COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2015

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

In the ordinary course of business, the Company is subject to lawsuits, investigations, government inquiries and claims, including, but not limited to, product liability claims, advertising disputes and inquiries, consumer fraud suits, other commercial disputes, premises claims and employment and environmental, health, and safety matters.

The Company records accruals for contingencies when it is probable that a liability will be incurred and the loss can be reasonably estimated. Although the Company cannot predict with certainty the final resolution of lawsuits, investigations and claims asserted against the Company, MJN does not believe any currently pending legal proceeding to which the Company is a party will have a material effect on the Company’s business or financial condition, although an unfavorable outcome in excess of amounts recognized as of September 30, 2015, with respect to one or more of these proceedings could have a material effect on the Company’s results of operations and cash flows for the periods in which a loss is recognized.

As previously disclosed, on July 28, 2015, the Company entered into a settlement agreement with the SEC fully resolving the SEC’s investigation of certain of the Company’s promotional practices in China during the period 2008 - 2013. Under the terms of the settlement agreement, Mead Johnson agreed to disgorgement, as well as the payment of pre-judgment interest and a penalty, resulting in an aggregate payment of $12.0 million. The settlement agreement provides that the Company neither admits nor denies the allegations in the settlement and order. In addition, on July 28, 2015, the Company was informed by the United States Department of Justice (“DOJ”) that the DOJ has closed its inquiry into possible violations of the Foreign Corrupt Practices Act by the Company.