Johnson & Johnson (JNJ) 8-K Results of Operations and Financial Condition

Johnson & Johnson and Subsidiaries
Condensed Consolidated Statement of Earnings
(Unaudited; in Millions Except Per Share Figures)	FIRST QUARTER
	2008			2007			Percent
			Percent			Percent	Increase
	Amount		to Sales	Amount		to Sales	(Decrease)
Sales to customers	$      16,194		100.0	$   15,037		100.0	7.7
Cost of products sold	4,614		28.5	4,385		29.1	5.2
Selling, marketing and administrative expenses	5,123		31.6	4,802		31.9	6.7
Research expense	1,712		10.6	1,652		11.0	3.6
In-process research & development	-		-	807		5.4
Interest (income)expense, net	16		0.1	(33)		(0.2)
Other (income)expense, net	(18)		(0.1)	(228)		(1.5)
Earnings before provision for taxes on income	4,747		29.3	3,652		24.3	30.0
Provision for taxes on income	1,149		7.1	1,079		7.2	6.5
Net earnings	$        3,598		22.2	$     2,573		17.1	39.8
Net earnings per share  (Diluted)	$          1.26			$       0.88			43.2
Average shares outstanding  (Diluted)	2,866.3			2,924.3
Effective tax rate	24.2	%		29.5	%
Adjusted earnings before provision for taxes and net earnings(A)
Earnings before provision for taxes on income	$        4,747		29.3	$     4,459	(1)	29.7	6.5
Net earnings	$        3,598		22.2	$     3,380	(1)	22.5	6.4
Net earnings per share  (Diluted)	$          1.26			$       1.16	(1)		8.6
Effective tax rate	24.2	%		24.2	%
(1) The difference between as reported earnings and as adjusted earnings before provision for taxes, net earnings and earnings per share (diluted) is
the exclusion of  IPR&D of $807 million with no tax benefit and $0.28 per share, respectively.

(A) NON-GAAP FINANCIAL MEASURES "Adjusted earnings before provision for taxes on income," "adjusted net earnings," "adjusted net earnings per share (diluted)," and "adjusted effective tax rate" are non-GAAP financial measures and should not be considered replacements for GAAP results. The Company provides earnings before provision for taxes on income, net earnings, net earnings per share (diluted), and effective tax rate on an adjusted basis because management believes that these measures provide useful information to investors. Among other things, they may assist investors in evaluating the Company's results of operations period over period. In various periods, these measures may exclude such items as business development activities (including IPR&D at acquisition or upon attainment of milestones and any extraordinary expenses), strategic developments (including restructuring and product line changes), significant litigation, and changes in applicable laws and regulations (including significant accounting or tax matters). Special items may be highly variable, difficult to predict, and of a size that sometimes has substantial impact on the Company's reported results of operations for a period. Management uses these measures internally for planning, forecasting and evaluating the performances of the Company's businesses, including allocating resources and evaluating results relative to employee performance compensation targets.  Unlike earnings before provision for taxes on income, net earnings, net earnings per share (diluted), and effective tax rate prepared in accordance with GAAP, adjusted earnings before provision for taxes on income, adjusted net earnings, adjusted net earnings per share (diluted), and adjusted effective tax rate may not be comparable with the calculation of similar measures for other companies. These non-GAAP financial measures are presented solely to permit investors to more fully understand how management assesses the performance of the Company. The limitations of using these non-GAAP financial measures as performance measures are that they provide a view of the Company's results of operations without including all events during a period, such as the effects of an acquisition, merger-related or other restructuring charges, or amortization of purchased intangibles, and do not provide a comparable view of the Company's performance to other companies in the health care industry. Investors should consider non-GAAP financial measures in addition to, and not as replacements for, or superior to, measures of financial performance prepared in accordance with GAAP.

Johnson & Johnson and Subsidiaries
Supplementary Sales Data
(Unaudited; Dollars in Millions)	FIRST QUARTER
			Percent Change
	2008	2007	Total		Operations	Currency
Sales to customers by
segment of business
Consumer
U.S.	$  1,819	1,629	11.7	%	11.7	-
International	2,245	1,867	20.2		8.3	11.9
	4,064	3,496	16.2		9.9	6.3
Pharmaceutical
U.S.	4,070	4,034	0.9		0.9	-
International	2,359	2,187	7.9		(3.1)	11.0
	6,429	6,221	3.3		(0.6)	3.9
Med Devices & Diagnostics
U.S.	2,588	2,584	0.2		0.2	-
International	3,113	2,736	13.8		2.6	11.2
	5,701	5,320	7.2		1.4	5.8
U.S.	8,477	8,247	2.8		2.8	-
International	7,717	6,790	13.7		2.4	11.3
Worldwide	$16,194	15,037	7.7	%	2.6	5.1

Johnson & Johnson and Subsidiaries
Supplementary Sales Data
(Unaudited; Dollars in Millions)	FIRST QUARTER
			Percent Change
	2008	2007	Total		Operations	Currency
Sales to customers by
geographic area
U.S.	$  8,477	8,247	2.8	%	2.8	-
Europe	4,308	3,812	13.0		0.8	12.2
Western Hemisphere excluding U.S.	1,245	1,046	19.0		6.2	12.8
Asia-Pacific, Africa	2,164	1,932	12.0		3.2	8.8
International	7,717	6,790	13.7		2.4	11.3
Worldwide	$16,194	15,037	7.7	%	2.6	5.1

REPORTED SALES vs. PRIOR PERIOD

$MM

	FIRST QUARTER
								% Change
	2008		2007		Reported			Operational (1)			Currency
PHARMACEUTICAL SEGMENT  (2) (3)
ACIPHEX/PARIET
US		116		159		-27.0	%		-27.0	%		-
Intl		161		177		-9.0	%		-19.4	%		10.4	%
WW		277		336		-17.6	%		-23.1	%		5.5	%
CONCERTA
US		224		200		12.0	%		12.0	%		-
Intl		66		52		26.9	%		14.8	%		12.1	%
WW		290		252		15.1	%		12.6	%		2.5	%
DURAGESIC/FENTANYL TRANSDERMAL
US		75		116		-35.3	%		-35.3	%		-
Intl		158		187		-15.5	%		-24.2	%		8.7	%
WW		233		303		-23.1	%		-28.5	%		5.4	%
LEVAQUIN/FLOXIN
US		474		459		3.3	%		3.3	%		-
Intl		22		20		10.0	%		4.0	%		6.0	%
WW		496		479		3.5	%		3.3	%		0.2	%
PROCRIT/EXPREX
US		334		530		-37.0	%		-37.0	%		-
Intl		295		287		2.8	%		-9.3	%		12.1	%
WW		629		817		-23.0	%		-27.2	%		4.2	%
RAZADYNE/REMINYL
US		50		51		-2.0	%		-2.0	%		-
Intl		99		77		28.6	%		13.6	%		15.0	%
WW		149		128		16.4	%		7.4	%		9.0	%
REMICADE
US		676		600		12.7	%		12.7	%		-
US Exports (4)		320		131		144.3	%		144.3	%		-
Intl		2		0		436.0	%		410.7	%		25.3	%
WW		998		731		36.5	%		36.5	%		-
RISPERDAL
US		582		559		4.1	%		4.1	%		-
Intl		227		308		-26.3	%		-33.6	%		7.3	%
WW		809		867		-6.7	%		-9.3	%		2.6	%
RISPERDAL CONSTA
US		101		101		0.0	%		0.0	%		-
Intl		208		160		30.0	%		15.8	%		14.2	%
WW		309		261		18.4	%		9.7	%		8.7	%
TOPAMAX
US		520		501		3.8	%		3.8	%		-
Intl		126		109		15.6	%		4.2	%		11.4	%
WW		646		610		5.9	%		3.9	%		2.0	%
VELCADE
US		2		2		0.0	%		0.0	%		-
Intl		182		111		64.0	%		49.9	%		14.1	%
WW		184		113		62.8	%		48.9	%		13.9	%
OTHER
US		596		625		-4.6	%		-4.6	%		-
Intl		813		699		16.3	%		2.8	%		13.5	%
WW		1,409		1,324		6.4	%		-0.7	%		7.1	%
TOTAL PHARMACEUTICAL
US		4,070		4,034		0.9	%		0.9	%		-
Intl		2,359		2,187		7.9	%		-3.1	%		11.0	%
WW		6,429		6,221		3.3	%		-0.6	%		3.9	%
(1) Operational growth excludes the effect of currency
(2) Select areas (unaudited)
(3) Prior year amounts have been reclassified to conform with current presentation
(4) For external purposes, reported as U.S. sales
REPORTED SALES vs. PRIOR PERIOD $MM
	FIRST QUARTER
								% Change
	2008		2007		Reported			Operational (1)			Currency
MEDICAL DEVICES AND DIAGNOSTICS   (2) (3)
CORDIS (4)
US		357		424		-15.8	%		-15.8	%		-
Intl		478		504		-5.2	%		-14.7	%		9.5	%
WW		835		928		-10.0	%		-15.2	%		5.2	%
DEPUY
US		694		678		2.4	%		2.4	%		-
Intl		559		479		16.7	%		5.6	%		11.1	%
WW		1,253		1,157		8.3	%		3.7	%		4.6	%
DIABETES CARE
US		303		292		3.8	%		3.8	%		-
Intl		312		257		21.4	%		8.0	%		13.4	%
WW		615		549		12.0	%		5.7	%		6.3	%
ETHICON (5)
US		341		345		-1.2	%		-1.2	%		-
Intl		604		529		14.2	%		2.9	%		11.3	%
WW		945		874		8.1	%		1.3	%		6.8	%
ETHICON ENDO-SURGERY
US		429		417		2.9	%		2.9	%		-
Intl		574		474		21.1	%		8.9	%		12.2	%
WW		1,003		891		12.6	%		6.1	%		6.5	%
ORTHO-CLINICAL DIAGNOSTICS (5)
US		238		233		2.1	%		2.1	%		-
Intl		205		175		17.1	%		5.2	%		11.9	%
WW		443		408		8.6	%		3.5	%		5.1	%
VISION CARE
US		226		195		15.9	%		15.9	%		-
Intl		381		318		19.8	%		9.2	%		10.6	%
WW		607		513		18.3	%		11.7	%		6.6	%
TOTAL MEDICAL DEVICES AND DIAGNOSTICS
US		2,588		2,584		0.2	%		0.2	%		-
Intl		3,113		2,736		13.8	%		2.6	%		11.2	%
WW		5,701		5,320		7.2	%		1.4	%		5.8	%
(1) Operational growth excludes the effect of currency
(2) Select areas (unaudited)
(3) Prior year amounts have been reclassified to conform with current presentation
(4) Includes sale of Cypher for Q1 2008 of $169, $231 and $400 million Domestic, International and Worldwide respectively
Includes sale of Cypher for Q1 2007 of $236, $292 and $528 million Domestic, International and Worldwide respectively
(5) Restated to include portion of sales previously reported in the "Other" category

REPORTED SALES vs. PRIOR PERIOD $MM
	FIRST QUARTER
					% Change
	2008		2007		Reported			Operational (1)			Currency
CONSUMER SEGMENT (2)
SKIN CARE
US		382		357		7.0	%		7.0	%		-
Intl		458		407		12.5	%		1.5	%		11.0	%
WW		840		764		9.9	%		4.0	%		5.9	%
BABY CARE
US		115		109		5.5	%		5.5	%		-
Intl		418		338		23.7	%		12.9	%		10.8	%
WW		533		447		19.2	%		11.1	%		8.1	%
ORAL CARE
US		199		203		-2.0	%		-2.0	%		-
Intl		187		156		19.9	%		9.4	%		10.5	%
WW		386		359		7.5	%		2.9	%		4.6	%
OTC/NUTRITIONALS
US		842		655		28.5	%		28.5	%		-
Intl		752		602		24.9	%		11.8	%		13.1	%
WW		1,594		1,257		26.8	%		20.5	%		6.3	%
WOMEN'S HEALTH
US		148		163		-9.2	%		-9.2	%		-
Intl		313		258		21.3	%		8.8	%		12.5	%
WW		461		421		9.5	%		1.8	%		7.7	%
WOUND CARE / OTHER
US		133		142		-6.3	%		-6.3	%		-
Intl		117		106		10.4	%		-1.4	%		11.8	%
WW		250		248		0.8	%		-4.2	%		5.0	%
TOTAL CONSUMER
US		1,819		1,629		11.7	%		11.7	%		-
Intl		2,245		1,867		20.2	%		8.3	%		11.9	%
WW		4,064		3,496		16.2	%		9.9	%		6.3	%
(1) Operational growth excludes the effect of currency
(2) Select areas (unaudited)