Johnson and Johnson 2014 Annual Report Download - page 80

Reconciliation of Non-GAAP Financial Measures
The tables that follow are provided to reconcile certain financial disclosures in the 2014 Chairman’s Letter and Business
Highlights.
% Change
(Dollars in Millions Except Per Share Data) 2014 2013 2012 '14 vs. '13 '13 vs. '12
Earnings before provision for taxes on income – as reported $20,563 15,471 13,775 32.9% 12.3
Ortho-Clinical Diagnostics divestiture net gain (1,899) – –
Litigation expenses 1,253 2,282 1,229
Synthes integration/transaction costs and currency related 754 683 1,028
Additional year of Branded Prescription Drug Fee 220 – –
In-process research and development 178 580 1,163
DePuy ASR™Hip program 126 251 110
Intangible asset write-downs – – 939
Other – (98) (30)
Earnings before provision for taxes on income – as adjusted $21,195 19,169 18,214 10.6% 5.2
Net Earnings attributable to Johnson & Johnson – as reported $16,323 13,831 10,853 18.0% 27.4
Ortho-Clinical Diagnostics divestiture net gain (1,062) – –
Litigation expenses 1,225(1) 1,646 1,052
Synthes integration/transaction costs and currency related 555 483 899
Additional year of Branded Prescription Drug Fee 220 – –
In-process research and development 131 462 743(2)
DePuy ASR™Hip program 111 240 97
Tax benefit associated with Conor Medsystems (398) – –
Scios tax benefit – (707) –
Intangible asset write-downs – – 717
Other – (79) (16)
Net Earnings attributable to Johnson & Johnson – as adjusted $17,105 15,876 14,345 7.7% 10.7
Diluted Net Earnings per share attributable to Johnson & Johnson – as reported $5.70 4.81 3.86 18.5% 24.6
Ortho-Clinical Diagnostics divestiture net gain (0.37) – –
Litigation expenses 0.43 0.57 0.37
Synthes integration/transaction costs and currency related 0.19 0.17 0.32
Additional year of Branded Prescription Drug Fee 0.08 – –
In-process research and development 0.04 0.16 0.27
DePuy ASR™Hip program 0.04 0.08 0.03
Tax benefit associated with Conor Medsystems (0.14) – –
Scios Tax Benefit – (0.25) –
Intangible asset write-downs – – 0.26
Other – (0.02) (0.01)
Diluted Net Earnings per share attributable to Johnson & Johnson – as adjusted $5.97 5.52 5.10 8.2% 8.2
(1) Includes adjustment to deferred tax asset related to deductibility by tax jurisdiction
(2) Amount includes in-process research and development charge of $679 million related to bapineuzumab IV offset by $339 million reported as net loss
attributable to noncontrolling interest.
The Company provides earnings before provision for taxes on income, net earnings attributable to Johnson & Johnson and net
earnings per share attributable to Johnson & Johnson (diluted) on an adjusted basis because management believes that these
measures provide useful information to investors. Among other things, these measures may assist investors in evaluating the
Company's results of operations period over period. In various periods, these measures may exclude such items as significant
costs associated with acquisitions, restructuring, litigation, and changes in applicable laws and regulations (including significant
accounting or tax matters). These special items may be highly variable, difficult to predict, and of a size that sometimes has
substantial impact on the Company's reported results of operations for a period. Management uses these measures internally
for planning, forecasting and evaluating the performances of the Company's businesses, including allocating resources and
evaluating results relative to employee performance compensation targets. Unlike earnings before provision for taxes on income,
net earnings attributable to Johnson & Johnson and net earnings per share attributable to Johnson & Johnson (diluted) prepared
in accordance with GAAP, adjusted earnings before provision for taxes on income, adjusted net earnings attributable to
Johnson & Johnson and adjusted net earnings per share attributable to Johnson & Johnson (diluted) may not be comparable
with the calculation of similar measures for other companies. The limitations of using these non-GAAP financial measures as
performance measures are that they provide a view of the Company's results of operations without including all events during a
period, such as the effects of an acquisition, the Ortho-Clinical Diagnostics divestiture, restructuring, litigation, and changes in
applicable laws and regulations (including significant accounting or tax matters) and do not provide a comparable view of the
Company's performance to other companies in the health care industry. Investors should consider non-GAAP financial
measures in addition to, and not as replacements for, or superior to, measures of financial performance prepared in accordance
with GAAP.
70 •Johnson & Johnson 2014 Annual Report