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<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
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<div style="font-family: Helvetica,Arial,sans-serif">
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<div align="left">
</div>
<div align="center" style="font-size: 10pt; margin-top: 0pt"><b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>1. Summary of Significant Accounting Policies</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>PRINCIPLES OF CONSOLIDATION</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The consolidated financial statements include the accounts of Johnson & Johnson and
subsidiaries (the “Company”). Inter-company accounts and transactions are eliminated.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>DESCRIPTION OF THE COMPANY AND BUSINESS SEGMENTS</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company has approximately 115,500 employees worldwide engaged in the research and
development, manufacture and sale of a broad range of products in the health care field. The
Company conducts business in virtually all countries of the world and its primary focus is on
products related to human health and well-being.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company is organized into three business segments: Consumer, Pharmaceutical and Medical
Devices and Diagnostics. The Consumer segment manufactures and markets a broad range of products
used in the baby care, skin care, oral care, wound care and women’s health care fields, as well as
nutritional and over-the-counter pharmaceutical products. These products are marketed to the
general public and sold both to retail outlets and distributors throughout the world. The
Pharmaceutical segment includes products in the following therapeutic areas: anti-infective,
antipsychotic, cardiovascular, contraceptive, dermatology, gastrointestinal, hematology,
immunology, neurology, oncology, pain management, urology and virology. These products are
distributed directly to retailers, wholesalers and health care professionals for prescription use.
The Medical Devices and Diagnostics segment includes a broad range of products used principally in
the professional fields by physicians, nurses, therapists, hospitals, diagnostic laboratories and
clinics. These products include Cordis’ circulatory disease management products; DePuy’s
orthopaedic joint reconstruction, spinal care and sports medicine products; Ethicon’s surgical
care, aesthetics and women’s health products; Ethicon Endo-Surgery’s minimally invasive surgical
products; LifeScan’s blood glucose monitoring and insulin delivery products; Ortho-Clinical
Diagnostics’ professional diagnostic products and Vistakon’s disposable contact lenses.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>NEW ACCOUNTING PRONOUNCEMENTS
RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">During the fiscal fourth quarter of 2009, in accordance with U.S. GAAP, the Company adopted the
authoritative guidance for employers’ disclosures about postretirement benefit plan assets to
enhance the disclosure regarding the types of assets and associated risks in an employer’s defined
benefit pension or other postretirement plan, as well as, events in the economy and markets that
could have a significant effect on the value of the plan assets. The adoption of this standard did
not have a material impact on the Company’s results of operations, cash flows or financial
position. See Note 10 for enhanced disclosures.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     During the fiscal third quarter of 2009, the Company adopted <i>The FASB Accounting Standards Codification</i><sup style="font-size: 85%; vertical-align: text-top"><i>TM </i></sup><i>(ASC or Codification) and the
Hierarchy of Generally Accepted Accounting Principles (GAAP) </i>which establishes the Codification as
the sole source for authoritative U.S. GAAP and will supersede all accounting standards in U.S.
GAAP, aside from those issued by the SEC. The adoption of the Codification did not have an impact
on the Company’s results of operations, cash flows or financial position. Since the adoption of the
Accounting Standards Codification (ASC) the Company’s notes to the consolidated financial
statements will no longer make reference to Statement of Financial Accounting Standards (SFAS) or
other U.S. GAAP pronouncements.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     During the fiscal second quarter of 2009, in accordance with U.S. GAAP, the Company adopted
the standards on subsequent events. This pronouncement establishes standards of accounting for and
disclosure of events that occur after the balance sheet date but before financial statements are
issued. See Note 23 for related disclosure.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     During the fiscal first quarter of 2009, in accordance with U.S. GAAP, the Company adopted the
standards on business combinations and non-controlling interests in Consolidated Financial
Statements. These standards aim to improve, simplify, and converge internationally, the accounting
for business combinations and the reporting of non-controlling interests in consolidated financial
statements. These standards have an impact on the manner in which the Company accounts for
acquisitions beginning in the fiscal year 2009. Significant changes include the capitalization of
purchased in-process research and development (IPR&D), expensing of acquisition related
restructuring actions and transaction related costs and the recognition of contingent purchase
price consideration at fair value at the acquisition date. In addition, changes in accounting for
deferred tax asset valuation allowances and acquired income tax uncertainties after the measurement
period will be recognized in earnings rather than as an adjustment to the cost of acquisition. This
accounting treatment for taxes is applicable to acquisitions that occurred both prior and
subsequent to the adoption of the standard. Operating profit attributable to non-controlling
interests is reported in Other (Income) Expense, net and the related tax impact to the Provision
for Taxes. Additionally, equity attributable to non-controlling interests is recorded in Other
Non-Current liabilities. Non-controlling interests as related to the Company’s financial statements
are immaterial and therefore, not separately disclosed.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     During the fiscal first quarter of 2009, in accordance with U.S. GAAP, the Company adopted the
standard related to disclosures about derivative instruments and hedging activities, which enhanced
the disclosure regarding the Company’s derivative and hedging activities. The adoption of this
standard did not have a material impact on the Company’s results of operations, cash flows or
financial position. See Note 6 for enhanced disclosures.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     During the fiscal first quarter of 2009, in accordance with U.S. GAAP, the Company adopted the
standard on collaborative arrangements related to the development and commercialization of
intellectual property. This standard addresses the income statement classification of payments made
between parties in a collaborative arrangement. The impact of the adoption of this standard related
to all collaboration agreements that existed as of January 3, 2010 and December 28, 2008 was
immaterial to the Company’s results of operations, cash flows or financial position.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     During the fiscal first quarter of 2009, in accordance with U.S. GAAP, the Company adopted the
standard related to defensive intangible assets. This standard applies to acquired intangible
assets in situations in which an entity does not intend to actively use the asset but intends to
hold the asset to prevent others from obtaining access to the asset, except for intangible assets
that are used in research and development activities. 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 align="left" style="font-size: 10pt; margin-top: 12pt"><b>RECENTLY ISSUED ACCOUNTING STANDARDS, NOT ADOPTED AS OF JANUARY 3, 2010</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The FASB issued guidance and amendments to the criteria for separating consideration in
multiple-deliverable revenue arrangements.
</div>
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</div>
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<div style="font-family: Helvetica,Arial,sans-serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The guidance and amendments are expected to: (a) provide principles and application guidance on
whether multiple deliverables exist, how the arrangement should be separated, and the consideration
allocated; (b) require an entity to allocate revenue in an arrangement using estimated selling
prices of deliverables if a vendor does not have vendor-specific objective evidence or third-party
evidence of selling price; and (c) eliminate the use of the residual method and require an entity
to allocate the revenue using the relative selling price method. The guidance significantly expands
the disclosure requirements for multiple-deliverable revenue arrangements. This guidance is
effective prospectively for revenue arrangements entered into or materially modified in fiscal
years beginning on or after June 15, 2010. Early adoption is permitted. The Company adopted this
guidance in the first fiscal quarter of 2010. The adoption will not have a material impact on the
Company’s results of operations, cash flows or financial position; however, it will expand the
disclosures for such arrangements.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The FASB issued a standard to improve financial reporting by enterprises involved with
variable interest entities. This statement is effective for the Company beginning with the fiscal
year 2010. Earlier application is prohibited. The adoption of this standard will not have a
material impact on the Company’s results of operations, cash flows or financial position.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>CASH EQUIVALENTS</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company considers securities with maturities of three months or less, when purchased, to be
cash equivalents.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>INVESTMENTS</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Short-term marketable securities are carried at cost, which approximates fair value.
Investments classified as available-for-sale are carried at estimated fair value with unrealized
gains and losses recorded as a component of accumulated other comprehensive income. Long-term debt
securities that the Company has the ability and intent to hold until maturity are carried at
amortized cost. Management determines the appropriate classification of its investment in debt and
equity securities at the time of purchase and re-evaluates such determination at each balance sheet
date. The Company periodically reviews its investments in equity securities for impairment and
adjusts these investments to their fair value when a decline in market value is deemed to be other
than temporary. If losses on these securities are considered to be other than temporary, the loss
is recognized in earnings.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>PROPERTY, PLANT AND EQUIPMENT AND DEPRECIATION</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Property, plant and equipment are stated at cost. The Company utilizes the straight-line method
of depreciation over the estimated useful lives of the assets:
</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>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Building and building equipment
</div></td>
<td> </td>
<td colspan="3" valign="top" align="right" nowrap="nowrap">20-40 years</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Land and leasehold improvements
</div></td>
<td> </td>
<td colspan="3" valign="top" align="right" nowrap="nowrap">10-20 years</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Machinery and equipment
</div></td>
<td> </td>
<td colspan="3" valign="top" align="right" nowrap="nowrap">2-13 years</td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company capitalizes certain computer software and development costs, included in machinery and
equipment, when incurred in connection with developing or obtaining computer software for internal
use. Capitalized software costs are amortized over the estimated useful lives of the software,
which generally range from 3 to 8 years.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company reviews long-lived assets to assess recoverability using undiscounted cash flows.
When certain events or changes in operating or economic conditions occur, an impairment assessment
may be performed on the recoverability of the carrying value of these assets. If the asset is
determined to be impaired, the loss is measured based on the difference between the asset’s fair
value and its carrying value. If quoted market prices are not available, the Company will estimate
fair value using a discounted value of estimated future cash flows.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>REVENUE RECOGNITION</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company recognizes revenue from product sales when the goods are shipped or delivered and
title and risk of loss pass to the customer. Provisions for certain rebates, sales incentives,
trade promotions, coupons, product returns and discounts to customers are accounted for as
reductions in sales in the same period the related sales are recorded.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Product discounts granted are based on the terms of arrangements with direct, indirect and
other market participants, as well as market conditions, including prices charged by competitors.
Rebates, the largest being the Medicaid rebate provision, are estimated based on contractual terms,
historical experience, trend analysis and projected market conditions in the various markets
served. The Company evaluates market conditions for products or groups of products primarily
through the analysis of wholesaler and other third-party sell-through and market research data, as
well as internally generated information.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Sales returns are generally estimated and recorded based on historical sales and returns
information. Products that exhibit unusual sales or return patterns due to dating, competition or
other marketing matters are specifically investigated and analyzed as part of the accounting for
sales return accruals. Sales returns allowances represent a reserve for products that may be
returned due to expiration, destruction in the field, or in specific areas, product recall. The
returns reserve is based on historical return trends by product and by market as a percent to gross
sales. In accordance with the Company’s accounting policies, the Company generally issues credit to
customers for returned goods. The Company’s sales return reserves are accounted for in accordance
with U.S. GAAP guidance regarding revenue recognition when right of return exists. Sales return
reserves are recorded at full sales value. Sales returns in the Consumer and Pharmaceutical
segments are almost exclusively not resalable. Sales returns for certain franchises in the Medical
Devices and Diagnostics segment are typically resalable but are not material. The Company rarely
exchanges products from inventory for returned products. The sales returns reserve for the total
Company has ranged between 1.1% and 1.2% of annual net trade sales during the prior three fiscal
reporting years 2007-2009.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Promotional programs, such as product listing allowances and cooperative advertising
arrangements, are recorded in the year incurred. Continuing promotional programs include coupons
and volume-based sales incentive programs. The redemption cost of consumer coupons is based on
historical redemption experience by product and value. Volume-based incentive programs are based on
the estimated sales volumes for the incentive period and are recorded as products are sold. The
Company also earns service revenue for co-promotion of certain products and includes it in sales to
customers. These arrangements are evaluated to determine the appropriate amounts to be deferred.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>SHIPPING AND HANDLING</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Shipping and handling costs incurred were $964 million, $1,017 million and $934 million in
2009, 2008 and 2007, respectively, and are included in selling, marketing and administrative
expense. The amount of revenue received for shipping and handling is less than 0.5% of sales to
customers for all periods presented.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>INVENTORIES</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Inventories are stated at the lower of cost or market determined by the first-in, first-out
method.
</div>
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</div>
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<div style="font-family: Helvetica,Arial,sans-serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>INTANGIBLE ASSETS AND GOODWILL</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The authoritative literature on U.S. GAAP requires that goodwill and intangible assets with
indefinite lives be assessed annually for impairment. The Company completed the annual impairment
test for 2009 in the fiscal fourth quarter and no impairment was determined. Future impairment
tests will be performed annually in the fiscal fourth quarter, or sooner if a triggering event
occurs.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Intangible assets that have finite useful lives continue to be amortized over their useful
lives, and are reviewed for impairment when warranted by economic conditions. See Note 5 for
further details on Intangible Assets and Goodwill.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>FINANCIAL INSTRUMENTS</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">As required by U.S. GAAP 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 Company documents all relationships between hedged items and derivatives. The overall risk
management strategy includes reasons for undertaking hedge transactions and entering into
derivatives. The objectives of this strategy are: (1) minimize foreign currency exposure’s impact
on the Company’s financial performance; (2) protect the Company’s cash flow from adverse movements
in foreign exchange rates; (3) ensure the appropriateness of financial instruments; and (4) manage
the enterprise risk associated with financial institutions. See Note 6 for additional information
on Financial Instruments.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>PRODUCT LIABILITY</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Accruals for product liability claims are recorded, on an undis-counted basis, when it is
probable that a liability has been incurred and the amount of the liability can be reasonably
estimated based on existing information. The accruals are adjusted periodically as additional
information becomes available. As a result of cost and availability factors, effective November 1,
2005, the Company ceased purchasing third-party product liability insurance. Based on the
availability of prior coverage, receivables for insurance recoveries related to product liability
claims are recorded on an undiscounted basis, when it is probable that a recovery will be realized.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>RESEARCH AND DEVELOPMENT</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Research and development expenses are expensed as incurred. Upfront and milestone payments made
to third-parties in connection with research and development collaborations are expensed as
incurred up to the point of regulatory approval. Payments made to third-parties subsequent to
regulatory approval are capitalized and amortized over the remaining useful life of the related
product. Amounts capitalized for such payments are included in other intangibles, net of
accumulated amortization.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company enters into collaborative arrangements, typically with other pharmaceutical or
biotechnology companies, to develop and commercialize drug candidates or intellectual property.
These arrangements typically involve two (or more) parties who are active participants in the
collaboration and are exposed to significant risks and rewards dependent on the commercial success
of the activities. These collaborations usually involve various activities by one or more parties,
including research and development, marketing and selling and distribution. Often, these
collaborations require upfront, milestone and royalty or profit share payments, contingent upon the
occurrence of certain future events linked to the success of the asset in development. Amounts due
from collaborative partners related to development activities are generally reflected as a
reduction of research and development expense because the performance of contract development
services is not central to the Company’s operations. In general, the income statement presentation
for these collaborations is 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="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"><b>Nature/Type of Collaboration</b></td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Statement of Earnings Presentation</b></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">
<td>
<div style="margin-left:15px; text-indent:-15px">Third-party sale of product
</div></td>
<td> </td>
<td colspan="3" align="right">Sales to customers</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Royalties/milestones paid to collaborative partner (post-regulatory approval)*
</div></td>
<td> </td>
<td colspan="3" align="right">Cost of goods sold</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Royalties received from collaborative partner
</div></td>
<td> </td>
<td colspan="3" align="right">Other income (expense), net</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Upfront payments & milestones paid to collaborative partner (pre-regulatory approval)
</div></td>
<td> </td>
<td colspan="3" align="right">Research expense</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Research and development payments to collaborative partner
</div></td>
<td> </td>
<td colspan="3" align="right">Research expense</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Research and development payments received from collaborative partner
</div></td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="right">Reduction of Research expense</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="1%"></td>
<td width="1%"></td>
<td width="98"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><i>*</i></td>
<td> </td>
<td><i>Milestones are capitalized as intangible assets and amortized to cost of goods sold over the useful life.</i></td>
</tr>
</table>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>ADVERTISING</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Costs associated with advertising are expensed in the year incurred and are included in the
selling, marketing and administrative expenses. Advertising expenses worldwide, which are comprised
of television, radio, print media and Internet advertising, were $2.4 billion in 2009, $2.9 billion
in 2008 and $2.7 billion in 2007.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>INCOME TAXES</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company intends to continue to reinvest its undistributed international earnings to expand
its international operations; therefore, no U.S. tax expense has been recorded with respect to the
undistributed portion not intended for repatriation. At January 3, 2010 and December 28, 2008, the
cumulative amount of undistributed international earnings were approximately $32.2 billion and
$27.7 billion, respectively.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Deferred income taxes are recognized for tax consequences of temporary differences by applying
enacted statutory tax rates, applicable to future years, to differences between the financial
reporting and the tax basis of existing assets and liabilities.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>NET EARNINGS PER SHARE</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Basic earnings per share is computed by dividing net earnings available to common shareholders
by the weighted average number of common shares outstanding for the period. Diluted earnings per
share reflects the potential dilution that could occur if securities were exercised or converted
into common stock using the treasury stock method.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>USE OF ESTIMATES</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The preparation of consolidated financial statements in conformity with accounting principles
generally accepted in the U.S. requires management to make estimates and assumptions that affect
the amounts reported. Estimates are used when accounting for sales discounts, rebates, allowances
and incentives, product liabilities, income taxes, depreciation, amortization, employee benefits,
contingencies and intangible asset and liability valuations. For instance, in determining annual
pension and post-employment benefit
costs, the Company estimates the rate of return on plan assets, and the cost of future health care
benefits. Actual results may or may not differ from those estimates.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: Helvetica,Arial,sans-serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>ANNUAL CLOSING DATE</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company follows the concept of a fiscal year, which ends on the Sunday nearest to the end
of the month of December. Normally each fiscal year consists of 52 weeks, but every five or six
years the fiscal year consists of 53 weeks, as was the case in 2009 and will be the case again in
2014.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>RECLASSIFICATION</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Certain prior period amounts have been reclassified to conform to current year presentation.
</div>
</div>
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<div style="font-family: Helvetica,Arial,sans-serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>2. Cash, Cash Equivalents and Current Marketable Securities</b>
</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="10" style="border-bottom: 1px solid #000000"><b>January 3, 2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 1px solid #000000"><b>December 28, 2008</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Amortized</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Unrealized</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Estimated</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Amortized</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Unrealized</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Estimated</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left"><b>(Dollars in Millions)</b></td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Cost</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Gains/(Losses)</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Fair Value</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Cost</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Gains/(Losses)</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Fair Value</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="23" 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"><b>Current Investments</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 style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="23" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Cash
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">2,517</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,517</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,276</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,276</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Government securities and obligations
</div></td>
<td> </td>
<td> </td>
<td align="right">13,370</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">13,371</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7,486</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7,490</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Corporate debt securities
</div></td>
<td> </td>
<td> </td>
<td align="right">426</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">426</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">627</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">628</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Money market funds
</div></td>
<td> </td>
<td> </td>
<td align="right">1,890</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,890</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">813</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">813</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Time deposits
</div></td>
<td> </td>
<td> </td>
<td align="right">1,222</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,222</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">607</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">607</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="23" 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">Total cash, cash equivalents and
current marketable securities
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>19,425</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>1</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>19,426</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>12,809</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>5</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>12,814</b></td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="23" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">As of January 3, 2010, current marketable securities consist of $3,434 million and $181 million
of government securities and obligations and corporate debt securities, respectively.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     As of December 28, 2008, current marketable securities consist of $1,663 million, $342 million
and $36 million of government securities and obligations, corporate debt securities and time
deposits, respectively.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Fair value of government securities and obligations and corporate debt securities were
estimated using quoted broker prices in active markets.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company invests its excess cash in both deposits with major banks throughout the world and
other high-quality money market instruments. The Company has a policy of making investments only
with commercial institutions that have at least an A (or equivalent) credit rating.
</div>
</div>
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<!-- Begin Block Tagged Note 3 - us-gaap:InventoryDisclosureTextBlock-->
<div style="font-family: Helvetica,Arial,sans-serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>3. Inventories</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">At the end of 2009 and 2008, inventories were comprised of:
</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 nowrap="nowrap" align="left"><b>(Dollars in Millions)</b></td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2008</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="7" 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">Raw materials and supplies
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,144</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">839</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">1,395</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,372</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">2,641</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,841</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="7" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>5,180</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>5,052</b></td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="7" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
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<div style="font-family: Helvetica,Arial,sans-serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>4. Property, Plant and Equipment</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">At the end of 2009 and 2008, property, plant and equipment at cost and accumulated depreciation
were:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left"><b>(Dollars in Millions)</b></td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2008</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="7" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Land and land improvements
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">714</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">886</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Buildings and building equipment
</div></td>
<td> </td>
<td> </td>
<td align="right">8,863</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7,720</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Machinery and equipment
</div></td>
<td> </td>
<td> </td>
<td align="right">17,153</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">15,234</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Construction in progress
</div></td>
<td> </td>
<td> </td>
<td align="right">2,521</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,552</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="7" 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"> 
</div></td>
<td> </td>
<td> </td>
<td align="right">29,251</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">27,392</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Less accumulated depreciation
</div></td>
<td> </td>
<td> </td>
<td align="right">14,492</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">13,027</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="7" 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"> 
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>14,759</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>14,365</b></td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="7" align="left" style="border-top: 0px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company capitalizes interest expense as part of the cost of construction of facilities and
equipment. Interest expense capitalized in 2009, 2008 and 2007 was $101 million, $147 million and
$130 million, respectively.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Depreciation expense, including the amortization of capitalized interest in 2009, 2008 and
2007, was $2.1 billion, $2.0 billion and $1.9 billion, respectively.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Upon retirement or other disposal of property, plant and equipment, the costs and related
amounts of accumulated depreciation or amortization are eliminated from the asset and accumulated
depreciation accounts, respectively. The difference, if any, between the net asset value and the
proceeds are recorded in earnings.
</div>
</div>
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<div style="font-family: Helvetica,Arial,sans-serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>5. Intangible Assets and Goodwill</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt">At the end of 2009 and 2008, the gross and net amounts of intangible assets were:
</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 nowrap="nowrap" align="left"><b>(Dollars in Millions)</b></td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2008</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="7" 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"><b>Intangible assets with definite lives:</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">Patents and trademarks — gross
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">5,697</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,119</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">2,177</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,820</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="7" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Patents and trademarks — net
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>3,520</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>3,299</b></td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="7" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Other intangibles — gross
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">7,808</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7,376</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">2,680</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,433</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="7" 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">Other intangibles — net
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>5,128</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>4,943</b></td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="7" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total intangible assets with definite lives — gross
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">13,505</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">12,495</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">4,857</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,253</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="7" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total intangible assets with definite lives — net
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>8,648</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>8,242</b></td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="7" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Intangible assets with indefinite lives:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Trademarks
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">5,938</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,734</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Purchased in-process research and development*
</div></td>
<td> </td>
<td> </td>
<td align="right">1,737</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="7" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total intangible assets with indefinite lives
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>7,675</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>5,734</b></td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="7" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total intangible assets — net
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>16,323</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>13,976</b></td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="7" align="left" style="border-top: 3px double #000000"> </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="1%"></td>
<td width="1%"></td>
<td width="98"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><i>*</i></td>
<td> </td>
<td><i>Purchased in-process research and development will be accounted for as an indefinite-lived intangible asset until the underlying project is completed or abandoned.</i></td>
</tr>
</table>
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</div>
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<div style="font-family: Helvetica,Arial,sans-serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Goodwill as of January 3, 2010 and December 28, 2008, as allocated by segment of business is 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="right" colspan="2"><b>Med Dev</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left"><b>(Dollars in Millions)</b></td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Consumer</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Pharm</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>and Diag</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Total</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="15" 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">Goodwill at December 30, 2007
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">8,125</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">964</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,034</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">14,123</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="15" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Acquisitions
</div></td>
<td> </td>
<td> </td>
<td align="right">191</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">286</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">477</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Currency translation/other
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(842</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(38</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(881</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="15" nowrap="nowrap" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Goodwill at December 28, 2008
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">7,474</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">963</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,282</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">13,719</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="15" 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">Acquisitions
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">271</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">401</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">672</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Currency translation/other*
</div></td>
<td> </td>
<td> </td>
<td align="right">600</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">10</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(139</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">471</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="15" 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">Goodwill at January 3, 2010
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>8,074</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>1,244</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>5,544</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>14,862</b></td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="15" align="left" style="border-top: 0px double #000000"> </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="1%"></td>
<td width="1%"></td>
<td width="98"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><i>*</i></td>
<td> </td>
<td><i>Includes reclassification between segments.</i></td>
</tr>
</table>
<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 28 years, respectively. The amortization expense of amortizable assets for
the fiscal years ended January 3, 2010, December 28, 2008 and December 30, 2007 was $675 million,
$788 million and $844 million before tax, respectively. Certain patents and intangible assets were
written down to fair value during fiscal years 2009, 2008 and 2007, with the resulting charge
included in amortization expense.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The estimated amortization expense for the five succeeding years approximates $700 million
before tax, per year. Substantially all of the amortization expense is included in cost of products
sold.
</div>
</div>
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<div style="font-family: Helvetica,Arial,sans-serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>6. Fair Value Measurements</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">During the fiscal first quarter of 2009, in accordance with U.S. GAAP the Company adopted the
standard related to disclosures about derivative instruments and hedging activities. This standard
requires qualitative disclosures about objectives and strategies for using
derivatives, quantitative disclosures about fair value amounts of gain and losses on derivative
instruments, and disclosures about credit-risk-related contingent features in derivative
agreements.
</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 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 January 3, 2010, the Company had notional amounts outstanding for
forward foreign exchange contracts and cross currency interest rate swaps of $21 billion and $4
billion, respectively.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     As required by U.S. GAAP for derivative instruments and hedging activities, all derivative
instruments are to be 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 into 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) and expense, net,
and was insignificant for the fiscal year ended January 3, 2010 and December 28, 2008. Refer to
Note 13 for disclosures of movements in Accumulated Other Comprehensive Income.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     As of January 3, 2010, the balance of deferred net gains on derivatives included in
accumulated other comprehensive income was $145 million after-tax. For additional information, see
Note 13. The Company expects that substantially all of the amount 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 for the fiscal year ended January 3, 2010
related to designated derivatives as defined in the Codification:
</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> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Gain/(Loss)</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Gain/(Loss)</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Gain/(Loss)</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>reclassed from</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>recognized</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>recognized in</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Accumulated</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>in Other</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left"><b>Cash Flow Hedges</b></td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Accumulated</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>OCI into</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Income/</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left"><b>(Dollars in Millions)</b></td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><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="right" colspan="2"><b>income</b><sup style="font-size: 85%; vertical-align: text-top"><b>(1)</b></sup></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Expense</b><sup style="font-size: 85%; vertical-align: text-top"><b>(2)</b></sup></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="11" 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">Foreign exchange contracts
</div></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">(47</td>
<td nowrap="nowrap">)<sup style="font-size: 85%; vertical-align: text-top">(A)</sup></td>
<td> </td>
<td> </td>
<td align="right">1</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">(173</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">70</td>
<td nowrap="nowrap"> <sup style="font-size: 85%; vertical-align: text-top">(B)</sup></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1</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">5</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">13</td>
<td nowrap="nowrap"> <sup style="font-size: 85%; vertical-align: text-top">(C)</sup></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Cross currency interest rate swaps
</div></td>
<td> </td>
<td> </td>
<td align="right">241</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(16</td>
<td nowrap="nowrap">)<sup style="font-size: 85%; vertical-align: text-top">(D)</sup></td>
<td> </td>
<td> </td>
<td align="right">—</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">28</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(6</td>
<td nowrap="nowrap">)<sup style="font-size: 85%; vertical-align: text-top">(E)</sup></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(12</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="11" nowrap="nowrap" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Total</b>
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>38</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>14</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(12</b></td>
<td nowrap="nowrap"><b>)</b></td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="11" nowrap="nowrap" align="left" style="border-top: 3px double #000000"> </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="1%"></td>
<td width="1%"></td>
<td width="98"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><sup style="font-size: 85%; vertical-align: text-top"><i>(1)</i></sup></td>
<td> </td>
<td><i>Effective portion</i></td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><sup style="font-size: 85%; vertical-align: text-top"><i>(2)</i></sup></td>
<td> </td>
<td><i>Ineffective portion</i></td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><sup style="font-size: 85%; vertical-align: text-top"><i>(A)</i></sup></td>
<td> </td>
<td><i>Included in Sales to customer</i></td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><sup style="font-size: 85%; vertical-align: text-top"><i>(B)</i></sup></td>
<td> </td>
<td><i>Included in Cost of products sold</i></td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><sup style="font-size: 85%; vertical-align: text-top"><i>(C)</i></sup></td>
<td> </td>
<td><i>Included in Research expense</i></td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><sup style="font-size: 85%; vertical-align: text-top"><i>(D)</i></sup></td>
<td> </td>
<td><i>Included in Interest (Income)/Interest Expense, net</i></td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><sup style="font-size: 85%; vertical-align: text-top"><i>(E)</i></sup></td>
<td> </td>
<td><i>Included in Other (Income)/Expense, net</i></td>
</tr>
</table>
<div align="left" style="font-size: 10pt; margin-top: 6pt">For the fiscal year ended January 3, 2010, a gain of $21 million was recognized in Other
(income)/expense, net, relating to foreign exchange contracts not designated as hedging instruments
under the Codification.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: Helvetica,Arial,sans-serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     During the fiscal first quarter of 2008, in accordance with U.S. GAAP, the Company
adopted the standard related to fair value measurements except for non-financial assets and
liabilities recognized or disclosed at fair value on a non-recurring basis, which became effective
during the first fiscal quarter of 2009. The effect of adoption on December 29, 2008 of this
standard for non-financial assets and liabilities recorded at fair value on a non-recurring basis
did not have a material impact on the Company’s financial position and results of operations. This
standard defines fair value, establishes a framework for measuring fair value and expands
disclosures about fair value measurements. During the fiscal first quarter of 2008, the Company
adopted the standard related to fair value option for financial assets and financial liabilities.
This standard permits the Company to measure certain financial assets and financial liabilities at
fair value. The Company assessed the fair value option made available upon adopting this standard,
and has elected not to apply the fair value option to any financial instruments that were not
already recognized at fair value.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     U.S. GAAP defines fair value as 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 should be 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 in the table 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, 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 differ 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.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company also holds equity investments which are classified as level 1 since they are
traded in an active exchange market.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">During 2009, the Company acquired substantially all of the
assets and rights of Elan’s Alzheimer’s Immunotherapy Program through a newly formed company,
JANSSEN Alzheimer Immunotherapy (JAI), of which the Company owns 50.1% and Elan owns 49.9%. In
addition, the Company purchased approximately 107 million newly issued American Depositary Receipts
(ADRs) of Elan, representing 18.4% of Elan’s outstanding ordinary shares. As part of this
transaction, the Company paid $885 million to Elan and committed to fund up to $250 million of
Elan’s share of research and development spending by JAI. Of this total consideration of $1,135
million, $793 million represents the fair value of the 18.4% investment in Elan based on Elan’s
share price in an actively traded market as of the date of this transaction. The IPR&D related to
this transaction was $679 million and is associated with bapineuzumab, a potential first-in-class
treatment that is being evaluated for slowing the progression of Alzheimer’s Disease. The value of
the IPR&D was calculated using cash flow projections discounted for the risk inherent in such
projects. Probability of success factors ranging from 40-50% were used to reflect inherent clinical
and regulatory risk. The discount rate applied was 26%. The non-controlling interest related to
this transaction was $590 million, which the Company has recorded in other non-current liabilities.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     During 2009, the Company entered into a strategic collaboration with Crucell N.V. which will
focus on the discovery, development and commercialization of monoclonal antibodies and vaccines for
the treatment and prevention of influenza and other infectious and non-infectious diseases. In
addition, the Company, through its affiliate, purchased approximately 18% of Crucell’s outstanding
ordinary shares for an aggregate purchase price of $448 million. Of the total consideration paid,
$329 million represents the fair value of the investment based on Crucell’s share price in an
actively traded market as of the date of the transaction with the excess recorded to research and
development expense in 2009.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     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 Company’s significant financial assets and liabilities measured at fair value as of January 3,
2010 and December 28, 2008 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="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 nowrap="nowrap" align="right" colspan="2"><b>Significant</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Quoted prices in</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>other</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Significant</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>active markets for</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>observable</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>unobservable</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>identical assets</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>inputs</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>inputs</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2008</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left"><b>(Dollars in Millions)</b></td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Level 1</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Level 2</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Level 3</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Total</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Total*</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="19" 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"><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:30px; text-indent:-15px">Foreign exchange contracts
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">436</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">436</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,238</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Cross currency interest rate swaps
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">126</td>
<td nowrap="nowrap">**</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">126</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">110</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="19" 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"><b>Total</b>
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>562</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>562</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>1,348</b></td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="19" align="left" style="border-top: 3px double #000000"> </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:30px; 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">608</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">608</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,298</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Cross currency interest rate swaps
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">571</td>
<td nowrap="nowrap">***</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">571</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,033</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="19" 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"><b>Total</b>
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>1,179</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>1,179</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>2,331</b></td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="19" align="left" style="border-top: 3px double #000000"> </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:30px; 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">33</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">33</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">84</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:30px; 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">40</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">40</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">47</td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</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>Other investments</b>
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,134</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">1,134</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">41</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="19" align="left" style="border-top: 0px double #000000"> </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="1%"></td>
<td width="1%"></td>
<td width="98"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><i>*</i></td>
<td> </td>
<td><i>2008 assets and liabilities are all classified as Level 2 with the exception of other investments of $41 million which are classified as Level 1.</i></td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><i>**</i></td>
<td> </td>
<td><i>Includes $119 million of non-current assets.</i></td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><i>***</i></td>
<td> </td>
<td><i>Includes $517 million of non-current liabilities.</i></td>
</tr>
</table>
<div align="left" style="font-size: 10pt; margin-top: 12pt">See Notes 2 and 7 for financial assets and liabilities held at
carrying amount on the Consolidated Balance Sheet.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: Helvetica,Arial,sans-serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</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 7 - us-gaap:LongTermDebtTextBlock-->
<div style="font-family: Helvetica,Arial,sans-serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>7. Borrowings</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The components of long-term debt are 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 nowrap="nowrap" align="right" colspan="2"><b>Effective</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Effective</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left"><b>(Dollars in Millions)</b></td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Rate %</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2008</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Rate %</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="15" 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">6.625% Notes due 2009
</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">199</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6.80</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">5.15% Debentures due 2012
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">599</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">5.18</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td> </td>
<td align="right">599</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5.18</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<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">3.82</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">500</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3.82</td>
<td> </td>
</tr>
<tr valign="bottom">
<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">5.55</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,000</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5.55</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<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">5.15</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">898</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5.15</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">4.75% Notes due 2019 (1B Euro 1.4382)<sup style="font-size: 85%; vertical-align: text-top">(2)</sup>/(1B Euro 1.4000)<sup style="font-size: 85%; vertical-align: text-top">(3)</sup>
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">1,429</td>
<td nowrap="nowrap"> <sup style="font-size: 85%; vertical-align: text-top">(2)</sup></td>
<td> </td>
<td> </td>
<td align="right">5.35</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">1,390</td>
<td nowrap="nowrap"> <sup style="font-size: 85%; vertical-align: text-top">(3)</sup></td>
<td> </td>
<td> </td>
<td align="right">5.35</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">3% Zero Coupon Convertible Subordinated Debentures due 2020
</div></td>
<td> </td>
<td> </td>
<td align="right">188</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3.00</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">183</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3.00</td>
<td> </td>
</tr>
<tr valign="bottom">
<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">6.73</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">250</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6.73</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">5.50% Notes due 2024 (500MM GBP1.6189)<sup style="font-size: 85%; vertical-align: text-top">(2)</sup>/(500MM GBP1.4759)<sup style="font-size: 85%; vertical-align: text-top">(3)</sup>
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">803</td>
<td nowrap="nowrap"> <sup style="font-size: 85%; vertical-align: text-top">(2)</sup></td>
<td> </td>
<td> </td>
<td align="right">5.71</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">731</td>
<td nowrap="nowrap"> <sup style="font-size: 85%; vertical-align: text-top">(3)</sup></td>
<td> </td>
<td> </td>
<td align="right">5.71</td>
<td> </td>
</tr>
<tr valign="bottom">
<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">7.14</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">294</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7.14</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">4.95% Debenture due 2033
</div></td>
<td> </td>
<td> </td>
<td align="right">500</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4.95</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">500</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4.95</td>
<td> </td>
</tr>
<tr valign="bottom">
<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">5.99</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">995</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5.99</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<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">5.86</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">700</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5.86</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Other (Includes Industrial Revenue Bonds)
</div></td>
<td> </td>
<td> </td>
<td align="right">101</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">102</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="15" 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"> 
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>8,257 </b></td>
<td nowrap="nowrap"><sup style="font-size: 85%; vertical-align: text-top"><b>(4)</b></sup></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>5.42 </b></td>
<td nowrap="nowrap"><sup style="font-size: 85%; vertical-align: text-top"><b>(1)</b></sup></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>8,341 </b></td>
<td nowrap="nowrap"><sup style="font-size: 85%; vertical-align: text-top"><b>(4)</b></sup></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>5.46 </b></td>
<td nowrap="nowrap"><sup style="font-size: 85%; vertical-align: text-top"><b>(1)</b></sup></td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Less current portion
</div></td>
<td> </td>
<td> </td>
<td align="right">34</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">221</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="15" 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"> 
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>8,223</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>8,120</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="15" align="left" style="border-top: 3px double #000000"> </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="1%"></td>
<td width="1%"></td>
<td width="98"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><sup style="font-size: 85%; vertical-align: text-top"><i>(1)</i></sup></td>
<td> </td>
<td><i>Weighted average effective rate.</i></td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><sup style="font-size: 85%; vertical-align: text-top"><i>(2)</i></sup></td>
<td> </td>
<td><i>Translation rate at January 3, 2010.</i></td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><sup style="font-size: 85%; vertical-align: text-top"><i>(3)</i></sup></td>
<td> </td>
<td><i>Translation rate at December 28, 2008.</i></td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><sup style="font-size: 85%; vertical-align: text-top"><i>(4)</i></sup></td>
<td> </td>
<td><i>The excess of the fair value over the carrying value of debt was $0.8 billion in 2009 and $1.4 billion in 2008.</i></td>
</tr>
</table>
<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>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company has access to substantial sources of funds at numerous banks worldwide. In
September 2009, the Company secured a new 364-day Credit Facility. Total credit available to the
Company approximates $10 billion which expires September 23, 2010. Interest charged on borrowings
under the credit line agreements is based on either bids provided by banks, the prime rate or
London Interbank Offered Rates (LIBOR), plus applicable margins. Commitment fees under the
agreements are not material.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     On July 28, 2000, ALZA Corporation, a subsidiary of the Company, completed a private offering
of the 3% Zero Coupon Convertible Subordinated Debentures, which were issued at a price of $551.26
per $1,000 principal amount at maturity. Under the terms of the 3% Debentures, holders are entitled
to convert their debentures into approximately 15.0 million shares of Johnson & Johnson stock at a
price of $40.102 per share. Approximately 11.4 million shares have been issued as of January 3,
2010, due to voluntary conversions by note holders. At the option of the holder, the 3% Debentures
may be repurchased by the Company on July 28, 2013, at a purchase price equal to the issue price
plus accreted original issue discount to such purchase date. The Company, at its option, may also
redeem any or all of the 3% Debentures after July 28, 2003 at the issue price plus accreted
original issue discount.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Throughout 2009 the Company continued to have access to liquidity through the commercial paper
market. Short-term borrowings and the current portion of long-term debt amounted to approximately
$6.3 billion at the end of 2009, of which $5.8 billion was borrowed under the Commercial Paper
Program. The remainder represents principally local borrowing by international subsidiaries.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company filed a shelf registration with the Securities and Exchange Commission that became
effective March 11, 2008 which enables the Company to issue an unlimited aggregate principal amount
in debt securities and warrants to purchase debt securities.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Aggregate maturities of long-term obligations commencing in 2009 are:
</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="7%"> </td>
<td width="5%"> </td>
<td width="7%"> </td>
<td width="5%"> </td>
<td width="7%"> </td>
<td width="5%"> </td>
<td width="7%"> </td>
<td width="5%"> </td>
<td width="7%"> </td>
<td width="5%"> </td>
<td width="7%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left"><b>(Dollars in Millions)</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center"><b>After</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="center"><b>2010</b></td>
<td> </td>
<td nowrap="nowrap" align="center"><b>2011</b></td>
<td> </td>
<td nowrap="nowrap" align="center"><b>2012</b></td>
<td> </td>
<td nowrap="nowrap" align="center"><b>2013</b></td>
<td> </td>
<td nowrap="nowrap" align="center"><b>2014</b></td>
<td> </td>
<td nowrap="nowrap" align="center"><b>2014</b></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td colspan="11" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td align="center">
<div style="margin-left:15px; text-indent:-15px">$34
</div></td>
<td> </td>
<td align="center" valign="top">35</td>
<td> </td>
<td align="center" valign="top">615</td>
<td> </td>
<td align="center" valign="top">507</td>
<td> </td>
<td align="center" valign="top">9</td>
<td> </td>
<td align="center" valign="top">7,057</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 8 - us-gaap:IncomeTaxDisclosureTextBlock-->
<div style="font-family: Helvetica,Arial,sans-serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>8. Income Taxes</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The provision for taxes on income consists of:
</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 nowrap="nowrap" align="left"><b>(Dollars in Millions)</b></td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2008</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2007</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="11" 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">Currently payable:
</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:30px; text-indent:-15px">U.S. taxes
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">2,410</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,334</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,990</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">International taxes
</div></td>
<td> </td>
<td> </td>
<td align="right">1,515</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,624</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,479</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="11" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td align="right">3,925</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,958</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,469</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="11" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</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" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Deferred:
</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:30px; text-indent:-15px">U.S. taxes
</div></td>
<td> </td>
<td> </td>
<td align="right">187</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">126</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(722</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">International taxes
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(623</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(104</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,040</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="11" nowrap="nowrap" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(436</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">22</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,762</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="11" nowrap="nowrap" 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"> 
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>3,489</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>3,980</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>2,707</b></td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="11" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">A comparison of income tax expense at the U.S. statutory rate of 35% in 2009, 2008 and 2007, to
the Company’s effective tax rate is as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="64%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left"><b>(Dollars in Millions)</b></td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2008</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2007</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="11" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">U.S.
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">7,141</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,579</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,237</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">International
</div></td>
<td> </td>
<td> </td>
<td align="right">8,614</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">10,350</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">8,046</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="11" 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">Earnings before taxes on income:
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">15,755</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">16,929</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">13,283</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="11" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Tax rates:
</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" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">U.S. statutory rate
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">35.0</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td> </td>
<td align="right">35.0</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">35.0</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Ireland and Puerto Rico operations
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(5.1</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(6.8</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(8.8</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Research and orphan drug tax credits
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(0.6</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(0.6</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(0.8</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">U.S. state and local
</div></td>
<td> </td>
<td> </td>
<td align="right">1.8</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1.6</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">International subsidiaries excluding Ireland
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(6.7</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(5.6</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(7.3</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">U.S. manufacturing deduction
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(0.4</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(0.4</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(0.3</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">In-process research and development (IPR&D)
</div></td>
<td> </td>
<td> </td>
<td align="right">0.0</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.4</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2.1</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">U.S. Tax international income
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1.6</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(0.5</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1.9</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">All other
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(0.3</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">0.4</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.3</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="11" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Effective tax rate
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">22.1</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td> </td>
<td align="right">23.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">20.4</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="11" align="left" style="border-top: 0px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company has subsidiaries manufacturing in Ireland under an incentive tax rate. In addition,
the Company has subsidiaries operating in Puerto Rico under various tax incentive grants. The
decrease in the 2009 tax rate was primarily due to increases in taxable income in lower tax
jurisdictions relative to taxable income in higher tax jurisdictions. The increase in the 2008 tax
rate was mainly attributed to increases in taxable income in higher tax jurisdictions relative to
taxable income in lower jurisdictions, as well as a business restructuring of certain international
subsidiaries in 2007, resulting in a one-time benefit of $267 million, which reduced the 2007
effective tax rate by 2%.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: Helvetica,Arial,sans-serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt">     Temporary differences and carry forwards for 2009 and 2008 are 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 nowrap="nowrap" align="center" colspan="6"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>2008</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: 1px solid #000000"><b>Deferred Tax</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Deferred Tax</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left"><b>(Dollars in Millions)</b></td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Asset</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Liability</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Asset</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Liability</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="15" 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">Employee related obligations
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">2,153</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,615</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Stock based compensation
</div></td>
<td> </td>
<td> </td>
<td align="right">1,291</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,296</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">Depreciation
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(661</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(523</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Non-deductible intangibles
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,377</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,791</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">International R&D capitalized for tax
</div></td>
<td> </td>
<td> </td>
<td align="right">1,989</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,914</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Reserves & liabilities
</div></td>
<td> </td>
<td> </td>
<td align="right">1,014</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">688</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">Income reported for tax purposes
</div></td>
<td> </td>
<td> </td>
<td align="right">648</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">629</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Net operating loss carryforward international
</div></td>
<td> </td>
<td> </td>
<td align="right">615</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">393</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">Miscellaneous international
</div></td>
<td> </td>
<td> </td>
<td align="right">1,474</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(110</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">964</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(251</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Miscellaneous U.S.
</div></td>
<td> </td>
<td> </td>
<td align="right">799</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,828</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="15" 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">Total deferred income taxes
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>9,983</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(3,148</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td> </td>
<td align="right"><b>10,327</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(2,565</b></td>
<td nowrap="nowrap"><b>)</b></td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="15" nowrap="nowrap" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The difference between the net deferred tax on income per the balance sheet and the net
deferred tax above is included in taxes on income on the balance sheet. The 2009 and 2008 deferred
tax Miscellaneous U.S. includes current year tax receivables. The Company has a wholly-owned
international subsidiary which has cumulative net losses. The Company believes that it is more
likely than not that the subsidiary will realize future taxable income sufficient to utilize these
deferred tax assets.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The following table summarizes the activity related to unrecognized tax benefits:
</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 nowrap="nowrap" align="left"><b>(Dollars in Millions)</b></td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2008</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2007</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="11" 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">Beginning of year
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,978</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,653</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,262</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Increases related to current year tax positions
</div></td>
<td> </td>
<td> </td>
<td align="right">555</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">545</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">487</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Increases related to prior period tax positions
</div></td>
<td> </td>
<td> </td>
<td align="right">203</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">87</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">77</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Decreases related to prior period tax positions
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(163</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 nowrap="nowrap" align="left"> </td>
<td align="right">(117</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Settlements
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(87</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(137</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(14</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Lapse of statute of limitations
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(83</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(28</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(42</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="11" nowrap="nowrap" 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">End of year
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>2,403</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>1,978</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>1,653</b></td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="11" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company had $2.4 billion and $2.0 billion of unrecognized tax benefits, as of January 3,
2010 and December 28, 2008, respectively. All of the unrecognized tax benefits of $2.4 billion at
January 3, 2010, if recognized, would affect the Company’s annual effective tax rate. The Company
conducts business and files tax returns in numerous countries and currently has tax audits in
progress with a number of tax authorities. The U.S. Internal Revenue Service (IRS) has completed
its audit for the tax years through 2002. In other major jurisdictions where the Company conducts
business, the years remain open generally back to the year 2002 with some jurisdictions remaining
open as far back as 1995. The Company does not expect that the total amount of unrecognized tax
benefits will significantly change over the next twelve months. The Company believes that it is
possible that within the next twelve months, the IRS may complete its audit of the tax years
2003-2005. The close of the audit may result in the reduction of unrecognized tax benefits. The
Company is not able to provide a reasonably reliable estimate of the timing of any other future tax
payments relating to uncertain tax positions.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company classifies liabilities for unrecognized tax benefits and related interest and
penalties as long-term liabilities. Interest expense and penalties related to unrecognized tax
benefits are classified as income tax expense. During the fiscal year ended January 3, 2010, the
Company recognized $85 million of interest expense and $30 million of interest income with an
after-tax impact of $36 million expense. For the fiscal year ended December 28, 2008, the Company
recognized $106 million of interest expense with an after-tax impact of $69 million. For the fiscal
year ended December 30, 2007, the Company recognized $58 million of interest expense and $42
million of interest income with an after-tax impact of $10 million expense. The total amount of
accrued interest was $309 million and $227 million in 2009 and 2008, respectively.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 9 - us-gaap:CompensationRelatedCostsGeneralTextBlock-->
<div style="font-family: Helvetica,Arial,sans-serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>9. Employee Related Obligations</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">At the end of 2009 and 2008, employee related obligations recorded on the Consolidated Balance
Sheet were:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left"><b>(Dollars in Millions)</b></td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2008</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="7" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Pension benefits
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">2,792</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,382</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Postretirement benefits
</div></td>
<td> </td>
<td> </td>
<td align="right">2,245</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,217</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Postemployment benefits
</div></td>
<td> </td>
<td> </td>
<td align="right">1,504</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">870</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Deferred compensation
</div></td>
<td> </td>
<td> </td>
<td align="right">790</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">772</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="7" 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">Total employee obligations
</div></td>
<td> </td>
<td> </td>
<td align="right">7,331</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">8,241</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Less current benefits payable
</div></td>
<td> </td>
<td> </td>
<td align="right">562</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">450</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="7" 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">Employee related obligations — long-term
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>6,769</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>7,791</b></td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="7" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Prepaid employee related obligations of $266 million and $136 million for 2009 and 2008,
respectively, are included in other assets on the consolidated balance sheet.
</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:PensionAndOtherPostretirementBenefitsDisclosureTextBlock-->
<div style="font-family: Helvetica,Arial,sans-serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>10. Pensions and Other Benefit Plans</b>
<br style="font-size: 6pt" />
The Company sponsors various retirement and pension plans, including defined benefit, defined
contribution and termination indemnity plans, which cover most employees worldwide. The Company
also provides postretirement benefits, primarily health care, to all U.S. retired employees and
their dependents.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Many international employees are covered by government-sponsored programs and the cost to the
Company is not significant.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Retirement plan benefits are primarily based on the employee’s compensation during the last
three to five years before retirement and the number of years of service. International
subsidiaries have plans under which funds are deposited with trustees, annuities are purchased
under group contracts, or reserves are provided.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company does not fund retiree health care benefits in advance and has the right to modify
these plans in the future.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company uses the date of its consolidated financial statements (January 3, 2010 and
December 28, 2008, respectively) as the measurement date for all U.S. and international retirement
and other benefit plans.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In accordance with U.S. GAAP the Company has adopted the recent standards related to
employers’ accounting for defined benefit pension and other postretirement plans.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: Helvetica,Arial,sans-serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Net periodic benefit costs for the Company’s defined benefit retirement plans and
other benefit plans for 2009, 2008 and 2007 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="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="10" style="border-bottom: 1px solid #000000"><b>Retirement Plans</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 1px solid #000000"><b>Other Benefit Plans</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left"><b>(Dollars in Millions)</b></td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2008</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2007</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2008</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2007</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="23" 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">Service cost
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">511</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">545</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">597</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">137</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">142</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">140</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">746</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">701</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">656</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">174</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">166</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">149</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">(934</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(876</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(809</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">(2</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">
<td>
<div style="margin-left:15px; text-indent:-15px">Amortization of prior service cost
</div></td>
<td> </td>
<td> </td>
<td align="right">13</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">10</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">10</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(5</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">(7</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 asset
</div></td>
<td> </td>
<td> </td>
<td align="right">1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2</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>
<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">155</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">62</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">186</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">55</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">64</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">66</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Curtailments and settlements
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(11</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">7</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5</td>
<td> </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">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="23" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Net periodic benefit cost
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>481</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>451</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>646</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>359</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>366</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>346</b></td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The net periodic benefit cost attributable to U.S. retirement plans was $286 million, $220
million and $379 million in 2009, 2008 and 2007, respectively.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Amounts expected to be recognized in net periodic benefit cost in the coming year for the
Company’s defined benefit retirement plans and other postretirement plans:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="88%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left"><b>(Dollars in Millions)</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td colspan="5" align="left" style="border-top: 0px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Amortization of net transition obligation
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Amortization of net actuarial losses
</div></td>
<td> </td>
<td> </td>
<td align="right">296</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Amortization of prior service cost
</div></td>
<td> </td>
<td> </td>
<td align="right">5</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Unrecognized gains and losses for the U.S. pension plans are amortized over the average
remaining future service for each plan. For plans with no active employees, they are amortized over
the average life expectancy. The amortization of gains and losses for the other U.S. benefit plans
is determined by using a 10% corridor of the greater of the market value of assets or the projected
benefit obligation. Total unamortized gains and losses in excess of the corridor are amortized over
the average remaining future service.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Prior service costs/benefits for the U.S. pension plans are amortized over the remaining
future service of plan participants at the time of the plan amendment. Prior service cost/benefit
for the other U.S. benefit plans is amortized over the average remaining service to full
eligibility age of plan participants at the time of the plan amendment.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The weighted-average assumptions in the following table represent the rates used to develop
the actuarial present value of projected benefit obligation for the year listed and also the net
periodic benefit cost for the following year.
</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="10" style="border-bottom: 1px solid #000000"><b>Retirement Plans</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 1px solid #000000"><b>Other Benefit Plans</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left"><b>(Dollars in Millions)</b></td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2008</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2007</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2008</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2007</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="23" 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"><b>U.S. Benefit Plans</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">Discount rate
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">6.50</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td> </td>
<td align="right">6.50</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6.50</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">6.50</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td> </td>
<td align="right">6.50</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6.50</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Expected long-term rate of return on plan assets
</div></td>
<td> </td>
<td> </td>
<td align="right">9.00</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">9.00</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">9.00</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">9.00</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">9.00</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">9.00</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Rate of increase in compensation levels
</div></td>
<td> </td>
<td> </td>
<td align="right">4.50</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4.50</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4.50</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4.50</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4.50</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4.50</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>International Benefit Plans</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 style="font-size: 1px">
<td colspan="25" align="left" style="border-top: 0px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Discount rate
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">5.75</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td> </td>
<td align="right">6.00</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5.50</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">6.75</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td> </td>
<td align="right">7.25</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6.50</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Expected long-term rate of return on plan assets
</div></td>
<td> </td>
<td> </td>
<td align="right">8.00</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">8.00</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">8.25</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">Rate of increase in compensation levels
</div></td>
<td> </td>
<td> </td>
<td align="right">4.00</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4.00</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4.00</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4.75</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4.50</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4.50</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="25" align="left" style="border-top: 0px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company’s discount rates are determined by considering current yield curves representing
high quality, long-term fixed income instruments. The resulting discount rates are consistent with
the duration of plan liabilities.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The expected long-term rate of return on plan assets assumption is determined using a building
block approach, considering historical averages and real returns of each asset class. In certain
countries, where historical returns are not meaningful, consideration is given to local market
expectations of long-term returns.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The following table displays the assumed health care cost trend rates, for all individuals:
</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 nowrap="nowrap" align="left"><b>Health Care Plans</b></td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2008</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="7" 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">Health care cost trend rate assumed for next year
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">8.00</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td> </td>
<td align="right">9.00</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Rate to which the cost trend rate is assumed to decline (ultimate trend)
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">5.00</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td> </td>
<td align="right">5.00</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Year the rate reaches the ultimate trend rate
</div></td>
<td> </td>
<td> </td>
<td align="right">2017</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2015</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">A one-percentage-point change in assumed health care cost trend rates would have the following
effect:
</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="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>One-Percentage-</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>One-Percentage-</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left"><b>(Dollars in Millions)</b></td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Point Increase</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Point Decrease</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="7" 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"><b>Health Care Plans</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="9" align="left" style="border-top: 0px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total interest and service cost
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">34</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(28</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Postretirement benefit obligation
</div></td>
<td> </td>
<td> </td>
<td align="right">315</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(254</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td colspan="9" align="left" style="border-top: 0px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: Helvetica,Arial,sans-serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following table sets forth information related to the benefit obligation and the fair value
of plan assets at year-end 2009 and 2008 for the Company’s defined benefit retirement plans and
other postretirement plans:
</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: 1px solid #000000"><b>Retirement Plans</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Other Benefit Plans</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left"><b>(Dollars in Millions)</b></td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2008</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2008</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="15" 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"><b>Change in Benefit Obligation</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>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Projected benefit obligation — beginning of year
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">11,923</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">12,002</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2,765</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,721</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Service cost
</div></td>
<td> </td>
<td> </td>
<td align="right">511</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">545</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">137</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">142</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">746</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">701</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">174</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">166</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Plan participant contributions
</div></td>
<td> </td>
<td> </td>
<td align="right">50</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">60</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">Amendments
</div></td>
<td> </td>
<td> </td>
<td align="right">3</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">10</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Actuarial losses (gains)
</div></td>
<td> </td>
<td> </td>
<td align="right">412</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(318</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">51</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(124</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Divestitures & acquisitions
</div></td>
<td> </td>
<td> </td>
<td align="right">15</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">13</td>
<td> </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">Curtailments & settlements & restructuring
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3</td>
<td nowrap="nowrap">)</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">748</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">Benefits paid from plan
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(570</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(535</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(313</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(122</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Effect of exchange rates
</div></td>
<td> </td>
<td> </td>
<td align="right">362</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(540</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">15</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(17</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="15" nowrap="nowrap" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Projected benefit obligation — end of year*
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>13,449</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>11,923</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>3,590</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>2,765</b></td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="15" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Change in Plan 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>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Plan assets at fair value — beginning of year
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">7,677</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">10,469</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">17</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">29</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Actual return (loss) on plan assets
</div></td>
<td> </td>
<td> </td>
<td align="right">2,048</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,787</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">4</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(7</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Company contributions
</div></td>
<td> </td>
<td> </td>
<td align="right">1,354</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">978</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">308</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">117</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Plan participant contributions
</div></td>
<td> </td>
<td> </td>
<td align="right">50</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">60</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">Settlements
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </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">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Benefits paid from plan assets
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(570</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(535</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(313</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(122</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Effect of exchange rates
</div></td>
<td> </td>
<td> </td>
<td align="right">364</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(507</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 style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="15" 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">Plan assets at fair value — end of year
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>10,923</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>7,677</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>16</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>17</b></td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="15" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Funded status at — end of year*
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(2,526</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(4,246</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(3,574</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(2,748</b></td>
<td nowrap="nowrap"><b>)</b></td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="15" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Amounts Recognized in the Company’s Balance Sheet consist of the following:</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>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Non-current assets
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">266</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">136</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Current liabilities
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(53</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(45</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(484</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(212</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Non-current liabilities
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,739</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(4,337</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,090</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,536</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="15" nowrap="nowrap" 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">Total recognized in the consolidated balance sheet — end of year
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(2,526</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(4,246</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(3,574</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(2,748</b></td>
<td nowrap="nowrap"><b>)</b></td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="15" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Amounts Recognized in Accumulated Other Comprehensive Income consist of the
following:</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>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net actuarial loss
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">3,415</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,209</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">924</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,006</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Prior service cost (credit)
</div></td>
<td> </td>
<td> </td>
<td align="right">47</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">43</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(23</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(29</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Unrecognized net transition obligation
</div></td>
<td> </td>
<td> </td>
<td align="right">5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6</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 style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="15" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total before tax effects
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>3,467</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>4,258</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>901</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>977</b></td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="15" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Accumulated Benefit Obligations — end of year*</b>
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>11,687</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>10,357</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="15" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive
Income</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net periodic benefit cost
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>481</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>451</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>359</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>366</b></td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="15" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Net actuarial (gain) loss
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(704</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">3,344</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">48</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">60</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Amortization of net actuarial loss
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(134</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(68</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(131</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(65</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Prior service cost
</div></td>
<td> </td>
<td> </td>
<td align="right">3</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">10</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Amortization of prior service cost
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(13</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(11</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Effect of exchange rates
</div></td>
<td> </td>
<td> </td>
<td align="right">57</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(102</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">2</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="15" nowrap="nowrap" 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">Total recognized in other comprehensive income, before tax
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(791</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td> </td>
<td align="right"><b>3,173</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(76</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td> </td>
<td align="right"><b>1</b></td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="15" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total recognized in net periodic benefit cost and other comprehensive income
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(310</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td> </td>
<td align="right"><b>3,624</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>283</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>367</b></td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="15" align="left" style="border-top: 3px double #000000"> </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="1%"></td>
<td width="1%"></td>
<td width="98"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><i>*</i></td>
<td> </td>
<td><i>The Company does not fund certain plans, as funding is not required. $1.2 billion of the projected benefit obligation
and $1.2 billion of the underfunded status for each of the fiscal years 2009 and 2008 relates to the unfunded pension
plans. $1.0 billion and $0.9 billion of the accumulated benefit obligation for the fiscal years 2009 and 2008,
respectively, relate to these unfunded pension plans.</i></td>
</tr>
</table>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Plans with accumulated benefit obligations in excess of plan assets consist of the following:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Retirement Plans</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left"><b>(Dollars in Millions)</b></td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2008</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="7" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Accumulated benefit obligation
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(4,065</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(9,885</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Projected benefit obligation
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(4,663</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(11,379</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Plan assets at fair value
</div></td>
<td> </td>
<td> </td>
<td align="right">2,564</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7,021</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="7" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: Helvetica,Arial,sans-serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following table displays the projected future benefit payments from the Company’s
retirement and other benefit plans:
</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="38%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="6%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="6%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="6%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="6%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="6%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="6%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left"><b>(Dollars in Millions)</b></td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2012</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2013</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2014</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2015-2019</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="23" 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"><b>Projected future benefit payments</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 style="font-size: 1px">
<td colspan="25" align="left" style="border-top: 0px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Retirement plans
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">558</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">553</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">582</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">604</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">636</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,925</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="23" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Other benefit plans — gross
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">209</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">198</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">196</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">198</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">197</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">995</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Medicare rebates
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(9</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>
<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 style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="23" 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">Other benefit plans — net
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">200</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">198</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">196</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">198</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">197</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">995</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="23" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In 2009, the Company contributed $839 million and $515 million to its U.S. and international
pension plans, respectively. In addition, the Company funded $500 million to its U.S. plans in the
first month of 2010.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In 2006, Congress passed the Pension Protection Act of 2006. The Act amended the Employee
Retirement Income Security Act (ERISA) for plan years beginning after 2007 and established new
minimum funding standards for U.S. employer defined benefit plans.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company plans to continue to fund its U.S. defined benefit plans to comply with the Act.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     International plans are funded in accordance with local regulations. Additional discretionary
contributions are made when deemed appropriate to meet the long-term obligations of the plans. For
certain plans, funding is not a common practice, as funding provides no economic benefit.
Consequently the Company has several pension plans that are not funded.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The following table displays the projected future minimum contributions to the Company’s U.S.
and international unfunded retirement plans. These amounts do not include any discretionary
contributions that the Company may elect to make in the future.
</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="38%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="6%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="6%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="6%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="6%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="6%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="6%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left"><b>(Dollars in Millions)</b></td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2012</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2013</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2014</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2015-2019</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="23" 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"><b>Projected future contributions</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 style="font-size: 1px">
<td colspan="25" align="left" style="border-top: 0px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Unfunded U.S. retirement plans
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">34</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">36</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">38</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">40</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">44</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">288</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="23" 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">Unfunded International retirement plans
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">32</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">29</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">31</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">33</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">32</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">186</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="25" align="left" style="border-top: 0px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Each pension plan is overseen by a local committee or board that is responsible for the overall
administration and investment of the pension plans. In determining investment policies, strategies
and goals, each committee or board considers factors including local pension rules and regulations;
local tax regulations; availability of investment vehicles (separate accounts, commingled accounts,
insurance funds, etc.); funded status of the plans; ratio of actives to retirees; duration of
liabilities; and other relevant factors including diversification, liquidity of local markets and
liquidity of base currency. A majority of the Company’s pension funds are open to new entrants and
are expected to be on-going plans. Permitted investments are primarily liquid and/or listed, with
little reliance on illiquid and non-traditional investments such as hedge funds. An asset
allocation of 75% equities and 25% fixed income is generally pursued unless local regulations and
illiquidity require otherwise.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company’s retirement plan asset allocation at the end of 2009 and 2008 and target
allocations for 2010 are 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="64%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="6%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="6%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="6%"> </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>Percent of</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Target</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: 1px solid #000000"><b>Plan Assets</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 0px solid #000000"><b>Allocation</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2008</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2010</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="11" 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"><b>U.S. Retirement Plans</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>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Equity securities
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">76</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">70</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">75</td>
<td nowrap="nowrap">%</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Debt securities
</div></td>
<td> </td>
<td> </td>
<td align="right">24</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">30</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">25</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="11" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total plan assets
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>100</b></td>
<td nowrap="nowrap"><b>%</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>100</b></td>
<td nowrap="nowrap"><b>%</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>100</b></td>
<td nowrap="nowrap"><b>%</b></td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="11" nowrap="nowrap" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>International Retirement Plans</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>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Equity securities
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">65</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">61</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">65</td>
<td nowrap="nowrap">%</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Debt securities
</div></td>
<td> </td>
<td> </td>
<td align="right">34</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">38</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">34</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Real estate and other
</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">1</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="11" 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">Total plan assets
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>100</b></td>
<td nowrap="nowrap"><b>%</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>100</b></td>
<td nowrap="nowrap"><b>%</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>100</b></td>
<td nowrap="nowrap"><b>%</b></td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="11" nowrap="nowrap" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company’s other benefit plans are unfunded except for U.S. life insurance contract assets
of $16 million and $17 million at January 3, 2010 and December 28, 2008, respectively.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The fair value of Johnson & Johnson common stock directly held in plan assets was $469 million
(4.3% of total plan assets) at January 3, 2010 and $416 million (5.4% of total plan assets) at
December 28, 2008.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>DETERMINATION OF FAIR VALUE</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Plan has an established and well-documented process for determining fair values. Fair value
is based upon quoted market prices, where available. If listed prices or quotes are not available,
fair value is based upon models that primarily use, as inputs, market-based or independently
sourced market parameters, including yield curves, interest rates, volatilities, equity or debt
prices, foreign exchange rates and credit curves.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     While the Plan believes its valuation methods are appropriate and consistent with other market
participants, the use of different methodologies or assumptions to determine the fair value of
certain financial instruments could result in a different estimate of fair value at the reporting
date.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: Helvetica,Arial,sans-serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>VALUATION HIERARCHY</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The authoritative literature establishes a three-level hierarchy to prioritize the inputs used
in measuring fair value. The levels within the hierarchy are described in the table 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">A financial instrument’s categorization within the valuation hierarchy is based upon the lowest
level of input that is significant to the fair value measurement.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Following is a description of the valuation methodologies used for the investments measured at
fair value.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     <b>•</b> Short-term investments — Cash and quoted short-term instruments are valued at the closing
price or the amount held on deposit by the custodian bank. Other investments are through investment
vehicles valued using the Net Asset Value (NAV) provided by the administrator of the fund. The NAV
is based on the value of the underlying assets owned by the fund, minus its liabilities, and then
divided by the number of shares outstanding. The NAV is a quoted price in a market that is not
active and classified as Level 2.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     <b>•</b> Government and agency securities — A limited number of these investments are valued at the
closing price reported on the major market on which the individual securities are traded. Where
quoted prices are available in an active market, the investments are classified within Level 1 of
the valuation hierarchy. If quoted market prices are not available for the specific security, then
fair values are
estimated by using pricing models, quoted prices of securities with similar characteristics or
discounted cash flows. When quoted market prices for a security are not available in an active
market, they are classified as Level 2.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     <b>•</b> Debt instruments — A limited number of these investments are valued at the closing price
reported on the major market on which the individual securities are traded. Where quoted prices are
available in an active market, the investments are classified as Level 1.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"> If quoted market prices
are not available for the specific security, then fair values are estimated by using pricing
models, quoted prices of securities with similar characteristics or discounted cash flows and are
classified as Level 2. Level 3 debt instruments are priced based on unobservable inputs.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     <b>•</b> Equity securities — Common stocks are valued at the closing price reported on the major
market on which the individual securities are traded. Substantially all common stock is classified
within Level 1 of the valuation hierarchy.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     <b>•</b> Commingled funds — The investments are public investment vehicles valued using the NAV
provided by the fund administrator. The NAV is based on the value of the underlying assets owned by
the fund, minus its liabilities, and then divided by the number of shares outstanding. Assets in
the Level 2 category have a quoted market price in a market that is not active.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     <b>•</b> Insurance contracts — The instruments are issued by insurance companies. The fair value is
based on negotiated value and the underlying investments held in separate account portfolios as
well as considering the credit worthiness of the issuer. The underlying investments are government,
asset-backed and fixed income securities. In general, insurance contracts are classified as Level 3
as there are no quoted prices nor other observable inputs for pricing.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     <b>•</b> Other assets — Other assets are represented primarily by limited partnerships and real
estate investments, as well as commercial loans and commercial mortgages that are not classified as
corporate debt. Other assets that are exchange listed and actively traded are classified as Level 1
while inactively traded assets are classified as Level 2. Most limited partnerships represent
investments in private equity and similar funds that are valued by the general partners. These, as
well as any other assets valued using unobservable inputs, are classified as Level 3.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following table sets forth the trust investments measured at fair value as of January 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="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="right" colspan="2"><b>Quoted Prices</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Significant</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>in Active</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Other</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Significant</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Markets for</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Observable</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Unobservable</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Identical Assets</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Inputs</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Inputs</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left"><b>(Dollars in Millions)</b></td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>(Level 1)</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>(Level 2)</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>(Level 3)</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Total Assets</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="15" 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">Short-term investment funds
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">91</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">358</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">449</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Government and agency securities
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,165</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,165</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Debt instruments
</div></td>
<td> </td>
<td> </td>
<td align="right">3</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,145</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,153</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Equity securities
</div></td>
<td> </td>
<td> </td>
<td align="right">5,068</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">58</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">15</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,141</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Commingled funds
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,673</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">26</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,699</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Insurance contracts
</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">32</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">32</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Other assets
</div></td>
<td> </td>
<td> </td>
<td align="right">31</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">171</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">82</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">284</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="15" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Trust investments at fair value</b>
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>5,193</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>5,570</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>160</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>10,923</b></td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="15" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>LEVEL 3 GAINS AND LOSSES</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The table below sets forth a summary of changes in the fair value of the Plan’s Level 3 assets
for the year ended January 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="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="right" colspan="2"><b>Debt</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Equity</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Commingled</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Insurance</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Other</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Total</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left"><b>(Dollars in Millions)</b></td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Instruments</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Securities</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Funds</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Contracts</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Assets</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Level 3</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="23" 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"><b>Balance December 28, 2008</b>
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">7</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">15</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">15</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">29</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">85</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">151</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Realized gains (losses)
</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">3</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</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">Unrealized gains (losses)
</div></td>
<td> </td>
<td> </td>
<td align="right">2</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">(2</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">(3</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(5</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Purchases, sales, issuances and settlements, net
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(4</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">13</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">11</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="23" 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"><b>Balance January 3, 2010</b>
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>5</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>15</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>26</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>32</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>82</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>160</b></td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="23" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: Helvetica,Arial,sans-serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</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 - jnj:SavingsPlanTextBlock-->
<div style="font-family: Helvetica,Arial,sans-serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>11. Savings Plan</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company has voluntary 401 (k) savings plans designed to enhance the existing retirement
programs covering eligible employees. The Company matches a percentage of each employee’s
contributions consistent with the provisions of the plan for which he/she is eligible. Total
Company matching contributions to the plans were $163 million, $166 million and $169 million in
2009, 2008 and 2007, respectively.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 12 - us-gaap:ScheduleOfTreasuryStockByClassTextBlock-->
<div style="font-family: Helvetica,Arial,sans-serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>12. Capital and Treasury Stock</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Changes in treasury stock were:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left"><b>(Amounts in Millions Except Treasury Stock</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>Treasury Stock</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left"><b>Number of Shares in Thousands)</b></td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Shares</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Amount</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="7" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance at December 31, 2006
</div></td>
<td> </td>
<td> </td>
<td align="right">226,612</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">10,974</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Employee compensation and stock option plans
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(33,296</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,180</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Conversion of subordinated debentures
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(194</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(13</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Repurchase of common stock
</div></td>
<td> </td>
<td> </td>
<td align="right">86,498</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,607</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="7" 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">Balance at December 30, 2007
</div></td>
<td> </td>
<td> </td>
<td align="right">279,620</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">14,388</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Employee compensation and stock option plans
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(29,906</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,005</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Conversion of subordinated debentures
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(19</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">Repurchase of common stock
</div></td>
<td> </td>
<td> </td>
<td align="right">100,970</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,651</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="7" 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">Balance at December 28, 2008
</div></td>
<td> </td>
<td> </td>
<td align="right">350,665</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">19,033</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Employee compensation and stock option plans
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(22,161</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,377</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Conversion of subordinated debentures
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(96</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(6</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Repurchase of common stock
</div></td>
<td> </td>
<td> </td>
<td align="right">37,114</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,130</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="7" 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">Balance at January 3, 2010
</div></td>
<td> </td>
<td> </td>
<td align="right">365,522</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">19,780</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="7" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Aggregate shares of Common Stock issued were approximately 3,120 million shares at the end of
2009, 2008 and 2007.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Cash dividends paid were $1.930 per share in 2009, compared with dividends of $1.795 per share
in 2008 and $1.620 per share in 2007.
</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 13 - us-gaap:ComprehensiveIncomeNoteTextBlock-->
<div style="font-family: Helvetica,Arial,sans-serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>13. Accumulated Other Comprehensive Income</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Components of other comprehensive income/(loss) consist of the following:
</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="right" colspan="2"><b>Total</b></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 nowrap="nowrap" align="right" colspan="2"><b>Gains/</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Accumulated</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Foreign</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Gains/</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>(Losses) on</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Other</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Currency</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>(Losses) on</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Employee</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Derivatives</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Comprehensive</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left"><b>(Dollars in Millions)</b></td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Translation</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Securities</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Benefit Plans</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>& Hedges</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Income/(Loss)</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="19" 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">December 31, 2006
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(158</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">61</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,030</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">9</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,118</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">2007 changes
</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 align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">28</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(78</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">(5 </td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">24</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">Net 2007 changes
</div></td>
<td> </td>
<td> </td>
<td align="right">786</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">23</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">670</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(54</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">1,425</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="19" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">December 30, 2007
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">628</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">84</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,360</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(45</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(693</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">2008 changes
</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:30px; text-indent:-15px">Unrealized gain (loss)
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(32</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">94</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">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">(27 </td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">72</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Net 2008 changes
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,499</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(59</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,870</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">166</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(4,262</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="19" nowrap="nowrap" 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">December 28, 2008
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(1,871</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">25</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,230</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">121</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(4,955</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">2009 changes
</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 align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(52</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">38</td>
<td> </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">(3 </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">(14 </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 2009 changes
</div></td>
<td> </td>
<td> </td>
<td align="right">1,363</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(55</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">565</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">24</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,897</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="19" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">January 3, 2010
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(508</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(30</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(2,665</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td> </td>
<td align="right"><b>145</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(3,058</b></td>
<td nowrap="nowrap"><b>)</b></td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="19" nowrap="nowrap" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The tax effect on the unrealized gains/(losses) on the equity securities was income of $14
million in 2009 and expense of $14 million and $46 million in 2008 and 2007, respectively. The tax
effect related to employee benefit plans was $302 million, $1,090 million and $349 million in 2009,
2008 and 2007, respectively. The tax effect on the gains/(losses) on derivatives and hedges was
expense of $78 million and $70 million in 2009 and 2008, respectively, and income of $24 million in
2007. See Note 6 for additional information relating to derivatives and hedging.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The currency translation adjustments are not adjusted for income taxes as they relate to
permanent investments in international subsidiaries.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: Helvetica,Arial,sans-serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
</div>
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<!-- Begin Block Tagged Note 14 - us-gaap:ForeignCurrencyDisclosureTextBlock-->
<div style="font-family: Helvetica,Arial,sans-serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>14. International Currency Translation</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">For translation of its subsidiaries operating in non-U.S. Dollar currencies, the Company has
determined that the local currencies of its international subsidiaries are the functional
currencies except those in highly inflationary economies, which are defined as those which have had
compound cumulative rates of inflation of 100% or more during the past three years, or where a
substantial portion of its cash flows are not in the local currency.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In consolidating international subsidiaries, balance sheet currency effects are recorded as a
component of accumulated other comprehensive income. This equity account includes the results of
translating all balance sheet assets and liabilities at current exchange rates, except for those
located in highly inflationary economies. The translation of balance sheet accounts for highly
inflationary economies are reflected in the operating results.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     An analysis of the changes during 2009, 2008 and 2007 for foreign currency translation
adjustments is included in Note 13.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Net currency transaction and translation gains and losses included in other (income) expense
were losses of $210 million, $31 million and $23 million in 2009, 2008 and 2007, respectively.
</div>
</div>
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<!-- Begin Block Tagged Note 15 - us-gaap:EarningsPerShareTextBlock-->
<div style="font-family: Helvetica,Arial,sans-serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt"><b>15. Earnings Per Share</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following is a reconciliation of basic net earnings per share to diluted net earnings per
share for the fiscal years ended January 3, 2010, December 28, 2008 and December 30, 2007:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="64%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left"><b>(Shares in Millions Except Per Share Data)</b></td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2008</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2007</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="11" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Basic net earnings per share
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">4.45</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4.62</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3.67</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">2,759.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,802.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,882.9</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">118.0</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">179.0</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">178.6</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Less: shares repurchased under treasury stock method
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(92.0</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(149.6</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(154.5</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">3.7</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3.7</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="11" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Adjusted average shares outstanding — diluted
</div></td>
<td> </td>
<td> </td>
<td align="right">2,789.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,835.6</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,910.7</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Diluted net earnings per share
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">4.40</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4.57</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3.63</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="11" align="left" style="border-top: 0px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The diluted net earnings per share calculation includes the dilutive effect of convertible debt
that is offset by the related reduction in interest expense of $4 million after-tax for years 2009,
2008 and 2007.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Diluted net earnings per share excludes 121 million, 59 million and 64 million shares
underlying stock options for 2009, 2008 and 2007, respectively, 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>
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<!-- Begin Block Tagged Note 16 - us-gaap:OperatingLeasesOfLesseeDisclosureTextBlock-->
<div style="font-family: Helvetica,Arial,sans-serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>16. Rental Expense and Lease Commitments</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Rentals of space, vehicles, manufacturing equipment and office and data processing equipment
under operating leases were approximately $322 million in 2009, $309 million in 2008 and $302
million in 2007.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The approximate minimum rental payments required under operating leases that have initial or
remaining non-cancelable lease terms in excess of one year at January 3, 2010 are:
</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="4%"> </td>
<td width="1%"> </td>
<td width="4%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="4%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="4%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="4%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="4%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="4%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" colspan="2"><b>(Dollars in Millions)</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </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="1"><b>After</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="center" colspan="1"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="1"><b>2011</b></td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="1"><b>2012</b></td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="1"><b>2013</b></td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="1"><b>2014</b></td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="1"><b>2014</b></td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="1"><b>Total</b></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td colspan="24" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td align="center">$178</td>
<td> </td>
<td> </td>
<td align="center">150</td>
<td> </td>
<td> </td>
<td> </td>
<td align="center">128</td>
<td> </td>
<td> </td>
<td> </td>
<td align="center">103</td>
<td> </td>
<td> </td>
<td> </td>
<td align="center">87</td>
<td> </td>
<td> </td>
<td> </td>
<td align="center">94</td>
<td> </td>
<td> </td>
<td> </td>
<td align="center">740</td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Commitments under capital leases are not significant.
</div>
</div>
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<!-- Begin Block Tagged Note 17 - us-gaap:DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock-->
<div style="font-family: Helvetica,Arial,sans-serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt"><b>17. Common Stock, Stock Option Plans and Stock Compensation Agreements</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><b>STOCK OPTIONS</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">At January 3, 2010, the Company had 11 stock-based compensation plans. The shares outstanding
are for contracts under the Company’s 1995 and 2000 Stock Option Plans, the 2005 Long-Term
Incentive Plan, the 1997 Non-Employee Director’s Plan and the ALZA, Inverness, and Scios Stock
Option Plans. During 2009, no options or restricted shares were granted under any of these plans
except under the 2005 Long-Term Incentive Plan.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The compensation cost that has been charged against income for these plans was $628 million,
$627 million and $698 million for 2009, 2008 and 2007, respectively. The total income tax benefit
recognized in the income statement for share-based compensation costs was $210 million, $210
million and $238 million for 2009, 2008 and 2007, respectively. Share-based compensation costs
capitalized as part of inventory were insignificant in all periods.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Stock options expire 10 years from the date of grant and vest over service periods that range
from six months to five years. All options are granted at the average of the high and low prices of
the Company’s common stock on the New York Stock Exchange on the date of grant. Under the 2005
Long-Term Incentive Plan, the Company may issue up to 260 million shares of common stock. Shares
available for future grants under the 2005 Long-Term Incentive Plan were 139.7 million at the end
of 2009.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company settles employee stock option exercises with treasury shares. Treasury shares are
replenished throughout the year for the number of shares used to settle employee stock option
exercises.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The fair value of each option award was estimated on the date of grant using the Black-Scholes
option valuation model that uses the assumptions noted in the following table. Expected volatility
represents a blended rate of 4-year daily historical average volatility rate, and a 5-week average
implied volatility rate based on at-the-money traded Johnson & Johnson options with a life of 2
years. Historical data is used to determine the expected life of the option. The risk-free rate was
based on the U.S. Treasury yield curve in effect at the time of grant.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: Helvetica,Arial,sans-serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The average fair value of options granted was $8.35, $7.66, and $11.67 in 2009, 2008,
and 2007, respectively. The fair value was estimated based on the weighted average assumptions of:
</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="right" colspan="2"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2008</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2007</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="11" 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">Risk-free rate
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">2.71</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">2.97</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">4.78</td>
<td nowrap="nowrap">%</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Expected volatility
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">19.5</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">15.0</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">14.7</td>
<td nowrap="nowrap">%</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Expected life
</div></td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="right">6.0</td>
<td nowrap="nowrap"> yrs</td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="right">6.0</td>
<td nowrap="nowrap"> yrs</td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="right">6.0</td>
<td nowrap="nowrap"> yrs</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Dividend yield
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">3.30</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">2.90</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">2.50</td>
<td nowrap="nowrap">%</td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">A summary of option activity under the Plan as of January 3, 2010, December 28, 2008, and December
30, 2007 and changes during the years ending on those dates is presented below:
</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> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Aggregate</b></td>
<td> </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="right" colspan="2"><b>Weighted</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Intrinsic</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Outstanding</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Average</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Value</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left"><b>(Shares in Thousands)</b></td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Shares</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Exercise Price</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>(Dollars in Millions)</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="11" 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">Shares at December 31, 2006
</div></td>
<td> </td>
<td> </td>
<td align="right">242,927</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">54.57</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2,788</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Options granted
</div></td>
<td> </td>
<td> </td>
<td align="right">26,789</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">65.61</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Options exercised
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(33,224</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">45.92</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Options canceled/forfeited
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(7,863</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">63.00</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="11" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Shares at December 30, 2007
</div></td>
<td> </td>
<td> </td>
<td align="right">228,629</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">56.83</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2,411</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Options granted
</div></td>
<td> </td>
<td> </td>
<td align="right">22,428</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">61.80</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">Options exercised
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(30,033</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">50.27</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Options canceled/forfeited
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(5,525</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">61.90</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="11" 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">Shares at December 28, 2008
</div></td>
<td> </td>
<td> </td>
<td align="right">215,499</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">58.14</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">597</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Options granted
</div></td>
<td> </td>
<td> </td>
<td align="right">21,576</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">58.32</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Options exercised
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(18,225</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">50.97</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Options canceled/forfeited
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(6,131</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">61.85</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Shares at January 3, 2010
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>212,719</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>58.66</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>1,310</b></td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="11" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The total intrinsic value of options exercised was $184 million, $506 million, and $625 million in
2009, 2008 and 2007, respectively. The total unrecognized compensation cost was $612 million as of
January 3, 2010, $632 million as of December 28, 2008 and $652 million as of December 30, 2007. The
weighted average period for this cost to be recognized was 1.16 years, 1.06 years and 1.01 years
for 2009, 2008, and 2007, respectively.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The following table summarizes stock options outstanding and exercisable at January 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="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 nowrap="nowrap" align="center" colspan="10" style="border-bottom: 1px solid #000000"><b>Outstanding</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Exercisable</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 0px solid #000000"><b>(Shares in Thousands)</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Average</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Average</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left"><b>Exercise</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Average</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Exercise</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Exercise</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left"><b>Price Range</b></td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Options</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Life</b></td>
<td nowrap="nowrap"><sup style="font-size: 85%; vertical-align: text-top"><b>(1)</b></sup></td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Price</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Options</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Price</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td colspan="1" align="left" style="border-top: 0px solid #000000"> </td>
<td colspan="1" align="left" style="border-top: 0px solid #000000"> </td>
<td colspan="19" 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">$  7.33 - $28.09
</div></td>
<td> </td>
<td> </td>
<td align="right">104</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1.5</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">22.89</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">104</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">22.89</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">$31.27- $40.08
</div></td>
<td> </td>
<td> </td>
<td align="right">131</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.3</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">35.83</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">131</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">35.83</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">$41.26- $49.86
</div></td>
<td> </td>
<td> </td>
<td align="right">1,024</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1.2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">47.09</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,024</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">47.09</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">$50.52- $52.11
</div></td>
<td> </td>
<td> </td>
<td align="right">17,328</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.8</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">50.70</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">17,328</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">50.70</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">$52.13- $53.77
</div></td>
<td> </td>
<td> </td>
<td align="right">22,193</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">52.22</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">22,152</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">52.22</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">$53.93- $54.89
</div></td>
<td> </td>
<td> </td>
<td align="right">26,155</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4.0</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">53.93</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">26,156</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">53.93</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">$55.01- $58.25
</div></td>
<td> </td>
<td> </td>
<td align="right">26,332</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">57.30</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">26,328</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">57.30</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">$58.33- $65.10
</div></td>
<td> </td>
<td> </td>
<td align="right">63,805</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7.7</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">59.48</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">21,367</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">58.48</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">$65.62- $68.37
</div></td>
<td> </td>
<td> </td>
<td align="right">55,647</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5.8</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">65.97</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">33,759</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">66.19</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="19" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>212,719</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>5.0</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>58.66</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>148,349</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>57.26</b></td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="19" align="left" style="border-top: 3px double #000000"> </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="1%"></td>
<td width="1%"></td>
<td width="98"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><sup style="font-size: 85%; vertical-align: text-top"><i>(1)</i></sup></td>
<td> </td>
<td><i>Average contractual life remaining in years.</i></td>
</tr>
</table>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Stock options exercisable at December 28, 2008 and December 30, 2007 were 144,962 at an average
price of $56.25 and an average life of 5.3 years and 137,310 at an average price of $52.33 and an
average life of 5.6 years, respectively.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>RESTRICTED SHARE UNITS</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company grants restricted share units with a vesting period of three years. The Company
settles employee stock issuance with treasury shares. Treasury shares are replenished throughout
the year for the number of shares used for employee stock issuances.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     A summary of share activity under the Plan as of January 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="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> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Outstanding</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left"><b>(Shares in Thousands)</b></td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Shares</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="3" 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">Shares at December 31, 2006
</div></td>
<td> </td>
<td> </td>
<td align="right">6,885</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Shares granted
</div></td>
<td> </td>
<td> </td>
<td align="right">8,029</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Shares issued
</div></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">Shares canceled/forfeited
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,220</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Shares at December 30, 2007
</div></td>
<td> </td>
<td> </td>
<td align="right">13,661</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Shares granted
</div></td>
<td> </td>
<td> </td>
<td align="right">10,105</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Shares issued
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(40</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Shares canceled/forfeited
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,468</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Shares at December 28, 2008
</div></td>
<td> </td>
<td> </td>
<td align="right">22,258</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Shares granted
</div></td>
<td> </td>
<td> </td>
<td align="right">11,172</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Shares issued
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(5,714</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Shares canceled/forfeited
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,392</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Shares at January 3, 2010
</div></td>
<td> </td>
<td> </td>
<td align="right">26,324</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The average fair value of the restricted share units granted was $52.79, $56.70 and $60.86 in 2009,
2008 and 2007, respectively, using the fair market value at the date of grant. The fair value of
restricted share units was discounted for dividends, which are not paid on the restricted share
units during the vesting period. The fair value of restricted share units settled was $308.4
million, $2.5 million and $1.8 million in 2009, 2008 and 2007, respectively.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: Helvetica,Arial,sans-serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</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 18 - us-gaap:SegmentReportingDisclosureTextBlock-->
<div style="font-family: Helvetica,Arial,sans-serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>18. Segments of Business</b><sup style="font-size: 85%; vertical-align: text-top"><b>(1) </b></sup><b>and Geographic Areas</b>
</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="3%"> </td>
<td width="1%"> </td>
<td width="6%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="6%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="6%"> </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: 1px solid #000000"><b>Sales to Customers</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 nowrap="nowrap" align="left"><b>(Dollars in Millions)</b></td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2008</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2007</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="11" 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">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:30px; text-indent:-15px">United States
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">6,837</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,937</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,408</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">International
</div></td>
<td> </td>
<td> </td>
<td align="right">8,966</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">9,117</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">8,085</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="11" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Total
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>15,803</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>16,054</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>14,493</b></td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="11" 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">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:30px; text-indent:-15px">United States
</div></td>
<td> </td>
<td> </td>
<td align="right">13,041</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">14,831</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">15,603</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">International
</div></td>
<td> </td>
<td> </td>
<td align="right">9,479</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">9,736</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">9,263</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="11" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Total
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>22,520</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>24,567</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>24,866</b></td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="11" 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">Medical Devices and 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:30px; text-indent:-15px">United States
</div></td>
<td> </td>
<td> </td>
<td align="right">11,011</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">10,541</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">10,433</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">International
</div></td>
<td> </td>
<td> </td>
<td align="right">12,563</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">12,585</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">11,303</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="11" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Total
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>23,574</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>23,126</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>21,736</b></td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="11" 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">Worldwide total
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>61,897</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>63,747</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>61,095</b></td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="11" align="left" style="border-top: 3px double #000000"> </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="38%"> </td>
<td width="4%"> </td>
<td width="1%"> </td>
<td width="6%"> </td>
<td width="1%"> </td>
<td width="4%"> </td>
<td width="1%"> </td>
<td width="6%"> </td>
<td width="1%"> </td>
<td width="4%"> </td>
<td width="1%"> </td>
<td width="6%"> </td>
<td width="1%"> </td>
<td width="4%"> </td>
<td width="1%"> </td>
<td width="6%"> </td>
<td width="1%"> </td>
<td width="4%"> </td>
<td width="1%"> </td>
<td width="6%"> </td>
<td width="1%"> </td>
<td width="4%"> </td>
<td width="1%"> </td>
<td width="6%"> </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: 1px solid #000000"><b>Operating Profit</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 1px solid #000000"><b>Identifiable Assets</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left"><b>(Dollars in Millions)</b></td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2009</b><sup style="font-size: 85%; vertical-align: text-top"><b>(5)</b></sup></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2008</b><sup style="font-size: 85%; vertical-align: text-top"><b>(6)</b></sup></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2007</b><sup style="font-size: 85%; vertical-align: text-top"><b>(7)</b></sup></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2008</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2007</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="23" 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">Consumer
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">2,475</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,674</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,277</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">24,671</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">23,765</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">26,550</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Pharmaceutical
</div></td>
<td> </td>
<td> </td>
<td align="right">6,413</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7,605</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,540</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">21,460</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">19,544</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">19,780</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Medical Devices and Diagnostics
</div></td>
<td> </td>
<td> </td>
<td align="right">7,694</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7,223</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,846</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">22,853</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">20,779</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">19,978</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="23" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td> </td>
<td align="right">16,582</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">17,502</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">13,663</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">68,984</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">64,088</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">66,308</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Less: Expense not allocated to segments<sup style="font-size: 85%; vertical-align: text-top">(3)</sup>
</div></td>
<td> </td>
<td> </td>
<td align="right">827</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">573</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">380</td>
<td> </td>
<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">General corporate<sup style="font-size: 85%; vertical-align: text-top">(4)</sup>
</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 align="right">25,698</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">20,824</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">14,646</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="23" 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">Worldwide total
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>15,755</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>16,929</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>13,283</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>94,682</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>84,912</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>80,954</b></td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="23" align="left" style="border-top: 3px double #000000"> </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="38%"> </td>
<td width="4%"> </td>
<td width="1%"> </td>
<td width="6%"> </td>
<td width="1%"> </td>
<td width="4%"> </td>
<td width="1%"> </td>
<td width="6%"> </td>
<td width="1%"> </td>
<td width="4%"> </td>
<td width="1%"> </td>
<td width="6%"> </td>
<td width="1%"> </td>
<td width="4%"> </td>
<td width="1%"> </td>
<td width="6%"> </td>
<td width="1%"> </td>
<td width="4%"> </td>
<td width="1%"> </td>
<td width="6%"> </td>
<td width="1%"> </td>
<td width="4%"> </td>
<td width="1%"> </td>
<td width="6%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10"><b>Additions to Property,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10"><b>Depreciation and</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 1px solid #000000"><b>Plant & Equipment</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 1px solid #000000"><b>Amortization</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left"><b>(Dollars in Millions)</b></td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2008</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2007</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2008</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2007</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="23" 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">Consumer
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">439</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">499</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">504</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">513</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">489</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">472</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Pharmaceutical
</div></td>
<td> </td>
<td> </td>
<td align="right">535</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">920</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,137</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">922</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">986</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,033</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Medical Devices and Diagnostics
</div></td>
<td> </td>
<td> </td>
<td align="right">1,114</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,251</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">919</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,124</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,146</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,080</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="23" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Segments total
</div></td>
<td> </td>
<td> </td>
<td align="right">2,088</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,670</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,560</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,559</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,621</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,585</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">General corporate
</div></td>
<td> </td>
<td> </td>
<td align="right">277</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">396</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">382</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">215</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">211</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">192</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="23" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Worldwide total
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>2,365</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>3,066</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>2,942</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>2,774</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>2,832</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>2,777</b></td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="23" align="left" style="border-top: 3px double #000000"> </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="38%"> </td>
<td width="4%"> </td>
<td width="1%"> </td>
<td width="6%"> </td>
<td width="1%"> </td>
<td width="4%"> </td>
<td width="1%"> </td>
<td width="6%"> </td>
<td width="1%"> </td>
<td width="4%"> </td>
<td width="1%"> </td>
<td width="6%"> </td>
<td width="1%"> </td>
<td width="4%"> </td>
<td width="1%"> </td>
<td width="6%"> </td>
<td width="1%"> </td>
<td width="4%"> </td>
<td width="1%"> </td>
<td width="6%"> </td>
<td width="1%"> </td>
<td width="4%"> </td>
<td width="1%"> </td>
<td width="6%"> </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: 1px solid #000000"><b>Sales to Customers</b><sup style="font-size: 85%; vertical-align: text-top"><b>(2)</b></sup></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 1px solid #000000"><b>Long-Lived Assets</b><sup style="font-size: 85%; vertical-align: text-top"><b>(8)</b></sup></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left"><b>(Dollars in Millions)</b></td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2008</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2007</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2008</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>2007</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="23" 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">United States
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">30,889</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">32,309</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">32,444</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">22,399</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">21,674</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">21,685</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Europe
</div></td>
<td> </td>
<td> </td>
<td align="right">15,934</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">16,782</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">15,644</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">17,347</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">14,375</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">15,578</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">5,156</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,173</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,681</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,540</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,328</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,722</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">9,918</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">9,483</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">8,326</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,868</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,898</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,261</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="23" 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">Segments total
</div></td>
<td> </td>
<td> </td>
<td align="right">61,897</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">63,747</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">61,095</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">45,154</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">41,275</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">42,246</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">General corporate
</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 align="right">790</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">785</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">702</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Other non long-lived assets
</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 align="right">48,738</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">42,852</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">38,006</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="23" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Worldwide total
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>61,897</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>63,747</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>61,095</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>94,682</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>84,912</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>80,954</b></td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="23" align="left" style="border-top: 3px double #000000"> </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"><sup style="font-size: 85%; vertical-align: text-top"><i>(1)</i></sup></td>
<td> </td>
<td><i>See Note 1 for a description of the segments in which the Company operates.</i></td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><sup style="font-size: 85%; vertical-align: text-top"><i>(2)</i></sup></td>
<td> </td>
<td><i>Export sales are not significant. In 2009, 2008 and 2007, the Company did not have a customer that represented 10% of total revenues.</i></td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><sup style="font-size: 85%; vertical-align: text-top"><i>(3)</i></sup></td>
<td> </td>
<td><i>Amounts not allocated to segments include interest (income) expense, non-controlling interests and general corporate (income) expense.</i></td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><sup style="font-size: 85%; vertical-align: text-top"><i>(4)</i></sup></td>
<td> </td>
<td><i>General corporate includes cash and marketable securities.</i></td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><sup style="font-size: 85%; vertical-align: text-top"><i>(5)</i></sup></td>
<td> </td>
<td><i>Includes $1,186 million of restructuring expense, comprised of $369 million, $496 million, and $321 million for the Consumer, Pharmaceutical, and Medical Devices and Diagnostics segments, respectively. Includes $386 million of fourth quarter net litigation gain, comprised of a $92 million expense in the Pharmaceutical segment and a gain of $478 million
in the Medical Devices and Diagnostics segment.</i></td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><sup style="font-size: 85%; vertical-align: text-top"><i>(6)</i></sup></td>
<td> </td>
<td><i>Includes $7 million and $174 million of IPR&D for the Consumer and Medical Devices and Diagnostics segments, respectively. Includes $379 million of fourth quarter net litigation gain, comprised of a $50 million expense in the Consumer segment and a gain of $429 million in the Medical Devices and Diagnostics segment. The Medical Devices and Diagnostics
segment also includes $536 million gain on the divestiture of the Professional Wound Care business of Ethicon, Inc.</i></td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><sup style="font-size: 85%; vertical-align: text-top"><i>(7)</i></sup></td>
<td> </td>
<td><i>Includes $745 million of restructuring expense, comprised of $15 million, $429 million, and $301 million for the Consumer, Pharmaceutical, and Medical Devices and Diagnostics segments, respectively. The Medical Devices and Diagnostics segment includes $807 million of IPR&D. The Pharmaceutical segment also includes $678 million for the write-down of the
NATRECOR </i><sup style="font-size: 85%; vertical-align: text-top">
<i><sup style="font-size: 85%; vertical-align: text-top">®</sup></i></sup><i> intangible asset.</i></td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><sup style="font-size: 85%; vertical-align: text-top"><i>(8)</i></sup></td>
<td> </td>
<td><i>Long-lived assets include property, plant and equipment, net for 2009, 2008 and 2007 of $14,759, $14,365 and $14,185, respectively, and intangible assets and goodwill, net for 2009, 2008 and 2007 of $31,185, $27,695 and $28,763, respectively.</i></td>
</tr>
</table>
<!-- Folio -->
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</div>
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<div style="font-family: Helvetica,Arial,sans-serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
</div>
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<!-- Begin Block Tagged Note 19 - us-gaap:QuarterlyFinancialInformationTextBlock-->
<div style="font-family: Helvetica,Arial,sans-serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>19. Selected Quarterly Financial Data (unaudited)</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Selected unaudited quarterly financial data for the years 2009 and 2008 are summarized below:
</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="20%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="3%"> </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="14" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14" style="border-bottom: 1px solid #000000"><b>2008</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>First</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Second</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Third</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Fourth</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>First</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Second</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Third</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Fourth</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left"><b>(Dollars in Millions Except Per Share Data)</b></td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Quarter</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Quarter</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Quarter</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Quarter</b></td>
<td nowrap="nowrap"><sup style="font-size: 85%; vertical-align: text-top"><b>(1)</b></sup></td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Quarter</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Quarter</b></td>
<td nowrap="nowrap"><sup style="font-size: 85%; vertical-align: text-top"><b>(2)</b></sup></td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Quarter</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Quarter</b></td>
<td nowrap="nowrap"><sup style="font-size: 85%; vertical-align: text-top"><b>(3)</b></sup></td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="31" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Segment sales to customers
</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>
<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">Consumer
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">3,711</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,854</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,989</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,249</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,064</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,036</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,099</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,855</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 align="right">5,780</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,498</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,249</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,993</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,429</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,340</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,113</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,685</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Med Devices & Diagnostics
</div></td>
<td> </td>
<td> </td>
<td align="right">5,535</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,887</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,843</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,309</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,701</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,074</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,709</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,642</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="31" 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">Total sales
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">15,026</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">15,239</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">15,081</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">16,551</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">16,194</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">16,450</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">15,921</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">15,182</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="31" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Gross profit
</div></td>
<td> </td>
<td> </td>
<td align="right">10,775</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">10,789</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">10,647</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">11,239</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">11,580</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">11,699</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">11,147</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">10,810</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Earnings before provision for taxes on income
</div></td>
<td> </td>
<td> </td>
<td align="right">4,643</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,263</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,245</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,604</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,747</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,375</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,290</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,517</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Net earnings
</div></td>
<td> </td>
<td> </td>
<td align="right">3,507</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,208</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,345</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,206</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,598</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,327</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,310</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,714</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="31" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<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">1.27</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1.16</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1.21</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.80</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1.27</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1.18</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1.19</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.98</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="31" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Diluted net earnings per share
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1.26</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1.15</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1.20</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.79</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1.26</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1.17</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1.17</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.97</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="31" align="left" style="border-top: 3px double #000000"> </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="1%"></td>
<td width="1%"></td>
<td width="98"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><sup style="font-size: 85%; vertical-align: text-top"><i>(1)</i></sup></td>
<td> </td>
<td><i>The fourth quarter of 2009 includes an after-tax charge of $852 million for restructuring and $212 million after-tax of income from net litigation.</i></td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><sup style="font-size: 85%; vertical-align: text-top"><i>(2)</i></sup></td>
<td> </td>
<td><i>The second quarter of 2008 includes an after-tax charge of $40 million for IPR&D.</i></td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><sup style="font-size: 85%; vertical-align: text-top"><i>(3)</i></sup></td>
<td> </td>
<td><i>The fourth quarter of 2008 includes an after-tax charge of $141 million for IPR&D, $229 million after-tax of income from net litigation and $331 million after-tax gain on the divestiture of the Professional Wound Care business of Ethicon, Inc. The gain from the divestiture of the Professional Wound Care
business of Ethicon, Inc. was reinvested in the business.</i></td>
</tr>
</table>
</div>
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<!-- Begin Block Tagged Note 20 - us-gaap:BusinessCombinationDisclosureTextBlock-->
<div style="font-family: Helvetica,Arial,sans-serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>20. Business Combinations and Divestitures</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Certain businesses were acquired for $2,470 million in cash and $875 million of liabilities
assumed and non-controlling interests during 2009. These acquisitions were accounted for by the
purchase method and, accordingly, results of operations have been included in the financial
statements from their respective dates of acquisition.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The 2009 acquisitions included: Mentor Corporation, a leading supplier of medical products for
the global aesthetics market; Cougar Biotechnology, Inc., a development stage biopharmaceutical
company with a specific focus on oncology; Finsbury Orthopaedics Limited, a privately held UK-based
manufacturer and global distributor of orthopaedic implants; Gloster Europe, a privately held
developer of innovative disinfection processes and technologies to prevent healthcare-acquired
infections and substantially all of the assets and rights of Elan’s Alzheimer’s Immunotherapy
Program through a newly formed company, of which the Company owns 50.1% and Elan owns 49.9%.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The excess of purchase price over the estimated fair value of tangible assets acquired
amounted to $2,940 million and has been assigned to identifiable intangible assets, with any
residual recorded to goodwill. Of this amount, approximately $1,737 million has been identified as
the value of IPR&D primarily associated with the acquisitions of Cougar Biotechnology, Inc. and
substantially all of the assets and rights of Elan’s Alzheimer’s Immunotherapy Program.
Additionally, approximately $1,107 million has been identified as the value of other intangible
assets, including patents & technology and customer relationships primarily associated with the
acquisition of Mentor Corporation.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The IPR&D related to the acquisition of Cougar Biotechnology, Inc. was $971 million and is
associated with abiraterone acetate, a late stage, first-in-class compound for the treatment of
prostate cancer. The value of the IPR&D was calculated using cash flow projections discounted for
the risk inherent in such projects. Probability of success factors ranging from 60-85% were used to
reflect inherent clinical and regulatory risk. The discount rate applied was 23.5%.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Refer to Note 6 for information related to the Elan transaction.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Certain businesses were acquired for $1,214 million in cash and $114 million of liabilities
assumed during 2008. These acquisitions were accounted for by the purchase method and, accordingly,
results of operations have been included in the financial statements from their respective dates of
acquisition.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The 2008 acquisitions included: Amic AB, a privately held Swedish developer of in vitro
diagnostic technologies for use in point-of-care and near-patient settings; Beijing Dabao Cosmetics
Co., Ltd., a company that sells personal care brands in China; SurgRx, Inc., a privately held
developer of the advanced bipolar tissue sealing system used in the ENSEAL<sup style="font-size: 85%; vertical-align: text-top">®</sup>
family of devices; HealthMedia, Inc., a privately held company that creates web-based behavior
change interventions; LGE Performance Systems, Inc., a privately held company known as Human
Performance Institute™, which develops science-based training programs to improve employee
engagement and productivity and Omrix Biopharmaceuticals, Inc., a fully integrated
biopharmaceutical company that develops and markets biosurgical and immunotherapy products.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The excess of purchase price over the estimated fair value of tangible assets acquired
amounted to $891 million and has been assigned to identifiable intangible assets, with any residual
recorded to goodwill. Approximately $181 million has been identified as the value of IPR&D
associated with the acquisitions of Omrix Biopharmaceuticals, Inc., Amic AB, SurgRx, Inc. and
HealthMedia, Inc.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The IPR&D charge related to the acquisition of Omrix Biopharmaceuticals, Inc. was $127 million
and is associated with stand-alone and combination biosurgical technologies used to achieve
hemostasis. The value of the IPR&D was calculated using cash flow projections discounted for the
risk inherent in such projects. Probability of success factors ranging from 60-90% were used to
reflect inherent clinical and regulatory risk. The discount rate applied was 14%. As of the end of
the 2008 fiscal year, 97.8% of the outstanding shares of Common Stock of Omrix Biopharmaceuticals,
Inc. had been tendered by stockholders. Excluding shares that were tendered subject to
guaranteed delivery procedures, 90.2% of the outstanding shares of Common Stock had been tendered.
On December 30, 2008 the Company completed the acquisition of Omrix Biopharmaceuticals, Inc.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The IPR&D charge related to the acquisition of Amic AB was $40 million and is associated with
point-of-care device and 4CAST Chip technologies. The value of the IPR&D was calculated using cash
flow projections discounted for the risk inherent in such projects. The discount rate applied was
20%.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The IPR&D charge related to the acquisition of SurgRx, Inc. was $7 million and is associated
with vessel cutting and sealing surgical devices. The value of the IPR&D was calculated using cash
flow projections discounted for the risk inherent in such projects. Probability of success factors
ranging from 90-95% were used to reflect inherent clinical and regulatory risk. The discount rate
applied was 18%.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The IPR&D charge related to the acquisition of HealthMedia, Inc. was $7 million and is
associated primarily with process enhancements to software technology. The value of the IPR&D was
calculated using cash flow projections discounted for the risk inherent in such projects. A
probability of success factor of 90% was used to reflect inherent risk. The discount rate applied
was 14%.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Certain businesses were acquired for $1,388 million in cash and $232 million of liabilities
assumed during 2007. These acquisitions were accounted for by the purchase method and, accordingly,
results of operations have been included in the financial statements from their respective dates of
acquisition.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The 2007 acquisitions included: Conor Medsystems, Inc., a cardiovascular device company, with
new drug delivery technology; Robert Reid, Inc., a Japanese orthopedic product distributor; and
Maya’s Mom, Inc., a social media company.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The excess of purchase price over the estimated fair value of tangible assets acquired
amounted to $636 million and has been assigned to identifiable intangible assets, with any residual
recorded to goodwill. Approximately $807 million has been identified as the value of IPR&D
associated with the acquisition of Conor Medsystems, Inc.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The IPR&D charge related to the acquisition of Conor
Medsystems, Inc. was $807 million and is associated with research related to the discovery and
application of the stent technology. The value of the IPR&D was calculated using cash flow
projections discounted for the risk inherent in such projects. The discount rate applied was 19%.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Supplemental pro forma information for 2009, 2008 and 2007 in accordance with U.S. GAAP
standards related to business combinations, and goodwill and other intangible assets, is not
provided, as the impact of the aforementioned acquisitions did not have a material effect on the
Company’s results of operations, cash flows or financial position.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     With the exception of the divestiture of the Professional Wound Care business of Ethicon,
Inc., which resulted in a gain of $536 million before tax, and is recorded in other (income)
expense, net, in 2008, divestitures in 2009, 2008 and 2007 did not have a material effect on the
Company’s results of operations, cash flows or financial position.
</div>
</div>
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<!-- Begin Block Tagged Note 21 - jnj:LegalProceedingsTextBlock-->
<div style="font-family: Helvetica,Arial,sans-serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 21 — Legal Proceedings</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><b>PRODUCT LIABILITY</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company’s subsidiaries are involved in numerous product liability cases in the United States,
many of which concern alleged adverse reactions to drugs and medical devices. The damages claimed
are substantial, and while the Company is confident of the adequacy of the warnings and
instructions for use that accompany such products, it is not feasible to predict the ultimate
outcome of litigation. However, the Company believes that if any product liability results from
such cases, it will be substantially covered by existing amounts accrued in the Company’s balance
sheet and, where available, by third-party product liability insurance.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Multiple products of Johnson & Johnson subsidiaries are subject to numerous product liability
claims and lawsuits. There are a significant number of claimants who have pending lawsuits or
claims regarding injuries allegedly due to ORTHO EVRA<sup style="font-size: 85%; vertical-align: text-top">®</sup>,
RISPERDAL<sup style="font-size: 85%; vertical-align: text-top">®</sup>, LEVAQUIN<sup style="font-size: 85%; vertical-align: text-top">®</sup>, DURAGESIC<sup style="font-size: 85%; vertical-align: text-top">®</sup>,
the CHARITÉ™ Artificial Disc and CYPHER<sup style="font-size: 85%; vertical-align: text-top">®</sup> Stent. These claimants seek
substantial compensatory and, where available, punitive damages.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     With respect to RISPERDAL <sup style="font-size: 85%; vertical-align: text-top">®</sup>, the Attorneys General of eight states and
the Office of General Counsel of the Commonwealth of Pennsylvania have filed actions seeking
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, punitive damages, or other relief.
The Attorney General of Texas has joined a qui tam action in that state seeking similar relief.
Certain of these actions also seek injunctive relief relating to the promotion of
RISPERDAL<sup style="font-size: 85%; vertical-align: text-top">®</sup>. The Attorneys General of more than 40 other states have indicated
a potential interest in pursuing similar litigation against the Company’s subsidiary, Janssen
Pharmaceutica Inc. (Janssen) (now Ortho-McNeil-Janssen Pharmaceuticals Inc. (OMJPI)), and have
obtained a tolling agreement staying the running of the statute of limitations while they inquire
into the issues. In addition, there are six cases filed by union health plans seeking damages for
alleged overpayments for RISPERDAL<sup style="font-size: 85%; vertical-align: text-top">®</sup>, several of which seek certification as
class actions. In the case brought by the Attorney General of West Virginia, based on claims for
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>, Janssen (now OMJPI) was found liable and damages were assessed at
$4.5 million. OMJPI has filed an appeal.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Numerous claims and lawsuits in the United States relating to the drug
PROPULSID<sup style="font-size: 85%; vertical-align: text-top">®</sup>, withdrawn from general sale by the Company’s Janssen (now OMJPI)
subsidiary in 2000, have been resolved or are currently enrolled in settlement programs with an
aggregate cap below $100 million. Similar litigation concerning PROPULSID<sup style="font-size: 85%; vertical-align: text-top">®</sup> is
pending in Canada, where a national class action of persons alleging adverse reactions to the drug
has been certified and a settlement program instituted with an aggregate cap below $10 million.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>AFFIRMATIVE STENT PATENT LITIGATION</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In patent infringement actions tried in Delaware Federal District Court in late 2000, Cordis
Corporation (Cordis), a subsidiary of Johnson & Johnson, obtained verdicts of infringement and
patent validity, and damage awards against Boston Scientific Corporation (Boston Scientific) and
Medtronic AVE, Inc. (Medtronic) based on a number of Cordis vascular stent patents. In December
2000, the jury in the damage action against Boston Scientific returned a verdict of $324 million
and the jury in the Medtronic action returned a verdict of $271 million. The Court of Appeals for
the Federal Circuit has upheld liability in these cases, and on September 30, 2008, the district
court entered judgments, including interest, in the amounts of $702 million and $521 million
against Boston Scientific and
Medtronic, respectively. Medtronic paid $472 million in October 2008, representing the
judgment, net of amounts exchanged in settlement of a number of other litigations between the
companies. The net settlement of $472 million was recorded as a credit to other (income) expense,
net in the 2008 consolidated statement of earnings. In September 2009, Cordis settled this case
with Boston Scientific together with the Kastenhofer/Fontirroche and Ding cases described below,
for a net payment of $716 million. As part of that settlement Boston Scientific received a paid up
license to the Fontirroche family of patents worldwide and Cordis received a paid license to the
Kastenhofer and Ding families of patents worldwide and the parties settled all pending lawsuits
worldwide relating to these patents. The receipt of $716 million, less the impact of other
litigation matters, resulted in a credit to other (income) expense, net of $386 million in the
fiscal fourth quarter of 2009. In addition, in May 2009, Medtronic paid $270 million to settle
additional patent infringement claims asserted by Cordis based on its vascular stent patents, which
was recorded as a credit to other (income) expense, net in the fiscal second quarter of 2009.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In January 2003, Cordis filed a patent infringement action against Boston Scientific in
Delaware Federal District Court accusing its Express2™, Taxus<sup style="font-size: 85%; vertical-align: text-top">®</sup> and
Liberte<sup style="font-size: 85%; vertical-align: text-top">®</sup> stents of infringing the Palmaz patent that expired in November 2005.
The Liberte<sup style="font-size: 85%; vertical-align: text-top">®</sup> stent was also accused of infringing Cordis’ Gray patent that
expires in 2016. In June 2005, a jury found that the Express2™, Taxus<sup style="font-size: 85%; vertical-align: text-top">®</sup> and
Liberte<sup style="font-size: 85%; vertical-align: text-top">®</sup> stents infringed the Palmaz patent and that the
Liberte<sup style="font-size: 85%; vertical-align: text-top">®</sup> stent also infringed the Gray patent. On March 31, 2009, the U.S.
Court of Appeals for the Federal Circuit affirmed this judgment. The case was remanded to the
district court for a trial on damages and willfulness. Cordis also filed a lawsuit in Delaware
Federal District Court in October of 2008 alleging that Boston Scientific’s sales of
Taxus<sup style="font-size: 85%; vertical-align: text-top">®</sup> and Liberte<sup style="font-size: 85%; vertical-align: text-top">®</sup> after June of 2005 infringes Cordis’
Gray patent. On January 29, 2010, these cases together with the Jang case referred to in the
paragraph below, were settled. Under the terms of the settlement, Boston Scientific paid Cordis
$1.0 billion on February 1, 2010, and will pay Cordis an additional $725 million plus interest on
January 3, 2011. Cordis granted Boston Scientific a paid up worldwide license under the Palmaz and
Gray patents and Boston Scientific granted Cordis a paid up worldwide license under the Jang
patents for all stents sold by Cordis except the 2.25mm size Cypher.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Cordis has several pending lawsuits in New Jersey and Delaware Federal District Court against
Guidant Corporation (Guidant), Abbott Laboratories, Inc. (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 patents owned by or
licensed to Cordis. In one of the cases against
Boston Scientific, alleging that sales of their Promus™ stent infringed Wright and Falotico
patents, on January 20, 2010 the District Court in Delaware found the Wright/Falotico patent
invalid for lack of written description and/or lack of enablement. Cordis intends to appeal this
ruling.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>PATENT LITIGATION AGAINST VARIOUS JOHNSON & JOHNSON SUBSIDIARIES</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The products of various Johnson & Johnson subsidiaries are the subject of various patent
lawsuits, the outcomes of which could potentially adversely affect the ability of those
subsidiaries to sell those products, or require the payment of past damages and future royalties.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In July 2005, a jury in Federal District Court in Delaware found that the Cordis
CYPHER<sup style="font-size: 85%; vertical-align: text-top">®</sup> Stent infringed Boston Scientific’s Ding ‘536 patent and that the
Cordis CYPHER<sup style="font-size: 85%; vertical-align: text-top">®</sup> and BX VELOCITY<sup style="font-size: 85%; vertical-align: text-top">®</sup> Stents also infringed
Boston Scientific’s Jang ‘021 patent. The jury also found both of those patents valid. In January
2009, the Court of
Appeals for the Federal Circuit held the Ding patent invalid and a judgment in favor of Cordis in
that case has been entered. In March 2009, the Court of Appeals for the Federal Circuit upheld the
judgment that Cordis’ CYPHER<sup style="font-size: 85%; vertical-align: text-top">®</sup> Stent infringed Boston Scientific’s Jang patent.
The case has been remanded for a trial on the issues of damages and willfulness. The Jang case has
been dismissed as part of the January 2010 settlement described in the paragraph above relating to
the Express2™, Taxus<sup style="font-size: 85%; vertical-align: text-top">®</sup> and Liberte<sup style="font-size: 85%; vertical-align: text-top">®</sup> stents.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In Germany, Boston Scientific had several actions based on its Ding patents pending against
the Cordis CYPHER<sup style="font-size: 85%; vertical-align: text-top">®</sup> Stent. Boston Scientific also had brought actions in
Belgium, the Netherlands, Germany, France and Italy under its Kastenhofer patent, which purports to
cover two-layer catheters such as those used to deliver the CYPHER<sup style="font-size: 85%; vertical-align: text-top">®</sup> Stent.
These cases have been settled as part of the September 2009 settlement described above.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Trial in Boston Scientific’s U.S. case based on the Kastenhofer patent in Federal District
Court in California concluded in October 2007 with a jury finding that the patent was invalid. The
jury also found for Cordis on its counterclaim that sale by Boston Scientific of its balloon
catheters and stent delivery systems infringe Cordis’ Fontirroche patent. The Court has denied
Boston Scientific’s post trial motions. This case was settled as part of the September 2009
settlement described above.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In May 2008, Centocor, Inc. (Centocor) (now Centocor Ortho Biotech Inc. (COBI)) filed a
lawsuit against Genentech, Inc. (Genentech) in U.S. District Court for the Central District of
California seeking to invalidate the Cabilly II patent. Prior to filing suit, Centocor had a
sublicense under this patent from Celltech (who was licensed by Genentech) for
REMICADE<sup style="font-size: 85%; vertical-align: text-top">®</sup> and had been paying royalties to Celltech. Centocor has terminated
that sublicense and stopped paying royalties. Genentech has filed a counterclaim alleging that
REMICADE<sup style="font-size: 85%; vertical-align: text-top">®</sup> infringes its Cabilly II patents and that the manufacture of
REMICADE<sup style="font-size: 85%; vertical-align: text-top">®</sup>, STELARA™, SIMPONI™ and ReoPro<sup style="font-size: 85%; vertical-align: text-top">®</sup> also infringes
one of its other patents relating to the purification of antibodies made through recombinant DNA
techniques. The court has scheduled a hearing for Summary Judgment Motions in August 2010.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In April 2009, a bench trial was held before the Federal District Court for the Middle
District of Florida on the liability phase of Ciba’s patent infringement lawsuit alleging that
Johnson & Johnson Vision Care, Inc.’s (JJVC) ACUVUE<sup style="font-size: 85%; vertical-align: text-top">®</sup> OASYS™ lenses infringe
three of their Nicholson patents. In August 2009, the District Court found two of these patents
valid and infringed and entered judgment against JJVC. JJVC has appealed that judgment to the Court
of Appeals for the Federal Circuit. On March 22, 2010, the District Court will hold a hearing on
Ciba’s motion for a permanent injunction. If the judgment is upheld on appeal the Court will
schedule another trial to determine damages and willfulness.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In May 2009, Abbott Biotechnology Ltd. filed a patent infringement lawsuit against Centocor
(now COBI) in the United States District Court for the District of Massachusetts. The suit alleges
that Centocor’s SIMPONI™ product, a human anti-TNF alpha antibody, infringes Abbott’s ‘394 patent
(the Salfeld patent). The case has been stayed pending the resolution of an arbitration filed by
Centocor directed to its claim that it is licensed under the ‘394 patent. The arbitration is
scheduled for March 2010.
</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 COBI in the United States District Court for the District of
Massachusetts. The suit alleges that COBI’s STELARA™ product infringes two U.S. patents assigned to
Abbott GmbH. In August 2009, COBI filed a complaint for a declaratory judgment of non-infringement
and invalidity of the Abbott GmbH patents in the United States District Court for the District of
Columbia. On the same date, also in the United States District Court for the District of
Columbia, COBI filed a Complaint for Review of a Patent Interference Decision granting priority
of invention on one of the two asserted patents to Abbott GmbH. In August 2009, Abbott GmbH and
Abbott Laboratories Limited brought a patent infringement suit in Canada alleging that STELARA™
infringes Abbott GmbH’s Canadian patent. The cases filed by COBI in the District of Columbia have
been transferred to the District of Massachusetts.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In August 2009, Bayer Healthcare LLC filed suit against COBI in Massachusetts District Court
alleging infringement by COBI’s SIMPONI™ product of its patent relating to human anti-TNF
antibodies. Bayer has also filed suit under its European counterpart to these patents in Germany
and the Netherlands.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In June 2009, Centocor’s (now COBI) lawsuit alleging that Abbott’s HUMIRA anti-TNF alpha
product infringes Centocor’s ‘775 patent went to trial in Federal District Court in the Eastern
District of Texas. On June 28, 2009 a jury returned a verdict finding the patent valid and
willfully infringed, and awarded Centocor damages of approximately $1.7 billion. A bench trial on
Abbott’s defenses, of inequitable conduct and prosecution laches, was held in August 2009, and the District Court decided these
issues in favor of Centocor. All of Abbott’s post trial motions have been denied except that the
District Court granted Abbott’s motion to overturn the jury finding of willfulness. Judgment in the
amount of $1.9 billion was entered in favor of Centocor in December 2009 and Abbott has filed an
appeal to the Court of Appeals for the Federal Circuit. The Company has not reflected any of the
$1.9 billion in its consolidated financial statements. Centocor has also filed a new lawsuit in the
Eastern District of Texas seeking damages for infringement of the ‘775 patent attributable to sales
of HUMIRA subsequent to the jury verdict in June 2009.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The following chart summarizes various patent lawsuits concerning products of the Company’s
subsidiaries that have yet to proceed to trial:
</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" style="font-size: 6pt">
<td width="28%"> </td>
<td width="5%"> </td>
<td width="7%"> </td>
<td width="5%"> </td>
<td width="7%"> </td>
<td width="5%"> </td>
<td width="7%"> </td>
<td width="5%"> </td>
<td width="7%"> </td>
<td width="5%"> </td>
<td width="7%"> </td>
<td width="5%"> </td>
<td width="7%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left"><b>J&J</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"><b>Plaintiff/</b></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left"><b>Product</b></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>Company</b></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>Patents</b></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>Patent Holder</b></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>Court</b></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>Trial Date**</b></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>Date Filed</b></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="11" valign="top" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td valign="top">
<div style="margin-left:0px; text-indent:-0px">CYPHER<sup style="font-size: 85%; vertical-align: text-top">®</sup> Stent
</div></td>
<td> </td>
<td align="left" valign="top">Cordis
</td>
<td> </td>
<td align="left" valign="top">Wall
</td>
<td> </td>
<td align="left" valign="top">Wall
</td>
<td> </td>
<td align="left" valign="top">E.D. TX
</td>
<td> </td>
<td align="left" valign="top">Q2/11
</td>
<td> </td>
<td align="left" valign="top">11/07</td>
</tr>
<tr style="font-size: 5pt"><!-- Blank Space -->
<td> </td>
</tr>
<tr valign="bottom">
<td valign="top">
<div style="margin-left:0px; text-indent:-0px">CYPHER<sup style="font-size: 85%; vertical-align: text-top">®</sup> Stent
</div></td>
<td> </td>
<td align="left" valign="top">Cordis
</td>
<td> </td>
<td align="left" valign="top">Saffran
</td>
<td> </td>
<td align="left" valign="top">Saffran
</td>
<td> </td>
<td nowrap="nowrap" align="left" valign="top">E.D. TX
</td>
<td> </td>
<td align="left" valign="top">Q2/11
</td>
<td> </td>
<td align="left" valign="top">10/07</td>
</tr>
<tr style="font-size: 5pt"><!-- Blank Space -->
<td> </td>
</tr>
<tr valign="bottom">
<td valign="top">
<div style="margin-left:0px; text-indent:-0px">Blood Glucose Meters and Strips
</div></td>
<td> </td>
<td align="left" valign="top">LifeScan
</td>
<td> </td>
<td align="left" valign="top">Wilsey
</td>
<td> </td>
<td nowrap="nowrap" align="left" valign="top">Roche Diagnostics
</td>
<td> </td>
<td align="left" valign="top">D. DE
</td>
<td> </td>
<td align="left" valign="top">*
</td>
<td> </td>
<td align="left" valign="top">11/07</td>
</tr>
<tr style="font-size: 5pt"><!-- Blank Space -->
<td> </td>
</tr>
<tr valign="bottom">
<td valign="top">
<div style="margin-left:0px; text-indent:-0px">REMICADE<sup style="font-size: 85%; vertical-align: text-top">®</sup>, ustekinumab,
</div></td>
<td> </td>
<td align="left" valign="top">Centocor/COBI
</td>
<td> </td>
<td nowrap="nowrap" align="left" valign="top">Cabilly II
</td>
<td> </td>
<td align="left" valign="top">Genentech
</td>
<td> </td>
<td nowrap="nowrap" align="left" valign="top">C.D. CA
</td>
<td> </td>
<td align="left" valign="top">*
</td>
<td> </td>
<td align="left" valign="top">05/08</td>
</tr>
<tr valign="bottom">
<td valign="top">
<div style="margin-left:0px; text-indent:-0px">golimumab, ReoPro<sup style="font-size: 85%; vertical-align: text-top">®</sup>
</div></td>
<td> </td>
<td align="left" valign="top"> </td>
<td> </td>
<td align="left" valign="top"> </td>
<td> </td>
<td align="left" valign="top"> </td>
<td> </td>
<td align="left" valign="top"> </td>
<td> </td>
<td align="left" valign="top"> </td>
<td> </td>
<td align="left" valign="top"> </td>
</tr>
<tr style="font-size: 5pt"><!-- Blank Space -->
<td> </td>
</tr>
<tr valign="bottom">
<td valign="top">
<div style="margin-left:0px; text-indent:-0px">SIMPONI™
</div></td>
<td> </td>
<td align="left" valign="top">Centocor/COBI
</td>
<td> </td>
<td align="left" valign="top">Salfeld
</td>
<td> </td>
<td nowrap="nowrap" align="left" valign="top">Abbott Laboratories
</td>
<td> </td>
<td align="left" valign="top">MA
</td>
<td> </td>
<td align="left" valign="top">*
</td>
<td> </td>
<td align="left" valign="top">05/09</td>
</tr>
<tr style="font-size: 5pt"><!-- Blank Space -->
<td> </td>
</tr>
<tr valign="bottom">
<td valign="top">
<div style="margin-left:0px; text-indent:-0px">SIMPONI™
</div></td>
<td> </td>
<td align="left" valign="top">Centocor/COBI
</td>
<td> </td>
<td align="left" valign="top">Boyle
</td>
<td> </td>
<td align="left" valign="top">Bayer Healthcare
</td>
<td> </td>
<td align="left" valign="top">MA
</td>
<td> </td>
<td align="left" valign="top">*
</td>
<td> </td>
<td align="left" valign="top">08/09</td>
</tr>
<tr style="font-size: 5pt"><!-- Blank Space -->
<td> </td>
</tr>
<tr valign="bottom">
<td valign="top">
<div style="margin-left:0px; text-indent:-0px">STELARA™
</div></td>
<td> </td>
<td align="left" valign="top">Centocor/COBI
</td>
<td> </td>
<td align="left" valign="top">Salfeld
</td>
<td> </td>
<td align="left" valign="top">Abbott GmbH
</td>
<td> </td>
<td align="left" valign="top">MA/DC
</td>
<td> </td>
<td align="left" valign="top">*
</td>
<td> </td>
<td align="left" valign="top">08/09</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="1%"></td>
<td width="1%"></td>
<td width="98"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><i>*</i></td>
<td> </td>
<td><i>Trial date to be scheduled.</i></td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><i>**</i></td>
<td> </td>
<td><i>Q reflects the Company’s fiscal quarter.</i></td>
</tr>
</table>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>LITIGATION AGAINST FILERS OF ABBREVIATED NEW DRUG APPLICATIONS (ANDAs)</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following chart indicates lawsuits pending against generic firms 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 subsidiary of the Company involved is not successful in these actions, or
the statutory 30-month stay expires before a ruling from the district court is obtained, the firms
involved will have the ability, upon FDA approval, to introduce generic versions of the product at
issue resulting in very substantial market share and revenue losses for the product of the
Company’s subsidiary.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     As noted in the following chart, 30-month stays expired during 2009, and will expire in 2010,
2011 and 2012 with respect to ANDA challenges regarding various products:
</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="7%"> </td>
<td width="5%"> </td>
<td width="7%"> </td>
<td width="5%"> </td>
<td width="7%"> </td>
<td width="5%"> </td>
<td width="7%"> </td>
<td width="5%"> </td>
<td width="7%"> </td>
<td width="5%"> </td>
<td width="7%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left"><b>Brand Name</b></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>Patent/NDA</b></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>Generic</b></td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"><b>Trial</b></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>Date</b></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>30-Month</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left"><b>Product</b></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>Holder</b></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>Challenger</b></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>Court</b></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>Date**</b></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>Filed</b></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>Stay Expiration</b></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="11" valign="top" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td valign="top">
<div style="margin-left:0px; text-indent:-0px">CONCERTA<sup style="font-size: 85%; vertical-align: text-top">®</sup>
</div></td>
<td> </td>
<td align="left" valign="top">McNeil-PPC
</td>
<td> </td>
<td align="left" valign="top">Andrx
</td>
<td> </td>
<td align="left" valign="top">D. DE
</td>
<td> </td>
<td align="left" valign="top">Q4/07
</td>
<td> </td>
<td align="left" valign="top">09/05
</td>
<td> </td>
<td align="left" valign="top">None</td>
</tr>
<tr valign="bottom">
<td valign="top">
<div style="margin-left:0px; text-indent:-0px">18, 27, 36 and 54 mg controlled
release tablet
</div></td>
<td> </td>
<td align="left" valign="top">ALZA
</td>
<td> </td>
<td align="left" valign="top">KUDCO
</td>
<td> </td>
<td align="left" valign="top">D. DE
</td>
<td> </td>
<td align="left" valign="top">*
</td>
<td> </td>
<td align="left" valign="top">01/10
</td>
<td> </td>
<td align="left" valign="top">05/12</td>
</tr>
<tr style="font-size: 5pt"><!-- Blank Space -->
<td> </td>
</tr>
<tr valign="bottom">
<td nowrap="nowrap" valign="top">
<div style="margin-left:0px; text-indent:-0px">LEVAQUIN<sup style="font-size: 85%; vertical-align: text-top">®</sup> 250, 500, 750 mg tablet
</div></td>
<td> </td>
<td align="left" valign="top">Ortho-McNeil
</td>
<td> </td>
<td align="left" valign="top">Lupin
</td>
<td> </td>
<td align="left" valign="top">D. NJ
</td>
<td> </td>
<td align="left" valign="top">*
</td>
<td> </td>
<td align="left" valign="top">10/06
</td>
<td> </td>
<td align="left" valign="top">03/09</td>
</tr>
<tr>
<td> </td>
</tr>
<tr valign="bottom">
<td valign="top">
<div style="margin-left:0px; text-indent:-0px">ORTHO TRI-CYCLEN<sup style="font-size: 85%; vertical-align: text-top">®</sup> LO
</div></td>
<td> </td>
<td align="left" valign="top">Ortho-McNeil
</td>
<td> </td>
<td align="left" valign="top">Watson
</td>
<td> </td>
<td align="left" valign="top">D. NJ
</td>
<td> </td>
<td align="left" valign="top">*
</td>
<td> </td>
<td align="left" valign="top">10/08
</td>
<td> </td>
<td align="left" valign="top">03/11</td>
</tr>
<tr valign="bottom">
<td nowrap="nowrap" valign="top">
<div style="margin-left:0px; text-indent:-0px">0.18 mg/0.025 mg, 0.215 mg/0.025 mg <br />
and 0.25 mg/0.025 mg
</div></td>
<td> </td>
<td align="left" valign="top"> </td>
<td> </td>
<td align="left" valign="top">Sandoz
</td>
<td> </td>
<td nowrap="nowrap" align="left" valign="top">D. NJ<br />
D. NJ
</td>
<td> </td>
<td align="left" valign="top">*<br />
*
</td>
<td> </td>
<td align="left" valign="top">06/09
</td>
<td> </td>
<td align="left" valign="top">10/11<br />
06/12</td>
</tr>
<tr style="font-size: 5pt"><!-- Blank Space -->
<td> </td>
</tr>
<tr valign="bottom">
<td nowrap="nowrap" valign="top">
<div style="margin-left:0px; text-indent:-0px">ULTRAM ER<sup style="font-size: 85%; vertical-align: text-top">®</sup> 100, 200, 300 mg tablet
</div></td>
<td> </td>
<td nowrap="nowrap" align="left" valign="top">Ortho-McNeil/Biovail
</td>
<td> </td>
<td align="left" valign="top">Par
</td>
<td> </td>
<td align="left" valign="top">D. DE
</td>
<td> </td>
<td align="left" valign="top">Q2/09
</td>
<td> </td>
<td align="left" valign="top">05/07
</td>
<td> </td>
<td align="left" valign="top">09/09</td>
</tr>
<tr valign="bottom">
<td valign="top">
<div style="margin-left:0px; text-indent:-0px"> 
</div></td>
<td> </td>
<td align="left" valign="top"> </td>
<td> </td>
<td align="left" valign="top"> </td>
<td> </td>
<td align="left" valign="top"> </td>
<td> </td>
<td align="left" valign="top"> </td>
<td> </td>
<td align="left" valign="top">06/07
</td>
<td> </td>
<td align="left" valign="top">11/09</td>
</tr>
<tr valign="bottom">
<td valign="top">
<div style="margin-left:0px; text-indent:-0px"> 
</div></td>
<td> </td>
<td align="left" valign="top"> </td>
<td> </td>
<td align="left" valign="top"> </td>
<td> </td>
<td align="left" valign="top"> </td>
<td> </td>
<td align="left" valign="top"> </td>
<td> </td>
<td align="left" valign="top">10/07
</td>
<td> </td>
<td align="left" valign="top">03/10</td>
</tr>
<tr style="font-size: 5pt"><!-- Blank Space -->
<td> </td>
</tr>
<tr valign="bottom">
<td valign="top">
<div style="margin-left:0px; text-indent:-0px">ULTRAM ER<sup style="font-size: 85%; vertical-align: text-top">®</sup> 100, 200, 300 mg tablet
</div></td>
<td> </td>
<td align="left" valign="top">Ortho-McNeil/Biovail
</td>
<td> </td>
<td align="left" valign="top">Impax
</td>
<td> </td>
<td align="left" valign="top">D. DE
</td>
<td> </td>
<td align="left" valign="top">Q2/10
</td>
<td> </td>
<td align="left" valign="top">08/08
</td>
<td> </td>
<td align="left" valign="top">01/11</td>
</tr>
<tr valign="bottom">
<td valign="top">
<div style="margin-left:0px; text-indent:-0px"> 
</div></td>
<td> </td>
<td align="left" valign="top"> </td>
<td> </td>
<td align="left" valign="top"> </td>
<td> </td>
<td align="left" valign="top"> </td>
<td> </td>
<td align="left" valign="top"> </td>
<td> </td>
<td align="left" valign="top">11/08
</td>
<td> </td>
<td align="left" valign="top">03/11</td>
</tr>
<tr style="font-size: 5pt"><!-- Blank Space -->
<td> </td>
</tr>
<tr valign="bottom">
<td valign="top">
<div style="margin-left:0px; text-indent:-0px">ULTRAM ER<sup style="font-size: 85%; vertical-align: text-top">®</sup> 100, 200, 300 mg tablet
</div></td>
<td> </td>
<td align="left" valign="top">Ortho-McNeil/Biovail
</td>
<td> </td>
<td align="left" valign="top">Paddock
</td>
<td> </td>
<td nowrap="nowrap" align="left" valign="top">D.DRD. Minn.
</td>
<td> </td>
<td align="left" valign="top"> *
</td>
<td> </td>
<td align="left" valign="top">09/09
</td>
<td> </td>
<td align="left" valign="top">01/12</td>
</tr>
<tr style="font-size: 5pt"><!-- Blank Space -->
<td> </td>
</tr>
<tr valign="bottom">
<td valign="top">
<div style="margin-left:0px; text-indent:-0px">ULTRAM ER<sup style="font-size: 85%; vertical-align: text-top">®</sup> 100, 200, 300 mg tablet
</div></td>
<td> </td>
<td align="left" valign="top">Ortho-McNeil/Biovail
</td>
<td> </td>
<td align="left" valign="top">Cipher
</td>
<td> </td>
<td align="left" valign="top">D. DE
</td>
<td> </td>
<td align="left" valign="top">*
</td>
<td> </td>
<td align="left" valign="top">10/09
</td>
<td> </td>
<td align="left" valign="top">03/12</td>
</tr>
<tr style="font-size: 5pt"><!-- Blank Space -->
<td> </td>
</tr>
<tr valign="bottom">
<td valign="top">
<div style="margin-left:0px; text-indent:-0px">ULTRAM ER<sup style="font-size: 85%; vertical-align: text-top">®</sup> 100, 200, 300 mg tablet
</div></td>
<td> </td>
<td align="left" valign="top">Ortho-McNeil/Biovail
</td>
<td> </td>
<td align="left" valign="top">Lupin
</td>
<td> </td>
<td align="left" valign="top">D. DE
</td>
<td> </td>
<td align="left" valign="top">*
</td>
<td> </td>
<td align="left" valign="top">01/10
</td>
<td> </td>
<td align="left" valign="top">06/12</td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left">
<div style="font-size: 3pt; margin-top: 12pt; 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="1%"></td>
<td width="1%"></td>
<td width="98"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><i>*</i></td>
<td> </td>
<td><i>Trial date to be scheduled.</i></td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><i>**</i></td>
<td> </td>
<td><i>Q reflects the Company’s fiscal quarter.</i></td>
</tr>
</table>
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<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In the action against Barr Pharmaceuticals, Inc. (Barr) (now a wholly-owned
subsidiary of Teva Pharmaceutical Industries LTD.) regarding ORTHO TRI-CYCLEN<sup style="font-size: 85%; vertical-align: text-top">®</sup>
LO, in January 2008, the Company’s subsidiary Ortho Women’s Health & Urology, a Division of
Ortho-McNeil-Janssen Pharmaceuticals, Inc. (OMJPI), and Barr agreed to a non-binding term sheet to
settle the litigation, which settlement discussions are still underway. The trial court postponed
the January 2008 trial without setting a new trial date. In June 2009, Barr launched its generic
product “at risk” before trial. OMJPI sought a preliminary injunction and recall of Barr product
which the Court
granted in July 2009. In July 2009, the parties entered into a definitive agreement to settle the
lawsuit. Under the terms of the settlement, Barr obtained a release for its sales of its generic
product in exchange for an undisclosed royalty payment. Barr also obtained a non-exclusive,
royalty-bearing license to re-enter the market on December 31, 2015, or earlier in certain limited
circumstances.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In October 2008, the Company’s subsidiary OMJPI filed suit in Federal District Court in New
Jersey against Watson Laboratories, Inc. (Watson) in response to Watson’s ANDA regarding ORTHO
TRI-CYCLEN<sup style="font-size: 85%; vertical-align: text-top">®</sup> LO. In June 2009, the Company’s subsidiary OMJPI filed suit in
Federal District Court in New Jersey against Sandoz Laboratories, Inc. (Sandoz) in response to
Sandoz’s ANDA regarding ORTHO TRI-CYCLEN<sup style="font-size: 85%; vertical-align: text-top">®</sup> LO. The Sandoz and Watson cases have
been consolidated.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In January 2010, the Company’s subsidiary OMJPI filed suit in Federal District Court in New
Jersey against Lupin Ltd. and Lupin Pharmaceuticals, Inc. (collectively “Lupin”) in response to
Lupin’s ANDA regarding ORTHO TRI-CYCLEN<sup style="font-size: 85%; vertical-align: text-top">®</sup> LO.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In the action against Barr and AlphaPharm with respect to their ANDA challenges to the
RAZADYNE<sup style="font-size: 85%; vertical-align: text-top">®</sup> patent that Janssen (now OMJPI) licenses from Synaptech, Inc.
(Synaptech), a four-day non-jury trial was held in the Federal District Court in Delaware in May
2007. In August 2008, the court held that the patent was invalid because it was not enabled.
Janssen (OMJPI) and Synaptech have appealed the decision. Since the court’s decision, multiple
generic companies have received final approvals for their products and have launched “at risk”
pending appeal. Additional generic approvals and launches could occur at any time. In September
2009, the Court of Appeals affirmed the judgment that the patent is invalid.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In the action by McNEIL-PPC, Inc. (McNeil-PPC) and ALZA Corporation (ALZA) against Andrx
Corporation (Andrx) with respect to its ANDA challenge to the CONCERTA<sup style="font-size: 85%; vertical-align: text-top">®</sup>
patents, a five-day non-jury trial was held in the Federal District Court in Delaware in December
2007. In March 2009, the court ruled that one CONCERTA<sup style="font-size: 85%; vertical-align: text-top">®</sup> patent would not be
infringed by Andrx’s proposed generic product and that the patent was invalid because it was not
enabled. The court dismissed without prejudice Andrx’s declaratory judgment suit on a second patent
for lack of jurisdiction. McNeil-PPC and ALZA filed an appeal in May 2009. The appeals court heard
argument on February 3, 2010. A decision is pending.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     ALZA and OMJPI filed a second suit in Federal District Court in Delaware against
Kremers-Urban, LLC and KUDCO Ireland, Ltd. (KUDCO) in January 2010 in response to KUDCO’s ANDA
challenge regarding CONCERTA<sup style="font-size: 85%; vertical-align: text-top">®</sup> tablets. In its notice letter, KUDCO contends
that two ALZA patents for CONCERTA<sup style="font-size: 85%; vertical-align: text-top">®</sup> are invalid and not infringed by a KUDCO
generic.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In the RAZADYNE<sup style="font-size: 85%; vertical-align: text-top">®</sup> ER cases, a lawsuit was filed against Barr on the
RAZADYNE<sup style="font-size: 85%; vertical-align: text-top">®</sup> use patent that Janssen (now OMJPI) licenses from Synaptech in June
2006. In September 2008, the above-discussed Delaware decision invalidating the
RAZADYNE<sup style="font-size: 85%; vertical-align: text-top">®</sup> use patent resulted in entry of judgment for Barr on that patent,
but the case will be reopened if Janssen (now OMJPI) and Synaptech win on appeal. Barr has received
FDA approval of its product and has launched “at risk.” In September 2009, the Federal Circuit
affirmed
the Delaware decision invalidating the RAZADYNE<sup style="font-size: 85%; vertical-align: text-top">®</sup> use patent. As a result, this
case will not be reopened.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In the action against Lupin Pharmaceuticals, Inc. (Lupin) regarding its ANDA concerning
LEVAQUIN<sup style="font-size: 85%; vertical-align: text-top">®</sup>, Lupin contends that the U.S. Patent and Trademark Office improperly
granted a patent term extension to the patent that Ortho-McNeil (now Ortho-McNeil-Janssen
Pharmaceuticals, Inc. (OMJPI)) licenses from Daiichi Pharmaceuticals, Inc. (Daiichi). Lupin alleges
that the active ingredient in LEVAQUIN<sup style="font-size: 85%; vertical-align: text-top">®</sup> was the subject of prior marketing,
and therefore was not eligible for the patent term extension. Lupin concedes validity and that its
product would violate the patent if marketed prior to the expiration of the original patent term.
Summary judgment against Lupin was granted in May 2009 and Lupin appealed. Oral argument was held
in September 2009. A decision is pending.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In the ULTRAM<sup style="font-size: 85%; vertical-align: text-top">®</sup> ER actions, Ortho-McNeil Pharmaceutical, Inc.
(Ortho-McNeil) (now OMJPI), filed lawsuits (each for different dosages) against Par
Pharmaceuticals, Inc. and Par Pharmaceuticals Companies, Inc. (Par) in May, June and October 2007
on two Tramadol ER formulation patents owned by Purdue Pharma Products L.P. (Purdue) and Napp
Pharmaceutical Group Ltd. (Napp). OMJPI also filed lawsuits (each for different dosages) against
Impax Laboratories, Inc. (Impax) on a Tramadol ER formulation patent owned by Purdue and Napp in
August and November 2008. Purdue, Napp and Biovail Laboratories International SRL (Biovail) (the
NDA holder) joined as co-plaintiffs in the lawsuits against Par and Impax, but Biovail and OMJPI
were subsequently dismissed for lack of standing. The trial against Par took place in April 2009.
In August 2009, the Court issued a decision finding the patents-in-suit invalid. Purdue has
appealed that decision. The trial against Impax is scheduled for June 2010. In November 2009, the
case against Impax was stayed with the consent of all parties. In September and October 2009,
respectively, Purdue filed suits against Paddock Laboratories, Inc. (Paddock) and Cipher
Pharmaceuticals Inc. (Cipher) on its Tramadol ER formulation patents.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In January 2010, Purdue filed a suit against Lupin Ltd. (Lupin) on its Tramadol ER formulation
patents.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In September 2009, Centocor Ortho Biotech Products, L.P. (COBI, LP) intervened in an
inventorship dispute between Kansas University Center for Research (KUCR) involving certain U.S.
government-owned VELCADE<sup style="font-size: 85%; vertical-align: text-top">®</sup> formulation patents. KUCR brought this action
against the U.S. government in the District of Kansas seeking to add two Kansas University
scientists to the patents. The U.S. government licensed the patents (and their foreign
counterparts) to Millennium Pharmaceuticals, Inc., who in turn sublicensed the patents (and their
foreign counterparts) to COBI,LP for commercial marketing outside the U.S. If KUCR succeeds in its
co-inventorship claim and establishes co-ownership in the U.S. VELCADE<sup style="font-size: 85%; vertical-align: text-top">®</sup>
formulation patents, we anticipate that KUCR will initiate actions to establish co-inventorship and
co-ownership with respect to the foreign counterpart patents in the countries where COBI, LP has
commercial marketing rights. If KUCR in Kansas is successful, this may adversely affect COBI, LP’s
license rights in those countries.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>AVERAGE WHOLESALE PRICE (AWP) LITIGATION</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Johnson & Johnson and several of its pharmaceutical subsidiaries, 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. Many of these cases,
both federal actions and state actions
removed to federal court, have been consolidated for pre-trial purposes in a Multi-District
Litigation (MDL) in Federal District Court in Boston, Massachusetts. The plaintiffs in these cases
include 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.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The MDL Court identified classes of Massachusetts-only private insurers providing “Medi-gap”
insurance coverage and private payers for physician-administered drugs where payments were based on
AWP (“Class 2” and “Class 3”), and a national class of individuals who made co-payments for
physician-administered drugs covered by Medicare (“Class 1”). A trial of the two Massachusetts-only
class actions concluded before the MDL Court in December 2006. In June 2007, the MDL Court issued
post-trial rulings, dismissing the Johnson & Johnson defendants from the case regarding all claims
of Classes 2 and 3, and subsequently of Class 1 as well. Plaintiffs appealed the Class 1 judgment
and, in September 2009, the Court of Appeals vacated the judgment and remanded for further
proceedings in the District Court. AWP cases brought by various Attorneys General have proceeded to
trial against other manufacturers. One state case against certain of the Company’s subsidiaries has
been set for trial in late 2010, and other state cases are likely to be set for trial thereafter.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>OTHER</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In July 2003, Centocor (now COBI), a Johnson & Johnson subsidiary, received a request that it
voluntarily provide documents and information to the criminal division of the U.S. Attorney’s
Office, District of New Jersey, in connection with its investigation into various Centocor
marketing practices. Subsequent requests for documents have been received from the U.S. Attorney’s
Office. Both the Company and Centocor have responded to these requests for documents and
information.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In December 2003, Ortho-McNeil (now OMJPI) received a subpoena from the U.S. Attorney’s Office
in Boston, Massachusetts seeking documents relating to the marketing, including alleged off-label
marketing, of the drug TOPAMAX<sup style="font-size: 85%; vertical-align: text-top">®</sup> (topiramate). Additional subpoenas for
documents have been received, and current and former employees have testified before a grand jury.
Discussions are underway in an effort to resolve this matter, but whether agreement can be reached
and on what terms is uncertain.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In January 2004, Janssen (now OMJPI) received a subpoena from the Office of the Inspector
General of the U.S. 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> (risperidone) from 1997 to 2002. Documents subsequent
to 2002 have also been requested. 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 U.S. Attorney’s Office
for the Eastern District of Pennsylvania in November 2005. Subpoenas seeking testimony from various
witnesses before a grand jury have also been received. Janssen is cooperating in responding to
ongoing requests for documents and witnesses. The government is continuing to actively investigate
this matter. 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>.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In September 2004, Ortho Biotech Inc. (Ortho Biotech) (now COBI), received a subpoena from the
U.S. Office of Inspector General’s Denver, Colorado field office seeking documents directed to the
sales and marketing of PROCRIT<sup style="font-size: 85%; vertical-align: text-top">®</sup> (Epoetin alfa) from 1997 to the present, as
well as to dealings with U.S. Oncology Inc., a healthcare services network for oncologists. Ortho
Biotech (now COBI) has responded to the subpoena.
</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 Federal District Court in New Jersey moved to certify a class of all African
American and Hispanic salaried employees of the Company and its affiliates in the U.S., who were
employed at any time from November 1997 to the present. Plaintiffs seek 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 is opposing.
Plaintiffs are engaged in further discovery of individual plaintiffs’ claims. The hearing on
plaintiffs’ motion for class certification is scheduled for July 2010.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In March 2005, DePuy Orthopaedics, Inc. (DePuy), a Johnson & Johnson subsidiary, received a
subpoena from the U.S. Attorney’s Office, District of New Jersey, seeking records concerning
contractual relationships between DePuy and surgeons or surgeons-in-training involved in hip and
knee replacement and reconstructive surgery. This investigation was resolved by DePuy and the four
other leading suppliers of hip and knee implants in late September 2007 by agreements with the U.S.
Attorney’s Office for the District of New Jersey. The settlements included an 18-month Deferred
Prosecution Agreement (DPA), acceptance by each company of a monitor to assure compliance with the
DPA and, with respect to four of the five companies, payment of settlement monies and entry into
five year Corporate Integrity Agreements. DePuy paid $85 million as its settlement. The term of the
Monitor-ship under the Deferred Prosecution Agreement concluded on March 27, 2009, and an order
dismissing all charges was entered on March 30, 2009.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In November 2007, the Attorney General of the Commonwealth of Massachusetts issued a Civil
Investigative Demand to DePuy seeking information regarding financial relationships between a
number of Massachusetts-based orthopedic surgeons and providers and DePuy. DePuy is responding to
Massachusetts’ additional requests.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In July 2005, Scios Inc. (Scios), a Johnson & Johnson subsidiary, received a subpoena from the
U.S. Attorney’s Office, District of Massachusetts, seeking documents related to the sales and
marketing of NATRECOR<sup style="font-size: 85%; vertical-align: text-top">®</sup>. Scios responded to the subpoena. In early August 2005,
Scios was advised that the investigation would be handled by the U.S. Attorney’s Office for the
Northern District of California in San Francisco. Additional requests for documents have been
received and responded to and former Scios employees have testified before a grand jury in San
Francisco. The qui tam complaints were unsealed on February 19, 2009. The U.S. government
has intervened in one of the qui tam actions, and filed a complaint against Scios and the Company
in June 2009. Scios and Johnson & Johnson have filed a motion to dismiss the qui tam complaint
filed by the government, and that motion was denied. The criminal investigation is continuing and
discussions are underway in an effort to settle this matter. Whether a settlement can be reached
and on what terms is uncertain.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In September 2005, the Company received a subpoena from the U.S. Attorney’s Office, District
of Massachusetts, seeking documents related to sales and marketing of eight drugs to Omnicare,
Inc., a manager of pharmaceutical benefits for long-term care facilities. The Johnson & Johnson
subsidiaries involved responded to the subpoena. Several employees of the Company’s pharmaceutical
subsidiaries have been subpoenaed to testify before a grand jury in connection with this
investigation. In April 2009, the Company was served with the complaints in two civil qui tam cases
related to
marketing of prescription drugs to Omnicare, Inc. On January 15, 2010, the government filed a
complaint intervening in the cases. The complaint asserts claims under the federal False Claims Act
and a related state law claim in connection with the marketing of several drugs to Omnicare.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In November 2005, Amgen Inc. (Amgen) filed suit against Hoffmann-LaRoche, Inc. (Roche) in the
U.S. District Court for the District of Massachusetts seeking a declaration that the Roche product
CERA, which Roche has indicated it would seek to introduce into the United States, infringes a
number of Amgen patents concerning EPO. Amgen licenses EPO for sale in the United States to Ortho
Biotech (now COBI) for non-dialysis indications. Trial in this action concluded in October 2007
with a verdict in Amgen’s favor, finding the patents valid and infringed. The judge issued a
preliminary injunction blocking the CERA launch, and subsequently made the injunction permanent.
The Federal Circuit upheld the entry of a permanent injunction. This matter has been settled
pursuant to an agreement between the parties.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In February 2006, the Company received a subpoena from the U.S. Securities & Exchange
Commission (SEC) requesting documents relating to the participation by several Johnson & Johnson
subsidiaries in the United Nations Iraq Oil for Food Program. The subsidiaries are cooperating with
the SEC and U.S. Department of Justice (DOJ) in producing responsive documents.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In February 2007, the Company voluntarily disclosed to the DOJ and the 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
have been brought to the attention of the agencies by the Company. The Company has provided and
will continue to provide additional information to the DOJ and SEC, and will cooperate with the
agencies’ reviews of these matters. Law enforcement agencies of a number of other countries are
also pursuing investigations of matters voluntarily disclosed by the Company to the DOJ and SEC.
Discussions are underway in an effort to resolve these matters, and the Iraq Oil for Food matter
referenced above, but whether agreement can be reached and on what terms is uncertain.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In March 2007, the Company received separate subpoenas from the U.S. Attorney’s Office in
Philadelphia, the U.S. Attorney’s Office in Boston and the U.S. Attorney’s Office in San Francisco.
The subpoenas relate to investigations by these three offices referenced above concerning,
respectively, sales and marketing of RISPERDAL<sup style="font-size: 85%; vertical-align: text-top">®</sup> by Janssen (now OMJPI),
TOPAMAX<sup style="font-size: 85%; vertical-align: text-top">®</sup> by Ortho-McNeil (now OMJPI) and NATRECOR<sup style="font-size: 85%; vertical-align: text-top">®</sup> by
Scios. The subpoenas request information regarding the Company’s corporate supervision and
oversight of these three subsidiaries, including their sales and marketing of these drugs. The
Company responded to these requests. In addition, the U.S. Attorney’s Office in Boston has issued
subpoenas for grand jury testimony to several employees of Johnson & Johnson.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In May 2007, the New York State Attorney General issued a subpoena seeking information
relating to the marketing and safety of PROCRIT<sup style="font-size: 85%; vertical-align: text-top">®</sup>. The Company is responding to
these requests.
</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 January 2008, the European Commission (“EC”) began an industry-wide antitrust inquiry
concerning competitive conditions within the pharmaceutical sector. Because this is a sector
inquiry, it is not based on any specific allegation that the Company has violated EC competition
law. The inquiry began with unannounced raids of a substantial number of pharmaceutical companies
throughout Europe, including Johnson & Johnson affiliates. In March 2008, the EC issued detailed
questionnaires to approximately 100 companies, including Johnson & Johnson affiliates. In November
2008, the EC issued a preliminary report summarizing its findings. The final report was issued on
July 8, 2009.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In March 2008, the Company received a letter request from the Attorney General of the State of
Michigan. The request seeks documents and information relating to nominal price transactions. The
Company responded to the request and will cooperate with the inquiry.
</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 the Company’s Cordis
subsidiary. Cordis is cooperating in responding to the subpoena.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In September 2008, Multilan AG (Multilan), an indirect subsidiary of Schering-Plough
Corporation, commenced arbitration against Janssen Pharmaceutica NV for an alleged wrongful
termination of an agreement relating to payments in connection with termination of certain
marketing rights. Multilan seeks declaratory relief, specific performance and damages. This case
was recently settled and a charge was recorded to other income (expense), net, in the fiscal fourth
quarter of 2009.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In February 2009, Basilea Pharmaceutica AG (Basilea) brought an arbitration against the
Company and various affiliates alleging that the Company breached the 2005 License Agreement for
cefto-biprole by, among other things, failing to secure FDA approval of the cSSSI (skin) indication
and allegedly failing to properly develop the pneumonia indication. Basilea is seeking to recover
damages and a declaration that the Company materially breached the agreement. This matter has been
scheduled for an arbitration hearing commencing in June 2010 followed by post-trial submissions.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In April 2009, the Company received a HIPPA subpoena from the U.S. Attorney’s Office for the
District of Massachusetts (Boston) seeking information regarding the Company’s financial
relationship with several psychiatrists. The Company is responding to this request.
</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
U.S. 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. The Company is in the process of
complying with the subpoena. In the weeks following the public announcement that OCD had received a
subpoena from the Antitrust Division, multiple class action complaints were filed. The various
cases were consolidated for pre-trial purposes in the Eastern District of Pennsylvania.
</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. The Company is responding to
these requests.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In May 2009, COBI commenced an arbitration proceeding before the American Arbitration
Association against Schering-Plough Corporation and its subsidiary Schering-Plough (Ireland)
Company (collectively, Schering-Plough). COBI and Schering-Plough are parties to a series of
agreements (the 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™ worldwide, except within the United States, Japan,
Taiwan, Indonesia, and the People’s Republic of China (including Hong Kong) (the “Territory”). COBI
distributes REMICADE<sup style="font-size: 85%; vertical-align: text-top">®</sup> and SIMPONI™, the next generation treatment, within the
United States. In the arbitration, COBI seeks a declaration that the agreement and merger between
Merck & Co., Inc. (Merck) and Schering-Plough constitutes a change of control under the terms of
the Distribution Agreements that permits COBI to terminate the Agreements. The termination of the
Distribution Agreements would return to COBI the right to distribute REMICADE<sup style="font-size: 85%; vertical-align: text-top">®</sup>
and SIMPONI™ within the Territory. Schering-Plough has filed a response to COBI’s arbitration
demand that denies that it has undergone a change of control. The arbitrators have been selected
and the matter will be proceeding to arbitration in late September 2010.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In December 2009, the State of Israel (Sheba Medical Center) filed a lawsuit against three
Omrix entities. In the lawsuit, the State claimed that an employee of a government-owned hospital
was the inventor on several patents related to fibrin glue technology, that he 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 royalty 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 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">     With respect to all the above matters, the Company and its subsidiaries are vigorously
contesting the allegations asserted against them and otherwise pursuing defenses to maximize the
prospect of success. The Company and its subsidiaries involved in these matters continually
evaluate their strategies in managing these matters and, where appropriate, pursue settlements and
other resolutions where those are in the best interest of the Company.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company is also involved in a number of other patent, trademark and other lawsuits
incidental to its business. The ultimate legal and financial liability of the Company in respect to
all claims, lawsuits and proceedings referred to above cannot be estimated with any certainty.
However, 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 condition, although the resolution in any reporting period of one or more of
these matters could have a significant impact on the Company’s results of operations and cash flows
for that period.
</div>
</div>
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<!-- Begin Block Tagged Note 22 - us-gaap:RestructuringAndRelatedActivitiesDisclosureTextBlock-->
<div style="font-family: Helvetica,Arial,sans-serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt"><b>22. Restructuring</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In the fourth quarter of 2009, the Company announced global restructuring initiatives designed
to strengthen the Company’s position as one of the world’s leading global health care companies.
This program will allow the Company to invest in new growth platforms; ensure the successful launch
of its many new products and continued growth of its core businesses; and provide flexibility to
adjust to the changed and evolving global environment.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     During the fiscal fourth quarter of 2009, the Company recorded $1.2 billion in related pre-tax
charges of which, approximately $830 million of the pre-tax restructuring charges are expected to
require cash payments. The $1.2 billion of restructuring charges consists of
severance costs of $748 million, asset write-offs of $362 million and $76 million related to
leasehold and contract obligations. The $362 million of asset write-offs relate to inventory of
$113 million (recorded in cost of products sold), property, plant and equipment of $107 million,
intangible assets of $81 million and other assets of $61 million. Additionally, as part of this
program the Company plans to eliminate approximately 7,500 positions of which approximately 700
have been eliminated since the restructuring was announced.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The following table summarizes the severance charges and the associated spending for the
fiscal year ended 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="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 nowrap="nowrap" align="right" colspan="2"><b>Asset</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left"><b>(Dollars in Millions)</b></td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Severance</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Write-Offs</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Other</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right" colspan="2"><b>Total</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="15" 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">2009 restructuring charge
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">748</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">362</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">76</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,186</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Current year activity
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(62</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(149</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(28</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(239</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="15" nowrap="nowrap" 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, January 3, 2010*
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">686</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">213</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">48</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">947</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="15" align="left" style="border-top: 3px double #000000"> </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="2%"></td>
<td width="1%"></td>
<td width="97"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">*</td>
<td> </td>
<td><i>Cash outlays for severance are expected to be substantially paid out over the next 12 to 18 months in accordance with the Company’s plans and local laws.</i></td>
</tr>
</table>
<div align="left" style="font-size: 10pt; margin-top: 6pt">For additional information on the restructuring as it relates to the segments, see Note 18.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In the third quarter of 2007, the Company announced restructuring initiatives in an effort to
improve its overall cost structure. This action was taken to offset the anticipated negative
impacts associated with generic competition in the Pharmaceutical segment and challenges in the
drug-eluting stent market. The Company’s Pharmaceuticals segment has reduced its cost base by
consolidating certain operations, while continuing to invest in recently launched products and its
late-stage pipeline of new products. The Cordis franchise has moved to a more integrated business
model to address the market changes underway with drug-eluting stents and to better serve the broad
spectrum of its patients’ cardiovascular needs, while reducing its cost base. The Company
accelerated steps to standardize and streamline certain aspects of its enterprise-wide functions
such as human resources, finance and information technology to support growth across the business,
while also leveraging its scale more effectively in areas such as procurement to benefit its
operating companies. Additionally, as part of this program the Company eliminated approximately
4,600 positions.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company recorded $745 million in related pre-tax charges during the fiscal third quarter
of 2007, of which, approximately $500 million of the pre-tax restructuring charges required cash
payments. The $745 million of restructuring charges consists of severance costs of $450 million,
asset write-offs of $272 million and $23 million related to leasehold obligations. The $272 million
of asset write-offs relate to property, plant and equipment of $166 million, intangible assets of
$48 million and other assets of $58 million. The restructuring initiative announced in 2007 has
been completed.
</div>
</div>
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<!-- Begin Block Tagged Note 23 - us-gaap:ScheduleOfSubsequentEventsTextBlock-->
<div style="font-family: Helvetica,Arial,sans-serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>23. Subsequent Events</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">On January 20, 2010, the Company completed the acquisition of Acclarent Inc. for a net purchase<br />
price of approximately $785 million. Acclarent Inc. is a medical technology company dedicated to<br />
designing, developing and commercializing devices that address conditions affecting the ear, nose<br />
and throat.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company has performed an evaluation of subsequent events through March 1, 2010, the date
the Company issued these financial statements.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="margin-left: 0%">
<!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->
</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 24 - us-gaap:ScheduleOfValuationAndQualifyingAccountsDisclosureTextBlock-->
<div style="margin-left: 0%">
<div style="display: none">
Schedule Of Valuation And Qualifying Accounts Disclosure
</div>
<br />
<div style="margin-top: 18pt; font-size: 1pt"> 
</div>
<div align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #ffffff">
<b><font style="font-family: 'Times New Roman', Times">JOHNSON &
JOHNSON AND SUBSIDIARIES</font></b>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #ffffff">
<b>SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS</b>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #ffffff">
<b>Fiscal Years Ended January 3, 2010, December 28,
2008 and December 30, 2007</b>
</div>
<div align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #ffffff">
<b>(Dollars in Millions)</b>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<table border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #ffffff; text-align: left">
<!-- Table Width Row BEGIN -->
<tr style="font-size: 1pt" valign="bottom">
<td width="53%"> </td><!-- colindex=01 type=maindata -->
<td width="2%"> </td><!-- colindex=02 type=gutter -->
<td width="1%" align="right"> </td><!-- colindex=02 type=lead -->
<td width="7%" align="right"> </td><!-- colindex=02 type=body -->
<td width="1%" align="left"> </td><!-- colindex=02 type=hang1 -->
<td width="3%"> </td><!-- colindex=03 type=gutter -->
<td width="1%" align="right"> </td><!-- colindex=03 type=lead -->
<td width="5%" align="right"> </td><!-- colindex=03 type=body -->
<td width="1%" align="left"> </td><!-- colindex=03 type=hang1 -->
<td width="4%"> </td><!-- colindex=04 type=gutter -->
<td width="1%" align="right"> </td><!-- colindex=04 type=lead -->
<td width="10%" align="right"> </td><!-- colindex=04 type=body -->
<td width="1%" align="left"> </td><!-- colindex=04 type=hang1 -->
<td width="3%"> </td><!-- colindex=05 type=gutter -->
<td width="1%" align="right"> </td><!-- colindex=05 type=lead -->
<td width="5%" align="right"> </td><!-- colindex=05 type=body -->
<td width="1%" align="left"> </td><!-- colindex=05 type=hang1 -->
</tr>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<tr style="font-size: 8pt" valign="bottom" align="center">
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom">
<b>Balance at<br />
</b>
</td>
<td>
 
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom">
<b>Balance at<br />
</b>
</td>
<td>
 
</td>
</tr>
<tr style="font-size: 8pt" valign="bottom" align="center">
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom">
<b>Beginning of<br />
</b>
</td>
<td>
 
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom">
<b>End of<br />
</b>
</td>
<td>
 
</td>
</tr>
<tr style="font-size: 8pt" valign="bottom" align="center">
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
<b>Period</b>
</td>
<td>
 
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
<b>Accruals</b>
</td>
<td>
 
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
<b>Payments/ Other</b>
</td>
<td>
 
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
<b>Period</b>
</td>
<td>
 
</td>
</tr>
<tr style="line-height: 3pt; font-size: 1pt">
<td> 
</td>
</tr>
<!-- TableOutputBody -->
<tr valign="bottom" style="background: #cceeff">
<td nowrap="nowrap" align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 10pt">
2009
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom">
<td nowrap="nowrap" align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 10pt">
Accrued
Rebates<sup style="font-size: 85%; vertical-align: top">(1)</sup>
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
1,808
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
6,584
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
(6,753
</td>
<td nowrap="nowrap" align="left" valign="bottom">
)
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
1,639
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td nowrap="nowrap" align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 10pt">
Accrued Returns
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
794
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
355
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
(460
</td>
<td nowrap="nowrap" align="left" valign="bottom">
)
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
689
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom">
<td nowrap="nowrap" align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 10pt">
Accrued Promotions
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
356
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
2,446
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
(2,373
</td>
<td nowrap="nowrap" align="left" valign="bottom">
)
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
429
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom" style="font-size: 1pt">
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td>
 
</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td nowrap="nowrap" align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 10pt">
Subtotal
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
2,958
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
9,385
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
(9,586
</td>
<td nowrap="nowrap" align="left" valign="bottom">
)
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
2,757
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom">
<td align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 10pt">
Reserve for doubtful accounts
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
267
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
110
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
(44
</td>
<td nowrap="nowrap" align="left" valign="bottom">
)
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
333
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 10pt">
Reserve for cash discounts
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
79
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
1,163
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
(1,141
</td>
<td nowrap="nowrap" align="left" valign="bottom">
)
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
101
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom" style="font-size: 1pt">
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td>
 
</td>
</tr>
<tr valign="bottom">
<td nowrap="nowrap" align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 10pt">
Total
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
3,304
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
10,658
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
(10,771
</td>
<td nowrap="nowrap" align="left" valign="bottom">
)
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
3,191
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom" style="font-size: 1pt">
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td>
 
</td>
</tr>
<tr valign="bottom" style="line-height: 9pt">
<td>
 
</td>
<td>
 
</td>
<td>
 
</td>
<td>
 
</td>
<td>
 
</td>
<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 nowrap="nowrap" align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 10pt">
2008
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom">
<td nowrap="nowrap" align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 10pt">
Accrued
Rebates<sup style="font-size: 85%; vertical-align: top">(1)</sup>
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
1,802
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
5,578
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
(5,572
</td>
<td nowrap="nowrap" align="left" valign="bottom">
)
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
1,808
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td nowrap="nowrap" align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 10pt">
Accrued Returns
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
648
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
402
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
(256
</td>
<td nowrap="nowrap" align="left" valign="bottom">
)
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
794
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom">
<td nowrap="nowrap" align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 10pt">
Accrued Promotions
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
578
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
2,991
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
(3,213
</td>
<td nowrap="nowrap" align="left" valign="bottom">
)
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
356
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom" style="font-size: 1pt">
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td>
 
</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td nowrap="nowrap" align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 10pt">
Subtotal
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
3,028
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
8,971
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
(9,041
</td>
<td nowrap="nowrap" align="left" valign="bottom">
)
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
2,958
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom">
<td align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 10pt">
Reserve for doubtful accounts
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
193
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
101
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
(27
</td>
<td nowrap="nowrap" align="left" valign="bottom">
)
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
267
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 10pt">
Reserve for cash discounts
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
71
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
905
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
(897
</td>
<td nowrap="nowrap" align="left" valign="bottom">
)
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
79
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom" style="font-size: 1pt">
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td>
 
</td>
</tr>
<tr valign="bottom">
<td nowrap="nowrap" align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 10pt">
Total
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
3,292
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
9,977<sup style="font-size: 85%; vertical-align: top">(2</sup>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
<sup style="font-size: 85%; vertical-align: top">)</sup>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
(9,965
</td>
<td nowrap="nowrap" align="left" valign="bottom">
)
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
3,304
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom" style="font-size: 1pt">
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td>
 
</td>
</tr>
<tr valign="bottom" style="line-height: 9pt">
<td>
 
</td>
<td>
 
</td>
<td>
 
</td>
<td>
 
</td>
<td>
 
</td>
<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 nowrap="nowrap" align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 10pt">
2007
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom">
<td nowrap="nowrap" align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 10pt">
Accrued
Rebates<sup style="font-size: 85%; vertical-align: top">(1)</sup>
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
1,691
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
5,243
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
(5,132
</td>
<td nowrap="nowrap" align="left" valign="bottom">
)
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
1,802
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td nowrap="nowrap" align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 10pt">
Accrued Returns
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
599
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
395
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
(346
</td>
<td nowrap="nowrap" align="left" valign="bottom">
)
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
648
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom">
<td nowrap="nowrap" align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 10pt">
Accrued Promotions
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
457
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
2,908
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
(2,787
</td>
<td nowrap="nowrap" align="left" valign="bottom">
)
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
578
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom" style="font-size: 1pt">
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td>
 
</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td nowrap="nowrap" align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 10pt">
Subtotal
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
2,747
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
8,546
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
(8,265
</td>
<td nowrap="nowrap" align="left" valign="bottom">
)
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
3,028
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom">
<td align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 10pt">
Reserve for doubtful accounts
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
160
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
42
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
(9
</td>
<td nowrap="nowrap" align="left" valign="bottom">
)
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
193
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 10pt">
Reserve for cash discounts
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
62
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
1,022
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
(1,013
</td>
<td nowrap="nowrap" align="left" valign="bottom">
)
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
71
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom" style="font-size: 1pt">
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td>
 
</td>
</tr>
<tr valign="bottom">
<td nowrap="nowrap" align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 10pt">
Total
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
2,969
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
9,610
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
(9,287
</td>
<td nowrap="nowrap" align="left" valign="bottom">
)
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
3,292
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom" style="font-size: 1pt">
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td>
 
</td>
</tr>
</table>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #ffffff">
</div>
<div style="font-size: 12pt; margin-left: 0%; width: 13%; align: left; border-bottom: 1pt solid #000000">
</div>
<div style="margin-top: 3pt; font-size: 1pt"> 
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="text-align: left">
<tr>
<td width="3%"></td>
<td width="97%"></td>
</tr>
<tr valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #ffffff">
<td> <sup style="font-size: 85%; vertical-align: top">(1)</sup> 
</td>
<td align="left"> Includes reserve for customer rebates of $729 million,
$721 million, $710 million at January 3, 2010,
December 28, 2008 and December 30, 2007, respectively.
</td>
</tr>
<tr style="line-height: 6pt; font-size: 1pt">
<td> </td>
</tr>
<tr valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #ffffff">
<td> <sup style="font-size: 85%; vertical-align: top">(2)</sup> 
</td>
<td align="left"> Includes $171 million adjustment related to previously
estimated accrued sales reserve.
</td>
</tr>
</table>
</div>
false
--01-03
2010-01-03
10-K
0000200406
2751927062
Yes
Large Accelerated Filer
156000000000
JOHNSON & JOHNSON
No
Yes
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