Johnson & Johnson

Good morning and welcome to Johnson & Johnson's first quarter 2019 earnings conference call. All participants will be in listen-only mode until the question and answer session of the conference. This call is being recorded. If anyone has any objections, you may disconnect at this time. If you experience technical difficulties during the conference, you may press star zero to reach the operator. I would now like to turn the conference over to Johnson & Johnson. You may begin.

Good morning. This is Chris DeLorfis, Vice President of Investor Relations for Johnson & Johnson. Welcome to our company's review of business results for the first quarter of 2019. Joining me on today's call is Joe Wolk, Executive Vice President, Chief Financial Officer. Additionally, I'm pleased to be joined by the leaders of our business segments who will participate in our Q&A session. Joining Joe and I here in New Brunswick are Ashley McAvoy, Executive Vice President, Worldwide Chairman, Medical Devices. Thibaut Mangon, Executive Vice President, Worldwide Chairman, Consumer. Jennifer Talbert, Executive Vice President, Worldwide Chairman, Pharmaceuticals. A few logistics before we get into the details. This review is being made available via webcast, accessible through the investor relations section of the Johnson & Johnson website at investor.jnj.com, where you can also find additional materials, including today's presentation and associated schedules. Please note that today's presentation includes forward-looking statements. We encourage you to review this cautionary statement regarding such statements included in today's presentation, as well as the company's Form 10-K, which identifies certain factors that may cause the company's actual results to differ materially from those projected. Our SEC filings, including our 2018 Form 10-K, along with reconciliations of the non-GAAP financial measures utilized for today's discussion to the most comparable GAAP measures, are also available at investor.jnj.com. 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. We have made some enhancements to the earnings materials we posted on our website today, including an updated press release format and some additional information in the presentation that we think you will find helpful. These enhanced materials will also allow us to streamline and focus our comments on today's call with the goal of providing more time for engagement with management during the Q&A session. We hope you find these changes useful, and as always, we welcome any feedback so we can continue to provide you with the information in the most effective manner. Regarding today's agenda, Joe will first provide some perspective on our overall results for the first quarter. I will then review the sales and P&L results for the corporation and the three business segments. Joe will conclude by providing insights on our cash position, capital allocation deployment, and our guidance for 2019, along with some considerations for the second quarter. The remaining time will be available for your questions, and we anticipate the webcast will last about 75 minutes. I'm now pleased to turn the call over to Joe Wolk.

Great, Chris. Good morning, everyone. Thank you for your interest in Johnson & Johnson. We are very pleased with our strong start to 2019 and are confident in the health of our business. As you've heard us consistently say, our goal is to deliver solid financial and operational performance while also advancing innovation that will have an enduring impact on patients, caregivers, and consumers. During the first quarter, we demonstrated our ability to consistently deliver growth while also executing on our long-term strategies. A few high-level comments about each of our segments prior to CRISP providing additional franchise or product-level sales insights. Our pharmaceutical business delivered strong growth across our immunology, oncology, neuroscience, and pulmonary hypertension portfolios. The ongoing investments in our pipeline, coupled with our strong commercial execution around new product launches and line extensions, enable us to more than offset erosion from biosimilars and generics. As you've heard us say in previous quarters, our global pharmaceutical growth continues to be driven by volume rather than price, and we did experience another quarter of negative price. We recently issued our 2018 Janssen U.S. Transparency Report, which is now available on our website. We led the industry by publishing this annual report three years ago, and we're proud to contribute to the information that healthcare providers, legislators, and the general public can use to facilitate meaningful dialogue on the topic of healthcare costs. In our consumer segment, we remain focused on competitive growth. While we observed some broad market softness during the quarter, we are encouraged by our ability to garner share in key areas like OTC, where Tylenol regained its status as the number one brand of analgesics, as well as Neutrogena and OGX within beauty. In the medical device segment, we continue to make progress on our stated goal of improved performance while continuing to enhance market-leading positions in many platforms. Additionally, in support of our long-term objectives for the segment, we are very excited about our recent acquisition of RS Health, which will enhance our digital surgery capabilities. The strength of our first quarter results reinforce the confidence we have in our broad-based business. We continue to manage our portfolio with discipline and make investments across the enterprise that position us well to achieve long-term, sustainable growth across three vital aspects of healthcare. I'll now turn the call back to Chris to discuss first quarter sales drivers as well as highlight notable line items in our P&L before I return with some comments regarding our cash position and guidance.