Chairman's Letter

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To Our Shareholders

As I began to compose this letter, I realized how quickly my first year has passed as Chief Executive Officer of Johnson & Johnson. It has been a year with many rewarding moments, as well as some challenges. Though a year of transition, we made solid progress on many fronts, including building out strategic platforms, while establishing exciting new ones.

I am honored to be just the seventh CEO in our long history. This legacy of leadership is a tribute to the success and stability of Johnson & Johnson, and to the belief in the importance of our purpose held in common with us by our shareholders over so many decades. Personally, I am truly humbled to lead the incredibly talented and dedicated people who work for Johnson & Johnson.

One challenge all of us in the world today face together is health and health care. This is true in both developed and emerging markets. When combined with the rapidly changing demographics of an aging population, a growing middle class and the persistence of chronic disease, the scale and complexity of the issue is magnified. It is my belief that providing high-quality health care to patients and consumers around the world in a sustainable manner is society’s greatest challenge. But it is also the greatest hope for a better future for every individual, every family, every community and every country.

Johnson & Johnson works at the very center of this challenge, across the broadest base of any company in global health care. Every day, we are working to help people everywhere live longer, healthier, and happier lives. We recognize that with our global leadership comes a responsibility; one we consider a privilege. I’m pleased with how we are meeting that responsibility, but I’m far from satisfied.

The passing last fall of former CEO James Burke reminded us all that the simple set of beliefs defined in Our Credo can guide our Company through all the challenges and complexities of these or any time. My overarching goal as CEO is to ensure that our nearly 128,000 employees in more than 275 operating companies around the world will always be united by Our Credo and our single purpose: Caring for the world, one person at a time.


That purpose was at work here in New Jersey, the home state of Johnson & Johnson, when Hurricane Sandy roared through so many communities last year. Immediately partnering with the American Red Cross, Save the Children, AmeriCares and other disaster-assistance groups, Johnson & Johnson was able to help provide aid and relief. We provided more than 20,000 first-aid kits that were used by emergency responders. We provided the blankets that warmed families in shelters. We were there with more than $5 million in funding, responding to the governors of three states in this region. Most importantly, our people were there in their own communities. Immediately and without hesitation, they were on the front lines of response and relief efforts wherever and however they could.

It is this example of caring by individuals that inspires caring in the whole community, and reminds me of how firmly and fundamentally compassion is woven into the fabric of our culture. This legacy of caring continues as we renew our commitment to philanthropy and citizenship all over the world. We will look to go beyond relief and rebuilding, and explore programs that will make communities more resilient and prepare them to endure any kind of disaster, be it natural or economic.


Our solid business results in 2012 were achieved while continuing to deliver meaningful innovation in health care to patients and customers.

  • We generated significant cash flow and maintained our AAA credit rating. Importantly, we continued our track record of consistent performance, with 29 straight years of adjusted earnings* increases and 50 consecutive years of dividend increases. Johnson & Johnson is one of only six companies in the Standard & Poor’s 100 Index to achieve that record.
  • In our Pharmaceuticals business segment, our results included strong growth of key products and successful new launches. As a result of our continuing commitment to research and development, collaboration and innovation, we expect to maintain strong momentum. We continue to make important investments in building strategic partnerships and advancing our pipeline, positioning us well to deliver sustainable growth in 2013 and beyond.
  • The addition of Synthes, Inc. to our family of companies marked the largest acquisition in our history and, combined with DePuy, creates the world’s largest, most comprehensive orthopaedics and neurologics business, the DePuy Synthes Companies. We will continue the exciting integration of Synthes into our Medical Devices and Diagnostics business segment in the coming year.
  • In our Consumer business segment, we continued restoring a reliable supply of our McNeil over-the-counter medicines. The work to bring our plants fully online is progressing. We expect to return a consistent supply of key products to the market over the course of 2013. We are definitely making good progress; however, we must move from good to great this year.

More details on the progress of our three business segments can be found in the Business Segment Highlights section of this Annual Report.


Within the context of Our Credo and strategic framework there are specific areas of focus for Johnson & Johnson—our Growth Drivers—that will help ensure robust growth for the future.

  • First is our commitment to innovation to create value; not just innovation in products and services, but in everything we do and everywhere we operate. We need a constant flow of new ideas and different approaches to meet the challenges and opportunities of the future.
  • Second, our global reach must be brought to life with a local focus. That puts critical decision-making where the needs are and where our global resources live. We believe our commitment to decentralized management provides a competitive advantage in all of our businesses and all of our markets.
  • Third, we will have a laser focus on excellence in execution. Across our enterprise, we have built greater accountability for quality into the requirements for all of our leaders. This has strengthened quality and compliance at the enterprise level by taking specific steps to reduce variation and increase governance. We’ve redefined standards and processes in our supply chain to, most importantly, improve the level of execution, and to deliver efficiencies that can free resources for investment.
  • Fourth, we will continue to foster a purpose-driven organization and develop leadership at every level of our Company. This is essential for us to deliver on the responsibilities that come along with our global leadership.


Our broad base in health care gives us a unique perspective on the needs, fears, frustrations and hopes of consumers, patients, their families and health professionals worldwide. I believe that a healthier world is not just a happier world, but also one that has much greater economic stability and provides a foundation for individual and societal advancement. I’m very proud of the progress we have made toward our purpose of caring for the world, one person at a time. But all of us are keenly aware of the gaps that still exist in the world.

For example, there is a gap in access to basic health care. Whether because of a lack of trained professionals, inadequate infrastructure or cultural obstacles, addressing this gap is a key long-term goal for us as the leader in global health care.

There is a gap in adequate mental health care services. This has come to public attention in glaring examples of recent tragedies in the United States. Again, this gap may be a result of a lack of trained professionals or the stigma that too often prevents people from seeking help.

There is a gap in preventive medicine that often focuses societies on “sick care” rather than health care. This is a particular focus for me, and for all of us at Johnson & Johnson, not only because of the depth of the problem, but also because of the scope of the opportunity.

Can we close these gaps? We are committed to convening a dialogue that recognizes and addresses these significant gaps in caring. We will work with communities and local partners around the world to take meaningful action to improve people’s lives. That’s a global challenge we aim to address. Working together we can… and we must.


The challenges we face in this ever-changing health care landscape will require time, vigilance and dedication to solve. All of us here at Johnson & Johnson realize we are on a journey. Every day, though, I am inspired by yet another story of how we have delivered on Our Credo.

This year we’ve created a fully interactive, digital, online annual report where you can find our
Stories of Caring. Here are a few examples to give you an idea of the breadth of this mosaic:

  • Asha is a mother raising children in Bangladesh, where reliable health information can sometimes be hard to find. After struggling with the health of her first child, Asha is now better prepared to take care of her new daughter thanks to vital health messages delivered by text to her mobile phone. Johnson & Johnson and BabyCenter® are founding partners in a unique collaboration to improve the lives of pregnant women, new mothers and their families in developing countries.
  • For Bill, reaching his 80th birthday was more than a milestone. After a diagnosis of prostate cancer several years ago and a series of treatments, he didn’t know what would lie ahead. Now he’s on ZYTIGA® (abiraterone acetate), and he’s spending cherished time with the people he loves—and truly celebrating that 80th birthday.
  • Braydon is a normal teenager in many ways. He loves to hang out with his friends, play golf, do work with his dad. All this despite being born with severe scoliosis that caused his spine to curve, fused his ribs and threatened to leave him wheelchair-bound and unable to breathe without help. Thanks to the innovative VEPTR® procedure, from DePuy Synthes Spine, Braydon can go about living life to the fullest.

You can find these and other Stories of Caring, as well as much more, at I hope you’ll like these stories so much that you’ll decide to share them, and our digital annual report, with family and friends.


Our leadership in health care has been made possible by the belief in our mission that you share with us. I am committed to continuing the proud tradition of Johnson & Johnson as a purpose-led organization, calling on the great range and diversity of our worldwide talent and capabilities. We will further dedicate ourselves every day to the responsibilities defined in Our Credo, the first being our responsibility to “the doctors, nurses and patients, the mothers and fathers and all who use our products” every day. We’ll also continue our commitment to our employees, and to the communities in which we operate and proudly call home. And to you, our valued shareholders, who have placed your confidence and trust in us.

This is our legacy at Johnson & Johnson. At last year’s annual shareholder meeting, I described myself as a realistic optimist, and despite our challenges, I firmly believe there is no company better positioned to be recognized as the world’s leader in health care.


Alex Gorsky
Chairman, Board of Directors, and Chief Executive Officer
March 13, 2013


* Excludes special items