Johnson and Johnson 2009 Annual Report Download - page 3

CHAIRMAN’S LETTER 1
                
To Our Shareholders
As I reect on the year that just passed,
and the decades since the founding of
Johnson & Johnson in 1886, I can say without
hesitation that the year 2009 was one of the
most challenging in our history. Faced with
significant patent expirations worth nearly
$ billion in sales, the most severe global
economic downturn many of us have ever
experienced and increased competition
across our markets, our people delivered
results that were as impressive as any we
have ever achieved. Fundamental beliefs
embedded in Our Credo guided their
decisions and actions.
We delivered on our financial commit-
ments, continued to pursue long-term growth
opportunities, and emerged stronger and
well-positioned for sustainable growth.
Through all this, the people of
Johnson & Johnson remained inspired and united by a common
purpose: caring for others.More than ever, we know that caring
for the health and well-being of people is not only an outstanding
business but a mission that truly touches lives.
When  began, we set expectations for financial
results anticipating the business and economic challenges,
including a forecast of our first reported sales decline in  years.
Thanks to the diligence of our people and disciplined management
focus,  results were at or above most expectations.
Worldwide sales were $. billion, a decrease of . percent
from .Operational results declined . percent, and the
negative impact of currency was . percent.
Adjusted earnings were $.billion, and
adjusted earnings per share increased
 percent.We also generated free cash ow
of approximately $. billion.Achieving
these results in a year when operational sales
were essentially at reects outstanding
eorts by our leadership teams to manage
their businesses and contain costs.
During , Johnson & Johnson
delivered a total shareholder return of
. percent.This was a strong performance,
although a lower rate of return for one
year than some of our comparative indices.
Over two and three years, we outperformed
the Dow Jones Industrial Average, the
Standard & Poor’s  and other drug and
health care indices.This reects solid perfor-
mance during the recent market downturn,
when we retained more relative value than these indices.Over the
longer term, Johnson & Johnson continued to outperform most
stock indices in total shareholder returns.
While managing short-term challenges,
we took important steps for sustainable growth and an expanded
leadership position in health care.
· We strengthened core businesses and invested in the launches
of a number of recently approved innovative products.R&D
investments from the last several years are coming to fruition
in exciting and meaningful ways, and in  we invested
another $ billion in R&D.

Chairman, Board of Directors, and
Chief Executive Ocer
$61.9
NET SALES
(in billions of dollars)
20092005 2006 2007 2 0 0 92 005 2 006 2 007
$4.40
$3.63
$3.35
$3.73
D I L U T ED EARNI N G S PER SHARE
(in dollars)
2 0 0 92 005 2 006 2 007
$1.620
$53.3
$61.1
$50.5
$63.7
2008 2 0 0 8
$4.57 $1.930
2 0 0 8
$1.795
$1.275
$1.455
DIVIDENDS PA I D PER SHARE
(in dollars)