Alex Gorsky Chairman & Chief Executive Officer 1
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OUR CREDO 2018 AND BEYOND 3
Record Year of Investments Focused on the Long-Term Growth $10.5B $13.5B $35B R&D Sales & Marketing M&A + $1.5B vs. 2016 + $0.6B vs. 2016 4
Capital Allocation Priorities Effectively executed against our capital allocation priorities Capital Allocation 2017 Investments HIGHER PRIORITY Organic growth business needs $10.5B invested in R&D Free cash flow 1 $9B in dividends paid to Return to shareholders Shareholders Investment in M&A $35B capital deployed in M&A Base dividends Increase dividends Completed $10B share LOWER repurchase 2 PRIORITY Share repurchases After investing in our business at competitive levels, we allocate capital to drive long-term value by first paying dividends, then using excess cash on priority M&A or share repurchases 1 Cash flow from operations less CAPEX 2 Began Oct 2015 and completed June 2017; Does not include Employee Stock Purchase Plans 5
J&J is one of only six companies to increase its Market Cap by >$150B in the last five years NOTE: Market Cap appreciation per Company (Alphabet $454B, Amazon $360B, Microsoft $375B, Berkshire Hathaway $231B, Apple $205B, J&J $171B 6
OUR PURPOSE We blend heart , science and ingenuity to profoundly change the trajectory of health for humanity. 7
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