|
|
 | | | |
- close
- close
- close
- close
These excerpts taken from the GIS 10-K filed Jul 11, 2008. FISCAL
2007 CONSOLIDATED RESULTS OF OPERATIONS
For fiscal 2007, we reported diluted EPS of $3.18, up
9.7 percent from $2.90 per share earned in fiscal 2006.
Earnings after tax were $1,143.9 million in fiscal 2007, up
4.9 percent from $1,090.3 million in fiscal 2006.
The components of net sales growth are shown in the following
table:
Components of
Net Sales Growth
Net sales for fiscal 2007 grew 6.2 percent to
$12.4 billion, driven by 3.4 percentage points from
volume growth, mainly in our U.S. Retail and International
segments, and 2.2 percentage points of growth from net
price realization and product mix across many of our businesses.
In addition, foreign currency exchange effects added
0.6 percentage points of growth.
Cost of sales was up $410.3 million in fiscal 2007
versus fiscal 2006. Higher volume drove $264.4 million of
this increase along with an increase of $145.9 million in
input costs and changes in mix. Cost of sales as a percent of
net sales decreased from 64.4 percent in fiscal 2006 to
63.9 percent in fiscal 2007 as $115.0 million of
higher ingredient (mostly grains and dairy) and energy costs
were more than offset by efficiency gains at our manufacturing
facilities.
SG&A expenses increased by $211.6 million in
fiscal 2007 versus fiscal 2006. SG&A expense as a percent
of net sales increased from 18.6 percent in fiscal 2006 to
19.2 percent in fiscal 2007. The increase in SG&A
expense from fiscal 2006 was largely the result of an
8.2 percent increase in media and brand-building consumer
marketing spending and $68.8 million of incremental stock
compensation expense resulting from our adoption of
SFAS No. 123 (Revised), “Share-Based
Payment” (SFAS 123R).
Net interest for fiscal 2007 totaled $426.5 million,
$26.9 million higher than net interest for fiscal 2006.
Higher interest rates caused nearly all of the increase. Net
interest includes preferred distributions paid on minority
interests. The average rate on our total outstanding debt and
minority interests was 6.3 percent in fiscal 2007, compared
to 5.8 percent in fiscal 2006.
Restructuring, impairment, and other exit costs totaled
$39.3 million in fiscal 2007 as follows:
In fiscal 2007, we concluded that the future cash flows
generated by certain product lines in our Bakeries and
Foodservice segment would not be sufficient to recover the net
book value of the related long-lived assets, and we recorded a
noncash impairment charge against these assets.
The effective income tax rate was 34.3 percent for
fiscal 2007, including an increase of $29.4 million in
benefits from our international tax structure and benefits from
the settlement of tax audits. In fiscal 2006, our effective
income tax rate was 34.5 percent, including the benefit of
$11.0 million of adjustments to deferred tax liabilities
associated with our International segment’s brand
intangibles.
After-tax earnings from joint ventures totaled
$72.7 million in fiscal 2007, compared to
$69.2 million in fiscal 2006. In fiscal 2007, net sales for
CPW grew 17.9 percent, including 5.5 points of incremental
sales from the Uncle Tobys cereal business it acquired in
Australia. In February 2006, CPW announced a restructuring of
its manufacturing plants in the United Kingdom. Our after-tax
earnings from joint ventures were reduced by
Table of Contents
$8.2 million in both fiscal 2007 and 2006 for our share of
the restructuring costs, mainly accelerated depreciation and
severance. Net sales for our Häagen-Dazs joint ventures in
Asia declined 6.8 percent in fiscal 2007, reflecting a
change in our reporting period for these joint ventures. We
changed this reporting period to include results through
March 31. In previous years, we included results for the
twelve months ended April 30. Accordingly, fiscal 2007
included only 11 months of results from these joint
ventures, compared to 12 months in fiscal 2006. The impact
of this change was not material to our consolidated results of
operations, so we did not restate prior periods for
comparability.
Average diluted shares outstanding decreased by
18.6 million from fiscal 2006 due to our repurchase of
25.3 million shares of stock during fiscal 2007, partially
offset by increases in diluted shares outstanding from the
issuance of annual stock awards.
FISCAL 2007 CONSOLIDATED RESULTS OF OPERATIONS For fiscal 2007, we reported diluted EPS of $3.18, up 9.7 percent from $2.90 per share earned in fiscal 2006. Earnings after tax were $1,143.9 million in fiscal 2007, up 4.9 percent from $1,090.3 million in fiscal 2006. The components of net sales growth are shown in the following table: Components of Net Sales Growth
Net sales for fiscal 2007 grew 6.2 percent to $12.4 billion, driven by 3.4 percentage points from volume growth, mainly in our U.S. Retail and International segments, and 2.2 percentage points of growth from net price realization and product mix across many of our businesses. In addition, foreign currency exchange effects added 0.6 percentage points of growth. Cost of sales was up $410.3 million in fiscal 2007 versus fiscal 2006. Higher volume drove $264.4 million of this increase along with an increase of $145.9 million in input costs and changes in mix. Cost of sales as a percent of net sales decreased from 64.4 percent in fiscal 2006 to 63.9 percent in fiscal 2007 as $115.0 million of higher ingredient (mostly grains and dairy) and energy costs were more than offset by efficiency gains at our manufacturing facilities. SG&A expenses increased by $211.6 million in fiscal 2007 versus fiscal 2006. SG&A expense as a percent of net sales increased from 18.6 percent in fiscal 2006 to 19.2 percent in fiscal 2007. The increase in SG&A expense from fiscal 2006 was largely the result of an 8.2 percent increase in media and brand-building consumer marketing spending and $68.8 million of incremental stock compensation expense resulting from our adoption of SFAS No. 123 (Revised), “Share-Based Payment” (SFAS 123R). Net interest for fiscal 2007 totaled $426.5 million, $26.9 million higher than net interest for fiscal 2006. Higher interest rates caused nearly all of the increase. Net interest includes preferred distributions paid on minority interests. The average rate on our total outstanding debt and minority interests was 6.3 percent in fiscal 2007, compared to 5.8 percent in fiscal 2006. Restructuring, impairment, and other exit costs totaled $39.3 million in fiscal 2007 as follows:
In fiscal 2007, we concluded that the future cash flows generated by certain product lines in our Bakeries and Foodservice segment would not be sufficient to recover the net book value of the related long-lived assets, and we recorded a noncash impairment charge against these assets. The effective income tax rate was 34.3 percent for fiscal 2007, including an increase of $29.4 million in benefits from our international tax structure and benefits from the settlement of tax audits. In fiscal 2006, our effective income tax rate was 34.5 percent, including the benefit of $11.0 million of adjustments to deferred tax liabilities associated with our International segment’s brand intangibles. After-tax earnings from joint ventures totaled $72.7 million in fiscal 2007, compared to $69.2 million in fiscal 2006. In fiscal 2007, net sales for CPW grew 17.9 percent, including 5.5 points of incremental sales from the Uncle Tobys cereal business it acquired in Australia. In February 2006, CPW announced a restructuring of its manufacturing plants in the United Kingdom. Our after-tax earnings from joint ventures were reduced by
Table of Contents$8.2 million in both fiscal 2007 and 2006 for our share of the restructuring costs, mainly accelerated depreciation and severance. Net sales for our Häagen-Dazs joint ventures in Asia declined 6.8 percent in fiscal 2007, reflecting a change in our reporting period for these joint ventures. We changed this reporting period to include results through March 31. In previous years, we included results for the twelve months ended April 30. Accordingly, fiscal 2007 included only 11 months of results from these joint ventures, compared to 12 months in fiscal 2006. The impact of this change was not material to our consolidated results of operations, so we did not restate prior periods for comparability. Average diluted shares outstanding decreased by 18.6 million from fiscal 2006 due to our repurchase of 25.3 million shares of stock during fiscal 2007, partially offset by increases in diluted shares outstanding from the issuance of annual stock awards. | EXCERPTS ON THIS PAGE:
RELATED TOPICS for GIS: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| |||||||
