Mead Johnson Reports Strong Second Quarter Results; Raises Full-Year 2009 Guidance
(1) Mead Johnson, formerly a wholly owned subsidiary of Bristol-Myers Squibb Company, completed its initial public offering (IPO) in February 2009. Results for 2008 and 2009 have been adjusted for the factors affecting comparability due to the IPO and other specified items and are, therefore, adjusted non-GAAP (non-GAAP) financial measures. See “Factors Affecting Comparability – Adjusted Non-GAAP Financial Measures” and the detailed reconciliation of GAAP and non-GAAP results included in this release. |
“We continue to see the success of our global growth strategies as
evidenced by our strong results for the second quarter,” said Mead
Johnson Chief Executive Officer Stephen W. Golsby. “Our sales
performance in constant dollars reflects continued double-digit growth
in
“Our cash balance at the end of the quarter stood at $577 million, up from $359 million at the end of March,” Golsby added. “The increase was driven not only by our strong earnings, but also by good management of working capital. Our cash balance was reduced by $61 million to pay our first dividend earlier this week. Our liquidity remains very strong and provides us with significant financial flexibility to execute our strategies.”
Second Quarter GAAP Results
Net sales for the second quarter of 2009 totaled $719.3 million, down
from $728.6 million a year-ago. Earnings before interest and income
taxes (EBIT) increased to $218.1 million, up from $187.9 million a year
earlier. Total operating expenses decreased to $265.1 million, down from
$268.4 million. Results for the second quarter of 2009 include an $11.9
million gain from the sale of a non-strategic intangible asset, somewhat
offset by costs associated with the IPO and separation from
Net earnings attributable to shareholders for the second quarter of 2009 totaled $134.5 million, or $0.66 per diluted share, compared with $114.2 million, or $0.67 per diluted share, for the year-ago quarter. The effective tax rate (ETR) was 28.8 percent versus 38.3 percent in 2008. The reduced tax rate is primarily attributable to benefits associated with the restructuring of foreign operations as part of the IPO process. There were approximately 204.6 million fully diluted shares outstanding in the second quarter of 2009, versus 170.0 million shares a year ago.
Second Quarter GAAP Segment Results
The
The
Second Quarter Non-GAAP Results
For the second quarter of 2009, non-GAAP net sales were up slightly to $719.3 million from $718.3 million a year earlier. Sales increased by 6 percent excluding the impact of foreign exchange. Non-GAAP EBIT increased to $214.3 million in the second quarter, up from $188.6 million a year-ago. Non-GAAP net earnings attributable to shareholders increased in the quarter to $133.4 million, or $0.65 per diluted share, up from $98.9 million, or $0.48 per diluted share, for the same quarter a year ago. The non-GAAP ETR in the second quarter of 2009 was 27.9 percent versus 38.1 percent a year-ago.
Second Quarter Non-GAAP Segment Results
The
The
Six Month GAAP Results
For the six months ended
Net earnings attributable to shareholders for the first six months of 2009 totaled $238.0 million, compared with $244.8 million, for the same period a year ago. Interest expense in the first half of 2009 totaled $52.3 million. Results for 2008 include no interest expense as the company was a wholly owned subsidiary of BMS and carried no debt at that time. Results for 2009 benefited from a lower ETR compared with 2008. The ETR for the first half of 2009 was 31.0 percent versus 37.4 percent for 2008. Earnings per diluted share for the first half of 2009 were $1.21, compared with $1.44 in 2008. There were approximately 196.7 million fully diluted shares outstanding in the first half of 2009, versus 170.0 million shares in 2008.
Six Month GAAP Segment Results
The
Net sales for the
Six Month Non-GAAP Results
For the first half of 2009, non-GAAP net sales were essentially flat compared with a year ago at $1,412.3 million. Excluding foreign exchange, sales increased 7 percent. Non-GAAP EBIT increased to $417.9 million in the first half of 2009, up from $395.9 million in the prior year. Non-GAAP net earnings attributable to shareholders increased to $249.2 million, or $1.22 per diluted share, up from $212.4 million, or $1.04 per diluted share, for the same period a year ago. The non-GAAP ETR in the first half of 2009 was 30.0 percent, compared with 37.2 percent for the first half a year ago.
Six Month Non-GAAP Segment Results
Non-GAAP net sales for the
The
Outlook for 2009
The company expects to report non-GAAP EPS in the range of $2.15 to
$2.25 for 2009, which is an increase from its previous expectation of
$1.90 to $2.05. The increase is driven by a lower effective tax rate
than previously estimated and better-than-expected margins delivered in
the second quarter. Key assumptions underlying this non-GAAP estimate
include: an increase in net sales between 5 percent and 6 percent,
excluding the effect of foreign exchange; EBIT margin expansion driven
by higher gross margins; an effective tax rate between 30 percent and 31
percent; and 204.6 million basic and diluted shares outstanding.
Compared with the first half of 2009, the second half of the year will
see significantly higher spending in support of demand generating
activities and new product launches, as well as some rationalization of
retail inventories in
Conference Call Scheduled
The company will host a conference call at
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 and uncertainties 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 price increases; (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 possibility of
changes in the Women, Infant and Children (WIC) program, or increases in
levels of participation in WIC; and (9) 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 2008, quarterly
report on Form 10-Q and current reports on Form 8-K, filed or furnished
to the
About Mead Johnson
Mead Johnson, a global leader in pediatric nutrition, develops, manufactures, markets and distributes more than 70 products in 50 markets worldwide. The company’s mission is to create nutritional brands and products trusted to give infants and children 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 |
Six Months Ended |
||||||||||||||
2009 | 2008 | 2009 | 2008 | ||||||||||||
NET SALES | $ | 719.3 | $ | 728.6 | $ | 1,412.3 | $ | 1,431.9 | |||||||
COST OF PRODUCTS SOLD | 236.1 | 272.3 | 483.7 | 524.1 | |||||||||||
GROSS PROFIT | 483.2 | 456.3 | 928.6 | 907.8 | |||||||||||
MARKETING, SELLING AND ADMINISTRATIVE | 154.8 | 152.2 | 318.2 | 291.1 | |||||||||||
ADVERTISING AND PRODUCT PROMOTION | 101.6 | 95.1 | 177.5 | 179.3 | |||||||||||
RESEARCH AND DEVELOPMENT | 18.4 | 17.4 | 33.7 | 33.7 | |||||||||||
OTHER (INCOME)/EXPENSES—NET | (9.7 | ) | 3.7 | (7.7 | ) | 6.6 | |||||||||
EARNINGS BEFORE INTEREST AND INCOME TAXES | 218.1 | 187.9 | 406.9 | 397.1 | |||||||||||
INTEREST EXPENSE | 24.3 | — | 52.3 | — | |||||||||||
EARNINGS BEFORE INCOME TAXES | 193.8 | 187.9 | 354.6 | 397.1 | |||||||||||
PROVISION FOR INCOME TAXES | (55.8 | ) | (71.9 | ) | (110.0 | ) | (148.6 | ) | |||||||
NET EARNINGS | 138.0 | 116.0 | 244.6 | 248.5 | |||||||||||
Less Net Earnings Attributable to Noncontrolling Interest | (3.5 | ) | (1.8 | ) | (6.6 | ) | (3.7 | ) | |||||||
NET EARNINGS ATTRIBUTABLE TO SHAREHOLDERS | $ | 134.5 | $ | 114.2 | $ | 238.0 | $ | 244.8 | |||||||
Earnings per Common Share – Basic | |||||||||||||||
Net Earnings attributable to shareholders | $ | 0.66 | $ | 0.67 | $ | 1.21 | $ | 1.44 | |||||||
Earnings per Common Share – Diluted | |||||||||||||||
Net Earnings attributable to shareholders | $ | 0.66 | $ | 0.67 | $ | 1.21 | $ | 1.44 | |||||||
Weighted Average Common Shares Outstanding | |||||||||||||||
Basic | 204.5 | 170.0 | 196.7 | 170.0 | |||||||||||
Diluted | 204.6 | 170.0 | 196.7 | 170.0 | |||||||||||
Dividends declared per Common Share | $ | 0.30 | $ | — | $ | 0.30 | $ | — | |||||||
MEAD JOHNSON NUTRITION COMPANY | |||||
SELECTED FINANCIAL STATEMENT INFORMATION | |||||
(Dollars in millions) | |||||
(UNAUDITED) | |||||
June 30, | December 31, | ||||
2009 | 2008 | ||||
Cash and Cash Equivalents | $ | 576.9 | $ |
— |
|
Receivables—net of allowances of $6.9 and $7.0, respectively | 257.9 | 262.7 | |||
Inventories | 329.3 | 354.3 | |||
Accounts Payable | 207.0 | 198.5 | |||
Related Party Debt and Lease | 1,794.1 | 2,000.0 | |||
Six Months Ended June 30, | |||||
2009 | 2008 | ||||
Depreciation and Amortization | $ | 28.5 | $ | 24.5 | |
Capital Expenditures | 33.8 | 26.8 | |||
Factors Affecting Comparability – Adjusted Non-GAAP Financial Measures
This news release contains adjusted non-GAAP (non-GAAP) financial measures, including non-GAAP net sales, EBIT, earnings and earnings per share information, adjusted for factors that affect comparability due to the impact of the company’s IPO. The items included in GAAP measures, but excluded for the purpose of determining non-GAAP net sales, EBIT, earnings and earnings per share, are the impact of operating model adjustments and specified IPO and other costs. In addition, other adjusted items include interest expense due to changes in the capital structure, the ETR due to the impact of specified IPO and other costs on the tax rate, and the number of shares outstanding to reflect the increase in shares due to the IPO. Non-GAAP net sales, EBIT, earnings and earnings per share information adjusting 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.
The tables that reconcile GAAP to non-GAAP disclosure and the accompanying footnotes follow:
MEAD JOHNSON NUTRITION COMPANY | ||||||||||||||||||||
ADJUSTED NON-GAAP OPERATING RESULTS | ||||||||||||||||||||
FOR THE QUARTERS ENDED JUNE 30, 2009 and 2008 | ||||||||||||||||||||
(Dollars and shares in millions, except per share data) | ||||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||||
2009 | 2008 | % Change Due to | ||||||||||||||||||
Adjusted | Adjusted | Foreign | ||||||||||||||||||
Non-GAAP | Non-GAAP | % Change | Volume | Price | Exchange | |||||||||||||||
Net Sales | ||||||||||||||||||||
Asia/Latin America | $ | 396.5 | $ | 381.3 | 4 | % | 3 | % | 10 | % | -9 | % | ||||||||
North America/Europe | 322.8 | 337.0 | -4 | % | 2 | % | -3 | % | -3 | % | ||||||||||
Total | $ | 719.3 | $ | 718.3 | 0 | % | 2 | % | 4 | % | -6 | % | ||||||||
Earnings Before Interest and Income Taxes | ||||||||||||||||||||
Asia/Latin America | $ | 146.1 | $ | 121.1 | 21 | % | ||||||||||||||
North America/Europe | 119.0 | 118.3 | 1 | % | ||||||||||||||||
Corporate and Other | (50.8 | ) | (50.8 | ) | 0 | % | ||||||||||||||
Total | $ | 214.3 | $ | 188.6 | 14 | % | ||||||||||||||
Net Earnings Attributable to Shareholders | $ | 133.4 | $ | 98.9 | 35 | % | ||||||||||||||
Earnings Per Common Share - Diluted: | ||||||||||||||||||||
Weighted Average Common Shares |
204.6 | 204.5 | ||||||||||||||||||
Net Earnings Attributable to Shareholders | $ | 0.65 | $ | 0.48 | ||||||||||||||||
MEAD JOHNSON NUTRITION COMPANY | |||||||||||||||||
RECONCILIATION OF ADJUSTED NON-GAAP RESULTS OF OPERATIONS | |||||||||||||||||
FOR THE QUARTER ENDED JUNE 30, 2009 | |||||||||||||||||
(Dollars and shares in millions, except per share data) | |||||||||||||||||
(UNAUDITED) | |||||||||||||||||
GAAP |
Specified |
Tax (4) |
Adjusted |
||||||||||||||
Net Sales | $ | 719.3 | $ | 719.3 | |||||||||||||
Cost of Products Sold | 236.1 | 236.1 | |||||||||||||||
Gross Profit | 483.2 | 483.2 | |||||||||||||||
Marketing, Selling and Administrative | 154.8 | (6.9 | ) | 147.9 | |||||||||||||
Advertising and Product Promotion | 101.6 | 101.6 | |||||||||||||||
Research and Development | 18.4 | 18.4 | |||||||||||||||
Other Expenses - net | (9.7 | ) | 10.7 | 1.0 | |||||||||||||
Earnings Before Interest and Income Taxes | $ | 218.1 | $ | (3.8 | ) | $ | 214.3 | ||||||||||
Interest Expense | (24.3 | ) | (24.3 | ) | |||||||||||||
Provision for Income Taxes | (55.8 | ) | $ | 2.7 | (53.1 | ) | |||||||||||
Net Earnings | $ | 138.0 | $ | 136.9 | |||||||||||||
Less: Net Earnings Attributable to Noncontrolling Interest | (3.5 | ) | (3.5 | ) | |||||||||||||
Net Earnings Attributable to Shareholders | $ | 134.5 | $ | 133.4 | |||||||||||||
Earnings Per Common Share - Diluted: | |||||||||||||||||
Weighted Average Common Shares Outstanding - Diluted | 204.6 | 204.6 | |||||||||||||||
Net Earnings Attributable to Shareholders | $ | 0.66 | $ | 0.65 | |||||||||||||
MEAD JOHNSON NUTRITION COMPANY | ||||||||||||||||||||||||||||
RECONCILIATION OF ADJUSTED NON-GAAP RESULTS OF OPERATIONS | ||||||||||||||||||||||||||||
FOR THE QUARTER ENDED JUNE 30, 2008 | ||||||||||||||||||||||||||||
(Dollars and shares in millions, except per share data) | ||||||||||||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||||||||||||
GAAP |
Operating |
Specified |
Interest |
Tax (4) |
Adjusted |
|||||||||||||||||||||||
Net Sales | $ | 728.6 | (10.3 | ) | $ | 718.3 | ||||||||||||||||||||||
Cost of Products Sold | 272.3 | (3.9 | ) | 268.4 | ||||||||||||||||||||||||
Gross Profit | 456.3 | (6.4 | ) | 449.9 | ||||||||||||||||||||||||
Marketing, Selling and Administrative | 152.2 | (2.1 | ) | (0.2 | ) | 149.9 | ||||||||||||||||||||||
Advertising and Product Promotion | 95.1 | (4.3 | ) | 90.8 | ||||||||||||||||||||||||
Research and Development | 17.4 | 17.4 | ||||||||||||||||||||||||||
Other Expenses - net | 3.7 | (0.5 | ) | 3.2 | ||||||||||||||||||||||||
Earnings Before Interest and Income Taxes |
$ | 187.9 | $ | 0.5 | $ | 0.2 | $ | 188.6 | ||||||||||||||||||||
Interest Expense | $ | (25.9 | ) | (25.9 | ) | |||||||||||||||||||||||
Provision for Income Taxes | (71.9 | ) | $ | 9.9 | (62.0 | ) | ||||||||||||||||||||||
Net Earnings | $ | 116.0 | $ | 100.7 | ||||||||||||||||||||||||
Less: Net Earnings Attributable to Noncontrolling Interest | (1.8 | ) | (1.8 | ) | ||||||||||||||||||||||||
Net Earnings Attributable to Shareholders | $ | 114.2 | $ | 98.9 | ||||||||||||||||||||||||
Earnings Per Common Share - Diluted: (5) | ||||||||||||||||||||||||||||
Weighted Average Common Shares Outstanding - Diluted |
170.0 | 204.5 | ||||||||||||||||||||||||||
Net Earnings Attributable to Shareholders | $ | 0.67 | $ | 0.48 | ||||||||||||||||||||||||
MEAD JOHNSON NUTRITION COMPANY | ||||||||||||||||||||
RECONCILIATION OF ADJUSTED NON-GAAP SEGMENT REPORTING | ||||||||||||||||||||
FOR THE QUARTER ENDED JUNE 30, 2009 | ||||||||||||||||||||
(Dollars in millions) | ||||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||||
Net Sales | Earnings Before Interest and Income Taxes | |||||||||||||||||||
GAAP |
Adjusted |
GAAP |
Specified |
Adjusted |
||||||||||||||||
Asia/Latin America | $ | 396.5 | $ | 396.5 | $ | 146.1 | $ | - | $ | 146.1 | ||||||||||
North America/Europe | 322.8 | 322.8 | 119.0 | - | 119.0 | |||||||||||||||
Corporate and Other |
- |
- |
(47.0 | ) | (3.8 | ) | (50.8 | ) | ||||||||||||
Total | $ | 719.3 | $ | 719.3 | $ | 218.1 | $ | (3.8 | ) | $ | 214.3 | |||||||||
MEAD JOHNSON NUTRITION COMPANY | ||||||||||||||||||||||||||
RECONCILIATION OF ADJUSTED NON-GAAP SEGMENT REPORTING | ||||||||||||||||||||||||||
FOR THE QUARTER ENDED JUNE 30, 2008 | ||||||||||||||||||||||||||
(Dollars in millions) | ||||||||||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||||||||||
Net Sales | Earnings Before Interest and Income Taxes | |||||||||||||||||||||||||
GAAP |
Operating |
Adjusted |
GAAP |
Operating |
Specified |
Adjusted |
||||||||||||||||||||
Asia/Latin America | $ | 389.4 | $ | (8.1 | ) | $ | 381.3 | $ | 119.7 | $ | 1.4 | $ | - | $ | 121.1 | |||||||||||
North America/Europe | 339.2 | (2.2 | ) | 337.0 | 119.2 | (0.9 | ) | - | 118.3 | |||||||||||||||||
Corporate and Other | (51.0 | ) | 0.2 | (50.8 | ) | |||||||||||||||||||||
Total | $ | 728.6 | $ | (10.3 | ) | $ | 718.3 | $ | 187.9 | $ | 0.5 | $ | 0.2 | $ | 188.6 | |||||||||||
MEAD JOHNSON NUTRITION COMPANY | ||||||||||||||||||||
ADJUSTED NON-GAAP OPERATING RESULTS | ||||||||||||||||||||
FOR THE SIX MONTHS ENDED JUNE 30, 2009 and 2008 | ||||||||||||||||||||
(Dollars and shares in millions, except per share data) | ||||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||||
2009 | 2008 | % Change Due to | ||||||||||||||||||
Adjusted | Adjusted | Foreign | ||||||||||||||||||
Non-GAAP | Non-GAAP | % Change | Volume | Price | Exchange | |||||||||||||||
Net Sales | ||||||||||||||||||||
Asia/Latin America | $ | 786.3 | $ | 725.3 | 8 | % | 6 | % | 12 | % | -10 | % | ||||||||
North America/Europe | 626.0 | 689.0 | -9 | % | -5 | % | 0 | % | -4 | % | ||||||||||
Total | $ | 1,412.3 | $ | 1,414.3 | 0 | % | 1 | % | 6 | % | -7 | % | ||||||||
Earnings Before Interest and Income Taxes | ||||||||||||||||||||
Asia/Latin America | $ | 294.8 | $ | 251.7 | 17 | % | ||||||||||||||
North America/Europe | 220.2 | 240.1 | -8 | % | ||||||||||||||||
Corporate and Other | (97.1 | ) | (95.9 | ) | 1 | % | ||||||||||||||
Total | $ | 417.9 | $ | 395.9 | 6 | % | ||||||||||||||
Net Earnings Attributable to Shareholders | $ | 249.2 | $ | 212.4 | 17 | % | ||||||||||||||
Earnings Per Common Share - Diluted: | ||||||||||||||||||||
Weighted Average Common Shares |
204.6 | 204.5 | ||||||||||||||||||
Net Earnings Attributable to Shareholders | $ | 1.22 | $ | 1.04 | ||||||||||||||||
MEAD JOHNSON NUTRITION COMPANY | |||||||||||||||
RECONCILIATION OF ADJUSTED NON-GAAP RESULTS OF OPERATIONS | |||||||||||||||
FOR THE SIX MONTHS ENDED JUNE 30, 2009 | |||||||||||||||
(Dollars and shares in millions, except per share data) | |||||||||||||||
(UNAUDITED) | |||||||||||||||
GAAP |
Specified |
Tax (4) |
Adjusted |
||||||||||||
Net Sales | $ | 1,412.3 | $ | 1,412.3 | |||||||||||
Cost of Products Sold | 483.7 | 483.7 | |||||||||||||
Gross Profit | 928.6 | 928.6 | |||||||||||||
Marketing, Selling and Administrative | 318.2 | (24.1 | ) | 294.1 | |||||||||||
Advertising and Product Promotion | 177.5 | 177.5 | |||||||||||||
Research and Development | 33.7 | 33.7 | |||||||||||||
Other Expenses - net | (7.7 | ) | 13.1 | 5.4 | |||||||||||
Earnings Before Interest and Income Taxes | $ | 406.9 | $ | 11.0 | $ | 417.9 | |||||||||
Interest Expense | (52.3 | ) | (52.3 | ) | |||||||||||
Provision for Income Taxes | (110.0 | ) | $ | 0.2 | (109.8 | ) | |||||||||
Net Earnings | $ | 244.6 | $ | 255.8 | |||||||||||
Less: Net Earnings Attributable to Noncontrolling Interest | (6.6 | ) | (6.6 | ) | |||||||||||
Net Earnings Attributable to Shareholders | $ | 238.0 | $ | 249.2 | |||||||||||
Earnings Per Common Share - Diluted: (5) | |||||||||||||||
Weighted Average Common Shares Outstanding - Diluted | 196.7 | 204.6 | |||||||||||||
Net Earnings Attributable to Shareholders | $ | 1.21 | $ | 1.22 | |||||||||||
MEAD JOHNSON NUTRITION COMPANY | ||||||||||||
RECONCILIATION OF ADJUSTED NON-GAAP RESULTS OF OPERATIONS | ||||||||||||
FOR THE SIX MONTHS ENDED JUNE 30, 2008 | ||||||||||||
(Dollars and shares in millions, except per share data) | ||||||||||||
(UNAUDITED) | ||||||||||||
GAAP |
Operating |
Specified |
Interest |
Tax (4) |
Adjusted |
|||||||
Net Sales | $ 1,431.9 | (17.6) | $ 1,414.3 | |||||||||
Cost of Products Sold | 524.1 | (7.1) | 517.0 | |||||||||
Gross Profit | 907.8 | (10.5) | 897.3 | |||||||||
Marketing, Selling and |
291.1 | (3.8) | (0.2) | 287.1 | ||||||||
Advertising and Product Promotion | 179.3 | (4.2) | 175.1 | |||||||||
Research and Development | 33.7 | 33.7 | ||||||||||
Other Expenses - net | 6.6 | (1.1) | 5.5 | |||||||||
Earnings Before Interest and Income Taxes | $ 397.1 | $ (1.4) | $ 0.2 | $ 395.9 | ||||||||
Interest Expense | $ (51.9) | (51.9) | ||||||||||
Provision for Income Taxes | (148.6) | $ 20.7 | (127.9) | |||||||||
Net Earnings | $ 248.5 | $ 216.1 | ||||||||||
Less: Net Earnings Attributable to |
(3.7) | (3.7) | ||||||||||
Net Earnings Attributable to |
$ 244.8 | $ 212.4 | ||||||||||
Earnings Per Common Share - |
||||||||||||
Weighted Average Common Shares |
170.0 | 204.5 | ||||||||||
Net Earnings Attributable to |
$ 1.44 | $ 1.04 | ||||||||||
MEAD JOHNSON NUTRITION COMPANY | ||||||||||||||||||
RECONCILIATION OF ADJUSTED NON-GAAP SEGMENT REPORTING | ||||||||||||||||||
FOR THE SIX MONTHS ENDED JUNE 30, 2009 | ||||||||||||||||||
(Dollars in millions) | ||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||
Net Sales | Earnings Before Interest and Income Taxes | |||||||||||||||||
GAAP |
Adjusted |
GAAP |
Specified |
Adjusted |
||||||||||||||
Asia/Latin America | $ | 786.3 | $ | 786.3 | $ | 294.8 | $ | - | $ | 294.8 | ||||||||
North America/Europe | 626.0 | 626.0 | 220.2 | - | 220.2 | |||||||||||||
Corporate and Other | (108.1 | ) | 11.0 | (97.1 | ) | |||||||||||||
Total | $ | 1,412.3 | $ | 1,412.3 | $ | 406.9 | $ | 11.0 | $ | 417.9 | ||||||||
MEAD JOHNSON NUTRITION COMPANY | |||||||||||||||||||||||||||||
RECONCILIATION OF ADJUSTED NON-GAAP SEGMENT REPORTING | |||||||||||||||||||||||||||||
FOR THE SIX MONTHS ENDED JUNE 30, 2008 | |||||||||||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||||||||
(UNAUDITED) | |||||||||||||||||||||||||||||
Net Sales | Earnings Before Interest and Income Taxes | ||||||||||||||||||||||||||||
GAAP |
Operating |
Adjusted |
GAAP |
Operating |
Specified |
Adjusted |
|||||||||||||||||||||||
Asia/Latin America | $ | 738.6 | $ | (13.3 | ) | $ | 725.3 | $ | 251.2 | $ | 0.5 | - | $ | 251.7 | |||||||||||||||
North America/Europe | 693.3 | (4.3 | ) | 689.0 | 242.0 | (1.9 | ) | - | 240.1 | ||||||||||||||||||||
Corporate and Other |
- |
- |
(96.1 | ) | 0.2 | (95.9 | ) | ||||||||||||||||||||||
Total | $ | 1,431.9 | $ | (17.6 | ) | $ | 1,414.3 | $ | 397.1 | $ | (1.4 | ) | $ | 0.2 | $ | 395.9 | |||||||||||||
Notes to Tables Reconciling GAAP and Non-GAAP Results
(1) Operating Model Adjustments for 2008
In
(2) Specified IPO and Other Costs
Results for the second quarter of 2009 include $6.9 million of IPO and other separation costs and $1.2 million of other specified costs, offset by an $11.9 million gain on the sale of an asset. Results for the first half of 2009 include $24.1 million of IPO and other separation costs and $8.8 million of other specified costs, offset by a $10.0 million patent settlement and the $11.9 million gain on the asset sale. There were no such costs in the second quarter or first half of 2008.
(3) Interest Expense
The company had interest expense of $24.3 million and $52.3 million for the second quarter and first half of 2009, respectively. The company had no debt outstanding, and consequently, no interest expense in the first or second quarters of 2008.
(4) Effective Tax Rate
The company’s effective tax rate (ETR) for the second quarter of 2009 and 2008 was 28.8 percent and 38.3 percent, respectively. Adjusting for the non-deductibility of certain IPO costs, the non-GAAP ETR for the second quarters of 2009 and 2008 was 27.9 percent and 38.1 percent, respectively. The company’s ETR for the first six months of 2009 and 2008 was 31.0 percent and 37.4 percent, respectively. Adjusting for the non-deductibility of certain IPO costs, the non-GAAP ETR for the first six months of 2009 and 2008 was 30.0 percent and 37.2 percent, respectively.
5) Shares Outstanding
Prior to
Source:
Mead Johnson Nutrition Company
Investors: Kathryn Chieger,
847-832-2419
kathryn.chieger@mjn.com
or
Media:
Pete Paradossi, 812-429-7413
pete.paradossi@mjn.com
7/23/2009