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<div align="left" style="font-size: 10pt; margin-top: 6pt">NOTE 2 — INVENTORIES
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<!-- Begin Table Head -->
<tr valign="bottom">
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<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
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<td nowrap="nowrap" align="center" colspan="2">October 2,</td>
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<td nowrap="nowrap" align="center" colspan="2">January 2,</td>
<td> </td>
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<td nowrap="nowrap" align="left">(Dollars in Millions)</td>
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<td nowrap="nowrap" align="center" colspan="2">2011</td>
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<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2011</td>
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<td>
<div style="margin-left:15px; text-indent:-15px">Raw materials and supplies
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<td align="right">1,348</td>
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<td> </td>
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<td align="right">1,073</td>
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<td> </td>
<td> </td>
<td align="right">2,845</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total inventories
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">6,428</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,378</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 3 - us-gaap:GoodwillAndIntangibleAssetsDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt">NOTE 3 — INTANGIBLE ASSETS AND GOODWILL
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Intangible assets that have finite useful lives are amortized over their estimated useful lives.
The latest impairment assessment of goodwill and indefinite lived intangible assets was completed
in the fiscal fourth quarter of 2010. Future impairment tests for goodwill and indefinite lived
intangible assets will be performed annually in the fiscal fourth quarter, or sooner if warranted.
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">October 2,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">January 2,</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">(Dollars in Millions)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2011</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Intangible assets with definite lives:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Patents and trademarks — gross
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">7,789</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,660</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Less accumulated amortization
</div></td>
<td> </td>
<td> </td>
<td align="right">2,883</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,629</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Patents and trademarks — net
</div></td>
<td> </td>
<td> </td>
<td align="right">4,906</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,031</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Other intangibles — gross
</div></td>
<td> </td>
<td> </td>
<td align="right">8,787</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7,674</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Less accumulated amortization
</div></td>
<td> </td>
<td> </td>
<td align="right">3,369</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,880</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Other intangibles — net
</div></td>
<td> </td>
<td> </td>
<td align="right">5,418</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,794</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Intangible assets with indefinite lives:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Trademarks
</div></td>
<td> </td>
<td> </td>
<td align="right">5,951</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,954</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Purchased in-process research and development
</div></td>
<td> </td>
<td> </td>
<td align="right">1,950</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,937</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total intangible assets with indefinite lives
</div></td>
<td> </td>
<td> </td>
<td align="right">7,901</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7,891</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total intangible assets — net
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">18,225</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">16,716</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The acquisition of Crucell N.V. during the fiscal first quarter of 2011, increased purchased
in-process research and development by $1.0 billion. During the fiscal second quarter of 2011, the
Company reclassified $971 million from purchased in-process research and development to amortizable
other intangibles to reflect the commercialization of ZYTIGA®.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Goodwill as of October 2, 2011 was allocated by segment of business as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Med Dev</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">(Dollars in Millions)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Consumer</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Pharm</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">& Diag</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Total</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Goodwill, net at January 2, 2011
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">8,144</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,225</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,925</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">15,294</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Acquisitions
</div></td>
<td> </td>
<td> </td>
<td align="right">251</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">538</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">789</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Currency translation/Other
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(60</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">21</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(34 </td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Goodwill, net as of October 2, 2011
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">8,335</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,768</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,946</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">16,049</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The weighted average amortization periods for patents and trademarks and other intangible assets
are 17 years and 27 years, respectively. The amortization expense of amortizable intangible assets
for the fiscal nine months ended October 2, 2011 was $611 million, and the estimated amortization
expense for the five succeeding years approximates $840 million, per year.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 4 - us-gaap:FairValueDisclosuresTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt">NOTE 4 — FAIR VALUE MEASUREMENTS
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company uses forward exchange contracts to manage its exposure to the variability of cash
flows, primarily related to the foreign exchange rate changes of future intercompany product and
third- party purchases of raw materials denominated in foreign currency. The Company also uses
cross currency interest rate swaps to manage currency risk primarily related to borrowings. Both
types of derivatives are designated as cash flow hedges. The Company also uses forward exchange
contracts to manage its exposure to the variability of cash flows for repatriation of foreign
dividends. These contracts are designated as net investment hedges. Additionally, the Company uses
forward exchange contracts to offset its exposure to certain foreign currency assets and
liabilities. These forward exchange contracts are not designated as hedges, and therefore, changes
in the fair values of these derivatives are recognized in earnings, thereby offsetting the current
earnings effect of the related foreign currency assets and liabilities. The Company does not enter
into derivative financial instruments for trading or speculative purposes, or that contain credit risk related contingent features or requirements to post
collateral. On an ongoing basis, the Company monitors counterparty credit ratings. The Company
considers credit non-performance risk to be low, because the Company enters into agreements with
commercial institutions that have at least an A (or equivalent) credit rating. As of
October 2,
2011, the Company had notional amounts outstanding for forward foreign exchange contracts and cross
currency interest rate swaps of $25 billion and $3 billion, respectively.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">All derivative instruments are recorded on the balance sheet at fair value. Changes in the fair
value of derivatives are recorded each period in current earnings or other comprehensive income,
depending on whether the derivative is designated as part of a hedge transaction, and if so, the
type of hedge transaction.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The designation as a cash flow hedge is made at the entrance date of the derivative contract. At
inception, all derivatives are expected to be highly effective. Changes in the fair value of a
derivative that is designated as a cash flow hedge and is highly effective are recorded in
accumulated other comprehensive income until the underlying transaction affects earnings, and are
then reclassified to earnings in the same account as the hedged transaction. Gains/losses on net
investment hedges are accounted for through the currency translation account and are insignificant.
On an ongoing basis, the Company assesses whether each derivative continues to be highly effective
in offsetting changes in the cash flows of hedged items. If and when a derivative is no longer
expected to be highly effective, hedge accounting is discontinued. Hedge ineffectiveness, if any,
is included in current period earnings in other (income)/expense, net, and was not material for the
fiscal quarters ended October 2, 2011 and October 3, 2010. Refer to Note 7 for disclosures of
movements in Accumulated Other Comprehensive Income.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">As of October 2, 2011, the balance of deferred net gains on derivatives included in accumulated
other comprehensive income was $180 million after-tax. For additional information, see Note 7. The
Company expects that substantially all of the amounts related to foreign exchange contracts will be
reclassified into earnings over the next 12 months as a result of transactions that are expected to
occur over that period. The maximum length of time over which the Company is hedging transaction
exposure is 18 months excluding interest rate swaps. The amount ultimately realized in earnings
will differ as foreign exchange rates change. Realized gains and losses are ultimately determined
by actual exchange rates at maturity of the derivative.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following table is a summary of the activity related to derivatives designated as hedges for
the fiscal third quarters in 2011 and 2010:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="28%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Gain/ (Loss)</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Gain/(Loss)</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Gain/ (Loss)</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>recognized in</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>reclassified from</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>recognized in</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Accumulated</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Accumulated OCI</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>other</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000"><b>OCI</b><sup style="font-size: 85%; vertical-align: text-top"><b>(1)</b></sup></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000"><b>into income</b><sup style="font-size: 85%; vertical-align: text-top"><b>(1)</b></sup></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000"><b>income/expense</b><sup style="font-size: 85%; vertical-align: text-top"><b>(2)</b></sup></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000">Fiscal Third Quarters Ended</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">(Dollars in Millions)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2010</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2010</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2010</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Cash Flow Hedges</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign exchange contracts
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(57</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">45</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(12) </td>
<td nowrap="nowrap"> (A)</td>
<td> </td>
<td> </td>
<td align="right">1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">18</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign exchange contracts
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(58</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(7</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(21</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(106) </td>
<td nowrap="nowrap"> (B)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1 </td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">121</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign exchange contracts
</div></td>
<td> </td>
<td> </td>
<td align="right">6</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(46</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(40</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">20 </td>
<td nowrap="nowrap"> (C)</td>
<td> </td>
<td> </td>
<td align="right">1</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(11 </td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Cross currency interest rate swaps
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(67</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(24</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(6</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1) </td>
<td nowrap="nowrap"> (D)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign exchange contracts
</div></td>
<td> </td>
<td> </td>
<td align="right">59</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(63</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(4</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">9 </td>
<td nowrap="nowrap"> (E)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1 </td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(17 </td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(117</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(95</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(67</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(90</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">111</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">All amounts shown in the table above are net of tax.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following table is a summary of the activity related to derivatives designated as hedges for
the fiscal nine months in 2011 and 2010:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="28%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Gain/ (Loss)</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Gain/ (Loss)</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Gain/ (Loss)</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>recognized in</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>reclassified from</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>recognized in</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Accumulated</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Accumulated OCI</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>other</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000"><b>OCI</b><sup style="font-size: 85%; vertical-align: text-top"><b>(1)</b></sup></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000"><b>into income</b><sup style="font-size: 85%; vertical-align: text-top"><b>(1)</b></sup></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000"><b>income/expense</b><sup style="font-size: 85%; vertical-align: text-top"><b>(2)</b></sup></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000">Fiscal Nine Months Ended</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">(Dollars in Millions)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2010</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2010</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2010</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Cash Flow Hedges</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign exchange contracts
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(30</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(39</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(6</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(41) </td>
<td nowrap="nowrap"> (A)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3 </td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign exchange contracts
</div></td>
<td> </td>
<td> </td>
<td align="right">34</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(213</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(127</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(204) </td>
<td nowrap="nowrap"> (B)</td>
<td> </td>
<td> </td>
<td align="right">2</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(33 </td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign exchange contracts
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">27</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(21</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">41 </td>
<td nowrap="nowrap"> (C)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">5</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Cross currency interest rate swaps
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(107</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(73</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(24</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">10 </td>
<td nowrap="nowrap"> (D)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign exchange contracts
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">18</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(7</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">8 </td>
<td nowrap="nowrap"> (E)</td>
<td> </td>
<td> </td>
<td align="right">1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(105</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(280</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(185</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(186</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">1</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(28 </td>
<td nowrap="nowrap">)</td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">All amounts shown in the table above are net of tax.
</div>
<div align="left">
<div style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000"> 
</div>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96%"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(1)</td>
<td> </td>
<td>Effective portion</td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(2)</td>
<td> </td>
<td>Ineffective portion</td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(A)</td>
<td> </td>
<td>Included in Sales to customers</td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(B)</td>
<td> </td>
<td>Included in Cost of products sold</td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(C)</td>
<td> </td>
<td>Included in Research and development expense</td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(D)</td>
<td> </td>
<td>Included in Interest (income)/Interest expense, net</td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(E)</td>
<td> </td>
<td>Included in Other (income)/expense, net</td>
</tr>
</table>
<div align="left" style="font-size: 10pt; margin-top: 6pt">For the fiscal third quarters ended October 2, 2011 and
October 3, 2010, a loss of $10 million and a gain of
$119 million, respectively, were recognized in Other (income)/expense, net, relating to foreign
exchange contracts not designated as hedging instruments .
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">For the fiscal nine months ended October 2, 2011 and October 3, 2010, a
loss of $2 million and a gain of
$50 million, respectively, were recognized in Other (income)/expense, net, relating to foreign
exchange contracts not designated as hedging instruments.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In
addition, during the fiscal second quarter of 2011, the Company entered into an option to hedge the currency
risk associated with the cash portion of the payment for the planned acquisition of Synthes, Inc.
The option was not designated as a hedge, and therefore, changes in the fair value of the option
are recognized as other (income)/expense, net. During the fiscal third quarter and the fiscal nine
months ended October 2, 2011, the mark to market adjustment to
reduce the value of the currency option was $304 million and $202 million, respectively.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Fair value is the exit price that would be received to sell an asset or paid to transfer a
liability. Fair value is a market-based measurement that is determined using assumptions that
market participants would use in pricing an asset or liability. The authoritative literature
establishes a three-level hierarchy to prioritize the inputs used in measuring fair value. The
levels within the hierarchy are described below with Level 1 having the highest priority and Level
3 having the lowest.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The fair value of a derivative financial instrument (i.e., forward exchange contract or currency
swap) is the aggregation by currency of all future cash flows discounted to its present value at
the prevailing market interest rates and subsequently converted to the U.S. dollar at the current
spot foreign exchange rate. The Company does not believe that fair values of these derivative
instruments materially differs from the amounts that could be realized upon settlement or maturity,
or that the changes in fair value will have a material effect on the Company’s results of
operations, cash flows or financial position. The Company also holds equity investments which are
classified as Level 1 because they are traded in an active exchange market. The Company did not
have any other significant financial assets or liabilities which would require revised valuations
under this standard that are recognized at fair value.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following three levels of inputs are used to measure fair value:
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Level 1 — Quoted prices in active markets for identical assets and liabilities.<br />
Level 2 — Significant other observable inputs.<br />
Level 3 — Significant unobservable inputs.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company’s significant financial assets and liabilities measured at fair value as of October 2,
2011 and January 2, 2011 were as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="28%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000"><b>October 2, 2011</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 0px solid #000000"><b>January 2, 2011</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 0px solid #000000">(Dollars in Millions)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Level 1</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Level 2</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Level 3</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Total</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Total</b><sup style="font-size: 85%; vertical-align: text-top"><b>(1)</b></sup></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Derivatives designated as hedging instruments:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Assets:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign exchange contracts
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">604</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">604</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">321</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Cross currency interest rate swaps<sup style="font-size: 85%; vertical-align: text-top">(2)</sup>
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">17</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Total</b>
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">611</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">611</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">338</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Liabilities:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign exchange contracts
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">425</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">425</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">586</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Cross currency interest rate swaps<sup style="font-size: 85%; vertical-align: text-top">(3)</sup>
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">599</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">599</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">502</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Total</b>
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,024</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,024</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,088</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Derivatives not designated as hedging instruments:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Assets:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign exchange contracts
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">20</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">20</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">19</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Swiss Franc Option*
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">265</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">265</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">285</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">285</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">19</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Liabilities:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign exchange contracts
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">14</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">14</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">39</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Other Investments</b><sup style="font-size: 85%; vertical-align: text-top"><b>(4)</b></sup>
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,211</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,211</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,165</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left">
<div style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000"> 
</div>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96%"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">*</td>
<td> </td>
<td>Currency option related to the planned acquisition of Synthes, Inc.</td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(1)</td>
<td> </td>
<td>As of January 2, 2011, these assets and liabilities are classified as Level 2 with the
exception of Other Investments of $1,165 which are classified as Level 1.</td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(2)</td>
<td> </td>
<td>Includes $7 million and $14 million of non-current assets for October 2, 2011 and January 2,
2011, respectively.</td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(3)</td>
<td> </td>
<td>Includes $598 million and $502 million of non-current liabilities for October 2, 2011 and
January 2, 2011, respectively.</td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(4)</td>
<td> </td>
<td>Classified as non-current other assets.</td>
</tr>
</table>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt">Financial Instruments not measured at Fair Value:
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following financial assets and liabilities are held at carrying amount on the consolidated
balance sheet as of October 2, 2011:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 0px solid #000000">Carrying</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 0px solid #000000">Estimated</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">(Dollars in Millions)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Amount</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Fair Value</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Financial Assets</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Current Investments</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Cash
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">2,314</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,314</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Government securities and obligations
</div></td>
<td> </td>
<td> </td>
<td align="right">25,380</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">25,381</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Corporate debt securities
</div></td>
<td> </td>
<td> </td>
<td align="right">612</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">612</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Money market funds
</div></td>
<td> </td>
<td> </td>
<td align="right">1,550</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,550</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Time deposits
</div></td>
<td> </td>
<td> </td>
<td align="right">1,071</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,071</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total cash, cash equivalents and current marketable securities
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">30,927</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">30,928</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Fair value of government securities and obligations and
corporate debt securities was estimated
using quoted broker prices in active markets.
</div></td>
<td> </td>
<td> </td>
<td align="right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Financial Liabilities</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Current Debt</b>
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">5,326</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,326</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Non-Current Debt</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">0.70% Notes due 2013
</div></td>
<td> </td>
<td> </td>
<td align="right">500</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">502</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">3.80% Debentures due 2013
</div></td>
<td> </td>
<td> </td>
<td align="right">500</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">526</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">3 month LIBOR+0% FRN due 2013
</div></td>
<td> </td>
<td> </td>
<td align="right">500</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">500</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">3 month LIBOR+0.09% FRN due 2014
</div></td>
<td> </td>
<td> </td>
<td align="right">750</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">750</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">1.20% Notes due 2014
</div></td>
<td> </td>
<td> </td>
<td align="right">999</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,015</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">2.15% Notes due 2016
</div></td>
<td> </td>
<td> </td>
<td align="right">898</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">933</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">5.55% Debentures due 2017
</div></td>
<td> </td>
<td> </td>
<td align="right">1,000</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,214</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">5.15% Debentures due 2018
</div></td>
<td> </td>
<td> </td>
<td align="right">898</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,081</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">4.75% Notes due 2019 (1B Euro 1.3634)
</div></td>
<td> </td>
<td> </td>
<td align="right">1,356</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,560</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">3% Zero Coupon Convertible Subordinated Debentures due in 2020
</div></td>
<td> </td>
<td> </td>
<td align="right">199</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">232</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">2.95% Debentures due 2020
</div></td>
<td> </td>
<td> </td>
<td align="right">541</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">567</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">3.55% Notes due 2021
</div></td>
<td> </td>
<td> </td>
<td align="right">446</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">496</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">6.73% Debentures due 2023
</div></td>
<td> </td>
<td> </td>
<td align="right">250</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">358</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">5.50% Notes due 2024 (500 GBP1.5672)
</div></td>
<td> </td>
<td> </td>
<td align="right">778</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">927</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">6.95% Notes due 2029
</div></td>
<td> </td>
<td> </td>
<td align="right">294</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">426</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">4.95% Debentures due 2033
</div></td>
<td> </td>
<td> </td>
<td align="right">500</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">582</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">5.95% Notes due 2037
</div></td>
<td> </td>
<td> </td>
<td align="right">995</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,318</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">5.86% Debentures due 2038
</div></td>
<td> </td>
<td> </td>
<td align="right">700</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">925</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">4.50% Debentures due 2040
</div></td>
<td> </td>
<td> </td>
<td align="right">539</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">601</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">4.85% Notes due 2041
</div></td>
<td> </td>
<td> </td>
<td align="right">298</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">351</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Other
</div></td>
<td> </td>
<td> </td>
<td align="right">90</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">90</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total Non-Current Debt
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">13,031</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">14,954</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The weighted average effective rate on non-current debt is 4.02%.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Fair value of the non-current debt was estimated using market prices, which were corroborated by
quoted broker prices in active markets.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 5 - us-gaap:IncomeTaxDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt">NOTE 5 — INCOME TAXES
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The worldwide effective income tax rates for the fiscal nine months of 2011 and 2010 were 21.5% and
22.6%, respectively. The lower effective tax rate was due to higher income in lower tax
jurisdictions and the U.S. Research and Development tax credit, which was not in effect for the
fiscal nine months of 2010. Additionally, in 2010 the Company had litigation gains in high tax
jurisdictions.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 6 - us-gaap:PensionAndOtherPostretirementBenefitsDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt">NOTE 6 — PENSIONS AND OTHER POSTRETIREMENT BENEFITS
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Components of Net Periodic Benefit Cost
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Net periodic benefit cost for the Company’s defined benefit retirement plans and other benefit
plans for the fiscal third quarters of 2011 and 2010 include the following components:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000">Retirement Plans</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 0px solid #000000">Other Benefit Plans</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14" style="border-bottom: 0px solid #000000">Fiscal Third Quarters Ended</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">October 2,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">October 3,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">October 2,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">October 3,</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 0px solid #000000">(Dollars in Millions)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2010</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2010</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Service cost
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">146</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">125</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">38</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">33</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Interest cost
</div></td>
<td> </td>
<td> </td>
<td align="right">214</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">198</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">47</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">52</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Expected return on plan assets
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(279</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(251</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Amortization of prior service cost/(credit)
</div></td>
<td> </td>
<td> </td>
<td align="right">3</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2 </td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Amortization of net transition obligation
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Recognized actuarial losses
</div></td>
<td> </td>
<td> </td>
<td align="right">97</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">59</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">11</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">12</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net periodic benefit cost
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">181</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">132</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">95</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">95</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Net periodic benefit cost for the Company’s defined benefit retirement plans and other benefit
plans for the fiscal nine months of 2011 and 2010 include the following components:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000">Retirement Plans</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 0px solid #000000">Other Benefit Plans</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14" style="border-bottom: 0px solid #000000">Fiscal Nine Months Ended</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">October 2,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">October 3,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">October 2,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">October 3,</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 0px solid #000000">(Dollars in Millions)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2010</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2010</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Service cost
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">433</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">372</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">112</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">100</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Interest cost
</div></td>
<td> </td>
<td> </td>
<td align="right">641</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">592</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">141</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">152</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Expected return on plan assets
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(834</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(751</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1 </td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Amortization of prior service cost/(credit)
</div></td>
<td> </td>
<td> </td>
<td align="right">7</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(4 </td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Amortization of net transition obligation
</div></td>
<td> </td>
<td> </td>
<td align="right">1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Recognized actuarial losses
</div></td>
<td> </td>
<td> </td>
<td align="right">291</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">176</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">34</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">37</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net periodic benefit cost
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">539</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">397</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">284</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">284</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Company Contributions
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">For the fiscal nine months ended October 2, 2011, the Company contributed $129 million and $24
million to its U.S. and international retirement plans, respectively. The Company plans to continue
to fund its U.S. defined benefit plans to comply with the Pension Protection Act of 2006.
International plans are funded in accordance with local regulations.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 7 - us-gaap:ComprehensiveIncomeNoteTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt">NOTE 7 — ACCUMULATED OTHER COMPREHENSIVE INCOME
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Total comprehensive income for the fiscal nine months ended October 2, 2011 was $9.9 billion,
compared with $11.5 billion for the same period a year ago. Total comprehensive income for the
fiscal third quarter ended October 2, 2011 was $1.3 billion, compared with $6.2 billion for the
same period a year ago. Total comprehensive income included net earnings, net unrealized currency
gains and losses on translation, net unrealized gains and losses on securities available for sale,
adjustments related to employee benefit plans, and net gains and losses on derivative instruments
qualifying and designated as cash flow hedges.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following table sets forth the components of accumulated other comprehensive income:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="40%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Total</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Accum</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Other</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Foreign</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Securities</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Employee</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Deriv.</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Comp.</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">Gains/(Losses)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Currency</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Available</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Benefit</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">&</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Income/</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">(Dollars in Millions)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Translation</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">for sale</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Plans</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Hedges</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">(Loss)</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">January 2, 2011
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(969</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">24</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,686</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">100</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,531 </td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">2011 nine months change
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Unrealized gain (loss)
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">327</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(105 </td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Net amount reclassed to net earnings
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(142</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">185 </td>
<td nowrap="nowrap">*</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net nine months change
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">185</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">201</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">80</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">463</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">October 2, 2011
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(972</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">209</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,485</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">180</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,068 </td>
<td nowrap="nowrap">)</td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left">
<div style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000"> 
</div>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96%"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">*</td>
<td> </td>
<td>Substantially offset in net earnings by changes in value of the underlying transactions.</td>
</tr>
</table>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Amounts in accumulated other comprehensive income are presented net of the related tax impact.
Foreign currency translation adjustments are not currently adjusted for income taxes as they relate
to permanent investments in international subsidiaries.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 8 - us-gaap:EarningsPerShareTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt">NOTE 8 — EARNINGS PER SHARE
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following is a reconciliation of basic net earnings per share to diluted net earnings per share
for the fiscal third quarters ended October 2, 2011 and October 3, 2010:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000">Fiscal Third Quarters Ended</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">October 2,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">October 3,</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 0px solid #000000">(Shares in Millions)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2010</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Basic net earnings per share
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1.17</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1.24</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Average shares outstanding — basic
</div></td>
<td> </td>
<td> </td>
<td align="right">2,737.0</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,751.6</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Potential shares exercisable under stock option plans
</div></td>
<td> </td>
<td> </td>
<td align="right">165.0</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">149.6</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Less: shares which could be repurchased under treasury stock method
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(127.4</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(118.4 </td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Convertible debt shares
</div></td>
<td> </td>
<td> </td>
<td align="right">3.6</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3.6</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Average shares outstanding — diluted
</div></td>
<td> </td>
<td> </td>
<td align="right">2,778.2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,786.4</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Diluted earnings per share
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1.15</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1.23</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The diluted earnings per share calculation for both fiscal third quarters ended October 2, 2011 and
October 3, 2010 included the dilutive effect of convertible debt that was offset by the related
reduction in interest expense.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The diluted earnings per share calculation for the fiscal third quarters ended October 2, 2011 and
October 3, 2010, excluded 51 million and 86 million shares, respectively, related to stock options,
as the exercise price of these options was greater than their average market value, which would
result in an anti-dilutive effect on diluted earnings per share.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following is a reconciliation of basic net earnings per share to diluted net earnings per share
for the fiscal nine months ended October 2, 2011 and October 3, 2010:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000">Fiscal Nine Months Ended</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">October 2,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">October 3,</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">(Shares in Millions)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2010</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Basic net earnings per share
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">3.45</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">4.14</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Average shares outstanding — basic
</div></td>
<td> </td>
<td> </td>
<td align="right">2,738.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,754.2</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Potential shares exercisable under stock option plans
</div></td>
<td> </td>
<td> </td>
<td align="right">164.7</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">149.9</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Less: shares which could be repurchased under treasury stock method
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(129.2</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(115.7 </td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Convertible debt shares
</div></td>
<td> </td>
<td> </td>
<td align="right">3.6</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3.6</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Average shares outstanding — diluted
</div></td>
<td> </td>
<td> </td>
<td align="right">2,777.6</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,792.0</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Diluted earnings per share
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">3.40</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">4.08</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The diluted earnings per share calculation for both the fiscal nine months ended October 2, 2011
and October 3, 2010 included the dilutive effect of convertible debt that was offset by the related
reduction in interest expense.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The diluted earnings per share calculation for the fiscal nine months ended October 2, 2011 and
October 3, 2010 excluded 51 million and 85 million shares related to stock options, as the exercise
price of these options was greater than their average market value, which would result in an
anti-dilutive effect on diluted earnings per share.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 9 - us-gaap:SegmentReportingDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt">NOTE 9 — SEGMENTS OF BUSINESS AND GEOGRAPHIC AREAS
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">SALES BY SEGMENT OF BUSINESS
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="64%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 0px solid #000000">Fiscal Third Quarters Ended</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">October 2,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">October 3,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Percent</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">(Dollars in Millions)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2010</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Change</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Consumer
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">United States
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,219</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,277</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(4.5 </td>
<td nowrap="nowrap">)%</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">International
</div></td>
<td> </td>
<td> </td>
<td align="right">2,521</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,290</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">10.1</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td> </td>
<td align="right">3,740</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,567</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4.9</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Pharmaceutical
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">United States
</div></td>
<td> </td>
<td> </td>
<td align="right">2,869</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,054</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(6.1 </td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">International
</div></td>
<td> </td>
<td> </td>
<td align="right">3,113</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,441</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">27.5</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td> </td>
<td align="right">5,982</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,495</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">8.9</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Medical Devices & Diagnostics
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">United States
</div></td>
<td> </td>
<td> </td>
<td align="right">2,780</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,800</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(0.7 </td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">International
</div></td>
<td> </td>
<td> </td>
<td align="right">3,503</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,120</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">12.3</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td> </td>
<td align="right">6,283</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,920</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6.1</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Worldwide
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">United States
</div></td>
<td> </td>
<td> </td>
<td align="right">6,868</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7,131</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3.7 </td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">International
</div></td>
<td> </td>
<td> </td>
<td align="right">9,137</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7,851</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">16.4</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">16,005</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">14,982</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">6.8</td>
<td nowrap="nowrap">%</td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="64%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 0px solid #000000">Fiscal Nine Months Ended</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">October 2,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">October 3,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Percent</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">(Dollars in Millions)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2010</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Change</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Consumer
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">United States
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">3,903</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">4,300</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(9.2 </td>
<td nowrap="nowrap">)%</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">International
</div></td>
<td> </td>
<td> </td>
<td align="right">7,312</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,680</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">9.5</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td> </td>
<td align="right">11,215</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">10,980</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2.1</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Pharmaceutical
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">United States
</div></td>
<td> </td>
<td> </td>
<td align="right">9,499</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">9,370</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1.4</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">International
</div></td>
<td> </td>
<td> </td>
<td align="right">8,775</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7,316</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">19.9</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td> </td>
<td align="right">18,274</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">16,686</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">9.5</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Medical Devices & Diagnostics
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">United States
</div></td>
<td> </td>
<td> </td>
<td align="right">8,521</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">8,551</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(0.4 </td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">International
</div></td>
<td> </td>
<td> </td>
<td align="right">10,765</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">9,726</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">10.7</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td> </td>
<td align="right">19,286</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">18,277</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5.5</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Worldwide
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">United States
</div></td>
<td> </td>
<td> </td>
<td align="right">21,923</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">22,221</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1.3 </td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">International
</div></td>
<td> </td>
<td> </td>
<td align="right">26,852</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">23,722</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">13.2</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">48,775</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">45,943</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">6.2</td>
<td nowrap="nowrap">%</td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">OPERATING PROFIT BY SEGMENT OF BUSINESS
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="64%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 0px solid #000000">Fiscal Third Quarters Ended</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">October 2,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">October 3,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Percent</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">(Dollars in Millions)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2010</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Change</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Consumer
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">644</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">501</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">28.5</td>
<td nowrap="nowrap">%</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Pharmaceutical
</div></td>
<td> </td>
<td> </td>
<td align="right">2,078</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,858</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">11.8</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Medical Devices & Diagnostics
</div></td>
<td> </td>
<td> </td>
<td align="right">1,927</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,002</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3.7 </td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Segments operating profit
</div></td>
<td> </td>
<td> </td>
<td align="right">4,649</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,361</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6.6</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Expense not allocated to segments (3)
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(538</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(142 </td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Worldwide income before taxes
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">4,111</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">4,219</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2.6 </td>
<td nowrap="nowrap">)%</td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="64%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 0px solid #000000">Fiscal Nine Months Ended</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">October 2,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">October 3,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Percent</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">(Dollars in Millions)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2010</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Change</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Consumer
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,766</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,955</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(9.7 </td>
<td nowrap="nowrap">)%</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Pharmaceutical (1)
</div></td>
<td> </td>
<td> </td>
<td align="right">6,001</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,661</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6.0</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Medical Devices & Diagnostics (2)
</div></td>
<td> </td>
<td> </td>
<td align="right">5,146</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7,580</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(32.1 </td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Segments operating profit
</div></td>
<td> </td>
<td> </td>
<td align="right">12,913</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">15,196</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(15.0 </td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Expense not allocated to segments (3)
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(870</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(477</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Worldwide income before taxes
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">12,043</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">14,719</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(18.2 </td>
<td nowrap="nowrap">)%</td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left">
<div style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000"> 
</div>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96%"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(1)</td>
<td> </td>
<td>Includes litigation expense of $540 million and a gain related to the Company’s earlier
investment in Crucell recorded in the fiscal nine months of 2011. The fiscal nine months of
2010 includes net litigation expense of $202 million.</td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(2)</td>
<td> </td>
<td>Includes restructuring expense of $676 million recorded in the fiscal nine months of
2011. Includes litigation expense and additional DePuy ASR™ Hip recall costs of $223
million recorded in the fiscal nine months of 2011. Includes net litigation income of
$1,542 million recorded in the fiscal nine months of 2010.</td>
</tr>
</table>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96%"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(3)</td>
<td> </td>
<td>Amounts not allocated to segments include interest income/(expense), non-controlling
interests and general corporate income/(expense).</td>
</tr>
</table>
<div align="left" style="font-size: 10pt; margin-top: 6pt">SALES BY GEOGRAPHIC AREA
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="64%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 0px solid #000000">Fiscal Third Quarters Ended</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">October 2,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">October 3,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Percent</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">(Dollars in Millions)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2010</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Change</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">United States
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">6,868</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">7,131</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3.7 </td>
<td nowrap="nowrap">)%</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Europe
</div></td>
<td> </td>
<td> </td>
<td align="right">4,124</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,629</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">13.6</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Western Hemisphere, excluding U.S.
</div></td>
<td> </td>
<td> </td>
<td align="right">1,751</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,424</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">23.0</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Asia-Pacific, Africa
</div></td>
<td> </td>
<td> </td>
<td align="right">3,262</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,798</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">16.6</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">16,005</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">14,982</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">6.8</td>
<td nowrap="nowrap">%</td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="64%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 0px solid #000000">Fiscal Nine Months Ended</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">October 2,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">October 3,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Percent</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">(Dollars in Millions)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2010</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Change</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">United States
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">21,923</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">22,221</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1.3</td>
<td nowrap="nowrap">)%</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Europe
</div></td>
<td> </td>
<td> </td>
<td align="right">12,850</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">11,563</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">11.1</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Western Hemisphere, excluding U.S.
</div></td>
<td> </td>
<td> </td>
<td align="right">4,730</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,079</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">16.0</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Asia-Pacific, Africa
</div></td>
<td> </td>
<td> </td>
<td align="right">9,272</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">8,080</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">14.8</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">48,775</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">45,943</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">6.2</td>
<td nowrap="nowrap">%</td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 10 - us-gaap:BusinessCombinationDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt">NOTE 10— BUSINESS COMBINATIONS AND DIVESTITURES
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">During the fiscal third quarter of 2011, the Company completed the acquisition of several
over-the-counter cough and cold brands in Russia from J.B. Chemicals and Pharmaceuticals Ltd.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">During the fiscal third quarter of 2011, the Company acquired full ownership of the Johnson &
Johnson Merck Consumer Pharmaceuticals Co. joint venture in the United States. The joint venture
has been renamed McNeil Consumer Pharmaceuticals Co. and continues to market products under the
PEPCID<sup style="font-size: 85%; vertical-align: text-top">®</sup>, MYLANTA<sup style="font-size: 85%; vertical-align: text-top">®</sup>, and MYLICON<sup style="font-size: 85%; vertical-align: text-top">®</sup> brands. In addition, the Company acquired from Merck Canada Inc.
its partnership interest in the Canadian joint venture. The McNeil Consumer Healthcare Division of
Johnson & Johnson Inc. will continue to market and sell PEPCID<sup style="font-size: 85%; vertical-align: text-top">®</sup>, 222<sup style="font-size: 85%; vertical-align: text-top">®</sup> and FLEET ENEMA<sup style="font-size: 85%; vertical-align: text-top">®</sup> in Canada.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">During the fiscal third quarter of 2011, the Company completed the divestiture of the Animal Health
business to Elanco, a Division of Eli Lilly. During the fiscal third quarter of 2011, the Company
completed the divestiture of MONISTAT<sup style="font-size: 85%; vertical-align: text-top">®</sup> in Canada, the U.S. and its territories (including Puerto
Rico). Proceeds from the aforementioned divestitures were
$578 million. The gains on the divestitures were recognized in
Other (income)/expense, net.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">On
November 4, 2011, the Company announced the closing of the transaction to acquire
SterilMed, Inc., a leader in the reprocessing and remanufacturing of medical devices in the U.S.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">During the fiscal second quarter of 2011, the Company entered into a definitive agreement to
acquire Synthes, Inc. for approximately $21.3 billion, approximately $19.3 billion net of cash
acquired, subject to the terms of the merger agreement and currency values at the time of closing.
Under the terms of the agreement, each share of Synthes common stock, subject to certain
conditions, would be exchanged for approximately 35% in cash and 65% in Johnson & Johnson common
stock. Synthes, Inc. is a premier global developer and manufacturer of orthopaedics devices. The
acquisition is expected to close in the first half of 2012.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">During the fiscal first quarter of 2011, the Company acquired substantially all of the outstanding
equity of Crucell N.V. that it did not already own. Crucell is a global biopharmaceutical company
focused on the research and development, production and marketing of vaccines and antibodies against infectious disease worldwide. The net purchase price
of $2.0 billion was primarily recorded as non-amortizable intangible assets for $1.0 billion,
amortizable intangible assets for $0.7 billion and goodwill for $0.5 billion.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt">During the fiscal third quarter of 2010, the Company acquired Micrus Endovascular Corporation, a
global developer and manufacturer of minimally invasive devices to address hemorrhagic and ischemic
stroke for a net purchase price of approximately $0.4 billion. The purchase price for the
acquisition was primarily recorded as amortizable intangible assets for $0.3 billion.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">During the fiscal third quarter of 2010, the Company completed the divestiture of the Breast Care
business of Ethicon Endo-Surgery, Inc. to Devicor Medical Products, Inc.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">During the fiscal second quarter of 2010, the Company acquired RespiVert Ltd., a privately held
drug discovery company focused on developing small-molecule, inhaled therapies for the treatment of
pulmonary diseases.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">During the fiscal first quarter of 2010, the Company acquired Acclarent, Inc., a medical technology
company dedicated to designing, developing and commercializing devices that address conditions
affecting the ear, nose and throat, for a net purchase price of $0.8 billion. The purchase price
for the acquisition was primarily recorded as amortizable intangible assets for $0.7 billion.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 11 - us-gaap:LegalMattersAndContingenciesTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt">NOTE 11 — LEGAL PROCEEDINGS
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Johnson & Johnson (the Company) and certain of its subsidiaries are involved in various lawsuits
and claims regarding product liability, intellectual property, commercial and other matters;
governmental investigations; and other legal proceedings that arise from time to time in the
ordinary course of their business.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company records accruals for such contingencies when it is probable that a liability will be
incurred and the amount of the loss can be reasonably estimated. Through the period ended October
2, 2011, the Company has determined that the liabilities associated with certain litigation matters
are probable and can be reasonably estimated. The Company has accrued for these matters and will
continue to monitor each related legal issue and adjust accruals for new information and further
developments in accordance with ASC 450-20-25. For these and other litigation and regulatory
matters currently disclosed for which a loss is probable or reasonably possible, the Company is
unable to determine an estimate of the possible loss or range of loss beyond the amounts already
accrued. These matters can be affected by various factors, including whether damages sought in the
proceedings are unsubstantiated or indeterminate; scientific and legal discovery has not commenced
or is not complete; proceedings are in early stages; matters present legal uncertainties; there are
significant facts in dispute; there are numerous parties involved.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In the Company’s opinion, based on its examination of these matters, its experience to date and
discussions with counsel, the ultimate outcome of legal proceedings, net of liabilities accrued in
the Company’s balance sheet, is not expected to have a material adverse effect on the Company’s
financial position. However, the resolution in any reporting period of one or more of these
matters, either alone or in the aggregate, may have a material adverse effect on the Company’s
results of operations, and cash flows for that period.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><u><b>PRODUCT LIABILITY</b></u>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company’s subsidiaries are involved in numerous product liability cases. The damages claimed
are substantial, and while the Company’s subsidiaries are confident of the adequacy of the warnings
and instructions for use that accompany the products at issue, it is not feasible to predict the
ultimate outcome of litigation. The Company has established product liability accruals in
compliance with ASC 450-20 based on currently available information, which in some cases may be
limited. Changes to the accruals may be required in the future as additional information becomes
available.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Multiple products of the Company’s subsidiaries are subject to product liability claims and
lawsuits in which claimants seek substantial compensatory and, where available, punitive damages,
including LEVAQUIN<sup style="font-size: 85%; vertical-align: text-top">®</sup>, the ASR™ XL Acetabular System and DePuy ASR™ Hip Resurfacing System, the
PINNACLE<sup style="font-size: 85%; vertical-align: text-top">®</sup> Acetabular Cup System, RISPERDAL<sup style="font-size: 85%; vertical-align: text-top">®</sup>, pelvic meshes, the CYPHER<sup style="font-size: 85%; vertical-align: text-top">®</sup> Stent and
DURAGESIC<sup style="font-size: 85%; vertical-align: text-top">®</sup>/fentanyl
patches. As of October 2, 2011, there were approximately 3,500 claimants who have pending lawsuits
regarding injuries allegedly due to LEVAQUIN<sup style="font-size: 85%; vertical-align: text-top">®</sup>,
3,500 with respect to the ASR™ XL Acetabular System and DePuy ASR™ Hip Resurfacing System, 560 with respect to the
PINNACLE<sup style="font-size: 85%; vertical-align: text-top">®</sup> Acetabular Cup System, 500 with respect
to RISPERDAL<sup style="font-size: 85%; vertical-align: text-top">®</sup>,
350 with respect to pelvic meshes, 90 with respect to the CYPHER<sup style="font-size: 85%; vertical-align: text-top">®</sup>
Stent, and 80 with respect to DURAGESIC<sup style="font-size: 85%; vertical-align: text-top">®</sup>/fentanyl patches.
</div>
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<div align="left" style="font-size: 10pt; margin-top: 6pt">In August 2010, DePuy Orthopaedics, Inc. (DePuy) announced a worldwide voluntary recall of its ASR™
XL Acetabular System and DePuy ASR™ Hip Resurfacing System used in hip replacement surgery. Claims
for personal injury have been made against DePuy and the Company, and
the number of pending lawsuits continues to increase. The Company continues to receive
information with respect to potential costs associated with this recall. The Company has
established a product liability accrual in anticipation of product liability litigation settlements
and costs associated with the DePuy ASR™ Hip recall program. Changes to the accrual may be required
in the future as additional information becomes available.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company believes that the ultimate resolution of these matters based on historical and
reasonably likely future trends is not expected to have a material adverse effect on the Company’s
financial position, annual results of operations and cash flows. The resolution in any interim
reporting period could have a material impact on the Company’s results of operations and cash flows
for that period.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><u><b>INTELLECTUAL PROPERTY</b></u>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Certain of the Company’s subsidiaries are subject, from time to time, to legal proceedings and
claims related to patent, trademark and other intellectual property matters arising out of their
business. The most significant of these matters are described below.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><u>PATENT INFRINGEMENT</u>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Certain of the Company’s subsidiaries are involved in lawsuits challenging the coverage and/or
validity of the patents on their products. Although the Company’s subsidiaries believe that they
have substantial defenses to these challenges with respect to all material patents, there can be no
assurance as to the outcome of these matters, and a loss in any of these cases could potentially
adversely affect the ability of the Company’s subsidiaries to sell their products, or require the
payment of past damages and future royalties.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Medical Devices & Diagnostics
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In October 2004, Tyco Healthcare Group, LP, (Tyco) and U.S. Surgical Corporation filed a lawsuit
against Ethicon Endo-Surgery, Inc. (EES) in the United States District Court for the District of
Connecticut alleging that several features of EES’s HARMONIC<sup style="font-size: 85%; vertical-align: text-top">®</sup> scalpel infringed four
Tyco patents. In October 2007, on motions for summary judgment prior to the initial trial, a number
of claims were found invalid and a number were found infringed. However, no claim was found both
valid and infringed. Trial commenced in December 2007, and the court dismissed the case without
prejudice on grounds that Tyco did not own the patents in suit. The dismissal without prejudice was
affirmed on appeal. In January 2010, Tyco filed another complaint in the United States District
Court for the District of Connecticut asserting infringement of three of the four patents from the
previous lawsuit and adding new products. Tyco is seeking monetary damages and injunctive relief.
This case is scheduled to be tried in November 2011.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Starting in March 2006, Cordis Corporation (Cordis) filed patent infringement lawsuits in the
United States District Courts for the Districts of New Jersey and Delaware, against Guidant
Corporation (Guidant), Abbott Laboratories, Inc. (Abbott), Boston Scientific Corporation (Boston
Scientific) and Medtronic Ave, Inc. (Medtronic) alleging that the Xience V™ (Abbott), Promus™
(Boston Scientific) and Endeavor<sup style="font-size: 85%; vertical-align: text-top">®</sup> (Medtronic) drug eluting stents infringe several of Cordis’s
Wright/Falotico patents. Cordis is seeking monetary relief. In January 2010, in one of the cases
against Boston Scientific, the United States District Court for the District of Delaware found the
Wright/Falotico patents invalid for lack of written description and/or lack of enablement. In June
2011, the Court of Appeals for the Federal Circuit affirmed the ruling, and in September 2011, it
denied Cordis’s motion for a re-hearing.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In October 2007, Bruce Saffran (Saffran) filed a patent infringement lawsuit against the Company
and Cordis in the United States District Court for the Eastern District of Texas alleging
infringement on U.S. Patent No. 5,653,760. In January 2011, a jury returned a verdict finding that
Cordis’s sales of its CYPHER<sup style="font-size: 85%; vertical-align: text-top">®</sup> stent willfully infringed a patent issued to Saffran. The jury
awarded Saffran $482 million. In March 2011, the Court entered judgment against Cordis in the
amount of $593 million, representing the jury verdict, plus $111 million in pre-judgment interest.
The District Court has denied Cordis’s motion to
overturn the jury verdict and to vacate the judgment. Cordis will appeal the judgment. Because the
Company believes that the potential for an unfavorable outcome is not probable, it has not
established a reserve with respect to the case.
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<div align="left" style="font-size: 10pt; margin-top: 6pt">In November 2007, Roche Diagnostics Operations, Inc., et al. (Roche) filed a patent infringement
lawsuit against LifeScan, Inc. (LifeScan) in the United States District Court for the District of
Delaware, accusing LifeScan’s entire OneTouch<sup style="font-size: 85%; vertical-align: text-top">®</sup> line of blood glucose monitoring systems of
infringement of two patents related to the use of microelectrode sensors. In September 2009,
LifeScan obtained a favorable ruling on claim construction that precluded a finding of
infringement. The Court entered judgment against Roche in July 2010 and Roche appealed. Briefing
on appeal issues has been completed. Oral argument will be held in November 2011. Roche is
seeking monetary damages and injunctive relief.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Starting in February 2008, Cordis filed patent infringement lawsuits in the United States District
Court for the District of New Jersey against Guidant, Abbott, Boston Scientific and Medtronic
alleging that the Xience V™ (Abbott), Promus™ (Boston Scientific) and Endeavor<sup style="font-size: 85%; vertical-align: text-top">®</sup> (Medtronic) drug
eluting stents infringe several of Wyeth’s (now Pfizer Inc.) Morris patents, which have been
licensed to Cordis. Cordis is seeking monetary relief. In September 2011, the Court ruled that it
would grant defendants’ motion to invalidate the Morris patents for lack of enablement and failure
to adequately describe the full scope of the invention.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In June 2009, Rembrandt Vision Technologies, L.P. (Rembrandt) filed a patent infringement lawsuit
against Johnson & Johnson Vision Care, Inc. (JJVC) in the United States District Court for the
Eastern District of Texas alleging that JJVC’s manufacture and sale of its ACUVUE ADVANCE<sup style="font-size: 85%; vertical-align: text-top">®</sup> and
ACUVUE<sup style="font-size: 85%; vertical-align: text-top">®</sup> OASYS™ HYDROGEL contact lenses infringe their U.S. Patent No. 5,712,327 (the Chang patent).
Rembrandt is seeking monetary relief. The case is scheduled for trial in April 2012.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Pharmaceutical
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In April 2007, Centocor, Inc. (Centocor) (now Janssen Biotech, Inc. (JBI)) filed a patent
infringement lawsuit against Abbott Laboratories, Inc. (Abbott) in the United States District Court
for the Eastern District of Texas alleging that Abbott’s HUMIRA<sup style="font-size: 85%; vertical-align: text-top">®</sup> anti-TNF alpha product infringes
Centocor’s U.S. Patent 7,070,775. In June 2009, a jury returned a verdict finding the patent valid
and infringed, and awarded JBI damages of approximately $1.7 billion. In February 2011, the Court
of Appeals reversed the June 2009 decision and the judgment of the District Court. JBI will file a
petition for review of the decision in the United States Supreme Court.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In May 2009, Abbott Biotechnology Ltd. (Abbott) filed a patent infringement lawsuit against
Centocor (now JBI) in the United States District Court for the District of Massachusetts alleging
that SIMPONI<sup style="font-size: 85%; vertical-align: text-top">®</sup> infringes Abbott’s U.S. Patent Nos. 7,223,394 and 7,451,031 (the Salfeld patents).
Abbott is seeking monetary damages and injunctive relief. No trial date has been set.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In August 2009, Abbott GmbH & Co. (Abbott GmbH) and Abbott Bioresearch Center filed a patent
infringement lawsuit against Centocor (now JBI) in the United States District Court for the
District of Massachusetts alleging that STELARA<sup style="font-size: 85%; vertical-align: text-top">®</sup> infringes two United States patents assigned to
Abbott GmbH. JBI filed a complaint in the United States District Court for the District of Columbia
for a declaratory judgment of non-infringement and invalidity of the Abbott GmbH patents, as well
as a Complaint for Review of a Patent Interference Decision that granted priority of invention on
one of the two asserted patents to Abbott GmbH. The cases have been transferred from the District
of Columbia to the District of Massachusetts. No trial date has been set. Also in August 2009,
Abbott GmbH and Abbott Laboratories Limited brought a patent infringement lawsuit in The Federal
Court of Canada alleging that STELARA<sup style="font-size: 85%; vertical-align: text-top">®</sup> infringes Abbott GmbH’s Canadian patent. The Canadian case
is scheduled to be tried in October 2012. In each of these cases, Abbott is seeking monetary
damages and injunctive relief.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In August 2009, Bayer HealthCare LLC (Bayer) filed a patent infringement lawsuit against Centocor
Ortho Biotech Inc. (now JBI) in United States District Court for the District of Massachusetts
alleging that the manufacture and sale by JBI of SIMPONI<sup style="font-size: 85%; vertical-align: text-top">®</sup> infringes a Bayer patent relating to
human anti-TNF antibodies. In January 2011, the court issued judgment dismissing Bayer’s
infringement claims. Bayer appealed this ruling. In addition, in November 2009, Bayer filed a
lawsuit under its European counterpart to these patents in Germany and the Netherlands. The court
in the Netherlands held the Dutch patent invalid and entered judgment in favor of JBI’s European
affiliate, Janssen Biologics B.V. Bayer appealed that judgment in the Netherlands. In addition,
in March 2010, Janssen-Cilag NV filed a revocation action in the High Court in London seeking to
invalidate Bayer’s UK patent relating to human anti-TNF antibodies. In May 2011, JBI settled all
of these cases and received a paid-up, royalty-free license to the family of patents in suit.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><u>LITIGATION AGAINST FILERS OF ABBREVIATED NEW DRUG APPLICATIONS (ANDAs)</u>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following summarizes lawsuits pending against generic companies that filed Abbreviated New Drug
Applications (ANDAs) seeking to market generic forms of products sold by various subsidiaries of
the Company prior to expiration of the applicable patents covering those products. These ANDAs
typically include allegations of non-infringement, invalidity and unenforceability of these
patents. In the event the Company’s subsidiaries are not successful in these actions, or the
statutory 30-month stays expire before the United States District Court rulings are obtained, the
third-party companies involved will have the
ability, upon approval of the United States Food and
Drug Administration (FDA), to introduce generic versions of the products at issue resulting in very
substantial market share and revenue losses for those products.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">CONCERTA<sup style="font-size: 85%; vertical-align: text-top">®</sup>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In January 2010, ALZA Corporation (ALZA) and Ortho-McNeil-Janssen Pharmaceuticals, Inc. (OMJPI)
(now Janssen Pharmaceuticals, Inc. (JPI)) filed a patent infringement lawsuit in the United States
District Court for the District of Delaware against Kremers-Urban, LLC and KUDCO Ireland, Ltd.
(collectively, KUDCO) in response to KUDCO’s ANDA seeking approval to market a generic version of
CONCERTA<sup style="font-size: 85%; vertical-align: text-top">®</sup> before the expiration of two of ALZA and JPI’s patents relating to CONCERTA<sup style="font-size: 85%; vertical-align: text-top">®</sup>. KUDCO filed
counterclaims alleging non-infringement and invalidity. ALZA and JPI subsequently removed one of
the patents from the lawsuit. In September 2011, the parties entered into a settlement agreement
pursuant to which KUDCO was granted a license to market its generic version of CONCERTA<sup style="font-size: 85%; vertical-align: text-top">®</sup> starting
on July 1, 2012, assuming KUDCO obtains FDA approval.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In November 2010, ALZA and OMJPI (now JPI) filed a patent infringement lawsuit in the United States
District Court for the District of Delaware against Impax Laboratories, Inc. (Impax), Teva
Pharmaceuticals USA, Inc., and Teva Pharmaceutical Industries Ltd. (collectively, Teva) in response
to Impax and Teva’s filing of a major amendment to its ANDA seeking approval to market a generic
version of CONCERTA<sup style="font-size: 85%; vertical-align: text-top">®</sup> before the expiration of ALZA and JPI’s patent relating to CONCERTA<sup style="font-size: 85%; vertical-align: text-top">®</sup>. Impax
and Teva filed counterclaims alleging non-infringement and invalidity. In May 2011, ALZA and JPI
filed a second lawsuit against Teva in response to Teva’s filing of a second major amendment to its
ANDA seeking approval to market additional dosage strengths of its generic CONCERTA<sup style="font-size: 85%; vertical-align: text-top">®</sup> product before
the expiration of ALZA and JPI’s patent relating to CONCERTA<sup style="font-size: 85%; vertical-align: text-top">®</sup>. In each of the above cases, ALZA and
JPI are seeking an Order enjoining the defendants from marketing its generic version of CONCERTA<sup style="font-size: 85%; vertical-align: text-top">®</sup>
prior to the expiration of ALZA and JPI’s CONCERTA<sup style="font-size: 85%; vertical-align: text-top">®</sup> patent.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">ORTHO TRI-CYLEN<sup style="font-size: 85%; vertical-align: text-top">®</sup> LO
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In October 2008, OMJPI (now JPI) and Johnson & Johnson Pharmaceutical Research & Development,
L.L.C. (JJPRD) filed a patent infringement lawsuit against Watson Laboratories, Inc. and Watson
Pharmaceuticals, Inc. (collectively, Watson) in the United States District Court for the District
of New Jersey in response to Watson’s ANDA seeking approval to market a generic version of JPI’s
product prior to the expiration of JPI’s patent relating to ORTHO TRI-CYCLEN<sup style="font-size: 85%; vertical-align: text-top">®</sup> LO (the OTCLO
patent). Watson filed a counterclaim alleging invalidity of the patent. In addition, in January
2010, JPI filed a patent infringement lawsuit against Lupin Ltd. and Lupin Pharmaceuticals, Inc.
(collectively, Lupin) in the United States District Court for the District of New Jersey in
response to Lupin’s ANDA seeking approval to market a generic version of ORTHO TRI-CYCLEN<sup style="font-size: 85%; vertical-align: text-top">®</sup> LO prior
to the expiration of the OTCLO patent. Lupin filed a counterclaim alleging invalidity of the
patent. The Lupin and Watson cases have been consolidated.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In November 2010, OMJPI (now JPI) filed a patent infringement lawsuit against Mylan Inc. and Mylan
Pharmaceuticals, Inc. (collectively, Mylan), and Famy Care, Ltd. (Famy Care) in the United States
District Court for the District of New Jersey in response to Famy Care’s ANDA seeking approval to
market a generic version of ORTHO TRI-CYCLEN<sup style="font-size: 85%; vertical-align: text-top">®</sup> LO prior to the expiration of the OTCLO patent.
Mylan and Famy Care filed counterclaims alleging invalidity of the patent.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In October 2011, JPI filed a patent infringement lawsuit against Sun Pharma Global FZE and Sun
Pharmaceutical Industries (collectively, Sun) in the United States District Court for the District
of New Jersey in response to Sun’s ANDA seeking approval to market a generic version of ORTHO
TRI-CYCLEN<sup style="font-size: 85%; vertical-align: text-top">®</sup> LO prior to the expiration of the OTCLO patent.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In each of the above cases, JJPRD and/or JPI are seeking an Order enjoining the defendants from
marketing their generic versions of ORTHO TRI-CYLCEN<sup style="font-size: 85%; vertical-align: text-top">®</sup> LO before the expiration of the OTCLO patent.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">PREZISTA<sup style="font-size: 85%; vertical-align: text-top">®</sup>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In November 2010, Tibotec, Inc. and Tibotec Pharmaceuticals, Inc. (collectively, Tibotec) filed a
patent infringement lawsuit against Lupin, Ltd., Lupin Pharmaceuticals, Inc. (collectively, Lupin),
Mylan, Inc. and Mylan Pharmaceuticals, Inc. (collectively, Mylan) in the United States District
Court for the District of New Jersey in response to Lupin’s and Mylan’s respective ANDAs seeking
approval to market generic versions of Tibotec’s PREZISTA<sup style="font-size: 85%; vertical-align: text-top">®</sup> product before the expiration of
Tibotec’s patent relating to PREZISTA<sup style="font-size: 85%; vertical-align: text-top">®</sup>. Lupin and Mylan each filed counterclaims alleging
non-infringement and invalidity. In July 2011, Tibotec filed another patent infringement lawsuit
against Lupin in the United States District Court for the District
of New Jersey in response to
Lupin’s supplement to its ANDA to add new dosage strengths for its proposed product. In August
2011, Tibotec and G.D. Searle & Company (G.D. Searle) filed a patent infringement lawsuit against
Lupin and Mylan in response to their notice letters advising that their ANDAs are seeking approval
to market generic versions of Tibotec’s PREZISTA<sup style="font-size: 85%; vertical-align: text-top">®</sup> product before the expiration of two patents
relating to PREZISTA<sup style="font-size: 85%; vertical-align: text-top">®</sup> that Tibotec exclusively licenses from G.D. Searle.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In March 2011, Tibotec and G.D. Searle filed a patent infringement lawsuit against Teva
Pharmaceuticals USA, Inc. and Teva Pharmaceuticals, Ltd. (collectively, Teva) in the United States
District Court for the District of New Jersey in response to Teva’s ANDA seeking approval to market
a generic version of PREZISTA<sup style="font-size: 85%; vertical-align: text-top">®</sup> before the expiration of certain patents relating to PREZISTA<sup style="font-size: 85%; vertical-align: text-top">®</sup> that
Tibotec either owns or exclusively licenses from G.D. Searle.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In March 2011, Tibotec filed a patent infringement lawsuit against Hetero Drugs, Ltd. Unit III and
Hetero USA Inc. (collectively, Hetero) in the United States District Court for the District of New
Jersey in response to Hetero’s ANDA seeking approval to market a generic version of PREZISTA<sup style="font-size: 85%; vertical-align: text-top">®</sup>
before the expiration of certain patents relating to PREZISTA<sup style="font-size: 85%; vertical-align: text-top">®</sup> that Tibotec exclusively licenses
from G.D. Searle. In July 2011, upon agreement by the parties, the Court entered a stay of the
lawsuit pending a final decision in the lawsuit against Teva with respect to the validity and/or
enforceability of the patents that Tibotec licenses from G.D. Searle, with Hetero agreeing to be
bound by such final decision.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In September 2011, the Court consolidated the above lawsuits, as well as lawsuits brought by the
United States Government against each of the defendants for infringement of a United States
Government-owned patent relating to PREZISTA<sup style="font-size: 85%; vertical-align: text-top">®</sup>, for purposes of pre-trial discovery and trial, with
the proviso that after discovery is completed, any party can move to have the cases de-consolidated
for trial.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In each of the above lawsuits, Tibotec is seeking an Order enjoining the defendants from marketing
their generic versions of PREZISTA<sup style="font-size: 85%; vertical-align: text-top">®</sup> before the expiration of the relevant patents.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><u>OTHER INTELLECTUAL PROPERTY MATTERS</u>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In September 2009, Centocor Ortho Biotech Products, L.P. (now Janssen Products, LP (JPLP))
intervened in an inventorship lawsuit filed by the University of Kansas Center for Research, Inc.
(KUCR) against the United States of America (USA) in the United States District Court for the
District of Kansas. KUCR alleges that two KUCR scientists should be added as inventors on two
USA-owned patents relating to VELCADE<sup style="font-size: 85%; vertical-align: text-top">®</sup>. The USA licensed the patents (and their foreign
counterparts) to Millennium Pharmaceuticals, Inc. (MPI), who in turn sublicensed the patents (and
their foreign counterparts) to JPLP for commercial marketing outside the United States. In July
2010, the parties reached a settlement agreement to resolve the disputes in this case and will
submit the inventorship issue to arbitration. The case has been stayed pending the arbitration. As
a result of the settlement agreement, the outcome of the arbitration regarding inventorship will
determine whether pre-specified payments will be made to KUCR, but will not affect JPLP’s right to
market VELCADE<sup style="font-size: 85%; vertical-align: text-top">®</sup>. The arbitration is scheduled to begin in November 2011.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In December 2009, the State of Israel filed a lawsuit in the District Court in Tel Aviv Jaffa
against various affiliates of Omrix Biopharmaceuticals, Inc. (Omrix). In the lawsuit, the State
claims that an employee of a government-owned hospital was the inventor on several patents related
to fibrin glue technology that the employee developed while he was a government employee. The State
claims that he had no right to transfer any intellectual property to Omrix because it belongs to
the State. The State is seeking damages plus royalties on QUIXIL™ and EVICEL™ or, alternatively,
transfer of the patents to the State.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In January 2011, Genentech, Inc. (Genentech) initiated an arbitration against UCB Celltech
(Celltech) seeking damages for allegedly cooperating with Centocor (now JBI) to improperly
terminate a prior agreement in which JBI was sublicensed under Genentech’s Cabilly patents. JBI
has an indemnity agreement with Celltech, and Celltech has asserted that JBI is liable for any
damages Celltech may be required to pay Genentech in that arbitration. Trial is scheduled for June
2012.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><u><b>GOVERNMENT PROCEEDINGS</b></u>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Like other companies in the pharmaceutical and medical devices and diagnostics industries, the
Company and certain of its subsidiaries are subject to extensive regulation by national, state and
local government agencies in the United States and other countries in which they operate. As a
result, interaction with government agencies is ongoing. The most significant litigation brought
by, and investigations conducted by, government agencies are listed below. It is possible that
criminal charges and substantial fines and/or civil penalties or damages could result from
government investigations or litigation.
</div>
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<div align="left" style="font-size: 10pt; margin-top: 6pt"><u>AVERAGE WHOLESALE PRICE (AWP) LITIGATION</u>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company and several of its pharmaceutical subsidiaries (the J&J AWP defendants), along with
numerous other pharmaceutical companies, are defendants in a series of lawsuits in state and
federal courts involving allegations that the pricing and marketing of certain pharmaceutical
products amounted to fraudulent and otherwise actionable conduct because, among other things, the
companies allegedly reported an inflated Average Wholesale Price (AWP) for the drugs at issue.
Payors alleged that they used those AWPs in calculating provider reimbursement levels. Many of
these cases, both federal actions and state actions removed to federal court, were consolidated for
pre-trial purposes in a Multi-District Litigation (MDL) in the United States District Court for the
District of Massachusetts.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The plaintiffs in these cases included three classes of private persons or entities that paid for
any portion of the purchase of the drugs at issue based on AWP, and state government entities that
made Medicaid payments for the drugs at issue based on AWP. In June 2007, after a trial on the
merits, the MDL Court dismissed the claims of two of the plaintiff classes against the J&J AWP
defendants. In March 2011, the Court dismissed the claims of the third class against the J&J AWP
defendants without prejudice.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">AWP cases brought by various Attorneys General have proceeded to trial against other manufacturers.
Several state cases against certain of the Company’s subsidiaries have been settled and two are
set for trial: Kentucky in January 2012 and Kansas in March 2013. Other state cases are likely to
be set for trial. In addition, an AWP case against the J&J AWP defendants brought by the
Commonwealth of Pennsylvania was tried in Commonwealth Court in October and November 2010. The
Court found in the Commonwealth’s favor with regard to certain of its claims under the Pennsylvania
Unfair Trade Practices and Consumer Protection Law (“UTPL”), entered an injunction, and awarded $45
million in restitution and $6.5 million in civil penalties. The Court found in the J&J AWP
defendants’ favor on the Commonwealth’s claims of unjust enrichment, misrepresentation/fraud, civil
conspiracy, and on certain of the Commonwealth’s claims under the UTPL. The J&J AWP defendants have
appealed the Commonwealth Court’s UTPL ruling to the Pennsylvania Supreme Court. The Company
believes that it has strong arguments supporting its appeal. Because the Company believes that the
potential for an unfavorable outcome is not probable, it has not established a reserve with respect
to the verdict.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><u>RISPERDAL<sup style="font-size: 85%; vertical-align: text-top">®</sup></u>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In January 2004, Janssen Pharmaceutica Inc. (Janssen) (now Janssen Pharmaceuticals, Inc. (JPI))
received a subpoena from the Office of the Inspector General of the United States Office of
Personnel Management seeking documents concerning sales and marketing of, any and all payments to
physicians in connection with sales and marketing of, and clinical trials for, RISPERDAL<sup style="font-size: 85%; vertical-align: text-top">®</sup> from 1997
to 2002. Documents subsequent to 2002 have also been requested by the Department of Justice. An
additional subpoena seeking information about marketing of, and adverse reactions to, RISPERDAL<sup style="font-size: 85%; vertical-align: text-top">®</sup>
was received from the United States Attorney’s Office for the Eastern District of Pennsylvania in
November 2005. Numerous subpoenas seeking testimony from various witnesses before a grand jury were
also received. JPI cooperated in responding to these requests for documents and witnesses. The
United States Department of Justice and the United States Attorney’s Office for the Eastern
District of Pennsylvania (the Government) are continuing to actively pursue both criminal and civil
actions. In February 2010, the Government served Civil Investigative Demands seeking additional
information relating to sales and marketing of RISPERDAL<sup style="font-size: 85%; vertical-align: text-top">®</sup> and sales and marketing of INVEGA<sup style="font-size: 85%; vertical-align: text-top">®</sup>. The
focus of these matters is the alleged promotion of RISPERDAL<sup style="font-size: 85%; vertical-align: text-top">®</sup> and INVEGA<sup style="font-size: 85%; vertical-align: text-top">®</sup> for off-label uses. The
Government has notified JPI that there are also pending qui tam actions alleging off-label
promotion of RISPERDAL<sup style="font-size: 85%; vertical-align: text-top">®</sup>. The Government informed JPI that it will intervene in these qui tam
actions and file a superseding complaint.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Discussions have been ongoing in an effort to resolve criminal penalties under the Food Drug and
Cosmetic Act related to the promotion of RISPERDAL<sup style="font-size: 85%; vertical-align: text-top">®</sup>. An agreement in principal on key issues
relevant to a disposition of criminal charges pursuant to a single misdemeanor violation of the
Food Drug and Cosmetic Act has been reached, but certain issues remain open before a settlement can
be finalized. The Company adjusted the accrued amount in the second quarter of 2011 to cover the
financial component of the proposed criminal settlement.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In addition, discussions with state and federal government representatives to resolve the separate
civil claims related to the marketing of RISPERDAL<sup style="font-size: 85%; vertical-align: text-top">®</sup> and INVEGA<sup style="font-size: 85%; vertical-align: text-top">®</sup>, including those under the False
Claims Act (the qui tam actions), have been ongoing. The Company believes there are meritorious
defenses to these claims, and it remains unclear whether a settlement can be reached as discovery
is not complete, there are significant facts in dispute, the damages sought in the claims are
unsubstantiated and indeterminate, there are numerous parties involved, and possible outcomes are
uncertain. For these reasons,
the Company is unable to estimate a range of loss. However, future negotiations may lead to a
narrowing of the areas of disagreement and the liability may then become reasonably estimable in
accordance with applicable accounting principles. If a negotiated resolution cannot be reached,
civil litigation relating to the allegations of off-label promotion of RISPERDAL<sup style="font-size: 85%; vertical-align: text-top">®</sup> and/or INVEGA<sup style="font-size: 85%; vertical-align: text-top">®</sup> is
likely. In the Company’s opinion, the ultimate resolution of the above criminal and these civil
matters is not expected to have a material adverse effect on the Company’s financial position,
although the resolution in any reporting period could have a material impact on the Company’s
results of operations and cash flows for that period.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Attorneys General of multiple states, including Alaska, Arkansas, Louisiana, Massachusetts,
Mississippi, Montana, New Mexico, Pennsylvania, South Carolina, Texas and Utah, have pending
actions against Janssen (now JPI) seeking one or more of the following remedies: reimbursement of
Medicaid or other public funds for RISPERDAL<sup style="font-size: 85%; vertical-align: text-top">®</sup> prescriptions written for off-label use, compensation
for treating their citizens for alleged adverse reactions to RISPERDAL<sup style="font-size: 85%; vertical-align: text-top">®</sup>, civil fines or penalties,
damages for “overpayments” by the state and others, violations of state consumer fraud statutes,
punitive damages, or other relief relating to alleged unfair business practices. Certain of these
actions also seek injunctive relief relating to the promotion of RISPERDAL<sup style="font-size: 85%; vertical-align: text-top">®</sup>. In the Texas matter,
the Attorney General of Texas has joined a qui tam action in that state seeking similar relief, and
the trial is scheduled to commence in late November 2011.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Attorney General of West Virginia commenced suit in 2004 against Janssen (now JPI) based on
claims of alleged consumer fraud as to DURAGESIC<sup style="font-size: 85%; vertical-align: text-top">®</sup>, as well as RISPERDAL<sup style="font-size: 85%; vertical-align: text-top">®</sup>. JPI was found liable and
damages were assessed at $4.5 million. JPI filed an appeal, and in November 2010, the West
Virginia Supreme Court reversed the trial court’s decision. In December 2010, the Attorney General
of West Virginia dismissed the case as it related to RISPERDAL<sup style="font-size: 85%; vertical-align: text-top">®</sup> without any payment. Thereafter,
JPI settled the case insofar as it related to DURAGESIC<sup style="font-size: 85%; vertical-align: text-top">®</sup>.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In 2004, the Attorney General of Louisiana filed a multi-count Complaint against Janssen (now JPI).
The Company was later added as a defendant. The case was tried in October 2010. The issue tried
to the jury was whether the Company or JPI had violated the State’s Medicaid Fraud Act (the Act)
through misrepresentations allegedly made in the mailing of a November 2003 Dear Health Care
Provider letter. The jury returned a verdict that JPI and the Company had violated the Act and
awarded $257.7 million in damages. The trial judge subsequently awarded the Attorney General
counsel fees and expenses in the amount of $73 million. The Company’s and JPI’s motion for a new
trial was denied. The Company and JPI have filed an appeal and believe that they have strong
arguments supporting the appeal. The Company believes that the potential for an unfavorable outcome
is not probable, and therefore, the Company has not established a reserve with respect to the
verdict.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In 2007, the Office of General Counsel of the Commonwealth of Pennsylvania filed a lawsuit against
Janssen (now JPI) on a multi-Count Complaint related to Janssen’s sale of RISPERDAL<sup style="font-size: 85%; vertical-align: text-top">®</sup> to the
Commonwealth’s Medicaid program. The trial occurred in June 2010. The trial judge dismissed the
case after the close of the plaintiff’s evidence. The Commonwealth’s post-trial motions were
denied. The Commonwealth filed an appeal in April 2011.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In 2007, the Attorney General of South Carolina filed a lawsuit against the Company and Janssen
(now JPI) on several counts. In March 2011, the matter was tried on liability only, at which time
the lawsuit was limited to claims of violation of the South Carolina Unfair Trade Practice Act,
including, among others, questions of whether the Company or JPI engaged in unfair or deceptive
acts or practices in the conduct of any trade or commerce by distributing the November 2003 Dear
Health Care Provider letter or in their use of the FDA-approved label. The jury found in favor of
the Company and against JPI. In June 2011, the Court awarded civil penalties of approximately
$327.1 million. JPI intends to appeal this judgment. The Company and JPI believe that JPI has
strong arguments supporting an appeal and that the potential for an unfavorable outcome is not
probable. Therefore, the Company has not established a reserve with respect to the verdict.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Attorneys General of approximately 40 other states have indicated a potential interest in
pursuing similar litigation against JPI, and have obtained a tolling agreement staying the running
of the statute of limitations while they pursue a coordinated civil investigation of JPI regarding
potential consumer fraud actions in connection with the marketing of RISPERDAL<sup style="font-size: 85%; vertical-align: text-top">®</sup>.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><u>MCNEIL CONSUMER HEALTHCARE</u>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Starting in June 2010, McNeil Consumer Healthcare Division of McNEIL-PPC, Inc. (McNeil Consumer
Healthcare), and certain affiliates, including the Company (the Companies), received grand jury
subpoenas from the United States Attorney’s Office for the Eastern District of Pennsylvania
requesting documents broadly relating to recent recalls of various products of McNeil Consumer
Healthcare, and the FDA inspections of the Fort Washington, Pennsylvania and Lancaster,
Pennsylvania manufacturing facilities, as well as certain documents relating to recent recalls of a
small number of products of other Company subsidiaries. In addition, in February 2011, the
government served McNEIL-PPC, Inc. (McNEIL-PPC) with a Civil
Investigative Demand seeking records relevant to its investigation to determine if there was a
violation of the Federal False Claims Act. The Companies are cooperating with the United States
Attorney’s Office in responding to these subpoenas.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Companies have also received Civil Investigative Demands from multiple State Attorneys General
Offices broadly relating to the McNeil recall issues. The Companies continue to cooperate with
these inquiries. In January 2011, the Oregon Attorney General filed a civil complaint against the
Company, McNEIL-PPC and McNeil Healthcare LLC in state court alleging civil violations of the
Oregon unlawful trade practices act relating to an earlier recall of a McNeil OTC product. The
Companies removed this case to federal court and sought transfer of the case to the United States
District Court for the Eastern District of Pennsylvania. The Judicial Panel on Multidistrict
Litigation denied the transfer request. Currently, the case is before the United States District
Court for the District of Oregon pending its decision on a motion for remand filed by the Oregon
Attorney General.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In March 2011, the United States filed a complaint for injunctive relief in the United States
District Court for the Eastern District of Pennsylvania against McNEIL-PPC and two of its
employees, alleging that McNEIL-PPC is in violation of FDA regulations regarding the manufacture of
drugs at the facilities it operates in Lancaster, Pennsylvania, Fort Washington, Pennsylvania, and
Las Piedras, Puerto Rico. On the same day, the parties filed a consent decree of permanent
injunction resolving the claims set forth in the complaint. The Court approved and entered the
consent decree on March 16, 2011.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The consent decree, which is subject to ongoing enforcement by the court, requires McNEIL-PPC to
take enhanced measures to remediate the three facilities. The Fort Washington facility, which the
company voluntarily shut down in April 2010, will remain shut down until a third-party consultant
certifies that its operations will be in compliance with applicable law, and the FDA concurs with
the third-party certification. The Lancaster and Las Piedras facilities may continue to
manufacture and distribute drugs, provided that a third party reviews manufacturing records for
selected batches of drugs released from the facilities, and certifies that any deviations reviewed
do not adversely affect the quality of the selected batches. McNEIL-PPC has submitted a workplan
to the FDA for remediation of the Lancaster and Las Piedras facilities; that plan is subject to FDA
approval. Third-party batch record review may cease if the FDA has stated that the facilities
appear to be in compliance with applicable law. Each facility is subject to a five-year audit
period by a third party after the facility has been deemed by the FDA to be in apparent compliance
with applicable law.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><u>OMNICARE</u>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In September 2005, the Company received a subpoena from the United States Attorney’s Office,
District of Massachusetts, seeking documents related to the sales and marketing of eight drugs to
Omnicare, Inc. (Omnicare), a manager of pharmaceutical benefits for long-term care facilities. In
April 2009, the Company and certain of its pharmaceutical subsidiaries were served in two civil qui
tam cases asserting claims under the Federal False Claims Act and related state law claims alleging
that the defendants provided Omnicare with rebates and other alleged kickbacks, causing Omnicare to
file false claims with Medicaid and other government programs. In January 2010, the government
intervened in both of these cases, naming the Company, Ortho-McNeil-Janssen Pharmaceuticals, Inc.
(now Janssen Pharmaceuticals, Inc. (JPI)), and Johnson & Johnson Health Care Systems Inc. as
defendants. Subsequently, the Commonwealth of Massachusetts, Virginia, and Kentucky, and the
States of California and Indiana intervened in the action. The defendants moved to dismiss the
complaints, and in February 2011, the United States District Court for the District of
Massachusetts dismissed one qui tam case entirely and dismissed the other case in part, rejecting
allegations that the defendants had violated their obligation to report its “best price” to health
care program officials. The defendants subsequently moved the Court to reconsider its decision not
to dismiss the second case in its entirety, which the Court denied in May 2011. The claims of the
United States and individual states remain pending.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In November 2005, a lawsuit was filed under seal by Scott Bartz, a former employee, in the United
States District Court for the Eastern District of Pennsylvania against the Company and certain of
its pharmaceutical subsidiaries (the J&J Defendants), along with co-defendants McKesson Corporation
and Omnicare, Inc. The Bartz complaint raises many issues in common with the Omnicare-related
litigation discussed above already pending before the United States District Court for the District
of Massachusetts, such as best price and a number of kickback allegations. After investigation, the
United States declined to intervene. The case was subsequently unsealed in January 2011. In
February 2011, the plaintiff filed an amended complaint, which was placed under seal. Thereafter,
on the J&J Defendants’ motion, the case was transferred to the United States District Court for the
District of Massachusetts, where it is currently pending. In April 2011, the amended complaint was
ordered unsealed and alleges a variety of causes of action under the Federal False Claims Act and
corresponding state and local statutes, including that the J&J Defendants engaged in various
improper transactions that were allegedly designed to report false prescription drug prices to the
federal government in order to reduce the J&J Defendants’ Medicaid rebate obligations. The
complaint further alleges that the J&J Defendants improperly retaliated against the plaintiff for
having raised these allegations internally. Bartz seeks multiple forms of relief, including damages
and reinstatement to a position with the same seniority status.
</div>
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<div align="left" style="font-size: 10pt; margin-top: 6pt">The J&J Defendants subsequently moved to dismiss the complaint in May 2011, and oral argument was
held in August 2011. In June 2011, Bartz filed a notice of intent to voluntarily dismiss McKesson
and Omnicare from the case and added McKesson Specialty Pharmaceuticals, LLC, as a co-defendant.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><u>OTHER</u>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In July 2003, Centocor, Inc. (now Janssen Biotech, Inc. (JBI)), received a request that it
voluntarily provide documents and information to the criminal division of the United States
Attorney’s Office, District of New Jersey, in connection with its investigation into various JBI
marketing practices. Subsequent requests for documents have been received from the United States
Attorney’s Office. Both the Company and JBI have responded to these requests for documents and
information.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In July 2005, Scios Inc. (Scios) received a subpoena from the United States Attorney’s Office for
the District of Massachusetts, seeking documents related to the sales and marketing of NATRECOR<sup style="font-size: 85%; vertical-align: text-top">®</sup>.
In August 2005, Scios was advised that the investigation would be handled by the United States
Attorney’s Office for the Northern District of California in San Francisco. In February 2009, two
qui tam complaints were unsealed in the United States District Court for the Northern District of
California, alleging, among other things, improper activities in the promotion of NATRECOR<sup style="font-size: 85%; vertical-align: text-top">®</sup>. In
June 2009, the United States government intervened in one of the qui tam actions, and filed a
complaint against Scios and the Company seeking relief under the Federal False Claims Act and
asserting a claim of unjust enrichment. The civil case is proceeding and discovery is ongoing. In
October 2011, the Court approved a settlement of the criminal case in which Scios pled guilty to a
single misdemeanor violation of the Food, Drug & Cosmetic Act and paid a fine of $85 million.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In February 2007, the Company voluntarily disclosed to the United States Department of Justice
(DOJ) and the United States Securities & Exchange Commission (SEC) that subsidiaries outside the
United States are believed to have made improper payments in connection with the sale of medical
devices in two small-market countries, which payments may fall within the jurisdiction of the
Foreign Corrupt Practices Act (FCPA). In the course of continuing dialogues with the agencies,
other issues potentially rising to the level of FCPA violations in additional markets were brought
to the attention of the agencies by the Company. In addition, in February 2006, the Company
received a subpoena from the SEC requesting documents relating to the participation by several
Company subsidiaries in the United Nations Iraq Oil for Food Program. In April 2011, the Company
resolved the FCPA and Oil for Food matters through settlements with the DOJ, SEC and United Kingdom
Serious Fraud Office. These settlements required payments of approximately $78 million in financial
penalties. As part of the settlement with the DOJ, the Company entered into a Deferred Prosecution
Agreement that requires the Company to complete a three-year term of enhanced compliance practices.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In April 2007, the Company received two subpoenas from the Office of the Attorney General of the
State of Delaware. The subpoenas seek documents and information relating to nominal pricing
agreements. For purposes of the subpoenas, nominal pricing agreements are defined as agreements
under which the Company agreed to provide a pharmaceutical product for less than ten percent of the
Average Manufacturer Price for the product. The Company responded to these requests.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In May 2007, the New York State Attorney General issued a subpoena to the Company seeking
information relating to the marketing, sale, reimbursement and safety of PROCRIT<sup style="font-size: 85%; vertical-align: text-top">®</sup>. The Company has
responded to the subpoena.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In June 2008, the Company received a subpoena from the United States Attorney’s Office for the
District of Massachusetts relating to the marketing of biliary stents by Cordis Corporation
(Cordis). Cordis is currently cooperating in responding to the subpoena. In addition, in January
2010, a complaint was unsealed in the United States District Court for the Northern District of
Texas seeking damages against Cordis for alleged violations of the Federal False Claims Act and
several similar state laws in connection with the marketing of biliary stents. The United States
Department of Justice and several states have declined to intervene at this time. In April 2011,
the United States District Court for the Northern District of Texas dismissed the complaint without
prejudice.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In May 2009, the New Jersey Attorney General issued a subpoena to DePuy Orthopaedics, Inc., seeking
information regarding the financial interest of clinical investigators who performed clinical
studies for DePuy Orthopaedics, Inc. and DePuy Spine, Inc. DePuy Orthopaedics, Inc. has responded
to these requests.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In October 2011, the European Commission announced that it opened an investigation concerning an
agreement between Janssen-Cilag B.V. and Sandoz B.V. relating to the supply of fentanyl patches in
The Netherlands. The investigation seeks to determine whether the agreement infringes European
competition law.
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<div align="left" style="font-size: 10pt; margin-top: 6pt">In recent years the Company has received numerous requests from a variety of United States
Congressional Committees to produce information relevant to ongoing congressional inquiries. It is
the Company’s policy to cooperate with these inquiries by producing the requested information.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><u><b>GENERAL LITIGATION</b></u>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In September 2004, Plaintiffs in an employment discrimination litigation initiated against the
Company in 2001 in the United States District Court for the District of New Jersey moved to certify
a class of all African American and Hispanic salaried employees of the Company and its affiliates
in the United States, who were employed at any time from November 1997 to the present. Plaintiffs
sought monetary damages for the period 1997 through the present (including punitive damages) and
equitable relief. The Court denied Plaintiffs’ class certification motion in December 2006 and
their motion for reconsideration in April 2007. Plaintiffs sought to appeal these decisions and, in
April 2008, the Court of Appeals ruled that Plaintiffs’ appeal of the denial of class certification
was untimely. In July 2009, Plaintiffs filed a motion for certification of a modified class, which
the Company opposed. The District Court denied Plaintiffs’ motion in July 2010, and the Court of
Appeals denied Plaintiffs’ request for leave to appeal the denial of certification of the modified
class. In May 2011, the case was dismissed with prejudice.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Starting in July 2006, five lawsuits were filed in United States District Court for the District of
New Jersey by various employers and employee benefit plans and funds seeking to recover amounts
they paid for RISPERDAL<sup style="font-size: 85%; vertical-align: text-top">®</sup> for plan participants. In general, Plaintiffs allege that the Company and
certain of its pharmaceutical subsidiaries engaged in off-label marketing of RISPERDAL<sup style="font-size: 85%; vertical-align: text-top">®</sup> in
violation of the federal and New Jersey RICO statutes. In addition, Plaintiffs asserted various
state law claims. All of the cases were consolidated into one case seeking class action status, but
shortly thereafter, one action was voluntarily dismissed. In December 2008, the Court dismissed the
actions of the four remaining plaintiffs. In April 2010, those plaintiffs filed a new consolidated
class action against the Company and Janssen, L.P. (now Janssen Pharmaceuticals, Inc. (JPI)); and
in March 2011, that action was dismissed. In April 2011, one of those plaintiffs filed a notice of
appeal with the United States Court of Appeals for the Third Circuit.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In April 2009, Ortho-Clinical Diagnostics, Inc. (OCD) received a grand jury subpoena from the
United States Department of Justice, Antitrust Division, requesting documents and information for
the period beginning September 1, 2000 through the present, pertaining to an investigation of
alleged violations of the antitrust laws in the blood reagents industry. OCD complied with the
subpoena. In February 2011, OCD received a letter from the Antitrust Division indicating that it
had closed its investigation in November 2010. In June 2009, following the public announcement
that OCD had received a grand jury subpoena, multiple class action complaints seeking damages for
alleged price fixing were filed against OCD. The various cases were consolidated for pre-trial
purposes in the United States District Court for the Eastern District of Pennsylvania. Discovery
is ongoing.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In May 2009, Centocor Ortho Biotech Inc. (now Janssen Biotech, Inc. (JBI)) commenced an arbitration
proceeding before the American Arbitration Association against Schering-Plough Corporation and its
subsidiary Schering-Plough (Ireland) Company (collectively, Schering-Plough). JBI and
Schering-Plough are parties to a series of agreements (Distribution Agreements) that grant
Schering-Plough the exclusive right to distribute the drugs REMICADE<sup style="font-size: 85%; vertical-align: text-top">®</sup> and SIMPONI<sup style="font-size: 85%; vertical-align: text-top">®</sup> worldwide,
except within the United States, Japan, Taiwan, Indonesia, and the People’s Republic of China
(including Hong Kong). JBI distributes REMICADE<sup style="font-size: 85%; vertical-align: text-top">®</sup> and SIMPONI<sup style="font-size: 85%; vertical-align: text-top">®</sup>, the next generation treatment,
within the United States. In the arbitration, JBI sought a declaration that the agreement and
merger between Merck & Co., Inc. (Merck) and Schering-Plough constituted a change of control under
the terms of the Distribution Agreements that permitted JBI to terminate the Agreements. In April
2011, the Company, JBI and Merck announced an agreement to amend the Distribution Agreements. This
agreement concluded the arbitration proceeding.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Pursuant to the terms of the amended Distribution Agreements, on July 1, 2011, Merck’s subsidiary,
Schering-Plough (Ireland) relinquished exclusive marketing rights for REMICADE<sup style="font-size: 85%; vertical-align: text-top">®</sup> and SIMPONI<sup style="font-size: 85%; vertical-align: text-top">®</sup> to the
Company’s Janssen pharmaceutical companies in territories including Canada, Central and South
America, the Middle East, Africa and Asia Pacific (relinquished territories). Merck retained
exclusive marketing rights throughout Europe, Russia and Turkey (retained territories). The
retained territories represent approximately 70 percent of Merck’s 2010 revenue of approximately
$2.8 billion from REMICADE<sup style="font-size: 85%; vertical-align: text-top">®</sup> and SIMPONI<sup style="font-size: 85%; vertical-align: text-top">®</sup>, while the relinquished territories represent
approximately 30 percent. In addition, as of July 1, 2011, all profit derived from Merck’s
exclusive distribution of the two products in the retained territories is being equally divided
between Merck and JBI. Under the prior terms of the Distribution Agreements, the contribution
income (profit) split, which was at 58 percent to Merck and 42 percent to JBI, would have declined
for Merck and increased for JBI each year until 2014, when it would have been equally divided. JBI
also received a one-time payment of $500 million in April 2011, which is being amortized over the
period of the agreement.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt">In April 2010, a putative class action lawsuit was filed in the United States District Court for
the Northern District of California by representatives of nursing home residents or their estates
against the Company, Omnicare, Inc. (Omnicare), and other unidentified companies or individuals.
In February 2011, plaintiffs filed a second amended complaint asserting that certain rebate
agreements between the Company and Omnicare increased the amount of money spent on pharmaceuticals
by the nursing home residents and violated the Sherman Act and the California Business &
Professions Code. The second amended complaint also asserts a claim of unjust enrichment.
Plaintiffs seek multiple forms of monetary and injunctive relief. The Company moved to dismiss the
second amended complaint in March 2011. The Court granted the motion in its entirety in August
2011, dismissing all claims asserted by Plaintiffs.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Starting in April 2010, a number of shareholder derivative lawsuits were filed in the United States
District Court for the District of New Jersey against certain current and former directors and
officers of the Company. The Company is named as a nominal defendant. These actions were
consolidated in August 2010 into one lawsuit: <i>In re Johnson & Johnson Derivative Litigation</i>. An
amended consolidated complaint was filed in December 2010. Additionally, in September 2010,
another shareholder derivative lawsuit was filed in New Jersey Superior Court against certain
current and former directors and officers of the Company. The Company is named as a nominal
defendant in this action as well. The parties to this action have stipulated that it shall be
stayed until the <i>In re Johnson & Johnson Derivative Litigation </i>is completely resolved.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">These shareholder derivative actions are similar in their claims and collectively they assert a
variety of alleged breaches of fiduciary duties, including, among other things, that the defendants
allegedly engaged in, approved of, or failed to remedy or prevent defective medical devices,
improper pharmaceutical rebates, improper off-label marketing of pharmaceutical and medical device
products, violations of current good manufacturing practice regulations that resulted in product
recalls, and failed to disclose the aforementioned alleged misconduct in the Company’s filings
under the Securities Exchange Act of 1934. Each complaint seeks a variety of relief, including
monetary damages and corporate governance reforms. The Company moved to dismiss these actions on
the grounds, <i>inter alia</i>, that the plaintiffs failed to make a demand upon the Board of Directors.
In September 2011, <i>In re Johnson & Johnson Derivative Litigation </i>was dismissed without prejudice
and with leave to file an amended complaint.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company filed a report in the <i>In re Johnson & Johnson Derivative Litigation </i>matter in July
2011, prepared by a Special Committee of the Board of Directors, which investigated the allegations
contained in the derivative actions and in a number of shareholder demand letters that the Board
received in 2010 raising similar issues. The Special Committee was assisted in its investigation
by independent counsel. The Special Committee’s report recommended: i) that the Company reject the
shareholder demands and take whatever steps are necessary or appropriate to secure dismissal of the
derivative litigation and ii) that the Board of Directors create a new Regulatory and Compliance
Committee charged with responsibility for monitoring and oversight of the Company’s Health Care
Compliance and Quality & Compliance systems and issues. The Company’s Board of Directors
unanimously adopted the Special Committee’s recommendations. In August 2011, two shareholders who
had submitted shareholder demand letters in 2010 filed shareholder derivative lawsuits in the
United States District Court for the District of New Jersey naming various current and former
officers and directors as defendants and challenging the Board’s rejection of their demands. The
Company intends to move to terminate these lawsuits on the basis of the Board’s decision to adopt
the Special Committee’s recommendations.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Two additional shareholder derivative lawsuits were filed in May 2011 in the United States District
Court for the District of New Jersey, and two other shareholder derivative lawsuits were filed in
New Jersey Superior Court in May 2011 and August 2011, all naming the Company’s current directors
as defendants and the Company as the nominal defendant. The complaints allege breaches of
fiduciary duties related to the Company’s compliance with the Foreign Corrupt Practices Act and
participation in the United Nations Iraq Oil For Food Program, that the Company has suffered
damages as a result of those alleged breaches, and that the defendants failed to disclose the
alleged misconduct in the Company’s filings under the Securities Exchange Act of 1934. Plaintiffs
seek monetary damages, and one plaintiff also seeks corporate governance reforms. The federal
lawsuits were consolidated in July 2011, and an amended consolidated complaint was filed in August
2011. The Company intends to move to dismiss the consolidated federal lawsuit on the grounds,
<i>inter alia</i>, that the plaintiffs failed to make a demand upon the Board of Directors. The Company
intends to move to dismiss or stay the state lawsuits pending resolution of the federal lawsuit.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In September 2011, two additional shareholder derivative lawsuits were filed in the United States
District Court for the District of New Jersey naming the Company’s current directors and one former
director as defendants and the Company as the nominal defendant. These lawsuits allege that the
defendants breached their fiduciary duties in their decisions with respect to the compensation of
the Chief Executive Officer during the period from 2008 through the present, and that the
defendants made misleading statements in the Company’s annual proxy statements. One of these suits
has been voluntarily dismissed. An
amended complaint has been filed in the other. The Company intends to move to dismiss the
remaining suit on the grounds, <i>inter alia</i>, that the plaintiff failed to make a demand upon the
Board of Directors.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Starting in May 2010, multiple complaints seeking class action certification related to the McNeil
recalls have been filed against McNeil Consumer Healthcare and certain affiliates, including the
Company, in the United States District Court for the Eastern District of Pennsylvania, the Northern
District of Illinois, the Central District of California, the Southern District of Ohio and the
Eastern District of Missouri. These consumer complaints allege generally that purchasers of various
McNeil medicines are owed monetary damages and penalties because they paid premium prices for
defective medications rather than less expensive alternative medications. All but one complaint
seeks certification of a nation-wide class of purchasers of these medicines, whereas one complaint,
the Harvey case, seeks certification of a class of Motrin<sup style="font-size: 85%; vertical-align: text-top">®</sup> IB purchasers in Missouri. In October
2010, the Judicial Panel on Multidistrict Litigation (JPML) consolidated all of the consumer
complaints, except for the Harvey case, which was consolidated in March 2011, for pretrial
proceedings in the United States District Court for the Eastern District of Pennsylvania. In
January 2011, the plaintiffs in all of the cases except the Harvey case filed a “Consolidated
Amended Civil Consumer Class Action Complaint” (CAC) naming additional parties and claims. In July
2011, the Court granted the Company’s motion to dismiss the CAC without prejudice, but permitted
the plaintiffs to file an amended complaint within thirty days of the dismissal order. In August
2011, the plaintiffs filed a Second Amended Civil Consumer Class Action Complaint (SAC). The
Company moved to dismiss the SAC in September 2011. This second motion to dismiss is pending.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Separately, in September 2011, the Company, Johnson & Johnson Inc. and McNeil Consumer Healthcare
Division of Johnson & Johnson Inc. received a Notice of Civil Claim filed in the Supreme Court of
British Columbia, Canada (the Canadian Civil Claim). The Canadian Civil Claim is a putative class
action brought on behalf of persons who reside in British Columbia and who purchased various McNeil
children’s over-the-counter medicines during the period between September 20, 2001 and the present.
The Canadian Civil Claim alleges that the defendants violated the Canadian Business Practices and
Consumer Protection Act, and other Canadian statutes and common laws, by selling medicines that did
not comply with Canadian Good Manufacturing Practices.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In September 2010, a shareholder, Ronald Monk, filed a lawsuit in the United States District Court
for the District of New Jersey seeking class certification and alleging that the Company and
certain individuals, including executive officers and employees of the Company, failed to disclose
that a number of manufacturing facilities were failing to maintain current good manufacturing
practices, and that as a result, the price of the Company’s stock has declined significantly.
Plaintiff seeks to pursue remedies under the Securities Exchange Act of 1934 to recover his alleged
economic losses. In May 2011, the Company filed a motion to dismiss, which is pending before the
Court.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In April 2011, OMJ Pharmaceuticals, Inc. (OMJ PR) filed a lawsuit against the United States in
United States District Court for the District of Puerto Rico alleging overpayment of federal income
taxes for the tax years ended November 30, 1999 and November 30, 2000. OMJ PR alleges that the
Internal Revenue Service erroneously calculated OMJ PR’s tax credits under Section 936 of the Tax
Code. Discovery is ongoing.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In August 2011, an arbitration panel ruled that Mitsubishi Tanabe Pharma Corporation (Tanabe),
JBI’s distributor of REMICADE<sup style="font-size: 85%; vertical-align: text-top">®</sup> in Japan, could seek to modify the proportion of net sales revenue
that Tanabe must remit to JBI in exchange for distribution rights and commercial supply of
REMICADE<sup style="font-size: 85%; vertical-align: text-top">®</sup> (the Supply Price). Tanabe commenced the arbitration against JBI in 2009 pursuant to
the parties’ distribution agreement, which grants Tanabe the right to distribute REMICADE<sup style="font-size: 85%; vertical-align: text-top">®</sup> in Japan
and certain other parts of Asia. JBI has counterclaimed for an increase in the Supply Price. The
arbitration hearing to determine the appropriate split of revenue is scheduled for November 2011,
and a decision is anticipated in 2012.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company or its subsidiaries are also parties to a number of proceedings brought under the
Comprehensive Environmental Response, Compensation, and Liability Act, commonly known as Superfund,
and comparable state, local or foreign laws in which the primary relief sought is the cost of past
and/or future remediation.
</div>
</div>
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<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt">NOTE 12 — RESTRUCTURING
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In the fiscal second quarter of 2011, Cordis Corporation, a subsidiary of Johnson & Johnson,
announced the discontinuation of its clinical development program for the NEVO™ Sirolimus-Eluting
Coronary Stent and cessation of the manufacture and marketing of CYPHER<sup style="font-size: 85%; vertical-align: text-top">®</sup> and CYPHER
SELECT<sup style="font-size: 85%; vertical-align: text-top">®</sup> Plus Sirolimus-Eluting Coronary Stents by the end of 2011. This will allow the
Company to focus on other cardiovascular therapies where significant patient needs exist.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt">As a result of the above mentioned restructuring plan announced by Cordis Corporation, the Company
recorded $676 million in related pre-tax charges, of which approximately $164 million of the
pre-tax restructuring charges require cash payments. The $676 million of restructuring charges
consists of asset write-offs of $512 million and $164 million related to leasehold and contract
obligations and other expenses. The $512 million of asset write-offs relate to property, plant and
equipment of $265 million, intangible assets of $160 million and inventory of $87 million (recorded
in cost of products sold). The Cordis restructuring program has been substantially completed as of
October 2, 2011.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company recorded an accrual for restructuring in the fourth quarter of 2009.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following table summarizes the remaining severance reserves associated with the restructuring
plan recorded in the fourth quarter of 2009.
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="88%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">(Dollars in Millions)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Severance</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td colspan="5" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Reserve balance as of:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">January 2, 2011
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">345</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Cash outlays
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(87 </td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">October 2, 2011*
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">258</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left">
<div style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000"> 
</div>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96%"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">*</td>
<td> </td>
<td>Remaining cash outlays for severance are expected to be paid out in
accordance with the Company’s plans and local laws.</td>
</tr>
</table>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Of the 7,500 positions the Company planned to eliminate in the 2009 restructuring plan,
approximately 5,800 positions have been eliminated as of October 2, 2011.
</div>
</div>
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<!-- Begin Block Tagged Accounting Policy: JNJ-20111002_note1_accounting_policy_table1 - us-gaap:GoodwillAndIntangibleAssetsGoodwillPolicy-->
<div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt">During the fiscal third quarter of 2011, the Financial Accounting Standards Board (FASB) issued
amendments to goodwill impairment testing. Under the amendments in this update, an entity has the
option to first assess qualitative factors to determine whether the existence of events or
circumstances leads to a determination that it is more likely than not that the fair value of a
reporting unit is less than its carrying amount. If, after assessing the totality of events or
circumstances, an entity determines it is not more likely than not that the fair value of a
reporting unit is less than its carrying amount, then performing the two-step impairment test is
unnecessary. However, if an entity concludes otherwise, then it is required to perform the first
step of the two-step impairment test. This guidance is effective for annual and interim goodwill
impairment tests performed for fiscal years beginning after December 15, 2011. The adoption of this
standard is not expected to have a material impact on the Company’s results of operations, cash
flows or financial position.
</div>
</div>
</div>
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<!-- Begin Block Tagged Accounting Policy: JNJ-20111002_note1_accounting_policy_table2 - jnj:RequirementsForPresentationOfComprehensiveIncomePolicyTextBlock-->
<div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt">During the fiscal second quarter of 2011, the FASB issued an amendment to the disclosure
requirements for presentation of comprehensive income. The amendment requires that all non-owner
changes in stockholders’ equity be presented either in a single continuous statement of
comprehensive income or in two separate but consecutive statements. This guidance is effective
retrospectively for the interim periods and annual periods beginning after December 15, 2011. The
adoption of this standard is not expected to have a material impact on the Company’s results of
operations, cash flows or financial position.
</div>
</div>
</div>
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<!-- Begin Block Tagged Accounting Policy: JNJ-20111002_note1_accounting_policy_table3 - us-gaap:FairValueOfFinancialInstrumentsPolicy-->
<div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt">During the fiscal second quarter of 2011, the FASB issued amendments to disclosure requirements for
common fair value measurement. These amendments result in convergence of fair value measurement and
disclosure requirements between U.S. GAAP and IFRS. This guidance is effective prospectively for
the interim periods and annual periods beginning after December 15, 2011. Early adoption is
prohibited. The adoption of this standard is not expected to have a material impact on the
Company’s results of operations, cash flows or financial position.
</div>
</div>
</div>
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<!-- Begin Block Tagged Accounting Policy: JNJ-20111002_note1_accounting_policy_table4 - us-gaap:RevenueRecognitionPolicyTextBlock-->
<div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt">During the fiscal first quarter of 2011, the Company adopted the FASB guidance and amendments
issued related to revenue recognition under the milestone method. The objective of the accounting
standard update is to provide guidance on defining a milestone and determining when it may be
appropriate to apply the milestone method of revenue recognition for research or development
transactions. This update became effective on a prospective basis for milestones achieved in fiscal
years, and interim periods within those years, beginning on or after June 15, 2010. The adoption of
this standard did not have a material impact on the Company’s results of operations, cash flows or
financial position.
</div>
</div>
</div>
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<div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt">During the fiscal first quarter of 2011, the Company adopted the FASB guidance on how
pharmaceutical companies should recognize and classify in the Company’s financial statements, the
non-deductible annual fee paid to the Government in accordance with the Patient Protection and
Affordable Care Act, as amended by the Health Care and Education Reconciliation Act. This fee is
based on an allocation of a company’s market share of total branded prescription drug sales from
the prior year. The estimated fee was recorded as a selling, marketing and administrative expense
in the Company’s financial statement and will be amortized on a straight-line basis for the year as
per the FASB guidance. The adoption of this standard did not have a material impact on the
Company’s results of operations, cash flows or financial position.
</div>
</div>
</div>
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<!-- Begin Block Tagged Note Table: JNJ-20111002_note2_table1 - us-gaap:ScheduleOfInventoryCurrentTableTextBlock-->
<div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-family: 'Times New Roman',Times,serif">
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">October 2,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">January 2,</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">(Dollars in Millions)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2011</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Raw materials and supplies
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,348</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,073</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Goods in process
</div></td>
<td> </td>
<td> </td>
<td align="right">1,853</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,460</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Finished goods
</div></td>
<td> </td>
<td> </td>
<td align="right">3,227</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,845</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total inventories
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">6,428</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,378</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
</div>
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<!-- Begin Block Tagged Note Table: JNJ-20111002_note3_table1 - us-gaap:ScheduleOfIntangibleAssetsAndGoodwillTableTextBlock-->
<div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif">
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">October 2,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">January 2,</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">(Dollars in Millions)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2011</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Intangible assets with definite lives:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Patents and trademarks — gross
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">7,789</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,660</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Less accumulated amortization
</div></td>
<td> </td>
<td> </td>
<td align="right">2,883</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,629</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Patents and trademarks — net
</div></td>
<td> </td>
<td> </td>
<td align="right">4,906</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,031</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Other intangibles — gross
</div></td>
<td> </td>
<td> </td>
<td align="right">8,787</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7,674</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Less accumulated amortization
</div></td>
<td> </td>
<td> </td>
<td align="right">3,369</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,880</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Other intangibles — net
</div></td>
<td> </td>
<td> </td>
<td align="right">5,418</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,794</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Intangible assets with indefinite lives:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Trademarks
</div></td>
<td> </td>
<td> </td>
<td align="right">5,951</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,954</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Purchased in-process research and development
</div></td>
<td> </td>
<td> </td>
<td align="right">1,950</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,937</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total intangible assets with indefinite lives
</div></td>
<td> </td>
<td> </td>
<td align="right">7,901</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7,891</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total intangible assets — net
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">18,225</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">16,716</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note Table: JNJ-20111002_note3_table2 - us-gaap:ScheduleOfGoodwillTextBlock-->
<div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif">
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Med Dev</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">(Dollars in Millions)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Consumer</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Pharm</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">& Diag</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Total</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Goodwill, net at January 2, 2011
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">8,144</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,225</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,925</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">15,294</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Acquisitions
</div></td>
<td> </td>
<td> </td>
<td align="right">251</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">538</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">789</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Currency translation/Other
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(60</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">21</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(34 </td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Goodwill, net as of October 2, 2011
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">8,335</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,768</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,946</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">16,049</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note Table: JNJ-20111002_note4_table1 - us-gaap:ScheduleOfDerivativeInstrumentsGainLossInStatementOfFinancialPerformanceTextBlock-->
<div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif">
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="28%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Gain/ (Loss)</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Gain/(Loss)</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Gain/ (Loss)</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>recognized in</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>reclassified from</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>recognized in</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Accumulated</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Accumulated OCI</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>other</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000"><b>OCI</b><sup style="font-size: 85%; vertical-align: text-top"><b>(1)</b></sup></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000"><b>into income</b><sup style="font-size: 85%; vertical-align: text-top"><b>(1)</b></sup></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000"><b>income/expense</b><sup style="font-size: 85%; vertical-align: text-top"><b>(2)</b></sup></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000">Fiscal Third Quarters Ended</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">(Dollars in Millions)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2010</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2010</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2010</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Cash Flow Hedges</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign exchange contracts
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(57</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">45</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(12) </td>
<td nowrap="nowrap"> (A)</td>
<td> </td>
<td> </td>
<td align="right">1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">18</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign exchange contracts
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(58</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(7</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(21</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(106) </td>
<td nowrap="nowrap"> (B)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1 </td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">121</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign exchange contracts
</div></td>
<td> </td>
<td> </td>
<td align="right">6</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(46</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(40</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">20 </td>
<td nowrap="nowrap"> (C)</td>
<td> </td>
<td> </td>
<td align="right">1</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(11 </td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Cross currency interest rate swaps
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(67</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(24</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(6</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1) </td>
<td nowrap="nowrap"> (D)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign exchange contracts
</div></td>
<td> </td>
<td> </td>
<td align="right">59</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(63</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(4</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">9 </td>
<td nowrap="nowrap"> (E)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1 </td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(17 </td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(117</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(95</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(67</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(90</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">111</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">All amounts shown in the table above are net of tax.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following table is a summary of the activity related to derivatives designated as hedges for
the fiscal nine months in 2011 and 2010:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="28%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Gain/ (Loss)</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Gain/ (Loss)</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Gain/ (Loss)</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>recognized in</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>reclassified from</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>recognized in</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Accumulated</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Accumulated OCI</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>other</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000"><b>OCI</b><sup style="font-size: 85%; vertical-align: text-top"><b>(1)</b></sup></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000"><b>into income</b><sup style="font-size: 85%; vertical-align: text-top"><b>(1)</b></sup></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000"><b>income/expense</b><sup style="font-size: 85%; vertical-align: text-top"><b>(2)</b></sup></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000">Fiscal Nine Months Ended</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">(Dollars in Millions)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2010</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2010</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2010</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Cash Flow Hedges</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign exchange contracts
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(30</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(39</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(6</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(41) </td>
<td nowrap="nowrap"> (A)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3 </td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign exchange contracts
</div></td>
<td> </td>
<td> </td>
<td align="right">34</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(213</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(127</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(204) </td>
<td nowrap="nowrap"> (B)</td>
<td> </td>
<td> </td>
<td align="right">2</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(33 </td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign exchange contracts
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">27</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(21</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">41 </td>
<td nowrap="nowrap"> (C)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">5</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Cross currency interest rate swaps
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(107</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(73</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(24</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">10 </td>
<td nowrap="nowrap"> (D)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign exchange contracts
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">18</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(7</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">8 </td>
<td nowrap="nowrap"> (E)</td>
<td> </td>
<td> </td>
<td align="right">1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(105</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(280</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(185</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(186</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">1</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(28 </td>
<td nowrap="nowrap">)</td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">All amounts shown in the table above are net of tax.
</div>
<div align="left">
<div style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000"> 
</div>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96%"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(1)</td>
<td> </td>
<td>Effective portion</td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(2)</td>
<td> </td>
<td>Ineffective portion</td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(A)</td>
<td> </td>
<td>Included in Sales to customers</td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(B)</td>
<td> </td>
<td>Included in Cost of products sold</td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(C)</td>
<td> </td>
<td>Included in Research and development expense</td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(D)</td>
<td> </td>
<td>Included in Interest (income)/Interest expense, net</td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(E)</td>
<td> </td>
<td>Included in Other (income)/expense, net</td>
</tr>
</table>
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note Table: JNJ-20111002_note4_table2 - us-gaap:ScheduleOfDerivativeInstrumentsInStatementOfFinancialPositionFairValueTextBlock-->
<div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif">
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="28%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000"><b>October 2, 2011</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 0px solid #000000"><b>January 2, 2011</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 0px solid #000000">(Dollars in Millions)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Level 1</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Level 2</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Level 3</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Total</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Total</b><sup style="font-size: 85%; vertical-align: text-top"><b>(1)</b></sup></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Derivatives designated as hedging instruments:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Assets:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign exchange contracts
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">604</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">604</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">321</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Cross currency interest rate swaps<sup style="font-size: 85%; vertical-align: text-top">(2)</sup>
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">17</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Total</b>
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">611</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">611</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">338</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Liabilities:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign exchange contracts
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">425</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">425</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">586</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Cross currency interest rate swaps<sup style="font-size: 85%; vertical-align: text-top">(3)</sup>
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">599</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">599</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">502</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Total</b>
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,024</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,024</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,088</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Derivatives not designated as hedging instruments:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Assets:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign exchange contracts
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">20</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">20</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">19</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Swiss Franc Option*
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">265</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">265</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">285</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">285</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">19</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Liabilities:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign exchange contracts
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">14</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">14</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">39</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Other Investments</b><sup style="font-size: 85%; vertical-align: text-top"><b>(4)</b></sup>
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,211</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,211</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,165</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left">
<div style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000"> 
</div>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96%"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">*</td>
<td> </td>
<td>Currency option related to the planned acquisition of Synthes, Inc.</td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(1)</td>
<td> </td>
<td>As of January 2, 2011, these assets and liabilities are classified as Level 2 with the
exception of Other Investments of $1,165 which are classified as Level 1.</td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(2)</td>
<td> </td>
<td>Includes $7 million and $14 million of non-current assets for October 2, 2011 and January 2,
2011, respectively.</td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(3)</td>
<td> </td>
<td>Includes $598 million and $502 million of non-current liabilities for October 2, 2011 and
January 2, 2011, respectively.</td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(4)</td>
<td> </td>
<td>Classified as non-current other assets.</td>
</tr>
</table>
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note Table: JNJ-20111002_note4_table3 - us-gaap:FairValueByBalanceSheetGroupingTextBlock-->
<div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif">
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt">Financial Instruments not measured at Fair Value:
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following financial assets and liabilities are held at carrying amount on the consolidated
balance sheet as of October 2, 2011:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 0px solid #000000">Carrying</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 0px solid #000000">Estimated</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">(Dollars in Millions)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Amount</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Fair Value</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Financial Assets</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Current Investments</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Cash
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">2,314</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,314</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Government securities and obligations
</div></td>
<td> </td>
<td> </td>
<td align="right">25,380</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">25,381</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Corporate debt securities
</div></td>
<td> </td>
<td> </td>
<td align="right">612</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">612</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Money market funds
</div></td>
<td> </td>
<td> </td>
<td align="right">1,550</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,550</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Time deposits
</div></td>
<td> </td>
<td> </td>
<td align="right">1,071</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,071</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total cash, cash equivalents and current marketable securities
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">30,927</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">30,928</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Fair value of government securities and obligations and
corporate debt securities was estimated
using quoted broker prices in active markets.
</div></td>
<td> </td>
<td> </td>
<td align="right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Financial Liabilities</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Current Debt</b>
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">5,326</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,326</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Non-Current Debt</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">0.70% Notes due 2013
</div></td>
<td> </td>
<td> </td>
<td align="right">500</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">502</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">3.80% Debentures due 2013
</div></td>
<td> </td>
<td> </td>
<td align="right">500</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">526</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">3 month LIBOR+0% FRN due 2013
</div></td>
<td> </td>
<td> </td>
<td align="right">500</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">500</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">3 month LIBOR+0.09% FRN due 2014
</div></td>
<td> </td>
<td> </td>
<td align="right">750</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">750</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">1.20% Notes due 2014
</div></td>
<td> </td>
<td> </td>
<td align="right">999</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,015</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">2.15% Notes due 2016
</div></td>
<td> </td>
<td> </td>
<td align="right">898</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">933</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">5.55% Debentures due 2017
</div></td>
<td> </td>
<td> </td>
<td align="right">1,000</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,214</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">5.15% Debentures due 2018
</div></td>
<td> </td>
<td> </td>
<td align="right">898</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,081</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">4.75% Notes due 2019 (1B Euro 1.3634)
</div></td>
<td> </td>
<td> </td>
<td align="right">1,356</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,560</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">3% Zero Coupon Convertible Subordinated Debentures due in 2020
</div></td>
<td> </td>
<td> </td>
<td align="right">199</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">232</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">2.95% Debentures due 2020
</div></td>
<td> </td>
<td> </td>
<td align="right">541</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">567</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">3.55% Notes due 2021
</div></td>
<td> </td>
<td> </td>
<td align="right">446</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">496</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">6.73% Debentures due 2023
</div></td>
<td> </td>
<td> </td>
<td align="right">250</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">358</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">5.50% Notes due 2024 (500 GBP1.5672)
</div></td>
<td> </td>
<td> </td>
<td align="right">778</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">927</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">6.95% Notes due 2029
</div></td>
<td> </td>
<td> </td>
<td align="right">294</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">426</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">4.95% Debentures due 2033
</div></td>
<td> </td>
<td> </td>
<td align="right">500</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">582</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">5.95% Notes due 2037
</div></td>
<td> </td>
<td> </td>
<td align="right">995</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,318</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">5.86% Debentures due 2038
</div></td>
<td> </td>
<td> </td>
<td align="right">700</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">925</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">4.50% Debentures due 2040
</div></td>
<td> </td>
<td> </td>
<td align="right">539</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">601</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">4.85% Notes due 2041
</div></td>
<td> </td>
<td> </td>
<td align="right">298</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">351</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Other
</div></td>
<td> </td>
<td> </td>
<td align="right">90</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">90</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total Non-Current Debt
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">13,031</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">14,954</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note Table: JNJ-20111002_note6_table1 - us-gaap:ScheduleOfNetBenefitCostsTableTextBlock-->
<div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif">
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt">Components of Net Periodic Benefit Cost
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Net periodic benefit cost for the Company’s defined benefit retirement plans and other benefit
plans for the fiscal third quarters of 2011 and 2010 include the following components:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000">Retirement Plans</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 0px solid #000000">Other Benefit Plans</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14" style="border-bottom: 0px solid #000000">Fiscal Third Quarters Ended</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">October 2,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">October 3,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">October 2,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">October 3,</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 0px solid #000000">(Dollars in Millions)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2010</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2010</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Service cost
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">146</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">125</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">38</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">33</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Interest cost
</div></td>
<td> </td>
<td> </td>
<td align="right">214</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">198</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">47</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">52</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Expected return on plan assets
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(279</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(251</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Amortization of prior service cost/(credit)
</div></td>
<td> </td>
<td> </td>
<td align="right">3</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2 </td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Amortization of net transition obligation
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Recognized actuarial losses
</div></td>
<td> </td>
<td> </td>
<td align="right">97</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">59</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">11</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">12</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net periodic benefit cost
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">181</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">132</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">95</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">95</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Net periodic benefit cost for the Company’s defined benefit retirement plans and other benefit
plans for the fiscal nine months of 2011 and 2010 include the following components:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000">Retirement Plans</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 0px solid #000000">Other Benefit Plans</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14" style="border-bottom: 0px solid #000000">Fiscal Nine Months Ended</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">October 2,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">October 3,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">October 2,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">October 3,</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 0px solid #000000">(Dollars in Millions)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2010</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2010</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Service cost
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">433</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">372</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">112</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">100</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Interest cost
</div></td>
<td> </td>
<td> </td>
<td align="right">641</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">592</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">141</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">152</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Expected return on plan assets
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(834</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(751</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1 </td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Amortization of prior service cost/(credit)
</div></td>
<td> </td>
<td> </td>
<td align="right">7</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(4 </td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Amortization of net transition obligation
</div></td>
<td> </td>
<td> </td>
<td align="right">1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Recognized actuarial losses
</div></td>
<td> </td>
<td> </td>
<td align="right">291</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">176</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">34</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">37</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net periodic benefit cost
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">539</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">397</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">284</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">284</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note Table: JNJ-20111002_note7_table1 - us-gaap:ScheduleOfAccumulatedOtherComprehensiveIncomeLossTableTextBlock-->
<div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif">
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="40%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Total</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Accum</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Other</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Foreign</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Securities</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Employee</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Deriv.</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Comp.</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">Gains/(Losses)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Currency</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Available</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Benefit</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">&</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Income/</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">(Dollars in Millions)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Translation</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">for sale</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Plans</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Hedges</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">(Loss)</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">January 2, 2011
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(969</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">24</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,686</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">100</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,531 </td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">2011 nine months change
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Unrealized gain (loss)
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">327</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(105 </td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Net amount reclassed to net earnings
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(142</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">185 </td>
<td nowrap="nowrap">*</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net nine months change
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">185</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">201</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">80</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">463</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">October 2, 2011
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(972</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">209</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,485</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">180</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,068 </td>
<td nowrap="nowrap">)</td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left">
<div style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000"> 
</div>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96%"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">*</td>
<td> </td>
<td>Substantially offset in net earnings by changes in value of the underlying transactions.</td>
</tr>
</table>
</div>
</div>
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<!-- Begin Block Tagged Note Table: JNJ-20111002_note8_table1 - us-gaap:ScheduleOfEarningsPerShareReconciliationTableTextBlock-->
<div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif">
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following is a reconciliation of basic net earnings per share to diluted net earnings per share
for the fiscal third quarters ended October 2, 2011 and October 3, 2010:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000">Fiscal Third Quarters Ended</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">October 2,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">October 3,</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 0px solid #000000">(Shares in Millions)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2010</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Basic net earnings per share
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1.17</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1.24</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Average shares outstanding — basic
</div></td>
<td> </td>
<td> </td>
<td align="right">2,737.0</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,751.6</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Potential shares exercisable under stock option plans
</div></td>
<td> </td>
<td> </td>
<td align="right">165.0</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">149.6</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Less: shares which could be repurchased under treasury stock method
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(127.4</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(118.4 </td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Convertible debt shares
</div></td>
<td> </td>
<td> </td>
<td align="right">3.6</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3.6</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Average shares outstanding — diluted
</div></td>
<td> </td>
<td> </td>
<td align="right">2,778.2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,786.4</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Diluted earnings per share
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1.15</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1.23</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note Table: JNJ-20111002_note8_table2 - jnj:ScheduleOfEarningsPerShareReconciliationTableTextBlock-->
<div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif">
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following is a reconciliation of basic net earnings per share to diluted net earnings per share
for the fiscal nine months ended October 2, 2011 and October 3, 2010:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000">Fiscal Nine Months Ended</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">October 2,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">October 3,</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">(Shares in Millions)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2010</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Basic net earnings per share
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">3.45</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">4.14</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Average shares outstanding — basic
</div></td>
<td> </td>
<td> </td>
<td align="right">2,738.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,754.2</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Potential shares exercisable under stock option plans
</div></td>
<td> </td>
<td> </td>
<td align="right">164.7</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">149.9</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Less: shares which could be repurchased under treasury stock method
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(129.2</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(115.7 </td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Convertible debt shares
</div></td>
<td> </td>
<td> </td>
<td align="right">3.6</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3.6</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Average shares outstanding — diluted
</div></td>
<td> </td>
<td> </td>
<td align="right">2,777.6</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,792.0</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Diluted earnings per share
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">3.40</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">4.08</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
</div>
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<!-- Begin Block Tagged Note Table: JNJ-20111002_note9_table1 - jnj:SalesBySegmentOfBusinessTableTextBlock-->
<div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif">
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt">SALES BY SEGMENT OF BUSINESS
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="64%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 0px solid #000000">Fiscal Third Quarters Ended</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">October 2,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">October 3,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Percent</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">(Dollars in Millions)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2010</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Change</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Consumer
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">United States
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,219</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,277</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(4.5 </td>
<td nowrap="nowrap">)%</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">International
</div></td>
<td> </td>
<td> </td>
<td align="right">2,521</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,290</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">10.1</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td> </td>
<td align="right">3,740</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,567</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4.9</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Pharmaceutical
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">United States
</div></td>
<td> </td>
<td> </td>
<td align="right">2,869</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,054</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(6.1 </td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">International
</div></td>
<td> </td>
<td> </td>
<td align="right">3,113</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,441</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">27.5</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td> </td>
<td align="right">5,982</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,495</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">8.9</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Medical Devices & Diagnostics
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">United States
</div></td>
<td> </td>
<td> </td>
<td align="right">2,780</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,800</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(0.7 </td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">International
</div></td>
<td> </td>
<td> </td>
<td align="right">3,503</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,120</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">12.3</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td> </td>
<td align="right">6,283</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,920</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6.1</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Worldwide
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">United States
</div></td>
<td> </td>
<td> </td>
<td align="right">6,868</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7,131</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3.7 </td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">International
</div></td>
<td> </td>
<td> </td>
<td align="right">9,137</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7,851</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">16.4</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">16,005</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">14,982</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">6.8</td>
<td nowrap="nowrap">%</td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
</div>
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<div align="right" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif">
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="64%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 0px solid #000000">Fiscal Nine Months Ended</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">October 2,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">October 3,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Percent</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">(Dollars in Millions)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2010</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Change</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Consumer
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">United States
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">3,903</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">4,300</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(9.2 </td>
<td nowrap="nowrap">)%</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">International
</div></td>
<td> </td>
<td> </td>
<td align="right">7,312</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,680</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">9.5</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td> </td>
<td align="right">11,215</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">10,980</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2.1</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Pharmaceutical
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">United States
</div></td>
<td> </td>
<td> </td>
<td align="right">9,499</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">9,370</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1.4</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">International
</div></td>
<td> </td>
<td> </td>
<td align="right">8,775</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7,316</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">19.9</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td> </td>
<td align="right">18,274</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">16,686</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">9.5</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Medical Devices & Diagnostics
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">United States
</div></td>
<td> </td>
<td> </td>
<td align="right">8,521</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">8,551</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(0.4 </td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">International
</div></td>
<td> </td>
<td> </td>
<td align="right">10,765</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">9,726</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">10.7</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td> </td>
<td align="right">19,286</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">18,277</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5.5</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Worldwide
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">United States
</div></td>
<td> </td>
<td> </td>
<td align="right">21,923</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">22,221</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1.3 </td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">International
</div></td>
<td> </td>
<td> </td>
<td align="right">26,852</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">23,722</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">13.2</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">48,775</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">45,943</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">6.2</td>
<td nowrap="nowrap">%</td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note Table: JNJ-20111002_note9_table3 - us-gaap:ScheduleOfSegmentReportingInformationBySegmentTextBlock-->
<div align="right" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif">
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt">OPERATING PROFIT BY SEGMENT OF BUSINESS
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="64%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 0px solid #000000">Fiscal Third Quarters Ended</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">October 2,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">October 3,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Percent</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">(Dollars in Millions)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2010</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Change</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Consumer
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">644</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">501</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">28.5</td>
<td nowrap="nowrap">%</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Pharmaceutical
</div></td>
<td> </td>
<td> </td>
<td align="right">2,078</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,858</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">11.8</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Medical Devices & Diagnostics
</div></td>
<td> </td>
<td> </td>
<td align="right">1,927</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,002</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3.7 </td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Segments operating profit
</div></td>
<td> </td>
<td> </td>
<td align="right">4,649</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,361</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6.6</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Expense not allocated to segments (3)
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(538</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(142 </td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Worldwide income before taxes
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">4,111</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">4,219</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2.6 </td>
<td nowrap="nowrap">)%</td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="64%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 0px solid #000000">Fiscal Nine Months Ended</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">October 2,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">October 3,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Percent</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">(Dollars in Millions)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2010</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Change</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Consumer
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,766</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,955</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(9.7 </td>
<td nowrap="nowrap">)%</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Pharmaceutical (1)
</div></td>
<td> </td>
<td> </td>
<td align="right">6,001</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,661</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6.0</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Medical Devices & Diagnostics (2)
</div></td>
<td> </td>
<td> </td>
<td align="right">5,146</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7,580</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(32.1 </td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Segments operating profit
</div></td>
<td> </td>
<td> </td>
<td align="right">12,913</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">15,196</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(15.0 </td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Expense not allocated to segments (3)
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(870</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(477</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Worldwide income before taxes
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">12,043</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">14,719</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(18.2 </td>
<td nowrap="nowrap">)%</td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left">
<div style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000"> 
</div>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96%"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(1)</td>
<td> </td>
<td>Includes litigation expense of $540 million and a gain related to the Company’s earlier
investment in Crucell recorded in the fiscal nine months of 2011. The fiscal nine months of
2010 includes net litigation expense of $202 million.</td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(2)</td>
<td> </td>
<td>Includes restructuring expense of $676 million recorded in the fiscal nine months of
2011. Includes litigation expense and additional DePuy ASR™ Hip recall costs of $223
million recorded in the fiscal nine months of 2011. Includes net litigation income of
$1,542 million recorded in the fiscal nine months of 2010.</td>
</tr>
</table>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96%"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(3)</td>
<td> </td>
<td>Amounts not allocated to segments include interest income/(expense), non-controlling
interests and general corporate income/(expense).</td>
</tr>
</table>
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note Table: JNJ-20111002_note9_table4 - jnj:SaleByGeographicAreaTableTextBlock-->
<div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif">
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt">SALES BY GEOGRAPHIC AREA
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="64%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 0px solid #000000">Fiscal Third Quarters Ended</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">October 2,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">October 3,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Percent</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">(Dollars in Millions)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2010</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Change</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">United States
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">6,868</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">7,131</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3.7 </td>
<td nowrap="nowrap">)%</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Europe
</div></td>
<td> </td>
<td> </td>
<td align="right">4,124</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,629</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">13.6</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Western Hemisphere, excluding U.S.
</div></td>
<td> </td>
<td> </td>
<td align="right">1,751</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,424</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">23.0</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Asia-Pacific, Africa
</div></td>
<td> </td>
<td> </td>
<td align="right">3,262</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,798</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">16.6</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">16,005</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">14,982</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">6.8</td>
<td nowrap="nowrap">%</td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="64%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 0px solid #000000">Fiscal Nine Months Ended</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">October 2,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">October 3,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Percent</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">(Dollars in Millions)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2010</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Change</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">United States
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">21,923</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">22,221</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1.3</td>
<td nowrap="nowrap">)%</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Europe
</div></td>
<td> </td>
<td> </td>
<td align="right">12,850</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">11,563</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">11.1</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Western Hemisphere, excluding U.S.
</div></td>
<td> </td>
<td> </td>
<td align="right">4,730</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,079</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">16.0</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Asia-Pacific, Africa
</div></td>
<td> </td>
<td> </td>
<td align="right">9,272</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">8,080</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">14.8</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">48,775</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">45,943</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">6.2</td>
<td nowrap="nowrap">%</td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note Table: JNJ-20111002_note12_table1 - us-gaap:ScheduleOfRestructuringReserveByTypeOfCostTextBlock-->
<div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif">
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="88%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">(Dollars in Millions)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Severance</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td colspan="5" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Reserve balance as of:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">January 2, 2011
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">345</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Cash outlays
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(87 </td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">October 2, 2011*
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">258</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left">
<div style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000"> 
</div>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96%"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">*</td>
<td> </td>
<td>Remaining cash outlays for severance are expected to be paid out in
accordance with the Company’s plans and local laws.</td>
</tr>
</table>
</div>
</div>
false
--01-01
Q3
2011
2011-10-02
10-Q
0000200406
2730849018
Yes
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