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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
April 27, 2001
Date of Report (Date of earliest event reported)
INTERNATIONAL FLAVORS & FRAGRANCES INC.
(Exact name of registrant as specified in its charter)
New York
(State or other jurisdiction of incorporation)
1-4858 13-1432060
(Commission File Number) (IRS Employer Identification No.)
521 West 57th Street, New York, New York 10019
---------------------------------------- -------
(Address of principal executive offices) (Zip Code)
(212) 765-5500
-----------------------------------------------------
(Registrant's telephone number, including area code)
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits:
Exhibit No. Description
----------- -----------
99.1 Unaudited historical geographic information with respect to the years
2000 and 1999, reclassified to reflect the separation of EAME into the
regions of Europe and CAME (as defined below).
99.2 Unaudited quarterly historical geographic information with respect to
the year 2000, reclassified to reflect the separation of EAME into the
regions of Europe and CAME.
99.3 Unaudited proforma quarterly geographic information with respect to
the year 2000, reclassified to reflect the separation of EAME into the
regions of Europe and CAME giving effect to the BBA acquisition as if
it had occurred at January 1, 2000.
99.4 Unaudited quarterly proforma consolidated statements of income for the
year 2000.
99.5 Unaudited proforma consolidated statement of income for the year 2000.
ITEM 9. REGULATION FD DISCLOSURE
As previosly announced, effective January 1, 2001 Internationl Flavors &
Fragrances Inc. (the "Company") was reorganized into five geographic regions
with an individual manager responsible for each region. The five regions
include North America, Europe, the newly-constituted Central Asia, Middle
East ("CAME"), Latin America and Asia-Pacific; previously Europe and CAME
had been combined as one geographic region - Europe Africa and the Middle
East ("EAME"). North and Latin America and Asia Pacific were unaffected by
the geographic reorganization.
Also, as previously announced, the Company acquired Bush Boake Allen
("BBA"), effective November 3, 2000, and BBA operating results are included
in the Company's consolidated results from that date.
In anticipation of earnings announcements for 2001, the following
information is being furnished as a result of or otherwise in connection
with the acquisition of BBA and the reorganization of the geographic
regions under which the Company operates:
1. Unaudited historical geographic information with respect to the years
2000 and 1999, reclassified to reflect the separation of EAME into the
regions of Europe and CAME.
2. Unaudited quarterly historical geographic information with respect to
the year 2000, reclassified to reflect the separation of EAME into the
regions of Europe and CAME.
3. Unaudited proforma quarterly geographic information with respect to
the year 2000, reclassified to reflect the separation of EAME into the
regions of Europe and CAME giving effect to the BBA acquisition as if
it had occurred at January 1, 2000.
4. Unaudited proforma consolidated statement of income for the year 2000.
5. Unaudited quarterly proforma consolidated statements of income for the
year 2000.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
INTERNATIONAL FLAVORS & FRAGRANCES INC.
By: /s/ Stephen A. Block
_________________________________
Name: Stephen A. Block
Title: Senior Vice President, General
Counsel and Secretary
Dated: April 27, 2001
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
99.1 Unaudited historical geographic information with respect to the years
2000 and 1999, reclassified to reflect the separation of EAME into the
regions of Europe and CAME.
99.2 Unaudited quarterly historical geographic information with respect to
the year 2000, reclassified to reflect the separation of EAME into the
regions of Europe and CAME.
99.3 Unaudited proforma quarterly geographic information with respect to
the year 2000, reclassified to reflect the separation of EAME into the
regions of Europe and CAME giving effect to the BBA acquisition as if
it had occurred at January 1, 2000.
99.4 Unaudited proforma consolidated statement of income for the year 2000.
99.5 Unaudited quarterly proforma consolidated statements of income for the
year 2000.
Exhibit 99.1
International Flavors & Fragrances Inc.
Geographical Information
Effective January 1, 2001 the Company was reorganized into five major
geographical regions with a regional manager responsible for each of the
following areas: North America, Europe, Asia-Pacific, Latin America and the
newly constituted Central Asia and the Middle East (CAME) region.
Previously Europe and CAME were managed as one area; North America, Latin
America and Asia-Pacific regions were unaffected by the geographical
reorganization.
The tables below report IFF's historical geographical information for the
years 2000 and 1999 based on the new regional organization:
North Latin Asia-
2000 (Dollars in thousands) America Europe CAME America Pacific Eliminations Consolidated
- ----------------------------------------------------------------------------------------------------------------------------
Sales to unaffiliated customers $470,953 $542,729 $22,143 $220,287 $206,683 $ -- $1,462,795
Transfers between areas 55,610 122,948 4 1,936 13,779 (194,277) -
-------- -------- ------- -------- -------- ---------- ----------
Total sales $526,563 $665,677 $22,147 $222,223 $220,462 $(194,277) $1,462,795
======== ======== ======= ======== ======== ========== ==========
Operating profit $ 48,503 $158,080 $ 4,330 $ 39,063 $ 39,999 $ 1,762 $ 291,737
======== ======== ======= ======== ======== =========
Corporate and other unallocated
expenses (31,919)
Nonrecurring charges (41,273)
Interest expense (25,072)
Amortization of goodwill and other intangibles ( 7,032)
Other income (expense), net ( 2,314)
-------
Income before taxes on income $ 184,127
==========
Segment assets $600,007 $570,435 $51,564 $175,161 $ 228,901 $ (31,737) $1,594,331
======== ======== ======= ======== ========= ==========
Unallocated assets 894,702
-----------
Total assets $2,489,033
- ----------------------------------------------------------------------------------------------------------------------------
Unallocated
-----------
Capital expenditures $30,586 $14,030 $ 794 $ 4,806 $7,500 $ 2,980 $60,696
Depreciation and amortization 26,691 20,626 763 5,154 5,975 10,135 69,344
- -----------------------------------------------------------------------------------------------------------------------------
North Latin Asia-
1999 (Dollars in thousands) America Europe CAME America Pacific Eliminations Consolidated
- ------------------------------------------------------------------------------------------------------------------------
Sales to unaffiliated customers $476,496 $550,342 $24,493 $212,770 $175,398 $ - $1,439,499
Transfers between areas 62,432 124,924 3 756 13,540 (201,655) --
-------- -------- ------- -------- -------- ---------- ----------
Total sales $538,928 $675,266 $24,496 $213,526 $188,938 $(201,655) $1,439,499
======== ======== ======= ======== ======== ========== ==========
Operating profit $ 69,555 $171,831 $ 5,812 $ 41,288 $31,503 $ 1,439 $ 321,428
======== ======== ======= ======== ======== ========= ==========
Corporate and other unallocated
expenses (40,152)
Nonrecurring charges (32,948)
Interest expense (5,154)
Other income (expense), net 291
----------
Income before taxes on income $ 243,465
===========
Segment assets $519,054 $463,675 $23,586 $194,140 $176,222 $ (61,314) $1,315,363
======== ======== ======= ======== ======== ==========
Unallocated assets 86,132
----------
Total assets $1,401,495
===========
- --------------------------------------------------------------------------------------------------------------------------
Unallocated
-----------
Capital expenditures $57,306 $19,607 $1,620 $14,585 $7,595 $ 3,122 $103,835
Depreciation and amortization 16,811 24,890 384 6,322 5,353 2,609 56,369
- ---------------------------------------------------------------------------------------------------------------------------
Exhibit 99.2
International Flavors & Fragrances Inc.
2000 Quarterly Information
(Dollars in thousands)
The following tables report IFF's quarterly geographical information based
on the new regional organizational structure:
North Latin Asia-
1st Quarter 2000 America Europe CAME America Pacific Elimination Consolidated
- ---------------------------------------------------------------------------------------------------------------------
Sales to unaffiliated customers $114,747 $144,157 $5,910 $55,244 $49,854 $ - $369,912
Transfers between areas 12,377 34,418 2 312 2,981 (50,090) -
-------- -------- ------ ------- ------- --------- ---------
Total sales $127,124 $178,575 $5,912 $55,556 $52,835 $(50,090) $369,912
======== ======== ====== ======= ======= ========= ========
Operating profit $16,627 $47,565 $1,335 $10,595 $10,432 $ (1,264) $ 85,290
======= ======= ====== ======= ======= ========
Corporate and other unallocated expenses (8,616)
Nonrecurring charges (9,354)
Interest Expense (2,137)
Other income (expense), net 329
--------
Income before taxes on income $65,512
========
North Latin Asia-
2nd Quarter 2000 America Europe CAME America Pacific Elimination Consolidated
- ------------------------------------------------------------------------------------------------------------------
Sales to Unaffiliated customers $121,199 $131,968 $5,181 $57,770 $52,641 $ - $368,759
Transfers between areas 15,239 28,182 2 456 3,212 (47,091) -
-------- -------- ------ ---- --- -- ----- --------- --------
Total sales $136,438 $160,150 $5,183 $58,226 $55,853 $(47,091) $368,759
======== ======== ====== ======= ======= ========= ========
Operating profit $ 17,755 $ 42,745 $957 $12,471 $11,890 $1,587 $ 87,405
======== ======== ==== ======= ======= ======
Corporate and other unallocated expenses (10,907)
Nonrecurring charges -
Interest Expense (3,074)
Other income (expense), net (203)
---------
Income before taxes on income $ 73,221
========
North Latin Asia-
3rd Quarter 2000 America Europe CAME America Pacific Elimination Consolidated
- --------------------------------------------------------------------------------------------------------------------
Sales to Unaffiliated customers $112,994 $125,051 $5,762 $47,533 $48,251 $ - $339,591
Transfers between areas 12,904 29,047 - 555 4,153 (46,659) -
-------- -------- ------ -------- ------- --------- --------
Total sales $125,898 $154,098 $5,762 $48,088 $52,404 $(46,659) $339,591
======== ======== ====== ======= ======= ========= ========
Operating profit $11,890 $38,389 $1,033 $ 7,351 $9,039 $ 214 $ 67,916
======= ======= ====== ======= ====== =====
Corporate and other unallocated expenses (10,671)
Nonrecurring charges ( 7,685)
Interest Expense (4,195)
Other income (expense), net (2,614)
--------
Income before taxes on income $42,751
========
North Latin Asia-
4th Quarter 2000 America Europe CAME America Pacific Elimination Consolidated
- -------------------------------------------------------------------------------------------------------------------
Sales to unaffiliated customers $122,013 $141,553 $5,290 $59,740 $55,937 $ - $384,533
Transfers between areas 15,090 31,301 - 613 3,433 (50,437) -
-------- -------- ------ ------- -------- --------- ---------
Total sales $137,103 $172,854 $5,290 $60,353 $59,370 $(50,437) $384,533
======== ======== ====== ======= ======= ========= =========
Operating profit $ 2,231 $ 29,381 $1,005 $ 8,646 $ 8,638 $ 1,225 $ 51,126
Corporate and other unallocated expenses (1,725)
Nonrecurring charges (24,234)
Interest Expense (15,666)
Amortization of goodwill and other intangibles (7,032)
Other income (expense), net 174
--------
Income before taxes on income $2,643
========
Exhibit 99.3
International Flavors & Fragrances Inc.
2000 Pro Forma Information
(Dollars in thousands)
The following pro forma geographical information gives effect to the BBA
acquisition as if it had occurred as of the beginning of each of the
periods presented:
North Latin Asia-
1st Quarter 2000 (Pro forma) America Europe CAME America Pacific Eliminations Consolidated
- ---------------------------------------------------------------------------------------------------------------------
Sales to Unaffiliated customers $154,858 $179,637 $21,445 $60,346 $69,532 $ - $485,818
Transfers between areas 18,884 41,552 296 312 2,992 (64,036) -
-------- -------- ------- ------- -------- -------- --------
Total sales $173,742 $221,189 $21,741 $60,658 $72,524 $(64,036) $485,818
======== ======== ======= ======= ======= ========= ========
Operating profit $ 22,983 $ 50,737 $ 4,112 $10.719 $ 13,159 $ (1,203) $100,507
======== ======== ======= ======= ======== ======== ========
Corporate and other unallocated expenses (12,871)
Nonrecurring charges (9,354)
Interest Expense (18,923)
Amortization of goodwill and other intangibles (10,548)
Other income (expense), net (324)
--------
Income before taxes on income $48,487
=======
North Latin Asia-
2nd Quarter 2000 (Pro forma) America Europe CAME America Pacific Eliminations Consolidated
- --------------------------------------------------------------------------------------------------------------------
Sales to Unaffiliated customers $164,123 $166,981 $21,279 $63,343 $75,163 $ - $490,889
Transfers between areas 21,850 35,222 237 456 3,225 (60,990) -
-------- -------- ------- ------- ------- -------- --------
Total sales $185,973 $202,203 $21,516 $63,799 $78,388 $(60,990) $490,889
======== ======== ======= ======= ======= ========= ========
Operating profit $ 25,688 $44,443 $ 4,368 $12,755 $15,751 $1,648 $104,653
======== ======= ======= ======= ======= ====== ========
Corporate and other unallocated expenses (15,433)
Nonrecurring charges -
Interest Expense
(19,789)
Amortization of goodwill and other intangibles (10,548)
Other income (expense), net (817)
---------
Income before taxes on income $ 58,066
=========
North Latin Asia-
3rd Quarter 2000 (Pro forma) America Europe CAME America Pacific Eliminations Consolidated
- --------------------------------------------------------------------------------------------------------------------
Sales to Unaffiliated customers $156,048 $159,898 $21,248 $53,392 $69,218 $ - $459,804
Transfers between areas 19,085 36,049 233 555 4,164 (60,086) -
-------- -------- ------- ------- ------- ---------- --------
Total sales $175,133 $195,947 $21,481 $53,947 $73,382 $(60,086) $459,804
======== ======== ======= ======= ======= ========= ========
Operating profit $ 19,327 $41,041 $ 4,274 $7,809 $ 12,470 $ 275 $ 85,196
======== ======= ======= ====== ======== =====
Corporate and other unallocated expenses (13,548)
Nonrecurring charges (7,685)
Interest Expense (20,878)
Amortization of goodwill and other intangibles (10,548)
Other income (expense), net (1,234)
--------
Income before taxes on income $31,303
=======
North Latin Asia-
4th Quarter 2000 (Pro forma) America Europe CAME America Pacific Eliminations Consolidated
- -----------------------------------------------------------------------------------------------------------------------
Sales to Unaffiliated customers $144,541 $150,774 $20,334 $62,483 $65,969 $ - $444,101
Transfers between areas 18,722 34,818 200 613 3,445 (57,798) -
-------- -------- ---- --- ------- -------- -------- --------
Total sales $163,263 $185,592 $20,534 $63,096 $69,414 (57,798) $444,101
======== ======== ======= ======= ======= ======== ========
Operating profit $ 6,425 $ 29,514 $4,019 $8,783 $ 10,620 $ 1,286 $ 60,647
======= ======== ====== ====== ======== =======
Corporate and other unallocated expenses (2,685)
Nonrecurring charges (24,234)
Interest Expense (21,568)
Amortization of goodwill and other intangibles (10,551)
Other income (expense), net 292
---------
Income before taxes on income $1,901
======
North Latin Asia-
Year 2000 (Pro forma) America Europe CAME America Pacific Elimination Consolidated
- --------------------------------------------------------------------------------------------------------------------
Sales to Unaffiliated customers $619,570 $657,290 $84,306 $239,564 $279,882 $ - $1,880,612
Transfers between areas 78,541 147,641 966 1,936 13,826 (242,910) -
-------- -------- -------- -------- -------- --------- ----------
Total sales $698,111 $804,931 $85,272 $241,500 $293,708 (242,910) $1,880,612
======== ======== ======= ======== ======== ========= ==========
Operating profit $ 74,423 $165,735 $ 16,773 $ 40,066 $ 52,000 $2,006 $ 351,003
======== ======== ======== ======== ======== ====== ==========
Corporate and other unallocated expenses (44,537)
Nonrecurring charges (41,273)
Interest Expense (81,158)
Amortization of goodwill and other intangibles (42,195)
Other income (expense), net (2,083)
----------
Income before taxes on income $ 139,757
=========
Exhibit 99.4
Unaudited Pro Forma Consolidated Statements of Income
2000
(Dollars in thousands)
Pro Pro
Historical Forma Forma
1st Quarter Ended 3/31/00 IFF (1) BBA (2) Adjustments Combined
- ------------------------- -------------- ------------- ------------- -----------
Net sales $ 369,912 $117,341 $ (1,435)(3) $ 485,818
-------------- ------------- -------------- -------------
Cost of goods sold (8) 204,677 74,905 (1,496)(4) 278,086
Research and development expenses 26,812 7,105 33,917
Selling and administrative expenses (8) 61,749 24,430 86,179
Nonrecurring charges 9,354 - 9,354
Interest expense 2,137 536 16,250 (5) 18,923
Amortization - - 10,548 (6) 10,548
Other (income) expense, net (329) 653 324
-------------- ------------- -------------- -------------
304,400 107,629 25,302 437,331
-------------- ------------- -------------- -------------
Income before taxes on income 65,512 9,712 (26,737) 48,487
Taxes on income 21,736 3,691 (6,664)(7) 18,763
-------------- ------------- -------------- -------------
Net income $ 43,776 $ 6,021 $ (20,073) $ 29,724
============== ============= ============== =============
Pro Pro
Historical Forma Forma
2nd Quarter Ended 6/30/00 IFF (1) BBA (2) Adjustments Combined
- ------------------------- -------------- ------------- --------------- ---------------
Net sales $ 368,759 $123,565 $ (1,435)(3) $ 490,889
-------------- ------------- -------------- -------------
Cost of goods sold (8) 203,562 79,583 (1,496)(4) 281,649
Research and development expenses 26,945 6,886 33,831
Selling and administrative expenses (8) 61,754 24,435 86,189
Nonrecurring charges - - -
Interest expense 3,074 465 16,250 (5) 19,789
Amortization - - 10,548 (6) 10,548
Other (income) expense, net 203 614 817
-------------- ------------- -------------- -------------
295,538 111,983 25,302 432,823
-------------- ------------- -------------- -------------
Income before taxes on income 73,221 11,582 (26,737) 58,066
Taxes on income 24,305 4,401 (6,664)(7) 22,042
-------------- ------------- -------------- -------------
Net income $ 48,916 $ 7,181 $ (20,073) $ 36,024
============== ============= ============== =============
Unaudited Pro Forma Consolidated Statements of Income
2000
(Dollars in thousands)
Pro Pro
Historical Forma Forma
3rd Quarter Ended 9/30/00 IFF (1) BBA (2) Adjustments Combined
- ------------------------- -------------- ------------- ----------------- --------------
Net sales $ 339,591 $121,648 $ (1,435)(3) $ 459,804
-------------- ------------- -------------- -------------
Cost of goods sold (8) 191,499 78,018 (1,496)(4) 268,021
Research and development expenses 28,666 6,769 35,435
Selling and administrative expenses (8) 62,181 22,519 84,700
Nonrecurring charges 7,685 - 7,685
Interest expense 4,195 433 16,250 (5) 20,878
Amortization - - 10,548 (6) 10,548
Other (income) expense, net 2,614 (1,380) 1,234
-------------- ------------- -------------- -------------
296,840 106,359 25,302 428,501
-------------- ------------- -------------- -------------
Income before taxes on income 42,751 15,289 (26,737) 31,303
Taxes on income 13,824 5,088 (6,664)(7) 12,248
-------------- ------------- -------------- -------------
Net income $ 28,927 $ 10,201 $ (20,073) $ 19,055
============== ============= ============== =============
Pro Pro
Historical Forma Forma
4th Quarter Ended 12/31/00 IFF (1) BBA (2) Adjustments Combined
- -------------------------- -------------- ------------- ---------------- ---------------
Net sales $ 384,533 $ 60,212 $ (644)(3) $ 444,101
-------------- ------------- -------------- -------------
Cost of goods sold 231,915 39,178 (849)(4) 270,244
Research and development expenses 30,248 3,073 - 33,321
Selling and administrative expenses 72,969 9,605 - 82,574
Nonrecurring charges 24,234 - - 24,234
Interest expense 15,666 252 5,650 (5) 21,568
Amortization 7,032 - 3,519 (6) 10,551
Other (income) expense, net (174) (118) - (292)
-------------- ------------- -------------- -------------
381,890 51,990 8,320 442,200
-------------- ------------- -------------- -------------
Income before taxes on income 2,643 8,222 (8,964) 1,901
Taxes on income 1,257 3,255 (1,206)(7) 3,306
-------------- ------------- -------------- -------------
Net income $ 1,386 $ 4,967 $ (7,758) $ (1,405)
============== ============= ============== =============
Exhibit 99.5
Unaudited Pro Forma Consolidated Statements of Income
2000
(Dollars in thousands)
Pro Pro
Historical Forma Forma
Year Ended 12/31/00 IFF (1) BBA (2) Adjustments Combined
- ------------------- -------------- ------------- ---------------- ---------------
Net sales $1,462,795 $422,766 $ (4,949)(3) $1,880,612
-------------- ------------- -------------- -------------
Cost of goods sold 831,653 271,684 (5,337)(4) 1,098,000
Research and development expenses 112,671 23,833 136,504
Selling and administrative expenses 258,653 80,989 339,642
Nonrecurring charges 41,273 - 41,273
Interest expense 25,072 1,686 54,400 (5) 81,158
Amortization 7,032 - 35,163 (6) 42,195
Other (income) expense, net 2,314 (231) 2,083
-------------- ------------- -------------- -------------
1,278,668 377,961 84,226 1,740,855
-------------- ------------- -------------- -------------
Income before taxes on income 184,127 44,805 (89,175) 139,757
Taxes on income 61,122 16,435 (21,198)(7) 56,359
-------------- ------------- -------------- -------------
Net income $ 123,005 $ 28,370 $ (67,977) $ 83,398
============== ============= ============== =============
Notes to Unaudited Pro Forma Consolidated Statements of Income:
(1) IFF acquired Bush Boake Allen ("BBA"), effective November 3, 2000,
and the BBA operating results are included in IFF's consolidated
results from that date.
(2) BBA results from the beginning of the year to November 3, 2000, the
date of acquisition, are included in the respective periods.
(3) To eliminate intercompany sales between IFF and BBA for the period
from the beginning of the year to November 3, 2000, the date of
acquisition. For purposes of computing the individual quarter
eliminations, the full year amount was allocated on a pro rata
basis. Post-acquisition, intercompany sales are eliminated in
arriving at the IFF historical results.
(4) To eliminate cost of goods sold relating to intercompany sales and
account for related estimated profit that remains in inventory. For
purposes of computing the individual quarter eliminations, the full
year amount was allocated on a pro rata basis.
(5) To reflect the recognition of incremental interest expense on
additional borrowings of approximately $970.0 million, equal to the
cash consideration exchanged in the acquisition. Interest expense
was calculated using an average interest rate of 6.7%. The interest
rate reflects IFF's average borrowing rate during the year.
(6) To reflect the amortization of goodwill and other intangibles
resulting from the preliminary allocation of the excess of
consideration over the net assets of BBA. Other intangible assets
include patents, trademarks and other intellectual property owned or
developed by BBA, the value of which is being amortized over periods
ranging from 10 to 20 years. Under current accounting rules, IFF
would expect the amount of excess consideration allocated to
goodwill to be amortized over 20 years. In December 2000, the
Financial Accounting Standards Board (FASB) reached a tentative
decision to use the nonamortization approach to account for
purchased goodwill. Under the revised proposal, goodwill would not
be amortized annually, but instead would be reviewed for impairment
and written down (expensed against earnings) when the carrying value
of the goodwill exceeds its fair value. The final standard has not
been issued and the proposed approach may change.
(7) To reflect the tax effect, as appropriate, of the pro forma adjustments.
(8) Reflects the reclassification of shipping and handling costs from
Selling expense to Cost of goods sold in accordance with guidance
established by Emerging Issues Task Force No. 00-10, "Accounting for
Shipping and Handling Fees and Costs." This change in classification
was made by IFF in the 4th quarter 2000 and does not affect the
reported BBA historical amounts.