SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________
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) July 27, 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 July 27, 2005 reporting IFF's financial results for the
second quarter and six months ended June 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, 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 business disposed of, the relative impact of the
restructuring and other charges, 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 July 27, 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: July 27, 2005 By: /s/ Douglas J. Wetmore
____________________________________
Name: Douglas J. Wetmore
Title: Senior Vice President and
Chief Financial Officer
FOR IMMEDIATE RELEASE
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IFF REPORTS SECOND QUARTER RESULTS
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UPDATES 2005 GUIDANCE
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New York, N.Y., July 27, 2005 ... International Flavors & Fragrances Inc.
(NYSE: IFF) ("IFF" or "the Company") reported earnings per share for the
second quarter 2005 of $.60 compared to $.59 in the prior year quarter. The
2004 second quarter results included sales and operating results of the
European fruit preparations business which was disposed of in the second half
of the year; 2004 results also included $7.7 million ($5.0 million after tax
or $.06 per share) of restructuring and other charges related primarily to the
impairment of the fruit business assets. 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, 2004 second quarter earnings per share
would have been $.63.
Second quarter 2005 sales totaled $515.6 million, declining 2% in comparison
to the prior year, as reported. Sales for the 2005 quarter 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 quarter would
have decreased 4% in comparison to the prior year quarter. Fragrance sales
increased 5% while flavor sales decreased 9%; on a local currency basis,
fragrance sales grew 2% while flavor sales declined 11%.
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 $21.6 million in sales attributable to the
fruit business from the 2004 second quarter, consolidated sales for the
current quarter would have increased 3% in dollars and been flat in local
currency; on the same basis, flavor sales would have declined 2% in local
currency and been flat in dollars. Flavor sales, most notably in North America
and Europe, were also unfavorably impacted by lower selling prices for
naturals, mainly vanilla. Also in the quarter, as previously disclosed, the
Company experienced a slowdown in flavor sales for products that included a
contaminated raw material received from a supplier. As a result of associated
production and shipment delays while quarantined raw materials were tested,
second quarter sales were negatively impacted by approximately $5.0 million
(1.0% of the quarter's sales).
Fragrance sales were led by fine fragrance which increased 12% in dollars and
9% in local currency; the fine fragrance performance reflected the benefit of
a number of new product wins. Chemical sales increased 6% in dollars and 3% in
local currency while sales of functional fragrances were flat in dollars and
declined 2% in local currency.
"Our focus on technological innovation and superior service is creating
positive momentum throughout the Company," said Richard A. Goldstein, Chairman
and Chief Executive Officer of IFF. "In addition to new wins during the
quarter, IFF also received the fragrance industry's highest award for our
unique Sensory Perception(TM) technology. With proprietary technology like
this and our focus on operating excellence, I believe IFF will successfully
manage through this difficult pricing environment and drive growth for our
shareholders. The recent dividend increase and new share repurchase program
underscore the confidence we have in our Company and its future."
Sales performance by region for the 2005 second quarter compared to the prior
year quarter follows:
- North America flavor sales declined 10% and fragrance sales were flat; in
total, regional sales declined 5%. Aroma chemical and functional
fragrance sales declined 2% and 3%, respectively, while fine fragrances
increased 4%. New fragrance wins drove the fine fragrance performance for
the quarter.
- European fragrance sales increased 8% while flavor sales declined 21%; in
total, regional sales declined 5%. Reported sales benefited from the
strength of the Euro and Pound Sterling; local currency sales declined
9%. Local currency fragrance sales increased 2%; aroma chemical and fine
fragrance sales increased 4% and 11%, respectively, while functional
fragrances declined 8%. Local currency flavor sales declined 25%, 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 4% in dollars and
decreased 1% in local currency; this local currency decline was primarily
the result of the raw material matter, previously discussed.
- Asia Pacific sales declined 2% as a result of a local currency sales
decline of 4%. Fragrance sales decreased 6% in dollars and 8% in local
currency. Local currency functional fragrance sales declined 15%, mainly
due to weak demand in Singapore, Malaysia, Thailand and Australia. Local
currency flavor sales declined 1%, resulting in a 1% increase in reported
dollars. For the region, Greater China, Vietnam and Singapore were
strongest, with respective local currency flavor sales increases of 11%,
11% and 17%; the flavor growth was offset by weakness in the Philippines,
Indonesia and Australia which declined 7%, 9% and 6%, respectively.
- Latin American sales increased 13% with fragrance and flavor sales
increasing 13% and 14%, respectively. For the region, sales growth was
strongest in Argentina, Brazil and Mexico which grew 21%, 17% and 15%,
respectively. Fragrance sales were strongest in Argentina, Brazil and
Mexico, with respective increases of 27%, 15% and 15%. Fragrance sales
grew in all categories with increases of 15%, 12% and 14% in fine
fragrances, functional fragrances and aroma chemical sales, respectively.
Flavor sales were led by respective increases of 18%, 21% and 23% in
Mexico, Columbia and Brazil.
- India reported 16% sales growth in local currency and 17% in dollars.
Local currency fragrance sales increased 16% and 18% in dollars, while
flavor sales increased 17% in both local currency and dollars. In both
flavors and fragrances, the sales performance reflected the benefit of
new product introductions.
Net income, as reported for the 2005 quarter was flat with the prior year
quarter; excluding the impact of restructuring and other charges from the 2004
quarter, net income declined 8%. The decline in net income was partially due
to the disposition of the European fruit business; 2004 results included $1.9
million in net income 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. In the quarter, gross profit,
as a percentage of sales, was 42.0% compared to 43.6% in the prior year. The
gross margin decline was mainly attributable to increased raw material costs
and customer resistance to price increases, as well as lower selling prices
for naturals, most notably vanilla. Gross margin was also impacted by costs
attributable to the raw material matter noted above; in the quarter, the
Company expensed approximately $3.0 million in associated costs, comprised
mainly of additional testing costs and the write-off of affected materials. As
previously announced the Company will seek full indemnification from its
supplier, the supplier's insurers and, to the extent required, its own
insurers with regard to any potential costs and customer claims. Research and
Development ("R&D") expenses totaled 8.6% 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 16.1% from 15.9%. SG&A expenses include $2.1
million of equity compensation expense compared to $0.8 expense included in
the 2004 second quarter results. However, this increase was partially offset
by lower accruals under the Company's various incentive plans compared to the
2004 quarter. Interest expense decreased 1% from the prior year. The effective
tax rate for the 2005 second quarter was 30.8% compared to 31.2% reported in
the prior year quarter; variations in the effective rate are mainly
attributable to fluctuations in earnings in the countries in which the Company
operates.
For the six-month period ended June 30, 2005, sales totaled $1,038.6 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 six-month period ended June 30, 2005 would
have decreased 4% compared to the prior year period. For the 2005 period,
fragrance sales increased 4% while flavor sales declined 9%; on a local
currency basis, fragrance sales grew 2% while flavor sales declined 11%.
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 $46.2 million in sales attributable to the
fruit business from the 2004 period, 2005 sales would have increased 1% in
dollars and declined 2% in local currency. Flavor sales, most notably in North
America and Europe, were also unfavorably impacted by lower selling prices for
naturals, mainly vanilla, and by the raw material matter that occurred in the
2005 second quarter, as discussed above.
Sales performance by region for the 2005 six-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%. Functional fragrance
and fine fragrance sales declined 5% and 1%, respectively, while aroma
chemical sales increased 3%. Sales of both fragrances and flavors had a
difficult comparative with the first half of 2004 when sales grew 10% and
11%, respectively.
- Europe sales declined 10% in local currency and 5% in dollars. Fragrance
sales increased 2% in local currency, resulting in an 8% increase in
reported dollar sales. Local currency fine fragrance sales increased 14%,
driven mainly by new wins, while functional fragrances declined 7% and
aroma chemical sales were flat. Local currency flavor sales declined 25%
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 4% in
dollars and declined 1% in local currency. Product contamination issues
also impacted flavor sales in Europe (discussed above).
- Local currency sales in Asia Pacific decreased 1%, resulting in a 1%
increase in reported dollar sales. Fragrance sales decreased 3% in local
currency and 2% in reported dollars; local currency flavor sales
increased 1% and 3% in reported dollars. For the region, sales growth was
strongest in Vietnam and China, with respective local currency increases
of 59% and 4%.
- Latin American sales increased 9% in comparison to the prior year. Flavor
sales increased 10%, benefiting from increases of 9%, 15% and 26% in
Argentina, Brazil and Mexico, respectively. Fragrance sales increased 9%
with Argentina, Mexico and Brazil increasing 22%, 7% and 11%,
respectively.
- India sales increased 15% in local currency and 16% in reported dollars.
This performance was led by a 17% local currency increase in flavor sales
with fragrance sales increasing 13% 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 six-month period ended June 30, 2005 decreased 3% in
comparison to the prior year, as reported; excluding the impact of
restructuring and other charges from the 2004 results, net income declined 7%.
The decline in net income was partially due to the disposition of the European
fruit business; 2004 results included income approximating $4.2 million
attributable to this business. As noted above, 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 41.5% compared to 43.1% in the prior year period. The gross margin decline
was mainly attributable to increased raw material costs and customer
resistance to price increases, as well as lower selling prices for naturals,
most notably vanilla. Gross margin was also impacted by the $3.0 million costs
attributable to the product contamination matter in the second quarter 2005.
R&D expenses totaled 8.6% of sales, consistent with the Company's intended
level of R&D spending. SG&A expenses, as a percentage of sales, were 16.1%
compared to 16.3% reported in the prior year period. Interest expense
decreased 7% from the prior year due to lower average borrowings in 2005
compared to the prior year. The effective tax rate for the six-month period
ended June 30, 2005 and 2004 was 31.0% and 31.3%, respectively; variations in
the effective rate are mainly attributable to fluctuations in earnings in the
countries in which the Company operates.
Outlook for 2005
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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 increase in the low-single digits 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 half of 2005. Margins are expected
to remain under pressure due to anticipated increased supply chain costs
including the impact of the raw material costs as well as expected delays in
fully implementing price increases. The expected margin also contemplates
costs associated with the product contamination issue; the Company has
included all costs that it is aware of or has incurred as a result of the raw
material contamination. As previously announced, the Company will seek full
indemnification from its supplier, the supplier's insurers and, to the extent
required, its own insurers with regard to any potential claims; there can be
no assurance, however, of the final outcome of any claims made, or of the
timing or extent of indemnification from the supplier and its insurers. R&D
expenses are expected to approximate 9% of sales, consistent with the
Company's intended level of R&D spending. R&D spending will increase somewhat
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 $11.0 million
- $14.0 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. Vesting of the RSU's
for the Company's senior management is performance and time based; for the
remainder of eligible employees, vesting is time based (generally over a three
year period). The actual expense will depend upon the value of the Company's
stock and the number of RSU's granted. Interest expense is expected to decline
10% - 12% from 2004. The Company expects the effective tax rate in 2005 to
approximate 31.0%. This tax rate does not contemplate the effect, if any, that
may arise as a result of repatriation from overseas subsidiaries as envisioned
under the American Jobs Creation Act of 2004; the Company expects to determine
the amounts and sources, if any, of foreign earnings to be repatriated in the
second half of 2005.
Based on the foregoing, IFF currently expects earnings per share for 2005 to
be in the range of $2.08 to $2.18 compared to $2.05 reported in 2004.
Excluding restructuring and other charges representing $.22 per share, 2004
results per share were $2.27.
About IFF
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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
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Act of 1995
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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 OexpectO,
ObelieveO, OmayO, "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
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There will be a conference call today at 10:00 AM Eastern Time, at which time
the Company will discuss operating results for the second quarter 2005, and
its current expectations for 2005. The dial in number for U.S.-based
participants is 1-888-202-2422; for international participants, the number is
1-913-981-5592. The pass code for the call is 4993754.
A replay of the conference call will be available from 1:00 PM Eastern Time
beginning on Wednesday July 27, 2005 and ending at Midnight on Wednesday,
August 10. 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 4993754.
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
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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 June 30,
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As Reported Adjustments As-adjusted
2004 (A) 2004 2005
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Net Sales $524,177 $21,622 $502,555 $515,578
Cost of goods sold 295,716 16,580 279,136 299,065
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Gross margin on sales 228,461 5,042 223,419 216,513
Research & development 44,342 612 43,730 44,380
Selling and administrative 83,184 1,654 81,530 82,866
Amortization 3,709 - 3,709 3,767
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97,226 2,776 94,450 85,500
Restructuring and other charges (7,716) - (7,716) -
Interest expense (6,114) - (6,114) (6,062)
Other income (expense), net (1,305) - (1,305) 2,558
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Pretax income 82,091 2,776 79,315 81,996
Income taxes 25,589 865 24,724 25,283
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Net income $56,502 $1,911 $54,591 $56,713
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Including restructuring and other charges:
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Net income $56,502 $54,591 $56,713
Earnings per share - basic $0.60 $0.58 $0.60
Earnings per share - diluted $0.59 $0.57 $0.60
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Excluding restructuring and other charges:
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Net income $61,517 $59,606 $56,713
Results per share - basic $0.65 $0.63 $0.60
Results per share - diluted $0.65 $0.63 $0.60
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(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)
Six Months Ended June 30,
------------------- ------------------- ------------------- -----------------
As Reported Adjustments As-adjusted
2004 (A) 2004 2005
------------------- ------------------- ------------------- -----------------
Net Sales $1,059,192 $46,238 $1,012,954 $1,038,630
Cost of goods sold 602,502 35,507 566,995 607,462
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Gross margin on sales 456,690 10,731 445,959 431,168
Research & development 88,990 1,239 87,751 89,133
Selling and administrative 172,910 3,431 169,479 167,610
Amortization 7,408 - 7,408 7,535
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187,382 6,061 181,321 166,890
Restructuring and other charges (7,716) - (7,716) -
Interest expense (12,571) - (12,571) (11,638)
Other income (expense), net (2,730) - (2,730) 3,114
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Pretax income 164,365 6,061 158,304 158,366
Income taxes 51,505 1,900 49,605 49,110
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Net income $112,860 $4,161 $108,699 $109,256
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Including restructuring and other charges:
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Net income $112,860 $108,699 $109,256
Earnings per share - basic $1.20 $1.16 $1.16
Earnings per share - diluted $1.19 $1.14 $1.14
------------------- ------------------- ------------------- -----------------
Excluding restructuring and other charges:
------------------------------------------
Net income $117,875 $113,714 $109,256
Results per share - basic $1.25 $1.21 $1.16
Results per share - diluted $1.24 $1.19 $1.14
------------------- ------------------- ------------------- -----------------
(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, June 30,
2004 2005
------------------- ------------------
Cash & short-term investments $ 32,995 $ 60,225
Receivables 358,361 387,931
Inventories 457,204 432,073
Other current assets 112,810 103,523
------------------- ------------------
Total current assets 961,370 983,752
Property, plant and equipment, net (1,2) 501,334 484,069
Goodwill and other intangibles, net 789,676 782,141
Other assets 110,914 117,046
------------------- ------------------
Total assets $2,363,294 $2,367,008
=================== ==================
Commercial paper/bank borrowings, overdrafts and
current portion of long-term debt (3) $ 15,957 $ 614,992
Other current liabilities 383,565 326,194
------------------- ------------------
Total current liabilities 399,522 941,186
Long-term debt (3) 668,969 139,420
Non-current liabilities 384,316 397,837
Shareholders' equity 910,487 888,565
------------------- ------------------
Total liabilities and shareholders' equity $2,363,294 $2,367,008
=================== ==================
Notes:
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1. Capital spending - Quarter: $22 million
Year-to-date: $38 million
2. Depreciation - Quarter: $19 million
Year-to-date: $38 million
3. At December 31, 2004 and June 30, 2005 long-term debt includes
unamortized gains and FAS 133 mark to market adjustments of $23.8 million
and $16.5 million, respectively, 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):
------------------------------------------
Second quarter: 2004 2005
-------------- -------------- ---------------
Basic 94,136 93,876
Diluted 95,330 95,255
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Year-to-date: 2004 2005
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Basic 94,085 94,100
Diluted 95,228 95,640
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Quarter ended June 30, 2005 As Reported
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% Change in Sales by Area of Destination Fragrances Flavors Total
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North America - (10) (5)
Europe - Reported 8 (21) (5)
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Europe - Local Currency 2 (25) (9)
Latin America 13 14 13
Asia Pacific - Reported (6) 1 (2)
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Asia Pacific - Local Currency (8) (1) (4)
India - Reported 18 17 17
----------------
India - Local Currency 16 17 16
Total - Reported 5 (9) (2)
----------------
Total - Local Currency 2 (11) (4)
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Quarter ended June 30, 2005 Compared to 2004 As-Adjusted
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Excluding Sales Attributable to European Fruit Preparations Business
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% Change in Sales by Area of Destination Fragrances Flavors Total
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North America - (10) (5)
Europe - Reported 8 4 6
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Europe - Local Currency 2 (1) 1
Latin America 13 14 13
Asia Pacific - Reported (6) 1 (2)
-----------------------
Asia Pacific - Local Currency (8) (1) (4)
India - Reported 18 17 17
----------------
India - Local Currency 16 17 16
Total - Reported 5 - 3
----------------
Total - Local Currency 2 (2) -
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Six-months ended June 30, 2005 As Reported
------------------------------------------
% Change in Sales by Area of Destination Fragrances Flavors Total
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North America (2) (9) (5)
Europe - Reported 8 (22) (5)
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Europe - Local Currency 2 (25) (10)
Latin America 9 10 9
Asia Pacific - Reported (2) 3 1
-----------------------
Asia Pacific - Local Currency (3) 1 (1)
India - Reported 15 17 16
----------------
India - Local Currency 13 17 15
Total - Reported 4 (9) (2)
----------------
Total - Local Currency 2 (11) (4)
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Six-months ended June 30, 2005 Compared to 2004 As-Adjusted
-----------------------------------------------------------
Excluding Sales Attributable to European Fruit Preparations Business
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% Change in Sales by Area of Destination Fragrances Flavors Total
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North America (2) (9) (5)
Europe - Reported 8 4 6
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Europe - Local Currency 2 (1) 1
Latin America 9 10 9
Asia Pacific - Reported (2) 3 1
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Asia Pacific - Local Currency (3) 1 (1)
India - Reported 15 17 16
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India - Local Currency 13 17 15
Total - Reported 4 1 3
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Total - Local Currency 2 (2) -
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