Reconciliation of Non-GAAP Financial Measures The tables below are provided to reconcile certain financial disclosures in the Letter to Shareholders, page 1. ’10 vs. ’09 ’09 vs. ’08 (Dollars in Millions Except Per Share Data) 2010 2009 2008 % Change % Change Earnings before provision for taxes on income — as reported $16,947 15,755 16,929 7.6% (6.9) Purchased in-process research & development (IPR&D) — — 181 Gain on litigation settlements, net (966) (386) (379) Restructuring expense — 1,186 — Product liability expense 569 — — DePuy ASR™ Hip recall program 280 — — Earnings before provision for taxes on income — as adjusted $16,830 16,555 16,731 1.7% (1.1) Net Earnings — as reported $13,334 12,266 12,949 8.7% (5.3) Purchased in-process research & development (IPR&D) — — 181 Gain on litigation settlements, net (698) (212) (229) Restructuring expense — 852 — Product liability expense 404 — — DePuy ASR™ Hip recall program 239 — — Net Earnings — as adjusted $13,279 12,906 12,901 2.9% 0.0 Diluted Net Earnings per share — as reported $ 4.78 4.40 4.57 8.6% (3.7) Purchased in-process research & development (IPR&D) — — 0.06 Gain on litigation settlements, net (0.25) (0.08) (0.08) Restructuring expense — 0.31 — Product liability expense 0.14 — — DePuy ASR™ Hip recall program 0.09 — — Diluted Net Earnings per share — as adjusted $ 4.76 4.63 4.55 2.8% 1.8 ’10 vs. ’09 ’09 vs. ’08 (Dollars in Millions) 2010 2009 2008 % Change % Change Net cash flows from operating activities $16,385 16,571 14,972 Additions to property, plant and equipment $ (2,384) (2,365) (3,066) Free Cash Flow $14,001 14,206 11,906 (1.4)% 19.3 The Company believes investors gain additional perspective of underlying business trends and results by providing free cash flow, a measure of earnings before tax, net earnings and diluted net earnings per share that excludes IPR&D charges and other special items in order to evaluate ongoing business operations. These non-GAAP financial measures should not be considered replacements for, and should be read together with, the most comparable GAAP financial measures. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES 76