GLENVIEW, Ill.--(BUSINESS WIRE)--Jan. 31, 2013--
Mead Johnson Nutrition Company (NYSE: MJN) announced today its financial
results for the fourth quarter and year ended December 31, 2012.
-
Net sales of $3,901.3 million for the full year 2012 were up six
percent from $3,677.0 million in the prior year. Excluding an
unfavorable foreign exchange impact, sales increased seven percent.
Constant dollar sales for the Asia/Latin America segment grew 12
percent, partially offset by a three percent decline in the North
America/Europe segment.
-
GAAP net earnings were $2.95 per diluted share for 2012, an increase
of 19 percent compared to $2.47 per diluted share in the prior year.
-
Non-GAAP (1) net earnings of $3.08 per diluted share
for 2012 were up 10 percent from $2.79 per diluted share in 2011.
-
Fourth quarter 2012 sales of $981.1 million were up eight percent from
$911.3 million in 2011, with constant dollar sales up seven percent.
Sales for the Asia/Latin America segment grew nine percent excluding a
favorable foreign exchange impact, while the North America/Europe
segment grew four percent.
-
GAAP net earnings in the fourth quarter were $0.66 per diluted share,
compared to $0.42 per diluted share in the prior year, benefiting from
higher sales, the timing of pension settlement expense and a lower
effective tax rate, partially offset by higher demand-generation
investments.
-
Non-GAAP net earnings totaled $0.72 per diluted
share for the fourth quarter of 2012, compared to $0.52 per diluted
share in 2011.
-
The company provided full-year 2013 GAAP EPS guidance of $3.20 to
$3.28. Excluding specified items, estimated at $0.02 per diluted
share, the full-year 2013 non-GAAP EPS is expected to be in the range
of $3.22 to $3.30.
(1)See “Non-GAAP Financial Measures” and the
reconciliation of GAAP and non-GAAP results included in this release.
“We are pleased with our strong sales and earnings performance in the
fourth quarter and the overall performance of the business in 2012,”
said Chief Executive Officer Stephen W. Golsby. “The Asia/Latin America
segment delivered strong growth, while notably in China, we recovered
additional market share in the fourth quarter, with distributors'
inventory restored to normal levels by the end of the year. The North
America/Europe segment contributed four percent sales growth in the
fourth quarter as we made excellent progress building non-WIC* market
share in the United States. For the company, full-year constant dollar
sales grew at seven percent with non-GAAP earnings per share increasing
10 percent. Tight management of general and administrative spending,
coupled with further reductions in our effective tax rate, more than
offset the impact of higher commodity costs and helped to fund continued
increases in demand-generation investments to drive longer-term growth.
Notably, the global Enfa brand reached a major milestone in 2012,
exceeding $3 billion in sales.”
*WIC = United States Department of Agriculture Special Supplemental
Nutrition Program for Women, Infants, and Children
Fourth Quarter Results
Sales for the fourth quarter of 2012 totaled $981.1 million, up eight
percent from $911.3 million a year ago. Sales benefited five percent
from price, two percent from volume, and one percent from foreign
exchange. Earnings before interest and income taxes (EBIT) for the
fourth quarter totaled $189.7 million, up 30 percent from $146.1 million
in the prior-year period. This was primarily driven by higher sales, the
earlier recognition of pension settlement expense in 2012, and lower IT
and other IPO-related separation expenses. These benefits were partially
offset by higher demand-generation investments.
Net earnings attributable to shareholders totaled $134.2 million, or
$0.66 per diluted share, compared to $85.6 million, or $0.42 per diluted
share in the prior-year quarter. In addition to the increase in EBIT,
the effective tax rate (ETR) decreased for the fourth quarter to 23.8
percent, compared to 32.5 percent a year ago, primarily due to favorable
adjustments associated with prior years' tax filings and lower required
tax accruals. Net earnings in the fourth quarter of 2012 also benefited
by $0.01 per diluted share from favorable prior years' tax items.
On a non-GAAP basis, which excludes specified items, net earnings
attributable to shareholders totaled $146.7 million, or $0.72 per
diluted share, for the fourth quarter of 2012, compared to $106.5
million, or $0.52 per diluted share, for the same quarter a year ago.
Fourth Quarter Segment Results
The Asia/Latin America segment had sales of $663.5 million for the
fourth quarter of 2012, up 10 percent from $604.8 million in 2011. Sales
increased six percent from price, three percent from volume, and one
percent from foreign exchange. The China business continued to recover
market share, and distributors' inventory was restored to normal levels
by year-end. Excluding China/Hong Kong, the other markets of the
Asia/Latin America segment had organic constant dollar sales growth in
the mid teens, and including the favorable contribution from our
Argentine acquisition, grew over 20 percent. EBIT for the Asia/Latin
America segment totaled $187.4 million, up four percent compared to
$179.7 million for the year-ago quarter. The EBIT increase was driven by
strong sales growth, partially offset by higher advertising and
promotion investments and lower gross margins from an unfavorable
country mix.
The North America/Europe segment reported sales of $317.6 million for
the fourth quarter of 2012, up four percent from $306.5 million in 2011.
Sales benefited five percent from price offset by a one percent decline
from volume. Higher sales in the United States from gains in non-WIC
market share were partially offset by continued category decline from
higher breastfeeding rates and the transition of several smaller WIC
contracts. Sales growth in the United States was partially offset by
lower sales in Europe as we refocused the business on higher margin
specialty infant formula products. EBIT totaled $88.9 million, up 39%
compared to $64.1 million in the fourth quarter a year ago. The increase
was the result of higher sales, improved gross margins from lower U.S.
dairy costs and lower operating expenses.
Corporate and Other expenses declined primarily from the timing of
pension settlement expense, which was initially triggered in the second
quarter of 2012 compared to the fourth quarter of 2011.
Full-Year 2012 Results
For the year ended December 31, 2012, sales totaled $3,901.3 million, up
six percent from $3,677.0 million a year ago. Sales growth increased six
percent from price and one percent from volume, reduced by one percent
from foreign exchange.
Gross margin was down 110 basis points in 2012 versus the prior year
from higher dairy and other commodity costs, mainly in the North
America/Europe segment. Manufacturing variances were also unfavorable,
primarily from lower production volume in the North America/Europe
segment.
EBIT for 2012 totaled $870.0 million, up from $774.1 million a year
earlier. The EBIT increase was primarily driven by sales growth. In
addition, general and administrative expenses were lower, driven by the
reduction in IT and IPO-related separation costs, the elimination of
duplicate shared service costs in 2011, and lower performance-based
compensation expense. These factors were partially offset by lower gross
margins, higher demand-generation investments and increased pension
settlement expense.
The effective tax rate for 2012 was 23.9 percent versus 28.1 percent a
year ago. The lower effective tax rate was primarily attributable to
favorable adjustments associated with prior years' tax filings, changes
in management's assertion that certain current and prior years' foreign
earnings and profits are permanently invested abroad, and changes in the
geographic earnings mix. The benefit from prior years' tax items was
$0.07 per diluted share.
Net earnings attributable to shareholders for 2012 totaled $604.5
million, or $2.95 per diluted share, compared with $508.5 million, or
$2.47 per diluted share, for the prior-year period.
On a non-GAAP basis, which excludes specified items, net earnings
attributable to shareholders totaled $630.1 million, or $3.08 per
diluted share, in 2012, compared to $573.1 million, or $2.79 per diluted
share, in 2011.
Full-Year 2012 Segment Results
Sales in the Asia/Latin America segment were $2,719.5 million, up 11
percent from $2,447.2 million in 2011. Sales increased seven percent
from price and five percent from volume, offset by a one percent decline
from foreign exchange. The majority of the markets in the segment
delivered double-digit constant dollar sales growth from higher pricing
and overall category growth, enhanced by share gains in key markets.
Constant dollar sales in China/Hong Kong grew five percent for the full
year. In China, the company made progress in recovering market share in
the second half of 2012, following a decline in the first half of the
year. Sales growth for the segment also benefited from the Argentine
acquisition in March 2012, which contributed two percent to total
company full-year growth. EBIT for the segment totaled $901.3 million,
up 11 percent compared to $811.6 million in 2011. The EBIT increase was
primarily related to sales growth, partially offset by increased
demand-generation investments.
The North America/Europe segment reported sales of $1,181.8 million for
2012, down four percent from $1,229.8 million in 2011. Sales declined
seven percent from volume and one percent from foreign exchange,
partially offset by a four percent increase from price. The volume
decline was primarily in the United States and attributed to lower
market share, category consumption and births. Total market share was
lower in comparison to the prior year, when the company benefited from a
competitor's recall, as well as the 2012 impact of the unfounded media
reports in December 2011 of alleged product contamination. Significant
progress was made in recovering market share in the fourth quarter of
2012. EBIT totaled $246.1 million, compared to $308.4 million in 2011.
The decrease was primarily due to lower sales and gross margins,
partially offset by lower operating expenses. The gross margin decline
resulted from higher commodity costs and lower production volumes.
Corporate and Other expenses decreased from lower IT and IPO-related
separation costs, lower performance-based compensation expense and the
elimination of duplicate costs from the overlap in shared services
providers incurred in 2011 during the SAP implementation project. These
factors were partially offset by higher pension settlement expense.
Outlook for 2013
“We expect to continue to deliver strong sales growth through 2013,” Mr.
Golsby said. “We are initiating non-GAAP EPS guidance in the range of
$3.22 to $3.30, up from the $3.08 per share we delivered in 2012. Annual
constant dollar sales growth from ongoing operations are expected to be
in the range of 7 percent to 8 percent and will be reduced by 1 percent
as we exit several low margin non-core businesses. Therefore, key
assumptions underlying non-GAAP guidance include an expected sales
increase of 6 percent to 7 percent excluding the effect of foreign
exchange. Improved gross margins will help fund continued increases in
demand-generation investments. The 2013 non-GAAP effective tax rate is
expected to be about 25 percent, slightly higher than the 24.3 percent
reported in 2012, which included prior years' tax benefits.”
Conference Call Scheduled
Mead Johnson will host a conference call at 8:30 a.m. CST today, during
which company executives will review fourth quarter and full year
financial results and respond to questions from analysts and investors.
The call will be broadcast over the Internet at meadjohnson.com.
To listen to the call, visit the website at least 15 minutes before the
call and click on the “Investors” tab. Security analysts and investors
wishing to participate by telephone should call (866) 362-4829, pass
code: Mead Johnson. Callers outside of North America should call
+1-617-597-5346 to be connected. A replay of the conference call will be
available through midnight CST Thursday, February 7, 2013, by calling
(888) 286-8010 or outside of North America +1-617-801-6888, pass code:
63045245. 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
statements, which are identified by words such as “expects,” “intends”
and “believes,” involve certain 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 adverse effect of commodity
costs; (4) increased competition from branded, private label, store and
economy-branded products; (5) the effect of an economic downturn on
consumers' purchasing behavior and customers' ability to pay for
product; (6) inventory reductions by customers; (7) the adverse effect
of changes in foreign currency exchange rates; (8) the effect of changes
in economic, political and social conditions in the markets where we
operate; (9) legislative, regulatory or judicial action that may
adversely affect the company's ability to advertise its products or
maintain product margins; (10) the possibility of changes in the Women,
Infant and Children (WIC) program, or participation in WIC; and (11) the
ability to develop and market new, innovative products. For additional
information on these and other factors, see the risk factors identified
in the company's periodic reports, including the annual report on Form
10-K for 2011, quarterly reports on Form 10-Q and current reports on
Form 8-K, filed with, or furnished to, the Securities and Exchange
Commission, available upon request or at meadjohnson.com.
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 meadjohnson.com.
|
|
|
MEAD JOHNSON NUTRITION COMPANY
|
|
CONSOLIDATED STATEMENTS OF EARNINGS
|
|
(Dollars and shares in millions, except per share data)
|
|
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
Year Ended December 31,
|
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
NET SALES
|
|
$
|
981.1
|
|
|
$
|
911.3
|
|
|
$
|
3,901.3
|
|
|
$
|
3,677.0
|
|
Cost of Products Sold
|
|
382.0
|
|
|
354.9
|
|
|
1,485.3
|
|
|
1,362.3
|
|
GROSS PROFIT
|
|
599.1
|
|
|
556.4
|
|
|
2,416.0
|
|
|
2,314.7
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
Selling, General and Administrative
|
|
235.6
|
|
|
237.3
|
|
|
877.8
|
|
|
926.8
|
|
Advertising and Promotion
|
|
139.5
|
|
|
128.7
|
|
|
552.8
|
|
|
501.7
|
|
Research and Development
|
|
27.8
|
|
|
28.1
|
|
|
95.4
|
|
|
92.5
|
|
Other Expenses
|
|
6.5
|
|
|
16.2
|
|
|
20.0
|
|
|
19.6
|
|
EARNINGS BEFORE INTEREST AND INCOME TAXES
|
|
189.7
|
|
|
146.1
|
|
|
870.0
|
|
|
774.1
|
|
|
|
|
|
|
|
|
|
|
|
Interest Expense
|
|
16.0
|
|
|
13.8
|
|
|
65.0
|
|
|
52.2
|
|
EARNINGS BEFORE INCOME TAXES
|
|
173.7
|
|
|
132.3
|
|
|
805.0
|
|
|
721.9
|
|
|
|
|
|
|
|
|
|
|
|
Provision for Income Taxes
|
|
41.4
|
|
|
43.0
|
|
|
192.6
|
|
|
202.9
|
|
NET EARNINGS
|
|
132.3
|
|
|
89.3
|
|
|
612.4
|
|
|
519.0
|
|
Less Net Earnings Attributable to Noncontrolling Interests
|
|
(1.9
|
)
|
|
3.7
|
|
|
7.9
|
|
|
10.5
|
|
NET EARNINGS ATTRIBUTABLE TO SHAREHOLDERS
|
|
$
|
134.2
|
|
|
$
|
85.6
|
|
|
$
|
604.5
|
|
|
$
|
508.5
|
|
Earnings per Share—Basic
|
|
|
|
|
|
|
|
|
|
Net Earnings Attributable to Shareholders
|
|
$
|
0.66
|
|
|
$
|
0.42
|
|
|
$
|
2.96
|
|
|
$
|
2.48
|
|
Earnings per Share—Diluted
|
|
|
|
|
|
|
|
|
|
Net Earnings Attributable to Shareholders
|
|
$
|
0.66
|
|
|
$
|
0.42
|
|
|
$
|
2.95
|
|
|
$
|
2.47
|
|
Weighted-average Shares
|
|
202.9
|
|
|
203.8
|
|
|
203.6
|
|
|
204.3
|
|
Dividends Declared per Share
|
|
$
|
0.30
|
|
|
$
|
0.26
|
|
|
$
|
1.20
|
|
|
$
|
1.04
|
|
|
|
MEAD JOHNSON NUTRITION COMPANY
|
|
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
|
|
(Dollars in millions)
|
|
(UNAUDITED)
|
|
|
|
|
|
|
|
December 31,
|
|
|
|
2012
|
|
2011
|
|
NET EARNINGS
|
|
$
|
612.4
|
|
|
$
|
519.0
|
|
|
|
|
|
|
|
|
OTHER COMPREHENSIVE INCOME/(LOSS)
|
|
|
|
|
|
Foreign Currency Translation Adjustments
|
|
|
|
|
|
Translation Adjustments
|
|
(8.4
|
)
|
|
(27.2
|
)
|
|
Tax Benefit/(Expense)
|
|
(13.0
|
)
|
|
4.7
|
|
|
Deferred Gains/(Losses) on Derivatives Qualifying as Hedges
|
|
|
|
|
|
Deferred Gains/(Losses) on Derivatives Qualifying as Hedges for the
Period
|
|
(12.7
|
)
|
|
5.8
|
|
|
Reclassification Adjustment for (Gains)/Losses Included in Net
Earnings
|
|
0.8
|
|
|
2.9
|
|
|
Tax Benefit/(Expense)
|
|
3.5
|
|
|
(2.6
|
)
|
|
Pension and Other Post-Retirement Benefits
|
|
|
|
|
|
Deferred Gains on Pension and Other Post-Retirement Benefits
|
|
(58.5
|
)
|
|
(90.7
|
)
|
|
Reclassification Adjustment for (Gains)/Losses Included in Net
Earnings
|
|
23.8
|
|
|
14.6
|
|
|
Tax Expense
|
|
10.6
|
|
|
24.1
|
|
|
OTHER COMPREHENSIVE INCOME/(LOSS)
|
|
(53.9
|
)
|
|
(68.4
|
)
|
|
|
|
|
|
|
|
COMPREHENSIVE INCOME
|
|
558.5
|
|
|
450.6
|
|
|
|
|
|
|
|
|
Less Comprehensive Income Attributable to Noncontrolling Interests
|
|
7.9
|
|
|
10.6
|
|
|
|
|
|
|
|
|
COMPREHENSIVE INCOME ATTRIBUTABLE TO SHAREHOLDERS
|
|
$
|
550.6
|
|
|
$
|
440.0
|
|
|
|
|
MEAD JOHNSON NUTRITION COMPANY
|
|
CONSOLIDATED BALANCE SHEETS
|
|
(Dollars and shares in millions, except per share data)
|
|
(UNAUDITED)
|
|
|
|
|
|
|
|
December 31,
|
|
|
|
2012
|
|
2011
|
|
ASSETS
|
|
|
|
|
|
CURRENT ASSETS:
|
|
|
|
|
|
Cash and Cash Equivalents
|
|
$
|
1,042.1
|
|
|
$
|
840.3
|
|
|
Receivables – net of allowances of $7.6 and $6.3, respectively
|
|
364.6
|
|
|
352.6
|
|
|
Inventories (1)
|
|
435.9
|
|
|
534.9
|
|
|
Deferred Income Taxes – net of valuation allowance
|
|
86.4
|
|
|
118.5
|
|
|
Income Taxes Receivable
|
|
26.0
|
|
|
3.3
|
|
|
Prepaid Expenses and Other Assets
|
|
60.0
|
|
|
40.1
|
|
|
Total Current Assets
|
|
2,015.0
|
|
|
1,889.7
|
|
|
Property, Plant, and Equipment – net
|
|
689.9
|
|
|
576.1
|
|
|
Goodwill
|
|
270.6
|
|
|
117.5
|
|
|
Other Intangible Assets – net
|
|
129.9
|
|
|
91.6
|
|
|
Deferred Income Taxes – net of valuation allowance
|
|
24.5
|
|
|
16.5
|
|
|
Other Assets
|
|
128.3
|
|
|
75.4
|
|
|
TOTAL
|
|
$
|
3,258.2
|
|
|
$
|
2,766.8
|
|
|
LIABILITIES AND EQUITY/(DEFICIT)
|
|
|
|
|
|
CURRENT LIABILITIES:
|
|
|
|
|
|
Short-term Borrowings
|
|
$
|
161.0
|
|
|
$
|
—
|
|
|
Accounts Payable
|
|
508.5
|
|
|
488.1
|
|
|
Dividends Payable
|
|
61.3
|
|
|
53.3
|
|
|
Note Payable
|
|
26.0
|
|
|
—
|
|
|
Accrued Expenses
|
|
220.4
|
|
|
229.0
|
|
|
Accrued Rebates and Returns
|
|
314.8
|
|
|
300.1
|
|
|
Deferred Income – current
|
|
36.1
|
|
|
47.0
|
|
|
Income Taxes – payable and deferred
|
|
41.8
|
|
|
82.6
|
|
|
Total Current Liabilities
|
|
1,369.9
|
|
|
1,200.1
|
|
|
Long-Term Debt
|
|
1,523.2
|
|
|
1,531.9
|
|
|
Deferred Income Taxes – noncurrent
|
|
15.9
|
|
|
5.2
|
|
|
Pension, Post-Retirement and Post Employment Liabilities
|
|
188.8
|
|
|
157.2
|
|
|
Other Liabilities
|
|
95.1
|
|
|
40.4
|
|
|
Total Liabilities
|
|
3,192.9
|
|
|
2,934.8
|
|
|
COMMITMENTS AND CONTINGENCIES
|
|
|
|
|
|
|
|
|
|
|
|
REDEEMABLE NONCONTROLLING INTEREST
|
|
36.3
|
|
|
—
|
|
|
|
|
|
|
|
|
EQUITY/(DEFICIT)
|
|
|
|
|
|
Shareholders’ Equity
|
|
|
|
|
|
Common Stock, $0.01 par value: 3,000 authorized, 206.0 and 205.1
issued, respectively
|
|
2.1
|
|
|
2.1
|
|
|
Additional Paid-in/(Distributed) Capital
|
|
(676.6
|
)
|
|
(728.4
|
)
|
|
Retained Earnings
|
|
1,124.8
|
|
|
770.0
|
|
|
Treasury Stock – at cost
|
|
(244.6
|
)
|
|
(89.7
|
)
|
|
Accumulated Other Comprehensive Loss
|
|
(187.0
|
)
|
|
(133.1
|
)
|
|
Total Shareholders’ Equity/(Deficit)
|
|
18.7
|
|
|
(179.1
|
)
|
|
Noncontrolling Interests
|
|
10.3
|
|
|
11.1
|
|
|
Total Equity/(Deficit)
|
|
29.0
|
|
|
(168.0
|
)
|
|
TOTAL
|
|
$
|
3,258.2
|
|
|
$
|
2,766.8
|
|
(1) For the year ended December 31, 2011, inventories
included $77 million due to a higher level of advanced purchases for
select dairy inputs
|
|
|
MEAD JOHNSON NUTRITION COMPANY
|
|
CONSOLIDATED STATEMENTS OF EQUITY/(DEFICIT) AND REDEEMABLE
NONCONTROLLING INTEREST
|
|
(Dollars in millions)
|
|
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
Redeemable
|
|
|
|
|
|
Paid-in
|
|
|
|
|
|
Other
|
|
Non-
|
|
Total
|
|
Non-
|
|
|
|
Common
|
|
(Distributed)
|
|
Retained
|
|
Treasury
|
|
Comprehensive
|
|
controlling
|
|
Equity/
|
|
controlling
|
|
|
|
Stock
|
|
Capital
|
|
Earnings
|
|
Stock
|
|
Loss
|
|
Interests
|
|
(Deficit)
|
|
Interest
|
|
Balance as of December 31, 2010
|
|
$
|
2.0
|
|
|
$
|
(775.6
|
)
|
|
$
|
474.0
|
|
|
$
|
(3.2
|
)
|
|
$
|
(64.6
|
)
|
|
$
|
9.1
|
|
|
$
|
(358.3
|
)
|
|
$
|
—
|
|
Stock-based Compensation Awards (includes income tax benefits of
$2.8)
|
|
0.1
|
|
|
47.2
|
|
|
|
|
(4.9
|
)
|
|
|
|
|
|
42.4
|
|
|
|
|
Treasury Stock Acquired
|
|
|
|
|
|
|
|
(81.6
|
)
|
|
|
|
|
|
(81.6
|
)
|
|
|
|
Distributions to Noncontrolling Interests
|
|
|
|
|
|
|
|
|
|
|
|
(8.6
|
)
|
|
(8.6
|
)
|
|
|
|
Cash Dividends Declared
|
|
|
|
|
|
(212.5
|
)
|
|
|
|
|
|
|
|
(212.5
|
)
|
|
|
|
Net Earnings
|
|
|
|
|
|
508.5
|
|
|
|
|
|
|
10.5
|
|
|
519.0
|
|
|
|
|
Other Comprehensive Income (Loss)
|
|
|
|
|
|
|
|
|
|
(68.5
|
)
|
|
0.1
|
|
|
(68.4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of December 31, 2011
|
|
$
|
2.1
|
|
|
$
|
(728.4
|
)
|
|
$
|
770.0
|
|
|
$
|
(89.7
|
)
|
|
$
|
(133.1
|
)
|
|
$
|
11.1
|
|
|
$
|
(168.0
|
)
|
|
$
|
—
|
|
Stock-based Compensation Awards (includes income tax benefits of
$11.8)
|
|
|
|
51.8
|
|
|
|
|
(15.2
|
)
|
|
|
|
|
|
36.6
|
|
|
|
|
Treasury Stock Acquired
|
|
|
|
|
|
|
|
(139.7
|
)
|
|
|
|
|
|
(139.7
|
)
|
|
|
|
Acquisition
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
30.2
|
|
Distributions to Noncontrolling Interests
|
|
|
|
|
|
|
|
|
|
|
|
(7.6
|
)
|
|
(7.6
|
)
|
|
|
|
Cash Dividends Declared
|
|
|
|
|
|
(244.7
|
)
|
|
|
|
|
|
|
|
(244.7
|
)
|
|
|
|
Net Earnings
|
|
|
|
|
|
604.5
|
|
|
|
|
|
|
6.8
|
|
|
611.3
|
|
|
1.1
|
|
Redeemable Noncontrolling Interest Accretion
|
|
|
|
|
|
(5.0
|
)
|
|
|
|
|
|
|
|
(5.0
|
)
|
|
5.0
|
|
Other Comprehensive Income (Loss)
|
|
|
|
|
|
|
|
|
|
(53.9
|
)
|
|
—
|
|
|
(53.9
|
)
|
|
|
|
Balance as of December 31, 2012
|
|
$
|
2.1
|
|
|
$
|
(676.6
|
)
|
|
$
|
1,124.8
|
|
|
$
|
(244.6
|
)
|
|
$
|
(187.0
|
)
|
|
$
|
10.3
|
|
|
$
|
29.0
|
|
|
$
|
36.3
|
|
|
|
MEAD JOHNSON NUTRITION COMPANY CONSOLIDATED STATEMENTS
OF CASH FLOWS
|
|
(Dollars in millions)
|
|
(UNAUDITED)
|
|
|
|
|
|
|
|
December 31,
|
|
|
|
2012
|
|
2011
|
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
Net Earnings
|
|
$
|
612.4
|
|
|
$
|
519.0
|
|
|
Adjustments to Reconcile Net Earnings to Net Cash Provided by
Operating Activities:
|
|
|
|
|
|
Depreciation and Amortization
|
|
76.9
|
|
|
75.3
|
|
|
Stock-Based Compensation Expense
|
|
32.2
|
|
|
39.9
|
|
|
Deferred Income Tax
|
|
17.1
|
|
|
(33.3
|
)
|
|
Gain on Sale of Intangible Assets
|
|
(6.5
|
)
|
|
—
|
|
|
Exchange Loss from Devaluation
|
|
—
|
|
|
—
|
|
|
Other
|
|
1.8
|
|
|
2.3
|
|
|
Changes in Assets and Liabilities
|
|
|
|
|
|
Receivables
|
|
(8.5
|
)
|
|
(7.9
|
)
|
|
Inventories
|
|
109.8
|
|
|
(183.3
|
)
|
|
Accounts Payable
|
|
(30.9
|
)
|
|
114.7
|
|
|
Accrued Expenses, Rebates and Returns
|
|
(6.3
|
)
|
|
50.0
|
|
|
Income Taxes Payable
|
|
(62.2
|
)
|
|
53.2
|
|
|
Other Assets and Liabilities
|
|
(14.8
|
)
|
|
12.6
|
|
|
Pension and Other Post Retirement Benefits Contributions
|
|
(28.3
|
)
|
|
(9.7
|
)
|
|
Net Cash Provided by Operating Activities
|
|
692.7
|
|
|
632.8
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
Payments for Capital Expenditures
|
|
(124.4
|
)
|
|
(109.5
|
)
|
|
Proceeds from Sale of Property, Plant and Equipment
|
|
1.5
|
|
|
1.6
|
|
|
Proceeds from Sale of Intangible Assets
|
|
6.5
|
|
|
—
|
|
|
Investment in Other Companies
|
|
(6.3
|
)
|
|
(4.7
|
)
|
|
Payment for Acquisition
|
|
(106.1
|
)
|
|
—
|
|
|
Net Cash Used in Investing Activities
|
|
(228.8
|
)
|
|
(112.6
|
)
|
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
Proceeds from Short-term Borrowings
|
|
391.2
|
|
|
72.0
|
|
|
Repayments of Short-term Borrowings
|
|
(230.2
|
)
|
|
(73.2
|
)
|
|
Payment for Capital Lease Termination
|
|
—
|
|
|
—
|
|
|
Repayments of Notes Payable
|
|
(52.6
|
)
|
|
—
|
|
|
Payments of Dividends
|
|
(236.7
|
)
|
|
(205.7
|
)
|
|
Stock-based-compensation-related Proceeds and Excess Tax Benefits
|
|
23.3
|
|
|
4.5
|
|
|
Purchases of Treasury Stock
|
|
(154.9
|
)
|
|
(87.7
|
)
|
|
Proceeds from Termination of Interest Rate Swaps
|
|
—
|
|
|
23.5
|
|
|
Proceeds from Promissory Note
|
|
—
|
|
|
—
|
|
|
Distributions to Noncontrolling Interests
|
|
(7.6
|
)
|
|
(8.6
|
)
|
|
Net Cash Used in Financing Activities
|
|
(267.5
|
)
|
|
(275.2
|
)
|
|
Effects of Changes in Exchange Rates on Cash and Cash Equivalents
|
|
5.4
|
|
|
(0.3
|
)
|
|
|
|
|
|
|
|
|
|
NET INCREASE IN CASH AND CASH EQUIVALENTS
|
|
201.8
|
|
|
244.7
|
|
|
CASH AND CASH EQUIVALENTS:
|
|
|
|
|
|
Beginning of Period
|
|
840.3
|
|
|
595.6
|
|
|
End of Period
|
|
$
|
1,042.1
|
|
|
$
|
840.3
|
|
|
|
|
MEAD JOHNSON NUTRITION COMPANY
|
|
SUPPLEMENTAL FINANCIAL INFORMATION
|
|
(Dollars in millions)
|
|
(UNAUDITED)
|
|
|
|
The following chart has been restated for a segment reorganization
implemented during the fourth quarter of 2012. See additional
information on page 14 of this press release.
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
|
|
% Change Due to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
|
|
Net Sales
|
|
2012
|
|
2011
|
|
% Change
|
|
Volume
|
|
Price
|
|
Exchange
|
|
Asia/Latin America
|
|
$
|
663.5
|
|
|
$
|
604.8
|
|
|
10
|
%
|
|
3
|
%
|
|
6
|
%
|
|
1
|
%
|
|
North America/Europe
|
|
317.6
|
|
|
306.5
|
|
|
4
|
%
|
|
(1
|
)%
|
|
5
|
%
|
|
—
|
|
|
Net Sales
|
|
$
|
981.1
|
|
|
$
|
911.3
|
|
|
8
|
%
|
|
2
|
%
|
|
5
|
%
|
|
1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Before Interest and Income Taxes
|
|
2012
|
|
2011
|
|
% Change
|
|
|
|
|
|
|
|
Asia/Latin America
|
|
$
|
187.4
|
|
|
$
|
179.7
|
|
|
4
|
%
|
|
|
|
|
|
|
|
North America/Europe
|
|
88.9
|
|
|
64.1
|
|
|
39
|
%
|
|
|
|
|
|
|
|
Corporate and Other
|
|
(86.6
|
)
|
|
(97.7
|
)
|
|
11
|
%
|
|
|
|
|
|
|
|
EBIT
|
|
$
|
189.7
|
|
|
$
|
146.1
|
|
|
30
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|
|
% Change Due to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
|
|
Net Sales
|
|
2012
|
|
2011
|
|
% Change
|
|
Volume
|
|
Price
|
|
Exchange
|
|
Asia/Latin America
|
|
$
|
2,719.5
|
|
|
$
|
2,447.2
|
|
|
11
|
%
|
|
5
|
%
|
|
7
|
%
|
|
(1
|
)%
|
|
North America/Europe
|
|
1,181.8
|
|
|
1,229.8
|
|
|
(4
|
)%
|
|
(7
|
)%
|
|
4
|
%
|
|
(1
|
)%
|
|
Net Sales
|
|
$
|
3,901.3
|
|
|
$
|
3,677.0
|
|
|
6
|
%
|
|
1
|
%
|
|
6
|
%
|
|
(1
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|
|
|
|
|
|
|
|
Earnings Before Interest and Income Taxes
|
|
2012
|
|
2011
|
|
% Change
|
|
|
|
|
|
|
|
Asia/Latin America
|
|
$
|
901.3
|
|
|
$
|
811.6
|
|
|
11
|
%
|
|
|
|
|
|
|
|
North America/Europe
|
|
246.1
|
|
|
308.4
|
|
|
(20
|
)%
|
|
|
|
|
|
|
|
Corporate and Other
|
|
(277.4
|
)
|
|
(345.9
|
)
|
|
20
|
%
|
|
|
|
|
|
|
|
EBIT
|
|
$
|
870.0
|
|
|
$
|
774.1
|
|
|
12
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Financial Measures
This news release contains non-GAAP financial measures, including
non-GAAP EBIT, earnings and earnings per share information. The items
included in GAAP measures, but excluded for the purpose of determining
non-GAAP EBIT, earnings and earnings per share, are IT separation and
other costs (Specified Items). In addition, other items include the tax
impact on Specified Items. Non-GAAP EBIT, earnings and earnings per
share information adjusted for these items is an indication of the
company's underlying operating results and 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 GAAP to non-GAAP disclosure follow:
|
|
|
MEAD JOHNSON NUTRITION COMPANY
|
|
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
|
|
(Dollars in millions, except per share data)
|
|
(UNAUDITED)
|
|
|
|
FOR THE THREE MONTHS ENDED DECEMBER 31, 2012 AND 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Before Interest
|
|
|
Net Earnings Attributable
|
|
|
Earnings per Common
|
|
|
|
|
|
|
|
|
|
|
and Income Taxes
|
|
|
to Shareholders
|
|
|
Share - Diluted
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
2011
|
|
|
2012
|
|
2011
|
|
|
2012
|
|
2011
|
|
GAAP Results
|
|
$
|
189.7
|
|
|
$
|
146.1
|
|
|
|
$
|
134.2
|
|
|
$
|
85.6
|
|
|
|
$
|
0.66
|
|
|
$
|
0.42
|
|
|
Specified Items: (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IT and other separation costs (2)
|
|
7.9
|
|
|
13.5
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on sale of certain non-core intangible assets (3)
|
|
(1.0
|
)
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance and other costs (3)
|
|
11.5
|
|
|
11.4
|
|
|
|
|
|
|
|
|
|
|
|
|
Legal, settlements and related costs (2,3)
|
|
(0.3
|
)
|
|
3.2
|
|
|
|
|
|
|
|
|
|
|
|
|
Specified Items before income taxes
|
|
18.1
|
|
|
28.1
|
|
|
|
18.1
|
|
|
28.1
|
|
|
|
0.09
|
|
|
0.14
|
|
|
Income tax impact on items above
|
|
|
|
|
|
|
(5.6
|
)
|
|
(7.2
|
)
|
|
|
(0.03
|
)
|
|
(0.04
|
)
|
|
Non-GAAP Results
|
|
$
|
207.8
|
|
|
$
|
174.2
|
|
|
|
$
|
146.7
|
|
|
$
|
106.5
|
|
|
|
$
|
0.72
|
|
|
$
|
0.52
|
|
|
|
|
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2012 AND 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Before Interest
|
|
|
Net Earnings Attributable
|
|
|
Earnings per Common
|
|
|
|
|
|
|
|
|
|
|
and Income Taxes
|
|
|
to Shareholders
|
|
|
Share - Diluted
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
2011
|
|
|
2012
|
|
2011
|
|
|
2012
|
|
2011
|
|
GAAP Results
|
|
$
|
870.0
|
|
|
$
|
774.1
|
|
|
|
$
|
604.5
|
|
|
$
|
508.5
|
|
|
|
$
|
2.95
|
|
|
$
|
2.47
|
|
|
Specified Items: (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IT and other separation costs (2)
|
|
19.9
|
|
|
74.7
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on sale of certain non-core intangible assets (3)
|
|
(6.5
|
)
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance and other costs (3)
|
|
21.1
|
|
|
11.6
|
|
|
|
|
|
|
|
|
|
|
|
|
Legal, settlements and related costs (2,3)
|
|
2.8
|
|
|
7.6
|
|
|
|
|
|
|
|
|
|
|
|
|
Specified Items before income taxes
|
|
37.3
|
|
|
93.9
|
|
|
|
37.3
|
|
|
93.9
|
|
|
|
0.18
|
|
|
0.46
|
|
|
Income tax impact on items above
|
|
|
|
|
|
|
(11.7
|
)
|
|
(29.3
|
)
|
|
|
(0.05
|
)
|
|
(0.14
|
)
|
|
Non-GAAP Results
|
|
$
|
907.3
|
|
|
$
|
868.0
|
|
|
|
$
|
630.1
|
|
|
$
|
573.1
|
|
|
|
$
|
3.08
|
|
|
$
|
2.79
|
|
|
(1) All Specified Items are included in the
Corporate and Other segment
|
|
(2) Included in Selling, General and
Administrative expenses
|
|
(3) Included in Other Expenses/(Income)-net
|
|
|
Segment Reorganization
During the fourth quarter of 2012, the company implemented a change in
its organizational structure involving the transfer of the Puerto Rican
operations from the North America to the Latin America business. This
change did not impact Europe or Asia and did not have a material impact
on the assets of North America or Latin America. As a result of
implementing this change in our operating structure, the company will
report the results of operations under this new structure beginning with
the fourth quarter of 2012. The following unaudited financial schedule
provides information regarding net sales and earnings before interest
and income taxes for 2010 and 2011, each of the four quarters of 2011,
and each of the first three quarters of 2012 on the new reporting basis.
|
|
|
MEAD JOHNSON NUTRITION COMPANY
|
|
SUPPLEMENTAL FINANCIAL INFORMATION
|
|
(Dollars in millions)
|
|
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
2011
|
|
2010
|
|
|
|
|
1Q
|
|
2Q
|
|
3Q
|
|
1Q
|
|
2Q
|
|
3Q
|
|
4Q
|
|
Total Year
|
|
Total Year
|
|
Net Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Original Reportable Segment Structure:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia/Latin America
|
|
$
|
701.3
|
|
|
$
|
695.2
|
|
|
$
|
639.9
|
|
|
$
|
576.9
|
|
|
$
|
611.6
|
|
|
$
|
636.1
|
|
|
$
|
598.6
|
|
|
$
|
2,423.2
|
|
|
$
|
1,927.1
|
|
|
|
North America / Europe
|
|
285.3
|
|
|
317.1
|
|
|
281.4
|
|
|
322.9
|
|
|
320.4
|
|
|
297.8
|
|
|
312.7
|
|
|
1,253.8
|
|
|
1,214.5
|
|
|
Total
|
|
$
|
986.6
|
|
|
$
|
1,012.3
|
|
|
$
|
921.3
|
|
|
$
|
899.8
|
|
|
$
|
932.0
|
|
|
$
|
933.9
|
|
|
$
|
911.3
|
|
|
$
|
3,677.0
|
|
|
$
|
3,141.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New Reportable Segment Structure:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia/Latin America
|
|
$
|
707.3
|
|
|
$
|
702.0
|
|
|
$
|
646.7
|
|
|
$
|
582.5
|
|
|
$
|
617.1
|
|
|
$
|
642.8
|
|
|
$
|
604.8
|
|
|
$
|
2,447.2
|
|
|
$
|
1,951.0
|
|
|
|
North America/Europe
|
|
279.3
|
|
|
310.3
|
|
|
274.6
|
|
|
317.3
|
|
|
314.9
|
|
|
291.1
|
|
|
306.5
|
|
|
1,229.8
|
|
|
1,190.6
|
|
|
Total
|
|
$
|
986.6
|
|
|
$
|
1,012.3
|
|
|
$
|
921.3
|
|
|
$
|
899.8
|
|
|
$
|
932.0
|
|
|
$
|
933.9
|
|
|
$
|
911.3
|
|
|
$
|
3,677.0
|
|
|
$
|
3,141.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Before Interest and Taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Original Reportable Segment Structure:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia/Latin America
|
|
$
|
279.0
|
|
|
$
|
237.5
|
|
|
$
|
190.7
|
|
|
$
|
216.8
|
|
|
$
|
209.8
|
|
|
$
|
198.4
|
|
|
$
|
177.9
|
|
|
$
|
802.9
|
|
|
$
|
646.1
|
|
|
|
North America/Europe
|
|
33.7
|
|
|
74.6
|
|
|
55.6
|
|
|
92.9
|
|
|
86.4
|
|
|
71.9
|
|
|
65.9
|
|
|
317.1
|
|
|
357.7
|
|
|
|
Corporate and Other
|
|
(63.9
|
)
|
|
(63.8
|
)
|
|
(63.1
|
)
|
|
(87.1
|
)
|
|
(92.5
|
)
|
|
(68.6
|
)
|
|
(97.7
|
)
|
|
(345.9
|
)
|
|
(320.9
|
)
|
|
Total
|
|
$
|
248.8
|
|
|
$
|
248.3
|
|
|
$
|
183.2
|
|
|
$
|
222.6
|
|
|
$
|
203.7
|
|
|
$
|
201.7
|
|
|
$
|
146.1
|
|
|
$
|
774.1
|
|
|
$
|
682.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New Reportable Segment Structure:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia/Latin America
|
|
$
|
280.9
|
|
|
$
|
239.9
|
|
|
$
|
193.1
|
|
|
$
|
219.0
|
|
|
$
|
211.5
|
|
|
$
|
201.4
|
|
|
$
|
179.7
|
|
|
$
|
811.6
|
|
|
$
|
656.3
|
|
|
|
North America/Europe
|
|
31.8
|
|
|
72.2
|
|
|
53.2
|
|
|
90.7
|
|
|
84.7
|
|
|
68.9
|
|
|
64.1
|
|
|
308.4
|
|
|
347.5
|
|
|
|
Corporate and Other
|
|
(63.9
|
)
|
|
(63.8
|
)
|
|
(63.1
|
)
|
|
(87.1
|
)
|
|
(92.5
|
)
|
|
(68.6
|
)
|
|
(97.7
|
)
|
|
(345.9
|
)
|
|
(320.9
|
)
|
|
Total
|
|
$
|
248.8
|
|
|
$
|
248.3
|
|
|
$
|
183.2
|
|
|
$
|
222.6
|
|
|
$
|
203.7
|
|
|
$
|
201.7
|
|
|
$
|
146.1
|
|
|
$
|
774.1
|
|
|
$
|
682.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Source: Mead Johnson Nutrition Company
Mead Johnson Nutrition Company
Investors:
Kathy
MacDonald, (847) 832-2182
kathy.macdonald@mjn.com
or
Media:
Christopher
Perille, (847) 832-2178
chris.perille@mjn.com