies often need to write down assets since they must maintain a certain stated level of capital compared to their portfolio of potential liabilities. How a Write-Down WorksĪ write-down can be processed whenever a firm readjusts their balance sheet numbers which typically happens when a company files their quarterly earnings. A write-down is the opposite of a write-up. A write-down is the accounting term used to describe a reduction in the book value of an asset due to economic or fundamental changes in the asset.
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