Sales by companies in Europe experienced a sales decline of 12.6%, including operational growth of 1.8% and a negative impact from currency of 14.4%. Sales by companies in the Western Hemisphere, excluding the U.S., experienced a sales decline of 5.1% including operational growth of 11.7% and a negative impact from currency of 16.8%. Sales by companies in the Asia-Pacific, Africa region experienced a sales decline of 0.7%, including operational growth of 3.7% and a negative impact from currency of 4.4%.
Analysis of Sales by Business Segments
Consumer
Consumer segment sales in the first fiscal six months of 2009 were $7.6 billion, a decrease of 6.6% as compared to the same period a year ago, including operational growth of 1.0% and a negative currency impact of 7.6%. U.S. Consumer segment sales declined by 2.2% while international sales experienced an overall sales decline of 9.9%, including operational growth of 3.6% and a negative currency impact of 13.5%.
Major Consumer Franchise Sales - Fiscal Six Months

                               June 28,     June 29,      Total       Operations     Currency
      (Dollars in Millions)      2009         2008        Change        Change        Change
      OTC Pharm & Nutr         $ 2,658      $ 2,999       (11.4 )%        (4.3 )%      (7.1 )%
      Skin Care                  1,675        1,679        (0.2 )          6.9         (7.1 )
      Baby Care                    997        1,105        (9.8 )         (0.7 )       (9.1 )
      Women's Health               904          965        (6.3 )          2.8         (9.1 )
      Oral Care                    751          794        (5.4 )          2.6         (8.0 )
      Wound Care/Other             580          558         3.9           10.4         (6.5 )
      Total                    $ 7,565      $ 8,100        (6.6 )%         1.0 %       (7.6 )%

Consumer segment sales in the fiscal second quarter of 2009 were $3.8 billion, a decrease of 4.5% over the same period a year ago, including operational growth of 3.1% and a negative currency impact of 7.6%. U.S. Consumer segment sales increased by 0.8% while international sales experienced an overall sales decline of 8.4%, including operational growth of 4.7%, and a negative currency impact of 13.1%.
Major Consumer Franchise Sales - Fiscal Second Quarters

                               June 28,     June 29,      Total       Operations     Currency
      (Dollars in Millions)      2009         2008        Change        Change        Change
      OTC Pharm & Nutr         $ 1,310      $ 1,405        (6.8 )%          0.3 %      (7.1 )%
      Skin Care                    833          839        (0.7 )           5.9        (6.6 )
      Baby Care                    508          572       (11.2 )          (2.2 )      (9.0 )
      Women's Health               481          504        (4.6 )           4.8        (9.4 )
      Oral Care                    386          408        (5.4 )           2.4        (7.8 )
      Wound Care/Other             336          308         9.1            15.7        (6.6 )
      Total                    $ 3,854      $ 4,036        (4.5 )%          3.1 %      (7.6 )%

The OTC Pharmaceuticals and Nutritionals franchise achieved operational growth of 0.3% as compared to prior year fiscal second quarter. Increased competitive pressures including private label have negatively impacted sales. The U.S. Food and Drug Administration (FDA) is currently considering certain

recommendations made by its advisory committee for reducing the potential for overdose with acetaminophen, the active ingredient in TYLENOL®. The Company has provided the FDA with its own recommendations and will continue to be actively engaged with the FDA on this topic.
The Skin Care franchise achieved operational growth of 5.9% which was primarily due to growth in the Neutrogena and Aveeno product lines.
The Baby Care franchise experienced an operational decline of 2.2% over prior year fiscal second quarter. This was due to increased private label competition and lower sales for Babycenter.com primarily as a result of exiting the online retail business. This was partially offset by growth in the haircare and powder product lines outside the U.S.
The Women's Health Franchise operational growth of 4.8% was primarily due to sales associated with the buyout of a joint venture partner in France. Prior to the buyout of the joint venture partner, sales by the joint venture were not recorded as part of the Company's sales to customers.
The Oral Care franchise operational growth of 2.4% was driven by the growth of LISTERINEâmouthwash outside the U.S. partially offset by lower sales of whitening strips and mouth fresheners on a global basis.
The Wound Care/Other franchise operational growth of 15.7% was primarily due to the recent acquisitions in wellness and prevention and sales associated with the buyout of a joint venture partner in France. Prior to the buyout of the joint venture partner, sales by the joint venture were not recorded as part of the Company's sales to customers.
Pharmaceutical
Pharmaceutical segment sales in the first fiscal six months of 2009 were $11.3 billion, a total decrease of 11.7% as compared to the same period a year ago with an operational decline of 6.8% and a decrease of 4.9% related to the negative impact of currency. U.S. Pharmaceutical sales declined by 12.9% as compared to the same period a year ago. International Pharmaceutical sales experienced a sales decline of 9.7%, representing an operational increase of 3.1%, and a decrease of 12.8% related to the negative impact of currency. Major Pharmaceutical Product Revenues - Fiscal Six Months

                                   June 28,     June 29,      Total       Operations      Currency
(Dollars in Millions)                2009         2008        Change        Change         Change
REMICADE®                         $  2,130     $  1,884        13.1 %          13.1 %          - %
PROCRIT®/EPREX®                      1,127        1,281       (12.0 )          (6.3 )       (5.7 )
LEVAQUIN®/FLOXIN®                      787          847        (7.1 )          (6.2 )       (0.9 )
TOPAMAX®                               784        1,323       (40.7 )         (37.9 )       (2.8 )
RISPERDALâ CONSTAâ                     673          652         3.2            14.6        (11.4 )
CONCERTAâ                              661          569        16.2            21.4         (5.2 )
ACIPHEXâ/PARIETâ                       523          602       (13.1 )          (5.7 )       (7.4 )
RISPERDALâ                             514        1,521       (66.2 )         (64.5 )       (1.7 )
DURAGESIC®/Fentanyl Transdermal        449          505       (11.1 )          (2.7 )       (8.4 )
Other                                3,630        3,585         1.3             9.4         (8.1 )
Total                             $ 11,278     $ 12,769       (11.7 )%         (6.8 )%      (4.9 )%

Pharmaceutical segment sales in the fiscal second quarter of 2009 were $5.5 billion, a total decrease of 13.3% over the same period a year ago with an operational decline of 8.5% and a decrease of 4.8% related to the negative impact of currency. U.S. Pharmaceutical sales decreased by 16.4% over the same period a year ago. International Pharmaceutical sales experienced a sales decline of 8.7%, representing an operational increase of 3.3%, and a decrease of 12.0% related to the negative impact of currency.
Major Pharmaceutical Product Revenues - Fiscal Second Quarters

                                   June 28,     June 29,      Total       Operations      Currency
(Dollars in Millions)                2009         2008        Change        Change         Change
REMICADE®                          $ 1,102      $   886        24.4 %          24.4 %          - %
PROCRIT®/EPREX®                        577          652       (11.5 )          (6.0 )       (5.5 )
LEVAQUIN®/FLOXIN®                      362          351         3.1             4.1         (1.0 )
RISPERDALâ CONSTAâ                     348          343         1.5            12.1        (10.6 )
CONCERTAâ                              317          279        13.6            18.7         (5.1 )
ACIPHEX®/PARIETâ                       260          325       (20.0 )         (13.3 )       (6.7 )
RISPERDALâ                             239          712       (66.4 )         (64.8 )       (1.6 )
DURAGESIC®/Fentanyl Transdermal        218          272       (19.9 )         (12.3 )       (7.6 )
TOPAMAX®                               182          677       (73.1 )         (70.4 )       (2.7 )
Other                                1,893        1,843         2.7            10.5         (7.8 )
Total                              $ 5,498      $ 6,340       (13.3 )%         (8.5 )%      (4.8 )%

REMICADE® (infliximab), a biologic approved for the treatment of Crohn's disease, ankylosing spondylitis, psoriasis, psoriatic arthritis, ulcerative colitis and use in the treatment of rheumatoid arthritis, achieved operational growth of 24.4% over prior year fiscal second quarter. Sales in the U.S. market grew 12.7% versus the prior year primarily driven by market growth. U.S. export sales grew 63.5% versus the prior year fiscal second quarter primarily driven by an increase in customer production planning needs. U.S. export sales operational growth for the fiscal six months of 2009 versus the same period a year ago was 17.9%, which the Company believes is more reflective of actual consumption in the first two fiscal quarters of 2009. REMICADE® is competing in a market which is experiencing increased competition due to new entrants and the expansion of indications for existing competitors.
PROCRITâ (Epoetin alfa)/EPREXâ (Epoetin alfa), experienced an operational sales decline of 6.0%, as compared to prior year fiscal second quarter. The decline in PROCRITâ sales was due to the declining markets for Erythropoiesis Stimulating Agents (ESAs) in the U.S. The FDA issued an order requiring a labeling supplement making specific revisions to the label for ESAs,

including PROCRITâ. The label for PROCRITâ was updated July 30, 2008 based on review of emerging safety data for the use of ESAs in patients with cancer. Outside the U.S., the emerging safety data issues have contributed to the lower sales results for EPREXâ.
RISPERDAL® CONSTA® (risperidone), a long-acting injectable for the treatment of schizophrenia, achieved operational growth of 12.1% over the fiscal second quarter of 2008. Strong growth was due to a positive shift from daily therapies to longer-acting RISPERDAL® CONSTA® and increased share.
CONCERTAâ (methylphenidate HCl), a product for the treatment of attention deficit hyperactivity disorder, achieved operational sales growth of 18.7% over the fiscal second quarter of 2008 due to market growth. Although the original CONCERTAâ patent expired in 2004, the FDA has not approved any generic version that is substitutable for CONCERTAâ. Parties have filed Abbreviated New Drug Applications (ANDAs) for generic versions of CONCERTAâ, which are pending and may be approved at any time.
ACIPHEXâ/PARIETâ, experienced an operational decline of 13.3% due in part to generic competition.
RISPERDAL®(risperidone), a medication that treats the symptoms of schizophrenia, bipolar mania and irritability associated with autistic behavior in indicated patients, experienced an operational decline of 64.8% in the fiscal second quarter of 2009 versus the same period in the prior year. Market exclusivity for RISPERDAL® oral in the U.S. expired on June 29, 2008. Loss of market exclusivity for the RISPERDAL® oral patent has resulted in a significant reduction in sales in the U.S. In 2008, U.S. sales of RISPERDAL® oral were $1.3 billion. U.S. sales of RISPERDAL® oral were $1.1 billion and $0.2 billion in the first half and the second half of the 2008 fiscal year, respectively, and $0.2 billion in the first half of the 2009 fiscal year.
DURAGESIC®/Fentanyl Transdermal (fentanyl transdermal system), experienced an operational decline of 12.3% due to continued generic competition. TOPAMAX® (topiramate), which has been approved for adjunctive and monotherapy use in epilepsy, as well as for the prophylactic treatment of migraines, experienced an operational decline of 70.4% as compared to prior year fiscal second quarter. Marketing exclusivity for TOPAMAX® (topiramate) in the U.S. expired in March 2009 and multiple generics have entered the market. Loss of market exclusivity for the TOPAMAX® patent has resulted in a significant reduction in sales in the U.S. In 2008, U.S. sales of TOPAMAX® were $2.3 billion. U.S. sales of TOPAMAX® were $0.5 billion and $0.1 billion in the fiscal first quarter and the fiscal second quarter of 2009 respectively. In the fiscal second quarter of 2009, Other Pharmaceutical sales achieved operational growth of 10.5% versus the prior year.

Contributors to the increase were sales of VELCADEâ (bortezomib), a treatment for multiple myeloma, PREZISTAâ (darunavir), for the treatment of HIV/AIDS patients and INVEGAâ(paliperidone), a once-daily atypical antipsychotic. Medical Devices and Diagnostics
Medical Devices and Diagnostics segment sales in the first fiscal six months of 2009 were $11.4 billion, a decrease of 3.0% as compared to the same period a year ago, with 3.0% of this change due to operational increases and a decrease of 6.0% related to the negative impact of currency. The U.S. Medical Devices and Diagnostics sales increase was 2.2% and the decline in international Medical Devices and Diagnostics sales was 7.3%, which included operational increases of 3.6% and a decrease of 10.9% related to the negative impact of currency. Major Medical Devices and Diagnostics Franchise Sales* - Fiscal Six Months

                                 June 28,     June 29,      Total       Operations      Currency
  (Dollars in Millions)            2009         2008        Change        Change         Change
  DEPUY®                        $  2,615     $  2,615           - %            6.6 %      (6.6 )%
  ETHICON ENDO-SURGERY®            2,130        2,127         0.1              7.3        (7.2 )
  ETHICON®                         1,994        1,965         1.5              9.4        (7.9 )
  CORDIS®                          1,342        1,614       (16.9 )          (12.8 )      (4.1 )
  Vision Care                      1,229        1,246        (1.4 )            1.3        (2.7 )
  Diabetes Care                    1,151        1,289       (10.7 )           (4.8 )      (5.9 )
  ORTHO-CLINICAL DIAGNOSTICS®        961          919         4.6              9.7        (5.1 )
  Total                         $ 11,422     $ 11,775        (3.0 )%           3.0 %      (6.0 )%

* Prior year amounts have been reclassified to conform to current presentation.

Medical Devices and Diagnostics segment sales in the fiscal second quarter of 2009 were $5.9 billion, a decrease of 3.1% as compared to the same period a year ago, with 2.9% of this change due to operational increases and a decrease of 6.0% related to the negative impact of currency. The U.S. Medical Devices and Diagnostics sales increase was 1.9% and the decline in international Medical Devices and Diagnostics sales was 7.2%, which included operational increases of 3.7% and a decrease of 10.9% related to the negative impact of currency. Major Medical Devices and Diagnostics Franchise Sales* - Fiscal Second Quarters

                                 June 28,     June 29,      Total       Operations      Currency
  (Dollars in Millions)            2009         2008        Change        Change         Change
  DEPUY®                         $ 1,323      $ 1,328        (0.4 )%           6.0 %      (6.4 )%
  ETHICON ENDO-SURGERY®            1,115        1,124        (0.8 )            6.3        (7.1 )
  ETHICON®                         1,041        1,020         2.1              9.7        (7.6 )
  CORDIS®                            674          813       (17.1 )          (12.6 )      (4.5 )
  Vision Care                        630          639        (1.4 )            1.9        (3.3 )
  Diabetes Care                      610          674        (9.5 )           (3.7 )      (5.8 )
  ORTHO-CLINICAL DIAGNOSTICS®        494          476         3.8              9.2        (5.4 )
  Total                          $ 5,887      $ 6,074        (3.1 )%           2.9 %      (6.0 )%

* Prior year amounts have been reclassified to conform to current presentation.

The DePuy franchise achieved operational growth of 6.0% over the same period a year ago. This was primarily due to growth in the spine, hip and knee product lines. Additionally, new product launches in the Mitek sports medicine product line contributed to the growth.
The Ethicon Endo-Surgery franchise achieved operational growth of 6.3% over prior year fiscal second quarter. This growth was mainly driven by the HARMONICä technology business due to the success of newly launched products and the underlying strength of the technology. Additional contributors to the growth in the U.S. were the REALIZEâ Gastric Band and newly acquired ENSEALâ products. The Ethicon franchise achieved operational growth of 9.7% over prior year fiscal second quarter. This was attributable to growth in the biosurgical, meshes and women's health product lines in addition to sales of newly acquired products from the acquisitions of Omrix Biopharmaceuticals, Inc. and Mentor Corporation. The growth was partially offset by the divestiture of the Professional Wound Care business in the fiscal fourth quarter of 2008.
The Cordis franchise experienced an operational sales decline of 12.6% as compared to the fiscal second quarter of 2008. This decline was caused by lower sales of the CYPHER® Sirolimus-eluting Coronary Stent due to increased global competition. These results were partially offset by growth of the Biosense Webster business.
The Vision Care franchise achieved operational sales growth of 1.9%. ACUVUE® OASYS™, 1-DAY ACUVUE®MOISTTM, and ACUVUE® OASYS™ for Astigmatism were the major contributors to this growth offset by slowing category growth due to declines in consumer spending.
The Diabetes Care franchise experienced an operational sales decline of 3.7% as compared to the fiscal second quarter of 2008. This decline reflects the overall decrease in the market due to current economic conditions. These results were partially offset by growth of the Animas business, an insulin delivery business. The Ortho-Clinical Diagnostics franchise achieved operational growth of 9.2% over the fiscal second quarter of 2008. This growth was primarily attributable to the launch of new VITROS 3600 and 5600 analyzers and donor screening products.
Cost of Products Sold and Selling, Marketing and Administrative Expenses Consolidated costs of products sold for each of the first fiscal six months of 2009 and 2008 were 28.7% as a percent of sales. The costs of products sold for the fiscal second quarter of 2009 increased to 29.2% from 28.9% of sales in the same period a year

ago. The increase was primarily due to the negative impact of product mix, partially offset by cost containment initiatives across all the businesses. Consolidated selling, marketing and administrative expenses for the first fiscal six months of 2009 decreased to 31.1% from 32.6% of sales as compared to the same period a year ago. Consolidated selling, marketing and administrative expenses for the fiscal second quarter of 2009 decreased to 31.5% from 33.5% of sales as compared to the same period a year ago. Decreases in the quarterly and six month period were due to cost containment efforts across all the businesses. Research & Development
Research activities represent a significant part of the Company's business. These expenditures relate to the development of new products, improvement of existing products, technical support of products and compliance with governmental regulations for the protection of the consumer. Worldwide costs of research activities, for the first fiscal six months of 2009 were $3.2 billion, a decrease of 12.5% over the same period a year ago. Research and development spending in the fiscal second quarter of 2009 was $1.6 billion, a decrease of 13.6% over the fiscal second quarter of 2008. The decreases as a percent to sales in the quarterly and six month period were primarily due to changes to the mix of businesses and increased efficiencies in Pharmaceutical research and development activities.
In-Process Research & Development(IPR&D) In the fiscal second quarter and the first fiscal six months of 2008, the Company had $40 million of IPR&D charges with no tax benefit associated with the acquisition of Amic AB.
Other (Income) Expense, Net
Other (income) expense, net is the account where the Company records gains and losses related to the sale and write-down of certain equity securities of the Johnson & Johnson Development Corporation, gains and losses on the disposal of fixed assets, currency gains and losses, gains and losses relating to non-controlling interests, litigation settlements, as well as royalty income. The change in other (income) expense, net for the first fiscal six months and the fiscal second quarter of 2009 was unfavorable as compared to the same periods a year ago. The Company received a $270 million settlement payment from Medtronic AVE, Inc. during the fiscal second quarter which was offset by several smaller litigation matters as well as asset write-downs and other charges.
OPERATING PROFIT BY SEGMENT
Consumer Segment
Operating profit for the Consumer segment as a percent to sales in the first fiscal six months of 2009 was 19.8% versus 17.4% for the same period a year ago. Operating profit for the Consumer segment as a percent to sales in the fiscal second quarter of 2009 was 18.0% versus 16.9% for the same period a year ago. The primary driver of the improved operating profit for both the first fiscal six months and the fiscal second quarter of 2009 was due to cost

containment initiatives related to selling, marketing and administrative expenses.
Pharmaceutical Segment
Operating profit for the Pharmaceutical segment as a percent to sales in the first fiscal six months of 2009 was 35.1% versus 35.3% for the same period a year ago. Operating profit for the Pharmaceutical segment as a percent to sales in the fiscal second quarter of 2009 was 30.9% versus 33.8% for the same period a year ago. For both periods in 2009, operating profit decreased, as compared to the same periods a year ago. The negative impact of product mix due to the loss of exclusivity of the TOPAMAX® patent was the primary driver of the decreased operating profit.
Medical Devices and Diagnostics Segment
Operating profit for the Medical Devices and Diagnostics segment as a percent to sales in the first fiscal six months of 2009 was 33.9% versus 29.7% for the same period a year ago. Operating profit for the Medical Devices and Diagnostics segment as a percent to sales in the fiscal second quarter of 2009 was 35.5% versus 28.0% for the same period a year ago. The primary driver of the improvement in the operating profit margin in the Medical Devices and Diagnostics segment for both periods in 2009 was due to favorable product mix, manufacturing efficiencies and cost containment initiatives related to selling, marketing and administrative expenses. Additionally, the Company received a $270 million settlement payment from Medtronic AVE, Inc., which was partially offset by asset write-downs and other charges in the fiscal second quarter of 2009.
Interest (Income) Expense
Interest income decreased in both the first fiscal six months and second quarter of 2009 as compared to the same periods a year ago, due to lower rates of interest earned, despite higher average cash balances. The ending balance of cash, cash equivalents and marketable securities, was $14.7 billion at the end of the fiscal second quarter of 2009. This is an increase of $1.6 billion from the same period a year ago. The increase was primarily due to cash generated from operating activities.
Interest expense was relatively flat in both the first fiscal six months and fiscal second quarter of 2009 as compared to the same period a year ago. At the end of the fiscal second quarter of 2009 the Company's debt position was $13.6 billion compared to $13.9 billion from the same period a year ago. Provision For Taxes on Income
The worldwide effective income tax rates for the first fiscal six months of 2009 and 2008 were 24.6% and 24.1%, respectively. The increase in the effective tax rate was primarily due to a decline in taxable income in lower tax jurisdictions relative to taxable income in higher tax jurisdictions partially offset by the U.S. Research and Development tax credit which was not in effect in the first fiscal six months of 2008.

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