<PAGE> 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 January 3, 1999 Commission file number 1-3215
JOHNSON & JOHNSON
(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 [ ]
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 [ ]
The aggregate market value of the voting stock held by
non-affiliates of the registrant on February 23, 1999 was approximately
$117.2 billion.
On February 23, 1999 there were 1,345,589,883 shares of Common
Stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Parts I and II: Portions of registrant's annual report to
shareowners for fiscal year 1998.
Part III: Portions of registrant's proxy statement for its
1999 annual meeting of shareowners.
<PAGE> 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 22, 1999 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 signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ R. S. Larsen Chairman, Board of Directors and
- -------------------------- Chief Executive Officer, and Director
R. S. Larsen (Principal Executive Officer) June 22, 1999
/s/ R. J. Darretta Vice President-Finance
- -------------------------- (Principal Financial Officer) June 22, 1999
R. J. Darretta
/s/ C. E. Lockett Controller June 23, 1999
- --------------------------
C. E. Lockett
/s/ G. N. Burrow Director June 22, 1999
- --------------------------
G. N. Burrow
/s/ J. G. Cooney Director June 22, 1999
- --------------------------
J. G. Cooney
/s/ J. G. Cullen Director June 28, 1999
- --------------------------
J. G. Cullen
Director June , 1999
- --------------------------
M. J. Folkman
</TABLE>
1
<PAGE> 3
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
Director June , 1999
- --------------------------
A. D. Jordan
/s/ A. G. Langbo Director June 21, 1999
- --------------------------
A. G. Langbo
/s/ J. S. Mayo Director June 22, 1999
- --------------------------
J. S. Mayo
/s/ P. J. Rizzo Director June 23, 1999
- --------------------------
P. J. Rizzo
/s/ H. B. Schacht Director June 21, 1999
- --------------------------
H. B. Schacht
/s/ M. F. Singer Director June 21, 1999
- --------------------------
M. F. Singer
/s/ J. W. Snow Director June 21, 1999
- --------------------------
J. W. Snow
/s/ R. N. Wilson Vice Chairman, June 22, 1999
- -------------------------- Board of Directors and Director
R. N. Wilson
</TABLE>
2
<PAGE> 4
EXHIBIT INDEX
<TABLE>
<CAPTION>
Reg. S-K
Exhibit Table Description
Item No. of Exhibit
- ------------- -----------
<S> <C>
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
--Incorporated herein by reference to Exhibit 3(a)(iii)
of the Registrant's Form 10-K Annual Report for the year
ended December 29, 1996.
3(b) By-Laws of the Company, as amended and in effect on
January 3, 1999 - Incorporated herein by reference to
Exhibit 3(b) of the Registrant's Form 10-K Annual Report
for the year ended December 28, 1997.
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 --
Incorporated herein by reference to Exhibit 10(a) of
the Registrant's Form 10-K Annual Report for the year
ended December 29, 1996.*
10(b) 1995 Stock Option Plan (as amended) -- (1).*
10(c) 1991 Stock Option Plan (as amended) -- Incorporated
herein by reference to Exhibit 10(c) of the
Registrant's Form 10-K Annual Report for the year
ended December 28, 1997.*
10(d) 1986 Stock Option Plan (as amended) -- Incorporated
herein by reference to Exhibit 10(d) of the
Registrant's Form 10-K Annual Report for the year
ended December 28, 1997.*
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 -- Incorporated herein by
reference to Exhibit 10(f) of the Registrant's Form
10-K Annual Report for the year ended December 29,
1996.*
10(g) Domestic Deferred Compensation Plan (as amended) --
Incorporated herein by reference to Exhibit 10(g) of
the Registrant's Form 10-K Annual Report for the year
ended December 29, 1996.*
10(h) Deferred Fee Plan for Directors (as amended) --
Incorporated herein by reference to Exhibit 10(h) of the
Registrant's Form 10-K Annual Report for the year ended
December 29, 1996.*
10(i) Executive Income Deferral Plan - Incorporated herein
by reference to Exhibit 10(i) of the Registrant's
Form 10-K Annual Report for the year ended December
28, 1997.*
10(j) Excess Savings Plan -- Incorporated herein by
reference to Exhibit 10(j) of the Registrant's Form
10-K Annual Report for the year ended December 29,
1996.*
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.*
</TABLE>
3
<PAGE> 5
<TABLE>
<S> <C>
12 -- Statement of Computation of Ratio of Earnings to
Fixed Charges -- (1).
13 -- Pages 24-46 of the Company's Annual Report to
Shareowners for fiscal year 1998 (only those portions
of the Annual Report incorporated by reference in
this document are deemed "filed") - (1).
21 -- Subsidiaries -- (1).
23 -- Consent of Independent Auditors - (1).
27 -- Financial Data Schedule for Year Ended January 3,
1999 - (1).
99(a)(i) -- Form 11-K for the Johnson & Johnson Savings Plan
-- Filed with this document.
99(a)(ii) -- Form 11-K for the Johnson & Johnson Retirement
Savings Plan -- Filed with this document.
99(a)(iii) -- Form 11-K for the Johnson & Johnson Savings Plan
for Union Represented Employees -- Filed with this
document.
99(b) -- Cautionary Statement pursuant to Private
Securities Litigation Reform Act of 1995: "Safe
Harbor" for Forward-Looking Statements -- (1).
</TABLE>
(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 January
3, 1999.
* 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 shareowner submitting a written request specifying the
desired Exhibit(s) to the Secretary at the principal executive offices of the
Company.
4
<PAGE> 1
Exhibit 99(a)(i)
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 January 3, 1999
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)
<PAGE> 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, 1998 and 1997
Statements of Changes in Net Assets Available for Benefits, with
Fund Information for the years ended December 31, 1998 and 1997
Notes to Financial Statements
Supplemental Schedules:
Item 27a - Schedule of Assets Held For Investment Purposes
at December 31, 1998
Item 27d - Schedule of Reportable Transactions for
the year ended December 31, 1998
Item 27e - Schedule of Non-Exempt Transactions for
the year ended December 31, 1998
Consent of PricewaterhouseCoopers LLP, dated June 24, 1999
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 duly caused this annual report to be signed on its behalf by
the undersigned hereunto duly authorized.
JOHNSON & JOHNSON SAVINGS PLAN
By: /s/ R.J. Darretta
-------------------------------
R. J. Darretta
Chairman, Pension Committee
June 25, 1999
<PAGE> 3
JOHNSON & JOHNSON SAVINGS PLAN
------------------
FINANCIAL STATEMENTS AND
SUPPLEMENTAL SCHEDULES
AS OF AND FOR THE YEARS ENDED
DECEMBER 31, 1998 AND 1997
<PAGE> 4
JOHNSON & JOHNSON SAVINGS PLAN
INDEX
<TABLE>
<S> <C>
Report of Independent Accountants 2
Financial Statements:
Statements of Net Assets Available for Benefits, with
Fund Information as of December 31, 1998 and 1997 3-4
Statements of Changes in Net Assets Available for
Benefits, with Fund Information for the years ended
December 31, 1998 and 1997 5-6
Notes to Financial Statements 7-18
Supplemental Schedules:
Item 27a - Schedule of Assets Held For Investment Purposes
at December 31, 1998 19-20
Item 27d - Schedule of Reportable Transactions for
the year ended December 31, 1998 21
Item 27e - Schedule of Non-Exempt Transactions for
the year ended December 31, 1998 22
</TABLE>
1
<PAGE> 5
REPORT OF INDEPENDENT ACCOUNTANTS
To the Pension and Benefits Committees of
Johnson & Johnson
In our opinion, the accompanying statements of net assets available for benefits
and the related statements of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of the Johnson & Johnson Savings Plan (the "Plan") as of December 31, 1998 and
1997, and the changes in net assets available for benefits for the years then
ended, in conformity with generally accepted accounting principles. These
financial statements are the responsibility of the Plan's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards which 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,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets held
for investment purposes, schedule of reportable transactions, and schedule of
non-exempt transactions 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 statements of changes in net assets available for benefits is
presented for the purposes of additional analysis rather than to present the net
assets available for benefits and changes in net assets available for benefits
of each fund. These supplemental schedules and fund information are the
responsibility of the Plan's management. 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.
Florham Park, New Jersey PricewaterhouseCoopers LLP
June 11, 1999
2
<PAGE> 6
JOHNSON & JOHNSON SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS with FUND INFORMATION
As of December 31, 1998
<TABLE>
<CAPTION>
PARTICIPANT DIRECTED
----------------------------------------------------------------------------
Fixed Intermediate
USGS Fund Interest Fund Bond Fund Balanced Fund J&J Stock Fund
------------ ------------- ------------ ------------- ---------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Deposits in Group Annuity Contracts (Note 2) $632,365,945
Investments at Fair Value (Notes 2 and 6) $1,128,154,493
Investments in Master Trust (Notes 2 and 6) $ 29,463,932 $ 34,191,309 $162,347,846
Accrued Dividends and Interest Receivable 129,053 3,277,090 29,633
Due From Johnson & Johnson
Assets Designated For Transfer (Note 2)
Hardship Loans to Participants
------------ ------------ ------------ ------------ --------------
Total Assets $ 29,592,985 $635,643,035 $ 34,191,309 $162,347,846 $1,128,184,126
------------ ------------ ------------ ------------ --------------
LIABILITIES:
Accrued Expenses $ 13,803 $ 91,373 $ 4,664 $ 22,435 $ 157,680
Accrued Interest
Current Portion of Long Term Note
Long-Term Note Payable to J&J
------------ ------------ ------------ ------------ --------------
Total Liabilities $ 13,803 $ 91,373 $ 4,664 $ 22,435 $ 157,680
------------ ------------ ------------ ------------ --------------
Net Assets Available for Benefits $ 29,579,182 $635,551,662 $ 34,186,645 $162,325,411 $1,128,026,446
============ ============ ============ ============ ==============
</TABLE>
<TABLE>
<CAPTION>
PARTICIPANT
DIRECTED Employee Stock Ownership
------------ Plan Trust Fund
Diversified -------------------------- Total
Equity Fund Loan Fund Allocated Unallocated Savings Plan
------------ ----------- ------------ ------------ --------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Deposits in Group Annuity Contracts (Note 2) $ 632,365,945
Investments at Fair Value (Notes 2 and 6) $261,654,218 $222,956,246 1,612,764,957
Investments in Master Trust (Notes 2 and 6) $760,180,137 986,183,224
Accrued Dividends and Interest Receivable 4,153,061 $ 69,415 13,941 10,864 7,683,057
Due From Johnson & Johnson 6,101,554 6,101,554
Assets Designated For Transfer (Note 2) 25,503,960 (25,503,960)
Hardship Loans to Participants $ 7,082,452 7,082,452
------------ ----------- ------------ ------------ --------------
Total Assets $764,333,198 $ 7,151,867 $287,172,119 $203,564,704 $3,252,181,189
------------ ----------- ------------ ------------ --------------
LIABILITIES:
Accrued Expenses $ 390,223 $ 680,178
Accrued Interest $ 4,215,037 4,215,037
Current Portion of Long Term Note 6,955,528 6,955,528
Long-Term Note Payable to J&J 46,568,748 46,568,748
------------ ----------- ------------ ------------ --------------
Total Liabilities $ 390,223 $ $ $ 57,739,313 $ 58,419,491
------------ ----------- ------------ ------------ --------------
Net Assets Available for Benefits $763,942,975 $ 7,151,867 $287,172,119 $145,825,391 $3,193,761,698
============ =========== ============ ============ ==============
</TABLE>
See Notes to Financial Statements
3
<PAGE> 7
JOHNSON & JOHNSON SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS with FUND INFORMATION
As of December 31, 1997
<TABLE>
<CAPTION>
PARTICIPANT DIRECTED
-------------------------------------------------------------------------
Fixed Intermediate
USGS Fund Interest Fund Bond Fund Balanced Fund J&J Stock Fund
----------- ------------- ------------ ------------- --------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Deposits in Group Annuity Contracts (Note 2) $618,816,847
Investments at Fair Value (Notes 2 and 6) $863,403,779
Investments in Master Trust (Notes 2 and 6) $22,798,607 $21,239,435 $113,720,679
Accrued Dividends and Interest Receivable 109,788 2,936,334 6,689
Due from Johnson & Johnson
Assets Designated for Transfer (Note 2)
Hardship Loans to Participants
----------- ------------ ----------- ------------ ------------
Total Assets $22,908,395 $621,753,181 $21,239,435 $113,720,679 $863,410,468
----------- ------------ ----------- ------------ ------------
LIABILITIES
Accrued Expenses $ 7,554 $ 47,213 $ 1,613 $ 8,551 $ 65,789
Accrued Interest
Current Portion of Long Term Note
Long-Term Note Payable to J&J
----------- ------------ ----------- ------------ ------------
Total Liabilities $ 7,554 $ 47,213 $ 1,613 $ 8,551 $ 65,789
----------- ------------ ----------- ------------ ------------
Net Assets Available for Benefits $22,900,841 $621,705,968 $21,237,822 $113,712,128 $863,344,679
=========== ============ =========== ============ ============
</TABLE>
<TABLE>
<CAPTION>
PARTICIPANT
DIRECTED Employee Stock Ownership
------------ Plan Trust Fund
Diversified -------------------------- Total
Equity Fund Loan Fund Allocated Unallocated Savings Plan
------------ ---------- ------------ ------------ --------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Deposits in Group Annuity Contracts (Note 2) $ 618,816,847
Investments at Fair Value (Notes 2 and 6) $185,020,811 $205,169,746 1,253,594,336
Investments in Master Trust (Notes 2 and 6) $551,221,521 708,980,242
Accrued Dividends and Interest Receivable 1,149,961 $ 39,604 11,490 11,832 4,265,698
Due from Johnson & Johnson 6,993,782 6,993,782
Assets Designated for Transfer (Note 2) 22,719,748 (22,719,748)
Hardship Loans to Participants 7,285,354 7,285,354
------------ ---------- ------------ ------------ --------------
Total Assets $552,371,482 $7,324,958 $207,752,049 $189,455,612 $2,599,936,259
------------ ---------- ------------ ------------ --------------
LIABILITIES
Accrued Expenses $ 308,705 $ 439,425
Accrued Interest $ 4,739,412 4,739,412
Current Portion of Long Term Note 6,658,750 6,658,750
Long-Term Note Payable to J&J 53,524,276 53,524,276
------------ ---------- ------------ ------------ --------------
Total Liabilities $ 308,705 $ $ $ 64,922,438 $ 65,361,863
------------ ---------- ------------ ------------ --------------
Net Assets Available for Benefits $552,062,777 $7,324,958 $207,752,049 $124,533,174 $2,534,574,396
============ ========== ============ ============ ==============
</TABLE>
See Notes to Financial Statements
4
<PAGE> 8
JOHNSON & JOHNSON SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS with FUND INFORMATION
For The Year Ended December 31, 1998
<TABLE>
<CAPTION>
PARTICIPANT DIRECTED
-------------------------------------------------------------------------------
Fixed Intermediate
USGS Fund Interest Bond Fund Balanced
--------- Fund --------- Fund
----- ----
<S> <C> <C> <C> <C>
Employee Contributions (Note 3) $ 1,429,359 $ 22,174,292 $ 3,208,058 $ 15,233,773
Employer Contributions (Note 3 and 9) 432,990 6,675,429 862,892 4,085,683
Interest 1,319,347 40,422,516 1,697,138 3,091,407
Dividends
--------------- --------------- --------------- ---------------
3,181,696 69,272,237 5,768,088 22,410,863
Additions to (Deductions From) Net Assets:
UltraCision Transfer-In (7/98) (Note 1) 187,001 51,375 17,018
Clinical Diagnostics Transfer-In (10/98) 6,900,030 8,383,866 2,006,692 6,486,945
(Note 1)
Payments to Participants (Note 4) (2,835,340) (33,642,754) (928,359) (6,299,485)
Change in Unrealized Net Appreciation of
Investment (360,448) 11,684,861
Realized Net Gain on Sale of Investments 292,358 9,638,810
Interest Expense
Administrative Expenses (49,351) (438,965) (70,957) (514,817)
Assets Transferred (Note 2) (705,695) (29,780,065) 6,241,449 5,189,088
--------------- --------------- --------------- ---------------
Net Increase (Decrease) 6,678,341 13,845,694 12,948,823 48,613,283
Net Assets Available for Benefits,
Beginning of Year 22,900,841 621,705,968 21,237,822 113,712,128
--------------- --------------- --------------- ---------------
Net Assets Available for Benefits,
End of Year $ 29,579,182 $ 635,551,662 $ 34,186,645 $ 162,325,411
=============== =============== =============== ===============
</TABLE>
<TABLE>
<CAPTION>
Diversified
J&J Stock Equity Loan Fund
Fund Fund ---------
---- ----
<S> <C> <C> <C>
Employee Contributions (Note 3) $ 57,631,178 $ 44,725,916
Employer Contributions (Note 3 and 9) 15,930,284 12,299,744
Interest 123,759 $ 528,053
Dividends 12,716,300 8,829,920
--------------- --------------- ---------------
86,401,521 65,855,580 528,053
Additions to (Deductions From) Net Assets:
UltraCision Transfer-In (7/98) (Note 1) 161,539 227,676
Clinical Diagnostics Transfer-In (10/98) 7,352,413 12,457,112 59,601
(Note 1)
Payments to Participants (Note 4) (49,520,871) (23,679,257) (760,745)
Change in Unrealized Net Appreciation of
Investment 176,370,772 68,650,503
Realized Net Gain on Sale of Investments 50,950,685 64,047,658
Interest Expense
Administrative Expenses (704,201) (1,523,643)
Assets Transferred (Note 2) (6,330,091) 25,844,569
--------------- --------------- ---------------
Net Increase (Decrease) 264,681,767 211,880,198 (173,091)
Net Assets Available for Benefits,
Beginning of Year 863,344,679 552,062,777 7,324,958
--------------- --------------- ---------------
Net Assets Available for Benefits,
End of Year $ 1,128,026,446 $ 763,942,975 $ 7,151,867
=============== =============== ===============
</TABLE>
<TABLE>
<CAPTION>
Employee Stock Ownership
Plan Trust Fund
------------------------------------ Total
Allocated Unallocated Savings Plan
--------- ----------- ------------
<S> <C> <C> <C>
Employee Contributions (Note 3) $ 144,402,576
Employer Contributions (Note 3 and 9) $ 6,101,554 $ 46,388,576
Interest $ 101,758 79,368 47,363,346
Dividends 653,065 4,940,274 27,139,559
--------------- --------------- ---------------
754,823 11,121,196 265,294,057
Additions to (Deductions From) Net Assets:
UltraCision Transfer-In (7/98) (Note 1) 644,609
Clinical Diagnostics Transfer-In (10/98) 43,646,659
(Note 1)
Payments to Participants (Note 4) (7,848,364) (125,515,175)
Change in Unrealized Net Appreciation of
Investment 70,761,168 24,853,465 351,960,321
Realized Net Gain on Sale of Investments 6,421,322 131,350,833
Interest Expense (4,892,068) (4,892,068)
Administrative Expenses (3,301,934)
Assets Transferred (Note 2) 9,331,121 (9,790,376)
---------------- --------------- ---------------
Net Increase (Decrease) 79,420,070 21,292,217 659,187,302
Net Assets Available for Benefits,
Beginning of Year 207,752,049 124,533,174 2,534,574,396
----------------- --------------- ---------------
Net Assets Available for Benefits,
End of Year $ 287,172,119 $ 145,825,391 $ 3,193,761,698
================ =============== ===============
</TABLE>
See Notes to Financial Statements.
5
<PAGE> 9
JOHNSON & JOHNSON SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS with FUND INFORMATION
For The Year Ended December 31, 1997
<TABLE>
<CAPTION>
PARTICIPANT DIRECTED
---------------------------------------------------------------------------
Fixed Intermediate
USGS Fund Interest Fund Bond Fund Balanced Fund
--------- ------------- --------- -------------
<S> <C> <C> <C> <C>
Employee Contributions (Note 3) $ 1,587,946 $ 24,359,500 $ 2,923,806 $ 12,382,348
Employer Contributions (Notes 3 and 9) 441,620 7,810,225 756,321 3,424,156
Interest 1,233,400 42,326,583 1,275,752 2,815,794
Dividends
--------------- --------------- --------------- ---------------
3,262,966 74,496,308 4,955,879 18,622,298
Additions to (Deductions From) Net Assets:
Cordis Transfer-In (Note 1) 7,931,904 1,049,127 693,369 3,045,445
Menlo Care Transfer-In (Note 1) 244,487 70,076 54,188 172,298
Payments to Participants (Note 4) (3,113,513) (32,375,500) (987,355) (3,699,437)
Change in Unrealized Net Appreciation
of Investments 185,025 2,943,813
Realized Net Gain on Sale of Investments 267,240 9,774,931
Interest Expense
Administrative Expenses (21,462) (490,367) (57,967) (450,213)
Assets Transferred (Note 2) (2,738,186) (34,646,485) (609,721) 6,811,915
--------------- --------------- --------------- ---------------
Net Increase 5,566,196 8,103,159 4,500,658 37,221,050
Net Assets Available for Benefits,
Beginning of Year 17,334,645 613,602,809 16,737,164 76,491,078
--------------- --------------- --------------- ---------------
Net Assets Available for Benefits,
End of Year $ 22,900,841 $ 621,705,968 $ 21,237,822 $ 113,712,128
=============== =============== =============== ===============
</TABLE>
<TABLE>
<CAPTION>
Diversified
J&J Stock Fund Equity Fund Loan Fund
-------------- ----------- ---------
<S> <C> <C> <C>
Employee Contributions (Note 3) $ 49,870,192 $ 32,332,066
Employer Contributions (Notes 3 and 9) 14,560,769 9,354,640
Interest 95,494 $ 721,709
Dividends 10,720,471 6,903,774
--------------- --------------- ---------------
75,246,926 48,590,480 721,709
Additions to (Deductions From) Net Assets:
Cordis Transfer-In (Note 1) 12,418,643 9,267,835 2,435,281
Menlo Care Transfer-In (Note 1) 180,472 196,912 806
Payments to Participants (Note 4) (35,963,105) (17,964,449) (1,096,345)
Change in Unrealized Net Appreciation
of Investments 172,408,761 47,183,005
Realized Net Gain on Sale of Investments 27,728,168 71,310,358
Interest Expense
Administrative Expenses (553,079) (1,344,646)
Assets Transferred (Note 2) 4,749,100 26,593,560
--------------- --------------- ---------------
Net Increase 256,215,886 183,833,055 2,061,451
Net Assets Available for Benefits,
Beginning of Year 607,128,793 368,229,722 5,263,507
--------------- --------------- ---------------
Net Assets Available for Benefits,
End of Year $ 863,344,679 $ 552,062,777 $ 7,324,958
=============== =============== ===============
</TABLE>
<TABLE>
<CAPTION>
Employee Stock Ownership
Plan Trust Fund
------------------------------- Total
Allocated Unallocated Savings Plan
--------- ----------- ------------
<S> <C> <C> <C>
Employee Contributions (Note 3) $ 123,455,858
Employer Contributions (Notes 3 and 9) $ 6,993,782 43,341,513
Interest $ 77,543 85,759 48,632,034
Dividends 587,252 4,407,672 22,619,169
------------ ------------- ---------------
664,795 11,487,213 238,048,574
Additions to (Deductions From) Net Assets:
Cordis Transfer-In (Note 1) 36,841,604
Menlo Care Transfer-In (Note 1) 919,239
Payments to Participants (Note 4) (5,596,151) (100,795,855)
Change in Unrealized Net Appreciation
of Investments 54,780,550 32,129,331 309,630,485
Realized Net Gain on Sale of Investments 4,148,349 113,229,046
Interest Expense (5,488,436) (5,488,436)
Administrative Expenses (2,917,734)
Assets Transferred (Note 2) 11,814,141 (11,974,324)
------------ ------------- ---------------
Net Increase 65,811,684 26,153,784 589,466,923
Net Assets Available for Benefits,
Beginning of Year 141,940,365 98,379,390 1,945,107,473
------------ ------------- ---------------
Net Assets Available for Benefits,
End of Year $207,752,049 $ 124,533,174 $ 2,534,574,396
============ ============= ===============
</TABLE>
See Notes to Financial Statements
6
<PAGE> 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 ("J&J" or "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 in two Master Trust accounts
("Johnson & Johnson Savings Plan Trust" and "Johnson & Johnson Pension
Trust Fund") and transactions therein are executed by the trustee,
Bankers Trust Company. The Johnson & Johnson Savings Plan Trust and the
Johnson & Johnson Pension Trust Fund are allocated based upon the total
of each individual participant's share of the Johnson & Johnson Savings
Plan Trust and the Johnson & Johnson Pension Trust Fund.
Effective January 1, 1991, the Company implemented a Leveraged 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 1,554,800 shares of
J&J common stock on the open market (which equates to 6,219,200 shares
when adjusted for subsequent stock splits). Of these shares, 2,631,026
(adjusted for stock splits) remain unallocated. These shares are
allocated to Plan participants under a formula set forth in the note
agreement relating to the advance from J&J. Accordingly, the financial
statements of the Plan for the years 1998 and 1997 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. The Company is entitled to
exercise voting rights attributable to unallocated shares.
7
<PAGE> 11
JOHNSON & JOHNSON SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
1. Organization, (Continued):
In the third quarter of 1998, Johnson & Johnson incorporated a
"dividend pass-through" feature into the Plan. This feature allows a
participant to receive cash for dividends paid on certain shares owned
through the plan. To receive a dividend pass-through, it is contingent
on the ownership of shares in the Johnson & Johnson Stock Fund; it does
not apply to any share owned in Employee Stock Ownership Plan Trust
Fund. In order to receive dividend pass-through amounts, participant
eligibility is based on the lesser of (a) 20% of the eligible
compensation (annual base pay rate for the year plus 50% of prior
calendar year commissions) or (b) IRS Pre-tax compensation limit
($10,000 in 1998) reduced by the estimated pre-tax contribution for the
year (current pre-tax percentage times the eligible compensation for
the year). For the 1998 plan year, the dividend pass-through amount
recorded in the Plan statement of changes in net assets available for
benefits as dividend income and payments to participants was
$4,259,619.
On October 1, 1998 and December 1, 1998, the assets of Clinical
Diagnostics 401(k) Retirement Plan were transferred into the Johnson &
Johnson Savings Plan; and on July 1, 1998, the assets of the
UltraCision 401(k) Retirement Plan were transferred into the Johnson &
Johnson Savings Plan. On April 2, 1997 and October 1, 1997, the assets
of the Cordis Corp. Tax Sheltered Investment Plan and the Menlo Care
401(k) Retirement Plan, respectively, 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.
The investments in the U.S. Government Securities ("USGS"), Fixed
Interest, and Diversified Equity funds represent the Plan's share of
assets in the Johnson & Johnson Savings Plan Trust ("Savings Plan
Trust"). The USGS 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
8
<PAGE> 12
JOHNSON & JOHNSON SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
2. Summary of Significant Accounting Policies (Continued):
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 Interest Fund was approximately 6.71
percent for 1998 and 7.09 percent for 1997. The crediting interest rate
of the Fixed Interest Fund was approximately 6.77 percent for 1998 and
7.33 percent for 1997. The difference between the average yield and
crediting interest rate is due to administrative charges paid by the
Plan. 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 Capital Guardian Trust Company and J.P. Morgan
Investment Management, Inc., 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 Capital Guardian Trust Company and
J.P. Morgan Investment Management, Inc. 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 ("Pension Trust Fund"). These investments are stated
at fair value. 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.
Participant loans are valued at cost, which approximates fair value.
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.
9
<PAGE> 13
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. Administrative charges are
allocated monthly bases on the quarterly percentage of assets in each
of the six investment funds.
All third party administrative expenses are paid by the Plan, except
cost of entering new investment vehicles which are paid primarily by
Johnson & Johnson.
Certain reclassifications have been made to the 1997 Plan financial
statements to conform to the 1998 presentation.
10
<PAGE> 14
JOHNSON & JOHNSON SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
3. Contributions:
Participating employees may contribute a minimum of 3% up to a maximum
of 20% of their base salary plus 50 percent of eligible commissions in
combinations of pre-and post-tax contributions. Pre-tax contributions
may not exceed the smaller of 20% of their base salary including 50
percent of eligible commissions or $10,000 in 1998 and 16% of their
base salary including 50 percent of eligible commissions or $9,500 in
1997. 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 and 50 percent of eligible
commissions.
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 unallocated
portion of the ESOP each February following the payment of the loan
(see note 9), in accordance with the ESOP Trust Agreement. Shares
released, in accordance with the ESOP 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, 1998
and 1997 was:
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
U.S. Government Securities Fund 3,063 2,600
Fixed Interest Fund 17,580 18,321
Intermediate Bond Fund 4,091 3,404
Balanced Fund 10,327 8,729
Johnson & Johnson Stock Fund 27,360 24,368
Employee Stock Ownership Plan 33,713 31,759
Diversified Equity Fund 22,180 18,895
</TABLE>
Participants may elect to invest in more than one fund and can change
investment direction once every three months. A total of 36,704 and
35,136 active and former employees had investments in the Plan for 1998
and 1997, respectively.
11
<PAGE> 15
JOHNSON & JOHNSON SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
4. Participant Accounts and 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. Allocations are based on participant
earnings or account balance, as defined.
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 account balance
or $50,000, whichever is less. Loans bear a market rate of interest
plus 1% and are repayable within five years. Loans are secured by the
balance in the participant accounts.
12
<PAGE> 16
JOHNSON & JOHNSON SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
6. Investments:
Investments held by the Plan as of December 31, 1998 are summarized as
follows:
<TABLE>
<CAPTION>
Johnson & Johnson Employee Stock Ownership
Stock Fund Plan Trust Fund Combined
------------------------------- ------------------------------- -------------------------------
Fair Value Cost Fair Value Cost Fair Value Cost
---------- ---- ---------- ---- ---------- ----
<S> <C> <C> <C> <C> <C> <C>
Johnson & Johnson Common Stock $1,123,468,342 $ 469,850,905 $ 478,730,076 $ 91,946,210 $1,602,198,418 $ 561,797,115
Temporary Cash Investments 4,686,151 4,686,151 5,880,388 5,880,388 10,566,539 10,566,539
-------------- -------------- -------------- -------------- -------------- --------------
$1,128,154,493 $ 474,537,056 $ 484,610,464 $ 97,826,598 $1,612,764,957 $ 572,363,654
============== ============== ============== ============== ============== ==============
</TABLE>
The investments in the U.S.G.S., 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 99.5% of fair value) held by the Johnson & Johnson
Savings Plan Trust. Total investments held by the Savings Plan Trust on
behalf of the Plan and the Johnson & Johnson Savings Plan for Union
Represented Employees are summarized as follows:
<TABLE>
<CAPTION>
Description Fair Value Cost
----------- ---------- ----
<S> <C> <C>
USGS Fund:
U.S. Government Securities - Short Term $ 30,466,695 $ 30,466,695
Other* 138,992 138,992
Fixed Interest Fund:
Deposits in Group Annuity Contracts 634,215,282 634,215,282
Other* 3,286,951 3,286,951
Diversified Equity Fund:
Common Stocks 764,674,566 548,124,829
Other* 4,178,130 4,178,130
-------------- ---------------
$1,436,960,616 $ 1,220,410,879
============== ===============
</TABLE>
*Other consists of interest and/or dividends receivable.
13
<PAGE> 17
JOHNSON & JOHNSON SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
6. Investments, (continued):
As of December 31, 1998, 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 6.5% of fair value) held by the Johnson & Johnson
Pension Trust Fund. Total investments held by the Pension Trust Fund on
behalf of the Plan and the various Johnson & Johnson Pension Plans are
summarized as follows:
<TABLE>
<CAPTION>
Description Fair Value Cost
----------- ---------- ----
<S> <C> <C>
U.S. Government Securities - Short Term $ 88,842,142 $ 86,445,403
Corporate Bonds & Notes - Short Term 120,087,554 120,447,976
U.S. Government Securities - Long Term 109,212,710 108,202,456
Corporate Bonds & Notes - Long Term 118,451,198 124,404,110
Common Stocks:
Johnson & Johnson 420,817,650 26,353,605
Other 1,792,008,039 1,423,899,173
Preferred Stocks 30,757,224 26,973,063
Commingled Investment Funds 204,839,027 195,837,097
Temporary Investments 82,892,180 83,127,335
Other 42,063,434 41,991,873
-------------- --------------
$3,009,971,158 $2,237,682,091
============== ==============
</TABLE>
Investments held by the Plan as of December 31, 1997 are summarized as
follows:
<TABLE>
<CAPTION>
Johnson & Johnson Employee Stock Ownership
Stock Fund Plan Trust Fund Combined
------------------------------- ------------------------------- -------------------------------
Fair Value Cost Fair Value Cost Fair Value Cost
---------- ---- ---------- ----- ---------- ----
<S> <C> <C> <C> <C> <C> <C>
Johnson & Johnson Common Stock $ 863,403,725 $ 406,920,306 $ 384,941,911 $ 93,741,626 $1,248,345,636 $ 500,661,932
Temporary Cash Investments 54 54 5,248,646 5,248,646 5,248,700 5,248,700
-------------- -------------- -------------- -------------- -------------- --------------
$ 863,403,779 $ 406,920,360 $ 390,190,557 $ 98,990,272 $1,253,594,336 $ 505,910,632
============== ============== ============== ============== ============== ==============
</TABLE>
14
<PAGE> 18
JOHNSON & JOHNSON SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
6. Investments (continued):
As of December 31, 1997, the investments in the U.S.G.S., 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 Savings Plan Trust on behalf of
the Plan and the Johnson & Johnson Savings Plan for Union Represented
Employees are summarized as follows:
<TABLE>
<CAPTION>
Description Fair Value Cost
----------- ---------- ----
<S> <C> <C>
USGS Fund:
U.S. Government Securities - Short Term $ 23,731,721 $ 23,731,721
Other* 114,306 114,306
Fixed Interest Fund:
Deposits in Group Annuity Contracts 620,414,165 620,414,165
Other* 2,943,913 2,943,913
Diversified Equity Fund:
Common Stocks 554,290,739 406,787,164
Other* 1,156,321 1,156,321
-------------- --------------
$1,202,651,165 $1,055,147,590
============== ==============
</TABLE>
* Other consists of interest and/or dividends receivable.
As of December 31, 1997, 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 Pension Trust Fund on
behalf of the Plan and the various Johnson & Johnson Pension Plans are
summarized as follows:
<TABLE>
<CAPTION>
Description Fair Value Cost
----------- ---------- ----
<S> <C> <C>
U.S. Government Securities - Short Term $ 153,543,208 $ 151,120,429
Corporate Bonds & Notes - Short Term 123,628,255 120,714,183
U.S. Government Securities - Long Term 50,059,407 48,244,801
Corporate Bonds & Notes - Long Term 95,958,893 93,166,648
Common Stocks:
Johnson & Johnson 354,881,800 28,297,086
Other 1,513,081,721 1,298,698,029
Preferred Stocks 25,792,091 21,845,779
Commingled Investment Funds 174,986,840 167,925,592
Temporary Investments 107,202,377 105,645,805
Other 15,262,481 15,304,755
-------------- --------------
$2,614,397,073 $2,050,963,107
============== ==============
</TABLE>
15
<PAGE> 19
JOHNSON & JOHNSON SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
6. Investments, (continued):
Realized gains on investments sold and distributed during the years
ended December 31, 1998 and 1997 are summarized as follows:
<TABLE>
<CAPTION>
J&J Stock Fund Diversified Equity Fund
---------------------------------------- ------------------------------------------
Book Value Proceeds Gain Book Value Proceeds Gain
---------- -------- ---- ---------- -------- ----
<S> <C> <C> <C> <C> <C> <C>
1998 $54,377,538 $105,328,223 $50,950,685 $537,294,947 $601,342,605 $64,047,658
1997 33,353,446 61,081,614 27,728,168 435,908,633 507,218,991 71,310,358
</TABLE>
<TABLE>
<CAPTION>
Employee Stock Ownership Plan Fund
--------------------------------------
Book Value Proceeds Gain
---------- -------- ----
<S> <C> <C> <C>
1998 $5,461,721 $11,883,043 $6,421,322
1997 3,409,578 7,557,927 4,148,349
</TABLE>
<TABLE>
<CAPTION>
Intermediate Bond Fund Balanced Fund
------------------------------------- -----------------------------------------
Book Value Proceeds Gain Book Value Proceeds Gain
---------- -------- ---- ---------- -------- ----
<S> <C> <C> <C> <C> <C> <C>
1998 $45,282,372 $45,574,730 $292,358 $174,560,399 $184,199,209 $9,638,810
1997 15,772,029 16,039,269 267,240 108,450,137 118,225,068 9,774,931
</TABLE>
16
<PAGE> 20
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 April 25, 1996, 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:
<TABLE>
<S> <C>
1999 6,955,528
2000 7,289,791
2001 7,664,462
2002 8,082,746
2003 8,548,156
Thereafter 14,983,593
-----------
$53,524,276
===========
</TABLE>
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. The Company has no rights
against shares once they are allocated under the ESOP.
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.
17
<PAGE> 21
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:
<TABLE>
<CAPTION>
December 31, December 31,
1998 1997
---- ----
<S> <C> <C>
Net Assets Available for Benefits $3,193,761,698 $2,534,574,396
Per the Financial Statements
Amounts Allocated to Withdrawing Participants (8,151,647) (6,758,039)
-------------- --------------
Net Assets Available for Benefits Per the Form 5500 $3,185,610,051 $2,527,816,357
============== ==============
</TABLE>
<TABLE>
<CAPTION>
Year Ended Year Ended
December 31, December 31,
1998 1997
---- ----
<S> <C> <C>
Benefits Paid to Participants Per the Financial Statements $125,515,175 $100,795,855
Add: Amounts Allocated to Withdrawing Participants at
December 31, 1998 and 1997 8,151,647 6,758,039
Less: Amounts Allocated to Withdrawing Participants
at December 31, 1997 and 1996 (6,758,039) (5,390,992)
------------ ------------
Benefits Paid to Participants Per the Form 5500 $126,908,783 $102,162,902
============ ============
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, 1998 and 1997 but not yet paid as of that date.
</TABLE>
18
<PAGE> 22
Supplemental Schedule
JOHNSON & JOHNSON SAVINGS PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1998
<TABLE>
<CAPTION>
FACE AMOUNT
OR SHARES ISSUES COST FAIR VALUE
- --------- ------ ---- ----------
<S> <C> <C> <C>
J&J STOCK FUND
Common Stock
13,413,082 shs. Johnson & Johnson $469,850,905 $1,123,468,342
Temporary Investments
$4,686,151 BT Pyramid Directed
Account Cash Fund 4,686,151 4,686,151
------------ --------------
Total J&J Stock Fund $474,537,056 $1,128,154,493
============ ==============
</TABLE>
EMPLOYEE STOCK OWNERSHIP PLAN TRUST FUND
<TABLE>
<CAPTION>
Common Stock
------------
<S> <C> <C> <C>
5,716,180 shs. Johnson & Johnson $91,946,210 $478,730,076
Temporary Investment
$5,880,388 BT Pyramid Directed
Account Cash Fund 5,880,388 5,880,388
----------- ------------
Total ESOP Trust Fund $97,826,598 $484,610,464
=========== ============
</TABLE>
19
<PAGE> 23
Supplemental Schedule
JOHNSON & JOHNSON SAVINGS PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1998
<TABLE>
<CAPTION>
FACE AMOUNT ISSUES FAIR VALUE
- ----------- ------ ----------
Loan Fund
<S> <C> <C>
$7,082,452 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.) $7,082,452
$69,415 Interest Receivable 69,415
-------
Total Loan Fund $7,151,867
==========
</TABLE>
20
<PAGE> 24
Supplemental Schedule
JOHNSON & JOHNSON SAVINGS PLAN
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
DISPOSED ACQUIRED
-------------------------------------------------- ---------------------------
SECURITY/PARTY GAIN/
DESCRIPTION SALES COSTS PROCEEDS (LOSS) PURCHASES COSTS
- ----------- ----- ----- -------- ------ --------- -----
(# of Transactions) (# of Transactions)
SERIES OF TRANSACTIONS:
<S> <C> <C> <C> <C> <C> <C>
BT Pyramid Directed
Account-Cash Fund (a) $77,249,504 $77,249,504 0 (a) $86,924,200
Johnson & Johnson
Common Stock 158 $58,817,392
</TABLE>
(a) Trustee is unable to provide detailed information on the number of
transactions.
21
<PAGE> 25
Supplemental Schedule
JOHNSON & JOHNSON SAVINGS PLAN
ITEM 27e - SCHEDULE OF NONEXEMPT TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
PURCHASES SALES
--------------------------------- --------------------------
NAME AFFILIATION COST SALES PRICE GAIN
- ---- ----------- ---- ----------- ----
<S> <C> <C> <C> <C>
Johnson & Johnson
Common Stock Plan Administrator $58,817,392 $ - $ -
</TABLE>
22
<PAGE> 26
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (File Nos. 2-77153 and 33-40295) of Johnson & Johnson of
our report dated June 11, 1999 relating to the financial statements and
financial statement schedules of the Johnson & Johnson Savings Plan, which
appears in this Form 11-K.
Florham Park, New Jersey PricewaterhouseCoopers LLP
June 24, 1999
<PAGE> 1
Exhibit 99(a)(ii)
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 January 3, 1999
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)
<PAGE> 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, 1998 and 1997
Statements of Changes in Net Assets Available for Benefits, with
Fund Information for the years ended December 31, 1998 and 1997
Notes to Financial Statements
Supplemental Schedules:
Item 27a - Schedule of Assets Held For Investment
Purposes at December 31, 1998
Item 27d - Schedule of Reportable Transactions for
the year ended December 31, 1998
Item 27e - Schedule of Non-Exempt Transactions for
the year ended December 31, 1998
Consent of PricewaterhouseCoopers LLP, dated June 24, 1999
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
duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN
By: /s/ R.J. Darretta
-------------------------------
R. J. Darretta
Chairman, Pension Committee
June 25, 1999
<PAGE> 3
JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN
------------------
FINANCIAL STATEMENTS AND
SUPPLEMENTAL SCHEDULES
AS OF AND FOR THE YEARS ENDED
DECEMBER 31, 1998 AND 1997
<PAGE> 4
JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN
INDEX
<TABLE>
<S> <C>
Report of Independent Accountants 2
Financial Statements:
Statements of Net Assets Available for Benefits, with
Fund Information as of December 31, 1998 and 1997 3
Statements of Changes in Net Assets Available for
Benefits, with Fund Information for the years ended
December 31, 1998 and 1997 4
Notes to Financial Statements 5-10
Supplemental Schedules:
Item 27a - Schedule of Assets Held For Investment Purposes
at December 31, 1998 11
Item 27d - Schedule of Reportable Transactions for
the year ended December 31, 1998 12
Item 27e - Schedule of Non-Exempt Transactions for
the year ended December 31, 1998 13
</TABLE>
1
<PAGE> 5
REPORT OF INDEPENDENT ACCOUNTANTS
To the Pension and Benefits Committees of
Johnson & Johnson
In our opinion, the accompanying statements of net assets available for benefits
and the related statements of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of the Johnson & Johnson Retirement Savings Plan (the "Plan") as of December 31,
1998 and 1997, and the changes in net assets available for benefits for the
years then ended, in conformity with generally accepted accounting principles.
These financial statements are the responsibility of the Plan's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards which 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,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets held
for investment purposes, schedule of reportable transactions, and schedule of
non-exempt transactions 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 statements of changes in net assets available for benefits is
presented for the purposes of additional analysis rather than to present the net
assets available for benefits and changes in net assets available for benefits
of each fund. These supplemental schedules and fund information are the
responsibility of the Plan's management. 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.
Florham Park, New Jersey PricewaterhouseCoopers LLP
June 11, 1999
2
<PAGE> 6
JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS with FUND INFORMATION
as of December 31, 1998 and 1997
<TABLE>
<CAPTION>
PARTICIPANT DIRECTED
-----------------------------------------------------------
1998
-----------------------------------------------------------
Short-Term
Investment J&J Total
Fund Stock Fund Equity Fund Savings Plan
---- ---------- ----------- ------------
<S> <C> <C> <C> <C>
ASSETS:
Investments at Fair Value (Notes 2 and 5) $ 4,391,628 $ 66,829,069 $ 4,630,626 $ 75,851,323
----------- ------------ ----------- ------------
Total Assets 4,391,628 66,829,069 4,630,626 75,851,323
----------- ------------ ----------- ------------
LIABILITIES:
Accrued Expenses 3,467 51,607 3,542 58,616
Net Assets Available for Benefits $ 4,388,161 $ 66,777,462 $ 4,627,084 $ 75,792,707
============ ============= ============ =============
</TABLE>
<TABLE>
<CAPTION>
PARTICIPANT DIRECTED
---------------------------------------------------------
1997
---------------------------------------------------------
Short-Term
Investment J&J Total
Fund Stock Fund Equity Fund Savings Plan
---- ---------- ----------- ------------
<S> <C> <C> <C> <C>
ASSETS:
Investments at Fair Value (Notes 2 and 5) $ 4,471,863 $ 50,761,081 $ 3,768,354 $ 59,001,298
----------- ------------ ----------- ------------
Total Assets 4,471,863 50,761,081 3,768,354 59,001,298
----------- ------------ ----------- ------------
LIABILITIES:
Accrued Expenses 2,860 32,601 2,389 37,850
Net Assets Available for Benefits $ 4,469,003 $ 50,728,480 $ 3,765,965 $ 58,963,448
============ ============= ============ ============
</TABLE>
See Notes to Financial Statements
3
<PAGE> 7
JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
with FUND INFORMATION
For The Years Ended December 31, 1998 and 1997
<TABLE>
<CAPTION>
PARTICIPANT DIRECTED
------------------------------------------------------------------
1998
------------------------------------------------------------------
Short-Term
Investment J&J Total
Fund Stock Fund Equity Fund Savings Plan
---- ---------- ----------- ------------
<S> <C> <C> <C> <C>
Employee Contributions (Note 3) $ 790,528 $5,431,705 $ 715,315 $ 6,937,548
Employer Contributions (Note 3) 13,644 2,982,748 890 2,997,282
Interest 233,744 15,534 249,278
Dividend 758,206 468,148 1,226,354
---------- ----------- ---------- -----------
1,037,916 9,188,193 1,184,353 11,410,462
Additions to (Deductions From) Net Assets:
Payments to Participants (Note 4) (610,755) (7,562,632) (524,901) (8,698,288)
Change in Unrealized Net
Appreciation of Investments 8,843,308 176,584 9,019,892
Realized Net Gain on Sale of Investments 5,179,819 207,209 5,387,028
Realized Net Gain on Stock Distributed
Administrative Expenses (19,003) (253,106) (17,726) (289,835)
Assets Transferred (Note 2) (489,000) 653,400 (164,400)
---------- ----------- ---------- -----------
Net Increase (Decrease) (80,842) 16,048,982 861,119 16,829,259
Net Assets Available for Benefits,
Beginning of Year 4,469,003 50,728,480 3,765,965 58,963,448
---------- ----------- ---------- -----------
Net Assets Available for Benefits,
End of Year $4,388,161 $66,777,462 $4,627,084 $75,792,707
========== =========== ========== ===========
</TABLE>
<TABLE>
<CAPTION>
PARTICIPANT DIRECTED
-----------------------------------------------------------------
1997
-----------------------------------------------------------------
Short-Term
Investment J&J Total
Fund Stock Fund Equity Savings Plan
---- ---------- ------ ------------
Fund
<S> <C> <C> <C> <C>
Employee Contributions (Note 3) $ 898,413 $ 4,757,028 $ 663,842 $ 6,319,283
Employer Contributions (Note 3) 17,940 2,829,851 1,425 2,849,216
Interest 236,568 7,124 243,692
Dividend 638,704 376,308 1,015,012
---------- ----------- ---------- -----------
1,152,921 8,232,707 1,041,575 10,427,203
Additions to (Deductions From) Net Assets:
Payments to Participants (Note 4) (568,339) (6,043,143) (605,008) (7,216,490)
Change in Unrealized Net
Appreciation of Investments 9,730,269 324,143 10,054,412
Realized Net Gain on Sale of Investments 2,249,648 192,286 2,441,934
Realized Net Gain on Stock Distributed 22,936 22,936
Administrative Expenses (21,290) (212,210) (16,222) (249,722)
Assets Transferred (Note 2) (501,000) 624,600 (123,600)
---------- ----------- ---------- -----------
Net Increase (Decrease) 62,292 14,604,807 813,174 15,480,273
Net Assets Available for Benefits,
Beginning of Year 4,406,711 36,123,673 2,952,791 43,483,175
---------- ----------- ---------- -----------
Net Assets Available for Benefits,
End of Year $4,469,003 $50,728,480 $3,765,965 $58,963,448
========== =========== ========== ===========
</TABLE>
See Notes to Financial Statements
4
<PAGE> 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 which the contribution is
made. Units in the Equity Fund are purchased throughout the
month at the prevailing quoted market price 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.
5
<PAGE> 9
JOHNSON & JOHNSON RETIREMENT 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 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 third party administrative expenses are paid by the Plan,
except costs of entering new investment vehicles which are
paid primarily by Johnson & Johnson.
3. Contributions:
Participating employees may contribute a minimum of 3% up to a
maximum of 6% pre-tax and/or 1% to 10% post-tax of their base
salary. Pre-tax contributions may not exceed $8,000 in 1998
and $7,500 in 1997 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.
6
<PAGE> 10
JOHNSON & JOHNSON RETIREMENT 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. 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.
The number of participants invested in each fund at December
31, 1998 and 1997 was:
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Johnson & Johnson Stock Fund 3,295 3,142
Equity Fund 1,115 1,119
Short-Term Investments Fund 1,285 1,422
</TABLE>
Participants may elect to invest in more than one fund and can
change their investment direction twice a year. A total of
3,316 and 3,340 active and former employees had investments in
the Plan for 1998 and 1997, respectively.
4. Participant Accounts and 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.
Allocations are based on participant's earnings or account
balance, as defined.
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.
7
<PAGE> 11
JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
5. Investments held by the Plan as of December 31, 1998 and 1997
are summarized as follows:
<TABLE>
<CAPTION>
1998
-----------------------------------------------------------------------------------------
Short-Term Johnson & Johnson
Investment Fund Stock Fund Equity Fund
------------------------- --------------------------- ------------------------
Fair Value Cost Fair Value Cost Fair Value Cost
---------- ---- ---------- ---- ---------- ----
<S> <C> <C> <C> <C> <C> <C>
Common Stocks:
Johnson & Johnson $65,972,049 $29,114,361
Mutual Funds $4,630,626 $3,609,938
Temporary Cash
Investments $4,391,628 $4,391,628 857,020 857,020
---------- ---------- ----------- ----------- ---------- ----------
$4,391,628 $4,391,628 $66,829,069 $29,971,381 $4,630,626 $3,609,938
========== ========== =========== =========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
Total
---------------------------
Fair Value Cost
---------- ----
<S> <C> <C>
Common Stocks:
Johnson & Johnson $65,972,049 $29,114,361
Mutual Funds 4,630,626 3,609,938
Temporary Cash
Investments 5,248,648 5,248,648
----------- -----------
$75,851,323 $37,972,947
=========== ===========
</TABLE>
8
<PAGE> 12
JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
5. Investments, (continued):
<TABLE>
<CAPTION>
1997
------------------------------------------------------------------------------------------
Short-Term Johnson & Johnson
Investment Fund Stock Fund Equity Fund
------------------------- --------------------------- -----------------------
Fair Value Cost Fair Value Cost Fair Value Cost
---------- ---- ---------- ---- ---------- ----
<S> <C> <C> <C> <C> <C> <C>
Common Stocks:
Johnson & Johnson $50,432,978 $26,170,766
Mutual Funds $3,768,354 $2,924,250
Temporary Cash
Investments $4,471,863 $4,471,863 328,103 328,103
---------- ---------- ----------- ----------- ---------- ----------
$4,471,863 $4,471,863 $50,761,081 $26,498,869 $3,768,354 $2,924,250
========== ========== =========== =========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
Total
---------------------------
Fair Value Cost
---------- ----
<S> <C> <C>
Common Stocks:
Johnson & Johnson $50,432,978 $26,170,766
Mutual Funds 3,768,354 2,924,250
Temporary Cash
Investments 4,799,966 4,799,966
----------- -----------
$59,001,298 $33,894,982
=========== ===========
</TABLE>
Realized gains on investments sold and distributed during the years ended
December 31, 1998 and 1997 are summarized as follows:
<TABLE>
<CAPTION>
J&J Stock Fund Equity Fund
----------------------------------------- --------------------------------------
Book Value Proceeds Gain Book Value Proceeds Gain
---------- -------- ---- ---------- -------- ----
<S> <C> <C> <C> <C> <C> <C>
1998 $3,228,341 $8,408,160 $5,179,819 $613,199 $820,410 $207,209
1997 4,183,618 6,456,202 2,272,584 490,614 682,900 192,286
</TABLE>
9
<PAGE> 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 Plan and
related Trust accounts are 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:
<TABLE>
<CAPTION>
December 31,
1998 1997
---- ----
<S> <C> <C>
Net Assets Available for Benefits
Per the Financial Statements $75,792,707 $58,963,448
Amounts Allocated to Withdrawing Participants (542,913) (571,341)
----------- -----------
Net Assets Available for Benefits Per the Form 5500 $75,249,794 $58,392,107
=========== ===========
</TABLE>
<TABLE>
<CAPTION>
Years Ended
December 31,
1998 1997
---- ----
<S> <C> <C>
Benefits Paid to Participants Per the Financial Statements $8,698,288 $7,216,490
Add: Amounts Allocated to Withdrawing Participants at
December 31, 1998 and 1997 542,913 571,341
Less: Amounts Allocated to Withdrawing Participants
at December 31, 1997 and 1996 (571,341) (267,610)
---------- ----------
Benefits Paid to Participants Per the Form 5500 $8,669,860 $7,520,221
========== ==========
</TABLE>
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, 1998 and 1997 but not yet paid as of that date.
10
<PAGE> 14
Supplemental Schedule
JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1998
<TABLE>
<CAPTION>
FACE AMOUNT
OR SHARES ISSUES COST FAIR VALUE
--------- ------ ---- ----------
<S> <C> <C> <C>
J&J STOCK FUND
Common Stock
786,552 shs Johnson & Johnson $29,114,361 $65,972,049
Temporary Investments
$857,020 U.S. Treasury Obligations 857,020 857,020
----------- -----------
Total J&J Stock Fund $29,971,381 $66,829,069
=========== ===========
SHORT-TERM INVESTMENT FUND
Money Market funds
Vanguard Money Market
Reserves Prime
$4,391,628 Portfolio $4,391,628 $4,391,628
---------- ----------
EQUITY FUND
Mutual Funds
149,038.629 shs. Investment Company of America $3,609,938 $4,630,626
========== ==========
</TABLE>
11
<PAGE> 15
Supplemental Schedule
JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
DISPOSED ACQUIRED
--------------------------------------- ------------------------
SECURITY/PARTY GAIN/
DESCRIPTION SALES COSTS PROCEEDS (LOSS) PURCHASES COSTS
----- ----- -------- ---- --------- -----
(# of Transactions) (# of Transactions)
SERIES OF TRANSACTIONS:
<S> <C> <C> <C> <C> <C> <C>
Johnson & Johnson
Common Stock 1 $83,565 $166,510 $82,945 46 $1,682,450
The Vanguard Group 23 $892,847 $892,847 56 $1,015,153
</TABLE>
12
<PAGE> 16
Supplemental Schedule
JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN
ITEM 27e - SCHEDULE OF NON-EXEMPT TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
PURCHASES SALES
-------------------------------------- ---------------------------
NAME AFFILIATION COST SALES PRICE GAIN
- ---- ----------- ---- ----------- ----
<S> <C> <C> <C> <C>
Johnson & Johnson
Common Stock Plan Administrator $1,682,450 $ - $ -
</TABLE>
13
<PAGE> 17
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (File No. 33-32875) of Johnson & Johnson of our report
dated June 11, 1999 relating to the financial statements and financial statement
schedules of the Johnson & Johnson Retirement Savings Plan, which appears in
this Form 11-K.
Florham Park, New Jersey PricewaterhouseCoopers LLP
June 24, 1999
<PAGE> 1
Exhibit 99(a)(iii)
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 January 3, 1999
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)
<PAGE> 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, 1998 and 1997
Statements of Changes in Net Assets Available for Benefits, with
Fund Information for the years ended December 31, 1998 and 1997
Notes to Financial Statements
Supplemental Schedules:
Item 27a - Schedule of Assets Held For Investment
Purposes at December 31, 1998
Item 27d - Schedule of Reportable Transactions for
the year ended December 31, 1998
Item 27e - Schedule of Non-Exempt Transactions for
the year ended December 31, 1998
Consent of PricewaterhouseCoopers LLP, dated June 24, 1999
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
duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
JOHNSON & JOHNSON SAVINGS PLAN
FOR UNION REPRESENTED EMPLOYEES
By: /s/ R.J. Darretta
--------------------------------
R. J. Darretta
Chairman, Pension Committee
June 25, 1999
<PAGE> 3
JOHNSON & JOHNSON SAVINGS PLAN
FOR UNION REPRESENTED EMPLOYEES
-----------------
FINANCIAL STATEMENTS AND
SUPPLEMENTAL SCHEDULES
AS OF AND FOR THE YEARS ENDED
DECEMBER 31, 1998 AND 1997
<PAGE> 4
JOHNSON & JOHNSON SAVINGS PLAN
FOR UNION REPRESENTED EMPLOYEES
INDEX
<TABLE>
<S> <C>
Report of Independent Accountants 2
Financial Statements:
Statements of Net Assets Available for Benefits, with
Fund Information as of December 31, 1998 and 1997 3-4
Statements of Changes in Net Assets Available for
Benefits, with Fund Information for the years ended
December 31, 1998 and 1997 5-6
Notes to Financial Statements 7-13
Supplemental Schedules:
Item 27a - Schedule of Assets Held for Investment Purposes
at December 31, 1998 14
Item 27d - Schedule of Reportable Transactions for
the year ended December 31, 1998 15
Item 27e - Schedule of Non-Exempt Transactions for
the year ended December 31, 1998 16
</TABLE>
1
<PAGE> 5
REPORT OF INDEPENDENT ACCOUNTANTS
To the Pension and Benefits Committees of
Johnson & Johnson
In our opinion, the accompanying statements of net assets available for benefits
and the related statements of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of the Johnson & Johnson Savings Plan for Union Represented Employees (the
"Plan") as of December 31, 1998 and 1997, and the changes in net assets
available for benefits for the years then ended, in conformity with generally
accepted accounting principles. These financial statements are the
responsibility of the Plan's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which 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, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets held
for investment purposes, schedule of reportable transactions, and schedule of
non-exempt transactions 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 statements of changes in net assets available for benefits is
presented for the purposes of additional analysis rather than to present the net
assets available for benefits and changes in net assets available for benefits
of each fund. These supplemental schedules and fund information are the
responsibility of the Plan's management. 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.
Florham Park, New Jersey PricewaterhouseCoopers LLP
June 11, 1999
2
<PAGE> 6
JOHNSON & JOHNSON SAVINGS PLAN
FOR UNION REPRESENTED EMPLOYEES
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS with FUND INFORMATION
As of December 31, 1998
<TABLE>
<CAPTION>
PARTICIPANT DIRECTED
--------------------------------------------------------------------------------
Fixed J&J Diversified Total
USGS Fund Interest Fund Stock Fund Equity Fund Savings Plan
--------- ------------- ---------- ----------- ------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Deposits in Group Annuity Contracts (Note 2) $1,860,044 $1,860,044
Investments at Fair Value (Notes 2 and 5) $17,436,911 17,436,911
Investments in Master Trust (Notes 2 and 5) $1,008,405 $4,494,429 5,502,834
Accrued Dividends and Interest Receivable 4,297 10,121 214 25,069 39,701
--------- ----------- ------------ ----------- ------------
Total Assets 1,012,702 1,870,165 17,437,125 4,519,498 24,839,490
--------- ----------- ------------ ----------- ------------
LIABILITIES:
Accrued Transfers 29,100 (4,801) (68,400) 44,101
--------- ----------- ------------ ----------- ------------
Net Assets Available for Benefits $ 983,602 $ 1,874,966 $ 17,505,525 $ 4,475,397 $ 24,839,490
========= =========== ============ =========== ============
</TABLE>
See Notes to Financial Statements
3
<PAGE> 7
JOHNSON & JOHNSON SAVINGS PLAN
FOR UNION REPRESENTED EMPLOYEES
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS with FUND INFORMATION
As of December 31, 1997
<TABLE>
<CAPTION>
PARTICIPANT DIRECTED
-------------------------------------------------------------------------------
Fixed J&J Diversified Total
USGS Fund Interest Fund Stock Fund Equity Fund Savings Plan
--------- ------------- ---------- ----------- ------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Deposits in Group Annuity Contracts (Note 2) $1,597,318 $ 1,597,318
Investments at Fair Value (Notes 2 and 5) $12,291,567 12,291,567
Investments in Master Trust (Notes 2 and 5) $933,114 $3,069,219 4,002,333
Accrued Dividends and Interest Receivable 4,518 7,579 238 6,360 18,695
-------- ---------- ----------- ---------- -----------
Total Assets 937,632 1,604,897 12,291,805 3,075,579 17,909,913
LIABILITIES:
Accrued Transfers 17,600 17,500 (37,200) 2,100
-------- ---------- ----------- ---------- -----------
Net Assets Available for Benefits $920,032 $1,587,397 $12,329,005 $3,073,479 $17,909,913
======== ========== =========== ========== ===========
</TABLE>
See Notes to Financial Statements
4
<PAGE> 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, 1998
<TABLE>
<CAPTION>
PARTICIPANT DIRECTED
-------------------------------------------------------------------------
Fixed J&J Diversified Total
USGS Fund Interest Fund Stock Fund Equity Fund Savings Plan
--------- ------------- ---------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Employee Contributions (Note 3) $177,832 $349,624 $1,528,145 $761,834 $ 2,817,435
Employer Contributions (Note 3) 610,149 610,149
Interest 52,839 112,154 2,929 167,922
Dividends 190,534 50,401 240,935
-------- ---------- ----------- ---------- -----------
230,671 461,778 2,331,757 812,235 3,836,441
Additions to (Deductions From) Net Assets:
Payments to Participants (Note 4) (47,682) (104,718) (759,124) (162,697) (1,074,221)
Change in Unrealized Net Appreciation of Investment 3,262,162 395,659 3,657,821
Realized Net Gain on Sale of Investments 180,470 365,123 545,593
Realized Net Gain on Stock Distributed 32,455 32,455
Assets Transferred (Note 2) (116,300) (64,200) 176,000 4,500
Administrative Expenses (3,119) (5,291) (47,200) (12,902) (68,512)
-------- ---------- ----------- ---------- -----------
Net Increase 63,570 287,569 5,176,520 1,401,918 6,929,577
Net Assets Available for Benefits, Beginning of Year 920,032 1,587,397 12,329,005 3,073,479 17,909,913
-------- ---------- ----------- ---------- -----------
Net Assets Available for Benefits, End of Year $983,602 $1,874,966 $17,505,525 $4,475,397 $24,839,490
======== ========== =========== ========== ===========
</TABLE>
See Notes to Financial Statements
5
<PAGE> 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, 1997
<TABLE>
<CAPTION>
PARTICIPANT DIRECTED
---------------------------------------------------------------------------
Fixed J&J Diversified Total
USGS Fund Interest Fund Stock Fund Equity Fund Savings Plan
--------- ------------- ---------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Employee Contributions (Note 3) $244,456 $443,802 $1,198,488 $697,584 $2,584,330
Employer Contributions (Note 3) 562,673 562,673
Interest 48,796 101,901 3,097 153,794
Dividends 146,281 37,409 183,690
-------- ---------- ----------- ---------- -----------
293,252 545,703 1,910,539 734,993 3,484,487
Additions to (Deductions From) Net Assets:
Payments to Participants (Note 4) (54,700) (113,808) (576,818) (103,459) (848,785)
Change in Unrealized Net Appreciation of Investments 2,371,878 251,300 2,623,178
Realized Net Gain on Sale of Investments 194,679 386,920 581,599
Realized Net Gain on Stock Distributed 58,160 58,160
Assets Transferred (Note 2) (106,500) (159,100) 386,400 (120,800)
-------- ---------- ----------- ---------- -----------
Net Increase 132,052 272,795 4,344,838 1,148,954 5,898,639
Net Assets Available for Benefits, Beginning of Year 787,980 1,314,602 7,984,167 1,924,525 12,011,274
-------- ---------- ----------- ---------- -----------
Net Assets Available for Benefits, End of Year $920,032 $1,587,397 $12,329,005 $3,073,479 $17,909,913
======== ========== =========== ========== ===========
</TABLE>
See Notes to Financial Statements
6
<PAGE> 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
by Johnson & Johnson (the "Company"). The Plan was designed to enhance
the existing retirement program of eligible employees covered under
collective bargaining agreements with the Company. The funding of the
Plan is made through employee and Company contributions. The assets of
the Plan are maintained in a Master Trust account ("Johnson & Johnson
Savings Plan Trust") and transactions therein are executed by the
trustee, Bankers Trust Company. The Johnson & Johnson Savings Plan Trust
is allocated based upon the total of each individual participant's share
of the Johnson & Johnson Savings Plan Trust.
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 ("USGS"), Fixed
Interest and Diversified Equity funds represent the Plan's share of
assets in the Johnson & Johnson Savings Plan Trust. The USGS 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
Interest Fund was 6.62 percent for 1998 and 7.33 percent for 1997. 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.
Certain reclassifications have been made to the 1997 Plan financial
statements to conform to the 1998 presentation.
7
<PAGE> 11
JOHNSON & JOHNSON SAVINGS PLAN
FOR UNION REPRESENTED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS, Continued
2. Summary of Significant Accounting Policies, (Continued):
Equity investments and corporate obligations in the Diversified Equity
Fund, managed by the Capital Guardian Trust Company and J.P. Morgan
Investment Management, Inc., 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 Capital Guardian Trust Company and
J.P. Morgan Investment Management, Inc. based on the prevailing market
values of the underlying investments.
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.
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. Effective January 1, 1998, third
party administrative expenses are paid by the Plan, except costs of
entering new investment vehicles which will be paid primarily by Johnson
& Johnson. Prior to January 1, 1998, third party administrative expenses
were paid by the Company.
8
<PAGE> 12
JOHNSON & JOHNSON SAVINGS PLAN
FOR UNION REPRESENTED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS, Continued
3. Contributions:
Participating employees may contribute a minimum of $0.16 per hour up to
a maximum of $1.60 per hour up, depending on the negotiated contract
rate, of the first forty hours worked in each payroll week. All
contributions are on a pre-tax basis. Pre-tax contributions may not
exceed $10,000 in 1998 and $9,500 in 1997. The Company contributes to the
Plan, out of current or accumulated profits, an amount equal to 25% or
40% (depending on the negotiated collective bargaining agreement) of the
employee directed contributions on the first $0.40 to $0.80 per hour
directly into J&J Stock.
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, 1998 and
1997 was:
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
U.S. Government Securities Fund 542 588
Fixed Interest Fund 767 812
Johnson & Johnson Stock Fund 2,166 1,693
Diversified Equity Fund 1,171 1,059
</TABLE>
Participants may elect to invest in more than one fund and can change
their investment direction twice a year. A total of 2,167 and 2,113
active and former employees had investments in the Plan for 1998 and
1997, respectively.
4. Participant Accounts and 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. Allocations are based on participant's earnings or account
balances, as defined.
Participants may withdraw before-tax contributions only upon meeting
certain hardship conditions.
9
<PAGE> 13
JOHNSON & JOHNSON SAVINGS PLAN
FOR UNION REPRESENTED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS, Continued
5. Investments:
Investments held by the Plan as of December 31, 1998 are summarized as
follows:
<TABLE>
<CAPTION>
Johnson & Johnson
Stock Fund
----------------------------
Fair Value Cost
---------- ----
<S> <C> <C>
Common Stocks:
Johnson & Johnson $17,427,035 $8,947,697
Temporary Cash Investments 9,876 9,876
----------- ----------
$17,436,911 $8,957,573
=========== ==========
</TABLE>
The investments in the USGS, 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 0.5% of
fair value) held by the Johnson & Johnson Savings Plan Trust. Total
investments held by the Savings Plan Trust on behalf of the Plan and the
Johnson & Johnson Savings Plan are summarized as follows:
<TABLE>
<CAPTION>
Description Fair Value Cost
----------- ---------- ----
<S> <C> <C>
USGS Fund:
U.S. Government Securities - Short Term $30,466,695 $30,466,695
Other* 138,992 138,992
Fixed Interest Fund:
Deposits in Group Annuity Contracts 634,215,282 634,215,282
Other* 3,286,951 3,286,951
Diversified Equity Fund:
Common Stocks 764,674,566 548,124,829
Other* 4,178,130 4,178,130
-------------- -------------
$1,436,960,616 $1,220,410,879
============== ==============
</TABLE>
* Other consists of interest and/or dividends receivable.
10
<PAGE> 14
JOHNSON & JOHNSON SAVINGS PLAN
FOR UNION REPRESENTED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS, Continued
5. Investments, (continued):
Investments held by the plan as of December 31, 1997 are summarized as
follows:
<TABLE>
<CAPTION>
Johnson & Johnson
Stock Fund
-----------------------------
Fair Value Cost
---------- ----
<S> <C> <C>
Common Stocks:
Johnson & Johnson $12,291,539 $7,074,363
Temporary Cash Investments 28 28
----------- ----------
$12,291,567 $7,074,391
=========== ==========
</TABLE>
The investments in the U.S.G.S., 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 0.5% 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:
<TABLE>
<CAPTION>
Description Fair Value Cost
----------- ---------- ----
<S> <C> <C>
USGS Fund:
U.S. Government Securities - Short Term $23,731,721 $23,731,721
Other* 114,306 114,306
Fixed Interest Fund:
Deposits in Group Annuity Contracts 620,414,165 620,414,165
Other* 2,943,913 2,943,913
Diversified Equity Fund:
Common Stocks 554,290,739 406,787,164
Other* 1,156,321 1,154,321
-------------- --------------
$1,202,651,165 $1,055,147,590
============== ==============
</TABLE>
* Other consists of interest and/or dividends receivable.
Realized gains on investments sold and distributed during the years
ended December 31, 1998 and 1997 are summarized as follows:
<TABLE>
<CAPTION>
J&J Stock Fund Diversified Equity Fund
----------------------------------------- ----------------------------------------
Book Value Proceeds Gain Book Value Proceeds Gain
---------- -------- ---- ---------- -------- ----
<S> <C> <C> <C> <C> <C> <C>
1998 $321,078 $534,003 $212,925 $3,072,462 $3,437,585 $365,123
1997 $293,544 $546,383 $252,839 $2,374,058 $2,760,978 $386,920
</TABLE>
11
<PAGE> 15
JOHNSON & JOHNSON SAVINGS PLAN
FOR UNION REPRESENTED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS, Continued
6. Tax Status:
The Internal Revenue Service has determined and informed the Company by a
letter dated April 26, 1996, 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.
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:
<TABLE>
<CAPTION>
December 31, December 31,
1998 1997
---- ----
<S> <C> <C>
Net Assets Available for Benefits $24,839,490 $17,909,913
Per the Financial Statements
Amounts Allocated to Withdrawing Participants (52,942) (51,617)
----------- -----------
Net Assets Available for Benefits Per the Form 5500 $24,786,548 $17,858,296
=========== ===========
</TABLE>
12
<PAGE> 16
JOHNSON & JOHNSON SAVINGS PLAN
FOR UNION REPRESENTED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS, Continued
9. Reconciliation of Financial Statements to Form 5500 (continued):
<TABLE>
<CAPTION>
Year Ended Year Ended
December 31, December 31,
1998 1997
---- ----
<S> <C> <C>
Benefits Paid to Participants Per the Financial Statements $1,074,221 $848,785
Add: Amounts Allocated to Withdrawing Participants at
December 31, 1998 and 1997 52,942 51,617
Less: Amounts Allocated to Withdrawing Participants
at December 31, 1997 and 1996 (51,617) (39,613)
----------- -----------
Benefits Paid to Participants Per the Form 5500 $1,075,546 $860,789
=========== ========
</TABLE>
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, 1998 and 1997 but not yet paid as of that
date.
13
<PAGE> 17
Supplemental Schedule
JOHNSON & JOHNSON SAVINGS PLAN
FOR UNION REPRESENTED EMPLOYEES
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1998
<TABLE>
<CAPTION>
FACE AMOUNT
OR SHARES ISSUES COST FAIR VALUE
--------- ------ ---- ----------
<S> <C> <C> <C>
J&J STOCK FUND
Common Stock
208,084 shs. Johnson & Johnson $8,947,697 $17,427,035
Temporary Investments
BT Pyramid Directed
$ 9,876 Account Cash Fund 9,876 9,876
---------- -----------
Total J&J Stock Fund $8,957,573 $17,436,911
========== ===========
</TABLE>
14
<PAGE> 18
Supplemental Schedule
JOHNSON & JOHNSON SAVINGS PLAN
FOR UNION REPRESENTED EMPLOYEES
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
DISPOSED ACQUIRED
---------------------------------------------------- ---------------------------
SECURITY/PARTY GAIN/
DESCRIPTION SALES COSTS PROCEEDS (LOSS) PURCHASES COSTS
- ----------- ----- ----- -------- ------ --------- -----
# of Transactions # of Transactions
<S> <C> <C> <C> <C> <C> <C>
SERIES OF TRANSACTIONS:
BT Pyramid Directed
Account-Cash Fund (a) $1,764,740 $1,764,740 0 (a) $1,800,448
Johnson & Johnson
Common Stock 120 $1,719,849
</TABLE>
(a) Trustee is unable to provide detailed information on the number of
transactions.
15
<PAGE> 19
Supplemental Schedule
JOHNSON & JOHNSON SAVINGS PLAN
FOR UNION REPRESENTED EMPLOYEES
ITEM 27e - SCHEDULE OF NON-EXEMPT TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
PURCHASES SALES
------------------------------------------ ----------------------------
NAME AFFILIATION COST SALES PRICE GAIN
- ---- ----------- ---- ----------- ----
<S> <C> <C> <C> <C>
Johnson & Johnson
Common Stock Plan Administrator $1,719,849 $ - $ -
</TABLE>
16
<PAGE> 20
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (File No. 33-52252) of Johnson & Johnson of our report
dated June 11, 1999 relating to the financial statements and financial statement
schedules of the Johnson & Johnson Savings Plan for Union Represented Employees,
which appears in this Form 11-K.
Florham Park, New Jersey PricewaterhouseCoopers LLP
June 24, 1999
