News Release
Campbell Reports Second-Quarter Results
- Campbell Raises Fiscal 2020
Adjusted Earnings Per Share (EPS) Guidance Range to$2.55 -$2.60 Net Sales were Comparable to Prior Year; Organic Net Sales Increased 1%- EPS from Continuing Operations of
$0.56 Decreased 3% Primarily Reflecting Loss on Extinguishment of Debt; Adjusted EPS of$0.72 Increased 11% - Significant Reduction in Debt Levels Compared to Prior Year Following Successful Completion of Previously Announced Divestiture Plan
Continuing Operations |
Three Months Ended |
|
Six Months Ended |
|||||||||
($ in millions, except per share) |
2020 |
|
2019 |
|
% Change |
|
2020 |
|
2019 |
|
% Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As Reported (GAAP) |
|
|
|
|
- % |
|
|
|
|
|
(1)% |
|
Organic |
|
|
|
|
1% |
|
|
|
|
|
- % |
|
Earnings Before Interest and Taxes (EBIT) |
|
|
|
|
|
|
|
|
|
|
|
|
As Reported (GAAP) |
|
|
|
|
8% |
|
|
|
|
|
2% |
|
Adjusted |
|
|
|
|
4% |
|
|
|
|
|
5% |
|
Diluted Earnings Per Share |
|
|
|
|
|
|
|
|
|
|
|
|
As Reported (GAAP) |
|
|
|
|
(3)% |
|
|
|
|
|
(5)% |
|
Adjusted |
|
|
|
|
11% |
|
|
|
|
|
11% |
|
Note: A detailed reconciliation of the reported (GAAP) financial information to the adjusted financial information is included at the end of this news release.
CEO Comments
Items Impacting Comparability for Continuing Operations
The table below presents a summary of items impacting comparability in each period. A detailed reconciliation of the reported (GAAP) financial information to the adjusted information is included at the end of this news release.
|
Diluted Earnings Per Share |
|||||||
|
Three Months Ended |
|
Six Months Ended |
|||||
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
As Reported (GAAP) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring charges, implementation costs and other related costs associated with cost savings initiatives |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on extinguishment of debt |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
Tax (benefit) / loss on sale of European chips business |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
Pension settlement gains |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
Nonrecurring tax expense related to |
- |
|
|
|
- |
|
|
|
Adjusted |
|
|
|
|
|
|
|
|
Second-Quarter Results from Continuing Operations
Net sales were comparable to the prior year. Organic net sales, which exclude the impact from the sale of the European chips business, increased 1% from the prior year driven by gains in Snacks.
Gross margin increased from 32.5% to 34.3%. Excluding items impacting comparability, adjusted gross margin increased 150 basis points to 34.4% driven primarily by productivity improvements, the benefits from cost savings initiatives and favorable product mix, offset partly by cost inflation.
Marketing and selling expenses increased 7% to
Other income was
As reported EBIT increased 8% to
Net interest expense was
The company reported EPS of
First-Half Results from Continuing Operations
Net sales decreased 1% reflecting a 1-point negative impact from the sale of the European chips business. Organic net sales were comparable to the prior year.
As reported EBIT increased 2% to
Net interest expense was
The company reported EPS of
Cash flows from operations were
Campbell Raises Fiscal 2020 Adjusted EPS Guidance
Campbell now expects adjusted EPS to be in the range of
Fiscal 2020 comprises 53 weeks, one additional week compared to fiscal 2019. The benefit of the 53rd week, consistent with the prior fiscal 2020 guidance, is estimated to be worth two points of net sales, adjusted EBIT and adjusted EPS. The outlook for organic net sales excludes the negative impact from the sale of the European chips business along with the estimated contribution of the 53rd week.
Continuing Operations |
|
2019 Results |
|
Previous 2020 Guidance |
|
Updated 2020 Guidance |
($ in millions, except per share) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-1 to +1% |
|
-1 to +1% |
Organic |
|
|
|
-1 to +1% |
|
-1 to +1% |
Adjusted EBIT |
|
|
|
+2 to +4% |
|
+2 to +4% |
Adjusted EPS |
|
|
|
+9 to +11% |
|
+11 to +13% |
* Adjusted – refer to the detailed reconciliation of the reported (GAAP) financial information to the adjusted financial information at the end of this news release.
Note: A non-GAAP reconciliation is not provided for 2020 guidance as certain amounts are not estimable, such as pension and postretirement mark-to-market adjustments, and these items are not considered to reflect the company's ongoing business results.
Cost Savings Program from Continuing Operations
In the second quarter of fiscal 2020, Campbell achieved
Segment Operating Review
An analysis of net sales and operating earnings by reportable segment follows:
|
Three Months Ended ($ in millions) |
|||||
|
Meals & Beverages |
|
Snacks |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume and Mix |
-% |
|
2% |
|
1% |
|
Price and Sales Allowances |
2% |
|
-% |
|
1% |
|
Promotional Spending |
(2)% |
|
-% |
|
(1)% |
|
Organic |
-% |
|
2% |
|
1% |
|
Currency |
-% |
|
-% |
|
-% |
|
Divestiture |
-% |
|
(3)% |
|
(1)% |
|
% Change vs. Prior Year |
-% |
|
(1)% |
|
-% |
|
Segment Operating Earnings |
|
|
|
|
|
|
% Change vs. Prior Year |
(4)% |
|
3% |
|
|
|
Note: A detailed reconciliation of the reported (GAAP) net sales to organic net sales is included at the end of this news release.
|
Six Months Ended ($ in millions) |
|||||
|
Meals & Beverages |
|
Snacks |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume and Mix |
(1)% |
|
2% |
|
-% |
|
Price and Sales Allowances |
2% |
|
-% |
|
1% |
|
Promotional Spending |
(2)% |
|
-% |
|
(1)% |
|
Organic |
(1)% |
|
2% |
|
-% |
|
Currency |
-% |
|
-% |
|
-% |
|
Divestiture |
-% |
|
(2)% |
|
(1)% |
|
% Change vs. Prior Year |
(1)% |
|
-% |
|
(1)% |
|
Segment Operating Earnings |
|
|
|
|
|
|
% Change vs. Prior Year |
(3)% |
|
2% |
|
|
|
Note: A detailed reconciliation of the reported (GAAP) net sales to organic net sales is included at the end of this news release.
Meals & Beverages
Net sales in the quarter were comparable to prior year driven primarily by gains in Prego pasta sauces and
Segment operating earnings decreased 4% to
Snacks
Net sales in the quarter decreased 1%. Excluding the impact from the sale of the European chips business, net sales increased 2% driven primarily by gains in Goldfish crackers and
Segment operating earnings increased 3% to
Corporate
Corporate expenses in the second quarter of fiscal 2020 included costs related to cost savings initiatives of
Discontinued Operations
The results for
Conference Call and Webcast
Campbell will host a conference call to discuss these results today at
Reportable Segments
Meals & Beverages includes the retail and foodservice businesses in the
Snacks includes
About
Campbell (NYSE:CPB) is driven and inspired by our purpose, "Real food that matters for life's moments." For generations, people have trusted Campbell to provide authentic, flavorful and affordable snacks, soups and simple meals, and beverages. Founded in 1869, Campbell has a heritage of giving back and acting as a good steward of the planet's natural resources. The company is a member of the Standard and Poor's 500 and the FTSE4Good Index. For more information, visit www.campbellsoupcompany.com or follow company news on Twitter via @CampbellSoupCo.
Forward-Looking Statements
This release contains “forward-looking statements” that reflect the company’s current expectations about the impact of its future plans and performance on the company’s business or financial results. These forward-looking statements, including any statements made regarding sales, EBIT and EPS guidance, rely on a number of assumptions and estimates that could be inaccurate and which are subject to risks and uncertainties. The factors that could cause the company’s actual results to vary materially from those anticipated or expressed in any forward-looking statement include: (1) the company’s ability to execute on and realize the expected benefits from its strategy, including growing sales in snacks and maintaining its market share position in soup; (2) the impact of strong competitive responses to the company’s efforts to leverage its brand power with product innovation, promotional programs and new advertising; (3) the risks associated with trade and consumer acceptance of product improvements, shelving initiatives, new products and pricing and promotional strategies; (4) the company’s indebtedness and ability to pay such indebtedness; (5) the ability to realize projected cost savings and benefits from cost savings initiatives and the integration of recent acquisitions; (6) disruptions to the company’s supply chain and/or operations, including from the recent coronavirus outbreak as well as fluctuations in the supply of and inflation in energy and raw and packaging materials cost; (7) the company’s ability to manage changes to its organizational structure and/or business processes, including selling, distribution, manufacturing and information management systems or processes; (8) changes in consumer demand for the company’s products and favorable perception of the company’s brands; (9) changing inventory management practices by certain of the company’s key customers; (10) a changing customer landscape, with value and e-commerce retailers expanding their market presence, while certain of the company’s key customers maintain significance to the company’s business; (11) product quality and safety issues, including recalls and product liabilities; (12) the possible disruption to the independent contractor distribution models used by certain of the company’s businesses, including as a result of litigation or regulatory actions affecting their independent contractor classification; (13) the uncertainties of litigation and regulatory actions against the company; (14) the costs, disruption and diversion of management’s attention associated with activist investors; (15) a material failure in or breach of the company’s information technology systems; (16) impairment to goodwill or other intangible assets; (17) the company’s ability to protect its intellectual property rights; (18) increased liabilities and costs related to the company’s defined benefit pension plans; (19) the company’s ability to attract and retain key talent; (20) changes in currency exchange rates, tax rates, interest rates, debt and equity markets, inflation rates, economic conditions, law, regulation and other external factors; (21) unforeseen business disruptions in one or more of the company’s markets due to political instability, civil disobedience, terrorism, armed hostilities, extreme weather conditions, natural disasters, pandemics or other calamities; and (22) other factors described in the company’s most recent Form 10-K and subsequent
CONSOLIDATED STATEMENTS OF EARNINGS (unaudited) (millions, except per share amounts) |
||||||||
|
|
Three Months Ended |
||||||
|
|
|
|
|
||||
Net sales |
|
$ |
2,162 |
|
|
$ |
2,172 |
|
Costs and expenses |
|
|
|
|
||||
Cost of products sold |
|
|
1,420 |
|
|
|
1,466 |
|
Marketing and selling expenses |
|
|
237 |
|
|
|
221 |
|
Administrative expenses |
|
|
148 |
|
|
|
146 |
|
Research and development expenses |
|
|
22 |
|
|
|
20 |
|
Other expenses / (income) |
|
|
(22 |
) |
|
|
(8 |
) |
Restructuring charges |
|
|
7 |
|
|
|
2 |
|
Total costs and expenses |
|
|
1,812 |
|
|
|
1,847 |
|
Earnings before interest and taxes |
|
|
350 |
|
|
|
325 |
|
Interest, net |
|
|
146 |
|
|
|
91 |
|
Earnings before taxes |
|
|
204 |
|
|
|
234 |
|
Taxes on earnings |
|
|
33 |
|
|
|
58 |
|
Earnings from continuing operations |
|
|
171 |
|
|
|
176 |
|
Earnings (loss) from discontinued operations |
|
|
1,037 |
|
|
|
(235 |
) |
Net earnings (loss) |
|
|
1,208 |
|
|
|
(59 |
) |
Net loss attributable to noncontrolling interests |
|
|
— |
|
— |
|||
Net earnings (loss) attributable to |
|
$ |
1,208 |
|
|
$ |
(59 |
) |
Per share - basic |
|
|
|
|
||||
Earnings from continuing operations attributable to |
|
$ |
.57 |
|
|
$ |
.58 |
|
Earnings (loss) from discontinued operations |
|
|
3.43 |
|
|
|
(.78 |
) |
Net earnings (loss) attributable to |
|
$ |
4.00 |
|
|
$ |
(.20 |
) |
Dividends |
|
$ |
.35 |
|
|
$ |
.35 |
|
Weighted average shares outstanding - basic |
|
|
302 |
|
|
|
301 |
|
Per share - assuming dilution |
|
|
|
|
||||
Earnings from continuing operations attributable to |
|
$ |
.56 |
|
|
$ |
.58 |
|
Earnings (loss) from discontinued operations |
|
|
3.41 |
|
|
|
(.78 |
) |
Net earnings (loss) attributable to |
|
$ |
3.97 |
|
|
$ |
(.20 |
) |
Weighted average shares outstanding - assuming dilution |
|
|
304 |
|
|
|
302 |
|
CONSOLIDATED STATEMENTS OF EARNINGS (unaudited) (millions, except per share amounts) |
|||||||
|
|
Six Months Ended |
|||||
|
|
|
|
|
|||
Net sales |
|
$ |
4,345 |
|
$ |
4,374 |
|
Costs and expenses |
|
|
|
|
|
||
Cost of products sold |
|
|
2,865 |
|
|
2,942 |
|
Marketing and selling expenses |
|
|
443 |
|
|
432 |
|
Administrative expenses |
|
|
282 |
|
|
294 |
|
Research and development expenses |
|
|
44 |
|
|
43 |
|
Other expenses / (income) |
|
|
34 |
|
|
(8 |
) |
Restructuring charges |
|
|
10 |
|
|
20 |
|
Total costs and expenses |
|
|
3,678 |
|
|
3,723 |
|
Earnings before interest and taxes |
|
|
667 |
|
|
651 |
|
Interest, net |
|
|
226 |
|
|
181 |
|
Earnings before taxes |
|
|
441 |
|
|
470 |
|
Taxes on earnings |
|
|
101 |
|
|
114 |
|
Earnings from continuing operations |
|
|
340 |
|
|
356 |
|
Earnings (loss) from discontinued operations |
|
|
1,034 |
|
|
(221 |
) |
Net earnings |
|
|
1,374 |
|
|
135 |
|
Net loss attributable to noncontrolling interests |
|
|
— |
|
— |
||
Net earnings attributable to |
|
$ |
1,374 |
|
$ |
135 |
|
Per share - basic |
|
|
|
|
|||
Earnings from continuing operations attributable to |
|
$ |
1.13 |
|
$ |
1.18 |
|
Earnings (loss) from discontinued operations |
|
|
3.44 |
|
|
(.73 |
) |
Net earnings attributable to |
|
$ |
4.56 |
|
$ |
.45 |
|
Dividends |
|
$ |
.70 |
|
$ |
.70 |
|
Weighted average shares outstanding - basic |
|
|
301 |
|
|
301 |
|
Per share - assuming dilution |
|
|
|
|
|||
Earnings from continuing operations attributable to |
|
$ |
1.12 |
|
$ |
1.18 |
|
Earnings (loss) from discontinued operations |
|
|
3.41 |
|
|
(.73 |
) |
Net earnings attributable to |
|
$ |
4.53 |
|
$ |
.45 |
|
Weighted average shares outstanding - assuming dilution |
|
|
303 |
|
|
302 |
|
*The sum of individual per share amounts may not add due to rounding. |
|||||||
|
||||||||||
CONSOLIDATED SUPPLEMENTAL SCHEDULE OF SALES AND EARNINGS (unaudited) (millions, except per share amounts) |
||||||||||
|
Three Months Ended |
|
|
|||||||
|
|
|
|
|
Percent Change |
|||||
Sales |
|
|
|
|
|
|||||
Contributions: |
|
|
|
|
|
|||||
Meals & Beverages |
$ |
1,224 |
|
|
$ |
1,222 |
|
|
—% |
|
Snacks |
|
938 |
|
|
|
949 |
|
|
(1)% |
|
Corporate |
|
— |
|
|
1 |
|
|
n/m |
||
Total sales |
$ |
2,162 |
|
|
$ |
2,172 |
|
|
—% |
|
Earnings |
|
|
|
|
|
|||||
Contributions: |
|
|
|
|
|
|||||
Meals & Beverages |
$ |
242 |
|
|
$ |
253 |
|
|
(4)% |
|
Snacks |
|
136 |
|
|
|
132 |
|
|
3% |
|
Total operating earnings |
|
378 |
|
|
|
385 |
|
|
(2)% |
|
Corporate |
|
(21 |
) |
|
|
(58 |
) |
|
|
|
Restructuring charges |
|
(7 |
) |
|
|
(2 |
) |
|
|
|
Earnings before interest and taxes |
|
350 |
|
|
|
325 |
|
|
8% |
|
Interest, net |
|
146 |
|
|
|
91 |
|
|
|
|
Taxes on earnings |
|
33 |
|
|
|
58 |
|
|
|
|
Earnings from continuing operations |
|
171 |
|
|
|
176 |
|
|
|
|
Earnings (loss) from discontinued operations |
|
1,037 |
|
|
|
(235 |
) |
|
|
|
Net earnings (loss) |
|
1,208 |
|
|
|
(59 |
) |
|
n/m |
|
Net loss attributable to noncontrolling interests |
|
— |
|
— |
|
|
||||
Net earnings (loss) attributable to |
$ |
1,208 |
|
|
$ |
(59 |
) |
|
n/m |
|
Per share - assuming dilution |
|
|
|
|
|
|||||
Earnings from continuing operations attributable to |
$ |
.56 |
|
|
$ |
.58 |
|
|
|
|
Earnings (loss) from discontinued operations |
|
3.41 |
|
|
|
(.78 |
) |
|
|
|
Net earnings (loss) attributable to |
$ |
3.97 |
|
|
$ |
(.20 |
) |
|
n/m |
|
n/m - not meaningful |
Beginning in fiscal 2020, the business in
On
On
Prior periods have been adjusted retrospectively to reflect these changes.
CONSOLIDATED SUPPLEMENTAL SCHEDULE OF SALES AND EARNINGS (unaudited) (millions, except per share amounts) |
||||||||||
|
Six Months Ended |
|
|
|||||||
|
|
|
|
|
Percent Change |
|||||
Sales |
|
|
|
|
|
|||||
Contributions: |
|
|
|
|
|
|||||
Meals & Beverages |
$ |
2,418 |
|
|
$ |
2,451 |
|
|
(1)% |
|
Snacks |
|
1,927 |
|
|
|
1,922 |
|
|
—% |
|
Corporate |
|
— |
|
|
1 |
|
|
n/m |
||
Total sales |
$ |
4,345 |
|
|
$ |
4,374 |
|
|
(1)% |
|
Earnings |
|
|
|
|
|
|||||
Contributions: |
|
|
|
|
|
|||||
Meals & Beverages |
$ |
524 |
|
|
|
543 |
|
|
(3)% |
|
Snacks |
|
261 |
|
|
|
257 |
|
|
2% |
|
Total operating earnings |
|
785 |
|
|
|
800 |
|
|
(2)% |
|
Corporate |
|
(108 |
) |
|
|
(129 |
) |
|
|
|
Restructuring charges |
|
(10 |
) |
|
|
(20 |
) |
|
|
|
Earnings before interest and taxes |
|
667 |
|
|
|
651 |
|
|
2% |
|
Interest, net |
|
226 |
|
|
|
181 |
|
|
|
|
Taxes on earnings |
|
101 |
|
|
|
114 |
|
|
|
|
Earnings from continuing operations |
|
340 |
|
|
|
356 |
|
|
|
|
Earnings (loss) from discontinued operations |
|
1,034 |
|
|
|
(221 |
) |
|
|
|
Net earnings |
|
1,374 |
|
|
|
135 |
|
|
n/m |
|
Net loss attributable to noncontrolling interests |
|
— |
|
— |
|
|
||||
Net earnings attributable to |
$ |
1,374 |
|
|
$ |
135 |
|
|
n/m |
|
Per share - assuming dilution |
|
|
|
|
|
|||||
Earnings from continuing operations attributable to |
$ |
1.12 |
|
|
$ |
1.18 |
|
|
|
|
Earnings (loss) from discontinued operations |
|
3.41 |
|
|
|
(.73 |
) |
|
|
|
Net earnings attributable to |
$ |
4.53 |
|
|
$ |
.45 |
|
|
n/m |
|
n/m - not meaningful |
||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (millions) |
||||||
|
|
|
|
|||
Current assets |
$ |
1,556 |
|
$ |
1,605 |
|
Current assets of discontinued operations |
— |
|
|
690 |
||
Plant assets, net |
|
2,336 |
|
|
2,431 |
|
Intangible assets, net |
|
7,361 |
|
|
7,487 |
|
Other assets |
|
401 |
|
|
187 |
|
Noncurrent assets of discontinued operations |
— |
|
|
1,705 |
||
Total assets |
$ |
11,654 |
|
$ |
14,105 |
|
Current liabilities |
$ |
2,536 |
|
$ |
2,671 |
|
Current liabilities of discontinued operations |
|
— |
|
|
628 |
|
Long-term debt |
|
4,919 |
|
|
7,996 |
|
Other liabilities |
|
1,700 |
|
|
1,471 |
|
Noncurrent liabilities of discontinued operations |
|
— |
|
|
61 |
|
Total equity |
|
2,499 |
|
|
1,278 |
|
Total liabilities and equity |
$ |
11,654 |
|
$ |
14,105 |
|
Total debt* |
$ |
5,821 |
|
$ |
9,457 |
|
Total cash and cash equivalents* |
$ |
58 |
|
$ |
203 |
|
*Includes discontinued operations. |
On
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (millions) |
||||||||
|
Six Months Ended |
|||||||
|
|
|
|
|||||
Cash flows from operating activities: |
|
|
|
|||||
Net earnings |
$ |
1,374 |
|
|
$ |
135 |
|
|
Adjustments to reconcile net earnings to operating cash flow |
|
|
|
|||||
Impairment charges |
|
— |
|
|
360 |
|
||
Restructuring charges |
|
10 |
|
|
|
21 |
|
|
Stock-based compensation |
|
33 |
|
|
|
31 |
|
|
Pension and postretirement benefit income |
|
(47 |
) |
|
|
(29 |
) |
|
Depreciation and amortization |
|
162 |
|
|
|
241 |
|
|
Deferred income taxes |
|
32 |
|
|
|
(40 |
) |
|
Net gain on sales of businesses |
|
(972 |
) |
|
— |
|||
Loss on extinguishment of debt |
|
75 |
|
|
— |
|||
Other |
|
53 |
|
|
|
18 |
|
|
Changes in working capital, net of acquisition and divestitures |
|
|
|
|||||
Accounts receivable |
|
(112 |
) |
|
|
(150 |
) |
|
Inventories |
|
73 |
|
|
|
122 |
|
|
Prepaid assets |
|
11 |
|
|
|
(2 |
) |
|
Accounts payable and accrued liabilities |
|
(9 |
) |
|
|
170 |
|
|
Other |
|
(20 |
) |
|
|
(31 |
) |
|
Net cash provided by operating activities |
|
663 |
|
|
|
846 |
|
|
Cash flows from investing activities: |
|
|
|
|||||
Purchases of plant assets |
|
(167 |
) |
|
|
(198 |
) |
|
Purchases of route businesses |
|
(6 |
) |
|
|
(23 |
) |
|
Sales of route businesses |
|
5 |
|
|
|
25 |
|
|
Business acquired, net of cash acquired |
|
— |
|
|
(18 |
) |
||
Sales of businesses, net of cash divested |
|
2,533 |
|
|
— |
|||
Other |
|
3 |
|
|
|
11 |
|
|
Net cash provided by (used in) investing activities |
|
2,368 |
|
|
|
(203 |
) |
|
Cash flows from financing activities: |
|
|
|
|||||
Short-term borrowings |
|
3,680 |
|
|
|
2,831 |
|
|
Short-term repayments |
|
(4,350 |
) |
|
|
(3,274 |
) |
|
Long-term repayments |
|
(499 |
) |
|
— |
|||
Dividends paid |
|
(213 |
) |
|
|
(212 |
) |
|
|
|
4 |
|
|
— |
|||
Payments related to tax withholding for stock-based compensation |
|
(9 |
) |
|
|
(7 |
) |
|
Payments related to extinguishment of debt |
|
(1,765 |
) |
|
— |
|||
Payments of debt issuance costs |
|
— |
|
|
(1 |
) |
||
Net cash used in financing activities |
|
(3,152 |
) |
|
|
(663 |
) |
|
Effect of exchange rate changes on cash |
|
— |
|
|
(3 |
) |
||
Net change in cash and cash equivalents |
|
(121 |
) |
|
|
(23 |
) |
|
Cash and cash equivalents — beginning of period |
|
31 |
|
|
|
49 |
|
|
Cash balance of discontinued operations — beginning of period |
|
148 |
|
|
|
177 |
|
|
Cash balance of discontinued operations — end of period |
— |
|
|
(157 |
) |
|||
Cash and cash equivalents — end of period |
$ |
58 |
|
|
$ |
46 |
|
|
Reconciliation of GAAP to Non-GAAP Financial Measures
Second Quarter Ended
Organic
Organic net sales are net sales excluding the impact of currency, acquisitions, divestitures, and the additional week in fiscal 2020. Management believes that excluding these items, which are not part of the ongoing business, improves the comparability of year-to-year results. A reconciliation of net sales as reported to organic net sales follows.
Three Months Ended |
||||||||||||||||||||||||
|
|
|
% Change |
|||||||||||||||||||||
(millions) |
|
Impact of Currency |
Organic Net Sales |
|
Impact of Divestiture |
Organic Net Sales |
|
Organic Net Sales |
||||||||||||||||
Meals & Beverages |
$ |
1,224 |
$ |
(1 |
) |
$ |
1,223 |
$ |
1,222 |
$ |
— |
$ |
1,222 |
—% |
|
—% |
||||||||
Snacks |
|
938 |
|
— |
|
938 |
|
949 |
|
(32 |
) |
|
917 |
(1)% |
|
2% |
||||||||
Corporate |
|
— |
|
— |
|
— |
|
1 |
|
— |
|
1 |
n/m |
|
n/m |
|||||||||
Total |
$ |
2,162 |
$ |
(1 |
) |
$ |
2,161 |
$ |
2,172 |
$ |
(32 |
) |
$ |
2,140 |
—% |
|
1% |
|||||||
|
|
|||||||||||||||||||||||
|
|
|||||||||||||||||||||||
Six Months Ended |
||||||||||||||||||||||||
|
|
|
% Change |
|||||||||||||||||||||
(millions) |
|
Impact of Currency |
Organic Net Sales |
|
Impact of Divestiture |
Organic Net Sales |
|
Organic Net Sales |
||||||||||||||||
Meals & Beverages |
$ |
2,418 |
$ |
1 |
|
$ |
2,419 |
$ |
2,451 |
$ |
— |
$ |
2,451 |
(1)% |
|
(1)% |
||||||||
Snacks |
|
1,927 |
|
1 |
|
|
1,928 |
|
1,922 |
|
(32 |
) |
|
1,890 |
—% |
|
2% |
|||||||
Corporate |
|
— |
|
— |
|
— |
|
1 |
|
— |
|
1 |
n/m |
|
n/m |
|||||||||
Total |
$ |
4,345 |
$ |
2 |
|
$ |
4,347 |
$ |
4,374 |
$ |
(32 |
) |
$ |
4,342 |
(1)% |
|
—% |
|||||||
n/m - not meaningful
Items Impacting Earnings
Management believes that financial information excluding certain items that are not considered to reflect the ongoing operating results, such as those listed below, improves the comparability of year-to-year results. Consequently, management believes that investors may be able to better understand its results excluding these items.
The following items impacted earnings:
|
||
Continuing Operations |
||
|
||
(1) |
|
The company has implemented several cost savings initiatives in recent years. |
|
|
|
|
|
In the second quarter of fiscal 2020, the company recorded Restructuring charges of |
(2) |
|
In the second quarter of fiscal 2020, the company recorded a loss in Interest expense of |
|
|
|
(3) |
|
In the second quarter of fiscal 2020, the company recognized a pre-tax pension settlement gain in Other expenses / (income) of |
|
|
|
(4) |
|
In the second quarter of fiscal 2020, the company recorded a tax benefit of |
|
|
|
(5) |
|
In fiscal 2019, the company reflected the impact on taxes of the enactment of the Tax Cuts and Jobs Act that was signed into law in |
|
|
|
(6) |
|
For the year ended |
|
|
|
(7) |
|
For the year ended |
|
|
|
Discontinued Operations |
||
(1) |
|
In the six-month period of fiscal 2019, the company recorded a charge of |
(4) |
|
In the second quarter of fiscal 2020, the company recognized gains of |
|
|
For the year ended |
(6)
|
|
In the second quarter of fiscal 2019, interim impairment assessments were performed on the intangible and tangible assets within |
|
|
In the first quarter of fiscal 2019, the company recorded a non-cash impairment charge of |
|
|
In the six-month period of fiscal 2019, the total non-cash impairment charges recorded were |
|
|
In the fourth quarter of fiscal 2019, as part of the company's annual review of intangible assets, the company recognized an impairment charge of |
|
|
For the year ended |
(7) |
|
For the year ended |
|
|
The following tables reconcile financial information, presented in accordance with GAAP, to financial information excluding certain items:
|
Three Months Ended |
|
|
||||||||||||||||||||||||
|
|
|
|
|
|
||||||||||||||||||||||
(millions, except per share amounts) |
As reported |
|
Adjustments(a) |
|
Adjusted |
|
As reported |
|
Adjustments(a) |
|
Adjusted |
|
Adjusted Percent Change |
||||||||||||||
Gross margin |
$ |
742 |
|
|
$ |
2 |
|
|
$ |
744 |
|
|
$ |
706 |
|
|
$ |
9 |
|
|
$ |
715 |
|
|
4 |
% |
|
Gross margin percentage |
|
34.3 |
% |
|
|
|
|
34.4 |
% |
|
|
32.5 |
% |
|
|
|
|
32.9 |
% |
|
|
||||||
Marketing and selling expenses |
|
237 |
|
|
|
(2 |
) |
|
|
235 |
|
|
|
221 |
|
|
|
(2 |
) |
|
|
219 |
|
|
|
||
Administrative expenses |
|
148 |
|
|
|
(13 |
) |
|
|
135 |
|
|
|
146 |
|
|
|
(10 |
) |
|
|
136 |
|
|
|
||
Research and development expenses |
|
22 |
|
|
|
(1 |
) |
|
|
21 |
|
|
|
20 |
|
|
|
(1 |
) |
|
|
19 |
|
|
|
||
Other expenses / (income) |
|
(22 |
) |
|
|
11 |
|
|
|
(11 |
) |
|
|
(8 |
) |
|
— |
|
|
(8 |
) |
|
|
||||
Restructuring charges |
|
7 |
|
|
|
(7 |
) |
|
|
— |
|
|
2 |
|
|
|
(2 |
) |
|
— |
|
|
|||||
Earnings before interest and taxes |
$ |
350 |
|
|
$ |
14 |
|
|
$ |
364 |
|
|
$ |
325 |
|
|
$ |
24 |
|
|
$ |
349 |
|
|
4 |
% |
|
Interest, net |
|
146 |
|
|
|
(75 |
) |
|
|
71 |
|
|
|
91 |
|
|
— |
|
|
91 |
|
|
|
||||
Earnings before taxes |
$ |
204 |
|
|
$ |
89 |
|
|
$ |
293 |
|
|
$ |
234 |
|
|
$ |
24 |
|
|
$ |
258 |
|
|
|
||
Taxes |
|
33 |
|
|
|
40 |
|
|
|
73 |
|
|
|
58 |
|
|
|
4 |
|
|
|
62 |
|
|
|
||
Effective income tax rate |
|
16.2 |
% |
|
|
|
|
24.9 |
% |
|
|
24.8 |
% |
|
|
|
|
24.0 |
% |
|
|
||||||
Earnings from continuing operations |
$ |
171 |
|
|
$ |
49 |
|
|
$ |
220 |
|
|
$ |
176 |
|
|
$ |
20 |
|
|
$ |
196 |
|
|
12 |
% |
|
Earnings (loss) from discontinued operations |
|
1,037 |
|
|
|
(1,025 |
) |
|
|
12 |
|
|
|
(235 |
) |
|
|
272 |
|
|
|
37 |
|
|
(68 |
)% |
|
Net earnings (loss) attributable to |
$ |
1,208 |
|
|
$ |
(976 |
) |
|
$ |
232 |
|
|
$ |
(59 |
) |
|
$ |
292 |
|
|
$ |
233 |
|
|
— |
% |
|
Diluted earnings per share - continuing operations attributable to |
$ |
.56 |
|
|
$ |
.16 |
|
|
$ |
.72 |
|
|
$ |
.58 |
|
|
$ |
.07 |
|
|
$ |
.65 |
|
|
11 |
% |
|
Diluted earnings (loss) per share - discontinued operations |
|
3.41 |
|
|
|
(3.37 |
) |
|
|
.04 |
|
|
|
(.78 |
) |
|
|
.90 |
|
|
|
.12 |
|
|
(67 |
)% |
|
Diluted net earnings (loss) per share attributable to |
$ |
3.97 |
|
|
$ |
(3.21 |
) |
|
$ |
.76 |
|
|
$ |
(.20 |
) |
|
$ |
.97 |
|
|
$ |
.77 |
|
|
(1 |
)% |
|
(a)See following tables for additional information. |
|||||||||||||||||||||||||||
|
Three Months Ended |
|||||||||||||||||||
|
|
|||||||||||||||||||
(millions, except per share amounts) |
Restructuring charges, implementation costs and other related costs (1) |
|
Loss on extinguishment of debt (2) |
|
Pension settlement (3) |
|
Divestitures (4) |
|
Adjustments |
|||||||||||
Gross margin |
$ |
2 |
|
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
2 |
|
||||
Marketing and selling expenses |
|
(2 |
) |
|
|
— |
|
|
— |
|
|
— |
|
|
(2 |
) |
||||
Administrative expenses |
|
(13 |
) |
|
|
— |
|
|
— |
|
|
— |
|
|
(13 |
) |
||||
Research and development expenses |
|
(1 |
) |
|
|
— |
|
|
— |
|
|
— |
|
|
(1 |
) |
||||
Other expenses / (income) |
|
— |
|
|
— |
|
|
11 |
|
|
|
— |
|
|
11 |
|
||||
Restructuring charges |
|
(7 |
) |
|
|
— |
|
|
— |
|
|
— |
|
|
(7 |
) |
||||
Earnings before interest and taxes |
$ |
25 |
|
|
$ |
— |
|
$ |
(11 |
) |
|
$ |
— |
|
$ |
14 |
|
|||
Interest, net |
|
— |
|
|
(75 |
) |
|
|
— |
|
|
— |
|
|
(75 |
) |
||||
Earnings before taxes |
$ |
25 |
|
|
$ |
75 |
|
|
$ |
(11 |
) |
|
$ |
— |
|
$ |
89 |
|
||
Taxes |
|
6 |
|
|
|
18 |
|
|
|
(3 |
) |
|
|
19 |
|
|
|
40 |
|
|
Earnings from continuing operations |
$ |
19 |
|
|
$ |
57 |
|
|
$ |
(8 |
) |
|
$ |
(19 |
) |
|
$ |
49 |
|
|
Earnings from discontinued operations |
|
— |
|
|
— |
|
|
— |
|
|
(1,025 |
) |
|
|
(1,025 |
) |
||||
Net earnings attributable to |
$ |
19 |
|
|
$ |
57 |
|
|
$ |
(8 |
) |
|
$ |
(1,044 |
) |
|
$ |
(976 |
) |
|
Diluted earnings per share - continuing operations attributable to |
$ |
.06 |
|
|
$ |
.19 |
|
|
$ |
(.03 |
) |
|
$ |
(.06 |
) |
|
$ |
.16 |
|
|
Diluted earnings per share - discontinued operations |
|
— |
|
|
— |
|
|
— |
|
|
(3.37 |
) |
|
|
(3.37 |
) |
||||
Diluted net earnings per share attributable to |
$ |
.06 |
|
|
$ |
.19 |
|
|
$ |
(.03 |
) |
|
$ |
(3.43 |
) |
|
$ |
(3.21 |
) |
|
|
Three Months Ended |
|||||||||||||||||
|
|
|||||||||||||||||
(millions, except per share amounts) |
Restructuring charges, implementation costs and other related costs (1) |
|
Divestitures (4) |
|
Tax reform |
|
Impairment charges |
|
Adjustments |
|||||||||
Gross margin |
$ |
9 |
|
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
9 |
|
||
Marketing and selling expenses |
|
(2 |
) |
|
— |
|
— |
|
|
— |
|
|
(2 |
) |
||||
Administrative expenses |
|
(10 |
) |
|
— |
|
— |
|
|
— |
|
|
(10 |
) |
||||
Research and development expenses |
|
(1 |
) |
|
— |
|
— |
|
|
— |
|
|
(1 |
) |
||||
Restructuring charges |
|
(2 |
) |
|
— |
|
— |
|
|
— |
|
|
(2 |
) |
||||
Earnings before interest and taxes |
$ |
24 |
|
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
24 |
|
||
Interest, net |
— |
|
— |
|
— |
|
— |
|
— |
|||||||||
Earnings before taxes |
$ |
24 |
|
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
24 |
|
||
Taxes |
|
6 |
|
|
— |
|
|
(2 |
) |
|
— |
|
|
4 |
|
|||
Earnings from continuing operations |
$ |
18 |
|
|
$ |
— |
|
$ |
2 |
|
|
$ |
— |
|
$ |
20 |
|
|
Earnings from discontinued operations |
— |
|
|
8 |
|
— |
|
|
264 |
|
|
272 |
|
|||||
Net earnings attributable to |
$ |
18 |
|
|
$ |
8 |
|
$ |
2 |
|
|
$ |
264 |
|
$ |
292 |
|
|
Diluted earnings per share - continuing operations attributable to |
$ |
.06 |
|
|
$ |
— |
|
$ |
.01 |
|
|
$ |
— |
|
$ |
.07 |
|
|
Diluted earnings per share - discontinued operations |
— |
|
|
.03 |
|
— |
|
|
.87 |
|
|
.90 |
|
|||||
Diluted net earnings per share attributable to |
$ |
.06 |
|
|
$ |
.03 |
|
$ |
.01 |
|
|
$ |
.87 |
|
$ |
.97 |
|
|
|
Six Months Ended |
|
|||||||||||||||||||||||||
|
|
|
|
||||||||||||||||||||||||
(millions, except per share amounts) |
As reported |
Adjustments(a) |
Adjusted |
As reported |
Adjustments(a) |
Adjusted |
Adjusted Percent Change |
||||||||||||||||||||
Gross margin |
$ |
1,480 |
|
$ |
2 |
|
$ |
1,482 |
|
$ |
1,432 |
|
$ |
21 |
|
$ |
1,453 |
2 |
% |
||||||||
Gross margin percentage |
|
34.1 |
% |
|
|
34.1 |
% |
|
32.7 |
% |
|
|
33.2 |
% |
|
||||||||||||
Marketing and selling expenses |
|
443 |
|
|
(2 |
) |
|
441 |
|
|
432 |
|
|
(4 |
) |
|
428 |
|
|||||||||
Administrative expenses |
|
282 |
|
|
(21 |
) |
|
261 |
|
|
294 |
|
|
(23 |
) |
|
271 |
|
|||||||||
Research and development expenses |
|
44 |
|
|
(1 |
) |
|
43 |
|
|
43 |
|
|
(1 |
) |
|
42 |
|
|||||||||
Other expenses / (income) |
|
34 |
|
|
(53 |
) |
|
(19 |
) |
|
(8 |
) |
— |
|
(8 |
) |
|
||||||||||
Restructuring charges |
|
10 |
|
|
(10 |
) |
— |
|
20 |
|
|
(20 |
) |
— |
|
||||||||||||
Earnings before interest and taxes |
$ |
667 |
|
$ |
89 |
|
$ |
756 |
|
$ |
651 |
|
$ |
69 |
|
$ |
720 |
5 |
% |
||||||||
Interest, net |
|
226 |
|
|
(75 |
) |
|
151 |
|
|
181 |
|
— |
|
181 |
|
|||||||||||
Earnings before taxes |
$ |
441 |
|
$ |
164 |
|
$ |
605 |
|
$ |
470 |
|
$ |
69 |
|
$ |
539 |
|
|||||||||
Taxes |
|
101 |
|
|
47 |
|
|
148 |
|
|
114 |
|
|
15 |
|
|
129 |
|
|||||||||
Effective income tax rate |
|
22.9 |
% |
|
|
24.5 |
% |
|
24.3 |
% |
|
|
23.9 |
% |
|
||||||||||||
Earnings from continuing operations |
$ |
340 |
|
$ |
117 |
|
$ |
457 |
|
$ |
356 |
|
$ |
54 |
|
$ |
410 |
11 |
% |
||||||||
Earnings (loss) from discontinued operations |
|
1,034 |
|
|
(998 |
) |
|
36 |
|
|
(221 |
) |
|
285 |
|
|
64 |
(44 |
)% |
||||||||
Net earnings attributable to |
$ |
1,374 |
|
$ |
(881 |
) |
$ |
493 |
|
$ |
135 |
|
$ |
339 |
|
$ |
474 |
4 |
% |
||||||||
Diluted earnings per share - continuing operations attributable to |
$ |
1.12 |
|
$ |
.39 |
|
$ |
1.51 |
|
$ |
1.18 |
|
$ |
.18 |
|
$ |
1.36 |
11 |
% |
||||||||
Diluted earnings (loss) per share - discontinued operations |
|
3.41 |
|
|
(3.29 |
) |
|
.12 |
|
|
(.73 |
) |
|
.94 |
|
|
.21 |
(43 |
)% |
||||||||
Diluted net earnings per share attributable to |
$ |
4.53 |
|
$ |
(2.91 |
) |
$ |
1.63 |
|
$ |
.45 |
|
$ |
1.12 |
|
$ |
1.57 |
4 |
% |
||||||||
(a)See following tables for additional information. |
|||||||||||||||||||||||||||
*The sum of individual per share amounts may not add due to rounding. |
|
Six Months Ended |
|||||||||||||||||||
|
|
|||||||||||||||||||
(millions, except per share amounts) |
Restructuring charges, implementation costs and other related costs (1) |
|
Loss on extinguishment of debt (2) |
|
Pension settlement (3) |
|
Divestitures (4) |
|
Adjustments |
|||||||||||
Gross margin |
$ |
2 |
|
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
2 |
|
||||
Marketing and selling expenses |
(2 |
) |
|
— |
|
— |
|
— |
|
(2 |
) |
|||||||||
Administrative expenses |
(21 |
) |
|
— |
|
— |
|
— |
|
(21 |
) |
|||||||||
Research and development expenses |
(1 |
) |
|
— |
|
— |
|
— |
|
(1 |
) |
|||||||||
Other expenses / (income) |
— |
|
— |
|
11 |
|
|
(64 |
) |
|
(53 |
) |
||||||||
Restructuring charges |
(10 |
) |
|
— |
|
— |
|
— |
|
(10 |
) |
|||||||||
Earnings before interest and taxes |
$ |
36 |
|
|
$ |
— |
|
$ |
(11 |
) |
|
$ |
64 |
|
|
$ |
89 |
|
||
Interest, net |
— |
|
(75 |
) |
|
— |
|
— |
|
(75 |
) |
|||||||||
Earnings before taxes |
$ |
36 |
|
|
$ |
75 |
|
|
$ |
(11 |
) |
|
$ |
64 |
|
|
$ |
164 |
|
|
Taxes |
9 |
|
|
18 |
|
|
(3 |
) |
|
23 |
|
|
47 |
|
||||||
Earnings from continuing operations |
$ |
27 |
|
|
$ |
57 |
|
|
$ |
(8 |
) |
|
$ |
41 |
|
|
$ |
117 |
|
|
Earnings from discontinued operations |
— |
|
— |
|
— |
|
(998 |
) |
|
(998 |
) |
|||||||||
Net earnings attributable to |
$ |
27 |
|
|
$ |
57 |
|
|
$ |
(8 |
) |
|
$ |
(957 |
) |
|
$ |
(881 |
) |
|
Diluted earnings per share - continuing operations attributable to |
$ |
.09 |
|
|
$ |
.19 |
|
|
$ |
(.03 |
) |
|
$ |
.14 |
|
|
$ |
.39 |
|
|
Diluted earnings per share - discontinued operations |
— |
|
— |
|
— |
|
(3.29 |
) |
|
(3.29 |
) |
|||||||||
Diluted net earnings per share attributable to |
$ |
.09 |
|
|
$ |
.19 |
|
|
$ |
(.03 |
) |
|
$ |
(3.16 |
) |
|
$ |
(2.91 |
) |
|
*The sum of individual per share amounts may not add due to rounding. |
||||||||||||||||||||
|
Six Months Ended |
||||||||||||||||||
|
|
||||||||||||||||||
(millions, except per share amounts) |
Restructuring charges, implementation costs and other related costs |
|
Divestitures (4) |
|
Tax reform |
|
Impairment charges |
|
Adjustments |
||||||||||
Gross margin |
$ |
21 |
|
|
$ |
— |
|
|
$ |
— |
|
$ |
— |
|
$ |
21 |
|
||
Marketing and selling expenses |
(4 |
) |
|
— |
|
|
— |
|
— |
|
(4 |
) |
|||||||
Administrative expenses |
(23 |
) |
|
— |
|
|
— |
|
— |
|
(23 |
) |
|||||||
Research and development expenses |
(1 |
) |
|
— |
|
|
— |
|
— |
|
(1 |
) |
|||||||
Restructuring charges |
(20 |
) |
|
— |
|
|
— |
|
— |
|
(20 |
) |
|||||||
Earnings before interest and taxes |
$ |
69 |
|
|
$ |
— |
|
|
$ |
— |
|
$ |
— |
|
$ |
69 |
|
||
Interest, net |
— |
|
— |
|
|
— |
|
— |
|
— |
|||||||||
Earnings before taxes |
$ |
69 |
|
|
$ |
— |
|
|
$ |
— |
|
$ |
— |
|
$ |
69 |
|
||
Taxes |
17 |
|
|
— |
|
|
(2 |
) |
|
— |
|
15 |
|
||||||
Earnings from continuing operations |
$ |
52 |
|
|
$ |
— |
|
|
$ |
2 |
|
|
$ |
— |
|
$ |
54 |
|
|
Earnings from discontinued operations |
1 |
|
|
9 |
|
|
— |
|
275 |
|
285 |
|
|||||||
Net earnings attributable to |
$ |
53 |
|
|
$ |
9 |
|
|
$ |
2 |
|
|
$ |
275 |
|
$ |
339 |
|
|
Diluted earnings per share - continuing operations attributable to |
$ |
.17 |
|
|
$ |
— |
|
|
$ |
.01 |
|
|
$ |
— |
|
$ |
.18 |
|
|
Diluted earnings per share - discontinued operations |
— |
|
.03 |
|
|
— |
|
.91 |
|
.94 |
|
||||||||
Diluted net earnings per share attributable to |
$ |
.18 |
|
|
$ |
.03 |
|
|
$ |
.01 |
|
|
$ |
.91 |
|
$ |
1.12 |
|
|
*The sum of individual per share amounts may not add due to rounding. |
(millions, except per share amounts) |
|
Year Ended |
||
Gross margin, as reported |
|
$ |
2,693 |
|
Add: Restructuring charges, implementation costs and other related costs (1) |
|
|
18 |
|
Adjusted Gross margin |
|
$ |
2,711 |
|
Adjusted Gross margin percentage |
|
|
33.4 |
% |
Earnings before interest and taxes, as reported |
|
$ |
979 |
|
Add: Restructuring charges, implementation costs and other related costs (1) |
|
|
121 |
|
Add: Pension settlement (3) |
|
|
28 |
|
Add: Impairment charges (6) |
|
|
16 |
|
Add: Pension and postretirement benefit mark-to-market adjustments (7) |
|
|
122 |
|
Adjusted Earnings before interest and taxes |
|
$ |
1,266 |
|
Interest, net, as reported |
|
$ |
354 |
|
Adjusted Earnings before taxes |
|
$ |
912 |
|
Taxes on earnings, as reported |
|
$ |
151 |
|
Add: Tax benefit from restructuring charges, implementation costs and other related costs (1) |
|
|
29 |
|
Add: Tax benefit from pension settlement (3) |
|
|
6 |
|
Deduct: Tax expense from tax reform (5) |
|
|
(2 |
) |
Add: Tax benefit from impairment charges (6) |
|
|
3 |
|
Add: Tax benefit from pension and postretirement benefit mark-to-market adjustments (7) |
|
|
29 |
|
Adjusted Taxes on earnings |
|
$ |
216 |
|
Adjusted effective income tax rate |
|
|
23.7 |
% |
Earnings from continuing operations, as reported |
|
$ |
474 |
|
Add: Net adjustment from restructuring charges, implementation costs and other related costs (1) |
|
|
92 |
|
Add: Net adjustment from pension settlement (3) |
|
|
22 |
|
Add: Net adjustment from tax reform (5) |
|
|
2 |
|
Add: Net adjustment from impairment charges (6) |
|
|
13 |
|
Add: Net adjustment from total pension and postretirement benefit mark-to-market adjustments (7) |
|
|
93 |
|
Adjusted Earnings from continuing operations |
|
$ |
696 |
|
Loss from discontinued operations, as reported |
|
$ |
(263 |
) |
Add: Net adjustment from divestitures (4) |
|
|
61 |
|
Add: Net adjustment from impairment charges (6) |
|
|
287 |
|
Add: Net adjustment from total pension benefit mark-to-market adjustments (7) |
|
|
9 |
|
Adjusted Earnings from discontinued operations |
|
$ |
94 |
|
Adjusted Net earnings attributable to |
|
$ |
790 |
|
Diluted earnings per share - continuing operations attributable to |
|
$ |
1.57 |
|
Add: Net adjustment from restructuring charges, implementation costs and other related costs (1) |
|
|
.30 |
|
Add: Net adjustment from pension settlement (3) |
|
|
.07 |
|
Add: Net adjustment from tax reform (5) |
|
|
.01 |
|
Add: Net adjustment from impairment charges (6) |
|
|
.04 |
|
Add: Net adjustment from total pension and postretirement benefit mark-to-market adjustments (7) |
|
|
.31 |
|
Adjusted Diluted earnings per share - continuing operations attributable to |
|
$ |
2.30 |
|
Diluted loss per share - discontinued operations, as reported |
|
$ |
(.87 |
) |
Add: Net adjustment from divestitures (4) |
|
|
.20 |
|
Add: Net adjustment from impairment charges (6) |
|
|
.95 |
|
Add: Net adjustment from total pension benefit mark-to-market adjustments (7) |
|
|
.03 |
|
Adjusted Diluted earnings per share - discontinued operations |
|
$ |
.31 |
|
Diluted net earnings per share attributable to |
|
$ |
.70 |
|
Add: Net adjustment from restructuring charges, implementation costs and other related costs (1) |
|
|
.30 |
|
Add: Net adjustment from pension settlement (3) |
|
|
.07 |
|
Add: Net adjustment from divestitures (4) |
|
|
.20 |
|
Add: Net adjustment from tax reform (5) |
|
|
.01 |
|
Add: Net adjustment from impairment charges (6) |
|
|
.99 |
|
Add: Net adjustment from total pension and postretirement benefit mark-to-market adjustments (7) |
|
|
.34 |
|
Adjusted Diluted net earnings per share attributable to |
|
$ |
2.62 |
|
*The sum of individual per share amounts may not add due to rounding. |
|
|
Net Debt
Management believes that net debt from continuing operations is a non-GAAP measure that provides additional comparisons between the company's financial position at
(millions) |
|
|
|
|||||
Short-term borrowings |
$ |
902 |
|
|
$ |
1,177 |
|
|
Long-term debt |
|
4,919 |
|
|
|
7,996 |
|
|
Total debt - continuing operations |
$ |
5,821 |
|
|
$ |
9,173 |
|
|
Less: Cash and cash equivalents |
|
(58 |
) |
|
|
(46 |
) |
|
Net debt - continuing operations |
$ |
5,763 |
|
|
$ |
9,127 |
|
|
Net Debt to Adjusted EBITDA
Net debt to adjusted EBITDA is net debt divided by adjusted earnings before interest, taxes, depreciation, and amortization. Management believes that net debt to adjusted EBITDA is a useful metric to evaluate the company's financial leverage. Net debt to adjusted EBITDA is not a financial measure under GAAP and may not be defined and calculated by other companies in the same manner.
|
|
|
||||||||||||||
|
(a) |
|
(b) |
|
(c) |
|
= (a)-(b)+(c) |
|||||||||
|
Twelve Months Ended |
|
Six Months Ended |
|
Six Months Ended |
|
Trailing Twelve Months |
|||||||||
|
2019 |
|
2019 |
|
2020 |
|
2020 |
|||||||||
Earnings from continuing operations, as reported |
$ |
474 |
|
|
$ |
356 |
|
|
$ |
340 |
|
|
$ |
458 |
|
|
Add: Restructuring charges, implementation costs and other related costs (1) |
92 |
|
|
52 |
|
|
27 |
|
|
67 |
|
|||||
Add: Loss on extinguishment of debt (2) |
— |
|
— |
|
57 |
|
|
57 |
|
|||||||
Add (Deduct): Pension settlement (3) |
22 |
|
|
— |
|
(8 |
) |
|
14 |
|
||||||
Add: Divestitures (4) |
— |
|
— |
|
41 |
|
|
41 |
|
|||||||
Add: Tax reform (5) |
2 |
|
|
2 |
|
|
— |
|
— |
|||||||
Add: Impairment charges (6) |
13 |
|
|
— |
|
— |
|
13 |
|
|||||||
Add: Pension and postretirement benefit mark-to-market (7) |
93 |
|
|
— |
|
— |
|
93 |
|
|||||||
Adjusted Earnings from continuing operations |
$ |
696 |
|
|
$ |
410 |
|
|
$ |
457 |
|
|
$ |
743 |
|
|
Taxes on earnings, as reported |
$ |
151 |
|
|
$ |
114 |
|
|
$ |
101 |
|
|
$ |
138 |
|
|
Add: Restructuring charges, implementation costs and other related costs (1) |
29 |
|
|
17 |
|
|
9 |
|
|
21 |
|
|||||
Add: Loss on extinguishment of debt (2) |
— |
|
— |
|
18 |
|
|
18 |
|
|||||||
Add (Deduct): Pension settlement (3) |
6 |
|
|
— |
|
(3 |
) |
|
3 |
|
||||||
Add: Divestitures (4) |
— |
|
— |
|
23 |
|
|
23 |
|
|||||||
Deduct: Tax reform (5) |
(2 |
) |
|
(2 |
) |
|
— |
|
— |
|||||||
Add: Impairment charges (6) |
3 |
|
|
— |
|
— |
|
3 |
|
|||||||
Add: Pension and postretirement benefit mark-to-market (7) |
29 |
|
|
— |
|
— |
|
29 |
|
|||||||
Adjusted Taxes on earnings |
$ |
216 |
|
|
$ |
129 |
|
|
$ |
148 |
|
|
$ |
235 |
|
|
Interest, net, as reported |
$ |
354 |
|
|
$ |
181 |
|
|
$ |
226 |
|
|
$ |
399 |
|
|
Deduct: Loss on extinguishment of debt (2) |
— |
|
— |
|
(75 |
) |
|
(75 |
) |
|||||||
Adjusted Interest, net |
$ |
354 |
|
|
$ |
181 |
|
|
$ |
151 |
|
|
$ |
324 |
|
|
Earnings before interest and taxes, as reported |
$ |
979 |
|
|
$ |
651 |
|
|
$ |
667 |
|
|
$ |
995 |
|
|
Add: Restructuring charges, implementation costs and other related costs (1) |
121 |
|
|
69 |
|
|
36 |
|
|
88 |
|
|||||
Add (Deduct): Pension settlement (3) |
28 |
|
|
— |
|
(11 |
) |
|
17 |
|
||||||
Add: Divestitures (4) |
— |
|
— |
|
64 |
|
|
64 |
|
|||||||
Add: Impairment charges (6) |
16 |
|
|
— |
|
— |
|
16 |
|
|||||||
Add: Pension and postretirement benefit mark-to-market (7) |
122 |
|
|
— |
|
— |
|
122 |
|
|||||||
Adjusted Earnings before interest and taxes |
$ |
1,266 |
|
|
$ |
720 |
|
|
$ |
756 |
|
|
$ |
1,302 |
|
|
Depreciation and amortization, as reported |
$ |
446 |
|
|
$ |
241 |
|
|
$ |
162 |
|
|
$ |
367 |
|
|
Add (Deduct): Restructuring charges, implementation costs and other related costs (1) |
(18 |
) |
|
(21 |
) |
|
(2 |
) |
|
1 |
|
|||||
Deduct: Depreciation and amortization, discontinued operations |
(83 |
) |
|
(54 |
) |
|
— |
|
(29 |
) |
||||||
Adjusted Depreciation and amortization from continuing operations |
$ |
345 |
|
|
$ |
166 |
|
|
$ |
160 |
|
|
$ |
339 |
|
|
Adjusted Earnings before interest, taxes, depreciation and amortization |
$ |
1,611 |
|
|
$ |
886 |
|
|
$ |
916 |
|
|
$ |
1,641 |
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|||||||||
Net debt |
|
|
|
|
|
|
$ |
5,763 |
|
|||||||
|
|
|
|
|
|
|
|
|||||||||
Net debt to Adjusted EBITDA |
|
|
|
|
|
|
3.5 |
|
||||||||
|
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20200304005377/en/
INVESTOR CONTACT:
(856) 342-6081
ken_gosnell@campbells.com
MEDIA CONTACT:
(856) 342-5227
thomas_hushen@campbells.com
Source: