2. Industry Profile Pharmaceutical companies produce the drugs that save lives, and prevent illness as the population ages Large Cap pharmaceuticals are paying big dividends Lots of cash available Large job growth expected “Employment growth is expected to account for about 3 million new wage and salary jobs” “7 of the 20 fastest growing occupations are health care related” (Bureau of Labor Statistics) “The Gross Domestic Product (GDP) for health services in 2001 was $589.8 billion, a 5.8% share of the national total. (Source: U.S. Bureau of Economic Analysis)” Work is steady due to small seasonal variation of consumer needs

3. Company Background Johnson & Johnson (NYSE: JNJ) is a global American pharmaceutical, medical devices and consumer packaged goods manufacturer founded in 1886. –Its common stock is a component of the Dow Jones Industrial Average and the company is listed among the Fortune 500. The corporation includes some 250 subsidiary companies with operations in over 57 countries. Its products are sold in over 175 countries. –J&J had worldwide pharmaceutical sales of $24.6 billion for the full-year 2008.

4. Johnson & Johnson is known for its corporate reputation –Top of Harris Interactive’s National Corporate Reputation Survey –World's most respected company by Barron's Magazine –First corporation awarded the Benjamin Franklin Award for Public Diplomacy by the U.S. State Department –Third among the United States' largest companies in Newsweek's "Green Rankings" Johnson & Johnson's Brands –Numerous household medication & first aid supplies. –Band-Aid brand line of bandages. –Tylenol medications. –Johnson & Johnson baby products. –Neutrogena skin and beauty products. –Clean & Clear facial wash. –Acuvue contact lenses. A Little Bit More About

5. Stateme nt of Cash Flows

6. Balanc e Sheet

7. Analysis of Key Ratios CompanyJNJPFEGSKABTMRKIndustry Market Cap (Billions) 166.86117.23104.679.1569.38 Sales (Billions)61.3746.1741.9129.6623.26 Key Ratios *10/15/09 P/E13.317.914.1515.3312.193.27 PEG1.5821.151.891.42.15 P/S2.722.542.52.672.980.48 P/B3.611.868.443.983.421.58 P/C11.342.3211.0911.494.1 P/FCF23.8313.726.8623.9720.86 Quick Ratio1.512.551.261.342.352.73 Current ratio1.782.741.691.632.543.20 Debt/Eq0.290.631.90.790.5314.51

8. Ratio Valuation PEG average (USA) not including PFE2.012857 JNJ PEG1.58 JNJ price60.95 JNJ P/E13.31 JNJ eps4.58 JNJ growth per share8.42 P/E average (USA) not including PFE14.68857 P/B Average (USA) not including PFE4.3025 JNJ Book Value per share14.17442 JNJ sales per share22.40809 P/S average (USA) not including PFE2.5725 P/C average (USA) not including PFE8.73 JNJ CF per share5.37478 JNJ FCF per share2.56 P/FCF average (USA) not including PFE22.38833 PEG Valuation77.51 P/E Valuation67.28 P/B Valuation60.93 P/S Valuation57.59 P/C Valuation46.92 P/FCF Valuation57.31

9. Stock Price

10. JNJ vs. S&P 500 & Industry

11. STRENGTHS Diversity of business segments Forecasted growth Sales and marketing abilities Strong financial position WEAKNESSES Reliance on small molecule drugs Fewer contributions from in-house R&D SWOT Analysis

12. OPPORTUNITIES Exploit overlaps between different company divisions Expand work with biologics THREATS Failure of new product launches Early launch of generic drug concerto SWOT Analysis

13. Reasons to Buy Consistently increased dividend for the past 47 years Beaten the 3 major indices over the past 10 years Well diversified You won’t get rich off of it, however it should beat the market