<PAGE>
FORM 11-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(MARK ONE)
[X] Annual Report Pursuant to Section 15(d) of the Securities Exchange Act of
1934
For the fiscal year end December 31, 1997
-------------------
Or
[_] Transition Report Pursuant to Section 15(d) of the Securities Exchange Act
of 1934
For the transition period from __________ to __________
Commission file number 0-11103
---------
CENTOCOR QUALIFIED
SAVINGS AND RETIREMENT PLAN
(Full Title of the Plan)
Centocor, Inc.
200 Great Valley Parkway
Malvern, PA 19355
(Name of issuer of the securities held
pursuant to the plan and the address of its
principal executive office)
<PAGE>
Centocor Qualified Savings and Retirement Plan
- ----------------------------------------------
Index to Financial Statements and Schedules
- -------------------------------------------
Page 3 Independent Auditors' Report
Page 4 Statements of Net Assets Available for Plan Benefits as of December
31, 1997 and 1996
Page 5 Statements of Changes in Net Assets Available for Plan Benefits for
the years ended December 31, 1997, 1996 and 1995
Pages 6-18 Notes to Financial Statements
Page 19 Item 27a - Schedule of Assets Held For Investment Purposes
Page 20 Item 27d - Schedule of Reportable Transactions
2
<PAGE>
Independent Auditors' Report
----------------------------
To the Participants of the Centocor Qualified Savings and Retirement Plan
and the 401(k) Administrative Committee of Centocor, Inc.:
We have audited the accompanying Statements of Net Assets Available for Plan
Benefits of the Centocor Qualified Savings and Retirement Plan as of December
31, 1997 and 1996, and the related Statements of Changes in Net Assets Available
for Plan Benefits for each of the years in the three-year period ended December
31, 1997. 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 in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the
Centocor Qualified Savings and Retirement Plan at December 31, 1997 and 1996 and
the changes in net assets available for plan benefits for each of the years in
the three-year period ended December 31, 1997, in conformity with generally
accepted accounting principles.
Our audits were performed 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 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. The supplemental schedules are the
responsibility of the Plan's management. The supplemental schedules 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.
KPMG Peat Marwick LLP
Philadelphia, PA
June 8, 1998
3
<PAGE>
CENTOCOR QUALIFIED SAVINGS AND RETIREMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
<TABLE>
<CAPTION>
December 31,
----------------------------
1997 1996
----------- -----------
<S> <C> <C>
Assets:
CoreStates Money Market Funds and Cash $ 0 $ 19,084
Investments (Notes 3 and 9):
Centocor Stock Fund 4,176,956 4,385,274
Vanguard Money Market Reserves - Prime Portfolio 1,029,947 0
Vanguard Bond Index Fund - Total Bond Market
Portfolio 1,350,588 0
Vanguard Index Trust - 500 Portfolio 9,358,803 0
Vanguard U.S. Growth Portfolio 3,213,685 0
Vanguard/Windsor II 288,676 0
Putnam New Opportunities Class A Shares 717,034 0
Templeton Foreign Fund 816,362 0
CoreFund Treasury Reserve Series A 0 958,949
CoreFund Intermediate Bond Fund Series A 0 1,146,541
CoreFund Equity Index Fund Series A 0 6,815,384
CoreFund International Growth Fund Series A 0 650,973
CoreFund Growth Equity Fund Series A 0 2,395,407
Twentieth Century Vista Fund 0 486,977
------------ ------------
20,952,051 16,839,505
Interest and dividends receivable 0 54,795
Other assets:
Employer's contribution receivable (Note 2) 874,978 319,818
Loans receivable from participants 206,160 173,307
------------ ------------
1,081,138 493,125
------------ ------------
Total assets $ 22,033,189 $ 17,406,509
============ ============
Net assets available for Plan Benefits (Notes 2 and 9) $ 22,033,189 $ 17,406,509
============ ==============
</TABLE>
See accompanying Notes to Financial Statements.
4
<PAGE>
<TABLE>
<CAPTION>
CENTOCOR QUALIFIED SAVINGS AND RETIREMENT PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
Years ended December 31,
---------------------------------------------------------
1997 1996 1995
--------------- ------------------ ------------------
<S> <C> <C> <C>
Additions:
Interest and other income $ 582,969 $ 634,607 $ 424,163
Net appreciation in fair value of
investments (Notes 3 and 9) 2,239,941 2,105,260 3,542,315
Contributions (Note 2):
Employee 2,105,712 1,560,255 1,465,024
Employer 874,978 523,631 511,274
Other income (expense) (31,262) 36,646 (22,338)
------------- -------------- --------------
Total additions 5,772,338 4,860,399 5,920,438
------------- -------------- --------------
Deductions (Note 2):
Benefits paid (1,111,239) (1,554,006) (637,320)
Loan repayments (advances), net (33,441) (70,012) 43,352
Administrative expenses (978) (1,293) (1,305)
------------- -------------- --------------
(1,145,658) (1,625,311) (595,273)
------------- -------------- --------------
Net increase 4,626,680 3,235,088 5,325,165
Net assets available for Plan Benefits:
Beginning of year 17,406,509 14,171,421 8,846,256
------------- -------------- --------------
End of year $ 22,033,189 $ 17,406,509 $ 14,171,421
============= ============== ==============
See accompanying Notes to Financial Statements.
</TABLE>
5
<PAGE>
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") from
July 1, 1997 through December 31, 1997 and administered by CoreStates
Bank, N.A., the former trustee, through June 30, 1997, are stated at fair
value based on the market value of the underlying securities.
Centocor, Inc. ("Centocor" or the "Company") common shares are carried at
market value which is determined by quoted market prices.
Participant loans are valued at cost which approximates fair value.
Accounting 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 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
recorded.
Basis of Security Transactions
Security transactions are accounted for on the trade date.
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.
6
<PAGE>
CENTOCOR QUALIFIED SAVINGS AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
General
Effective January 1, 1985, 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.
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 Company's Common Stock.
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 1997, 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. In 1996 and 1995, the Company elected
to contribute an amount equal to 40 percent of the contributions of each
employee earning less than $70,000 per year and 30 percent of the
contributions of each employee earning $70,000 or more per year.
Additionally, in 1997, 1996 and 1995, the Company committed to make a
contribution equal to 1% of each employee's compensation. At December 31,
1997, 24,021 shares of the Centocor Stock Fund with a fair value of
$36.4234 per share determined by the average trade price for the last
twenty days in December and $50.76 in cash was due to the Plan from the
Company for its 1997 contribution.
7
<PAGE>
CENTOCOR QUALIFIED SAVINGS AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
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 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. Included in plan equity are benefits
payable at December 31, 1996 of $150,240 representing amounts due to former
employees. There are no benefits payable to former employees at December
31, 1997.
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
8
<PAGE>
CENTOCOR QUALIFIED SAVINGS AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
must first be taken as a loan as noted below. 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 up to 50 percent of their vested account balance
not to exceed $50,000 and may have only one loan outstanding at any point
of time. All such loans bear interest at prevailing market rates.
NOTE 3 INVESTMENTS
The number of employees participating in the investment programs at
December 31, 1997 was as follows:
<TABLE>
<S> <C>
Centocor Stock Fund 432
Vanguard Money Market Reserves - Prime Portfolio 187
Vanguard Bond Index Fund - Total Bond Market Portfolio 240
Vanguard Index Trust - 500 Portfolio 451
Vanguard U.S. Growth Portfolio 375
Vanguard/Windsor II 252
Putnam New Opportunities Class A Shares 287
Templeton Foreign Fund 240
</TABLE>
The Centocor Stock Fund program consists of shares of Centocor, Inc. Common
Stock. The Vanguard Money Market Reserves - Prime Portfolio invests in
short-term, high-quality money market instruments issued by financial
institutions, nonfinancial corporations, the U.S. government and federal
agencies. The Vanguard Bond 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-
9
<PAGE>
CENTOCOR QUALIFIED SAVINGS AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
favor stocks of large-capitalization companies. The Putnam New
Opportunities Class A Shares invests in a portfolio of stocks in certain
emerging industry groups. The Templeton Foreign Fund invests primarily in
stocks of companies located outside the United States.
Custody of the Plan's investments is maintained by the Trustee. Plan
investments at December 31, 1997 and 1996 were as follows (see also Note
9):
<TABLE>
<CAPTION>
Name of Issuer Number of
and Title of Issue Shares Cost Fair Value
------------------
At December 31, 1997
- --------------------
<S> <C> <C> <C>
Centocor Stock Fund 382,856 $2,473,011 $ 4,176,956
Vanguard Money Market Reserves - Prime Portfolio 1,029,947 1,029,947 1,029,947
Vanguard Bond Index Fund - Total Bond Market Portfolio 133,854 1,317,723 1,350,588
Vanguard Index Trust - 500 Portfolio 103,906 8,686,191 9,358,803
Vanguard U.S. Growth Portfolio 111,975 3,137,031 3,213,685
Vanguard/Windsor II 10,087 297,432 288,676
Putnam New Opportunities Class A Shares 14,739 699,939 717,034
Templeton Foreign Fund 82,046 940,529 816,362
----------
$20,952,051
===========
<CAPTION>
Name of Issuer Number of
and Title of Issue Shares Cost Fair Value
------------------
At December 31, 1996
- --------------------
<S> <C> <C> <C>
Centocor Stock Fund 122,665 $2,014,233 $4,385,274
CoreFund Treasury Reserve Series A 958,949 958,949 958,949
CoreFund Intermediate Bond Fund Series A 116,282 1,153,285 1,146,541
CoreFund Equity Index Fund Series A 217,813 4,972,137 6,815,384
CoreFund International Growth Fund Series A 49,731 646,438 650,973
CoreFund Growth Equity Fund Series A 178,230 2,106,668 2,395,407
Twentieth Century Vista Fund 33,561 520,755 486,977
----------
$16,839,505
===========
</TABLE>
10
<PAGE>
CENTOCOR QUALIFIED SAVINGS AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
Net realized gains of $4,336,733 in 1997 resulted principally from sales in
the CoreFund Equity Index Fund, the CoreFund Growth Equity Fund and shares
of the Centocor Stock Fund.
Net realized gains of $1,182,855 in 1996 resulted principally from sales in
the CoreFund Equity Index Fund, the CoreFund Growth Equity Fund and shares
of the Centocor Stock Fund.
Net realized gains of $57,260 in 1995 resulted principally from sales in
the CoreFund Equity Index Fund and shares of the Centocor Stock Fund.
The change in net unrealized appreciation (depreciation) on investments as
of and for the years ended December 31, 1997, 1996 and 1995 was as follows
(see Note 9):
<TABLE>
<CAPTION>
CoreFund CoreFund CoreFund CoreFund Twentieth
Centocor Intermediate Equity International Growth Equity Century
Stock Bond Fund Index Fund Fund Fund Vista
Fund Series A Series A Series A Series A Fund
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1994 231,627 (56,144) (101,226) (1,547) (13,130) -
Appreciation 2,170,773 59,851 1,010,900 31,117 212,414 -
--------- ------------ ------------ ------------- -------------- -----------
Balance at December 31, 1995 2,402,400 3,707 909,674 29,570 199,284 -
Appreciation (depreciation) (31,359) (10,451) 933,573 (25,035) 89,455 (33,778)
--------- ------------ ------------ ------------- -------------- -----------
Balance at December 31, 1996 2,371,041 (6,744) 1,843,247 4,535 288,739 (33,778)
Appreciation (depreciation) (667,096) 6,744 (1,843,247) (4,535) (288,739) 33,778
----------- ------------ ------------ ------------- -------------- -----------
Balance at December 31, 1997 1,703,945 - - - - -
=========== ============ ============ ============= ============== ===========
<CAPTION>
Vanguard Bond Vanguard
Index Fund - Index Vanguard Putnam New Templeton
Total Bond Trust - 500 U.S. Growth Vanguard/ Opportunities Foreign
Market Portfolio Portfolio Portfolio Windsor II Class A Fund
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1996 - - - - - -
Appreciation (depreciation) 32,865 672,612 76,654 (8,756) 17,095 (124,167)
----------- ------------ ------------ ------------- -------------- -----------
Balance at December 31, 1997 32,865 672,612 76,654 (8,756) 17,095 (124,167)
=========== ============ ============ ============= ============== ===========
</TABLE>
11
<PAGE>
CENTOCOR QUALIFIED SAVINGS AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
NOTE 4 FEDERAL INCOME TAXES
The Internal Revenue Service has made a determination dated April 26,
1995 that the Plan has complied with the requirements of ERISA and
therefore is qualified under the provisions of Section 401(a) of the
Internal Revenue Code and is exempt from Federal income tax.
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.
NOTE 6 FORM 5500
The Plan had not yet prepared its Form 5500 for the year ended December
31, 1997 as of the date of the audit report. The Plan has filed an
extension until September 15, 1998 to file its 1997 Form 5500.
NOTE 7 PLAN AMENDMENTS/CHANGES
Effective July 1, 1997, the Company changed its investment administrator
and trustee from Corestates, Bank, N.A. to The Vanguard Group. As a
result, new investments have been offered effective July 1, 1997 and the
record keeping for the plan is being performed by The Vanguard Group.
Contributions and vesting schedules will remain the same, however, the
plan changed from quarterly valuation to daily valuation. These changes
provide additional services and flexibility to the participants of the
Plan.
12
<PAGE>
CENTOCOR QUALIFIED SAVINGS AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
Note 9 Allocation of Plan Assets to Investment Programs
<TABLE>
<CAPTION>
December 31, 1997
-------------------------------------------------------------------------------------
VANGUARD
VANGUARD BOND INDEX
MONEY MARKET CENTOCOR PARTICIPANT FUND - TOTAL VANGUARD
RESERVES - STOCK LOAN BOND MARKET INDEX TRUST -
ASSETS PRIME PORTFOLIO FUND FUND PORTFOLIO 500 PORTFOLIO
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
VANGUARD MONEY MARKET RESERVES -
PRIME PORTFOLIO 1,029,947 0 0 0 0
CENTOCOR STOCK FUND 0 4,176,956 0 0 0
VANGUARD BOND INDEX FUND - TOTAL BOND
MARKET PORTFOLIO 0 0 0 1,350,588 0
VANGUARD INDEX TRUST - 500 PORTFOLIO 0 0 0 0 9,358,803
VANGUARD U.S. GROWTH PORTFOLIO 0 0 0 0 0
VANGUARD/WINDSOR II 0 0 0 0 0
PUTNAM NEW OPPORTUNITIES CLASS A SHARE 0 0 0 0 0
TEMPLETON FOREIGN FUND 0 0 0 0 0
EMPLOYER'S CONTRIBUTION RECEIVABLE 0 874,978 0 0 0
LOANS RECEIVABLE FROM PARTICIPANTS 0 0 206,160 0 0
-------------------------------------------------------------------------------------
TOTAL ASSETS 1,029,947 5,051,934 206,160 1,350,588 9,358,803
=====================================================================================
</TABLE>
<TABLE>
<CAPTION>
December 31, 1997
---------------------------------------------------------------------------
VANGUARD PUTNAM NEW TEMPLETON
U.S. GROWTH VANGUARD/ OPPORTUNITIES FOREIGN
PORTFOLIO WINDSOR II CLASS A SHARES FUND TOTAL
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
VANGUARD MONEY MARKET RESERVES -
PRIME PORTFOLIO 0 0 0 0 1,029,947
CENTOCOR STOCK FUND 0 0 0 0 4,176,956
VANGUARD BOND INDEX FUND - TOTAL BOND
MARKET PORTFOLIO 0 0 0 0 1,350,588
VANGUARD INDEX TRUST - 500 PORTFOLIO 0 0 0 0 9,358,803
VANGUARD U.S. GROWTH PORTFOLIO 3,213,685 0 0 0 3,213,685
VANGUARD/WINDSOR II 0 288,676 0 0 288,676
PUTNAM NEW OPPORTUNITIES CLASS A SHARE 0 0 717,034 0 717,034
TEMPLETON FOREIGN FUND 0 0 0 816,362 816,362
EMPLOYER'S CONTRIBUTION RECEIVABLE 0 0 0 0 874,978
LOANS RECEIVABLE FROM PARTICIPANTS 0 0 0 0 206,160
---------------------------------------------------------------------------
TOTAL ASSETS 3,213,685 288,676 717,034 816,362 22,033,189
===========================================================================
</TABLE>
13
<PAGE>
CENTOCOR QUALIFIED SAVINGS AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
Note 9 Allocation of Plan Assets to Investment Programs
<TABLE>
<CAPTION>
December 31, 1996
--------------------------------------------------------------------------------
COREFUND COREFUND COREFUND
TREASURY CENTOCOR INTERMEDIATE EQUITY
RESERVE STOCK LOAN BOND FUND INDEX FUND
ASSETS SERIES A FUND FUND SERIES A SERIES A
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CORESTATES MONEY MARKET FUNDS AND CASH 3,933 6,827 5,127 0 3
CENTOCOR STOCK FUND 0 4,367,399 0 0 0
COREFUND TREASURY RESERVE SERIES A 948,979 9,970 0 0 0
COREFUND INTERMEDIATE BOND FUND SERIES A 0 0 0 1,146,541 0
COREFUND EQUITY INDEX FUND SERIES A 0 0 0 0 6,815,384
COREFUND INTERNATIONAL GROWTH FUND SERIES A 0 0 0 0 0
COREFUND GROWTH EQUITY FUND SERIES A 0 0 0 0 0
TWENTIETH CENTURY VISTA FUND 0 0 0 0 0
INTEREST AND DIVIDENDS RECEIVABLE 0 0 0 5,742 28,490
EMPLOYER'S CONTRIBUTION RECEIVABLE 0 319,818 0 0 0
LOANS RECEIVABLE FROM PARTICIPANTS 0 0 173,307 0 0
---------------------------------------------------------------------------------
TOTAL ASSETS 952,912 4,704,014 178,434 1,152,283 6,843,877
</TABLE>
<TABLE>
<CAPTION>
---------------------------------------------------------------------------
COREFUND COREFUND COREFUND TWENTIETH
INTERNATIONAL GROWTH CONTRIBUTION/ CENTURY
GROWTH EQUITY DISTRIBUTION VISTA
SERIES A SERIES A ACCOUNT FUND TOTAL
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CORESTATES MONEY MARKET FUNDS AND CASH 0 12 3,181 1 19,084
CENTOCOR STOCK FUND 0 0 17,875 0 4,385,274
COREFUND TREASURY RESERVE SERIES A 0 0 0 0 958,949
COREFUND INTERMEDIATE BOND FUND SERIES A 0 0 0 0 1,146,541
COREFUND EQUITY INDEX FUND SERIES A 0 0 0 0 6,815,384
COREFUND INTERNATIONAL GROWTH FUND SERIES A 650,973 0 0 0 650,973
COREFUND GROWTH EQUITY FUND SERIES A 0 2,395,407 0 0 2,395,407
TWENTIETH CENTURY VISTA FUND 0 0 0 486,977 486,977
INTEREST AND DIVIDENDS RECEIVABLE 18,389 2,174 0 0 54,795
EMPLOYER'S CONTRIBUTION RECEIVABLE 0 0 0 0 319,818
LOANS RECEIVABLE FROM PARTICIPANTS 0 0 0 0 173,307
--------------------------------------------------------------------------
TOTAL ASSETS 669,362 2,397,593 21,056 486,978 17,406,509
</TABLE>
14
<PAGE>
CENTOCOR QUALIFIED SAVINGS AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
Note 10 Allocation of Plan Income and Changes in Plan Equity to
Investment Programs
<TABLE>
<CAPTION>
For the Period July 1, 1997 through December 31, 1997
----------------------------------------------------------------------------------------
VANGUARD
VANGUARD BOND INDEX
MONEY MARKET CENTOCOR PARTICIPANT FUND - TOTAL VANGUARD
RESERVES - STOCK LOAN BOND MARKET INDEX TRUST -
PRIME PORTFOLIO FUND FUND PORTFOLIO 500 PORTFOLIO
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INTEREST & OTHER INCOME 26,362 3 6,770 41,358 137,024
NET APPRECIATION (DEPRECIATION)
IN FAIR VALUE OF INVESTMENTS 0 133,305 0 33,225 702,341
CONTRIBUTIONS:
EMPLOYEE 134,950 100,260 0 51,552 269,716
EMPLOYER 0 874,978 0 0 0
DEDUCTIONS:
BENEFITS PAID (5,082) (96,558) (2,187) (6,704) (201,870)
LOAN REPAYMENTS/(ADVANCES) (51,354) (243) 59,602 (533) (21,152)
NET INTERFUND INVESTMENT REDIRECTION (155) (62,043) 0 7,887 (135,027)
--------------------------------------------------------------------------
NET INCREASE 104,721 949,702 64,185 126,785 751,032
TRANSFERS IN FROM FORMER TRUSTEE 925,226 4,102,232 141,975 1,223,803 8,607,771
--------------------------------------------------------------------------
PLAN EQUITY AT END OF PERIOD 1,029,947 5,051,934 206,160 1,350,588 9,358,803
==========================================================================
<CAPTION>
For the Period July 1, 1997 through December 31, 1997
--------------------------------------------------------------------------
VANGUARD PUTNAM NEW TEMPLETON
U.S. GROWTH VANGUARD/ OPPORTUNITIES FOREIGN
PORTFOLIO WINDSOR II CLASS A SHARES FUND TOTAL
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INTEREST & OTHER INCOME 124,552 22,424 43,600 85,725 487,818
NET APPRECIATION (DEPRECIATION)
IN FAIR VALUE OF INVESTMENTS 85,220 (8,607) 18,610 (126,350) 837,744
CONTRIBUTIONS:
EMPLOYEE 177,176 144,482 135,570 82,129 1,095,835
EMPLOYER 0 0 0 0 874,978
DEDUCTIONS:
BENEFITS PAID (155,392) (2,944) (7,369) (10,950) (489,056)
LOAN REPAYMENTS/(ADVANCES) 1,412 5,983 5,312 973 0
NET INTERFUND INVESTMENT REDIRECTION 31,122 127,338 9,091 21,787 0
---------------------------------------------------------------------------
NET INCREASE 264,090 288,676 204,814 53,314 2,807,319
TRANSFERS IN FROM FORMER TRUSTEE 2,949,595 0 512,220 763,048 19,225,870
---------------------------------------------------------------------------
PLAN EQUITY AT END OF PERIOD 3,213,685 288,676 717,034 816,362 22,033,189
===========================================================================
</TABLE>
15
<PAGE>
CENTOCOR QUALIFIED SAVINGS AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
Note 10 Allocation of Plan Income and Changes in Plan Equity to
Investment Programs
<TABLE>
<CAPTION>
For the Period January 1, 1997 through June 30, 1997
----------------------------------------------------------------------------------------
COREFUND COREFUND COREFUND COREFUND
TREASURY CENTOCOR PARTICIPANT INTERMEDIATE EQUITY INTERNATIONAL
RESERVE STOCK LOAN BOND FUND INDEX FUND GROWTH
SERIES A FUND FUND SERIES A SERIES A SERIES A
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INTEREST & OTHER INCOME 22,104 457 6,479 35,381 27,612 64
NET APPRECIATION (DEPRECIATION)
IN FAIR VALUE OF INVESTMENTS 0 (411,690) 0 (3,235) 1,424,512 88,759
CONTRIBUTIONS:
EMPLOYEE 62,821 65,037 0 56,933 384,163 84,939
OTHER INCOME (EXPENSE) 0 (13,387) 0 0 0 0
DEDUCTIONS:
BENEFITS PAID (65,447) (49,239) 0 (86,454) (168,505) (132,809)
LOAN ADVANCES 0 0 (33,441) 0 0 0
ADMINISTRATIVE EXPENSES 0 0 (978) 0 0 0
NET INTERFUND INVESTMENT REDIRECTION (50,547) (192,960) (8,519) 68,895 96,112 52,733
-----------------------------------------------------------------------------------
NET INCREASE (DECREASE) (31,069) (601,782) (36,459) 71,520 1,763,894 93,686
PLAN EQUITY AT BEGINNING OF PERIOD 952,912 4,704,014 178,434 1,152,283 6,843,877 669,362
TRANSFERS OUT TO SUCCESSOR TRUSTEE (921,843) (4,102,232) (141,975) (1,223,803) (8,607,771) (763,048)
-----------------------------------------------------------------------------------
PLAN EQUITY AT END OF PERIOD 0 0 0 0 0 0
===================================================================================
<CAPTION>
For the Period January 1, 1997 through June 30, 1997
------------------------------------------------------------
COREFUND TWENTIETH
GROWTH COREFUND CENTURY
EQUITY CONTRIBUTION/ VISTA
SERIES A DISTRIBUTION FUND TOTAL
------------------------------------------------------------
<S> <C> <C> <C> <C>
INTEREST & OTHER INCOME 2,994 13 47 95,151
NET APPRECIATION (DEPRECIATION)
IN FAIR VALUE OF INVESTMENTS 371,486 0 (67,635) 1,402,197
CONTRIBUTIONS:
EMPLOYEE 236,048 0 119,936 1,009,877
OTHER INCOME (EXPENSE) 0 (17,875) 0 (31,262)
DEDUCTIONS:
BENEFITS PAID (110,165) 0 (9,564) (622,183)
LOAN ADVANCES 0 0 0 (33,441)
ADMINISTRATIVE EXPENSES 0 0 0 (978)
NET INTERFUND INVESTMENT REDIRECTION 51,639 189 (17,542) 0
------------------------------------------------------------
NET INCREASE (DECREASE) 552,002 (17,673) 25,242 1,819,361
PLAN EQUITY AT BEGINNING OF PERIOD 2,397,593 21,056 486,978 17,406,509
TRANSFERS OUT TO SUCCESSOR TRUSTEE (2,949,595) (3,383) (512,220) (19,225,870)
------------------------------------------------------------
PLAN EQUITY AT END OF PERIOD 0 0 0 0
============================================================
</TABLE>
16
<PAGE>
CENTOCOR QUALIFIED SAVINGS AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Note 10 Allocation of Plan Income and Changes in Plan Equity to Investment Programs
Year ended December 31, 1996
------------------------------------------------------------------------------
COREFUND COREFUND COREFUND COREFUND
TREASURY CENTOCOR INTERMEDIATE EQUITY INTERNATIONAL
RESERVE STOCK LOAN BOND FUND INDEX FUND GROWTH
SERIES A FUND FUND SERIES A SERIES A SERIES A
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INTEREST & OTHER INCOME 46,540 2,534 8,135 60,408 159,992 58,615
NET APPRECIATION (DEPRECIATION)
IN FAIR VALUE OF INVESTMENTS 0 929,463 0 (11,606) 1,090,939 (6,308)
CONTRIBUTIONS:
EMPLOYEE 85,287 247,196 0 92,157 533,457 112,261
EMPLOYER 0 523,631 0 0 0 0
OTHER INCOME (EXPENSE) 0 (32,487) 0 0 0 0
DEDUCTIONS:
BENEFITS PAID (99,571) (358,319) 0 (110,901) (646,210) (115,260)
LOAN ADVANCES 0 0 (70,012) 0 0 0
ADMINISTRATIVE EXPENSES 0 0 (1,293) 0 0 0
NET INTERFUND INVESTMENT REDIRECTION (53,255) (2,272,452) 110,136 (135,010) 770,054 306,378
----------------------------------------------------------------------------
NET INCREASE (DECREASE) (20,999) (960,434) 46,966 (104,952) 1,908,232 355,686
PLAN EQUITY AT BEGINNING OF PERIOD 973,911 5,664,448 131,468 1,257,235 4,935,645 313,676
----------------------------------------------------------------------------
PLAN EQUITY AT END OF PERIOD 952,912 4,704,014 178,434 1,152,283 6,843,877 669,362
============================================================================
</TABLE>
CENTOCOR QUALIFIED SAVINGS AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Note 10 Allocation of Plan Income and Changes in Plan Equity to Investment Programs
Year ended December 31, 1996
--------------------------------------------------------
COREFUND TWENTIETH
GROWTH COREFUND CENTURY
EQUITY CONTRIBUTION/ VISTA
SERIES A DISTRIBUTION FUND TOTAL
--------------------------------------------------------
<S> <C> <C> <C> <C>
INTEREST & OTHER INCOME 261,348 641 36,394 634,607
NET APPRECIATION (DEPRECIATION)
IN FAIR VALUE OF INVESTMENTS 136,612 0 (33,840) 2,105,260
CONTRIBUTIONS:
EMPLOYEE 346,090 0 143,807 1,560,255
EMPLOYER 0 0 0 523,631
OTHER INCOME (EXPENSE) 0 69,133 0 36,646
DEDUCTIONS:
BENEFITS PAID (212,073) 0 (11,672) (1,554,006)
LOAN ADVANCES 0 0 0 (70,012)
ADMINISTRATIVE EXPENSES 0 0 0 (1,293)
NET INTERFUND INVESTMENT REDIRECTION 988,914 (67,054) 352,289 0
-----------------------------------------------------
NET INCREASE (DECREASE) 1,520,891 2,720 486,978 3,235,088
PLAN EQUITY AT BEGINNING OF PERIOD 876,702 18,336 0 14,171,421
-----------------------------------------------------
PLAN EQUITY AT END OF PERIOD 2,397,593 21,056 486,978 17,406,509
=====================================================
</TABLE>
17
<PAGE>
CENTOCOR QUALIFIED SAVINGS AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Note 10 Allocation of Plan Income and Changes in Plan Equity to Investment Programs
Year ended December 31, 1995
-------------------------------------------------------------------------------------
COREFUND COREFUND COREFUND COREFUND
TREASURY CENTOCOR INTERMEDIATE EQUITY INTERNATIONAL
RESERVE STOCK LOAN BOND FUND INDEX FUND GROWTH
SERIES A FUND FUND SERIES A SERIES A SERIES A
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INTEREST & OTHER INCOME 49,704 450 14,275 70,944 236,371 10,192
NET APPRECIATION IN FAIR VALUE
OF INVESTMENTS 0 2,188,065 0 53,559 1,047,993 31,540
CONTRIBUTIONS:
EMPLOYEE 127,589 200,024 0 138,142 510,484 118,835
EMPLOYER 1,485 469,797 0 5,383 13,140 4,173
OTHER INCOME (EXPENSE) 0 12,941 0 0 0 0
DEDUCTIONS:
BENEFITS PAID (38,599) (169,136) 9,660 (65,418) (295,346) (3,044)
LOAN REPAYMENTS 0 0 43,352 0 0 0
ADMINISTRATIVE EXPENSES 0 0 (1,305) 0 0 0
NET INTERFUND INVESTMENT REDIRECTION (26,846) 401,742 (46,120) 19,689 5,932 (59,783)
----------------------------------------------------------------------------
NET INCREASE (DECREASE) 113,333 3,103,883 19,862 222,299 1,518,574 101,913
PLAN EQUITY AT BEGINNING OF PERIOD 860,578 2,560,565 111,606 1,034,936 3,417,071 211,763
----------------------------------------------------------------------------
PLAN EQUITY AT END OF PERIOD 973,911 5,664,448 131,468 1,257,235 4,935,645 313,676
============================================================================
</TABLE>
<TABLE>
<CAPTION>
Year ended December 31, 1995
-------------------------------------
COREFUND
GROWTH COREFUND
EQUITY CONTRIBUTION/
SERIES A DISTRIBUTION TOTAL
-------------------------------------
<S> <C> <C> <C>
INTEREST & OTHER INCOME 41,541 686 424,163
NET APPRECIATION IN FAIR VALUE
OF INVESTMENTS 221,158 0 3,542,315
CONTRIBUTIONS:
EMPLOYEE 369,950 0 1,465,024
EMPLOYER 17,296 0 511,274
OTHER INCOME (EXPENSE) 0 (35,279) (22,338)
DEDUCTIONS:
BENEFITS PAID (71,211) (4,226) (637,320)
LOAN REPAYMENTS 0 0 43,352
ADMINISTRATIVE EXPENSES 0 0 (1,305)
NET INTERFUND INVESTMENT REDIRECTION (300,510) 5,896 0
-------------------------------------
NET INCREASE (DECREASE) 278,224 (32,923) 5,325,165
PLAN EQUITY AT BEGINNING OF PERIOD 598,478 51,259 8,846,256
-------------------------------------
PLAN EQUITY AT END OF PERIOD 876,702 18,336 14,171,421
=====================================
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
CENTOCOR
QUALIFIED SAVINGS AND RETIREMENT PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
YEAR ENDED DECEMBER 31, 1997
Description of Assets: Number of Shares Cost Market
- --------------------- ---------------- ---- ------
<S> <C> <C> <C>
Centocor Stock Fund 382,856 $2,473,011 $4,176,956
Vanguard Money Market
Reserves - Prime Portfolio 1,029,947 $1,029,947 $1,029,947
Vanguard Bond Index Fund -
Total Bond Market Portfolio 133,854 $1,317,723 $1,350,588
Vanguard Index Trust - 500
Portfolio 103,906 $8,686,191 $9,358,803
Vanguard U.S. Growth Portfolio 111,975 $3,137,031 $3,213,685
Vanguard/Windsor II 10,087 $ 297,432 $ 288,676
Putnam New Opportunities
Class A Shares 14,739 $ 699,939 $ 717,034
Templeton Foreign Fund 82,046 $ 940,529 $ 816,362
Number of Participants Cost Market
---------------------- ---- ------
Loans from participants 42 $ 206,160 $ 206,160
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
CENTOCOR
QUALIFIED SAVINGS AND RETIREMENT PLAN
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1997
Identity of Party Purchase Selling Cost Net
Involved Description of Assets Price Price of Asset Gain/(Loss)
- ----------------- --------------------- -------- ------- -------- -----------
<S> <C> <C> <C> <C> <C>
CoreStates Bank NA Centocor Stock Fund 512,685 314,001 153,600 160,401
CoreStates Bank NA CoreFund Treasury
Reserve Series A 1,321,764 2,270,743 2,270,743 0
CoreStates Bank NA CoreFund Intermediate
Bond Fund Series A 161,214 1,304,520 1,314,499 (9,979)
CoreStates Bank NA CoreFund Equity Index
Fund Series A 697,643 8,937,539 5,669,780 3,267,759
CoreStates Bank NA CoreFund International
Growth Fund Series A 164,618 904,350 811,056 93,294
CoreStates Bank NA CoreFund Growth
Equity Fund Series A 309,151 3,076,044 2,415,819 660,225
CoreStates Bank NA Twentieth Century Vista Fund 292,280 711,622 813,035 (101,413)
CoreStates Bank NA CoreFund Liquidity Fund 9,764,155 9,776,787 9,776,787 0
The Vanguard Group, Vanguard Money Market
Inc. Reserves -
Prime Portfolio 1,107,817 104,232 104,232 0
The Vanguard Group, Centocor Stock Fund 2,596,241 473,890 245,580 228,310
Inc.
The Vanguard Group, Vanguard Bond Index Fund -
Inc. Total Bond Market Portfolio 1,295,448 19,803 19,443 360
The Vanguard Group, Vanguard Index Trust -
Inc. 500 Portfolio 9,056,428 566,719 536,990 29,729
The Vanguard Group, Vanguard U.S. Growth Portfolio 3,249,555 254,208 245,642 8,566
Inc.
The Vanguard Group, Vanguard/Windsor II 279,440 4,730 4,581 149
Inc.
The Vanguard Group, Putnam New Opportunities Class A
Inc. Shares 704,385 51,076 49,561 1,515
The Vanguard Group, Templeton Foreign Fund 882,800 23,630 25,813 (2,183)
Inc.
</TABLE>
20
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Board
of Directors has duly caused this Annual Report to be signed by the undersigned
thereunto duly authorized.
CENTOCOR QUALIFIED SAVINGS
AND RETIREMENT PLAN
June 8, 1998 By: /s/ David P. Holveck
---------------------
David P. Holveck
Chief Executive Officer, and
Director (principal executive
officer)
<PAGE>
Exhibit 23
Consent of Independent Auditors
The Board of Directors
Centocor, Inc.:
We consent to incorporation by reference in Registration Statement Nos. 33-00167
and 33-16285 on Form S-8 of Centocor, Inc. of our report dated June 8, 1998,
relating to the statements of net assets available for plan benefits of the
Centocor Qualified Savings and Retirement Plan as of December 31, 1997 and 1996,
and the related statements of changes in net assets available for plan benefits
for each of the years in the three-year period ended December 31, 1997, which
report appears in the December 31, 1997 annual report on Form 11-K of the
Centocor Qualified Savings and Retirement Plan.
KPMG Peat Marwick LLP
Philadelphia, Pennsylvania
June 8, 1998
