Mead Johnson Nutrition Company (NYSE: MJN) today announced its
financial results for the quarter and nine months ended
September 30, 2015.
- Third quarter constant dollar(1) sales
were 4% below the prior year quarter. Continued strength in North
America/Europe only partially offset the impact of weaker
performance in emerging markets. Results were further impacted by
adverse foreign currency translation and reported sales were 10%
below the prior year quarter.
- Sales for the nine months ended
September 30, 2015 were 1% below the prior year on a constant
dollar basis and 6% below on a reported basis.
- Gross margin improved by 460 basis
points to 64.5% from 59.9% in the prior year quarter, mainly due to
lower dairy input costs.
- EBIT as adjusted(2) was 7% above the
prior year on a constant dollar basis. On a reported basis, EBIT
was 7% below the prior year.
- Based on weighted average shares
outstanding for the quarter of 201.7 million, non-GAAP EPS(2) for
the third quarter was $0.80; GAAP EPS was $0.77.
- The company repurchased 5.6 million
shares of stock for $437 million during the quarter under the
existing authorization. Shares outstanding at September 30,
2015 were 197.1 million.
- The company announces a new share
repurchase program of up to $1.5 billion of the company's common
stock.
- Full-year constant dollar sales are
expected in the range of 2% to 3% below the prior year. Including
the impact of foreign exchange, full-year reported sales
performance is expected to be 7% to 8% below the prior year.
- Full-year non-GAAP EPS is expected to
be in the range of $3.33 to $3.43.
- The company expects to incur charges of
approximately $25 million associated with the Fuel for Growth
initiative in the fourth quarter of 2015. Inclusive of this charge,
Specified Items are expected to be $0.18 per share excluding any
further mark-to-market pension adjustments. As a result, full-year
GAAP EPS is expected to be in the range of $3.15 to $3.25.
“Our most recently completed quarter was more challenging than
we had anticipated. However, we are delighted with the continued
strength of our North American and European businesses, as well as
encouraged by the early feedback on our new initiatives in China.
We have adjusted our expectations for full-year 2015 and expect
near-term challenges in our emerging market segments to linger into
2016." said Kasper Jakobsen, Chief Executive Officer.
(1) Constant dollar figures exclude the
impact of changes in foreign currency exchange rates.
(2) Non-GAAP or as adjusted results
exclude Specified Items. For a description of Specified Items, and
a reconciliation of non-GAAP to GAAP and constant dollar results,
see the schedules titled “Supplemental Financial Information” and
“Reconciliation of Non-GAAP to GAAP Results.”
Third Quarter 2015 (Dollars in
Millions) (UNAUDITED) Three Months Ended
September 30, % Change % Change Due to
% of % of Constant
Foreign Net Sales 2015 Total
2014 Total Reported Dollar
Volume Price/Mix Exchange Asia $ 476.8 49 % $
561.5 52 % (15 )% (11 )% (7 )% (4 )% (4 )% Latin America 184.5 19 %
222.9 20 % (17 )% (1 )% (5 )% 4 % (16 )% North America/Europe 316.2
32 % 306.3 28 % 3 % 7 % 3 % 4 % (4 )% Net Sales $
977.5 100 % $ 1,090.7 100 % (10 )% (4 )% (4 )% — % (6
)%
- Strong performance in North
America/Europe was insufficient to fully offset sales weakness in
emerging markets.
- The North America/Europe segment
delivered strong sales growth, driven by market share gains and
favorable market conditions in the United States and Canada.
- In China, price based promotional
activities were seen across all channels. The company recently
introduced a fully imported range of products in China which are
performing well. However, weakness in demand for locally
manufactured products remained a challenge.
- In several other emerging markets,
share gains made late in the quarter were insufficient to offset
earlier share losses and category softness.
Three Months Ended September 30, Earnings Before
Interest and Income Taxes (EBIT) 2015
% ofSales
2014
% ofSales
% Change Asia $ 154.2 32 % $ 186.2 33 % (17 )% Latin
America 38.9 21 % 52.6 24 % (26 )% North America/Europe 101.3 32 %
66.8 22 % 52 % Corporate and Other (68.4 ) (63.0 ) (9 )% EBIT as
reported $ 226.0 23 % $ 242.6 22 % (7 )% Specified
Items $ 13.0 $ 3.4 Impact of F/X $ 25.3 EBIT as
adjusted $ 264.3 $ 246.0 7 %
- EBIT as adjusted, on a constant dollar
basis, increased 7% above the prior year quarter, mainly due to
higher gross margins as a result of favorable dairy costs across
all segments.
- North America/Europe EBIT was driven by
higher sales and gross margin improvement, partially offset by
higher advertising and promotion investments, including
digital.
- Asia and Latin America EBIT was
primarily the result of lower sales.
- Latin America EBIT performance and
comparison was further exacerbated by prior-year foreign exchange
related gains on payments received from the Venezuelan business and
the current year postponed shipments into the country.
- Corporate and Other expenses increased
primarily due to the nonrecurrence of a prior-year pension
curtailment gain, as well as higher actuarial losses in the current
year compared to the prior year. Partially offsetting these
increases were lower provisions for incentive related compensation
in the current year.
Nine Months 2015
(Dollars in Millions) (UNAUDITED) Nine
Months Ended September 30, % Change % Change Due
to % of % of
Constant Foreign Net Sales
2015 Total 2014 Total Reported
Dollar Volume Price/Mix Exchange Asia $
1,571.0 51% $ 1,729.8 52 % (9 )% (7 )% (6 )% (1 )% (2 )% Latin
America 587.3 19% 659.7 20 % (11 )% 4 % (3 )% 7 % (15 )% North
America/Europe 946.0 30% 925.6 28 % 2 % 5 % 1 % 4 %
(3 )% Net Sales $ 3,104.3 100% $ 3,315.1 100 % (6 )%
(1 )% (3 )% 2 % (5 )%
- Strong growth in North America/Europe
was insufficient to fully offset generally weaker category sales in
emerging markets.
- North America/Europe sales growth was
driven by higher, realized pricing and market share gains.
- In China, continued price-based
promotional activity and an ongoing shift in consumer demand
towards fully imported products negatively impacted demand for the
company's locally manufactured products. The company recently
introduced a fully imported product that has met expectations since
its launch in the second quarter of 2015.
- In Latin America, sales were lower due
to slowing category growth and adverse foreign exchange movements.
Share gains were seen in key markets following strategic
investment. The company slowed shipments to Venezuela late in the
period, pending access to foreign exchange to allow settlement of
inter-company payables.
Nine Months Ended September 30, Earnings Before
Interest and Income Taxes (EBIT) 2015
% ofSales
2014
% ofSales
% Change
Asia $ 542.1 35 % $ 623.4 36 % (13 )% Latin America 141.0 24 % $
152.6 23 % (8 )% North America/Europe 264.9 28 % $ 200.9 22 % 32 %
Corporate and Other (207.6 ) $ (198.2 ) (5 )% EBIT as reported $
740.4 24 % $ 778.7 23 % (5 )% Specified Items $ 20.8
$ 20.9 Impact of F/X $ 42.4 EBIT as adjusted $ 803.6
$ 799.6 1 %
- EBIT as adjusted, on a constant dollar
basis, increased 1% due to higher gross margins across all segments
as a result of lower dairy costs. Higher operating expenses,
including increased investment in demand-creation initiatives on a
local currency basis, partially offset the impact from gross margin
improvements.
- The reduction in EBIT in Asia was
driven by lower sales and higher demand-creating investments to
support the introduction of the company's fully imported products
in China.
- Latin America EBIT was impacted by
lower sales. In addition, the comparison was also impacted by
foreign exchange related gains in Venezuela in the prior year
period.
- North America/Europe EBIT benefited
from higher sales and improved gross margin.
- Corporate and Other expenses increased
primarily as a result of one-time costs related to the company's
settlement of the SEC matter, as disclosed in July 2015.
Cash Flow Items and Share Repurchases
- Cash and cash equivalents increased by
$66 million since December 31, 2014 and were $1.4 billion at
September 30, 2015. Short-term borrowings and long-term debt
were $1.5 million and $1.8 billion, respectively, as of
September 30, 2015.
- Operating cash flow was $609 million in
the nine months ended September 30, 2015 compared to $565
million in the same period last year. Cash flows increased due to
working capital improvements which were substantial enough to more
than offset the impact of over $86 million in discretionary
contributions to pension plans. In the prior year, cash outflow
related to re-branding of certain products and the start-up of the
manufacturing facility in Singapore did not recur in the current
year.
- Investing activities include capital
expenditures of $125 million during the nine months ended
September 30, 2015. This included investments in capacity
expansion for manufacturing facilities in the U.S. and the
Netherlands to accommodate demand for our new fully imported
product in China and liquid offerings.
- Financing activities include cash
outflows of $437 million for the repurchase of approximately 5.6
million shares of stock under the company's 2013 share repurchase
authorization, which is now substantially complete. These purchases
were funded, in part, from $322 million of borrowings against the
company's revolving credit facility.
- On October 20, 2015, the company's
board of directors approved a new share repurchase authorization of
$1.5 billion of the company's common stock. The company expects to
finance the share repurchases through the issuance of debt, which
may include long-term notes. The adoption of the new program
follows the substantial completion of purchases of common stock
under the prior repurchase authorization approved in September
2013. Shares will be repurchased from time to time in the open
market or in privately negotiated transactions, including, without
limitation, the anticipated use of a $1.0 billion accelerated share
repurchase program which the company expects to execute in the
short term.
Outlook for 2015
The company expects full year 2015 constant dollar revenue to be
2% to 3% below the prior year. Foreign exchange is assumed to
adversely affect translation into U.S. dollars, resulting in
estimated reported sales of 7% to 8% below the prior year.
“With the majority of the year behind us, we estimate constant
dollar revenue to be slightly below the prior year and non-GAAP EPS
to fall between $3.33 to $3.43. This has shaped up to be a
challenging year on several fronts, and I am satisfied with the way
we are adjusting our strategies appropriately in recognition of
environmental changes. We remain committed to our investment in
growth initiatives and innovation critical to our long term
success. We are building momentum behind our Fuel For Growth
productivity initiative to ensure we can fund growth initiatives
appropriately and support a gradual improvement in profitability,
while also delivering our long-term financial ambition. In today’s
Investor Day presentations, we will provide more detail on our
growth initiatives and cost reduction actions as well as outline a
plan to return capital to shareholders via a new, larger share
buyback program. In the latest quarter, we bought back
approximately three percent of our outstanding shares. Consistent
with my earlier statements that we will optimize our capital
structure over time, the next phase of our share repurchase program
will go further,” said Kasper Jakobsen, Chief Executive
Officer.
Specified Items are expected to be $0.18 per share, excluding
any further mark-to-market pension adjustments. As a result,
full-year GAAP EPS is expected to be in the range of $3.15 to
$3.25.
Conference Call Scheduled
Mead Johnson will host a conference call at 8:30 a.m. CDT today,
during which company executives will review financial results for
the third quarter and first nine months of 2015. Security analysts
and investors wishing to participate by telephone should call (877)
359-9508, pass code: Mead Johnson. Callers outside of North
America should call +1-224-357-2393 to be connected. The earnings
conference call will also be broadcast over the Internet at
http://investors.meadjohnson.com. A
replay of the earnings conference call will be available through
11:00 p.m. CST Sunday, December 6, 2015, by calling (855) 859-2056,
or outside of North America by calling +1-404-537-3406, pass code:
50955892. The replay will also be available at meadjohnson.com.
The earnings call will be followed by the bi-annual Investor Day
event from 9:00 a.m. to 1:00 p.m. CDT, during which senior
executives will discuss the Company's strategies and plans. Two
Q&A sessions will be hosted during the management presentation.
The management presentation will be broadcast over the Internet at
http://investors.meadjohnson.com. The
replay will also be available at meadjohnson.com.
Forward-Looking Statements
Certain statements in this news release are forward-looking as
defined in the Private Securities Litigation Reform Act of 1995.
These forward-looking statements may be identified by the fact they
use words such as “should,” “expect,” “anticipate,” “estimate,”
“target,” “may,” “project,” “guidance,” “intend,” “plan,” “believe”
and other words and terms of similar meaning and expression. Such
statements are likely to relate to, among other things, a
discussion of goals, plans and projections regarding financial
position, results of operations, cash flows, market position,
product development, product approvals, sales efforts, expenses,
capital expenditures, performance or results of current and
anticipated products and the outcome of contingencies such as legal
proceedings and financial results. Forward-looking statements can
also be identified by the fact that they do not relate strictly to
historical or current facts. Such forward-looking statements are
based on current expectations that involve inherent risks,
uncertainties and assumptions that may cause actual results to
differ materially from expectations as of the date of this news
release. These risks include, but are not limited to: (1) the
ability to sustain brand strength, particularly the Enfa family of
brands; (2) the effect on the company’s reputation of real or
perceived quality issues; (3) the effect of regulatory restrictions
related to the company’s products; (4) the adverse effect of
commodity costs; (5) increased competition from branded, private
label, store and economy-branded products; (6) the effect of an
economic downturn on consumers’ purchasing behavior and customers’
ability to pay for product; (7) inventory reductions by customers;
(8) the adverse effect of changes in foreign currency exchange
rates; (9) the effect of changes in economic, political and social
conditions in the markets where we operate; (10) changing consumer
preferences; (11) the possibility of changes in the WIC(3) program,
or participation in WIC; (12) legislative, regulatory or judicial
action that may adversely affect the company’s ability to advertise
its products, maintain product margins, or negatively impact the
company’s reputation or result in fines or penalties that decrease
earnings; and (13) the ability to develop and market new,
innovative products. For additional information regarding these and
other factors, see the company’s filings with the United States
Securities and Exchange Commission (the “SEC”), including its most
recent Annual Report on Form 10-K, which filings are available upon
request from the SEC or at www.meadjohnson.com. The company cautions readers
not to place undue reliance on any forward-looking statements,
which speak only as of the date made. The company undertakes no
obligation to publicly update any forward-looking statement,
whether as a result of new information, future events or
otherwise.
About Mead Johnson
Mead Johnson, a global leader in pediatric nutrition, develops,
manufactures, markets and distributes more than 70 products in over
50 markets worldwide. The company’s mission is to nourish the
world’s children for the best start in life. The Mead Johnson
name has been associated with science-based pediatric nutrition
products for over 100 years. The company’s “Enfa” family of brands,
including Enfamil® infant formula, is the world’s leading brand
franchise in pediatric nutrition. For more information, go to
www.meadjohnson.com.
(3) The Special Supplemental Nutrition Program for Women,
Infants and Children (WIC) is a federal assistance program of the
Food and Nutrition Services (FNS) of the United States Department
of Agriculture (USDA).
MEAD JOHNSON NUTRITION COMPANY CONDENSED
CONSOLIDATED STATEMENTS OF EARNINGS (Dollars and shares in
millions, except per share data) (UNAUDITED)
Three Months Ended Nine Months Ended September
30, September 30, 2015 2014
2015 2014 NET SALES $ 977.5 $ 1,090.7 $
3,104.3 $ 3,315.1 Cost of Products Sold 346.8 437.9
1,096.7 1,270.4 GROSS PROFIT 630.7 652.8 2,007.6
2,044.7 Operating Expenses: Selling, General and Administrative
216.1 240.2 679.5 715.4 Advertising and Promotion 156.1 158.9 490.7
489.2 Research and Development 26.3 28.7 79.9 82.5 Other
(Income)/Expenses – net 6.2 (17.6 ) 17.1 (21.1 )
EARNINGS BEFORE INTEREST AND INCOME TAXES 226.0 242.6 740.4 778.7
Interest Expense—net 14.8 18.3 42.5
46.0 EARNINGS BEFORE INCOME TAXES 211.2 224.3 697.9 732.7
Provision for Income Taxes 56.6 36.0 173.6
160.5 NET EARNINGS 154.6 188.3 524.3 572.2 Less Net
Earnings/(Loss) Attributable to Noncontrolling Interests (0.6 ) 0.7
(1.2 ) 10.8 NET EARNINGS ATTRIBUTABLE TO SHAREHOLDERS
$ 155.2 $ 187.6 $ 525.5 $ 561.4
Earnings per Share(a)– Basic Net Earnings Attributable to
Shareholders $ 0.77 $ 0.93 $ 2.59 $ 2.77
Earnings per Share(a)– Diluted Net Earnings Attributable to
Shareholders $ 0.77 $ 0.92 $ 2.59 $ 2.77
Weighted Average Shares – Diluted 201.7 202.7 202.6
202.6 Dividends Declared per Share $ 0.4125 $ 0.3750 $ 1.2375 $
1.1250
(a) The numerator for basic and diluted
earnings per share is net earnings attributable to shareholders.
Net earnings has been reduced by dividends and undistributed
earnings attributable to unvested share based incentive plan
awards. The denominator for basic earnings per share is the
weighted-average shares outstanding during the period. The
denominator for diluted earnings per share is the weighted-average
shares outstanding adjusted for the effect of dilutive stock
options and performance share awards.
MEAD JOHNSON NUTRITION COMPANY CONDENSED
CONSOLIDATED BALANCE SHEETS (Dollars and shares in millions,
except per share data) (UNAUDITED) September
30, 2015 December 31, 2014 ASSETS CURRENT ASSETS:
Cash and Cash Equivalents $ 1,363.5 $ 1,297.7 Receivables—net of
allowances of $6.5 and $9.6, respectively 368.9 387.8 Inventories
518.6 555.5 Deferred Income Taxes—net of valuation allowance 77.9
86.8 Income Taxes Receivable 37.2 7.7 Prepaid Expenses and Other
Assets 69.1 82.6 Total Current Assets 2,435.2 2,418.1
Property, Plant, and Equipment—net 933.2 912.7 Goodwill 147.0 162.7
Other Intangible Assets—net 65.0 75.4 Deferred Income Taxes—net of
valuation allowance 47.9 65.1 Other Assets 149.6 142.5
TOTAL $ 3,777.9 $ 3,776.5
LIABILITIES AND
EQUITY CURRENT LIABILITIES: Short-term Borrowings $ 1.5 $ 4.1
Accounts Payable 450.1 512.3 Dividends Payable 83.0 76.6 Accrued
Expenses and Other Liabilities 198.1 203.7 Accrued Rebates and
Returns 368.8 329.1 Deferred Income—current 20.9 34.3 Income
Taxes—payable and deferred 71.2 46.4 Total Current
Liabilities 1,193.6 1,206.5 Long-Term Debt 1,839.3 1,503.9 Deferred
Income Taxes—noncurrent 10.3 12.4 Pension and Other Post-employment
Liabilities 136.5 211.1 Other Liabilities - noncurrent 206.0
192.8 Total Liabilities 3,385.7 3,126.7 COMMITMENTS AND
CONTINGENCIES REDEEMABLE NONCONTROLLING INTEREST — 66.0
EQUITY Shareholders’ Equity Common Stock, $0.01 par value:
3,000 authorized, 207.7 and 207.2 issued, respectively 2.1 2.1
Additional Paid-in/(Distributed) Capital (572.3 ) (641.3 ) Retained
Earnings 2,026.4 1,775.0 Treasury Stock—at cost (799.6 ) (362.6 )
Accumulated Other Comprehensive Loss (305.1 ) (198.9 ) Total
Shareholders’ Equity 351.5 574.3 Noncontrolling Interests 40.7
9.5 Total Equity 392.2 583.8 TOTAL $
3,777.9 $ 3,776.5
MEAD JOHNSON NUTRITION
COMPANY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in millions) (UNAUDITED) Nine
Months Ended September 30, 2015 2014 CASH
FLOWS FROM OPERATING ACTIVITIES: Net Earnings $ 524.3 $ 572.2
Adjustments to Reconcile Net Earnings to Net Cash Provided by
Operating Activities: Depreciation and Amortization 73.4 67.8 Other
63.1 30.2 Changes in Assets and Liabilities 34.7 (56.4 ) Payments
for Settlement of Interest Rate Forward Swaps — (45.0 ) Pension and
Other Post-employment Benefit Contributions (86.6 ) (4.2 ) Net Cash
Provided by Operating Activities 608.9 564.6 CASH FLOWS FROM
INVESTING ACTIVITIES: Capital Expenditures (125.2 ) (144.0 ) Sale
of Property, Plant and Equipment 0.4 0.2 Proceeds from/(Investment
in) Other Companies — 4.0 Net Cash Used in Investing
Activities (124.8 ) (139.8 ) CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Short-term Borrowings 1.5 3.2 Repayments of
Short-term Borrowings (4.0 ) (3.5 ) Repayments of Notes Payable —
(500.0 ) Payments of Dividends (243.6 ) (220.7 ) Purchases of
Treasury Stock (437.0 ) (49.7 ) Long-term Notes, net of original
issue discounts and expenses paid — 492.3 Long-term Revolver
Borrowings 322.0 — Stock-based Compensation related Proceeds and
Excess Tax Benefits 24.0 27.3 Stock-based Compensation Tax
withholdings (11.3 ) (7.9 ) Purchase of Trading Securities (16.2 )
— Sale of Trading Securities 21.7 — Purchase of Redeemable Shares
(24.2 ) — Distributions to Noncontrolling Interests (6.9 ) (4.4 )
Net Cash Used in Financing Activities (374.0 ) (263.4 ) Effects of
Changes in Exchange Rates on Cash and Cash Equivalents (44.3 )
(17.0 ) NET INCREASE IN CASH AND CASH EQUIVALENTS 65.8 144.4
CASH AND CASH EQUIVALENTS: Beginning of Period 1,297.7
1,050.8 End of Period $ 1,363.5 $ 1,195.2
MEAD JOHNSON NUTRITION COMPANY
RECONCILIATION OF NON-GAAP TO GAAP
RESULTS
(Dollars in millions, except per share
data)
(UNAUDITED)
This news release contains non-GAAP
financial measures, which may include non-GAAP net sales, gross
profit, certain components of operating expenses including selling,
general and administrative, research and development and other
(income)/expenses net, EBIT, earnings and earnings per share
information. The items included in GAAP measures, but excluded for
the purpose of determining the above listed non-GAAP financial
measures, include significant income/expenses not indicative of
underlying operating results, including the related tax effect. The
above listed non-GAAP measures represent an indication of the
company’s underlying operating results and are intended to enhance
an investor’s overall understanding of the company’s financial
performance. In addition, this information is among the primary
indicators the company uses as a basis for evaluating company
performance, setting incentive compensation targets and planning
and forecasting of future periods. This information is not intended
to be considered in isolation or as a substitute for financial
measures prepared in accordance with GAAP. Tables that reconcile
non-GAAP to GAAP disclosure follow.
Three Months Ended September 30, 2015 Three
Months Ended September 30, 2014 Specified Items
(a) Specified Items (a)
Mark-to- Mark-to- As
Market All As As Market
All
As
Reported Pension
Other (b)
Adjusted Reported Pension
Other (b)
Adjusted
NET SALES $ 977.5 $ — $ — $ 977.5 $ 1,090.7 $ — $ — $ 1,090.7 Cost
of Products Sold 346.8 (3.9 ) — 342.9
437.9 (3.2 ) — 434.7 GROSS PROFIT 630.7 3.9 —
634.6 652.8 3.2 — 656.0 GROSS MARGIN % 64.5 % 0.4 % — % 64.9 % 59.9
% 0.2 % — % 60.1 % Operating Expenses: Selling, General and
Administrative 216.1 (6.3 ) (0.6 ) 209.2 240.2 (5.2 ) (2.7 ) 232.3
Advertising and Promotion 156.1 — — 156.1 158.9 — — 158.9 Research
and Development 26.3 (1.2 ) — 25.1 28.7 (0.9 ) — 27.8 Other
(Income)/Expenses – net 6.2 — (1.0 ) 5.2
(17.6 ) — 8.6 (9.0 ) EARNINGS BEFORE INTEREST
AND INCOME TAXES 226.0 11.4 1.6 239.0 242.6 9.3 (5.9 ) 246.0 EBIT
as a % of Sales 23.1 % 1.2 % 0.2 % 24.5 % 22.2 % 0.9 % (0.5 )% 22.6
% Interest Expense – net 14.8 — — 14.8
18.3 — — 18.3 EARNINGS
BEFORE INCOME TAXES 211.2 11.4 1.6 224.2 224.3 9.3 (5.9 ) 227.7
Provision for Income Taxes 56.6 4.0 2.4
63.0 36.0 3.3 (0.2 ) 39.1
Effective Tax Rate 26.8 % 0.4 % 0.9 % 28.1 % 16.0 % 0.8 % 0.4 %
17.2 % NET EARNINGS 154.6 7.4 (0.8 ) 161.2 188.3 6.0 (5.7 )
188.6 Less Net Earnings/(Loss) Attributable to Noncontrolling
Interests (0.6 ) — — (0.6 ) 0.7 —
— 0.7 NET EARNINGS ATTRIBUTABLE TO
SHAREHOLDERS $ 155.2 $ 7.4 $ (0.8 ) $ 161.8
$ 187.6 $ 6.0 $ (5.7 ) $ 187.9 Earnings
per Share– Diluted Net Earnings Attributable to Shareholders $ 0.77
$ 0.04 $ (0.01 ) $ 0.80 $ 0.92 $
0.03 $ (0.02 ) $ 0.93
Certain figures do not sum due to
rounding.
(a) All Specified Items are included in
Corporate and Other.
(b) Specified Items include legal,
settlement and related costs, severance and other expenses, a loss
on marketable securities and a pension curtailment gain.
MEAD JOHNSON NUTRITION COMPANY
RECONCILIATION OF NON-GAAP TO GAAP RESULTS (Dollars in
millions, except per share data) (UNAUDITED)
Nine Months Ended September 30, 2015 Nine Months Ended
September 30, 2014 Specified Items (a)
Specified Items (a)
Mark-to- Mark-to- As
Market Investigation All As As
Market All As Reported Pension
Settlement
Other (b)
Adjusted Reported Pension
Other (b)
Adjusted NET SALES $ 3,104.3 $ — $ 3,104.3 $ 3,315.1 $ — $ —
$ 3,315.1 Cost of Products Sold 1,096.7 (3.4 ) —
1,093.3 1,270.4 (5.7 ) — 1,264.7
GROSS PROFIT 2,007.6 3.4 — — 2,011.0 2,044.7 5.7 — 2,050.4
GROSS MARGIN % 64.7 % 0.1 % — % — % 64.8 % 61.7 % 0.2 % — % 61.9 %
Operating Expenses: Selling, General and Administrative
679.5 (5.5 ) — (1.9 ) 672.1 715.4 (9.1 ) (13.1 ) 693.2 Advertising
and Promotion 490.7 — — — 490.7 489.2 — — 489.2 Research and
Development 79.9 (1.0 ) — — 78.9 82.5 (1.6 ) — 80.9 Other
(Income)/Expenses – net 17.1 — (12.0 ) 3.0 8.1
(21.1 ) — 8.6 (12.5 ) EARNINGS BEFORE
INTEREST AND INCOME TAXES 740.4 9.9 12.0 (1.1 ) 761.2 778.7 16.4
4.5 799.6 EBIT as a % of Sales 23.9 % 0.3 % 0.4 % — % 24.5 % 23.5 %
0.5 % 0.1 % 24.1 % Interest Expense – net 42.5 —
— — 42.5 46.0 — —
46.0 EARNINGS BEFORE INCOME TAXES 697.9 9.9 12.0 (1.1
) 718.7 732.7 16.4 4.5 753.6 Provision for Income Taxes
173.6 3.5 3.1 0.6 180.8
160.5 5.7 3.4 169.6 Effective Tax Rate
24.9 % 0.1 % 0.1 % — % 25.2 % 21.9 % 0.3 % 0.3 % 22.5 % NET
EARNINGS 524.3 6.4 8.9 (1.7 ) 537.9 572.2 10.7 1.1 584.0 Less Net
Earnings/(Loss) Attributable to Noncontrolling Interests (1.2 ) —
— — (1.2 ) 10.8 — —
10.8 NET EARNINGS ATTRIBUTABLE TO SHAREHOLDERS $
525.5 $ 6.4 $ 8.9 $ (1.7 ) $ 539.1
$ 561.4 $ 10.7 $ 1.1 $ 573.2
Earnings per Share– Diluted Net Earnings Attributable to
Shareholders $ 2.59 $ 0.03 $ 0.03 $ — $
2.65 $ 2.77 $ 0.05 $ — $ 2.82
Certain figures do not sum due to
rounding.
(a) All Specified Items are included in
Corporate and Other.
(b) Specified Items include legal,
settlement and related costs, severance and other expenses, a
pension curtailment gain and a gain on marketable securities.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20151022005694/en/
Mead Johnson Nutrition CompanyInvestors:Kathy MacDonald(847)
832-2182kathy.macdonald@mjn.comorMedia:Christopher Perille(847)
832-2178chris.perille@mjn.com
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