Business Highlights

Johnson & Johnson delivered strong results in 2013 led by the outstanding performance in our Pharmaceutical business, the re-launch and strength of key brands in our U.S. over-the-counter (OTC) and other Consumer businesses and continued progress in integrating Synthes, Inc. into our Medical Devices and Diagnostics (MD&D) segment. Results also included advances in our longer-term growth drivers including bringing innovative solutions to the global health care market, executing with excellence, and leading with purpose to advance health and well-being for patients and consumers around the world.

PHARMACEUTICAL

With $28.1 billion in worldwide sales in 2013, we are the seventh-largest pharmaceuticals business* in the world and the sixth-largest biotech business*. We’re the fastest-growing top 10 Pharmaceutical Company in the United States, Europe and Japan and recorded 15 consecutive quarters of operational sales growth in this segment.

Primary contributors to exceptional operational sales growth of 12 percent included REMICADE® (infliximab) and SIMPONI® (golimumab), biologics approved for the treatment of a number of immune-mediated inflammatory diseases; STELARA® (ustekinumab), a biologic approved for the treatment of moderate to severe plaque psoriasis and active psoriatic arthritis; INVEGA® SUSTENNA®/XEPLION® (paliperidone palmitate), a once-monthly, long-acting, injectable atypical antipsychotic for the treatment of schizophrenia in adults; PREZISTA® (darunavir), a treatment for HIV; VELCADE® (bortezomib), a treatment for multiple myeloma; and sales of new products.

The strong sales results of new products included ZYTIGA® (abiraterone acetate), an oral, once-daily medication for use in combination with prednisone for the treatment of metastatic, castration-resistant prostate cancer; XARELTO® (rivaroxaban), an oral anticoagulant; the combined sales of COMPLERA®/EVIPLERA® (emtricitabine /rilpivirine/tenofovir disoproxil fumarate) and EDURANT® (rilpivirine) for the treatment of HIV; and INVOKANA® (canagliflozin) for the treatment of adults with Type 2 diabetes.

Sales results were negatively impacted by generic competition for ACIPHEX®/ PARIET® (rabeprazole), a proton pump inhibitor for gastrointestinal disorders and CONCERTA® (methylphenidate HCI) for the treatment of attention deficit hyperactivity disorder.

During 2013, the company received several regulatory approvals including: U.S. Food and Drug Administration (FDA) approval of OLYSIO™ (simeprevir), an NS3/4A protease inhibitor, for the treatment of chronic hepatitis C infection as part of an antiviral treatment regimen in combination with pegylated interferon and ribavirin in genotype 1 infected adults with compensated liver disease, including cirrhosis; FDA approval of IMBRUVICA™ (ibrutinib) capsules for the treatment of patients with mantle cell lymphoma who have received at least one prior therapy; FDA and European Commission (EC) approval of INVOKANA® (canagliflozin), an oral, once-daily, selective sodium glucose co-transporter 2 inhibitor, for the treatment of adults with Type 2 diabetes; FDA approval for the use of STELARA® (ustekinumab) alone or in combination with methotrexate for the treatment of adult patients with active psoriatic arthritis; EC approval of STELARA® (ustekinumab), alone or in combination with methotrexate for active psoriatic arthritis in adults when the response to previous non-biological disease-modifying anti-rheumatic drug therapy has been inadequate; EC approval of an expanded indication for SIMPONI® (golimumab) for the treatment of moderately to severely active ulcerative colitis in adult patients who have had an inadequate response to conventional therapy including corticosteroids and 6-mercaptopurine or azathioprine, or who are intolerant to or have medical contraindications for such therapies; FDA approval of SIMPONI® (golimumab) for the treatment of moderately to severely active ulcerative colitis in adult patients who have demonstrated corticosteroid dependence or who have had an inadequate response to or failed to tolerate oral aminosalicylates, oral corticosteroids, azathioprine, or 6-mercaptopurine; and FDA approval of SIMPONI® ARIA™ (golimumab) for infusion for the treatment of adults with moderately to severely active rheumatoid arthritis in combination with methotrexate. The EC also approved the use of VELCADE® (bortezomib) as induction therapy in combination with dexamethasone or thalidomide and dexamethasone and applies to adult patients with previously-untreated multiple myeloma who are eligible for high-dose chemotherapy with hematological stem cell transplantation.

A Marketing Authorization Application was submitted to the European Medicines Agency (EMA) for ibrutinib for the treatment of adult patients with relapsed or refractory chronic lymphocytic leukemia/small lymphocytic lymphoma or relapsed or refractory mantle cell lymphoma. Also filed with the EMA, was a once-daily single tablet fixed-dose antiretroviral combination product containing darunavir, a protease inhibitor developed by Janssen-Cilag International NV and marketed as PREZISTA®, with cobicistat, a pharmacokinetic boosting agent, developed by Gilead Sciences, Inc. for use in combination with other HIV medicines.

Looking to the future, we are pleased with our focused, deep and productive pharmaceutical pipeline, and expect the growth of our recently launched products to continue. Furthermore, we will continue investing in R&D that’s focused on key unmet needs for patients. As we announced in May at the Pharmaceutical Business Review, we plan to file more than ten new molecular entities (NMEs) for approval between 2013 and 2017, and more than 25 additional line extensions of our in-market products.

MEDICAL DEVICES AND DIAGNOSTICS

With $28.5 billion in worldwide Medical Devices and Diagnostics (MD&D) sales for 2013, our MD&D segment is the largest medical devices and diagnostics business in the world. Operational sales growth of 6.1 percent included the impact of the acquisition of Synthes, net of the divestiture of the DePuy Trauma business. Excluding this impact, MD&D operational sales growth was 0.1 percent.

Primary contributors to operational growth were sales from the acquisition of Synthes and DePuy Synthes Joint Reconstruction products in the Orthopaedics business, Biosense Webster’s electrophysiology products in the Cardiovascular Care business, the Vision Care business, as well as biosurgicals and international sales of energy products in the Specialty Surgery business.

Our MD&D business is anchored by 11 “billion-dollar-plus-platforms” including vision care, trauma, sutures, endoscopy, and electrophysiology. The FDA approved EVARREST™ Fibrin Sealant Patch, a novel product that rapidly and reliably aids in stopping bleeding during surgery. In orthopaedics, the ATTUNE® Knee System, developed with innovative proprietary technology, is off to a great start with over 23,000 implants worldwide. The ENSEAL® G2 Articulating Tissue Sealer, the world’s first articulating advanced bipolar product, is making it easier for surgeons around the world to access difficult-to-reach parts of the anatomy. Finally, our THERMOCOOL® SMARTTOUCH® Catheter enhances the safety and efficacy of an ablation procedure by measuring the force of the catheter’s tip inside the heart. These are just a few of the innovations that continue to strengthen our worldwide leadership position in medical devices and diagnostics, where 85 percent of our key platforms hold the number one or number two position in the market.

Integrating Synthes has been our priority and we’ve made good progress. DePuy Synthes Companies is the world’s largest and most comprehensive orthopaedics company within a $44 billion market with strong fundamentals, and is primed to offer new, value-added solutions that will help transform health care delivery.

In January 2014, we announced receipt of a binding offer from The Carlyle Group to acquire the Ortho-Clinical Diagnostics business for approximately $4 billion. We are in an acceptance period that will end on March 31, 2014 — and expect the transaction will close toward the middle of this year.

CONSUMER

With $14.7 billion in worldwide sales in 2013, our Consumer segment is the sixth-largest health care consumer business in the world and achieved operational sales growth of 2.8 percent. Our near-term priority is to deliver a reliable supply of OTC products to the U.S. marketplace. Last year, we met our objective of returning approximately 75 percent of our planned portfolio to store shelves. We are investing in cross-channel marketing across TV, print and social media to support their re-launch.

Positive contributors to operational results were U.S. sales of TYLENOL® and MOTRIN® analgesics; upper respiratory OTC products; international sales of baby care products; sales of NEUTROGENA® and AVEENO® skin care products; and international sales of LISTERINE® oral care products.

In 2013, we took steps to strengthen our focus, divesting in certain areas such as our North American women’s sanitary protection business, and acquiring Shanghai Elsker Mother & Baby Co., Ltd, a well-regarded baby care company in China known for its position in the naturals segment.

We also continue to expand globally with the launch of LISTERINE® ADVANCED DEFENCE® Gum Treatment in the United Kingdom and Ireland and our new JOHNSON’S® Baby TRIPLE BABY PROTECTION™ product line, which we’ll be taking into global markets this year.

Finally, as we work to bring our plants fully back on line, we’ve executed all of the milestones to-date in our FDA Consent Decree.

CITIZENSHIP & SUSTAINABILITY

Our Credo is the foundation for our Citizenship & Sustainability and informs our priorities to advance human health and well-being, safeguard the planet, and lead a strong and responsible business. These priorities are central to our aspiration that, by caring for the world, one person at a time, we will help billions of people live longer, healthier, happier lives.

As the world’s largest health care company, we continue to expand our efforts and engage in collaborative projects to advance global health on multiple levels. In 2010, we made a significant five-year commitment to the United Nations Millennium Development Goals to improve the lives of women and children worldwide, and we are on track to deliver our commitments by 2015.

Our newly formed Janssen Global Public Health (GPH) team combines the best of our innovative access models with our core business strategy to drive better outcomes, improve quality of life and sustainably advance health care. GPH’s work with the Stop TB Partnership to facilitate access to SIRTURO®, a tuberculosis therapy with a new mechanism of action, discovered and developed by Janssen scientists, will have a major impact on lives. We will continue these and other efforts in response to the world’s health challenges.

We are leading a strong and responsible business in many ways. As part of our longstanding practices and commitment to citizenship and sustainability, we joined the U.N. Global Compact in 2013 and are committed to its principles, many of which have been embedded in our business practices for decades.

We are conscientious, too, of our impact on the environment, the health of which is inextricably linked to our efforts in human health. In 2013, our energy and carbon reduction programs earned distinction from the Carbon Disclosure Project (CDP), naming us as the health care sector leader within the S&P 500 and maintaining our membership in the CDP Leadership Index for the fourth consecutive year.

NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report contains forward-looking statements relating to, among other things, expectations for future product development, regulatory filings and the sale of the Ortho-Clinical Diagnostics business. You should review the section “Cautionary Factors That May Affect Future Results” on page 19 of this Annual Report for important information about these statements including the risks, uncertainties and other factors that could cause actual results to vary materially from the assumptions, expectations and projections expressed in our forward-looking statements.

* IMS MIDAS data as of Q3 2013 (growth versus previous year (moving annual total) in local currency dollars)