Johnson & Johnson
JOHNSON & JOHNSON (Form: 8-K, Received: 10/17/2017 08:35:58)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549


FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of The
Securities Exchange Act of 1934
 
Date of report (Date of earliest event reported):
 
October 17, 2017
JNJLOGOA06A02A01A01A01A13.JPG
 
(Exact name of registrant as specified in its charter)
 
 
New Jersey
I-3215
22-1024240
(State or Other Jurisdiction of Incorporation)
(Commission File Number)
(IRS Employer Identification No.)


One Johnson & Johnson Plaza, New Brunswick, New Jersey  08933
 
(Address of Principal Executive Offices)
 (Zip Code)
 
Registrant's telephone number, including area code:
732-524-0400
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
o             Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o             Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o             Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17
               CFR 240.14d-2(b))
 
o             Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17
               CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ¨  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ¨




 
 
 
 





 
Item 2.02                      Results of Operations and Financial Condition
 
On  October 17, 2017 , Johnson & Johnson issued the attached press release announcing its sales and earnings for the third quarter ended October 1, 2017 .
 
Item 9.01            Financial Statements and Exhibits

(d)     Exhibits. 
 
Exhibit No.
 
Description of Exhibit
 
 
Press Release dated October 17, 2017 for the period ended October 1, 2017.
 
 
Unaudited Comparative Supplementary Sales Data and Condensed Consolidated Statement of Earnings for the third quarter.
 
 




 
 
 


 

SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
Johnson & Johnson
 
 
 
 (Registrant)
 
 
 
 
Date: October 17, 2017
By:
/s/ Ronald A. Kapusta
 
 
 
Ronald A. Kapusta
Controller
(Principal Accounting Officer)
 





Exhibit 99.15
`
Johnson & Johnson Reports 2017 Third-Quarter Results:

2017 Third-Quarter Sales of $19.7 Billion Increased 10.3% versus 2016
2017 Third-Quarter EPS was $1.37
2017 Adjusted Third-Quarter EPS of $1.90 increased 13.1%*

Accelerated Sales and Adjusted EPS Growth
Increased Full-Year Sales and Adjusted EPS Guidance

New Brunswick, N.J. (October 17, 2017) - Johnson & Johnson (NYSE: JNJ) today announced sales of $19.7 billion for the third quarter of 2017, an increase of 10.3% as compared to the third quarter of 2016. Operational sales results increased 9.5% and the positive impact of currency was 0.8%. Domestic sales increased 9.7%. International sales increased 10.9%, reflecting operational growth of 9.3% and a positive currency impact of 1.6%. Excluding the net impact of acquisitions and divestitures, on an operational basis, worldwide, domestic and international sales each increased 3.8%. *
Net earnings and diluted earnings per share for the third quarter of 2017 were $3.8 billion and $1.37, respectively. Third-quarter 2017 net earnings included after-tax intangible amortization expense of approximately $0.9 billion and a charge for after-tax special items of approximately $0.5 billion. Third-quarter 2016 net earnings included after-tax intangible amortization expense of approximately $0.2 billion and a charge for after-tax special items of approximately $0.2 billion. Excluding after-tax intangible amortization expense and special items, adjusted net earnings for the current quarter were $5.2 billion and adjusted diluted earnings per share were $1.90, representing increases of 11.2% and 13.1%, respectively, as compared to the same period in 2016. * On an operational basis, adjusted diluted earnings per share also increased 10.1%. * A reconciliation of non-GAAP financial measures is included as an accompanying schedule.
“Johnson & Johnson accelerated growth in the third quarter. This is driven by the strong performance of our Pharmaceutical business, and augmented by Actelion and other recent acquisitions across the enterprise that will continue to fuel growth,” said Alex Gorsky, Chairman and Chief Executive Officer. “Our dedicated colleagues continue to focus on advancing our pipelines to bring innovative solutions to patients and consumers around the globe.”
The Company increased its sales guidance for the full-year 2017 to a range of $76.2 billion to $76.5 billion. Additionally, the Company increased its adjusted earnings guidance for full-year 2017 to $7.25 - $7.30 per share.*
Worldwide Consumer sales of $3.4 billion for the third quarter 2017 represented an increase of 2.9% versus the prior year, consisting of an operational increase of 1.6% and a positive impact from currency of 1.3%. Domestic sales decreased 0.5%, international sales increased 5.1%, which reflected an operational increase of 3.0% and a positive currency impact of 2.1%. Excluding the net impact of acquisitions and divestitures, on an operational basis, worldwide sales increased 1.1%, domestic sales decreased 0.7% and international sales increased 2.3% * .





Worldwide operational results, excluding the net impact of acquisitions and divestitures, were driven by over-the-counter products primarily TYLENOL ® analgesic products and international smoking cessation aids; as well as OGX ® and NEUTROGENA ® beauty products partially offset by the negative impact of domestic baby care products.
During the quarter, the divestiture of COMPEED ® to HRA Pharma was completed.
Worldwide Pharmaceutical sales of $9.7 billion for the third quarter 2017 represented an increase of 15.4% versus the prior year with an operational increase of 14.6% and a positive impact from currency of 0.8%. Domestic sales increased 15.4%; international sales increased 15.5%, which reflected an operational increase of 13.5% and a positive currency impact of 2.0%. Sales included the impact of the first full quarter of the acquisition of Actelion Ltd. which contributed 7.9%, to worldwide operational sales growth. Excluding the net impact of acquisitions and divestitures, on an operational basis, worldwide sales increased 6.7%, domestic sales increased 7.7% and international sales increased 5.1%. *
Worldwide operational results, excluding the net impact of acquisitions and divestitures, were driven by new products and the strength of core products. Strong growth in new products include DARZALEX ® (daratumumab), for the treatment of patients with multiple myeloma and IMBRUVICA ® (ibrutinib), an oral, once-daily therapy approved for use in treating certain B-cell malignancies, a type of blood or lymph node cancer. Additional contributors to operational sales growth included STELARA ® (ustekinumab), a biologic for the treatment of a number of immune-mediated inflammatory diseases, XARELTO ® (rivaroxaban), an oral anticoagulant, ZYTIGA ® (abiraterone acetate), an oral, once-daily medication for use in combination with prednisone for the treatment of metastatic, castration-resistant prostate cancer and INVEGA ® SUSTENNA ® /XEPLION ® /TRINZA ® (paliperidone palmitate), long-acting, injectable atypical antipsychotics for the treatment of schizophrenia in adults.
During the quarter, the U.S. Food and Drug Administration (FDA) approved an additional indication for IMBRUVICA ® (ibrutinib) for the treatment of adult patients with chronic graft-versus-host-disease after failure of one or more lines of systemic therapy. The European Commission granted approval for SYMTUZA ® (darunavir/cobicistat/ emtricitabine/tenofovir alafenamide) for the treatment of human immunodeficiency virus type 1 (HIV-1) infection in adults and pediatric patients aged 12 years and older.
New Drug Applications were submitted to the FDA for apalutamide, an oral androgen receptor inhibitor for men with non-metastatic castration-resistant prostate cancer and also for darunavir/cobicistat/emtricitabine/tenofovir alafenamide for the treatment of HIV-1 infection in adults and pediatric patients aged 12 years and older. In addition, a supplemental New Drug Application (sNDA) was submitted to the FDA to expand the indication for ZYTIGA ® (abiraterone acetate), in combination with prednisone and ADT to include treatment of patients with high-risk metastatic hormone naïve prostate cancer or newly diagnosed, high-risk metastatic hormone sensitive prostate cancer.
The Company has made a decision not to pursue global approvals of sirukumab for the treatment of moderately to severely active rheumatoid arthritis. In addition, the clinical trial for talacotuzumab, an investigational compound being studied in patients with acute myeloid leukemia, has been discontinued.
Worldwide Medical Devices sales of $6.6 billion for the third quarter 2017 represented an increase of 7.1% versus the prior year consisting of an operational increase of 6.6% and a positive currency impact of 0.5%. Domestic sales increased 4.6%; international sales increased 9.6%, which reflected an operational increase of 8.6% and a positive





currency impact of 1.0%. Sales included the impact of the acquisition of Abbott Medical Optics which contributed 5.2%, to worldwide operational sales growth. Excluding the net impact of acquisitions and divestitures, on an operational basis, worldwide sales increased 1.2%, domestic sales decreased 0.8% and international sales increased 3.2%. *
Worldwide operational results, excluding the net impact of acquisitions and divestitures, were driven by electrophysiology products in the Cardiovascular business, ACUVUE ® contact lenses in the Vision Care business, and wound closure products in the General Surgery business, partially offset by declines in the Diabetes Care business.
During the quarter, the acquisitions of TearScience, Inc., a manufacturer of products dedicated to treating meibomian gland dysfunction and Sightbox, Inc., an e-commerce company that provides subscription vision care services connecting consumers with eye care professionals for their contact lens needs, were completed.
Subsequent to the quarter, the Company announced the completion of the divestiture of its Codman Neurosurgery business to Integra LifeSciences Holding Corporation.

About Johnson & Johnson
Caring for the world, one person at a time, inspires and unites the people of Johnson & Johnson. We embrace research and science - bringing innovative ideas, products and services to advance the health and well-being of people. Our approximately 134,100 employees at more than 250 Johnson & Johnson operating companies work with partners in health care to touch the lives of over a billion people every day, throughout the world.
* Operational sales growth excluding the net impact of acquisitions and divestitures, as well as adjusted net earnings, adjusted diluted earnings per share and operational adjusted diluted earnings per share excluding after-tax intangible amortization expense and special items, are non-GAAP financial measures and should not be considered replacements for, and should be read together with, the most comparable GAAP financial measures. Except for guidance measures, reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures can be found in the accompanying financial schedules of the earnings release and the Investor Relations section of the company’s website at www.investor.jnj.com . Johnson & Johnson does not provide GAAP financial measures on a forward-looking basis because the company is unable to predict with reasonable certainty the ultimate outcome of legal proceedings, unusual gains and losses, acquisition-related expenses and purchase accounting fair value adjustments without unreasonable effort. These items are uncertain, depend on various factors, and could be material to Johnson & Johnson’s results computed in accordance with GAAP.
          
     Johnson & Johnson will conduct a conference call with investors to discuss this news release today at 8:30 a.m., Eastern Time. A simultaneous webcast of the call for investors and other interested parties may be accessed by visiting the Johnson & Johnson website at www.investor.jnj.com . A replay and podcast will be available approximately two hours after the live webcast by visiting www.investor.jnj.com .
Copies of the financial schedules accompanying this press release are available at www.investor.jnj.com/historical-sales.cfm . These schedules include supplementary sales data, a condensed consolidated statement of earnings, reconciliations of non-GAAP financial measures, and sales of key products/franchises. Additional information on Johnson & Johnson, including adjusted income before tax by segment, a pharmaceutical pipeline of selected compounds





in late stage development and a copy of today’s earnings call presentation can be found on the company's website at www.investor.jnj.com .

NOTE TO INVESTORS CONCERNING FORWARD-LOOKING STATEMENTS
This press release contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995 regarding, among other things, future operating and financial performance, product development, market position and business strategy. The reader is cautioned not to rely on these forward-looking statements. These statements are based on current expectations of future events. If underlying assumptions prove inaccurate or known or unknown risks or uncertainties materialize, actual results could vary materially from the expectations and projections of Johnson & Johnson. Risks and uncertainties include, but are not limited to: economic and financial market factors, such as interest rate and currency exchange rate fluctuations; competition, including technological advances, new products and patents attained by competitors; challenges inherent in product research and development, including uncertainty of clinical success and obtaining regulatory approvals; uncertainty of commercial success for new and existing products; challenges to patents; the impact of patent expirations; the ability of the company to successfully execute strategic plans, including restructuring plans; the impact of business combinations and divestitures, including the Company’s ability to successfully integrate Actelion Ltd.’s products and operations and realize the expected benefits and opportunities of the transaction in the expected time frame or at all; significant adverse litigation or government action, including related to product liability claims; changes to applicable laws and regulations, including tax laws and global health care reforms; trends toward health care cost containment; changes in behavior and spending patterns of purchasers of health care products and services; financial instability of international economies and legal systems and sovereign risk; manufacturing difficulties or delays, internally or within the supply chain; product efficacy or safety concerns resulting in product recalls or regulatory action; increased scrutiny of the health care industry by government agencies; and the potential failure to meet obligations in compliance agreements with government bodies. A further list and descriptions of these risks, uncertainties and other factors can be found in Johnson & Johnson's Annual Report on Form 10-K for the fiscal year ended January 1, 2017, including under “Item 1A. Risk Factors,” its most recently filed Quarterly Report on Form 10-Q, including in the section captioned “Cautionary Note Regarding Forward-Looking Statements,” and the company's subsequent filings with the Securities and Exchange Commission. Copies of these filings are available online at www.sec.gov, www.investor.jnj.com, or on request from Johnson & Johnson. Any forward-looking statement made in this release speaks only as of the date of this release. Johnson & Johnson does not undertake to update any forward-looking statement as a result of new information or future events or developments.




Exhibit 99.2O


Johnson & Johnson and Subsidiaries
 
 
 
 
 
 
 
 
 
Condensed Consolidated Statement of Earnings
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Unaudited; in Millions Except Per Share Figures)
THIRD QUARTER
 
 
 
 
 
 
 
 
 
 
 
2017
 
2016
 
Percent
 
 
 
Percent
 
 
 
Percent
 
Increase
 
Amount
 
to Sales
 
Amount
 
to Sales
 
(Decrease)
Sales to customers
 $ 19,650
 
         100.0
 
 $ 17,820
 
         100.0
 
10.3
Cost of products sold
         6,902
 
           35.1
 
         5,486
 
           30.8
 
25.8
Selling, marketing and administrative expenses
         5,396
 
           27.5
 
         4,772
 
           26.8
 
13.1
Research and development expense
         2,574
 
           13.1
 
         2,178
 
           12.2
 
18.2
Interest (income) expense, net
            155
 
             0.8
 
              95
 
             0.5
 
 
Other (income) expense, net
           (236)
 
            (1.2)
 
             (54)
 
            (0.2)
 
 
Restructuring
              69
 
             0.3
 
              62
 
             0.3
 
 
Earnings before provision for taxes on income
         4,790
 
           24.4
 
         5,281
 
           29.6
 
(9.3)
Provision for taxes on income
         1,026
 
             5.2
 
         1,009
 
             5.6
 
1.7
Net earnings
 $ 3,764
 
           19.2
 
 $ 4,272
 
           24.0
 
(11.9)
 
 
 
 
 
 
 
 
 
 
Net earnings per share (Diluted)
 $ 1.37
 
 
 
 $ 1.53
 
 
 
(10.5)
 
 
 
 
 
 
 
 
 
 
Average shares outstanding (Diluted)
2,737.7
 
 
 
2,785.4
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Effective tax rate
21.4
%
 
 
19.1
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted earnings before provision for taxes and net earnings  (1) (A)
 
 
 
 
 
 
 
Earnings before provision for taxes on income
 $ 6,573
 
33.5
 
 $ 5,831
 
32.7
 
12.7
Net earnings
 $ 5,208
 
26.5
 
 $ 4,683
 
26.3
 
11.2
Net earnings per share (Diluted)
 $ 1.90
 
 
 
 $ 1.68
 
 
 
13.1
Effective tax rate
20.8
%
 
 
19.7
%
 
 
 
 
 
 
 
 
 
 
 
 
 
(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.















Johnson & Johnson and Subsidiaries
 
 
 
 
 
 
 
 
 
Condensed Consolidated Statement of Earnings
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Unaudited; in Millions Except Per Share Figures)
NINE MONTHS
 
 
 
 
 
 
 
 
 
 
 
2017
 
2016
 
Percent
 
 
 
Percent
 
 
 
Percent
 
Increase
 
Amount
 
to Sales
 
Amount
 
to Sales
 
(Decrease)
Sales to customers
 $ 56,255

 
         100.0

 
 $ 53,784
 
         100.0
 
4.6
Cost of products sold
       18,111

 
           32.2

 
       16,151
 
           30.0
 
12.1
Selling, marketing and administrative expenses
       15,395

 
           27.4

 
       14,636
 
           27.2
 
5.2
Research and development expense
         6,919

 
           12.3

 
         6,455
 
           12.0
 
7.2
In-process research and development

 

 
              29
 
             0.1
 
 
Interest (income) expense, net
            360

 
             0.6

 
            274
 
             0.5
 
 
Other (income) expense, net
            192

 
             0.3

 
            464
 
             0.9
 
 
Restructuring
            165

 
             0.3

 
            296
 
             0.5
 
 
Earnings before provision for taxes on income
       15,113

 
           26.9

 
       15,479
 
           28.8
 
(2.4)
Provision for taxes on income
         3,100

 
             5.5

 
         2,753
 
             5.1
 
12.6
Net earnings
 $ 12,013

 
           21.4

 
 $ 12,726
 
           23.7
 
(5.6)
 
 
 
 
 
 
 
 
 
 
Net earnings per share (Diluted)
 $ 4.37

 
 
 
 $ 4.55
 
 
 
(4.0)
 
 
 
 
 
 
 
 
 
 
Average shares outstanding (Diluted)
2,746.4

 
 
 
2,796.6
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Effective tax rate
20.5

%
 
 
17.8
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted earnings before provision for taxes and net earnings (1) (A)
 
 
 
 
 
 
 
 
Earnings before provision for taxes on income
 $ 18,961

 
33.7

 
 $ 17,656
 
32.8
 
7.4
Net earnings
 $ 15,263

 
27.1

 
 $ 14,403
 
26.8
 
6.0
Net earnings per share (Diluted)
 $ 5.56

 
 
 
 $ 5.15
 
 
 
8.0
Effective tax rate
19.5

%
 
 
18.4
%
 
 
 
 
 
 
 
 
 
 
 
 
 
(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.







Johnson & Johnson and Subsidiaries
 
 
 
 
 
 
 
 
 
Supplementary Sales Data
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Unaudited; Dollars in Millions)
THIRD QUARTER
 
 
 
 
 
Percent Change
 
2017
 
2016
 
Total
 
Operations
 
Currency
Sales to customers by
 
 
 
 
 
 
 
 
 
segment of business
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer
 
 
 
 
 
 
 
 
 
    U.S.
 $ 1,285
 
 $ 1,291
 
  (0.5)
%
          (0.5)
 

    International
      2,071
 
      1,970
 
    5.1
 
            3.0
 
         2.1

 
      3,356
   
      3,261
 
    2.9
 
            1.6
 
         1.3

 
 
 
 
 
 
 
 
 
 
Pharmaceutical
 
 
 
 
 
 
 
 
 
    U.S.
      5,816
 
      5,042
 
  15.4
 
          15.4
 

    International
      3,879
 
      3,358
 
  15.5
 
          13.5
 
         2.0

 
      9,695
   
      8,400
 
  15.4
 
          14.6
 
         0.8

 
 
 
 
 
 
 
 
 
 
Medical Devices
 
 
 
 
 
 
 
 
 
    U.S.
      3,189
   
      3,048
 
    4.6
 
            4.6
 

    International
      3,410
 
      3,111
 
    9.6
 
            8.6
 
         1.0

 
      6,599
   
      6,159
 
7.1
 
            6.6
 
         0.5

 
 
 
 
 
 
 
 
 
 
U.S.
    10,290
 
      9,381
 
    9.7
 
            9.7
 

International
      9,360
 
      8,439
 
  10.9
 
            9.3
 
         1.6

Worldwide
 $ 19,650
 
 $ 17,820
 
  10.3
%
            9.5
 
         0.8








Johnson & Johnson and Subsidiaries
 
 
 
 
 
 
 
 
 
Supplementary Sales Data
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Unaudited; Dollars in Millions)
NINE MONTHS
 
 
 
 
 
Percent Change
 
2017
 
2016
 
Total
 
Operations
 
Currency
Sales to customers by
 
 
 
 
 
 
 
 
 
segment of business
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer
 
 
 
 
 
 
 
 
 
    U.S.
 $ 4,186
 
 $ 4,033
 
  3.8
%
            3.8
 

    International
      5,876
 
      5,842
 
  0.6
 
            0.2
 
         0.4

 
    10,062
   
      9,875
 
  1.9
 
            1.6
 
         0.3

 
 
 
 
 
 
 
 
 
 
Pharmaceutical
 
 
 
 
 
 
 
 
 
    U.S.
    15,698
 
    15,123
 
  3.8
 
            3.8
 

    International
    10,877
 
    10,109
 
  7.6
 
            8.4
 
        (0.8)

 
    26,575
   
    25,232
 
  5.3
 
            5.6
 
        (0.3)

 
 
 
 
 
 
 
 
 
 
Medical Devices
 
 
 
 
 
 
 
 
 
    U.S.
      9,510
   
      9,118
 
  4.3
 
            4.3
 

    International
    10,108
 
      9,559
 
  5.7
 
            6.3
 
        (0.6)

 
    19,618
   
    18,677
 
  5.0
 
            5.3
 
        (0.3)

 
 
 
 
 
 
 
 
 
 
U.S.
    29,394
 
    28,274
 
  4.0
 
            4.0
 

International
    26,861
 
    25,510
 
  5.3
 
            5.8
 
        (0.5)

Worldwide
 $ 56,255
 
 $ 53,784
 
  4.6
%
            4.8
 
        (0.2)






























Johnson & Johnson and Subsidiaries
 
 
 
 
 
 
 
 
 
Supplementary Sales Data
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Unaudited; Dollars in Millions)
THIRD QUARTER
 
 
 
 
 
Percent Change
 
2017
 
2016
 
Total
 
Operations
 
Currency
Sales to customers by
 
 
 
 
 
 
 
 
 
geographic area
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S.
 $ 10,290
 
 $ 9,381
 
    9.7
%
            9.7
 

 
 
 
 
 
 
 
 
 
 
Europe
      4,308
 
      3,832
 
12.4
 
            7.9
 
         4.5

Western Hemisphere excluding U.S.
      1,569
 
      1,396
 
  12.4
 
          10.1
 
         2.3

Asia-Pacific, Africa
      3,483
 
      3,211
 
    8.5
 
          10.6
 
        (2.1)

International
      9,360
 
      8,439
 
  10.9
 
            9.3
 
         1.6

 
  
 
  
 
  
 
  
 
  
Worldwide
 $ 19,650
 
 $ 17,820
 
  10.3
%
            9.5
 
         0.8














Johnson & Johnson and Subsidiaries
 
 
 
 
 
 
 
 
 
Supplementary Sales Data
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Unaudited; Dollars in Millions)
NINE MONTHS
 
 
 
 
 
Percent Change
 
2017
 
2016
 
Total
 
Operations
 
Currency
Sales to customers by
 
 
 
 
 
 
 
 
 
geographic area
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S.
 $ 29,394
 
 $ 28,274
 
  4.0
%
            4.0
 

 
 
 
 
 
 
 
 
 
 
Europe
    12,398
 
    11,769
 
  5.3
 
            6.2
 
        (0.9)

Western Hemisphere excluding U.S.
      4,522
 
      4,269
 
  5.9
 
            3.1
 
         2.8

Asia-Pacific, Africa
      9,941
 
      9,472
 
  5.0
 
            6.4
 
        (1.4)

International
    26,861
 
    25,510
 
  5.3
 
            5.8
 
        (0.5)

 
  
 
  
 
  
 
  
 
  
Worldwide
 $ 56,255
 
 $ 53,784
 
  4.6
%
            4.8
 
        (0.2)








Johnson & Johnson and Subsidiaries
 
 
 
 
 
 
 
Reconciliation of Non-GAAP Financial Measures
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Third Quarter
 
% Incr. /
 
(Dollars in Millions Except Per Share Data)
 
2017
 
2016
 
(Decr.)
 
 
 
 
 
 
 
 
 
Earnings before provision for taxes on income - as reported
 
 $ 4,790

 
  5,281

 
      (9.3)
%
 
 
 
 
 
 
 
 
Intangible asset amortization expense
 
    1,077

 
     319

 
 
 
 
 
 
 
 
 
 
 
Litigation expense, net
 
       118

 
       55

 
 
 
 
 
 
 
 
 
 
 
Restructuring/Other (1)
 
       187

 
     109

 
 
 
 
 
 
 
 
 
 
 
Actelion acquisition related cost
 
       367

 

 
 
 
 
 
 
 
 
 
 
 
Diabetes asset impairment
 
         (2)

 

 
 
 
 
 
 
 
 
 
 
 
AMO acquisition related cost
 
         36

 

 
 
 
 
 
 
 
 
 
 
 
Other
 

 
       67

 
 
 
 
 
 
 
 
 
 
 
Earnings before provision for taxes on income - as adjusted
 
 $ 6,573

 
  5,831

 
      12.7
 %
 
 
 
 
 
 
 
 
Net Earnings - as reported
 
 $ 3,764

 
  4,272

 
    (11.9)
%
 
 
 
 
 
 
 
 
Intangible asset amortization expense
 
       933

 
     236

 
 
 
 
 
 
 
 
 
 
 
Litigation expense, net
 
         97

   
       46

   
 
 
 
 
 
 
 
 
 
 
Restructuring/Other
 
       136

 
       76

 
 
 
 
 
 
 
 
 
 
 
Actelion acquisition related cost
 
       255

 

 
 
 
 
 
 
 
 
 
 
 
Diabetes asset impairment
 
         (5)

 

 
 
 
 
 
 
 
 
 
 
 
AMO acquisition related cost
 
         28

 

 
 
 
 
 
 
 
 
 
 
 
Other
 

 
       53

 
 
 
 
 
 
 
 
 
 
 
Net Earnings - as adjusted
 
 $ 5,208

 
  4,683

 
      11.2
 %
 
 
 
 
 
 
 
 
Diluted Net Earnings per share - as reported
 
 $ 1.37

 
    1.53

 
    (10.5)
%
 
 
 
 
 
 
 
 
Intangible asset amortization expense
 
      0.34

 
    0.08

 
 
 
 
 
 
 
 
 
 
 
Litigation expense, net
 
      0.04

 
    0.02

 
 
 
 
 
 
 
 
 
 
 
Restructuring/Other
 
      0.05

 
    0.03

 
 
 
 
 
 
 
 
 
 
 
Actelion acquisition related cost
 
      0.09

 

 
 
 
 
 
 
 
 
 
 
 
Diabetes asset impairment
 

 

 
 
 
 
 
 
 
 
 
 
 
AMO acquisition related cost
 
      0.01

 

 
 
 
 
 
 
 
 
 
 
 
Other
 

 
    0.02

 
 
 
 
 
 
 
 
 
 
 
Diluted Net Earnings per share - as adjusted
 
 $ 1.90

 
    1.68

 
      13.1
 %
 
 
 
 
 
 
 
 
Operational Diluted Net Earnings per share - as adjusted at 2015 foreign currency exchange rates
 
 
 
    1.68

 
 
 
 
 
 
 
 
 
 
 
Impact of currency at 2016 foreign currency exchange rates
 
    (0.05)

 

 
 
 
 
 
 
 
 
 
 
 
Operational Diluted Net Earnings per share - as adjusted at 2016 foreign currency exchange rates
 
 $ 1.85

 
    1.68

 
      10.1
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)  Includes $29M recorded in cost of products sold and $89M recorded in other (income) expense for the third quarter 2017. Includes $3M recorded in cost of products sold and $44M recorded in other (income) expense for the third quarter 2016.






Johnson & Johnson and Subsidiaries
 
 
 
 
 
 
 
Reconciliation of Non-GAAP Financial Measures
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nine Months YTD
 
% Incr. /
 
 
(Dollars in Millions Except Per Share Data)
2017
 
2016
 
(Decr.)
 
 
 
 
 
 
 
 
 
 
Earnings before provision for taxes on income - as reported
 $ 15,113

 
  15,479

 
      (2.4)
%
 
 
 
 
 
 
 
 
 
Intangible asset amortization expense
      1,886

 
       927

 
 
 
 
 
 
 
 
 
 
 
 
Litigation expense, net
         611

 
       721

 
 
 
 
 
 
 
 
 
 
 
 
Restructuring/Other (1)
         476

 
       387

 
 
 
 
 
 
 
 
 
 
 
 
Actelion acquisition related cost
         580

 

 
 
 
 
 
 
 
 
 
 
 
 
Diabetes asset impairment
         180

 

 
 
 
 
 
 
 
 
 
 
 
 
AMO acquisition related cost
         115

 

 
 
 
 
 
 
 
 
 
 
 
 
In-process research and development

 
         29

 
 
 
 
 
 
 
 
 
 
 
 
Other

 
       113

 
 
 
 
 
 
 
 
 
 
 
 
Earnings before provision for taxes on income - as adjusted
 $ 18,961

 
  17,656

 
        7.4
 %
 
 
 
 
 
 
 
 
 
Net Earnings - as reported
 $ 12,013

 
  12,726

 
      (5.6)
%
 
 
 
 
 
 
 
 
 
Intangible asset amortization expense
      1,555

 
       679

 
 
 
 
 
 
 
 
 
 
 
 
Litigation expense, net
         449

 
       595

 
 
 
 
 
 
 
 
 
 
 
 
Restructuring/Other
         358

 
       293

 
 
 
 
 
 
 
 
 
 
 
 
Actelion acquisition related cost
         454

 

 
 
 
 
 
 
 
 
 
 
 
 
Diabetes asset impairment
         120

 

 
 
 
 
 
 
 
 
 
 
 
 
AMO acquisition related cost
         314

 

 
 
 
 
 
 
 
 
 
 
 
 
In-process research and development

 
         23

 
 
 
 
 
 
 
 
 
 
 
 
Other

 
         87

 
 
 
 
 
 
 
 
 
 
 
 
Net Earnings - as adjusted
 $ 15,263

 
  14,403

 
        6.0
 %
 
 
 
 
 
 
 
 
 
Diluted Net Earnings per share - as reported
 $ 4.37

 
      4.55

 
      (4.0)
%
 
 
 
 
 
 
 
 
 
Intangible asset amortization expense
        0.57

 
      0.24

 
 
 
 
 
 
 
 
 
 
 
 
Litigation expense, net
        0.16

 
      0.21

 
 
 
 
 
 
 
 
 
 
 
 
Restructuring/Other
        0.14

 
      0.11

 
 
 
 
 
 
 
 
 
 
 
 
Actelion acquisition related cost
        0.16

 

 
 
 
 
 
 
 
 
 
 
 
 
Diabetes asset impairment
        0.05

 

 
 
 
 
 
 
 
 
 
 
 
 
AMO acquisition related cost
        0.11

 

 
 
 
 
 
 
 
 
 
 
 
 
In-process research and development

 
      0.01

 
 
 
 
 
 
 
 
 
 
 
 
Other

 
      0.03

 
 
 
 
 
 
 
 
 
 
 
 
Diluted Net Earnings per share - as adjusted
 $ 5.56

 
      5.15

 
        8.0
 %
 
 
 
 
 
 
 
 
 
Operational Diluted Net Earnings per share - as adjusted at 2015 foreign currency exchange rates
 
 
5.19

 
 
 
 
 
 
 
 
 
 
 
 
Impact of currency at 2016 foreign currency exchange rates
        0.01

 
(0.04
)
 
 
 
 
 
 
 
 
 
 
 
 
Operational Diluted Net Earnings per share - as adjusted at 2016 foreign currency exchange rates
 $ 5.57

 
      5.15

 
        8.2
 %
 
 
 
 
 
 
 
 
 
(1)  Includes $46M recorded in cost of products sold and $265M recorded in other (income) expense for nine months 2017 YTD. Includes $27M recorded in cost of products sold and $64M recorded in other (income) expense for nine months 2016 YTD.






Johnson & Johnson and Subsidiaries
 
 
 
 
 
 
 
 
Reconciliation of Non-GAAP Financial Measure
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operational Sales Growth Excluding Acquisitions and Divestitures (A)
 THIRD QUARTER 2017 ACTUAL vs. 2016 ACTUAL
 
 
 
 
 
 
 
 
 
 
 Segments
 
 
 
 
 
 
 
 
 
 
 
 Consumer
 
 Pharmaceutical
 
 Medical Devices
 
 Total
 
 
Operational % (1)
 WW As Reported:
 
1.6%
 
14.6%
 
6.6%
 
9.5%
 U.S.
 
(0.5)%
 
15.4%
 
4.6%
 
9.7%
 International
 
3.0%
 
13.5%
 
8.6%
 
9.3%
 
 
 
 
 
 
 
 
 
Beauty
 
 
 
 
 
 
 
 
Dr. Ci: Labo
 
(0.6)
 
 
 
 
 
(0.1)
 U.S.
 
0.0
 
 
 
 
 
0.0
 International
 
(1.0)
 
 
 
 
 
(0.2)
 
 
 
 
 
 
 
 
 
Vision Care
 
 
 
 
 
 
 
 
Abbott Medical Optics
 
 
 
 
 
(5.2)
 
(1.8)
 U.S.
 
 
 
 
 
(4.6)
 
(1.5)
 International
 
 
 
 
 
(5.7)
 
(2.1)
 
 
 
 
 
 
 
 
 
Pulmonary Hypertension
 
 
 
 
 
 
 
 
Actelion
 
 
 
(7.9)
 
 
 
(3.7)
 U.S.
 
 
 
(7.7)
 
 
 
(4.1)
 International
 
 
 
(8.4)
 
 
 
(3.3)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
All Other Acquisitions and Divestitures
 
0.1
 
 
 
(0.2)
 
(0.1)
 U.S.
 
(0.2)
 
 
 
(0.8)
 
(0.3)
 International
 
0.3
 
 
 
0.3
 
0.1
 
 
 
 
 
 
 
 
 
WW Ops excluding Acquisitions and Divestitures
 
1.1%
 
6.7%
 
1.2%
 
3.8%
 U.S.
 
(0.7)%
 
7.7%
 
(0.8)%
 
3.8%
 International
 
2.3%
 
5.1%
 
3.2%
 
3.8%
 
 
 
 
 
 
 
 
 
(1)  Operational growth excludes the effect of translational currency
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(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 and Subsidiaries
 
 
 
 
 
 
 
 
Reconciliation of Non-GAAP Financial Measure
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operational Sales Growth Excluding Acquisitions and Divestitures (A)
 NINE MONTHS 2017 ACTUAL vs. 2016 ACTUAL
 
 Segments
 
 
 
 
 
 
 
 
 
 
 
 Consumer
 
 Pharmaceutical
 
 Medical Devices
 
 Total
 
 
Operational %  (1)
 WW As Reported:
 
1.6%
 
5.6%
 
5.3%
 
4.8%
 U.S.
 
3.8%
 
3.8%
 
4.3%
 
4.0%
 International
 
0.2%
 
8.4%
 
6.3%
 
5.8%
 
 
 
 
 
 
 
 
 
Beauty
 
 
 
 
 
 
 
 
Vogue
 
(1.9)
 
 
 
 
 
(0.4)
 U.S.
 
(4.1)
 
 
 
 
 
(0.6)
 International
 
(0.5)
 
 
 
 
 
(0.1)
 
 
 
 
 
 
 
 
 
Other Neuroscience
 
 
 
 
 
 
 
 
Controlled Substance Raw Material and API Business
 
0.5
 
 
 
0.2
 U.S.
 
 
 
0.6
 
 
 
0.3
 International
 
 
 
0.3
 
 
 
0.1
 
 
 
 
 
 
 
 
 
Diagnostics
 
 
 
 
 
 
 
 
Ortho-Clinical Diagnostics
 
 
 
 
 
0.4
 
0.1
 U.S.
 
 
 
 
 
0.0
 
0.0
 International
 
 
 
 
 
0.8
 
0.3
 
 
 
 
 
 
 
 
 
Beauty
 
 
 
 
 
 
 
 
Dr. Ci: Labo
 
(0.3)
 
 
 
 
 
(0.1)
 U.S.
 
0.0
 
 
 
 
 
0.0
 International
 
(0.5)
 
 
 
 
 
(0.1)
 
 
 
 
 
 
 
 
 
Vision Care
 
 
 
 
 
 
 
 
Abbott Medical Optics
 
 
 
 
 
(4.1)
 
(1.4)
 U.S.
 
 
 
 
 
(3.7)
 
(1.2)
 International
 
 
 
 
 
(4.6)
 
(1.7)
 
 
 
 
 
 
 
 
 
Pulmonary Hypertension
 
 
 
 
 
 
 
 
Actelion
 
 
 
(3.0)
 
 
 
(1.4)
 U.S.
 
 
 
(2.8)
 
 
 
(1.5)
 International
 
 
 
(3.3)
 
 
 
(1.3)
 
 
 
 
 
 
 
 
 
All Other Acquisitions and Divestitures
 
(0.1)
 
 
 
(0.3)
 
0.0
 U.S.
 
(0.4)
 
 
 
(0.7)
 
(0.3)
 International
 
0.2
 
 
 
0.2
 
0.0
 
 
 
 
 
 
 
 
 
WW Ops excluding Acquisitions and Divestitures
 
(0.7)%
 
3.1%
 
1.3%
 
1.8%
 U.S.
 
(0.7)%
 
1.6%
 
(0.1)%
 
0.7%
 International
 
(0.6)%
 
5.4%
 
2.7%
 
3.0%
 
 
 
 
 
 
 
 
 
(1)  Operational growth excludes the effect of translational currency
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(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)
 
 
 
THIRD QUARTER
 
 
 
 
 
 
 
% Change
 
 
 
2017
 
2016
 
Reported
Operational  (1)
Currency

CONSUMER SEGMENT  (2) (3)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
BABY CARE
 
 
 
 
 
 
 
 
 
US
 
$
100

 
118

 
(15.3
)%
(15.3
)%
%
Intl
 
 
377

 
377

 
0.0

0.0

0.0

WW
 
 
477

 
495

 
(3.6
)
(3.6
)
0.0

 
 
 
 
 
 
 
 
 
 
BEAUTY
 
 
 
 
 
 
 
 
 
US
 
 
523

 
517

 
1.2

1.2


Intl
 
 
510

 
462

 
10.4

8.0

2.4

WW
 
 
1,033

 
979

 
5.5

4.4

1.1

 
 
 
 
 
 
 
 
 
 
ORAL CARE
 
 
 
 
 
 
 
 
 
US
 
 
154

 
156

 
(1.3
)
(1.3
)

Intl
 
 
228

 
227

 
0.4

(1.4
)
1.8

WW
 
 
382

 
383

 
(0.3
)
(1.3
)
1.0