-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WVJINTpFlxJTrW3ZDwep48vYOv7l/1ozd/J0tDg3etOX8eGvC8t8eoLkp0r4SDAw gcDWkOf4C37jhMmL1m8hsw== 0000950123-97-005176.txt : 19970623 0000950123-97-005176.hdr.sgml : 19970623 ACCESSION NUMBER: 0000950123-97-005176 CONFORMED SUBMISSION TYPE: 10-K405/A PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19961229 FILED AS OF DATE: 19970620 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: JOHNSON & JOHNSON CENTRAL INDEX KEY: 0000200406 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 221024240 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405/A SEC ACT: SEC FILE NUMBER: 001-03215 FILM NUMBER: 97627468 BUSINESS ADDRESS: STREET 1: ONE JOHNSON & JOHNSON PLZ CITY: NEW BRUNSWICK STATE: NJ ZIP: 08933 BUSINESS PHONE: 9085240400 10-K405/A 1 AMENDMENT TO FORM 10-K405: JOHNSON & JOHNSON 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K/A ANNUAL REPORT PURSUANT TO SECTION 13 OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 29, 1996 Commission file number 1-3215 J O H N S O N & J O H N S O N (Exact name of registrant as specified in its charter) New Jersey 22-l024240 (State of (I.R.S. Employer Incorporation) Identification No.) One Johnson & Johnson Plaza New Brunswick, New Jersey 08933 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (732) 524-0400 SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT Name of each exchange on Title of each class which registered Common Stock, Par Value $1.00 New York Stock Exchange Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No The aggregate market value of the voting stock held by non-affiliates of the registrant on February 25, 1997 was approximately $75.1 billion. On February 25, 1997 there were 1,333,553,480 shares of Common Stock outstanding. DOCUMENTS INCORPORATED BY REFERENCE Parts I and II: Portions of registrant's annual report to shareowners for fiscal year 1996. Part III: Portions of registrant's proxy statement for its 1997 annual meeting of shareowners. Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K [ X ] 2 SIGNATURES Pursuant to the requirements of Section l3 of the Securities Exchange Act of l934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: June 13, 1997 JOHNSON & JOHNSON --------------------------------- (Registrant) By /s/ R. S. LARSEN --------------------------------- R. S. Larsen, Chairman, Board of Directors and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of l934, this report has been duly signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date --------- ----- ---- /s/ R. S. LARSEN Chairman, --------------------- Board of Directors and R. S. Larsen Chief Executive Officer, and Director (Principal Executive Officer) June 13, 1997 /s/ R. DARRETTA Vice President-Finance --------------------- and Director R. Darretta (Principal financial June 16, 1997 officer) /s/ C.E. LOCKETT Controller June 17, 1997 --------------------- C.E. Lockett Director June , 1997 --------------------- G. N. Burrow /s/ J. G. COONEY Director June 12, 1997 ---------------------- J. G. Cooney /s/ J. G. CULLEN Director June 13, 1997 ---------------------- J. G. Cullen 1 3 Signature Title Date /s/ P. M. HAWLEY Director June 13, 1997 - --------------------------- P. M. Hawley /s/ A. D. JORDAN - --------------------------- Director June 12, 1997 A. D. Jordan /s/ A. G. LANGBO Director June 12, 1997 - --------------------------- A. G. Langbo /s/ J. S. MAYO Director June 17, 1997 - --------------------------- J. S. Mayo /s/ T. S. MURPHY Director June 12, 1997 - --------------------------- T. S. Murphy /s/ P. J. RIZZO Director June 12, 1997 - --------------------------- P. J. Rizzo /s/ M. F. SINGER Director June 12, 1997 - --------------------------- M. F. Singer /s/ R. B. SMITH Director June 13, 1997 - --------------------------- R. B. Smith /s/ R. N. WILSON Vice Chairman June 13, 1997 - --------------------------- Board of Directors R. N. Wilson and Director 2 4 EXHIBIT INDEX Reg. S-K Exhibit Table Description Item No. of Exhibit -------- ---------- 3(a)(i) Restated Certificate of Incorporation dated April 26, 1990- Incorporated herein by reference to Exhibit 3(a) of the Registrant's Form 10-K Annual Report for the year ended December 30, 1990. 3(a)(ii) Certificate of Amendment to the Restated Certificate of Incorporation of the Company dated May 20, 1992 - Incorporated herein by reference to Exhibit 3(a) of the Registrant's Form 10-K Annual Report for the year ended January 3, 1993. 3(a)(iii) Certificate of Amendment to the Restated Certificate of Incorporation of the Company dated May 21, 1996 - (1). 3(b) By-Laws of the Company, as amended April 26, 1990 -- Incorporated herein by reference to Exhibit 3(b) of the Registrant's Form 10-K Annual Report for the year ended January 3, 1993. 4(a) Upon the request of the Securities and Exchange Commission, the Registrant will furnish a copy of all instruments defining the rights of holders of long term debt of the Registrant. 10(a) Stock Option Plan for Non-Employee Directors -- (1). 10(b) 1995 Stock Option Plan (as amended) -- Incorporated herein by reference to Exhibit 10(a) of the Registrant's Form 10-K Annual Report for the year ended December 31, 1995.* 10(c) 1991 Stock Option Plan -- Incorporated by reference to Registration Statement No. 33-40294, Exhibit 4(a).* 10(d) 1986 Stock Option Plan (as amended) -- Incorporated herein by reference to Exhibit 10(b) of the Registrant's Form 10-K Annual Report for the year ended January 3, 1993.* 10(e) 1995 Stock Compensation Plan -- Incorporated herein by reference to Exhibit 10(e) of the Registrant's Form 10-K Annual Report for the year ended December 31, 1995.* 10(f) Executive Incentive Plan -- (1).* 10(g) Domestic Deferred Compensation Plan (as amended) -- (1).* 10(h) Deferred Fee Plan for Directors (as amended) -- (1).* 10(i) Executive Income Deferral Plan -- (1).* 10(j) Excess Savings Plan -- (1).* 10(k) Supplemental Retirement Plan -- Incorporated herein by reference to Exhibit 10(h) of the Registrant's Form 10-K Annual Report for the year ended January 3, 1993.* 10(l) Executive Life Insurance Plan -- Incorporated herein by reference to Exhibit 10(i) of the Registrant's Form 10-K Annual Report for the year ended January 3, 1993.* 11 -- Calculation of Earnings Per Share -- Previously filed. 12 -- Statement of Computation of Ratio of Earnings to Fixed Charges -- Previously filed. 13 -- Annual report to Shareowners for fiscal year 1996 (only those portions of the Annual Report incorporated by reference in this document are deemed "filed") -- Previously filed. 21 -- Subsidiaries -- Previously filed. 3 5 27 -- Financial Data Schedule for Year Ended December 29, 1996- Previously filed. 28(a) -- Form 11-K for the Johnson & Johnson Savings Plan -- Filed with this document. 28(b) -- Form 11-K for the Johnson & Johnson Retirement Savings Plan -- Filed with this document. 28(c) -- Form 11-K for the Johnson & Johnson Savings Plan for Union Represented Employees -- Filed with this document. - ------------------ (1) Incorporated herein by reference to the Exhibit bearing the same Exhibit Number in Registrant's Form 10-K Annual Report for the fiscal year ended December 29, 1996. * Management contracts and compensatory plans and arrangements required to be filed as Exhibits to this form pursuant to Item 14(c) of the report. A copy of any of the Exhibits listed above will be provided without charge to any stockholder submitting a written request specifying the desired exhibit(s) to the Secretary at the principal executive offices of the Company. 4 EX-28.A 2 FORM 11-K: SAVINGS PLAN 1 Exhibit 28(a) SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 11-K ------------------------------ [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED] For the Fiscal Year Ended December 29, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] Commission File Number 1-3215 ------------------------------ JOHNSON & JOHNSON SAVINGS PLAN (Full title of the Plan) JOHNSON & JOHNSON ONE JOHNSON & JOHNSON PLAZA NEW BRUNSWICK, NEW JERSEY 08933 (Name of issuer of the securities held pursuant to the Plan and the address of its principal executive office) 2 Item 4. Financial Statements and Exhibits Report of Independent Accountants Financial Statements: Statements of Net Assets Available for Benefits, with Fund Information as of December 31, 1996 and 1995 Statements of Changes in Net Assets Available for Benefits, with Fund Information for the years ended December 31, 1996 and 1995 Notes to Financial Statements Supplemental Schedules: Schedule of Assets Held For Investment Purposes at December 31, 1996 Schedule of Reportable Transactions for the year ended December 31, 1996 Schedule of Nonexempt Transactions for the year ended December 31, 1996 Consent of Coopers & Lybrand L.L.P., dated June 20, 1997 The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have caused this annual report to be signed on its behalf by the undersigned thereunto duly authorized. JOHNSON & JOHNSON SAVINGS PLAN By:______________________________ R. Darretta Chairman, Pension Committee June 20, 1997 3 JOHNSON & JOHNSON SAVINGS PLAN ----------- FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES as of and for the years ended December 31, 1996 and 1995 4 JOHNSON & JOHNSON SAVINGS PLAN INDEX Report of Independent Accountants 2 Financial Statements: Statements of Net Assets Available for Benefits, with Fund Information as of December 31, 1996 and 1995 3-4 Statements of Changes in Net Assets Available for Benefits, with Fund Information for the years ended December 31, 1996 and 1995 5-6 Notes to Financial Statements 7-16 Supplemental Schedules: Item 27a - Schedule of Assets Held For Investment Purposes at December 31, 1996 17-18 Item 27d - Schedule of Reportable Transactions for the year ended December 31, 1996 19 Item 27e - Schedule of Nonexempt Transactions for the year ended December 31, 1996 20
1 5 REPORT OF INDEPENDENT ACCOUNTANTS To the Pension Committee of Johnson & Johnson Savings Plan We have audited the accompanying statement of net assets available for benefits, with fund information of the Johnson & Johnson Savings Plan (the "Savings Plan") as of December 31, 1996 and 1995, and the related statements of changes in net assets available for benefits, with fund information for the years then ended. These financial statements are the responsibility of the Savings Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Johnson & Johnson Savings Plan as of December 31, 1996 and 1995 and the changes in net assets available for benefits for the years then ended, in conformity with generally accepted accounting principles. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules as listed in the accompanying index on page 1 are presented for the purpose of additional analysis and are not a required part of the basic financial statements, but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The Fund Information in the statements of net assets available for benefits and the related statements of changes in net assets available for benefits is presented for purposes of additional analysis rather than to present the statements of net assets available for benefits and statements of changes in net assets available for benefits for each fund. The supplemental schedules and Fund Information have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. Parsippany, New Jersey May 23, 1997 2 6 JOHNSON & JOHNSON SAVINGS PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS with FUND INFORMATION As of December 31, 1996
PARTICIPANT DIRECTED ----------------------------------------------------------------- Fixed Intermediate USGS Fund Interest Fund Bond Fund Balanced Fund --------- ------------- ----------- ------------- ASSETS: Deposits in Group Annuity Contracts (Note 2) $610,823,219 Investments at Fair Value (Notes 2 and 6) Investments in Master Trust (Notes 2 and 6) $17,256,196 $16,738,962 $76,500,266 Accrued Dividends and Interest Receivable 80,446 2,851,698 Due from Johnson & Johnson Assets Designated for Transfer (Note 2) Hardship Loans to Participants ----------- ------------ ----------- ----------- Total Assets $17,336,642 $613,674,917 $16,738,962 $76,500,266 ----------- ------------ ----------- ----------- LIABILITIES Accrued Expenses $ 1,997 $ 72,108 $ 1,798 $ 9,188 Accrued Interest Long-Term Note Payable to J&J ----------- ------------ ----------- ----------- Net Assets Available for Benefits $17,334,645 $613,602,809 $16,737,164 $76,491,078 =========== ============ =========== ===========
PARTICIPANT DIRECTED ----------------------------- Diversified J&J Stock Fund Equity Fund Loan Fund -------------- ----------- --------- Deposits in Group Annuity Contracts (Note 2) Investments at Fair Value (Notes 2 and 6) $607,192,136 Investments in Master Trust (Notes 2 and 6) $368,472,950 Accrued Dividends and Interest Receivable 7,966 $ 8,703 Due from Johnson & Johnson Assets Designated for Transfer (Note 2) Hardship Loans to Participants 5,254,804 ------------ ------------ ---------- Total Assets $607,200,102 $368,472,950 $5,263,507 ------------ ------------ ---------- LIABILITIES Accrued Expenses $ 71,309 $ 243,228 Accrued Interest Long-Term Note Payable to J&J ------------ ------------ ---------- Net Assets Available for Benefits $607,128,793 $368,229,722 $5,263,507 ============ ============ ==========
Employee Stock Ownership Plan Trust Fund ------------------------- Total Allocated Unallocated Savings Plan --------- ----------- ------------ Deposits in Group Annuity Contracts (Note 2) $ 610,823,219 Investments at Fair Value (Notes 2 and 6) $123,998,633 $180,197,654 911,388,423 Investments in Master Trust (Notes 2 and 6) 478,968,374 Accrued Dividends and Interest Receivable 8,127 11,127 2,968,067 Due from Johnson & Johnson 7,927,197 7,927,197 Assets Designated for Transfer (Note 2) 17,933,605 (17,933,605) Hardship Loans to Participants 5,254,804 ------------ ------------ -------------- Total Assets $141,940,365 $170,202,373 $2,017,330,084 ------------ ------------ -------------- LIABILITIES Accrued Expenses $ 399,628 Accrued Interest $ 5,243,161 5,243,161 Long-Term Note Payable to J&J 66,579,822 66,579,822 ------------ ------------ -------------- Net Assets Available for Benefits $141,940,365 $ 98,379,390 $1,945,107,473 ============ ============ ==============
See Notes to Financial Statements 3 7 JOHNSON & JOHNSON SAVINGS PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS with FUND INFORMATION As of December 31, 1995
PARTICIPANT DIRECTED ---------------------------------------------------------------------------- Fixed Intermediate USGS Fund Interest Fund Bond Fund Balanced Fund J&J Stock Fund --------- ------------- --------- ------------- -------------- ASSETS: Deposits in Group Annuity Contracts (Note 2) $607,340,676 Investments at Fair Value (Notes 2 and 6) $440,459,022 Investments in Master Trust (Notes 2 and 6) $10,110,932 $11,978,234 $49,241,980 Accrued Dividends and Interest Receivable 49,238 3,481,506 19,464 Due from Johnson & Johnson Assets Designated for Transfer (Note 2) Hardship Loans to Participants ----------- ------------ ----------- ----------- ------------ Total Assets $10,160,170 $610,822,182 $11,978,234 $49,241,980 $440,478,486 ----------- ------------ ----------- ----------- ------------ LIABILITIES Accrued Expenses $ 694 $ 67,199 $ 809 $ 3,239 $ 23,363 Accrued Interest Long-Term Note Payable to J&J ----------- ------------ ----------- ----------- ------------ Net Assets Available for Benefits $10,159,476 $610,754,983 $11,977,425 $49,238,741 $440,455,123 =========== ============ =========== =========== ============
Participant Directed ----------- Employee Stock Ownership Plan Trust Fund Diversified ------------------------------ Total Equity Fund Loan Fund Allocated Unallocated Savings Plan ----------- --------- --------- ----------- ------------ ASSETS: Deposits in Group Annuity Contracts (Note 2) $ 607,340,676 Investments at Fair Value (Notes 2 and 6) $86,948,778 $173,967,682 701,375,482 Investments in Master Trust (Notes 2 and 6) $276,397,803 347,728,949 Accrued Dividends and Interest Receivable $ 24,991 19,024 3,594,223 Due from Johnson & Johnson 8,753,583 8,753,583 Assets Designated for Transfer (Note 2) 19,041,447 (19,041,447) Hardship Loans to Participants $3,006,987 3,006,987 ------------ ---------- ------------ ------------ -------------- Total Assets $276,397,803 $3,031,978 $105,990,225 $163,698,842 $1,671,799,900 ------------ ---------- ------------ ------------ -------------- LIABILITIES Accrued Expenses $ 20,356 $ 115,660 Accrued Interest $ 5,740,043 5,740,043 Long-Term Note Payable to J&J 72,747,066 72,747,066 ------------ ---------- ------------ ----------- -------------- Net Assets Available for Benefits $276,377,447 $3,031,978 $105,990,225 $85,211,733 $1,593,197,131 ============ ========== ============ =========== ==============
See Notes to Financial Statements 4 8 JOHNSON & JOHNSON SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS with FUND INFORMATION For The Year Ended December 31, 1996
PARTICIPANT DIRECTED ------------------------------------------------------------------------------------ Fixed Intermediate USGS Fund Interest Fund Bond Fund Balanced Fund J&J Stock Fund --------- ------------- ------------- ------------- -------------- Employee Contributions (Note 3) $ 1,279,645 $ 26,445,632 $ 2,140,977 $ 8,866,474 $ 33,954,707 Employer Contributions (Note 3) 414,888 8,798,272 659,365 2,659,125 11,433,727 Interest 891,759 39,992,993 1,073,776 1,960,085 84,875 Dividends 8,274,786 ------------ ------------- ------------ ------------- ------------- 2,586,292 75,236,897 3,874,118 13,485,684 53,748,095 Additions to (Deductions From) Net Assets: Neutrogena Transfer-In (Note 1) 8,683,362 2,491,438 1,292,468 3,528,162 7,372,567 Payments to Participants (Note 4) (1,406,944) (28,775,430) (439,889) (1,431,683) (20,755,596) Change in Unrealized Net Appreciation of Investments (205,640) 856,938 69,484,774 Realized Net Gain on Sale of Investments 108,566 5,830,619 14,213,619 Interest Expense Administrative Expenses (11,541) (445,379) (47,884) (387,583) (453,565) Assets Transferred (Note 2) (2,676,000) (45,659,700) 178,000 5,370,200 43,063,776 ------------ ------------- ------------ ------------- ------------- $ 7,175,169 $ 2,847,826 $ 4,759,739 $ 27,252,337 $ 166,673,670 Net Assets, Beginning of Period 10,159,476 610,754,983 11,977,425 49,238,741 440,455,123 ------------ ------------- ------------ ------------- ------------- Net Assets, End of Period $ 17,334,645 $ 613,602,809 $ 16,737,164 $ 76,491,078 $ 607,128,793 ============ ============= ============ ============= =============
Participant Directed Employee Stock Ownership ----------- Plan Trust Fund Diversified --------------------------- Total Equity Fund Loan Fund Allocated Unallocated Savings Plan ----------- --------- --------- ----------- ------------ Employee Contributions (Note 3) $ 23,528,986 $ 96,216,421 Employer Contributions (Note 3) 7,344,508 $ 7,927,197 39,237,082 Interest $ 380,160 $ 53,865 79,114 44,516,627 Dividends 5,815,579 560,967 3,822,612 18,473,944 ------------ ------------- ------------- ------------- -------------- 36,689,073 380,160 614,832 11,828,923 198,444,074 Additions to (Deductions From) Net Assets: Neutrogena Transfer-In (Note 1) 4,133,147 1,714,658 29,215,802 Payments to Participants (Note 4) (9,974,627) 136,711 (3,550,659) (66,198,117) Change in Unrealized Net Appreciation of Investments 30,981,029 28,930,038 14,994,135 145,041,274 Realized Net Gain on Sale of Investments 31,380,998 2,401,469 53,935,271 Interest Expense (6,061,565) (6,061,565) Administrative Expenses (1,120,445) (2,466,397) Assets Transferred (Note 2) (236,900) 7,554,460 (7,593,836) ------------ ------------- ------------- ------------- -------------- $ 91,852,275 $ 2,231,529 $ 35,950,140 $ 13,167,657 $ 351,910,342 Net Assets, Beginning of Period 276,377,447 3,031,978 105,990,225 85,211,733 1,593,197,131 ------------ ------------- ------------- -------------- ------------- Net Assets, End of Period $368,229,722 $ 5,263,507 $ 141,940,365 $ 98,379,390 $1,945,107,473 ============ ============= ============= ============== ==============
See Notes to Financial Statements 5 9 JOHNSON & JOHNSON SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS with FUND INFORMATION For The Year Ended December 31, 1995
PARTICIPANT DIRECTED ---------------------------------------------------------------------------------- Fixed Intermediate USGS Fund Interest Fund Bond Fund Balanced Fund J&J Stock Fund --------- ------------- ----------- ------------- -------------- Employee Contributions (Note 3) $ 1,247,647 $ 31,051,782 $ 1,923,622 $ 6,498,250 $ 23,524,426 Employer Contributions (Note 3) 419,079 10,551,854 573,719 1,974,513 8,200,569 Interest 565,456 40,669,619 655,216 1,210,751 92,718 Dividends 6,137,231 ------------ ------------- ------------- ------------- ------------- 2,232,182 82,273,255 3,152,557 9,683,514 37,954,944 Additions to (Deductions From) Net Assets: Payments to Participants (Note 4) (812,168) (37,240,718) (496,005) (1,931,019) (16,380,727) Change in Unrealized Net Appreciation 769,412 5,966,829 137,687,670 of Investments Realized Net Gain on Sale of Investments 129,277 2,616,270 9,991,460 Interest Expense Administrative Expenses (8,361) (583,006) (28,687) (182,913) (253,892) Assets Transferred (Note 2) 2,086,752 (36,832,034) 1,646,700 3,122,300 20,624,100 ------------ ------------- ------------- ------------- ------------- $ 3,498,405 $ 7,617,497 $ 5,173,254 $ 19,274,981 $ 189,623,555 Net Assets, Beginning of Period 6,661,071 603,137,486 6,804,171 29,963,760 250,831,568 ------------ ------------- ------------- ------------- ------------- Net Assets, End of Period $ 10,159,476 $ 610,754,983 $ 11,977,425 $ 49,238,741 $ 440,455,123 ============ ============= ============= ============= =============
Participant Directed Employee Stock Ownership ----------- Plan Trust Fund Diversified ------------------------ Total Equity Fund Loan Fund Allocated Unallocated Savings Plan ----------- --------- --------- ---------- ------------ Employee Contributions (Note 3) $ 19,589,461 $ 83,835,188 Employer Contributions (Note 3) 6,466,283 $ 8,753,583 36,939,600 Interest $ 224,890 $ 130,036 43,548,686 Dividends 4,916,778 1,347,644 2,521,572 14,923,225 ------------- ------------- ------------- ------------- -------------- 30,972,522 224,890 10,101,227 2,651,608 179,246,699 Additions to (Deductions From) Net Assets: Payments to Participants (Note 4) (9,941,160) 340,693 (2,752,858) (69,213,962) Change in Unrealized Net Appreciation 45,039,099 40,388,503 52,010,538 281,862,051 of Investments Realized Net Gain on Sale of Investments 21,507,343 1,502,649 35,746,999 Interest Expense (6,656,031) (6,656,031) Administrative Expenses (576,099) (1,632,958) Assets Transferred (Note 2) 9,419,894 (67,712) ------------- ------------- ------------- ------------- -------------- $ 96,421,599 $ 565,583 $ 47,669,160 $49,508,764 $ 419,352,798 Net Assets, Beginning of Period 179,955,848 2,466,395 58,321,065 35,702,969 1,173,844,333 ------------- ------------- ------------- ------------- -------------- Net Assets, End of Period $ 276,377,447 $ 3,031,978 $ 105,990,225 $ 85,211,733 $1,593,197,131 ============= ============= ============= ============= ==============
See Notes to Financial Statements 6 10 JOHNSON & JOHNSON SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS 1. Organization: The Johnson & Johnson Savings Plan (the "Plan" - a defined contribution plan) was established on June 1, 1982 for eligible salaried and non-union hourly employees of Johnson & Johnson (the "Company") and certain domestic subsidiaries. The Plan was designed to enhance the existing retirement program of eligible employees. The funding of the Plan is made through employee and Company contributions. The assets of the Plan are maintained and transactions therein are executed by the trustee, Bankers Trust Company. Effective January 1, 1991, the Company implemented an Employee Stock Ownership Plan ("ESOP") to supplement its existing 401(k) plan. The ESOP is a leveraged employee stock ownership plan and is designed to comply with Section 4975(e)(7) and the regulations thereunder of the Internal Revenue Code of 1986, as amended, and is subject to the applicable provisions of the Employee Retirement Income Security Act of 1974, as amended. The ESOP is used to fund an additional 25% match of employee contributions ("ESOP contribution"). Initial funding for the ESOP was made through an advance from Johnson & Johnson of $100 million, which was used to purchase 3,109,600 shares of J&J common stock on the open market. These shares are allocated to Plan participants under a formula set forth in the note agreement. Accordingly, the financial statements of the Plan for the years 1996 and 1995 present separately the assets and liabilities and changes therein pertaining to: (a) the accounts of employees with vested rights in allocated stock (Allocated) and (b) stock not yet allocated to employees (Unallocated). Each participant is entitled to exercise voting rights attributable to the shares allocated to their account. Effective April 1, 1996 the assets of the Neutrogena Corporation 401(k) Profit Sharing Plan were transferred into the Johnson & Johnson Savings Plan. 2. Summary of Significant Accounting Policies: Valuation of Investments: Equity investments in the Johnson & Johnson Stock Fund and the ESOP, administered by the Bankers Trust Company, are valued at the average of the high and low market price on the last business day of the year. The cost of equity investments in the Johnson & Johnson Stock Fund are recorded at the average market price of the stock transactions for the month during which the contribution is made. Continued 7 11 JOHNSON & JOHNSON SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS, Continued 2. Summary of Significant Accounting Policies, (Continued): The investments in the U.S. Government Securities, Fixed Interest, and Diversified Equity funds represent the Plan's share of assets in the Savings Plan Trust. The U.S. Government Securities Fund consists of short-term obligations that are issued or guaranteed by the U.S. Government. Investments are valued at cost which approximates the market. Deposits in group annuity contracts in the Fixed Interest Fund are recorded at their contract values which approximates fair value because these investments have fully benefit-responsive features. Contract value represents contributions and reinvested income, less any withdrawals plus accrued interest. Participants may direct the withdrawal or transfer of all or a portion of their investment at contract value. However, withdrawals influenced by employer initiated events such as in connection with the sale of a business, may result in a distribution at other than contract value. There are no reserves against contract values for credit risk of contract issuers or otherwise. The average yield of the Fixed Income Fund was approximately 6.78 percent for 1996 and 6.81 percent for 1995. The crediting interest rate of the Fixed Income Fund was approximately 7.09 percent for 1996 and 7.25 percent for 1995. The difference between the average yield and crediting interest rate is due to administrative charges paid by the Plan. Administrative charges are allocated monthly based on the quarterly percentage of assets in each of the six investment funds. The crediting interest rate for the investment contracts is either agreed-to in advance with the issuer or varies based on an agreed-to formula, but cannot be less than zero. Equity investments and corporate obligations in the Diversified Equity Fund, managed by the Capital Guardian Trust Company, are traded on a national securities exchange and are valued at the last reported market sales price on the last business day of the year. Investments in the Diversified Equity Fund are purchased periodically by the Capital Guardian Trust Company based on the prevailing market values of the underlying investments. The Intermediate Bond Fund invests in various kinds of bonds, primarily corporate and U.S. government bonds. The Balanced Fund is invested in a mix of stocks, bonds, and real estate. The investment in these funds represents the Plan's share of the assets in the Johnson & Johnson Pension Trust Fund. These investments are stated at fair value as calculated by the trustee, Bankers Trust Company. Generally, they represent securities traded on a national securities exchange which are valued at the last reported sales price on the last business day of the year. Temporary cash investments are stated at redemption value which approximates fair value. Transfers: Transfers among funds, which are made at the participant's election, have been presented as assets transferred. With respect to the ESOP, transfers represent shares allocated to the participants. Continued 8 12 JOHNSON & JOHNSON SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS, Continued 2. Summary of Significant Accounting Policies, (Continued): Use of Estimates: The preparation of the Plan's financial statements in conformity with generally accepted accounting principles requires the plan administrator to make estimates and assumptions that affect the reported amounts of net assets available for benefits at the date of the financial statements and the changes in net assets available for benefits during the reporting period and, when applicable, disclosures of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates. Risks and Uncertainties: The Plan provides for various participant investment options in funds which can invest in any combination of stocks, bonds, fixed income securities, mutual funds, and other investment securities. Investment securities are exposed to various risks, such as interest rate, market and credit. Due to the level of risk associated with certain investment securities and the level of uncertainty related to changes in the value of investment securities, it is at least reasonably possible that changes in risks in the near term would materially affect participants' account balances and the amounts reported in the statements of net assets available for benefits and the statements of changes in net assets available for benefits. Other: Interest and dividend income is recorded as earned on the accrual basis. Purchases and sales of investment securities are reflected on a trade-date basis. Gains and losses on sales of investment securities are determined on the average cost method. All administrative expenses are paid by the Trust except for certain employees of the J&J Savings Plan Administration Department. The expenses for the recordkeeping system used by the Plan were paid by the Company through October 1996. Beginning in November 1996, these costs are paid by the Trust. 3. Contributions: Participating employees may contribute a minimum of 3% up to a maximum of 20% of their base salary in combinations of pre- and post-tax contributions. Pre-tax contributions may not exceed the smaller of 10% of their base salary or $9,500 in 1996 or $9,240 in 1995. The Company contributes to the Plan an amount equal to 75% of the employee directed contributions of the participants up to a maximum of 6% of the employee's base salary. Continued 9 13 JOHNSON & JOHNSON SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS, Continued 3. Contributions, (continued): Contributions are made to the Plan by participants through payroll deductions and by the Company on behalf of participants. Such contributions, with the exception of the ESOP contribution, are invested in any of the six investment funds at the direction of the participating employees. The 25% ESOP contribution is invested in J&J stock, except for employees over 55 years of age who may choose the alternative investments. ESOP shares are released from the Trust each February following the payment of the loan (see note 9), in accordance with the ESOP Trust Agreement. Shares released from the Trust, in accordance with the note agreement, may be more or less than shares earned by participants. In the accompanying statements of net assets available for benefits, shares earned by participants in excess of those allocated have been reflected in the accompanying financial statements as assets designated for transfer. The number of participants invested in each fund at December 31, 1996 and 1995 was:
1996 1995 ---- ---- U.S. Government Securities Fund 2,222 1,808 Fixed Interest Fund 19,253 20,806 Intermediate Bond Fund 2,813 2,308 Balanced Fund 6,668 4,953 Johnson & Johnson Stock Fund 20,982 17,191 Employee Stock Ownership Plan 28,829 26,973 Diversified Equity Fund 15,273 13,826
Participants may elect to invest in more than one fund. A total of 32,064 and 30,333 active and former employees had investments in the Plan for 1996 and 1995, respectively. 4. Benefits: All participants are fully vested in their contributions and the company match. The benefit to which a Plan participant is entitled is the amount provided by contributions (Company and participant) and investment earnings thereon (including net realized and unrealized investment gains and losses) which have been allocated to such participant's account balance. Participants are allowed to withdraw their after-tax contributions and earnings thereon, at any time. Participants may withdraw before-tax contributions only upon meeting certain hardship conditions. 5. Loans to Participants: Participants may borrow up to a maximum of 50% of their vested account balance or $50,000, whichever is less. Loans bear a market rate of interest plus 1% and are repayable within five years. Continued 10 14 JOHNSON & JOHNSON SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS, CONTINUED 6. Investments: Investments held by the Plan as of December 31, 1996 are summarized as follows:
Johnson & Johnson Employee Stock Ownership Stock Fund Plan Trust Fund Combined ------------------------ -------------------------- ------------------------ Fair Value Cost Fair Value Cost Fair Value Cost ---------- ---- ---------- ---- ---------- ---- Johnson & Johnson Common Stock $606,592,091 $322,517,433 $299,640,157 $95,349,753 $906,232,248 $417,867,186 Temporary Cash Investments 600,045 600,045 4,556,130 4,556,130 5,156,175 5,156,175 ------------ ------------ ------------ ----------- ------------ ------------ $607,192,136 $323,117,478 $304,196,287 $99,905,883 $911,388,423 $423,023,361 ============ ============ ============ =========== ============ ============
The investments in the U.S. Government Securities, Fixed Interest, and the Diversified Equity Funds reflected in the accompanying Statement of Net Assets Available for Benefits represent the Plan's share of investments (approximately 99.6% of fair value) held by the Johnson & Johnson Savings Plan Trust. Total investments held by the Trust on behalf of the Plan and the Johnson & Johnson Savings Plan for Union Represented Employees are summarized as follows:
Description Fair Value Cost ----------- ---------- ---- USGS Fund: U.S. Government Securities - Short Term $ 18,055,692 $ 18,055,692 Other* 84,130 84,130 Fixed Interest Fund: Deposits in Group Annuity Contracts 612,131,658 612,131,658 Other* 2,857,861 2,857,861 Diversified Equity Fund: Common Stocks 369,796,552 269,727,282 Other* 623,223 623,223 ----------------- -------------- $1,003,549,116 $903,479,846 ================= ==============
* Other consists of interest and/or dividends receivable. Continued 11 15 JOHNSON & JOHNSON SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS, CONTINUED 6. Investments, (continued): The investments in the Intermediate Bond and Balanced Funds reflected in the accompanying Statement of Net Assets Available for Benefits represent the Plan's share of investments (approximately 4.0% of fair value) held by the Johnson & Johnson Pension Trust Fund. Total investments held by the Trust on behalf of the Plan and the various Johnson & Johnson Pension Plans are summarized as follows:
Description Fair Value Cost ----------- ---------- ---- U.S. Government Securities - Short Term $ 124,077,332 $ 123,558,511 Corporate Bonds & Notes - Short Term 110,805,867 107,215,671 U.S. Government Securities - Long Term 84,840,192 83,710,301 Corporate Bonds & Notes - Long Term 77,639,128 74,595,639 Common Stocks: Johnson & Johnson 268,013,200 28,297,086 Other 1,373,444,680 1,132,227,680 Preferred Stocks 26,114,435 22,892,065 Commingled Investment Funds 144,610,428 147,328,704 Temporary Investments 77,313,091 76,497,143 Other 58,720,153 58,735,628 -------------- --------------- $2,345,578,506 $1,855,058,428 ============== ==============
Investments held by the Plan as of December 31, 1995 are summarized as follows:
Johnson & Johnson Employee Stock Ownership Stock Fund Plan Trust Fund Combined ---------------------- ------------------------- --------------------- Fair Value Cost Fair Value Cost Fair Value Cost ---------- ---- ---------- ---- ---------- ---- Cost Johnson & Johnson Common Stock $439,204,633 $224,753,982 $256,903,078 $ 96,556,687 $696,107,711 $321,310,669 Temporary Cash Investments 1,254,389 1,254,389 4,013,382 4,013,382 5,267,771 5,267,771 ------------ ------------ ------------ ------------ ------------ ------------ $440,459,022 $226,008,371 $260,916,460 $100,570,069 $701,375,482 $326,578,440 ============ ============ ============ ============ ============ ============
Continued 12 16 JOHNSON & JOHNSON SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS, CONTINUED 6. Investments (continued): As of December 31, 1995, the investments in the U.S. Government Securities, Fixed Interest, and the Diversified Equity Funds reflected in the accompanying Statement of Net Assets Available for Benefits represent the Plan's share of investments (approximately 99.7% of fair value) held by the Johnson & Johnson Savings Plan Trust. Total investments held by the Trust on behalf of the Plan and the Johnson & Johnson Savings Plan for Union Represented Employees are summarized as follows:
Description Fair Value Cost ----------- ---------- ---- USGS Fund: U.S. Government Securities - Short Term $ 10,697,248 $ 10,697,248 Other* 52,087 52,087 Fixed Interest Fund: Deposits in Group Annuity Contracts 608,271,081 608,271,081 Other* 3,486,745 3,486,745 Diversified Equity Fund: Common Stocks 277,019,865 208,082,469 Other* 490,757 490,757 ------------ ------------ $900,017,783 $831,080,387 ============ ============
* Other consists of interest and/or dividends receivable. As of December 31, 1995, the investments in the Intermediate Bond and Balanced Funds reflected in the accompanying Statement of Net Assets Available for Benefits represent the Plan's share of investments (approximately 3.1% of fair value) held by the Johnson & Johnson Pension Trust Fund. Total investments held by the Trust on behalf of the Plan and the various Johnson & Johnson Pension Plans are summarized as follows:
Description Fair Value Cost ----------- ---------- ---- U.S. Government Securities - Short Term $ 65,541,811 $ 63,214,482 Corporate Bonds & Notes - Short Term 63,578,204 60,490,951 U.S. Government Securities - Long Term 82,984,564 80,345,294 Corporate Bonds & Notes - Long Term 52,388,133 48,518,876 Common Stocks: Johnson & Johnson 231,328,800 28,781,056 Other 1,218,027,797 976,659,152 Preferred Stocks 22,502,526 19,568,608 Commingled Investment Funds 163,311,922 169,233,841 Temporary Investments 65,984,414 61,454,154 Other 6,319,021 6,321,928 -------------- -------------- $1,971,967,192 $1,514,588,342 ============== ==============
Continued 13 17 JOHNSON & JOHNSON SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS, Continued 6. Investments, (continued): Realized gains on investments sold and distributed during the year ended December 31, 1996 and 1995 are summarized as follows:
J&J Stock Fund Diversified Equity Fund Employee Stock Ownership Plan Fund -------------- ----------------------- ---------------------------------- Book Value Proceeds Gain Book Value Proceeds Gain Book Value Proceeds Gain ---------- -------- ---- ---------- -------- ---- ---------- -------- ---- 1996 $41,810,530 $56,024,149 $14,213,619 $205,781,943 $237,162,941 $31,380,998 $1,222,499 $3,623,968 $2,401,469 1995 16,926,019 26,917,479 9,991,460 140,782,043 162,289,386 21,507,343 1,458,237 2,960,886 1,502,649
Intermediate Bond Fund Balanced Fund --------------------------------- ---------------------------------- Book Value Proceeds Gain Book Value Proceeds Gain ---------- -------- ---- ---------- -------- ---- 1996 $18,254,334 $18,362,900 $108,566 $72,418,029 $78,248,648 $5,830,619 1995 9,153,916 9,283,193 129,277 36,539,263 39,155,533 2,616,270
Continued 14 18 JOHNSON & JOHNSON SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS, Continued 7. Tax Status: The Internal Revenue Service has determined and informed the Company by a letter dated January 17, 1986, that the Plan and related trust are designed in accordance with applicable sections of the Internal Revenue Code (IRC). The Plan has been amended since receiving the determination letter. However, the Plan administrator believes that the Plan is designed and is currently being operated in compliance with applicable requirements of the IRC. 8. Termination Priorities: The Company has the right to terminate the Plan at any time, and in the event the Plan is terminated, subject to conditions set forth in ERISA, the amount of each participant's account balance in the Plan is fully vested. 9. Indebtedness In connection with the formation of the Plan's ESOP feature, the Plan borrowed $100 million from Johnson & Johnson for the purpose of purchasing J&J common stock. The note bears interest at 9% and is payable through February 15, 2005. The Company is obligated to make contributions in cash to the ESOP which, when aggregated with the ESOP's dividends and interest earnings, equal the amount necessary to enable the ESOP to make its regularly scheduled payments of principal and interest due on the term loan. Aggregate maturities for the next five years are as follows: 1997 $ 6,396,796 1998 6,658,750 1999 6,955,528 2000 7,289,791 2001 7,664,462 Thereafter 31,614,495 ----------- $66,579,822 ===========
In the event of Plan termination or of termination of the employee stock ownership portion of the Plan, any unallocated shares shall be sold to the Company or on the open market. The proceeds of such sale shall be used to satisfy the outstanding principal and interest. 10. Concentrations of Credit Risk Financial instruments which potentially subject the Plan to concentrations of credit risk consist principally of the Fixed Interest Fund holdings in fully benefit-responsive group annuity contracts with insurance and other financial institutions. Continued 15 19 JOHNSON & JOHNSON SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS, Continued 10. Concentrations of Credit Risk, (Continued): The Fund places its fully benefit-responsive group annuity contracts with high-credit quality institutions and, by policy, limits the amount of credit exposure to any one financial institution. If any of the insurance companies that the group annuity contracts are invested with fail to perform according to the contract, the asset value of the Plan could be impaired. 11. Reconciliation of Financial Statements to Form 5500: The following is a reconciliation of net assets available for benefits per the financial statements to the Form 5500:
December 31, 1996 ---- Net Assets Available for Benefits Per the Financial Statements $1,945,107,473 Amounts Allocated to Withdrawing Participants (5,390,992) -------------- Net Assets Available for Benefits Per the Form 5500 $1,939,716,481 ==============
Year Ended December 31, 1996 ---- Benefits Paid to Participants Per the Financial Statements $62,647,458 Add: Amounts Allocated to Withdrawing Participants at December 31, 1996 5,390,992 Less: Amounts Allocated to Withdrawing Participants at December 31, 1995 (4,368,400) ----------- Benefits Paid to Participants Per the Form 5500 $63,670,050 ===========
Amounts allocated to the withdrawing participants are recorded on the Form 5500 for benefit claims that have been processed and approved for payment prior to December 31, 1996 but not yet paid as of that date. 12. Subsequent Event On April 1, 1997 approximately $30 million, representing the assets of the Cordis Corporation Tax Sheltered Investment Plan, were transferred into the Johnson & Johnson Savings Plan. Continued 16 20 Supplemental Schedule JOHNSON & JOHNSON SAVINGS PLAN ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AS OF DECEMBER 31, 1996
FACE AMOUNT OR SHARES ISSUES COST FAIR VALUE - --------- ------ ---- ---------- J&J STOCK FUND Common Stock 12,004,118 shs. Johnson & Johnson $322,517,433 $606,592,091 Temporary Investments $600,045 BT Pyramid Directed Account Cash Fund 600,045 600,045 ------------ ------------ Total J&J Stock Fund $323,117,478 $607,192,136 ============ ============ EMPLOYEE STOCK OWNERSHIP PLAN TRUST FUND Common Stock 5,929,711 shs. Johnson & Johnson $ 95,349,753 $299,640,157 Temporary Investment $ 4,556,130 BT Pyramid Directed Account Cash Fund 4,556,130 4,556,130 ------------ ------------ Total ESOP Trust Fund $99,905,883 $304,196,287 =========== ============
Continued 17 21 Supplemental Schedule JOHNSON & JOHNSON SAVINGS PLAN ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AS OF DECEMBER 31, 1996
FACE AMOUNT ISSUES FAIR VALUE - ----------- ------ ---------- Loan Fund $5,254,804 Loans to Participants (Fixed Interest rate based on the prime lending rate plus one percentage point. The repayment period is from one to five years.) $5,254,804 8,703 Interest Receivable 8,703 ------------ Total Loan Fund $5,263,507 ==========
18 22 Supplemental Schedule JOHNSON & JOHNSON SAVINGS PLAN ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 1996
DISPOSED ACQUIRED ------------------------------------------------ --------------------------- SECURITY/PARTY GAIN/ DESCRIPTION SALES COSTS PROCEEDS (LOSS) PURCHASES COSTS ----- ----- -------- ------ --------- ----- (# of Transactions) (# of Transactions) SERIES OF TRANSACTIONS: BT Pyramid Directed Account-Cash Fund (a) $90,024,465 $90,024,465 0 (a) $87,100,840 Johnson & Johnson Common Stock 207 $90,435,672
(a) Custodian is unable to provide detailed information on the number of transactions. 19 23 Supplemental Schedule JOHNSON & JOHNSON SAVINGS PLAN ITEM 27e - SCHEDULE OF NONEXEMPT TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 1996
PURCHASES SALES ----------------------------------- ----------------------- NAME AFFILIATION COST SALES PRICE GAIN - ---- ----------- ---- ----------- ---- Johnson & Johnson Common Stock Plan Administrator $90,435,672 $ - $ -
20 24 COOPERS & LYBRAND L.L.P. LETTERHEAD CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in the registration statements of Johnson & Johnson Savings Plan on Form S-8 (File No. 02-77153 and 33-40295) of our report dated May 23, 1997, on our audits of the financial statements and financial statement schedules of Johnson and Johnson Savings Plan as of December 31, 1996 and 1995, and for the years ended December 31, 1996 and 1995, which report is included in the Form 11-K. COOPERS & LYBRAND L.L.P. Parsippany, New Jersey June 20, 1997 EX-28.B 3 FORM 11-K: RETIREMENT SAVINGS PLAN 1 Exhibit 28(b) SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 11-K ------------------------------ [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED] For the Fiscal Year Ended December 29, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] Commission File Number 1-3215 ------------------------------ JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN (Full title of the Plan) JOHNSON & JOHNSON ONE JOHNSON & JOHNSON PLAZA NEW BRUNSWICK, NEW JERSEY 08933 (Name of issuer of the securities held pursuant to the Plan and the address of its principal executive office) 2 Item 4. Financial Statements and Exhibits Report of Independent Accountants Financial Statements: Statements of Net Assets Available for Benefits, with Fund Information as of December 31, 1996 and 1995 Statements of Changes in Net Assets Available for Benefits, with Fund Information for the years ended December 31, 1996 and 1995 Notes to Financial Statements Supplemental Schedules: Schedule of Assets Held For Investment Purposes at December 31, 1996 Schedule of Reportable Transactions for the year ended December 31, 1996 Schedule of Nonexempt Transactions for the year ended December 31, 1996 Consent of Coopers & Lybrand L.L.P., dated June 20, 1997 The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have caused this annual report to be signed on its behalf by the undersigned thereunto duly authorized. JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN By:_________________________________ R. Darretta Chairman, Pension Committee June 20, 1997 3 JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN ----------- FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES as of and for the years ended December 31, 1996 and 1995 4 JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN INDEX Report of Independent Accountants 2 Financial Statements: Statements of Net Assets Available for Benefits, with Fund Information as of December 31, 1996 and 1995 3 Statements of Changes in Net Assets Available for Benefits, with Fund Information for the years ended December 31, 1996 and 1995 4 Notes to Financial Statements 5-10 Supplemental Schedules: Item 27a - Schedule of Assets Held For Investment Purposes at December 31, 1996 11 Item 27d - Schedule of Reportable Transactions for the year ended December 31, 1996 12 Item 27e - Schedule of Nonexempt Transactions for the year ended December 31, 1996 13
1 5 REPORT OF INDEPENDENT ACCOUNTANTS To the Pension Committee of Johnson & Johnson Retirement Savings Plan We have audited the accompanying statements of net assets available for benefits, with fund information of the Johnson & Johnson Retirement Savings Plan (the "Savings Plan") as of December 31, 1996 and 1995, and the related statements of changes in net assets available for benefits, with fund information for the years then ended. These financial statements are the responsibility of the Savings Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Johnson & Johnson Retirement Savings Plan as of December 31, 1996 and 1995 and the changes in net assets available for benefits for the years then ended, in conformity with generally accepted accounting principles. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules as listed in the accompanying index on page 1 are presented for purposes of additional analysis and are not a required part of the basic financial statements, but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The Fund Information in the statements of net assets available for benefits and the related statements of changes in net assets available for benefits is presented for purposes of additional analysis rather than to present the statements of net assets available for benefits and statements of changes in net assets available for benefits for each fund. The supplemental schedules and Fund Information have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. Parsippany, New Jersey May 23, 1997 2 6 JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS with FUND INFORMATION as of December 31, 1996 and 1995
PARTICIPANT DIRECTED ----------------------------------------------------------------------------- 1996 1995 ------------------------------------------------------------ -------------- Short-Term Short-Term Investment J&J Total Investment Fund Stock Fund Equity Fund Savings Plan Fund ------------ ---------- ----------- ------------ ------------ ASSETS Investments at Fair Value (Notes 2 and 5) $4,409,368 $36,146,116 $2,954,537 $43,510,021 $4,200,145 ---------- ----------- ---------- ----------- ---------- Total Assets $4,409,368 $36,146,116 $2,954,537 $43,510,021 $4,200,145 ---------- ----------- ---------- ----------- ---------- LIABILITIES Accrued Expenses $ 2,657 $ 22,443 $ 1,746 $ 26,846 $ 6,212 ---------- ----------- ---------- ----------- ---------- Net Assets Available for Benefits $4,406,711 $36,123,673 $2,952,791 $43,483,175 $4,193,933 ========== =========== ========== =========== ========== PARTICIPANT DIRECTED ---------------------------------------------- 1995 ---------------------------------------------- J&J Total Stock Fund Equity Fund Savings Plan ---------- ----------- ------------ ASSETS Investments at Fair Value (Notes 2 and 5) $27,975,661 $2,498,934 $34,674,740 ----------- ---------- ----------- Total Assets $27,975,661 $2,498,934 $34,674,740 ----------- ---------- ----------- LIABILITIES Accrued Expenses $ 32,552 $ 3,632 $ 42,396 ----------- ---------- ----------- Net Assets Available for Benefits $27,943,109 $2,495,302 $34,632,344 =========== ========== ===========
See Notes to Financial Statements 3 7 JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS with FUND INFORMATION For The Years Ended December 31, 1996 and 1995
PARTICIPANT DIRECTED ------------------------------------------------------------------------------------- 1996 1995 ----------------------------------------------------------------- -------------- Short-Term Short-Term Investment J&J Total Investment Fund Stock Fund Equity Fund Savings Plan Fund ------------- ---------- ----------- ------------ ------------- Employee Contributions (Note 3) $ 1,046,261 $ 3,862,023 $ 737,396 $ 5,645,680 $ 1,125,304 Employer Contributions (Note 3) 22,265 2,656,028 1,581 2,679,874 29,966 Interest Income 221,373 10,598 231,971 223,363 Dividend Income 505,906 178,045 683,951 ----------- ------------ ----------- ------------ ------------ 1,289,899 7,034,555 917,022 9,241,476 1,378,633 Additions to (Deductions From) Net Assets: Payments to Participants (Note 4) (541,417) (4,160,563) (412,510) (5,114,490) (599,412) Change in Unrealized Appreciation of Investment 3,070,156 164,607 3,234,763 Realized Gain on Sale of Investments 1,504,064 127,421 1,631,485 Realized Gain on Stock Distributed 60,267 60,267 Administrative Expenses (19,104) (171,715) (11,851) (202,670) (20,779) Assets Transferred (Note 2) (516,600) 843,800 (327,200) (127,700) ----------- ------------ ----------- ------------ ------------ $ 212,778 $ 8,180,564 $ 457,489 $ 8,850,831 $ 630,742 Net Assets, Beginning of Period 4,193,933 27,943,109 2,495,302 34,632,344 3,563,191 ----------- ------------ ----------- ------------ ------------ Net Assets, End of Period $ 4,406,711 $ 36,123,673 $ 2,952,791 $ 43,483,175 $ 4,193,933 =========== ============ =========== ============ ============
PARTICIPANT DIRECTED --------------------------------------------------- 1995 --------------------------------------------------- J&J Total Stock Fund Equity Fund Savings Plan ---------- ----------- ------------ Employee Contributions (Note 3) $ 3,134,488 $ 756,415 $ 5,016,207 Employer Contributions (Note 3) 2,473,034 3,362 2,506,362 Interest Income 9,783 233,146 Dividend Income 388,679 150,646 539,325 ------------ ------------ ------------ 6,005,984 910,423 8,295,040 Additions to (Deductions From) Net Assets: Payments to Participants (Note 4) (3,278,025) (347,865) (4,225,302) Change in Unrealized Appreciation of Investment 8,432,570 358,732 8,791,302 Realized Gain on Sale of Investments 834,352 31,250 865,602 Realized Gain on Stock Distributed 96,951 96,951 Administrative Expenses (101,336) (10,906) (133,021) Assets Transferred (Note 2) 235,900 (108,200) ------------ ------------ ------------ $ 12,226,396 $ 833,434 $ 13,690,572 Net Assets, Beginning of Period 15,716,713 1,661,868 20,941,772 ------------ ------------ ------------ Net Assets, End of Period $ 27,943,109 $ 2,495,302 $ 34,632,344 ============ ============ ============
See Notes to Financial Statements 4 8 JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS 1. Organization: The Johnson & Johnson Retirement Savings Plan (the "Plan" - a defined contribution plan) was established on March 1, 1990 for eligible employees of certain subsidiaries of Johnson & Johnson (the "Company") located in Puerto Rico which have adopted the Plan. The Plan was designed to provide eligible employees with an opportunity to strengthen their financial security at retirement by providing an incentive to save and invest regularly. The funding of the Plan is made through employee and Company contributions. The assets of the Plan are maintained and transactions therein are executed by the trustee, Banco Popular de Puerto Rico. 2. Summary of Significant Accounting Policies: Valuation of Investments: Equity investments in the Johnson & Johnson Stock Fund, administered by the Banco Popular de Puerto Rico, are valued at the closing market price on the last business day of the year. Equity investments in the Equity Fund, managed by the Capital Research and Management Company, represent shares of a registered investment company and are valued at quoted market price which represents the net asset value of shares held by the Plan at year-end. The cost of equity investments in the Johnson & Johnson Stock Fund are recorded at the average market price of the stock transactions for the month during the month of purchase. Units in the Equity Fund are purchased throughout the month at the prevailing costs on those dates. Deposits in short-term investments in the Short-Term Investment Fund are principally purchases of shares of the Prime Portfolio of Vanguard Money Market Reserves, Inc. The Portfolio invests in securities which mature in less than one year. The value of this portfolio is the market value on the last business day of the year. Temporary cash investments are stated at redemption value which approximates fair value. Transfers: Transfers among funds, which are made at the participant's election, have been presented as assets transferred. Continued 5 9 JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS 2. Summary of Significant Accounting Policies, (continued) Use of Estimates: The preparation of the Plan's financial statements in conformity with generally accepted accounting principles requires the plan administrator to make estimates and assumptions that affect the reported amounts of net assets available for benefits at the date of the financial statements and the changes in net assets available for benefits during the reporting period and, when applicable, disclosures of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates. Risks and Uncertainties: The Plan provides for various participant investment options in funds which can invest in any combination of stocks, bonds, fixed income securities, mutual funds, and other investment securities. Investment securities are exposed to various risks, such as interest rate, market and credit. Due to the level of risk associated with certain investment securities and the level of uncertainty related to changes in the value of investment securities, it is at least reasonably possible that changes in risks in the near term would materially affect participants' account balances and the amounts reported in the statements of net assets available for benefits and the statements of changes in net assets available for benefits. Other: Interest and dividend income are recorded as earned on the accrual basis. Purchases and sales of investment securities are reflected on a trade-date basis. Gains and losses on sales of investment securities are determined on the average cost method. All administrative expenses are paid by the Trust except for certain employees of the J&J Savings Plan Administration Department. The expenses for the recordkeeping system used by the Plan were paid by the Company through October 1996. Beginning in November 1996, these costs are paid by the Trust. 3. Contributions: Participating employees may contribute a minimum of 3% up to a maximum of 6% pre-tax and 10% post-tax of their base salary. Pre-tax contributions may not exceed $7,000 under Puerto Rico law. The Company contributes to the Plan, out of current or accumulated profits, an amount equal to 66-2/3% of the employee's pre-tax contributions for the Plan year. Contributions are made to the Plan by participants through payroll deductions and by the Company on behalf of participants. Employee contributions are to be invested in any of the three investment funds at the direction of the participating employees. All Company contributions are made to the J&J Stock Fund, except for participants over the age of 50, who may choose the alternative investments. Continued 6 10 JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS 3. Contributions, (continued) The number of participants invested in each fund at December 31, 1996 and 1995 was:
1996 1995 ---- ---- Johnson & Johnson Stock Fund 3,109 3,009 Diversified Equity Fund 1,140 1,245 Short-term Investments Fund 1,557 1,735
Participants may elect to invest in more than one fund. A total of 3,298 and 3,260 active and former employees had investments in the Plan for 1996 and 1995, respectively. 4. Benefits: All participants are fully vested in their contributions and the company match. The benefit to which a plan participant is entitled is the amount provided by contributions (Company and participant) and investment earnings thereon (including net realized and unrealized investment gains and losses) which have been allocated to such participant's account balance. Participants are allowed to withdraw their after-tax contributions and earnings thereon, at any time. Participants may withdraw before-tax contributions only upon meeting certain hardship conditions. Continued 7 11 JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS, Continued 5. Investments held by the Plan as of December 31, 1996 and 1995 are summarized as follows:
1996 ----------------------------------------------------------------------------------------------------------- Short-Term Johnson & Johnson Investment Fund Stock Fund Equity Fund Total ------------------------ -------------------------- ------------------------ ------------------------- Fair Value Cost Fair Value Cost Fair Value Cost Fair Value Cost ---------- ---------- ------------ ------------ ---------- ----------- ------------ ----------- Common Stocks: Johnson & Johnson $36,143,972 $21,612,029 $36,143,972 $21,612,029 Mutual Funds $2,954,537 $ 2,434,576 2,954,537 2,434,576 Temporary Cash Investment $4,409,368 $ 4,409,368 2,144 2,144 4,411,512 4,411,512 ---------- ----------- ----------- ----------- ---------- ----------- ----------- ----------- $4,409,368 $ 4,409,368 $36,146,116 $21,614,173 $2,954,537 $ 2,434,576 $43,510,021 $28,458,117 ========== =========== =========== =========== ========== =========== =========== ===========
Continued 8 12 JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS, Continued 5. Investments, (continued):
1995 ----------------------------------------------------------------------------------------------------------- Short-Term Johnson & Johnson Investment Fund Stock Fund Equity Fund Total ------------------------ ------------------------- ------------------------ ------------------------- Fair Value Cost Fair Value Cost Fair Value Cost Fair Value Cost ---------- ----------- ----------- ----------- ---------- ----------- ----------- ----------- Common Stocks: Johnson & Johnson $27,664,893 $16,203,106 $27,664,893 $16,203,106 Mutual Funds $2,498,934 $ 2,143,580 2,498,934 2,143,580 Temporary Cash Investment $4,200,145 $ 4,200,145 310,768 310,768 4,510,913 4,510,913 ---------- ----------- ----------- ----------- ---------- ----------- ----------- ----------- $4,200,145 $ 4,200,145 $27,975,661 $16,513,874 $2,498,934 $ 2,143,580 $34,674,740 $22,857,599 ========== =========== =========== =========== ========== =========== =========== ===========
Realized gains, net of investments sold and distributed during the years ended December 31, 1996 and 1995 are summarized as follows:
J&J Stock Fund Equity Fund ----------------------------------------- ----------------------------------- Book Value Proceeds Gain Book Value Proceeds Gain ---------- ---------- -------------- ---------- -------- -------- 1996 $3,467,861 $5,032,192 $1,564,331 $630,900 $758,321 $127,421 1995 3,212,490 4,143,793 931,303 393,174 424,424 31,250
Continued 9 13 JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS, Continued 6. Tax Status: The Plan constitutes a qualified plan under Section 165(a) of the Puerto Rico Income Tax Act of 1954 as amended, (the "ITA"), and the Trust is exempt from Puerto Rico income taxes under Section 165(a) and 165(e) of the ITA. The Plan has been amended since receiving the determination letter. However, the Plan administrator and the Plan's tax counsel believe that the Plan is currently designed and operated in compliance with the applicable requirements of the Puerto Rico tax code. Therefore, no provision for income taxes has been included in the Plan's financial statements. 7. Termination Priorities: The Company has the right to terminate the Plan at any time and in the event the Plan is terminated, subject to conditions set forth in ERISA, the amount of each participant's account balance in the Plan is fully vested. 8. Reconciliation of Financial Statements to Form 5500: The following is a reconciliation of net assets available for benefits per the financial statements to the Form 5500:
December 31, 1996 1995 ----------- ----------- Net Assets Available for Benefits Per the Financial Statements $43,483,175 $34,632,344 Amounts Allocated to Withdrawing Participants (267,610) (346,911) ----------- ----------- Net Assets Available for Benefits Per the Form 5500 $43,215,565 $34,285,433 =========== ===========
Year Ended December 31, 1996 ------------ Benefits Paid to Participants Per the Financial Statements $5,114,490 Add: Amounts Allocated to Withdrawing Participants at December 31, 1996 267,610 Less: Amounts Allocated to Withdrawing Participants at December 31, 1995 (346,911) ---------- Benefits Paid to Participants Per the Form 5500 $5,035,189 ==========
Amounts allocated to the withdrawing participants are recorded on the Form 5500 for benefit claims that have been processed and approved for payment prior to December 31, 1996 but not yet paid as of that date. Continued 10 14 Supplemental Schedule JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AS OF DECEMBER 31, 1996
FACE AMOUNT OR SHARES ISSUES COST FAIR VALUE - ------------ -------------- ------------ ------------ J&J STOCK FUND Common Stock 726,512 shs. Johnson & Johnson $ 21,612,029 $ 36,143,972 Temporary Investments $2,144 U.S. Treasury Obligations 2,144 2,144 ------------ ------------ Total J&J Stock Fund $ 21,614,173 $ 36,146,116 ============ ============ SHORT-TERM INVESTMENT FUND Money Market funds Vanguard Money Market Reserves Prime $ 4,409,368 Portfolio $ 4,409,368 $ 4,409,368 ============ ============ EQUITY FUND Mutual Funds 121,937.149 shs. Investment Company of America $ 2,434,576 $ 2,954,537 ============ ============
Continued 11 15 Supplemental Schedule JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 1996
DISPOSED ACQUIRED ------------------------------------------------------------------ ------------------------------------- SECURITY/PARTY GAIN/ DESCRIPTION SALES COSTS PROCEEDS (LOSS) PURCHASES COSTS ----- ----- -------- ------ --------- ----- (# of Transactions) (# of Transactions) SERIES OF TRANSACTIONS: Johnson & Johnson Common Stock 129 $3,773,980 The Vanguard Group 29 $1,049,385 $1,049,385 0 62 $1,258,607
Continued 12 16 Supplemental Schedule JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN ITEM 27e - SCHEDULE OF NONEXEMPT TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 1996
PURCHASES SALES ---------------------------------- --------------------------- NAME AFFILIATION COST SALES PRICE GAIN - ---- ----------- ---- ----------- ---- Johnson & Johnson Common Stock Plan Administrator $3,409,256 $ - $ -
13 17 COOPERS & LYBRAND L.L.P. LETTERHEAD CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in the registration statements of Johnson & Johnson Retirement Savings Plan on Form S-8 (File No. 33-32875) of our report dated May 23, 1997, on our audits of the financial statements and financial statement schedules of Johnson and Johnson Savings Plan as of December 31, 1996 and 1995, and for the years ended December 31, 1996 and 1995, which report is included in the Form 11-K. COOPERS & LYBRAND L.L.P. Parsippany, New Jersey June 20, 1997 EX-28.C 4 FORM 11-K: SAVINGS PLAN FOR UNION REPRESENTED EMP. 1 Exhibit 28(c) SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 11-K ------------------------------ [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED] For the Fiscal Year Ended December 29, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] Commission File Number 1-3215 ------------------------------ JOHNSON & JOHNSON SAVINGS PLAN FOR UNION REPRESENTED EMPLOYEES (Full title of the Plan) JOHNSON & JOHNSON ONE JOHNSON & JOHNSON PLAZA NEW BRUNSWICK, NEW JERSEY 08933 (Name of issuer of the securities held pursuant to the Plan and the address of its principal executive office) 2 Item 4. Financial Statements and Exhibits Report of Independent Accountants Financial Statements: Statements of Net Assets Available for Benefits, with Fund Information as of December 31, 1996 and 1995 Statements of Changes in Net Assets Available for Benefits, with Fund Information for the years ended December 31, 1996 and 1995 Notes to Financial Statements Supplemental Schedules: Schedule of Assets Held For Investment Purposes at December 31, 1996 Schedule of Reportable Transactions for the year ended December 31, 1996 Schedule of Non exempt Transactions for the year ended December 31, 1996 Consent of Coopers & Lybrand L.L.P., dated June 20, 1997 The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have caused this annual report to be signed on its behalf by the undersigned thereunto duly authorized. JOHNSON & JOHNSON SAVINGS PLAN FOR UNION REPRESENTED EMPLOYEES By: ------------------------------------- R. Darretta Chairman, Pension Committee June 20, 1997 3 JOHNSON & JOHNSON SAVINGS PLAN FOR UNION REPRESENTED EMPLOYEES ----------- FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES as of and for the years ended December 31, 1996 and 1995 4 JOHNSON & JOHNSON SAVINGS PLAN FOR UNION REPRESENTED EMPLOYEES INDEX Report of Independent Accountants 2 Financial Statements: Statements of Net Assets Available for Benefits, with Fund Information as of December 31, 1996 and 1995 3-4 Statements of Changes in Net Assets Available for Benefits, with Fund Information for the years ended December 31, 1996 and 1995 5-6 Notes to Financial Statements 7-12 Supplemental Schedules: Item 27a - Schedule of Assets Held for Investment Purposes at December 31, 1996 13 Item 27d - Schedule of Reportable Transactions for the year ended December 31, 1996 14 Item 27e - Schedule of Nonexempt Transactions for the year ended December 31, 1996 15
1 5 REPORT OF INDEPENDENT ACCOUNTANTS To the Pension Committee of Johnson & Johnson Savings Plan We have audited the accompanying statements of net assets available for benefits, with fund information of the Johnson & Johnson Savings Plan for Union Represented Employees (the "Savings Plan") as of December 31, 1996 and 1995 and the related statements of changes in net assets available for benefits, with fund information for the years then ended. These financial statements are the responsibility of the Savings Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Johnson & Johnson Savings Plan for Union Represented Employees as of December 31, 1996 and 1995 and the changes in net assets available for benefits for the years then ended, in conformity with generally accepted accounting principles. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules as listed in the accompanying index on page 1 are presented for the purpose of additional analysis and are not a required part of the basic financial statements, but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The Fund Information in the statements of net assets available for benefits and the related statements of changes in net assets available for benefits is presented for purposes of additional analysis rather than to present the statements of net assets available for benefits and statements of changes in net assets available for benefits for each fund. The supplemental schedules and Fund Information have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. Parsippany, New Jersey May 23, 1997 2 6 JOHNSON & JOHNSON SAVINGS PLAN FOR UNION REPRESENTED EMPLOYEES STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS with FUND INFORMATION As of December 31, 1996
PARTICIPANT DIRECTED --------------------------------------------------------------------------------- Fixed J&J Diversified Total USGS Fund Interest Fund Stock Fund Equity Fund Savings Plan --------- ------------- ---------- ----------- ------------ ASSETS: Deposits in Group Annuity Contracts (Note 2) $1,308,439 $ 1,308,439 Investments at Fair Value (Notes 2 and 5) $ 7,946,372 7,946,372 Investments in Master Trust (Notes 2 and 5) $799,496 $1,946,825 2,746,321 Accrued Dividends and Interest Receivable 3,684 6,163 295 10,142 -------- ---------- ----------- ---------- ----------- Total Assets $803,180 $1,314,602 $ 7,946,667 $1,946,825 $12,011,274 -------- ---------- ----------- ---------- ----------- LIABILITIES Accrued Transfers $ 15,200 $ (37,500) $ 22,300 -------- ---------- ----------- ---------- ----------- Net Assets Available for Benefits $787,980 $1,314,602 $ 7,984,167 $1,924,525 $12,011,274 ======== ========== =========== ========== ===========
See Notes to Financial Statements 3 7 JOHNSON & JOHNSON SAVINGS PLAN FOR UNION REPRESENTED EMPLOYEES STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS with FUND INFORMATION As of December 31, 1995
PARTICIPANT DIRECTED ----------------------------------------------------------------------------- Fixed J&J Diversified Total USGS Fund Interest Fund Stock Fund Equity Fund Savings Plan --------- ------------- ---------- ----------- ------------ ASSETS: Deposits in Group Annuity Contracts (Note 2) $930,405 $ 930,405 Investments at Fair Value (Notes 2 and 5) $ 5,268,412 5,268,412 Investments in Master Trust (Notes 2 and 5) $586,316 $1,112,819 1,699,135 Accrued Dividends and Interest Receivable 2,849 5,239 196 8,284 -------- -------- ----------- ---------- ---------- Total Assets $589,165 $935,644 $ 5,268,608 $1,112,819 $7,906,236 -------- -------- ----------- ---------- ---------- LIABILITIES Accrued Transfers $ 11,400 $ 16,500 $ (46,300) $ 18,400 -------- -------- ----------- ---------- ---------- Net Assets Available for Benefits $577,765 $919,144 $ 5,314,908 $1,094,419 $7,906,236 ======== ======== =========== ========== ==========
See Notes to Financial Statements 4 8 JOHNSON & JOHNSON SAVINGS PLAN FOR UNION REPRESENTED EMPLOYEES STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS with FUND INFORMATION For The Year Ended December 31, 1996
PARTICIPANT DIRECTED ---------------------------------------------------------------------------- Fixed J&J Diversified Total USGS Fund Interest Fund Stock Fund Equity Fund Savings Plan --------- ------------- ---------- ----------- ------------ Employee Contributions (Note 3) $ 272,130 $ 494,004 $ 1,153,253 $ 629,503 $ 2,548,890 Employer Contributions (Note 3) 463,760 463,760 Interest 37,484 75,205 2,550 115,239 Dividends 103,356 27,269 130,625 --------- ----------- ----------- ----------- ------------ 309,614 569,209 1,722,919 656,772 3,258,514 Additions to (Deductions From) Net Assets: Payments to Participants (Note 4) (31,299) (56,251) (347,140) (38,215) (472,905) Change in Unrealized Net Appreciation of Investments 895,736 150,845 1,046,581 Realized Net Gain on Sale of Investments 81,000 148,204 229,204 Realized Net Gain on Stock Distributed 43,644 43,644 Assets Transferred (Note 2) (68,100) (117,500) 273,100 (87,500) --------- ----------- ----------- ----------- ------------ $ 210,215 $ 395,458 $ 2,669,259 $ 830,106 $ 4,105,038 Net Assets, Beginning of Period 577,765 919,144 5,314,908 1,094,419 7,906,236 --------- ----------- ----------- ----------- ------------ Net Assets, End of Period $ 787,980 $ 1,314,602 $ 7,984,167 $ 1,924,525 $ 12,011,274 ========= =========== =========== =========== ============
See Notes to Financial Statements 5 9 JOHNSON & JOHNSON SAVINGS PLAN FOR UNION REPRESENTED EMPLOYEES STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS with FUND INFORMATION For The Year Ended December 31, 1995
PARTICIPANT DIRECTED ----------------------------------------------------------------------------- Fixed J&J Diversified Total USGS Fund Interest Fund Stock Fund Equity Fund Savings Plan --------- ------------- ---------- ----------- ------------ Employee Contributions (Note 3) $ 341,742 $ 576,177 $ 992,854 $ 576,207 $ 2,486,980 Employer Contributions (Note 3) 452,099 452,099 Interest 26,729 46,209 2,611 75,549 Dividends 64,210 16,446 80,656 --------- ----------- ----------- ----------- ----------- 368,471 622,386 1,511,774 592,653 3,095,284 Additions to (Deductions From) Net Assets: Payments to Participants (Note 4) (15,901) (31,517) (137,445) (13,226) (198,089) Change in Unrealized Net Appreciation of Investments 1,528,964 141,859 1,670,823 Realized Net Gain on Sale of Investments 35,408 72,971 108,379 Realized Net Gain on Stock Distributed 3,345 3,345 Assets Transferred (Note 2) (84,100) (118,200) 305,900 (103,600) --------- ----------- ----------- ----------- ----------- $ 268,470 $ 472,669 $ 3,247,946 $ 690,657 $ 4,679,742 Net Assets, Beginning of Period 309,295 446,475 2,066,962 403,762 3,226,494 --------- ----------- ----------- ----------- ----------- Net Assets, End of Period $ 577,765 $ 919,144 $ 5,314,908 $ 1,094,419 $ 7,906,236 ========= =========== =========== =========== ===========
See Notes to Financial Statements 6 10 JOHNSON & JOHNSON SAVINGS PLAN FOR UNION REPRESENTED EMPLOYEES NOTES TO FINANCIAL STATEMENTS 1. Organization: The Johnson & Johnson Savings Plan for Union Represented Employees (the "Plan" - a defined contribution plan) was established on January 1, 1993. The Plan was designed to enhance the existing retirement program of eligible employees. The funding of the Plan is made through employee and Company contributions. The assets of the Plan are maintained and transactions therein are executed by the trustee, Bankers Trust Company. 2. Summary of Significant Accounting Policies: Valuation of Investments: Equity investments in the Johnson & Johnson Stock Fund, administered by the Bankers Trust Company, are valued at the average of the high and low market price on the last business day of the year. The cost of equity investments in the Johnson & Johnson Stock Fund are recorded at the average market price of the stock transactions for the month during which the contribution is made. The investments in the U.S. Government Securities, Fixed Interest and Diversified Equity funds represent the Plan's share of assets in the Savings Plan Trust. The U.S. Government Securities Fund consists of Short-term obligations that are issued or guaranteed by the U.S. Government. Investments are valued at cost which approximates market. Deposits in group annuity contracts in the Fixed Interest Fund are recorded at their contract value, which approximates fair value because these investments have fully benefit-responsive features. Contract value represents contributions and reinvested income, less any withdrawals plus accrued interest. Participants may direct the withdrawal or transfer of all or a portion of their investment at contract value. However, withdrawals influenced by employer initiated events, such as in connection with the sale of a business, may result in a distribution at other than contract value. There are no reserves against contract values for credit risk of contract issuers or otherwise. The average yield and crediting interest rate of the Fixed Income Fund was 7.09 percent for 1996 and 7.25 percent for 1995. The crediting interest rate for the investment contracts is either agreed-to in advance with the issuer or varies based on an agreed-to formula, but cannot be less than zero. Equity investments and corporate obligations in the Diversified Equity Fund, managed by the Capital Guardian Trust Company, are traded on a national securities exchange and are valued at the last reported market sales price on the last business day of the year. Investments in the Diversified Equity Fund are purchased periodically by the Capital Guardian Trust Company based on the prevailing market values of the underlying investments. Temporary cash investments are stated at redemption value which approximates fair value. Continued 7 11 JOHNSON & JOHNSON SAVINGS PLAN FOR UNION REPRESENTED EMPLOYEES NOTES TO FINANCIAL STATEMENTS, Continued 2. Summary of Significant Accounting Policies, (Continued): Transfers: Transfers among funds, which are made at the participant's election, have been presented as assets transferred. Use of Estimates: The preparation of the Plan's financial statements in conformity with generally accepted accounting principles requires the plan administrator to make estimates and assumptions that affect the reported amounts of net assets available for benefits at the date of the financial statements and the changes in net assets available for benefits during the reporting period and, when applicable, disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates. Risks and Uncertainties: The Plan provides for various participant investment options in funds which can invest in any combination of stocks, bonds, fixed income securities, mutual funds, and other investment securities. Investment securities are exposed to various risks, such as interest rate, market and credit. Due to the level of risk associated with certain investment securities and the level of uncertainty related to changes in the value of investment securities, it is at least reasonably possible that changes in risks in the near term would materially affect participants' account balances and the amounts reported in the statements of net assets available for benefits and the statements of changes in net assets available for benefits. Other: Interest and dividend income is recorded as earned on the accrual basis. Purchases and sales of investment securities are reflected on a trade-date basis. Gains and losses on sales of investment securities are determined on the average cost method. All administrative expenses are paid by the Company. 3. Contributions: Participating employees may contribute a minimum of $0.16 per hour up to a maximum of $0.80 per hour up to the first forty hours worked in each payroll week. All contributions are on a pre-tax basis. Pre-tax contributions may not exceed $9,500 and $9,240 for 1996 and 1995, respectively. The Company contributes to the Plan, out of current or accumulated profits, an amount equal to 25% of the employee directed contributions on the first $0.40 per hour. Continued 8 12 JOHNSON & JOHNSON SAVINGS PLAN FOR UNION REPRESENTED EMPLOYEES NOTES TO FINANCIAL STATEMENTS, Continued 3. Contributions (continued): Contributions are made to the Plan by participants through payroll deductions and by the Company on behalf of participants. Employee contributions are to be invested in any of the four investment funds at the direction of the participating employees. All Company contributions are made to the J&J Stock Fund. The number of participants invested in each fund at December 31, 1996 and 1995 was:
1996 1995 ---- ---- U.S. Government Securities Fund 601 609 Fixed Interest Fund 820 825 Johnson & Johnson Stock Fund 1,569 1,410 Diversified Equity Fund 977 890
Participants may elect to invest in more than one fund. A total of 2,048 and 1,987 active and former employees had investments in the Plan for 1996 and 1995, respectively. 4. Benefits: All participants are fully vested in their contributions and the company match. The benefit to which a Plan participant is entitled is the amount provided by contributions (Company and participant) and investment earnings thereon (including net realized and unrealized investment gains and losses) which have been allocated to such participant's account balance. Participants are allowed to withdraw their after-tax contributions and earnings thereon, at any time. Participants may withdraw before-tax contributions only upon meeting certain hardship conditions. 5. Investments: Investments held by the plan as of December 31, 1996 are summarized as follows:
Johnson & Johnson Stock Fund ------------------------------ Fair Value Cost ------------ ------------ Common Stocks: Johnson & Johnson $7,946,360 $5,101,062 Temporary Cash Investments 12 12 ---------- ---------- $7,946,372 $5,101,074 ========== ==========
Continued 9 13 JOHNSON & JOHNSON SAVINGS PLAN FOR UNION REPRESENTED EMPLOYEES NOTES TO FINANCIAL STATEMENTS, Continued 5. Investments, (Continued): The investments in the U.S. Government Securities, Fixed Interest, and the Diversified Equity Funds reflected in the accompanying Statement of Net Assets Available for Benefits represent the Plan's share of investments (approximately 0.4% of fair value) held by the Johnson & Johnson Savings Plan Trust. Total investments held by the Trust on behalf of the Plan and the Johnson & Johnson Savings Plan are summarized as follows:
Description Fair Value Cost ----------- -------------- ------------ USGS Fund: U.S. Government Securities - Short Term $ 18,055,692 $ 18,055,692 Other* 84,130 84,130 Fixed Interest Fund: Deposits in Group Annuity Contracts 612,131,658 612,131,658 Other* 2,857,861 2,857,861 Diversified Equity Fund: Common Stocks 369,796,552 269,727,282 Other* 623,223 623,223 -------------- ------------ $1,003,549,116 $903,479,846 ============== ============
* Other consists of interest and/or dividends receivable. Investments held by the plan as of December 31, 1995 are summarized as follows:
Johnson & Johnson Stock Fund ------------------------- Fair Value Cost ---------- ---------- Common Stocks: Johnson & Johnson $5,257,076 $3,307,515 Temporary Cash Investments 11,336 11,336 ---------- ---------- $5,268,412 $3,318,851 ========== ==========
Continued 10 14 JOHNSON & JOHNSON SAVINGS PLAN FOR UNION REPRESENTED EMPLOYEES NOTES TO FINANCIAL STATEMENTS , Continued 5. Investments, (continued): The investments in the U.S. Government Securities, Fixed Interest, and the Diversified Equity Funds reflected in the accompanying Statement of Net Assets Available for Benefits represent the Plan's share of investments (approximately 0.3% of fair value) held by the Johnson & Johnson Savings Plan Trust. Total investments held by the Trust on behalf of the Plan and the Johnson & Johnson Savings Plan are summarized as follows:
Description Fair Value Cost ----------- ------------ ------------ USGS Fund: U.S. Government Securities - Short Term $ 10,697,248 $ 10,697,248 Other* 52,086 52,086 Fixed Interest Fund: Deposits in Group Annuity Contracts 608,271,081 608,271,081 Other* 3,486,745 3,486,745 Diversified Equity Fund: Common Stocks 277,019,865 208,082,469 Other* 490,758 490,758 ------------ ------------ $900,017,783 $831,080,387 ============ ============
* Other consists of interest and/or dividends receivable. Realized gains on investments sold and distributed during the year are summarized as follows:
J&J Stock Fund Diversified Equity Fund ------------------------------------------------ ----------------------------------------- Book Value Proceeds Gain Book Value Proceeds Gain ---------- ---------- -------- ---------- ---------- --------- 1996 $162,873 $287,517 $124,644 $963,658 $1,111,862 $148,204 1995 91,741 130,494 38,753 468,575 541,546 72,971
6. Tax Status: The Internal Revenue Service has determined and informed the Company by a letter dated April 19, 1993, that the Plan and related trust are designed in accordance with applicable sections of the Internal Revenue Code (IRC). The Plan has been amended since receiving the determination letter. However, the Plan administrator believes that the Plan is designed and is currently being operated in compliance with applicable requirements of the IRC. Continued 11 15 JOHNSON & JOHNSON SAVINGS PLAN FOR UNION REPRESENTED EMPLOYEES NOTES TO FINANCIAL STATEMENTS, Continued 7. Termination Priorities: The Company has the right to terminate the Plan at any time and in the event the Plan is terminated subject to conditions set forth in ERISA, the amount of each participant's account balance in the Plan is fully vested. 8. Concentrations of Credit Risk Financial instruments which potentially subject the Plan to concentrations of credit risk consist principally of the Fixed Interest Fund holdings in fully benefit-responsive group annuity contracts with insurance and other financial institutions. The Fund places its fully benefit-responsive group annuity contracts with high-credit quality institutions and, by policy, limits the amount of credit exposure to any one financial institution. If any of the insurance companies that the group annuity contracts are invested with fail to perform according to the contract, the asset value of the Plan could be impaired. 9. Reconciliation of Financial Statements to Form 5500: The following is a reconciliation of net assets available for benefits per the financial statements to the Form 5500:
December 31, 1996 ----------- Net Assets Available for Benefits Per the Financial Statements $12,011,274 Amounts Allocated to Withdrawing Participants (39,613) ----------- Net Assets Available for Benefits Per the Form 5500 $11,971,661 ===========
Year Ended December 31, 1996 ----------- Benefits Paid to Participants Per the Financial Statements $472,905 Add: Amounts Allocated to Withdrawing Participants at December 31, 1996 39,613 Less: Amounts Allocated to Withdrawing Participants at December 31, 1995 (23,713) -------- Benefits Paid to Participants Per the Form 5500 $488,805 ========
Amounts allocated to the withdrawing participants are recorded on the Form 5500 for benefit claims that have been processed and approved for payment prior to December 31, 1996 but not yet paid as of that date. Continued 12 16 Supplemental Schedule JOHNSON & JOHNSON SAVINGS PLAN FOR UNION REPRESENTED EMPLOYEES ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AS OF DECEMBER 31, 1996
FACE AMOUNT OR SHARES ISSUES COST FAIR VALUE - ------------ ------ ---------- ---------- J&J STOCK FUND Common Stock 157,254 shs. Johnson & Johnson $5,101,062 $7,946,360 Temporary Investments $12 BT Pyramid Directed Account Cash Fund 12 12 ---------- ---------- Total J&J Stock Fund $5,101,074 $7,946,372 ========== ==========
Continued 13 17 Supplemental Schedule JOHNSON & JOHNSON SAVINGS PLAN FOR UNION REPRESENTED EMPLOYEES ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 1996
DISPOSED ACQUIRED ------------------------------------------------------------- ----------------------------------- SECURITY/PARTY GAIN/ DESCRIPTION SALES COSTS PROCEEDS (LOSS) PURCHASES COSTS ----- ----- -------- ----- --------- ----- # of Transactions # of Transactions SERIES OF TRANSACTIONS: BT Pyramid Directed Account-Cash Fund (a) $1,478,536 $1,478,536 0 (a) $1,497,850 Johnson & Johnson Common Stock 152 $1,767,062
(a) Custodian is unable to provide detailed information on the number of transactions. Continued 14 18 Supplemental Schedule JOHNSON & JOHNSON SAVINGS PLAN FOR UNION REPRESENTED EMPLOYEES ITEM 27e - SCHEDULE OF NONEXEMPT TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 1996
PURCHASES SALES -------------------------------------- ----------------------------- NAME AFFILIATION COST SALES PRICE GAIN - ---- ----------- ---- ----------- ---- Johnson & Johnson Common Stock Plan Administrator $1,767,062 $ - $ -
15 19 COOPERS & LYBRAND L.L.P. LETTERHEAD CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in the registration statements of Johnson & Johnson Savings Plan for Union Represented Employees on Form S-8 (File No. 33-52252) of our report dated May 23, 1997, on our audits of the financial statements and financial statement schedules of Johnson and Johnson Savings Plan as of December 31, 1996 and 1995, and for the years ended December 31, 1996 and 1995, which report is included in the Form 11-K. COOPERS & LYBRAND L.L.P. Parsippany, New Jersey June 20, 1997 -----END PRIVACY-ENHANCED MESSAGE-----