1452575--3/27/2009--Mead_Johnson_Nutrition

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Risks Related to Our Business Our success depends on sustaining the strength of our brands, particularly our Enfa family of brands. We may experience liabilities or negative effects on our reputation as a result of real or perceived quality issues, including product recalls, injuries or other claims. We are subject to numerous governmental regulations, and it can be costly to comply with these regulations. Changes in governmental regulations could harm our business. Commodity price increases will increase our operating costs and may reduce our profitability. Our profitability may suffer as a result of competition in our markets. Economic downturns, such as the current downturn, could cause consumers to shift their purchases from our higher-priced premium products to lower-priced products, including private label or store brands, which could materially adversely affect our business. Turmoil in the financial markets could adversely affect our liquidity, cash flow and financial flexibility, as well as the demand for our products. Our operations face significant foreign currency exchange rate exposure that could materially negatively impact our operating results. The international nature of our business subjects us to additional business risks that could cause our revenue and profitability to decline. Our international operations are subject to political and economic risks of developing countries, and special risks associated with doing business in corrupt environments. Sales of our products are subject to changing consumer preferences, and our success depends upon our ability to predict, identify and interpret changes in consumer preferences and develop and offer new products rapidly enough to meet those changes. The consolidation of our retail customers may put pressures on our profitability. We rely on third parties to provide us with materials and services in connection with the manufacturing and distribution of our products. The manufacture of many of our products is a highly exacting and complex process, and if we or one of our suppliers should encounter problems manufacturing products, our business could suffer. We may experience difficulties and delays inherent in the manufacturing and selling of our products. If we fail to increase our production and manufacturing capacity, we will be unable to continue to grow and our ability to produce new products, expand within our existing markets and enter into new markets will be limited. Disruption of our global supply chain could materially adversely affect our business. Changes in WIC, or our participation in it, could materially adversely affect our business. Our business could be harmed by a failure of our information technology, administrative or outsourcing systems. We may face difficulties as we expand our operations into countries in which we have no prior operating experience or as we expand our operations into new product categories. Resources devoted to research and development may not yield new products that achieve commercial success. We could incur substantial costs to comply with environmental, health, and safety laws and regulations and to address violations of or liabilities under these requirements. We may not be able to adequately protect our intellectual property rights. We may be required to defend ourselves against intellectual property claims from third parties, which could harm our business. Increases in costs of pension benefits and current and post-retirement medical and other employee health and welfare benefits may reduce our profitability. Labor disputes may cause work stoppages, strikes and disruptions. Our success depends on attracting and retaining qualified personnel in a competitive environment. We derive a significant percentage of our revenues from one customer. The loss of this customer could materially adversely affect our financial performance. An adverse change in favorable demographic and economic trends as well as a change in scientific opinion regarding our products in any of our largest markets could materially adversely affect our business and reduce our profitability. We have substantial debt, which could materially adversely affect our business and our ability to meet our obligations. We intend to evaluate acquisitions, joint ventures and other strategic initiatives, any of which could distract our management or otherwise have a negative effect on our revenues, costs and stock price. We depend on cash flows generated by our subsidiaries, and a failure to receive distributions from our subsidiaries may result in our inability to meet our financial obligations, or to pay dividends. Risks Related to Our Relationship with BMS We may not realize the potential benefits from our separation from BMS. BMS controls the direction of our business, and the concentrated ownership of our common stock and certain governance arrangements will prevent you and other stockholders from influencing significant decisions. The transitional services that BMS provides to us may not be sufficient to meet our needs, and we may have difficulty finding replacement services or be required to pay increased costs to replace these services after our transitional services agreement with BMS expires. As a stand-alone public company, we no longer have access to the resources of BMS, and we may experience increased costs resulting from decreased purchasing power. We may not be able to favorably resolve disputes that arise between BMS and us with respect to our past and ongoing relationships. Some of our directors are executive officers of BMS. In addition, some of our directors and executive officers own common stock of BMS, and options or other instruments, the value of which is related to the value of stock of BMS, which could cause conflicts of interests that result in our not acting on opportunities on which we would otherwise act. We are a controlled company within the meaning of the New York Stock Exchange ( NYSE ) rules, and, as a result, will rely on exemptions from certain corporate governance requirements that provide protection to stockholders of other companies. Risks Related to Owning Our Common Stock Future sales, or the perception of future sales, of our common stock may depress the price of our Class A common stock. Our costs will increase significantly as a result of operating as a public company, and our management will be required to devote substantial time to complying with public company regulations. Failure to achieve and maintain effective internal controls in accordance with Section 404 of Sarbanes-Oxley could have a material adverse effect on our business and stock price. Anti-takeover provisions in our charter documents could discourage, delay or prevent a change of control of our company and may result in an entrenchment of management and diminish the value of our Class A common stock.

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1452575--3/27/2009--Mead_Johnson_Nutrition_Co