Johnson & Johnson
JOHNSON & JOHNSON (Form: 8-K, Received: 07/17/2018 07:16:37)
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):
 
July 17, 2018
JNJLOGOA06A02A01A01A01A21.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  July 17, 2018 , Johnson & Johnson issued the attached press release announcing its sales and earnings for the second quarter ended July 1, 2018 .



Item 9.01            Financial Statements and Exhibits

(d)     Exhibits. 
 
Exhibit No.
 
Description of Exhibit
 
 
Press Release dated July 17, 2018 for the period ended July 1, 2018.
 
 
Unaudited Comparative Supplementary Sales Data and Condensed Consolidated Statement of Earnings for the second 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: July 17, 2018
By:
/s/ Ronald A. Kapusta
 
 
 
Ronald A. Kapusta
Controller
(Principal Accounting Officer)
 





Exhibit 99.15

Johnson & Johnson Reports 2018 Second-Quarter Results:

2018 Second-Quarter Sales of $20.8 Billion Increased 10.6% versus 2017
2018 Second-Quarter EPS was $1.45
2018 Adjusted Second-Quarter EPS of $2.10 increased 14.8%*

Accelerating Operational Sales Growth in the Second Quarter

New Brunswick, N.J. (July 17, 2018) - Johnson & Johnson (NYSE: JNJ) today announced sales of $20.8 billion for the second quarter of 2018, an increase of 10.6% as compared to the second quarter of 2017. Operational sales results increased 8.7% and the positive impact of currency was 1.9%. Domestic sales increased 9.4%. International sales increased 11.8%, reflecting operational growth of 7.9% and a positive currency impact of 3.9%. Excluding the net impact of acquisitions and divestitures, on an operational basis, worldwide sales increased 6.3%, domestic sales increased 5.7% and international sales increased 6.8%. *
Net earnings and diluted earnings per share for the second quarter of 2018 were $4.0 billion and $1.45, respectively. Second-quarter 2018 net earnings included after-tax intangible amortization expense of approximately $1.0 billion and a charge for after-tax special items of approximately $0.8 billion. Second-quarter 2017 net earnings included after-tax intangible amortization expense of approximately $0.4 billion and a charge for after-tax special items of approximately $0.8 billion. Excluding after-tax intangible amortization expense and special items, adjusted net earnings for the current quarter were $5.7 billion and adjusted diluted earnings per share were $2.10, representing increases of 14.0% and 14.8%, respectively, as compared to the same period in 2017. * On an operational basis, adjusted diluted earnings per share also increased 11.5%. * A reconciliation of non-GAAP financial measures is included as an accompanying schedule.
“Our strong second-quarter results reflect double-digit growth in our Pharmaceutical business and the accelerating sales momentum in our Medical Devices business, driven by the continued growth of our market leading products and strategic new launches. We remain focused on investing in innovation and meeting the needs of our customers by delivering innovative products and solutions that position the company to deliver long-term, sustainable growth,” said Alex Gorsky, Chairman and Chief Executive Officer. “Our talented J&J colleagues are united in our efforts to address some of the most critical health and consumer needs of people around the world.”
The Company updated its sales guidance for the full-year 2018 to a range of $80.5 to $81.3 billion. This reflects an increase in expected operational growth to a range of 4.5% to 5.5%, partially offset by the estimated lower favorable impact of currency. Additionally, the Company updated its adjusted earnings guidance for full-year 2018 to a range of $8.07 to $8.17 per share. This reflects an increase in expected operational growth to a range of 8.5% to 9.9%, partially offset by the estimated lower favorable impact of currency.






Segment Sales Performance
Worldwide Consumer sales of $3.5 billion for the second quarter 2018 represented an increase of 0.7% versus the prior year, consisting of an operational decrease of 0.4% and a positive impact from currency of 1.1%. Domestic sales decreased 0.7%, international sales increased 1.9%, which reflected no change in operational sales and a positive currency impact of 1.9%. Excluding the net impact of acquisitions and divestitures, on an operational basis, worldwide sales increased 0.9%, domestic sales decreased 0.7% and international sales increased 2.1% * .
Worldwide operational results, excluding the net impact of acquisitions and divestitures, were driven by over-the-counter products including TYLENOL analgesics and digestive health products, international beauty products primarily NEUTROGENA, OGX and Dr. Ci Labo, partially offset by lower sales of baby care products. During the quarter, the divestiture of the anti‐dandruff shampoo brand NIZORAL and certain other ketoconazole‐based shampoo brands was completed.
Worldwide Pharmaceutical sales of $10.4 billion for the second quarter 2018 represented an increase of 19.9% versus the prior year with an operational increase of 17.6% and a positive impact from currency of 2.3%. Domestic sales increased 17.7%; international sales increased 22.9%, which reflected an operational increase of 17.5% and a positive currency impact of 5.4%. Sales included the impact of Actelion Ltd which contributed 6.6%, to worldwide operational sales growth. Excluding the net impact of acquisitions and divestitures, on an operational basis, worldwide sales increased 11.0%, domestic sales increased 10.2% and international sales increased 11.9%. *
Worldwide operational results, excluding the net impact of acquisitions and divestitures, were driven by STELARA (ustekinumab), a biologic for the treatment of a number of immune-mediated inflammatory diseases, ZYTIGA (abiraterone acetate), an oral, once-daily medication for use in combination with prednisone for the treatment of metastatic, castration-resistant prostate cancer, DARZALEX (daratumumab), for the treatment of patients with multiple myeloma, IMBRUVICA (ibrutinib), an oral, once-daily therapy approved for use in treating certain B-cell malignancies, a type of blood or lymph node cancer, TREMFYA (guselkumab), for the treatment of adults living with moderate to severe plaque psoriasis. SIMPONI/SIMPONI ARIA (golimumab), a biologic for the treatment of a number of immune-mediated inflammatory diseases, INVEGA SUSTENNA/XEPLION/TRINZA/TREVICTA (paliperidone palmitate), long-acting, injectable atypical antipsychotics for the treatment of schizophrenia in adults, and XARELTO (rivaroxaban), an oral anticoagulant.
During the quarter, the U.S. Food and Drug Administration (FDA) approved an additional indication for DARZALEX (daratumumab) in combination with VELCADE (bortezomib), a proteasome inhibitor; melphalan, an alkylating agent; and prednisone for the treatment of patients with newly diagnosed multiple myeloma who are ineligible for autologous stem cell transplant. The European Commission granted marketing authorization for JULUCA (dolutegravir/rilpivirine), a two-drug regimen, once-daily, single-pill for the treatment of HIV-1. A supplemental New Drug Application was submitted to the FDA seeking to expand the indication of OPSUMIT (macitentan) to include the treatment of adults with inoperable chronic thromboembolic pulmonary hypertension (CTEPH, WHO Group 4) to improve exercise capacity and pulmonary vascular resistance.
Also in the quarter, the acquisition of BeneVir Biopharm, Inc., a privately-held, biopharmaceutical company specializing in the development of oncolytic immunotherapies, was completed. In addition, a worldwide collaboration





was entered into with Bristol-Myers Squibb Company to develop and commercialize Factor XIa inhibitors, including BMS-986177, for the prevention and treatment of major thrombotic conditions.
Worldwide Medical Devices sales of $7.0 billion for the second quarter 2018 represented an increase of 3.7% versus the prior year consisting of an operational increase of 1.9% and a positive currency impact of 1.8%. Domestic sales increased 1.1%; international sales increased 6.0%, which reflected an operational increase of 2.5% and a positive currency impact of 3.5%. Excluding the net impact of acquisitions and divestitures, on an operational basis, worldwide sales increased 2.9%, domestic sales increased 1.7% and international sales increased 4.1%. *
Worldwide operational results, excluding the net impact of acquisitions and divestitures, were driven by ACUVUE contact lenses and surgical products in the Vision business; electrophysiology products in the Interventional Solutions business; biosurgicals and international endocutters in the Advanced Surgery business; wound closure products in the General Surgery business and trauma products in the Orthopaedics business, partially offset by declines in the Diabetes Care business and spine products in the Orthopaedics business.
During the quarter, the Company announced acceptance of the binding offer from Platinum Equity to acquire its LifeScan business for approximately $2.1 billion, subject to customary adjustments. The Company also announced receipt of a binding offer from Fortive Corporation to acquire its Advanced Sterilization Products business for an aggregate value of approximately $2.8 billion, subject to customary adjustments. In addition, the FDA approved iDESIGN Refractive Studio, part of a next generation LASIK platform that measures the eye inside and out to enable highly precise personalized vision correction.
In July, the acquisition of assets from Medical Enterprises Distribution, LLC, a privately held developer of surgical impactor technology, including the automated ME1000 Surgical Impactor for use in hip replacement, was completed.

About Johnson & Johnson
At Johnson & Johnson, we believe good health is the foundation of vibrant lives, thriving communities and forward progress. That’s why for more than 130 years, we have aimed to keep people well at every age and every stage of life. Today, as the world’s largest and most broadly-based health care company, we are committed to using our reach and size for good. We strive to improve access and affordability, create healthier communities, and put a healthy mind, body and environment within reach of everyone, everywhere. We are blending our heart, science and ingenuity to profoundly change the trajectory of health for humanity.
* 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 factors, such as interest rate and currency exchange rate fluctuations; competition, including technological advances, new products and patents attained by competitors; challenges inherent in new 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; manufacturing difficulties or delays, internally or within the supply chain; product efficacy or safety concerns resulting in product recalls or regulatory action; significant adverse litigation or government action, including related to product liability claims; changes to applicable laws and regulations, including tax laws, global health care reforms and import/export and trade laws; 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; increased scrutiny of the health care industry by government agencies. 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 December 31, 2017, including in the sections captioned “Cautionary Note Regarding Forward-Looking Statements” and “Item 1A. Risk Factors,” and in the company’s subsequent Quarterly Reports on Form 10-Q and other filings with the Securities and Exchange Commission. Copies of these filings are available online at www.sec.gov , www.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)
SECOND QUARTER
 
 
 
 
 
 
 
 
 
 
 
2018
 
2017*
 
Percent
 
 
 
Percent
 
 
 
Percent
 
Increase
 
Amount
 
to Sales
 
Amount
 
to Sales
 
(Decrease)
Sales to customers
 $ 20,830
 
         100.0
 
 $ 18,839
 
         100.0
 
10.6
Cost of products sold
         6,927
 
           33.3
 
         5,846
 
           31.0
 
18.5
Gross Profit
       13,903
 
           66.7
 
       12,993
 
           69.0
 
7.0
Selling, marketing and administrative expenses
         5,743
 
           27.5
 
         5,289
 
           28.1
 
8.6
Research and development expense
         2,639
 
           12.7
 
         2,296
 
           12.2
 
14.9
Interest (income) expense, net
            127
 
             0.6
 
            122
 
             0.6
 
 
Other (income) expense, net
            364
 
             1.7
 
            527
 
             2.8
 
 
Restructuring
              57
 
             0.3
 
              11
 
             0.1
 
 
Earnings before provision for taxes on income
         4,973
 
           23.9
 
         4,748
 
           25.2
 
4.7
Provision for taxes on income
         1,019
 
             4.9
 
            921
 
             4.9
 
10.6
Net earnings
 $ 3,954
 
           19.0
 
 $ 3,827
 
           20.3
 
3.3
 
 
 
 
 
 
 
 
 
 
Net earnings per share (Diluted)
 $ 1.45
 
 
 
 $ 1.40
 
 
 
3.6
 
 
 
 
 
 
 
 
 
 
Average shares outstanding (Diluted)
2,721.3
 
 
 
2,741.5
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Effective tax rate
20.5
%
 
 
19.4
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted earnings before provision for taxes and net earnings  (1) (A)
 
 
 
 
 
 
 
Earnings before provision for taxes on income
 $ 7,014
 
33.7
 
 $ 6,285
 
           33.4
 
11.6
Net earnings
 $ 5,718
 
27.5
 
 $ 5,017
 
           26.6
 
14.0
Net earnings per share (Diluted)
 $ 2.10
 
 
 
 $ 1.83
 
 
 
14.8
Effective tax rate
18.5
%
 
 
20.2
%
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)  See Reconciliation of Non-GAAP Financial Measures.
 
 
 
 
 
 
 
 
 
*2017 Statement of Earnings line items have been restated to reflect impact of ASU 2017-07
 
 
 
 
 
 
 
 
 
 
(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)
SIX MONTHS
 
 
 
 
 
 
 
 
 
 
 
2018
 
2017*
 
Percent
 
 
 
Percent
 
 
 
Percent
 
Increase
 
Amount
 
to Sales
 
Amount
 
to Sales
 
(Decrease)
Sales to customers
 $ 40,839
 
         100.0
 
 $ 36,605
 
         100.0

 
11.6
Cost of products sold
       13,541
 
           33.2
 
       11,255
 
           30.8

 
20.3
Gross Profit
       27,298
 
           66.8
 
       25,350
 
69.2

 
7.7
Selling, marketing and administrative expenses
       11,006
 
           27.0
 
       10,052
 
           27.5

 
9.5
Research and development expense
         5,043
 
           12.3
 
         4,366
 
           11.9

 
15.5
Interest (income) expense, net
            272
 
             0.7
 
            205
 
             0.6

 
 
Other (income) expense, net
            424
 
             1.0
 
            308
 
             0.8

 
 
Restructuring
              99
 
             0.2
 
              96
 
             0.2

 
 
Earnings before provision for taxes on income
       10,454
 
           25.6
 
       10,323
 
           28.2

 
1.3
Provision for taxes on income
         2,133
 
             5.2
 
         2,074
 
             5.7

 
2.8
Net earnings
 $ 8,321
 
           20.4
 
 $ 8,249
 
           22.5

 
0.9
 
 
 
 
 
 
 
 
 
 
Net earnings per share (Diluted)
 $ 3.05
 
 
 
 $ 3.00
 
 
 
1.7
 
 
 
 
 
 
 
 
 
 
Average shares outstanding (Diluted)
2,728.5
 
 
 
2,749.4
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Effective tax rate
20.4
%
 
 
20.1
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted earnings before provision for taxes and net earnings  (1) (A)
 
 
 
 
 
 
Earnings before provision for taxes on income
 $ 13,872
 
34.0
 
 $ 12,388
 
           33.8

 
12.0
Net earnings
 $ 11,353
 
27.8
 
 $ 10,055
 
           27.5

 
12.9
Net earnings per share (Diluted)
 $ 4.16
 
 
 
 $ 3.66
 
 
 
13.7
Effective tax rate
18.2
%
 
 
18.8
%
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)  See Reconciliation of Non-GAAP Financial Measures.
 
 
 
 
 
 
 
 
 
*2017 Statement of Earnings line items have been restated to reflect impact of ASU 2017-07
 
 
 
 
 
 
 
 
 
 
(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)
SECOND QUARTER
 
 
 
 
 
Percent Change
 
2018
 
2017
 
Total
 
Operations
 
Currency
Sales to customers by
 
 
 
 
 
 
 
 
 
segment of business
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer
 
 
 
 
 
 
 
 
 
    U.S.
 $ 1,476
 
    1,487
 
  (0.7)
%
          (0.7)
 
    International
      2,028
 
    1,991
 
    1.9
 
0.0
 
         1.9
 
      3,504
   
    3,478
 
    0.7
 
          (0.4)
 
         1.1
 
 
 
 
 
 
 
 
 
 
Pharmaceutical
 
 
 
 
 
 
 
 
 
    U.S.
      5,899
 
    5,010
 
  17.7
 
          17.7
 
    International
      4,455
 
    3,625
 
  22.9
 
          17.5
 
         5.4
 
    10,354
   
    8,635
 
  19.9
 
          17.6
 
         2.3
 
 
 
 
 
 
 
 
 
 
Medical Devices
 
 
 
 
 
 
 
 
 
    U.S.
      3,265
   
    3,229
 
    1.1
 
            1.1
 
    International
      3,707
 
    3,497
 
    6.0
 
            2.5
 
         3.5
 
      6,972
   
    6,726
 
3.7
 
            1.9
 
         1.8
 
 
 
 
 
 
 
 
 
 
U.S.
    10,640
 
    9,726
 
    9.4
 
            9.4
 
International
    10,190
 
    9,113
 
  11.8
 
            7.9
 
         3.9
Worldwide
 $ 20,830
 
  18,839
 
  10.6
%
            8.7
 
         1.9














Johnson & Johnson and Subsidiaries
 
 
 
 
 
 
 
 
 
Supplementary Sales Data
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Unaudited; Dollars in Millions)
SIX MONTHS
 
 
 
 
 
Percent Change
 
2018
 
2017
 
Total
 
Operations
 
Currency
Sales to customers by
 
 
 
 
 
 
 
 
 
segment of business
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer
 
 
 
 
 
 
 
 
 
    U.S.
 $ 2,912
 
    2,901
 
    0.4
%
            0.4
 
    International
      3,990
 
    3,805
 
    4.9
 
            0.5
 
         4.4
 
      6,902
   
    6,706
 
    2.9
 
            0.4
 
         2.5
 
 
 
 
 
 
 
 
 
 
Pharmaceutical
 
 
 
 
 
 
 
 
 
    U.S.
    11,253
 
    9,882
 
  13.9
 
          13.9
 
    International
      8,945
 
    6,998
 
  27.8
 
          19.9
 
         7.9
 
    20,198
   
  16,880
 
  19.7
 
          16.4
 
         3.3
 
 
 
 
 
 
 
 
 
 
Medical Devices
 
 
 
 
 
 
 
 
 
    U.S.
      6,426
   
    6,321
 
    1.7
 
            1.7
 
    International
      7,313
 
    6,698
 
    9.2
 
            3.3
 
         5.9
 
    13,739
   
  13,019
 
    5.5
 
            2.5
 
         3.0
 
 
 
 
 
 
 
 
 
 
U.S.
    20,591
 
  19,104
 
    7.8
 
            7.8
 
International
    20,248
 
  17,501
 
  15.7
 
            9.3
 
         6.4
Worldwide
 $ 40,839
 
  36,605
 
  11.6
%
            8.6
 
         3.0


























Johnson & Johnson and Subsidiaries
 
 
 
 
 
 
 
 
 
Supplementary Sales Data
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Unaudited; Dollars in Millions)
SECOND QUARTER
 
 
 
 
 
Percent Change
 
2018
 
2017
 
Total
 
Operations
 
Currency
Sales to customers by
 
 
 
 
 
 
 
 
 
geographic area
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S.
 $ 10,640
 
    9,726
 
    9.4
%
            9.4
 
 
 
 
 
 
 
 
 
 
 
Europe
      4,810
 
    4,232
 
13.7
 
            6.5
 
         7.2
Western Hemisphere excluding U.S.
      1,540
 
    1,499
 
    2.7
 
            6.7
 
        (4.0)
Asia-Pacific, Africa
      3,840
 
    3,382
 
  13.5
 
          10.2
 
         3.3
International
    10,190
 
    9,113
 
  11.8
 
            7.9
 
         3.9
 
  
 
  
 
  
 
  
 
  
Worldwide
 $ 20,830
 
  18,839
 
  10.6
%
            8.7
 
         1.9










Johnson & Johnson and Subsidiaries
 
 
 
 
 
 
 
 
 
Supplementary Sales Data
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Unaudited; Dollars in Millions)
SIX MONTHS
 
 
 
 
 
Percent Change
 
2018
 
2017
 
Total
 
Operations
 
Currency
Sales to customers by
 
 
 
 
 
 
 
 
 
geographic area
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S.
 $ 20,591
 
  19,104
 
    7.8
%
            7.8
 
 
 
 
 
 
 
 
 
 
 
Europe
      9,607
 
    8,090
 
  18.8
 
            8.2
 
       10.6
Western Hemisphere excluding U.S.
      3,107
 
    2,953
 
    5.2
 
            6.9
 
        (1.7)
Asia-Pacific, Africa
      7,534
 
    6,458
 
  16.7
 
          11.9
 
         4.8
International
    20,248
 
  17,501
 
  15.7
 
            9.3
 
         6.4
 
  
 
  
 
  
 
  
 
  
Worldwide
 $ 40,839
 
  36,605
 
  11.6
%
            8.6
 
         3.0














Johnson & Johnson and Subsidiaries
 
 
 
 
 
 
 
Reconciliation of Non-GAAP Financial Measures
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Second Quarter
 
% Incr. /
 
(Dollars in Millions Except Per Share Data)
 
2018
 
2017
 
(Decr.)
 
 
 
 
 
 
 
 
 
Earnings before provision for taxes on income - as reported
 
 $ 4,973
 
         4,748
 
             4.7
%
Intangible asset amortization expense
 
         1,084
 
            480
 
 
 
Litigation expense, net
 
            703
 
            493
 
 
 
Restructuring/Other (1)
 
            176
 
            128
 
 
 
Actelion acquisition related cost
 
              64
 
            213
 
 
 
Diabetes asset impairment
 
                4
 
            182
 
 
 
AMO acquisition related cost
 
              25
 
              41
 
 
 
Unrealized loss/(gain) on securities
 
             (39)
 
 
 
 
Other
 
              24
 
 
 
 
Earnings before provision for taxes on income - as adjusted
 
 $ 7,014
 
         6,285
 
           11.6
 %
 
 
 
 
 
 
 
 
Net Earnings - as reported
 
 $ 3,954
 
         3,827
 
             3.3
%
Intangible asset amortization expense
 
            967
 
            378
 
 
 
Litigation expense, net
 
            609
   
            352
   
 
 
Restructuring/Other
 
            152
 
            101
 
 
 
Actelion acquisition related cost
 
              64
 
            199
 
 
 
Diabetes asset impairment
 
                3
 
            125
 
 
 
AMO acquisition related cost
 
              22
 
              35
 
 
 
Unrealized loss/(gain) on securities
 
             (31)
 
 
 
 
Impact of tax legislation  (2)
 
             (40)
 
 
 
 
Other
 
              18
 
 
 
 
Net Earnings - as adjusted
 
 $ 5,718
 
         5,017
 
           14.0
 %
 
 
 
 
 
 
 
 
Diluted Net Earnings per share - as reported
 
 $ 1.45
 
           1.40
 
             3.6
%
Intangible asset amortization expense
 
           0.36
 
           0.14
 
 
 
Litigation expense, net
 
           0.22
 
           0.13
 
 
 
Restructuring/Other
 
           0.06
 
           0.03
 
 
 
Actelion acquisition related cost
 
           0.02
 
           0.07
 
 
 
Diabetes asset impairment
 
 
           0.05
 
 
 
AMO acquisition related cost
 
           0.01
 
           0.01
 
 
 
Unrealized loss/(gain) on securities
 
          (0.01)
 
 
 
 
Impact of tax legislation
 
          (0.02)
 
 
 
 
Other
 
           0.01
 
 
 
 
Diluted Net Earnings per share - as adjusted
 
 $ 2.10
 
           1.83
 
           14.8
 %
 
 
 
 
 
 
 
 
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
 
          (0.06)
 
          (0.03)
 
 
 
 
 
 
 
 
 
 
 
Operational Diluted Net Earnings per share - as adjusted
 
 
 
 
 
 
 
at 2017 foreign currency exchange rates
 
 $ 2.04
 
           1.83
 
           11.5
 %
 
 
 
 
 
 
 
 
(1)  Includes $44M recorded in cost of products sold and $75M recorded in other (income) expense for the second quarter 2018. Includes $13M recorded in cost of products sold and $104M recorded in other (income) expense for the second quarter 2017.
 
(2)  Includes foreign currency translation






Johnson & Johnson and Subsidiaries
 
 
 
 
 
 
 
Reconciliation of Non-GAAP Financial Measures
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Six Months YTD
 
% Incr. /
 
(Dollars in Millions Except Per Share Data)
 
2018
 
2017
 
(Decr.)
 
 
 
 
 
 
 
 
 
Earnings before provision for taxes on income - as reported
 
 $ 10,454
 
       10,323
 
             1.3
%
Intangible asset amortization expense
 
         2,199
 
            809
 
 
 
Litigation expense, net
 
            703
 
            493
 
 
 
Restructuring/Other  (1)
 
            283
 
            289
 
 
 
Actelion acquisition related cost
 
            160
 
            213
 
 
 
Diabetes asset impairment
 
                4
 
            182
 
 
 
AMO acquisition related cost
 
              46
 
              79
 
 
 
Unrealized loss/(gain) on securities
 
             (12)
 
 
 
 
Other
 
              35
 
 
 
 
Earnings before provision for taxes on income - as adjusted
 
 $ 13,872
 
       12,388
 
           12.0
 %
 
 
 
 
 
 
 
 
Net Earnings - as reported
 
 $ 8,321
 
         8,249
 
             0.9
%
Intangible asset amortization expense
 
         1,963
 
            622
 
 
 
Litigation expense, net
 
            609
 
            352
 
 
 
Restructuring/Other
 
            233
 
            222
 
 
 
Actelion acquisition related cost
 
            156
 
            199
 
 
 
Diabetes asset impairment
 
                3
 
            125
 
 
 
AMO acquisition related cost
 
              39
 
            286
 
 
 
Unrealized loss/(gain) on securities
 
             (10)
 
 
 
 
Impact of tax legislation  (2)
 
              12
 
 
 
 
Other
 
              27
 
 
 
 
Net Earnings - as adjusted
 
 $ 11,353
 
       10,055
 
           12.9
 %
 
 
 
 
 
 
 
 
Diluted Net Earnings per share - as reported
 
 $ 3.05
 
           3.00
 
             1.7
%
Intangible asset amortization expense
 
           0.72
 
           0.23
 
 
 
Litigation expense, net
 
           0.22
 
           0.13
 
 
 
Restructuring/Other
 
           0.09
 
           0.08
 
 
 
Actelion acquisition related cost
 
           0.05
 
           0.07
 
 
 
Diabetes asset impairment
 
 
           0.05
 
 
 
AMO acquisition related cost
 
           0.01
 
           0.10
 
 
 
Unrealized loss/(gain) on securities
 
 
 
 
 
Impact of tax legislation
 
           0.01
 
 
 
 
Other
 
           0.01
 
 
 
 
Diluted Net Earnings per share - as adjusted
 
 $ 4.16
 
           3.66
 
           13.7
 %
 
 
 
 
 
 
 
 
Operational Diluted Net Earnings per share - as adjusted
 
 
 
 
 
 
 
at 2016 foreign currency exchange rates
 
 
 
           3.72
 
 
 
 
 
 
 
 
 
 
 
Impact of currency at 2017 foreign currency exchange rates
 
          (0.19)
 
          (0.06)
 
 
 
 
 
 
 
 
 
 
 
Operational Diluted Net Earnings per share - as adjusted
 
 
 
 
 
 
 
at 2017 foreign currency exchange rates
 
 $ 3.97
 
           3.66
 
             8.5
 %
 
 
 
 
 
 
 
 
(1)  Includes $50M recorded in cost of products sold and $134M recorded in other (income) expense for six months 2018 YTD. Includes $17M recorded in cost of products sold and $176M recorded in other (income) expense for six months 2017 YTD.
 
 
 
 
 
 
 
 
(2)  Includes foreign currency translation








Johnson & Johnson and Subsidiaries
 
 
 
 
 
 
Reconciliation of Non-GAAP Financial Measure
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operational Sales Growth Excluding Acquisitions and Divestitures (A)
 SECOND QUARTER 2018 ACTUAL vs. 2017 ACTUAL
 
 
 
 
 
 
 
 
 
 Segments
 
 
 Consumer
 
 Pharmaceutical
 
 Medical Devices
 
 Total
 
 
Operational %  (1)
 WW As Reported:
 
(0.4)%
 
17.6%
 
1.9%
 
8.7%
 U.S.
 
(0.7)%
 
17.7%
 
1.1%
 
9.4%
 International
 
0.0%
 
17.5%
 
2.5%
 
7.9%
 
 
 
 
 
 
 
 
 
Pulmonary Hypertension
 
 
 
 
 
 
 
 
Actelion
 
 
 
(6.3)
 
 
 
(3.0)
 U.S.
 
 
 
(7.4)
 
 
 
(3.8)
 International
 
 
 
(5.2)
 
 
 
(2.0)
 
 
 
 
 
 
 
 
 
Cardiovascular / Metabolism / Other
 
 
 
 
 
 
Actelion
 
 
 
(0.3)
 
 
 
(0.1)
 U.S.
 
 
 
(0.1)
 
 
 
(0.1)
 International
 
 
 
(0.4)
 
 
 
(0.2)
 
 
 
 
 
 
 
 
 
Spine & Other
 
 
 
 
 
 
 
 
Codman Neuroscience
 
 
 
 
 
1.0
 
0.4
 U.S.
 
 
 
 
 
0.6
 
0.2
 International
 
 
 
 
 
1.5
 
0.6
 
 
 
 
 
 
 
 
 
Wound Care / Other
 
1.0
 
 
 
 
 
0.2
Compeed
0.0
 
 
 
 
 
0.0
 U.S.
 
1.7
 
 
 
 
 
0.4
 International
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
All Other Acquisitions and Divestitures
0.3
 
 
 
0.0
 
0.1
 U.S.
 
0.0
 
 
 
0.0
 
0.0
 International
 
0.4
 
 
 
0.1
 
0.1
 
 
 
 
 
 
 
 
 
WW Ops excluding Acquisitions and Divestitures
 
0.9%
 
11.0%
 
2.9%
 
6.3%
 U.S.
 
(0.7)%
 
10.2%
 
1.7%
 
5.7%
 International
 
2.1%
 
11.9%
 
4.1%
 
6.8%
 
 
 
 
 
 
 
 
 
(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)
 SIX MONTHS 2018 ACTUAL vs. 2017 ACTUAL
 
 
 
 
 
 
 
 
 
 Segments
 
 
 Consumer
 
 Pharmaceutical
 
 Medical Devices
 
 Total
 
 
Operational %  (1)
 WW As Reported:
 
0.4%
 
16.4%
 
2.5%
 
8.6%
 U.S.
 
0.4%
 
13.9%
 
1.7%
 
7.8%
 International
 
0.5%
 
19.9%
 
3.3%
 
9.3%
 
 
 
 
 
 
 
 
 
Pulmonary Hypertension
 
 
 
 
 
 
 
 
Actelion
 
 
 
(6.8)
 
 
 
(3.1)
 U.S.
 
 
 
(7.4)
 
 
 
(3.8)
 International
 
 
 
(5.9)
 
 
 
(2.4)
 
 
 
 
 
 
 
 
 
Cardiovascular / Metabolism / Other
 
 
 
 
 
 
 
 
Actelion
 
 
 
(0.3)
 
 
 
(0.2)
 U.S.
 
 
 
(0.2)
 
 
 
(0.1)
 International
 
 
 
(0.5)
 
 
 
(0.2)
 
 
 
 
 
 
 
 
 
Spine & Other
 
 
 
 
 
 
 
 
Codman Neuroscience
 
 
 
 
 
1.0
 
0.3
 U.S.
 
 
 
 
 
0.6
 
0.2
 International
 
 
 
 
 
1.4
 
0.6
 
 
 
 
 
 
 
 
 
Wound Care / Other
 
 
 
 
 
 
 
 
Compeed
 
0.9
 
 
 
 
 
0.2
 U.S.
 
0.0
 
 
 
 
 
0.0
 International
 
1.5
 
 
 
 
 
0.4
 
 
 
 
 
 
 
 
 
Vision
 
 
 
 
 
 
 
 
Vision Surgical & Eye Health Business
 
 
 
 
 
(1.5)
 
(0.5)
 U.S.
 
 
 
 
 
(1.4)
 
(0.5)
 International
 
 
 
 
 
(1.6)
 
(0.6)
 
 
 
 
 
 
 
 
 
All Other Acquisitions and Divestitures
 
0.1
 
 
 
0.0
 
0.0
 U.S.
 
0.0
 
 
 
(0.2)
 
0.0
 International
 
0.3
 
 
 
0.1
 
0.1
 
 
 
 
 
 
 
 
 
WW Ops excluding Acquisitions and Divestitures
 
1.4%
 
9.3%
 
2.0%
 
5.3%
 U.S.
 
0.4%
 
6.3%
 
0.7%
 
3.6%
 International
 
2.3%
 
13.5%
 
3.2%
 
7.2%
 
 
 
 
 
 
 
 
 
(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)
 
 
 
SECOND QUARTER
 
 
 
 
 
 
 
% Change
 
 
 
2018
 
2017
 
Reported
Operational  (1)
Currency

CONSUMER SEGMENT  (2)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
BABY CARE
 
 
 
 
 
 
 
 
 
US
 
$
89

 
113

 
(21.2
)%
(21.2
)%
 %
Intl
 
 
367

 
381

 
(3.7
)
(2.7
)
(1.0
)
WW
 
 
456

 
494

 
(7.7
)
(6.9
)
(0.8
)
 
 
 
 
 
 
 
 
 
 
BEAUTY
 
 
 
 
 
 
 
 
 
US
 
 
637

 
649

 
(1.8
)
(1.8
)

Intl
 
 
472

 
427

 
10.5

7.3

3.2

WW
 
 
1,109

 
1,076

 
3.1

1.8

1.3

 
 
 
 
 
 
 
 
 
 
ORAL CARE
 
 
 
 
 
 
 
 
 
US
 
 
157

 
150

 
4.7

4.7


Intl
 
 
236

 
244

 
(3.3
)
(5.5
)
2.2

WW
 
 
393

 
394

 
(0.3
)
(1.7
)
1.4

 
 
 
 
 
 
 
 
 
 
OTC
 
 
 
 
 
 
 
 
 
US
 
 
454

 
432

 
5.1

5.1


Intl
 
 
612

 
574

 
6.6

2.5

4.1

WW
 
 
1,066

 
1,006

 
6.0

3.7

2.3

 
 
 
 
 
 
 
 
 
 
WOMEN'S HEALTH
 
 
 
 
 
 
 
 
 
US
 
 
4

 
3

 
33.3

33.3


Intl
 
 
276

 
273

 
1.1

1.9

(0.8
)
WW
 
 
280

 
276

 
1.4

2.2

(0.8
)
 
 
 
 
 
 
 
 
 
 
WOUND CARE/OTHER
 
 
 
 
 
 
 
 
 
US
 
 
135

 
140

 
(3.6
)
(3.6
)

Intl
 
 
65

 
92

 
(29.3
)
(31.3
)
2.0

WW
 
 
200

 
232

 
(13.8
)
(14.6
)
0.8

 
 
 
 
 
 
 
 
 
 
TOTAL CONSUMER
 
 
 
 
 
 
 
 
 
US
 
 
1,476

 
1,487

 
(0.7
)
(0.7
)

Intl
 
 
2,028

 
1,991

 
1.9

0.0

1.9

WW
 
$
3,504

 
3,478

 
0.7
 %
(0.4
)%
1.1
 %
 
 
 
 
 
 
 
 
 
 
See footnotes at end of schedule
 
 
 
 
 
 
 
 
 






Johnson & Johnson
Segment Sales
(Dollars in Millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
SECOND QUARTER
 
 
 
 
 
 
 
% Change
 
 
 
2018
 
2017
 
Reported
Operational  (1)
Currency

PHARMACEUTICAL SEGMENT   (2) (5)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
IMMUNOLOGY
 
 
 
 
 
 
 
 
 
US
 
$
2,317

 
2,101

 
10.3
 %
10.3
 %
%
Intl
 
 
1,021

 
858

 
19.0

14.6

4.4

WW
 
 
3,338

 
2,959

 
12.8

11.5

1.3

       REMICADE
 
 
 
 
 
 
 
 
 
     US
 
 
918

 
1,064

 
(13.7
)
(13.7
)

     US Exports  (3)
 
 
104

 
127

 
(18.1
)
(18.1
)

     Intl
 
 
298

 
339

 
(12.1
)
(14.0
)
1.9

     WW
 
 
1,320

 
1,530

 
(13.7
)
(14.1
)
0.4

      SIMPONI / SIMPONI ARIA
 
 
 
 
 
 
 
 
 
     US
 
 
274

 
230

 
19.1

19.1