Emerson Reports Fourth-Quarter Sales up 12 Percent to $4.1 Billion, EPS up 27 Percent to $0.84, and Operating Cash Flow of $726 Million.ST. LOUIS -- Emerson (NYSE NYSE See: New York Stock Exchange : EMR (ElectroMagnetic Radiation) The emanation of energy from everything in the universe. Although the EMR from electrical and electronic devices is typically measured for practical, every-day situations, every object, including humans, emanates energy. ): Strong Full-Year Results --Record Sales, Up 12 Percent, and Earnings Per Share from Continuing Operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the Up 24 Percent --Operating Profit Improvement of 16 Percent and Pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern Profit Improvement of 31 Percent --Operating Cash Flow Up 28 Percent to $2.2 Billion --Sales and Earnings Gains in All Business Segments Emerson (NYSE: EMR) announced that net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the fourth quarter of fiscal 2004, which ended September September: see month. 30, 2004, increased 12 percent to $4,120 million, from $3,694 million in the fourth quarter of fiscal 2003. Underlying sales, which exclude the impact of exchange rates, acquisitions, and divestitures, were up 8 percent for the quarter, with solid gains worldwide in all businesses. Net earnings for the fourth quarter increased 28 percent to $354 million, or $0.84 per share, from $276 million, or $0.66 per share, for the fourth quarter of 2003. For the 12 months ended September 30, 2004, net sales were a record $15.6 billion, an increase of $1.7 billion, or 12 percent, over net sales of $14.0 billion for fiscal 2003. Earnings per share from continuing operations increased 24 percent to $2.98 for 2004, from $2.41 per share in the prior year. Net earnings per share increased 15 percent to $2.98 for fiscal 2004, compared with net earnings per share of $2.59 for the prior-year period, which included a net gain from discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. of $76 million, or $0.18 per share. Operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. for fiscal 2004 was $2.2 billion, a 28 percent increase from the prior year, and free cash flow increased 30 percent to $1.8 billion. These increases reflect strong operational performance, as well as the $164 million tax refund Tax refund Money back from the government when too much tax has been paid or withheld from a salary. from the sale of the Jordan Jordan, country, Asia Jordan, officially Hashemite Kingdom of Jordan, kingdom (2005 est. pop. 5,760,000), 35,637 sq mi (92,300 sq km), SW Asia. It borders on Israel and the West Bank in the west, on Syria in the north, on Iraq in the northeast, and on Saudi stock including its Dura-Line operations in 2003, a pension funding reduction of $141 million in the current year, and continued improvements in operating working capital even with the strong sales growth. "We finished an excellent year by delivering another outstanding quarter with double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. growth in sales, profit, and earnings," said Chairman and Chief Executive Officer David N. Farr FARR Find and Run Robot FARR Friedreich Ataxia with Retained Reflexes FARR Forward Area Alerting Radar Receiver FARR Focused Area Risk Reduction (Air Force) FARR Forward Area Refueling and Rearming . "Sales and earnings for all business segments were up over the prior year for both the fourth quarter and the full fiscal year. During the quarter, this growth was led by our Network Power and Industrial Automation businesses, both of which experienced strong international sales growth as well as continued increases in demand in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. . "Across the Company, we continued to achieve significant growth in emerging markets, with fourth-quarter increases of 17 percent in Asia, including 30 percent in China, and 10 percent in Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. . We are winning with industry-leading technology, global reach, and solutions and services that meet the needs of our customers and their customers. "In the quarter we increased Emerson Network Power's capability to serve telecom customers with global power systems, solutions and services by completing the acquisition of the outside plant and power systems business of Marconi (Marconi Communications, Warrendale, PA, www.marconi.com) A leading manufacturer of networking equipment. Founded in 1990 as FORE Systems by four Carnegie Mellon University faculty members, the company name was derived from its founders' first names: Francois, Onat, Robert and Eric. Corporation PLC. Now called Emerson Network Power Energy Systems - North America, this business and our existing global engineering and manufacturing resources gives us an unmatched offering for global telecom customers. "Our fourth-quarter operating profit margin Operating profit margin The ratio of operating profit to net sales. improved to 15.3 percent from 14.6 percent in the prior period, and for fiscal 2004 operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: increased to 14.6 percent from 14.1 percent in the prior year. We had double-digit earnings increases in each of our business segments during the year, ranging from 11 percent to 77 percent growth, despite pressure from materials and pension costs. We overcame cost inflation pressure through aggressive sourcing initiatives, productivity improvements, and price increases where necessary. We also benefited from our extensive restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). initiatives and shift to low-cost manufacturing over the past three years. Sustained focus on all of these areas should allow us to drive further margin improvements into fiscal 2005. "In 2004 we also achieved excellent progress on capital efficiency initiatives. We have generated cash by continuing to improve our trade working capital ratio. In the fourth fiscal quarter, this ratio improved to 18.3 percent from 19.0 percent in the prior-year period. For the entire year, the average trade working capital ratio improved significantly to 19.6 percent, compared with 21.2 percent in fiscal 2003, led by an 11 percent improvement in inventory turnover. Emerson's lean manufacturing Lean manufacturing is the production of goods using less of everything compared to mass production: less human effort, less manufacturing space, less investment in tools, and less engineering time to develop a new product. initiatives have helped deliver these results. We expect to be able to continue this improvement over the next several years and drive trade working capital as a percent of sales into the mid-teens. "Capital efficiency improvements together with our strong earnings growth have driven substantial gains in cash flow and return on capital. We achieved record cash flow performance in 2004, growing operating and free cash flow nearly 30 percent and generating free cash flow equal to 144 percent of earnings - our fourth straight year over 100 percent. Additionally, return on total capital increased to 14.2 percent from 12.7 percent, the third yearly increase and a clear measure of our success in creating shareholder value by growing earnings and improving asset efficiency. "Looking toward fiscal year 2005, market demand remains favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. and we believe we can further improve margins despite commodity cost inflation. Emerson's September orders indicate solid single-digit sales growth going into fiscal year 2005. This, along with favorable gross fixed investment forecasts for 2005, gives us confidence we can continue to follow the excellent growth we achieved this year with strong earnings per share growth in fiscal 2005." Fiscal 2004 Operating Highlights Network Power segment sales for fiscal 2004 increased 16 percent to $2.7 billion, as Emerson benefited from favorable market dynamics that are driving demand for mission-critical power systems and cooling, as well as global services and embedded Inserted into. See embedded system. power modules. Underlying sales increased 13 percent, including penetration gains, particularly in the OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and power business, which are estimated to have contributed approximately 4 percentage points of the sales growth. Reported sales included a 3 percentage point favorable impact from currency and negligible  This article or section is written like a personal reflection or and may require .Please [ improve this article] by rewriting this article or section in an . net impact from the prior-year Dura-Line divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). and the current-year Marconi acquisition. The underlying sales improvement was driven by increases in all major geographic regions, led by a 22 percent increase in Asia, an 11 percent increase in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and a 10 percent increase in Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). . The U.S. increase reflects the upturn in
U.S. investment in communication and non-residential computer equipment
in 2004.Emerson continues to build upon its Emerson Network Power China (Avansys) acquisition not only by increasing the Company's penetration in China and Asia, but also by tapping into its talented engineering resources to design next generation products that are winning customers worldwide. Overall, improvements in capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. in nearly all of this segment's served markets supported increased sales in the mission critical power systems and cooling businesses. The strong underlying sales helped drive a 77 percent increase in segment earnings before interest and taxes In financial and business accounting, earnings before interest and taxes (EBIT) is a measure of a firm's profitability that excludes interest and income tax expenses.[1] EBIT = Operating Revenue – Operating Expenses + Non-operating Income to $297 million, or 11.0 percent of sales, from $168 million in the prior year. Earnings also benefited from prior cost reduction efforts and a $13 million reduction in rationalization rationalization, in psychology: see defense mechanism. costs. Process Management segment sales were $3.7 billion in 2004, up $309 million, or 9 percent, over sales a year ago, as this segment continues to grow internationally, win large projects, and expand systems and solutions. Process Management's strength lies in its unparalleled breadth of coverage across process industries coupled with its depth of products and services, which together provide unmatched capability and value for customers. Emerson's Plantweb(R) digital plant architecture continues to lead the market with a total of more than 4,200 project wins. Emerson also continues to be the leader in implementing projects with FOUNDATION(TM) fieldbus (1) A control network used in process control and industrial automation. Fieldbuses are bi-directional, digital serial networks that offer services at layers 1 and 2 of the OSI model (physical and data link). Some fieldbuses offer services at layer 7 as well. , which is now the specified communication protocol for nearly all major greenfield Greenfield, town (1990 pop. 18,666), seat of Franklin co., NW Mass., at the confluence of the Deerfield and Green rivers, near their junction with the Connecticut; settled 1686, set off from Deerfield and inc. 1753. process projects around the world. Underlying sales in Process Management increased 5 percent, with 21 percent growth in Asia and 11 percent growth in Latin America. Currency translation contributed 4 percentage points. Sales increased across almost all of its businesses with the greatest improvements in measurement and systems/solutions, due to strong project activity especially in Asia and the Middle East. Sales growth benefited from an upturn in spending in the oil and gas markets. Leverage from these higher sales during the year as well as savings from prior cost reduction efforts drove a 23 percent increase in earnings to $476 million from $388 million in fiscal 2003. Sales of the Climate Technologies segment increased 14 percent to $3.0 billion in 2004, driven by favorable end-market conditions and penetration gains around the world. Reported sales include a more than 2 percentage point favorable impact from currency. Sales of Emerson's Copeland Copeland may refer to: Places
tr.v. pro·pelled, pro·pel·ling, pro·pels To cause to move forward or onward. See Synonyms at push. [Middle English propellen, from Latin this significant growth: 1) the trend towards higher-efficiency equipment in served markets, 2) the expansion of scroll To continuously move forward, backward or sideways through the text and images on screen or within a window. Scrolling implies continuous and smooth movement, a line, character or pixel at a time, as if the data were on a paper scroll being rolled behind the screen. See auto scroll. technology into large commercial applications, and 3) the introduction and growth of new modulated mod·u·late v. mod·u·lat·ed, mod·u·lat·ing, mod·u·lates v.tr. 1. To adjust or adapt to a certain proportion; regulate or temper. 2. capacity scroll product offerings. The underlying sales increase of nearly 12 percent was driven by 15 percent growth in the United States, 11 percent growth in Asia, and increases in all of the businesses. Increased demand in the North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. and Asian residential air-conditioning air-conditioning Control of temperature, humidity, purity, and motion of air in an enclosed space, independent of outside conditions. In a self-contained air-conditioning unit, air is heated in a boiler unit or cooled by being blown across a refrigerant-filled coil and then markets led to strong sales growth in the compressor compressor, machine that decreases the volume of air or other gas by the application of pressure. Compressor types range from the simple hand pump and the piston-equipped compressor used to inflate tires to machines that use a rotating, bladed element to achieve business in these regions. In addition, the controls, thermostat thermostat, automatic device that regulates temperature in an enclosed area by controlling heating or refrigerating systems. It is commonly connected to one of these systems, turning it on or off in order to maintain a predetermined temperature. and valves businesses all had very strong growth for the year. Climate Technologies' earnings increased 21 percent to $467 million from $386 million in the prior year, primarily due to increased volume and leverage from higher sales. Earnings also reflect benefits from prior cost reduction efforts and productivity programs. Sales in the Industrial Automation segment increased 13 percent to $2.9 billion for 2004, with solid improvements across nearly all the businesses from increased capital spending and industrial demand. Currency contributed a 6 percentage point favorable impact. Underlying sales growth of nearly 7 percent reflects almost 9 percent international sales growth, led by Europe with 5 percent and Asia with 28 percent, as well as a 4 percent increase in the United States. Sales growth in the United States turned sharply higher during the second half of the fiscal year to meet growth in the capital goods Capital Goods Any goods used by an organization to produce other goods. Notes: Examples of capital goods include office buildings, equipment, and machinery. See also: Capital Expenditure, Disinvestment Capital goods markets that resulted from an upturn in U.S. industrial fixed investment. The strongest growth across the segment was in the European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. generator generator, in electricity, machine used to change mechanical energy into electrical energy. It operates on the principle of electromagnetic induction, discovered (1831) by Michael Faraday. business and the ultrasonic ultrasonic /ul·tra·son·ic/ (-son´ik) beyond the upper limit of perception by the human ear; relating to sound waves having a frequency of more than 20,000 Hz. ul·tra·son·ic adj. 1. plastic joining business. Earnings increased 18 percent to $391 million, from $330 million in the prior year, reflecting benefits from prior cost reduction efforts and increased volume and leverage from higher sales. The Appliance A stand-alone hardware device or software environment dedicated to a specific task. See hardware appliance and software appliance. and Tools segment sales increased almost 9 percent to $3.7 billion for 2004. Underlying sales increased 8 percent, excluding a more than 2 percentage point favorable impact from currency and a negative impact of more than 1 percentage point related to exiting the manufacturing of bench top and stationary Stationary can mean:
her·met·ic or her·met·i·cal adj. Completely sealed, especially against the escape or entry of air. motors. The residential storage and disposer dis·pose v. dis·posed, dis·pos·ing, dis·pos·es v.tr. 1. To place or set in a particular order; arrange. 2. increases resulted from strength in new and existing home markets and higher demand at major retailers during the year. Earnings increased 11 percent to $530 million for 2004, from $479 million in 2003, primarily due to increased volume and leverage from higher sales. Upcoming Investor Events On Tuesday Tuesday: see week. , November November: see month. 2, 2004, at 2:00 p.m. EST P.M. also p.m. or p.m. abbr. post meridiem Usage Note: By definition, 12 a.m. (1:00 p.m. CST CST abbr. 1. Central Standard Time 2. convulsive shock treatment CST Central Standard Time Noun 1. ), Emerson senior management will discuss the quarterly and fiscal year results during an investor conference call. All interested parties may listen to the live conference call via the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the by going to the Investor Relations Investor relations The process by which the corporation communicates with its investors. area of Emerson's Web site at www.gotoemerson.com/financial and completing a brief registration form. A replay of the conference call will be available for the next three months at the same location on the Web site. Details of upcoming events will be posted as they occur in the Investor Relations Calendar of Events on the corporate Web site. On Thursday Thursday: see week. morning, January January: see month. 27, 2005, Emerson senior management will host Emerson's annual investment community update meeting in New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. . Additional details will be available in December December: see month. . Forward-Looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. and Cautionary Statements Statements in this release that are not strictly historical may be "forward-looking" statements, which involve risks and uncertainties. These include economic and currency conditions, market demand, pricing, and competitive and technological factors, among others, as set forth in the company's most recent Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. filed with the SEC.
TABLE 1
EMERSON AND SUBSIDIARIES
CONSOLIDATED OPERATING RESULTS
(DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)
Quarter Ended September 30, Percent
2003 2004 Change
Net sales $3,694 $4,120 12%
Less: Costs and expenses
Cost of sales 2,400 2,631
SG&A expenses 753 860
Other deductions, net 79 49
Interest expense, net 56 50
Earnings before income taxes 406 530 31%
Income taxes 130 176
Net earnings $276 $354 28%
Diluted earnings per common share $0.66 $0.84 27%
Quarter Ended September 30,
2003 2004
Other deductions, net
Rationalization of operations $41 $37
Amortization of intangibles 5 7
Other 33 5
Total $79 $49
TABLE 2
EMERSON AND SUBSIDIARIES
CONSOLIDATED OPERATING RESULTS
(DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)
Year Ended September 30, Percent
2003 2004 Change
Net sales $13,958 $15,615 12%
Less: Costs and expenses
Cost of sales 9,060 10,049
SG&A expenses 2,935 3,281
Other deductions, net 318 223
Interest expense, net 231 210
Earnings from continuing operations
before income taxes 1,414 1,852 31%
Income taxes 401 595
Earnings from continuing operations 1,013 1,257 24%
Net gain from discontinued operations 76 -
Net earnings $1,089 $1,257 15%
Diluted earnings per common share:
Earnings from continuing operations $2.41 $2.98 24%
Discontinued operations 0.18 -
Diluted earnings per common share $2.59 $2.98 15%
Year Ended September 30,
2003 2004
Other deductions, net
Gains from divestitures of business
interests $(24) $(27)
Rationalization of operations 141 129
Impairment 54 3
Amortization of intangibles 17 21
Other 130 97
Total $318 $223
TABLE 3
EMERSON AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN MILLIONS)
September 30,
2003 2004
Assets
Cash and equivalents $696 $1,346
Receivables, net 2,650 2,932
Inventories 1,558 1,705
Other current assets 596 433
Total current assets 5,500 6,416
Property, plant & equipment, net 2,962 2,937
Goodwill 4,942 5,259
Other 1,790 1,749
$15,194 $16,361
Liabilities and Stockholders' Equity
Short-term borrowings and current
maturities of long-term debt $391 $902
Accounts payable 1,397 1,629
Accrued expenses 1,513 1,695
Income taxes 116 113
Total current liabilities 3,417 4,339
Long-term debt 3,733 3,136
Other liabilities 1,584 1,648
Stockholders' equity 6,460 7,238
$15,194 $16,361
TABLE 4
EMERSON AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
(DOLLARS IN MILLIONS)
Year Ended September 30,
2003 2004
Operating Activities
Net earnings $1,089 $1,257
Depreciation and amortization 534 557
Changes in operating working capital 266 322
Pension funding (308) (167)
Gains on divestitures and other 150 247
Net cash provided by operating activities 1,731 2,216
Investing Activities
Capital expenditures (337) (400)
Purchases of businesses, net of cash and
equivalents acquired (6) (414)
Divestitures of businesses and other, net 39 97
Net cash used in investing activities (304) (717)
Financing Activities
Net decrease in short-term borrowings (1,232) (106)
Proceeds from long-term debt 746 29
Principal payments on long-term debt (17) (16)
Dividends paid (661) (675)
Treasury stock, net 11 (121)
Net cash used in financing activities (1,153) (889)
Effect of exchange rate changes on cash and
equivalents 41 40
Increase in cash and equivalents 315 650
Beginning cash and equivalents 381 696
Ending cash and equivalents $696 $1,346
TABLE 5
EMERSON AND SUBSIDIARIES
SEGMENT SALES AND EARNINGS
(DOLLARS IN MILLIONS)
Quarter Ended September 30,
2003 2004
Sales
Process Management $953 $1,024
Industrial Automation 671 774
Network Power 619 737
Climate Technologies 676 744
Appliance and Tools 862 943
3,781 4,222
Eliminations (87) (102)
Net Sales $3,694 $4,120
Quarter Ended September 30,
2003 2004
Earnings
Process Management $130 $167
Industrial Automation 82 111
Network Power 70 91
Climate Technologies 101 113
Appliance and Tools 125 131
508 613
Differences in accounting methods 31 34
Corporate and other (77) (67)
Interest expense, net (56) (50)
Earnings before income taxes $406 $530
Quarter Ended September 30,
2003 2004
Rationalization of operations
Process Management $11 $7
Industrial Automation 6 3
Network Power 7 5
Climate Technologies 3 4
Appliance and Tools 8 16
Corporate 6 2
Total Emerson $41 $37
TABLE 6
EMERSON AND SUBSIDIARIES
SEGMENT SALES AND EARNINGS
(DOLLARS IN MILLIONS)
Year Ended September 30,
2003 2004
Sales
Process Management $3,394 $3,703
Industrial Automation 2,600 2,936
Network Power 2,316 2,692
Climate Technologies 2,614 2,983
Appliance and Tools 3,453 3,749
14,377 16,063
Discontinued operations (41) -
Eliminations (378) (448)
Net Sales $13,958 $15,615
Year Ended September 30,
2003 2004
Earnings
Process Management $388 $476
Industrial Automation 330 391
Network Power 168 297
Climate Technologies 386 467
Appliance and Tools 479 530
1,751 2,161
Discontinued operations 12 -
Differences in accounting methods 127 126
Corporate and other (245) (225)
Interest expense, net (231) (210)
Earnings from continuing operations
before income taxes $1,414 $1,852
Year Ended September 30,
2003 2004
Rationalization of operations
Process Management $36 $31
Industrial Automation 20 14
Network Power 39 26
Climate Technologies 20 17
Appliance and Tools 36 47
Corporate (2) (6)
Discontinued operations (8) -
Total Emerson $141 $129
TABLE 7
Reconciliations of Non-GAAP Financial Measures
The following reconciles each non-GAAP measure with the most directly
comparable GAAP measure (dollars in millions):
Percent
2003 2004 Change
Fourth-Quarter Operating Profit
Net Sales $3,694 $4,120 12%
Cost of Sales 2,400 2,631
SG&A Expenses 753 860
Operating Profit (Non-GAAP) 541 629 16%
OP % (Non-GAAP) 14.6% 15.3%
Other Deductions, Net 79 49
Interest Expense, Net 56 50
Pre-Tax Earnings $406 $530 31%
Pre-Tax Earnings % 11.0% 12.9%
4Q 2004
Net Sales
Underlying Sales (Non-GAAP) 8%
Currency Translation 3 pts
Acquisitions/Divestitures 1 pt
Net Sales 12%
All amounts above are GAAP financial measures except as noted.
TABLE 8
Reconciliations of Non-GAAP Financial Measures
The following reconciles each non-GAAP measure with the most directly
comparable GAAP measure (dollars in millions):
Percent
2003 2004 Change
Fiscal Year Cash Flow
Operating Cash Flow $1,731 $2,216 28%
Percent to Earnings 176%
Capital Expenditures 337 400
Free Cash Flow (Non-GAAP) $1,394 $1,816 30%
Percent to Earnings (Non-GAAP) 144%
2003 2004
Fiscal Year Operating Profit
Net Sales $13,958 $15,615 12%
Cost of Sales 9,060 10,049
SG&A Expenses 2,935 3,281
Operating Profit (Non-GAAP) 1,963 2,285 16%
OP % (Non-GAAP) 14.1% 14.6%
Other Deductions, Net 318 223
Interest Expense, Net 231 210
Pre-Tax Earnings $1,414 $1,852 31%
Pre-Tax Earnings % 10.1% 11.9%
2004
Net Sales
Underlying Sales (Non-GAAP) 8%
Currency Translation 4 pts
Acquisitions/Divestitures -
Net Sales 12%
All amounts above are GAAP financial measures except as noted.
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