Mead Johnson Nutrition (NYSE: MJN) announced the resolution of the antitrust review being conducted into the company’s business in China by the National Development and Reform Commission (NDRC).
As a result of the NDRC’s review, the Commission has assessed administrative penalties against Mead Johnson and a number of other milk formula companies doing business in China. Mead Johnson was assessed a penalty of RMB 203.76 million (approximately US $33 million). The company does not intend to contest the NDRC’s decision.
For financial reporting purposes, this penalty and associated legal costs will be treated as a specified cost and added to those previously identified and reported. The incremental cost to be specified in the third quarter of 2013 will reduce the company’s full year 2013 GAAP earnings by approximately $0.12 per share. As a result, the company expects its 2013 GAAP EPS to be in the range of $3.04 to $3.12. The company reiterates the expectation that its 2013 non-GAAP EPS will be in the range of $3.22 to $3.30.
“China remains one of the company’s most important markets, and Mead Johnson reiterates its commitment to making positive contributions to the communities within which it operates,” said CEO Peter Kasper Jakobsen. “The company will maintain its ongoing efforts to provide safe and high-quality products at good value for babies and young children across China and around the world.”