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Included with the press release that was sent to the investment community earlier this morning, is the schedule showing sales for major products and/or business franchises to facilitate updating your models. These 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 call may be considered forward-looking statements. The 10-K for the fiscal year 2009 identifies certain factors that could cause the company's actual results to differ materially from those projected in any forward-looking statements made this morning. 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. Last item. During the call, non-GAAP financial measures may be used to provide information pertinent to ongoing business performance. These measures are reconciled to the GAAP measures and are available in the press release or on the Johnson & Johnson website. Now, I would like to review our results for the second quarter of 2010. If you would refer to your copy of the press release, let's begin with the schedule titled Supplementary Sales Data by Geographic Area. Worldwide sales to customers were $15.3 billion for the second quarter of 2010, up 0.6% as compared to the second quarter of 2009. On an operational basis, sales were up slightly, and currency had a positive impact of 0.5%. In the U.S., sales declined 2.8%. In regions outside the U.S., our operational growth was 3%, while the effect of currency exchange rates positively impacted our reported results by 1.1 point. Our strongest performing region was the Asia-Pacific Africa region, which grew 6.1% on an operational basis. Europe grew 1.3% operationally, while the Western hemisphere, excluding the U.S. grew by 2.6% operationally.
If you'll now turn to the Consolidated Statement of Earnings, net earnings on a reported basis were $3.4 billion, compared to $3.2 billion in the same period in 2009; an increase of 7.5%. Earnings per share were $1.23 versus $1.15 a year ago.Please direct your attention to the boxed section of the schedule where we have provided earnings information adjusted to exclude special items. As referenced in the footnote, second quarter results in 2010 have been adjusted to exclude the after-tax impact of the gain from net litigation matters. Net earnings on an adjusted basis remain at $3.4 billion and earnings per share were $1.21, up 0.4% and 5.2%, respectively, versus the second quarter of 2009. I would now like to make some additional comments relative to the components leading to earnings before we move onto the segment highlights. Cost of goods sold at 30.2% of sales were 100 basis points higher than the same period in 2009, primarily due to cost associated with the impact and the recall and remediation efforts in the consumer business and the impact of price reductions in our Pharmaceutical business and certain MD&D businesses. Selling, marketing and administrative expenses, at 31% of sales, were down 50 basis points versus last year, due to cost-containment efforts. Our investment in research and development as a percent of sales was 10.8%, similar to the second quarter of 2009. Interest expense, net of interest income of $58 million is $27 million less the second quarter of 2009, primarily due to lower interest expense on lower average debt. Excluding special items, taxes were 22.7% in the second quarter of 2010 versus 24.7% in the second quarter of 2009. Dominic will discuss taxes in his commentary. Now, turning to the Consolidated Statement of Earnings for the first half of 2010, consolidated sales to customers for the first six months of 2010 were $31 billion, an increase of 2.3% as compared the same period a year ago. On a year to date basis sales were flat operationally and currency have a positive impact of 2.3 points.
On the consolidated statement of year to date earnings, I first like to draw your attention to the box section. Adjusted net earnings of $7 billion in 2010 compares to net earnings of $6.7 billion in 2009. Adjusted earnings per share at $2.50 were up 3.7% versus 2009 results.Turning now to business segment highlights, please refer to the Supplementary Sales Schedule highlighting major products or business franchises. I'll begin with the Consumer segment. Worldwide Consumer segment sales for the second quarter of 2010 of $3.6 billion decreased 5.4%, as compared to the same period last year. On an operational basis, sales declined 6.5%, while the impact of currency was positive 1.1 point. U.S. sales were down 14.3%, while international sales were down 0.2% on an operational basis. For the first quarter of 2010, sales for the over-the-counter or OTC pharmaceuticals and nutritionals decreased 13.4% on an operational basis compared to the same period in 2009, with U.S. sales down 27.5% and sales outside the U.S. up 1.9% on an operational basis. Sales were impacted by the voluntary recalls announced earlier this year and suspension of production at the McNeil Fort Washington, Pennsylvania facility. As an update on the products included in the January recall that are produced at our McNeil Las Piedras Puerto Rico facility, we are now at normal levels of production. Restocking commenced in the second quarter and will continue to ramp up during the third quarter. Regarding the Fort Washington facility, operations at this plant were suspended in connection with the recall of infants and children's liquid OTC products manufactured there. Read the rest of this transcript for free on seekingalpha.com