Cautions Concerning Forward-looking Statements

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2 Cautions Concerning Forward-looking Statements These presentations contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995 regarding, among other things, future operating and financial performance, product development, market position and business strategy. The viewer is cautioned not to rely on these forward-looking statements. These statements are based on current expectations of future events. If underlying assumptions prove inaccurate or known or unknown risks or uncertainties materialize, actual results could vary materially from the expectations and projections of Johnson & Johnson. Risks and uncertainties include, but are not limited to: challenges and uncertainties inherent in new product development, including uncertainty of clinical success and decisions of regulatory authorities regarding approval, labeling and other matters that could affect the availability or commercial potential of product candidates; uncertainty of commercial success for new and existing products; the ability of the company to successfully execute strategic plans, including restructuring plans; competition, including technological advances, new products and patents attained by competitors; impact of business combinations and divestitures; challenges to patents; changes to applicable laws and regulations, including global health care reforms; trends toward health care cost containment; changes in behavior and spending patterns or financial distress of purchasers of health care products and services; product efficacy or safety concerns resulting in product recalls or regulatory action; manufacturing difficulties or delays; significant adverse litigation or government action, including related to product liability claims; financial instability of international economies and legal systems; and increased scrutiny of the health care industry by government agencies. A further list and description of these risks, uncertainties and other factors can be found in Johnson & Johnson s Annual Report on Form 10-K for the fiscal year ended January 3, 2016, including in Exhibit 99 thereto, and the company s subsequent filings with the Securities and Exchange Commission. Copies of these filings are available online at or on request from Johnson & Johnson. Any forward-looking statement made in these presentations speaks only as of the date of these presentations. Johnson & Johnson does not undertake to update any forward-looking statement as a result of new information or future events or developments. 2

3 Notice Regarding Non-GAAP Statements These presentations may refer to certain non-gaap financial measures. These non-gaap financial measures should not be considered replacements for, and should be read together with, the most comparable GAAP financial measures. A reconciliation of certain of these non-gaap financial measures to the most directly comparable GAAP financial measures can be found in the Investor Relations section of the Company s website at Note: Operational sales growth excludes translational currency impact and is a non-gaap financial measure. Notice Regarding Trademarks Third-party trademarks used herein are trademarks of their respective owners. 3

4 Strategic Partnerships, Collaborations and Licensing Arrangements During the course of this morning s presentations, we will discuss a number of products developed in collaboration with strategic partners or licensed from other companies. Following is an acknowledgement of those relationships. Diabetes Care Orthopaedics Surgery Consumer INVOKANA licensed from Mitsubishi Tanabe Pharma Corporation; ANIMAS VIBE in partnership with Dexcom; ONETOUCH VERIO FLEX uses Bluetooth MONOVISC and ORTHOVISC licensed from Anika Therapeutics, Inc.; Kick 2D Surgical Navigation co-developed with Brainlab AG; Various products in connection with the Cooperation Agreement with the AO Foundation; TRUMATCH developed in collaboration with imorphics Ltd and Materialise; CARTO software in partnership with Siemens SURGIFLO research collaboration with Ferrosan Medical Devices A/S ZYRTEC licensed from UCB Inc. and its affiliates; RHINOCORT licensed from AstraZeneca AB 4

5 Alex Gorsky Chairman Chief Executive Officer 5

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7 Our Unique Perspective into the Health Care Market Evolving Health Care Systems and Reimbursement Models Unique Geographic Needs Patient-Centered Health Care Decisions 7

8 Our Broad-base Advantages Strong, Consistent, and Sustainable Financial Performance Access to growth opportunities across health care markets Strategic partner of choice Partnerships with local governments and public health organizations Broader offerings of products, solutions and partnership opportunities Convergent and cross-category product platforms Enterprise efficiencies and capabilities 8

9 Enterprise Growth Drivers Leveraging the Power of Our Enterprise OUR GROWTH DRIVERS Creating Value Through Innovation Global Reach / Local Focus Excellence in Execution Leading with Purpose 9

10 Performance-driven Strategy Grow Sales Faster than the Market Grow Earnings Faster than Sales Create Value through Strategic Acquisitions and Partnerships Generate Strong Dividend Yield Compelling Long-term Total Shareholder Returns 10

11 Near-term Priorities Enterprise Delivering on our financial and quality commitments Pharmaceutical Consumer Medical Devices Continuing to build on our launch excellence and robust pipeline Expanding market leadership in key segments within OTC, Oral Care, Baby and Skin Care Accelerating growth through innovation and transforming our go-to-market models 11

12 Pharmaceutical Industry-leading Pipeline & Commercial Excellence Priority: continue building on our launch excellence and robust pipeline Strategy: focus on five therapeutic areas of high unmet medical need, robust innovation and commercial capabilities Plan for Growth: file 10 new products between 2015 and 2019, each with a billion dollar potential in annual sales, as well as more than 40 line extensions 12

13 Consumer Iconic Brands & Unparalleled Consumer Insights Priority: expand market leadership in key segments of OTC, oral care, baby and skin care Strategy: focus on critical geographies and our iconic mega-brands Plan for Growth: recapture share, grow sales faster than our competitors and enhance our financial metrics 13

14 Our Medical Device Businesses 2015 Medical Devices Segment Sales: $25.1 Billion 82% 18% Consumer Medical Devices $4.5B Hospital Medical Devices $20.6B Hospital Medical Devices: Surgery Orthopaedics CV and Specialty Solutions Consumer Medical Devices: Diabetes Care Vision Care 14

15 Medical Devices Comprehensive Portfolio & Accelerated Growth Strategy Priority: accelerate growth through innovation and transform our go-to-market models Strategy: drive growth in priority platforms and geographies through innovation and launch excellence, novel commercial models and investing in areas of significant unmet needs Plan for Growth: increase pace of innovation, streamline operations, and leverage breadth and scale 15

16 Our Unique Approach to Innovation ROBUST PRODUCT PIPELINES Patients and Consumers INNOVATION ECOSYSTEM GEOGRAPHIC- SPECIFIC SOLUTIONS UNIQUE BUSINESS MODELS 16

17 Driving Growth Through Internal & External Innovation Sales and Adjusted EPS Investments in Innovation 20 yrs. thru 2015 ~8% Sales 3 CAGR 2015 ~$115B Internal 1 ~$ 85B External 1995 ~10% Adj. EPS 2 CAGR ~$200B Total 1. Includes licensing 24 Brands / Platforms $1B in sales 2. Non-GAAP measure; excludes intangible amortization expense, special items and the impact of translational currency 3. Operational sales excludes the impact of translational currency 17

18 Johnson & Johnson Enterprise Investment in R&D Research and Development Expense $ US Billions $7.5 $7.7 $8.2 $8.5 $

19 Johnson & Johnson Innovation Ecosystem INNOVATION CENTERS 4 locations on 3 continents: Boston, London, San Francisco, Shanghai ~200 investments from Engagement across sectors JLABS 6 sites in North America: Boston, San Diego, San Francisco (2), Texas, Toronto 140+ companies in residence 50% of portfolio in discussions 27 progressed to deals Engagement across all segments JJDC 40+ years of VC investing ~100 investments and ~$1B invested Partnering with Innovation Centers to form new companies 19

20 Well-positioned for Above-market Growth Our broad-base uniquely positions Johnson & Johnson as a leader and partner of choice in the evolving health care market We re optimistic about the future and confident in the strength of our business Our holistic approach to innovation goes beyond products and solutions to drive better outcomes and deliver long-term value 20

21 Leaders Presenting Today Sandra E. Peterson Jorge Mesquita Ashley McEvoy Gary J. Pruden Executive Vice President, Group Worldwide Chairman Executive Vice President, Worldwide Chairman, Consumer Company Group Chairman, Vision Care and Diabetes Care Companies Executive Vice President, Worldwide Chairman, Medical Devices 21

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