10-KPeriod: FY2012

JOHNSON & JOHNSON Annual Report, Year Ended Jan 1, 2012

Filed February 23, 2012For Securities:JNJ

Summary

Johnson & Johnson's 2011 Form 10-K highlights a diversified healthcare conglomerate with a strong global presence across its Consumer, Pharmaceutical, and Medical Devices and Diagnostics segments. The company's decentralized management structure empowers its numerous operating companies worldwide. Despite facing intense competition and an increasingly stringent regulatory environment, Johnson & Johnson continues to invest significantly in research and development, demonstrating a commitment to innovation across its product lines. The report also touches upon operational aspects such as manufacturing facilities, raw material sourcing, and intellectual property, underscoring the company's robust infrastructure. While specific financial performance figures for 2011 are detailed in the incorporated financial statements, the narrative emphasizes the company's preparedness for future challenges through ongoing R&D and strategic market presence. Investors can infer a stable, albeit competitive, operating landscape for JNJ in 2011.

Financial Highlights

55 data points
Beta

Revenue

$67.22B

67.8% Gross Margin

Net Income

$10.85B

16.1% Net Margin

EPS (Diluted)

$3.86

Total Assets

$121.35B

Cash & Equivalents

$14.91B

Free Cash Flow

$12.46B

Financial Statements
Beta
Revenue$67.22B
Cost of Revenue$21.66B
Gross Profit$45.57B
SG&A Expenses$20.87B
Operating Income$14.96B
Interest Expense$532.00M
Net Income$10.85B
EPS (Basic)$3.94
EPS (Diluted)$3.86
Shares Outstanding (Basic)2.75B
Shares Outstanding (Diluted)2.81B

Key Highlights

  • 1Johnson & Johnson operates through three primary segments: Consumer, Pharmaceutical, and Medical Devices and Diagnostics, offering a broad portfolio of health and well-being products.
  • 2The company boasts a significant global footprint with over 250 operating companies in 60 countries, indicating substantial international market penetration.
  • 3Significant investment in Research and Development (R&D) is a core strategy, with $7.5 billion spent in 2011, reflecting a commitment to innovation and product development.
  • 4The company emphasizes its strong patent and trademark portfolio, crucial for protecting its innovations and maintaining competitive advantage, particularly for key products like REMICADE®.
  • 5LEVAQUIN®, a significant product, lost market exclusivity in the U.S. in June 2011, leading to a substantial sales decline (54.1%) in 2011.
  • 6The company acknowledges the rigorous and increasing regulatory environment impacting the drug, device, and diagnostics industries globally, which requires substantial compliance efforts and expense.
  • 7Johnson & Johnson maintains effective disclosure controls and procedures and internal controls over financial reporting, as assessed by management and audited by independent auditors.

Frequently Asked Questions

Johnson & Johnson operates in three main segments: Consumer (baby care, skin care, oral care, wound care, women's health, nutritional, and over-the-counter pharmaceuticals), Pharmaceutical (prescription drugs for various therapeutic areas like immunology, oncology, and infectious diseases), and Medical Devices and Diagnostics (products for cardiovascular care, orthopedics, diabetes care, surgical care, diagnostics, and vision care).

In June 2011, LEVAQUIN® lost its market exclusivity in the United States, leading to a significant 54.1% decrease in its sales in 2011 compared to 2010 due to generic competition. This highlights the impact of patent expirations on pharmaceutical revenues.

The company utilizes a decentralized management structure, with over 250 operating companies globally. It places a strong emphasis on research and development, investing $7.5 billion in 2011 to drive innovation and product improvement across all its business segments. This R&D focus is supported by a robust intellectual property strategy, including patents and trademarks.

Key risks highlighted include the intense competition across all product lines, the significant impact of regulatory requirements and changes (especially in the pharmaceutical and device sectors), and the potential financial and operational consequences of product recalls or government sanctions. The loss of market exclusivity for key products, as seen with LEVAQUIN®, is also a significant risk.