Johnson & Johnson 10-Q for FY2024 Q2

Johnson & Johnson (JNJ)

10-Q 2024-07-25 For: 2024-06-30

Added on April 02, 2026

About this 10-Q

Johnson & Johnson filed this 10-Q on July 25, 2024, covering the quarter ended June 30, 2024 (FY2024 Q2).

Headline figures

Quarter ended June 30, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $22.45B; up 4.3% from $21.52B a year earlier
Net income: $4.69B; down 8.9% from net income of $5.14B a year earlier
Diluted EPS: $1.93; down 1.5% from $1.96 a year earlier

Search and read filings like this one from Claude or ChatGPT with the SEC filings MCP server →


New Jersey						22-1024240
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, Par Value $1.00	JNJ	New York Stock Exchange
5.50% Notes Due November 2024	JNJ24BP	New York Stock Exchange
1.150% Notes Due November 2028	JNJ28	New York Stock Exchange
3.20% Notes Due November 2032	JNJ32	New York Stock Exchange
1.650% Notes Due May 2035	JNJ35	New York Stock Exchange
3.350% Notes Due November 2036	JNJ36A	New York Stock Exchange
3.550% Notes Due November 2044	JNJ44	New York Stock Exchange


Item		Page

Part I
	Financial information	1
Item 1	Financial statements (unaudited)	1
	Consolidated balance sheets — June 3 0 , 2024 and December 31, 2023	1
	Consolidated statements of earnings for the fiscal second quarters ended June 3 0 , 2024 and July 2 , 2023	2
	Consolidated s tatements of e arnings for the f iscal six m onths e nded June 30 , 202 4 and July 2, 202 3	3

	Consolidated statements of comprehensive income for the fiscal second quarters and fiscal six mon ths ended June 3 0 , 2024 and July 2, 2023	4
	Consolidated statements of equity for the fiscal second quarters and fiscal six months ended June 3 0 , 2024 and July 2, 2023	5
	Consolidated statements of cash flows for the fiscal six months ended June 3 0 , 2024 and July 2, 2023	7
	Notes to consolidated financial statements	9


Item 2	Management’s discussion and analysis of financial condition and results of operations	42
Item 3	Quantitative and qualitative disclosures about market risk	60
Item 4	Controls and procedures	60

Part II
	Other information	61
Item 1	Legal proceedings	61
Item 2	Unregistered sales of equity securities and use of proceeds	61
Item 5	Other information	62
Item 6	Exhibits	62
	Signatures	63


	June 30, 2024	December 31, 2023
Assets
Current assets:
Cash and cash equivalents (Note 4)	$24,878	21,859

Marketable securities	597	1,068
Accounts receivable, trade, less allowances $161 (2023, $166)	15,794	14,873
Inventories (Note 2)	12,169	11,181
Prepaid expenses and other	4,379	4,514

Total current assets	57,817	53,495
Property, plant and equipment at cost	48,035	47,776
Less: accumulated depreciation	(28,287)	(27,878)
Property, plant and equipment, net	19,748	19,898
Intangible assets, net (Note 3)	39,725	34,175
Goodwill (Note 3)	44,250	36,558
Deferred taxes on income (Note 5)	9,004	9,279
Other assets	10,544	14,153

Total assets	$181,088	167,558
Liabilities and shareholders’ equity
Current liabilities:
Loans and notes payable	$9,855	3,451
Accounts payable	8,848	9,632
Accrued liabilities	10,539	10,212
Accrued rebates, returns and promotions	17,539	16,001
Accrued compensation and employee related obligations	2,843	3,993
Accrued taxes on income (Note 5)	4,309	2,993

Total current liabilities	53,933	46,282
Long-term debt (Note 4)	31,636	25,881
Deferred taxes on income (Note 5)	2,635	3,193
Employee related obligations (Note 6)	6,919	7,149
Long-term taxes payable (Note 5)	341	2,881
Other liabilities	14,086	13,398

Total liabilities	$109,550	98,784
Commitments and Contingencies (Note 11)
Shareholders’ equity:
Common stock — par value $1.00 per share (authorized 4,320,000,000 shares; issued 3,119,843,000 shares)	$3,120	3,120
Accumulated other comprehensive income (loss) (Note 7)	(11,253)	(12,527)
Retained earnings and Additional paid-in capital	155,360	153,843
Less: common stock held in treasury, at cost (712,997,000 and 712,765,000 shares)	75,689	75,662
Total shareholders’ equity	$71,538	68,774
Total liabilities and shareholders’ equity	$181,088	167,558


	Fiscal Second Quarter Ended
	June 30, 2024	Percent to Sales		July 2, 2023	Percent to Sales
Sales to customers (Note 9)	$22,447	100.0	%	$21,519	100.0	%
Cost of products sold	6,869	30.6		6,462	30.0
Gross profit	15,578	69.4		15,057	70.0
Selling, marketing and administrative expenses	5,681	25.3		5,396	25.1
Research and development expense	3,440	15.3		3,703	17.2
In-process research and development impairments	194	0.9		—	—
Interest income	(395)	(1.8)		(326)	(1.5)
Interest expense, net of portion capitalized	270	1.2		217	1.0
Other (income) expense, net	653	2.9		(384)	(1.8)
Restructuring (Note 12)	(13)	0.0		145	0.7
Earnings before provision for taxes on income	5,748	25.6		6,306	29.3
Provision for taxes on income (Note 5)	1,062	4.7		930	4.3
Net earnings from continuing operations	4,686	20.9	%	5,376	25.0	%
Net earnings (loss) from discontinued operations, net of tax (Note 13)	—			(232)
Net earnings	$4,686			$5,144
Net earnings (loss) per share (Note 8)
Continuing operations - basic	$1.95			$2.07
Discontinued operations - basic	—			(0.09)
Total net earnings (loss) per share - basic	$1.95			$1.98
Continuing operations - diluted	$1.93			$2.05
Discontinued operations - diluted	—			(0.09)
Total net earnings (loss) per share - diluted	$1.93			$1.96
Avg. shares outstanding
Basic	2,406.8			2,598.4
Diluted	2,422.0			2,625.7



☑						Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934



☐						Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from to



	Fiscal Six Months Ended
	June 30, 2024	Percent to Sales		July 2, 2023	Percent to Sales
Sales to customers (Note 9)	$43,830	100.0	%	$42,413	100.0	%
Cost of products sold	13,380	30.5		13,149	31.0
Gross profit	30,450	69.5		29,264	69.0
Selling, marketing and administrative expenses	10,938	25.0		10,302	24.3
Research and development expense	6,982	16.0		7,158	16.9
In-process research and development impairments	194	0.4		49	0.1
Interest income	(759)	(1.8)		(524)	(1.2)
Interest expense, net of portion capitalized	425	1.0		429	1.0
Other (income) expense, net	3,057	7.0		6,556	15.5
Restructuring (Note 12)	151	0.3		275	0.6
Earnings before provision for taxes on income	9,462	21.6		5,019	11.8
Provision for taxes on income (Note 5)	1,521	3.5		134	0.3
Net earnings from continuing operations	7,941	18.1	%	4,885	11.5	%
Net earnings from discontinued operations, net of tax (Note 13)	—			191
Net earnings	$7,941			$5,076
Net earnings per share (Note 8)
Continuing operations - basic	$3.30			$1.88
Discontinued operations - basic	—			$0.07
Total net earnings per share - basic	$3.30			$1.95
Continuing operations - diluted	$3.27			$1.86
Discontinued operations - diluted	—			$0.07
Total net earnings per share - diluted	$3.27			$1.93
Avg. shares outstanding
Basic	2,407.5			2,601.9
Diluted	2,428.5			2,630.7


The tax effects in other comprehensive income/(loss) for the fiscal second quarter were as follows for 2024 and 2023, respectively: Foreign Currency Translation: $65 million and $32 million; Securities: $1 million and $1 million; Employee Benefit Plans: $1 million and $21 million; Derivatives & Hedges: $28 million and $74 million.

The tax effects in other comprehensive income/(loss) for the fiscal six months were as follows for 2024 and 2023, respectively: Foreign Currency Translation: $684 million and $266 million; Securities: $6 million in 2023; Employee Benefit Plans: $41 million and $43 million; Derivatives & Hedges: $139 million and $80 million.


	Total	Retained Earnings and Additional Paid-in Capital	Accumulated Other Comprehensive Income (AOCI)	Common Stock Issued Amount	Treasury Stock Amount
Balance, March 31, 2024	$70,020	153,378	(10,768)	3,120	(75,710)
Net earnings	4,686	4,686	—	—	—
Cash dividends paid ($1.24 per share)	(2,985)	(2,985)	—	—	—
Employee compensation and stock option plans	438	281	—	—	157
Repurchase of common stock	(136)		—	—	(136)



Other comprehensive income (loss), net of tax	(485)	—	(485)	—	—
Balance, June 30, 2024	$71,538	155,360	(11,253)	3,120	(75,689)


	Total	Retained Earnings and Additional Paid-in Capital	Accumulated Other Comprehensive Income	Common Stock Issued Amount	Treasury Stock Amount	Non-Controlling interest (NCI)
Balance, April 2, 2023	$70,869	124,558	(12,626)	3,120	(44,183)	—

Net earnings	5,144	5,144	—	—	—	—
Cash dividends paid ($1.19 per share)	(3,092)	(3,092)	—	—	—	—
Employee compensation and stock option plans	649	301	—	—	348	—
Repurchase of common stock	(381)	—	—	—	(381)	—
Other	(1)	—	—	—	(1)	—
Kenvue IPO	4,278	2,470	548			1,260	*
Other comprehensive income (loss), net of tax	(1,057)	—	(1,057)	—	—	—
Balance, July 2, 2023	$76,409	129,381	(13,135)	3,120	(44,217)	1,260


(Dollars in Millions)	June 30, 2024	December 31, 2023
Raw materials and supplies	$2,407	2,355
Goods in process	2,556	1,952
Finished goods	7,206	6,874
Total inventories	$12,169	11,181


(Dollars in Millions)	Innovative Medicine	MedTech	Total
Goodwill at December 31, 2023	$10,407	26,151	36,558
Goodwill, related to acquisitions	563	7,494	8,057
Goodwill, related to divestitures	—	(56)	(56)
Currency translation/Other	(202)	(107)	(309)
Goodwill at June 30, 2024	$10,768	33,482	44,250


(Dollars in Millions)
2024	2025	2026	2027	2028
$4,500	3,900	3,300	2,700	2,000


	June 30, 2024					July 2, 2023
(Dollars in Millions)	Sales	Cost of Products Sold	R&D Expense	Interest (Income) Expense	Other (Income) Expense	Sales	Cost of Products Sold	R&D Expense	Interest (Income) Expense	Other (Income) Expense


The effects of fair value, net investment and cash flow hedging:
Gain (Loss) on fair value hedging relationship:
Interest rate swaps contracts:
Hedged items	$—	—	—	(53)	—	—	—	—	(175)	—
Derivatives designated as hedging instruments	—	—	—	53	—	—	—	—	175	—

Gain (Loss) on net investment hedging relationship:
Cross currency interest rate swaps contracts:
Amount of gain or (loss) recognized in income on derivative amount excluded from effectiveness testing	—	—	—	33	—	—	—	—	33	—
Amount of gain or (loss) recognized in AOCI	—	—	—	33	—	—	—	—	33	—

Gain (Loss) on cash flow hedging relationship:
Forward foreign exchange contracts:
Amount of gain or (loss) reclassified from AOCI into income	(1)	94	8	—	3	(15)	56	(12)	—	3



Amount of gain or (loss) recognized in AOCI	2	66	11	—	1	(14)	251	7	—	18

Cross currency interest rate swaps contracts:
Amount of gain or (loss) reclassified from AOCI into income	—	—	—	42	—	—	—	—	74	—

Amount of gain or (loss) recognized in AOCI	$—	—	—	(38)	—	—	—	—	(432)	—


Form 10-Q			1


Form 10-Q			3


Form 10-Q			5


	Fiscal Six Months Ended
	June 30, 2024	July 2, 2023
Cash flows from operating activities
Net earnings	$7,941	5,076
Adjustments to reconcile net earnings to cash flows from operating activities:
Depreciation and amortization of property and intangibles	3,597	3,814
Stock based compensation	643	688


Asset write-downs	379	388



Net gain on sale of assets/businesses	(223)	(47)

Deferred tax provision	(2,257)	(2,342)
Credit losses and accounts receivable allowances	—	—
Changes in assets and liabilities, net of effects from acquisitions and divestitures:
Increase in accounts receivable	(1,163)	(599)
Increase in inventories	(739)	(741)
Increase/(Decrease) in accounts payable and accrued liabilities	449	(1,061)
Decrease/(Increase) in other current and non-current assets	3,731	(1,144)
(Decrease)/Increase in other current and non-current liabilities	(3,068)	3,407

Net cash flows from operating activities	9,290	7,439

Cash flows from investing activities
Additions to property, plant and equipment	(1,783)	(1,987)
Proceeds from the disposal of assets/businesses, net (Note 10)	573	116
Acquisitions, net of cash acquired (Note 10)	(14,807)	—
Purchases of investments	(1,184)	(9,688)
Sales of investments	1,706	11,877
Credit support agreements activity, net	1,430	(798)
Other (including capitalized licenses and milestones)	(86)	19

Net cash used by investing activities	(14,151)	(461)

Cash flows from financing activities
Dividends to shareholders	(5,854)	(6,034)



	Gain/(Loss) Recognized In Accumulated OCI		Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income Into Income	Gain/(Loss) Reclassified From Accumulated OCI Into Income
(Dollars in Millions)	June 30, 2024	July 2, 2023		June 30, 2024	July 2, 2023
Debt	$46	11	Interest (income) expense	—	—
Cross Currency interest rate swaps	$92	(24)	Interest (income) expense	—	—


Gross to Net Derivative Reconciliation	June 30, 2024	December 31, 2023
(Dollars in Millions)
Total Gross Assets	$1,942	1,591
Credit Support Agreement (CSA)	(1,911)	(1,575)
Total Net Asset	31	16

Total Gross Liabilities	4,405	6,037
Credit Support Agreement (CSA)	(4,229)	(5,604)
Total Net Liabilities	$176	433


(Dollars in Millions)	Carrying Amount	Unrealized Gain	Estimated Fair Value	Cash & Cash Equivalents	Current Marketable Securities
Cash	$4,247	—	4,247	4,247	—
U.S. Gov't securities	—	—	—	—	—
Non-U.S. sovereign securities	150	—	150	150	—
U.S. reverse repurchase agreements	8,496	—	8,496	8,496	—

Corporate debt securities(1)	—	—	—	—	—
Money market funds	4,883	—	4,883	4,883	—
Time deposits(1)	859	—	859	859	—
Subtotal	18,635	—	18,635	18,635	—


U.S. Gov’t securities	6,585	—	6,585	6,182	403
U.S. Gov’t Agencies	11	—	11	—	11
Other sovereign securities	2	—	2	—	2
Corporate debt securities	242	—	242	61	181
Subtotal available for sale debt(2)	$6,840	—	6,840	6,243	597
Total cash, cash equivalents and current marketable securities	$25,475	—	25,475	24,878	597


(Dollars in Millions)	Cost Basis	Fair Value
Due within one year	$6,821	6,821
Due after one year through five years	19	19
Due after five years through ten years	—	—
Total debt securities	$6,840	6,840


	Fiscal Second Quarter Ended				Fiscal Six Months Ended
	Retirement Plans		Other Benefit Plans		Retirement Plans		Other Benefit Plans
(Dollars in Millions)	June 30, 2024	July 2, 2023	June 30, 2024	July 2, 2023	June 30, 2024	July 2, 2023	June 30, 2024	July 2, 2023
Service cost	$222	215	69	69	446	425	138	137
Interest cost	351	371	52	55	703	723	104	109
Expected return on plan assets	(639)	(694)	(1)	(2)	(1,281)	(1,362)	(3)	(3)
Amortization of prior service cost/(credit)	(46)	(46)	(1)	(1)	(92)	(92)	(1)	(1)

Recognized actuarial (gains)/losses	44	(50)	13	7	87	(100)	26	13
Curtailments and settlements	(8)	—	—	—	(8)	—	—	—
Net periodic benefit cost/(credit)	$(76)	(204)	132	128	(145)	(406)	264	255



(Dollars in Millions)	Foreign Currency Translation	Gain/ (Loss) On Securities	Employee Benefit Plans	Gain/ (Loss) On Derivatives & Hedges	Total Accumulated Other Comprehensive Income/(Loss)

December 31, 2023	$(10,149)	(1)	(2,000)	(377)	(12,527)



Net change	1,734	1	61	(522)	1,274
June 30, 2024	(8,415)	0	(1,939)	(899)	(11,253)


	Fiscal Second Quarter Ended		Fiscal Six Months Ended
(Shares in Millions)	June 30, 2024	July 2, 2023	June 30, 2024	July 2, 2023
Basic net earnings per share from continuing operations	$1.95	2.07	3.30	1.88
Basic net earnings (loss) per share from discontinued operations	—	(0.09)	—	0.07
Total net earnings per share - basic	1.95	1.98	3.30	1.95
Average shares outstanding — basic	2,406.8	2,598.4	2,407.5	2,601.9
Potential shares exercisable under stock option plans	62.6	95.2	79.3	96.9
Less: shares which could be repurchased under treasury stock method	(47.4)	(67.9)	(58.3)	(68.1)

Average shares outstanding — diluted	2,422.0	2,625.7	2,428.5	2,630.7
Diluted net earnings per share from continuing operations	1.93	2.05	3.27	1.86
Diluted net earnings (loss) per share from discontinuing operations	—	(0.09)	—	0.07
Total net earnings per share - diluted	$1.93	1.96	3.27	1.93

(Shares in Millions)
The diluted net earnings per share calculation excluded the following number of shares related to stock options, as the exercise price of these options was greater than the average market value of the Company’s stock.	72.2	50.8	53.8	46.8


(Dollars in Billions)
Assets acquired:
Cash						$1.1
Goodwill						7.5
Amortizable intangibles						5.3
IPR&D						0.6
Inventory						0.5
Other assets						0.5
Total assets acquired						$15.5

Liabilities assumed:
Deferred taxes						$1.5
Notes payable*						1.0
Accrued liabilities**						0.4
Total liabilities assumed						$2.9

Net assets acquired						$12.6

Net assets acquired as of May 31, 2024						$12.6
Less: Cash acquired						1.1
Equity awards settled						0.6
Settlement of Note payable*						1.0
Total enterprise value as of June 30, 2024						$13.1


Product or product category						Number of plaintiffs
Body powders containing talc, primarily JOHNSON’S Baby Powder						62,370
DePuy ASR XL Acetabular System and DePuy ASR Hip Resurfacing System						160
PINNACLE Acetabular Cup System						910
Pelvic meshes						6,230
ETHICON PHYSIOMESH Flexible Composite Mesh						170
RISPERDAL						20
ELMIRON						2,170


(Pre-tax Dollars in Millions)	Fiscal Second Quarter Ended	Fiscal Six Months Ended
Innovative Medicine Segment(1)	$(63)	81
MedTech Segment(2)	52	79
Total Programs	$(11)	160


	Fiscal Second Quarters Ended							Fiscal Six Months Ended
	2024				2023			2024				2023
(Dollars in Millions)	Amount		% of Sales*		Amount	% of Sales*		Amount		% of Sales*		Amount	% of Sales*
Innovative Medicine	$2,722		18.8	%	$3,048	22.2	%	$5,618		20.0	%	$5,826	21.5	%
MedTech	718		9.0		655	8.4		1,364		8.6		1,332	8.7
Total research and development expense	$3,440		15.3	%	$3,703	17.2	%	$6,982		16.0	%	$7,158	16.9	%
Percent increase/(decrease) over the prior year	(7.1	%)						(2.5	%)
*As a percent to segment sales


Fiscal Six Months
(Dollars in Billions)(Income)/Expense	June 30, 2024		July 2, 2023	Change

Litigation related(1)	3.1		6.8	(3.7)
Acquisition, Integration and Divestiture related	0.5		0.1	0.4
Changes in the fair value of securities(2)	0.4		0.1	0.3
COVID-19 Vaccine manufacturing related exit costs	0.1		0.4	(0.3)
Employee benefit plan related	(0.5)		(0.7)	0.2
Other	(0.5)		(0.1)	(0.4)


Total Other (Income) Expense, Net	$	3.1	6.6	(3.5)


Fiscal Second Quarter
(Dollars in Billions)(Income)/Expense	June 30, 2024		July 2, 2023	Change

Acquisition, Integration and Divestiture related	$	0.4	—	0.4
Litigation related(1)	0.4		(0.1)	0.5
Changes in the fair value of securities(2)	0.4		—	0.4
COVID-19 Vaccine manufacturing related exit costs	0.1		0.2	(0.1)
Employee benefit plan related	(0.2)		(0.4)	0.2
Other	(0.4)		(0.1)	(0.3)


Total Other (Income) Expense, Net	$	0.7	(0.4)	1.1


	Income Before Tax		Segment Sales		Percent of Segment Sales
(Dollars in Millions)	June 30, 2024	July 2, 2023	June 30, 2024	July 2, 2023	June 30, 2024		July 2, 2023
Innovative Medicine	$10,428	$9,214	$28,052	$27,144	37.2	%	33.9	%
MedTech	2,609	3,080	15,778	15,269	16.5		20.2
Segment earnings before tax	13,037	12,294	43,830	42,413	29.7		29.0
Less: Expenses not allocated to segments(1)	3,575	7,275
Worldwide income before tax	$9,462	$5,019	$43,830	$42,413	21.6	%	11.8	%


(Dollars In Billions)
21.9		Q4 2023 Cash and cash equivalents balance
9.3		net cash generated from operating activities
(14.2)		net cash used by investing activities
8.1		net cash generated from financing activities
(0.2)		effect of exchange rate changes on cash and cash equivalents


$	24.9	Q2 2024 Cash and cash equivalents


(Dollars In Billions)
$	7.9	Net earnings
2.1		non-cash expenses and other adjustments primarily for depreciation and amortization, stock-based compensation, and asset write-downs partially offset by the net gain on sale of assets/businesses and the deferred tax provision
(1.9)		an increase in accounts receivable and inventories
0.4		an increase in accounts payable and accrued liabilities
3.7		a decrease in other current and non-current assets
(3.1)		a decrease in other current and non-current liabilities
0.2		Other and rounding
$	9.3	Net cash flows from operations


(Dollars In Billions)
$	(5.9)	dividends to shareholders
(1.6)		repurchase of common stock
15.9		net proceeds from short and long term debt



0.3		proceeds from stock options exercised/employee withholding tax on stock awards, net
0.3		credit support agreements activity, net
(1.0)		Settlement of convertible debt acquired from Shockwave
0.1		Other and rounding
$	8.1	Net cash from financing activities


Fiscal Month Period	Total Number of Shares Purchased(1)	Avg. Price Per Share	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
April 1, 2024 through April 28, 2024	281,530	145.46	—	—
April 29, 2024 through May 26, 2024	350,000	148.98	—	—
May 27, 2024 through June 30, 2024	289,994	145.27	—	—
Total	921,524	146.74	—	—


EX-101.INS						Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
EX-101.SCH						Inline XBRL Taxonomy Extension Schema
EX-101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase
EX-101.LAB						Inline XBRL Taxonomy Extension Label Linkbase
EX-101.PRE						Inline XBRL Taxonomy Extension Presentation Linkbase
EX-101.DEF						Inline XBRL Taxonomy Extension Definition Document

Exhibit 104:						Cover Page Interactive Data File––the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.


By			/s/ J. J. Wolk
			J. J. Wolk, Executive Vice President, Chief Financial Officer (Principal Financial Officer)