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 fourth quarter and full year of 2013. Joining me on the podium today are Alex Gorsky, Chairman of the Board and Chief Executive Officer, and 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 a webcast accessible through the Investor Relations section of the Johnson & Johnson website. I’ll begin by briefly reviewing highlights of the fourth quarter and full year of 2013 for the corporation and highlights for our three business segments. Following my remarks, Alex will comment on the 2013 results and provide a strategic outlook for the company. Dominic will then provide some additional commentary on financial results and guidance for 2014. We will then open the meeting to your questions. We expect the meeting to conclude at approximately 10:15. Included with the press release that was issued earlier this morning is a schedule of sales for key products and/or businesses to facilitate updating your models. These schedules are available on the Johnson & Johnson website as is the press release. Also, please note that the presentation of today’s remarks is available on our website. 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…

Well, thank you very much, Louise. I’d like to welcome all of you participating in today’s meeting, especially those, recognizing that we’ve got this big weather storm forecast, at least for those of us here on the East Coast. It’s great that you were all still able to make it. And for all of those of you who are on webcast, welcome. I hope your weather is better, and we’re glad that you could also join us for the event today. When we look back on it, I think and hope you’ll agree, 2013 was really a significant year for Johnson & Johnson. In fact, it’s pretty hard for me to believe that it’s only been a year since we met in a hotel not too far from here in 2012 to review our performance in 2012 and also set out the goals for 2013. And while I think time has passed relatively quickly, I’m also very proud to report just how much we’ve accomplished since last year’s meeting. So let’s start first with our near term priorities. Number one, we’ve exceeded our financial commitments. We continue to restore a reliable supply of the majority of our over the counter products here in the U.S., and we’re working very closely with our trade partners to get product back on the shelves and really relaunch these great brands. We’ve also made substantial progress on the integration of Synthes, and we’re creating not only the world’s largest, but the most comprehensive, orthopedics platform in business in the industry. And very importantly, as you heard Louise talk about, we’ve continued building on our strong momentum in our pharmaceutical business, which is leading the industry on so many different fronts. We’ve made a lot of progress against the short term drivers, but we’ve also…

Thank you, Alex, and good morning everyone. I’d like to provide some comments on our 2013 fourth quarter and full year results, and then provide some guidance for you to consider as you update your models for 2014. It’s really a great pleasure to report on our exceptional performance in 2013, which was driven by the many successes that Alex previously discussed. Our strategy and momentum positions us very well to continue our strong momentum and performance in the evolving healthcare marketplace. At the beginning of 2013, I provided you with an outlook of our financial performance for the year. We saw continued improvement in our results throughout the year, driven by stronger sales results and good expense management. Our operational sales growth of 7.7%, as Louise described earlier, exceeded our guidance of 6% to 7% for the year. I’m also pleased to report that we’ve improved our pretax operating margin, excluding special items, by 90 basis points, and that our net income margin, also excluding special items, expanded to 22.3%. During the fourth quarter, we recorded several special items that netted to approximately $40 million on an after tax basis, and which consisted of the following: increased litigation accruals; a charge for in-process research and development; costs associated with the Synthes acquisition, which are consistent with what we expected we would incur as special items throughout 2013, and which we expect will continue as that integration activity continues; an increase in our estimate for the costs associated with the DePuy ASR hip program for updated information primarily related to the program outside the U.S.; and finally, during the fourth quarter cumulative losses exceeded the net worth of [sios inc.]. This necessitated the writeoff of the acquired entity for tax purposes, which was previously written down for books purposes. This…

Thanks, Dominic. We’ll now start the Q&A session. Please wait for the microphone, as we are webcasting the meeting. And as we have our CEO with us, I’d appreciate it if you could keep your questions to the strategic level.

Alex, for you, and the nice thing about the slides this year and last year is there were some tables that were the same. Emerging markets was actually 23% last year. This year it was 22%. Some of that was obviously U.S. pharma. Consumer did really well. Can you give us an idea of what you’re seeing in emerging markets broadly, what you may have seen in the fourth quarter, and your expectation for ’14 maybe versus ’13 in emerging markets, particularly?

I think overall the headline that I’d encourage you to think about is we think that there’s a big growth opportunity in emerging markets. And in spite of some quarterly ups and downs, in spite of a few shifts here and there in specific segments, or product performance, we see that these markets will likely continue to grow at about 3 to 4 times the growth rates that we’re seeing in developed markets over the next several years. And so specifically for Q4, there were things in Q4 2012 that you’d have to think about in ’13, but overall what we’re seeing, for example in BRIC markets, growth for the year is about 12%. And we saw performance slightly lower than that in Q4, again impacted by a number of factors. If we look at our current business, clearly MD&D is our leader in the BRIC markets, and has done very well. What you see is high teen growth, sometimes exceeding 20%, based upon the investments that we’ve made in research and development, manufacturing, and commercial presence in those markets. Our consumer growth has also done well in them, impacted somewhat recently by some of the ingredient issues that we faced, but here too we’ve got a lot of market appropriate products. We’ve invested significantly as well in manufacturing and commercial capabilities. And obviously our pharmaceutical group is a little bit different, because we have been very open about our strategic intent not to participate in the generic segment, which has an impact there. But we still believe there’s a lot of opportunity to address both unmet need as well as the business opportunity with some of our higher technology products. And by the way, if you look at some of the other investments that we’ve made in companies like [unintelligible] several years ago, recently with Elsker, which expanded our presence in the baby segment. We also did the MD&D investment in our biosurgicals business, which will help us expand that platform there in the coming years. We remain very confident in the opportunities for growth there in the future.

If I could just add something also onto that one? We had, as I discussed in my remarks, with Russia, with the tender, VELCADE, and we also had some tender business on REMICADE. So in the emerging markets, you have a lot more of tender business, and it can cause some fluctuations.

First question, Dominic, the constant currency, or actually operational, I don’t know if operational is actually constant currency. I think it’s [unintelligible].

Yeah, that’s the way we refer to it.

Just to be clear, you don’t have divestitures in there too, right? You have a bunch of divested products and businesses that you’re not backing out?

Right, when I talk about operational, I’m just talking about excluding any impact of currency only.

Okay. The 3.7% to 4.7% would imply a deceleration from 2013 and certainly the way the year ended up. Could you talk about why that would be the case? Obviously it’s tough to sustain 12% revenue growth, but you’ve got a lot of momentum in that business, so what are you assuming decelerates in 2013? Or are you assuming no improvement in MD&D as well? And then the second question, and this is both a Dominic and Alex question, but one incredibly underutilized asset at J&J is the balance sheet. We’ve been talking for years about the cash that’s trapped outside the U.S. It’s significant. It’s growing. All your cash flow is outside the U.S. after you pay your dividend. At what point do you change your thinking on this and actually start to repatriate?

On the growth rate, I think it’s a story of a very high base in the pharmaceutical business after a tremendous year. And in fact, although the pharmaceutical business will continue to grow, it just won’t grow at the same rate that it grew at in 2013, given the high base that it’s already at after a pretty fantastic year. So that alone, I think, accounts for the majority of the difference and what you’re referring to as a deceleration in growth. We do expect MD&D and consumer to pick up in growth. I think the pharma comparisons are tough year over year. And I think we ended the year at good, strong growth. We did have some good opportunities in the year that, again, form a base for which then to grow off of, makes it just difficult. It’s early in the year. This is our view. We try to take everything into consideration. We provide you our estimates, but that’s our current expectation of course [unintelligible], throughout the year. If I can give just a few comments on cash, obviously cash, we generate, as you know, mostly outside the U.S., and it does grow, because of our healthy cash position. We obviously look to maintain the increase in our dividend, so we don’t view that as a hindrance to doing that. We’re still able to do that. And we view that as a great opportunity to invest in the long term growth market, and as you saw with the Synthes transaction, where we were able to use cash outside the U.S. for a significant acquisition. So we’ll always look to do those kinds of things with the cash first, continue our dividend and invest in growing the business. But at some point, and I’m not prepared to give you that point today, at some point we would consider whether repatriating the cash would be a prudent thing to do. At the current U.S. tax rate, and with the current penalty, quite frankly on the repatriation, it appears to us that that’s not a good way to utilize the cash, and it provides for a significant diminution in value to our shareholders by doing so.

Alex, you’ve discussed publicly that you’re reevaluating your cardiovascular medical device strategy. It’s an area where you have a strong presence in only one area. How do you view the attractiveness of those markets now, and how important is it for J&J to have a stronger presence in the cardiovascular device space? And my follow up is, the orthopedic commentary was encouraging, that you made earlier. How confident are you that that’s not a pull-forward, ahead of the implementation of the ACA? Any signs that you can point to that give you confidence that that’s sustainable?

Let me start with the first one. Overall, we continue to think that the cardiovascular area is certainly an area of a lot of unmet medical need, and also represents an opportunity for us. I think the decision we made several years ago, of streamlining our current cardiovascular portfolio, was in fact the right one. And if you take a look at the dynamics in the stent market, even more broadly in CRM and some other areas, they’ve been pretty challenging lately, for a number of different reasons. And so I think making that decision helped us better focus on areas like EP and Biosense Webster, where I couldn’t be more proud of that team. I think we’ve got over 15 quarters of about 13%-plus growth. And at the same time, we made significant investments in new technology that continue to enable them to improve patient outcomes with new product launches. I think we’ve also done a very nice job, and I compliment Gary Pruden and Shlomi Nachman on the job they’ve done in the rest of the business, in streamlining what we’re doing in the endovascular space as well. So if you look at overall performance of our cardiovascular group through some very prudent, relatively minor investments, and frankly just better execution, that business we think is on much better footing now than it was before. We noted really over the last 24 months that we’re continuing to look at renal denervation. Of course you saw the recent information that was released by one of our competitors regarding their device. We have our own approach. We remain hopeful in this area. As we know, if we can truly achieve some of the drops in blood pressure that we’re seeing in some of the other trials, that could have a…

One question you mentioned in your presentation, Alex, this performance based risk sharing arrangement that you’re pursuing within orthopedics, something that’s worked for you in the past [unintelligible] in RISPERDAL. If you could talk a little bit about that, and whether we’re going to see more of that in devices?

As I mentioned, and actually as we’ve envisioned over the past several years, we have a strong belief in the evolving healthcare marketplace today that in many areas, that customers, certainly hospitals under increasing pressure, are going to be looking for, frankly, ways of creating new partnerships with customers and moving from just a volume based model to a much broader portfolio model. And as we look at that, and we think that we’re very well-positioned, and I want to be clear that our number one focus is still on bringing new, innovative products to market, gaining share, we think there’s a lot of opportunity. But we also think that the unique depth and breadth of our portfolio, especially in areas like orthopedics, where we touch so many of the different spaces, but even more broadly, if you just think about a knee or a hip procedure, and if you combine what we do in the surgical side, with our hemostats, with our energy instrumentation, along with what you might see in the prosthetic device and instruments itself, potentially longer term even with our pharmaceutical line, we think that we have a unique offering. And so on a selective basis, right now, we have been working with customers to contract with them in a different way. And so again, it’s still early, but we think in the right areas, this can be a substantial opportunity for us to grow our share as well as to work closely with hospitals in helping them better manage outcomes and costs.

And one follow up, if I could, on spine. Not to pick on a place where you’re seeing some continued challenges, obviously very strong hips and knees, but the integration, the market, maybe share dynamics, can you give us a sense of maybe intermediate, long term strategy for getting that back to market, or better growth rates?

That’s a good point. We continue to believe that the spine market long term is a very good opportunity. When you talk about it, I think the number two reason why someone goes to a physician, or makes a physician visit, is for back pain. We know that that market has undergone a lot of change over the past few years, and we certainly felt that. We do feel, if we look at the overall integration of DePuy Synthes, that one challenge for us was clearly in the spine. And we recognized that going into it, when you had to bring that organization, that’s where the greatest amount of overlap versus hips, knees, and trauma, sports medicine, and other areas. And we did see higher sales force turnover, frankly, than we would have liked to see. I think Michel and Gary Fischetti and his team have done a nice job of addressing many of those concerns. I think our performance in Q4, while still not where we want it to be, is showing some improving trends, in fact outside the United States we’re actually positive. And also, with some of the complementary nature of some of the underlying technology that we have in the other orthopedic segments, that scientifically, commercially, contractually, it will be an important piece of our business. And we’re confident that we’ll get that back to a growth rate that may not be reflective of the growth rate that you saw several years ago, that we saw several years ago in spine, and nonetheless is a healthy and sustainable one for the business.

Maybe I’ll focus first, Alex, on consumer, if I could. You said that 75% of the products are back. Clearly you had a good quarter. A couple of things there. What’s it going to take to get all the way back, recapture that full revenue you lost? And maybe relative to product reformulation, like we saw a newspaper report on Sunday, article about taking certain products out, is this going to slow your progress as you reformulate?

I’d like to note, and first of all, congratulate Sandy, Lynn, and our entire consumer team, for what I do think was strong performance throughout 2013, but certainly in Q4. And just a couple of things to note. One is we obviously have been really focused on making sure that we meet all our consent decree requirements. And we’ve learned a lot through that process. And it’s taken an integrated effort on the part of our supply chain, our information technology group, our business partners. And sitting here today, having met all of our consent decree requirements thus far, we continue to gain confidence now in our ability going forward to do just that. So we still have a substantial volume that we would have to make up to get back to the earlier volumes that we saw, but every time we introduce the product to the market, Extra Strength Tylenol, if you look at Children’s Tylenol, Children’s Motrin, pediatric, we’re seeing customers respond. We began not only focusing on the remediation, but really the relaunch program, on the McNeil team, particularly in the fourth quarter. I’m sure you saw some of that in the media and the advertising. We’ve seen a very nice response and uptake as a result of that. And so we continue to bring things back online, but obviously we’ve got to do that in a very thoughtful, disciplined way, to make sure we meet all of the requirements as well as launch them. The other factor is, though, we’re very pleased with the partnership that’s been taking place with our major trade partners. So all the major outlets have been enthusiastic about working with us to get these brands back on the shelves. Now, while I’m very proud of that, I’m also very proud of what we’re seeing in our core brands. And so if you look at the core strength of things like baby care, up 6% for the quarter, Listerine, up 6%, actually about 8.5% outside the U.S. If we look at OTC, you heard 21-22% growth in the United States, very strong growth. Overall, skin was up over 9%. And that’s really being driven by Jennifer Anniston and the campaign, the great science and technology and Neutrogena, Aveeno turned in strong growth. And so as you know, in the consumer group it takes great scientifically driven innovation, combined with strong innovation in advertising, great retail partnerships and programs, to really drive that together, but I think now we’re in a much better position with our core business as well as with our OTC business, to really have our consumer group deliver the kind of performance that we would expect longer term.

If I could ask an MD&D bigger picture question, you’ve discussed this from several angles, but frankly, even though you’ve got some amazing franchises, we all know it, the portfolio seems relatively overweighted in mature products and mature markets. And at this point, you’re still growing, I would say it’s a lower end of the industry’s relatively depressed growth. Maybe you don’t see it that way. I’d be curious if you don’t agree with that. You’ve emphasized the need for meaningful innovation, you’ve talked about your decisive portfolio and investment choices. What’s your thought process about getting this portfolio back to industry growth? What’s your sense of urgency? When should we think about you getting back to that sort of low to mid single digit growth for this business?

It’s a good question. We’ve been very open about our overall strategy for the organization of always having a goal of growing slightly faster than our markets at a minimum. And that remains our goal in MD&D. Now, if we project out that the underlying growth rate in MD&D is somewhere between 3% and 4%, we clearly want to do better than that. And if I look at performance over the course of 2013, I think there are reasons to believe and be more optimistic about what we’re seeing. Now, you always have to be thoughtful when you take a look at the numbers, but if we account for acquisitions and divestitures, and there was a significant swing also on the diabetes test strip, if we pull those things out, we’re seeing a growth rate of about 3.2%, which we think is pretty indicative of the over marketplace. And that’s in spite of a lot of churn that we’ve had in other areas of that business. And I think as we look forward, we talked are looking at orthopedics, what we’re doing there, I think we’re in a much better position there as we’ve ended 2013 and we’re setting ourselves up for the future. If you look at a few of the other areas in MD&D, where we know we can improve performance, we’re also making good progress. So, for example, if you look at the innovation in energy, the G2 articulating device that we have coming out, the [unintelligible] HARMONIC seven, we think is going to have us be much more competitive, and we’re introducing those to the market, literally as we speak. I think biosurgicals is another area that’s going to be a strong platform for growth going forward as well. So we do think this should be a business that’s growing in the areas that you mentioned, and that I mentioned earlier, and it could be a very strong supporter overall for Johnson & Johnson well into the future. Obviously, we are also looking at the portfolio. I want to congratulate the work the team did with ortho clinical diagnostics. First start by thanking our employees there through this process, for the great job that they’ve done, but also the work that the team did in working with Carlyle. And we continue to look at other areas of our portfolio as well to make sure we’re investing where we can make a big difference for patients, where we can have strong market positions and ultimately lead to future growth.

Alex, two questions for you. Firstly, on the MD&D portfolio, diabetes has clearly had a structural change. What’s your thinking on that and the fact that those go, does that leave kind of a portfolio deficit where given diagnostics’ departure and potentially diabetes’ departure you’d like to have another growth engine there? And secondly, you mentioned in your comments that one of the things that J&J is focusing on on the pharma side is both commercial excellence and execution as well as regulatory expertise, and you have two great drugs, INVOKANA and XARELTO, and they don’t have big categories around them. And are those areas, metabolic and cardiovascular, where there are very interesting assets out there that you might be pursuing?

Good questions both. You know, first of all, let me start with diabetes. We remain committed in the diabetes space. The fact that there’s over 350 million people around the world that have type II diabetes, and if we look at the projections going forward and the unmet medical need that exists in that space, it’s important that we continue to do work there. Now, over the course of 2013, given some of the changes that we saw and the over 70% reduction in some of the bidding here in the United States, we had to make necessary changes to our business model, which we did make during the course of the year. And those are always painful, but I would actually applaud the work that our teams have done in that area to quickly reorganize and focus their business. And in fact, we’re somewhat encouraged, even in Q4 of this year, we had growth outside the United States in our diabetes unit. And we also started, with the launch of INVOKANA this year, a very unique partnership between our Lifescan group as well as our Jansen Pharmaceutical group, and we jointly focused in endocrinology, and we also feel that that partnership and the broader offering that we were able to bring into that office led to the rapid uptake in endocrinology, where we actually passed Januvia, fairly early on, and we’ve continued to maintain that. So long term, obviously we’re going to continue to take a hard look. We’re committed to that business. We think that overall diabetes is an interesting space, but we also recognize that we’ll need to change the shape and how we function within that as we go forward. So that would be my position on diabetes. Regarding INVOKANA and XARELTO, look, we think that these are both great products. In fact, rather than products, they’re almost platforms within products. And that’s certainly true when you have a compound like XARELTO, and the great job that Paul and his team have done on expanding the indications, rapidly getting six indications, the data that they’ve built, the very large clinical trial database, combined with the commercial excellence that Joaquin and his team have provided. I think they’ve done a great job, and we think that there’s further opportunities for growth there as well. And certainly the same when we look at INVOKANA. We have combinations that we’ll continue to work on, and there’s still a lot of unmet need, and we’re very early in the launch process there. But we think that overall the area of cardiovascular, metabolic disease is an important one, and one where we want to play.

I was wondering if you could spend a few moments talking a bit about what you’re seeing in Europe, and kind of the utilization environment there broadly across your various businesses. You did, Dominic I think, call out pricing as a concern for next year. So maybe you can kind of expand on that and give us your outlook there?

Sure, just some comments on Europe. We did see some stabilization in certain parts of Europe, where as you all know, you’re following, in southern Europe there was a significant decline in utilization. So that’s stabilized a bit, although we don’t see significant growth in utilization in those parts of Europe. And we do see, as reflected in my comments, a continued pressure on pricing, particularly in Europe and particularly in the regions that have had the lower utilization rates. Rather than a resurgence of growth, we see actually a continued decline due to pricing in those markets.

One thing that I would add is, as we look at Europe, there’s a couple of ways to view it, I think one is clearly we saw an impact over the last few years with things like austerity measures, increased queuing in our medical devices area, and perhaps some more challenging tenders. but I’d also point out that if you look at the growth that we’ve seen in our pharmaceuticals segment in Europe over the past couple of years, it’s been exceptional. And I think what that demonstrates is that when you do bring pharmaceutical products to the market, that are very differentiated, that have strong science, strong labels, good clinical dossiers, and you match that with great account teams, great commercial presence, you can get uptake. And I think that’s really been driving our success in that environment. And look, we’ve got a lot of pockets. We have pockets in our consumer area that have done very well in Europe, we have other areas in our MD&D, like I mentioned the specific comments about diabetes, given some of the challenges how our business has done. Energy had done very well over the past couple of quarters there. So yes, it’s a challenging environment, but it’s also one where I think you can be successful ultimately, if you bring the right innovation the right way to the market.

Really a question on the pretax margins. In pharma it’s just been exceptional for the year. Clearly a continuous driver of new product opportunity. And the question there is, are we at the goal line? Or is there still more to be squeezed out on the pretax side? And then second is really on consumer. With the increased cost of the relaunch, is there a substantial opportunity we can still see, even in ’14, for improving pretax on that side?

Good observation. It was exceptional growth in pharmaceutical margins. You know, I pointed out that our pretax operating margins this year will still expand, despite the negative headwind of the impact of the yen. So that should point out that underlying growth in the business and pretax margins, we still have that ability, and we still see it. We don’t view it as squeezing out, though, just to correct that a little bit, because the business, as it grows, these products can generate a marginal improvement in pretax operating margin because of the fact that they’re phenomenal products, and they’re mostly specialty products, so there isn’t a commensurate increase in the level of commercial investment. And plus, the commercial teams just do a fantastic job. So I do think there’s more room there. This particular year, though, as I pointed out, it’s challenged because of the impact of the yen.

Alex, a strategic question, obviously Synthes, for ’14, you’re pointing out as being a major strategic initiative for MD&D. I was wondering if you could help us understand, what do you see happening in ’13, and what specifically is the focus in ’14, and how it differs from ’13.

When you take on an acquisition and integration of an enterprise that size, over $4 billion in sales, many employees, it’s a complex undertaking. And we knew from the very beginning that ultimately, looking at the number of people that are in the orthopedic space, looking at how that space is evolving, we felt very strongly the size, the scale, that the innovation technology advantage we’d get from bringing that together is essential for success long term. But in year one, you have a lot of the nuts and bolts, frankly, of the integration, just bringing them together on the ordering systems, getting the sales forces together, the compensation systems common, human resource programs, standardizing all of our qualities, supply chain, compliance programs. All of those kinds of things were really the focus at the tail end of ’12. If you think about it, we didn’t close until the second half in 2013. I think we made a lot of progress in each one of those areas. Admittedly, there are going to be some bumps in the road when you do things like that, and the team went through that. But I think now they’re focusing much more externally. So what I would say is as we move through 2013, there’s still work that we need to do in bringing it together, but now the emphasis more is shifting into what does that ultimately mean for the customers. So how do we make sure that we work more broadly with the [AO] foundation to ensure physicians and surgeons are getting kind of the training and education that they desire. How can we work together even more closely in places like China, where we know that in the trauma marketplace there’s a significant opportunity. I mentioned, I think, getting over some of the real challenges that we had in spine, bringing those two together. And frankly, in fundamentally changing this platform offering, instead of just the knee, just the hip, just bringing a much broader portfolio approach where we see a lot of interest on the part of customers, not only here in the United States, but also globally, to fundamentally transform the model. So I think that would be the fundamental shift that we’re seeing.

Very helpful. Maybe just two quick questions on cash. The first is, free cash in ’13 actually came in a little stronger than we expected for the year, so nice job there. But how should we think about free cash for ’14? Should it grow in line with earnings, faster than earnings? And the next question is, just as we think about the divestiture of the DX business, is the safest way to assume that money just stays on the balance sheet for strategic alternatives, or is there a possibility we could see a dividend or repurchase based on that cash proceeds?

Thanks for the comments on free cash flow. You know, our teams do a great job of managing not only the P&L but also the cash genomes. If you look at our history, our free cash flow essentially equates to our earnings, within a band of somewhere between 95% to 105%. So if you’re modeling it within that range, that’s about what we should expect. Obviously, there’s payments, we have to pay litigation settlements, those sorts of things. That may swing it one way or another. But that seems to be the place that we’re able, through our efforts, and through the teams around the world, generate significant cash flows that are essentially the same as the earnings that we generate, which is a remarkable achievement. With respect to the OCD net proceeds, as I mentioned earlier, it’s just early. We’re going to evaluate how to best use those proceeds, but rest assured that as we think about how to best use those proceeds, we want to obviously offset the dilutive impact of not having the business in our go forward results. So there are multiple ways to do that. We’ll consider the best way possible.

Our final question will come from Kristen.

Just a follow up, I guess, real quickly, before a question for Alex. Just on the [unintelligible] OCD, can you just give us a sense in terms of what the dilution would be, just assuming cash stays on and you don’t offset it, how profitable that business is?

The clinical diagnostic industry basically operates, and you guys can look it up, at a margin that’s below the level at which Johnson & Johnson operates in total. And our ortho clinical diagnostic business is consistent with those industry margins. So think about it this way, I would size it up, you know, the sales of the business are about 2.5% of our total sales. Profitability of the business is less than that, because obviously it operates on a lower margin than the rest of our business. And if you take a half-year impact from the divestiture closing midyear, it’s not a significant impact to the overall profitability of the enterprise at all. So that’s the way I would think about it.

And just big picture, strategically, a couple years back, Alex, your predecessor talked about potentially adding a fourth leg to J&J. And one of the slides you had today, you talked about the different areas within healthcare and you’re looking at other areas like payers and providers, and just other general healthcare entities growing much faster than the businesses that you’re currently in. So how do you just overall look at the positioning of J&J, in businesses that you’re in today, adding a fourth leg or even just prioritizing your investments within consumer MD&D and pharma, given the differential in growth?

We want to continue to identify and pursue areas where we think, number one, there’s a lot of unmet medical need, and two, where we can work with technology and innovation to make a meaningful difference for patients and for our customers. And we think over the last few years, within each sector, if you take a look at some of the investments that we’ve made and identified in our pharmaceutical group, that we’ve done a very good job in accomplishing that. And that’s resulted in products like ibrutinib, some of the partnerships that we’ve had in other areas of our business, XARELTO and INVOKANA. And we would expect to continue that, and I think that our group has done a great job of identifying those kind of technologies very early, rapidly developing them, and bringing them to market in a great way. I think in MD&D, we continue to innovate, but obviously we made a very big investment in Synthes, where we think size and scale is going to be important. But we’re also focusing a lot on looking more broadly across our MD&D portfolio, on how we might work with customers in new and unique ways. And we’ll continue to look for both new technologies within the different sectors we have in MD&D, but also for adjacencies that we think, again, help us better serve patients, but also broaden our offerings in some cases. And in consumer, I think the team has done a great job, particularly over the past 12 months, of really better focusing the business. I mentioned that in my talk. And now, obviously, we’ll take a hard look, but there we think there are a lot of regional opportunities. We think there are other areas of the portfolio that also we can augment. But we’ve also demonstrated, I think, over the past couple of years, that we’ve done a nice job on selected divestitures as well, to better focus some of our efforts. So I wouldn’t say that there’s a fourth leg per se, but I think we’re always looking for big areas of unmet medical need, areas that may broaden our platforms, or that could provide a brand new platform going forward.

And some final remarks from Alex?

Thank you very much, everyone. I’m not sure if it’s snowing yet outside, but I’m sure we’ll hear soon. I’d like to end, basically, where I started this morning, and thank all of you for making the effort to be here and participating in today’s meeting. As I said earlier in my talk, I think our strategic framework and our broad base of offerings, critical mass, and positions, really puts Johnson & Johnson in a good place to drive growth in today’s marketplace. And this year we’re going to work very hard on continuing to deliver new innovative products and solutions for consumers and patients around the world, and by implementing and focusing on those near term priorities I talked about, as well as the longer term growth drivers. We look forward to continuing to update you on our progress against them, just as we did last year. And I’d also like to ask you to please save the date for the medical device and diagnostics business review on May 22, which we’ll host in New Brunswick. Again, that’s May 22, in New Brunswick, for MD&D review. So let me close by saying thank you, safe travels, and we’ll look forward to seeing you next year. Bye for now.