International Flavors & Fragrances Inc. : IFF Reports Fourth Quarter & Full Year 2011 Results
02/09/2012| 07:05am US/Eastern
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Full Year Local Currency Sales Up 4%, Reported Sales Increased 6%
Full Year Adjusted Operating Profit Grew 11%, Reported Operating
Profit Up 3%
Full Year Adjusted EPS Increased 11%, Reported EPS Flat
International Flavors & Fragrances Inc. (NYSE: IFF), a leading global
creator of flavors and fragrances for consumer products, today reported
financial results for the fourth quarter and full year 2011. In the
fourth quarter, revenue grew two percent over the prior year period to
$644 million. Revenue in local currency also increased two percent as
foreign currency had a limited impact on results. Reported diluted
earnings per share (EPS) for the quarter were $0.30 compared to $0.68 in
the fourth quarter 2010. EPS in the fourth quarter 2011 included an
expense of $0.44 per share related to the previously announced patent
litigation settlement and restructuring costs, as compared to a $0.01
per share expense related to the European restructuring in the fourth
quarter 2010. Excluding these items, adjusted EPS for the fourth quarter
increased seven percent to $0.74 from $0.69 in the prior year quarter.
For the full year, the Company reported revenue of $2.8 billion, a six
percent increase over the prior year. Excluding the impact of foreign
currency, revenue in local currency increased four percent. Reported EPS
for the year was $3.26 compared to $3.26 for the full year 2010. EPS in
2011 included an expense of $0.48 per share related to the previously
announced patent litigation settlement and restructuring efforts, while
2010 included an expense of $0.11 per share related to the European
restructuring. Excluding these items, adjusted EPS for the full year
2011 increased 11 percent to $3.74 from $3.37 in the prior year.
"Our ability to achieve our long-term financial targets for the second
consecutive year demonstrates the team's aptitude for successfully
executing our strategy and navigating through a challenging operating
environment," said IFF Chairman and Chief Executive Officer Doug Tough.
"At the beginning of 2011, we expressed optimism that IFF would continue
to perform well despite ongoing macroeconomic challenges and
unprecedented raw material cost increases."
Mr. Tough added, "Thanks to the focus and dedication of the
organization, we delivered progress in several key areas. We continued
to leverage our geographic reach to capture the growth potential of the
emerging markets, to strengthen our innovation platform to deliver
differentiating products, and to maximize our portfolio to improve the
underperforming areas of our business. I'm proud of all our employees,
each of whom played a role in achieving our results, and I remain
confident in our ability to continue to navigate through these uncertain
times as we strive to achieve our long-term targets in 2012."
FOURTH QUARTER 2011
Flavors Business Unit
Local currency sales in the fourth quarter increased eight percent over
the prior year period as double-digit growth in the emerging markets
continued to drive results. In the developed markets of North America
and Western Europe, growth was once again led by health and wellness
initiatives. From a category perspective, growth was strongest in
Beverage, increasing double-digits, followed by high single-digit growth
in Savory, and mid-single-digit growth in Dairy.
Operating profit decreased $25 million year-over-year to $28 million
including an expense of $35 million associated with the patent
litigation settlement and restructuring costs in the fourth quarter
2011. Excluding these items, operating profit increased 18 percent, or
$10 million, to $63 million. Adjusted operating profit margin increased
170 bps versus the prior year period to 19.6 percent as volume growth,
pricing actions and cost control more than offset the impact of higher
raw material costs.
Fragrances Business Unit
Local currency sales in the fourth quarter declined three percent as
growth in the emerging markets was offset by lower sales to the
developed markets. In Fine Fragrance & Beauty Care, results were
pressured, despite strong performances in Hair Care and Toiletries, as
Fine Fragrance volumes declined. Functional Fragrance results were
strong as new business wins and price increases drove growth across all
categories. Fragrance Ingredients was most challenged, as price
increases to reduce the impact of higher raw material costs continued to
have an adverse effect on volume.
Operating profit decreased $16 million year-over-year to $29 million,
including an $8 million expense associated with restructuring costs in
the fourth quarter 2011, as compared to a $1 million expense related to
the European restructuring in the prior year period. Excluding these
items, adjusted operating profit declined by $9 million as double-digit
increases in raw material costs and volume declines more than offset
higher prices, the benefits associated with the European restructuring,
and cost control. Adjusted operating profit margin fell 230 bps to 11.5
percent versus the year-ago period.
Sales performance by region and product category follows:
Fourth Quarter 2011 vs. Fourth Quarter 2010
Fine & Beauty Care
Functional
Ingredients
Total Frag.
Flavors
Total
North America
Reported
-4
%
3
%
-9
%
-3
%
4
%
1
%
EAME 1
Reported
-8
%
12
%
-30
%
-7
%
11
%
0
%
Local Currency
-8
%
12
%
-30
%
-6
%
12
%
1
%
Latin America
Reported
-11
%
14
%
-2
%
2
%
0
%
1
%
Local Currency
-10
%
14
%
-2
%
2
%
1
%
2
%
Greater Asia
Reported
3
%
-1
%
-1
%
0
%
11
%
7
%
Local Currency
3
%
-1
%
-4
%
-1
%
10
%
6
%
Total
Reported
-6
%
7
%
-17
%
-3
%
8
%
2
%
Local Currency
-6
%
7
%
-17
%
-3
%
8
%
2
%
¹ Europe, Africa and Middle East
Fourth Quarter 2011 Highlights
Gross profit, as a percentage of sales, was 37.9 percent, compared
with 40.1 percent in the prior year period, as higher prices were more
than offset by double-digit raw material cost increases.
Research, selling and administrative (RSA) expenses, as a percentage
of sales, increased 230 bps, including an expense of $33 million
related to the patent litigation settlement. Excluding this expense,
RSA as a percentage of sales, decreased 290 bps to 23.8 percent versus
the prior year period, reflecting disciplined cost control including
lower incentive compensation.
Operating profit declined $36 million to $48 million, including an
expense of $43 million associated with the patent litigation
settlement and restructuring efforts in the fourth quarter 2011, as
compared to a $1 million expense related to the European restructuring
in the prior year period. Excluding these items, adjusted operating
profit grew eight percent, or $7 million, to $91 million as pricing
actions, cost discipline and lower incentive compensation offset the
impact of higher raw material costs. Adjusted operating profit margin
increased 70 bps to 14.1 percent versus 13.4 percent in the year-ago
period.
Interest expense declined $1 million year-over-year reflecting lower
levels of outstanding debt.
The effective tax rate was 39.8 percent as compared to 21.4 percent in
the prior year period. The year-over-year change principally reflects
the benefit of a higher U.S. Research and Development credit in the
prior year period and a low tax benefit related to the patent
litigation settlement in the fourth quarter 2011.
FULL YEAR 2011
Flavors Business Unit
Local currency sales for the full year 2011 increased nine percent
year-over-year led by double-digit growth in the emerging markets and
mid-single-digit growth in the developed markets. Overall performance
was once again driven by new business wins and increased volumes with
existing customers. In North America, and Europe, Africa and the Middle
East (EAME), double-digit increases in both Savory and Beverage were the
primary contributors of growth. Results in Greater Asia were strong, led
by double-digit growth in Beverage, Confectionery and Dairy. In Latin
America, solid growth was achieved as Confectionery and Dairy each grew
double digits.
Operating profit increased by $7 million to $249 million, including an
expense of $35 million associated with the patent litigation settlement
and restructuring costs in the fourth quarter 2011. Excluding these
items, adjusted operating profit increased 17 percent, or $42 million,
as volume growth, price increases and cost control drove the
improvement. As a result, adjusted operating profit margin improved 90
bps to 21.1 percent.
Fragrances Business Unit
Local currency sales for the full year 2011 declined one percent against
a record 16 percent increase in the prior year. Fine Fragrance & Beauty
Care was challenged by a very strong year-ago comparison of 26 percent,
as new business wins and higher prices were more than offset by volume
declines. Functional Fragrance results were solid, led by new business
across all categories and higher pricing. Fragrance Ingredients results
declined year-over-year against an 18 percent year-ago comparison, as
volumes were impacted by pricing actions.
Operating profit declined by $20 million to $215 million in 2011
including an expense of $11 million associated with the restructuring
costs. Excluding these expenses and $10 million related to the European
restructuring in the prior year, adjusted operating profit declined $18
million to $227 million. Adjusted operating profit margin for the full
year declined 160 bps to 15.7 percent, as double-digit raw material cost
increases and lower sales were not able to be offset by higher prices,
the benefits associated with the European restructuring, and lower
incentive compensation expense.
Sales performance by region and product category follows:
Full Year 2011 vs. Full Year 2010
Fine & Beauty Care
Functional
Ingredients
Total Frag.
Flavors
Total
North America
Reported
-3
%
3
%
-4
%
-1
%
10
%
4
%
EAME 1
Reported
6
%
6
%
-10
%
2
%
15
%
7
%
Local Currency
1
%
2
%
-13
%
-2
%
10
%
2
%
Latin America
Reported
1
%
3
%
-8
%
1
%
5
%
2
%
Local Currency
-1
%
3
%
-9
%
0
%
4
%
1
%
Greater Asia
Reported
4
%
5
%
1
%
4
%
14
%
10
%
Local Currency
2
%
4
%
-2
%
2
%
9
%
6
%
Total
Reported
3
%
5
%
-6
%
1
%
12
%
6
%
Local Currency
0
%
3
%
-9
%
-1
%
9
%
4
%
¹ Europe, Africa and Middle East
Full Year 2011 Highlights
Gross profit, as a percentage of sales, was 39.6 percent, compared
with 41.7 percent in the prior year as significant raw material
increases pressured results. Sales growth, including both volume and
pricing, as well as margin improvement initiatives and restructuring
benefits, offset the elevated levels of raw material costs in absolute
terms as gross profit dollars were up slightly versus year-ago levels.
Research, Selling and Administrative (RSA) expenses, as a percentage
of sales, decreased 170 bps year-over-year including an expense of $33
million related to the patent litigation settlement. Excluding this
expense, RSA as a percentage of sales, declined 280 bps to 22.6
percent reflecting disciplined cost control and lower incentive
compensation.
Operating profit increased $11 million to $428 million in 2011
including an expense of $47 million associated with the patent
litigation settlement and restructuring costs. Excluding this expense
and $10 million related to the European restructuring costs in the
prior year, adjusted operating profit grew 11 percent, or $48 million,
to $474 million. Adjusted operating profit margin increased 70 bps to
17.0 percent versus 16.3 percent in the prior year as pricing actions
and disciplined costs control, including lower incentive compensation,
offset the impact of higher raw material costs.
Interest expense decreased $4 million year-over-year principally due
to lower levels of outstanding debt.
The effective tax rate for the full year 2011 was 28.6 percent
compared to 26.7 percent in the prior year principally reflecting
lower tax benefits associated with the patent litigation settlement.
About IFF
International Flavors & Fragrances Inc. (NYSE: IFF) is a leading global
creator of flavors and fragrances used in a wide variety of consumer
products. Consumers experience these unique scents and tastes in fine
fragrances and beauty care, detergents and household goods, as well as
beverages, confectionery and food products. The Company leverages its
competitive advantages of consumer insight, research and development,
creative expertise, and customer intimacy to provide customers with
innovative and differentiated product offerings. A member of the S&P 500
Index, IFF has more than 5,500 employees working in 33 countries
worldwide. For more information, please visit our website at www.iff.com.
Audio Webcast
An audio webcast to discuss the Company's fourth quarter and full year
2011 financial results, and first quarter and full year 2012 outlook
will be held today, February 9, 2012, at 10:00 a.m. EST. Interested
parties can access the webcast and accompanying slide presentation on
the Company's website at www.iff.com
under the Investor Relations section. For those unable to listen to the
live broadcast, a replay will be available on the Company's website
approximately one hour after the event and will remain available on the
IFF website for one year.
Cautionary Statement Under The Private
Securities Litigation Reform Act of 1995
Statements in this press release, 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 current assumptions, estimates and
expectations. Certain of such forward-looking information may be
identified by such terms as "expect", "anticipate", "believe",
"outlook", "may", "estimate", "should" and "predict" or similar terms or
variations thereof. All information concerning the restructuring
initiative, including the expected number of positions that will be
eliminated, the restructuring charges that will be recorded, the amount
and timing of expected savings, and the impact on the Company's future
business, as well as other statements regarding the Company future
revenues, tax rates or benefits, energy costs, interest and other
savings, capital expenditures, earnings and other future financial
results or financial position, constitutes forward-looking information.
Such forward-looking statements are based on a series of expectations,
assumptions, estimates and projections about the Company, are not
guarantees of future results or performance, and involve significant
risks, uncertainties and other factors, including assumptions and
projections, for all forward-looking periods. Actual results of the
Company may differ materially from any future results expressed or
implied by such forward-looking statements. Such factors include, among
others, the following:
The ability of the Company to implement the restructuring initiative
within the anticipated time frames and the ultimate amount of costs
that the Company incurs as a result of such initiative;
General economic and business conditions in the Company's markets and
demand for the Company's products, especially given the generally
weaker global economic conditions, including economic and recessionary
pressures;
Decline in consumer confidence and spending and changes in consumer
preferences;
Competitive products and pricing pressures;
Population health and political uncertainties, and the difficulty in
projecting the short and long-term effects of global economic
conditions;
Movements in interest rates;
Volatility and deterioration of the capital and credit markets, and
any adverse impact on our cost of and access to capital and credit;
Fluctuations in 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,
realization of price increases and growth targets;
The level of success the Company achieves in developing and
introducing new products and entering new markets;
The impact of currency fluctuation or devaluation in the Company's
principal foreign markets, especially given the economic uncertainty
in Europe, as well as the recent strengthening of the U.S. dollar
against most currencies, notably the Euro versus the U.S. dollar. The
market volatility may also have an impact on the availability,
effectiveness and cost of the Company's hedging and risk management
strategies or the liquidity or cash flows of our customers;
Uncertainties regarding the outcome of, or funding requirements,
related to litigation or settlement of pending litigation, uncertain
tax positions or other contingencies;
The impact of possible pension funding obligations and increased
pension expense, particularly as a result of changes in asset returns
or discount rates, on the Company's cash flow and results of
operations;
The effect of legal and regulatory proceedings, as well as
restrictions imposed on the Company, its operations or its
representatives by U.S. and foreign governments;
Changes in federal, state, local and foreign tax legislation or the
results of tax audits, assessments, or disputes may result in
fluctuations in our tax obligations, effective tax rate or results of
our operations;
Any business disruptions due to political instability, armed
hostilities, incidents of terrorism, natural disasters or the
responses to or repercussion from any of these or similar events or
conditions; and
Adverse changes due to accounting rules or regulations.
The foregoing list of important factors does not include all such
factors, nor necessarily present them in order of importance. In
addition, you should consult other disclosures made by the Company (such
as in our other filings with the Securities and Exchange Commission
("SEC") or in company press releases) for other factors that may cause
actual results to differ materially from those projected by the Company.
The Company intends its forward-looking statements to speak only as of
the time of such statements and does not undertake or plan to update or
revise them as more information becomes available or to reflect changes
in expectations, assumptions or results. The Company can give no
assurance that such expectations or forward-looking statements will
prove to be correct. An occurrence of, or any material adverse change
in, one or more of the risk factors or risks and uncertainties referred
to in this report or included in our other periodic reports filed with
the SEC could materially and adversely impact our operations and our
future financial results.
Any public statements or disclosures by IFF following this release that
modify or impact any of the forward-looking statements contained in or
accompanying this report will be deemed to modify or supersede such
outlook or other forward-looking statements in or accompanying this
report.
International Flavors & Fragrances Inc.
Consolidated Income Statement
(Amounts in thousands except per share data)
(Unaudited)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2011
2010
% Change
2011
2010
% Change
Net sales
$
644,383
$
629,870
2
$
2,788,018
$
2,622,862
6
Cost of goods sold
399,985
377,524
6
1,683,362
1,530,260
10
Gross margin
244,398
252,346
(3
)
1,104,656
1,092,602
1
Research and development
52,459
57,083
(8
)
219,781
218,772
0
Selling and administrative
134,349
110,905
21
443,974
447,392
(1
)
Restructuring and other charges
9,805
891
13,172
10,077
Interest expense
10,670
11,678
44,639
48,709
Other (income) expense, net
(3,415
)
1,093
9,544
8,059
Pretax income
40,530
70,696
(43
)
373,546
359,593
4
Income taxes
16,136
15,118
7
106,680
96,036
11
Net income
$
24,394
$
55,578
(56
)
$
266,866
$
263,557
1
Earnings per share - basic
$
0.30
$
0.69
$
3.30
$
3.29
Earnings per share - diluted
$
0.30
$
0.68
$
3.26
$
3.26
Average shares outstanding
Basic
80,677
79,812
80,456
79,495
Diluted
81,596
80,835
81,467
80,440
International Flavors & Fragrances Inc.
Condensed Consolidated Balance Sheet
(Amounts in thousands)
(Unaudited)
December 31,
December 31,
2011
2010
Cash & cash equivalents
$
88,279
$
131,332
Receivables
472,346
451,804
Inventories
544,439
531,675
Other current assets
212,156
210,384
Total current assets
1,317,220
1,325,195
Property, plant and equipment, net
608,065
538,118
Goodwill and other intangibles, net
708,345
714,416
Other assets
331,951
294,726
Total assets
$
2,965,581
$
2,872,455
Bank borrowings and overdrafts, and
current portion of long-term debt
$
116,688
$
133,899
Other current liabilities
447,878
527,052
Total current liabilities
564,566
660,951
Long-term debt
778,248
787,668
Non-current liabilities
515,360
420,681
Shareholders' equity
1,107,407
1,003,155
Total liabilities and shareholders' equity
$
2,965,581
$
2,872,455
International Flavors & Fragrances Inc.
Consolidated Statement of Cash Flows
(Amounts in thousands)
(Unaudited)
Twelve Months Ended
December 31,
2011
2010
Cash flows from operating activities:
Net income
$
266,866
$
263,557
Adjustments to reconcile to net cash provided by operations:
Depreciation and amortization
75,327
79,242
Deferred income taxes
25,357
(13,301
)
Gain on disposal of assets
(3,184
)
(3,681
)
Stock-based compensation
20,547
18,382
Pension settlement/curtailment
3,583
-
Changes in assets and liabilities
Current receivables
(35,697
)
(12,143
)
Inventories
(25,199
)
(86,250
)
Accounts payables
12,252
39,973
Other current payables and accrued expenses
(113,566
)
76,844
Changes in other assets/liabilities
(37,096
)
(47,487
)
Net cash provided by operations
189,190
315,136
Cash flows from investing activities:
Additions to property, plant and equipment
(127,457
)
(106,301
)
Purchase of insurance contracts
(1,936
)
(3,858
)
Maturity of net investment hedges
(2,475
)
1,719
Proceeds from disposal of assets
705
1,657
Net cash used in investing activities
(131,163
)
(106,783
)
Cash flows from financing activities:
Cash dividends paid to shareholders
(90,250
)
(81,181
)
Net change in revolving credit facility borrowings and overdrafts
92,662
(103,190
)
Repayments of long-term debt
(123,708
)
-
Proceeds from issuance of stock under stock plans
14,656
26,224
Excess tax benefits on stock-based payments
5,933
1,403
Net cash used in financing activities
(100,707
)
(156,744
)
Effect of exchange rates changes on cash and cash equivalents
(373
)
(412
)
Net change in cash and cash equivalents
(43,053
)
51,197
Cash and cash equivalents at beginning of year
131,332
80,135
Cash and cash equivalents at end of period
$
88,279
$
131,332
International Flavors & Fragrances Inc.
Business Unit Performance
(Amounts in thousands)
(Unaudited)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2011
2010
2011
2010
Net Sales
Flavors
$
322,736
$
298,242
$
1,347,340
$
1,203,274
Fragrances
321,647
331,628
1,440,678
1,419,588
Consolidated
644,383
629,870
2,788,018
2,622,862
Operating Profit
Flavors
28,157
53,464
249,276
242,528
Fragrances
29,068
44,889
215,336
234,889
Global Expenses
(9,440
)
(14,886
)
(36,883
)
(61,056
)
Consolidated
47,785
83,467
427,729
416,361
Interest Expense
(10,670
)
(11,678
)
(44,639
)
(48,709
)
Other income (expense), net
3,415
(1,093
)
(9,544
)
(8,059
)
Income before taxes
$
40,530
$
70,696
$
373,546
$
359,593
International Flavors & Fragrances Inc.
Reconciliation of Income
(Amounts in thousands)
(Unaudited)
The following information and schedules provide reconciliation
information between reported GAAP amounts and certain adjusted amounts.
This information and schedules is not intended as, and should not be
viewed as, a substitute for reported GAAP amounts or financial
statements of the Company prepared and presented in accordance with GAAP.
Fourth Quarter 2011
Items Impacting Comparability
Reported (GAAP)
Patent Litigation Settlement
Strategic Initiative
European Restructuring
Adjusted (Non-GAAP)
Net Sales
$
644,383
-
-
-
Cost of goods sold
399,985
-
-
-
Gross Profit
244,398
-
-
-
Research and development
52,459
-
-
-
Selling and administrative
134,349
(33,495
)1
-
-
100,854
RSA Expense
186,808
(33,495
)
-
-
153,313
Restructuring and other charges
9,805
-
(9,781
)2
(24
)3
-
Operating Profit
47,785
33,495
9,781
24
91,085
Interest expense
10,670
-
-
-
Other (income) expense, net
(3,415
)
-
-
-
Income on taxes before income
40,530
33,495
9,781
24
83,830
Income taxes
16,136
(3,649
)
(2,896
)
(5
)
22,686
Net income
24,394
29,846
6,885
19
61,144
Earnings per share - diluted
$
0.30
$
0.36
$
0.08
$
0.00
$
0.74
1 Related to the patent litigation settlement.
2 Related to category realignment & reduction in
workforce - $8M Fragrances, $1.5M Flavors & $0.5M Corporate.
3 Entirely related to Fragrance European facility
rationalization.
Fourth Quarter 2010
Items Impacting Comparability
Reported (GAAP)
European Restructuring
Adjusted (Non-GAAP)
Net Sales
$
629,870
-
Cost of goods sold
377,524
-
Gross Profit
252,346
-
Research and development
57,083
-
Selling and administrative
110,905
-
RSA Expense
167,988
-
Restructuring and other charges
891
(891
)1
-
Operating Profit
83,467
891
84,358
Interest expense
11,678
-
-
Other (income) expense, net
1,093
-
-
Income on taxes before income
70,696
891
71,587
Income taxes
15,118
(14
)
15,132
Net income
55,578
877
56,455
Earnings per share - diluted
$
0.68
$
0.01
$
0.69
1 Entirely related to Fragrance European facility
rationalization.
International Flavors & Fragrances Inc.
Reconciliation of Income
(Amounts in thousands)
(Unaudited)
The following information and schedules provide reconciliation
information between reported GAAP amounts and certain adjusted amounts.
This information and schedules is not intended as, and should not be
viewed as, a substitute for reported GAAP amounts or financial
statements of the Company prepared and presented in accordance with GAAP.
Full Year 2011
Items Impacting Comparability
Reported (GAAP)
Patent Litigation Settlement
Strategic Initiative
European Restructuring
Adjusted (Non-GAAP)
Net Sales
$
2,788,018
-
-
-
Cost of goods sold
1,683,362
-
-
-
Gross Profit
1,104,656
-
-
-
Research and development
219,781
-
-
-
Selling and administrative
443,974
(33,495
)1
-
-
410,479
RSA Expense
663,755
(33,495
)
-
-
630,260
Restructuring and other charges
13,172
-
(9,781
)2
(3,391
)3
-
Operating Profit
427,729
33,495
9,781
3,391
474,396
Interest expense
44,639
-
-
-
Other (income) expense, net
9,544
-
-
-
Income on taxes before income
373,546
33,495
9,781
3,391
420,213
Income taxes
106,680
(3,649
)
(2,896
)
(832
)
114,057
Net income
266,866
29,846
6,885
2,559
306,156
Earnings per share - diluted
$
3.264
$
0.36
$
0.08
$
0.03
$
3.74
1 Related to the patent litigation settlement.
2 Related to category realignment & reduction in
workforce - $8M Fragrances, $1.5M Flavors & $0.5M Corporate.
3 Entirely related to Fragrance European facility
rationalization.
4 The sum of EPS Reported, plus the per share effects
of items added back to reconcile to EPS as Adjusted, may
not equal the total EPS as Adjusted, due to rounding differences.
Full Year 2010
Items Impacting Comparability
Reported (GAAP)
European Restructuring
Adjusted (Non-GAAP)
Net Sales
2,622,862
-
Cost of goods sold
1,530,260
-
Gross Profit
1,092,602
-
Research and development
218,772
-
Selling and administrative
447,392
-
RSA Expense
666,164
-
Restructuring and other charges
10,077
(10,077
)1
-
Operating Profit
416,361
10,077
426,438
Interest expense
48,709
-
-
Other (income) expense, net
8,059
-
-
Income on taxes before income
359,593
10,077
369,670
Income taxes
96,036
(1,149
)
97,185
Net income
263,557
8,928
272,485
Earnings per share - diluted
$
3.26
$
0.11
$
3.37
1 Entirely related to Fragrance European facility
rationalization.
International Flavors & Fragrances Inc. Investor Relations: Michael
DeVeau, 212-708-7164
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