Running head: STRATEGIC AND FINANCIAL ANALYSIS
Strategic and Financial Analysis of Leggett & Platt, Incorporated
Steven A. Byars
Dr. Veronica Brown-Corbin
BUS 599 Strategic Management
December 9, 2011
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STRATEGIC AND FINANCIAL ANALYSIS
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Abstract
An analysis of the financial performance of Leggett & Platt (L&P), Inc. and an assessment to
determine whether the company’s goals and strategies contributed to or detracted from the
company’s current financial situation was explored. In addition, a look at the company’s strategy,
rewards program, and any possible mergers or acquisitions that may improve the company were
examined to determine how well L&P manages its business and its people.
STRATEGIC AND FINANCIAL ANALYSIS
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Strategic and Financial Analysis of Leggett & Platt, Incorporated
L&P is a publicly traded company with its headquarters located in Carthage, MO. In
business for over 100 years, L&P started off as a partnership between J.P. Leggett and C.B. Platt
in 1883 after Leggett developed and patented the coiled bedspring. Pleased with the initial
success of the coiled bedspring, Leggett and Platt decided to incorporate and established the
Leggett & Platt Spring Bed & Manufacturing Company in 1901 (“Leggett & Platt company
history,” n.d.). For almost the next 60 years, L&P remained a small company that produced
coiled bedsprings and inner spring mattresses. In 1960, under new leadership, the company
began to diversify and expand its business into other areas. Between 1960 and the present, L&P
grew rapidly through a series of acquisitions and new business ventures that proved quite
lucrative for the company. Current operations include four segments, the residential furnishings
segment, the commercial fixtures and components segment, the industrial materials segment, and
the specialized products segment. Each segment produces a large variety of items ranging from
bedding components, point of purchase displays, automotive seat support and lumbar systems,
office furniture components, and drawn steel wire (“Leggett & Platt company history,” n.d.). The
company has been publicly traded since 1967 (“Leggett & Platt company history,” n.d.).
Financial Analysis
Ratio Trend Analysis
In order to fully understand the financial health of a company, a thorough analysis of the
company’s balance sheet and income statement must be undertaken. There are several ratios that
can be calculated from the company’s financial statements that will give a better understanding
of where the company is at, where it has been, and where it is going. The trend analysis looks at
several key ratios over a set period of years to determine the overall health and performance of
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the company (“Ratio calculations and trend analysis,” n.d.). In order to show trends, real
numbers and projected numbers must be used. FY2008 through FY2010 are actual numbers and
FY2011 through FY2013 are projections. The projections were calculated using QM for
Windows regression analysis tool.
The current ratio and the quick ratio measure a company’s liquidity; the gross profit
margin, net profit margin, return on total assets, and return on equity measure a company’s
profitability; the debt ratio and debt-to-equity ratio measure a company’s leverage; the EBIT and
Net Income measure the financial health of a company; and the earnings per share ratio measures
how much each share of stock in the company earned for the shareholders (“Ratio calculations
and trend analysis,” n.d.).
The following financial figures are taken from the balance sheet and income statement
for Leggett & Platt, Inc. These financial statements can be found in Appendix 1 and Appendix 2
at the end of this report. Only the figures necessary have been extracted for this analysis.
Liquidity
The liquidity of a firm can be analyzed to determine whether the company has sufficient
working capital to meet short-term needs; the higher the current or quick ratio, the lower the risk
of the company having a cash flow problem in the near future; ratios higher than 1.0 are
desirable. (Berk & DeMarzo, 2011).
The current ratio measures whether a company has the ability to pay back current
liabilities with its current assets. The current ratio is calculated by dividing current assets by
current liabilities (“Liquidity ratios explained,” n.d.).
The quick ratio measures the company’s ability to pay off short-term debts without
relying on selling inventory. This ratio is similar to the current ratio, except that the inventory is
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removed from the calculation before the division (“Liquidity ratios explained,” n.d.). The current
ratio and quick ratio are presented below:
Period Ending
Current Ratio
Quick Ratio
FY2013
2.04
1.42
FY2012
2.11
1.43
FY2011
2.20
1.46
FY2010
2.33
1.5
FY2009
2.26
1.53
FY2008
2.50
1.55
The current ratio for L&P fell in 2009 but made a small recovery in 2010. This ratio is
projected to decrease through 2013. The chart shows that, although the company is losing some
strength, it is still maintaining a good current ratio in 2013 of 2.04, which means that for every
$1.00 that the company owes in current liabilities, it has $2.04 worth of current assets, so L&P
should have no problem paying off all short-term debts if they became due (“Liquidity ratios
explained,” n.d.).
The quick ratio fell steadily between 2008 and 2010 and is projected to continue to fall
through 2013. Although not of immediate concern, this trend should be monitored. This ratio
shows that, for every $1.00 owed in short term debt by L&P, the company has $1.46 in current
assets (excluding inventory) (“Liquidity ratios explained,” n.d.).
Profitability
Profitability ratios show how profitable a firm actually is. These ratios should be fairly
high and should show an upward trend across time; the higher the margins, the more stable the
company is thought to be (“Profitability ratios explained,” n.d.). Falling ratios are a cause for
concern since they indicate that the company may be experiencing financial problems.
The gross profit margin measures how well a company is controlling production costs
and setting product pricing. This is calculated by subtracting the cost of goods sold from sales
and then dividing by sales (“Profitability ratios explained,” n.d.).
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The net profit margin is the ratio of net income to revenue in the company (Berk &
DeMarzo, 2011). The net profit margin is calculated by dividing net income after taxes by sales.
The return on total assets ratio gives an indication of how a company is using its assets to
generate profit (“Profitability ratios explained,” n.d.). This ratio is calculated by dividing net
income after taxes by total assets.
The return on equity is a measure of how much return a firm has received on past
investments (Berk & DeMarzo, 2011). This ratio is calculated by dividing net income after taxes
by total equity.
The gross profit margin, net profit margin, return on total assets, and return on equity
ratios are presented below:
Period Ending
Gross Profit Margin
Net Profit Margin
Return on Total Assets
Return on Equity
FY2013
.33
.12
.14
.19
FY2012
.29
.09
.10
.16
FY2011
.25
.07
.08
.13
FY2010
.23
.05
.06
.12
FY2009
.24
.04
.04
.07
FY2008
.20
.04
.04
.07
The gross profit margin of L&P fluctuates between 2008 and 2010, but is generally
getting stronger. Projected gross profit margin is getting much stronger up through 2013. A
check of current gross profit margin for 2010 shows that for every $1.00 generated by the
company, $.77 pays for the products and $.23 is left for operating expenses, income taxes, etc.
(“Profitability ratios explained,” n.d.).
Net profit margin also shows a steady increase through 2013. A look at the current net
profit margin shows that for every $1.00 in sales, the company keeps $.05 that can be invested
back into the company or distributed to stockholders. The rest goes toward buying product,
paying operating expenses, and paying taxes (“Profitability ratios explained,” n.d.).
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L&P showed a slow gain from 2008 to 2010 on their return on total assets, but it is
projected to reach .14 by the end of FY2013. The current return on total assets ratio shows that
for every $1.00 invested into assets, the company made $.06 after taxes (“Profitability ratios
explained,” n.d.).
Finally, the return on equity ratio has seen a steady increase from 2008 and is expected to
climb even higher through 2013. The return on equity for 2010 shows that for every $1.00
invested by the stockholders, the company made $.12 in after tax profit (“Profitability ratios
explained,” n.d.). By analyzing these ratios, it is clear that L&P is becoming more profitable and
more stable overall.
Leverage
Leverage ratios help measure how well the company can pay back debt and if they are
earning enough to meet the required interest payments of that debt. This number should be
relatively low and the lower the numbers, the more stable the company is thought to be
(“Leverage ratios explained,” n.d.).
The debt ratio is an indication of how much money a company owes in debt. This ratio is
calculated by dividing the total debt by the total assets (“Leverage ratios explained,” n.d.).
The debt-to-equity ratio is the relationship between the investments provided by creditors
versus the investments provided by the company stockholders. This ratio is calculated by
dividing total debt by total equity (“Leverage ratios explained,” n.d.).
Period Ending
Debt Ratio
Debt-Equity-Ratio
FY2013
.39
.53
FY2012
.35
.55
FY2011
.33
.57
FY2010
.26
.52
FY2009
.26
.51
FY2008
.28
.54
The debt ratio for L&P decreased slightly between 2008 and 2010, but is projected to
increase through 2013. The current debt ratio can be interpreted as, for every $1.00 the company
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owns in assets, it owes $.26; in other words, 26% of the company’s assets are financed
(“Leverage ratios explained,” n.d.).
The debt-equity-ratio for L&P is remaining fairly stable through 2013. This ratio, looking
at 2010 figures, shows that for every $1.00 invested by the company, creditors have invested
$.52 (“Leverage ratios explained,” n.d.). This ratio is very good and shows that the company is
stable and does not carry a lot of debt.
Financial Health
Earnings Before Interest and Taxes (EBIT) and Net Income are commonly used to
determine the overall financial health of a company. Both of these indicators should show steady
increases from year to year (Berk & DeMarzo, 2011).
EBIT and Net Income for L&P are listed below:
Period Ending
FY2013
FY2012
FY2011
FY2010
FY2009
FY2008
Earnings Before
Interest & Taxes
(EBIT)
381.9 M
350 M
318.1 M
293.10 M
237.00 M
236.40 M
Net Income
Available to
Common
244.5 M
217.65 M
190.8 M
176.60 M
111.80 M
122.90 M
EBIT maintained a steady increase between 2008 and 2010 and is projected to increase
further through 2013. Net income, however, faltered between 2008 and 2009, but recovered in
2010 and is projected to continue to increase through 2013. The increasing numbers for both of
these are a good sign that the company is beginning to recover from the recession.
Shareholders
Two measures can be used to determine if the company is valuable from the standpoint of
the shareholders. These measures are the earnings per share (EPS) and the total shareholder
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return. The EPS is the net income divided by the total number of shares outstanding and just how
much the company earned per share during the reporting year (Berk & DeMarzo, 2011). The
EPS for L&P is listed below:
Period Ending
FY2013
FY2012
FY2011
FY2010
FY2009
FY2008
EPS
1.76
1.55
1.34
1.21
0.75
0.79
Earnings per share for L&P dropped slightly between 2008 and 2009, but made a
significant comeback in 2010 due to a strengthening economy. EPS is projected to continue to
increase between 2011 and 2013.
The total shareholder return is the change in stock price plus the dividends received
divided by the beginning stock price (United States Securities and Exchange Commission (US
SEC) Form 10K, 2011). L&P uses this measurement to gauge company performance. The goal
of L&P is to be in the top 1/3rd of the S&P 500 over the long term (US SEC Form 10K, 2011).
As of December 31, 2010, L&P is currently in the top 8% of the S&P 500 with a TSR of 16%
per year on average (US SEC Form 10K, 2011).
L&P’s Mission, Vision, and Strategic Goals
Mission and Vision
The mission of L&P is “Through continuous improvement, we will provide customers with
innovative solutions that support their long term profitable growth. We will provide high quality
products that meet or exceed their expectations. We will eliminate non-value added costs from
our products and processes, while finding new work methods that are simpler, safer, and more
rewarding” (“Company statements & slogans,” 2008). The mission of L&P is to continue to
innovate and streamline their operations in order to save the customer and the company money.
They have a long history of innovation and continue to put out new products and platforms every
STRATEGIC AND FINANCIAL ANALYSIS
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year. As of 2010, L&P holds around 1,098 patents for its various product lines with around 232
patents in process and 897 trademarks with 110 trademarks in process (L&P Annual Report,
2011). L&P’s continued commitment to research and development helps drive continuous
improvement and product quality.
L&P is also committed to streamlining operations in order to increase efficiency and
improve revenue. In 2009, the engineering and technology function was realigned under the
CEO to improve the screening process and improve the development of new products. The
successful integration of this process added to the earnings growth in 2010 (L&P Annual Report,
2011). L&P’s innovative solutions, high quality standards, and elimination of waste have all
helped contribute to a steady increase in net income over the past three years. The fact that L&P
managed to improve their earnings during one of the worst recessions in U.S. history is a
testament to its leadership and its way of doing business.
Strategic Goals
In 2007, L&P developed a new strategy in order to help grow the company. Prior to this
time, L&P had concentrated on unilateral growth but decided that a strategy based on optimizing
total shareholder return would result in better returns (“Wall Street transcript,” 2009). The
strategic goals involved divesting underperforming business units, improving the margin and
returns of business units, and gaining and maintaining a consistent growth of 4-5% per year
(L&P Annual Report, 2011).
By 2010, L&P had completed 7 divestitures that were identified and ended up making
more after tax revenue then they had initially forecasted (L&P Annual Report, 2011). L&P had
traditionally relied on its diversity to help carry it through the lean times, but it became apparent
in 2008 that there were some business units that were going to be unable to meet company
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mandated return requirements (“Wall Street transcript,” 2009). The timing of the sale of these
business units worked out in L&P’s favor as they gained an increase in margins between 2009
and 2010 even though product sales decreased (“Wall Street transcript,” 2009). Because L&P
was able to get rid of underperforming business units and set performance goals and lean
operation goals for the other business units, they put themselves in a position to earn even higher
revenues once the market starts to pick back up (L&P Annual Report, 2011). The final strategic
incentive, growth, has yet to be achieved due to the concentration on the divestitures and margin
improvements. L&P is now focusing all its energy on meeting the 4-5% per year growth target
that it set for itself in 2008. They are on task to meet this target as initial financials have been
positive and EBIT and Net Income are both trending upward.
L&P is a company that knows how to innovate and how to provide the best possible
return to the stockholders through lean practices and streamlined processes that save the
company money that can be passed on to the customer. Because of the diversity of its products,
many different companies depend on L&P for their core components to produce their products.
Any added value that L&P can extract from its work processes is value that can be passed on to
its customers.
Appropriate Rewards to Motivate Employees
L&P currently relies on monetary rewards to motivate executives and managers. The
performance measure that L&P uses is the Total Shareholder Return (TSR) metric. This metric is
calculated by the change in stock price plus dividends received divided by the beginning stock
price (L&P Annual Report, 2011). The award for top executives is based on the three year
relative TSR performance calculated from January 1 of the first year to December 31 of the third
year. The TSR performance for L&P is then compared to the TSR performance of 320 large and
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mid cap peer companies in three sectors: industrial, consumer discretionary, and materials (L&P
company update, 2011). The payout is based on a sliding scale where, if the TSR of L&P is in
the bottom quartile of the peers, there is no award; if in the second or third quartile the payout
gradually increases; and if in the top quartile, the maximum award is given (L&P company
update, 2011).
Business units (BU) are rewarded differently. BU’s are broken down into portfolio
categories and are given a three year plan to achieve greater than or equal to 10% Total Business
Return (TBR). Each BU is labeled as either grow, core, fix, or divest. BU’s in the grow portfolio
must show profitable growth and a return greater than the weighted average cost of capital
(WACC); BU’s in the core portfolio must maximize cash and show a return greater than or equal
to WACC; and BU’s in the fix category must show rapid improvement by achieving a greater
than or equal to WACC in a limited time. Any BU that fails to reach the 10% TBR goal within
the three years or fails to reach WACC will be divested (L&P company update, 2011). Although
this incentive program may bring results, it seems that it may put people in a position where they
will do whatever it takes to keep from having their BU divested. The incentive here is to do well
or you lose your job. I think the upper executive incentive plan is sound and it would be a good
idea to keep it in place; however the lower level managers and workers do not have the luxury of
doing poorly and just not receiving a bonus. A better plan to ensure productivity and increase
worker loyalty would be to incorporate a production incentive plan for the workers and a
department manager/business unit manger incentive plan for the lower management. This plan
would be similar to the plans currently in use at Nucor Corporation where weekly bonuses are
paid out based on the amount of output per team. If one person on the team fails, then the entire
team fails (Thompson, Strickland, & Gamble, 2010). This plan has the potential of paying out
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huge bonuses but it also means that the huge bonuses come on the heels of huge production runs.
This type of program encourages better teamwork, lower absences, better employee working
relationships, and higher production runs. The BU managers and department managers have
bonuses based on the percentage of net income to dollars of assets employed for their division
(Thompson, et al., 2010). Since L&P shows consistent net income and since increased
production equates to increased sales, they should have no problem covering this expense.
Supporting Ethical Business Behaviors
L&P is a company based on tradition and has a long history dating back to the late 1800’s.
L&P still maintains its headquarters in Carthage, MO where it was originally established by J.P.
Leggett and C.B. Platt. The honesty and integrity that L&P has employed through the years is
justified by its history of high quality earnings, financial transparency, and conservative
accounting practices (“L&P governance,” 2011). The company knows that reputation can have a
huge impact on how well a company does and because of this, L&P strives to maintain a
commitment to ethical conduct by adopting and enforcing ethical codes for business conduct
that apply to all directors, officers, and employees, and additional ethical codes for financial
officers. The ethics codes for businesses include conflicts of interest, confidentiality, fair
dealings, protection and use of company assets, compliance with laws, and reporting compliance
violations (L&P Incorporated Code of Business Conduct and Ethics, 2011). The ethics code for
financial officers includes honesty, integrity, conflict of interest, responsible reporting to all
parties, acting in good faith, promoting ethical behavior among subordinates and peers, and
reporting violations of this ethics code (L&P Financial Code of Ethics, 2011).
Since L&P’s strategy is based on financial improvement and optimizing TSR. This type
of strategy is difficult to deceive since it is based on the market fluctuation and hard financial
STRATEGIC AND FINANCIAL ANALYSIS
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numbers. Business units that fail to increase revenue or WACC up to the established standard
will be divested. L&P’s philosophy is that if you are not adding value to the company, then the
company does not need to keep that line of business. That is not to say that L&P just dissolves
the business, instead they try to sell the business to another party that may be able to utilize the
business and make it profitable (“Wall Street transcript,” 2009). L&P does have an advantage
when it comes to many of its products since they are proprietary and that helps ensure that the
customers continue to buy from L&P. To this end, a steady stream of revenue can be almost
guaranteed as long as market conditions stay fairly strong. As for ethics, there is no easy way for
L&P to manipulate the market or the TSR numbers of the peer companies so the only option is to
devise methods and procedures to match and beat the peer numbers. L&P’s long history of
financial stability and their large number of long term customers shows that the company is
operating ethically and is reporting financial information truthfully and accurately.
Competitive and Marketing Analysis
L&P has many strengths that help set it apart from other business. First, it maintains a
strong intellectual property base with over 1000 patents and almost 900 trademarks (L&P
Annual Report, 2011). These proprietary products are necessary for the construction of many
manufacturers’ products, from mattresses to car seats to office furniture, and allow L&P to
differentiate its products from the competition and help protect its image and reputation
(Datamonitor, 2010). Second, the company operates in many different areas and has the ability to
survive downturns in one area by relying on other areas. This diversity helps enhance market
share while providing a diverse revenue stream to the company (Datamonitor, 2010). Third, L&P
has always maintained a strong balance sheet and cash flow. L&P has made smart acquisition
decisions in several key areas and is also not averse to letting go of businesses that are
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underperforming. L&P maintains little debt and has maintained a positive net income for several
years. This strong balance sheet helps confirm that L&P has a strong management team that
consistently makes good decisions (Datamonitor, 2010).
There are two opportunities that will help increase L&P’s financial health and help it
reach its goals in the near future; these are the growing global auto components industry and the
many cost reduction initiative and investments made by L&P within the last three years.
Although the housing market is projected to take many years to recover, which in turn affects the
housing furniture market, the global automobile market is projected to recover rather quickly and
grow steadily through 2014. Since many of the components supplied by L&P for the automobile
market are proprietary, they are in a good position when the resurgence of automobile
manufacturing takes place (Datamonitor, 2010). In addition, L&P’s many cost reduction
initiatives, such as its divestiture program, realignment, workforce reductions, and capital
investments to help modernize, maintain, and expand the company’s manufacturing capacity,
will ultimately help the company become more focused and a better value for investors and
customers (Datamonitor, 2010).
Appropriate Strategy to Maximize Shareholder Return
L&P seems to operate under a best-cost provider strategy. L&P manufactures many
different components for many different manufactures around the world. It needs to ensure that
the customer is receiving the best possible part at the best possible price. Many of the parts that
L&P provides are proprietary and cannot be copied by rival companies. These proprietary
components are also integral pieces to many different manufacturers’ final products. For the
items that are not proprietary, L&P offers high product quality, warranty services, just-in-time
delivery, and customer service that cannot be matched by the competition (L&P Annual Report,
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2011). In addition, L&P maintains a cost advantage through higher efficiency, lower labor costs,
vertical integration processes, and bulk purchases of raw materials that are unmatched by the
competition. Finally, the cost savings, along with the omission of high overseas transportation
costs, tariffs, and currency fluctuations, help L&P maintain lower prices than foreign made
components (L&P Annual Report, 2010). By targeting value conscience buyers who are looking
for the best products at the best price, and being able to deliver those products with the features
that the customer needs, L&P is the best-cost provider of products in its field (Thompson, et al.,
2010).
Merger or Acquisition Scenario
L&P has tried many acquisitions over the years, with some being successful and some
ending up being divested. The current policy of L&P is that all acquisitions should create value
by enhancing TSR and have a clear strategic rationale and sustainable competitive advantage
(L&P Annual Report, 2011). One partnership, or joint venture, that has the potential to
significantly reduce costs and increase revenue would be with Nucor Corporation. L&P is
looking for businesses that either manufacture or consume the company’s primary raw materials,
which are steel rod, steel wire, and mechanical tubing (L&P acquisition criteria, 2011). Since
L&P uses steel in almost every aspect of its manufacturing processes, it makes sense to have a
ready supply of steel that can be obtained quickly and at a fair price. The closest Nucor
Corporation plant to Carthage, MO is located in Maryville, MO. The distance between these two
locations is almost 250 miles. Although not very far in terms of moving freight, steel is a very
heavy commodity and Missouri DOT law only allows 20,000 lbs. per axle for interstate transport
(Missouri Department of Revenue, 2008). If L&P is currently getting steel from a closer
location, this partnership may not be economically sound. In this case, it may be advantageous
STRATEGIC AND FINANCIAL ANALYSIS
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for Nucor Corporation to build a plant in Carthage, MO or in Joplin, MO to reduce freight costs
and ensure that L&P has a steady, reliable source of steel for its products. In addition, L&P is
one of the largest producers and processors of wire in the US so a joint venture with Nucor could
be mutually beneficial since Nucor could use the L&P wire plant to help supplement Nucor’s
wire needs.
Conclusion
L&P is a well established company with a long history of producing quality products for
many different segments of industry. The name may not be one that is easily recognized, but
their products touch many people every day. If you have ever slept on a mattress containing steel
springs, it is very likely that those springs were made by L&P. Their dedication to innovation
and design is one of the reasons that their products are still important to many people today. L&P
continues to develop new products and venture into new business areas in order to grow and
keep the company strong. The fact that their balance sheet has shown consistent positive margins
since the company’s inception is a testament to their management skills and business model.
L&P, along with their new strategic vision, will continue to improve and touch lives well into the
future.
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Appendix 1
Balance Sheet L&P, Inc.
Period Ending
FY2010
FY2009
FY2008
Cash and Short Term Investments
245.00 M
260.50 M
164.70 M
Net Receivables
478.90 M
469.50 M
550.50 M
Total Inventories
435.30 M
409.10 M
495.00 M
Progress Payments & Others
-71.70 M
-58.70 M
-127.30 M
—
—
—
Other Current Assets
59.90 M
74.50 M
96.60 M
Current Assets Total
1.22 B
1.21 B
1.31 B
14.30 M
18.20 M
45.90 M
0
0
0
4.80 M
0
0
624.20 M
668.60 M
681.40 M
Property, Plant & Equipment Gross
1.80 B
1.79 B
1.74 B
Accumulated Depreciation
1.17 B
1.12 B
1.06 B
1.13 B
1.18 B
1.13 B
2.3 B
2.3 B
2.19 B
Deferred Charges
13.80 M
17.90 M
16.20 M
Tangible Other Assets
43.50 M
79.70 M
54.30 M
Intangible Other Assets
1.07 B
1.10 B
1.06 B
2.99 B
3.06 B
3.16 B
Assets
Prepaid Expenses
Long Term Receivables
Investment in Unconsolidated
Subsidiaries
Other Investments
Property, Plant & Equipment Net
Other Assets
Fixed Assets Total
Total Assets
STRATEGIC AND FINANCIAL ANALYSIS
21
Liabilities
Short Term Debt & Current Portion of
Long Term Debt
20.60 M
10.10 M
35.60 M
113.50 M
128.20 M
134.60 M
Income Taxes Payable
12.60 M
12.80 M
14.20 M
Dividends Payable
39.70 M
38.70 M
39.00 M
Other Current Liabilities
110.20 M
325.60 M
125.50 M
Current Liabilities Total
523.00 M
535.10 M
524.20 M
Long Term Debt
762.20 M
789.30 M
851.20 M
Total Debt
896.3 M
927.6 M
1.02 B
Provision for Risks & Charges
97.30 M
0
0
Deferred Taxes
58.80 M
49.00 M
17.20 M
Deferred Income
17.30 M
—
—
—
—
—
Other Liabilities
7.30 M
112.30 M
116.30 M
Total Liabilities
1.47 B
1.49 B
1.51 B
0
0
0
17.10 M
21.50 M
0
0
0
0
Common Equity
1.51 B
1.55 B
1.65 B
Common Stock
2.00 M
2.00 M
2.00 M
Capital Surplus
463.20 M
467.70 M
496.10 M
0
0
0
Accrued Payroll
Deferred Tax Liability in Untaxed
Reserves
Shareholders Equity
Non-Equity Reserves
Minority Interest
Preferred Stock
Revaluation Reserves
STRATEGIC AND FINANCIAL ANALYSIS
Other Appropriated Reserves
22
-50.70 M
-42.50 M
-40.30 M
—
—
—
2.03 B
2.01 B
2.06 B
—
—
—
0
0
0
152.50 M
147.30 M
51.70 M
0
0
0
Treasury Stock
1.09 B
1.03 B
918.60 M
Total Shareholders Equity
1.52 B
1.57 B
1.65 B
Total Liabilities & Shareholders Equity
2.99 B
3.06 B
3.16 B
146.20 M
148.80 M
155.80 M
Unappropriated (Free) Reserves
Retained Earnings
Equity in Untaxed Reserves
ESOP Guarantees
Unrealized Foreign Exchange Gain
(Loss)
Unrealized Gain (Loss) on Marketable
Securities
Common Shares Outstanding
(US Securities and Exchange Commission, 2011)
STRATEGIC AND FINANCIAL ANALYSIS
23
Appendix 2
Income Statement L&P, Inc.
Period Ending
FY2010
3.36 B
FY2009
3.05 B
FY2008
4.08 B
2.60 B
2.31 B
3.27 B
122.80 M 130.30 M
140.40 M
Gross Income
635.70 M 611.60 M
666.70 M
Selling, General & Admin Expenses
354.30 M 363.00 M
423.20 M
Net Sales/Revenues
Cost of Goods Sold (Excluding
Depreciation)
Depreciation, Depletion and Amortization
Other Operating Expense
400,000.00
-4.00 M
0.00
Operating Expenses - Total
72.90 M 229.70 M
75.20 M
Operating Income
281.00 M 252.60 M
243.50 M
Extraordinary Credit - Pretax
5.80 M
3.60 M
0
Extraordinary Charge - Pretax
9.70 M
29.80 M
31.20 M
Non-operating Interest Income
5.20 M
5.50 M
8.70 M
Reserves Inc (Dec)
0
0
0
STRATEGIC AND FINANCIAL ANALYSIS
24
Pretax Equity in Earnings
0
0
0
Other Income/Expenses - Net
10.80 M
5.10 M
15.40 M
293.10 M 237.00 M
236.40 M
Earnings Before Interest & Taxes (EBIT)
Interest Expenses On Debt
37.60 M
38.60 M
48.40 M
Interest Capitalized
0
0
0
255.50 M 198.40 M
188.00 M
Pretax Income
Income Taxes
71.90 M
77.30 M
65.10 M
Current Domestic Income Tax
28.50 M
21.80 M
40.40 M
Current Foreign Income Tax
16.10 M
15.60 M
21.80 M
Deferred Domestic Income Tax
22.30 M
42.10 M 100,000.00
Deferred Foreign Income Tax
5.00 M
-2.20 M
2.80 M
Income Tax Credits
0
0
0
Minority Interest
6.20 M
3.20 M
0
Equity in Earnings
0
0
0
After Tax Income Expense
0
0
0
STRATEGIC AND FINANCIAL ANALYSIS
25
Discontinued Operations -800,000.00
Net Income Before Extra Items/Preferred Div
Extra Items & Gain (Loss) Sale of Assets
Net Income Before Preferred Dividends
Preferred Dividend Requirements
Net Income Available to Common
-6.10 M
64.70 M
176.60 M 111.80 M
122.90 M
0
0
-18.50 M
176.60 M 111.80 M
104.40 M
0
0
0
176.60 M 111.80 M
122.90 M
(US Securities and Exchange Commission, 2011)