Segments of Business and Geographic Areas

9 Months Ended

Oct. 01, 2023

Segment Reporting [Abstract]

Segments of Business and Geographic Areas

SEGMENTS OF BUSINESS AND GEOGRAPHIC AREAS

Following the separation of the Consumer Health business in the fiscal third quarter of 2023, the Company is now organized into two business segments: Innovative Medicine (formerly referred to as Pharmaceutical) and MedTech. The segment results have been recast for all periods to reflect the continuing operations of the Company.

SALES BY SEGMENT OF BUSINESS

	Fiscal Third Quarter Ended			Fiscal Nine Months Ended
(Dollars in Millions)	October 1, 2023	October 2, 2022	Percent Change	October 1, 2023	October 2, 2022	Percent Change
INNOVATIVE MEDICINE
Immunology
U.S.	3,193	2,876	11.0	8,506	8,230	3.3
International	1,656	1,411	17.4	4,951	4,587	7.9
Worldwide	4,849	4,287	13.1	13,457	12,817	5.0
REMICADE
U.S.	296	350	(15.4)	849	1,099	(22.7)
U.S. Exports	38	39	(2.5)	112	163	(31.3)
International	127	169	(25.1)	449	606	(25.9)
Worldwide	461	558	(17.4)	1,410	1,868	(24.5)
SIMPONI / SIMPONI ARIA
U.S.	310	298	3.9	866	886	(2.3)
International	319	248	29.1	829	797	4.1
Worldwide	629	545	15.3	1,695	1,682	0.8
STELARA
U.S.	1,912	1,655	15.5	5,180	4,766	8.7
International	951	794	19.9	2,925	2,571	13.8
Worldwide	2,864	2,449	16.9	8,105	7,336	10.5
TREMFYA
U.S.	634	530	19.6	1,490	1,303	14.4
International	258	200	29.0	747	613	21.9
Worldwide	891	729	22.2	2,237	1,916	16.8
OTHER IMMUNOLOGY
U.S.	2	5	(47.1)	9	14	(36.1)
International	0	0	—	0	0	—
Worldwide	2	5	(47.1)	9	14	(36.1)
Infectious Diseases
U.S.	360	390	(7.8)	1,147	1,266	(9.4)
International	500	905	(44.8)	2,420	2,642	(8.4)
Worldwide	859	1,295	(33.6)	3,566	3,908	(8.7)
COVID-19 VACCINE
U.S.	—	—	—	—	120	*
International	41	489	(91.5)	1,073	1,370	(21.6)
Worldwide	41	489	(91.5)	1,073	1,490	(27.9)
EDURANT / rilpivirine
U.S.	9	9	10.2	26	27	(0.5)
International	287	237	21.4	816	691	18.2

Worldwide	297	245	21.0	843	718	17.5
PREZISTA / PREZCOBIX / REZOLSTA / SYMTUZA
U.S.	345	372	(7.3)	1,105	1,096	0.9
International	102	112	(9.5)	310	354	(12.5)
Worldwide	447	485	(7.8)	1,415	1,450	(2.4)
OTHER INFECTIOUS DISEASES
U.S.	5	10	(42.7)	15	24	(35.5)
International	69	68	2.0	220	228	(3.4)
Worldwide	74	77	(3.6)	235	251	(6.4)
Neuroscience
U.S.	1,036	919	12.7	3,043	2,658	14.5
International	706	763	(7.4)	2,296	2,498	(8.1)
Worldwide	1,742	1,681	3.6	5,339	5,156	3.5
CONCERTA / methylphenidate
U.S.	57	41	38.1	191	114	67.4
International	133	117	13.6	412	362	13.8
Worldwide	189	158	20.0	603	476	26.7
INVEGA SUSTENNA / XEPLION / INVEGA TRINZA / TREVICTA
U.S.	730	684	6.8	2,164	2,036	6.3
International	299	348	(14.0)	940	1,097	(14.3)
Worldwide	1,029	1,031	(0.2)	3,104	3,132	(0.9)
SPRAVATO
U.S.	154	88	75.1	409	223	83.1
International	29	12	*	74	32	*
Worldwide	183	100	82.1	483	255	88.8
OTHER NEUROSCIENCE(1)
U.S.	94	106	(11.3)	278	285	(2.3)
International	245	286	(13.9)	870	1,007	(13.5)
Worldwide	340	393	(13.2)	1,149	1,293	(11.0)
Oncology
U.S.	2,219	1,812	22.5	6,177	5,073	21.8
International	2,313	2,252	2.7	6,865	6,983	(1.7)
Worldwide	4,533	4,064	11.5	13,043	12,056	8.2
CARVYKTI
U.S.	140	55	*	324	79	*
International	12	—	*	17	—	*
Worldwide	152	55	*	341	79	*
DARZALEX
U.S.	1,369	1,097	24.8	3,882	3,071	26.4
International	1,130	955	18.3	3,312	2,823	17.3
Worldwide	2,499	2,052	21.8	7,194	5,894	22.1
ERLEADA
U.S.	288	254	12.9	778	693	12.2
International	342	235	45.8	961	647	48.7
Worldwide	631	490	28.7	1,740	1,340	29.8

IMBRUVICA
U.S.	264	353	(25.2)	796	1,072	(25.8)
International	545	559	(2.5)	1,681	1,847	(9.0)
Worldwide	808	911	(11.3)	2,476	2,918	(15.2)
ZYTIGA / abiraterone acetate
U.S.	16	16	(2.8)	41	54	(24.9)
International	199	440	(54.9)	646	1,446	(55.3)
Worldwide	214	456	(53.0)	686	1,500	(54.2)
OTHER ONCOLOGY
U.S.	143	37	*	357	104	*
International	86	64	34.5	248	220	12.5
Worldwide	229	100	*	605	324	86.5
Pulmonary Hypertension
U.S.	680	604	12.6	1,964	1,736	13.1
International	274	247	10.5	835	810	3.0
Worldwide	954	852	12.0	2,798	2,547	9.9
OPSUMIT
U.S.	323	289	12.2	924	827	11.8
International	166	152	9.3	512	495	3.5
Worldwide	490	441	11.2	1,437	1,322	8.7
UPTRAVI
U.S.	336	283	18.9	978	824	18.7
International	66	50	30.9	185	162	14.1
Worldwide	402	333	20.7	1,163	986	18.0
OTHER PULMONARY HYPERTENSION
U.S.	20	33	(37.1)	61	86	(28.4)
International	42	46	(7.5)	137	154	(10.5)
Worldwide	63	78	(19.8)	199	239	(16.9)
Cardiovascular / Metabolism / Other
U.S.	763	837	(8.8)	2,254	2,266	(0.5)
International	194	198	(2.1)	580	651	(10.8)
Worldwide	957	1,034	(7.5)	2,834	2,916	(2.8)
XARELTO
U.S.	625	689	(9.4)	1,840	1,806	1.9
International	—	—	—	—	—	—
Worldwide	625	689	(9.4)	1,840	1,806	1.9
OTHER(2)
U.S.	139	147	(6.1)	414	459	(9.9)
International	194	198	(2.1)	580	651	(10.8)
Worldwide	332	345	(3.8)	994	1,110	(10.5)
TOTAL INNOVATIVE MEDICINE
U.S.	8,249	7,438	10.9	23,090	21,229	8.8
International	5,644	5,776	(2.3)	17,947	18,171	(1.2)
Worldwide	13,893	13,214	5.1	41,037	39,400	4.2

MEDTECH
Interventional Solutions
U.S.	891	547	63.0	2,662	1,566	70.0
International	667	513	29.9	2,019	1,636	23.4
Worldwide	1,558	1,060	47.0	4,681	3,202	46.2
ELECTROPHYSIOLOGY
U.S.	611	520	17.6	1,791	1,489	20.3
International	549	453	21.2	1,658	1,454	14.0
Worldwide	1,161	973	19.3	3,449	2,943	17.2
ABIOMED(3)
U.S.	254	—	*	790	—	*
International	57	—	*	176	—	*
Worldwide	311	—	*	966	—	*
OTHER INTERVENTIONAL SOLUTIONS
U.S.	26	27	(3.2)	81	77	5.9
International	61	60	1.0	186	181	2.2
Worldwide	87	87	(0.3)	267	258	3.3
Orthopaedics
U.S.	1,349	1,309	3.1	4,100	3,936	4.2
International	815	785	3.9	2,574	2,504	2.8
Worldwide	2,164	2,095	3.4	6,674	6,440	3.6
HIPS
U.S.	239	228	4.9	730	693	5.4
International	136	124	9.3	432	437	(1.0)
Worldwide	375	352	6.5	1,162	1,129	2.9
KNEES
U.S.	207	203	2.3	654	620	5.6
International	131	115	14.6	415	386	7.7
Worldwide	338	317	6.7	1,069	1,005	6.4
TRAUMA
U.S.	488	473	3.2	1,462	1,412	3.5
International	253	244	4.2	775	749	3.5
Worldwide	742	717	3.5	2,238	2,161	3.5
SPINE, SPORTS & OTHER
U.S.	415	406	2.3	1,254	1,211	3.5
International	295	303	(2.6)	952	933	2.0
Worldwide	710	708	0.2	2,205	2,144	2.8
Surgery
U.S.	994	984	1.1	2,984	2,897	3.0
International	1,483	1,439	3.1	4,522	4,410	2.6
Worldwide	2,479	2,422	2.3	7,507	7,306	2.7
ADVANCED
U.S.	455	457	(0.4)	1,365	1,328	2.8
International	709	701	1.0	2,139	2,132	0.3
Worldwide	1,164	1,158	0.5	3,504	3,460	1.3
GENERAL
U.S.	540	527	2.4	1,619	1,569	3.2

International	775		737	5.1		2,383		2,277	4.7
Worldwide	1,314		1,264	4.0		4,002		3,846	4.1
Vision
U.S.	512		517	(1.0)		1,599		1,534	4.2
International	744		689	8.1		2,265		2,170	4.4
Worldwide	1,256		1,206	4.2		3,864		3,704	4.3
CONTACT LENSES / OTHER
U.S.	399		405	(1.2)		1,252		1,179	6.2
International	529		503	4.9		1,568		1,533	2.3
Worldwide	928		908	2.2		2,820		2,712	4.0
SURGICAL
U.S.	112		112	(0.1)		346		355	(2.5)
International	216		186	16.6		698		637	9.6
Worldwide	328		298	10.3		1,044		992	5.3
TOTAL MEDTECH
U.S.	3,747		3,356	11.6		11,345		9,932	14.2
International	3,711		3,426	8.3		11,382		10,719	6.2
Worldwide	7,458		6,782	10.0		22,727		20,651	10.0
WORLDWIDE
U.S.	11,996		10,794	11.1		34,435		31,161	10.5
International	9,355		9,202	1.6		29,329		28,890	1.5
Worldwide	$	21,351	19,996	6.8	%	$	63,764	60,051	6.2	%

*Percentage greater than 100% or not meaningful

(1) Inclusive of RISPERDAL CONSTA which was previously disclosed separately

(2) Inclusive of INVOKANA which was previously disclosed separately

(3) Acquired on December 22, 2022

EARNINGS BEFORE PROVISION FOR TAXES BY SEGMENT

	Fiscal Third Quarter Ended					Fiscal Nine Months Ended
(Dollars in Millions)	October 1, 2023		October 2, 2022	Percent Change		October 1, 2023		October 2, 2022	Percent Change
Innovative Medicine(1)	$	4,794	4,186	14.5	%	$	14,008	12,424	12.7	%
MedTech(2)	1,185		1,090	8.7		4,265		3,641	17.1
Segment earnings before provision for taxes	5,979		5,276	13.3		18,273		16,065	13.7
Less: Expense not allocated to segments (3)	762		104			8,037		546
Worldwide income before tax	$	5,217	5,172	0.9	%	$	10,236	15,519	(34.0)	%

(1) Innovative Medicine includes:

•Intangible amortization expense of $0.7 billion in both the fiscal third quarter of 2023 and 2022.

Intangible amortization expense of $2.2 billion in both the fiscal nine months of 2023 and 2022.

•One-time COVID-19 Vaccine related exit costs of $0.4 billion in the fiscal third quarter of 2022 and $0.7 billion in both the fiscal nine months of 2023 and 2022.

•A restructuring related charge of $0.1 billion and $0.4 billion in the fiscal third quarter and fiscal nine months of 2023, respectively.

•In the fiscal third quarter and fiscal nine months of 2023, the Company recorded an intangible asset impairment charge of approximately $0.2 billion related to market dynamics associated with a non-strategic asset (M710) acquired as part of the acquisition of Momenta Pharmaceuticals in 2020. In the fiscal nine months of 2022, the Company recorded an intangible asset impairment charge of approximately $0.6 billion related to an in-process research and development

asset, bermekimab (JnJ-77474462), an investigational drug for the treatment of Atopic Dermatitis (AD) and Hidradenitis Suppurativa (HS).

•Unfavorable changes in the fair value of securities of $0.4 billion and $0.2 billion in the fiscal third quarter of 2023 and 2022, respectively. Unfavorable changes in the fair value of securities of $0.5 billion and $0.7 billion in the fiscal nine months of 2023 and 2022, respectively.

•Favorable litigation related items of $0.1 billion in the fiscal nine months of 2023.

(2) MedTech includes:

•Intangible amortization expense of $0.4 billion and $0.3 billion in the fiscal third quarter of 2023 and 2022, respectively. Intangible amortization expense of $1.1 billion and $0.8 billion in the fiscal nine months of 2023 and 2022, respectively.

•Litigation expense of $0.2 billion and $0.5 billion in the fiscal third quarter and fiscal nine months of 2022.

•Acquisition and integration related expense of $0.1 billion in the fiscal nine months of 2023.

•A restructuring related charge of $0.2 billion in the fiscal third quarter and fiscal nine months of 2023. A restructuring related charge of $0.1 billion in the fiscal third quarter of 2022 and $0.2 billion in the fiscal nine months of 2022.

(3)Amounts not allocated to segments include interest income/expense and general corporate income/expense. The fiscal nine months of 2023 includes an approximately $7 billion incremental charge primarily related to the talc settlement proposal (See Note 11, Legal Proceedings, for additional details) and $0.6 billion related to the unfavorable change in the fair value of Kenvue shares.

SALES BY GEOGRAPHIC AREA

	Fiscal Third Quarter Ended					Fiscal Nine Months Ended
(Dollars in Millions)	October 1, 2023		October 2, 2022	Percent Change		October 1, 2023		October 2, 2022	Percent Change
United States	$	11,996	10,794	11.1	%	$	34,435	31,161	10.5	%
Europe	4,727		4,844	(2.4)		15,448		15,540	(0.6)
Western Hemisphere, excluding U.S.	1,171		1,059	10.5		3,383		3,084	9.7
Asia-Pacific, Africa	3,457		3,299	4.8		10,498		10,266	2.2
Total	$	21,351	19,996	6.8	%	$	63,764	60,051	6.2	%