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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended January 2, 1994 Commission file number 1-3215
J O H N S O N & J O H N S O N
(Exact name of registrant as specified in its charter)
New Jersey 22-1024240
(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 (908) 524-0400
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT
Name of each exchange on
Title of each class which registered
------------------- ------------------------
Common Stock, Par Value $1.00 New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
---- ----
The aggregate market value of the voting stock held by non-affiliates of
the registrant on March 1, 1994 was approximately $23.6 billion.
On March 1, 1994 there were 643,161,600 shares of Common Stock
outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Parts I and II: Portions of registrant's annual report to stockholders
for fiscal year 1993.
Part III: Portions of registrant's proxy statement for its 1994
annual meeting of stockholders.
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K / X /
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PART I
Item Page
---- -----
1. Business................................................ 2
General........................................ 2
Segments of Business; Geographic Areas......... 2
Consumer....................................... 2
Pharmaceutical................................. 3
Professional................................... 3
International.................................. 3
Raw Materials.................................. 3
Patents and Trademarks......................... 4
Seasonality.................................... 4
Competition.................................... 4
Research....................................... 4
Environment.................................... 4
Regulation..................................... 5
2. Properties.............................................. 6
3. Legal Proceedings....................................... 7
4. Submission of Matters to a Vote of Security Holders..... 7
Executive Officers of the Registrant........................ 7
PART II
5. Market for Registrant's Common Equity and Related
Stockholder Matters.................................... 9
6. Selected Financial Data................................. 9
7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.................... 9
8. Financial Statements and Supplementary Data............. 9
9. Disagreements on Accounting and Financial Disclosure.... 9
PART III
10. Directors and Executive Officers of the Registrant...... 9
11. Executive Compensation.................................. 10
12. Security Ownership of Certain Beneficial Owners
and Management......................................... 10
13. Certain Relationships and Related Transactions.......... 10
PART IV
14. Exhibits, Financial Statement Schedules, and Reports
on Form 8-K........................................... 10
Signatures.................................................. 17
Independent Auditor's Report and Consent.................... 19
Exhibit Index............................................... 20
Form 10-Q Quarterly Reports Available. A copy of Johnson & Johnson's
Quarterly Report on Form 10-Q for any of the first three quarters of the
current fiscal year, without exhibits, will be provided without charge to any
stockholder submitting a written request to the Vice President, Finance at the
principal executive offices of the company. Each report will be available
about 45 days after the end of the quarter to which it relates.
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PART I
Item 1. BUSINESS
GENERAL
Johnson & Johnson, employing approximately 81,600 people worldwide, is
engaged in the manufacture and sale of a broad range of products in the health
care field in many countries of the world. Johnson & Johnson's primary
interest, both historically and currently, has been in products related to
health and well-being.
Johnson & Johnson is organized on the principles of decentralized
management. The Executive Committee of Johnson & Johnson is the principal
management group responsible for the operations of Johnson & Johnson. In
addition, three Executive Committee members are Chairmen of Sector Operating
Committees, which are comprised of managers who represent key operations within
the sector, as well as management expertise in other specialized functions.
These Committees oversee and coordinate the activities of domestic and
international companies related to each of the consumer, pharmaceutical,
professional and diagnostic businesses. Operating management of each company
is headed by a President, General Manager or Managing Director who reports
directly or through a Company Group Chairman. In line with this policy of
decentralization, each international subsidiary is, with some exceptions,
managed by citizens of the country where it is located.
SEGMENTS OF BUSINESS; GEOGRAPHIC AREAS
Johnson & Johnson's worldwide business is divided into three segments:
Consumer, Pharmaceutical and Professional. Johnson & Johnson further
categorizes its sales and operating profit by major geographic areas of the
world. The narrative and tabular (but not the graphic) descriptions of
segments and geographic categories captioned "Management's Discussion and
Analysis of Results of Operations and Financial Condition -- Segments of
Business, Consumer, Pharmaceutical, Professional and Geographic Areas" on pages
26 through 28 and 41 of Johnson & Johnson's annual report to stockholders for
fiscal year 1993 are incorporated herein by reference thereto.
CONSUMER
The Consumer segment's principal products are toiletries and hygienic
products, including dental and baby care products, first aid products,
nonprescription drugs, sanitary protection products and adult incontinence
products. Major brands include ACT Fluoride Rinse; BAND-AID Brand Adhesive
Bandages; CAREFREE Panty Shields; 'o.b.' Tampons; CLEAN & CLEAR Skin Care
Products; SHOWER TO SHOWER toiletries products; STAYFREE and SURE & NATURAL
sanitary protection products; IMODIUM A-D, an antidiarrheal; JOHNSON'S baby
products; MONISTAT 7, an over-the counter remedy for vaginal yeast infections;
MYLANTA gastrointestinal products from the Johnson & Johnson and Merck & Co.,
Inc. joint venture; PEDIACARE children's cold and allergy medications; PENATEN
and NATUSAN baby toiletries; PIZ BUIN and SUNDOWN sun care products; PREVENT
and REACH toothbrushes; SERENITY incontinence products; and the broad family of
TYLENOL acetaminophen products. These products are marketed principally to the
general public and distributed both to wholesalers and directly to independent
and chain retail outlets.
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PHARMACEUTICAL
The Pharmaceutical segment's principal worldwide franchises are in the
allergy and asthma, antifungal, central nervous system, contraceptive,
dermatology, gastrointestinal, immunobiology and biotech fields. These
products are distributed both directly and through wholesalers for use by
health care professionals and the general public. Prescription drugs include
DURAGESIC, a transdermal patch for chronic pain; EPREX (sold in the U.S. as
PROCRIT), a biotechnology derived version of the human hormone erythropoietin,
which stimulates red blood cell production; ERGAMISOL, a colon cancer drug;
FLOXIN, an antibacterial; HISMANAL, the once-a-day less sedating antihistamine;
IMODIUM, an antidiarrheal; LEUSTATIN, for hairy cell leukemia; MOTILIUM, a
gastrointestinal mobilizer; NIZORAL, SPORANOX and TERAZOL, antifungals;
ORTHOCLONE OKT-3, for reversing the rejection of kidney transplants;
ORTHO-NOVUM group of oral contraceptives; PREPULSID (sold in the U.S. as
PROPULSID), a gastrointestinal prokinetic; and RETIN-A, a dermatological cream
for acne.
PROFESSIONAL
The Professional segment includes suture and mechanical wound closure
products, less-invasive surgical instruments, dental products, diagnostic
products, medical equipment and devices, ophthalmic products, surgical
instruments, joint replacements and products for wound management and infection
prevention. These products are used principally in the professional fields by
physicians, dentists, nurses, therapists, hospitals, diagnostic laboratories
and clinics. Distribution to these markets is done both directly and through
surgical supply and other dealers.
INTERNATIONAL
The international business of Johnson & Johnson is conducted by
subsidiaries manufacturing in 43 countries outside the United States and
selling in most countries of the world. The products made and sold in the
international business include many of those described above under
"Business--Consumer, Pharmaceutical and Professional." However, the principal
markets, products and methods of distribution in the international business
vary with the country and the culture. The products sold in the international
business include not only those which were developed in the United States but
also those which were developed by subsidiaries abroad.
Investments and activities in some countries outside the United States are
subject to higher risks than comparable domestic activities because the
investment and commercial climate is influenced by restrictive economic
policies and political uncertainties.
RAW MATERIALS
Raw materials essential to Johnson & Johnson's business are generally
readily available from multiple sources.
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PATENTS AND TRADEMARKS
Johnson & Johnson has made a practice of obtaining patent protection on
its products and processes where possible. Johnson & Johnson owns or is
licensed under a number of patents relating to its products and manufacturing
processes, which in the aggregate are believed to be of material importance in
the operation of its business. However, it is believed that no single patent
or related group of patents is material in relation to Johnson & Johnson as a
whole.
Johnson & Johnson has made a practice of selling its products under
trademarks and of obtaining protection for these trademarks by all available
means. Johnson & Johnson's major trademarks are protected by registration in
the United States and other countries where its products are marketed. Johnson
& Johnson considers these trademarks in the aggregate to be of material
importance in the operation of its business.
SEASONALITY
Worldwide sales do not reflect any significant degree of seasonality;
however spending has been heavier in the fourth quarter of each year than in
other quarters. This reflects increased spending decisions, principally for
advertising and research grants.
COMPETITION
In each of its segments, Johnson & Johnson companies compete with
companies both large and small, located in the United States and abroad.
Competition is strong in all segments without regard to the number and size of
the competing companies involved. Competition in research, involving the
development of new products and processes and the improvement of existing
products and processes, is particularly significant and results from time to
time in product and process obsolescence. The development of new and improved
products is important to Johnson & Johnson's success in all areas of its
business. This competitive environment requires substantial investments in
continuing research and in multiple sales forces. In addition, the winning and
retention of customer acceptance of Johnson & Johnson's consumer products
involve heavy expenditures for advertising, promotion and selling.
RESEARCH
Research activities are important to all segments of Johnson & Johnson's
business. Major research facilities are located not only in the United States
but also in Australia, Belgium, Brazil, Canada, Switzerland, the United Kingdom
and Germany. The costs of Johnson & Johnson's worldwide research activities
relating to the development of new products, the improvement of existing
products, technical support of products and compliance with governmental
regulations for the protection of the consumer amounted to $1,182; $1,127 and
$980 million for fiscal years 1993, 1992 and 1991, respectively. These costs
are charged directly to income in the year in which incurred. All research was
sponsored by Johnson & Johnson.
ENVIRONMENT
During the past year Johnson & Johnson was subject to a variety of Federal,
state and local environmental protection measures. Johnson & Johnson believes
that its operations comply in all material respects with applicable
environmental laws and regulations. Johnson & Johnson's compliance with these
requirements did not and is not expected to have a material effect upon its
capital expenditures, earnings or competitive position.
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REGULATION
Most of Johnson & Johnson's business is subject to varying degrees of
governmental regulation in the countries in which operations are conducted, and
the general trend is toward regulation of increasing stringency. In the United
States, the drug, device, diagnostics and cosmetic industries have long been
subject to regulation by various federal, state and local agencies, primarily
as to product safety, efficacy, advertising and labeling. The exercise of
broad regulatory powers by the Food and Drug Administration (the "FDA")
continues to result in increases in the amounts of time, testing and
documentation required for FDA clearance of new drugs and devices and a
corresponding increase in the expense of product introduction. In addition,
reapproval and reporting requirements with respect to broad classes of medical
devices and diagnostics may result in an increase in the expense required to
maintain some existing products on the market. Similar trends toward product
and process regulation are also evident in a number of major countries outside
of the United States, especially in the European Economic Community where
efforts are continuing to harmonize the internal regulatory systems.
The costs of human health care have been and continue to be a subject of
study and investigation by governmental agencies and legislative bodies in the
United States and other countries; most recently in the United States by the
Administration's health reform task force. In the United States, attention has
been focused on drug prices and profits and programs to encourage doctors to
write prescriptions that can or must be filled with generic substitutes rather
than with drugs bearing a specified trademark. It is likely that increased
attention will be paid to drug pricing and appropriate drug utilization. For
example, the 1990 Omnibus Budget Reconciliation Act included a provision
requiring pharmaceutical companies to rebate to states a portion of the
revenues from pharmaceutical products dispensed to state Medicaid recipients.
The Veterans Health Care Act of 1992 granted state and local facilities
receiving Public Health Service Funds the right to purchase drugs at Medicaid
prices. The same Act mandated discount prices for drug sales to the Department
of Veterans Affairs and other Federal Supply Schedule purchasers.
Further, the Federal government has established a diagnosis related
group ("DRG") payment system for certain institutional services provided under
Medicare or Medicaid. The DRG system entitles an institution to a fixed amount
(based on discharge diagnosis) for operating costs incurred in treatment of
each Medicare or Medicaid beneficiary. Under prior law, payments for such
services had been predicated almost entirely on reimbursement of the allowable
historical costs of the individual hospital or health care facility providing
the services. The DRG payment system has resulted in increased incentives for
health care facilities to limit or control expenditures for many of the
products sold by Johnson & Johnson. Johnson & Johnson encounters regulations
and legislation similar to the foregoing in most of the countries where it does
business.
The regulatory agencies under whose purview Johnson & Johnson operates
have administrative powers that may subject Johnson & Johnson to such actions
as product recalls, seizure of products and other civil and criminal sanctions.
In some cases Johnson & Johnson may deem it advisable to initiate product
recalls voluntarily.
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Item 2. PROPERTIES
Johnson & Johnson and its worldwide subsidiaries operate 163 manufacturing
facilities occupying approximately 15 million square feet of floor space.
The manufacturing facilities are used by the industry segments of Johnson
& Johnson's business approximately as follows:
Square Feet
Segment (in thousands)
------- --------------
Consumer...................................... 6,223
Pharmaceutical................................ 2,730
Professional.................................. 6,583
------
Worldwide total......................... 15,536
======
Within the United States, 12 facilities are used by the Consumer segment,
8 by the Pharmaceutical segment and 46 by the Professional segment. Johnson &
Johnson's manufacturing operations outside the United States are often
conducted in facilities which serve more than one segment of the business.
The locations of the manufacturing facilities by major geographic areas of
the world are as follows:
Number of Square Feet
Geographic Area Facilities (in thousands)
--------------- ---------- --------------
United States....................... 61 7,605
Europe.............................. 43 3,572
Western Hemisphere excluding U.S.A.. 20 2,345
Africa, Asia and Pacific............ 39 2,014
--- ------
Worldwide total............... 163 15,536
=== ======
In addition to the manufacturing facilities discussed above, Johnson &
Johnson maintains numerous office and warehouse facilities throughout the
world. Research facilities are also discussed under "Business--Research."
Johnson & Johnson generally seeks to own its manufacturing facilities,
although some, principally in locations abroad, are leased. Office and
warehouse facilities are often leased.
Johnson & Johnson's properties are maintained in good operating condition
and repair and are well utilized.
For information regarding lease obligations see Note 9 under "Johnson &
Johnson and Subsidiaries--Notes to Consolidated Financial Statements" on page
34 of Johnson & Johnson's Annual Report to Stockholders for fiscal year 1993.
Segment information on additions to Johnson & Johnson's property, plant and
equipment is contained on page 41 of Johnson & Johnson's Annual Report to
Stockholders for fiscal year 1993.
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Item 3. LEGAL PROCEEDINGS
The information set forth in Note 19 "Pending Legal Proceedings" on page
39 of Johnson & Johnson's Annual Report to Stockholders for fiscal year 1993 is
incorporated herein by reference.
The Company or its subsidiaries are parties to a number of administrative
and judicial environmental proceedings, including proceedings brought under the
Comprehensive Environmental Response, Compensation, and Liability Act, commonly
known as Superfund, and comparable state laws. The primary relief sought in
these proceedings is the cost of past and future remediation. While it is not
feasible to predict or determine the outcome of these proceedings, in the
opinion of the Company, such proceedings should not ultimately result in any
liability which would have a material adverse effect on the operations or
financal position of the Company.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
EXECUTIVE OFFICERS OF THE REGISTRANT
Listed below are the executive officers of Johnson & Johnson as of March
15, 1994, each of whom has been an employee of the Company or its affiliates
during the past five years, except as otherwise noted. There are no family
relationships between any of the executive officers, and there is no
arrangement or understanding between any executive officer and any other person
pursuant to which the executive officer was selected. At the annual meeting of
the Board of Directors which follows the Annual Meeting of Stockholders
executive officers are elected by the Board to hold office for one year and
until their respective successors are elected and qualified, or until earlier
resignation or removal.
Information with regard to the directors of the Company, including those
of the following executive officers who are directors, is incorporated by
reference to pages 2 through 7 of Johnson & Johnson's Proxy Statement dated
March 10, l994.
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Name Age Position
---- --- --------
Robert E. Campbell 60 Vice-Chairman, Board of
Directors; Chairman, Professional
Sector Operating Committee; Member,
Executive Committee
Roger S. Fine 51 Member, Executive Committee;
Vice President, Administration (a)
George S. Frazza 60 Member, Executive Committee;
Vice President, General Counsel
Clark H. Johnson 58 Member, Executive Committee;
Vice President, Finance
Ralph S. Larsen 55 Chairman, Board of Directors
and Chief Executive Officer;
Chairman, Executive Committee
Peter N. Larson 54 Chairman, Consumer Sector Operating
Committee; Member, Executive
Committee (b)
Robert N. Wilson 53 Vice-Chairman, Board of Directors;
Chairman, Pharmaceutical Sector
Operating Committee; Member,
Executive Committee
_________________
(a) Mr. R. S. Fine joined the Company in 1974 and became Assistant General
Counsel in 1978 and Associate General Counsel in 1984. He became a
Member of the Executive Committee and Vice President, Administration in
1991.
(b) Mr. P. N. Larson joined the Company in 1991 as a Company Group Chairman.
He became Chairman of a Sector Operating Committee and a Member of the
Executive Committee in 1992. Prior to joining the Company in 1991, Mr.
P. N. Larson was a member of a partnership managing consumer businesses.
He had previously been employed by Kimberly-Clark Corporation since 1978
in a variety of assignments, including President of their Health Care
Sector and member of their Board of Directors.
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PART II
Item 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS
The information called for by this item is incorporated herein by
reference to the material captioned "Management's Discussion and Analysis of
Results of Operations and Financial Condition--Common Stock Market Prices and
Cash Dividends Paid " on page 24 of Johnson & Johnson's Annual Report to
Stockholders for fiscal year 1993.
Item 6. SELECTED FINANCIAL DATA
The information called for by this item is incorporated herein by
reference to the material captioned "Summary of Operations and Statistical Data
1983-1993" on page 42 of Johnson & Johnson's Annual Report to Stockholders for
fiscal year 1993.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The information called for by this item is incorporated herein by
reference to the material captioned "Management's Discussion and Analysis of
Results of Operations and Financial Condition--Overview, Sales and Earnings,
Costs and Expenses, Liquidity and Capital Resources and Changing Prices and
Inflation" on pages 23 through 25, of Johnson & Johnson's Annual Report to
Stockholders for fiscal year 1993.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information called for by this item is incorporated herein by
reference to the consolidated financial statements and the notes thereto and
the material captioned "Independent Auditor's Report", on pages 29 through 40
of Johnson & Johnson's Annual Report to Stockholders for fiscal year 1993.
Item 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
Not applicable.
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information with respect to executive officers is presented at the end of
Part I hereof. Information with respect to directors is incorporated herein by
reference to the material captioned "Election of Directors--Nominees" on pages
2 through 7 of Johnson & Johnson's proxy statement dated March 10, 1994.
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Item 11. EXECUTIVE COMPENSATION
The information called for by this item is incorporated herein by
reference to the material captioned "Election of Directors--Directors' Fees,
Committees and Meetings" and "Executive Compensation" on pages 8 and 13 through
16 of Johnson & Johnson's proxy statement dated March 10, 1994.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information called for by this item is incorporated herein by
reference to the material captioned " Information--Principal Stockholder" and
"Election of Directors--Nominees and Stock Ownership/Control" on pages 2
through 8 of Johnson & Johnson's proxy statement dated March 10, 1994.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Not applicable.
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) 1. Financial Statements
The financial statements to be included in this report are
incorporated in Part II, Item 8 hereof by reference to Johnson &
Johnson's Annual Report to Stockholders for fiscal year 1993.
2. Financial Statement Schedules
V Property, Plant and Equipment
VI Accumulated Depreciation of Property, Plant and Equipment
VIII Reserves
IX Short Term Borrowings
X Supplementary Income Statement Information
Schedules other than those listed above are omitted because they
are not required or are not applicable.
3. Exhibits Required to be Filed by Item 601 of Regulation S-K
The information called for by this paragraph is incorporated herein
by reference to the Exhibit Index of this report.
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the last quarter of the
period covered by this report.
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JOHNSON & JOHNSON AND SUBSIDIARIES
SCHEDULE V-PROPERTY, PLANT AND EQUIPMENT
Fiscal Years Ended January 2, 1994, January 3, 1993 and December 29, 1991
(Dollars in Millions)
Balance at Retirements Other Changes Balance
Beginning Additions Or Sales --------------- at End
Classification of Period At Cost (Note A) Debit Credit of Period
-------------- --------- ------- -------- ----- ------ ---------
1993
- ----
Land and land improvements $ 262 23 4 2(C) 276
3(D)
Buildings and building equipment 2,226 255 56 7(B) 49(D) 2,389
6(C)
Machinery and equipment 3,143 697 323 8(B) 4(C) 3,454
67(D)
Construction in progress 672 - 1 7(D) 664
------ ----- --- -- --- -----
$6,303 975 384 21 132 6,783
====== ===== === == === =====
1992
- ----
Land and land improvements $ 245 24 2 1(C) 6(D) 262
Buildings and building equipment 2,049 309 59 65(D) 2,226
8(C)
Machinery and equipment 2,762 721 256 6(C) 93(D) 3,143
3(B)
Construction in progress 635 49 - 1(C) 13(D) 672
------ ----- --- -- --- -----
$5,691 1,103 317 11 185 6,303
====== ===== === == === =====
1991
- ----
Land and land improvements $ 245 14 14 1(D) 1(C) 245
Buildings and building equipment 1,890 238 79 1(C) 1(D) 2,049
Machinery and equipment 2,474 588 302 3(B) 1(C) 2,762
Construction in progress 489 147 - 1(C) 2(D) 635
------ ----- --- -- --- -----
$5,098 987 395 6 5 5,691
====== ===== === == === =====
Note A - Includes write-off of fully depreciated assets.
Note B - Represents assets of companies acquired during the period.
Note C - Represents transfers between account classifications.
Note D - Represents the cumulative currency translation adjustment.
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JOHNSON & JOHNSON AND SUBSIDIARIES
SCHEDULE VI-ACCUMULATED DEPRECIATION
OF PROPERTY, PLANT AND EQUIPMENT
Fiscal Years Ended January 2, 1994, January 3, 1993 and December 29, 1991
(Dollars in Millions)
Deductions
from
Reserve
Additions ------------
Charged Retirements,
Balance at to Costs Renewals and Other Changes Balance
Beginning and Replacements ---------------- at End
Classification of Period Expenses (Note A) Debit Credit of Period
-------------- --------- -------- ---------- ----- ------ ---------
1993
- ----
Land and land improvements $ 52 5 16 41
Buildings and building equipment 754 106 36 17(C) 1(B) 808
1(B)
Machinery and equipment 1,382 442 266 29(C) 1,528
------ --- --- -- --- -----
$2,188 553 318 47 1 2,377
====== === === == === =====
1992
- ----
Land and land improvements $ 35 20 2 1(C) 52
Buildings and building equipment 714 101 45 20(C) 4(B) 754
4(B)
Machinery and equipment 1,275 378 224 43(C) 1,382
------ --- --- -- --- -----
$2,024 499 271 68 4 2,188
====== === === == === =====
1991
- ----
Land and land improvements $ 34 4 3 35
1(B)
Buildings and building equipment 650 94 32 1(C) 714
Machinery and equipment 1,167 340 234 1(B) 3(C) 1,275
------ --- --- -- --- -----
$1,851 438 269 1 5 2,024
====== === === == === =====
Note A - Includes write-off of fully depreciated assets.
Note B - Represents transfers between account classifications.
Note C - Represents the cumulative currency translation adjustment.
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The following estimated useful lives have been used as a basis for the
calculation of depreciation on the significant portions of the respective
classes of assets:
Years
-----------
Land improvements...................................... 5 to 40
Buildings and building equipment....................... 10 to 50
Machinery and equipment................................ 3 to 15
Furniture and fixtures................................. 5 to 12
The cost of improvements to leased properties is written off over the
terms of the respective leases or useful lives, whichever is shorter.
The cost of maintenance, repairs, and renewals is charged against income
in the year in which incurred, while the cost of betterments and replacements
is capitalized by charges to the respective asset accounts.
Upon retirement or other disposal of fixed assets, the cost and related
amount of accumulated depreciation or amortization are eliminated from the
asset and reserve accounts respectively. The difference, if any, between the
net asset value and the proceeds is adjusted to income. The cost of assets
still in use which have been fully depreciated is eliminated from the asset and
related reserve accounts.
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JOHNSON & JOHNSON AND SUBSIDIARIES
SCHEDULE VIII - RESERVES
Fiscal Years Ended January 2, 1994, January 3, 1993 and December 29, 1991
(Dollars in Millions)
Additions(1)
Charged
Balance at to Costs Deductions from Reserves Balance
Beginning and ---------------------------- at End
of Period Expenses Description Amount of Period
--------- -------- ----------- ------ ---------
1993
- ----
Reserves deducted from
accounts receivable, trade
Reserve for doubtful
accounts $ 57 26 Write-offs less recoveries 24
Currency adjustments 3 56
Reserve for customer
rebates 60 406 Customer rebates allowed 379 87
Reserve for cash
discounts 26 245 Cash discounts allowed 244 27
---- --- --- ---
$143 677 650 170
==== === === ===
1992
- ----
Reserves deducted from
accounts receivable, trade
Reserve for doubtful
accounts $ 58 23 Write-offs less recoveries 20
Currency adjustments 4 57
Reserve for customer
rebates 51 343 Customer rebates allowed 334 60
Reserve for cash
discounts 27 232 Cash discounts allowed 233 26
---- --- --- ---
$136 598 591 143
==== === === ===
1991
- ----
Reserves deducted from
accounts receivable, trade
Reserve for doubtful
accounts $ 52 16 Write-offs less recoveries 10 58
Reserve for customer Customer rebates allowed 340
rebates 49 341 Currency adjustments (1) 51
Reserve for cash Cash discounts allowed 225
discounts 23 226 Currency adjustments (3) 27
---- --- --- ---
$124 583 571 136
==== === === ===
(1) Charges related to customer rebates and cash discounts are reflected as
reductions of sales to customers.
q
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JOHNSON & JOHNSON AND SUBSIDIARIES
SCHEDULE IX - SHORT TERM BORROWINGS
Fiscal Years Ended January 2, 1994, January 3, 1993 and December 29, 1991
(Dollars in Millions)
Weighted Weighted
Balance Average Maximum Average Average
at Interest Rate Amount Amount Interest Rate
Category Year-End At Year-End Outstanding Outstanding(B) During Year(C)
- -------- -------- ----------- ----------- -------------- --------------
1993
- ----
Commercial Paper $ 126 3.2% $ 448 274 3.2%
Notes Payable (A) 436 8.2% 436 296 9.3%
------ ------ ------
Total $ 562 7.1% $ 884 570 6.4%
====== ====== ======
1992
- ----
Commercial Paper $ 263 3.4% $ 644 307 4.1%
Notes Payable (A) 327 12.4% 393 330 13.8%
------ ------ ------
Total $ 590 8.5% $1,037 637 9.1%
======= ====== ======
1991
- ----
Commercial Paper $ 65 4.2% $ 347 85 6.5%
Notes Payable (A) 393 10.9% 408 377 10.3%
------ ------ ------
Total $ 458 9.9% $ 755 462 9.6%
====== ====== ======
Note A - Consists primarily of international notes payable to banks.
Note B - Reflects five quarter average balance.
Note C - Reflects five quarter average balance and related interest expense for
the year.
15
17
JOHNSON & JOHNSON AND SUBSIDIARIES
SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION
Fiscal Years Ended January 2, 1994, January 3, 1993 and December 29, 1991
(Dollars in Millions)
Charges to Costs and Expenses
--------------------------------
1993 1992 1991
---- ---- ----
Maintenance and repairs $202 $210 $203
Depreciation of property 553 499 438
Advertising media costs 753 694 675
Royalties Expense 165 132 106
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SIGNATURES
Pursuant to the requirements of Section 13 of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
Date: March 28, 1994 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 1934, this
report has been duly signed by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/S/ R. S. Larsen Chairman,
- --------------------------- Board of Directors and
R. S. Larsen Chief Executive
Officer, and Director
(Principal
Executive Officer)
March 28, 1994
/S/ C. H. Johnson Vice President-Finance
- -------------------------- and Director
C. H. Johnson (Principal Financial
Officer)
March 31, 1994
/S/ A. W. Roulston Controller March 28, 1994
- --------------------------
A. W. Roulston
/S/ J. W. Black Director March 29, 1994
- --------------------------
J. W. Black
/S/ G. N. Burrow Director March 29, 1994
- --------------------------
G. N. Burrow
/S/ R. E. Campbell Director March 28, 1994
- --------------------------
R. E. Campbell
/S/ J. G. Cooney Director March 29, 1994
- --------------------------
J. G. Cooney
17
19
Signature Title Date
--------- ----- ----
/s/ P.M. Hawley Director March 28, 1994
- --------------------------
P. M. Hawley
Director March , 1994
- --------------------------
A. D. Jordan
/s/ A. G. Langbo Director March 29, 1994
- --------------------------
A. G. Langbo
Director March , 1994
- -------------------------
J. S. Mayo
/s/ T. S. Murphy Director March 28, 1994
- --------------------------
T. S. Murphy
/s/ P. J. Rizzo Director March 29, 1994
- --------------------------
P. J. Rizzo
/s/ M. F. Singer Director March 28, 1994
- ---------------------------
M. F. Singer
/s/ R. B. Smith Director March 30, 1994
- --------------------------
R. B. Smith
/s/ R. N. Wilson Director March 28, 1994
- --------------------------
R. N. Wilson
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20
REPORT OF INDEPENDENT AUDITORS
To the Stockholders and Board of Directors of
Johnson & Johnson:
Our report on the consolidated financial statements of Johnson & Johnson
and subsidiaries has been incorporated by reference in this Form 10-K from the
Johnson & Johnson 1993 Annual Report to Stockholders and appears on page 40
therein. In connection with our audits of such financial statements, we have
also audited the related financial statement schedules listed in the index in
Item 14 of this Form 10-K.
In our opinion, the financial statement schedules referred to above, when
considered in relation to the basic financial statements taken as a whole,
present fairly, in all material respects, the information required to be
included therein.
COOPERS & LYBRAND
New York, New York
January 31, 1994
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the incorporation by reference in Registration
Statements No. 33-52260, 33-40294, 33-40295, 33-32875, 2-67443, 2-77153,
2-78905 and 33-7634 on Form S-8 and No. 33-47424 and 33-37040 on Form S-3 and
related Prospectuses of our report dated January 31, 1994 on our audits of the
consolidated financial statements and financial statement schedules of Johnson
& Johnson and subsidiaries as of January 2, 1994 and January 3, 1993, and for
each of the three years in the period ended January 2, 1994, which reports are
included or incorporated by reference in this Annual Report on Form 10-K.
COOPERS & LYBRAND
New York, New York
January 31, 1994
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21
EXHIBIT INDEX
Reg. S-K
Exhibit Table Description
Item No. of Exhibit
------------- -----------
3(a) Certificate of Amendment to the Restated Certificate of
Incorporation of the Company and Restated Certificate of
Incorporation, 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(b) By-Laws of the Company, as amended April 26, 1990 --
Incorporated herein by reference to Exhibit 3(b) of the
Registrant's Form 10-K Annual Report for the year ended
January 3, 1993.
10(a) 1991 Stock Option Plan -- Incorporated by reference to
Registration Statement No. 33-40294, Exhibit 4(a).*
10(b) 1986 Stock Option Plan (as amended) -- Incorporated herein
by reference to Exhibit 10(b) of the Registrant's Form
10-K Annual Report for the year ended January 3, 1993.*
10(c) 1981 Incentive 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
January 3, 1993.*
10(d) 1980 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 January 3, 1993.*
10(e) 1991 Stock Compensation Plan -- Incorporated herein by
reference to Exhibit 10(e) of the Registrant's Form 10-K
Annual Report for the year ended January 3, 1993.*
10(f) 1986 Stock Compensation Plan -- Incorporated herein by
reference to Exhibit 10(f) of the Registrant's Form 10-K
Annual Report for the year ended January 3, 1993.*
10(g) Domestic Deferred Compensation Plan -- Incorporated herein
by reference to Exhibit 10(g) of the Registrant's Form
10-K Annual Report for the year ended January 3, 1993.*
10(h) 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(i) 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.*
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22
11 -Calculation of Earnings Per Share -- Filed with this
document.
12 -Statement of Computation of Ratio of Earnings to Fixed
Charges -- Filed with this document.
13 -Annual report to stockholders for fiscal year 1993 (only
those portions incorporated by reference in this document
are deemed "filed") -- Filed with this document.
21 -Subsidiaries -- Filed with this document.
28 -Form 11-K for the Johnson & Johnson Savings Plan to be
filed on or before June 30, 1994.
* Management contracts and compensatory plans and arrangements required
to be filed as exhibits to this form pursuant to Item 14(c) of this
report.
A copy of any of the exhibits listed above will be provided without charge
to any stockholder submitting a written request specifying the desired
exhibit(s) to the Secretary at the principal executive offices of the Company.
21