3/7/2017
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`Johnson & Johnson's (JNJ) CEO Alex Gorsky Discusses Q2 2015 Results - Earnings Call Transcript | Seeking Alpha
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`Johnson & Johnson's (JNJ) CEO Alex Gorsky Discusses Q2 2015
`Results - Earnings Call Transcript
`
`Jul. 14, 2015 6:42 PM ET4 comments
`by: SA Transcripts
`
`Q2: 07-09-15 Earnings Summary
`
` 10-Q
`
` Analysis
`
` News
`
`EPS of $1.71 beats by $0.03 | Revenue of $17.79B (- 8.8% Y/Y) beats by $30M
`
`Johnson & Johnson (NYSE:JNJ)
`
`Q2 2015 Earnings Conference Call
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`July 14, 2015 08:30 ET
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`Executives
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`Louise Mehrotra - Vice President, Investor Relations
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`Alex Gorsky - Chairman and Chief Executive Officer
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`Sandi Peterson - Group Worldwide Chairman
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`Dominic Caruso - Vice President, Finance and Chief Financial Officer
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`Analysts
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`Glenn Novarro - RBC Capital Markets
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`Kristen Stewart - Deutsche Bank
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`Mike Weinstein - JPMorgan
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`Larry Biegelsen - Wells Fargo
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`Jami Rubin - Goldman Sachs
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`JANSSEN EXHIBIT 2148
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`3/7/2017
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`Johnson & Johnson's (JNJ) CEO Alex Gorsky Discusses Q2 2015 Results - Earnings Call Transcript | Seeking Alpha
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`Josh Jennings - Cowen & Company
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`Vamil Divan - Credit Suisse
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`Jayson Bedford - Raymond James
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`David Lewis - Morgan Stanley
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`Rick Wise - Stifel
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`Operator
`
`Good morning and welcome to Johnson & Johnson’s Second Quarter 2015 Earnings
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`Conference Call. All participants will be able to listen-only until the question-and-answer
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`session of the conference. This call is being recorded. If anyone has any objections, you
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`may disconnect at this time. [Operator Instructions]
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`I would now like to turn the conference call over to Johnson & Johnson. You may begin.
`
`Louise Mehrotra
`
`Good morning and welcome. I am Louise Mehrotra, Vice President of Investor Relations
`
`for Johnson & Johnson and it is my pleasure this morning to review our business results
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`for the second quarter of 2015.
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`Joining me on the call today are Alex Gorsky, Chairman of the Board of Directors and
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`Chief Executive Officer, Sandi Peterson, Group Worldwide Chairman, and Dominic
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`Caruso, Vice President, Finance and Chief Financial Officer.
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`A few logistics before we get into the details. This review is being made available via
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`webcast accessible through the Investor Relations section of the Johnson & Johnson
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`website at investor.jnj.com. I will begin by briefly reviewing second quarter for the
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`corporation and for our three business segments. Alex will provide additional commentary
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`on the business and our progress with regards to our near-term priorities. Next, Sandi will
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`provide an update on our consumer and consumer medical device businesses. Lastly,
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`Dominic will review the income statement and discuss guidance for 2015. We will then
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`open the call to your questions. We expect the call to last approximately 90 minutes.
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`Included with the press release that was issued earlier this morning is the schedule of
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`sales for key products and/or businesses to facilitate updating your models. These
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`schedules are available on the Johnson & Johnson website as is the press release.
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`3/7/2017
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`Johnson & Johnson's (JNJ) CEO Alex Gorsky Discusses Q2 2015 Results - Earnings Call Transcript | Seeking Alpha
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`Please note we will be using a presentation to complement today’s commentary. The
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`presentation is also available on our website.
`
`Before we begin, let me remind you that some of the statements made during this review
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`are or may be considered forward-looking statements. The 10-K for the fiscal year 2014
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`and the company’s subsequent filings identify certain factors that could cause the
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`company’s actual results to differ materially from those projected in any forward-looking
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`statement made today. The company does not undertake to update any forward-looking
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`statements as a result of new information or future events or developments. Our SEC
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`filings, including the 10-K, are available through the company and on our website.
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`During the review, non-GAAP financial measures are used to provide information pertinent
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`to ongoing business performance. These non-GAAP financial measures should not be
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`considered replacements for and should be read together with GAAP results. Tables
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`reconciling these measures to the most comparable GAAP measures are available in the
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`schedules accompanying the press release and on the Investor Relations section of the
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`Johnson & Johnson website.
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`Now, I would like to review results for the second quarter of 2015. Worldwide sales to
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`customers were $17.8 billion for the second quarter of 2015, down 8.8% versus second
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`quarter 2014. On an operational basis, sales were down 0.9% and currency had a
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`negative impact of 7.9%. In the U.S., sales were down 2.4%. In regions outside the U.S.,
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`our operational growth was 0.5%, while the effective currency exchange rates negatively
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`impacted our reported results by 14.8%.
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`On an operational basis, the Asia Pacific Africa region grew by 2.2%, while Europe grew
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`1% and the Western Hemisphere, excluding the U.S., declined 4%. Growth in the U.S.
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`and Japan was negatively impacted by hepatitis C competition. Growth in all regions was
`
`impacted by divestitures, the most significant one being Ortho-Clinical Diagnostics.
`
`Excluding the net impact of acquisitions and divestitures, underlying operational growth
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`was 1.7% worldwide, 0.6% in the U.S., and 2.7% outside the U.S. Additionally, excluding
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`hepatitis C sales underlying operational growth was 5%.
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`Turning now to earnings, net earnings were $4.5 billion and earnings per share were
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`$1.61 versus $1.51 a year ago. As referenced in the table reconciling non-GAAP
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`measures, 2015 second quarter net earnings were adjusted to exclude after-tax
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`amortization expense of $230 million and a charge of $66 million for after-tax special
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`items. 2014 second quarter net earnings were adjusted to exclude a charge of $807
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`million. Dominic will discuss special items in his remarks. Excluding amortization expense
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`3/7/2017
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`Johnson & Johnson's (JNJ) CEO Alex Gorsky Discusses Q2 2015 Results - Earnings Call Transcript | Seeking Alpha
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`and special items for both periods, adjusted net earnings for the current quarter were $4.8
`
`billion and adjusted diluted earnings per share were $1.71, representing decreases of
`
`6.3% and 3.9% respectively as compared to the same period in 2014. Currency
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`translation significantly impacted net earnings. On an operational basis, adjusted diluted
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`earnings per share grew 6.7%.
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`Turning now to business segment highlights, please note percentages quoted represent
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`operational sales change in comparison to the second quarter of 2014 unless otherwise
`
`stated and therefore exclude the impact of currency translation. I will begin with the
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`consumer segment. Worldwide consumer segment sales of $3.5 billion increased 2.3%,
`
`with U.S. sales up 2.7%, while outside the U.S. sales grew 2.1%. Excluding the net impact
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`of acquisitions and divestitures, underlying operational growth was 3.1% worldwide, 2.9%
`
`in the U.S., and 3.2% outside the U.S. Growth was driven by OTC worldwide, Women’s
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`Health outside the U.S. and Oral Care.
`
`OTC sales growth was driven by worldwide analgesics, ZYRTEC in the U.S. and other
`
`upper respiratory products outside the U.S. Upper respiratory, including ZYRTEC sales,
`
`included a seasonal inventory build. In the U.S., adult analgesic market share was
`
`approximately 12%, up from approximately 11% a year ago, while U.S. pediatric share
`
`was nearly 44%, up from 39% a year ago. New product launches and successful
`
`marketing campaigns drove the results for LISTERINE in Oral Care and Women’s Health
`
`products outside the U.S.
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`Moving now to our Pharmaceutical segment, worldwide sales of $7.9 billion increased 1%
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`with U.S. sales down 1.5% and sales outside the U.S. up 3.8%. New competitors in
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`hepatitis C significantly impacted sales results. Excluding sales of our hepatitis C
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`products, OLYSIO and INCIVO, as well as the impact of acquisitions and divestitures,
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`underlying growth worldwide U.S. and outside the U.S. was approximately 9.7%, 16.5%
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`and 2.5% respectively. U.S. results included a positive adjustment to sales reserves for
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`managed Medicaid rebates reflecting final data received. U.S. comparisons to second
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`quarter 2014 were positively impacted by approximately 2% and worldwide by
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`approximately 1%. The most significant impact from the managed Medicaid adjustment
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`was through hormonal contraceptives. Significant contributors to growth were
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`INVOKANA/INVOKAMET, IMBRUVICA, XARELTO, ZYTIGA, INVEGA SUSTENNA or
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`XEPLION, CONCERTA and immunology products, STELARA and SIMPONI.
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`Strong momentum in market share increases drove results for INVOKANA/INVOKAMET.
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`In the U.S., INVOKANA/INVOKAMET achieved 5.9% TRx within the defined market of
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`type 2 diabetes, excluding insulin and metformin, up from 5.1% in the first quarter of 2015.
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`Johnson & Johnson's (JNJ) CEO Alex Gorsky Discusses Q2 2015 Results - Earnings Call Transcript | Seeking Alpha
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`TRx with endocrinologists grew to 13.2% for the quarter and 5.2% in primary care, up
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`1.2% and 0.8% respectively on a sequential basis. INVOKANA/INVOKAMET remains the
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`category leader in new to brand share with endocrinologists and has greater than 80%
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`preferred access across commercial and Part D plans.
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`Strong patient uptake with new indications, approvals and demonstrated efficacy drove
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`results for IMBRUVICA in the U.S. IMBRUVICA is the leader in both new and total patient
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`regimen share in the second line CLL and MCL. Outside the U.S., results were driven
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`primarily by Europe with strong patient uptake, particularly in Germany, France, and the
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`UK.
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`XARELTO sales were up nearly 31% and total prescription share, or TRx, for the quarter
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`in the U.S. anticoagulant market grew to 15.4%, up over 2 points from a year ago. TRx in
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`primary care reached 12.4% and in cardiology, 23.7%. XARELTO is broadly reimbursed
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`with over 90% of commercial and Medicare Part D patients covered at the lowest branded
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`product co-pay. Strong growth of the combined metastatic castrate-resistant prostate
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`cancer market, at nearly 12.5%, drove the results for ZYTIGA in the U.S. ZYTIGA’s share
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`was approximately 28.6% of that market, down approximately 1.7 points on a sequential
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`basis due to increased competition.
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`As an update, during the quarter, we received several Paragraph IV notifications from
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`generic manufacturers advising that they filed Abbreviated New Drug Applications with the
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`FDA seeking approval to market a generic version of ZYTIGA in the U.S. before the
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`expiration of the relevant patents listed in the orange book. The composition of matter
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`patent is owned by our partner, BTG, and expires in December 2016 and the method of
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`treatment patent is owned by Janssen Oncology Inc. and expires in August 2027. We are
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`currently evaluating the notices.
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`Outside the U.S., ZYTIGA achieved very strong growth in Asia and Latin America, which
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`was partly offset by lower sales in Europe due to increased competition. INVEGA
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`SUSTENNA or XEPLION achieved strong results due primarily to increased market share
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`while CONCERTA growth was primarily due to therapeutic equivalence reclassification of
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`generic competitors. The results for immunology were driven by strong double digit market
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`growth complemented by increased market share for STELARA and combined SIMPONI,
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`SIMPONI ARIA. Growth was partially offset by lower REMICADE sales to our distributors
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`reflecting the weakening of the euro and the loss of exclusivity in Europe as well as the
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`reduction in inventory levels.
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`Johnson & Johnson's (JNJ) CEO Alex Gorsky Discusses Q2 2015 Results - Earnings Call Transcript | Seeking Alpha
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`I will now review the Medical Devices segment results. Worldwide Medical Devices
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`segment sales of $6.4 billion decreased 4.7%. U.S. sales declined 5.8% while sales
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`outside the U.S. declined 3.9%. Ortho-Clinical Diagnostics was divested mid-year 2014.
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`Excluding the net impact of acquisitions and divestitures, underlying operational growth
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`was 1.4% worldwide with the U.S. up 1.6% and growth of 1.4% outside the U.S. Growth
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`was driven by Specialty Surgery, Cardiovascular Care and Orthopaedics. Specialty
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`Surgery growth was driven by bio-surgery growth of over 8% and energy growth of
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`approximately 6% due to market growth, share gains in certain segments and new product
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`introductions.
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`Cardiovascular growth was driven by 10% worldwide increase in electrophysiology due to
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`strong sales of ThermoCool SmartTouch Catheter. Orthopaedics sales growth was driven
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`by knees and hips as well as ORTHOVISC and MONOVISC in sports medicine. The
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`growth was partially offset by lower sales in trauma and spine due to pricing pressure
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`coupled with the timing of tender business and competitive challenges in spine. Knees
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`worldwide increased 4% with the U.S. up 5% and sales outside the U.S. up 2%, driven by
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`strong sales of ATTUNE, partially offset by pricing pressure. Hips growth of 2% worldwide
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`was driven by 4% growth in the U.S. with strong volume growth, partially offset by
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`continued pricing pressure. Primary stem platform sales were a major contributor to the
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`results. Outside the U.S., sales were flat with strong growth in China and India, offset by
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`lower sales in the Middle East due to the timing of tender business. For your reference,
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`there were some notable developments in the second quarter, which we have summarized
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`on this slide to assist you as you develop your models.
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`That concludes the segment highlights for Johnson & Johnson’s second quarter of 2015. It
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`is now my pleasure to turn the call over to Alex Gorsky. Alex?
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`Alex Gorsky
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`Thank you, Louise and good morning everyone. I really appreciate you taking the time to
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`join our call today. And since we are at the midpoint of the year, I am excited to share the
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`progress we have made against our near-term priorities. I will also use the time today to
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`give some perspective on the environment that we are operating in and some of the
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`macro level issues we are seeing and also discuss why we believe with our innovation
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`model and breadth and scale of our business, the Johnson & Johnson is strongly
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`positioned to drive continued growth and shareholder value. So I will start the discussion
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`though where I always do with Our Credo.
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`Johnson & Johnson's (JNJ) CEO Alex Gorsky Discusses Q2 2015 Results - Earnings Call Transcript | Seeking Alpha
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`Our Credo serves as the moral compass for our company and expresses a set of values
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`that bond our associates worldwide with a shared commitment to meet and really exceed
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`the expectations of the more than 1 billion people a day that rely on our products as well
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`as to support our fellow colleagues, the communities in which we live and work and
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`generate solid return to our shareholders. Now back in January, I laid out our near-term
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`priorities for the business and I am pleased with our progress towards them. Across the
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`enterprise, we are very focused on delivering our financial and quality commitments.
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`First, our commitment to ensuring our products meet the highest quality standards is of
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`course non-negotiable. And as to our financial commitments thus far in the year, we
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`generated sales of $35.2 billion, reflecting the strong underlying operational growth across
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`the enterprise of about 6% when we adjust for the impact of Hepatitis C sales and
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`acquisitions and divestitures. And for the first six months, we delivered adjusted net
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`earnings of $9.2 billion and adjusted EPS of $3.27. On an operational basis, we delivered
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`adjusted EPS of $3.59 growing at 5.3%. As we have highlighted previously, we knew there
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`are year-over-year comparisons to our current results would be challenging because of
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`the tremendous contributions of OLYSIO last year as well as the impact of divestitures we
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`made and also the significant devaluation of major foreign currencies against the U.S.
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`dollar.
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`Now despite these headwinds our broad base of innovative offerings, scale and global
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`footprint are driving our strong core performance. In pharmaceuticals, we reported sales of
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`$15.7 billion, reflecting strong underlying operational growth when excluding the impact of
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`Hepatitis C and divestitures of over 11% for the first half of 2015, led by our new and core
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`products including INVOKANA, IMBRUVICA, XARELTO and STELARA and ZYTIGA. Our
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`focused R&D strategy and commitment to driving launch excellence to ensure broad
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`access and reimbursement has really come together to make a difference for patients and
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`have this well-positioned to continue to drive above industry compound annual growth rate
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`over the next several years. Fueled by seven of our recently launched products that we
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`expect will each exceed $1 billion in sales this year and the more than 10 new products
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`we plan to file by 2019 that each have $1 billion plus potential of their own based on their
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`transformational potential to treat significant unmet medical needs worldwide.
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`And just last week, our partner Genmab announced that we have completed the FDA
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`submission for daratumumab, a promising new breakthrough treatment option for people
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`with multiple myeloma. This organization has collectively done great work to generate
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`strong clinical evidence in the development process, which is enabling our reimbursement
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`Johnson & Johnson's (JNJ) CEO Alex Gorsky Discusses Q2 2015 Results - Earnings Call Transcript | Seeking Alpha
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`teams to gain the right coverage levels in order to create broad access and drive the
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`strong performance of our products despite the pricing pressure that exist in the
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`marketplace.
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`Now I also want to make a comment here on our position regarding biosimilar competition
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`for REMICADE, which I know many of you are thinking about. Remember, biosimilars are
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`not generics and we expect the biosimilar market to behave quite differently than the
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`market typically has toward the introduction of a generic. Also more than 2.2 million
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`people have been treated with REMICADE and about 70% of the current patients are
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`receiving sustained and effective treatment so we believe their doctors are very unlikely to
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`switch them off with that level of success. And we also have a patent for the REMICADE
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`antibody that doesn’t expire until September 2018 that you can be sure we will continue to
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`vigorously defend.
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`Look, we know competition in the immunology space is fierce and to ensure we maintain
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`the leadership position, we built an established portfolio of $1 billion plus medicines that
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`include STELARA and SIMPONI and have potential $1 billion plus products in our late
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`stage development like sirukumab for rheumatoid arthritis and guselkumab for psoriasis
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`that we expect to introduce in the near-term. And we are also making very significant
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`investments in disruptive research areas like the microbiome, which holds the potential to
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`intercept the disease and prevent it entirely that will have applications in immunology and
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`really across all our disease areas.
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`Now turning to Medical Devices, you know we are number one or number two in the
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`majority of the categories in which we compete and have ten $1 billion plus platforms.
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`Year-to-date, we reported global medical device sales of $12.6 billion, which is an
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`operational decline of 4.6% due to the impact of the sale of Ortho-Clinical Diagnostics,
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`which we completed a year ago. When we adjust for that, our underlying operational
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`growth in medical devices is up 1.4%. I have been particularly pleased with the
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`performance in several areas of this business where new innovations are driving growth,
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`including our Biosense Webster business, which has grown nearly 11% operationally for
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`the first six months of the year. Our Endocutter business has grown 15.5% and our
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`Biosurgery business with continued strong growth of 7.5%.
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`In diabetes, our products and strong in-market execution are helping to revitalize that
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`business while our Vision Care business is on track to return to growth later in the year
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`when we will anniversary the impact of the 2014 price reset. In Orthopaedics, the business
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`grew 1.5% operationally this year with good growth in the reconstruction and sports
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`medicine segment. Particularly in the second quarter here in the U.S. where despite the
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`Johnson & Johnson's (JNJ) CEO Alex Gorsky Discusses Q2 2015 Results - Earnings Call Transcript | Seeking Alpha
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`pricing dynamics in the market, we saw over 5% growth in knees and approximately 4% in
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`hips. Our spine and trauma businesses however, have lagged market growth today and
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`we are absolutely committed to turning them around. And we have new products
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`launching this year that will help us do just that.
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`Now as we look at this market, the ongoing consolidation among health systems and
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`within the insurance industry is continuing to create pressure on pricing. We have been
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`encouraged though by data showing that healthcare utilization trends in the U.S. have
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`continued to improve for the fourth consecutive quarter with growth in both hospital
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`admissions and hospital surgical procedures. And we remain optimistic about increased
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`global healthcare utilization as well. So, we are absolutely committed to accelerating our
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`growth in medical devices through innovation and through our research and development,
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`which has been productive as the teams have already submitted more than half of the 30
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`major filings we previously announced we plan to file by the end of 2016. And the work we
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`are doing with Google illustrates how we are aiming to pioneer the operating room of the
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`future with robotic surgery tools that will increase the surgeon’s precision and minimize
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`trauma for their patients, while also reducing cost for the systems.
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`We are also transforming our go-to-market models to fully leverage the breadth and scale
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`of our capabilities, but we have taken significant measures to strengthen our core
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`businesses and effectively position ourselves to lead over the long-term. We just recently
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`integrated our Global Orthopaedics and Global Surgery businesses under the leadership
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`of Gary Pruden, which will enable us to have a much more holistic approach to the way
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`we do business. And the goal here is very straightforward. Let’s enhance our partnerships
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`with the hospital systems and identify ways to improve outcomes by leveraging our
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`comprehensive portfolio. We already have numerous examples of co-promotions, broad
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`contracting agreements and service and solution offerings in place that we can look to
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`expand and by better working in this new alignment model, we will be better positioned to
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`great more of them to drive future growth. Gary will be on the third quarter call in October
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`to tell you more about this approach.
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`And now in the Consumer business, Sandi Peterson and her team, which includes our
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`new Worldwide Chairman for the consumer companies, Jorge Mesquita, a seasoned
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`leader who has been with us since the end of last year, are doing tremendous work in
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`building and executing a strategy that has effectively addressed the past challenges in our
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`supply chain and reprioritized our approach in the category. And we are positioned to
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`expand our market leadership in key segments moving forward. Year-to-date, we
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`generated $6.9 billion in sales and reported operational growth of nearly 4%, excluding
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`acquisitions and divestitures, driven by our market leading OTC and Oral Care
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`businesses. And our strategy to focus the portfolio around the key consumer need states
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`in brands that are backed with strong clinical science and professional endorsements is
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`having a strong impact. The United States OTC medicines are sharply up 13% for the
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`year led by the strong campaigns who are leading in support and the re-launch of key
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`brands like TYLENOL, MOTRIN and ZYRTEC. And our momentum here could not have
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`been achieved without the efforts of our colleagues to complete the complex work
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`required around the consent decree.
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`Globally, we see strong operational growth in emerging markets, particularly in Argentina,
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`Brazil, India, Russia and Venezuela. We are however experiencing market pressures in
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`China, where our volumes have slowed due to lower demand that is being compounded
`
`by shifts in consumer behaviors and the emergence of new retail channels in the country.
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`In a few minutes, Sandi will take you through the strategy and approach for how our
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`consumer-facing businesses are leveraging our unique consumer insights and integrating
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`science and different forms of technology to better meet the needs of consumers and
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`drive growth.
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`But before we do that, I want to reiterate how we are navigating the environmental
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`changes before us and how we strongly positioned Johnson & Johnson to deliver
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`continued growth. As you well know, everything starts with innovation. And at Johnson &
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`Johnson, we are doing that on multiple fronts and we are committed to working with
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`researchers around the world to ensure we continue to operate the leading edge of
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`science, medicine and technology. And that approach drives our enterprise R&D and the
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`significant investments we are making to benefit patients and stakeholders.
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`We have a good balance of internal and externally sourced innovations and acquisitions
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`have accounted for just under half of our sales growth over the last decade and we are
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`always actively looking for new value-creating acquisitions and deals to continue that
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`success. We also invested about 11.5% of our net trade sales or $8.5 billion in R&D last
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`year across the enterprise to discover in-license and develop innovative new products,
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`and you can see the impact reflected in our portfolio and robust development pipeline,
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`which includes 25 active late-stage development programs, 160-plus early-stage
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`programs in over 70 venture investments. And in just two years, there is already 90 start-
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`ups working in our J-Labs, which creates tremendous access to new ideas and potential
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`downstream partnerships for the future.
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`Johnson & Johnson's (JNJ) CEO Alex Gorsky Discusses Q2 2015 Results - Earnings Call Transcript | Seeking Alpha
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`Now, when it comes to making significant R&D investments, we must also focus on
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`managing through the inherent complexities in the global regulatory environment in order
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`to ensure our products are ultimately able to reach consumers. We are encouraged by the
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`steps governments are taking to increase access to quality healthcare for their people and
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`to also create and support a more innovation-friendly environment through designations
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`and speed to review and approval of transformational products. We benefited from that
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`with IMBRUVICA, and today, we have two other candidates in our pharma pipeline
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`already designated as breakthrough therapies by the FDA. At the same time, we can all
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`agree that governments around the world must do more to protect intellectual property
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`and ensure fair, transparent and consistent enforcement of regulations governing the trade
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`of innovative products and we will continue to watch and engage in these issues into more
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`than 65 countries in which we do business.
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`Globally, about half our total year-to-date sales come from countries outside the United
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`States with strong national and regional models like those we have installed in China and
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`Southeast Asia, we are better able to maximize the breadth of our portfolio, interact more
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`effectively with governments and develop contracting strategies and gain consumer
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`insights that are shaping our international portfolios and informing R&D and ultimately
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`driving growth. And by executing with excellence in all that we do, we have introduced a
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`strong cadence of new product launches over the past five years that today account for
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`about 25% of our overall sales and we are taking steps to ensure we are even more
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`effective and efficient across the enterprise by investing in greater uses of technology and
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`streamlining our back office processes, which we expect will help to free up about $1
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`billion that we can invest back into the business by 2018.
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`We are also continuing to make strategic decisions about the areas we are going to
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`participate in or move on from. As we stated before, our focus is on areas where we are or
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`we can be number one or number two in a particular area as well as on those products or
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`businesses that will be directly complementary. And if we have an asset or a business that
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`doesn’t meet those criteria, we have demonstrated that we will divest it and redirect our
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`resources to accelerate existing programs or to acquire new ones that we think are
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`ultimately going to help more patients and also add more value to our enterprise. We also
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`see that our broad base across the healthcare spectrum is a competitive advantage when
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`the strategies we create consider and where appropriate incorporate insights and
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`innovations from every aspect of our operations to attack disease and improve health
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`outcomes.
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`Johnson & Johnson's (JNJ) CEO Alex Gorsky Discusses Q2 2015 Results - Earnings Call Transcript | Seeking Alpha
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`The work we are doing with IBM and Apple does this by cutting across the enterprise and
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`leveraging our science, technology and consumer insights to empower patients and
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`caregivers to help speed the post-surgical recovery process. Executing our strategy
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`ultimately comes down to people and by focusing on them and emphasizing our Credo-
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`based purpose, we developed a deep bench of extraordinary talent, we are accountable
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`for driving their businesses and we will also ensure we are taking leading roles within the
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`industry and world medical community to combat global public health issues like Ebola
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`and HIV.
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`Now, just to summarize, Johnson & Johnson is a company that’s built a remarkable legacy
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`and has a very exciting future. Healthcare though remains one of every society’s greatest
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`challenges and nothing affects people more personally or affects communities and nations
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`more directly. Our business is strong and you can see that we are continuing to make
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`considerable investments in innovation and have a robust pipeline of truly transformative
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`products to ultimately benefit patients and that we are taking actions to strengthen our
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`leadership positions in areas in which we compete. With our transparent and consistent
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`capital allocation strategy, we extended our track record of dividend increases to 53
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`consecutive years in April when we declared a 7.1% increase, taking our quarterly payout
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`up to $0.75 per share and have returned about 70% of our free cash flow over the past
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`decade to investors outpacing the S&P 500 in 2014 as well as over the last 3, 10 and 20
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`years.
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`With that, it’s now my distinct pleasure to turn the call over to Sandi Peterson. Sandi
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`joined Johnson & Johnson just over 2.5 years ago and is leading a significant
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`tra