Johnson and Johnson 2009 Annual Report Download - page 27

Table of Contents
J O H N S O N & J O H N S O N 2 0 0 9 A N N U A L R E P O R T 25
Corporate Governance and Management’s Responsibility
Johnson & Johnson is guided by the values set forth in Our Credo,
created by General Robert Wood Johnson in 1943. These principles
have guided us over the years and continue to set the tone of
integrity for the entire Company. At all levels, the employees of
Johnson & Johnson are committed to the ethical principles embod-
ied in Our Credo and these principles have been woven into the
fabric of the Company.
The values articulated in Our Credo extend to our accounting
and financial responsibilities to Johnson & Johnson shareholders
and investors. We, the management of Johnson & Johnson, are
responsible for the integrity and objectivity of the accompanying
financial statements and related information. We are also responsi-
ble for ensuring that financial data is reported accurately and in a
manner that facilitates the understanding of this data.
As evidence of our commitment to this responsibility, we
maintain a well-designed system of internal accounting controls,
encourage strong and effective corporate governance from our
Board of Directors, continuously review our business results and
strategic choices, and focus on financial stewardship.
Our corporate staff of professionally trained internal auditors,
who travel worldwide, monitor our system of internal accounting
controls designed to provide reasonable assurance that assets are
safeguarded and that transactions and events are recorded properly.
Our internal controls include self-assessments and internal reviews
of our operating companies.
During 2009, the Company continued to invest significant time
and resources in order to ensure compliance with Section 404 of
the Sarbanes-Oxley Act of 2002. Based on the work performed, we
have concluded that our internal control over financial reporting
was effective as of January 3, 2010. We refer you to Management’s
Report on Internal Control over Financial Reporting on page 65.
We require the management teams of our operating compa-
nies to certify their compliance with our Policy on Business Conduct,
which sets forth the Company’s commitment to conduct its busi-
ness affairs with integrity and comply with the governing laws
and regulations. We have a systematic program designed to
ensure compliance with these policies and provide means of
reporting any concerns about violations of the policy. To view
our Policy on Business Conduct, please visit our website at
www.investor.jnj.com/governance/conduct.cfm.
PricewaterhouseCoopers LLP, an independent registered public
accounting firm, is engaged to perform an integrated audit of our
consolidated financial statements and internal control over financial
reporting. The Report of Independent Registered Public Accounting
Firm is on page 64.
The Audit Committee of our Board of Directors is composed
solely of independent directors with the financial knowledge and
experience to provide appropriate oversight. We review internal
control matters and key accounting and financial reporting issues
with the Audit Committee on a regular basis. In addition, the inde-
pendent auditors, the General Counsel and the Vice President of
Internal Audit regularly meet in private sessions with our Audit
Committee to discuss the results of their work including observa-
tions on the adequacy of internal financial controls, the quality
of financial reporting and confirmation that they are properly
discharging their responsibilities and other relevant matters.
Our Executive Committee is continuously involved in the
review of financial results as well as developing and understanding
strategies and key initiatives for long-term growth. Our intent is to
ensure that we maintain objectivity in our business assessments,
constructively challenge the approach to business opportunities and
issues, and monitor our business results and the related controls.
Our consolidated financial statements and financial data that
follow have been prepared in conformity with accounting principles
generally accepted in the United States of America and include
amounts that are based upon our best judgments. We are commit-
ted to present and discuss results of operations in a clear and
transparent manner in order to provide timely, comprehensive and
understandable information to our shareholders.
William C. Weldon Dominic J. Caruso
Chairman, Board of Vice President, Finance,
Directors, and Chief and Chief Financial Officer
Executive Officer
MANAGEMENT’S DISCUSSION AND ANALYSIS
26 Organization and Business Segments
26 Results of Operations
27 Analysis of Sales by Business Segments
29 Analysis of Consolidated Earnings Before Provision for
Taxes on Income
32 Liquidity and Capital Resources
33 Other Information
35 Cautionary Factors That May Affect Future Results
AUDITED CONSOLIDATED FINANCIAL STATEMENTS
36 Consolidated Balance Sheets
37 Consolidated Statements of Earnings
38 Consolidated Statements of Equity
39 Consolidated Statements of Cash Flows
40 Notes to Consolidated Financial Statements
64 Report of Independent Registered Public Accounting Firm
65 Management’s Report on Internal Control over
Financial Reporting
SUPPORTING SCHEDULES
66 Summary of Operations and Statistical Data 1999–2009
67 Shareholder Return Performance Graphs
68 Reconciliation of Non-GAAP Financial Measures