Johnson & Johnson

Good morning. Welcome to Johnson & Johnson's fourth 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 call 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 fourth quarter and full year of 2019. Joining me on today's call are Alex Gorski, Chairman of the Board of Directors and Chief Executive Officer, and Joe Wolk, Executive Vice President, Chief Financial Officer. 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 and our most recent 10-Q, 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 license from other companies. This slide acknowledges those relationships. Moving to today's agenda, I will review the fourth quarter sales and P&L results for the corporation and the three business segments. Alex will then provide some perspective on our overall results and business highlights for the year. Joe will conclude by providing insights about our cash position, capital allocation deployment, and our guidance for 2020. The remaining time will be available for your questions. We anticipate the webcast will last up to 90 minutes. Worldwide sales were $20.7 billion for the fourth quarter of 2019, an increase of 1.7% versus the fourth quarter of 2018. Operational sales growth, which excludes the effect of translational currency, increased 2.6% as currency had a negative impact of 0.9 points. In the U.S., sales increased 1.4%. In regions outside the U.S., our reported growth was 2.1%. Operational sales growth outside the U.S. was 4%, with currency negatively impacting our reported OUS results by 1.9 points. Excluding the net impact of acquisitions and divestitures, adjusted operational sales growth was 3.4% worldwide, 2.7% in the U.S., and 4.1% outside the U.S. For the full year of 2019, consolidated sales were $82.1 billion, an increase of 0.6% compared to the full year of 2018. Operationally, full-year sales grew 2.8%, with currency having a negative impact of 2.2 points. Sales growth in the U.S. was 0.5%. In regions outside the U.S., our reported growth was 0.7%. Operational sales growth outside the U.S. increased by 5.3%, with currency negatively impacting our reported OUS results by 4.6 points. Excluding the net impact of acquisitions and divestitures, adjusted operational sales growth was 4.5% worldwide, 2.3% in the U.S., and 6.7% outside the U.S. Turning now to earnings. For the quarter, net earnings were $4 billion, and diluted earnings per share was $1.50 versus diluted earnings per share of $1.12 a year ago, excluding after-tax intangible asset amortization expense and special items for both periods. Adjusted net earnings for the quarter were $5 billion, and adjusted diluted earnings per share was $1.88. representing decreases of 6.4% and 4.6%, respectively, compared to the fourth quarter of 2018. On an operational basis, adjusted diluted earnings per share declined 3%. Regarding the full year, 2019 net earnings were $15.1 billion, and diluted earnings per share was $5.63. 2019 adjusted net earnings were $23.3 billion, and adjusted diluted earnings per share was $8.68, up 4.5% and 6.1%, respectively, versus full year 2018. On an operational basis, adjusted diluted earnings per share grew 8.8%. Beginning with consumer, I will now comment on business segment sales performance for the fourth quarter, highlighting items that build upon the slides you have in front of you. Unless otherwise stated, percentages quoted represent the operational sales change in comparison to the fourth quarter of 2018, and therefore exclude the impact of currency translation. While not part of the prepared remarks for today's call, we have provided additional commentary on our website for the full year 2019 sales by segment to assist you in updating your models. Worldwide consumer segment sales totaled $3.6 billion, growing 2.1%, excluding the net impact of acquisitions and divestitures, Adjusted operational sales growth was 1.4%, with growth in the U.S. of 1.6% due primarily to strong performance in our OTC franchise. Growth outside of the U.S. was 1.3%. Over-the-counter medicines grew globally almost 5%, operationally and on an adjusted basis. In the U.S., OTC growth was around 10%, and its growing share in multiple products, such as adult Tylenol, driven by rapid-release gels, Pepsid, and Zarby's. However, U.S. growth was aided by about 200 basis points of stocking due to incremental distribution and trade promotion programs. The beauty franchise grew 4.3% or just under 1% when adjusted to exclude the impact of the acquisition of Dr. Silabo and the Rock Divestiture. Neutrogena delivered strong performance globally with growth of 4% outside the U.S. driven by anti-aging and cleansing innovation in EMEA as well as hand and body moisture category strength in the Asia Pacific region. In the U.S., share and market growth were largely offset by lapping of prior year new product pipeline builds and higher 2019 trade investment in Neutrogena. Including the consumer segment, baby care declined 9.3% globally, or negative 7% when adjusted to exclude the impact of the baby center divestiture. This decline was primarily due to continued competitive pressures as well as comparisons to prior year relaunch activities, most notably in the United States. Moving on to our pharmaceutical segment, worldwide pharmaceutical sales of $10.5 billion grew 4.4%, enabled by double-digit growth in nine key products. The segment delivered a seventh consecutive quarter above $10 billion in revenue. Sales grew in the U.S. about 4% and increased outside the U.S. by almost 5%. Generic competition for Zytiga negatively impacted our worldwide and U.S. growth by about 180 and 310 basis points, respectively. Our strong portfolio of products and commercial capabilities has enabled us to deliver global growth at above market levels despite significant biosimilar and generic headwinds. Our oncology portfolio delivered another strong quarter with worldwide growth of over 10%. Darzalex continued its strong performance, growing about 45% globally. The U.S. grew almost 38%, with strong growth across all lines of therapy, driven by the new frontline indication for the multiple myeloma transplant ineligible population. The continued strong growth outside the U.S. is driven by increased penetration and share gains. Rubica grew over 26% globally, driven largely by market share gains and strong market growth, primarily in the chronic lymphocytic leukemia indication in the U.S., along with strong uptake outside the U.S., In the U.S., based on third-quarter data, Imbruvica gained above seven points of market share in CLL Line 1 therapy. Worldwide Zytiga growth declined by about 13%, with declines of almost 45% in the U.S. due to generic competition, which was partially offset by continued strong growth of almost 13% outside the U.S. We continue to be pleased with the launch progress of Erlita, which generated global sales of $116 million in Q4, and $332 million for the full year, primarily in the United States. We continue to grow market share in non-metastatic castration-resistant prostate cancer, gaining over two points in the U.S. this quarter. Sales in the U.S. reflects the first full quarter for the approved indication for patients with metastatic castration-sensitive prostate cancer. We are also pleased with the launch progress in EMEA, where Erleada is now available in 12 countries. Our immunology therapeutic area delivered global sales growth of just over 6%, driven by strong double-digit performance of Stelara and Tramphia. Sales growth was partially offset by continued erosion of Remicade of about 16% due to increased discounts and modest share loss in the U.S. to alternative mechanisms of action and biosimilars. Stelara growth of almost 19% was primarily driven by the Crohn's disease indication where market shares increased by six points in the U.S. versus the fourth quarter of 2018. In October, we received U.S. FDA approval of Stelara for the treatment of adults with moderately to severely active ulcerative colitis. Symphony, Symphony Aria delivered sales growth of 7.6%, driven by strong market growth and Symphony Aria share gains in the U.S. Tramfaya grew over 55%. and achieved an 8.3% share of the psoriasis market in the U.S., which is up about two points from the fourth quarter of 2018. In neuroscience, our paliperidone long-acting portfolio performed well, growing 15%, with higher market share driven by increased new patient starts and strong persistency. In addition, we continue to progress the launch of Spravato. Patient demand continues to build, and the unmet need remains very high. New patient starts continue to steadily increase each month, with over 3,500 patients being treated to date. Further, we are pleased to report that in December, Spivato was approved in Europe for adults with treatment-resistant major depressive disorder. In infectious diseases, our portfolio grew 9.6%, led by strong growth of Symptuza and Jaluka for HIV, partially offset by cannibalization and increased generic competition in other products. In our cardiovascular, metabolism, and other product portfolio, we did experience declining sales of 9.5%, primarily driven by declines in Invacana and by a similar competition for Procrit. Xarelto was flat with volume increases offset by rebates, primarily due to an increase in the legislative rate for the donut hole from 50% to 70%, along with higher Medicare and donut hole utilization. In our total pulmonary hypertension portfolio, sales declined 6.2% as a result of a distributor model change in the U.S. to realize efficiencies by leveraging our distribution capabilities. This change negatively impacted sales growth by about 800 basis points, with sales growth of 2% when adjusting for this one-time impact. We continue to see strong share growth for Upsummit and Uptravi, And when adjusting for the one-time distributor model impact, their worldwide sales were about 10% and 30% respectively. Portfolio growth was also impacted by declining sales interclear as a result of continued generic competition. I'll now turn your attention to the medical devices segment. Worldwide medical devices sales were $6.6 billion, growing 0.2%, excluding the net impact of acquisitions and divestitures, primarily the divestiture of ASP, Adjusted operational sales growth was 2.7% worldwide. One-time items negatively impacted growth in the quarter by about 70 basis points, largely related to a bleed-down of the forward buying in Q3 in Japan ahead of the consumption tax change, which primarily impacted our vision business. The majority of this has sold through in Q4, with the remainder expected to occur in Q1 2020. Additionally, on a year-on-year basis, we are pleased to report that medical devices has accelerated underlying sales growth worldwide by 130 basis points, with the second half of 2019 delivering 4% growth. Interventional solutions grew over 13% globally, led by continued strength in our electrophysiology business, achieving about 14% growth worldwide and almost 16% for the year. Continuing its trend of double-digit growth for the 11th consecutive year, growth is strong in all regions driven by our newer product offerings in ablation and advanced catheters contributing to atrial fibrillation procedural market growth. Additionally, our Cernovus business delivered its sixth straight quarter of double-digit growth driven by strong market growth and new product innovation, including EmboTrap for the treatment of ischemic stroke. Vision grew 0.9% or 3% when adjusting for the negative impact of the Japan consumption tax forward buy I mentioned earlier. Growth was primarily driven by contact lenses, which grew 2.6% globally, where 5% adjusted for the bleed of the Japan consumption tax forward buy, led by double-digit growth of daily disposables in the OASIS family. For the year, contact lens grew almost 5%. which we expect to be in line with the overall market, representing the fourth consecutive year the contact lens has grown at or above the market. In surgical vision, we saw continued strong OUS growth in the cataract business due to above-market performance in IOLs, primarily in Asia Pacific. This was offset by weak U.S. performance due to competitive pressures and lower market growth in refractive surgery. We continue to see positive momentum in orthopedics, delivering growth for the quarter of 1.2%. On an annual basis, each major platform accelerated versus the prior year, and adjusted growth for this franchise improved by 180 basis points. This progress reflects the continued execution of our innovation and commercial strategies aimed to improve performance. HIPs grew 4.2%, driven by our leadership position in the anterior approach, continued strong demand of our primary stem actus, and enabling technologies such as the concise surgical automated system and joint point navigation system. Knees growth was 1.4% in the quarter, driven by strong performance of new innovation such as Attune Revision, Attune S+, and the Attune cementless rotating platform, which launched at the end of Q3. OUS growth of 3.2% was led by Asia-Pacific, Additionally, the United States returned to growth this quarter. Trauma growth of 2.5% globally was driven by market growth, supported by strong adoption of newer innovations such as our femoral neck system. Spine declined 5.8%, with the U.S. being the primary driver, partially due to not repeating a one-time Q4 2018 favorable pricing-related true-up, which negatively impacted global growth by 250 basis points. Excluding this impact, performance for the quarter was in line with the full year. While we lost share in the quarter, we continue to see positive uptake of newer products and are pleased with the strong start of our newly launched Symphony surgical system for use in posterior cervical spine procedures. Pricing pressure continued to impact all categories in orthopedics. U.S. pure price in spine declined about 3% after adjusting for last year's pricing-related true-up. Trauma price was consistent with the Q3 decline of 2%. Price in hips and knees both improved compared to Q3 at negative 1% and flat, respectively. Moving to the results for the surgery business. Advanced surgery delivered global growth of over 3%, led by biosurgery growth of about 4%, with growth in all regions led by Asia-Pacific share gains and market growth. However, growth in the quarter was tempered as surger flow continued to ramp back up in the United States. Energy in endocutters grew approximately 3% and 2%, respectively, with OUS growth driven by share gains and new products in the Asia-Pacific region, partially offset by competitive pressure in the United States. Wound closure grew over 2%, driven by continued strong market growth in China, as well as share gains in conventional and barbed sutures. As expected, selling days had an immaterial impact on our global growth rates in the fourth quarter. In 2020, selling days will negatively impact Q1 medical devices growth by over 50 basis points, with the majority being offset in Q2. I will now provide some commentary on our earnings for the year. Please direct your attention to the box section at the bottom of the schedule. You will see we have provided our earnings adjusted to exclude intangible amortization expense and special items. As reported this morning, our adjusted EPS of $8.68 reflects reported growth of 6.1% and operational growth of 8.8%, exceeding the high end of both our reported and operational adjusted EPS guidance range from October, driven by our strong performance. Consistent with our guidance, we did see a slight decline in adjusted pre-tax operating margins of 30 basis points, driven by investment in digital surgery and medical devices. Moving to the next slide. Our full year 2019 adjusted income before tax for the enterprise improved 170 basis points versus 2018. Looking at the adjusted pre-tax income by segment, medical devices at 35.4% is higher than the previous year, primarily due to increased divestiture gains in 2019, partially offset by an increase in investments in digital surgery. Pharmaceutical margins declined by 200 basis points to 40%. driven by reduced divestiture gains and higher costs of products sold due to the negative impact of currency. Consumer margins improved by 90 basis points to 21.4%, driven by planned prioritization and spending reductions, partially offset by reduced divestiture gains in 2018. Now, regarding our consolidated statement of earnings for the fourth quarter of 2019, please direct your attention to the boxed section of the schedule. As referenced in the table of non-GAAP measures, the 2019 fourth quarter net earnings are adjusted to exclude intangible asset amortization expense and special items of $1 billion on an after-tax basis, primarily driven by intangible amortization of $1 billion. Excluding the impact of those items, our adjusted earnings per share is $1.88, a decrease of 4.6% versus the fourth quarter 2018. Adjusted EPS on a constant currency basis was $1.91, down 3% versus fourth quarter of 2018. I'd like to now highlight a few noteworthy items that have changed on the statement of earnings compared to the same quarter last year. Cost of product sold deleveraged slightly, primarily driven by an increase in amortization expense, partially offset by favorable segment mix. Selling, marketing, and administrative margins for the quarter improved as a result of planned prioritization in the consumer business and favorable segment mix, partially offset by increased investment in the medical devices business. R&D investment was consistent year over year with slightly lower milestone payments in the pharmaceutical business, offset by increased investment in digital solutions in the medical device business. Net interest expense was lower by $50 million. primarily driven by the positive effect of net investment hedging arrangements, partially offset by reduced interest income resulting from lower rates of interest earned on cash balances. The change in the other income and expense line was primarily driven by lower litigation expense, higher unrealized gains on securities, partially offset by lower gains from divestitures. Regarding taxes in the quarter, Our effective tax rate was 4.9% compared to the fourth quarter of 2018 tax rate of 2.6%. The current quarter includes an estimated tax expense for the transition provisions of Swiss tax reform, partially offset by reorganization of certain foreign subsidiaries and additional impacts of recently issued regulations associated with U.S. tax reform. We encourage you to reference our 10-K for further details on this and and other specific tax matters. Excluding special items, the effective tax rate was 10.7%, relatively consistent with the same period last year, which was 11.1%. Now looking at adjusted income before tax. In the fourth quarter of 2019, our adjusted income before tax for the enterprise as a percentage of sales decreased from 29.6% to 27.1% in the fourth quarter of 2019, primarily driven by the impact of divestiture gains in Q4 of last year. The following are the main drivers of adjusted income before tax by segment. Medical devices declined by 830 basis points, driven by the life scan divestiture gain reported in Q4 2018, as well as an increased investment in robotics and digital solutions in 2019. Consumer margins declined by 280 basis points, primarily driven by the divestiture of ROC in Q4 2018. The slight increase in pharmaceutical margins of 30 basis points was primarily driven by reduced milestone payments. That concludes the sales and P&L highlights for Johnson & Johnson's fourth quarter 2019. For your reference, here's a slide summarizing notable developments occurring in the fourth quarter, some of which were mentioned in my comments. I'm now pleased to turn the call over to Alex Gorski.

Thank you, Chris, and thanks to all of you for joining us today. We're very pleased to be highlighting our fourth quarter and full-year performance. We delivered strong revenue and earnings growth in 2019, exceeding the financial performance metrics that we set at the beginning of the year. Now, we accomplished this while also making strategic investments that advance the pipeline of opportunities and innovation across all three of our business segments and and as we face a variety of challenges, from debates about the healthcare system in our country, to uncertainty with global trade, to today's litigious environment, to name a few. Now, I'm very proud that despite the challenges, we still remain focused and delivered on our cradle commitments and responsibilities to our patients, employees, communities, and shareholders, ultimately driving our purpose to advance health for humanity. And I'm confident that that we are well positioned to build on this momentum and solid foundation as we move into 2020 and beyond. We remain focused on the long term, a mindset we've maintained for more than a century, a mindset that is directly linked to our focused execution, our relentless pursuit of innovation, our talented and passionate people, our culture of caring for the world, and our unwavering focus on value creation for all our stakeholders. In fact... I'm proud to highlight that 2019 marked our 36th consecutive year of adjusted operational earnings growth for Johnson & Johnson. Now, this performance is indicative of the strength of our broad-based business, and we remain focused on driving the next generation of innovation across our entire portfolio in new markets, in markets where we have greater opportunity to compete, and in the markets where we lead, which include our 26 platforms that each deliver a billion dollars or more in sales annually. In pharmaceuticals, our strong track record of success continued again in 2019 as our farm segment outpaced the market, growing operationally 5.8%, which more than offset the loss of exclusivity due to biosimilar competition and generic erosion, as well as new competitive entrants and other market pressures. Now, it's important to note that our robust growth can be attributed to volume, not price. And our sales growth is a reflection of the increased number of patients we're reaching with our transformational medicines and for unmet needs. This strong growth not only enabled us to deliver life-saving and life-changing medicines to people around the globe, but it also enabled us to become the third largest pharmaceutical company in the world, retain our number one leadership position in the U.S., and be recognized as the number one pharmaceutical company on Fortune Magazine's annual Most Admired Companies list. Our farm investments in R&D continue to fuel exceptional growth as well. we achieved double-digit growth for 10 key products and delivered strong performance across all regions, including in both developed and emerging markets. We're very proud and excited that we gained approval and launched two new transformational medicines, Spravato for treatment-resistant depression and Balversa for metastatic urothelial cancer. We also continue to maximize the value in our market brands, submitting numerous filings and receiving approvals for line extensions for key brands. including Stelara, Darzalex, and Relita, many with peak sales potential that is greater than $500 million. And we continue to expand our portfolio with strategic licensing and acquisition of new assets and platforms, including Cusatuzumab from Argenix, an investigational antibody for the treatment of acute myeloid leukemia and high-risk myelodysplastic syndromes, a gene regulation platform from Mira GTX, and Bromecamab from X-Biotech, Inc., and anti-IL-1-alpha in Phase II development to treat atropic dermatitis and hydrodinitis suppurativa. With this industry-leading pipeline, our commercial capabilities, and robust R&D productivity, I'm confident that we are well-positioned to continue delivering sustained, long-term, above-market growth in 2020 and beyond. Now, 2019 marked a year of significant transformation for the consumer health business. We reestablished our brand and purpose and made strategic decisions that, over time, will accelerate growth, reduce complexity, and improve operating margins. Fueled by science-based, professionally endorsed brands, and strong consumer insights, we placed a concerted focus throughout 2019 on establishing a clear plan and path to achieve benchmark profitability in 2020, and this segment is already well on its way, delivering 90 basis points of adjusted pre-tax margin improvement for the year. Additionally, we successfully integrated the acquisitions of Zarby's, Inc., a leader in naturally-based, over-the-counter remedies, and the Dr. Salaba line of dermocosmetic skin care products, strengthening our position in these higher growth categories. Our U.S. consumer business continues to grow above the market, and our priority areas of beauty and OTC delivered solid operational growth for the year. I'm also pleased to share that medical devices accelerated growth again in 2019. As a result of a relentless focus on execution, innovation, and portfolio management, our underlying growth was just under 4%. Now, our improved performance was driven by electrophysiology, achieving its 11th consecutive year of double-digit growth, contact lens, which delivered growth at or above the market for the fourth straight year, energy and endocutters businesses growing mid-single digits, and improved performance in orthopedics, with each major platform accelerating compared to 2018. During the year, we also fortified our commitment and accelerated our entry into one of the fastest growing healthcare categories and exciting transformative fields of medicine, digital surgery. Consistent with our historical pioneering spirit in medical devices, we are focused on the next frontier of surgery, the acquisition of RS Health, Inc., a developer of robotic technologies currently in lung cancer, accelerated our entry into robotics as part of a digital surgery ecosystem designed to make medical interventions smarter, less invasive, and more personalized to elevate the standard of care. Additionally, just last month, we announced an agreement to acquire the remaining stake in Verb Surgical to further strengthen our ecosystem. Now, we also successfully launched critical products across each franchise throughout 2019, including the Attune Cementless Knee System, our first-of-its-kind AccuView Oasis contact lens with Transition's light intelligent technology, the industry's first powered circular stapler, Echelon, and the Visigo steerable sheath in our market-leading electrophysiology business. Our team continues to focus on improving our cadence of innovation as well as our portfolio optimization, which included the completion of the advanced sterilization products to Vestiture and the execution of more than 50 acquisitions or strategic partnerships, that we expect will further augment our future growth. We are committed to building upon this momentum in 2020, and I'm pleased to share that we will be hosting our Medical Device Business Review Day on May 13th to highlight the strategies that we believe will drive further growth and provide additional insights into the team's plans in digital surgery. Looking ahead, across all three business segments, we know we've got more work to do, but we are committed to continuing to deliver above-market growth in our pharmaceutical business, broadening the reach of our consumer business, and meeting the full potential of our medical devices business. And one of the most critical factors in achieving the goals of all of our business strategies is sustaining our investment in innovation. Once again, in 2019, we achieved record levels of investment, investing more than $11 billion in research and development. And across all industries, we remain one of the top 10 global companies that invest at the highest levels in R&D and innovation. Across Johnson & Johnson, we recognize the powerful impact that technology, innovation, and healthcare breakthroughs have in creating meaningful change in people's lives and establishing a competitive differentiation within the industry. Now, I would be remiss if I did not acknowledge that all of these many accomplishments would not have been possible without the efforts, passion, and engagement of our approximately 132,000 global Johnson & Johnson colleagues, who continue to demonstrate a commitment to delivering healthcare solutions that benefit patients, consumers, and communities around the world. Our purpose-driven, credo-based culture puts patients and people first, and this is certainly true in the way we think about our employees and work to consistently cultivate the world's best, healthiest, and most engaged workforce. The fact that our Johnson & Johnson colleagues are truly the driving force behind our successful performance and in fulfilling our purpose is something that we never, never take for granted and always celebrate. We share the common objective of always making the health and well-being of the patients and consumers who use our products every day our number one priority. And it has been this way for the last 134 years. We are on the front lines of developing medicines and revolutionary products that are literally saving people's lives. And we're working to prevent cancer, offer less invasive surgeries, and to end Ebola and HIV. This is what the world expects of us, and this is what our global workforce is united around, committed to, and prepared to do. Putting the needs of those we serve first also means protecting our shared environment and natural resources. We know that human health is directly linked to the health of the planet. Healthy people and communities go hand in hand with a healthy environment. This is why we are committed to reducing the environmental footprint of our operations, products, and supply chain with 2020 targets to reduce carbon emissions by 20% and procure 35% of electricity from renewable resources. Looking over the long term, we are optimizing our operations to improve water and energy efficiency while focusing on sustainable design and reduction in product packaging as well, all with the goal of delivering better health for people everywhere. So now I'd like to close where I began. In spite of the numerous industry challenges we faced throughout 2019, I'm very pleased that we remain focused on meeting the needs of patients and consumers globally, delivering value to all of our stakeholders, innovating, driving growth, and achieving solid performance. Our sustainable business model is built for the long term and provides us with increased confidence about our business, our strategic direction, and the healthcare industry, and what may sometimes feel like uncertain times. You have our unwavering commitment that we will hold ourselves accountable to fulfill all of our cradle responsibilities where we always keep the patient at the center of everything we do and also ensure the continued long-term success of Johnson & Johnson. We have an incredible opportunity to play a leading role in defining and driving the future of healthcare and putting it within the reach of everyone, everywhere. This is why we are so very excited and confident about 2020 and beyond. I look forward to addressing your questions during the upcoming Q&A, but I'll now turn it over to Joe, who will provide additional details about our results and guidance for 2020. Thank you. Joe? Thank you, Alex.