Good morning and welcome to the Johnson & Johnson Fourth Quarter 2016 Earnings Conference Call. All participants will be in a listen-only mode until the question-and-answer session of the conference. This call is being recorded. If anyone has any objections, you may disconnect at this time. [Operator Instructions] I would now like to turn the conference call over to Johnson & Johnson. You may begin.

Good morning. I'm Joe Wolk, Vice President of Investor Relations for Johnson & Johnson, and it is my pleasure to welcome you to our review of business results for the fourth quarter and full year of 2016. Also on the call today are Alex Gorsky, Chairman of the Board of Directors and Chief Executive Officer; and Dominic Caruso, Executive Vice President and Chief Financial Officer. Thank you for joining us today. We are very pleased with our 2016 results as they demonstrate our track record of consistent and sustainable growth, exceeding financial expectations, and making progress on our long-term strategic drivers such as advancing our pharmaceutical pipeline, implementing new commercial models in our Medical Device segment and enhancing market leadership for many of our iconic consumer brands. As we enter 2017, we are confident in our ability to continue producing solid results, while also delivering innovation that will have an enduring impact on patients, caregivers and customers. A few logistics before we get into the details. This review is being made available via webcast accessible through the Investor Relations section of the Johnson & Johnson website at investor.jnj.com where you can also find additional materials including today’s presentation and accompanying schedules. In terms of the agenda for today’s discussion, after I review results for the Corporation and the three business segments, Alex will comment on our 2016 performance, share his perspectives on current dynamics in the healthcare and discuss key growth drivers for the company. Dominic will then provide remarks on the income statement, and insights on our guidance for 2017. The remaining time will be available to answer your questions. We anticipate the call will last about 90 minutes. Before we begin, please be aware that some of the statements made today during this review are or maybe considered…

Thank you, Joe, and thanks to all of you for joining us on the line today. We are really pleased to be here sharing the strong results we delivered for 2016, not only do we meet our financial commitments to our investors and shareholders, we also delivered on the commitments and responsibilities defined in our Credo. As all of you know, we have several important responsibilities outlined in our Credo. It compels us to meet our first responsibility to the doctors and nurses, mothers and fathers, and all others to use our products; to our employees, to our communities, in the world we live in, and it compels us to make a sound profit, experiment with new ideas and develop innovative programs. When we do all of this, our shareholders should realize a fair return. In fact, we delivered a very fair return this year. Our total shareholder return for 2016 was a strong 15.3%, significantly exceeding our competitor composites as well as exceeding most major indices. And not only is that true for 2016, but I am very proud to say it’s also the case over the last three, five, ten and twenty year periods. Our strong shareholder return for 2016 is indicative of the strength of the businesses and the improved strategic focus and execution that our leaders and teams have delivered over the past several years. Our Pharmaceutical business continues to deliver strong growth while also increasing investments to further develop our incredibly strong pipeline of innovative new medicines. Our Medical Device business refocused and accelerated our pace of innovation and develop novel commercial models to meet the evolving needs of today’s healthcare system and our Consumer business continued gaining share across most of our major categories and significantly improved margins with a goal of returning to…

Thanks, Alex and good morning, everyone. We understand that there has been some audio difficulties this morning and we apologize for that and hopefully that issue is now been resolved. As you’ve heard from Alex, we are very pleased with our 2016 performance. We believe we managed our business well and that we have transparently shared information to help you understand our plans and expectations. We ended the year at the top end of our most recent operational guidance range for sales and the negative impact of currency resulted in sales slightly below consensus on a reported basis. With respected to adjusted earnings, we also finished above our operational guidance and at the high end of our reported EPS guidance despite the negative impact of currency and exceeded consensus estimates for earnings as published by FirstCall. Turning to the next slide, you can see our condensed consolidated statement of earnings for the full year 2016. On a reported sales basis, $71.9 billion represented an increase of 2.6%, which on an operational or constant currency basis grew 3.9%. As we told you this time we expected to accelerate our underlying growth from 2015 and 2016 excluding any impact of acquisitions and divestitures, hepatitis C sales, and the impact of Venezuela, as well as the additional shipping days in 2015 which we previously discussed. On that basis, we grew sales in 2015 at 5.5%. We have exceeded that level of growth for full year 2016 at 7.4%. Our earnings, adjusted operational EPS growth and our 2016 guidance was expected to range between 5.3% and 7.7%. As reported this morning, our EPS was $6.73 reflects reported growth of 8.5% and operational growth of 9.4% exceeding both our original guidance and the updated guidance range we gave in October, driven by significant improvement in…

Thank you, Dominic. Michele, can you please provide instructions for those on the line wishing to ask questions?

[Operator Instructions] Your first question comes from Matt Miksic with UBS. Please proceed with your question.

Good morning Matt. Q - Matthew Miksic Thanks a lot for taking our question. To Alex, I had one for you. You made some comments on tax policy. It’s a bit important issue I think for investors. Everyone is kind of wondering how this new administration is going to go and given that you’d met with them recently a couple of just quick points if you can shed any light for us. One, repatriation seems like something that has broad appeal on maybe something that could happen relatively quickly, but when we think about the investments that a lot of companies have made in tax optimization strategies, these include obviously things like overseas manufacturing assets et cetera, how would you want to see reforms put in place or based into place, what if anything can you read into where the new administration and Congress was headed in potentially putting that process in place or should we worry as I think some investors might – that this could be sort of a change that would click into place in 2017 or in 2018?

Hey Matt. Thank you very much for your question. And just a quick comment first, I wanted to say how really pleased I am with the performance overall the company not only in Q4 but also for the full year 2016 and frankly how excited we are and confident in our prospects for 2017. I mean, if you look across the different businesses, pharma, medical device, consumer, the announced strategies that we’ve actually had in place now for the past several years, I think our performance has been quite consistent with that. We are ending the year on a strong share note across all of our major franchises and we’ve been able to do that while also investing for the future. You consider more than $9 billion invested in R&D. If you take a look at the other various strategic investments that we’ve made in acquisitions this past year, in our consumer, our medical device, continue licensing options and our pharmaceutical business and then you compound that with some of the efficiencies and the continued path that we are on to making sure that where as effective and as efficient as we can be in our business it really delivered those results and again we think the prospects for 2017 are promising. As it relates to tax policy, look, I would say that the major themes that we’ve been able to ascertain from our ongoing discussions with the new administration but as well as other stakeholders is they are clearly focused on growing the economy and growing high quality jobs, particularly here in the United States and we believe that any of the potential changes we stated openly that there are many aspects of the blueprint that we think would be very favorable. I think net-net anytime we can get more flexibility by moving two things like a territorial system outside the United States, to be able to invest back here in the United States and other areas, we think that’s a net positive. Clearly, we are being very clear with the need to have an adequate transition. To your point, given some of the investments that have been made in previous tax constructs as well as manufacturing footprint, but so far, I remain very confident in discussions that we’ve had that ultimately we will make changes to the overall tax system that will be a stimulus for growth and that ultimately will help Johnson & Johnson and many other companies grow at an even faster rate going forward.

That’s great and congrats as you pointed on the solid performance, particularly adjusting for shipping days. Thinking about the portfolio, if I could ask a follow-up just on, if you could update us on your thoughts on the [Audio Gap] potentially?

Sure Matt. Thanks for the follow-up. Look, I think overall, our strategy and our outlook around putting capital or working M&As has actually stayed pretty consistent through the past several years and that is, one, we want to make sure that something is strategically right that fits with our capabilities, two, that financially it’s a sound investment. I think we demonstrated a lot of discipline and a lot of thoughtfulness about the way that we put the capital to work over the past few years. Next we need to just make sure operationally, that it can be done and that our ability to execute on those deals ultimately produces the kind of outcome for customers, produces the kind of value that we think is important. Generally, I think we’ve been consistent with this over the past few years about 50% of our growth comes from external innovation. We think that’s a – it’s a very good cadence. And we’ve been able to do that by the way without compromising our internal innovation. I mean, if you take a look at our freshness index of about 25%, of our sales coming from products that have been launched over the past five years, our continued increase in innovation across our portfolio and another comment that I’d like to make is, also on what areas where we don’t believe we should participate where we don’t feel that ultimately we are helping patients or consumers do a greater degree or that we feel that there is a very strong technology path forward. Many of these are very strong businesses, but perhaps they are better in someone else’s portfolio than ours, I think we’ve shown a good discipline about that over the past few years. As I look across our broader portfolio, we would like…

Thank you, Matt. Michelle, next question please.

Thank you. Your next question comes from Mike Weinstein with J.P. Morgan. Please proceed with your question.

Thank you. Can you hear me okay?

Yes, Mike.

Hi, Mike.

Hey, Mike, just speak up a little bit if you could please.

Okay, perfect. Well, first off guys, since the audio was off for probably ten minutes, you may want to send around the transcript, just to cover some of the sections that never made it across to everybody.

Thank you.

We will.

Yes, let me touch on a couple of items and maybe if I can do this first, Dominic, could you just comment on a couple of pieces of the guidance? The organic top-line outlook for 2017 looks pretty close to where we’re at, but probably a little bit below the Street. Can you just talk about any puts and takes do you want the Street to be thinking about particularly in the pharma business relative to competition, be it REMICADE or the generic competition for Concerta? And then, second down the P&L, Dominic, can you just comment on the other income guidance which is a lot higher than, I think, people were expecting. It looks like you are assuming some sales there. So is there anything there that we should be aware of and then on the tax rate line, your tax rate is a good deal higher than it was in 2016. So if you could comment on that as well? Thanks.

Sure, sure, Mike. Well, just on the top-line, of course, we always give you constant currency guidance first. So I think it’s important and when I look at the various models that are out there today that have not yet been updated, when I try to peel back the impact the currency it’s pretty clear that our guidance and Street expectations if they were all adjusted for the same currency rates would be pretty much in line. So I think the Street has a pretty good sense of where we are headed in 2017. The major factors in pharma for example, obviously we included the impacts of a REMICADE biosimilar, I think many of you have also done that in your models. We will not see significant competition for other products like ZYTIGA and alike that could go generic by the end of the year, but we don’t think we’ll see any impact there. You mentioned Concerta, we will see an impact there. We’ve already seen some impact there. And overall, I would say, I would characterize the three businesses as pharma, even without the impact of REMICADE biosimilars the growth rate is going to be slower than it was in 2016 just naturally as those products have been in the market for a while now, they’ve achieved pretty good share. They still have room to grow, but the rate at which they grow, it looks like it will be a lot slower in 2017 than in 2016. Medical Devices and Consumer, we think will accelerate the growth in 2017 over 2016. With respect to other income, I mentioned that we had not completed everything that we had expected to complete in 2016, so therefore our actual other income line for 2016 was lower than our guidance, so naturally, we…

It is, Dominic. Let me ask one follow-up on – and maybe two parts here, so, Alex, could you just talk about the decision relative to the diabetes business, obviously, given the importance of diabetes in the category, not an easy decision to consider other alternatives for the business? And Dominic, can you talk about the profitability of that business and I am asking impart because, if you do end up acquiring Actelion or some other transaction that would be accretive to earnings, if you end up not having the diabetes business, I just want to think about the offset? Thank you.

Yes, thanks, Mike. Look, it’s always a difficult decision and when you look at your portfolio and as I frequently describe, it is little bit like your children, you love all of them just from time-to-time we are trying to make decisions that we think ultimately are in the best long-term interest of our customers, stakeholders and our shareholders and we think diabetes is clearly an area of a lot of unmet medical need, we are very proud of the history and track record we have in blood glucose monitoring as well as insulin pumps and some of the things we’ve been able to do. We are also very proud of frankly the performance that we generated over the past few years in products like INVOKANA, the progress that we made in areas like bariatric surgery that can have a huge difference in the metabolic space. That being said, we do feel that based upon the broader market dynamics, particularly things such as pricing in certain areas has led us to the point where we say the right thing for us to do is to consider strategic options for these three particular areas of the business. I want to be clear, we still are very interested in diabetes and we’ve got a lot of – we think very important, very promising trials coming up in INVOKANA this year in fact. And it’s a space where we’ll continue to work with our Medical Device group, but we think at this point in time, it’s important for us to look hard at these businesses and make sure ultimately that we are making the right investment for the future.

And Mike, regarding profitability, as you know, you follow the industry closely. The diabetes pricing over the last several years has been challenging and although I think our team has done a nice job of adjusting the cost structure, the level of profitability that business has declined. We don’t give you specific franchise profitability, but it’s been challenging to generate strong profits in the business where there is significant price decline year-after-year. Without commenting on whether or not Actelion would or would not get completed, that transaction should it get completed would be accretive to both top-line and bottom-line and more so more than offset any impact to diabetes.

Thank you, Mike. Michelle, next question please.

Your next question comes from David Lewis with Morgan Stanley. Please proceed with your question.

Good morning David.

Good morning. A couple of quick questions and maybe some strategic ones. I guess, just, Dominic following up on a prior question here on REMICADE. I think the consensus view into this year is that REMICADE was something like a 1% hit to the top-line. Is that still a decent place to be for 2017?

We don’t give guidance by product, David, as you know. But I previously commented when you think of the fact that Merck had experienced two years of a biosimilar in Europe and they’ve retained 70% market share after two years. So it’s reasonable to assume 10% to 15% perhaps market share erosion in the first year. Of course, in Europe, it’s much more dramatic, because of the impact of the healthcare system there. So, I think if generally, consensus is in that range that you’ve mentioned, that’s a pretty reasonable range.

Okay, and maybe just two more strategic questions. I guess, Alex, first of you for you, I know diabetes is going to be a topic this morning, but I guess, pruning devices shouldn't really be a surprise for investors, but I guess, I was struck by this notion of you are getting bigger in one of your big consumer Medical Device franchises which is ophthalmology, and then trying to get smaller in one of your other consumer device franchises which is diabetes. I mean, is it, should we be thinking about these two businesses the same way that you think about them as sort of two consumer assets and you want to get bigger in one and then smaller in the other?

David, thanks for your question. The way that I would frame it as, we are very excited about the opportunities we have going forward in Vision Care. We’ve looked over the past several years and first of all, I want to commend the Vision Care franchise for the work that they’ve done over the last two and three years in contact lenses. If you look at the growth rates, I mean, we ended up with a double-digit growth rate in Q4 by that team and they’ve introduced more than five new product launches. The execution in the field with customers has been outstanding. And frankly, when you think about the broader capabilities that we have in our surgical space and the potential to marry those up with our Vision Care business and of course, when AMO became available, we just thought that was a very good match, strategically and from an operational standpoint and Vision Care, just on a incidence basis, as we look at an aging population and things of that nature, we think that there is a lot of dynamics that would suggest we are going to see strong continued growth and we think we can be frankly be very best eye care company in the world as we continue to evolve that portfolio move ahead. Diabetes, look, as I said earlier, I am incredibly proud of the work of all of our Johnson & Johnson associates and what they’ve done. We have people, scientists and people in the field that has spent their careers building that franchise. If you take a look at our actual volume share, we’ve maintained a strong position. That being said, there are other dynamics within that market that make it more challenging as – particularly in comparison to other areas in our portfolio. So, I want to highlight the fact that we are still very early days in this. And we are taking a look at a range of options, but we also, as I mentioned earlier, remain very committed in the diabetes space through many of our other areas such as bariatric surgery, such as INVOKANA that continued in ongoing development programs that we have around that. So that’s the way that we think about it.

Thank you, David.

That's very helpful, Alex. Let me just…

Michelle, next question please.

Your next question comes from Jami Rubin with Goldman Sachs. Please proceed with your question.

Thank you. Just a couple for you, Alex, you met with Donald, with our President Trump yesterday. Saw you on the front page of the Wall Street Journal. Just wondering what - you commented on tax policy, healthcare policy generally, repatriation, what do you think our new President is thinking in terms of drug pricing? Obviously, he has come out with very provocative comments about removing the non-interference clause. The industry has certainly been fighting that for years. The reasons to believe that may never happen, but what do you think the end-goal is here, because drug pricing, the whole drug pricing debate has been a major overhang over the sector, biopharma stocks for the past year and-a-half. What do you think the end-game is? Is he just trying to be provocative to change behavior? Or is the industry really willing to give something up? How do you think this all plays out? That would be very helpful. And then my follow-up question is, just on capital allocation and M&A, clearly, the pharma business has been the key driver of your growth for the past, say five years, most of the earnings beats has come from the pharma business. This quarter, the pharma business came in a bit lower, as you acknowledged growth will slow in 2017 versus 2016 as a number of your key growth drivers have slowed down and face competition. We all see the news around Actelion and I think the initial reaction is okay, that's nice, but that's sort of a small bolt-on deal, it doesn't really change the company. Would you consider M&A that is more transformative to the company? Is that something that you would consider? Or would you be prepared today to rule something out like that? I mean, when I talk - what I am thinking of here is, a transaction that would have a much bigger impact on the company in terms of the sales growth, in terms of earnings growth, in terms of reshaping the portfolio, et cetera, et cetera? Thanks very much.

No, thank you very much for the questions Jami. Look first of all that – healthcare specifically was not a significant topic of discussion that we had yesterday. It really focused more on overall economic growth and as we mentioned earlier one of the things around tax, regulatory and other policies and that those are really the major drivers of the conversation. Clearly, the administration will be looking at healthcare and I think what’s really important in all those conversations that I am sure will be coming, Jami, is that we look at healthcare in total. And the way that I would frame it is that, look, I believe healthcare for all the reasons that we’ve talked about earlier is a growth industry going into the future and while – and we know the drivers of demand and aging population, increasing middle-class around the world, new technology that we are introducing and but, clearly that is going to put strain on the system and what we continue to emphasize is number one, the important role that pharmaceutical is playing in overall healthcare, we mentioned in the comments that pharmaceuticals make up between 10% and 14% overall of healthcare spend. If you look at a lot of studies, it would suggest that 75% of the improvements that we’ve seen and things like mortality, and improvements and things like cardiovascular disease, cancer, HIV, are really due to pharmaceutical. And so we want to make sure that we continue to innovate and by the way I believe a lot of the technology and innovation that we are seeing right now truly has the potential to transform many diseases and move more towards disease interception, cures than what we’ve seen in the previous twenty years. And so I think it’s important to keep that…

Thank you, Jami. Michelle, next question please.

Your next question comes from Larry Biegelsen with Wells Fargo.

Hi, Larry.

Good morning. Thanks for taking the question. One for Dominic, one for Alex. Let me just ask a little bit more on the top-line guidance for 2017. The delta between the 2016 organic sales result of 7.4% and the organic growth guidance of 3% to 3.5% is a bit greater than we expected, Dominic, based on your previous comments, I think on the Q3 call. It feels like something may have changed since the Q3 call, is that fair? And then I had one follow-up for Alex.

Yes, I don’t think anything has dramatically changed. I mean, we are not calling out any particular impact to REMICADE and I think you are all familiar with the fact that we are going to see some slower growth throughout many of the pharma brands that have done exceptionally well up to this point. I just remind you that, we had a very significant impact with hepatitis C, not too many years ago and we did call that out, because that was very significant. The impact to REMICADE biosimilars is nowhere near that level of impact. So I don’t think anything has changed dramatically, Larry, just sort of pace of growth in each of the businesses as we look into 2017 it’s still going to be good, but as I said pharma, just a bit slower than it was in 2016.

All right, thank you. And Alex, if you divest the diabetes business it will represent the third major device divestiture since you became CEO. So my question is, are you done making major divestitures in the device business? And we all see what you are doing with cardio, I mean, I am sorry, with ortho, surgery, and Vision Care with the AMO acquisition building breadth and scale, but cardio, although, it's been a very strong performer, it is relatively narrowly focused. So how are you thinking about that business now? Thank you.

Yes, Larry, thanks a lot. Look, you are absolutely right. The three primary drivers of our strategy and we believe where the growth going forward and in our current portfolio orthopedics group, our surgery group and our Vision Care group and I think if you look at the underlying health of each one of those franchises, we are really pleased with the fourth quarter and the full year results in 2016. If we take a look at surgery for example, you see EP growing at about 14%. We see some of the other things like endomech, biosurgery, all growing at very strong rates. Hips and knees, we think came in and we are holding gaining share in many of the areas in vision care frankly had an incredibly strong quarter and we think it’s well positioned for growth in spite of even new competition with launches in 2017. So, we think that those franchises are very well positioned. As we look to the future, in cardiology, we are very proud of the success that we’ve had with our EP business. As I mentioned earlier, when you see EP, we probably have about 32, 33 consecutive quarters now I believe of double-digit growth. We’ve had a constant cadence of new innovation. We have done some small tuck-in acquisitions for the year to augment that franchise. But we realize longer term and we’ve been very open with it that we’ll continue to look at the cardiovascular space because we do think there is a lot of unmet need, but it’s one that we’ll have to continue to evaluate strategically, financially to see exactly what is the best path forward. And, so I think – the only other caveat – or it’s not caveat, the statement I would make, Larry, here is, I want to highlight it is early days. Regarding our decision in diabetes, we will look at a range of options. Again, I want to openly state the hard work that team has been doing in a very difficult and challenging marketplace and we’ll keep you informed as we go through that decision process.

Thank you, Larry. Michelle, next question please.

Your next question comes from Glenn Novarro with RBC Capital Markets. Please state your question.

Good morning everyone. For Alex or Dominic, can you comment on device utilization in the fourth quarter? We've already seen several companies positively pre-announce to the upside a few weeks ago, particularly in ortho and spine and Dominic, I remember on the third quarter call in October you gave color on monthly trends saying, September was stronger than July and August. So, I wonder if you could provide similar color on the fourth quarter trend? And then as a follow-up, I am just wondering if we're starting to see greater seasonality in 3Q on the downside and I'm wondering if we're starting to see greater seasonality to the upside in the fourth quarter as kind of individuals work through their deductibles and plan more surgeries in the fourth quarter? Thanks.

Yes, Glenn, we don’t have all the data for the fourth quarter in yet, but the projections that we looked that are published do show a improvement in fourth quarter utilization over third quarter utilization and as I said during the third quarter call, we did see a slowdown. It looks like it was in the summer months, and as September rolled around, it picked back up again. We don’t have specific details by month in the fourth quarter that’s reliable yet to comment on. But overall, fourth quarter utilization does look better than we saw in the third quarter. I wouldn’t say it’s dramatically improved. I mean, we are still in very low single-digit year-over-year uptick in utilization. With respect to seasonality, we do see a phenomenon and that now, as you know, more surgeons are actually employees of hospital systems in the US that during what would be considered normal holiday period such as summer months or holidays, typical holidays that we do see less procedure volume, because it appears that there is more sort of vacation time et cetera taken by the profession that was previously the case when they were independent in running their own business so to speak as opposed to being employees of a larger institution. So we are seeing that kind of seasonality and you are right, sometimes you see an uptick when people try to fulfill or postpone I should say procedures to later in the year, so they can get their procedures in and have already achieved their deductible and other matters and then pay for the expensive or not to have to pay for the expensive surgery upfront. So we are seeing that dynamic as well. So I think this is going to change over time and it’s beginning to change now as we see the dynamics in the market.

Yes, Glenn, Alex here. I would really recommend that as we look at the overall device market, and given some of the changes that Dominic brought up, be it especially in the United States where physicians are employed, holiday, seasonality, things of that, but it’s changing, it’s very important in the device space to take a longer term perspective and I realized in the past that see some quarter-to-quarter variations, I think we will going forward, but if I step back overall and look at what – as the markets continue to develop on an annualized basis, I think we remain very confident in some of the underlying trends. But I think it is important to take kind of longer term view.

Thank you, Glenn. Next question Michelle.

Your next question comes from Danielle Antalffy with Leerink Partners.

Hi, good morning guys. Thanks so much for taking the question. Just Alex, if I could ask on a high level, following up on some of the earlier questions, pharma has been a driver of outperformance over the last year plus and the Device business has been a relative underperformer although clearly seems to be stabilizing to improving here. But just thinking about the sort of mix of the businesses going forward, considering the competition you have coming for pharma, you expect pharma to slow, you expect devices to return to above market growth going forward, does this lend more – does this make devices more important relative to pharma going forward or how do we think about how you are sort of allocating capital between the businesses and even from a capital allocation perspective, which was asked earlier? Thanks so much.

Sure, Danielle. Look, we still think there is great opportunities in each one of these sectors and let me just with the pharmaceutical. In 2017, Dominic took you through some of the rationale regarding our guidance but, make no doubt about it, we still remain very bullish on the core fundamentals of our business. If you look at products like STELARA and SIMPONI growing in excess of 20% this past quarter, we got the additional Crohn’s indication with STELARA that we think in and of itself could be a very significant opportunity going forward. If you think about the potential products that we have, guselkumab, sirukumab in the near-term and you compound that with new information that we are certainly hoping for with INVOKANA and you top that off with the future pipeline about ten compounds between now and 2019 and 2020 that we’ll be launching, we are quite excited about that portfolio. And so, while we’ll always be looking for opportunities to add on to it, if we look at that core performance, again we think it’s been quite strong. What we see in the Medical Device is a continued acceleration. I mentioned some of the growth rates earlier around EP, endomech, biosurgery, let alone in some of our core ortho and Vision Care areas, if you compound that with some of the investments that we made, things like AMO, but things like in extremities, in cardiology as well as in spine, we think that’s also going to help us accelerate growth even as we head into 2017. And we think the underlying fundamentals of that business have continued to improve over the past year and Consumer is certainly the same case. We ended the quarter in areas such as Beauty, OTC, wound care, quite strong and when you add that on to the several billion dollars worth of investments that we made with Vogue, but also in other areas we think that franchise is positioned for increased growth prospects as we head into 2016 and beyond. And then on top of that, look, we are going to continue to look for the kind of deals that I have outlined earlier that we think makes strategic and financial sense and that ultimately we can execute on.

Thanks Danielle. Michelle we have time for one more question please.

Thank you. Your next question comes from Josh Jennings with Cowen and Company.

Good morning, Josh.

Hi, good morning.

Hey, Josh.

Thanks for taking the questions. I was hoping to start we might be able to get a little history lesson, Alex, and Dominic, about what ACA implementation meant to Johnson & Johnson and the Pharma and Device businesses? I know it's hard to predict what's happening - what's going to happen moving forward. But what potentially – how the impact could be for the repeal of the ACA?

Yes, Josh, we had commented on this before. We did not see any significant impact uptick in business as a result of the implementation of the Affordable Care Act. Certainly there was not much of an impact at all in the Pharma business on our Device business because of the nature of the type of device products we have, we did not see much of an impact. So therefore, any change going in the opposite direction, we don’t think will be negative. We did see an impact in terms of the cost associated with the Affordable Care Act, but as we said before, we’ve incurred approximately $1.4 billion between the pharmaceutical fee, increased rebates et cetera even excluding the currently postponed medical device tax. So we’ll have to see when new legislation is announced, whether or not these fees and cost associated with the Affordable Care Act remain or if they are authored at any way. But those have already been incorporated in our business. We’ve adjusted our cost structure accordingly and we have that fully baked in to our 2017 guidance as continuing as they currently are.

Thanks for the question, Josh. Before I turn the call over to Alex for some closing remarks, again I want to apologize for any audio outage you may have encountered today. We will post the comments from Alex and I from early in the call in the Investor Relations section of our website following the close of this discussion. To ensure that everyone has access to any content that may have been missed. Alex?

So, thank you all for joining the call this morning. We really do appreciate your participation and questions. And in closing I’d just say that and reiterate our confidence and the strength of our businesses and our optimism for 2017. We look forward to updating you on our progress with delivering on our robust pipeline and commercial success in Pharmaceuticals, accelerating our growth in Medical Devices and capturing share gains and efficiencies in Consumer as we move through the year. Hope you have a great day everybody. Thank you very much.

Thank you. This concludes today’s Johnson & Johnson’s fourth quarter 2016 earnings conference call. You may now disconnect.