Johnson & Johnson Reports 2011 Third-Quarter Results

Sales of $16.0 Billion increased 6.8% Versus 2010 Third-Quarter; Third Quarter EPS was $1.15

Excluding Special Items, 2011 Third-Quarter EPS of $1.24, increased 0.8%*

Oct 18, 2011, 07:45 ET from Johnson & Johnson

NEW BRUNSWICK, N.J., Oct. 18, 2011 /PRNewswire-FirstCall/ -- Johnson & Johnson (NYSE: JNJ) today announced sales of $16.0 billion for the third quarter of 2011, an increase of 6.8% as compared to the third quarter of 2010.  Operational results increased 2.6% and the positive impact of currency was 4.2%.  Domestic sales declined 3.7%.  International sales increased 16.4%, reflecting operational growth of 8.3% and a positive currency impact of 8.1%.

Net earnings and diluted earnings per share for the third quarter of 2011 were $3.2 billion and $1.15, respectively.  Third-quarter 2011 net earnings also included an after-tax mark-to-market adjustment to the value of the currency option associated with the planned acquisition of Synthes, Inc.  Excluding special items, net earnings for the current quarter were $3.4 billion and diluted earnings per share were $1.24, representing increases of 0.8% and 0.8%, respectively, as compared to the same period in 2010.*  

The Company updated its earnings guidance for full-year 2011 to $4.95 - $5.00 per share.  The Company's guidance excludes the impact of special items.

"Our solid results this quarter reflect the success of many of our recently launched products," said William C. Weldon, Chairman and Chief Executive Officer.  "As we near the completion of our 125th year in business, our people continue to deliver new products, innovative pipelines and expand our global presence in ways that position us well to drive long-term growth and meet significant unmet medical and customer needs," said Weldon.

Worldwide Consumer sales of $3.7 billion for the third quarter represented an increase of 4.9% versus the prior year consisting of an operational increase of 0.5% and a positive impact from currency of 4.4%.  Domestic sales declined 4.5%.  International sales increased 10.1%, which reflected an operational increase of 3.3% and a positive currency impact of 6.8%.

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 NEUTROGENA® and Dabao skin care products; international sales of oral care products; and baby care products.

In September, McNeil-PPC, Inc. completed the acquisition of full ownership of the Johnson & Johnson-Merck Consumer Pharmaceuticals Co. in the U.S. The business will be renamed McNeil Consumer Pharmaceuticals Co. and will continue to market products under the PEPCID®, MYLANTA®, and MYLICON® brands.

Worldwide Pharmaceutical sales of $6.0 billion for the third quarter represented an increase of 8.9% versus the prior year with operational growth of 4.9% and a positive impact from currency of 4.0%.  Domestic sales declined 6.1%.  International sales increased 27.5%, which reflected an operational increase of 18.5% and a positive currency impact of 9.0%.  

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

The strong performance of recently launched products, include 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; STELARA® (ustekinumab), a biologic approved for the treatment of moderate to severe plaque psoriasis; SIMPONI® (golimumab), a biologic approved to treat adults with moderate to severe rheumatoid arthritis, psoriatic arthritis, and ankylosing spondylitis; and INVEGA® SUSTENNA™ (paliperidone palmitate) a once-monthly, long-acting, injectable atypical antipsychotic for the acute and maintenance treatment of schizophrenia in adults.

Also contributing to operational sales growth were the incremental sales from the amended distribution agreement with Merck for sales of REMICADE® (infliximab), a biologic approved for the treatment of a number of immune mediated inflammatory diseases; 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 European Commission granted full approval of the Marketing Authorization of ZYTIGA® (abiraterone acetate), a novel, once-daily, oral medication for use in combination with prednisone or prednisolone, for the treatment of metastatic castration-resistant prostate cancer.  In addition, the European Commission approved INCIVO® (telaprevir), a direct acting antiviral protease inhibitor, for the treatment of genotype-1 chronic hepatitis C virus, in combination with peginterferon alfa and ribavirin, in adults.

The U.S. Food and Drug Administration (FDA) approved an additional indication for REMICADE® (infliximab) for the treatment of moderately to severely active ulcerative colitis in pediatric patients who have had an inadequate response to conventional therapy.  Also during the quarter, the FDA approved NUCYNTA® ER, an oral analgesic, for the management of moderate to severe chronic pain in adults.

In September, the Company announced that the Committee for Medicinal Products for Human use of the European Medicines Agency adopted a positive opinion recommending the approval of EDURANT® (rilpivirine), a once-daily treatment in combination with other antiretroviral agents, for the treatment of human immunodeficiency virus type 1 infection in antiretroviral treatment-naive adult patients.

Worldwide Medical Devices and Diagnostics sales of $6.3 billion for the third quarter represented an increase of 6.1% versus the prior year consisting of an operational increase of 1.7% and a positive currency impact of 4.4%.  Domestic sales declined 0.7%.  International sales increased 12.3%, which reflected an operational increase of 3.9% and a positive currency impact of 8.4%.

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; and Biosense Webster's electrophysiology business.

During the quarter, the FDA cleared DePuy Orthopaedics, Inc.'s TRUMATCH® Personalized Solutions System for use with the SIGMA® Fixed-Bearing Knee system.  TRUMATCH®  Personalized Solutions is a surgical instrumentation and computer software system that is designed to aid in knee implant positioning and procedure efficiency.  

In September, Ethicon Endo-Surgery announced that it entered into a definitive agreement to acquire privately-held SterilMed, Inc., a leader in the reprocessing and remanufacturing of medical devices in the U.S.  The acquisition would broaden the Ethicon Endo-Surgery portfolio and enable expansion in a rapidly growing market segment, bringing added scale and scope.

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 approximately 117,000 employees at more than 250 Johnson & Johnson 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 conference call with financial analysts 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.  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)

THIRD QUARTER

NINE MONTHS

Percent Change

Percent Change

2011

2010

Total

Operations

Currency

2011

2010

Total

Operations

Currency

Sales to customers by

segment of business

Consumer

   U.S.

$   1,219

1,277

(4.5)

%

(4.5)

-

$   3,903

4,300

(9.2)

%

(9.2)

-

   International

2,521

2,290

10.1

3.3

6.8

7,312

6,680

9.5

2.9

6.6

3,740

3,567

4.9

0.5

4.4

11,215

10,980

2.1

(1.9)

4.0

Pharmaceutical

   U.S.

2,869

3,054

(6.1)

(6.1)

-

9,499

9,370

1.4

1.4

-

   International

3,113

2,441

27.5

18.5

9.0

8,775

7,316

19.9

12.1

7.8

5,982

5,495

8.9

4.9

4.0

18,274

16,686

9.5

6.1

3.4

Med Devices & Diagnostics

   U.S.

2,780

2,800

(0.7)

(0.7)

-

8,521

8,551

(0.4)

(0.4)

-

   International

3,503

3,120

12.3

3.9

8.4

10,765

9,726

10.7

3.0

7.7

6,283

5,920

6.1

1.7

4.4

19,286

18,277

5.5

1.4

4.1

U.S.

6,868

7,131

(3.7)

(3.7)

-

21,923

22,221

(1.3)

(1.3)

-

International

9,137

7,851

16.4

8.3

8.1

26,852

23,722

13.2

5.8

7.4

Worldwide

$ 16,005

14,982

6.8

%

2.6

4.2

$ 48,775

45,943

6.2

%

2.3

3.9

Johnson & Johnson and Subsidiaries

Supplementary Sales Data

(Unaudited; Dollars in Millions)

THIRD QUARTER

NINE MONTHS

Percent Change

Percent Change

2011

2010

Total

Operations

Currency

2011

2010

Total

Operations

Currency

Sales to customers by

geographic area

U.S.

$   6,868

7,131

(3.7)

%

(3.7)

-

$ 21,923

22,221

(1.3)

%

(1.3)

-

Europe

4,124

3,629

13.6

4.9

8.7

12,850

11,563

11.1

4.0

7.1

Western Hemisphere excluding U.S.

1,751

1,424

23.0

17.1

5.9

4,730

4,079

16.0

10.1

5.9

Asia-Pacific, Africa

3,262

2,798

16.6

8.1

8.5

9,272

8,080

14.8

6.3

8.5

International

9,137

7,851

16.4

8.3

8.1

26,852

23,722

13.2

5.8

7.4

Worldwide

$ 16,005

14,982

6.8

%

2.6

4.2

$ 48,775

45,943

6.2

%

2.3

3.9

Johnson & Johnson and Subsidiaries

Condensed Consolidated Statement of Earnings

(Unaudited; in Millions Except Per Share Figures)

THIRD QUARTER

2011

2010

Percent

Percent

Percent

Increase

Amount

to Sales

Amount

to Sales

(Decrease)

Sales to customers

$ 16,005

100.0

$ 14,982

100.0

6.8

Cost of products sold

5,072

31.7

4,594

30.7

10.4

Selling, marketing and administrative expenses

5,240

32.7

4,709

31.4

11.3

Research and development expense

1,773

11.1

1,657

11.1

7.0

Interest (income)expense, net

117

0.7

95

0.6

Other (income)expense, net

(308)

(1.9)

(292)

(2.0)

Earnings before provision for taxes on income

4,111

25.7

4,219

28.2

(2.6)

Provision for taxes on income

909

5.7

802

5.4

13.3

Net earnings

$   3,202

20.0

$   3,417

22.8

(6.3)

Net earnings per share  (Diluted)

$     1.15

$     1.23

(6.5)

Average shares outstanding  (Diluted)

2,778.2

2,786.4

Effective tax rate

22.1

%

19.0

%

Adjusted earnings before provision for taxes and net earnings

    Earnings before provision for taxes on income

$   4,427

(1)

27.7

$   4,219

28.2

4.9

    Net earnings

$   3,443

(1)

21.5

$   3,417

22.8

0.8

    Net earnings per share  (Diluted)

$     1.24

(1)

$     1.23

0.8

    Effective tax rate

22.2%

19.0%

(1) The $316 million difference between as reported earnings and as adjusted earnings before provision for taxes on income is the exclusion of a mark-to-market adjustment associated with a currency option and deal costs related to the planned acquisition of Synthes.  Net earnings and net earnings per share (diluted) on these items are $241 million and $0.09 per share, respectively.  

Johnson & Johnson and Subsidiaries

Condensed Consolidated Statement of Earnings

(Unaudited; in Millions Except Per Share Figures)

NINE MONTHS

2011

2010

Percent

Percent

Percent

Increase

Amount

to Sales

Amount

to Sales

(Decrease)

Sales to customers

$ 48,775

100.0

$ 45,943

100.0

6.2

Cost of products sold

15,022

30.8

13,752

29.9

9.2

Selling, marketing and administrative expenses

15,511

31.8

14,244

31.0

8.9

Research and development expense

5,393

11.0

4,862

10.6

10.9

Interest (income)expense, net

332

0.7

234

0.5

Other (income)expense, net

(115)

(0.2)

(1,868)

(4.0)

Restructuring expense

589

1.2

-

-

Earnings before provision for taxes on income

12,043

24.7

14,719

32.0

(18.2)

Provision for taxes on income

2,589

5.3

3,327

7.2

(22.2)

Net earnings

$   9,454

19.4

$ 11,392

24.8

(17.0)

Net earnings per share  (Diluted)

$     3.40

$     4.08

(16.7)

Average shares outstanding  (Diluted)

2,777.6

2,792.0

Effective tax rate

21.5

%

22.6

%

Adjusted earnings before provision for taxes and net earnings

    Earnings before provision for taxes on income

$ 13,696

(1)

28.1

$ 13,379

(2)

29.1

2.4

    Net earnings

$ 10,738

(1)

22.0

$ 10,415

(2)

22.7

3.1

    Net earnings per share  (Diluted)

$     3.87

(1)

$     3.73

(2)

3.8

    Effective tax rate

21.6%

22.2%

(1) The $1,653 million difference between as reported earnings and as adjusted earnings before provision for taxes on income is the exclusion of expense due to restructuring ($676 million, of which $589 million is reported as restructuring expense and $87 million is included in cost of products sold), expense due to litigation matters ($654 million), additional DePuy ASR™ Hip recall costs ($109 million) and a mark-to-market adjustment associated with a currency option and deal costs related to the planned acquisition of Synthes ($214 million).  Net earnings and net earnings per share (diluted) on these items are $1,284 million and $0.47 per share, respectively.  

(2) The difference between as reported earnings and as adjusted earnings before provision for taxes on income, net earnings and net earnings per share (diluted) is the exclusion of income from net litigation of $1,340 million, $977 million and $0.35 per share, respectively.

REPORTED SALES vs. PRIOR PERIOD ($MM)

THIRD QUARTER

NINE MONTHS

% Change

% Change

2011

2010

Reported

Operational (1)

Currency

2011

2010

Reported

Operational (1)

Currency

CONSUMER SEGMENT (2)

BABY CARE

US

105

104

1.0%

1.0%

-

315

306

2.9%

2.9%

-

Intl

508

462

10.0%

4.8%

5.2%

1,457

1,326

9.9%

4.4%

5.5%

WW

613

566

8.3%

4.1%

4.2%

1,772

1,632

8.6%

4.1%

4.5%

ORAL CARE

US

162

164

-1.2%

-1.2%

-

483

486

-0.6%

-0.6%

-

Intl

260

220

18.2%

11.1%

7.1%

729

651

12.0%

4.8%

7.2%

WW

422

384

9.9%

5.8%

4.1%

1,212

1,137

6.6%

2.5%

4.1%

OTC/NUTRITIONALS

US

332

438

-24.2%

-24.2%

-

1,059

1,472

-28.1%

-28.1%

-

Intl

722

671

7.6%

0.3%

7.3%

2,207

1,985

11.2%

3.9%

7.3%

WW

1,054

1,109

-5.0%

-9.4%

4.4%

3,266

3,457

-5.5%

-9.7%

4.2%

SKIN CARE

US

376

311

20.9%

20.9%

-

1,251

1,185

5.6%

5.6%

-

Intl

567

489

16.0%

8.4%

7.6%

1,520

1,378

10.3%

3.7%

6.6%

WW

943

800

17.9%

13.2%

4.7%

2,771

2,563

8.1%

4.5%

3.6%

WOMEN'S HEALTH

US

104

121

-14.0%

-14.0%

-

350

404

-13.4%

-13.4%

-

Intl

354

338

4.7%

-1.6%

6.3%

1,044

990

5.5%

-0.5%

6.0%

WW

458

459

-0.2%

-4.8%

4.6%

1,394

1,394

0.0%

-4.3%

4.3%

WOUND CARE/OTHER

US

140

139

0.7%

0.7%

-

445

447

-0.4%

-0.4%

-

Intl

110

110

0.0%

-8.2%

8.2%

355

350

1.4%

-5.5%

6.9%

WW

250

249

0.4%

-2.8%

3.2%

800

797

0.4%

-2.7%

3.1%

TOTAL CONSUMER

US

1,219

1,277

-4.5%

-4.5%

-

3,903

4,300

-9.2%

-9.2%

-

Intl

2,521

2,290

10.1%

3.3%

6.8%

7,312

6,680

9.5%

2.9%

6.6%

WW

3,740

3,567

4.9%

0.5%

4.4%

11,215

10,980

2.1%

-1.9%

4.0%

See footnotes at end of schedule

REPORTED SALES vs. PRIOR PERIOD ($MM)

THIRD QUARTER

NINE MONTHS

% Change

% Change

2011

2010

Reported

Operational (1)

Currency

2011

2010

Reported

Operational (1)

Currency

PHARMACEUTICAL SEGMENT  (2) (4)

ACIPHEX/PARIET

US

94

116

-19.0%

-19.0%

-

304

356

-14.6%

-14.6%

-

Intl

141

124

13.7%

3.9%

9.8%

417

398

4.8%

-2.8%

7.6%

WW

235

240

-2.1%

-7.2%

5.1%

721

754

-4.4%

-8.4%

4.0%

CONCERTA/METHYLPHENIDATE

US

179

214

-16.4%

-16.4%

-

667

668

-0.1%

-0.1%

-

Intl

104

85

22.4%

13.7%

8.7%

327

283

15.5%

7.5%

8.0%

WW

283

299

-5.4%

-7.9%

2.5%

994

951

4.5%

2.1%

2.4%

DOXIL/CAELYX

US

10

75

-86.7%

-86.7%

-

130

225

-42.2%

-42.2%

-

Intl

76

10

*

*

7.9%

233

28

*

*

7.3%

WW

86

85

1.2%

-6.1%

7.3%

363

253

43.5%

36.8%

6.7%

DURAGESIC/FENTANYL TRANSDERMAL

US

31

42

-26.2%

-26.2%

-

69

117

-41.0%

-41.0%

-

Intl

124

142

-12.7%

-20.1%

7.4%

380

435

-12.6%

-19.5%

6.9%

WW

155

184

-15.8%

-21.5%

5.7%

449

552

-18.7%

-24.2%

5.5%

LEVAQUIN/FLOXIN

US

14

274

-94.9%

-94.9%

-

585

926

-36.8%

-36.8%

-

Intl

11

12

-8.3%

-10.7%

2.4%

33

31

6.5%

2.7%

3.8%

WW

25

286

-91.3%

-91.4%

0.1%

618

957

-35.4%

-35.5%

0.1%

PREZISTA

US

132

102

29.4%

29.4%

-

386

290

33.1%

33.1%

-

Intl

184

128

43.8%

36.2%

7.6%

509

331

53.8%

47.1%

6.7%

WW

316

230

37.4%

31.2%

6.2%

895

621

44.1%

38.7%

5.4%

PROCRIT/EPREX

US

176

204

-13.7%

-13.7%

-

623

800

-22.1%

-22.1%

-

Intl

207

202

2.5%

-5.4%

7.9%

632

655

-3.5%

-9.8%

6.3%

WW

383

406

-5.7%

-9.6%

3.9%

1,255

1,455

-13.7%

-16.5%

2.8%

REMICADE

US

876

857

2.2%

2.2%

-

2,500

2,420

3.3%

3.3%

-

US Exports (3)

343

365

-6.0%

-6.0%

-

1,360

1,106

23.0%

23.0%

-

Intl

189

7

*

*

6.3%

204

19

*

*

6.9%

WW

1,408

1,229

14.6%

13.6%

1.0%

4,064

3,545

14.6%

14.2%

0.4%

RISPERDAL/RISPERIDONE

US

8

(2)

-

-

-

27

(14)

-

-

-

Intl

120

123

-2.4%

-9.7%

7.3%

367

390

-5.9%

-12.9%

7.0%

WW

128

121

5.8%

-1.7%

7.5%

394

376

4.8%

-2.5%

7.3%

RISPERDAL CONSTA

US

111

108

2.8%

2.8%

-

335

340

-1.5%

-1.5%

-

Intl

279

270

3.3%

-4.8%

8.1%

863

772

11.8%

4.1%

7.7%

WW

390

378

3.2%

-2.6%

5.8%

1,198

1,112

7.7%

2.4%

5.3%

TOPAMAX

US

45

46

-2.2%

-2.2%

-

136

162

-16.0%

-16.0%

-

Intl

72

81

-11.1%

-17.4%

6.3%

231

255

-9.4%

-14.9%

5.5%

WW

117

127

-7.9%

-11.9%

4.0%

367

417

-12.0%

-15.4%

3.4%

VELCADE

US

-

-

-

-

-

-

-

-

-

-

Intl

295

246

19.9%

11.5%

8.4%

922

793

16.3%

9.1%

7.2%

WW

295

246

19.9%

11.5%

8.4%

922

793

16.3%

9.1%

7.2%

OTHER

US

850

653

30.2%

30.2%

-

2,377

1,974

20.4%

20.4%

-

Intl

1,311

1,011

29.7%

21.3%

8.4%

3,657

2,926

25.0%

17.4%

7.6%

WW

2,161

1,664

29.9%

24.8%

5.1%

6,034

4,900

23.1%

18.5%

4.6%

TOTAL PHARMACEUTICAL

US

2,869

3,054

-6.1%

-6.1%

-

9,499

9,370

1.4%

1.4%

-

Intl

3,113

2,441

27.5%

18.5%

9.0%

8,775

7,316

19.9%

12.1%

7.8%

WW

5,982

5,495

8.9%

4.9%

4.0%

18,274

16,686

9.5%

6.1%

3.4%

See footnotes at end of schedule

REPORTED SALES vs. PRIOR PERIOD ($MM)

THIRD QUARTER

NINE MONTHS

Total

Total

MAJOR NEW PHARM PRODUCTS (4)

2011

2010

% Change

2011

2010

% Change

(INCLUDED IN OTHER)

INTELENCE

US

42

30

40.0%

118

93

26.9%

Intl

41

37

10.8%

113

85

32.9%

WW

83

67

23.9%

231

178

29.8%

INVEGA

US

74

63

17.5%

219

200

9.5%

Intl

52

35

48.6%

155

108

43.5%

WW

126

98

28.6%

374

308

21.4%

SIMPONI

US

59

51

15.7%

173

137

26.3%

Intl

70

9

*

118

24

*

WW

129

60

*

291

161

80.7%

STELARA

US

112

62

80.6%

317

167

89.8%

Intl

77

38

*

214

106

*

WW

189

100

89.0%

531

273

94.5%

See footnotes at end of schedule

REPORTED SALES vs. PRIOR PERIOD ($MM)

THIRD QUARTER

NINE MONTHS

% Change

% Change

2011

2010

Reported

Operational (1)

Currency

2011

2010

Reported

Operational (1)

Currency

MEDICAL DEVICES AND DIAGNOSTICS   (2)

CARDIOVASCULAR CARE (5)

US

198

246

-19.5%

-19.5%

-

650

762

-14.7%

-14.7%

-

Intl

328

350

-6.3%

-13.5%

7.2%

1,098

1,161

-5.4%

-11.9%

6.5%

WW

526

596

-11.7%

-15.9%

4.2%

1,748

1,923

-9.1%

-13.1%

4.0%

DEPUY

US

737

748

-1.5%

-1.5%

-

2,318

2,338

-0.9%

-0.9%

-

Intl

647

561

15.3%

6.0%

9.3%

2,038

1,800

13.2%

4.7%

8.5%

WW

1,384

1,309

5.7%

1.7%

4.0%

4,356

4,138

5.3%

1.6%

3.7%

DIABETES CARE

US

338

338

0.0%

0.0%

-

982

941

4.4%

4.4%

-

Intl

326

275

18.5%

9.8%

8.7%

1,000

885

13.0%

6.1%

6.9%

WW

664

613

8.3%

4.4%

3.9%

1,982

1,826

8.5%

5.2%

3.3%

ETHICON

US

519

480

8.1%

8.1%

-

1,575

1,499

5.1%

5.1%

-

Intl

668

592

12.8%

5.0%

7.8%

2,062

1,852

11.3%

4.1%

7.2%

WW

1,187

1,072

10.7%

6.4%

4.3%

3,637

3,351

8.5%

4.5%

4.0%

ETHICON ENDO-SURGERY

US

472

484

-2.5%

-2.5%

-

1,433

1,474

-2.8%

-2.8%

-

Intl

759

653

16.2%

7.6%

8.6%

2,314

2,027

14.2%

6.4%

7.8%

WW

1,231

1,137

8.3%

3.4%

4.9%

3,747

3,501

7.0%

2.5%

4.5%

ORTHO-CLINICAL DIAGNOSTICS

US

265

263

0.8%

0.8%

-

811

815

-0.5%

-0.5%

-

Intl

274

235

16.6%

8.7%

7.9%

799

702

13.8%

6.4%

7.4%

WW

539

498

8.2%

4.5%

3.7%

1,610

1,517

6.1%

2.7%

3.4%

VISION CARE

US

251

241

4.1%

4.1%

-

752

722

4.2%

4.2%

-

Intl

501

454

10.4%

1.7%

8.7%

1,454

1,299

11.9%

3.1%

8.8%

WW

752

695

8.2%

2.5%

5.7%

2,206

2,021

9.2%

3.6%

5.6%

TOTAL MEDICAL DEVICES AND DIAGNOSTICS

US

2,780

2,800

-0.7%

-0.7%

-

8,521

8,551

-0.4%

-0.4%

-

Intl

3,503

3,120

12.3%

3.9%

8.4%

10,765

9,726

10.7%

3.0%

7.7%

WW

6,283

5,920

6.1%

1.7%

4.4%

19,286

18,277

5.5%

1.4%

4.1%

* 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 Measures

Third Quarter

% Incr. /

Nine Months YTD

% Incr. /

(Dollars in Millions Except Per Share Data)

2011

2010

(Decr.)

2011

2010

(Decr.)

Earnings before provision for taxes on income - as reported

$ 4,111

4,219

(2.6)

%

$ 12,043

14,719

(18.2)

%

Restructuring - Cordis

-

-

676

-

Net Litigation Settlements Loss (Gain) & DePuy ASR™ Hip recall costs*

-

-

763

(1,340)

Currency option adjustment and deal costs related to planned acquisition of Synthes

316

-

214

-

Earnings before provision for taxes on income - as adjusted

$ 4,427

4,219

4.9

%

$ 13,696

13,379

2.4

%

Net Earnings - as reported

$ 3,202

3,417

(6.3)

%

$   9,454

11,392

(17.0)

%

Restructuring - Cordis

-

-

549

-

Net Litigation Settlements Loss (Gain) & DePuy ASR™ Hip recall costs*

-

-

596

(977)

Currency option adjustment and deal costs related to planned acquisition of Synthes

241

-

139

-

Net Earnings - as adjusted

$ 3,443

3,417

0.8

%

$ 10,738

10,415

3.1

%

Diluted Net earnings per share - as reported

$   1.15

1.23

(6.5)

%

$     3.40

4.08

(16.7)

%

Restructuring - Cordis

-

-

0.20

-

Net Litigation Settlements Loss (Gain) & DePuy ASR™ Hip recall costs*

-

-

0.22

(0.35)

Currency option adjustment and deal costs related to planned acquisition of Synthes

0.09

-

0.05

-

Diluted Net earnings per share - as adjusted

$   1.24

1.23

0.8

%

$     3.87

3.73

3.8

%

*DePuy ASR™ Hip recall costs are in 2011 only.

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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