Earning Persistence Recasting and Adjusting--Illustration ■■■■■■■■■■■国■■■■■圆昌■■■■■■ ■国■■■■■■■■■国■口■■■■■■■■■■■■■■ oup compan Recast Income Statements(s mil. Year 11 Year 10 Year Year8 Year 7 Year 6 Gain on sale of businesses in Yr 8)and sub. in Yr 7 3.1 9.7 Loss on sale of exercise equipment subsidiary, net of tax 153A Cumma tvet e ec of latiuntinc chance tot ingcoaen exe 401. 5 4.45 131S 2473$223.2 8 Net i rted s401.5544$13.1$ 247.35223.2 法、[ of products sold $4,0955$4,2582$4,001.6$3,3928$3,180.5$3,0828 aintenance expenses 33981381528813583 liquidation gain(b) s3727.153,893.5$3,651.8$3,07 2 $2,8978$2,821.4 145 Note 2) Marketing and selling expenses Less: Advertising ■21(Note 262514.7$324$(32)$(9.5)$5.5 102 Less lated incentive (8 (16.8) 164) (8.9 Less of businesse s(Yr 8)and sub (Yr 7)= Other. net s (0 Note 4)Tax effect of divest, restruc , unusual charg s11530$116.60$13.9 136 Nondeductible divestitures, restructuring, and unusual charges s%3号一一 Statutory federal tax rate is 34% in Year 8 through Year 11, 45% in Year 7, and 46% in Year 6 atThis amount is not disclosed for Year 6 a ae assume most depreciation is included in cost of products sold 3 b /LIFO liquidation gain before tax. For example, for Year 8 this is $2.58 million, computed as $1.7/(1 0.34) ():339.122 0.34=5115.3. (d$343022 0.34=5116.6 0.565136=$101.4. 的s106.526 0.487136=$519Recasting and Adjusting -- Illustration Earning Persistence Campbell Soup Company Recast Income Statements ($ mil.) Item Year 11 Year 10 Year 9 Year 8 Year 7 Year 6 Gain on sale of businesses in (Yr 8) and sub. in Yr 7 — — — 3.1 9.7 — Loss on sale of exercise equipment subsidiary, net of tax — — — — (1.7) — LIFO liquidation gain (see Note 1 below) — — — 1.7 2.8 1.4 Income before cumulative effect of accounting change$ 401.5 $ 4.4 $ 13.1 $ 241.6 $ 247.3 $ 223.2 153A Cumulative effect of accounting change for income taxes — — — 32.5 — — 28 Net income as reported $ 401.5 $ 4.4 $ 13.1 $ 274.1 $ 247.3 $ 223.2 14 (Note 1) Cost of products sold $ 4,095.5 $ 4,258.2 $ 4,001.6 $ 3,392.8 $ 3,180.5 $ 3,082.8 144 Less: Repair and maintenance expenses (173.9) (180.6) (173.9) (155.6) (148.8) (144.0) 162A Less: Depreciation(a) (194.5) (184.1) (175.9) (162.0) (139.0) (120.0) 153A Plus: LIFO liquidation gain(b) — — — 2.6 5.1 2.6 $ 3,727.1 $ 3,893.5 $ 3,651.8 $ 3,077.8 $ 2,897.8 $ 2,821.4 15 (Note 2) Marketing and selling expenses $ 956.2 $ 980.5 $ 818.8 $ 733.3 $ 626.2 $ 544.4 145 Less: Advertising (195.4) (20.4) (212.9) (219.1) (203.5) (181.4) $ 760.8 $ 960.1 $ 605.9 $ 514.2 $ 422.7 $ 363.0 21 (Note 3) Other expenses (income) $ 26.2 $ 14.7 $ 32.4 $ (3.2) $ (9.5) $ 5.5 102 Less: Stock price–related incentive programs (15.4) 0.1 (17.4) 2.7 — (8.5) 103 Less: Amortization of intangible and other assets (14.1) (16.8) (16.4) (8.9) (5.6) (6.0) Less: Gain on sale of businesses (Yr 8) and sub. (Yr 7) — — — 4.7 14.7 — 104 Other, net $ (3.3) $ (2.0) $ (1.4) $ (4.7) $ (0.4) $ (9.0) (Note 4) Tax effect of divest, restruc., & unusual charges — $ 115.3(c) $ 116.6(d)$ 13.9 — — 136 Nondeductible divestitures, restructuring, and unusual charges — (101.4)(e) (51.9)(f) — — — — $ 13.9 $ 64.7 $ 13.9 — — *Statutory federal tax rate is 34% in Year 8 through Year 11, 45% in Year 7, and 46% in Year 6. †This amount is not disclosed for Year 6. (a)We assume most depreciation is included in cost of products sold. (b)LIFO liquidation gain before tax. For example, for Year 8 this is $2.58 million, computed as $1.7/(1 0.34). (c)$339.1 22 0.34 = $115.3. (d)$343.0 22 0.34 = $116.6 (e)$179.4 26 0.565 136 = $101.4. (f)$106.5 26 0.487 136 = $51.9