Johnson & Johnson and Subsidiaries | | | | | | | | | | |
Condensed Consolidated Statement of Earnings | | | | | | | | | | |
| | | | | | | | | | |
(Unaudited; in Millions Except Per Share Figures) | | FOURTH QUARTER |
| | 2008 | | 2007 | | Percent |
| | | | Percent | | | | Percent | | Increase |
| | Amount | | to Sales | | Amount | | to Sales | | (Decrease) |
Sales to customers | | $ 15,182 | | 100.0 | | $ 15,957 | | 100.0 | | (4.9) |
Cost of products sold | | 4,372 | | 28.8 | | 4,734 | | 29.7 | | (7.6) |
Selling, marketing and administrative expenses | | 5,665 | | 37.3 | | 5,721 | | 35.8 | | (1.0) |
Research expense | | 2,108 | | 13.9 | | 2,328 | | 14.6 | | (9.5) |
In-process research & development (IPR&D) | | 141 | | 0.9 | | - | | - | | |
Restructuring expense | | - | | - | | - | | - | | |
Interest (income)expense, net | | 17 | | 0.1 | | (35) | | (0.2) | | |
Other (income)expense, net | | (638) | | (4.2) | | 877 | | 5.5 | | |
Earnings before provision for taxes on income | | 3,517 | | 23.2 | | 2,332 | | 14.6 | | 50.8 |
Provision for taxes on income | | 803 | | 5.3 | | (42) | | (0.3) | | NM* |
Net earnings | | $ 2,714 | | 17.9 | | $ 2,374 | | 14.9 | | 14.3 |
| | | | | | | | | | |
Net earnings per share (Diluted) | | $ 0.97 | | | | $ 0.82 | | | | 18.3 |
| | | | | | | | | | |
Average shares outstanding (Diluted) | | 2,801.6 | | | | 2,889.2 | | | | |
| | | | | | | | | | |
Effective tax rate | | 22.8 | % | | | (1.8) | % | | | |
| | | | | | | | | | |
Adjusted earnings before provision for taxes and net earnings(A) | | | | | | | | | | |
Earnings before provision for taxes on income | | $ 3,279 | (1) | 21.6 | | $ 3,010 | (2) | 18.9 | | 8.9 |
Net earnings | | $ 2,626 | (1) | 17.3 | | $ 2,548 | (2) | 16.0 | | 3.1 |
Net earnings per share (Diluted) | | $ 0.94 | (1) | | | $ 0.88 | (2) | | | 6.8 |
Effective tax rate | | 19.9% | | | | 15.3% | | | | |
| | | | | | | | | | |
(1) The difference between as reported earnings and as adjusted earnings before provision for taxes on income, net earnings and net earnings per |
share (diluted) is the exclusion of IPR&D of $141 million with no tax benefit and $0.05 per share, respectively and the exclusion of income representing |
the net impact of litigation settlements of $379 million, $229 million, and $0.08 per share, respectively. | |
| | | | | | | | | | |
(2) The difference between as reported earnings and as adjusted earnings before provision for taxes on income, net earnings and net earnings per |
share (diluted) is the exclusion of the NATRECOR® intangible asset write-down of $678 million, $441 million, and $0.15 per share, respectively, and the |
exclusion of an international tax gain on restructuring of $267 million on net earnings, and $0.09 per share. | |
| | | | | | | | | | |
*Not meaningful | | | | | | | | | | |
Johnson & Johnson and Subsidiaries | | | | | | | | | | |
Condensed Consolidated Statement of Earnings | | | | | | | | | | |
| | | | | | | | | | |
(Unaudited; in Millions Except Per Share Figures) | | TWELVE MONTHS |
| | 2008 | | 2007 | | Percent |
| | | | Percent | | | | Percent | | Increase |
| | Amount | | to Sales | | Amount | | to Sales | | (Decrease) |
Sales to customers | | $ 63,747 | | 100.0 | | $ 61,095 | | 100.0 | | 4.3 |
Cost of products sold | | 18,511 | | 29.1 | | 17,751 | | 29.1 | | 4.3 |
Selling, marketing and administrative expenses | | 21,490 | | 33.7 | | 20,451 | | 33.5 | | 5.1 |
Research expense | | 7,577 | | 11.9 | | 7,680 | | 12.6 | | (1.3) |
In-process research & development (IPR&D) | | 181 | | 0.3 | | 807 | | 1.3 | | |
Restructuring expense | | - | | - | | 745 | | 1.2 | | |
Interest (income)expense, net | | 74 | | 0.1 | | (156) | | (0.3) | | |
Other (income)expense, net | | (1,015) | | (1.6) | | 534 | | 0.9 | | |
Earnings before provision for taxes on income | | 16,929 | | 26.5 | | 13,283 | | 21.7 | | 27.4 |
Provision for taxes on income | | 3,980 | | 6.2 | | 2,707 | | 4.4 | | 47.0 |
Net earnings | | $ 12,949 | | 20.3 | | $ 10,576 | | 17.3 | | 22.4 |
| | | | | | | | | | |
Net earnings per share (Diluted) | | $ 4.57 | | | | $ 3.63 | | | | 25.9 |
| | | | | | | | | | |
Average shares outstanding (Diluted) | | 2,835.6 | | | | 2,910.7 | | | | |
| | | | | | | | | | |
Effective tax rate | | 23.5 | % | | | 20.4 | % | | | |
| | | | | | | | | | |
Adjusted earnings before provision for taxes and net earnings(A) | | | | | | | | |
Earnings before provision for taxes on income | | $ 16,731 | (1) | 26.2 | | $ 15,513 | (2) | 25.4 | | 7.9 |
Net earnings | | $ 12,901 | (1) | 20.2 | | $ 12,085 | (2) | 19.8 | | 6.8 |
Net earnings per share (Diluted) | | $ 4.55 | (1) | | | $ 4.15 | (2) | | | 9.6 |
Effective tax rate | | 22.9% | | | | 22.1% | | | | |
| | | | | | | | | | |
(1) The difference between as reported earnings and as adjusted earnings before provision for taxes on income, net earnings and net earnings per |
share (diluted) is the exclusion of IPR&D of $181 million with no tax benefit and $0.06 per share, respectively, and the exclusion of income representing |
the net impact of litigation settlements in the fourth quarter of $379 million, $229 million, and $0.08 per share, respectively. |
| | |
(2) The difference between as reported earnings and as adjusted earnings before provision for taxes on income, net earnings and net earnings per |
share (diluted) is the exclusion of IPR&D of $807 million with no tax benefit and $0.28 per share, respectively, the exclusion of the restructuring |
expense of $745 million, $528 million and $0.18 per share, respectively, the exclusion of the NATRECOR® intangible asset write-down of $678 million, |
$441 million, and $0.15 per share, respectively, and the exclusion of an international tax gain on restructuring of $267 million on net earnings, and |
$0.09 per share. | | |
(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, they may assist investors in evaluating the Company's results of operations period over period. In various periods, these measures may exclude such items as business development activities (including IPR&D at acquisition or upon attainment of milestones and any extraordinary expenses), strategic developments (including restructuring and product line changes), significant 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. These non-GAAP financial measures are presented solely to permit investors to more fully understand how management assesses the performance of the Company. 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 the effects of an acquisition, merger-related or other restructuring charges, or amortization of purchased intangibles, 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.