The increase in operating profit, before all of the acquisition activities, was due to higher sales volume and a reduction in employee costs compared to the prior third quarter. These items were partially offset by an increase in unfavorable manufacturing variances.
The current quarter results include $22 million of operating profit from LeTourneau, net of $3 million of ongoing purchase accounting charges. Excess purchase accounting charges associated with the write-up of the acquired inventory and backlog from the LeTourneau transaction were completed in the third quarter of fiscal 2012, resulting in a final charge of $2 million.
In addition, the current quarter results include $11 million of operating profit from IMM, net of $4 million of ongoing purchase accounting charges. The third quarter results also include $8 million in excess purchase accounting charges associated with the write-up of the acquired inventory and backlog of IMM compared to our preliminary estimate of $5 million. Excess purchase accounting charges from the IMM transaction will be fully recognized in the fourth quarter of 2012 with an estimated final charge of $2 million.
Net interest expense increased to $17 million in the third quarter of 2012, up from $6 million in the prior year. The increase in interest expense is attributable to incremental borrowings associated with financing for the LeTourneau and IMM acquisitions.
| The effective income tax rate was 31.2% in the current quarter compared to 25.3% in the third quarter of 2011. The effective income tax rate excluding discrete tax adjustments was 31.5% in the current quarter compared to 30.6% in the third quarter of 2011. The increase in the effective tax rate is attributable to continued refinement of our full year forecast of domestic and international earnings. The effective tax rate is expected to be between 31.0 and 31.5 percent for 2012.
Impact of Acquisitions and Unusual Items on Earnings Per Share
|July 27, 2012||July 29, 2011|
|in millions||Diluted EPS||in millions||Diluted EPS|
|Income from continuing operations, attributable|
|to Joy Global Inc., as reported||$||194.3||$||1.82||$||171.8||$||1.61|
|LeTourneau excess purchase accounting, net of tax||1.3||0.01||-||-|
|IMM excess purchase accounting, net of tax||5.8||0.05||-||-|
|Acquisition costs, net of tax||-||-||8.1||0.08|
|Incremental interest expense, net of tax||7.5||0.07||-||-|
|Net discrete tax benefits||0.6||0.01||12.1||0.11|
|LeTourneau, net of tax||8.8||0.08||4.3||0.04|
|IMM, net of tax||7.3||0.07||-||-|
|Income from Continuing Operations Attributable|
|to Joy Global Inc., Before Acquisition Activities and Unusual Items||$||192.2||$||1.79||$||163.5||$||1.54|
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV