Summary of 2009 Results
Net sales decreased 3% to $79.0 billion.
– Organic sales, which exclude the impacts of acquisitions, divestitures and foreign exchange, increased 2%, which is below our organic sales growth target range.
Net earnings increased 11% to $13.4 billion.
– Net earnings from continuing operations decreased 4% to $11.3 billion primarily due to lower net sales and a higher effective tax rate.
– Operating margins were consistent with the prior year, as a commodity-driven reduction in gross margins was offset by reduced selling, general and administrative expenses (SG&A).
– Net earnings from discontinued operations increased $1.9 billion to $2.1 billion due to the impact of the Folgers coffee divestiture.
Diluted net earnings per share increased 17% to $4.26.
– Earnings per share included $0.68 from discontinued operations.
– Earnings per share from continuing operations increased 1% to $3.58.
– Earnings per share grew ahead of net earnings due to the impact of share repurchases and the shares tendered in the Folgers coffee transaction.
Cash flow from operating activities was $14.9 billion.
– Free cash flow, which is operating cash flow less capital spending, was $11.7 billion.
– Free cash flow productivity, which is the ratio of free cash flow to net earnings, was 87% and included a negative 15% impact resulting from the non-cash gain on the Folgers coffee transaction.