Johnson & Johnson Reports 2011 Fourth-Quarter and Full-Year Results:

January 24, 2012

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Johnson & Johnson Reports 2011 Fourth-Quarter and Full-Year Results:

2011 Fourth-Quarter Sales of $16.3 Billion Increased 3.9%; EPS was $0.08
2011 Full-Year Sales of $65.0 Billion Increased 5.6%; Full-Year EPS was $3.49
Excluding Special Items, 2011 Fourth-Quarter EPS was $1.13, an Increase of 9.7%*
And 2011 Full-Year EPS was $5.00, an Increase of 5.0%*

NEW BRUNSWICK, N.J., Jan. 24, 2012 /PRNewswire-FirstCall/ -- Johnson & Johnson today announced sales of $16.3 billion for the fourth quarter of 2011, an increase of 3.9% as compared to the fourth quarter of 2010. Operational sales increased 4.0% and the negative impact of currency was 0.1%. Domestic sales declined 3.4%, while international sales increased 10.2%, reflecting an operational increase of 10.4% and a negative currency impact of 0.2%. Worldwide sales for the full-year 2011 were $65.0 billion, an increase of 5.6% versus 2010. Operational sales increased 2.8% and the positive impact of currency was 2.8%. Domestic sales declined 1.8%, while international sales increased 12.4%, reflecting operational growth of 7.0% and a positive currency impact of 5.4%.

Net earnings and diluted earnings per share for the fourth quarter of 2011 were $0.2 billion and $0.08, respectively. Fourth-quarter 2011 net earnings reflect after-tax charges of $2.9 billion, which include product liability expenses, the net impact of litigation settlements, costs associated with the DePuy ASR^TM Hip recall program, and an adjustment to the value of a currency option and costs related to the planned acquisition of Synthes, Inc. Fourth-quarter 2010 net earnings included after-tax charges of $922 million representing product liability expenses, the net impact of litigation settlements, and costs associated with the DePuy ASR^TM Hip recall program. Excluding these special items for both periods, net earnings for the current quarter were $3.1 billion and diluted earnings per share were $1.13, representing increases of 9.3% and 9.7%, respectively, as compared to the same period in 2010.*

Net earnings and diluted earnings per share for the full-year 2011 were $9.7 billion and $3.49, respectively. Full-year 2011 net earnings reflect after-tax charges of $4.2 billion, which include product liability expenses, the net impact of litigation settlements, a previously announced restructuring charge by Cordis Corporation, costs associated with the DePuy ASR^TM Hip recall program, and an adjustment to the value of a currency option and costs related to the planned acquisition of Synthes, Inc. Full-year 2010 net earnings included a net after-tax gain of $55 million representing product liability expenses, the net impact of litigation settlements, and costs associated with the DePuy ASR^TM Hip recall program. Excluding these special items in both periods, net earnings for the full-year 2011 were $13.9 billion and diluted earnings per share were $5.00, representing increases of 4.4% and 5.0%, respectively, as compared with the full year of 2010.*

The Company announced earnings guidance for full-year 2012 of $5.05 to $5.15 per share, which excludes the impact of special items. This guidance reflects operational growth of approximately 3.5% to 5.5% partially offset by an estimated negative impact of currency of approximately 2.5%.

"We delivered solid results for 2011, built on the strong growth of our recently launched pharmaceutical products, and continued the steady momentum of new product approvals across all our businesses," said William C. Weldon, Chairman and Chief Executive Officer. "Our talented people are focused on bringing meaningful innovations to patients and customers to address significant unmet needs, positioning us well to deliver sustainable leadership and profitable growth in health care."

Worldwide Consumer sales of $14.9 billion for the full-year 2011 represented an increase of 2.0% over the prior year, consisting of an operational decline of 0.7% and a positive impact from currency of 2.7%. Domestic sales decreased 6.7%; international sales increased 7.3%, which reflected an operational increase of 2.9% and a positive currency impact of 4.4%.

Sales in U.S. over-the-counter medicines were significantly impacted by the suspension of manufacturing at the McNeil Consumer Healthcare facility in Fort Washington, Pa., as well as the impact on production volumes related to ongoing efforts to enhance quality and manufacturing systems. Positive contributors to operational results were international sales of over-the-counter medicines; NEUTROGENA® skin care products; baby care products; and LISTERINE® antiseptic mouthrinse.

Worldwide Pharmaceutical sales of $24.4 billion for the full-year 2011 represented an increase of 8.8% versus the prior year with an operational increase of 6.2% and a positive impact from currency of 2.6%. Domestic sales decreased 1.1%; international sales increased 21.3%, which reflected an operational increase of 15.5% and a positive currency impact of 5.8%.

Sales results in the U.S. were negatively impacted by generic competition for LEVAQUIN® (levofloxacin), a treatment for bacterial infections, which was offset by the strong performance of recently launched products.

The strong performance of recently launched products include STELARA® (ustekinumab), a biologic approved for the treatment of moderate to severe plaque psoriasis; ZYTIGA® (abiraterone acetate), an oral, once-daily medication for use in combination with prednisone or prednisolone, for the treatment of men with metastatic, castration-resistant prostate cancer; INVEGA® SUSTENNA® (paliperidone palmitate) a once-monthly, long-acting, injectable atypical antipsychotic for the acute and maintenance treatment of schizophrenia in adults; and SIMPONI® (golimumab), a biologic approved to treat adults with moderate to severe rheumatoid arthritis, psoriatic arthritis, and ankylosing spondylitis.

Also contributing to operational sales growth were strong results for REMICADE® (infliximab), a biologic approved for the treatment of a number of immune-mediated, inflammatory diseases, including incremental sales from the amended distribution agreement with Merck; recently acquired vaccines, proteins and antibodies from Crucell that prevent and/or treat infectious diseases; PREZISTA® (darunavir), a treatment for HIV; and VELCADE® (bortezomib), a treatment for multiple myeloma.

During the quarter, the U.S. Food and Drug Administration (FDA) approved an additional indication for XARELTO® (rivaroxaban) to reduce the risk of stroke and systemic embolism in patients with nonvalvular atrial fibrillation. In addition, the European Commission granted marketing authorization for EDURANT® (rilpivirine) as a once daily treatment, in combination with other antiretroviral agents (ARVs), for the treatment of human immunodeficiency virus type 1 (HIV-1) infection in ARV treatment-naive adult patients with a viral load < 100,000 HIV-1 RNA copies/mL.

Also during the quarter, supplemental New Drug Applications were submitted to the FDA seeking approval for the use of XARELTO® (rivaroxaban), an oral anticoagulant, to reduce the risk of thrombotic cardiovascular events in patients with Acute Coronary Syndrome, and for NUCYNTA® ER (tapentadol) extended-release tablets, an oral analgesic, for the management of neuropathic pain associated with diabetic peripheral neuropathy in adults. The Company also announced an agreement with Pharmacyclics, Inc. to jointly develop and market the BTK Inhibitor, PCI-32765, for the treatment of cancer.

Worldwide Medical Devices and Diagnostics sales of $25.8 billion for the full-year 2011 represented an increase of 4.8% versus the prior year with an operational increase of 1.7% and a positive impact from currency of 3.1%. Domestic sales decreased 0.4%; international sales increased 9.2%, which reflected an operational increase of 3.4% and a positive currency impact of 5.8%.

Primary contributors to operational growth included Ethicon's surgical care products; Ethicon Endo-Surgery's Advanced Sterilization Products and international sales of minimally invasive products; Diabetes Care's blood glucose monitoring and insulin delivery products; Biosense Webster's electrophysiology business; and Vistakon's disposable contact lenses. This growth was partially offset by lower sales in the Cardiovascular Care business, reflecting continued market and competitive pressures. As the Company previously announced, we have now exited the drug eluting stent market.

During the quarter, the FDA approved the new ThermoCool® SF irrigated ablation catheter for use in atrial fibrillation and cleared the ENSEAL® G2 Curved and Straight Tissue Sealers to expand surgeons' options for achieving strong vessel seals in both open and minimally invasive surgery. Ethicon Endo-Surgery, Inc. also completed its acquisition of SterilMed, Inc., a leader in the reprocessing and remanufacturing of single-use medical devices in the United States.

About Johnson & Johnson

Caring for the world, one person at a time...inspires and unites the people of Johnson & Johnson. We embrace research and science - bringing innovative ideas, products and services to advance the health and well-being of people. Our 118,000 employees at more than 250 Johnson & Johnson operating companies work with partners in health care to touch the lives of over a billion people every day, throughout the world.

* Net earnings and diluted earnings per share excluding special items are non-GAAP financial measures and should not be considered replacements for, and should be read together with, the most comparable GAAP financial measures. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures is included in the financial schedules accompanying this press release and can be found in the Investor Relations section of the Company's website at www.investor.jnj.com.

NOTE TO INVESTORS

Johnson & Johnson will conduct a meeting with members of the investment community to discuss this news release today at 8:30 a.m., Eastern Time. A simultaneous webcast of the meeting for investors and other interested parties may be accessed by visiting the Johnson & Johnson website at www.investor.jnj.com. A replay and podcast will be available approximately two hours after the live webcast by visiting www.investor.jnj.com.

Copies of the financial schedules accompanying this press release are available at www.investor.jnj.com/historical-sales.cfm. These schedules include supplementary sales data, a condensed consolidated statement of earnings, and sales of key products/franchises. Additional information on Johnson & Johnson, including a pharmaceutical pipeline of selected compounds in late stage development and medical devices and diagnostics pipeline of selected products, can be found on the Company's investor website at www.jnj.com

(This press release contains "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. The reader is cautioned not to rely on these forward-looking statements. These statements are based on current expectations of future events. If underlying assumptions prove inaccurate or unknown risks or uncertainties materialize, actual results could vary materially from the expectations and projections of Johnson & Johnson. Risks and uncertainties include, but are not limited to, general industry conditions and competition; economic factors, such as interest rate and currency exchange rate fluctuations; technological advances and patents attained by competitors; challenges inherent in new product development, including obtaining regulatory approvals; domestic and foreign health care reforms and governmental laws and regulations; trends toward health care cost containment; and increased scrutiny of the healthcare industry by government agencies. A further list and description of these risks, uncertainties and other factors can be found in Exhibit 99 of Johnson & Johnson's Annual Report on Form 10-K for the fiscal year ended January 2, 2011. Copies of this Form 10-K, as well as subsequent filings, are available online at www.sec.gov, www.jnj.com or on request from Johnson & Johnson. Johnson & Johnson does not undertake to update any forward-looking statements as a result of new information or future events or developments.)

Johnson & Johnson and Subsidiaries

Supplementary Sales Data

(Unaudited; Dollars in Millions)

FOURTH QUARTER

TWELVE MONTHS

Percent Change

2011

2010

Total

Operations

Currency

2011

2010

Total

Operations

Currency

Sales to customers by

segment of business

Consumer

U.S.

$ 1,248

1,219

2.4

$ 5,151

5,519

(6.7)

International

2,420

2,391

1.2

2.8

(1.6)

9,732

9,071

7.3

2.9

4.4

3,668

3,610

1.6

2.7

(1.1)

14,883

14,590

2.0

(0.7)

2.7

Pharmaceutical

U.S.

2,887

3,149

(8.3)

12,386

12,519

(1.1)

International

3,207

2,561

25.2

25.0

0.2

11,982

9,877

21.3

15.5

5.8

6,094

5,710

6.7

6.6

0.1

24,368

22,396

8.8

6.2

2.6

Med Devices & Diagnostics

U.S.

2,850

2,861

(0.4)

11,371

11,412

(0.4)

International

3,643

3,463

5.2

4.6

0.6

14,408

13,189

9.2

3.4

5.8

6,493

6,324

2.7

2.4

0.3

25,779

24,601

4.8

1.7

3.1

U.S.

6,985

7,229

(3.4)

28,908

29,450

(1.8)

International

9,270

8,415

10.2

10.4

(0.2)

36,122

32,137

12.4

7.0

5.4

Worldwide

$ 16,255

15,644

3.9

4.0

(0.1)

$ 65,030

61,587

5.6

2.8

Johnson & Johnson and Subsidiaries

Supplementary Sales Data

(Unaudited; Dollars in Millions)

FOURTH QUARTER

TWELVE MONTHS

Percent Change

2011

2010

Total

Operations

Currency

2011

2010

Total

Operations

Currency

Sales to customers by

geographic area

U.S.

$ 6,985

7,229

(3.4)

$ 28,908

29,450

(1.8)

Europe

4,279

3,947

8.4

9.4

(1.0)

17,129

15,510

10.4

5.3

5.1

Western Hemisphere excluding U.S.

1,688

1,471

14.8

17.8

(3.0)

6,418

5,550

15.6

12.2

3.4

Asia-Pacific, Africa

3,303

2,997

10.2

7.9

2.3

12,575

11,077

13.5

6.6

6.9

International

9,270

8,415

10.2

10.4

(0.2)

36,122

32,137

12.4

7.0

5.4

Worldwide

$ 16,255

15,644

3.9

4.0

(0.1)

$ 65,030

61,587

5.6

2.8

Johnson & Johnson and Subsidiaries

Condensed Consolidated Statement of Earnings

(Unaudited; in Millions Except Per Share Figures)

FOURTH QUARTER

2011

2010

Percent

Increase

Amount

to Sales

Amount

to Sales

(Decrease)

Sales to customers

$ 16,255

100.0

$ 15,644

100.0

3.9

Cost of products sold

5,338

32.8

5,040

32.2

5.9

Selling, marketing and administrative expenses

5,458

33.6

5,180

33.1

5.4

Research and development expense

2,155

13.3

1,982

12.7

8.7

Interest (income)expense, net

148

0.9

114

0.7

Other (income)expense, net

2,858

17.6

1,100

7.1

Restructuring (income)expense, net

(20)

(0.1)

Earnings before provision for taxes on income

318

1.9

2,228

14.2

(85.7)

Provision for taxes on income

100

0.6

286

1.8

(65.0)

Net earnings

$ 218

1.3

$ 1,942

12.4

(88.8)

Net earnings per share (Diluted)

$ 0.08

$ 0.70

(88.6)

Average shares outstanding (Diluted)

2,768.9

2,781.6

Effective tax rate

31.4

12.8

Adjusted earnings before provision for taxes and net earnings

Earnings before provision for taxes on income

$ 3,657

(1)

22.5

$ 3,451

(1)

22.1

6.0

Net earnings

$ 3,129

(1)

19.2

$ 2,864

(1)

18.3

9.3

Net earnings per share (Diluted)

$ 1.13

(1)

$ 1.03

(1)

9.7

Effective tax rate

14.4%

17.0%

(1) See Reconciliation of Non-GAAP Financial Measures.

Johnson & Johnson and Subsidiaries

Condensed Consolidated Statement of Earnings

(Unaudited; in Millions Except Per Share Figures)

TWELVE MONTHS

2011

2010

Percent

Increase

Amount

to Sales

Amount

to Sales

(Decrease)

Sales to customers

$ 65,030

100.0

$ 61,587

100.0

5.6

Cost of products sold

20,360

31.3

18,792

30.5

8.3

Selling, marketing and administrative expenses

20,969

32.3

19,424

31.5

8.0

Research and development expense

7,548

11.6

6,844

11.1

10.3

Interest (income)expense, net

480

0.7

348

0.6

Other (income)expense, net

2,743

4.2

(768)

(1.2)

Restructuring (income)expense, net

569

0.9

Earnings before provision for taxes on income

12,361

19.0

16,947

27.5

(27.1)

Provision for taxes on income

2,689

4.1

3,613

5.8

(25.6)

Net earnings

$ 9,672

14.9

$ 13,334

21.7

(27.5)

Net earnings per share (Diluted)

$ 3.49

$ 4.78

(27.0)

Average shares outstanding (Diluted)

2,775.3

2,788.8

Effective tax rate

21.8

21.3

Adjusted earnings before provision for taxes and net earnings

Earnings before provision for taxes on income

$ 17,353

(1)

26.7

$ 16,830

(1)

27.3

3.1

Net earnings

$ 13,867

(1)

21.3

$ 13,279

(1)

21.6

4.4

Net earnings per share (Diluted)

$ 5.00

(1)

$ 4.76

(1)

5.0

Effective tax rate

20.1%

21.1%

(1) See Reconciliation of Non-GAAP Financial Measures.

REPORTED SALES vs. PRIOR PERIOD ($MM)

FOURTH QUARTER

TWELVE MONTHS

% Change

2011

2010

Reported

Operational (1)

Currency

2011

2010

Reported

Operational (1)

Currency

CONSUMER SEGMENT (2)

BABY CARE

103

0.0%

418

409

2.2%

Intl

465

474

-1.9%

0.7%

-2.6%

1,922

1,800

6.8%

3.4%

568

577

-1.6%

0.6%

-2.2%

2,340

2,209

5.9%

3.2%

2.7%

ORAL CARE

173

149

16.1%

656

635

3.3%

Intl

239

240

-0.4%

1.4%

-1.8%

968

891

8.6%

3.9%

4.7%

412

389

5.9%

7.0%

-1.1%

1,624

1,526

6.4%

3.6%

2.8%

OTC/NUTRITIONALS

370

381

-2.9%

1,429

1,853

-22.9%

Intl

766

711

7.7%

8.7%

-1.0%

2,973

2,696

10.3%

5.2%

5.1%

1,136

1,092

4.0%

4.6%

-0.6%

4,402

4,549

-3.2%

-6.2%

3.0%

SKIN CARE

403

352

14.5%

1,654

1,537

7.6%

Intl

541

537

0.7%

1.3%

-0.6%

2,061

1,915

7.6%

3.0%

4.6%

944

889

6.2%

6.6%

-0.4%

3,715

3,452

7.6%

5.0%

2.6%

WOMEN'S HEALTH

118

-24.6%

439

522

-15.9%

Intl

309

332

-6.9%

-4.0%

-2.9%

1,353

1,322

2.3%

-1.5%

3.8%

398

450

-11.6%

-9.5%

-2.1%

1,792

1,844

-2.8%

-5.5%

2.7%

WOUND CARE/OTHER

110

116

-5.2%

555

563

-1.4%

Intl

100

3.1%

6.2%

-3.1%

455

447

1.8%

-3.3%

5.1%

210

213

-1.4%

-0.5%

-0.9%

1,010

0.0%

-2.3%

2.3%

TOTAL CONSUMER

1,248

1,219

2.4%

5,151

5,519

-6.7%

Intl

2,420

2,391

1.2%

2.8%

-1.6%

9,732

9,071

7.3%

2.9%

4.4%

3,668

3,610

1.6%

2.7%

-1.1%

14,883

14,590

2.0%

-0.7%

2.7%

See footnotes at end of schedule

REPORTED SALES vs. PRIOR PERIOD ($MM)

FOURTH QUARTER

TWELVE MONTHS

% Change

2011

2010

Reported

Operational (1)

Currency

2011

2010

Reported

Operational (1)

Currency

PHARMACEUTICAL SEGMENT (2) (4)

ACIPHEX/PARIET

110

119

-7.6%

414

475

-12.8%

Intl

144

133

8.3%

8.7%

-0.4%

561

531

5.6%

0.0%

5.6%

254

252

0.8%

1.0%

-0.2%

975

1,006

-3.1%

-6.1%

3.0%

CONCERTA/METHYLPHENIDATE

155

261

-40.6%

822

929

-11.5%

Intl

119

107

11.2%

11.6%

-0.4%

446

390

14.4%

8.7%

5.7%

274

368

-25.5%

-25.4%

-0.1%

1,268

1,319

-3.9%

-5.6%

1.7%

DOXIL/CAELYX

-81.8%

140

280

-50.0%

Intl

-10.3%

262

5.3%

-41.8%

-34.1%

-7.7%

402

320

25.6%

22.1%

3.5%

DURAGESIC/FENTANYL TRANSDERMAL

-53.3%

162

-44.4%

Intl

119

151

-21.2%

-21.9%

0.7%

499

586

-14.8%

-20.1%

5.3%

140

196

-28.6%

-29.1%

0.5%

589

748

-21.3%

-25.5%

4.2%

LEVAQUIN/FLOXIN

(6)

386

579

1,312

-55.9%

Intl

-21.4%

-17.7%

-3.7%

-2.2%

-3.7%

1.5%

400

-98.8%

-98.7%

-0.1%

623

1,357

-54.1%

-54.2%

0.1%

PREZISTA

143

111

28.8%

529

401

31.9%

Intl

173

125

38.4%

39.0%

-0.6%

682

456

49.6%

44.8%

4.8%

316

236

33.9%

34.2%

-0.3%

1,211

857

41.3%

38.6%

2.7%

PROCRIT/EPREX

191

270

-29.3%

814

1,070

-23.9%

Intl

177

209

-15.3%

-13.7%

-1.6%

809

864

-6.4%

-10.8%

4.4%

368

479

-23.2%

-22.6%

-0.6%

1,623

1,934

-16.1%

-18.0%

1.9%

REMICADE

776

679

14.3%

3,276

3,099

5.7%

US Exports (3)

437

381

14.7%

1,797

1,487

20.8%

Intl

215

2.3%

419

4.8%

1,428

1,065

34.1%

33.6%

0.5%

5,492

4,610

19.1%

18.7%

0.4%

RISPERDAL/RISPERIDONE

(12)

Intl

141

149

-5.4%

-7.9%

2.5%

508

539

-5.8%

-11.6%

5.8%

148

151

-2.0%

-4.4%

2.4%

542

527

2.8%

-3.1%

5.9%

RISPERDAL CONSTA

108

105

2.9%

443

445

-0.4%

Intl

277

283

-2.1%

-1.3%

-0.8%

1,140

1,055

8.1%

2.7%

5.4%

385

388

-0.8%

-0.2%

-0.6%

1,583

1,500

5.5%

1.7%

3.8%

TOPAMAX

8.1%

176

199

-11.6%

Intl

-3.6%

-2.6%

-1.0%

312

339

-8.0%

-11.9%

3.9%

121

0.0%

0.7%

-0.7%

488

538

-9.3%

-11.8%

2.5%

VELCADE

Intl

352

287

22.6%

22.4%

0.2%

1,274

1,080

18.0%

12.7%

5.3%

352

287

22.6%

22.4%

0.2%

1,274

1,080

18.0%

12.7%

5.3%

OTHER

895

698

28.2%

3,272

2,672

22.5%

Intl

1,369

1,002

36.6%

36.0%

0.6%

5,026

3,928

28.0%

22.2%

5.8%

2,264

1,700

33.2%

32.8%

0.4%

8,298

6,600

25.7%

22.2%

3.5%

TOTAL PHARMACEUTICAL

2,887

3,149

-8.3%

12,386

12,519

-1.1%

Intl

3,207

2,561

25.2%

25.0%

0.2%

11,982

9,877

21.3%

15.5%

5.8%

6,094

5,710

6.7%

6.6%

0.1%

24,368

22,396

8.8%

6.2%

2.6%

See footnotes at end of schedule

REPORTED SALES vs. PRIOR PERIOD ($MM)

FOURTH QUARTER

TWELVE MONTHS

Total

MAJOR NEW PHARM PRODUCTS(4)

2011

2010

% Change

2011

2010

% Change

(INCLUDED IN OTHER)

INTELENCE

32.4%

163

127

28.3%

Intl

22.6%

151

116

30.2%

27.7%

314

243

29.2%

INVEGA

-5.7%

285

270

5.6%

Intl

28.3%

214

154

39.0%

125

116

7.8%

499

424

17.7%

SIMPONI

10.7%

235

193

21.8%

Intl

175

119

83.1%

410

226

81.4%

STELARA

126

72.6%

443

240

84.6%

Intl

72.3%

295

153

92.8%

207

120

72.5%

738

393

87.8%

See footnotes at end of schedule

REPORTED SALES vs. PRIOR PERIOD ($MM)

FOURTH QUARTER

TWELVE MONTHS

% Change

2011

2010

Reported

Operational (1)

Currency

2011

2010

Reported

Operational (1)

Currency

MEDICAL DEVICES AND DIAGNOSTICS (2)

CARDIOVASCULAR CARE (5)

191

246

-22.4%

841

1,008

-16.6%

Intl

349

383

-8.9%

-9.6%

0.7%

1,447

1,544

-6.3%

-11.4%

5.1%

540

629

-14.1%

-14.5%

0.4%

2,288

2,552

-10.3%

-13.4%

3.1%

DEPUY

775

807

-4.0%

3,093

3,145

-1.7%

Intl

678

640

5.9%

5.7%

0.2%

2,716

2,440

11.3%

5.0%

6.3%

1,453

1,447

0.4%

0.3%

0.1%

5,809

5,585

4.0%

1.2%

2.8%

DIABETES CARE

330

318

3.8%

1,312

1,259

4.2%

Intl

340

326

4.3%

4.4%

-0.1%

1,340

1,211

10.7%

5.7%

5.0%

670

644

4.0%

4.1%

-0.1%

2,652

2,470

7.4%

5.0%

2.4%

ETHICON

536

501

7.0%

2,111

2,000

5.6%

Intl

697

651

7.1%

7.6%

-0.5%

2,759

2,503

10.2%

5.0%

5.2%

1,233

1,152

7.0%

7.3%

-0.3%

4,870

4,503

8.2%

5.3%

2.9%

ETHICON ENDO-SURGERY

524

501

4.6%

1,957

1,975

-0.9%

Intl

809

756

7.0%

6.3%

0.7%

3,123

2,783

12.2%

6.3%

5.9%

1,333

1,257

6.0%

5.6%

0.4%

5,080

4,758

6.8%

3.4%

ORTHO-CLINICAL DIAGNOSTICS

280

276

1.4%

1,091

0.0%

Intl

274

260

5.4%

4.8%

0.6%

1,073

962

11.5%

5.9%

5.6%

554

536

3.4%

3.1%

0.3%

2,164

2,053

5.4%

2.8%

2.6%

VISION CARE

214

212

0.9%

966

934

3.4%

Intl

496

447

11.0%

8.2%

2.8%

1,950

1,746

11.7%

4.5%

7.2%

710

659

7.7%

5.8%

1.9%

2,916

2,680

8.8%

4.1%

4.7%

TOTAL MEDICAL DEVICES AND DIAGNOSTICS

2,850

2,861

-0.4%

11,371

11,412

-0.4%

Intl

3,643

3,463

5.2%

4.6%

0.6%

14,408

13,189

9.2%

3.4%

5.8%

6,493

6,324

2.7%

2.4%

0.3%

25,779

24,601

4.8%

1.7%

3.1%

* Percentage greater than 100%

(1) Operational growth excludes the effect of currency

(2) Select areas (unaudited)

(3) Reported in U.S. sales

(4) Prior year amounts have been reclassified to conform to current year product disclosure

(5) Previously Cordis

Johnson & Johnson and Subsidiaries

Reconciliation of Non-GAAP Financial Measures

Fourth Quarter

% Incr. /

Twelve Months

% Incr. /

(Dollars in Millions Except Per Share Data)

2011

2010

(Decr.)

2011

2010

(Decr.)

Earnings before provision for taxes on income - as reported

$ 318

2,228

(85.7)

$ 12,361

16,947

(27.1)

Net litigation settlements loss (gain)

1,134

374

1,710

(966)

Product liability expenses

1,522

569

1,600

569

Restructuring

(20)

656

DePuy ASR^TM Hip recall program

412

280

521

280

Currency option adjustment and costs related to planned acquisition of Synthes

277

491

In-process research and development

Earnings before provision for taxes on income - as adjusted

$ 3,657

3,451

6.0

$ 17,353

16,830

3.1

Net Earnings - as reported

$ 218

1,942

(88.8)

$ 9,672

13,334

(27.5)

Net litigation settlements loss (gain)

1,022

279

1,466

(698)

Product liability expenses

1,217

404

1,279

404

Restructuring

(13)

536

DePuy ASR^TM Hip recall program

336

239

426

239

Currency option adjustment and costs related to planned acquisition of Synthes

338

477

In-process research and development

Net Earnings - as adjusted

$ 3,129

2,864

9.3

$ 13,867

13,279

4.4

Diluted Net Earnings per share - as reported

$ 0.08

0.70

(88.6)

$ 3.49

4.78

(27.0)

Net litigation settlements loss (gain)

0.37

0.10

0.53

(0.25)

Product liability expenses

0.44

0.14

0.46

0.14

Restructuring

0.19

DePuy ASR^TM Hip recall program

0.12

0.09

0.16

0.09

Currency option adjustment and costs related to planned acquisition of Synthes

0.12

0.17

In-process research and development

Diluted Net Earnings per share - as adjusted

$ 1.13

1.03

9.7

$ 5.00

4.76

5.0

The Company believes investors gain additional perspective of underlying business trends and results by providing a measure of earnings before provision for taxes on income, net earnings and diluted net earnings per share that excludes special items in order to evaluate ongoing business operations.

SOURCE Johnson & Johnson

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