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

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EX-99.15 - EXHIBIT 99.15 - JOHNSON & JOHNSON	a8k2018q1exhibit9915.htm
8-K - 8-K - JOHNSON & JOHNSON	a8-k2018q1.htm

Exhibit 99.2O



Johnson & Johnson and Subsidiaries
Condensed Consolidated Statement of Earnings

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

	2018			2017*					Percent
			Percent				Percent		Increase
	Amount		to Sales	Amount			to Sales		(Decrease)
Sales to customers	$ 20,009		100.0	$ 17,766			100.0		12.6
Cost of products sold	6,614		33.1	5,409			30.4		22.3
Selling, marketing and administrative expenses	5,263		26.3	4,763			26.8		10.5
Research and development expense	2,404		12.0	2,070			11.7		16.1
Interest (income) expense, net	145		0.7	83			0.5
Other (income) expense, net	60		0.3	(219	)		(1.3	)
Restructuring	42		0.2	85			0.5
Earnings before provision for taxes on income	5,481		27.4	5,575			31.4		(1.7	)
Provision for taxes on income	1,114		5.6	1,153			6.5		(3.4	)
Net earnings	4,367		21.8	4,422			24.9		(1.2	)

Net earnings per share (Diluted)	1.60			$ 1.61					(0.6	)

Average shares outstanding (Diluted)	2,731.9			2,754.5

Effective tax rate	20.3	%		20.7		%

Adjusted earnings before provision for taxes and net earnings^{(1) (A)}
Earnings before provision for taxes on income	$ 6,858		34.3	$ 6,103			34.4		12.4
Net earnings	$ 5,635		28.2	$ 5,038			28.4		11.8
Net earnings per share (Diluted)	$ 2.06			$ 1.83					12.6
Effective tax rate	17.8	%		17.5		%

⁽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, 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.

*2017 Statement of Earnings line items have been restated to reflect impact of ASU 2017-07



Johnson & Johnson and Subsidiaries
Supplementary Sales Data

(Unaudited; Dollars in Millions)	FIRST QUARTER
			Percent Change
	2018	2017	Total		Operations	Currency
Sales to customers by
segment of business

Consumer
U.S.	$ 1,436	1,414	1.6	%	1.6	—
International	1,962	1,814	8.2		1.2	7.0
	3,398	3,228	5.3		1.3	4.0

Pharmaceutical
U.S.	5,354	4,872	9.9		9.9	—
International	4,490	3,373	33.1		22.5	10.6
	9,844	8,245	19.4		15.1	4.3

Medical Devices
U.S.	3,161	3,092	2.2		2.2	—
International	3,606	3,201	12.7		4.2	8.5
	6,767	6,293	7.5		3.2	4.3

U.S.	9,951	9,378	6.1		6.1	—
International	10,058	8,388	19.9		10.9	9.0
Worldwide	$ 20,009	17,766	12.6	%	8.4	4.2



Johnson & Johnson and Subsidiaries
Supplementary Sales Data

(Unaudited; Dollars in Millions)	FIRST QUARTER
			Percent Change
	2018	2017	Total		Operations	Currency
Sales to customers by
geographic area

U.S.	$ 9,951	9,378	6.1	%	6.1	—

Europe	4,797	3,858	24.3		10.0	14.3
Western Hemisphere excluding U.S.	1,567	1,454	7.8		7.2	0.6
Asia-Pacific, Africa	3,694	3,076	20.1		13.7	6.4
International	10,058	8,388	19.9		10.9	9.0

Worldwide	$ 20,009	17,766	12.6	%	8.4	4.2



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

	First Quarter				% Incr. /
(Dollars in Millions Except Per Share Data)	2018			2017	(Decr.)

Earnings before provision for taxes on income - as reported	$	5,481		5,575	(1.7	)	%

Intangible asset amortization expense	1,115			329

Restructuring/Other ⁽¹⁾	107			161

Actelion acquisition related cost	96			—

Unrealized loss/(gain) on securities	27			—

AMO acquisition related cost	21			38

Other	11			—

Earnings before provision for taxes on income - as adjusted	$	6,858		6,103	12.4		%

Net Earnings - as reported	$	4,367		4,422	(1.2	)	%

Intangible asset amortization expense	996			244

Restructuring/Other	81			121

Actelion acquisition related cost	92			—

Unrealized loss/(gain) on securities	21			—

AMO acquisition related cost	17			251

Impact of tax legislation ⁽²⁾	52			—

Other	9			—

Net Earnings - as adjusted	$	5,635		5,038	11.8		%

Diluted Net Earnings per share - as reported	$	1.60		1.61	(0.6	)	%

Intangible asset amortization expense	0.36			0.09

Restructuring/Other	0.03			0.04

Actelion acquisition related cost	0.03			—

Unrealized loss/(gain) on securities	0.01			—

AMO acquisition related cost	0.01			0.09

Impact of tax legislation	0.02			—

Other	—			—

Diluted Net Earnings per share - as adjusted	$	2.06		1.83	12.6		%

Operational Diluted Net Earnings per share - as adjusted at 2016 foreign currency exchange rates				1.86

Impact of currency at 2017 foreign currency exchange rates	(0.13		)	(0.03)

Operational Diluted Net Earnings per share - as adjusted at 2017 foreign currency exchange rates	$	1.93		1.83	5.5		%

⁽¹⁾ Includes $6M recorded in cost of products sold and $59M recorded in other (income) expense in the first quarter 2018, and
$4M recorded in cost of products sold and $72M recorded in other (income) expense in the first quarter 2017
⁽²⁾ Includes foreign currency translation



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

Operational Sales Growth Excluding Acquisitions and Divestitures ^(A)
FIRST QUARTER 2018 ACTUAL vs. 2017 ACTUAL

Segments
	Consumer	Pharmaceutical	Medical Devices	Total
	Operational %⁽¹⁾
WW As Reported:	1.3%	15.1%	3.2%	8.4%
U.S.	1.6%	9.9%	2.2%	6.1%
International	1.2%	22.5%	4.2%	10.9%

Vision Care
Vision Surgical & Eye Health Business⁽²⁾			(3.1)	(1.1)
U.S.			(2.8)	(0.9)
International			(3.4)	(1.3)

Pulmonary Hypertension
Actelion		(7.1)		(3.3)
U.S.		(7.4)		(3.8)
International		(6.6)		(2.7)

Cardiovascular / Metabolism / Other
Actelion		(0.5)		(0.2)
U.S.		(0.3)		(0.2)
International		(0.6)		(0.3)

Spine & Other
Codman Neuroscience			1.0	0.4
U.S.			0.7	0.2
International			1.4	0.6

Wound Care / Other
Compeed	0.7			0.1
U.S.	0.0			0.0
International	1.2			0.3

All Other Acquisitions and Divestitures	0.0		0.0	0.0
U.S.	0.0		(0.3)	(0.1)
International	(0.1)		0.2	0.1

WW Ops excluding Acquisitions and Divestitures	2.0%	7.5%	1.1%	4.3%
U.S.	1.6%	2.2%	(0.2)%	1.3%
International	2.3%	15.3%	2.4%	7.6%

⁽¹⁾ Operational growth excludes the effect of translational currency
⁽²⁾Previously referred to as Medical Optics

^(A) NON-GAAP FINANCIAL MEASURE “Operational sales growth excluding the net impact of acquisitions and divestitures" 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 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
		2018	2017	Reported		Operational⁽¹⁾		Currency
CONSUMER SEGMENT⁽²⁾

BABY CARE
US	$	97	113	(14.2	)%	(14.2	)%	—	%
Intl		360	342	5.3		1.3		4.0
WW		457	455	0.4		(2.6	)	3.0

BEAUTY
US		611	567	7.8		7.8		—
Intl		473	414	14.3		6.2		8.1
WW		1,084	981	10.5		7.1		3.4

ORAL CARE
US		157	156	0.6		0.6		—
Intl		222	206	7.8		0.7		7.1
WW		379	362	4.7		0.6		4.1

OTC
US		465	477	(2.5	)	(2.5	)	—
Intl		607	536	13.2		3.9		9.3
WW		1,072	1,013	5.8		0.9		4.9

WOMEN'S HEALTH
US		3	3	0.0		0.0		—
Intl		240	239	0.4		(4.6	)	5.0
WW		243	242	0.4		(4.6	)	5.0

WOUND CARE/OTHER
US		103	98	5.1		5.1		—
Intl		60	77	(22.1	)	(26.7	)	4.6
WW		163	175	(6.9	)	(8.9	)	2.0

TOTAL CONSUMER
US		1,436	1,414	1.6		1.6		—
Intl		1,962	1,814	8.2		1.2		7.0
WW	$	3,398	3,228	5.3	%	1.3	%	4.0	%

See footnotes at end of schedule



Johnson & Johnson
Segment Sales
(Dollars in Millions)

		FIRST QUARTER
				% Change
		2018	2017	Reported		Operational⁽¹⁾		Currency
PHARMACEUTICAL SEGMENT⁽²⁾

IMMUNOLOGY
US	$	2,000	2,123	(5.8	)%	(5.8	)%	—	%
Intl		1,042	807	29.1		19.4		9.7
WW		3,042	2,930	3.8		1.1		2.7
REMICADE
US		916	1,182	(22.5	)	(22.5	)	—
US Exports⁽³⁾		142	165	(13.9	)	(13.9	)	—
Intl		331	325	1.8		(3.7	)	5.5
WW		1,389	1,672	(16.9	)	(18.0	)	1.1
SIMPONI / SIMPONI ARIA
US		224	229	(2.2	)	(2.2	)	—
Intl		294	199	47.7		37.3		10.4
WW		518	428	21.0		16.2		4.8
STELARA
US		652	547	19.2		19.2		—
Intl		409	276	48.2		34.0		14.2
WW		1,061	823	28.9		24.1		4.8
OTHER IMMUNOLOGY
US		66	—	*		*		—
Intl		8	7	14.3		13.3		1.0
WW		74	7	*		*		*

INFECTIOUS DISEASES
US		333	326	2.1		2.1		—
Intl		497	423	17.5		5.9		11.6
WW		830	749	10.8		4.2		6.6
EDURANT / rilpivirine
US		14	12	16.7		16.7		—
Intl		196	137	43.1		25.2		17.9
WW		210	149	40.9		24.5		16.4
PREZISTA / PREZCOBIX / REZOLSTA / SYMTUZA
US		273	259	5.4		5.4		—
Intl		205	171	19.9		9.4		10.5
WW		478	430	11.2		7.0		4.2
OTHER INFECTIOUS DISEASES
US		46	55	(16.4	)	(16.4	)	—
Intl		96	115	(16.5	)	(22.4	)	5.9
WW		142	170	(16.5	)	(20.5	)	4.0

See footnotes at end of schedule



Johnson & Johnson
Segment Sales
(Dollars in Millions)

		FIRST QUARTER
				% Change
		2018	2017	Reported		Operational ⁽¹⁾		Currency
PHARMACEUTICAL SEGMENT^{(2) (Continued)}

NEUROSCIENCE
US	$	624	664	(6.0	)%	(6.0	)%	—	%
Intl		935	833	12.2		3.3		8.9
WW		1,559	1,497	4.1		(0.8	)	4.9
CONCERTA / methylphenidate
US		66	108	(38.9	)	(38.9	)	—
Intl		107	101	5.9		(0.9	)	6.8
WW		173	209	(17.2	)	(20.5	)	3.3
INVEGA SUSTENNA / XEPLION / TRINZA / TREVICTA
US		400	372	7.5		7.5		—
Intl		296	232	27.6		15.2		12.4
WW		696	604	15.2		10.5		4.7
RISPERDAL CONSTA
US		82	95	(13.7	)	(13.7	)	—
Intl		114	112	1.8		(7.1	)	8.9
WW		196	207	(5.3	)	(10.2	)	4.9
OTHER NEUROSCIENCE
US		76	89	(14.6	)	(14.6	)	—
Intl		418	388	7.7		0.4		7.3
WW		494	477	3.6		(2.3	)	5.9

ONCOLOGY
US		933	664	40.5		40.5		—
Intl		1,378	930	48.2		34.5		13.7
WW		2,311	1,594	45.0		37.0		8.0
DARZALEX
US		264	201	31.3		31.3		—
Intl		168	54	*		*		*
WW		432	255	69.4		63.5		5.9
IMBRUVICA
US		227	190	19.5		19.5		—
Intl		360	219	64.4		49.0		15.4
WW		587	409	43.5		35.3		8.2
VELCADE
US		—	—	—		—		—
Intl		313	280	11.8		1.6		10.2
WW		313	280	11.8		1.6		10.2
ZYTIGA
US		407	233	74.7		74.7		—
Intl		438	290	51.0		36.8		14.2
WW		845	523	61.6		53.7		7.9
OTHER ONCOLOGY
US		35	40	(12.5	)	(12.5	)	—
Intl		99	87	13.8		4.0		9.8
WW		134	127	5.5		(1.2	)	6.7
See footnotes at end of schedule



Johnson & Johnson
Segment Sales
(Dollars in Millions)
		FIRST QUARTER
				% Change
		2018	2017	Reported	Operational ⁽¹⁾	Currency
PHARMACEUTICAL SEGMENT^{(2) (Continued)}

PULMONARY HYPERTENSION ⁽⁴⁾
US	$	361	—	*	*	—
Intl		224	—	*	*	—
WW		585	—	*	*	—
OPSUMIT
US		149	—	*	*	—
Intl		122	—	*	*	—
WW		271	—	*	*	—
TRACLEER
US		68	—	*	*	—
Intl		72	—	*	*	—
WW		140	—	*	*	—
UPTRAVI
US		124	—	*	*	—
Intl		16	—	*	*	—
WW		140	—	*	*	—
OTHER
US		20	—	*	*	—
Intl		14	—	*	*	—
WW		34	—	*	*	—


See footnotes at end of schedule



Johnson & Johnson
Segment Sales
(Dollars in Millions)
		FIRST QUARTER
				% Change
		2018	2017	Reported		Operational ⁽¹⁾		Currency
PHARMACEUTICAL SEGMENT^{(2) (Continued)}

CARDIOVASCULAR / METABOLISM / OTHER
US	$	1,103	1,095	0.7	%	0.7	%	—	%
Intl		414	380	8.9		1.4		7.5
WW		1,517	1,475	2.8		0.9		1.9
XARELTO
US		578	513	12.7		12.7		—
Intl		—	—	—		—		—
WW		578	513	12.7		12.7		—
INVOKANA / INVOKAMET
US		204	247	(17.4	)	(17.4	)	—
Intl		44	37	18.9		10.3		8.6
WW		248	284	(12.7	)	(13.8	)	1.1
PROCRIT / EPREX
US		189	169	11.8		11.8		—
Intl		87	78	11.5		2.8		8.7
WW		276	247	11.7		9.0		2.7
OTHER
US		132	166	(20.5	)	(20.5	)	—
Intl		283	265	6.8		(0.2	)	7.0
WW		415	431	(3.7	)	(8.0	)	4.3

TOTAL PHARMACEUTICAL
US		5,354	4,872	9.9		9.9		—
Intl		4,490	3,373	33.1		22.5		10.6
WW	$	9,844	8,245	19.4	%	15.1	%	4.3	%

See footnotes at end of schedule



Johnson & Johnson
Segment Sales
(Dollars in Millions)

		FIRST QUARTER
				% Change
		2018	2017	Reported		Operational ⁽¹⁾		Currency
MEDICAL DEVICES SEGMENT ^{(2) (5)}

DIABETES CARE
US	$	117	154	(24.0	)%	(24.0	)%	—	%
Intl		222	245	(9.4	)	(16.7	)	7.3
WW		339	399	(15.0	)	(19.5	)	4.5

DIAGNOSTICS
US		—	—	—		—		—
Intl		—	1	*		*		*
WW		—	1	*		*		*

INTERVENTIONAL SOLUTIONS⁽⁶⁾
US		304	279	9.0		9.0		—
Intl		336	270	24.4		14.3		10.1
WW		640	549	16.6		11.6		5.0

ORTHOPAEDICS ⁽⁶⁾
US		1,307	1,359	(3.8	)	(3.8	)	—
Intl		943	916	2.9		(5.8	)	8.7
WW		2,250	2,275	(1.1	)	(4.6	)	3.5

HIPS
US		209	209	0.0		0.0		—
Intl		154	143	7.7		(1.2	)	8.9
WW		363	352	3.1		(0.5	)	3.6

KNEES
US		228	246	(7.3	)	(7.3	)	—
Intl		159	152	4.6		(4.2	)	8.8
WW		387	398	(2.8	)	(6.2	)	3.4

TRAUMA
US		407	391	4.1		4.1		—
Intl		289	251	15.1		5.6		9.5
WW		696	642	8.4		4.7		3.7

SPINE & OTHER⁽⁶⁾
US		463	513	(9.7	)	(9.7	)	—
Intl		341	370	(7.8	)	(15.8	)	8.0
WW		804	883	(8.9	)	(12.2	)	3.3

See footnotes at end of schedule



Johnson & Johnson
Segment Sales
(Dollars in Millions)

		FIRST QUARTER
				% Change
		2018	2017	Reported		Operational ⁽¹⁾		Currency
MEDICAL DEVICES SEGMENT ^{(2) (5) (Continued)}

SURGERY
US	$	993	995	(0.2	)%	(0.2	)%	—	%
Intl		1,430	1,276	12.1		3.9		8.2
WW		2,423	2,271	6.7		2.1		4.6

ADVANCED
US		393	392	0.3		0.3		—
Intl		573	485	18.1		9.4		8.7
WW		966	877	10.1		5.3		4.8

GENERAL
US		423	423	0.0		0.0		—
Intl		704	651	8.1		0.0		8.1
WW		1,127	1,074	4.9		0.0		4.9

SPECIALTY
US		177	180	(1.7	)	(1.7	)	—
Intl		153	140	9.3		2.7		6.6
WW		330	320	3.1		0.2		2.9

VISION CARE ⁽⁷⁾
US		440	305	44.3		44.3		—
Intl		675	493	36.9		28.3		8.6
WW		1,115	798	39.7		34.4		5.3

CONTACT LENSES / OTHER
US		309	256	20.7		20.7		—
Intl		498	427	16.6		9.3		7.3
WW		807	683	18.2		13.6		4.6
SURGICAL
US		131	49	*		*		—
Intl		177	66	*		*		*
WW		308	115	*		*		*

TOTAL MEDICAL DEVICES
US		3,161	3,092	2.2		2.2		—
Intl		3,606	3,201	12.7		4.2		8.5
WW	$	6,767	6,293	7.5	%	3.2	%	4.3	%

*Percentage greater than 100% or not meaningful
⁽¹⁾Operational growth excludes the effect of translational currency
⁽²⁾ Unaudited
⁽³⁾ Reported as U.S. sales
⁽⁴⁾ Products acquired from Actelion acquisition on June 16, 2017
⁽⁵⁾ Prior year amounts have been reclassified to conform to current year product disclosure
⁽⁶⁾ All sales related to the Cerenovus businss (previously included in Spine & Other in Orthopaedics) were reclassified to
Interventional Solutions (previously referred to as Cardiovascular). See supplemental schedule.
⁽⁷⁾ Includes products acquired from Abbott Medical Optics (AMO) acquisition on February 27, 2017



Johnson & Johnson
Supplemental Sales Information
(Dollars in Millions)

Prior quarter amounts have been reclassified to conform to current quarter product disclosure

		2016	2017
		Full Year	Q1	Q2	Q3	Q4
MEDICAL DEVICES SEGMENT⁽¹⁾

INTERVENTIONAL SOLUTIONS⁽²⁾
US	$	968	279	285	279	305
Intl		930	270	288	274	316
WW		1,899	549	573	553	621

ORTHOPAEDICS⁽²⁾
US		5,501	1,359	1,367	1,308	1,370
Intl		3,784	916	926	896	916
WW		9,284	2,275	2,293	2,204	2,286
SPINE & OTHER⁽²⁾
US		2,215	513	533	495	512
Intl		1,616	370	382	376	344
WW	$	3,830	883	915	871	856

⁽¹⁾ Quarterly data unaudited
⁽²⁾ All sales related to the Cerenovus business were reclassified to Interventional Solutions (previously referred to as Cardiovascular);The
Cerenovus business includes the Codman Neurovascular business as well as the recent acquisitions of Neuravi and Pulsar (previously
included in Spine & Other in Orthopaedics).

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JOHNSON & JOHNSON - FORM 8-K - EX-99.2O - EXHIBIT 99.2O - April 17, 2018

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