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<SEC-DOCUMENT>0000950123-02-006570.txt : 20020627
<SEC-HEADER>0000950123-02-006570.hdr.sgml : 20020627
<ACCEPTANCE-DATETIME>20020627153831
ACCESSION NUMBER: 0000950123-02-006570
CONFORMED SUBMISSION TYPE: 10-K/A
PUBLIC DOCUMENT COUNT: 6
CONFORMED PERIOD OF REPORT: 20011230
FILED AS OF DATE: 20020627
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: JOHNSON & JOHNSON
CENTRAL INDEX KEY: 0000200406
STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834]
IRS NUMBER: 221024240
STATE OF INCORPORATION: NJ
FISCAL YEAR END: 0103
FILING VALUES:
FORM TYPE: 10-K/A
SEC ACT: 1934 Act
SEC FILE NUMBER: 001-03215
FILM NUMBER: 02689278
BUSINESS ADDRESS:
STREET 1: ONE JOHNSON & JOHNSON PLZ
CITY: NEW BRUNSWICK
STATE: NJ
ZIP: 08933
BUSINESS PHONE: 7325242454
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K/A
<SEQUENCE>1
<FILENAME>y61804e10vkza.txt
<DESCRIPTION>AMENDMENT TO FORM 10-K
<TEXT>
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
ANNUAL REPORT PURSUANT TO SECTION 13 OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 30, 2001 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-l024240
(State of (I.R.S. Employer
Incorporation) Identification No.)
One Johnson & Johnson Plaza
New Brunswick, New Jersey 08933
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (732) 524-0400
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT
<TABLE>
<CAPTION>
Name of each exchange on
Title of each class which registered
------------------- -------------------------
<S> <C>
Common Stock, Par Value $1.00 New York Stock Exchange
</TABLE>
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K [ ]
The aggregate market value of the voting stock held by non-affiliates of
the Registrant on February 26, 2002 was approximately $181 billion.
On February 26, 2002 there were 3,047,147,480 shares of Common Stock
outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Parts I and II: Portions of Registrant's annual report to shareowners for
fiscal year 2001.
Part III: Portions of Registrant's proxy statement for its 2002 annual
meeting of shareowners.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section l3 of the Securities Exchange Act
of l934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
Date: June 25, 2002 JOHNSON & JOHNSON
(Registrant)
By /s/ W.C. Weldon
-----------------------------------------
W.C. Weldon, Chairman, Board of Directors
and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of l934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ W.C. Weldon
- ------------------------ Chairman, Board of June 25, 2002
W.C. Weldon Directors, Chief
Executive Officer and
Director (Principal
Executive Officer)
/s/ R. J. Darretta Executive Vice President, June 24, 2002
- ----------------------- Finance & Information
R. J. Darretta Management, and Director
(Principal Financial Officer)
/s/ S.J. Cosgrove Controller June 24, 2002
- -----------------------
S. J. Cosgrove
/s/ G.N. Burrow Director June 18, 2002
- -----------------------
G. N. Burrow
/s/ J.G. Cullen Director June 21, 2002
- -----------------------
J. G. Cullen
Director June , 2002
- --------------------------
M. J. Folkman
</TABLE>
1
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ A.D. Jordan Director June 21, 2002
- ------------------------
A. D. Jordan
/s/ A.G. Langbo Director June 19, 2002
- ------------------------
A. G. Langbo
/s/ J. T. Lenehan
- ------------------------ Vice Chairman, June 26, 2002
J. T. Lenehan Board of Directors
and Director
/s/ L.F. Mullin Director June 18, 2002
- ------------------------
L. F. Mullin
/s/ D. Satcher Director June 24, 2002
- -------------------------
D. Satcher
/s/ H.B. Schacht Director June 21, 2002
- ------------------------
H. B. Schacht
/s/ M.F. Singer Director June 24, 2002
- ------------------------
M. F. Singer
/s/ J.W. Snow Director June 18, 2002
- -------------------------
J. W. Snow
/s/ R.N. Wilson Senior Vice Chairman, June 24, 2002
- ------------------------- Board of Directors
R. N. Wilson and Director
</TABLE>
2
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Reg. S-K
Exhibit Table Description
Item No. of Exhibit
-------- ----------
<S> <C>
3(a)(i) Restated Certificate of Incorporation dated April 26, 1990-
Incorporated herein by reference to Exhibit 3(a) of the
Registrant's Form 10-K Annual Report for the year ended
December 30, 1990.
3(a)(ii) Certificate of Amendment to the Restated Certificate of
Incorporation of the Company dated May 20, 1992 -- Incorporated
herein by reference to Exhibit 3(a) of the Registrant's Form
10-K Annual Report for the year ended January 3, 1993.
3(a)(iii) Certificate of Amendment to the Restated Certificate of
Incorporation of the Company dated May 21, 1996 - -
Incorporated herein by reference to Exhibit 3(a)(iii) of the
Registrant's Form 10-K Annual Report for the year ended
December 29, 1996.
3(a)(iv) Certificate of Amendment to the Restated Certificate of
Incorporation of the Company effective May 22, 2001 -
Incorporated herein by reference to Exhibit 3 of the
Registrant's Form 10-Q Quarterly Report for the quarter ended
July 1, 2001.
3(b) By-Laws of the Company, as amended effective June 11, 2001 -
Incorporated herein by reference to Exhibit 99.2 of the
Registrant's Form 10-Q Quarterly Report for the quarter
ended July 1, 2001.
4(a) Upon the request of the Securities and Exchange Commission, the
Registrant will furnish a copy of all instruments defining the
rights of holders of long term debt of the Registrant.
10(a) Stock Option Plan for Non-Employee Directors - -
Incorporated herein by reference to Exhibit 10(a) of the
Registrant's Form 10-K Annual Report for the year ended
December 29, 1996.*
10(b) 2000 Stock Option Plan - Incorporated herein by reference to
Exhibit 10(b) of the Registrant's Form 10-K Annual Report
for the year ended December 31, 2000.*
10(c) 1995 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, 1999.*
10(d) 1991 Stock Option Plan (as amended) - - Incorporated herein by
reference to Exhibit 10(c) of the Registrant's Form 10-K Annual
Report for the year ended December 28, 1997.*
10(e) 2000 Stock Compensation Plan - Incorporated herein by reference
to Exhibit 10(e) of the Registrant's Form 10-K Annual Report
for the year ended December 31, 2000.*
10(f) Executive Incentive Plan (as amended) - Incorporated herein by
reference to Exhibit 10(f) of the Registrant's Form 10-K Annual
Report for the year ended December 31, 2000.*
10(g) Domestic Deferred Compensation (Certificate of Extra
Compensation) Plan (as amended) - (1).*
10(h) Deferred Fee Plan for Directors (as amended) -- Incorporated
herein by reference to Exhibit 10(h) of the Registrant's
Form 10-K Annual Report for the year ended December 29,
1996.*
10(i) Executive Income Deferral Plan (as amended) - Incorporated
herein by reference to Exhibit 10(i) of the Registrant's
Form 10-K Annual Report for the year ended January 2, 2000.*
</TABLE>
3
<PAGE>
<TABLE>
<S> <C>
10(j) Excess Savings Plan -- Incorporated herein by reference to
Exhibit 10(j) of the Registrant's Form 10-K Annual Report for
the year ended December 29, 1996.*
10(k) Supplemental Retirement Plan -- Incorporated herein by
reference to Exhibit 10(h) of the Registrant's Form 10-K
Annual Report for the year ended January 3, 1993.*
10(l) Executive Life Insurance Plan -- Incorporated herein by
reference to Exhibit 10(i) of the Registrant's Form 10-K Annual
Report for the year ended January 3, 1993.*
10(m) Stock Option Gain Deferral Plan - Incorporated herein by
reference to Exhibit 10(m) of the Registrant's Form 10-K
Annual Report for the year ended January 2, 2000.*
10(n) Estate Preservation Plan -- Incorporated herein by reference to
Exhibit 10(n) of the Registrant's Form 10-K Annual Report for
the year ended January 2, 2000.*
12 -- Statement of Computation of Ratio of Earnings to Fixed
Charges -- (1).
13 -- Pages 25-50 of the Company's Annual Report to Shareowners
for fiscal year 2001 (only those portions of the Annual Report
incorporated by reference in this document are deemed "filed")
- (1).
21 -- Subsidiaries - - (1).
23 -- Consent of Independent Accountants - (1).
99(a)(i) -- Form 11-K for the Johnson & Johnson Savings Plan -- Filed
with this document.
99(a)(ii) -- Form 11-K for the Johnson & Johnson Retirement Savings Plan
-- Filed with this document.
99(a)(iii) -- Form 11-K for the Johnson & Johnson Savings Plan for Union
Represented Employees -- Filed with this document.
99(a)(iv) -- Form 11-K for the Centocor Qualified Savings and Retirement
Plan -- Filed with this document.
99(a)(v) -- Form 11-K for the ALZA Corporation Tax Deferral Investment
Plan - Filed with this document.
99(b) -- Cautionary Statement pursuant to Private Securities
Litigation Reform Act of 1995: "Safe Harbor" for
Forward-Looking Statements - - (1).
</TABLE>
- ------------------
(1) Incorporated herein by reference to the Exhibit bearing the same Exhibit
Number in Registrant's Form 10-K Annual Report for the fiscal year ended
December 30, 2001.
* Management contracts and compensatory plans and arrangements required to be
filed as Exhibits to this form pursuant to Item 14(c) of the report.
A copy of any of the Exhibits listed above will be provided
without charge to any shareowner submitting a written request specifying the
desired Exhibit(s) to the Secretary at the principal executive offices of the
Company.
4
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.A.I
<SEQUENCE>3
<FILENAME>y61804exv99wawi.txt
<DESCRIPTION>FORM 11-K FOR THE JOHNSON & JOHNSON SAVINGS PLAN
<TEXT>
<PAGE>
Exhibit 99(a)(i)
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 11-K
------------------------------
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the Fiscal Year Ended December 30, 2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
Commission File Number 1-3215
------------------------------
JOHNSON & JOHNSON
SAVINGS PLAN
(Full title of the Plan)
JOHNSON & JOHNSON
ONE JOHNSON & JOHNSON PLAZA
NEW BRUNSWICK, NEW JERSEY 08933
(Name of issuer of the securities held pursuant to the Plan
and the address of its principal executive office)
<PAGE>
Item 4. Financial Statements and Exhibits
Report of Independent Accountants
Financial Statements:
Statements of Net Assets Available for Benefits as of
December 31, 2001 and 2000
Statements of Changes in Net Assets Available for Benefits
for the Years Ended December 31, 2001 and 2000
Notes to Financial Statements
Supplemental Schedule:
Form 5500 Schedule H - Part IV - 4I - Schedule of Assets (Held at
End of Year) at December 31, 2001
Consent of PricewaterhouseCoopers LLP, dated June 26, 2002
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the employee benefit plan) have
duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
JOHNSON & JOHNSON SAVINGS PLAN
By: /s/ R.J. Darretta
------------------------------
R. J. Darretta
Chairman, Pension Committee
June 25, 2002
<PAGE>
JOHNSON & JOHNSON SAVINGS PLAN
------------------
FINANCIAL STATEMENTS AND
SUPPLEMENTAL SCHEDULE
AS OF AND FOR THE YEARS ENDED
DECEMBER 31, 2001 AND 2000
<PAGE>
JOHNSON & JOHNSON
SAVINGS PLAN
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAGE(S)
<S> <C>
Report of Independent Accountants 1
Financial Statements:
Statements of Net Assets Available for Benefits as of
December 31, 2001 and 2000 2
Statement of Changes in Net Assets Available for
Benefits for the Years Ended December 31, 2001 and 2000 3
Notes to Financial Statements 4 - 14
Supplemental Schedule:
Form 5500 Schedule H - Part IV - 4I - Schedule of Assets
(Held at End of Year) as of December 31, 2001 15
</TABLE>
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Pension and Benefits Committees of
Johnson & Johnson
In our opinion, the accompanying statements of net assets available for benefits
and the related statements of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of the Johnson & Johnson Savings Plan (the "Plan") as of December 31, 2001 and
2000, and the changes in net assets available for benefits for the years then
ended in conformity with accounting principles generally accepted in the United
States of America. These financial statements are the responsibility of the
Plan's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with auditing standards generally accepted in the
United States of America, which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets is
presented for the purpose of additional analysis and is not a required part of
the basic financial statements but is supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. This supplemental schedule
is the responsibility of the Plan's management. The supplemental schedule has
been subjected to the auditing procedures applied in the audits 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.
June 19, 2002
1
<PAGE>
JOHNSON & JOHNSON
SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 2001 AND 2000
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
2001 2000
<S> <C> <C>
ASSETS
Deposits in Group Annuity Contracts (Note 2) $ 685,666,437 $ 619,112,768
Investments at fair value (Notes 2, 6 and 8) 2,313,528,190 1,986,270,276
Investments in Master Trust (Notes 2, 6 and 8) 1,366,699,342 1,418,537,072
Accrued dividends and interest receivable 5,351,233 4,818,327
Due From Johnson & Johnson 3,444,631 4,514,063
Loans to participants (Note 5) 33,808,844 5,940,765
-------------- --------------
Total assets 4,408,498,677 4,039,193,271
LIABILITIES
Accrued expenses 566,385 543,436
Accrued interest 2,489,642 3,093,218
Current portion of long term note (Note 11) 8,082,746 7,664,462
Long-term note payable to J&J (Note 11) 23,531,749 31,614,495
-------------- --------------
Total liabilities 34,670,522 42,915,611
-------------- --------------
Net assets available for benefits $4,373,828,155 $3,996,277,660
============== ==============
</TABLE>
See notes to financial statements.
-2-
<PAGE>
JOHNSON & JOHNSON SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ADDITIONS TO NET ASSETS ATTRIBUTED TO: 2001 2000
<S> <C> <C>
Investment income:
Net appreciation in fair value of investments $ 159,787,387 $ 191,548,754
Interest 52,782,751 48,917,395
Dividends 39,894,321 36,412,138
Contributions:
Employee contributions (Note 3) 229,365,784 174,536,815
Employer contributions (Note 3 and 11) 59,595,393 54,603,734
Asset transfers (Note 1) 45,528,557 10,368,670
-------------- --------------
Total additions 586,954,193 516,387,506
-------------- --------------
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Payments to participants (Note 4) 195,200,928 217,806,278
Interest expense 2,931,530 3,617,116
Administrative expenses 7,645,728 6,128,290
Asset transfers (Note 1) 3,625,512
-------------- --------------
Total deductions 209,403,698 227,551,684
-------------- --------------
Net increase 377,550,495 288,835,822
-------------- --------------
Net assets available for benefits,
Beginning of year 3,996,277,660 3,707,441,838
-------------- --------------
Net assets available for benefits,
End of year $4,373,828,155 $3,996,277,660
============== ==============
</TABLE>
See notes to financial statements.
-3-
<PAGE>
JOHNSON & JOHNSON SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. ORGANIZATION
The Johnson & Johnson Savings Plan (the "Plan") is a defined contribution
plan which was established on June 1, 1982 for eligible salaried and
non-union hourly employees of Johnson & Johnson ("J&J" or the "Company")
and certain domestic subsidiaries. The Plan was designed to enhance the
existing retirement program of eligible employees. The funding of the Plan
is made through employee and Company contributions. The assets of the Plan
are maintained in two Master Trust accounts, the Johnson & Johnson Savings
Plan Trust ("Savings Plan Trust") and the Johnson & Johnson Pension Trust
Fund ("Pension Trust Fund"), and transactions therein are executed by the
trustee, State Street Trust Company ("State Street"). The Savings Plan
Trust and the Pension Trust Fund are allocated based upon the total of
each individual participant's share of the Savings Plan Trust and the
Pension Trust Fund.
Participants have the option to invest in any one of nine investment
options which include the Fixed Interest Fund, J&J Stock Fund, U.S.
Government Securities ("USGS") Fund, Diversified Equity Fund, Balanced
Fund, International Equity Fund, Intermediate Bond Fund, Small Cap Fund,
and the Russell 3000 Fund.
Effective January 1, 1991, the Company implemented a Leveraged Employee
Stock Ownership Plan ("ESOP") to supplement its existing 401(k) plan. The
ESOP is a leveraged employee stock ownership plan and is designed to
comply with Section 4975(e)(7) and the regulations thereunder of the
Internal Revenue Code of 1986, as amended, and is subject to the
applicable provisions of the Employee Retirement Income Security Act of
1974, as amended. The ESOP is used to fund an additional 25% match of
employee contributions (referred to herein as the "ESOP contribution").
Additionally, the Company may elect to fund the employer 50% match of
employee directed contributions with ESOP leveraged shares.
Initial funding for the ESOP was made through an advance from J&J of $100
million, which was used to purchase 1,554,800 shares of J&J common stock
on the open market (which equates to 12,438,400 shares when adjusted for
subsequent stock splits). Of these shares, 1,985,939 and 2,715,858
(adjusted for stock splits) remain unallocated as of December 31, 2001 and
2000 respectively. As of December 31, 2001 and 2000, the net assets of the
unallocated portion are $99,705,191 and $107,313,107 respectively, while
the net assets of the allocated portion are $469,503,721 and $411,399,762
respectively. Shares are allocated to Plan participants under a formula
set forth in the ESOP note agreement (see note 3) relating to the advance
from J&J.
Each participant is entitled to exercise voting rights attributable to the
shares allocated to his or her account. The Company is entitled to
exercise voting rights attributable to unallocated shares. In the third
quarter of 1998, Johnson & Johnson incorporated a "dividend pass-through"
feature into the Plan. This feature allows a participant to receive cash
for dividends paid on certain shares owned through the plan. The
eligibility to receive a dividend pass-through is contingent on the
ownership of shares in the Johnson & Johnson Stock Fund, which does not
include shares owned in the Employee Stock Ownership Plan Trust Fund. The
amount received is based on the lesser of (a) 20% of the eligible
compensation (annual base pay rate for the year plus 50% of prior calendar
year commissions) and (b) IRS Pre-tax compensation limit ($10,500 in 2001
and 2000) reduced by the estimated pre-tax contribution for the year
(current pre-tax percentage multiplied by the eligible compensation for
the year). For the 2001 and 2000 plan years, the dividend pass-through
amounts recorded in the Plan Statement of Changes in Net Assets Available
for Benefits
-4-
<PAGE>
JOHNSON & JOHNSON SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
as dividend income and payments to participants were $11,101,456 and
$9,312,968 respectively.
Up through 2001, the pass-through was distributed to each participant via
check. For participants who had their dividend reinvested in the J&J Stock
Fund, they had an opportunity in early 2002 to receive those 2001
dividends in cash.
In October 2001, the assets of the Centocor Qualified Savings and
Retirement Plan were transferred into the Plan. In December 2001, the
assets of the Horizon Health Services Employee Savings and Retirement Plan
and Indigo Medical, Incorporated 401(k) Plan were transferred into the
Plan. In April 2000, the assets of the McFaul & Lyons 401(k) Profit
Sharing Plan were transferred into the Plan. In July 2000, the assets of
the Mitek Products 401(k) Plan, the AcroMed 401(k) Profit Sharing Plan and
the Nitinol Devices & Components 401(k) Plan were transferred into the
Plan. In August 2000, the assets of the Biopsys Medical Inc. 401(k) Plan
were transferred into the Plan.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements of the Plan are prepared under the accrual basis
of accounting.
VALUATION OF INVESTMENTS
Equity investments in the Johnson & Johnson Stock Fund and the ESOP,
administered by State Street, are valued at the closing price on the last
business day of the year. The cost of equity investments in the Johnson &
Johnson Stock Fund is recorded at the closing price of the stock
transactions for the day during which the contribution is made. The
investments in the USGS, Fixed Interest, Diversified Equity, Russell 3000,
and Small Cap Funds represent the rest of the Plan's share of assets in
the Savings Plan Trust. The USGS Fund consists of short-term obligations
that are issued or guaranteed by the U.S. Government. Investments are
valued at cost which approximates market value. Deposits in group annuity
contracts in the Fixed Interest Fund are recorded at their contract values
which approximates fair value because these investments have fully
benefit-responsive features. Contract value represents contributions and
reinvested income, less any withdrawals plus accrued interest.
Participants may direct the withdrawal or transfer of all or a portion of
their investment at contract value. However, withdrawals influenced by
employer initiated events such as in connection with the sale of a
business, may result in a distribution at other than contract value. There
are no reserves against contract values for credit risk of contract
issuers or otherwise.
The average yield of the Fixed Interest Fund was approximately 6.67% and
6.47% for 2001 and 2000, respectively. The crediting interest rate of the
Fixed Interest Fund was approximately 6.75% for 2001 and 6.54% for 2000.
The difference between the average yield and crediting interest rate is
due to administrative charges paid by the Plan. The crediting interest
rate for the investment contracts is either agreed to in advance with the
issuer or varies based on an agreed to formula, but cannot be less than
zero.
Equity investments and corporate obligations in the Diversified Equity
Fund, managed by Capital Guardian Trust Company and J.P. Morgan Investment
Management, Inc., are traded on a national securities exchange and are
valued at the last reported market sales price on the last business day of
the year. Investments in the Diversified Equity Fund are purchased
periodically by Capital Guardian
-5-
<PAGE>
JOHNSON & JOHNSON SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Trust Company and J.P. Morgan Investment Management, Inc. based on the
prevailing market values of the underlying investments.
The Intermediate Bond Fund invests in various kinds of bonds, primarily
corporate and U.S. government bonds. The Balanced Fund is invested in a
mix of stocks, bonds, and real estate. The International Equity Fund,
managed by American Express Management and Capital Guardian Trust Company,
invests primarily in equities sold on foreign exchange markets. The
investments in these three funds represent the Plan's share of the assets
in the Pension Trust Fund. These investments are stated at fair value.
Generally, they represent securities traded on a national securities
exchange which are valued at the last reported sales price on the last
business day of the year.
The U.S. Small Cap Fund is a stock fund that emphasizes companies with a
capitalization of between approximately $50 million and $1 billion at the
time the stock was purchased, and whose principal markets are in the
United States. The current fund manager of the U.S. Small Cap Fund is
Capital Guardian Trust Company.
The goal of the Russell 3000 Index Fund is to closely match the
performance of the Russell 3000 Index, which is widely used to measure the
stock performance of the 3,000 largest companies in the U.S. market. The
Russell 3000 Index is a broad representation - approximately 97% - of all
the stocks in the U.S. stock market available for investment. The current
investment manager of the Fund is State Street Global Advisors.
The Loan Fund, consisting of participant loans, are valued at cost, which
approximates fair value. Temporary cash investments are stated at
redemption value which approximates fair value.
NET APPRECIATION (DEPRECIATION)
The plan presents in the statement of changes in net assets available for
benefits the net appreciation (depreciation) in the fair value of
investments, which consists of unrealized appreciation (depreciation) of
the underlying investments and realized gains and losses on sales of
investments.
PAYMENT OF BENEFITS
Benefits are recorded when paid.
USE OF ESTIMATES
The preparation of the Plan's financial statements in conformity with
accounting principles generally accepted in the United States of America
requires the plan administrator to make estimates and assumptions that
affect the reported amounts of net assets available for benefits at the
date of the financial statements and the changes in net assets available
for benefits during the reporting period and, when applicable, disclosures
of contingent assets and liabilities at the date of the financial
statements. Actual results could differ from those estimates.
RISKS AND UNCERTAINTIES
The Plan provides for various participant investment options in funds
which can invest in any combination of stocks, bonds, fixed income
securities, mutual funds, and other investment securities. Investment
securities are exposed to various risks, such as interest rate, market and
credit. Due to the level of risk associated with certain investment
securities and the level of uncertainty related to changes in the value of
investment securities, it is at least reasonably possible that changes in
risks in the near term would materially affect participants' account
balances and the amounts reported in the
-6-
<PAGE>
JOHNSON & JOHNSON SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Statements of Net Assets Available for Benefits and the Statements of
Changes in Net Assets Available for Benefits.
NEW ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board (FASB) issued SFAS
No. 133, "Accounting for Derivative Instruments and Hedging Activities"
(SFAS No. 133), as amended. SFAS No. 133 requires that an entity recognize
all derivative instruments and measure those instruments at fair value.
The Plan was required to adopt SFAS No. 133 effective January 1, 2001.
Management initially was unable to determine the impact of SFAS No. 133 on
the Plan financial statements as a result of the inconsistency in
accounting literature between SFAS No. 133, requiring derivative
instruments to be measured at fair value and the AICPA Audit and
Accounting Guide on "Audits of Employee Benefit Plans" and Statement of
Position 94-4, "Reporting of Investment Contracts Held by Health and
Welfare Benefit Plans and Defined-Contribution Pension Plans," (SOP 94-4)
requiring benefit responsive investment contracts (including synthetic
GICs) held by defined-contribution pension plans to be measured at
contract value.
In October 2001, the Derivatives Implementation Group (DIG) of the FASB
tentatively released Implementation Issue C19 (DIG C19), which provides
that fully benefit responsive investment contracts accounted for under
either paragraph 4 or 5 of SOP 94-4 are not subject to SFAS No. 133. The
tentative guidance included in DIG C19 has been incorporated into an
exposure draft of the amendment of FAS 133. Although this amendment
project has yet to be finalized, management believes that it provides the
most relevant accounting guidance for fully benefit responsive investment
contracts held by defined-contribution pension plans. Accordingly, the
Plans have measured all fully benefit responsive investment contracts at
contract value at December 31, 2001 and 2000. The FAS 133 amendment
project is expected to be finalized during 2002. The Plans hold no other
material derivative financial instruments at December 31, 2001 or 2000.
OTHER
Interest and dividend income is recorded as earned on the accrual basis.
Purchases and sales of investment securities are reflected on a trade-date
basis. Gains and losses on sales of investment securities are determined
on the average cost method. Administrative charges are allocated monthly
based on the quarterly percentage of assets in each of the six investment
funds.
All third party administrative expenses are paid by the Plan, except cost
of entering new investment vehicles which are paid primarily by the
Company.
3. CONTRIBUTIONS
Participating employees may contribute a minimum of 3% up to a maximum of
20% of their base salary plus 50% of eligible commissions in combinations
of pre- and post-tax contributions. Pre-tax contributions may not exceed
the smaller of 20% of their base salary including 50% of eligible
commissions or $10,500 in 2001 and 2000. The Company contributes to the
Plan an amount equal to 75% of the employee directed contributions of the
participants up to a maximum of 6% of the
-7-
<PAGE>
JOHNSON & JOHNSON SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
employee's base salary and 50% of eligible commissions.
Contributions are made to the Plan by participants through payroll
deductions and by the Company on behalf of participants. Such
contributions, with the exception of the ESOP contribution, are invested
in any of the nine investment funds at the direction of the participating
employees. The 25% ESOP contribution is invested in J&J stock, except for
employees over 55 years of age who may choose the alternative investments.
ESOP shares are released from the unallocated portion of the ESOP each
February following the payment of the loan (see Note 11), in accordance
with the ESOP Trust Agreement. Shares released, in accordance with the
ESOP note agreement, may be more or less than shares earned by
participants.
4. PARTICIPANT ACCOUNTS AND BENEFITS
All participants are fully vested in their contributions and the Company
match. The benefit to which a Plan participant is entitled is the amount
provided by contributions (Company and participant) and investment
earnings thereon (including net realized and unrealized investment gains
and losses) which have been allocated to such participant's account
balance. Allocations are based on participant earnings on account balance,
as defined.
Participants may withdraw before-tax contributions only upon meeting
certain hardship conditions.
5. LOANS TO PARTICIPANTS
Participants may borrow up to a maximum of 50% of their account balance or
$50,000, whichever is less. Loans bear a market rate of interest plus 1%
and are repayable within five years. Loans are secured by the balance in
the participant accounts. In 2001, the Plan was amended to allow
participants to obtain loans due to circumstances other than hardship.
-8-
<PAGE>
JOHNSON & JOHNSON SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
6. INVESTMENTS
The following presents investments that each represent 5% or more of the
Plan's net assets.
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
2001 2000
<S> <C> <C>
Johnson & Johnson Stock Fund $1,663,605,667 $1,429,736,759
Diversified Equity Fund 974,855,347 1,024,914,175
Fixed interest fund 685,666,437 619,112,768
Employee Stock Ownership Plan Trust Fund* 599,854,450 556,533,517
Balanced Fund 238,508,436 262,378,109
Total of remaining investment balances, each
holding less than 5% of the Plan's net assets 237,212,476 137,185,553
-------------- --------------
Total investment balance $4,399,702,813 $4,029,860,881
============== ==============
</TABLE>
* Non-participant directed
During 2001 and 2000, the Plan's investments (including gains and losses
on investments bought and sold, as well as held during the year)
appreciated in value by $159,787,387 and $191,548,754 respectively as
follows:
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
2001 2000
<S> <C> <C>
Equities $ (60,829,372) $ (38,934,263)
Bonds 2,197,133 2,689,740
Common stock 236,573,615 240,213,266
Other (18,153,989) (12,419,989)
------------- -------------
$ 159,787,387 $ 191,548,754
============= =============
</TABLE>
7. NONPARTICIPANT-DIRECTED INVESTMENTS
The ESOP is the Plan's only nonparticipant-directed investment.
Information about the ESOP's net assets and the significant components of
the changes in net assets is as follows:
-9-
<PAGE>
JOHNSON & JOHNSON SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
2001 2000
<S> <C> <C>
NET ASSETS:
J&J common stock $ 569,208,912 $ 518,712,869
</TABLE>
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
CHANGES IN NET ASSETS: 2001 2000
<S> <C> <C>
Contributions $ 3,444,631 $ 4,514,063
Interest/dividend income 7,341,923 6,872,055
Net appreciation 59,178,965 48,675,938
Benefits paid to participants (14,686,318) (14,166,408)
Transfers to participant-directed investments (1,851,628) (1,767,000)
Interest expense (2,931,530) (3,617,116)
------------- -------------
$ 50,496,043 $ 40,511,532
============= =============
</TABLE>
8. INVESTMENTS IN SAVINGS PLAN TRUST AND PENSION TRUST FUND
As of December 31, 2001 and 2000 the investments in the USGS, Fixed
Interest, J&J Stock, Diversified Equity, and ESOP Funds are included in
the Savings Plan Trust. As of December 31, 2001 the Trust also holds the
Small Cap and Russell 3000 Funds. The Plan holds approximately 99.05% and
99.06% of the Trust's net assets as of December 31, 2001 and 2000
respectively.
The Trust's net assets, income, and expenses are allocated to the Plan
based on the total of each participant's share in the Trust. Information
concerning the Savings Plan Trust's investments held and investment income
is as follows:
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 2001
INVESTMENTS BY TYPE FAIR VALUE COST
<S> <C> <C>
Interest bearing cash $ 117,068,720 $ 117,068,720
Government securities 37,502,467 36,056,366
Common stocks (common) 2,195,819,664 767,961,497
Equities 995,845,728 837,310,795
Deposits in group annuity contracts* 671,161,230 671,161,230
-------------- --------------
$4,017,397,809 $2,429,558,608
============== ==============
</TABLE>
-10-
<PAGE>
JOHNSON & JOHNSON SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 2000
INVESTMENTS BY TYPE FAIR VALUE COST
<S> <C> <C>
Interest bearing cash $ 137,547,662 $ 137,547,662
Government securities 31,598,063 30,000,363
Common stocks 1,899,050,245 660,830,884
Equities 992,140,689 766,755,736
Deposits in group annuity contracts* 601,183,330 601,183,330
-------------- --------------
$3,661,519,989 $2,196,317,975
============== ==============
</TABLE>
* Stated at cost which approximates fair value.
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
INVESTMENT INCOME BY TYPE 2001 2000
<S> <C> <C>
Interest $ 43,822,281 $ 42,571,642
Dividends 37,670,605 34,561,040
Net appreciation (depreciation) 208,126,979 228,690,355
------------ ------------
$289,619,865 $305,823,037
============ ============
</TABLE>
The investments in the Intermediate Bond, Balanced, and International
Equity Funds are included in the Pension Trust Fund. The Plan holds
approximately 10.9% and 9.3% of the Fund's net assets as of December 31,
2001 and 2000 respectively. The Trust's net assets, income and expenses
are allocated to the Plan based on the total of each participant's share
in the Trust. Information concerning the Pension Trust's Fund's
investments held and investment income is as follows:
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 2001
FAIR VALUE BY INVESTMENT TYPE FAIR VALUE COST
<S> <C> <C>
Interest bearing cash $ 92,125,398 $ 91,983,260
U.S. Government securities 381,983,148 380,512,200
Corporate bonds 298,014,173 294,687,209
Preferred stocks 9,110,893 9,754,417
Common stocks 1,761,878,459 1,311,314,909
Equities and other 746,220,722 774,278,592
-------------- --------------
$3,289,332,793 $2,862,530,587
============== ==============
</TABLE>
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 2000
FAIR VALUE BY INVESTMENT TYPE FAIR VALUE COST
<S> <C> <C>
Interest bearing cash $ 208,921,241 $ 208,921,241
U.S. Government securities 350,499,180 340,487,917
Corporate bonds 380,093,770 382,588,149
Preferred stocks 14,803,313 13,969,322
Common stocks 2,486,721,538 1,863,462,121
Equities and other 458,963,976 438,847,494
-------------- --------------
$3,900,003,018 $3,248,276,244
============== ==============
</TABLE>
-11-
<PAGE>
JOHNSON & JOHNSON SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
INVESTMENT INCOME BY TYPE 2001 2000
<S> <C> <C>
Interest $ 87,438,526 $ 55,042,115
Dividends 24,404,499 20,394,205
Net appreciation (depreciation) (223,405,265) (232,505,836)
------------- -------------
$(111,562,240) $(157,069,516)
------------- -------------
</TABLE>
9. TAX STATUS
The Internal Revenue Service has determined and informed the Company by a
letter dated April 25, 1996, that the Plan, the Savings Plan Trust, and
the Pension Trust Fund are designed in accordance with applicable sections
of the Internal Revenue Code (IRC). The Plan has been amended since
receiving the determination letter. However, the Plan administrator
believes that the Plan is designed and is currently being operated in
compliance with applicable requirements of the IRC.
10. TERMINATION PRIORITIES
The Company has the right to terminate the Plan at any time, and in the
event the Plan is terminated, subject to conditions set forth in ERISA,
the amount of each participant's account balance in the Plan is fully
vested.
-12-
<PAGE>
JOHNSON & JOHNSON SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
11. INDEBTEDNESS
In connection with the formation of the Plan's ESOP feature, the Plan
borrowed $100 million from Johnson & Johnson for the purpose of purchasing
J&J common stock. The note bears interest at 9% and is payable through
February 15, 2005. The Company is obligated to make contributions in cash
to the ESOP which, when aggregated with the ESOP's dividends and interest
earnings, equal the amount necessary to enable the ESOP to make its
regularly scheduled payments of principal and interest due on the term
loan. Aggregate maturities for each year until retirement are as follows:
<TABLE>
<S> <C>
2002 $ 8,082,746
2003 8,548,156
2004 9,064,538
2005 5,919,055
-----------
$31,614,495
===========
</TABLE>
In the event of Plan termination or of termination of the ESOP portion of
the Plan, any unallocated shares shall be sold to the Company or on the
open market. The proceeds of such sale shall be used to satisfy the
outstanding principal and interest. The Company has no rights against
shares once they are allocated under the ESOP.
12. CONCENTRATIONS OF CREDIT RISK
Financial instruments which potentially subject the Plan to concentrations
of credit risk consist principally of the Fixed Interest Fund holdings in
fully benefit-responsive group annuity contracts with insurance and other
financial institutions.
The Fixed Interest Fund places its fully benefit-responsive group annuity
contracts with high-credit quality institutions and, by policy, limits the
amount of credit exposure to any one financial institution. If any of the
insurance companies that the group annuity contracts are invested with
fail to perform according to the contract, the asset value of the Plan
could be impaired.
13. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for benefits per
the financial statements to the Form 5500.
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
2001 2000
<S> <C> <C>
Net assets available for benefits
per the financial statements $4,373,828,155 $ 3,996,277,660
Amounts allocated to withdrawing participants -- (12,150,594)
-------------- ---------------
Net assets available for benefits per the Form 5500 $4,373,828,155 $ 3,984,127,066
============== ===============
</TABLE>
-13-
<PAGE>
JOHNSON & JOHNSON SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
2001 2000
<S> <C> <C>
Benefits paid to participants per the financial statements $ 195,200,928 $ 217,806,278
Add: Amounts allocated to withdrawing participants at
December 31, 2001 and 2000 -- 12,150,594
Less: Amounts allocated to withdrawing participants
at December 31, 2000 and 1999 (12,150,594) (6,895,528)
------------- -------------
Benefits paid to participants per the Form 5500 $ 183,050,334 $ 223,061,344
============= =============
</TABLE>
Amounts allocated to the withdrawing participants are recorded on the Form
5500 for benefit claims that have been processed and approved for payment
prior to December 31, 2001 and 2000 but not yet paid as of that date.
-14-
<PAGE>
JOHNSON & JOHNSON SAVINGS PLAN
FORM 5500 SCHEDULE H - PART IV - 4I
SCHEDULE OF ASSETS (HELD AT END OF YEAR)
AS OF DECEMBER 31, 2001
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ISSUES COST FAIR VALUE
<S> <C> <C>
PARTICIPANT-DIRECTED FUNDS*
USGS Fund $ 36,692,797
Fixed Interest Fund 685,666,437
Diversified Equity Fund 974,855,347
J&J Stock Fund 1,663,605,667
Small Cap Fund 20,626,529
Russell 3000 Fund 28,084,622
International Equity Fund 50,511,014
Intermediate Bond Fund 64,096,363
Balanced Fund 238,508,436
NONPARTICIPANT-DIRECTED FUNDS
ESOP $ 86,724,478 599,854,450
Loan Fund -- 33,808,844
Clearing account 3,392,307 3,392,307
------------ ---------------
$ 90,116,785 $ 4,399,702,813
============ ===============
</TABLE>
*Cost need not be disclosed for participant-directed funds.
-15-
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 33-40294) of Johnson & Johnson of our report dated
June 19, 2002 relating to the financial statements and financial statement
schedule of the Johnson & Johnson Savings Plan, which appears in this Form
11-K.
PricewaterhouseCoopers LLP
Florham Park, New Jersey
June 26, 2002
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.A.II
<SEQUENCE>4
<FILENAME>y61804exv99wawii.txt
<DESCRIPTION>FORM 11-K FOR THE RETIREMENT SAVINGS PLAN
<TEXT>
<PAGE>
Exhibit 99(a)(ii)
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the Fiscal Year Ended December 30, 2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
Commission File Number 1-3215
JOHNSON & JOHNSON
RETIREMENT SAVINGS PLAN
(Full title of the Plan)
JOHNSON & JOHNSON
ONE JOHNSON & JOHNSON PLAZA
NEW BRUNSWICK, NEW JERSEY 08933
(Name of issuer of the securities held pursuant to the Plan
and the address of its principal executive office)
<PAGE>
Item 4. Financial Statements and Exhibits
Report of Independent Accountants
Financial Statements:
Statements of Net Assets Available for Benefits as of December 31,
2001 and 2000
Statements of Changes in Net Assets Available for Benefits for the
Years Ended December 31, 2001 and 2000
Notes to Financial Statements
Supplemental Schedules:
Form 5500 Schedule H - Part IV- 4I - Schedule of Assets (Held at End
of Year) as of December 31, 2001
Form 5500 Schedule H - Part IV - 4J - Schedule of Reportable
Transactions for the Year Ended December 31, 2001
Consent of PricewaterhouseCoopers LLP, dated June 26, 2002
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the employee benefit plan) have
duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN
By: /s/ R.J. Darretta
--------------------------------
R. J. Darretta
Chairman, Pension Committee
June 25, 2002
<PAGE>
JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN
FINANCIAL STATEMENTS AND
SUPPLEMENTAL SCHEDULES
AS OF AND FOR THE YEARS ENDED
DECEMBER 31, 2001 AND 2000
<PAGE>
JOHNSON & JOHNSON
RETIREMENT SAVINGS PLAN
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000
- --------------------------------------------------------------------------------
PAGE(S)
Report of Independent Accountants 1
Financial Statements:
Statements of Net Assets Available for Benefits
As of December 31, 2001 and 2000 2
Statements of Changes in Net Assets Available for
Benefits for the Years Ended December 31, 2001 and 2000 3
Notes to Financial Statements 4-8
Supplemental Schedules:
Form 5500 Schedule H -- Part IV -- 4I -- Schedule of
Assets (Held at End of Year) as of December 31, 2001 9
Form 5500 Schedule H -- Part IV -- 4J -- Schedule of
Reportable Transactions for the Year Ended December 31, 2001 10
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Pension and Benefits Committees of
Johnson & Johnson
In our opinion, the accompanying statements of net assets available for benefits
and the related statements of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of the Johnson & Johnson Retirement Savings Plan (the "Plan") as of December 31,
2001 and 2000, and the changes in net assets available for benefits for the
years then ended in conformity with accounting principles generally accepted in
the United States of America. These financial statements are the responsibility
of the Plan's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with auditing standards generally accepted in the
United States of America, which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets and
reportable transactions are presented for the purpose of additional analysis and
are not a required part of the basic financial statements but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. These supplemental schedules are the responsibility of the Plan's
management. The 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.
June 19, 2002
1
<PAGE>
JOHNSON & JOHNSON
RETIREMENT SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 2001 AND 2000
- --------------------------------------------------------------------------------
<Table>
<Caption>
2001 2000
<S> <C> <C>
ASSETS
Investments at fair value
(Notes 2, 5 and 6) $105,187,871 $94,800,234
------------ -----------
Net assets available for benefits $105,187,871 $94,800,234
============ ===========
</Table>
See notes to financial statements.
-2-
<PAGE>
JOHNSON & JOHNSON
RETIREMENT SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000
- --------------------------------------------------------------------------------
<Table>
<Caption>
2001 2000
<S> <C> <C>
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment income:
Net appreciation in fair value of
investments (Note 5) $ 9,708,166 $12,585,948
Interest 203,393 136,147
Dividends 1,312,537 1,608,169
Contributions
Employee contributions (Note 3) 7,956,060 7,599,179
Employer contributions (Note 3) 3,439,758 3,305,053
------------ -----------
Total additions 22,619,914 25,234,496
============ ===========
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Payment to participants (Note 4) 11,938,620 11,452,084
Administrative expenses 293,657 240,659
------------ -----------
Total deductions 12,232,277 11,692,743
------------ -----------
Net increase 10,387,637 13,541,753
Net assets available for benefits,
Beginning of year 94,800,234 81,258,481
------------ -----------
Net assets available for benefits,
End of year $105,187,871 $94,800,234
============ ===========
</Table>
See notes to financial statements.
-3-
<PAGE>
JOHNSON & JOHNSON
RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION
The Johnson & Johnson Retirement Savings Plan (the "Plan") is a defined
contribution plan which was established on March 1, 1990 for eligible
employees of certain subsidiaries of Johnson & Johnson ("J&J" or the
"Company") located in Puerto Rico which have adopted the Plan. The Plan was
designed to provide eligible employees with an opportunity to strengthen
their financial security at retirement by providing an incentive to save
and invest regularly. The funding of the Plan is made through employee and
Company contributions. The assets of the Plan are maintained and
transactions therein are executed by the trustee, Banco Popular de Puerto
Rico.
Participants have the option to invest in any one of three investment
options which include the Equity Fund, Short Term Investment Fund and the
J&J Stock Fund.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements of the Plan are prepared under the accrual basis
of accounting.
VALUATION OF INVESTMENTS
Equity investments in the Johnson & Johnson Stock Fund, administered by
Banco Popular de Puerto Rico, are valued at the closing market price on the
last business day of the year. Equity investments in the Equity Fund,
managed by the Capital Research and Management Company, represent shares of
a registered investment company and are valued at the quoted market price
which represents the net asset value of shares held by the Plan at
year-end.
The cost of equity investments in the Johnson & Johnson Stock Fund is
recorded at the average market price of the stock transactions for the
month during which the contribution is made. Units in the Equity Fund are
purchased throughout the month at the prevailing quoted market price on
those dates.
Deposits in short-term investments in the Short-Term Investment Fund are
principally purchases of shares of the Prime Portfolio of Vanguard Money
Market Reserves, Inc. The Portfolio invests in securities which mature in
less than one year. The value of this portfolio is the market value on
the last business day of the year.
Temporary cash investments are stated at redemption value which
approximates fair value.
USE OF ESTIMATES
The preparation of the Plan's financial statements in conformity with
accounting principles generally accepted in the United States of America
requires the plan administrator to make estimates and assumptions that
affect the reported amounts of net assets available for benefits at the
date of the financial statements and the changes in net assets available
for benefits during the reporting period and, when applicable, disclosures
of contingent assets and liabilities at the date of the financial
statements. Actual results could differ from those estimates.
-4-
<PAGE>
JOHNSON & JOHNSON
RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
RISKS AND UNCERTAINTIES
The Plan provides for various participant investment options in funds which
can invest in any combination of stocks, bonds, fixed income securities,
mutual funds, and other investment securities. Investment securities are
exposed to various risks, such as interest rate, market and credit. Due to
the level of risk associated with certain investment securities and the
level of uncertainty related to changes in the value of investment
securities, it is at least reasonably possible that changes in risks in the
near term would materially affect participants' account balances and the
amounts reported in the Statements of Net Assets Available for Benefits and
the Statements of Changes in Net Assets Available for Benefits.
NET APPRECIATION (DEPRECIATION)
The Plan presents in the Statement of Changes in Net Assets Available for
Benefits the net appreciation (depreciation) in the fair value of
investments, which consists of unrealized appreciation (depreciation) of
the underlying investments and realized gains and losses on the sales of
investments.
PAYMENT OF BENEFITS
Benefits are recorded when paid.
OTHER
Interest and dividend income are recorded as earned on the accrual basis.
Purchases and sales of investment securities are reflected on a trade-date
basis. Gains and losses on sales of investment securities are determined on
the average cost method.
All third party administrative expenses are paid by the Plan, except costs
of entering new investment vehicles which are paid primarily by J&J.
3. CONTRIBUTIONS
Participating employees may contribute a minimum of 3% up to a maximum of
10% pre-tax and/or 1% to 10% post-tax of their base salary. Annual pre-tax
contributions may not exceed $8,000 in 2001 or 2000 under Puerto Rico law.
The Company contributes to the Plan, out of current or accumulated profits,
an amount equal to 75% of the employee's pre-tax contributions for the Plan
year up to a maximum of 6%.
Contributions are made to the Plan by participants through payroll
deductions and by the Company on behalf of participants. Employee
contributions are to be invested in any of the three investment funds at
the direction of the participating employees. All Company contributions are
made to the J&J Stock Fund, except for participants over the age of 50, who
may choose the alternative investments.
-5-
<PAGE>
JOHNSON & JOHNSON
RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
4. PARTICIPANT ACCOUNTS AND BENEFITS
All participants are fully vested in their contributions and the Company
match. The benefit to which a Plan participant is entitled is the amount
provided by contributions (Company and participant) and investment earnings
thereon (including net realized and unrealized investment gains and losses)
which have been allocated to such participant's account balance.
Allocations are based on participant's earnings or account balance, as
defined.
Participants are allowed to withdraw their after-tax contributions and
earnings thereon, at any time. Participants may withdraw before-tax
contributions only upon meeting certain hardship conditions.
5. INVESTMENTS
The following presents investments that represent 5% or more of the Plan's
net assets.
<Table>
<Caption>
AS OF DECEMBER 31,
2001 2000
<S> <C> <C>
Johnson & Johnson Stock Fund, 1,594,234 shares
and 1,607,604 shares, respectively* $ 95,056,871 $84,576,085
Equity Fund, 185,626 shares
and 186,677 shares, respectively 5,295,914 5,778,407
Total of remaining Fund which was less than
5% of the Plan's net assets 4,835,086 4,445,742
------------ -----------
$105,187,871 $94,800,234
============ ===========
</Table>
* Nonparticipant-directed
During 2001 and 2000, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) appreciated
in value by $9,708,166 and $12,585,948 respectively, as follows:
<Table>
<Caption>
FOR THE YEARS ENDED DECEMBER 31,
2001 2000
<S> <C> <C>
Equities $ (448,807) $ (250,523)
J&J Common Stock 10,156,973 12,836,471
----------- -----------
$ 9,708,166 $12,585,948
=========== ===========
</Table>
-6-
<PAGE>
JOHNSON & JOHNSON
RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
6. NON-PARTICIPANT DIRECTED INVESTMENTS
Included in the J&J Stock Fund are participant and non-participant directed
investments. Information about the net assets and the significant
components of the changes in net assets relating to the fund is as follows:
<Table>
<Caption> AS OF DECEMBER 31,
2001 2000
<S> <C> <C>
Net assets:
J&J Stock Fund $ 95,056,871 $ 84,576,085
</Table>
<Table>
<Caption> FOR THE YEARS ENDED DECEMBER 31,
2001 2000
<S> <C> <C>
Changes in net assets:
Contributions $ 10,249,063 $ 9,693,301
Investment income 1,124,838 1,023,855
Net appreciation in fair value 10,156,973 12,836,471
Benefits paid to participants (10,457,679) (10,252,939)
Administrative expenses (223,306) (211,172)
Assets transferred (369,103) (138,000)
------------- -------------
$ 10,480,786 $ 12,951,516
============= =============
</Table>
7. TAX STATUS
The Plan constitutes as a qualified plan under Section 165(a) of the Puerto
Rico Income Tax Act of 1954 as amended (the "ITA"), and the Plan and the
related trust accounts are exempt from Puerto Rico income taxes under
Section 165(a) and 165(e) of the ITA.
The Plan has been amended since receiving the determination letter.
However, the Plan administrator and the Plan's tax counsel believe that the
Plan is currently designed and operated in compliance with the applicable
requirements of the Puerto Rico tax code. Therefore, no provision for
income taxes has been included in the Plan's financial statements.
8. TERMINATION PRIORITIES
The Company has the right to terminate the Plan at any time and in the
event the Plan is terminated, subject to conditions set forth in ERISA, the
amount of each participant's account balance in the Plan is fully vested.
-7-
<PAGE>
JOHNSON & JOHNSON
RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
9. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for benefits per
the financial statements to the Form 5500:
AS OF DECEMBER 31,
2001 2000
Net assets available for benefits
per the financial statements $105,187,871 $94,800,234
Amounts allocated to withdrawing participants -- (1,252,098)
------------ -----------
Net assets available for benefits per the
Form 5500 $105,187,871 $93,548,136
------------ -----------
FOR THE YEARS ENDED
DECEMBER 31,
2001 2000
Benefits paid to participants per the
financial statements $ 11,938,620 $11,452,084
Add: Amounts allocated to withdrawing participants
at December 31, 2001 and 2000 1,252,098
Less: Amounts allocated to withdrawing
participants at December 31, 2000 and 1999 (1,252,098) (601,685)
------------ -----------
Benefits paid to participants per the Form 5500 $ 10,686,522 $12,102,497
------------ -----------
Amounts allocated to the withdrawing participants are recorded on the Form 5500
for benefit claims that have been processed and approved for payment prior to
December 31, 2001 and 2000 but not yet paid as of that date.
8
<PAGE>
JOHNSON & JOHNSON
RETIREMENT SAVINGS PLAN
FORM 5500 SCHEDULE H -- PART IV -- 4I
SCHEDULE OF ASSETS (HELD AT END OF YEAR)
AS OF DECEMBER 31, 2001 SUPPLEMENTAL SCHEDULE
- --------------------------------------------------------------------------------
<Table>
<Caption>
ISSUES COST FAIR VALUE
<S> <C> <C>
PARTICIPANT-DIRECTED FUNDS*
Short-term investment fund $ 4,835,086
Equity Fund 5,295,914
NONPARTICIPANT-DIRECTED FUNDS
J&J Stock Fund $42,833,353 95,056,871
----------- ------------
$42,833,353 $105,187,871
=========== ============
</Table>
*Cost need not be disclosed for participant-directed funds.
-9-
<PAGE>
JOHNSON & JOHNSON
RETIREMENT SAVINGS PLAN
FORM 5500 SCHEDULE H -- PART IV -- 4J
SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 2001 SUPPLEMENTAL SCHEDULE
- --------------------------------------------------------------------------------
<Table>
<Caption>
DISPOSED ACQUIRED
<S> <C> <C> <C> <C> <C> <C>
SECURITY/PARTY SALES COSTS PROCEEDS GAINS/(LOSSES) PURCHASES COSTS
DESCRIPTION (# of Transactions) (# of Transactions)
SERIES OF
TRANSACTIONS
Johnson & Johnson
Common Stock 26 $10,334,059 $11,125,094 $791,035 69 $11,471,896
</Table>
-10-
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 33-32875) of Johnson & Johnson of our report dated
June 19, 2002 relating to the financial statements and financial statement
schedules of the Johnson & Johnson Retirement Savings Plan, which appears in
this Form 11-K.
PricewaterhouseCoopers LLP
Florham Park, New Jersey
June 26, 2002
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.A.III
<SEQUENCE>5
<FILENAME>y61804exv99wawiii.txt
<DESCRIPTION>THE SAVINGS PLAN FOR UNION REP. EMPLY. FORM 11-K
<TEXT>
<PAGE>
Exhibit 99(a)(iii)
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 11-K
--------------------------------------
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the Fiscal Year Ended December 30, 2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
Commission File Number 1-3215
--------------------------------------
JOHNSON & JOHNSON SAVINGS PLAN
FOR UNION REPRESENTED EMPLOYEES
(Full title of the Plan)
JOHNSON & JOHNSON
ONE JOHNSON & JOHNSON PLAZA
NEW BRUNSWICK, NEW JERSEY 08933
(Name of issuer of the securities held pursuant to the Plan
and the address of its principal executive office)
<PAGE>
Item 4. Financial Statements and Exhibits
Report of Independent Accountants
Financial Statements:
Statements of Net Assets Available for Benefits as of December 31,
2001 and 2000
Statements of Changes in Net Assets Available for Benefits for the
Years Ended December 31, 2001 and 2000
Notes to Financial Statements
Supplemental Schedule:
Form 5500 Schedule H - Part IV - 4I - Schedule of Assets (Held at End
of Year) as of December 31, 2001
Consent of PricewaterhouseCoopers LLP, dated June 26, 2002
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the employee benefit plan) have
duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
JOHNSON & JOHNSON SAVINGS PLAN
FOR UNION REPRESENTED EMPLOYEES
By: /s/ R.J. Darretta
---------------------------------
R. J. Darretta
Chairman, Pension Committee
June 25, 2002
<PAGE>
JOHNSON & JOHNSON SAVINGS PLAN
FOR UNION REPRESENTED EMPLOYEES
_____________________
FINANCIAL STATEMENTS AND
SUPPLEMENTAL SCHEDULE
AS OF AND FOR THE YEARS ENDED
DECEMBER 31, 2001 AND 2000
<PAGE>
JOHNSON & JOHNSON
SAVINGS PLAN FOR UNION REPRESENTED EMPLOYEES
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000
________________________________________________________________________________
<Table>
<Caption>
PAGE(S)
<S> <C>
Report of Independent Accountants 1
Financial Statements:
Statements of Net Assets Available for Benefits
as of December 31, 2001 and 2000 2
Statements of Changes in Net Assets Available for
Benefits for the Years Ended December 31, 2001 and 2000 3
Notes to Financial Statements 4-10
Supplemental Schedule:
Form 5500 Schedule H -- Part IV -- 4I -- Schedule of
Assets (Held at End of Year) as of December 31, 2001 11
</Table>
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Pension and Benefits Committees of
Johnson & Johnson
In our opinion, the accompanying statements of net assets available for
benefits and the related statements of changes in net assets available for
benefits present fairly, in all material respects, the net assets available for
benefits of the Johnson & Johnson Savings Plan for Union Represented Employees
(the "Plan") as of December 31, 2001 and 2000 and the changes in net assets
available for benefits for the years then ended in conformity with accounting
principles generally accepted in the United States of America. These financial
statements are the responsibility of the Plan's management; our responsibility
is to express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with auditing standards
generally accepted in the United States of America, which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets is
presented for the purpose of additional analysis and is not a required part of
the basic financial statements but is supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. This supplemental schedule
is the responsibility of the Plan's management. The supplemental schedule has
been subjected to the auditing procedures applied in the audits 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.
June 19, 2002
1
<PAGE>
JOHNSON & JOHNSON
SAVINGS PLAN FOR UNION REPRESENTED EMPLOYEES
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 2001 AND 2000
<Table>
<Caption>
2001 2000
<S> <C> <C>
ASSETS
Deposits in Group Annuity Contracts (Notes 2, 5 and 7) $ 2,449,117 $ 2,243,829
Investments at fair value (Notes 2, 5 and 6) 28,930,608 24,729,781
Investments in Master Trust (Notes 2, 5 and 7) 6,965,736 7,566,740
Accrued dividends and interest receivable 19,274 19,791
----------- -----------
Net assets available for benefits $38,364,735 $34,560,141
----------- -----------
</Table>
See Notes to Financial Statements
-2-
<PAGE>
JOHNSON & JOHNSON
SAVINGS PLAN FOR UNION REPRESENTED EMPLOYEES
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000
<Table>
<Caption>
2001 2000
<S> <C> <C>
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment income:
Net appreciation in fair value of investments (Note 5) $ 2,880,078 $ 2,735,116
Interest 220,528 216,995
Dividends 394,699 363,700
Contributions:
Employee contributions (Note 3) 2,943,621 2,752,843
Employer contributions (Note 3) 681,952 596,636
Assets Transferred 17,868 -
----------- -----------
Total additions 7,138,746 6,665,290
----------- -----------
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Payments to participants (Note 4) 3,176,114 2,420,474
Administrative expenses 158,038 142,049
----------- -----------
Total deductions 3,334,152 2,562,523
----------- -----------
Net increase 3,804,594 4,102,767
Net assets available for benefits,
Beginning of year 34,560,141 30,457,374
----------- -----------
Net assets available for benefits,
End of year $38,364,735 $34,560,141
----------- -----------
</Table>
See notes to financial statements.
-3-
<PAGE>
JOHNSON & JOHNSON
SAVINGS PLAN FOR UNION REPRESENTED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. ORGANIZATION
The Johnson & Johnson Savings Plan for Union Represented Employees (the
"Plan") is a defined contribution plan which was established on January 1,
1993 by Johnson & Johnson ("J&J" or the "Company"). The Plan was designed
to enhance the existing retirement program of eligible employees covered
under collective bargaining agreements with the Company. The funding of
the Plan is made through employee and Company contributions. The assets of
the Plan are maintained in the Johnson & Johnson Savings Plan Master Trust
(the "Trust") and transactions therein are executed by the trustee, State
Street Trust Company ("State Street"). The Johnson & Johnson Savings Plan
Master Trust is allocated based upon the total of each individual
participant's share of the Trust.
Participants have the option to invest in any one of four investment
options which include the Fixed Interest Fund, J&J Stock Fund, U.S.
Government Securities ("USGS") Fund and the Diversified Equity Fund.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements of the Plan are prepared under the accrual
method of accounting.
VALUATION OF INVESTMENTS
Equity investments in the Johnson & Johnson Stock Fund, administered by
State Street, are valued at the closing market price on the last business
day of the year. The cost of equity investments in the Johnson & Johnson
Stock Fund is recorded at the market price of the stock transactions for
the day during which the contribution is made.
The investments in the USGS, Fixed Interest and Diversified Equity Funds
represent the Plan's share of assets in the Trust. The USGS Fund consists
of short-term obligations that are issued or guaranteed by the U.S.
Government. Investments are valued at cost, which approximates market
value. Deposits in group annuity contracts in the Fixed Interest Fund are
recorded at their contract value, which approximates fair value, because
these investments have fully benefit-responsive features. Contract value
represents contributions and reinvested income, less any withdrawals plus
accrued interest. Participants may direct the withdrawal or transfer of
all or a portion of their investment at contract value. However,
withdrawals influenced by employer initiated events, such as in connection
with the sale of a business, may result in a distribution at other than
contract value. There are no reserves against contract values for credit
risk of contract issuers or otherwise. The average yield and crediting
interest rate of the Fixed Interest Fund was 6.44% for 2001 and 6.05% for
2000. The crediting interest rate for the investment contracts is either
agreed-to in advance with the issuer or varies based on an agreed-to
formula, but cannot be less than zero.
Equity investments and corporate obligations in the Diversified Equity
Fund, managed by the Capital Guardian Trust Company and J.P. Morgan
Investment Management, Inc., are traded on a national securities exchange
and are valued at the last reported market sales price on the last business
day of the year. Investments in the Diversified Equity Fund are purchased
periodically by Capital Guardian Trust Company and J.P. Morgan Investment
Management, Inc. based on the
-4-
<PAGE>
JOHNSON & JOHNSON
SAVINGS PLAN FOR UNION REPRESENTED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
prevailing market values of the underlying investments.
Temporary cash investments are stated at redemption value which approximates
fair value.
NET APPRECIATION (DEPRECIATION)
The Plan presents in the Statements of Changes in Net Assets Available for
Benefits the net appreciation (depreciation) in the fair value of investments
which consists of unrealized appreciation (depreciation) of the underlying
investments and realized gains and losses on sales of investments.
PAYMENTS OF BENEFITS
Benefits are recorded when paid.
USE OF ESTIMATES
The preparation of the Plan's financial statements in conformity with
accounting principles generally accepted in the United States of America
requires the plan administrator to make estimates and assumptions that affect
the reported amounts of net assets available for benefits at the date of the
financial statements and the changes in net assets available for benefits
during the reporting period and, when applicable, disclosure of contingent
assets and liabilities at the date of the financial statements. Actual results
could differ from those estimates.
RISKS AND UNCERTAINTIES
The Plan provides for various participant investment options in funds which can
invest in any combination of stocks, bonds, fixed income securities, mutual
funds, and other investment securities. Investment securities are exposed to
various risks, such as interest rate, market and credit. Due to the level of
risk associated with ceratin investment securities and the level of uncertainty
related to changes in the value of investment securities, it is at least
reasonably possible that changes in risks in the near term would materially
affect participants' account balances and the amounts reported in the
Statements of Net Assets Available for Benefits and the Statements of Changes
in Net Assets Available for Benefits.
NEW ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board (FASB) issued SFAS
No. 133, "Accounting for Derivative Instruments and Hedging Activities" (SFAS
No. 133), as amended. SFAS No. 133 requires that an entity recognize all
derivative instruments and measure those instruments at fair value.
The Plan was required to adopt SFAS No. 133 effective January 1, 2001.
Management initially was unable to determine the impact of SFAS No. 133 on the
Plan financial statements as a result of the inconsistency in accounting
literature between SFAS No. 133, requiring derivative instruments to be
measured at fair value and the AICPA Audit and Accounting Guide on "Audits of
Employee Benefit Plans" and Statement of Position 94-4, "Reporting of
Investment Contracts Held by Health and Welfare Benefit Plans and
Defined-Contribution Pension Plans," (SOP 94-4) requiring benefit responsive
investment contracts (including synthetic GICs) held by defined-contribution
pension plans to be measured at contract value.
In October 2001, the Derivatives Implementation Group (DIG) of the FASB
tentatively released Implementation Issue C19 (DIG C19), which provides that
fully benefit responsive investment
-5-
<PAGE>
JOHNSON & JOHNSON
SAVINGS PLAN FOR UNION REPRESENTED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
________________________________________________________________________________
contracts accounted for under either paragraph 4 or 5 of SOP 94-4 are not
subject to SFAS No. 133. The tentative guidance included in DIG C19 has been
incorporated into an exposure draft of the amendment of FAS 133. Although
this amendment project has yet to be finalized, management believes that
it provides the most relevant accounting guidance for fully benefit
responsive investment contracts held by defined-contribution pension plans.
Accordingly, the Plan has measured all fully benefit responsive investment
contracts at contract value at December 31, 2001 and 2000. The FAS 133
amendment project is expected to be finalized during 2002. The Plan holds no
other material derivative financial instruments at December 31, 2001 or
2000.
OTHER
Interest and dividend income is recorded as earned on the accrual basis.
Purchases and sales of investment securities are reflected on a trade-date
basis. Gains and losses on sales of investment securities are determined on
the average cost method. Third party administrative expenses are paid by the
Plan, except costs of entering new investment vehicles which will be paid
primarily by the Company.
3. CONTRIBUTIONS
Participating employees may contribute a minimum of $0.16 per hour up to a
maximum of $2.40 per hour, depending on the negotiated contract rate, of the
first forty hours worked in each payroll week. All contributions are on a
pre-tax basis. Annual pre-tax contributions may not exceed $10,500 in 2001
or 2000. The Company contributes to the Plan, out of current or accumulated
profits, an amount equal to 25% or 50% in 2001 and 25% or 40% in 2000
(depending on the negotiated collective bargaining agreement) of the
employee directed contributions on the first $0.16 to $1.20 per hour,
directly into J&J common stock.
Contributions are made to the Plan by participants through payroll
deductions and by the Company on behalf of the participants. Employee
contributions are to be invested in any of the four investment funds at the
direction of the participating employees. All Company contributions are made
to the J&J Stock Fund.
4. PARTICIPANT ACCOUNTS AND BENEFITS
All participants are fully vested in their contributions and the Company
match. The benefit to which a Plan participant is entitled is the amount
provided by contributions (Company and participant) and investment earnings
thereon (including net realized and unrealized investment gains and losses)
which have been allocated to such participant's account balance. Allocations
are based on participant's earnings or account balances, as defined.
Participants may withdraw before-tax contributions only upon meeting certain
hardship conditions.
-6-
<PAGE>
JOHNSON & JOHNSON
SAVINGS PLAN FOR UNION REPRESENTED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
5. INVESTMENTS
The following presents investments that represent 5% or more of the Plan's
net assets.
<Table>
<Caption>
AS OF DECEMBER 31,
2001 2000
<S> <C> <C>
Johnson & Johnson Stock Fund* $28,930,608 $24,729,781
Diversified Equity Fund 5,756,356 6,405,424
Fixed Interest Fund 2,449,117 2,243,829
Total of remaining investment accounts,
each of which was less than 5% of the
Plan's net assets 1,209,380 1,161,316
----------- -----------
$38,345,461 $34,540,350
=========== ===========
* Non-participant directed
</Table>
During 2001 and 2000, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) appreciated
in value by $2,880,078 and $2,735,116 respectively, as follows:
<Table>
<Caption>
AS OF DECEMBER 31,
2001 2000
<S> <C> <C>
Equities $ (243,555) $ (105,255)
J&J Common Stock 3,123,633 2,840,371
---------- ----------
$2,880,078 $2,735,116
========== ==========
</Table>
6. NON-PARTICIPANT-DIRECTED INVESTMENTS
Included in the J&J Stock Fund are participant and non-participant
directed investments. Information about the net assets and the significant
components of the changes in net assets relating to this fund is as follows:
<Table>
<Caption>
AS OF DECEMBER 31,
2001 2000
<S> <C> <C>
Net assets:
J&J Stock Fund $28,931,215 $24,730,717
</Table>
-7-
<PAGE>
JOHNSON & JOHNSON
SAVINGS PLAN FOR UNION REPRESENTED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
<Table>
<Caption>
FOR THE YEARS ENDED DECEMBER 31,
2001 2000
<S> <C> <C>
Changes in net assets:
Contributions $ 2,490,005 $ 2,201,410
Investment income 350,012 294,257
Net appreciation in fair value 3,123,633 2,840,371
Benefits paid to participants (2,013,296) (1,649,755)
Administrative expenses (96,971) (93,211)
Assets transferred 347,115 14,800
----------- -----------
$ 4,200,498 $ 3,607,872
=========== ===========
</Table>
7. INVESTMENTS IN SAVINGS PLAN MASTER TRUST
The investments in the USGS, Fixed Interest, J&J Stock and the Diversified
Equity Funds are included in the Savings Plan Trust. The Trust also
includes other funds not part of the Union Plan. The Trust's net assets,
income, and expenses are allocated to the Plan based on the total of each
participant's share of the four funds of the Trust included in the Plan.
The Plan holds approximately 0.95% and 0.94% of the Trust's net assets as
of December 31, 2001 and 2000 respectively. Information concerning the
Savings Plan Master Trust's investment income and investments held is as
follows:
<Table>
<Caption>
AS OF DECEMBER 31, 2001
INVESTMENTS BY TYPE: FAIR VALUE COST
<S> <C> <C>
Interest bearing cash $ 117,068,720 $ 117,068,720
Government securities 37,502,467 36,056,366
Common stocks (common) 2,195,819,664 767,961,497
Equities 995,845,728 837,310,795
Deposits in group annuity contracts* 671,161,230 671,161,230
-------------- --------------
$4,017,397,809 $2,429,558,608
============== ==============
</Table>
<Table>
<Caption>
AS OF DECEMBER 31, 2000
INVESTMENTS BY TYPE: FAIR VALUE COST
<S> <C> <C>
Interest bearing cash $ 137,547,662 $ 137,547,662
Government securities 31,598,063 30,000,363
Common stocks 1,899,050,245 660,830,884
Equities 992,140,689 766,755,736
Deposits in group annuity contracts* 601,183,330 601,183,330
-------------- --------------
$3,661,519,989 $2,196,317,975
============== ==============
</Table>
* Stated at cost which approximates fair value.
-8-
<PAGE>
JOHNSON & JOHNSON
SAVINGS PLAN FOR UNION REPRESENTED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
<Table>
<Caption>
FOR THE YEARS ENDED DECEMBER 31,
--------------------------------
INVESTMENT INCOME BY TYPE 2001 2000
<S> <C> <C>
Interest $ 43,822,281 $ 42,571,642
Dividends 37,670,605 34,561,040
Net appreciation (depreciation) 208,126,979 228,690,355
----------- -----------
$ 289,619,865 $ 305,823,037
=========== ===========
</Table>
8. TAX STATUS
The Internal Revenue Service has determined and informed the Company by a
letter dated April 26, 1996, that the Plan and the Trust are designed in
accordance with applicable sections of the Internal Revenue Code ("IRC").
The Plan has been amended since receiving the determination letter.
However, the Plan administrator believes that the Plan is designed and is
currently being operated in compliance with applicable requirements of the
IRC.
9. TERMINATION PRIORITIES
The Company has the right to terminate the Plan at any time and in the
event the Plan is terminated, subject to conditions set forth in ERISA, the
amount of each participant's account balance in the Plan is fully vested.
10. CONCENTRATIONS OF CREDIT RISK
Financial instruments which potentially subject the Plan to concentrations
of credit risk consist principally of the Fixed Interest Fund holdings in
fully benefit-responsive group annuity contracts with insurance and other
financial institutions.
The Fund places its fully benefit-responsive group annuity contracts with
high-credit quality institutions and, by policy, limits the amount of
credit exposure to any one financial institution. If any of the insurance
companies that the group annuity contracts are invested with fail to
perform according to the contract, the asset value of the Plan could be
impaired.
-9-
<PAGE>
JOHNSON & JOHNSON
SAVINGS PLAN FOR UNION REPRESENTED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
11. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for benefits per
the financial statements to the Form 5500:
<Table>
<Caption>
AS OF DECEMBER 31,
2001 2000
<S> <C> <C>
Net assets available for benefits
per the financial statements $38,364,735 $34,560,141
Amounts allocated to withdrawing
participants -- (208,357)
----------- -----------
Net assets available for benefits per
the Form 5500 $38,364,735 $34,351,784
----------- -----------
</Table>
<Table>
<Caption>
FOR THE YEARS ENDED
DECEMBER 31,
2001 2000
<S> <C> <C>
Benefits paid to participants per
the financial statements $3,176,114 $2,420,474
Add: Amounts allocated to withdrawing
participants at December 31, 2001 and
2000 -- 208,357
Less: Amounts allocated to withdrawing
participants at December 31, 2001 and
2000 (208,357) (118,294)
---------- ----------
Benefits paid to participants per the
Form 5500 $2,967,757 $2,510,537
---------- ----------
</Table>
Amounts allocated to the withdrawing participants are recorded on the Form 5500
for benefit claims that have been processed and approved for payment prior to
December 31, 2001 and 2000 but not yet paid as of that date.
-10-
<PAGE>
JOHNSON & JOHNSON
SAVINGS PLAN FOR UNION REPRESENTED EMPLOYEES
FORM 5500 SCHEDULE H - PART IV - 4I
SCHEDULE OF ASSETS (HELD AT END OF YEAR)
AS OF DECEMBER 31, 2001 SUPPLEMENTAL SCHEDULE
- --------------------------------------------------------------------------------
<Table>
<Caption>
ISSUES COST FAIR VALUE
<S> <C> <C>
PARTICIPANT-DIRECTED FUNDS*
USGS Fund $ 1,192,607
Fixed Interest Fund 2,460,540
Diversified Equity Fund 5,761,252
NONPARTICIPANT-DIRECTED FUNDS
J&J Stock Fund $ 14,909,186 28,931,215
Clearing account 19,121 19,121
------------- -------------
$ 14,928,307 $ 38,364,735
------------- -------------
</Table>
* Cost need not be disclosed for participant-directed funds.
-11-
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 33-52252) of Johnson & Johnson of our report dated
June 19, 2002 relating to the financial statements and financial statement
schedule of the Johnson & Johnson Savings Plan for Union Represented
Employees, which appears in this Form 11-K.
PricewaterhouseCoopers LLP
Florham Park, New Jersey
June 26, 2002.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.A.IV
<SEQUENCE>6
<FILENAME>y61804exv99wawiv.txt
<DESCRIPTION>CENTOCOR QUALIFIED SAVINGS/RETIREMENT PLAN 11-K
<TEXT>
<PAGE>
Exhibit 99(a)(iv)
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 11-K
------------------------------
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the Period Ended October 17, 2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
Commission File Number 1-3215
------------------------------
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>
Item 4. Financial Statements and Exhibits
Report of Independent Accountants
Financial Statements:
Statements of Net Assets Available for Plan Benefits at October 17,
2001 and December 31, 2000
Statements of Changes in Net Assets Available for Plan Benefits for
the period January 1 through October 17, 2001 and the year ended
December 31, 2000
Notes to Financial Statements
Consent of PricewaterhouseCoopers LLP, dated June 27, 2002
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 25, 2002
1
<PAGE>
CENTOCOR QUALIFIED SAVINGS AND RETIREMENT PLAN
-----------------
FINANCIAL STATEMENTS FOR
THE PERIOD JANUARY 1 THROUGH
OCTOBER 17, 2001 AND THE YEAR
ENDED DECEMBER 31, 2000
AND
SUPPLEMENTAL SCHEDULE
FOR THE PERIOD
JANUARY 1 THROUGH OCTOBER 17, 2001
<PAGE>
CENTOCOR QUALIFIED SAVINGS AND RETIREMENT PLAN
TABLE OF CONTENTS
OCTOBER 17, 2001 AND DECEMBER 31, 2000
<TABLE>
<CAPTION>
PAGES
<S> <C>
Report of Independent Accountants 1
Financial Statements:
Statements of Net Assets Available for Plan Benefits at
October 17, 2001 and December 31, 2000 2
Statements of Changes in Net Assets Available for Plan
Benefits for the period January 1 through
October 17, 2001 and the year ended December 31, 2000 3
Notes to Financial Statements 4-8
</TABLE>
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants and Administrator of the Centocor Qualified Savings
and Retirement Plan':
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 October 17, 2001 and December 31, 2000, and the changes in net assets
available for plan benefits for the period January 1 through October 17, 2001
and the year ended December 31, 2000, in conformity with accounting principles
generally accepted in the United States of America. These financial statements
are the responsibility of the Plan's management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with auditing standards
generally accepted in the United States of America, 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 audits provide a reasonable basis for our opinion.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets held
for investment purposes 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 audits 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.
As discussed in Note 1 to the financial statements, the Plan merged into the
Johnson and Johnson Savings Plan on October 17, 2001.
May 9, 2002
1
<PAGE>
CENTOCOR QUALIFIED SAVINGS AND RETIREMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
<TABLE>
<CAPTION>
October 17, December 31,
2001 2000
----------- ------------
<S> <C> <C>
Assets:
Investments at fair value $ --- $52,479,036
Receivables:
Employer's contribution --- 3,948,591
Loans from participants --- 623,716
----- -----------
--- 4,572,307
----- -----------
Total assets $ --- $57,051,343
===== ===========
Net assets available for Plan benefits $ --- $57,051,343
===== ===========
</TABLE>
See accompanying Notes to Financial Statements.
2
<PAGE>
CENTOCOR QUALIFIED SAVINGS AND RETIREMENT PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
<TABLE>
<CAPTION>
January 1
through Year ended
October 17, December 31,
2001 2000
------------- -------------
<S> <C> <C>
Additions:
Interest and dividend income $ 527,178 $ 3,198,894
Net depreciation
in fair value of investments (5,057,094) (4,751,892)
Contributions:
Employee --- 8,605,294
Employer --- 3,948,591
Participant rollovers into Plan --- 3,132,956
------------ ------------
Total additions (4,529,916) 14,133,843
Deductions:
Benefits paid (6,481,478) (2,556,042)
Forfeitures (630,058) ---
------------ ------------
Total deductions (7,111,536) (2,556,042)
Other income (expense), net (848) 474
------------ ------------
Net (decrease) increase (11,642,300) 11,578,275
Net assets available for Plan benefits:
Beginning of year 57,051,343 45,473,068
------------ ------------
Transfer to J&J Savings Plan (45,409,043) ---
------------ ------------
End of year $ --- $ 57,051,343
============ ============
</TABLE>
See accompanying Notes to Financial Statements.
3
<PAGE>
CENTOCOR QUALIFIED SAVINGS AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
NOTE 1 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.
Plan Merger
Effective December 31, 2000, all participants in the Plan who were
employed by Centocor on December 31, 2000 became fully vested. All
participant contributions were suspended. Initiation of new loans was
suspended. The requirement that a participant must take all available
loans under the plan before receiving his or her participant directed
contributions in the form of a hardship withdrawal was eliminated.
All Centocor employees employed on December 31, 2000 were eligible to
participate in the Johnson & Johnson Savings Plan beginning January 1,
2001.
Effective October 17, 2001, Centocor delegated all of its powers and
duties as the Administrator of the Plan to Johnson & Johnson. In October
2001, Centocor transferred all assets in the Centocor Qualified Savings
and Retirement Plan to the Johnson & Johnson Savings Plan.
On April 26, 2001, Johnson & Johnson announced a two-for-one stock split
to holders of record on May 22, 2001 and effective June 12, 2001. The
stock split does not impact the value of any of the Plan's investment
funds.
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, were eligible to participate in the Plan.
Employees were able to participate as of the first date of his/her
employment. Substantially all of the legal, accounting and administrative
expenses associated with Plan operations were paid by the Company.
Contributions
Eligible employees were able to 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 were able to be limited at the discretion of the
Company.
Employee contributions were 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 were made
principally in the Johnson & Johnson Common Stock Fund.
4
<PAGE>
CENTOCOR QUALIFIED SAVINGS AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
The Company was able to elect, but was 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 2000, the Company elected to contribute an amount
equal to 50 percent of the contributions of each employee. The Company's
contribution was based upon annual employee contributions up to a level
of 6 percent of their cash compensation. Additionally, in 2000, the
Company committed to make a contribution equal to 1% of each employee's
compensation. At December 31, 2000, 33,329 shares of the Johnson &
Johnson Common Stock Fund, with a fair value of $99.5781 per share
determined by the average trade price for the last twenty days in
December of 2000 and $57 in cash was due to the Plan from the Company for
its 2000 contribution. Participant forfeitures of $630,058 were used for
the 2000 Company contribution.
Participants' Accounts
Separate accounts were maintained by the Trustee for each participant.
Each participant's account reflected 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 was
reinvested in the same programs.
Participants were able to 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 were fully (100%) vested and non-forfeitable.
Employer contributions were fully vested upon death, total and permanent
disability, or attainment of age 65; otherwise, employer contributions
were subject to vesting percentages based on years of service, as defined
by the Plan documents. Employee non-vested forfeitures were used by the
Company to offset employer contributions. The amount of forfeitures for
2001 and 2000 were $630,058 and $112,772, respectively. The employer
contributions vesting percentages were 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 were normally payable to
Plan participants upon retirement, death, termination of Company
employment or total and permanent disability.
5
<PAGE>
CENTOCOR QUALIFIED SAVINGS AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
A participant, while still an employee, generally was able to withdraw
all or a portion of his vested, non-forfeitable tax-deferred contribution
account if such amount was 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 was required to first be taken
as a loan as noted below.
Any additional funds required would be distributed as a hardship
withdrawal subject to income tax and penalties. Such loan and withdrawal
would 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 were able to 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 bore interest at prevailing market rates. Loans were required
to 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 the participants' accounts.
NOTE 2 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 period.
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 the Plan's financial statements, in conformity with
accounting principles generally accepted in the United States of America,
requires management to make estimates and assumptions that affect the
reported amounts of net assets available for plan benefits at the date of
the financial statements and the changes in net assets available for plan
benefits during the reporting period and, when
6
<PAGE>
CENTOCOR QUALIFIED SAVINGS AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
applicable, disclosure of contingent assets and liabilities at the date
of the financial statements. Actual results could differ from those
estimates.
Risks and Uncertainties
The Plan provided for various participant investment options in funds,
which could invest in any combination of stocks, bonds, fixed income
securities, mutual funds and other investment securities. Investment
securities were exposed to various risks, such as interest rate, market
and credit.
Related Party Transactions
Certain Plan investments were shares of mutual funds managed by the
Trustee. Therefore, these transactions qualified as party - in -
interest.
Payment of benefits
Benefit payments are recorded when paid.
NOTE 3 INVESTMENTS
The number of participants in the investment programs at October 17, 2001
and December 31, 2000 was as follows:
<TABLE>
<CAPTION>
2001 2000
---- ----
<S> <C> <C>
Johnson & Johnson Common Stock Fund --- 1,370
Vanguard Money Market Reserves - Prime Portfolio --- 355
Vanguard Bond Index Fund - Total Bond Market Portfolio --- 401
Vanguard Index Trust - 500 Portfolio --- 1,223
Vanguard U.S. Growth Portfolio --- 1,152
Vanguard/Windsor II --- 594
Templeton Foreign Fund --- 489
Fidelity Contrafund --- 758
</TABLE>
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 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
7
<PAGE>
CENTOCOR QUALIFIED SAVINGS AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
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 October 17, 2001 and December 31, 2000 were
as follows:
<TABLE>
<CAPTION>
October 17, December 31,
Name of Issuer and Title of Issue At, 2001 2000
----------- ------------
<S> <C> <C>
Johnson & Johnson Common Stock Fund $ --- $ 13,665,693*
Vanguard Money Market Reserves - Prime Portfolio --- 2,131,304
Vanguard Bond Index Fund - Total Bond Market Portfolio --- 2,358,063*
Vanguard Index Trust - 500 Portfolio --- 16,809,319*
Vanguard U.S. Growth Portfolio --- 8,469,201*
Vanguard/Windsor II --- 2,929,833*
Templeton Foreign Fund --- 1,970,561
Fidelity Contrafund --- 4,145,062*
--------- ------------
$ --- $ 52,479,036
========= ============
</TABLE>
* Represents 5% or more of net assets available for Plan benefits
During the period January 1 through October 17, 2001 and the year ended
December 31, 2000, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) appreciated
(depreciated) in value as follows:
<TABLE>
<CAPTION>
2001 2000
----------- -----------
<S> <C> <C>
Mutual Funds $(6,521,644) $(6,367,266)
Common Stock 1,464,550 1,615,374
----------- -----------
$(5,057,094) $(4,751,892)
=========== ===========
</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 was operated in
compliance with applicable requirements of the IRC.
8
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in Registration
Statements on Form S-8 (No. 333-86611) of Johnson & Johnson of our
report dated May 9, 2002, relating to the financial statements and
supplemental schedule of the Centocor Qualified Savings and Retirement
Plan, which appears in this Form 11-K.
PricewaterhouseCoopers LLP
Philadelphia, PA
June 27, 2002
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.A.V
<SEQUENCE>7
<FILENAME>y61804exv99wawv.txt
<DESCRIPTION>ALZA CORP. TAX DEFERRAL INVESTMENT PLAN FORM 11-K
<TEXT>
<PAGE>
EXHIBIT 99(a)(v)
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 11-K
---------------------
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the Fiscal Year Ended December 30, 2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
Commission File Number 1-3215
---------------------
ALZA CORPORATION TAX DEFERRAL INVESTMENT 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)
i
<PAGE>
Item 4. Financial Statements and Exhibits
Independent Auditors' Report
Statement of Net Assets Available for Benefits
Statement of Changes in Net Assets Available for Benefits
Notes to Financial Statements
Supplemental Schedule:
Schedule of Assets Held for Investment Purposes
Consent of Morris Davis & Chan, LLP dated June 25, 2002
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.
ALZA CORPORATION TAX DEFERRAL
INVESTMENT PLAN
By: /s/ D.R. HOFFMAN
-----------------------
D.R. HOFFMANN
Trustee
June 25, 2002
ii
<PAGE>
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
FINANCIAL STATEMENTS AND
SUPPLEMENTAL SCHEDULES
AS OF AND FOR THE YEARS ENDED
DECEMBER 31, 2001 AND 2000
iii
<PAGE>
ALZA CORPORATION TAX DEFERRAL
INVESTMENT PLAN
TABLE OF CONTENTS
<TABLE>
<S> <C>
Independent Auditors' Report 1
Statement of Net Assets Available for Benefits 2
Statement of Changes in Net Assets Available for Benefits 3
Notes to Financial Statements 4-10
Supplemental Schedule: 11
Schedule of Assets Held for Investment Purposes 12-39
</TABLE>
iv
<PAGE>
INDEPENDENT AUDITORS' REPORT
Administrative Committee of the
ALZA CORPORATION TAX DEFERRAL
INVESTMENT PLAN
We have audited the accompanying statement of net assets available for benefits
of the ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN (the Plan) as of December
31, 2001 and 2000, and the related statement of changes in net assets available
for benefits for the years then ended. 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 auditing standards generally accepted
in the United States of America. 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 benefits of the Plan at
December 31, 2001 and 2000, and the changes in its net assets available for
benefits for the years then ended, in conformity with accounting principles
generally accepted in the United States of America.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedule of
assets held for investment purposes as of December 31, 2001 is presented for the
purpose of complying with the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974, and is not a required part of the basic financial statements. The
supplemental schedule has been subjected to the auditing procedures applied in
our 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.
April 17, 2002
1
<PAGE>
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
Statement of Net Assets Available for Benefits
December 31, 2001 and 2000
<TABLE>
<CAPTION>
2001 2000
-------------- --------------
<S> <C> <C>
Investments at fair value:
Mutual funds:
Merrill Lynch Ready Asset Trust $ 15,782,386 $ 12,995,436
Merrill Lynch Basic Value 11,810,199 11,580,100
Merrill Lynch Growth - 9,524,487
Merrill Lynch Corporate Bond 3,795,085 4,022,727
Merrill Lynch Capital 3,531,862 3,718,390
Merrill Lynch Global Allocation 3,249,197 3,000,763
Merrill Lynch Equity Index Fund - 88
John Hancock Emerging Growth 2,991,029 3,013,587
Templeton International 1,798,814 1,686,211
Alliance New Europe 81,948 76,323
Alliance Premier Growth 1,353,788 821,019
Fidelity Advisor Overseas 191,448 130,419
Franklin California Growth 1,644,479 1,460,274
Merrill Lynch Healthcare 1,328,948 630,601
Merrill Lynch International Index 307,710 284,621
Merrill Lynch Pacific 63,156 42,581
Merrill Lynch Small Cap Index 215,898 142,598
Merrill Lynch S&P 500 Index 6,990,932 6,792,096
Merrill Lynch Fundamental Growth 6,918,633 -
Munder NetNet 411,528 373,199
PIMCO Small Cap Value 540,538 42,035
Other investments:
Retirement Cash Management Account 33,826,806 36,673,497
ALZA Corporation Common Stock - 49,565,200
Johnson & Johnson Common Stock 57,289,235 -
Participant loans 917,581 1,096,733
-------------- --------------
Total investments 155,041,200 147,672,985
Cash 113,914 49,018
Employer contributions receivable 2,315,461 2,071,224
Employee contributions receivable 360,343 341,163
-------------- --------------
Net assets available for benefits $ 157,830,918 $ 150,134,390
============== ==============
</TABLE>
See accompanying notes to financial statements.
2
<PAGE>
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
Statement of Changes in Net Assets Available for Benefits
Years Ended December 31, 2001 and 2000
<TABLE>
<CAPTION>
2001 2000
-------------- --------------
<S> <C> <C>
Additions to net assets attributed to:
Investment income:
Net realized and unrealized appreciation
in fair value of investments $ 8,291,237 $ 28,535,335
Interest and dividends 3,108,884 5,204,108
-------------- --------------
11,400,121 33,739,443
Employer contributions 3,594,549 3,127,724
Participant contributions 13,619,013 11,738,959
-------------- --------------
Net additions 28,613,683 48,606,126
-------------- --------------
Deductions from net assets attributed to:
Distributions 20,915,378 30,806,852
Administrative expenses 1,777 2,575
-------------- --------------
Net deductions 20,917,155 30,809,427
-------------- --------------
Increase in net assets 7,696,528 17,796,699
Net assets available for benefits:
Beginning of year 150,134,390 132,337,691
-------------- --------------
End of year $ 157,830,918 $ 150,134,390
============== ==============
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
Notes to Financial Statements
December 31, 2001 and 2000
1. DESCRIPTION OF PLAN
The following description of the ALZA CORPORATION TAX DEFERRAL INVESTMENT
PLAN (the Plan) provides only general information. Participants should
refer to the Summary Plan Description for a more complete description of
the Plan's provisions.
General
The Plan is a defined contribution plan. ALZA Corporation (the Company or
ALZA) remits to the Trust created by the Plan such amounts as are
voluntarily elected by participants and Company contributions. The Plan is
subject to the Employee Retirement Income Security Act of 1974 (ERISA).
Contributions
Participants may make elective salary reduction contributions which are
tax deferred and are, therefore, not included in a participant's
compensation for federal income tax purposes until distributed to the
participant. Under the Plan, participants may elect to contribute through
bi-weekly payroll deductions a fixed dollar amount up to a maximum of
$10,500 in 2001 and 2000. Further restrictions may be imposed on highly
compensated individuals and Plan participants who also participate in the
ALZA Retirement Plan.
For the years ended December 31, 2001 and 2000 the Company made a
contribution of $20 each pay period for each employee (thereby making all
ALZA employees participants) to begin an account and encourage employees
to participate further in the Plan. The Company also made a matching
contribution at 50% of participant contributions. The maximum Company
contribution was $2,000 for each participant.
Participant Accounts
Each participant's account is credited with 100% of the contributions made
by the participant through a salary deferral agreement. The Company will
suspend the pretax salary deferral agreement of any participant if it
determines that a participant's annual contribution limitation, as
described in the Internal Revenue Code, will be exceeded.
Participants are allowed to make rollover contributions of amounts
received from other qualified employer-sponsored retirement plans. Such
contributions are deposited in the appropriate investment funds in
accordance with the participant's directions and the Plan's provisions.
4
<PAGE>
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
Notes to Financial Statements
December 31, 2001 and 2000
1. DESCRIPTION OF PLAN (continued)
Participant Accounts (continued)
Participants allocate their contributions for investment into mutual funds
and other investment vehicles (see Note 4). Earnings and losses of the
investments are allocated to participants in accordance with the Plan's
provisions.
Vesting
Participant account balances are 100% vested at all times.
Distribution of Benefits
Distributions from the Plan are available to a participant (or the
beneficiary) in any of the following situations: termination of employment
with the Company, retirement, total disability, death, reaching age
59 1/2, or a qualified financial hardship. The participant (or the
beneficiary) may elect to receive a lump sum distribution of the value of
his account, or he or she may choose to have the funds remain in the Plan.
Loans
A participant who is employed by the Company and meets certain Plan
requirements may elect to borrow funds from his or her account. The
borrowings are evidenced by notes that bear interest at the published
prime rate plus 1% and have repayment terms of one to 30 years, depending
on the purpose of the loans. Such repayments and interest thereon are
credited to the borrower's account and reinvested in the same manner as
current contributions.
Income Tax Status
The Company has received a favorable determination letter from the IRS
dated March 11, 2002 which states that the Plan is qualified under Section
401(a) and 401(k) of the Internal Revenue Code. Accordingly, income
generated by the underlying trust is generally exempt from federal income
tax under Section 501(a) of the Internal Revenue Code. The Company is
unaware of any event or series of events that may cause operational
disqualification of the Plan.
5
<PAGE>
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
Notes to Financial Statements
December 31, 2001 and 2000
1. DESCRIPTION OF PLAN (Continued)
Administrative Expenses
Although not required to do so, the Company has paid all of the expenses
(except for certain broker fees on transactions executed at the
participant's discretion, and loan fees) associated with administering the
Plan.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Investment Valuation and Income Recognition
Investments in mutual funds are valued at the published fair value as
reported by the fund manager which represents the net asset value of
shares held by the Plan at year end. Other investments are valued at the
published fair value as reported. The participant loans receivable is
valued at cost which approximates fair value.
Purchases and sales of securities are recorded on a trade-date basis.
Interest income is recorded on the accrual basis. Dividends are recorded
on the ex-dividend date.
Estimates
The preparation of financial statements in accordance with accounting
principles generally accepted in the United States of America requires the
Plan management to make estimates and assumptions that affect certain
reported amounts and disclosures. Accordingly, actual results may differ
from those estimates.
3. RELATED PARTY TRANSACTIONS
Certain Plan investments are shares of mutual funds managed by Merrill
Lynch Trust Company of California. Merrill Lynch Trust Company of
California is the trustee as defined by the Plan and, therefore, these
transactions qualify as party-in-interest transactions. Fees for the
investment management services are paid by ALZA.
6
<PAGE>
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
Notes to Financial Statements
December 31, 2001 and 2000
4. INVESTMENT FUND ACTIVITY
During 1991, the Plan was amended to allow for the acceptance of quarterly
plan-to-plan transfers from the ALZA Corporation Employee Stock Ownership
Plan (the ESOP) pursuant to the phased termination of the ESOP. The Plan
was amended in 1992 to allow ALZA Common Stock to be an investment choice
under the Plan. The ESOP termination was considered complete as of
December 1995, and no further ALZA Stock Transfers were made after that
date. The following are investment options under the Plan:
Mutual Funds
Merrill Lynch Ready Asset Trust - A money market fund.
Merrill Lynch Basic Value Fund - A fund of equity securities that
management of the fund believes are undervalued and represent basic
investment value.
Merrill Lynch Growth Fund - A mutual fund investing primarily in a
diversified portfolio of equity securities seeking growth of capital and,
as a secondary objective, income. This fund was eliminated as an
investment option as of December 31, 2001.
Merrill Lynch Corporate Bond Fund - A fund of long-term corporate
fixed-income securities, including corporate bonds and notes, convertible
securities and preferred stocks.
Merrill Lynch Capital Fund - A fund of equity, debt and convertible
securities that seeks to achieve the highest total return consistent with
prudent risk.
Merrill Lynch Global Allocation Fund - A fund investing in domestic and
foreign equities, debt, and money markets seeking total return consistent
with prudent risk.
Merrill Lynch Equity Index Fund - A fund investing in S&P 500 Index(TM)
stocks that seeks to achieve market performance with diversified
securities. This fund was eliminated as an investment option as of
December 31, 2001.
John Hancock Emerging Growth Fund - A fund investing in emerging-growth
companies.
Templeton International Fund - A fund investing in equity securities
trading on foreign markets seeking long term growth of capital.
7
<PAGE>
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
Notes to Financial Statements
December 31, 2001 and 2000
4. INVESTMENT FUND ACTIVITY (Continued)
Mutual Funds (continued)
Effective May 2000, the following funds were added as investment options:
Alliance New Europe Fund - This fund seeks long-term capital appreciation
by investing at least 65% of its total assets in the equity securities of
European companies.
Alliance Premier Growth Fund - This fund seeks long-term growth of capital
by investing at least 85% of its total assets in the equity securities of
large, carefully selected, U.S. companies.
Fidelity Advisor Overseas Fund - This fund seeks capital growth by
investing at least 65% of its total assets in foreign securities.
Franklin California Growth Fund - This fund seeks capital appreciation by
investing in equity securities of companies that maintain their
headquarters or conduct a majority of their operations in California.
Merrill Lynch Healthcare Fund - This fund seeks long-term capital
appreciation through worldwide investment in equity securities of
companies that derive a substantial portion of their sales from products
and services in health care.
Merrill Lynch International Index Fund - This fund seeks to provide
investment results that, before expenses, replicate the total return of
the Morgan Stanley Capital International EAFE Index.
Merrill Lynch Pacific Fund - This fund seeks long-term capital
appreciation by investing primarily in equities of corporations domiciled
in Far Eastern or Western Pacific countries.
Merrill Lynch Small Cap Index Fund - This fund seeks to provide investment
results that, before expenses, replicate the total return of the Russell
2000 Index.
Merrill Lynch S&P 500 Index Fund - This fund seeks to provide investment
results that, before expenses, replicate the total return of the Standard
& Poor's 500(TM) Composite Stock Price Index.
8
<PAGE>
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
Notes to Financial Statements
December 31, 2001 and 2000
4. INVESTMENT FUND ACTIVITY (Continued)
Mutual Funds (continued)
Merill Lynch Fundamental Growth Fund - This fund seeks long-term growth of
capital by investing at least 65% of assets in equities issued by medium
and large capitalization companies.
Munder NetNet Fund - This fund seeks long-term capital appreciation by
investing at least 65% of its total assets in equity securities.
PIMCO Small Cap Value Fund - This fund seeks long-term growth of capital
by investing at least 65% of its total assets in the common stocks of
companies with market capitalizations between $50 million and $1 billion.
Other Investments
Retirement Cash Management Account (RCMA) - A self-directed brokerage
account that enables participants to choose from a wide variety of
investments.
ALZA Corporation Common Stock - A fund consisting of shares of ALZA Common
Stock transferred from the ALZA ESOP or purchased under the provisions of
the Plan.
Johnson & Johnson Common Stock Fund - On June 22, 2001, a merger between
Johnson & Johnson and ALZA Corporation was completed as further discussed
in Note 5. Holders of ALZA common stock received 0.98 of a share of
Johnson & Johnson common stock for each share of ALZA common stock.
Investments representing 5% or more of the Plan's net assets were as
follows:
<TABLE>
<CAPTION>
December 31,
----------------------------
2001 2000
----------- -----------
<S> <C> <C>
Merrill Lynch Ready Asset Trust $15,782,386 $12,995,436
Merrill Lynch Basic Value Fund 11,810,199 11,580,100
Merrill Lynch Growth Fund - 9,524,487
ALZA Corporation Common Stock
Held in ALZA Corporation Common Stock Fund - 49,565,200
Held in Retirement Cash Management Account - 3,737,535
Johnson & Johnson Common Stock
Held in Johnson & Johnson Common Stock Fund 57,289,235 -
Held in Retirement Cash Management Account 4,928,741 -
</TABLE>
9
<PAGE>
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
Notes to Financial Statements
December 31, 2001 and 2000
5. COMPANY MERGER
On June 22, 2001 a merger between Johnson & Johnson and ALZA Corporation
(ALZA) was completed. The Plan will continue through at least December 31,
2002. It is not anticipated that there will be any employer contributions
to the Plan subsequent to December 31, 2002. However, the future of the
Plan has not yet been determined.
10
<PAGE>
SUPPLEMENTAL SCHEDULE
11
<PAGE>
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
EIN 77-00142070 PLAN NO. 002
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 2001
<TABLE>
<CAPTION>
( a ) ( b ) ( c ) ( d ) ( e )
Description of Investment Including
Identity of Issue, Borrower, Maturity Date, Rate of Interest,
Lessor, or Similar Party Collateral, Par or Maturity Value Cost Current Value
- ------- ---------------------------------------- ----------------------------------- ------------ ------------
<S> <C> <C> <C> <C>
* Merrill Lynch Ready Asset Trust Fund $ 15,782,386 $ 15,782,386
* Merrill Lynch Basic Value Fund 13,718,100 11,810,199
* Merrill Lynch Corporate Bond Fund 3,832,111 3,795,085
* Merrill Lynch Capital Fund 4,121,464 3,531,862
* Merrill Lynch Global Allocation Fund 3,456,736 3,249,197
John Hancock Emerging Growth Fund 3,798,050 2,991,029
Templeton International Fund 1,865,227 1,798,814
Alliance New Europe Fund 99,013 81,948
Alliance Premier Growth Fund 1,792,932 1,353,788
Fidelity Advisor Overseas Fund 247,275 191,448
Franklin California Growth Fund 2,202,560 1,644,479
* Merrill Lynch Healthcare Fund 1,317,376 1,328,948
* Merrill Lynch International Index Fund 427,317 307,710
* Merrill Lynch Pacific Fund 79,053 63,156
* Merrill Lynch Small Cap Index Fund 226,549 215,898
* Merrill Lynch S&P 500 Index Fund 8,334,709 6,990,932
* Merrill Lynch Fundamental Growth Fund 10,495,914 6,918,633
Munder NetNet Fund 461,085 411,528
PIMCO Small Cap Value Fund 509,878 540,538
* Johnson & Johnson Common Stock - 969,361 shares 8,620,415 57,289,235
Retirement Cash Management Account
Daimler Chrysler Common Stock - 374 shares 17,874 15,585
Deutsche Bank Common Stock - 165 shares 10,260 11,575
Elan Corp. Common Stock - 500 shares 310 67
Global Crossing Ltd. Common Stock - 659 shares 14,771 553
Globalsantafe Corp. Common Stock - 284 shares 7,511 8,100
</TABLE>
12
<PAGE>
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
EIN 77-00142070 PLAN NO. 002
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 2001
<TABLE>
<CAPTION>
( a ) ( b ) ( c ) ( d ) ( e )
Description of Investment Including
Identity of Issue, Borrower, Maturity Date, Rate of Interest,
Lessor, or Similar Party Collateral, Par or Maturity Value Cost Current Value
- ------- ---------------------------------------- ----------------------------------- ------------ ------------
<S> <C> <C> <C> <C>
Global Telecommunication Common Stock - 200 shares $ 8,013 $ 32
Interwave Communications International Common Stock - 50 shares 1,303 38
Loral Space & Comm Ltd. Common Stock - 3,075 shares 35,308 9,194
Open TV Corp. Common Stock - 50 shares 8,500 414
Sina.com Common Stock - 250 shares 1,738 395
Check Point Software Tech Ltd. Common Stock - 120 shares 4,937 4,787
Westpac Banking Corp. Common Stock - 6,375 shares 53,295 51,414
Flextronics International Ltd. Common Stock - 1,974 shares 58,706 47,356
ADC Telecommunications Inc. Common Stock - 1,000 shares 9,163 4,600
A N Amro Common Stock - 700 shares 16,532 11,396
AOL Time Warner Inc. Common Stock - 3,820 shares 146,167 122,622
AT&T Corporation Common Stock - 1,245 shares 37,870 22,579
AT & T Wireless Common Stock - 558 shares 13,937 8,022
AVI Biopharma Inc. Common Stock - 200 shares 4,800 2,184
Abbott Labs Common Stock - 1,538 shares 45,728 85,744
Abbey Natl. Common Stock - 295 shares 8,202 8,408
Abgenix Inc. Common Stock - 257 shares 14,095 8,645
Adaptive Broadband Corp. Common Stock - 20 shares 1,328 -
Adaptec Inc. Common Stock - 700 shares 23,210 10,150
Advanced Digital Information Common Stock - 500 shares 7,113 8,020
Advanced Fibre Communication Common Stock - 400 shares 29,248 7,068
Advance PCS Common Stock - 68 shares 2,382 1,996
Advanced Micro Devices Inc. Common Stock - 2,307 shares 62,153 36,589
Advent Software Inc. Common Stock - 86 shares 4,267 4,296
Affiliated Computer Svcs Inc. Common Stock - 35 shares 2,700 3,715
Affymetrix Inc. Common Stock - 1,208 shares 103,084 45,602
</TABLE>
13
<PAGE>
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
EIN 77-00142070 PLAN NO. 002
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 2001
<TABLE>
<CAPTION>
( a ) ( b ) ( c ) ( d ) ( e )
Description of Investment Including
Identity of Issue, Borrower, Maturity Date, Rate of Interest,
Lessor, or Similar Party Collateral, Par or Maturity Value Cost Current Value
- ------- ---------------------------------------- ----------------------------------- ------------ ------------
<S> <C> <C> <C> <C>
Agilent Technologies Inc. Common Stock - 1,719 shares $ 78,024 $ 49,009
Agile Software Corp. Common Stock - 400 shares 19,980 6,888
Air Products & Chemicals Common Stock - 140 shares 4,362 6,567
AKZO Common Stock - 240 shares 5,015 10,764
Alcoa Inc. Common Stock - 2,180 shares 68,543 77,499
Alliant Tech Systems Inc. Common Stock - 60 shares 4,202 4,632
Allied Irish Banks Common Stock - 500 shares 9,263 11,550
Allstate Corp. Common Stock - 120 shares 5,108 4,044
Alpha Industries Inc. Common Stock - 181 shares 5,186 3,946
Altera Corp. Common Stock - 5,864 shares 47,104 124,434
Amazon.com Common Stock - 150 shares 4,985 1,623
America Movil Common Stock - 1,000 shares 6,021 19,480
America West Common Stock - 570 shares 1,796 1,995
American Bank Common Stock - 4,000 shares 7,360 6,440
American Home Products Common Stock - 235 shares 8,243 14,420
American Intl. Group Inc. Common Stock - 610 shares 50,011 48,434
American Tower Corp. Common Stock - 100 shares 3,344 947
Amerisourcebergen Corp. Common Stock - 198 shares 12,822 12,583
Amgen Inc. Common Stock - 1,300 shares 54,922 73,372
Anadarko Pete Corp. Common Stock - 200 shares 10,109 11,370
Analog Devices Inc. Common Stock - 300 shares 22,333 13,317
Andrx Corp. Group Common Stock - 200 shares 12,898 14,082
Antigenics Inc. Common Stock - 1,059 shares 6,125 968
Apollo Group Inc. Common Stock - 244 shares 8,058 10,982
Apple Computer Inc. Common Stock - 640 shares 16,988 14,016
Applera Common Stock - 225 shares 6,731 8,836
</TABLE>
14
<PAGE>
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
EIN 77-00142070 PLAN NO. 002
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 2001
<TABLE>
<CAPTION>
( a ) ( b ) ( c ) ( d ) ( e )
Description of Investment Including
Identity of Issue, Borrower, Maturity Date, Rate of Interest,
Lessor, or Similar Party Collateral, Par or Maturity Value Cost Current Value
- ------- ---------------------------------------- ----------------------------------- ------------ ------------
<S> <C> <C> <C> <C>
Applied Digital Solutions Common Stock - 1,700 shares $ 11,963 $ 731
Applied Micro Circuits Common Stock - 400 shares 4,076 4,528
Applied Materials Inc. Common Stock - 8,706 shares 243,017 349,111
Arch Wireless Inc. Common Stock - 47 shares 2,233 -
Ariad Pharmaceuticals Inc. Common Stock - 100 shares 4,338 533
Ariba Inc. Common Stock - 500 shares 4,825 3,080
Armstrong Holdings Inc. Common Stock - 100 shares 8,610 341
Ascential Software Corp. Common Stock - 27 shares - 109
Aspeon Inc. Common Stock - 350 shares 3,491 28
At Home Common Stock - 300 shares 13,766 2
At Track Communications Common Stock - 60 shares 2,760 90
Atmel Corp. Common Stock - 400 shares 5,925 2,948
Avanex Corp. Common Stock - 40 shares 1,065 236
Avaya Inc. Common Stock - 210 shares 5,752 2,552
Avon Prod. Inc. Common Stock - 329 shares 11,135 15,318
Axa Common Stock - 380 shares 12,861 7,988
Bae Sys Common Stock - 363 shares 6,993 6,588
BASF Ag Common Stock - 224 shares 10,196 8,492
B A T Intl. Inc. Common Stock - 6,900 shares 2,779 69
BJS Wholesale Club Inc. Common Stock - 1,000 shares 7,181 44,100
BJ Svcs Co. Common Stock - 249 shares 7,348 8,080
BP Amoco Common Stock - 790 shares 36,533 36,743
BT Group Common Stock - 250 shares 6,773 9,188
BMC Software Inc. Common Stock - 1,000 shares 46,079 16,370
Ballard Pwr Sys. Inc. Common Stock - 748 shares 35,421 22,118
Bank of America Corp. Common Stock - 1,775 shares 65,901 111,736
</TABLE>
15
<PAGE>
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
EIN 77-00142070 PLAN NO. 002
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 2001
<TABLE>
<CAPTION>
( a ) ( b ) ( c ) ( d ) ( e )
Description of Investment Including
Identity of Issue, Borrower, Maturity Date, Rate of Interest,
Lessor, or Similar Party Collateral, Par or Maturity Value Cost Current Value
- ------- ---------------------------------------- ----------------------------------- ------------ ------------
<S> <C> <C> <C> <C>
Bank of NY Common Stock - 550 shares $ 21,104 $ 22,440
Bank One Corp. Common Stock - 282 shares 11,546 11,025
BARR Labs Common Stock - 92 shares 7,433 7,301
Bayer Common Stock - 270 shares 8,199 8,451
BEA Sys Inc. Common Stock - 1,000 shares 12,500 15,400
Becton Dickinson Co. Common Stock - 100 shares 3,038 3,315
Bed Bath & Beyond Inc. Common Stock - 288 shares 7,141 9,763
Bellsouth Corp. Common Stock - 800 shares 17,380 30,520
Berkshire Hathaway Inc. Common Stock - 30 shares 66,601 75,750
Best Buy Co. Inc. Common Stock - 837 shares 27,610 62,340
Bio Technology Gen. Corp. Common Stock - 500 shares 5,419 4,115
Biogen Inc. Common Stock - 23 shares 1,856 1,319
Biotech Common Stock - 200 shares 21,151 26,400
Boeing Company Common Stock - 570 shares 25,222 22,105
Boston Scientific Corp. Common Stock - 200 shares 3,050 4,824
Boykin Lodging Co. Common Stock - 6,000 shares 54,600 47,820
Bristol Myers Squibb Co. Common Stock - 407 shares 17,660 20,757
Broadcom Corp. Common Stock - 357 shares 48,554 14,591
Broadvision Inc. Common Stock - 1,200 shares 52,188 3,288
Brocade Communications Sys. Common Stock - 1,240 shares 83,804 41,069
Burnham Pac Pptys Inc. Common Stock - 1,000 shares 12,375 4,120
CMGI Common Stock - 1,450 shares 52,897 2,364
CPX Corp. Common Stock - 1 share - 45
CVS Corp. Common Stock - 715 shares 19,590 21,164
Cable & Wireless Pub Ltd. Co. Common Stock - 200 shares 3,240 2,962
Cable Design Technologies Co. Common Stock - 300 shares 6,900 4,104
</TABLE>
16
<PAGE>
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
EIN 77-00142070 PLAN NO. 002
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 2001
<TABLE>
<CAPTION>
( a ) ( b ) ( c ) ( d ) ( e )
Description of Investment Including
Identity of Issue, Borrower, Maturity Date, Rate of Interest,
Lessor, or Similar Party Collateral, Par or Maturity Value Cost Current Value
- ------------- ---------------------------- ----------------------------------- ---------- ----------
<S> <C> <C> <C> <C>
Cabot Corp. Common Stock - 166 shares $ 6,059 $ 5,926
Cadbury Schweppes Common Stock - 261 shares 6,645 6,713
Calico Commerce Inc. Common Stock - 125 shares 6,300 21
Calif Micro Devices Corp. Common Stock - 300 shares 11,010 1,410
California Water Svc Grp Common Stock - 1,000 shares 18,223 25,750
Caliper Techs Corp. Common Stock - 116 shares 4,987 1,811
Calpine Corp. Common Stock - 517 shares 17,214 8,680
CAM COMM Solutions Inc. Common Stock - 500 shares 8,075 2,000
Canon Inc. Common Stock - 600 shares 11,706 21,036
Catalytica Energy Sys. Common Stock - 1,001 shares 7,837 4,575
Caterpillar Inc. Common Stock - 479 shares 20,324 25,004
Cellular Tech Svcs Common Stock - 500 shares 5,388 1,145
Cendant Corp. Common Stock - 50 shares 1,055 981
Centura Software Corp. Common Stock - 2,100 shares 14,150 11
Cepheid Inc. Common Stock - 100 shares 1,124 420
Cephalon Inc. Common Stock - 56 shares 4,051 4,233
ChevronTexaco Corp. Common Stock - 982 shares 74,624 88,003
China Mobile HK Common Stock - 100 shares 1,440 1,748
Chiron Corp. Common Stock - 48 shares 678 2,104
Chubb Corp. Common Stock - 265 shares 14,933 18,285
Ciena Corp. Common Stock - 500 shares 15,075 7,155
Cisco Systems Inc. Common Stock - 36,406 shares 1,197,190 659,313
Citigroup Inc. Common Stock - 7,979 shares 242,279 402,780
Citrix Systems Inc. Common Stock - 1,553 shares 41,414 35,191
City National Corp. Common Stock - 147 shares 6,632 6,887
Coca Cola Common Stock - 253 shares 12,237 11,928
</TABLE>
17
<PAGE>
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
EIN 77-00142070 PLAN NO. 002
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 2001
<TABLE>
<CAPTION>
( a ) ( b ) ( c ) ( d ) ( e )
Description of Investment Including
Identity of Issue, Borrower, Maturity Date, Rate of Interest,
Lessor, or Similar Party Collateral, Par or Maturity Value Cost Current Value
- ------------- ---------------------------- ----------------------------------- ---------- ----------
<S> <C> <C> <C> <C>
Colonial Properties Common Stock - 750 shares $ 18,469 $ 23,363
Comcast Corp. Common Stock - 1,200 shares 44,682 43,200
Compaq Computer Corp. Common Stock - 2,280 shares 40,509 22,253
Computer Science Corp. Common Stock - 506 shares 24,586 24,784
Conagra Inc. Common Stock - 400 shares 7,840 9,508
Concord EFS Inc. Common Stock - 136 shares 2,919 4,458
Connectics Corp. Common Stock - 2,000 shares 11,075 23,800
Consolidated Edison Inc. Common Stock - 92 shares 3,048 3,698
Copart Inc. Common Stock - 193 shares 5,620 7,019
Copper Mtn. Networks Inc. Common Stock - 800 shares 5,720 1,352
Cor Therapeutics Inc. Common Stock - 26 shares 816 622
Corning Inc. Common Stock - 128 shares 9,866 1,142
Corporate High Yld Common Stock - 3,000 shares 37,902 24,570
Correctional Properties Trust Common Stock - 6,000 shares 55,350 101,400
Corvis Corp. Common Stock - 1,093 shares 4,768 3,530
Cybertel Communications Corp. Common Stock - 200 shares 2,125 60
Cylink Corp. Common Stock - 3,410 shares 12,190 9,378
Cypress Semiconductor Common Stock - 1,000 shares 32,627 19,930
DMC Stratex Networks Inc. Common Stock - 50 shares 1,750 389
Debt Strategy Fund Inc. Common Stock - 3,391 shares 40,000 22,008
Dell Computer Corp. Common Stock - 10,072 shares 233,916 273,757
Delta Air Lines Inc. Common Stock - 100 shares 6,200 2,926
Deltagen Inc. Common Stock - 250 shares 4,925 2,300
Developers Diversified Rlty. Common Stock - 3,600 shares 54,743 68,760
Diageo Common Stock - 320 shares 10,131 14,806
Diametrics Med. Common Stock - 200 shares 1,630 1,132
</TABLE>
18
<PAGE>
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
EIN 77-00142070 PLAN NO. 002
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 2001
<TABLE>
<CAPTION>
( a ) ( b ) ( c ) ( d ) ( e )
Description of Investment Including
Identity of Issue, Borrower, Maturity Date, Rate of Interest,
Lessor, or Similar Party Collateral, Par or Maturity Value Cost Current Value
- ------------- ---------------------------- ----------------------------------- ---------- ----------
<S> <C> <C> <C> <C>
Digital Lightwave Inc. Common Stock - 100 shares $ 12,988 $ 938
Digital Video Systems Common Stock - 500 shares 5,950 2,245
Walt Disney Company Common Stock - 2,240 shares 64,863 46,422
Ditech Communications Common Stock - 185 shares 4,051 1,114
Dollar Tree Stores Inc. Common Stock - 620 shares 14,182 19,164
Dominium Res Inc. Common Stock - 1,931 shares 80,102 116,026
Donaldson Co. Inc. Common Stock - 400 shares 9,310 15,536
DSL Net Inc. Common Stock - 200 shares 1,375 252
E I Dupont Common Stock - 747 shares 38,207 31,744
Duke Energy Corp. Common Stock - 425 shares 13,129 16,686
Durect Corp. Common Stock - 1,000 shares 13,100 11,590
EMC Corporation Common Stock - 6,210 shares 116,433 83,462
Eni SPA Common Stock - 160 shares 9,903 9,914
E Trade Group Inc. Common Stock - 813 shares 22,253 8,333
Econnect Common Stock - 600 shares 1,564 26
Edison Intl. Common Stock - 238 shares 3,760 3,592
Edwards JD & Co. Common Stock - 316 shares 4,753 5,198
Egain Communications Corp. Common Stock - 600 shares 1,647 840
Eisai Ltd. Common Stock - 282 shares 6,786 7,121
El Paso Corp. Common Stock - 1,230 shares 19,558 54,870
Elan Corp. Common Stock - 692 shares 23,653 31,182
Electric Data Sys. Corp. Common Stock - 1,011 shares 48,013 69,292
Eloyalty Corp. Common Stock - 30 shares 10,138 159
Emerson Elec. Co. Common Stock - 150 shares 9,309 8,565
Endesa S.A. Common Stock - 1,085 shares 25,037 17,002
Energy Power Sys. Ltd. Common Stock - 2,000 shares 11,580 8,400
</TABLE>
19
<PAGE>
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
EIN 77-00142070 PLAN NO. 002
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 2001
<TABLE>
<CAPTION>
( a ) ( b ) ( c ) ( d ) ( e )
Description of Investment Including
Identity of Issue, Borrower, Maturity Date, Rate of Interest,
Lessor, or Similar Party Collateral, Par or Maturity Value Cost Current Value
- ------------- ---------------------------- ----------------------------------- ---------- ----------
<S> <C> <C> <C> <C>
Engage Technologies Inc. Common Stock - 250 shares $ 2,003 $ 110
Enron Corp. Common Stock - 4,703 shares 80,036 2,822
Enterasys Networks Inc. Common Stock - 500 shares 7,964 4,425
Entrada Networks Inc. Common Stock - 50 shares 97 6
Enzon Inc. Common Stock - 99 shares 6,359 5,572
Enzo Biochem Inc. Common Stock - 300 shares 4,905 7,050
Equity Office Properties Common Stock - 100 shares 3,050 3,008
Equity Residential Properties Common Stock - 1,200 shares 30,383 34,452
Ericsson Common Stock - 628 shares 9,472 3,278
Essex Properties Common Stock - 1,400 shares 34,600 69,174
Etoys Inc. Common Stock - 200 shares 1,131 1
Exodus Communications Inc. Common Stock - 1,468 shares 41,654 57
Extreme Networks Inc. Common Stock - 100 shares 3,250 1,290
Exxon Mobil Corp. Common Stock - 2,742 shares 95,599 107,761
Federal Natl. Mtg. Assn Common Stock - 505 shares 29,547 40,182
Fedex Corp. Common Stock - 25 shares 873 1,297
Fibercore Inc. Common Stock - 1,200 shares 11,272 2,880
Finisar Corp. Common Stock - 1,175 shares 38,986 11,950
First Health Group Corp. Common Stock - 207 shares 5,488 5,121
FleetBoston Finl Corp. Common Stock - 490 shares 18,719 17,885
Fluor Corp. Common Stock - 200 shares - 7,480
Ford Motor Co. Common Stock - 200 shares 2,724 3,144
Forest Labs Inc. Common Stock - 200 shares 13,340 16,390
Foundry Networks Inc. Common Stock - 250 shares 22,544 2,038
4 Kids Entertainment Inc. Common Stock - 1,000 shares 29,163 20,030
France Telecom Common Stock - 200 shares 19,313 7,998
</TABLE>
20
<PAGE>
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
EIN 77-00142070 PLAN NO. 002
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 2001
<TABLE>
<CAPTION>
( a ) ( b ) ( c ) ( d ) ( e )
Description of Investment Including
Identity of Issue, Borrower, Maturity Date, Rate of Interest,
Lessor, or Similar Party Collateral, Par or Maturity Value Cost Current Value
- ------------- ---------------------------- ----------------------------------- ---------- ----------
<S> <C> <C> <C> <C>
Franklin Res. Inc. Common Stock - 80 shares $ 3,513 $ 2,822
Friede Goldman Halter Common Stock - 570 shares 4,913 108
Fuji Photo Film Common Stock - 488 shares 12,927 17,539
Gannett Co. Common Stock - 1,100 shares 51,319 73,953
Gap Inc. Common Stock - 1,012 shares 9,360 14,107
Genentech Inc. Common Stock - 600 shares 48,368 32,550
Genl Dynamics Corp. Common Stock - 100 shares 2,400 7,964
General Electric Common Stock - 14,890 shares 360,438 596,785
General Motors Corp. Common Stock - 100 shares 9,212 4,860
Genzyme Corp. Common Stock - 70 shares 3,703 4,190
Geron Corp. Common Stock - 1,000 shares 10,463 8,700
Gillette Co. Common Stock - 780 shares 34,843 26,052
Glaxo Common Stock - 1,393 shares 48,298 69,399
Goldman Sachs Group Inc. Common Stock - 275 shares 21,963 25,506
Guidant Corp. Common Stock - 780 shares 25,671 38,844
HRPT Properties Common Stock - 18,600 shares 121,685 161,076
HSBC Hldg Common Stock - 306 shares 6,560 18,271
Halliburton Company Common Stock - 100 shares 3,325 1,310
Harley Davidson Inc. Common Stock - 932 shares 10,380 50,617
Harmonic Lightwaves Inc. Common Stock - 475 shares 19,737 5,710
Health Care Ppty Invs. Common Stock - 4,000 shares 110,600 144,840
Health Mgmt Assoc. Inc. Common Stock - 500 shares 7,543 9,200
Healthcare Rlty Common Stock - 5,000 shares 89,563 140,000
Health Care REIT Inc. Common Stock - 6,000 shares 104,600 146,100
Health Grades Inc. Common Stock - 2,000 shares 9,075 140
Heinz H J Co. Common Stock - 200 shares 5,993 8,224
</TABLE>
21
<PAGE>
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
EIN 77-00142070 PLAN NO. 002
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 2001
<TABLE>
<CAPTION>
( a ) ( b ) ( c ) ( d ) ( e )
Description of Investment Including
Identity of Issue, Borrower, Maturity Date, Rate of Interest,
Lessor, or Similar Party Collateral, Par or Maturity Value Cost Current Value
- ------------- ---------------------------- ----------------------------------- ---------- ----------
<S> <C> <C> <C> <C>
Hewlett Packard Co. Common Stock - 1,940 shares $ 47,292 $ 39,848
Highwoods Pptys Inc. Common Stock - 2,400 shares 58,691 62,280
Hitachi Ltd. Common Stock - 132 shares 13,000 9,661
Home Depot Inc. Common Stock - 3,130 shares 69,568 159,655
Honda Motor Common Stock - 83 shares 7,117 6,765
Honeywell Intl. Inc. Common Stock - 35 shares 1,298 1,168
House2home Inc. Common Stock - 500 shares 2,069 1
Human Genome Sciences Inc. Common Stock - 68 shares 4,539 2,293
Humphrey Hospitality Common Stock - 10,000 shares 73,156 29,500
Hyseq Inc. Common Stock - 200 shares 19,150 1,544
Icos Corp. Common Stock - 105 shares 5,366 6,031
Idec Pharmaceuticals Corp. Common Stock - 98 shares 5,511 6,755
Ibis Technology Corp. Common Stock - 30 shares 1,153 446
Illumina Inc. Common Stock - 230 shares 3,730 2,705
Imagistics Intl. Inc. Common Stock - 8 shares 145 99
Immunex Corp. Common Stock - 979 shares 29,417 27,128
Incyte Pharmaceuticals Inc. Common Stock - 60 shares 7,130 1,166
Infocast Corp. Common Stock - 200 shares 1,775 12
Infocus Corp. Common Stock - 1,000 shares 16,100 22,020
Ing Gp Common Stock - 668 shares 7,680 17,001
Inhale Therapeutic Sys. Common Stock - 560 shares 14,984 10,388
Innkeepers USA Common Stock - 5,000 shares 58,000 49,000
Integrated Device Tech Common Stock - 100 shares 3,650 2,659
Intelidata Technologies Common Stock - 250 shares 1,613 708
Intel Corp. Common Stock - 34,424 shares 849,040 1,019,740
Intermune Inc. Common Stock - 73 shares 3,243 3,596
</TABLE>
22
<PAGE>
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
EIN 77-00142070 PLAN NO. 002
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 2001
<TABLE>
<CAPTION>
( a ) ( b ) ( c ) ( d ) ( e )
Description of Investment Including
Identity of Issue, Borrower, Maturity Date, Rate of Interest,
Lessor, or Similar Party Collateral, Par or Maturity Value Cost Current Value
- ------------- ---------------------------- ----------------------------------- ---------- ----------
<S> <C> <C> <C> <C>
Interferon Common Stock - 3,000 shares $ 6,100 $ 1,350
Intl. Business Mach. Common Stock - 2,450 shares 235,775 296,352
Intl. Fibercom Inc. Common Stock - 600 shares 7,189 150
Intl. Paper Co. Common Stock - 973 shares 37,877 39,269
Internet Cap Group Inc. Common Stock - 2,922 shares 63,034 3,536
Internet Infrastructure Common Stock - 600 shares 24,277 3,756
Internet Architecture Common Stock - 200 shares 15,813 7,670
Intersil Hldg. Corp. Common Stock - 70 shares 2,495 2,258
Intrpublic Grp of Co. Common Stock - 635 shares 18,647 18,758
Intuit Inc. Common Stock - 100 shares 3,106 4,278
Invitrogen Common Stock - 100 shares 7,017 6,193
Invision Technologies Inc. Common Stock - 200 shares 2,970 5,958
Iomega Corp. Common Stock - 200 shares 8,638 1,670
Isis Pharmaceuticals Common Stock - 1,200 shares 10,428 26,628
Ito Yokado Common Stock - 230 shares 14,528 10,465
12 Technologies Inc. Common Stock - 110 shares 5,644 869
Ivax Corp. Common Stock - 300 shares 5,934 6,042
Ivoice Com Inc. Common Stock - 3,000 shares 10,894 165
JDN Rlty Corp. Common Stock - 5,000 shares 53,000 61,650
JDS Uniphase Corp. Common Stock - 9,686 shares 358,076 84,074
JMAR Inds Inc. Common Stock - 150 shares 2,481 449
JNI Corp. Common Stock - 295 shares 12,539 2,451
JP Realty Inc. Common Stock - 5,000 shares 81,125 118,950
JP Morgan Chase and Co. Common Stock - 2,385 shares 89,675 86,695
Jacobs Engn Grp Inc. Common Stock - 506 shares 15,801 33,396
* Johnson & Johnson Common Stock - 83,397 shares 336,166 4,928,741
</TABLE>
23
<PAGE>
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
EIN 77-00142070 PLAN NO. 002
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 2001
<TABLE>
<CAPTION>
( a ) ( b ) ( c ) ( d ) ( e )
Description of Investment Including
Identity of Issue, Borrower, Maturity Date, Rate of Interest,
Lessor, or Similar Party Collateral, Par or Maturity Value Cost Current Value
- ------------- ---------------------------- ----------------------------------- ---------- ----------
<S> <C> <C> <C> <C>
Jones Apparel Grp Inc. Common Stock - 116 shares $ 3,848 $ 3,848
Juniper Networks Inc. Common Stock - 1,273 shares 72,829 24,123
KLA Instrs Corp. Common Stock - 271 shares 10,066 13,431
Kanakaris Wireless Common Stock - 13 shares 1,074 2
Kimberly Clark Common Stock - 230 shares 11,209 13,754
King Pharmaceuticals Inc. Common Stock - 157 shares 5,441 6,614
Kingfisher Common Stock - 613 shares 6,232 6,866
Koninkl Phil E Ny Common Stock - 664 shares 16,027 19,329
Korea Telecom Common Stock - 260 shares 8,625 5,286
Korea Elec Pwr Common Stock - 720 shares 10,468 6,588
Kulicke & Soffa Indust Common Stock - 2,000 shares 57,800 34,300
Kyocera Corp. Common Stock - 185 shares 12,431 12,345
LSI Logic Corp. Common Stock - 2,600 shares 116,609 41,028
LTX Corp. Common Stock - 500 shares 13,138 10,470
L-3 Communications Hldg. Common Stock - 99 shares 8,170 8,910
Lam Research Corp. Common Stock - 250 shares 5,581 5,805
Learningstar Corp. Common Stock - 125 shares 9,056 188
Learn2 Corp. Common Stock - 474 shares 5,311 57
Lilly Eli Co. Common Stock - 930 shares 62,534 73,042
Lionbridge Technologies Common Stock - 57 shares 2,160 100
Lockheed Martin Corp. Common Stock - 100 shares 1,756 4,667
Loudeye Technologies Inc. Common Stock - 150 shares 6,022 110
Lucent Technologies Inc. Common Stock - 2,792 shares 101,089 17,590
MGI Pharma Inc. Common Stock - 3,381 shares 102,590 51,662
MRV Communications Inc. Common Stock - 100 shares 7,381 424
Macromedia Inc. Common Stock - 220 shares 4,647 3,916
</TABLE>
24
<PAGE>
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
EIN 77-00142070 PLAN NO. 002
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 2001
<TABLE>
<CAPTION>
( a ) ( b ) ( c ) ( d ) ( e )
Description of Investment Including
Identity of Issue, Borrower, Maturity Date, Rate of Interest,
Lessor, or Similar Party Collateral, Par or Maturity Value Cost Current Value
- ------------- ---------------------------- ----------------------------------- ---------- ----------
<S> <C> <C> <C> <C>
Manor Care Inc. Common Stock - 269 shares $ 7,619 $ 6,378
Marks & Spencer Ltd. Common Stock - 245 shares 9,004 7,669
Martha Stewart Common Stock - 200 shares 5,875 3,290
Massey Energy Co. Common Stock - 400 shares 16,674 8,292
Maxim Integrated Prods. Common Stock - 3,200 shares 80,610 168,032
Maxygen Inc. Common Stock - 600 shares 12,204 10,542
McData Corp. Common Stock - 162 shares 1,878 3,969
McDonalds Corp. Common Stock - 1,800 shares 44,049 47,646
Medimmune Inc. Common Stock - 76 shares 4,431 3,553
Medtronic Inc. Common Stock - 2,150 shares 88,260 110,102
Mellon Financial Corp. Common Stock - 50 shares 1,642 1,881
Merck & Co. Inc. Common Stock - 1,832 shares 96,223 107,702
* Merrill Lynch & Co. Common Stock - 9,305 shares 580,833 484,977
MessageMedia Inc. Common Stock - 230 shares 1,592 32
MetLife Inc. Common Stock - 575 shares 11,969 18,216
Metricom Inc. Common Stock - 2,200 shares 39,189 136
Metrocall Inc. Common Stock - 1,000 shares 11,650 26
Metromedia Common Stock - 400 shares 4,700 176
Microsoft Corp. Common Stock - 8,318 shares 394,920 551,068
Micromuse Inc. Common Stock - 70 shares 7,033 1,050
Micron Technology Inc. Common Stock - 200 shares 12,575 6,200
Millennium Pharmaceuticals Common Stock - 130 shares 9,689 3,186
Minnesota Mng Mfg. Common Stock - 115 shares 9,573 13,594
MIPS Techs Inc. Common Stock - 13 shares 723 104
Molecular Diagnostics Common Stock - 491 shares 9,269 442
Moody's Corp. Common Stock - 180 shares 6,229 7,175
</TABLE>
25
<PAGE>
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
EIN 77-00142070 PLAN NO. 002
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 2001
<TABLE>
<CAPTION>
( a ) ( b ) ( c ) ( d ) ( e )
Description of Investment Including
Identity of Issue, Borrower, Maturity Date, Rate of Interest,
Lessor, or Similar Party Collateral, Par or Maturity Value Cost Current Value
- ------------- ---------------------------- ----------------------------------- ---------- ----------
<S> <C> <C> <C> <C>
Motorola Inc. Common Stock - 1,505 shares $ 44,636 $ 22,605
UTS Motorola Inc. Common Stock - 145 shares 7,259 6,777
NRG Energy Inc. Common Stock - 400 shares 9,905 6,200
Nanogen Inc. Common Stock - 104 shares 1,571 600
Nasdaq-100 Common Stock - 4,001 shares 233,660 155,679
Natl. Australia Common Stock - 198 shares 9,603 16,137
Nationwide Health Properties Common Stock - 8,000 shares 98,800 149,520
Neotherapeutics Inc. Common Stock - 1,000 shares 3,350 3,660
Nestle S A Common Stock - 370 shares 9,401 19,703
Network Appliance Inc. Common Stock - 1,926 shares 115,323 42,122
New Focus Inc. Common Stock - 760 shares 11,251 2,896
News Corp. Ltd. Common Stock - 1,000 shares 49,863 31,810
Nintendo Ltd. Common Stock - 286, shares 3,231 6,149
Nippon Teleg & Tel Corp. Common Stock - 570 shares 31,636 9,234
Nisource Inc. Common Stock - 395 shares 10,088 9,109
Nokia Corp. Common Stock - 12,464 shares 298,877 305,736
Norsk Hydro Common Stock - 400 shares 18,030 16,800
Nortel Networks Corp. Common Stock - 2,370 shares 83,999 17,683
Nova Chemicals Corp. Common Stock - 100 shares 2,231 1,927
Novartis Common Stock - 512 shares 11,542 18,688
Novell Inc. Common Stock - 300 shares 8,950 1,377
Novellus Sys Inc. Common Stock - 1,898 shares 77,627 74,876
Nvidia Common Stock - 118 shares 5,031 7,894
Nutrition 21 Inc. Common Stock - 350 shares 2,433 249
Office Depot Inc. Common Stock - 500 shares 10,881 9,270
On2.com Inc. Common Stock - 460 shares 7,199 156
</TABLE>
26
<PAGE>
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
EIN 77-00142070 PLAN NO. 002
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 2001
<TABLE>
<CAPTION>
( a ) ( b ) ( c ) ( d ) ( e )
Description of Investment Including
Identity of Issue, Borrower, Maturity Date, Rate of Interest,
Lessor, or Similar Party Collateral, Par or Maturity Value Cost Current Value
- ------ ------------------------------------- -------------------------------------------- ----------- ------------
<S> <C> <C> <C> <C>
Openwave Sys Inc. Common Stock - 2,000 shares $ 18,420 $ 19,580
Oracle Sys Corp. Common Stock - 24,817 shares 158,049 342,723
Outback Steakhouse Inc. Common Stock - 260 shares 6,667 8,905
PG&E Corp. Common Stock - 370 shares 8,998 7,123
Pacific Aerospace & Eltr Inc. Common Stock - 2,000 shares 2,815 90
Pall Corp. Common Stock - 695 shares 15,635 16,722
Palm Inc. Common Stock - 2,950 shares 19,873 11,446
Pan Pacific Retail Properties Common Stock - 930 shares 18,918 26,710
JC Penney Co. Common Stock - 2,000 shares 52,700 53,800
Peoplesoft Inc. Common Stock - 120 shares 4,345 4,824
Pepsi Bottling Group Inc. Common Stock - 226 shares 5,462 5,311
Pepsico Inc. Common Stock - 1,800 shares 53,668 87,642
Peregrine Systems Inc. Common Stock - 305 shares 6,735 4,523
Peregrine Pharmactls Inc. Common Stock - 1,000 shares 4,060 3,430
Petrleo Bras Vtg. Spd Common Stock - 260 shares 6,895 6,058
Pfizer Inc. Common Stock - 4,795 shares 175,695 191,071
Pharmactcl Hldrs Common Stock - 400 shares 36,452 39,400
Pharmacia Corp. Common Stock - 200 shares 9,600 8,530
Philip Morris Cos Inc. Common Stock - 2,405 shares 93,183 110,253
Pitney Bowes Inc. Common Stock - 100 shares 6,305 3,761
Pixar Common Stock - 200 shares 8,190 7,192
Plantronics Inc. Common Stock - 700 shares 22,148 17,948
Portugal Telecom Common Stock - 1,662 shares 14,652 12,648
Power-One Inc. Common Stock - 100 shares 4,650 1,041
Price T Rowe Group Inc. Common Stock - 50 shares 1,903 1,737
Procter & Gamble Common Stock - 2,000 shares 112,336 158,260
</TABLE>
27
<PAGE>
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
EIN 77-00142070 PLAN NO. 002
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 2001
<TABLE>
<CAPTION>
( a ) ( b ) ( c ) ( d ) ( e )
Description of Investment Including
Identity of Issue, Borrower, Maturity Date, Rate of Interest,
Lessor, or Similar Party Collateral, Par or Maturity Value Cost Current Value
- ------ ------------------------------------- -------------------------------------------- ----------- ------------
<S> <C> <C> <C> <C>
Providian Finl Corp. Common Stock - 3,200 shares $ 18,160 $ 11,360
Proxim Inc. Common Stock - 100 shares 1,806 992
Psinet Inc. Common Stock - 105 shares 5,064 1
Qlogic Corp. Common Stock - 200 shares 9,470 8,902
Qualcomm Inc. Common Stock - 296 shares 36,625 14,948
Quest Diagnostics Inc. Common Stock - 63 shares 4,222 4,518
RSA Security Inc. Common Stock - 300 shares 13,023 5,238
RF Micro Devices Inc. Common Stock - 840 shares 33,542 16,153
Railamerica Inc. Common Stock - 533 shares 5,743 7,707
Rambus Inc. Common Stock - 105 shares 9,500 839
Real Networks Inc. Common Stock - 500 shares 4,370 2,970
Red Hat Inc. Common Stock - 200 shares 3,013 1,420
Redback Networks Inc. Common Stock - 867 shares 10,780 3,425
Repsol Common Stock - 650 shares 8,430 9,445
Rio Tinto Ltd. Common Stock - 96 shares 5,943 7,152
Rite Aid Corporation Common Stock - 250 shares 800 1,265
Riverstone Networks Inc. Common Stock - 256 shares 4,054 4,250
Roche Hldg Ltd. Common Stock - 83 shares 5,976 5,918
Rogue Wave Software Common Stock - 200 shares 2,028 640
Rolls-Royce Plc. Common Stock - 503 shares 6,526 5,935
Ross Store Inc. Common Stock - 130 shares 3,920 4,170
Roxio Inc. Common Stock - 114 shares 6,546 1,887
SBC Communications Inc. Common Stock - 1,000 shares 28,380 39,170
Saba Software Inc. Common Stock - 150 shares 1,550 783
Safeguard Scientifics Common Stock - 1,100 shares 39,015 3,850
St. Mary Ld & Expl Co. Common Stock - 250 shares 3,410 5,298
</TABLE>
28
<PAGE>
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
EIN 77-00142070 PLAN NO. 002
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 2001
<TABLE>
<CAPTION>
( a ) ( b ) ( c ) ( d ) ( e )
Description of Investment Including
Identity of Issue, Borrower, Maturity Date, Rate of Interest,
Lessor, or Similar Party Collateral, Par or Maturity Value Cost Current Value
- ------ ------------------------------------- -------------------------------------------- ----------- ------------
<S> <C> <C> <C> <C>
San Paolo-Imi Sps Common Stock - 220 shares $ 7,112 $ 4,816
Sandisk Corp. Common Stock - 225 shares 16,903 3,240
Sanmina-Sci Corp. Common Stock - 635 shares 9,786 12,637
Sap Aktiengesellschaft Common Stock - 200 shares 8,289 6,386
Save the Worldair Inc. Common Stock - 530 shares 2,889 270
Schering Plough Corp. Common Stock - 100 shares 4,950 3,581
Schlumberger Ltd. Common Stock - 485 shares 25,647 26,651
Schwab Charles Corp. Common Stock - 180 shares 5,129 2,785
Scios Inc. Common Stock - 600 shares 5,352 14,262
Scottish Power Common Stock - 500 shares 15,217 10,850
Sector Spdr Consumers Stpl. Common Stock - 100 shares 2,761 2,540
Sector Spdr Technology Common Stock - 125 shares 4,548 3,000
Sempra Energy Common Stock - 495 shares 11,249 12,152
Serologicals Corp. Common Stock - 150 shares 3,300 3,225
Shell Trns & Trdng Common Stock - 357 shares 8,575 14,798
Sicor Inc. Common Stock - 246 shares 6,053 3,857
Siebel Sys Inc. Common Stock - 1,850 shares 44,337 51,763
Silicon Graphics Inc. Common Stock - 2,948 shares 11,586 6,191
Societe Generale France Common Stock - 1,560 shares 9,240 17,238
Sohu Com Inc. Common Stock - 500 shares 2,325 600
Solectron Corp. Common Stock - 2,200 shares 81,781 24,816
Sony Corp. Common Stock - 325 shares 23,217 14,658
Sorrento Networks Corp. Common Stock - 200 shares 7,750 718
Sonus Networks Inc. Common Stock - 180 shares 811 832
Southwest Airlines Co. Common Stock - 275 shares 4,024 5,082
Sovran Self Storage Inc. Common Stock - 5,000 shares 91,750 155,750
</TABLE>
29
<PAGE>
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
EIN 77-00142070 PLAN NO. 002
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 2001
<TABLE>
<CAPTION>
( a ) ( b ) ( c ) ( d ) ( e )
Description of Investment Including
Identity of Issue, Borrower, Maturity Date, Rate of Interest,
Lessor, or Similar Party Collateral, Par or Maturity Value Cost Current Value
- ------ ------------------------------------- -------------------------------------------- ----------- ------------
<S> <C> <C> <C> <C>
Sprint Corp. Common Stock - 800 shares $ 21,311 $ 16,064
Starbucks Corp. Common Stock - 319 shares 6,663 6,077
Statoil ASA Common Stock - 1,001 shares 6,677 6,557
Stellent Inc. Common Stock - 38 shares 1,549 1,123
Stemcells Inc. Common Stock - 1,000 shares 4,538 3,490
Stryker Corp. Common Stock - 120 shares 6,281 7,004
Sun Microsystems Inc. Common Stock - 11,066 shares 293,565 136,112
Sunguard Data Sys Inc. Common Stock - 181 shares 4,498 5,236
Superconductor Technologies Common Stock - 100 shares 3,725 650
Supergen Inc. Common Stock - 2,587 shares 58,904 37,046
Symantec Corp. Common Stock - 153 shares 9,866 10,148
Symyx Tech Inc. Common Stock - 200 shares 4,650 4,248
Syngenta Common Stock - 711 shares 6,577 7,537
TDK Corp. Common Stock - 190 shares 15,221 9,215
TJX Cos Inc. Common Stock - 187 shares 6,750 7,454
Telecom Italia Common Stock - 130 shares 5,976 11,115
Telefonos M SA RP L Common Stock - 1,338 shares 18,128 46,857
Tellabs Inc. Common Stock - 200 shares 12,450 2,992
Teraforce Tech Corp. Common Stock - 4,200 shares 18,118 353
Texas Instruments Common Stock - 7,700 shares 478,651 215,600
3Com Corp. Common Stock - 110 shares 1,134 702
Tibco Software Inc. Common Stock - 105 shares 8,897 1,568
Tiffany & Co. Common Stock - 141 shares 4,299 4,437
Topps Inc. Common Stock - 500 shares 5,335 6,075
Total SA Common Stock - 265 shares 8,246 18,614
Toyota Motor Corp. Common Stock - 70 shares 5,935 3,567
</TABLE>
30
<PAGE>
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
EIN 77-00142070 PLAN NO. 002
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 2001
<TABLE>
<CAPTION>
( a ) ( b ) ( c ) ( d ) ( e )
Description of Investment Including
Identity of Issue, Borrower, Maturity Date, Rate of Interest,
Lessor, or Similar Party Collateral, Par or Maturity Value Cost Current Value
- ------ ------------------------------------- -------------------------------------------- ----------- ------------
<S> <C> <C> <C> <C>
Trans World Airlines Inc. Common Stock - 500 shares $ 2,888 $ 5
Transcanada Pipeline Common Stock - 500 shares 10,700 6,255
Transmeta Corp. Common Stock - 140 shares 6,236 321
Triangle Pharms Inc. Common Stock - 1,000 shares 6,913 4,010
Trinity Biotech Common Stock - 2,000 shares 3,825 3,040
Tyco Intl. Ltd. Common Stock - 200 shares 10,231 11,780
UAL Corp. Common Stock - 200 shares 9,425 2,700
USX Marathon Group Common Stock - 1,500 shares 40,139 45,000
US Oncology Inc. Common Stock - 1,100 shares 8,822 8,294
USA Education Inc. Common Stock - 113 shares 7,669 9,494
Unilever Common Stock - 636 shares 26,043 36,640
Union Pacific Corp. Common Stock - 206 shares 8,775 11,740
United Parcel Services Common Stock - 315 shares 21,838 17,168
US Air Group Inc. Common Stock - 1,000 shares 16,600 6,340
United Health Group Inc. Common Stock - 600 shares 17,061 42,462
Universal Health Realty Common Stock - 800 shares 15,528 18,800
Universal Health Svcs Common Stock - 200 shares 4,839 8,556
Univision Communications Common Stock - 429 shares 14,372 17,357
Unocal Corp. Common Stock - 545 shares 19,229 19,658
Upgrade Intl. Corp. Common Stock - 50 shares 3,354 39
Valero Refng & Mktng Co. Common Stock - 121 shares 5,129 4,613
Varco Intl Inc. Common Stock - 1,000 shares 8,100 14,980
Vast Solutions Inc. Common Stock - 90 shares 4,620 -
Ventro Corp. Common Stock - 550 shares 11,625 215
Verisign Inc. Common Stock - 433 shares 47,011 16,471
Verizon Communications Common Stock - 3,889 shares 135,245 184,549
</TABLE>
31
<PAGE>
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
EIN 77-00142070 PLAN NO. 002
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 2001
<TABLE>
<CAPTION>
( a ) ( b ) ( c ) ( d ) ( e )
Description of Investment Including
Identity of Issue, Borrower, Maturity Date, Rate of Interest,
Lessor, or Similar Party Collateral, Par or Maturity Value Cost Current Value
- ------ ------------------------------------- -------------------------------------------- ----------- ------------
<S> <C> <C> <C> <C>
Veritas Software Co. Common Stock - 144 shares $ 7,308 $ 6,456
Viacom Inc. Common Stock - 1,050 shares 30,786 46,463
Viacom Inc. CL B Common Stock - 390 shares 23,520 17,219
Viador Inc. Common Stock - 1,000 shares 19,688 60
Vicon Indust Inc. Common Stock - 500 shares 2,075 2,280
Visionics Corporation Common Stock - 100 shares 1,578 1,443
Visteon Corp. Common Stock - 26 shares 167 391
Visx Inc. Common Stock - 200 shares 5,350 2,650
Vivendi Universal Common Stock - 254 shares 19,922 13,663
Vixel Corp. Common Stock - 500 shares 3,700 925
Vodavi Technology Inc. Common Stock - 500 shares 2,684 653
Vodafone Grp Common Stock - 550 shares 25,898 14,124
Vulcan Materials Co. Common Stock - 165 shares 6,980 7,910
Wachovia Corp. Common Stock - 495 shares 19,874 15,523
Wal mart Stores Inc. Common Stock - 1,765 shares 90,681 101,576
Washington Mut Inc. Common Stock - 150 shares 4,893 4,905
Westell Technologies Inc. Common Stock - 300 shares 10,793 792
Williams Sonoma Inc. Common Stock - 160 shares 5,828 6,864
Wind Riv Sys Inc. Common Stock - 1,450 shares 51,518 25,970
Worldcom Inc. Common Stock - 6,760 shares 155,444 95,181
MCI Group-Worldcom Inc. Common Stock - 1,114 shares 14,893 14,148
Worldwide Restaurant Common Stock - 2,000 shares 5,088 2,380
XO Communications Common Stock - 1,680 shares 11,249 161
Xcel Energy Inc. Common Stock - 183 shares 4,684 5,076
Xilinx Inc. Common Stock - 150 shares 10,278 5,858
Xerox Corp. Common Stock - 966 shares 21,852 10,066
</TABLE>
32
<PAGE>
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
EIN 77-00142070 PLAN NO. 002
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 2001
<TABLE>
<CAPTION>
( a ) ( b ) ( c ) ( d ) ( e )
Description of Investment Including
Identity of Issue, Borrower, Maturity Date, Rate of Interest,
Lessor, or Similar Party Collateral, Par or Maturity Value Cost Current Value
- ------ ------------------------------------- -------------------------------------------- ----------- ------------
<S> <C> <C> <C> <C>
Yahoo Inc. Common Stock - 1,016 shares $ 63,468 $ 18,024
Zimmer Holdings Inc. Common Stock - 40 shares 893 1,223
Zurich Finl Svcs Common Stock - 380 shares 20,309 8,854
Global Crossing Ltd. Preferred Stock - 145 shares 13,321 181
Repsol Intl Capital Ltd. Preferred Stock - 800 shares 20,000 18,360
AES Trust VII Preferred Stock - 315 shares 16,340 8,978
ABN Amro Preferred Stock - 1,000 shares 25,517 25,170
Alabama Pwr Preferred Stock - 400 shares 10,000 9,988
Allstate Corporation Preferred Stock - 2,000 shares 50,000 50,400
American Exp Co. Preferred Stock - 1,000 shares 25,000 25,230
BankAmerica Preferred Stock - 1,000 shares 25,000 25,420
Bethlehem Steel Preferred Stock - 173 shares 8,432 279
Bank of New York Preferred Stock - 1,000 shares 25,000 25,280
Calpine Captl Trst Preferred Stock - 205 shares 11,778 6,663
Duke Energy Preferred Stock - 1,000 shares 25,000 25,050
Electronic Data Systems Preferred Stock - 155 shares 7,761 8,262
Enterprise Cap Tr I Preferred Stock - 600 shares 15,000 14,760
Enterprise Cap Tr III Preferred Stock - 1,000 shares 25,000 23,800
Equity Office Properties Preferred Stock - 200 shares 7,900 9,160
Equity Residential Properties Preferred Stock - 955 shares 23,254 24,162
Georgia Pwr Preferred Stock - 400 shares 10,000 9,900
Harris Preferred Cap Cor Preferred Stock - 400 shares 10,000 9,840
Hartford Life Preferred Stock - 1,000 shares 25,517 25,050
Host Marriott Preferred Stock - 240 shares 9,226 10,311
International Paper Preferred Stock - 190 shares 8,509 8,480
KCPL Financing I Preferred Stock - 400 shares 10,000 10,092
</TABLE>
33
<PAGE>
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
EIN 77-00142070 PLAN NO. 002
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 2001
<TABLE>
<CAPTION>
( a ) ( b ) ( c ) ( d ) ( e )
Description of Investment Including
Identity of Issue, Borrower, Maturity Date, Rate of Interest,
Lessor, or Similar Party Collateral, Par or Maturity Value Cost Current Value
- ------ ------------------------------------- -------------------------------------------- ----------- ------------
<S> <C> <C> <C> <C>
MCI Capital Preferred Stock - 1,500 shares $ 38,750 $ 36,750
* Merrill Lynch Capital Tr I Preferred Stock - 3,000 shares 75,000 78,360
* Merrill Lynch Capital Tr II Preferred Stock - 400 shares 10,000 10,552
* Merrill Lynch Pfd Sers III Preferred Stock - 2,000 shares 50,000 49,900
Met Life Inc. Preferred Stock - 85 shares 4,440 8,432
NB Capital Trust I Preferred Stock - 1,750 shares 45,023 43,785
National Australia Bank Preferred Stock - 790 shares 20,181 23,700
Newell Financial Trust I Preferred Stock - 220 shares 10,306 8,188
Plc Capital Trust Preferred Stock - 600 shares 15,000 14,880
PP&L Capital Trust Preferred Stock - 1,100 shares 27,500 28,325
Pwg Capital Trust II Preferred Stock - 800 shares 20,705 20,120
Pacificorp Preferred Stock - 900 shares 23,171 21,600
Placer Dome Inc. Preferred Stock - 2,000 shares 51,625 47,960
Potomac Elec Pwr Co. Preferred Stock - 900 shares 22,500 22,419
Prudential Financial Inc. Preferred Stock - 115 shares 6,054 6,693
Raytheon Company Preferred Stock - 120 shares 6,004 6,690
Reliastar Financing Preferred Stock - 2,200 shares 55,721 55,880
Sealed Air Corp. Preferred Stock - 245 shares 8,146 10,658
Simon Property Group Inc. Preferred Stock - 1,500 shares 37,500 39,000
Suiza Capital Trust II Preferred Stock - 150 shares 5,941 6,189
UDS Capital I Preferred Stock - 500 shares 12,500 12,350
US Bancorp Capital II Preferred Stock - 1,100 shares 27,500 27,379
Union Pacific Cap Trust Preferred Stock - 175 shares 7,755 8,714
Unit Washtn Mut Cap TR I Preferred Stock - 135 shares 7,665 6,404
Weingarten Realty Invstr. Preferred Stock - 1,000 shares 25,000 24,900
Aim Europe Growth Fund 16,932 9,897
</TABLE>
34
<PAGE>
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
EIN 77-00142070 PLAN NO. 002
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 2001
<TABLE>
<CAPTION>
( a ) ( b ) ( c ) ( d ) ( e )
Description of Investment Including
Identity of Issue, Borrower, Maturity Date, Rate of Interest,
Lessor, or Similar Party Collateral, Par or Maturity Value Cost Current Value
- ------ ------------------------------------- -------------------------------------------- ----------- ------------
<S> <C> <C> <C> <C>
Aim America Value Fund $ 189,100 $ 178,483
Aim Global Telecomm Fund 55,222 13,378
Aim Constellation Fund 29,941 19,684
Aim Aggressive Growth Fund 21,668 14,244
Aim Blue Chip Fund 320,145 241,935
Aim High Yield Fund 13,245 6,833
Aim Value Fund 32,981 22,866
Aim Balanced Fund 22,544 21,498
Alger Growth Portfolio 2,878 2,112
Alger Midcap Growth 3,088 2,922
Alger Retirement Fund 25,000 25,960
Alliance Premier Growth Fund Class A 170,270 107,757
Alliance Premier Growth Fund ADV CL 47,806 33,547
Alliance Technology Fund 82,230 60,703
Captial World Growth and Income Fund 2,517 2,744
Davis NY Venture Fund 122,738 120,141
Federated Aggresive Growth Fund 18,527 7,118
Federated European Growth Fund 17,053 11,375
Federated International Small Company Fund 45,000 20,407
Fidelity Equity Portfolio Growth Fund 53,164 35,274
Fidelity Series I Mid Cap Fund 10,926 8,277
Fidelity High Yield Portfolio 66,962 44,903
Franklin Calif 250 Growth Fund 279,863 188,479
Ivy Fund Emerging Growth Fund 81,674 28,115
John Hancock Growth & Income Fund 188,476 130,878
John Hancock High Yield Bond Fund 35,968 21,465
</TABLE>
35
<PAGE>
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
EIN 77-00142070 PLAN NO. 002
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 2001
<TABLE>
<CAPTION>
( a ) ( b ) ( c ) ( d ) ( e )
Description of Investment Including
Identity of Issue, Borrower, Maturity Date, Rate of Interest,
Lessor, or Similar Party Collateral, Par or Maturity Value Cost Current Value
- ------ ------------------------------------- -------------------------------------------- ----------- ------------
<S> <C> <C> <C> <C>
John Hancock Sovereign Bond Fund $ 59,516 $ 57,713
John Hancock Pacific Basin Equity Fund 12,399 10,640
John Hancock Global Technology Fund 13,500 4,236
Lord Abb Dev Growth Fund 6,582 6,513
MFS Total Return Fund 12,343 9,189
MFS High Income Fund 56,578 39,863
MFS Over-the-Counter Fund 3,896 2,537
Massachusetts Investors Inv Growth Stk Fund 154,282 118,621
Massachusetts Investors Investors Trust 40,314 33,615
* Merrill Lynch Focus Value Fund 16,565 15,754
* Merrill Lynch Euro Fund 36,529 27,318
* Merrill Lynch Equity Income Fund 11 9
* Merrill Lynch Global Allocation Fund 503,326 482,186
* Merrill Lynch Fundamentl Growth Fund 58,016 42,801
* Merrill Lynch Global Value Fund 93,405 74,653
* Merrill Lynch Global Tech Fund 216,901 113,141
* Merrill Lynch Latin America Fund 25,628 19,154
* Merrill Lynch Dragon Fund 33,414 15,774
* Merrill Lynch Healthcare Fund 19,115 18,008
* Merrill Lynch Basic Value Fund CL A 586,634 485,789
* Merrill Lynch Basic Value Fund CL B 68,267 54,143
* Merrill Lynch Balanced Capital Fund 264,352 223,682
* Merrill Lynch Small Cap Value Fund 147,355 156,401
* Merrill Lynch Global Growth Fund 433,000 359,451
* Merrill Lynch S&P 500 Index Fund 212,773 221,047
* Merrill Lynch Small Cap Index Fund 1,213 1,212
</TABLE>
36
<PAGE>
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
EIN 77-00142070 PLAN NO. 002
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 2001
<TABLE>
<CAPTION>
( a ) ( b ) ( c ) ( d ) ( e )
Description of Investment Including
Identity of Issue, Borrower, Maturity Date, Rate of Interest,
Lessor, or Similar Party Collateral, Par or Maturity Value Cost Current Value
- ------ ------------------------------------- -------------------------------------------- ----------- ------------
<S> <C> <C> <C> <C>
* Merrill Lynch Pacific Fund $ 22,678 $ 17,218
* Merrill Lynch Corp Bond High Income Fund 140,727 90,214
* Merrill Lynch Bond Fund 37,502 37,268
Munder Framlingtn Health Care Fund 62,254 54,236
Munder NetNet Fund 411,045 151,639
Oppenheimer International Growth Fund 5,635 3,759
Oppenheimer Global Fund 25,000 25,342
PIMCO Capital Appreciation Fund 16,975 11,849
PIMCO Renaissance Fund 181,624 184,927
PIMCO Innovation Fund 123,310 58,398
PIMCO High Yield Fund 22,883 19,312
PIMCO Total Return Fund 6,225 6,553
Pilgrim Intl Small-Cap Gr Fund 55,379 30,870
Seligman Communications & Information Fund 56,169 41,029
State Street Aurora Fund 175,000 200,185
State Street Government Income Fund 63,740 61,904
Templeton Developing Markets Trust 16,957 12,391
Templeton Foreign Fund 80,991 73,964
Van Kampen American Cap Fund 66,932 31,419
Washington Mutual Investors Fund Inc. 52,449 44,733
United States Treasury Note 8.125% Due 08/15/21 93,736 98,344
United States Treasury Bond 6.000% Due 02/15/26 21,047 20,578
United States Treasury Note 6.500% Due 05/15/05 147,046 146,752
United States Treasury Note 5.625% Due 02/15/06 29,390 30,554
United States Treasury Note 5.875% Due 11/15/04 45,714 45,513
United States Treasury Note 6.500% Due 02/15/10 28,254 27,442
</TABLE>
37
<PAGE>
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
EIN 77-00142070 PLAN NO. 002
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 2001
<TABLE>
<CAPTION>
( a ) ( b ) ( c ) ( d ) ( e )
Description of Investment Including
Identity of Issue, Borrower, Maturity Date, Rate of Interest,
Lessor, or Similar Party Collateral, Par or Maturity Value Cost Current Value
- ------ ------------------------------------- -------------------------------------------- ----------- ------------
<S> <C> <C> <C> <C>
Alza Corp. Corporate Bond - 10,000 shares 0% Due 07/28/20 $ 7,185 $ 8,310
Amazon.com Corporate Bond - 13,000 shares 4.750% Due 02/01/09 6,399 6,617
Anadarko Petroleum Corp. Corporate Bond - 16,000 shares 0% Due 03/07/20 11,194 11,221
Anixter International Lyons Corporate Bond - 31,000 shares 0% Due 06/28/20 7,766 8,922
Arrow Electronic Inc. Corporate Bond - 18,000 shares 0% Due 02/21/21 8,015 8,557
Atmel Corp. Corporate Bond - 11,000 shares 0% Due 04/21/18 6,471 5,656
Carnival Corp. Corporate Bond - 4,000 shares 2.000% Due 04/15/21 3,766 3,994
Cendant Corp. Corporate Bond - 11,000 shares 0% Due 02/13/21 8,262 8,076
Clear Channel Communications Corporate Bond - 10,000 shares 1.500% Due 12/01/02 10,043 9,541
Conexant Systems inc. Corporate Bond - 9,000 shares 4.000% Due 02/01/07 7,389 4,176
Countrywide Corporate Bond - 8,000 shares 0% Due 02/08/31 5,732 5,790
Devon Energy Corporation Corporate Bond - 9,000 shares 4.900% Due 08/15/08 8,823 9,276
Devon Energy Corporation Corporate Bond - 15,000 shares 0% Due 06/27/20 7,645 6,804
Diamond Offshore Drilling Inc. Corporate Bond - 9,000 shares 1.500% Due 04/15/31 8,050 8,299
First Data Corporation Corporate Bond - 7,000 shares 2.000% Due 03/01/08 7,542 7,368
Health Management Assoc. Corporate Bond - 12,000 shares 0.250% Due 08/16/20 8,094 8,311
Interim Services Inc. Corporate Bond - 7,000 shares 4.500% Due 06/01/05 6,169 5,613
Jones Apparel Group Corporate Bond - 14,000 shares 0% Due 02/01/21 7,867 7,217
Liberty Media Group Corporate Bond - 7,000 shares 4.000% Due 11/15/29 7,782 5,207
Lowe's Cos Inc. Corporate Bond - 11,000 shares 0% Due 02/16/22 7,926 9,295
Masco Corp. Corporate Bond - 19,000 shares 0% Due 07/20/31 7,640 7,839
News America Inc. Corporate Bond - 16,000 shares 0% Due 02/28/21 8,071 7,886
PMI Group Inc. Corporate Bond - 7,000 shares 2.500% Due 07/15/21 7,257 7,430
Royal Caribbean Cruise Corporate Bond - 37,000 shares 0% Due 02/02/21 14,496 11,840
Solectron Corporation Corporate Bond - 15,000 shares 0% Due 05/08/20 10,275 7,970
Thermo Electron Corp. Corporate Bond - 9,000 shares 4.000% Due 01/15/05 7,808 8,510
</TABLE>
38
<PAGE>
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
EIN 77-00142070 PLAN NO. 002
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 2001
<TABLE>
<CAPTION>
( a ) ( b ) ( c ) ( d ) ( e )
Description of Investment Including
Identity of Issue, Borrower, Maturity Date, Rate of Interest,
Lessor, or Similar Party Collateral, Par or Maturity Value Cost Current Value
- ------ ------------------------------------- -------------------------------------------- ----------- ------------
<S> <C> <C> <C> <C>
Times Mirror Company Corporate Bond - 14,000 shares 0% Due 04/15/17 $ 6,163 $ 8,112
Tyco Internatl Ltd. Corporate Bond - 10,000 shares 0% Due 11/17/20 7,812 7,847
Telefonos DE Mexico S.A. Corporate Bond - 6,000 shares 4.250% Due 06/15/04 7,705 7,651
CMA Money Fund 6,680,064 6,680,064
Cedar Fair Dep Unt Limited Partnership 100,125 123,950
Kaneb Pln Prt Sr Prf Limited Partnership 108,400 163,920
Kinder Morgan Energy Partners Limited Partnership 3,544 7,564
* Participant Loans 6% - 10.5% - 917,581
</TABLE>
* Represents parties-in-interest
39
<PAGE>
CONSENT OF MORRIS, DAVIS & CHAN, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement on
Form S-8 (No. 333-87736) of Johnson & Johnson Corporation pertaining to the ALZA
Corporation Tax Deferral Investment Plan of our report dated April 17, 2002 with
respect to the financial statements and schedules of the ALZA Corporation Tax
Deferral Investment Plan included in this Annual Report (Form 11-K) for the year
ended December 31, 2001.
Morris, Davis & Chan LLP
Oakland, California
June 25, 2002
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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