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) January 25, 2006
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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 January 25, 2006 reporting IFF's financial results for the fourth quarter
and twelve months ended December 31, 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 and 2005, the impact of the Company's
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
January 25, 2006.
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: January 25, 2006 By: /s/ Douglas J. Wetmore
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Name: Douglas J. Wetmore
Title: Senior Vice President and
Chief Financial Officer
FOR IMMEDIATE RELEASE
IFF REPORTS FOURTH QUARTER AND FULL YEAR 2005 RESULTS
PROVIDES 2006 SALES AND EARNINGS GUIDANCE
New York, N.Y., January 25, 2006 ... International Flavors & Fragrances Inc.
(NYSE: IFF) ("IFF" or "the Company") reported earnings per share for the fourth
quarter 2005 of $.16 compared to $.43 in the prior year quarter. For the full
year 2005, earnings per share were $2.04 compared to $2.05 in the prior year.
Fourth quarter and full year 2005 and 2004 results included the following:
- Fourth quarter and full year 2005 results include pretax charges totaling
$23.3 million ($15.9 million after tax or $.17 per share) relating to the
elimination of approximately 300 positions in manufacturing, selling,
research and administration functions, principally in the Company's
European and North American operating regions.
- Full year 2005 results also include a net tax benefit of $24.7 million
($.26 per share) relating to the Company's repatriation, in 2005, of $242.0
million of dividends from foreign subsidiaries under the provisions of the
American Jobs Creation Act of 2004 ("AJCA").
- Fourth quarter and full year 2004 results include pretax charges totaling
$4.2 million ($2.7 million after tax or $.03 per share) and $31.8 million
($20.4 million after tax or $.22 per share), respectively, related to the
sale of certain European fruit business assets and the closure of the
Company's Dijon, France manufacturing facility.
Excluding the effects of the charges from both years, and the AJCA benefit from
2005 results, 2005 fourth quarter and full year earnings per share would have
been $.32 and $1.94, respectively, compared to $.46 and $2.27 in the comparable
prior year periods. On an as-adjusted basis, excluding the operating results of
the fruit business and the effects of the charges related to the disposition,
2004 full year earnings per share would have been $2.23; the fourth quarter 2004
impact of excluding fruit sales and operating results was not significant.
Richard A. Goldstein, Chairman and Chief Executive Officer of IFF, commented,
"While a challenging year overall, we are encouraged by the fact that local
currency sales to our five largest customers grew by over 5%, following 7%
growth in 2004. Notably, we also achieved many new fine fragrance wins in 2005.
The continued growth of our largest global accounts and our strong performance
in fine fragrances demonstrate that our customers recognize IFF's unique value
proposition."
Mr. Goldstein continued, "To improve further our financial performance, however,
we must do more. I am confident that the actions we announced in early January
2006 will help reduce costs and improve IFF's overall profitability. We will
continue to take the appropriate steps to manage through this challenging
pricing environment, while also looking for ways to better meet our customers'
needs and create additional value for IFF's shareholders."
Fourth Quarter 2005
-------------------
Fourth quarter 2005 sales totaled $461.6 million, declining 1% in reported
dollars and increasing 1% in local currency compared to the 2004 quarter. The
sales performance was led by continued strong growth in fine fragrances, mainly
driven by new product wins. Flavor sales, most notably in North America and
Europe, were unfavorably impacted by lower selling prices for naturals, mainly
vanilla. Sales by category were as follows:
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Category Reported dollars Local currency
------------------------------ ----------------------- ---------------------
Fine fragrance 12% 16%
Functional fragrance (6%) (4%)
Chemicals (11%) (7%)
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Total fragrances (2%) 1%
Flavors (1%) 1%
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Total (1%) 1%
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Regional sales performance in the quarter was as follows:
- North America fragrance and flavor sales each declined by 1%. Fine
fragrance and aroma chemical sales increased 16% and 4%, respectively,
while functional fragrances decreased 12%.
- European fragrance and flavor sales decreased 7% and 12%, respectively; in
total, regional sales declined 9%. Reported sales were impacted by the
strength of the U.S. dollar against the Euro and the Pound Sterling. Local
currency fragrance sales decreased 1%; fine fragrance sales increased 21%
but this growth was offset by weakness in aroma chemical and functional
fragrance sales, which declined 19% and 7%, respectively. Local currency
flavor sales declined 7%, partially as a result of the disposition of the
European fruit preparations business in the second half of 2004. On an
as-adjusted basis, excluding sales attributable to this business from the
2004 comparative, 2005 flavor sales would have decreased 10% in dollars and
5% in local currency.
- Asia Pacific fragrance and flavor sales increased 3% and 1%, respectively,
with regional sales increasing 1%. Local currency fine fragrance sales
increased 25%, functional fragrance sales were flat and aroma chemical
sales decreased 5%; local currency flavor sales increased 2%. Fragrance
growth was led by Greater China, Indonesia and Vietnam, with respective
local currency increases of 8%, 9% and 37%, partially offset by continued
weakness in Australia and Japan, each of which declined 6% in local
currency. Flavor sales were strongest in Greater China and Vietnam, with
respective local currency increases of 19% and 83%, partially offset by
weakness in Australia, Thailand and the Philippines.
- Latin American sales increased 12% with fragrance and flavor sales
increasing 6% and 29%, respectively, driven mainly by new wins. Flavor
sales growth was strongest in Mexico and Brazil which grew 28% and 38%,
respectively, while fragrances were led by a 15% increase in Mexico.
Functional fragrance and aroma chemical sales increased 7% and 19%,
respectively, while fine fragrance sales decreased 2%.
- India reported 7% sales growth in dollars and 8% in local currency. Local
currency fragrance sales increased 6%, while flavor sales increased 10%. In
both flavors and fragrances, the sales performance reflected the benefit of
new product introductions and continued strong economic conditions.
Net income for the quarter decreased 63% in comparison to the prior year
quarter; excluding the restructuring and other charges from both years, net
income decreased 29%.
Gross profit, as a percentage of sales, was 40.5% compared to 42.6% in the prior
year; the decline was mainly attributable to higher raw material costs which the
Company has not been able to fully recover through increased selling prices, and
weak sales of functional fragrance and aroma chemicals which impacted absorption
of manufacturing expenses.
Research and Development ("R&D") expenses totaled 10.0% of sales compared to
9.2% in the prior year quarter.
Selling, General and Administrative ("SG&A") expenses, as a percentage of sales,
increased to 18.6% from 18.1%. The SG&A increase is primarily the result of
additional costs associated with the product contamination matter, partially
offset by lower accruals under the Company's incentive plans.
Interest expense increased 7% from the prior year due to higher borrowing levels
during the quarter and somewhat higher cost of borrowing.
Full Year 2005
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Sales in 2005 totaled $1,993.4 million, declining 2% in reported dollars and 3%
in local currency in comparison to the prior year. The sales performance was led
by strong growth in fine fragrances driven by new product wins. Flavor sales in
2005 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 $58.3 million in sales attributable to the fruit business from the
2004 results, both 2005 consolidated sales and flavor sales would have increased
1% in dollars and been flat in local currency. Flavor sales, most notably in
North America and Europe, were also unfavorably impacted by lower selling prices
for naturals, mainly vanilla. Sales by category were as follows:
------------------------------ ----------------------- ---------------------
Category Reported dollars Local currency
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Fine fragrance 9% 8%
Functional fragrance (2%) (2%)
Chemicals (2%) (2%)
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Total fragrances 1% 1%
Flavors (6%) (7%)
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Total (2%) (3%)
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Regional sales performance for 2005 was as follows:
- North America fragrance and flavor sales declined 1% and 7%, respectively;
in total, regional sales declined 4%. Fine fragrance and aroma chemical
sales increased 4% and 3%, respectively, while functional fragrance sales
declined 8%.
- Europe sales declined 8% in local currency and 6% in dollars. Fragrance
sales were flat in local currency and increased 2% in reported dollar
sales. Local currency fine fragrance sales increased 13%, driven primarily
by new wins, while functional fragrances and aroma chemicals declined 6%
and 7%, respectively. Local currency flavor sales declined 19% 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
decreased 1% in local currency.
- Asia Pacific sales increased 2% with flavors increasing 4% in dollars and
3% in local currency, while fragrance sales declined 2% in both dollars and
local currency. Flavor sales were strongest in Greater China, Indonesia and
Vietnam, with respective local currency increases of 15%, 7% and 46%.
Fragrance sales growth was strongest in Taiwan, South Korea, Vietnam and
the Philippines with respective local currency increases of 16%, 16%, 56%
and 8%; this growth was offset by sales declines in Australia, Thailand and
Singapore/Malaysia.
- Latin American sales increased 10% with fragrance and flavor sales
increasing 7% and 21%, respectively, driven mainly by new wins. Flavor
sales growth was strongest in Mexico, Brazil and Argentina, which grew 33%,
27% and 22%, respectively, while fragrances were led by an 8% increase in
Mexico and increases of 12% in Argentina and 7% in Brazil. Fragrance sales
grew in all categories with functional fragrance sales increasing 7% while
fine fragrance and aroma chemicals increased 4% and 7%, respectively.
- India sales increased 14% in both local currency and reported dollars. This
performance was led by a 16% local currency increase in flavor sales with
fragrance sales increasing 12%. In both flavors and fragrances, the sales
performance reflected the benefit of new wins.
Net income for 2005 decreased 2% in comparison to the prior year; excluding the
restructuring and other charges from both years, net income decreased 3%.
Gross profit, as a percentage of sales, was 41.4% compared to 42.9% in the prior
year; the margin decline was mainly attributable to higher raw material costs
which the Company was not able to fully recover through increased selling
prices. Gross margin was also negatively impacted by costs attributable to the
vendor-supplied raw material contamination issue reported earlier this year;
cost of sales include $3.0 million in related costs, comprised mainly of
associated testing costs and the write-off of affected materials.
Research and Development ("R&D") expenses totaled 9.0% of sales compared to 8.6%
in the prior year.
SG&A expenses, as a percentage of sales, increased to 17.0% from 16.8%. SG&A
expenses include $8.0 million related to the cost of customer damages
attributable to the raw material contamination issue. These costs were partially
offset by lower accruals under the Company's various incentive plans.
Interest expense was flat with the prior year as a result of lower average
borrowings during the year, partially offset by somewhat higher costs of
borrowing; the average rate on borrowings during 2005 was 3.3% compared to 3.0%
in 2004. Gross borrowings at December 31, 2005 increased in comparison to the
prior year in connection with repatriation of foreign earnings under the AJCA.
The AJCA tax benefit results from the reduction of prior accruals relating to
the repatriation of foreign earnings, net of the temporary reduced cost of
eligible repatriated foreign earnings as provided for in AJCA. The full year
effective tax rate was 21.6%; excluding the impact of AJCA, the effective tax
rate for the 2005 year would have been 31.6%.
Reorganization Actions
----------------------
In January 2006, the Company announced plans to eliminate approximately 300
positions in manufacturing, selling, research and administration functions,
principally in its European and North American operating regions; the reductions
represent 6% of the Company's workforce. As a result of these actions, the
Company anticipates recording pre-tax restructuring charges of $25 million to
$30 million relating primarily to employee separation expenses; of this, $23.3
million, or $.17 per share after tax, was recognized in the fourth quarter 2005.
The remaining charges are expected to be recognized in the first half of 2006.
Annual savings from these actions are expected to approximate $16 million to $18
million.
Outlook for 2006
----------------
IFF currently expects 2006 local currency sales to increase in the low single
digits in comparison to 2005; based on current exchange rates, such local
currency performance is expected to result in a low single digit increase in
reported dollars.
- Gross profit as a percentage of sales is expected to improve slightly from
2005 mainly due to improved sales performance, product mix, implementation
of price increases and savings resulting from the restructuring actions.
- Research and development expenses are expected to approximate 9.0% of
sales.
- SG&A expenses, as a percentage of sales, are expected to decrease somewhat
from 2005 levels, mainly as a result of the restructuring activities and
absence of costs associated with product contamination; partially
offsetting these savings will be the inclusion of $14.0 to $16.0 million in
equity compensation expense in 2006, compared to $7.0 million of such
expense in 2005. Vesting of RSU's 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 approximately 10% from 2005 mainly
based on anticipated lower levels of debt.
- The effective tax rate in 2006 is expected to approximate 31%.
Based on the foregoing, IFF currently expects earnings per share for 2006 to be
in the range of $2.23 to $2.31.
The above guidance excludes the impact of adoption of Statement of Financial
Accounting Standards No. 123(R) "Share Based Payment" ("FAS 123") which the
Company will adopt in the first quarter 2006. The Company is currently
evaluating the impact of adopting the standard.
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 significant 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 fourth quarter 2005, and its
current expectations for 2006. 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 4763540.
A replay of the conference call will be available beginning at 1:00 PM Eastern
Time on Wednesday, January 25, 2006 and ending at Midnight on Wednesday,
February 8, 2006. 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 4763540.
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)
Quarter Ended December 31,
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As Reported Adjustments As-Adjusted
2004 (A) 2004 2005
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Net sales $468,232 $1,479 $466,753 $461,645
Cost of goods sold 268,681 1,482 267,199 274,818
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Gross margin on sales 199,551 (3) 199,554 186,827
Research & development 43,059 76 42,983 46,028
Selling and administrative 84,702 163 84,539 85,691
Amortization 3,713 - 3,713 3,768
Restructuring and other charges 4,164 - 4,164 23,319
------------------ ------------------- ------------------ -----------------
63,913 (242) 64,155 28,021
Interest expense (5,390) - (5,390) (5,752)
Other income (expense), net (2,221) - (2,221) (700)
------------------ ------------------- ------------------ -----------------
Pretax income 56,302 (242) 56,544 21,569
Income taxes 15,396 (73) 15,469 6,331
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Net income $40,906 (169) $ 41,075 $15,238
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Including restructuring and other charges:
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Net income $40,906 $ 41,075 $15,238
Earnings per share - basic $0.43 $0.44 $0.16
Earnings per share - diluted $0.43 $0.43 $0.16
------------------ ------------------- ------------------ -----------------
Excluding restructuring and other charges:
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Net income $43,571 $ 43,740 $31,095
Results per share - basic $0.46 $0.46 $0.34
Results per share - diluted $0.46 $0.46 $0.33
------------------ ------------------- ------------------ -----------------
Average shares outstanding (in thousands):
------------------------------------------
Basic 94,232 94,232 92,757
Diluted 95,718 95,718 93,404
------------------ ------------------- ------------------ -----------------
(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)
Twelve months Ended December 31,
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As Reported Adjustments As-Adjusted
2004 (A) 2004 2005
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Net sales $2,033,653 $58,317 $1,975,336 $1,993,393
Cost of goods sold 1,160,235 46,314 1,113,921 1,168,992
------------------- ------------------- ------------------- -----------------
Gross margin on sales 873,418 12,003 861,415 824,401
Research & development 175,173 1,736 173,437 179,812
Selling and administrative 341,306 4,693 336,613 339,323
Amortization 14,830 - 14,830 15,071
Restructuring and other charges 31,830 - 31,830 23,319
------------------- ------------------- ------------------- -----------------
310,279 5,574 304,705 266,876
Interest expense (24,002) - (24,002) (23,956)
Other income (expense), net (5,275) - (5,275) 3,268
------------------- ------------------- ------------------- -----------------
Pretax income 281,002 5,574 275,428 246,188
Income taxes 84,931 1,753 83,178 53,122
------------------- ------------------- ------------------- -----------------
Net income $ 196,071 $3,821 $ 192,250 $ 193,066
------------------- ------------------- ------------------- -----------------
Including restructuring and other charges:
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Net income $196,071 $192,250 $193,066
Earnings per share - basic $2.08 $2.04 $2.06
Earnings per share - diluted $2.05 $2.01 $2.04
------------------- ------------------- ------------------- -----------------
Excluding restructuring and other charges:
------------------------------------------
Net income $216,441 $212,620 $208,923
Results per share - basic $2.30 $2.26 $2.23
Results per share - diluted $2.27 $2.23 $2.20
------------------- ------------------- ------------------- -----------------
Average shares outstanding (in thousands):
-----------------------------------------
Basic 94,143 94,143 93,584
Diluted 95,418 95,418 94,826
------------------- ------------------- ------------------- -----------------
(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)
------------------- ------------------
December 31, 2004 December 31, 2005
------------------ -------------------
Cash & short-term investments $ 32,995 $ 272,897
Receivables 358,361 355,019
Inventories 457,204 430,794
Other current assets 112,810 119,047
------------------- ------------------
Total current assets 961,370 1,177,757
Property, plant and equipment, net (1,2) 501,334 499,145
Goodwill and other intangibles, net 789,676 772,651
Other assets 110,914 173,878
------------------- ------------------
Total assets $2,363,294 $2,623,431
=================== ==================
Commercial paper, bank borrowings, overdrafts
and current portion of long-term debt (3) $ 15,957 $ 819,392
Other current liabilities 383,565 367,229
------------------- ------------------
Total current liabilities 399,522 1,186,621
Long-term debt (3) 668,969 131,281
Non-current liabilities 384,316 390,150
Shareholders' equity 910,487 915,379
------------------- ------------------
Total liabilities and shareholders' equity $2,363,294 $2,623,431
=================== ==================
Notes:
------
1. Capital spending - Quarter: $32 million
Full year: $93 million
2. Depreciation - Quarter: $19 million
Full year: $77 million
3. At December 31, 2004 and 2005 long-term debt includes unamortized
gains and FAS 133 mark to market adjustments of $23.8 million and $2.3
million, respectively; at December 31, 2005 commercial paper, bank
borrowings, overdrafts and current portion of long-term debt includes
unamortized gains of $5.6 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.
********************
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2005 vs 2004 Reported
--------------------- Quarter Full year 2005
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% Change in Sales by Region of Destination Frag Flav Total Frag Flav Total
------------------------------------------- -------------------------------------------- ------------------------------------------
North America (1) (1) (1) (1) (7) (4)
Europe - Reported (7) (12) (9) 2 (18) (6)
-----------------
Europe - Local Currency (1) (7) (3) - (19) (8)
Latin America 6 29 12 7 21 10
Asia Pacific - Reported 3 1 1 (2) 4 2
-----------------------
Asia Pacific - Local Currency 5 2 3 (2) 3 1
India - Reported 4 9 7 13 16 14
----------------
India - Local Currency 6 10 8 12 16 14
Total - Reported (2) (1) (1) 1 (6) (2)
----------------
Total - Local Currency 1 1 1 1 (7) (3)
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2005 vs 2004 As-Adjusted*
--------------------- Quarter Full year 2005
------------------------------------------- ------------------------------------------
% Change in Sales by Region of Destination Frag Flav Total Frag Flav Total
------------------------------------------- -------------------------------------------- ------------------------------------------
North America (1) (1) (1) (1) (7) (4)
Europe - Reported (7) (10) (8) 2 - 1
-----------------
Europe - Local Currency (1) (5) (2) - (1) -
Latin America 6 29 12 7 21 10
Asia Pacific - Reported 3 1 1 (2) 4 2
-----------------------
Asia Pacific - Local Currency 5 2 3 (2) 3 1
India - Reported 4 9 7 13 16 14
----------------
India - Local Currency 6 10 8 12 16 14
Total - Reported (2) (1) (1) 1 1 1
----------------
Total - Local Currency 1 1 1 1 - -
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* Excluding Sales Attributable to European Fruit Preparation Business from 2004
comparative.