JOHNSON & JOHNSON - FORM 8-K - EX-99.2O - EXHIBIT 99.2O

Attached files

file	filename
8-K - 8-K - JOHNSON & JOHNSON	a2016q18kcover.htm
EX-99.15 - EXHIBIT 99.15 - JOHNSON & JOHNSON	a2016q18kexhibit9915.htm

Exhibit 99.2O



Johnson & Johnson and Subsidiaries
Condensed Consolidated Statement of Earnings

(Unaudited; in Millions Except Per Share Figures)	FIRST QUARTER

	2016			2015			Percent
			Percent			Percent	Increase
	Amount		to Sales	Amount		to Sales	(Decrease)
Sales to customers	$ 17,482		100.0	$ 17,374		100.0	0.6
Cost of products sold	5,329		30.5	5,282		30.4	0.9
Selling, marketing and administrative expenses	4,688		26.8	4,847		27.9	(3.3)
Research and development expense	2,013		11.5	1,899		10.9	6.0
Interest (income) expense, net	77		0.4	119		0.7
Other (income) expense, net	(39)		(0.2)	(348)		(2.0)
Restructuring	120		0.7	—		—
Earnings before provision for taxes on income	5,294		30.3	5,575		32.1	(5.0)
Provision for taxes on income	1,002		5.7	1,255		7.2	(20.2)
Net earnings	4,292		24.6	4,320		24.9	(0.6)

Net earnings per share (Diluted)	$ 1.54			$ 1.53			0.7

Average shares outstanding (Diluted)	2,795.4			2,826.0

Effective tax rate	18.9	%		22.5	%

Adjusted earnings before provision for taxes and net earnings^{(1) (A)}
Earnings before provision for taxes on income	$ 5,801		33.2	$ 5,630		32.4	3.0
Net earnings	$ 4,689		26.8	$ 4,418		25.4	6.1
Net earnings per share (Diluted)	$ 1.68			$ 1.56			7.7
Effective tax rate	19.2	%		21.5	%

⁽¹⁾ See Reconciliation of Non-GAAP Financial Measures.

^(A) NON-GAAP FINANCIAL MEASURES "Adjusted earnings before provision for taxes on income," "adjusted net earnings," "adjusted net earnings per share (diluted)," and "adjusted effective tax rate" are non-GAAP financial measures and should not be considered replacements for GAAP results. The Company provides earnings before provision for taxes on income, net earnings, net earnings per share (diluted), and effective tax rate on an adjusted basis because management believes that these measures provide useful information to investors. Among other things, these measures may assist investors in evaluating the Company's results of operations period over period. In various periods, these measures may exclude such items as intangible asset amortization expense, significant costs associated with acquisitions, restructuring, litigation, and changes in applicable laws and regulations (including significant accounting or tax matters). Special items may be highly variable, difficult to predict, and of a size that sometimes has substantial impact on the Company's reported results of operations for a period. Management uses these measures internally for planning, forecasting and evaluating the performances of the Company's businesses, including allocating resources and evaluating results relative to employee performance compensation targets. Unlike earnings before provision for taxes on income, net earnings, net earnings per share (diluted), and effective tax rate prepared in accordance with GAAP, adjusted earnings before provision for taxes on income, adjusted net earnings, adjusted net earnings per share (diluted), and adjusted effective tax rate may not be comparable with the calculation of similar measures for other companies. The limitations of using these non-GAAP financial measures as performance measures are that they provide a view of the Company's results of operations without including all events during a period, such as intangible asset amortization expense, the effects of an acquisition, the Ortho-Clinical Diagnostics divestiture, restructuring, litigation, and changes in applicable laws and regulations (including significant accounting or tax matters) and do not provide a comparable view of the Company's performance to other companies in the health care industry. Investors should consider non-GAAP financial measures in addition to, and not as replacements for, or superior to, measures of financial performance prepared in accordance with GAAP.



Johnson & Johnson and Subsidiaries
Supplementary Sales Data

(Unaudited; Dollars in Millions)	FIRST QUARTER
			Percent Change
	2016	2015	Total		Operations	Currency
Sales to customers by
segment of business

Consumer
U.S.	$ 1,358	1,359	(0.1)	%	(0.1)	—
International	1,837	2,031	(9.6)		(0.3)	(9.3)
	3,195	3,390	(5.8)		(0.2)	(5.6)

Pharmaceutical
U.S.	4,937	4,371	12.9		12.9	—
International	3,241	3,355	(3.4)		2.6	(6.0)
	8,178	7,726	5.9		8.5	(2.6)

Medical Devices
U.S.	3,026	2,962	2.2		2.2	—
International	3,083	3,296	(6.5)		(1.0)	(5.5)
	6,109	6,258	(2.4)		0.5	(2.9)

U.S.	9,321	8,692	7.2		7.2	—
International	8,161	8,682	(6.0)		0.6	(6.6)
Worldwide	$ 17,482	17,374	0.6	%	3.9	(3.3)



Johnson & Johnson and Subsidiaries
Supplementary Sales Data

(Unaudited; Dollars in Millions)	FIRST QUARTER
			Percent Change
	2016	2015	Total		Operations	Currency
Sales to customers by
geographic area

U.S.	$ 9,321	8,692	7.2	%	7.2	—

Europe	3,847	4,040	(4.8)		(0.8)	(4.0)
Western Hemisphere excluding U.S.	1,331	1,639	(18.8)		(0.6)	(18.2)
Asia-Pacific, Africa	2,983	3,003	(0.7)		3.0	(3.7)
International	8,161	8,682	(6.0)		0.6	(6.6)

Worldwide	$ 17,482	17,374	0.6	%	3.9	(3.3)



Johnson & Johnson and Subsidiaries
Reconciliation of Non-GAAP Financial Measures

	First Quarter		% Incr. /
(Dollars in Millions Except Per Share Data)	2016	2015	(Decr.)

Earnings before provision for taxes on income - as reported	$ 5,294	5,575	(5.0)	%

Intangible asset amortization expense	282	312

Restructuring⁽¹⁾	137	—

Litigation expense/(gain), net	66	(402)

DePuy ASR^TM Hip program	—	139

Other	22	6

Earnings before provision for taxes on income - as adjusted	$ 5,801	5,630	3.0	%

Net Earnings - as reported	$ 4,292	4,320	(0.6)	%

Intangible asset amortization expense	205	226

Restructuring	120	—

Litigation expense/(gain), net	56	(253)

DePuy ASR^TM Hip program	—	122

Other	16	3

Net Earnings - as adjusted	$ 4,689	4,418	6.1	%

Diluted Net Earnings per share - as reported	$ 1.54	1.53	0.7	%

Intangible asset amortization expense	0.07	0.08

Restructuring	0.04	—

Litigation expense/(gain), net	0.02	(0.09)

DePuy ASR^TM Hip program	—	0.04

Other	0.01	—

Diluted Net Earnings per share - as adjusted	$ 1.68	1.56	7.7	%

Operational Diluted Net Earnings per share - as adjusted*	$ 1.72	1.56	10.3	%

* Excludes the effect of translational currency

⁽¹⁾ Includes $17M recorded in cost of products sold



Johnson & Johnson and Subsidiaries
Reconciliation of Non-GAAP Financial Measure

Operational Sales Growth Excluding Acquisitions, Divestitures and Hepatitis C Sales ⁽¹⁾ (Underlying Sales Growth) ^(A)
FIRST QUARTER 2016 ACTUAL vs. 2015 ACTUAL

Segments

	Consumer	Pharmaceutical	Medical Devices	Total
	Operational %⁽²⁾
WW As Reported:	(0.2)%	8.5%	0.5%	3.9%
U.S.	(0.1)%	12.9%	2.2%	7.2%
International	(0.3)%	2.6%	(1.0)%	0.6%

Wound Care/Other
SPLENDA ^®	2.0			0.5
U.S.	4.1			0.7
International	0.7			0.2

Cardiovascular
Cordis			2.4	0.9
U.S.			1.1	0.4
International			3.5	1.3

Other Neuroscience
NUCYNTA ^®		0.5		0.2
U.S.		1.0		0.5
International		0.0		0.0

All Other Acquisitions and Divestitures	0.1		0.1	0.1
U.S.	0.1		0.0	0.0
International	0.1		0.3	0.1

WW Ops excluding Acquisitions and Divestitures	1.9%	9.0%	3.0%	5.6%
U.S.	4.1%	13.9%	3.3%	8.8%
International	0.5%	2.6%	2.8%	2.2%

Hepatitis C		3.3		1.3
U.S.		2.3		1.0
International		4.5		1.6

WW Ops excluding Hepatitis C only		11.8%		5.2%
U.S.		15.2%		8.2%
International		7.1%		2.2%

WW Ops excluding Acquisitions, Divestitures and Hepatitis C	1.9%	12.3%	3.0%	6.9%
U.S.	4.1%	16.2%	3.3%	9.8%
International	0.5%	7.1%	2.8%	3.8%

⁽¹⁾ Hepatitis C products include OLYSIO ^® /SOVRIAD ^® and INCIVO ^®
⁽²⁾ Operational growth excludes the effect of translational currency

^(A) NON-GAAP FINANCIAL MEASURE “Operational sales growth excluding the net impact of acquisitions, divestitures and hepatitis C sales (underlying sales growth)” is a non-GAAP financial measure. Investors should consider non-GAAP financial measures in addition to, and not as replacements for, or superior to, measures of financial performance prepared in accordance with GAAP. Due to the magnitude of hepatitis C product sales over a short timeframe and the variable nature of acquisitions and divestitures and the impact they may have on the analysis of underlying business performance and trends, management believes that providing this measure enhances an investor’s understanding of the Company’s performance and may assist in the evaluation of ongoing business operations period over period. This non-GAAP financial measure is presented to permit investors to more fully understand how management assesses the performance of the Company, including for internal evaluation of the performance of the Company's businesses and planning and forecasting for future periods. The use of this non-GAAP financial measure as a performance measure is limited in that it provides a view of the Company's results of operations without including all events during a period and may not provide a comparable view of the Company's performance to that of other companies in the health care industry.



Johnson & Johnson
Segment Sales
(Dollars in Millions)
		FIRST QUARTER
				% Change
		2016	2015	Reported		Operational⁽¹⁾		Currency
CONSUMER SEGMENT⁽²⁾

BABY CARE
US	$	95	111	(14.4	)%	(14.4	)%	—	%
Intl		356	400	(11.0	)	0.1		(11.1	)
WW		451	511	(11.7	)	(3.0	)	(8.7	)

ORAL CARE
US		170	158	7.6		7.6		—
Intl		215	245	(12.2	)	(2.9	)	(9.3	)
WW		385	403	(4.5	)	1.1		(5.6	)

OTC
US		461	405	13.8		13.8		—
Intl		558	588	(5.1	)	2.8		(7.9	)
WW		1,019	993	2.6		7.3		(4.7	)

SKIN CARE
US		488	492	(0.8	)	(0.8	)	—
Intl		374	411	(9.0	)	(0.7	)	(8.3	)
WW		862	903	(4.5	)	(0.7	)	(3.8	)

WOMEN'S HEALTH
US		6	6	0.0		0.0		—
Intl		245	281	(12.8	)	(0.9	)	(11.9	)
WW		251	287	(12.5	)	(0.9	)	(11.6	)

WOUND CARE/OTHER
US		138	187	(26.2	)	(26.2	)	—
Intl		89	106	(16.0	)	(8.4	)	(7.6	)
WW		227	293	(22.5	)	(19.7	)	(2.8	)

TOTAL CONSUMER
US		1,358	1,359	(0.1	)	(0.1	)	—
Intl		1,837	2,031	(9.6	)	(0.3	)	(9.3	)
WW	$	3,195	3,390	(5.8	)%	(0.2	)%	(5.6	)%

See footnotes at end of schedule



Johnson & Johnson
Segment Sales
(Dollars in Millions)
		FIRST QUARTER
				% Change
		2016	2015	Reported		Operational⁽¹⁾		Currency
PHARMACEUTICAL SEGMENT⁽²⁾

IMMUNOLOGY
US	$	2,171	1,755	23.7	%	23.7	%	—	%
Intl		739	708	4.4		12.8		(8.4	)
WW		2,910	2,463	18.1		20.5		(2.4	)
REMICADE
US		1,211	1,055	14.8		14.8		—
US Exports⁽³⁾		233	181	28.7		28.7		—
Intl		335	364	(8.0	)	1.8		(9.8	)
WW		1,779	1,600	11.2		13.4		(2.2	)
SIMPONI / SIMPONI ARIA
US		216	155	39.4		39.4		—
Intl		174	145	20.0		27.6		(7.6	)
WW		390	300	30.0		33.7		(3.7	)
STELARA
US		511	364	40.4		40.4		—
Intl		224	185	21.1		27.3		(6.2	)
WW		735	549	33.9		36.0		(2.1	)
OTHER IMMUNOLOGY
US		—	—	—		—		—
Intl		6	14	(57.1	)	(48.4	)	(8.7	)
WW		6	14	(57.1	)	(48.4	)	(8.7	)

INFECTIOUS DISEASES
US		358	412	(13.1	)	(13.1	)	—
Intl		418	563	(25.8	)	(22.1	)	(3.7	)
WW		776	975	(20.4	)	(18.2	)	(2.2	)
EDURANT
US		11	9	22.2		22.2		—
Intl		108	82	31.7		35.3		(3.6	)
WW		119	91	30.8		34.1		(3.3	)
OLYSIO / SOVRIAD
US		16	98	(83.7	)	(83.7	)	—
Intl		16	136	(88.2	)	(87.1	)	(1.1	)
WW		32	234	(86.3	)	(85.7	)	(0.6	)
PREZISTA / PREZCOBIX / REZOLSTA
US		277	234	18.4		18.4		—
Intl		175	193	(9.3	)	(4.6	)	(4.7	)
WW		452	427	5.9		8.0		(2.1	)
OTHER INFECTIOUS DISEASES
US		54	71	(23.9	)	(23.9	)	—
Intl		119	152	(21.7	)	(16.7	)	(5.0	)
WW		173	223	(22.4	)	(19.0	)	(3.4	)

See footnotes at end of schedule



Johnson & Johnson
Segment Sales
(Dollars in Millions)
		FIRST QUARTER
				% Change
		2016	2015	Reported		Operational ⁽¹⁾		Currency
PHARMACEUTICAL SEGMENT^{(2) (Continued)}

NEUROSCIENCE
US	$	680	750	(9.3	)%	(9.3	)%	—	%
Intl		869	868	0.1		5.4		(5.3	)
WW		1,549	1,618	(4.3	)	(1.4	)	(2.9	)
CONCERTA / METHYLPHENIDATE
US		134	126	6.3		6.3		—
Intl		97	98	(1.0	)	6.4		(7.4	)
WW		231	224	3.1		6.3		(3.2	)
INVEGA / PALIPERIDONE
US		24	94	(74.5	)	(74.5	)	—
Intl		62	61	1.6		5.3		(3.7	)
WW		86	155	(44.5	)	(43.0	)	(1.5	)
INVEGA SUSTENNA / XEPLION / INVEGA TRINZA
US		305	228	33.8		33.8		—
Intl		208	183	13.7		19.3		(5.6	)
WW		513	411	24.8		27.3		(2.5	)
RISPERDAL CONSTA
US		95	104	(8.7	)	(8.7	)	—
Intl		136	150	(9.3	)	(4.9	)	(4.4	)
WW		231	254	(9.1	)	(6.5	)	(2.6	)
OTHER NEUROSCIENCE
US		122	198	(38.4	)	(38.4	)	—
Intl		366	376	(2.7	)	2.6		(5.3	)
WW		488	574	(15.0	)	(11.5	)	(3.5	)

ONCOLOGY
US		549	334	64.4		64.4		—
Intl		805	774	4.0		9.8		(5.8	)
WW		1,354	1,108	22.2		26.3		(4.1	)
IMBRUVICA
US		132	66	100.0		100.0		—
Intl		129	50	*		*		**
WW		261	116	*		*		**
VELCADE
US		—	—	—		—		—
Intl		304	339	(10.3	)	(5.4	)	(4.9	)
WW		304	339	(10.3	)	(5.4	)	(4.9	)
ZYTIGA
US		272	253	7.5		7.5		—
Intl		286	303	(5.6	)	(0.1	)	(5.5	)
WW		558	556	0.4		3.4		(3.0	)
OTHER ONCOLOGY
US		145	15	*		*		—
Intl		86	82	4.9		11.2		(6.3	)
WW		231	97	*		*		**
See footnotes at end of schedule



Johnson & Johnson
Segment Sales
(Dollars in Millions)
		FIRST QUARTER
				% Change
		2016	2015	Reported		Operational ⁽¹⁾		Currency
PHARMACEUTICAL SEGMENT^{(2) (Continued)}

CARDIOVASCULAR / METABOLISM / OTHER
US	$	1,179	1,120	5.3	%	5.3	%	—	%
Intl		410	442	(7.2	)	(0.4	)	(6.8	)
WW		1,589	1,562	1.7		3.6		(1.9	)
XARELTO
US		567	441	28.6		28.6		—
Intl		—	—	—		—		—
WW		567	441	28.6		28.6		—
INVOKANA / INVOKAMET
US		297	266	11.7		11.7		—
Intl		28	12	*		*		**
WW		325	278	16.9		17.8		(0.9	)
PROCRIT / EPREX
US		183	163	12.3		12.3		—
Intl		91	106	(14.2	)	(8.7	)	(5.5	)
WW		274	269	1.9		4.1		(2.2	)
OTHER
US		132	250	(47.2	)	(47.2	)	—
Intl		291	324	(10.2	)	(3.5	)	(6.7	)
WW		423	574	(26.3	)	(22.5	)	(3.8	)

TOTAL PHARMACEUTICAL
US		4,937	4,371	12.9		12.9		—
Intl		3,241	3,355	(3.4	)	2.6		(6.0	)
WW	$	8,178	7,726	5.9	%	8.5	%	(2.6	)%

See footnotes at end of schedule



Johnson & Johnson
Segment Sales
(Dollars in Millions)
		FIRST QUARTER
				% Change
		2016	2015	Reported		Operational ⁽¹⁾		Currency
MEDICAL DEVICES ^{(2) (4)}

CARDIOVASCULAR
US	$	231	228	1.3	%	1.3	%	—	%
Intl		212	301	(29.6	)	(26.3	)	(3.3	)
WW		443	529	(16.3	)	(14.4	)	(1.9	)

DIABETES CARE
US		180	212	(15.1	)	(15.1	)	—
Intl		249	272	(8.5	)	(2.8	)	(5.7	)
WW		429	484	(11.4	)	(8.2	)	(3.2	)

DIAGNOSTICS
US		—	—	—		—		—
Intl		28	30	**		**		**
WW		28	30	**		**		**

ORTHOPAEDICS
US		1,392	1,309	6.3		6.3		—
Intl		949	1,019	(6.9	)	(1.4	)	(5.5	)
WW		2,341	2,328	0.6		3.0		(2.4	)

HIPS
US		203	190	6.8		6.8		—
Intl		139	143	(2.8	)	3.4		(6.2	)
WW		342	333	2.7		5.4		(2.7	)

KNEES
US		244	226	8.0		8.0		—
Intl		145	150	(3.3	)	2.1		(5.4	)
WW		389	376	3.5		5.7		(2.2	)

TRAUMA
US		381	364	4.7		4.7		—
Intl		261	292	(10.6	)	(4.9	)	(5.7	)
WW		642	656	(2.1	)	0.4		(2.5	)

SPINE & OTHER
US		564	529	6.6		6.6		—
Intl		404	434	(6.9	)	(1.8	)	(5.1	)
WW		968	963	0.5		2.8		(2.3	)

See footnotes at end of schedule



Johnson & Johnson
Segment Sales
(Dollars in Millions)
		FIRST QUARTER
				% Change
		2016	2015	Reported		Operational ⁽¹⁾		Currency
MEDICAL DEVICES ^{(2) (4) (Continued)}

SURGERY
US	$	981	960	2.2	%	2.2	%	—
Intl		1,247	1,296	(3.8	)	2.3		(6.1	)
WW		2,228	2,256	(1.2	)	2.3		(3.5	)

ADVANCED
US		352	329	7.0		7.0		—
Intl		464	441	5.2		11.7		(6.5	)
WW		816	770	6.0		9.7		(3.7	)

GENERAL
US		419	422	(0.7	)	(0.7	)	—
Intl		651	711	(8.4	)	(2.8	)	(5.6	)
WW		1,070	1,133	(5.6	)	(2.1	)	(3.5	)

SPECIALTY
US		210	209	0.5		0.5		—
Intl		132	144	(8.3	)	(1.0	)	(7.3	)
WW		342	353	(3.1	)	(0.1	)	(3.0	)

VISION CARE
US		242	253	(4.3	)	(4.3	)	—
Intl		398	378	5.3		9.8		(4.5	)
WW		640	631	1.4		4.1		(2.7	)

TOTAL MEDICAL DEVICES
US		3,026	2,962	2.2		2.2		—
Intl		3,083	3,296	(6.5	)	(1.0	)	(5.5	)
WW	$	6,109	6,258	(2.4	)%	0.5	%	(2.9	)%

* Percentage greater than 100%
** Not meaningful
⁽¹⁾ Operational growth excludes the effect of translational currency
⁽²⁾ Unaudited
⁽³⁾ Reported as U.S. sales
⁽⁴⁾ Prior year amounts have been reclassified to conform to current year product disclosure

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JOHNSON & JOHNSON - FORM 8-K - EX-99.2O - EXHIBIT 99.2O - April 19, 2016

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