<PAGE> 1
Exhibit 99(a)(iv)
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 11-K
------------------------------
(MARK ONE)
[X] Annual Report Pursuant to Section 15(d) of the Securities Exchange Act of
1934
For the fiscal year end December 31, 1999
Or
[ ] Transition Report Pursuant to Section 15(d) of the Securities Exchange
Act of 1934
For the transition period from to
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Commission file number 1-3215
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CENTOCOR QUALIFIED
SAVINGS AND RETIREMENT 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
Centocor Qualified Savings and Retirement Plan
Index to Financial Statements and Schedules
Page 3 Report of Independent Accountants
Page 4 Statements of Net Assets Available for Plan Benefits as of
December 31, 1999 and 1998
Page 5 Statements of Changes in Net Assets Available for Plan Benefits
for the years ended December 31, 1999 and 1998
Pages 6-11 Notes to Financial Statements
Page 12 Item 27a - Supplemental Schedule of Assets Held for Investment
Purposes
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.
CENTOCOR QUALIFIED SAVINGS
AND RETIREMENT PLAN
By: /s/ R.J. Darretta
-------------------------
R.J. Darretta
Chairman, Pension Committee
June 26, 2000
2
<PAGE> 3
Report of Independent Accountants
To the 401(k) Administrative Committee of Centocor, Inc.:
In our opinion, the accompanying statements of net assets available for plan
benefits and the related statements of changes in net assets available for plan
benefits present fairly, in all material respects, the net assets available for
plan benefits of the Centocor Qualified Savings and Retirement Plan (the "Plan")
as of December 31, 1999, and the changes in net assets available for plan
benefits for the year 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 audit. We conducted our audit
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 our audit
provides a reasonable basis for the opinion expressed above. The statement of
net assets available for plan benefits and the related statement of changes in
net assets available for plan benefits of the Plan as of December 31, 1998 and
for the year then ended were audited by other independent accountants whose
report dated June 18, 1999 expressed an unqualified opinion on those statements.
Our audit was 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 is presented for the purpose of additional analysis and
is not a required part of the basic financial statements but is supplemental
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. This supplemental schedule is the responsibility of the Plan's management.
The supplemental schedule has been subjected to the auditing procedures applied
in the audit of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
PricewaterhouseCoopers LLP
Philadelphia, PA
June 9, 2000
3
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CENTOCOR QUALIFIED SAVINGS AND RETIREMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
<TABLE>
<CAPTION>
December 31,
-----------------------------------------
1999 1998
---------------- ---------------
<S> <C> <C>
Assets:
Investments at Fair Value $ 42,418,711 $ 28,206,185
Receivables:
Employer's contribution 2,465,532 1,485,822
Loans from participants 588,825 205,012
---------------- ---------------
3,054,357 1,690,834
---------------- ---------------
Total assets $ 45,473,068 $ 29,897,019
================ ===============
Net assets available for Plan benefits $ 45,473,068 $ 29,897,019
================ ===============
</TABLE>
See accompanying Notes to Financial Statements.
4
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CENTOCOR QUALIFIED SAVINGS AND RETIREMENT PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
<TABLE>
<CAPTION>
Years ended December 31,
------------------------------------------
1999 1998
----------------- --------------------
<S> <C> <C>
Additions:
Interest and dividend income $ 1,558,034 $ 984,109
Net appreciation in fair value of
Investments 5,804,353 5,336,589
Contributions:
Employee 5,311,075 3,470,946
Employer 2,465,532 1,485,822
Participant rollovers into Plan 2,502,043 1,756,048
----------------- --------------------
Total additions 17,641,037 13,033,514
Deductions:
Benefits paid (2,064,666) (1,210,687)
Transfer of Centocor Diagnostics'
Net assets out of Plan - (3,958,022)
----------------- --------------------
Total deductions (2,064,666) (5,168,709)
Other income (expense), net (322) (975)
----------------- --------------------
Net increase 15,576,049 7,863,830
Net assets available for Plan benefits:
Beginning of year 29,897,019 22,033,189
----------------- --------------------
End of year $ 45,473,068 $ 29,897,019
================= ====================
</TABLE>
See accompanying Notes to Financial Statements.
5
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CENTOCOR QUALIFIED SAVINGS AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The accompanying financial statements have been prepared on the accrual
basis of accounting.
Investments
The Centocor Qualified Savings and Retirement Plan's (the "Plan")
Investments, administered by The Vanguard Group, Inc. (the "Trustee"),
are stated at fair value based on the market value of the underlying
securities on the last business day of the year.
Johnson & Johnson common shares are carried at market value which is
determined by quoted market prices. Participant loans are valued at
cost which approximates fair value.
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.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and changes therein, and disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of additions and deductions during the reporting
period. Actual results could differ from 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 plan benefits and the statements of changes in net
assets available for plan benefits.
6
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CENTOCOR QUALIFIED SAVINGS AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
Related Party Transactions
Certain Plan investments are shares of mutual funds managed by the
Trustee. Therefore, these transactions qualify as party-in-interest.
Payment of benefits
Benefit payments are recorded when paid.
NOTE 2 DESCRIPTION OF PLAN
The following description of the Plan provides only general
information. Participants should refer to the Plan document for a more
complete description of the Plan's provisions.
General
Effective January 1, 1985, Centocor, Inc. (the "Company") established
the Plan, a defined contribution savings plan subject to the provisions
of the Employee Retirement Income Security Act of 1974 ("ERISA").
Substantially all U.S. employees of the Company, or any of its
subsidiaries or affiliates, are eligible to participate in the Plan.
Employees may participate as of the first date of his/her employment.
Substantially all of the legal, accounting and administrative expenses
associated with Plan operations are currently paid by the Company. On
October 6, 1999, the Company and Johnson & Johnson completed a merger
between the two companies.
Contributions
Eligible employees may make voluntary tax-deferred contributions of 1
to 15 percent of their eligible cash compensation up to certain annual
limits as prescribed by the U.S. Internal Revenue Code. Maximum annual
contributions may be limited at the discretion of the Company.
Employee contributions are invested as directed by the employee in any
of the eight investment programs available under an investment contract
with the Trustee (see Note 3). Company contributions are made
principally in the Johnson & Johnson Common Stock Fund.
The Company may elect, but is not required, to make contributions to
the Plan for the benefit of the participating employees. To date,
contributions have been made as a percentage of the participants'
contributions for the year, as determined by the Company's Board of
Directors. In 1999 and 1998, the Company elected to contribute an
amount equal to 50 percent of the contributions of each employee. The
Company's contribution is based upon annual employee contributions up
to a level of 6 percent of their cash compensation. Additionally, in
1999 and 1998, the Company committed to make a contribution equal to 1%
of each employee's compensation. At December 31, 1999, 26,224 shares of
the Johnson & Johnson
7
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CENTOCOR QUALIFIED SAVINGS AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
Common Stock Fund with a fair value of $94.016 per share determined by
the average trade price for the last twenty days in December and $66.33
in cash was due to the Plan from the Company for its 1999 contribution.
Participants' Accounts
Separate accounts are maintained by the Trustee for each participant.
Each participant's account reflects the participant's contribution, the
Company's contribution, interest, dividends, other income, and gains or
losses earned by each of the investment programs. Investment income is
reinvested in the same programs.
Participants may transfer all or a portion of their accounts among the
eight investment programs available under the Plan by directly
contacting the Trustee. The transfer would take effect immediately upon
the participant's notification of the change.
Vesting
Employee contributions are fully (100%) vested and non-forfeitable.
Employer contributions are fully vested upon death, total and permanent
disability, or attainment of age 65; otherwise, employer contributions
are subject to vesting percentages based on years of service, as
defined by the Plan documents. Employee non-vested forfeitures are used
by the Company to offset employer contributions. The amount of
forfeitures for 1999 and 1998 were $89,241 and $19,011, respectively.
The employer contributions vesting percentages are as follows:
Less than one year of service 0%
One year of service 20%
Two years of service 40%
Three years of service 60%
Four years of service 80%
Five or more years of service 100%
Payment of Benefits
Benefits from the participants' vested accounts are normally payable to
Plan participants upon retirement, death, termination of Company
employment or total and permanent disability. There are no benefits
payable to former employees at December 31, 1999 and 1998.
A participant, while still an employee, may generally withdraw all or a
portion of his vested, non-forfeitable tax-deferred contribution
account if such amount is needed to defray the cost of a medical
emergency, enable the participant to acquire or improve his principal
residence, or assist the participant in preventing eviction or
foreclosure proceedings. Such a withdrawal must first be taken as a
loan as noted below.
8
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CENTOCOR QUALIFIED SAVINGS AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
Any additional funds required will be distributed as a hardship
withdrawal subject to income tax and penalties. Such loan and
withdrawal shall not exceed the amount required to meet the immediate
financial need created by the hardship and shall not be reasonably
available from other sources of the participant.
Loan Provisions
Participants may borrow from their accounts a minimum of $1,000 up to a
maximum equal to the lesser of $50,000 or 50% of their account balance
and may have only one loan outstanding at any point of time. All such
loans bear interest at prevailing market rates. Loans must be repaid
within five years in approximately equal installments or up to 15 years
if used for the purchase of a primary residence. Loans are secured by
the balance in participant accounts.
Transfer of Net Assets
In November 1998 the Company sold its oncology diagnostics business.
Immediately following the closing of the sale, $3,958,022 of the Plan's
net assets related to diagnostic oncology employees were transferred
from the Company's Plan to the plan sponsored by the acquiring company.
NOTE 3 INVESTMENTS
The number of participants in the investment programs at December 31,
1999 and 1998 was as follows:
<TABLE>
<CAPTION>
1999 1998
--------- ---------
<S> <C> <C>
Centocor Stock Fund - 596
Johnson & Johnson Common Stock Fund 947 -
Vanguard Money Market Reserves - Prime Portfolio 261 201
Vanguard Bond Index Fund - Total Bond Market Portfolio 325 270
Vanguard Index Trust - 500 Portfolio 890 664
Vanguard U.S. Growth Portfolio 797 557
Vanguard/Windsor II 532 448
Templeton Foreign Fund 329 290
Fidelity Contrafund 505 387
</TABLE>
The Centocor Stock Fund program consisted of shares of Centocor, Inc.
Common Stock. This fund was available to plan participants through
October 6, 1999. The Johnson & Johnson Common Stock Fund program
consists of shares of Johnson & Johnson Common Stock. The Vanguard
Money Market Reserves - Prime Portfolio invests in short-term,
high-quality money market instruments issued by financial institutions,
non-financial corporations, the U.S. government and federal agencies.
The Vanguard Bond
9
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CENTOCOR QUALIFIED SAVINGS AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
Index Fund - Total Bond Market Portfolio invests in U.S. Treasury,
federal agency, mortgage backed and corporate securities and attempts
to match the performance of the Lehman Brothers Aggregate Bond Index, a
widely recognized measure of the entire taxable U.S. bond market. The
Vanguard Index Trust - 500 Portfolio invests in all of the 500 stocks
that make up the Standard & Poor's 500 Composite Stock Price Index, a
widely recognized benchmark of U.S. stock market performance. The
Vanguard U.S. Growth Portfolio invests in large, high-quality, seasoned
U.S. companies. The Vanguard/Windsor II Fund invests in a diversified
group of out-of-favor stocks of large-capitalization companies. The
Templeton Foreign Fund invests primarily in stocks of companies located
outside the United States. The Fidelity Contrafund invests in
undervalued stocks of foreign and U.S. companies with the goal of
achieving long-term capital appreciation.
Custody of the Plan's investments is maintained by the Trustee. Plan
investments at fair value at December 31, 1999 and 1998 were as
follows:
<TABLE>
<CAPTION>
Name of Issuer and Title of Issue At December 31, 1999 1998
------------- --------------
<S> <C> <C>
Centocor Stock Fund $ - $ 5,340,758
Johnson & Johnson Common Stock Fund 9,204,608 -
Vanguard Money Market Reserves - Prime Portfolio 1,794,942 1,497,042
Vanguard Bond Index Fund - Total Bond Market Portfolio 1,838,203 1,567,086
Vanguard Index Trust - 500 Portfolio 16,135,835 11,555,971
Vanguard U.S. Growth Portfolio 7,400,761 4,800,634
Vanguard/Windsor II 1,762,511 1,314,002
Templeton Foreign Fund 1,488,024 784,293
Fidelity Contrafund 2,793,827 1,346,399
------------- --------------
$ 42,418,711 $ 28,206,185
============= ==============
</TABLE>
10
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CENTOCOR QUALIFIED SAVINGS AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
During 1999 and 1998, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) appreciated in
value as follows:
<TABLE>
<CAPTION>
1999 1998
------------- --------------
<S> <C> <C>
Mutual Funds $ 3,309,486 $ 3,616,403
Common Stock 2,494,867 1,720,186
------------- --------------
$ 5,804,353 $ 5,336,589
============= ==============
</TABLE>
NOTE 4 TAX STATUS
The Internal Revenue Service has determined and informed the Company by
a letter dated April 26, 1995, that the Plan is 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
operated in compliance with applicable requirements of the IRC.
NOTE 5 PLAN TERMINATION
Although it has not expressed an intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and
to terminate the Plan subject to the provisions of ERISA.
11
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CENTOCOR QUALIFIED SAVINGS AND RETIREMENT PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AT DECEMBER 31, 1999
<TABLE>
<CAPTION>
Description of Assets: Cost Market
----------------- -------------------
<S> <C> <C>
Johnson & Johnson Common Stock
Fund* $ 4,544,663 $ 9,204,608
Vanguard Money Market Reserves -
Prime Portfolio* $ 1,794,942 $ 1,794,942
Vanguard Bond Index Fund - Total
Bond Market Portfolio* $ 1,910,280 $ 1,838,203
Vanguard Index Trust - 500 Portfolio* $ 11,294,537 $ 16,135,835
Vanguard U.S. Growth Portfolio* $ 5,686,322 $ 7,400,761
Vanguard/Windsor II* $ 2,112,530 $ 1,762,511
Templeton Foreign Fund $ 1,348,063 $ 1,488,024
Fidelity Contrafund $ 2,578,043 $ 2,793,827
Cost Market
----------------- -------------------
<S> <C> <C>
Loans from participants maturing
through 2014 $ 588,825 $ 588,825
During 1999, interest rates
ranged from 9%-10%.
</TABLE>
* - party-in-interest
12
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Consent of Independent Accountants
We hereby consent to incorporation by reference in Registration Statement on
Form S-8 Nos. 33-00167 and 33-16285 of Centocor, Inc. of our report dated June
9, 2000, relating to the statement of net assets available for plan benefits of
the Centocor Qualified Savings and Retirement Plan as of December 31, 1999, and
the related statement of changes in net assets available for plan benefits for
the year then ended, which report appears in this Form 11-K.
PricewaterhouseCoopers LLP
Philadelphia, PA
June 26, 2000
