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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Mead Johnson Nutrition Company (delisted) | NYSE:MJN | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 89.98 | 0 | 01:00:00 |
Delaware
|
|
80-0318351
|
(State or Other Jurisdiction of
Incorporation or Organization)
|
|
(I.R.S. Employer
Identification No.)
|
Large accelerated filer
x
|
Accelerated filer
o
|
Non-accelerated filer
o
|
Smaller reporting company
o
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
NET SALES
|
$
|
962.1
|
|
|
$
|
1,094.4
|
|
Cost of Products Sold
|
347.6
|
|
|
393.5
|
|
||
GROSS PROFIT
|
614.5
|
|
|
700.9
|
|
||
Operating Expenses:
|
|
|
|
|
|
||
Selling, General and Administrative
|
198.9
|
|
|
233.2
|
|
||
Advertising and Promotion
|
151.8
|
|
|
144.4
|
|
||
Research and Development
|
25.4
|
|
|
25.9
|
|
||
Other (Income)/Expenses—net
|
88.3
|
|
|
12.2
|
|
||
EARNINGS BEFORE INTEREST AND INCOME TAXES
|
150.1
|
|
|
285.2
|
|
||
|
|
|
|
||||
Interest Expense—net
|
26.2
|
|
|
13.8
|
|
||
EARNINGS BEFORE INCOME TAXES
|
123.9
|
|
|
271.4
|
|
||
|
|
|
|
||||
Provision for Income Taxes
|
47.2
|
|
|
64.3
|
|
||
NET EARNINGS
|
76.7
|
|
|
207.1
|
|
||
Less Net Earnings/(Loss) Attributable to Noncontrolling Interests
|
4.0
|
|
|
(0.3
|
)
|
||
NET EARNINGS ATTRIBUTABLE TO SHAREHOLDERS
|
$
|
72.7
|
|
|
$
|
207.4
|
|
Earnings per Share—Basic
|
|
|
|
||||
Net Earnings Attributable to Shareholders
|
$
|
0.39
|
|
|
$
|
1.02
|
|
Earnings per Share—Diluted
|
|
|
|
||||
Net Earnings Attributable to Shareholders
|
$
|
0.39
|
|
|
$
|
1.02
|
|
|
|
|
|
||||
Weighted Average Shares—Basic
|
186.6
|
|
|
202.4
|
|
||
Weighted Average Shares—Diluted
|
186.7
|
|
|
202.9
|
|
||
Dividends Declared per Share
|
$
|
0.4125
|
|
|
$
|
0.4125
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2016
|
|
2015
|
||||
NET EARNINGS
|
|
$
|
76.7
|
|
|
$
|
207.1
|
|
|
|
|
|
|
||||
OTHER COMPREHENSIVE INCOME/(LOSS)
|
|
|
|
|
||||
Foreign Currency Translation Adjustments
|
|
|
|
|
||||
Translation Adjustments
|
|
5.9
|
|
|
(37.7
|
)
|
||
Tax Effect on Foreign Currency Translation Adjustments
|
|
0.2
|
|
|
0.2
|
|
||
Deferred Gains/(Losses) on Derivatives Qualifying as Hedges
|
|
|
|
|
|
|
||
Deferred Gains/(Losses) on Derivatives Qualifying as Hedges for the Period
|
|
(11.6
|
)
|
|
7.4
|
|
||
Reclassification Adjustment for (Gains)/Losses Included in Net Earnings
|
|
(5.5
|
)
|
|
(1.9
|
)
|
||
Tax Effect on Deferred Gains/(Losses) on Derivatives Qualifying as Hedges
|
|
3.8
|
|
|
(1.5
|
)
|
||
OTHER COMPREHENSIVE LOSS
|
|
(7.2
|
)
|
|
(33.5
|
)
|
||
|
|
|
|
|
||||
COMPREHENSIVE INCOME
|
|
69.5
|
|
|
173.6
|
|
||
|
|
|
|
|
||||
Less Comprehensive Income/(Loss) Attributable to Noncontrolling Interests
|
|
3.2
|
|
|
(0.9
|
)
|
||
|
|
|
|
|
||||
COMPREHENSIVE INCOME ATTRIBUTABLE TO SHAREHOLDERS
|
|
$
|
66.3
|
|
|
$
|
174.5
|
|
|
Common
Stock
|
|
Additional
Paid-in
(Distributed)
Capital
|
|
Retained
Earnings
|
|
Treasury
Stock
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Non-
controlling
Interests
|
|
Total
Equity/(Deficit)
|
|
Redeemable
Non-
controlling
Interest
|
||||||||||||||||
Balance as of January 1, 2016
|
$
|
1.9
|
|
|
$
|
(564.2
|
)
|
|
$
|
640.4
|
|
|
$
|
(362.6
|
)
|
|
$
|
(347.8
|
)
|
|
$
|
39.8
|
|
|
$
|
(592.5
|
)
|
|
$
|
—
|
|
Stock-based Compensation Awards (includes tax shortfalls of $0.3)
|
|
|
11.4
|
|
|
(3.5
|
)
|
|
|
|
|
|
|
|
|
|
7.9
|
|
|
|
|
||||||||||
Cash Dividends Declared ($0.4125 per share)
|
|
|
|
|
|
(77.3
|
)
|
|
|
|
|
|
|
|
|
|
|
(77.3
|
)
|
|
|
|
|||||||||
Net Earnings
|
|
|
|
|
|
72.7
|
|
|
|
|
|
|
|
|
4.0
|
|
|
76.7
|
|
|
|
||||||||||
Other Comprehensive Loss
|
|
|
|
|
|
|
|
|
|
|
|
(6.4
|
)
|
|
(0.8
|
)
|
|
(7.2
|
)
|
|
|
||||||||||
Balance as of March 31, 2016
|
$
|
1.9
|
|
|
$
|
(552.8
|
)
|
|
$
|
632.3
|
|
|
$
|
(362.6
|
)
|
|
$
|
(354.2
|
)
|
|
$
|
43.0
|
|
|
$
|
(592.4
|
)
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Balance as of January 1, 2015
|
$
|
2.1
|
|
|
$
|
(641.3
|
)
|
|
$
|
1,775.0
|
|
|
$
|
(362.6
|
)
|
|
$
|
(198.9
|
)
|
|
$
|
9.5
|
|
|
$
|
583.8
|
|
|
$
|
66.0
|
|
Stock-based Compensation Awards (includes excess tax benefits of $3.0)
|
|
|
|
15.8
|
|
|
(7.2
|
)
|
|
|
|
|
|
|
|
|
|
8.6
|
|
|
|
|
|||||||||
Cash Dividends Declared ($0.4125 per share)
|
|
|
|
|
|
|
(83.8
|
)
|
|
|
|
|
|
|
|
|
|
|
(83.8
|
)
|
|
|
|||||||||
Net Earnings
|
|
|
|
|
|
|
207.4
|
|
|
|
|
|
|
|
|
(0.6
|
)
|
|
206.8
|
|
|
0.3
|
|
||||||||
Redeemable Noncontrolling Interest Accretion
|
|
|
|
|
|
|
(6.1
|
)
|
|
|
|
|
|
|
|
|
|
|
(6.1
|
)
|
|
6.1
|
|
||||||||
Other Comprehensive Loss
|
|
|
|
0
|
|
|
|
|
|
|
|
(32.9
|
)
|
|
|
|
(32.9
|
)
|
|
(0.6
|
)
|
||||||||||
Balance as of March 31, 2015
|
$
|
2.1
|
|
|
$
|
(625.5
|
)
|
|
$
|
1,885.3
|
|
|
$
|
(362.6
|
)
|
|
$
|
(231.8
|
)
|
|
$
|
8.9
|
|
|
$
|
676.4
|
|
|
$
|
71.8
|
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
||
Net Earnings
|
$
|
76.7
|
|
|
$
|
207.1
|
|
Adjustments to Reconcile Net Earnings to Net Cash Provided by Operating Activities:
|
|
|
|
|
|
||
Depreciation and Amortization
|
24.9
|
|
|
24.1
|
|
||
Impairment of Long-Lived Assets
|
45.9
|
|
|
—
|
|
||
Other
|
36.0
|
|
|
22.9
|
|
||
Changes in Assets and Liabilities
|
(23.4
|
)
|
|
22.1
|
|
||
Pension and Other Post-employment Benefit Contributions
|
—
|
|
|
(1.7
|
)
|
||
Net Cash Provided by Operating Activities
|
160.1
|
|
|
274.5
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
||
Payments for Capital Expenditures
|
(55.6
|
)
|
|
(46.1
|
)
|
||
Proceeds from Sale of Property, Plant and Equipment
|
0.1
|
|
|
0.2
|
|
||
Net Cash Used in Investing Activities
|
(55.5
|
)
|
|
(45.9
|
)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
||
Proceeds from Short-term Borrowings
|
0.4
|
|
|
—
|
|
||
Repayments of Short-term Borrowings
|
(0.1
|
)
|
|
(4.0
|
)
|
||
Debt Issuance Costs
|
(0.1
|
)
|
|
—
|
|
||
Payments of Dividends
|
(77.4
|
)
|
|
(76.0
|
)
|
||
Stock-based Compensation-related Proceeds and Excess Tax Benefits
|
3.7
|
|
|
6.9
|
|
||
Stock-based Compensation Tax Withholdings
|
(3.5
|
)
|
|
(7.2
|
)
|
||
Net Cash Used in Financing Activities
|
(77.0
|
)
|
|
(80.3
|
)
|
||
Effects of Changes in Exchange Rates on Cash and Cash Equivalents
|
(26.7
|
)
|
|
(12.1
|
)
|
||
NET INCREASE IN CASH AND CASH EQUIVALENTS
|
0.9
|
|
|
136.2
|
|
||
CASH AND CASH EQUIVALENTS:
|
|
|
|
|
|
||
Beginning of Period
|
1,701.4
|
|
|
1,297.7
|
|
||
End of Period
|
$
|
1,702.3
|
|
|
$
|
1,433.9
|
|
|
|
Three Months Ended March 31,
|
||||||
(Dollars and shares in millions, except per share data)
|
|
2016
|
|
2015
|
||||
Basic earnings per share:
|
|
|
|
|
|
|
||
Weighted-average shares outstanding
|
|
186.6
|
|
|
202.4
|
|
||
Net earnings attributable to shareholders
|
|
$
|
72.7
|
|
|
$
|
207.4
|
|
Dividends and undistributed earnings attributable to unvested shares
|
|
(0.3
|
)
|
|
(0.4
|
)
|
||
Net earnings attributable to shareholders used for basic earnings per share calculation
|
|
$
|
72.4
|
|
|
$
|
207.0
|
|
Net earnings attributable to shareholders per share
|
|
$
|
0.39
|
|
|
$
|
1.02
|
|
Diluted earnings per share:
|
|
|
|
|
|
|
||
Weighted-average shares outstanding
|
|
186.6
|
|
|
202.4
|
|
||
Incremental shares outstanding assuming the exercise/vesting of dilutive stock options/performance shares
|
|
0.1
|
|
|
0.5
|
|
||
Weighted-average shares — diluted
|
|
186.7
|
|
|
202.9
|
|
||
Net earnings attributable to shareholders
|
|
$
|
72.7
|
|
|
$
|
207.4
|
|
Dividends and undistributed earnings attributable to unvested shares
|
|
(0.3
|
)
|
|
(0.4
|
)
|
||
Net earnings attributable to shareholders used for diluted earnings per share calculation
|
|
$
|
72.4
|
|
|
$
|
207.0
|
|
Net earnings attributable to shareholders per share
|
|
$
|
0.39
|
|
|
$
|
1.02
|
|
|
|
Three Months Ended March 31,
|
||||||||||||||
|
|
Net Sales
|
|
Earnings Before Interest and Income Taxes
|
||||||||||||
(Dollars in millions)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Asia
|
|
$
|
500.6
|
|
|
$
|
581.0
|
|
|
$
|
169.1
|
|
|
$
|
231.5
|
|
Latin America
|
|
160.3
|
|
|
204.4
|
|
|
40.8
|
|
|
57.3
|
|
||||
North America/Europe
|
|
301.2
|
|
|
309.0
|
|
|
82.0
|
|
|
78.3
|
|
||||
Total reportable segments
|
|
962.1
|
|
|
1,094.4
|
|
|
291.9
|
|
|
367.1
|
|
||||
Corporate and Other
|
|
—
|
|
|
—
|
|
|
(141.8
|
)
|
|
(81.9
|
)
|
||||
Total
|
|
$
|
962.1
|
|
|
$
|
1,094.4
|
|
|
$
|
150.1
|
|
|
$
|
285.2
|
|
Restructuring Charges
|
|
Three Months Ended
|
||
(Dollars in millions)
|
|
March 31, 2016
|
||
Other (Income)/Expenses- net
|
|
|
||
Severance and Employee Benefits
|
|
$
|
8.2
|
|
Other Exist Costs
|
|
0.6
|
|
|
Asset Write-off
|
|
0.3
|
|
|
|
|
$
|
9.1
|
|
Restructuring Reserves
|
|
Severance and Employee Benefits
(1)
|
|
Contract Termination
(2)
|
|
Other Exist Costs
|
||||||
(Dollars in millions)
|
|
|
|
|
|
|
||||||
Balance at December 31, 2015
|
|
$
|
9.5
|
|
|
$
|
10.3
|
|
|
$
|
—
|
|
Charges
|
|
8.2
|
|
|
—
|
|
|
0.6
|
|
|||
Cash Payments
|
|
(6.9
|
)
|
|
—
|
|
|
(0.6
|
)
|
|||
Balance at March 31, 2016
|
|
$
|
10.8
|
|
|
$
|
10.3
|
|
|
$
|
—
|
|
|
|
Three Months Ended March 31,
|
||||||
(Dollars in millions)
|
|
2016
|
|
2015
|
||||
Stock options
|
|
$
|
2.1
|
|
|
$
|
1.9
|
|
Performance share awards
|
|
2.3
|
|
|
4.4
|
|
||
Restricted stock units
|
|
3.4
|
|
|
2.7
|
|
||
Total pre-tax stock-based compensation expense
|
|
$
|
7.8
|
|
|
$
|
9.0
|
|
Net tax benefit related to stock-based compensation expense
|
|
$
|
(2.7
|
)
|
|
$
|
(3.1
|
)
|
(Shares in millions)
|
|
Options/Shares Granted
|
|
Weighted-
Average Grant
Date Fair Value
|
|||
Stock options
|
|
1.1
|
|
|
$
|
13.87
|
|
Performance share awards
|
|
0.2
|
|
|
$
|
70.48
|
|
Restricted stock units
|
|
0.3
|
|
|
$
|
73.76
|
|
(Dollars in millions)
|
|
Unrecognized
Compensation
Expense
|
|
Expected
Weighted-Average
Period to be
Recognized
(years)
|
||
Stock options
|
|
$
|
20.3
|
|
|
2.1
|
Performance share awards
|
|
10.6
|
|
|
1.5
|
|
Restricted stock units
|
|
45.5
|
|
|
2.8
|
|
|
|
$
|
76.4
|
|
|
|
|
|
Three Months Ended March 31,
|
||||||||||||||
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||
(Dollars in millions)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Service cost – benefits earned during the period
|
|
$
|
0.7
|
|
|
$
|
0.8
|
|
|
$
|
0.3
|
|
|
$
|
0.3
|
|
Interest cost on projected benefit obligations
|
|
3.0
|
|
|
3.7
|
|
|
0.4
|
|
|
0.5
|
|
||||
Expected return on plan assets
|
|
(4.1
|
)
|
|
(3.5
|
)
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit cost
|
|
$
|
(0.4
|
)
|
|
$
|
1.0
|
|
|
$
|
0.7
|
|
|
$
|
0.8
|
|
Net Actuarial (Gains)/Losses
|
|
6.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total net periodic expense/(benefit)
|
|
$
|
5.7
|
|
|
$
|
1.0
|
|
|
$
|
0.7
|
|
|
$
|
0.8
|
|
|
|
Three Months Ended March 31,
|
||||||
(Dollars in millions)
|
|
2016
|
|
2015
|
||||
Venezuela long-lived asset impairments
|
|
$
|
45.9
|
|
|
$
|
—
|
|
Foreign exchange (gains)/losses - net
|
|
33.7
|
|
|
(2.8
|
)
|
||
Restructuring, severance and other related costs
|
|
9.3
|
|
|
2.6
|
|
||
Legal settlements and other - net
|
|
(0.6
|
)
|
|
12.4
|
|
||
Other (income)/expenses - net
|
|
$
|
88.3
|
|
|
$
|
12.2
|
|
(Dollars in millions)
|
|
March 31, 2016
|
|
December 31, 2015
|
||||
Finished goods
|
|
$
|
234.0
|
|
|
$
|
251.7
|
|
Work in process
|
|
73.7
|
|
|
70.3
|
|
||
Raw and packaging materials
|
|
179.2
|
|
|
162.9
|
|
||
Inventories
|
|
$
|
486.9
|
|
|
$
|
484.9
|
|
(Dollars in millions)
|
|
March 31, 2016
|
|
December 31, 2015
|
||||
Land
|
|
$
|
8.3
|
|
|
$
|
12.3
|
|
Buildings and improvements
|
|
724.2
|
|
|
729.6
|
|
||
Machinery, equipment and fixtures
|
|
797.8
|
|
|
786.5
|
|
||
Construction in progress
|
|
102.2
|
|
|
123.6
|
|
||
Accumulated depreciation
|
|
(705.5
|
)
|
|
(688.0
|
)
|
||
Property, plant and equipment — net
|
|
$
|
927.0
|
|
|
$
|
964.0
|
|
|
|
As of March 31, 2016
|
|
As of December 31, 2015
|
||||||||||||||||||||
(Dollars in millions)
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net Book
Value
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net Book
Value
|
||||||||||||
Indefinite-lived intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Trademark
(1)
.
|
|
$
|
15.3
|
|
|
$
|
—
|
|
|
$
|
15.3
|
|
|
$
|
16.9
|
|
|
$
|
—
|
|
|
$
|
16.9
|
|
Non-compete agreement
(1)
.
|
|
3.0
|
|
|
—
|
|
|
3.0
|
|
|
3.3
|
|
|
—
|
|
|
3.3
|
|
||||||
Sub-total
|
|
18.3
|
|
|
—
|
|
|
18.3
|
|
|
20.2
|
|
|
—
|
|
|
20.2
|
|
||||||
Amortizable intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Computer software
|
|
138.1
|
|
|
(106.8
|
)
|
|
31.3
|
|
|
136.7
|
|
|
(103.0
|
)
|
|
33.7
|
|
||||||
Distributor-customer relationship
(2)
.
|
|
1.5
|
|
|
(0.6
|
)
|
|
0.9
|
|
|
1.6
|
|
|
(0.6
|
)
|
|
1.0
|
|
||||||
Sub-total
|
|
139.6
|
|
|
(107.4
|
)
|
|
32.2
|
|
|
138.3
|
|
|
(103.6
|
)
|
|
34.7
|
|
||||||
Total other intangible assets
|
|
$
|
157.9
|
|
|
$
|
(107.4
|
)
|
|
$
|
50.5
|
|
|
$
|
158.5
|
|
|
$
|
(103.6
|
)
|
|
$
|
54.9
|
|
(Dollars in millions)
|
Asia
|
|
Latin America
|
|
North America/
Europe
|
|
Total
|
||||||||
Balance as of January 1, 2016
|
$
|
—
|
|
|
$
|
107.0
|
|
|
$
|
19.0
|
|
|
$
|
126.0
|
|
Translation adjustments
|
—
|
|
|
(6.0
|
)
|
|
—
|
|
|
(6.0
|
)
|
||||
Balance as of March 31, 2016
|
$
|
—
|
|
|
$
|
101.0
|
|
|
$
|
19.0
|
|
|
$
|
120.0
|
|
|
|
|
|
|
|
|
|
||||||||
Balance as of January 1, 2015
|
$
|
—
|
|
|
$
|
143.7
|
|
|
$
|
19.0
|
|
|
$
|
162.7
|
|
Translation adjustments
|
—
|
|
|
(3.4
|
)
|
|
—
|
|
|
(3.4
|
)
|
||||
Balance as of March 31, 2015
|
$
|
—
|
|
|
$
|
140.3
|
|
|
$
|
19.0
|
|
|
$
|
159.3
|
|
(Dollars in millions)
|
|
March 31, 2016
|
|
December 31, 2015
|
||||
Principal Value:
|
|
|
|
|
|
|
||
4.900% Notes due 2019 (“2019 Notes”)
|
|
$
|
700.0
|
|
|
$
|
700.0
|
|
3.000% Notes due 2020 (“2020 Notes”)
|
|
750.0
|
|
|
750.0
|
|
||
4.125% Notes due 2025 (“2025 Notes”)
|
|
750.0
|
|
|
750.0
|
|
||
5.900% Notes due 2039 (“2039 Notes”)
|
|
300.0
|
|
|
300.0
|
|
||
4.600% Notes due 2044 (“2044 Notes”)
|
|
500.0
|
|
|
500.0
|
|
||
Sub-total
|
|
3,000.0
|
|
|
3,000.0
|
|
||
Adjustments to Principal Value:
|
|
|
|
|
|
|
||
Unamortized basis adjustment for settled interest rate swaps
|
|
6.6
|
|
|
7.0
|
|
||
Unamortized bond discount
|
|
(4.7
|
)
|
|
(4.8
|
)
|
||
Unamortized debt issuance costs
|
|
(21.1
|
)
|
|
(21.6
|
)
|
||
Fair-value interest rate swaps
|
|
31.8
|
|
|
0.4
|
|
||
Long-term debt
|
|
$
|
3,012.6
|
|
|
$
|
2,981.0
|
|
|
|
Three Months Ended March 31,
|
||||||
(Dollars in millions)
|
|
2016
|
|
2015
|
||||
Interest expense
|
|
$
|
29.0
|
|
|
$
|
16.4
|
|
Interest income
|
|
(2.8
|
)
|
|
(2.6
|
)
|
||
Interest expense-net
|
|
$
|
26.2
|
|
|
$
|
13.8
|
|
(Dollars in millions)
|
Hedge Designation
|
Balance Sheet Location
|
|
March 31, 2016
|
|
December 31, 2015
|
||||
Foreign exchange contracts
|
Cash Flow
|
Prepaid expenses and other assets
|
|
$
|
1.8
|
|
|
$
|
6.4
|
|
Interest rate swaps
|
Fair Value
|
Other assets
|
|
31.8
|
|
|
3.9
|
|
||
Foreign exchange contracts
|
Cash Flow
|
Accrued expenses
|
|
(11.2
|
)
|
|
(0.9
|
)
|
||
Interest rate swaps
|
Fair Value
|
Other liabilities
|
|
—
|
|
|
(3.5
|
)
|
||
Commodity contracts
|
Cash Flow
|
Accrued expenses
|
|
(0.1
|
)
|
|
(0.2
|
)
|
||
Net asset/(liability) of derivatives designated as hedging items
|
|
|
|
$
|
22.3
|
|
|
$
|
5.7
|
|
(Dollars in millions)
|
|
2016
|
|
2015
|
||||
Balance—January 1
|
|
$
|
10.1
|
|
|
$
|
10.4
|
|
Derivatives qualifying as cash flow hedges deferred in other comprehensive income
|
|
(11.9
|
)
|
|
8.0
|
|
||
Derivatives qualifying as cash flow hedges reclassified to cost of products sold (effective portion)
|
|
(6.3
|
)
|
|
(2.4
|
)
|
||
Change in deferred taxes
|
|
4.2
|
|
|
(1.5
|
)
|
||
Balance—March 31
|
|
$
|
(3.9
|
)
|
|
$
|
14.5
|
|
(Dollars in millions)
|
|
Notional Amount of Underlying
|
|
Fixed Rate Received
|
|
Variable Rate Paid
(U.S. 3 Month LIBOR +)
|
|
Fair Value Asset
|
||||||
Swaps associated with the 2019 Notes
|
|
$
|
700.0
|
|
|
4.9
|
%
|
|
3.14
|
%
|
|
$
|
16.5
|
|
Swaps associated with the 2020 Notes
|
|
$
|
750.0
|
|
|
3.0
|
%
|
|
1.38
|
%
|
|
$
|
15.3
|
|
(Dollars and shares in millions)
|
|
Common Shares
Issued
|
|
Treasury Stock
|
|
Cost of Treasury
Stock
|
||||
Balance as of January 1, 2016
|
|
191.4
|
|
|
4.9
|
|
|
$
|
362.6
|
|
Stock-based compensation
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
Balance as of March 31, 2016
|
|
191.6
|
|
|
4.9
|
|
|
$
|
362.6
|
|
|
|
|
|
|
|
|
||||
Balance as of January 1, 2015
|
|
207.2
|
|
|
4.9
|
|
|
$
|
362.6
|
|
Stock-based compensation
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
Balance as of March 31, 2015
|
|
207.5
|
|
|
4.9
|
|
|
$
|
362.6
|
|
(Dollars in millions)
|
|
Foreign Currency Translation Adjustments
|
|
Deferred Gains/(Losses) on Derivatives Qualifying as Hedges
|
|
Pension and Other Post-employment Benefits
|
|
Total
|
|
Noncontrolling Interest
|
|
Redeemable Noncontrolling Interest
|
|||||||||||||
Balance as of January 1, 2016
|
|
$
|
(329.8
|
)
|
|
$
|
(17.2
|
)
|
|
$
|
(0.8
|
)
|
|
$
|
(347.8
|
)
|
|
$
|
(12.7
|
)
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Deferred Gains/(Losses)
|
|
6.7
|
|
|
(11.6
|
)
|
|
|
|
|
(4.9
|
)
|
|
(0.8
|
)
|
(1
|
)
|
|
|
||||||
Reclassification Adjustment for (Gains)/Losses Included in Net Earnings
|
|
|
|
(5.5
|
)
|
|
|
|
|
(5.5
|
)
|
|
|
|
|
||||||||||
Tax Benefit/(Expense)
|
|
0.2
|
|
|
3.8
|
|
|
|
|
|
4.0
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance as of March 31, 2016
|
|
$
|
(322.9
|
)
|
|
$
|
(30.5
|
)
|
|
$
|
(0.8
|
)
|
|
$
|
(354.2
|
)
|
|
$
|
(13.5
|
)
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance as of January 1, 2015
|
|
$
|
(180.4
|
)
|
|
$
|
(17.8
|
)
|
|
$
|
(0.7
|
)
|
|
$
|
(198.9
|
)
|
|
$
|
1.9
|
|
|
$
|
(21.6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Deferred Gains/(Losses)
|
|
(37.1
|
)
|
|
7.4
|
|
(2)
|
|
|
|
(29.7
|
)
|
|
|
|
(1
|
)
|
(0.6
|
)
|
||||||
Reclassification Adjustment for (Gains)/Losses Included in Net Earnings
|
|
|
|
|
(1.9
|
)
|
|
|
|
|
(1.9
|
)
|
|
|
|
|
|
|
|||||||
Tax Benefit/(Expense)
|
|
0.2
|
|
|
(1.5
|
)
|
|
|
|
|
(1.3
|
)
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance as of March 31, 2015
|
|
$
|
(217.3
|
)
|
|
$
|
(13.8
|
)
|
|
$
|
(0.7
|
)
|
|
$
|
(231.8
|
)
|
|
$
|
1.9
|
|
|
$
|
(22.2
|
)
|
|
Three Months Ended March 31,
|
||||||||||||||||||||||
|
Affected Statement of Earnings Lines
|
|
|
|
|
||||||||||||||||||
(Dollars in millions)
|
Cost of Products Sold
|
|
Tax Benefit/(Expense)
|
|
Net
|
||||||||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||||||
Deferred Gains/(Losses) on Derivatives Qualifying as Hedges:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Forward Exchange Contracts
|
$
|
6.3
|
|
|
$
|
2.4
|
|
|
$
|
(0.6
|
)
|
|
$
|
(0.6
|
)
|
|
$
|
5.7
|
|
|
$
|
1.8
|
|
Commodity Contracts
|
(0.4
|
)
|
|
(0.1
|
)
|
|
0.2
|
|
|
0.1
|
|
|
(0.2
|
)
|
|
—
|
|
||||||
Interest Rate Forward Swap
|
(0.4
|
)
|
|
(0.4
|
)
|
|
0.1
|
|
|
0.1
|
|
|
(0.3
|
)
|
|
(0.3
|
)
|
||||||
Total Reclassifications
|
$
|
5.5
|
|
|
$
|
1.9
|
|
|
$
|
(0.3
|
)
|
|
$
|
(0.4
|
)
|
|
$
|
5.2
|
|
|
$
|
1.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
The following charges, which are not indicative of ongoing results: foreign exchange losses and long-lived asset impairment charges in Venezuela (
$78.2 million
), a restructuring charge related to Fuel for Growth (
$9.1 million
) and pension mark-to-market re-measurement (
$6.1 million
);
|
•
|
Lower sales in Venezuela due to intentionally reduced shipments;
|
•
|
Lower sales in China due to fast growing consumer demand for imported products and a shift in preference toward digital and baby store purchasing channels in 2015. As noted below, the Company has launched both imported and most recently super high premium product offerings in China in response to such demand; and
|
•
|
The impact of adverse foreign currency exchange across a broad band of markets.
|
•
|
Sequential improvement from the fourth quarter of 2015 in sales in Asia, Latin America and for the consolidated Company, excluding the impact of foreign exchange. Sales in North America/Europe were lower than the fourth quarter of 2015;
|
•
|
In China, we saw improved sales momentum from our fully imported product line which also drove channel expansion in the market. At the end of the first quarter of 2016, we announced the launch of a super high premium product;
|
•
|
Operational expense savings from Fuel for Growth which were reinvested in advertising and promotion; and
|
•
|
Earnings per share benefits following share repurchases made in the third and fourth quarters of 2015.
|
|
|
Three Months Ended March 31,
|
|
|
|
% of Net Sales
|
|||||||||||
(Dollars in millions, except per share data)
|
|
2016
|
|
2015
|
|
% Change
|
|
2016
|
|
2015
|
|||||||
Net Sales
|
|
$
|
962.1
|
|
|
$
|
1,094.4
|
|
|
(12
|
)%
|
|
|
|
|
||
Gross Profit
|
|
614.5
|
|
|
700.9
|
|
|
(12
|
)%
|
|
64
|
%
|
|
64
|
%
|
||
Operating Expenses
|
|
464.4
|
|
|
415.7
|
|
|
12
|
%
|
|
48
|
%
|
|
38
|
%
|
||
Earnings before Interest and Income Taxes
|
|
150.1
|
|
|
285.2
|
|
|
(47
|
)%
|
|
16
|
%
|
|
26
|
%
|
||
Interest Expense—net
|
|
26.2
|
|
|
13.8
|
|
|
90
|
%
|
|
3
|
%
|
|
1
|
%
|
||
Earnings before Income Taxes
|
|
123.9
|
|
|
271.4
|
|
|
(54
|
)%
|
|
13
|
%
|
|
25
|
%
|
||
Provision for Income Taxes
|
|
47.2
|
|
|
64.3
|
|
|
(27
|
)%
|
|
5
|
%
|
|
6
|
%
|
||
Effective Tax Rate
|
|
38.1
|
%
|
|
23.7
|
%
|
|
|
|
|
|
|
|||||
Net Earnings
|
|
76.7
|
|
|
207.1
|
|
|
(63
|
)%
|
|
8
|
%
|
|
19
|
%
|
||
Less: Net Earnings/(Loss) Attributable to Noncontrolling Interests
|
|
4.0
|
|
|
(0.3
|
)
|
|
n/m
|
|
|
—
|
%
|
|
—
|
%
|
||
Net Earnings Attributable to Shareholders
|
|
$
|
72.7
|
|
|
$
|
207.4
|
|
|
(65
|
)%
|
|
8
|
%
|
|
19
|
%
|
Weighted-Average Common Shares— Diluted
|
|
186.7
|
|
|
202.9
|
|
|
|
|
|
|
|
|||||
Earnings per Common Share—Diluted
|
|
$
|
0.39
|
|
|
$
|
1.02
|
|
|
(62
|
)%
|
|
|
|
|
|
|
Three Months Ended March 31,
|
||||||
(Dollars in millions)
|
|
2016
|
|
2015
|
||||
Venezuela foreign exchange losses and long-lived asset impairments
|
|
$
|
78.2
|
|
|
$
|
—
|
|
Restructuring, severance and other related costs
|
|
9.9
|
|
|
2.3
|
|
||
Pension and other post-employment adjustments
|
|
6.1
|
|
|
—
|
|
||
Legal settlements and related costs
|
|
—
|
|
|
12.7
|
|
||
Specified Items expense/(income)
|
|
94.2
|
|
|
15.0
|
|
||
Tax matters and the income tax impact on Specified Items
|
|
(3.5
|
)
|
|
(0.2
|
)
|
||
Specified Items attributable to Noncontrolling Interests
|
|
(0.1
|
)
|
|
—
|
|
||
Specified Items after taxes
|
|
$
|
90.6
|
|
|
$
|
14.8
|
|
|
|
Three Months Ended March 31,
|
|
% of Gross Sales
|
||||||||||
(Dollars in millions)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||
Gross Sales
|
|
$
|
1,293.5
|
|
|
$
|
1,414.8
|
|
|
100
|
%
|
|
100
|
%
|
Gross-to-Net Sales Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Women, Infant and Children (“WIC”) Rebates
|
|
183.2
|
|
|
193.6
|
|
|
14
|
%
|
|
14
|
%
|
||
Sales Discounts
|
|
85.7
|
|
|
63.8
|
|
|
7
|
%
|
|
4
|
%
|
||
Returns
|
|
20.9
|
|
|
21.7
|
|
|
2
|
%
|
|
2
|
%
|
||
Other (including Cash Discounts, Coupons)
|
|
41.6
|
|
|
41.3
|
|
|
3
|
%
|
|
3
|
%
|
||
Total Gross-to-Net Sales Adjustments
|
|
331.4
|
|
|
320.4
|
|
|
26
|
%
|
|
23
|
%
|
||
Total Net Sales
|
|
$
|
962.1
|
|
|
$
|
1,094.4
|
|
|
74
|
%
|
|
77
|
%
|
|
|
Three Months Ended March 31,
|
|
|
|
% Change Due to
|
||||||||||||||
(Dollars in millions)
|
|
2016
|
|
2015
|
|
% Change
|
|
Volume
|
|
Price/Mix
|
|
Foreign
Exchange
|
||||||||
Asia
|
|
$
|
500.6
|
|
|
$
|
581.0
|
|
|
(14
|
)%
|
|
(9
|
)%
|
|
—
|
%
|
|
(5
|
)%
|
Latin America
|
|
160.3
|
|
|
204.4
|
|
|
(22
|
)%
|
|
(13
|
)%
|
|
7
|
%
|
|
(16
|
)%
|
||
North America/Europe
|
|
301.2
|
|
|
309.0
|
|
|
(3
|
)%
|
|
(1
|
)%
|
|
—
|
%
|
|
(2
|
)%
|
||
Net Sales
|
|
$
|
962.1
|
|
|
$
|
1,094.4
|
|
|
(12
|
)%
|
|
(8
|
)%
|
|
2
|
%
|
|
(6
|
)%
|
|
|
Three Months Ended March 31,
|
|
|
|||||||
(Dollars in millions)
|
|
2016
|
|
2015
|
|
% Change
|
|||||
Infant formula
|
|
$
|
562.9
|
|
|
$
|
639.2
|
|
|
(12
|
)%
|
Children’s nutrition
|
|
384.0
|
|
|
435.0
|
|
|
(12
|
)%
|
||
Other
|
|
15.2
|
|
|
20.2
|
|
|
(25
|
)%
|
||
Net Sales
|
|
$
|
962.1
|
|
|
$
|
1,094.4
|
|
|
(12
|
)%
|
|
|
Three Months Ended March 31,
|
|
|
|||||||
(Dollars in millions)
|
|
2016
|
|
2015
|
|
% Change
|
|||||
Net Sales
|
|
$
|
962.1
|
|
|
$
|
1,094.4
|
|
|
(12
|
)%
|
Cost of Products Sold
|
|
347.6
|
|
|
393.5
|
|
|
(12
|
)%
|
||
Gross Profit
|
|
$
|
614.5
|
|
|
$
|
700.9
|
|
|
(12
|
)%
|
Gross Margin Percentage
|
|
63.9
|
%
|
|
64.0
|
%
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
% of Net Sales
|
|||||||||||
(Dollars in millions)
|
|
2016
|
|
2015
|
|
% Change
|
|
2016
|
|
2015
|
|||||||
Selling, General and Administrative
|
|
$
|
198.9
|
|
|
$
|
233.2
|
|
|
(15
|
)%
|
|
21
|
%
|
|
21
|
%
|
Advertising and Promotion
|
|
151.8
|
|
|
144.4
|
|
|
5
|
%
|
|
16
|
%
|
|
13
|
%
|
||
Research and Development
|
|
25.4
|
|
|
25.9
|
|
|
(2
|
)%
|
|
3
|
%
|
|
2
|
%
|
||
Other (Income)/Expenses—net
|
|
88.3
|
|
|
12.2
|
|
|
n/m
|
|
|
9
|
%
|
|
1
|
%
|
|
|
Three Months Ended March 31,
|
||||||
(Dollars in millions)
|
|
2016
|
|
2015
|
||||
Venezuela long-lived asset impairments
|
|
$
|
45.9
|
|
|
$
|
—
|
|
Foreign exchange (gains)/losses - net
|
|
33.7
|
|
|
(2.8
|
)
|
||
Restructuring, severance and other related costs
|
|
9.3
|
|
|
2.6
|
|
||
Legal settlements and other - net
|
|
(0.6
|
)
|
|
12.4
|
|
||
Other (income)/expenses - net
|
|
$
|
88.3
|
|
|
$
|
12.2
|
|
|
|
Three Months Ended March 31,
|
|
|
|
% of Net Sales
|
|||||||||||
(Dollars in millions)
|
|
2016
|
|
2015
|
|
% Change
|
|
2016
|
|
2015
|
|||||||
Asia
|
|
$
|
169.1
|
|
|
$
|
231.5
|
|
|
(27
|
)%
|
|
34
|
%
|
|
40
|
%
|
Latin America
|
|
40.8
|
|
|
57.3
|
|
|
(29
|
)%
|
|
26
|
%
|
|
28
|
%
|
||
North America/Europe
|
|
82.0
|
|
|
78.3
|
|
|
5
|
%
|
|
27
|
%
|
|
25
|
%
|
||
Corporate and Other
|
|
(141.8
|
)
|
|
(81.9
|
)
|
|
(73
|
)%
|
|
n/a
|
|
|
n/a
|
|
||
EBIT
|
|
$
|
150.1
|
|
|
$
|
285.2
|
|
|
(47
|
)%
|
|
16
|
%
|
|
26
|
%
|
|
|
Three Months Ended March 31,
|
||||||
(Dollars in millions)
|
|
2016
|
|
2015
|
||||
Cash flow provided by/(used in):
|
|
|
|
|
|
|
||
Operating Activities
|
|
|
|
|
|
|
||
Net Earnings
|
|
$
|
76.7
|
|
|
$
|
207.1
|
|
Depreciation and Amortization
|
|
24.9
|
|
|
24.1
|
|
||
Impairment of Long-Lived Assets
|
|
45.9
|
|
|
—
|
|
||
Other
|
|
36.0
|
|
|
22.9
|
|
||
Changes in Assets and Liabilities
|
|
(23.4
|
)
|
|
22.1
|
|
||
Pension and Other Post-employment Benefit Contributions
|
|
—
|
|
|
(1.7
|
)
|
||
Total Operating Activities
|
|
160.1
|
|
|
274.5
|
|
||
Investing Activities
|
|
(55.5
|
)
|
|
(45.9
|
)
|
||
Financing Activities
|
|
(77.0
|
)
|
|
(80.3
|
)
|
||
Effects of Changes in Exchange Rates on Cash and Cash Equivalents
|
|
(26.7
|
)
|
|
(12.1
|
)
|
||
Net Increase in Cash and Cash Equivalents
|
|
$
|
0.9
|
|
|
$
|
136.2
|
|
(Dollars in millions)
|
|
Principal Amount
|
|
Interest Rate
|
|
Maturity
|
||
2019 Notes
|
|
$
|
700.0
|
|
|
4.900% fixed
|
|
November 1, 2019
|
2020 Notes
|
|
$
|
750.0
|
|
|
3.000% fixed
|
|
November 15, 2020
|
2025 Notes
|
|
$
|
750.0
|
|
|
4.125% fixed
|
|
November 15, 2025
|
2039 Notes
|
|
$
|
300.0
|
|
|
5.900% fixed
|
|
November 1, 2039
|
2044 Notes
|
|
$
|
500.0
|
|
|
4.600% fixed
|
|
June 1, 2044
|
Exhibit
Number
|
|
Exhibit Description
|
|
|
|
10.1
|
|
Form of Nonqualified Stock Option Agreement
|
|
|
|
31.1
|
|
Rule 13a-14(a) and 15d-14(a) Certification of the Chief Executive Officer
|
|
|
|
31.2
|
|
Rule 13a-14(a) and 15d-14(a) Certification of the Chief Financial Officer
|
|
|
|
32.1
|
|
Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
32.2
|
|
Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
MEAD JOHNSON NUTRITION COMPANY
|
|
|
|
|
|
Date:
|
April 28, 2016
|
By:
|
/s/ Michel Cup
|
|
|
|
Michel Cup
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
(Authorized Officer and Principal Financial Officer)
|
1 Year Morgan Stanley DW Str Sat Att Chart |
1 Month Morgan Stanley DW Str Sat Att Chart |
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