Good morning and welcome to the Johnson & Johnson First Quarter 2013 Earnings Conference Call. All participants will be able to listen-only until the question and answer session of the conference. This call is being recorded. (Operator Instructions) I would now like to turn the conference over to Johnson & Johnson. You may begin.

Good morning and welcome. I’m Louise Mehrotra, Vice President of Investor Relations for Johnson & Johnson, and it is my pleasure this morning to review our business results for the first quarter of 2013. Joining me on the call today is Dominic Caruso, Vice President, Finance and Chief Financial Officer. A few logistics before we get into the details. This review is being made available to a broader audience via webcast accessible through the Investor Relations’ section of the Johnson & Johnson website. I’ll begin by briefly reviewing highlights of the first quarter for the corporation and highlights for our three business segments. Following my remarks, Dominic will provide some additional commentary on the financial results and guidance for 2013. We will then open the call to your questions. We expect the call to last approximately 1 hour. Included with the press release that was issued earlier this morning is the schedule of sales for key products and/or businesses to facilitate updating your model. These schedules are available on the Johnson & Johnson website as is the press release. Before I get into the results, let me remind you that some of the statements made during this review may be considered forward-looking statements. The 10-K for the fiscal year 2012 identifies certain factors that could cause the company’s actual results to differ materially from those projected in any forward-looking statements made today. The company does not undertake to update any forward-looking statements as a result of new information or future events or developments. The 10-K is available through the company or online. During the review, non-GAAP financial measures are used to provide information pertinent to ongoing business performance. These non-GAAP financial measures should not be considered replacements for GAAP results. Tables reconciling these measures to the most comparable GAAP measures…

Thank you, Louise, and good morning everyone. I would like to start by saying that our thoughts and prayers are with the families and victims of the tragic event in Boston yesterday. Now turning to the business of this call. I would like to provide some additional comments about our first quarter results, highlight some of our recent business and pipeline developments, and then provide guidance for you to consider in refining your models for 2013. I am pleased that we are off to a good start in 2013 with solid results in the first quarter. We continued delivering on our three near term priorities, building on the momentum in our pharmaceuticals business, integrating Synthes and returning a reliable supply of OTC products for the marketplace. I would like to make a few comments on the state of the healthcare market. While we believe that overall healthcare utilization trends continues to show signs of stabilization, the modest positive increases we saw in the fourth quarter do not appear to have persisted. And at this point we are not anticipating a meaningful market acceleration this year. Adapting to these changes in the healthcare environment is important and our leaders continue to apply financial discipline for operations while investing in key growth opportunities. Our growth strategies of creating value for innovation, global reach with a local focus, excellence in execution and leading with a purpose, are begin executed well across our businesses as you will see in the review of our highlights for the first quarter. The breadth of our business which provides balance and consistency to our overall performance, as well as the extraordinary achievements and dedication of our people in all of our locations around the world, positions us well to sustain and drive growth in this increasingly dynamic global…

Thank you, Dominic. Stephanie, can you please give instructions for the Q&A session?

(Operator instructions). And your first question is from the line of Matthew Dodds with Citigroup. Matthew Dodds – Citigroup: A couple of quick questions. First on the managed Medicaid, how far back does that accrual go and why in Q1? Because you didn’t highlight it in the fourth quarter call.

Sure, Matt. Good question. The Affordable Care Act was instituted in 2010, in March of 2010 and it’s only recently in the first quarter that we received sufficient information from the various states to true up the estimates we had made leading from the time that legislation was passed till now. So hopefully that answers your question. Matthew Dodds – Citigroup: It does. And then one more quick one for you, Dominic. On foreign exchange, it’s now up to a negative 100 basis points on the topline, but it’s positive $0.02 in the bottom. Usually does it work that way with you? How come it’s a positive on the earnings this time?

Well, the major swing currencies, Matt that are negatively impacting sales are primarily currencies where although there may be significant sales growth, there is lesser earnings impact. So for example the Yen has dramatically weakened. However, the amount of money we earn in that currency is different than the level of sales in that currency or as the euro, which is where most of the profitability of the company reside ex-U.S., has not been impacted as greatly as some of the currencies like Yen. So there is a different weighting factor of the currency's impact on sales as there is on earnings.

Your next question is from Larry Biegelsen with Wells Fargo.

Dominic, could you just help us with the outlook on the diabetes blood glucose monitoring business. You know the Medicare cuts start I think in July 2013, so I assume the U.S. growth will probably get worse before it gets better. Maybe if you can just help us with some metrics to understand how to forecast that business, given what's going on there. And maybe a little bit about your strategy to address these issues and then I had one follow-up.

Sure, Larry. Great questions. I know you have all been following the recent legislation, it provides a pretty dramatic reduction in pricing for diabetes test strips. Of course that legislation pertains to the Medicare portion of the business. I think roughly the Medicare portion of the business for us is in the 20% to 25% range. So it's not obviously the entire business. And then in terms of the strategy going forward, of course you know we just -- I just described earlier that we were pleased to have filed an application for a new blood glucose monitoring system, the continuous glucose monitoring system with the Dexcom technology. So I think it's important that we continue to innovate where we have the ability to provide patients and healthcare professionals with the tools to better manage their diabetes care. I think that will always be an important part of what we continue to do, although we will have to manage through the pricing impacts that pertain to the Medicare portion of our business and that I just noted.

And then one more for you. You know more and more of your peers are excluding amortization from non-GAAP earnings. You mentioned I think $1.4 billion and that by our math that potentially reduces your stock price by about $6. Do you think that impacts your valuation? Is that something that you may be willing to revisit in the future excluding it from your non-GAAP earnings? Thanks.

Right. Larry, so we are certainly aware of that. I think that if it was just as easy, if it was that easy for me to just change our earnings by excluding the amortization and our stock would go up $6, I guess we would do that in a heartbeat. But we think our company is very well followed, understood, and we try to be as transparent as possible with our earnings guidance. And hopefully the data we give you provides you all enough data to model the company appropriately.

Your next question is from Mike Weinstein, JPMorgan.

I guess the one piece in the guidance that surprised me, Dominic, was what Matt was touching on which is the FX swing. So you had 130 basis points swing on the top line versus your initial guidance in the fourth quarter, but that’s only $0.03 impact to your EPS guidance for the year. That’s purely just because of the differentials and profits or is that related more to either your transfer pricing or some hedges you may have there that we are just not aware of?

Well, it's primarily related to the reasons I mentioned. You know currencies like the Yen have dramatically decreased but a currency like the euro, for example, is only off two or three pennies from our previous guidance and most of our ex-U.S. earnings are quite frankly in the euro zone. So the impact to earnings is not as pronounced as the overall basket of currency would indicate.

I wanted to focus on some of your commentary around utilization and your medical device end markets. Obviously, I understood you were trying to signal that you don’t see a pick up in some of your device end markets. And you also made comments about your kind of the competitive positioning in a couple of them. So maybe you could spend a minute more maybe on both. And I want to focus on two areas, one is general surgery and the second is orthopedic. So can you just give us more of a sense of both how you are feeling about those end markets and competitively, particularly on the general surgery side where you may be seeing some impact.

Mike, with respect to utilization, we were trying to follow what's happening in the market place and obviously we have the good vantage point from where we stand with the broad-based business that we have, but we did not see any meaningful continuation of the upswing that we saw, although it was modest in the fourth quarter. We didn’t see that persist into the first quarter and we also know that certain hospitals are already predicting lower levels of procedure volume than they had previously indicated. We just saw something this morning from HCA for example that talked about the level of procedure volume that they see which is quite frankly lower than the level they had predicted when they announced their guidance for 2013. So overall I think that the market is probably seeing some seasonality quite frankly. So if I comment on orthopedics first, we did in fact see an uptick in the orthopedics market overall and we did particularly well in the fourth quarter. We did not see that persist in the first quarter of 2013, although there is some noise there of course because then you have less selling days as Louise pointed out. So if you neutralize for that, it’s about equal in terms of the overall impact to our business first quarter versus fourth quarter. So no great acceleration, but no deceleration per se in orthopedics, just really the selling days impact is what is dramatically impacting that business. For surgery, there’s a number of factors that we mentioned. For example lowering levels of inventory by distributors, some pricing impact and we did see some competitive inroads in general surgery and obviously our response to that is to continue to improve with the offering of products that we have like the ENSEAL product that I just described were recently produced. So I’d say more competitive pressures in surgery, less so in orthopedics if you were distinguishing those two particular markets.

Your next question is from Kristen Stewart, Deutsche Bank Kristen Stewart – Deutsche Bank: Just going back to the guidance and I guess increasing the constant currency sales guidance, I just want to be clear on what gives you I guess the comfort that you can raise it at this stage of the year especially given or you just described as being generally weak I guess within the medical device business and it sounds like your expectations for utilization in that category or more moderate relative to what you saw entering the year.

Sure, Kristen. So that’s a good observation obviously, but as you know we have a broad based business. So even though we may see some weakness in the MD&D market, we’re very pleased with the launch of the products in the pharmaceutical market. We did have the adjustment that Louise described that was obviously positive for the quarter and positive for the year and our consumer business is also a very good start as well and we expect that to pick up as products continue to come into the marketplace from the products that were previously off the market. So overall the breadth of our business allows us to feel comfortable and although some areas of the business we may experience some market weaknesses, other areas of the business are more than picking up. So that gives us good confidence to lean forward in terms of how our business is doing for the balance of 2013. Kristen Stewart – Deutsche Bank: And then any update on the diagnostics business just in terms of your thinking on that franchise, whether it’s a spin-off of selling it?

No. No update just yet. We’re still going through the process and it’s probably too early to comment.

Your next question is from Rajeev Jashnani with UBS.

colorary:

Sure, Rajeev. Well, we are very pleased with the rebound in the consumer business. As you saw, the OTC business in the U.S was up 14%. I think that has to do with two things, the expected rollout of our products back in the marketplace, but also a pretty healthy, I can say that in quotes, “healthy” cold and flu season from our perspective. So I think we did benefit from that. I think we are basically on track as we thought we would be to return about 75% of the products that were previously off the market to back on to the market. So our plan is unfolding as we have predicted it would and it looks like we are going to see a buildup throughout the remainder of the year. You know both the intermittent supply differences between the products, so it's not as if 75% of the entire volume is back in the business but 75% of the brands will be on the shelves by the end of the year, we feel pretty confident about that. In terms of managing margins, in that business I think our team of leaders and consumer have done a very good job of managing in a very tough time and they will continue to do that, I am sure, going forward. And as the OTC products return to the marketplace, continue to build back share, that’s obviously a very profitable piece of the business so we would expect that they would improve their margins accordingly. I would caution, though, in terms of making sure that you understand that when these products come back to the market, we are going to do whatever we can to gain share and invest appropriately behind them. So we think that investment now will more than pay off in the future. So we would expect the return of profitability would be tempered in the consumer business as we do the right things to bring the products back to the market.

Thank you. I just have one follow-up, if you don’t mind, on INVOKANA. Perhaps you could talk about the resources you are putting behind that launch and I know we will talk about this in a month or so at the pharma meetings, but where do you see this class in the broader spectrum of diabetes care. Thank you very much.

Sure. Let me defer the comment on the broader class of diabetes care until May 23rd when we have our experts there. Obviously I hope you will be there as well others, to hear from our leaders who have much more knowledge about that market. But we are obviously very pleased with having this approval of the first in its class, and the indication as you know is broad and the adverse event profile is very manageable. So we think this is an important addition to the armamentarium of care for diabetes patients. So I will let Joakim and others in our business to talk about the impact that they see overall in the marketplace. I would say that overall the pharma business is doing well, really well. So we are very pleased with that. And the launches have gone incredibly well despite the fact that we have seen some competition as you all know. I mean you all have written very vividly about the new products come in the market in various classes like in XARELTO's class and in ZYTIGA's class. So you get the products pretty well. So I say that because we have really focused our efforts on clinically differentiating our products and I say that about INVOKANA as well. And I think our scientific teams led by Paul Stoffels and Bill Hait have done a great job of selecting the right clinical profile for the market place. And then coupled with the commercial excellence that’s led by Joakim and his team, that’s a great combination. So we feel very good about our progress in the pharmaceutical marketplace.

Do you have one more question?

I did, and I apologize I am dragging on. But, Dominic, you take the [pharma] you said it's quite well, consumer, there is some opportunity for margin perhaps longer term. How do you feel about the long-term margin trajectory of the company, and that’s it from me. Thank you.

Yeah. Well, Rajeev, you know, we have good healthy margins today. We are managing through what I mentioned at our call in January when I was with you all. That as of now, we have $1 billion of cost of U.S. healthcare legislation embedded in our business and we are able to manage through that. So I give our business leaders around the world a lot of credit for being able to manage in the various dynamics of the marketplace including slower growth markets and including areas of the business where cost pressures are continuing. So I think we have done a good job at doing that and I expect we will continue to do a good job of doing that, and we will always keep a focus on investing appropriately for the future. So each time we give guidance, hopefully you will get a clear picture of how we are doing that while also investing in the future, but I’ll say it’s not easy but I give a lot of credit to the teams of people and leaders around the world who are experts at being able to manage well in challenging times.

Your next question is from Derrick Sung with Sanford C. Bernstein.

I wanted to go back to procedure volumes, in particular get some color from you on what you’re seeing in Europe. On the MD&D side, how much of the selling days impacted your European years? Maybe if you can comment specifically on orthopedics, how much of the slowdown there was selling days versus procedure volume.

I’ll ask Louise to help me with that, but of course in Europe you have the dynamics of the Easter holiday season as well as that was in the first quarter of this year compared to the second quarter of last year. Louise, maybe you can give some more specifics on the particular question that Derrick is asking.

Sure. The U.S it was about one day and in Europe it was probably about two days and you know that’s rather a rough calculation, but it impacted growth about 1.5% in terms of sales, about 1% in the U.S and about I think 2.5% outside the U.S.

Okay, but generally speaking your sense is that, are you seeing any change say from Q4 in terms of austerity measures procedure volumes, things of that nature, anything that you’d call out?

In terms of the austerity measures, it’s very similar to what we saw in the fourth quarter, but we are still feeling it as everybody else is feeling it, but we are the first company that’s out. So we need to wait for the others to report.

Okay. While you’re going through your numbers, would you mind giving us the price mix write down for hips, knees and spine in the U.S?

Sure. So in the U.S, in the first quarter, price was down about 4% and that’s fairly similar to what it was in the fourth quarter, a little bit more unfavorable. And in terms of mix, it was actually 1% favorable. So you came out to about a 3% unfavorable for the hips. In terms of knees, it’s about 2% unfavorable, 1.5%, 2% unfavorable and totally offset by favorable mix. So you actually come to about 0.5 a point favorable on the knee.

And what about spine?

In terms of spine, we are about 3% negative in price and again this is only U.S and we are positive in terms of mix by about 4%. So netting about 1% positive.

Maybe just one more quickly for Dominic. I noticed that in your special items you increased accrual due to pending litigation on product liability. I was just wondering if you could comment there on, remind us on the total amount of accruals that you’re taking and maybe also if you can comment on how these pending product litigations might impact your thinking around use of cash as you move forward. Just help us get comfortable with that.

Well, with respect to the total accrual comment there, I’m not going to comment specifically and I’ll just refer you to our 10-K disclosures regarding the status of the various legal matters. In terms of use of cash, these litigation accruals obviously sometimes extend for years until the actual cash is disbursed. So although we contemplated in our cash planning, I don’t necessarily associate the specific accrual on any one quarter or any one year with the cash impact in any quarter or any one year and I’m happy to say as you know, we generate substantially strong cash flows year in and year out and now the team will continue to focus on that.

Your next question is from the line of Tony Butler with Barclays Capital.

I’d like to focus for a minute if we could within the pharmaceutical division and particularly again with ZYTIGA. There was a patient assistance program in Q4. I assume that had concluded and actually led to fairly substantial sales in Q1 and I’m curious if we can break that apart, that is to say does that affect continuing to Q2? The second part of the question is around international demand which was up 22% sequentially and again very, very strong demand. Was that due to the countries which I realize Louise I think you mentioned 70 odd, 79 particular countries which were approved but still extremely strong growth and I recognize that there was a pre-chemo approval earlier in the year. Was that the principal driver? And the last question again on the same product really is, is there any attempt to give some consideration of strategy around the patent extension of the product. Thanks very much.

I will take the first one on the patient assistance. So we have a patient assistance program in place and it continues to be in place. It's part of what we do for all of our products. What you saw in the fourth quarter was a replenishment to the wholesalers of certain of the ZYTIGA products. So it has nothing to do with whether or not we have implemented a patient assistance program, we always have patient assistance programs in place for people that need the products.

Right. With respect to the balance of the questions on ZYTIGA, I am going to not comment currently on the status of patent extension strategies, except to say that obviously our teams are working on that. In terms of the overall impact of ZYTIGA's worldwide sales, other than what Louise mentioned on patient assistance which is not really a major impact. The major impacts you did see were the chemo naïve indication, and you are absolutely right, Tony, a number of new markets outside the U.S., specifically in Europe, came online during the quarter and will continue to come online for the balance of the year. So those two factors, pre-chemo and additional country approvals are the major drivers of the uptake in ZYTIGA sales.

Your next question is from the line of Rick Wise with Stifel.

Couple of things. Dominic, back to the U.S. weakness question. Did you actually expect a stronger O-U.S. performance ex all the noise and did the weakness that you clearly saw and are talking about, did it accelerate or pickup throughout the quarter or was it just consistently below fourth quarter trends?

So just to clarify your question, the weakness that you are referring to in the U.S. is in the medical device business, not in pharma, not in consumer.

Exactly.

And you are right, there was a lot of noise in the quarter and we tried to parse through that. After parsing through all the noise including selling days etcetera, Louise's data indicated -- Louise's comments indicated that overall the medical device business is probably flat or modestly increased in the first quarter. But the major driver of that is in fact the utilization trends that we did not see accelerate in the first quarter across primarily the surgery businesses including outpatient surgeries etcetera, and some competitive pressures that I have mentioned earlier. So I can't comment specifically month-by-month in the quarter but I would say that overall the trends that you saw a modest uptick in the fourth quarter did not persist into the first quarter. So whether that's seasonality and how people use their high deductible insurance plans or not, we will have to wait and see as others report, but that maybe a contributing factor and we expected to see some of that in the first quarter.

And I think you also mentioned Dominic that possible inventory levels were down, I would say again, because I saw we would be through most of that process. Is it much more to go there or is that actually something encouraging for later quarters?

Yeah, I think that in this particular quarter from the best information we have is related to system implementations and other factors and the particular distributors that we deal with and not something that we would expect to continue happening for the remaining quarters of the year.

Great. And one last one. At the January analyst day, obviously by talking about exploring strategic alternatives for diagnostics, it seems like Alex both by that statement and just his tone, was signaling a bit more active stance towards portfolio review. You are always buying and selling and reviewing, but should be expect a little more active stance now with Alex on board and given the ongoing challenges. Thank you.

So, Rick, well, I think as Alex mentioned in his commentary that we always obviously look at our portfolio in a strategic way. I think with changes in the marketplace that we see happening in healthcare, I think it's even more important for us to be very discerning and very deliberate about the places we will play in where we can make a big difference and areas where we may not be able to make a difference or where in fact, investment may not be worth it or the property maybe better in someone else's hands. So I don’t know that it's precisely related to just Alex being on board, although that’s always been a strategic focus of Alex even before he became CEO, but I think it’s also how we adapt and how our management teams adapt to an ever changing marketplace. So I think we’ll continue to be deliberate in that regard and obviously we’ll update you along the way.

Your next question is from Jami Rubin with Goldman Sachs.

Dominic, can you just elaborate a little bit further on the managed Medicaid true-up? I’m confused about that that came on the left field. You had talked about how that impacted immunology and neurology products. Is that a onetime impact or do these growth rates reflect the organic growth rates that we should anticipate going forward? How do we think about that with respect to the numbers going forward for future quarters? And the other question relates to sequestration. You have a number of products that are reimbursed through Medicare part B including REMICADE and as you know there as a 2% reduction to Medicare part B which impacts part B’s ASP plus 6. So obviously Q1 didn’t reflect this, but are you seeing anything out there that could have some impact on your Medicare part B business? Thanks very much.

Sure, Jami. Thanks for the question. Well, with respect to the adjustment for the managed Medicare rebates and I’ll let Louise provide some additional color here, it’s pretty obvious that that level of adjustment is not really reflective of the current run rate of the product. So as Louise in her comments described the fact that excluding that adjustment, the pharmaceutical business in the U.S and worldwide, the underlying growth rate was 8%. So it’s not the 14% or 11% that you saw in the numbers because that would be less than transparent if we told you that. But the underlying rate of 8% is something we’re quite proud of to be honest. So nonetheless even despite that adjustment, the business is doing very well with a very healthy growth rate of 8%. This adjustment as I mentioned earlier relates to a catch up of Medicaid rebates for managed Medicaid in the States under the new legislation and various states across the United States that provided this information most recently to all pharmaceutical players and us in particular we took a look at all that data now that we have it in hand, although it’s not all in hand. So there may be some additional adjustments going forward and we’ll be transparent again if that should happen. Having said that, the level of rebates in the States that we have previously predicted are now predicted to be lower. That’s why we included this adjustment in our sales because we have previously reflected too high on rebate for example. So going forward, although the adjustment may not be that significant, the overall level of rebates are expected to be quite lower than we previously thought. And with respect to Medicaid part B and REMICADE, we’re obviously aware of the sequestration impact and you’re right, REMICADE is a significant product that reimbursement of the Medicare Part B and beginning in April we instituted a program with our REMICADE infusion customers on their contract to receive a discount on the continued use of REMICADE to help them deal with and help them offset the impact of this reimbursement that they’ll see.

And just for some context, REMICADE is about a third of Medicare and PROCRIT also impacts about 60% Medicare.

Your next question is from Danielle Antalffy with Leerink Swann.

Just wanted to see if you could talk a little bit about Synthes integration and how that’s going, particularly on any potential sales force turnover side and if there is any change to when we could see accretion on the EDS side of things from Synthes. And to follow up on Rick’s question about potentially more activity on the M&A and or divestiture front, on the context of the med-tech market that we was in today, so specifically in MD&D business, where do you see potential opportunities, understanding that you just made this big acquisition with Synthes, but maybe even something smaller or another big acquisition. Where do you see opportunities in med-tech for growth over the next five plus years? Thanks.

Well Danielle, the integration of Synthes is going well. I would say that the challenge as we expected was going to be in the area of integrating the spine sales forces. You may recall that we converted our current legacy DePuy spine business from a distributor based system to a direct selling basis, which is what Synthes had in mind, was doing. And we had always expected that would be the way to go in the marketplace. So we have completed that transition. And I would say there are some disruptions that we have seen as a result, not totally unexpected but in fact some disruptions. But we think that’s a short-term issue because we think that’s a long-term benefit of having a direct sales force plus the combination of the two portfolios. It's something that will allow us to compete very effectively in spine space. In terms of accretion, the focus of the business integration now is really on sales synergies and we are starting to see some sales synergies. It's too early to give you a specific number on that. The focus is primarily on sales synergies as opposed to the cost synergies, and we expect that that will improve as the integration continues to progress throughout this year and into next. And with respect to M&A and divestiture activities, we are very active always in M&A and divestiture activity as you know. And with our broad base in healthcare and our broad purview of the medical device sector, we look at all areas of medical device to see where we can make a difference. And what enters into calculus, Daniel, as you heard me say before, is not only where we would like to play but where we think the asset is not only better in our hands but has a current valuation that’s attractive to us and is not, for example, overvalued. So we will always look at that. I can't give you any specifics, but with a broad-based medical device business that we have, there is lots of areas for us to look at to improve on if in fact that acquisition would create shareholder value. That’s our number one criteria when looking at the acquisition potential.

Okay. Perfect. One quick follow-up on spine if I could. Any changes underlying the endorsement trends there?

I haven’t seen anything in particular in the data, Louise, have you seen anything?

Not that I am aware of. With respect to everyone's time, we will take one more question and then we will have Dominic sum up with some final remarks.

Your final question is through the line of Matt Miksic with Piper Jaffray.

Thanks so much for squeezing us in. I just had a follow-up and I am sorry to bead this dead horse here on the utilization side. But, Dominic, just to clarify, the comments that you are making about the trends, the general surgery trends. In the past, sometimes these have been kind of coming out of your suture business and the scope and visibility you have into surgery and in the past sometimes it's been a trailing indicator. I am wondering, just to be clear, are the metrics that you are able to provide color up through March or is part of it through December, just a clarification and then I have one follow up.

Sure. Let me have Louise answer that. She has that data right in front of her.

Yes. So we have good data up till the fourth quarter. And as you know we are one of the first ones out in the first quarter, but we do a lot of market research. We have a very good team that extracts data from other companies reports, quite frankly, analyst reports. So that’s kind of an amalgamation of it. It's not precise, it's where we think it's directional at this point in time and of course we will know a lot more once we get the data from the other company. There is some noise in our suture numbers in the quarter and if I take out that noise in the suture numbers, it's flat on a worldwide basis and is actually positive about 2% on U.S. basis excluding the noise that we had in our own numbers at that point. Okay.

And that would have compared to the prior quarter?

Similar results. Similar.

Okay. So similar [sideways] if you will, from a group standpoint?

Yes.

And then the other follow-up I had was on -- I appreciate all the color on price and mix, you had given some particular color on spine over the last few quarters. And I guess knees and spine have started to kind of trend positive on a price mix basis. Having [listed] last several years that’s sort of an anomaly a little bit for us I think. And I just wanted to get a sense, if you have any color as to what's improving there? What's enabling you to sort of either moderate the pricing pressure or get back on the -- effectively drive mix?

I think mix comes from innovation of new products and that’s where the positive mix impact is coming from.

That’s right, Louise. I mean we can't ever lose track of the fact that innovation is the name of the game in all these markets. So as we continue to innovate, hopefully we’ll get a positive mix equation out of it and that’s what our leaders and folks in the labs and our engineers et cetera are totally focused on and they do a pretty good job of it. So we’ll just continue to look for that as hopeful in terms of mix being positive because overall price regardless of mix is going to be pretty hard to come by as you all know. So I think our focus has always been, needs to continue to be on innovating in these markets.

Final remarks?

Thanks everyone for tuning in today. As I said earlier, we’re off to a very good start in Q1 and we remain optimistic for the remainder of the year. we see further opportunities to drive growth in this dynamic global marketplace as our new products, our robust pipelines and even our core businesses continue to address the critical unmet healthcare needs of patients and customers. I would like to again thank the people of Johnson & Johnson for their dedication and commitment and I look forward to updating you all on our progress throughout the year, including at our upcoming pharmaceutical business review on May 23. So thanks for your time this morning and have a great day.

Thank you. This does conclude today's conference call. You may now disconnect.