AGCO, Your Agriculture Company (NYSE:AGCO), a worldwide
manufacturer and distributor of agricultural equipment, reported
net sales of $2.3 billion for the first quarter of 2012, an
increase of 26.5% compared to net sales of $1.8 billion for the
first quarter of 2011. Reported and adjusted net income per share
were $1.21 for the first quarter of 2012. These results compare to
reported and adjusted net income per share of $0.81 for the first
quarter of 2011. Excluding unfavorable currency translation impacts
of 4.3%, net sales in the first quarter of 2012 increased
approximately 30.8% compared to the same period in 2011.
“AGCO’s strong performance in the first quarter produced record
sales and earnings,” stated Martin Richenhagen, Chairman, President
and Chief Executive Officer. “We capitalized on improved demand in
key Western European markets and continued market strength in North
America while executing against our important margin improvement
initiatives. Margin expansion in the first quarter was led by the
Europe/Africa/Middle East (EAME) and North American regions. EAME’s
first quarter operating margins exceeded 11% and North American
operating margins improved over 500 basis points compared to the
first quarter of 2011. Our GSI acquisition was also a contributor
to the positive results, particularly in North America.”
“Industry fundamentals remain excellent, and our 2012 sales and
earnings outlook has been increased,” continued Mr. Richenhagen.
“We will maintain our focus on improving profitability throughout
2012, while also increasing our investments to support our longer
term objectives. These investments include an expansion at our
Fendt manufacturing facility in Marktoberdorf, Germany and
construction of the low horsepower production facility in China. In
addition, our important investments in new product development and
market expansion will remain at high levels in the coming quarters
as we work to meet Tier 4 final emission requirements and refresh
and grow our product line. We are forecasting another year of solid
cash generation after funding our growth investments.”
Sales growth for the first quarter of 2012 was approximately
19.4%, excluding an 11.4% benefit of acquisitions and the 4.3%
unfavorable impact of currency translation. AGCO’s EAME region
reported a net sales increase of approximately 28.5% in the first
quarter of 2012 compared to the first quarter of 2011, excluding
unfavorable currency translation impacts. Sales growth was
strongest in Western and Eastern Europe. In the North American
region, sales in the first quarter of 2012 improved 58.6% compared
to the first quarter of 2011, excluding unfavorable currency
translation impacts. The GSI acquisition and growth in sales of
sprayer equipment contributed to the results. AGCO’s South American
region reported a sales increase of 7.0% in the first quarter of
2012, compared to the first quarter of 2011, excluding unfavorable
currency translation impacts. The benefits of acquisitions drove
most of the increase.
Sales growth and improved gross margins contributed to higher
income from operations for the first quarter of 2012 compared to
the first quarter of 2011. Production increases in Europe and North
America, and a richer product mix, partially offset by higher
material costs, produced improved gross margins. AGCO increased its
investment in new product development, resulting in increased
engineering expenses in the first quarter of 2012 compared to the
same period last year.
Market Update
Industry Unit Retail Sales
Quarter ended March 31, 2012
Tractors
Change from
Prior Year Period
Combines
Change from
Prior Year Period
North America +1% (40%) South America (7%) (3%) Western
Europe +1% +23%
North America
In the first quarter of 2012, industry unit retail sales of
tractors were up modestly compared to the same period in 2011.
Industry retail sales of combines were down substantially from
robust levels in the prior year. Record farm income in 2011 and the
expectation of continued favorable farm economics resulted in the
strength in retail sales of high horsepower tractors. Improvement
in the dairy and livestock sector contributed to higher industry
unit retail sales of mid-range tractors and hay equipment.
South America
Industry unit retail sales of tractors and combines in the first
quarter of 2012 declined compared to the high levels in the same
period in 2011. Drought impacted the early harvests in southern
Brazil and Argentina and resulted in weaker demand in these
markets. Despite the adverse weather in the first quarter, overall
industry demand in South America remains at a high level.
Western Europe
Industry demand in Western Europe remained strong during the
first quarter of 2012 compared to the prior year period. Healthy
farm economics drove increases in both tractors and combines. The
tractor sales growth in France, the United Kingdom and Germany was
partially offset by declines in Italy and Spain. Combine sales also
improved compared to weak levels in the first quarter of 2011.
“The growing population and the shift to higher protein diets
are driving increases in the consumption of food and long-term
demand for grain,” stated Mr. Richenhagen. “Currently, inventories
of grain remain at historically low levels on a stocks-to-use
basis. Elevated soft commodity prices, resulting from these
positive supply/demand dynamics, are providing support for farm
income and our industry. In Western Europe, industry demand has
returned to more normal levels, and recovery is continuing in
Eastern Europe. Positive farm fundamentals continue to support
strong market demand in North America. The Brazilian government
continues to support their farming industry, and attractive
government financing rates have been extended through the end of
2013. We remain positive on our 2012 industry view.”
Regional Results
AGCO Regional Net Sales (in
millions)
Three Months Ended March 31,
2012(1)
2011(1)
% change from 2011
% change from2011 due
tocurrencytranslation (1)
North America $ 566.5 $ 359.4 + 57.6% (1.0%) South
America 415.4 410.5 + 1.2% (5.8%) EAME 1,199.8 973.0 + 23.3% (5.2%)
Asia /Pacific 92.0 54.8 + 67.9% + 1.6%
Total $ 2,273.7 $ 1,797.7 + 26.5% (4.3%)
(1) Effective for the quarter ended March
31, 2012, the Company has realigned its business segment reporting.
See Footnote 6 for additional disclosure.
North America
Solid industry demand produced growth of 27.0% in North American
sales in the first quarter of 2012 compared to the first quarter of
2011, excluding the impact of unfavorable currency translation and
the benefits of acquisitions. The most significant increases were
in sprayers, high horsepower tractors and hay equipment. The
positive impact of acquisitions, higher sales, increased production
and expense control initiatives all contributed to growth in income
from operations of $37.5 million for the first quarter of 2012
compared to the same period in 2011.
South America
AGCO’s sales in South America were relatively flat compared to
the first quarter of 2011 on a constant currency basis and
exclusive of acquisition benefits. Sales increases in Brazil were
offset by lower sales in Argentina. Income from operations
decreased $9.5 million in the first quarter of 2012 compared to the
same period in 2011 primarily due to the impact of acquisition
related costs and higher engineering and product introduction
expenses.
EAME
Positive farm fundamentals in Western Europe and recovery in
Eastern Europe resulted in sales growth of approximately 24.5% in
the EAME region compared to the first quarter of 2011, exclusive of
acquisition benefits and the unfavorable impact of currency
translation. AGCO experienced the largest sales increases in
Germany, France and the United Kingdom. Income from operations grew
by $54.8 million in the first quarter of 2012 compared to the same
period in 2011. Higher sales and production levels along with a
richer mix of products contributed to the improvement.
Asia/Pacific
Net sales in AGCO’s Asia/Pacific segment increased by
approximately 23.8% during the first quarter of 2012 compared to
the prior year period, excluding the favorable impact of currency
translation and acquisitions. Growth in the Asian markets produced
most of the increase. Income from operations in the Asia/Pacific
region decreased $7.1 million in the first quarter of 2012 compared
to the same period in 2011 due to additional market development
costs in China.
Outlook
Global industry sales are expected to grow modestly in 2012
compared to 2011. Growth is expected in Western and Eastern Europe
and market conditions are projected to remain strong in North
America and South America. AGCO is targeting adjusted earnings per
share of approximately $5.50 for the full year of 2012. Net sales
are expected to range from $10.2 billion to $10.5 billion for the
full year. Gross margin improvement is expected to be partially
offset by increased engineering and market expansion
expenditures.
AGCO will be hosting a conference call with respect to this
earnings announcement at 10:00 a.m. Eastern Time on Tuesday, May 1,
2012. The Company will refer to slides on its conference call.
Interested persons can access the conference call and slide
presentation via AGCO’s website at www.agcocorp.com on the
“Investors/Events” page in the “Company” section of our website. A
replay of the conference call will be available approximately two
hours after the conclusion of the conference call for twelve months
following the call. A copy of this press release will be available
on AGCO’s website for at least twelve months following the
call.
Safe Harbor Statement
Statements that are not historical facts, including the
projections of earnings per share, sales, cash flow, market
conditions, margin improvements, profitability, new product
development, factory productivity, investments in facilities and
expanding markets, industry demand, general economic conditions,
engineering efforts and capital expenditures, are forward-looking
and subject to risks that could cause actual results to differ
materially from those suggested by the statements. The following
are among the factors that could cause actual results to differ
materially from the results discussed in or implied by the
forward-looking statements.
- Our financial results depend entirely
upon the agricultural industry, and factors that adversely affect
the agricultural industry generally, including declines in the
general economy, increases in farm input costs, lower commodity
prices, lower farm income and changes in the availability of credit
for our retail customers, will adversely affect us.
- The recent poor performance of the
general economy may result in a decline in demand for our products.
However, we are unable to predict with accuracy the amount or
duration of this decline, and our forward-looking statements
reflect merely our best estimates at the current time.
- A majority of our sales and
manufacturing take place outside the United States, and, as a
result, we are exposed to risks related to foreign laws, taxes,
economic conditions, labor supply and relations, political
conditions and governmental policies. These risks may delay or
reduce our realization of value from our international
operations.
- Most retail sales of the products that
we manufacture are financed, either by our joint ventures with
Rabobank or by a bank or other private lender. During 2011, our
joint ventures with Rabobank, which are controlled by Rabobank and
are dependent upon Rabobank for financing as well, financed
approximately 50% of the retail sales of our tractors and combines
in the markets where the joint ventures operate. Any difficulty by
Rabobank to continue to provide that financing, or any business
decision by Rabobank as the controlling member not to fund the
business or particular aspects of it (for example, a particular
country or region), would require the joint ventures to find other
sources of financing (which may be difficult to obtain), or us to
find another source of retail financing for our customers, or our
customers would be required to utilize other retail financing
providers. As a result of the recent economic downturn, financing
for capital equipment purchases generally has become more difficult
in certain regions and in some cases, was expensive to obtain. To
the extent that financing is not available or available only at
unattractive prices, our sales would be negatively impacted.
- Both AGCO and our retail finance joint
ventures have substantial account receivables from dealers and end
customers, and we would be adversely impacted if the collectability
of these receivables was not consistent with historical experience;
this collectability is dependent upon the financial strength of the
farm industry, which in turn is dependent upon the general economy
and commodity prices, as well as several of the other factors
listed in this section.
- We recently have experienced
substantial and sustained volatility with respect to currency
exchange rate and interest rate changes, which can adversely affect
our reported results of operations and the competitiveness of our
products.
- All acquisitions, including the
acquisition of GSI, involve risks relating to retention of key
employees and customers and fulfilling projections prepared by or
at the direction of prior ownership. In addition, we may encounter
difficulties in integrating GSI into our business and may not fully
achieve, or achieve within a reasonable time frame, expected
strategic objectives and other expected benefits of the
acquisition.
- Our success depends on the introduction
of new products, particularly engines that comply with emission
requirements, which requires substantial expenditures.
- Our expansion plans in emerging
markets, including establishing a greater manufacturing and
marketing presence and growing our use of component suppliers,
could entail significant risks.
- We depend on suppliers for components,
parts and raw materials for our products, and any failure by our
suppliers to provide products as needed, or by us to promptly
address supplier issues, will adversely impact our ability to
timely and efficiently manufacture and sell products. We also are
subject to raw material price fluctuations, which can adversely
affect our manufacturing costs.
- We face significant competition, and if
we are unable to compete successfully against other agricultural
equipment manufacturers, we would lose customers and our net sales
and profitability would decline.
- We have a substantial amount of
indebtedness, and, as result, we are subject to certain restrictive
covenants and payment obligations that may adversely affect our
ability to operate and expand our business.
Further information concerning these and other factors is
included in AGCO’s filings with the Securities and Exchange
Commission, including its Form 10-K for the year ended
December 31, 2011. AGCO disclaims any obligation to
update any forward-looking statements except as required by
law.
About AGCO
AGCO, Your Agriculture Company, (NYSE: AGCO), is a global leader
focused on the design, manufacture and distribution of agricultural
machinery. AGCO supports more productive farming through a full
line of tractors, combines, hay tools, sprayers, forage equipment,
tillage, implements, grain storage and protein production systems,
as well as related replacement parts. AGCO products are sold
through four core machinery brands, Challenger®, Fendt®, Massey
Ferguson® and Valtra®, and are distributed globally through 3,100
independent dealers and distributors in more than 140 countries
worldwide. Retail financing is available through AGCO Finance for
qualified purchasers. Founded in 1990, AGCO is headquartered in
Duluth, Georgia, USA. In 2011, AGCO had net sales of $8.8 billion.
http://www.agcocorp.com
Please visit our website at
www.agcocorp.com
AGCO CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE
SHEETS (unaudited and in millions)
March 31,
2012
December 31,
2011
ASSETS Current Assets: Cash and cash equivalents $ 426.7 $
724.4 Accounts and notes receivable, net 1,108.0 994.2 Inventories,
net 2,024.7 1,559.6 Deferred tax assets 145.8 142.7 Other current
assets 276.5 241.9 Total current assets
3,981.7 3,662.8 Property, plant and equipment, net 1,277.8 1,222.6
Investment in affiliates 366.3 346.3 Deferred tax assets 41.1 37.6
Other assets 133.5 126.9 Intangible assets, net 662.6 666.5
Goodwill 1,238.8 1,194.5 Total assets $
7,701.8 $ 7,257.2
LIABILITIES AND
STOCKHOLDERS’ EQUITY Current Liabilities: Current portion of
long-term debt $ 68.4 $ 60.1 Convertible senior subordinated notes
185.6 — Accounts payable 1,062.2 937.0 Accrued expenses 1,019.0
1,080.6 Other current liabilities 137.1 127.8
Total current liabilities 2,472.3 2,205.5 Long-term debt,
less current portion 1,331.1 1,409.7 Pensions and postretirement
health care benefits 300.7 298.6 Deferred tax liabilities 201.2
192.3 Other noncurrent liabilities 139.7 119.9
Total liabilities 4,445.0 4,226.0
Temporary Equity 31.5 — Stockholders’ Equity:
AGCO Corporation stockholders’ equity: Common stock 1.0 1.0
Additional paid-in capital 1,065.7 1,073.2 Retained earnings
2,441.8 2,321.6 Accumulated other comprehensive loss (321.1
) (400.6 ) Total AGCO Corporation stockholders’ equity
3,187.4 2,995.2 Noncontrolling
interests 37.9 36.0 Total stockholders’
equity 3,225.3 3,031.2 Total
liabilities, temporary equity and stockholders’ equity $ 7,701.8
$ 7,257.2
See accompanying notes to condensed
consolidated financial statements.
AGCO CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (unaudited and in millions, except per
share data) Three Months Ended March 31, 2012
2011 Net sales $ 2,273.7 $ 1,797.7 Cost of goods sold
1,780.7 1,441.8 Gross profit 493.0 355.9
Selling, general and administrative expenses 238.9 184.7
Engineering expenses 72.1 57.9 Restructuring and other infrequent
expenses — 0.2 Amortization of intangibles 12.2
4.4 Income from operations 169.8 108.7
Interest expense, net 13.0 5.5 Other expense, net 4.4
2.3 Income before income taxes and equity in
net earnings of affiliates 152.4 100.9 Income tax provision
43.2 30.7 Income before equity
in net earnings of affiliates 109.2 70.2 Equity in net
earnings of affiliates 12.0 11.4
Net income 121.2 81.6 Net income attributable to
noncontrolling interests (1.0 ) (1.6 ) Net
income attributable to AGCO Corporation and subsidiaries $ 120.2
$ 80.0 Net income per common share
attributable to AGCO Corporation and subsidiaries: Basic $
1.24 $ 0.85 Diluted $ 1.21 $ 0.81
Weighted average number of common and common equivalent
shares outstanding: Basic 97.1 94.1
Diluted 99.1 98.3
See accompanying notes to condensed
consolidated financial statements.
AGCO CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (unaudited and in millions)
Three Months Ended March 31, 2012 2011 Cash flows
from operating activities: Net income $ 121.2 $ 81.6
Adjustments to reconcile net income to net cash used in operating
activities: Depreciation 43.4 36.4 Deferred debt issuance cost
amortization 0.9 0.4 Amortization of intangibles 12.2 4.4
Amortization of debt discount 2.2 2.0 Stock compensation 8.4 4.7
Equity in net earnings of affiliates, net of cash received (9.0 )
(7.7 ) Deferred income tax benefit (1.1 ) (0.6 ) Other (0.1 ) (1.2
)
Changes in operating assets and
liabilities, net of effects from purchase of businesses:
Accounts and notes receivable, net (98.3 ) (17.5 ) Inventories, net
(421.2 ) (218.2 ) Other current and noncurrent assets (24.5 ) (28.2
) Accounts payable 125.3 20.3 Accrued expenses (59.4 ) (21.0 )
Other current and noncurrent liabilities 19.5
(22.8 ) Total adjustments (401.7 ) (249.0 ) Net cash
used in operating activities (280.5 ) (167.4 ) Cash
flows from investing activities: Purchases of property, plant and
equipment (87.1 ) (36.8 ) Proceeds from sale of property, plant and
equipment 0.1 0.5 Purchase of businesses, net of cash acquired (2.4
) (88.3 ) Investments in consolidated affiliates, net of cash
acquired (20.1 ) (25.0 ) Investments in unconsolidated affiliates,
net (2.6 ) (2.4 ) Restricted cash and other (10.0 ) —
Net cash used in investing activities (122.1 )
(152.0 ) Cash flows from financing activities: Conversion of
convertible senior subordinated notes — (60.4 ) Proceeds from
(repayment of) debt obligations, net 93.7 (30.9 ) Payment of debt
issuance costs (0.1 ) — Payment of minimum tax withholdings on
stock compensation — (2.0 ) Distribution to noncontrolling interest
(0.2 ) — Net cash provided by (used in)
financing activities 93.4 (93.3 ) Effect of
exchange rate changes on cash and cash equivalents 11.5
7.1 Decrease in cash and cash equivalents
(297.7 ) (405.6 ) Cash and cash equivalents, beginning of period
724.4 719.9 Cash and cash equivalents,
end of period $ 426.7 $ 314.3
See accompanying notes to condensed
consolidated financial statements.
AGCO CORPORATION AND SUBSIDIARIESNOTES TO
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited, in millions,
except per share data)
1. STOCK COMPENSATION EXPENSE
The Company recorded stock compensation expense as follows:
Three Months EndedMarch 31,
2012 2011 Cost of goods sold $ 0.6 $ 0.3 Selling, general
and administrative expenses 7.8 4.4 Total stock
compensation expense $ 8.4 $ 4.7
2. INDEBTEDNESS
Indebtedness at March 31, 2012 and December 31, 2011 consisted
of the following:
March 31,2012
December 31,2011
5⅞% Senior notes due 2021 $ 300.0 $ 300.0 4½% Senior term loan due
2016 266.8 259.4 Credit Facility 758.0 665.0 1¼% Convertible senior
subordinated notes due 2036 185.6 183.4 Other long-term debt
74.7 62.0 1,585.1 1,469.8 Less: Current
portion of long-term debt (68.4 ) (60.1 )
1¼ % Convertible senior subordinated notes
due 2036
(185.6 ) — Total indebtedness, less current
portion $ 1,331.1 $ 1,409.7
As of March 31, 2012, the closing sales price of the Company’s
common stock had exceeded 120% of the conversion price of the 1¼%
convertible senior subordinated notes for at least 20 trading days
in the 30 consecutive trading days ending March 31, 2012, and,
therefore, the Company classified the notes as a current liability.
The Company also classified the equity component of the 1¼%
convertible senior subordinated notes as “temporary equity.” The
amount classified as “temporary equity” was measured as the excess
of (i) the amount of cash that would be required to be paid upon
conversion over (ii) the current carrying amount of the
liability-classified component. Future classification of the notes
between current and long-term debt and classification of the equity
component of the notes as “temporary equity” is dependent on the
closing sales price of the Company’s common stock during future
quarters.
3. INVENTORIES
Inventories at March 31, 2012 and December 31, 2011 were as
follows:
March 31,2012
December 31,2011
Finished goods $ 775.9 $ 500.0 Repair and replacement parts 522.2
450.7 Work in process 176.6 127.6 Raw materials 550.0
481.3 Inventories, net $ 2,024.7 $ 1,559.6
4. ACCOUNTS RECEIVABLE SALES AGREEMENTS
At March 31, 2012 and December 31, 2011, the Company had
accounts receivable sales agreements that permit the sale, on an
ongoing basis, of a majority of its wholesale receivables in North
America and Europe to its 49% owned U.S., Canadian and European
retail finance joint ventures. As of March 31, 2012 and
December 31, 2011, the cash received from receivables sold under
the U.S., Canadian and European accounts receivable sales
agreements was approximately $885.8 million and $827.5 million,
respectively.
Losses on sales of receivables associated with the accounts
receivable financing facilities, reflected within “Other expense,
net” in the Company’s Condensed Statements of Operations, were
approximately $5.2 million during the three months ended
March 31, 2012. Losses on sales of receivables associated with
the accounts receivable financing facilities reflected within
“Other expense, net” and “Interest expense, net” in the Company’s
Condensed Consolidated Statements of Operations were approximately
$3.6 million during the three months ended March 31, 2011.
The Company’s retail finance joint ventures in Brazil and
Australia also provide wholesale financing to the Company’s
dealers. As of March 31, 2012 and December 31, 2011, these retail
finance joint ventures had approximately $63.2 million and $62.0
million, respectively, of outstanding accounts receivable
associated with these arrangements. In addition, the Company sells
certain trade receivables under factoring arrangements to other
financial institutions around the world.
5. EARNINGS PER SHARE
The Company’s convertible senior subordinated notes provide for
(i) the settlement upon conversion in cash up to the principal
amount of the converted notes with any excess conversion value
settled in shares of the Company’s common stock, and (ii) the
conversion rate to be increased under certain circumstances if the
notes are converted in connection with certain change of control
transactions. Dilution of weighted shares outstanding will depend
on the Company’s stock price for the excess conversion value using
the treasury stock method. A reconciliation of net income
attributable to AGCO Corporation and subsidiaries and weighted
average common shares outstanding for purposes of calculating basic
and diluted earnings per share for the three months ended March 31,
2012 and 2011 is as follows:
Three Months Ended March 31,
2012 2011 Basic net income per share: Net income
attributable to AGCO Corporation and subsidiaries $ 120.2 $ 80.0
Weighted average number of common shares outstanding 97.1
94.1 Basic net income per share attributable to AGCO
Corporation and subsidiaries $ 1.24 $ 0.85 Diluted net
income per share:
Net income attributable to AGCO
Corporation and subsidiaries for purposes of computing diluted net
income per share
$
120.2
$
80.0
Weighted average number of common shares outstanding 97.1
94.1
Dilutive stock-settled appreciation
rights, performance share awards and restricted stock awards
1.0
0.4
Weighted average assumed conversion of
contingently convertible senior subordinated notes
1.0
3.8
Weighted average number of common and
common equivalent shares outstanding for purposes of computing
diluted earnings per share
99.1
98.3
Diluted net income per share attributable to AGCO
Corporation and subsidiaries $ 1.21 $ 0.81
6. SEGMENT REPORTING
Effective January 1, 2012, the Company modified its system of
reporting, resulting from changes to its internal management and
organizational structure, which changed its reportable segments
from North America; South America; Europe/Africa/Middle East; and
Rest of World, to North America; South America;
Europe/Africa/Middle East; and Asia/Pacific. The Asia/Pacific
reportable segment includes the regions of Asia, Australia and New
Zealand, and the Europe/Africa/Middle East segment will now include
certain markets in Eastern Europe. Effective January 1, 2012, these
reportable segments are reflective of how the Company’s chief
operating decision maker reviews operating results for the purposes
of allocating resources and assessing performance. Disclosures for
the three months ended March 31, 2011 have been adjusted to reflect
the change in reportable segments.
The Company’s four reportable segments distribute a full range
of agricultural equipment and related replacement parts. The
Company evaluates segment performance primarily based on income
from operations. Sales for each segment are based on the location
of the third-party customer. The Company’s selling, general and
administrative expenses and engineering expenses are charged to
each segment based on the region and division where the expenses
are incurred. As a result, the components of income from operations
for one segment may not be comparable to another segment. Segment
results for the three months ended March 31, 2012 and 2011 are as
follows:
Three Months EndedMarch 31,
NorthAmerica
SouthAmerica
Europe/Africa/Middle East
Asia/Pacific
Consolidated
2012
Net sales $ 566.5 $ 415.4 $ 1,199.8 $ 92.0 $ 2,273.7 Income from
operations 50.2 23.9 135.8 0.9 210.8
2011
Net sales $ 359.4 $ 410.5 $ 973.0 $ 54.8 $ 1,797.7 Income from
operations 12.7 33.4 81.0 8.0 135.1
A reconciliation from the segment information to the
consolidated balances for income from operations is set forth
below:
Three Months EndedMarch 31,
2012 2011 Segment income from operations $ 210.8 $ 135.1
Corporate expenses (21.0 ) (17.4 ) Stock compensation expense (7.8
) (4.4 ) Restructuring and other infrequent expenses — (0.2 )
Amortization of intangibles (12.2 ) (4.4 )
Consolidated income from operations $ 169.8 $ 108.7
RECONCILIATION OF NON-GAAP MEASURES
This earnings release discloses adjusted income from operations,
net income and earnings per share, all of which exclude amounts
that differ from the most directly comparable measure calculated in
accordance with U.S. generally accepted accounting principles
(“GAAP”). A reconciliation of each of these financial measures to
the most directly comparable GAAP measure is included below.
The following is a reconciliation of adjusted income from
operations, net income and earnings per share to reported income
from operations, net income and earnings per share for the three
months ended March 31, 2012 and 2011 (in millions, except per share
data):
Three months ended March 31, 2012 2011
Income
From
Operations
Net
Income(1)
EarningsPerShare(1)
Income
From
Operations
Net
Income(1)
EarningsPerShare(1)
As adjusted $ 169.8 $ 120.2 $ 1.21 $ 108.9 $ 80.1 $ 0.81
Restructuring and
other infrequent expenses(2)
—
—
—
0.2
0.1
—
As reported $ 169.8 $ 120.2 $ 1.21 $ 108.7 $ 80.0 $ 0.81
(1) Net income and earnings per share amounts are after tax.
(2) The restructuring and other infrequent expenses recorded in the
first three months ended March 31, 2011 primarily related to
severance and other related costs associated with the Company’s
rationalization of its operations in France.
This earnings release discloses the percentage change in
regional net sales due to currency translation. The following is a
reconciliation of net sales for the three months ended March 31,
2012 at actual exchange rates compared to 2011 adjusted exchange
rates (in millions, except percentages):
Three Months Ended
March 31,
2012 at ActualExchange Rates
2012 at AdjustedExchange Rates (1)
% change from 2011due to
currencytranslation
North America $ 566.5 $ 570.1 (1.0 )% South America 415.4
439.1 (5.8 )% Europe/Africa/Middle East 1,199.8 1,250.5 (5.2 )%
Asia/Pacific 92.0 91.1 1.6 %
Total $ 2,273.7 $
2,350.8 (4.3 )%
(1) Adjusted exchange rates are 2011
exchange rates.
This earnings release discloses the percentage change in
regional net sales due to the impact of acquisitions. The following
table sets forth, for the three months ended March 31, 2012, the
impact to net sales of acquisitions by geographical segment (in
millions, except percentages):
Three Months EndedMarch 31,
Change due to acquisitions
2012
2011
% changefrom 2011
$
%
North America $ 566.5 $ 359.4 57.6 % $ 113.7 31.6 % South
America 415.4 410.5 1.2 % 28.5 7.0 % Europe/Africa/Middle East
1,199.8 973.0 23.3 % 39.0 4.0 % Asia Pacific 92.0
54.8 67.9 % 23.3 42.5 % $ 2,273.7 $ 1,797.7 26.5 % $
204.5 11.4 %
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