Jessica Moore: Thank you, Joaquin. Moving to our financial results. Unless otherwise stated, the results and guidance highlighted today reflect the continuing operations of Johnson & Johnson. Furthermore, the percentages quoted represent operational results and therefore excludes the impact of currency translation. Starting with Q4 2024 sales results. Worldwide sales were $22.5 billion for the quarter. Sales increased 6.7% with growth of 10% in the US and 2.5% outside of the US. Worldwide growth was negatively impacted by 290 basis points due to STELARA and positively impacted by 100 basis points due to acquisitions and divestitures. It's important to note growth in Europe was negatively impacted by 720 basis points due to the loss of exclusivity of STELARA and the COVID-19 vaccine. Turning now to earnings. For the quarter, net earnings were $3.4 billion and diluted earnings per share was $1.41 versus diluted earnings per share of $1.70 a year ago. Excluding after tax intangible asset amortization expense and special items for both periods, adjusted net earnings for the quarter were $4.9 billion and adjusted diluted earnings per share was $2.04, representing decreases of 11.1% and 10.9%, respectively, compared to the fourth quarter of 2023. Earnings per share in the quarter was negatively impacted by $0.22 of acquired IPR&D expense related to the V-Wave acquisition. For the full year 2024, sales were $88.8 billion. Sales grew 5.9% with growth of 8.3% in the US and 2.9% outside of the US. STELARA and the COVID-19 vaccine negatively impacted worldwide growth by 260 basis points. Acquisition and divestitures positively impacted worldwide growth by 50 basis points. Growth in Europe was negatively impacted by 670 basis points due to the COVID-19 vaccine and the loss of exclusivity of STELARA. Net earnings for the full year 2024 were $14.1 billion and diluted earnings per share was $5.79 versus diluted earnings per share of $5.20 a year ago. Full year 2024 adjusted net earnings were $24.2 billion and adjusted diluted earnings per share was $9.98, representing a decrease of 4.6% and an increase of 0.6% respectively versus full year 2023. Earnings per share in the year was negatively impacted by $0.67 due to acquired IPR&D charges on various transactions throughout the year. I will now comment on business sales performance in the quarter. Beginning with Innovative Medicine. Worldwide sales of $14.3 billion increased 6.5% excluding the COVID-19 vaccine with growth of 11.1% in the US and a decline of 0.3% outside of the US. STELARA negatively impacted worldwide growth by 490 basis points. Innovative Medicine growth was driven by our key brands and continued uptake from recently launched products with 10 assets delivering double-digit growth. Results across the portfolio continue to be positively impacted by price adjustments associated with Argentina hyperinflation consistent with market practice. Starting with oncology. We continue to drive strong sales growth across our multiple myeloma portfolio. DARZALEX growth was 23.5%, primarily driven by share gains of over three points across all lines of therapy and six points in the frontline setting as well as market growth. This marks Johnson & Johnson's first brand to achieve over $3 billion in sales in a quarter. CARVYKTI achieved sales of $334 million with growth of over 100% driven by share gains and capacity expansion. This reflects sequential growth of 17.3% aligned with our expectations of accelerating growth in the back half of the year. TECVAYLI sales were $146 million in the quarter with growth of 18%, reflecting a strong launch in the relapsed refractory setting. Demand remains strong despite continued adoption of longer duration dosing intervals. Finally, within our multiple myeloma portfolio, TALVEY continued its launch trajectory with another quarter of strong growth. As a reminder, we anticipate disclosing TALVEY sales in the first quarter of 2025, which are currently reported in the category Other Oncology. ERLEADA continues to deliver strong growth of 22.7%, primarily driven by share gains and market growth, reaching $3 billion in annual sales for the first time. RYBREVANT, our bispecific antibody for non-small cell lung cancer, contributed to growth in the category Other Oncology as we continue to expand approved indications. We also anticipate disclosing RYBREVANT sales in the first quarter of 2025. Within immunology, we saw sales growth in TREMFYA of 5.6%, driven by strong market growth and share gains in PsO and PsA, partially offset by unfavorable patient mix and inventory dynamics. We are excited about the recent UC launch and expect to see strong uptake of the IBD indications in 2025. STELARA declined 13.6% driven by the impact of current and anticipated biosimilar competition. As a reminder, biosimilar competition has entered the US in January 2025. REMICADE and SIMPONI worldwide sales were positively impacted by return of distribution rights in Europe. In Neuroscience, SPRAVATO growth of 45.3% continues to be driven by increased physician and patient demand. As Joaquin mentioned, SPRAVATO has exceeded $1 billion in annual sales for the first time. Other Neuroscience decline was driven by the loss of a SPINRAZA tender in Europe. In Pulmonary Hypertension, OPSUMIT grew 2.5%, driven by market growth and share gains, partially offset by inventory dynamics in the US and austerity measures in Europe. Starting in 2025, we will begin to report OPSYNVI, which is currently reported in the category Other Pulmonary Hypertension in OPSUMIT. UPTRAVI grew 12. 1%, driven by market growth, patient mix and share gains. Finally, XARELTO sales growth was driven by favorable patient mix. I'll now turn your attention to MedTech. Worldwide sales of $8.2 billion increased 7.6% both in the US and outside of the US. Acquisitions and divestitures had a net positive impact of 300 basis points on worldwide growth, 430 basis points in the US and 150 basis points outside of the US. Overall, MedTech growth was driven by commercial execution and strength of new product introductions, partially offset by increased competitive PFA pressures in US electrophysiology and continued headwinds in Asia Pacific, primarily in China. In Cardiovascular, electrophysiology delivered growth of 7.3%. Performance was driven by global procedure growth, new product uptake and commercial execution, partially offset by competitive PFA ablation catheter uptake in the US and VBP in China. Despite the IV saline shortage in the US, Abiomed delivered growth of 13.2% driven by strong growth in all regions and continued adoption of Impella 5.5 and Impella RP technology. Cardiovascular results also included $258 million associated with the acquisition of Shockwave. Contact Lenses and Other grew 7.4%, driven by trade inventory dynamics, continued strategic price actions, strong performance in ACUVUE OASYS 1-Day family of products as well as lapping prior year impacts from Russia sanctions. Surgical Vision growth of 13.6% was driven by TECNIS PureSee & TECNIS Eyhance. Commercial execution partially offset by competitive pressures in the US. Orthopedics grew 2.5% inclusive of hips growth of 5.6%, primarily driven by the success of recent product launches and commercial execution, partially offset by revenue disruption from the previously announced orthopedics transformation, impacts of China VBP and competitive pressures. Lastly, Surgery grew 0.4% with the Acclarent divestiture negatively impacting results by approximately 130 basis points. Performance was driven primarily by commercial execution, strength of new products across wound closure and biosurgery and continued price adjustments primarily associated with hyperinflation consistent with market practice. Growth was partially offset by competitive pressures in Energy and Endocutters as well as VBP and the anticorruption campaign in China. Now turning to our consolidated statement of earnings for the fourth quarter of 2024. I'd like to highlight a few noteworthy items that have changed compared to the same quarter of last year. We continue to invest strategically in research and development at competitive levels to fortify our future, investing $5.3 billion or nearly 24% of sales, which includes $540 million of acquired IPR&D expense associated with the V-Wave acquisition. Selling, marketing and administrative expense as a percent of sales deleveraged 150 basis points driven by increased commercial investment in the Innovative Medicine business. Interest income and expense was a net income of $144 million as compared to $212 million of income last year driven by lower interest rates earned on a lower average cash balance and higher interest rates on a higher average debt balance. Other income and expense was a net income of $161 million compared to $421 million of income in the prior year. This was primarily driven by lower gains on securities, a lower benefit related to employee benefit programs due to the discount rate, partially offset by lower litigation expense in 2024. Regarding taxes in the quarter, our effective tax rate was 11.7% versus 14.4% in the same period last year. This decrease was primarily driven by post-acquisition integration efforts that allowed the company to deduct certain acquisition costs for tax purposes as well as the resolution of prior tax matters both in jurisdictions outside of the US. Excluding special items, the effective tax rate was 8.8% versus 10.8% in the same period last year. I encourage you to review our upcoming 2024 10-K filing for additional details on specific tax related matters. Lastly, I'll direct your attention to the box section of the slide, where we have also provided our income before tax, net earnings and earnings per share adjusted to exclude the impact of intangible, amortization expense and special items. Now let's look at adjusted income before tax by segment for the quarter. Innovative Medicine margin declined from 37.4% to 32.5% primarily driven by strategic commercial investment and R&D pipeline advancement. MedTech margin declined from 15.5% to 10. 8% primarily driven by acquired IPR&D expense related to the V-Wave acquisition. Please note that the MedTech margin was negatively impacted in both years due to expenses associated with the strategic acquisition of Laminar. When adjusting for these one-time items, MedTech margin was relatively flat. As a result, adjusted income before tax for the enterprise as a percentage of sales decreased from 29.2% to 24.1% with the V-Wave acquired IPR&D expense impacting results by 240 basis points. When looking at the full year, Innovative Medicine, MedTech and the Enterprise adjusted income before tax remained relatively flat year-over-year when adjusting for the one-time items highlighted on the slide, mainly acquired IPR&D expenses on various transactions across both years. This concludes the sales and earnings portion of the call. I am now pleased to turn it over to Joe.


Joe Wolk: Thank you, Jessica, and thanks, everyone, for joining us today. As previously shared, we reported particularly strong results across all segments for the second quarter and the first-half of 2023. During the second quarter, adjusted operational sales growth by pharmaceuticals excluding COVID-19 revenue accelerated 6.2% over the first quarter of 2023. Similarly, on a sequential basis, MedTech operational sales increased to 4.5% over an already strong first quarter. During the first-half of the year we executed against our long-term business strategy and achieved key clinical and regulatory milestones. These advancements provide a strong foundation for long-term growth and are a testament to the hard work and dedication of our talented colleagues around the world. We also made considerable progress toward the separation of Kenvue. On May 8th, as partial consideration for the transfer of the Consumer Health business, Kenvue paid $13.2 billion to Johnson & Johnson from the net proceeds of the initial public offering and debt financing transactions in connection with the separation. Today, we were pleased to announce an update on our next step toward the separation of Kenvue, subject to market conditions, our intention is to split off Kenvue shares through an exchange offer as our next step in the separation. As part of the proposed exchange offer, Johnson & Johnson's shareholders will have the choice to exchange all some or none of their shares of Johnson & Johnson common stock for shares of Kenvue common stock subject to the terms of an offer. We believe a split off is the most advantageous form of separation for Johnson & Johnson, Kenvue and our shareholders, specifically an exchange offer provides Johnson & Johnson the potential opportunity to acquire a large number of outstanding shares of Johnson & Johnson common stock at one time in a tax free manner for U.S. federal income tax purposes without reducing overall cash or future financial flexibility. Further, following the completion of the exchange offer, Kenvue would most likely have a shareholder base that would have made the election to own its shares. The exact timing of our decision to launch an exchange offer will, as stated earlier, depend on market conditions, but the launch of the tender could occur as early as the coming days. Offer terms for the exchange inclusive of applicable discounts, as well as the duration of the exchange tender period would be set upon launch. We understand that you may have questions on this process. At this point, there are no additional details about the contemplated split off to share, but we are committed to providing timely updates as appropriate. Let's now turn to cash and capital allocation. We ended the second quarter with approximately $29 billion of cash and marketable securities and approximately $46 billion of debt for a net debt position of $17 billion, inclusive of approximately $7 billion of 10 Kenvue net debt. Free cash flow through the second quarter was approximately $5.4 billion, compared to $8.1 billion in the prior year. The second quarter reflects elevated tax payments of approximately $2 billion related to TCJA and past audit related matters. Our capital allocation priorities remain unchanged with continued investment in our business being the highest priority to drive new and better solutions for patients, followed by dividends, increasing on an annual basis, adding strategic opportunities for inorganic growth, and share repurchases when attractive. Our R&D investment in the first-half of 2023 was $7.4 billion or approximately 15% of sales. This includes external investments such as our recently announced partnership with Cellular Biomedicine Group on two next generation CAR-Ts for the treatment of B-cell malignancies further broadening our cell therapy portfolio. In April, we announced our 61st consecutive year of dividend increases and in combination with the completion of our $5 billion share repurchase program authorized by the Board in September of 2022, and completed earlier this year, we returned $8.5 billion to shareholders in the first-half of 2023. Let's discuss our outlook for the balance of 2023. Before I get into the specifics of guidance, in light of the potential Kenvue split off transaction I will remind you that our updated full-year guidance today continues to include results from the Consumer Health Business given Johnson & Johnson remains the majority shareholder of Kenvue. I suspect you already know this, but it would not be accurate to subtract any guidance provided separately by Kenvue from total Johnson & Johnson guidance and assume that the resulting total reflects guidance for the new Johnson & Johnson. When Johnson & Johnson is no longer the majority shareholder of Kenvue, we will provide timely updated new Johnson & Johnson guidance that will reflect among other things the removal of Consumer Health's current contribution to Johnson & Johnson's performance, as well as any updates to Johnson & Johnson's outstanding share count. So with that context, moving on to our full-year guidance. Based on the strong results delivered in the quarter, like we did in April, we are again raising full-year operational sales and EPS guidance, despite some strategic items not accretive to EPS as detailed on this schedule. Specifically the lost income related to the approximate 10% non-controlling interest in Kenvue and the acquired in process research and development cost related to our investment in Cellular Biomedicine Group. We now expect operational sales growth for the full-year 2023 to be in the range of 7% to 8% or up $1.4 billion in the range of $99.3 billion to $100.3 billion on a constant currency basis and adjusted operational sales growth in the range of 6% to 7%. As you know, we don't speculate on future currency movements. Last quarter, we noted that we utilized the Euro spot rate relative to the U.S. dollar at $1.10. The Euro spot rate as of mid-last week remains at $1.10. However, the U.S. dollar has strengthened versus other select currencies such as the Won and the Yen. As such, we now estimate a negative impact of foreign currency translation of approximately 500 basis points resulting in estimated reported sales growth between 6.5% to 7.5%, compared to 2022 with a midpoint of $99.3 billion. Regarding other lines on the P&L, we now anticipate a slight improvement to our adjusted pretax operating margin driven by expense management. We have reduced our other income estimate to be in the range of $1.6 billion to $1.8 billion, primarily related to the company’s 10.4% non-controlling interest in Kenvue. Regarding interest income and expense, we now anticipate a reduction of net interest expense to the range of a $150 million to $250 million, due to interest income on the net proceeds linked to the Kenvue separation. And finally, based on current tax law, we are maintaining our effective tax rate estimate in the range of 15.5% to 16.5%. These changes result in us increasing our adjusted operational earnings per share guidance by $0.10 per share to a range of $10.60 to $10.70 or $10.65 at the midpoint on a constant currency basis. Constant currency growth of 5% at the midpoint. While not predicting the impact of currency movements, assuming recent exchange rates I previously referenced our reported adjusted earnings per share for the year assumes no additional foreign exchange impact. As such, our reported adjusted earnings per share for the year increases by $0.10 per share to a range of $10.70 to $10.80 or $10.75 at the midpoint, reflecting growth of 6% at the midpoint. While we do not provide guidance by segment or on a quarterly basis, let me offer some qualitative considerations to support your modeling. In MedTech, we continue to anticipate stable procedure volumes and healthcare staffing levels in the back half of the year with normal seasonality. We expect continued competitive performance attributable to commercial execution recently launched products and improvement in supply. Headwinds from volume based procurement in China, as well as potential impacts from international sanctions in Russia are expected to be higher in the second-half than the first-half of the year. In Pharmaceuticals, we continue to expect to deliver our 12th consecutive year of above market growth in 2023, driven by key assets and continued uptake of our newly launched products. We expect continued strong growth in the back half of the year slightly higher than the first-half. When modeling consumer health growth rates in 2023, it's important to take into consideration prior year comparisons with lapping price increases in the back half of the year. Given the strong momentum in our pharmaceutical business and the upcoming clinical milestones mentioned earlier we remain very confident in our ability to meet our 2025 pharmaceutical sales target of $57 billion. Looking ahead, we have many important catalysts for the remainder of the year that can drive meaningful near and long-term value. Beyond the separation, in the near-term, we are continuing to drive performance in MedTech with better commercial execution and recently launched innovative products being a significant factor in driving the continued higher growth trajectory across the MedTech business. Many of the solutions mentioned are early in their commercialization, which means there are still significant opportunity ahead. For example, in electrophysiology we are excited to begin the commercialization of the QDOT MICRO Catheter in the U.S. during the second-half of this year. In Orthopaedics, the VELYS robotic assisted solution, recently received regulatory approvals in Europe, and we plan to launch it in key European countries by the end of this year. And in Vision, we are seeing the benefits of our recently launched innovations such as ACUVUE OASYS 1-Day multifocal, which is driving Johnson & Johnson's market share growth in the large and growing presbyopia market. We look forward to continued growth from this and other recent Vision launches. Related to our pharmaceutical business, we are excited about upcoming advancements in our pipeline with a number of important regulatory and clinical milestones for our key future assets, including on the regulatory front there is expected approval of [daratumumab] (ph) in relapsed or refractory multiple myeloma. Clinically, we expect a Phase 3 data for TREMFYA for Crohn's disease and ulcerative colitis. The results of the MARIPOSA study of RYBREVANT plus lazertinib in front line non-small cell lung cancer with the opportunity to potentially present that data at an upcoming major medical meeting. Phase 1 data for TAR-210 in non-muscle invasive bladder cancer, and Phase 2 data for Nipocalimab in rheumatoid arthritis. A couple of other items to highlight. In case you missed them, we recently published our Health For Humanity report our U.S. Pharmaceutical pricing transparency report and our U.S. patent table, all of which can be found on our website. Also, a reminder that we will be hosting an enterprise business review featuring both Pharmaceutical and MedTech at the New York Stock Exchange on December 5th. I'll conclude my prepared remarks by reiterating that we have had a strong first-half of the year both financially and operationally and we expect to continue to build upon that momentum in the second-half of this year. With that, I will now turn the call over to Erik Haas.

cash and marketable securities debt net debt

cash and marketable securities second quarter


Joseph Wolk: Thank you, Jessica, and thanks, everyone, for joining us today. As Joaquin and Jessica commented, 2023 was a strong year for Johnson & Johnson evidenced by notable top and bottom line performance beats relative to what we guided to 2023 at this time last year. We are particularly proud of the innovation we advanced to strengthen our development pipelines, the continued expansion of our portfolio and investments made for future success. All of this provides us with a strong foundation as we enter 2024. Thus far during the call, you've heard about sales and income performance in 2023. So now let's dive into some detail on capital allocation highlights. We generated free cash flow of more than $18 billion in 2023. At the end of the year, we had approximately $23 billion of cash and marketable securities and approximately $29 billion of debt for a net debt position of $6 billion. We maintained a healthy balance sheet and robust credit rating, underscoring the strength of Johnson & Johnson's financial position, which enables us to strategically invest and deploy capital to unlock value. To that end, we executed against all of our capital allocation priorities in 2023. For starters, we invested more than $15 billion in research and development or 17.7% of sales, an all-time high for the company as we remain one of the top investors in R&D across all industries. Jessica provided R&D investment by business segment, information we will continue to provide on a quarterly basis moving forward. As far as dividends, 2023 marked the 61st consecutive year in which we increased our dividend. We know this use of capital is a priority for our investors, and we plan to continue to increase our dividend annually. We also deployed, announced or committed over $3 billion in strategic value creating inorganic growth opportunities in the last 12 months. This amount includes the recent Ambrx and Laminar transactions as well as more than 50 smaller early-stage licensing deals and partnerships that complement our current Innovative Medicine and MedTech pipelines. Finally, share repurchases. In early 2023, we completed the $5 billion share repurchase program initiated in late 2022 and in combination with our dividend, returned over $14 billion to shareholders last year. Through the Kenvue separation, we further reduced the Johnson & Johnson's outstanding share count by 191 million shares or approximately 7% without the use of cash and in a tax-free manner. Looking ahead to 2024, Johnson & Johnson's robust free cash flow generation should continue to solidify our already strong financial foundation and fuel further investment leading to growth for our business or returns to shareholders. Now turning to our full year 2024 guidance. Today, we are confirming the 2024 guidance for those items previewed at our enterprise business review in early December by filling in some of the details. We expect operational sales growth for the full year to be in the range of 5% to 6% or $88.2 billion to $89 billion. As a reminder, our sales guidance continues to exclude any impact from COVID-19 vaccine sales. In Innovative Medicine, we expect 2024 to deliver a 13th consecutive year of above market growth, driven by market share gains from key brands such as DARZALEX, TREMFYA and ERLEADA as well as continued adoption of recently launched newer products such as CARVYKTI, TECVAYLI, TALVEY and SPRAVATO. In MedTech, we remain focused on executing our key value drivers: first, advancing our differentiated pipeline such as programs in pulse field ablation, Abiomed and surgical robotics, further shifting our portfolio into high-growth markets; second, expanding our reach and scale around the world; and third, building operational resilience across our portfolio. We don't speculate on future currency movements, but utilizing the euro spot rate relative to the U.S. dollar as of last week at $1.09 as well as other major currencies, we estimate there would be a slight unfavorable impact of $400 million or a negative 0.5% on reported sales growth for the year. Turning to other items on our P&L. We expect our 2024 adjusted pretax operating margin to improve by approximately 50 basis points driven primarily by a continuation of efficiency programs across the organization. We expect this to be partially offset by anticipated STELARA biosimilar entrants in Europe in the second half of this year and some lingering inflation impact in MedTech inventory that will flow through 2024's P&L. This margin improvement encompasses dilution of additional investment associated with our planned acquisition of Ambrx, which will be treated as a business combination. Now we do acknowledge that this 50 basis point improvement simply gets us back to what your models expected, given the elevated Q4 2023 R&D investment for new pipeline assets. Regarding other income and expense, we anticipate income to be $1.2 billion to $1.4 billion for 2024. This is less than the 2023 amount driven by the impact of actuarial assumptions on certain employee benefit programs such as lower discount rates. We are comfortable with you modeling net interest income between $450 million and $550 million, consistent with 2023 levels. Finally, we are projecting an effective tax rate for 2024 in the range of 16% to 17% based on current tax laws and anticipated geographic income mix across our businesses. This tax rate takes into account an increase of approximately 1.5% or 150 basis points relative to the recently enacted Pillar 2 legislation. We continue to believe the U.S. Treasury's current perspective on Pillar 2 is harmful, reducing U.S. incentives for innovation and resulting in U.S. based multinational companies paying more tax revenue to foreign governments. Our full year share count calculation for adjusted earnings per share in 2024 will include the remaining benefit equal to approximately 120 million shares from the approximately 191 million net share reduction in outstanding J&J shares following the Kenvue exchange offer. Given all these factors, we expect adjusted operational earnings per share to grow 7.4% at the midpoint for a range of $10.55 to $10.75. Based on the euro spot rate of 1.09 from last week, we do not estimate any currency impact on earnings per share. I'll now provide some qualitative considerations on quarterly phasing for your models. We expect Innovative Medicine sales growth to be slightly stronger in the first half of the year compared to the second half, given the anticipated entry of STELARA biosimilars in Europe towards the middle of the year. This headwind will be partially offset by continued uptake from our recently launched products. We project MedTech operational sales growth to be relatively consistent throughout the year, expecting procedures in 2024 to remain above pre-COVID levels. The first half of the year will continue to have modest impact from Russia sanctions as our licenses are approved. We anticipate China VBP pricing for surgical IOLs and orthopedic sports to begin in 2024 with impacts from 2023 VBP in electrophysiology, Endocutters, Energy, Spine and Trauma to begin to anniversary throughout 2024. Regarding EPS phasing, it is important to highlight that the first half of the year will benefit from the full 191 million net share reduction following the Kenvue exchange offer with only a partial comparative benefit in the third quarter versus Q3 2023 and the fourth quarter being neutral versus Q4 2023. So based on the foundation strengthened in 2023 and numerous catalysts that Joaquin outlined across our business in 2024, we are confident in our ability to achieve both near and long-term financial targets. I'd like to close by thanking our colleagues for their dedication and commitment to benefit patients around the world. It is their effort that enables Johnson & Johnson to deliver innovative therapies and solutions that address serious unmet medical needs and creates long-term sustainable value for shareholders. With that, I’m now pleased to turn the call over to Kevin to begin the Q&A portion of the call.

cash and marketable securities debt net debt position

cash and marketable securities end of the year


Joe Wolk: Thank you, Jessica, and hello, everyone. Thank you for joining today's call. Overall, Johnson & Johnson delivered solid top and bottom-line, as well as free cash flow growth in the quarter. Our Innovative Medicine business made great progress in the second quarter. We have strong momentum with key end-market products and continue to advance our pipeline with significant clinical and regulatory milestones being attained. Our MedTech business delivered growth that fell below our expectations of growing in the upper range of our markets, which as you recall correlates to a weighted-average market growth rate of 5% to 7% from 2022 through 2027. We came into the year thinking 2024 would be in the upper end of that range. With acceleration planned in the second-half, given some of the first-half dynamics Jessica outlined, we now expect growth closer to 6% for 2024. To me, this reflects the power and breadth of our company, where we can more than offset quarterly volatility in one part with overperformance from another part of our business. Before I get into the numbers, I'd like to provide some qualitative business highlights from the quarter. Starting with innovative Medicine, in oncology, we continue to make meaningful progress across our disease areas of focus. Of note, we received FDA approval for CARVYKTI in earlier lines of therapy and reported positive top-line overall survival results from the CARTITUDE-4 study. We also submitted a filing with the FDA for our subcutaneous formulation of RYBREVANT. We presented updated results for TAR-200 and TAR-210 and we met primary endpoints for two DARZALEX studies, Cepheus and Aquila, where results will be presented at an upcoming major medical meeting. Turning to immunology, we achieved key milestones for TREMFYA in inflammatory bowel disease, including the presentation and filing of Phase III studies in ulcerative colitis and Crohn's disease, as well as the filing of our subcutaneous formulation, which would make TREMFYA the only IL-23 inhibitor with a fully subcutaneous regimen. We also expanded our immunology portfolio with the acquisitions of Proteologix and NM26. These bispecific antibodies will further strengthen our portfolio and enhance our ability to address significant unmet need in atopic dermatitis. Finally, spanning immunology and neuroscience, we presented positive results for nipocalimab in Sjogren's disease and myasthenia gravis. But it doesn't stop with the second quarter. We are excited for what awaits in the second half of this year with the anticipated approval and launch of both RYBREVANT plus Lazertinib in frontline EGFR positive lung cancer and TREMFYA in IBD. We also expect data from JNJ-2113, our targeted oral peptide in psoriasis and ulcerative colitis, JNJ 4804, our co-antibody therapeutic in IBD and nipocalimab in rheumatoid arthritis. As we continue to bring new innovations to market and execute against clinical and regulatory milestones, Innovative Medicine is well-positioned to achieve sustainable growth in both the near and long-term. Turning to MedTech, we continue to advance our pipeline, launch new commercial products and integrate strategic acquisitions that broaden and further differentiate our portfolio. In cardiovascular, we are enhancing our portfolio and shifting into higher growth markets through strategic acquisitions such as Shockwave Medical. In May, we announced the launch of our CARTO 3 Version 8 electroanatomical mapping system. This is the latest version of our 3D heart mapping system, which has machine learning capabilities that increase efficiency, reproducibility, and accuracy in maps electrophysiologists use to treat atrial fibrillation and other arrhythmias. In pulsed field ablation, we initiated the commercial launch of the VARIPULSE platform in the EU and Japan receiving early positive physician feedback in the external evaluation period. We also delivered results from the pivotal phase of the admIRE trial, where the VARIPULSE platform demonstrated 85% peak primary effectiveness with minimal adverse events, short PFA application times and low fluoroscopy exposure. In orthopedics, we received 510(k) FDA clearance for the clinical application of the VELYS Robotic-Assisted Solution in unicompartmental knee arthroplasty. This is designed for both medial and lateral procedures enabling surgeons to guide precise implant placement without a CT scan. In surgery, we launched the ECHELON 3000 in the U.S., which combines 3D stapling and gripping surface technology to enable greater staple line security. This has been shown to deliver 47% fewer leaks, reduce surgical risks and improve surgical outcomes. In surgical vision, we launched TECNIS Odyssey in the U.S., and head into a full market launch in the second-half of 2024. For the remainder of the year, we will continue to advance our electrophysiology and cardiovascular pipelines as we prepare for the anticipated U.S. approval of VARIPULSE, as well as the submission of Impella ECP for regulatory approval. Within robotic surgery, we are on track to submit an investigational device exemption to the FDA for OTTAVA in the second-half of the year. Before turning to cash flow and guidance, I wanted to provide an update on the talc litigation. As announced on May 1, the company has committed to pay ovarian claimants a present value of approximately $6.5 billion or $8 billion nominally over 25-years, resulting 99.75% of all pending talc lawsuits against the company and its affiliates in the United States. We are currently in a voting period for the plan, where for the first time, claimants are able to vote for themselves for or against the plan. The last day of voting is scheduled for July 26. It will then take a few weeks for the vote administrator to vet and tally the votes. Once that process concludes, we plan to make a public announcement on the next steps regarding a pre-packaged bankruptcy filing. Our confidence that we will reach the requisite 75% vote is bolstered by the continued support of council representing the vast majority of claimants with whom the plan was developed, as well as the announcement of support by additional prominent plaintiff law firms recently, including Ailstock, Keller Postman, and Miller. Additionally, in furtherance of our goal of achieving a comprehensive solution, we finalized the previously announced agreements reached with all states that advanced talc claims in the Imerys and Cyprus entities, owners of the mines that supplied talc to the company. In the second quarter, we continued to make progress with mesothelioma claimants with 95% of claimants now settled. Turning to cash and capital allocation. We ended the second quarter with approximately $25 billion of cash and marketable securities and approximately $41 billion of debt for a net debt position of $16 billion. Free cash flow year-to-date was approximately $7.5 billion, compared to $5.5 billion in the prior year period, which included cash flow from the Consumer Health business. During the quarter, we exited our retained stake in Kenvue, bringing the separation to a close. The net proceeds from the secondary offering were $3.6 billion. Our capital allocation priorities remain unchanged. We maintain a strong balance sheet, which continues to enable us to strategically invest in and grow our business, while returning capital to our shareholders. Innovation remains core to our strategy. In the second quarter, we invested more than $3.4 billion or 15.3% of sales in research and development. In terms of acquisitions and licensing, during the first half of 2024, Johnson & Johnson has deployed approximately $17 billion in strategic value creating inorganic growth opportunities. This includes Shockwave, Proteologix and the NM26 bispecific antibody transaction announced last week, as well as more than 20 other smaller complementary business development transactions. While we will always explore strategic deals of any size that can create value, we foresee modest tuck-in deals as the preferred route over the near-term. Now turning to our full-year 2024 guidance. Given the moving parts associated with the acquisitions this quarter, I'll start where I usually end with earnings per share. Before the impact of recent acquisitions, our outlook for adjusted operational EPS performance is once again being increased. As this schedule reflects, we are expecting a $0.05 per share increase in our operational performance. This would result in year-over-year EPS growth of 8.2% at the midpoint. To account for the completion of Shockwave, Proteologix, and the NM26 bispecific antibody transactions, and as previously disclosed, our adjusted operational EPS guidance now includes dilution of $0.68 per share. Combined, all of this yields an updated adjusted operational EPS guidance in the range of $10 to $10.10 per share. In addition to assist with your future models, these transactions are expected to have a smaller impact of $0.33 to adjusted operational EPS in 2025. Now to address all elements of P&L guidance for 2024. As a reminder, our sales guidance continues to exclude any impact from COVID-19 vaccine sales. We are increasing our operational sales guidance for the full-year by $500 million to reflect the completion of the Shockwave acquisition. We now expect growth in the range of 6.1% to 6.6% compared to 2023 with a midpoint of $89.4 billion or 6.4% at the midpoint. Excluding the impact from acquisitions and divestitures, we are maintaining our adjusted operational sales growth to the range of 5.5% to 6.0% compared to 2023. As you know, we don't speculate on future currency movements. We are utilizing a euro spot rate relative to the U.S. dollar of 1.08, consistent with last quarter. However, there have been notable strengthening of the U.S. dollar versus other currencies, specifically the Japanese yen and Chinese yuan. As a result, we estimate an incremental negative foreign currency impact of $500 million, resulting in a full-year impact of $1.2 billion. As such, combined with the Shockwave acquisition, we expect reported sales growth between 4.7% to 5.2%, compared to 2023 with a midpoint of $88.2 billion or 5% growth. Turning to the rest of the P&L. Based solely on the dilution from the transactions, we now anticipate our 2024 adjusted pre-tax operating margin to decline by 120 basis points, more than offsetting the previously communicated 50 basis point improvement. We projected net interest income between $300 million and $400 million, lower than previous guidance driven by interest expense associated with financing of our recent acquisitions. Other income is anticipated to be in the range of $1.5 billion to $1.7 billion, an increase versus previous guidance driven by year-to-date performance. Our effective tax rate is now expected to be between 17.5% and 18.5% for the full-year, much higher than 2023, largely due to the impact of OECD Pillar 2, as well as the non-deductible nature of the recently announced NM26 bispecific antibody acquisition. While we do not provide guidance by segment or on a quarterly basis, I'd like to provide some qualitative considerations to support your modeling. We continue to expect Innovative Medicine sales growth to be lower in the second half of the year compared to the first half, given the anticipated entry of STELARA biosimilars in Europe beginning the last week of July. This headwind will be partially offset by continued uptake from our recently launched products. While we had COVID-19 vaccine sales in the second quarter, we do not anticipate any future sales. Finally, it is worth noting that distribution rights for REMICADE and SIMPONI in Europe will be returned in the fourth quarter. In preparation for this transfer, we expect limited third-quarter sales in Europe. Turning to MedTech, as previously stated, we expect growth to accelerate back in line with our long-term expectations in the second-half of the year. This will be driven by recovery in contact lenses, evidenced by sequential monthly improvement within Q2. Further expansion into high-growth segments, including the integration of Shockwave and continued growth of new products and commercial execution across the portfolio. As you think about our adjusted operating margin, we continue to expect it to be higher in the first-half of the year, compared to the second-half. Again, this is due to the IP R&D charge for the NM26 bispecific antibody transaction in Q3 as well as the anticipated entry of STELARA biosimilars in Europe later this month. Lastly, as a reminder on share count, we only expect a partial benefit in the third quarter resulting from the share count reduction following the Kenvue exchange offer in August of 2023 with the fourth quarter being neutral. As we move forward, we remain focused on advancing our differentiated portfolio and achieving key clinical and regulatory milestones across Innovative Medicine and MedTech. We remain confident in our ability to deliver sustained growth and long-term value for patients, customers, and shareholders. With that, I am now pleased to turn the call over to Joaquin for concluding remarks before taking your questions.

Johnson & Johnson cash and marketable securities

cash and marketable securities $25 billion debt $41 billion net debt position $16 billion


Joe Wolk: Thank you, Jessica. In the third quarter, Johnson & Johnson delivered results that illustrate not only the breadth of the business, but our ability to consistently beat financial expectations. Innovative Medicine continued to build on strong first-half revenue momentum. We are advancing our pharmaceutical pipeline, achieving significant clinical and regulatory milestones across key therapeutic areas. Our MedTech business, with the addition of Shockwave, delivered operational growth of 6.4% in the quarter, but did experience headwinds in the Asia Pacific region. We continue to fortify our future advancing the OTTAVA robotic surgery system to IDE, expanding VELYS use and launching new intraocular lenses. Due to dynamics in the Asia Pacific region, specifically in China, we are taking a responsibly conservative approach by assuming no material improvement in that part of the business for the remainder of this year. And as such, we expect MedTech adjusted operational sales growth for the full year 2024 to be closer to 5% versus the 6% we referenced last quarter. The strength of a diversified business enables us to more than offset volatility in one part of our business, but yet be in a position to once again increase 2024 guidance for the enterprise. Before diving into the results, I'll take a moment to touch on some enterprise-wide updates from the quarter. We are making progress towards resolving talc litigation. Our pre-packaged bankruptcy plan received overwhelming support from the current claimants of roughly 83% as well as the future claimants representative. As announced last Thursday, the case will be heard in the Texas Bankruptcy Court. And while we remain committed to bringing this matter to a resolution, it would be premature to speculate on timing. In addition to the pipeline highlights Joaquin mentioned, there are some additional notable advancements throughout the quarter. In oncology, we received U.S. and EU regulatory approval for RYBREVANT in combination with chemotherapy as a second line treatment for adults with advanced EGFR-mutated non-small cell lung cancer. With FDA priority review underway for a subcutaneous formulation of RYBREVANT, along with data supporting a treatment regimen to reduce adverse events, we are building a best-in-class EGFR portfolio. We also presented Phase 1 data for RYBREVANT with chemotherapy in metastatic colorectal cancer patients, extending the asset's potential beyond lung cancer. In multiple myeloma, we advanced our leadership position with FDA approval and filing of two DARZALEX FASPRO quad-based regimens for newly diagnosed patients. With CARVYKTI, we announced three-year follow-up data showing significantly extended overall survival and gained approval for commercial production at our Ghent facility, further expanding supply capacity. Finally, in oncology, we added to the growing evidence base for our TARIS platform with positive Phase 2b data in patients with high-risk non-muscle invasive bladder cancer and positive interim to Phase 2 data in patients with muscle invasive bladder cancer. In neuroscience, we submitted to the U.S. and European regulatory bodies for what would be the first global approval of nipocalimab for the treatment of people living with generalized myasthenia gravis. For the remainder of the year, we expect approval of TREMFYA subcu for Crohn's disease and data readouts on JNJ-2113, our targeted oral peptide for psoriasis and ulcerative colitis, JNJ-4804, our co-antibody therapeutic for inflammatory bowel disease, aticaprant for adjunctive major depressive disorder and nipocalimab for rheumatoid arthritis. In MedTech, we completed enrollment of the Omny-IRE clinical trial to evaluate safety and effectiveness in mapping and treating symptomatic paroxysmal atrial fibrillation during standard ablation procedures. Also in Cardiovascular, we are preparing for the anticipated approval of VARIPULSE in the U.S. and the submission of Impella ECP for regulatory approval. In Orthopaedics, we launched several exciting new products in the U.S., including our VELYS SPINE robot and VOLT Plating System. The plentiful pipeline progress across our businesses will ensure continued success. Let's now turn to cash and capital allocation. Free cash flow year-to-date was approximately $14 billion compared to $12 billion last year, which included eight months contribution from the Consumer Health business. We ended the third quarter with $20 billion of cash and marketable securities and $36 billion of debt for a net debt position of approximately $16 billion. Our capital allocation priorities remain unchanged. Our strong balance sheet enables us to strategically invest to grow our business while simultaneously returning capital to our shareholders. Innovation remains core to our strategy. During the quarter, we invested nearly $5 billion in research and development. This is an increase over 2023 levels even after excluding acquired in-process R&D expense. Thus far in 2024, Johnson & Johnson has deployed approximately $18 billion for strategic acquisitions and licensing agreements, which includes the recent acquisition of V-Wave, another innovative treatment in heart failure, which closed last week. Turning to our full-year 2024 guidance. Excluding the impact from acquisitions and divestitures, we are increasing our adjusted operational sales guidance. We now expect growth in the range of 5.7% to 6.2% with a midpoint of 6%. We are also increasing operational sales growth by $200 million to a range of 6.3% to 6.8% with a midpoint of $89.6 billion or 6.6%. As you know, we don't speculate on future currency movements. For today's call, we are utilizing a euro spot rate relative to the U.S. dollar of $1.10, slightly above last quarter's guidance. This results in an estimated incremental positive foreign currency impact of $200 million, reducing our previous full-year negative impact to $1 billion. As such, we expect reported sales growth between 5.1% to 5.6% with a midpoint of $88.6 billion or 5.4%. Regarding the rest of the P&L, with the addition of the V-Wave transaction, we now anticipate our 2024 adjusted pre-tax operating margin to decline by approximately 200 basis points. Excluding the impact of asset acquisition accounting and related R&D investment, we would be on track to improve operating margins by 50 basis points, which is consistent with what we guided to at the beginning of the year. As we strive to advance and accelerate our pipeline, you can anticipate elevated levels of investment in the fourth quarter. Net interest income is now projected to be between $450 million and $550 million, $150 million greater than our previous guidance. Other income is anticipated to be in the range of $1.9 billion to $2.1 billion, an increase versus previous guidance, driven by the one-time monetization of royalty rights, which Jessica referenced, that will be utilized for that higher Q4 investment I referenced a moment ago. Our effective tax rate, consistent with previous guidance, is expected to be between 17.5% and 18.5% for the full year. Similar to last quarter, we have provided an EPS bridge to outline the impact from acquisition activity throughout the year. Before the impact of the V-Wave acquisition, our outlook for adjusted operational EPS performance is once again increasing. As the schedule reflects, we are expecting an incremental $0.10 per share increase on our operational performance for a total increase of $0.18 per share for the year. On this basis, when excluding acquisition activity throughout the year, EPS growth is 9.2%. To account for the completion of the V-Wave transaction, as previously disclosed, our adjusted operational EPS guidance now includes dilution of $0.24 per share in the fourth quarter and $0.06 per share in 2025. Combined, this yields an updated 2024 adjusted operational EPS guidance of $9.91 at the midpoint of the range, basically flat year-on-year despite absorbing approximately $0.92 of acquisition activity. While not predicting the impact of currency movements utilizing the recent exchange rates just referenced, our reported adjusted earnings per share for the year now estimates a full year positive impact of $0.02 per share. As such, we expect reported adjusted earnings per share of $9.93 at the midpoint. We are still finalizing our plans for next year, but let me provide you some preliminary qualitative commentary to inform your modeling for 2025. For Innovative Medicine, we remain very confident in our ability to deliver growth despite a significant LOE resulting in sales above the $57 billion commitment we stated in 2021. This will be driven by our end market brands and continued progress from our recently launched products, including TREMFYA in IBD and RYBREVANT in non-small cell lung cancer. Regarding the STELARA LOE, we are planning for biosimilar entries in the U.S. in January, assuming that HUMIRA's erosion curve is a relatively good proxy for your models. We continue to expect a negative impact associated with the Part D redesign. In our pipeline, we anticipate data readouts across all our priority platforms: anticipated approvals of TREMFYA subcu in Crohn's disease, RYBREVANT subcu for lung cancer and nipocalimab in generalized myasthenia gravis, as well as potential filings for TARIS in bladder cancer and aticaprant in major depressive disorder. As a reminder, TREMFYA, RYBREVANT and TARIS continue to be the three largest underappreciated assets in terms of our revenue projections versus what analysts are estimating for the back half of this decade. For MedTech, we continue to expect to deliver on our long-term objective identified at last year's Enterprise Business Review of growing operational sales in the upper end of the 2022 through 2027 weighted average market growth rate of 5% to 7%. We also expect continued adoption of newer products across all MedTech businesses, such as VARIPULSE in electrophysiology, VELYS enabling technology across Orthopaedics, Odyssey and PureSee in Surgical Vision and contributions from our Abiomed and Shockwave integration. Specific to volume-based pricing in China, we expect continued impacts from the rollout of the 2024 tenders in Orthopaedics sports and intraocular lenses and anticipate VBP to continue expanding across provinces and products. Moving to the rest of the P&L. When thinking about operating margin, there are pluses and minuses. Tailwinds include an anticipated reduction of acquired IPR&D expense year-over-year, continued focus on MedTech margin improvement and continued OpEx optimization benefits post the separation. Working against us is unfavorable product mix driven by STELARA biosimilar entrants and Part D redesign. With a brief look at your models last week, the consensus margin does not appear unreasonable, and we'll provide further clarity in January once we complete our 2025 plan. We do not expect to maintain the heightened levels of interest income due to a reduction in interest rates and impact from debt experienced in 2024 related to acquisition activity. Regarding other income and expense, we expect lower net other income due to the non-recurring nature of the monetization of royalty rights experienced in Q3, a lower benefit related to employee benefit programs based on discount rate assumptions, as well as income lost on the Kenvue dividend. Lastly, based on what we know today, under current tax law, we anticipate our 2025 tax rate to be slightly lower than our anticipated 2024 tax rate. To wrap up prior to Q&A, we are pleased with our underlying 2024 performance that simultaneously fortified a strong foundation for continued success heading into 2025. With that, I'll now turn it over to Kevin to open the call for your questions.

third quarter cash and marketable securities


Jessica Moore: Thanks, Joaquin. As a reminder on May 8, 2023, Kenvue, Inc., closed its initial public offering. Johnson & Johnson continues to own 89.6% of total outstanding shares of Kenvue’s common stock and remains the majority shareholder. Therefore, the following financial results continue to include the consumer health business with the 10.4% of consumer health's net earnings no longer attributed to Johnson & Johnson being adjusted for in other income and expense from the date of the IPO through the end of the quarter. Starting with Q2 2023 sales results. Worldwide sales were $25.5 billion for the second quarter of 2023, an increase of 6.3% versus the second quarter of 2022. Operational sales growth, which excludes the effect of translational currency, increased 7.5%, as currency had a negative impact of 1.2 points. In the U.S., sales increased 10.2%. In regions outside the U.S., our reported growth was 2.2%. Operational sales growth outside the U.S. was 4.7% with currency negatively impacting our reported OUS results by 2.5 points. Operational sales in Europe were negatively impacted by the COVID-19 vaccine and loss of exclusivity of ZYTIGA. Excluding the net impact of acquisitions and divestitures, adjusted operational sales growth with 6.2% worldwide, 8% in the U.S. and 4.4% outside the U.S. Turning now to earnings. For the quarter, net earnings were $5.1 billion and diluted earnings per share was $1.96 versus diluted earnings per share of $1.80 a year ago. Excluding after tax intangible asset amortization expense and special items for both periods, adjusted net earnings for the quarter were $7.4 billion and adjusted diluted earnings per share was $2.80, representing increases of 6.5% and 8.1%, respectively, compared to the second quarter of 2022. On an operational basis, adjusted diluted earnings per share increased 9.7%. I will now comment on business segment sales performance highlights. Unless otherwise stated, percentages quoted represent the operational sales change in comparison to the second quarter of 2022, and therefore, exclude the impact of currency translation. Beginning with the Pharmaceuticals segment. Worldwide Pharmaceutical sales of $13.7 billion increased 3.1%, with growth of 9.2% in the U.S. and a decline of 4% outside the U.S. Operational sales growth increased 3.8% as currency had a negative impact of 0.7 points. Excluding COVID-19 vaccine sales, Worldwide operational sales growth was 6.2% with growth of 9.9% in the U.S. and growth of 1.5% outside the U.S. Sales outside the U.S., excluding the COVID-19 vaccine, were negatively impacted by approximately 500 basis points, due to the loss of exclusivity of ZYTIGA in Europe. Pharmaceutical growth was driven by our key brands and continued uptake in our recently launched products with nine assets delivering double-digit growth. We continue to drive strong sales growth for both DARZALEX and ERLEADA with increases of 23.4% and 26.9%, respectively. STELARA grew 8%, driven by market growth and IBD share gains in the U.S., partially offset by unfavorable patient mix and increased rebates. TREMFYA grew 18.9%, driven by market growth and share gains in the U.S., partially offset by unfavorable patient mix. Growth of 16.5% in pulmonary hypertension was driven by favorable patient mix, share gains in the U.S. and market growth. Turning to newly launched products. We continue to make progress on our launch of CARVYKTI and continue to expand access and reimbursement for SPRAVATO. We are also encouraged by the early success of our launch of TECVAYLI, sales of which are included in other oncology. Total pharmaceutical sales growth was partially offset by the loss of exclusivity in REMICADE and ZYTIGA, along with a decrease in IMBRUVICA sales due to competitive pressures. IMBRUVICA maintains its market leadership position worldwide. I will now turn your attention to the MedTech segment. Worldwide MedTech sales of $7.8 billion increased 12.9% with growth of 14.6% in the U.S. and 11.3% outside of the U.S. Operational sales growth increased 14.7% as currency had a negative impact of 1.8 points. Abiomed contributed 4.8% to operational growth. Excluding the impact of acquisitions and divestitures, worldwide adjusted operational sales growth was 9.9%. Sales in the second quarter accelerated sequentially from Q1 for all MedTech businesses driven by global procedure growth, recovery in China, continued uptake of recently launched products and commercial execution, partially offsetting growth in the quarter was the impact of volume based procurement in China, as well as supply constraints. The Interventional Solutions franchise delivered operational growth of 56.9%, which includes $331 million related to Abiomed. Electrophysiology is a major contributor to the growth with a double-digit increase of 25.9%. This reflects strong growth in all regions, including Europe, driven by our comprehensive portfolio, including the most recently launched QDOT RS catheter. Orthopedics operational growth of 5.7%, reflects strong procedure recovery, success of recently launched products, such as the enhanced shorter portfolio, as well as global expansion of our digital solutions, such as VELYS Robotic assisted solution. Growth was partially offset by the impact of volume-based procurement in China and continued supply challenges primarily in hips. Operational growth of 8.4% and surgery was driven primarily by procedure recovery and strength of our biosurgery and wound closure portfolios. Growth was partially offset by the impacts of volume-based procurement in China and supply challenges. Global growth of 6.9% in vision was driven by price actions and contact lenses and other, as well as strength of new products, including ACUVUE OASYS 1-Day family of products and contact lenses and TECNIS Eyhance our monofocal intraocular lens and surgical vision. Growth of contact lenses was partially offset by strategic portfolio choices and supply challenges. Although these continue to improve. Moving to the Consumer Health segment. Worldwide Consumer Health sales of $4 billion increased 5.4% with growth of 6% in the U.S. and 5% outside the U.S. Operational sales growth increased 7.7% as currency had a negative impact of 2.3 points. Sales in the second quarter accelerated sequentially from Q1 for all consumer health franchises, primarily driven by strategic price increases and growth in OTC globally, due to strong pain performance, and cold, cough and flu season. Excluding the impact of strategic portfolio decisions and sales of personal care products in Russia, volume across all consumer franchises was relatively flat on strong price actions. For more detailed information, please visit investors.kenvue.com. Now turning to our consolidated statement of earnings for second quarter of 2023, I'd like to highlight a few noteworthy items that have changed compared to the same quarter of last year. Cost of products sold leveraged by 80 basis points, primarily driven by favorable patient mix and lower COVID-19 vaccine supply network related costs in the pharmaceutical business, partially offset by commodity inflation in the consumer and MedTech businesses. Selling, marketing and administrative margins deleveraged 20 basis points, driven by incremental costs to support the standalone consumer health business, partially offset by proactive management of costs. We continue to invest strategically in research and development at competitive levels, investing 15% of sales this quarter. The $3.8 billion invested was a 3.4% increase versus the prior year. The other income and expense line was income of $60 million in the second quarter of 2023, compared to an expense of $273 million in the second quarter of 2022. This was primarily driven by favorable litigation settlements, lower litigation expense, and lower unrealized losses on securities, partially offset by higher COVID-19 vaccine manufacturing exit related cost. And as previously mentioned, the 10.4% of consumer health earnings that are no longer attributable to Johnson & Johnson, which resulted in a $37 million reduction in consolidated earnings. Regarding taxes in the quarter, our effective tax rate was 23.9% versus 17.6% in the same period last year. This increase was primarily driven by 2023 tax cost incurred as part of the planned separation of the consumer health business, due to the internal reorganization of certain international subsidiaries. Excluding special items the effective tax rate was 16.6% versus 15.4% in the same period last year. I encourage you to review our upcoming second quarter 10-Q filing for additional details on specific tax matters. Lastly, I'll direct your attention to the box section of the slide, where we have also provided our income before tax, net earnings and earnings per share adjusted to exclude the impact of intangible amortization expense and special items. Now let's look at adjusted income before tax by segment. In the second quarter of 2023, our adjusted income before tax for the enterprise as a percentage of sales increased from 34% to 34.6%, primarily driven by favorable product and patient mix, partially offset by unfavorable segment mix and commodity inflation. Pharmaceutical margins improved from 42% to 42.7%, primarily driven by favorable patient mix, sales, marketing and administrative expense leverage, and R&D portfolio prioritization, partially offset by higher milestone payments. MedTech margins improved from 26.5% to 28.6%, driven by favorable intellectual property related litigation settlements and cost management initiatives, partially offset by commodity inflation. Finally, consumer health margins declined from 25.9% to 23.5%, due to incremental costs to support the standalone consumer health business, foreign exchange impacts, and commodity inflation, partially offset by supply chain efficiencies. It is important to highlight that the adjusted income before tax for the consumer health business as reported by Johnson & Johnson defers from the financial results reported by Kenvue Inc. this morning. The difference is primarily driven by incremental costs required to run Kenvue as an independent company. Additional differences also exist on an after tax basis, due to the application of different tax rates. This concludes the sales and earnings portion of the Johnson & Johnson second quarter results. I'm now pleased to turn the call over to Joe Wolk. Joe?


Jessica Moore: Thanks, Joaquin. Unless otherwise stated, the financial results and guidance highlighted reflects the continuing operations of Johnson & Johnson. We will report the consumer health financial results as discontinued operations. Furthermore, the percentages quoted represent operational results and therefore, exclude the impact of currency translation. Starting with Q4 2023 sales results. Worldwide sales were $21.4 billion for the fourth quarter of 2023. Sales increased 7.2%, with 11% in the U.S. and 2.7% outside of the U.S. Excluding the net impact of acquisitions and divestitures, adjusted operational sales growth was 5.7% worldwide, 8.8% in the U.S. and 2.1% outside the U.S. It is important to note that sales in Europe were negatively impacted by the COVID-19 vaccine and loss of exclusivity of ZYTIGA by approximately 1,500 basis points operationally. Turning now to earnings. For the quarter, net earnings were $4.1 billion, and diluted earnings per share was $1.70 versus diluted earnings per share of $1.22 a year ago. Excluding after-tax intangible asset amortization expense and special items for both periods, adjusted net earnings for the quarter were $5.6 billion and the diluted earnings per share was $2.29, representing increases of 2.4% and 11.7%, respectively, compared to the fourth quarter of 2022. On an operational basis, adjusted diluted earnings per share increased 11.2%. For the full year 2023, sales were $85.2 billion. Sales grew 7.4%, with 10.6% in the U.S. and 3.8% outside of the U.S. Excluding the net impact of acquisitions and divestitures, adjusted operational sales growth was 5.9% worldwide, 8.2% in the U.S. and 3.4% outside the U.S. Sales in Europe were negatively impacted by the COVID-19 vaccine and loss of exclusivity of ZYTIGA by approximately 1,000 basis points operationally. Net earnings for the full year 2023 were $13.3 billion and diluted earnings per share was $5.20 versus diluted earnings per share of $6.14 a year ago. Full year 2023 adjusted net earnings were $25.4 billion, and adjusted diluted earnings per share was $9.92, representing increases of 6.8% and 11.1%, respectively, versus full year 2022. On an operational basis, adjusted diluted earnings per share increased by 10.8%. I will now comment on business sales performance in the quarter. Beginning with Innovative Medicine. Worldwide Innovative Medicine sales of $13.7 billion increased 4% with growth of 9.5% in the U.S. and a decline of 3.1% outside of the U.S. Excluding COVID-19 vaccine sales, worldwide and U.S. sales growth was 9.5%, and growth outside of the U.S. was 9.4%. Sales outside the U.S., excluding the COVID-19 vaccine were negatively impacted by approximately 120 basis points due to the loss of exclusivity of ZYTIGA in Europe. Innovative Medicine growth was driven by our key brands and continued uptake from recently launched products, with nine assets delivering double-digit growth. We continue to drive strong sales growth for both DARZALEX and ERLEADA, with increases of 22.2% and 19%, respectively. Within immunology, we saw sales growth in both STELARA and TREMFYA, with increases of 14.5% and 20.5%, respectively. This growth was driven by market growth and share gains as well as favorable patient mix in TREMFYA. Growth of 17.4% in pulmonary hypertension was driven by favorable patient mix, share gains and market growth. Turning to newly launched products. We continue to make progress on our launches of CARVYKTI and SPRAVATO. We are also encouraged by the early success of our launches of TECVAYLI and TALVEY, sales of which are driving the growth in other Oncology. As a reminder, we expect to begin disclosing TECVAYLI sales in Q1 2024. Total Innovative Medicine sales growth was partially offset by unfavorable patient mix in XARELTO, a decrease in IMBRUVICA sales due to competitive pressures and a loss of exclusivity of ZYTIGA, REMICADE and PREZISTA. I'll now turn your attention to MedTech. Worldwide MedTech sales of $7.7 billion increased 13.4% with Abiomed contributing 4.5% to growth. Growth in the U.S. was 14.1% and 12.8% outside of the U.S. Excluding the impact of acquisitions and divestitures, worldwide adjusted operational sales growth was 9.1%. MedTech was negatively impacted by international sanctions in Russia worth approximately 50 basis points, primarily in Advanced Surgery and Vision. Electrophysiology delivered double-digit growth of 25.2% with strong growth in all regions, including Europe. This growth was driven by our global market leading portfolio, including the most recently launched QDOT RF ablation and OCTARAY catheters. Abiomed contributed $340 million in sales within the quarter driven by continued strong adoption of Impella 5.5 technology. Growth of 6.4% in surgery was driven primarily by procedure recovery and strength of our biosurgery and wound closure portfolios. Growth was partially offset by volume based procurement in China, primarily in Endocutters. Orthopaedics growth of 5% reflects procedure growth, success of recently launched products such as the global expansion of our VELYS digital solutions and expansion in ambulatory surgical centers, as well as lapping of prior year China’s VBP price concessions in Spine. Growth of 6.6% in Vision was driven by price actions and contact lenses, as well as strength of new products including ACUVUE OASYS 1-Day family of products and contact lenses and TECNIS EYHANCE, our monofocal interocular lens and surgical vision. Growth of contact lenses was partially offset by U.S. stocking dynamics. Global Vision growth was negatively impacted by 140 basis points due to the Blink divestiture in Q3. Now turning to our consolidated statement of earnings for the fourth quarter of 2023. I'd like to highlight a few noteworthy items that have changed compared to the same quarter of last year. Cost of products sold margin deleveraged by 130 basis points due to commodity inflation and unfavorable product mix in MedTech, partially offset by favorable patient mix and lower COVID-19 vaccine supply network related exit cost in Innovative Medicine. We continue to invest strategically in research and development at competitive levels, investing $4.5 billion or 20.9% of sales this quarter. We invested $3.4 billion or 24.5% of sales in Innovative Medicine with the increase in investment being driven by higher milestones, partially offset by portfolio prioritization. In MedTech, R&D investment was $1.1 billion or 14.6% of sales with the increase in investment primarily driven by the Laminar acquisition. Interest income was $212 million in the fourth quarter of 2023 as compared to $77 million of income in the fourth quarter of 2022. The increase in income was driven by higher interest rates earned on cash balances and a lower average debt balance. The other income and expense line was income of $421 million in the fourth quarter of 2023 compared to an expense of $795 million in the fourth quarter of 2022. This was primarily driven by higher unrealized gains on securities and lower (ph) COVID-19 vaccine-related exit costs. Regarding taxes in the quarter, our effective tax rate was 14.4% versus 16% in the same period last year. This decrease was primarily driven by the net decrease of tax liabilities, including the settlement of the 2013 through 2016 U.S. tax audit. Excluding special items, the effective tax rate was 10.8% versus 16.2% in the same period last year. I encourage you to review our upcoming 2023 10-K filing for additional details on specific tax-related matters. Lastly, I will direct your attention to the box section of the slide, where we have also provided our income before tax, net earnings and earnings per share adjusted to exclude the impact of intangible amortization expense and special items. Now let's look at adjusted income before tax by segment. In the fourth quarter of 2023, our adjusted income before tax for the enterprise as a percentage of sales decreased from 32.5% to 29.2%. Innovative Medicine margins declined from 37.7% to 37.4%, primarily driven by higher R&D milestones, partially offset by favorable patient mix and leveraging and selling and marketing expense. MedTech margins declined from 24.5% to 15.5% primarily driven by in-process research and development expense from the Laminar acquisition, commodity inflation and unfavorable product mix, partially offset by selling and marketing expense leverage. This concludes the sale and earnings portion of the call. I'm now pleased to turn it over to Joe.


Jessica Moore: Hello everyone. This is Jessica Moore, Vice President of Investor Relations for Johnson & Johnson. Welcome to our company's review of the first quarter business results and our full year financial outlook for 2024. A few logistics before we get into the details. As a reminder you can find additional materials including today’s presentation and associated schedules on the Investor Relations section of the Johnson & Johnson website at investor.jnj.com. Please note that this presentation contains forward-looking statements regarding, among other things, the company's future operating and financial performance, market position and business strategy. You are cautioned not to rely on these forward-looking statements, which are based on the current expectations of future events using the information available as of the date of this recording, and are subject to certain risk and uncertainties that may cause the company's actual results to differ materially from those projected. A description of these risks, uncertainties and other factors can be found in our SEC filings, including our 2023 Form 10-K, which is available at investor.jnj.com and on the SECs website. Additionally, several of the products and compounds discussed today are being developed in collaboration with strategic partners or licensed from other companies. This slide acknowledges those relationships. Moving to today's agenda I will start by reviewing the first quarter sales and P&L results for the corporation as well as highlights related to our two businesses. Joe Wolk our CFO will then provide additional business and financial commentary before sharing an overview of our cash position, capital allocation priorities, and guidance for 2024. The remaining time will be available for your questions. Joaquin Duato our Chairman and CEO as well as Jennifer Taubert, John Reed, and Tim Schmid, our Innovative Medicine and MedTech leaders will be joining us for Q&A. To ensure we provide enough time to address your questions, we anticipate the webcast will last approximately 60 minutes. Unless otherwise stated the financial results and guidance highlighted today reflect the continuing operations of Johnson & Johnson. Furthermore, the percentages quoted represent operational results and therefore exclude the impact of currency translation. Turning to our first quarter sales results. Worldwide sales were $21.4 billion for the first quarter of 2024. Sales increased 3.9% with growth of 7.8% in the U.S. and a decline of 0.3% outside of the U.S. Excluding the impact of the COVID-19 vaccine, operational sales growth was 7.6% worldwide and 7.4% outside of the U.S. Sales growth in Europe excluding the COVID-19 vaccine was 6%. Turning now to earnings. For the quarter net earnings were $5.4 billion and diluted earnings per share was $2.20 versus basic loss per share of $0.19 a year ago. Excluding after tax intangible asset amortization expense and special items for both periods, adjusted net earnings for the quarter were $6.6 billion, and adjusted diluted earnings per share was $2.71, representing increases of 3.8% and 12.4%, respectively compared to the first quarter of 2023. On an operational basis, adjusted diluted earnings per share increased 12.8%. I will now comment on business sales performance in the quarter. Beginning with Innovative Medicine, worldwide Innovative Medicine sales of $13.6 billion increased 2.5%, with growth of 8.4% in the U.S. and a decline of 4% outside of the U.S. Excluding the impact of the COVID-19 vaccine, operational sales growth was 8.3%, both worldwide and outside of the U.S. Innovative Medicine growth was driven by our key brands and continued uptake from recently launched products, with nine assets delivering double-digit growth. We continued to drive strong sales growth across our multiple myeloma portfolio. DARZALEX growth was 21%, primarily driven by share gains of six points across all lines of therapy and ten points in the front line setting. As of this quarter, we are now disclosing TECVAYLI sales, which were previously reported in other oncology. Sales achieved $133 million in the quarter, compared to $63 million in the first quarter of last year, reflecting a strong launch in the relapsed refractory setting. CARVYKTI achieved sales of $157 million, compared to $72 million in the first quarter of last year, driven by continued capacity expansion, manufacturing efficiencies, and strong demand. While sequential growth was roughly flat due to phasing, we continued to anticipate quarter-over-quarter growth with acceleration in the back half of the year. Other oncology growth was driven by continuing strong uptake of TALVEY, our GPRC5D bispecific, and RYBREVANT our bispecific antibody for non-small cell lung cancer. Also in oncology, ERLEADA continues to deliver strong growth of 28.4%, primarily driven by share gains. Growth of 22.4% in pulmonary hypertension was driven by favorable patient mix, share gains, and market growth for both OPSUMIT and UPTRAVI. As a reminder, favorable patient mix was a driver in Q2 2023 through Q1 2024. Therefore, while we still anticipate growth, we expect to lap this dynamic beginning in Q2 2024. Within immunology, we saw sales growth in TREMFYA of 27.6%, driven by market growth and share gains. STELARA growth of 1.1% was driven by market growth and share gains in IBD, partially offset by unfavorable patient mix in the U.S. and as expected, share loss in PSO and PSA. We anticipate continued volume growth largely offset by price declines as we move towards biosimilar entry. In neuroscience SPRAVATO growth of 72% continues to be driven by share gains and additional market launches. Total Innovative Medicine sales growth was partially offset by unfavorable patient mix in XARELTO, which we anticipate continuing throughout the year, as well as a decrease in IMBRUVICA due to competitive pressures, partially offset by stocking dynamics in the U.S. Finally, it is worth noting distribution rights for REMICADE and SIMPONI in Europe will be returned in Q4. I'll now turn your attention to MedTech. Worldwide Med1ech sales of $7.8 billion increased 6.3%, with growth in the U.S. of 6.6% and 6.1% outside of the U.S. In the quarter, worldwide MedTech growth was negatively impacted by approximately 80 basis points due to fewer selling days, disproportionately impacting orthopedics. In cardiovascular previously referred to as Interventional Solutions, electrophysiology delivered double-digit growth of 25.9%, with strong growth in all regions. Performance was driven by global procedure growth, new product uptake, commercial execution, and a onetime inventory build in Asia-Pacific, impacting worldwide growth by approximately 370 basis points. In addition, Abiomed delivered growth of 15%, driven by continued strong adoption of Impella 5.5 and Impella RP technology. Orthopedics growth of 4.8% includes a onetime revenue recognition timing change related to certain products across all platforms in the U.S. positively impacting worldwide growth by approximately 300 basis points. As a reminder, orthopedics was over indexed by the impact of reduced selling days in the quarter. Strong performance in hips and knees was driven by procedure recovery, growth of new products, and commercial execution. While trauma and spine were negatively impacted by competitive pressures and core trauma was further impacted by weather related softness in the U.S. Growth of 1.9% in surgery was driven primarily by procedure recovery and strength of our bio surgery and wound closure portfolios, partially offset by competitive pressures in China volume based procurement and energy and endo cutters. Contact lenses declined 2.3%, driven by U.S. stocking dynamics, partially offset by strong performance in ACUVUE OASYS 1-day family of products. Worldwide growth was negatively impacted by 120 basis points due to the Blink divestiture in Q3 2023. Surgical Vision grew 1.1%, driven by CNIS EYHANCE, a monofocal intraocular lens partially offset by China's VBP. Now turning to our consolidated statement of earnings for the first quarter of 2024. I'd like to highlight a few noteworthy items that have changed compared to the same quarter of last year. Cost of product sold margin leveraged by 160 basis points, primarily driven by lower COVID-19 supply network related exit cost. Selling, marketing, and administrative margins deleveraged 110 basis points, driven primarily by timing of marketing investment in the Innovative Medicine business. We continued to invest strategically in research and development at competitive levels investing $3.5 billion, or 16.6% of sales this quarter. We invested $2.9 billion, or 21.4% of sales in Innovative Medicine, with the increase in investment being driven by continued pipeline progression. In MedTech, R&D investment was $0.6 billion, or 8.3% of sales, a slight decrease driven by phasing. Interest income was $209 million in the first quarter of 2024, as compared to $14 million of expense in the first quarter of 2023. The increase in income was driven by a lower average debt balance and higher interest rates earned on cash balances. Other income and expense was income of $322 million in the first quarter of 2024, compared to an expense of $6.9 billion in the first quarter of 2023. This change was primarily due to the $6.9 billion charge related to the talc settlement proposal recorded in the first quarter of 2023. Regarding taxes in the quarter, our effective tax rate was 16.9% versus 61.8% in the same period last year, which was primarily driven by the tax benefit on the talc settlement proposal recorded in the first quarter of 2023. Excluding special items, the effective tax rate was 16.5% versus 15.9% in the same period last year. I encourage you to review our upcoming first quarter 10-Q filing for additional details on specific tax related matters. Lastly, I'll direct your attention to the box section of the slide, where we have also provided our income before tax, net earnings, and earnings per share adjusted to exclude the impact of intangible amortization expense and special items. Now let's look at adjusted income before tax by segment. In the first quarter of 2024 our adjusted income before tax for the enterprise, as a percentage of sales increased from 36.1% to 36.8%, primarily driven by an increase in non-allocated interest income with both Innovative Medicine and MedTech margins remaining relatively flat year-over-year. When comparing against the fourth quarter and full year 2023, Innovative Medicine and MedTech adjusted income before tax margins have improved. This concludes the sales and earnings portion of the call. I am now pleased to turn it over to Joe.

effective tax rate first quarter of 2024


free cash flow $5.4 billion second quarter


Joe Wolk: Thank you, Jessica, and thanks everyone for joining us today. This quarter's call marks a new era for Johnson & Johnson with a sharpened focus on Innovative Medicine and MedTech. What has remained consistent is our Credo and our commitment to patients. We are privileged to build upon our 137-year legacy of tackling the world's most complex healthcare challenges and helping patients with serious unmet health needs around the world. As we look forward, we are well positioned to grow our business and innovate across the spectrum of healthcare. We are excited about what's ahead and what we can achieve in the future. Before we dive into our performance, I want to briefly touch upon other items important to our business. The first is a brief recap of the Kenvue separation, which was formally completed during the quarter. The transaction was executed within our targeted timeframe and under budget, while generating significant cash and value for our shareholders. Through the separation, we raised $13.2 billion in cash proceeds through the Kenvue Debt Offering and IPO. We reduced Johnson & Johnson's outstanding share count by 191 million shares, or approximately 7%, without the use of cash and in a tax-free manner. We maintained our current quarterly dividend per share and we retained approximately 180 million shares of Kenvue stock that provides cash proceeds for future flexibility. We will see the full impact to EPS of the share reduction in 2024. Another item warranting comment is the Inflation Reduction Act. We continue to believe the IRA's price setting provisions are damaging to innovation and will prevent the delivery of transformative therapies and cures to patients. As we await adjudication of legal proceedings initiated by of us and others, we did submit all requested information in compliance with CMS' drug price setting scheme to continue supporting patients' access to our medicines that help them stay healthy and live longer. Moving to segment highlights in the quarter, as Jessica previously shared, our teams delivered strong results in the third quarter, while continuing to advance our pipeline to enhance future growth. Within the innovative medicine business, two important regulatory milestones were announced during the quarter. Specifically, we received European Commission approval for a reduced biweekly dosing frequency for TECVAYLI for eligible patients with relapsed and refractory multiple myeloma. And U.S. FDA and European Commission approval of TALVEY, a first-in-class, bi-specific therapy for the treatment of patients with heavily pre-treated multiple myeloma. Regarding clinical data, we are excited to have an unprecedented seven late breaking abstracts, including three featured in the Presidential Symposium being presented at the European Society of Medical Oncology meeting this weekend. Highlights will include the results from all three Phase III studies of RYBREVANT in lung cancer, including MARIPOSA, MARIPOSA II, and PAPILLON. Additionally, updated data from the Sunrise 1 study of TAR-200 in non-muscle invasive bladder cancer will be shared, as well as the first ever data of TAR-210 in patients with FGFR mutations. We also look forward to presenting Phase II data for Nipocalimab and rheumatoid arthritis at the American College of Rheumatology Annual Meeting in November, and have already launched a Phase II combination study NRA. Lastly, we plan to initiate multiple clinical development programs for our targeted oral peptide JNJ-2113. This includes the initiation of the ANTHEM Phase 2B study in ulcerative colitis, which will begin this month, and the Phase III clinical program titled Iconic for adults with moderate to severe plaque psoriasis expected to begin in November. Moving to MedTech, notable highlights in the quarter include significant advancements in electrophysiology across our cardiac ablation platform. We received FDA clearance from multiple atrial fibrillation ablation products in our portfolio to be used in a workflow without fluoroscopy. This FDA indication is unique to Johnson & Johnson and is a significant advancement where caregivers and patients are not exposed to harmful fluoroscopy-related radiation during their cardiac ablation procedures. It also allows for the removal of heavy lead protective equipment that may lead to orthopedic complications for care teams. In pulse field ablation, we have completed our clinical trial in Europe and submitted for CE mark for our VARIPULSE Catheter. We expect the completion for our U.S. VARIPULSE study to occur in the fourth quarter. We are also simultaneously advancing clinical studies for two additional pulse field ablation catheters, the STSF dual energy catheter, capable of delivering both PF and RF energy through the same device, and Omnipulse, a large tip focal catheter. Beyond electrophysiology, we have completed enrollment in the Abiomed Impella ECP clinical study, a landmark pivotal trial designed to demonstrate the safety and efficacy of the Impella ECP during high-risk PCI procedures. Impella ECP is the world's smallest heart pump and the only heart pump compatible with small bore access and closure techniques. While not a clinical advancement, we have also taken steps in the quarter to improve MedTech's future margin profile, implementing a restructuring program designed to simplify and focus the operations of our orthopedic business. As part of this two-year program, we expect to exit certain markets and product lines across that business. We anticipate some short-term modest revenue disruption in orthopedics of approximately $250 million in total over the next two years, given the market and product line exits, but believe these actions will improve our ability to meet demand, resulting in accelerated growth and enhanced profitability. The program is expected to be completed by the end of 2025, with total program costs estimated to be between $700 million and $800 million. Let's now turn to cash and capital allocation. We ended the third quarter with approximately $24 billion of cash and marketable securities and approximately $30 billion of debt for a net debt position of $6 billion. Free cash flow year-to-date through the third quarter was approximately $12 billion, up from the $5 billion we reported year-to-date in the second quarter of 2023. Our capital allocation priorities remain unchanged. We will continue to execute a strategic and disciplined approach utilizing our strong credit profile and robust free cash flow generation to prioritize continued investment in our business, increasing dividends on an annual basis, executing strategic business development initiatives for inorganic growth, and executing share repurchases when appropriate. Moving onto our 2023 guidance update. Based on the strong results delivered in the quarter and the first nine months of this year, balanced with planned investments in the fourth quarter, we are raising the ranges for full-year sales and EPS guidance. We now expect operational sales growth for the full-year 2023 to be in the range of 8.5% to 9.0%, or up $600 million at the midpoint in the range of $84.4 billion to $84.8 billion on a constant currency basis and adjusted operational sales growth in the range of 7.2% to 7.7%. Just a reminder, our sales guidance continues to exclude any COVID-19 vaccine revenue. While we do not speculate on future currency movements utilizing the euro spot rate as of last week at 1.06, we now anticipate an incremental negative currency impact of $400 million resulting in a full-year impact of negative 1% or $800 million. Looking across the P&L, adjusted pre-tax operating margin is still expected to improve by approximately 50 basis points versus prior year, driven by stronger margin profile and business mix. Net other income is also being maintained, ranging from $1.7 billion to $1.9 billion. Due to higher interest rates earned on our cash, we now expect net interest income in the range of $300 million to $400 million. And finally, based on current tax law, our estimate for the effective tax rate for 2023 will be between 15.0% and 15.5%. These revised estimates translate to an increase in our adjusted operational earnings per share guidance by $0.10 at the midpoint. Our new range is $10.02 to $10.08 or 12.5% growth at the midpoint, and adjusted reported earnings per share in the range of $10.07 to $10.13 or 13% growth at the midpoint. Since January, We've been able to increase our guidance throughout the year for a cumulative impact of $3 billion on operational sales and $0.25 on adjusted operational earnings per share, which includes absorbing $0.10 for our licensing deal with Cellular Biomedicine Group announced in the second quarter of 2023. Now I appreciate that many of you are turning your attention to 2024, and our teams are actively finalizing our plans for next year. With that context, allow me to provide some preliminary perspectives for you to consider. For innovative medicine, we remain confident in our ability to deliver growth from key brands and anticipate continued progress from our newly launched products, all while advancing our robust pipeline with many exciting data readouts, filings, and approvals ahead of us. This includes data presentations and regulatory submissions for TREMFYA in IBD, presenting data from our Phase III study of Nipocalimab in Myasthenia Gravis, and readouts from two Phase III or ELITA trials in early-stage prostate cancer. We do not expect the entry of STELARA Biosimilars in the United States during 2024. However, as a reminder STELARA does have a composition of matter patent expiry in mid-2024 in Europe. For MedTech, we expect our commercial capabilities and continued adoption of recently launched products across all MedTech businesses will continue to drive our growth and improve competitiveness, while continuing to advance our pipeline programs, including innovation in pulse field ablation, Abiomed, and surgical robotics. We expect procedures in 2024 to remain consistent with elevated 2023 levels. With respect to tax, as you may be aware, the European Union member states are in the process of enacting the EU's Pillar 2 Directive, which generally provides for a 15% minimum tax rate as established by the OECD Pillar 2 framework. The first EU effective date for certain aspects of the law is January 1st, 2024. As a result, we currently estimate it up to a 1% tax rate increase in 2024. In addition, the U.S. Treasury's current perspective on Pillar 2 will be harmful as it relates to the treatment of U.S. incentives for innovation and will result in U.S.-based multinational companies paying more tax revenue to foreign governments. Regarding share count given the Kenvue separation, the full benefit of the approximately 191 million net share reduction in Johnson & Johnson shares outstanding from the exchange offer will be reflected in our 2024 financials. And finally, while we don't speculate on future currency impact, utilizing the current euro spot rate would yield an approximate $0.15 negative currency impact on 2024 full-year adjusted earnings per share. We are pleased with our strong performance during the first nine months of this year and have positive momentum as we move into 2024. We look forward to sharing more about the strength of our business, promise of our innovative medicine and MedTech pipelines, and the long-term strategy of Johnson & Johnson at our upcoming Enterprise Business Review on December 5th at the New York Stock Exchange. More information, including an overview of the day's schedule, will be shared shortly. We hope you will be able to join us either in person or on the available webcast. I want to conclude my remarks by thanking our teams around the world for their continued hard work and unwavering commitment to excellence on behalf of our patients. We are confident that our strategy will position us to deliver long-term growth and create significant value for our shareholders. With that, it's my pleasure to turn to Kevin and begin the Q&A portion of the call.

Free cash flow year-to-date third quarter