Strong Portfolio Plan
Michael Weinstein – JPMorgan: I’ll start with Alex. Alex, you talked about a bunch of items in your prepared comments and I think probably the one that I think people should focus on and probably got our attention was your comments about the goal of accelerating J&J’s sales and earnings growth, over the next several years not necessarily a short-term goal but a longer-term goal and within that you talked about innovation, globalization and other initiatives to try and accomplish that. Can you just talk a little about the portfolio today in that context, you talked about being more disciplined on strategic decisions regarding what goes into the portfolio and what comes out? Do you have the portfolio and do you have the R&D pipeline say to drive that acceleration and what do you think you need to do strategically to make that growth acceleration happen?
A Closer Look: J&J Earnings Cheat Sheet>>
Alex Gorsky – CEO: Mike, thanks a lot for the question. As I commented earlier in my comments, I think overall, we believe that our diversified portfolio does better position us for the healthcare market that we are likely to experience ahead. If we look across – let’s start with our pharmaceutical group, I believe the transformation that occurred – that has occurred over the past several years when you consider the fact that we went through a very significant period of generic entries and patent expirations and you look at not only the fact the major changes that we made in our organization. But also if you look at the focus that Paul, Joaquin and their teams have put on specific therapeutic areas and frankly the success rates that we have had with our clinical development programs in getting new products to the market, we think it’s really significant and has positioned us very well. We think by being focused in these areas not only does it give us an advantage in terms of our scientific insights in clinical development but it also enables us to leverage our commercial organization and really be focused on the right customers. So while we are very pleased with the uptick that we are seeing across that portfolio right now, with products like ZYTIGA, XARELTO, INCIVO, STELARA and SIMPONI. We’re also investing for the future and we’re excited about some of the new compounds that we have whether it’s canagliflozin, bapineuzumab, things further out such as ibrutinib as well as TMC435 and we’re continuing to invest even longer term as you heard in our announcement this week with our new cyclic peptide in heart failure recognizing that its earlier. So I think there we got a strong portfolio of very differentiated drugs that the market’s demanding, but clearly we’re also investing for the future. Now if I can step over to our MD&D space next, I think what I would say is, we’re also positioning ourselves for what we believe are going to be the needs, the demands of the future environment. Specifically, it requires innovation and that’s both in terms of products as well as the way that we’re offering products to that marketplace. I think some of the recent moves that we’ve made with Synthes for example, creating the world’s largest orthopedics platform, whether it’s in reconstruction with hips and knees, spine, Sports Medicine, the emerging neurologics, obviously working now with trauma, and the Maxillofacial group coming in from Synthes. It’s going to give us a breadth and depth to work with customers both in the United States as well as abroad on a very broad scale, bringing not only a broad array of products, but also other services and solutions that we think are going to be expected by hospitals and other payors in that particular environment. We’ve also made changes in our Surgery group, if you look at what we’ve done over the past couple of quarters by bringing Ethicon or Ethicon Endo-Surgery group and our renewed portfolio and our Cardiovascular group together. There too we think we are not only offering them a very differentiated pipeline particularly with biosurgicals, our energy instruments, but we’re also bringing a more competitive commercial model to bear that we think will bear fruits in the short-term as well as long-term. Finally, in our Consumer group, we’re clearly focused on remediation of our OTC business. That’s been a very clear priority that we set for the organization and we’re continuing to make strides, although we realize that it does present challenges and that there are learnings along the way. We believe – what we’ve seen frankly is that when we do get products back on the shelf that consumers demanded, and so we will get the consent decree remediation completed, and we’re very optimistic about the brands going forward, particularly when you look at our skin care line, you look at our baby care line, overall they are doing well, our oral care line also. So, we think that all of our segments of our business have good in line opportunities. We think there’s exciting opportunities coming in each of their pipelines. But we also realize that given some of the changes in the market that we’re likely going to have to be even more disciplined, more selective and decisive going forward. I think evidence of that is the decision that we made in the drug eluting stent market that we alluded to earlier, we think that was the right call. By the way, Louise mentioned earlier, if you look at what we’re doing with the Biosense Webster right now and the progress that we’re making, we’re pleased with that, we’re putting investments in other areas of our business. If you look at the investment with Synthes, there too we’re very optimistic based upon the work that we’ve seen through the integration so far. So, that would be my response to your question, Mike.
Michael Weinstein – JPMorgan: Thanks, Alex. Let me just take one quick follow-up with Dominic and maybe just to clarify a couple of items. One, Dominic, you referenced in your comments, supply disruptions in certain of your MD&D businesses, I don’t think I caught that earlier in your prepared remarks, so could you just identify where those are occurring? Second Dominic, if we look at the operational EPS guidance, my numbers had on the last call, your guidance for the year was $5.18 to $5.28 ex-currency, and today you said $5.25 to $5.32 ex-currency, did I get that right?
Dominic J. Caruso – VP, Finance and CFO: Yes, Mike. Let me take the last one first. You are exactly right. Our previous ex-currency guidance was $5.18 to $5.28. We increased the guidance to $5.25 to $5.32. Two things have happened there, we have added Synthes which we described as $0.03 to $0.05, so obviously the upper end of the range is up about $0.04. We tightened the range a little bit because at this stage and again, we feel more comfortable with our earnings for the balance of the year. With respect to supply disruption, I’ll ask Alex, if he wants to add some additional comments. Two areas in particular in our energy business, we’ve had some supply disruptions and in our endovascular business with respect to endovascular stents. Alex, I don’t know, if you want to add any more to that?
Alex Gorsky – CEO: Yes, Mike. We had two supply interruptions, again in our energy and in our cardiovascular stents. We are in the process of resolving those as we speak and we are confident that in the back end of this year we will see that return to a normal flow.
Pressures in Europe
Matthew Dodds – Citi Investment Research (US): Alex, I guess first for you. If you look at where Europe is heading, I think Europe, you were flat when you take out Synthes roughly. Looks like it’s a little worse than it’s been. Where do we think we are today and can you align the costs with some of the pressures you are seeing in Europe?
Alex Gorsky – CEO: Yes, Matt. Matt are you talking across the portfolio or in a specific segment?
Matthew Dodds – Citi Investment Research (US): Well I think the overall looked flat. I was wondering, if any segments you’re being hurt more than others in Europe broadly as well?
Alex Gorsky – CEO: Yes. Matt, your observation is right that overall we are general – I think we are up about 1% and again there is puts and takes across that. But what we are seeing is obviously some additional pressure with price as well as volumes and price being regulated mostly to tendering and some of the contract things that we would see in our pharmaceutical group. What we’re seeing is consistent with around 2011 with perhaps slightly more in Southern Europe. If you look at MD&D, we’re also seeing pressures, some in price, but some just in extended queues, longer wait times for certain procedures. So we’re watching it very closely. We have not seen a dramatic change over what we saw in 2011, but obviously we still think that there are a lot of macroeconomic conditions and dynamics that may impact that going forward.
Matthew Dodds – Citi Investment Research (US): Pharma on the pricing side has that also been more of an impact?
Alex Gorsky – CEO: Again, we’re seeing some impact in pharma on the pricing side mostly related to tenders and other austerity measures, but not to a significantly greater degree than what we’ve commented around 2011 so far this year.
Matthew Dodds – Citi Investment Research (US): Dominic, one quick one for you. When you look at the operating margin leverage both this quarter and the back half, can you roughly say how much of that might be due to local currency in the lower cost from the FX as an offset to the top line?
Dominic J. Caruso – VP, Finance and CFO: I think that one of the things that bear in mind is, we typically hedge our foreign currency commitments at about 18 months. So, our operations ex-translation, are not significantly impacted by changes in foreign currency, Matt. So, really what you’re looking at is sort of a reasonably equal mix of changes in simply translating the top line and the expenses from the local currencies to the U.S. dollars. So, I don’t think there is a pronounced difference between those two factors.