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Joy Global Inc. Announces Fourth Quarter And Fiscal 2012 Year-End Operating Results

The increase in operating profit, before acquisition activities, was due to higher sales volume offset by pension curtailment charges, restructuring costs and an increase in period costs.

The current year results include $87 million of operating profit from LeTourneau, net of $12 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 totaled $14 million in fiscal 2012 and were completed in the third quarter.

In addition, the current year results include $37 million of operating profit from IMM, net of $13 million of ongoing purchase accounting charges. Excess purchase accounting charges associated with the write-up of the acquired inventory and backlog from the IMM transaction totaled $27 million in fiscal 2012 and were completed in the fourth quarter.

Net interest expense increased to $67 million in fiscal 2012, up from $24 million in the prior year. The increase in interest expense is attributable to borrowings associated with financing the LeTourneau and IMM acquisitions.

The income tax rate was 30.6 percent in the current year compared to 29.6 percent last year. The effective income tax rate excluding discrete tax adjustments was 31.4 percent in the current year compared to 30.2 percent in 2011. The increase in the effective tax rate is attributable to an unfavorable geographic mix of earnings. The effective tax rate in 2013 is expected to be between 30.5 percent and 31.5 percent.

Impact of Acquisitions and Unusual Items on Earnings Per Share

  Year Ended
October 26, 2012   October 28, 2011
Dollars   Fully Dollars   Fully
in millions Diluted EPS in millions Diluted EPS
 

Income from continuing operations, attributable to Joy Global Inc., as reported

$ 767.1 $ 7.18 $ 631.0 $ 5.92
 
Add:
LeTourneau excess purchase accounting, net of tax 9.1 0.08 5.6 0.05
IMM excess purchase accounting, net of tax 20.6 0.19 - -
Acquisition costs, net of tax 10.9 0.10 13.6 0.13
Incremental interest expense, net of tax 25.6 0.24 5.2 0.05
Restructuring charges, net of tax 6.5 0.06 - -
Pension curtailment, net of tax 8.6 0.08 - -
 
Deduct:
Net discrete tax benefits 7.6 0.07 5.4 0.05
LeTourneau, net of tax 54.8 0.51 20.4 0.19
IMM, net of tax 27.1 0.25 - -
IMM gain / equity, net of tax   20.2   0.19   2.5   0.02
 

Income from continuing operations attributable to Joy Global Inc., before acquisition activities and unusual items

$ 738.7 $ 6.91 $ 627.1 $ 5.89
 

Income from continuing operations was $767 million, or $7.18 per fully diluted share, in fiscal 2012, compared to income from continuing operations of $631 million, or $5.92 per fully diluted share, in fiscal 2011. The table above lists the acquisition activities and unusual items that affected fiscal 2012 earnings per share compared to the prior fiscal year. The LeTourneau and IMM acquisitions, net of the increase in interest expense, added $0.25 to fully diluted EPS for the year.

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