2009 Results

When 2009 began, we set expectations for financial results anticipating the business and economic challenges, including a forecast of our first reported sales decline in 76 years. Thanks to the diligence of our people and disciplined management focus, 2009 results were at or above most expectations.

Worldwide sales were $61.9 billion, a decrease of 2.9 percent from 2008. Operational results declined 0.3 percent, and the negative impact of currency was 2.6 percent. Adjusted earnings were $12.9 billion⁽¹⁾, and adjusted earnings per share increased 1.8 percent⁽¹⁾. We also generated free cash flow of approximately $14.2 billion⁽²⁾. Achieving these results in a year when operational sales were essentially flat reflects outstanding efforts by our leadership teams to  manage their businesses and contain costs.

During 2009, Johnson & Johnson delivered a total shareholder return of 11.3 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 500 and other drug and health care indices. This reflects solid performance 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.

• ⁽¹⁾ Free cash flow is defined as operating cash flow less capital spending. See Reconciliation of Non-GAAP Financial Measures.
• ⁽²⁾ Excludes purchased in-process research and development and other special items.

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