EX-99.1 2 exhibit991.htm MEAD JOHNSON RECAST UNAUDITED FINANCIAL INFORMATION Exhibit 99.1



Exhibit 99.1


1


 
Overview of Accounting Change

During the first quarter of 2014, Mead Johnson Nutrition Company ("Mead Johnson") changed its accounting principles for the recognition of actuarial gains and losses for all of its defined benefit pension and other post-employment benefit plans and the calculation of expected return on pension plan assets.  Historically, Mead Johnson recognized actuarial gains and losses as a component of accumulated other comprehensive loss in its Consolidated Balance Sheets and amortized them into the Consolidated Statements of Earnings over the average future service period of the active employees of these plans to the extent such gains and losses were outside of a corridor.  Starting in the first quarter of 2014, Mead Johnson elected to immediately recognize actuarial gains and losses in its Consolidated Statements of Earnings. While both the old and the new accounting principles are in accordance with GAAP, the new accounting principles are preferable as they accelerate the recognition of actuarial gains and losses into earnings rather than to delay them over time.  Additionally, for purposes of calculating the expected return on pension plan assets, Mead Johnson previously used a calculated value for the market-related valuation of pension plan assets. With this change in accounting principle, Mead Johnson now uses the actual fair value of pension plan assets. These changes will improve transparency in operating results by immediately recognizing the effects of external conditions on plan obligations, investments and assumptions. 
Immediately before the company's IPO in February 2009, the U.S. defined benefit pension plan was closed to new participants and existing participants stopped earning credit for additional years of service, but continued to receive credit for salary increases. As of the five year anniversary of this change, participants no longer earned credit for future salary increases and the plan became fully frozen. The timing of these accounting changes coincides with the plan becoming fully frozen. These accounting changes have been applied to all of the company's defined benefit pension and other post-employment benefit plans.
Under these new accounting principles, actuarial gains and losses from these plans are recognized upon plan remeasurement in the fourth quarter of each year, or more frequently if a remeasurement occurs. The remaining components of net periodic benefit cost, primarily interest on projected benefit obligation and the expected return on pension plan assets, continue to be recorded on a quarterly basis. Actuarial gains and losses are recognized within Corporate and Other and the remaining components of net periodic benefit costs are recognized in the respective reportable segments.



2


MEAD JOHNSON NUTRITION COMPANY
SUPPLEMENTAL FINANCIAL INFORMATION
PREVIOUSLY REPORTED AND RECAST SUMMARY CONSOLIDATED STATEMENTS OF EARNINGS
(Dollars in millions)
(UNAUDITED)

This table presents previously reported GAAP Statements of Earnings, the impact of changes in accounting principles related to defined benefit pension and other post-employment benefit plans adopted in the first quarter of 2014 and Statements of Earnings recast to show the impact of these changes.
                                                                           
 
GAAP
 
Year Ended December 31, 2013
 
Year Ended December 31, 2012
 
As previously reported
 
Impact of Change
 
Recast
 
As previously reported
 
Impact of Change
 
Recast
NET SALES
$
4,200.7

 
$
—

 
$
4,200.7

 
$
3,901.3

 
$
—

 
$
3,901.3

Cost of Products Sold
1,532.8

 
(4.3
)
 
1,528.5

 
1,485.3

 
18.5

 
1,503.8

GROSS PROFIT (1)
2,667.9

 
4.3

 
2,672.2

 
2,416.0

 
(18.5
)
 
2,397.5

Gross Margin %
63.5
%
 
0.1
%
 
63.6
%
 
61.9
%
 
(0.4
)%
 
61.5
%
Expenses:
 
 

 
 
 
 

 


 
 
Selling, General and Administrative
918.0

 
(14.5
)
 
903.5

 
877.8

 
26.7

 
904.5

Advertising and Promotion
645.1

 
—

 
645.1

 
552.8

 
—

 
552.8

Research and Development
102.4

 
(2.2
)
 
100.2

 
95.4

 
4.7

 
100.1

Other Expenses – net
77.8

 
(29.3
)
 
48.5

 
20.0

 
(15.2
)
 
4.8

EARNINGS BEFORE INTEREST AND INCOME TAXES
924.6

 
50.3

 
974.9

 
870.0

 
(34.7
)
 
835.3

EBIT as a % of Sales
22.0
%
 
1.2
%
 
23.2
%
 
22.3
%
 
(0.9
)%
 
21.4
%
 
 
 

 
 
 
 
 


 
 
Interest Expense – net
50.6

 
—

 
50.6

 
65.0

 
—

 
65.0

EARNINGS BEFORE INCOME TAXES
874.0

 
50.3

 
924.3

 
805.0

 
(34.7
)
 
770.3

 
 
 

 
 
 
 
 


 
 
Provision for Income Taxes
219.1

 
16.0

 
235.1

 
192.6

 
(10.6
)
 
182.0

ETR
25.1
%
 
 
 
25.4
%
 
23.9
%
 
 
 
23.6
%
NET EARNINGS
654.9

 
34.3

 
689.2

 
612.4

 
(24.1
)
 
588.3

Less Net Earnings/(Loss) Attributable to Noncontrolling Interests
5.4

 
—

 
5.4

 
7.9

 
—

 
7.9

NET EARNINGS ATTRIBUTABLE TO SHAREHOLDERS
$
649.5

 
$
34.3

 
$
683.8

 
$
604.5

 
$
(24.1
)
 
$
580.4

 
 
 

 
 
 
 
 


 
 

Earnings per Share– Basic
$
3.20

 
$
0.17

 
$
3.37

 
$
2.96

 
$
(0.12
)
 
$
2.84

 
 
 

 
 
 
 

 


 
 

Earnings per Share– Diluted
$
3.19

 
$
0.17

 
$
3.36

 
$
2.95

 
$
(0.12
)
 
$
2.83

(1) Under mark-to-market ("MTM") pension accounting methodology a portion of the MTM true-up will be allocated to Cost of Sales based upon the proportion of the company's employees covered by the plan whose salary and benefits are recognized within Cost of Sales. Going forward, Mead Johnson will disclose the impact to Cost of Sales and a non-GAAP gross profit figure, which will exclude the MTM impact to better represent underlying operations.


3


MEAD JOHNSON NUTRITION COMPANY
SUPPLEMENTAL FINANCIAL INFORMATION
PREVIOUSLY REPORTED AND RECAST SUMMARY BALANCE SHEETS
(Dollars in millions)
(UNAUDITED)

The adoption of MTM accounting impacts the company's historical balance sheets. While the company's pension asset and liability remain unchanged, equity positions have been impacted as follows:
•
Additional-Paid-In-Capital balance was recast to recognize the historical impact of pension and other post-employment benefits to the company's equity position at the time of the IPO. Previously this impact had been recognized within accumulated other comprehensive income as the initial recognition of deferred losses at the time of the IPO.
•
The cumulative impact of MTM accounting resulted in a $38.1 million and $72.4 million decrease to retained earnings as of December 31, 2013 and December 31, 2012, respectively.
•
A summary balance sheet, highlighting the sections impacted by the recast are as follows:

This table solely highlights the balance sheet sections impacted by the change.
GAAP
December 31,
 
December 31,
 
2013
 
Change
 
2013 Recast
 
2012
 
Change
 
2012 Recast
 
 
 
 
 
 
 
 
 
 
 
 
ASSETS TOTAL
$
3,474.1

 
$
—

 
$
3,474.1

 
$
3,258.2

 
$
—

 
$
3,258.2

 
 
 
 
 
 
 
 
 
 
 
 
LIABILITIES TOTAL
$
3,123.9

 
$
—

 
$
3,123.9

 
$
3,192.9

 
$
—

 
$
3,192.9

 
 
 
 
 
 
 
 
 
 
 
 
REDEEMABLE NONCONTROLLING INTEREST
$
49.7

 
$
—

 
$
49.7

 
$
36.3

 
$
—

 
$
36.3

 
 
 
 
 
 
 
 
 
 
 
 
EQUITY
 
 
 
 
 
 
 
 
 
 
 
Shareholders’ Equity
 
 
 
 
 
 
 
 
 
 
 
Common Stock
$
2.1

 
$
—

 
$
2.1

 
$
2.1

 
$
—

 
$
2.1

Additional Paid-in/(Distributed) Capital
(625.3
)
 
(96.2
)
 
(721.5
)
 
(676.6
)
 
(96.2
)
 
(772.8
)
Retained Earnings
1,470.4

 
(38.1
)
 
1,432.3

 
1,124.8

 
(72.4
)
 
1,052.4

Treasury Stock – at cost
(351.9
)
 
—

 
(351.9
)
 
(244.6
)
 
—

 
(244.6
)
Accumulated Other Comprehensive Loss
(203.5
)
 
134.3

 
(69.2
)
 
(187.0
)
 
168.6

 
(18.4
)
Total Shareholders’ Equity
291.8

 
—

 
291.8

 
18.7

 
—

 
18.7

Noncontrolling Interests
8.7

 
—

 
8.7

 
10.3

 
—

 
10.3

EQUITY TOTAL
300.5

 
—

 
300.5

 
29.0

 
—

 
29.0

LIABILITIES AND EQUITY TOTAL
$
3,474.1

 
$
—

 
$
3,474.1

 
$
3,258.2

 
$
—

 
$
3,258.2



4



MEAD JOHNSON NUTRITION COMPANY
CONSOLIDATED EARNINGS METRICS ON AN ANNUAL AND QUARTERLY BASIS
PREVIOUSLY REPORTED AND RECAST GAAP MEASURES
(Dollars in millions, except per share data)
(UNAUDITED)

This table presents previously reported GAAP earnings metrics as well as these metrics recast to reflect the impact of changes in accounting principles related to defined benefit pension and other post-employment benefit plans adopted in the first quarter of 2014.
 
 
 
 
 
 
GAAP
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2009
 
2010
 
2011
 
2012
 
2013
 
 
 
 
 
 
FY
 
FY
 
FY
 
Q1
 
Q2
 
Q3
 
Q4
 
FY
 
Q1
 
Q2
 
Q3
 
Q4
 
FY
Gross Profit
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Previously reported GAAP
$
1,851.8

 
$
1,992.0

 
$
2,314.7

 
$
613.1

 
$
640.0

 
$
563.8

 
$
599.1

 
$
2,416.0

 
$
647.0

 
$
670.9

 
$
681.3

 
$
668.7

 
$
2,667.9

Recast GAAP results
1,841.1

 
1,995.2

 
2,286.0

 
613.8

 
635.6

 
565.6

 
582.5

 
2,397.5

 
652.9

 
673.3

 
684.5

 
661.5

 
2,672.2

Gross Margin
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Previously reported GAAP
65.5
%
 
63.4
%
 
63.0
%
 
62.1
%
 
63.2
%
 
61.2
%
 
61.1
%
 
61.9
%
 
62.3
%
 
63.6
%
 
65.1
%
 
63.0
%
 
63.5
%
Recast GAAP results
65.1
%
 
63.5
%
 
62.2
%
 
62.2
%
 
62.8
%
 
61.4
%
 
59.4
%
 
61.5
%
 
62.9
%
 
63.8
%
 
65.4
%
 
62.4
%
 
63.6
%
EBIT
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Previously reported GAAP
$
679.6

 
$
682.9

 
$
774.1

 
$
248.8

 
$
248.3

 
$
183.2

 
$
189.7

 
$
870.0

 
$
249.1

 
$
231.6

 
$
238.7

 
$
205.2

 
$
924.6

Previously reported settlement charges
10.6

 
10.6

 
9.7

 
—

 
9.0

 
4.1

 
2.1

 
15.2

 
6.9

 
8.3

 
2.5

 
11.6

 
29.3

(Inc)/Dec in periodic costs
(1.7
)
 
2.5

 
5.9

 
2.1

 
2.4

 
2.3

 
2.2

 
9.0

 
2.3

 
2.2

 
2.2

 
2.3

 
9.0

MTM pension gain/(loss)
(26.7
)
 
5.9

 
(91.5
)
 
—

 
(14.8
)
 
3.1

 
(47.2
)
 
(58.9
)
 
15.2

 
4.7

 
7.3

 
(15.2
)
 
12.0

Recast GAAP results
661.8

 
701.9

 
698.2

 
250.9

 
244.9

 
192.7

 
146.8

 
835.3

 
273.5

 
246.8

 
250.7

 
203.9

 
974.9

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Earnings Attributable to Shareholders
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Previously reported GAAP
$
399.6

 
$
452.7

 
$
508.5

 
$
164.2

 
$
165.8

 
$
140.3

 
$
134.2

 
$
604.5

 
$
172.5

 
$
162.2

 
$
161.6

 
$
153.2

 
$
649.5

Recast GAAP results
388.7

 
467.1

 
456.7

 
167.0

 
163.6

 
146.3

 
103.5

 
580.4

 
188.0

 
172.0

 
171.3

 
152.5

 
683.8

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ETR
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Previously reported GAAP
30.1
%
 
27.8
%
 
28.1
%
 
27.5
%
 
25.9
%
 
16.3
%
 
23.8
%
 
23.9
%
 
25.7
%
 
25.3
%
 
29.4
%
 
18.9
%
 
25.1
%
Recast GAAP results
29.8
%
 
27.7
%
 
27.7
%
 
27.0
%
 
25.7
%
 
17.4
%
 
22.3
%
 
23.6
%
 
26.7
%
 
26.0
%
 
28.8
%
 
18.8
%
 
25.4
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings per Diluted Share
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Previously reported GAAP
$
1.99

 
$
2.20

 
$
2.47

 
$
0.80

 
$
0.81

 
$
0.69

 
$
0.66

 
$
2.95

 
$
0.85

 
$
0.80

 
$
0.79

 
$
0.75

 
$
3.19

Recast GAAP results
1.93

 
2.27

 
2.22

 
0.81

 
0.80

 
0.71

 
0.51

 
2.83

 
0.92

 
0.84

 
0.84

 
0.75

 
3.36


5


MEAD JOHNSON NUTRITION COMPANY
SEGMENT INFORMATION ON AN ANNUAL AND QUARTERLY BASIS
PREVIOUSLY REPORTED AND RECAST MEASURES
(Dollars in millions, except per share data)
(UNAUDITED)

This table presents previously reported GAAP Earnings Before Interest and Income Taxes (EBIT) and EBIT as a percentage of Net Sales for the years ended December 31, 2013, 2012 and 2011 and the quarterly periods in 2013 and 2012 as well as these metrics recast to reflect the impact of changes in Mead Johnson's accounting principles related to defined benefit pension and other post-employment benefit plans adopted in the first quarter of 2014.
 
 
 
 
Earnings Before Interest and Income Taxes (1) (millions of $)
 
 
 
 
 
 
 
2011
 
2012
 
2013
 
 
 
 
 
 
 
FY
 
Q1
 
Q2
 
Q3
 
Q4
 
FY
 
Q1
 
Q2
 
Q3
 
Q4
 
FY
Previously Reported EBIT:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Asia
 
$
672.5

 
$
242.2

 
$
202.7

 
$
146.3

 
$
134.1

 
$
725.3

 
$
221.4

 
$
192.0

 
$
199.5

 
$
182.9

 
$
795.8

Latin America
 
139.1

 
38.7

 
37.2

 
46.8

 
53.3

 
176.0

 
47.0

 
47.6

 
62.5

 
50.1

 
207.2

North America / Europe
 
308.4

 
31.8

 
72.2

 
53.2

 
88.9

 
246.1

 
51.3

 
73.4

 
63.0

 
60.8

 
248.5

Corporate and Other
 
(345.9
)
 
(63.9
)
 
(63.8
)
 
(63.1
)
 
(86.6
)
 
(277.4
)
 
(70.6
)
 
(81.4
)
 
(86.3
)
 
(88.6
)
 
(326.9
)
Total EBIT
 
774.1

 
248.8

 
248.3

 
183.2

 
189.7

 
870.0

 
249.1

 
231.6

 
238.7

 
205.2

 
924.6

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Recast EBIT:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Asia
 
$
672.5

 
$
242.1

 
$
202.9

 
$
146.3

 
$
134.1

 
$
725.4

 
$
221.6

 
$
192.0

 
$
199.6

 
$
183.0

 
$
796.2

Latin America
 
139.2

 
39.0

 
37.5

 
47.2

 
53.5

 
177.2

 
47.0

 
47.6

 
62.5

 
50.1

 
207.2

North America / Europe
 
312.7

 
33.2

 
73.6

 
54.7

 
90.4

 
251.9

 
52.9

 
75.0

 
64.7

 
62.4

 
255.0

Corporate and Other
 
(426.2
)
 
(63.4
)
 
(69.1
)
 
(55.5
)
 
(131.2
)
 
(319.2
)
 
(48.0
)
 
(67.8
)
 
(76.1
)
 
(91.6
)
 
(283.5
)
Total EBIT
 
698.2

 
250.9

 
244.9

 
192.7

 
146.8

 
835.3

 
273.5

 
246.8

 
250.7

 
203.9

 
974.9


 
 
 
 
Earnings Before Interest and Income Taxes as a Percentage of Net Sales (1)
 
 
 
 
 
 
 
2011
 
2012
 
2013
 
 
 
 
 
 
 
FY
 
Q1
 
Q2
 
Q3
 
Q4
 
FY
 
Q1
 
Q2
 
Q3
 
Q4
 
FY
Previously Reported EBIT:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Asia
 
36.8
%
 
44.2
%
 
39.5
%
 
32.7
%
 
29.3
%
 
36.9
%
 
39.9
%
 
35.9
%
 
36.5
%
 
33.6
%
 
36.5
%
Latin America
 
22.5
%
 
24.4
%
 
19.8
%
 
23.5
%
 
25.9
%
 
23.4
%
 
23.4
%
 
21.3
%
 
28.2
%
 
23.2
%
 
24.1
%
North America / Europe
 
25.1
%
 
11.4
%
 
23.3
%
 
19.4
%
 
28.0
%
 
20.8
%
 
18.2
%
 
24.6
%
 
22.6
%
 
20.2
%
 
21.4
%
Corporate and Other
 
—
%
 
—
%
 
—
%
 
—
%
 
—
%
 
—
%
 
—
%
 
—
%
 
—
%
 
—
%
 
—
%
Total EBIT
 
21.1
%
 
25.2
%
 
24.5
%
 
19.9
%
 
19.3
%
 
22.3
%
 
24.0
%
 
21.9
%
 
22.8
%
 
19.3
%
 
22.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Recast EBIT:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Asia
 
36.8
%
 
44.2
%
 
39.5
%
 
32.7
%
 
29.3
%
 
36.9
%
 
40.0
%
 
35.9
%
 
36.5
%
 
33.6
%
 
36.5
%
Latin America
 
22.5
%
 
24.6
%
 
19.9
%
 
23.7
%
 
26.0
%
 
23.5
%
 
23.4
%
 
21.3
%
 
28.2
%
 
23.2
%
 
24.1
%
North America / Europe
 
25.4
%
 
11.9
%
 
23.7
%
 
19.9
%
 
28.5
%
 
21.3
%
 
18.7
%
 
25.2
%
 
23.2
%
 
20.8
%
 
22.0
%
Corporate and Other
 
—
%
 
—
%
 
—
%
 
—
%
 
—
%
 
—
%
 
—
%
 
—
%
 
—
%
 
—
%
 
—
%
Total EBIT
 
19.0
%
 
25.4
%
 
24.2
%
 
20.9
%
 
15.0
%
 
21.4
%
 
26.4
%
 
23.4
%
 
23.9
%
 
19.2
%
 
23.2
%
(1) Specified Items are recognized within Corporate and Other. Therefore, GAAP and non-GAAP EBIT are the same for the Asia, Latin America and North America/Europe segments.

6


Non-GAAP Financial Measures
This filing contains non-GAAP financial measures, including non-GAAP gross profit, EBIT, earnings and earnings per share information. Specified Items, are items included in GAAP measures, but excluded for the purpose of determining non-GAAP gross profit, EBIT, earnings and earnings per share. Non-GAAP gross profit and EBIT, earnings and earnings per share information adjusted for these items are 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 non-GAAP to GAAP disclosure for recast financial information are set forth below. Tables that reconcile the company's non-GAAP to GAAP disclosures prior to the accounting changes are set forth in the earnings press release or investor presentation for the relevant period.

MEAD JOHNSON NUTRITION COMPANY
RECONCILIATION OF RECAST NON-GAAP TO RECAST GAAP RESULTS
(Dollars in millions, except per share data)
(UNAUDITED)
 
 
 
 
 
 
 
Non-GAAP to GAAP Reconciliation
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2009
 
2010
 
2011
 
2012
 
2013
 
 
 
 
 
 
 
FY
 
FY
 
FY
 
Q1
 
Q2
 
Q3
 
Q4
 
FY
 
Q1
 
Q2
 
Q3
 
Q4
 
FY
Gross Profit
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Recast GAAP Results
$
1,841.1

 
$
1,995.2

 
$
2,286.0

 
$
613.8

 
$
635.6

 
$
565.6

 
$
582.5

 
$
2,397.5

 
$
652.9

 
$
673.3

 
$
684.5

 
$
661.5

 
$
2,672.2

MTM allocation to Cost of Sales
10.1

 
(2.2
)
 
30.7

 
—

 
5.1

 
(1.1
)
 
17.2

 
21.2

 
(5.2
)
 
(1.6
)
 
(2.5
)
 
8.0

 
(1.3
)
Recast Non-GAAP Results
1,851.2

 
1,993.0

 
2,316.7

 
613.8

 
640.7

 
564.5

 
599.7

 
2,418.7

 
647.7

 
671.7

 
682.0

 
669.5

 
2,670.9

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings Before Interest and Income Taxes
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Recast GAAP Results
$
661.8

 
$
701.9

 
$
698.2

 
$
250.9

 
$
244.9

 
$
192.7

 
$
146.8

 
$
835.3

 
$
273.5

 
$
246.8

 
$
250.7

 
$
203.9

 
$
974.9

Previously Reported Specified Items (1)
81.1

 
71.4

 
93.9

 
4.2

 
7.3

 
7.7

 
18.1

 
37.3

 
1.6

 
8.0

 
27.2

 
8.4

 
45.2

Mark-to-market pension accounting (1)
26.7

 
(5.9
)
 
91.5

 
—

 
14.8

 
(3.1
)
 
47.2

 
58.9

 
(15.2
)
 
(4.7
)
 
(7.3
)
 
15.2

 
(12.0
)
Recast Non-GAAP Results
769.6

 
767.4

 
883.6

 
255.1

 
267.0

 
197.3

 
212.1

 
931.5

 
259.9

 
250.1

 
270.6

 
227.5

 
1,008.1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Earnings Attributable to Shareholders
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Recast GAAP Results
$
388.7

 
$
467.1

 
$
456.7

 
$
167.0

 
$
163.6

 
$
146.3

 
$
103.5

 
$
580.4

 
$
188.0

 
$
172.0

 
$
171.3

 
$
152.5

 
$
683.8

Previously Reported Specified Items (1)
81.1

 
71.4

 
93.9

 
4.2

 
7.3

 
7.7

 
18.1

 
37.3

 
1.6

 
8.0

 
27.2

 
8.4

 
45.2

Mark-to-market pension accounting (1)
26.7

 
(5.9
)
 
91.5

 
—

 
14.8

 
(3.1
)
 
47.2

 
58.9

 
(15.2
)
 
(4.7
)
 
(7.3
)
 
15.2

 
(12.0
)
Tax impact of Specified Items and Specified Items attributable to Noncontrolling Interests (1)
(33.8
)
 
(23.6
)
 
(62.4
)
 
(1.0
)
 
(7.3
)
 
(2.0
)
 
(22.3
)
 
(32.6
)
 
5.5

 
2.6

 
(1.5
)
 
(8.9
)
 
(2.3
)
Recast Non-GAAP results
462.7

 
509.0

 
579.7

 
170.2

 
178.4

 
148.9

 
146.5

 
644.0

 
179.9

 
177.9

 
189.7

 
167.2

 
714.7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings per Diluted Share
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Recast GAAP Results
$
1.93

 
$
2.27

 
$
2.22

 
$
0.81

 
$
0.80

 
$
0.71

 
$
0.51

 
$
2.83

 
$
0.92

 
$
0.84

 
$
0.84

 
$
0.75

 
$
3.36

Recast Non-GAAP results
2.26

 
2.47

 
2.82

 
0.83

 
0.87

 
0.73

 
0.72

 
3.15

 
0.88

 
0.87

 
0.93

 
0.82

 
3.51

(1) All Specified Items are included in Corporate and Other.

7



MEAD JOHNSON NUTRITION COMPANY
CONSOLIDATED EARNINGS METRICS ON AN ANNUAL AND QUARTERLY BASIS
PREVIOUSLY REPORTED AND RECAST NON-GAAP MEASURES
(Dollars in millions, except per share data)
(UNAUDITED)

This table presents previously reported Non-GAAP earnings metrics as well as these metrics recast to reflect the impact of changes in accounting principles related to defined benefit pension and other post-employment benefit plans adopted in the first quarter of 2014.

 
 
 
 
 
 
 
Non-GAAP (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2009
 
2010
 
2011
 
2012
 
2013
 
 
 
 
 
 
 
FY
 
FY
 
FY
 
Q1
 
Q2
 
Q3
 
Q4
 
FY
 
Q1
 
Q2
 
Q3
 
Q4
 
FY
Non-GAAP Gross Profit
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Previously reported Results
$
1,851.8

 
$
1,992.0

 
$
2,314.7

 
$
613.1

 
$
640.0

 
$
563.8

 
$
599.1

 
$
2,416.0

 
$
647.0

 
$
670.9

 
$
681.3

 
$
668.7

 
$
2,667.9

Recast Non-GAAP Gross Profit
1,851.2

 
1,993.0

 
2,316.7

 
613.8

 
640.7

 
564.5

 
599.7

 
2,418.7

 
647.7

 
671.7

 
682.0

 
669.5

 
2,670.9

Non-GAAP Earnings Before Interest and Income Taxes
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Previously reported Non-GAAP Results
$
760.7

 
$
754.3

 
$
868.0

 
$
253.0

 
$
255.6

 
$
190.9

 
$
207.8

 
$
907.3

 
$
250.7

 
$
239.6

 
$
265.9

 
$
213.6

 
$
969.8

Previously reported settlement charges
10.6

 
10.6

 
9.7

 
—

 
9.0

 
4.1

 
2.1

 
15.2

 
6.9

 
8.3

 
2.5

 
11.6

 
29.3

(Inc)/Dec in periodic costs
(1.7
)
 
2.5

 
5.9

 
2.1

 
2.4

 
2.3

 
2.2

 
9.0

 
2.3

 
2.2

 
2.2

 
2.3

 
9.0

Recast Non-GAAP results
769.6

 
767.4

 
883.6

 
255.1

 
267.0

 
197.3

 
212.1

 
931.5

 
259.9

 
250.1

 
270.6

 
227.5

 
1,008.1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-GAAP Net Earnings Attributable to Shareholders
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Previously reported Non-GAAP Results
$
456.3

 
$
498.2

 
$
573.1

 
$
167.4

 
$
171.2

 
$
144.8

 
$
146.7

 
$
630.1

 
$
174.0

 
$
171.0

 
$
184.7

 
$
157.9

 
$
687.6

Recast Non-GAAP results
462.7

 
509.0

 
579.7

 
170.2

 
178.4

 
148.9

 
146.5

 
644.0

 
179.9

 
177.9

 
189.7

 
167.2

 
714.7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-GAAP Earnings per Diluted Share
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Previously reported Non-GAAP Results
$
2.23

 
$
2.42

 
$
2.79

 
$
0.82

 
$
0.83

 
$
0.71

 
$
0.72

 
$
3.08

 
$
0.85

 
$
0.84

 
$
0.91

 
$
0.78

 
$
3.38

Recast Non-GAAP results
2.26

 
2.47

 
2.82

 
0.83

 
0.87

 
0.73

 
0.72

 
3.15

 
0.88

 
0.87

 
0.93

 
0.82

 
3.51

(1) For a reconciliation of the company's Non-GAAP to GAAP measures refer to page 7.





8


MEAD JOHNSON NUTRITION COMPANY
CONSOLIDATED EARNINGS METRICS ON AN ANNUAL AND QUARTERLY BASIS
PREVIOUSLY REPORTED AND RECAST NON-GAAP MEASURES
(Dollars in millions, except per share data)
(UNAUDITED)

This table presents previously reported Non-GAAP earnings metrics as well as these metrics recast to reflect the impact of changes in accounting principles related to defined benefit pension and other post-employment benefit plans adopted in the first quarter of 2014.
 
 
 
 
 
 
 
Non-GAAP (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2009
 
2010
 
2011
 
2012
 
2013
 
 
 
 
 
 
 
FY
 
FY
 
FY
 
Q1
 
Q2
 
Q3
 
Q4
 
FY
 
Q1
 
Q2
 
Q3
 
Q4
 
FY
Gross Margin
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Previously reported Results
65.5
%
 
63.4
%
 
63.0
%
 
62.1
%
 
63.2
%
 
61.2
%
 
61.1
%
 
61.9
%
 
62.3
%
 
63.6
%
 
65.1
%
 
63.0
%
 
63.5
%
Recast Non-GAAP results
65.5
%
 
63.4
%
 
63.0
%
 
62.2
%
 
63.3
%
 
61.3
%
 
61.1
%
 
62.0
%
 
62.4
%
 
63.7
%
 
65.2
%
 
63.1
%
 
63.6
%
EBIT as a percentage of Net Sales
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Previously reported Non-GAAP results
26.9
%
 
24.0
%
 
23.6
%
 
25.6
%
 
25.2
%
 
20.7
%
 
21.2
%
 
23.3
%
 
24.2
%
 
22.7
%
 
25.4
%
 
20.1
%
 
23.1
%
Recast Non-GAAP results
27.2
%
 
24.4
%
 
24.0
%
 
25.9
%
 
26.4
%
 
21.4
%
 
21.6
%
 
23.9
%
 
25.0
%
 
23.7
%
 
25.9
%
 
21.4
%
 
24.0
%
Non-GAAP ETR
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Previously reported Non-GAAP Results
30.1
%
 
28.6
%
 
28.5
%
 
27.5
%
 
25.8
%
 
17.4
%
 
24.5
%
 
24.3
%
 
25.6
%
 
24.1
%
 
26.3
%
 
20.0
%
 
24.2
%
Recast Non-GAAP results
30.1
%
 
28.4
%
 
29.0
%
 
26.9
%
 
26.3
%
 
18.1
%
 
26.3
%
 
24.8
%
 
26.0
%
 
24.6
%
 
25.7
%
 
20.8
%
 
24.4
%
(1) For a reconciliation of the company's Non-GAAP to GAAP measures refer to page 7.


9