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

Rhea-AI Summary

Johnson & Johnson expects increased 2023 Reported Sales Growth of 7.0% - 8.0% and Adjusted Operational Sales Growth of 6.2% - 7.2%. They also expect 2023 Adjusted Reported Earnings Per Share (EPS) of $10.00 - $10.10. The company reduced outstanding share count by approximately 191 million. They secured $13.2 billion in cash proceeds from the Kenvue debt offering and initial public offering. Johnson & Johnson maintains its quarterly dividend of $1.19 per share.

Positive

• Increased 2023 Reported Sales Growth and Adjusted Operational Sales Growth
• Reduced outstanding share count
• Secured $13.2 billion in cash proceeds

Negative

• None.

• 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

NEW BRUNSWICK, N.J.--(BUSINESS WIRE)-- 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		-										-																											-
Restructuring		71													(71	)																							-
Provision for taxes on income		882				148			(29	)		-			20			-			25			13			65			(2	)		(78	)		-			1,044
Net Earnings from Continuing Operations		4,262				847			414			-			83			-			84			57			211			2			78			-			6,038
																														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
	Third Quarter Oct 2, 2022 GAAP					Intangible asset amortization			Litigation related						Restructuring related									Medical Device Regulation												Other			Third Quarter Oct 2, 2022 Non-GAAP
Cost of products sold	$	6,172				(958	)								(9	)								(29	)		(102	)		-			-			-			5,074
Selling, marketing and admin expenses		4,975																						(7	)														4,968
Research and development expense		3,485																-						(42	)		(80	)											3,363
Other (Income) / Expense		226				-			(219	)					(18	)		-			(164	)					(195	)		-						-			(370	)
In-process research and development Impairments		-										-																											-
Restructuring		65													(65	)																							-
Provision for taxes on income		862				146			(7	)		-			19			-			43			15			96			36			(88	)		-			1,122
Net Earnings from Continuing Operations		4,310				812			226			-			73			-			121			63			281			(36	)		88			-			5,938
																														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
	Fourth Quarter Jan 1, 2023 GAAP					Intangible asset amortization			Litigation related						Restructuring related									Medical Device Regulation												Other			Fourth Quarter Jan 1, 2023 Non-GAAP
Cost of products sold	$	6,084				(977	)								(25	)								(33	)		(160	)		-			-			-			4,889
Selling, marketing and admin expenses		5,339																						(9	)		-												5,330
Research and development expense		3,710																-						(46	)		(114	)											3,550
Other (Income) / Expense		795				-			(262	)					(19	)		(196	)		(6	)					(547	)		-						-			(235	)
In-process research and development Impairments		173										(173	)																										-
Restructuring		75													(75	)																							-
Provision for taxes on income		613				148			(36	)		40			19			5			2			17			199			(4	)		47			-			1,050
Net Earnings from Continuing Operations		3,227				829			298			133			100			191			4			71			622			4			(47	)		-			5,432
Year to Date
												In-process research and development Impairments						Acquisition, integration and divestiture related			(Loss)/gain on securities						COVID-19 Vaccine Related Costs			Consumer Health separation tax related costs			Tax legislation and other tax related
	Twelve Months Jan 1, 2023 GAAP					Intangible asset amortization			Litigation related						Restructuring related									Medical Device Regulation												Other			Twelve Months Jan 1, 2023 Non-GAAP
Cost of products sold	$	24,596				(3,944	)								(62	)								(109	)		(456	)											20,025
Selling, marketing and admin expenses		20,246																						(28	)														20,218
Research and development expense		14,135																-						(159	)		(304	)											13,672
Other (Income) / Expense		810				-			(866	)					(35	)		(196	)		(690	)					(714	)		-						7			(1,684	)
In-process research and development Impairments		783										(783	)					-			-																		-
Restructuring		275													(275	)																							-
Provision for taxes on income		2,989				590			(125	)		178			66			5			166			56			360			(66	)		(40	)		(2	)		4,177
Net Earnings from Continuing Operations		16,370				3,354			991			605			306			191			524			240			1,114			66			40			(5	)		23,796

 

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Source: Johnson & Johnson