SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) October 26, 2005
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INTERNATIONAL FLAVORS & FRAGRANCES INC.
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(Exact Name of Registrant as Specified in Charter)
New York 1-4858 13-1432060
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(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
521 West 57th Street, New York, New York 10019
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (212) 765-5500
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Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 2.02. Results of Operations and Financial Condition
Attached and being furnished hereby as Exhibit 99.1 is a copy of a press
release of International Flavors & Fragrances Inc. ("IFF" or the "Company")
dated October 26, 2005 reporting IFF's financial results for the third quarter
and nine months ended September 30, 2005.
The discussion of the Company's historical results and its commentary
regarding expected future results include and, where indicated, exclude the
impact of sales and operating results attributable to certain non-core
business disposed of in 2004, the impact of certain restructuring and other
charges recorded in 2004, the impact of the Company's intended
repatriatization of certain extraordinary dividends from foreign
subsidiaries under the American Jobs Creation Act of 2004, as well as the
effects of exchange rate fluctuations. Such information is supplemental to
information presented in accordance with generally accepted accounting
principles (GAAP) and is not intended to represent a presentation in
accordance with GAAP. In discussing its historical and expected future
results and financial condition, the Company believes it is meaningful for
investors to be made aware of and to be assisted in a better understanding
of, on a period-to-period comparative basis, the impact of sales and
operating results attributable to the businesses disposed of, the relative
impact of the restructuring and other charges, the impact of such
repatriatization of extraordinary dividends, as well as ongoing exchange
rate fluctuations on the Company's operating results and financial
condition. The Company believes that this additional non-GAAP information
provides investors with an overall perspective of the period-to-period
performance of the Company's core business. In addition, management
internally reviews each of these non-GAAP financial measures to evaluate
performance on a comparative period-to-period basis in terms of absolute
performance, trends and expected future performance with respect to its
core continuing business.
Item 9.01. Financial Statements and Exhibits
(c) Exhibits
99.1 Press Release of International Flavors & Fragrances Inc., dated
October 26, 2005.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
INTERNATIONAL FLAVORS & FRAGRANCES INC.
Dated: October 26, 2005 By: /s/ Douglas J. Wetmore
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Name: Douglas J. Wetmore
Title: Senior Vice President and
Chief Financial Officer
FOR IMMEDIATE RELEASE
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IFF REPORTS THIRD QUARTER RESULTS
---------------------------------
UPDATES 2005 GUIDANCE
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New York, N.Y., October 26, 2005 ... International Flavors & Fragrances Inc.
(NYSE: IFF) ("IFF" or "the Company") reported earnings per share for the third
quarter 2005 of $.72 compared to $.44 in the prior year quarter. The 2005
third quarter results include a net tax benefit of $23.3 million ($.24 per
share) relating to the Company's intention to repatriate, in 2005,
approximately $250 million of dividends from foreign subsidiaries under the
provisions of the American Jobs Creation Act of 2004 ("AJCA"). On an
as-adjusted basis, excluding the tax impact noted above, 2005 third quarter
earnings per share would have been $.48. The 2004 third quarter results
include $20.0 million ($12.7 million after tax or $.14 per share) of
restructuring and other charges related to the sale of certain European fruit
business assets, the closure of the Company's Dijon, France manufacturing
facility and other related reorganization activities. On an as-adjusted basis,
excluding both the sales and operating results of the fruit business and the
effects of the charges related to the disposition thereof, 2004 third quarter
earnings per share would have been $.58.
Third quarter 2005 sales totaled $493.1 million, declining 3% in comparison to
the prior year in both local currency and reported dollars. Fragrance and
flavor sales decreased 1% and 3%, respectively, in both local currency and
dollars.
Flavor sales in the 2005 quarter were impacted by the disposition, in the
second half of 2004, of the Company's European fruit preparations business. On
an as-adjusted basis, excluding $10.6 million in sales attributable to the
fruit business from the 2004 third quarter, flavor sales for the current
quarter would have increased 2% in dollars and 1% in local currency. Flavor
sales, most notably in North America and Europe, were also unfavorably
impacted by lower selling prices for naturals, mainly vanilla.
Fragrance sales were led by fine fragrance which increased 1% in both local
currency and dollars; the fine fragrance performance reflected the benefit of
new product wins. Chemical sales decreased 5% in both local currency and
dollars while sales of functional fragrances were flat in both local currency
and dollars.
"Our growth with IFF's largest global accounts gives me confidence that our
long-term strategic initiatives will enable us to successfully manage through
the current challenging pricing environment," said Richard A. Goldstein,
Chairman and Chief Executive Officer of IFF. "Year-to-date, local currency
sales to our 5 largest customers have grown by over 6%, following 7% growth
for the full year 2004. Innovative technologies, combined with our
collaborative approach to working with our customers will prove to be
important differentiators. With our customer partnerships and continued
technology leadership, we are well positioned to achieve our goals and drive
value for IFF shareholders."
Sales performance by region for the 2005 third quarter compared to the prior
year quarter follows:
- North America fragrance and flavor sales declined 2% and 10%,
respectively; in total, regional sales declined 5%. Fine fragrance and
aroma chemical sales increased 6% and 1%, respectively, while
functional fragrances decreased 8%. New fragrance wins drove the fine
fragrance performance.
- European fragrance and flavor sales decreased 3% and 14%,
respectively; in total, regional sales declined 7%. Local currency
fragrance sales decreased 3%; aroma chemical sales decreased 10%,
functional fragrance sales were flat, while fine fragrance sales
increased 1%. Local currency flavor sales declined 13%, mainly as a
result of the disposition of the fruit preparations business. On an
as-adjusted basis, excluding sales attributable to this business from
the 2004 results, 2005 flavor sales would have been flat in dollars
and increased 1% in local currency. On the same as-adjusted basis,
sales in Eastern Europe increased 21% in local currency, led by a 42%
increase in Russia; however, this performance was offset by a local
currency decline of 3% in Western Europe.
- Asia Pacific sales increased 2% in local currency and 3% in dollars.
Fragrance sales decreased 6% in both local currency and dollars;
flavor sales increased 7% in local currency and 9% in dollars. Local
currency fine and functional fragrance sales declined 15% and 6%,
respectively, mainly due to weak demand in Singapore, Thailand and
Australia. Flavor sales were led by Greater China, Vietnam and
Indonesia with respective local currency sales increases of 28%, 72%
and 17%. For the region, Greater China, Vietnam, the Philippines and
Indonesia were strongest, with respective local currency sales
increases of 8%, 31%, 18% and 9%.
- Latin American sales increased 10% with fragrance and flavor sales
increasing 3% and 34%, respectively. Flavor sales were strongest in
Argentina, Brazil and Mexico which grew 48%, 39% and 53%,
respectively. Functional fragrance and aroma chemical sales increased
6% and 2%, respectively, while fine fragrance sales decreased 6%;
fragrance growth was generally consistent among all countries.
- India reported sales growth of 18% in both local currency and dollars.
Local currency fragrance sales increased 16% and 15% in dollars, while
flavor sales increased 21% in both local currency and dollars. In both
flavors and fragrances, the sales performance reflected the benefit of
new product introductions.
Net income for the 2005 third quarter increased 62% compared to the prior
year quarter. The 2005 third quarter results include a tax benefit of $23.3
million ($.24 per share) relating to AJCA; the tax benefit results from the
reversal of prior accruals relating to the repatriation of foreign earnings,
net of the applicable reduced U.S. tax cost of eligible repatriated foreign
earnings, as provided for in AJCA. The 2004 third quarter results include
$20.0 million ($12.7 million after tax or $.14 per share) of restructuring
and other charges related to the sale of certain European fruit business
assets, the closure of the Company's Dijon, France manufacturing facility and
other related reorganization activities. Excluding the impact of
restructuring and other charges from the 2004 results and the tax benefit
from AJCA from the 2005 results, net income would have decreased 18%.
In the third quarter, gross profit as a percentage of sales was 41.9%
compared to 42.9% in the prior year; the margin decline was mainly
attributable to higher raw material costs which the Company has not yet been
able to fully recover through increased selling prices. Research and
Development ("R&D") expenses totaled 9.1% of sales compared to 8.5% in the
prior year quarter, consistent with the Company's intended level of R&D
spending. Selling, General and Administrative ("SG&A") expenses, as a
percentage of sales, increased to 17.4% from 16.5% due to the cost of
customer damages related to the raw material contamination issue the Company
reported earlier this year and for which the Company will seek full
indemnification from its supplier, the supplier's insurers and, to the extent
required, its own insurers. Interest expense increased 9% from the prior year
due to higher borrowing levels during the quarter and somewhat higher cost of
borrowing. The effective tax rate for the 2005 third quarter was
significantly impacted by the benefit attributable to AJCA; excluding this
benefit, discussed above, the effective tax rate for the quarter would have
been 31.7% compared to 29.9% in the prior year quarter. Variations in
the effective tax rate are mainly attributable to fluctuations in earnings in
the countries in which the Company operates.
For the nine-month period ended September 30, 2005, sales totaled $1,531.7
million, declining 2% in comparison to the prior year period, as reported.
Reported sales for 2005 benefited from the strengthening of various
currencies, particularly the Euro, in relation to the U.S. dollar; had
exchange rates remained constant, sales for the nine-month period ended
September 30, 2005 would have decreased 3% compared to the prior year period.
For the 2005 period, fragrance sales increased 2% while flavor sales declined
7%; on a local currency basis, fragrance sales grew 1% while flavor sales
declined 9%.
Flavor sales in the 2005 period were impacted by the disposition, in the
second half of 2004, of the Company's European fruit preparations business. On
an as-adjusted basis, excluding $56.8 million in sales attributable to the
fruit business from the 2004 period, 2005 flavor sales would have increased 1%
in dollars and declined 1% in local currency. Flavor sales, most notably in
North America and Europe, were also unfavorably impacted by lower selling
prices for naturals, mainly vanilla, as well as a $5.0 million impact in the
second quarter related to a raw material contamination issue.
Sales performance by region for the 2005 nine-month period compared to the
prior year follows:
- North America fragrance and flavor sales declined 2% and 9%,
respectively; in total, regional sales declined 5%. Fine fragrance and
aroma chemical sales both increased 2%, while functional fragrance
sales declined 6%. Sales of both fragrances and flavors had a
difficult comparative with the 2004 period when sales increased 11%
and 13%, respectively.
- Europe sales declined 9% in local currency and 6% in dollars.
Fragrance sales increased 1% in local currency and 4% in dollars.
Local currency fine fragrance sales increased 10%, driven primarily by
new wins, while functional fragrances and aroma chemicals declined 5%
and 3%, respectively. Local currency flavor sales declined 22% and 19%
in dollars mainly as a result of the disposition of the fruit
preparations business. On an as-adjusted basis, excluding sales
attributable to this business from the 2004 results, 2005 flavor sales
would have increased 3% in dollars and been flat in local currency. On
the same as-adjusted basis, sales in Eastern Europe increased 13% in
local currency, led by a 33% increase in Russia; however, this
performance was offset by a local currency decline of 1% in Western
Europe.
- Asia Pacific sales were flat in local currency and increased 2% in
dollars. Fragrance sales decreased 4% in local currency and 3% in
dollars; flavor sales increased 3% in local currency and 5% in
dollars. Flavor sales were strongest in Greater China, Indonesia and
Vietnam, with respective local currency increases of 14%, 11% and 34%.
Fragrance sales in Vietnam, Taiwan and South Korea increased 66%, 18%
and 15%, respectively, but were offset by declining sales in Thailand
and Singapore/Malaysia.
- Latin American sales increased 10% in comparison to the prior year.
Flavor sales increased 18%, benefiting from increases of 20%, 23% and
35% in Argentina, Brazil and Mexico, respectively. Fragrance sales
increased 7% with Argentina, Mexico and Brazil reporting increases of
14%, 5% and 8%, respectively.
- India sales increased 16% in local currency and 17% in reported
dollars. This performance was led by an 18% local currency increase in
flavor sales with fragrance sales increasing 14% in comparison to the
prior year period. In both flavors and fragrances, the sales
performance reflected the benefit of new wins.
Net income for the nine-month period ended September 30, 2005 increased 15%
compared to the prior year period; excluding the impact of restructuring and
other charges from the 2004 results and the tax benefit from AJCA from the
2005 results, net income decreased 11%. The 2005 decline in net income is
partially due to the disposition of the European fruit business; 2004 results
included income of $4.0 million attributable to this business. Proceeds from
the disposition were used to reduce debt but profits related to the Fruit
business were not replaced by interest expense savings.
Gross profit, as a percentage of sales, was 41.6% compared to 43.0% in the
prior year period; the margin decline was mainly attributable to higher raw
material costs which the Company has not yet been able to fully recover
through increased selling prices. Gross margin was also negatively impacted by
costs attributable to the raw material contamination issue the Company
reported earlier this year; year-to-date, cost of sales include $3.0 million
in related costs, comprised mainly of testing costs and the write-off of
affected materials. R&D expenses totaled 8.7% of sales compared with 8.4% in
the prior year period, consistent with the Company's intended level of R&D
spending. SG&A expenses, as a percentage of sales, increased to 16.6% from
16.4%, mainly due to the cost of customer damages related to the raw material
contamination issue. Interest expense decreased 2% from the prior year mainly
due to lower average borrowings compared to the prior year. The effective tax
rate for the nine-month periods ended September 30, 2005 and 2004 was 20.8%
and 30.9%, respectively; excluding the impact of AJCA, the effective tax rate
for the nine-month period ended September 30, 2005 would have been 31.2%.
Variations in the effective tax rate are mainly attributable to fluctuations
in earnings in the countries in which the Company operates.
Outlook for 2005
----------------
IFF currently expects 2005 local currency sales to decrease in the low single
digits in comparison to 2004 sales as reported; based on current exchange
rates, such local currency performance is expected to result in a low single
digit decrease in reported dollars. For purposes of this comparison, 2004
sales include $58 million of sales attributable to the European fruit
preparations business. Excluding fruit sales from the 2004 comparative, IFF
expects 2005 local currency sales to be flat to up 1% in comparison to 2004;
based on current exchange rates, this local currency growth is expected to
result in a low single digit increase in reported dollars.
Gross profit as a percentage of sales is expected to remain at approximately
the same levels as reported for the first nine months, mainly due to increased
supply chain costs including the impact of the raw material costs, as well as
the timing in implementing negotiated price increases. R&D expenses are
expected to approximate 9% of sales, consistent with the Company's intended
level of R&D spending. R&D spending is increasing as a percentage of sales in
comparison to 2004, mainly as a result of the elimination of the fruit
preparations business; relative to other parts of the business, fruit
preparations required less R&D as a percentage of sales. In 2005, SG&A
expenses, as a percentage of sales, are expected to increase somewhat from
2004 levels, mainly from inclusion of an expected $12.0 million - $13.0
million in equity compensation expense in 2005, compared to $5.0 million of
such expense in 2004. In May 2004, the Company began using Restricted Stock
Units ("RSU's"), rather than stock options, as an element of the Company's
incentive compensation plans for all eligible U.S. - based employees and a
majority of eligible overseas employees. The actual expense will depend upon
the value of the Company's stock and the number of RSU's granted. The cost of
customer damages related to the raw material contamination issue will also
impact SG&A expense. The Company expects the effective tax rate in 2005 to be
23.0%; excluding the benefit attributable to AJCA, the effective tax rate is
expected to be 31.2%.
Based on the foregoing, IFF currently expects earnings per share for 2005 to
be in the range of $2.26 to $2.34, including the per share effect of the tax
benefit related to AJCA of $.24. These results compare to earnings per share
of $2.05 reported in 2004; excluding restructuring and other charges
representing $.22 per share, 2004 results per share were $2.27.
About IFF
---------
IFF is a leading creator and manufacturer of flavors and fragrances used in a
wide variety of consumer products--from fine fragrances and toiletries, to
soaps, detergents and other household products, to beverages and food
products. IFF is dedicated to The Pursuit of Excellence in every area of its
business, using knowledge, creativity, innovation and technology to
continually provide customers with the highest quality products and service
and superior consumer understanding.
IFF has sales, manufacturing and creative facilities in 31 countries
worldwide. For more information, please visit our Web site at www.iff.com.
Cautionary Statement Under the Private Securities Litigation Reform
Act of 1995
Statements in this report, which are not historical facts or information, are
"forward-looking statements" within the meaning of The Private Securities
Litigation Reform Act of 1995. Such forward-looking statements are based on
management's reasonable current assumptions and expectations. Certain of such
forward-looking information may be identified by such terms as "expect",
"believe", "may", "outlook", "guidance" and similar terms or variations
thereof. All information concerning future revenues, tax rates or benefits,
interest savings, and other future financial results or financial position,
constitutes forward-looking information. Such forward-looking statements are
based on management's reasonable current assumptions and expectations. Such
forward-looking statements involve risks, uncertainties and other factors,
which may cause the actual results of the Company to be materially different
from any future results expressed or implied by such forward-looking
statements, and there can be no assurance that actual results will not differ
materially from management's expectations. Such factors include, among
others, the following: general economic and business conditions in the
Company's markets, including economic, population health and political
uncertainties; interest rates; the price, quality and availability of raw
materials; the Company's ability to implement its business strategy,
including the achievement of anticipated cost savings, profitability and
growth targets; the impact of currency fluctuation or devaluation in the
Company's principal foreign markets and the success of the Company's hedging
and risk management strategies; the outcome of uncertainties related to
litigation; uncertainties related to any potential claims and rights of
indemnification or other recovery for customer and consumer reaction to the
contamination issue; the impact of possible pension funding obligations and
increased pension expense on the Company's cash flow and results of
operations; and the effect of legal and regulatory proceedings, as well as
restrictions imposed on the Company, its operations or its representatives by
foreign governments. The Company intends its forward-looking statements to
speak only as of the time of such statements and does not undertake to update
or revise them as more information becomes available or to reflect changes in
expectations, assumptions or results.
Conference call
There will be a conference call today at 10:00 AM Eastern Time, at which time
the Company will discuss operating results for the third quarter 2005, and its
current expectations for 2005. The dial in number for U.S.-based participants
is 1-800-316-8317; for international participants, the number is
1-719-457-2697. The pass code for the call is 7224582.
A replay of the conference call will be available from 1:00 PM Eastern Time
beginning on Wednesday October 26, 2005 and ending at Midnight on Wednesday,
November 9. The dial in number for the replay for U.S.-based listeners is
1-888-203-1112; for international listeners, the number is 1-719-457-0820. The
replay pass code will be 7224582.
The call can also be monitored via the World Wide Web at www.iff.com. Real
Network's Real Player or Microsoft Media Player is required to access the
webcast. They can be downloaded from www.real.com or
www.microsoft.com/windows/mediaplayer. A replay of the conference call will be
available on the Company's website for twelve months.
Contact
Douglas J. Wetmore
Senior Vice President and Chief
Financial Officer
Phone: 212-708-7145
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International Flavors & Fragrances Inc.
Consolidated Income Statement
(Amounts in thousands except per share data)
(Unaudited)
Quarter Ended September 30,
----------------- ------------------- ------------------ -----------------
As Reported Adjustments As-Adjusted
2004 (A) 2004 2005
----------------- ------------------- ------------------ -----------------
Net sales $506,229 $10,600 $495,629 $493,118
Cost of goods sold 289,052 9,325 279,727 286,712
----------------- ------------------- ------------------ -----------------
Gross margin on sales 217,177 1,275 215,902 206,406
Research & development 43,124 421 42,703 44,651
Selling and administrative 83,694 1,099 82,595 86,022
Amortization 3,709 - 3,709 3,768
----------------- ------------------- ------------------ -----------------
86,650 (245) 86,895 71,965
Restructuring and other charges (19,950) - (19,950) -
Interest Expense (6,041) - (6,041) (6,566)
Other income (expense), net (324) - (324) 854
----------------- ------------------- ------------------ -----------------
Pretax income 60,335 (245) 60,580 66,253
Income taxes(benefit) 18,030 (74) 18,104 (2,319)
----------------- ------------------- ------------------ -----------------
Net income $42,305 $ (171) $42,476 $68,572
================= =================== ================== =================
Including restructuring and other charges:
Net income $42,305 $42,476 $68,572
Earnings per share - basic $0.45 $0.45 $0.73
Earnings per share - diluted $0.44 $0.44 $0.72
----------------- ------------------- ------------------ -----------------
Excluding restructuring and other charges:
Net income $54,995 $55,166 $68,572
Results per share - basic $0.58 $0.59 $0.73
Results per share - diluted $0.58 $0.58 $0.72
----------------- ------------------- ------------------ -----------------
(A) Adjustments reflect elimination of sales and operating results of the
European fruit preparations business for the period presented. Additional
details regarding as-adjusted information are contained in a January 25, 2005
Form 8-K filed with the SEC and are also available via the Company's website.
International Flavors & Fragrances Inc.
Consolidated Income Statement
(Amounts in thousands except per share data)
(Unaudited)
Nine Months Ended September 30,
------------------ ------------------- ------------------- -----------------
As Reported Adjustments As-Adjusted
2004 (A) 2004 2005
------------------ ------------------- ------------------- -----------------
Net sales $1,565,421 $56,838 $1,508,583 $1,531,748
Cost of goods sold 891,554 44,832 846,722 894,174
------------------ ------------------- ------------------- -----------------
Gross margin on sales 673,867 12,006 661,861 637,574
Research & development 132,114 1,660 130,454 133,784
Selling and administrative 256,604 4,530 252,074 253,632
Amortization 11,117 - 11,117 11,303
------------------ ------------------- ------------------- -----------------
274,032 5,816 268,216 238,855
Restructuring and other charges (27,666) - (27,666) -
Interest expense (18,612) - (18,612) (18,204)
Other income (expense), net (3,054) - (3,054) 3,968
------------------ ------------------- ------------------- -----------------
Pretax income 224,700 5,816 218,884 224,619
Income taxes 69,535 1,826 67,709 46,791
------------------- ------------------- ------------------- -----------------
Net income $155,165 $3,990 $151,175 $177,828
=================== =================== =================== =================
Including restructuring and other charges:
Net income $155,165 $151,175 $177,828
Earnings per share - basic $1.65 $1.61 $1.89
Earnings per share - diluted $1.63 $1.59 $1.87
------------------- ------------------- ------------------- -----------------
Excluding restructuring and other charges:
Net income $172,870 $168,880 $177,828
Results per share - basic $1.84 $1.79 $1.89
Results per share - diluted $1.81 $1.77 $1.87
------------------- ------------------- ------------------- -----------------
(A) Adjustments reflect elimination of sales and operating results of the
European fruit preparations business for the period presented. Additional
details regarding as-adjusted information are contained in a January 25, 2005
Form 8-K filed with the SEC and are also available via the Company's website.
International Flavors & Fragrances Inc.
Consolidated Condensed Balance Sheet
(Amounts in thousands)
------------------ ------------------
(Unaudited)
December 31, 2004 September 30,
2005
------------------ ------------------
Cash & short-term investments $ 32,995 $ 28,647
Receivables 358,361 384,285
Inventories 457,204 437,294
Other current assets 112,810 115,116
------------------ ------------------
Total current assets 961,370 965,342
Property, plant and equipment, net (1,2) 501,334 494,180
Goodwill and other intangibles, net 789,676 778,373
Other assets 110,914 177,258
------------------ ------------------
Total assets $2,363,294 $2,415,153
=================== =================
Commercial paper, bank borrowings, overdrafts and current
portion of long-term debt (3) $ 15,957 $ 552,609
Other current liabilities 383,565 374,980
------------------ ------------------
Total current liabilities 399,522 927,589
Long-term debt (3) 668,969 136,374
Non-current liabilities 384,316 422,639
Shareholders' equity 910,487 928,551
------------------ ------------------
Total liabilities and shareholders' equity $2,363,294 $2,415,153
================== ==================
Notes:
1. Capital spending - Quarter: $23 million
Year-to-date: $61 million
2. Depreciation - Quarter: $20 million
Year-to-date: $58 million
3. At December 31, 2004 and September 30, 2005 long-term debt includes
unamortized gains and FAS 133 mark to market adjustments of $23.8
million and $2.4 million, respectively; at September 30, 2005
commercial paper, bank borrowings, overdrafts and current portion of
long-term debt includes unamortized gains of $9.8 million on various
interest rate swaps the Company has entered into. Such gains have been
deferred and are being amortized over the remaining term of the
underlying debt and the mark to market adjustment is recorded each
quarter.
********************
Average Shares Outstanding (in thousands): 2004 2005
---------------------------------------------------- ------------------ ----------------
Third quarter:
Basic 94,172 93,380
Diluted 95,498 94,622
---------------------------------------------------- ------------------ ----------------
Year-to-date:
Basic 94,114 93,860
Diluted 95,318 95,301
---------------------------------------------------- ------------------ ----------------
Quarter ended September 30, 2005 As Reported
----------------------------------------------------------------------------------------------------------------------------
% Change in Sales by Area of Destination Fragrances Flavors Total
----------------------------------------------------------------------------------------------------------------------------
North America (2) (10) (5)
Europe - Reported (3) (14) (7)
-------------------
Europe - Local Currency (3) (13) (6)
Latin America 3 34 10
Asia Pacific - Reported (6) 9 3
------------------------
Asia Pacific - Local Currency (6) 7 2
India - Reported 15 21 18
-----------------
India - Local Currency 16 21 18
Total - Reported (1) (3) (3)
----------------
Total - Local Currency (1) (3) (3)
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Quarter ended September 30, 2005 Compared to 2004 As-Adjusted
-------------------------------------------------------------
Excluding Sales Attributable to European Fruit Preparations Business
--------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
% Change in Sales by Area of Destination Fragrances Flavors Total
----------------------------------------------------------------------------------------------------------------------------
North America (2) (10) (5)
Europe - Reported (3) - (3)
-----------------
Europe - Local Currency (3) 1 (2)
Latin America 3 34 10
Asia Pacific - Reported (6) 9 3
------------------------
Asia Pacific - Local Currency (6) 7 2
India - Reported 15 21 18
----------------
India - Local Currency 16 21 18
Total - Reported (1) 2 (1)
----------------
Total - Local Currency (1) 1 (1)
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
Nine-months ended September 30, 2005 As Reported
----------------------------------------------------------------------------------------------------------------------------
% Change in Sales by Area of Destination Fragrances Flavors Total
----------------------------------------------------------------------------------------------------------------------------
North America (2) (9) (5)
Europe - Reported 4 (19) (6)
-----------------
Europe - Local Currency 1 (22) (9)
Latin America 7 18 10
Asia Pacific - Reported (3) 5 2
-----------------------
Asia Pacific - Local Currency (4) 3 -
India - Reported 15 18 17
----------------
India - Local Currency 14 18 16
Total - Reported 2 (7) (2)
------------------
Total - Local Currency 1 (9) (3)
----------------------------------------------------------------------------------------------------------------------------
Nine-months ended September 30, 2005 Compared to 2004 As-Adjusted
Excluding Sales Attributable to European Fruit Preparations Business
----------------------------------------------------------------------------------------------------------------------------
% Change in Sales by Area of Destination Fragrances Flavors Total
----------------------------------------------------------------------------------------------------------------------------
North America (2) (9) (5)
Europe - Reported 4 3 4
-----------------
Europe - Local Currency 1 - 1
Latin America 7 18 10
Asia Pacific - Reported (3) 5 2
-----------------------
Asia Pacific - Local Currency (4) 3 -
India - Reported 15 18 17
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India - Local Currency 14 18 16
Total - Reported 2 1 2
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Total - Local Currency 1 (1) -
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