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Reconciliation of Non-GAAP Financial Measures
(Dollars in Millions Except Per Share Data) 2015 2014
%
Change
Earnings before provision for taxes on income - as reported $19,196 20,563 (6.6)%
Intangible asset amortization expense 1,570 1,630
Restructuring(1) 590 –
In-process research and development 224 178
Synthes integration costs 196 754
DePuy ASR™Hip program 148 126
Litigation expense, net 141 1,253
Ortho-Clinical Diagnostics divestiture net gain (62) (1,899)
Additional year of Branded Prescription Drug Fee – 220
Earnings before provision for taxes on income - as adjusted $22,003 22,825 (3.6)%
Net Earnings - as reported $15,409 16,323 (5.6)%
Intangible asset amortization expense 1,113 1,213
Restructuring 415 –
In-process research and development 162 131
Synthes integration costs 144 555
DePuy ASR™Hip program 130 111
Litigation expense, net 118 1,225(2)
Ortho-Clinical Diagnostics divestiture net gain (46) (1,062)
Additional year of Branded Prescription Drug Fee – 220
Tax benefit associated with Conor Medsystems – (398)
Net Earnings - as adjusted $17,445 18,318 (4.8)%
Diluted Net Earnings per share - as reported $5.48 5.70 (3.9)%
Intangible asset amortization expense 0.39 0.42
Restructuring 0.15 –
In-process research and development 0.06 0.04
Synthes integration costs 0.05 0.19
DePuy ASR™Hip program 0.05 0.04
Litigation expense, net 0.04 0.43
Ortho-Clinical Diagnostics divestiture net gain (0.02) (0.37)
Additional year of Branded Prescription Drug Fee – 0.08
Tax benefit associated with Conor Medsystems – (0.14)
Diluted Net Earnings per share - as adjusted $6.20 6.39 (3.0)%
Operational Diluted Net Earnings per share - as adjusted* $6.76 6.39 5.8%
* Excludes the effect of translational currency
(1) Includes $81 million recorded in cost of products sold
(2) Includes adjustment to deferred tax asset related to deductibility by tax jurisdiction
The Company provides earnings before provision for taxes on income, net earnings and net earnings per share (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 intangible asset amortization expense, 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 and net earnings per share (diluted) prepared in accordance with GAAP, adjusted
earnings before provision for taxes on income, adjusted net earnings and adjusted net earnings per share (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 intangible asset amortization expense, 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.
Johnson & Johnson 2015 Annual Report