The document defines EBIT (earnings before interest, taxes, minority interests and preferred dividends) as a measure of operating segment performance and for measuring variable compensation. It provides a reconciliation of EBIT to net earnings for three periods, with EBIT ranging from $146-173 million for quarters and $543 million for the full year. Interest expense is noted to vary between periods due to a new accounting standard. EBIT is described as a useful non-GAAP measure of operating performance without regard to financing or taxes.

1. NON-GAAP FINANCIAL MEASURES (Unaudited)
Earnings before interest, taxes, minority interests and preferred dividends (EBIT)
We define EBIT as earnings before interest, taxes, minority interests, preferred dividends and the cumulative effect of any
accounting changes. We use EBIT to assess and measure the performance of our operating segments and also as a component
in measuring our vari able compens ation programs. Below is a reconciliation of EBIT, a non-GAAP financial measure, to our
consolidated net earnings, for each of the applicable periods:
Three Months
Three Months Ended For the Year Ended Ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31, Sept. 26,
Millions 2004 2003 2004 2003 2004
Earnings before interest, income taxes, minority interests
and dividends on preferred securities of subsidiary trust....... $ 173 $ 84 $ 543 $ 181 $ 146
EBIT as a percentage of net sales 7.4% 4.8% 6.4% 2.9% 6.7%
Less:
Interest expense.....................................….........…………. 31 25 111 90 28
Provision (benefit) for income taxes..………............…..... 12 7 56 12 (4)
Minority interests in earnings of consolidated subsidiaries 11 5 26 14 6
Dividends on preferred securities of subsidiary trust…..… - - - 11 -
Cumulative effect of change in accounting principle…… - 4 - 4 -
$ 119 $ 43 $ 350 $ 50 $ 116
Net earnings ……............................…...........……………..
Net earnings as a percentage of net sales 5.1% 2.5% 4.1% 0.8% 5.3%
• Interest expens e between accounting periods is not comparable due to the issuance of a new accounting standard. In
May 2003, the FASB issued SFAS 150 which required that dividends on our Convertible Preferred Securities of
Subsidiary Trust be classified as interest expense aft er July 1, 2003. This reclassi fication results in interest expense
not being comparable for the periods presented.
• We believe EBIT is a useful measure of our operating performance for the periods presented as it illustrates our
operating performance without regard to financing methods, capital structure or income taxes. This measure is not in
accordance with, or an alternative for, accounting principles generally accepted in the United States of America
(GAAP) and may not be consistent with measures used by other companies. It should be considered supplemental
data.