Fluent Essays

2000 words APA references citation within 24 hours please BEM3033  BEM3033 UNIVERSITY OF EXETER BUSINESS SCHOOL AUGUST 2021 STRATEGIC MANAGEMENT Module Convenor: Michael Mathews Intended duration of paper: 3 weeks Duration: Coursework Assessment: 2,000 words excluding references (+/-10\%) Answer ALL of the questions on the following page Materials to be supplied: None Materials to be supplied on request: None Due Date: 9th August 2021 Page 2 of 2 BEM3033   This assessment for BEM3033 concerns the international hotel and accommodations firm InterContinental Hotel Group (IHG). You have been provided with a detailed case study of the firm. Using the information in the case study you must provide a 2,000 word (+/- 10\%) management report that contains the following three specific sections: i) Using module models, produce a Situational Analysis describing IHG’s current competitive environment, identifying what you consider to be the complex but tractable problems and truly wicked or soft problems currently facing IHG and the wider International Hotel Industry. ILOs 1, 2 & 6. (30 marks) ii) Provide a detailed critical assessment of IHG’s core and functional competences, commenting on IHG’s preparedness for countering the identified critical factors. ILOs 3 & 4. (35 marks) iii) From your response to question one (i) above, provide a recommendation for ONE business, corporate or international strategy that IHG should focus on. Provide a full and detailed justification for the option and a brief discussion of the implications for IHG’s functional capabilities to explain how this strategy will be implemented. ILO 4 & 5. (35 marks) Guidance note: The management report that you produce must be aimed at a Board level audience within the InterContinental Hotel Group. Hence you can assume the readers have detailed knowledge of the firm and that repetition of detail from the case study is not required. END OF PAPER Page 1 of 17 Case Study The InterContinental Hotel Group The Intercontinental Hotel Group (IHG), is the very recent face of a long history of corporate mergers, acquisitions and takeovers. The roots of IHG go as far back as 1777 with the founding of Bass Brewery in Burton Upon Trent by William Bass. Bass who had originally ran a dray operators’ business, transporting beer from breweries to public houses through the early 1770’s, discovered that the natural spring waters in Burton Upon Trent, were ideal for producing pale ales. On selling his dray business to the Pickford family, William Bass found that the pale ale he brewed was becoming popular. So popular that within a short period of time he was exporting the pale ale all over the world. In 1888, William Bass patented the famous red triangle trademark which is credited as one of the world’s first registered trade-mark. By 1877 Bass Breweries were brewing over 1,000,000 barrels of beer annually, transporting their beer throughout the British Empire and beyond. Throughout the early 20th century, Bass continued to expand and grow its empire, purchasing breweries across the United Kingdom. In 1996, Bass merged with Charrington United Breweries to become Bass Charrington, the biggest brewing company in the UK and one of the largest breweries in the world. The Beers Orders. By the end of the 1980’s, the UK beer brewing and retail distribution industry was dominated by six companies; Bass, along with Whitbread, Grand Metropolitan, Courage, Scottish and Newcastle and Allied Breweries. A Competition Commission enquiry was initiated to investigate complaints of price fixing and anti-competitive practices amongst the breweries that controlled their own public house outlets; or tied houses. The commission found that the vertical integration adopted by large breweries was indeed anti-competitive and unfairly limited consumer choice by restricting market entry to new breweries. As a result, legislation, otherwise known as the Beer Orders, limited brewery-public house ownership to a maximum of 2000 public houses per brewery and allowed tied public houses to offer beers and other alcoholic drinks brewed by third party organisations. Page 2 of 17 Holiday Inn In 1988, in an attempt to diversify its business and reduce the impact of the Beer Orders on shareholders, Bass Breweries bought the American owned Holiday Inns organisation. The Holiday Inn company was founded in the US state of Tennessee by Kemmon Wilson, a native of Tennessee who believed that the roadside motel segment of the accommodation industry could be improved with a standardised management and operations structure. Established in 1952 with the aim of providing clean, family friendly and easily accessible accommodation, Holiday Inn grew rapidly from its humble beginnings of 1 hotel in 1952 to over 1,000 Holiday Inns’ by 1968. In the late 1960’s Holiday Inn began franchising its business model and expanding into healthcare and nursing home accommodations, TV shows and theme park accommodation. The 1980s saw Holiday Inn as a profitable organisation with its brands, Embassy Suites, Crowne Plaza, Homewood Suites, Hampton Inns and the casino hotels Harrah’s Entertainment with over 2000 properties. While Holiday Inn brands; Embassy Suites, Homewood Suites and Hampton Inns were retained by the original shareholders, Bass added to the Holiday Inn portfolio with the brands Holiday Inn Staybridge and Holiday Inn Express. Pan American Airlines and InterContinental Hotel Group. Juan Trippe, an American entrepreneur who founded Pan American Airlines in 1927 as an international passenger airline company, developed the Intercontinental Hotel Group in 1947 with the opening of the luxury Belem Hotel in Brazil. Trippe saw the hotel brand as a means of providing accommodation for airline passengers in many of its national and international destinations. At that time, airline travel was afforded by business travellers and the wealthier classes’, so the InterContinental brand was positioned as a luxury hotel experience. Throughout the 1950’s and 1960’s Trippe canvassed the Civil Aeronautics Board, who regulated US domestic airline routes, to allow Pan Am to access and compete for internal routes, but was continually blocked by American Airlines, United Airlines and other domestic operators. Following the oil crisis of the early 1970s, Pan Am struggled with the increasing cost of operating. This was compounded by the de-regulation of the US and Global Airline Industry in 1978, with Pan Am finding itself having to compete for its international routes against other American airline companies. With an accumulated 10-year loss of $350 million and debts approaching $1 billion, the then Pan Am President William T. Seawell, a former American Airlines Vice President, sold the Intercontinental Hotels holding company to Grand Metropolitan, for $450m in an effort to restructure and turnaround the company. Grand Metropolitan, a UK based brewing, gaming and hotel conglomerate, on later merging with Guinness (and forming Diageo), sold IHG to a Japanese finance company Saison who retained the hotel head office in London. On implementing a portfolio restructuring exercise in 1997, Saison placed the IHG group up for sale again. Despite a heavily contested bidding, by Marriott group and Ladbrooks plc and Hilton Hotels consortium, IHG’s 215 hotels (a combination of owned, leased and operated in partnership), sold the hotel group to Bass Breweries in 1998 for $2.5bn. Six Continents. In 2000, Bass sold off the remainder of its brewing properties and the rights to its trade name and marque to the Belgium brewer, Interbrew, now Anheuser-Busch InBev, while retaining its hotel brand Page 3 of 17 and the remaining pub holdings owned in the UK and the USA. In 2001, Bass changed its name to Six Continents. In 2001, Six Continents continued to focus on aggressive expansion. That same year, Six Continents bought the Posthouse Hotels Group, comprising 79 hotels, from the UK based contract catering giant, Compass Catering for £810m; rebranding those hotels to Holiday Inn. In 2003, Six Continents de- merged its public house business into Mitchell and Butlers, with the remaining hotel and soft drinks business (i.e. Britvic), being renamed as Intercontinental Hotel Group (IHG). InterContinental Hotels Group Following the announcement in October 2002 of the separation of Six Continents, IHG initiated a major restructuring. The focus was on four key areas in order to improve their operating performance. These included: • redesigning the organisation to align it behind the new strategic priorities and speed up decision making; • changing the management to ensure the right people were in the right jobs; • reducing the cost base through eliminating unnecessary work and streamlining processes; • optimising capital deployment through a rigorous hotel by hotel review to determine appropriate levels of ownership and capital expenditure and customer focus. This change programme coincided with probably the second most difficult period experienced by the hotel industry in living memory. Sluggish economies around the world, the threat of war in Iraq followed by war, the advent of Severe Acute Respiratory Syndrome (‘SARS’) and the reluctance of Americans to travel, particularly to France, all contributed to low levels of economic growth. IHG Business Model and Portfolio Development The intended aim of restructuring was to achieve an agile and responsive business model. This involved the divestment of hotels considered not to fully reflect the IHG market positioning and included a process of ‘sell and lease back under arrangement’. Using a combination of direct ownership and management, franchise agreement, and manage and operate, IHG moved to a more ‘asset light’ business model, an increasingly common business model in the hotel industry. This model comprised of three forms. In the managing and operating model, IHG would be contracted by owners of the hotel, to operate and manage the property. This ensured that construction companies and Retail Enterprise Investment Trusts (REITs) retain assets that appreciate in value while not having the responsibility for operating the property. Alternatively, IHG would sell off their owned hotel properties to investment speculators and would then be contracted by the investment speculators to operate and run the hotel under the appropriate IHG brand. In a typical franchise agreement, hotel owners contracted with IHG to promote their hotel through the IHG brand. Observing IHG’s quality management and operations systems will form the basis of the contractual agreement, with IHG promoting the hotel as part of its overall product brand portfolio. The current portfolio consists of hotels occupying 4 distinct market segments: • The Suites portfolio comprises of Staybridge Suites, Atwell Suites, Candlewood Suites, and Holiday Inn Club Vacations. The suites concept was aimed at a ‘home away from home’ theme that provided the guest with a first-class self-catering, extended stay facility. • The Essentials portfolio comprises of Holiday Inn, Holiday Inn Express and Avid Hotels. The provision here was based on functionality with a ‘work away from home’ theme. This Page 4 of 17 encompassed a key developmental phase of IHG’s Guest Reservation System (GRS), enabling hotels to tailor stays for guests and enable them to purchase differentiating experiences. • The Premium portfolio comprises Voco Hotels, Crown Plaza Hotels and Resorts, EVEN Hotels and the HUALUXE Hotels and Resorts. These hotels generated the highest revenue earning capability, providing the most flexible of brands for owners, with diverse markets ranging from the 470-room in Dubai to the 50-room Franklin Hotel in Manhattan. This focussed on enhancing the originality of an existing property and, when it made its debut in the Americas, it generated significant momentum. • The Luxury and Lifestyle range of hotels included the Six Senses Hotels Resorts and Spas, Regen Hotels, InterContinental Hotels and Resorts, Hotel Indigo and Kimpton Hotels & Restaurants. The focus was ensuring that property retained a distinct character but that the properties all offered engaging service and distinctive local personalities. Every property had a spa-inspired bathroom, inviting guest rooms, complimentary Wi-Fi, 24-hour business services, 24-hour fitness centres, creative meeting space, and an onsite bar/restaurant focused on local flavours. In 2005, the IHG Board of Directors commissioned a benchmark study to compare IHG’s CSR activities and performance with a number of companies. At that time, the CSR performance of a number of international companies outside the hotel sector raised public concerns around slave labour and poor environmental practices. The benchmark study results raised concerns motivating IHG into: • conducting a thorough internal and external stakeholder analysis from which to develop an appropriate CSR strategy that reduced risks and enabling them to maximise opportunities; • reviewing their business ethics policy across all business units; • developing a Group-wide environmental policy and practice; • reviewing the way data is gathered and reported, especially in the areas of energy efficiency and human resources; and • developing training and communication systems to implement the revised CSR strategy By the end of 2005, IHG had taken the Britvic segment to IPO, retaining the controlling share. They had also sold the major interest in 144 hotels, generating aggregate proceeds for the group of £2.5bn. Of the 144 hotels sold, 126 remained within the brand. A further 31 hotels owned by IHG were on the market expecting to achieve £0.6bn. They had also achieved the distinction of being the world’s largest international hotels group with a further 186,000 rooms in pipeline and a loyalty programme, developed in 2002, as the largest in the industry. IHG Process and Concept Innovation With the launch of the Hotel Indigo brand in 2004, IHG marked a distinct move away from the traditional large-scale luxury hotel. The Indigo concept was aimed at providing local experiences in boutique hotels in city centres. The brand has proved particularly popular in the Americas. Green Engage launched in 2009, was designed to help hotels reduce energy costs, with hotels achieving energy savings of up to 25\%. The system, which received a LEED (Leadership in Energy and Environmental Design) endorsement, allows hotels to track, measure and report on their energy, water and waste, and recommends actions that will cut energy bills without compromising the guest experience. Over 1,500 IHG hotels use Green Engage with 2,000 individual registered users. Energy is the second biggest cost to the hotel industry with the average IHG hotel spending over $500,000 on energy usage each year. Page 5 of 17 In 2015, IHG launched content-rich websites for five brands which provide a more engaging booking experience. Their award-winning mobile app piloted Mobile Folio a feature that enabled guests to view hotel bills in real time and to make in-stay service requests. In April 2015, IHG launched the second phase of its strategic relationship with Amadeus; a global company specialising in airline scheduling, hotel reservations and data management. The aim was to develop a next-generation, cloud-based Guest Reservation System (GRS) to replace IHG’s HOLIDEX, IHG’s proprietary reservation system. The state-of-the-art guest reservation solution will be a first for the hotel industry: “Technological innovation is fundamental to driving superior experiences for our guests before, during and after they stay with us,” said Richard Solomons, CEO of IHG. “IHG has a long track record of innovating through technology to ensure we meet the needs of current and future guests, starting with being the first company to offer online bookings, having the highest rated app in the hotel and travel industry, and offering mobile check-in and check-out. Our collaboration with Amadeus will build on this heritage and will enable IHG to shape the future technological foundations of our industry. The next-generation guest reservation system we will create with Amadeus will deliver a powerful global platform for hotels to manage guest interaction, will be intuitive for hotel teams, and will help us accelerate our work to revolutionize and personalize the guest experience through technology. (Source: https://www.hotelmanagement.net, 2015) IHG and the Global Hotel Industry As of 2020, of IHG’s 886,000 hotel rooms, 71\% were franchised with 28\% managed and 1\% owned or leased. 514,000 (58\%) rooms were located in the Americas with 228,000 (26\%) located in EMEAA countries and 144,000 (16\%) located in Greater China. Of the 886,000 rooms worldwide, 10\% constituted the luxury provision with 22\% aimed at the Upscale market segment and 68\% occupying the midscale/Upper Midscale market segments. Figure 1. Owned & Leased, Franchised and Managed Hotels, 2008 – 2019. Source: Statista IHG Profile, 2020 3,585 3,799 3,783 3,832 3,934 3,977 4,096 4,219 4,321 4,433 4,615 4,870 585 622 639 637 658 711 735 806 845 907 965 1,007 16 17 15 11 10 9 9 7 8 8 23 26 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 N U M B E R O F H O T E LS Franchised Managed Owned and leased Page 6 of 17 Figure 2. IHG growth by rooms, 2008 – 2019. Statista, IHG Company Profile. 2020. Pipeline rooms are those hotel rooms either currently under construction or in the process of being contractually negotiated., As of 01/01/2021, IHG had 272,000 rooms in the construction pipeline. 93,000 of those room (34\%) are located in Greater China, with 103,000 rooms (38\%) in the Americas and 76,000 rooms (28\%) in Europe, the Middle East, Africa and Asia (EMEAA). Figure 3: Hotel pipeline construction projects, Worldwide 2021. Statista. Hotel Industry Profile. 2020. Average Daily Rates (ADR) in the Hotel Industry tends to change throughout the year as they are closely linked to hotel occupancy rates. When the demand for rooms is high, the ADR increases, maximising revenue generation for the hotel (revenue management). Specific regions are visited more frequently during certain times of year. For instance, hotel rooms in the Americas were rented more frequently during the summer months, compared to the colder winter months in 2019. 54,736 56,121 58,429 57,598 57,314 60,103 61,235 62,040 63,650 65,998 69,281 70,981 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 N U M B E R O F H O T E L R O O M S 5,216 3,375 372 333 300 0 1,000 2,000 3,000 4,000 5,000 6,000 United States China United Kingdom Indonesia Germany N U M B E R O F P R O JE C T S I N P IP E LI N E Page 7 of 17 While the number of worldwide rooms available was quick to recover following the 2008 recession, the average daily room rate (ADR) charge remained fairly consistent until 2014 when all markets except the Americas market began to falter early into 2019. As a result of the coronavirus (COVID-19) pandemic the hotel industry has taken a hit in 2020. In May 2020, the ADR of hotels in Europe was 85.49 U.S. dollars. Daily hotel prices were lowest in the Asia Pacific region during the same month. Prior to the coronavirus (COVID-19) pandemic, the global forecast for ADR was for an increase through 2020 in to 2022. Asia`s rates were predicted to be higher than the global average, increasing by about three percent. Latin America was expected to see a smaller increase of about 1\%, due to the more modest growth in demand within this region. Figure 4: ADR of the hotel industry worldwide 2008-2019, by region. Statista. Hotel Industry Profile. 2020. The occupancy rate of a hotel is the percentage of available rooms that are occupied or being rented over a given time. Occupancy, along with average daily rate (ADR) and revenue per available room (RevPAR), are important indicators of a hotel`s performance. The hotel industry in the United States accounted for 218 billion U.S. dollars in revenue in 2018. While the ADR declined, the occupancy percentage rate for hotels worldwide saw a steady increase representing both an increased demand for rooms and stiff competition to attract hotel guests. As a result of the coronavirus (COVID-19) pandemic the hotel industry saw an immediate decline in 2020. In May 2020, the hotel occupancy rate in Europe saw the most dramatic effects of the virus, with occupancy rates of just 13.3 percent - compared to the previous year this figure was 82.3 percent lower. 60 80 100 120 140 160 180 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 A V E R A G E D A IL Y R A T E I N U .S . D O LL A R S Asia Pacific Americas Europe Middle East / Africa Page 8 of 17 Figure 5: Occupancy rate of the hotel industry worldwide 2008-2019, by region. Statista. Hotel Industry Profile. 2020. In its annual report for 2020, IHG reported a halving of group revenues of $2.39 billion while revenue per available room fell by 52.5 per cent, with the UK down 65 per cent, because of hotel closures and travel restrictions. The Europe and Middle East region was the worst performer in the final quarter, with revpar down by 70.5 per cent, while Greater Chinas recovery was more advanced, with revpar lower by 18.2 per cent. The Americas fell by 49.5 per cent, buoyed by the domestic focus of the Holiday Inn brand. In an interview with the Financial Times, Keith Barr, the current CEO stated: Covid-19 had taken a heavy toll on demand across the sector and the return to pre-pandemic levels would be a multi-year process, depending on the progress of global vaccine rollouts and the lifting of restrictions. He said that the company had continued to outperform the industry in its key markets it had made an operating profit last year of $219 million, down 75 per cent on 2019. This has been the toughest time this company has ever seen. The pre-tax loss for the year of $-207 million compared with a pre-tax profit in 2019 of $427 million meant that there was no dividend. The group said that it had started a review into the future of approximately 200 Holiday Inn and Crowne Plaza hotels that are at risk because of customer satisfaction and property condition issues. IHG has a global workforce of about 350,000 people, mostly employed by its hotel partners, although as recently as December it was quoting a figure of 400,000. That implies job losses of 50,000, although Barr stated that ‘many would eventually be brought back’. Several of its hotels in London, including its premium Park Lane property, remain closed. In an interview with CNBC (Keith Barr CNBC 12/8/20), Barr stated The hotel industry will not go back to full employment for three years, I would estimate,. Its overall hotel portfolio for the year grew by 0.3 per cent, slower than the 2.9 per cent growth in the third quarter. IHG signed 56,000 new rooms in 360 hotels, a year-on-year decline of 43 per cent, lifting the total to 272,000 rooms in 1,815 hotels. Shares of IHG, which have proved resilient over the past year, fell by 86p, or 1.6 per cent, to £52.26 Source: Times Newspapers Limited. 24 February 2021 50\% 55\% 60\% 65\% 70\% 75\% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 O C C U P A N C Y R A T E Asia Pacific Americas Europe Middle East / Africa javascript:void(0); https://www.bing.com/videos/search?view=detail&mid=DFC3426E88D17B5D03F1DFC3426E88D17B5D03F1&q=IHG+Keith+Barr+interview&shtp=GetUrl&shid=ddf86d32-3353-472a-9f12-3b0d88ae9c62&shtk=SUhHIENFTyBLZWl0aCBCYXJyIG9uIHRoZSBob3RlbCBpbmR1c3RyeSdzIG91dGxvb2s\%3D&shdk=SW50ZXJDb250aW5lbnRhbCBIb3RlbHMgR3JvdXAgQ0VPIEtlaXRoIEJhcnIgam9pbnMgXCJTcXVhd2sgQWxsZXlcIiB0byBkaXNjdXNzIHRoZSBmYWxsb3V0IG9mIGNvcm9uYXZpcnVzIGluIHRoZSBob3RlbCBhbmQgbGVpc3VyZSBpbmR1c3RyeS4gRm9yIGFjY2VzcyB0byBsaXZlIGFuZCBleGNsdXNpdmUgdmlkZW8gZnJvbSBDTkJDIHN1YnNjcmliZSB0byBDTkJDIFBSTzogaHR0cHM6Ly9jbmIuY3gvMk5HZUl2aSBCOyBTdWJzY3JpYmUgdG8gQ05CQyBUVjogaHR0cHM6Ly9jbmIuY3gvU3Vic2NyaWJlQ05CQ3RlbGV2aXNpb24gQjsgU3Vic2NyaWJlIHRvIENOQkM6IGh0dHBzOi8vY25iLmN4IC4uLg\%3D\%3D&shhk=L\%2FM\%2FuquiLt1wtPauh1M\%2Bio3VlDauQQj4Gln1bwnIUts\%3D&form=VDSHOT&shth=OSH.H4zP4TZdeD2Lh5rmmoAwUw Page 9 of 17 Future Hotel Trends. A number of key trends are significantly impacting the Hotel Industry. Developments in digital technology, combined with evolving and ever-changing consumer needs, are transforming guest behaviours and creating a more dynamic competitive environment. Technology continues to have a multifaceted and substantial impact on the industry. The prevalence of mobile devices and the accessibility of the Internet continue to change how guests engage with, and what they expect from, accommodation providers across the entire guest journey. Technology is enabling guests to book their travel with greater control and immediacy and share their travel experiences in more practical and engaging ways. A growing number of guests now book their rooms within 24 hours of their arrival. Enabled by technology, travel companies, hotels, review sites and online travel agents have been able to grow their presence online, providing travellers globally with access to compelling content, price transparency and the ability to compare a wealth of travel options. Technology is fuelling the growth of alternative lodging providers, who have also been effective at opening up a large supply of private urban accommodation by developing and marketing online distribution platforms. As Apple Pay made booking travel on mobile devices easier – threats to established players have emerged and continued to establish a strong presence and powerful impact. As younger travellers become loyal to their ‘over the air’ booking application, in lieu of an airline or hotel, it makes securing regular and repeat customers difficult. Airbnb, in particular, has had a direct impact on hotel occupancy rates with 193 million nights booked and gross revenue of $3,300m for the year ending 31/12/2020. While Airbnb poses a significant competitive threat to the industry as a whole, hotel booking apps present an increasingly significant threat to the REVPar and ADR achieved by traditional hotel businesses. Apps such as Hotel Tonight, Hotel.com, Booking.com, and others, provide an up-to-the- minute view of hotel room charges, so guests are able to choose the hotel stays that present the cheapest available rate. Room pricing capabilities are now at the forefront of competitive rivalry and form a key strategic resource for hotels because the Internet has made price transparent and yield management more challenging as a result. AI, robot concierge and check in, VR room experiences and in room voice activated controls provide cutting edge guest experiences while advances in big data and data analytics are enabling hotel companies to develop richer insights into guest needs, providing more personalised services and tailored offers. However, the threat of cyber-crime is continuing to increase, placing greater demands on cybersecurity and information and data management systems, with global organisations at greatest risk. Page 10 of 17 Exhibit 1 InterContinental Hotel Group Income Statement (Please see ELE for spreadsheet version) Period End Date 2020 2019 2018 2017 2016 Annual Income Statement: (GBP) Net Sales or Revenue 1,866,878,290 3,626,917,472 3,252,576,567 3,164,256,899 1,271,029,433 Cost of Goods Sold 1,483,209,067 2,651,796,371 2,428,370,515 2,290,689,043 437,263,770 Depreciation and Amortization 85,779,704 90,927,691 86,245,401 60,567,371 71,148,003 Gross Income 297,889,519 884,193,410 737,960,651 813,000,485 762,617,660 Selling, General and Administrative Expense 253,440,035 258,673,604 233,237,563 261,682,104 243,830,136 Operating Income 44,449,484 625,519,806 504,723,088 551,318,381 518,787,524 Unusual Expense (Income) – Net 172,339,224 117,578,911 81,745,641 53,578,828 21,492,626 Nonoperating Income (Net) - Total 32,752,252 13,325,606 14,249,240 68,332,419 11,116,880 Interest Expense 112,293,431 94,063,129 74,996,001 59,014,362 68,924,628 Pretax Income 207,430,919- 427,203,372 362,230,686 507,057,610 439,487,150 Income Taxes 15,596,310- 122,282,067 98,994,721 89,298,047 128,955,756 Equity in Earnings of Affiliated Companies 10,917,417 2,351,578- 749,960- 2,329,514 1,482,250- Consolidated Net Income 202,752,026- 302,569,727 262,486,004 420,089,077 309,049,144 Minority Interest 783,859 749,960 776,505 2,223,375 Net Income Before Extraordinary Items 301,785,868 261,736,044 419,312,572 306,825,769 Net Income 202,752,026- 301,785,868 261,736,044 419,312,572 306,825,769 EPS (Operational) 0- 2 2 2 2 Earnings per Share (Basic) 1- 2 1 2 2 Earnings per Share (Diluted) 1- 2 1 2 2 Earnings Per Share - As Reported 1- 2 1 2 2 Earnings per Share (Fully Diluted) 1- 2 1 2 2 EPS (Fiscal Year) 1- 2 1 2 2 Earnings Per Share After Extraordinary Items 1- 2 1 3 2 Earnings Per Share from Continuing Operations - Fiscal 1- 2 1 2 …