<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 2, 2000
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:
Balance Sheets as of December 31, 1999 and 1998
Statements of Operations and Changes in Plan Equity
for the years ended December 31, 1999 and 1998
Notes to Financial Statements
Supplemental Schedules:
Schedule of Investments at December 31, 1999
Schedule of 5% Reportable Transactions for the year ended
December 31, 1999
Schedule of Party-In-Interest Transactions for the year
ended December 31, 1999
Consent of PricewaterhouseCoopers LLP, dated June 23, 2000
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 26, 2000
<PAGE> 3
JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN
------------------
FINANCIAL STATEMENTS AND
SUPPLEMENTAL SCHEDULES
AS OF AND FOR THE YEARS ENDED
DECEMBER 31, 1999 AND 1998
<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, 1999 and 1998 3
Statements of Changes in Net Assets Available for
Benefits with Fund Information for the Years Ended
December 31, 1999 and 1998 4
Notes to Financial Statements 5-10
Supplemental Schedules:
Item 27a - Schedule of Assets Held For Investment Purposes
at December 31, 1999 11
Item 27d - Schedule of Reportable Transactions for
the Year Ended December 31, 1999 12
</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,
1999 and 1998, and the changes in net assets available for benefits for the
years then ended in conformity with accounting principles generally accepted in
the United States. 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 auditing standards generally accepted in the
United States, 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 and schedule of reportable 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. These supplemental
schedules are the responsibility of the Plan's management. The fund information
in the statements of net assets available for benefits and the statement 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. 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.
PricewaterhouseCoopers LLP
Florham Park, New Jersey
June 12, 2000
2
<PAGE> 6
JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS with FUND INFORMATION
as of December 31, 1999 and 1998
<TABLE>
<CAPTION>
PARTICIPANT DIRECTED
-------------------------------------------------------------------
1999
-------------------------------------------------------------------
Short-Term J&J Total
Investment Fund Stock Fund Equity Fund Savings Plan
---------- ----------- ------------
<S> <C> <C> <C> <C>
ASSETS:
-------
Investments at Fair Value (Notes 2 and 5) $ 4,323,235 $ 71,651,424 $ 5,314,379 $ 81,289,038
----------- ------------ ----------- ------------
Total Assets 4,323,235 71,651,424 5,314,379 81,289,038
----------- ------------ ----------- ------------
LIABILITIES:
------------
Accrued Expenses 1,703 26,855 1,999 30,557
----------- ------------ ----------- ------------
Net Assets Available for Benefits $ 4,321,532 $ 71,624,569 $ 5,312,380 $ 81,258,481
=========== ============ =========== ============
<CAPTION>
PARTICIPANT DIRECTED
---------------------------------------------------------------------
1998
---------------------------------------------------------------------
Short-Term J&J Total
Investment 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>
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, 1999 and 1998
<TABLE>
<CAPTION>
PARTICIPANT DIRECTED
--------------------------------------------------------------------
1999
--------------------------------------------------------------------
Short-Term J&J Total
Investment Fund Stock Fund Equity Fund Savings Plan
---------- ----------- ------------
<S> <C> <C> <C> <C>
Employee Contributions (Note 3) $ 656,872 $ 5,940,740 $ 740,056 $ 7,337,668
Employer Contributions (Note 3) 11,511 3,399,925 684 3,412,120
Interest 34,233 34,233
Dividends 216,639 858,399 533,275 1,608,313
---------- ----------- ---------- ------------
885,022 10,233,297 1,274,015 12,392,334
Additions to (Deductions from) Net Assets:
------------------------------------------
Payments to Participants (Note 4) (639,181) (9,704,709) (513,280) (10,857,170)
Change in Unrealized Net
Appreciation of Investments 752,584 41,134 793,718
REALIZED NET GAIN ON SALE OF INVESTMENTS 3,265,396 198,147 3,463,543
Administrative Expenses (17,970) (288,461) (20,220) (326,651)
Assets Transferred (Note 2) (294,500) 589,000 (294,500)
----------- ----------- ----------- -------------
Net Increase (Decrease) (66,629) 4,847,107 685,296 5,465,774
Net Assets Available for Benefits,
Beginning of Year 4,388,161 66,777,462 4,627,084 75,792,707
---------- ----------- ---------- ------------
Net Assets Available for Benefits, End of Year $4,321,532 $71,624,569 $5,312,380 $ 81,258,481
========== =========== ========== ============
<CAPTION>
PARTICIPANT DIRECTED
-------------------------------------------------------------------
1998
-------------------------------------------------------------------
Short-Term J&J Total
Investment 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 177,799 15,534 249,278
Dividends 55,945 758,206 468,148 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
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>
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") is a defined
contribution plan which was established on March 1, 1990 for eligible
employees of certain subsidiaries of Johnson & Johnson ("J&J" or 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
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 is
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 in the Statement of Changes in Net
Assets Available for Benefits.
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
accounting principles generally accepted in the United States 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
10% pre-tax and/or 1% to 10% post-tax of their base salary. Annual pre-tax
contributions may not exceed $8,000 in 1999 or 1998 under Puerto Rico law.
The Company contributes to the Plan, out of current or accumulated
profits, an amount equal to 66-2/3% of the employee's pre-tax
contributions for the Plan year.
Contributions are made to the Plan by participants through payroll
deductions and by the Company on behalf of participants. Employee
contributions are to be invested in any of the three investment funds at
the direction of the participating employees. All Company contributions
are made to the J&J Stock Fund, except for participants over the age of
50, who may choose the alternative investments.
6
<PAGE> 10
JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
3. Contributions (Continued):
The number of participants invested in each fund at December 31, 1999 and
1998 was:
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Johnson & Johnson Stock Fund 3,206 3,295
Equity Fund 1,024 1,115
Short-Term Investments Fund 1,117 1,285
</TABLE>
Participants may elect to invest in more than one fund and can change
their investment direction twice a year. A total of 3,223 and 3,316 active and
former employees had investments in the Plan for 1999 and 1998, 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, 1999 and 1998 are
summarized as follows:
<TABLE>
<CAPTION>
December 31, 1999
-----------------------------------------------------------------
Short-Term Johnson & Johnson
Investment Fund Stock Fund
--------------------- ----------------------
Fair Value Cost Fair Value Cost Fair Value
---------- -------- ---------- -------- ----------
<S> <C> <C> <C> <C>
Common Stocks:
Johnson & Johnson $70,955,588 $34,850,484
Mutual Funds
Temporary Cash
Investments $4,323,235 $4,323,235 695,836 695,836
---------- ---------- ----------- -----------
$4,323,235 $4,323,235 $71,651,424 $35,546,320
========== ========== =========== ===========
<CAPTION>
December 31, 1999
-------------------------------------------------------------
Equity Fund Total
------------------- ---------------------
Cost Fair Value Cost
------ ---------- ------
<S> <C> <C> <C> <C>
Common Stocks:
Johnson & Johnson $70,955,588 $35,914,046
Mutual Funds $5,314,379 $4,252,553 5,314,379 4,252,553
Temporary Cash
Investments 5,019,071 5,023,226
---------- ---------- ----------- -----------
$5,314,379 $4,252,553 $81,289,038 $45,189,825
========== ========== =========== ===========
</TABLE>
8
<PAGE> 12
JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
5. Investments (Continued):
<TABLE>
<CAPTION>
December 31, 1998
-----------------------------------------------------------------------------------------------------
Short-Term Johnson & Johnson
Investment Fund Stock Fund
------------------- -----------------------
Fair Value Cost Fair Value Cost Fair Value
---------- ------ ---------- -------- ----------
<S> <C> <C> <C> <C>
Common Stocks:
Johnson & Johnson $65,972,049 $29,114,361
Mutual Funds
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
========== ========== =========== ===========
<CAPTION>
Equity Fund Total
--------------------- -------------------
Cost Fair Value Cost
-------- ---------- --------
<S> <C> <C> <C> <C>
Common Stocks:
Johnson & Johnson $65,972,049 $29,114,361
Mutual Funds $4,630,626 $3,609,938 4,630,626 3,609,938
Temporary Cash
Investments 5,248,648 5,248,648
---------- ---------- ----------- -----------
$4,630,626 $3,609,938 $75,851,323 $37,972,947
========== ========== =========== ===========
</TABLE>
Realized gains on investments sold and distributed during the years ended
December 31, 1999 and 1998 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>
1999 $3,494,700 $6,760,096 $3,265,396 $617,668 $815,815 $198,147
1998 3,228,341 8,408,160 5,179,819 613,201 820,410 207,209
</TABLE>
9
<PAGE> 13
JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
6. Tax Status:
The Plan constitutes as 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,
1999 1998
-------- --------
<S> <C> <C>
Net Assets Available for Benefits
Per the Financial Statements $ 81,258,481 $ 75,792,707
Amounts Allocated to Withdrawing Participants (601,685) (542,913)
------------ ------------
Net Assets Available for Benefits Per the Form 5500 $ 80,656,796 $ 75,249,794
============ ============
</TABLE>
<TABLE>
<CAPTION>
Years Ended
December 31,
1999 1998
---------- -------
<S> <C> <C>
Benefits Paid to Participants Per the Financial Statements $ 10,857,170 $ 8,698,288
Add: Amounts Allocated to Withdrawing Participants at
December 31, 1999 and 1998 601,685 542,913
Less: Amounts Allocated to Withdrawing Participants
at December 31, 1998 and 1997 (542,913) (571,341)
------------- ------------
Benefits Paid to Participants Per the Form 5500 $ 10,915,942 $ 8,669,860
============ ===========
</TABLE>
Amounts allocated to the withdrawing participants are recorded on the Form 5500
for benefit claims that have been processed and approved for payment
priortoDecember 31, 1999 and 1998 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, 1999
<TABLE>
<CAPTION>
FACE AMOUNT
OR SHARES ISSUES COST FAIR VALUE
--------- ------ ------------ ----------
J&J STOCK FUND
--------------
<S> <C> <C> <C>
Common Stock
------------
796,211 shs. Johnson & Johnson $34,850,484 $70,955,588
<CAPTION>
Temporary Investments
---------------------
<S> <C> <C> <C>
$695,836 U.S. Treasury Obligations 695,836 695,836
------------ ------------
Total J&J Stock Fund $35,546,320 $71,651,424
=========== ============
<CAPTION>
SHORT-TERM INVESTMENT FUND
--------------------------
Money Market funds
------------------
<S> <C> <C> <C>
Vanguard Money Market
Reserves Prime
$4,323,235 Portfolio $4,323,235 $4,323,235
========== ==========
<CAPTION>
EQUITY FUND
-----------
Mutual Funds
------------
<S> <C> <C> <C>
163,720.853 shs. Investment Company of America $4,252,553 $5,314,379
========== ==========
</TABLE>
11
<PAGE> 15
Supplemental Schedule
JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
<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:
Johnson & Johnson
Common Stock - - - - 7 $990,396
The Vanguard Group 21 $1,035,925 $1,035,925 - 61 $967,532
</TABLE>
12
<PAGE> 16
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 12, 2000 relating to the financial statements and financial statement
schedules of the Johnson & Johnson Retirement Savings Plan, which appears in
this Form 11-K.
PricewaterhouseCoopers LLP
Florham Park, New Jersey
June 23, 2000
