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
|October 26, 2012||October 28, 2011|
|in millions||Diluted EPS||in millions||Diluted EPS|
Income from continuing operations, attributable to Joy Global Inc., as reported
|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||-||-|
|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