Johnson and Johnson 2008 Annual Report Download - page 7

CHAIRMAN’S LETTER 5
phenidate HCl) Extended-release Tablets in
adult attention deficit hyper-activity disorder
(ADHD) and ™ (doripenem for
injection) in the EU for urinary tract
infections, intra-abdominal infections and
nosocomial pneumonia infection.
Our late-stage pipeline is also promising,
and we are poised for several potential
launches. Rivaroxaban, which we are
co-developing with Bayer HealthCare AG in
the United States, is initially in development
for prevention of deep vein thrombosis and
pulmonary embolism in patients undergoing
hip and knee replacement surgery. We are
also encouraged by paliperidone palmitate, a
long-acting injectable antipsychotic with
monthly dosing.
In addition to concentrating on R&D
productivity, we are carefully navigating the
challenging regulatory and reimbursement
environments and the growing competition
from generics. With this combined focus, we remain confident in
our pharmaceutical pipeline as we introduce new and better solu-
tions for unmet medical needs.
Unprecedented technologies,
aging populations, strong emerging markets and more powerful
consumers are creating a number of new opportunities for our
businesses. We maintain a clear strategy for pursuing future
growth. This is evident in the progress we made during 2008.
For 2009, we have entered an unusually challenging period,
facing a global financial and business slowdown unlike anything
we have seen during our lifetimes.
Every challenging period brings with it a corresponding
opportunity for growth, and this is no exception. By working in a
disciplined way, Johnson & Johnson will emerge stronger than
ever. I believe this for several reasons:
We are fortunate to have an experienced management team in
place with the right skills to capitalize on market conditions and
build businesses for long-term growth.
We are strengthening our core franchises, advancing our pipe-
lines and introducing new products that will replenish and grow
our revenue streams.
We are building our market leadership positions and venturing
into new growth spaces for Johnson & Johnson.
We are maintaining our financial strength and exibility with a
combination of strong cash ows and AAA credit rating, which
gives us access to credit at favorable rates.
We have implemented cost structure improvements that
should reap benefits for the bottom line and help us operate more
eciently.
We are actively participating in the dialogues on public policy
that will shape our business environment for years to come.
Whenever the economy and health care markets return to more
robust growth, we will be stronger and better-positioned for lead-
ership in our markets.
I am confident in the growth of
Johnson & Johnson for many reasons, but perhaps most impor-
tant, I am confident because of our people.
Around the world, our people bring a
passion for caring to work every day.
This is perhaps the greatest reason for our
enduring success. Each day, our people
remind me that caring is an extraordinary
motivator that overcomes the many chal-
lenges of today’s health care environment
and dicult economic times.
As you browse the stories on the fol-
lowing pages, you will see some of what
inspires the people of Johnson & Johnson.
Added to these stories are countless other
works throughout the Company. From
great science … to deep insights about our
patients and consumers … to innovative
market approaches … to a dedication to
corporate citizenship … our people bring a
new definition to caring. They are inspired
by Our Credo, which reminds us of who we
are as a Company and what we believe.
Our operating model—broadly based in human health care,
decentralized in approach, managed for the long term and
focused on people and values—impels us to find the best possible
solutions to today’s most pressing health care needs. This focus
has been passed from generation to generation of employees at
Johnson & Johnson—all of whom share the inspiration of caring
that remains our hallmark.
 During 2008, we achieved solid
progress against our growth strategies. We strengthened our core
franchises, advanced our pipelines and introduced new products
to sustain revenue growth. We invested in new opportunities to
fuel robust future growth. We maintained a strong balance sheet
that allows us to capitalize on emerging opportunities for the
future. We continued to operate under a business model that
delivers sustained results and to be led by inspired people who
take ingenuity and caring to new levels. For all these reasons,
I remain confident that Johnson & Johnson will continue to grow
stronger in the years ahead, delivering superior levels of
performance that benefit patients, consumers, medical profes-
sionals, employees, our communities and our loyal shareholders.
William C. Weldon
Chairman, Board of Directors, and Chief Executive Ocer
March 11, 2009
(1) Excludes in-process research and development and other special items.
See Reconciliation of Non-GAAP Financial Measures, page 72.
(2) Free cash ow is defined as operating cash ow less capital spending.
(3) Adjusted segment operating profit, before (income)/expenses not allocated
to segments, which excludes in-process research and development and other
special items. (See Note 11 to the Consolidated Financial Statements and
Reconciliation of Non-GAAP Financial Measures, page 72.)
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