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Johnson & Johnson Announces Updated Financials and 2023 Guidance Following Completion of the Kenvue Separation

08/30/2023
  • Company expects increased 2023 Reported Sales Growth of 7.0% - 8.0%, Operational Sales Growth of 7.5% - 8.5%, and Adjusted Operational Sales Growth of 6.2% - 7.2%; Figures exclude the COVID-19 Vaccine
  • Company expects 2023 Adjusted Reported Earnings Per Share (EPS) of $10.00 - $10.10, reflecting increased growth of 12.5% at the mid-point and Adjusted Operational EPS of $9.90 - $10.00, reflecting increased growth of 11.5% at the mid-point
  • Company reduced outstanding share count by approximately 191 million; 2023 guidance reflects only a partial-year benefit of approximately 73.5 million shares or $0.28 benefit to EPS
  • Company secured $13.2 billion in cash proceeds from the Kenvue debt offering and initial public offering and maintains 9.5% of equity stake in Kenvue
  • Company maintains its quarterly dividend of $1.19 per share

Johnson & Johnson (NYSE: JNJ) (“the Company”) today announced updates to its financials and 2023 guidance which reflect its operations as a company focused on transformational innovation in Pharmaceutical and MedTech. The Company has published a recorded webinar for investors to provide additional context behind the updated financials and 2023 guidance found in this release, which may be accessed by visiting the Investors section of the Company's website at webcasts & presentations.

“The completion of this transaction uniquely positions Johnson & Johnson as a Pharmaceutical and MedTech company focused on delivering transformative healthcare solutions to patients,” said Joaquin Duato, Chairman of the Board and Chief Executive Officer. “We are incredibly proud of the focus and dedication of our employees worldwide to achieve this milestone, which we are confident will unlock near- and long-term value for all of our stakeholders.”

As previously announced, the Company recently completed an exchange offer to finalize the separation of Kenvue Inc., formerly Johnson & Johnson’s Consumer Health business. As a result of the completion of the exchange offer, Johnson & Johnson will now present its Consumer Health business financial results as discontinued operations, including a gain of approximately $20 billion in the third quarter of 2023.

Unless otherwise noted, the financial results and earnings guidance included below have been recast to reflect the continuing operations of Johnson & Johnson.

FINANCIAL RESULTS

SIX MONTHS

($ in Millions, except EPS)

2023

2022

% Change

Reported Sales

$42,413

$40,055

5.9%

Net Earnings

$4,885

$8,833

(44.7)%

EPS (diluted)

$1.86

$3.31

(43.8)%

 

 

 

 

 

SIX MONTHS

Non-GAAP* ($ in Millions, except EPS)

2023

2022

% Change

Operational Sales1,2

 

 

8.0%

Adjusted Operational Sales1,3

 

 

6.4%

Adjusted Net Earnings1,4

$13,070

$12,426

5.2%

Adjusted EPS (diluted) 1,4

$4.97

$4.66

6.7%

1 Non-GAAP financial measure; refer to reconciliations of non-GAAP financial measures included in accompanying schedules
2 Excludes the impact of translational currency
3 Excludes the net impact of acquisitions and divestitures and translational currency
4 Excludes intangible amortization expense and special items
Note: Values may have been rounded

REGIONAL SALES RESULTS

SIX MONTHS

% Change

($ in Millions)

2023

2022

Reported

Operational1,2

Currency

Adjusted
Operational1,3

U.S.

$22,439

$20,367

10.2%

10.2

-

7.6

International

19,974

19,688

1.5

5.8

(4.3)

5.4

Worldwide

$42,413

$40,055

5.9%

8.0

(2.1)

6.4

1 Non-GAAP financial measure; refer to reconciliations of non-GAAP financial measures included in accompanying schedules
2 Excludes the impact of translational currency
3 Excludes the net impact of acquisitions and divestitures and translational currency
Note: Values may have been rounded

SEGMENT SALES RESULTS

SIX MONTHS

 

% Change

($ in Millions)

2023

2022

Reported

Operational1,2

Currency

Adjusted
Operational1,3

Pharmaceutical

27,144

26,186

3.7

5.5

(1.8)

5.6

MedTech

15,269

13,869

10.1

12.8

(2.7)

8.1

Worldwide

$42,413

$40,055

5.9%

8.0

(2.1)

6.4

1 Non-GAAP financial measure; refer to reconciliations of non-GAAP financial measures included in accompanying schedules
2 Excludes the impact of translational currency
3 Excludes the net impact of acquisitions and divestitures and translational currency
Note: Values may have been rounded

UPDATED FULL-YEAR 2023 GUIDANCE:

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.

($ in Billions, except EPS; Shares in Millions)

August 2023
(excl. Consumer Health)

July 2023
(incl. Consumer Health) 6

Adjusted Operational Sales1,2,5
Change vs. Prior Year / Mid-point

6.2% – 7.2% / 6.7%

6.0% – 7.0% / 6.5%

Operational Sales2,5 / Mid-point
Change vs. Prior Year / Mid-point

$83.6B – $84.4B / $84.0B

7.5% – 8.5% / 8.0%

$99.3B – $100.3B / $99.8B

7.0% – 8.0% / 7.5%

Reported Sales3,5 / Mid-point
Change vs. Prior Year / Mid-point

$83.2B – $84.0B / $83.6B

7.0% – 8.0% / 7.5%

$98.8B – $99.8B / $99.3B

6.5% – 7.5% / 7.0%

 

 

 

Adjusted Operational EPS (Diluted)2,4 / Mid-point
Change vs. Prior Year / Mid-point

$9.90 – $10.00 / $9.95

11.0% – 12.0% / 11.5%

$10.60 – $10.70 / $10.65

4.5% – 5.5% / 5.0%

Adjusted EPS (Diluted)3,4 / Mid-point
Change vs. Prior Year / Mid-point

$10.00 – $10.10 / $10.05

12.0% – 13.0% / 12.5%

$10.70 – $10.80 / $10.75

5.5% – 6.5% / 6.0%

Average Shares Outstanding (Diluted)

~2,557.28

2,630.77

1 Non-GAAP financial measure; excludes the net impact of acquisitions and divestitures
2 Non-GAAP financial measure; excludes the impact of translational currency
3 Calculated using Euro Average Rate: July 2023 = $1.09 (Illustrative purposes only)
4 Non-GAAP financial measure; excludes intangible amortization expense and special items
5 Excludes COVID-19 Vaccine
6 The July 2023 financial measures that were previously communicated reflect amounts before the separation of Kenvue and therefore include the Consumer Health results
7 Average shares outstanding (Diluted) as reported on Q2 2023 Form 10-Q
8 Full Year 2023 Projected Average Shares Outstanding (Diluted) only reflects impact from the Kenvue exchange offer
Note: percentages may have been rounded

Following completion of the Kenvue exchange offer, the Company has reduced its outstanding share count by the approximately 191 million shares of common stock accepted in the exchange offer.

The weighted average shares outstanding used in the calculation of the August 2023 Guidance for Adjusted Diluted EPS reflects the net reduction of approximately 73.5 million shares of Johnson & Johnson outstanding common stock as a result of the Kenvue exchange offer. Because this net reduction occurred on August 23, 2023, Johnson & Johnson will recognize only a partial-year benefit of $0.28 to its full-year 2023 Adjusted Diluted EPS.

The Company generated $13.2 billion in cash proceeds as result of the Kenvue debt offering and initial public offering. Additionally, Johnson & Johnson maintains a 9.5% stake in Kenvue common stock, which provides the Company the opportunity to monetize the retained stake in a tax efficient manner in the next year, subject to a current 90-day lockup agreement. Johnson & Johnson is under no obligation to do so if market conditions are not supportive.

The Company will maintain its quarterly dividend of $1.19 per share.

WEBINAR INFORMATION:

Johnson & Johnson has published a recorded webinar for investors to provide additional context behind the updated financials and 2023 guidance found in this release. This webinar, along with supplemental information, may be accessed by visiting the Investors section of the Company's website at webcasts & presentations.

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 135 years, we have aimed to keep people well at every age and every stage of life. Today, as the world’s largest, most diversified healthcare products 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.

NON-GAAP FINANCIAL MEASURES:

* “Operational sales growth” excluding the impact of translational currency, “adjusted operational sales growth” excluding the net impact of acquisitions and divestitures and translational currency, as well as “adjusted net earnings”, “adjusted diluted earnings per share” and “adjusted operational 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 release and the Investors section of the Company's website at webcasts & presentations.

Copies of the financial schedules accompanying this release are available on the Company’s website at webcasts & presentations. These schedules include supplementary sales data, a condensed consolidated statement of earnings, and reconciliations of non-GAAP financial measures.

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, and 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 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; increased scrutiny of the health care industry by government agencies; the Company’s ability to realize the anticipated benefits from the separation of the Company’s Consumer Health business; and the New Consumer Health Company’s ability to succeed as a standalone publicly traded company. 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, 2023, including in the sections captioned “Cautionary Note Regarding Forward-Looking Statements” and “Item 1A. Risk Factors,” and in Johnson & Johnson’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.

 
Johnson & Johnson and Subsidiaries
Supplementary Sales Data
 
(Unaudited; Dollars in Millions) FIRST QUARTER
Percent Change

2023

 

2022

 

Total

 

Operations

 

Currency

Sales to customers by
geographic area
 
U.S.

$

10,782

9,857

9.4

 

%

9.4

 

-

 

 
Europe

 

5,590

5,341

4.7

 

9.4

 

(4.7

)

Western Hemisphere excluding U.S.

 

1,076

998

7.8

 

15.5

 

(7.7

)

Asia-Pacific, Africa

 

3,446

3,644

(5.4

)

3.1

 

(8.5

)

International

 

10,112

9,983

1.3

 

7.7

 

(6.4

)

 
Worldwide

$

20,894

19,840

5.3

 

%

8.5

 

(3.2

)

 
 
(Unaudited; Dollars in Millions) SECOND QUARTER
Percent Change

2023

 

2022

 

Total

 

Operations

 

Currency

Sales to customers by
geographic area
 
U.S.

$

11,657

10,510

10.9

 

%

10.9

 

-

 

 
Europe

 

5,131

5,355

(4.2

)

(5.2

)

1.0

 

Western Hemisphere excluding U.S.

 

1,136

1,027

10.7

 

16.8

 

(6.2

)

Asia-Pacific, Africa

 

3,595

3,323

8.2

 

14.3

 

(6.1

)

International

 

9,862

9,705

1.6

 

3.8

 

(2.2

)

 
Worldwide

$

21,519

20,215

6.5

 

%

7.5

 

(1.0

)

 
 
(Unaudited; Dollars in Millions) SIX MONTHS
Percent Change

2023

 

2022

 

Total

 

Operations

 

Currency

Sales to customers by
geographic area
 
U.S.

$

22,439

20,367

10.2

 

%

10.2

 

-

 

 
Europe

 

10,721

10,696

0.2

 

2.1

 

(1.9

)

Western Hemisphere excluding U.S.

 

2,212

2,025

9.3

 

16.2

 

(6.9

)

Asia-Pacific, Africa

 

7,041

6,967

1.1

 

8.5

 

(7.4

)

International

 

19,974

19,688

1.5

 

5.8

 

(4.3

)

 
Worldwide

$

42,413

40,055

5.9

 

%

8.0

 

(2.1

)

Note: Percentages have been calculated using actual, non-rounded figures and, therefore, may not recalculate precisely

 
Johnson & Johnson and Subsidiaries
Supplementary Sales Data
 
(Unaudited; Dollars in Millions) FIRST QUARTER
Percent Change

2022

 

2021

 

Total

 

Operations

 

Currency

Sales to customers by
geographic area
 
U.S.

$

9,857

9,500

3.8

 

%

3.8

 

-

 

 
Europe

 

5,341

4,727

13.0

 

21.2

 

(8.2

)

Western Hemisphere excluding U.S.

 

998

968

3.0

 

4.2

 

(1.2

)

Asia-Pacific, Africa

 

3,644

3,485

4.6

 

8.3

 

(3.7

)

International

 

9,983

9,180

8.7

 

14.5

 

(5.8

)

 
Worldwide

$

19,840

18,680

6.2

 

%

9.1

 

(2.9

)

 
 
(Unaudited; Dollars in Millions) SECOND QUARTER
Percent Change

2022

 

2021

 

Total

 

Operations

 

Currency

Sales to customers by
geographic area
 
U.S.

$

10,510

10,168

3.4

 

%

3.4

 

-

 

 
Europe

 

5,355

4,936

8.5

 

22.1

 

(13.6

)

Western Hemisphere excluding U.S.

 

1,027

933

10.2

 

13.2

 

(3.0

)

Asia-Pacific, Africa

 

3,323

3,421

(2.9

)

6.2

 

(9.1

)

International

 

9,705

9,290

4.5

 

15.4

 

(10.9

)

 
Worldwide

$

20,215

19,458

3.9

 

%

9.1

 

(5.2

)

 
 
(Unaudited; Dollars in Millions) THIRD QUARTER
Percent Change

2022

 

2021

 

Total

 

Operations

 

Currency

Sales to customers by
geographic area
 
U.S.

$

10,794

10,338

4.4

 

%

4.4

 

-

 

 
Europe

 

4,844

4,833

0.2

 

16.1

 

(15.9

)

Western Hemisphere excluding U.S.

 

1,059

1,019

3.9

 

9.1

 

(5.2

)

Asia-Pacific, Africa

 

3,299

3,336

(1.1

)

11.4

 

(12.5

)

International

 

9,202

9,188

0.1

 

13.6

 

(13.5

)

 
Worldwide

$

19,996

19,526

2.4

 

%

8.7

 

(6.3

)

 
 
(Unaudited; Dollars in Millions) FOURTH QUARTER
Percent Change

2022

 

2021

 

Total

 

Operations

 

Currency

Sales to customers by
geographic area
 
U.S.

$

10,820

10,634

1.7

 

%

1.7

 

-

 

 
Europe

 

5,124

6,099

(16.0

)

(6.3

)

(9.7

)

Western Hemisphere excluding U.S.

 

1,024

1,007

1.7

 

8.3

 

(6.6

)

Asia-Pacific, Africa

 

2,971

3,336

(10.9

)

3.0

 

(13.9

)

International

 

9,119

10,442

(12.7

)

(1.9

)

(10.8

)

 
Worldwide

$

19,939

21,076

(5.4

)

%

(0.1

)

(5.3

)

 
 
(Unaudited; Dollars in Millions) TWELVE MONTHS
Percent Change

2022

 

2021

 

Total

 

Operations

 

Currency

Sales to customers by
geographic area
 
U.S.

$

41,981

40,640

3.3

 

%

3.3

 

-

 

 
Europe

 

20,664

20,595

0.3

 

12.1

 

(11.8

)

Western Hemisphere excluding U.S.

 

4,108

3,927

4.6

 

8.7

 

(4.1

)

Asia-Pacific, Africa

 

13,237

13,578

(2.5

)

7.2

 

(9.7

)

International

 

38,009

38,100

(0.2

)

10.0

 

(10.2

)

 
Worldwide

$

79,990

78,740

1.6

 

%

6.5

 

(4.9

)

Note: Percentages have been calculated using actual, non-rounded figures and, therefore, may not recalculate precisely

 
Johnson & Johnson and Subsidiaries
Condensed Consolidated Statement of Earnings
 
(Unaudited; in Millions Except Per Share Figures)

2023

 
Q1 Q2 SIX MONTHS
Percent Percent Percent

Amount

to Sales

Amount

to Sales Amount to Sales
Sales to customers

$

20,894

 

100.0

 

$

21,519

 

100.0

 

$

42,413

 

100.0

 

Cost of products sold

 

6,687

 

32.0

 

 

6,462

 

30.0

 

 

13,149

 

31.0

 

Gross Profit

 

14,207

 

68.0

 

 

15,057

 

70.0

 

 

29,264

 

69.0

 

Selling, marketing and administrative expenses

 

4,906

 

23.5

 

 

5,396

 

25.1

 

 

10,302

 

24.3

 

Research and development expense

 

3,455

 

16.6

 

 

3,703

 

17.2

 

 

7,158

 

16.9

 

In-process research and development Impairments

 

49

 

0.2

 

 

-

 

-

 

 

49

 

0.1

 

Interest income

 

(198

)

(0.9

)

 

(326

)

(1.5

)

 

(524

)

(1.2

)

Interest expense, net of portion capitalized

 

212

 

1.0

 

 

217

 

1.0

 

 

429

 

1.0

 

Other (income) expense, net

 

6,940

 

33.2

 

 

(384

)

(1.8

)

 

6,556

 

15.5

 

Restructuring

 

130

 

0.6

 

 

145

 

0.7

 

 

275

 

0.6

 

Earnings/(loss) before provision for taxes on income

 

(1,287

)

(6.2

)

 

6,306

 

29.3

 

 

5,019

 

11.8

 

Provision for/(Benefit from) taxes on income

 

(796

)

(3.9

)

 

930

 

4.3

 

 

134

 

0.3

 

Net earnings/(loss) from Continuing Operations

$

(491

)

(2.3

)

$

5,376

 

25.0

 

$

4,885

 

11.5

 

Net earnings/(loss) from Discontinued Operations, net of tax

 

423

 

 

(232

)

 

191

 

Net earnings/(loss)

$

(68

)

$

5,144

 

$

5,076

 

 
Net Earnings (loss) per Share (Diluted) from Continuing Operations

$

(0.19

)

$

2.05

 

$

1.86

 

Net Earnings (loss) per Share (Diluted) from Discontinued Operations

$

0.16

 

$

(0.09

)

$

0.07

 

 
Average shares outstanding (Diluted)

 

2,605.5

 

*

 

2,625.7

 

 

2,630.7

 

*Basic Shares used as in an overall loss position
Effective tax rate from Continuing Operations

 

61.8

 

%

 

14.7

 

%

 

2.7

 

%

 
Adjusted earnings from continuing operations before provision for taxes and net earnings (1)
Earnings before provision for taxes on income from continuing operations

$

7,536

 

36.1

 

$

8,005

 

37.2

 

$

15,541

 

36.6

 

Net earnings from continuing operations

$

6,340

 

30.3

 

$

6,730

 

31.3

 

$

13,070

 

30.8

 

Net earnings per share (Diluted) from continuing operations

$

2.41

 

$

2.56

 

$

4.97

 

Average shares outstanding (Diluted)

 

2,634.3

 

 

2,625.7

 

 

2,630.7

 

Effective tax rate from continuing operations

 

15.9

 

%

 

15.9

 

%

 

15.9

 

%

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

 
Johnson & Johnson and Subsidiaries
Condensed Consolidated Statement of Earnings
 
(Unaudited; in Millions Except Per Share Figures)

2022

 
Q1 Q2 SIX MONTHS Q3 Q4 FULL YEAR

 

 

Percent

 

 

 

Percent

 

 

 

Percent

 

 

 

Percent

 

 

Percent Percent

Amount

 

to Sales

 

Amount

 

to Sales

 

Amount

 

to Sales

 

Amount

 

to Sales

 

Amount

to Sales Amount to Sales
Sales to customers

$

19,840

 

100.0

 

$

20,215

 

100.0

 

$

40,055

 

100.0

 

$

19,996

 

100.0

 

$

19,939

 

100.0

 

$

79,990

 

100.0

 

Cost of products sold

 

6,018

 

30.3

 

 

6,322

 

31.3

 

 

12,340

 

30.8

 

 

6,172

 

30.9

 

 

6,084

 

30.5

 

 

24,596

 

30.7

 

Gross Profit

 

13,822

 

69.7

 

 

13,893

 

68.7

 

 

27,715

 

69.2

 

 

13,824

 

69.1

 

 

13,855

 

69.5

 

 

55,394

 

69.3

 

Selling, marketing and administrative expenses

 

4,812

 

24.3

 

 

5,120

 

25.3

 

 

9,932

 

24.8

 

 

4,975

 

24.9

 

 

5,339

 

26.8

 

 

20,246

 

25.3

 

Research and development expense

 

3,355

 

16.9

 

 

3,585

 

17.7

 

 

6,940

 

17.3

 

 

3,485

 

17.4

 

 

3,710

 

18.6

 

 

14,135

 

17.7

 

In-process research and development Impairments

 

610

 

3.1

 

 

-

 

-

 

 

610

 

1.5

 

 

-

 

-

 

 

173

 

0.8

 

 

783

 

1.0

 

Interest income

 

(22

)

(0.1

)

 

(64

)

(0.3

)

 

(86

)

(0.2

)

 

(150

)

(0.8

)

 

(254

)

(1.3

)

 

(490

)

(0.6

)

Interest expense, net of portion capitalized

 

10

 

0.1

 

 

38

 

0.2

 

 

48

 

0.1

 

 

51

 

0.3

 

 

177

 

0.9

 

 

276

 

0.3

 

Other (income) expense, net

 

(210

)

(1.1

)

 

(1

)

0.0

 

 

(211

)

(0.5

)

 

226

 

1.1

 

 

795

 

4.0

 

 

810

 

1.0

 

Restructuring

 

64

 

0.3

 

 

71

 

0.4

 

 

135

 

0.4

 

 

65

 

0.3

 

 

75

 

0.4

 

 

275

 

0.4

 

Earnings before provision for taxes on income

 

5,203

 

26.2

 

 

5,144

 

25.4

 

 

10,347

 

25.8

 

 

5,172

 

25.9

 

 

3,840

 

19.3

 

 

19,359

 

24.2

 

Provision for taxes on income

 

632

 

3.2

 

 

882

 

4.3

 

 

1,514

 

3.7

 

 

862

 

4.3

 

 

613

 

3.1

 

 

2,989

 

3.7

 

Net earnings from Continuing Operations

 

4,571

 

23.0

 

$

4,262

 

21.1

 

$

8,833

 

22.1

 

$

4,310

 

21.6

 

$

3,227

 

16.2

 

$

16,370

 

20.5

 

Net earnings from Discontinued Operations, net of tax

 

578

 

 

552

 

 

1,130

 

 

148

 

 

293

 

 

1,571

 

Net earnings

$

5,149

 

$

4,814

 

$

9,963

 

$

4,458

 

$

3,520

 

$

17,941

 

 
Net Earnings per Share (Diluted) from Continuing Operations

$

1.71

 

$

1.60

 

$

3.31

 

$

1.62

 

$

1.22

 

$

6.14

 

Net Earnings per Share (Diluted) from Discontinued Operations

$

0.22

 

$

0.20

 

$

0.42

 

$

0.06

 

$

0.11

 

$

0.59

 

 
Average shares outstanding (Diluted)

 

2,666.5

 

 

2,667.9

 

 

2,669.2

 

 

2,661.3

 

 

2,650.1

 

 

2,663.9

 

Effective tax rate from Continuing Operations

 

12.1

 

%

 

17.1

 

%

 

14.6

 

%

 

16.7

 

%

 

16.0

 

%

 

15.4

 

%

 
Adjusted earnings from continuing operations before provision for taxes and net earnings (1)
Earnings before provision for taxes on income from continuing operations

$

7,349

 

37.0

 

$

7,082

 

35.0

 

$

14,431

 

36.0

 

$

7,060

 

35.3

 

$

6,482

 

32.5

 

$

27,973

 

35.0

 

Net earnings from continuing operations

$

6,388

 

32.2

 

$

6,038

 

29.9

 

$

12,426

 

31.0

 

$

5,938

 

29.7

 

$

5,432

 

27.2

 

$

23,796

 

29.7

 

Net earnings per share (Diluted) from continuing operations

$

2.40

 

$

2.26

 

$

4.66

 

$

2.23

 

$

2.05

 

$

8.93

 

Average shares outstanding (Diluted)

 

2,666.5

 

 

2,667.9

 

 

2,669.2

 

 

2,661.3

 

 

2,650.1

 

 

2,663.9

 

Effective tax rate from continuing operations

 

13.1

 

%

 

14.7

 

%

 

13.9

 

%

 

15.9

 

%

 

16.2

 

%

 

14.9

 

%

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

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

2023

(Dollars in Millions Except Per Share Data) Q1 Q2 SIX MONTHS
Net Earnings/(loss) from Continuing Operations, after tax - as reported

($491)

$5,376

$4,885

 
Pre-tax Adjustments
Intangible Asset Amortization expense

1,122

1,130

2,252

Litigation related

6,900

137

7,037

IPR&D impairments

49

0

49

Restructuring related

130

145

275

Acquisition, integration and divestiture related

42

38

80

(Gains)/losses on securities

72

(1)

71

Medical Device Regulation

64

85

149

COVID-19 Vaccine related costs

444

165

609

 
Tax Adjustments
Tax impact on special item adjustments

(1,980)

(307)

(2,287)

Consumer Health separation tax related costs

11

(17)

(6)

Tax legislation and other tax related

(23)

(21)

(44)

Adjusted Net Earnings from continuing operations, after tax

$6,340

$6,730

$13,070

Average shares outstanding (Diluted)

2,634.3

2,625.7

2,630.7

Adjusted net earnings per share from continuing operations (Diluted)

$2.41

$2.56

$4.97

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

2022

(Dollars in Millions Except Per Share Data) Q1 Q2 Q3 Q4 FULL YEAR
Net Earnings from Continuing Operations, after tax - as reported

$4,571

$4,262

$4,310

$3,227

$16,370

 
Pre-tax Adjustments
Intangible Asset Amortization expense

1,014

995

958

977

3,944

Litigation related

0

385

219

262

866

IPR&D impairments

610

0

0

173

783

Restructuring related

58

103

92

119

372

Acquisition, integration and divestiture related

0

0

0

196

196

(Gains)/losses on securities

411

109

164

6

690

Medical Device Regulation

60

70

78

88

296

COVID-19 Vaccine related costs

0

276

377

821

1,474

Other

(7)

0

0

0

(7)

 
Tax Adjustments
Tax impact on special item adjustments

(346)

(242)

(312)

(394)

(1,294)

Consumer Health separation tax related costs

96

2

(36)

4

66

Tax legislation and other tax related

(79)

78

88

(47)

40

Adjusted Net Earnings from continuing operations, after tax

$6,388

$6,038

$5,938

$5,432

$23,796

Average shares outstanding (Diluted)

2,666.5

2,667.9

2,661.3

2,650.1

2,663.9

Adjusted net earnings per share from continuing operations (Diluted)

$2.40

$2.26

$2.23

$2.05

$8.93

 
 
Johnson & Johnson and Subsidiaries
Reconciliation of Non-GAAP Financial Measure
 
Adjusted Operational Sales Growth
2023 ACTUAL vs. 2022 ACTUAL
 
 
Total Enterprise
 
Q1 Q2 SIX MONTHS
 
WW As Reported

5.3%

6.5%

5.9%

U.S.

9.4%

10.9%

10.2%

International

1.3%

1.6%

1.5%

 

 

 

WW Currency

(3.2)

(1.0)

(2.1)

U.S.

-

-

-

International

(6.4)

(2.2)

(4.3)

 

 

 

WW Operational

8.5%

7.5%

8.0%

U.S.

9.4%

10.9%

10.2%

International

7.7%

3.8%

5.8%

 

 

 

Abiomed

(1.6)

(1.6)

(1.6)

U.S.

(2.7)

(2.6)

(2.6)

International

(0.6)

(0.6)

(0.6)

 

 

 

All Other Acquisitions and Divestitures

0.0

0.1

0.0

U.S.

0.0

0.0

0.0

International

0.1

0.2

0.2

 

 

 

WW Adjusted Operational

6.9%

6.0%

6.4%

U.S.

6.7%

8.3%

7.6%

International

7.2%

3.4%

5.4%

Note: Percentages are based on actual, non-rounded figures and may not sum

 
Johnson & Johnson and Subsidiaries
Reconciliation of Non-GAAP Financial Measure
 
Adjusted Operational Sales Growth
2022 ACTUAL vs. 2021 ACTUAL
 
 
Total Enterprise
 

Q1

Q2

SIX MONTHS

Q3

NINE MONTHS

Q4

TWELVE MONTHS

 

 

 

 

 

 

 

WW As Reported

6.2%

3.9%

5.0%

2.4%

4.1%

(5.4)%

1.6%

U.S.

3.8%

3.4%

3.6%

4.4%

3.8%

1.7%

3.3%

International

8.7%

4.5%

6.6%

0.1%

4.5%

(12.7)%

(0.2)%

 

 

 

 

 

 

 

WW Currency

(2.9)

(5.2)

(4.1)

(6.3)

(4.8)

(5.3)

(4.9)

U.S.

-

-

-

-

-

-

-

International

(5.8)

(10.9)

(8.4)

(13.5)

(10.0)

(10.8)

(10.2)

 

 

 

 

 

 

 

WW Operational

9.1%

9.1%

9.1%

8.7%

8.9%

(0.1)%

6.5%

U.S.

3.8%

3.4%

3.6%

4.4%

3.8%

1.7%

3.3%

International

14.5%

15.4%

15.0%

13.6%

14.5%

(1.9)%

10.0%

 

 

 

 

 

 

 

Abiomed

 

 

 

 

 

(0.1)

 

U.S.

 

 

 

 

 

(0.3)

 

International

 

 

 

 

 

0.0

 

 

 

 

 

 

 

 

All Other Acquisitions and Divestitures

0.0

0.1

0.1

0.1

0.1

0.1

0.0

U.S.

0.0

0.1

0.0

0.1

0.0

0.1

0.0

International

0.0

0.1

0.1

0.1

0.1

0.1

0.1

 

 

 

 

 

 

 

WW Adjusted Operational

9.1%

9.2%

9.2%

8.8%

9.0%

(0.1)%

6.5%

U.S.

3.8%

3.5%

3.6%

4.5%

3.8%

1.5%

3.3%

International

14.5%

15.5%

15.1%

13.7%

14.6%

(1.8)%

10.1%

 
Note: Percentages are based on actual, non-rounded figures and may not sum
 
Johnson & Johnson and Subsidiaries
Reconciliation of Non-GAAP Financial Measures
Q1 2023 - Income Before Tax by Segment from Continuing Operations
Dollars in Millions
 
Pharmaceutical MedTech Unallocated Worldwide Total
 
Reported Income Before Tax by Segment from Continuing Operations $

4,402

1,409

(7,098)

(1,287)

% to Sales

32.8%

18.8%

-34.0%

-6.2%

 
Intangible asset amortization expense

739

383

-

1,122

 
In-process research and development Impairments

-

49

-

49

 
Litigation Related

-

-

6,900

6,900

 
Loss/(gain) on securities

38

34

-

72

 
Restructuring related

130

-

-

130

 
Acquisition, integration and divestiture related

-

42

-

42

 
Medical Device Regulation

-

64

-

64

 
COVID-19 Vaccine related costs

444

-

-

444

 
Adjusted Income Before Tax by Segment from Continuing Operations $

5,753

1,981

(198)

7,536

% to Sales

42.9%

26.5%

-0.9%

36.1%

 
 
Johnson & Johnson and Subsidiaries
Reconciliation of Non-GAAP Financial Measures
Q2 2023 QTD - Income Before Tax by Segment from Continuing Operations
Dollars in Millions
 
Pharmaceutical MedTech Unallocated Worldwide Total
 
Reported Income Before Tax by Segment from Continuing Operations $

4,812

1,671

(177)

6,306

% to Sales

35.0%

21.5%

-0.8%

29.3%

 
Intangible asset amortization expense

748

382

-

1,130

 
In-process research and development Impairments

-

-

-

-

 
Litigation Related

(93)

60

170

137

 
Loss/(gain) on securities

38

(39)

-

(1)

 
Restructuring related

145

-

-

145

 
Acquisition, integration and divestiture related

-

38

-

38

 
Medical Device Regulation

-

85

-

85

 
COVID-19 Vaccine related costs

165

-

-

165

 
Adjusted Income Before Tax by Segment from Continuing Operations $

5,815

2,197

(7)

8,005

% to Sales

42.3%

28.2%

0.0%

37.2%

 
Q2 2023 YTD - Income Before Tax by Segment from Continuing Operations
Dollars in Millions
 
 
Pharmaceutical MedTech Unallocated Worldwide Total
 
Reported Income Before Tax by Segment from Continuing Operations $

9,214

3,080

(7,275)

5,019

% to Sales

33.9%

20.2%

-17.2%

11.8%

 
Intangible asset amortization expense

1,487

765

-

2,252

 
In-process research and development Impairments

-

49

-

49

 
Litigation Related

(93)

60

7,070

7,037

 
Loss/(gain) on securities

76

(5)

-

71

 
Restructuring related

275

-

-

275

 
Acquisition, integration and divestiture related

-

80

-

80

 
Medical Device Regulation

-

149

-

149

 
COVID-19 Vaccine related costs

609

-

-

609

 
Adjusted Income Before Tax by Segment from Continuing Operations $

11,568

4,178

(205)

15,541

% to Sales

42.6%

27.4%

-0.5%

36.6%

 
Johnson & Johnson and Subsidiaries
Reconciliation of Non-GAAP Financial Measures
Q1 2022 - Income Before Tax by Segment from Continuing Operations
Dollars in Millions
 
 
Pharmaceutical MedTech Unallocated Worldwide Total
 
Reported Income Before Tax by Segment from Continuing Operations $

3,873

1,441

(111)

5,203

% to Sales

30.1%

20.7%

-0.6%

26.2%

 
Intangible asset amortization expense

760

254

-

1,014

 
In-process research and development Impairments

610

-

-

610

 
Loss/(gain) on securities

394

17

-

411

 
Restructuring related

(14)

72

-

58

 
Medical Device Regulation

-

60

-

60

 
Other

-

-

(7)

(7)

 
Adjusted Income Before Tax by Segment from Continuing Operations $

5,623

1,844

(118)

7,349

% to Sales

43.7%

26.5%

-0.6%

37.0%

 
 
Johnson & Johnson and Subsidiaries
Reconciliation of Non-GAAP Financial Measures
Q2 2022 QTD - Income Before Tax by Segment from Continuing Operations
Dollars in Millions
 
 
Pharmaceutical MedTech Unallocated Worldwide Total
 
Reported Income Before Tax by Segment from Continuing Operations $

4,365

1,110

(331)

5,144

% to Sales

32.8%

16.1%

-1.6%

25.4%

 
Intangible asset amortization expense

736

259

-

995

 
Litigation Related

21

264

100

385

 
Loss/(gain) on securities

102

7

-

109

 
Restructuring related

23

80

-

103

 
Medical Device Regulation

-

70

-

70

 
COVID-19 Vaccine related costs

276

-

-

276

 
Adjusted Income Before Tax by Segment from Continuing Operations $

5,523

1,790

(231)

7,082

% to Sales

41.5%

25.9%

-1.1%

35.0%

 
 
Q2 2022 YTD - Income Before Tax by Segment from Continuing Operations
Dollars in Millions
 
Pharmaceutical MedTech Unallocated Worldwide Total
 
Reported Income Before Tax by Segment from Continuing Operations $

8,238

2,551

(442)

10,347

% to Sales

31.5%

18.4%

-1.1%

25.8%

 
Intangible asset amortization expense

1,496

513

-

2,009

 
In-process research and development Impairments

610

-

-

610

 
Litigation Related

21

264

100

385

 
Loss/(gain) on securities

496

24

-

520

 
Restructuring related

9

152

-

161

 
Medical Device Regulation

-

130

-

130

 
COVID-19 Vaccine related costs

276

-

-

276

 
Other

-

-

(7)

(7)

 
Adjusted Income Before Tax by Segment from Continuing Operations $

11,146

3,634

(349)

14,431

% to Sales

42.6%

26.2%

-0.9%

36.0%

 
Johnson & Johnson and Subsidiaries
Reconciliation of Non-GAAP Financial Measures
Q3 2022 QTD - Income Before Tax by Segment from Continuing Operations
Dollars in Millions
 
Pharmaceutical MedTech Unallocated Worldwide Total
 
Reported Income Before Tax by Segment from Continuing Operations $

4,186

1,090

(104)

5,172

% to Sales

31.7%

16.1%

-0.5%

25.9%

 
Intangible asset amortization expense

698

260

-

958

 
Litigation Related

7

212

-

219

 
Loss/(gain) on securities

177

(13)

-

164

 
Restructuring related

23

69

-

92

 
Medical Device Regulation

-

78

-

78

 
COVID-19 Vaccine related costs

377

-

-

377

 
Adjusted Income Before Tax by Segment from Continuing Operations $

5,468

1,696

(104)

7,060

% to Sales

41.4%

25.0%

-0.5%

35.3%

 
 
Q3 2022 YTD - Income Before Tax by Segment from Continuing Operations
Dollars in Millions
 
Pharmaceutical MedTech Unallocated Worldwide Total
 
Reported Income Before Tax by Segment from Continuing Operations $

12,424

3,641

(546)

15,519

% to Sales

31.5%

17.6%

-0.9%

25.8%

 
Intangible asset amortization expense

2,194

773

-

2,967

 
In-process research and development Impairments

610

-

-

610

 
Litigation Related

28

476

100

604

 
Loss/(gain) on securities

673

11

-

684

 
Restructuring related

32

221

-

253

 
Medical Device Regulation

-

208

-

208

 
COVID-19 Vaccine related costs

653

-

-

653

 
Other

-

-

(7)

(7)

 
Adjusted Income Before Tax by Segment from Continuing Operations $

16,614

5,330

(453)

21,491

% to Sales

42.2%

25.8%

-0.8%

35.8%

 
 
Johnson & Johnson and Subsidiaries
Reconciliation of Non-GAAP Financial Measures
 
Q4 2022 QTD - Income Before Tax by Segment from Continuing Operations
Dollars in Millions
 
Pharmaceutical MedTech Unallocated Worldwide Total
 
Reported Income Before Tax by Segment from Continuing Operations $

3,223

806

(189)

3,840

% to Sales

24.5%

11.9%

-0.9%

19.3%

 
Intangible asset amortization expense

717

260

-

977

 
In-process research and development Impairments

173

-

-

173

 
Litigation Related

76

136

50

262

 
Loss/(gain) on securities

23

(17)

-

6

 
Restructuring related

31

88

-

119

 
Acquisition, integration and divestiture related

(104)

300

-

196

 
Medical Device Regulation

-

88

-

88

 
COVID-19 Vaccine related costs

821

-

-

821

 
Adjusted Income Before Tax by Segment from Continuing Operations $

4,960

1,661

(139)

6,482

% to Sales

37.7%

24.5%

-0.7%

32.5%

 
 
Q4 2022 YTD - Income Before Tax by Segment from Continuing Operations
Dollars in Millions
 
Pharmaceutical MedTech Unallocated Worldwide Total
 
Reported Income Before Tax by Segment from Continuing Operations $

15,647

4,447

(735)

19,359

% to Sales

29.8%

16.2%

-0.9%

24.2%

 
Intangible asset amortization expense

2,911

1,033

-

3,944

 
In-process research and development Impairments

783

-

-

783

 
Litigation Related

104

612

150

866

 
Loss/(gain) on securities

696

(6)

-

690

 
Restructuring related

63

309

-

372

 
Acquisition, integration and divestiture related

(104)

300

-

196

 
Medical Device Regulation

-

296

-

296

 
COVID-19 Vaccine related costs

1,474

-

-

1,474

 
Other

-

-

(7)

(7)

 
Adjusted Income Before Tax by Segment from Continuing Operations $

21,574

6,991

(592)

27,973

% to Sales

41.0%

25.5%

-0.7%

35.0%

 
Johnson & Johnson and Subsidiaries
GAAP to Non-GAAP Reconciliation
$ in Millions
Consumer Health
separation tax
related costs
Quarter to Date In-process
research and
development
Impairments
(Loss)/gain on
securities
COVID-19 Vaccine
Related Costs
Tax legislation and
other tax related
First Quarter
April 2, 2023
GAAP
Intangible asset
amortization
Litigation
related
Restructuring
related
Acquisition,
integration and
divestiture related
Medical Device
Regulation
First Quarter
April 2, 2023
Non-GAAP
Cost of products sold

$

6,687

 

(1,118

)

-

 

(23

)

(206

)

5,340

 

Selling, marketing and admin expenses

 

4,906

 

(7

)

4,899

 

Research and development expense

 

3,455

 

(16

)

(34

)

(16

)

3,389

 

Other (Income) / Expense

 

6,940

 

(4

)

(6,900

)

-

 

(26

)

(72

)

(222

)

(284

)

In-process research and development Impairments

 

49

 

(49

)

-

 

Interest (Income) / Expense

 

14

 

14

 

Restructuring

 

130

 

(130

)

-

 

Provision for/(Benefit from) taxes on income

 

(796

)

177

 

1,622

 

11

 

32

 

5

 

16

 

12

 

105

 

(11

)

23

 

1,196

 

Net Earnings/(Loss) from Continuing Operations

 

(491

)

945

 

5,278

 

38

 

98

 

37

 

56

 

52

 

339

 

11

 

(23

)

6,340

 

 
Consumer Health
separation tax
related costs
Quarter to Date In-process
research and
development
Impairments
Acquisition,
integration and
divestiture related
(Loss)/gain on
securities
COVID-19 Vaccine
Related Costs
Tax legislation and
other tax related
Second Quarter
July 2, 2023
GAAP
Intangible asset
amortization
Litigation
related
Restructuring
related
Medical Device
Regulation
Second Quarter
July 2, 2023
Non-GAAP
Cost of products sold

$

6,462

 

(1,130

)

-

 

(34

)

38

 

-

 

-

 

5,336

 

Selling, marketing and admin expenses

 

5,396

 

(8

)

5,388

 

Research and development expense

 

3,703

 

-

 

(44

)

(46

)

3,613

 

Other (Income) / Expense

 

(384

)

-

 

(137

)

-

 

(38

)

1

 

(156

)

-

 

(714

)

In-process research and development Impairments

 

-

 

-

 

-

 

Interest (Income)/Expense

 

(109

)

(109

)

Restructuring

 

145

 

(145

)

-

 

Provision for taxes on income

 

930

 

177

 

29

 

-

 

37

 

12

 

(1

)

15

 

38

 

17

 

21

 

1,275

 

Net Earnings from Continuing Operations

 

5,376

 

953

 

108

 

-

 

108

 

26

 

-

 

71

 

126

 

(17

)

(21

)

6,730

 

 
Consumer Health
separation tax
related costs
Year to Date In-process
research and
development
Impairments
Acquisition,
integration and
divestiture related
(Loss)/gain on
securities
COVID-19 Vaccine
Related Costs
Tax legislation and
other tax related
Six Months
July 2, 2023
GAAP
Intangible asset
amortization
Litigation
related
Restructuring
related
Medical Device
Regulation
Six Months
July 2, 2023
Non-GAAP
Cost of products sold

$

13,149

 

(2,248

)

-

 

(57

)

(168

)

10,676

 

Selling, marketing and admin expenses

 

10,302

 

(15

)

10,287

 

Research and development expense

 

7,158

 

(16

)

(78

)

(62

)

7,002

 

Other (Income) / Expense

 

6,556

 

(4

)

(7,037

)

-

 

(64

)

(71

)

(378

)

-

 

(998

)

In-process research and development Impairments

 

49

 

(49

)

-

 

-

 

-

 

Interest (Income)/Expense

 

(95

)

(95

)

Restructuring

 

275

 

(275

)

-

 

Provision for taxes on income

 

134

 

354

 

1,651

 

11

 

69

 

17

 

15

 

27

 

143

 

6

 

44

 

2,471

 

Net Earnings from Continuing Operations

 

4,885

 

1,898

 

5,386

 

38

 

206

 

63

 

56

 

123

 

465

 

(6

)

(44

)

13,070

 

 

Johnson & Johnson and Subsidiaries

GAAP to Non-GAAP Reconciliation
$ in Millions
Consumer Health
separation tax
related costs
Quarter to Date In-process
research and
development
impairments
(Loss)/gain on
securities
COVID-19 Vaccine
Related Costs
Tax legislation and
other tax related
First Quarter
April 3, 2022
GAAP
Intangible asset
amortization
Litigation related Restructuring
related
Acquisition,
integration and
divestiture related
Medical Device
Regulation
Other First Quarter
April 3, 2022
Non-GAAP
Cost of products sold

$

6,018

 

(1,014

)

(14

)

(22

)

4,968

 

Selling, marketing and admin expenses

 

4,812

 

(6

)

4,806

 

Research and development expense

 

3,355

 

(32

)

3,323

 

Other (Income) / Expense

 

(210

)

-

 

-

 

20

 

-

 

(411

)

-

 

7

 

(594

)

In-process research and development Impairments

 

610

 

(610

)

-

 

Restructuring

 

64

 

(64

)

-

 

Provision for taxes on income

 

632

 

148

 

(53

)

138

 

8

 

-

 

96

 

11

 

-

 

(96

)

79

 

(2

)

961

 

Net Earnings from Continuing Operations

 

4,571

 

866

 

53

 

472

 

50

 

-

 

315

 

49

 

-

 

96

 

(79

)

(5

)

6,388

 

 
Consumer Health
separation tax
related costs
Quarter to Date In-process
research and
development
Impairments
Acquisition,
integration and
divestiture related
(Loss)/gain on
securities
COVID-19 Vaccine
Related Costs
Tax legislation and
other tax related
Second Quarter
July 3, 2022
GAAP
Intangible asset
amortization
Litigation related Restructuring
related
Medical Device
Regulation
Other Second Quarter July 3, 2022
Non-GAAP
Cost of products sold

$

6,322

 

(995

)

(14

)

(25

)

(194

)

-

 

-

 

-

 

5,094

 

Selling, marketing and admin expenses

 

5,120

 

(6

)

5,114

 

Research and development expense

 

3,585

 

-

 

(39

)

(110

)

3,436

 

Other (Income) / Expense

 

(1

)

-

 

(385

)

(18

)

-

 

(109

)

28

 

-

 

-

 

(485

)

In-process research and development Impairments

 

-

 

-