MJN_2010 Annual Report Final

8/2/2019 MJN_2010 Annual Report Final

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gwggvyyMead Johnson utrition nnual eport 2010


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tonourishtheworldschildrenfor

thebeststartinlife

tobetheworldsleading

nutritioncoMpanyfor

babiesandchildren


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Driving that perormance is a talented, diverse and efective global

team o nearly 6,500 employees who draw inspiration every day

rom our Mission to nourish the worlds children or the best start

in lie. Underpinning that perormance is a powerul combination o

actors and capabilities that makes Mead Johnson uniquely qualied

to achieve its Vision to be the worlds leading nutrition company

or babies and children:

> the large and dynamic industry in which we operate, withvery avorable demographics and undamentals or prot-

able growth;

> a broad and balanced geographic ootprint, with a particularlystrong emerging-market presence;

> a portolio o leading brands and over 70 products to meet thenutritional needs o inants and children;

> the depth and strength o our science and our innovationpipeline;

> our total commitment to quality and continuous improvement;> a diverse global leadership team and strong organizational

capabilities, including those necessary to operate as a stand-

alone independent company; and

> our nancial strength demonstrated by outstanding marginsand excellent cash ow leading to superior shareholder value.

Across our top measured markets, representing about 95 percent o our

global sales, our singular ocus on pediatric nutrition has enabled us to

achieve the number one position by value in inant ormula and the

number two position by value in childrens nutritional supplements.

In 2010, we delivered another year o record sales and earnings,with both growing at 9 percent, on a non-GAAP, constant dollar

basis, versus 2009. Our sales growth was a particularly notable

achievement, not only because it was the largest dollar increase

over the last ve years, but also because it was based on a solid

5 percent volume gain. This perormance was led by our Asia-Latin

America segment, which grew 16 percent, excluding oreign exchange.

In act, our sales outside the United States accounted or 68 percent

o the Company total in 2010, up rom 65 percent in 2009.

The perormance o our stock reects the trust that investors are

placing in Mead Johnson and their condence in our business model,

our strategies, our brands and our people. In 2010, MJN delivered

just under a 45 percent total return to our shareholders, nearly

triple the return generated by the S&P 500 Index.

InternatIonal Growth enGIne The impressive growth

across Asia and Latin America was led by China and Hong Kong, which

together reported sales o $745 million in 2010, and now account

or nearly a quarter o our global revenues. Strong, double-digit

gains were also recorded across numerous other markets in this

segment, including Malaysia and Singapore, as well key Latin American

countries, including Mexico, Brazil, Colombia and Peru.

Our business beneed signicantly rom our increased invest-

ments behind advertising and promotion and in selective sales orce

expansion. In 2010, we increased our spending on these demand-

generation activities by 13 percent worldwide.

We use a three-pillared demand-generation strategy reaching out

directly to parents, communicating important nutritional science

through healthcare proessionals, and partnering with retailers. We

are communicating with consumers in new ways and through new

media to help ensure that our superior science is well understood.

We also broadened and strengthened our sales and distribution

inrastructure in selected high-growth markets, most notably in China

and Brazil. As a result o our ongoing Step Change Program in

China, we now have ull sales and marketing resources in place in

almost 200 cities nearly triple the number rom 2008, with another

50 cities to be added over the coming year.

Sales in Europe accounted or a small percentage o our globalbusiness and are heavily concentrated in specialty ormulas such

as Nutramigen that are primarily distributed through pharmacies.

These very specialized products reinorce Mead Johnsons reputa-

tion or rigorous scientic research and nutritional expertise among

leading scientists, regulators, healthcare proessionals and parents

providing a solid oundation as we look to build our presence in

the region.

toourShareholderS,ColleaGueS&BuSIneSSPartnerS:

THISPASTEAWASTHESECONDSINCEOUINITIALPUBLICOEINGANDOU

ISTULLEAASACOMPLETELINDEPENDENTPUBLICCOMPANASEVIDENCEDBABOADSETOMEASUESMEADJOHNSONNUTITIONOLLOWED

ITSSTONGDEBUTEAWITHANOUTSTANDINGPEOMANCEIN


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IMProVInG ProSPeCtS In the unIted StateS The United

States remains our largest market, and we were able to stabilize

our ull-year sales there, despite continued declines in births and

overall ormula consumption. Our slight U.S. sales increase or 2010

compares to a decline o 10 percent in 2009, and there was steady

improvement in our business during the second hal o the year.

We were able to grow share in a soer market on the strength o

successul new product launches such as Enamil Premium with

Natural Deense Dual Prebiotics and Enamil Premium Newborn

as well as the introduction o our unique plastic tub and rell pouch

packaging system. We also experienced some additional demand

during the closing months o the year, resulting rom the market-

place recall o a competitors product.

eXPandInG FootPrInt In early 2010, we announced our agree-

ment to partner with Almarai, the leading regional ood and dairy

producer in the Middle East. By June, we had ormally established

our new joint venture the International Pediatric NutritionCompany (IPNC), and by December, IPNC was launching its rst

products into the Kingdom o Saudi Arabia. Although the new

Almarai Enamil A+ is currently being imported, beore the end o

2011, the venture will be producing products or amilies across the

Gul Cooperation Council at a new, local, state-o-the-art production

acility being built by Almarai.

Brazil, another key development market or us, accelerated its growth

in 2010. Due to a combination o our entry into the inant ormula

market and the continuing strength and growth o our Sustagen

brand o childrens nutritional supplements, Brazil was our astest-

growing market on a percentage basis last year, moving into our top

10 countries list and contributing to Latin America being our astest-

growing region.

Another market with tremendous, long-term potential is India.

There, we are actively sharing our credentials and nutritional exper-

tise with the local scientic, medical and regulatory communities,

while also careully learning and gaining consumer insights. Overall,

we remain in an investment mode slowly but steadily building our

presence in the marketplace and looking or the best ways to make

meaningul contributions to the growth and development o Indias

inants and children.

FInanCIal FoCuS and oPeratIonal dISCIPlIne Despite

all this growth, and the substantial investments required to support

it, we did not lose sight o the lean mindset that has served us so

well over many years, paying close aention to operational eciency

and overall cost control.

One area o ocus, where we made solid progress in 2010, was man-

aging controllable working capital. We were able to reduce average

working capital to below 9 percent o sales in 2010, rom 12 percent

in 2009, and almost 15 percent in 2008 signicantly beer than

the 11.4 percent rate averaged by our peer companies.

Another o Mead Johnsons historical strengths has been our ability

to drive growth and productivity hand-in-hand. Although it gets

tougher each year, we have a standing target o 3 percent in annual

cost reductions, through various productivity initiatives and ecien-

cies. In 2010, we were able to remove a record amount over $46

million rom our product costs.

We also beneed rom our November 2009 debt renancing,

which cut our interest expense nearly in hal, as well as tax planning

eforts that helped reduce our efective tax rate rom 30 percent

in 2009 to below 29 percent in 2010.

These nancial and operational eciencies acilitated our record

earnings and helped to ofset a $24 million adverse impact rom two

devaluations o the Venezuelan bolivar, cost increases or a number

o key commodities, an $11 million incremental non-cash pension

expense, and $18 million in cost overlaps or various shared services

resulting rom the ongoing transition o IT, nance, and indirect

procurement rom BMS to IBM.

We completed the design o our Global SAP Technology Platorm

during 2010, and went live with the new system in North America

during the ourth quarter. This work is a critical step toward eliminat-

ing the last o the remaining shared service overlaps by the end o

2011 and ully leveraging the eciencies o our new global inra-

structure in 2012 and beyond.

herItaGe oF QualItY and InnoVatIon or more than a

century, Mead Johnson has led the way in developing sae, high-

quality, innovative products to help nourish the worlds children or

the best start in lie. Ours is a business built on the trust o genera-

tions o parents and healthcare proessionals, which is why we havesuch an uncompromising commitment to product saety and quality.

Over the past ve years, more than $60 million o our capital invest-

ments have been directed toward our quality systems and processes,

and we have rigorous quality control capability at each o our seven

manuacturing locations worldwide. This kind o commitment not

only builds and strengthens the reputation o our products and

brands, but also helps make the Mead Johnson logo a seal o approval

or trust mark or consumers across the globe. Even with our impres-

sive perormance record in this area, we are constantly looking or

ways to urther raise quality standards.

DESPITEALLTHISGOWTH

WEDIDNOTLOSESIGHTOTHE

LEANMINDSETTHATHASSEVED

USSOWELLOVEMANEAS


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Perhaps nothing beer symbolizes our Companys ocus on contin-

uous improvement and the advancement o quality and science in

pediatric nutrition than the development o the Mead Johnson

Pediatric Nutrition Institute (PNI). The PNI builds on our heritage o

quality and innovation connecting the latest in scientic technology

and research with cuing-edge manuacturing and quality processes,

as well as developing powerul nutrition educational programs and

materials or academics and healthcare proessionals.

We have established a growing global network o PNI laboratories

and acilities that put us at the oreront o pediatric nutrition science

and quality. Over the past year, we have dedicated two new PNI

locations one in the United States and one in Mexico and broken

ground or a third in China that will open in November 2011. Together,

these three acilities represent an investment o $50 million, above

and beyond our baseline &D spending.

But the Mead Johnson PNI goes ar beyond brick and mortar. It is

a virtual, global entity through which we:

> collaborate with academic institutions around the worldto conduct ground breaking research on the critical nutrition

issues impacting children;

> develop new products to meet the evolving needs o con-sumers and incorporating the most current nutritional science;

> oster and develop strong relationships with organizationsin public health, pediatric medicine, dietetics and child care

to collaborate on initiatives that positively impact the well-

being o children; and

> help bring experts rom various elds together to supportcontinuing education seminars and materials or health

proessionals, sharing the results o research and teaching

best practices in pediatric nutrition.

eVerYthInG StartS wIth Good PeoPle O course, every-

thing we do and have been able to accomplish begins with the talent

and commitment o our people. We have been steadily increasing

our capabilities and improving our management strength and depth

not only driven by the need to achieve ull separation rom our

ormer parent, but also by our desire to beer position ourselves to

take ull advantage o current and uture business opportunities.

It starts at the top, where we added to the strength and depth o

our experienced Board o Directors, with the additions o KimberlyCasiano, Anna Catalano and, most recently, Celeste Clark. These

three businesswomen bring with them an additional richness o

perspective and global operating expertise that will be invaluable

to our success.

Similarly, as a result o our transition to ull corporate indepen-

dence, we have added expertise in a number o key areas in 2010,

including Tax, inance, External Afairs, Compensation & Benets

among others. This additional bench strength has also acilitated

the Boards and the Management Commiees ability to engage in

more robust senior management development and succession plan-

ning to support the organizations long-term continuity and growth.

Another important step in strengthening the Company culture and

team member engagement was the establishment o a unique set

o Core Values to underpin our powerul Mission and Vision. These

values dene what we stand or and help to guide us in terms o

the kind o people we are seeking to aract, develop and retain in

the Mead Johnson organization:

> passionate pursuit o continuous improvement in all we do,

> uncompromising commitment to scientic rigor and productquality,

> unwavering integrity in every relationship we have andaction we take, and

> an environment o openness, respect and high perormance.

Speaking rom our collectively long experience with the Company,

there has never been a more exciting time to be a part o Mead

Johnson. The potential to grow the business sustainably and prot-

ably and to meaningully advance the state o pediatric nutrition has

never been more compelling.

We sincerely appreciate the hard work and dedication o our Mead

Johnson colleagues, the support o our partners, as well as the

condence o our growing base o shareholders. We are tightly ocused

on excellent execution o our strategic business plan to create addedvalue or all our key constituencies.

Sincerely,

Stephen W. Golsby James M. Cornelius

President and Chairman o the Board

Chie Executive Ocer

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SettInGtheStaGeFornewBreaKthrouGhS

While the establishment o the Mead Johnson Pediatric Nutrition Institute

(PNI) involves signicant investments in acilities and equipment, the

real power o the PNI comes rom its ability to connect a virtual global

network o leading scientic experts, research initiatives, white papers and

data sources to urther enhance understanding o the signicant role

early-lie nutrition plays in long-term health outcomes. The goal is then

to efectively translate that understanding into beer nutritional products

and practices or both current and uture generations.

SCIentIFIC rIGor, unCoMProMISInG QualItYMEADJOHNSONSECOGNITIONASAWOLDWIDELEADEINPEDIATIC

NUTITION ESULTS OM THE COMBINATION O OU PASSIONATE

COMMITMENTTOSCIENCEBASEDESEACHANDOUDEEPINSIGHTS

INTOTHENEEDSOCHILDENANDTHEIPAENTS

In 2010, we introduced close to a dozen signicant

product, packaging and ingredient innovations that helped

advance our mission to nourish the worlds children or

the best start in lie.We were the rst to help inants get the doctor-recom-

mended amount o vitamin D through ormula during the

crucial rst three months o lie with the introduction

o Enamil Premium Newborn in the United States

part o a staged approach that takes into account the

varying nutritional needs o inants and children as they

grow and develop.

Support o healthy immune systems was the driving orce

behind the launch o a new, patented prebiotic blend in

inant ormulas in the United States and Mexico, as well as

the addition o the immune response-enhancing ingre-

dient, beta-glucan, to childrens products in a number

o Asian and Latin American markets.

Also new in 2010 was Enamil Premature High-Protein. This

highly specialized ormulation is based on extensive nutri-

tional research by leading neonatologists and reects our

commitment to provide proper nutrition to the most

ragile and vulnerable among the inant population.

O course, our innovation eforts extend beyond nutri-

tional and health benets. The introduction o our unique

plastic tub and rell pouch packaging system ofers addi-

tional value and convenience to parents, while also

having a positive impact on the environment, as a result

o reduced packaging usage and increased recyclability.Importantly, the driving orce behind all o these cre-

ative eforts is our outstanding &D team. epresenting

a wide range o scientic and medical specialties, they

bring a sophisticated, global perspective as well as

curiosity and passion to their work, as they expand

the potential benets o pediatric nutrition every day.

ully integrated with our innovation activities are rigor-

ous programs designed to ensure the saety and quality

o our products. Mead Johnson embeds quality through-

out the product liecycle rom the lab bench to the

production line and throughout the distribution process.

The rigor begins with ingredient quality review and

continues through technology assessment, specication

development, process qualication and long-term sta-

bility studies. We understand the signicance o the trust

placed in us and our products by healthcare proes-

sionals and parents around the world and recognize

that constant vigilance is required to continue earning

that trust.


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roBuStGrowth,ContInuouSIMProVeMentBEVEOBJECTIVEMEASUESALESEANINGSMAKETSHAE

ETUN TO SHAEHOLDES WAS AN IMPESSIVE EA BUT

MEAD JOHNSONS SUCCESS ETENDED A BEOND THE NUMBES

SIGNIICANT POGESS WAS ALSO MADE INCEASING EICIENCIES

LEVEAGINGESOUCESANDEPANDINGCAPABILITIES

Mead Johnson operates in a highly competitive market-

place and continues to ace a challenging economic

environment. So, as gratiying as the 2010 results were,we recognize the need to continuously raise the bar on

perormance in order to meet the challenges o the

new year, exceed the expectations o customers, and

ully capitalize on identied opportunities.

Success is not just keeping up with the competition it

is about creating and sustaining competitive advantage.

In order to truly win, we need to grow aster than the

category and increase our separation rom competing

brands and companies.

While we must continue ofering high quality products

with superior benets, we also need to nurture thebrands behind them. Mead Johnson is investing at

record levels behind its most important brands like

Ena while striving to make that spend as efective

and ecient as possible.

As we have increased our marketing investments, we

have careully measured the results in order to ensure

that our eforts are impacting their intended targets

efectively, driving consumers to choose our brands

bolstering their image and our sales perormance.

In 1959, Enamil inant ormula was launched; and over the

past ve decades, we have transormed Ena into a

powerhouse brand. By understanding consumers needsand concerns and aligning them with relevant benets

built into our products under the Ena banner we have

extended the brands equity across multiple geographies

and stages o development. Today, Ena is a multi-billion

dollar global brand trusted to deliver brain and immu-

nity benets and healthy growth through supplements

or pregnant and lactating women, inant ormula, ollow-

on ormulas, growing-up milks and school-age milks.

We are constantly looking to enhance the reason to

believe in all our brands including the Mead Johnson

brand to reinorce and extend the trust and preer-

ence they have earned among healthcare proessionals

and parents worldwide. To help us best leverage these

valuable corporate assets, we have added to the capac-

ity and capabilities o our Global Marketing team. They

play a key role in aligning brand and innovation strategy

to help deliver a winning new product pipeline, grounded

in consumer insights and the latest science. Also, in col-

laboration with regional marketing leaders, they cra

powerul messaging across a variety o media to help

ensure that our superior products, benets and science

are widely recognized and well understood.

2006

2007

2008

2009

2010 $2.42

$2.23

$1.90

$1.72

$1.63

6

2006

2007

2008

2009

2010 $3.1

$2.8

$2.8

$2.5

$2.3

netSaleS*[INBILLIONS] earnInGSPerShare*

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unwaVerInGInteGrItY,CarInGSuPPortEVE DA MEAD JOHNSON NUTITION EMPLOEES WOLDWIDE

LOOK TO THE COMPANS MISSION AND VISIONO INSPIATION

TOEINOCEWHWEAEINBUSINESSANDWHATWEASPIETO

ACHIEVEANDTOOUSETOCOEVALUESTOEINOCEWHAT

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Linking with and providing a oundation or these CoreValues is the Mead Johnson Standards o Business

Conduct and Ethics, which embody our commitment

to not only complying with the leer o the law, but also

adhering to the highest principles o moral and ethical

behavior. These standards and values guide us and help

ensure that we act with integrity and respect the trust

placed in us by our customers, consumers, ellow employ-

ees, shareholders, regulatory agencies, suppliers, part-

ners and the communities in which we live and work.

Even beyond making these right choices, we are com-

mied to always doing the right thing as a company.

Mead Johnson has been a responsible corporate citizenor more than a century, and we are resolved to build

upon that heritage as we grow our global business

protably and sustainably over time.

As part o our transition to ull corporate independence,

we have been taking a closer look at how beyond

living out our Mission to nourish the worlds children or

the best start in lie we can help ensure that the world

in which they grow up is a lile cleaner, healthier and

beer place to be. As a result o this examination, we

have rened and ormalized our approach to Corporate

Social esponsibility (CS).

awIn-wInForConSuMerSandtheenVIronMent

Our new Enamil reusable tub and rell system not only ofers

increased value and convenience or consumers, but also ofers

the potential or signicant reductions in the carbon ootprint o the

packaging involved. Under a typical scenario, use o our recyclable

tub and environmentally riendly rell boxes involves up to 35 per-

cent less packaging materials, 60 percent less energy usage and

50 percent less greenhouse gas emissions.

OurVs

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Our CS strategy is built along three simple elements:

>Svig Mkpcostering trust through our commitment to

the highest business standards and best nutri-

tional quality

>Pcig evimCommied to a more sustainable business in or-

der to preserve resources or uture generations

>nig CmmiisWorking to create communities where amilies

and individuals can grow and prosper

In addition to holding to the standards and values noted

above, Serving the Marketplace includes our commit-

ments to quality assurance, market responsiveness and

responsible marketing, as well as the nutritional scienceand knowledge-sharing initiatives o the Mead Johnson

Pediatric Nutrition Institute.

elative to Protecting the Environment, we have iden-

tied some key ocus areas or our eforts energy

and water utilization, emissions and waste management,

reduction o packaging impact, and responsible sourcing

o raw materials. These are all aspects o our operations

where we have had past success, but still see additional

opportunities or improvement. We are currently in the

process o establishing various corporate multi-year

environmental targets and ensuring that we have the

appropriate systems and measures in place to track our

perormance and progress against those goals over time.

In support o that, over the past year, we have imple-

mented a global waste/resource management strategy;

launched our new Environmental, Health & Saety

Management soware; and ormed a cross-unctional

Eco-Smart Sustainable Packaging Workgroup.

The third pillar o our CS program Nurturing Com-

munities encompasses the way we support people

both inside and outside the organization. Internally,

it reers to our eforts to provide a air and sae work-

place and to encourage employee engagement, diversity

and inclusion. Externally, it addresses how we seek to

maximize the positive impact o local investment across

our broad-based, global enterprise and how we giveback to the communities in which we operate in terms

o philanthropy and volunteer involvement.

Over the past year, we have taken a number o actions to

bolster our philanthropic activities, including the estab-

lishment o the Mead Johnson Nutrition oundation.

We also have launched a program to match charitable

donations by employees with Company contributions.

In general, we are looking to create a more global plat-

orm rom which to carry on our longstanding eforts to

support inants and children in especially ragile and

vulnerable circumstances. We want to build upon our

well-established charitable programs such as eeding

Hope, Helping Hands, aising Lives, One Kilogram o

Hope, Journey o Love, and those addressing metabolic

and rare inant diseases as well as some newer eforts

to support orphanages and children who dont have

parents to provide them with the best start in lie.

We are looking to utilize the ull range o assets we have

at our disposal to make a positive diference in our local

communities and the world leveraging not only nan-

cial contributions, but also our scientic capabilities

and deep insights into pediatric nutritional needs, as well

as our very talented and passionate employees. Like our

global business, we want our positive social impact and

ties to our communities to grow stronger every day.

10

MaKInGadIFFerenCewIthMetaBolICdISorderS

Phenylketonuria (PKU) is a disorder that has been a ocus or MJN around the

world. In China, in cooperation with the Ministry o Health, we initiated a multi-

year, $4-million efort to increase PKU awareness and newborn screening, train

local healthcare proessionals on PKU management, and donate specialty ormula

to help meet the nutritional needs o hundreds o PKU inants rom poverty

stricken amilies. Under the China oundation or Poverty Alleviation, we have

also established and provided initial unding or the Bloom o Hope und to

encourage broader involvement in PKU philanthropy.


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MANAGEMENTCOMMITTEE[picturedL-R]

back row

Peter G. Leempue

SeniorVicePresidentandChiefFinancialOcer

William C. PPool

SeniorVicePresident,

GeneralCounselandSecretary

Dirk Hondmann, Ph.D.SeniorVicePresident,

GlobalResearchandDevelopment

James Jefrey Jobe

SeniorVicePresident,GlobalSupplyChain

fron row

Peter Kasper Jakobsen

President,Americas

Stephen W. Golsby

PresidentandChiefExecutiveOcer

Lynn H. Clark

SeniorVicePresident,HumanResources

Charles M. Urbain

President,AsiaandEurope

BOADODIECTOS[picturedL-R]

op row

James M. Cornelius

ChairmanoftheBoard

Chairmanand

FormerChiefExecutiveOcer,

Bristol-MyersSquibb

Steven M. Altschuler, M.D. 2, 4

ChiefExecutiveOcer,

TheChildrensHospitalofPhiladelphia

Howard B. Bernick 1, 2

President,BernickAdvisoryLimited,

FormerPresidentandChiefExecutiveOcer,

AlbertoCulverCompany

Kimberly A. Casiano 1, 3

FormerPresidentandChiefOperatingOcer,

CasianoCommunicationsInc.

Ellio Sigal, M.D., Ph.D. 4

DirectorandExecutiveVicePresident,

ChiefScienticOcerandPresident

ResearchandDevelopment,

Bristol-MyersSquibb

obert S. Singer 1, 3

FormerChiefExecutiveOcer,

BarillaHolding,S.p.A.

1. Audit Commiee

2. Compensation and Management Development Commiee

3. Nominating and Corporate Governance Commiee

4. Nutrition Science and Technology Commiee

Anna C. Catalano 2, 3

FormerPresident,AmocoOrientOilCompany

ChinaandGroupVicePresident

Marketing,BPplc

botom row

Celeste A. Clark 4

SeniorVicePresident

GlobalPublicPolicyandExternalRelations

andChiefSustainabilityOcer

TheKelloggCompany

Stephen W. Golsby

PresidentandChiefExecutiveOcer,

MeadJohnsonNutritionCompany

Peter G. atclife 1, 3

DirectorandFormerChiefExecutiveOcer,

P&OPrincessInternationalDivision,

CarnivalCorporation

12


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Mead Johnson utrition ompan

2701 atriot bouleard, 4th loor

glenie, llinois 60026

847.832.2420

.meadjohnson.com

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Mead Johnson utrition ompan

is listed and traded on the e yor

toc chane under the ticersmol MJ.

vy

iidends on Mead Johnson common

stoc are declared the board of

irectors on a quarterl asis and are

tpicall paid on or aout the rst da

of Januar, pril, Jul and ctoer.

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by Mellon hareoner erices

480 washinton bouleard

Jerse it, e Jerse 07310

ontact enter:

nited tates

866.207.6566

utside the nited tates

201.680.6578

or the hearin impaired ()

800.231.5469

.nmellon.com/shareoner

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eloie & ouche

1djustment of our 2006 to 2008 results for comparailit to our 2009 results include operatin model chanes primaril in brazil and urope. n brazil, our ailit to operate as a ne stand-alone susidiar as delaed fromeruar 2009 to late eptemer 2009. urin that time, bM distriuted and recorded sales for our products and e conducted maretin actiities. n urope, e hae transitioned to a third-part distriutor model ith bM

temporaril serin as our distriutor. his reduced net sales the amount of the distriutors marin and loered costs for the distriution-related epenses.2djustments for and other separation costs, seerance and other costs, leal, selement and related costs, -related costs and ain on asset sale.3djustments to conform numer of shares outstandin to the post- period.

g

(et ales /arnins er hare) $2,345.1 $2,576.4 $2,882.4 $2,826.5 $3,141.6

Operatingmodelchanges1

(35.9) (35.9) (35.9) Specieditemsbeoreincometaxes2

Incometaximpactonitemsabove

Efectonewlyissuedshares3

djusted non-g results $2,309.2 $2,540.5 $2,846.5 $2,826.5 $3,141.6

$2.34 $2.49 $2.32 $1.99$2.20

(0.46) (0.45) (0.1 1 ) 0.400.35

0.14 0.10 0.08 (0.12)(0.13)

(0.39) (0.42) (0.39) (0.04)

$1.63 $1.72 $1.90 $2.23$2.42

n millions ecept per share data)

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EnamilGentlease

EnamilPremature

EnamilAR

EnalacPremature

EnalacAR

Enacare

MJNMetabolics

Nutramigen

NutramigenAA

NutramigenLGG

Olac

Pregestimil

ProSobee

Alacta

Enamil

EnamilPremium

EnamilA+

EnamilNewborn

Enalac

EnalacA+

Enapro

EnaproA+

EnaproPremium

M

*orcommoneedingproblems,allergies,intolerance,prematurity,metabolicdisorders

kyb

My/*

2006 2007 2008 2009 2010 2006 2007 2008 2009 2010

Alacta

Cal-C-Tose

ChocoMilk

Enagrow

EnagrowPremium

EnagrowA+

EnakidPremium

EnakidA+

EnaschoolA+

Lactum

Sustagen

gwgMk

Expecta

EnaMamaA+

Poly-Vi-Sol

Tri-Vi-Sol

Fer-In-Sol

D-Vi-Sol

vM/M


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MJN_2010 Annual Report Final

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