Notes to Consolidated Financial Statements
Accounting policies for measuring segment operating income and assets are substantially consistent with those described in note 1 of the financial statements, “Summary of Significant Accounting Policies.” Because of manufacturing integration for certain products within the segments, products are not sold from one segment to another but rather inventory is transferred at cost. Intersegment sales are not material. Corporate assets include cash, deferred taxes, certain investments and fixed assets.
In 2006, we changed the way we internally manage and report our business segment results. The management reporting of sales and income related to warehouse club customers was moved to the consumer business from the industrial business. Also, to better represent the profitability of our two segments, we began to allocate 100% of our SG&A to our business segments. In line with these changes, prior year segment results have been restated to be comparable with the current presentation.
| (millions) | Consumer | Industrial | Total Food |
Corporate & Other |
Total | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2006 Net sales |
$ | 1,556.4 | $ | 1,160.0 | $ | 2,716.4 | – | $ | 2,716.4 | ||||||
| Operating income excluding restructuring charges | 278.0 | 75.7 | 353.7 | – | 353.7 | ||||||||||
| Income from unconsolidated operations | 15.9 | 4.0 | 19.9 | – | 19.9 | ||||||||||
| Goodwill, net | 754.7 | 49.1 | 803.8 | – | 803.8 | ||||||||||
| Assets | – | – | 2,372.0 | $ | 196.0 | 2,568.0 | |||||||||
| Capital expenditures | – | – | 77.7 | 7.1 | 84.8 | ||||||||||
| Depreciation and amortization | – | – | 73.3 | 13.5 | 86.8 | ||||||||||
| 2005 Net sales |
$ | 1,478.3 | $ | 1,113.7 | $ | 2,592.0 | – | $ | 2,592.0 | ||||||
| Operating income excluding restructuring charges | 288.0 | 66.7 | 354.7 | – | 354.7 | ||||||||||
| Income from unconsolidated operations | 17.5 | 3.1 | 20.6 | – | 20.6 | ||||||||||
| Goodwill, net | 619.5 | 44.4 | 663.9 | – | 663.9 | ||||||||||
| Assets | – | – | 2,122.7 | $ | 150.0 | 2,272.7 | |||||||||
| Capital expenditures | – | – | 63.9 | 2.9 | 66.8 | ||||||||||
| Depreciation and amortization | – | – | 63.6 | 11.0 | 74.6 | ||||||||||
| 2004 Net sales |
$ | 1,421.0 | $ | 1,105.2 | $ | 2,526.2 | – | $ | 2,526.2 | ||||||
| Operating income excluding restructuring charges | 256.4 | 73.8 | 330.2 | – | 330.2 | ||||||||||
| Income from unconsolidated operations | 12.3 | 2.3 | 14.6 | – | 14.6 | ||||||||||
| Goodwill, net | 664.9 | 48.0 | 712.9 | – | 712.9 | ||||||||||
| Assets | – | – | 2,179.1 | $ | 190.5 | 2,369.6 | |||||||||
| Capital expenditures | – | – | 58.5 | 4.2 | 62.7 | ||||||||||
| Depreciation and amortization | – | – | 61.1 | 10.9 | 72.0 | ||||||||||
A reconciliation of operating income excluding restructuring charges (which we use to measure segment profitability) to operating income is as follows:
| (millions) | Total | ||
|---|---|---|---|
| 2006 Operating income, excluding restructuring charges |
$ | 353.7 | |
| Less: Restructuring charges | 84.1 | ||
| Operating income | $ | 269.6 | |
| 2005 Operating income, excluding restructuring charges |
$ | 354.7 | |
| Less: Restructuring charges | 11.2 | ||
| Operating income | $ | 343.5 | |
| 2004 Operating income, excluding restructuring charges |
$ | 330.2 | |
| Less: Restructuring charges (credits) | (2.5 | ) | |
| Operating income | $ | 332.7 | |
Geographic Areas
We have net sales and long-lived assets in the following geographic areas:
| (millions) | United States |
Europe | Other countries |
Total | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2006 Net sales |
$ | 1,678.7 | $ | 643.6 | $ | 394.1 | $ | 2,716.4 | ||||
| Long-lived assets | 700.5 | 669.8 | 96.6 | 1,466.9 | ||||||||
| 2005 Net sales |
$ | 1,581.4 | $ | 638.1 | $ | 372.5 | $ | 2,592.0 | ||||
| Long-lived assets | 546.7 | 635.4 | 90.9 | 1,273.0 | ||||||||
| 2004 Net sales |
$ | 1,558.9 | $ | 610.5 | $ | 356.8 | $ | 2,526.2 | ||||
| Long-lived assets | 503.9 | 696.7 | 92.6 | 1,293.2 | ||||||||
Long-lived assets include property, plant and equipment, goodwill and intangible assets, net of accumulated depreciation and amortization.