Johnson & Johnson today announced results for Q4 and full-year 2020. “Our notable full-year performance reflects the continued confidence from patients, physicians, customers, and consumers in our life-enhancing products and medicines, particularly throughout the COVID-19 pandemic,” said Alex Gorsky, Chairman and Chief Executive Officer. “I’m incredibly proud of our Johnson & Johnson teams around the world for going above and beyond to meet stakeholder needs. These efforts, and our commitment to families around the world as the largest broad-based healthcare company, enabled us to lead in the fight against COVID-19. We continue to progress our COVID-19 vaccine candidate and look forward to sharing details from our Phase 3 study soon. Johnson & Johnson was built for times like these, and I am extremely confident in our ability to deliver lasting value and continued innovation in 2021 and for years to come.”
Consumer Health
Consumer Health worldwide operational sales, excluding the net impact of acquisitions and divestitures, grew 3.1% driven by U.S. growth in over-the-counter products including TYLENOL analgesics, PEPCID and ZYRTEC; LISTERINE mouthwash in oral care products; OGX in skin health/beauty products and wound care products. Growth was negatively impacted by COVID-19 primarily in skin health/beauty and international baby care partially offset by increased COVID-19 demand in oral care products.
Pharmaceutical
Pharmaceutical worldwide operational sales, excluding the net impact of acquisitions and divestitures, grew 8.4%* driven by STELARA (ustekinumab), a biologic for the treatment of a number of immune-mediated inflammatory diseases, DARZALEX (daratumumab), for the treatment of multiple myeloma, IMBRUVICA (ibrutinib), an oral, once-daily therapy approved for use in treating certain B-cell malignancies, a type of blood or lymph node cancer, ERLEADA (apalutamide), a next-generation androgen receptor inhibitor for the treatment of patients with prostate cancer, TREMFYA (guselkumab), a biologic for the treatment of adults living with moderate to severe plaque psoriasis, and for adults with active psoriatic arthritis, INVEGA SUSTENNA/XEPLION/INVEGA TRINZA/TREVICTA (paliperidone palmitate), long-acting, injectable atypical antipsychotics for the treatment of schizophrenia in adults, OPSUMIT (macitentan), an oral endothelin receptor antagonist indicated for the treatment of pulmonary arterial hypertension to delay disease progression and UPTRAVI (selexipag), an oral prostacyclin receptor agonist used to treat pulmonary arterial hypertension and reduce hospitalization. This growth was partially offset by the negative impact of COVID-19 as well as biosimilar and generic competition, with declines primarily in REMICADE (infliximab), a biologic approved for the treatment of a number of immune-mediated inflammatory diseases, U.S. ZYTIGA (abiraterone acetate), an oral, once-daily medication for use in combination with prednisone for the treatment of metastatic castration-resistant prostate cancer, and international VELCADE (bortezomib), a proteasome inhibitor for the treatment of multiple myeloma.
Medical Devices
Medical Devices worldwide operational sales, excluding the net impact of acquisitions and divestitures, declined by 10.5%*. The decline was primarily driven by the negative impact of the COVID-19 pandemic and the associated deferral of medical procedures to our Surgery, Orthopaedics, and Vision businesses. The decline was partially offset by growth in the Interventional Solutions business led by electrophysiology products. Results reflect market recovery in the second half of 2020.
NOTABLE NEW ANNOUNCEMENTS IN THE QUARTER:
The information contained in this section should be read in conjunction with Johnson & Johnson’s other disclosures filed with the Securities and Exchange Commission, including its Current Reports on Form 8-K, Quarterly Reports on Form 10-Q and Annual Reports on Form 10-K. Copies of these filings are available online at sec.gov, jnj.com, or on request from Johnson & Johnson. The reader is also encouraged to review all other news releases available online in the Investors section of the company’s website at news releases.
OVERALL FINANCIAL RESULTS:
|
FOURTH QUARTER |
TWELVE MONTHS |
||||||
|
($ in Millions, except EPS) |
2020 |
2019 |
% Change |
2020 |
2019 |
% Change |
|
|
Reported Sales |
$ 22,475 |
$ 20,747 |
8.3% |
$ 82,584 |
$ 82,059 |
0.6% |
|
|
Net Earnings |
1,738 |
4,010 |
(56.7)% |
14,714 |
15,119 |
(2.7)% |
|
|
EPS (diluted) |
$ 0.65 |
$ 1.50 |
(56.7)% |
$ 5.51 |
$ 5.63 |
(2.1)% |
|
|
Non-GAAP* |
FOURTH QUARTER |
TWELVE MONTHS |
|||||
|
($ in Millions, except EPS) |
2020 |
2019 |
% Change |
2020 |
2019 |
% Change |
|
|
Operational Sales1,2 |
N/A |
N/A |
7.1% |
N/A |
N/A |
1.2% |
|
|
Adjusted Operational Sales1,3 |
N/A |
N/A |
7.3% |
N/A |
N/A |
1.5% |
|
|
Adjusted Net Earnings1,4 |
4,965 |
5,027 |
(1.2)% |
21,433 |
23,310 |
(8.1)% |
|
|
Adjusted EPS (diluted)1,4 |
$ 1.86 |
$ 1.88 |
(1.1)% |
$ 8.03 |
$ 8.68 |
(7.5)% |
|
|
1 Non-GAAP financial measure; refer to reconciliations of non-GAAP financial measures included in accompanying schedules |
|
2 Excludes the impact of translational currency |
|
3 Excludes the net impact of acquisitions and divestitures and translational currency |
|
4 Excludes intangible amortization expense and special items |
REGIONAL SALES RESULTS:
|
FOURTH QUARTER |
% Change |
|||||
|
($ in Millions) 1 |
20202 |
20192 |
Reported2 |
Operational1,2 |
Currency2 |
Adjusted |
|
U.S. |
$ 11,809 |
$ 10,774 |
9.6% |
9.6% |
– |
9.6 |
|
International |
10,666 |
9,973 |
7.0% |
4.3% |
2.7 |
4.8 |
|
Worldwide |
$ 22,475 |
$ 20,747 |
8.3% |
7.1% |
1.2 |
7.3 |
|
TWELVE MONTHS |
% Change |
|||||
|
($ in Millions) 1 |
20202 |
20192 |
Reported2 |
Operational1,2 |
Currency2 |
Adjusted |
|
U.S. |
$ 43,133 |
$ 42,097 |
2.5% |
2.5 |
– |
2.8 |
|
International |
39,451 |
39,962 |
(1.3)% |
(0.2) |
(1.1) |
0.2 |
|
Worldwide |
$ 82,584 |
$ 82,059 |
0.6% |
1.2 |
(0.6) |
1.5 |
|
1 Non-GAAP financial measure; refer to reconciliations of non-GAAP financial measures included in accompanying schedules |
|
2 Excludes the impact of translational currency |
|
3 Excludes the net impact of acquisitions and divestitures and translational currency |
|
Note: values may have been rounded |
SEGMENT SALES RESULTS:
|
FOURTH QUARTER |
% Change |
|||||
|
($ in Millions) 1 |
20201 |
20191 |
Reported2 |
Operational1,2 |
Currency1 |
Adjusted |
|
Consumer Health |
$ 3,618 |
$ 3,567 |
1.4% |
2.0 |
(0.6) |
2.1 |
|
Pharmaceutical |
12,268 |
10,548 |
16.3% |
14.6 |
1.7 |
14.6 |
|
Medical Devices |
6,589 |
6,632 |
(0.7)% |
(2.2) |
1.5 |
(1.5) |
|
Worldwide |
$ 22,475 |
$ 20,747 |
8.3% |
7.1 |
1.2 |
7.3 |
|
TWELVE MONTHS |
% Change |
|||||
|
($ in Millions) 1 |
20201 |
20191 |
Reported2 |
Operational1,2 |
Currency1 |
Adjusted |
|
Consumer Health |
$ 14,053 |
$ 13,898 |
1.1% |
3.0 |
(1.9) |
3.1 |
|
Pharmaceutical |
45,572 |
42,198 |
8.0% |
8.2 |
(0.2) |
8.4 |
|
Medical Devices |
22,959 |
25,963 |
(11.6)% |
(11.4) |
(0.2) |
(10.5) |
|
Worldwide |
$ 82,584 |
$ 82,059 |
0.6% |
1.2 |
(0.6) |
1.5 |
|
1 Non-GAAP financial measure; refer to reconciliations of non-GAAP financial measures included in accompanying schedules |
|
2 Excludes the impact of translational currency |
|
3 Excludes the net impact of acquisitions and divestitures and translational currency |
|
Note: values may have been rounded |
FULL-YEAR 2021 GUIDANCE:
Johnson & Johnson does not provide GAAP financial measures on a forward-looking basis because the company is unable to predict with reasonable certainty the ultimate outcome of legal proceedings, unusual gains and losses, acquisition-related expenses and purchase accounting fair value adjustments without unreasonable effort. These items are uncertain, depend on various factors, and could be material to Johnson & Johnson’s results computed in accordance with GAAP.
|
January 2021 |
|
|
($ in Billions, except EPS) |
|
|
Adjusted Operational Sales1,2 Change vs. Prior Year |
8.0% – 9.5% |
|
Operational Sales2 Change vs. Prior Year |
$88.8B – $90.0B 7.5% – 9.0% |
|
Estimated Reported Sales3 Change vs. Prior Year |
$90.5B – $91.7B 9.5% – 11.0% |
|
Adjusted Operational EPS (Diluted)2,4 Change vs. Prior Year |
$9.25 – $9.45 15.2% – 17.7% |
|
Adjusted EPS (Diluted)3,4 Change vs. Prior Year |
$9.40 – $9.60 17.1% – 19.6% |
|
1 Non-GAAP financial measure; excludes the net impact of acquisitions and divestitures |
|
2 Non-GAAP financial measure; excludes the impact of translational currency |
|
3 Calculated using Euro Average Rate: January 2021 = $1.21 (Illustrative purposes only) |
|
4 Non-GAAP financial measure; excludes intangible amortization expense and special items |
|
Johnson & Johnson and Subsidiaries |
|||||||||||||||||||
|
Supplementary Sales Data |
|||||||||||||||||||
|
(Unaudited; Dollars in Millions) |
FOURTH QUARTER |
TWELVE MONTHS |
|||||||||||||||||
|
Percent Change |
Percent Change |
||||||||||||||||||
|
2020 |
2019 |
Total |
Operations |
Currency |
2020 |
2019 |
Total |
Operations |
Currency |
||||||||||
|
Sales to customers by |
|||||||||||||||||||
|
geographic area |
|||||||||||||||||||
|
U.S. |
$ 11,809 |
10,774 |
9.6 |
% |
9.6 |
– |
$ 43,133 |
42,097 |
2.5 |
% |
2.5 |
– |
|||||||
|
Europe |
5,271 |
4,663 |
13.0 |
7.7 |
5.3 |
18,980 |
18,466 |
2.8 |
2.0 |
0.8 |
|||||||||
|
Western Hemisphere excluding U.S. |
1,404 |
1,495 |
(6.1) |
2.9 |
(9.0) |
5,335 |
5,941 |
(10.2) |
0.4 |
(10.6) |
|||||||||
|
Asia-Pacific, Africa |
3,991 |
3,815 |
4.6 |
0.7 |
3.9 |
15,136 |
15,555 |
(2.7) |
(3.1) |
0.4 |
|||||||||
|
International |
10,666 |
9,973 |
7.0 |
4.3 |
2.7 |
39,451 |
39,962 |
(1.3) |
(0.2) |
(1.1) |
|||||||||
|
Worldwide |
$ 22,475 |
20,747 |
8.3 |
% |
7.1 |
1.2 |
$ 82,584 |
82,059 |
0.6 |
% |
1.2 |
(0.6) |
|||||||
|
Note: Percentages have been calculated using actual, non-rounded figures and, therefore, may not recalculate precisely. |
|||||||||||||||||||
|
Johnson & Johnson and Subsidiaries |
||||||||||||||||||||
|
Supplementary Sales Data |
||||||||||||||||||||
|
(Unaudited; Dollars in Millions) |
FOURTH QUARTER |
TWELVE MONTHS |
||||||||||||||||||
|
Percent Change |
Percent Change |
|||||||||||||||||||
|
2020 |
2019 |
Total |
Operations |
Currency |
2020 |
2019 |
Total |
Operations |
Currency |
|||||||||||
|
Sales to customers by |
||||||||||||||||||||
|
segment of business |
||||||||||||||||||||
|
Consumer Health |
||||||||||||||||||||
|
U.S. |
$ 1,509 |
1,470 |
2.7 |
% |
2.7 |
– |
$ 6,362 |
5,839 |
9.0 |
% |
9.0 |
– |
||||||||
|
International |
2,109 |
2,097 |
0.5 |
1.5 |
(1.0) |
7,691 |
8,059 |
(4.6) |
(1.3) |
(3.3) |
||||||||||
|
3,618 |
3,567 |
1.4 |
2.0 |
(0.6) |
14,053 |
13,898 |
1.1 |
3.0 |
(1.9) |
|||||||||||
|
Pharmaceutical |
||||||||||||||||||||
|
U.S. |
7,116 |
6,169 |
15.3 |
15.3 |
– |
25,735 |
23,874 |
7.8 |
7.8 |
– |
||||||||||
|
International |
5,152 |
4,379 |
17.7 |
13.5 |
4.2 |
19,837 |
18,324 |
8.3 |
8.8 |
(0.5) |
||||||||||
|
12,268 |
10,548 |
16.3 |
14.6 |
1.7 |
45,572 |
42,198 |
8.0 |
8.2 |
(0.2) |
|||||||||||
|
Medical Devices |
||||||||||||||||||||
|
U.S. |
3,184 |
3,135 |
1.5 |
1.5 |
– |
11,036 |
12,384 |
(10.9) |
(10.9) |
– |
||||||||||
|
International |
3,405 |
3,497 |
(2.6) |
(5.5) |
2.9 |
11,923 |
13,579 |
(12.2) |
(11.8) |
(0.4) |
||||||||||
|
6,589 |
6,632 |
(0.7) |
(2.2) |
1.5 |
22,959 |
25,963 |
(11.6) |
(11.4) |
(0.2) |
|||||||||||
|
U.S. |
11,809 |
10,774 |
9.6 |
9.6 |
– |
43,133 |
42,097 |
2.5 |
2.5 |
– |
||||||||||
|
International |
10,666 |
9,973 |
7.0 |
4.3 |
2.7 |
39,451 |
39,962 |
(1.3) |
(0.2) |
(1.1) |
||||||||||
|
Worldwide |
$ 22,475 |
20,747 |
8.3 |
% |
7.1 |
1.2 |
$ 82,584 |
82,059 |
0.6 |
% |
1.2 |
(0.6) |
||||||||
|
Note: Percentages have been calculated using actual, non-rounded figures and, therefore, may not recalculate precisely. |
||||||||||||||||||||
|
Johnson & Johnson and Subsidiaries |
|||||||||
|
Condensed Consolidated Statement of Earnings |
|||||||||
|
(Unaudited; in Millions Except Per Share Figures) |
FOURTH QUARTER |
||||||||
|
2020 |
2019 |
Percent |
|||||||
|
Percent |
Percent |
Increase |
|||||||
|
Amount |
to Sales |
Amount |
to Sales |
(Decrease) |
|||||
|
Sales to customers |
$ 22,475 |
100.0 |
$ 20,747 |
100.0 |
8.3 |
||||
|
Cost of products sold |
7,814 |
34.8 |
7,134 |
34.4 |
9.5 |
||||
|
Gross Profit |
14,661 |
65.2 |
13,613 |
65.6 |
7.7 |
||||
|
Selling, marketing and administrative expenses |
6,457 |
28.7 |
6,039 |
29.1 |
6.9 |
||||
|
Research and development expense |
4,032 |
17.9 |
3,232 |
15.6 |
24.8 |
||||
|
In-process research and development |
37 |
0.2 |
– |
– |
|||||
|
Interest (income) expense, net |
74 |
0.3 |
4 |
0.0 |
|||||
|
Other (income) expense, net |
2,354 |
10.5 |
16 |
0.1 |
|||||
|
Restructuring |
60 |
0.3 |
104 |
0.5 |
|||||
|
Earnings before provision for taxes on income |
1,647 |
7.3 |
4,218 |
20.3 |
(61.0) |
||||
|
Provision for/(Benefit from) taxes on income |
(91) |
(0.4) |
208 |
1.0 |
(143.8) |
||||
|
Net earnings |
$ 1,738 |
7.7 |
$ 4,010 |
19.3 |
(56.7) |
||||
|
Net earnings per share (Diluted) |
$ 0.65 |
$ 1.50 |
(56.7) |
||||||
|
Average shares outstanding (Diluted) |
2,669.2 |
2,669.1 |
|||||||
|
Effective tax rate |
(5.5) |
% |
4.9 |
% |
|||||
|
Adjusted earnings before provision for taxes and net earnings(1) |
|||||||||
|
Earnings before provision for taxes on income |
$ 5,601 |
24.9 |
$ 5,628 |
27.1 |
(0.5) |
||||
|
Net earnings |
$ 4,965 |
22.1 |
$ 5,027 |
24.2 |
(1.2) |
||||
|
Net earnings per share (Diluted) |
$ 1.86 |
$ 1.88 |
(1.1) |
||||||
|
Effective tax rate |
11.4 |
% |
10.7 |
% |
|||||
|
(1)See Reconciliation of Non-GAAP Financial Measures. |
|||||||||
|
Johnson & Johnson and Subsidiaries |
|||||||||
|
Condensed Consolidated Statement of Earnings |
|||||||||
|
(Unaudited; in Millions Except Per Share Figures) |
TWELVE MONTHS |
||||||||
|
2020 |
2019 |
Percent |
|||||||
|
Percent |
Percent |
Increase |
|||||||
|
Amount |
to Sales |
Amount |
to Sales |
(Decrease) |
|||||
|
Sales to customers |
$ 82,584 |
100.0 |
$ 82,059 |
100.0 |
0.6 |
||||
|
Cost of products sold |
28,427 |
34.4 |
27,556 |
33.6 |
3.2 |
||||
|
Gross Profit |
54,157 |
65.6 |
54,503 |
66.4 |
(0.6) |
||||
|
Selling, marketing and administrative expenses |
22,084 |
26.8 |
22,178 |
27.0 |
(0.4) |
||||
|
Research and development expense |
12,159 |
14.7 |
11,355 |
13.8 |
7.1 |
||||
|
In-process research and development |
181 |
0.2 |
890 |
1.1 |
|||||
|
Interest (income) expense, net |
90 |
0.1 |
(39) |
0.0 |
|||||
|
Other (income) expense, net |
2,899 |
3.5 |
2,525 |
3.1 |
|||||
|
Restructuring |
247 |
0.3 |
266 |
0.3 |
|||||
|
Earnings before provision for taxes on income |
16,497 |
20.0 |
17,328 |
21.1 |
(4.8) |
||||
|
Provision for taxes on income |
1,783 |
2.2 |
2,209 |
2.7 |
(19.3) |
||||
|
Net earnings |
$ 14,714 |
17.8 |
$ 15,119 |
18.4 |
(2.7) |
||||
|
Net earnings per share (Diluted) |
$ 5.51 |
$ 5.63 |
(2.1) |
||||||
|
Average shares outstanding (Diluted) |
2,670.7 |
2,684.3 |
|||||||
|
Effective tax rate |
10.8 |
% |
12.7 |
% |
|||||
|
Adjusted earnings before provision for taxes and net earnings (1) |
|||||||||
|
Earnings before provision for taxes on income |
$ 25,428 |
30.8 |
$ 28,225 |
34.4 |
(9.9) |
||||
|
Net earnings |
$ 21,433 |
26.0 |
$ 23,310 |
28.4 |
(8.1) |
||||
|
Net earnings per share (Diluted) |
$ 8.03 |
$ 8.68 |
(7.5) |
||||||
|
Effective tax rate |
15.7 |
% |
17.4 |
% |
|||||
|
(1)See Reconciliation of Non-GAAP Financial Measures. |
|||||||||
|
Johnson & Johnson and Subsidiaries |
|||||||
|
Reconciliation of Non-GAAP Financial Measures |
|||||||
|
Fourth Quarter |
Twelve Months Ended |
||||||
|
(Dollars in Millions Except Per Share Data) |
2020 |
2019 |
2020 |
2019 |
|||
|
Net Earnings, after tax- as reported |
$1,738 |
$4,010 |
$14,714 |
$15,119 |
|||
|
Pre-tax Adjustments |
|||||||
|
Intangible Asset Amortization expense |
1,234 |
1,142 |
4,660 |
4,528 |
|||
|
Litigation expense, net |
2,902 |
264 |
5,112 |
5,096 |
|||
|
IPR&D |
37 |
– |
181 |
890 |
|||
|
Restructuring related |
85 |
251 |
448 |
611 |
|||
|
Acquisition and Integration related ¹ |
14 |
90 |
(1,073) |
319 |
|||
|
Unrealized (gains)/losses on securities |
(373) |
(350) |
(547) |
(567) |
|||
|
Medical Device Regulation 2 |
55 |
– |
144 |
– |
|||
|
Other |
– |
13 |
6 |
20 |
|||
|
Tax Adjustments |
|||||||
|
Tax impact on special item adjustments 3 |
(606) |
(123) |
(1,608) |
(1,977) |
|||
|
Tax legislation and other tax related |
(121) |
(270) |
(604) |
(729) |
|||
|
Adjusted Net Earnings, after tax |
$4,965 |
$5,027 |
$21,433 |
$23,310 |
|||
|
Average shares outstanding (Diluted) |
2,669.2 |
2,669.1 |
2,670.7 |
2,684.3 |
|||
|
Adjusted net earnings per share (Diluted) |
$1.86 |
$1.88 |
$8.03 |
$8.68 |
|||
|
Operational adjusted net earnings per share (Diluted) |
$1.82 |
$8.00 |
|||||
|
Notes: |
||||
|
1 |
Acquisition and integration related costs for 2020 primarily includes a Contingent Consideration reversal of $1,148M related to the timing of certain developmental milestones associated with the Auris Health acquisition. |
|||
|
2 |
European Medical Device Regulation (MDR) costs represent one-time compliance costs for the Company’s previously registered products. MDR is a replacement of the existing European Medical Devices Directive regulatory framework, and manufacturers of currently marketed medical devices are required to comply with EU MDR beginning in May 2021. The Company considers the adoption of EU MDR to be a significant one-time regulatory change and is not indicative of on-going operations. The Company has excluded only external third-party regulatory and consulting costs from its Medical Devices operating segments’ measures of profit and loss used for making operating decisions and assessing performance. |
|||
|
3 |
The tax impact related to special item adjustments reflects the current and deferred income taxes associated with the above pre-tax special items in arriving at adjusted earnings. |
|||
|
Prior year amounts have been reclassified to conform to current year disclosure |
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|
Johnson & Johnson and Subsidiaries |
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|
Reconciliation of Non-GAAP Financial Measure |
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|
Adjusted Operational Sales Growth |
||||||||
|
FOURTH QUARTER 2020 ACTUAL vs. 2019 ACTUAL |
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|
Segments |
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|
Consumer Health |
Pharmaceutical |
Medical Devices |
Total |
|||||
|
WW As Reported |
1.4% |
16.3% |
(0.7)% |
8.3% |
||||
|
U.S. |
2.7% |
15.3% |
1.5% |
9.6% |
||||
|
International |
0.5% |
17.7% |
(2.6)% |
7.0% |
||||
|
WW Currency |
(0.6) |
1.7 |
1.5 |
1.2 |
||||
|
U.S. |
– |
– |
– |
– |
||||
|
International |
(1.0) |
4.2 |
2.9 |
2.7 |
||||
|
WW Operational |
2.0% |
14.6% |
(2.2)% |
7.1% |
||||
|
U.S. |
2.7% |
15.3% |
1.5% |
9.6% |
||||
|
International |
1.5% |
13.5% |
(5.5)% |
4.3% |
||||
|
General Surgery |
||||||||
|
Advanced Sterilization Products |
0.6 |
0.2 |
||||||
|
U.S. |
0.0 |
0.0 |
||||||
|
International |
1.0 |
0.4 |
||||||
|
All Other Acquisitions and Divestitures |
0.1 |
0.0 |
0.1 |
0.1 |
||||
|
U.S. |
0.1 |
(0.1) |
0.2 |
0.0 |
||||
|
International |
0.1 |
0.2 |
0.0 |
0.1 |
||||
|
WW Adjusted Operational |
2.1% |
14.6% |
(1.5)% |
7.3% |
||||
|
U.S. |
2.8% |
15.2% |
1.7% |
9.6% |
||||
|
International |
1.6% |
13.7% |
(4.4)% |
4.8% |
||||
|
Note:Percentages are based on actual, non-rounded figures and may not sum |
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